Report of Foreign Issuer (6-k)

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report of Foreign Issuer

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

of the Securities Exchange Act of 1934

For the month of November 2017

Commission File Number: 1-33659

COSAN LIMITED

(Translation of registrant’s name into English)

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

São Paulo, SP 04538-132 Brazil

(Address of principal executive offices)

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


Form 20-F X		Form 40-F

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


Yes		No X

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


Yes		No X

Cosan Limited

Consolidated interim financial statements as of

September 30, 2017

Cosan Limited

Consolidated interim financial statements

Contents


Report on review of interim financial information			1

Consolidated statements of financial position			2

Consolidated statements of profit or loss and other comprehensive income			4

Consolidated statements of changes in equity			6

Consolidated statements of cash flows			8

Notes to the consolidated interim financial statements			10

Report on Review of Interim Financial Information

To the Board of Directors and Shareholders of

Cosan Limited

Bermuda

Introduction

We have reviewed the accompanying consolidated interim financial information of Cosan Limited (“Company”) contained in the Quarterly Information Form—ITR for the quarter ended September 30, 2017, which comprises the statement of financial position as of September 30, 2017, and the respective statements of profit and loss and comprehensive income (loss) for the three and nine-month periods then ended and changes in equity and cash flows for the nine-month period then ended, including the notes.

The Company’s management is responsible for the preparation and presentation of this interim financial information in accordance with IAS 34—Interim Financial Reporting, issued by the International Accounting Standards Board—IASB. Our responsibility is to express a conclusion on this consolidated interim financial information based on our review.

Scope of review

We conducted our review in accordance with the Brazilian and International standards on review engagements of interim financial information ( 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 the financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with the audit standards and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion on the consolidated interim financial information

Based on our review, nothing has come to our attention that causes us to believe that the accompanying consolidated interim financial information included in the Quarterly Information Form—ITR referred to above has not been prepared, in all material respects, in accordance with IAS 34—Interim Financial Reporting, issued by the International Accounting Standards Board—IASB.

São Paulo, November 13, 2017

KPMG Auditores Independentes

CRC 2SP014428/O-6

Rogério Hernandez Garcia

Contador CRC 1SP213431/O-5

Cosan Limited

Consolidated statements of financial position

(In thousands of Brazilian Reais - R$)


	Note		September 30, 2017		December 31, 2016
Assets
Cash and cash equivalents		7		5,801,811		4,499,588
Marketable securities		8		2,043,625		1,291,580
Trade receivables		9		1,206,074		1,130,624
Derivative financial instruments		27		275,160		20,654
Inventories				614,102		630,752
Receivables from related parties		11		66,760		58,517
Income tax receivable				186,948		364,980
Other current tax receivable		10		281,238		178,856
Dividends receivable				6,559		144,160
Other current assets				242,300		449,298

Total current assets				10,724,577		8,769,009
Trade receivables		9		45,855		54,806
Restricted cash		8		225,695		200,999
Deferred tax assets		21		1,591,713		1,490,002
Receivables from related parties		11		150,618		183,740
Income tax receivable				248,958		121,376
Other non-current tax receivable		10		800,967		739,849
Judicial deposits		22		757,583		714,684
Derivative financial instruments		27		767,005		730,426
Other non-current assets				911,696		835,730
Investments in associates		12		287,345		286,947
Investments in joint ventures		13		8,695,007		8,506,395
Property, plant and equipment		14		11,330,005		10,726,448
Intangible assets and goodwill		15		16,848,508		17,109,439

Total non-current assets				42,660,955		41,700,841

Total assets				53,385,532		50,469,850

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

Cosan Limited

Consolidated statements of financial position

(In thousands of Brazilian Reais - R$)


	Note		September 30, 2017			December 31, 2016
Liabilities
Loans, borrowings and debentures		16		3,182,679			2,404,009
Leases		17		286,849			472,632
Real estate credit certificates				100,350			105,422
Derivative financial instruments		27		9,504			40,526
Trade payables		19		2,189,246			2,032,542
Employee benefits payable				267,503			238,159
Income tax payables				38,118			83,113
Other taxes payable		20		278,049			261,169
Concessions payables		18		26,955			27,662
Dividends payable				26,818			93,500
Payables to related parties		11		316,922			237,081
Deferred revenue				12,775			14,167
Other financial liabilities				330,602			203,303
Other current liabilities				400,044			415,782

Total current liabilities				7,466,414			6,629,067

Loans, borrowings and debentures		16		18,133,743			15,934,488
Leases		17		727,402			924,911
Real estate credit certificates				15,472			90,323
Preferred shareholders payable in subsidiaries				1,555,517			1,769,427
Derivative financial instruments		27		261,275			255,318
Trade payables		19		—			568
Other taxes payable		20		162,837			153,776
Income tax payables				13,749			—
Provision for legal proceedings		22		1,248,738			1,268,564
Concessions payables		18		2,835,348			2,580,144
Post-employment benefits		28		460,609			441,480
Deferred tax liabilities		21		3,677,400			3,550,565
Deferred revenue				58,546			62,207
Provision for uncovered liability of associates		12		6,139			—
Other non-current liabilities				605,040			799,263

Total non-current liabilities				29,761,815			27,831,034

Total liabilities				37,228,229			34,460,101

Shareholders’ equity		23
Share capital				5,328			5,328
Additional paid-in capital				3,924,608			4,051,591
Accumulated other comprehensive loss				(297,508	)		(480,454	)
Retained earnings				2,855,521			2,695,998

Equity attributable to:
Owners of the Company				6,487,949			6,272,463
Non-controlling interests		12		9,669,354			9,737,286

Total shareholders’ equity				16,157,303			16,009,749

Total shareholders’ equity and liabilities				53,385,532			50,469,850

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

Cosan Limited

Consolidated statements of profit or loss and other comprehensive income

For the three and nine month period ended September 30, 2017 and 2016

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


	Note		July 1, 2017 to September 30, 2017			January 1, 2017 to September 30, 2017			July 1, 2016 to September 30, 2016 (Restated)			January 1, 2016 to September 30, 2016 (Restated)
Net sales				3,711,023			9,865,262			3,272,803			9,732,259
Cost of sales				(2,405,635	)		(6,567,249	)		(2,036,006	)		(6,097,797	)

Gross profit				1,305,388			3,298,013			1,236,797			3,634,462

Selling expenses				(255,269	)		(794,287	)		(265,564	)		(760,199	)
General and administrative expenses				(215,948	)		(626,231	)		(231,196	)		(729,258	)
Other expenses, net		25		(30,510	)		(94,269	)		(16,902	)		(83,220	)

Operating expenses				(501,727	)		(1,514,787	)		(513,662	)		(1,572,677	)

Income before interest in earnings of investees and finance results				803,661			1,783,226			723,135			2,061,785

Interest in earnings of associates		12		5,658			6,984			8,393			3,235
Interest in earnings of joint ventures		13		410,178			706,272			404,245			1,098,183

Interest in earnings of investees				415,836			713,256			412,638			1,101,418
Finance expense				(841,177	)		(2,606,547	)		(1,142,850	)		(2,867,121	)
Finance income				177,290			695,061			263,408			834,976
Foreign exchange, net				293,593			99,860			(47,689	)		1,011,866
Derivatives				(152,484	)		(14,026	)		156,206			(1,317,265	)

Finance results, net		26		(522,778	)		(1,825,652	)		(770,925	)		(2,337,544	)
Profit before taxes				696,719			670,830			364,848			825,659

Income tax expenses		21
Current				(96,976	)		(138,315	)		(2,593	)		(216,540	)
Deferred				(51,917	)		(90,387	)		(66,490	)		67,151

				(148,893	)		(228,702	)		(69,083	)		(149,389	)

Profit from continuing operations				547,826			442,128			295,765			676,270
Profit from discontinued operation, net of tax				—			—			18,312			58,860

Profit for the period				547,826			442,128			314,077			735,130

Cosan Limited

Consolidated statements of profit or loss and other comprehensive income

For the three and nine month period ended September 30, 2017 and 2016

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


Other comprehensive income Items that will never be reclassified to profit or loss
Financial instruments—common transactions			—			9,000		—			6,000

			—			9,000		—			6,000
Items that are or may subsequently be reclassified to profit or loss:
Foreign currency translation effect			19,676			3,811		(4,009	)		141,946
(Loss) gain on cash flow hedge in joint ventures			(50,067	)		272,136		(34,006	)		(174,743	)
Changes in fair value of available for sale securities			48			3,371		1,501			391
Taxes			—			—		(1,541	)		342

			(30,343	)		279,318		(38,055	)		(32,064	)
Total other comprehensive income, net of tax			(30,343	)		288,318		(38,055	)		(26,064	)

Comprehensive income—Continued operation			517,483			730,446		276,022			709,066

Comprehensive income—Discontinued operation			—			—		398			201

Total comprehensive income			517,483			730,446		276,420			709,267

Profit attributable to:
Owners of the Parent			248,110			224,444		157,151			312,729
Non-controlling interests			299,716			217,684		156,926			422,401

			547,826			442,128		314,077			735,130
Total comprehensive income attributable to:
Owners of the Company			234,989			407,390		129,230			320,311
Non-controlling interests			282,494			323,056		147,190			388,956

			517,483			730,446		276,420			709,267
Basic earnings per share from:	24
Continuing operations		R$	0.9367		R$	0.8478	R$	0.5782		R$	1.1230
Discontinuing operations			—			—	R$	0.0155		R$	0.0585

		R$	0.9367		R$	0.8478	R$	0.5937		R$	1.1815
Diluted earnings per share from:	24
Continuing operations		R$	0.8294		R$	0.7426	R$	0.5153		R$	1.0554
Discontinuing operations			—			—	R$	0.0155		R$	0.0583

		R$	0.8294		R$	0.7426	R$	0.5308		R$	1.1137

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

Cosan Limited

Consolidated statements of changes in equity

For the nine month period ended September 30, 2017 and 2016

(In thousands of Brazilian Reais - R$)


	Share capital		Capital reserve			Accumulated other comprehensive loss			Retained earnings			Equity attributable to owners of the Company			Non-controlling interest			Total equity
At January 01, 2017		5,328		4,051,591			(480,454	)		2,695,998			6,272,463			9,737,286			16,009,749

Net profit for the period		—		—			—			224,444			224,444			217,684			442,128
Other comprehensive income:
Gain on cash flow hedge in joint ventures		—		—			169,237			—			169,237			102,899			272,136
Foreign currency translation effects		—		—			6,014			—			6,014			(2,203	)		3,811
Financial instruments—common transactions		—		—			5,598			—			5,598			3,402			9,000
Change in fair value of available for sale securities		—		—			2,097			—			2,097			1,274			3,371

Total comprehensive income for the period		—		—			182,946			224,444			407,390			323,056			730,446

Contributions by and distributions to owners of the Company:
Capital increase in subsidiary		—		—			—			—			—			2,815			2,815
Dividends—non-controlling interests		—		(13,815	)		—			—			(13,815	)		13,815			—
Share options exercised—Subsidiaries		—		21,933			—			—			21,933			13,097			35,030
Dividends		—		—			—			(64,921	)		(64,921	)		(294,158	)		(359,079	)
Share-based payment transactions		—		17,346			—			—			17,346			5,216			22,562

Total contributions by and distributions to owners of the Company		—		25,464			—			(64,921	)		(39,457	)		(259,215	)		(298,672	)

Transactions with owners of the Company
Change of shareholding interest in subsidiary		—		(152,447	)		—			—			(152,447	)		(131,773	)		(284,220	)

At September 30, 2017		5,328		3,924,608			(297,508	)		2,855,521			6,487,949			9,669,354			16,157,303

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

Cosan Limited

Consolidated statements of changes in equity

For the nine month period ended September 30, 2017 and 2016

(In thousands of Brazilian Reais - R$)


	Share capital		Capital reserve			Accumulated other comprehensive loss			Retained earnings			Equity attributable to owners of the Company			Non-controlling interest			Total equity
At January 01, 2016		5,328		4,006,562			(478,207	)		2,380,035			5,913,718			10,275,532			16,189,250

Net profit for the period (Restated)		—		—			—			312,729			312,729			422,401			735,130
Other comprehensive income:
Loss on cash flow hedge in joint ventures		—		—			(108,393	)		—			(108,393	)		(65,807	)		(174,200	)
Foreign currency translation effects		—		—			112,249			—			112,249			29,697			141,946
Financial instruments—common transactions		—		—			3,751			—			3,751			2,249			6,000
Change in fair value of available for sale securities		—		—			(25	)		—			(25	)		416			391

Total comprehensive income for the period		—		—			7,582			312,729			320,311			388,956			709,267

Contributions by and distributions to owners of the Company:
Share options exercised—Subsidiaries		—		10,917			—			—			10,917			6,268			17,185
Dividends—non-controlling interests		—		(7,091	)		—			—			(7,091	)		7,091			—
Dividends		—		—			—			(86,470	)		(86,470	)		(687,799	)		(774,269	)
Share-based payment transactions		—		4,742			—			—			4,742			4,101			8,843

Total contributions by and distributions to owners of the Company		—		8,568			—			(86,470	)		(77,902	)		(670,339	)		(748,241	)

Transactions with owners of the Company
Change of shareholding interest in subsidiary		—		37,553			—			—			37,553			1,710,109			1,747,662

Transactions with owners of the Company		—		37,553			—			—			37,553			1,710,109			1,747,662

At September 30, 2016 (Restated)		5,328		4,052,683			(470,625	)		2,606,294			6,193,680			11,704,258			17,897,938

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

Cosan Limited

Consolidated statements of cash flows

For the nine month period ended September 30, 2017 and 2016

(In thousands of Brazilian Reais - R$)


	Note		September 30, 2017			September 31, 2016 (Restated)
Cash flows from operating activities
Profit before taxes				670,830			825,659
Adjustments for:
Depreciation and amortization				1,343,593			1,103,936
Lease and concession				143,277			148,449
Interest in earnings of associates		12		(6,984	)		(3,235	)
Interest in earnings of joint ventures		13		(706,272	)		(1,098,183	)
Losses on disposals of assets				33,841			12,347
Share-based payments				10,929			8,843
Legal proceedings provision				70,020			79,431
Indexation charges, interest and exchange, net				1,938,691			2,558,071
Provisions for employee benefits				108,505			75,770
Allowance for doubtful accounts				23,381			13,546
Deferred revenue				(12,735	)		(13,574	)
Other				(22,191	)		(123,301	)

			3,594,885			3,587,759
Changes in:
Trade receivables				(142,457	)		(77,551	)
Inventories				13,674			(46,070	)
Recoverable taxes				(110,782	)		190,280
Related parties				48,458			13,322
Trade payables				69,611			(71,390	)
Other financial liabilities				60,530			(49,327	)
Employee benefits				(89,069	)		(90,094	)
Provision for legal proceedings				(59,906	)		(58,224	)
Judicial deposits				(30,438	)		(14,361	)
Post-employment benefits				(20,120	)		(20,744	)
Income tax and other tax				(94,985	)		(83,328	)
Discontinued operation				—			14,309
Concessions payable				(84,039	)		(80,714	)
Other assets and liabilities, net				9,172			(207,127	)

				(430,351	)		(581,019	)

Net cash generated by operating activities				3,164,534			3,006,740

Cash flows from investing activities
Capital contribution in associates				(3,967	)		(14,333	)
Non-controlling interest acquisition				—			(54,122	)
Marketable securities				(594,602	)		(876,444	)
Restricted cash				(24,696	)		64,700
Dividends received from associates				7,629			10,392
Dividends received from joint ventures				902,210			658,392
Discontinued operation				—			(5,393	)
Put option exercised paid				—			(186,052	)
Acquisition of property, plant and equipment, intangible assets and investments				(1,698,159	)		(1,596,174	)
Related parties				—			11,338
Cash received on sale of fixed assets, and intangible assets				8,097			—

Net cash used in investing activities				(1,403,488	)		(1,987,696	)

Cosan Limited

Consolidated statements of cash flows

For the nine month period ended September 30, 2017 and 2016

(In thousands of Brazilian Reais - R$)


Cash flows from financing activities
Loans and borrowings and debentures raised	16	4,305,339		5,933,587
Amortization of principal on loans, borrowings and debentures	16	(1,742,219	)	(6,218,311	)
Payment of interest on loans, borrowings and debentures	16	(1,147,271	)	(1,104,575	)
Derivative financial instruments		(291,891	)	(248,663	)
Payment of principal on financing leases		(290,881	)	(322,455	)
Payment of interest on financing leases		(231,351	)	(266,173	)
Real estate credit certificates		(97,334	)	(95,739	)
Proceeds from issuing shares		1,895		1,979,894
Non-controlling interest subscription		20,375		28,764
Dividends paid		(689,656	)	(968,778	)
Acquisition of non-controlling interest		(285,972	)	—
Payments to redeem entity’s shares		(79,447	)	—
Share options exercised—subsidiaries		34,500		17,185

Net cash used in financing activities		(493,913	)	(1,265,264	)

Increase (decrease) in cash and cash equivalents		1,267,133		(246,220	)

Cash and cash equivalents at beginning of the period		4,499,588		3,505,824

Effect of exchange rate fluctuations on cash held		35,090		(101,708	)

Cash and cash equivalents at end of the period		5,801,811		3,157,896

Supplemental cash flow information
Income taxes paid		37,080		51,062

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

Cosan Limited

Notes to the consolidated financial statements

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

1	Operations

Cosan Limited (“Cosan”) was incorporated in Bermuda on April 30, 2007. Cosan’s class A common shares are traded on the New York Stock Exchange (NYSE) (ticker—CZZ). The BDRs (Brazilian Depositary Receipts) representing Cosan’s class A common shares are listed on the Brazilian Stock Exchange (B3) (ticker—CZLT33). Mr. Rubens Ometto Silveira Mello is the ultimate controlling shareholder of Cosan. Cosan controls its subsidiaries Cosan S.A. Indústria e Comércio (“Cosan S.A.”) and Cosan Logística S.A. (“Cosan Logística”) through a 62.45% and 72.40% interest, respectively. Cosan, Cosan S.A., Cosan Logística and its subsidiaries are collectively referred to as the “Company”.

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

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

2	Basis of preparation

2.1 Statement of compliance

The consolidated interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting, as issued by the International Accounting Standards Board (IASB). They do not include all the information required for a complete set of IFRS financial statements. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Company’s financial position and performance since the last annual consolidated financial statements as at and for the year ended December 31, 2016.

The significant judgments made by management in applying the Company’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended December 31, 2016, except for the adoption of new standards and interpretations effective as of January 1, 2017. The Company has not early adopted any other standard, interpretation or amendment that has been issued.

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

These consolidated interim financial statements were authorized for issue by the Board of Directors on November 10, 2017.

Cosan Limited

Notes to the consolidated financial statements

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

3	Significant accounting policies

The accounting policies set out below have been applied consistently by the Company to all periods presented in this consolidated interim financial statements.

3.1 Basis of consolidation

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


	September 30, 2017			December 31, 2016
	September 30, 2017			December 31, 2016
Directly owned subsidiaries
Cosan Logística S.A.		72.40	%		72.42	%
Cosan S.A. Indústria e Comércio		62.45	%		62.29	%
Interest of Cosan S.A. in its subsidiaries
Comma Oil Chemicals Limited		100.00	%		100.00	%
Companhia de Gás de São Paulo – Comgás (i)		63.11	%		62.66	%
Cosan Biomassa S.A. (ii)		100.00	%		100.00	%
Cosan Cayman II Limited		100.00	%		100.00	%
Cosan Global Limited		100.00	%		100.00	%
Cosan Investimentos e Participações S.A.		100.00	%		100.00	%
Cosan Lubes Investments Limited		100.00	%		100.00	%
Cosan Lubrificantes e Especialidades S.A.		100.00	%		100.00	%
Cosan Luxembourg S.A.		100.00	%		100.00	%
Cosan Overseas Limited		100.00	%		100.00	%
Cosan Paraguay S.A.		100.00	%		100.00	%
Cosan US, Inc.		100.00	%		100.00	%
Ilha Terminal Distribuição de Produtos Químicos Ltda.		100.00	%		100.00	%
Pasadena Empreendimentos e Participações S.A.		100.00	%		100.00	%
Zip Lube S.A.		100.00	%		100.00	%
Rumo S.A. (iii)		1.71	%		0.86	%

Cosan Limited

Notes to the consolidated financial statements

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


	September 30, 2017			December 31, 2016
Interest of Cosan Logística S.A. in its subsidiaries
Rumo S.A.		28.47	%		28.37	%
Logispot Armazéns Gerais S.A.		14.52	%		14.47	%
Elevações Portuárias S.A.		28.47	%		28.37	%
Rumo Luxembourg Sarl		28.47	%		28.37	%
Rumo Intermodal S.A.		28.47	%		28.37	%
Rumo Malha Oeste S.A.		28.47	%		28.37	%
Rumo Malha Paulista S.A.		28.47	%		28.37	%
Rumo Malha Sul S.A.		28.47	%		28.37	%
Rumo Malha Norte S.A.		28.33	%		28.22	%
Boswells S.A.		28.47	%		28.37	%
Brado Holding S.A.		28.47	%		28.37	%
ALL Serviços Ltda.		28.47	%		28.37	%
ALL Argentina S.A.		28.47	%		25.81	%
Paranaguá S.A.		28.47	%		28.32	%
ALL Rail Management Ltda.		14.24	%		14.19	%
ALL Armazéns Gerais Ltda.		28.47	%		28.37	%
Portofer Ltda.		28.47	%		28.37	%
Brado Logística e Participações S.A.		17.71	%		17.65	%
Brado Logística S.A.		17.71	%		17.65	%
ALL Mesopotâmica S.A.		20.09	%		20.02	%
ALL Central S.A.		20.94	%		20.87	%
PGT S.A.		28.47	%		28.37	%

⁽ⁱ⁾	As of September 30, 2017, the Company increased its interest, in Comgás to 63.11% due to the capital increase arising from the partial use of the goodwill tax benefit, according to Ordinary / Extraordinary General Meeting of April 20, 2017, of the subsidiary Comgás.

⁽ⁱⁱ⁾	The Company recorded in the first quarter of 2017, a put option for the repurchase of shares of non-controlling shareholders, according to the shareholder agreement.

⁽ⁱⁱⁱ⁾

The direct subsidiary Cosan S.A has a financial investment of 22,959,974 shares of Rumo SA, which is an indirect subsidiary of the Company. Therefore, for the consolidated financial statements of the Company, the interest of 1.71% (0.86% stake as of December 31, 2016) in the share capital of Rumo S.A is recognized as an equity investment.

Management has concluded that there are no material uncertainties that cast doubt on the continuity of the subsidiaries. Although they had a combined amount of uncovered liabilities of R$ 101,363 (Note 12) as of September 30, 2017, no events or conditions were identified that individually or collectively could raise significant doubts related to their ability to maintain their operational continuity. The subsidiaries have the financial support of the Company.

Cosan Limited

Notes to the consolidated financial statements

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

4	New standards and interpretations not yet effective

A number of new standards and amendments to standards are effective for annual periods beginning after January 1, 2017 and earlier application is permitted; however, the Group has not early adopted the following new or amended standards in preparing these consolidated interim financial statements.

IFRS

15—Revenue from contracts with customers

This standard combines, enhances and replaces specific guidance on recognizing revenue with a single standard. It defines a new five-step model to recognize revenue from customer contracts. The Company has undertaken a review of the main types of commercial arrangements used with customers under this model and has tentatively concluded that the application of IFRS 15 will not have a material impact on the consolidated results or financial position. The effects identified so far are as follows

(i)

Recognition of incremental costs to obtain a contract as an intangible asset; and

(ii)

Presentation of revenue from sales of lubricants segregated from services rendered, previously disclosed in other income items in note 6—Operating segment.

This standard is mandatory for the accounting period beginning on January 1, 2018. The Company is planning to apply the standard retrospectively, utilizing the practical expedient to not restate contracts that begin and end within the same annual accounting period.

IFRS

9—Financial instruments

The standard addresses the accounting principles for the financial reporting of financial assets and financial liabilities, including classification, measurement, impairment, derecognition and hedge accounting. It will be mandatory for the accounting period beginning on January 1, 2018.

In order to measure the consequences of this new standard, the Group has engaged a review of the business model corresponding to the different portfolios of financial assets and of the characteristics of these financial assets, such as equity instruments and instruments whose cash flows are solely payments of principal and interest (“SPPI”). This review will also support the designation of equity instruments at fair value through other comprehensive income when appropriate as per the business objective.

There is no expected impact on the Company accounting for financial liabilities, as the new requirements only affect the accounting for financial liabilities that are designated at fair value through profit or loss attributable to changes in its liquidity risk, and the Company does not have any such liabilities.

The impact of the new impairment model is also under review. This analysis requires the identification of the credit risk associated with the counterparties and, considering that the majority of Company’s financial assets are trade receivables, integrates as well some statistical data reflecting the actual past experience of occurred loss for default.

In addition, the Company is reviewing the definition of a hedge relationship in accordance with risk management activities and policies.

The Company plans to apply the standard retrospectively, using the practical file with cumulative effect of the initial application.

Cosan Limited

Notes to the consolidated financial statements

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

IFRS

16 Leases

The Company began an initial assessment of the potential impact on its financial statements. So far, the most significant impact identified is that the subsidiary Rumo S.A will recognize new assets and liabilities for its operating leases related to concession. The analyses of the impacts on investments in joint ventures are ongoing.

The Company has not yet quantified the impact of adopting IFRS 16 on its assets and liabilities. The quantitative effect of the adoption of IFRS 16 will depend specifically on the transition method chosen, the use of practical files and recognition exemptions, and any additional leases that the Company will enter into. The Company expects to disclose its transition approach and quantitative information prior to adoption.

Amendments to IAS 7 Statement of Cash Flows

The amendments require entities to provide disclosures about changes in their liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes (such as foreign exchange gains or losses). On initial application of the amendment, the Company is not required to provide comparative information for preceding periods. The Company is not required to provide additional disclosures in its interim consolidated financial statements, but will disclose additional information in its annual consolidated financial statements for the year ended December 31, 2017.

Amendments to IAS 12 Income Taxes: Recognition of Deferred Tax Assets for Unrecognized Losses

The amendments clarify that an entity needs to consider whether tax law restricts the sources of taxable profits against which it may make deductions on the reversal of that deductible temporary difference. Furthermore, the amendments provide guidance on how the Company should determine future taxable profits and explain the circumstances in which taxable profit may include the recovery of some assets for more than their carrying amount.

Company is required to apply the amendments retrospectively. However, on initial application of the amendments, the change in the opening equity of the earliest comparative period may be recognized in opening retained earnings (or in another component of equity, as appropriate), without allocating the change between opening retained earnings and other components of equity. The Company is not required to provide additional disclosures in its interim consolidated financial statements, but will disclose additional information in its annual consolidated financial statements for the year ended December 31, 2017.

There are no other IFRS standards or IFRIC interpretations that have not come into effect and are expected to have a material impact on the Company.

Cosan Limited

Notes to the consolidated financial statements

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

5	Changes adopted

The changes below were applied for the first time in 2016 and did not result in a significant impact on the Company’s annual consolidated financial statements or in the interim financial statements.

Correction of immaterial errors – Tax installments

During the year of 2016, the Company identified an error in the accounting record of tax installment liabilities, related to others federal taxes than income tax, referring to prior years.

Management concluded that the effect of the correction of error had no material impact on the Company’s interim financial statements for the three and nine months periods ended September 30, 2016.

The impacts of the restatement for the three and nine months periods ended September 30, 2016 are as follows:

Cosan Limited

Notes to the consolidated financial statements

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


	July 1, 2016 to September 30, 2016									January 1, 2016 to September 30, 2016
	As issued			Tax installment			Restated			As issued			Tax installment			Restated
Net sales		3,272,803			—			3,272,803			9,732,259			—			9,732,259
Cost of sales		(2,036,006	)		—			(2,036,006	)		(6,097,797	)		—			(6,097,797	)

Gross profit		1,236,797			—			1,236,797			3,634,462			—			3,634,462

Operating expense		(513,662	)		—			(513,662	)		(1,572,677	)		—			(1,572,677	)

Income before interest in earnings of investees and finance results		723,135			—			723,135			2,061,785			—			2,061,785

Interest in earnings of associates and joint ventures		412,638			—			412,638			1,101,418			—			1,101,418
Finance results		(768,387	)		(2,538	)		(770,925	)		(2,329,930	)		(7,614	)		(2,337,544	)

Profit before taxes		367,386			(2,538	)		364,848			833,273			(7,614	)		825,659

Income tax expense		(69,946	)		863			(69,083	)		(151,978	)		2,589			(149,389	)

Profit from continuing operations		297,440			(1,675	)		295,765			681,295			(5,025	)		676,270

Profit from discontinued operations, net of tax		18,312			—			18,312			58,860			—			58,860

Profit for the period		315,752			(1,675	)		314,077			740,155			(5,025	)		735,130

Net income attributable to:
Owners of the Parent		158,193			(1,042	)		157,151			315,865			(3,136	)		312,729
Non-controlling interests		157,559			(633	)		156,926			424,290			(1,889	)		422,401

Cosan Limited

Notes to the consolidated financial statements

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

6	Operating segments

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

Reported segments

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

(ii) Raízen Combustíveis : distribution and marketing of fuels, mainly through a franchised network of service stations under the brand Shell throughout Brazil;

(iii) Comgás : distribution of piped natural gas to part of the State of São Paulo (approximately 180 municipalities, including the region called Greater São Paulo) to customers in the industrial, residential, commercial, automotive, thermo generation and cogeneration sectors;

(iv) Cosan Logística: logistics services for transport, storage and port loading of commodities, mainly for sugar products, leasing or lending of locomotives, wagons and other railway equipment; and

(v) Moove : production and distribution of lubricants under the Mobil brand in Brazil, Bolivia, Uruguay and Paraguay, as well as European and Asian market with a Comma trademark.

Reconciliation

(i) Cosan Corporate : other investments, in addition to the corporate activities of the Company. The Cosan Corporate segment’s includes the subsidiaries responsible for raising funds for the group.

Although Raízen Energia and Raízen Combustíveis are equity accounted joint ventures and are no longer proportionally consolidated since adoption of IFRS 11, senior management continues to review segment information. A reconciliation of these segments is presented in the column “Deconsolidated effects IFRS 11”.

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

Cosan Limited

Notes to the consolidated financial statements

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


	July 1, 2017 to September 30, 2017
	Reported segments															Reconciliation												Additional information
	Raízen Energia			Raízen Combustíveis			Comgás			Moove			Logistics			Cosan Corporate			Deconsolidated effects IFRS 11			Segment eliminations / adjustments			Total consolidated			Cosan S.A			Cosan Logística
Statement of income or loss:
Net sales		3,839,928			18,452,780			1,535,083			534,319			1,648,910			1,963			(22,292,708	)		(9,252	)		3,711,023			2,071,360			1,648,910
Domestic market		1,779,983			18,452,780			1,535,083			412,277			1,570,567			1,963			(20,232,763	)		(9,252	)		3,510,638			1,949,318			1,570,567
External market		2,059,945			—			—			122,042			78,343			—			(2,059,945	)		—			200,385			122,042			78,343
Cost of sales		(2,933,820	)		(17,324,968	)		(935,951	)		(384,190	)		(1,090,373	)		(4,373	)		20,258,788			9,252			(2,405,635	)		(1,324,509	)		(1,090,373	)
Gross profit		906,108			1,127,812			599,132			150,129			558,537			(2,410	)		(2,033,920	)		—			1,305,388			746,851			558,537
Selling expenses		(274,891	)		(353,871	)		(154,513	)		(96,630	)		(3,983	)		(143	)		628,762			—			(255,269	)		(251,286	)		(3,983	)
General and administrative expenses		(164,978	)		(113,835	)		(88,301	)		(23,364	)		(60,617	)		(43,666	)		278,813			—			(215,948	)		(151,540	)		(60,617	)
Other income (expense), net		1,933			70,798			(11,635	)		(3,739	)		(2,043	)		(13,093	)		(72,731	)		—			(30,510	)		(28,422	)		(2,043	)
Finance results		75,498			(72,060	)		(57,266	)		(12,472	)		(388,064	)		(64,976	)		(3,438	)		—			(522,778	)		(10,744	)		(388,064	)
Finance expense		(234,085	)		(63,007	)		(132,868	)		(9,134	)		(492,646	)		(206,531	)		297,092			—			(841,179	)		(330,543	)		(492,646	)
Finance income		166,089			27,914			75,617			3,254			63,542			34,878			(194,003	)		—			177,291			191,299			63,542
Foreign exchange losses, net		23,242			98,999			41,436			3,603			110,390			138,165			(122,241	)		—			293,594			211,634			110,390
Derivatives		120,252			(135,966	)		(41,451	)		(10,195	)		(69,350	)		(31,488	)		15,714			—			(152,484	)		(83,134	)		(69,350	)
Interest in earnings of associates		(388	)		—			—			(1,459	)		4,043			429,909			388			(426,835	)		5,658			1,616			4,043
Interest in earnings of joint ventures		—			—			—			—			—			410,178			—			—			410,178			410,178			—
Income tax expense benefit		(150,269	)		(213,747	)		(99,607	)		(5,014	)		(32,423	)		(11,849	)		364,016			—			(148,893	)		(147,669	)		(32,423	)

Profit (loss) from continuing operations		393,013			445,097			187,810			7,451			75,450			703,950			(838,110	)		(426,835	)		547,826			568,984			75,450
Total net income attributable to:
Owners of the Parent		393,013			428,280			118,518			7,451			19,472			703,709			(821,293	)		(601,040	)		248,110			499,692			19,472
Non-controlling interests		—			16,817			69,292			—			55,978			241			(16,817	)		174,205			299,716			69,292			55,978

		393,013			445,097			187,810			7,451			75,450			703,950			(838,110	)		(426,835	)		547,826			568,984			75,450
Other selected data:
Depreciation and amortization		582,589			170,225			118,570			19,537			304,240			3,892			(752,814	)		—			446,239			141,999			304,240
EBITDA		1,050,373			901,129			463,253			44,474			800,177			784,667			(1,951,502	)		(426,835	)		1,665,736			869,396			800,177
Additions to PP&E, intangible and biological assets		414,925			171,897			73,083			15,645			473,771			4,907			(586,822	)		—			567,406			92,383			473,771
Reconciliation of EBITDA:
Profit (loss) for the period		393,013			445,097			187,810			7,451			75,450			703,950			(838,110	)		(426,835	)		547,826			568,984			75,450
Income tax and social contribution		150,269			213,747			99,607			5,014			32,423			11,849			(364,016	)		—			148,893			147,669			32,423
Finance result, net		(75,498	)		72,060			57,266			12,472			388,064			64,976			3,438			—			522,778			10,744			388,064
Depreciation and amortization		582,589			170,225			118,570			19,537			304,240			3,892			(752,814	)		—			446,239			141,999			304,240

EBITDA		1,050,373			901,129			463,253			44,474			800,177			784,667			(1,951,502	)		(426,835	)		1,665,736			869,396			800,177

Cosan Limited

Notes to the consolidated financial statements

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


	January 1, 2017 to September 30, 2017

	Reported segments															Reconciliation												Additional information
	Raízen Energia			Raízen Combustíveis			Comgás			Moove			Logistics			Cosan Corporate			Deconsolidated effects IFRS 11			Segment eliminations / adjustments			Total consolidated			Cosan S.A			Cosan Logística
Statement of income or loss:
Net sales		9,859,076			53,414,974			4,041,014			1,492,481			4,354,227			2,326			(63,274,050	)		(24,786	)		9,865,262			5,535,783			4,354,227
Domestic market		5,122,996			53,414,974			4,041,014			1,170,189			4,148,518			2,326			(58,537,970	)		(24,786	)		9,337,261			5,213,491			4,148,518
External market		4,736,080			—			—			322,292			205,709			—			(4,736,080	)		—			528,001			322,292			205,709
Cost of sales		(8,261,849	)		(50,571,173	)		(2,522,881	)		(1,052,605	)		(3,010,559	)		(5,990	)		58,833,022			24,786			(6,567,249	)		(3,581,438	)		(3,010,559	)
Gross profit		1,597,227			2,843,801			1,518,133			439,876			1,343,668			(3,664	)		(4,441,028	)		—			3,298,013			1,954,345			1,343,668
Selling expenses		(605,608	)		(995,950	)		(486,543	)		(283,921	)		(23,623	)		(200	)		1,601,558			—			(794,287	)		(770,664	)		(23,623	)
General and administrative expenses		(452,230	)		(332,499	)		(246,495	)		(64,758	)		(189,803	)		(125,175	)		784,729			—			(626,231	)		(425,667	)		(189,803	)
Other income (expense), net		(91,094	)		250,073			(21,523	)		(3,906	)		(6,445	)		(62,395	)		(158,979	)		—			(94,269	)		(87,776	)		(6,445	)
Finance results		112,478			(315,346	)		(139,883	)		(36,648	)		(1,272,141	)		(376,980	)		202,868			—			(1,825,652	)		(402,721	)		(1,272,141	)
Finance expense		(685,640	)		(182,876	)		(489,187	)		(27,519	)		(1,440,686	)		(649,155	)		868,516			—			(2,606,547	)		(1,138,039	)		(1,440,686	)
Finance income		546,300			98,503			349,573			15,917			186,183			143,387			(644,803	)		—			695,060			615,194			186,183
Foreign exchange losses, net		(15,935	)		49,092			27,771			(23	)		(18,074	)		90,187			(33,157	)		—			99,861			134,586			(18,074	)
Derivatives		267,753			(280,065	)		(28,040	)		(25,023	)		436			38,601			12,312			—			(14,026	)		(14,462	)		436
Interest in earnings of associates		(48,159	)		—			—			(5,606	)		7,200			611,154			48,159			(605,764	)		6,984			(218	)		7,200
Interest in earnings of joint ventures		—			—			—			—			—			706,272			—			—			706,272			706,272			—
Income tax expense benefit		(56,558	)		(446,914	)		(226,136	)		(18,527	)		(63,056	)		79,017			503,472			—			(228,702	)		(197,229	)		(63,056	)

Profit (loss) from continuing operations		456,056			1,003,165			397,553			26,510			(204,200	)		828,029			(1,459,221	)		(605,764	)		442,128			776,342			(204,200	)
Total net income attributable to:
Owners of the Company		456,056			958,065			250,177			26,510			(60,999	)		821,154			(1,414,121	)		(812,398	)		224,444			628,966			(60,999	)
Non-controlling interests		—			45,100			147,376			—			(143,201	)		6,875			(45,100	)		206,634			217,684			147,376			(143,201	)

		456,056			1,003,165			397,553			26,510			(204,200	)		828,029			(1,459,221	)		(605,764	)		442,128			776,342			(204,200	)
Other selected data:
Depreciation and amortization		1,536,836			482,815			379,388			59,089			892,940			12,176			(2,019,651	)		—			1,343,593			450,653			892,940
EBITDA		1,936,972			2,248,240			1,142,960			140,774			2,023,937			1,138,168			(4,185,212	)		(605,764	)		3,840,075			1,826,945			2,023,937
Additions to PP&E, intangible and biological assets		1,715,483			591,200			244,530			22,415			1,423,835			7,379			(2,306,683	)		—			1,698,159			272,362			1,423,835
Reconciliation of EBITDA:
Profit (loss) for the period		456,056			1,003,165			397,553			26,510			(204,200	)		828,029			(1,459,221	)		(605,764	)		442,128			776,342			(204,200	)
Income tax and social contribution		56,558			446,914			226,136			18,527			63,056			(79,017	)		(503,472	)		—			228,702			197,229			63,056
Finance result, net		(112,478	)		315,346			139,883			36,648			1,272,141			376,980			(202,868	)		—			1,825,652			402,721			1,272,141
Depreciation and amortization		1,536,836			482,815			379,388			59,089			892,940			12,176			(2,019,651	)		—			1,343,593			450,653			892,940

EBITDA		1,936,972			2,248,240			1,142,960			140,774			2,023,937			1,138,168			(4,185,212	)		(605,764	)		3,840,075			1,826,945			2,023,937

Cosan Limited

Notes to the consolidated financial statements

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


	July 1, 2016 to September 30, 2016 (Restated)

	Reported segments																	Reconciliation												Additional information
	Raízen Energia			Raízen Combustíveis			Comgás			Radar		Moove			Logistics			Cosan Corporate			Deconsolidated effects IFRS 11			Segment eliminations / adjustments			Total consolidated			Cosan S.A			Cosan Logística
Statement of income or loss:
Net sales		3,148,411			17,380,867			1,379,129			—		463,582			1,437,783			48			(20,529,278	)		(7,739	)		3,272,803			1,842,759			1,437,783
Domestic market		1,274,667			17,380,867			1,379,129			—		355,192			1,346,120			48			(18,655,534	)		(7,739	)		3,072,750			1,734,369			1,346,120
External market		1,873,744			—			—			—		108,390			91,663			—			(1,873,744	)		—			200,053			108,390			91,663
Cost of sales		(2,480,327	)		(16,425,140	)		(763,700	)		—		(339,903	)		(939,011	)		(1,131	)		18,905,467			7,739			(2,036,006	)		(1,104,735	)		(939,011	)
Gross profit		668,084			955,727			615,429			—		123,679			498,772			(1,083	)		(1,623,811	)		—			1,236,797			738,024			498,772
Selling expenses		(199,486	)		(308,615	)		(170,632	)		—		(92,089	)		(2,829	)		(14	)		508,101			—			(265,564	)		(262,735	)		(2,829	)
General and administrative expenses		(127,330	)		(103,440	)		(84,632	)		—		(17,742	)		(87,337	)		(41,485	)		230,770			—			(231,196	)		(141,080	)		(87,337	)
Other income (expense), net		(20,404	)		412,126			726			—		182			4,763			(22,573	)		(391,722	)		—			(16,902	)		(21,665	)		4,763
Finance results		70,315			(146,529	)		(55,670	)		—		(15,563	)		(423,959	)		(257,192	)		76,214			(18,541	)		(770,925	)		(306,040	)		(423,959	)
Finance expense		(223,405	)		(152,843	)		(190,177	)		—		(16,161	)		(501,198	)		(416,773	)		376,248			(18,541	)		(1,142,850	)		(592,909	)		(501,198	)
Finance income		172,270			63,215			134,545			—		1,157			76,981			50,725			(235,485	)		—			263,408			186,353			76,981
Foreign exchange losses, net		2,706			(45,351	)		(12,528	)		—		1,219			(2,914	)		(33,466	)		42,645			—			(47,689	)		(52,518	)		(2,914	)
Derivatives		118,744			(11,550	)		12,490			—		(1,778	)		3,172			142,322			(107,194	)		—			156,206			153,034			3,172
Interest in earnings of associates		(10,305	)		(2,830	)		—			—		(1,553	)		2,628			310,316			13,135			(302,998	)		8,393			6,277			2,628
Interest in earnings of joint ventures		—			—			—			—		—			—			404,245			—			—			404,245			404,245			—
Income tax expense benefit		(105,808	)		(258,783	)		(109,356	)		—		(92	)		(51,174	)		85,235			364,591			6,304			(69,083	)		(24,214	)		(51,174	)

Profit (loss) from continuing operations		275,066			547,656			195,865			—		(3,178	)		(59,136	)		477,449			(822,722	)		(315,235	)		295,765			392,812			(59,136	)
Profit from discontinued operation, net of tax		—			—			—			18,312		—			—			6,584			—			(6,584	)		18,312			18,312			—
Total net income attributable to:
Owners of the Parent		274,978			534,943			122,306			6,582		(3,178	)		(17,764	)		484,033			(809,921	)		(434,828	)		157,151			325,837			(17,764	)
Non-controlling interests		88			12,713			73,559			11,730		—			(41,372	)		—			(12,801	)		113,009			156,926			85,287			(41,372	)

		275,066			547,656			195,865			18,312		(3,178	)		(59,136	)		484,033			(822,722	)		(321,819	)		314,077			411,124			(59,136	)
Other selected data:
Depreciation and amortization		477,902			145,552			134,064			—		23,748			226,384			3,423			(623,454	)		—			387,619			161,235			226,384
EBITDA		788,461			1,098,520			494,955			—		36,225			642,381			652,829			(1,886,981	)		(302,998	)		1,523,392			884,301			642,381
Additions to PP&E, intangible and biological assets		354,163			191,632			89,291			—		11,188			440,858			5,956			(545,795	)		—			547,293			106,435			440,858
Reconciliation of EBITDA:
Profit (loss) for the period		275,066			547,656			195,865			—		(3,178	)		(59,136	)		477,449			(822,722	)		(315,235	)		295,765			392,812			(59,136	)
Income tax and social contribution		105,808			258,783			109,356			—		92			51,174			(85,235	)		(364,591	)		(6,304	)		69,083			24,214			51,174
Finance result, net		(70,315	)		146,529			55,670			—		15,563			423,959			257,192			(76,214	)		18,541			770,925			306,040			423,959
Depreciation and amortization		477,902			145,552			134,064			—		23,748			226,384			3,423			(623,454	)		—			387,619			161,235			226,384

EBITDA		788,461			1,098,520			494,955			—		36,225			642,381			652,829			(1,886,981	)		(302,998	)		1,523,392			884,301			642,381

Cosan Limited

Notes to the consolidated financial statements

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


	January 1, 2016 to September 30, 2016 (Restated)

	Reported segments																	Reconciliation												Additional information
	Raízen Energia			Raízen Combustíveis			Comgás			Radar		Moove			Logistics			Cosan Corporate			Deconsolidated effects IFRS 11			Segment eliminations / adjustments			Total consolidated			Cosan S.A			Cosan Logística
Statement of income or loss:
Net sales		9,657,588			50,252,193			4,333,163			—		1,431,697			3,999,921			425			(59,909,781	)		(32,947	)		9,732,259			5,765,284			3,999,922
Domestic market		3,955,267			50,252,193			4,333,163			—		1,096,072			3,804,610			425			(54,207,460	)		(32,947	)		9,201,323			5,429,659			3,804,611
External market		5,702,321			—			—			—		335,625			195,311			—			(5,702,321	)		—			530,936			335,625			195,311
Cost of sales		(7,364,106	)		(47,690,919	)		(2,321,714	)		—		(1,081,183	)		(2,717,621	)		(10,226	)		55,055,025			32,947			(6,097,797	)		(3,413,123	)		(2,717,621	)
Gross profit		2,293,482			2,561,274			2,011,449			—		350,514			1,282,300			(9,801	)		(4,854,756	)		—			3,634,462			2,352,161			1,282,301
Selling expenses		(568,201	)		(965,232	)		(485,102	)		—		(271,431	)		(3,553	)		(113	)		1,533,433			—			(760,199	)		(756,647	)		—
General and administrative expenses		(405,951	)		(324,245	)		(242,585	)		—		(53,482	)		(260,066	)		(173,125	)		730,196			—			(729,258	)		(417,730	)		(263,620	)
Other income (expense), net		16,544			610,196			(1,930	)		—		2,037			(3,033	)		(80,294	)		(626,740	)		—			(83,220	)		(80,187	)		(3,033	)
Finance results		486,213			(426,235	)		(197,677	)		—		(59,827	)		(1,257,677	)		(917,302	)		(59,978	)		94,939			(2,337,544	)		(1,018,250	)		(1,257,677	)
Finance expense		(697,432	)		(208,240	)		(564,425	)		—		(38,841	)		(1,448,311	)		(910,483	)		905,672			94,939			(2,867,121	)		(1,435,305	)		(1,448,311	)
Finance income		500,169			177,425			366,171			—		2,967			212,632			253,206			(677,594	)		—			834,976			621,960			212,632
Foreign exchange losses, net		(57,513	)		736,752			230,033			—		46,567			79,144			656,122			(679,239	)		—			1,011,866			1,018,309			79,144
Derivatives		740,989			(1,132,172	)		(229,456	)		—		(70,520	)		(101,142	)		(916,147	)		391,183			—			(1,317,265	)		(1,223,214	)		(101,142	)
Interest in earnings of associates		(59,080	)		(310	)		—			—		(4,575	)		8,751			926,981			59,390			(927,922	)		3,235			(5,515	)		8,751
Interest in earnings of joint ventures		—			—			—			—		—			—			1,098,183			—			—			1,098,183			1,098,183			—
Income tax expense benefit		(553,720	)		(443,006	)		(377,118	)		—		4,553			(43,871	)		299,326			996,726			(32,279	)		(149,389	)		(73,238	)		(43,871	)

Profit (loss) from continuing operations		1,209,287			1,012,442			707,037			—		(32,211	)		(277,149	)		1,143,855			(2,221,729	)		(865,262	)		676,270			1,098,777			(277,149	)
Profit from discontinued operation, net of tax		—			—			—			58,860		—			—			24,788			—			(24,788	)		58,860			58,860			—
Total net income attributable to:
Owners of the Company		1,209,199			977,481			436,250			24,788		(32,211	)		(76,814	)		1,168,643			(2,186,680	)		(1,207,928	)		312,729			852,779			(76,814	)
Non-controlling interests		88			34,961			270,787			34,072		—			(200,335	)		—			(35,049	)		317,878			422,401			304,858			(200,335	)

		1,209,287			1,012,442			707,037			58,860		(32,211	)		(277,149	)		1,168,643			(2,221,729	)		(890,050	)		735,130			1,157,637			(277,149	)
Other selected data:
Depreciation and amortization		1,662,345			457,824			374,871			—		66,334			651,817			10,914			(2,120,169	)		—			1,103,936			452,119			651,817
EBITDA		2,939,139			2,339,507			1,656,703			—		89,397			1,676,216			1,772,745			(5,278,646	)		(927,922	)		4,267,139			2,642,384			1,676,216
Additions to PP&E, intangible and biological assets		1,522,527			596,643			292,751			—		29,876			1,264,952			8,595			(2,119,170	)		—			1,596,174			331,222			1,264,952
Reconciliation of EBITDA:
Profit (loss) for the period		1,209,287			1,012,442			707,037			—		(32,211	)		(277,149	)		1,143,855			(2,221,729	)		(865,262	)		676,270			1,098,777			(277,149	)
Income tax and social contribution		553,720			443,006			377,118			—		(4,553	)		43,871			(299,326	)		(996,726	)		32,279			149,389			73,238			43,871
Finance result, net		(486,213	)		426,235			197,677			—		59,827			1,257,677			917,302			59,978			(94,939	)		2,337,544			1,018,250			1,257,677
Depreciation and amortization		1,662,345			457,824			374,871			—		66,334			651,817			10,914			(2,120,169	)		—			1,103,936			452,119			651,817

EBITDA		2,939,139			2,339,507			1,656,703			—		89,397			1,676,216			1,772,745			(5,278,646	)		(927,922	)		4,267,139			2,642,384			1,676,216

Cosan Limited

Notes to the consolidated financial statements

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


	September 30, 2017

	Reported segments															Reconciliation												Additional information
Statement of financial position:	Raízen Energia			Raízen Combustíveis			Comgás			Moove			Logistics			Cosan Corporate			Deconsolidated effects IFRS 11			Segment elimination			Total consolidated			Cosan S.A			Cosan Logística
Cash and cash equivalents		2,238,194			206,143			2,141,061			132,169			189,999			3,338,582			(2,444,337	)		—			5,801,811			3,720,495			189,999
Marketable securities		—			—			313,503			927			1,516,869			212,326			—			—			2,043,625			526,757			1,516,869
Trade receivables		649,176			2,271,337			641,128			283,656			326,417			728			(2,920,513	)		—			1,251,929			925,512			326,417
Derivative financial instruments		383,897			15,128			433,546			—			39,978			568,641			(399,025	)		—			1,042,165			1,002,188			39,978
Inventories		2,593,328			1,984,880			92,010			260,849			258,591			2,652			(4,578,208	)		—			614,102			355,511			258,591
Other financial assets		757,857			—			—			—			—			—			(757,857	)		—			—			277,586			—
Other current assets		2,717,880			1,620,337			84,906			115,458			416,951			256,437			(4,338,217	)		(89,947	)		783,805			404,564			416,951
Other non-current assets		3,043,082			1,219,038			355,579			80,161			2,749,434			1,503,954			(4,262,120	)		(1,898	)		4,687,230			1,933,280			2,749,434
Investments in associates		314,948			—			—			13,627			42,481			11,386,105			(314,948	)		(11,154,868	)		287,345			244,864			42,481
Investments in joint ventures		—			—			—			—			—			8,695,007			—			—			8,695,007			8,695,007			—
Biological assets		786,566			—			—			—			—			—			(786,566	)		—			—			—			—
Property, plant and equipment		10,902,109			2,337,036			—			237,114			10,945,776			147,115			(13,239,145	)		—			11,330,005			382,314			10,945,776
Intangible assets and goodwill		3,681,932			4,619,618			8,444,333			738,762			7,659,407			6,006			(8,301,550	)		—			16,848,508			9,189,055			7,659,407
Loans, borrowings and debentures		(10,873,300	)		(1,012,686	)		(3,898,129	)		(409,431	)		(10,127,207	)		(6,881,655	)		11,885,986			—			(21,316,422	)		(8,919,607	)		(10,127,207	)
Derivative financial instruments		(184,425	)		(277,705	)		—			(22,197	)		(29,748	)		(218,834	)		462,130			—			(270,779	)		(241,031	)		(29,748	)
Trade payables		(1,565,037	)		(1,485,747	)		(1,413,704	)		(281,461	)		(488,960	)		(5,121	)		3,050,784			—			(2,189,246	)		(1,700,274	)		(488,960	)
Real estate credit certificates		—			—			—			—			(115,822	)		—			—			—			(115,822	)		—			(115,822	)
Employee benefits payable		(388,531	)		(69,419	)		(54,701	)		(31,350	)		(157,624	)		(23,828	)		457,950			—			(267,503	)		(109,705	)		(157,624	)
Preferred shareholders payable in subsidiaries		—			—			—			—			—			(1,555,517	)		—			—			(1,555,517	)		(1,555,516	)		—
Lease		—			—			—			—			(1,014,251	)		—			—			—			(1,014,251	)		—			(1,014,251	)
Other current liabilities		(1,323,492	)		(1,890,172	)		(200,869	)		(174,708	)		(773,239	)		(372,593	)		3,213,664			91,126			(1,430,283	)		(660,027	)		(773,239	)
Other non-current liabilities		(1,368,835	)		(4,229,282	)		(1,677,131	)		(217,478	)		(5,955,846	)		(1,273,090	)		5,598,117			55,139			(9,068,406	)		(3,156,079	)		(5,955,846	)

Total assets (net of liabilities) allocated by segment		12,365,349			5,308,506			5,261,532			726,098			5,483,206			15,786,915			(17,673,855	)		(11,100,448	)		16,157,303			11,314,894			5,483,206

Total assets		28,068,969			14,273,517			12,506,066			1,862,723			24,145,903			26,117,553			(42,342,486	)		(11,246,713	)		53,385,532			27,657,133			24,145,903

Equity attributable to owners of the Company		12,366,312			5,090,385			5,261,532			726,098			1,489,692			15,786,436			(17,456,697	)		(16,775,810	)		6,487,949			9,436,611			1,489,692
Non-controlling interests		(963	)		218,121			—			—			3,993,514			479			(217,158	)		5,675,362			9,669,354			1,878,283			3,993,514

Total shareholders’ equity		12,365,349			5,308,506			5,261,532			726,098			5,483,206			15,786,915			(17,673,855	)		(11,100,448	)		16,157,303			11,314,894			5,483,206

Cosan Limited

Notes to the consolidated financial statements

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


	December 31, 2016

	Reported segments															Reconciliation												Additional information
Statement of financial position:	Raízen Energia			Raízen Combustíveis			Comgás			Moove			Logistics			Cosan Corporate			Deconsolidated effects IFRS 11			Segment elimination			Total consolidated			Cosan S.A			Cosan Logística
Cash and cash equivalents		2,787,588			757,140			2,108,253			203,855			260,542			1,926,938			(3,544,728	)		—			4,499,588			3,990,930			260,542
Marketable securities		—			—			202,568			10,958			920,413			157,641			—			—			1,291,580			371,167			920,413
Trade receivables		682,813			2,518,713			513,423			240,059			431,461			487			(3,201,526	)		—			1,185,430			753,969			431,461
Derivative financial instruments		1,243,260			178,060			437,137			—			3,669			310,274			(1,421,320	)		—			751,080			747,411			3,669
Inventories		2,293,492			2,108,825			114,745			228,941			284,579			2,487			(4,402,317	)		—			630,752			346,173			284,579
Other financial assets		711,453			—			—			—			—			70,487			(711,453	)		(70,487	)		—			70,487			—
Other current assets		3,030,674			1,456,418			80,758			141,972			422,458			658,550			(4,487,092	)		(107,927	)		1,195,811			793,861			422,458
Other non-current assets		2,852,423			1,089,809			307,306			26,036			2,549,631			1,436,632			(3,942,232	)		(33,225	)		4,286,380			1,761,857			2,549,631
Investments in associates		393,159			—			—			19,400			46,847			11,153,390			(393,159	)		(10,932,690	)		286,947			240,100			46,847
Investments in joint ventures		—			—			—			—			—			8,506,395			—			—			8,506,395			8,506,395			—
Biological assets		1,119,623			—			—			—			—			—			(1,119,623	)		—			—			—			—
Investment property		10,525,166			2,379,438			—			238,346			10,337,119			150,983			(12,904,604	)		—			10,726,448			389,329			10,337,119
Intangible assets and goodwill		3,224,303			4,532,282			8,550,984			770,118			7,781,289			7,048			(7,756,585	)		—			17,109,439			9,328,150			7,781,289
Loans, borrowings and debentures		(11,556,950	)		(1,043,995	)		(4,070,076	)		(471,661	)		(8,523,175	)		(5,273,585	)		12,600,945			—			(18,338,497	)		(9,138,129	)		(8,523,175	)
Derivative financial instruments		(789,193	)		(648,070	)		—			(35,155	)		(12,303	)		(248,386	)		1,437,263			—			(295,844	)		(283,541	)		(12,303	)
Trade payables		(1,147,089	)		(1,148,013	)		(1,226,634	)		(232,690	)		(565,539	)		(8,247	)		2,295,102			—			(2,033,110	)		(1,467,570	)		(565,539	)
Real estate credit certificates		—			—			—			—			(195,745	)		—			—			—			(195,745	)		—			(195,745	)
Employee benefits payable		(314,989	)		(92,573	)		(63,904	)		(30,187	)		(117,149	)		(26,919	)		407,562			—			(238,159	)		(121,009	)		(117,149	)
Preferred shareholders payable in subsidiaries		—			—			—			—			—			(1,769,427	)		—			—			(1,769,427	)		(1,769,427	)		—
Leases		—			—			—			—			(1,397,543	)		—			—			—			(1,397,543	)		—			(1,397,543	)
Other current liabilities		(1,507,193	)		(2,245,227	)		(211,900	)		(168,995	)		(663,083	)		(407,835	)		3,752,420			116,036			(1,335,777	)		(662,235	)		(663,083	)
Other non-current liabilities		(1,367,686	)		(4,714,035	)		(1,549,441	)		(132,414	)		(5,881,195	)		(1,408,841	)		6,081,721			115,892			(8,855,999	)		(3,065,579	)		(5,881,195	)

Total assets (net of liabilities) allocated by segment		12,180,854			5,128,772			5,193,219			808,583			5,682,276			15,238,072			(17,309,626	)		(10,912,401	)		16,009,749			10,792,339			5,682,276

Total assets		28,863,954			15,020,685			12,315,174			1,879,685			23,038,008			24,381,312			(43,884,639	)		(11,144,329	)		50,469,850			27,299,829			23,038,008

Equity attributable to owners of the Company		12,181,817			4,920,333			5,193,219			808,583			1,540,225			15,238,072			(17,102,150	)		(16,507,636	)		6,272,463			8,965,606			1,540,225
Non-controlling interests		(963	)		208,439			—			—			4,142,051			—			(207,476	)		5,595,235			9,737,286			1,826,733			4,142,051

Total shareholders’ equity		12,180,854			5,128,772			5,193,219			808,583			5,682,276			15,238,072			(17,309,626	)		(10,912,401	)		16,009,749			10,792,339			5,682,276

Cosan Limited

Notes to the consolidated financial statements

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

Net sales by segment:


	July 1, 2017 to September 30, 2017			January 1, 2017 to September 30, 2017			July 1, 2016 to September 30, 2016			January 1, 2016 to September 30, 2016
Reported segment
Raízen Energia
Ethanol		1,729,109			4,874,368			1,400,772			4,600,024
Sugar		1,643,065			4,156,307			1,443,030			4,404,639
Cogeneration		364,848			604,623			206,557			401,876
Other		102,906			223,778			98,052			251,049

		3,839,928			9,859,076			3,148,411			9,657,588
Raízen Combustíveis
Fuels		18,452,780			53,414,974			17,380,867			50,252,193

		18,452,780			53,414,974			17,380,867			50,252,193
Comgás
Industrial		961,160			2,562,361			865,824			2,868,654
Residential		255,855			635,758			237,425			590,679
Thermogeneration		—			—			6,713			68,307
Cogeneration		59,587			158,064			51,505			163,414
Automotive		57,623			163,612			53,130			151,107
Commercial		86,308			233,293			78,325			224,626
Construction revenue		95,996			239,110			77,582			231,869
Other		18,554			48,816			8,625			34,507

		1,535,083			4,041,014			1,379,129			4,333,163
Moove
Finished goods		391,934			1,088,521			404,882			1,256,067
Basic oil		76,191			211,649			54,725			163,558
Other		66,194			192,311			3,975			12,072

		534,319			1,492,481			463,582			1,431,697
Logistics
North operations		1,197,157			3,227,690			1,051,377			2,945,356
South operations		387,921			957,973			322,391			849,719
Container operations		63,832			168,564			64,015			204,846

		1,648,910			4,354,227			1,437,783			3,999,921
Reconciliation
Cosan Corporate
Other		1,963			2,326			48			425

		1,963			2,326			48			425
IFRS 11—Deconsolidated of adjustments/eliminations joint ventures and eliminations		(22,301,960	)		(63,298,836	)		(20,537,017	)		(59,942,728	)

Total		3,711,023			9,865,262			3,272,803			9,732,259

Cosan Limited

Notes to the consolidated financial statements

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

7	Cash and cash equivalents


	September 30, 2017		December 31, 2016
	September 30, 2017		December 31, 2016

Cash and bank deposits		54,777		376,029
Savings account		2,220,032		409,333
Financial investments		3,527,002		3,714,226

		5,801,811		4,499,588

Financial investments are composed as follows:


	September 30, 2017		December 31, 2016
	September 30, 2017		December 31, 2016
Investment fund
Repurchase agreements		2,627,718		2,840,760
Bank certificate of deposits—CDB		371,065		363,147
Other		53		—

		2,998,836		3,203,907
Bank investments
Repurchase agreements		20,593		26,719
Bank certificate of deposits—CDB		506,573		468,384
Other		1,000		15,216

		528,166		510,319

		3,527,002		3,714,226

8	Marketable securities and Restricted cash


*Marketable securities*
	September 30, 2017		December 31, 2016
	September 30, 2017		December 31, 2016

Government security (i)		1,821,421		1,004,388
Bank certificate of deposits—CDB (ii)		222,204		287,192

		2,043,625		1,291,580

*Restricted cash*
	September 30, 2017		December 31, 2016
Investments linked to loans		91,811		63,474
Securities pledged as collateral		131,730		137,525
Government bonds		2,154		—

		225,695		200,999

⁽ⁱ⁾	Sovereign debt securities classified as held-for-trading have stated interest connected to SELIC and mature in two to five years.

⁽ ⁱⁱ⁾

Bank certificates of deposits classified as held-for-trading have stated interest rates connected to CDI and mature in two to five years.

Cosan Limited

Notes to the consolidated financial statements

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

9	Trade receivables


	September 30, 2017			December 31, 2016
Domestic—Brazilian Reais		1,302,009			1,248,270
Export—Foreign currency		62,936			27,446
Allowance for doubtful accounts		(113,016	)		(90,286	)

		1,251,929			1,185,430
Current		1,206,074			1,130,624

Non-current		45,855			54,806

10	Other current tax receivables


	September 30, 2017		December 31, 2016
ICMS—State VAT (ii)		461,754		422,627
ICMS CIAP—State VAT (i)/(ii)		204,443		185,707
Tax credit installment		38,363		36,708
PIS—Revenue tax		69,845		48,220
COFINS—Revenue tax		281,802		209,700
Other		25,998		15,743

		1,082,205		918,705
Current		281,238		178,856

Non-Current		800,967		739,849

⁽ⁱ⁾	ICMS – Tax credit arising from acquisition of fixed assets.

⁽ⁱⁱ⁾	The amount of December 31, 2016 was reclassified between items to improve the disclosure.

Cosan Limited

Notes to the consolidated financial statements

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

11	Related parties

Receivables from and payables to related parties:


	September 30, 2017		December 31, 2016
Current Asset
Commercial operation
Raízen Energia S.A.		39,707		37,249
Aguassanta Participações S.A.		—		6,342
Radar Propriedades Agrícolas S.A.		—		517
Raízen Combustíveis S.A.		22,859		4,206
Other		4,194		531

		66,760		48,845
Corporate operation / Agreements
Raízen Energia S.A.		—		9,672

		66,760		58,517

Non-current assets
Receivables under the framework agreement
Janus Brasil Participações S.A		30,423		28,705
Raízen Energia S.A.		87,751		114,473

		118,174		143,178
Financial and corporation operations
Rezende Barbosa		31,444		38,944
Other		1,000		1,618

		32,444		40,562

		150,618		183,740


	September 30, 2017		December 31, 2016
Current liabilities
Corporate operations
Raízen Energia S.A.		182,679		160,030
Raízen Combustíveis S.A.		128,938		75,624
Other		5,305		1,427

		316,922		237,081

Cosan Limited

Notes to the consolidated financial statements

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

Related party transactions:


	July 1, 2017 to September 30, 2017			January 1, 2017 to September 30, 2017			July 1, 2016 to September 30, 2016			January 1, 2016 to September 30, 2016
Sales of goods and services
Raízen Combustíveis S.A		40,777			109,553			38,007			100,219
Raízen Energia S.A.		131,503			307,563			113,211			328,531

		172,280			417,116			151,218			428,750
Purchase of goods / Inputs
Raízen Energia S.A. (i)		(866	)		(1,158	)		(79	)		(415	)
Raízen Combustíveis S.A.		(276,155	)		(718,445	)		(235,843	)		(662,894	)

		(277,021	)		(719,603	)		(235,922	)		(663,309	)
Discontinued operation
Raízen Energia S.A.		—			—			19,179			50,664

		—			—			19,179			50,664
Shared expense
Raízen Energia S.A. (i)		(17,170	)		(55,267	)		(20,194	)		(53,868	)

		(17,170	)		(55,267	)		(20,194	)		(53,868	)
Finance result
Usina Santa Luiza (i)		(58	)		(320	)		(54	)		(124	)
Raízen Energia S.A.		1,868			5,651			501			1,495
Other (i)		(6	)		(6	)		3			—

		1,804			5,325			450			1,371

⁽ⁱ⁾	The amount of the three and nine months period ended September 30, 2016 was restated between items to improve the statement.

Officers’ and directors’ compensation


	July 1, 2017 to September 30, 2017		January 1, 2017 to September 30, 2017		July 1, 2016 to September 30, 2016		January 1, 2016 to September 30, 2016
Short-term benefits to employees and managers (i)		16,511		59,058		16,630		107,019
Post-employment benefits (i)		217		678		151		1,485
Other long-term benefits (i)		358		629		115		194
Benefits from termination of employment contract (i)		—		—		2,367		2,367
Share-based payment transactions		16,380		22,562		2,947		8,843

		33,466		82,927		22,210		119,908

⁽ⁱ⁾	The amount of the three and nine months period ended September 30, 2016 was restated between items to improve the statement.

Cosan Limited

Notes to the consolidated financial statements

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

12	Investments in associates

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


	Shares issued by the associate		Shares held by Cosan			Cosan ownership interest		Economic benefits %
Tellus Brasil Participações S.A.		65,957,282		33,638,214			51%		5%
Novvi Limited Liability Company		620,002		200,000			32%		32%
Janus Brasil Participações S.A.		1,907,000		934,430			51%		5%
Radar Propriedades Agrícolas S.A		1,735,703		531,125			51%		3%
Radar II Propriedades Agrícolas S.A		81,440,221		24,920,708			51%		3%
Usina Santa Luiza S.A		28,553,200		9,516,782			33%		33%
	January 01, 2017		Interest in earnings (losses) of associates			Other comprehensive income		Dividends			Capital increase		Other			September 30, 2017			Interest in earnings (losses) of associates September 30, 2016
Investments in associates
Tellus Brasil Participações S.A.		97,002		3,838			—		(1,307	)		—		—			99,533			(160	)
Novvi Limited Liability Company		18,838		(5,606	)		38		—			—		—			13,270			(4,575	)
Janus Brasil Participações S.A.		33,969		2,000			3,181		(765	)		1,719		—			40,104			4,808
Radar Propriedades Agrícolas S.A		55,148		1,279			159		—			—		—			56,586			—
Radar II Propriedades Agrícolas S.A		30,537		926			31		(493	)		—		—			31,001			—
Other (i)		51,453		6,096			—		(11,566	)		—		868			46,851			11,517

Total		286,947		8,533			3,409		(14,131	)		1,719		868			287,345			11,590

Investments in associates with negative equity
Usina Santa Luiza S.A (i)		—		(1,549	)		—		—			1,433		(6,023	)		(6,139	)		(8,355	)

Total of net investments		286,947		6,984			3,409		(14,131	)		3,152		(5,155	)		281,206			3,235

⁽ⁱ⁾	The amount of December 31, 2016 was reclassified between items to improve the disclosure.

Cosan Limited

Notes to the consolidated financial statements

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

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


	Shares issued by the associate		Shares held by non-controlling shareholders			Non-controlling interest
Cosan S.A. Indústria e Comércio		407,904,353		152,967,891			38%
Cosan Logística S.A.		368,046,576		101,257,374			28%
Companhia de Gás de São Paulo—Comgás		130,038,279		47,977,400			37%
Rumo S.A.		1,339,015,898		934,838,098			70%
Logispot Armazéns Agrícolas S.A.		2,040,816		1,000,000			49%
	January 01, 2017		Interest in earnings (losses) of associates			Sales or purchase of interests			Other comprehensive income (losses)		Dividends			Capital increase		Other		September 30, 2017		Interest in earnings (losses) of associates September 30, 2016
Cosan S.A. Indústria e Comércio (i)		3,343,719		223,468			(153,734	)		103,712		(143,636	)		—		12,454		3,385,983		343,388
Cosan Logística S.A. (i)		424,784		(16,833	)		—			164		—			2,815		167		411,097		(25,510	)
Companhia de Gás de São Paulo—Comgás		1,826,733		147,376			27,107			—		(127,094	)		—		4,160		1,878,282		270,787
Rumo S.A.		4,105,962		(142,517	)		(5,146	)		1,496		(4,483	)		—		2,795		3,958,107		(199,458	)
Logispot Armazéns Agrícolas S.A.		36,088		(684	)		—			—		—			—		—		35,404		(877	)
Outros		—		6,874			—			—		(18,945	)		—		12,552		481		—
Radar —Discontinued operation		—		—			—			—		—			—		—		—		34,071

Total		9,737,286		217,684			(131,773	)		105,372		(294,158	)		2,815		32,128		9,669,354		422,401

⁽ⁱ⁾	The amount of December 31, 2016 was reclassified between items to improve the disclosure.

Cosan Limited

Notes to the consolidated financial statements

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

13	Investments in joint ventures

Changes to investments in joint ventures were as follows:


	Raízen Combustíveis S.A.			Raízen Energia S.A.			Total
	Raízen Combustíveis S.A.			Raízen Energia S.A.			Total
Shares issued by the joint venture		3,303,168,484			5,902,595,634
Shares held by Cosan		1,651,584,242			2,951,297,817
Cosan ownership interest		50%			50%

Interest in earnings of joint ventures September 30, 2016		488,223			609,960			1,098,183
December 31, 2016		3,190,822			5,315,573			8,506,395
Interest in earnings of joint ventures		478,417			227,855			706,272
Other comprehensive income		13,460			258,379			271,839
Interest on capital		(42,000	)		—			(42,000	)
Dividends		(354,000	)		(393,499	)		(747,499	)

September 30, 2017		3,286,699			5,408,308			8,695,007

The statement of financial position and statement of profit or loss of the joint ventures are disclosed in Note 6, Segments.

Pursuant to the terms of the Raízen Joint Venture—Framework Agreement, Cosan is responsible for certain legal proceedings that existed prior to the formation of Raízen, net of judicial deposits as of April 1, 2011, as well as tax installments under the REFIS (tax amnesty and refinancing program), recorded in “Other taxes payable”. Additionally, Cosan granted access to Raízen a credit line (stand-by facility) in the amount of US$ 350,000 thousand, which was unused at September 30, 2017.

Cosan Limited

Notes to the consolidated financial statements

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

14	Property, plant and equipment


	Land, buildings and improvements			Machinery, equipment and facilities			Railcars and locomotives (i)			Permanent railways (i)			Construction in progress			Other			Total
Cost
At January 01, 2017		1,043,437			716,310			5,270,469			4,474,856			708,580			326,361			12,540,013
Additions		46			—			14,965			3,729			1,416,294			6,648			1,441,682
Disposals		(2,239	)		(2,159	)		—			(3,695	)		—			(35,728	)		(43,821	)
Transfers		14,177			344,013			711,296			387,469			(1,352,065	)		(135,735	)		(30,845	)

At September 30, 2017		1,055,421			1,058,164			5,996,730			4,862,359			772,809			161,546			13,907,029

Depreciation
At January 01, 2017		(255,893	)		(287,745	)		(742,297	)		(542,228	)		—			14,598			(1,813,565	)
Additions		(29,950	)		(54,311	)		(372,139	)		(302,109	)		—			(53,848	)		(812,357	)
Disposals		234			471			—			749			—			21,925			23,379
Transfers		(599	)		(802	)		40,575			(12,621	)		—			(1,034	)		25,519

At September 30, 2017		(286,208	)		(342,387	)		(1,073,861	)		(856,209	)		—			(18,359	)		(2,577,024	)

At January 01, 2017		787,544			428,565			4,528,172			3,932,628			708,580			340,959			10,726,448

At September 30, 2017		769,213			715,777			4,922,869			4,006,150			772,809			143,187			11,330,005

⁽ⁱ⁾	Leasehold improvements and finance leases included.

Cosan Limited

Notes to the consolidated financial statements

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

15 Intangible assets and goodwill


	Goodwill		Concession rights			Right of way and operating license			Trademarks			Customer relationships			Other			Total
Cost:
At January 01, 2017		715,259		16,912,506			435,624			252,474			946,824			376,669			19,639,356
Additions		—		246,357			—			—			45,095			27,602			319,054
Disposals		—		(159,620	)		—			—			(11,157	)		(4,220	)		(174,997	)
Transfers		—		341,518			—			—			(11,695	)		(5,068	)		324,755

At September 30, 2017		715,259		17,340,761			435,624			252,474			969,067			394,983			20,108,168

Amortization
At January 01, 2017		—		(1,319,980	)		(200,876	)		(182,616	)		(668,695	)		(157,750	)		(2,529,917	)
Additions		—		(318,025	)		(62,442	)		(17,120	)		(97,975	)		(36,069	)		(531,631	)
Disposals		—		128,148			—			—			7,863			4,218			140,229
Transfers		—		(337,991	)		—			—			720			(1,070	)		(338,341	)

At September 30, 2017		—		(1,847,848	)		(263,318	)		(199,736	)		(758,087	)		(190,671	)		(3,259,660	)

At January 01, 2017		715,259		15,592,526			234,748			69,858			278,129			218,919			17,109,439

At September 30, 2017		715,259		15,492,913			172,306			52,738			210,980			204,312			16,848,508

Capitalization of borrowing costs

Capitalized borrowing costs for the period ended September 30, 2017, amounted to R$ 7,268 (R$ 13,026 for the period ended September 30, 2016). The weighted average interest rate used to capitalize borrowing costs on the balance of concession right, was 9.02% p.a. for the period ended September 30, 2017 (12.55% p.a. for the period ended September 30, 2016).

Cosan Limited

Notes to the consolidated financial statements

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


Intangible assets (excluding goodwill)	Annual rate of amortization—%	September 30, 2017		December 31, 2016
Gas distribution concession—Comgás (i)	Concession term		8,177,942		8,240,521
Concession rights—Rumo (ii)	Concession term		7,314,971		7,352,005

		15,492,913		15,592,526
Operating license for port terminal (iii)	4.00		172,306		234,748
Trademarks
Mobil	10.00		28,534		45,654
Comma	—		24,204		24,204

		52,738		69,858
Relationship with customers:
Comgás	30.00		181,358		233,971
Lubricants	6.00		29,622		44,158

		210,980		278,129
Other
Software license	20.00		156,716		146,210
Other			47,596		72,709

		204,312		218,919
Total			16,133,249		16,394,180

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

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

⁽ⁱⁱⁱ⁾

Port operating license and customer relationships of Rumo S.A, from the business combinations.

Impairment testing of cash-generating units (“CGU”) goodwill

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

During the period ended September 30, 2017, no impairment indicators were identified that would trigger the need for an impairment test.

Cosan Limited

Notes to the consolidated financial statements

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

16 Loans, borrowings and debentures


	Interest
Description (i)	Index		Annual interest at September 30, 2017		September 30, 2017		December 31, 2016		Maturity
Loan and borrowings
BNDES (ii)		URTJLP		8.80%		2,253,640		2,663,073		Jun-29
		Fixed		5.24%		1,322,581		1,233,476		Feb-25
		TJ462		9.89%		527,157		650,581		Oct-18
		Selic		10.13%		236,517		271,926		Oct-20
		Selic		10.27%		61,179		41,650		Jun-23
		TJLP		9.05%		111,674		137,739		Jun-23
		Selic		13.65%		4,314		5,277		Sep-20
		Fixed		3.93%		2,212		3,930		Jan-24
		IPCA		10.91%		3,721		3,453		Nov-21
		URTJLP		11.40%		—		17		Jan-17
EIB (ii)		USD		3.88%		146,085		170,848		Jun-20
		USD		2.94%		67,982		89,899		Sep-20
		USD + LIBOR6M		0.48%		151,103		172,263		May-21
		USD + LIBOR6M		2.62%		140,056		179,952		Sep-21
Foreign loans		GBP + Libor		1.91%		85,170		—		Jul-19
		GBP + Libor		3.62%		193,861		218,232		Dec-19
NCE		112% of CDI		9.16%		92,293		120,069		Dec-18
		129.62% CDI		10.68%		567,657		552,576		Jun-23
		CDI + 3.50%		11.92%		294,854		294,516		Dec-18
		CDI + 3.47%		11.89%		81,272		80,486		Nov-17
Perpetual Notes		US$		8.25%		1,603,965		1,650,089		—
Resolution 4131		US$		2.99%		72,838		133,957		Oct-20
		US$		2.40%		397,309		407,306		Mar-18
		US$+ Libor		4.79%		57,503		32,798		Nov-17
Senior Notes Due 2018		Fixed		9.50%		164,184		168,163		Mar-18
Senior Notes Due 2023		US$		5.00%		319,527		322,062		Mar-23
Senior Notes Due 2027		US$		7.00%		2,340,137		2,304,384		Jan-27
Senior Notes Due 2024		US$		7.38%		2,381,777		—		Feb-24
Senior Notes Due 2024		Fixed		5.95%		1,570,461		—		Sep-24
FINEP		Fixed		5.00%		92,986		109,233		Nov-22
Trade banks		CDI + 4.91% p.a.		13.45%		114,545		163,815		Jun-19
		Fixed US$		5.49%		95,072		86,140		Dec-21
Working capital		CDI + 2.80% p.a.		11.17%		403,567		390,023		Dec-18
		CDI + 2.95% p.a.		11.33%		295,580		287,168		Dec-18
		CDI + 0.28% p.m.		12.23%		6,693		9,988		Jan-18
		CDI + 0.33% p.m.		12.50%		6,695		—		Mar-18
		120% of CDI		9.85%		20,767		—		May-18
		120% of CDI		9.92%		10,222		—		Jul-18
		120% of CDI		9.91%		20,443		—		Jul-18
Bank overdrafts		118% of CDI		118% of CDI		16,768		22,605		Oct-17
Prepayment		US$+Libor		3.66%		9,661		55,641		Apr-18
FINIMP		US$+Libor		3.52%		—		40,798		Jun-17

					16,344,027		13,074,133

Cosan Limited

Notes to the consolidated financial statements

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


	Interest
Description (i)	Index		Annual interest at September 30, 2017		September 30, 2017		December 31, 2016		Maturity
Debentures
Non-convertible debentures (ii)		CDI + 2.05% p.a.		10.36%		153,186		154,284		Apr-18
		CDI + 1.30% p.a.		11.57%		—		300,183		Oct-17
		CDI + 3.50% p.a.		11.92%		2,423,240		2,347,271		Jun-23
		IPCA		8.38%		553,181		529,465		Dec-25
		108 % of CDI		8.82%		167,867		350,852		Jul-18
		IPCA		9.71%		1,420,119		1,284,982		Sep-20
		Fixed		13.13%		169,036		163,862		Oct-20
		CDI		9.11%		85,766		133,465		Sep-19

						4,972,395		5,264,364
Total						21,316,422		18,338,497

Current						3,182,679		2.404.009

Non-current						18,133,743		15.934.488

⁽ⁱ⁾	The Company’s debts with national and international development agencies have bank guarantees. Guarantees are contracted with first-tier banks guaranteeing the total amount of debt.

⁽ⁱⁱ⁾	The amount of December 31, 2016 was reclassified between items to improve the disclosure.

Senior Notes 2024

On September 20, 2017, the Company, issued a foreign debt, Senior Notes Due 2024 (“2024 Notes”) in the total amount of US$ 500,000 thousands maturing on September 2024 with coupon of 5.95% p.a., paid semiannually.

On February 9, 2017, the indirect subsidiary, “Rumo S.A”, issued a foreign debt, Senior Notes Due 2024 (“2024 Notes”) in the total amount of US $ 750,000 thousands maturing on February 2024 with coupon of 7.38% p.a., paid semiannually. This debt is protected by exchange and interest rate swaps.

Working Capital

On July 17, 2017, Cosan Biomassa, an indirect wholly-owned subsidiary of the Company, raised a two loans in the amount of R$ 10,000 and R$ 20,000 from Santander and Banco ABC respectively, with maturity on July 17, 2018 and interest of 120.85% and 120.75% of CDI respectively.

Foreign loans

On August 4, 2017, Comma Oil, an indirect wholly-owned subsidiary of the Company, raised a total loan of £ 20 million from Bank of America Merrill Lynch with maturity on July 26, 2019 and interest at libor + 1.50 % paid semiannually.

Cosan Limited

Notes to the consolidated financial statements

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

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


	September 30, 2017		December 31, 2016
Reais (R$)		11,683,915		12,474,129
Dollar (USD) (i)		9,353,476		5,646,136
Pound (GBP)		279,031		218,232

		21,316,422		18,338,497

⁽ⁱ⁾	At September 30, 2017, all dated debts denominated in US Dollars, in the subsidiaries, have currency risk protection through derivatives (Note 27).

Below are the movements that occurred for the nine-month period ended September 30, 2017.


At January 01, 2017	18,338,497

Raised	4,305,339
Payment	(2,889,490	)
Interest, exchange rate and fair value	1,562,076

At September 30, 2017	21,316,422

Available credit line

As of September 30, 2017, the subsidiary Cosan Logística had available credit lines from BNDES, which were not used, in the total amount of R$ 287,170 (R$ 541,639 on December 31, 2016).

As of September 30, 2017, the subsidiary Cosan S.A had available credit lines from three different Brazilian financial institution, which were not used, in the total amount of R$ 501,000.

Financial Covenants

The Company and its subsidiaries are subject to certain restrictive clauses in most of the loan and financing agreements, based on certain financial and non-financial indicators.

At September 30, 2017, the Company and its subsidiaries were in compliance with all debt financial covenants.

Cosan Limited

Notes to the consolidated financial statements

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

17 Leases

Finance lease liabilities

Finance lease liabilities are payable as follows:


	September 30, 2017												December 31, 2016
	Less than one year			Between one and five years			More than five years			Total			Total
	Less than one year			Between one and five years			More than five years			Total			Total
Future minimum payments
lease payments		380,181			694,481			271,525			1,346,187			1,837,441
Rolling stock		352,970			610,838			184,603			1,148,411			1,616,719
Terminal		23,400			80,022			86,922			190,344			207,950
Other		3,811			3,621			—			7,432			12,772
Interests		(93,332	)		(184,951	)		(53,653	)		(331,936	)		(439,898	)
Rolling stock		(78,961	)		(147,758	)		(36,180	)		(262,899	)		(358,158	)
Terminal		(13,834	)		(36,835	)		(17,473	)		(68,142	)		(79,611	)
Other		(537	)		(358	)		—			(895	)		(2,129	)

Present value of minimum lease payments		286,849			509,530			217,872			1,014,251			1,397,543

Current											286,849			472,632

Non-current											727,402			924,911

Lease agreements have varying expirations, the last due to expire in June 2043. The amounts are adjusted annually for inflation rates (as IGPM and IPCA) or may incur interest based on the TJLP or CDI and some contracts have renewal or purchase options that were considered in determining the classification as financial lease.

Operating leases

At September 30, 2017, the future minimum lease payments under non-cancellable leases are as follows:


	September 30, 2017								December 31, 2016
	Total future minimum payments								December 31, 2016
	Less than one year		Between one and five years		More than five years		Total		Total
Locomotives (i)		573		1,303		—		1,876		2,346
Rail cars (i)		6,875		26,619		6,915		40,409		47,120
Other (i)		1,856		843		—		2,699		3,705

⁽ ⁱ⁾	The amount of December 31, 2016 was reclassified between items to improve the disclosure.

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

Cosan Limited

Notes to the consolidated financial statements

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

18	Concessions payable

September 30, 2017

December 31, 2016

Leases

Concessions

Total

Payables

Rumo Malha Sul

37,027

29,290

66,317

73,707

Rumo Malha Paulista

29,148

19,268

48,416

52,979

66,175

48,558

114,733

126,686

Court Discussion

Rumo Malha Paulista

1,375,430

119,694

1,495,124

1,345,722

Rumo Malha Oeste

1,178,768

73,678

1,252,446

1,135,398

2,554,198

193,372

2,747,570

2,481,120

Total

2,620,373

241,930

2,862,303

2,607,806

Current

26,955

27,662

Non-current

2,835,348

2,580,144

Judicial deposits at September 30, 2017 concerning the above claims totaled:


	September 30, 2017		December 31, 2016
Malha Paulista		119,694		118,820
Malha Oeste		20,137		19,464

		139,831		138,284

Cosan Limited

Notes to the consolidated financial statements

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

19 Trade payables


	September 30, 2017			December 31, 2016
Natural gas suppliers		1,553,686			1,377,528
Materials and service suppliers		833,105			789,675
Fuels and lubricants suppliers		737			706
Judicial deposits (i)		(294,976	)		(294,976	)
Other		96,694			160,177

		2,189,246			2,033,110

Current		2,189,246			2.032.542

Non-current		—			568

⁽ⁱ⁾

There is a judicial discussion between the subsidiary Comgás and its gas supplier. The gas supplier is charging different prices comparing to the gas supply market. At September 30, 2017, the balance of judicial discussion is R$ 1,141,571 (R$ 1,045,311 on December 31, 2016). The amount is secured by judicial deposit R$ 294,976 (R$ 294,976 on December 31, 2016) and the guaranteed value through surety is of R$ 846,595 (R$ 750,335 on December 31, 2016).

20 Other taxes payable


	September 30, 2017		December 31, 2016
Tax amnesty and refinancing program—REFIS		230,175		215,565
ICMS – State VAT		130,891		84,700
COFINS—Revenue tax		44,354		54,208
PIS—Revenue tax		9,343		11,337
INSS—Social security		6,335		7,033
ISS—Services tax (i)		6,294		3,364
IOF—Financial tax (i)		2,085		2,992
Other (i)		11,409		35,746

		440,886		414,945

Current		278,049		261,169

Non-Current		162,837		153,776

⁽ⁱ⁾	The amount of December 31, 2016 was reclassified between items to improve the disclosure.

Cosan Limited

Notes to the consolidated financial statements

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

21 Income tax and social contribution

Reconciliation of income and social contribution tax expenses:


	July 1, 2017 to September 30, 2017			January 1, 2017 to September 30, 2017			July 1, 2016 to September 30, 2016 (Restated)			January 1, 2016 to September 30, 2016 (Restated)
Profit before taxes		696,719			670,830			364,848			825,659
Income tax and social contribution at nominal rate (34%)		(236,884	)		(228,082	)		(124,048	)		(280,724	)
Adjustments to reconcile nominal to effective tax rate
Interest in earnings of investees (non-taxable income)		141,384			242,507			140,297			374,482
Credit claims for damages		—			—			1,346			3,652
Differences in tax rates on earnings / losses of overseas companies		(19,911	)		(64,819	)		(12,303	)		(115,272	)
Operating profit from activity		31,347			46,312			10,221			27,473
Share-based payment transactions		(1,001	)		(2,936	)		(1,002	)		(3,007	)
Interest on capital (net received)		(2,873	)		(17,153	)		(8,330	)		(21,590	)
Non-deductible expenses (donations, gifts, etc.)		(28,938	)		(37,339	)		(7,274	)		(12,926	)
Tax losses not recorded (i)		(35,520	)		(163,283	)		(64,167	)		(134,317	)
Costs of issuing equity instruments		—			—			1,022			22,329
Other (ii)		3,503			(3,909	)		(4,845	)		(9,489	)

Income tax and social contribution benefit (expense)—current and deferred		(148,893	)		(228,702	)		(69,083	)		(149,389	)

Effective rate—%		21.37			34.09			18.93			18.09

⁽ⁱ⁾	Refers mainly to tax losses not recorded in subsidiaries of Rumo which under current conditions do not attend the requirements of future taxable profits that justify the recognition of the deferred tax assets. In accordance with Brazilian Federal Taxes rules those losses do not expire.

⁽ ⁱⁱ⁾

The amount of the three and nine months period ended September 30, 2016 was restated between items to improve the statement.

Cosan Limited

Notes to the consolidated financial statements

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

Deferred income tax assets and liabilities:


	September 30, 2017												December 31, 2016
	Basis			Income taxes (25%)			Social contribution (9%)			Total income taxes (34%)			Total income taxes (34%)
	Basis			Income taxes (25%)			Social contribution (9%)			Total income taxes (34%)			Total income taxes (34%)
Tax loss carry forwards
Income tax loss carry forwards		8,845,771			2,211,443			—			2,211,443			1,900,366
Social contribution tax loss carry forwards		8,977,410			—			807,967			807,967			704,480
Temporary differences
Foreign exchange—Loans and borrowings		1,606,802			401,701			144,612			546,313			590,582
Legal proceedings provision		1,151,921			287,980			103,673			391,653			401,413
Impairment of fixed assets		826,890			206,722			74,421			281,143			290,470
Business combination—Property, plant and equipment		(121,266	)		(30,317	)		(10,913	)		(41,230	)		151,060
Tax deductible goodwill		(741,792	)		(185,448	)		(66,761	)		(252,209	)		(107,520	)
Provisions for employee benefits		423,018			105,754			38,072			143,826			138,655
Allowance for doubtful accounts (i)		334,953			83,738			30,146			113,884			105,949
Regulatory asset		196,318			49,080			17,669			66,748			71,039
Impairment of tax credit (i)		174,324			43,581			15,689			59,270			50,767
Lease (i)		(747,880	)		(186,970	)		(67,309	)		(254,279	)		(138,511	)
Share-based payment transactions		2,825			706			254			960			—
Profit sharing		77,831			19,458			7,005			26,463			28,923
Concession contract		(26,955	)		(6,739	)		(2,426	)		(9,165	)		(10,616	)
Business combination—Other fair value adjustments		(123,367	)		(30,842	)		(11,103	)		(41,945	)		(42,360	)
Property, plant and equipment		(40,216	)		(10,054	)		(3,619	)		(13,674	)		(55,861	)
Unrealized gains on derivatives instruments		(281,720	)		(70,430	)		(25,355	)		(95,785	)		(992	)
Temporary differences (i)		667,372			166,843			60,063			226,906			219,944
Gain on formation of joint ventures		(3,338,342	)		(834,586	)		(300,451	)		(1,135,036	)		(1,135,037	)
Business combination—Intangible assets		(10,352,818	)		(2,588,205	)		(931,754	)		(3,519,958	)		(3,743,218	)
(-) Non-recordable net operating loss		(5,779,372	)		(1,444,843	)		(520,143	)		(1,964,986	)		(1,753,070	)
Other (i)		1,079,306			269,120			96,884			366,004			272,974

Total net liability					(1,542,308	)		(543,379	)		(2,085,687	)		(2,060,563	)
Deferred income tax—Assets											1,591,713			1,490,002
Deferred income tax—Liabilities											(3,677,400	)		(3,550,565	)

Total net deferred taxes											(2,085,687	)		(2,060,563	)

⁽ⁱ⁾	The amount of December 31, 2016 was reclassified between items to improve the disclosure.

Changes in deferred income taxes, net:


At January 01, 2017	(2,060,563	)

Recorded through income	(90,387	)
Tax loss carryforwards used to settle other tax installments	3,555
Tax loss carryforwards over change of shareholding interest in subsidiary	60,583
Other (i)	1,125

At September 30, 2017	(2,085,687	)

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

Cosan Limited

Notes to the consolidated financial statements

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

22 Provision for legal proceedings


	Provision for legal proceedings				Judicial deposits
	September 30, 2017		December 31, 2016		September 30, 2017		December 31, 2016
	September 30, 2017		December 31, 2016		September 30, 2017		December 31, 2016
Tax		507,979		479,532		382,686		376,454
Civil, regulatory and environmental		310,166		344,048		180,042		173,884
Labor		430,593		444,984		194,855		164,346

		1,248,738		1,268,564		757,583		714,684

Changes in provision for legal proceedings:


	Tax			Civil, regulatory and environmental			Labor			Total
	Tax			Civil, regulatory and environmental			Labor			Total
At January 01, 2017		479,532			344,048			444,984			1,268,564
Accruals		13,660			12,361			86,701			112,722
Disposal / Reversals		(6,710	)		(34,876	)		(110,334	)		(151,920	)
Indexation and interest charges (i)		21,497			(11,367	)		9,242			19,372

September 30, 2017		507,979			310,166			430,593			1,248,738

⁽ⁱ⁾	It is included interest reversal.

The Company’s debts with legal proceedings are secured by assets, cash deposit, bank guarantee or insurance guarantee.

Tax claims

Judicial claims deemed to be probable losses, fully accrued


	September 30, 2017		December 31, 2016
Compensation with FINSOCIAL		278,167		269,275
State VAT—ICMS credits		98,499		84,778
INSS—Social security		65,605		63,103
PIS and COFINS		11,746		2,449
IPI—Excise tax credit—NT		671		1,155
Federal income taxes		465		329
Other		52,826		58,443

		507,979		479,532

Cosan Limited

Notes to the consolidated financial statements

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

Judicial claims deemed as possible losses, and therefore not accrued


	September 30, 2017		December 31, 2016
ICMS—State VAT (i)		2,575,259		2,136,241
Federal income taxes (iv)		2,527,804		2,188,011
Foreign financial operation		1,032,493		986,179
PIS and COFINS—Revenue taxes		856,109		850,063
IRRF—Withholding tax		904,844		861,531
INSS—Social security and other		586,913		615,403
IPI—Excise tax credit—NT		520,302		512,209
Goodwill Rumo		506,924		483,723
Penalties related to tax positions		423,738		397,441
Compensation with IPI—IN 67/98		131,572		128,456
MP 470—Tax installments (ii)		288,179		120,132
Rumo Intermodal (iii)		—		81,247
Stock option		65,124		62,216
Financial transactions tax on loan		50,961		54,896
Social security contributions		45,578		43,764
Compensation credit award		40,830		38,505
Other		1,043,922		992,682

		11,600,552		10,552,699

⁽ⁱ⁾	Tax assessment notice issued by the São Paulo State Treasury Department, against Rumo Malha Paulista S.A, covering the period from February 2011 to July 2015, with the indication of the follow infractions:

Alleged lack of payment of ICMS on railroad services for export;

Improper ICMS credit due to error in the book entry of values higher than those found in the Fiscal Books;

Undue crediting of ICMS for acquisitions supposedly considered as “use and consumption”.

The Tax authorities also included fines of 50% of the value of the tax and 100% of the amount of the credit considered undue. The amount of this judicial claim is R$ 304,730.

The subsidiary CLE has been discussing administratively the ICMS tax credits arising from the transfer of excess credits to its centralizing unit in the period from May 2012 to January 2013 in the amount of R$ 36,879.

⁽ⁱⁱ⁾

The Tax Authority partially rejected the Company requests for payment of its federal tax debts, on the ground that the tax loss offered is not sufficient to settle the respective debts. The likelihood of loss is considered as possible since the results are indicated existed and are available for such use.

⁽ⁱⁱⁱ⁾

Decrease related to favorable decisions from administrative sphere.

^(iv)

During the nine month period ended September 30, 2017, the subsidiary CLE received a tax assessment notice of R$ 113,979, demanding Income Tax and Social Contribution on net income related to the amortization of goodwill from business combination.

In 2017 the subsidiary Comgás was aware of the non-approval of compensation of tax debts made in 2015, using credits arising from Income Tax (IRPJ). The updated possible amount questioned in administrative sphere is R$ 72,797.

Cosan Limited

Notes to the consolidated financial statements

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

Civil, labor, regulatory and environmental

Judicial claims deemed to be probable losses, fully accrued

•

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

•

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

•

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

•

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

Judicial claims deemed as possible losses, and therefore not accrued

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


	September 30, 2017		December 31, 2016
	September 30, 2017		December 31, 2016
Civil		2,849,028		2,831,407
Labor		990,548		1,089,119
Regulatory		486,217		397,414
Environmental		377,949		351,915

		4,703,742		4,669,855

Cosan Limited

Notes to the consolidated financial statements

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

23 Shareholders’ equity

Share capital

At September 30, 2017, Cosan Limited’s share capital is composed of the following:


	Class A and / or BDRs		%		Class B1 shares		%
Shareholders—Common shares	Class A and / or BDRs		%		Class B1 shares		%
Group		14,514,418		8.35		96,332,044		100.00
Skagen AS		16,220,419		9.33		—		—
M&G Investment Management Limited		6,056,705		3.48		—		—
Eastspring Investments (Singapore) Limited		2,715,398		1.56		—		—
Free Float		128,851,899		74.13		—		—

Total shares outstanding		168,358,839		96.86		96,332,044		100.00

Treasury shares		5,462,956		3.14		—		—
Total		173,821,795		100.00		96,332,044		100.00

Treasury shares

The Company holds 5,462,956 Class A treasury shares as of September 30, 2017 (5.996.502 as of December 31, 2016) with a market value of U.S.$8.13 per share as of September 30, 2017 (U.S.$7.51 per share as of December 31, 2016).

Cosan Limited

Notes to the consolidated financial statements

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

Other comprehensive (loss) income


	December 31, 2016			Comprehensive (loss) income		September 30, 2017
Foreign currency translation effects		(322,258	)		3,811		(318,447	)
(Loss) gain on cash flow hedge in joint ventures and subsidiaries		(190,001	)		272,136		82,135
Actuarial loss on defined benefit plan		(29,017	)		—		(29,017	)
Financial instrument with subsidiary		6,000			9,000		15,000
Changes in fair value of available for sale securities		(2,618	)		3,371		753

Total		(537,894	)		288,318		(249,576	)

Attributable to:
Owners of the Company		(480,454	)		182,946		(297,508	)
Non-controlling interests		(57,440	)		105,372		47,932


	December 31, 2015			Comprehensive (loss) income			September 30, 2016
Foreign currency translation effects		(468,350	)		141,946			(326,404	)
Loss on cash flow hedge in joint ventures and subsidiaries		(235,779	)		(174,200	)		(409,979	)
Revaluation of investment properties reclassified from property, plant and equipment		190,735			—			190,735
Actuarial loss on defined benefit plan		28,032			—			28,032
Financial instrument with subsidiary		—			6,000			6,000
Changes in fair value of available for sale securities		6,748			391			7,139

Total		(478,614	)		(25,863	)		(504,477	)

Attributable to:
Owners of the Company		(478,207	)		7,582			(470,625	)
Non-controlling interests		(407	)		(33,445	)		(33,852	)

Cosan Limited

Notes to the consolidated financial statements

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

24 Earnings per share

The following table sets forth the calculation of earnings per share (in thousands of Brazilian Reais, except per share amounts):


	July 1, 2017 to September 30, 2017			January 1, 2017 to September 30, 2017			July 1, 2016 to September 30, 2016 (Restated)			January 1, 2016 to September 30, 2016 (Restated)
Profit attributable from continued operation to ordinary equity holders for basic earnings		248,110			224,444			153,039			297,238
Profit attributable from discontinued operation to ordinary equity holders for basic earnings		—			—			4,112			15,491
Effect of dilution:
Brados’s dilutive options		(46	)		—			—			—
Dilutive effect of subsidiary’s stock option plan		(1,702	)		(2,239	)		(1,038	)		(2,284	)
Dilutive effect of subsidiary’s stock option plan—Discontinued operation		—			—			(22	)		(64	)
Dilutive effect of put option		(15,601	)		(15,601	)		(15,601	)		(15,601	)

Profit from continued operation attributable to ordinary equity holders adjusted for the effect of dilution		230,761			206,604			136,400			279,353

Profit from discontinued operation attributable to ordinary equity holders adjusted for the effect of dilution		—			—			4,090			15,427

Basic number of shares outstanding—In thousands of shares		264,869			264,750			264,691			264,691
Effect of dilution:
Dilutive effect of stock option plan		13,342			13,470			—			—

Diluted number of shares outstanding—In thousands of shares		278,211			278,220			264,691			264,691

Basic earnings per share from:
Continuing operations	R$	0.9367		R$	0.8478		R$	0.5782		R$	1.1230
Discontinuing operations		—			—		R$	0.0155		R$	0.0585

	R$	0.9367		R$	0.8478		R$	0.5937		R$	1.1815
Diluted earnings per share from:
Continuing operations	R$	0.8294		R$	0.7426		R$	0.5153		R$	1.0554
Discontinuing operations		—			—		R$	0.0155		R$	0.0583

	R$	0.8294		R$	0.7426		R$	0.5308		R$	1.1137

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

Cosan Limited

Notes to the consolidated financial statements

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

For the nine month period ended on At September 30, 2017, 3,390,200 share options from indirect subsidiary RUMO S.A and 22,122,967 share options from indirect subsidiary Brado Logística S.A were excluded from the diluted weighted-average number of ordinary shares calculation because their effect would have been anti-dilutive.

For the three and nine-month period ended September 30, 2017, 1,628,300 shares related to the share repurchase plan of subsidiary Cosan S.A have an antidilutive effect, so they were not considered in the diluted earnings per share analysis.

25 Other expenses, net


	July 1, 2017 to September 30, 2017			January 1, 2017 to September 30, 2017			July 1, 2016 to September 30, 2016			January 1, 2016 to September 30, 2016
	July 1, 2017 to September 30, 2017			January 1, 2017 to September 30, 2017			July 1, 2016 to September 30, 2016			January 1, 2016 to September 30, 2016
Income from sale of scrap / eventual		9,097			29,267			—			—
Insurance reimbursement income		12,745			13,926			3,240			10,808
(Loss) gain from port operations		(1,212	)		523			—			—
Rental income		959			1,620			800			2,016
Loss on disposal of non-current assets and intangibles		(12,034	)		(23,735	)		(6,281	)		(15,505	)
Net effect of legal proceedings, recoverable and tax installments		(28,464	)		(89,369	)		(17,954	)		(94,147	)
Other (i)		(11,601	)		(26,501	)		3,293			13,608

		(30,510	)		(94,269	)		(16,902	)		(83,220	)

⁽ⁱ⁾	The amount of the three and nine months period ended September 30, 2016 was restated between items to improve the statement.

Cosan Limited

Notes to the consolidated financial statements

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

26 Finance results


	July 1, 2017 to September 30, 2017			January 1, 2017 to September 30, 2017			July 1, 2016 to September 30, 2016 (Restated)			January 1, 2016 to September 30, 2016 (Restated)
Cost of gross debt
Interest on debt		(472,477	)		(1,402,021	)		(480,142	)		(1,383,622	)
Monetary and exchange rate variation		303,348			100,434			(55,842	)		943,902
Derivatives and fair value measurement		(222,542	)		(180,104	)		(66,464	)		(1,431,499	)
Amortization of borrowing costs		(5,068	)		(13,133	)		(7,272	)		(69,781	)
Discounts obtained from financial operations		—			—			688			85,962
Guarantees and warranties on debt		(8,293	)		(24,653	)		(12,797	)		(35,774	)

		(405,032	)		(1,519,477	)		(621,829	)		(1,890,812	)
Income from financial investment and exchange rate in cash and cash equivalents		123,760			435,339			131,646			395,580

		123,760			435,339			131,646			395,580

Cost of debt, net		(281,272	)		(1,084,138	)		(490,183	)		(1,495,232	)
Other charges and monetary variations
Interest on other receivables		31,491			112,955			52,524			184,477
Monetary variation on leases and concessions agreements		(60,267	)		(195,259	)		(76,089	)		(221,671	)
Monetary variation on leases		(32,086	)		(98,626	)		(55,981	)		(158,074	)
Bank charges		(54,098	)		(182,437	)		(55,230	)		(165,953	)
Advances on real state credits		(4,441	)		(17,069	)		(9,372	)		(21,378	)
Interest on contingencies and contracts (i)		(18,458	)		(54,376	)		(19,350	)		(48,141	)
Interest on other liabilities (i)		(104,130	)		(308,365	)		(125,415	)		(467,637	)
Interest on other financial assets (i)		—			—			2,334			2,334
Exchange variation		483			1,663			5,837			53,731

		(241,506	)		(741,514	)		(280,742	)		(842,312	)

(=) Finance results, net		(522,778	)		(1,825,652	)		(770,925	)		(2,337,544	)
Finance expense		(841,177	)		(2,606,547	)		(1,142,850	)		(2,867,121	)
Finance income		177,290			695,061			263,408			834,976
Exchange variation		293,593			99,860			(47,689	)		1,011,866
Derivatives		(152,484	)		(14,026	)		156,206			(1,317,265	)

Finance results, net		(522,778	)		(1,825,652	)		(770,925	)		(2,337,544	)

⁽ⁱ⁾	The amount of the three and nine months period ended September 30, 2016 was restated between items to improve the statement.

Cosan Limited

Notes to the consolidated financial statements

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

27 Financial instruments

Financial risk management

Overview

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

•

Credit risk;

•

Liquidity risk; and

•

Market risk.

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

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


	September 30, 2017		December 31, 2016
Assets
Fair value through profit or loss
Investment funds		2,998,836		3,203,907
Marketable securities		2,043,625		1,291,580
Derivate financial instruments		1,042,165		751,080

		6,084,626		5,246,567
Loans and receivables
Cash and cash equivalents		2,802,975		1,295,681
Trade receivables		1,251,929		1,185,430
Restricted cash		225,695		200,999
Receivables from related parties		217,378		242,257
Dividends receivable		6,559		144,160

		4,504,536		3,068,527
Total		10,589,162		8,315,094

Cosan Limited

Notes to the consolidated financial statements

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


	September 30, 2017		December 31, 2016
	September 30, 2017		December 31, 2016
Liabilities
Liabilities amortized cost
Loans, borrowings and debentures		15,147,032		14,525,030
Leases		1,014,251		1,397,543
Real state credit certificates		115,822		195,745
Trade payables		2,189,246		2,033,110
Other financial liabilities		330,602		203,303
Payables to related parties		316,922		237,081
Dividends payable		26,818		93,500
Tax installments—REFIS		230,175		215,565
Preferred shareholders payable in subsidiaries		1,555,517		1,769,427

		20,926,385		20,670,304
Fair value through profit or loss
Loans, borrowings and debentures		6,169,390		3,813,467
Contingent consideration		114,570		166,807
Derivative financial instruments		270,779		295,844

		6,554,739		4,276,118
		27,481,124		24,946,422

During the period ended at September 30, 2017, there was no reclassification between categories, fair value through profit or loss, loans and receivables and liabilities at the amortized cost presented above.

Risk management structure

As at September 30, 2017 and December 31, 2016, the fair values relating to transactions involving derivative financial instruments to protect the Company’s risk exposure were using observable inputs such as quoted prices in active markets, or discounted cash flows based on market curves, and are presented below:


	Notional				Fair value
	September 30, 2017		December 31, 2016		September 30, 2017			December 31, 2016
Exchange rate derivatives
Forward agreements		44,639		438,689		(1,493	)		(14,983	)
Interest rate and exchange rate risk
Swap agreements (interest rate)		2,639,277		1,988,540		368,355			104,491
Swap agreements (exchange and interest rate)		7,388,804		4,315,575		404,524			365,728

		10,028,081		6,304,115		772,879			470,219
Total financial instruments						771,386			455,236

Assets						1,042,165			751,080

Liabilities						(270,779	)		(295,844	)

Cosan Limited

Notes to the consolidated financial statements

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

Credit risk


	September 30, 2017		December 31, 2016
Cash and cash equivalents (i)		5,801,811		4,499,588
Trade receivables (ii)		1,251,929		1,185,430
Derivative financial instruments (i)		1,042,165		751,080
Marketable securities (i)		2,043,625		1,291,580
Restricted cash (i)		225,695		200,999

		10,365,225		7,928,677

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


	September 30, 2017		December 31, 2016
AAA		1,939,567		—
AA		4,878,202		5,499,565
A		2,290,407		983,384
B		3,869		—
BB+		1,253		—
BBB		—		260,298

		9,113,298		6,743,247

Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department in accordance with the Company’s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed on an annual basis and may be updated throughout the year. The limits are set to minimize the concentration of risks and therefore mitigate financial loss through potential counterparty’s failure to make payments.

⁽ⁱⁱ⁾

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

The requirement for impairment is analyzed at each reporting date on an individual basis for major clients. Additionally, a large number of minor receivables are grouped into homogenous groups and assessed for impairment collectively. The calculation is based on actual incurred historical data.

The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. Management considers that the credit risk is covered by the allowance for doubtful accounts.

Cosan Limited

Notes to the consolidated financial statements

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

Liquidity risk

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

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


	September 30, 2017															December 31, 2016
	Up to 1 year			1—2 years			3—5 years			More than 5 years			Total			Total
Loans, borrowings and debentures		(4,839,140	)		(4,169,100	)		(10,252,345	)		(12,658,493	)		(31,919,078	)		(29,957,136	)
Trade payables		(2,189,246	)		—			—			—			(2,189,246	)		(2,033,110	)
Other financial liabilities		(330,602	)		—			—			—			(330,602	)		(203,303	)
Tax installments—REFIS		(28,475	)		(12,741	)		(12,615	)		(192,532	)		(246,363	)		(235,919	)
Leases		(459,132	)		(327,678	)		(460,402	)		(306,562	)		(1,553,774	)		(1,824,890	)
Derivative financial instruments		35,603			(78,540	)		(574,988	)		1,180,529			562,604			—
Real estate credits certificates		(101,732	)		(23,847	)		—			—			(125,579	)		(243,628	)

		(7,912,724	)		(4,611,906	)		(11,300,350	)		(11,977,058	)		(35,802,038	)		(34,497,986	)

Market risk

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

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

Cosan Limited

Notes to the consolidated financial statements

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

Foreign exchange risk

As at September 30, 2017 and December 31, 2016, the Company and its subsidiaries had the following net exposure to the exchange rate variations on assets and liabilities denominated in Dollar:


	September 30, 2017			December 31, 2016
Cash and cash equivalents		271,156			424,334
Trade receivables		40,939			11,940
Advances to suppliers		12,672			58,866
Trade payables		(20,277	)		(22,005	)
Loans, borrowings and debentures		(8,479,175	)		(6,323,330	)
Advances from clients		(6,603	)		—
Contingent consideration		(48,087	)		(68,388	)
Derivative financial instruments (i)		6,506,516			6,413,619

Foreign exchange exposure, net		(1,722,859	)		495,036

⁽ⁱ⁾	These balances are equivalent to the notional amount in US Dollars converted to R$ at the Dollar rate of September 30, 2017 and December 31, 2016 respectively.

Sensitivity analysis on changes in foreign exchange rates:

The probable scenario was defined based on the U.S. Dollar market rates as at September 30, 2017, which determines the fair values of the derivatives at that date. Stressed scenarios (positive and negative effects, before tax effects) were defined based on changes of a 25% and 50% to the U.S. Dollar exchange rates used in the probable scenario.

Based on the financial instruments denominated in U.S. Dollars at September 30, 2017, the Company performed a sensitivity analysis by increasing and decreasing the exchange rate for R$/US$ by 25% and 50%. The probable scenario considers the estimated exchange rates, made by a specialized third part, at the due date of the transactions for the companies with functional currency Real (positive and negative, before tax effects), as follows:

Exchange rate sensitivity analysis (R$/US$)

September 30, 2017

Scenario

Probable

25%

50%

-25%

-50%

USD

3.1680

3.3700

4.2125

5.0550

2.5275

1.6850

The external source used by the company for market projections was a specialized consultant.

Cosan Limited

Notes to the consolidated financial statements

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

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


						Variation scenario
Instrument	Risk factor		Probable			25%			50%			-25%			-50%
Cash and cash equivalents		USD fluctuation		14,139			58,968			117,937			(58,969	)		(117,937	)
Trade receivables		USD fluctuation		2,775			10,929			21,858			(10,927	)		(21,857	)
Advances to suppliers		USD fluctuation		808			3,370			6,740			(3,370	)		(6,740	)
Trade payables		USD fluctuation		(1,996	)		(5,568	)		(11,136	)		5,568			11,136
Exchange rate derivatives (i)		USD fluctuation		419,122			1,905,653			3,811,339			(1,905,618	)		(3,811,198	)
Loans, borrowings and debentures		USD fluctuation		(354,847	)		(1,479,995	)		(2,959,989	)		1,479,995			2,959,990
Advances from clients		USD fluctuation		(421	)		(1,756	)		(3,512	)		1,756			3,512
Contingent consideration		USD fluctuation		(3,066	)		(12,787	)		(25,577	)		12,788			25,576

Impacts on profit or loss				76,514			478,814			957,660			(478,777	)		(957,518	)

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

Interest rate risk

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

Sensitivity analysis on changes in interest rates:

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


	September 30, 2017
Exposure interest rate (i)	Probable			25%			50%			-25%			-50%
Cash and cash equivalents		239,964			59,991			119,983			(59,991	)		(119,983	)
Marketable securities		31,605			7,901			15,803			(7,901	)		(15,803	)
Leases		(29,891	)		(7,473	)		(14,945	)		7,473			14,945
Advances on real state credits		(6,236	)		(1,559	)		(3,118	)		1,559			3,118
Interest rate derivatives		640,055			(978,925	)		(1,812,866	)		1,164,783			2,551,933
Loans, borrowings and debentures		(981,748	)		(150,960	)		(301,987	)		150,961			301,988

Impacts on profit or loss		(106,251	)		(1,071,025	)		(1,997,130	)		1,256,884			2,736,198

The probable scenario considers the estimated interest rate, made by a specialized third part and Banco Central do Brasil as follows:


	Probable		25%		50%		-25%		-50%
SELIC		6.75%		8.44%		10.13%		5.06%		3.38%
CDI		6.00%		7.50%		9.00%		4.50%		3.00%
TJ462		8.00%		9.75%		11.50%		6.25%		4.50%
TJLP		7.00%		8.75%		10.50%		5.25%		3.50%
IPCA		4.68%		5.90%		7.00%		3.50%		2.30%

⁽ⁱ⁾	The external source used by the company for market projections was a specialized consultant.

Cosan Limited

Notes to the consolidated financial statements

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

Financial instruments fair value

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

•

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

•

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

•

The market value of the Senior Notes are listed on the Luxembourg Stock Exchange (Note 16) is based on their quoted market price are as follows:


Senior Notes Due	September 30, 2017			December 31, 2016
2018		99.75	%		95.68	%
2023		101.93	%		96.05	%
2024		108.81	%		—
2027		108.46	%		100.65	%

•

The fair value of Perpetual Notes listed on the Luxembourg Stock Exchange (Note 16) is based on their quoted market price as September 30, 2017 of 102,02% (100.03% at December 31, 2016) of the face value of obligations at September 30, 2017.

•

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

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

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

Cosan Limited

Notes to the consolidated financial statements

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

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


							Assets and liabilities measured at fair value
	Carrying amount						September 30, 2017						December 31, 2016
	September 30, 2017			December 31, 2016			Level 2			Level 3			Level 2			Level 3
Assets
Investment funds		2,998,836			3,203,907			2,998,836			—			3,203,907			—
Marketable securities		2,043,625			1,291,580			2,043,625			—			1,291,580			—
Derivate financial instruments		1,042,165			751,080			1,042,165			—			751,080			—

Total		6,084,626			5,246,567			6,084,626			—			5,246,567			—

Liabilities
Loans, borrowings and debentures		(6,169,390	)		(3,813,467	)		(6,169,390	)		—			(3,813,467	)		—
Contingent consideration (i)		(114,570	)		(166,807	)		—			(114,570	)		—			(166,807	)
Derivative financial instruments		(270,779	)		(295,844	)		(270,779	)		—			(295,844	)		—

Total		(6,554,739	)		(4,276,118	)		(6,440,169	)		(114,570	)		(4,109,311	)		(166,807	)

⁽ⁱ⁾

The valuation of the contingent consideration considers the present value of expected payment, discounted using a risk-adjusted discount rate. The expected payment is determined by considering the probable scenarios of forecast revenue and EBITDA, the amount to be paid under each scenario and the probability of each scenario. The significant unobservable inputs are the forecast of the annual growth rate of revenue, EBITDA margin forecast and the 13% discount rate adjusted for risk.

Hedge accounting

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


	Debt			Derivative			Total
At January 01, 2017		1,534,072			(146,697	)		1,387,375
Initial measurement		2,461,836			—			2,461,836
Interest amortization		(134,173	)		(48,460	)		(182,633	)
Fair value		160,328			(48,172	)		112,156

At September 30, 2017		4,022,063			(243,329	)		3,778,734

In May 2017 the indirect subsidiary Comgás designated hedge accounting of fair value for its “ Debentures 5 ^th issuance ” loan agreement. Using derivative operations, Comgás protected its future cash flow by changing the interest risk linked to the IPCA (National Wide Consumer Price Index) by percentages of the CDI (Interbank deposit rate).

Capital management

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

Cosan Limited

Notes to the consolidated financial statements

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

28	Post-employment benefits


	September 30, 2017		December 31, 2016
	September 30, 2017		December 31, 2016
Futura		47,330		43,401
Futura II		154		163
Comgás		413,125		397,916

		460,609		441,480

During the nine month period ended September 30, 2017, the expense recognized in relation to the actuarial contributions was R$20,796 (R$ 18,934 for the nine month period ended September 30, 2016).

29	Share-based payment

Cosan Limited

In August 2016, Cosan Limited established a Long-term Retention Plan (“Plan”), targeting remuneration and retention of certain executives with a high level of strategic importance for the Company. The executives would receive, during the term of the Plan (10 years), 1% each, of the shares of Cosan Limited.

In August 2017, the Board of Directors reviewed the existing to become a discretionary Plan based on the following characteristics, which are: (i) The Board of Directors will decide the number of shares to be granted, up to 1% of the shares of Cosan Limited for each executive; (ii) The Board of Directors may decide whether or not to deliver shares or cash in certain years, which may or may not be compensated in subsequent years.

On the same date, the Board of Directors approved the first granting of shares to executives participating in the Plan. (I) 533,546 shares, previously held in treasury, were granted and (ii) US$ 316,425 settled in cash.

Subsidiary Cosan S.A

On April 27, 2017 and July 31, 2017, two new share-based compensation plans was approved at the Assembly of the subsidiary Cosan S.A, which became effective as of the granting.

Cosan S.A granted 274,000 and 412,031 shares of the “share-based compensation plan”, which will be transferred in full and free of charge after 5 years, from the approval of the grant, in a quantity adjusted by the number proportional to the dividends paid in the period, service condition of the beneficiary in the Company, under the terms of each Share granting Program.

The Black and Scholes methodology was used to calculate the fair value of the shares granted under the terms of the “share-based compensation plan”. Given the characteristics of the Plan, the fair value is equivalent to the value of the share on the grant date (R$ 32.11 and R$ 36.06).

Cosan Limited

Notes to the consolidated financial statements

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

The assumptions for fair value measurement of share option plans were as follows


							Number of instruments on September 30, 2017
Share option programs	Expected life (years)		Interest rate		Expected volatility		Granted		Exercisable options			Outstanding		Market price on grant date		Exercise price at September 30, 2017		Fair value at grant date—R$(i)
August 18, 2011 (A)		1 to 7		12.39		31.44		4,825,000		(3,908,000	)		522,000		22.80		25.81		6.80
August 18, 2011 (B)		1 to 12		12.39		30.32		5,000,000		(2,000,000	)		3,000,000		22.80		25.81		8.15
December 12, 2012 (C)		1 to 7		8.78		31.44		700,000		(48,000	)		652,000		38.89		46.50		10.10
April 24, 2013		5 to 7		13.35		27.33		970,000		—			860,000		45.22		53.54		17.95
April 25, 2014		5 to 7		12.43		29.85		960,000		—			945,000		39.02		43.25		15.67
August 31, 2015		5 to 7		14.18		33.09		759,000		—			674,000		19.96		19.50		7.67
April 27, 2017		5		15.00		32.75		274,000		—			274,000		38.15		—		37.02
July 31, 2017		5		15.00		33.70		412,031		—			412,031		36.10		—		36.06
August 31, 2017		10		—		—		533,546		(533,546	)		—		—		—		—

								14,433,577		(6,489,546	)		7,339,031

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

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


	Number of options			Weighted- average exercise price—R$
At December 31, 2016		12,138,238			23.96
Granted		686,031			—
Cancellation or settlements		(4,160,238	)		—
Share options exercised		(1,325,000	)		26.08

At September 30, 2017		7,339,031			34.11

Subsidiary Cosan Logística.

On December 21, 2016, a new share-based compensation model was approved at the Assembly of the subsidiary Cosan Logística, which became effective as of the granting

Plan of 2017

On September 1, 2017 Rumo S.A, granted 691.900 shares of the “share-based compensation plan”, which will be transferred in full and free of charge after 5 years, from the approval of the grant, in a quantity adjusted by the number proportional to the dividends paid in the period, service condition of the beneficiary in the Rumo S.A, under the terms of each Share granting Program.

Cosan Limited

Notes to the consolidated financial statements

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

Plan of 2016

On January 2, 2017 Rumo S.A, granted 1,513,180 shares of the “share-based compensation plan”, which will be transferred in full and free of charge after 5 years, from the approval of the grant, in a quantity adjusted by the number proportional to the dividends paid in the period, service condition of the beneficiary in the Rumo S.A, under the terms of each Share granting Program.

Subsidiary Comgás.

On April 207, 2017, a new share-based compensation plan was approved at the Assembly of the subsidiary Comgás, which became effective as of the granting.

Comgás issued 61,300 shares of the “share-based compensation plan”, which will be transferred in full and free of charge after 5 years, from the approval of the grant, in a quantity adjusted by the number proportional to the dividends paid in the period, service condition of the beneficiary in the Company, under the terms of each Share granting Program.

The expenses related to the plans described above are being disclosed in note 11 line item “c) Officers’ and directors’ compensation”

Cosan Limited

Notes to the consolidated financial statements

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

30	Subsequent events

Exercise of put option on Comgás

On October 10, 2017 Shell Gas B.V, Integral Investments B.V and Shell Brazil Holding B.V. (jointly referred to as “Shell”) exercised their put option on the shares issued by Comgás against the Company. The option was exercised in compliance with the agreement between Shell and the Company executed on November 5, 2012 and amended on this date (“Option Agreement”).

According to Option Agreement, Shell will transfer to CZZ, on the transaction date, 21,805,645 common shares issued by Comgás, which, on this date, correspond to 16.77% of the total equity of Comgás, at an implicit price of R$53.05 per Comgás Share.

In return, Cosan Limited:

Will deliver to Shell, on the Transaction Date, 20,349,395 common shares issued by Cosan S.A and held by the Company, which correspond to 4.99% of the equity of Cosan S.A on this date;

Pay the equivalent of R$208,650 on the Transaction Date; and

Will pay Shell, one year after the Transaction Date, R$214,910.

In conclusion of the process above, the Company approved the sale of the same interest, previously bought, to its subsidiary Cosan S.A. The interest sold of 16,77% of the equity of Comgás will be received in two installments, the first equivalent to R$948,201 and the second equivalent to R$214,910, which will be converted into U.S. dollar and received on the same date when the Company will makes the payments to Shell.

The consummation of the Acquisition will depend on the fulfillment of all conditions precedent established in the option agreement, including approval from Brazil’s antitrust agency CADE ( Conselho Administrativo de Defesa Econômica ).

Increase in share capital—Cosan Logística

On September 22, 2017, in a meeting of the Cosan Logística’s Board of Directors, was approved the increase of the its share capital in the amount of R$750,000, through the public offering of 95,177,665 common shares issued by Cosan Logística. Consequently, Cosan Logística’s new share capital increased to R$2,284,893, divided into 463,224,241 common shares.

The Cosan Logística’s Board of Directors will approve the capital increase after the closing of the period of “Preemptive Right and Remainder Subscription” to be held on October 26, 2017.

The Company has pledged to exercise its Preemptive Right to subscribe the shares in the amount of its interest in the share capital of the subsidiary.

Cosan Limited

Notes to the consolidated financial statements

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

Increase in share capital—Rumo S.A

On October 4, 2017, in a meeting of the Rumo’s Board of Directors, was approved the increase of the Rumo’s share capital in the amount of R$ 2,640,000, through the public offering of 220,000,000 common shares issued by Rumo. Consequently, Rumo’s new share capital increased to R$ 9,654,897, divided into 1,559,015,898 common shares.

The financial settlement of the transaction occurred on October 10, 2017.

Debentures issuance – Comgás

On October 4, 2017, was approved at a Comgás’s Meeting of the Board of Directors, the issuance of 400,000 debentures, of R$ 1 each, totaling R$ 400,000. The conclusion of the offer will be subject to, among other factors, market conditions.

Dividends payment—Comgás

On November 7, 2017, the Board of Directors approved the interim dividends payment of R$ 700,000, distributed based on the profits of the Comgás for the year 2017. Payment is expected to occur as of November 23 2017.

Business Combination—Stanbridge Group Limited

On 31 October 2017, the Company acquired, through its indirect subsidiary Comma, the control of the company Stanbridge Group Limited in the amount of 40 million pounds sterling. The investment aims to expand the business in the European market.

***

SIGNATURES

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

Date: November 14, 2017