UNITED STATES 
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 6-K
 
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934
 

For the month of June 2024
 
Commission File Number: 001-41635

 
Lavoro Limited
(Exact name of registrant as specified in its charter)

 
Av. Dr. Cardoso de Melo, 1450, 4th floor, office 401
São Paulo — SP, 04548-005, Brazil
+55 (11) 4280-0709
(Address of principal executive office)

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



    

TABLE OF CONTENTS
 
 


    

SIGNATURE
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
  Lavoro Limited
   
   
   By:/s/ Ruy Cunha
    Name:Ruy Cunha
    Title:Chief Executive Officer
Date: June 3, 2024
 
 


    

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Content
Unaudited interim condensed consolidated financial statements
Interim condensed consolidated statement of financial position
Interim condensed consolidated statement of profit or loss
Interim condensed consolidated statement of comprehensive income or loss
Interim condensed consolidated statement of changes in equity
Interim condensed consolidated statement of cash flows

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28Other operating (income) expenses, net
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30

Interim condensed consolidated statement of financial
As of March 31, 2024
(In thousands of Brazilian reais - R$, except if otherwise indicated)
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NotesMarch 31,
2024		June 30,
2023
Assets
Current assets
Cash equivalents4394,365 564,294 
Restricted cash19150,339 — 
Trade receivables55,405,117 2,667,057 
Inventories81,958,197 1,868,204 
Taxes recoverable967,105 57,001 
Derivative financial instruments756,650 40,410 
Commodity forward contracts10136,866 114,861 
Advances to suppliers147,107 192,119 
Other assets92,712 32,701 
Total current assets8,408,458 5,536,646 
Non-current assets
Restricted cash19— 139,202 
Trade receivables5133,680 41,483 
Other assets5,714 8,390 
Commodity forward contracts104,000 
Judicial deposits 10,166 8,820 
Right-of-use assets11205,663 173,679 
Taxes recoverable9361,772 282,903 
Deferred tax assets20410,991 329,082 
Investments6,083 — 
Property, plant and equipment12225,764 196,588 
Intangible assets13980,432 807,192 
Total non-current assets2,344,265 1,987,339 
Total assets10,752,723 7,523,984 
The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.
3
Interim condensed consolidated statement of financial
As of March 31, 2024
(In thousands of Brazilian reais - R$, except if otherwise indicated)
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NotesMarch 31,
2024		June 30, 2023
Liabilities
Current liabilities
Trade payables145,554,838 2,575,701 
Trade payables – Supplier finance14(c)- 26,157 
Lease liabilities1196,394 85,865 
Borrowings151,280,083 922,636 
Agribusiness Receivables Certificates161,101 — 
Obligations to FIAGRO quota holders175,168 150,018 
Payables for the acquisition of subsidiaries17214,109 221,509 
Derivative financial instruments765,039 44,008 
Commodity forward contracts10128,658 207,067 
Salaries and social charges175,238 223,376 
Taxes payable43,507 37,105 
Dividends payable1,804 1,619 
Warrant liabilities1925,956 36,446 
Liability for FPA Shares19150,339 — 
Advances from customers22399,761 488,578 
Other liabilities48,550 34,388 
Total current liabilities8,360,545 5,054,473 
Non-current liabilities
Trade payables147,219 2,547 
Lease liabilities11121,315 98,554 
Borrowings1543,693 42,839 
Agribusiness Receivables Certificates16402,648 — 
Commodity forward contracts10140 — 
Payables for the acquisition of subsidiaries1723,408 53,700 
Provision for contingencies2114,040 8,845 
Liability for FPA Shares19— 139,133 
Other liabilities587 223 
Taxes payable795 963 
Deferred tax liabilities2017,571 12,351 
Total non-current liabilities631,416 359,155 
Equity24
Share Capital591 591 
Additional Paid-in Capital2,116,908 2,134,339 
Capital reserve27,987 14,533 
Other comprehensive loss(3,174)(28,634)
Accumulated losses(635,145)(260,710)
4
Interim condensed consolidated statement of financial
As of March 31, 2024
(In thousands of Brazilian reais - R$, except if otherwise indicated)
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Equity attributable to shareholders of the Parent Company1,507,167 1,860,119 
Non-controlling interests253,595 250,238 
Total equity1,760,762 2,110,357 
Total liabilities and equity10,752,723 7,523,984 
The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.
5
Interim condensed consolidated statement of profit or loss
(In thousands of Brazilian reais - R$, except if otherwise indicated)
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NotesThree-month period ended March 31,Nine-month period ended March 31,
2024202320242023
Revenue252,545,824 2,526,155 7,977,682 8,032,330 
Cost of goods sold 26(2,247,938)(2,152,758)(6,875,929)(6,533,610)
Gross profit297,886 373,397 1,101,753 1,498,720 
Operating expenses
Sales, general and administrative expenses26(349,226)(303,900)(1,049,584)(912,221)
Other operating (expenses) income, net281,993 (332,235)23,905 (300,525)
Share of profit of an associate2,509 756 
Operating profit (loss)(46,838)(262,738)76,830 285,974 
Finance Income (costs)
Finance income27124,510 96,903 321,808 256,786 
Finance costs27(317,255)(251,850)(831,322)(717,335)
Other financial income (costs)27(53,455)2,441 (50,335)(17,751)
Loss before income taxes(293,038)(415,244)(483,019)(192,326)
Income taxes
Current 20(8,307)(3,618)23,642 (17,921)
Deferred20(19,596)32,864 76,620 88,138 
Loss for the period(320,941)(385,998)(382,757)(122,109)
Attributable to:
Equity holders of the parent(292,887)(387,547)(374,435)(178,237)
Non-controlling interests(28,054)1,549 (8,322)56,128 
Loss per share
6
Interim condensed consolidated statement of profit or loss
(In thousands of Brazilian reais - R$, except if otherwise indicated)
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NotesThree-month period ended March 31,Nine-month period ended March 31,
2024202320242023
Basic, profit (loss) for the period attributable to net investment of the parent/ equity holders of the parent24(2.58)(3.41)(3.30)(1.57)
Diluted, profit (loss) for the period attributable to net investment of the parent/ equity holders of the parent24(2.58)(3.41)(3.30)(1.57)
The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.
7
Interim consolidated statement of comprehensive income or loss
(In thousands of Brazilian reais - R$, except if otherwise indicated)
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Three-month period ended March 31,Nine-month period ended March 31,
2024202320242023
Profit (loss) for the period(320,941)(385,998)(382,757)(122,109)
Items that may be reclassified to profit or loss in subsequent periods
Exchange differences on translation of foreign operations8,730 6,299 26,070 (22,212)
Total comprehensive income (loss) for the period(312,211)(379,699)(356,687)(144,321)
Attributable to:
Net investment of the parent/ equity holders of the parent(284,601)(382,278)(348,975)(200,472)
Non-controlling interests(27,610)2,579 (7,712)56,151 
The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.
8
Interim condensed consolidated statement of changes in equity
For the nine-month period ended March 31, 2024 and 2023
(In thousands of Brazilian reais - R$, except if otherwise indicated)
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NotesNet investment of the ParentShare CapitalAdditional Paid-in CapitalCapital reserveAccumulated lossesOther comprehensive lossTotalNon-controlling interestTotal
Equity/ Net
Investment
At June 30, 20221,451,647 — — — — — 1,451,647 218,080 1,669,727 
Capital contributions60,880 — — — — — 60,880 — 60,880 
Acquisition of non-controlling interests(51,324)— — — — — (51,324)(36,176)(87,500)
Non-controlling dilution on capital contributions(7,475)— — — — — (7,475)7,475 — 
Dividends paid— — — — — — — (3,485)(3,485)
Acquisition of subsidiaries8,809 — — — — — 8,809 9,707 18,516 
Share-based payment12,112 — — — — — 12,112 — 12,112 
Profit for the period209,310 — — — — — 209,310 54,579 263,889 
Exchange differences on translation of foreign operations(27,481)— — — — — (27,481)(1,007)(28,488)
Pre reorganization1,656,478 — — — — — 1,656,478 249,173 1,905,651 
Changes in parent company's net investment(1,656,478)514 1,485,135 12,112 209,310 (50,593)— — — 
SPAC merger transaction— 77 670,256 — — — 670,333 — 670,333 
Foreign currency translation differences— — — — — 5,422 5,422 1,030 6,452 
Profit (loss) for the period— — — — (387,547)— (387,547)1,549 (385,998)
Stock option plan— — — 535 — — 535 — 535 
At March 31, 2023— 591 2,155,391 12,647 (178,237)(45,171)1,945,221 251,752 2,196,973 
At June 30, 2023— 591 2,134,339 14,533 (260,710)(28,634)1,860,119 250,238 2,110,357 
Exchange differences on translation of foreign operations— — — — — 25,460 25,460 610 26,070 
Share-based payment24— — — 13,454 — — 13,454 — 13,454 
Acquisition of subsidiaries18— — — — — — — 2,007 2,007 
Other— — (17,431)— — — (17,431)9,062 (8,369)
9
Interim condensed consolidated statement of changes in equity
For the nine-month period ended March 31, 2024 and 2023
(In thousands of Brazilian reais - R$, except if otherwise indicated)
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Loss for the period— — — — (374,435)— (374,435)(8,322)(382,757)
At March 31, 2024 — 591 2,116,908 27,987 (635,145)(3,174)1,507,167 253,595 1,760,762 
The accompanying notes are an integral part of the interim consolidated financial statements.
10
Interim condensed consolidated statement of cash flows
For the nine-month period ended March 31, 2024
(In thousands of Brazilian reais - R$, except if otherwise indicated)
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NotesMarch 31, 2024March 31, 2023
Operating activities:
Loss before income taxes(483,017)(192,327)
Adjustments to reconcile profit (loss) for the period to net cash flow:
Allowance for expected credit losses 26118,732 39,442 
Listing expense— 319,554 
Foreign exchange differences27(678)17,988 
Accrued interest expenses27235,211 246,221 
Interest arising from revenue contracts27(275,607)(229,681)
Accrued interest on trade payables27517,806 435,931 
Loss (gain) on derivatives27(7,623)(68,278)
Interest from tax benefits27(17,736)(11,437)
Fair value on commodity forward contracts2769,125 80,964 
Gain on changes in fair value of warrants19(10,491)(7,744)
Amortization of intangibles2653,018 52,921 
Amortization of right-of-use assets2664,669 38,160 
Depreciation 2614,985 12,512 
Losses and damages of inventories264,149 11,061 
Provisions for contingencies5,044 6,890 
Share-based payment2413,454 12,647 
Share of profit of an associate(756)— 
Others(3,163)26,286 
Changes in operating assets and liabilities:
Assets
Trade receivables(2,900,443)(2,592,910)
Inventories(1,043)(200,666)
Advances to suppliers52,348 161,193 
Derivative financial instruments12,413 (8,085)
Taxes recoverable (68,772)(115,664)
Other receivables(236,461)(77,216)
Liabilities
Trade payables2,867,788 1,764,935 
Advances from customers(93,591)(38,834)
Salaries and social charges(52,624)27,809 
Taxes payable18,208 41,250 
11
Interim condensed consolidated statement of cash flows
For the nine-month period ended March 31, 2024
(In thousands of Brazilian reais - R$, except if otherwise indicated)
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Other payables53,168 14,204 
Interest paid on borrowings and FIAGRO quota holders(195,546)(76,159)
Interest paid on acquisitions of subsidiary(8,408)(3,258)
Interest paid on trade payables and lease liabilities(574,451)(151,026)
Interest received from revenue contracts291,082 94,131 
Income taxes paid/received14,595 (28,173)
Net cash flows used in operating activities(524,615)(397,359)
Investing activities:
Acquisition of subsidiary, net of cash acquired(198,637)(121,410)
Additions to property, plant and equipment and intangible assets(73,458)(52,540)
Proceeds from the sale of property, plant and equipment3,537 1,289 
Net cash flows used in investing activities(268,558)(172,661)
Financing activities:
Proceeds from borrowings151,900,726 1,142,491 
Repayment of borrowings 15(1,618,396)(624,453)
Proceeds from Agribusiness Receivables Certificates, net of transaction cost 16402,648 — 
Payment of principal portion of lease liabilities11(63,633)(36,262)
Proceeds from FIAGRO quota holders, net of transaction costs16137,496 147,119 
Repayment of FIAGRO quota holders16(109,350)— 
Trade payables – Supplier finance14(c)(26,157)4,918 
Acquisition of non-controlling interests(52)(87,500)
Dividend payments (i)(8,667)(3,485)
Proceeds from SPAC Merger— 463,909 
Capital contributions— 60,880 
Net cash flows provided by financing activities614,615 1,067,617 
Net increase in cash equivalents(178,558)497,597 
Net foreign exchange difference8,629 (12,924)
Cash equivalents at beginning of the period564,294 254,413 
Cash equivalents at end of the period394,365 739,085 
12
Interim condensed consolidated statement of cash flows
For the nine-month period ended March 31, 2024
(In thousands of Brazilian reais - R$, except if otherwise indicated)
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(i) Dividend payments made to non-controlling shareholders from acquired subsidiaries.

The accompanying notes are an integral part of the unaudited interim condensed consolidated financial statements.
13
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
1.Background information
Lavoro Limited is a Cayman Island exempted company incorporated on August 22, 2022.
Lavoro Limited is a public company listed with the US Securities and Exchange Commission (“SEC”) and its shares are traded on Nasdaq Global Select Market under ticker symbol “LVRO”.
Lavoro Limited (“Lavoro” and collectively with its subsidiaries, the “Group”) is one of the main agricultural input distribution platforms in Latin America, with relevant agricultural input distribution operations in Brazil and Colombia, and an agricultural input trading company in Uruguay. Also, as a result of a verticalization strategy, the Group produces agricultural biological and special fertilizers products through its own facilities. The Group offers farmers a complete portfolio of products and services with the goal of helping farmer customers succeed by providing multi-channel support.
As of March 31, 2024, the Group is controlled by investment funds managed by Patria Investments Limited (“Patria”), a global alternative asset manager with shares listed on NASDAQ.

Seasonality
Agribusiness is subject to seasonality throughout the year, especially due to the crop cycles that depend on specific weather conditions. Operations, especially in Brazil, have unique weather conditions compared to other countries producing agricultural commodities, making it possible to harvest two to three crops in the same area per year. Thus, considering that the activities of the Group’s customers are directly related to crop cycles, which are seasonal in nature, revenues and cash flows from sales may also be substantially seasonal.
The sale of our products is dependent upon planting and growing seasons, which vary from year to year, and are expected to result in both highly seasonal patterns and substantial fluctuations in quarterly sales and profitability. Demand for our products is typically stronger between October and December, with a second period of strong demand between January and March. The seasonality of agricultural inputs results in our sales volumes and net sales typically being the highest during the period between September to February and our working capital and total debt requirements typically being the highest just after the end of this period.
14
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
2.Significant accounting policies
(a)Basis for preparation of the unaudited interim condensed consolidated financial statements

The unaudited interim condensed consolidated financial statements for the nine-month period ended March 31, 2024 have been prepared in accordance with IAS 34 Interim Financial Reporting. The Group has prepared the financial statements on the basis that it will continue to operate as a going concern. The Directors consider that there are no material uncertainties that may cast significant doubt over this assumption. They have formed a judgement that there is a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future, and not less than 12 months from the end of the reporting period.
The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements and should be read in conjunction with the Group’s annual consolidated financial statements as of June 30, 2023.
These interim condensed consolidated financial statements as of March 31, 2024 and for the nine-month period ended March 31, 2024 and 2023 were authorized for issuance by the Board of Directors on June 03, 2024.
(b)New standards, interpretations and amendments adopted by the Group

The accounting policies adopted in the preparation of the unaudited interim condensed consolidated financial statements are consistent with those used in the preparation of the Group’s annual consolidated financial statements for the year ended June 30, 2023. The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.

Certain amendments applicable for the first time in 2024 and 2023 do not have an impact on
the interim consolidated financial statements of the Group.
(c)Basis of combination/consolidation procedures
All unrealized intra-group and intercompany balances, transactions, gains and losses relating to transactions between group companies were eliminated in full.
The interim condensed consolidated financial statements include the following subsidiaries of Lavoro Limited:
Equity interest
NameCore activitiesLocationMarch 31, 2024June 30, 2023
Corporate:
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
Lavoro Agro LimitedHoldingGeorge Town – Cayman Island100 %100 %
Lavoro America Inc.HoldingCalifornia - USA100 %100%
Lavoro Merger Sub II LimitedHoldingGeorge Town – Cayman Island100 %100 %
Lavoro Agro Cayman IIHoldingGeorge Town – Cayman Island100 %100 %
Lavoro Latam SLHoldingMadrid - Spain100 %100 %
Lavoro Uruguay S.A. (formerly Malinas SA)HoldingMontevideu – Uruguay100 %100 %
Lavoro Brazil:
Lavoro Agro Holding S.A.HoldingSão Paulo – Brazil100 %100 %
Lavoro Agrocomercial S.A. (ii)Distributor of agricultural inputs Rondonópolis – Brazil97.43 %97.42 %
Agrocontato Comércio e Representações de Produtos Agropecuários S.A. (ii)Distributor of agricultural inputs Sinop – Brazil97.43 %97.42 %
PCO Comércio, Importação, Exportação e Agropecuária Ltda. (ii)Distributor of agricultural inputs Campo Verde – Brazil97.43 %97.42 %
Agrovenci Distribuidora de Insumos Agrícolas Ltda. (MS) (ii)Distributor of agricultural inputs Chapadão do Sul – Brazil93.60 %93.11 %
Produtiva Agronegócios Comércio e Representação Ltda.Distributor of agricultural inputsParacatu – Brazil87.40 %87.40 %
Facirolli Comércio e Representação S.A. (Agrozap)Distributor of agricultural inputsUberaba – Brazil62.61%-62.61 %
Agrovenci Comércio, Importação, Exportação e Agropecuária Ltda. (ii)Distributor of agricultural inputsCampo Verde – Brazil97.43 %97.42 %
Central Agrícola Rural Distribuidora de Defensivos Ltda. (ii)Distributor of agricultural inputs Vilhena – Brazil97.43 %97.42 %
Distribuidora Pitangueiras de Produtos Agropecuários S.A. (ii)Distributor of agricultural inputs Ponta Grossa – Brazil93.60 %93.11 %
Produtec Comércio e Representações S.A.Distributor of agricultural inputs Cristalina – Brazil87.40 %87.40 %
Qualiciclo Agrícola S.A. (ii)Distributor of agricultural inputs Limeira – Brazil72.17 %66.75 %
Desempar Participações Ltda. (ii)Distributor of agricultural inputs Palmeira – Brazil93.60 %93.11 %
Denorpi Distribuidora de Insumos Agrícolas Ltda. (ii)Distributor of agricultural inputs Palmeira – Brazil93.60 %93.11 %
Deragro Distribuidora de Insumos Agrícolas Ltda. (ii)Distributor of agricultural inputsPalmeira – Brazil93.60 %93.11 %
Desempar Tecnologia Ltda. (ii)HoldingPalmeira – Brazil93.60 %93.11 %
Futuragro Distribuidora de Insumos Agrícolas Ltda. (ii)Distributor of agricultural inputs Palmeira – Brazil93.60 %93.11 %
16
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
Plenafértil Distribuidora de Insumos Agrícolas Ltda. (ii)Distributor of agricultural inputsPalmeira – Brazil93.60 %93.11 %
Realce Distribuidora de Insumos Agrícolas Ltda. (ii)Distributor of agricultural inputsPalmeira – Brazil93.60 %93.11 %
Cultivar Agrícola Comércio, Importação e Exportação S.A. (ii)Distributor of agricultural inputs Chapadão do Sul – Brazil93.60 %93.11 %
Nova Geração Comércio e Produtos Agrícolas Ltda. (ii)Distributor of agricultural inputsPinhalzinho – Brazil72.17 %66.75 %
Floema Soluções Nutricionais de Cultivos Ltda.Distributor of agricultural inputsUberaba – Brazil62.61 %62.61 %
Casa Trevo Participações S.A. (ii)HoldingNova Prata – Brazil79.56 %79.14 %
Casa Trevo Comercial Agrícola Ltda. (ii)Distributor of agricultural inputsNova Prata – Brazil79.56 %79.14 %
CATR Comercial AgrícolaLtda. (ii)Distributor of agricultural inputsNova Prata – Brazil79.56 %79.14 %
Sollo Sul Insumos Agrícolas Ltda. (ii)Distributor of agricultural inputsPato Branco – Brazil93.60 %93.11 %
Dissul Insumos Agrícolas Ltda. (ii)Distributor of agricultural inputsPato Branco – Brazil93.60 %93.11 %
Referência Agroinsumos Ltda. (i) (ii)Distributor of agricultural inputsDom Pedrito - Brazil65.52 %— %
Lavoro Agro Fundo de Investimento nas Cadeias Produtivas AgroindustriaisFIAGROSão Paulo – Brazil5.00 %5.00 %
CORAM - Comércio e Representações Agrícolas Ltda. (i) (ii)Distributor of agricultural inputsSão Paulo – Brazil72.17 %— %
Lavoro Colômbia:
Lavoro Colombia S.A.S.Holding Bogota – Colombia94.90 %94.90 %
Crop Care ColombiaDistributor of agricultural inputs Bogota - Colombia94.90 %94.90 %
Agricultura y Servicios S.A.S.Distributor of agricultural inputs Ginebra - Colombia94.90 %94.90 %
Grupo Cenagro S.A.S.Distributor of agricultural inputs Yumbo – Colombia94.90 %94.90 %
Cenagral S.A.S.Distributor of agricultural inputs Yumbo – Colombia94.90 %94.90 %
Grupo Gral S.A.S.Distributor of agricultural inputs Bogota - Colombia94.90 %94.90 %
Agrointegral Andina S.A.S.Distributor of agricultural inputsBogota – Colombia94.90 %94.90 %
Servigral Praderas S.A.S.Distributor of agricultural inputsBogota – Colombia94.90 %94.90 %
Agroquímicos para la Agricultura Colombiana S.A.S.Distributor of agricultural inputsBogota – Colombia94.90 %94.90 %
Provecampo S.A.S.Distributor of agricultural inputsEnvigado – Colombia94.90 %94.90 %
17
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
Crop Care:
Crop Care Holding S.A.HoldingSão Paulo – Brazil100.00 %100.00 %
Perterra Insumos Agropecuários S.A.Private label productsSão Paulo – Brazil100.00 %100.00 %
Araci Administradora de Bens S.A.Private label productsSão Paulo – Brazil100.00 %100.00 %
Union Agro S.A.Private label productsPederneiras – Brazil73.00 %73.00 %
Agrobiológica Sustentabilidade S.A.Private label productsSão Paulo – Brazil65.13 %65.13 %
Agrobiológica Soluções Naturais Ltda.Private label productsLeme – Brazil65.13 %65.13 %
Cromo Indústria Química LTDA. Private label productsEstrela - Brasil70.00 %70.00 %
Perterra Trading S.A.Private label productsMontevideu - Uruguay100.00 %100.00 %
(i)See note 18 of Acquisitions of subsidiaries.
(ii)Variations in equity interests are a result of capital contributions made between subsidiaries.
Additionally, the interim condensed consolidated financial statements include the following non-consolidated affiliate company:
Equity interest
NameCore activitiesLocationMarch 31, 2024June 30, 2023
Gestão e Transformação Consultoria S.A.ConsultingSão Paulo – Brazil40%40%

(d)Statement of cash flows

In 2024, cash outflows related to acquisitions of non-controlling interests are classified under net cash flows provided by financing activities. In 2023, this amount was classified under net cash flows used in investing activities.

While the effect of the change in classification of that cash flows from investing to financing is not material, management has retrospectively revised those periods for comparison purposes.

The retrospective changes in the comparative period can be summarized as follows:


18
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
Originally presentedEffects of Change in classificationAfter change in classification
Acquisition of subsidiary, net of cash acquired(87,500)87,500 — 
Net cash flows used in investing activities(226,220)87,500 (138,720)
Acquisition of non-controlling interests— (87,500)(87,500)
Net cash flows provided by financing activities1,042,878 (87,500)955,378 
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
3.Segment information
(a)Reportable segments by management

The chief operating decision-maker of the Group (the “CODM”) is the board of directors which is responsible for allocating resources among operating segments and assessing their performance and making strategic decisions.

The determination of the reportable segments is based on internal reports reviewed by the CODM, which include considerations in relation to risks and returns, organizational structure, etc. Certain expenses across segments are allocated based on reasonable allocation criteria, such as revenues or historical trends.
The Group’s reportable segments are the following:
•Brazil Cluster: comprising companies located in Brazil that sell agricultural inputs;
•LATAM Cluster: comprising companies located in Colombia that sell agricultural inputs;
•Crop Care Cluster: comprising companies that produce and import their own portfolio of proprietary products including off-patent crop protection and specialty products (e.g., biologicals and specialty fertilizers).


20
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
(b)Financial information by segment
Segment assets and liabilities as of March 31, 2024:
DescriptionBrazilLATAMCrop CareTotal reportable segmentsCorporate (i)Eliminations between segments (ii)Consolidated
Certain assets
Cash equivalents318,823 20,566 43,698 383,087 11,278 - 394,365 
Trade receivables4,800,040 375,173 654,034 5,829,247 - (290,451)5,538,796 
Inventories1,670,440 219,865 133,076 2,023,381 - (65,184)1,958,197 
Advances to suppliers140,018 1,442 5,647 147,107 - — 147,107 
Total assets9,113,076 759,540 1,068,183 10,940,799 1,684,107 (1,872,183)10,752,723 
Certain liabilities
Trade payables5,360,494 294,680 207,999 5,863,173 455 (301,571)5,562,057 
Borrowings879,712 121,084 311,860 1,312,656 - 11,120 1,323,776 
Advances from customers396,954 1,092 1,715 399,761 - — 399,761 
Total liabilities and equity9,113,076 759,540 1,068,183 10,940,799 1,684,107 (1,872,183)10,752,723 
(i)Corporate items refer to balances and expenses with certain corporate demands not directly related to any operating segment.
(ii)Transactions between the Crop Care segment and the Brazil segment.
21
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
Statement of profit or loss data for the three-month period ended March 31, 2024:
DescriptionBrazilLATAMCrop CareTotal reportable segmentsCorporate (i)Eliminations between segments (ii)Consolidated
Revenue2,227,787 250,120 109,472 2,587,379 - (41,556)2,545,823 
Cost of goods sold(2,012,378)(214,048)(64,320)(2,290,746)- 42,807 (2,247,939)
Sales, general and administrative expenses (iii)(262,608)(35,804)(43,579)(341,991)(7,235)- (349,226)
Share of profit of an associate4,399 - (669)3,730 (296,194)294,973 2,509 
Other operating income, net(55)(1,396)4,135 2,684 (691)- 1,993 
Financial (costs) income(231,752)(7,281)(18,522)(257,555)11,357 - (246,198)
Income taxes(22,602)1,339 (6,215)(27,478)- (425)(27,903)
Profit (loss) for the period(297,209)(7,070)(19,698)(323,977)(292,763)295,799 (320,941)
Depreciation and amortization(42,976)(2,763)(2,666)(48,405)- - (48,405)
(i)Corporate items refer to balances and expenses with certain corporate demands not directly related to any operating segment.
(ii)Sales between the Crop Care segment and the Brazil segment.
(iii)Sales, general and administrative expenses and Cost of goods sold includes depreciation and amortization.















22
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)


Statement of profit or loss data for the nine-month period ended March 31, 2024:

DescriptionBrazil LATAM Crop Care Total reportable segmentsCorporate (i)Eliminations between segments (ii)Consolidated
Revenue6,865,611 850,623 645,276 8,361,510 - (383,829)7,977,681 
Cost of goods sold (6,110,697)(720,629)(396,858)(7,228,184)- 352,254 (6,875,930)
Sales, general and administrative expenses(iii)(782,047)(95,861)(157,386)(1,035,294)(14,290)- (1,049,584)
Share of profit of an associate109 - 1,242 1,351 (345,376)344,781 756 
Other operating income (expenses), net39,731 (2,453)7,739 45,017 (21,112)- 23,905 
Financial (costs) income(517,346)(17,101)(41,686)(576,133)16,286 - (559,847)
Income taxes107,837 (7,590)(10,721)89,526 - 10,736 100,262 
Profit (loss) for the period(396,802)6,989 47,606 (342,207)(364,492)323,942 (382,757)
Depreciation and amortization(109,133)(8,327)(15,941)(133,401)- - (133,401)
(i)Corporate items refer to balances and expenses with certain corporate demands not directly related to any operating segment.
(ii)Sales between the Crop Care segment and the Brazil segment.
(iii)Sales, general and administrative expenses include depreciation and amortization.
23
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
Segment assets and liabilities as of June 30, 2023:
DescriptionBrazilLATAMCrop CareTotal reportable segmentsCorporate (i)Eliminations between segments (ii)Consolidated
Certain assets
Cash equivalents207,744 22,003 95,585 325,332 238,962 - 564,294 
Trade receivables2,194,853 343,745 242,391 2,780,989 - (72,449)2,708,540 
Inventories1,547,384 202,239 151,289 1,900,912 - (32,708)1,868,204 
Advances to suppliers176,831 2,266 13,088 192,185 - (66)192,119 
Total assets5,926,380 683,894 680,294 7,290,568 449,779 (216,363)7,523,984 
Certain liabilities
Trade payables2,304,043 309,828 46,506 2,660,377 455 (56,427)2,604,405 
Borrowings824,868 71,562 69,045 965,475 - - 965,475 
Advances from customers478,313 7,020 3,245 488,578 - - 488,578 
Total liabilities and equity5,926,380 683,894 680,294 7,290,568 449,779 (216,361)7,523,984 
(i)Corporate items refer to balances and expenses with certain corporate demands not directly related to any operating segment.
(ii)Transactions between the Crop Care segment and the Brazil Segment.
24
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
Statement of profit or loss data for the three-month period ended March 31, 2023:
DescriptionBrazilLATAMCrop CareTotal reportable segmentsCorporate (i)Eliminations between segments (ii)Combined
Revenue2,215,040 250,573 88,567 2,554,180 - (28,025)2,526,155 
Cost of goods sold(1,946,973)(211,055)(47,153)(2,205,181)- 52,423 (2,152,758)
Sales, general and administrative expenses (iii)(228,321)(30,384)(44,795)(303,500)(400)- (303,900)
Other operating income, net(14,500)469 2,872 (11,159)(321,076)- (332,235)
Financial (costs) income(135,825)(3,958)(10,082)(149,865)(2,641)- (152,506)
Income taxes40,360 (2,360)(463)37,537 - (8,291)29,246 
Profit for the period(70,219)3,285 (11,054)(77,988)(324,117)16,107 (385,998)
Depreciation and amortization(38,798)(2,074)(2,900)(43,772)- (43,772)
(i)Corporate items refer to balances and expenses with certain corporate demands not directly related to any operating segment.
(ii)Sales between the Crop Care segment and the Brazil segment.
(iii)Sales, general and administrative expenses include depreciation and amortization.

25
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
Statement of profit or loss data for the nine-month period ended March 31, 2023:

DescriptionBrazil LATAM Crop Care Total reportable segmentsCorporate (i)Eliminations between segments (ii)Consolidated
Revenue6,852,875 900,190 580,076 8,333,141 - (300,811)8,032,330 
Cost of goods sold(5,697,199)(750,189)(339,191)(6,786,579)- 252,969 (6,533,610)
Sales, general and administrative expenses(iii)(714,839)(84,940)(112,042)(911,821)(400)- (912,221)
Other operating income (expenses), net20,619 (2,597)2,529 20,551 (321,076)- (300,525)
Financial (costs) income(443,528)(11,318)(20,813)(475,659)(2,641)- (478,300)
Income taxes104,176 (18,778)(31,447)53,951 - 16,266 70,217 
Profit (loss) for the period122,104 32,368 79,112 233,584 (324,117)(31,576)(122,109)
Depreciation and amortization(108,813)(8,316)(9,064)(126,193)— (126,193)
(i)Corporate items refer to balances and expenses with certain corporate demands not directly related to any operating segment.
(ii)Sales between the Crop Care segment and the Brazil segment.Sales between the Crop Care segment and the Brazil segment.
(iii)Sales, general and administrative expenses include depreciation and amortization.
Revenues from external customers for each product and service are disclosed in Note 25. Further breakdown in relation to products and services provided by the Group is not available and such information cannot be produced without unreasonable effort.
26
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
4.Cash equivalents
Annual yieldMarch, 31 2024June, 30 2023
Cash equivalents (R$)88% to 110% CDI (i)362,521 304,292 
Cash equivalents (COP)12.49% DTF(ii)20,566 22,003 
Cash equivalents (US$)3.82% a year(iii)11,278 237,999 
Total cash equivalents394,365 564,294 
(i)Represents the Brazilian interbank deposit rate, which is an average of the overnight interbank rates in Brazil (the "CDI").
(ii)Colombian investment rate, which is an average of interbank and corporate finance ("DTF").
(iii)Average annualized yield obtained in the last year from overseas bank accounts.
5.Trade receivables
March, 31 2024June, 30 2023
Trade receivables (Brazil)5,428,200 2,525,845 
Trade receivables (Colombia)409,929 370,767 
(-) Allowance for expected credit losses(299,332)(188,072)
Total5,538,797 2,708,540 
Current5,405,117 2,667,057 
Non-current133,680 41,483 
The average effective interest rate used to discount trade receivables for the three and nine -month period ended March 31, 2024 was 0.96% per month (0.96% as of June 30, 2023). The Group does not have any customer that represents more than 10% of its trade receivables or revenues.
As of March 31, 2024, the Group also transferred trade receivables to the FIAGRO (Agro-industrial Supply Chain Investment Fund), a structured entity, as defined by IFRS 10, established under Brazilian law designed specifically for investing in agribusiness credit rights receivables, in the amount of R$178,841 (R$167,278 in June 30, 2023).

As the Group has retained the risks and rewards of ownership, these amounts were not derecognized from trade receivables. Consequently, the liability resulting from these operations is recorded as obligations to FIAGRO quota holders.
27
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
Allowance for expected credit losses:
March, 31 2024March, 31 2023
Opening balance as of June(188,072)(151,114)
Increase in allowance(118,732)(39,866)
Allowance for credit losses from acquisitions(15,314)(761)
Trade receivables write-off25,354 11,839 
Exchange rate translation adjustment(2,568)3,043 
Ending balance (i)(299,332)(176,859)
(i)The credit risk of the Group is described in note 7.b.
The aging analysis of trade receivables is as follow:
March, 31 2024June, 30 2023
Not past due5,042,969 2,089,543 
Overdue
1 to 60 days215,392 169,556 
61 to 180 days80,284 359,958 
181 to 365 days267,817 90,734 
Over 365 days231,667 186,821 
Allowance for expected credit losses(299,332)(188,072)
5,538,797 2,708,540 
28
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
6.Financial instruments
The Group’s financial instruments were classified according to the following categories:
March, 31 2024
Amortized costFair value through profit or loss
Assets:
Trade receivables5,538,797 
Commodity forward contracts140,866 
Derivative financial instruments56,650 
Restricted cash150,339 
Total5,689,136 197,516 
Liabilities:
Trade payables5,562,057 
Lease liabilities217,709 
Borrowings1,323,776 
Agribusiness Receivables Certificates403,749 
Obligations to FIAGRO quota holders175,168 
Payables for the acquisition of subsidiaries237,517 
Derivative financial instruments65,039 
Salaries and social charges175,238 
Commodity forward contracts128,798 
Dividends payable1,804 
Warrant liabilities25,956 
Liability for FPA Shares150,339 
Total8,247,357 219,793 
29
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
June, 30 2023
Amortized costFair value through profit or loss
Assets:
Trade receivables2,708,540 - 
Commodity forward contracts- 114,861 
Derivative financial instruments- 40,410 
Restricted cash139,202 - 
Total2,847,742 155,271 
Liabilities:
Trade payables2,578,248 - 
Lease liabilities184,419 - 
Borrowings965,475 - 
Obligations to FIAGRO quota holders150,018 - 
Payables for the acquisition of subsidiaries275,209 - 
Derivative financial instruments- 44,008 
Salaries and social charges223,376 - 
Commodity forward contracts- 207,067 
Dividends payable1,619 - 
Warrant liabilities- 36,446 
Liability for FPA Shares139,133 - 
Total4,517,497 287,521 
The Group considers that assets and liabilities measured at amortized cost, have a carrying value approximate to their fair value and, therefore, information on their fair values is not presented.
(a)Hierarchy of fair value
The Group uses various methods to measure and determine fair value (including market approaches and income or cost approaches) and to estimate the value that market participants would use to price the asset or liabilities. Financial assets and liabilities carried at fair value are classified and disclosed within the following fair value hierarchy levels:
Level 1 - Quoted prices (unadjusted) in active, liquid and visible markets, for identical assets and liabilities that are readily available at the measurement date;
30
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable; and
Level 3 – Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
For assets and liabilities that are recognized in the financial statements at fair value on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
All financial instruments accounted for at fair value are classified as level 2, except for the Warrant liability which is classified as level 1. On March 31, 2024 and June 30, 2023, there were no changes in the fair value methodology of the financial instruments and, therefore, there were no transfers between levels.
7.Financial and capital risk management
(a)Considerations on risk factors that may affect the business of the Group
The Group is exposed to several market risk factors that might impact its business. The Group’s board of directors is responsible for monitoring these risk factors, as well as establishing policies and procedures to address them. The Group’s risk management structure considers the size and complexity of its activities, which allows for a better understanding of how such risks could impact Group’s strategy through committees and other internal meetings.
Currently, the Group is focused on action plans relating to risks that could have a significant impact on its strategic goals, including those required by applicable regulations. To efficiently manage and mitigate these risks, its risk management structure conducts risk identification and assessments to prioritize the risks that are key to pursuing potential opportunities that may prevent value from being created or that may compromise existing value, with the possibility of impacting its results, capital, liquidity, customer relationships and/or reputation.
The Group’s risk management strategies were developed to mitigate and/or reduce the financial market risks which it is exposed to, which are as follows:
•credit risk
•liquidity risk
•capital risk
•interest rate risk
•exchange rate risk
•commodity price risk in barter transactions
31
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
(b)Credit risk
Credit risk is the risk of financial losses if a customer or a counterparty to a financial instrument fails to fulfill its contractual obligations, which arise mainly from the Group’s trade receivables. The Group maintains short-term investments and derivatives with financial institutions approved by its management according to objective criteria for diversification of such risk.
The Group seeks to mitigate its credit risk related to trade receivables by setting forth credit limits for each counterparty based on the analysis of its credit management process. Such credit exposure determination is performed considering the qualitative and quantitative information of each counterparty. The Group also focuses on the diversification of its portfolio and monitors different solvency and liquidity indicators of its counterparties. In addition, primarily for receivables in installments, the Group monitors the balance of allowances for expected credit losses (see Note 5).
The main strategies on credit risks management are listed below:
•creating credit approval policies and procedures for new and existing customers.
•extending credit to qualified customers through a review of credit agency reports, financial statements and/or credit references, when available.
•reviewing existing customer accounts every twelve months based on the credit limit amounts.
•evaluating customer and regional risks.
•obtaining guarantees through the endorsement of rural producer notes (“CPR”), which give physical ownership of the relevant agricultural goods in the event of the customer’s default.
•establishing credit approval for suppliers in case of payments in advance.
•setting up provisions using the lifetime expected credit loss method considering all possible default events over the expected life of a financial instrument, Receivables are categorized based on the number of overdue days and/or a customer’s credit risk profile, Estimated losses on receivables are based on known troubled accounts and historical losses, Receivables are considered to be in default and are written off against the allowance for credit losses when it is probable that all remaining contractual payments due will not be collected in accordance with the terms of the agreement.
•requiring minimum acceptable counterparty credit ratings from financial counterparties.
•setting limits for counterparties or credit exposure; and
•developing relationships with investment-grade counterparties.
The current credit policy sets forth credit limits for customers based on credit score analysis made by the Group’s credit management area. Such score is determined
32
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
considering the qualitative and quantitative information related to each customer, resulting in a rating classification and a level of requirement of guarantees as follows:
% Of guarantees required on sales
Credit rating% CustomersRisk classificationMedium-sized farmers (i)Other
AA & A23%Very small
80-90%
0%
B49%Medium100%30%
C & D16%High100%60%
Simplified12%Small farmersN/AN/A
(i)Medium-sized farmers ranging between 100 and 10,000 hectares in planted acreage that are typically not serviced directly by agricultural input producers,
For Colombia there is a similar credit scoring process, however, guarantees are not required based on credit ratings but instead based on qualitative factors such as relationships and past experiences with customers.
Maximum exposure to credit risk as of March 31, 2024 and June 30, 2023:
March 31, 2024June 30, 2023
Trade receivables (current and non-current)5,538,797 2,708,539 
Advances to suppliers147,107 192,119 
5,685,904 2,900,658 
(c)Liquidity risk
The Group defines liquidity risk as the risk of financial losses if it is unable to comply with its payment obligations in connection with financial liabilities settled in cash or other financial assets in a timely manner as they become due. The Group’s approach to managing this risk is to ensure that it has sufficient cash available to settle its obligations without incurring losses or affecting the operations. Management is ultimately responsible for managing liquidity risk, which relies on a liquidity risk management model to manage funding requirements and liquidity in the short, medium and long term.
The Group’s cash position is monitored by its senior management, through management reports and periodic performance meetings. The Group also manages its liquidity risk by maintaining reserves, bank credit facilities and other borrowing facilities deemed appropriate, through ongoing monitoring of forecast and actual cash flows, as well as through the combination of maturity profiles of financial assets and liabilities.
33
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
The following maturity analysis of the Group’s financial liabilities and gross settled derivative financial instruments contracts (for which the cash flows are settled simultaneously) is based on expected undiscounted contractual cash flows from the year end date to the contractual maturity date:
March, 31 2024
Up to 1 yearFrom 1 to 5 yearsTotal
Trade payables5,750,749 7,219 5,757,968 
Lease liabilities102,298 128,746 231,044 
Borrowings1,358,489 46,369 1,404,858 
Obligations to FIAGRO quota holders185,897 - 185,897 
Agribusiness Receivables Certificates1,169 427,310 428,479 
Payables for the acquisition of subsidiaries217,364 23,766 241,130 
Commodity forward contracts130,626 142 130,768 
Derivative financial instruments66,033 - 66,033 
Salaries and social charges177,918 - 177,918 
Dividends payable1,832 - 1,832 
Warrant liabilities25,956 - 25,956 
Liability for FPA Shares150,339 — 150,339 
8,168,670 633,552 8,802,222 
34
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
June, 30 2023
Up to 1 yearFrom 1 to 5 yearsTotal
Trade payables2,765,354 2,547 2,767,901 
Lease liabilities91,419 111,304 202,723 
Borrowings982,318 48,382 1,030,700 
Obligations to FIAGRO quota holders159,722 - 159,722 
Payables for the acquisition of subsidiaries224,689 55,242 279,931 
Commodity forward contracts210,040 - 210,040 
Derivative financial instruments44,639 - 44,639 
Salaries and social charges226,583 - 226,583 
Dividends payable1,642 - 1,642 
Warrant liabilities36,446 - 36,446 
Liability for FPA Shares- 139,133 139,133 
4,742,852 356,608 5,099,460 
(d)Capital risk
The Group manages its capital risk through its leverage policy to ensure its ability to continue as a going concern and to maximize the return of its stakeholders by optimizing its balances of debt and equity.
The Group's strategy is to maintain the total Group net debt up to 2 times the projected adjusted EBITDA for twelve months to be ended on June 30, 2024.
(i)Interest rate risk
Fluctuations in interest rates, such as the Brazilian interbank deposit rate, which is an average of interbank overnight rates in Brazil, and Colombian investment rate, which is an average of interbank and financial corporation loans, may have an effect on the cost of the Group’s borrowings and new borrowings.
The Group periodically monitors the effects of market changes in interest rates on its financial instruments portfolio. Funds raised by the Group are used to finance working capital for each crop season and are typically raised at short term conditions.
As of March 31, 2024 and June 30, 2023, the Group had no derivative financial instruments used to mitigate interest rate risks.
35
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
(i)Sensitivity analysis – exposure to interest rates
To mitigate its exposure to interest rate risk, the Group uses different scenarios to evaluate the sensitivity of variations transactions impacted by the CDI Rate and IBR Rate. The Scenario 1 represents the impact on booked amounts considering the most current (April 2024) CDI Rate and IBR Rate and reflects management’s best estimates. The Scenario 2 and Scenario 3 consider an increase of 25% and 50% in such market interest rates, before taxes, which represents a significant change in the probable scenario for sensitivity purposes.
The following table sets forth the potential impacts on the statements of profit or loss:
March, 31 2024
Expense on profit or loss
Current IndexScenario 1Scenario 2Scenario 3
Floating rate borrowings in BrazilCDI Rate (10,65%)150,182 178,852 207,521 
Floating rate borrowings in ColombiaIBR Rate (12,24%)18,994 22,700 26,406 
Floating rate Agribusiness Receivables CertificatesCDI Rate (10,65%)57,353 68,102 78,852 
226,529 269,654 312,779 
(ii)Exchange rate risk
The Group is exposed to foreign exchange risk arising from its operations related to agricultural inputs, mainly related to the U.S. dollar, which significantly impacts global prices of agricultural inputs in general. Although all purchases and sales are conducted locally, certain purchase and sales contracts are indexed to the U.S. dollar.
The Group’s current commercial department seeks to reduce this exposure. Its marketing department is responsible for managing pricing tables and commercial strategies to seek a natural hedge between purchases and sales and to match currency and terms to the greatest extent possible.
The Group’s corporate treasury department is responsible for monitoring the forecasted cash flow exposure to the U.S. dollar, and whenever any mismatches as to terms and currencies are identified, non-deliverable forwards derivative financial instruments are purchased to offset these exposures, and therefore fulfill internal policy requirements. U.S. dollar exposure is managed by macro hedging through the analysis of the forecasted cash flow for the next two harvests. The Group may not have any leveraged derivative position.
The Group’s exchange rate exposure monitoring committee meets periodically across the commercial, treasury and corporate business departments. There are also
36
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
committees on purchase valuation and business intelligence for the main goods traded by the Group.
The Group does not adopt hedge accounting. Therefore, gains and losses from derivative operations are fully recognized in the statements of profit or loss, as disclosed in Note 27.
(i)Sensitivity analysis – exposure to exchange rates
To gauge its exposure to exchange rate risk, the Group uses different scenarios to evaluate its asset and liability positions in foreign currency and their potential effects on its results.
The Scenario 1 below represents the impact on carrying amounts of the most current (April 2024) market rates for the U.S. dollar (R$5.1115 to US$1.00). This analysis assumes that all other variables, particularly interest rates, remain constant. The Scenario 2 e Scenario 3 consider the appreciation of the Brazilian real against the US dollar at the rates of 25% and 50%, before taxes, which represents a significant change in the probable scenario for sensitivity purposes.
The following table set forth the potential impacts on the statements of profit or loss:
March 31, 2024
Effect on profit or loss
Current IndexScenario 1Scenario 2Scenario 3
Cash equivalents in U.S. Dollars5,1155269 3,156 6,043 
Trade receivables in U.S. Dollars5,11559,677 113,415 217,154 
Trade payables in U.S. Dollars5,1155(13,514)(158,384)(303,254)
Borrowings in U.S. Dollars5,1155(11,318)(132,644)(253,970)
Net impacts on commercial operations(14,886)(174,457)(334,027)
Derivative financial instruments5,11559,861 115,570 221,279 
Total impact, net of derivatives(5,025)(58,887)(112,748)
(iii)Commodity prices risk in barter transactions
In all barter transactions mentioned in Note 10, the Group uses future commodity market price as the reference to value the quantities of commodities included in the forward contracts to be delivered by the customers as payment for the Group’s products into currency. The Group uses prices quoted by commodity trading
37
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
companies to value the grain purchase contracts from farmers, Lavoro enters into grain sale contracts with trading companies or forward derivatives with financial institutions to sell those same grains, at the same price of the purchased contracts with farmers. As such, the Group strategy to manage its exposure to those commodity prices by entering into the purchase and sale contracts at similar conditions.
These transactions are conducted by a corporate department which manages and controls such contracts as well as the compliance of Group’s policies.
(i)Sensitivity analysis – exposure to commodity price
To gauge its exposure to commodity price risk, the Group uses different scenarios to evaluate its asset and liability positions on commodity forward contracts in soybean and corn and their potential effects on its results.
The “current risk” scenario below represents the impact on carrying amounts as of March 31, 2024, with assumptions described in Note 10. The other scenarios consider the appreciation of main assumptions at the rates of 25% and 50%, before taxes, which represents a significant change in the probable scenario for sensitivity purposes.
As of March 31, 2024:
TonsPositionCurrent RiskAverage of contract pricesCurrent Market (R$/bag)+25% current+50% current
PositionMarketImpactMarketImpact
Soybean 2024282,462Purchased(43,164)126(9)(11)(10,791)(14)(21,582)
Soybean 2024(369,600)Sold(3,815)11011(954)1(1,907)
Corn 2024169,468Purchased3,366461184121,683
Corn 2024(96,668)Sold(12,346)39810(3,087)11(6,173)
Soybean 2025251,536Purchased88,518103212622,1303244,259
Soybean 2025(52,609)Sold(20,549)1012329(5,137)35(10,274)
Net exposure on grain contracts184,589Net purchased12,0103,0026,006
Soybean 2024(7,905)Sold on derivatives(175)130131164(44)197(87)
Corn 2024(5,574)Sold on derivatives9,3946361772,349924,697
Soybean 2025(251,356)Sold on derivatives(5,554)135136171(1,389)205(2,777)
Net exposure on derivatives(264,835)3,6659161,833
Net exposure (i)(80,246)15,6753,9187,839
38
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
(i) Exposure regarding the purchase contracts that will not be settled with the delivery of the grains and the Company remains with the sold contract obligation.
(iv)Derivative financial investments
The Group is exposed to market risks mainly related to fluctuations in exchange rates and commodity prices. The Group maintains operations with financial instruments of protection to mitigate exposure to these risks. The Group has been implementing and improving the internal controls to identify and measure the effects of transactions with trading companies and with financial institutions, so that such transactions are captured, recognized and disclosed in the consolidated financial statements. The Group does not carry out investments of a nature speculative in derivatives or any other risk assets. Trading derivatives are classified as current assets or liabilities.
March 31, 2024June 30, 2023
Options (put/call of commodities)(132)(513)
Forwards (R$/US$) (i)3,6118,837
Swap (R$/US$)(11,867)(11,922)
Derivative financial instruments, net(8,388)(3,598)
(i) See Note 7 (d) that describes the exposure to commodity prices and volume.
8.Inventories
(a)Inventories composition
March 31, 2024June 30, 2023
Goods for resale1,985,211 1,885,941 
(-) Allowance for inventory losses(27,014)(17,737)
Total1,958,197 1,868,204 
39
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
(b)Allowance for inventory losses
March 31, 2024March 31, 2023
Opening balance as of June(17,737)(10,186)
Increase in allowance(4,149)(5,168)
Allowance for inventory losses from acquisitions(4,321)— 
Exchange rate translation adjustment(807)662 
Ending balance(27,014)(14,692)
9.Taxes recoverable
March 31, 2024June 30, 2023
State VAT (“ICMS”) (i)80,963 78,805 
Brazilian federal contributions (ii)306,602 239,815 
Colombian federal contributions41,312 21,284 
Total428,877 339,904 
Current67,105 57,001 
Non-current361,772 282,903 
(i)Refers to the Brazilian value-added tax on sales and services, The Group’s ICMS relates mainly to the purchase of inputs and the Group has the benefit of a reduced ICMS tax rate.
(ii)Includes: a) credits arising from the Brazilian government’s taxes charged for the social integration program (PIS) and the social security program (COFINS), and Brazilian corporate income tax and social contributions, These credits, which are recognized as current assets, will be used by the Group to offset other Federal taxes; b) withholding and overpaid taxes which can be used to settle overdue or future payable federal taxes; c) withholding income tax on cash equivalents which can be used to offset taxes owed at the end of the calendar year, in case of taxable profit, or are carried forward in case of tax loss; and
Income tax Benefits arising from ICMS deduction
During 2023/2024 the Group obtained the benefit of deducting the ICMS benefit explained in item (i) in the income tax calculation. This was applied for the current year tax calculation and for the prior years and generated an income tax credit recorded in the period ended March 31, 2024 in the amount of R$71,130 recorded under “Brazilian federal contributions”.
In accordance with Article 30 of Law No, 12,973/2014, the amount of ICMS benefits must be allocated to the fiscal incentive reserve category when there is sufficient
40
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
profit in each subsidiary. Additionally, under the same law, these tax benefits must be included in the calculation base for Corporate Income Tax (IRPJ) and Social Contribution on Net Profits (CSLL) when dividends are distributed or capital is refunded to the shareholders of the subsidiaries.
As of March 31, 2024, the amount of fiscal incentive reserve in the subsidiaries is R$367,720 and the balance of the fiscal benefit not yet allocated due to insufficient profits for this allocation stands at R$952,594. The Group has no intention to make our subsidiaries distribute the incentive amounts to the parent. In the event of dividend distribution taxation will apply, as per the provisions of tax laws.
10.Commodity forward contracts – Barter transactions
As of March 31, 2024, fair value of commodity forward contracts is as follows:
March 31, 2024June 30, 2023
Fair value of commodity forward contracts:
Assets
Purchase contracts108,202 53,695 
Sale contracts32,664 61,166 
Current136,866 114,861 
Non-current4,000 — 
Liabilities
Purchase contracts(59,424)(206,881)
Sale contracts(69,374)(186)
Current(128,658)(207,067)
Non-current(140)— 
The changes in fair value recognized in the statements of profit or loss are in note 27.
41
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
The main assumptions used in the fair value calculation are as follows:
Outstanding Volume (tons)Average of contract prices R$/BagAverage Market Prices (Corn R$/bag (ii); Soybean US$/bu(i))Soybean market premium (US$/bu)Freight (R$/ton)
Purchase Contracts
Soybean
As of June 30, 2023449,847 127.95  13.16  (0.30) 293.65
As of March 31, 2024533,998 114.91  11.94  0.45  461.05
Corn
As of June 30, 2023303,432 65.25  56.04   N/A  282.23
As of March 31, 2024169,468 46.38  61.43   N/A  229.73
Selling Contracts
Soybean
As of June 30, 2023145,915 145.71  13.16  0.01  -
As of March 31, 2024422,209 110.36  11.92  0.15  417.96
Corn
As of June 30, 2023255,49948.3656.04  N/A  284.59
As of March 31, 202496,668 39.26  61.42   N/A  234.88
(i)Market price published by Chicago Board of Trade which is a futures and options exchange in United States.
(ii)Market price published by B3 – Brasil, Bolsa, Balcão which is a futures, options and stock exchange in Brazil.
42
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
11.Right-of-use assets and lease liabilities
(a)Right-of-use assets
VehiclesBuildingsMachinery and equipmentTotal
Cost120,052 141,915 73,236 335,203 
Accumulated depreciation(54,560)(77,732)(29,232)(161,524)
Balance at June 30, 202365,492 64,183 44,004 173,679 
Cost151,189 183,551 89,174 423,914 
Accumulated depreciation(67,784)(111,684)(38,783)(218,251)
Balance at March 31, 202483,405 71,867 50,391 205,663 
Right-of-use assets amortization expense for the nine-month period ended March 31, 2024 was R$64,699 (R$38,160 for the nine-month period ended March 31, 2023)
(b)Lease liabilities
March, 31 2024June, 30 2023
Vehicles87,674 68,420 
Buildings97,521 85,839 
Machinery and equipment32,514 30,160 
Total217,709 184,419 
Current96,394 85,865 
Non-current121,315 98,554 
Total interest on lease liabilities for the nine-month period ended March 31, 2024 was R$14,750 (R$12,689 for the nine-month period ended March 31, 2023).
43
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
12.Property, plant and equipment
(a)Property, plant and equipment balance is as follows:
VehiclesLands, buildings and improvementsMachines, equipment and facilitiesFurniture and fixturesComputer equipmentTotal
Cost40,851 142,561 75,134 15,610 10,015 284,171 
Accumulated depreciation(31,349)(14,698)(26,817)(7,198)(7,521)(87,583)
Balance at June 30, 20239,502 127,863 48,317 8,412 2,494 196,588 
Cost42,613 167,659 89,652 17,810 11,404 329,138 
Accumulated depreciation(34,155)(21,805)(29,566)(8,516)(9,332)(103,374)
Balance at March 31, 20248,458 145,854 60,086 9,294 2,072 225,764 
Depreciation expense of property, plant and equipment for the nine-month period ended March 31, 2024 was R$14,985 (R$12,512 for the nine-month period ended March 31, 2023).
There were no indications of impairment of property and equipment as of and for the nine-month period ended March 31, 2024.
44
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
13.Intangible assets
(a)Intangible assets balance is as follows:
GoodwillCustomer relationshipPurchase contracts and brandsSoftware and otherTotal
Cost:
At June 30, 2022451,974 301,477 21,846 56,373 831,670 
Additions- - - 5,025 5,025 
Business combinations (i)98,890 50,600 1,207 — 150,698 
Other (ii)(3,201)— — — (3,201)
Translation adjustment(998)(666)(48)(10)(1,722)
At June 30, 2023546,665 351,412 23,005 61,388 982,470 
Additions- - - 24,039 24,039 
Business combinations (i)115,658 59,212 - 35 174,905 
Other (iii)34,388 (10,987)- - 23,401 
Translation adjustment2,543 556 813 - 3,912 
At March 31, 2024699,254 400,193 23,818 85,462 1,208,727 
Amortization:
At June 30, 2022- 89,502 6,929 10,918 107,349 
Amortization for the period- 50,263 8,983 8,682 67,928 
At June 30, 2023- 139,765 15,912 19,600 175,277 
Amortization for the period- 38,089 2,642 12,287 53,018 
At March 31, 2024- 177,854 18,554 31,887 228,295 
At June 30, 2023546,665 211,646 7,093 41,788 807,192 
At March 31, 2024699,254 222,339 5,264 53,575 980,432 
(i) Balances arising from business combinations (Note 18).
45
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
(ii) Balance arising from the adjustment in the purchase price from acquisition of Agrozap, which occurred in the year ended June 30, 2022, The consideration for the acquisition was subject to post-closing price adjustment, based on the working capital variations of the purchased company.
(iii) Balance arising from the adjustment in the purchase price from acquisition of Casa Trevo Participações and Sollo Sul, which occurred in the year ended June 30, 2023. The consideration for the acquisition was subject to post-closing price adjustment, based on the working capital variations of the purchased company. As a result, the values related to customer relationships were modified due to changes in projections.
Impairment of intangible assets
For the nine-month period ended March 31, 2024, there were no indications that the Group’s intangible assets might be impaired.
46
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
14.Trade payables
(a)Trade payables
March 31, 2024June 30, 2023
Trade payables – Brazil5,224,243 2,268,420 
Trade payables – Colombia337,814 309,828 
Total5,562,057 2,578,248 
Current5,554,838 2,575,701 
Non-current7,219 2,547 
The average effective interest rate used to discount trade payables for the three and nine -month period ended March 31, 2024 was 1.58% per month (1.58% as of June 30, 2023).
(b)Guarantees

The Group acquires guarantees with financial institutions in connection with installment purchases of agricultural inputs from certain suppliers. These guarantees are represented by short-term bank guarantees and endorsement to the supplier of CPRs obtained from customers in the sale process. The amount of these guarantees as of March 31, 2024, was R$1,037,393 (R$920,870 as of June 30, 2023).
(c)Trades payable — Supplier finance
During the year ended June 30, 2023, the Group signed agreements with financial institutions to negotiate with suppliers to extend the payment terms and discounting of trade receivable from its suppliers, with interest rates ranging from 1 and 1.5 per month. When trade payable is included in this transaction, such amount is transferred from “Trade Payables” to “Trades payable — Supplier finance”. The Group did not sign supplier finance agreements for the period ended March 31, 2024.
During the nine-month period ended on March 31, 2024 the Group fully settled the supplier finance operation.
47
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
15.Borrowings
March 31, 2024June 30, 2023
Borrowing in Colombia121,083 71,562 
Borrowings in Brazil1,202,693 893,913 
Total borrowings1,323,776 965,475 
The Group’s borrowings are contracted for the purpose of strengthening the working capital and have repayment terms scheduled in conjunction with the operating cycles of each harvest.
(a)Debt composition
Average interest rate March 31,2024 (i)March 31, 2024Average interest rate June 30, 2023 (i)June 30, 2023
Debt contracts in Brazil in:
R$, indexed to CDI (ii) 14.51 %687,823 16.62 %725,563 
R$, with fixed interest 14.33 %104,391 8.76 %8,590 
U.S. Dollars, with fixed interest 7.26 %410,479 4.03 %159,760 
Debt contracts in Colombia in:
COP, indexed to IBR (iii)12.72 %121,083 15.43 %69,862 
COP, with fixed interest 15.72 %1,700 
Total1,323,776 965,475 
Current1,280,083 922,636 
Non-current43,693 42,839 
(i)In order to determine the average interest rate for debt contracts with floating rates, the Group used the rates prevailing during the years.
(ii)Brazilian reais denominated debt that bears interest at the CDI Rate (see Note 7 for a definition of those indexes), plus spread.
(iii)Colombian peso-denominated debt that bears interest at the IBR rate (see Note 7 for a definition of those indexes), plus spread.
48
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
(b)Movement in borrowings
At June 30, 2022710,552 
Proceeds from borrowings1,142,492 
Repayment of principal amount(624,453)
Accrued interest227,016 
Exchange rate translation25,756 
Interest payment(76,160)
At March 31, 20231,405,203 
At June 30, 2023965,475 
Proceeds from borrowings1,900,726 
Repayment of principal amount(1,618,396)
Accrued interest175,599 
Borrowings from acquired companies61,793 
Foreign exchange differences2,915 
Exchange rate translation1,630 
Interest payment(165,966)
At March 31, 20241,323,776 
(c)Schedule of maturity of non-current portion of borrowings
The installments are distributed by maturity year:
March 31, 2024June 30, 2023
2024726 
20258,185 15,452 
20263,495 1,376 
202722,854 25,285 
20289,159 
Total43,693 42,839 
49
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
(d)Covenants
The Group has no financial covenants related to borrowings as of March 31, 2024.


16.Agribusiness Receivables Certificates

(a)Composition

MaturityAverage interest rate 2023 (i)March 31, 2024
Serie IDecember 22, 2027CDI + 3,00%69,189 
Serie IIDecember 22, 202714.20 %351,912 
Transaction cost(17,352)
Total403,749 
Current1,101 
Non-current402,648 

(b) Movement in Agribusiness Receivables Certificates

At June 30, 2023—
Proceeds from borrowings420,000 
Transaction cost(17,741)
Transaction cost amortization389 
Accrued interest15,608 
Interest payment(14,507)
At March 31, 2024403,749 

(c) Covenants

This debt includes covenants related to level of indebtedness of the subsidiary Lavoro Agro Holding S.A (This entity encompasses our Brazil Cluster operations) requiring it to maintain a net debt to EBITDA ratio of not more than 2.5 x to be calculated as of June 30 of each year.

17.Payables for the acquisition of subsidiaries
The purchase agreements for acquisition of subsidiaries include payments to the seller in the event of successful collection, after the acquisition date of outstanding receivables and certain tax credits subject to administrative proceedings.
50
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)

Consideration paid during the period ended March 31, 2024, net of cash acquired, was R$207,045 which includes installment payments for acquisitions completed in previous years in the amount of R$143,419 (R$162,317 on June 30, 2023, which includes payments for acquisitions made in previous years in the amount of R$106,764). All these payments are included in the “Acquisition of subsidiary, net of cash acquired” in the cash flows.
51
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
18.Acquisition of subsidiaries
(a)Acquisition in the nine-month period ended March 31, 2024.
The fair value of the identifiable assets and liabilities, consideration transferred and goodwill as of the date of each acquisition was:
Fair value as of the acquisition date
Referência Agroinsumos (c)CORAM (d)
Assets
Cash equivalents8,135 15,352 
Trade receivables31,464 61,791 
Inventories43,680 47,481 
Other assets11,473 12,779 
Property, plant and equipment1,556 1,804 
Intangible assets30,494 15,003 
126,802 154,210 
Liabilities
Trade payables56,137 79,298 
Borrowings32,429 29,364 
Advances from customers40,757 1,263 
Other liabilities4,168 10,259 
133,491 120,184 
Total identifiable net assets at fair value(6,689)34,026 
Non-controlling interests2,007 — 
Goodwill arising on acquisition106,794 15,847 
Consideration transferred102,112 49,873 
Cash paid67,112 20,000 
Payable in installments35,000 29,873 



52
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
(b)Fair value of assets acquired.
The Group estimated the fair value of significant assets acquired using the following valuation methods:
ItemMarch 31, 2024NatureValuation method
Customer relationship45,462A loyal relationship between the acquirees and its customers, which translates into recurring purchases of products and servicesMulti Period Excess Earnings Method (MPEEM)
Total45,462
There were no differences between accounting basis and tax basis on fair value adjustments, and therefore no deferred taxes were recorded.

(c)    Acquisition of Referência Agroinsumos
On February 28, 2023, the Group signed an agreement for the acquisition of Referência Agroinsumos Ltda, (“Referência Agroinsumos”), establishing the terms and other conditions for its acquisition.
The acquisition was completed on July 31, 2023. The Group currently indirectly owns 65.52% Referência Agroinsumos through Distribuidora Pitangueiras de Produtos Agropecuários S.A. which directly owns a 70% interest at Referência Agroinsumos.
(d)    Acquisition of CORAM
On July 24, 2023, the Group signed an agreement for the acquisition of CORAM - Comércio e Representações Agrícolas Ltda., (“CORAM”), establishing the terms and other conditions for its acquisition.
The acquisition was completed on November 30, 2023. The Group currently indirectly owns 72.17% CORAM through Qualiciclo Agrícola S.A. which directly owns a 100% interest at CORAM.
53
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)

(e)    Pro forma information (unaudited)
The following tables discloses the Group’s revenues and profit or loss for the period assuming all acquisitions completed during the period were completed at the beginning of such year:
March 31, 2024March 31, 2023
Revenues383,112 8,356,011 
Profit (loss) for the period(10,084)(103,300)
(f)    Revenues and results from new subsidiaries
The revenues and profit or loss of the acquisitions from the acquisition date through the end of the fiscal year in which the acquisition was completed and included in the consolidated statement of profit or loss are as follows:
Acquisitions in the period ended March 31, 2024:
RevenuesProfit (loss)Period from
Referência Agroinsumos256,567 28,078 July, 2023
CORAM56,443 1,560 November, 2023
Total313,010 29,638 
Acquisitions in the period ended March 31, 2023:
RevenuesProfit (loss)Period from
Provecampo23,913 2,869 August, 2022
Floema185,777 14,564 August, 2022
Casa Trevo110,705 (546)September, 2022
Sollo Sul108,738 (11,693)December, 2022
Dissul6,307 60 December, 2022
Total435,440 5,254 

(g)    Signed agreement for future acquisitions

54
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
The Group signed an agreement on August 25, 2022, for the acquisition of an 82% interest in NS Agro S.A. (“NS Agro”), establishing the terms and other conditions for its acquisition. The precedent conditions for this transaction were not completed by August 31, 2023 and the parties subsequently canceled the agreement. As a result, the consideration which was transferred in advance for this acquisition amounting to R$14,924 was not recovered and was therefore transferred to other operating income during the nine-month period ended on March 31, 2024.
19. Accounting considerations related to the SPAC Transaction

On February 28, 2023, Lavoro and TPB Acquisition Corp, consummated a capital reorganization transaction (as described in note 1.b to the Group’s annual consolidated financial statements as of June 30, 2023). Warrants and forward purchase agreements were assumed in the SPAC Transaction (See Note 22 to the Group’s annual consolidated financial statements as of June 30, 2023).
Warrants

TPB Acquisition Corp, issued 10,083,606 public and private warrants to certain of its shareholders and its maturity is February 28, 2028. Such public and private warrants were assumed by Lavoro as a result of the SPAC Transaction. The outstanding warrants as of March 31, 2024, is 10,083,592 and aggregate fair value of the private and public warrants is 25,956, and the warrants are reported in the consolidated statement of financial position as warrant liabilities under non-current liabilities. For the nine-month period ended March 31, 2024, the Group recognized a gain of R$10,491 related to changes to the fair value of public warrants and private warrants. The fair value of the warrants was calculated based on the listed market price of such warrants.
Forward share purchase agreements

TPB Acquisition Corp, entered into certain Forward Share Purchase Agreements with certain shareholders of TPB Acquisition Corp., in which TPB Acquisition Corp. agreed to purchase, in the aggregate, up to 2,830,750 of TPB Acquisition Corp,’s Class A Ordinary Shares held by those equity holders, either after 24 months after closing of the SPAC Transaction or after meeting certain criteria as defined in the Forward Share Purchase Agreements. Such Forward Share Purchase Agreements were assumed by Lavoro, whereby Lavoro agreed to purchase the same number of Lavoro’s ordinary shares under the same conditions as defined in those Forward Share Purchase Agreements. Lavoro placed a designated balance of funds into an escrow account at the closing of the SPAC Transaction for the purpose acquiring such shares.

Lavoro’s Ordinary Shares subject to the Forward Share Purchase Agreement are considered financial liabilities and are recorded in the consolidated statement of financial position as Liability for FPA Shares in non-current liabilities at the amounts deposited in the escrow account. The designated balance of funds in the escrow account is reported in the consolidated statement of financial position as restricted
55
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
cash. The amount of Liability for FPA Shares and the restricted cash was R$150,339 as of March 31, 2024.
20. Income taxes
(a)Reconciliation of income taxes expense
March 31, 2024March 31, 2023
Profit (loss) before income taxes(483,019)(192,265)
Statutory rate (i)34%34%
Income taxes at statutory rate164,22666,324
Unrecognized deferred tax asset (ii)(123,876)(162,506)
Difference from income taxes calculation based on taxable profit computed as a percentage of gross revenue(45)11,023
Deferred income taxes over goodwill tax recoverable(5,139)(5,044)
Tax benefit (iii)71,130163,963
Other(6,034)(3,543)
Income tax expense100,26270,217
Income tax and social contribution effective rate-20.76%35.84%
Current income taxes23,642(17,921)
Deferred income taxes76,62088,138
(i)The effective tax rate reconciliation considers the statutory income taxes rates in Brazil, due to the significance of the Brazilian operation when compared to Colombia, The difference to reconcile the effective rate to the Colombian statutory rate (35%) is included in others.
(ii)For March 31, 2023, the Group did not recognize deferred tax assets from certain subsidiaries that is unlikely that will generate future taxable income in the foreseeable future. In addition to that, in the third quarter of 2024, the Group ceased to recognize deferred taxes assets for all subsidiaries based on the recoverability analysis performed. The amount of unrecognized credits of R$ 310,784 for March 31, 2024 (R$160,600 for March 31, 2023).
(iii)This amount reflects the tax benefit from the deduction of the ICMS tax benefits in the calculation of the income tax (See Note 9).
56
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
(b)Deferred income taxes balances
March 31, 2024June 30, 2023
Deferred assets and liabilities:
Amortization of fair value adjustment 62,926 66,065 
Tax losses 222,847 123,072 
Allowance for expected credit losses 68,177 49,026 
Adjustment to present value7,476 14,222 
Provision for management bonuses 12,654 22,182 
Allowance for inventory losses 5,693 3,841 
Financial effect on derivatives 2,182 (1,468)
Fair value of commodity forward contracts(6,301)31,343 
Unrealized exchange gains or losses (1,808)(7,618)
Unrealized profit in Inventories22,163 (11,121)
Amortized right-of-use assets5,142 6,273 
Deferred tax on goodwill(11,366)(2,067)
Other provisions3,635 22,981 
Deferred income tax assets, net410,991 329,082 
Deferred income tax liabilities, net(17,571)(12,351)
Deferred income tax assets, net393,420 316,731 
Deferred income tax and social contribution
At June 30, 2022193,495 
Recognized in the statement of profit or loss128,362 
Deferred tax from acquired companies(5,126)
At June 30, 2023316,731 
Recognized in the statement of profit or loss76,689 
At March 31, 2024393,420 
57
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
The aging analysis of net deferred income tax is as follow:
March 31, 2024June 30, 2023
Up to 1 year170,573 185,123 
Over 1 year222,847 131,608 
Total393,420 316,731 

21. Provisions for contingencies
Probable losses

The balance of probable losses from civil, tax, labor and environmental contingencies recognized by the Group is as follow:
March 31, 2024June 30, 2023
Civil1,989 — 
Tax2,629 9 
Labor9,305 8,801 
Environmental117 35 
Total14,040 8,845 
Possible losses
The Group is a party to various proceedings involving tax, environmental, labor and other matters that were assessed by management, under advice of legal counsel, as possibly leading to losses. Possible losses from contingencies amounted to R$144,900 and R$77,724 as of March 31, 2024 and June 30, 2023, respectively.
22. Advances from customers

Advances from customers arise from the “Cash sale” modality, in which rural producers advance payments to the Group at the beginning of a harvest, before the billing of agricultural inputs. These advances are settled in the short term.
58
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
(a)Movement in the period
March 31, 2024June 30, 2023
Opening balance488,578 320,560 
Revenue recognized that was included in the contract liability balance at the beginning of the period(656,759)(320,560)
Increase in advances525,922 427,463 
Advances from acquired companies42,020 61,115 
Ending balance399,761 488,578 
23. Related parties
Related parties of the Group that have receivable, payable or other balances are either (i) Non-controlling shareholders, (ii) Patria Investments Limited, which manages the funds that control the Group, or (iii) Key management personnel.
(a)Breakdown of assets and liabilities:
March 31, 2024June 30, 2023
Assets
Trade receivables (i)25,959 24,487 
Total assets25,959 24,487 
Liabilities
Trade payables (i)4,993 1,675 
Advances from customers (i)6,859 — 
Payables for the acquisition of subsidiaries (ii)83,085 100,287 
Total liabilities94,937 101,962 
(i)Refer to commercial transactions in the ordinary course of business with non-controlling shareholders of subsidiaries, Such transactions are carried at the same commercial terms as non-related parties customers.
(ii)Payments in installments to the non-controlling shareholders related to certain business combinations as described in Note 18.
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
(b)Statement of profit or loss
March 31, 2024March 31, 2023
Revenue from sales of products (i)27,902 28,699 
Monitoring expenses (ii)(15,079)(16,699)
Interest on payables for the acquisition of subsidiaries(3,833)(2,938)
Other expenses(2,471)(205)
Total6,519 8,857 
(i)Refer to commercial transactions in the ordinary course of business with non-controlling shareholders of subsidiaries. Such transactions are carried at the same commercial terms as non-related party customers.
(ii)Expenses paid to the Parent in relation to management support services rendered by the investee Gestão e Transformação S.A. in connection with acquisition transactions.
(c)Key management personnel compensation
March 31, 2024March 31, 2023
Wages13,524 10,433 
Direct and indirect benefits978 435 
Variable compensation (bonuses)16,737 23,677 
Short-term benefits31,239 34,545 
Share-based payment benefits13,454 6,927 
Total44,693 41,472 
Key management personnel compensation includes payments to Group board of directors and the executive officers.
24. Equity

The fully subscribed an paid-in share capital as of March 31, 2024 is R$591, represented by 116,608,329 ordinary shares.
Ordinary Shares

Lavoro ordinary shares have a par value of US$0.001 and are entitled to one vote per share, excepted the 3,006,049 Founder Shares, that were detailed in Note 22 to the Group’s annual consolidated financial statements as of June 30, 2023.
60
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
Other capital reserves
Other capital reserves is comprised of a reserve set-up by the Group share-based payment (an equity-settled share-based compensation plan).
Share based payment
Share Options
On August 17, 2022, the Group approved the Lavoro Agro Holding S.A. Long-Term Incentive Policy (the “Lavoro Share Plan”). Under the Lavoro Share Plan, individuals selected by the Lavoro board of directors (“Selected Employees”) are eligible to receive incentive compensation consisting of cash, assets or share options issued by Lavoro Agro Limited, in an amount linked to the appreciation in the Lavoro Agro Limited share price at the time of the liquidity event, upon the satisfaction of certain conditions, as described below.
As of March 31, 2024, Lavoro has granted 42,102,065 share options as incentive compensation to Selected Employees, Share options granted under the Lavoro Share Plan will vest in the event the following market conditions are met (the “Market Conditions”):
(i)the occurrence of a liquidity event satisfying a minimum internal rate of return specified in the Lavoro Share Plan; and
(ii)the price per share obtained under such liquidity event must be greater than or equal to one of the following amounts:
(a)a pre-established reference price multiplied by three; or
(b)an amount calculated in accordance with a pre-established formula, in each case specified under the Lavoro Share Plan.
Moreover, upon the satisfaction of the Market Conditions, such share options will vest according to the following schedule (the “Service Conditions”):
(i)one-third of the options vest on the third anniversary of the grant date;
(ii)one-third of the options vest on the fourth anniversary of the grant date; and
(iii)one-third of the options vest on the fifth anniversary of the grant date.
The Lavoro Share Plan has a term of five years: if the Market Conditions have not been satisfied within this year, all options granted under the Lavoro Share Plan will be extinguished, with no further payment or incentive obligation remaining due by Lavoro. The consummation of the SPAC Transaction (See Note 1 to the Group’s annual consolidated financial statements as of June 30, 2023)) did not satisfy the Market Conditions.
As of February 28, 2023, the shareholders of Lavoro approved the Lavoro Share Plan. As a result, Lavoro reserved for issuance the number of ordinary shares equal to the number of Lavoro Share Plan Shares under the Lavoro Share Plan, as adjusted in accordance with the Business Combination Agreement, in an amount of 1,663,405 ordinary shares.
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
The exercise price of the share-based payment is equal to the options price agreed with the employee in the contracts, representing the amount of R$1 monetarily adjusted until the date on which the liquidity event occurs.
The fair value of share options granted is estimated at the date of grant considering the terms and conditions using the Black-Scholes model, taking into account the terms and conditions on which the share options were granted. The model also takes into account historical and expected dividends, and the share price volatility of Lavoro.
The expense recognized for employee services received during the period and the number of options granted is shown in the following tables:
Other capital
reserves
At June 30, 2022- 
Share-based payments expense during the year14,533 
At June 30, 202314,533 
Share-based payments expense during the period910 
Share-based payments reversal during the period(1,356)
At March 31, 202414,087 
    
Options granted
At June 30, 2022-
Granted options49,518,732
Canceled(3,800,000)
At June 30, 202345,718,732
Canceled(3,566,672)
At March 31, 202442,152,060
The weighted average fair value of the options granted was R$0.44 per option. The significant data included in the model were: weighted average share price of R$2.88 on the grant date, exercise price presented above, volatility of 33.88%, no dividend
62
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
yield, an expected option life of 3.37 years and a risk-free annual interest rate of 12.45%.
Lavoro Limited Restricted Stock Unit Plan (“RSU Plan”)

On May 26, 2023 the Board of Directors approved a long-term incentive plan (the “Restricted Stock Unit Plan” or the “RSU Plan”) in which beneficiaries will be granted equity awards pursuant to the terms and conditions of the RSU Plan and any applicable award agreement. Each RSU, once all the conditions under the plan are met, shall entitle the participant to receive one share issued by Lavoro Limited at no cost.
The total number of shares that may be delivered to the participants within the scope of the plan shall not exceed five percent of shares representing the Group’s total share capital.

On August 16, 2023 and September 28, 2023, (the grant date) the board of directors of Lavoro (the “Board”) approved the RSU Plan, which provides for the grant of restricted stock units to participants identified by the Board.
The RSUs will vest according to the following schedule, except if otherwise established by the Board of Directors:
(i) one-third of the options vest on the third anniversary of the vesting date;
(ii) one-third of the options vest on the fourth anniversary of the vesting date; and
(iii) one-third of the options vest on the fifth anniversary of the vesting date.

In the event of termination/dismissal of the participant, all unvested RSUs shall be automatically extinguished with not compensation rights. participant, all RSUs whose vesting period has not elapsed on the date of such termination/dismissal shall be automatically extinguished without being entitled any right to compensation.

The fair value of shares granted was measured at the market price of Lavoro’s share at the grant date.



As of March 31, 2024, the number of RSU granted is shown in the following tables:
RSUs granted
At June 30, 2023-
Granted options1,597,076
Canceled(57,274)
At March 31, 20241,539,802

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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
The weighted average fair value of the shares granted was R$27.14 per share.

The expense for employee services received during the period was R$13,900.
Earnings per share
Earnings (loss) per share is calculated by dividing the profit (loss) for the period attributable to equity holders of the parent by the weighted average number of common shares available during the fiscal year. Diluted earnings (loss) per share is calculated by adjusting the weighted average number of common shares, presuming the conversion of all the potential diluted common shares.
The number of ordinary shares issued by Lavoro, as a result of the corporate reorganization is reflected retroactively, for purposes of calculating earnings per share in the period ended March 31, 2023.
The table below show data used in calculating basic and diluted earnings (loss) per share attributable to the equity holders of the parent:
Three-month period ended March 31,Nine-month period ended March 31,
2024202320242023
Weighted average ordinary shares of Lavoro113,602113,602113,602113,602
Effects of dilution from:
Share-based payment (i)2,1091,6062,1501,606
Restricted stock unit plan (ii)1,540-1,376-
Number of ordinary shares adjusted for the effect of dilution117,251115,208117,128115,208
Loss for the period attributable to net investment of the parent/equity holders of the parent(292,886)(387,547)(374,434)(178,237)
Basic loss per share(2.58)(3.41)(3.30)(1.57)
Diluted loss per share(2.58)(3.41)(3.30)(1.57)
(i)Based on the numbers of shares reserved by Lavoro Limited to the Lavoro Share Plan, as explained above
(ii)Based on the numbers of shares reserved by Lavoro Limited to the Lavoro RSU Plan, as explained above.
The Group reported a loss for the three and nine -month period ended March 31, 2024, accordingly the ordinary shares related to the share-based payment and RSU Plan have a non-dilutive effect and therefore were not considered in the total number of shares outstanding to determine the diluted earnings (loss) per share.
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
All public and private warrants are out of the money as of March 31, 2024; therefore, the approximately 6,012,085 and 4,071,507 public and private warrants, respectively, were not included in the calculation of the diluted earnings (loss) per share. Similarly, the 3,060,662 Founder Shares, that were detailed in Note 22 to the Group’s annual consolidated financial statements as of June 30, 2023, were not considered in the calculation of the diluted earnings (loss) per share due to the Group’s market share price.
25. Revenue from contracts with customers
Below is revenue from contracts with customers disaggregated by product line and geographic location:
Three-month period ended March 31,Nine-month period ended March 31,
2024202320242023
Inputs Retails sales
Brazil1,730,024 1,847,866 5,884,776 6,263,798 
Colombia 214,304 239,633 721,832 840,149 
Private Label products
Crop Care135,860 147,245 582,212 474,848 
Grains (i)
Brazil429,821 280,471 660,072 393,495 
Colombia 3,240 1,213 38,184 32,894 
Services
Colombia32,575 9,727 90,606 27,146 
Total Revenues2,545,824 2,526,155 7,977,682 8,032,330 
Summarized by region
Brazil2,295,704 2,275,582 7,127,060 7,132,141 
Colombia250,120 250,573 850,622 900,189 
(i)As explained in Note 7 (iii), the Group receives grains from certain customers in exchange to the product sold. The fair value of such non-cash consideration received from the customer is included in the transaction price and measured when the Group obtains control of the grains. The Group estimates the fair value of the non-cash consideration by reference to its market price.
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
26. Costs and expenses by nature
The breakdown of costs and expenses by nature is as follows:
Three-month period ended March 31,Nine-month period ended March 31,
2024202320242023
Cost of inventory (i)2,215,725 2,114,075 6,762,623 6,459,093 
Personnel expenses168,185 178,519 442,718 477,004 
Maintenance of the units10,109 11,026 32,614 26,482 
Consulting, legal and other services26,365 34,226 86,699 84,460 
Freight on sales29,020 16,705 103,596 44,271 
Commissions17,436 15,840 70,871 43,771 
Storage4,202 2,387 14,981 5,404 
Travel7,885 7,725 25,278 24,543 
Depreciation 5,276 4,272 14,985 12,512 
Amortization of intangibles17,707 17,244 53,018 52,921 
Amortization of right-of-use assets25,421 13,990 64,669 38,160 
Taxes and fees(3,202)7,372 18,486 21,998 
Short term rentals(1,258)9,878 7,468 24,187 
Business events(290)1,889 5,597 6,819 
Marketing and advertising3,773 4,332 12,938 11,470 
Insurance(1,148)1,309 5,615 5,683 
Utilities3,373 3,683 10,122 14,892 
Allowance for expected credit losses42,520 22,028 118,732 39,866 
Losses and damage of inventories(854)4,958 4,149 11,061 
Fuels and lubricants8,572 8,003 24,325 21,860 
Other administrative expenditures18,347 (22,803)46,029 19,374 
Total2,597,164 2,456,658 7,925,513 7,445,831 
Classified as:
Cost of goods sold2,247,938 2,152,758 6,875,929 6,533,610 
Sales, general and administrative expenses349,226 303,900 1,049,584 912,221 
(i)Includes fair value on inventory sold from acquired companies, in the nine-month of R$729 and R$23,808 respectively for the periods ended March 31, 2024 and 2023.
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
27. Finance income (costs)
Three-month period ended March 31,Nine-month period ended March 31,
2024202320242023
Finance income
Interest from cash equivalents5,903 1,562 17,351 6,193 
Interest arising from revenue contracts114,337 90,231 275,607 229,681 
Interest from tax benefit (see note 20)— 1,047 17,735 11,437 
Other4,270 4,063 11,115 9,475 
Total124,510 96,903 321,808 256,786 
Finance costs
Interest on borrowings(49,208)(77,040)(175,599)(204,845)
Interest on Agribusiness Receivables Certificates(15,608)— (15,608)— 
Interest on acquisitions of subsidiary(3,518)(352)(11,190)(3,258)
Interest on FIAGRO(2,107)2,763 (18,064)(22,171)
Interest on leases(6,055)(4,362)(14,750)(12,689)
Interest on trade payables(194,349)(156,755)(517,806)(435,931)
Other(46,410)(23,848)(78,305)(46,185)
Total(317,255)(259,594)(831,322)(725,079)
Other Finance Income (Cost)
Loss on fair value of commodity forward contracts(49,345)(7,712)(69,126)(12,686)
Gain on changes in fair value of derivative instruments14,570 7,513 7,623 - 
Foreign exchange differences on cash equivalents383 (10,620)8,629 (10,620)
Foreign exchange differences on trade receivables and trade payables, net(16,179)4,398 (5,011)(3,307)
Foreign exchange differences on borrowings(13,543)8,862 (2,941)8,862 
Gain on changes in fair value of warrants10,658 7,744 10,491 7,744 
Total(53,456)10,185 (50,335)(10,007)
Finance costs, net(246,201)(152,506)(559,849)(478,300)
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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
28. Other operating (income) expenses, net

Three-month period ended March 31,Nine-month period ended March 31,
2024202320242023
Listing expenses— (319,554)— (319,554)
Sales of fixed assets— (303)3,163 1,289 
Other operating income1,993 (12,377)20,742 17,740 
Total1,993 (332,234)23,905 (300,525)

29. Non-cash transactions

The Group engages in non-cash transactions which are not reflected in the statement of cash flows.

Additionally, the Group reported non-cash additions to right-of-use assets and lease liabilities of R$94,187 in the nine-month period ended March 31, 2024 (R$65,213 in the nine-period ended March 31, 2023).
30. Subsequent events
•New financing transactions

Following March 31, 2024, and up to the date of this interim consolidated financial statements, several of our Brazilian subsidiaries have executed multiple financing agreements, with principal sum of R$48,8 million, with interest rating from CDI Rate plus 3.5% to 18.4% and maturities ranging from September 2024 to June 2025.
•Law 14.789/2023 – Tax benefits suspension

The federal government suspended the income tax benefit arising from ICMS deduction, with effects starting in 2024. Consequently, in 2024, the Group will no longer be able to benefit from the income tax explained in Note 9.

•Floods in the Brazilian state of Rio Grande do Sul (RS)

During the preparation of the Financial Statements, the Group monitored the impacts of the climatic catastrophe resulting from severe floods in the Brazilian state of Rio Grande do Sul, which began in May 2024.

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Notes to the interim condensed consolidated financial statements
(In thousands of Brazilian reais - R$, except if otherwise indicated)
The physical structures of the companies located in the state have not been affected, with stores, warehouses, and products remaining intact so far. In particular, the production plant of adjuvants of Cromo Química in the city of Estrela (RS) has not suffered damage to infrastructure or inventory but stayed non-operational for a period due to lack of power and access to the plant. The operation has already been reestablished.

The future scenario is uncertain for upcoming plantings and harvests, with forecasts of negative impacts on future sales in various agricultural sectors, particularly regarding wheat planting. Significant loss of soybean volume yet to be harvested is forecasted, along with impacts on corn planting, and an estimate of rice productivity loss.

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