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 November, 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 September 30, 2016 and independent auditors’ review report
2.	Signatures

Cosan Limited

Consolidated interim financial

statements as at September 30, 2016 and

independent auditors’ review report

Cosan Limited

Consolidated financial statements

For the three and nine month periods ended on September 30, 2016 and 2015

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

Report on review of interim financial information – ITR

To the Board of Directors and Shareholders of

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 September 30, 2016, which comprises the statement of financial position as of September 30, 2016 and the respective statements of profit or loss and comprehensive income (loss) for the three and nine-month periods then ended and changes in equity and cash flows for the nine-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, November 9, 2016

KPMG Auditores Independentes

CRC 2SP014428/O-6

Rogério Hernandez Garcia

Contador CRC 1SP213431/O-5

1

Cosan Limited

Consolidated statements of financial position

(In thousands of Brazilian Reais - R$)

	Note		September 30, 2016		December 31, 2015 (Restated)
Assets
Cash and cash equivalents		6		3,147,964		3,505,824
Restricted cash				—		57,290
Marketable securities		7		1,385,289		605,490
Trade receivables		8		1,047,026		904,245
Derivative financial instruments		27		24,382		138,105
Inventories				690,351		656,901
Receivables from related parties		10		64,342		75,229
Income tax receivable				299,684		135,050
Other current tax receivable		9		212,293		311,892
Dividends receivable				6,291		12,064
Assets held for sale		13		3,067,056		149,938
Other financial assets				—		144,208
Other current assets				196,249		138,995
Total current assets				10,140,927		6,835,231
Trade receivables		8		60,806		60,733
Restricted cash				195,461		200,893
Deferred tax assets		21		1,430,900		1,698,611
Receivables from related parties		10		178,992		221,345
Income tax receivable				123,176		274,597
Other non-current tax receivable		9		691,695		633,549
Judicial deposits		22		695,593		680,224
Derivative financial instruments		27		1,200,694		2,292,191
Other non-current assets				1,166,574		1,185,787
Investments in associates		11		204,993		184,376
Investments in joint ventures		12		8,501,602		8,237,190
Investment property		13		—		2,595,035
Property, plant and equipment		14		10,695,143		9,805,887
Intangible assets and goodwill		15		17,139,989		17,309,689
Total non-current assets				42,285,618		45,380,107
Total assets				52,426,545		52,215,338

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

2

Cosan Limited

Consolidated statements of financial position

(In thousands of Brazilian Reais - R$)

	Note		September 30, 2016			December 31, 2015 (Restated)
Liabilities
Loans, borrowings and debentures		16		2,424,364			2,775,510
Leases		17		543,438			539,615
Real estate credit certificates				101,545			88,089
Derivative financial instruments		27		92,388			812
Trade payables		19		1,914,837			1,963,981
Employee benefits payable				235,585			256,279
Income tax payables				121,435			59,620
Other taxes payable		20		177,506			153,540
Concessions payables		18		27,575			20,205
Dividends payable				22,480			39,934
Payables to related parties		10		230,996			204,080
Deferred revenue				14,167			110,517
Other financial liabilities				248,374			236,698
Liabilities held for sale		13		235,392			—
Other current liabilities				354,034			473,753
Total current liabilities				6,744,116			6,922,633
Loans, borrowings and debentures		16		15,349,047			16,053,693
Leases		17		990,680			1,202,086
Real estate credit certificates				119,031			196,917
Preferred shareholders payable in subsidiaries				2,023,988			2,042,878
Derivative financial instruments		27		536,260			741,686
Trade payables		19		817			1,031
Other taxes payable		20		37,723			51,327
Provision for legal proceedings		22		1,268,709			1,193,931
Concessions payables		18		2,483,589			2,204,039
Post-employment benefits		28		358,065			344,447
Deferred tax liabilities		21		3,665,644			4,179,564
Deferred revenue				64,844			95,730
Other non-current liabilities				807,977			723,034
Total non-current liabilities				27,706,374			29,030,363
Total liabilities				34,450,490			35,952,996
Shareholders’ equity		23
Share capital				5,328			5,328
Additional paid-in capital				4,052,683			4,006,562
Accumulated other comprehensive loss				(470,625	)		(478,207	)
Retained earnings				2,654,962			2,425,567
Equity attributable to:
Owners of the Company				6,242,348			5,959,250
Non-controlling interests		11		11,733,707			10,303,092
Total shareholders’ equity				17,976,055			16,262,342
Total shareholders’ equity and liabilities				52,426,545			52,215,338

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

3

Cosan Limited

Consolidated statements of profit or loss and other comprehensive income

For the three and nine month periods ended September 30, 2016 and 2015

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

	Note		July 1, 2016 to September 30, 2016			January 1, 2016 to September 30, 2016			July 1, 2015 to September 30, 2015 (Restated)			January 1, 2015 to September 30, 2015 (Restated)
Net sales				3,272,803			9,732,259			3,573,442			8,999,275
Cost of sales				(2,036,006	)		(6,097,797	)		(2,518,408	)		(6,270,117	)
Gross profit				1,236,797			3,634,462			1,055,034			2,729,158
Selling expenses				(265,564	)		(760,200	)		(233,615	)		(673,976	)
General and administrative expenses				(231,196	)		(729,258	)		(237,018	)		(636,141	)
Other (expense) income, net		25		(16,902	)		(83,219	)		(1,234	)		(83,422	)
Operating expenses				(513,662	)		(1,572,677	)		(471,867	)		(1,393,539	)
Income before equity in earnings of investees and financial results				723,135			2,061,785			583,167			1,335,619
Equity in earnings of investees
Equity in earnings of associates		11		8,393			3,235			4,493			1,515
Equity in earnings of joint ventures		12		404,245			1,098,183			24,917			252,014
				412,638			1,101,418			29,410			253,529
Financial results
Finance expense				(1,140,312	)		(2,859,507	)		(666,221	)		(1,609,950	)
Finance income				263,408			834,976			194,875			382,222
Foreign exchange (losses) gain, net				(47,689	)		1,011,866			(271,185	)		(764,917	)
Derivatives				156,206			(1,317,265	)		206,988			582,516
		26		(768,387	)		(2,329,930	)		(535,543	)		(1,410,129	)
Profit before taxes				367,386			833,273			77,034			179,019
Income tax (expenses) benefits		21
Current				(2,593	)		(216,540	)		(26,301	)		(143,346	)
Deferred				(67,353	)		64,562			13,013			133,569
				(69,946	)		(151,978	)		(13,288	)		(9,777	)
Profit from continuing operations				297,440			681,295			63,746			169,242
Profit from discontinued operation, net of tax		13		18,312			58,860			12,857			57,561
Profit for the period				315,752			740,155			76,603			226,803

4

Cosan Limited

Consolidated statements of profit or loss and other comprehensive income

For the three and nine month periods ended September 30, 2016 and 2015

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

Other comprehensive income (loss)
Items that are or may be reclassified to profit or loss:
Foreign currency translation effect			(4,009	)		141,946			(126,652	)		(193,689	)
Loss on cash flow hedge in joint ventures and subsidiary			(34,006	)		(174,743	)		(96,987	)		(40,459	)
Financial instruments—common transactions			—			6,000			—			—
Changes in fair value of available for sale securities			1,903			592			2,485			7,483
Taxes on items that may be reclassified to profit or loss			(1,541	)		342			(802	)		(2,875	)
			(37,653	)		(25,863	)		(221,956	)		(229,540	)
Total other comprehensive loss, net of tax			(37,653	)		(25,863	)		(221,956	)		(229,540	)
Total comprehensive income (loss)			278,099			714,292			(145,353	)		(2,737	)
Total net income attributable to:
Owners of the Company			158,193			315,865			46,002			48,975
Non-controlling interests			157,559			424,290			30,601			177,828
			315,752			740,155			76,603			226,803
Total comprehensive income attributable to:
Owners of the Company			130,273			323,447			(125,791	)		(148,060	)
Non-controlling interests			147,826			390,845			(19,562	)		145,323
			278,099			714,292			(145,353	)		(2,737	)
Basic earnings per share from:	24
Continuing operations		R$	0.59765		R$	1.19333		R$	0.17380		R$	0.18503
Discontinuing operations		R$	0.01554		R$	0.05853		R$	0.01329		R$	0.04749
		R$	0.61319		R$	1.25186		R$	0.18709		R$	0.23252
Diluted earnings per share from:	24
Continuing operations		R$	0.53477		R$	1.12787		R$	0.11335		R$	0.12564
Discontinuing operations		R$	0.01545		R$	0.05836		R$	0.01329		R$	0.04749
		R$	0.55022		R$	1.18623		R$	0.12664		R$	0.17313

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

5

Cosan Limited

Consolidated statements of changes in equity

For the nine month period ended September 30, 2016 and 2015

(In thousands of Brazilian Reais - R$)

			Capital reserve
	Share capital		Additional paid-in capital			Accumulated other comprehensive loss			Retained earnings			Equity attributable to owners of the Company			Non-controlling interest			Total equity
At January 01, 2016		5,328		4,006,562			(478,207	)		2,483,283			6,016,966			10,337,706			16,354,672
Effect of changes to IAS 41
–in joint ventures (Note 2.2)		—		—			—			(57,716	)		(57,716	)		(34,614	)		(92,330	)
At January 01, 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		—		—			—			315,865			315,865			424,290			740,155
Other comprehensive income:
Loss on cash flow hedge injoint ventures and subsidiary		—		—			(108,393	)		—			(108,393	)		(65,807	)		(174,200	)
Foreign currency translation effects		—		—			112,249			—			112,249			29,697			141,946
Financial instruments—common transactions		—		—			3,751			—			3,751			2,249			6,000
Change in fair value of available for sale securities		—		—			(25	)		—			(25	)		416			391
Total comprehensive income for the period		—		—			7,582			315,865			323,447			390,845			714,292
Contributions by and distributions to owners of the Company:
Dividends—non-controlling interests		—		(7,091	)		—			—			(7,091	)		7,091			—
Share options exercised		—		10,917			—			—			10,917			6,268			17,185
Dividends		—		—			—			(86,470	)		(86,470	)		(687,799	)		(774,269	)
Share-based compensation—Subsidiaries		—		4,742			—			—			4,742			4,101			8,843
Total contributions by and distributions to owners of the Company		—		8,568			—			(86,470	)		(77,902	)		(670,339	)		(748,241	)
Transactions with owners of the Company
Change of shareholding interest in subsidiary		—		37,553			—			—			37,553			1,710,109			1,747,662
At September 30, 2016		5,328		4,052,683			(470,625	)		2,654,962			6,242,348			11,733,707			17,976,055

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

6

Cosan Limited

Consolidated statements of changes in equity

For the nine month period ended September 30, 2016 and 2015

(In thousands of Brazilian Reais - R$)

			Capital reserve
	Share capital		Additional paid-in capital			Accumulated other comprehensive loss			Retained earnings			Equity attributable to owners of the Company			Non-controlling interest			Total equity
At January 1, 2015		5,328		3,887,109			(165,618	)		2,117,739			5,844,558			7,644,749			13,489,307
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	)		2,110,282			5,837,101			7,640,277			13,477,378
Net profit for the period		—		—			—			48,975			48,975			177,828			226,803
Other comprehensive income:
Gain on cash flow hedge in joint ventures and subsidiary		—		—			(25,498	)		—			(25,498	)		(15,292	)		(40,790	)
Foreign currency translation effects		—		—			(172,287	)		—			(172,287	)		(21,402	)		(193,689	)
Change in fair value of available for sale securities		—		—			750			—			750			4,189			4,939
Total comprehensive income for the period		—		—			(197,035	)		48,975			(148,060	)		145,323			(2,737	)
Contributions and distributions for shareholders
Dividends—non-controlling interests		—		(1,965	)		—			—			(1,965	)		1,965			—
Dividends		—		—			—			(94,246	)		(94,246	)		(299,462	)		(393,708	)
Share based compensation—Subsidiaries		—		5,496			—			—			5,496			3,293			8,789
Total contributions by and distributions to owners of the Parent		—		3,531			—			(94,246	)		(90,715	)		(294,204	)		(384,919	)
Transactions with shareholders
Acquisition of non-controlling interest		—		636			—			—			636			(10,838	)		(10,202	)
Business combination ALL		—		118,937			—			—			118,937			2,829,498			2,948,435
Share buy-back cost—Rumo		—		(3,901	)		—			—			(3,901	)		(21,202	)		(25,103	)
		—		115,672			—			—			115,672			2,797,458			2,913,130
At September 30, 2015		5,328		4,006,312			(362,653	)		2,065,011			5,713,998			10,288,854			16,002,852

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

7

Cosan Limited

Consolidated statements of cash flows

For the nine month periods ended September 30, 2016 and 2015

(In thousands of Brazilian Reais - R$)

	Note		January 1, 2016 to September 30, 2016			January 1, 2015 to September 30, 2015 (Restated)
Cash flows from operating activities
Profit before taxes				833,273			179,019
Profit before taxes discontinued operation		13		72,020			67,889
Adjustments for:
Depreciation and amortization				1,252,911			820,066
Equity in earnings of associates		11		(3,235	)		(1,515	)
Equity in earnings of joint ventures		12		(1,098,183	)		(252,014	)
Losses on disposals of assets				12,347			5,884
Option shares expense				8,843			8,789
Change in fair value of investment property				(9,692	)		(23,162	)
Provision for legal proceedings				79,431			37,092
Indexation charges, interest and exchange, net				2,549,541			1,574,174
Take or pay				(107,488	)		—
Other				54,019			169,426
				3,643,787			2,585,648
Changes in:
Trade receivables				(117,863	)		(72,945	)
Inventories				(46,070	)		(113,639	)
Recoverable taxes				188,577			(35,375	)
Related parties				17,545			(22,539	)
Trade payables				(75,283	)		527,186
Other financial liabilities				(49,327	)		—
Employee benefits				(92,494	)		(35,824	)
Provision for legal proceedings				(58,224	)		(21,158	)
Judicial deposits				(14,369	)		(2,825	)
Post-employment benefits				(20,744	)		(17,711	)
Income tax and other tax				(94,618	)		(76,051	)
Concessions payable				(80,714	)		(17,711	)
Other assets and liabilities, net				(193,462	)		(162,868	)
				(637,046	)		(51,460	)
Net cash generated by operating activities				3,006,741			2,534,188
Cash flows from investing activities
Capital contribution in associates				(21,376	)		(59,747	)
Non-controlling interest acquisition				(54,122	)		—
Marketable securities				(876,444	)		(161,405	)
Restricted cash				64,700			57,490
Dividends received from associates				12,526			1,150
Dividends received from joint ventures				658,392			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				(1,596,658	)		(1,337,715	)
Related parties				11,338			—
Net cash used in investing activities				(1,987,696	)		(1,124,099	)

8

Cosan Limited

Consolidated statements of cash flows

For the nine month periods ended September 30, 2016 and 2015

(In thousands of Brazilian Reais - R$)

Cash flows from financing activities
Loans and borrowings and debentures raised		5,933,587		3,052,947
Payment of principal on loans, borrowings and debentures		(6,218,311	)	(2,556,574	)
Payment of interest on loans, borrowings and debentures		(1,104,575	)	(915,993	)
Payment of principal on leases		(322,455	)	(194,088	)
Payment of interest on leases		(266,173	)	(108,685	)
Non-controlling interest capital increase		1,979,894		—
Real state credits certificate		(95,740	)	(66,482	)
Related parties		—		(3,803	)
Non-controlling interest subscription		28,764		—
Derivative financial instruments		(248,663	)	225,973
Dividends paid		(968,778	)	(410,533	)
Treasury shares		17,185		(12,186	)
Net cash used in financing activities		(1,265,265	)	(989,424	)
(Decrease) increase in cash and cash equivalents		(246,220	)	420,665
Cash and cash equivalents at beginning of period		3,505,824		1,649,340
Effect of exchange rate fluctuations on cash held		(101,707	)	56,803
Cash and cash equivalents at end of period	6	3,157,897		2,126,808
Supplemental cash flow information
Income taxes paid		58,943		81,067
Business combination—non-cash effect		—		2,537,831

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

9

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 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 62.41% and 72.75% 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 September 30, 2016, Cosan Logística had a negative consolidated working capital of R$694,271 and loss for the period of R$42,641. Nevertheless, it presented a net cash generation from operations of R$1,434,484 and made investments in the modernization of its fleet and improving the railway network in the amount of R$1,264,952, in line with its business plan.

On September 30, 2016 the Company disclosed a material fact stating that it has signed a Share Purchase Agreement with Mansilla Participações Ltda. (Vehicle TIAA investment fund—Teachers Insurance and Annuity Association of America), a shareholder of Radar and Radar II, committing to sell part of its shares of Radar I and Radar II, see note 13.

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.

10

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 30, 2016 and 2015

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

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.

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

These consolidated financial statements were authorized for issue by the Board of Directors on November 09, 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 the previous period.

Although the new standards and amendments below 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 are described below:

ØAmendments 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, do not have any effect to the Company since it does not have any bearer plants.

ØDiscontinued operation

According to the note 13, due to the partial sale of RADAR segment’s shares and as required by IFRS 5—Non-current assets available for sale and discontinued operations—the Company is restating the presentation of its income statement for the nine-month period ended September 30, 2015.

11

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 30, 2016 and 2015

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

The impact of both restatements for the year ended December 31, 2015, as follows:

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 Company		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 shareholders’ equity and liabilities		52,307,668			(92,330	)		52,215,338

12

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 30, 2016 and 2015

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

Consolidated statements of profit or loss

	July 1, 2015 to September 30, 2015 (as issued)			IAS 41 effect			Discontinued operation				July 1, 2015 to September 30, 2015 (restated)			January 1, 2015 to September 30, 2015 (as issued)			IAS 41 effect			Discontinued operation			January 1, 2015 to September 30, 2015 (restated)
Gross profit		1,076,207			—			(21,173	)			1,055,034			2,791,596			—			(62,438	)		2,729,158
Operating expense		(479,874	)		—			8,007				(471,867	)		(1,394,958	)		—			1,419			(1,393,539	)
Income before equity in earnings of investees and financial results		596,333			—			(13,166	)			583,167			1,396,638			—			(61,019	)		1,335,619
Equity in earnings of associates		4,493			—			—				4,493			1,515			—			—			1,515
Equity in earnings of joint ventures		28,767			(3,850	)		—				24,917			276,811			(24,797	)		—			252,014
		33,260			(3,850	)		—				29,410			278,326			(24,797	)		—			253,529
Financial results		(532,344	)		—			(3,199	)	��		(535,543	)		(1,403,259	)		—			(6,870	)		(1,410,129	)
Profit before taxes		97,249			(3,850	)		(16,365	)			77,034			271,705			(24,797	)		(67,889	)		179,019
Income tax expense		(16,796	)		—			3,508				(13,288	)		(20,105	)		—			10,328			(9,777	)
Profit from continuing operations		80,453			(3,850	)		(12,857	)			63,746			251,600			(24,797	)		(57,561	)		169,242
Profit from discontinued operations, net of tax		—			—			12,857				12,857			—			—			57,561			57,561
Profit for the period		80,453			(3,850	)		—				76,603			251,600			(24,797	)		—			226,803
Net income attributable to:
Owners of the Company		48,410			(2,408	)		—				46,002			64,474			(15,499	)		—			48,975
Non-controlling interests		32,043			(1,442	)		—				30,601			187,126			(9,298	)		—			177,828

13

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 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:

	September 30, 2016			December 31, 2015
Directly owned subsidiaries
Cosan Logística S.A.		72.75	%		63.27	%
Cosan S.A. Indústria e Comércio		62.41	%		62.51	%
Interest of Cosan S.A. in its subsidiaries
Águas da Ponte Alta S.A.(ii)		65.00	%		65.00	%
Bioinvestments Negócios e Participações S.A.(ii)		65.00	%		65.00	%
Comma Oil Chemicals Limited		100.00	%		100.00	%
Companhia de Gás de São Paulo—COMGÁS(i)		62.65	%		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.(ii)		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.(ii)		65.00	%		65.00	%
Zip Lube S.A.		100.00	%		100.00	%

14

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 30, 2016 and 2015

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

Interest of Cosan
Logística S.A. in its subsidiaries
ALL – América Latina Logística Argentina S.A.	25.81	%	23.89	%
ALL – América Latina Logística Armazéns Gerais Ltda.	28.37	%	26.26	%
ALL – América Latina Logística Central S.A.	20.87	%	19.31	%
ALL – América Latina Logística Equipamentos Ltda.(iii)	—		26.26	%
ALL – América Latina Logística Intermodal S.A.	28.37	%	26.26	%
ALL – América Latina Logística Malha Norte S.A.	28.16	%	26.06	%
ALL – América Latina Logística Malha Oeste S.A.	28.37	%	26.26	%
ALL – América Latina Logística Malha Paulista S.A.	28.37	%	26.26	%
ALL – América Latina Logística Malha Sul S.A.	28.37	%	26.26	%
ALL – América Latina Logística Mesopotâmica S.A.	20.02	%	18.53	%
ALL – América Latina Logística Participações S.A.(iii)	—		26.26	%
ALL – América Latina Logística Rail Management Ltda.	14.19	%	13.13	%
ALL – América Latina Logística S.A.	28.37	%	26.26	%
ALL – América Latina Logística Serviços Ltda.	28.37	%	26.26	%
Boswells S.A.	28.37	%	26.26	%
Brado Holding S.A.	28.37	%	26.26	%
Brado Logística e Participações S.A.	17.65	%	16.34	%
Brado Logística S.A.	17.65	%	16.34	%
Logispot Armazéns Gerais S.A.	14.47	%	13.39	%
Paranaguá S.A.	28.32	%	26.22	%
PGT—Grains Terminal S.A.	28.37	%	26.26	%
Portofer Transporte Ferroviário Ltda.	28.37	%	26.26	%
Rumo Logística Operadora Multimodal S.A.	28.37	%	26.26	%

(i) From September 30, 2016, the Company increased its share in Comgás to 62.65% through the purchase 1,171,000 common shares owned by non-controlling shareholders.

(ii) On September 30, 2016 the Company announced the sale of control of the Radar segment to Mansilla Participações Ltda. (Vehicle TIAA investment fund—Teachers Insurance and Annuity Association of America), as stated in note 13.

(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.

15

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 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 Programmers. 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 anon-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 April 1, 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 concessions.

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

16

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 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 region 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.

17

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 30, 2016 and 2015

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

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
Inventories	7,206,290
Intangible assets	7,641,865
Loans, borrowings	(3,782,919	)
Debentures	(2,856,304	)
Leases	(1,857,947	)
Advances on real estate credits	(340,255	)
Trade payables	(915,213	)
Leases and concessions	(1,974,280	)
Provision for legal proceedings	(458,575	)
Other liabilities	(1,619,106	)
Deferred tax liabilities	(1,164,510	)
Non-controlling interests	(231,681	)
Total identifiable net assets acquired	2,737,372

During the measurement period new information about facts and circumstances that existed at the acquisition date were identified and the assets and liabilities were adjusted on completion of the acquisition.

18

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 30, 2016 and 2015

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

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 regard to the allocation of resources.

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

19

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 30, 2016 and 2015

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

	July 1, 2016 to September 30, 2016																													Additional information
	Raízen Energia			Raízen Combustíveis			COMGÁS			Radar		Lubricants			Logistics			Cosan Corporate			Desconsolidated effects IFRS 11			Segment eliminations / adjustments			Total consolidated			Cosan Energia			Cosan Logística
Statement of income or loss:
Net sales		3,148,411			17,380,867			1,379,129			—		463,582			1,437,783			48			(20,529,278	)		(7,739	)		3,272,803			1,842,760			1,437,783
Domestic market		1,274,667			17,380,867			1,379,129			—		355,192			1,346,120			48			(18,655,534	)		(7,739	)		3,072,750			1,734,370			1,346,120
External market		1,873,744			—			—			—		108,390			91,663			—			(1,873,744	)		—			200,053			108,390			91,663
Cost of sales		(2,480,327	)		(16,425,140	)		(763,700	)		—		(339,903	)		(939,011	)		(1,131	)		18,905,467			7,739			(2,036,006	)		(1,104,735	)		(939,010	)
Gross profit		668,084			955,727			615,429			—		123,679			498,772			(1,083	)		(1,623,811	)		—			1,236,797			738,025			498,773
Selling expenses		(199,486	)		(308,615	)		(170,632	)		—		(92,089	)		(2,829	)		(14	)		508,101			—			(265,564	)		(262,735	)		—
General and administrative expenses		(127,330	)		(103,440	)		(84,632	)		—		(17,742	)		(87,337	)		(41,485	)		230,770			—			(231,196	)		(141,081	)		(90,167	)
Other income (expense), net		(20,404	)		412,126			726			—		182			4,763			(22,573	)		(391,722	)		—			(16,902	)		(21,665	)		4,763
Financial results		70,315			(146,529	)		(55,670	)		—		(15,563	)		(423,959	)		(254,654	)		76,214			(18,541	)		(768,387	)		(303,503	)		(423,959	)
Financial expense		(223,405	)		(152,843	)		(190,177	)		—		(16,161	)		(501,198	)		(414,235	)		376,248			(18,541	)		(1,140,312	)		(590,371	)		(501,198	)
Financial income		172,270			63,215			134,545			—		1,157			76,981			50,725			(235,485	)		—			263,408			186,352			76,981
Foreign exchange losses, net		2,706			(45,351	)		(12,528	)		—		1,219			(2,914	)		(33,466	)		42,645			—			(47,689	)		(52,518	)		(2,914	)
Derivatives		118,744			(11,550	)		12,490			—		(1,778	)		3,172			142,322			(107,194	)		—			156,206			153,034			3,172
Equity in earnings of associates		(10,305	)		(2,830	)		—			—		(1,553	)		2,628			310,316			13,135			(302,998	)		8,393			6,276			2,628
Equity in earnings of joint ventures		—			—			—			—		—			—			404,245			—			—			404,245			404,246			—
Income tax expense benefit		(105,808	)		(258,783	)		(109,356	)		—		(92	)		(51,174	)		84,372			364,591			6,304			(69,946	)		(25,076	)		(51,174	)
Profit from continuing operations		275,066			547,656			195,866			—		(3,177	)		(59,136	)		479,124			(822,722	)		(315,237	)		297,440			394,488			(59,136	)
Profit from discontinued operation, net of tax		—			—			—			18,312		—			—			6,584			—			(6,584	)		18,312			18,311			—
Total net income attributable to:
Owners of the Company		274,978			534,943			122,307			6,582		(3,177	)		(17,764	)		485,708			(809,921	)		(435,463	)		158,193			327,512			(17,764	)
Non-controlling interests		88			12,713			73,559			11,730		—			(41,372	)		—			(12,801	)		113,642			157,559			85,287			(41,372	)
		275,066			547,656			195,866			18,312		(3,177	)		(59,136	)		485,708			(822,722	)		(321,821	)		315,752			412,799			(59,136	)
Other selected data:
Depreciation and amortization		477,902			145,552			134,064			—		23,748			226,384			3,423			(623,454	)		—			387,619			161,235			226,384
EBITDA		788,461			1,098,520			494,956			—		36,226			642,381			652,829			(1,886,981	)		(303,000	)		1,523,392			884,302			642,381
Additions to PP&E, intangible and biological assets		354,163			191,632			89,291			—		11,188			440,858			5,956			(545,795	)		—			547,293			106,435			440,858
Reconciliation of EBITDA:
Profit (loss) for the period		275,066			547,656			195,866			—		(3,177	)		(59,136	)		479,124			(822,722	)		(315,237	)		297,440			394,488			(59,136	)
Income tax and social contribution		105,808			258,783			109,356			—		92			51,174			(84,372	)		(364,591	)		(6,304	)		69,946			25,076			51,174
Financial result, net		(70,315	)		146,529			55,670			—		15,563			423,959			254,654			(76,214	)		18,541			768,387			303,503			423,959
Depreciation and amortization		477,902			145,552			134,064			—		23,748			226,384			3,423			(623,454	)		—			387,619			161,235			226,384
EBITDA		788,461			1,098,520			494,956			—		36,226			642,381			652,829			(1,886,981	)		(303,000	)		1,523,392			884,302			642,381

20

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 30, 2016 and 2015

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

	January 1, 2016 to September 30, 2016																													Additional information
	Raízen Energia			Raízen Combustíveis			COMGÁS			Radar		Lubricants			Logistics			Cosan Corporate			Desconsolidated effects IFRS 11			Segment eliminations / adjustments			Total consolidated			Cosan Energia			Cosan Logística
Statement of income or loss:
Net sales		9,657,588			50,252,193			4,333,163			—		1,431,697			3,999,921			425			(59,909,781	)		(32,947	)		9,732,259			5,765,283			3,999,922
Domestic market		3,955,267			50,252,193			4,333,163			—		1,096,072			3,804,610			425			(54,207,460	)		(32,947	)		9,201,323			5,429,658			3,804,611
External market		5,702,321			—			—			—		335,625			195,311			—			(5,702,321	)		—			530,936			335,625			195,311
Cost of sales		(7,364,106	)		(47,690,919	)		(2,321,714	)		—		(1,081,183	)		(2,717,621	)		(10,226	)		55,055,025			32,947			(6,097,797	)		(3,413,122	)		(2,717,621	)
Gross profit		2,293,482			2,561,274			2,011,449			—		350,514			1,282,300			(9,801	)		(4,854,756	)		—			3,634,462			2,352,161			1,282,301
Selling expenses		(568,201	)		(965,232	)		(485,102	)		—		(271,431	)		(3,553	)		(114	)		1,533,433			—			(760,200	)		(756,647	)		—
General and administrative expenses		(405,951	)		(324,245	)		(242,585	)		—		(53,482	)		(260,066	)		(173,125	)		730,196			—			(729,258	)		(417,730	)		(263,620	)
Other income (expense), net		16,544			610,196			(1,930	)		—		2,037			(3,033	)		(80,293	)		(626,740	)		—			(83,219	)		(80,187	)		(3,033	)
Financial results		486,213			(426,235	)		(197,677	)		—		(59,827	)		(1,257,677	)		(909,688	)		(59,978	)		94,939			(2,329,930	)		(1,010,636	)		(1,257,677	)
Financial expense		(697,432	)		(208,240	)		(564,425	)		—		(38,841	)		(1,448,311	)		(902,869	)		905,672			94,939			(2,859,507	)		(1,427,691	)		(1,448,311	)
Financial income		500,169			177,425			366,171			—		2,967			212,632			253,206			(677,594	)		—			834,976			621,960			212,632
Foreign exchange losses, net		(57,513	)		736,752			230,033			—		46,567			79,144			656,122			(679,239	)		—			1,011,866			1,018,309			79,144
Derivatives		740,989			(1,132,172	)		(229,456	)		—		(70,520	)		(101,142	)		(916,147	)		391,183			—			(1,317,265	)		(1,223,214	)		(101,142	)
Equity in earnings of associates		(59,080	)		(310	)		—			—		(4,575	)		8,751			926,980			59,390			(927,921	)		3,235			(5,513	)		8,751
Equity in earnings of joint ventures		—			—			—			—		—			—			1,098,183			—			—			1,098,183			1,098,183			—
Income tax expense benefit		(553,720	)		(443,006	)		(377,118	)		—		4,553			(43,871	)		296,737			996,726			(32,279	)		(151,978	)		(75,827	)		(43,871	)
Profit from continuing operations		1,209,285			1,012,442			707,037			—		(32,212	)		(277,149	)		1,148,881			(2,221,727	)		(865,262	)		681,295			1,103,803			(277,149	)
Profit from discontinued operation, net of tax		—			—			—			58,860		—			—			24,788			—			(24,788	)		58,860			58,860			—
Total net income attributable to:
Owners of the Company		1,209,197			977,481			436,250			24,788		(32,212	)		(76,814	)		1,173,669			(2,186,678	)		(1,209,816	)		315,865			857,804			(76,814	)
Non-controlling interests		88			34,961			270,787			34,072		—			(200,335	)		—			(35,049	)		319,766			424,290			304,859			(200,335	)
		1,209,285			1,012,442			707,037			58,860		(32,212	)		(277,149	)		1,173,669			(2,221,727	)		(890,050	)		740,155			1,162,663			(277,149	)
Other selected data:
Depreciation and amortization		1,662,345			457,824			374,871			—		66,334			651,817			10,914			(2,120,169	)		—			1,103,936			452,119			651,817
EBITDA		2,939,137			2,339,507			1,656,703			—		89,396			1,676,216			1,772,746			(5,278,644	)		(927,922	)		4,267,139			2,642,385			1,676,216
Additions to PP&E, intangible and biological assets		1,522,527			596,643			292,751			—		29,876			1,264,952			8,596			(2,119,170	)		—			1,596,175			331,223			1,264,952
Reconciliation of EBITDA:
Profit (loss) for the period		1,209,285			1,012,442			707,037			—		(32,212	)		(277,149	)		1,148,881			(2,221,727	)		(865,262	)		681,295			1,103,803			(277,149	)
Income tax and social contribution		553,720			443,006			377,118			—		(4,553	)		43,871			(296,737	)		(996,726	)		32,279			151,978			75,827			43,871
Financial result, net		(486,213	)		426,235			197,677			—		59,827			1,257,677			909,688			59,978			(94,939	)		2,329,930			1,010,636			1,257,677
Depreciation and amortization		1,662,345			457,824			374,871			—		66,334			651,817			10,914			(2,120,169	)		—			1,103,936			452,119			651,817
EBITDA		2,939,137			2,339,507			1,656,703			—		89,396			1,676,216			1,772,746			(5,278,644	)		(927,922	)		4,267,139			2,642,385			1,676,216

21

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 30, 2016 and 2015

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

	July 1, 2015 to September 30, 2015 (Restated)																													Additional information
	Raízen Energia			Raízen Combustíveis			COMGÁS			Radar		Lubricants			Logistics			Cosan Corporate			Desconsolidated effects IFRS 11			Segment eliminations / adjustments			Total consolidated			Cosan Energia			Cosan Logística
Statement of income or loss:
Net sales		2,637,476			15,638,868			1,743,099			—		484,226			1,357,726			26			(18,276,344	)		(11,635	)		3,573,442			2,227,352			1,357,726
Domestic market		1,098,525			15,638,868			1,743,099			—		388,613			1,300,020			26			(16,737,393	)		(11,635	)		3,420,123			2,131,739			1,300,020
External market		1,538,951			—			—			—		95,613			57,706			—			(1,538,951	)		—			153,319			95,613			57,706
Cost of sales		(2,207,305	)		(14,884,931	)		(1,241,425	)		—		(367,111	)		(921,415	)		(92	)		17,092,236			11,635			(2,518,408	)		(1,608,628	)		(921,415	)
Gross profit		430,171			753,937			501,674			—		117,115			436,311			(66	)		(1,184,108	)		—			1,055,034			618,724			436,311
Selling expenses		(188,350	)		(305,979	)		(156,465	)		—		(74,595	)		(2,556	)		1			494,329			—			(233,615	)		(231,060	)		(2,556	)
General and administrative expenses		(137,341	)		(91,255	)		(78,338	)		—		(18,482	)		(96,185	)		(44,013	)		228,596			—			(237,018	)		(135,763	)		(96,185	)
Other income (expense), net		(5,433	)		88,042			(671	)		—		385			11,202			(12,150	)		(82,609	)		—			(1,234	)		(12,436	)		11,202
Financial results		(462,881	)		(94,575	)		889			—		(13,555	)		(396,747	)		(126,130	)		557,456			—			(535,543	)		(207,324	)		(396,747	)
Financial expense		(262,380	)		(45,428	)		(58,366	)		—		(1,532	)		(386,929	)		(224,319	)		307,808			4,925			(666,221	)		(269,904	)		(386,929	)
Financial income		181,857			39,412			105,055			—		1,993			57,482			35,270			(221,269	)		(4,925	)		194,875			137,374			57,482
Foreign exchange losses, net		(622,213	)		(169,696	)		349,574			—		(17,435	)		(139,033	)		(464,291	)		791,909			—			(271,185	)		(180,793	)		(139,033	)
Derivatives		239,855			81,137			(395,374	)		—		3,419			71,733			527,210			(320,992	)		—			206,988			105,999			71,733
Equity in earnings of associates		(14,802	)		3,505			—			—		(2,416	)		4,074			95,815			11,297			(92,980	)		4,493			419			4,074
Equity in earnings of joint ventures		—			—			—			—		—			—			24,917			—			—			24,917			24,917			—
Income tax expense benefit		164,978			(84,041	)		(94,867	)		—		(4,484	)		1,260			84,803			(80,937	)		—			(13,288	)		(14,547	)		1,260
Profit from continuing operations		(213,658	)		269,634			172,222			—		3,968			(42,641	)		23,177			(55,976	)		(92,980	)		63,746			42,930			(42,641	)
Profit from discontinued operation, net of tax		—			—			—			12,857		—			—			5,629			—			(5,629	)		12,857			12,857			—
Total net income attributable to:
Owners of the Parent		(213,658	)		263,494			106,469			5,630		3,968			(10,601	)		28,806			(49,836	)		(88,270	)		46,002			(17,192	)		(10,601	)
Non-controlling interests		—			6,140			65,753			7,227		—			(32,040	)		—			(6,140	)		(10,339	)		30,601			72,979			(32,040	)
		(213,658	)		269,634			172,222			12,857		3,968			(42,641	)		28,806			(55,976	)		(98,609	)		76,603			55,787			(42,641	)
Other selected data:
Depreciation and amortization		509,827			144,802			120,865			—		20,140			195,333			1,147			(654,629	)		—			337,485			142,152			195,333
EBITDA		594,072			593,052			387,065			—		42,147			548,179			65,651			(1,187,124	)		(92,980	)		950,062			406,953			548,179
Additions to PP&E, intangible and biological assets		230,362			208,571			136,639			—		15,222			479,318			6,996			(438,933	)		—			638,175			159,520			479,318
Reconciliation of EBITDA:
Profit (loss) for the period		(213,658	)		269,634			172,222			—		3,968			(42,641	)		23,177			(55,976	)		(92,980	)		63,746			42,930			(42,641	)
Income tax and social contribution		(164,978	)		84,041			94,867			—		4,484			(1,260	)		(84,803	)		80,937			—			13,288			14,547			(1,260	)
Financial result, net		462,881			94,575			(889	)		—		13,555			396,747			126,130			(557,456	)		—			535,543			207,324			396,747
Depreciation and amortization		509,827			144,802			120,865			—		20,140			195,333			1,147			(654,629	)		—			337,485			142,152			195,333
EBITDA		594,072			593,052			387,065			—		42,147			548,179			65,651			(1,187,124	)		(92,980	)		950,062			406,953			548,179

22

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 30, 2016 and 2015

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

	January 1, 2015 to September 30, 2015																													Additional information
	Raízen Energia			Raízen Combustíveis			COMGÁS			Radar		Lubricants			Logistics			Cosan Corporate			Desconsolidated effects IFRS 11			Segment eliminations / adjustments			Total consolidated			Cosan Energia			Cosan Logística
Statement of income or loss:
Net sales		7,364,398			44,494,263			4,948,174			—		1,288,157			2,783,622			27			(51,858,661	)		(20,705	)		8,999,275			6,236,358			2,783,622
Domestic market		3,054,921			44,494,263			4,948,174			—		1,032,784			2,652,552			27			(47,549,184	)		(20,705	)		8,612,832			5,980,985			2,652,552
External market		4,309,477			—			—			—		255,373			131,070			—			(4,309,477	)		—			386,443			255,373			131,070
Cost of sales		(6,369,387	)		(42,279,521	)		(3,487,020	)		—		(969,947	)		(1,833,762	)		(93	)		48,648,908			20,705			(6,270,117	)		(4,457,060	)		(1,833,763	)
Gross profit		995,011			2,214,742			1,461,154			—		318,210			949,860			(66	)		(3,209,753	)		—			2,729,158			1,779,298			949,859
Selling expenses		(425,510	)		(903,002	)		(461,640	)		—		(209,779	)		(2,556	)		(1	)		1,328,512			—			(673,976	)		(671,420	)		(2,555	)
General and administrative expenses		(399,167	)		(288,757	)		(238,794	)		—		(52,014	)		(205,338	)		(139,995	)		687,924			—			(636,141	)		(405,044	)		(205,337	)
Other income (expense), net		9,324			231,602			(4,540	)		—		758			50,572			(130,212	)		(240,926	)		—			(83,422	)		(133,994	)		50,572
Financial results		(690,226	)		(115,901	)		(131,363	)		—		(22,551	)		(743,731	)		(512,484	)		806,127			—			(1,410,129	)		(756,472	)		(743,730	)
Financial expense		(662,354	)		(131,457	)		(255,045	)		—		(23,021	)		(755,806	)		(589,003	)		793,811			12,925			(1,609,950	)		(828,668	)		(755,806	)
Financial income		482,055			118,641			184,279			—		3,349			111,033			96,486			(600,696	)		(12,925	)		382,222			271,117			111,033
Foreign exchange losses, net		(1,082,392	)		(314,386	)		153,124			—		(11,860	)		(195,308	)		(710,873	)		1,396,778			—			(764,917	)		(641,767	)		(195,307	)
Derivatives		572,465			211,301			(213,721	)		—		8,981			96,350			690,906			(783,766	)		—			582,516			442,846			96,350
Equity in earnings of associates		(32,214	)		10,617			—			—		(9,507	)		4,254			246,514			21,597			(239,746	)		1,515			(2,740	)		4,255
Equity in earnings of joint ventures		—			—			—			—		—			—			252,014			—			—			252,014			252,015			—
Income tax expense benefit		268,026			(346,139	)		(226,842	)		—		(13,507	)		(50,146	)		280,718			78,113			—			(9,777	)		40,369			(50,146	)
Profit from continuing operations		(274,756	)		803,162			397,975			—		11,610			2,915			(3,512	)		(528,406	)		(239,746	)		169,242			102,012			2,918
Profit from discontinued operation, net of tax		—			—			—			57,561		—			—			20,109			—			(20,109	)		57,561			57,561			—
Total net income attributable to:
Owners of the Parent		(274,756	)		777,978			243,475			20,110		11,610			7,870			16,597			(503,222	)		(250,687	)		48,975			159,573			2,918
Non-controlling interests		—			25,184			154,500			37,451		—			(4,955	)		—			(25,184	)		(9,168	)		177,828			—			—
		(274,756	)		803,162			397,975			57,561		11,610			2,915			16,597			(528,406	)		(259,855	)		226,803			159,573			2,918
Other selected data:
Depreciation and amortization		1,473,871			431,832			360,296			—		56,988			398,870			3,180			(1,905,703	)		—			819,334			420,464			398,870
EBITDA		1,621,315			1,697,034			1,116,476			—		104,656			1,195,662			231,434			(3,318,349	)		(239,746	)		2,408,482			1,238,579			1,195,664
Additions to PP&E, intangible and biological assets		1,459,134			573,423			382,659			—		31,904			1,073,650			40,115			(2,032,557	)		—			1,528,328			456,282			1,073,650
Reconciliation of EBITDA:
Profit (loss) for the period		(274,756	)		803,162			397,975			—		11,610			2,915			(3,512	)		(528,406	)		(239,746	)		169,242			102,012			2,918
Income tax and social contribution		(268,026	)		346,139			226,842			—		13,507			50,146			(280,718	)		(78,113	)		—			9,777			(40,369	)		50,146
Financial result, net		690,226			115,901			131,363			—		22,551			743,731			512,484			(806,127	)		—			1,410,129			756,472			743,730
Depreciation and amortization		1,473,871			431,832			360,296			—		56,988			398,870			3,180			(1,905,703	)		—			819,334			420,464			398,870
EBITDA		1,621,315			1,697,034			1,116,476			—		104,656			1,195,662			231,434			(3,318,349	)		(239,746	)		2,408,482			1,238,579			1,195,664

23

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 30, 2016 and 2015

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

	September 30, 2016																														Additional information
Statement of financial position:	Raízen Energia			Raízen Combustíveis			COMGÁS			Radar			Lubricants			Logistics			Cosan Corporate			Deconsolidated effects IFRS 11			Segment elimination			Total consolidated			Cosan Energia			Cosan Logística
Cash and cash equivalents		3,224,972			1,103,332			1,691,599			—			103,762			41,804			1,310,799			(4,328,304	)		—			3,147,964			2,981,145			41,804
Marketable securities		—			—			—			—			—			1,385,289			—			—			—			1,385,289			—			1,385,289
Trade receivables		646,381			1,937,086			571,381			—			242,533			293,916			2			(2,583,467	)		—			1,107,832			815,276			293,916
Derivative financial instruments		884,431			140,763			486,117			—			—			4,347			734,612			(1,025,194	)		—			1,225,076			1,220,729			4,347
Inventories		2,614,158			1,540,822			138,783			—			256,807			293,443			1,318			(4,154,980	)		—			690,351			396,908			293,443
Other financial assets		686,519			—			—			—			—			—			72,554			(686,519	)		(72,554	)		—			72,554			—
Assets held for sale		—			—			—			3,067,056			—			—			1,298,428			—			(1,298,428	)		3,067,056			3,067,056			—
Other current assets		2,640,894			1,255,034			105,636			—			53,673			465,942			191,154			(3,895,928	)		(37,546	)		778,859			335,388			465,942
Other non-current assets		3,461,153			1,106,112			305,804			—			31,397			2,466,869			1,711,283			(4,567,265	)		(32,962	)		4,482,391			2,040,402			2,466,869
Investments in associates		386,064			—			—			—			24,552			47,062			11,157,787			(386,064	)		(11,024,408	)		204,993			8,659,533			47,062
Investments in joint ventures		—			—			—			—			—			—			8,501,602			—			—			8,501,602			—			—
Biological assets		779,066			—			—			—			—			—			—			(779,066	)		—			—			—			—
Investment property		—			—			—			—			—			—			—			—			—			—			—			—
Property, plant and equipment		10,595,505			2,367,913			—			—			240,696			10,301,655			152,792			(12,963,418	)		—			10,695,143			393,488			10,301,655
Intangible assets and goodwill		3,232,651			4,522,887			8,539,044			—			777,129			7,816,161			7,655			(7,755,538	)		—			17,139,989			9,323,827			7,816,161
Loans, borrowings and debentures		(11,680,546	)		(1,045,930	)		(3,566,102	)		—			(464,007	)		(8,052,512	)		(5,690,790	)		12,726,476			—			(17,773,411	)		(9,015,476	)		(8,052,513	)
Derivative financial instruments		(916,308	)		(632,194	)		—			—			(40,283	)		(18,541	)		(569,824	)		1,548,502			—			(628,648	)		(610,107	)		(18,541	)
Trade payables		(1,309,317	)		(772,445	)		(1,172,843	)		—			(208,839	)		(528,759	)		(5,213	)		2,081,762			—			(1,915,654	)		(1,386,895	)		(527,942	)
Real estate credit certificates		—			—			—			—			—			(220,576	)		—			—			—			(220,576	)		—			(220,576	)
Employee benefits payable		(345,998	)		(68,387	)		(56,352	)		—			(21,384	)		(140,337	)		(17,512	)		414,385			—			(235,585	)		(95,249	)		(140,337	)
Preferred shareholders payable in subsidiaries		—			—			—			—			—			—			(2,023,988	)		—			—			(2,023,988	)		(2,045,339	)		—
Liabilities held for sale		—			—			—			(155,219	)		—			(7,920	)		(80,173	)		—			—			(243,312	)		(235,392	)		—
Lease		—			—			—			—			—			(1,534,118	)		—			—						(1,534,118	)		—			(1,534,118	)
Other current liabilities		(1,481,859	)		(1,508,177	)		(210,569	)		—			(150,370	)		(678,362	)		(194,970	)		2,990,036			45,624			(1,188,647	)		(533,256	)		(686,283	)
Other non-current liabilities		(1,341,141	)		(4,766,264	)		(1,461,123	)		—			(147,316	)		(5,821,941	)		(1,365,973	)		6,107,405			109,802			(8,686,551	)		(2,949,527	)		(5,822,758	)
Total assets (net of liabilities) allocated by segment		12,076,625			5,180,552			5,371,375			2,911,837			698,350			6,113,422			15,191,543			(17,257,177	)		(12,310,472	)		17,976,055			12,435,065			6,113,420
Total assets		29,151,794			13,973,949			11,838,364			3,067,056			1,730,549			23,116,488			25,139,986			(43,125,743	)		(12,465,898	)		52,426,545			29,306,306			23,116,488
Equity attributable to owners of the Company		12,077,587			4,993,284			5,371,375			2,911,837			698,350			1,661,351			15,191,543			(17,070,871	)		(19,592,108	)		6,242,348			8,927,843			1,661,349
Non-controlling interests		(962	)		187,268			—			—			—			4,452,071			—			(186,306	)		7,281,636			11,733,707			3,507,222			4,452,071
Total shareholders’ equity		12,076,625			5,180,552			5,371,375			2,911,837			698,350			6,113,422			15,191,543			(17,257,177	)		(12,310,472	)		17,976,055			12,435,065			6,113,420

24

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 30, 2016 and 2015

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

	December 31, 2015 (Restated)																														Additional information
Statement of financial position:	Raízen Energia			Raízen Combustíveis			COMGÁS			Radar			Lubricants			Logistics			Cosan Corporate			Deconsolidated effects IFRS 11			Segment elimination			Total consolidated			Cosan Energia			Cosan Logística
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 Company		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

25

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 30, 2016 and 2015

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

Net sales by segment:

	July 1, 2016 to September 30, 2016			January 1, 2016 to September 30, 2016			July 1, 2015 to September 30, 2015			January 1, 2015 to September 30, 2015
Raízen Energia
Ethanol		1,400,772			4,600,024			1,128,511			3,695,498
Sugar		1,443,030			4,404,639			1,200,640			3,073,937
Cogeneration		206,557			401,876			203,002			387,740
Other		98,052			251,049			105,323			207,223
		3,148,411			9,657,588			2,637,476			7,364,398
Raízen Combustíveis
Fuels		17,380,867			50,252,193			15,638,868			44,494,263
		17,380,867			50,252,193			15,638,868			44,494,263
COMGÁS
Industrial		865,824			2,868,654			1,098,456			3,175,412
Residential		237,425			590,679			202,404			504,608
Thermal generation		6,713			68,307			129,043			379,188
Cogeneration		51,505			163,414			64,982			203,082
Automotive		53,130			151,107			50,262			145,313
Commercial		78,325			224,626			77,706			211,108
Construction revenue		77,582			231,869			109,959			303,683
Other		8,625			34,507			10,287			25,780
		1,379,129			4,333,163			1,743,099			4,948,174
Lubricants
Lubricants		404,882			1,256,067			403,214			1,105,607
Basic oil		54,725			163,558			76,870			171,028
Other		3,975			12,072			4,142			11,522
		463,582			1,431,697			484,226			1,288,157
Cosan Corporate
Other		48			425			26			27
		48			425			26			27
IFRS 11—Desconsolidated of adjustments/eliminations joint ventures and eliminations		(20,537,017	)		(59,942,728	)		(18,287,979	)		(51,879,366	)
Cosan Energia		1,835,020			5,732,338			2,215,716			6,215,653
Logistics
North operations(i)		1,051,377			2,945,356			972,369			1,995,330
South operations(i)		322,391			849,719			317,885			638,036
Container operations(i)		64,015			204,846			67,472			150,256
		1,437,783			3,999,921			1,357,726			2,783,622
Total		3,272,803			9,732,259			3,573,442			8,999,275

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

26

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 30, 2016 and 2015

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

6 Cash and cash equivalents

	September 30, 2016		December 31, 2015
Cash and bank deposits		29,388		305,510
Savings account		595,378		28,278
Financial investments		2,523,198		3,172,036
		3,147,964		3,505,824

(i) The balances of savings account that, at December 31, 2015, were presented as financial investments, were reallocated for a better presentation of these financial information.

Financial investments are composed as follows:

	September 30, 2016		December 31, 2015
Investment fund
Repurchase agreements		1,783,221		1,252,229
Bank certificate of deposits—CDB		219,896		792,279
Other		—		171,641
		2,003,117		2,216,149
Bank investments
Repurchase agreements		61,109		407,971
Bank certificate of deposits—CDB		245,968		542,658
Other		213,004		5,258
		520,081		955,887
		2,523,198		3,172,036

For purposes of the statement of cash flows, cash and cash equivalents comprises the following balances:

	September 30, 2016		December 31, 2015
Cash and bank accounts		29,388		305,510
Savings account		595,378		28,278
Cash and cash equivalents related to discontinued operation		9,933		—
Financial Investments		2,523,198		3,172,036
		3,157,897		3,505,824

27

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 30, 2016 and 2015

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

7 Marketable securities

	September 30, 2016		December 31, 2015
Government security(i)		165		334,167
Bank certificate of deposits—CDB(ii)		1,385,124		271,323
		1,385,289		605,490

(i) Refers to purchases of assets with repurchase agreements at a rate previously established by the parties, usually with fixed period of 90 days or less or for which there are no penalties or other restrictions for early redemption.

(ii) Refers mainly to Bank Deposit Certificates—CDBs, issued by Brazilian financial institutions with original maturities of 90 days or less or for which there are no penalties or other restrictions for early redemption.

8 Trade receivables

	September 30, 2016			December 31, 2015
Domestic – Brazilian Reais		1,154,484			999,007
Export – Foreign currency		29,451			29,402
Allowance for doubtful accounts		(76,103	)		(63,431	)
		1,107,832			964,978
Current		1,047,026			904,245
Non-current		60,806			60,733

9 Other current tax receivables

	September 30, 2016		December 31, 2015
ICMS—State VAT		595,816		597,023
Credit installment—PAES		—		33,245
COFINS—Revenue tax		230,374		228,393
PIS—Revenue tax		61,458		69,098
Other		16,340		17,682
		903,988		945,441
Current		212,293		311,892
Non-Current		691,695		633,549

28

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 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:

	September 30, 2016		December 31, 2015
Current Asset
Commercial operation
Raízen Energia S.A.		43,830		47,591
Aguassanta Participações S.A.		6,340		6,371
Raízen Combustíveis S.A.		4,500		3,052
Other		—		4,085
		54,670		61,099
Corporate operation / Agreements
Raízen Energia S.A.		9,672		13,028
Financial operations
Raízen Combustíveis S.A.		—		1,102
		64,342		75,229
Non-current assets
Receivables under the framework agreement
Janus Brasil Participações S.A		24,467		20,875
Raízen Energia S.A.		114,097		89,763
		138,564		110,638
Financial operations
Novvi Limited Liability Company		—		17,121
Other		—		8
		—		17,129
Corporate operation
Raízen Energia S.A.		—		23,029
Rezende Barbosa		38,994		70,365
Other		1,434		184
		178,992		221,345

	September 30, 2016		December 31, 2015
Current liabilities
Corporate operations
Raízen Energia S.A.		135,939		46,582
Raízen Combustíveis S.A.		95,057		71,035
		230,996		117,617
Corporate operations / Agreements
Raízen Energia S.A.		—		78,653
Raízen Combustíveis S.A.		—		7,810
		—		86,463
		230,996		204,080

29

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 30, 2016 and 2015

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

b) Related party transactions:

	July 1, 2016 to September 30, 2016			January 1, 2016 to September 30, 2016			July 1, 2015 to September 30, 2015 (Restated)			January 1, 2015 to September 30, 2015 (Restated)
Sales of goods and services
Raízen Combustíveis S.A.		38,007			100,219			31,931			66,788
Raízen Energia S.A.		113,211			328,531			105,634			243,972
		151,218			428,750			137,565			310,760
Purchase of goods / Inputs
Raízen Energia S.A.		(37	)		(103	)		(1,563	)		(1,633	)
Raízen Combustíveis S.A.		(235,843	)		(662,894	)		(200,689	)		(202,453	)
Other		(42	)		(312	)		—			—
		(235,922	)		(663,309	)		(202,252	)		(204,086	)
Discontinued operation
Raízen Energia S.A.		19,179			50,664			14,352			43,641
		19,179			50,664			14,352			43,641
Shared income (expense)
Aguassanta Participações S.A.		105			276			114			331
Raízen Energia S.A.		(20,299	)		(54,144	)		(6,641	)		(14,878	)
		(20,194	)		(53,868	)		(6,527	)		(14,547	)
Financial result
Raízen Energia S.A.		501			1,495			680			1,910
Other		(51	)		(124	)		(161	)		(356	)
		450			1,371			519			1,554

c) Officers’ and directors’ compensation

	July 1, 2016 to September 30, 2016		January 1, 2016 to September 30, 2016		July 1, 2015 to September 30, 2015 (Restated)		January 1, 2015 to September 30, 2015 (Restated)
Regular compensation		14,570		72,858		7,435		28,305
Stock option expense		2,947		8,843		2,930		8,789
Bonuses and other variable compensation		4,693		38,205		83		33,143
		22,210		119,906		10,448		70,237

30

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 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%			33.33%			51.00%			—
Equity in earnings (losses) of associates at September 30, 2015		8,235			(9,497	)		588			2,189			1,515
At December 31, 2015		99,638			6,783			23,713			54,242			184,376
Equity in earnings (losses) of associates		(160	)		(4,575	)		4,808			3,162			3,235
Capital increase		—			20,972			3,592			—			24,564
Dividends		(1,508	)		—			(689	)		(5,928	)		(8,125	)
Other		(492	)		—			(90	)		1,525			943
At September 30, 2016		97,478			23,180			31,334			53,001			204,993

31

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 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			100,327,292			47,549,252			959,137,088			1,000,000			17,147,822			290,710,861		—
Non-controlling interest		37.70%			27.48%			37.35%			71.63%			49.00%			81.08%			35.00%		—
Equity in earnings (losses) of associates at September 30, 2015 (Restated)		(12,142	)		154,500			2,973			(4,331	)		(624	)		(9,204	)		46,656		—			177,828
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 (Note 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		345,277			(25,510	)		270,787			(199,458	)		(877	)		30,769			9,455		(6,153	)		424,290
Other comprehensive income (losses)		(38,744	)		399			—			4,470			—			503			38		(111	)		(33,445	)
Dividends		(216,701	)		—			(464,007	)		—			—			—			—		—			(680,708	)
Capital increase		—			139,556			—			1,744,856			—			—			—		—			1,884,412
Other		(70,812	)		(70,575	)		(22,547	)		—			—			—			—		—			(163,934	)
At September 30, 2016		3,684,502			89,913			1,893,800			4,416,112			35,958			1,760,021			358,515		(505,114	)		11,733,707

32

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 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%			50%
Equity in earnings of joint ventures at September 30, 2015 (Restated)		388,395			(136,381	)		252,014
At December 31, 2015		3,204,834			5,124,686			8,329,520
Effect of changes to IAS 41 (Note 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		488,223			609,960			1,098,183
Other comprehensive losses		20,646			(181,075	)		(160,429	)
Interest on capital		(63,500	)		—			(63,500	)
Dividends		(412,060	)		(197,782	)		(609,842	)
At September 30, 2016		3,238,143			5,263,459			8,501,602

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 Raízen access to a credit line(stand-by facility) in the amount of US$500 million, which was unused at September 30, 2016.

13 Disposal group held for sale

On September 30, 2016, Company signed a Share Purchase Agreement with Mansilla Participações Ltda. (vehicle from TIAA—Teachers Insurance and Annuity Association of America investment fund), also a shareholder of Radar and Radar II, committing to sell part of its stake in Radar for a net amount of R$1.064.506. Cosan will maintain a stake in Radar’s common shares due to its expertise in the sector.

As described in the Purchase and Sale Agreement, the sale of Radar’s share only will be realized after the approval of CADE (Administrative Council for Economic Defense), which occurred on October 18, 2016.

33

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 30, 2016 and 2015

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

(a) Impairment losses relating to the disposal group

The asset available for sale’s measurement should be done at the lower value between carrying amount and fair value, however, the book balances at Consolidated level of Radar I e Radar II are substantially comprised of investment properties, assets held for sale, other financial assets, securities and cash and cash equivalents, whose measurement rules are set forth in IFRS 5, so no adjustment should be made.

(b) Assets and liabilities of disposal group held for sale

On September 30, 2016, the group of assets and liabilities held for sale comprised the following assets and liabilities:

	September 30, 2016
Assets
Cash and cash equivalents		9,933
Investment securities		146,749
Other current assets		20,906
Assets held for sale		122,086
Other financial assets		150,150
Other current assets		19,293
Investment properties		2,594,462
Property and equipment		1,655
Intangible assets		1,822
Assets held for sales		3,067,056
Liabilities
Trade payables		507
Salaries payable		6,096
Income tax payables		15,407
Dividends and interest on capital payable		14,810
Payables to related parties		6,335
Other current liabilities		3,589
Deferred tax liabilities		188,648
Liabilities held for sales		235,392
Net assets held for sales		3,302,448
Other comprehensive income
Change in fair value of available for sale securities		5,804

34

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 30, 2016 and 2015

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

(c) Net income from discontinued operations

	July 1, 2016 to September 30, 2016			January 1, 2016 to September 30, 2016			July 1, 2015 to September 30, 2015			January 1, 2015 to September 30, 2015
Net sales		25,315			72,243			31,886			80,420
Cost of sales		—			—			(10,713	)		(17,982	)
Gross profit		25,315			72,243			21,173			62,438
General and administrative expenses		(8,559	)		(23,249	)		(8,030	)		(22,225	)
Other expense, net		1,159			9,825			23			20,806
Operating expenses		(7,400	)		(13,424	)		(8,007	)		(1,419	)
Income before equity in earning and financial results		17,915			58,819			13,166			61,019
Financial results		5,074			13,201			3,199			6,870
Profit before taxes		22,989			72,020			16,365			67,889
Income tax expenses		(4,677	)		(13,160	)		(3,508	)		(10,328	)
Profit for the period		18,312			58,860			12,857			57,561
Owners of the Company		4,112			15,491			3,519			12,570
Non-controlling interests		14,200			43,369			9,338			44,991
		18,312			58,860			12,857			57,561

(d) Cash flows generated (used in) discontinued operations

	January 1, 2016 to September 30, 2016			January 1, 2015 to September 30, 2015
Net cash generated by operating activities		14,309			13,279
Net cash used in investing activities		(5,393	)		(18,111	)
Net cash generated by (used in) discontinued operations		8,916			(4,832	)

The income statement for the period and comparative cash flow is being restated to present discontinued operations separately from continuing operations.

35

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 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		—			6,814			18,309			42,386			1,422,379			1,342			1,491,230
Disposals		—			(1,339	)		(823	)		(7,409	)		(202	)		(24,156	)		(33,929	)
Transfers		107,549			67,403			738,620			171,576			(1,043,798	)		(43,067	)		(1,717	)
Discontinued operation		(598	)		(143	)		—			—			(603	)		(1,005	)		(2,349	)
At September 30, 2016		966,908			735,958			4,991,143			3,775,150			1,201,810			400,204			12,071,173
Amortization
At December 31, 2015		(118,056	)		(218,925	)		(248,686	)		(209,308	)		—			(17,076	)		(812,051	)
Additions		(34,469	)		(55,139	)		(201,271	)		(225,653	)		—			(56,562	)		(573,094	)
Disposals		—			224			440			3,048			—			15,398			19,110
Transfers		5,061			852			3,052			(7,342	)		—			(12,312	)		(10,689	)
Discontinued operation		136			96			—			—			—			462			694
At September 30, 2016		(147,328	)		(272,892	)		(446,465	)		(439,255	)		—			(70,090	)		(1,376,030	)
At December 31, 2015		741,901			444,298			3,986,351			3,359,289			824,034			450,014			9,805,887
At September 30, 2016		819,580			463,066			4,544,678			3,335,895			1,201,810			330,114			10,695,143

Capitalization of borrowing costs

Capitalized borrowing costs for the period ended September 30, 2016 amounted to R$2.227 (R$7.031 for the period ended September 30, 2015).

36

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 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		—			247,257			26,552			—			55,903			6,791			336,503
Disposals		—			(16,777	)		—			—			(10,391	)		(272	)		(27,440	)
Transfers		—			(2,147	)		(26,552	)		—			106			17,503			(11,090	)
Business combination		—			57,217			—			—			—			—			57,217
Discontinued operation		—			—			—			—			—			(2,396	)		(2,396	)
At September 30, 2016		713,291			16,949,597			432,529			252,474			986,088			425,639			19,759,618
Amortization
At December 31, 2015		—			(1,011,806	)		(193,818	)		(159,789	)		(575,411	)		(156,311	)		(2,097,135	)
Additions		(4,270	)		(349,471	)		(8,806	)		(17,120	)		(113,129	)		(45,571	)		(538,367	)
Disposals		—			9,821			—			—			5,466			18			15,305
Transfers		—			124			—			—			—			(130	)		(6	)
Discontinued operation		—			—			—			—			—			574			574
At September 30, 2016		(4,270	)		(1,351,332	)		(202,624	)		(176,909	)		(683,074	)		(201,420	)		(2,619,629	)
At December 31, 2015		713,291			15,652,241			238,711			92,685			365,059			247,702			17,309,689
At September 30, 2016		709,021			15,598,265			229,905			75,565			303,014			224,219			17,139,989

Capitalization of borrowing costs

Capitalized borrowing costs for the period ended September 30, 2016, amounted to R$13,026 (R$13,766 for the period ended September 30, 2015). The weighted average interest rate used to capitalize borrowing costs on the balance of construction in progress, was 12.55% p.a. for the period ended September 30, 2016 (11.26% p.a. for the period ended September 30,2015).

37

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 30, 2016 and 2015

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

Intangible assets (excluding goodwill)	Annual rate of amortization—%		September 30, 2016		December 31, 2015
Gas distribution concession—COMGÁS(i)		Concession term		8,216,389		8,237,379
Concession rights—Rumo(ii)		Concession term		7,381,877		7,414,862
				15,598,266		15,652,241
Operating license for port terminal(iii)		4.00		229,905		238,711
				—		—
Trademarks
Mobil		10.00		51,361		68,481
Comma		—		24,204		24,204
				75,565		92,685
Relationship with customers:				—
Comgás		3.00		260,131		313,694
Lubricants		6.00		42,883		51,365
				303,014		365,059
Other				—
Software licenses		20.00		128,324		126,469
Other				95,895		121,233
				224,219		247,702
Total				16,430,969		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 September 30, 2016, no impairment indicators were identified that would trigger the need for an impairment test.

38

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 30, 2016 and 2015

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

16 Loans, borrowings and debentures

	Interest
Description	Index(i)	Annual interest (ii)			September 30, 2016		December 31, 2015		Maturity
Loan and borrowings
BNDES	URTJLP		9.33	%		2,535,451		2,851,793	Jun/2029
	Fixed		5.02	%		1,160,599		1,016,225	Feb/2025
	TJ462		10.43	%		688,609		809,660	Oct/2020
	Selic		16.22	%		320,663		298,258	Oct/2020
	TJLP		10.15	%		168,096		176,900	Oct/2018
	Selic		14.15	%		5,586		5,595	Sep/2020
	Fixed		3.94	%		4,112		4,684	Jan/2024
	IPCA		15.52	%		4,659		4,152	Nov/2021
	URTJLP		10.13	%		24,511		217	Sep/2022
EIB	US$ + Libor		2.35	%		669,973		869,014	Sep/2021
Foreign loans	GBP + Libor		3.93	%		230,954		312,940	Dec/2019
FRN	US$		2.63	%		—		216,134	Jan/2017
NCE	112% of CDI		15.95	%		156,038		406,805	Dec/2018
	109% of CDI		15.50	%		—		304,644	Oct/2018
	129,62% CDI		18.69	%		573,403		—	Jun/2023
	US$		3.79	%		—		126,669	Jul/2016
Perpetual Notes	US$		8.25	%		1,643,558		1,976,673	—
Resolution 4131	US$		3.08	%		108,978		477,705	Oct/2020
	US$ + Libor		2.00	%		414,506		471,045	Mar/2018
	US$ + Libor		2.00	%		361,536		406,348	Nov/2016
Senior Notes Due 2018	Fixed		9.50	%		164,297		875,376	Mar/2018
Senior Notes Due 2023	US$		5.00	%		328,923		2,009,296	Mar/2023
Senior Notes Due 2027	US$		7.00	%		2,378,320		—	Jan/2027
FINEP	Fixed		5.00	%		116,192		137,133	Nov/2020
Trade banks	CDI + 3,50% p.a.		18.12	%		—		205,781	Sep/2016
	CDI + 4,91% p.a.		19.73	%		180,212		195,632	Jun/2019
	Fixed		20.98	%		766		3,898	Jun/2016
Working capital	CDI + 2,80% p.a.		17.33	%		406,022		388,203	Dec/2018
	CDI + 2,95% p.a.		17.50	%		299,400		—	Dec/2018
	US$ + Libor		4.45	%		—		100,121	Sep/2021
	CDI + 0,28% p.m.		18.02	%		6,683		25,004	Dec/2016
	121,10% do CDI		17.36	%		2,008		10,144	Nov/2016
	125,5% do CDI		18.04	%		10,184		17,764	Oct/2016
Prepayment	US$+Libor Tri		3.80	%		56,338		—	Apr/2017
FINIMP	US$+Libor Tri		3.17	%		41,283		—	Jun/2017
						13,061,860		14,703,813

39

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 30, 2016 and 2015

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

	Interest
Description	Index(i)	Annual interest (ii)			September 30, 2016		December 31, 2015		Maturity
Debentures
Convertible debentures	URTJLP		9.01	%		—		2,592	Jun/2016
Non-convertible debentures	CDI + 2,05% p.a.		16.47	%		154,420		1,431,607	Mar/2018
	CDI + 1,30% p.a.		15.61	%		311,999		775,228	Oct/2017
	CDI + 3,50% p.a.		18.12	%		2,433,269		—	Jun/2023
	IPCA		15.08	%		658,038		594,157	Dec/2025
	108 % of CDI		15.34	%		338,455		526,285	Jul/2018
	IPCA		12.88	%		519,361		484,246	Sep/2020
	Fixed		13.13	%		169,154		161,175	Oct/2020
	CDI		15.16	%		126,855		119,785	Sep/2019
	% of net revenue		—			—		30,315	—
						4,711,551		4,125,390
Total						17,773,411		18,829,203
Current						2,424,364		2,775,510
Non-current						15,349,047		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 September 30, 2016.

On June 20, 2016, the Company issued Senior Notes in the international market in accordance with the “Regulation S” and rule “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 notes, the Company must maintain the ratio “net debt divided by EBITDA”, besides other financial covenants.

On July 18, 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”).

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 issuance new working capital instruments. As a result of the operation non-convertible debentures were issued maturing in 2023 and contractual amendment of certain debts which extended the maturity to start from 2019 were implemented.

On July 1, 2016, the indirect subsidiary “Cosan Lubricants” contracted a loan “FINIMP” with Citibank in the amount of US$12,345 at an interest rate of Libor 3M + 2.52% pa, maturing on 30 June 2017. The funds were used to pay for raw materials imported.

40

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 30, 2016 and 2015

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

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

	September 30, 2016		December 31, 2015
Brazilian Real		11,539,042		11,863,258
US Dollar		6,003,415		6,653,005
Pound Sterling		230,954		312,940
		17,773,411		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, on which is applicable only to BNDES.

Ø“Cosan S.A” and its subsidiaries

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 September 30, 2016, quarterly financial covenants were met within the new established standards.

Ø“Cosan Logística” and its subsidiaries

The ratio agreed is up to 4.5x comprehensive net debt / EBITDA, the limit that was being complied with by the Company in the quarter ended September 30, 2016.

On September 30, 2016, the Company had R$ 68,376 loan from BNDES, subject to the provisions of “covenants” more restrictive than the indicator mentioned in the previous paragraph with measurement date of December 31, 2016. This requirement is being replaced by bank guarantees.

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

41

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 30, 2016 and 2015

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

17 Leases

Finance lease liabilities

Finance lease liabilities are payable as follows:

	September 30, 2016												December 31, 2015
	Less than one year			Between one and five years			More than five years			Total			Total
Future minimum lease payments		700,173			960,867			365,519			2,026,559			2,196,200
Rolling stock		669,698			870,194			260,298			1,800,190			1,953,414
Terminal		23,664			85,123			105,221			214,008			232,148
Other		6,811			5,550			—			12,361			10,638
Interests		(156,735	)		(252,684	)		(83,022	)		(492,441	)		(454,499	)
Rolling stock		(140,087	)		(208,506	)		(58,241	)		(406,834	)		(357,416	)
Terminal		(15,435	)		(43,361	)		(24,781	)		(83,577	)		(96,069	)
Other		(1,213	)		(817	)		—			(2,030	)		(1,014	)
Present value of minimum lease payments		543,438			708,183			282,497			1,534,118			1,741,701
Current											543,438			539,615
Non-current											990,680			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 doMercado-IGPM) plus TJLP(Long-Term Interest Rate) or CDI.

Operating leases

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

	September 30, 2016		December 31, 2015
Future minimum lease payments
Less than one year		12,018		22,788
Between one and five years		32,215		24,364
More than five years		11,796		13,528
		56,029		60,680

The rentals are recognized as expenses (Note 25) on a straight-line basis over the life of the respective agreement.

42

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 30, 2016 and 2015

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

18 Concessions payable

	Concessions payable				Judicial deposits
	September 30, 2016		December 31, 2015		September 30, 2016		December 31, 2015
Payables
Malha Sul		75,337		65,906		—		—
Malha Paulista		24,935		24,944		—		—
		100,272		90,850		—		—
Court Discussion
Malha Paulista		1,319,228		1,175,697		117,533		116,510
Malha Oeste		1,091,664		957,697		19,096		18,060
		2,410,892		2,133,394		136,629		134,570
Total		2,511,164		2,224,244		136,629		134,570
Current		27,575		20,205
Non-current		2,483,589		2,204,039

19 Trade payables

	September 30, 2016			December 31, 2015
Natural gas suppliers		1,376,294			1,489,552
Materials and service suppliers		767,397			627,067
Fuels suppliers		536			3,535
Judicial deposits(i)		(294,976	)		(294,976	)
Other		66,403			139,834
		1,915,654			1,965,012
Current		1,914,837			1,963,981
Non-current		817			1,031

(i) On September 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$1,018,129, being the amount secured by judicial deposit R$294,976 and the amount guaranteed by bail R$723,153.

43

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 30, 2016 and 2015

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

20 Other taxes payable

	September 30, 2016		December 31, 2015
Tax amnesty and refinancing program—Refis		49,680		56,041
COFINS—Revenue tax		29,787		23,080
PIS—Revenue tax		6,240		4,670
INSS—Social security		8,647		7,483
Other		26,098		39,901
ICMS – State VAT		94,777		73,692
		215,229		204,867
Current		177,506		153,540
Non-Current		37,723		51,327

21 Income tax and social contribution

a) Reconciliation of income and social contribution tax expenses:

	July 1, 2016 to September 30, 2016			January 1, 2016 to September 30, 2016			July 1, 2015 to September 30, 2015 (Restated)			January 1, 2015 to September 30, 2015 (Restated)
Profit before taxes		367,386			833,273			77,034			179,019
Income tax and social contribution at nominal rate (34%)		(124,911	)		(283,312	)		(26,191	)		(60,867	)
Adjustments to reconcile nominal to effective tax rate
Equity in earnings of investees (non-taxable income)		140,296			374,481			9,999			86,200
Credit claims for damages		1,346			3,652			—			—
Differences in tax rates on earnings / losses of overseas companies		(12,303	)		(115,272	)		36,298			39,137
Differences in tax rates on entities under Brazilian presumed profits tax regime		(253	)		(378	)		(153	)		392
Tax profit of the activity (operating income)		10,221			27,473			11,850			20,946
Stock options expenses		(1,002	)		(3,007	)		(996	)		(2,988	)
Interest on capital (net received)		(8,330	)		(21,590	)		(12,818	)		(18,938	)
Non-deductible expenses (donations, gifts, etc.)		(7,274	)		(12,926	)		(4,909	)		(18,628	)
Tax losses not recorded		(64,167	)		(134,317	)		(24,895	)		(52,317	)
Costs of issuing equity instruments		1,022			22,329			—			—
Other		(4,591	)		(9,111	)		(1,473	)		(2,714	)
Income tax and social contribution benefit (expense)—current and deferred		(69,946	)		(151,978	)		(13,288	)		(9,777	)
Effective rate—%		19,03			18,23			17,24			5,46

44

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 30, 2016 and 2015

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

b) Deferred income tax assets and liabilities:

	September 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		7,906,291			1,976,573			—			1,976,573			1,597,697
Social contribution tax loss carry forwards		8,046,363			—			724,173			724,173			580,269
Temporary differences
Foreign currency losses		1,659,281			414,820			149,335			564,155			937,281
Provision for judicial demands		1,133,546			283,387			102,019			385,406			354,730
Impairment		918,856			229,714			82,697			312,411			350,325
Business combination—Property, plant and equipment		445,004			111,251			40,050			151,301			246,757
Tax deductible goodwill		(75,628	)		(18,907	)		(6,806	)		(25,713	)		129,207
Gains or losses on actuarial liabilities		318,917			79,729			28,703			108,432			103,820
Allowance for doubtful accounts		445,782			111,446			40,120			151,566			95,015
Regulatory asset		213,146			53,286			19,183			72,469			76,764
Profit sharing		61,279			15,320			5,515			20,835			32,327
Concession contract		(32,648	)		(8,162	)		(2,938	)		(11,100	)		(12,552	)
Assets held for sale		—			—			—			—			(1,255	)
Business combination—Other fair value adjustments		(126,628	)		(31,657	)		(11,397	)		(43,054	)		(66,404	)
Property, plant and equipment		(524,199	)		(131,050	)		(47,178	)		(178,228	)		(147,749	)
Unrealized gains on derivatives instruments		(391,761	)		(97,940	)		(35,258	)		(133,198	)		(469,899	)
Unrealized gains on investment properties		—			—			—			—			(62,069	)
Gain on formation of joint ventures		(3,338,342	)		(834,586	)		(300,451	)		(1,135,037	)		(1,135,037	)
(-) Valuation allowance		(5,186,506	)		(1,296,627	)		(466,786	)		(1,763,413	)		(1,526,639	)
Business combination—Intangible assets		(11,094,306	)		(2,773,576	)		(998,488	)		(3,772,064	)		(3,839,323	)
Other		1,058,059			264,515			95,227			359,742			275,782
Total net liability					(1,652,464	)		(582,280	)		(2,234,744	)		(2,480,953	)
Deferred income tax—Assets											1,430,900			1,698,611
Deferred income tax—Liabilities											(3,665,644	)		(4,179,564	)
Total net deferred taxes											(2,234,744	)		(2,480,953	)

c) Changes in deferred income taxes, net:

At December 31, 2015—Net deferred tax liability	(2,480,953	)
Recorded through income	64,562
Recorded through other comprehensive income	(342	)
Discontinued operation	184,844
Business combinations	(32,028	)
Other(i)	29,173
At September 30, 2016—Net deferred tax liability	(2,234,744	)

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

45

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 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
	September 30, 2016		December 31, 2015		September 30, 2016		December 31, 2015
Tax		471,698		441,674		370,262		377,435
Civil, regulatory and environmental		342,401		284,344		185,730		181,180
Labor		454,610		467,913		139,601		121,609
		1,268,709		1,193,931		695,593		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		9,742			34,272			85,661			129,675
Write-off / Reversals		(7,806	)		(26,718	)		(131,168	)		(165,692	)
Indexation and interest charges		28,088			50,503			32,204			110,795
At September 30, 2016		471,698			342,401			454,610			1,268,709

Tax claims

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

	September 30, 2016		December 31, 2015
Compensation with FINSOCIAL		265,830		255,022
State VAT—ICMS credits		83,519		79,417
INSS—Social security		61,853		57,916
PIS and COFINS		2,413		2,781
IPI—Excise tax credit—NT		1,136		1,105
Federal income taxes		329		329
Other		56,618		45,104
		471,698		441,674

46

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 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

	September 30, 2016		December 31, 2015
ICMS—State VAT		2,037,991		1,904,253
Federal income taxes(i)		1,742,791		886,178
Foreign financial operation		968,237		911,942
PIS and COFINS—Revenue taxes		806,874		879,669
IRRF—Withholding tax		777,661		792,104
INSS—Social security and other		614,839		577,686
IPI—Excise tax credit—NT		507,831		484,606
Goodwill ALL		474,735		446,535
Penalties related to tax positions		387,373		258,391
Compensation with IPI—IN 67/98		127,250		123,522
MP 470—Tax installments		118,605		113,814
Intermodal		79,838		76,914
Stock option		61,089		57,554
Financial transactions tax on loan		53,675		49,844
Social security contributions		43,061		40,855
Award credit compensation		37,604		—
Other		1,041,434		952,651
		9,880,888		8,556,518

(i) The tax contingencies relate to the tax assessments mainly in the Federal sphere and are classified 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$618,992. The tax assessment is being challenged 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.

47

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 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:

	September 30, 2016		December 31, 2015
Civil		2,754,730		2,385,643
Labor		1,033,951		960,446
Regulatory		374,116		339,267
Environmental		338,688		295,984
		4,501,485		3,981,340

23 Shareholders’ equity

a) Share capital

As of September 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 September 30, 2016 and December 31, 2015 with a market value of U.S.$7.15 per share at September 30, 2016 (U.S.$3.69 per share at December 31, 2015).

48

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 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			September 30, 2016
Foreign currency translation effects		(468,350	)		141,946			(326,404	)
Loss on cash flow hedge in joint ventures and subsidiaries		(235,779	)		(174,200	)		(409,979	)
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			391			7,139
Total		(478,614	)		(25,863	)		(504,477	)
Attributable to:
Owners of the Company		(478,207	)		7,582			(470,625	)
Non-controlling interests		(407	)		(33,445	)		(33,852	)

	December 31, 2014			Comprehensive (loss) income			September 30, 2015
Foreign currency translation effects		(298,446	)		(193,689	)		(492,135	)
Loss on cash flow hedge in joint ventures and subsidiaries		(10,574	)		(40,790	)		(51,364	)
Revaluation of investment properties reclassified from property, plant and equipment		190,735			—			190,735
Actuarial gain on defined benefit plan		47,104			—			47,104
Changes in fair value of available for sale securities		(1,467	)		4,939			3,472
Total		(72,648	)		(229,540	)		(302,188	)
Attributable to:
Owners of the Company		(165,618	)		(197,035	)		(362,653	)
Non-controlling interests		92,970			(32,505	)		60,465

49

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 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 September 30, 2016 and 2015 (in thousands of Brazilian Reais, except per share amounts):

	July 1, 2016 to September 30, 2016			January 1, 2016 to September 30, 2016			July 1, 2015 to September 30, 2015 (Restated)			January 1, 2015 to September 30, 2015 (Restated)
Profit attributable from continued operation to ordinary equity holders for basic earnings		158,193			315,865			46,002			48,975
Profit attributable from discontinued operation to ordinary equity holders for basic earnings		4,112			15,491			3,519			12,570
Effect of dilution:
Brados’s dilutive options		—			—			(436	)		—
ALL’s debentures		—			—			43			(131	)
Dilutive effect of subsidiary’s stock option plan		(1,020	)		(1,725	)		(6	)		12
Dilutive effect of subsidiary’s stock option plan—discontinued operation		(23	)		(43	)		—			—
Dilutive effect of put option		(15,601	)		(15,601	)		(15,601	)		(15,601	)
Profit from continued operation attributable to ordinary equity holders adjusted for the effect of dilution		141,572			298,539			30.002			33.255
Profit from discontinued operation attributable to ordinary equity holders adjusted for the effect of dilution		4,089			15,449			3,519			12,570
Weighted average number of shares outstanding		264,690,883			264,690,883			264,690,883			264,690,883
Basic earnings per share from:
Continuing operations		R$0.59765			R$1.19333			R$0.17380			R$0.18503
Discontinuing operations		R$0.01554			R$0.05853			R$0.01329			R$0.04749
Diluted earnings per share from:
Continuing operations		R$0.53477			R$1.12787			R$0.11335			R$0.12564
Discontinuing operations		R$0.01545			R$0.05836			R$0.01329			R$0.04749

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.

50

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 30, 2016 and 2015

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

25 Other (expense) income, net

	July 1, 2016 to September 30, 2016			January 1, 2016 to September 30, 2016			July 1, 2015 to September 30, 2015 (Restated)			January 1, 2015 to September 30, 2015 (Restated)
Settlement of pre-existing relationship with business combinations		—			—			—			29,838
Insurance reimbursement income		3,240			10,808			5,633			13,877
Rental income		800			2,016			259			2,380
Cost related to internal organization and prospective acquisitions		(323	)		(323	)		(59	)		(101,423	)
Changes in the fair value of investment properties		—			—			—			—
Loss on disposal of non-current assets		(6,281	)		(15,505	)		(103	)		(2,762	)
Provisions for legal proceedings		(17,954	)		(94,145	)		(17,868	)		(42,010	)
Other		3,616			13,930			10,904			16,678
		(16,902	)		(83,219	)		(1,234	)		(83,422	)

51

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 30, 2016 and 2015

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

26 Financial results

	July 1, 2016 to September 30, 2016			January 1, 2016 to September 30, 2016			July 1, 2015 to September 30, 2015 (Restated)			January 1, 2015 to September 30, 2015 (Restated)
Cost of gross debt
Interest on debt		(480,142	)		(1,383,622	)		(197,290	)		(724,646	)
Monetary and exchange rate variation		(55,842	)		943,902			(1,102,124	)		(1,695,765	)
Derivatives(i)		(66,464	)		(1,431,499	)		847,708			1,248,612
Amortization of borrowing costs		(7,272	)		(69,781	)		—			—
Discounts obtained from financial operations		688			85,962			—			—
Guarantees and warranties on debt		(12,797	)		(35,774	)		(6,212	)		(17,549	)
		(621,829	)		(1,890,812	)		(457,918	)		(1,189,348	)
Income from financial investment		131,646			395,580			100,207			239,338
		131,646			395,580			100,207			239,338
Cost of debt, net		(490,183	)		(1,495,232	)		(357,711	)		(950,010	)
Other charges and monetary variations
Interest on other receivables		52,524			184,477			82,657			111,214
Monetary variation on leases and concessions agreements		(76,089	)		(221,671	)		(62,498	)		(116,189	)
Monetary variation on leases		(55,981	)		(158,074	)		(43,605	)		(65,822	)
Bank charges		(55,230	)		(165,953	)		(33,378	)		(90,379	)
Advances on real state credits		(9,372	)		(21,378	)		(11,977	)		(11,977	)
Interest on other liabilities		(160,787	)		(526,724	)		(105,545	)		(275,127	)
Interest on other financial assets		20,894			20,894			—			—
Exchange variation		5,837			53,731			(3,486	)		(11,839	)
		(278,204	)		(834,698	)		(177,832	)		(460,119	)
(=) Financial results, net		(768,387	)		(2,329,930	)		(535,543	)		(1,410,129	)
Finance expense		(1,140,312	)		(2,859,507	)		(666,221	)		(1,609,950	)
Finance income		263,408			834,976			194,875			382,222
Exchange variation		(47,689	)		1,011,866			(271,185	)		(764,917	)
Derivatives		156,206			(1,317,265	)		206,988			582,516
Financial results, net		(768,387	)		(2,329,930	)		(535,543	)		(1,410,129	)

(i) The balances of fair value of derivatives that were presented under interest and monetary variation on September 30, 2015 were relocated to the caption derivatives and fair value for better presentation of this financial information. The impact of reallocating the number of September 30, 2015 was R$127,184.

52

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 30, 2016 and 2015

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

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.

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

	September 30, 2016		December 31, 2015
Assets
Fair value through profit or loss
Investment funds		2,003,117		2,216,149
Marketable securities		1,385,289		605,490
Other financial assets		—		144,208
Derivate financial instruments		1,225,076		2,430,296
		4,613,482		5,396,143
Loans and receivables
Cash and cash equivalents		1,144,847		1,289,675
Trade receivables		1,107,832		964,978
Restricted cash		195,461		258,183
Receivables from related parties		243,334		296,574
Dividends receivable		6,291		12,064
		2,697,765		2,821,474
Total		7,311,247		8,217,617

53

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 30, 2016 and 2015

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

Liabilities
Liabilities amortized cost
Loans, borrowings and debentures	13,209,066	13,895,414
Leases	1,534,118	1,741,701
Real state credit certificates	220,576	285,006
Trade payables	1,915,654	1,965,012
Other financial liabilities	248,374	236,698
Payables to related parties	230,996	204,080
Dividends payable	22,480	39,934
Tax installments—REFIS	49,680	56,041
Preferred shareholders payable in subsidiaries	2,023,988	2,042,878
	19,454,932	20,466,764
Fair value through profit or loss
Loans, borrowings and debentures	4,564,345	4,933,789
Contingent consideration	146,523	217,377
Post-employment benefits	358,065	344,447
Derivative financial instruments	628,648	742,498
	5,697,581	6,238,111
	25,152,513	26,704,875

Risk management structure

As at September 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
	September 30, 2016		December 31, 2015		September 30, 2016			December 31, 2015
Exchange rate derivatives
Forward agreements		60,337		2,058,190		(7,027	)		46,247
Interest rate and exchange rate risk
Swap agreements (interest rate)		1,991,243		1,083,526		91,955			(107,230	)
Cross currency interest rate swaps		4,106,780		4,629,948		511,500			1,748,781
		6,098,023		5,713,474		603,455			1,641,551
Total financial instruments						596,428			1,687,798
Assets						1,225,076			2,430,296
Liabilities						(628,648	)		(742,498	)

54

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 30, 2016 and 2015

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

Credit risk

	September 30, 2016		December 31, 2015
Cash and cash equivalents(i)		3,147,964		3,505,824
Trade receivables(ii)		1,107,832		964,978
Other financial assets(ii)		—		144,208
Derivative financial instruments(i)		1,225,076		2,430,296
Marketable securities(i)		1,385,289		605,490
Restricted cash(i)		195,461		258,183
Dividends receivable		6,291		12,064
		7,067,913		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 show below. The position of derivative financial instruments considers the net exposure of derivatives which have exactly the same flow, with the same bank, and counter signs.

	September 30, 2016		December 31, 2015
AAA		1,594		1,473,089
AA		2,502,382		4,068,000
AA-		1,447,869		—
A		1,187,700		357,399
A+		42,740		—
BB		—		207,097
BBB		85,957		—
BBB-		136,292		580,233
		5,404,534		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.

55

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 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:

	September 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		(4,151,917	)		(4,156,433	)		(10,339,042	)		(10,244,907	)		(28,892,299	)		(29,450,102	)
Trade payables		(1,914,836	)		—			—			—			(1,914,836	)		(1,965,012	)
Other financial liabilities		(248,374	)		—			—			—			(248,374	)		(236,698	)
REFIS		(13,640	)		(11,944	)		(19,624	)		(11,679	)		(56,887	)		(64,529	)
Leases		(693,539	)		(451,726	)		(667,636	)		(380,936	)		(2,193,837	)		(2,132,455	)
Real estate credits certificates		(138,824	)		(121,371	)		(18,150	)		—			(278,345	)		(382,559	)
		(7,161,130	)		(4,741,474	)		(11,044,452	)		(10,637,522	)		(33,584,578	)		(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.

56

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 30, 2016 and 2015

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

a) Foreign exchange risk

As at September 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:

	September 30, 2016						December 31, 2015
	R$			US$			R$			US$
Cash and cash equivalents		684,505			210,864			256,003			65,561
Trade receivables		30,570			9,417			18,227			4,668
Advances to suppliers		67,102			20,671			85,155			21,808
Trade payables		(68,924	)		(21,232	)		(15,894	)		(4,070	)
Loans, borrowings and debentures		(6,708,840	)		(2,066,674	)		(6,653,006	)		(1,703,802	)
Advances from clients		—			—			(1,701	)		(436	)
Contingent consideration		(52,392	)		(16,139	)		(65,064	)		(16,663	)
Derivative financial instruments		4,826,861			1,486,926			6,688,138			1,712,799
Foreign exchange exposure, net		(1,221,118	)		(376,167	)		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 September 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 September 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$/US$)
	September 30, 2016		Scenario
			Probable		25%		50%		-25%		-50%
USD		3.2462		3.5731		4.4664		5.3597		2.6798		1.7866

The external source used by the Company for market projections was the BM&F BOVESPA.

57

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 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		109,495			77,018			154,006			(76,958	)		(153,946	)
Trade receivables	USD fluctuation		1,801			8,551			16,643			(7,634	)		(15,727	)
Advances to suppliers	USD fluctuation		1,822			19,171			36,521			(15,538	)		(32,877	)
Trade payables	USD fluctuation		(1,832	)		(19,521	)		(37,210	)		15,857			33,546
Exchange rate derivatives(i)	USD fluctuation		(4,615	)		13,663			26,984			(12,979	)		(26,301	)
Exchange rate and interest derivatives(i)	USD and CDI fluctuation		397,241			1,279,895			2,559,790			(1,279,895	)		(2,559,790	)
Loans, borrowings and debentures	USD fluctuation		(836,942	)		(1,017,000	)		(2,034,000	)		1,017,000			2,034,000
Contingent consideration	USD fluctuation		(5,276	)		(14,417	)		(28,834	)		14,417			28,834
Impacts on profit or loss			(338,306	)		347,360			693,900			(345,730	)		(692,261	)

(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 withpre-tax increases and decreases of 25% and 50% is presented below:

	September 30, 2016
Exposure interest rate(i)	Probable			25%			50%			-25%			-50%
Cash and cash equivalents		550,301			137,575			275,151			(137,575	)		(275,151	)
Leases		(97,923	)		(24,481	)		(35,418	)		24,481			35,418
Advances on real state credits		(31,168	)		(7,792	)		(15,584	)		7,792			15,584
Interest rate derivatives		89,860			(242,100	)		(526,796	)		349,600			782,584
Loans, borrowings and debentures		(1,988,876	)		(474,291	)		(948,583	)		474,291			948,583
Impacts on profit or loss		(1,477,806	)		(611,089	)		(1,251,230	)		718,589			1,507,018

58

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 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		12.50	%		15.63	%		18.75	%		9.38	%		6.25	%
CDI		12.48	%		15.60	%		18.72	%		9.36	%		6.24	%
TJ462		8.50	%		10.63	%		12.75	%		6.38	%		4.25	%
TJLP		7.50	%		9.38	%		11.25	%		5.63	%		3.75	%
IPCA		5.15	%		6.44	%		7.73	%		3.86	%		2.58	%
LIBOR		1.20	%		1.50	%		1.80	%		0.90	%		0.60	%

The external source used by the Company for market projections was the BM&F BOVESPA.

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 listed on the Luxembourg Stock Exchange (Note 16) is based on their quoted market price as of September 30, 2016, of 95.55% (78.71% on December 31, 2015) and 97.54% (83.83% at December 31, 2015), and 104,53%, respectively, of the face nominal value at September 30, 2016.

• The fair value of Perpetual Notes listed on the Luxembourg Stock Exchange (Note 16) is based on their quoted market price as September 30, 2016 of 99.52% (79.64% at December 31, 2015) of the face value of obligations at September 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).

59

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 30, 2016 and 2015

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

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.

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

	Carrying amount						Assets and liabilities measured at fair value
	September 30, 2016			December 31, 2015			September 30, 2016					December 31, 2015
							Level 1		Level 2			Level 1		Level 2
Assets
Investment funds		2,003,117			2,244,427			—		2,003,117			—		2,244,427
Marketable securities		1,385,289			605,490			—		1,385,289			—		605,490
Other financial assets		—			144,208			—		—			—		144,208
Derivate financial instruments		1,225,076			2,430,296			—		1,225,076			—		2,430,296
Total		4,613,482			5,424,421			—		4,613,482			—		5,424,421
Liabilities
Loans, borrowings and debentures		(4,564,345	)		(4,933,789	)		—		(4,564,345	)		—		(4,933,789	)
Post-employment benefits		(358,065	)		(344,447	)		—		(358,065	)		—		(344,447	)
Contingent consideration		(146,523	)		(217,377	)		—		(146,523	)		—		(217,377	)
Derivative financial instruments		(628,648	)		(742,498	)		—		(628,648	)		—		(742,498	)
Total		(5,697,581	)		(6,238,111	)		—		(5,697,581	)		—		(6,238,111	)

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		(72,662	)		241,521			168,859
Fair value		(293,891	)		424,964			131,073
At September 30, 2016		2,156,219			(156,101	)		2,000,118

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.

60

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 30, 2016 and 2015

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

28 Post-employment benefits

	September 30, 2016		December 31, 2015
Futura		48,559		48,414
Futura II		244		335
COMGÁS		309,262		295,698
		358,065		344,447

During the period ended September 30, 2016, the expense recognized in relation to the actuarial contributions was R$18,934 (R$17,006 for the nine month period ended September 30, 2015).

29 Share-based payment

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

	Expected life (years)								Number of instruments on September 30, 2016							Market price on grant date		Exercise price at September 30, 2016		Fair value at grant date—R$(i)
			Interest rate			Expected volatility			Granted		Exercisable options			Outstanding
Share option programs
August 18, 2011 (A)		1 to 5		12,39	%		31,44	%		4,825,000		(2,720,000	)		1,785,000		22.98		24.02		6.80
August 18, 2011 (B)		1 to 10		12,39	%		30,32	%		5,000,000		(1,100,000	)		3,900,000		22.98		24.02		8.15
December 12, 2012 (C)		1 to 5		8,78	%		31,44	%		700,000		(48,000	)		652,000		39.80		42.08		10.10
April 24, 2013		5		13,35	%		27,33	%		970,000		—			945,000		46.51		38.23		17.95
April 25, 2014		5		12,43	%		29,85	%		960,000		—			945,000		37.10		39.24		15.67
August 31, 2015		5		14,18	%		33,09	%		759,000		—			759,000		18.15		19.94		7.67
October 2, 2015		5		15,66	%		62,94	%		4,485,238		—			4,205,238		6.30		7.97		2.83
										17,699,238		(3,868,000	)		13,191,238

(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		(653,750	)		26.50
At September 30, 2016		13,152,488			24.31

61

Cosan Limited

Notes to the consolidated financial statements

For the nine month periods ended September 30, 2016 and 2015

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

30 Subsequent events

Approval of the sale’s shares—Radar and Radar II

On October 18, 2016, CADE approved the stock sale of the Radar and Radar II, in which Cosan agrees to sell to Mansilla part of its interests held in the companies. On November 4, 2016 the sales value was received.

***

62

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: November 10, 2016

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