Cosan 20-F/A 2015 FY Annual report (foreign) (amended)

Exhibit 13.3

Raízen Group

Combined consolidated financial statements as of

and for the year ended March 31, 2016

and independent auditors’ report

1

Raízen Group

Combined consolidated financial statements as of and

for the year ended March 31, 2016 and independent auditors’ report

Contents

Combined consolidated statement of financial position	6
Combined consolidated statement of income	8
Combined consolidated statement of comprehensive income	9
Combined consolidated statement of changes in equity	10
Combined consolidated statement of cash flows	13
Management’s explanatory notes to the combined consolidated financial statements	14

2

Independent auditors’ report

The Board of Directors and Shareholders

Raízen Energia S.A. and Raízen Combustiveis S.A.:

We have audited the accompanying combined consolidated statement of financial position of Raízen Energia S.A. and Raízen Combustiveis S.A. (“Raízen Group”) as of March 31, 2016 and the related combined consolidated statements of income, other comprehensive income, changes in equity, and cash flows for the year ended March 31, 2016. These combined consolidated financial statements are the responsibility of the Raízen Group’s management. Our responsibility is to express an opinion on these combined consolidated financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the combined consolidated financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Raízen Group’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. We believe that our audit provide a reasonable basis for our opinion.

In our opinion, the combined consolidated financial statements referred to above present fairly, in all material respects, the financial position of Raízen Group as of March 31, 2016, and the results of their operations and their cash flows for the year ended March 31, 2016 in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

We draw attention to Note 2.1 (a) to the combined consolidated financial statements, which describes the basis of preparation and presentation of these combined consolidated financial statements. These combined consolidated financial statements do not necessarily represent the financial position, financial performance, or related cash flows that would have been obtained if the Raízen Group had operated as a single legal entity during the period. The combined consolidated financial statements were prepared to present the financial position, performance, and cash flows of the entities under indirect joint control of Cosan Limited and Royal Dutch Shell and, therefore may not be useful for others purposes. Our conclusion is unqualified in respect to this matter.

KPMG Auditores Indepedentes

São Paulo, June 3, 2016

3

Independent Auditor’s Report

To the Board of Directors and Shareholders of Raízen Energia S.A. and Raízen Combustíveis S.A

We have audited the accompanying combined consolidated financial statements of Raízen Energia S.A. and Raízen Combustíveis S.A “Raízen Group”, which comprise the combined consolidated balance sheet as of March 31, 2015, and the related combined consolidated statements of income, comprehensive income, changes in shareholders’ equity and cash flows for the two years then ended.

Management’s Responsibility for the Combined Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the combined consolidated financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of combined consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on the combined consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the combined consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the combined consolidated financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the combined consolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation and fair presentation of the combined consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the combined consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

4

Raízen Energia S.A. and Raízen Combustíveis S.A (Raízen Group)

Opinion

In our opinion, the combined consolidated financial statements referred to above present fairly, in all material respects, the financial position of Raízen Group at March 31, 2015 and the results of their operations and their cash flows for the two years then ended, in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Emphasis – Combination of the Financial Statement

As discussed in Note 2.1 (a) to the combined consolidated financial statement, the business included in these combined consolidated financial statements does not operate as a single legal entity. Therefore, these combined consolidated financial statements do not necessarily represent the results that would have been obtained if these companies had operated as a single legal entity during the period, nor does it indicate any future results. Our opinion is not modified with respect to this matter.

Campinas, Brazil

June 22, 2015

/s/ PricewaterhouseCoopers

Auditores Independentes

5

RAÍZEN Group

Combined consolidated statement of financial position as of March 31

(In thousands of reais – R$)

	Note	2016		2015
Assets
Current assets
Cash and cash equivalents	3		4,372,631		4,028,230
Restricted cash	4		874,605		188,624
Derivative financial instruments	23		638,079		875,205
Trade accounts receivable	5		1,758,781		1,605,174
Inventories	6		1,677,331		1,433,947
Income and social contribution taxes recoverable	15.b		378,215		51,231
Recoverable taxes and contributions			428,959		325,138
Dividends receivable			20,014		—
Advances to suppliers			210,215		214,743
Other financial assets	7		10,028		12,931
Related parties	8		491,358		334,697
Assets held for sale	9.b		243,086		—
Other receivables			186,457		75,743
			11,289,759		9,145,663
Non-current assets
Trade accounts receivable	5		305,586		298,254
Derivative financial instruments	23		597,653		315,279
Other financial assets	7		1,445,442		968,420
Income and social contribution taxes recoverable	15.b		560,920		508,360
Recoverable taxes and contributions			306,854		348,652
Related parties	8		713,635		916,066
Advances to suppliers			34,820		55,172
Deferred income and social contribution tax	15.d		233,018		326,178
Judicial deposits	16		293,465		276,795
Other receivables			84,659		54,540
Investments	9		210,425		469,563
Biological assets	10		2,463,488		1,959,859
Property, plant and equipment	11		9,411,748		9,496,877
Intangible assets	12		3,992,791		3,854,445
			20,654,504		19,848,460
Total assets			31,944,263		28,994,123

The notes are an integral part of these combined consolidated financial information.

6

RAÍZEN Group

Combined consolidated statement of financial position as of March 31

(In thousands of reais – R$)                                                                                                                                   (continued)

	Note	2016			2015
Liabilities
Current liabilities
Loans and financing	14		1,639,509			1,386,583
Derivative financial instruments	23		579,278			243,997
Suppliers	13		1,665,971			1,329,591
Salaries and wages payable			494,543			424,674
Income and social contribution taxes payable	15.c		116,943			21,733
Taxes payable			228,523			184,719
Dividends and interest on own capital payable	18.c		284,794			135,023
Related parties	8		860,980			262,269
Advances from clients			105,912			132,138
Other liabilities			480,622			349,179
			6,457,075			4,469,906
Non-current liabilities
Loans and financing	14		11,213,217			10,532,010
Derivative financial instruments	23		325,944			56,231
Taxes payable			11,437			175,097
Related parties	8		1,240,405			932,431
Provision for legal disputes	16		761,616			775,031
Deferred income and social contribution tax	15.d		232,976			275,400
Other liabilities			376,707			398,093
			14,162,302			13,144,293
Total liabilities			20,619,377			17,614,199
Equity
Attributed to controlling shareholders
Share capital	18.a		8,256,042			8,117,972
Capital reserves	18.b		1,672,262			1,812,202
Equity valuation adjustment	18.d		(533,611	)		14,663
Profit reserves	18.c & 18.e		1,760,620			1,282,926
			11,155,313			11,227,763
Non-controlling interests			169,573			152,161
Total equity			11,324,886			11,379,924
Total liabilities and equity			31,944,263			28,994,123

The notes are an integral part of these combined consolidated financial information.

7

RAÍZEN Group

Combined consolidated statement of income

Years ended March 31

(In thousands of reais – R$)

	Note	2016			2015			2014
Net operating revenue	19		74,109,187			65,092,729			58,350,177
Cost of goods sold and services provided	20		(67,815,344	)		(60,487,102	)		(53,851,225	)
Gross income			6,293,843			4,605,627			4,498,952
Operating income (expenses)
Selling	20		(1,814,897	)		(1,675,793	)		(1,652,352	)
General and administrative expenses	20		(924,070	)		(869,888	)		(930,896	)
Other operating income, net	21		398,472			470,153			520,989
Equity income of associated companies	9		(65,891	)		(20,242	)		(24,355	)
			(2,406,386	)		(2,095,770	)		(2,086,614	)
Income before financial income and taxes on profit			3,887,457			2,509,857			2,412,338
Financial income (loss)
Financial expenses	22		(968,872	)		(717,961	)		(527,684	)
Financial income	22		731,821			492,377			317,607
Exchange variation, net	22		(373,960	)		(1,319,651	)		(440,610	)
Net effect of the derivatives	22		171,435			720,082			(20,783	)
			(439,576	)		(825,153	)		(671,470	)
Income before income and social contribution taxes			3,447,881			1,684,704			1,740,868
Income and social contribution taxes	15
Current			(658,545	)		(384,424	)		(404,897	)
Deferred			(411,369	)		51,292			(107,503	)
			(1,069,914	)		(333,132	)		(512,400	)
Net income for the year			2,377,967			1,351,572			1,228,468
Attributable to:
Group’s controlling shareholders			2,341,778			1,313,293			1204.429
Group’s non-controlling shareholders			36,189			38,279			24,039
			2,377,967			1,351,572			1,228,468

The notes are an integral part of these combined consolidated financial information.

8

RAÍZEN Group

Combined consolidated statement of comprehensive income

Years ended March 31

(In thousands of reais – R$)

	2016			2015			2014
Net income for the year		2,377,967			1,351,572			1,228,468
Comprehensive income
Items that will not be reclassified to profit or loss
Gain (loss) actuarial, net (1)		705			(14,041	)		(354	)
Deferred taxes on actuarial gains/losses (Note 15.e)		(241	)		4,719			120
		464			(9,322	)		(234	)
Items that are or may be reclassified to income
Net gain (loss) on financial instruments designated as hedge accounting (Note 23.e)		(831,530	)		51,965			(168,292	)
Effect of foreign currency translation—CTA		57			535			1,082
Deferred taxes on adjustments (Note 15.e)		282,735			(17,681	)		57,221
		(548,738	)		34,819			(109,989	)
Other components of the comprehensive income for the year		(548,274	)		25,497			(110,223	)
Total comprehensive income for the year		1,829,693			1,377,069			1,118,245
Attributable to:
Group’s controlling shareholders		1,793,504			1,338,800			1,094,206
Group’s non-controlling shareholders		36,189			38,269			24,039
		1,829,693			1,377,069			1,118,245

(1) At March 31, 2015, it included a balance of actuarial liabilities totaling R$ 158, accounted for in the thermal power plants (UTEs) directly or indirectly controlled by RESA, for which deferred taxes are calculated due to the fact that these companies are taxed under the presumed profit method.

The notes are an integral part of these combined consolidated financial information.

9

RAÍZEN Group

Combined consolidated statement of changes in equity

Years ended March 31

(In thousands of reais – R$)

	Attributable to Group’s shareholders
			Capital reserves											Profit reserves
	Share capital		Capital reserve			Special Law No. 8.200/91			Goodwill special reserve		Equity valuation adjustment			Tax incentives		Legal		Profit retention			Retained earnings (losses)			Total			Interest of non- controlling shareholders			Total equity*
March 31, 2015		8,117,972		1,564,831			4,260			243,111		14,663			30,256		247,208		1,005,462			—			11,227,763			152,161			11,379,924
Comprehensive income for the year
Net income for the year		—		—			—			—		—			—		—		—			2,341,778			2,341,778			36,189			2,377,967
Actuarial gain, net		—		—			—			—		464			—		—		—			—			464			—			464
Net loss with financial instruments designated as hedge accounting		—		—			—			—		(548,795	)		—		—		—			—			(548,795	)		—			(548,795	)
Effect of foreign currency translation—CTA		—		—			—			—		57			—		—		—			—			57			—			57
Total comprehensive income for the year		—		—			—			—		(548,274	)		—		—		—			2,341,778			1,793,504			36,189			1,829,693
Contributions from (distributions to) Group’s shareholders
Formation of tax incentive reserve of subsidiaries (Note 18.e.iii)		—		—			—			—		—			139,885		—		—			(139,885	)		—			—			—
Capitalization of dividends to holders of preferred shares (Notes 18.a and 18.e)		138,070		(138,070	)		—			—		—			—		—		—			(729	)		(729	)		—			(729	)
Destination of dividends and interest on own capital (Notes 18.b and 18.e)		—		—			—			—		—			—		—		(727,160	)		(1,137,650	)		(1,864,810	)		(20,755	)		(1,885,565	)
Reversal of minimum mandatory dividends		—		—			—			—		—			—		—		—			—			—			2,372			2,372
Partial realization of reserve		—		—			(1,456	)		—		—			—		—		—			1,456			—			—			—
Formation of profit reserves and others		—		(414	)		—			—		—			—		59,282		1,005,687			(1,064,970	)		(415	)		569			154
Initial recognition of non-controlling interest		—		—			—			—		—			—		—		—			—			—			(963	)		(963	)
Total contributions from (distributions to) Group’s shareholders		138,070		(138,484	)		(1,456	)		—		—			139,885		59,282		278,527			(2,341,778	)		(1,865,954	)		(18,777	)		(1,884,731	)
March 31, 2016		8,256,042		1,426,347			2,804			243,111		(533,611	)		170,141		306,490		1,283,989			—			11,155,313			169,573			11,324,886

* As described on Note 2.1(a) combined consolidated companies do not operate as a single legal entity

The notes are an integral part of these combined consolidated financial information.

10

RAÍZEN Group

Combined consolidated statement of changes in equity

Years ended March 31

(In thousands of reais – R$) Continued

	Attributable to Group’s shareholders
			Capital reserves											Profit reserves
	Share capital		Capital reserve			Special Law No. 8.200/91			Goodwill special reserve		Equity valuation adjustment			Tax incentives		Legal		Profit retention			Retained earnings (losses)			Total			Interest of non- controlling shareholders			Total equity*
March 31, 2014		7,821,406		1,726,692			7,813			241,107		(10,844	)		30,256		181,545		873,015			—			10,870,990			110,877			10,981,867
Comprehensive income for the year
Net income for the year		—		—			—			—		—			—		—		—			1,313,293			1,313,293			38,279			1,351,572
Actuarial loss, net		—		—			—			—		(9,312	)		—		—		—			—			(9,312	)		(10	)		(9,322	)
Net gain on financial instruments designated as hedge accounting		—		—			—			—		34,284			—		—		—			—			34,284			—			34,284
Effect of foreign currency translation—CTA		—		—			—			—		535			—		—		—			—			535			—			535
Total comprehensive income for the year		—		—			—			—		25,507			—		—		—			1,313,293			1,338,800			38,269			1,377,069
Contributions from (distributions to) Group’s shareholders
Capital increase		—		—			—			—		—			—		—		—			—			—			9,956			9,956
Effect of downstream merger		—		—			—			2,004		—			—		—		—			—			2,004			—			2,004
Capitalization of dividends to holders of preferred shares		296,566		(164,377	)		—			—		—			—		—		(50,714	)		(1,582	)		79,893			—			79,893
Destination of dividends and interest on own capital		—		—			—			—		—			—		—		(246,682	)		(819,758	)		(1,066,440	)		(9,544	)		(1,075,984	)
Effect of operations in associated companies		—		992			—			—		—			—		—		—			—			992			—			992
Partial realization of reserve		—		—			(3,553	)		—		—			—		—		—			3,553			—			—			—
Formation of reserves and others		—		1,524			—			—		—			—		65,663		429,843			(495,506	)		1,524			2,603			4,127
Total contributions from (distributions to) Group’s shareholders		296,566		(161,861	)		(3,553	)		2,004		—			—		65,663		132,447			(1,313,293	)		(982,027	)		3,015			(979,012	)
March 31, 2015		8,117,972		1,564,831			4,260			243,111		14,663			30,256		247,208		1,005,462			—			11,227,763			152,161			11,379,924

* As described on Note 2.1(a) combined consolidated companies do not operate as a single legal entity

The notes are an integral part of these combined consolidated financial information.

11

RAÍZEN Group

Combined consolidated statement of changes in equity

Years ended March 31

(In thousands of reais – R$) Continued

	Attributable to Group’s shareholders
			Capital reserves											Profit reserves
	Share capital		Capital reserve			Special Law No. 8.200/91			Goodwill special reserve		Equity valuation adjustment			Tax incentives		Legal		Profit retention			Retained earnings (losses)			Total			Interest of non- controlling shareholders			Total equity*
March 31, 2013		7,562,754		1,746,290			13,102			241,107		99,379			—		121,323		1,031,294			—			10,815,249			113,174			10,928,423
Comprehensive income for the year
Net income for the year		—		—			—			—		—			—		—		—			1,204,429			1,204,429			24,039			1,228,468
Actuarial loss, net		—		—			—			—		(234	)		—		—		—			—			(234	)		—			(234	)
Net loss with financial instruments designated as hedge accounting		—		—			—			—		(111,071	)		—		—		—			—			(111,071	)		—			(111,071	)
Effect of foreign currency translation—CTA		—		—			—			—		1,082			—		—		—			—			1,082			—			1,082
Total comprehensive income for the year		—		—			—			—		(110,223	)		—		—		—			1,204,429			1,094,206			24,039			1,118,245
Transfers among reserves		—		(3	)		—			—		—			—		—		3			—			—			—			—
Contributions from (distributions to) Group’s shareholders
Capital increase		8,427		—			—			—		—			—		—		—			—			8,427			—			8,427
Excess amount paid on acquisition of an additional ownership interest in a subsidiary		—		(5,973	)		—			—		—			—		—		—			—			(5,973	)		—			(5,973	)
Reduction due to acquisition of full ownership interest		—		—			—			—		—			—		—		—			—			—			(17,927	)		(17,927	)
Reversal of accumulated translation adjustments arising from downstream merger		—		(20,168	)		—			—		—			—		—		—			—			(20,168	)		—			(20,168	)
Allocation of tax incentives reserves of subsidiaries		—		—			—			—		—			30,256		—		(16,221	)		(14,035	)		—			—			—
Reversal of dividends		—		—			—			—		—			—		—		596			—			596			3,624			4,220
Capitalization of dividends to holders of preferred shares		250,225		3,743			—			—		—			—		—		(6,916	)		(231,497	)		15,555			(2,539	)		13,016
Destination of dividends and interest on own capital		—		—			—			—		—			—		—		(458,898	)		(584,036	)		(1,042,934	)		(7,992	)		(1,050,926	)
Effect of operations in subsidiaries and associated companies		—		1,301			—			—		—			—		—		3,229			—			4,530			—			4,530
Partial realization of reserve		—		—			(5,289	)		—		—			—		—		—			5,289			—			—			—
Formation of reserves		—		1,502			—			—		—			—		60,222		319,928			(380,150	)		1,502			(1,502	)		—
Total contributions from (distributions to) Group’s shareholders		258,652		(19,595	)		(5,289	)		—		—			30,256		60,222		(158,282	)		(1,204,429	)		(1,038,465	)		(26,336	)		(1,064,801	)
March 31, 2014		7,821,406		1,726,692			7,813			241,107		(10,844	)		30,256		181,545		873,015			—			10,870,990			110,877			10,981,867

* As described on Note 2.1(a) combined consolidated companies do not operate as a single legal entity

The notes are an integral part of these combined consolidated financial information.

12

RAÍZEN Group

Combined consolidated statement of cash flows

Years ended March 31

(In thousands of reais – R$)

	2016			2015			2014
Cash flow from operating activities
Income before income and social contribution taxes		3,447,881			1,684,704			1,740,868
Adjustments:
Depreciation and amortization (Notes 19 and 20.a)		2,410,149			2,381,165			2,151,603
Change in fair value of biological assets (Note 20.a)		(637,936	)		32,697			64,918
Equity in net income of associated companies (Note 9)		65,891			20,242			24,355
Gain on disposal of property, plant and equipment (Note 21)		(70,981	)		(132,824	)		(230,284	)
Capital gain on dilution of ownership interest in associated company (Notes 9.b and 21)		(15,583	)		(30,333	)		—
Formation of allowance for doubtful accounts, net		37,592			5,530			3,258
Income from investment grants (Notes 20, 11 and 21)		(40,646	)		(59,557	)		(32,090	)
Formation of provision for legal disputes, net		12,561			10,969			33,331
Interest, monetary and exchange variations, net		1,105,403			1,985,296			820,854
Change in fair value of financial instruments (Notes 14, 22 and 23)		(49,556	)		—			—
Amortization of prepaid revenues		(46,740	)		(49,115	)		(48,028	)
Amortization of expenses paid in advance		63,822			57,864			43,590
Unrealized gain on derivative transactions		(711,899	)		(413,449	)		(63,162	)
Gain on fair value of shares (Note 21)		—			(40,366	)		—
Provision (reversal) for losses in property, plant and equipment and intangible assets, net (Notes 11 and 12)		(1,869	)		63,738			777
Other		(71,197	)		19,472			6.633
Changes in assets and liabilities
Trade accounts receivable and advances from clients		(46,957	)		123,128			13,540
Inventories		(180,481	)		16,139			(175,631	)
Restricted cash		(651,056	)		116,714			(147,009	)
Derivative financial instruments		419,131			(18,377	)		(21,121	)
Other financial assets		—			48,910			(1	)
Related parties, commercial operations		81,899			(19,267	)		206,616
Suppliers and advances to suppliers		177,061			(130,480	)		242,588
Taxes and contributions, net		(180,500	)		(294,912	)		(296,031	)
Salaries and wages payable		49,301			44,306			18,032
Judicial deposits		(49,699	)		(28,051	)		(74,620	)
Other assets and liabilities, net		43,672			(64,832	)		(78,226	)
Income and social contribution taxes on net income—paid		(303,043	)		(256,749	)		(292,685	)
Net cash generated from operating activities		4,856,220			5,072,562			3,912,075
Cash flow from investing activities
Acquisition of new businesses, net of cash acquired (Note 26)		—			(177,744	)		(298,903	)
Additions to investments (Note 9.b)		(48,513	)		(58,964	)		(57,131	)
Additions to property, plant and equipment and intangible assets (Notes 11 and 12)		(1,720,201	)		(2,122,489	)		(2,227,680	)
Cash received upon disposal of fixed assets		152,064			221,122			393,798
Dividends received from affiliates		3,242			13,880			919
Additions to biological assets (planting and crop treatment) (Note 12)		(701,680	)		(851,411	)		(838,647	)
Net cash used in investing activities		(2,315,088	)		(2,975,606	)		(3,027,644	)
Cash flow from financing activities
Loans and financing		2,951,102			6,087,282			2,502,428
Issue of debentures, net of funding costs		—			—			747,710
Amortization of principal of loans and financing		(2,701,957	)		(4,727,142	)		(2,063,952	)
Interest paid on loans and financing		(732,085	)		(540,670	)		(393,245	)
Financial investments linked to financing (Restricted cash)		(9,527	)		22,046			3,155
Dividends and interest on own capital paid		(1,701,132	)		(1,257,490	)		(1,164,461	)
Other		19			9,627			(54,175	)
Net cash used in financing activities		(2,193,580	)		(406,347	)		(422,540	)
Increase in cash and cash equivalents, net		347,552			1,690,609			461,891
Cash and cash equivalents at the beginning of the year (Note 3)		4,028,230			2,337,621			1,875,730
Effect of exchange variation on cash and cash equivalents		(3,151	)		—			—
Cash and cash equivalents at the end of the year (Note 3)		4,372,631			4,028,230			2,337,621

The notes are an integral part of these combined consolidated financial information.

13

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

1. Operations

1.1. Raízen Group

Raízen Group (“Group”) is basically engaged in the following activities and comprises the following companies:

(a) Raízen Energia S.A. and subsidiaries (“Raízen Energia” or “RESA”):

RESA is a publicly held corporation, registered with the CVM (Securities Commission), category B, headquartered in the city and state of São Paulo, Brazil. RESA was organized on June 1, 2011 and is indirectly and jointly controlled by Royal Dutch Shell (“Shell”) and Cosan Limited (“Cosan”).

RESA engages in producing and marketing sugar and ethanol, and the trading, both domestically and abroad through its subsidiaries Raízen Trading LLP and Raízen International Universal Corporation, and co-generating energy produced from bagasse at its 24 plants located in Brazil’s Center-Southern Region.

Sugarcane farming requires a period ranging from 12 to 18 months for maturing and usually harvesting and starts between the months of April and May every year, and usually ends between November and December, period in which sugar, ethanol and energy are also produced. Production is sold during the whole year and does not fluctuate over the seasons, but is affected by normal market supply and demand fluctuations. Because of RESA’s production cycle, its fiscal year and the fiscal year of Raízen Combustíveis S.A. and therefore of Raízen Group starts on April 1 and ends on March 31.

(b) Raízen Combustíveis S.A. and its subsidiaries (“Raízen Combustíveis” or “RCSA”):

RCSA is a closely-held corporation and is headquartered in the city and state of Rio de Janeiro, Brazil. RCSA is indirectly jointly-controlled by Shell and Cosan.

RCSA is engaged in: (i) distributing and marketing oil and ethanol by-products, and other fluid hydrocarbons and their by-products under Shell brand; (ii) marketing natural gas and operating as commercial representative for the sale of lubricants at gas stations; (iii) purchasing and selling products and merchandise at convenience stores; (iv) importing and exporting the products previously mentioned and; (v) holding ownership interest in other companies.

14

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

(c) Capital transactions with shareholders and transfer of debts between RESA and RCSA

At the Board of Directors’ Meeting held on August 31, 2015, the Group entities’s directors approved the execution of Private Agreements for Assumption of Debts and Other Covenants, under which RCSA assumed liabilities arising from export prepayment contracts (PPEs) and linked swap contracts of RESA, and in return will receive a consideration from the latter equivalent to the amount of the debt, as presented below:

RESA’s contracts assumed by RCSA	Currency	RESA’s debt assumed by RCSA		Consideration paid by RESA to RCSA		Amount (in R$)
PPE	US$		75,967		75,967		277,258
PPE	US$		90,617		90,617		330,724
PPE	US$		91,376		91,376		333,494
PPE	US$		92,040		92,040		335,919
			350,000		350,000		1,277,395
PPE	€		40,000		40,000		163,916
PPE	€		66,000		66,000		270,461
			106,000		106,000		434,377
							1,711,772

In a Special Shareholders’ Meeting held on August 31, 2015, shareholders Shell and Cosan decided and approved redemption of 1,641,750,012 common shares as an RCSA share capital decrease in the amount of R$1,500,000. This redemption of common shares and share capital decrease were made in proportion to interest held by shareholders, corresponding to 50% of each one’s common shares.

Additionally, at the Special Shareholders’ Meeting Shell and Cosan’s shareholders decided and approved RESA’s capital increase of R$1,500,000 in domestic currency through issuance of 1,340,687,564 new nominative common shares, carried out proportionately to 50% interest held by shareholders. Liquidation occurred through the RCSA’s share capital decrease in the same amount of RESA’s capital increase.

These operations are presented in the statement of cash flows, on a net basis, within “Cash flows from financing activities”.

The event above did not cause changes in the Group’s shareholding control or financial position, since the stockholders Shell and Cosan maintained joint control through a 50% interest in the capital of RCSA and RESA, and, consequently, of the Group.

15

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

(d) Other information

The synergy between RESA and RCSA makes Raízen Group to be currently positioned in a special place in the Brazilian market. The two companies work in a complementary manner, and therefore, reporting their combined businesses is a key tool to allow the market to evaluate the Group as a whole.

Although they are not set up as a group pursuant to article 265 of Brazilian Corporate Law (“LSA”), the Raízen Group discloses combined consolidated financial statements to provide information that best reflects their gross cash flows from operating activities.

The Raízen Group’s combined consolidated financial statements are being presented exclusively to provide information about all the Raízen Group’s activities in a single set of financial statements, regardless of the Group’s corporate structure.

During year ended March 31, 2016, 2015 and 2014, the Group were subject to the following corporate reorganizations: (i) capital increase at Saturno Investimentos Imobiliários Ltda. (“Saturno”); (ii) merger of Sampras Participações Ltda (“Sampras”); (iii) capital increase at Bioenergia Jataí Ltda. (“Bio Jatai”); (iv) acquisition of Latina Distribuidora de Petróleo Ltda. (“Latina”); (v) acquisition of Cerrado Açúcar Álcool S.A. (“Cerrado”); (vi) corporate restructuring involving net assets relating to the electricity cogeneration activity; (vii) corporate reorganization involving net assets related to real estate investment activity; (viii) corporate restructuring relating to the downstream merger of Curupay Agroenergia Ltda. (“Curupay”) by TEAS—Terminal Exportador de Álcool de Santos Ltda.; (ix) acquisition of interest in the associated company Serviços e Tecnologia de Pagamentos S.A. (“STP”); and (x) acquisition of the shares of Costa Rica Canavieira Ltda. (“Costa Rica”). Details of these transactions are described in Note 26.

2. Significant accounting policies

2.1 Basis of preparation

The combined consolidated financial statements have been prepared and are being presented in accordance with the International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

The issuance of the combined consolidated financial statements of Raízen Group was authorized by the Management on June 3, 2016.

a) Combination criteria

These combined consolidated financial statements include the accounts of the following companies:

• Raízen Energia S.A. and its subsidiaries

• Raízen Combustíveis S.A. and its subsidiaries

Intra-group balances and transactions, and any unrealized income and expenses arising from intra-group transactions, are eliminated in preparing the combined consolidated financial information.

16

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

The combined consolidated companies do not operate as a single legal entity, and therefore the combined consolidated financial information are not necessarily indicative of the results reported or future results that would be reported by those companies if they were operating as a single legal entity. Therefore, the combined consolidated financial statements should not be relied upon to calculate dividends, taxes or statutory purposes.

The assets and shareholders’ equity as of March 31, 2016 and 2015, as well as income (loss) for the years ended March 31, 2016 and 2015 and other comprehensive income as of March 31, 2016 and 2015 of the companies that comprise the combined consolidated financial statements and the respective combined consolidated balances, after the elimination of intragroup transactions, are as follows:

	Total assets						Total equity
	2016			2015			2016			2015
Raízen Energia S.A. and its subsidiaries		22,783,373			21,746,337			8,555,233			6,775,209
Raízen Combustíveis S.A. and its subsidiaries		10,766,366			10,492,669			2,777,806			4,604,715
		33,549,739			32,239,006			11,333,039			11,379,924
Elimination of balances receivable from commercial transactions		(1,605,476	)		(3,244,883	)		(8,153	)		—
Combined consolidated balances		31,944,263			28,994,123			11,324,886			11,379,924

	Net income
	2016			2015		2014
Raízen Energia S.A. and its subsidiaries		1,185,644			110,999		140,883
Raízen Combustíveis S.A. and its subsidiaries		1,200,476			1,240,573		1,087,585
Elimination of commercial transactions, unrealized profits and financial operations		(8,153	)		—		—
Combined consolidated income		2,377,967			1,351,572		1,228,468

	Other comprehensive income
	2016			2015		2014
Raízen Energia S.A. and its subsidiaries		676,400			136,916		30,835
Raízen Combustíveis S.A. and its subsidiaries		1,161,446			1,240,153		1,087,410
Elimination of commercial transactions, unrealized profits and financial operations		(8,153	)		—		—
Combined consolidated income		1,829,693			1,377,069		1,118,245

The combined consolidated financial statements are a single set of combined consolidated financial statements of two or more entities that are jointly controlled. RESA and RCSA used the definition of control in conformity with the IFRS 10, with respect to both the existence of joint control and also to the consolidation procedures as mentioned before.

17

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

b) Measuring basis

The combined consolidated financial statements were prepared using historical cost as the value base, except, when applicable, for the valuation of material assets and liabilities such as derivative and non-derivative financial instruments, agricultural products and biological assets, which are measured at fair value.

c) Functional currency and presentation currency

These combined consolidated financial statements are being presented in reais, functional currency of the two parents. The financial statements of each subsidiary included in the consolidation and combination, as well as those utilized as a basis to account for investments under the equity method, are prepared based on the functional currency of each company.

For the subsidiaries located abroad, the financial statements have been translated into reais based on the foreign exchange rate in effect at the end of the year. The results were calculated at the average monthly rate during the year. Translation effects are recognized in equity.

d) Significant judgments, estimates and assumptions

The preparation of combined consolidated financial statements requires Management to make judgments and estimates and make assumptions that affect the amounts presented for revenues, expenses, assets and liabilities on the reporting date of the financial statements.

These estimates and assumptions are reviewed in a continuous manner. Reviews in relation to accounting estimates are recognized in the period in which the estimates are reviewed and in any future periods affected.

Should there be a significant change in the facts and circumstances on which the estimates and assumptions made are based, there may be a material impact on the Group’s results and financial position.

The significant accounting estimates and assumptions are set out below:

Income tax, social contribution and other taxes payable

The Group is subject to income tax and social contribution in all countries in which it operates. Significant judgment is required to determine the provision for income taxes in these various countries.

In many operations, the final determination of the tax is uncertain. The Group also recognizes provisions to cover certain situations in which it is probable that additional tax amounts will be owed. When final result of such issues differs from initially estimated and recorded amounts, these differences affect current and deferred tax liabilities in the period in which definitive value is determined.

18

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

Investment grants—Value-added Tax on Sales and Services (ICMS)

The Group, through RESA’s subsidiaries Raízen Centroeste Açúcar e Álcool Ltda. (“Raízen Centroeste”) and Raízen Caarapó Açúcar e Álcool Ltda. (“Raízen Caarapó”), joined a tax incentive program to finance a portion of the ICMS due. The use of this investment grant by the Group is conditioned on compliance with all the obligations established under the program, which are controlled by the Group. The income from these incentives is recorded in the statement of income for the year, as disclosed in Note 21.

Deferred income and social contribution tax

Deferred income tax and social contribution assets are recognized for all tax loss carry forwards not utilized to the extent that it is probable that there will be future taxable income to allow their use in the future. Substantial judgment from Management is required to determine the amount of the deferred income tax and social contribution assets that can be recognized, based on the reasonable term and amount of future taxable income, along with future tax rationalization.

Deferred income tax assets and liabilities are presented at their net value in the statement of financial position only when there is the legal right and the intention of offsetting them upon calculation of current taxes, related to the same legal entity and the same tax authority. For further details on deferred taxes, see Note 15.

Biological assets and agricultural products

Biological assets are measured at fair value at the point of harvest, and the effects of changes in fair value between the periods are recognized directly in the cost of products sold. For further information on the assumptions used, see Note 10.

The fair value of agricultural produce is calculated at each reporting date, through an analysis of the average production cost of the sugarcane harvested in relation to its market value.

Property, plant and equipment and intangible assets, including goodwill

The accounting treatment given to property, plant and equipment and intangible assets includes estimates to determine the useful life for depreciation and amortization purposes, in addition to the fair value at acquisition date of the assets acquired through business combinations.

Currently, the Group performs impairment tests on the assets with an indefinite useful life, especially goodwill supported by future profitability.

The determination of the recoverable amount of the cash-generating unit to which the goodwill was allocated also includes the use of estimates and assumptions and requires a significant degree of Management’s judgment.

19

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

Provision for tax, civil, environmental and labor contingencies

The Group constitutes a provision for tax, civil, environmental and labor contingencies. Determination of the likelihood of loss includes determination of available evidence, hierarchy of laws, jurisprudence available, more recent court decisions and relevance thereof in legal system, as well as evaluation of internal and external attorneys. Such provisions are reviewed and adjusted to take into account changes in circumstances, such as statute of limitations applicable, tax inspection conclusions or additional exposures identified based on new matters or court decisions.

Provision for removal of storage tanks

Future costs with removal of fuel storage tanks are estimated and recorded as part of the costs of these assets, with a corresponding entry to the provision that supports such costs. These costs are presented as property, plant and equipment, with a corresponding entry to non-current or current liabilities. The estimates for these costs are recorded at the present value of these obligations, discounted at a risk-free interest rate.

Fair value of financial instruments

When the fair value of the financial assets and liabilities presented in the statement of financial position cannot be obtained from active markets, it is determined by using valuation techniques, including the discounted cash flow method. The data for these methods are based on those adopted by the market, when possible. However, when such data is not available, a certain level of judgment is required to establish the fair value. Judgment includes considerations on the data utilized, such as liquidity risk, credit risk and volatility. Changes in the assumptions related to these factors can affect the fair value presented for the financial instruments. For more details on financial instruments, see Note 23.

20

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

2.2 Basis of consolidation and combination

The combined consolidated financial statements include information on RESA and its subsidiaries, and RCSA and its subsidiaries, for the periods ended March 31, 2016, 2015 and 2014. The direct and indirect subsidiaries of RCSA and RESA are listed below:

Subsidiaries of RESA	Direct and indirect ownership interests
	2016		2015		2014
Agrícola Ponte Alta Ltda.		100%		100%		100%
Agropecuária Santa Hermínia Ltda.		100%		100%		100%
América Trading Investments		100%		100%		100%
Benálcool Açúcar e Álcool Ltda.		100%		100%		100%
Bioenergia Araraquara Ltda. (Note 26)		100%		100%		—
Bioenergia Barra Ltda. (Note 26)		100%		100%		—
Bioenergia Caarapó Ltda. (Note 26)		100%		100%		—
Bioenergia Costa Pinto Ltda. (Note 26)		100%		100%		—
Bioenergia Gasa Ltda. (Note 26)		100%		100%		—
Bioenergia Jataí Ltda. (Note 26)		100%		100%		—
Bioenergia Maracaí Ltda. (Note 26)		100%		100%		—
Bioenergia Rafard Ltda. (Note 26)		100%		100%		—
Bioenergia Serra Ltda. (Note 26)		100%		100%		—
Bioenergia Tarumã Ltda. (Note 26)		100%		100%		—
Bioenergia Univalem Ltda. (Note 26)		100%		100%		—
Curupay Agroenergia Ltda. (Note 26)		—		—		100%
Raízen Açúcar Ltda (established on March 7, 2016).		100%		—		—
Raízen Araraquara Açúcar e Álcool Ltda.		100%		100%		100%
Raízen Ásia PT Ltd.		100%		100%		100%
Raízen Biotecnologia S.A.		100%		100%		100%
Raízen Caarapó Açúcar e Álcool Ltda.		100%		100%		100%
Raízen Centroeste Açúcar e Álcool Ltda.		100%		100%		100%
Raízen Energy Finance Ltd.		100%		100%		100%
Raízen International Universal Corp.		100%		100%		100%
Raízen Luxembourg S.A. (formerly named Raízen Cayman Ltd.)		100%		100%		100%
Raízen North América, Inc.		100%		100%		100%
Raízen Paraguaçú Ltda.		100%		100%		100%
Raízen Tarumã Ltda.		100%		100%		100%
Raízen Trading LLP		100%		100%		100%
TEAS Terminal Exportador de Álcool de Santos Ltda.		100%		100%		100%
Unimodal Ltda.		73.41%		—		—

Subsidiaries of RCSA	Direct and indirect ownership interests
	2016		2015		2014
Blueway Trading Importação e Exportação Ltda.		100%		100%		100%
Petróleo Sabbá S.A.		80%		80%		80%
Raízen Fuels Finance Limited.		100%		100%		100%
Raízen Mime Combustíveis S.A.		76%		76%		76%
Sabor Raíz Alimentação S.A. (“Sabor Raiz”)(1)		60%		60%		—
Sampras Participações Ltda. (Note 26)		—		100%		100%
Saturno Investimentos Imobiliários Ltda. (Note 26)		100%		100%		—

⁽¹⁾  During the fiscal year ended March 31, 2015, the partners of Sabor Raíz approved the constitution and capital increase in the total amount of R$ 21,000, totaled subscribed and parcial integralized, R$ 12,600 was contributed by RCSA, through its subsidiaries Sampras Participações Ltda. (“Sampras”) and R$ 8,400 by the non-controlled shareholder. On March 31, 2015, the portion to be paid by RCSA and non-controlling shareholder is R$ 10,800 and R$ 7,200, respectively. The increase capital was made by Sampras and represented a share participation of 60% on the capital of Sabor Raíz.

21

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

The subsidiaries are fully consolidated from the date of control on acquisition, and continue to be consolidated up to the date when control no longer exists. The financial statements of the subsidiaries are prepared for the same reporting period as the Group, and utilizing accounting policies consistent with the policies adopted by the Group.

All balances maintained between combined consolidated companies, revenues and expenses, unrealized gains and losses, arising from transactions between companies are eliminated as a whole.

A change in the ownership interest in a subsidiary which does not result in loss of control is accounted for as a transaction between shareholders in equity.

The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is equal to the fair value of the assets transferred, liabilities incurred and equity instruments issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement, when applicable. Acquisition-related costs are recorded in the statement of income as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date.

The Group recognizes any non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets. Non-controlling interests to be recognized are determined for each acquisition carried out.

The excess of the consideration transferred plus the acquisition-date fair value of any previous ownership interest in the acquiree over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill. For acquisitions in which the Group attributes fair value to non-controlling interests, the determination of goodwill also includes the value of any non-controlling interest in the acquiree, and the goodwill is determined considering the Group’s and non-controlling interests. When the consideration transferred is less than the fair value of the net assets of the acquired subsidiary, the difference is recognized directly in the statement of income for the year.

2.3 Description of significant accounting policies

The accounting policies described below have been consistently applied to all the years presented in these combined consolidated financial statements.

a) Revenue recognition

Revenues from sales of products or goods, including sales in the foreign market made by RESA’s subsidiaries, Raízen Trading LLP and Raízen International Universal Corporation, are recognized when the entity transfers to the buyer the significant risks and rewards of ownership of the products and goods, and when it is probable that future economic benefits will be received by companies of the Group. Selling prices are established based on purchase orders or contracts.

Goods or services whose revenue is deferred are recognized within “Other obligations” and accounted for as revenues upon delivery of the goods or provision of the services.

22

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

The revenue from the sale of the electric power co-generated is recorded based on the assured energy and the tariffs specified in the supply agreement, or the current market price, according to each case. The electric power produced and sold through auctions is initially recognized as prepaid income, and is only recognized in the statement of income for the year when it is available to be used by the clients.

Revenue from leases and storage comprises leases of gas stations and storage of fuel and similar products in the RCSA terminals, and is recognized as the services are rendered, under Other operating income, net (Note 21).

Revenue is presented net of taxes (Excise Tax—IPI, Value-added Tax on Sales and Services—ICMS, Social Integration Program—PIS, Social Contribution on Revenues (COFINS), Economic Domain Intervention Contribution (CIDE), National Institute of Social Security (INSS) etc.), returns, rebates and discounts, amortization referring to exclusive supply rights, as well as of sales between Group companies.

b) Foreign currency transactions

Foreign currency transactions are translated into the functional currency (the real) using the exchange rates prevailing at the dates of the transactions, or the dates of valuation when items are remeasured.

Monetary assets and liabilities denominated in a foreign currency are converted into reais using the foreign exchange rates prevailing at the reporting date, and foreign exchange gains and losses arising from the settlement of these transactions and the translation at year-end exchange rates are recognized in the statement of income within Finance income (losses), unless they qualify as hedge accounting, in which case they are recognized in comprehensive income (loss).

Non-monetary items that are measured at their historical cost in a foreign currency are translated using the translation rate of the transaction start date. Non-monetary assets that are measured at fair value in a foreign currency are translated using the exchange rate at the date when the fair value is determined.

c) Financial instruments—Initial recognition and subsequent measurement

(i) Financial assets

Initial recognition and measurement

Financial assets are classified in the following categories: at fair value through profit or loss and loans and receivables. The Group classifies its financial assets upon initial recognition.

Financial assets are initially recognized at fair value plus, in the case of investments not carried at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset.

The Group’s financial assets are presented in Note 23.

23

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

Subsequent measurement

The subsequent measurement of financial liabilities depends on their classification, which can be as follows:

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss include financial assets held for trading and assets designated in the initial recognition, as measured at fair value through profit or loss. They are classified as held-for-trading if they are originated with the purpose of being sold or repurchased in the short term. Derivatives are also measured at fair value through profit or loss, except for those designated as hedging instruments, which are maintained in equity and subsequently recognized in the statement of income, as described in Item V below. Interest, monetary restatement and foreign exchange variation and variations arising from measurement at fair value in income (loss) when incurred, under Financial income (loss).

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments and usually not quoted in an active market. After the initial measurement, these financial assets are accounted for at amortized cost using the effective interest rate method (effective interest rate), less impairment loss, when applicable. Amortized cost is calculated taking into account any discount or “premium” in the acquisition and fees or costs incurred. The amortization of the effective interest rate method is included under Financial income (loss) in the statement of income.

Derecognition (write-off)

A financial asset is written off when: (i) The rights to receive cash flows from the asset expire, and, (ii) the Group transfers its rights to receive cash flows from the asset or assumes an obligation to pay the cash flows received in full without material delay to a third party under a ‘pass-through’ arrangement; and (a) the Group transfers substantially all risks and rewards of the assets, or (b) the Group neither transfers nor retains substantially all the risks and rewards related to the asset, but transfers the control over the asset.

Impairment of financial assets

The Group assesses, at the reporting dates, whether there is any evidence that determines that an asset or group of financial assets is impaired. The Company assesses, at the reporting dates, whether there is any evidence that determines that a financial asset or group of financial assets is impaired. A financial asset or group of financial assets is considered impaired if, and only if, there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (known as a loss event) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets and can be reliably estimated.

24

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

The criteria used by the Group to determine whether there is objective evidence of an impairment loss include: (i) issuer or debtor’s relevant financial difficulties; (ii) a breach of contract, such as a default or delay on payment of interest or the principal; (iii) The Group, due to economic or legal reasons relating to the financial difficulty of the borrower, assures the borrower a concession that the creditor would not consider; (iv) It is likely that the borrower will declare bankruptcy or other financial reorganization; (v) the disappearance of an active market for that financial asset due to the financial difficulties; or (vi) observable data indicating a measurable reduction in estimated future cash flows from a financial asset portfolio since the initial recognition of the assets, even if the decrease cannot yet be identified with the individual financial assets in the portfolio, including: (a) national or local economic conditions correlating with adverse changes in the payment situation of the portfolio’s loan; and, (b) national or local economic conditions correlating with defaults on the portfolio’s assets.

If, in a subsequent period, the value of the impairment loss decreases and the decrease is objectively related to an event occurring after the impairment is recognized (such as, an improvement in the debtor’s credit classification) the reversal of the previously recognized impairment loss will be recognized in the statement of income in the period that the event occurs.

(ii) Financial liabilities

Initial recognition and measurement

Financial liabilities are classified as financial liabilities at fair value through profit or loss, at amortized cost, or as derivatives classified as an effective hedge instrument, as the case may be. The Group classifies its financial liabilities upon initial recognition.

Financial liabilities are initially recognized at fair value, and in the case of loans and financings, include directly related transaction costs.

The Group’s financial liabilities are presented in Note 23.

Subsequent measurement

The measurement of financial liabilities depends on their classification, which can be as follows:

Financial liabilities at fair value through profit or loss

They include financial liabilities usually traded before maturity, liabilities designated in the initial recognition at fair value by means of the result and derivatives, except for those designated as hedge instruments. Interest, monetary restatement, foreign exchange variation and variations arising from measurement at fair value, when applicable, are recognized in income when incurred.

25

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

Amortized cost

After initial recognition, loans and financing subject to interest are subsequently measured at amortized cost, using the effective interest rate method. Gains and losses are recognized in the income statement upon settlement of liabilities, as well as during the amortization process by the effective interest rate method.

Derecognition (write-off)

A financial liability is derecognized when the obligation under the liability is discharged, canceled or expired.

(iii) Offset of financial instruments—net presentation

Assets and liabilities are presented net in the statement of financial position if, and only if, there is a current legal and enforceable right to offset the recognized amounts and if the intention of offsetting, or realizing the asset and settling the liability simultaneously.

(iv) Fair value of financial instruments

The fair value of financial instruments actively traded in organized financial markets is determined based on quoted market prices at the close of business at the reporting date, without deduction of transaction costs.

The fair value of financial instruments for which there is no active market is determined using valuation techniques. These techniques may include the use of recent market transactions (on an arm’s length basis); by reference to the current fair value of another similar instrument; discounted cash flow analysis or other valuation models.

An analysis of the fair value of financial instruments and more details on how they are calculated are provided in Note 23.

(v) Derivative financial instruments and hedge accounting

Initial recognition and subsequent measurement

The Group uses derivative financial instruments, such as non-deliverable forwards, commodity forward contracts and interest rate swaps to provide protection against the risk of variation in the foreign exchange rates, the risk of variation in the prices of commodities and the risk of variation in interest rates, respectively. The derivative financial instruments designated in hedging operations are initially recognized at fair value on the date on which the derivative is obtained, and are subsequently restated also at fair value. Derivatives are presented as financial assets when the fair value of the instrument is positive; and as financial liabilities when the fair value is negative.

26

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

Any gains or losses resulting from changes in the fair value of derivatives during the year are recognized directly in the statement of income, with the exception of the effective portion of the hedge designated as hedge accounting, which is recognized in other comprehensive income.

For hedge accounting purposes, there are the following classifications:

• fair value hedge, in providing protection against exposure to changes in the fair value of recognized asset or liability or of unrecognized firm commitments, or of identified part of such asset, liability or firm commitment, which is attributable to a particular risk and may affect the result;

• cash flow hedge, in providing protection against the variation in the cash flows that is attributable to a particular risk associated with a recognized asset or liability or with a foreseen transaction that is highly likely and that might affect the result; or

• hedge of a net investment in a foreign operating unit.

In the initial recognition of a hedge relationship, the Group formerly classifies and documents the hedge relationship to which they wish to apply hedge accounting, as well the objective and the risk management strategy of company management to put the hedge into effect.

The documentation includes: i) the identification of the hedge instrument, ii) the hedged item or transaction, iii) the nature of the risk to be hedged, iv) the prospective demonstration of the efficacy of the hedge relationship and v) the way in which the Group intends to assess the efficacy of the hedge instrument for purposes of offsetting the exposure to changes in the fair value of the hedged item or cash flows related to the hedged risk. In regards to a cash flow hedge, the demonstration of the high probability of the foreseen transaction to be hedged, as well as the foreseen periods of transfer of the gains or losses resulting from the hedge instruments from equity to income, are also included in the documentation of the hedge relationship.

These hedges are expected to be highly effective to offset changes in the fair value or cash flows. They will be permanently evaluated to verify whether they were indeed highly effective over the course of all the base periods for which they were intended.

Hedges that fulfill the criteria for their hedge accounting are recorded as follows:

Fair value hedge and fair value option of certain financial liabilities of RCSA

As mentioned in Note 1.c, on August 31, 2015, RCSA, by means of debt assumption agreements, agreed to assume a debt of RESA arising from export prepayment contracts (PPEs), totaling R$ 1,711,772, of the Term Loan Agreement andSchuldschein types, denominated in US dollars (“US$”) and euros (“€”).

27

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

The exposures to US$ and € fluctuations, referring to those contracts and PPEs, totaling R$ 801,275 (equivalent to US$ 219 million), are hedged by swaps to reais, including new borrowings of theSchuldschein and PPE types, amounting to R$ 264,164 (equivalent to € 60 million) and R$ 1,186,380 (equivalent to US$ 300 million), respectively, obtained in the period ended March 31, 2016, causing the Group to be exposed to the Interbank Deposit Certificate (CDI) variation (from 95% to 112% ). The changes in the fair value of derivatives entered into are accounted for under Finance income (costs), within Net effect of derivatives.

The Group designated debts of the Term Loan Agreement,Schuldschein and PPE types as liabilities measured at fair value through profit or loss, in order to eliminate, or at least significantly reduce, inconsistencies in measurement that would otherwise result in the recognition of gains or losses on the loans and derivatives on different bases. As a result, fluctuations of loans fair value are accounted for in caption Financial income, in line Fair value of liability financial instruments, classified in Financial expenses group.

Cash flow hedge

The effective portion of the gain or loss on the hedging instrument is initially recorded in other comprehensive income (loss), while any ineffective portion is recognized directly in financial income (loss).

Amounts recognized in other comprehensive income are transferred to the income statement when the hedged transaction affects profit or loss, such as when the hedged income or interest expense is recognized, or when a forecast sale occurs. When the hedged item is the cost of a non-financial asset or liability, the amounts recognized in equity are transferred to the initial carrying amount of the non-financial asset or liability.

If the forecast transaction or firm commitment is no longer expected to occur, the amounts previously recognized in equity are transferred to the statement of income. If the hedging instrument expires or is sold, terminated or exercised without replacement or rollover, or if its designation as a hedge is revoked, any cumulative gain or loss previously recognized in comprehensive income (loss) remains deferred in equity within “Reserve for other comprehensive income (loss)” until the forecast transaction or firm commitment affects profit or loss.

The types of financial instruments designated as hedge accounting are presented in Note 23.

d) Trade notes receivable

Trade notes receivable correspond the amounts receivable due to sale of goods or rendering of services in the regular course of Group’s activities. If the due date for payment is one year or less, the accounts receivable are classified as current assets. Otherwise they are shown as non-current assets. Trade accounts receivable are recognized initially at fair value and subsequently measured at amortized cost, using the effective interest rate method, less provision for doubtful accounts (“PDD”) or impairment.

28

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

e) Inventories

Inventories are valued at the average acquisition or production cost, not exceeding net realizable amount, except for agricultural produce in RESA, which is measured at fair value at the point of harvest. Cost of finished products and products in process include raw material, direct labor costs and other direct costs as well as respective direct production expenses (based on regular operating capacity) less loan costs. The net realizable value is the sales price estimated for the normal course of the businesses, less estimated completion execution costs and selling expenses.

At the point of harvest, sugarcane is considered agricultural produce and measured at fair value, less costs to sell, which is determined based on the amount disclosed by the Council of Sugarcane, Sugar and Ethanol Producers of the State of São Paulo (CONSECANA). The fair value of harvested sugarcane is the cost of the raw material used in the production of sugar and ethanol.

The provisions for slow-moving or obsolete warehouse inventories are constituted when these inventories have not moved for a certain period and are not considered strategic by the Management.

f) Advances to suppliers

These refer substantially to advances to sugarcane suppliers, granted by the Group on the date of execution of sugarcane supply agreements, and the respective amendments to these agreements, which will be amortized as the sugarcane and petroleum and ethanol by-products are supplied. In accordance with the estimated sugarcane to be delivered by the supplier, the aforementioned balances will be substantially settled in the current crop season and over the next nine crop seasons.

g) Investment in associated companies

Investments in companies over which the Group has significant influence are accounted for under the equity method. They are initially recognized at in the statement of financial position at cost, plus any changes after the acquisition of the ownership interest.

The statement of income reflects the share in the results from operations of associated companies based on the equity accounting method. When a change is directly recognized in the shareholders’ equity of the associated company, the Group will recognize its share in the variations occurred and will disclose that fact and, where applicable, in the statement of changes in the equity.

After applying the equity accounting method, the Group determines whether it is necessary to recognize additional impairment on the investment. The Group determines, at each reporting date, if there is objective evidence that the investment in the associated company suffered an impairment loss. If so, the Group calculates the amount of impairment loss as the difference between the recoverable amount of the associated company and the book value and recognizes the amount in the statement of income.

29

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

When there is loss of significant influence on the associated company, the Group evaluates and recognizes its investment at fair value.

Unrealized gains from transactions between the Group and its associated companies are eliminated to the extent of the Group’s interest in the associates. Non-realized losses are also eliminated, unless the transaction shall provide evidence of loss (impairment) of the asset transferred. The accounting policies of the associated companies are changed when required in order to assure the consistency with the policies adopted by the Group.

h) Biological assets

Biological assets refer to sugarcane crops.

Sugarcane crops are measured at fair value, excluding the land on which they are located, under the discounted cash flow method.

For sugarcane, the Group uses future cash flows in accordance with the productivity cycle projected for each harvest, taking into consideration the estimated useful life of each crop, the prices of total recoverable sugar, estimated productivities, estimated costs to be incurred with production, harvesting, loading and transportation per planted hectare.

Changes in fair values between periods are allocated to the cost of products sold.

Any land belonging to the Group where biological assets are produced is accounted for as property, plant and equipment.

i) Property, plant and equipment

Property, plant and equipment items are stated at historical acquisition or construction cost less accumulated depreciation and impairment losses, when applicable.

The cost includes expenditures that are directly attributable to the acquisition of assets. The cost of assets built by the Company includes materials and direct labor, as well as any other costs attributable to bringing the assets to the location and condition requires for them to operate in the manner intended by Management, and loan costs on qualifiable assets. Borrowing costs relating to funds raised for works in progress are capitalized until the projects are concluded.

RESA and its subsidiaries perform the main maintenance activities scheduled for their manufacturing units on an annual basis. This usually occurs between the months from January to March, with the objective of inspecting and replacing components.

30

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

The main annual maintenance costs include costs of labor, materials, outsourced services and overhead allocated during the off-season period. These costs are classified as frequent replacement parts and components, in property, plant and equipment, and are fully amortized in the following crop season.

The cost of an equipment item that must be replaced on an annual basis is accounted for as a component of the equipment costs and depreciated over the following crop. The costs of normal periodic maintenance are accounted for in expenses when incurred as the replaced components do not improve the production capacity of the asset or introduce refinements in the equipment.

In RCSA, future costs to be incurred with removal of fuel storage tanks are estimated and recorded as part of the cost of property, plant and equipment, with a corresponding entry to the provision that supports such costs in liabilities (current and non-current).

Repairs and maintenance are charged to the income statement during the financial period in which they are incurred. The cost of any renewal to increase useful life should be activated and included in the asset’s book value, if it is probable that future economic benefits following the renewal will exceed the performance standard initially assessed for the existing asset and that such benefits will accrue to the Group. The main refurbishments are depreciated over remaining useful lives of related assets.

Gains and losses from divestitures are determined by the comparison of results with the book value and are recognized in the statement of income under Other operating income, net.

During the year ended on March 31, 2016 and 2015, RCSA and RESA performed an assessment of useful lives applied to its property, plant and equipment, which indicated a need for changes in useful life and annual depreciation rates for its assets.

As this involves a change in bookkeeping estimates, the effects of such changes were recorded prospectively as of April 1, 2015 and 2014, RCSA and RESA, respectively. These changes represent an extension as well as an reduction in useful life terms, depending on the case, as compared with previous practices, giving rise to an increase R$ 13,738 in depreciation expenses for the year ended on March 31, 2016 (reduction in depreciation expense in the amount of R$ 9,554 in 2015).

Land is not depreciated. On March 31, 2016, 2015 and 2014 depreciation of such assets was calculated based on estimated useful life wear and tear for each asset. The annual weighted average depreciation rates are as follows:

Class of fixed assets	2016		2015		2014
Buildings and improvements		2.37%		2.63%		4.00%
Machinery, equipment and facilities		4.76%		4.89%		4.61%
Aircrafts and vehicles		7.50%		7.41%		9.24%
Furniture and fixtures and IT equipment		12.91%		14.53%		15.01%
Other		10.00%		10.02%		9.94%

Residual values and the useful lives of material assets are reviewed and adjusted, if adequate, at the end of each year.

31

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

j) Leases

Whether a contract is, or contains, a lease is determined based on the substance of the contract at the inception date.

Under finance lease contracts where substantially all risks and rewards are transferred to the Group, incidental to ownership of the leased asset, they are capitalized at the inception of the lease at the fair value of the leased property, or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognized within borrowing costs in the statement of income. A leased asset is depreciated during its useful life or the term of the lease, the shorter of the two, save when there is evidence that the leased assets will be acquired on the agreement’s expiry.

Operating lease agreements are recognized as operating expenses in the statement of income on a straight-line basis over the term of the lease.

k) Intangible assets

(i) Goodwill

Goodwill is represented by the positive difference between the paid or payable amount for the acquisition of a business and the net fair value of assets and liabilities of the acquired company. Goodwill arising from acquisitions of subsidiaries is disclosed as “Intangible assets”. In case of finding a bargain purchase, this amount is stated as a gain in the fiscal year’s income figures, on the acquisition date.

The goodwill is recognized at cost less accumulated impairment, when applicable. Goodwill is tested annually for any impairment losses. For impairment testing purposes, goodwill acquired in a business combination is, from the acquisition date, allocated to cash-generating units of the Group that are expected to benefit from the acquisition.

(ii) Intangible assets with definite useful lives

Intangible assets with definite useful lives are carried at cost, less accumulated amortization and accumulated impairment losses, when applicable.

32

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

On March 31, 2016, 2015 and 2014 the annual weighted average amortization rates are as follows:

Class of intangible assets	Weight average rates
Software license		20%
Brands		10%
Land lease agreements		9%
Sugarcane supply agreements		10%
Contractual relationships with clients (a)		4%
Exclusive supply rights (b)		12%
Public concession rights of use		20%
Other		29%

(a) Contractual relationships with clients

Contractual relationships with clients acquired in a business combination are recognized at fair value on the acquisition date. Contractual relationships with clients have a finite useful life and are recorded at cost less accumulated amortization. Amortization is calculated using the straight-line method over the expected useful life of the client relationship.

(b) Exclusive supply rights

This is equal to bonuses granted to clients (Note 12), and will depend on terms and future performance, in particular of the volumes as provided in supply agreements. Inasmuch as contractual conditions are met, bonuses are amortized and recognized in the income figures, in Taxes, deductions and rebates on sales (Note 19).

l) Impairment of non-financial assets:

The Group assesses every year whether there are indicators of an asset’s loss of value. In the event such indicators are identified, the Group estimates the asset’s recoverable amount. The recoverable value of an asset is the greater among: (a) fair value less costs that would be incurred to sell it and (b) its value in use. When required, value in use is usually determined based on the discounted cash flow (before taxes) from the continued use of the asset until the end of its useful life.

Regardless of the existence of impairment indicators, goodwill and intangible assets with an indefinite useful life, if any, are tested for impairment at least once a year.

When the carrying amount of an asset exceeds its recoverable amount, the loss is recognized as an operating expense in the statement of income.

m) Provisions

Provisions are recognized when: (i) the Group has a present legal or constructive obligation as a result of past events; (ii) it is likely that an outflow of funds will be required to settle the obligation; and (iii) the amount can be reliably estimated.

33

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

n) Employee benefits

The Group has a defined contribution and partial defined benefit plan, in which maintains a private pension plan for all of its employees.

The Group recognizes a liability based on a methodology that considers a number of factors determined by actuarial estimates, which employ assumptions for defining pension plan costs (income).

Actuarial gains and losses arising from adjustments due to experience and in changes in actuarial assumptions are stated directly in net assets as other comprehensive income, when they occur.

Past costs of services are immediately recognized in the statement of income.

The Group recognizes a provision when it is contractually compelled or when there is a past practice that created a constructive obligation.

o) Income and social contribution taxes

Income (expenses) tax and social contribution expenses of the year include current and deferred taxes. Income taxes are recognized in the statement of income, except to the extent they are related to items directly recognized in equity or in other comprehensive income, when applicable. In that case, the tax is also recorded in equity or in other comprehensive income.

The current and deferred income tax and social contribution charge is calculated based on enacted, or substantially enacted, tax acts, at the reporting date of countries in which the Group’s entities operate and generate taxable income. Management periodically evaluates the positions taken by the Group in the calculations of income tax with respect to situations in which applicable tax regulation is subject to interpretations; and establishes provisions when appropriate, on the basis of amounts expected to be paid to the tax authorities.

Income tax is computed on taxable income at the rate of 15%, plus a 10% surtax for income exceeding R$ 240 in the 12-month period, whereas social contribution is computed at the rate of 9% on taxable income, recognized on the accrual basis. That is, on a compound basis, the Group is subject to a theoretical tax rate equivalent to 34%.

Deferred income tax and social contribution in connection with tax losses, social contribution negative base and temporary differences are shown as net in the statement of financial position when there is a legal right and an intention to offset these on calculation current taxes related with the same legal entity and the same tax authority. Accordingly, deferred tax assets and liabilities in different entities or countries are in general presented separately, and not at net value. Deferred taxes are calculated based on the tax rates in force when they are realized or reviewed annually.

34

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

Tax assets are only recognized to the extent that it is probable that future taxable income will be available against which these temporary differences can be offset.

Prepayments or current amounts that can be offset are presented in current and non-current assets, in accordance with their expected realization.

p) Share capital and remuneration to shareholders

The share capital is comprised of common and preferred shares. Incremental expenses attributed directly to share issues, if any, are shown as a deduction from equity, as an additional capital contribution, net of tax effects.

In the parent companies RESA and RCSA, the only existing class A preferred share as well as each common share, is entitled to one vote on resolutions by each company’s shareholders’ meetings, as well as R$ 0.01 (one cent) fixed annual dividends. Such voting rights are restricted to subsidiaries and not to the Group.

Class B and C preferred shares issued by RESA and RCSA are intended to refund assets, chiefly represented by tax benefits contributed by shareholders Cosan and Shell respectively, as these are employed by the Group.

Class D preferred shares have no voting rights and are entitled to a fixed annual dividend in RESA as well as in RCSA, to shareholder Shell. Shareholder compensation will take place in the form of dividends and/or interest on own capital, based on the limitations defined in RESA and RCSA company Bylaws and in legislation in force.

Class E preferred shares issued by RESA and RCSA have voting rights and are entitled to a fixed annual dividend to shareholder Shell. Shareholder compensation will take place in the form of dividends and/or interest on own capital, based on the limitations defined in RCSA company Bylaws and in legislation in force.

q) Business combinations

Business combinations are accounted for according to the acquisition method and, assets, liabilities and contingent liabilities identifiable of the company or acquired business are measured at fair value for the purposes of calculation and recognition of the goodwill arising on the transaction in accordance with effective accounting standards. Goodwill represents the surplus of acquisition cost in view of the Group’s interest in fair value, net of identifiable assets, liabilities and contingent liabilities in the company acquired. If consideration is lower than fair value of assets, liabilities and contingent liabilities acquired, the difference must be recognized in statement of income.

r) Environmental issues

The group reduces risks in connection with environmental issues by means of operating procedures and controls and investments in equipment and pollution control systems. The Group recognizes a provision for losses with environmental expenditures inasmuch as it is necessary to undertake remedial actions for the damages caused.

35

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

2.4 New IFRS and IFRIC Interpretations (IASB Financial Reporting Interpretations Committee) applicable to financial information

The following new standards and interpretations were issued by the IASB but are not yet effective for the year ended March 31, 2016. Early adoption of standards, although encouraged by the IASB, is not permitted in Brazil by the Brazilian Accounting Pronouncements Committee (CPC).

IFRS 9—Financial instruments. It covers the classification, measuring and the recognition of financial assets and liabilities. The full version of IFRS 9 was published in July 2014, effective as of January 1, 2018. Management is evaluating the full impact of its adoption.

IFRS 15—Income from contracts with clients. This new standard provides the principles that an entity applies to determine the measurement of revenue and when will be recognized. The standard will become effective as of January 1, 2018 and supersedes IAS 11—Construction Contracts and IAS 18—Income and their related interpretations. Management is evaluating the full impact of its adoption.

IAS 16—Fixed Assets and IAS 41—Agriculture. Main change is that bearer biological assets, such as fruit trees and sugarcane stubble are out of IAS 41 scope and must be accounted in accordance with IAS 16, which is cost less accumulated amortization and possible impairment losses. Consumable biological assets such as sugarcane and fruits in the field should be defined at fair value and continue in the scope of IAS 41. On April 1, 2016 a relevant restating is expected of Biological assets to property, plant and equipment, with regard to the values related to sugar-cane stubble. Moreover, the difference of the capital gain between April 1, 2014, date of transition of the above mentioned changes, and March 31, 2016, allocated to the sugar cane stubble, will be reversed against Retained earnings in Equity. The Group is working on determining the effects that will be presented in the first quarter of 2016 return of the 2016/2017 crop, tends to be between R$ 900,000 and R$ 1,400,000 to the assets reclassification and R$ 150,000 and R$ 250,000 to the fair value reversal.

IFRS 16—Leasing. IFRS 16 requires that an entity should recognize that any leasing in which the Group is a lessee should be stated in the statement of financial position. The new standard is applicable beginning on or after January 1, 2019 and replaces the IAS 17—Leases. Management is evaluating the full impact of its adoption.

There are no other IFRS or IFRIC interpretations that are not yet effective and that are expected to have a significant impact on the Group.

36

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

3. Cash and cash equivalents

	2016		2015
Funds in banks and in cash		777,931		355,367
Values awaiting foreign exchange closure(1)		84,599		2,062
Interest earnings bank deposits:
Investment Funds(2)		1,714,891		1,274,554
Bank deposit certificate (CDB) and commitments(3)		1,615,069		2,234,988
Time deposit(4)		177,951		159,684
Other investments		2,190		1,575
		3,510,101		3,670,801
		4,372,631		4,028,230
Domestic (domestic currency)		3,527,520		3,618,802
Abroad (foreign currency)		845,111		409,428
		4,372,631		4,028,230

⁽¹⁾ Refer basically to receiving foreign currency funds from overseas clients, for which obtaining foreign exchange from financial institutions was not yet concluded until the reporting date, and also refer to funds intended to settle debts related to export performance.

⁽²⁾  Refer to investments in fixed income funds managed by first-class financial institutions, divided into quotas with daily earnings. As of March 31, 2016, the average yield on investment funds was 99.6% of the interbank deposit certificate (CDI) (99.9% in 2015 and 100.9% in 2014).

⁽³⁾  Refer to fixed income investments such as CDBs (Bank Certificates of Deposits) and Repurchase Agreements in first-class financial institutions and that yield on average 101.3% of the CDI (Interbank) rate (102.0% in 2015 and 102.1% in 2014).

⁽⁴⁾  Refer to interbank deposits in the overseas market. Are subject to fixed terms and are not negotiable to maturity. These are held in first-class institutions, have an average 10-day term and yield on average 0.43% per annum in foreign currency.

4. Restricted cash

	2016		2015
Financial investments linked to financing(1)		62,302		45,829
Short-term investments related to derivative transactions(2)		136,116		54,831
Margin on derivative operations(3)		676,187		87,964
		874,605		188,624
Domestic (domestic currency)		203,391		157,973
Abroad (foreign currency)		671,214		30,651
		874,605		188,624

⁽¹⁾  LFTs (Letra Financeira do Tesouro), held by virtue of National Bank for Social and Economic Development—BNDES financing and with redemption subject to payment of certain portions of the mentioned financing.

⁽²⁾  Refer to short-term investments such as CDBs and overseas public bonds with first-class financial institutions, employed as warranties in transactions with derivative instruments.

⁽³⁾  Margin deposits in derivative transactions refer to margin requirements by counterparts in transactions with derivative instruments, and are exposed to US dollar exchange fluctuations (Note 23.d). The balance increase is a result of an increase in the volume of sugar set at 2,805 thousand tons at March 31, 2016 (1,483 thousand tons in 2015).

37

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

5. Trade accounts receivable

	2016			2015
Accounts receivable—Domestic		1,724,696			1,545,458
Accounts receivable abroad		119,822			130,575
Funding to clients(i)		420,434			407,311
Allowance for doubtful accounts		(200,585	)		(179,916	)
		2,064,367			1,903,428
Current		(1,758,781	)		(1,605,174	)
Non-current		305,586			298,254

(i) Client financing consists of the payment in installments of outstanding debts and sales of properties, as well as financing agreements backed by security interest, pledges and endorsements whose main purpose is the setup or modernization of gas stations. Finance charges and repayment deadlines are agreed by contract and set according to a business assessment of each negotiation.

The Group did not pledge any trade or other receivable to secure financial transactions.

The maximum exposure to credit risk on the statement of financial position date is the book value of each of the types of accounts receivable mentioned above.

The aging schedule of trade and other receivables and client financing is as follows:

	2016		2015
Falling due		1,828,791		1,741,808
Overdue—in days
Up to 30		53,217		61,318
From 31-90		70,851		29,093
Over 90		312,093		251,125
		2,264,952		2,083,344

The Group has security interests such as mortgages and letters of credit, for payment of long overdue trade and other receivables which have not been provided for.

The provisions for allowance of doubtful was estimated based on credit risk analyses, that contemplates the historic losses, the situation of each customers, the situation of each economic group they belong, the guarantee in reais for debts and law assessors evaluation, and it is considerate enough by Group Management to cover possible losses on accounts receivables.

38

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

Changes in the allowance for doubtful accounts are as follows:

March 31, 2013	(180,401	)
Provision	(13,893	)
Reversal	19,645
March 31, 2014	(174,649	)
Provision	(36,764	)
Reversal	31,497
March 31, 2015	(179,916	)
Provision	(59,713	)
Reversal	38,828
Foreign exchange variation	216
March 31, 2016	(200,585	)

6. Inventories

	2016			2015
Finished goods:
Ethanol		387,591			260,188
Sugar		40,460			34,996
Diesel		436,649			448,194
Gasoline		500,198			424,085
Jet fuel (Jet A-1)		62,469			76,229
Other fuels		9,597			15,377
Storeroom and others		258,501			190,845
Provision for net realizable value and obsolescence		(18,134	)		(15,967	)
		1,677,331			1,433,947

The changes in the provision for net realizable value and obsolescence is as follows and was recognized in the statement of income in the Cost of goods sold and services provided line:

March 31, 2013	(11,487	)
Provision	(2,611	)
Reversal	3,921
March 31, 2014	(10,177	)
Provision	(10,222	)
Reversal	4,432
March 31, 2015	(15,967	)
Provision	(11,498	)
Reversal	9,331
March 31, 2016	(18,134	)

39

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

7. Other financial assets

	2016			2015
Credits from indemnity suits(1)		828,250			479,556
National Treasury Certificates (CTN)(2)		627,219			501,794
Other		1			1
		1,455,470			981,351
Current		(10,028	)		(12,931	)
Non-current		1,445,442			968,420

⁽¹⁾  Receivables from lawsuits on which a final judgment favorable to RESA was passed in February 2007, December 2013 and 2015, which are not part of the net assets contributed by Cosan to set up the Group. Therefore, RESA recognized a liability in the same amount, classified as current and non-current in the related parties account, given that RESA has the obligation to reimburse those receivables to Cosan when they are actually collected. These credits yield IPCA and Selic plus interest rate of 6% per year. In December 2015 RESA recognized the sum of R$ 349,715 in connection with a credit from an indemnity suit and judicial bonds. This transaction did not and will not have any impact on RESA’s results.

⁽²⁾  Brazilian Treasury Certificates are government bonds issued by the Brazilian Treasury within the Special Agriculture Industry Securitization Program—PESA, with a 20-year original maturity (falling due between 2018 and 2025) and which pledged to secure its related financing transaction called PESA. These bonds bear annual compound interest of 12%, plus the IGP-M (General Market Price Index). Their value on maturity date will match the principal of the debt due under PESA and may be used for settlement.

40

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

8. Related parties

a) Summary of balances with related parties

	2016			2015
Assets
Framework agreement (1)
Shell Brazil Holding B.V.		508,345			519,159
Cosan S.A. Indústria e Comércio		324,718			442,511
Shell Brasil Petróleo Ltda.		39,984			37,292
Other		9,083			7,344
		882,130			1,006,306
Commercial operations (2)
Rumo Group / ALL (f)		114,087			9,018
Nova América Agrícola Caarapó Ltda.		75,334			69,787
Shell Aviation Limited (Nota 23.d)		66,576			97,682
Agroterenas S.A.		27,662			26,701
Cosan S.A. Indústria e Comércio		7,542			7,075
Philipinas Shell Petroleum Corp. (Nota 23.d)		5,958			4,240
Other		20,704			20,998
		317,863			235,501
Paid-in capital
Sapore S.A.		5,000			7,200
IB Sabbá S.A.		—			1,756
		5,000			8,956
		1,204,993			1,250,763
Current assets		(491,358	)		(334,697	)
Non-current assets		713,635			916,066

41

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

	2016			2015
Liabilities
Framework agreement (1)
Cosan S.A. Indústria e Comércio		1,059,048			668,357
Shell Brasil Petróleo Ltda.		71,749			53,128
Shell Brazil Holding B.V.		48,357			55,330
Other		233			358
		1,179,387			777,173
Financial operations
Cosan S.A. Indústria e Comércio		9,672			9,672
Sapore S.A.		22			—
		9,694			9,672
Commercial operations (2)
Shell Trading US Company (Note 23.d)		179,987			—
Shell Western Supply and Trading (Note 23.d)		—			109,466
Agroterenas S.A.		42,923			10,008
Nova América Agrícola Ltda.		26,077			8,317
Cosan Operadora Portuaria S/A		20,407			11,343
Nova América Agrícola Caarapó Ltda.		17,963			7,069
Shell Aviation Limited (Note 23.d)		1,341			1,687
Other		38,805			17,863
		327,503			165,753
Preferred shares (3)
Shell Brazil Holding B.V.		494,430			152,340
Cosan S.A. Indústria e Comércio		89,762			89,762
		584,192			242,102
Corporate restructuring
CTC—Centro de Tecnologia Canavieira		609			—
		609			—
		2,101,385			1,194,700
Current liabilities		(860,940	)		(262,269	)
Non-current liabilities		1,240,405			932,431

42

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

(1) Framework agreement

On March 31, 2016 and 2015, the sums stated in assets and liabilities refer to refundable values chargeable to shareholders, existing prior to the creation of Raízen, when actually realized or settled.

(2) Commercial operations

On March 31, 2016, the sum stated in assets of R$ 317,863 (R$ 235,501 in 2015) refers to transactions for the sale of goods, such as gasoline, diesel, jet fuel, sugar and ethanol.

On March 31, 2016, the sum stated in liabilities of R$ 327,503 (R$ 165,753 in 2015) refers to transactions for the purchase of goods and the provision of services, such as ethanol, diesel, gasoline, sugar, sugar-cane, highway and railway cargoes and warehousing.

(3) Preferred shares

Upon formation of the Group entities, Shell and Cosan have agreed that each of the ventures shall be reimbursed when tax credits already existing on entities that were contributed to the Group are effectively utilized by the Group, mostly NOLs and tax benefits on goodwill amortization (“GW”). Reimbursement shall occur through distribution of disproportionate dividends to holders of C and E class preferred shares (liability instrument).

In the Common Shareholders’ Meeting (“AGO”) held on July 28, 2014, RESA shareholders resolved to approve payment of R$ 42,381, i.e. R$ 1,255 below that stated on March 31, 2014. RESA made payment regarding the mentioned preferred shares on July 29, 2014. Moreover, in the Shareholders’ Meeting held on that same date, RCSA shareholders approved a payment of this same nature of R$ 15,126.

During the year ended March 31, 2015, Raízen concurred with the federal tax authorities’ Refis IV program for settling debts in installments, with the use of NOL. Hence, Raízen used NOL balances partially owned by Cosan prior to the Group’s creation, which resulted in writing off R$ 157,010 of the mentioned preferred shares. The amount utilized of NOL credits owned by Cosan was approximately R$ 171,750, of which R$ 14,740 had no preferred shares recognized, as such credits had not been recorded prior to the Group’s creation due to the absence of their probable use at that time.

Furthermore, during the year ended March 31, 2015 RCSA paid out R$ 30,253 in exclusive dividends of preferred shares to Cosan, paid in full during the mentioned period.

On March 31, 2015 RESA proposed allocating R$ 15,221 in dividends to the holders of class B preferred shares, in connection with the partial use of the tax benefit balance for the period then ended.

43

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

During the year ended March 31, 2016, tax credits recognized in RCSA, tax credits originated from IRPJ and CSLL overpayments from January 2010 to May 2011 were recognized in the amount of R$ 258,250 (Note 15.b) (current), as well as supplement to NOL and goodwill balances contributed by Shell to RCSA, in the amount of R$ 78,124 (Note 15.e) (non-current), calculated in the same period, totaling R$ 336,374.

Tax credits that arose from overpayment of IRPJ and CSLL (current) are updated according to the Selic interest rate as of the date of recognition. During the year ended March 31, 2016, the update of the referred credits amounted R$ 5,715.

On March 31, 2016 RCSA created a R$ 138,070 provision for dividends payable related to the use of Shell’s NOL and GW with regard to the 2015 calendar year, by means of a reduction in the capital reserve (Note 18.b).

Furthermore, RESA also owes R$ 89,762 an NOL and Goodwill tax benefit balance payable to Cosan, when actually used.

Based on the merger of Ispagnac Participações Ltda. (“IPL”) by REPSA and subsequently by RESA, occurred on November 30, 2012, class C preferred shares were issued in order to secure an exclusive dividend base for Shell, the benefit’s exclusive originator totaling R$ 3,538.

44

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

b) Summary of related-party transactions (g)

	2016			2015			2014
Sale of products
Shell Aviation Limited		956,499			1,227,690			1,226,670
Rumo Group / ALL (f)		647,791			387			—
Agricopel Group		404,747			395,371			382,670
Philipinas Shell Petroleum Corp.		99,736			82,396			80,294
Shell Trading US Company		71,188			154,425			15,443
Shell Western Supply and Trading		10,300			139,470			248,294
Other		184,806			52,358			1,458
		2,375,067			2,052,097			1,954,829
Purchase of goods and services
Rumo Group / ALL (f)		(488,487	)		(298,553	)		(362,023	)
Agroterenas S.A.		(248,133	)		(170,634	)		(166,669	)
Nova América Agrícola Ltda.		(182,914	)		(143,867	)		(139,346	)
Nova América Agrícola Caarapó Ltda.		(110,230	)		(94,897	)		(80,637	)
Agricopel Group		(40,030	)		(32,911	)		(19,657	)
Other		(227,003	)		(126,288	)		(22,025	)
		(1,296,797	)		(867,150	)		(790,357	)
Renewed collection of shared expenses (a)
Companhia de Gás de São Paulo		26,264			23,221			—
Rumo Group / ALL (f)		13,380			5,330			5,723
Cosan Lubrificantes e Especialidades S.A.		5,375			4,518			4,929
Cosan S.A. Indústria e Comércio		]3,954			4,330			4,247
Other		2,314			1,824			1,705
		51,287			39,223			16,604
Land leases (b)
Radar Group		(60,177	)		(57,596	)		(54,945	)
Aguassanta Group		(26,803	)		(32,386	)		(28,627	)
Tellus Group		(16,232	)		—			—
Janus Brasil Participações S.A.		(7,636	)		—			—
		(110,848	)		(89,982	)		(83,572	)
Financial income (expense) (c)
Shell Brazil Holding B.V.		—			(3	)		12,516
Nova América Agrícola Caarapó Ltda.		9,318			5,299			1,481
Agroterenas S.A.		3,397			2,557			894
Shell Finance B.V.		(5,478	)		(5,640	)		(4,361	)
Other		(2,125	)		(2,804	)		1,945
		5,112			(591	)		12,475
Service income (d)
Shell Brasil Petróleo Ltda.		18,236			2,285			27,092
Other		755			—			195
		18,991			2,285			27,287
Service expenses (e)
Shell Brasil Petróleo Ltda.		(14,117	)		(3,859	)		(8,923	)
Shell International Petroleum		(5,297	)		(3,743	)		(3,229	)
Other		(2,713	)		(1,233	)		—
		(22,127	)		(8,835	)		(12,152	)

(a) Reimbursement of shared expenses consists of expenses incurred by shared corporate, managerial and operating costs reimbursed from related parties; (b) Leased land consists of expenses incurred with land leased from related parties; (c) Finance expenses basically consist of expenses incurred with commissions on available credit facilities and inflation adjustment of the balances of advances granted to finance sugar cane crops; (d) Service revenues consist of commissions on the sales of lubricants to Shell; (e) Service expenses consist of expenses incurred with technical support, billing and collection, commissions on the sale of jet fuel and secondees from Shell; (f) On April 1, 2015 Cosan acquired through its subsidiary Rumo Logística Operadora Multimodal S.A., 100% of the common shares in América Latina Logística S.A (“ALL”), creating a relationship by the Rumo/ALL Group with the Group; and (g) Transactions with related parties are entered into under reasonable and cumulative conditions, in line with those prevailing in the market or that the Company would contract with third parties.

45

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

c) Directors and members of the Board of Directors

Fixed and variable compensation pay to key management personnel, including directors and members of the Board of Directors that is recognized in the statement of income as follows:

	2016		2015		2014
Regular remuneration		42,362		42,226		37,743
Bonuses and other variable compensation		63,461		31,488		31,803
Total compensation		105,823		73,714		69,546

d) Other significant information involving related parties

Committed Back-up Credit Facility Agreement

The Group is a beneficiary of a US$ 500,000 thousand Revolving Committed Back-up Credit Facility Agreement granted by Shell Finance (Netherlands) B.V. and Cosan S.A. Indústria e Comércio. As of March 31, 2016 the mentioned credit facility had not been used.

46

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

9. Investments

	Investments(1)												Equity in net income of subsidiaries
	Country		Business		Percentage of Interest			2016		2015			2016			2015			2014
Book value
Centro de Tecnologia Canavieira S.A.		Brazil		R&D		21.50	%		88,483		68,574			1,840			1,962			(3,645	)
Codexis Inc.(2)		United States		R&D		—			—		—			—			(6,684	)		(14,225	)
Logum Logística S.A.		Brazil		Logistics		20.00	%		53,687		64,370			(46,829	)		(29,054	)		(16,385	)
Uniduto Logística S.A.		Brazil		Logistics		46.48	%		12,740		30,587			(25,514	)		(161	)		(179	)
Serviços e Tecnologia de Pagamentos S.A.(6)		Brazil		Payment options		10.00	%		—		27,257			11,227			20,016			10,080
Other		—		—		—			—		—			(2,752	)		—			—
									154,910		190,788			(62,028	)		(13,921	)		(24,354	)
Appreciation of assets, net assigned
Serviços e Tecnologia de Pagamentos S.A.(6)									—		47,284			(3,862	)		(6,320	)		—
Subtotal									—		47,284			(3,862	)		(6,320	)		—
Investment goodwill(3)
In Uniduto Logística S.A.									5,676		5,676			—			—			—
In the Centro de Tecnologia Canavieira S.A.									49,839		41,379			—			—			—
In Serviços e Tecnologia de Pagamentos S.A.(6)									—		184,436			—			—			—
Subtotal									55,515		231,491			—			—			—
Total investments									210,425		469,563			(65,890	)		(20,241	)		(24,354	)
Provision for negative equity(4)
Other(5)									—		(2,653	)		(1	)		(1	)		(1	)
Total provision for unsecured liability									—		(2,653	)		(1	)		(1	)		(1	)
														(65,891	)		(20,242	)		(24,355	)

⁽¹⁾ Investments accounted for under the equity method;

⁽²⁾  As of March 10, 2015, RESA sold all of its Codexis shares;

⁽³⁾  Goodwill on acquisition and transfer of shares;

⁽⁴⁾  Classified in the non-current liabilities;

⁽⁵⁾  From June 30, 2015, RESA has been consolidated Unimodal Ltda.; and,

⁽⁶⁾  As of March 14, 2016, RCSA sold all of its STP shares, subject to some preceding conditions. The investment was reclassified as assets held for sale. See Note 9.b.i below.

47

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

Investment transactions in associated companies without considering the provision for the negative equity is as follows:

March 31, 2013	267,489
Equity in net income of subsidiaries	(24,355	)
Acquisition of STP (Note 26)	250,000
Additions to the investment	33,024
Investment goodwill	204
Write-offs	(23,900	)
Allocation to intangible assets(1)	(61,629	)
Dividends receivable	(4,369	)
Other	(18,487	)
March 31, 2014	417,977
Equity in net income of subsidiaries	(20,241	)
Additions to the investment	58,964
Dividends receivable	(10,430	)
Capital gain due to dilution of corporate interest	30,333
Transfer to other financial assets	(8,147	)
Other	1,107
March 31, 2015	469,563
Equity in net income of subsidiaries	(65,891	)
Additions to the investment	48,914
Investment goodwill	8,458
Dividends receivable	(23,256	)
Capital gain due to dilution of corporate interest	15,583
Transfer to other financial assets (Note 9.b.i)	(243,086	)
Other	140
March 31, 2016	210,425

⁽¹⁾  Technology agreements for the production of second generation ethanol (“E2G”) from Codexis Inc.

a) Summary financial information on investments

i) The main associated companies’ accounts, are as follows:

• March 31, 2016

	Logum Logística S.A. (1)/(2)			Uniduto Logística Ltda. (1)/(2)			Centro de Tecnologia Canavieira S.A. (2)			Iogen Energy Corp. (3)
Assets		2,505,051			85,080			695,961			39,950
Liabilities		(2,236,615	)		(3,068	)		(265,120	)		(293,184	)
Equity		268,436			82,012			430,841			(253,234	)
								��
Net operating income		120,041			—			78,332			—
Net income (loss)		(234,147	)		(299	)		3,021			(4,972	)

48

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

• March 31, 2015

	Logum Logística S.A. (1)/(2)			Uniduto Logística Ltda. (1)/(2)			Centro de Tecnologia Canavieira S.A. (2)			Unimodal Ltda.(1)			Iogen Energy Corp. (3)			Serviços e Tecnologia de Pagamentos (1)/(2)
Assets		2,049,903			65,810			454,036			—			48,652			1,197,732
Liabilities		(1,728,055	)		(4	)		(126,403	)		(3,617	)		(283,746	)		(925,164	)
Equity		321,848			65,806			327,633			(3,617	)		(235,094	)		272,568
Net operating income		41,479			—			75,093			—			—			671,749
Net income (loss)		(145,266	)		(346	)		499			(15	)		(15,377	)		200,164

• March 31, 2014

	Logum Logística S.A.(1)/(2)			Uniduto Logística S.A.(1)/(2)			Codexis, Inc, (1)/(2)			Centro de Tecnologia Canavieira S.A.(2)			Unimodal Ltda			Iogen Energy Corporation (3)			Services and Payment Technologies (1)/(2)
Assets		1,752,011			43,650			137,839			271,262			1			45,765			960,034
Liabilities		(1,504,533	)		(9	)		(40,661	)		(117,387	)		(3,603	)		(231,162	)		(783,330	)
Shareholders’ equity		247,478			43,641			97,178			153,875			(3,602	)		(185,397	)		176,704
Net operating income		3,500			—			68,913			56,875			—			—			299,855
Net income (loss)		(117,148	)		(395	)		(89,165	)		(910	)		—			(1,904	)		100,801

⁽¹⁾  The fiscal year of these investees is on December 31;

⁽²⁾  Significant influence over these companies has been defined, mainly, based on the Group’s right to elect key management personnel and to decide on their significant operational and some strategic issues;

⁽³⁾  Jointly controlled entity in which the Group participation is 50% in common shares, whose fiscal year ends on August 31. RESA did not recognize a provision for shareholders’ deficit or share of loss of equity-accounted investees, given that it has no legal or constructive obligations to make payments on account of that company.

b) Investment transactions in associated companies

Occurred in the year ended March 31, 2016

(i) Disposal of corporate interest in STP

By means of a share purchase and sale agreement on March 14, 2016, shareholders of STP sold 100% of shares in the share capital of STP to DBTRANS Administração de Meios de Pagamentos Ltda. for R$ 4,086,000, of which R$ 408,600 will be paid to RCSA for 10% of its interest, when contractual conditions are met.

As concluding this transaction is subject to compliance with certain contractual clauses, including approval by the anti-monopolies official body (Conselho Administrativo de Defesa Econômica—CADE), the Company has not yet derecognized the assets nor recognized the transaction’s gain, yet it reclassified the R$ 243,086 carrying amount of the investment to current assets, to the line item Assets held for sale.

49

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

ii) Increase in capital of Logum Logística S.A. (“Logum”)

During the period ended on March 31, 2015 capital increases by the Company were resolved and approved totaling R$ 180,000 by means of cash contributions. The amounts subscribed and paid in 2016 by the Group in these operations totaled R$ 36,000.

In these operations, there were no variations in the percentage of participation in the share capital of the investee, since all shareholders effected capital contributions in proportion to their existing holding.

(iii) Increase in capital of Uniduto Logística S.A. (“Uniduto”)

During the year ended March 31, 2015 capital increases by the Company were resolved and approved totaling R$ 16,500 by means of cash contributions. The amounts subscribed and paid in 2016 by the Group in these operations totaled R$ 7,668.

In these operations, there were no variations in the percentage of participation in the share capital of the investee, since all shareholders effected capital contributions in proportion to their existing holding.

(iv) Centro de Tecnologia Canavieira S.A. (“CTC”)

(a) Share transfers

On April 13, 2015, RESA, through its subsidiary Raízen Tarumã Ltda. (“Tarumã”) received a transfer of 4,236 shares from CTC, valued at R$ 8,250, of the company Sabarálcool S.A.—Açúcar e Álcool, as a partial payment of a debt that had with Tarumã, and the CTC’s interest in share capital now totals 0.5899%. Therefore, Tarumã recognized an increase in its investment and goodwill in the amount of R$ 1,933 and R$ 6,317, respectively under Investments.

After the transaction, RESA has a direct and indirect participation in the share capital of CTC of 21.52%.

(b) Capital increase

During the Special Shareholders’ Meeting held on February 24, 2016 a R$ 94,589 capital increase was approved by CTC shareholders, through an issue of 41,869 new common shares. The sum underwritten by RESA for this transaction totaled R$ 2,624 equal to 1151 common shares, with R$ 2,031 paid in on March 28, 2016 and R$ 593 paid in on April 1, 2016. Hence, RESA recognized investment and goodwill totaling R$ 540 and R$ 2,084 respectively in the line item Investments.

As provided for in the CTC shareholders’ agreement, in this transaction RESA and all other shareholders waived 89.83% of their pre-emptive rights to underwrite CTC shares. Hence, its ownership interest in the share capital of this investee dropped from 20.93% to 19.92%, thus creating a R$ 15,121 capital gain by diluting the corporate interest, recognized in the line item Other operating income, net (Note 21).

50

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

(c) Capital increase by Tarumã, a RESA subsidiary

In the CTC capital increase dated February 24, 2016 as shown the above item, Tarumã underwrote R$ 73 equal to 32 common shares, with R$ 57 paid in on March 28, 2016 and R$ 16 paid in on April 1, 2016. Hence, Tarumã recognized investment and goodwill totaling R$ 16 and R$ 57 respectively in the line item Investments.

Based on the waiver of pre-emptive rights to underwrite CTC shares, also mentioned above in item (b), Tarumã reduced its ownership interest in CTC from 0.59% to 0.57%, thus creating a R$ 462 share capital gain by diluting the corporate interest, recognized in the line item Other operating income, net (Note 21).

(v) Capital increase in Iogen Energy Corporation

On March 8, 2016, RESA made a R$ 2,757 capital contribution to this associated company, equal to CAD 1000 thousand and entirely underwritten and paid in.

Occurred in the year ended March 31, 2015

(i) Increase in capital of Logum

On May 23, 2014 during a Logum investee’s Board of Directors’ Meeting (“RCA”), a R$ 81,230 capital increase was resolved and approved through the issue of 231,830,850 new common shares. The sum underwritten and paid in by RESA in this transaction totaled R$ 16,246, equal to 46,366,170 common shares.

On July 30, 2014 during a Board of Directors’ Meeting, the company’s R$ 52,857 capital increase was resolved and approved through the issue of 155,644,876 new common shares. The sum underwritten and paid in by RESA in this transaction totaled R$ 10,572, equal to 31,128,975 common shares.

On November 3, 2014 during a Board of Directors’ Meeting, the company’s R$ 65,527 capital increase was resolved and approved through the issue of 234,025,000 new common shares. The sum underwritten and paid in by RESA in this transaction totaled R$ 13,105, equal to 46,805,000 common shares.

On March 13, 2015 during a Board of Directors’ Meeting, the company’s R$ 20,000 capital increase was resolved and approved through the issue of 80,000,000 new common shares. The sum underwritten and paid in by the Company in this transaction totaled R$ 4,000, equal to 16,000,000 common shares.

In these operations abovementioned, there were no variations in the percentage of participation in the share capital of the investee, since all shareholders effected capital contributions in proportion to their existing holding.

(ii) Increase in capital of Uniduto

On May 20, 2014 during a Uniduto investee’s Board of Directors’ Meeting, a R$ 8,573 capital increase was resolved and approved through the issue of 30,303,995 new common shares. The sum underwritten and paid in by RESA in this transaction totaled R$ 3,891, equal to 14,085,297 common shares.

51

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

On July 31, 2014 during a Board of Directors’ Meeting, the company’s R$ 5,286 capital increase was resolved and approved through the issue of 18,790,260 new common shares. The sum underwritten and paid in by RESA in this transaction totaled R$ 2,457, equal to 8,732,904 common shares.

On November 03, 2014 during a Board of Directors’ Meeting, the company’s R$ 6,553 capital increase was resolved and approved through the issue of 23,327,519 new common shares. The sum underwritten and paid in by RESA in this transaction totaled R$ 3,045, equal to 10,842,631 common shares.

On March 11, 2015 during a Board of Directors’ Meeting, the company’s R$ 2,300 capital increase was resolved and approved through the issue of 8,193,800 new common shares. The sum underwritten and paid in by the Company in this transaction totaled R$ 1,069, equal to 3,808,478 common shares.

In these operations abovementioned, there were no variations in the percentage of participation in the share capital of the investee, since all shareholders effected capital contributions in proportion to their existing holding.

(iii) Capital increase in CTC

During the Special Shareholders’ Meeting held on July 10, 2014 a R$ 165,002 capital increase was resolved and approved by CTC shareholders, through an issue of 83,741 new common shares. The sum underwritten by RESA in this transaction totaled R$ 4,579, equal to 2,324 common shares. The sum of R$ 2,291 equal to 50% of the underwritten amount was paid in on September 19, 2014, and the outstanding 50% balance was paid in on March 24, 2015. As provided for in the CTC shareholders’ agreement, in this transaction RESA waived 90.9% of its pre-emptive rights to underwrite CTC shares. Hence, its interest percentage in share capital in this investee dropped from 23.33% to 20.93%, thus creating a R$ 30,333 capital gain by diluting the corporate interest, recognized in the line item Other operating income, net (Note 21).

Occurred during the year ended March 31, 2014

(i) Logum

On September 12, 2013 during a Logum investee’s Board of Directors’ Meeting, the company’s R$ 80,000 capital increase was resolved and approved through the issue of 158,056,914 new common shares. The sum underwritten and paid in by RESA in this transaction totaled R$ 16,000, equal to 31,611,383 common shares.

In addition, on November 19, 2013 during a Logum investee’s Board of Directors’ Meeting, the company’s R$ 53,000 capital increase was resolved and approved through the issue of 117,689,804 new common shares. The sum underwritten and paid in by RESA in this transaction totaled R$ 10,600, equal to 23,537,961 common shares.

In these operations abovementioned, there were no variations in the percentage of participation in the share capital of the investee, since all shareholders effected capital contributions in proportion to their existing holding.

52

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

(ii) Uniduto

On September 9, 2013 by means of a share sale and purchase agreement, RESA acquired 528,406 common shares issued by Uniduto for R$ 354 and equal to a 0.49% ownership interest in the Company’s share capital, thus obtaining R$ 204 in goodwill in this transaction. Hence, RESA raised its ownership interest in the share capital of Uniduto to 46.47%.

On this same date during the Uniduto investee’s Board of Directors’ Meeting, an R$ 8,000 capital increase was resolved and approved by the company. The sum underwritten and paid in by RESA in this transaction totaled R$ 3,718.

In addition, on November 19, 2013 during a Uniduto investee’s Board of Directors’ Meeting, the company’s R$ 5,300 new capital increase was resolved and approved. The sum underwritten and paid in by RESA in this transaction totaled R$ 2,463.

In February 2014 RESA transferred R$ 93 in funds to Uniduto as an advance for a future capital increase.

In these operations, except for the shares acquired on September 9, 2013, there were no variations in the percentage of participation in the share capital of the investee, since all shareholders effected capital contributions in proportion to their existing holding.

10. Biological assets

As described in Note 2.1.d, the Group reviews assumptions used to calculate the fair value biological assets at each reporting date. The most recent change in pricing assumptions occurred on December 31, 2015 (and remained flat for the year end March 31, 2016 remeasurement), mainly due to increasing ATR (“Total Recoverable Sugar”) average price expectations (from R$ 0.52/kg on March 31, 2015 to R$ 0.63/kg on March 31, 2016—a weighted average of all cash flows), pursuant to sugar price and US dollar expectations.

Changes in biological assets (sugar cane) are detailed below:

	2016			2015			2014
Balance at the beginning of the year		1,959,859			2,036,693			1,978,477
Expenditures with planting(1)		249,478			385,102			399,889
Expenditures with sugar-cane care(1)		515,437			541,531			506,097
Absorption of harvested sugar-cane costs		(928,282	)		(972,128	)		(794,238	)
Change in fair value		637,481			(31,339	)		(68,772	)
Transfers and restatements		29,515			—			—
Acquisition of Cerrado (Nota 26)		—			—			15,240
Balance at the end of the year		2,463,488			1,959,859			2,036,693

⁽¹⁾  As of March 31, 2016, those expenses include the amounts of R$ 63,235 (R$ 75,222 in 2015 and R$ 67,339 in 2014), arising from the depreciation of agricultural machinery which make up the initial cost of biological assets.

53

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

Sugar cane stubble

Planted areas refer only to sugarcane plantations, and do not consider the land itself. The fair value of biological assets is classified as level 3 and the following main assumptions were used to determine the fair value using the discounted cash flow approach:

	2016		2015
Estimated harvest area (hectares)		427,768		412,738
Productivity expected (tons of sugar-cane per hectare)		80.04		75.30
Amount of ATR (kg)		130.12		132.60
Average ATR price per Kg projected (R$/Kg)		0.63		0.52

As of March 31, 2016, the discount rate used in the calculation was 7.48% per year (7.73% in 2015).

The Company’s sugarcane planting operations are exposed to variations from climate changes, pests and diseases, forest fires and other forces of nature.

Weather conditions may historically cause fluctuations in the ethanol and sugar industries and therefore in Group’s operating results because they affect crops by means of increasing or reducing harvests. Moreover, Group’s businesses are subject to seasonal fluctuations determined by the sugar cane growth cycle in Brazil’s Center-Southern region.

Sugarcane usually starts to be harvested in Brazil’s Center-Southern region between April and May every year and harvesting ends in November and December. This causes fluctuations in inventories, which are usually higher in November and December to cover off season sales (from December to April) and in gross profit, which is likely to be lower in the last quarter of the calendar year (from October to December).

54

RAÍZEN Group

Management notes to the combined and consolidated financial information

as of March 31, 2015

(In thousands of Reais, except when indicated otherwise)

11. Property, plant and equipment

• March 31, 2016

	Lands and rural properties			Buildings and improvements			Machinery, equipment and facilities			Aircrafts and vehicles			Furniture, fixtures and IT equipment			Works in progress			Frequently replaced parts and accessories			Other			Total
Cost:
March 31, 2015		683,630			1,306,857			8,598,965			641,628			192,817			1,210,469			1,118,980			53,719			13,807,065
Additions		1,952			—			38,464			2,699			278			618,569			528,876			—			1,190,838
Write-offs		(32,304	)		(16,557	)		(138,720	)		(20,665	)		(7,535	)		—			—			(1	)		(215,782	)
Transfers between cost and depreciation		—			—			—			—			—			—			(596,376	)		—			(596,376	)
Transfers(1)		—			191,029			683,806			44,908			27,291			(968,207	)		—			(751	)		(21,924	)
Provision for losses and other(2)		—			—			1,659			(3	)		(35	)		388			—			—			2,009
March 31, 2016		653,278			1,481,329			9,184,174			668,567			212,816			861,219			1,051,480			52,967			14,165,830
Accumulated depreciation:
March 31, 2015		—			(387,878	)		(2,894,330	)		(279,188	)		(122,065	)		—			(596,376	)		(30,351	)		(4,310,188	)
Depreciation for the year		—			(27,897	)		(467,407	)		(42,488	)		(22,077	)		—			(611,756	)		(4,465	)		(1,176,090	)
Write-offs		—			10,569			100,107			18,804			6,339			—			—			—			135,819
Transfers between cost and depreciation		—			—			—			—			—			—			596,376			—			596,376
Transfers(1)		—			(19,108	)		21,581			(2,609	)		(257	)		—			—			394			1
March 31, 2016		—			(424,314	)		(3,240,049	)		(305,481	)		(138,060	)		—			(611,756	)		(34,422	)		(4,754,082	)
Net book value:
March 31, 2016		653,278			1,057,015			5,944,125			363,086			74,756			861,219			439,724			18,545			9,411,748
March 31, 2015		683,630			918,979			5,704,635			362,440			70,752			1,210,469			522,604			23,368			9,496,877

⁽¹⁾  Includes transfer of current assets, in the amount of R$ 2,767 consisting of non-recoverable Value-Added Tax on Sales and Services (ICMS) credits and transfer to intangible assets (software) in the amount of R$ 24,690; and, (2) Refers mainly to the reversal for inventory loss recognized in the income statement under Other operating income, net (Note 21), in the amount of R$ 1,869.

55

RAÍZEN Group

Management notes to the combined and consolidated financial information

as of March 31, 2015

(In thousands of Reais, except when indicated otherwise)

• March 31, 2015

	Lands and rural properties			Buildings and improvements			Machinery, equipment and facilities			Aircrafts and vehicles			Furniture, fixtures and IT equipment			Works in progress			Frequently replaced parts and accessories			Other			Total
Cost:								—
March 31, 2014		721,384			1,229,330			8,091,579			579,442			183,836			1,199,134			1,047,437			49,451			13,101,593
Additions		—			—			43,075			22			555			986,133			624,883			—			1,654,668
Business combination(1)		62			478			27,120			—			—			—			—			—			27,660
Reversal of sums contributed(2)		(4,574	)		—			—			—			—			—			—			—			(4,574	)
Write-offs		(49,391	)		(15,443	)		(270,777	)		(21,942	)		(16,535	)		(71	)		—			—			(374,159	)
Transfer between cost and depreciation		—			—			(18,306	)		—			—			—			(553,340	)		—			(571,646	)
Transfers		16,149			92,492			729,463			84,106			24,279			(969,238	)		—			4,268			(18,481	)
Provision for losses and other(3)		—			—			(3,189	)		—			682			(5,489	)		—			—			(7,996	)
March 31, 2015		683,630			1,306,857			8,598,965			641,628			192,817			1,210,469			1,118,980			53,719			13,807,065
Accumulated depreciation:
March 31, 2014		—			(377,412	)		(2,703,373	)		(259,000	)		(119,227	)		—			(553,340	)		(23,190	)		(4,035,542	)
Depreciation for the year		—			(19,970	)		(451,374	)		(41,152	)		(20,982	)		—			(596,376	)		(6,657	)		(1,136,511	)
Write-offs		—			10,558			240,273			20,711			14,339			—			—			—			285,881
Transfer between cost and depreciation		—			—			18,306			—			—			—			553,340			—			571,646
Transfers		—			(1,054	)		1,838			253			3,805			—			—			(504	)		4,338
March 31, 2015		—			(387,878	)		(2,894,330	)		(279,188	)		(122,065	)		—			(596,376	)		(30,351	)		(4,310,188	)
Net book value:
March 31, 2015		683,630			918,979			5,704,635			362,440			70,752			1,210,469			522,604			23,368			9,496,877
March 31, 2014		721,384			851,918			5,388,206			320,442			64,609			1,199,134			494,097			26,261			9,066,051

⁽¹⁾  Acquisition of Latina (Note 26); (2) Reversal of sums contributed with regard to business combinations with Cosan Combustíveis e Lubrificantes S.A. (“CCL”); and, (3) Includes provision for inventory loss, recognized in the income statement under Other operating income, net (Note 21), in the amount of R$ 8,678.

56

RAÍZEN Group

Management notes to the combined and consolidated financial information

as of March 31, 2015

(In thousands of Reais, except when indicated otherwise)

• March 31, 2014

	Lands and rural properties			Buildings and improvements			Machinery, equipment and facilities			Aircrafts and vehicles			Furniture, fixtures and IT equipment			Works in progress			Frequently replaced parts and accessories			Other			Total
Cost:
March 31, 2013		831,251			1,168,693			7,443,282			481,554			178,477			977,054			1,102,438			42,685			12,225,434
Additions		—			576			51,741			—			1,504			1,240,461			561,761			—			1,856,043
Write-offs		(113,623	)		(20,449	)		(160,209	)		(10,563	)		(10,315	)		—			—			(1,410	)		(316,569	)
Transfer between cost and depreciation		—			(654	)		(4,957	)		(420	)		(41	)		(482	)		—			—			(6,554	)
Transfers		3,756			81,164			761,722			108,871			14,044			(1,017,899	)		(616,762	)		2,384			(662,720	)
Provision for losses and other(1)		—			—			—			—			167			—			—			5,792			5,959
March 31, 2014		721,384			1,229,330			8,091,579			579,442			183,836			1,199,134			1,047,437			49,451			13,101,593
Accumulated depreciation:
March 31, 2013		—			(345,063	)		(2,460,261	)		(231,741	)		(108,354	)		—			(616,762	)		(20,679	)		(3,782,860	)
Depreciation for the year		—			(46,856	)		(370,162	)		(36,498	)		(20,230	)		—			(553,340	)		(3,889	)		(1,030,975	)
Write-offs		—			13,895			121,447			9,095			8,886			—			—			1,378			154,701
Transfer between cost and depreciation		—			654			5,440			107			353			—			—			—			6,554
Transfers		—			(42	)		163			37			118			—			616,762			—			617,038
March 31, 2014		—			(377,412	)		(2,703,373	)		(259,000	)		(119,227	)		—			(553,340	)		(23,190	)		(4,035,542	)
Net book value:
March 31, 2014		721,384			851,918			5,388,206			320,442			64,609			1,199,134			494,097			26,261			9,066,051
March 31, 2013		831,251			823,630			4,983,021			249,813			70,123			977,054			485,676			22,006			8,442,574

⁽¹⁾  Includes inventory losses in the amount of R$ 1,373 and reversal for doubtful accounts in the amount of R$ 7,165 recorded as income under Other operating income, net (Note 21).

57

RAÍZEN Group

Management notes to the combined and consolidated financial information

as of March 31, 2015

(In thousands of Reais, except when indicated otherwise)

Works in progress

The balances of construction in progress consist basically of: (i) stillage concentration project; (ii) investments in expanding sugar-cane crushing; (iii) project for receiving the chopped sugar cane and separate the straw for the co-generation of energy; (iv) installation of tanks to increase ethanol storage capacity; (v) investments for industrial maintenance and improvement, agricultural automation, in addition to safety, health and environment and administrative investments; (vi) construction projects for new fuel distribution terminals and the expansion, modernization and improvement of existing terminals; (vii) investments in Shell gas stations to replace fuel pumps, make environmental adaptations, polish the image, renovate and refurbish gas station convenience stores, purchase and install furniture and equipment for the gas station convenience stores; (viii) investments in large consumer clients; (ix) investments in airports where RCSA distributes fuels, such as the acquisition of supply vehicles, expansion of the network of hydrants and points of supply, installation of the whole infrastructure of new airports and modernization and improvement of existing airports.

During the year ended March 31, 2016 a number of projects were concluded, substantially formed by the E2G project, expansion of the Paraguaçu mill, implementation of the fuel distribution terminal in Rondonópolis (MT), construction of the Marabá terminal and expansion of the Palmas terminal, involving, approximately, R$ 500,000.

Borrowing costs capitalization

During the year ended March 31, 2016 the costs of borrowings capitalized in the Group were R$ 34,923 (R$ 40,636 in 2015 and R$ 65,737 in 2014). The annual weighted average of debt charges used for capitalization of interest in the balance of construction in progress was 5.25% in 2016 (5.86% in 2015 and 5.81% in 2014).

Financial lease

As of March 31, 2016, the aircraft class includes net residual values of R$ 5,162 (R$ 5,694 in 2015 and R$ 6,662 in 2014), in which RESA is the lessee under a finance lease.

Property, plant and equipment pledged

As of March��31, 2016, loans and financing are secured by land, building and machinery in the total amount of R$ 1,581,647 (R$ 1,957,387 in 2015 and R$ 2,291,344 in 2014).

58

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

12. Intangible assets

• March 31, 2016

	Software license			Goodwill			Brands			Agricultural Partnership Agreements			Sugarcane supply agreements			Contractual relationships with clients			Exclusive supply rights			Public concession rights of use			Technology(1)			Other(2)			Total
Cost or evaluation:
March 31, 2015		326,293			1,978,031			532,341			18,411			181,516			362,834			2,206,927			12,541			179,876			31,022			5,829,792
Additions		31,017			—			7			—			—			—			537,968			—			—			—			568,992
Write-offs		(7,315	)		—			—			—			—			—			(95,586	)		—			—			—			(102,901	)
Transfer(3)		24,689			—			—			—			—			—			(18	)		—			—			—			24,671
Other		—			—			—			—			—			—			—			—			—			1,515			1,515
March 31, 2016		374,684			1,978,031			532,348			18,411			181,516			362,834			2,649,291			12,541			179,876			32,537			6,322,069
Amortization:
March 31, 2015		(226,885	)		(431,380	)		(209,810	)		(5,803	)		(55,954	)		(57,390	)		(963,223	)		(5,772	)		—			(19,130	)		(1,975,347	)
Amortization in the year		(32,546	)		—			(55,633	)		(3,224	)		(11,508	)		(18,748	)		(309,898	)		(2,506	)		(17,988	)		(3,736	)		(455,787	)
Write-offs		6,195			—			—			—			—			—			95,586			—			—			—			101,781
Transfer(3)		(1	)		—			—			—			—			—			76			—			—			—			75
March 31, 2016		(253,237	)		(431,380	)		(265,443	)		(9,027	)		(67,462	)		(76,138	)		(1,177,459	)		(8,278	)		(17,988	)		(22,866	)		(2,329,278	)
Net book value:
March 31, 2016		121,447			1,546,651			266,905			9,384			114,054			286,696			1,471,832			4,263			161,888			9,671			3,992,791
March 31, 2015		99,408			1,546,651			322,531			12,608			125,562			305,444			1,243,704			6,769			179,876			11,892			3,854,445

⁽¹⁾  Refers to technology developed by Iogen and Codexis to produce second-generation ethanol (“E2G”). These technologies are represented by contractual rights including, among others, RESA’s exclusive marketing of those rights in the locations where it operates. The average period of amortization will be 10 years, which is the expected return period of the technologies developed for the production of E2G; (2) Includes intangible assets recognized by Raízen Trading, controlled by RESA, consisting of client portfolio and operating licenses in Europe and United States; and, (3) As of March 31, 2016, net transfers of R$ 24,746 include: (a) transfers from Fixed Assets item totaling R$ 24,690; and, (b) exclusive supply rights totaling R$ 56, transferred from accounts receivable.

59

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

• March 31, 2015

	Software license(1)			Goodwill			Brands			Agricultural Partnership Agreements			Sugarcane supply agreements			Contractual relationships with clients			Exclusive supply rights			Public concession rights of use			Technology(2)			Other(3)			Total
Cost or evaluation:
March 31, 2014		277,314			1,915,811			529,862			6,107			178,286			319,402			1,709,793			12,543			234,936			27,247			5,211,301
Additions		18,674			—			—			—			—			—			507,135			—			—			—			525,809
Business combinations(4)		—			70,432			7,301			—			—			43,432			3,073			—			—			—			124,238
Reversal of sums contributed(5)		—			3,274			—			—			—			—			—			—			—			—			3,274
Final allocation of the Cerrado acquisition (Note 26)		—			(9,003	)		—			12,303			3,230			—			—			—			—			—			6,530
Write-offs		(1,908	)		—			(4,822	)		1			—			—			(13,074	)		(2	)		—			—			(19,805	)
Transfers		32,213			(2,483	)		—			—			—			—			—			—			—			—			29,730
Provision for impairment losses(6)		—			—			—			—			—			—			—			—			(55,060	)		—			(55,060	)
Other		—			—			—			—			—			—			—			—			—			3,775			3,775
March 31, 2015		326,293			1,978,031			532,341			18,411			181,516			362,834			2,206,927			12,541			179,876			31,022			5,829,792
Amortization:
March 31, 2014		(197,570	)		(431,380	)		(157,960	)		(1,759	)		(44,236	)		(38,638	)		(710,339	)		(3,309	)		—			(17,064	)		(1,602,255	)
Amortization in the year		(26,863	)		—			(56,672	)		(4,044	)		(11,718	)		(18,752	)		(266,043	)		(2,466	)		—			(2,066	)		(388,624	)
Write-offs		1,886			—			4,822			—			—			—			13,075			3			—			—			19,786
Transfers		(4,338	)		—			—			—			—			—			84			—			—			—			(4,254	)
March 31, 2015		(226,885	)		(431,380	)		(209,810	)		(5,803	)		(55,954	)		(57,390	)		(963,223	)		(5,772	)		—			(19,130	)		(1,975,347	)
Net book value:
March 31, 2015		99,408			1,546,651			322,531			12,608			125,562			305,444			1,243,704			6,769			179,876			11,892			3,854,445
March 31, 2014		79,744			1,484,431			371,902			4,348			134,050			280,764			999,454			9,234			234,936			10,183			3,609,046

⁽¹⁾  As of March 31, 2015, the software class of Intangible assets included the net residual value of R$ 1,421 in which RESA is the lessee under a finance lease; (2) Refers to technology developed by Iogen and Codexis to produce second-generation ethanol (“E2G”). These technologies are represented by contractual rights including, among others, RESA’s exclusive marketing of those rights in the locations where it operates. The average period of amortization will be 10 years, which is the expected return period of the technologies developed for the production of E2G; (3) Includes intangible assets recognized by Raízen Trading, controlled by RESA, consisting of client portfolio acquired in business combination and operating licenses in Europe and United States; (4) Latina Acquisition (Note 26); (5) Reversal of sums contributed with regard to the business combination with Cosan Combustiveis and Lubrificantes S.A. (“CCL”); and, (6) On March 31, the RESA estimated loss related to intangible assets recognized for the potential benefit arising from Codexis technology due to the uncertainty regarding its use. Therefore, it was made the additional provision for loss of R $ 55,060, recognized in the income statement under Other operating income, net (Note 21).

60

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

• March 31, 2014

	Software license			Goodwill			Brands			Agricultural Partnership Agreements			Sugarcane supply agreements			Contractual relationships with clients			Exclusive supply rights			Public concession rights of use			Technology			Other			Total
Cost or evaluation:
March 31, 2013		206,266			1,883,481			594,395			9,375			157,439			366,788			1,335,733			10,811			—			51,943			4,616,231
Additions		5,868			—			—			—			—			—			389,581			—			—			—			395,449
Write-offs		(25,689	)		—			(64,533	)		—			—			(47,386	)		—			—			—			(4,332	)		(141,940	)
Addition due to paid in capital		—			—			—			—			—			—			—			—			179,876			—			179,876
Final allocation of the Costa Rica acquisition (Note 26)		—			(1,333	)		—			(3,268	)		20,847			—			—			—			—			—			16,246
Temporary allocation of the Cerrado acquisition (Note 26)		—			33,663			—			—			—			—			—			—			—			—			33,663
Transfers		53,127			—			—			—			—			—			(15,521	)		1,732			61,629			—			100,967
Transfer between cost and amortization		37,742			—			—			—			—			—			—			—			—			(21,917	)		15,825
Provision for impairment losses(1)		—			—			—			—			—			—			—			—			(6,569	)		—			(6,569	)
Accumulated translation adjustment—CTA		—			—			—			—			—			—			—			—			—			1,553			1,553
March 31, 2014		277,314			1,915,811			529,862			6,107			178,286			319,402			1,709,793			12,543			234,936			27,247			5,211,301
Amortization:
March 31, 2013		(166,014	)		(431,380	)		(169,989	)		(879	)		(32,536	)		(70,872	)		(491,359	)		(1,040	)		—			(36,739	)		(1,400,808	)
Amortization in the year		(19,492	)		—			(52,504	)		(880	)		(11,700	)		(15,152	)		(218,980	)		(2,162	)		—			(6,574	)		(327,444	)
Write-offs		25,689			—			64,533			—			—			47,386			—			—			—			4,332			141,940
Transfer between cost and amortization		(37,742	)		—			—			—			—			—			—			—			—			21,917			(15,825	)
Transfers		(11	)		—			—			—			—			—			—			(107	)		—			—			(118	)
March 31, 2014		(197,570	)		(431,380	)		(157,960	)		(1,759	)		(44,236	)		(38,638	)		(710,339	)		(3,309	)		—			(17,064	)		(1,602,255	)
Net book value:
March 31, 2014		79,744			1,484,431			371,902			4,348			134,050			280,764			999,454			9,234			234,936			10,183			3,609,046
March 31, 2013		40,252			1,452,101			424,406			8,496			124,903			295,916			844,374			9,771			—			15,204			3,215,423

⁽¹⁾  On March 31, 2014, RESA estimated losses related to technology agreements from Codexis of R$ 6,569 recorded as impairment provision, and recognized in the consolidated statement of income as Other operating income, net (Note 21).

61

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

Goodwill

Refer to goodwill paid for expected future earnings. On March 31, 2016 and 2015, goodwill balance is as follows:

Upon acquisition of Costa Rica Canavieira Ltda.	57,169
Upon acquisition of Cerrado Açúcar e Álcool S.A.	24,660
Upon acquisition of RESA (former Cosan S.A. Açúcar e Álcool)	558
Upon acquisition of Univalem S.A. Açúcar e Álcool	5,018
Upon acquisition of Usina Açucareira Bom Retiro S.A.	81,575
Upon acquisition of Usina Benálcool	149,247
Upon acquisition of Usina Santa Luíza	42,348
Upon acquisition of Usina Zanin Açúcar e Álcool	98,380
Upon acquisition of Vertical	4,313
Upon acquisition of TEAS’ shares	4,818
Upon acquisition of Corona Group	380,003
Upon acquisition of Destivale Group	42,494
Upon acquisition of Mundial Group	87,435
Upon capital payment at Mundial	14,800
Upon establishment of FBA—Franco Brasileira S.A. Açúcar e Álcool	4,407
Upon merger of Curupay S.A. Participações	109,841
Total RESA	1,107,066
Upon acquisition of Latina	70,432
Upon business combination of Cosan Combustíveis Lubrificantes S.A.	348,103
Other	21,050
Total RCSA	439,585
Total Group	1,546,651

Impairment analysis for cash generating units containing goodwill

The Group tests goodwill for impairment at least on an annual basis.

Indefinite life non-financial assets that are not subject to depreciation or amortization are reviewed whenever there are indications that their carrying amount will not be recovered.

In case of RCSA, Management, to determine recoverable value, uses the value in use method, which is based on projection of expected discounted cash flows of cash generating units (CGU) determined by Management based on budgets that take into consideration assumptions related to CGU; business management of RCSA considers them as an integrated distribution chain comprising a single cash generating unit, using information available in the market and prior performances.

Discounted cash flows were prepared for a period of five years and taken to perpetuity with considering a zero growth rate, based on past performance and on expected market development. Cash flows deriving from continued use of related assets are adjusted at specific risks and use pre-tax discount rate, calculated as 7.48% p.a. (8.5% in 2015).

62

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

Main assumptions used were: prices based on Market expectation, growth rates estimated for business line and extrapolations of growth rates based on Gross Domestic Product (GDP). Every future cash flow was discounted at rates that reflect specific risks related to relevant assets in each cash generating unit.

In case of RESA, goodwill is allocated to CGU’s identified according to operating regions, as follows:

Operating regions	Total
Piracicaba		138,744
Jaú		558
Araraquara		545,391
Araçatuba		303,401
Assis		109,841
Independent and others		9,131
Total RESA goodwill		1,107,066

RESA, to determine recoverable value, uses the value in use method, which is based on projection of expected discounted cash flows of cash generating units determined by Management based on budgets that take into consideration assumptions related to each CGU using information available in the market and prior performances. Discounted cash flows were prepared for a period of 20 years without considering a terminal growth rate, based on past performance and on expected market development. Rate used corresponds to average market rate of the companies of the industry, calculated as 7.48% p.a.

Main assumptions used for RESA were: expected sales price of commodities in the long-term, productivity of agricultural areas, performance of Total Recoverable Sugar (ATR), and operating and administrative costs. Every future cash flow was discounted at rates that reflect specific risks related to relevant assets in each cash generating unit.

As a result of annual tests, no significant expenses from impairment of assets and goodwill was recognized during the years ended March 31, 2016, 2015 e 2014. Determination of assets recoverability depends on the accomplishment of certain assumptions that are influenced by market, technological, and economic conditions prevailing at the time in which recoverability is tested and, therefore, it is not possible to determine if recoverability losses will occur in the future and, in case they occur, if they will be material.

63

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

13. Suppliers

	2016		2015
Suppliers of materials and services(i)		661,925		541,266
Suppliers of ethanol(ii)		251,848		276,085
Oil suppliers(ii)		139,689		208,246
Sugarcane suppliers(iii)		233,346		129,640
Suppliers—Agreement(iv)		379,163		174,354
		1,665,971		1,329,591

⁽ⁱ⁾  The balance payable to suppliers of materials and services mostly consists of the acquisition of machinery and equipment for the ethanol, sugar and bioenergy production facilities for resale.

⁽ⁱⁱ⁾  The balances payable to suppliers of oil and ethanol consist of purchases.

⁽ⁱⁱⁱ⁾  Sugar cane harvesting, which usually takes place between April and December every year, has a direct impact on the balance of trade payables to sugar cane suppliers and for cutting, loading and transportation services.

^(iv)  The Group has Agreements Related to Payments and Other Covenants (“Agreement”) that permit certain suppliers to advance their receivables referring to products and services provided to the Group, directly with Financial Institution. In said Agreement, supplier may choose to grant or not and the bank decides whether to acquire or not said credit, without interference from the Group. The utilization of the Agreement does not imply any change in notes issued by the supplier, and the same value and payment term conditions are maintained, which, as average, is around 60 to 90 days, period that is consistent with the Group’s recurring operating cycle.

64

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

14. Loans and financing

Purpose	Final maturity		Index		Annual effective average interest rate(1)				Total
					2016		2015		2016			2015
Classification of debts per currency:
Denominated in reais										6,058,158			5,868,340
Denominated in North-American Dollars (US$) and Euro (€) (note 23.d)										6,873,488			6,115,042
										12,931,646			11,983,382
Type of debts (2):
BNDES		Oct-25		URTJLP		10.01%		8.10%		1,179,337			1,318,415
BNDES		Jul-24		Pre-fixed		4.08%		4.10%		1,173,004			1,218,098
BNDES		Apr-24		UMBND		6.53%		6.70%		80,734			81,657
Prepayments (“PPEs”)		Dec-21		Dollar (US$) + Libor		2.84%		1.70%		1,693,796			863,123
Term Loan Agreement		Apr-20		Dollar (US$) +Libor		1.94%		1.60%		3,728,122			3,375,698
Debentures		Oct-18		CDI		15.19%		13.70%		475,446			471,020
Debentures		Oct-20		IPCA + interest		14.15%		15.10%		384,812			350,187
Senior notes due 2017		Feb-17		Dollar (US$)		7.00%		7.00%		734,550			1,297,921
Resolution 2471 (PESA)		Apr-23		IGP-M		11.92%		10.70%		928,344			832,213
Resolution 2471 (PESA)		Oct-25		Pre-fixed		3.00%		3.00%		76			84
Credit Notes		Oct-20		CDI		15.19%		13.00%		264,882			717,478
Finame/Leasing		Nov-14		Pre-fixed		5.22%		4.90%		93,225			96,653
Finame/Leasing		—		URTJLP		—		11.20%		—			3
Rural credit		Jun-16		Pre-fixed		6.50%		6.50%		62,726			67,176
Certificate of Agribusiness Receivables (“CRA”)		Jun-21		CDI		14.13%		12.60%		1,295,798			605,109
Certificate of Agribusiness Receivables (“CRA”)		Dec-21		IPCA + interest		13.41%		14.30%		119,776			110,247
Schuldschein		Oct-21		Pre-fixed - EUR		2.88%		2.90%		271,083			230,413
Schuldschein		Sep-22		Euribor		1.98%		2.10%		374,563			138,380
Other		Other		Dollar (US$)		—		—		71,372			209,507
										12,931,646			11,983,382
Expenses incurred with the placement of the securities:
Term Loan Agreement										(25,283	)		(28,233	)
CRA										(21,335	)		(11,619	)
Schuldschein										(16,308	)		(7,488	)
Prepayments										(6,121	)		(1,717	)
BNDES										(4,780	)		(4,379	)
Debentures										(3,455	)		(4,532	)
Senior notes due 2017										(1,563	)		(6,443	)
Rural credit										(75	)		(68	)
Credit Notes										—			(310	)
										(78,920	)		(64,789	)
										12,852,726			11,918,593
Current										(1,639,509	)		(1,386,583	)
Non-current										11,213,217			10,532,010

⁽¹⁾  The annual effective interest rate is the contract rate plus, Libor,Euribor, URTJLP, IGP-M, UMBND, IPCA e CDI, where applicable.

⁽²⁾  Loans and financing are usually secured by Group’s promissory notes. In some cases they are endorsed by shareholders, and security interest is offered such as: (i) receivables from energy sale agreements (BNDES); (ii) CTN (Note 7) and mortgage of land (PESA); (iii) property, plant and equipment; and, (iv) conditional sale of assets purchased under a FINAME financing agreement.

65

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

Installments falling due in the long term, less the amortization of expenses incurred with the placement of securities, have the following schedule:

	2016
In months:
13-24		1,928,276
25-36		2,352,672
37-48		1,466,576
49-60		3,382,325
61-72		1,611,653
73-84		348,157
85-96		98,999
From 97		24,559
		11,213,217

PESA—Resolution 2471

In the period from 1998 to 2000, RESA renegotiated with several financial institutions its debts related to financing of agricultural costs, reducing their financial cost to annual interest rates lower than 11.92%, ensuring amortization of debt with granting and transfer of National Treasury Certificates, redeemable upon debt settlement, using incentive promoted by Brazilian Central Bank Resolution no. 2,471, of February 26, 1998. Said debt may be settled through redemption of CTN’s and compliance with contract provisions, as mentioned in Note 7.

Senior notes due 2017

On January 26, 2007, RESA, through its subsidiary Raízen Energy Finance Limited, issued Senior Notes in the international market according to “Regulations S and 144A”, in the amount of US$ 400,000 thousand, which are subject to interest of 7% p.a., payable on a half-annual basis in February and August every year. During the year ended March 31, 2016, RESA paid US$ 195,943 thousand and US$ 29,943 thousand as principal and interest, respectively.

BNDES

Correspond to funds raised by the Group and substantially destined to financing co-generation projects greenfield, brownfields, renewal and implementation of new sugarcane fields (Prorenova) and construction of plant for E2G production.

On March 31, 2016, the Group had available credit facilities of financing from BNDES, unused, amounting to R$ 243,094 (R$ 593,473 in 2015 and R$ 1,227,872 in 2014). The use of these credit facilities depends on the fulfillment of certain contractual conditions.

66

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

Credit Notes

Credit notes will be settled through exports to be made up to 2020 and are subject to average interest of 15.19% p.a. payable on ahalf-annual basis and on maturity.

During the year ended March 31, 2016, amounts of R$ 450,000 of principal and R$ 99,824 of interest were settled in advance.

Finame

Refers to financings of machinery and equipment through several financial institutions, intended for fixed asset investments. These financings are subject to effective interest of 5.22% p.a., monthly paid and are guaranteed by mortgage of the financed assets.

Term Loan Agreement (unionized loan)

On April 8, 2014, the Group contracted unionized loans from several financial institutions in the amount of US$ 600,000 thousand. Said contract is subject to North-American dollar exchange rate variation and quarterly Libor interest plus annual fixed interest of 1.4%, resulting in effective average interest rate of 2.02% p.a. with final maturity in March 2019.

In addition, on March 30, 2015, indirect subsidiary Raízen Luxembourg S.A. contracted a loan from a syndicate comprised of several global commercial banks in the amount of R$ 1,443,600 (US$ 450,000 thousand). Said contract is subject to North-American dollar exchange rate variation and quarterly Libor interest plus annual fixed interest of 1.2%, resulting in effective average interest rate of 1.83% p.a. with quarterly maturity. The principal matures on April 27, 2020. Through this syndicate, the Group also obtained a Revolving Credit Facility of US$ 285,000 thousand, also maturing on April 27, 2020.

PPEs

In 2013, RESA entered into PPE contracts with several institutions for financing of future sugar export. Said contracts are subject to North-American dollar exchange rate variation and quarterly Libor interest resulting in effective average interest rate of 2.13% p.a. with final maturity in September 2017.

In October 2015, RCSA contracted two loans in the amount of R$ 797,600, equivalent to US$ 200,000 thousand, with fixed interest rate varying from 3.63% to 3.64% p.a. and final maturity on September 29, 2020.

67

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

In addition, in November and December 2015, RCSA contracted two new PPE’s in the amount of R$ 388,780, equivalent to US$100,000 thousand. These contracts bear quarterly Libor interest plus annual average interest of 1.67%, resulting in effective average interest rate of 2.29% p.a., with final maturity in November/ December 2021.

As of December 15, 2015, the RESA, through its subsidiary Tarumã, signed a new loan agreement in the amount of R$ 192,740, equivalent to US$ 50 million. This PPE bears half-annual Libor interest plus annual interest of 1.80%, resulting in effective average interest rate of 2.55% p.a., with final maturity on December 15, 2020.

Certificate of Agribusiness Receivables—CRA

In October 2014, RESA issued CPR (Rural Producer Note) linked to Public Distribution of the 1^st and 2^nd series of 10^th issuance of CRA’s of Gaia Agro Securitizadora S.A., in the amount of R$ 675,000 and maturity in December 2021.

According to the Announcement of the End of the Public Distribution of the First Series of the 14^th Issuance by Gaia Agro Securitizadora, disclosed on June 16, 2015, RESA completed the issuance of CRAs to raise R$ 675,000, restated at 100% of CDI. About such operation, issuing costs in the amount of R$ 11,888 will amortized by the maturity date.

Final destination of funds raised is RESA and its subsidiaries’ activities, which are exclusively related to agribusiness, in the ordinary course of its business, which is understood as transactions, investments and financing needs related to production, trading, processing or industrialization of agricultural products and inputs or of machinery and equipment used in agricultural activity, pursuant to the terms of single paragraph of Article 23 of Law no. 11,076.

Debentures

In October 2013, CVM granted to RESA, registration of its 1^st Public Issuance of Simple Debentures through which 750,000 simple, unsecured debentures, not convertible into shares were issued in three series, with par value of R$ 1,000, totaling R$ 750,000.

Net funds obtained from issuance of debentures, in the amount of R$ 747,710, were fully used to (i) strengthen RESA’s cash in relation to 1^st series debentures and 2^nd series debentures; and (ii) pay part of RESA’s investment costs related to 2013/2014 crop both in agricultural and industrial areas, pursuant to the terms of Law no. 12,431, in relation to 3^rd series debentures.

68

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

Breakdown of series is as follows:

	Index		Annual interest rate			Effective average annual interest rate			Principal		Date of receipt		Maturity
Series 1		CDI		0.89	%		15.15	%		105,975		10/25/2013		Oct-18
Series 2		CDI		0.94	%		15.20	%		340,000		10/28/2013		Oct-18
Series 3		IPCA		6.38	%		14.15	%		304,025		10/29/2013		Oct-20

Schuldschein

In October 2014, RCSA entered into new financing through its subsidiary Raízen Fuels Finance Limited in the amount of € 66 million with fixed interest rate of 2.88% p.a. and final maturity on October 15, 2021.

In addition, in January 2015, RCSA entered into new financing through its subsidiary Raízen Fuels Finance Limited in the amount of € 40 million with fixed annual interest rate of 2% p.a. and quarterlyEuribor interest, resulting in effective average rate of 1.86% p.a. and final maturity on January 20, 2022.

On September 21, 2015, RCSA entered into new financing through its subsidiary Raízen Fuels Finance Limited in the amount of € 60,000 thousand with fixed annual interest rate of 2.07% p.a. and final maturity on September 21, 2022.

Covenants

The companies of the Group are not subject to comply with financial ratios, being subject only to certain covenants in loans and financing contracts, such as “cross-default” and “negative pledge”, which are being fully complied with by the Group.

Fair value

As of March 31, 2016 and 2015, the fair value of the Senior Notes Due 2017 is based on the price quotations in the secondary market at the reporting date (Note 23.i), and the book value and fair value of such loans are as follows:

	Book value				Fair value
	2016		2015		2016		2015
Senior notes due 2017		732,987		1,291,478		758,641		1,385,577

Also, on March 31, 2016, debts Term Loan Agreement (partial) andSchuldschein are presented net of amounts R$ 18,832 and R$ 33,561, respectively, and PPE’s are presented with addition of R$ 837 deriving from evaluation at fair value. Such debts evaluated at fair value total R$ 3,694,212 (Note 22 and 23.i).

69

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

Other loans and financing do not have a quoted value; however their fair value approximates their carrying amount due to their exposure to variable interest rates and insignificant changes in the Group’s credit risk, which is shown by comparison to the quoted instruments presented above (Note 23.i).

15. Income and social contribution taxes

a) Reconciliation of income and social contribution tax expenses:

	2016			2015			2014
Income before income and social contribution taxes		3,447,881			1,684,704			1,740,868
Income tax and social contribution at nominal rate (34%)		(1,172,280	)		(572,799	)		(591,895	)
Adjustments for calculation of effective rate:
Interest on own capital		68,729			64,615			75,820
Equity in net income of subsidiaries		(22,403	)		(6,882	)		(8,281	)
Gifts, donations, class association		(7,055	)		(5,985	)		(6,327	)
Reintegra credits		9,404			17,442			—
Investment subsidy—ICMS		13,825			20,249			10,911
Presumed net income regimen entities taxation difference		68,981			57,179			—
Reversal of taxes deferred upon corporate reorganization		(381	)		67,843			—
Capital gain due to dilution of shareholding interest (Note 9.b)		5,298			10,313			—
Foreign exchange rate variation on investee abroad		5,828			9,787			3,046
Tax loss and negative basis unrecognized from subsidiaries		(27,628	)		8			(600	)
Income from foreign company—rate difference		(24,197	)		5,921			—
Other		11,965			(823	)		4,926
Expense from income tax and social contribution		(1,069,914	)		(333,132	)		(512,400	)
Effective rate		31.0	%		19.8	%		29.4	%

b) Income and social contribution taxes recoverable

	2016			2015
Taxes on income (“IRPJ”)		701,253			416,260
Social contribution (CSLL)		237,882			143,331
		939,135			559,591
Current assets		(452,553	)		(51,231	)
Non-current assets		486,582			508,360

In August 2013, the entities of the Group opted for the taxation regime whereby income and social contribution taxes are prepaid on gross revenue estimates, leading to positive fluctuations in the balances of recoverable income tax. Prepaid income and social contribution taxes are currently being offset against other federal taxes (PIS, COFINS and IOF).

70

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

As mentioned in note 8.a.3, on March 31, 2016, RCSA recognized tax credits originated from IRPJ and CSLL overpayment by Shell, in 2010 and 2011, in the amount of R$ 258,250 with recognition of corresponding liability, as they must be reimbursed to referred shareholder.

c) Income and social contribution taxes payable

	2016		2015
IRPJ		125,872		11,366
CSLL		65,409		10,367
		191,281		21,733

d) Deferred income tax and social contribution in assets and liabilities:

	2016												2015
Assets (liabilities)	Base			IRPJ 25%			CSLL 9%			Total			Total
Tax losses		1,653,608			413,402			—			413,402			268,147
Negative basis for social contribution tax		1,698,733			—			152,886			152,886			102,973
Temporary differences:
Foreign exchange variation		1,128,991			282,248			101,609			383,857			559,466
Provision for right to exclusive supply		558,938			139,735			50,304			190,039			145,766
Tax goodwill deriving from downstream merger		258,429			64,607			23,259			87,866			136,798
Provision for goodwill write-off		288,547			72,137			25,969			98,106			98,106
Remuneration and employee benefits		344,988			86,247			31,049			117,296			98,485
Provisions for legal disputes		413,124			103,281			37,181			140,462			108,697
Provisions and other temporary differences		624,750			155,376			57,039			212,415			184,363
Total deferred tax assets					1,317,033			479,296			1,796,329			1,702,801
Amortized tax goodwill		(1,768,547	)		(442,137	)		(159,169	)		(601,306	)		(561,650	)
Fixed assets’ useful life		(1,082,585	)		(270,646	)		(97,433	)		(368,079	)		(320,911	)
Derivatives		(557,579	)		(139,395	)		(50,182	)		(189,577	)		(317,231	)
Fair value of property, plant and equipment		(628,565	)		(157,141	)		(56,571	)		(213,712	)		(233,060	)
Fair value of intangible assets		(286,697	)		(71,674	)		(25,803	)		(97,477	)		(104,915	)
Cost of capitalized loans		(287,315	)		(71,829	)		(25,858	)		(97,687	)		(100,045	)
Biological assets		(671,909	)		(167,977	)		(60,472	)		(228,449	)		(14,211	)
Total deferred tax liabilities					(1,320,799	)		(475,488	)		(1,796,287	)		(1,652,023	)
Total deferred taxes					(3,766	)		3,808			42			50,778
Deferred taxes—Assets, net											233,018			326,178
Deferred taxes—Liabilities, net											(232,976	)		(275,400	)
Total deferred taxes											42			50,778

71

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

e) Net changes in deferred taxes:

	2016			2015			2014
Balance at the beginning of the year		50,778			252,289			316,617
Income (expenses) in profit or loss		(411,369	)		51,292			(107,503	)
Deferred taxes recognized in other comprehensive income		282,494			(12,962	)		60,993
Recognition of NOL and GW tax credits by Shell (Note 8.a.3)		78,124			—			—
Deferred taxes on business combinations (Note 26)		—			(23,456	)		(16,245	)
Reversal of deferred taxes		—			1,300			—
Merger of subsidiaries		—			4,486			—
Use of tax losses and negative basis for social contribution for REFIS settlement		—			(222,492	)		—
Other		15			321			(1,573	)
Balance at the end of the year		42			50,778			252,289

f) Realization of deferred tax assets:

When evaluating deferred taxes’ recoverability, Management considers future taxable income projections and the timing of reversals of temporary differences. When it is not probable that part of or all taxes will be realized, assets are not recognized. Possibility of using tax losses and negative bases’ balances does not expire, but the use of these losses accumulated in prior years is limited to 30% of taxable annual income.

On March 31, 2016, the Group expects to realize deferred tax assets as follows:

Years:	2016
2017		785,900
2018		131,163
2019		115,339
2020		142,413
2021 onwards		621,514
Total		1,796,329

On March 31, 2016, subsidiaries Agrícola Ponte Alta Ltda., Raízen Biotecnologia S.A. and Blueway Trading Importação e Exportação Ltda. presented tax losses and social contribution negative bases’ balance amounting to R$ 15,371 (R$ 17,049 in 2015 and R$ 33,076 in 2014) for which no deferred tax assets were established, as their recoverability is not considered as probable.

72

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

16. Provision for legal disputes and judicial deposits

Breakdown of legal disputes considered as probable loss

When Raízen Group was setup it was agreed that Cosan and Shell would reimburse the Group for legal disputes that were ongoing before its formation, as these disputes are actually settled. On March 31, 2016 and 2015, balance of said claims to be reimbursed and claims that are not reimbursable is as follows:

	2016		2015
Tax		289,673		292,691
Civil		194,164		218,582
Labor		222,084		209,225
Environmental		55,695		54,533
		761,616		775,031
Non-reimbursable legal disputes		110,837		91,811
Reimbursable legal disputes		650,779		683,220
		761,616		775,031

The arrangements made for Raízen’s setup also established that RESA and RCSA should refund the court deposits made before Raízen’s setup to the shareholders Cosan and Shell, when these deposits are actually withdrawn. On March 31, 2016 and 2015, balance of said refundable deposits and deposits that are not refundable is as follows:

	2016		2015
Tax		204,039		205,715
Civil		40,664		26,578
Labor		48,762		44,502
		293,465		276,795
Own judicial deposits		41,083		52,061
Reimbursable judicial deposits		252,382		224,734
		293,465		276,795

73

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

i) Non-reimbursable legal disputes

	Tax			Civil			Labor			Environmental			Total
March 31, 2015		17,950			5,856			64,878			3,127			91,811
Provisions(i)		32,492			2,490			37,156			1,701			73,839
Write-offs/ Reversals(i)		(304	)		(1,260	)		(28,195	)		(769	)		(30,528	)
Payments		(487	)		(227	)		(157	)		(521	)		(1,392	)
Offset(ii)		(46,645	)		—			—			—			(46,645	)
Interest(iii)		17,418			1,056			5,265			13			23,752
March 31, 2016		20,424			7,915			78,947			3,551			110,837

⁽ⁱ⁾  Recorded in profit or loss for the year in the heading Other operating income, net (Note 21), except for: (a) by recording of a provision for INSS on billing at RESA, in the amount of R$ 30,750, reclassified from caption Taxes payable in current liabilities, and by RCSA provisions accounted for in income for the year under captions Taxes, deductions and rebates on sales and General and administrative expenses, in the amount of R$ 3,210;

⁽ⁱⁱ⁾  Includes the offset against judicial deposits; and,

⁽ⁱⁱⁱ⁾  Recorded in income for the year in the heading Financial income (loss).

(i) Reimbursable legal disputes⁽¹⁾

	Tax			Civil			Labor			Environmental			Total
March 31, 2015		274,741			212,726			144,347			51,406			683,220
Provisions(i)		20,470			50,673			30,027			18,639			119,809
Write-offs/ Reversals(i)		(25,753	)		(36,250	)		(36,077	)		(7,985	)		(106,065	)
Payments		(16,568	)		(96,952	)		(3,889	)		(7,831	)		(125,240	)
Offset against judicial deposits		(2,857	)		—			—			—			(2,857	)
Interest		19,216			56,052			8,729			(2,085	)		81,912
March 31, 2016		269,249			186,249			143,137			52,144			650,779

(1) The changes had no and will never have effect on Group’s profit or loss.

iii) Total legal disputes

	Tax			Civil			Labor			Environmental			Total
March 31, 2015		292,691			218,582			209,225			54,533			775,031
Provisions		52,962			53,163			67,183			20,340			193,648
Write-offs/ Reversals		(26,057	)		(37,510	)		(64,272	)		(8,754	)		(136,593	)
Payments		(17,055	)		(97,179	)		(4,046	)		(8,352	)		(126,632	)
Offset against judicial deposits		(49,502	)		—			—			—			(49,502	)
Price-level restatement		36,634			57,108			13,994			(2,072	)		105,664
March 31, 2016		289,673			194,164			222,084			55,695			761,616

74

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

(a) Tax

	2016		2015
INSS (i)		2,336		2,166
ICMS (ii)		35,150		65,639
IPI (iii)		88,045		83,170
PIS and COFINS (iv)		35,318		34,286
Lawyers’ fees (v)		55,040		39,802
IRPJ and CSLL (vi)		69,002		63,075
CIDE and other (vii)		4,782		4,553
		289,673		292,691
Non-reimbursable legal disputes		20,424		17,950
Reimbursable legal disputes		269,249		274,741
		289,673		292,691

(i) INSS

The amount recorded as provision for INSS corresponds to amounts related to social security contributions levied on billing, pursuant to the terms of Article 22-A of Law no. 8,212/91, whose constitutionality is being challenged in a lawsuit. RESA made escrow deposits related to said lawsuit in the amount of R$ 212,789. Accordingly, both balances are presented net in these financial statements.

(ii) ICMS (Value-added tax on sales and services)

Amount recorded as provision for ICMS is substantially represented by: (a) received tax assessments that, despite being defended in the administrative and legal spheres, are considered as probable loss by the Group’s legal advisors; and (b) using finance credits and charges in matters on which understanding of the Group’s management and tax advisors differ from tax authorities’ interpretations.

(iii) IPI

Amount recorded as a provision for IPI is represented by: (a) tax assessment received referring to imported merchandise; and (b) offset of credits deriving from inputs used in exempt shipments.

(iv) PIS and COFINS

Amount recorded as a provision for PIS and COFINS credits is as follows: (a) contribution of period from 1997 to 1999 referring to merger of company; and (b) offset referring to IPI credits used to offset PIS and COFINS deriving from inputs used in exempt shipments.

75

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

(v) Lawyers’ fees

The Group contracts law firms to defend it in civil, tax and labor lawsuits. Some contracts provide for attorneys’ remuneration as a percentage on successful lawsuit value. The Group records a provision for amounts payable to law firms referring to lawsuits whose likelihood of loss is possible or remote. Amount currently recorded as a provision refers mainly to lawsuits whose financial responsibility is borne by Shell, as they were originated in a period prior to the Group’s establishment and, therefore, are reimbursable.

(vi) IRPJ and CSLL

These refer to decisions related to different offsets (Perdcomp) related to IPI credits used to offset IRPJ and CSLL. Said offset stopped being homologated because a tax assessment notice was issued to stop recognition of credits based on the fact that, in the period from January 2008 to September 2010, (i) RCSA did not segregate and pay IPI owed at the rate of 8% on certain transactions classified in TIPI (table of IPI levy), and (ii) RCSA did not reverse IPI credits referring to inputs used for industrialization of certain products classified in TIPI, considering that shipment of such products are not taxed. In first item, controversy occurs due to divergence about classification of products as oil by-products and, in the second item, it occurs because authorities do not recognize the right to maintain IPI credits on shipment transactions that are exempt or not taxed.

(vii) Economic Domain Intervention Contribution (CIDE)

RCSA recorded a provision for CIDE on services provided in oil and natural gas exploration and production activities carried out before the Group’s establishment, whose balance on March 31, 2016 totals R$ 171,515. Owed amounts were deposited in escrow, at the same amount. RCSA will be fully reimbursed by Shell in case it actually is obliged to pay CIDE to tax authorities. Accordingly, both balances are presented net in these financial statements.

(b) Civil, labor and environmental

The Group is party to various civil actions consisting of (i) damages for material losses and pain and suffering; (ii) disputes on contracts; (iii) class action to stop the burning of sugar cane straw; (iv) enforcements of environmental decisions; (v) reparation of environmental damages causes by fuel leakages and, (vi) discussions about contracts, real estate and recovery of credits, and the last two topics include contract breaches, possession of the Group’s properties and recovery of amount not paid by clients.

76

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

The Group is also party to several labor complaints filed my former employees and employees of service providers who demand, among other things, payment for overtime work, night shift premium and hazardous duty premium, readmission into the job, return of payroll discounts, such as trade union optional and mandatory contributions, among others.

The main environmental actions are related to environmental remediation to be carried out at gas stations, distribution hubs, airports and client distribution centers and they include the removal of contaminated material, treatment of the land, laboratory tests and post-remediation monitoring.

Legal disputes whose likelihood of loss is considered possible for which no provision was recognized in financial statements.

(a) Tax

	2016		2015
ICMS (i)		3,538,878		2,859,646
INSS (ii)		461,618		396,246
IPI (iii)		482,576		438,601
IRPJ and CSSL (vi)		1,666,108		721,811
PIS and COFINS (v)		1,754,305		1,548,162
Offset with IPI credits—Regulatory Instruction no. 67/98 (vi)		124,737		119,891
Other		865,008		259,690
		8,893,230		6,344,047
Non-reimbursable legal disputes		1,051,244		317,109
Reimbursable legal disputes		7,841,986		6,026,938
		8,893,230		6,344,047

In case a reimbursable provision for these lawsuits has to be recognized in the future due to change in loss expectation, or to any other reason, the Group will immediately record amount receivable from shareholders at the same amount and, therefore, the Group’s statement of income will not be impacted. In case this provision is not reimbursable, the Group will record it as a charge to the statement of income in which change occurs.

77

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

Raízen Group’s possible losses may be summarized as follows:

(i) ICMS (Value-added tax on sales and services)

Refers substantially to: (i) part related to fine of tax assessment issued due to alleged lack of ICMS payment and non-compliance with accessory obligation, in agricultural partnership for on-demand industrialization in periods from May 2005 to March 2006 and from May 2006 to March 2007; (ii) ICMS levied on crystal sugar for export that, as understood by tax agent, is classified as semi-finished product and, in accordance with ICMS regulation, would be subject to taxation; (iii) ICMS levied on alleged divergences on sugar and ethanol inventories deriving from comparison between magnetic tax files and inventory registration books; (iv) tax assessment related to charge of ICMS rate difference deriving from ethanol sales to companies located in other states of the Federation, which had their state registrations canceled; (v) requirement of ICMS deriving from disallowances of diesel credits used in agricultural-industrial production process; (vi) lack of reversal of ICMS credits; (vii) lack of full reversal of ICMS-ST credits; (viii) non-compliance with certain accessory obligations; (ix) discussion on alleged difference between inventories when volumes informed to ANP and volumes informed in LRCPE are compared.

(ii) INSS

Possible legal disputes related to INSS involve mainly: (i) questioning about legality and constitutionality of MPS/SRP Regulatory Instruction no. 3 of 2005, which restricted constitutional immunity of social security contributions on revenues from export exclusively to direct sales and started to tax exports carried out through trading companies; (ii) requirement of contribution to SENAR in direct and indirect export transactions for which Federal Revenue Service (“RFB”) understands that constitutional immunity does not apply; and, (iii) mandatory payment of social security contribution on resale of merchandise in domestic market and to third parties that are not included in calculation basis of social contribution levied only on gross revenue from establishment production and not from acquired merchandise.

(iii) IPI

SRF Regulatory Instruction no. 67/98 supported procedure adopted by industrial establishments that made shipments without recording and paying IPI related to transactions with cane sugars: demerara, high-quality crystal, special crystal, extra special crystal, and granulated refined sugar carried out in the period from July 6, 1995 to November 16, 1997, and with refined amorphous sugar in the period from January 14, 1992 to November 16, 1997. This standard was carried into effect in the respective proceedings brought by RFB, whose likelihood of loss is classified as not more likely yes than no, according to the assessment of the Group’s legal advisors.

78

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

(iv) IRPJ and CSLL

This refers, substantially, to tax assessment notices, issued by the Federal Revenue Service of Brazil charging IRPJ and CSLL for prior financial years, relating to: (i) deductibility of amortization expenses of determined goodwill; (ii) offset of tax losses and a negative calculation base of CSLL; and (iii) the taxation on differences in the revaluation of assets comprising property, plant, and equipment. The Group has contested these charges at the competent spheres.

(v) PIS and COFINS

This refers, substantially, the rejection of PIS and CONFINS credits, in the non-cumulative system, provided for in the Laws 10,637/2002 and 10,833/2003, respectively. These rejections arise, in summary, due to the restrictive interpretation of the Secretariat of the Federal Revenue Service in regard to the concept of “inputs” as well as differences regarding the interpretation of the referred to laws. Such questions are still at the administrative level.

(vi) Offsets with IPI credit—IN 67/98

SRF Regulatory Instruction Number 67/98 brought with it the possibility of a refund of IPI collected in the period from January 14, 1992, to November 16, 1997, on amorphous refined sugar. Accordingly, RESA, for the periods in which payment was made, it pleaded to offset amounts against other taxes due. However, the Federal Revenue Service dismissed requests for restitution as well as an offset. Thus, RESA administratively appealed against the dismissal.

After notification of payment of debts object to an offset in view of the changes introduced by IN SRF Number 210/02, RESA filed a writ of mandamus with an injunction request to suspend the enforceability of offset taxes, with the aim of impeding the Public Administration from executing these debts. The injunction was granted by the competent court, and the probability of loss is considered not more likely yes than no by the Management.

(b) Civil, labor and environmental

	2016		2015
Civil		918,857		1,164,457
Labor		673,463		521,751
Environmental		44,484		30,842
		1,636,804		1,717,050
Non-reimbursable legal disputes		474,057		343,261
Reimbursable legal disputes		1,162,747		1,373,789
		1,636,804		1,717,050

79

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

17. Commitments

• Sales

The Group, by means of RESA, controls entities operating in the sugar and ethanol business as well as electric energy cogeneration. Sales contracts are managed on a consolidated basis, associated with the business and are not tied to a specific entity. Thus, the whole Group in conjunction with its subsidiaries is responsible for all of the sales commitments.

Sales in the commodity market made substantially on the date of the sale price. However, the Group has several agreements in the market of sugar and ethanol committing itself to selling certain volumes in future crops.

Sugar sales commitments, in tons, on March 31, 2016, are as follows:

2017	2,450,414
2018	514,000
2019	514,000
2020	514,000
Total	3,992,414

Ethanol sales commitments, in cubic meters, on March 31, 2016, are as follows:

2017	2,077,194
2018	491,169
Total	2,568,363

RCSA has diesel sales contracts with third parties.

Diesel sales commitments, in cubic meters, on March 31, 2016, are as follows:

2017	405,500
2018	405,500
2019	405,500
2020	405,500
2021 onwards	1,216,500
Total	2,838,500

Sale of electric energy commitments, in MWh, on March 31, 2016, are as follows:

2017	2,027,861
2018	1,876,707
2019	1,958,175
2020	1,958,175
2021 onwards	11,725,481
Total	19,546,399

80

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

• Purchasing

RESA has various purchase commitments for sugarcane with third parties in order to guarantee part of its production in subsequent harvests. The amount of sugarcane to be acquired is calculated based on the estimated amount per milled area. The amount to be paid by the Group is determined at the end of each harvest, according to prices published by the CONSECANA.

Purchase commitments per crop, in tons, on March 31, 2016, are as follows:

2017	28,944,060
2018	25,349,006
2019	20,945,206
2020	16,941,142
2021 onwards	72,875,184
Total	165,054,598

RESA has contracts to purchase industrial equipment with the purpose of maintenance and expansion of plants, as well as to meet the needs of electric energy cogeneration projects, totaling R$ 91,004.

RCSA has fuel purchase agreements with third parties in order to secure part of its trading future. Purchase commitments per crop for ethanol, diesel, gasoline, jet fuel and biodiesel, in cubic meters, on March 31, 2016, are as follows:

2017	4,128,343
2018	450,000
2019	360,000
Total	4,938,343

RCSA also has contracts for rail transportation, road, and ferry services, with the purpose of transporting fuel from the supply bases to the service stations. The amount to be paid by RCSA is determined according to the price agreed in the contract. Purchase commitments per crop, in cubic meters transported, on March 31, 2016, are as follows:

2017	2,103,825
2018	2,280,343
2019	2,059,695
2020	2,068,295
2021 onwards	6,128,595
Total	14,640,753

81

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

• Warehousing services

RCSA has stockpiling service contracts for fuels with third parties, in accordance with logistics and storage objectives of fuels in certain regions. Stockpile commitments per crop, in cubic meters, on March 31, 2016, are as follows:

2017	2,558,092
2018	1,008,326
2019	577,300
2020 onwards	231,300
Total	4,375,018

• Contracts of sharecropping and land leasing

RESA has sharecropping and land leasing contracts for sugarcane plantations, which shall end in 20 years.

Payments for these obligations are calculated by means of an ATR disclosed by CONSECANA and the volume of sugarcane per hectare as defined in the contract.

The expected, non-cancellable, payments on these contracts, are as follows:

Up to 1	614,809
From 1-5	1,671,469
Over 5	1,076,825
Total	3,363,103

18. Equity

As described on Note 2.1(a) combined consolidated companies do not operate as a single legal entity.

a) Share capital

a.1) RESA

At the Special Shareholders’ Meeting, held on February 7, 2014, a new capital increase in the amount of R$ 8,427 was approved by the Company, by means of the issuance of 7,818,300 new class B preferred shares, which was fully subscribed by Cosan and paid on May 2, 2014.

On June 23, 2014, the shareholder Cosan S.A. Indústria e Comércio (“Cosan”) transferred all 2,951,297,817 common shares held in the Company to Cosan Investimentos e Participações S.A. (“CIP”), with the reserve of usufruct for Cosan, until October 1, 2021, on all political rights, the right to receive interest on own capital, and the right to receive dividends linked to such shares, decided by the Company on April 30, 2014, based on profits earned until March 31, 2014.

At the Special Shareholders’ Meeting held on January 21, 2015, the conversion of 100,000 class C preferred shares into an equal number of class D preferred shares (all held by the shareholders SBHBV), was approved by the shareholders of RESA.

82

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

As mentioned in note 1.c, in Special Shareholders’ Meeting held on August 31, 2015, Shell and Cosan’s shareholders decided and approved RESA’s capital increase of R$ 1,500,000 in domestic currency through issuance of 1,340,687,564 new nominative common shares, carried out proportionately to each 50% shareholder.

As of March 31, 2016, RESA’s share capital is R$ 6,516,354 (R$ 5,016,354 in 2015 and 2014). As of March 31, 2016 and 2015, that caption does not include the balance of redeemable preference shares in the amount of R$ 93,300 (R$ 264,276 in 2014), totaling R$ 6,423,054 (R$ 4,923,054 in 2015 and R$ 4,752,078 in 2014). Share capital is fully subscribed for and paid in and is divided as follows:

	Shareholders (shares in units)
	Shell		CIP		Cosan		Total
Common		3,621,641,599		3,621,641,599		—		7,243,283,198
Class A preferred shares		—		—		1		1
Class B preferred shares		—		—		133,242,457		133,242,457
Class C preferred shares		663,476		—		—		663,476
Class D preferred shares		100,000		—		—		100,000
Total at March 31, 2016		3,622,405,075		3,621,641,599		133,242,458		7,377,289,132
Total at March 31, 2015 and 2014		2,952,061,293		2,951,297,817		133,242,458		6,036,601,568

Redeemable preference shares in RESA

As mentioned in Note 8.a.3, the tax benefits resulting from NOL and Goodwill balances recognized before the Raízen formation (Note 1), should be refund to the shareholders as the Group use them as a decrease in balances of the taxes payable.

The refunds of these NOL amounts are via payment of dividends in the amount of the tax benefits used by the Group from the period from January to December every year for the class B preferred shares to Cosan and the class C and D preferred shares to Shell.

At the Annual General Meeting (AGO) held on July 19, 2013, the shareholders of RESA approved an additional payment of dividends to those declared on March 31, 2013, of R$ 6,916, related to preferred shares, totaling R$ 64,920, which were settled on July 29, 2013.

During the year ended March 31, 2014, RESA made the revision of preferred share balances and determined a reduction of R$ 11,812 in reference to the obligation along with Cosan, due to certain tax benefits that will not be used by RESA.

At the Ordinary General Meeting (“OGM”) held on July 28, 2014, the shareholders of RESA approved the payment of R$ 42,381, or rather, less than was declared on March 31, 2014, of R$ 1,255, related to dividend of preferred shares, which were settled on July 29, 2014.

During the year ended March 31, 2015, RESA entered into the program for the settlement of debt installments of Refis IV, with the Federal Revenue Service of Brazil. This program allowed RESA to use NOL´s owned by Cosan, arising prior to the formation of the Group, thus resulting in a write-off of class B preferred shares, of R$ 157,010.

83

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

In addition, as of March 31, 2015, RESA proposed the allocation of dividends to holders of class B preferred shares of R$ 15,221, corresponding to the partial use of the tax benefit balance for that year.

As of March 31, 2016 and 2015, the balance of preferred shares (class B and C) calculated in equity under “Share capital”, totaled R$ 93,300 (R$ 264,276 in 2014), of which R$ 89,672 (R$ 260,738 in 2014) belongs to Cosan shareholder and R$ 3,538 (same as in 2014) belongs to Shell shareholder (Note 8.a.3).

a.2) RCSA

On December 26, 2013, shareholder Cosan transferred to CIP all 1,651,584,242 ordinary shares held that were issued by RCSA with reserve of usufruct for Cosan until April 30, 2021, on all political rights, the right to receive interest on own capital, and the right to receive dividends linked to such shares, decided by RCSA on April 30, 2014, based on profits earned until March 31, 2014.

At the Special Shareholders’ Meeting held on January 21, 2015, the conversion of 100,000 class C preferred shares into an equal number of class D preferred shares (all held by the shareholders SBHBV), was approved by the shareholders of RESA.

As mentioned in Note 1.c, in Extraordinary Shareholders’ Meeting held on August 31, 2015, Shell and Cosan’s shareholders decided and approved redemption of 1,641,750,012 common shares against share capital decrease of R$1,500,000, carried out proportionately to the interest held by each of the shareholders, that is, corresponding to 50% of common shares of each one.

As of March 31, RCSA’s share capital is R$ 1,843,720 (R$ 3,343,720 in 2015 and 2014). As of March 31, 2016, 2015 and 2014, it does not include the balance of redeemable preference shares in the amount of R$ 10,732, R$ 148,802 and R$ 274,392, totaling R$ 1,832,988, R$ 3,194,918 and R$ 3,069,328, respectively. Share capital is fully subscribed for and paid in and is divided as follows:

	Shareholders (shares in units)
	Shell		CIP		Cosan		Total
Common		830,709,236		830,709,236		—		1,661,418,472
Class A preferred shares		1		—		—		1
Class B preferred shares		—		—		93,648,276		93,648,276
Class C preferred shares		88,746,249		—		—		88,746,249
Class D preferred shares		100,000		—		—		100,000
Class E preferred shares		174,038,252		—		—		174,038,252
Total at March 31, 2016		1,093,593,738		830,709,236		93,648,276		2,017,951,250
Total at March 31, 2015 and 2014		1,914,468,744		1,651,584,242		93,648,276		3,659,701,262

84

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

Redeemable preference shares in RCSA

The tax benefits arising from the utilization of NOL balances generated by Shell before the formation of the RCSA, as well as tax benefits arising from goodwill tax amortization from Cosan’s contribution and also the tax benefits arising from the utilization of Pis and Confins credits from the contribution of Fix Investimentos Ltda. (investment company of the subsidiary Raízen Mime Combustíveis S.A.), should be refunded to the respective shareholders of RCSA to use as a decrease of the balances of taxes payable. These refunds required the issue of class A preferred shares solely for Fix, class B for COSAN and class C, D and E for Shell with the purpose of compensating them through the payment of dividends in the amount of the tax benefit used by RCSA during the calendar year, from January to December, each year.

On March 31, 2014, RCSA proposed an allocation of dividends to holders of class B and class C preferred shares of R$ 60,503 and R$ 127,358, Cosan and Shell, respectively, corresponding to partial use of the tax benefit balance for the same financial year ending on that date, totaling R$ 187,861.

At the Special Shareholders’ Meeting held on July 28, 2014, the shareholders of RCSA approved the payment of R$ 240,409, or rather, greater than that declared on March 31, 2014, of R$ 52,548, related to the preferred shares, of which was settled on July 29, 2014. These dividends of R$ 164,779 and R$ 75,630 were credited to the shareholders of Shell and Cosan, respectively.

In addition, at the end of the year ended March 31, 2015, RCSA proposed allocation of dividends to holders of class B and class C preferred shares of R$ 15,127 and R$ 58,495, Cosan and Shell, respectively, corresponding to partial use of the tax benefit balance for the same financial year, totaling R$ 73,622.

As mentioned in Note 8.a.3, during year ended March 31, 2016, RCSA recognized Shell’s supplementary NOL and GW balances in the amount of R$ 78,124, calculated in 2010 and 2011.

At the Special Shareholders’ Meeting held on December 30, 2015, the shareholders of RCSA approved the creation of class E preferred shares, as well as the conversion of 174,038,252 class C preferred shares, owned by Shell, into class E preferred shares. This new class of shares aims to repay the shareholder Shell by using RCSA tax credits originating for the highest payment of IRPJ and CSLL, between the months of January 2010 and May 2011, totaling R$ 258,250 (Notes 8.a.3 and 15.b).

On March 31, 2016, RCSA accrued dividends payable for the use of NOL and GW, relative to the calendar year of 2015 of R$ 138,070 (Note 8.a.3), by reducing capital reserve. This transaction did not generate changes in equity.

As of March 31, 2016 and 2015, the remaining balance of preferred shares payable to Shell and Cosan, in equity totals R$ 10,732 and R$ 148,802, respectively.

85

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

b) Capital reserves

Capital reserve

Mainly consists of goodwill resulting from the difference between the subscription price paid for the shares and their nominal values. The reserve may only be used to increase capital, absorb losses, redeem, reimburse or purchase shares or to pay cumulative dividends to preference shares.

Capital reserves includes a surplus paid by RESA on the acquisition of an additional ownership interest in the subsidiary TEAS, amounting to R$ 5,973, which occurred on April 24, 2013.

As mentioned earlier, Cosan settled debt installments with the Federal Revenue Service of Brazil through the use of NOLs. Thus, the capital reserve was reduced by R$ 164,377, comprising: (i) R$ 157,010 arising from the NOL owned by COSAN with the obligation to pay dividends on preferred payable shares; and, (ii) R$ 7,367 corresponding to the NOL of the subsidiary of RESA, Benálcool Açúcar e Álcool Ltda., whose tax credits are not related to the class B preferred shares created on the formation of the Group.

As mentioned in Note 15.a.2, on March 31, 2016, RCSA accrued dividends exclusive to Shell of R$ 138,070, upon reduction of this reserve.

Goodwill special reserve

Share premium results from downstream mergers in the Group that became deductible for income and social contribution tax purposes. Therefore, the Group recognized goodwill special reserve as an effect of downstream mergers and as an offsetting entry to deferred tax assets that is equivalent to the 34% tax benefit resulting from the amortization of this goodwill.

Merger of Curupay by TEAS

Due to the reverse merger of Curupay by TEAS, whose main assets correspond to the investments held by the share capital of Curupay and tax goodwill which will be deductible for tax purposes from taxable income. Thus, RESA recorded a goodwill special reserve, in equity, reflecting the effect of the reverse merger of Curupay by its subsidiary TEAS in return for their investment (Note 26) of R$ 2,004.

c) Dividends and interest on own capital (“JCP”)

Dividends are not determined by the calculations of the combined consolidated financial statements, but using the individual financial information of RESA and RCSA.

Bylaws of RESA and RCSA assure shareholders a minimum mandatory dividend of 1% of net income at the end of fiscal year, adjusted pursuant to LSA.

86

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

The individual calculations for the year ended March 31, 2016, and 2015, were determined as follows:

• RESA

	2016			2015			2014
Net income (loss) for the period		1,185,644			110,999			140,883
(-) Formation of legal reserve—5%		(59,283	)		(5,550	)		(7,044	)
(-) Effect of subsidiary tax incentives		(139,885	)		—			(30,256	)
Dividend distribution calculation basis		986,476			105,449			103,583
Common shares
Minimum mandatory dividend—1%		9,865			1,054			1,036
Dividends to holders of class B preferred shares		—			15,221			43,636
Dividends to holders of class D preferred shares		—			791			—
Total provisioned dividends		9,865			17,066			44,672
Dividends and interest on own capital—remaining		125,000			34,000			34,000
Total in the Consolidated		134,865			51,066			78,672

• RCSA

	2016			2015			2014
Net income for the year		1,164,287			1,202,294			1,063,546
(-) Formation of legal reserve—5% (Note 16.d.i)		—			(60,113	)		(53,178	)
Dividend distribution calculation basis		1,164,287			1,142,181			1,010,368
Common shares
Minimum mandatory dividend—1%		11,643			11,422			10,104
(-) Interest on equity		(184,500	)		(190,500	)		(183,000	)
(-) Dividends paid in advance		(943,285	)		(539,360	)		(360,000	)
Dividends and interest on own capital—remaining		140,050			—			19,550
Preferred shares		138,799			74,412			187,861
Total in Parent Company		278,849			74,412			207,411
Dividends payable to non-controlling shareholders		9,150			9,545			14,068
Total in the Consolidated		287,999			83,957			221,479

87

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

Changes in balances of liabilities from dividends and interest on own capital in March 31, 2016 and 2015 are as follow:

Companies

Dividend

Settlement period

Approval on Extraordinary Shareholders meeting

Type and class of share

Gross amount

No impact in equity

Net amount

Receiver

Percentage

Payment date

RESA

Interest on own capital

Year ended March 31, 2014

12/31/2013

Ordinary

—

—

34,000

Shell and Cosan

50% each

10/23/2015

RCSA

Intermediary dividends

Retained earnings

04/24/2015

Ordinary

225,000

—

225,000

Shell and Cosan

50% each

05/29/2015

Mime

Intermediary dividends

04/01/14 to 03/31/15

04/29/2015

Ordinary

9,231

3,975

13,206

Non-controlling interest

24%

04/30/2015

Sabbá

Reversal ordinary dividends

Year ended March 31, 2015

08/14/2015

Ordinary

(2,372

)

3,866

1,494

Non-controlling interest

20%

04/30/2015

RCSA

Ordinary dividends

Retained earnings

07/31/2015

Ordinary

98,060

—

98,060

Shell and Cosan

50% each

10/23/2015

RCSA

Intermediary dividends

04/01/15 to 06/30/15

07/31/2015

Ordinary

169,032

—

169,032

Shell and Cosan

50% each

10/23/2015

RCSA

Interest on own capital

Retained earnings

07/31/2015

Ordinary

18,400

—

15,640

Shell and Cosan

50% each

10/23/2015

RCSA

Interest on own capital

04/01/15 to 06/30/15

07/31/2015

Ordinary

57,000

—

48,450

Shell and Cosan

50% each

10/23/2015

RCSA

Intermediary dividends

07/01/15 to 12/31/15

10/22/2015

Ordinary

178,153

—

178,153

Shell and Cosan

50% each

10/23/2015

RCSA

Interest on own capital

07/01/15 to 12/31/15

10/22/2015

Ordinary

38,300

—

32,555

Shell and Cosan

50% each

10/23/2015

RCSA and RESA

Exclusive dividends

Year ended March 31, 2015

07/31/2015

Preferential B

—

—

30,347

Cosan

100%

10/23/2015

RCSA

Exclusive dividends

Year ended March 31, 2015

07/31/2015

Preferential C

—

—

58,495

Shell

100%

10/23/2015

RCSA and RESA

Exclusive dividends

Year ended March 31, 2015

07/31/2015

Preferential D

—

—

1,582

Shell

100%

10/23/2015

RESA

Exclusive dividends

Year ended March 31, 2015

07/31/2015

Ordinary

—

—

1,054

Shell and Cosan

50% each

10/23/2015

RCSA

Intermediary dividends

10/01/15 to 11/30/15

12/15/2015

Ordinary

255,100

—

255,100

Shell and Cosan

50% each

12/23/2015

RCSA

Interest on own capital

10/01/15 to 11/30/15

12/15/2015

Ordinary

23,200

—

19,720

Shell and Cosan

50% each

12/23/2015

RCSA

Interest on own capital

01/01/15 to 09/30/15

12/15/2015

Ordinary

21,700

—

18,445

Shell and Cosan

50% each

12/23/2015

RCSA

Interest on own capital

12/01/15 to 12/31/15

12/31/2015

Ordinary

11,300

—

9,605

Shell and Cosan

50% each

01/31/2016

RCSA

Intermediary dividends

12/01/15 to 12/31/15

01/13/2016

Ordinary

229,000

—

229,000

Shell and Cosan

50% each

01/15/2016

RESA

Intermediary dividends

Retained earnings

01/13/2016

Ordinary

260,700

—

260,700

Shell and Cosan

50% each

01/15/2016

Sabbá

Complementary dividends

Year ended March 31, 2015

03/18/2016

Ordinary

2,372

(878

)

1,494

Non-controlling interest

20%

08/20/2015

Dividends and interest on own capital paid during the year

1,701,132

50% each

RCSA

Intermediary dividends

01/01/16 a 02/29/16

03/18/2016

Ordinary

112,000

—

112,000

Shell and Cosan

50% each

04/01/2016

RCSA

Interest on own capital

01/01/16 a 02/29/16

03/18/2016

Ordinary

33,000

—

28,050

Shell and Cosan

50% each

04/01/2016

RESA

Ordinary dividends

Retained earnings

03/18/2016

Ordinary

125,000

—

125,000

Shell and Cosan

50% each

04/01/2016

RCSA

Provision of minimum obligatory dividends

Year ended March 31, 2016

—

Preferential D

729

—

729

Shell

100%

Pending

RESA

Provision of minimum obligatory dividends

Year ended March 31, 2016

—

Preferential D

9,865

—

9,865

Shell and Cosan

50% each

Pending

Mime

Provision of minimum obligatory dividends

Year ended March 31, 2016

—

Ordinary

4,799

—

4,799

Non-controlling interest

24%

Pending

Sabbá

Provision of minimum obligatory dividends

Year ended March 31, 2016

—

Ordinary

4,351

—

4,351

Non-controlling interest

20%

Pending

Dividends and interest on own capital payable consolidated as of March 31, 2016

284,794

Impacts of dividends and interest on own capital on consolidated equity

1,883,921

88

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

Companies

Dividend

Settlement period

Approval on Extraordinary Shareholders meeting

Type and class of share

Gross amount

No impact in equity

Net amount

Receiver

Percentage

Payment date

RCSA

Interest on own capital

Year ended March 31, 2014

04/24/2015

Ordinary

—

—

19,550

Shell and Cosan

50% each

10/31/2014

RCSA

Exclusive dividends

Year ended March 31, 2014

04/29/2015

Preferential C

—

—

127,357

Shell

100%

07/28/2015

RCSA

Exclusive dividends

Year ended March 31, 2014

08/14/2015

Preferential B

—

—

60,504

Cosan

100%

07/28/2014

MIME

Ordinary dividends

Year ended March 31, 2014

07/31/2015

Ordinary

—

5,847

5,847

Non-controlling interest

24%

04/15/2014

MIME

Intermediary dividends

01/03/14 a 30/04/14

07/31/2015

Preferential A

—

98

98

Non-controlling interest

24%

10/31/2014

Sabbá

Interim dividends

Year ended March 31, 2014

07/31/2015

Ordinary

—

781

781

Non-controlling interest

20%

05/27/2014

RCSA

Complementary dividends

Retained earnings

07/31/2015

Ordinary

246,682

—

246,682

Shell and Cosan

50% each

10/31/2014

RCSA

Exclusive dividends

Retained earnings

10/22/2015

Preferential C

—

36,843

36,843

Shell

100%

07/28/2014

RCSA

Exclusive dividends

Retained earnings

10/22/2015

Preferential B

—

15,126

15,126

Cosan

100%

07/28/2014

RCSA

Interest on own capital

02/01/14 to 09/30/14

07/31/2015

Ordinary

109,500

—

93,075

Shell and Cosan

50% each

10/31/2014

RCSA

Intermediary dividends

02/01/14 to 09/30/14

07/31/2015

Ordinary

220,360

—

220,360

Shell and Cosan

50% each

10/31/2014

RCSA

Intermediary dividends

04/01/14 a 11/30/14

07/31/2015

Ordinary

200,000

—

200,000

Shell and Cosan

50% each

12/31/2015 and 07/01/2015

RCSA

Interest on own capital

10/01/14 a 12/31/14

07/31/2015

Ordinary

45,000

—

38,250

Shell and Cosan

50% each

03/18/2015

RCSA

Intermediary dividends

04/01/14 a 01/31/15

12/15/2015

Ordinary

119,000

—

119,000

Shell and Cosan

50% each

03/18/2015

RCSA

Interest on own capital

01/01/15 a 02/28/15

12/15/2015

Ordinary

36,000

—

30,600

Shell and Cosan

50% each

03/18/2015

Dividends and interest on own capital paid during the year

1,214,073

50% each

RCSA

Provision of minimum obligatory

Year ended March 31, 2015

—

Preferential B

—

15,126

15,126

Cosan

100%

10/23/2015

RCSA

Provision of minimum obligatory

Year ended March 31, 2015

—

Preferential C

—

58,946

58,946

Shell

100%

10/23/2015

RCSA

Provision of minimum obligatory

Year ended March 31, 2015

—

Preferential D

791

—

791

Shell

100%

10/23/2015

MIME

Provision of minimum obligatory dividendum

Year ended March 31, 2015

—

Ordinary

4,800

—

4,800

Non-controlling interest

24%

04/30/2015

Sabbá

Provision of minimum obligatory dividendum

Year ended March 31, 2015

—

Ordinary

4,744

—

4,744

Non-controlling interest

20%

04/30/2015

Dividends and interest on own capital payable consolidated as of March 31, 2015

83,957

Impacts of dividends and interest on own capital on consolidated equity

986,877

89

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

d) Equity valuation adjustment

(i) Actuarial gain (loss)

Corresponds to gains and losses and adjustments for experience and changes in actuarial assumptions on the defined benefit pension plan. This component is recognized in other comprehensive income and will not be reclassified to profit or loss in subsequent periods.

(ii) Income from financial instruments designated as hedge accounting

Corresponds to changes in fair value resulting from cash flow hedges of export income from VHP sugar, exchange fluctuations of ACCs and PEPs and fuel imports.

(iii) Effect of foreign currency translation—CTA

Corresponds to translation differences of the financial information of investees with a functional currency different from the Real, which is the functional currency of both RESA and RCSA.

(iv) Changes in equity valuation adjustments

The changes in equity valuation adjustments are shown as follows:

	2015			Comprehensive income			2016
Effect of foreign currency translation—CTA		1,377			56			1,433
Actuarial (losses) gains arising from the defined benefit pension plan		(9,556	)		464			(9,092	)
Net (losses) gains from financial instruments designated as hedge accounting		22,832			(548,794	)		(525,962	)
		14,653			(548,274	)		(533,621	)
Attributable to:
Group’s controlling shareholders		14,663			(548,274	)		(533,611	)
Group’s non-controlling shareholders		(10	)		—			(10	)
	2014			Comprehensive income			2015
Effect of foreign currency translation—CTA		842			535			1,377
Actuarial losses arising from the defined benefit pension plan		(234	)		(9,322	)		(9,556	)
Net (losses) gains from financial instruments designated as hedge accounting		(11,452	)		34,284			22,832
		(10,844	)		25,497			14,653
Attributable to:
Group’s controlling shareholders		(10,844	)		25,507			14,663
Group’s non-controlling shareholders		—			(10	)		(10	)
	2013			Comprehensive income			2014
Effect of foreign currency translation—CTA		(240	)		1,082			842
Actuarial losses of the defined benefit plans		—			(234	)		(234	)
Net (losses) gains from financial instruments designated as hedge accounting		99,619			(111,071	)		(11,452	)
		99,379			(110,223	)		(10,844	)
Attributable to:
Group’s controlling shareholders		99,379			(110,223	)		(10,844	)

90

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

e) Profit reserves

(i) Legal reserve

The legal reserve consists of the allocation of 5% of the profit reported in the year, according to the by-laws of RESA and RCSA, parent company and in compliance with Corporate Law.

On March 31, 2016, as established by the Corporation Law, RCSA did not allocate 5% of net income to the caption of its legal reserve, since the legal reserves and capital, together, exceeded 30% of the share capital.

(ii) Profit retention reserve

On July 28, 2014, at a meeting of the RCSA Board of Directors, the payment of dividends to the holders of common shares in proportion to the common shares held was decided and approved, amounting to R$ 298,651, with R$ 160,473 paid to Shell and R$ 138,178 paid to Cosan.

As mentioned in Note 18.c, at Special Shareholders’ Meetings held on April 24 and 31 July (RCSA) and on January 13 and March 18, 2016, (RESA), dividends and interest on own capital were approved, amounting to R$ 727,160, partially using the balance of retained earnings of the Group.

The remaining balance of the Group’s profit, after the appropriations made to set up the legal reserve and to accrue dividends was recognized in this account. Under RESA’s and RCSA’s by-laws, up to 80% of the year’s profit may be allocated to that reserve, to fund operations and to new investments and projects, which may not exceed the percentage of 80% of share capital.

(iii) Tax incentive reserve

The tax incentive reserve consists of incentives recognized in RESA’s indirect subsidiary, Raízen Caarapó in the amount of R$ 18,669, arising from Agreement 331/2008 entered into between Raízen Caarapó and the state of Mato Grosso do Sul, whereby a tax benefit on the processing of sugar in that state is granted in an amount equivalent to 67% of the ICMS debt balance.

On March 31, 2016, RESA recorded the recurring effect of the incentives through the subsidiary Raízen Centroeste amounting to R$ 121,216, arising from the state incentive program in the State of Goias, in the form of financing part of the ICMS payment, named “Industrial Development Program of Goias—Produce”, with the subsequent discharge of the amount financed.

For the years ended March 31, 2016, 2015 and 2014, the value of incentives that had an impact on the combined consolidated result was R$ 31,318, R$ 50,217 and R$ 25,260, respectively, recognized in Other operating income, net (Note 21).

91

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

19. Net operating revenue

	2016			2015			2014
Gross revenue from sales and services		76,965,695			67,540,999			60,673,838
Taxes, deductions and rebates on sales(1)		(2,856,508	)		(2,448,270	)		(2,323,661	)
Net operating revenue		74,109,187			65,092,729			58,350,177

⁽¹⁾  As of March 31, 2016, includes amortizations related to exclusive supply rights in the amounts of R$ 309,898 (R$ 266,043 in 2015 and R$ 218,980 in 2014).

The net operating revenue is segregated between the following components:

	2016			2015			2014
Net revenue from sales and services		73,927,705			65,056,894			58,077,225
Gains (losses) on financial instruments designated as hedge accounting		425,903			(609,011	)		261,929
Gains (losses) with commodities derivatives		(244,421	)		644,846			11,023
Net operating revenue		74,109,187			65,092,729			58,350,177

20. Costs and expenses by type

Reconciliation of costs and expenses by nature

Costs and expenses are recognized in the combined consolidated statement of profit or loss by function. The reconciliation of the Group’s results by nature for the year ended March 31, 2016, 2015 and 2014 is as follows:

a) Costs and expenses by type:

	2016			2015			2014
Fuels—resales		(60,062,299	)		(52,422,760	)		(46,308,646	)
Raw materials		(4,146,893	)		(4,057,160	)		(4,073,425	)
Depreciation and amortization(1)		(2,100,251	)		(2,115,123	)		(1,932,623	)
Personnel expenses		(1,648,498	)		(1,439,779	)		(1,280,060	)
Cutting, loading and transportation—CCT		(748,782	)		(685,931	)		(737,132	)
Freight		(289,456	)		(277,667	)		(254,693	)
Commercial expenses		(333,020	)		(330,579	)		(151,727	)
Maintenance materials		(382,211	)		(371,168	)		(300,624	)
Outsourced labor		(273,094	)		(264,142	)		(294,268	)
Rental and leases		(302,654	)		(262,138	)		(276,341	)
Change in fair value of biological assets		637,936			(32,697	)		(64,918	)
Resale of energy		(61,688	)		(112,284	)		—
Logistics expenses		(111,684	)		(92,278	)		(92,377	)
Telecommunications		(22,648	)		(21,737	)		(12,753	)
Other expenses(2)		(709,069	)		(547,340	)		(654,886	)
		(70,554,311	)		(63,032,783	)		(56,434,473	)

⁽¹⁾  Does not include the amortization of exclusive supply rights that are recognized as sales deductions and rebates (Note 19).

⁽²⁾  This includes the income from Investment subsidy—ICMS of R$ 9,328 (R$ 9,340 in 2015 and R$ 6,830 in 2014).

92

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

b) Classified as:

	2016			2015			2014
Cost of products sold and services rendered		(67,815,344	)		(60,487,102	)		(53,851,225	)
Selling		(1,814,897	)		(1,675,793	)		(1,652,352	)
General and administrative expenses		(924,070	)		(869,888	)		(930,896	)
		(70,554,311	)		(63,032,783	)		(56,434,473	)

21. Other operating income, net

	2016			2015			2014
Income from rental and leases		116,620			130,452			121,825
Gain in the sale of property, plant and equipment		70,981			132,825			230,284
Income from royalties		54,250			52,533			49,099
Merchandising		54,239			43,834			41,074
Gain in the fair value of shares(i)		—			40,366			—
Income from investment subsidy—ICMS		31,318			50,217			25,260
Commissions on sales of lubricants and cards		31,067			42,988			48,607
Capital gain on dilution of ownership interest (Note 9.b.iv)		15,583			30,333			—
Store rental revenue		14,707			16,913			16,193
Reversal (provision) for losses in property, plant and equipment and intangible assets, net (Note 11 and 12)		1,869			(63,738	)		(777	)
Formation of provision for legal disputes, net		(9,351	)		(8,330	)		(25,198	)
Other income, net		17,189			1,760			14,622
		398,472			470,153			520,989

⁽ⁱ⁾  During the year ended March 31, 2015, RESA recognized the gain from the sale of the shares held in Codexis.

22. Financial income (loss)

	2016			2015			2014
Financial expenses
Interest		(832,521	)		(663,398	)		(520,939	)
Other		(25,397	)		(23,531	)		(13,412	)
PIS and COFINS credits on financial income		(37,313	)		—			—
Liability monetary variation		(158,120	)		(71,668	)		(59,070	)
		(1,053,351	)		(758,597	)		(593,421	)
Less: amounts capitalized on qualifying assets (Note 11)		34,923			40,636			65,737
Fair value of financial instrument (Note 14)		49,556			—			—
		(968,872	)		(717,961	)		(527,684	)
Financial income
Interest		306,061			227,101			174,337
Yields from financial investments		359,037			248,278			114,355
Monetary variation—assets and others		66,723			16,998			28,915
		731,821			492,377			317,607
Foreign exchange rate, net(i)		(373,960	)		(1,319,651	)		(440,610	)
Net effect of the derivatives(ii)		171,435			720,082			(20,783	)
		(439,576	)		(825,153	)		(671,470	)

⁽ⁱ⁾  Includes foreign exchange, net losses on assets and liabilities denominated in foreign currency; and,

⁽ⁱⁱ⁾  Includes realized results and unrealized with options, swaps and NDFs and other derivatives.

93

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

23. Financial instruments

a) Overview

The Group has exposure to the following market risks:

• Price risk

• Foreign exchange rate risk

• Interest rate risk

• Credit risk

• Liquidity risk

b) Risk management structure

The Group has specific treasury and trading policies that set risk management guidelines.

The Group has two main committees to monitor activities and ensure policy compliance: (i) A risk committee whose members gather weekly to analyze the behavior of commodity and foreign exchange markets and decide on coverage positions and the strategy to fix the prices of sugar exports to reduce the negative effects of changes in prices and foreign exchange rate; and, (ii) an ethanol committee whose members gather monthly to assess the risks posed by the sale of ethanol and to comply with the limits set on risk policies.

The Group is exposed to market risks, as follows: (i) fluctuations in sugar and ethanol prices; (ii) fluctuations in foreign exchange rates; and, (iii) fluctuations in interest rates. The purchases of financial instruments for hedging purposes are made according to an analysis of the risk exposure that Management intends to cover.

94

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

As of March 31, 2016 and 2015, the fair values of transactions with derivative financial instruments for hedging and other purposes were determined according to observable data, such as prices quoted in active markets or discounted cash flows according to market curves and are presented below:

	Notional						Fair value
	2016			2015			2016			2015
Price risk
Commodity derivatives
Futures contracts		2,425,895			1,660,432			(392,352	)		409,316
		2,425,895			1,660,432			(392,352	)		409,316
Foreign exchange rate risk
Foreign exchange rate derivative;
Futures contracts		546,895			(820,443	)		5,080			(3,281	)
Forward contracts		2,802,293			(1,580,467	)		291,758			231,589
Foreign exchange lock		494,014			(5,974	)		40,382			1,191
Foreign exchange swap		(6,233,931	)		(2,685,844	)		392,357			256,170
		(2,390,729	)		(5,092,728	)		729,577			485,669
Interest rate risk
Futures contracts		—			710,000			—			(408	)
Interest rate swap		(622,808	)		(561,400	)		(6,715	)		(4,321	)
		(622,808	)		148,600			(6,715	)		(4,729	)
Total								330,510			890,256
Current assets								638,079			875,205
Non-current assets								597,653			315,279
Total assets								1,235,732			1,190,484
Current liabilities								(579,278	)		(243,997	)
Non-current liabilities								(325,944	)		(56,231	)
Total liabilities								(905,222	)		(300,228	)
Total								330,510			890,256

95

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

c) Price risk

Price risks result from the possibility of fluctuations in the market prices of the products sold by the Group, mainly raw sugar (sugar #11), refined sugar (sugar #5 or white sugar), heating oil and ethanol. These price fluctuations may cause substantial changes in the income statement. To mitigate these risks, the Group permanently monitors markets, seeking to anticipate price changes. The table below shows the positions of derivative instruments to cover the risk of fluctuations in commodity prices:

Price risk: commodity derivatives open on March 31, 2016
Derivatives	Purchased / Sold	Market	Contract	Maturity	Notional (units)				Notional (R$ thousand)			Fair value (R$ thousand)
Future	Sold	NYSE LIFFE	Sugar#5	Jul-16 – Nov-16		32,650		t		43,437			(7,389	)
Future	Sold	ICE	Sugar#11	Jun-16 – Jun-17		2,861,394		t		3,072,006			(420,620	)
Future	Sold	OTC	Sugar#11	Jun-16 – Sep-16		—		t		—			(10,273	)
Sub-total sugar future sold						2,894,044		t		3,115,443			(438,282	)
Future	Purchased	NYSE LIFFE	Sugar#5	Feb-16 – Apr-16		(2,250	)	t		(3,144	)		354
Future	Purchased	ICE	Sugar#11	Jun-16 – Sep-17		(372,686	)	t		(436,676	)		13,933
Sub-total sugar future bought						(374,936	)	t		(439,820	)		14,287
Sub-total sugar future						2,519,108		t		2,675,623			(423,995	)
Future	Sold	BM&FBovespa	Ethanol	Feb-16 – Nov-16		61,950		m³		92,895			537
Future	Sold	CHGOETHNL	Ethanol	Apr-16 – Sep-16		97,600		m³		503			2,650
Future	Sold	NYMEX	Ethanol	Apr-16 – May-16		4,000		m³		7,469			624
Sub-total ethanol future sold						163,550		m³		100,867			3,811
Future	Purchased	BM&FBovespa	Ethanol	Feb-16 – Sep-16		(36,990	)	m³		(59,675	)		(308	)
Future	Purchased	CHGOETHNL	Ethanol	Apr-16 – Sep-16		(108,000	)	m³		(543	)		1,751
Future	Purchased	NYMEX	Ethanol	Mar-16		(1,000	)	m³		(1,940	)		—
Sub-total ethanol future bought						(145,990	)	m³		(62,158	)		1,443
Physical fixed	Sold	CHGOETHNL	Ethanol	Apr-16 – Sep-16		296,989		m³		498,000			(16,892	)
Sub-total physical fixed ethanol sold						296,989		m³		498,000			(16,892	)
Physical fixed	Purchased	CHGOETHNL	Ethanol	Apr-16 – Sep-16		(311,724	)	m³		(481,920	)		33,190
Sub-total physical fixed ethanol bought						(311,724	)	m³		(481,920	)		33,190
Sub-total ethanol future						2,825				54,789			21,552
Physical fixed	Purchased	NYMEX	Ethanol	May-16 – Jul-16		(279,300	)	m³		(304,517	)		10,091
Sub-total physical fixed diesel bought						(279,300	)	m³		(304,517	)		10,091
Sub-total diesel future						(279,300	)			(304,517	)		10,091
Net exposure of derivatives of goods as of March 31, 2016										2,425,895			(392,352	)
Net exposure of derivatives of goods as of March 31, 2015										1,660,432			409,316

96

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

d) Foreign exchange rate risk

Exchange rate risks arise from the possibility of fluctuations in the exchange rates used by the Group for export revenues, imports, financing cash flows and other foreign currency assets and liabilities. The Group uses derivative transactions to manage cash flow risks resulting from export revenues denominated in US dollars, net of other cash flows also denominated in foreign currency. The table below shows the positions outstanding as of March 31, 2016 and 2015, for derivatives used to cover foreign exchange rate risks:

Foreign exchange rate risk: outstanding foreign exchange derivatives as of March 31, 2016
Derivatives	Purchased / Sold	Market	Contract	Maturity	Notional (units)			Notional (R$ thousand)			Fair value (R$ thousand)
Future	Sold	BM&FBovespa	Trade dollar	Apr-16 – May-16		554,750			1,985,037			26,710
Future	Sold	BM&FBovespa	DDI	Jan-17		93,000			330,978			(2,267	)
Subtotal future sold						647,750			2,316,015			24,443
Future	Purchased	BM&FBovespa	Trade dollar	Apr-16 – May-16		(402,250	)		(1,438,142	)		(21,630	)
Future	Purchased	BM&FBovespa	DDI	Jan-16		(93,000	)		(330,978	)		2,267
Subtotal future bought						(495,250	)		(1,769,120	)		(19,363	)
Subtotal future bought/sold						152,500			546,895			5,080
Term	Purchased	OTC/Cetip	NDF	Apr-16 – Feb-17		(1,078,990	)		(3,949,007	)		(171,996	)
Term	Sold	OTC/Cetip	NDF	Apr-16 – May-16		1,750,000			6,751,300			463,754
Subtotal term bought/sold						671,010			2,802,293			291,758
Foreign exchange swap	Purchased	OTC	Foreign exchange swap	Apr-16 – Sep-22		(2,322,390	)		(8,265,154	)		301,252
Foreign exchange swap	Sold	OTC	Foreign exchange swap	Mar-19 – Jan-22		570,745			2,031,223			91,105
Subtotal exchange swap						(1,751,645	)		(6,233,931	)		392,357
Foreign exchange lock	Sold	OTC	Foreign exchange lock	Jul-16 – Oct-16		120,000			494,014			40,382
Subtotal foreign exchange lock						120,000			494,014			40,382
Net exposure of foreign exchange derivatives as of March 31, 2016						(808,135	)		(2,390,729	)		729,577
Net exposure of foreign exchange derivatives as of March 31, 2015						(1,645,136	)		(5,092,728	)		485,669

97

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

On March 31, 2016, and 2015, the summary of the quantitative data on net exposure to foreign exchange risk of the Group is presented below:

	2016						2015
	R$			US$ (in thousands)			R$			US$ (in thousands)
Cash and cash equivalents (Note 3)		845,111			237,464			409,428			127,628
Restricted cash (Note 4)		671,214			188,602			30,651			9,555
Accounts receivable—Abroad (Note 5)		119,822			33,668			130,575			40,703
Related parties (Note 8.a)		(108,794	)		(30,570	)		(9,231	)		(2,878	)
Loans and financing (Note 14)		(6,873,488	)		(1,931,352	)		(6,115,042	)		(1,906,185	)
Derivative financial instruments (Note 23.d)(1)		—			808,135			—			1,645,136
Other		—			—			(21,790	)		(6,792	)
Net foreign exchange exposure					(694,053	)					(92,833	)
Derivatives settled in the subsequent month closing(2)					—						(225,000	)
Net foreign exchange exposure, adjusted(3)					(694,053	)					(317,833	)

⁽¹⁾  Refers to the notional foreign exchange derivative transactions.

⁽²⁾  Maturities in April 2016, whose settlement was given by PTAX on the last closing day of the month.

⁽³⁾  The net foreign exchange exposure, this will be substantially offset by probable future revenues of export products.

e) Effects of hedge accounting

The Group formally designates its transactions subject to hedge accounting using derivative financial instruments to hedge cash flows. Hedges are assigned to sugar and ethanol incomes, the cost of import of derivatives and foreign currency debt, documenting: (i) the hedging relationship, (ii) the Group’s risk management purpose and strategy when entering into the hedging instrument, (iii) the identification of the financial instrument, (iv) the covered object or transaction, (v) the nature of the risk to be covered, (vi) the description of the hedging relationship, (vii) the relationship between the hedging instrument and the covered item, and (viii) the retrospective and prospective testing of the effectiveness of the hedging instrument.

98

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

As of March 31, 2016, the impacts recognized in the Group’s equity and the estimated realization in profit or loss are shown below:

March 31, 2016
			Years for realization
Derivatives	Market	Risk	2016/17			2017/18			Total
Future	OTC / ICE	Sugar#11		(328,680	)		(70,356	)		(399,036	)
Future	BMF&BOVESP	Ethanol		1,771			—			1,771
Future	NYMEX	Heating Oil		(6,285	)		—			(6,285	)
Term	OTC / ICE	Foreign exchange		(53,689	)		—			(53,689	)
ACC and PPE	Debt	Foreign exchange		(339,670	)		—			(339,670	)
				(726,553	)		(70,356	)		(796,909	)
(-) Deferred taxes				247,028			23,921			270,946
Effect on equity in 2016				(479,525	)		(46,435	)		(525,963	)

March 31, 2015
			Years for realization
Derivatives	Market	Risk	2015/16			2016/17			Total
Future	OTC / NYBOT	Sugar#11		388,130			7,318			395,448
Future	BMF&BOVESP	Ethanol		(178	)		—			(178	)
ACC and PPE	Debt	Foreign exchange		(360,658	)		—			(360,658	)
				27,294			7,318			34,612
(-) Deferred taxes				(9,292	)		(2,488	)		(11,780	)
Effect on equity in 2015				18,002			4,830			22,832

March 31, 2014
			Years for realization
Derivatives	Market	Risk	2014/15			2015/16			Total
Future	OTC / NYBOT	Sugar#11		(16,377	)		(915	)		(17,292	)
Future	BMF&BOVESP	Ethanol		(61	)		—			(61	)
				(16,438	)		(915	)		(17,353	)
(-) Deferred taxes				5,590			311			5,901
Effect on equity in 2014				(10,848	)		(604	)		(11,452	)

Below are the changes in the balances of other comprehensive income during the year:

99

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

Cash flow hedge

	2016			2015			2014
Balance at the beginning of the year		22,832			(11,452	)		99,619
Gains/(losses) during the financial year:
Gains (losses) on the fair value of futures commodities contracts designated as hedge accounting		(276,590	)		649,186			1,708
Losses on the fair value of foreign exchange contracts lock		—			(1,780	)		—
Losses on the fair value of forward exchange agreements designated as hedge accounting		(42,307	)		—			—
Losses on the foreign exchange variation of debt contracts designated as hedge accounting		(339,670	)		(549,564	)		—
Realization of losses on the income of commodities in net operating revenues		(525,758	)		(231,740	)		(261,929	)
Realization of gain on the income of debt contracts in net operating revenues		360,652			190,693			—
Realization of gains (losses) on financial instruments considered not effective hedge accounting		(5,983	)		(4,830	)		91,929
Other		(1,874	)		—			—
Total effect on the equity valuation adjustment resulting from cash flow hedges (before deferred taxes)		(831,530	)		51,965			(168,292	)
Effect of deferred taxes on equity valuation adjustment		282,735			(17,681	)		57,221
		(548,795	)		34,284			(111,071	)
Balance at the end of the year		(525,963	)		22,832			(11,452	)

f) Interest rate risk

Raízen Group monitors fluctuations in interest rates applied to certain debts, particularly those exposed to the Libor risk, and uses derivative instruments to manage those risks. The table below shows the positions outstanding as of March 31, 2016 and 2015, for derivatives used to cover interest rate risks:

Interest rate risk: Interest derivatives, outstanding as of March 31, 2016
Derivatives	Purchased / Sold		Market		Contract		Maturity		Notional (US$ thousand)			Notional (R$ thousand)			Fair value (R$ thousand)
Interest rate swap		Purchased		OTC		Interest rate swap		Sep-17 – Mar-19		(175,000	)		(622,808	)		(6,715	)
Sub-total interest rate swap										(175,000	)		(622,808	)		(6,715	)
Net exposure of interest derivatives as of March 31, 2016										(175,000	)		(622,808	)		(6,715	)
Net exposure of interest derivatives as of March 31, 2015										46,322			148,600			(4,729	)

g) Credit risk

A substantial part of the Group’s sales are made to a select group of highly qualified counterparties, such as trading companies, fuel distribution companies and major supermarket chains.

The Group manages credit risk by following specific client acceptance standards, analyzing client credit standing and setting exposure limits per client, requiring, when applicable, letters of credit of top tier banks and taking security interest in assets as security for payment of the credit facilities granted to clients. Management considers that the credit risk is substantially covered by the allowance for impairment in respect of trade and other receivables.

100

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

Individual risk limits are determined according to internal and external classifications and the limits set by Group’s Management. The use of credit limits is regularly monitored. No credit limit was exceeded during the year, and Management does not expect any loss from default by these counterparties in amounts higher than those already provided for.

The Group enters into commodity derivative agreements in futures markets and options at the New York Board of Trade—NYBOT and at the London International Financial Futures and Options Exchange—LIFFE, as well as in over-the-counter markets with selected counterparties. The Group enters into foreign exchange rate and commodity derivative agreements at BM&FBovespa and over-the-counter agreements registered with CETIP, mainly with the leading local and foreign banks considered by global credit risk rating agencies to have investment level ratings.

Guarantee margins—Derivative transactions in commodity exchanges (NYBOT, LIFFE, and BM&FBovespa) require guarantee margins. The total margin deposited as of March 31, 2016 is R$ 892,043 (R$ 112,145 in 2015), of which R$ 136,116 (R$ 68,945 in 2015) is in restricted financial investments and R$ 755,927 (R$ 43,200 in 2015) in derivative transaction margins.

The Group’s over-the-counter derivative transactions do not require a guarantee margin.

The credit risk on cash and cash equivalents is mitigated by the conservative distribution of investment funds and CDBs (Note 3). The distribution follows strict criteria for allocation and exposure to counterparties that are major national and international banks, mainly considered investment grade by international rating agencies.

h)Liquidity risk

Liquidity risk is the risk of the Group encountering difficulties in performing the obligations associated with its financial liabilities that are settled using cash payments or with another financial asset. The Group’s approach in managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under normal and stress conditions, without incurring unacceptable losses or with a risk of damage to the Groups’ reputation. As part of its liquidity management process, Management prepares a business plan and monitors its execution, discussing upside and downside risks to cash flows and assessing the availability of funding to support its operations, investments and refinancing requirements.

The table below shows the financial liabilities according to their aging schedules:

	March 31, 2016
	Years
	Up to 1		Up to 2		3-5		Over 5		Total
Loans and financing(1)		1,764,679		2,169,075		9,469,176		2,960,386		16,363,316
Suppliers (Note 13)		1,665,971		—		—		—		1,665,971
Derivative financial instruments (Note 23.b)		579,278		116,352		86,160		123,432		905,222
Related parties (Note 8.a)		860,980		—		—		1,240,405		2,101,385
Total at March 31, 2016		4,870,908		2,285,427		9,555,336		4,324,223		21,035,894

⁽¹⁾  Undiscounted contractual cash flows.

101

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

i) Fair value

Fair value of financial assets and liabilities is the value by which the instrument may be exchanged in a current transaction between parties that are willing to negotiate, and not in a forced sale or settlement. The methods and assumptions used to estimate the fair value are described below.

The fair value of cash and cash equivalents, accounts receivable, other financial assets, accounts payable, related parties and other short-term obligations approximate their carrying amount due to the short-term maturity of these instruments. Fair value of other long-term assets and liabilities do not significantly differ from their carrying amounts.

The fair value of loans and financing approximate the amounts recognized in the financial statements because these financial instruments are subject to variable interest rates (Note 14). The fair value of the tradable Senior Notes is based on prices quoted on the reporting date of the financial statements. On March 31, 2016, the market value of Senior notes due 2017 (Note 14) was 104.13% (107.25% in 2015 and 110.43% in 2014) of face value.

Derivatives are valued using valuation techniques with observable market data and refer, mainly, to swaps of interest rates, foreign exchange forward contracts, and forward commodity contracts. The valuation techniques applied often include pricing models and swaps contracts, with present value calculations. The models incorporate various data, including the credit quality of counterparties, foreign exchange spot, and forward rates, interest rate curves, and forward rate curves of the object commodity.

The categories of financial instruments are as follows:

		Carrying amount						Fair value
	Rating	2016			2015			2016			2015
Financial assets
Cash and cash equivalents, except financial investments (Note 3)	Loans and receivables		862,530			357,429			862,530			357,429
Interest earnings bank deposits (Note 3)	Fair value through profit or loss		3,510,101			3,670,801			3,510,101			3,670,801
Restricted cash (Note 4)	Loans and receivables		874,605			188,624			874,605			188,624
Trade accounts receivable (Note 5)	Loans and receivables		2,064,367			1,903,428			2,064,367			1,903,428
Derivative financial instruments(2) (Note 23.b)	Fair value through profit or loss		1,235,732			1,190,484			1,235,732			1,190,484
Related parties (Note 8)	Loans and receivables		1,204,993			1,250,763			1,204,993			1,250,763
Other financial assets (Note 7)	Loans and receivables		1,455,470			981,351			1,455,470			981,351
			11,207,798			9,542,880			11,207,798			9,542,880
Financial liabilities
Loans and financing(1) (Note 14)	Amortized cost		(9,158,514	)		(11,918,593	)		(9,184,168	)		(12,012,692	)
Loans and financing(1) (Note 14)	Fair value through profit or loss		(3,694,212	)		—			(3,694,212	)		—
Derivative financial instruments(2) (Note 23.b)	Fair value through profit or loss		(905,222	)		(300,228	)		(905,222	)		(300,228	)
Suppliers (Note 13)	Amortized cost		(1,665,971	)		(1,329,591	)		(1,665,971	)		(1,329,591	)
Related parties (Note 8)	Amortized cost		(2,101,385	)		(1,194,700	)		(2,101,385	)		(1,194,700	)
			(17,525,304	)		(14,743,112	)		(17,550,958	)		(14,837,211	)

(1) Reported net of expenses incurred with the placement of the securities; and, (2) As of March 31, 2016, the caption includes derivatives designated as hedging instruments in the negative amount of R$ 796,909 (a positive amount of R$ 34,612 in 2015 and negative amount of R$ 17,353 in 2014). Note 23.e.

102

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

Fair value hierarchy

The Group uses the following hierarchy to determine and disclose the fair values of financial instruments according to the valuation technique used:

• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;

• Level 2: other techniques for which all data that has a significant effect on fair value are observable, whether directly or indirectly; and

• Level 3: techniques that use data that have a significant effect on fair value that are not based on observable market data.

Financial instruments are classified as follows:

Financial instruments measured at fair value on March 31, 2016	Level 1			Level 2			Level 3			Total
Interest earning bank deposits		—			3,510,101			—			3,510,101
Derivative financial assets		134,665			1,101,067			—			1,235,732
Loans and financing		—			(3,694,212	)		—			(3,694,212	)
Derivative financial liabilities		(511,664	)		(383,285	)		(10,273	)		(905,222	)
Total at March 31, 2016		(376,999	)		533,671			(10,273	)		146,399
Total at March 31, 2015		404,941			4,155,429			687			4,561,057

j) Sensitivity analysis

We present below the sensitivity analysis of the fair value of financial instruments according to the types of risk considered relevant by the Group.

Assumptions for the sensitivity analysis

The Group has adopted three scenarios for the sensitivity analysis, one probable and two that may show the effects of deterioration in the fair values of the Group’s financial instruments. The probable scenario was set according to the futures market curves of sugar and the US dollar as of March 31, 2016 and 2015 to determine the fair value balance of derivatives on those dates. Possible and remote adverse scenarios were set considering negative impacts of 25% and 50% on sugar and US dollar price curves, which were considered as a basis for the probable scenario.

103

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

Sensitivity tables

(1) Changes in fair value of derivative financial instruments

					Impacts on 2016 results(*)
	Risk factor	Probable scenario			Possible scenario +(25%)			Balance of fair value			Remote scenario +(50%)			Balance of the fair value
Price risk
Commodity derivatives
Futures contracts:
Purchase and sale commitments	High sugar prices		(423,995	)		(772,336	)		(1,196,331	)		(1,544,672	)		(1,968,667	)
Purchase and sale commitments	Ethanol price increase		21,552			(15,914	)		5,638			(31,828	)		(10,276	)
Purchase and sale commitments	Lower oil prices		10,091			(22,150	)		(12,059	)		(44,300	)		(34,209	)
			(392,352	)		(810,400	)		(1,202,752	)		(1,620,800	)		(2,013,152	)
Foreign exchange rate risk
Foreign exchange rate derivative
Futures contracts:
Purchase and sale commitments	Low in price of R$/US$		5,080			(311,468	)		(306,388	)		(622,936	)		(617,856	)
Fixed-term and Lock Contracts:
Purchase and sale commitments	Low in price of R$/US$		332,140			(814,645	)		(482,505	)		(1,629,290	)		(1,297,150	)
Foreign exchange swaps:
Purchase and sale commitments	Low in price of R$/US$		392,357			(581,182	)		(188,825	)		(1,162,364	)		(770,007	)
			729,577			(1,707,295	)		(977,718	)		(3,414,590	)		(2,685,013	)
Interest rate risk
Interest derivatives
Swap contracts, lock, DI, and NDF	Increase in interest rate		(6,715	)		(528	)		(7,243	)		(1,056	)		(7,771	)
			(6,715	)		(528	)		(7,243	)		(1,056	)		(7,771	)
Total			330,510			(2,518,223	)		(2,187,713	)		(5,036,446	)		(4,705,936	)

^(*)  Results projected to occur within 12 months from March 31, 2016.

(2) Net foreign exchange exposure

The probable scenario considers the position as of March 31, 2016. The effects of the possible and remote scenarios that would be recognized in the combined consolidated statement of income as revenue or expenses on exchange rate fluctuation are as follows:

			Effect of exchange variation
			Scenarios
Net foreign exchange exposure as of March 31, 2016			25%			50%			-25%			-50%
Cash and cash equivalents (Note 3)	845,111			211,278			422,556			(211,278	)		(422,556	)
Restricted cash (Note 4)	671,214			167,804			335,607			(167,804	)		(335,607	)
Accounts receivable from abroad (Note 5)	119,822			29,956			59,911			(29,956	)		(59,911	)
Related parties (Note 8)	(108,794	)		(27,199	)		(54,397	)		27,199			54,397
Loans and financing (Note 14)	(6,873,488	)		(1,718,372	)		(3,436,744	)		1,718,372			3,436,744
Impact on income (loss) for the year				(1,336,533	)		(2,673,067	)		1,336,533			2,673,067

104

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

(3) Interest rate sensitivity

The Group simulated the interest rates of floating rate loans and financing and the CDI yield on financial investments by applying increases and decreases of 25% and 50% as follows:

	March 31, 2016
	Interest rate sensitivity
	Probable scenario			25%			50%			-25%			-50%
Interest earning bank deposits		459,425			114,856			229,713			(114,856	)		(229,713	)
Loans and financing		(702,469	)		(175,617	)		(351,235	)		175,617			351,235

k) Capital management

The Group’s goal, when managing its capital structure, is to ensure that it will continue as a going concern and be able to finance investment opportunities, by keeping a healthy credit profile and offering an appropriate return to its shareholders.

The Group has relationships with large local and international banks and financial institutions, as present below:

Agency	Scale	Rating	Outlook	Date
Fitch	National	AAA (bra)	Stable	10/15/2015
Moody’s	National	Aaa.Br	Negative	05/11/2016
Standard & Poor’s	National	brAAA	Negative	02/17/2016

The financial leverage ratios on March 31, 2016 and 2015 were calculated as follows:

	2016			2015
Third party capital
Loans and financing (Note 14)		12,852,726			11,918,593
(-) Cash and cash equivalents (Note 3)		(4,372,631	)		(4,028,230	)
(-) Financial investments linked to financing (note 4)		(62,302	)		(45,829	)
(-) National Treasury Certificates—CTN (Note 7)		(627,219	)		(501,794	)
(-) Foreign exchange and interest rate derivatives (Note 23.b)		(722,862	)		(480,940	)
		7,067,712			6,861,800
Own capital
Equity
Attributed to the parent company’s shareholders		11,155,313			11,227,763
Interest of non-controlling shareholders		169,573			152,161
		11,324,886			11,379,924
Total own capital and third-parties		18,392,598			18,241,724
Leverage ratio		38	%		38	%

105

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

24. Retirement supplementation plan

Pension fund

Defined contribution

The Group sponsors the Plan Benefit Raiz, administered by Raízprev—Private Pension Plan, which is a closed non-profit complementary Pension Plan Entity (Entity).

The Entity is equipped with administrative, financial and equity autonomy, having as object the administration and implementation of benefit plans of security nature, as defined in the Regulations of Benefit Plans.

The Group has no legal or constructive obligations for further additional contributions if the plan has sufficient assets to pay all benefits or possible occurrence of a deficit.

During the year ended March 31, 2016, the contribution recognized as expense amounted to R$ 15,100 (R$ 16,611 in 2015 and R$ 13,692 in 2014).

Profit sharing

The Group recognizes a liability and a profit sharing expense based on a methodology that considers pre-defined targets to employees. The Group recognizes a provision when it is contractually compelled or when there is a past practice that created non-constructive obligation.

25. Insurance

The Group has an insurance program and risk management that provides consistent coverage and protection for corporate assets and operations.

The coverage is based on a careful study of risks and losses and is realized by local insurance consultants, with the type of insurance contracted considered by Management sufficient to cover any losses that might occur, given the nature of the Group’s activities, and are detailed as follows:

Type of insurance	Coverage	Amount of coverage
Operational risks	Fire, lightning, explosion and others		6,840,068
General liability(1)	Third party complaints		220,000
			7,060,068

⁽¹⁾  Policy contracted for Raízen Group.

The risk assumptions adopted and coverage given are not part of the scope of an audit of financial statements. Accordingly, independent auditors have not examined these figures.

106

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

26. Business combination and reorganization

a) Transactions during the year ended March 31, 2016

(i) Capital increase at Saturno

In Board meetings held on October 13 and November 27, 2015, capital increases were approved at Saturno of R$ 3,586 and R$ 23,420, respectively, by property contributions measured at book value.

That corporate restructuring did not have an impact on the combined consolidated financial statements.

(ii) Merger of Sampras

The Special Shareholders’ Meeting held on November 16, 2015, the merger of Sampras by RCSA whose net assets on October 31, 2015, totaled R$ 281,589, was proposed and approved. Thus, the investment of RCSA in this company was replaced by transferred equity, with the share capital unchanged, and the consequent extinction of Sampras.

That corporate restructuring did not have an impact on the combined consolidated financial statements.

(iii) Capital increase at Bio Jataí

During the year ended March 31, 2016, as a continuation of the corporate restructuring process involving the net assets of the cogeneration of electric energy of the Group, in June 2014, Bio Jatai’s share capital was increased by Raízen Centroeste, through the contribution of its net assets at book value, relative to cogeneration of electric energy.

That corporate restructuring did not have an impact on the combined consolidated financial statements.

b) Transactions during the year ended March 31, 2015

(i) Acquisition of Latina by RCSA

On April 1, 2014, RCSA acquired all the shares of Latina, in the southern region of the country, of R$ 178,336. The purpose of this acquisition was to expand the presence of the Shell brand, products, and services in the three states of the South of Brazil, in addition to improving the efficiency of the Group’s distribution logistics to network stations, especially in the state of Rio Grande do Sul.

107

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

The fair value of acquired assets and assumed liabilities at the date of acquisition of Latina, are as follows:

Accounts	Total
Trade accounts receivable		49,648
Inventories		26,061
Advances to suppliers		10,443
Recoverable taxes		1,729
Judicial deposits		7,925
Deferred taxes (Note 15.e)		(16,926	)
Other assets		41
Property, plant and equipment (Note 11)		27,660
Intangible assets (Note 12)		53,806
Suppliers		(13,515	)
Loans and financing		(22,994	)
Provision for legal disputes		(10,649	)
Salaries and wages payable		(1,103	)
Taxes payable		(1,481	)
Other liabilities		(3,333	)
Net assets		107,312
(-) Consideration transferred, net of cash received		177,744
Final goodwill (Note 12)		70,432

The fair value of acquired assets and assumed liabilities was determined based on level 3 valuation techniques.

At a meeting of partners held on the date of acquisition, the merger of Latina by the Company was approved.

(ii) Acquisition of Cerrado

On December 17, 2013, the Raízen Energia acquired 100% of Cerrado’s shares for R$ 47,500, plus R$ 1,403 for reimbursements of advances related to harvest suppliers of 2014/2015, paid in cash, calculating preliminary goodwill of R$ 33,663 for this operation. This acquisition was entered into in order to increase the Sugar cane stubble and expected synergies arising from existing RESA operations.

During the year ended March 31, 2015, the allocation of the purchase price was concluded by Management, based on the fair value of acquired assets and assumed liabilities, as follows:

Accounts	Total
Biological assets		15,240
(-) Consideration transferred, net of cash received		48,903
Preliminary goodwill		33,663

Land lease agreements (Note 12)	4,184
Agricultural partnership agreements (Note 12)	8,119
Contracts for the supply of sugar cane (Note 12)	3,230
Deferred taxes on the appreciation of assets (Note 15.e)	(6,530	)
	9,003
Final goodwill	42,666

108

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

Additionally, at the EGM of January 29, 2014, the merger of Cerrado by RESA was discussed and approved. Thus, the investment by RESA in this company was replaced by equity, leaving the share capital unchanged, with the consequent extinction of the Cerrado.

(iii) Corporate restructuring involving net assets related to the co-generation of electricity

In June 2014, RESA and its subsidiaries underwent a corporate restructuring, in which 11 new companies were created as holders of permits for exploitation of UTEs, RESA, and its subsidiaries underwent a capital increase of net assets at book value, relating to cogeneration of electric energy in ten of these new companies.

The aforementioned corporate restructuring produced no impact on the combined consolidated financial statements, except for the reversal of deferred taxes on temporary differences of R$ 43,341, due to the fact that UTEs are taxed by on presumed profit regime.

(iv) Corporate restructuring involving liquid assets related to real estate investment activity

On November 18, 2014, Saturno was formed by means of a credit contribution in a current account made by the Company and Sampras, of R$ 999.00 and R$ 1,00, respectively, paid-in on December 23, 2014.

On December 30, 2014, Saturno received an additional capital contribution of R$ 161,067. The capital contributed by the Company is made up of properties measured at book value.

The aforementioned corporate restructuring did not produce any impacts on the consolidated financial statements, except for the partial reversal of deferred taxes on the appreciation of the Company’s assets R$ 24,502, because of Saturno is taxed by on presumed profit regime.

(v) Corporate restructuring involving reverse merger of Curupay by TEAS

• Capital reduction in Tarumã

On 29 October 2014, RESA approved the capital reduction of its subsidiary Tarumã through the cancellation of 419,595,977 shares, amounting to R$ 419,596. RESA was repaid R$ 400,000 upon payment made on October 29, 2014, and received 23,999,999 quotas issued by Curupay, amounting to R$ 19,596, corresponding to the ownership interest of 100% of the share capital of that company.

• Capital increase of RESA in Curupay

On October 30, 2014, RESA subscribed and paid 48,554,683 quotas issued by Curupay, amounting to R$ 48,554, in the following form: (i) Transfer of all 26,318,238 quotas that RESA had from the TEAS issue, corresponding to 66.67% of ownership interest in its share capital, the amount of R$ 40,288, totaling an interest of 100% in share capital of TEAS; (ii) Goodwill arising from the acquisition was R$ 7,301, received as part of the net assets contributed to the formation of Raízen Group; and (iii) Credits from related parties amounted to R$ 965.

109

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

• Reverse merger of Curupay by TEAS

In addition, on October 30, 2014, RESA approved the reverse merger of Curupay by TEAS. As a result of this merger, and considering that the Curupay holds 100% of the share capital of TEAS, there was a capital increase in the company through the issue of 420,432 new shares of R$ 421, with a net balance R$ 60,429 referring to the investment of Curupay in TEAS.

As a result of this operation, in accordance with IAS 28, RESA set up a special reserve of recurring goodwill of R$ 2,004, equivalent to a tax benefit of 34%, which will result from the amortization of goodwill generated in the acquisition of TEAS shares, accounted for as deferred tax assets.

That corporate restructuring did not have impacts on the combined consolidated interim financial information

c) Transactions during the year ended March 31, 2014

(i) Acquisition of interest in the associated company STP

On October 3, 2013, the Group through its subsidiary Sampras, in which RCSA holds a 100% ownership interest, acquired 10% of the common shares of STP for R$ 250,000, paid in cash. STP and RCSA developed a new fuel collection system at the Group’s service stations.

The allocation of the purchase price was concluded by management in accordance with the valuation report prepared by an independent expert on the reporting date of March 31, 2014, the fair value of acquired assets and assumed liabilities, were as follows:

Accounts	Total
Intangible assets (a)		81,219
Deferred taxes		(27,614	)
		53,605
Other assets, net		11,959
		65,564
Consideration transferred		250,000
Investment goodwill		184,436

Fair value of assets acquired and liabilities assumed is classified in level 3.

(a) The asset gains will be amortized according to the following useful lives defined:

Intangible assets	Useful life (in months)		Total
Non-competition agreements		60		1,457
Non-contractual client relationships		147		53,715
Brand		183		26,047
				81,219

110

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

ii) Costa Rica

On June 28, 2012, RESA acquired all the shares of Costa Rica, for R$ 115,000, as follows: i) R$ 100,000 paid in cash, and ii) the conditional payment of up to R$ 15,000, which depended on the fulfillment of certain terms of the agreement. This acquisition was made to increase the sugar cane stubble and expected synergies arising from existing operations of the Company.

On July 6, 2012, the Company settled a conditional installment of R$ 8,435. At the end of the operation, the amount paid for the acquisition of Costa Rica totaled R$ 108,434.

During the year ended March 31, 2014, the allocation of the purchase price was concluded by management, established on the fair value of acquired assets and assumed liabilities, in the following form:

Accounts	Total
Biological assets		20,827
Agricultural partnership contracts		9,375
Sugarcane supply agreements		20,847
Deferred taxes on the appreciation of assets		(17,357	)
		33,692
Consideration transferred, net of cash received		108,434
Goodwill		74,742
Net effect of the sale of contractual rights of agricultural contracts(1)		(17,573	)
Final goodwill		57,169

⁽ⁱ⁾  On September 26, 2012, the Raízen Energia sold to São Martinho S.A. the rights of certain agricultural contracts acquired through the business combination with Costa Rica, amounting to R$ 19,730.

The main differences between the preliminary and the final goodwill values are presented below:

Accounts	Total
Biological assets		20,827
Agricultural partnership contracts		9,375
Sugarcane supply agreements(i)		19,730
		49,932
Consideration transferred, net of cash received		108,434
Preliminary goodwill		58,502
Sugarcane supply agreements		(1,117	)
Deferred taxes on the appreciation of assets		17,357
Net effect of the sale of contractual rights of land leases		(17,573	)
Final goodwill		57,169

Fair value of assets acquired and liabilities assumed is classified in level 3.

111

RAÍZEN Group

Notes to the combined consolidated

financial information as of March 31, 2016

(In thousands of reais – R$, unless otherwise stated)

27. Cash flow supplementary information

	2016			2015			2014
Investing activities:
Transfer of CTC´s shares as debt payment (Note 9.b.iv)		(8,250	)		—			—
Depreciation of agricultural assets capitalized as biological assets (Note 10)		(63,235	)		(75,222	)		(67,339	)
Interest capitalized in fixed assets (Notes 11 and 22)		(34,923	)		(40,636	)		(65,737	)
Exclusive rights to supply fuel payable		(1,735	)		(31,903	)		7,462
Reversal of provisions for removal of tanks and other		1,418			3,951			25,651
Tax credits on fixed assets, including adjustment at present value of property, plant and equipment		(4,387	)		10,600			8,812
		(111,112	)		(133,210	)		(91,151	)
Financing activities:
Dividends and interest on own capital payable (Note 18.c)		(284,794	)		(135,023	)		(300,151	)
Capital contribution by controlling shareholders payable		—			—			8,427
Capital contribution by minority shareholders with dividends		—			1,556			—
Capital contribution by non-controlling shareholders payable (Note 8.a)		—			7,200			—
		(284,794	)		(126,267	)		(291,724	)

28. Subsequent events

Issue of Certificate of Agribusiness Receivables—CRA

According to the closure of the public distribution of the 3^rd and 4^th Series of the 1^st Issue of RB Capital of RESA of Securitization released on May 6, 2016, Tarumã, a subsidiary of RESA, completed the issue of CRAs, raising R$ 675,000 with a maturity in May 2023 (4^th series), considering the full exercise of an Additional Lot Option (20%), in accordance with Article 14, Paragraph 2 of CVM Instruction Number 400 and full exercise of a Supplemental Lot Option (15%), in accordance with Article 24 of CVM Instruction Number 400. The financial settlement occurred on May 5, 2016.

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