Cosan 6-K Current report (foreign)

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report of Foreign Issuer

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

of the Securities Exchange Act of 1934

For the month of September, 2016

Commission File Number: 1-33659

COSAN LIMITED

(Translation of registrant’s name into English)

Av. Juscelino Kubitschek, 1327, – 4^th floor

São Paulo, SP 04543-000 Brazil

(Address of principal executive offices)

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

Form 20-F            X             Form 40-F                          

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

Yes                           No            X            

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

Yes                           No            X            

COSAN LIMITED

Item
1.	Consolidated interim financial statements as at June 30, 2016 and independent auditors’ review report

Cosan Limited

Consolidated interim financial

statements as at June 30, 2016 and

independent auditors’ review report

Cosan Limited

Consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

Contents

Independent auditors’ report on review of interim financial statements	3
Consolidated statements of financial position	4
Consolidated statements of profit or loss and other comprehensive income	6
Consolidated statements of changes in equity	8
Consolidated statements of cash flows	10
Notes to the consolidated financial statements	12

2

Report on review of interim financial information

To the Board of Directors and Shareholders

Cosan Limited

Bermuda

Introduction

We have reviewed the accompanying consolidated interim financial information of Cosan Limited (“The Company”), contained in the Quarterly Information Form—ITR for the quarter ended June 30, 2016, which comprises the statement of financial position as of June 30, 2016 and the respective statements of profit or loss and comprehensive income (loss) for the three and six-month periods then ended and changes in equity and cash flows for the six-month period then ended, including the footnotes.

Management is responsible for the preparation of the consolidated interim financial information in accordance with IAS 34—Interim Financial Reporting, issued by the International Accounting Standards Board—IASB, such as for the presentation of this information in accordance with the regulations of the Brazilian Securities Commission—CVM, applicable to the preparation of Quarterly Information—ITR. Our responsibility is to express a conclusion on this consolidated interim financial information based on our review.

Review scope

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

Conclusion on the consolidated interim financial information

Based on our review, nothing has come to our attention that causes us to believe that the accompanying consolidated interim financial information included in the Quarterly Information Form—ITR referred to above has not been prepared, in all material respects, in accordance with IAS 34 applicable to the preparation of Quarterly Information—ITR, and presented in accordance with the regulations of the Brazilian Securities Commission—CVM.

São Paulo, August 10, 2016

KPMG Auditores Independentes

CRC 2SP014428/O-6

Rogério Hernandez Garcia

Contador CRC 1SP213431/O-5

3

Cosan Limited

Consolidated statements of financial position

(In thousands of Brazilian Reais – R$)

	Note		June 30, 2016		December 31, 2015 (Restated)
Assets
Cash and cash equivalents		6		2,544,034		3,505,824
Restricted cash				—		57,290
Marketable securities		7		1,850,353		605,490
Trade receivables		8		1,044,614		904,245
Derivative financial instruments		27		3,303		138,105
Inventories				644,422		656,901
Receivables from related parties		10		96,416		75,229
Income tax receivable				225,374		135,050
Other current tax receivable		9		184,231		311,892
Dividends receivable				14,205		12,064
Assets held for sale		13		158,005		149,938
Other financial assets				141,064		144,208
Other current assets				152,572		138,995
Total current assets				7,058,593		6,835,231
Trade receivables		8		68,108		60,733
Restricted cash				189,159		200,893
Deferred tax assets		21		1,655,441		1,698,611
Receivables from related parties		10		197,219		221,345
Income tax receivable				200,667		274,597
Other non-current tax receivable		9		724,196		633,549
Judicial deposits		22		707,101		680,224
Derivative financial instruments		27		999,616		2,292,191
Other non-current assets				1,148,795		1,185,787
Investments in associates		11		180,351		184,376
Investments in joint ventures		12		8,347,722		8,237,190
Investment property		13		2,593,649		2,595,035
Property, plant and equipment		14		10,444,705		9,805,887
Intangible assets and goodwill		15		17,242,856		17,309,689
Total non-current assets				44,699,585		45,380,107
Total assets				51,758,178		52,215,338

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

4

Cosan Limited

Consolidated statements of financial position

(In thousands of Brazilian Reais – R$)

	Note		June 30, 2016			December 31, 2015 (Restated)
Liabilities
Loans, borrowings and debentures		16		2,304,564			2,775,510
Leases		17		540,166			539,615
Real estate credits certificates				96,255			88,089
Derivative financial instruments		27		319,193			812
Trade payables		19		1,843,392			1,963,981
Employee benefits payable				217,238			256,279
Income tax payable				81,482			59,620
Other taxes payable		20		187,384			153,540
Concessions payables		18		27,569			20,205
Dividends payable				38,061			39,934
Payables to related parties		10		208,773			204,080
Deferred revenue				14,167			110,517
Other financial liabilities				195,810			236,698
Other current liabilities				361,858			473,753
Total current liabilities				6,435,912			6,922,633
Loans, borrowings and debentures		16		14,869,148			16,053,693
Leases		17		1,110,700			1,202,086
Real estate credits certificate				145,910			196,917
Derivative financial instruments		27		521,200			741,686
Trade payables		19		792			1,031
Other taxes payable		20		47,076			51,327
Provision for legal proceedings		22		1,253,564			1,193,931
Concessions payables		18		2,386,989			2,204,039
Post-employment benefits		28		354,595			344,447
Deferred tax liabilities		21		4,012,491			4,179,564
Preferred shareholders payable in subsidiaries				1,973,074			2,042,878
Deferred revenue				67,498			95,730
Other non-current liabilities				833,327			723,034
Total non-current liabilities				27,576,364			29,030,363
Total liabilities				34,012,276			35,952,996
Shareholders’ equity		23
Share capital				5,328			5,328
Additional paid-in capital				4,052,490			4,006,562
Accumulated other comprehensive loss				(442,704	)		(478,207	)
Retained earnings				2,496,768			2,425,567
Equity attributable to owners of the parent				6,111,882			5,959,250
Non-controlling interests				11,634,020			10,303,092
Total shareholders’ equity				17,745,902			16,262,342
Total liabilities and shareholders’ equity				51,758,178			52,215,338

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

5

Cosan Limited

Consolidated statements of profit or loss and other comprehensive income

For the three and six month periods ended June 30, 2016 and 2015

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

	Note		April 1, 2016 to June 30, 2016			January 1, 2016 to June 30, 2016			April 1, 2015 to June 30, 2015 (Restated)			January 1, 2015 to June 30, 2015 (Restated)
Net sales				3,364,402			6,506,384			3,333,241			5,474,365
Cost of sales				(1,995,688	)		(4,061,792	)		(2,167,637	)		(3,758,978	)
Gross profit				1,368,714			2,444,592			1,165,604			1,715,387
Selling expenses				(257,806	)		(494,635	)		(221,034	)		(440,361	)
General and administrative expenses				(277,213	)		(512,753	)		(233,506	)		(413,318	)
Other (expense) income, net		26		(20,085	)		(57,651	)		37,919			(61,404	)
Operating expense				(555,104	)		(1,065,039	)		(416,621	)		(915,083	)
Income before equity in earnings of investees and financial results				813,610			1,379,553			748,983			800,304
Equity in earnings of investees
Equity in earnings of associates		11		(3,600	)		(5,158	)		1,656			(2,978	)
Equity in earnings of joint ventures		12		252,594			693,938			57,226			227,098
				248,994			688,780			58,882			224,120
Financial results		25
Finance expense				(843,207	)		(1,719,946	)		(649,236	)		(940,848	)
Finance income				329,722			580,495			121,976			191,747
Foreign exchange losses, net				534,151			1,059,505			98,058			(493,756	)
Derivatives				(769,330	)		(1,473,471	)		(179,704	)		375,528
				(748,664	)		(1,553,417	)		(608,906	)		(867,329	)
Profit before taxes				313,940			514,916			198,959			157,095
Income tax (expense) benefit		21
Current				(118,674	)		(220,169	)		(115,853	)		(120,691	)
Deferred				48,379			129,654			32,853			117,382
				(70,295	)		(90,515	)		(83,000	)		(3,309	)
Profit from continuing operations				243,645			424,401			115,959			153,786
Loss from discontinued operations, net of tax				—			—			(3,582	)		(3,582	)
Profit for the period				243,645			424,401			112,377			150,204

6

Cosan Limited

Consolidated statements of profit or loss and other comprehensive income

For the three and six month periods ended June 30, 2016 and 2015

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

	Note		April 1, 2016 to June 30, 2016			January 1, 2016 to June 30, 2016			April 1, 2015 to June 30, 2015 (Restated)			January 1, 2015 to June 30, 2015 (Restated)
Other comprehensive income (loss)		23
Items that may be reclassified to profit or loss:
Foreign currency translation effect				112,145			145,955			13,649			(67,037	)
(Loss) gain on cash flow hedge in joint ventures and subsidiary				(113,645	)		(140,737	)		35,793			56,528
Financial instruments—common transactions				6,000			6,000			—			—
Changes in fair value of available for sale securities				1,268			(1,311	)		3,512			4,998
Taxes on items that may be reclassified to profit or loss				1,006			1,883			(1,568	)		(2,073	)
Total other comprehensive income (loss), net of tax				6,774			11,790			51,386			(7,584	)
Total comprehensive income				250,419			436,191			163,763			142,620
Net income attributable to:
Owners of the Parent				26,362			157,671			(14,130	)		2,973
Non-controlling interests				217,283			266,730			126,507			147,231
Total comprehensive income (loss) attributable to:
Owners of the Parent				58,543			193,174			20,627			(22,269	)
Non-controlling interests				191,876			243,017			143,136			164,889
Basic earnings (loss) per share from continuing operations		24		R$0.10			R$0.60			(R$0.05	)		R$0.01
Diluted earnings (loss) per share from continuing operations		24		R$0.04			R$0.53			(R$0.11	)		(R$0.05	)

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

7

Cosan Limited

Consolidated statements of changes in equity

For the six month periods ended June 30, 2016 and 2015

(In thousands of Brazilian Reais – R$)

			Capital reserve			Accumulated other comprehensive loss						Equity attributable to owners of the parent
	Share capital		Additional paid-in capital						Retained earnings						Non- controlling interests			Total equity
At January 1, 2016		5,328		4,006,562			(478,207	)		2,483,283			6,016,966			10,339,706			16,356,672
Effect of changes to IAS 41—in joint ventures (Note 2.2)		—		—			—			(57,716	)		(57,716	)		(36,614	)		(94,330	)
At January 1, 2016 (restated)		5,328		4,006,562			(478,207	)		2,425,567			5,959,250			10,303,092			16,262,342
Net profit for the period		—		—			—			157,671			157,671			266,730			424,401
Other comprehensive income:
Foreign currency translation effects		—		—			119,024			—			119,024			26,931			145,955
Loss on cash flow hedge in joint ventures and subsidiary		—		—			(87,055	)		—			(87,055	)		(52,245	)		(139,300	)
Financial instruments—common transactions		—		—			3,751			—			3,751			2,249			6,000
Changes in fair value of available for sale securities		—		—			(217	)		—			(217	)		(648	)		(865	)
Total comprehensive income for the period		—		—			35,503			157,671			193,174			243,017			436,191
Contributions by and distributions to owners of the Parent:
Dividends—non-controlling interests		—		(7,091	)		—			—			(7,091	)		7,091			—
Share options exercised		—		578			—			—			578			347			925
Share-based compensation—Subsidiaries		—		3,148			—			—			3,148			2,748			5,896
Dividends		—		—			—			(86,470	)		(86,470	)		(687,799	)		(774,269	)
Total contributions by and distributions to owners of the Parent		—		(3,365	)		—			(86,470	)		(89,835	)		(677,613	)		(767,448	)
Transactions with owners of the Company Acquisition of non-controlling interest		—		49,293			—			—			49,293			1,765,524			1,814,817
At June 30, 2016		5,328		4,052,490			(442,704	)		2,496,768			6,111,882			11,634,020			17,745,902

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

8

Cosan Limited

Consolidated statements of changes in equity

For the six month periods ended June 30, 2016 and 2015

(In thousands of Brazilian Reais – R$)

	Share capital		Capital reserve			Accumulated other comprehensive income			Retained earnings			Equity attributable to owners of the parent			Non- controlling interests			Total equity
			Additional paid-in capital
At January 1, 2015		5,328		3,887,109			(165,618	)		2,125,196			5,852,015			7,649,221			13,501,236
Effect of changes to IAS 41—in joint ventures		—		—			—			(7,457	)		(7,457	)		(4,472	)		(11,929	)
At January 1, 2015 (restated)		5,328		3,887,109			(165,618	)		2,117,739			5,844,558			7,644,749			13,489,307
Net profit for the period		—		—			—			2,973			2,973			147,231			150,204
Other comprehensive income:
Foreign currency translation effects		—		—			(60,767	)		—			(60,767	)		(6,270	)		(67,037	)
Gain on cash flow hedge in joint ventures and subsidiary		—		—			35,102			—			35,102			21,052			56,154
Changes in fair value of available for sale securities		—		—			423			—			423			2,876			3,299
Total comprehensive income for the period		—		—			(25,242	)		2,973			(22,269	)		164,889			142,620
Contributions by and distributions to owners of the Parent:
Dividends—non-controlling interests		—		(1,965	)		—			—			(1,965	)		(1,179	)		(3,144	)
Share based compensation—Subsidiaries		—		3,664			—			—			3,664			2,195			5,859
Dividends		—		—			—			(94,246	)		(94,246	)		(237,586	)		(331,832	)
Total contributions by and distributions to owners of the Parent		—		1,699			—			(94,246	)		(92,547	)		(236,570	)		(329,117	)
Transactions with owners of the parent
Acquisition of non-controlling interest		—		409			—			—			409			(12,594	)		(12,185	)
Business combination ALL		—		118,937			—			—			118,937			2,831,469			2,950,406
Share buy-back cost—Rumo		—		(3,901	)		—			—			(3,901	)		(21,201	)		(25,102	)
		—		115,445			—			—			115,445			2,797,674			2,913,119
At June 30, 2015 (Restated)		5,328		4,004,253			(190,860	)		2,026,466			5,845,187			10,370,742			16,215,929

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

9

Cosan Limited

Consolidated statements of cash flows

For the six month periods ended June 30, 2016 and 2015

(In thousands of Brazilian Reais – R$)

	Note		June 30, 2016			June 30, 2015 (Restated)
Cash flows from operating activities
Profit before taxes				514,916			157,095
Adjustments for:
Depreciation and amortization				816,884			482,062
Equity in earnings of associates		11		5,158			2,978
Equity in earnings of joint ventures		12		(693,938	)		(227,098	)
Loss on disposal of assets				8,517			3,096
Stock option expense		10		5,896			5,859
Change in fair value of investment property		13 / 26		(8,532	)		(23,162	)
Provisions for legal proceedings				60,081			23,537
Indexation charges, interest and exchange gains/losses, net				1,674,733			988,093
Other				(62,779	)		69,877
				2,320,936			1,482,337
Changes in:
Trade receivables				(70,195	)		(61,150	)
Inventories				3,785			4,005
Recoverable taxes				117,200			45,880
Related parties				(44,118	)		(60,268	)
Trade payables				(94,691	)		335,339
Other financial liabilities				(102,005	)		—
Employee benefits				(85,038	)		(51,425	)
Adivances to suppliers				(3,227	)		(25,474	)
Provisions for legal proceedings				(39,593	)		(7,360	)
Judicial deposits				(10,737	)		(16,802	)
Post-employment benefits				(12,685	)		(11,201	)
Income and other taxes				(117,433	)		(113,194	)
Concessions payables				(53,963	)		—
Other assets and liabilities, net				(182,042	)		(119,281	)
				(694,742	)		(80,931	)
Net cash generated by operating activities				1,626,194			1,401,406
Cash flows from investing activities
Capital contribution in associates				(2,715	)		(48,721	)
Marketable securities				(1,202,950	)		183,192
Restricted cash				71,002			74,742
Dividends received from associates				6,076			1,151
Dividends received from joint ventures				443,303			206,425
Net cash acquired in business combination				—			169,703
Put option exercised paid				(186,052	)		—
Acquisition of property, plant and equipment, intangible assets and investments				(1,049,003	)		(797,960	)
Related parties				11,338			—
Proceeds from sale of property, plant and equipment, intangible assets and investments, net				—			1,316
Net cash used in investing activities				(1,909,001	)		(210,152	)

10

Cosan Limited

Consolidated statements of cash flows

For the six month periods ended June 30, 2016 and 2015

(In thousands of Brazilian Reais – R$)

	Note	June 30, 2016			June 30, 2015 (Restated)
Cash flows from financing activities
Loans, borrowings and debentures raised			5,305,061			2,382,655
Payment of loans, borrowings and debentures
Principal			(5,572,362	)		(1,865,705	)
Interest paid			(863,386	)		(488,549	)
Payment of leases
Principal			(230,889	)		(83,372	)
Interest paid			(176,850	)		(63,005	)
Real estate credits certificate			(64,218	)		(33,061	)
Non-controlling interest capital increase			1,978,953			—
Non-controlling interest subscription			28,764			—
Derivative financial instruments			(21,336	)		203,950
Treasury shares			925			(12,185	)
Related parties			—			(3,806	)
Dividends paid			(968,001	)		(356,430	)
Net cash used in financing activities			(583,339	)		(319,508	)
(Decrease) increase in cash and cash equivalents			(866,146	)		871,746
Cash and cash equivalents at beginning of the period			3,505,824			1,649,340
Effects of exchange rate changes on cash held			(95,644	)		10,861
Cash and cash equivalents at end of the period			2,544,034			2,531,947
Supplemental cash flow information:
Income taxes paid			53,806			52,725
Business combination—non-cash effect			—			2,537,831

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

11

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

1 Operations

Cosan Limited (“Cosan”) was incorporated in Bermuda on April 30, 2007. Cosan’s class A common shares are traded on the New York Stock Exchange (NYSE) (ticker—CZZ). The BDRs (Brazilian Depositary Receipts) representing Cosan’s class A common shares are listed on the Brazilian Stock Exchange (BM&FBovespa) (ticker—CZLT33). Mr. Rubens Ometto Silveira Mello is the ultimate controlling shareholder of Cosan. Cosan controls its subsidiaries Cosan S.A. Indústria e Comércio (“Cosan S.A.”) and Cosan Logística S.A. (“Cosan Logística”) through a 62.51% and 72.47% interest, respectively. Cosan, Cosan S.A., Cosan Logística and its subsidiaries are collectively referred to as the “Company”.

The Company’s primary activities are in the following business segments: (i) Piped natural gas distribution to part of the State of São Paulo through its subsidiary Companhia de Gás de São Paulo – COMGÁS (“COMGÁS”); (ii) Logistics services including transportation, port loading and storage of sugar, leasing or lending of locomotives, wagons and other railway equipment, through its indirect subsidiaries Rumo Logística Operadora Multimodal S.A. (“Rumo”) and América Latina Logística S.A. (“ALL”), logistic segment (“Logistic”); (iii) Purchase, sale and leasing of agricultural land through its subsidiaries, Radar Propriedades Agrícolas S.A. and Radar II Propriedades Agrícolas S.A. (“Radar”); (iv) Production and distribution of lubricants, through its indirect subsidiaries Cosan Lubrificantes e Especialidades S.A. (“CLE”) and Comma Oil & Chemicals Ltd. (“Comma”), under the Mobil licensed trademark in Brazil, Bolivia, Uruguay and Paraguay, in addition to the European and Asian market using the Comma brand and corporate activities (“Lubricants”); and (v) other investments, in addition to the corporate structures of the Company (“Cosan’s other business”).

The Company also holds interests in two joint ventures (“JVs”): (i) Raízen Combustíveis S.A. (“Raízen Combustíveis”), a fuel distribution business, and (ii) Raízen Energia S.A. (“Raízen Energia”), which operates in the production and marketing of sugar, ethanol and energy cogeneration, produced from sugar cane bagasse.

On June 30, 2016, Cosan Logística had a negative consolidated working capital of R$262,442 and loss for the period of R$218,013. Nevertheless, it presented a net cash generation from operations of R$743,614 and made investments in the modernization of its fleet and improving the railway network in the amount of R$824,094, in line with its business plan.

On April 22, 2016, GIF, controlled by Gávea Investimentos and shareholder of subsidiary Rumo, exercised its right to exchange 12,831,102 shares of Rumo for shares of subsidiary Cosan S.A in accordance with the shareholders’ agreement signed in 2010, subsequently inserted, between Cosan Logistics, TPG VI Investment Fund Participations, GIF, Cosan SA and the Company. Cosan S.A. and GIF agreed to settle financially the share exchange obligation through payment of R$ 186,052. The shares received were valued at fair value in the amount of R$ 51,660 presented under “other financial assets”. Once buying shares of Rumo, Cosan S.A. composed the RUMO’s non-controlling framework. Considering that the Company is the parent of both companies, the balance of R$51,660 was reclassified from Other financial assets to non-controlling interests.

On April 07, 2016 Rumo completed a capital increase, pursuant to CVM Rule 476 and Regulation “S” for foreign investors, of R$2,600,000 through the issuance of 1,040,000,000 Rumo’s common shares. These funds have been used for cash strengthening and financing of Rumo’s business plan.

Due to this transaction, Company increased its share in subsidiary Cosan Logistica with dilution of non-controlling.

12

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

2 Basis of preparation

2.1 Statement of compliance

The consolidated interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting, as issued by the International Accounting Standards Board (IASB), and in accordance with the regulations issued by the Brazilian Securities Commission—CVM applicable to the preparation of the Quarterly Information—ITR. They do not include all the information required for a complete set of IFRS financial statements. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Company’s financial position and performance since the last annual consolidated financial statements as at and for the year ended December 31, 2015.

The significant judgments made by management in applying the Company’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended December 31, 2015, except for the adoption of new standards and interpretations effective as of January 1, 2016. The Company has not early adopted any other standard, interpretation or amendment that has been issued.

These consolidated financial statements were authorized for issue by the Board of Directors on August 10, 2016.

2.2 New standards, interpretations and amendments adopted by the Company—Restated

The accounting effects of the ALL acquisition are presented in the note 4 and the financial position and consolidated results of operations for the current period are not necessarily comparable with the information presented in previous period.

Although these new standards and amendments apply for the first time in 2016, they do not have a material impact on the annual consolidated financial statements or the interim consolidated financial statements of the Company. The nature and the impact of each new standard or amendment is described below:

Amendments to IAS 16 and IAS 41 Agriculture: Bearer Plants

The amendments change the accounting requirements for biological assets that meet the definition of bearer plants. Under the amendments, biological assets that meet the definition of bearer plants will no longer be within the scope of IAS 41Agriculture. Instead, IAS 16 will apply. After initial recognition, bearer plants will be measured under IAS 16 at accumulated cost (before maturity) and using either the cost model. The amendments also require that produce that grows on bearer plants will remain in the scope of IAS 41 measured at fair value less costs to sell. For government grants related to bearer plants, IAS 20Accounting for Government Grants and Disclosure of Government Assistance will apply. These amendments substantially impact the jointly controlled company Raízen Energia and do not have any effect to the Company since it does not have any bearer plants. The impact related to the initial adoption of the accounting standard for the year ended December 31, 2015, as follow:

13

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

Consolidated statements of financial position

	December 31, 2015
	As issued			IAS 41 effect			Restated
Assets
Current assets		6,835,231			—			6,835,231
Investments in joint ventures		8,329,520			(92,330	)		8,237,190
Other non-current assets		37,142,917			—			37,142,917
		—			—			—
Total assets		52,307,668			(92,330	)		52,215,338
Liabilities
Current liabilities		6,922,633			—			6,922,633
Non-current liabilities		29,030,363			—			29,030,363
Total liabilities		35,952,996			—			35,952,996
Shareholders’ equity
Share capital		5,328			—			5,328
Additional paid-in capital		4,006,562			—			4,006,562
Accumulated other comprehensive loss		(478,207	)		—			(478,207	)
Retained earnings		2,483,283			(57,716	)		2,425,567
Equity attributable to owners of the parent		6,016,966			(57,716	)		5,959,250
Non-controlling interests		10,337,706			(34,614	)		10,303,092
Total shareholders’ equity		16,354,672			(92,330	)		16,262,342
Total liabilities and shareholders’ equity		52,307,668			(92,330	)		52,215,338

14

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

Consolidated statements of profit or loss

	April 1, 2015 to June 30, 2015 (as issued)			IAS 41 effect			April 1, 2015 to June 30, 2015 (restated)			January 1, 2015 to June 30, 2015 (as issued)			IAS 41 effect			January 1, 2015 to June 30, 2015 (restated)
Gross profit		1,165,604			—			1,165,604			1,715,387			—			1,715,387
Operating expense		(416,621	)		—			(416,621	)		(915,083	)		—			(915,083	)
Income before equity in earnings of investees and financial results		748,983			—			748,983			800,304			—			800,304
Equity in earnings of associates		1,656						1,656			(2,978	)					(2,978	)
Equity in earnings of joint ventures		90,274			(33,048	)		57,226			248,045			(20,947	)		227,098
		91,930			(33,048	)		58,882			245,067			(20,947	)		224,120
Financial results		(608,906	)		—			(608,906	)		(867,329	)		—			(867,329	)
Profit before taxes		232,007			(33,048	)		198,959			178,042			(20,947	)		157,095
Income tax (expense) benefit		(83,000	)		—			(83,000	)		(3,309	)		—			(3,309	)
Profit from continuing operations		149,007			(33,048	)		115,959			174,733			(20,947	)		153,786
Loss from discontinued operations, net of tax		(3,582	)		—			(3,582	)		(3,582	)		—			(3,582	)
Profit for the period		145,425			(33,048	)		112,377			171,151			(20,947	)		150,204
Net income attributable to:
Owners of the Parent		6,528			(20,658	)		(14,130	)		16,067			(13,094	)		2,973
Non-controlling interests		138,897			(12,390	)		126,507			155,084			(7,853	)		147,231

15

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

3 Significant accounting policies

The accounting policies set out below have been applied consistently by the Company to all periods presented.

3.1 Basis of consolidation

The consolidated interim financial statements include the accounts of Cosan and its subsidiaries. Cosan’s subsidiaries are listed below:

	June 30, 2016		December 31, 2015
Directly owned subsidiaries
Cosan Logística S.A.		72.47%		63.27%
Cosan S.A. Indústria e Comércio		62.50%		62.51%
Interest of Cosan S.A. in its subsidiaries
Águas da Ponte Alta S.A.		65.00%		65.00%
Bioinvestments Negócios e Participações S.A.		65.00%		65.00%
Comma Oil Chemicals Limited		100.00%		100.00%
Companhia de Gás de São Paulo—COMGÁS(i)		61.73%		61.33%
Cosan Biomassa S.A.		100.00%		100.00%
Cosan Cayman II Limited		100.00%		100.00%
Cosan Global Limited		100.00%		100.00%
Cosan Investimentos e Participações S.A.		100.00%		100.00%
Cosan Lubes Investments Limited		100.00%		100.00%
Cosan Lubrificantes e Especialidades S.A.		100.00%		100.00%
Cosan Luxembourg S.A.		100.00%		100.00%
Cosan Overseas Limited		100.00%		100.00%
Cosan Paraguay S.A.		100.00%		100.00%
Cosan US, Inc.		100.00%		100.00%
Ilha Terminal Distribuição de Produto Químicos Ltda.		100.00%		100.00%
Nova Agrícola Ponte Alta S.A.(ii)		29.50%		29.50%
Nova Amaralina S.A. Propriedades Agrícolas.(ii)		29.50%		29.50%
Nova Santa Barbara Agrícola S.A.(ii)		29.50%		29.50%
Pasadena Empreendimentos e Participações S.A.		100.00%		100.00%
Proud Participações S.A.		65.00%		65.00%
Radar II Propriedades Agrícolas S.A.		65.00%		65.00%
Radar Propriedades Agrícolas S.A.(ii)		29.50%		29.50%
Terras da Ponte Alta S.A.(ii)		29.50%		29.50%
Vale da Ponte Alta S.A.		65.00%		65.00%
Zip Lube S.A.		100.00%		100.00%

16

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

	June 30, 2016		December 31, 2015
Interest of Cosan
Logística S.A. in its subsidiaries
ALL – América Latina Logística Argentina S.A.		25.71%		23.89%
ALL – América Latina Logística Armazéns Gerais Ltda.		28.27%		26.26%
ALL – América Latina Logística Central S.A.		20.79%		19.31%
ALL – América Latina Logística Equipamentos Ltda.(iii)		—		26.26%
ALL – América Latina Logística Intermodal S.A.		28.27%		26.26%
ALL – América Latina Logística Malha Norte S.A.		28.06%		26.06%
ALL – América Latina Logística Malha Oeste S.A.		28.27%		26.26%
ALL – América Latina Logística Malha Paulista S.A.		28.27%		26.26%
ALL – América Latina Logística Malha Sul S.A.		28.27%		26.26%
ALL – América Latina Logística Mesopotâmica S.A.		19.95%		18.53%
ALL – América Latina Logística Participações S.A.(iii)		—		26.26%
ALL – América Latina Logística Rail Management Ltda.		14.14%		13.13%
ALL – América Latina Logística S.A.		28.27%		26.26%
ALL – América Latina Logística Serviços Ltda.		28.27%		26.26%
Boswells S.A.		28.27%		26.26%
Brado Holding S.A.		28.27%		26.26%
Brado Logística e Participações S.A.		17.59%		16.34%
Brado Logística S.A.		17.59%		16.34%
Logispot Armazéns Gerais S.A.		14.42%		13.39%
Paranaguá S.A.		28.22%		26.22%
PGT—Grains Terminal S.A.		28.27%		26.26%
Portofer Transporte Ferroviário Ltda.		28.27%		26.26%
Rumo Logística Operadora Multimodal S.A.		28.27%		26.26%

(i) From June 30, 2016, the subsidiary “Cosan S.A” encrease its share to 61.73% in Comgás due to the capital increase arising from partial use of tax benefit of goodwill as the Annual General Meeting / Extraordinary April 26, 2016 the subsidiary Comgás.

(ii) The Company has an indirect control over the Radar and its subsidiaries, even without controlling interest, as the Shareholders’ Agreement the subsidiary “Cosan S.A” has the power to direct all relevant activities of Radar and exercise most power in all relevant decisions on financial matters and operational radar.

(iii) Incorporated in March 1, 2016 by ALL Intermodal S.A.

3.2 New standards and interpretations not yet adopted

• IFRS 9, published in July 2014, replaces the existing guidance in IAS 39 Financial Instruments: Recognition and Measurement.

IFRS 9 includes revised guidance on the classification and measurement of financial instruments, a new expected credit loss model for calculating impairment on financial assets, and new general hedge accounting requirements. It also carries forward the guidance on recognition and derecognition of financial instruments from IAS 39. The Company has yet to assess IFRS 9’s full impact.

IFRS 9 is effective for annual reporting periods beginning on or after January 1, 2018, with early adoption permitted.

17

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

• IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognized. It replaces existing revenue recognition guidance, including IAS 18 Revenue, IAS 11—Construction Contracts and IFRIC 13—Customer Loyalty Programmes. IFRS 15 is effective for annual reporting periods beginning on or after January 1, 2018, with early adoption permitted.

The Company is currently assessing the potential impacts of adopting IFRS 15.

• IFRS 16—Leases was issued on January 13, 2016. IFRS 16 eliminates the current dual accounting model for lessees, which distinguishes between on-balance sheet finance leases and off-balance sheet operating leases. Instead, there is a single, on-balance sheet accounting model that is similar to current finance lease accounting. For lessees, the lease becomes an on-balance sheet liability that attracts interest, together with a new asset on the other side of the balance sheet. In other words, lessees will appear to become more asset-rich but also more heavily indebted. The new standard takes effect in January 2019. Management is assessing the 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 Company.

4 Business combinations

On 1 April 2015, after the necessary approvals from the competent bodies, the subsidiary “RUMO” incorporated 100% of the common shares of ALL and, through a shareholders’ agreement, now holds its full control and consolidate its results.

The merger took place by exchange of shares, with the issue by Rumo, of 1,963,670,770 registered common shares with no par value, representing 65.67% of its equity in exchange for 100% of the share capital of ALL , represented by 681,995,165 common shares.

As a result of the acquisition, the Company consolidates its participation strategy in the logistics segment and infrastructure in Brazil, incorporating approximately 12,000 km of rail present in ALL Awards.

a) Consideration transferred

The fair value of the ordinary shares issued was based on the listed share price of the ALL (ticker – ALL3.SA) as at March 31, 2015 of R$ 3.97 per share. Additionally, the value was adjusted by the settlement of pre-existing relationship, as follows:

	In thousands of R$
Equity instruments (681,995,165 common shares)		2,707,534
Settlement of pre-existing relationship		29,838
Total consideration transferred		2,737,372

18

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

(i) Settlement of pre-existing relationship

In March 2009, Rumo and ALL entered into an operating agreement (pre-existing relationship) for the supply of sugar transport logistics and other grains from the western of the state of São Paulo to the Port of Santos, in which Rumo has port concessions for lifting services.

According to the terms of the existing agreement, Rumo invested in the construction and improvement of permanent roads under concession of ALL and acquisition of rolling stock for use in the transport of products in the rail network, in order to increase rail freight transport capacity in ALL. In exchange for the Company’s investments, the agreement stipulated that ALL should provide a certain capacity of rail transport services, as well as compensate Rumo through the payment of a fee, fixed contractually, per ton of product transported by ALL on the rail network and / or by the use of undercarriage given by Rumo to ALL.

This pre-existing relationship was settled when Rumo acquired ALL. As a result of this settlement, Rumo recorded a gain of R$ 29,838 in the profit or loss as “other operating income”.

The fair value of the settlement of pre-existing relationship has been the difference between the value of the investment made by Rumo and the discounted cash flow of the remuneration of such investment, considering the volume and contractually agreed rate.

b) Identifiable assets acquired and liabilities assumed

The following table summarizes the recognized amounts of assets acquired and liabilities assumed at the date of acquisition:

Description
Cash and cash equivalents	169,703
Investment securities	940,689
Trade receivables	382,576
Inventories	79,115
Other credits	1,517,924
Property, plant and equipment	7,206,290
Intangible assets	7,652,231
Loans, borrowings and debentures	(6,639,223	)
Leases	(1,857,947	)
Real estate credits certificate	(340,255	)
Trade payables	(915,213	)
Leases and concessions	(1,974,280	)
Provision for legal proceedings	(458,575	)
Deferred tax liabilities	(1,168,034	)
Other liabilities	(1,625,948	)
Consolidated net assets	2,969,053
Non-controlling interests	(231,681	)
Total identifiable net assets acquired	2,737,372

19

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

During the measurement period were identified new information about facts and circumstances existing at the acquisition date related to temporary assets and liabilities were adjusted on completion of the acquisition.

5 Operating segments

Segment information

The following segment information is used by Cosan’s senior management (the “Chief Operating Decision Maker”) to assess the performance of the operating segments and to make decisions with regards to the allocation of resources.

The following statement of financial position and profit or loss selected information by segment was prepared on the same basis as the accounting practices used in the preparation of consolidated information:

20

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

	April 1, 2016 to June 30, 2016																														Additional information
	Raízen Energia			Raízen Combustíveis			COMGÁS			Radar			Lubricants			Logistics			Cosan Corporate			Deconsolidated effects IFRS 11			Segment elimination / adjustments			Total consolidated			Cosan Energia			Cosan Logística
Statement of profit or loss:
Net sales		2,642,897			16,479,574			1,493,958			24,014			488,992			1,376,248			341			(19,122,471	)		(19,151	)		3,364,402			2,007,304			1,376,248
Domestic market		1,001,494			16,479,574			1,493,958			24,014			374,949			1,312,995			341			(17,481,068	)		(19,151	)		3,187,106			1,893,261			1,312,995
External market		1,641,403			—			—			—			114,043			63,253			—			(1,641,403	)		—			177,296			114,043			63,253
Cost of sales		(2,216,693	)		(15,665,191	)		(729,430	)		—			(369,337	)		(907,528	)		(8,544	)		17,881,884			19,151			(1,995,688	)		(1,107,310	)		(907,528	)
Gross profit		426,204			814,383			764,528			24,014			119,655			468,720			(8,203	)		(1,240,587	)		—			1,368,714			899,994			468,720
Selling expenses		(180,311	)		(299,521	)		(159,886	)		—			(95,368	)		(2,451	)		(100	)		479,832			—			(257,805	)		(255,354	)		(2,451	)
General and administrative expenses		(115,335	)		(119,596	)		(84,627	)		(7,114	)		(16,947	)		(82,957	)		(85,567	)		234,931			—			(277,212	)		(149,684	)		(82,957	)
Other income (expense), net		(31,531	)		117,352			(640	)		8,878			152			(10,067	)		(18,408	)		(85,821	)		—			(20,085	)		(10,018	)		(10,068	)
Financial results		206,657			(146,745	)		(45,932	)		4,364			(25,351	)		(406,421	)		(284,025	)		(59,912	)		8,700			(748,665	)		(249,649	)		(406,421	)
Financial expense		(211,252	)		(12,042	)		(164,259	)		(342	)		(13,883	)		(477,461	)		(195,964	)		223,294			8,700			(843,209	)		(343,682	)		(477,461	)
Financial income		165,611			54,659			118,072			4,706			845			74,125			131,974			(220,270	)		—			329,722			255,399			74,125
Foreign exchange losses, net		(45,045	)		423,806			118,707			—			27,928			35,538			351,978			(378,761	)		—			534,151			563,265			35,538
Derivatives		297,343			(613,168	)		(118,452	)		—			(40,241	)		(38,623	)		(572,013	)		315,825			—			(769,329	)		(724,631	)		(38,623	)
Equity in earnings of associates		(12,492	)		—			—			—			(2,157	)		2,565			352,381			12,492			(356,389	)		(3,600	)		(6,676	)		2,565
Equity in earnings of joint ventures		—			—			—			—			—			—			252,594			—			—			252,594			252,594			—
Income tax (expense) benefit		(79,297	)		(74,250	)		(163,127	)		(4,547	)		4,078			(3,018	)		99,276			153,547			(2,958	)		(70,296	)		(64,319	)		(3,017	)
Profit (loss) for the period		213,895			291,623			310,316			25,595			(15,938	)		(33,629	)		307,948			(505,518	)		(350,647	)		243,645			416,888			(33,629	)
Net income attributable to:
Owners of the Parent		213,895			279,440			310,316			25,595			(15,938	)		(11,006	)		307,948			(493,335	)		(590,553	)		26,362			281,585			(11,006	)
Non-controlling interests		—			12,183			—			—			—			(22,623	)		—			(12,183	)		239,906			217,283			135,303			(22,623	)
		213,895			291,623			310,316			25,595			(15,938	)		(33,629	)		307,948			(505,518	)		(350,647	)		243,645			416,888			(33,629	)
Other selected data:
Depreciation and amortization		541,002			148,653			122,037			159			21,959			215,647			4,528			(689,655	)		—			364,330			148,683			215,647
EBITDA		627,537			661,271			641,412			25,937			27,294			591,457			497,225			(1,288,808	)		(356,389	)		1,426,936			879,539			591,456
Additions to PP&E, intangible and biological assets		357,730			225,846			109,321			22			9,339			539,219			1,803			(583,576	)		—			659,704			120,485			539,219
Reconciliation of EBITDA:
Profit (loss) for the period		213,895			291,623			310,316			25,595			(15,938	)		(33,629	)		307,948			(505,518	)		(350,647	)		243,645			416,888			(33,629	)
Income tax and social contribution		79,297			74,250			163,127			4,547			(4,078	)		3,018			(99,276	)		(153,547	)		2,958			70,296			64,319			3,017
Financial result, net		(206,657	)		146,745			45,932			(4,364	)		25,351			406,421			284,025			59,912			(8,700	)		748,665			249,649			406,421
Depreciation and amortization		541,002			148,653			122,037			159			21,959			215,647			4,528			(689,655	)		—			364,330			148,683			215,647
EBITDA		627,537			661,271			641,412			25,937			27,294			591,457			497,225			(1,288,808	)		(356,389	)		1,426,936			879,539			591,456

21

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

	January 1, 2016 to June 30, 2016																														Additional information
	Raízen Energia			Raízen Combustíveis			COMGÁS			Radar			Lubricants			Logistics			Cosan Corporate			Deconsolidated effects IFRS 11			Segment elimination / adjustments			Total consolidated			Cosan Energia			Cosan Logística
Statement of profit or loss:
Net sales		6,509,176			32,871,326			2,954,034			46,928			968,117			2,562,139			374			(39,380,502	)		(25,208	)		6,506,384			3,969,453			2,562,139
Domestic market		2,680,599			32,871,326			2,954,034			46,928			740,882			2,458,491			374			(35,551,925	)		(25,208	)		6,175,501			3,742,218			2,458,491
External market		3,828,577			—			—			—			227,235			103,648			—			(3,828,577	)		—			330,883			227,235			103,648
Cost of sales		(4,883,779	)		(31,265,779	)		(1,558,014	)		—			(741,281	)		(1,778,611	)		(9,094	)		36,149,558			25,208			(4,061,792	)		(2,308,389	)		(1,778,611	)
Gross profit		1,625,397			1,605,547			1,396,020			46,928			226,836			783,528			(8,720	)		(3,230,944	)		—			2,444,592			1,661,064			783,528
Selling expenses		(368,715	)		(656,617	)		(314,469	)		—			(179,342	)		(724	)		(100	)		1,025,332			—			(494,635	)		(493,912	)		(724	)
General and administrative expenses		(278,621	)		(220,805	)		(157,953	)		(14,690	)		(35,740	)		(172,729	)		(131,641	)		499,426			—			(512,753	)		(291,340	)		(172,729	)
Other income (expense), net		36,948			198,070			(2,656	)		8,665			1,854			(7,794	)		(57,720	)		(235,018	)		—			(57,651	)		(49,854	)		(7,794	)
Financial results		415,898			(279,706	)		(142,008	)		8,128			(44,266	)		(833,718	)		(655,033	)		(136,192	)		113,480			(1,553,417	)		(699,008	)		(833,718	)
Financial expense		(474,027	)		(55,397	)		(374,248	)		(751	)		(22,680	)		(947,113	)		(488,634	)		529,424			113,480			(1,719,946	)		(838,071	)		(947,113	)
Financial income		327,899			114,210			231,626			8,928			1,809			135,651			202,481			(442,109	)		—			580,495			444,535			135,651
Foreign exchange losses, net		(60,219	)		782,103			242,561			(49	)		45,348			82,058			689,587			(721,884	)		—			1,059,505			1,070,777			82,058
Derivatives		622,245			(1,120,622	)		(241,947	)		—			(68,743	)		(104,314	)		(1,058,467	)		498,377			—			(1,473,471	)		(1,376,249	)		(104,314	)
Equity in earnings of associates		(48,775	)		2,520			—			—			(3,022	)		6,122			634,872			46,255			(643,130	)		(5,158	)		(11,792	)		6,122
Equity in earnings of joint ventures		—			—			—			—			—			—			693,938			—			—			693,938			693,938			—
Income tax (expense) benefit		(447,913	)		(184,223	)		(267,762	)		(8,483	)		4,645			7,302			212,366			632,136			(38,583	)		(90,515	)		(59,234	)		7,302
Profit (loss) for the period		934,219			464,786			511,172			40,548			(29,035	)		(218,013	)		687,962			(1,399,005	)		(568,233	)		424,401			749,862			(218,013	)
Net income attributable to:
Owners of the Parent		934,219			442,538			511,172			40,548			(29,035	)		(59,050	)		687,962			(1,376,757	)		(993,926	)		157,671			530,291			(59,050	)
Non-controlling interests		—			22,248			—			—			—			(158,963	)		—			(22,248	)		425,693			266,730			219,571			(158,963	)
		934,219			464,786			511,172			40,548			(29,035	)		(218,013	)		687,962			(1,399,005	)		(568,233	)		424,401			749,862			(218,013	)
Other selected data:
Depreciation and amortization		1,184,444			312,272			241,085			314			42,588			425,432			7,489			(1,496,716	)		—			716,908			291,476			425,432
EBITDA		2,150,678			1,240,987			1,162,027			41,217			53,174			1,033,835			1,138,118			(3,391,665	)		(643,130	)		2,785,241			1,799,580			1,033,835
Additions to PP&E, intangible and biological assets		1,168,364			405,011			203,460			122			18,687			824,094			2,640			(1,573,375	)		—			1,049,003			224,909			824,094
Reconciliation of EBITDA:
Profit (loss) for the period		934,219			464,786			511,172			40,548			(29,035	)		(218,013	)		687,962			(1,399,005	)		(568,233	)		424,401			749,862			(218,013	)
Income tax and social contribution		447,913			184,223			267,762			8,483			(4,645	)		(7,302	)		(212,366	)		(632,136	)		38,583			90,515			59,234			(7,302	)
Financial result, net		(415,898	)		279,706			142,008			(8,128	)		44,266			833,718			655,033			136,192			(113,480	)		1,553,417			699,008			833,718
Depreciation and amortization		1,184,444			312,272			241,085			314			42,588			425,432			7,489			(1,496,716	)		—			716,908			291,476			425,432
EBITDA		2,150,678			1,240,987			1,162,027			41,217			53,174			1,033,835			1,138,118			(3,391,665	)		(643,130	)		2,785,241			1,799,580			1,033,835

22

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

	April 1, 2015 to June 30, 2015 (Restated)																														Additional information
	Raízen Energia			Raízen Combustíveis			COMGÁS			Radar			Lubricants			Logistics			Cosan Corporate			Deconsolidated effects IFRS 11			Segment elimination / adjustments			Total consolidated			Cosan Energia			Cosan Logística
Statement of profit or loss:
Net sales		1,646,883			14,793,885			1,671,012			26,927			424,088			1,220,285			—			(16,440,768	)		(9,071	)		3,333,241			2,122,027			1,220,285
Domestic market		790,038			14,793,885			1,671,012			26,927			338,505			1,175,685			—			(15,583,923	)		(9,071	)		3,203,058			2,036,444			1,175,685
External market		856,845			—			—			—			85,583			44,600			—			(856,845	)		—			130,183			85,583			44,600
Cost of sales		(1,577,927	)		(14,134,501	)		(1,090,919	)		(5,530	)		(314,261	)		(765,998	)		—			15,712,428			9,071			(2,167,637	)		(1,410,710	)		(765,998	)
Gross profit		68,956			659,384			580,093			21,397			109,827			454,287			—			(728,340	)		—			1,165,604			711,317			454,287
Selling expenses		(88,087	)		(281,090	)		(150,654	)		—			(70,380	)		—			—			369,177			—			(221,034	)		(221,034	)		—
General and administrative expenses		(121,175	)		(97,231	)		(73,860	)		(6,988	)		(17,385	)		(84,782	)		(50,491	)		218,406			—			(233,506	)		(142,597	)		(84,782	)
Other income (expense), net		(24,342	)		82,634			(1,787	)		6,460			214			39,831			(6,799	)		(58,292	)		—			37,919			(1,911	)		39,831
Financial results		10,958			(34,279	)		(58,294	)		1,979			(12,766	)		(323,003	)		(216,822	)		23,321			—			(608,906	)		(260,761	)		(323,003	)
Financial expense		(195,132	)		(47,074	)		(92,788	)		(351	)		(13,043	)		(354,971	)		(192,261	)		242,206			4,178			(649,236	)		(285,655	)		(354,971	)
Financial income		152,405			41,452			41,910			2,330			1,027			47,899			32,968			(193,857	)		(4,178	)		121,956			74,036			47,899
Foreign exchange losses, net		145,247			28,116			46,063			—			2,960			(59	)		49,114			(173,363	)		—			98,078			107,547			(59	)
Derivatives		(91,562	)		(56,773	)		(53,479	)		—			(3,710	)		(15,872	)		(106,643	)		148,335			—			(179,704	)		(156,689	)		(15,872	)
Equity in earnings of associates		(11,422	)		3,064			—			—			(2,131	)		181			169,310			8,358			(165,704	)		1,656			1,475			181
Equity in earnings of joint ventures		—			—			—			—			—			—			57,226			—			—			57,226			57,226			—
Income tax (expense) benefit		72,765			(117,122	)		(100,134	)		(3,477	)		(3,318	)		(46,573	)		70,502			44,357			—			(83,000	)		(36,427	)		(46,573	)
Profit (loss) for the period		(92,347	)		215,360			195,364			19,371			4,061			39,941			22,926			(123,013	)		(165,704	)		115,959			107,288			39,941
Net income attributable to:
Owners of the Parent		(92,347	)		208,338			195,364			19,371			4,061			14,503			22,926			(115,991	)		(266,773	)		(10,548	)		16,402			14,503
Non-controlling interests		—			7,022			—			—			—			25,438			—			(7,022	)		101,069			126,507			90,886			25,438
		(92,347	)		215,360			195,364			19,371			4,061			39,941			22,926			(123,013	)		(165,704	)		115,959			107,288			39,941
Other selected data:
Depreciation and amortization		336,430			147,697			119,701			246			18,919			176,885			1,059			(484,127	)		—			316,810			139,925			176,885
EBITDA		160,360			514,458			473,493			21,115			39,064			586,402			170,305			(674,818	)		(165,704	)		1,124,675			544,401			586,402
Additions to PP&E, intangible and biological assets		357,555			116,873			122,454			272			6,959			471,631			14,955			(474,428	)		—			616,271			144,639			471,631
Reconciliation of EBITDA:
Profit (loss) for the period		(92,347	)		215,360			195,364			19,371			4,061			39,941			22,926			(123,013	)		(165,704	)		115,959			107,288			39,941
Income tax and social contribution		(72,765	)		117,122			100,134			3,477			3,318			46,573			(70,502	)		(44,357	)		—			83,000			36,427			46,573
Financial result, net		(10,958	)		34,279			58,294			(1,979	)		12,766			323,003			216,822			(23,321	)		—			608,906			260,761			323,003
Depreciation and amortization		336,430			147,697			119,701			246			18,919			176,885			1,059			(484,127	)		—			316,810			139,925			176,885
EBITDA		160,360			514,458			473,493			21,115			39,064			586,402			170,305			(674,818	)		(165,704	)		1,124,675			544,401			586,402

23

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

	January 1, 2015 to June 30, 2015 (Restated)																														Additional information
	Raízen Energia			Raízen Combustíveis			COMGÁS			Radar			Lubricants			Logistics			Cosan Corporate			Deconsolidated effects IFRS 11			Segment elimination / adjustments			Total consolidated			Cosan Energia			Cosan Logística
Statement of profit or loss:
Net sales		4,726,922			28,855,395			3,205,075			48,533			803,931			1,425,897			—			(33,582,317	)		(9,071	)		5,474,365			4,057,539			1,425,897
Domestic market		1,956,396			28,855,395			3,205,075			48,533			644,171			1,352,533			—			(30,811,791	)		(9,071	)		5,241,241			3,897,779			1,352,533
External market		2,770,526			—			—			—			159,760			73,364			—			(2,770,526	)		—			233,124			159,760			73,364
Cost of sales		(4,162,081	)		(27,394,590	)		(2,245,596	)		(7,268	)		(602,837	)		(912,348	)		—			31,556,671			9,071			(3,758,978	)		(2,855,701	)		(912,347	)
Gross profit		564,841			1,460,805			959,479			41,265			201,094			513,549			—			(2,025,646	)		—			1,715,387			1,201,838			513,550
Selling expenses		(237,160	)		(597,023	)		(305,176	)		—			(135,185	)		—			—			834,183			—			(440,361	)		(440,360	)		—
General and administrative expenses		(261,826	)		(197,502	)		(160,456	)		(14,195	)		(33,532	)		(109,152	)		(95,983	)		459,328			—			(413,318	)		(283,475	)		(109,154	)
Other income (expense), net		14,757			143,560			(3,867	)		20,783			373			39,371			(118,064	)		(158,317	)		—			(61,404	)		(100,775	)		39,371
Financial results		(227,345	)		(21,326	)		(132,251	)		3,671			(8,996	)		(343,402	)		(386,351	)		248,671			—			(867,329	)		(545,475	)		(343,402	)
Financial expense		(399,974	)		(86,029	)		(196,678	)		(705	)		(21,488	)		(365,294	)		(364,683	)		486,003			8,000			(940,848	)		(559,468	)		(365,294	)
Financial income		300,198			79,229			79,224			4,400			1,355			53,551			61,217			(379,427	)		(8,000	)		191,747			138,144			53,551
Foreign exchange losses, net		(460,179	)		(144,690	)		(196,450	)		(24	)		5,575			(56,276	)		(246,581	)		604,869			—			(493,756	)		(460,998	)		(56,276	)
Derivatives		332,610			130,164			181,653			—			5,562			24,617			163,696			(462,774	)		—			375,528			336,847			24,617
Equity in earnings of associates		(17,412	)		7,112			—			—			(7,090	)		181			178,271			10,300			(174,340	)		(2,978	)		(3,159	)		180
Equity in earnings of joint ventures		—			—			—			—			—			—			227,098			—			—			227,098			227,098			—
Income tax (expense) benefit		103,048			(262,098	)		(131,975	)		(6,821	)		(9,023	)		(51,406	)		195,916			159,050			—			(3,309	)		48,097			(51,406	)
Profit (loss) for the period		(61,097	)		533,528			225,754			44,703			7,641			49,141			887			(472,431	)		(174,340	)		153,786			103,789			49,139
Net income attributable to:
Owners of the Parent		(61,097	)		514,484			225,754			44,703			7,641			22,056			887			(453,387	)		(294,486	)		6,555			(15,182	)		22,054
Non-controlling interests		—			19,044			—			—			—			27,085			—			(19,044	)		120,146			147,231			118,971			27,085
		(61,097	)		533,528			225,754			44,703			7,641			49,141			887			(472,431	)		(174,340	)		153,786			103,789			49,139
Other selected data:
Depreciation and amortization		964.044			287.030			239.152			491			36.847			203.538			2.034			(1.251.074	)		—			482.062			278.522			203.538
EBITDA		1,027,244			1,103,982			729,132			48,344			62,507			647,487			193,356			(2,131,226	)		(174,340	)		1,506,486			879,689			647,485
Additions to PP&E, intangible and biological assets		1,198,002			358,627			246,020			940			15,264			502,621			33,115			(1,556,629	)		—			797,960			296,760			502,621
Reconciliation of EBITDA:
Profit (loss) for the period		(61,097	)		533,528			225,754			44,703			7,641			49,141			887			(472,431	)		(174,340	)		153,786			103,789			49,139
Income tax and social contribution		(103,048	)		262,098			131,975			6,821			9,023			51,406			(195,916	)		(159,050	)		—			3,309			(48,097	)		51,406
Financial result, net		227,345			21,326			132,251			(3,671	)		8,996			343,402			386,351			(248,671	)		—			867,329			545,475			343,402
Depreciation and amortization		964,044			287,030			239,152			491			36,847			203,538			2,034			(1,251,074	)		—			482,062			278,522			203,538
EBITDA		1,027,244			1,103,982			729,132			48,344			62,507			647,487			193,356			(2,131,226	)		(174,340	)		1,506,486			879,689			647,485

24

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

	June 30, 2016																														Additional information
	Raízen Energia			Raízen Combustíveis			COMGÁS			Radar			Lubricants			Logistics			Cosan Corporate			Deconsolidated effects IFRS 11			Segment elimination			Total consolidated			Cosan Energia			Cosan Logística
Statement of financial position:
Cash and cash equivalents		3,170,659			974,962			1,390,730			7,798			63,907			71,863			1,009,736			(4,145,621	)		—			2,544,034			2,259,354			71,863
Marketable securities		—			—			—			138,559			—			1,711,794			—			—			—			1,850,353			138,559			1,711,794
Trade receivables		626,584			1,745,822			573,785			21,666			247,719			269,506			45			(2,372,406	)		—			1,112,721			843,216			269,506
Derivative financial instruments		1,300,319			181,751			411,158			—			—			4,080			587,681			(1,482,070	)		—			1,002,919			998,839			4,080
Inventories		1,205,843			1,489,635			139,039			—			289,328			212,832			3,223			(2,695,478	)		—			644,422			431,590			212,832
Other financial assets		—			—			—			141,064			—			—			51,660			—			(51,660	)		141,064			192,724			—
Other current assets		2,049,352			1,352,703			90,397			137,080			46,826			404,985			209,088			(3,402,055	)		(57,573	)		830,803			470,768			404,985
Other non-current assets		3,168,935			890,395			262,340			58			43,202			2,802,856			1,722,111			(4,059,330	)		(7,989	)		4,822,578			2,019,716			2,802,856
Investment in associates		218,508			—			—			—			6,265			46,745			12,110,409			(218,508	)		(11,983,066	)		180,353			133,608			46,745
Investment in joint ventures		—			—			—			—			—			—			8,347,720			—			—			8,347,720			8,347,720			—
Biological assets		809,841			—			—			—			—			—			—			(809,841	)		—			—			—			—
Investment property		—			—			—			2,593,649			—			—			—			—			—			2,593,649			2,593,649			—
Property, plant and equipment		11,051,790			2,359,833			—			1,618			240,455			10,051,873			150,759			(13,411,623	)		—			10,444,705			392,832			10,051,873
Intangible assets and goodwill		3,246,428			4,500,044			8,574,445			1,889			796,154			7,862,142			8,227			(7,746,472	)		—			17,242,857			9,380,715			7,862,142
Loans, borrowings and debenture		(9,956,894	)		(2,648,257	)		(3,550,781	)		—			(472,879	)		(8,169,580	)		(4,980,472	)		12,605,151			—			(17,173,712	)		(8,244,200	)		(8,169,580	)
Derivative financial instruments		(1,237,068	)		(917,504	)		—			—			(53,218	)		(24,243	)		(762,932	)		2,154,572			—			(840,393	)		(816,150	)		(24,243	)
Trade payables		(977,463	)		(670,482	)		(1,165,076	)		(2,209	)		(197,883	)		(473,375	)		(4,849	)		1,647,945			—			(1,843,392	)		(1,370,017	)		(473,375	)
Employee benefits payable		(434,535	)		(123,542	)		(45,511	)		(5,201	)		(17,880	)		(135,322	)		(13,324	)		558,077			—			(217,238	)		(81,916	)		(135,322	)
Other current liabilities		(1,040,859	)		(1,320,508	)		(162,550	)		(37,485	)		(133,006	)		(1,267,115	)		(206,998	)		2,361,367			55,629			(1,751,525	)		(504,983	)		(1,267,115	)
Other non-current liabilities		(1,309,603	)		(2,769,990	)		(1,342,467	)		(106,310	)		(157,960	)		(7,199,804	)		(3,472,773	)		4,079,593			93,298			(12,186,016	)		(5,069,581	)		(7,199,804	)
Total assets (net of liabilities) allocated by segment		11,891,837			5,044,862			5,175,509			2,892,176			701,030			6,169,237			14,759,311			(16,936,699	)		(11,951,361	)		17,745,902			12,116,443			6,169,237
Total assets		26,848,259			13,495,145			11,441,894			3,043,381			1,733,856			23,438,676			24,200,659			(40,343,404	)		(12,100,288	)		51,758,178			28,203,290			23,438,676
Equity attributable to owners of the parent		11,892,800			4,870,307			5,175,509			2,892,176			701,030			1,670,838			14,759,311			(16,763,107	)		(19,086,982	)		6,111,882			8,647,429			1,670,838
Non-controlling interests		(963	)		174,555			—			—			—			4,498,399			—			(173,592	)		7,135,621			11,634,020			3,469,014			4,498,399
Total shareholders’ equity		11,891,837			5,044,862			5,175,509			2,892,176			701,030			6,169,237			14,759,311			(16,936,699	)		(11,951,361	)		17,745,902			12,116,443			6,169,237

25

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

	December 31, 2015 (Restated)																														Additional information
	Raízen Energia			Raízen Combustíveis			COMGÁS			Radar			Lubricants			Logistics			Cosan Corporate			Deconsolidated effects IFRS 11			Segment elimination			Total consolidated			Cosan Energia			Cosan Logística
Statement of financial position:
Cash and cash equivalents		2,995,495			885,880			1,967,643			1,016			96,907			246,849			1,193,409			(3,881,375	)		—			3,505,824			3,129,530			246,849
Marketable securities		—			—			—			241,430			—			508,268			—			—			—			749,698			241,430			508,268
Trade receivables		719,092			2,058,601			540,132			38,510			220,417			165,671			248			(2,777,693	)		—			964,978			799,308			165,671
Derivative financial instruments		1,465,816			255,665			665,032			—			12,363			99,863			1,653,038			(1,721,481	)		—			2,430,296			2,292,859			99,863
Inventories		2,371,987			1,287,946			134,347			—			293,916			225,784			2,854			(3,659,933	)		—			656,901			431,117			225,784
Other current assets		1,579,568			1,029,510			132,960			120,615			51,926			364,168			277,393			(2,609,078	)		(66,604	)		880,458			503,502			364,168
Other non-current assets		3,425,968			921,891			279,091			51			(135,853	)		2,824,311			1,937,123			(4,347,859	)		(9,717	)		4,895,006			2,070,687			2,824,311
Investment in associates		225,670			248,456			—			—			8,453			44,241			11,971,024			(474,126	)		(11,839,342	)		184,376			140,134			44,241
Investment in joint ventures		—			—			—			—			—			—			8,237,190			—			—			8,237,190			8,237,190			—
Biological assets		678,564			—			—			—			—			—			—			(678,564	)		—			—			—			—
Investment property		—			—			—			2,595,035			—			—			—			—			—			2,595,035			2,595,035			—
Property, plant and equipment		11,027,461			2,409,555			—			2,029			243,080			9,404,087			156,691			(13,437,016	)		—			9,805,887			401,800			9,404,087
Intangible assets and goodwill		3,261,623			4,414,352			8,620,436			1,669			818,362			7,862,420			6,802			(7,675,975	)		—			17,309,689			9,447,269			7,862,420
Loans, borrowings and debenture		(11,549,211	)		(3,226,449	)		(3,823,067	)		—			(512,758	)		(8,585,175	)		(5,908,203	)		14,775,660			—			(18,829,203	)		(9,755,703	)		(8,585,175	)
Trade payables		(676,321	)		(67,902	)		—			—			(291	)		(1,780	)		(740,427	)		744,223			—			(742,498	)		(740,718	)		(1,780	)
Derivative financial instruments		(1,126,540	)		(937,177	)		(1,302,397	)		(2,511	)		(235,663	)		(420,189	)		(4,252	)		2,063,717			—			(1,965,012	)		(1,544,822	)		(420,189	)
Employee benefits payable		(315,704	)		(83,214	)		(65,522	)		(5,684	)		(15,061	)		(149,871	)		(20,141	)		398,918			—			(256,279	)		(106,407	)		(149,871	)
Other current liabilities		(920,298	)		(968,904	)		(103,331	)		(35,464	)		(135,945	)		(1,477,920	)		(237,919	)		1,889,202			64,528			(1,926,051	)		(463,015	)		(1,477,920	)
Other non-current liabilities		(1,364,086	)		(3,129,560	)		(1,180,987	)		(104,403	)		(209,245	)		(7,094,274	)		(3,754,009	)		4,493,646			108,965			(12,233,953	)		(5,236,850	)		(7,094,274	)
Total assets (net of liabilities) allocated by segment		11,799,084			5,098,650			5,864,337			2,852,293			500,608			4,016,453			14,770,821			(16,897,734	)		(11,742,170	)		16,262,342			12,442,346			4,016,453
Total assets		27,751,244			13,511,856			12,339,641			3,000,355			1,609,571			21,745,662			25,435,772			(41,263,100	)		(11,915,663	)		52,215,338			30,289,861			21,745,662
Equity attributable to owners of the parent		11,800,047			4,926,655			5,864,337			2,852,293			500,608			1,113,277			14,770,821			(16,726,702	)		(19,142,086	)		5,959,250			8,753,858			1,113,277
Non-controlling interests		(963	)		171,995			—			—			—			2,903,176			—			(171,032	)		7,399,916			10,303,092			3,688,488			2,903,176
Total shareholders’ equity		11,799,084			5,098,650			5,864,337			2,852,293			500,608			4,016,453			14,770,821			(16,897,734	)		(11,742,170	)		16,262,342			12,442,346			4,016,453

26

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

Net sales by segment:

	April 1, 2016 to June 30, 2016			January 1, 2016 to June 30, 2016			April 1, 2015 to June 30, 2015			January 1, 2015 to June 30, 2015
Raízen Energia
Ethanol		1,262,340			3,199,252			940,503			2,566,987
Sugar		1,115,321			2,961,609			464,968			1,873,297
Cogeneration		151,438			195,319			172,052			184,738
Other		113,798			152,996			69,360			101,900
		2,642,897			6,509,176			1,646,883			4,726,922
Raízen Combustíveis
Fuels		16,479,574			32,871,326			14,793,885			28,855,395
		16,479,574			32,871,326			14,793,885			28,855,395
COMGÁS
Industrial		996,765			2,002,830			1,049,105			2,076,956
Residential		197,848			353,254			181,347			302,204
Thermo generation		9,873			61,594			135,036			250,145
Construction revenue		57,386			111,909			72,128			138,100
Commercial		50,827			97,977			50,014			95,051
Cogeneration		75,903			146,301			71,792			133,401
Automotive		88,095			154,287			103,343			193,724
Other		17,261			25,882			8,247			15,494
		1,493,958			2,954,034			1,671,012			3,205,075
Radar
Land lease		20,164			39,353			16,519			33,505
Property sales		—			—			6,436			8,315
Other		3,850			7,575			3,972			6,713
		24,014			46,928			26,927			48,533
Lubricants
Lubricants		425,273			851,185			327,814			637,523
Basic oil		59,891			108,833			56,704			94,158
Other		3,828			8,099			39,570			72,250
		488,992			968,117			424,088			803,931
Cosan Corporate		341			374			—			—
IFRS 11—Deconsolidated of adjustments/eliminations joint ventures and eliminations		(19,141,622	)		(39,405,710	)		(16,449,839	)		(33,591,388	)
Cosan Energia		1,988,154			3,944,245			2,112,956			4,048,468
Logistics
North operations(i)		998,048			1,893,980			817,350			1,022,962
South operations(i)		302,500			527,328			320,151			320,151
Container operations(i)		75,700			140,831			82,784			82,784
		1,376,248			2,562,139			1,220,285			1,425,897
Total		3,364,402			6,506,384			3,333,241			5,474,365

(i) Segment created following the ALL Acquisition, which was completed on April 1, 2015.

27

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

6 Cash and cash equivalents

	June 30, 2016		December 31, 2015
Cash and bank deposits		463,557		305,510
Short-term investments		2,080,477		3,200,314
		2,544,034		3,505,824

Short-term investments are composed as follows:

	June 30, 2016		December 31, 2015
Investment funds
Repurchase agreements		1,603,667		1,252,229
Bank certificate of deposits—CDB		212,840		792,279
Other		20,738		199,919
		1,837,245		2,244,427
Bank investments
Repurchase agreements		63,865		407,971
Bank certificate of deposits—CDB		171,043		542,658
Other		8,324		5,258
		243,232		955,887
		2,080,477		3,200,314

7 Marketable securities

	June 30, 2016		December 31, 2015
Government security		1,614,153		334,167
Bank certificate of deposits—CDB		236,200		271,323
		1,850,353		605,490

28

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

8 Trade receivables

	June 30, 2016			December 31, 2015
Domestic—Brazilian Reais		1,156,352			999,007
Export—Foreign currency		26,673			29,402
Allowance for doubtful accounts		(70,303	)		(63,431	)
		1,112,722			964,978
Current		1,044,614			904,245
Non-current		68,108			60,733

9 Other current tax receivable

	June 30, 2016		December 31, 2015
ICMS—State VAT		615,769		597,023
COFINS—Revenue tax		213,293		228,393
PIS—Revenue tax		63,416		69,098
PAES—Special Program for Installment Payments		1,991		33,245
Other		13,958		17,682
		908,427		945,441
Current		184,231		311,892
Non-current		724,196		633,549

29

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

10 Related parties

a) Receivables from and payables to related parties:

	June 30, 2016		December 31, 2015
Current assets
Commercial operations
Raízen Energia S.A.		61,727		47,591
Raízen Combustíveis S.A.		8,587		3,052
Aguassanta Participações S.A.		6,327		6,371
Other		9,042		4,085
		85,683		61,099
Corporate operation / Agreements
Raízen Energia S.A.		10,733		13,028
		10,733		13,028
Financial operations
Raízen Combustíveis S.A.		—		1,102
		—		1,102
		96,416		75,229
Non-current assets
Receivables under the framework agreement
Raízen Energia S.A.		114,687		89,763
Janus Brasil Participações S.A.		20,875		20,875
		135,562		110,638
Financial operations
Rezende Barbosa Group		46,052		70,365
Novvi Limited Liability Company		15,414		17,121
Other		191		8
		61,657		87,494
Corporate operation
Raízen Energia S.A.		—		23,029
Other		—		184
		—		23,213
		197,219		221,345
Total		293,635		296,574
Current liabilities
Commercial operations
Raízen Energia S.A.		25,215		46,582
Raízen Combustíveis S.A.		72,983		71,489
Other		170		(454	)
		98,368		117,617
Corporate operations / Agreements
Raízen Energia S.A.		103,539		78,653
Raízen Combustíveis S.A.		6,866		7,810
		110,405		86,463
Total		208,773		204,080

30

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

b) Related party transactions:

	April 1, 2016 to June 30, 2016			January 1, 2016 to June 30, 2016			April 1, 2015 to June 30, 2015			January 1, 2015 to June 30, 2015
Sales of goods and services
Raízen Energia S.A.		100,063			214,898			42,596			138,337
Raízen Combustíveis S.A.		34,314			62,211			31,182			34,857
Other		—			422			127			127
		134,377			277,531			73,905			173,321
Purchase of goods / Inputs
Raízen Energia S.A.		(47	)		(66	)		(67	)		(70	)
Raízen Combustíveis S.A.		(225,956	)		(427,050	)		(1,751	)		(1,764	)
Other		(144	)		(269	)		—			—
		(226,147	)		(427,385	)		(1,818	)		(1,834	)
Land lease
Raízen Energia S.A.		15,314			31,485			14,777			29,279
		15,314			31,485			14,777			29,279
Shared income (expense)
Aguassanta Participações S.A.		92			171			111			216
Raízen Energia S.A.		(18,732	)		(33,845	)		(10,674	)		(21,342	)
		(18,640	)		(33,674	)		(10,563	)		(21,126	)
Financial result
Raízen Energia S.A.		470			994			420			1,230
Other		128			(73	)		(76	)		(195	)
		598			921			344			1,035
Total		(94,498	)		(151,122	)		76,645			180,675

c) Officers’ and directors’ compensation

	April 1, 2016 to June 30, 2016		January 1, 2016 to June 30, 2016		April 1, 2015 to June 30, 2015		January 1, 2015 to June 30, 2015
Regular compensation		47,213		58,288		6,655		20,870
Stock option expense		3,416		5,896		2,930		5,859
Bonuses and other variable compensation		23,227		33,512		24,908		33,060
		73,856		97,696		34,493		59,789

31

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

11 Investments in associates

a) Information in associates of the Company and the Company’s ownership:

	Tellus Brasil Participações S.A.			Novvi Limited Liability Company			Janus Brasil Participações S.A.			Other investments			Total
Shares issued by the associate		65,957,282			200,002			16,166,927			—
Shares held by Cosan		33,638,214			100,001			31,699,465			—
Cosan ownership interest		51.00%			50.00%			51.00%			—
Equity in earnings (losses) of associates at June 30, 2015		5,986			(7,081	)		146			(2,029	)		(2,978	)
At December 31, 2015		99,638			6,783			23,713			54,242			184,376
Equity in earnings (losses) of associates		(1,461	)		(3,022	)		3,976			(4,651	)		(5,158	)
Capital increase		—			2,170			—			—			2,170
Dividends		(1,508	)		—			(689	)		(3,754	)		(5,951	)
Other		(492	)		—			—			5,406			4,914
At June 30, 2016		96,177			5,931			27,000			51,243			180,351

32

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

b) Information in the non-controlling interests in subsidiaries of the Company:

	Cosan S.A. Indústria e Comércio			Cosan Logística S.A.			Companhia de Gás de São Paulo - COMGÁS			Rumo Logística Operadora Multimodal S.A.			Logispot Armazéns Agrícolas S.A.			Radar Propriedades Agrícolas S.A.			Radar II Propriedades Agrícolas S.A.			Elimination of participation Radar II in Radar			Total
Shares issued by the associate		407,214,353			365,100,567			127,313,301			1,339,015,898			2,040,816			21,148,989			830,690,258			—
Shares held by non-controlling shareholders		153,511,030			101,368,577			48,720,752			960,507,722			1,000,000			17,147,822			290,710,861			—
Non-controlling interest		37.49%			27.52%			38.27%			71.73%			49.00%			81.08%			35.00%			—
Equity in earnings
(losses) of associates at June 30, 2015 (Restated)		(5,692	)		6,867			88,747			28,186			(1,101	)		26,609			3,615			—			147,231
At December 31, 2015		3,700,096			46,043			2,109,567			2,866,244			36,835			1,728,749			349,022			(498,850	)		10,337,706
Effect of changes to IAS 41—in joint ventures (Note 2.2)		(34,614	)		—			—			—			—			—			—			—			(34,614	)
At December 31, 2015 (Restated)		3,665,482			46,043			2,109,567			2,866,244			36,835			1,728,749			349,022			(498,850	)		10,303,092
Equity in earnings (losses) of associates		226,893			(20,770	)		197,239			(158,175	)		(788	)		18,623			7,442			(3,734	)		266,730
Other comprehensive income (losses)		(25,183	)		91			—			1,879			—			(590	)		(38	)		110			(23,731	)
Dividends		(212,448	)		—			(475,351	)		—			—			—			—			—			(687,799	)
Capital increase		—			139,556			—			1,751,480			—			—			—			—			1,891,036
Other		(85,393	)		(67,663	)		36,825			923			—			—			—			—			(115,308	)
At June 30, 2016		3,569,351			97,257			1,868,280			4,462,351			36,047			1,746,782			356,426			(502,474	)		11,634,020

33

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

12 Investments in joint ventures

Changes to investments in joint ventures were as follows:

	Raízen Combustíveis S.A.			Raízen Energia S.A.			Total
Shares issued by the associate		3,303,168,484			5,902,595,634
Shares held by Cosan		1,651,584,242			2,951,297,817
Cosan ownership interest		50.00%			50.00%
Equity in earnings of joint ventures at June 30, 2015 (Restated)		256,649			(29,551	)		227,098
At December 31, 2015		3,204,834			5,124,686			8,329,520
Effect of changes to IAS 41—in joint ventures (Note 2.2)		—			(92,330	)		(92,330	)
At December 31, 2015 (Restated)		3,204,834			5,032,356			8,237,190
Equity in earnings of joint ventures		220,905			473,033			693,938
Other comprehensive losses		13,975			(136,539	)		(122,564	)
Interest on capital		(39,000	)		—			(39,000	)
Dividends		(224,060	)		(197,782	)		(421,842	)
At June 30, 2016		3,176,654			5,171,068			8,347,722

The statement of financial position and statement of profit or loss of the joint ventures are disclosed in Note 5, Segments.

Pursuant to the terms of the Raízen Joint Venture—Framework Agreement, Cosan is responsible for certain legal proceedings that existed prior to the formation of Raízen, net of judicial deposits as of April 1, 2011, as well as tax installments under the REFIS (tax amnesty and refinancing program), recorded in “Other taxes payable”. Additionally, Cosan granted access to Raízen a credit line (stand-by facility) in the amount of US$500 million, which was unused at June 30, 2016.

13 Assets held for sale and investment property

	Investment property			Assets held for sale			Total
At December 31, 2015		2,595,035			149,938			2,744,973
Change in fair value		8,532			(5,233	)		3,299
Additions		—			3,382			3,382
Transfers		(9,918	)		9,918			—
At June 30, 2016		2,593,649			158,005			2,751,654

34

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

14 Property, plant and equipment

	Land, buildings and improvements			Machinery, equipment and facilities			Railcars and locomotives			Permanent railways			Construction in progress			Other			Total
Cost
At December 31, 2015		859,957			663,223			4,235,037			3,568,597			824,034			467,090			10,617,938
Additions		—			6,690			17,816			—			992,148			18,778			1,035,432
Disposals		—			(101	)		(823	)		(7,409	)		—			(9,445	)		(17,778	)
Transfers		78,505			52,457			607,939			14,589			(780,622	)		11,805			(15,327	)
At June 30, 2016		938,462			722,269			4,859,969			3,575,777			1,035,560			488,228			11,620,265
Depreciation
At December 31, 2015		(118,056	)		(218,925	)		(248,686	)		(209,308	)		—			(17,076	)		(812,051	)
Additions		(21,893	)		(37,644	)		(127,133	)		(146,905	)		—			(36,150	)		(369,725	)
Disposals		—			100			440			3,048			—			2,555			6,143
Transfers		4,678			1,159			3,071			(7,342	)		—			(1,493	)		73
At June 30, 2015		(135,271	)		(255,310	)		(372,308	)		(360,507	)		—			(52,164	)		(1,175,560	)
At December 31, 2015		741,901			444,298			3,986,351			3,359,289			824,034			450,014			9,805,887
At June 30, 2016		803,191			466,959			4,487,661			3,215,270			1,035,560			436,064			10,444,705

Capitalization of borrowing costs

Capitalized borrowing costs for the period ended June 30, 2016 amounted to R$2.103 (R$5.550 for the period ended June 30, 2015).

35

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

15 Intangible assets and goodwill

	Goodwill			Concession rights			Improvements to public concessions and operating licenses			Trademarks			Customer relationships			Other			Total
Cost
At December 31, 2015		713,291			16,664,047			432,529			252,474			940,470			404,013			19,406,824
Additions		—			161,084			—			—			42,155			7,430			210,669
Disposals		—			(11,924	)		—			—			(9,152	)		—			(21,076	)
Transfers		—			(165	)		—			—			(1,190	)		15,096			13,741
Business combination		—			67,583			—			—			—			—			67,583
At June 30, 2016		713,291			16,880,625			432,529			252,474			972,283			426,539			19,677,741
Amortization
At December 31, 2015		—			(1,011,806	)		(193,818	)		(159,789	)		(575,411	)		(156,311	)		(2,097,135	)
Additions		(2,846	)		(224,672	)		(5,870	)		(11,414	)		(74,737	)		(30,926	)		(350,465	)
Disposals		—			7,948			—			—			4,761			—			12,709
Transfers		—			123			—			—			—			(117	)		6
At June 30, 2016		(2,846	)		(1,228,407	)		(199,688	)		(171,203	)		(645,387	)		(187,354	)		(2,434,885	)
At December 31, 2015		713,291			15,652,241			238,711			92,685			365,059			247,702			17,309,689
At June 30, 2016		710,445			15,652,218			232,841			81,271			326,896			239,185			17,242,856

36

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

Capitalization of borrowing costs

Capitalized borrowing costs for the period ended June 30, 2016, amounted to R$9,659 (R$9,383 for the period ended June 30, 2015). The weighted average interest rate used to capitalize borrowing costs on the balance of construction in progress, was 12,98% p.a. for the period ended June 30, 2016 (10.40% p.a. for the period ended June 30, 2015).

Intangible assets (excluding goodwill)	Annual rate of amortization - %		June 30, 2016		December 31, 2015
Gas distribution concession—COMGÁS(i)		Concession term		8,230,218		8,237,379
Concession rights—Rumo(ii)		Concession term		7,422,000		7,414,862
				15,652,218		15,652,241
Operating license for port terminal(iii)		4.00%		232,841		238,711
				232,841		238,711
Trademarks
Mobil		10.00%		57,068		68,481
Comma		—		24,203		24,204
				81,271		92,685
Relationships with customers
COMGÁS		20.00%		280,013		313,694
Lubricants		6.00%		46,883		51,365
				326,896		365,059
Other
Software licenses		20.00%		130,468		126,469
Other		15.00%		108,717		121,233
				239,185		247,702
				16,532,411		16,596,398

(i) Refers to the intangible asset for the public gas distribution service concession, which represents the right to charge users for the supply of gas, comprised of: (i) the concession rights recognized in the business combination and (ii) concession assets;

(ii) Refers to the concession right agreement of ALL Malha Norte, which will be amortized until the end of the concession in 2079;

(iii) Port operating license and customer relationships of Rumo, from the business combinations.

Impairment testing of cash-generating units goodwill

The Company tests the recoverable amounts of goodwill arising from business combination transactions annually. Property, plant and equipment and definite life intangible assets, that are subject to depreciation and amortization are tested for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable.

During the period ended June 30, 2016, no impairment indicators were identified that would trigger the need for an impairment test.

37

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

6 Loans, borrowings and debentures

	Interest
Description	Index(i)		Annual interest(ii)		June 30, 2016		December 31, 2015		Maturity
Loan and borrowings
BNDES		URTJLP		9.34%		2,664,156		2,851,793		Jun-2029
		Fixed		4.93%		1,110,292		1,016,225		Sep-2018
		TJ462		10.43%		730,903		809,660		Oct-2020
		Selic		16.22%		310,502		298,258		Jun-2023
		TJLP		10.15%		161,432		176,900		Jun-2023
		Selic		14.15%		5,897		5,595		Sep-2020
		Fixed		3.95%		4,293		4,684		Jan-2024
		IPCA		15.59%		4,519		4,152		Nov-2021
		URTJLP		10.13%		25,580		217		Sep-2022
EIB		US$ + LIBOR		2.35%		655,634		869,014		Sep-2021
Foreign loans		LIBOR Sterling		3.93%		229,810		312,940		Dec-2019
FRN		US$		2.63%		—		216,134		Jan-2017
ECN		112% of CDI		15.95%		150,096		406,805		Dec-2018
		109% of CDI		15.50%		—		304,644		Oct-2018
		129,62% of CDI		18.69%		547,032		—		Jun-2023
		US$		3.79%		—		126,669		Jul-2016
Perpetual Notes		US$		8.25%		1,624,793		1,976,673		—
Resolution 4131		US$		3.08%		129,929		477,705		Oct-2020
		US$ + LIBOR		2.40%		398,076		471,045		Mar-2018
		US$ + LIBOR		2.00%		353,352		406,348		Nov-2016
Senior Notes Due 2018		Fixed		9.50%		170,280		875,376		Mar-2018
Senior Notes Due 2023		US$		5.00%		305,764		2,009,296		Mar-2023
Senior Notes Due 2027		US$		7.00%		1,655,650		—		Jan-2027
FINEP		Fixed		5.00%		123,166		137,133		Nov-2020
Trade banks		CDI + 3.50% p.a.		18.13%		—		205,781		Sep-2016
		CDI + 4.91% p.a.		19.73%		196,448		195,632		Jun-2019
		Fixed		20.98%		1,914		3,898		Jun-2016
Working capital		CDI + 2.50% p.a.		17.33%		388,619		388,203		Dec-2018
		CDI + 2.80% p.a.		17.50%		287,203		—		Dec-2018
		US$ + LIBOR		4.45%		84,108		100,121		Sep-2021
		CDI + 0.28% p.m.		18.02%		15,035		25,004		Dec-2016
		121.10% of CDI		17.37%		5,013		10,144		Nov-2016
		118% of CDI		—		25,331		17,764		Oct-2016
Prepayment		US$ + LIBOR		3.65%		55,164		—		Apr-2017
						12,419,991		14,703,813
Debentures
Convertible debentures		URTJLP		9.01%		—		2,592		Jun-2016
Non-convertible debentures		CDI + 2.05% p.a		16.47%		148,040		1,431,607		Mar-2018
		CDI + 1.30% p.a.		15.61%		298,972		775,228		Oct-2017
		CDI + 3.50% p.a.		18.12%		2,321,303		—		Jun-2023
		IPCA		18.79%		529,539		594,157		Dec-2025
		108% of CDI		15.34%		526,379		526,285		Jul-2018
		IPCA		16.53%		634,732		484,246		Sep-2020
		Fixed		13.13%		163,834		161,175		Oct-2020
		CDI		15.17%		129,963		119,785		Sep-2019
		% of net revenue		—		959		30,315		—
						4,753,721		4,125,390
Total						17,173,712		18,829,203
Current						2,304,564		2,775,510
Non-current						14,869,148		16,053,693

(i) TJLP and URTJLP are long-term interest rates on BNDES (Brazilian National Economic and Social Development Bank) loans. Selic is the benchmark interest rate set by the Brazilian Central Bank. CDI is a benchmark interbank lending rate in Brazil. IPCA is a benchmark consumer price index.

(ii) As at June 30, 2016.

38

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

On June 9, 2016, it was issued Senior Notes in the international market in accordance with the “Regulation S” and “144A” in the amount of US$ 500 million, which are subject to interest at 7% pa The funds were used for partial repayment of Senior Note 2018 and Senior Note 2023. During the term of the permit, the Company must maintain the net debt divided by EBITDA, and other financial covenants.

On July 11, 2016 the Cosan Luxembourg S.A. (“Cosan Lux”) issued an additional U.S.$150,000,000 principal amount of its 7% Senior Notes due 2027. The Bonds are additional securities issued pursuant to the provisions of the indenture, dated as of June 20, 2016, among the Issuer, Cosan S.A. and Deutsche Bank Trust Company Americas, as Trustee (the “Trustee”), and an officers’ certificate to be dated July 18, 2016.

On June 28, 2016 the subsidiary “Rumo” completed the structure of part of the debt reprofiling of Rumo and its subsidiaries maturing in 2016, 2017 and 2018 in the amount of R$ 2,925,647, with changes to certain terms and conditions, or hiring new working capital instruments. As a result of the operation were issued Debentures not convertible into shares maturing in 2023 and carried out contractual amendment of certain debts which extended the maturity to start from 2019.

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

	June 30, 2016		December 31, 2015
Brazilian Real		11,681,432		11,863,258
US Dollar		5,262,470		6,653,005
Pound Sterling		229,810		312,940
		17,173,712		18,829,203

Financial Covenants

The Company and its subsidiaries are subject to certain restrictive financial covenants set forth in existing loans, financing and debentures agreements in relation to certain financial and non-financial indicators. Financial ratios are: (i) consolidated net comprehensive debt (Bank loans, bonds, leases, certificates of real estate receivables net of cash and cash equivalents, marketable securities and derivative instruments)/ EBITDA; (ii) EBITDA / consolidated financial results (considers only interest on debentures, loans / financing and derivative activities); (iii) equity / net assets, being item (iv) applicable only to BNDES. Except for BNDES, whose measurement is required annually, a quarterly measurement is required on the reporting date, using the consolidated financial statements.

Except for BNDES, whose new net comprehensive debt indicators / EBITDA and ICD are yet to be set, all other creditors have agreed to a ratio of up to 5.5x net comprehensive debt / EBITDA. If the negotiations with BNDES require a lower leverage ratio, such ratio will be extended to all other creditors with equivalent covenants conditions. On June 30, 2016, quarterly financial covenants were met within the new established standards.

39

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

As at June 30, 2016, the Company and its subsidiaries were in compliance with all debt financial covenants.

17 Leases

Finance lease liabilities

Finance lease liabilities are payable as follows:

	June 30, 2016												December 31, 2015
	Less than one year			Between one and five years			More than five years			Total			Total
Future minimum lease payments		715,848			1,088,420			389,893			2,194,161			2,196,200
Rolling stock		685,058			995,009			280,097			1,960,164			1,953,414
Terminal		23,861			86,408			109,796			220,065			232,148
Other		6,929			7,003			—			13,932			10,638
Interests		(175,682	)		(276,032	)		(91,581	)		(543,295	)		(454,499	)
Rolling stock		(158,556	)		(229,812	)		(64,796	)		(453,164	)		(357,416	)
Terminal		(15,726	)		(45,165	)		(26,785	)		(87,676	)		(96,069	)
Other		(1,400	)		(1,055	)		—			(2,455	)		(1,014	)
Present value of minimum lease payments		540,166			812,388			298,312			1,650,866			1,741,701
							��
Current											540,166			539,615
Non-current											1,110,700			1,202,086

Leases have various expiration dates, the last maturing in June 2043. The amounts are updated annually by Brazilian market price index (Índice Geral de Preços do Mercado-IGPM) plus TJLP (Long-Term Interest Rate) or CDI.

Operating leases

As of June 30, 2016, the future minimum lease payments under non-cancellable leases are as follows:

	June 30, 2016		December 31, 2015
Future minimum lease payments
Less than one year		11,484		22,788
Between one and five years		21,181		24,364
More than five years		11,330		13,528
		43,995		60,680

40

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

The rentals are recognized as expenses (Note 26) on a straight-line basis over the life of the respective agreement.

18 Concessions payable

	Concessions payable				Judicial deposits
	June 30, 2015		December 31, 2015		June 30, 2015		December 31, 2015
Payables
Malha Sul		66,394		65,906		—		—
Malha Paulista		25,968		24,944		—		—
		92,362		90,850		—		—
Court Discussion
Malha Paulista		1,278,871		1,175,697		117,533		116,510
Malha Oeste		1,043,325		957,697		18,694		18,060
		2,322,196		2,133,394		136,227		134,570
Total		2,414,558		2,224,244		136,227		134,570
Current		27,569		20,205
Non-current		2,386,989		2,204,039

19 Trade payables

	June 30, 2016			December 31, 2015
Natural gas suppliers		1,363,620			1,489,552
Materials and service suppliers		681,507			627,067
Fuels suppliers		1,122			3,535
Judicial deposits(i)		(294,976	)		(294,976	)
Other		92,911			139,834
		1,844,184			1,965,012
Current		1,843,392			1,963,981
Non-current		792			1,031

(i) On June 30, 2016, the balance of judicial discussion due to the fact of Petrobras is practicing different prices comparing to the market in gas supply is R$1,000,477, being the amount secured by judicial deposit R$294,976 and the amount guaranteed by bond R$705,501.

41

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

20 Other taxes payable

	June 30, 2016		December 31, 2015
ICMS—State VAT		89,946		73,692
Tax Amnesty and Refinancing Program—REFIS		51,262		56,041
COFINS—Revenue tax		35,407		23,080
INSS—Social security		7,974		7,483
PIS—Revenue tax		7,628		4,670
Other		42,243		39,901
		234,460		204,867
Current		187,384		153,540
Non-current		47,076		51,327

21 Income tax and social contribution

a) Reconciliation of income and social contribution tax expenses:

	April 1, 2016 to June 30, 2016			January 1, 2016 to June 30, 2016			April 1, 2015 to June 30, 2015 (Restated)			January 1, 2015 to June 30, 2015 (Restated)
Profit before taxes		313,940			514,916			198,959			157,095
Income tax and social contribution at nominal rate (34%)		(106,740	)		(175,071	)		(67,646	)		(53,412	)
Adjustments to reconcile nominal to effective tax rate
Equity in earnings of investees (non-taxable income)		84,658			234,185			20,020			76,201
Differences in tax rates on earnings / losses of overseas companies		(58,885	)		(102,969	)		(19,727	)		3,647
Differences in tax rates on entities under Brazilian presumed profits tax regime		5,610			7,953			4,784			11,144
Tax profit of the activity (operating income)		6,562			17,252			9,096			9,096
Stock options expenses		(1,002	)		(2,005	)		(996	)		(1,992	)
Interest on capital (net received)		(7,650	)		(13,260	)		—			(6,120	)
Non-deductible expenses (donations, gifts, etc.)		(3,619	)		(5,647	)		1,044			(11,219	)
Costs of issuing equity instruments		21,307			21,307			—			—
Tax losses not recorded		(6,377	)		(70,150	)		(27,348	)		(27,422	)
Other		(4,159	)		(2,110	)		(2,227	)		(3,232	)
Income tax and social contribution benefit (expense)—current and deferred		(70,295	)		(90,515	)		(83,000	)		(3,309	)
Effective rate—%		22.39			17.58			41.72			2.11

42

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

b) Deferred income tax assets and liabilities:

	June 30, 2016												December 31, 2015
	Basis			Income taxes (25%)			Social contribution (9%)			Total income taxes (34%)			Total income taxes (34%)
Tax loss carry forwards
Income tax loss carry forwards		7,593,381			1,898,345			—			1,898,345			1,597,697
Social contribution tax loss carry forwards		7,649,187			—			688,427			688,427			580,269
Temporary differences
Foreign currency losses		1,647,598			411,900			148,284			560,184			937,281
Provision for judicial demands		1,109,848			277,462			99,886			377,348			354,730
Impairment		960,278			240,070			86,425			326,495			350,325
Business combination—Property, plant and equipment		596,416			149,104			53,677			202,781			246,757
Tax deductible goodwill		50,184			12,546			4,517			17,063			129,207
Gains or losses on actuarial liabilities		315,577			78,894			28,402			107,296			103,820
Allowance for doubtful accounts		462,451			115,613			41,621			157,234			95,015
Regulatory asset		217,352			54,338			19,562			73,900			76,764
Profit sharing		44,369			11,092			3,993			15,085			32,327
Concession contract		(34,072	)		(8,518	)		(3,066	)		(11,584	)		(12,552	)
Assets held for sale		(121,556	)		(2,431	)		(1,313	)		(3,744	)		(1,255	)
Business combination—Other fair value adjustments		(731,577	)		(40,875	)		(16,937	)		(57,812	)		(66,404	)
Property, plant and equipment		(507,806	)		(126,952	)		(45,703	)		(172,655	)		(147,749	)
Unrealized gains on derivatives instruments		(22,178	)		(5,544	)		(1,996	)		(7,540	)		(469,899	)
Unrealized gains on investment properties		(1,976,172	)		(39,523	)		(21,343	)		(60,866	)		(62,069	)
Gain on formation of joint ventures		(3,338,342	)		(834,586	)		(300,451	)		(1,135,037	)		(1,135,037	)
(-) Valuation allowance		(5,016,942	)		(1,254,235	)		(451,525	)		(1,705,760	)		(1,526,639	)
Business combination—Intangible assets		(11,224,197	)		(2,806,049	)		(1,010,178	)		(3,816,227	)		(3,839,323	)
Other		542,750			139,738			50,279			190,017			275,782
Total net liability					(1,729,611	)		(627,439	)		(2,357,050	)		(2,480,953	)
Deferred income tax—Assets											1,655,441			1,698,611
Deferred income tax—Liabilities											(4,012,491	)		(4,179,564	)
Total net deferred taxes											(2,357,050	)		(2,480,953	)

c) Changes in deferred income taxes, net:

At December 31, 2015—Net deferred tax liability	(2,480,953	)
Recorded through income	129,654
Recorded through other comprehensive income	1,883
Business combinations	(27,505	)
Other(i)	19,871
At June 30, 2016—Net deferred tax liability	(2,357,050	)

(i) Exchange variation effect due to conversion of invested balance abroad.

43

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

22 Provision for legal proceedings

	Provision for legal proceedings				Judicial deposits
	June 30, 2016		December 31, 2015		June 30, 2016		December 31, 2015
Tax		456,232		441,674		388,422		377,435
Civil, regulatory and environmental		337,332		284,344		185,740		181,180
Labor		460,000		467,913		132,939		121,609
		1,253,564		1,193,931		707,101		680,224

Changes in provision for legal proceedings:

	Tax			Civil, regulatory and environmental			Labor			Total
At December 31, 2015		441,674			284,344			467,913			1,193,931
Accruals		4,197			26,629			57,122			87,948
Write-off / Reversals		(4,457	)		(12,450	)		(87,215	)		(104,122	)
Indexation and interest charges		14,818			38,809			22,180			75,807
At June 30, 2016		456,232			337,332			460,000			1,253,564

Tax claims

a) Judicial claims deemed to be probable losses, fully accrued

	June 30, 2016		December 31, 2015
Compensation with FINSOCIAL		262,073		255,022
State VAT—ICMS credits		82,352		79,417
INSS—Social security		60,481		57,916
PIS and COFINS		2,373		2,781
IPI—Excise tax credit—NT		1,115		1,105
Federal income taxes		329		329
Other		47,509		45,104
		456,232		441,674

44

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

b) Judicial claims deemed as possible losses, and therefore not accrued

	June 30, 2016		December 31, 2015
ICMS—State VAT		1,974,161		1,904,253
Federal income taxes(i)		1,714,971		886,178
Foreign financial operation		948,668		911,942
PIS and COFINS—Revenue taxes		849,593		879,669
IRRF—Withholding tax		826,450		792,104
INSS—Social security and other		609,324		577,686
IPI—Excise tax credit—NT		494,722		484,606
Goodwill ALL		464,933		446,535
Penalties related to tax positions		376,393		258,391
Compensation with IPI—IN 67/98		125,933		123,522
MP 470—Tax installments		116,940		113,814
Intermodal		78,301		76,914
Stock option		59,861		57,554
Financial transactions tax on loan		52,343		49,844
Social security contributions		42,294		40,855
Compensation credit award		36,622		—
Other		974,494		952,651
		9,746,003		8,556,518

(i) The tax contingencies relate to the tax assessments mainly in the Federal sphere assessed as possible losses by the legal counsel and management and, therefore, no reserve was required. Until the date of approval of the interim financial statements, the Company had knowledge of an assessment notice on goodwill amortization expense amounting possible is R$601,288. The tax assessment is questioned at the administrative level.

Civil, labor, regulatory and environmental

a) Judicial claims deemed to be probable losses, fully accrued

• Civil – refers mainly to compensation for material and moral damages, class actions for abstaining from straw burning sugarcane and execution of environmental nature.

• Labor – represent labor claims filed by former employees and employees of service providers who question, among others, payment of overtime, night and dangerous, job reinstatement, compensation for accidents at work and reimbursement of discounts from payroll, such as confederative and assistance contributions, union dues and other.

• Regulatory – mainly refers to fines and discussions with National Authority for Terrestrial Transport (ANTT).

• Environmental – these amounts derive from assessments made by the Environmental Sanitation Technology Company (CETESB-SP), Brazilian Institute of Environment and Natural Resources (IBAMA) and Environment Municipal Departments related to soil contamination and water by the overflow of products and non-compliance with conditions imposed by such operating license. In all cases, measures are being taken to reduce the existing liabilities, as well as repair and prevention measures.

45

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

b) Judicial claims deemed as possible losses, and therefore not accrued

The main civil and labor lawsuits, for which the unfavorable outcome is considered possible, are as follows:

	June 30, 2016		December 31, 2015
Civil		2,334,001		2,385,643
Labor		1,012,475		960,446
Regulatory		355,932		339,267
Environmental		325,637		295,984
		4,028,045		3,981,340

23 Shareholders’ equity

a) Share capital

As of June 30, 2016, Cosan Limited’s share capital is composed of the following:

Shareholders—Common shares	Class A and / or BDRs		%		Class B1 shares		%
Queluz Holdings Limited		9,933,168		5.70		66,321,766		68.85
Usina Costa Pinto S.A. Açúcar e Álcool		—		—		30,010,278		31.15
Gávea Investimentos Ltda.		17,126,127		9.82		—		—
Skagen AS		16,220,419		9.30		—		—
MSOR Participações S.A.		1,811,250		1.04		—		—
Other		123,267,875		70.70		—		—
Total shares outstanding		168,358,839		96.56		96,332,044		100.00
Treasury shares		5,996,502		3.44		—		—
Total		174,355,341		100.00		96,332,044		100.00

b) Treasury shares

The Company holds 5,996,502 Class A treasury shares as of June 30, 2016 and December 31, 2015 with a market value of U.S.$6.76 per share at December 31, 2015 (U.S.$3.69 per share at December 31, 2015).

46

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

c) Other comprehensive (loss) income

	December 31, 2015			Comprehensive (loss) income			June 30, 2016
Foreign currency translation effects		(468,350	)		145,955			(322,395	)
Loss on cash flow hedge in joint ventures and subsidiaries		(235,779	)		(139,300	)		(375,079	)
Revaluation of investment properties reclassified from property, plant and equipment		190,735			—			190,735
Actuarial gain on defined benefit plan		28,032			—			28,032
Financial instrument with subsidiary		—			6,000			6,000
Changes in fair value of available for sale securities		6,748			(865	)		5,883
Total		(478,614	)		11,790			(466,824	)
Attributable to:
Owners of the Parent		(478,207	)		35,503			(442,704	)
Non-controlling interests		(407	)		(23,713	)		(24,120	)
	December 31, 2014			Comprehensive (loss) income			June 30, 2015
Foreign currency translation effects		(298,446	)		(67,037	)		(365,483	)
Gain (loss) on cash flow hedge in joint ventures and subsidiaries		(10,574	)		56,154			45,580
Revaluation of investment properties reclassified from property, plant and equipment		190,735			—			190,735
Actuarial (losses) gain on defined benefit plan		47,104			—			47,104
Changes in fair value of available for sale securities		(1,467	)		3,299			1,832
Total		(72,648	)		(7,584	)		(80,232	)
Attributable to:
Owners of the Parent		(165,618	)		(25,242	)		(190,860	)
Non-controlling interests		92,970			17,658			110,628

47

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

24 Earnings per share

The following table sets forth the calculation of earnings per share for the period ended June 30, 2016 and 2015 (in thousands of Brazilian Reais, except per share amounts):

	April 1, 2016 to June 30, 2016			January 1, 2016 to June 30, 2016			April 1, 2015 to June 30, 2015 (Restated)			January 1, 2015 to June 30, 2015 (Restated)
Profit (loss) attributable to ordinary equity holders for basic earnings		26,362			157,671			(14,130	)		2,973
Effect of dilution:
Dilutive effect of subsidiary’s stock option plan		(1,012	)		(1,446	)		(71	)		(7	)
Dilutive effect of put option		(15,601	)		(15,601	)		(15,601	)		(15,601	)
Profit attributable to ordinary equity holders adjusted for the effect of dilution		9,749			140,624			(29,802	)		(12,635	)
Weighted average number of shares outstanding		264,690,883			264,690,883			264,690,883			264,690,883
Basic earnings (loss) per share from continuing operations		R$0.10			R$0.60			(R$0.05	)		R$0.01
Diluted earnings (loss) per share from continuing operations		R$0.04			R$0.53			(R$0.11	)		(R$0.05	)

The non-controlling interests of the indirect subsidiary Brado have the right to exercise a liquidity option provided for in the shareholders’ agreement signed on August 5, 2013. This option would exchange all Brado shares held by such minority shareholders by shares of ALL. The exchange ratio shall take into account the economic value for both Brado and ALL shares. At the Company’s exclusive discretion, an equivalent cash payment is also possible.

The stock option plan is out of money, so, the exercise price of the options granted is much higher than the average stock price during the period. These financial instruments have antidilutive effects in the periods presented.

48

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

25 Financial results

	April 1, 2016 to June 30, 2016			January 1, 2016 to June 30, 2016			April 1, 2015 to June 30, 2015			January 1, 2015 to June 30, 2015
Cost of gross debt
Interest on debt		(376,459	)		(809,666	)		(349,872	)		(527,356	)
Exchange and monetary variations		490,033			999,744			99,125			(593,641	)��
Derivatives		(758,722	)		(1,458,848	)		(219,852	)		400,904
Amortization of borrowing costs		(62,509	)		(62,509	)		—			—
Discounts obtained from financial operations		85,274			85,274			—			—
Guarantees and warranties on debt		(9,504	)		(22,978	)		(5,590	)		(11,337	)
		(631,887	)		(1,268,983	)		(476,189	)		(731,430	)
Income from financial investment		152,128			271,303			92,968			141,845
Cost of debt, net		(479,759	)		(997,680	)		(383,221	)		(589,585	)
Other charges and monetary variations
Monetary variation on leases and concessions agreements		(72,174	)		(145,582	)		(53,691	)		(53,691	)
Monetary restatement and interest on leases		(51,389	)		(102,094	)		(22,217	)		(22,217	)
Interest on other receivables		63,271			133,511			17,762			31,214
Interest on other liabilities		(170,939	)		(357,297	)		(114,646	)		(197,884	)
Bank charges		(63,814	)		(110,741	)		(41,200	)		(57,017	)
Other		26,140			26,466			(11,693	)		21,851
		(268,905	)		(555,737	)		(225,685	)		(277,744	)
Financial results, net		(748,664	)		(1,553,417	)		(608,906	)		(867,329	)
Reconciliation
Finance expense		(843,207	)		(1,719,946	)		(649,236	)		(940,848	)
Finance income		329,722			580,495			121,976			191,747
Foreign exchange losses, net		534,151			1,059,505			98,058			(493,756	)
Derivatives		(769,330	)		(1,473,471	)		(179,704	)		375,528
Financial results, net		(748,664	)		(1,553,417	)		(608,906	)		(867,329	)

49

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

26 Other (expense) income, net

	April 1, 2016 to June 30, 2016			January 1, 2016 to June 30, 2016			April 1, 2015 to June 30, 2015			January 1, 2015 to June 30, 2015
Settlement of pre-existing relationship with business combinations		—			—			29,838			29,838
Insurance reimbursement income		418			7,568			5,739			8,244
Rental income		831			1,216			1,952			2,121
Cost related to internal organization and prospective acquisitions		—			—			(105	)		(101,364	)
Changes in the fair value of investment properties		8,822			8,532			8,842			23,162
Loss on disposal of non-current assets		(2,732	)		(9,226	)		(1,377	)		(2,659	)
Provisions for legal proceedings		(38,322	)		(76,191	)		(10,025	)		(24,143	)
Other		10,898			10,450			3,055			3,397
		(20,085	)		(57,651	)		37,919			(61,404	)

27 Financial instruments

Financial risk management

Overview

The Company is exposed to the following risks related to the use of financial instruments:

• Credit risk;

• Liquidity risk; and

• Market risk.

This note presents information about the exposure of the Company and its subsidiaries to the above risks, as well as the objectives of the Company’s risk management policies, these policy and processes for the assessment and management of risks.

50

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

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

	June 30, 2016		December 31, 2015
Assets
Fair value through profit or loss
Investment funds		1,837,245		2,244,427
Marketable securities		1,850,353		605,490
Other financial assets		141,064		144,208
Derivate financial instruments		1,002,919		2,430,296
		4,831,581		5,424,421
Loans and receivables
Cash and cash equivalents		706,789		1,261,397
Trade receivables		1,112,722		964,978
Retricted cash		189,159		258,183
Receivables from related parties		293,635		296,574
Dividends receivable		14,205		12,064
		2,316,510		2,793,196
Total		7,148,091		8,217,617
Liabilities
Liabilities amortized cost
Loans, borrowings and debentures		13,489,097		13,895,414
Leases		1,650,866		1,741,701
Advances on real state credits		242,165		285,006
Trade payables		1,844,184		1,965,012
Other financial liabilities		195,810		236,698
Payables to related parties		208,773		204,080
Contingent consideration		141,352		217,377
Dividends payable		38,061		39,934
Tax installments—REFIS		51,262		56,041
Preferred shareholders payable in subsidiaries		1,973,074		2,042,878
		19,834,644		20,684,141
Fair value through profit or loss
Loans, borrowings and debentures		3,684,615		4,933,789
Post-employment benefits		354,595		344,447
Derivative financial instruments		840,393		742,498
		4,879,603		6,020,734
		24,714,247		26,704,875

During the period there was no reclassification between categories, fair value through profit or loss, loans and receivables and liabilities at the amortized cost presented above.

51

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

Risk management structure

As at June 30, 2016 and December 31, 2015, the fair values relating to transactions involving derivative financial instruments to protect the Company’s risk exposure were using observable inputs such as quoted prices in active markets, or discounted cash flows based on market curves, and are presented below:

	Notional				Fair value
	June 30, 2016		December 31, 2015		June 30, 2016			December 31, 2015
Exchange rate derivatives
Forward agreements		1,947,859		2,058,190		(207,240	)		46,247
Interest rate and exchange rate risk
Swap agreements (interest rate)		1,831,966		1,083,526		10,295			(107,230	)
Cross currency interest rate swaps		2,876,487		4,629,948		359,471			1,748,781
		4,708,453		5,713,474		369,766			1,641,551
Total financial instruments						162,526			1,687,798
Assets						1,002,919			2,430,296
Liabilities						(840,393	)		(742,498	)

Credit risk

	June 30, 2016		December 31, 2015
Cash and cash equivalents(i)		2,544,034		3,505,824
Trade receivables(ii)		1,112,722		964,978
Other financial assets(ii)		141,064		144,208
Derivative financial instruments(i)		1,002,919		2,430,296
Marketable securities(i)		1,850,353		605,490
Restricted cash(i)		189,159		258,183
Dividends receivable		14,205		12,064
		6,854,456		7,921,043

(i) The cash and cash equivalents are held with bank and financial institution counterparties, which are rated BB to AAA.

The credit risk on cash and cash equivalents, marketable securities, other financial assets and derivative financial instruments are determined by rating instruments widely accepted by the market and are arranged as follows:

	June 30, 2016		December 31, 2015
AAA		529,336		1,473,089
AA+		1,645,741		—
AA		2,289,827		4,068,000
A		1,205,756		357,399
BB		—		207,097
BBB		56,869		580,233
		5,727,529		6,685,818

(ii) Customer credit risk is managed by each business unit subject to the Company’s established policy, procedures and control relating to customer credit risk management. Credit quality of the customer is assessed based on an extensive credit rating scorecard and individual credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored and any shipments to major customers are generally covered by letters of credit or other forms of credit insurance.

Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department in accordance with the Company’s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed on an annual basis and may be updated throughout the year. The limits are set to minimize the concentration of risks and therefore mitigate financial loss through potential counterparty’s failure to make payments. The Company’s maximum exposure to credit risk for the components of the statement of financial position is the carrying amounts as illustrated in Note 16. The Company’s maximum exposure for financial guarantees and financial derivative instruments are as below.

52

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation. As mentioned in Note 1, Management has been working on measures to enable the Company to honor its Commitments.

The non-derivative financial liabilities of the Company sorted by due dates (based on undiscounted cash flows contracted) are as follows:

	June 30, 2016															December 31, 2015
	Up to 1 year			1 - 2 years			3 - 5 years			More than 5 years			Total			Total
Loans, borrowings and debentures		(3,609,337	)		(5,152,307	)		(10,474,269	)		(8,645,085	)		(27,880,998	)		(29,450,102	)
Trade payables		(1,843,392	)		(792	)		—			—			(1,844,184	)		(1,965,012	)
Other financial liabilities		(195,810	)		—			—			—			(195,810	)		(236,698	)
REFIS		(13,392	)		(11,786	)		(16,510	)		(14,511	)		(56,199	)		(64,529	)
Leases		(690,784	)		(447,059	)		(665,174	)		(365,882	)		(2,168,899	)		(2,132,455	)
Real estate credits certificates		(138,824	)		(128,862	)		(45,376	)		—			(313,062	)		(382,559	)
		(6,491,539	)		(5,740,806	)		(11,201,329	)		(9,025,478	)		(32,459,152	)		(34,231,355	)

Market risk

Market risk is the risk that changes in market prices – such as foreign exchange rates, interest rates and equity prices – will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

The Company uses derivatives to manage market risks. All such transactions are carried out within the guidelines set by the Risk Management Committee. Generally, the Company seeks to apply hedge accounting to manage volatility in profit or loss.

53

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

a) Foreign exchange risk

As at June 30, 2016 and December 31, 2015, the Company and its subsidiaries had the following net exposure to the exchange rate variations on assets and liabilities denominated in Brazilian Reais:

	June 30, 2016						December 31, 2015
	R$			US$			R$			US$
Cash and cash equivalents		183,651			57,216			256,003			65,561
Trade receivables		19,651			6,122			18,227			4,668
Advances to suppliers		67,576			21,053			85,155			21,808
Trade payables		(68,924	)		(21,473	)		(15,894	)		(4,070	)
Loans, borrowings and debentures		(5,854,184	)		(1,823,846	)		(6,653,006	)		(1,703,802	)
Advances from clients		—			—			(1,701	)		(436	)
Contingent consideration		(35,638	)		(11,103	)		(65,064	)		(16,663	)
Derivative financial instruments		4,824,346			1,503,150			6,688,138			1,712,799
Foreign exchange exposure, net		(863,522	)		(268,881	)		311,858			79,865

Sensitivity analysis on changes in foreign exchange rates:

The probable scenario was defined based on the U.S. Dollar market rates as at June 30, 2016, which determines the fair values of the derivatives at that date. Stressed scenarios (positive and negative effects, before tax effects) were defined based on changes of a 25% and 50% to the U.S. Dollar exchange rates used in the probable scenario.

Based on the financial instruments denominated in U.S. Dollars at June 30, 2016, the Company performed a sensitivity analysis by increasing and decreasing the exchange rate for R$/US$ by 25% and 50%. The probable scenario considers the estimated exchange rates at the due date of the transactions for the companies with functional currency Real (positive and negative, before tax effects), as follows:

	Exchange rate sensitivity analysis (R$/US$)
	June 30, 2016		Scenario
			Probable		25%		50%		-25%		-50%
USD		3.2098		3.5376		4.4220		5.3064		2.6532		1.7688

54

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

Considering the above scenario the profit or loss would be impacted as follows:

			Variation scenario
Instrument	Risk factor		Probable			25%			50%			-25%			-50%
Cash and cash equivalents		USD fluctuation		18,702			69,160			119,617			(31,756	)		(82,213	)
Trade receivables		USD fluctuation		2,007			7,421			12,836			(3,408	)		(8,822	)
Advances to suppliers		USD fluctuation		7,063			25,723			44,382			(11,597	)		(30,257	)
Trade payables		USD fluctuation		(7,039	)		(26,030	)		(45,020	)		11,952			30,943
Exchange rate derivatives(i)		USD fluctuation		198,924			735,620			1,272,316			(337,771	)		(874,467	)
Exchange rate and interest derivatives(i)		USD and CDI fluctuation		487,685			1,803,454			3,119,223			(828,083	)		(2,143,852	)
Loans, borrowings and debentures		USD fluctuation		(597,857	)		(2,210,866	)		(3,823,875	)		1,015,153			2,628,162
Contingent consideration		USD fluctuation		(3,640	)		(13,459	)		(23,278	)		6,180			15,999
Impacts on profit or loss				105,845			391,023			676,201			(179,330	)		(464,507	)

(i) For sensitivity analysis, it’s only considered exchange rate swaps for Notional.

b) Interest rate risk

The Company and its subsidiaries monitor the fluctuations in variable interest rates in connection with its borrowings, especially those that accrue interest using LIBOR, and uses derivative instruments in order to minimize variable interest rate fluctuation risks.

Sensitivity analysis on changes in interest rates:

A sensitivity analysis on the interest rates on loans and borrowings in compensation for the CDI investments with pre-tax increases and decreases of 25% and 50% is presented below:

	June 30, 2016
Exposure interest rate(i)	Probable			25%			50%			-25%			-50%
Cash and cash equivalents		267,963			66,991			133,981			(66,991	)		(133,981	)
Marketable securities		230,975			57,744			115,488			(57,744	)		(115,488	)
Other financial assets		18,564			4,641			9,282			(4,641	)		(9,282	)
Leases		(121,446	)		(30,361	)		(50,976	)		30,361			50,976
Advances on real state credits		(31,869	)		(7,967	)		(15,935	)		7,967			15,935
Interest rate derivatives		10,295			(264,866	)		(485,662	)		322,079			723,670
Loans, borrowings and debentures		(1,474,927	)		(368,732	)		(737,464	)		368,732			737,464
Impacts on profit or loss		(1,100,445	)		(542,550	)		(1,031,286	)		599,763			1,269,294

55

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

The probable scenario considers the estimated interest rate, as follows:

	Probable		25%		50%		-25%		-50%
SELIC		13.18%		16.48%		19.77%		9.89%		6.59%
CDI		13.16%		16.45%		19.74%		9.87%		6.58%
TJ462		8.50%		10.63%		12.75%		6.38%		4.25%
TJLP		7.50%		9.38%		11.25%		5.63%		3.75%
IPCA		5.98%		7.48%		8.97%		4.49%		2.99%
LIBOR		1.20%		1.50%		1.80%		0.90%		0.60%

Financial instruments fair value

The fair values of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:

• The cash and cash equivalents, accounts receivable, trade receivables, trade payables and other current liabilities approximate their carrying amount largely due to the short-term maturity of these instruments.

• The fair values of the quoted notes and bonds are based on price quotations at the reporting date. The fair value of unquoted instruments, loans from banks and other financial liabilities, obligations under finance leases, as well as other non-current financial liabilities is estimated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities.

• The market value of the Senior Notes Due 2018, 2023 and 2027 are listed on the Luxembourg Stock Exchange (Note 16) is based on their quoted market price as of June 30, 2016, of 94.99% (78.71% on December 31, 2015) and 94.54% (83.83% at December 31, 2015), respectively, of the face nominal value at June 30, 2016.

• The fair value of Perpetual Notes listed on the Luxembourg Stock Exchange (Note 16) is based on their quoted market price as June 30, 2016 of 95.69% (79.64% at December 31, 2015) of the face value of obligations at June 30, 2016.

• The fair value of other loans and financing, the respective market values substantially approximate the amounts recorded due to the fact that these financial instruments are subject to variable interest rates (Note 16).

• The fair values of the remaining of assets held for sale are derived from quoted market prices in active markets.

The Company and its subsidiaries enter into derivative financial instruments with various counterparties, principally financial institutions with investment grade credit ratings. Derivatives valued using valuation techniques with observable market data refer mainly to interest rate swaps and foreign exchange forward contracts.

The fair value of derivative financial instruments is determined using valuation techniques and observable market data. The valuation techniques applied more often include pricing models and swaps contracts, with a present value calculation. The models consider various data, including counterparty credit quality, spot exchange rates, forward curves of interest rates and curves of the commodity term rates.

56

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

The carrying amounts and fair value of financial assets and financial liabilities are as follows:

	Carrying amount						Assets and liabilities measured at fair value
	June 30, 2016			December 31, 2015			June 30, 2016					December 31, 2015
							Level 1		Level 2			Level 1		Level 2
Assets
Investment funds		1,837,245			2,244,427			—		1,837,245			—		2,244,427
Marketable securities		1,850,353			605,490			—		1,850,353			—		605,490
Other financial assets		141,064			144,208			—		141,064			—		144,208
Derivate financial instruments		1,002,919			2,430,296			—		1,002,919			—		2,430,296
Total		4,831,581			5,424,421			—		4,831,581			—		5,424,421
Liabilities
Loans, borrowings and debentures		(3,684,615	)		(4,933,789	)		—		(3,684,615	)		—		(4,933,789	)
Post-employment benefits		(354,595	)		(344,447	)		—		(354,595	)		—		(344,447	)
Derivative financial instruments		(840,393	)		(742,498	)		—		(840,393	)		—		(742,498	)
Total		(4,879,603	)		(6,020,734	)		—		(4,879,603	)		—		(6,020,734	)

Hedge accounting – Fair value

Currently the Company has adopted the fair value hedge for some of its operations that both the hedging instruments and the hedged items are accounted for at fair value through profit or loss. Operations and accounting effects of this adoption are as follows:

	Debt			Derivative			Total
At December 31, 2015		2,522,772			(822,586	)		1,700,186
Interest amortization		(62,455	)		251,685			189,230
Fair value		(339,068	)		467,073			128,005
At June 30, 2016		2,121,249			(103,828	)		2,017,421

Capital management

The Company’s policy is to maintain a robust capital base to promote the confidence of investors, creditors and the market, and to ensure the future development of the business. Management monitors that the return on capital is adequate for each of its businesses.

57

Cosan Limited

Notes to the consolidated financial statements

For the three and six month periods ended June 30, 2016 and 2015

(Amounts in thousands of Brazilian Reais – R$, unless otherwise stated)

28 Post-employment benefits

	June 30, 2016		December 31, 2015
Futura		48,410		48,414
Futura II		263		335
COMGÁS		305,922		295,698
		354,595		344,447

During the period ended June 30, 2016, the expense recognized in relation to the actuarial contributions was R$13,946 (R$13,331 for the six month period ended June 30, 2015).

29 Share-based payment

The vesting period and share options outstanding at the end of the period are as follows:

Share option programs	Expected life (years)		Interest rate		Expected volatility		Number of instruments on June 30, 2016						Market price on grant date		Exercise price at June 30, 2016		Fair value at grant date - R$(i)
							Granted		Exercisable options		Outstanding
August 18, 2011 (A)		1 to 5		12.39%		31.44%		4,825,000		840,000		2,206,250		22.98		26.50		6,80
August 18, 2011 (B)		1 to 10		12.39%		30.32%		5,000,000		1,080,000		4,080,000		22.98		26.50		8,15
December 12, 2012 (C)		1 to 5		8.78%		31.44%		700,000		372,000		652,000		39.80		46.42		10.10
April 24, 2013		5		13.35%		27.33%		970,000		—		930,000		46.51		53.21		17,95
April 25, 2014		5		12.43%		29.85%		960,000		—		930,000		37.10		43.29		15,67
August 31, 2015		5		14.18%		33.09%		759,000		—		759,000		18.15		19.68		7.67
October 2, 2015		5		15.66%		62.94%		4,485,238		—		4,205,238		6.30		7.86		2.83
								17,699,238		2,292,000		13,762,488

(i) The fair value of the employee share options has been measured using the Black-Scholes formula.

The number and weighted-average exercise prices of share options under the share option programs were as follows:

	Number of options			Weighted-average exercise price -R$
At December 31, 2015		13,876,238			24.22
Cancellation or settlements		(70,000	)		—
Share options exercised		(43,750	)		26.50
At June 30, 2016		13,762,488			24.31

***

58

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: September 15, 2016

COSAN LIMITED
By:	/s/ Marcelo Eduardo Martins
	Name: Marcelo Eduardo Martins Title: Chief Financial Officer