6-K 1 d835616d6k.htm 6-K 6-K
Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

Report of Foreign Issuer

Pursuant To Rule 13a-16 Or 15d-16

of the Securities Exchange Act of 1934

For the month of November, 2019

Commission File Number: 1-33659

COSAN LIMITED

(Translation of registrant’s name into English)

 

 

Av. Brigadeiro Faria Lima, 4100, – 16th floor

São Paulo, SP 04538-132 Brazil

(Address of principal executive offices)

 

 

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-F             X            

  Form 40-F                           

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

 

Yes                           

   No             X            

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

 

Yes                           

   No             X            


Table of Contents

 

Cosan Limited

Interim consolidated financial statements

September 30, 2019 and 2018

 


Table of Contents

Contents

 

Independent auditors’ report on review of interim financial information

     3  

Consolidated statements of financial position

     4  

Consolidated statements of profit or loss and other comprehensive income

     6  

Consolidated statements of changes in equity

     8  

Consolidated statements of cash flows

     10  

Notes to the interim consolidated financial statements

     13  

 

F-2


Table of Contents

LOGO

Independent Auditors’ Report on Review of Interim Financial Information

To the Management, Board of Directors and Shareholders of

Cosan Limited

Bermudas

Introduction

We have reviewed the accompanying September 30, 2019 consolidated interim financial information of Cosan Limited (“the Company”), which comprises the consolidated statement of financial position as at September 30, 2019 and the respective consolidated statements of profit or loss and comprehensive income for the three and nine-month periods then ended and the consolidated statements of changes in equity and cash flows for the nine-month period ended September 30, 2019, and the notes to the interim financial information.

Management is responsible for the preparation and presentation of this consolidated interim financial information in accordance with IAS 34, ‘Interim Financial Reporting. Our responsibility is to express a conclusion on this consolidated interim financial information based on our review.

Scope of Review

We conducted our review in accordance with the Brazilian and International Standard on Review Engagements (NBC TR 2410 - Revisão de Informações Intermediárias Executada pelo Auditor da Entidade and ISRE 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity). A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying September 30, 2019 consolidated interim financial information do not present fairly, in all material respects, the financial position, financial performance and cash flows of the entity in accordance with IAS 34, ‘Interim Financial Reporting’.

São Paulo, November 12, 2019

KPMG Auditores Independentes

CRC 2SP014428/O-6

Fabian Junqueira Sousa

Accountant CRC 1SP235639/O-0

 

F-3


Table of Contents

Cosan Limited

Consolidated statements of financial position

(In thousands of Brazilian Reais – R$)

 

 

 

     Note    September 30,
2019
     December 31,
2018
 

Assets

        

Cash and cash equivalents

   5.1      6,413,071        3,621,798  

Marketable securities

   5.2      2,353,433        4,202,835  

Trade receivables

   5.3      2,024,831        1,545,643  

Derivative financial instruments

   5.8      178,342        181,815  

Inventories

   7      806,252        716,290  

Receivables from related parties

   5.4      57,353        44,680  

Income tax receivable

        110,349        279,157  

Other current tax receivable

   6      976,062        796,199  

Dividends receivable

        34,339        27,320  

Other financial assets

   5.9      473,203        —    

Other current assets

        408,776        543,853  
     

 

 

    

 

 

 

Total current assets

        13,836,011        11,959,590  

Trade non-current receivables

   5.3      29,707        42,549  

Restricted cash

   5.2      155,417        115,124  

Deferred tax assets

   13      1,560,885        1,540,693  

Receivables from related parties

   5.4      192,873        90,390  

Income taxes receivable

        230,408        260,330  

Other non-current tax receivable

   6      863,718        851,492  

Judicial deposits

   14      956,013        878,807  

Derivative financial instruments

   5.8      4,153,727        2,367,042  

Other non-current assets

        707,193        407,916  

Investments in associates

   8.1      383,760        378,519  

Investments in joint ventures

   9      7,558,291        8,077,907  

Right-of-use assets

   10.3      4,490,576        —    

Property, plant and equipment

   10.1      11,927,772        12,417,822  

Intangible assets and goodwill

   10.2      16,880,436        16,972,535  
     

 

 

    

 

 

 

Total non-current assets

        50,090,776        44,401,126  
     

 

 

    

 

 

 

Total assets

        63,926,787        56,360,716  
     

 

 

    

 

 

 

The accompanying notes are an integral part of these interim financial statements.

 

F-4


Table of Contents

Cosan Limited

Consolidated statements of financial position

(In thousands of Brazilian Reais – R$)

 

 

     Note    September 30,
2019
    December 31,
2018
 

Liabilities

       

Loans, borrowings and debentures

   5.5      3,378,585       2,115,305  

Leases

   5.6      548,618       120,491  

Derivative financial instruments

   5.8      77       3,880  

Trade payables

   5.7      2,197,873       1,923,920  

Employee benefits payable

        393,858       339,968  

Income tax payables

        378,554       36,164  

Other taxes payable

   12      447,616       245,587  

Dividends payable

        21,015       187,415  

Concessions payable

   11      9,392       28,797  

Payables to related parties

   5.4      416,805       355,971  

Deferred revenue

        7,606       9,473  

Other financial liabilities

        445,612       455,702  

Other current liabilities

        299,401       418,145  
     

 

 

   

 

 

 

Total current liabilities

        8,545,012       6,240,818  

Loans, borrowings and debentures

   5.5      23,629,373       20,459,008  

Leases

   5.6      4,076,492       432,859  

Preferred shareholders payable in subsidiaries

        744,455       1,097,490  

Derivative financial instruments

   5.8      55,909       21,834  

Other taxes payable

   12      155,484       154,599  

Provision for legal proceedings

   14      1,436,042       1,363,168  

Concessions payable

   11      3,375,035       3,179,771  

Post-employment benefits

   22      598,090       579,870  

Deferred tax liabilities

   13      3,971,658       4,093,019  

Deferred revenue

        37,525       42,044  

Other non-current liabilities

        701,478       726,880  
     

 

 

   

 

 

 

Total non-current liabilities

        38,781,541       32,150,542  
     

 

 

   

 

 

 

Total liabilities

        47,326,553       38,391,360  
     

 

 

   

 

 

 

Shareholders’ equity

   15     

Share capital

        5,328       5,328  

Additional paid-in capital

        1,348,070       3,112,274  

Accumulated other comprehensive loss

        (819,509     (587,173

Retained earnings

        4,957,905       4,083,974  

Equity attributable to:

       

Owners of the Company

        5,491,794       6,614,403  

Non-controlling interests

   8.2      11,108,440       11,354,953  
     

 

 

   

 

 

 

Total shareholders’ equity

        16,600,234       17,969,356  
     

 

 

   

 

 

 

Total shareholders’ equity and liabilities

        63,926,787       56,360,716  
     

 

 

   

 

 

 

The accompanying notes are an integral part of these interim financial statements.

 

F-5


Table of Contents

Cosan Limited

Consolidated statement of profit or loss and other comprehensive income

(In thousands of Brazilian Reais – R$, except earnings per share)

 

 

 

     Note    July 1,
2019 to
September 30,
2019
    January 1,
2019 to
September 30,
2019
    July 1,
2018 to
September 30,
2018
    January 1,
2018 to
September 30,
2018
 

Net sales

   17      5,731,188       15,524,259       4,778,417       12,396,336  

Cost of sales

   18      (3,764,806     (10,711,479     (3,406,199     (8,832,176
     

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

        1,966,382       4,812,780       1,372,218       3,564,160  
     

 

 

   

 

 

   

 

 

   

 

 

 

Selling expenses

   18      (300,649     (832,575     (255,186     (747,787

General and administrative expenses

   18      (336,025     (877,207     (242,555     (692,260

Other income (expenses), net

   19      536,694       535,010       (44,706     (88,226
     

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses

        (99,980     (1,174,772     (542,447     (1,528,273
     

 

 

   

 

 

   

 

 

   

 

 

 

Profit before equity in earnings of investees, financial results and taxes

        1,866,402       3,638,008       829,771       2,035,887  
     

 

 

   

 

 

   

 

 

   

 

 

 

Interest in earnings of associates

   8.1      9,689       (10,023     1,391       17,028  

Interest in earnings of joint ventures

   9      148,185       510,428       84,089       432,202  
     

 

 

   

 

 

   

 

 

   

 

 

 

Equity in earnings of investees

        157,874       500,405       85,479       449,230  

Finance expense

        (842,444     (2,772,617     (925,992     (1,938,293

Finance income

        212,017       530,887       179,977       527,068  

Foreign exchange, net

        (939,035     (831,922     (408,650     (1,876,386

Derivatives

        1,081,239       1,747,049       631,001       1,499,434  
     

 

 

   

 

 

   

 

 

   

 

 

 

Finance results, net

   20      (488,223     (1,326,603     (523,664     (1,788,177

Profit before taxes

        1,536,053       2,811,810       391,586       696,940  
     

 

 

   

 

 

   

 

 

   

 

 

 

Income tax (expenses), benefits

   13         

Current

        (403,822     (809,301     (109,297     (93,110

Deferred

        16,327       83,141       5,630       (93,291
     

 

 

   

 

 

   

 

 

   

 

 

 
        (387,495     (726,160     (103,667     (186,401

Profit for the period

        1,148,558       2,085,650       287,919       510,539  
     

 

 

   

 

 

   

 

 

   

 

 

 

 

F-6


Table of Contents

Cosan Limited

Consolidated statement of profit or loss and other comprehensive income

(In thousands of Brazilian Reais – R$, except earnings per share)

 

 

 

Other comprehensive income (loss)            

Items that will never be reclassified to profit or loss

           

Actuarial loss on defined benefit plan

        (2     (2     —         (1,042
     

 

 

   

 

 

   

 

 

   

 

 

 
        (2     (2     —         (1,042

Items that are or may subsequently be reclassified to profit or loss:

           

Foreign currency translation effect

        3,698       (48,548     (55,920     (275,943

Gain / (loss) on cash flow hedge in joint ventures

        (98,357     (250,277     (28,983     (112,937

Changes in fair value of financial assets

        28       103       42       95  
     

 

 

   

 

 

   

 

 

   

 

 

 
        (94,633     (298,724     (84,861     (388,785

Total other comprehensive (loss) income, net of tax

        (94,631     (298,724     (84,861     (389,827
     

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income

        1,053,925       1,786,926       203,058       120,712  
     

 

 

   

 

 

   

 

 

   

 

 

 

Total net income attributable to:

           

Owners of the Company

        560,786       959,403       62,997       191,983  

Non-controlling interests

        587,772       1,126,247       224,922       318,556  
     

 

 

   

 

 

   

 

 

   

 

 

 
        1,148,558       2,085,650       287,919       510,539  

Total comprehensive income attributable to:

           

Owners of the Company

        444,773       727,067       (6,199     (129,724

Non-controlling interests

        609,153       1,059,859       209,257       250,436  
     

 

 

   

 

 

   

 

 

   

 

 

 
        1,053,926       1,786,926       203,058       120,712  

Basic earnings per share from:

           

Continuing operations

     16        R$2.4283       R$4.1588       R$0.2575       R$0.7873  
     

 

 

   

 

 

   

 

 

   

 

 

 

Basic earnings per share from:

        R$2.4283       R$4.1588       R$0.2575       R$0.7873  

Diluted earnings per share from:

           

Continuing operations

     16        R$2.3365       R$3.9921       R$0.2467       R$0.7528  
     

 

 

   

 

 

   

 

 

   

 

 

 

Diluted earnings per share from:

        R$2.3365       R$3.9921       R$0.2467       R$0.7528  

The accompanying notes are an integral part of these interim financial statements.

 

F-7


Table of Contents

Cosan Limited

Consolidated statement of changes in equity

(In thousands of Brazilian Reais – R$)

 

 

     Share
capital
     Additional
paid-in
capital
    Accumulated
other
comprehensive
loss
    Retained
earnings
    Equity
attributable
to owners of
the Company
    Non-controlling
interest
    Total equity  

At December 31, 2018

     5,328        3,112,274       (587,173     4,083,974       6,614,403       11,354,953       17,969,356  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Initial adoption of IFRS 16, net of tax—Note 3.1

     —          —         —         (97,971     (97,971     (377,420     (475,391
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

At January 1, 2019

     5,328        3,112,274       (587,173     3,986,003       6,516,432       10,977,533       17,493,965  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income for the period

     —          —         —         959,403       959,403       1,126,247       2,085,650  

Other comprehensive income (Note 15):

               

Loss on cash flow hedge in joint ventures

     —          —         (150,804     —         (150,804     (99,473     (250,277

Foreign currency translation effects

     —          —         (81,594     —         (81,594     33,046       (48,548

Actuarial loss on defined benefit plan

     —          —         —         —         —         (2     (2

Change in fair value of financial assets

     —          —         62       —         62       41       103  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income for the period

     —          —         (232,336     959,403       727,067       1,059,859       1,786,926  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Contributions by and distributions to owners of the Company:

               

Dividends—non-controlling interests

     —          (13,167     —         —         (13,167     13,196       29  

Prescribed Dividends—Note 5.4

     —          —         —         12,499       12,499       8,252       20,751  

Dividends

     —          —         —         —         —         (26,139     (26,139

Treasury shares acquired—Note 15

     —          (1,127,673     —         —         (1,127,673     —         (1,127,673

Share-based payment transactions

     —          18,783       —         —         18,783       (3,499     15,284  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total contributions by and distributions to owners of the Company

     —          (1,122,057     —         12,499       (1,109,558     (8,190     (1,117,748
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Transactions with owners of the Company

               

Change of shareholding interest in subsidiary—Note 8.2

     —          (642,147     —         —         (642,147     (920,762     (1,562,909
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

At September 30, 2019

     5,328        1,348,070       (819,509     4,957,905       5,491,794       11,108,440       16,600,234  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

The accompanying notes are an integral part of these interim financial statements.

 

F-8


Table of Contents

Cosan Limited

Consolidated statement of changes in equity

(In thousands of Brazilian Reais – R$)

 

 

 

     Share
capital
     Additional
paid-in
capital
    Accumulated
other
comprehensive
loss
    Retained
earnings
    Equity
attributable
to owners of
the Company
    Non-controlling
interest
    Total equity  

At December 31, 2017

     5,328        3,245,543       (394,212     3,182,098       6,038,757       11,020,656       17,059,413  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjustment on initial application of IFRS 9, net of tax

     —          —         —         (3,950     (3,950     (4,738     (8,688
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

At January 1, 2018

     5,328        3,245,543       (394,212     3,178,148       6,034,807       11,015,918       17,050,725  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income for the year

     —          —         —         191,983       191,983       318,556       510,539  

Other comprehensive income (Note 15):

               

Gain on cash flow hedge in joint ventures

     —          —         (67,238     —         (67,238     (45,699     (112,937

Foreign currency translation effects

     —          —         (254,310     —         (254,310     (21,633     (275,943

Actuarial loss on defined benefit plan

     —          —         (215     —         (215     (827     (1,042

Change in fair value of financial assets

     —          —         56       —         56       39       95  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income for the year

     —          —         (321,707     191,983       (129,724     250,436       120,712  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Contributions by and distributions to owners of the Company:

               

Dividends—non-controlling interests

     —          (7,349     —         —         (7,349     7,349       —    

Share options exercised—Subsidiaries

     —          14,795       —         —         14,795       9,753       24,548  

Dividends

     —          —         —         (69,622     (69,622     (72,554     (142,176

Business combination

     —          —         —         —         —         7,199       7,199  

Share-based payment transactions

     —          32,487       —         —         32,487       6,994       39,481  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total contributions by and distributions to owners of the Company

     —          39,933       —         (69,622     (29,689     (41,259     (70,948
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Transactions with owners of the Company

               

Change of shareholding interest in subsidiary

     —          (178,791     —         —         (178,791     (424,635     (603,426
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

At September 30, 2018

     5,328        3,106,685       (715,919     3,300,509       5,696,603       10,800,460       16,497,063  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

The accompanying notes are an integral part of these interim financial statements.

 

F-9


Table of Contents

Cosan Limited

Consolidated statement of cash flows

(In thousands of Brazilian Reais – R$)

 

 

     Note    September 30,
2019
    September 30,
2018
 

Cash flows from operating activities

       

Profit before taxes

        2,811,810       696,940  

Adjustments for:

       

Depreciation and amortization

        1,713,478       1,483,860  

Lease and concession

        —         152,645  

Interest in earnings of associates

   8.1      10,023       (17,028

Interest in earnings of joint ventures

   9      (510,428     (432,202

Loss on disposals assets

        16,789       2,809  

Share-based payment

        73,264       40,616  

Legal proceedings provision

        88,075       87,040  

Indexation charges, interest and exchange, net

        1,462,383       1,883,010  

Deferred revenue

        (6,386     (8,542

Provisions for employee benefits

        166,789       135,708  

Allowance for doubtful accounts

        1,065       11,909  

Sales of credit rights

   19      (400,000     —    

Recovering tax credits

        (261,314     —    

Other

        (49,892     (22,068
     

 

 

   

 

 

 
          5,115,656     4,014,697  

Changes in:

       

Trade receivables

        (393,102     (278,380

Inventories

        (110,629     (78,373

Other current tax, net

        219,894       (144,445

Income tax

        (246,895     (59,379

Related parties, net

        20,426       (10,705

Trade payables

        434,291       231,639  

Employee benefits

        (126,830     (138,853

Provision for legal proceedings

        (97,041     (97,402

Other financial assets

        (41,733     8,679  

Judicial deposits

        (60,619     (48,227

Cash received on sale of credit rights

        —         1,340,000  

Post-employment benefits

        (26,625     (23,200

Concessions payable

        7,256       (79,681

Other assets and liabilities, net

        (307,559     (213,075
     

 

 

   

 

 

 
        (729,166     408,598  

Net cash generated by operating activities

        4,386,490       4,423,295  
     

 

 

   

 

 

 

Cash flows from investing activities

       

Capital contribution in associates

   8.1      (26,045     (7,517

Acquisition of subsidiary, net of cash acquired

        (9,837     (73,945

Marketable securities

        1,956,806       344,615  

Restricted cash

        (38,311     112,549  

Dividends received from associates

        15,983       11,251  

Dividends received from joint ventures

        869,731       1,052,127  

Acquisition of property, plant and equipment, intangible assets, right-of-use assets and contract assets

        (1,931,834     (1,993,435

Cash received on sale of fixed assets, and intangible assets

        10,578       1,576  
     

 

 

   

 

 

 

Net cash generated (used) in investing activities

        847,071       (552,779
     

 

 

   

 

 

 

 

F-10


Table of Contents

Cosan Limited

Consolidated statement of cash flows

(In thousands of Brazilian Reais – R$)

 

 

 

Cash flows from financing activities

       

Loans, borrowings and debentures raised

     5.5        5,843,052       2,750,267  

Amortization of principal on loans, borrowings and debentures

     5.5        (3,558,946     (4,685,398

Payment of interest on loans, borrowings and debentures

     5.5        (1,142,512     (1,186,695

Payment of derivative financial instruments

        (169,335     (1,035,889

Receipt of derivative financial instruments

        235,201       1,288,316  

Amortization of principal on leases

     5.6        (358,934     (352,506

Payment of interest on leases

     5.6        (148,089     (130,294

Real estate credit certificates

        —         (77,404

Paid-in Capital from non-controlling interest

        465,651       —    

Payments to redeem entity’s shares

     15        (1,127,673     (607,932

Non-controlling interest subscription

        1,192       4,163  

Acquisition of non-controlling interests (i)

        (2,145,761     —    

Dividends paid

        (579,489     (731,055

Share options exercised

        (45,961     24,548  
     

 

 

   

 

 

 

Net cash used in financing activities

        (2,731,604     (4,739,879
     

 

 

   

 

 

 

Increase (decrease) in cash and cash equivalents

        2,501,957       (869,363
     

 

 

   

 

 

 

Cash and cash equivalents at beginning of period

        3,621,798       4,555,177  
     

 

 

   

 

 

 

Effect of exchange rate fluctuations on cash held

        289,316       337,383  
     

 

 

   

 

 

 

Cash and cash equivalents at end of period

        6,413,071       4,023,197  
     

 

 

   

 

 

 

Additional information

       

Income tax paid

        201,284       65,452  

 

(i)

Acquisition of class A preferred shares issued by Companhia de Gás de São Paulo – Comgás (“Comgás”), and 22,597886 Preferred Shares and 2,527,682 ordinary shares were acquired by subsidiary Cosan S.A., representing 19.02% of Comgás’ capital stock in the amount of R$2,066,105 and the Company acquired class A common shares issued by Cosan Logística S.A. (“Cosan Logística”) in the amount of R$79,656, totaling an acquisition effect of R$2,145,761.

The accompanying notes are an integral part of these interim financial statements.

 

F-11


Table of Contents

Cosan Limited

Consolidated statement of cash flows

(In thousands of Brazilian Reais – R$)

 

 

Non-cash transaction

 

  i.

Acquisitions of assets for the construction of the distribution network with payment of term in the amount of R$71,467 and acquisitions of assets with payment of term in the amount of R$13,321.

 

  ii.

Consideration asset in the subsidiary Cosan Lubrificantes e Especialidades S.A. (“CLE”), with a down payment in the amount of R$145,761.

 

  iii.

Recognition of indemnity claims in the amount of R$50,284 (Note 19).

 

  iv.

Recognition of assignment of credit rights, for attend IFRS 15 requirements for the amount of R$ 400,000 plus additional payments applicable to the applications of 95% on the difference between the net amount of credit rights received by the Union for assignment less the return of assignees on a basis of R$ 400,000, resulting from (i) indemnity action, applied to the condemnation of the Union due to the fixing of prices of sugar and alcohol below its cost of production; and (ii) additional payments related to the assignment of credit rights executed on December 21, 2017 and application of 95% of the net difference received by the Union credit rights for the assignment less or return of the assignees (Note 19). Such assignment has no right of recourse.

 

  v.

Recognition of tax assets related to the exclusion of a tax on sales and services which applies to goods, and transportation and communication (Imposto sobre Operações relativas à Circulação de Mercadorias e Prestação de Serviços de Transporte Interestadual e Intermunicipal e de Comunicação), or “ICMS,” from the calculation basis of PIS and COFINS (respectively, the profit participation contribution and the social security financing contribution, both of which are social contributions due on certain revenues net of some expenses) contributions, in the total amount of R$457,088, which R$239,065 is recorded under “Other income,” R$82,694 as of “Interest on other receivables” and R$135,329 through equity method referring to the jointly controlled investees (Note 19).

 

  vi.

Capital contribution to the subsidiary Payly Soluções de Pagamentos S.A. (“Payly”) in the amount of R$6,436, through capitalization of expenses that would be reimbursed to Cosan.

 

  vii.

Recognition of right of use in the amount of R$2,904,778 (Note 10.3) referring to the North-South Railroad Concession agreement and R$16,413 related to other lease agreements.

Disclosure of interest and dividends

The Company discloses the dividends and interest on shareholders’ equity received as cash flow from investing activities, with the purpose of avoiding distortions in its cash flows from operation activities.

Interest received or paid is classified as cash flow from financing activities, as it is considered to refer to the costs of obtaining financial resources.

 

F-12


Table of Contents

Cosan Limited

Notes to the interim consolidated financial statements

(In thousands of Brazilian Reais – R$)

 

 

1

Operations

Cosan Limited (“Cosan”) was incorporated in Bermuda on April 30, 2007. Cosan’s class A common shares are traded on the New York Stock Exchange, or “NYSE,” (ticker—CZZ). Mr. Rubens Ometto Silveira Mello is the ultimate controlling shareholder of Cosan. Cosan controls its subsidiaries Cosan S.A. and Cosan Logística S.A. (“Cosan Logística”) through a 59.29% and 73.46% interest, respectively. Cosan, Cosan S.A., Cosan Logística and its subsidiaries are collectively referred to as the “Company.”

On January 3, 2019, the Company acquired 14,228,134 of our Class A common shares pursuant to a tender offer at a purchase price of U.S.$8.88 per share, for a total cost of R$473,456 excluding fees and other related expenses. These shares represented 9.6% of the issued and outstanding Class A common stock of Cosan Limited as of December 31, 2018. The shares purchased included 2,966,873 additional shares that Cosan Limited elected to purchase pursuant to its right to purchase up to an additional 2% of its outstanding Class A common shares. After giving effect to the purchase, we had 134,115,534 outstanding Class A common shares remaining. On September 30, 2019, the Company purchased 10,244,806 of its class A common shares pursuant to a public offering and a purchase price of $ 15.5 per share, with a total cost of R$654,217 excluding taxes and other related expenses. After the purchase effect, 125,477,259 class A shares are outstanding. The Company’s share acquisitions during the period totaled R$1,127,673 (Note 15).

On March 28, 2019, Rumo SA (“Rumo”) won the International Competition (Bidding) for the North-South Railroad, through an economic bid of R$2,719,530, conducted by the National Land Transportation Agency (“ANTT”), whose scope is the subconcession of the public rail freight service associated with the operation of the railway network infrastructure located between Porto Nacional / TO and Estrela d´Oeste / SP, in the stretches between (i) Porto Nacional / TO and Anápolis / GO; and (ii) Ouro Verde de Goiás / GO and Estrela d’Oeste / SP. The concession agreement guarantees the right to operate the railway network for a period of 30 years from the date of signature on July 31, 2019 (Note 10.3).

On April 24, 2019, we announced the cancellation of 32,239,807 Class A common shares held in treasury, representing 11.91% of Cosan Limited’s capital stock. After giving effect to the cancellation, we had 142,115,534 total Class A common shares remaining (Note 15).

On May 31, 2019, the São Paulo State Sanitation and Energy Regulatory Agency (“ARSESP”), resolved on the 4th Ordinary Tariff Review regarding the update of Comgás subsidiary rates, applied from that date, on all segments. The annual adjustment consists essentially of the inflation replacement (IGP-M) and the transfer of the gas and transportation cost variation, as defined by Petrobras. The process of the 3rd Tariff Review, contractually scheduled to take place in May 2014, remains unfinished.

On June 11, 2019, the Board of Directors of Comgás, with the assent of the Fiscal Council, considering that the capital stock became excessive for the normal development of the subsidiary Comgás business and for the achievement of its corporate purpose, approved the proposal reduction of the subsidiary Comgás capital stock, in the amount of R$1,500,000 without cancellation of shares, maintaining unchanged the percentage of the shareholders’ interest in the subsidiary Comgás capital stock, with the refund in cash to the shareholders of part of the your actions. At the date of approval of these interim financial statements, the aforementioned capital reduction process had not yet been implemented, and the subsidiary Comgás capital stock remained unchanged compared to the immediately preceding period.

 

F-13


Table of Contents

Cosan Limited

Notes to the interim consolidated financial statements

(In thousands of Brazilian Reais – R$)

 

 

2

Statement of compliance

The consolidated interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting, as issued by the International Accounting Standards Board (IASB). They do not include all the information required for a complete set of IFRS financial statements. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Company’s financial position and performance since the last annual consolidated financial statements as at and for the year ended December 31, 2018.

The significant judgments made by management in applying the Company’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended December 31, 2018, except for the adoption of IFRS 16 Leases, whose effects and changes are disclosed in Note 3.1, effective as of January 1, 2019. The Company has not early adopted any other standard, interpretation or amendment that has been issued.

All own relevant information of the interim financial statements, and only they, are being highlighted, and these correspond to those used by management in its management.

These interim consolidated financial statements were authorized for issue by the Board of Directors on November 08, 2019.

 

3

Accounting policies

These interim consolidated financial statements were prepared based on the preparation basis and accounting policies consistent with those adopted in the preparation of the financial statements as of December 31, 2018, except for the adoption of IFRS 16—Leases, whose effects and changes are disclosed in Note 3.1 effective as of January 1, 2019. The Company has not adopted in advance any other standard or interpretation issued that is not yet in force.

 

3.1

New standards, interpretations and changes adopted by the Company

IFRS 16 Leases

IFRS 16 introduced a single model for the accounting of leases in the balance sheet of lessees. As a result, the Company, as a lessee, recognized the rights to use assets that represent its rights to use the underlying assets and the lease liabilities that represent its obligation to make lease payments. The lessor’s accounting remains similar to previous accounting policies.

The Company has chosen to use the modified retrospective approach in which the cumulative effect of the initial adoption is recognized as an adjustment to the opening balance of retained earnings on January 1, 2019. Therefore, the comparative information presented for the year ended December 31, 2018 has not been restated—or and is presented as previously reported in accordance with IAS 17 and related interpretations. The details of the changes in accounting policies are disclosed below:

 

 

F-14


Table of Contents

Cosan Limited

Notes to the interim consolidated financial statements

(In thousands of Brazilian Reais – R$)

 

 

(a)

In the definition of lease

Previously, the Company determined, at the inception of the agreement, whether it was or contained a lease under IFRIC 4—Complementary Aspects of Leasing Operations. The Company now assesses whether a lease is or contains a lease based on the new lease definition. According to IFRS 16, a contract is or contains a lease if it transfers the right to control the use of an identified asset for a period of time in exchange for consideration.

In the transition to IFRS 16, the Company opted to apply the practical case of maintaining the evaluation of which transactions are leases, to which IFRS 16 applied. The contracts that were not identified as leases in accordance with IAS 17 and IFRIC 4 were not revalued. Accordingly, the new lease definition in accordance with IFRS 16 was applied only to contracts entered into or amended on or after January 1, 2019.

At the inception or revaluation of a lease component, the Company allocates the lease consideration to each lease component rather than lease based on its individual lease price.

 

(b)

In the treatment as a lessee

The company leases assets, including real estate, rail infrastructure, port, rolling stock (locomotives and wagons), vehicles and IT equipment. As a lessee, the Company previously classified operating or financial leases based on its assessment as to whether the lease substantially transferred all the risks and benefits of the property. In accordance with IFRS 16, the Company recognizes the right to use assets and the lease liabilities for most leases—that is, these leases are recorded in the balance sheet.

However, the Company has elected not to recognize right-of-use assets and lease liabilities for some leases of low value assets (e.g. IT equipment). The Company recognizes the payments associated with these leases as an expense under the straight-line method over the lease term.

The Company presents the carrying amounts of the right-of-use assets (including assets previously classified as financial leases) in a specific balance sheet line called “Right-of-use assets.” Likewise, it records the liabilities in a separate account called “Leases.”

 

(i)

Accounting policy adopted as of January 1, 2019 meaning:

Previously, the Company determined at the inception of the agreement whether it was or contained a lease under IFRIC 4—Complementary Aspects of Leasing Operations. The company now assesses whether a lease is or contains a lease based on the new lease definition. According to IFRS 16, a contract is or contains a lease if it transfers the right to control the use of an identified asset for a period of time in exchange for consideration.

The Company recognizes a right-of-use assets and a lease liability at the date of commencement of the lease.

The right-of-use assets is initially measured at cost and subsequently at cost less any accumulated depreciation and impairment, and adjusted for certain measurements of lease liabilities.

 

 

F-15


Table of Contents

Cosan Limited

Notes to the interim consolidated financial statements

(In thousands of Brazilian Reais – R$)

 

 

The lease liability is initially measured at the present value of the lease payments that were not paid at the commencement date, discounted using the interest rate implied in the lease or, if that rate can not be determined immediately, the incremental loan rate of Company and its subsidiaries. Generally, the Company uses its incremental loan rate as the discount rate.

The Company has applied a judgment to determine the lease term of some contracts that include renewal options. The evaluation of whether the Company is reasonably certain to exercise these options has an impact on the term of the lease, which significantly affects the value of lease liabilities and recognized right-of-use assets. The extension and termination options are included in several lease agreements throughout the Company. These terms are used to maximize operational flexibility in terms of contract management. Most of the extension and termination options exercised are exercisable by both participants (lessor and lessee).

 

(ii)

Transition

Previously, the Company classified leases of railway infrastructure and rolling stock as operating leases in accordance with IAS 17. Some leases are adjusted by inflation indexes such as IGP-M or IPCA.

Lease liabilities were measured at the present value of the remaining payments, discounted by the incremental loan rate of the Company on January 1, 2019. The rights to use assets are measured:

 

  i.

At its book value as if IFRS 16 had been applied since the commencement date, discounted by the lessee’s incremental borrowing rate at the date of initial application—the company applied this approach to its larger property leases infrastructure , port and rolling stock; or

 

  ii.

At the amount equivalent to the lease liability, adjusted for the amount of any prepayment or accumulated rent—the Company applied this approach to all other leases.

The Company used the following practical arrangements when applying IFRS 16 to leases previously classified as operating leases in accordance with IAS 17:

 

  i.

It applied the exemption for not recognizing rights-of-use assets and liabilities for leases with terms less than 12 months.

 

  ii.

Excluded the initial direct costs of measuring the right to use asset at the date of initial application.

 

  iii.

It used late perception when determining the term of the lease if the contract contained options to extend or terminate the lease.

Leases classified and previously recorded as finance leases under IAS 17 had the book value of the right to use the asset and the lease liability on January 1, 2019 determined by the carrying amount of the lease and liability assets lease immediately prior to that date. Extension and termination options are included in various lease agreements throughout the Company. These terms are used to maximize operational flexibility in terms of contract management. Most of the extension and termination options exercised are exercisable by both participants (lessor and lessee).

 

 

F-16


Table of Contents

Cosan Limited

Notes to the interim consolidated financial statements

(In thousands of Brazilian Reais – R$)

 

 

(c)

Impact on statement of financial position on January 1, 2019:

 

     January 1,
2019
 

Current assets

  

Other current assets

     1,526  

Non-current assets

  

Other non-current assets

     7,878  

Deferred tax assets

     41,709  

Right-of-use assets

     888,262  
  

 

 

 

Total on non-current assets

     937,849  
  

 

 

 

Total on assets

     939,375  

Current liabilities

  

Leases

     (67,823

Non-current liabilities

  

Leases

     (1,346,943
  

 

 

 

Total on liabilities

     (1,414,766

Shareholders’ equity

  

Retained earnings

     475,391  
  

 

 

 

Total on shareholders’ equity

     475,391  

When measuring lease liabilities for those leases previously classified as operating leases, the Company discounted lease payments using its incremental loan rate on January 1, 2019. The weighted average rates applied follow a range from 4.00% to 12.70% per year.

The joint ventures Raízen Energia S.A. and Raízen Combustíveis S.A. recognized the lease liability and the right to use asset at the date of the initial application for leases previously classified as operating leases, retrospectively, with cumulative effect. These joint ventures used as a practical expedient the use of a single discount rate on the lease portfolio with similar characteristics (Note 9).

 

3.2

Other standards and interpretations effective as of January 1, 2019, without effects on the financial statements

IFRIC Interpretation 23 Uncertainty over Income Tax Treatment

The Interpretation addresses the accounting of income taxes when tax treatment involves uncertainty that affects the application of IAS 12 and does not apply to taxes or charges outside the scope of IAS 12, nor does it specifically treatment of interest and penalties associated with uncertain taxes.

The Company is subject to examination by the tax authorities, with the five fiscal years open in general. The Company has audits in progress at various stages of completion, some of which may be completed within the next 12 months. However, at that time, the Company had no uncertainties regarding the treatment of income tax.

The Company has not identified effects of interpretation adoption IFRIC 23 that could affect the Company accounting policies and its interim consolidated financial statements.

 

 

F-17


Table of Contents

Cosan Limited

Notes to the interim consolidated financial statements

(In thousands of Brazilian Reais – R$)

 

 

4

Segment information

The following segment information is used by Cosan’s senior management (the “Chief Operating Decision Maker”) to assess the performance of the operating segments and to make decisions with regards to the allocation of resources. This information is prepared on a basis consistent with the accounting policies used in the preparation of the financial statements. Cosan evaluates the performance of its operating segments based on the measure of Earnings Before Interest Tax, Depreciation and Amortization (“EBITDA”).

Reported segments:

 

  i.

Raízen Energia: production and marketing of a variety of products derived from sugar cane, including raw sugar (Very High Polarization, or “VHP”), anhydrous and hydrated ethanol, and activities related to energy cogeneration from sugarcane bagasse. In addition, this segment holds interests in companies engaged in research and development on new technology;

 

  ii.

Raízen Combustíveis: distribution and marketing of fuels, mainly through a franchised network of service stations under the “Shell” brand throughout Brazil, petroleum refining, the operation of fuel resellers, the manufacture and sale of automotive and industrial lubricants, and the production and sale of liquefied petroleum gas throughout Argentina;

 

  iii.

Comgás: distribution of piped natural gas to part of the State of São Paulo to customers in the industrial, residential, commercial, automotive and cogeneration sectors;

 

  iv.

Logistic: logistics services for rail transportation, storage and port loading of commodities, mainly for grains and sugar, leasing of locomotives, wagons and another railway equipment; and

 

  v.

Moove: production and distribution of Mobil brand licensed lubricants in Brazil, Bolivia, Uruguay, Paraguay, Argentina, the United States and the European market, under the Comma brand for the European and Asian markets and corporate activities.

Reconciliation:

 

  i.

Cosan Corporate: digital wallet platform and other investments, in addition to the corporate activities of the Company. The Cosan corporate segment includes the financing subsidiaries for the Cosan group.

Although, Raízen Energia and Raízen Combustíveis are equity accounted joint ventures and are no longer proportionally consolidated, senior management continues to review segment information. A reconciliation of these segments is presented in the column “Deconsolidated effects”.

 

F-18


Table of Contents

Cosan Limited

Notes to the interim consolidated financial statements

(In thousands of Brazilian Reais – R$)

 

 

     July 1, 2019 to September 30, 2019  
     Reported segments     Reconciliation     Consolidated  
     Raízen
Energia
    Raízen Combustíveis     Comgás     Moove     Logistic     Cosan
Corporate
    Deconsolidated
effects
    Segment
elimination
 
    Brazil     Argentina  

Statement of profit or loss:

                    

Gross sales

     8,106,015       23,227,089       4,601,197       3,271,286       1,370,626       2,162,347       26       (35,934,301     (14,958     6,789,327  

Domestic market (i)

     2,898,959       23,227,089       4,601,197       3,271,286       1,232,257       2,162,347       26       (30,727,245     (14,958     6,650,958  

External market (i)

     5,207,056       —         —         —         138,369       —         —         (5,207,056           138,369  

Net sales

     7,698,685       22,261,306       3,282,656       2,585,530       1,100,726       2,059,864       26       (33,242,647     (14,958     5,731,188  

Cost of sales

     (7,162,681     (21,353,241     (3,147,796     (1,666,191     (875,216     (1,238,323     (34     31,663,718       14,958       (3,764,806

Gross profit

     536,004       908,065       134,860       919,339       225,510       821,541       (8     (1,578,929           1,966,382  

Selling expenses

     (209,861     (381,113     (172,944     (154,529     (136,483     (6,637     (3,000     763,918             (300,649

General and administrative expenses

     (172,273     (130,677     (34,961     (98,255     (45,126     (98,454     (94,190     337,911             (336,025

Other income (expenses), net

     84,228       308,897       24,498       (18,243     (93     35,451       519,579       (417,623           536,694  

Interest in earnings of associates

     —         (176,616     —         —         (24     7,730       946,926       176,616       (944,943     9,689  

Interest in earnings of joint ventures

     1,176       —         —         —         —         —         148,185       (1,176           148,185  

Financial results

     (193,499     (10,294     (149,948     (26,682     (50,654     (300,110     (110,777     353,741       —         (488,223

Finance expense

     (325,151     (84,097     (24,013     (101,154     (3,513     (460,225     (277,552     433,261       —         (842,444

Finance Income

     111,257       77,202       7,578       74,532       (1,080     62,353       76,212       (196,037     —         212,017  

Foreign exchange losses, net

     (152,702     (731,011     (216,273     (50,555     (59,852     (440,280     (388,348     1,099,986       —         (939,035

Derivatives

     173,097       727,612       82,760       50,495       13,791       538,042       478,911       (983,469     —         1,081,239  

Income tax (expense) benefit

     1,698       (219,363     21,879       (202,395     (1,872     (94,103     (89,125     195,786       —         (387,495
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Profit (loss) from continuing operations

     47,473       298,899       (176,616     419,235       (8,742     365,418       1,317,590       (169,756     (944,943     1,148,558  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to:

                    

Owners of the Parent

     19,204       284,019       (176,616     415,475       (9,604     100,812       1,290,812         (1,236,709     560,786  

Non-controlling interests

     28,269       14,880       —         3,760       862       264,606       26,778       (126,607     291,766       587,772  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     47,473       298,899       (176,616     419,235       (8,742     365,418       1,317,590       (169,756     (944,943     1,148,558  

Other select data:

                    

Depreciation and amortization

     584,381       32,372       119,623       112,808       36,233       442,857       558,776       (736,376     —         1,150,674  

EBITDA

     823,655       560,928       71,076       761,120       80,017       1,202,488       2,076,268       (1,455,659     (944,943     3,174,950  

Additions to PP&E, intangible and contracts assets

     538,385       108,152       109,705       207,814       9,042       396,670       624,446       (756,242     —         1,237,972  

Reconciliation of EBITDA:

                    

Profit (loss) for the period

     47,473       298,899       (176,616     419,235       (8,742     365,418       1,317,590       (169,756     (944,943  

Income tax and social contribution

     (1,698     219,363       (21,879     202,395       1,872       94,103       89,125       (195,786     —         1,148,558  

Financial results, net

     193,499       10,294       149,948       26,682       50,654       300,110       110,777       (353,741     —         488,223  

Depreciation and amortization

     584,381       32,372       119,623       112,808       36,233       442,857       558,776       (736,376     —         1,150,674  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

     823,655       560,928       71,076       761,120       80,017       1,202,488       2,076,268       (1,455,659     (944,943     3,174,950  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(i)

Domestic markets: sales within the countries where each entity is located; external markets: sales export.

 

F-19


Table of Contents

Cosan Limited

Notes to the interim consolidated financial statements

(In thousands of Brazilian Reais – R$)

 

 

     January 1, 2019 to September 30, 2019  
     Reported segments     Reconciliation     Consolidated  
     Raízen
Energia
    Raízen Combustíveis     Comgás     Moove     Logistics     Cosan
Corporate
    Deconsolidated
effects
    Segment
elimination
 
    Brazil     Argentina  

Statement of profit or loss:

                    

Gross sales

     22,081,963       67,407,406       13,353,554       8,834,886       3,908,540       5,706,374       343       (102,842,923     (23,562     18,426,581  

Domestic market (i)

     16,874,907       67,407,406       13,353,554       8,834,886       3,770,171       5,706,374       343       (97,635,867     (23,562     18,288,212  

External market (i)

     5,207,056       —         —               138,369             —         (5,207,056     —         138,369  

Net sales

     20,902,814       64,320,662       9,495,561       6,984,381       3,139,549       5,423,550       341       (94,719,037     (23,562     15,524,259  

Cost of sales

     (19,504,145     (61,683,213     (8,733,206     (4,715,989     (2,486,495     (3,532,491     (66     89,920,564       23,562       (10,711,479

Gross profit

     1,398,669       2,637,449       762,356       2,268,392       653,054       1,891,059       275       (4,798,474     —         4,812,780  

Selling expenses

     (617,519     (1,110,162     (503,288     (455,855     (369,250     (2,222     (5,248     2,230,969       —         (832,575

General and administrative expenses

     (447,699     (382,421     (98,225     (271,366     (122,482     (270,064     (213,295     928,345       —         (877,207

Other income (expenses), net

     132,681       686,761       73,329       2,676       (24     8,435       523,923       (892,771     —         535,010  

Interest in earnings of associates

     —         (14,630     —         —         928       16,305       1,967,092       14,630       (1,994,348     (10,023

Interest in earnings of joint ventures

     (3,082     —         —         —         —         —         510,428       3,082       —         510,428  

Financial results

     (592,500     (82,994     (273,981     (116,056     (40,723     (883,170     (286,654     949,475       —         (1,326,603

Finance expense

     (1,085,403     (556,271     (55,918     (300,611     (30,009     (1,520,252     (921,745     1,697,592       —         (2,772,617

Finance Income

     358,936       228,855       19,957       184,646       17,076       149,582       179,583       (607,748     —         530,887  

Foreign exchange losses, net

     (98,946     (545,050     (287,665     (44,638     (48,419     (380,925     (357,940     931,661       —         (831,922

Derivatives

     232,913       789,472       49,645       44,547       20,629       868,425       813,448       (1,072,030     —         1,747,049  

Income tax (expense) benefit

     65,527       (539,311     25,180       (482,200     (34,803     (183,534     (25,623     448,604       —         (726,160
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Profit (loss) from continuing operations

     (63,923     1,194,692       (14,629     945,591       86,700       576,809       2,470,898       (1,116,140     (1,994,348     2,085,650  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to:

                    

Owners of the Parent

     (106,607     1,144,644       (14,629     911,202       84,244       158,542       2,420,939       (1,023,408     (2,615,524     959,403  

Non-controlling interests

     42,684       50,048       —         34,389       2,456       418,267       49,959       (92,732     621,176       1,126,247  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     (63,923     1,194,692       (14,629     945,591       86,700       576,809       2,470,898       (1,116,140     (1,994,348     2,085,650  

Other select data:

                    

Depreciation and amortization

     1,816,107       266,221       222,153       343,414       77,311       1,282,291       10,462       (2,304,481     —         1,713,478  

EBITDA

     2,279,157       2,083,218       456,325       1,887,261       239,537       2,925,804       2,793,637       (4,818,700     (1,994,348     5,851,891  

Additions to PP&E, intangible and Contracts assets

     2,246,140       265,263       255,542       528,201       18,443       1,378,007       7,183       (2,766,945     —         1,931,834  

Reconciliation of EBITDA:

                    

Profit (loss) for the period

     (63,923     1,194,692       (14,629     945,591       86,700       576,809       2,470,898       (1,116,140     (1,994,348     2,085,650  

Income tax and social contribution

     (65,527     539,311       (25,180     482,200       34,803       183,534       25,623       (448,604     —         726,160  

Financial results, net

     592,500       82,994       273,981       116,056       40,723       883,170       286,654       (949,475     —         1,326,603  

Depreciation and amortization

     1,816,107       266,221       222,153       343,414       77,311       1,282,291       10,462       (2,304,481     —         1,713,478  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

     2,279,157       2,083,218       456,325       1,887,261       239,537       2,925,804       2,793,637       (4,818,700     (1,994,348     5,851,891  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

F-20


Table of Contents

Cosan Limited

Notes to the interim consolidated financial statements

(In thousands of Brazilian Reais – R$)

 

 

     July 1, 2018 to September 30, 2018  
     Reported segments     Reconciliation        
     Raízen
Energia
    Raízen
Combustíveis
    Comgás     Moove     Logistics     Cosan
Corporate
    Deconsolidated
effects
    Segment
eliminations
    Consolidated  

Statement of profit or loss:

                  

Gross sales

     4,335,714       20,505,098       2,059,872       1,078,758       1,764,201       31       (24,840,812     —         4,902,862  

Domestic market (i)

     4,409,458       21,053,118       1,900,984       989,144       1,798,315       407       (25,462,576     (11,602     4,677,248  

External market (i)

     1,042,598       —         —         22,373       78,796       —         (1,042,598     —         101,169  

Net sales

     5,452,056       21,053,118       1,900,984       1,011,517       1,877,111       407       (26,505,174     (11,602     4,778,417  

Cost of sales

     (5,099,524     (20,183,792     (1,377,288     (839,097     (1,198,845     (2,571     25,283,316       11,602       (3,406,199

Gross profit

     352,532       869,326       523,696       172,420       678,266       (2,164     (1,221,858     —         1,372,218  

Selling expenses

     (255,646     (319,826     (155,308     (97,683     (1,980     (215     575,472       —         (255,186

General and administrative expenses

     (171,376     (117,278     (89,259     (33,001     (77,680     (42,615     288,654       —         (242,555

Other income (expense), net

     (9,478     84,858       (7,816     (110     (4,500     (32,280     (75,380     —         (44,706

Financial results

     (114,658     (181,008     (55,430     (10,629     (257,452     (200,153     295,666       —         (523,664

Finance expense

     (298,060     (213,760     (151,674     (9,611     (429,617     (337,015     511,820       1,925       (925,992

Finance income

     143,662       50,188       96,284       222       54,856       30,540       (193,850     (1,925     179,977  

Foreign exchange losses, net

     (44,948     (188,678     (30,811     (11,677     (187,044     (179,118     233,626       —         (408,650

Derivatives

     84,688       171,242       30,771       10,437       304,353       285,440       (255,930     —         631,001  

Interest in earnings of associates

     (7,366     2       —         (3,946     3,254       224,770       7,364       (222,688     1,390  

Interest in earnings of joint ventures

     —         —         —         —         —         84,089       —         —         84,089  

Income tax expense benefit

     106,712       (48,220     (48,508     (8,350     (111,781     64,972       (58,492     —         (103,667
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Profit (loss) from continuing operations

     (99,280     287,854       167,375       18,701       228,127       96,404       (188,574     (222,688     287,919  

Total net income attributable to:

                  

Owners of the Company

     (107,154     275,338       134,098       18,320       63,817       96,127       (168,184     (249,365     62,997  

Non-controlling interests

     7,874       12,516       33,277       381       164,310       277       (20,390     26,677       224,922  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     (99,280     287,854       167,375       18,701       228,127       96,404       (188,574     (222,688     287,919  

Other selected data:

                  

Depreciation and amortization

     620,004       45,222       116,293       22,095       354,659       2,863       (665,226     —         495,910  

EBITDA

     528,670       562,304       387,606       59,775       952,019       234,448       (1,090,974     (222,688     1,411,160  

Additions to PP&E, intangible and biological assets

     462,612       53,794       130,398       11,121       536,516       1,963       (516,406     —         679,998  

Reconciliation of EBITDA:

                  

Profit (loss) for the period

     (99,280     287,854       167,375       18,701       228,127       96,404       (188,574     (222,688     287,919  

Income tax and social contribution

     (106,712     48,220       48,508       8,350       111,781       (64,972     58,492       —         103,667  

Financial result, net

     114,658       181,008       55,430       10,629       257,452       200,153       (295,666     —         523,664  

Depreciation and amortization

     620,004       45,222       116,293       22,095       354,659       2,863       (665,226     —         495,910  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

     528,670       562,304       387,606       59,775       952,019       234,448       (1,090,974     (222,688     1,411,160  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

F-21


Table of Contents

Cosan Limited

Notes to the interim consolidated financial statements

(In thousands of Brazilian Reais – R$)

 

 

 

     January 1, 2018 to September 30, 2018  
     Reported segments     Reconciliation        
     Raízen
Energia
    Raízen
Combustíveis
    Comgás     Moove     Logistic     Cosan
Corporate
    Deconsolidated
effects
    Segment
eliminations
    Consolidated  

Statement of profit or loss:

                  

Gross sales

     9,233,103       40,871,892       3,910,209       2,006,970       3,246,798       492       (50,104,995     (8     9,164,461  

Domestic market (i)

     9,952,512       60,142,694       4,924,663       2,526,111       4,723,204       836       (70,095,206     (30,265     12,144,549  

External market (i)

     4,104,036       —         —         36,651       215,136       —         (4,104,036     —         251,787  

Net sales

     14,056,548       60,142,694       4,924,663       2,562,762       4,938,340       836       (74,199,242     30,265       12,456,866  

Cost of sales

     (12,834,904     (57,530,450     (3,460,087     (2,083,659     (3,315,983     (2,712     70,365,354       (30,265     (8,892,706

Gross profit

     1,221,644       2,612,244       1,464,576       479,103       1,622,357       (1,876     (3,833,888     —         3,564,160  

Selling expenses

     (595,692     (1,004,754     (461,864     (277,494     (8,215     (214     1,600,446       —         (747,787

General and administrative expenses

     (500,750     (367,610     (247,855     (92,436     (215,476     (136,493     868,360       —         (692,260

Other income (expense), net

     149,814       281,650       (12,133     (4,205     (13,039     (58,849     (431,464     —         (88,226

Financial results

     (266,600     (513,450     (142,985     (14,327     (1,065,843     (565,022     780,050       —         (1,788,177

Finance expense

     (743,830     (249,470     (383,558     (26,901     (1,070,437     (462,597     993,300       5,200       (1,938,293

Finance income

     453,730       148,812       239,017       5,494       181,741       106,016       (602,542     (5,200     527,068  

Foreign exchange losses, net

     (180,070     (1,042,830     (118,637     (30,968     (820,184     (906,597     1,222,900       —         (1,876,386

Derivatives

     203,570       630,038       120,193       38,048       643,037       698,156       (833,608     —         1,499,434  

Interest in earnings of associates

     (12,924     2       —         230       8,419       608,297       12,922       (599,918     17,028  

Interest in earnings of joint ventures

     —         —         —         —         —         432,202       —         —         432,202  

Income tax expense benefit

     116,368       (213,378     (179,497     (24,672     (192,808     210,576       97,010       —         (186,401
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Profit (loss) from continuing operations

     111,860       794,704       420,242       66,199       135,395       488,621       (906,564     (599,918     510,539  

Total net income attributable to:

                  

Owners of the Company

     103,992       761,792       336,228       65,662       36,916       483,625       (865,784     (730,448     191,983  

Non-controlling interests

     7,868       32,912       84,014       537       98,479       4,996       (40,780     130,530       318,556  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     111,860       794,704       420,242       66,199       135,395       488,621       (906,564     (599,918     510,539  

Other selected data:

                  

Depreciation and amortization

     1,661,696       146,012       350,064       71,426       1,051,716       10,654       (1,807,708     —         1,483,860  

EBITDA

     1,923,788       1,667,544       1,092,788       176,624       2,445,762       853,721       (3,591,332     (599,918     3,968,977  

Additions to PP&E, intangible and biological assets

     1,959,288       522,242       382,025       32,455       1,576,380       2,575       (2,481,530     —         1,993,435  

Reconciliation of EBITDA:

                  

Profit (loss) for the period

     111,860       794,704       420,242       66,199       135,395       488,621       (906,564     (599,918     510,539  

Income tax and social contribution

     (116,368     213,378       179,497       24,672       192,808       (210,576     (97,010     —         186,401  

Financial result, net

     266,600       513,450       142,985       14,327       1,065,843       565,022       (780,050     —         1,788,177  

Depreciation and amortization

     1,661,696       146,012       350,064       71,426       1,051,716       10,654       (1,807,708     —         1,483,860  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

     1,923,788       1,667,544       1,092,788       176,624       2,445,762       853,721       (3,591,332     (599,918     3,968,977  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

F-22


Table of Contents

Cosan Limited

Notes to the interim consolidated financial statements

(In thousands of Brazilian Reais – R$)

 

 

     September 30, 2019  
     Reported segments     Reconciliation     Consolidated  
     Raízen
Energia
    Raízen Combustíveis     Comgás     Moove     Logístics     Cosan
Corporate
    Deconsolidated
effects
    Segment
elimination
 
    Brazil     Argentina  

Statement of financial position:

                    

Cash and cash equivalents

     2,981,098       1,578,192       356,619       1,715,479       721,908       1,395,258       2,580,426       (4,915,909     —         6,413,071  

Marketable securities

     —         —         —         960,282       21,671       1,182,819       188,661       —         —         2,353,433  

Trade receivables

     1,284,181       2,362,580       465,681       1,057,419       540,949       456,679       (509     (4,112,442     —         2,054,538  

Derivative financial instruments

     2,164,002       1,228,406       66,180       409,320       40,735       1,816,462       2,065,552       (3,458,588     —         4,332,069  

Inventories

     4,181,824       2,630,733       1,134,503       60,527       448,504       284,752       12,469       (7,947,060     —         806,252  

Other financial assets

     436,510       —         —         —         —         —         473,203       (436,510     —         473,203  

Other current assets

     5,519,765       4,340,858       940,521       340,648       207,265       507,589       868,103       (10,801,144     (336,726     1,586,879  

Other non-current assets

     3,980,252       3,921,578       51,489       497,258       883,388       2,754,186       1,678,667       (7,953,319     (1,146,992     4,666,507  

Investments in associates

     —         2,561,390       —         —         15,472       46,939       15,529,262       (2,561,390     (15,207,913     383,760  

Investments in joint ventures

     587,103       18,160       285       —         —         —         7,558,291       (605,548     —         7,558,291  

Biological assets

     725,238       —         —         —         —         —         -       (725,238     —         -  

Property, plant and equipment

     11,231,888       2,601,216       3,457,729       —         305,319       11,460,789       161,664       (17,290,833     —         11,927,772  

Intangible assets and goodwill

     3,616,953       2,551,564       9,171       8,305,977       1,165,985       7,397,306       11,168       (6,177,688     —         16,880,436  

Right-of-use assets

     4,153,996       108,822       483,462       10,836       23,417       4,424,283       32,040       (4,746,280     —         4,490,576  

Loans, borrowings and debentures

     (13,569,042     (5,914,569     (1,049,303     (3,433,200     (788,159     (10,899,495     (11,887,104     20,532,914       —         (27,007,958

Derivative financial instruments

     (1,476,243     (110,266     —         —         (77     —         (55,909     1,586,509       —         (55,986

Trade payables

     (5,007,701     (2,368,464     (1,246,012     (1,177,151     (580,297     (434,644     (5,781     8,622,177       —         (2,197,873

Employee benefits payable

     (414,310     (71,051     (41,863     (59,500     (63,985     (246,891     (23,482     527,224       —         (393,858

Preferred shareholders payable in subsidiaries

     —         —         —         —         —         —         (744,455     —         —         (744,455

Lease

     (3,453,326     —         —         (11,444     (41,707     (4,539,141     (32,818     3,453,326       —         (4,625,110

Other current liabilities

     (4,441,350     (6,394,349     (367,577     (623,249     (548,192     (672,691     (573,091     11,203,276       391,222       (2,026,001

Other non-current liabilities

     (1,997,278     (4,039,525     (1,699,210     (1,943,262     (651,488     (6,522,449     (2,250,609     7,736,013       1,092,496       (10,275,312
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total assets (net of liabilities) allocated by segment

     10,503,560       5,005,275       2,561,675       6,109,940       1,700,708       8,411,751       15,585,748       (18,070,510     (15,207,913     16,600,234  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

     40,862,810       23,903,499       6,965,640       13,357,746       4,374,613       31,727,062       31,158,997       (71,731,949     (16,691,631     63,926,787  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Shareholders’ equity attributable to:

                    

Equity attributable to owners of the Company

     10,433,445       4,748,137       2,561,675       6,057,906       1,226,733       1,705,730       15,578,304       (17,743,257     (19,076,879     5,491,794  

Non-controlling interests

     70,115       257,138       —         52,034       473,975       6,706,021       7,444       (327,253     3,868,966       11,108,440  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total shareholders’ equity

     10,503,560       5,005,275       2,561,675       6,109,940       1,700,708       8,411,751       15,585,748       (18,070,510     (15,207,913     16,600,234  

 

F-23


Table of Contents

Cosan Limited

Notes to the interim consolidated financial statements

(In thousands of Brazilian Reais – R$)

 

 

     December 31, 2018  
     Reported segments     Reconciliation        
     Raízen
Energia
    Raízen Combustíveis     Comgás     Moove     Logistics     Cosan
Corporate
    Deconsolidated
effects
    Segment
elimination
    Consolidated  
    Brazil     Argentina  

Statement of financial position:

                    

Cash and cash equivalents

     2,437,571       864,105       490,960       602,618       206,702       143,710       2,668,768       (3,792,636     —         3,621,798  

Marketable securities

     —         —         —         1,124,723       13,033       2,843,435       221,644       —         —         4,202,835  

Trade receivables

     1,061,297       2,747,503       372,202       695,147       446,645       438,062       8,338       (4,181,002     —         1,588,192  

Derivative financial instruments

     1,956,616       639,976       —         368,928       29,976       892,461       1,257,492       (2,596,592     —         2,548,857  

Inventories

     3,618,573       2,078,003       1,284,087       65,259       385,901       263,386       1,744       (6,980,663     —         716,290  

Other financial assets

     516,519       —         —         —         —         —         —         (516,519     —         —    

Other current assets

     3,203,838       3,045,745       1,122,633       641,042       161,076       413,267       1,016,569       (7,372,216     (540,745     1,691,209  

Other non-current assets

     4,141,547       3,508,485       66,117       282,572       750,088       2,693,158       1,536,566       (7,716,149     (1,117,633     4,144,751  

Investments in associates

     —         (266     266       —         13,799       44,001       13,111,569       —         (12,790,850     378,519  

Investments in joint ventures

     567,785       266       —         —         —         —         8,077,907       (568,051     —         8,077,907  

Biological assets

     740,473       —         —         —         —         —         —         (740,473     —         —    

Property, plant and equipment

     10,912,819       2,292,355       3,182,272       —         321,746       11,916,818       179,258       (16,387,446     —         12,417,822  

Intangible assets and goodwill

     3,626,819       2,513,923       8,591       8,279,593       1,191,627       7,493,882       7,434       (6,149,333     —         16,972,536  

Loans, borrowings and debentures

     (12,702,418     (4,665,127     (971,268     (3,651,545     (759,169     (10,594,381     (7,569,218     18,338,813       —         (22,574,313

Derivative financial instruments

     (1,223,260     (31,469     —         —         (3,880     —         (21,834     1,254,729       —         (25,714

Trade payables

     (3,090,299     (1,603,481     (1,003,917     (1,012,895     (452,300     (451,637     (7,088     5,697,697       —         (1,923,920

Employee benefits payable

     (343,670     (73,481     (36,829     (63,520     (37,850     (207,397     (31,201     453,980       —         (339,968

Preferred shareholders payable in subsidiaries

     —         —         —         —         —         —         (1,097,490     —         —         (1,097,490

Lease

     —         —         —         —         —         (553,350     —         —         —         (553,350

Other current liabilities

     (2,448,741     (4,520,490     (624,633     (159,060     (499,759     (770,695     (849,832     7,593,864       542,092       (1,737,254

Other non-current liabilities

     (1,305,251     (5,028,754     (834,456     (2,009,997     (794,110     (6,263,836     (2,187,599     7,168,461       1,116,191       (10,139,351
  

 

 

   

 

 

     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total assets (net of liabilities) allocated by segment

     11,670,218       1,767,293       3,056,025       5,162,865       973,525       8,300,884       16,323,027       (16,493,536     (12,790,945     17,969,356  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

     32,783,857       17,690,095       6,527,128       12,059,882       3,520,593       27,142,180       28,087,289       (57,001,080     (14,449,228     56,360,716  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Equity attributable to owners of the Company

     11,632,885       1,533,603       3,056,025       4,175,508       966,465       1,661,512       16,322,616       (16,222,513     (16,511,698     6,614,403  

Non-controlling interests

     37,333       233,690       —         987,357       7,060       6,639,372       411       (271,023     3,720,753       11,354,953  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total shareholders’ equity

     11,670,218       1,767,293       3,056,025       5,162,865       973,525       8,300,884       16,323,027       (16,493,536     (12,790,945     17,969,356  

 

F-24


Table of Contents

Cosan Limited

Notes to the interim consolidated financial statements

(In thousands of Brazilian Reais – R$)

 

 

4.1

Net sales by segment

 

     July 1,
2019 to
September 30,
2019
    January 1,
2019 to
September 30,
2019
    July 1,
2018 to
September 30,
2018
    January 1,
2018 to
September 30,
2018
 

Reported segment

        

Raízen Energia

        

Ethanol

     3,031,393       7,894,039       2,055,707       6,103,725  

Sugar

     593,659       2,926,573       1,022,944       3,102,638  

Gas

     1,056,161       2,411,100       94,335       491,126  

Diesel

     1,825,320       4,761,504       1,042,233       2,164,923  

Cogeneration

     1,151,721       2,798,869       1,181,989       1,594,923  

Other

     40,431       110,729       54,848       599,213  
  

 

 

   

 

 

   

 

 

   

 

 

 
     7,698,685       20,902,814       5,452,056       14,056,548  

Raízen Combustíveis

        

Fuels

     25,122,039       72,637,253       21,053,118       60,142,694  

Other

     421,923       1,178,970       —         —    
  

 

 

   

 

 

   

 

 

   

 

 

 
     25,543,962       73,816,223       21,053,118       60,142,694  

Comgás

        

Industrial

     1,594,044       4,494,613       1,219,122       3,178,540  

Residential

     432,476       951,429       291,761       720,787  

Cogeneration

     109,951       324,071       88,486       219,012  

Automotive

     90,483       258,433       67,473       185,625  

Commercial

     140,068       369,576       106,339       278,624  

Construction revenue

     199,730       541,780       106,781       292,451  

Other

     18,778       44,479       21,022       49,624  
  

 

 

   

 

 

   

 

 

   

 

 

 
     2,585,530       6,984,381       1,900,984       4,924,663  

Moove

        

Finished goods

     710,206       2,230,010       918,263       2,302,374  

Basic oil

     55,747       144,238       86,245       236,311  

Services

     334,773       765,301       7,009       24,077  
  

 

 

   

 

 

   

 

 

   

 

 

 
     1,100,726       3,139,549       1,011,517       2,562,762  

Logistics

        

North operations

     1,546,367       4,070,329       1,405,529       3,669,554  

South operations

     433,961       1,134,194       400,301       1,077,646  

Container operations

     79,536       219,027       71,281       191,140  
  

 

 

   

 

 

   

 

 

   

 

 

 
     2,059,864       5,423,550       1,877,111       4,938,340  

Reconciliation

        

Cosan Corporate

     26       341       408       838  
  

 

 

   

 

 

   

 

 

   

 

 

 

Deconsolidated effects and eliminations

     (33,257,605     (94,742,599     (26,516,776     (74,229,507
  

 

 

   

 

 

   

 

 

   

 

 

 

Total

     5,731,188       15,524,259       4,778,418       12,396,338  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

F-25


Table of Contents

Cosan Limited

Notes to the interim consolidated financial statements

(In thousands of Brazilian Reais – R$)

 

 

5

Financial assets and liabilities

The carrying amount of financial assets and financial liabilities are as follows:

 

     Note      September 30,
2019
     December 31,
2018
 

Assets

        

Fair value through profit or loss

        

Cash and cash equivalents

     5.1        2,016,645        1,600,590  

Marketable securities

     5.2        2,353,433        4,202,835  

Other financial assets

     5.9        473,203        —    

Derivate financial instruments

     5.8        4,332,069        2,548,857  
     

 

 

    

 

 

 
        9,175,350        8,352,282  

Amortized cost

        

Cash and cash equivalents

     5.1        4,396,426        2,021,208  

Trade receivables

     5.3        2,054,538        1,588,192  

Restricted cash

     5.2        155,417        115,124  

Receivables from related parties

     5.4        250,226        135,070  

Dividends receivable

        34,339        27,320  
     

 

 

    

 

 

 
        6,890,946        3,886,914  
     

 

 

    

 

 

 

Total

        16,066,296        12,239,196  
     

 

 

    

 

 

 
        
     Note      September 30,
2019
     December 31,
2018
 

Liabilities

        

Amortized cost

        

Loans, borrowings and debentures

     5.5        13,468,853        10,005,187  

Leases

     5.6        4,625,110        553,350  

Trade payables

     5.7        2,197,873        1,923,920  

Other financial liabilities

        445,612        455,702  

Payables to related parties

     5.4        416,805        355,971  

Dividends payable

        21,015        187,415  

Tax installments—REFIS

     12        225,085        216,984  

Preferred shareholders payable in subsidiaries

        744,455        1,097,490  
     

 

 

    

 

 

 
        22,144,808        14,796,019  

Fair value through profit or loss

        

Loans, borrowings and debentures

     5.5        13,539,105        12,569,126  

Contingent consideration payable

     5.9        77,400        64,969  

Derivative financial instruments

     5.8        55,986        25,714  
     

 

 

    

 

 

 
        13,672,491        12,659,809  
     

 

 

    

 

 

 
        35,817,299        27,455,828  
     

 

 

    

 

 

 

 

F-26


Table of Contents

Cosan Limited

Notes to the interim consolidated financial statements

(In thousands of Brazilian Reais – R$)

 

 

5.1

Cash and cash equivalents

 

     September 30,
2019
     December 31,
2018
 

Cash and bank accounts (i)

     1,413,334        111,410  

Savings account

     1,221,214        1,335,774  

Financial investments

     3,778,523        2,174,614  
  

 

 

    

 

 

 
     6,413,071        3,621,798  
  

 

 

    

 

 

 

Financial investments are composed as follows:

 

     September 30,
2019
     December 31,
2018
 

Investment fund

     

Repurchase agreements

     1,645,347        1,179,503  

Bank certificate of deposits—CDB

     371,298        421,087  
  

 

 

    

 

 

 
     2,016,645        1,600,590  
  

 

 

    

 

 

 

Bank investments

     

Repurchase agreements

     1,321,506        —    

Bank certificate of deposits—CDB

     403,951        571,840  

Other

     36,421        2,184  
  

 

 

    

 

 

 
     1,761,878        574,024  
  

 

 

    

 

 

 
     3,778,523        2,174,614  
  

 

 

    

 

 

 

The Company’s onshore financial investments are remunerated at rates around 100% of the interbank deposit certificate (“CDI”) in September 30, 2019 (100% of CDI in December 31, 2018) and offshore financial investments are remunerated at rates around 100% of Fed Funds. The sensitivity analysis on interest rate risks is in note 21.

 

5.2

Marketable securities and restricted cash

 

     September 30,
2019
     December 31,
2018
 

Marketable securities

     

Government security (i)

     2,039,364        4,144,797  

Bank certificate of deposit—CDB

     248,339        58,038  

Repurchase agreements

     65,730        —    
  

 

 

    

 

 

 
     2,353,433        4,202,835  
  

 

 

    

 

 

 

Restricted cash

     

Investments linked to loans

     81,312        31,254  

Securities pledged as collateral

     74,105        83,870  
  

 

 

    

 

 

 
     155,417        115,124  
  

 

 

    

 

 

 

 

(i)

Sovereign debt securities have stated interest connected to SELIC rate (Sistema Especial de Liquidação e de Custódia).

 

 

F-27


Table of Contents

Cosan Limited

Notes to the interim consolidated financial statements

(In thousands of Brazilian Reais – R$)

 

 

5.3

Trade receivables

 

     September 30,
2019
    December 31,
2018
 

Domestic – Brazilian Reais

     2,115,957       1,609,421  

Export – Foreign currency

     52,104       104,355  
  

 

 

   

 

 

 
     2,168,061       1,713,776  

Allowance for doubtful accounts

     (113,523     (125,584
  

 

 

   

 

 

 
     2,054,538       1,588,192  

Current

     2,024,831       1,545,643  
  

 

 

   

 

 

 

Non-current

     29,707       42,549  
  

 

 

   

 

 

 

 

5.4

Related parties

 

  a)

Receivables from and payables to related parties

 

     September 30,
2019
     December 31,
2018
 

Current Asset

     

Corporate operation / Agreements

     

Raízen Energia S.A. (i)

     45,912        38,205  

Aguassanta Participações S.A.

     332        29  

Raízen Combustíveis S.A. (i)

     10,824        6,263  

Other

     285        183  
  

 

 

    

 

 

 
     57,353        44,680  

Non-current assets

     

Preferred shares

     

Raízen Energia S.A. (i)

     158,157        37,470  

Raízen Combustíveis S.A.

     34,716        27,523  
  

 

 

    

 

 

 
     192,873        64,993  
  

 

 

    

 

 

 

Financial operations

     

Rezende Barbosa (ii)

     —          23,144  

Other

     —          2,253  
  

 

 

    

 

 

 
     —          25,397  
  

 

 

    

 

 

 
     192,873        90,390  
  

 

 

    

 

 

 

Current liabilities

     

Corporate operations / agreements

     

Raízen Energia S.A. (i)

     262,854        215,582  

Raízen Combustíveis S.A. (i)

     151,090        136,779  

Other

     2,861        3,610  
  

 

 

    

 

 

 
     416,805        355,971  
  

 

 

    

 

 

 

 

(i)

Current and non-current assets receivable from Raízen Energia and Raízen Combustíveis are, primarily, tax credits which will be reimbursed to the Company when realized. The preferred shares are used to Raízen reimburse Cosan, with preferential dividends, when the net operating loss is consumed in Raízen.

Current liabilities represent reimburse to Raízen Energia and Raízen Combustíveis related to expenses regarding legal disputes and other liabilities, generated before the formation of joint ventures, which are responsibility of Cosan S.A.

(ii)

On September 13, 2019, the subsidiary Cosan and Rezende Barbosa S.A. Administração e Participações (“Rezende Barbosa”) entered into a Private Instrument for Settlement and Termination of Contracts and Other Covenants in which the balance of receivables was settled through the delivery of 1,908,783 and 477,196 shares of Cosan S.A. and Cosan Logística S.A., respectively, to the Company that were blocked in custody with a Financial Institution. The equity instruments received in this instrument represent an increase in the Company’s interest of 0.48% and 0.10% in Cosan S.A. and Cosan Logística, respectively. Additionally, during the period in which the shares held in custody remained blocked, such shares were not entitled to any dividends received, pursuant to the agreement in effect at the time, and the amount of R$20,751 recorded as dividends payable to this shareholder was reversed against retained earnings in subsidiary Cosan S.A.

 

F-28


Table of Contents

Cosan Limited

Notes to the interim consolidated financial statements

(In thousands of Brazilian Reais – R$)

 

 

  b)

Related party transactions

 

     July 1,
2019 to
September 30,
2019
    January 1,
2019 to
September 30,
2019
    July 1,
2018 to
September 30,
2018
    January 1,
2018 to
September 30,
2018
 

Product sales

        

Raízen Energia S.A.

     63,028       245,990       96,945       271,232  

Raízen Combustíveis S.A

     61,279       167,188       56,364       135,727  
  

 

 

   

 

 

   

 

 

   

 

 

 
     124,307       413,178       153,309       406,959  

Purchase of goods / inputs

        

Raízen Energia S.A.

     (3,525     (5,926     (1,412     (1,599

Raízen Combustíveis S.A

     (338,840     (917,212     (326,878     (882,297

Other

     (789     (1,045     —         —    
  

 

 

   

 

 

   

 

 

   

 

 

 
     (343,154     (924,183     (328,290     (883,896

Shared income (expense)

        

Raízen Energia S.A.

     (18,185     (55,210     (18,162     (54,652
     (18,185     (55,210     (18,162     (54,652

Financial result

        

Usina Santa Luiza

     —         (41     (60     (180

Raízen Energia S.A.

     —         —         (349     4,184  

Raízen Combustíveis S.A

     1,556       4,316       1,510       1,510  

Other

     149       18       (19     —    
  

 

 

   

 

 

   

 

 

   

 

 

 
     1,705       4,293       1,082       5,514  

 

  c)

Officers’ and directors’ compensation

The Company has a compensation policy approved by the Board of Directors. Compensation of the Company’s key management personnel includes salaries, non-cash benefits and contributions to a post-employment defined benefit plan.

 

     Consolidated  
     July 1,
2019 to
September 30,
2019
     January 1,
2019 to
September 30,
2019
     July 1,
2018 to
September 30,
2018
     January 1,
2018 to
September 30,
2018
 

Short-term benefits to officers and directors

     19,528        71,818        16,511        59,058  

Post-employment benefits

     44        520        217        678  

Other long-term benefits

     —          547        358        629  

Benefits from termination of employment contract

     —          1,193        —          —    

Share-based payment transactions

     2,263        10,021        16,380        22,562  
  

 

 

    

 

 

    

 

 

    

 

 

 
     21,835        84,099        33,466        82,927  

 

F-29


Table of Contents

Cosan Limited

Notes to the interim consolidated financial statements

(In thousands of Brazilian Reais – R$)

 

 

5.5

Loans, borrowings and debentures

 

     Interest                              

Description

   Index      Annual
interest rate
     September 30,
2019
     December 31,
2018
     Maturity      Objective  

With guarantee

                 

BNDES

     URTJLP        8.20%        2,350,724        2,584,347        Dec-29        Expansion project  
     Fixed        5.36%        886,921        1,055,281        Feb-25        Expansion project  
     TJ462        8.75%        187,897        316,854        Oct-20        Investment  
     Selic        7.30%        94,412        152,562        Oct-20        Investment  
     Selic        7.47%        55,084        63,852        Jun-23        Investment  
     TJLP        7.95%        89,068        107,731        Jun-23        Investment  
     TJLP        5.95%        1,786        —          Jun-23        Investment  
     Selic        13.65%        1,894        3,930        Sep-20        Expansion project  
     Fixed        4.28%        2,645        2,261        Jan-24        Expansion project  
     IPCA        11.45%        2,404        2,211        Nov-21        Expansion project  

Export credit agreemenmt (ECA)

     Euribor + 0.58%        0.58%        71,252        —          Sep-26        Investment  

EIB

     U.S.$        3.88%        65,625        89,003        Jun-20        Investment  
     U.S.$        2.94%        30,699        54,508        Sep-20        Investment  
     U.S.$ + LIBOR        3.10%        99,803        115,581        May-21        Investment  
     U.S.$ + LIBOR        2.66%        92,163        130,402        Sep-21        Investment  

FINEP

     Fixed        5.00%        93,464        93,309        Nov-22        Investment  
        

 

 

    

 

 

       
           4,125,841        4,771,832        
        

 

 

    

 

 

       

Without guarantee

                 

Foreign loans

     GBP + Libor        4.37%        367,045        363,250        Dec-22        Aquisition  
     GBP + Libor        2.30%        221,818        199,794        Nov-20        Aquisition  
     126% of CDI        8.13%        —          514,817        Dec-23        Exportation  
     CDI + 0.80%        6.24%        504,629        —          Dec-23        Exportation  
     125% of CDI        8.06%        —          646,024        Dec-23        Exportation  

Perpetual Notes

     U.S.$        8.25%        2,108,444        1,961,819        Nov-40        Aquisition  

Resolution 4131

     U.S.$        4.79%        32,433        39,738        Oct-20        Working capital  
     U.S.$ + Libor        3.28%        167,055        156,387        Feb-20        Working capital  
     U.S.$        3.67%        330,355        292,172        May-23        Working capital  
     U.S.$        4.34%        41,992        41,033        Dec-20        Working capital  
     U.S.$        2.92%        224,825        209,987        Nov-22        Working capital  

Senior Notes Due 2023

     U.S.$        5.00%        451,959        409,590        Mar-23        Aquisition  

Senior Notes Due 2027

     U.S.$        7.00%        3,351,226        2,977,721        Jan-27        Aquisition  

Senior Notes Due 2024

     U.S.$        7.38%        3,413,079        3,061,566        Feb-24        Aquisition  

Senior Notes Due 2024

     U.S.$        5.95%        940,813        2,022,793        Sep-24        Aquisition  

Senior Notes Due 2025

     U.S.$        5.88%        2,246,648        1,997,394        Jan-25        Aquisition  

Senior Notes Due 2029

     Fixed        5.50%        3,129,364        —          Sep-29        Aquisition  

Commercial banks

     Fixed U.S.$        0.00%        —          15,499        Jun-20        Working capital  

Working capital

     120.25% of CDI        6.53%        32,566        30,828        Aug-20        Working capital  
     124.60% of CDI        6.77%        15,126        —          Feb-20        Working capital  
     125% of CDI        6.79%        5,117        5,018        Dec-19        Working capital  
     122% of CDI        7.86%        —          15,402        Apr-20        Working capital  

Bank overdrafts

     125.5% of CDI        6.82%        8,783        —          Aug-20        Working capital  

Prepayment

     U.S.$+Libor        3.64%        4,196        11,706        Apr-20        Working capital  

Debentures

     IGPM + 6,10%        11.59%        239,842        228,010        May-28        Working capital  
     IPCA + 5.57%        9.22%        103,909        203,613        Sep-20        Working capital  
     IPCA + 7.14%        10.85%        331,521        305,894        Dec-20        Working capital  
     IPCA + 7.48%        11.20%        298,760        275,014        Dec-22        Working capital  
     IPCA + 7.36%        11.07%        98,398        90,656        Dec-25        Working capital  
     IPCA + 5.87%        9.53%        873,137        767,638        Dec-23        Working capital  
     IPCA + 4.33%        7.94%        440,742        414,583        Oct-24        Working capital  
     IPCA + 4.68%        8.30%        552,177        —          Feb-26        Working capital  
     IPCA + 4.50%        8.12%        642,150        —          Feb-29        Working capital  
     106 % of CDI        5.73%        1,704,008        —          Feb-21        Aquisition  
     128 % of CDI        8.26%        —          501,064        Dec-25        Working capital  
     CDI + 0.90%        0.00%        —          43,471        Sep-19        Working capital  
        

 

 

    

 

 

       
           22,882,117        17,802,481        
        

 

 

    

 

 

       

Total

           27,007,958        22,574,313        
        

 

 

    

 

 

       

Current

           3,378,585        2,115,305        
        

 

 

    

 

 

       

Non-current

           23,629,373        20,459,008        
        

 

 

    

 

 

       

 

F-30


Table of Contents

Cosan Limited

Notes to the interim consolidated financial statements

(In thousands of Brazilian Reais – R$)

 

 

Non-current borrowings are scheduled to fall due as follows:

 

     September 30,
2019
     December 31,
2018
 

13 to 24 months

     2,100,591        2,113,502  

25 to 36 months

     1,097,499        1,310,790  

37 to 48 months

     1,751,347        1,201,227  

49 to 60 months

     5,717,000        2,429,146  

61 to 72 months

     3,069,050        5,783,465  

73 to 84 months

     343,965        2,332,961  

85 to 96 months

     3,689,565        475,964  

Thereafter

     5,860,356        4,811,953  
  

 

 

    

 

 

 
     23,629,373        20,459,008  
  

 

 

    

 

 

 

The carrying amounts of loans, borrowings and debentures are denominated in the following currencies:

 

     September 30,
2019
     December 31,
2018
 

Reais (R$)

     9,617,162        8,424,373  

Dollar (U.S.$)

     16,730,681        13,586,897  

Pound (GBP)

     588,863        563,043  

Euro (€)

     71,252        —    
  

 

 

    

 

 

 
     27,007,958      22,574,313