Cosan (CSAN) 6-K Current report (foreign)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

Report of Foreign Issuer

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

Securities Exchange Act of 1934

For the month of May 2021

Commission File Number: 333-251238

COSAN S.A.

(Exact name of registrant as specified in its charter)

N/A

(Translation of registrant’s name into English)

Av. Brigadeiro Faria Lima, 4100, – 16th floor
São Paulo, SP 04538-132 Brazil
(Address of principal executive offices)

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

Form 20-F ☒ 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 ☒

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule101(b)(7):

Yes ☐ No ☒

1

​

Contents
Independent auditor’s review report on quarterly information	3
Statements of financial position	5
Statement of profit or loss	7
Statement of other comprehensive income	8
Statement of changes in equity	9
Statement of cash flows	11
Statement of value added	14
Notes to the interim financial statements	15

2

A free translation from Portuguese into English of Independent Auditor’s Review Report on Interim Financial Information prepared in Brazilian currency in accordance with NBC TG 21 and IAS 34 and the rules issued by the Brazilian Securities Commission (CVM), applicable to the preparation of Quarterly Information (ITR)

To

Shareholders, Board of Director and Officers of

Cosan S.A.

São Paulo - SP

Introduction

We have reviewed the accompanying individual and consolidated interim financial information, contained in the Quarterly Information Form (ITR) of - Cosan S.A. (“Company”) for the quarter ended March 31, 2021, comprising the statement of financial position as of March 31, 2021 and the related statements of profit or loss, of comprehensive income, of changes in equity and of cash flows for the three month period then ended, including the explanatory notes.

Management is responsible for preparation of the individual and consolidated interim financial information in accordance with Accounting Pronouncement NBC TG 21 - Demonstrações intermediárias, and IAS 34 - Interim Financial Reporting, issued by the International Accounting Standards Board (IASB), as well as for the fair presentation of this information in conformity with the rules issued by the Brazilian Securities and Exchange Commission (CVM) applicable to the preparation of the Quarterly Information Form (ITR). Our responsibility is to express a conclusion on this interim financial information based on our review.

Scope of review

We conducted our review in accordance with Brazilian and international standards on review engagements (NBC TR 2410 - Revisão de Informações Intermediárias Executada pelo Auditor da Entidade and ISRE 2410 - Review of Interim Financial Information performed by the Independent Auditor of the Entity, respectively). A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with auditing 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 individual and the consolidated interim financial information

Based on our review, nothing has come to our attention that causes us to believe that the accompanying individual and consolidated interim financial information included in the quarterly information referred to above are not prepared, in all material respects, in accordance with NBC TG 21 and IAS 34 applicable to the preparation of Quarterly Information Form (ITR), and presented consistently with the rules issued by the Brazilian Securities and Exchange Commission.

3

Emphasis of matter

Restatement of Earnings per share

As mentioned in Note 16, due to the share split, the Company adjusted earnings per share and the related notes correspondents for the thee-month period ended March 31, 2020, as provided for in Brazilian Accounting Standard CPC 41 – Resultado por ação / IAS 33 – Earnings per share. Our conclusion is not qualified in respect of this matter.

Other matters

Statements of value added

The abovementioned quarterly information includes the statement of value added (SVA) for the three-month period ended March 31, 2021, prepared under Company’s Management responsibility and presented as supplementary information by IAS 34. These statements have been subject to review procedures performed together with the review of the quarterly information with the objective to conclude whether they are reconciled to the interim financial information and the accounting records, as applicable, and if its format and content are in accordance with the criteria set forth by NBC TG 09 - Demonstração do Valor Adicionado. Based on our review, nothing has come to our attention that causes us to believe that they were not prepared, in all material respects, consistently with the overall interim financial information.

São Paulo, May 14, 2021.

ERNST & YOUNG

Auditores Independentes S.S.

CRC-2SP034519/O-6

/s/Marcos Alexandre S. Pupo

Marcos Alexandre S. Pupo

Accountant CRC-1SP221749/O-0

4

(In thousands of Brazilian Reais - R$)

		Parent Company		Consolidated
	Note	March 31, 2021	December 31, 2020	March 31, 2021	December 31, 2020
Assets
Cash and cash equivalents	5.1	1,249,667	1,149,267	7,933,170	4,614,053
Marketable securities	5.2	844,191	788,965	3,735,659	2,271,570
Trade receivables	5.3	—	—	2,285,407	1,585,708
Derivative financial instruments	5.10	86,858	—	382,585	156,208
Inventories	7	—	—	961,975	685,900
Receivables from related parties	5.5	130,865	286,993	94,402	71,783
Income tax receivable		150,766	141,018	261,698	178,501
Other current tax receivable	6	35,525	35,507	675,385	434,480
Dividends receivable		177,032	160,694	102,592	77,561
Sector financial assets	5.9	—	—	184,105	241,749
Other financial assets	5.4	—	779,695	69,381	848,821
Other current assets		117,683	101,673	396,752	270,065
Total current assets		2,792,587	3,443,812	17,083,111	11,436,399
Trade receivables	5.3	—	—	25,995	19,131
Restricted cash	5.2	30,012	—	59,872	—
Deferred tax assets	13	251,591	54,032	2,150,103	629,591
Receivables from related parties	5.5	575,972	473,349	283,064	199,983
Income tax receivable		—	—	145,791	836
Other non-current tax receivable	6	37,651	37,533	978,329	167,224
Judicial deposits	14	385,292	380,727	884,403	544,226
Derivative financial instruments	5.10	3,089,713	2,457,604	5,850,020	2,971,210
Other non-current assets		170,936	165,310	297,633	227,857
Investments in associates	8.1	16,250,838	11,026,580	382,640	333,705
Investments in joint ventures	9	2,259,602	2,314,537	8,145,564	7,988,208
Property, plant and equipment	10.1	62,722	61,459	14,680,228	416,996
Intangible assets and goodwill	10.2	2,022	2,191	17,503,169	10,045,296
Contract asset	10.3	—	—	602,093	695,938
Right-of-use assets	10.4	32,460	24,809	7,885,307	84,224
Total non-current assets		23,148,811	16,998,131	59,874,211	24,324,425
Total assets		25,941,398	20,441,943	76,957,322	35,760,824

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

5

		Parent Company		Consolidated
	Note	March 31, 2021	December 31, 2020	March 31, 2021	December 31, 2020
Liabilities
Loans, borrowings and debentures	5.6	44,863	—	2,413,080	2,352,057
Leases	5.8	7,070	11,108	533,515	20,466
Derivative financial instruments	5.10	569	7,291	225,870	293,656
Trade payables	5.7	1,323	4,066	2,309,971	1,875,192
Employee benefits payables		14,285	25,168	262,518	195,881
Income tax payables		6,909	2,571	88,421	374,339
Other taxes payable	12	109,828	125,368	427,666	367,076
Dividends payable		68,899	216,929	147,214	285,177
Concessions payable	11	—	—	159,745	—
Payables to related parties	5.5	193,655	278,740	366,835	150,484
Sector financial liabilities	5.9	—	—	92,386	91,912
Other financial liabilities		—	—	509,656	149,293
Other current liabilities		95,450	103,501	388,399	259,580
Total current liabilities		542,851	774,742	7,925,276	6,415,113
Loans, borrowings and debentures	5.6	5,971,015	—	34,162,954	13,075,170
Leases	5.8	30,544	17,037	2,553,675	59,297
Preferred shareholders payable in subsidiaries		391,187	387,044	391,187	387,044
Derivative financial instruments	5.10	114,599	124,171	114,599	124,171
Other taxes payable	12	140,827	141,233	148,397	146,895
Provision for legal proceedings	14	312,708	308,819	1,394,453	887,794
Concessions payable	11	—	—	2,855,739	—
Provision for uncovered liability of associates	8.1	331,041	458,852	—	—
Payables to related parties	5.5	7,745,942	7,096,139	—	—
Post-employment benefits	21	181	177	734,291	728,677
Deferred tax liabilities	13	—	—	3,680,685	1,271,208
Sector financial liabilities	5.9	—	—	511,124	473,999
Deferred revenue		—	—	40,393	—
Other non-current liabilities		289,611	286,064	805,197	685,642
Total non-current liabilities		15,327,655	8,819,536	47,392,694	17,839,897
Total liabilities		15,870,506	9,594,278	55,317,970	24,255,010
Shareholders' equity	15
Share capital		6,365,853	5,727,478	6,365,853	5,727,478
Treasury shares		(91,158)	(583,941)	(91,158)	(583,941)
Additional paid-in capital		(2,978,460)	(939,347)	(2,978,460)	(939,347)
Accumulated other comprehensive loss		(263,319)	(252,610)	(263,319)	(252,610)
Retained earnings		6,399,169	6,896,085	6,399,169	6,896,085
Profit for the period		638,807	—	638,807	—
Equity attributable to:
Owners of the Company		10,070,892	10,847,665	10,070,892	10,847,665
Non-controlling interests	8.2	—	—	11,568,460	658,149
Total shareholders' equity		10,070,892	10,847,665	21,639,352	11,505,814
Total shareholders' equity and liabilities		25,941,398	20,441,943	76,957,322	35,760,824

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

6

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

		Parent Company			Consolidated
	Note	March 31, 2021	March 31, 2020		March 31, 2021		March 31, 2020 (Restated)
Net sales	17	—	—		4,715,799		3,506,512
Cost of sales	18	—	—		(3,369,867)		(2,486,377)
Gross profit		—	—		1,345,932		1,020,135
Selling expenses	18	—	—		(158,655)		(279,396)
General and administrative expenses	18	(47,337)	(34,922)		(363,608)		(171,225)
Other expenses, net	19	(25,040)	(74,548)		(28,926)		(35,954)
Operating expenses		(72,377)	(109,470)		(551,189)		(486,575)
Result before equity in earnings of investees, finance results and taxes		(72,377)	(109,470)		794,743		533,560
Interest in earnings of associates	8.1	954,353	435,575		(1,194)		820
Interest in earnings of joint ventures	9	(54,936)	(24,159)		254,801		191,344
Equity in earnings of investees		899,417	411,416		253,607		192,164
Finance expense		(202,357)	(291,755)		(171,818)		(748,020)
Finance income		36,325	60,779		191,152		265,649
Foreign exchange, net		(729,972)	(1,406,185)		(991,459)		(1,538,025)
Net effect of derivatives		590,696	1,284,503		590,214		1,397,199
Finance results, net	20	(305,308)	(352,658)		(381,911)		(623,197)
Profit before taxes		521,732	(50,712)		666,439		102,527
Income taxes	13
Current		—	—		399,860		(125,231)
Deferred		117,075	152,962		(358,036)		139,409
		117,075	152,962		41,824		14,178
Profit for the period		638,807	102,250		708,263		116,705
Profit attributable to:
Owners of the Company		638,807	102,250		638,807		102,250
Non-controlling interests		—	—		69,456		14,455
		638,807	102,250		708,263		116,705
Earnings per share	16
Basic				R$	0.3685	R$	0.0655
Diluted				R$	0.3662	R$	0.0647

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

7

(In thousands of Brazilian Reais - R$)

	Parent Company		Consolidated
	March 31, 2021	March 31, 2020	March 31, 2021	March 31, 2020
Profit for the period	638,807	102,250	708,263	116,705
Items that are or may subsequently be reclassified to profit or loss:
Foreign currency translation differences	244,947	563,497	272,535	610,682
Gain on cash flow hedge	(255,795)	(155,635)	(256,387)	(155,635)
Change in fair value of financial assets	139	(1)	139	(1)
	(10,709)	407,861	16,287	455,046
Total comprehensive income for the period	628,098	510,111	724,550	571,751
Total comprehensive income attributable to:
Owners of the Company	628,098	510,111	628,098	510,111
Non-controlling interests	—	—	96,452	61,640
	628,098	510,111	724,550	571,751

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

8

(In thousands of Brazilian Reais - R$)

			Capital reserve			Profit reserve
	Share capital	Treasury share	Corporate transactions - Law 6404	Capital transactions	Accumulated other comprehensive loss	Legal	Statutory reserve	Profit to be realized	Retained earnings	Accumulated profits	Total	Non-controlling interest	Total equity
At January 1, 2021	5,727,478	(583,941)	737	(940,084)	(252,610)	42,593	6,334,427	171,021	348,044	—	10,847,665	658,149	11,505,814
Profit for the period	—	—	—	—	—	—	—	—	—	638,807	638,807	69,456	708,263
Other comprehensive income: (note 15)
Loss on cash flow hedge	—	—	—	—	(255,795)	—	—	—	—	—	(255,795)	(592)	(256,387)
Foreign currency translation differences	—	—	—	—	244,947	—	—	—	—	—	244,947	27,588	272,535
Change in fair value of financial assets	—	—	—	—	139	—	—	—	—	—	139	—	139
Total comprehensive income for the period	—	—	—	—	(10,709)	—	—	—	—	638,807	628,098	96,452	724,550
Transactions with owners of the Company
Contributions and distributions:
Capital increase (Note 15)	638,375	—	—	(638,375)	—	—	—	—	—	—	—	1,750	1,750
Cancellation of treasury shares (Note 15)	—	496,916	—	—	—	—	(496,916)	—	—	—	—	—	—
Share options exercised	—	645	—	1,543	—	—	—	—	—	—	2,188	—	2,188
Dividends	—	—	—	—	—	—	—	—	—	—	—	(3,407)	(3,407)
Treasury shares acquired (Note 15)	—	(4,778)	—	—	—	—	—	—	—	—	(4,778)	—	(4,778)
Corporate reorganization (Note 1.2)	—	—	—	(1,400,557)	—	—	—	—	—	—	(1,400,557)	10,836,134	9,435,577
Share-based payment transactions	—	—	—	1,564	—	—	—	—	—	—	1,564	964	2,528
Total contributions by and distributions to owners of the Company	638,375	492,783	—	(2,035,825)	—	—	(496,916)	—	—	—	(1,401,583)	10,835,441	9,433,858
Transactions with owners of the Company
Change of shareholding interest in subsidiary (Note 8.2)	—	—	—	(3,288)	—	—	—	—	—	—	(3,288)	(21,582)	(24,870)
Total changes in ownership interests	—	—	—	(3,288)	—	—	—	—	—	—	(3,288)	(21,582)	(24,870)
Total transactions with owners of the Company	638,375	492,783	—	(2,039,113)	—	—	(496,916)	—	—	—	(1,404,871)	10,813,859	9,408,988
At March 31, 2021	6,365,853	(91,158)	737	(2,979,197)	(263,319)	42,593	5,837,511	171,021	348,044	638,807	10,070,892	11,568,460	21,639,352
The accompanying notes are an integral part of these interim financial statements.

9

			Capital reserve			Profit reserve
	Share capital	Treasury share	Corporate transactions - Law 6404	Capital transactions	Accumulated other comprehensive loss	Legal	Statutory reserve	Profit to be realized	Retained earnings	Accumulated profits	Total	Non-controlling interest	Total equity
At January 1, 2020	5,045,214	(112,785)	737	(958,738)	(349,501)	121,270	6,288,472	171,021	348,044	—	10,553,734	507,482	11,061,216
Profit for the period	—	—	—	—	—	—	—	—	—	102,250	102,250	14,455	116,705
Other comprehensive income: (note 15)
Loss on cash flow hedge	—	—	—	—	(155,635)	—	—	—	—	—	(155,635)	—	(155,635)
Foreign currency translation differences	—	—	—	—	563,497	—	—	—	—	—	563,497	47,185	610,682
Change in fair value of financial assets	—	—	—	—	(1)	—	—	—	—	—	(1)	—	(1)
Total comprehensive income for the period	—	—	—	—	407,861	—	—	—	—	102,250	510,111	61,640	571,751
Transactions with owners of the Company
Contributions and distributions:
Capital increase	—	—	—	—	—	—	—	—	—	—	—	6,666	6,666
Share options exercised	—	1,081	(1,081)	—	—	—	—	—	—	—	—	—	—
Dividends - non-controlling interests	—	—	—	—	—	—	—	—	—	—	—	(1,145)	(1,145)
Treasury shares acquired	—	(290,772)	—	—	—	—	—	—	—	—	(290,772)	—	(290,772)
Share-based payment transactions	—	—	—	3,132	—	—	—	—	—	—	3,132	18	3,150
Total contributions by and distributions to owners of the Company	—	(289,691)	(1,081)	3,132	—	—	—	—	—	—	(287,640)	5,539	(282,101)
Transactions with owners of the Company
Change of shareholding interest in subsidiary	—	—	—	44,569	—	—	—	—	—	—	44,569	30,431	75,000
Total changes in ownership interests	—	—	—	44,569	—	—	—	—	—	—	44,569	30,431	75,000
Total transactions with owners of the Company	—	(289,691)	(1,081)	47,701	—	—	—	—	—	—	(243,071)	35,970	(207,101)
At March 31, 2020	5,045,214	(402,476)	(344)	(911,037)	58,360	121,270	6,288,472	171,021	348,044	102,250	10,820,774	605,092	11,425,866
The accompanying notes are an integral part of these interim financial statements.

10

(In thousands of Brazilian Reais - R$)

		Parent Company		Consolidated
	Note	March 31, 2021	March 31, 2020	March 31, 2021	March 31, 2020
Cash flows from operating activities
Profit before taxes		521,732	(50,712)	666,439	102,527
Adjustments for:
Depreciation and amortization		2,474	2,814	311,311	143,520
Interest in earnings of associates	8.1	(954,353)	(435,575)	1,194	(820)
Interest in earnings of joint ventures	9	54,936	24,159	(254,801)	(191,344)
(Gain) loss on disposals assets		—	—	(316)	1,781
Share-based payment		2,689	2,208	6,177	3,145
Legal proceedings provision		24,013	7,288	35,459	6,945
Interest and exchange, net		306,928	375,470	400,649	659,776
Sectorial financial assets and liabilities, net	5.9	—	—	96,608	—
Provisions for employee benefits		1,626	(750)	35,355	16,298
Allowance for expected credit losses		—	—	(1,079)	7,686
Other		26	66,339	(37,995)	45,728
		(39,929)	(8,759)	1,259,001	795,242
Trade receivables		—	—	(45,005)	(32,984)
Inventories		—	—	(6,828)	(30,050)
Other current tax, net		(15,252)	(13,210)	98,432	(20,875)
Income tax (i)		12,349	(22,247)	(97,078)	(402,541)
Related parties, net		6,063	(221,814)	(16,146)	(7,506)
Trade payables		(3,156)	(3,770)	(152,515)	6,442
Employee benefits		(23,591)	(13,233)	(140,415)	(69,409)
Provision for legal proceedings		(166)	(2,469)	(19,570)	(5,327)
Other financial liabilities		—	—	(15,614)	(34,758)
Judicial deposits		(633)	(1,130)	(10,472)	27,983
Contractual obligations for assignment of credit rights		—	(132,200)	—	(132,200)
Post-employment benefits		—	—	(7,861)	(10,903)
Other assets and liabilities, net		(22,494)	(3,686)	(3,185)	(121,388)
		(46,880)	(413,759)	(416,257)	(833,516)
Net cash (used in) generated by operating activities		(86,809)	(422,518)	842,744	(38,274)
Cash flows from investing activities
Capital contribution in associates	8.1	(1,500)	(11,142)	—	(1,142)
Acquisition of subsidiary, net of cash acquired		—	—	—	(90,247)
(Purchase) sale of marketable securities		(52,254)	(158,652)	1,574,984	(449,198)
Restricted cash		(30,012)	—	24,405	—
Dividends received from associates		198,020	—	—	—
Other financial assets		—	—	8	—
Acquisition of property, plant and equipment, intangible assets and contract assets		(65)	(3,072)	(467,800)	(258,645)
Cash in the merger operation	1.2	353,601	—	8,125,855	—
Net cash generated by (used in) investing activities		467,790	(172,866)	9,257,452	(799,232)

11

Cash flows from financing activities
Loans, borrowings and debentures raised	5.6	—	—	583,128	76,108
Repayment of principal on loans, borrowings and debentures	5.6	(5,427)	(1,700,000)	(6,945,855)	(1,950,907)
Payment of interest on loans, borrowings and debentures	5.6	(134,759)	(35,203)	(513,490)	(199,603)
Payment of derivative financial instruments		(25,383)	(36,078)	(505,080)	(13,727)
Receipt of derivative financial instruments		103,738	79,857	550,961	106,243
Payment of derivative financial instruments, except debt		(218,809)	—	(218,809)	—
Receipt of derivative financial instruments, except debt		197,679	—	197,679	—
Repayment of principal on leases	5.8	(305)	(167)	(27,769)	(2,358)
Payment of interest on leases	5.8	(315)	(208)	(18,482)	(937)
Equity contribution from shareholders interest		—	—	—	75,000
Equity contribution from non-controlling interest	8.2	—	—	1,750	6,666
Related parties		(185,547)	—	—	(17,063)
Payments to redeem entity's shares		(4,778)	(290,772)	(34,529)	(290,772)
Acquisition of non-controlling interests		(6,675)	—	—	—
Dividends paid		—	—	(3,319)	(1,213)
Receipts of consideration assets		—	—	—	65,478
Net cash used in financing activities		(280,581)	(1,982,571)	(6,933,815)	(2,147,085)
Increase (decrease) in cash and cash equivalents		100,400	(2,577,955)	3,166,381	(2,984,591)
Cash and cash equivalents at beginning of the period		1,149,267	3,490,707	4,614,053	6,076,644
Effect of exchange rate fluctuations on cash held		—	(249)	152,736	247,390
Cash and cash equivalents at end of the period		1,249,667	912,503	7,933,170	3,339,443
Additional information
Income tax paid (i)		—	3,767	37,560	380,279

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

(i)
In the three-month period ended March 31, 2021, the Company paid the annual adjustment of the Income Tax and Social Contribution of 2020 using tax credits, so that the amount presented as payment in the supplementary information refers only to monthly advances based on gross revenue.

12

Statement of cash flows

(In thousands of Brazilian Reais - R$)

Non-cash transaction

1. Recognition of interest on shareholder’s equity decided by Raízen Combustíveis S.A. in the amount of R$19,221.

2. Acquisition of assets for construction of the natural gas distribution pipeline in the Comgás subsidiary with payment in installments in the amount of R$1,982.

3. Capital contribution to the subsidiary Payly Soluções de Pagamentos S.A. in the amount of R$3,750, through the capitalization of reimbursable expenses.

4. Registration of right-of-use against the lease liability in the amount of R$6,209 related to new contracts covered by the commercial lease rule.

5. Acquisition of assets logistics operations with payment in installments in the amount of R$14,209 on March 31, 2021.

Disclosure of interest and dividends

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

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

13

(In thousands of Brazilian Reais - R$)

	Parent Company		Consolidated
	March 31, 2021	December 31, 2020	March 31, 2021	December 31, 2020
Revenues
Sales of products and services net of returns	—	—	5,766,154	4,340,830
Other operating revenues (expenses), net	(1,291)	(69,299)	7,526	(26,697)
Allowance for doubtful accounts	—	—	931	(7,686)
	(1,291)	(69,299)	5,774,611	4,306,447
Raw materials acquired from third parties
Cost of goods sold and services rendered	—	—	(3,259,106)	(2,483,982)
Materials, energy, third party services, others	(47,657)	(21,058)	(150,534)	(146,787)
	(47,657)	(21,058)	(3,409,640)	(2,630,769)
Gross value added	(48,948)	(90,357)	2,364,971	1,675,678
Retention
Depreciation and amortization	(2,474)	(2,814)	(311,311)	(143,520)
	(2,474)	(2,814)	(311,311)	(143,520)
Net value added	(51,422)	(93,171)	2,053,660	1,532,158
Value added transferred in
Interest in earnings of subsidiaries	954,353	435,575	(1,194)	820
Interest in earnings of joint ventures	(54,936)	(24,159)	254,801	191,344
Finance income	36,325	60,779	191,152	265,649
	935,742	472,195	444,759	457,813
Value added to be distributed	884,320	379,024	2,498,419	1,989,971
Distribution of value added
Payroll and social charges	14,431	12,706	166,138	126,519
Direct remuneration	12,217	11,248	148,297	109,120
Benefits	1,552	1,353	17,192	16,504
FGTS and others	662	105	649	895
Taxes and contributions	(112,690)	(150,791)	1,051,816	857,902
Federal	(113,539)	(151,634)	350,308	235,108
State	—	—	679,281	607,582
Municipal	849	843	22,227	15,212
Finance expense and rents	343,772	414,859	572,202	888,845
Interest and exchange variation	333,409	401,016	491,704	859,903
Rents	2,140	1,422	3,334	—
Others	8,223	12,421	77,164	28,942
Non-controlling interests	—	—	69,456	14,455
Profit for the period	638,807	102,250	638,807	102,250
	884,320	379,024	2,498,419	1,989,971
The accompanying notes are an integral part of these interim financial statements.

14

(In thousands of Brazilian Reais - R$, unless otherwise stated)

1 Operations

Cosan S.A. (“Cosan” or “the Company”) is a publicly traded Company with shares traded on the Novo Mercado of B3 S.A. - Brasil, Bolsa, Balcão, or “B3”, under the ticker symbol CSAN3, on the São Paulo Stock Exchange. New York, or "NYSE", under the ticker symbol CSAN and is headquartered in the city of São Paulo, Brazil. Mr. Rubens Ometto Silveira Mello is the ultimate controlling shareholder of Cosan. 

Acquisition of Biosev S.A. by Raízen

On February 8, 2021, the jointly controlled subsidiary Raízen S.A. entered into an acquisition agreement with Biosev S.A., or "Biosev", and Hédera Investimentos e Participações S.A., or "Hédera", as the controlling shareholder of Biosev, among other parties, whereby Raízen agreed, under the terms and conditions established therein, to acquire up to 100% of the shares issued by Biosev.

The acquisition will involve an exchange of shares, with Raízen issuing preferred shares in the amount of 3.5% of its share capital and also paying an amount of R$3,600,000 in cash to refinance part of Hédera's debt. There will also be an issue of redeemable shares equivalent to 1.49% of Raízen's share capital for a symbolic amount. On March 1, 2021, the Brazilian Antitrust Authority (Conselho Administrativo de Defesa Econômica), or “CADE,” approved the transaction. The consummation of the acquisition is subject to compliance with certain conditions precedent established in the acquisition contract, there is no accounting impact in these financial statements. The expectation is that, after the acquisition, the shareholder structure of Raízen and Biosev will be as follows:

15

Notes to the interim financial statements

(In thousands of Brazilian Reais - R$, unless otherwise stated)

1.1 Covid-19

During the quarter ended March 31, 2021, the Company, its subsidiaries and jointly controlled companies continue to monitor the evolution of the COVID-19 pandemic in Brazil and worldwide, in order to take preventive measures to minimize the spread of the virus, ensure continuity of operations and safeguard the health and safety of our employees and partners. The response to the pandemic has been effective in limiting the impacts on our operational facilities, employees, supply chain and logistics.

The Company ended the period ended March 31, 2021 with cash of R$7,933,170, net working capital with a positive balance of R$9,157,835 and a net profit of R$708,263.

Our covenants are assessed monthly for our need to generate sufficient cash flows to meet indebtedness and our ability to meet the covenants contained in the contracts that govern our indebtedness. Until March 31, 2021, the Company and its subsidiaries have been complying with all restrictive financial clauses.

16

Notes to the interim financial statements

(In thousands of Brazilian Reais - R$, unless otherwise stated)

Considering the low level of interest rates in Brazil and in the locations of our subsidiaries, we consider that despite the short-term fluctuations in some macroeconomic assumptions due to the impacts of the COVID-19 pandemic, our weighted average cost of capital should not undergo material changes.

The Company assessed the circumstances that could indicate impairment of its non-financial assets and concluded that there were no changes in the circumstances that would indicate an impairment loss. Our tax recovery projections are based on the same scenarios and assumptions used in the impairment assessment.

Losses due to the non-recoverability of financial assets were calculated based on the credit risk analysis, which includes the history of losses, the individual situation of the customers, the situation of the economic group to which they belong, the real guarantees for debts and macroeconomic indicators and is considered on March 31, 2021, sufficient to cover possible losses on the amounts receivable, in addition to a prospective assessment that consider the change or expected change in economic factors that affect the expected credit losses, which will be determined based on weighted probabilities and measured at an amount equal to the expected credit loss for life.

The credit quality of accounts receivable falling due is considered adequate, and the amount of the effective risk of possible losses in accounts receivable from customers is presented as losses due to the non-recoverability of financial assets.

Our inventories are composed, substantially, of lubricants, base oil and materials for the construction of gas pipelines, which are products that are not valid or have a long duration and, therefore, we do not observe indicators of obsolescence or non-performance.

To date, there have been no changes in the scope of the Company's leases, including adding, terminating, extending, reducing the lease term. Also, there was no change in the consideration for the leases that we are both lessees and lessors.

17

Notes to the interim financial statements

(In thousands of Brazilian Reais - R$, unless otherwise stated)

1.2 Corporate reorganization

On July 2, 2020, the Boards of Directors of Cosan S.A., Cosan Limited and Cosan Logística S.A. (“Cosan Logística”), or collectively the “Companies”, authorized studies to be carried out on the proposed corporate reorganization to simplify the structure of the economic group.

As part of an effort to streamline its operations, Cosan S.A. carried out a Corporate Reorganization to improve the current corporate structure, making Cosan S.A. the only holding company of the Cosan Group (“Grupo Cosan” refers to the economic entity previously represented by Cosan Limited , Cosan S.A., Cosan Logística and its subsidiaries before the Merger, which, after the Merger, is represented by Cosan S.A. and its subsidiaries, as the context requires). The Operation aimed to simplify the corporate structure of the Cosan Group, unify and consolidate the outstanding shares in the financial market (“free floats”) of the Companies, increase the liquidity of their securities, as well as unlock the value that exists within the Cosan Group and facilitate future fundraising.

As part of the Transaction carried out, Cosan Limited and Cosan Logística were merged into Cosan S.A.. After the completion of the transaction, the outstanding shares of Cosan S.A. were directly held by all shareholders of Cosan Limited, Cosan S.A. and Cosan Logística. As part of the Mergers, Cosan S.A. issued American Depositary Shares (“ADSs”) listed on the New York Stock Exchange (New York Stock Exchange - NYSE) or Cosan S.A. shares listed on B3 S.A. - Brasil, Bolsa, Balcão (“B3”) for the shareholders of Cosan Limited. As for Cosan Logística, the shareholders of Cosan Logística became owners of shares of Cosan S.A.

18

Notes to the interim financial statements

(In thousands of Brazilian Reais - R$, unless otherwise stated)

Simplified operational structure after incorporations.

Respecting the Merger Protocols, subject to the terms and conditions described therein, and after the consummation of all transactions contemplated by them, Cosan Limited and Cosan Logística were merged, ceased to exist and their rights and obligations were transferred to Cosan S.A. as a Company successor.

The administrators of Cosan S.A., Cosan Limited and Cosan Logística evaluated the exchange ratio negotiated and recommended by the committees and stated as follows:

1. The exchange ratio was 0.772788 shares issued by Cosan Limited for each share issued by Cosan S.A, or 1 American Depositary Receipts (“ADRs”) of the Company (each ADR representing a common share of the Company). Thus, as a result of the Merger and in view of the Exchange Ratio, 308,554,969 shares issued by Cosan S.A. were issued former Cosan Limited shareholders; and

2. The exchange ratio was 3.943112 shares issued by Cosan Logística for each share issued by Cosan S.A. Thus, as a result of the Merger and in view of the Exchange Ratio, 31,025,350 shares issued by Cosan S.A. were issued to the former shareholders of Cosan Logística.

19

Notes to the interim financial statements

(In thousands of Brazilian Reais - R$, unless otherwise stated)

On January 22, 2021, the proposed corporate reorganization of the Companies, which consisted of the merger of companies under common control Cosan Limited and Cosan Logística, was approved at the respective extraordinary general meetings of the Companies.

After the approval of the Mergers at the respective Extraordinary Shareholders' Meetings (“AGE”) of the companies, Cosan Logística shareholders were able to exercise the right of withdrawal within 30 days after the AGEs, based on the Valuation Report at Cosan's Market Price Logistics, resulting in R$12.40 per share. On February 22, 2021, the term ended and no shareholder exercised his right of withdrawal.

Also considering the meeting of the Company's Board of Directors held on February 5, 2021, among other matters, the Board decided to cancel 10,000,000 shares issued by the Company that were held in treasury.

The merged and consolidated subsidiaries as of March 1, 2021, generated a profit of R$57,814 in the Company's net income for the month March 2021.

Basis of preparation of reviewed financial information

The balance sheets as of March 1, 2021 are based on the individual and consolidated historical balances of Cosan S.A., Cosan Limited and Cosan Logística, as shown below:

20

Notes to the interim financial statements

(In thousands of Brazilian Reais - R$, unless otherwise stated)

Parent company 

Open Balance (01/03/2021)

		Incorporated companies
	Consolidated Cosan S.A.	Corporate Cosan Limited	Consolidated Cosan Logística	Total incorporated assets	Elimination	Adjustments	Cosan S.A. post-reorganization
Assets					1.2.(a)	1.2.(b)
Cash and cash equivalents	1,099,643	353,595	6	353,601	—	—	1,453,244
Marketable securities	927,011	—	—	—	—	—	927,011
Derivative financial instruments	71,133	—	—	—	—	—	71,133
Receivables from related parties	279,718	54	194	248	(12,481)	—	267,485
Income tax receivable	143,359	3	2,841	2,844	—	—	146,203
Other current tax receivable	35,515	—	4	4	—	—	35,519
Dividends receivable	160,694	148,271	—	148,271	(148,271)	—	160,694
Other financial assets	734,903	—	—	—	—	(734,903)	—
Other current assets	101,221	1,744	—	1,744	—	—	102,965
Total current assets	3,553,197	503,667	3,045	506,712	(160,752)	(734,903)	3,164,254
Deferred tax assets	75,959	—	—	—	—	80,483	156,442
Receivables from related parties	576,929	—	—	—	—	—	576,929
Other non-current tax receivable	37,623	—	—	—	—	—	37,623
Judicial deposits	384,455	—	1,017	1,017	—	—	385,472
Derivative financial instruments	2,758,732	183,426	—	183,426	—	—	2,942,158
Other non-current assets	169,370	—	—	—	—	—	169,370
Investments in associates	13,025,364	8,769,145	4,259,390	13,028,535	(8,761,919)	329,118	17,621,098
Property, plant and equipment	60,457	2,724	—	2,724	—	—	63,181
Intangible assets and goodwill	2,067	—	—	—	—	—	2,067
Right-of-use assets	24,212	8,430	—	8,430	—	—	32,642
Total non-current assets	17,115,168	8,963,725	4,260,407	13,224,132	(8,761,919)	409,601	21,986,982
Total assets	20,668,365	9,467,392	4,263,452	13,730,844	(8,922,671)	(325,302)	25,151,236

21

Notes to the interim financial statements

(In thousands of Brazilian Reais - R$, unless otherwise stated)

		Incorporated companies
	Consolidated Cosan S.A.	Corporate Cosan Limited	Consolidated Cosan Logística	Total incorporated assets	Elimination	Adjustments	Cosan S.A. post-reorganization
Liabilities					1.2.(a)	1.2.(b)
Loans, borrowings and debentures	—	98,397	38,981	137,378	—	—	137,378
Leases	2,785	824	—	824	—	—	3,609
Derivative financial instruments	1,253	—	—	—	—	—	1,253
Trade payables	1,769	207	40	247	—	—	2,016
Employee benefits payables	24,246	—	—	—	—	—	24,246
Income tax payables	614	3	5	8	—	—	622
Other taxes payable	115,593	9	1,251	1,260	—	(11,544)	105,309
Dividends payable	216,929	—	241	241	(148,271)	—	68,899
Payables to related parties	318,535	4,844	407	5,251	(12,483)	—	311,303
Other current liabilities	107,502	7,902	992	8,894	—	—	116,396
Total current liabilities	789,226	112,186	41,917	154,103	(160,754)	(11,544)	771,031
Loans, borrowings and debentures	—	4,124,973	1,719,992	5,844,965	—	—	5,844,965
Leases	24,930	8,887	—	8,887	—	—	33,817
Preferred shareholders payable in subsidiaries	389,585	—	—	—	—	—	389,585
Derivative financial instruments	110,554	—	—	—	—	—	110,554
Other taxes payable	140,978	—	—	—	—	—	140,978
Provision for legal proceedings	309,484	—	—	—	—	—	309,484
Provision for uncovered liability of associates	432,350	—	—	—	—	—	432,350
Payables to related parties	7,499,128	47,771	—	47,771	—	—	7,546,899
Post-employment benefits	155	—	—	—	—	—	155
Other non-current liabilities	288,658	—	—	—	—	—	288,658
Total non-current liabilities	9,195,822	4,181,631	1,719,992	5,901,623	—	—	15,097,445
Total liabilities	9,985,048	4,293,817	1,761,909	6,055,726	(160,754)	(11,544)	15,868,476
Shareholders' equity
Share capital	5,727,478	5,328	2,284,893	2,290,221	(1,651,846)	—	6,365,853
Reserves and other components of equity	4,955,839	5,168,247	216,650	5,384,897	(7,110,071)	(313,758)	2,916,907
	10,683,317	5,173,575	2,501,543	7,675,118	(8,761,917)	(313,758)	9,282,760
Equity attributable to:
Owners of the Company	10,683,317	5,173,575	2,501,543	7,675,118	(8,761,917)	(313,758)	9,282,760
Total shareholders' equity	10,683,317	5,173,575	2,501,543	7,675,118	(8,761,917)	(313,758)	9,282,760
Total shareholders' equity and liabilities	20,668,365	9,467,392	4,263,452	13,730,844	(8,922,671)	(325,302)	25,151,236

22

Notes to the interim financial statements

(In thousands of Brazilian Reais - R$, unless otherwise stated)

Consolidated

Open Balance (01/03/2021)

		Incorporated companies
	Consolidated Cosan S.A.	Corporate Cosan Limited	Consolidated Cosan Logística	Total incorporated assets	Elimination	Adjustments	Cosan S.A. post-reorganization
Assets					1.2.(a)	1.2.(b)
Cash and cash equivalents	4,367,675	356,410	7,769,445	8,125,855	—	—	12,493,530
Marketable securities	1,686,029	327	3,025,185	3,025,512	—	—	4,711,541
Trade receivables	1,639,123	305	617,546	617,851	—	—	2,256,974
Derivative financial instruments	182,922	—	82,191	82,191	—	—	265,113
Inventories	659,485	8	255,042	255,050	—	—	914,535
Receivables from related parties	205,383	36	36,451	36,487	(12,481)	—	229,389
Income tax receivable	169,644	7	98,343	98,350	—	—	267,994
Other current tax receivable	372,525	172	345,539	345,711	—	—	718,236
Dividends receivable	77,561	148,271	6,322	154,593	(148,271)	—	83,883
Sectorial financial assets	216,488	—	—	—	—	—	216,488
Other financial assets	804,256	—	—	—	—	(734,903)	69,353
Other current assets	294,606	1,955	264,994	266,949	—	—	561,555
Total current assets	10,675,697	507,491	12,501,058	13,008,549	(160,752)	(734,903)	22,788,591
Trade receivables	19,476	—	6,303	6,303	—	—	25,779
Restricted cash	—	—	29,835	29,835	—	—	29,835
Deferred tax assets	631,987	33	1,350,121	1,350,154	—	—	1,982,141
Receivables from related parties	207,905	—	94,473	94,473	(47,770)	—	254,608
Income taxes receivable	309	—	40,707	40,707	—	—	41,016
Other non-current tax receivable	168,666	—	782,580	782,580	—	—	951,246
Judicial deposits	551,833	—	328,984	328,984	—	—	880,817
Derivative financial instruments	3,311,933	183,426	2,346,374	2,529,800	—	—	5,841,733
Contract asset	655,680	—	—	—	—	—	655,680
Other non-current assets	235,161	2	57,726	57,728	—	—	292,889
Investments in associates	331,005	8,758,462	49,953	8,808,415	(9,087,580)	329,118	380,958
Investments in joint ventures	7,613,457	—	—	—	—	—	7,613,457
Property, plant and equipment	424,651	4,335	14,032,909	14,037,244	—	—	14,461,895
Intangible assets and goodwill	10,184,202	15,159	7,226,616	7,241,775	—	—	17,425,977
Right-of-use assets	83,664	8,853	7,809,397	7,818,250	—	—	7,901,914
Total non-current assets	24,419,929	8,970,270	34,155,978	43,126,248	(9,135,350)	329,118	58,739,945
Total assets	35,095,626	9,477,761	46,657,036	56,134,797	(9,296,102)	(405,785)	81,528,536

23

Notes to the interim financial statements

(In thousands of Brazilian Reais - R$, unless otherwise stated)

		Incorporated companies
	Consolidated Cosan S.A.	Corporate Cosan Limited	Consolidated Cosan Logística	Total incorporated assets	Elimination	Adjustments	Cosan S.A. post-reorganization
Liabilities					1.2.(a)	1.2.(b)
Loans, borrowings and debentures	842,781	98,420	2,318,462	2,416,882	—	—	3,259,663
Leases	11,867	1,068	510,047	511,115	—	—	522,982
Derivative financial instruments	146,261	—	—	—	—	—	146,261
Trade payables	1,813,517	1,335	566,273	567,608	—	—	2,381,125
Employee benefits payables	214,941	1,782	154,262	156,044	—	—	370,985
Income tax payables	331,264	580	245,826	246,406	—	—	577,670
Other taxes payable	375,996	10	33,092	33,102	—	(11,544)	397,554
Dividends payable	285,209	—	10,267	10,267	(148,271)	—	147,205
Concessions payable	—	—	159,330	159,330	—	—	159,330
Payables to related parties	304,021	5,786	188,971	194,757	(12,483)	—	486,295
Sectorial financial liabilities	93,244	—	—	—	—	—	93,244
Other financial liabilities	120,247	—	361,494	361,494	—	—	481,741
Other current liabilities	229,603	9,289	298,692	307,981	—	—	537,584
Total current liabilities	4,768,951	118,270	4,846,716	4,964,986	(160,754)	(11,544)	9,561,639
Loans, borrowings and debentures	14,091,982	4,125,001	20,275,636	24,400,637	—	—	38,492,619
Leases	67,882	9,097	2,430,749	2,439,846	—	—	2,507,728
Preferred shareholders payable in subsidiaries	389,585	—	—	—	—	—	389,585
Derivative financial instruments	110,554	—	—	—	—	—	110,554
Other taxes payable	146,539	—	2,112	2,112	—	—	148,651
Provision for legal proceedings	890,189	—	497,574	497,574	—	—	1,387,763
Concessions payable	—	—	2,849,861	2,849,861	—	—	2,849,861
Payables to related parties	—	47,771	—	47,771	(47,771)	—	—
Post-employment benefits	733,047	—	57	57	—	—	733,104
Deferred tax liabilities	1,326,171	—	1,988,261	1,988,261	—	(80,483)	3,233,949
Sectorial financial liabilities	499,016	—	—	—	—	—	499,016
Deferred revenue	—	—	42,100	42,100	—	—	42,100
Other non-current liabilities	694,781	—	64,680	64,680	—	—	759,461
Total non-current liabilities	18,949,746	4,181,869	28,151,030	32,332,899	(47,771)	(80,483)	51,154,391
Total liabilities	23,718,697	4,300,139	32,997,746	37,297,885	(208,525)	(92,027)	60,716,030
Shareholders' equity
Share capital	5,727,478	5,328	2,284,893	2,290,221	(1,651,846)	—	6,365,853
Reserves and other components of equity	4,955,839	5,168,247	216,650	5,384,897	(7,110,071)	(313,758)	2,916,907
	10,683,317	5,173,575	2,501,543	7,675,118	(8,761,917)	(313,758)	9,282,760
Equity attributable to:
Owners of the Company	10,683,317	5,173,575	2,501,543	7,675,118	(8,761,917)	(313,758)	9,282,760
Non-controlling interests	693,612	4,047	11,157,747	11,161,794	(325,660)	—	11,529,746
Total shareholders' equity	11,376,929	5,177,622	13,659,290	18,836,912	(9,087,577)	(313,758)	20,812,506
Total shareholders' equity and liabilities	35,095,626	9,477,761	46,657,036	56,134,797	(9,296,102)	(405,785)	81,528,536

24

Notes to the interim financial statements

(In thousands of Brazilian Reais - R$, unless otherwise stated)

Adjustments and assumptions used

The financial information was prepared and presented based on the individual and consolidated balances and the adjustments were determined following Management's assumptions and best estimates that include the following adjustments: 

1.2.(a) Elimination

The consummate operation was an intra-group reorganization, in which: (1) it involved only entities that are under common control; and (2) all the entities involved were already presented at Cosan Limited on a consolidated basis. As a result, the investment balances that Cosan Limited held in Cosan logistics and Cosan S.A. were eliminated, as well as the effects of transactions between related parties.

1.2.(b) Adjustment of other financial assets

Cosan S.A. owned 40,065,607 shares of Rumo S.A., representing 2.16% of its shareholders 'equity, and 477,196 shares of Cosan Logística, representing 0.10% of its shareholders' equity. These shares were recorded in the balance sheet as a financial asset, being measured at fair value through profit or loss, as Management considered trading these shares.

With the corporate reorganization, the financial asset, as well as its applicable taxes, was derecognized for R$734,903 and, consequently, an investment in subsidiary of R$329,118 was recorded. Additionally, the amount of R$313,758 was recognized in equity.

25

Notes to the interim financial statements

(In thousands of Brazilian Reais - R$, unless otherwise stated)

2  Statement of compliance

These individual and consolidated interim financial statements have been prepared and are being presented in accordance with technical pronouncement CPC 21 (R1) - Interim Financial Statements and with international standards IAS 34 - Interim Financial Reporting, issued by the International Accounting Standards Board (IASB), and also based on the provisions contained in the Brazilian Corporation Law, and presented in a manner consistent with the rules issued by the Brazilian Securities and Exchange Commission, applicable to the preparation of quarterly information - ITR.

The presentation of the Statements of Value Added (DVA), individual and consolidated, is required by Brazilian corporate law and the accounting practices adopted in Brazil applicable to publicly-held companies CPC 09 - Statement of Added Value. IFRS standards do not require the presentation of this statement. As a consequence, under IFRS, this statement is presented as supplementary information, without prejudice to the set of interim financial statements.

Except for information from the merged companies, these interim financial statements were prepared following the basis of preparation and accounting policies consistent with those adopted in the preparation of the financial statements of December 31, 2020 and should be read together.

The information in the explanatory notes that have not undergone any significant changes compared to December 31, 2020 has not been fully presented in this quarterly information.

The relevant information proper to the interim financial statements, and only them, are being disclosed and that correspond to those used by Management in its management.

These interim financial statements were authorized for issue by Management on May 14, 2021.

26

Notes to the interim financial statements

(In thousands of Brazilian Reais - R$, unless otherwise stated)

3  Accounting policies

These interim financial statements were prepared following the basis of preparation and accounting policies consistent with those adopted in the preparation of the financial statements of December 31, 2020, except for the statements described in the respective notes from the companies incorporated in the corporate reorganization, as per note 1.2. All balances have been rounded to the nearest thousand, except where otherwise indicated.

 4  Segment information

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

Reported segments:

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

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

27

Notes to the interim financial statements

(In thousands of Brazilian Reais - R$, unless otherwise stated)

3. Gas and Energy: its main activities are: (i) distribution of piped natural gas in part of the State of São Paulo to customers in the industrial, residential, commercial, automotive and cogeneration sectors; and (ii) the sale of electricity, comprising the purchase and sale of electricity to other traders, to consumers who have a free choice of supplier and to other agents permitted by law, other investments in the development process and corporate activities, including TRSP - LNG Regasification Terminal of São Paulo S.A. (“TRSP”), Rota 4 Participações S.A. (“Rota 4”) and Edge II - Empresa de Geração de Energia S.A..

4. Moove: production and distribution of lubricants under the Mobil brand in Brazil, Argentina, Bolivia, Uruguay, Paraguay, the United States of America and Europe, as well as in the European and Asian markets under the “Comma” trademark and corporate activities;

5. Logistics: logistics services for rail transportation, storage and port loading of commodities, mainly for grains and sugar, leasing of locomotives, wagons and another railroad equipment; and

Reconciliation:

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

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

28

Notes to the interim financial statements

(In thousands of Brazilian Reais - R$, unless otherwise stated)

	March 31, 2021
	Reported segments						Reconciliation			Consolidated
	Raízen Energia	Raízen Combustíveis		Gas and Energy	Moove	Logistics (ii)	Cosan Corporate	Deconsolidated effects	Segment elimination
		Brazil	Argentina
Statement of profit or loss:
Gross sales	9,909,774	23,919,738	5,243,764	3,207,371	1,783,529	828,461	377	(39,073,276)	(4,083)	5,815,655
Domestic market (i)	5,050,364	23,919,738	5,243,764	3,207,371	1,627,996	828,461	377	(34,213,866)	(4,083)	5,660,122
External market (i)	4,859,410	—	—	—	155,533	—	—	(4,859,410)	—	155,533
Net sales	9,424,596	22,945,322	3,541,760	2,516,622	1,417,556	785,351	353	(35,911,678)	(4,083)	4,715,799
Cost of sales	(8,655,960)	(21,935,380)	(3,027,334)	(1,817,781)	(1,083,803)	(471,989)	(377)	33,618,674	4,083	(3,369,867)
Gross profit	768,636	1,009,942	514,426	698,841	333,753	313,362	(24)	(2,293,004)	—	1,345,932
Selling expenses	(262,598)	(344,589)	(247,121)	(26,173)	(128,739)	(3,052)	(691)	854,308	—	(158,655)
General and administrative expenses	(165,706)	(137,025)	(56,139)	(225,586)	(56,036)	(31,412)	(50,574)	358,870	—	(363,608)
Other income (expenses), net	113,048	61,219	32,677	(6,167)	12,928	(10,782)	(24,905)	(206,944)	—	(28,926)
Interest in earnings of associates	—	91,527	—	—	—	130	524,629	(91,527)	(525,953)	(1,194)
Interest in earnings of joint ventures	10,382	(8,393)	—	—	—	—	254,801	(1,989)	—	254,801
Finance results, net	(240,798)	(201,154)	(99,329)	(59,806)	(51,423)	(175,677)	(95,005)	541,281	—	(381,911)
Finance expense	(78,574)	57,448	(18,135)	(145,108)	(7,612)	(444)	(18,653)	39,261	—	(171,817)
Finance income	81,136	52,822	39,601	149,922	2,836	19,474	18,919	(173,559)	—	191,151
Foreign exchange, net	(234,400)	(811,895)	(82,553)	(83,347)	(58,589)	(164,859)	(684,664)	1,128,848	—	(991,459)
Derivatives	(8,960)	500,471	(38,242)	18,727	11,942	(29,848)	589,393	(453,269)	—	590,214
Income tax (expense)benefit	(46,216)	(125,978)	(52,987)	90,030	(43,557)	(34,755)	30,106	225,181	—	41,824
Profit (loss) for the period	176,748	345,549	91,527	471,139	66,926	57,814	638,337	(613,824)	(525,953)	708,263
Profit (loss) attributable to:
Owners of the Company	181,822	331,233	91,527	462,399	46,487	17,067	638,807	(604,582)	(525,953)	638,807
Non-controlling interests	(5,074)	14,316	—	8,740	20,439	40,747	(470)	(9,242)	—	69,456
	176,748	345,549	91,527	471,139	66,926	57,814	638,337	(613,824)	(525,953)	708,263
Other select data
Depreciation and amortization	1,083,642	82,247	164,221	137,040	26,049	145,248	2,972	(1,330,110)	2	311,311
EBITDA	1,547,404	754,928	408,064	577,955	187,955	413,494	706,208	(2,710,396)	(525,951)	1,359,661
Additions to PP&E, intangible and contract assets	1,257,312	54,332	147,579	231,244	6,579	229,235	742	(1,459,223)	—	467,800
Reconciliation of EBITDA
Profit (loss) for the period	176,748	345,549	91,527	471,139	66,926	57,814	638,337	(613,824)	(525,953)	708,263
Income tax and (expense) benefit	46,216	125,978	52,987	(90,030)	43,557	34,755	(30,106)	(225,181)	—	(41,824)
Finance results, net	240,798	201,154	99,329	59,806	51,423	175,677	95,005	(541,281)	—	381,911
Depreciation and amortization	1,083,642	82,247	164,221	137,040	26,049	145,248	2,972	(1,330,110)	2	311,311
EBITDA	1,547,404	754,928	408,064	577,955	187,955	413,494	706,208	(2,710,396)	(525,951)	1,359,661

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

(ii)The results of the Logistics segment were consolidated as of March 1, 2021 as a result of the corporate reorganization, as detailed in Note 1.2.

29

Notes to the interim financial statements

(In thousands of Brazilian Reais - R$, unless otherwise stated)

	March 31, 2020
	Reported segments					Reconciliation			Consolidated
	Raízen Energia	Raízen Combustíveis		Gas and Energy	Moove	Cosan Corporate	Deconsolidated effects	Segment elimination
		Brazil	Argentina
Statement of profit or loss:
Gross sales	9,455,018	21,610,931	4,187,768	3,098,875	1,313,842	—	(35,253,717)	—	4,412,717
Domestic market (i)	4,910,943	21,610,931	4,187,768	3,098,875	1,260,713	—	(30,709,642)	—	4,359,588
External market (i)	4,544,075	—	—	—	53,129	—	(4,544,075)	—	53,129
Net sales	8,995,333	20,537,673	2,986,452	2,475,345	1,031,167	—	(32,519,458)	—	3,506,512
Cost of sales	(8,179,782)	(19,744,529)	(2,732,934)	(1,680,462)	(804,738)	(1,177)	30,657,245	—	(2,486,377)
Gross profit	815,551	793,144	253,518	794,883	226,429	(1,177)	(1,862,213)	—	1,020,135
Selling expenses	(209,245)	(368,841)	(190,759)	(158,828)	(119,623)	(945)	768,845	—	(279,396)
General and administrative expenses	(144,462)	(127,058)	(37,248)	(85,668)	(46,670)	(38,887)	308,768	—	(171,225)
Other income (expenses), net	269,821	113,046	24,485	10,688	28,341	(74,983)	(407,352)	—	(35,954)
Interest in earnings of associates	—	(13,310)	—	4	—	398,298	13,310	(397,482)	820
Interest in earnings of joint ventures	(4,338)	449	—	—	—	191,344	3,889	—	191,344
Finance results, net	(336,010)	(165,145)	(51,673)	(595)	(39,040)	(583,562)	552,828	—	(623,197)
Finance expense	(228,080)	(278,501)	(23,775)	(89,481)	(8,112)	(650,427)	530,356	—	(748,020)
Finance income	97,332	75,158	7,491	206,133	9,987	49,529	(179,981)	—	265,649
Foreign exchange, net	(608,211)	(2,879,339)	(30,724)	(151,280)	(74,013)	(1,312,732)	3,518,274	—	(1,538,025)
Derivatives	402,949	2,917,537	(4,665)	34,033	33,098	1,330,068	(3,315,821)	—	1,397,199
Income tax (expense)benefit	(109,232)	(96,560)	(11,633)	(182,896)	(13,612)	210,686	217,425	—	14,178
Profit (loss) for the period	282,085	135,725	(13,310)	377,588	35,825	100,774	(404,500)	(397,482)	116,705
Profit (loss) attributable to:
Owners of the Company	244,384	137,284	(13,310)	372,196	25,286	102,250	(368,358)	(397,482)	102,250
Non-controlling interests	37,701	(1,559)	—	5,392	10,539	(1,476)	(36,142)	—	14,455
	282,085	135,725	(13,310)	377,588	35,825	100,774	(404,500)	(397,482)	116,705
Other select data
Depreciation and amortization	1,197,519	78,221	142,584	116,762	23,468	3,290	(1,418,324)	—	143,520
EBITDA	1,924,846	475,651	192,580	677,841	111,945	476,940	(2,593,077)	(397,482)	869,244
Additions to PP&E, intangible and contract assets	1,068,310	74,922	87,372	250,758	3,140	4,747	(1,230,604)	—	258,645
Reconciliation of EBITDA
Profit (loss) for the period	282,085	135,725	(13,310)	377,588	35,825	100,774	(404,500)	(397,482)	116,705
Income tax and (expense) benefit	109,232	96,560	11,633	182,896	13,612	(210,686)	(217,425)	—	(14,178)
Finance results, net	336,010	165,145	51,673	595	39,040	583,562	(552,828)	—	623,197
Depreciation and amortization	1,197,519	78,221	142,584	116,762	23,468	3,290	(1,418,324)	—	143,520
EBITDA	1,924,846	475,651	192,580	677,841	111,945	476,940	(2,593,077)	(397,482)	869,244

30

Notes to the interim financial statements

(In thousands of Brazilian Reais - R$, unless otherwise stated)

	March 31, 2021
	Reported segments						Reconciliation			Consolidated
	Raízen Energia	Raízen Combustíveis		Gas and Energy	Moove	Logistics	Cosan Corporate	Deconsolidated effects	Segment elimination
		Brazil	Argentina
Statement of financial position:
Cash and cash equivalents	4,042,966	2,011,708	593,072	1,424,003	900,064	3,724,605	1,884,498	(6,647,746)	—	7,933,170
Marketable securities	—	—	—	788,702	186,220	1,746,047	1,014,690	—	—	3,735,659
Trade receivables	1,421,788	2,230,966	580,390	1,073,911	615,839	620,870	782	(4,233,144)	—	2,311,402
Derivative financial instruments	4,814,134	3,381,132	—	526,832	30,973	2,383,630	3,291,170	(8,195,266)	—	6,232,605
Inventories	1,227,966	2,904,582	1,498,494	126,141	578,053	257,774	7	(5,631,042)	—	961,975
Sectorial financial assets	—	—	—	184,105	—	—	—	—	—	184,105
Other financial assets	154,940	—	—	—	69,381	—	—	(154,940)	—	69,381
Other current assets	5,218,462	3,188,185	736,231	250,143	190,841	591,686	1,002,862	(9,142,878)	(504,703)	1,530,829
Other non-current assets	5,758,948	2,199,360	51,234	174,664	303,242	2,878,845	1,905,722	(8,009,542)	(463,278)	4,799,195
Investments in associates	—	3,713,879	390	(1)	—	50,082	9,956,732	(3,714,269)	(9,624,173)	382,640
Investments in joint ventures	560,064	757,228	—	—	—	—	8,145,564	(1,317,292)	—	8,145,564
Biological assets	1,353,186	—	—	—	—	—	—	(1,353,186)	—	—
Derivative financial instruments	—	2,768,998	117,434	589,634	12,459	—	—	(2,886,432)	—	602,093
Right-of-use assets	5,233,892	81,424	430,312	19,119	45,585	7,787,692	32,911	(5,745,628)	—	7,885,307
Property, plant and equipment	12,640,458	2,495,398	4,327,190	21,439	334,271	14,247,292	77,226	(19,463,046)	—	14,680,228
Intangible assets and goodwill	3,596,404	2,471,303	40,239	8,946,407	1,315,639	7,214,055	27,068	(6,107,946)	—	17,503,169
Loans, borrowings and debentures	(16,849,614)	(6,728,597)	(856,567)	(6,185,908)	(847,762)	(15,594,719)	(13,947,645)	24,434,778	—	(36,576,034)
Derivative financial instruments	(5,906,602)	(154,953)	(19,597)	(225,301)	—	—	(115,168)	6,081,152	—	(340,469)
Trade payables	(4,253,194)	(5,646,695)	(1,011,285)	(1,127,985)	(683,358)	(496,192)	(2,436)	10,911,174	—	(2,309,971)
Employee benefits payable	(478,168)	(93,398)	(84,356)	(48,450)	(64,243)	(133,822)	(16,003)	655,922	—	(262,518)
Sectorial financial liabilities	—	—	—	(603,510)	—	—	—	—	—	(603,510)
Other current liabilities	(2,089,192)	(3,727,929)	(1,524,233)	(385,124)	(244,394)	(996,903)	(502,583)	7,341,354	41,068	(2,087,936)
Preferred shareholders payable in subsidiaries	—	—	—	—	—	—	(391,187)	—	—	(391,187)
Leases	(4,588,316)	(95,631)	(391,249)	(9,767)	(47,754)	(2,991,574)	(38,095)	5,075,196	—	(3,087,190)
Other non-current liabilities	(2,189,300)	(4,699,358)	(773,430)	(1,921,606)	(576,807)	(5,841,934)	(2,245,717)	7,662,088	926,909	(9,659,155)
Total assets (net of liabilities) allocated by segment	9,668,822	7,057,602	3,714,269	3,617,448	2,118,249	15,447,434	10,080,398	(20,440,693)	(9,624,177)	21,639,352
Total assets	46,023,208	28,204,163	8,374,986	14,125,099	4,582,567	41,502,578	27,339,232	(82,602,357)	(10,592,154)	76,957,322
Shareholders' equity attributable to:
Equity attributable to owners of the Company	9,578,833	6,777,863	3,714,269	3,554,347	1,473,416	4,596,413	10,070,893	(20,070,965)	(9,624,177)	10,070,892
Non-controlling interests	89,989	279,739	—	63,101	644,833	10,851,021	9,505	(369,728)	—	11,568,460
Total shareholders' equity	9,668,822	7,057,602	3,714,269	3,617,448	2,118,249	15,447,434	10,080,398	(20,440,693)	(9,624,177)	21,639,352

31

Notes to the interim financial statements

(In thousands of Brazilian Reais - R$, unless otherwise stated)

	December 31, 2020
	Reported segments					Reconciliation			Consolidated
	Raízen Energia	Raízen Combustíveis		Gas and Energy	Moove	Cosan Corporate	Deconsolidated effects	Segment elimination
		Brazil	Argentina
Statement of financial position:
Cash and cash equivalents	2,293,506	752,369	396,039	1,899,533	936,345	1,778,175	(3,441,914)	—	4,614,053
Marketable securities	—	—	—	1,188,625	168,066	914,879	—	—	2,271,570
Trade receivables	1,835,656	2,070,824	358,816	1,121,612	483,227	—	(4,265,296)	—	1,604,839
Derivative financial instruments	4,904,580	2,835,980	—	517,181	28,463	2,581,774	(7,740,560)	—	3,127,418
Inventories	3,975,086	3,068,435	1,274,045	121,064	564,836	—	(8,317,566)	—	685,900
Sectorial financial assets	—	—	—	241,749	—	—	—	—	241,749
Other financial assets	160,600	—	—	—	69,126	779,695	(160,600)	—	848,821
Other current assets	4,862,274	3,003,780	769,740	276,139	146,166	1,211,108	(8,635,794)	(601,024)	1,032,389
Other non-current assets	5,374,084	2,247,516	61,018	169,905	398,796	1,566,400	(7,682,618)	(365,383)	1,769,718
Investments in associates	—	3,299,738	356	—	—	4,989,472	(3,300,094)	(4,655,767)	333,705
Investments in joint ventures	536,540	769,252	—	—	—	7,988,208	(1,305,792)	—	7,988,208
Biological assets	1,073,582	—	—	—	—	—	(1,073,582)	—	—
Derivative financial instruments	—	2,764,818	95,840	686,690	9,248	—	(2,860,658)	—	695,938
Right-of-use assets	4,698,238	86,737	425,391	19,865	39,550	24,809	(5,210,366)	—	84,224
Property, plant and equipment	11,667,442	2,544,094	3,953,982	15,326	327,535	74,135	(18,165,518)	—	416,996
Intangible assets and goodwill	3,599,864	2,479,947	9,221	8,769,986	1,268,095	7,215	(6,089,032)	—	10,045,296
Loans, borrowings and debentures	(17,516,886)	(6,258,929)	(781,703)	(7,043,909)	(802,938)	(7,580,380)	24,557,518	—	(15,427,227)
Derivative financial instruments	(4,502,866)	(246,237)	(15,155)	(286,018)	(348)	(131,461)	4,764,258	—	(417,827)
Trade payables	(3,244,436)	(5,203,174)	(863,672)	(1,182,111)	(688,139)	(4,942)	9,311,282	—	(1,875,192)
Employee benefits payable	(383,114)	(85,993)	(65,269)	(74,543)	(96,192)	(25,146)	534,376	—	(195,881)
Sectorial financial liabilities	—	—	—	(565,911)	—	—	—	—	(565,911)
Other current liabilities	(3,014,286)	(2,729,837)	(1,186,505)	(662,779)	(290,827)	(673,340)	6,930,628	40,998	(1,585,948)
Preferred shareholders payable in subsidiaries	—	—	—	—	—	(387,044)	—	—	(387,044)
Leases	(4,246,196)	(101,500)	(387,074)	(10,320)	(41,299)	(28,144)	4,734,770	—	(79,763)
Other non-current liabilities	(2,015,788)	(4,942,688)	(744,976)	(1,856,161)	(554,141)	(2,235,324)	7,703,452	925,409	(3,720,217)
Total assets (net of liabilities) allocated by segment	10,057,880	6,355,132	3,300,094	3,345,923	1,965,569	10,850,089	(19,713,106)	(4,655,767)	11,505,814
Total assets	44,981,452	25,923,490	7,344,448	15,027,675	4,439,453	21,915,870	(78,249,390)	(5,622,174)	35,760,824
Shareholders' equity attributable to:
Equity attributable to owners of the Company	9,967,891	6,075,393	3,300,094	3,288,315	1,367,157	10,847,666	(19,343,378)	(4,655,473)	10,847,665
Non-controlling interests	89,989	279,739	—	57,608	598,412	2,423	(369,728)	(294)	658,149
Total shareholders' equity	10,057,880	6,355,132	3,300,094	3,345,923	1,965,569	10,850,089	(19,713,106)	(4,655,767)	11,505,814

32

Notes to the interim financial statements

(In thousands of Brazilian Reais - R$, unless otherwise stated)

4.1  Net sales by segment

	March 31, 2021	December 31, 2020
Reported segment
Raízen Energia
Ethanol	3,735,930	3,669,801
Sugar	3,437,927	2,302,881
Gas	587,717	824,047
Diesel	1,025,346	1,512,534
Cogeneration	494,691	667,281
Other	142,985	18,789
	9,424,596	8,995,333
Raízen Combustíveis
Fuels	26,030,763	23,240,477
Other	456,319	283,648
	26,487,082	23,524,125
Gas and Energy
Natural gas
Industrial	1,508,875	1,487,813
Residential	294,334	311,140
Cogeneration	140,769	94,195
Automotive	59,859	76,296
Commercial	89,890	126,311
Construction revenue	179,282	197,221
Other	24,403	13,594
	2,297,412	2,306,570
Electricity trading	219,210	168,775
Moove
Finished goods	1,257,545	953,350
Basic oil	128,952	51,394
Services	31,059	26,423
	1,417,556	1,031,167
Logistics
North operations	589,227	—
South operations	169,880	—
Container operations	26,244	—
	785,351	—
Reconciliation
Cosan Corporate	353	—
Deconsolidated effects and eliminations	(35,915,761)	(32,519,458)
Total	4,715,799	3,506,512

33

Notes to the interim financial statements

(In thousands of Brazilian Reais - R$, unless otherwise stated)

5  Financial assets and liabilities

Financial assets and liabilities are as following:

		Parent Company		Consolidated
	Note	March 31, 2021	December 31, 2020	March 31, 2021	December 31, 2020
Assets
Fair value through profit or loss
Cash and cash equivalents	5.1	704,884	1,148,860	1,509,462	2,154,257
Marketable securities	5.2	844,191	788,965	3,735,659	2,271,570
Other financial assets	5.4	—	779,695	69,381	848,821
Derivate financial instruments	5.10	3,176,571	2,457,604	6,232,605	3,127,418
		4,725,646	5,175,124	11,547,107	8,402,066
Amortized cost
Cash and cash equivalents	5.1	544,783	407	6,423,708	2,459,796
Trade receivables	5.3	—	—	2,311,402	1,604,839
Receivables from related parties	5.5	706,837	760,342	377,466	271,766
Sector financial assets	5.9	—	—	184,105	241,749
Dividends receivable		177,032	160,694	102,592	77,561
		1,428,652	921,443	9,399,273	4,655,711
Total		6,154,298	6,096,567	20,946,380	13,057,777
	Note	March 31, 2021	December 31, 2020	March 31, 2021	December 31, 2020
Liabilities
Amortized cost
Loans, borrowings and debentures	5.6	(1,761,793)	—	(17,224,203)	(8,590,199)
Trade payables	5.7	(1,323)	(4,066)	(2,309,971)	(1,875,192)
Other financial liabilities		—	—	(509,656)	(149,293)
Lease liabilities	5.8	(37,614)	(28,145)	(3,087,190)	(79,763)
Installment Leases and concessions under	11	—	—	(3,015,484)	—
Payables to related parties	5.5	(7,939,597)	(7,374,879)	(366,835)	(150,484)
Preferred shareholders payable in subsidiaries		(391,187)	(387,044)	(391,187)	(387,044)
Dividends payable		(68,899)	(216,929)	(147,214)	(285,177)
Sector financial liabilities	5.9	—	—	(603,510)	(565,911)
Tax installments - REFIS	12	(193,108)	(193,353)	(201,885)	(199,586)
		(10,393,521)	(8,204,416)	(27,857,135)	(12,282,649)
Fair value through profit or loss
Loans, borrowings and debentures	5.6	(4,254,085)	—	(19,351,831)	(6,837,028)
Consideration payable		—	—	(218,115)	(224,787)
Derivative financial instruments	5.10	(115,168)	(131,462)	(340,469)	(417,827)
		(4,369,253)	(131,462)	(19,910,415)	(7,479,642)
Total		(14,762,774)	(8,335,878)	(47,767,550)	(19,762,291)

34

Notes to the interim financial statements

(In thousands of Brazilian Reais - R$, unless otherwise stated)

5.1 Cash and cash equivalents

	Parent Company		Consolidated
	March 31, 2021	December 31, 2020	March 31, 2021	December 31, 2020
Cash and bank accounts	544,621	255	685,467	75,160
Savings account	—	—	1,066,876	986,379
Financial investments	705,046	1,149,012	6,180,827	3,552,514
	1,249,667	1,149,267	7,933,170	4,614,053

Financial investments include the following:

	Parent company		Consolidated
	March 31, 2021	December 31, 2020	March 31, 2021	December 31, 2020
Investment fund
Repurchase agreements	545,619	856,078	1,234,537	1,671,802
Bank certificate of deposits - CDB	159,265	292,782	261,377	474,910
Other	—	—	13,548	7,545
	704,884	1,148,860	1,509,462	2,154,257
Bank investments
Repurchase agreements	—	—	54,397	1,293,833
Bank certificate of deposits - CDB	—	—	4,500,543	104,272
Other	162	152	116,425	152
	162	152	4,671,365	1,398,257
	705,046	1,149,012	6,180,827	3,552,514

The Company’s onshore financial investments are remunerated at rates around 100% of the Brazilian interbank offering rate (Certificado de Depósito Interbancário), or “CDI,” on March 31, 2021 (97% of CDI on December 31, 2020) and offshore financial investments are remunerated at rates around 100% of Fed funds. The sensitivity analysis on interest rate risks is in note 5.12.

35

Notes to the interim financial statements

(In thousands of Brazilian Reais - R$, unless otherwise stated)

5.2 Marketable securities and restricted cash

Accounting policy

Restricted cash are measured and classified at amortized cost, both of them with the average maturity of government bonds between two and five years, however they can be promptly redeemed and are subject to an insignificant risk of change in value.

	Parent company		Consolidated
	March 31, 2021	December 31, 2020	March 31,  2021	December 31, 2020
Marketable securities
Government security (i)	844,191	788,965	3,730,333	2,271,570
Bank certificate of deposit - CDB	—	—	5,326	—
	844,191	788,965	3,735,659	2,271,570
Restricted cash
Securities pledged as collateral	30,012	—	59,872	—
	30,012	—	59,872	—

(i)Government securities have stated interest connected to Special System for Settlement and Custody (Sistema Especial de Liquidação e de Custódia), or “SELIC”, with a return of approximately 100% of the CDI.

5.3 Trade receivables

	Consolidated
	March 31, 2021	December 31, 2020
Domestic – Local currency	2,357,843	1,717,683
Export – Foreign currency	81,750	17,502
	2,439,593	1,735,185
Expected credit losses	(128,191)	(130,346)
	2,311,402	1,604,839
Current	2,285,407	1,585,708
Non-current	25,995	19,131
	2,311,402	1,604,839

36

Notes to the interim financial statements

(In thousands of Brazilian Reais - R$, unless otherwise stated)

5.4 Other financial assets

The balance of other financial assets is composed as following:

	Parent Company		Consolidated
	March 31, 2021	December 31, 2020	March 31, 2021	December 31, 2020
Rumo S.A. Shares (i)	—	770,862	—	770,862
Cosan Logística S.A. Shares (i)	—	8,833	—	8,833
Other financial assets (ii)	—	—	69,381	69,126
	—	779,695	69,381	848,821
Current	—	779,695	69,381	848,821
	—	779,695	69,381	848,821

(i)	Through the corporate reorganization detailed in note 1.2, the registered value of the shares started to be classified as investments.
(ii)	On March 31, 2020, Cosan Lubes Investments Limited (“CLI”) received R$65,478 due to the satisfaction of the conditions precedent on December 31, 2019, as provided for in the investment agreement between the Company and CVC Fund VII (“CVC”). On April 15, 2021, the updated amount of R$ 68,876 was liquidated.

37

Notes to the interim financial statements

(In thousands of Brazilian Reais - R$, unless otherwise stated)

5.5 Related parties

a)Summary of balances to related parties

	Parent Company		Consolidated
	March 31, 2021	December 31, 2020	March 31, 2021	December 31, 2020
Current asset
Commercial operations
Raízen Energia S.A. (i)	13,833	23,274	45,213	29,485
Rumo S.A	1,330	4,289	—	8,388
Aguassanta Participações S.A.	947	837	947	837
Cosan Lubrificantes e Especialidades (ii)	12,149	219,613	—	—
Compass Gás e Energia	3,562	3,732	—	—
Payly Soluções e Pagamentos S.A	1,747	2,390	—	—
Raízen Combustíveis S.A. (i)	1,953	644	9,134	1,448
Termag - Terminal Marítimo de Guarujá S.A.	—	—	14,286	—
Other	1,780	9,190	694	8,601
	37,301	263,969	70,274	48,759
Financial operations
Raízen Energia S.A. (i)	22,245	21,141	22,245	21,141
Cosan Lubrificantes e Especialidades	69,436	—	—	—
Raízen Combustíveis S.A.	1,883	1,883	1,883	1,883
	93,564	23,024	24,128	23,024
Total current assets	130,865	286,993	94,402	71,783
Non-current assets
Commercial operations
Raízen Combustíveis S.A. (i)	—	—	47,731	—
Termag - Terminal Marítimo de Guarujá S.A.	—	—	75,000	—
	—	—	122,731	—
Preferred shares
Janus Brasil Participações S.A	4,959	—	4,959	—
Raízen Combustíveis S.A. (i)	—	—	199	—
	4,959	—	5,158	—
Corporate / financial operations
Raízen Energia S.A.	155,175	155,175	155,175	155,175
Other	—	—	—	44,808
Cosan Lubrificantes e Especialidades (ii)	415,838	318,174	—	—
	571,013	473,349	155,175	199,983
Total non-current assets	575,972	473,349	283,064	199,983
Total assets	706,837	760,342	377,466	271,766

38

Notes to the interim financial statements

(In thousands of Brazilian Reais - R$, unless otherwise stated)

	Parent Company		Consolidated
	March 31, 2021	December 31, 2020	March 31, 2021	December 31, 2020
Current liabilities
Commercial operations
Raízen Energia S.A. (i)	30,934	30,447	58,125	42,709
Raízen Combustíveis S.A. (i)	—	—	206,382	—
Rumo S.A	387	571	—	704
Cosan Lubrificantes e Especialidades (ii)	533	8,059	—	—
Other	5,041	258	933	53
	36,895	39,335	265,440	43,466
Corporate / financial operations
Raízen Combustíveis S.A. (i)	14,693	11,386	14,693	11,387
Cosan Overseas Limited (iii)	36,814	33,579	—	—
Cosan Luxembourg S.A. (iii)	23,275	103,643	—	—
Raízen Energia S.A.	81,978	90,797	86,561	95,631
Shell Brazil Holding B.V.	—	—	141	—
	156,760	239,405	101,395	107,018
Total current liabilities	193,655	278,740	366,835	150,484
Non-current liabilities
Corporate / financial operations
Cosan Lubrificantes e Especialidades (ii)	877,012	875,690	—	—
Cosan Luxembourg S.A. (iii)	3,951,078	3,603,911	—	—
Aldwich	49,261	—	—	—
Cosan Overseas Limited (iii)	2,868,591	2,616,538	—	—
Total non-current liabilities	7,745,942	7,096,139	—	—
Total liabilities	7,939,597	7,374,879	366,835	150,484

(i)	Current and non-current assets receivable from RaízenEnergia and RaízenCombustíveis are, primarily, tax credits which will be reimbursed to the Company when realized. The preferred shares are used to Raízen reimburse Cosan, with preferential dividends, when the net operating loss is consumed in Raízen.
	Current liabilities represent amounts owed to RaízenEnergia and RaízenCombustíveis related to expenses regarding legal disputes and other liabilities, generated before the formation of joint ventures, which are responsibility of Cosan S.A..
(ii)	On December 31, 2018, a contract for the assumption of rights and obligations between the Company and the subsidiary CLE was signed and assets and liabilities related to the fuel business were transferred from the acquisition of EssoBrasileira de PetróleoLtda. (“Esso”) in 2008, which were not contributed to the formation of Raízen, a fact that generated an increase in the active and passive accounts of related parties of the Company in that year and which has been moved as the transactions are settled. This transfer of assets and liabilities does not impact the consolidated position of Company. nor the information by segment.

39

Notes to the interim financial statements

(In thousands of Brazilian Reais - R$, unless otherwise stated)

(iii) These operations serve as a vehicle for the transfer of resources from the Company to the subsidiaries, which are the bondholders and who are responsible for honoring their obligations. The increases observed in these liability balances refer to the exchange rate variation, which affected the PPE (Export Prepayment) operations that we have today between the Companies and the subsidiaries Cosan Luxemburgo S.A and Cosan Overseas Limited.

b)Related party transactions

	Parent Company		Consolidated
	March 31, 2021	March 31, 2020	March 31, 2021	March 31, 2020
Revenue
Rumo S.A (i)	—	—	10,636	7,662
Raízen Energia S.A.	—	—	14,030	5,725
Raízen Combustíveis S.A	—	—	8,945	10,046
Shell Energy do Brasil Ltda.	—	—	7,934	—
	—	—	41,545	23,433
Purchase of goods / inputs / services
Raízen Energia S.A.	—	—	(13,332)	—
Raízen Combustíveis S.A	—	—	(823)	—
Other	—	—	—	(14)
	—	—	(14,155)	(14)
Shared (expenses) income
Rumo S.A (i)	842	1,192	842	1,192
Cosan Lubrificantes e Especialidades	740	1,045	—	—
Payly Soluções de Pagtos S.A.	36	—	—	—
Compass Gas e Energia S.A	784	—	—	—
Comgas Cia De Gas De São Paulo	328	—	—	—
Sinlog Tecnologia em Logística S.A.	36	—	36	—
Raízen Energia S.A.	(1,258)	(1,061)	(12,245)	(13,201)
	1,508	1,176	(11,367)	(12,009)
Financial result
Cosan Lubrificantes e Especialidades	—	(1,750)	—	—
Cosan Limited (i)	82	286	168	533
Cosan Luxembourg S.A.	(378,158)	(849,240)	—	—
Cosan Overseas Limited	(311,234)	(639,973)	—	—
Raízen Combustíveis S.A	1,308	2,067	—	—
Aldwych Temple Venture	(1,491)	—	1,308	2,067
	(689,493)	(1,488,610)	1,476	2,600
Total	(687,985)	(1,487,434)	17,499	14,010

(i)Balances related to the months before the date of the corporate restructuring 1.2.

40

Notes to the interim financial statements

(In thousands of Brazilian Reais - R$, unless otherwise stated)

c)Officers’ and directors’ compensation

The Company has a compensation policy approved by the Board of Directors that includes salaries, contributions to a post-employment defined benefit plan and share-based payment according notes 21 and 22.

	March 31, 2021	March 31, 2020
Short-term benefits to officers and directors	9,983	7,044
Share-based payment transactions	445	3,762
Post-employment benefits	87	—
	10,515	10,806

5.6 Loans, borrowings and debentures

Description	Index	Annual interest rate	March 31, 2021	December 31, 2020	Maturity	Objective
Without guarantee
Senior Notes Due 2029	Fixed 5,50%	5.50%	4,254,085	—	Sep-29	Acquisition
Non-convertible debentures	CDI + 2,65	5.37%	1,761,793	—	Aug-25	Investment
Total			6,015,878	—
Current			44,863	—
Non-current			5,971,015	—

41

Notes to the interim financial statements

(In thousands of Brazilian Reais - R$, unless otherwise stated)

	Interest		Consolidated
Description	Index	Annual interest rate		March 31, 2021	December 31, 2020	Maturity	Objective
Secured
BNDES	URTJLP	6.51%		3,060,887	—	Dec-29	Investment
	Fixed	5.63%		600,795	—	Jan-25	Investment
	IPCA	7.46%		831	—	Nov-21	Investment
	URTJLP	9.93%		264	—	Mar-22	Investment
	Fixed	3.50%		990	—	Jan-24	Investment
	IPCA - 3.25%	8.21%		978,684	807,438	Apr-29	Investment
	IPCA - 4.10%	9.10%		170,257	175,374	Apr-29	Investment
Export Credit Agreement (ECA)	Euribor + 0,58%	0.58%		112,213	—	Sep-26	Investment
European investment bank (EIB)	USD + Libor 6M + 0,54%	0.80%		33,725	30,817	May-21	Investment
	USD + Libor 6M + 0,61%	0.80%		31,539	57,813	Sep-21	Investment
				4,990,185	1,071,442
Unsecured
Foreign loans	GBP+Libor 06 + 1,50% Base 365	1.40%		157,557	143,039	Jul-21	Working capital
	GBP - Fixed	1.40%		39,487	35,556	Nov-22	Working capital
	GBP+Libor-06 + 1,10% Base 360	1.18%		157,259	142,091	Dec-21	Acquisition
	GBP+Libor-06 + 1,50% Base 360	1.53%		276,269	248,666	Dec-22	Acquisition
	EUR - Pré-fixado	4.42%		1,734	2,095	Sep-22	Investment
	CDI + 1,03%	3.70%		82,792	—	Feb-23	Investment
	CDI + 0,80%	3.47%		501,824	—	Dec-23	Investment
Loan 4131	USD	0.93%		299,534	—	Nov-22	Working capital
	CDI	4.60%		209,466	—	Apr-21	Working capital
	USD + 3,67%	3.67%		448,384	415,232	May-23	Investment
	USD + 1,59%	1.59%		—	388,912	Apr-21	Investment
	USD + 1,36%	1.60%		411,505	—	Feb-24	Investment
	IPCA + 0,81%	5.81%		264,866	—	Jan-48	Working capital
	Fixed	1.87%		20,209	—	Oct-21	Working capital
Perpetual Notes	USD	8.25%		2,884,555	2,631,100	Nov-40	Acquisition
Senior Notes Due 2023	USD	5.00%		603,906	569,466	Mar-23	Acquisition
Senior Notes Due 2025	USD	5.88%		3,198,838	—	Jan-25	Acquisition
Senior Notes Due 2027	USD	7.00%		4,443,306	4,379,812	Jan-27	Acquisition
Senior Notes Due 2028	USD	5.25%		2,775,562	—	Jan-28	Acquisition
Senior Notes Due 2029	Fixed 5,50%	5.50%		4,254,085	—	Sep-29	Acquisition
Prepayment	100% Libor-03 - 3.50% base 360	0.00%		—	27,129	Mar-21	Working capital
	100% Libor-03 - 1% base 360	1.20%		115,420	104,318	Nov-21	Working capital
Debentures	IPCA + 4,68%	9.70%		552,106	—	Feb-26	Investment
	IPCA + 4,50%	9.52%		694,131	—	Feb-29	Investment
	IPCA + 3,60%	6.24%		374,017	—	Dec-30	Working capital
	CDI + 2,65	5.37%		1,761,793	—	Aug-25	Investment
	IPCA + 6,80%	11.93%		838,747	—	Apr-30	Investment
	IPCA + 3,90%	8.89%		1,002,781	—	Oct-29	Investment
	IPCA + 4,00%	8.99%		1,003,867	—	Dec-35	Investment
	IPCA + 7,48%	12.64%		312,369	299,524	Dec-22	Investment
	IPCA + 7,36%	12.51%		102,168	97,956	Dec-25	Investment
	IPCA + 5,87%	10.95%		883,036	890,658	Dec-23	Investment
	IPCA + 4,33%	9.34%		468,629	452,457	Oct-24	Investment
	IGPM + 6,10%	19.49%		325,315	298,706	May-28	Investment
	100% CDI +0,50%	3.16%		2,020,296	2,007,849	Oct-22	Investment
Working capital	100% CDI - 2.75%	5.47%		100,036	100,045	Jun-22	Working capital
Promissory notes	100% CDI - 3.00%	4.96%		—	601,058	Apr-21	Investment
	100% CDI - 3.40%	5.36%		—	520,116	Apr-21	Investment
				31,585,849	14,355,785
Total				36,576,034	15,427,227
Current				2,413,080	2,352,057
Non-current				34,162,954	13,075,170

42

Notes to the interim financial statements

(In thousands of Brazilian Reais - R$, unless otherwise stated)

The Company used the annual average rate of the CDI of 2.65% and Long-term Interest Rate (Taxa de Juros de Longo Prazo), or “TJLP,” of 4.39%. 

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

	Parent Company		Consolidated
	March 31, 2021	December 31, 2020	March 31, 2021	December 31, 2020
13 to 24 months	—	—	4,343,252	2,605,687
25 to 36 months	580,000	—	3,322,477	2,039,863
37 to 48 months	580,000	—	5,009,523	623,971
49 to 60 months	580,000	—	1,304,915	171,794
61 to 72 months	—	—	5,047,022	238,050
73 to 84 months	—	—	3,996,770	4,512,773
85 to 96 months	—	—	1,609,097	238,095
Thereafter	4,231,015	—	9,529,898	2,644,937
	5,971,015	—	34,162,954	13,075,170

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

	Parent Company		Consolidated
	March 31, 2021	December 31, 2020	March 31, 2021	December 31, 2020
Brazilian reais (BRL)	1,761,793	—	16,310,947	6,251,180
U.S. Dollar (USD)	4,254,085	—	19,500,359	8,604,600
British pound (GBP)	—	—	630,572	569,352
Euro (EUR)	—	—	134,156	2,095
	6,015,878	—	36,576,034	15,427,227

On February 23, 2021, the subsidiary Comgás, based on its Liability Management policy and current market conditions, decided to prepay the loan 4131 contracted with Scotiabank in April 2020, with exchange of indexer by means of swap considering tax of CDI + 2.75% and original maturity in April 2021, subsequently contracting a debt of equal value with the same counterparty, however, extending the term by three years to mature in February 2024, with exchange of indexer by means of swap tax of CDI + 1.25%. The only effect of this transaction on the interim financial statements for the three-month period ended March 31, 2021, was the positive result of the settlement of the swap for on 2020 operation with a net cash receipt of approximately R$5 million.

43

Notes to the interim financial statements

(In thousands of Brazilian Reais - R$, unless otherwise stated)

All debts denominated in U.S. dollar have currency risk protection through derivative financial instruments (Note 5.10), except for perpetual notes.

Below are the movements in loans, borrowings and debentures occurred for the period ended March 31, 2021:

	Parent Company	Consolidated
March 31, 2020	—	15,427,227
Corporate reorganization (Note 1.2)	5,982,343	26,817,519
Raised	—	583,128
Amortization of principal (i)	(5,427)	(6,945,855)
Payment of interest	(134,759)	(513,490)
Interest, exchange rate and fair value	173,721	1,207,505
March 31, 2021	6,015,878	36,576,034

(i)Debt settlement: Senior Notes Due 2024 (R$4,514,289), NCE CDI + 3.05% (R$208,464) and NCE CDI + 3.15% (R$468,516), by the subsidiary Rumo S.A..

a)Guarantees

The subsidiary Comgás has financing contracts with the European Investiment Bank (“EIB”), destined for investments and is guaranteed, according to each contract, by bank guarantee, with an average cost of 1.47% per year or by real guarantees (assets) and guarantee account. As of March 31, 2021, the balance of bank guarantees contracted was R$123,885 (R$113,000 on December 31, 2020).

In Rumo some financing contracts with the National Bank for Economic and Social Development (“BNDES”), intended for investments, are also guaranteed, according to each contract, by bank guarantee, with an average cost of 0.93% per year or by real guarantees (assets) and guarantee account. On March 31, 2021, the balance of bank guarantees contracted was R$3,392,192 (R$3,687,323 on December 31, 2020).

44

Notes to the interim financial statements

(In thousands of Brazilian Reais - R$, unless otherwise stated)

To calculate the average rates, the annual average CDI of 2.25% (2.78% as of December 31, 2020) and TJLP of 4.70% (4.87% as of December 31, 2020) were considered on an annual basis.

b)Available credit line

As of March 31, 2021, the Company had credit lines in banks with AA rating, which were not used, in the total amount of R$250,000 (R$250,000 on December 31, 2020) and R$1,201,981 (R$487,378 in December 31, 2020), to investee Rumo SA.

The use of these credit lines is subject to certain contractual conditions.

c)Financial covenants

Under the terms of the major borrowing facilities, the Company and its subsidiaries are required to comply with the following financial covenants:

Debt	Triggers	Ratios
Debenture 4th Issue – Comgás	Short-term indebtedness/ Total indebtedness (iii) cannot exceed 0.6	0.05
Debenture 4th to 8th Issue – Comgás	Net debt (i) / EBITDA (ii) cannot exceed 4.00	1.70
BNDES - Comgás		1.70
Resolution 4131 - Comgás		1.70
Senior Notes Due 2027 - Cosan	Net debt pro forma (iv) / EBITDA (ii) | (iv) not higher than or equal to 3.5	3.00
Senior Notes Due 2029 - Cosan	Net debt (i) / EBITDA (ii) not higher than or equal to 3.5	3.00
Senior Notes Due 2025 - Rumo	Net debt (i) / EBITDA (ii) not higher than or equal to 3.3	2.00
BNDES - Rumo	EBITDA (ii) / Consolidated financial result (v) higher or equal 2.0x in December 2021	293.86 (vi)

(i)	Net debt consists of current and non-current debt, net of cash and cash equivalents and marketable securities. Net debt is a non-GAAP measure.
(ii)	Corresponds to the accumulated EBITDA of the last twelve months.
(iii)	Indebtedness means the sum of current and noncurrent loans, financing and debentures, leases and current and noncurrent derivative financial instruments.

45

Notes to the interim financial statements

(In thousands of Brazilian Reais - R$, unless otherwise stated)

(iv)	Net debt and EBITDA pro forma, including joint ventures financial information. Net debt and EBITDA pro forma are a non-GAAP measure.
(v)	The financial result of the net debt is represented by the cost of the net debt.
(vi)	The Rumo S.A. presented a financial result from the consolidated debt due to the prepayment of Senior Notes 2024, excluding the effects of this operation, the index would be 11.11.

For the other loans, borrowings and debentures of the Company there are no debt financial covenants.

The terms of loans included cross-default provisions.

On March 31, 2021, the Company and its subsidiaries was in compliance with all debt financial covenants.

d)Fair value and exposure to financial risk

The fair value of the loans is based on the discounted cash flow using its implicit discount rate. They are classified as a level 2 fair value in the hierarchy (Note 5.10) due to the use of unobservable data, including own credit risk.

The details of the Company’s exposure to risks arising from loans are shown in Note 5.12.

46

Notes to the interim financial statements

(In thousands of Brazilian Reais - R$, unless otherwise stated)

5.7 Trade payables

The carrying amounts of suppliers and other accounts payable are the same as their fair values, due to their short-term nature.

	Parent Company		Consolidated
	March 31, 2021	December 31, 2020	March 31, 2021	December 31, 2020
Materials and service suppliers	1,323	4,066	1,450,456	1,095,051
Natural gas/ transport and logistics suppliers	—	—	859,515	780,141
	1,323	4,066	2,309,971	1,875,192

5.8 Leases

Accounting policy

At the beginning or in the modification of a contract, the Company assesses whether a contract is or contains a lease.

The lease liability is initially measured at the present value of lease payments that are not made on the start date, discounted at the interest rate implicit in the lease or, if that rate cannot be determined immediately, by the Company’s incremental loan rate. The Company generally uses its incremental loan rate as a discount rate.

The lease payments included in the measurement of the lease liability comprise the following:

• fixed payments, including fixed payments in essence;
• variable lease payments that depend on index or rate, initially measured using the index or rate on the start date;
• amounts expected to be paid by the lessee, in accordance with the residual value guarantees; and

47

Notes to the interim financial statements

(In thousands of Brazilian Reais - R$, unless otherwise stated)

• the exercise price of the call option if the lessee is reasonably certain to exercise that option, and payment of fines for terminating the lease, if the lease term reflects the lessee exercising the option to terminate the lease.

Subsequent valuation of the lease liability is at amortized cost, using the effective interest method. It is remeasured when there is a change in future lease payments resulting from a change in index or rate, if there is a change in the amounts that are expected to be paid according to the residual value guarantee, if the Company changes its valuation, an option will be exercised purchase, extension or termination or if there is an essentially fixed revised lease payment.

When the lease liability is remeasured in this way, an adjustment corresponding to the carrying amount of the right-of-use asset is made or is recorded in the income statement if the carrying amount of the right-of-use asset has been reduced to zero.

	Consolidated
	Financial	Operational - concessions	Operational - other	Total
At January 1, 2021	—	—	79,763	79,763
Corporate reorganization (Note 1.2)	403,008	2,353,947	194,006	2,950,961
Additions	—	—	22,693	22,693
Appropriation of interest and exchange variation	4,142	22,484	5,538	32,164
Repayments of principal from debts	(10,739)	(12,124)	(4,906)	(27,769)
Payments of interest from debts	—	(16,514)	(1,968)	(18,482)
Contractual adjustment	—	47,815	45	47,860
At March 31, 2021	396,411	2,395,608	295,171	3,087,190
Current	223,399	239,256	70,860	533,515
Non-current	173,012	2,156,352	224,311	2,553,675
	396,411	2,395,608	295,171	3,087,190

48

Notes to the interim financial statements

(In thousands of Brazilian Reais - R$, unless otherwise stated)

5.9 Sector financial asset and liability

The changes in net sector financial asset (liability) for the period ended March 31, 2021 were as follows:

	Sectorial assets	Sectorial liabilities	Total
January 01, 2021	241,749	(565,911)	(324,162)
Cost of gas (i)	(59,010)	-	(59,010)
Credits of taxes (ii)	-	(37,599)	(37,599)
Monetary variations (iii)	1,366	-	1,366
Other revenue (iv)	-	-	-
March 31, 2021	184,105	(603,510)	(419,405)
Current	184,105	(92,386)	91,719
Non-current	-	(511,124)	(511,124)
	184,105	(603,510)	(419,405)

(i)	Refers to the cost of gas purchased higher than that contained in the tariffs, 100% classified in current assets, since ARSESP's resolution provides for tariff recovery on a quarterly basis.
(ii)	Credits, mainly, from the exclusion of ICMS on the basis of PIS and COFINS, which will be returned to consumers when the lawsuit is final, and which should be discussed with ARSESP regarding the mechanisms and criteria for reimbursement.
(iii)	Monetary restatement on the current gas account, based on the SELIC rate.

49

Notes to the interim financial statements

(In thousands of Brazilian Reais - R$, unless otherwise stated)

5.10 Derivative financial instruments

	Notional		Fair value
	March 31, 2021	December 31, 2020	March 31, 2021	December 31, 2020
Fuel derivative agreements
Forward agreements (i)	—	13,422	—	(348)
Energy derivative agreements
Forward agreements (ii)	1,374,618	1,354,967	(137,781)	(189,423)
Exchange rate derivatives
Forward agreements	1,540,336	345,144	86,318	(509)
Interest rate and exchange rate risk
Swap agreements (shares) (iii)	600,000	—	308,440	—
Swap agreements (interest rate)	4,463,765	1,170,861	645,488	346,488
Swap agreements (exchange and interest rate)	11,124,750	4,281,071	4,989,671	2,553,383
	16,188,515	5,451,932	5,943,599	2,899,871
Total financial instruments			5,892,136	2,709,591
Current assets			382,585	156,208
Non-current assets			5,850,020	2,971,210
Current liabilities			(225,870)	(293,656)
Non-current liabilities			(114,599)	(124,171)
Total			5,892,136	2,709,591

(i)	Forward contracts for fuels contracted by the subsidiary Moove, which seek to reduce possible impacts on the price fluctuation of the commodity that can affect our lubricant costs.
(ii)	The subsidiary Compass Gás e Energia has a portfolio of energy contracts (purchase and sale) aimed at meeting demands and offers for consumption or supply of energy. In addition, there is a portfolio of contracts that comprises forward positions, usually short-term. For this portfolio, there is no purchase commitment with a sales contract.

50

Notes to the interim financial statements

(In thousands of Brazilian Reais - R$, unless otherwise stated)

(iii) The Company contracted a Total Return Swap, with Banco Santander (Brasil) S.A. In accordance with the total return swap, which will have a financial settlement, Cosan will receive the return on the variation in the price of CSAN3 shares adjusted by the dividends for the period and will pay interest annual rates referenced to CDI + Spread. The equivalent contracted amount of CSAN3 shares with a total return swap was 9,937,003 and the total initial value is R$600,000.

Derivatives are only used for economic hedging purposes and not as speculative investments.

Fair value hedge

Currently the Company has adopted the hedge accounting of fair value for some its operations. Both the hedging instruments and the hedged items are measured and recognized at fair value through profit or loss.

The effects of the foreign currency-related hedging instruments and interest rate swaps on the Company’s financial position and performance are as follows:

		Book value		Accumulated fair value adjustment
	Notional	March 31, 2021	December 31, 2020	March 31, 2021	December 31, 2020
Exchange rate hedge
Designated items
Senior notes 2025 (Rumo Luxembourg)	(1,740,550)	(3,198,838)	—	15,777	—
Senior notes 2028 (Rumo Luxembourg)	(2,791,600)	(2,775,562)	—	71,314	—
Total debt	(4,532,150)	(5,974,400)	—	87,091	—
Derivative financial instruments
Senior swaps notes 2025 (Rumo Luxembourg)	1,740,550	1,485,832	—	(13,748)	—
Senior swaps notes 2028 (Rumo Luxembourg)	2,791,600	494,411	—	5,589	—
Derivative total	4,532,150	1,980,243	—	(8,159)	—
Total	—	(3,994,157)	—	78,932	—

51

Notes to the interim financial statements

(In thousands of Brazilian Reais - R$, unless otherwise stated)

		Book value		Accumulated fair value adjustment
	Notional	March 31, 2021	December 31, 2020	March 31, 2021	December 31, 2020
Interest rate hedge
Designated items
Senior notes 2023 (Cosan Luxembourg)	(691,157)	(603,906)	(569,466)	(231,636)	(237,050)
Debenture 3rd issue - 3rd series (Comgás)	—	—	—	—	575
Debenture 5th issue - single series (Comgás)	(684,501)	(883,036)	(890,658)	7,622	(22,040)
Debenture (Rumo)	(2,329,136)	(2,380,664)	—	36,984	—
Total debt	(3,704,794)	(3,867,606)	(1,460,124)	(187,030)	(258,515)
Derivative financial instruments
Senior swaps notes 2023 (Cosan Luxembourg)	691,157	433,317	392,899	35,012	(42,532)
Debenture 3rd issue swaps - 3rd series (Comgás)	—	—	—	—	862
Debenture 5th issue swaps - single series (Comgás)	684,501	195,752	211,741	(15,989)	10,731
Debenture Swap (Rumo)	2,354,965	123,905	—	7,627	—
Derivative total	3,730,623	752,974	604,640	26,650	(30,939)
Total	25,829	(3,114,632)	(855,484)	(160,380)	(289,454)

Fair value option

Certain derivative instruments have not been linked to documented hedge structures. The Company opted to designate the protected liabilities (hedge objects) to be recorded at fair value through profit or loss. Considering that derivative instruments are always accounted for at fair value through profit or loss, the accounting effects are the same that would be obtained through hedge documentation:

52

Notes to the interim financial statements

(In thousands of Brazilian Reais - R$, unless otherwise stated)

			Book value		Accumulated fair value adjustment
		Notional	March 31, 2021	December 31, 2020	March 31, 2021	December 31, 2020
Exchange rate hedge
Objects
Sênior Notes 2027	USD+7,0%	(3,703,245)	(4,461,557)	(4,379,812)	207,213	(349,181)
EIB 3ª Tranche	US$ + LIBOR6M + 0,54%	(9,625)	(33,725)	(30,817)	507	156
EIB 4ª Tranche	US$ + LIBOR6M + 0,61%	(9,237)	(31,539)	(57,813)	441	308
Loan 4131 (Comgás - 2018)	US$ + 3,67%	(268,125)	(448,384)	(415,232)	(15,811)	(24,247)
Loan 4131 (Comgás - 2020)	US$ + 1,59%	—	—	(388,912)	—	1,967
Loan 4131 (Comgás - 2021)	US$ + 1,60%	(407,250)	(411,505)	—	16,374	—
ECA	EUR + 0,58%	(100,198)	(112,213)	—	11,588	—
Loan 4131 (Rumo)	USD + 2,20%	(220,000)	(299,534)	—	3,162	—
Total		(4,717,680)	(5,798,457)	(5,272,586)	223,474	(370,997)
Derivative instruments
FX and interest swap	BRL + 126,85% do CDI	3,703,245	2,157,170	2,272,648	270,391	1,320,629
EIB 3ª Tranche	BRL + 88,5% do CDI	9,625	23,789	21,176	2,613	24,927
EIB 4ª Tranche	BRL + 81,1% do CDI	9,237	22,120	39,256	4,891	26,219
Loan 4131 (Comgás - 2018)	BRL + 107,9% do CDI	268,125	192,812	154,627	38,185	117,080
Loan 4131 (Comgás - 2020)	BRL + CDI + 2,75%	—	—	(6,214)	15,711	(12,904)
Loan 4131 (Comgás - 2021)	BRL + CDI + 1,25%	407,250	4,811	—	4,811	—
Inflation and interest rate swaps	BRL + 107% do CDI	100,198	42,327	—	(5,902)	—
Inflation and interest rate swaps	BRL + 118% do CDI	220,000	100,438	—	4,128	—
Derivative total		4,717,680	2,543,467	2,481,493	334,828	1,475,951
Total		—	(3,254,990)	(2,791,093)	558,302	1,104,954
			Book value		Accumulated fair value adjustment
		Notional	March 31, 2021	December 31, 2020	March 31, 2021	December 31, 2020
Interest rate hedge
Objects
Debenture (Rumo)	IPCA + 4,68%	(500,000)	(552,106)	—	(3,056)	—
Debenture (Rumo)	IPCA + 4,50%	(600,000)	(694,131)	—	1,757	—
Total		(1,100,000)	(1,246,237)	—	(1,299)	—
Derivative instruments
FX and interest swap	107% CDI	500,000	70,819	—	(2,658)	—
FX and interest swap	105% CDI	600,000	90,259	—	(5,306)	—
Derivative total		—	—	—	—	—
Total		(1,100,000)	(1,246,237)	—	(1,299)	—

53

Notes to the interim financial statements

(In thousands of Brazilian Reais - R$, unless otherwise stated)

There is an economic relationship between the hedged item and the hedge instrument, since the terms of the interest rate and foreign exchange swap correspond to the terms of the fixed rate loan, that is, notional amount, term and payment. The Company established a 1:1 hedge ratio for hedge relationships, since the underlying risk of the interest rate and exchange rate swap is identical to the hedged risk component. To test the effectiveness of the hedge, the Company uses the discounted cash flow method and compares the changes in the fair value of the hedge instrument with the changes in the fair value of the hedged item attributable to the hedged risk. 

5.11 Recognized fair value measurements

The market value of the Senior Notes are listed on the Luxembourg Stock Exchange (Note 5.6) is based on their quoted market price are as follows:

	Company	March 31, 2021	December 31, 2020
Senior notes 2023	Cosan Luxembourg	100.16%	101.02%
Senior notes 2025	Rumo Luxembourg	105.43%	104.96%
Senior notes 2028	Rumo Luxembourg	105.07%	105.04%
Senior notes 2027	Cosan Luxembourg	106.57%	108.20%
Senior notes 2029	Cosan S.A.	106.01%	103.47%
Perpetual notes	Cosan Overseas Limited	102.79%	102.88%

All the resulting fair value estimates are included in level 2.

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

		Carrying amount		Assets and liabilities measured at fair value
		March 31, 2021	December 31, 2020	March 31, 2021		December 31, 2020
	Note			Level 1	Level 2	Level 1	Level 2
Assets
Investment funds	5.1	1,509,462	2,154,257	—	1,509,462	—	2,154,257
Marketable securities	5.2	3,735,659	2,271,570	—	3,735,659	—	2,271,570
Other financial assets	5.4	69,381	848,821	69,381	—	848,821	—
Derivate financial instruments	5.10	6,232,605	3,127,418	—	6,232,605	—	3,127,418
Total		11,547,107	8,402,066	69,381	11,477,726	848,821	7,553,245
Liabilities
Loans, borrowings and debentures	5.6	(19,351,831)	(6,837,028)	—	(19,351,831)	—	(6,837,028)
Consideration payable		(218,115)	(224,787)	—	(218,115)	—	(224,787)
Derivative financial instruments	5.10	(340,469)	(417,827)	—	(340,469)	—	(417,827)
Total		(19,910,415)	(7,479,642)	—	(19,910,415)	—	(7,479,642)

54

Notes to the interim financial statements

(In thousands of Brazilian Reais - R$, unless otherwise stated)

5.12  Financial risk management

This note explains the Company’s exposure to financial risks and how these risks could affect the group’s future financial performance. Current period profit and loss information has been included where relevant to add further context.

Risk	Exposure arising from	Measurement	Management
Market risk – foreign exchange	(i) Future commercial transactions. (ii) Recognized financial assets and liabilities not denominated in Brazilian reais.	(i) Cash flow forecasting (ii) Sensitivity analysis	Foreign currency forwards.
Market risk – interest rate	Cash and cash equivalents, marketable securities, loans, borrowings and debentures, leases and derivative.	(i) Sensitivity analysis	Interest rate Swap.
Credit risk	Cash and cash equivalents, marketable securities trade receivables, derivatives, receivables from related parties and dividends.	(i) Ageing analysis (ii) Credit ratings	Diversification of bank deposits, credit limits and letters of credit.
Liquidity risk	Loans, borrowings and debentures, trade payables, other financial liabilities, REFIS, leases, derivative, payables to related parties and dividends.	(i) Rolling cash flow forecasts	Availability of committed credit lines and borrowing facilities.

The Company’s risk management is predominantly controlled by a central treasury department under policies approved by the Board of Directors. The Company’s Management identifies, evaluates and hedges financial risks in close co-operation with the Company’s operating units. The Board provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

Where all relevant criteria are met, hedge accounting is applied to remove the accounting mismatch between the hedging instrument and the hedged item. This will effectively result in recognizing interest expense at a fixed interest rate for the hedged floating rate loans and inventory at the fixed foreign currency rate for the hedged purchases.

55

Notes to the interim financial statements

(In thousands of Brazilian Reais - R$, unless otherwise stated)

The Company may choose to formally designate new debt transactions involving hedging derivative financial instruments through swap between exchange variation and interest rates, as measured at fair value. The fair value option is intended to eliminate or reduce any inconsistency in measurement or recognition of certain liabilities, which would otherwise arise. Thus, both the swaps and the respective debts are measured at fair value and this option is irrevocable and should be made only upon initial recording (“inception”) of the operation.

The Company’s policy is to maintain 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.

The usage of financial instruments in order to protect against these areas of volatility is determined through an analysis of the risk exposure that management intends to cover.

a)Market risk

The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

1. Foreign exchange risk

At March 31, 2021 and December 31, 2020, the Company had the following net exposure to the exchange rate variations on assets and liabilities denominated in U.S. Dollar (U.S.$.) and Euro:

	March 31, 2021	December 31, 2020
Cash and cash equivalents	1,271,634	143,676
Trade receivables	81,750	17,502
Trade payables	(97,488)	(174,178)
Loans, borrowings and debentures	(19,579,128)	(8,007,493)
Consideration payable	(218,115)	(224,787)
Derivative financial instruments (notional)	16,775,697	5,453,252
Foreign exchange exposure, net	(1,765,650)	(2,792,028)

56

Notes to the interim financial statements

(In thousands of Brazilian Reais - R$, unless otherwise stated)

The sensitivity of profit or loss to changes in the exchange rates arises mainly from U.S. Dollar denominated financial instruments and the impact on other components of equity arises from foreign forward exchange contracts designated as cash flow hedges though its joint ventures.

A reasonably possible strengthening (weakening) of the Real against the US dollars and Euro as of March 31, 2021 would have affected the measurement of foreign currency-denominated financial instruments and the affected shareholders' equity and income by the amounts indicated below:

			Variation scenario
Instrument	Risk factor	Probable	25%	50%	-25%	-50%
Cash and cash equivalents	Currency fluctuation	(160,033)	766,053	1,647,756	(997,354)	(1,879,057)
Trade receivables	Currency fluctuation	69,593	52,195	34,797	86,991	104,389
Trade payables	Currency fluctuation	(82,988)	(62,241)	(41,494)	(103,735)	(124,482)
Derivative financial instruments	Currency fluctuation	2,067,352	4,978,825	7,746,682	(556,889)	(3,324,746)
Loans, borrowings and debentures	Currency fluctuation	949,259	(4,427,509)	(9,804,277)	6,326,026	11,702,794
Consideration payable	Currency fluctuation	185,677	139,258	92,838	232,096	278,516
Impacts on profit or loss		3,028,860	1,446,581	(323,698)	4,987,135	6,757,414

The probable scenario was defined based on the U.S dollar and Euro market rates projected for December 31, 2021, which determines the fair value of the derivatives at that date. Stressed scenarios (positive and negative effects, before taxes) were defined based on adverse impacts of 25% and 50% on the US dollar exchange rates used in the probable scenario.

Based on the financial instruments denominated in U.S. Dollars at March 31, 2021, the Company performed a sensitivity analysis with a 25% and 50% increase in the exchange rate (R$/ US$). The probable scenario considers the Company's projections made by specialized advisory services for 12-month exchange rates, as follows:

57

Notes to the interim financial statements

(In thousands of Brazilian Reais - R$, unless otherwise stated)

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