Edgar Filing: Cosan Ltd.

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, 2018

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

LOGO

3Q18 Earnings Release

São Paulo, November 9, 2018 – COSAN LIMITED (“CZZ” or “Company”) (NYSE: CZZ) announces today its results for the third quarter (July, August, and September) of 2018 (3Q18). The results are presented on a consolidated basis, in accordance with the accounting practices adopted in Brazil and with International Financial Reporting Standards (IFRS). Comparisons in this report take into consideration 3Q18 and 3Q17, except where indicated differently.

Summary of Financial Information

Executive Summary—Cosan Pro forma¹

3Q18

3Q17

Chg.%

2Q18

Chg.%

BRL mln

(Jul-Sep)

3Q18/3Q17

(Apr-Jun)

3Q18/2Q18

Net Revenue

17,219.3

14,483.9

18.9

15,070.4

14.3

Gross profit

1,983.1

2,322.3

-14.6

1,692.7

17.2

EBIT

1,046.3

1,403.2

-25.4

868.1

20.5

EBITDA²

1,872.6

2,231.3

-16.1

1,630.9

14.8

Adjusted EBITDA³

2,147.2

2,413.1

-11.0

1,864.0

15.2

Net Income (Loss)

63.0

248.1

-74.6

22.7

n/a

Adjusted Net Income

191.9

267.5

-28.3

113.7

68.8

Note 1: Considering 50% of the results of Raízen Combustíveis and Raízen Energia.

Note 2: As of 1Q18, EBITDA excludes asset amortization arising from contracts with clients at Raízen Combustíveis.

Note 3: Adjusted EBITDA and Net Income does not include non-recurring effects in Cosan S/A, as detailed in its earnings release.

Message from the CEO

With elections now behind, one would be tempted to simply look forward. There are challenges ahead indeed: passing much awaited and needed reforms, reorganizing the country to move ahead; ensuring proper regulatory framework to foster investments; increasing productivity and competitiveness; and more. But we are optimistic and remain confident that Cosan will honor its track record of endeavoring Brazilian ups and downs. Our portfolio is prepared to continue growing on a sustainable and efficient way while levering upcoming opportunities.

This was yet another quarter where we performed despite adversities and we reiterate our consolidated guidance for this year. The trucker’s strike of last May charged a toll on fuels distribution results and required an extra-mile from our team. Uncertainties related to definition of diesel subsidy mechanism and consequent delays in payment to distribution companies reduced attractiveness of import changing supply dynamics and requiring logistic reorganization. Otto-cycle volume growth lagged behind expectations. But again we outperformed the street delivering robust results. We managed to increase further ethanol production in our meals reaching record levels, to benefit from higher profitability versus sugar. Comgás delivered volume growth way above GDP, in all business segments. Moove’s international expansion continues. Rumo’s stellar operational turnaround combined with results of liability management continue to yield growing EBITDA and now consistent profits.

In attention to shareholders and investor’s concerns related to the announcement of possible corporate restructuring, Cosan decided to cancel the proposal. In line with long-term goal of simplifying corporate structure and reducing the number of listed vehicles, we announced the possible incorporation of RLOG3 by CSAN3. Additional details, however, were required for proper appreciation of the proposal. By cancelling the restructuring, we reiterate our commitment to best practice governance standards and value creation to shareholders.

We are prepared to look forward!

Marcos Marinho Lutz

CZZ’s CEO

Investor Relations

E-mail: ri@cosan.com.br

Tel: +55 11 3897-9797

Website: ri.cosanlimited.com

1 of 9

COSAN LIMITED

Earnings Release

3rd Quarter of 2018

Business Units

Cosan S/A (B3: CSAN3) and Cosan Logística S/A (B3: RLOG3), companies controlled by the Company, reported its results on November 7, 2018 and November 8, 2018, respectively. Its Earnings Releases containing the comments from the main financial and operational information, besides its Financial Statements, can be found at the websites below:

•

Cosan S/A (CSAN3): http:/ir.cosan.com.br

•

Cosan Logística (RLOG3): http://ir.cosanlogistica.com.br

Cosan S/A and Cosan Logística S/A business units that compose Cosan Limited and interest in each reportable segment are shown below:


• Cosan S.A. (CSAN3) (60.3%)
Raízen Combustíveis (50%)		Fuel Distribution
Raízen Energia (50%)		Sugar, Ethanol and Cogeneration
Comgás (80.1%)		Natural Gas Distribution
Moove (100%)		Lubricants, Basic Oils and Specialties
Cosan Corporativo (100%)		Corporate Structure and Other Investments
• Cosan Logística S.A. (RLOG3) (72.5%)
Rumo S.A. (RAIL3) (28.5%)		Logistics Operator

Executive Summary 3Q18

Cosan S.A. (CSAN3):

Cosan S/A Proforma: Cosan S/A presented adjusted pro forma EBITDA of R$1.2 billion (-25%) in the quarter, due to the impacts in Raízen’s results, partially offset by EBITDA expansion in Comgás (normalized) and Moove. Net income came in at R$44 million (-91%), negatively affected by foreign exchange variation (non-cash) in the unhedged portion of the perpetual bond. The generation of pro forma free cash flow to equity (FCFE) totaled R$829 million in 3Q18, driven by higher debt raising at Raízen, versus a cash consumption of R$519 million in 3Q17, when two mills of Grupo Tonon were acquired by Raízen Energia. Leverage (net debt/pro forma EBITDA, normalized by Comgás’ regulatory current account) came to 2.0x at the end of 3Q18.

Raízen Combustíveis: Adjusted EBITDA fell 24% to R$683 million in 3Q18, still affected by non-recurring effects as a result of truckers’ strike, as well as lower demand in Otto cycle. Total volume sold in the period came in 1.5% higher than in 3Q17, sustained by diesel (+5%) and aviation (+9%) growth. Otto cycle fuel sales dropped (-3%), impacted by the World Cup in July, a high level of unemployment and increased fuel prices at the pump due to higher prices in the international market. In gasoline-equivalent, sales shrank 7%, with a strong increase of ethanol in replacement of gasoline. The adjustment to the supply mix following strike-related measures also raised additional logistics challenges.

Raízen Energia: Adjusted EBITDA in 3Q18, second quarter of 2018/19 crop was R$641 million (-54%), reflecting lower sugar prices, and mainly, lower volumes sold of this commodity, in line with crop commercialization strategy. Crushing totaled 24.3 million tons (-14%), affected by higher rainfall volume in the period. Agricultural productivity, measured in kilos of TRS/hectare, came 7% lower than 3Q17, due to off-season drier weather, which increases sucrose concentration in the cane, but reduces density of the sugarcane. Sugar-equivalent production was 12% lower than the previous crop, in line with lower crushing in the period, with a mix of 51% for ethanol (versus 43% in 3Q17), on the back of higher ethanol profitability.

Comgás: EBITDA, normalized by regulatory current account effect, increased 14% to R$546 million, mainly boosted by higher sales volume (+9% versus 3Q17, ex-thermal power) and strict control of operating expenses. Industrial segment volume was 7% higher than the same period last year due to negotiations to increase volumes. New connections (110,000 in the last 12 months), bolstered residential segment consumption (+7%). In the commercial segment, volume was up 13% on the back of the uptake in economic activity and addition of 1,100 clients to the base in 2017.

Moove: 3Q18 EBITDA reached R$60 million (+34%), bolstered by expansion of international operations and improved mix of products sold.

2 of 9

COSAN LIMITED

Earnings Release

3rd Quarter of 2018

Cosan Logística S.A. (RLOG3):

Rumo reached R$ 952 million (+19%) EBITDA in 3Q18. The largest volumes transported (+ 15%, 16 billion TKUs) reflect increased capacity following investment plan and continuous improvement in operational efficiency, allowing market share gains and significant growth in grain transportation. The record soybean crop extended the grain export period and attenuated the lower corn production in some states, causing the transported agricultural volume to grow by 14%, adding to the ramp-up of fertilizer volumes in Northern Operations. Variable cost grew below volume expansion, since the reduction in fuel consumption (liters/TKB:-4.5%) compensated for higher diesel prices. In turn, fixed costs remained stable, allowing an increase of 2.2 p.p. of EBITDA margin (50.7%). Strong EBITDA growth coupled with prepayment of expensive debt lines and reduction in cost of debt resulted in a net profit of R$229 million in the period.

Cosan Limited Proforma:

Adjusted EBITDA came to R$2.1 billion (-11%), impacted by the effects previously described in Raízen’s results, partially offset by EBITDA expansion in Comgás (normalized), Moove and Rumo. CZZ posted net income of R$63 million in the quarter, dropping 75% compared to 3Q17, affected by negative foreign exchange variation in the perpetual bond at Cosan S/A, neutralized in part by higher net income at Cosan Logística S/A.

The following tables present the key operating and financial metrics of our businesses. Historical data for the information presented can be found on our Investor Relations website (ir.cosanlimited.com) in the Results Center.

3 of 9

COSAN LIMITED

Earnings Release

3rd Quarter of 2018

Main Operational and Financial Metrics

Raízen Combustíveis


	3Q18		3Q17		Chg.%			2Q18		Chg.%
	(Jul-Sep)		(Jul-Sep)		3Q18/3Q17			(Apr-Jun)		3Q18/2Q18
Otto Cycle Volume (Gasoline+ Ethanol) (‘000 cbm)		2,858		2,958		-3	%		2,740		4	%
Gasoline Equivalent⁴ Volume (‘000 cbm)		2,567		2,760		-7	%		2,512		2	%
Diesel Volume (‘000 cbm)		3,185		3,028		5	%		2,828		13	%
Adjusted EBITDA Margin⁵ (BRL/cbm)		102		136		-25	%		87		17	%
Adjusted EBIT⁵ (BRL/cbm)		75		110		-31	%		61		24	%

Note	4: Sum of gasoline and ethanol volumes, adjusted by the energy coefficient of 0,7221.

Note	5: Excludes asset sale and other non-recurring items. From 2Q18 onwards includes asset amortization arising from contracts with clients.

Raízen Energia


Indicators	3Q18		3Q17		Chg.%
	(Jul-Sep)		(Jul-Sep)		3Q18/3Q17
Sugarcane Crushed (mln mt)		24.3		28.3		-14%
TRS/ha		9.6		10.3		7%
Sugar/Ethanol Production Mix		49% x 51%		57% x 43%		n/a
Adjusted EBITDA⁶ (BRL mln)		641		1,394		-54%
Adjusted EBIT⁶/TRS sold (BRL/ton)		10		262		-96%

Note	6: Excludes effects from biological assets variation, debt hedge accounting effects, foreign exchange hedge on sugar exports and nonrecurring gains/losses where applicable.

Comgás


	3Q18		3Q17		Chg.%			2Q18		Chg.%
	(Jul-Sep)		(Jul-Sep)		3Q18/3Q17			(Apr-Jun)		3Q18/2Q18
Total Sales Volume (cbm) Ex-Thermal Power		1,209		1,114		9	%		1,111		9	%
Normalized EBITDA⁷ (BRL mln)		546		477		14	%		491		11	%
IFRS EBITDA (BRL mln)		388		463		-16	%		331		17	%

Note	7: Includes the effect from the regulatory Current Account.

Moove


	3Q18		3Q17		Chg.%			2Q18		Chg.%
	(Jul-Sep)		(Jul-Sep)		3Q18/3Q17			(Apr-Jun)		3Q18/2Q18
Total Sales Volume⁸ (‘000 cbm)		92		93		-2	%		88		4	%
EBITDA (BRL mln)		60		44		34	%		66		-9	%

Note	8: Considering the volume sold of finished lubricants and base oil.

Rumo

Operating and Financial Performance Index

3Q17

3Q18

Chg. %

9M17

9M18

Chg. %

Consolidated

Operating ratio

70%

68%

-2.7%

74%

72%

-3,1%

Diesel Consumption (liters/ ‘000 GTK)

4.4

4.2

-4.5%

4.6

4.4

-4.3%

Rail accidents (Accidents /Km)

15.4

-2.6%

15.4

-2.6%

Personal Accidents (Accidents /MM MHW)

0.3

-3.2%

0.3

-3.2%

North Operation

Total volume transported (RTK million)

9.2

11.3

22.4%

24.6

28.6

16.4%

Cycle of railcars – Grains from Rondonópolis (MT) – Santos (SP)

9.6

9.3

-3.1%

9.8

2.0%

South Operation

Total volume transported (RTK million)

4.3

4.2

-1.9%

10.4

11.1

6.4%

Cycle of railcars – Grains from North PR – Ports PR/SC

6.9

7.0

1.4%

7.1

7.7

8.5%

Note	9: Operating Ratio calculation considers proportional allocation of part of 4Q16 depreciation in prior quarters from the same year.

4 of 9

COSAN LIMITED

Earnings Release

3rd Quarter of 2018

Cosan Corporate Results

The following table provides a breakdown of the 3Q18 results by business unit for all segments detailed previously. All information reflects 100% of their financial performance, regardless of the interest held by Cosan. For the purpose of reconciling EBITDA in the column “Cosan S/A Accounting”, the “Adjustments & Eliminations” column reflects the eliminations from operations among all Cosan subsidiaries for consolidation purposes.

Earnings by Business Unit

Raízen
Combustíveis

Raízen
Energia

Comgás

Moove

Cosan
Corporate

Desconsolidation
Raízen

Adjustments
and
Elimination

Cosan S/A
Accounting

Cosan
Logistica

Cosan
Limited
(Parent
Company)

Adjustments
and
Elimination

CZZ

3Q18

Net Revenue

21,053.1

5,452.1

1,901.0

1,011.5

0.4

(26,505.2

)

0.0

2,912.9

1,877.1

—

(11.6

)

4,778.4

Cost of Goods and Services Sold

(20,183.8

)

(5,099.5

)

(1,377.3

)

(839.1

)

(2.6

)

25,283.3

(0.0

)

(2,219.0

)

(1,198.8

)

—

11.6

(3,406.2

)

Gross Profit

869.3

352.5

523.7

172.4

(2.2

)

(1,221.9

)

—

694.0

678.3

—

1,372.2

Gross Margin (%)

4.1

6.5

27.5

17.0

n/a

4.6

0.0

23.8

36.1

n/a

—

28.7

Selling Expenses

(319.8

)

(255.6

)

(155.3

)

(97.7

)

(0.2

)

575.5

—

(253.2

)

(2.0

)

—

(255.2

)

General and Administrative Expenses

(117.3

)

(171.4

)

(89.3

)

(33.0

)

(32.3

)

288.7

—

(154.5

)

(77.7

)

(10.3

)

—

(242.6

)

Other Operating Income (Expenses)

84.9

(9.5

)

(7.8

)

(0.1

)

(32.3

)

(75.4

)

—

(40.2

)

(4.5

)

—

(44.7

)

Equity Pick-up

0.0

(7.4

)

—

(3.9

)

238.6

7.4

(152.4

)

82.2

3.3

66.3

(66.3

)

85.5

Depreciation and Amortization

45.2

620.0

116.3

22.1

2.8

(665.2

)

—

141.2

354.7

0.1

—

495.9

EBITDA

562.3

528.7

387.6

59.8

174.4

(1,091.0

)

(152.4

)

469.4

952.0

56.0

(66.3

)

1,411.2

EBITDA Margin (%)

2.7

9.7

20.4

5.9

n/a

4.1

n/a

16.1

50.7

n/a

29.5

Financial result

(181.0

)

(114.7

)

(55.4

)

(10.6

)

(185.3

)

295.7

—

(251.4

)

(257.5

)

7.6

(22.4

)

(523.7

)

Income and Social Contribution Taxes

(48.2

)

106.7

(48.5

)

(8.3

)

57.6

(58.5

)

—

0.7

(111.8

)

(0.3

)

7.6

(103.7

)

Non-controlling Interest

(12.5

)

(7.9

)

—

(0.4

)

—

20.4

(33.3

)

(33.7

)

(164.3

)

(0.3

)

(26.7

)

(224.9

)

—

Net Income

275.3

(107.2

)

167.4

18.3

43.9

(168.2

)

(185.7

)

43.9

63.8

63.0

(107.8

)

63.0

Earnings by Business Unit

Raízen
Combustíveis

Raízen
Energia

Comgás

Moove

Cosan
Corporate

Desconsolidation
Raízen

Adjustments
and
Elimination

Cosan S/A
Accounting

Cosan
Logistica

Cosan
Limited
(Parent
Company)

Adjustments
and
Elimination

CZZ

9M18

Net Revenue

60,142.7

14,056.5

4,924.7

2,562.8

0.8

(74,199.2

)

-0.0

7,488.3

4,938.3

—

(30.3

)

12,396.3

Cost of Goods and Services Sold

(57,530.4

)

(12,834.9

)

(3,460.1

)

(2,083.7

)

(2.7

)

70,365.4

0.0

(5,546.4

)

(3,316.0

)

—

30.3

(8,832.2

)

Gross Profit

2,612.2

1,221.6

1,464.6

479.1

(1.9

)

(3,833.9

)

—

1,941.8

1,622.4

—

3,564.2

Gross Margin (%)

4.3

8.7

29.7

18.7

n/a

5.2

0.0

25.9

32.9

n/a

—

28.8

Selling Expenses

(1,004.8

)

(595.7

)

(461.9

)

(277.5

)

(0.2

)

1,600.4

—

(739.6

)

(8.2

)

—

(747.8

)

General and Administrative Expenses

(367.6

)

(500.7

)

(247.9

)

(92.4

)

(95.9

)

868.4

—

(436.2

)

(215.5

)

(40.6

)

—

(692.3

)

Other Operating Income (Expenses)

281.7

149.8

(12.1

)

(4.2

)

(58.8

)

(431.5

)

—

(75.2

)

(13.0

)

(0.0

)

—

(88.2

)

Equity Pick-up

0.0

(12.9

)

—

0.2

842.5

12.9

(401.9

)

440.8

8.4

195.5

(195.5

)

449.2

Depreciation and Amortization

146.0

1,661.7

350.1

71.4

10.4

(1,807.7

)

—

431.9

1,051.7

0.2

—

1,483.9

EBITDA

1,667.5

1,923.8

1,092.8

176.6

696.0

(3,591.3

)

(401.9

)

1,563.6

2,445.8

155.1

(195.5

)

3,969.0

EBITDA Margin (%)

2.8

13.7

22.2

6.9

n/a

4.8

n/a

20.9

49.5

n/a

32.0

Financial result

(513.4

)

(266.6

)

(143.0

)

(14.3

)

(563.2

)

780.0

—

(720.5

)

(1,065.8

)

49.4

(51.2

)

(1,788.2

)

Income and Social Contribution Taxes

(213.4

)

116.4

(179.5

)

(24.7

)

202.9

97.0

—

(1.3

)

(192.8

)

(7.3

)

15.0

(186.4

)

Non-controlling Interest

(32.9

)

(7.9

)

—

(0.5

)

—

40.8

(84.0

)

(84.6

)

(98.5

)

(5.0

)

(130.5

)

(318.6

)

—

Net Income

761.8

104.0

420.2

65.7

325.3

(865.8

)

(485.9

)

325.3

36.9

192.0

(362.2

)

192.0

Note	10: As of 1Q18, the results of Cosan and its Business Units were impacted by the adoption of the new accounting standards (IFRS 15 and IFRS 9), as detailed in the quarterly financial statements as of September 30, 2018.

5 of 9

COSAN LIMITED

Earnings Release

3rd Quarter of 2018

Loans and Financing

In September 30, 2018, Cosan Limited’s (CZZ Corporate) gross debt totaled R$ 1.9 billion, and cash and cash equivalents came to R$ 810 million, in line with 2Q18. CZZ Corporate’s net debt ended the period at R$ 1.1 billion.


Loans and Financing 3Q18 BRL mln	Comgás			Moove			Cosan Corporate			Consolidated			Raízen Energia			Raízen Combustíveis			Consolidated Pro forma			Cosan Logística			Cosan Limited			CZZ Pro forma
Opening balance of pro forma net debt		1,387.6			567.4			2,634.2			4,589.3			4,086.8			988.3			9,664.4			7,095.3			1,073.6			17,833.3
Cash, cash equivalents and marketable securities		2,467.1			155.7			1,838.2			4,461.0			1,175.7			345.8			5,982.6			2,571.9			844.8			9,399.3
Gross Debt		3,854.7			723.1			4,472.4			9,050.3			5,262.6			1,334.2			15,647.0			9,667.2			1,918.4			27,232.6
Cash items		(496.4	)		(5.4	)		(112.3	)		(614.1	)		766.0			691.8			843.7			(593.0	)		(65.0	)		185.7
Funding		0.2			(0.4	)		28.9			28.8			875.2			704.3			1,608.2			0.4			—			1,608.6
Payment of principal on loans and borrowings		(518.6	)		(0.0	)		(15.0	)		(533.7	)		(63.3	)		(1.0	)		(597.9	)		(330.5	)		—			(928.5	)
Payment of Interest on loans borrowings		(49.1	)		(3.5	)		(144.1	)		(196.7	)		(45.9	)		(11.5	)		(254.1	)		(265.0	)		(61.2	)		(580.3	)
Derivatives		71.0			(1.4	)		17.9			87.5			—			—			87.5			2.2			(3.8	)		85.9
Noncash items		98.2			21.9			271.1			391.3			118.8			(48.4	)		461.6			188.7			70.0			720.4
Provision for interest (accrual)		63.0			7.2			94.4			164.5			72.9			17.0			254.4			178.7			29.4			462.5
Monetary variation and MTM adjustment of debt		(31.3	)		3.6			69.9			42.2			69.0			30.7			142.0			122.3			43.1			307.4
Exchange variation, net of derivatives		66.6			11.1			106.8			184.5			-23.1			-96.1			65.2			-112.2			-2.6			-49.6
Closing balance of gross debt		3,456.5			739.7			4,631.3			8,827.5			6,147.3			1,977.6			16,952.3			9,263.0			1,923.4			28,138.7
Cash, cash equivalents and marketable securities		2,431.0			145.1			1,899.2			4,475.4			1,230.9			978.0			6,684.3			2,386.7			809.7			9,880.7
Closing balance of pro forma net debt		1,025.5			594.6			2,732.0			4,352.1			4,916.4			999.6			10,268.1			6,876.2			1,113.7			18,258.0
Obligations due to preferred shareholders of subsidiaries		—			—			1,082.0			1,082.0			—			—			1,082.0			—			—			1,082.0
Total pro forma net debt and obligations due to preferred shareholders of subsidiaries		1,025.5			594.6			3,814.0			5,434.1			4,916.4			999.6			11,350.1			6,876.2			1,113.7			19,340.0

6 of 9

COSAN LIMITED

Earnings Release

3rd Quarter of 2018

Cash Flow Reconciliation


Cash Flow Statement	3Q18
BRL mln	Comgás			Moove			Cosan Corporate			Eliminations			Cosan S/A			Raízen Combined			Eliminations			Cosan S/A Pro forma			Cosan Logística			Cosan Limited (Parent Company)			Eliminations/ Adjusted			CZZ Proforma
EBITDA		387.6			59.8			174.4			(152.4	)		469.4			545.5			(84.1	)		930.8			952.0			56.0			(66.3	)		1,872.6
Noncash impacts on EBITDA		29.8			9.8			(214.4	)		152.4			(22.4	)		169.6			84.1			231.3			76.0			(62.5	)		66.3			311.1
Changes in assets and liabilities		137.7			(53.5	)		(6.7	)		—			77.6			(886.9	)		—			(809.3	)		(45.0	)		(2.0	)		—			(856.3	)
Operating financial result		35.7			(3.2	)		12.4			—			44.8			(16.3	)		—			28.5			38.3			4.6			—			71.5
Operating Cash Flow		590.8			12.9			(34.3	)		—			569.4			(188.1	)		—			381.3			1,021.4			(3.8	)		—			1,398.8
CAPEX		(130.4	)		(11.1	)		(2.0	)		—			(143.5	)		(258.2	)		—			(401.7	)		(536.5	)		—			—			(938.2	)
Other		—			(0.7	)		(1.4	)		—			(2.1	)		20.7			—			18.6			53.4			—			—			72.0
Cash Flow from Investing Activities		(130.4	)		(11.9	)		(3.3	)		—			(145.6	)		(237.5	)		—			(383.0	)		(483.1	)		—			—			(866.2	)
Funding		0.2			(0.4	)		28.9			—			28.8			1,579.5			—			1,608.2			0.4			—			—			1,608.6
Loans amortization (Principal)		(518.6	)		(0.0	)		(15.0	)		—			(533.7	)		(81.0	)		—			(614.6	)		(407.7	)		—			—			(1,022.4	)
Loans amortization (Interest)		(49.1	)		(3.5	)		(144.1	)		—			(196.7	)		(59.4	)		—			(256.1	)		(318.5	)		(61.2	)		—			(635.8	)
Derivatives		71.0			(1.4	)		17.9			—			87.5			—			—			87.5			2.2			(3.8	)		—			85.9
Other		0.0			(9.3	)		14.7			—			5.4			0.7			—			6.1			0.6			0.0			—			6.8
Cash Flow from Financing Activities		(496.4	)		(14.7	)		(97.6	)		—			(608.6	)		1,439.8			—			831.2			(723.1	)		(65.0	)		—			43.1
Dividends received		—			—			328.5			—			328.5			—			(328.5	)		0.0			(0.0	)		—			—			0.0
Free Cash Flow to Equity		(36.1	)		(13.7	)		193.3			—			143.6			1,014.2			(328.5	)		829.4			(184.8	)		(68.8	)		—			575.8
Cosan S.A		—			—			(150.9	)		—			(150.9	)		—			328.5			177.6			(0.7	)		(0.4	)		—			176.4
Cosan Limited		—			0			0			—			—			—			—			—			0			0			0			—
Non-controlling Shareholders		—			—			—			—			—			(339.6	)		—			(339.6	)		—			—			—			(339.6	)
Dividends paid		—			—			(150.9	)		—			(150.9	)		(339.6	)		328.5			(162.0	)		(0.7	)		(0.4	)		—			(163.2	)
Exchange variation impact on cash and cash equivalents		—			3.0			18.6			—			21.7			12.6			—			34.3			0.3			34.1			—			68.8
Cash Generation (Burn) in the Period		(36.1	)		(10.6	)		61.1			—			14.4			687.3			—			701.7			(185.2	)		(35.1	)		—			481.4

7 of 9

COSAN LIMITED

Earnings Release

3rd Quarter of 2018

Financial Statements

Cosan Limited – Accounting


Indicators	3Q18			3Q17			Chg.%			2Q18			Chg.%			9M18			9M17			Chg.%
BRL mln	(Jul-Sep)			(Jul-Sep)			3Q18/3Q17			(Apr-Jun)			3Q18/2Q18			(Jan-Sep)			(Jan-Sep)			9M18/9M17
EBITDA		1,411.2			1,665.7			-15.3	%		1,240.0			13.8	%		3,969.0			3,840.1			3.4	%
CAPEX		704.6			627.2			12.3	%		698.8			0.8	%		2,009.8			1,768.1			13.7	%

Income Statement for the Period	3Q18			3Q17			Chg.%			2Q18			Chg.%			9M18			9M17			Chg.%
BRL mln	(Jul-Sep)			(Jul-Sep)			3Q18/3Q17			(Apr-Jun)			3Q18/2Q18			(Jan-Sep)			(Jan-Sep)			9M18/9M17
Net Revenue		4,778.4			3,711.0			28.8	%		4,074.5			17.3	%		12,396.3			9,865.3			25.7	%
Cost of Goods and Services Sold		(3,406.2	)		(2,405.6	)		41.6	%		(2,913.3	)		16.9	%		(8,832.2	)		(6,567.2	)		34.5	%
Gross profit		1,372.2			1,305.4			5.1	%		1,161.2			18.2	%		3,564.2			3,298.0			8.1	%
Selling, general & administrative expenses		(497.7	)		(471.2	)		5.6	%		(483.9	)		2.9	%		(1,440.0	)		(1,420.5	)		1.4	%
Other net operating income (expenses)		(44.7	)		(30.5	)		46.5	%		(20.9	)		n/a			(88.2	)		(94.3	)		-6.4	%
Financial results		(523.7	)		(522.8	)		0.2	%		(743.8	)		-29.6	%		(1,788.2	)		(1,825.7	)		-2.1	%
Equity Pick-up		85.5			415.8			-79.4	%		68.9			24.1	%		449.2			713.3			-37.0	%
Expenses with income and social contribution taxes		(103.7	)		(148.9	)		-30.4	%		0.3			n/a			(186.4	)		(228.7	)		-18.5	%
Non-controlling interest		(224.9	)		(299.7	)		-25.0	%		40.8			n/a			(318.6	)		(217.7	)		46.3	%
Net Income (Loss)		63.0			248.1			-74.6	%		22.7			n/a			192.0			224.4			-14.5	%

Balance Sheet	3Q18			2Q18
BRL mln	09/30/18			06/30/18
Cash and cash equivalents		4,023			4,073
Marketable Securities		3,649			3,805
Trade accounts receivable		1,625			1,547
Inventories		770			762
Derivative financial instruments		2,283			1,741
Other current assets		1,088			1,166
Other non-current assets		4,178			4,222
Investments		8,101			8,367
Property, plant and equipment		12,323			12,084
Intangible assets		16,899			16,926
Total Assets		54,938			54,692

Loans and borrowings		22,155			22,343
Financial instruments and derivatives		24			31
Trade accounts payable		2,719			2,535
Payroll		305			241
Other current liabilities		1,969			1,920
Other non-current liabilities		11,269			11,351
Shareholders’ Equity		16,497			16,271
Total Liabilities		54,938			54,692

8 of 9

COSAN LIMITED

Earnings Release

3rd Quarter of 2018

Financial Statement including Raízen

Cosan Limited Proforma (including 50% of Raízen)

Indicators

3Q18

3Q17

Chg.%

2Q18

Chg.%

9M18

9M17

Chg.%

BRL mln

(Jul-Sep)

3Q18/3Q17

(Apr-Jun)

3Q18/2Q18

(Jan-Sep)

9M18/9M17

EBITDA

1,872.6

2,231.3

-16.1

1,630.9

14.8

5,331.8

5,225.6

2.0

Adjusted EBITDA

2,147.2

2,413.1

-11.0

1,864.0

15.2

5,959.6

5,939.3

0.3

Investments

865.7

815.9

6.1

972.6

-11.0

2,954.6

2,743.3

7.7


Income Statement for the Period	3Q18			3Q17			Chg.%			2Q18			Chg.%			9M18			9M17			Chg.%
BRL mln	(Jul-Sep)			(Jul-Sep)			3Q18/3Q17			(Apr-Jun)			3Q18/2Q18			(Jan-Sep)			(Jan-Sep)			9M18/9M17
Net Revenue		17,219.3			14,483.9			18.9	%		15,070.4			14.3	%		47,201.9			40,299.2			17.1	%
Cost of Goods and Services Sold		(15,236.1	)		(12,161.6	)		25.3	%		(13,377.7	)		13.9	%		(41,724.7	)		(34,780.7	)		20.0	%
Gross profit		1,983.1			2,322.3			-14.6	%		1,692.7			17.2	%		5,477.1			5,518.5			-0.7	%
Selling, general & administrative expenses		(929.5	)		(925.0	)		0.5	%		(881.8	)		5.4	%		(2,674.1	)		(2,613.7	)		2.3	%
Other net operating income (expenses)		(7.3	)		5.9			n/a			57.2			n/a			131.1			(14.8	)		n/a
Financial results		(671.5	)		(521.1	)		28.9	%		(931.7	)		-27.9	%		(2,178.2	)		(1,927.1	)		13.0	%
Equity Pick-up		(2.3	)		5.4			n/a			17.8			n/a			9.9			(17.9	)		n/a
Expenses with income and social contribution taxes		(74.4	)		(330.9	)		-77.5	%		30.2			n/a			(234.9	)		(480.4	)		-51.1	%
Non-controlling interest		(235.1	)		(308.6	)		-23.8	%		38.3			n/a			(338.9	)		(240.2	)		41.1	%
Net Income (Loss)		63.0			248.1			-74.6	%		22.7			n/a			192.0			224.4			-14.5	%


Balance Sheet	3Q18		2Q18
BRL mln	09/30/18		06/30/18
Cash and cash equivalents		6,217		5,595
Marketable Securities		3,664		3,805
Trade accounts receivable		3,408		2,985
Inventories		3,656		2,976
Derivative financial instruments		3,656		2,401
Other current assets		3,631		3,543
Other non-current assets		6,927		6,939
Investments		673		670
Property, plant and equipment		18,896		18,894
Intangible assets		19,746		19,757
Total Assets		70,473		67,564
Loans and borrowings		31,218		29,645
Financial instruments and derivatives		971		455
Trade accounts payable		5,088		4,675
Payroll		540		558
Other current liabilities		3,126		2,863
Other non-current liabilities		12,904		12,987
Shareholders’ Equity		16,627		16,382
Total Liabilities		70,473		67,564

9 of 9

Cosan Limited

Consolidated interim financial statements as of

September 30, 2018

Cosan Limited

Consolidated interim financial statements

September 30, 2018

Contents


Report on review of interim financial information			3

Consolidated statements of financial position			4

Consolidated statements of profit or loss and other comprehensive income			6

Consolidated statements of changes in equity			7

Consolidated statements of cash flows			9

Notes to the consolidated interim financial statements			11

Report on Review of Interim Financial Information

To the Management, Board of Directors and Shareholders of

Cosan Limited

Bermuda

Introduction

We have reviewed the accompanying consolidated interim financial information of Cosan Limited (“Company”) for the quarter ended September 30, 2018, which comprises the statement of financial position as of September 30, 2018, and the respective statements of profit and loss and comprehensive income 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 explanatory 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 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 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 audit standards and, consequently, does not enabled 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 interim information

Based on our review, nothing has come to our attention that causes us to believe that the accompanying consolidated interim financial information 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 9, 2018

KPMG Auditores Independentes

CRC 2SP014428/O-6

Rogério Hernandez Garcia

Accountant CRC 1SP213431/O-5

Cosan Limited

Consolidated statements of financial position

(In thousands of Brazilian Reais - R$)


	Note		September 30, 2018		December 31, 2017
Assets
Cash and cash equivalents		6		4,023,197		4,555,177
Marketable securities		7		3,648,629		3,853,343
Trade receivables		8		1,625,033		1,277,766
Derivative financial instruments		28		125,605		317,763
Inventories				769,589		663,061
Receivables from related parties		10		45,312		30,059
Income tax receivable				282,588		312,274
Other current tax receivable		9		400,324		327,410
Dividends receivable				7,526		13,466
Other financial assets				—		1,340,000
Other current assets				352,004		343,617

Total current assets				11,279,807		13,033,936
Trade receivables		8		49,644		44,654
Restricted cash		7		113,908		225,634
Deferred tax assets		20		1,545,518		1,636,080
Receivables from related parties		10		87,463		169,755
Income tax receivable				281,078		247,996
Other non-current tax receivable		9		786,380		778,820
Judicial deposits		21		849,136		766,107
Derivative financial instruments		28		2,157,812		844,450
Other non-current assets				465,235		472,753
Investments in associates		11		349,089		301,342
Investments in joint ventures		12		7,751,661		8,447,799
Property, plant and equipment		13		12,322,605		11,681,575
Intangible assets and goodwill		14		16,898,580		16,973,610

Total non-current assets				43,658,109		42,590,575

Total assets				54,937,916		55,624,511

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, 2018			December 31, 2017
Liabilities
Loans, borrowings and debentures		15		2,046,866			3,903,392
Leases		16		121,701			261,344
Real estate credit certificates				14,066			86,745
Derivative financial instruments		28		418			1,520
Trade payables		18		2,719,061			2,433,995
Employee benefits payable				305,119			291,080
Income tax payables				12,538			21,146
Other taxes payable		19		320,757			418,878
Concessions payables		17		29,385			27,413
Dividends payable				29,075			191,478
Payables to related parties		10		389,127			328,263
Deferred revenue				9,552			11,529
Other financial liabilities				410,874			382,702
Other current liabilities				632,011			662,835

Total current liabilities				7,040,550			9,022,320

Loans, borrowings and debentures		15		20,108,310			17,785,554
Leases		16		463,938			682,794
Preferred shareholders payable in subsidiaries				1,082,021			1,442,679
Derivative financial instruments		28		23,276			113,565
Other taxes payable		19		155,479			161,637
Provision for legal proceedings		21		1,389,816			1,348,157
Concessions payables		17		3,113,172			2,905,921
Post-employment benefits		29		500,153			485,459
Deferred tax liabilities		20		3,925,184			3,902,310
Deferred revenue				43,930			56,495
Other non-current liabilities				595,024			658,207

Total non-current liabilities				31,400,303			29,542,778

Total liabilities				38,440,853			38,565,098

Shareholders’ equity		22
Share capital				5,328			5,328
Additional paid-in capital				3,106,685			3,245,543
Accumulated other comprehensive loss				(715,919	)		(394,212	)
Retained earnings				3,300,509			3,182,098

Equity attributable to:
Owners of the Company				5,696,603			6,038,757
Non-controlling interests		11		10,800,460			11,020,656

Total shareholders’ equity				16,497,063			17,059,413

Total shareholders’ equity and liabilities				54,937,916			55,624,511

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, 2018 and 2017

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


	Note		July 1, 2018 to September 30, 2018			January 1, 2018 to September 30, 2018			July 1, 2017 to September 30, 2017			January 1, 2017 to September 30, 2017
Net sales		24		4,778,417			12,396,336			3,711,023			9,865,262
Cost of sales		25		(3,406,199	)		(8,832,176	)		(2,405,635	)		(6,567,249	)

Gross profit				1,372,218			3,564,160			1,305,388			3,298,013

Selling expenses		25		(255,186	)		(747,787	)		(255,269	)		(794,287	)
General and administrative expenses		25		(242,555	)		(692,260	)		(215,948	)		(626,231	)
Other income (expenses), net		26		(44,706	)		(88,226	)		(30,510	)		(94,269	)

Operating expenses				(542,447	)		(1,528,273	)		(501,727	)		(1,514,787	)

Income before interest in earnings of investees and financial results				829,771			2,035,887			803,661			1,783,226

Interest in earnings of subsidiaries		11		1,390			17,028			5,658			6,984
Interest in earnings of joint ventures		12		84,089			432,202			410,178			706,272

Interest in earnings of investees				85,479			449,230			415,836			713,256
Finance expense				(925,992	)		(1,938,293	)		(841,177	)		(2,606,547	)
Finance income				179,977			527,068			177,290			695,061
Foreign exchange, net				(408,650	)		(1,876,386	)		293,593			99,860
Derivatives				631,001			1,499,434			(152,484	)		(14,026	)

Finance results, net		27		(523,664	)		(1,788,177	)		(522,778	)		(1,825,652	)
Profit before taxes				391,586			696,940			696,719			670,830

Income tax (expenses) benefits		20
Current				(109,297	)		(93,110	)		(96,976	)		(138,315	)
Deferred				5,630			(93,291	)		(51,917	)		(90,387	)

				(103,667	)		(186,401	)		(148,893	)		(228,702	)

Profit for the period				287,919			510,539			547,826			442,128

Other comprehensive income (loss)
Items that will never be reclassified to profit or loss
Actuarial loss on defined benefit plan				—			(1,042	)		—			—
Gain on share subscription of subsidiary				—			—			—			9,000

				—			(1,042	)		—			9,000
Items that are or may subsequently be reclassified to profit or loss:
Foreign currency translation effect				(55,920	)		(275,943	)		19,676			3,811
(Loss) gain on cash flow hedge in joint ventures				(28,983	)		(112,937	)		(50,067	)		272,136
Changes in fair value of available for sale securities				42			95			48			3,371

				(84,861	)		(388,785	)		(30,343	)		279,318
Total other comprehensive income, net of tax				(84,861	)		(389,827	)		(30,343	)		288,318

Total comprehensive income				203,058			120,712			517,483			730,446

Total net income attributable to:
Owners of the Parent				62,997			191,983			248,110			224,444
Non-controlling interests				224,922			318,556			299,716			217,684

				287,919			510,539			547,826			442,128
Total comprehensive (loss) income attributable to:
Owners of the Company				(6,199	)		(129,724	)		234,989			407,390
Non-controlling interests				209,257			250,436			282,494			323,056

				203,058			120,712			517,483			730,446
Basic earnings per share from:		23
Continuing operations			R$	0.2575		R$	0.7873		R$	0.9367		R$	0.8478
Diluted earnings per share from:		23
Continuing operations			R$	0.2467		R$	0.7528		R$	0.8294		R$	0.7426

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, 2018 and 2017

(In thousands of Brazilian Reais - R$)


	Share capital		Additional paid-in capital			Accumulated other comprehensive loss			Retained earnings			Equity attributable to owners of the Company			Non-controlling interest			Total equity
At December 31, 2017		5,328		3,245,543			(394,212	)		3,182,098			6,038,757			11,020,656			17,059,413

New standards, interpretations and changes adopted by the Company—Note 3.2		—		—			—			(3,950	)		(3,950	)		(4,738	)		(8,688	)

At January 1, 2018		5,328		3,245,543			(394,212	)		3,178,148			6,034,807			11,015,918			17,050,725

Profit for the period		—		—			—			191,983			191,983			318,556			510,539
Other comprehensive income:
Loss on cash flow hedge in joint ventures		—		—			(67,238	)		—			(67,238	)		(45,699	)		(112,937	)
Foreign currency translation effects		—		—			(254,310	)		—			(254,310	)		(21,633	)		(275,943	)
Actuarial loss on defined benefit plan		—		—			(215	)		—			(215	)		(827	)		(1,042	)
Change in fair value of available for sale securities		—		—			56			—			56			39			95

Total comprehensive income for the period		—		—			(321,707	)		191,983			(129,724	)		250,436			120,712

Contributions by and distributions to owners of the Company:
Dividends—non-controlling interests		—		(7,349	)		—			—			(7,349	)		7,349			—
Share options exercised – Subsidiaries		—		14,795			—			—			14,795			9,753			24,548
Dividends		—		—			—			(69,622	)		(69,622	)		(72,554	)		(142,176	)
Business combination		—		—			—			—			—			7,199			7,199
Share-based payment transactions		—		32,487			—			—			32,487			6,994			39,481

Total contributions by and distributions to owners of the Company		—		39,933			—			(69,622	)		(29,689	)		(41,259	)		(70,948	)

Transactions with owners of the Company
Change of shareholding interest in subsidiary		—		(178,791	)		—			—			(178,791	)		(424,635	)		(603,426	)

At September 30, 2018		5,328		3,106,685			(715,919	)		3,300,509			5,696,603			10,800,460			16,497,063

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, 2018 and 2017

(In thousands of Brazilian Reais - R$)


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

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
Gain on share subscription of an subsidiary		—		—			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:
Share options exercised – Subsidiaries		—		21,933			—			—			21,933			2,815			24,748
Dividends—non-controlling interests		—		(13,815	)		—			—			(13,815	)		13,815			—
Increase capital		—		—			—			—			—			13,097			13,097
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 cash flows

For the nine month period ended September 30, 2018 and 2017

(In thousands of Brazilian Reais - R$)


	Note		September 30, 2018			September 30, 2017
Cash flows from operating activities
Profit before taxes				696,940			670,830
Adjustments for:
Depreciation and amortization				1,483,860			1,343,593
Lease and concession				152,645			143,277
Interest in earnings of associates		11		(17,028	)		(6,984	)
Interest in earnings of joint ventures		12		(432,202	)		(706,272	)
Losses on disposals of assets				2,809			33,841
Share-based payments				40,616			10,929
Legal proceedings provision				87,040			70,020
Indexation charges, interest and exchange, net				1,883,010			1,938,691
Provisions for employee benefits				135,708			108,505
Allowance for doubtful accounts				11,909			23,381
Deferred revenue				(8,542	)		(12,735	)
Other				(22,068	)		(22,191	)

			4,014,697			3,594,885
Changes in:
Trade receivables				(278,380	)		(142,457	)
Inventories				(78,373	)		13,674
Other taxes, net				(203,824	)		(205,767	)
Related parties, net				(10,705	)		48,458
Trade payables				231,639			69,611
Other financial liabilities				8,679			60,530
Employee benefits				(138,853	)		(89,069	)
Provision for legal proceedings				(97,402	)		(59,906	)
Judicial deposits				(48,227	)		(30,438	)
Post-employment benefits				(23,200	)		(20,120	)
Cash received on sale of credit rights				1,340,000			—
Concessions payable				(79,681	)		(84,039	)
Other assets and liabilities, net				(213,075	)		9,172

				408,598			(430,351	)

Net cash generated by operating activities				4,423,295			3,164,534

Cash flows from investing activities
Capital contribution in associates				(7,517	)		(3,967	)
Marketable securities				344,615			(594,602	)
Restricted cash				112,549			(24,696	)
Dividends received from associates				11,251			7,629
Dividends received from joint ventures				1,052,127			902,210
Acquisition of subsidiary, net of cash acquired				(73,945	)		—
Acquisition of property, plant and equipment and intangible assets				(1,993,435	)		(1,698,159	)
Cash received on sale of fixed assets, and intangible assets				1,576			8,097

Net cash used in investing activities				(552,779	)		(1,403,488	)

Cosan Limited

Consolidated statements of cash flows

For the nine month period ended September 30, 2018 and 2017

(In thousands of Brazilian Reais - R$)


	Note		September 30, 2018			September 30, 2017
Cash flows from financing activities
Loans and borrowings and debentures raised		15		2,750,267			4,305,339
Amortization of principal on loans, borrowings and debentures		15		(4,685,398	)		(1,742,219	)
Payment of interest on loans, borrowings and debentures		15		(1,186,695	)		(1,147,271	)
Derivative financial instruments				252,427			(291,891	)
Amortization of principal on financing leases		16		(352,506	)		(290,881	)
Payment of interest on financing leases		16		(130,294	)		(231,351	)
Real estate credit certificates				(77,404	)		(97,334	)
Proceeds from issuing shares				—			1,895
Non-controlling interest subscription				4,163			20,375
Dividends paid				(731,055	)		(689,656	)
Acquisition of non-controlling interest				—			(285,972	)
Payments to redeem entity’s shares				(607,932	)		(79,447	)
Share options exercised—subsidiaries				24,548			34,500

Net cash used in financing activities				(4,739,879	)		(493,913	)

(Decrease) increase in cash and cash equivalents				(869,363	)		1,267,133

Cash and cash equivalents at beginning of the period				4,555,177			4,499,588

Effect of exchange rate fluctuations on cash held				337,383			35,090

Cash and cash equivalents at end of the period				4,023,197			5,801,811

Supplemental cash flow information
Income taxes paid				65,452			37,080

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

Cosan Limited

Notes to the consolidated interim 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). Mr. Rubens Ometto Silveira Mello is the ultimate controlling shareholder of Cosan. Cosan controls its subsidiaries Cosan S.A.(“Cosan S.A.”) and Cosan Logística S.A. (“Cosan Logística”) through a 60.25% and 72.50% 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 under the Mobil licensed trademark in Brazil, Bolivia, Uruguay, Paraguay, Argentina and Europe market through its indirect subsidiaries Cosan Lubrificantes e Especialidades S.A. (“CLE”), Stanbridge Group Limited (“Stanbridge”), TTA—SAS Techniques & Technologie Appliquees (“TTA”), LubrigrupoII, S.A. (“Lubrigrupo II”), Cosan Lubrificantes S.R.L (“Cosan S.R.L”), and Comma Oil & Chemicals Ltd. (“Comma”) under the Comma’s brand to the Europe and Asian market and corporate activities (“Moove”); and (iv) Digital wallet business, 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.

On January 31, 2018, the Cosan S.A received the amount of 1,340,000 related to sales of credit rights, as stated in the financial statements as of December 31, 2017.

On March 19, 2018, the Subsidiary Cosan S.A entered into a new agreement with ExxonMobil Lubricants Trading Company which grants our subsidiary Moove the exclusive production, import, distribution and marketing rights in Brazil, Bolivia, Paraguay and Uruguay of lubricants and certain other related products under the Mobil brand until November 30, 2038. This agreement will come into force on December 1, 2018.

On April 20, 2018, the General Meeting approved the merger of Brado Holding S.A., Rumo Malha Norte Holding Ltda. and Tezza Consultoria de Negócios Ltda. by “Rumo”, so that the merged companies will be extinguished and “Rumo” will succeed the merged ones. This transaction serves the interest of the parties and their shareholders, generating benefits to the parties by providing administrative efficiency and reducing operating costs. In addition, the incorporation of PGT S.A. was approved by ALL Armazéns Gerais Ltda.

On April 24, 2018, Raízen Combustíveis and its subsidiary Raízen Argentina Holdings S.A.U. entered into a contract for the acquisition of Shell’s downstream business in Argentina through the acquisition of 100% of the shares issued by Shell Compañía Argentina de Petróleo S.A. and Energina Compañía Argentina de Petróleo S.A. (“Shell Argentina”).

Shell Argentina operates in the petroleum refining, fuel distribution, fuel reseller operations, manufacturing and commercialization of automotive and industrial lubricants, and the manufacture and sale of liquefied petroleum gas, among others.

At May 31, 2018, Cosan through its subsidiary Comma, acquired control of the companies TTA and LubrigrupoII, in the preliminary amount of R$ 43,610 and R$ 5,933 respectively, generating an additional goodwill in the Lubricants segment of R$ 22,924 and R$ 2,383 (Note 14), respectively. The transferred consideration, net of cash received, totaled R$ 33,543 and R$ 4,533, respectively.

On June 30, 2018, the Company supplemented the price paid for the acquisition of the full control of Stanbridge Group Limited, due to the fulfillment of certain contractual conditions, which generated an increase in consideration of R$ 31,726 (Note 14). In addition, after compliance with the contractual conditions and revision of the fair value of the transaction, the remaining balance and the additional consideration were settled in cash in the amount of R$ 35,869. Additionally, part of the purchase price was allocated in “Customer Relationship” at the amount of R$ 136,499 (Note 14).

Cosan Limited

Notes to the consolidated interim financial statements

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

As announced to the market, on August 2, 2018, the Civil Police of the State of Paraná lauched on July 31, 2018, the Operation “Controlled Margin”, with the objective of collecting statements and obtaining documents from employees of fuel distributors operating in Paraná, including Raízen Combustíveis, on suspicion of possible practices to control the final price of fuel sold at retailers located in that region. On the same date, search and seizure warrants were executed and three of Raízen’s employees were temporarily arrested and on August 3, 2018, the court determined the release of them. To this moment, in view of the existing information, no irregular conduct may be attributed to Raízen or its employees. No complaints were filed against any employees of Raízen, and no court order was issued determining the freeze of any assets or funds in its bank accounts.

In addition, also on July 31, 2018, in connection with the so-called “Operação Dubai”, the Prosecution Office of the Federal District filed a complaint against, among other parties, Raízen and one employee on the grounds of alleged anticompetitive practice. In this context, the assessment of Raízen Combustíveis, on the basis of the information available, is that the above claims do not find factual and legal support. In an autonomous action and aiming to obtain indemnification for the damages potentially suffered by the civil society due to these conducts, the Prosecution Office filed a redress action in the face of all those involved, which is in the initial stage of the proceedings. There is an application for the blocking of assets and securities against, among others, Raízen Combustíveis, which was not effected due to guarantees given in court. Both procedures are being defended and appealed to, since Raízen Combustíveis understands that there are no elements that constitute the responsibility of its or its representatives in the investigated practices.

There was no relevant update on this topic in relation to that disclosed in the interim financial statement for the period ended June 30, 2018.

At the present date there is no definitive decision or material impact on the business.

However, if the operations prove to be true in the future, any penalties may have an effect on the future financial position, profit or loss from operation and cash flows of Raízen Combustíveis. Regarding to the financial statements of Raízen Combustíveis, it is currently not practicable to determine whether there is any probable loss arising from a present obligation in view of a past event or a reasonable measure regarding the possible provision for contingencies on this matter in this interim financial information, through interest in earnings of joint ventures.

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, 2017.

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, 2017, except for the adoption of new standards and interpretations effective as of January 1, 2018. 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 7, 2018.

Certain amounts of the comparative balances in the statements of cash flows and in the notes 3, 5, 6, 10, 20, 21, 26 and 33, were reclassified to improve the level of details of disclosures in these consolidated interim financial statements. These reclassifications had inconsequential impacts on the Company´s consolidated interim financial statements.

3	Significant accounting policies

These interim financial information were prepared based on the preparation basis and accounting policies consistent with those adopted in the preparation of the financial statements as of December 31, 2017, except for the adoption of IFRS 15 Customer Contract Revenue and IFRS 9 Financial Instruments, whose effects and changes are disclosed below (Note 3.2) effective as of January 1, 2018. The Company has not adopted in advance any other standard or interpretation issued that is not yet in force.

Cosan Limited

Notes to the consolidated interim financial statements

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

3.1

Basis of consolidation

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


	September 30, 2018			December 31, 2017
	September 30, 2018			December 31, 2017
Directly owned subsidiaries
Cosan Logística S.A.		72.50	%		72.53	%
Cosan S.A.		60.25	%		58.21	%
Interest of Cosan S.A. in its subsidiaries
Companhia de Gás de São Paulo – Comgás ⁽ⁱⁱ⁾		80.12	%		79.87	%
Cosan Biomassa S.A. ⁽ⁱ⁾		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 ⁽ⁱ⁾		100.00	%		100.00	%
Comma Oil Chemicals Limited		100.00	%		100.00	%
Airport Energy Limited		100.00	%		100.00	%
Airport Energy Services Limited		100.00	%		100.00	%
Wessesx Petroleum Limited		100.00	%		100.00	%
Stanbridge Group Limited		100.00	%		100.00	%
TTA—SAS Techniques et Technologies Appliquées ^(iv)		75.00	%		—
Cosan Lubrificantes S.R.L		100,00	%		—
LubrigrupoII, S.A ^(iv)		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 U.S., Inc.		100.00	%		100.00	%
Ilha Terminal Distribuição de Produtos Químicos		100.00	%		100.00	%
Pasadena Empreendimentos e Participações S.A. ⁽ⁱ⁾		100.00	%		100.00	%
Zip Lube S.A.		100.00	%		100.00	%
Payly Soluções de Pagamento S.A.		100.00	%		—
Rumo S.A.		1.71	%		1.71	%
Interest of Cosan Logística S.A. in its subsidiaries
Rumo S.A.		28.47	%		28.47	%
Logispot Armazéns Gerais S.A.		14.52	%		14.52	%
Elevações Portuárias S.A.		28.47	%		28.47	%
Rumo Luxembourg Sarl		28.47	%		28.47	%
Rumo Intermodal S.A.		28.47	%		28.47	%
Rumo Malha Oeste S.A.		28.47	%		28.47	%
Rumo Malha Paulista S.A.		28.47	%		28.47	%
Rumo Malha Sul S.A.		28.47	%		28.47	%
Rumo Malha Norte S.A.		28.33	%		28.33	%
Boswells S.A.		28.47	%		28.47	%
Brado Holding S.A. ⁽ⁱⁱⁱ⁾		—			28.47	%
ALL Serviços Ltda. ⁽ⁱⁱⁱ⁾		—			28.47	%
ALL Argentina S.A.		28.47	%		28.47	%
Paranaguá S.A.		28.47	%		28.47	%
ALL Armazéns Gerais Ltda.		28.47	%		28.47	%
Portofer Ltda.		28.47	%		28.47	%
Brado Logística e Participações S.A.		17.71	%		17.71	%
Brado Logística S.A.		17.71	%		17.71	%
ALL Mesopotâmica S.A.		20.09	%		20.09	%
ALL Central S.A.		20.94	%		20.94	%
Servicios de Inversion Logistica Integrales S.A.		28.47	%		28.47	%
PGT S.A. ⁽ⁱⁱⁱ⁾		—			28.47	%

(i)

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$ 182,596 as of September 30, 2018, 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 subsidiary Cosan S.A.

(ii)

As of September 30, 2018, the Company increased its interest, in Comgás to 80.12% due to the capital increase arising from the partial use of the goodwill tax benefit, according to Ordinary / Extraordinary General Meeting of April 25, 2018, of the subsidiary Comgás. As a consequence, a loss in shareholders’ equity was recognized in the total amount of R$ 7,888.

(iii)

As mentioned in Note 1, the merger of Brado Holding S.A., Rumo Malha Norte Holding Ltda. and Tezza Consultoria de Negócios Ltda. (“ALL Serviços Ltda.”) By “Rumo.” In addition, the incorporation of PGT S.A. by ALL Armazéns Gerais Ltda.

(iv)	Acquisition of control of companies in the Lubricants segment as described in the note 1.

Cosan Limited

Notes to the consolidated interim financial statements

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

3.2

New standards, interpretations and changes adopted by the Company

Although these new standards and amendment below apply for the first time in 2018, they do not have a material impact on the Company’s annual or interim consolidated financial statements. The nature and impact of each new standard or change are described below:

IFRS 15—Customer Contract Revenue

The Company adopted IFRS 15—Revenue from Contracts with Customers as of January 1, 2018, which resulted in changes in accounting policies and adjustments to the amounts recognized in the consolidated financial statements. In accordance with the transitional provisions of IFRS 15, the Company adopted the retrospective method with a cumulative transition effect.

The costs to obtain new contracts, as well as to comply with existing contracts, begin to be recorded as Cost of sales. At September 30, 2018, these costs totalized R$ 62,971. At September 30, 2017 such costs were recorded as selling expenses in the amount of R$ 58,625.

IFRS 9—Financial Instruments

IFRS 9 Financial Instruments replaces IAS 39 Financial Instruments: Recognition and Measurement for annual periods beginning on or after January 1, 2018, bringing together all three aspects of accounting for financial instruments: (i) classification and measurement; (ii) impairment; and (iii) hedge accounting.

The Company applied IFRS 9 with the initial application date of January 1, 2018, retrospectively, except as described below:

•

The Company has adopted the exception of not re-presenting comparative information from previous periods regarding the classification and measurement requirements (including impairment). Differences in the balances of financial assets and liabilities arising from the adoption of IFRS9 were recorded in retained earnings and reserves on January 1, 2018. Thus, the information presented for 2017 generally does not reflect the requirements of IFRS 9, but the requirements of IAS 39.

•

Certain definitions were made based on the facts and circumstances existing at the date of initial application: i) determination of the business model in which a financial asset is held; ii) the designation and revocation of prior designations of certain financial assets and liabilities as measured at fair value through profit or loss.

•

All hedge relationship designations in accordance with IAS 39 existing as of December 31, 2017 meet the hedging criteria in accordance with IFRS 9 as of January 1, 2018 and are therefore designated as continuing hedge relationships.

The effect of the adoption of IFRS 9 is as follows:


Assets
Trades receivables	R$	(11,520	)
Investments in joint ventures	R$	(1,340	)
Deferred tax	R$	4,172
Equity
Retained earnings	R$	8,688

Cosan Limited

Notes to the consolidated interim financial statements

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

(a)

Classification and measurement

Except for certain commercial receivables, in accordance with IFRS 9, the Company initially measures a financial asset at its fair value plus, in the case of a financial asset not measured at the fair value through profit or loss, of transaction costs.

Under IFRS 9, debt financial instruments are subsequently measured at fair value through profit or loss (FVPL), amortized cost, or fair value through other comprehensive income (FVOCI).

The classification is based on two criteria: the Group’s business model for managing the assets; and whether the instruments’ contractual cash flows represent ‘solely payments of principal and interest’ on the principal amount outstanding (the “SPPI criterion”).

The Company recognizes its financial assets at amortized cost for financial assets that are kept within a business model with the objective of obtaining contractual cash flows that meet the “SPPI criterion.” This category includes trade accounts receivable, cash and cash equivalents, restricted cash, receivables from related parties, other financial assets and dividends and interest on shareholders’ equity receivable. No new measurement of financial assets was carried out.

The evaluation of the Company’s business models was carried out from the date of initial application on January 1, 2018 and retrospectively applied to financial assets that were not derecognized before January 1, 2018. The assessment of whether cash flows contractual debt instruments are solely composed of principal and interest were made based on the facts and circumstances as in the initial recognition of the assets.

The accounting of the Company’s financial liabilities remains basically the same as those of IAS 39. Similar to the requirements of IAS 39, IFRS 9 requires contingent consideration to be treated as financial instruments measured at fair value with changes in fair value recognized in profit or loss.

The embedded derivatives are not separated from the related financial asset. Instead, financial assets are classified based on their contractual terms and the Company’s business model.

The accounting of embedded derivatives in financial liabilities and in non-financial related contracts did not change from that required by IAS 39.

(b)

Impairment

The adoption of IFRS 9 has fundamentally changed the Company’s accounting for impairment losses for financial assets by replacing IAS 39’s incurred loss approach with a forward-looking expected credit loss (ECL) approach.

The Company recognizes a provision for expected credit loss for its accounts receivable. The simplified standard approach is applied and the expected credit losses for the entire life of the asset are calculated. The Company has established a provisioning matrix that is based on the historical experience of credit loss of each business segment, adjusted for specific prospective factors for the debtors and for the economic environment.

The adoption of the expected credit loss requirements of IFRS 9 resulted in a rise in the Company’s provisions for losses of R$ 11,520. The rise in the provision resulted in adjustment to retained earnings in the amount of R$ 8,688.

(c)

Hedge accounting

The Company applied the changes of hedge accounting prospectively. At the date of initial application, all of the Company’s existing hedging relationships were eligible to be treated as continuing hedging relationships. Consistent with previous periods, the Company continued to designate the change in the fair value of the entire forward contract in the Company’s cash flow hedge relationships and, as such, the adoption of the hedge accounting requirements of IFRS 9 had no significant impact on the Company’s consolidated interim financial statements.

Cosan Limited

Notes to the consolidated interim financial statements

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

According to IAS 39, all gains and losses arising from the Company’s cash flow hedge relationships were eligible to be subsequently reclassified to income. However, in accordance with IFRS 9, the gains and losses resulting from cash flow hedge of the expected purchases of non-financial assets need to be incorporated into the initial book values of non-financial assets. Therefore, after the adoption of IFRS 9, the net cash flow hedge gain or loss was presented under “Other comprehensive income not being reclassified to income”. This amendment applies only prospectively from the date of initial application of IFRS 9 and has no impact on the presentation of comparative figures.

In the evaluation of the Company, in terms of hedge accounting, no effects of its adoption were identified in this interim financial statement.

3.3

Non-cash transaction

During the period ended September 30, 2018, the Company carried out the following transactions that did not involve cash and are therefore not reflected in the statement of cash flows:

•

Forward purchase of property, plant and equipment in the amount of R$ 17,300 (R$ 4.813 on September, 30, 2017)

4	New standards and interpretations not yet effective

The follow standard is effective for annual periods beginning after January 1, 2019, however The Company has not early adopted it in preparing these consolidated interim financial statements.

IFRS 16 Leases

This standard changes the recognition, measurement, presentation and disclosure of leases. It requires tenants to record all leases in the balance sheet with exemptions available for low-value and short-term leases.

The Company and its subsidiaries lease various properties, equipment and cars. Rental agreements are usually made for fixed periods, but may have extension options as described below. The terms of the lease are negotiated individually and contain a wide variety of different terms and conditions. Lease agreements do not impose any obligation, but leased assets can not be used as collateral for loan purposes. Leases will be recognized as a right of use asset and a corresponding liability on the date the leased asset is made available for use by the Company. Each lease payment will be allocated between the liability and the financial cost. The financial cost will be recognized in profit or loss over the period of the lease, in order to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The asset of the right of use will be depreciated over the shorter useful life of the asset and the lease term by the straight-line method.

Assets and liabilities arising from leasing will initially be measured based on the present value. Lease liabilities include the net present value of the following rental payments:

fixed payments (including fixed payments in substance), less any lease incentives to be received;

ii.

variable rental payment that is based on an index or a rate;

iii.

amounts expected to be paid by the lessee under residual value guarantees;

iv.

the exercise price of a call option, if it is reasonably certain that the option is exercised by the lessee, and

payment of fines for termination of the lease, if the lease term reflects that the lessee exercising that option.

Lease payments will be discounted using the implied interest rate on the lease, if such rate can be determined, or the incremental loan rate of the Company.

Cosan Limited

Notes to the consolidated interim financial statements

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

The rights-of-use assets will be measured at cost, including:

i. the value of the initial measurement of the lease liability;

ii. any lease payments made before or at the commencement date, less any incentives received;

iii. any initial direct costs and;

iv. restoration costs.

Payments associated with short-term leases and leases of low-value assets will continue to be recognized under the straight-line method as expense in the statement of income. Short-term leases are leases with lease term of 12 months or less. Low value assets include computer equipment and small items of office furniture.

The extension and termination options are included in various property and equipment leases throughout the Company. These terms are used to maximize operational flexibility in terms of contract management. Most of the options for extension and termination exercised may be bilateral agreement.

To optimize lease costs during the contract period the Company sometimes provides residual value guarantees in relation to equipment leases.

The Company will adopt IFRS 16 using the modified retrospective approach and therefore the comparative information will not be updated and will continue to be reported under IAS 17 and IFRIC 4. Details of the accounting policies in accordance with IAS 17 and IFRIC 4 will be disclosed separately if they are different from those under IFRS 16.

The Company has not yet finalized the measurement of these leases in the recognition of a right of use asset and a lease liability and as this will affect the profit or loss and the classification of the cash flows. However, it is expected to have a material impact on the jointly-controlled subsidiaries Raízen, mainly in land leases.

The standard is mandatory for periods beginning on or after January 1, 2019.

IFRIC 23 — Uncertainty over Income Tax Treatments

The Interpretation addresses the accounting of income taxes when tax treatment involves uncertainties that affect the application of IAS 12 and does not apply to taxes or charges outside the scope of IAS 12, nor does it specifically include requirements relating to interest and penalties associated with taxes uncertain.

The Company records federal income tax returns in Brazil and in foreign jurisdictions, and is subject to examination by the tax authorities in those jurisdictions for the last five fiscal years. The Company has audits in progress at various stages of completion, of which they may be completed within the next fiscal year. The results of the audits and the timing of settlements are subject to significant uncertainties currently.

The unrecognized uncertainties described above will be included in the Company’s annual financial statements to the extent that the Company is able to make reliable estimates of settlements with the respective tax authorities.

IFRS 17 Insurance Contracts

This standard introduces a new model for accounting for insurance contracts. IFRS 17 is effective for years beginning on or after January 1, 2021, with comparative values required. Based on preliminary work, we estimate that the impact will be irrelevant. We are in the process of reviewing our existing agreements to determine the impact on adoption.

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 interim financial statements

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

5	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

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.

Logistic: 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

Moove: production and distribution of lubricants under the Mobil brand in the Latin American and European market, as well as in the European and Asian market under the Comma brand.

Reconciliation

vi.

Cosan Corporate: digital wallet business, 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.”

Cosan Limited

Notes to the consolidated interim financial statements

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

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:


	July 1, 2018 to September 30, 2018
	Reported segments															Reconciliation												Additional information
	Raízen Energia			Raízen Combustíveis			COMGÁS			Moove			Logistics			Cosan Corporate			Deconsolidated effects			Segment eliminations/ adjustments			Total consolidated			Cosan S.A			Cosan Logística
Statement of income or loss:
Net sales		5,452,056			21,053,118			1,900,984			1,011,517			1,877,111			407			(26,505,174	)		(11,602	)		4,778,417			2,912,905			1,877,111
Domestic market		4,409,458			21,053,118			1,900,984			989,144			1,798,315			407			(25,462,576	)		(11,602	)		4,677,248			2,849,094			1,798,315
External market		1,042,598			—			—			22,373			78,796			—			(1,042,598	)		—			101,169			63,811			78,796
Cost of sales		(5,099,524	)		(20,183,792	)		(1,377,288	)		(839,097	)		(1,198,845	)		(2,571	)		25,283,316			11,602			(3,406,199	)		(2,218,954	)		(1,198,845	)
Gross profit		352,532			869,326			523,696			172,420			678,266			(2,164	)		(1,221,858	)		—			1,372,218			693,951			678,266
Selling expenses		(255,646	)		(319,826	)		(155,308	)		(97,683	)		(1,980	)		(215	)		575,472			—			(255,186	)		(253,206	)		(1,980	)
General and administrative expenses		(171,376	)		(117,278	)		(89,259	)		(33,001	)		(77,680	)		(42,615	)		288,654			—			(242,555	)		(154,535	)		(77,680	)
Other income (expense), net		(9,478	)		84,858			(7,816	)		(110	)		(4,500	)		(32,280	)		(75,380	)		—			(44,706	)		(40,206	)		(4,500	)
Financial results		(114,658	)		(181,008	)		(55,430	)		(10,629	)		(257,452	)		(200,153	)		295,666			—			(523,664	)		(251,376	)		(257,452	)
Finance expense		(298,060	)		(213,760	)		(151,674	)		(9,611	)		(429,617	)		(337,015	)		511,820			1,925			(925,992	)		(427,350	)		(429,617	)
Finance income		143,662			50,188			96,284			222			54,856			30,540			(193,850	)		(1,925	)		179,977			142,895			54,856
Foreign exchange losses, net		(44,948	)		(188,678	)		(30,811	)		(11,677	)		(187,044	)		(179,118	)		233,626			—			(408,650	)		(221,387	)		(187,044	)
Derivatives		84,688			171,242			30,771			10,437			304,353			285,440			(255,930	)		—			631,001			254,466			304,353
Interest in earnings of associates		(7,366	)		2			—			(3,946	)		3,254			224,770			7,364			(222,688	)		1,390			(1,864	)		3,254
Interest in earnings of joint ventures		—			—			—			—			—			84,089			—			—			84,089			84,089			—
Income tax expense benefit		106,712			(48,220	)		(48,508	)		(8,350	)		(111,781	)		64,972			(58,492	)		—			(103,667	)		747			(111,781	)

(Loss) profit from continuing operations		(99,280	)		287,854			167,375			18,701			228,127			96,404			(188,574	)		(222,688	)		287,919			77,600			228,127
Total net income attributable to:
Owners of the Parent		(107,154	)		275,338			134,098			18,320			63,817			96,127			(168,184	)		(249,365	)		62,997			43,942			63,817
Non-controlling interests		7,874			12,516			33,277			381			164,310			277			(20,390	)		26,677			224,922			33,658			164,310

		(99,280	)		287,854			167,375			18,701			228,127			96,404			(188,574	)		(222,688	)		287,919			77,600			228,127
Other selected data:
Depreciation and amortization		620,004			45,222			116,293			22,095			354,659			2,863			(665,226	)		—			495,910			141,163			354,659
EBITDA		528,670			562,304			387,606			59,775			952,019			234,448			(1,090,974	)		(222,688	)		1,411,160			469,392			952,019
Additions to PP&E, intangible and biological assets		462,612			53,794			130,398			11,121			536,516			1,963			(516,406	)		—			679,998			143,482			536,516
Reconciliation of EBITDA:
(Loss) profit for the period		(99,280	)		287,854			167,375			18,701			228,127			96,404			(188,574	)		(222,688	)		287,919			77,600			228,127
Income tax and social contribution		(106,712	)		48,220			48,508			8,350			111,781			(64,972	)		58,492			—			103,667			(747	)		111,781
Financial result, net		114,658			181,008			55,430			10,629			257,452			200,153			(295,666	)		—			523,664			251,376			257,452
Depreciation and amortization		620,004			45,222			116,293			22,095			354,659			2,863			(665,226	)		—			495,910			141,163			354,659

EBITDA		528,670			562,304			387,606			59,775			952,019			234,448			(1,090,974	)		(222,688	)		1,411,160			469,392			952,019

Cosan Limited

Notes to the consolidated interim financial statements

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


	January 1, 2018 to September 30, 2018
	Reported segments															Reconciliation												Additional information
	Raízen Energia			Raízen Combustíveis			Comgás			Moove			Logistics			Cosan Corporate			Deconsolidated effects			Segment eliminations/ adjustments			Total consolidated			Cosan S.A			Cosan Logística
Statement of profit or loss:
Net sales		14,056,548			60,142,694			4,924,663			2,562,762			4,938,340			836			(74,199,242	)		(30,265	)		12,396,336			7,488,251			4,938,340
Domestic market		9,952,512			60,142,694			4,924,663			2,526,111			4,723,204			836			(70,095,206	)		(30,265	)		12,144,549			7,387,789			4,723,204
External market		4,104,036			—			—			36,651			215,136			—			(4,104,036	)		—			251,787			100,462			215,136
Cost of sales		(12,834,904	)		(57,530,450	)		(3,460,087	)		(2,083,659	)		(3,315,983	)		(2,712	)		70,365,354			30,265			(8,832,176	)		(5,546,447	)		(3,315,983	)
Gross profit		1,221,644			2,612,244			1,464,576			479,103			1,622,357			(1,876	)		(3,833,888	)		—			3,564,160			1,941,804			1,622,357
Selling expenses		(595,692	)		(1,004,754	)		(461,864	)		(277,494	)		(8,215	)		(214	)		1,600,446			—			(747,787	)		(739,572	)		(8,215	)
General and administrative expenses		(500,750	)		(367,610	)		(247,855	)		(92,436	)		(215,476	)		(136,493	)		868,360			—			(692,260	)		(436,202	)		(215,476	)
Other income (expense), net		149,814			281,650			(12,133	)		(4,205	)		(13,039	)		(58,849	)		(431,464	)		—			(88,226	)		(75,187	)		(13,039	)
Financial results		(266,600	)		(513,450	)		(142,985	)		(14,327	)		(1,065,843	)		(565,022	)		780,050			—			(1,788,177	)		(720,469	)		(1,065,843	)
Finance expense		(743,830	)		(249,470	)		(383,558	)		(26,901	)		(1,070,437	)		(462,597	)		993,300			5,200			(1,938,293	)		(748,018	)		(1,070,437	)
Finance income		453,730			148,812			239,017			5,494			181,741			106,016			(602,542	)		(5,200	)		527,068			388,123			181,741
Foreign exchange losses, net		(180,070	)		(1,042,830	)		(118,637	)		(30,968	)		(820,184	)		(906,597	)		1,222,900			—			(1,876,386	)		(1,012,142	)		(820,184	)
Derivatives		203,570			630,038			120,193			38,048			643,037			698,156			(833,608	)		—			1,499,434			651,568			643,037
Interest in earnings of associates		(12,924	)		2			—			230			8,419			608,297			12,922			(599,918	)		17,028			8,605			8,419
Interest in earnings of joint ventures		—			—			—			—			—			432,202			—			—			432,202			432,202			—
Income tax (expense) benefit		116,368			(213,378	)		(179,497	)		(24,672	)		(192,808	)		210,576			97,010			—			(186,401	)		(1,315	)		(192,808	)

Profit (loss) from continuing operations		111,860			794,704			420,242			66,199			135,395			488,621			(906,564	)		(599,918	)		510,539			409,866			135,395
Total net income attributable to:
Owners of the Company		103,992			761,792			336,228			65,662			36,916			483,625			(865,784	)		(730,448	)		191,983			325,315			36,916
Non-controlling interests		7,868			32,912			84,014			537			98,479			4,996			(40,780	)		130,530			318,556			84,551			98,478

		111,860			794,704			420,242			66,199			135,395			488,621			(906,564	)		(599,918	)		510,539			409,866			135,395
Other selected data:
Depreciation and amortization		1,661,696			146,012			350,064			71,426			1,051,716			10,654			(1,807,708	)		—			1,483,860			431,903			1,051,716
EBITDA		1,923,788			1,667,544			1,092,788			176,624			2,445,762			853,721			(3,591,332	)		(599,918	)		3,968,977			1,563,553			2,445,762
Additions to PP&E, intangible and biological assets		1,959,288			522,242			382,025			32,455			1,576,380			2,575			(2,481,530	)		—			1,993,435			417,120			1,576,380
Reconciliation of EBITDA:
Profit (loss) for the period		111,860			794,704			420,242			66,199			135,395			488,621			(906,564	)		(599,918	)		510,539			409,866			135,395
Income tax and social contribution		(116,368	)		213,378			179,497			24,672			192,808			(210,576	)		(97,010	)		—			186,401			1,315			192,808
Financial result, net		266,600			513,450			142,985			14,327			1,065,843			565,022			(780,050	)		—			1,788,177			720,469			1,065,843
Depreciation and amortization		1,661,696			146,012			350,064			71,426			1,051,716			10,654			(1,807,708	)		—			1,483,860			431,903			1,051,716

EBITDA		1,923,788			1,667,544			1,092,788			176,624			2,445,762			853,721			(3,591,332	)		(599,918	)		3,968,977			1,563,553			2,445,762

Cosan Limited

Notes to the consolidated interim 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			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 (expense) income, net		1,933			70,798			(11,635	)		(3,739	)		(2,043	)		(13,093	)		(72,731	)		—			(30,510	)		(28,422	)		(2,043	)
Financial 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	)

(Loss) profit 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:
(Loss) profit 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
Financial 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 interim 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			Segment eliminations/ adjustments			Total consolidated			Cosan S.A			Cosan Logística
Statement of profit 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 (expense) income, net		(91,094	)		250,073			(21,523	)		(3,906	)		(6,445	)		(62,395	)		(158,979	)		—			(94,269	)		(87,776	)		(6,445	)
Financial 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
Financial 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 interim financial statements

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


	September 30, 2018
	Reported segments															Reconciliation												Additional information
Statement of financial position:	Raízen Energia			Raízen Combustíveis			Comgás			Moove			Logistics			Cosan Corporate			Deconsolidated effects			Segment elimination			Total consolidated			Cosan S.A			Cosan Logística
Cash and cash equivalents		2,461,750			1,956,006			1,324,258			137,376			74,546			2,487,017			(4,417,756	)		—			4,023,197			3,139,142			74,546
Marketable securities		—			—			1,106,780			7,736			2,312,184			221,929			—			—			3,648,629			1,336,244			2,312,184
Trade receivables		1,314,209			2,715,536			800,275			488,631			385,763			8			(4,029,745	)		—			1,674,677			1,288,914			385,763
Derivative financial instruments		2,410,418			731,906			372,464			38,180			782,629			1,090,144			(3,142,324	)		—			2,283,417			1,421,027			782,629
Inventories		3,598,056			2,175,682			67,347			392,786			305,570			3,886			(5,773,738	)		—			769,589			464,020			305,570
Other financial assets		396,519			—			—			—			—			—			(396,519	)		—			—			400,449			—
Other current assets		3,859,410			2,703,348			206,760			124,937			497,092			586,661			(6,562,758	)		(327,696	)		1,087,754			632,112			497,092
Other non-current assets		4,333,076			3,415,726			345,461			79,599			2,581,319			1,123,830			(7,748,802	)		(1,491	)		4,128,718			1,547,397			2,581,319
Investments in associates		381,784			341,010			—			14,831			42,613			12,126,898			(722,794	)		(11,835,253	)		349,089			306,476			42,613
Investments in joint ventures		—			—			—			—			—			7,751,661			—			—			7,751,661			7,751,661			—
Biological assets		684,565			—			—			—			—			—			(684,565	)		—			—			—			—
Property, plant and equipment		10,893,473			2,269,322			—			282,314			11,904,297			135,994			(13,162,795	)		—			12,322,605			415,634			11,904,297
Intangible assets and goodwill		3,602,906			2,067,800			8,487,456			884,379			7,521,352			5,393			(5,670,706	)		—			16,898,580			9,377,192			7,521,352
Loans, borrowings and debentures		(13,540,371	)		(4,585,069	)		(3,828,973	)		(774,279	)		(10,045,582	)		(7,506,342	)		18,125,440			—			(22,155,176	)		(10,107,482	)		(10,045,582	)
Derivative financial instruments		(2,176,237	)		(115,698	)		—			(418	)		—			(23,276	)		2,291,935			—			(23,694	)		(22,627	)		—
Trade payables		(3,440,519	)		(1,296,556	)		(1,744,850	)		(490,731	)		(477,688	)		(5,792	)		4,737,075			—			(2,719,061	)		(2,241,172	)		(477,688	)
Real estate credit certificates		—			—			—			—			(14,066	)		—			—			—			(14,066	)		—			(14,066	)
Employee benefits payable		(398,265	)		(71,040	)		(58,479	)		(32,510	)		(190,446	)		(23,684	)		469,305			—			(305,119	)		(114,438	)		(190,446	)
Preferred shareholders payable in subsidiaries		—			—			—			—			—			(1,082,021	)		—			—			(1,082,021	)		(1,082,022	)		—
Lease		—			—			—			—			(585,639	)		—			—			—			(585,639	)		—			(585,639	)
Other current liabilities		(2,200,578	)		(2,277,722	)		(203,270	)		(231,522	)		(768,552	)		(959,140	)		4,478,300			329,165			(1,833,319	)		(1,074,503	)		(768,552	)
Other non-current liabilities		(1,358,189	)		(5,022,765	)		(1,921,115	)		(216,627	)		(6,149,192	)		(1,578,537	)		6,380,954			142,713			(9,722,758	)		(3,638,133	)		(6,149,192	)

Total assets (net of liabilities) allocated by segment		10,822,007			5,007,486			4,954,114			704,682			8,176,200			14,354,629			(15,829,493	)		(11,692,562	)		16,497,063			9,799,891			8,176,200

Total assets		33,936,166			18,376,336			12,710,801			2,450,769			26,407,365			25,533,421			(52,312,502	)		(12,164,440	)		54,937,916			28,080,268			26,407,365

Equity attributable to owners of the Company		10,780,963			4,789,041			4,008,263			696,946			2,255,514			14,354,153			(15,570,004	)		(15,618,273	)		5,696,603			8,846,304			2,255,514
Non-controlling interests		41,044			218,445			945,851			7,736			5,920,686			476			(259,489	)		3,925,711			10,800,460			953,587			5,920,686

Total shareholders’ equity		10,822,007			5,007,486			4,954,114			704,682			8,176,200			14,354,629			(15,829,493	)		(11,692,562	)		16,497,063			9,799,891			8,176,200

Cosan Limited

Notes to the consolidated interim financial statements

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


	December 31, 2017
	Reported segments															Reconciliation												Additional information
Statement of financial position:	Raízen Energia			Raízen Combustíveis			Comgás			Moove			Logistics			Cosan Corporate			Deconsolidated effects			Segment elimination			Total consolidated			Cosan S.A			Cosan Logística
Cash and cash equivalents		2,069,357			1,221,890			1,727,521			192,115			179,909			2,455,632			(3,291,247	)		—			4,555,177			3,150,328			179,909
Marketable securities		—			—			509,544			5,439			3,153,160			185,200			—			—			3,853,343			700,035			3,153,160
Trade receivables		688,235			2,679,114			640,682			310,006			371,718			14			(3,367,349	)		—			1,322,420			950,701			371,718
Derivative financial instruments		453,775			88,496			458,476			2,581			110,107			591,049			(542,271	)		—			1,162,213			1,052,105			110,107
Inventories		2,804,223			2,416,833			76,548			301,850			282,291			2,372			(5,221,056	)		—			663,061			380,770			282,291
Other financial assets		476,181			—			—			—			—			1,340,000			(476,181	)		—			1,340,000			1,686,718			—
Other current assets		2,114,733			1,406,945			155,815			98,419			438,369			900,345			(3,521,678	)		(566,122	)		1,026,826			626,672			438,369
Other non-current assets		3,373,565			1,335,986			356,962			70,055			2,770,618			1,100,740			(4,709,551	)		(1,230	)		4,297,145			1,521,810			2,770,618
Investments in associates		348,523			—			—			12,113			41,930			11,862,366			(348,523	)		(11,615,067	)		301,342			259,412			41,930
Investments in joint ventures		—			—			—			—			—			8,447,799			—			—			8,447,799			8,447,799			—
Biological assets		880,668			—			—			—			—			—			(880,668	)		—			—			—			—
Investment property		10,753,205			2,329,858			—			270,229			11,266,278			145,068			(13,083,063	)		—			11,681,575			412,325			11,266,278
Intangible assets and goodwill		3,669,903			4,600,777			8,471,087			873,924			7,622,969			5,630			(8,270,680	)		—			16,973,610			9,350,598			7,622,969
Loans, borrowings and debentures		(10,853,768	)		(2,741,312	)		(4,212,504	)		(589,292	)		(9,670,946	)		(7,216,204	)		13,595,080			—			(21,688,946	)		(9,674,994	)		(9,670,946	)
Derivative financial instruments		(250,033	)		(218,888	)		—			(8,293	)		—			(106,792	)		468,921			—			(115,085	)		(114,531	)		—
Trade payables		(1,341,867	)		(2,124,538	)		(1,444,835	)		(353,474	)		(628,597	)		(7,089	)		3,466,405			—			(2,433,995	)		(1,805,385	)		(628,597	)
Real estate credit certificates		—			—			—			—			(86,745	)		—			—			—			(86,745	)		—			(86,745	)
Employee benefits payable		(356,155	)		(94,158	)		(59,059	)		(34,125	)		(166,864	)		(31,032	)		450,313			—			(291,080	)		(124,017	)		(166,864	)
Preferred shareholders payable in subsidiaries		—			—			—			—			—			(1,442,679	)		—			—			(1,442,679	)		(1,442,679	)		—
Leases		—			—			—			—			(944,138	)		—			—			—			(944,138	)		—			(944,138	)
Other current liabilities		(1,412,872	)		(1,387,037	)		(358,430	)		(237,302	)		(778,049	)		(1,237,815	)		2,799,909			567,352			(2,044,244	)		(1,449,477	)		(778,049	)
Other non-current liabilities		(1,345,322	)		(4,392,359	)		(1,782,718	)		(212,710	)		(5,938,422	)		(1,663,907	)		5,737,681			79,571			(9,518,186	)		(3,630,926	)		(5,938,422	)

Total assets (net of liabilities) allocated by segment		12,072,351			5,121,607			4,539,089			701,535			8,023,588			15,330,697			(17,193,958	)		(11,535,496	)		17,059,413			10,297,264			8,023,588

Total assets		27,632,368			16,079,899			12,396,635			2,136,731			26,237,349			27,036,215			(43,712,267	)		(12,182,419	)		55,624,511			28,539,273			26,237,349

Equity attributable to owners of the Company		12,073,314			4,888,966			3,688,494			701,535			2,211,005			15,330,321			(16,962,280	)		(15,892,598	)		6,038,757			9,446,669			2,211,005
Non-controlling interests		(963	)		232,641			850,595			—			5,812,583			376			(231,678	)		4,357,102			11,020,656			850,595			5,812,583

Total shareholders’ equity		12,072,351			5,121,607			4,539,089			701,535			8,023,588			15,330,697			(17,193,958	)		(11,535,496	)		17,059,413			10,297,264			8,023,588

Cosan Limited

Notes to the consolidated interim financial statements

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

Net sales by segment:


	July 1, 2018 to September 30, 2018			January 1, 2018 to September 30, 2018			July 1, 2017 to September 30, 2017			January 1, 2017 to September 30, 2017
Reported segment
Raízen Energia
Ethanol		2,055,707			6,103,725			1,729,109			4,874,368
Sugar		1,022,944			3,102,638			1,643,065			4,156,307
Gas		94,335			491,126			—			—
Diesel		1,042,233			2,164,923			—			—
Cogeneration		1,181,989			1,594,923			364,848			604,623
Other		54,848			599,213			102,906			223,778

		5,452,056			14,056,548			3,839,928			9,859,076
Raízen Combustíveis
Fuels		21,053,118			60,142,694			18,452,780			53,414,974

		21,053,118			60,142,694			18,452,780			53,414,974
Comgás
Industrial		1,219,122			3,178,540			961,160			2,562,361
Residential		291,761			720,787			255,855			635,758
Cogeneration		88,486			219,012			59,587			158,064
Automotive		67,473			185,625			57,623			163,612
Commercial		106,339			278,624			86,308			233,293
Construction revenue		106,781			292,451			95,996			239,110
Other		21,022			49,624			18,554			48,816

		1,900,984			4,924,663			1,535,083			4,041,014
Moove
Finished goods		918,263			2,302,374			391,934			1,088,521
Basic oil		86,245			236,311			76,191			211,649
Services		7,009			24,077			66,194			192,311

		1,011,517			2,562,762			534,319			1,492,481
Logistics
Northern operations		1,405,529			3,669,554			1,197,157			3,227,690
Southern operations		400,301			1,077,646			387,921			957,973
Container operations		71,281			191,140			63,832			168,564

		1,877,111			4,938,340			1,648,910			4,354,227
Reconciliation
Cosan Corporate		408			838			1,963			2,326

Deconsolidated of adjustments/eliminations joint ventures and eliminations		(26,516,776	)		(74,229,507	)		(22,301,960	)		(63,298,836	)

Total		4,778,418			12,396,338			3,711,023			9,865,262

Cosan Limited

Notes to the consolidated interim financial statements

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

In the following table, revenue is disaggregated by products and service lines and timing of revenue recognition:


	July 1, 2018 to September 30, 2018			January 1, 2018 to September 30, 2018			July 1, 2017 to September 30, 2017			January 1, 2017 to September 30, 2017
At a point in time
Fuels		24,245,393			68,902,468			20,181,889			58,289,342
Sugar		1,022,944			3,102,638			1,643,065			4,156,307
Gas distribution		1,684,695			4,363,576			1,360,946			3,595,024
Lubricants and basic oil		779,535			1,922,650			468,125			1,300,170
Cogeneration		1,270,475			1,813,935			424,435			762,687
Other		301,251			1,265,710			121,460			272,594

		29,304,293			81,370,977			24,199,920			68,376,124
Over time
Transportation		1,612,970			4,280,105			1,364,109			3,648,009
Port Elevation		94,727			228,206			100,331			242,828
Construction revenue		106,781			292,451			95,996			239,110
Other services		176,423			454,106			252,628			658,027

		1,990,901			5,254,868			1,813,063			4,787,974
Desconsolidated of adjustments/eliminations joint ventures and eliminations		(26,516,776	)		(74,229,507	)		(22,301,960	)		(63,298,836	)

Total of net sales		4,778,418			12,396,338			3,711,023			9,865,262

6	Cash and cash equivalents


	September 30, 2018		December 31, 2017
Cash and bank deposits		94,611		53,525
Savings account		1,184,290		2,115,562
Financial investments		2,744,296		2,386,090

		4,023,197		4,555,177

Cosan Limited

Notes to the consolidated interim financial statements

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

Financial investments are composed as follows:


	September 30, 2018		December 31, 2017
	September 30, 2018		December 31, 2017
Investment fund
Repurchase agreements		1,510,924		1,474,509
Bank certificate of deposits—CDB		558,948		377,605

		2,069,872		1,852,114
Bank investments
Repurchase agreements		9,212		153,461
Bank certificate of deposits—CDB		500,767		374,651
Other		164,445		5,864

		674,424		533,976

		2,744,296		2,386,090

7	Marketable securities and Restricted cash

Marketable securities


	September 30, 2018		December 31, 2017
	September 30, 2018		December 31, 2017
Government security ⁽ⁱ⁾		3,567,795		3,640,726
Bank certificate of deposits—CDB		74,558		212,617
Repurchase agreements		6,276		—

		3,648,629		3,853,343

Restricted cash


	September 30, 2018		December 31, 2017
Investments linked to loans		31,129		93,251
Securities pledged as collateral		82,779		132,383

		113,908		225,634

Non-current		113,908		225,634

(i)

Investments in government securities are carried out through exclusive investment funds. These bonds have Selic-linked remuneration and maturity between one and seven years, when asked to redeem the quotas for conversion into cash by the Company, the fund manager may trade them in an active secondary market with high liquidity and with insignificant risk of change in value.

Cosan Limited

Notes to the consolidated interim financial statements

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

8	Trade receivables


	September 30, 2018			December 31, 2017
Domestic – Brazilian Reais		1,713,784			1,388,837
Export – Foreign currency		74,011			54,635
Allowance for doubtful accounts		(113,118	)		(121,052	)

		1,674,677			1,322,420
Current		1,625,033			1,277,766

Non-current		49,644			44,654

9 Other current tax receivables


	September 30, 2018		December 31, 2017
ICMS—State VAT		558,155		477,160
COFINS—Revenue tax		297,705		278,512
ICMS CIAP—State VAT		173,458		214,745
PIS—Revenue tax		89,826		73,214
Credit installment		39,943		38,926
Other		27,617		23,673

		1,186,704		1,106,230
Current		400,324		327,410

Non-Current		786,380		778,820

10	Related parties

Receivables from and payables to related parties:


	September 30, 2018		December 31, 2017
Current Asset
Commercial operation
Raízen Energia S.A.		35,796		22,283
Aguassanta Participações S.A.		—		17
Raízen Combustíveis S.A.		9,156		6,094
Other		360		1,665

		45,312		30,059

Non-current assets
Comercial operations
Raízen Combustíveis S.A.		24,967		18,086
Receivables under the framework agreement
Janus Brasil Participações S.A		—		30,423
Raízen Energia S.A. (i)		37,290		87,969

		37,290		118,392
Financial and corporation operations
Rezende Barbosa		23,144		31,444
Other		2,062		1,833

		25,206		33,277

		87,463		169,755

Cosan Limited

Notes to the consolidated interim financial statements

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


	September 30, 2018		December 31, 2017
Current liabilities
Corporate operations
Raízen Energia S.A. (i)		235,589		198,198
Raízen Combustíveis S.A. (i)		152,833		128,189
Other		705		1,876

		389,127		328,263

(i) Receivables from Raízen Energia and Raízen Fuels recorded as noncurrent assets basically represent tax credits that will be returned by these entities to the Company when effectively used and. The balances recorded as current liabilities represent recoveries related to expenses paid by Raízen of the Company’s responsibility and other costs with shared structure, and;

Related party transactions:


	July 1, 2018 to September 30, 2018			January 1, 2018 to September 30, 2018			July 1, 2017 to September 30, 2017			January 1, 2017 to September 30, 2017
Sales of goods and services
Raízen Combustíveis S.A		56,364			135,727			40,777			109,553
Raízen Energia S.A.		96,945			271,233			131,503			307,563

		153,309			406,960			172,280			417,116
Purchase of goods / Inputs
Raízen Energia S.A.		(1,412	)		(1,599	)		(866	)		(1,158	)
Raízen Combustíveis S.A.		(326,878	)		(882,297	)		(276,155	)		(718,445	)

		(328,290	)		(883,896	)		(277,021	)		(719,603	)
Shared expense
Raízen Energia S.A.		(18,162	)		(54,652	)		(17,170	)		(55,267	)

		(18,162	)		(54,652	)		(17,170	)		(55,267	)
Financial result
Usina Santa Luiza		(60	)		(180	)		(58	)		(320	)
Raízen Energia S.A.		(349	)		4,184			1,868			5,651
Raízen Combustíveis S.A.		1,510			1,510			—			—
Other		(19	)		—			(6	)		(6	)

		1,082			5,514			1,804			5,325

Officers’ and directors’ compensation


	July 1, 2018 to September 30, 2018		January 1, 2018 to September 30, 2018		July 1, 2017 to September 30, 2017		January 1, 2017 to September 30, 2017
Short-term benefits		18,990		53,474		16,511		59,058
Post-employment benefits		135		297		217		678
Other long-term benefits		442		512		358		629
Benefits from termination of employment contract		516		1,193		—		—
Share-based payment transactions		3,025		16,939		16,380		22,562

		23,108		72,415		33,466		82,927

Cosan Limited

Notes to the consolidated interim financial statements

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

11	Investments in subsidiares

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.		120,920,492		61,359,624		50.74	%		5.00	%
Novvi Limited Liability Company		1,011,000		202,200		20.00	%		20.00	%
Janus Brasil Participações S.A.		156,415,002		79,416,452		50.77	%		5.00	%
Radar Propriedades Agrícolas S.A		1,735,703		531,125		51.00	%		3.00	%
Radar II Propriedades Agrícolas S.A		81,440,221		24,920,708		51.00	%		3.00	%
Usina Santa Luiza S.A		28,553,200		9,516,782		33.33	%		33.33	%


	January 1, 2018		Interest in earnings (losses) of associates			Other comprehensive income		Dividends			Capital increase		September 30, 2018		Interest in earnings (losses) of associates in September 30, 2017
Investments in associates
Tellus Brasil Participações S.A.		98,723		2,568			—		(1,855	)		—		99,436		3,838
Novvi Limited Liability Company		11,756		282			2,444		—			—		14,482		(5,606	)
Janus Brasil Participações S.A.		51,426		4,500			—		(2,754	)		37,639		90,811		2,000
Radar Propriedades Agrícolas S.A		57,532		932			77		—			—		58,541		1,279
Radar II Propriedades Agrícolas S.A		31,126		618			17		(184	)		—		31,577		926
Usina Santa Luiza S.A		4,389		(203	)		—		—			1,833		6,019		(1,549	)
Other		46,390		8,331			1,238		(7,736	)		—		48,223		6,096

Total		301,342		17,028			3,776		(12,529	)		39,472		349,089		6,984

Cosan Limited

Notes to the consolidated interim 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.		407,904,353		156,000,696		38.24	%
Cosan Logística S.A.		463,224,241		127,324,097		27.49	%
Companhia de Gás de São Paulo—Comgás		132,023,251		26,243,394		19.88	%
Rumo S.A.		1,559,015,898		1,088,431,798		69.82	%
Logispot Armazéns Agrícolas S.A.		2,040,816		1,000,000		49.00	%


	January 1, 2018		Interest in earnings (losses) of associates			Change of shareholding interest in subsidiary			Other comprehensive income (losses)			Dividends			New standards adopted by the Company— Note 3.2			Business combination		Other		September 30, 2018		Interest in earnings (losses) of associates in September 30, 2017
Cosan S.A.		3,795,050		120,364			(437,661	)		(78,618	)		(57,618	)		(2,674	)		—		11,759		3,350,602		223,468
Cosan Logística S.A.		607,284		10,162			793			1,012			—			(77	)		—		1,166		620,340		(16,833	)
Companhia de Gás de São Paulo—Comgás		850,595		84,014			12,287			235			—			(1,280	)		—		—		945,851		147,376
Rumo S.A.		5,732,763		98,928			—			9,251			(2,742	)		(707	)		—		3,822		5,841,315		(142,517	)
Logispot Armazéns Agrícolas S.A.		34,588		(449	)		—			—			—			—			—		—		34,139		(684	)
Other		376		5,537			—			—			(4,899	)		—			7,199		—		8,213		6,874

Total		11,020,656		318,556			(424,581	)		(68,120	)		(65,259	)		(4,738	)		7,199		16,747		10,800,460		217,684

Cosan Limited

Notes to the consolidated interim financial statements

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

12	Investments in joint ventures

The Company entered into an agreement to form two joint ventures, accounting for 50% of the economic benefits of the companies. They are:


	Raízen Combustíveis S.A.			Raízen Energia S.A.			Total
Ordinary shares issued by the joint venture		1,661,418,472			7,243,283,198
Shares held by Cosan		830,709,236			3,621,641,599
Cosan ownership interest		50	%		50	%

Interest in earnings of joint ventures at September 30, 2017		478,417			227,855			706,272
January 1, 2018		3,185,988			5,261,811			8,447,799

Interest in earnings of joint ventures		380,939			51,263			432,202
Other comprehensive income		87,356			(210,745	)		(123,389	)
Interest on capital		(63,500	)		—			(63,500	)
New standards, interpretations and changes adopted by the Company—Note 3.2		(1,258	)		(82	)		(1,340	)
Dividends		(453,500	)		(486,611	)		(940,111	)

September 30, 2018		3,136,025			4,615,636			7,751,661

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

At September 30, 2018, the Company was in compliance with the covenants of the agreements governing the Joint Ventures.

Cosan Limited

Notes to the consolidated interim financial statements

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

13	Property, plant and equipment


	Land, buildings and improvements			Machinery, equipment and facilities			Railcars and locomotives ⁽ⁱⁱ⁾			Permanent railways⁽ⁱ⁾			Construction in progress			Other			Total
Cost
At January 1, 2018		1,070,095			874,398			6,095,595			5,136,116			986,102			340,576			14,502,882
Additions		102			895			13,731			—			1,596,823			8,030			1,619,581
Disposals		(3,518	)		(13,151	)		(120,610	)		—			(1,538	)		(31,845	)		(170,662	)
Transfers		143,562			149,012			354,259			820,554			(1,483,753	)		30,602			14,236
Business combinations⁽ⁱⁱⁱ⁾		—			—			—			—			—			5,699			5,699

At September 30, 2018		1,210,241			1,011,154			6,342,975			5,956,670			1,097,634			353,062			15,971,736

Depreciation
At January 1, 2018		(297,499	)		(344,146	)		(1,245,651	)		(949,777	)		—			15,766			(2,821,307	)
Additions		(37,471	)		(87,971	)		(479,265	)		(343,208	)		—			(21,364	)		(969,279	)
Disposals		3,518			13,066			120,062			—			—			26,467			163,113
Transfers		(1,195	)		2,302			—			—			—			(22,765	)		(21,658	)

At September 30, 2018		(332,647	)		(416,749	)		(1,604,854	)		(1,292,985	)		—			(1,896	)		(3,649,131	)

At January 1, 2018		772,596			530,252			4,849,944			4,186,339			986,102			356,342			11,681,575

At September 30, 2018		877,594			594,405			4,738,121			4,663,685			1,097,634			351,166			12,322,605

(i)	Leasehold improvements and finance leases included.

(ii)	On September 30, 2018, wagons and locomotives in the amount of R$ 745,203 (R$ 743,203 on December 31, 2017) were placed on bail to guarantee bank loans (Note 15).

(iii)

Property, plant and equipment acquired on the acquisition of the full control of the company TTA as detailed in Note 01.

Cosan Limited

Notes to the consolidated interim financial statements

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

14	Intangible assets and goodwill


	Goodwill			Concession rights			Operating license			Trademarks			Customer relationships			Other			Total
Cost:
At January 1, 2018		851,885			17,433,267			435,624			252,474			989,387			426,948			20,389,585
Additions		—			298,349			—			—			56,731			35,146			390,226
Disposals		—			(59,770	)		—			—			(5,444	)		(29,574	)		(94,788	)
Transfers		—			1,592			—			—			(1,656	)		8,782			8,718
Business combination ⁽ⁱ⁾		(79,466	)		—			—			—			136,499			—			57,033

At September 30, 2018		772,419			17,673,438			435,624			252,474			1,175,517			441,302			20,750,774

Amortization
At January 1, 2018		—			(2,004,657	)		(212,616	)		(205,443	)		(787,426	)		(205,833	)		(3,415,975	)
Additions		—			(360,335	)		(8,805	)		(17,754	)		(83,183	)		(45,482	)		(515,559	)
Disposals		—			46,070			—			—			3,878			29,384			79,332
Transfers		—			(360	)		—			—			(23	)		391			8

At September 30, 2018		—			(2,319,282	)		(221,421	)		(223,197	)		(866,754	)		(221,540	)		(3,852,194	)

At January 1, 2018		851,885			15,428,610			223,008			47,031			201,961			221,115			16,973,610

At September 30, 2018		772,419			15,354,156			214,203			29,277			308,763			219,762			16,898,580

(i)	The goodwill of the acquisitions, according to note 1, are composed of: a) Stambridge R$ 31,726; b) TTA R$ 22,924 ; c) Lubrigrupo II R$ 2.383; and d) allocation of the purchase price of R$ 136,499.

Capitalization of borrowing costs

Capitalized borrowing costs for the period ended September 30, 2018, amounted to R$7,200 (R$ 7,208 for the period ended September 30, 2017). The weighted average interest rate used to capitalize borrowing costs on the balance of concession right, was 8.05% p.a. for the period ended September 30, 2018 (9.02% p.a. for the period ended September 30, 2017).

Cosan Limited

Notes to the consolidated interim financial statements

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


Intangible assets (excluding goodwill)	Annual rate of amortization—%		September 30, 2018		December 31, 2017
Gas distribution concession—Comgás⁽ⁱ⁾		Concession term		8,213,736		8,197,514
Concession rights—Rumo⁽ⁱⁱ⁾		Concession term		7,140,420		7,231,096

				15,354,156		15,428,610
Operating license for port terminal⁽ⁱⁱⁱ⁾		4.00		214,203		223,008
Trademarks
Mobil		10.00		5,073		22,827
Comma		—		24,204		24,204

				29,277		47,031
Relationship with customers:
Comgás		20.00		159,892		174,458
Lubricants		6.00		148,871		27,503

				308,763		201,961
Other
Software license		20.00		166,480		167,520
Other				53,282		53,595

				219,762		221,115
Total				16,126,161		16,121,725

(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, from the business combinations.

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

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

During the period ended September 30, 2018, no impairment indicators were identified that would require the review of the last test conducted at December 31, 2017.

Cosan Limited

Notes to the consolidated interim financial statements

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

15	Loans, borrowings and debentures


	Interest
Description ⁽ⁱ⁾	Index at September 30, 2018		Annual interest			September 30, 2018		December 31, 2017		Maturity
Loan and borrowings
BNDES		URTJLP		8.39	%		1,937,739		2,270,055		Jun-29
		Fixed		5.29	%		1,113,870		1,281,416		Feb-25
		TJ462		9.45	%		358,932		485,807		Oct-20
		Selic		8.32	%		170,713		221,222		Oct-20
		Selic		8.49	%		66,377		66,794		Jun-23
		TJLP		8.60	%		113,919		120,573		Jun-23
		Selic		13.65	%		3,604		4,075		Sep-20
		Fixed		3.75	%		2,161		2,695		Jan-24
		IPCA		12.35	%		3,095		2,840		Nov-21
EIB		U.S.$		3.88	%		125,414		127,190		Jun-20
		U.S.$		2.94	%		58,613		70,611		Sep-20
		U.S.$ + LIBOR		3.03	%		145,490		138,778		May-21
		U.S.$ + LIBOR		2.91	%		136,620		149,386		Sep-21
Foreign loans		GBP + Libor		3.95	%		375,620		312,642		Dec-22
		GBP + Libor		2.22	%		184,089		157,432		Nov-19
NCE		112% of CDI		7.18	%		30,505		59,858		Dec-18
		126% of CDI		8.12	%		504,864		—		Dec-23
		CDI + 3.50%		10.11	%		295,669		294,968		Dec-18
		125% of CDI		8.05	%		645,631		644,766		Dec-23
Perpetual Notes		U.S.$		8.25	%		2,027,183		1,674,847		—
Resolution 4131		U.S.$		4.79	%		51,938		68,305		Oct-20
		U.S.$ + Libor		3.45	%		162,631		50,868		Feb-20
		U.S.$		2.40	%		—		415,762		Mar-18
		U.S.$		3.67	%		301,176		—		May-23
		U.S.$		4.30	%		31,596		—		Nov-19
Senior Notes Due 2018		Fixed		9.50	%		—		168,052		Mar-18
Senior Notes Due 2023		U.S.$		5.00	%		394,938		339,665		Mar-23
Senior Notes Due 2027		U.S.$		7.00	%		2,894,667		2,530,443		Jan-27
Senior Notes Due 2024		U.S.$		7.38	%		3,021,943		2,570,622		Feb-24
Senior Notes Due 2024		U.S.$		5.95	%		2,002,113		1,664,850		Sep-24
Senior Notes Due 2025		U.S.$		5.88	%		1,959,098		—		Jan-25
FINEP		Fixed		5.00	%		93,225		93,058		Nov-22
Trade banks		CDI + 4.91% p.a.		12.14	%		—		98,117		Jun-18
		Fixed U.S.$		5.33	%		16,016		95,040		Jun-19
Working capital		CDI + 2.80% p.a.		9.88	%		—		391,693		Dec-18
		CDI + 2.95% p.a.		10.04	%		—		286,463		Dec-18
		CDI + 0.31% p.m.		10.93	%		—		1,117		Jan-18
		CDI + 0.33% p.m.		11.20	%		—		3,345		Mar-18
		120% of CDI		7.73	%		30,267		21,221		Aug-20
		120.85% of CDI		7.77	%		—		10,440		Sep-18
		120.75% of CDI		7.77	%		—		20,879		Sep-18
		125% of CDI		8.05	%		5,015		—		Dec-18
		122% of CDI		7.85	%		15,117		—		Feb-19
Bank overdrafts		125.5% of CDI		8.08	%		—		94		Feb-19
Prepayment		U.S.$+Libor		3.70	%		12,220		10,039		Apr-19

							19,292,068		16,926,028

Cosan Limited

Notes to the consolidated interim financial statements

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


	Interest
Description ⁽ⁱ⁾	Index at September 30, 2018		Annual interest		September 30, 2018		December 31, 2017		Maturity
Debentures
Non-convertible debentures		CDI + 2.05% p.a.		8.57%		—		152,573		—
		CDI + 3.50% p.a.		10.11%		—		1,359,125		—
		IGPM + 6,10%		16.38%		229,680		—		May-28
		IPCA + 5.10%		9.40%		—		363,894		—
		IPCA + 5.57%		10.11%		199,195		197,923		Sep-20
		IPCA + 7.14%		11.75%		320,132		293,312		Dec-20
		IPCA + 7.48%		12.10%		288,493		263,701		Dec-22
		IPCA + 7.36%		11.98%		95,017		86,927		Dec-25
		IPCA + 5.87%		10.42%		751,968		726,827		Dec-23
		IPCA + 4.33%		8.82%		424,546		396,328		Oct-24
		108 % of CDI		6.92%		—		171,515		—
		Fixed		13.13%		—		163,750		—
		128 % of CDI		8.25%		511,388		499,576		Dec-25
		CDI + 0.90%		7.35%		42,689		87,467		Sep-19

						2,863,108		4,762,918
Total						22,155,176		21,688,946

Current						2,046,866		3,903,392

Non-current						20,108,310		17,785,554

(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.

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


	September 30, 2018		December 31, 2017
Reais (R$)		8,253,811		11,312,466
Dollar (U.S.$) ⁽ⁱ⁾		13,341,656		9,906,406
Pound (GBP)		559,709		470,074

		22,155,176		21,688,946

(i)	At September 30, 2018, all dated debts denominated in U.S. Dollars, in the subsidiaries, have currency risk protection through derivatives (Note 28).

Below are the movements that occurred for the period ended September 30, 2018.


At January 1, 2018	21,688,946

Raised	2,750,267
Amortization of principal	(4,685,398	)
Payment of interest	(1,186,695	)
Interest, exchange rate and fair value	3,588,056

At September 30, 2018	22,155,176

Cosan Limited

Notes to the consolidated interim financial statements

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

Resolution 4,131

On March 9, 2018, CLE, a wholly-owned subsidiary of the Company, obtained a loan from Bank of America Merril Lynch in the amount of U.S.$ 20,000 thousands with maturity on February 20, 2020 and interest at libor + 1.00% p.a.

On May 29, 2018, Comgás, a wholly-owned subsidiary of the Company, obtained a loan from Scotiabank in the amount US$ 75,000 thousands with maturity on May 30, 2023 and pre-fixed interest at 3.67% p.a.

On August 08, 2018, Biomassa, a wholly-owned subsidiary of the Company, obtained a loan from Santander in the amount US$ 7,760 thousands with maturity on August,10, 2020 and pre-fixed interest at 4.30% p.a.

Working Capital

On August 13, 2018, Cosan Biomassa, the Company’s subsidiary, extended, for August 5, 2020, the maturity date of its loan agreement with Banco Santander in the amount of R$ 30,000. The interest rate is floating and linked to the CDI rate.

On September 13, 2018, Cosan Biomassa, the Company’s subsidiary, extended, for December 12, 2018, the maturity date of its loan agreement with Banco ABC in the amount of R$ 5,000. The interest rate is floating and linked to the CDI rate.

On February 23, 2018, Cosan Biomassa, a wholly-owned subsidiary of the Company, obtained a loan in the amount of R$ 15,000 from Banco ABC with maturity on February 18, 2019 and a fixed interest rate of 122.00% of CDI.

On May, 9, 2018, Cosan Biomassa, a wholly-owned subsidiary of the Company, loan contract added with Banco Santander in the amount R$ 20,000 that delay the maturity to July, 17, 2018. The interest rate is floating and fixed of CDI.

Senior Notes 2025

On February 9, 2018, through its subsidiary, Rumo Luxembourg, the Company issued debt securities in the international market, Senior Notes due 2025 (“Notes 2025”) in the total amount of U.S.$ 500,000 thousands, with maturity in January 2025 and interest of 5.87% p.a., paid semi-annually. This debt is protected by exchange and interest rate swaps.

On May 7, 2018, the operations required for the placement of Senior Notes 2025 issued in January 2018 by the Rumo Lux subsidiary were approved and ratified, and (i) the issuance of the NCE through the transfer of foreign funds by the subsidiary Rumo Malha Norte, in Itaú Unibanco SA (“Itaú”), in the amount of up to US$ 500,000 thousand, with a maturity of 07 years, observing the usual early maturity events in capital market operations, as described in the NCE, and remuneration interest equivalent to a certain percentage , which should not exceed the maximum percentage of 5.875% per year, which consists of transfer of funds from a linked note in accordance with Resolution 2,921 of the National Monetary Council of January 17, 2002 obtained by Itaú with Rumo Lux—the amount of the principal of NCE will be fully amortized on the respective maturity date and the interest will be paid semiannually, from the date of payment of the NCE , as well as (ii) the contracting of hedges related to this operation, including a non-deliverable forward transaction.

NCE Bradesco 2023

On January 26, 2018, through its subsidiary, Rumo Malha Norte SA, the Company raised funds from Banco Bradesco, through an Export Credit Note, in the total amount of R$ 500,000, due in December 2023 with interest of 126% of CDI, paid semi-annually.

Debentures

On May, 15, 2018, the subsidiary Comgás, issued 7th debentures. Resources were captured in a single series, in the amount R$ 215.000, corrected annually IGP-M, interest rate 6.10% p.a and maturity in May, 15, 2028.

On September 17, 2018, the subsidiary Comgás paid interest and principal on the 3th Issue of Debentures. The Debentures of the 2th series of the 3th issue (GASP23) are no longer traded due to their maturity.

Cosan Limited

Notes to the consolidated interim financial statements

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

Available credit line

BNDES

As of September 30, 2018, the subsidiary Rumo had available credit lines from BNDES, which were not used, in the total amount of R$ 21,325 (R$ 94,220 on December 31, 2017).

As of September 30, 2018, the subsidiary Cosan S.A. had available credit lines, which were not used, in the total amount of R$ 200,458. (R$ 288,000 on December 31, 2017).

Standy by facilities

As of September 30, 2018 and December 31,2017, the subsidiary Cosan S.A had available credit lines from three different Brazilian financial institutions, which were not used, in the total amount of R$ 501,000.

Financial Covenants

The Company is subject to certain restrictive clauses in most of the loan and financing agreements, based on certain financial and non-financial indicators. The Company evaluates the financial covenants as of December 31, 2018.

At September 30, 2018, the Company was in compliance with all debt financial covenants.

Cosan Limited

Notes to the consolidated interim financial statements

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

16	Leases

Finance lease liabilities

Finance lease liabilities are payable as follows:


	September 30, 2018												December 31, 2017
	Less than one year			Between one and five years			More than five years			Total			Total
Future value of minimum payments lease payments		183,975			453,363			191,705			829,043			1,250,860
Rolling stock		157,087			375,934			121,601			654,622			1,060,759
Terminal		23,984			76,155			70,104			170,243			184,484
Other		2,904			1,274			—			4,178			5,617
Interests		(62,274	)		(144,984	)		(36,146	)		(243,404	)		(306,722	)
Rolling stock		(49,595	)		(112,396	)		(23,416	)		(185,407	)		(241,509	)
Terminal		(12,370	)		(32,507	)		(12,730	)		(57,607	)		(64,528	)
Other		(309	)		(81	)		—			(390	)		(685	)

Present value of minimum lease payments		121,701			308,379			155,559			585,639			944,138

Current											121,701			261,344

Non-current											463,938			682,794

Below are the movements that occurred for the period ended September 30, 2018.


At January 1, 2018	944,138

Interest, exchange rate and fair value	124,301
Amortization of principal	(352,506	)
Payment of interest	(130,294	)

At September 30, 2018	585,639

Cosan Limited

Notes to the consolidated interim financial statements

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

Operating leases

At September 30, 2018, the future minimum lease payments under non-cancellable leases are as follows:


	September 30, 2018								December 31, 2017
	Total future minimum payments								December 31, 2017
	Less than one year		Between one and five years		More than five years		Total		Total
Locomotives		565		668		—		1,233		1,695
Rail cars		7,542		25,636		2,165		35,343		38,449
Other		2,810		8,438		3,803		15,051		16,058

Total		10,917		34,742		5,968		51,627		56,202

The leases are recognized as expenses on a straight-line basis over the life of the respective agreement.

17	Concessions payable

September 30, 2018

December 31,
2017

Leases

Concessions

Total

Payables

Rumo Malha Sul

33,831

30,260

64,091

65,550

Rumo Malha Paulista

—

20,193

48,139

33,831

50,453

84,284

113,689

Court Discussion

Rumo Malha Paulista

1,682,559

—

1,682,559

1,535,470

Rumo Malha Oeste

1,295,540

80,174

1,375,714

1,284,175

2,978,099

80,174

3,058,273

2,819,645

Total

3,011,930

130,627

3,142,557

2,933,334

Current

29,385

27,413

Non-current

3,113,172

2,905,921

Judicial deposits at September 30, 2018 concerning the above claims totaled:


	September 30, 2018		December 31, 2017
Rumo Paulista		119,806		119,806
Rumo Oeste		20,690		20,690

		140,496		140,496

The judicial deposits are recorded in the “Civil, regulatory and environmental” group, as described in note 21.

Cosan Limited

Notes to the consolidated interim financial statements

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

18	Trade payables


	September 30, 2018			December 31, 2017
Natural gas suppliers		1,893,094			1,563,930
Materials and service suppliers		1,101,183			1,162,496
Fuels and lubricants suppliers		13,438			1,814
Judicial deposits⁽ⁱ⁾		(294,976	)		(294,976	)
Other		6,322			731

		2,719,061			2,433,995

(i)

There are ongoing proceeding between Comgás and its gas supplier. The gas supplier is charging different prices comparing to the gas supply market. At September 30, 2018, the balance of the judicial discussion is R$ 1,165,745 (R$ 1,154,603 on December 31, 2017). The amount is secured by judicial deposit R$ 294,976 (R$ 294,976 on December 31, 2017) and the guaranteed value through surety is of R$ 876,490 (R$ 859,627 on December 31, 2017).

19	Other taxes payable


	September 30, 2018		December 31, 2017
Tax amnesty and refinancing program—Refis		218,376		229,745
ICMS – State VAT		155,787		121,550
COFINS—Revenue tax		73,412		146,641
PIS—Revenue tax		9,565		31,563
INSS—Social security		5,577		7,697
ISS—Services tax		4,666		4,494
IOF—Financial tax		1,345		2,224
Other		7,508		36,601

		476,236		580,515
Current		320,757		418,878

Non-Current		155,479		161,637

Cosan Limited

Notes to the consolidated interim financial statements

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

20	Income tax and social contribution

Reconciliation of income and social contribution tax expenses:


	July 1, 2018 to September 30, 2018			January 1, 2018 to September 30, 2018			July 1, 2017 to September 30, 2017			January 1, 2017 to September 30, 2017
Profit before taxes		391,586			696,940			696,719			670,830
Income tax and social contribution at nominal rate (34%)		(133,139	)		(236,960	)		(236,884	)		(228,082	)
Adjustments to reconcile nominal and effective tax rate
Interest in earnings of investees (non-taxable income)		29,063			152,738			141,384			242,507
Differences in tax rates on earnings / losses of overseas companies		2,288			1,689			(19,911	)		(64,819	)
Granted income tax incentive		11,287			—			31,347			46,312
Share-based payment transactions		(1,017	)		(2,940	)		(1,001	)		(2,936	)
Interest on shareholders’ equity		(8,160	)		(21,590	)		(2,873	)		(17,153	)
Non-deductible expenses (donations, gifts, etc.)		3,230			(1,416	)		(28,938	)		(37,339	)
Tax losses not recorded ⁽ⁱ⁾		(21,758	)		(89,141	)		(35,520	)		(163,283	)
Goodwill amortization effect		463			1,390			—			—
Tax effects of discounts granted—PERT		—			110			—			—
Other		14,076			9,719			3,503			(3,909	)

Income tax and social contribution (expense)—current and deferred		(103,667	)		(186,401	)		(148,893	)		(228,702	)

Effective rate—%		26.47			26.75			21.37			34.09

(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.

Cosan Limited

Notes to the consolidated interim financial statements

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

Deferred income tax assets and liabilities:


	September 30, 2018			December 31, 2017
Assets credit of:
Income tax loss carry forwards		2,225,071			2,112,707
Social contribution tax loss carry forwards		814,182			772,304
Temporary differences
Foreign exchange—Loans and borrowings		874,398			548,568
Legal proceedings provision		406,481			365,997
Tax deductible goodwill		—			56,276
Impairment provision		226,400			250,236
Provisions for employee benefits		157,259			153,434
Allowance for doubtful accounts		32,096			25,991
Regulatory asset (liability)		61,027			65,318
Impairment of tax credit		64,271			61,324
Share-based payment transactions		2,875			1,602
Profit sharing		32,342			40,195
Interest on preferred shareholders payable in subsidiaries		168,511			218,599
Property, plant, equipment and intangible—useful life review		248,327			160,490
Contract disputes		88,552			86,482
Provisions		211,173			339,627
Other		56,128			(23,451	)

Total		5,669,093			5,235,699
(-) Deferred taxes assets not recognized		(2,047,576	)		(1,961,325	)
Liabilities credit of:
Temporary differences
Business combination—Property, plant and equipment		76,996			110,149
Tax deductible goodwill		(370,698	)		(351,262	)
Lease		(199,528	)		(277,091	)
Concession contract		(7,229	)		(8,681	)
Unrealized (loss) gains on derivatives instruments ⁽ⁱ⁾		(638,863	)		(115,503	)
Fair value option in loans		5,178			23,855
Income on formation of joint ventures		(1,135,036	)		(1,135,036	)
Business combination—Intangible asset		(3,736,344	)		(3,741,525	)
Other		4,341			(45,510	)

Total		(6,001,183	)		(5,540,604	)


Total of deferred taxes recorded		(2,379,666	)		(2,266,230	)


Deferred income tax—Assets		1,545,518			1,636,080

Deferred income tax—Liabilities		(3,925,184	)		(3,902,310	)

(i)

The subsidiary Comgás changed the regime for the taxation of foreign exchange variation of the loans and financing from cash basis to accrual accounting for fiscal year 2018, therefore the deferred taxes on gains of income not realized with derivatives, started to be presented as deferred tax liability. Previously they were offset by the losses of the exchange variation of loans and financing.

Cosan Limited

Notes to the consolidated interim financial statements

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

Changes in deferred income taxes, net:


At January 1, 2018	(2,266,230	)

Recorded through income	(93,291	)
Tax loss carryforwards used to settle other tax installments	2,103
Tax effects of discounts granted —PERT	(4,217	)
Business combinations	(24,164	)
Adoption of IFRS 9	3,584
Other⁽ⁱ⁾	2,549

At September 30, 2018	(2,379,666	)

(i)	Exchange variation effect due to the conversion of offshore investments.

21	Provision for legal proceedings


	Provision for legal proceedings				Judicial deposits
	September 30, 2018		December 31, 2017		September 30, 2018		December 31, 2017
Tax		524,494		501,247		440,912		371,703
Civil, regulatory and environmental		391,913		375,561		195,842		196,025
Labor		473,409		471,349		212,382		198,379

		1,389,816		1,348,157		849,136		766,107

Changes in provision for legal proceedings:


	Tax			Civil, regulatory and environmental			Labor			Total
January 1, 2018		501,247			375,561			471,349			1,348,157
Accruals		9,131			38,074			73,035			120,240
Disposal / Reversals		(20,238	)		(48,268	)		(95,549	)		(164,055	)
Transfers		7,178			(7,178	)		—			—
Indexation and interest charges ⁽ⁱ⁾		27,176			33,724			24,574			85,474

September 30, 2018		524,494			391,913			473,409			1,389,816

(i)	Includes interest reversal.

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

Cosan Limited

Notes to the consolidated interim financial statements

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

Tax claims

Judicial claims deemed to be probable losses, fully accrued


	September 30, 2018		December 31, 2017
Compensation with FINSOCIAL		285,315		280,158
State VAT—ICMS credits		94,932		99,423
INSS—Social security		66,937		65,149
PIS and COFINS		143		2,051
Federal income taxes		1,711		1,521
IPI—Excise tax credit—NT ⁽ⁱ⁾		28,722		678
Other		46,734		52,267

		524,494		501,247

(i)	In September 2018, provisions for lawsuits related to IPI Seletividade were registered in the amount of R $ 24,769, due to a decision of the Federal Supreme Court (“STF”) unfavorable to the taxpayer with general repercussions..

Judicial claims deemed as possible losses, and therefore not accrued


	September 30, 2018		December 31, 2017
ICMS—State VAT		2,668,459		2,652,709
Federal income taxes		2,704,189		2,766,174
IRRF—Withholding tax		939,663		914,545
PIS and COFINS—Revenue taxes		875,063		838,343
INSS—Social security and other		611,802		556,252
Goodwill Rumo		525,575		512,120
IPI—Excise tax credit—NT		472,996		523,121
Penalties related to tax positions		444,319		429,249
MP 470—Tax installments		296,111		290,389
Foreign financial operation		287,882		280,414
Compensation with IPI—IN 67/98		134,076		132,270
Stock option		67,463		65,776
Financial transactions tax on loan		52,286		51,330
Social security contributions		4,087		45,985
Compensation credit award		42,698		41,350
Other		878,815		902,698

		11,005,484		11,002,725

Cosan Limited

Notes to the consolidated interim 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 an unfavorable outcome is considered possible, are as follows:


	September 30, 2018		December 31, 2017
Civil		3,211,426		2,865,572
Labor		994,941		1,061,910
Regulatory		674,837		606,133
Environmental		429,400		378,462

		5,310,604		4,912,077

On July 25, 2018, the Company was aware of the filing of an administrative inquiry with CADE for the determination of representation filed by Agrovia. The Company refutes the arguments presented by it and emphasizes that most of the facts have already been analyzed and rejected by the body itself in another administrative proceeding. The Company assesses as possible the risk that an administrative proceeding will be created and will incur loss in this process. Due to the initial stage of the topic, it is not possible to estimate the value at risk.

Cosan Limited

Notes to the consolidated interim financial statements

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

22	Shareholders’ equity

Share capital

At September 30, 2018, Cosan Limited’s share capital is composed of the following:


Shareholders—Common shares	Class A and / or BDRs		%		Class B1 shares		%
Controlling Group ⁽ⁱ⁾		19,514,418		11.19		96,332,044		100.00
Renaissance Technologies LLC		6,288,299		3.61		—		—
M&G Investment Management Limited		7,335,954		4.21		—		—
Eastspring Investments (Singapore) Limited		3,842,457		2.20		—		—
Free Float		111,362,540		63.87		—		—

Total shares outstanding		148,343,668		85.08		96,332,044		100.00

Treasury shares		26,011,673		14.92		—		—
Total		174,355,341		100.00		96,332,044		100.00

(i)	The controlling group is composed by the following companies: (i) Queluz Holdings Limited, (ii) Usina Costa Pinto S.A. (iii) MSOR Participações S.A. and (iv) Usina Bom Jesus S.A. Açúcar e Álcool.

Treasury shares

The Company holds 26,011,673 Class A treasury shares as of September 30, 2018 (27,488,204 December 31, 2017) with a market value of U.S.$ 6.73 per share as of September 30, 2018 (U.S.$ 9.70 per share as of December 31, 2017).

In the period ended September 30, 2018, the amount of 1,476,531 treasury shares were delivered to the beneficiaries of the Stock-Grant Plan – Equity-settled – Cosan Limited.

Cosan Limited

Notes to the consolidated interim financial statements

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

Other comprehensive (loss) income


	December 31, 2017			Comprehensive (loss) income			September 30, 2018
Foreign currency translation effects		(372,343	)		(275,943	)		(648,286	)
Gain (loss) on cash flow hedge in joint ventures and subsidiaries		14,610			(112,937	)		(98,327	)
Actuarial loss on defined benefit plan		(44,937	)		(1,042	)		(45,979	)
Gain on share subscription of a subsidiary		15,000			—			15,000
Changes in fair value of available for sale securities		841			95			936

Total		(386,829	)		(389,827	)		(776,656	)

Attributable to:
Owners of the Company		(394,212	)		(321,707	)		(715,919	)
Non-controlling interests		7,383			(68,120	)		(60,737	)
	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	)
Gain on share subscription of 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

Cosan Limited

Notes to the consolidated interim financial statements

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

23	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, 2018 to September 30, 2018			January 1, 2018 to September 30, 2018			July 1, 2017 to September 30, 2017			January 1, 2017 to September 30, 2017
Profit (loss) attributable from continued operation to ordinary equity holders for basic earnings		62,997			191,983			248,110			224,444
Effect of dilution:
Dilutive effect of subsidiary’s stock option plan		(295	)		(675	)		(1,748	)		(2,239	)
Dilutive effect of put option		—			—			(15,601	)		(15,601	)
Share repurchase plan		—			—			—			—

Profit (loss) from continued operation attributable to ordinary equity holders adjusted for the effect of dilution		62,702			191,308			230,761			206,604

Basic number of shares outstanding—In thousands of shares		244,676			243,859			264,869			264,750
Effect of dilution:
Dilutive effect of stock option plan		9,451			10,267			13,342			13,470

Diluted number of shares outstanding—In thousands of shares		254,127			254,126			278,211			278,220

Basic earnings (losses) per share from:
Continuing operations		R$ 0.2575			R$ 0.7873			R$ 0.9367			R$ 0.8478
Diluted earnings (losses) per share from:
Continuing operations		R$ 0.2467			R$ 0.7528			R$ 0.8294			R$ 0.7426

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 Rumo. The exchange ratio shall take into account the economic value for both Brado and Rumo shares. At the Company’s exclusive discretion, an equivalent cash payment is also possible.

For the nine month period ended at September 30, 2018, 3,264 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 nine month period ended at September 30, 2018, 656,000 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.

Cosan Limited

Notes to the consolidated interim financial statements

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

24	Net sales


	July 1, 2018 to September 30, 2018			January 1, 2018 to September 30, 2018			July 1, 2017 to September 30, 2017			January 1, 2017 to September 30, 2017
Gross revenue from sales of products and services		5,576,195			14,536,331			4,341,120			11,534,192
Construction revenue		106,781			292,451			95,996			239,110
Indirect taxes and deductions ⁽ⁱ⁾		(904,559	)		(2,432,446	)		(726,093	)		(1,908,040	)

Net sales		4,778,417			12,396,336			3,711,023			9,865,262

(i)	On April 1, 2017, the effective tax rate ICMS – State tax on gas sales was changed from 12% to 15%.

25	Costs and expenses by nature

The expenses are presented in the statement of profit and loss by function. The reconciliation of income by nature/purpose are as follows:


	July 1, 2018 to September 30, 2018			January 1, 2018 to September 30, 2018			July 1, 2017 to September 30, 2017			January 1, 2017 to September 30, 2017
Raw materials and consumables used		(1,883,558	)		(4,680,160	)		(1,127,811	)		(2,966,049	)
Employee benefit expense		(367,883	)		(1,023,917	)		(303,124	)		(884,698	)
Transportation expenses		(687,376	)		(1,787,779	)		(566,749	)		(1,560,214	)
Expenses with third-party services		(146,338	)		(427,414	)		(146,741	)		(408,157	)
Depreciation and amortization		(488,972	)		(1,460,062	)		(435,441	)		(1,299,375	)
Construction cost—IFRIC 12		(106,781	)		(292,451	)		(95,996	)		(239,110	)
Selling expenses		(7,017	)		(18,267	)		(28,888	)		(76,603	)
Leases and concessions expenses		(54,088	)		(160,852	)		(50,102	)		(149,303	)
Leases expenses		(3,273	)		(10,653	)		(752	)		(2,047	)
Other		(158,654	)		(410,668	)		(121,248	)		(402,211	)

		(3,903,940	)		(10,272,223	)		(2,876,852	)		(7,987,767	)
Cost of sales		(3,406,199	)		(8,832,176	)		(2,405,635	)		(6,567,249	)
Selling		(255,186	)		(747,787	)		(255,269	)		(794,287	)
General and administrative		(242,555	)		(692,260	)		(215,948	)		(626,231	)

		(3,903,940	)		(10,272,223	)		(2,876,852	)		(7,987,767	)

26	Other income (expenses), net


	July 1, 2018 to September 30, 2018			January 1, 2018 to September 30, 2018			July 1, 2017 to September 30, 2017			January 1, 2017 to September 30, 2017
Income from sale of scrap / eventual income		11,002			36,327			9,097			29,267
Insurance reimbursement income		—			5,345			12,745			13,926
Rental income		—			—			959			1,620
Loss on disposal of non-current assets and intangibles		(2,276	)		(3,170	)		(12,034	)		(23,735	)
Net effect of legal proceeding, recoverable and tax amnesty and refinancing program		(30,953	)		(88,408	)		(28,464	)		(89,369	)
Other		(22,479	)		(38,320	)		(12,813	)		(25,978	)

		(44,706	)		(88,226	)		(30,510	)		(94,269	)

Cosan Limited

Notes to the consolidated interim financial statements

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

27	Finance results


	July 1, 2018 to September 30, 2018			January 1, 2018 to September 30, 2018			July 1, 2017 to September 30, 2017			January 1, 2017 to September 30, 2017
Cost of gross debt
Interest on debt		(394,151	)		(1,240,954	)		(472,477	)		(1,402,021	)
Monetary and exchange rate variation		(400,301	)		(1,806,720	)		303,348			100,434
Derivatives and fair value measurement		387,076			1,609,017			(222,542	)		(180,104	)
Amortization of borrowing costs		(12,105	)		(47,950	)		(5,068	)		(13,133	)
Guarantees and warranties on debt		(23,296	)		(91,749	)		(8,293	)		(24,653	)

		(442,777	)		(1,578,356	)		(405,032	)		(1,519,477	)
Income from financial investment and exchange rate in cash and cash equivalents		108,373			336,658			123,760			435,339

	108,373			336,658			123,760			435,339

Cost of debt, net		(334,404	)		(1,241,698	)		(281,272	)		(1,084,138	)
Other charges and monetary variations
Interest on other receivables		22,150			85,751			31,491			112,955
Monetary variation on leases and concessions agreements		(48,016	)		(140,583	)		(60,267	)		(195,259	)
Monetary variation on leases		(16,694	)		(89,189	)		(32,086	)		(98,626	)
Bank charges and others		(26,042	)		(73,198	)		(54,098	)		(182,437	)
Advances on real state credits		(2,740	)		(9,228	)		(4,441	)		(17,069	)
Interest on contingencies and contracts		(55,281	)		(104,925	)		(18,458	)		(54,376	)
Interest on other liabilities		(55,525	)		(151,054	)		(104,130	)		(308,365	)
Interest on shareholders’ equity		(1,210	)		(933	)		—			—
Exchange variation		(5,902	)		(63,120	)		483			1,663

		(189,260	)		(546,479	)		(241,506	)		(741,514	)

(=) Finance results, net		(523,664	)		(1,788,177	)		(522,778	)		(1,825,652	)
Finance expense		(925,992	)		(1,938,293	)		(841,177	)		(2,606,547	)
Finance income		179,977			527,068			177,290			695,061
Exchange variation		(408,650	)		(1,876,386	)		293,593			99,860
Derivatives		631,001			1,499,434			(152,484	)		(14,026	)

Finance results, net		(523,664	)		(1,788,177	)		(522,778	)		(1,825,652	)

Cosan Limited

Notes to the consolidated interim financial statements

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

28	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 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, 2018		December 31, 2017
Assets
Fair value through profit or loss
Investment funds		2,069,872		1,852,114
Marketable securities		3,648,629		3,853,343
Derivate financial instruments		2,283,417		1,162,213

		8,001,918		6,867,670
Amortized cost
Cash and cash equivalents		1,953,325		2,703,063
Trade receivables		1,674,677		1,322,420
Restricted cash		113,908		225,634
Receivables from related parties		132,672		199,814
Other financial assets		—		1,340,000
Dividends receivable		7,526		13,466

		3,882,108		5,804,397
Total		11,884,026		12,672,067

Cosan Limited

Notes to the consolidated interim financial statements

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


	September 30, 2018		December 31, 2017
Liabilities
Amortized cost
Loans, borrowings and debentures		9,918,663		13,858,709
Leases		585,639		944,138
Real state credit certificates		14,066		86,745
Trade payables		2,719,061		2,433,995
Other financial liabilities		410,874		382,702
Payables to related parties		389,024		328,263
Dividends payable		29,075		191,478
Tax installments—REFIS		218,376		229,745
Trade payables—Corporate operation / Agreements		258,590		210,476
Preferred shareholders payable in subsidiaries		1,082,021		1,442,679

		15,625,389		20,108,930
Fair value through profit or loss
Loans, borrowings and debentures		12,236,513		7,830,237
Contingent consideration		55,360		116,542
Derivative financial instruments		23,694		115,085

		12,315,567		8,061,864
		27,940,956		28,170,794

During the period ended at September 30, 2018, there was no reclassification between the categories fair value through profit or loss and amortized cost.

Risk management structure

Notional

Fair value

September 30, 2018

December 31, 2017

September 30, 2018

December 31, 2017

Exchange rate derivatives

Forward agreements

17,013

494,302

3,180

(457

)

Interest rate and exchange rate risk

Swap agreements (interest rate)

2,122,081

2,446,369

143,851

330,712

Swap agreements (exchange and interest rate)

10,994,139

7,217,792

2,112,692

716,873

13,116,220

9,664,161

2,256,543

1,047,585

Total financial instruments

2,259,723

1,047,128

Assets

2,283,417

1,162,213

Liabilities

(23,694

)

(115,085

)

Cosan Limited

Notes to the consolidated interim financial statements

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

Credit risk


	September 30, 2018		December 31, 2017
Cash and cash equivalents		4,023,197		4,555,177
Trade receivables		1,674,677		1,322,420
Derivative financial instruments		2,283,417		1,162,213
Marketable securities		3,648,629		3,853,343
Receivables from related parties		132,672		199,814
Dividends		7,526		13,466
Restricted cash		113,908		225,634

		11,884,026		11,332,067

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


	September 30, 2018		December 31, 2017
AAA		9,237,952		3,499,345
AA		824,226		6,159,553
A+		6,963		—
B		—		2,007
BB+		—		4,180

		10,069,141		9,665,085

Liquidity risk

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


	September 30, 2018															December 31, 2017
	Up to 1 year			1—2 years			3—5 years			More than 5 years			Total			Total
Loans, borrowings and debentures		(3,246,967	)		(3,119,269	)		(8,873,641	)		(16,794,148	)		(32,034,025	)		(31,554,560	)
Trade payables		(2,719,061	)		—			—			—			(2,719,061	)		(2,433,995	)
Other financial liabilities		(410,874	)		—			—			—			(410,874	)		(382,702	)
Tax installments—REFIS		(67,433	)		(26,262	)		(39,749	)		(105,846	)		(239,290	)		(244,957	)
Leases		(189,391	)		(160,292	)		(318,773	)		(218,246	)		(886,702	)		(1,443,470	)
Derivative financial instruments		33,867			(219,206	)		(1,069,490	)		5,048,805			3,793,976			(110,909	)
Real estate credits certificates		(39,356	)		—			—			—			(39,356	)		(92,844	)
Payables to related parties		(389,024	)		—			—			—			(389,024	)		(328,263	)
Dividends payable		(29,075	)		—			—			—			(29,075	)		(191,478	)

		(7,057,314	)		(3,525,029	)		(10,301,653	)		(12,069,435	)		(32,953,431	)		(36,783,178	)

Cosan Limited

Notes to the consolidated interim financial statements

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

Market risk

Foreign exchange risk

As at September 30, 2018 and December 31, 2017, the Company had the following net exposure to the exchange rate variations on assets and liabilities denominated in Dollar:


	September 30, 2018			December 31, 2017
Cash and cash equivalents		1,305,326			782,103
Trade receivables		37,417			25,797
Trade payables		(1,660	)		(13,230	)
Loans, borrowings and debentures		(13,341,656	)		(8,919,712	)
Advances from clients		—			(6,310	)
Contingent consideration		(55,360	)		(64,213	)
Payables to related parties		(260,524	)		(210,497	)
Derivative financial instruments ⁽ⁱ⁾		10,945,003			7,323,116

Foreign exchange exposure, net		(1,371,454	)		(1,082,946	)

(i)	These balances are equivalent to the notional amount in U.S. Dollars converted to R$ at the Dollar rate of September 30, 2018 and December 31, 2017 respectively.

Sensitivity analysis on changes in foreign exchange rates:

The probable scenario was defined based on the US dollar market rates projected for September 30, 2019, which determines the fair value of the derivatives at that date. Stressed scenarios (positive and negative effects, before taxes) were defined based on adverse impacts of 25% and 50% on the US dollar exchange rates used in the probable scenario.

Based on the financial instruments denominated in U.S. Dollars at September 30, 2018, the Company performed a sensitivity analysis with a 25% and 50% increase in the exchange rate (US $ / US $). The probable scenario considers the Company’s projections made by specialized advisory services for 12-month exchange rates for companies with real functional currency (positive and negative, before taxes), as follows:

Exchange rate sensitivity analysis (R$/US$)

September 30, 2018

Scenario

Probable

25%

50%

-25%

-50%

U.S.$

4.0039

3.4300

4.2875

5.1450

2.5725

1.7150

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

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		U.S.$ fluctuation		(71,222	)		106,416			212,834			(106,416	)		(212,834	)
Trade receivables		U.S.$ fluctuation		(5,363	)		8,013			16,028			(8,013	)		(16,028	)
Payables to related parties		U.S.$ fluctuation		37,342			(55,795	)		(111,591	)		55,795			111,591
Trade payables		US$ fluctuation		173			(372	)		(743	)		372			743
Exchange rate derivatives		U.S.$ fluctuation		(1,742,167	)		2,671,267			5,342,533			(2,671,267	)		(5,342,533	)
Loans, borrowings and debentures		U.S.$ fluctuation		1,717,531			(2,428,546	)		(4,857,093	)		2,428,546			4,857,093
Advances from clients		U.S.$ fluctuation		—			—			—			—			—
Contingent consideration		U.S.$ fluctuation		7,935			(11,855	)		(23,712	)		11,855			23,712

Impacts on profit or loss				(55,771	)		289,128			578,256			(289,128	)		(578,256	)

Cosan Limited

Notes to the consolidated interim financial statements

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

b)	Interest rate risk

Sensitivity analysis on changes in interest rates:

The sensitivity analysis below shows the likely impact on interest expenses on loans and financing and on the remuneration of financial investments, as well as the impact of interest rate changes, reflecting a 25% and 50% increase or decrease in interest in relation to the probable scenario, on loans and financing and financial investments indexed to post fixed rates.:


	September 30, 2018
Exposure interest rate	Probable			25%			50%			-25%			-50%
Cash and cash equivalents		206,237			51,559			103,119			(51,559	)		(103,119	)
Marketable securities		228,218			57,054			114,109			(57,054	)		(114,109	)
Restricted cash		347,027			86,757			173,514			(86,757	)		(173,514	)
Leases		(22,378	)		(5,594	)		(5,594	)		5,594			5,594
Advances on real state credits		(932	)		(233	)		(466	)		233			466
Interest rate derivatives		728,858			(721,308	)		(1,323,893	)		1,788,188			3,934,058
Loans, borrowings and debentures		(886,238	)		(107,074	)		(214,148	)		107,074			214,148

Impacts on profit or loss		600,792			(638,839	)		(1,153,359	)		1,705,719			3,763,524

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		6.53%		8.16%		9.80%		4.90%		3.27%
TJ462		7.90%		9.63%		11.35%		6.18%		4.45%
TJLP		6.90%		8.63%		10.35%		5.18%		3.45%
IPCA		4.64%		5.80%		6.96%		3.48%		2.32%
IGPM		3.24%		4.05%		4.86%		2.43%		1.62%
FED FUNDS		2.75%		3.44%		4.13%		2.06%		1.38%

Financial instruments fair value

The market value of the Senior Notes and Perpetual Notes are listed on the Luxembourg Stock Exchange (Note 15) is based on their quoted market price are as follows:


Loan	Company	September 30, 2018			December 31, 2017
Senior Notes Due 2018	Cosan S.A		—			100.37	%
Senior Notes Due 2023	Cosan S.A		95.90	%		101.54	%
Senior Notes Due 2024	Rumo S.A		102.06	%		107.86	%
Senior Notes Due 2025	Rumo S.A		93.17	%		—
Senior Notes Due 2027	Cosan S.A		98.31	%		108.14	%
Senior Notes Due 2024	Cosan Limited		94.98	%		102,79	%
Perpetual Notes	Cosan S.A		100.00	%		102.83	%

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 15).

Cosan Limited

Notes to the consolidated interim 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, 2018						December 31, 2017
	September 30, 2018			December 31, 2017			Level 2			Level 3			Level 2			Level 3
Assets
Investment funds		2,069,872			1,852,114			2,069,872			—			1,852,114			—
Marketable securities		3,648,629			3,853,343			3,648,629			—			3,853,343			—
Derivate financial instruments		2,283,417			1,162,213			2,283,417			—			1,162,213			—

Total		8,001,918			6,867,670			8,001,918			—			6,867,670			—

Liabilities
Loans, borrowings and debentures		(12,236,513	)		(7,830,237	)		(12,236,513	)		—			(7,830,237	)		—
Contingent consideration ⁽ⁱ⁾		(55,360	)		(116,542	)		—			(55,360	)		—			(116,542	)
Derivative financial instruments		(23,694	)		(115,085	)		(23,694	)		—			(115,085	)		—

Total		(12,315,567	)		(8,061,864	)		(12,260,207	)		(55,360	)		(7,945,322	)		(116,542	)

(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


	Movimentação
January 1, 2018		(116,542	)
Payments in the period		62,896
Indexation and interest charges		(1,714	)

September 30, 2018		(55,360	)

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, 2018		(4,218,221	)		358,706			(3,859,515	)
Initial measurement		(3,478,165	)		—			(3,478,165	)
Principal amortization		364,491			(37,956	)		326,535
Interest amortization		367,307			36,382			403,689
Fair value		(1,381,101	)		771,921			(609,180	)

At September 30, 2018		(8,345,689	)		1,129,053			(7,216,636	)

In order to protect the Company from possible fluctuations in exchange rates, was designated on June 1, 2018, hedge accounting (fair value hedge) for the amount of USD 400,000 thousand of the loan agreement “Senior Notes due 2024”. The Company used derivative operations, cash flow swaps, to swap the exchange rates and interest rate per percentage of CDI. The company will designate the full notional of the loan agreement for hedge accounting as soon as it closes the swap deal to complete the USD 500,000 thousand notional.

Cosan Limited

Notes to the consolidated interim financial statements

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

29 Post-employment benefits


	September 30, 2018		December 31, 2017
Futura		47,920		44,431
Futura II		156		1,237
Comgás		452,077		439,791

		500,153		485,459

Pension plan

During the period ended September 30, 2018, the amount of sponsor contributions to the plans was R$ 23,645 (R$ 20,796 for the period ended September 30, 2017).

Cosan Limited

Notes to the consolidated interim financial statements

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

30	Share-based payment

As at September 30, 2018 the Company has two share-based payment plans: (i) Stock Option Plan which provides an option to executives to buy the shares of the Company and (ii) Stock Based Compensation Plan which provides to executives a grant of shares of the Company.

The plans have been administered by the Board of Directors of each Company, at its option, by a Committee, within the limits established in the guidelines for the elaboration and structuring of each plan and in the applicable legislation.

Program Features


									Number of instruments on September 30, 2018
Programs	Expected life (years)		Interest rate—%			Expected volatility—%			Granted		Vested or cancelled option			Outstanding		Market price on grant date		Exercise price at September 30, 2018		Fair value at grant date		Expenses recorded in P&L
Stock option programs
08/18/2011—Cosan S.A		1 to 7		12.39	%		31.44	%		4,825,000		(4,825,000	)		—		22.80		25.69		6.80		—
08/18/2011—Cosan S.A		1 to 12		12.39	%		30.32	%		5,000,000		(2,500,000	)		2,500,000		22.80		25.69		8.15		944
12/12/2012—Cosan S.A		1 to 7		8.78	%		31.44	%		700,000		(420,000	)		280,000		38.89		47.60		10.10		—
04/24/2013—Cosan S.A		5 to 7		13.35	%		27.33	%		970,000		(120,000	)		850,000		45.22		54.48		17.95		423
04/25/2014—Cosan S.A		5 to 7		12.43	%		29.85	%		960,000		(80,000	)		880,000		39.02		43.92		15.67		816
08/31/2015—Cosan S.A		5 to 7		14.18	%		33.09	%		759,000		(100,000	)		659,000		19.96		18.34		7.67		926

										13,214,000		(8,045,000	)		5,169,000								3,109
Stock-Grant Programs
09/21/2017—Cosan Limited (i)		5		—			—			255,000		—			255,000		8.10—US$		—		8.10—US$		1,378
08/18/2017—Cosan Limited		10		—			—			2,053,632		(2,053,632	)		—		7.32—US$		—		7.32—US$		27,668
04/27/2017—Cosan S.A		5		15.00	%		32.75	%		274,000		(64,900	)		209,100		37.00		—		32.11		1,406
07/31/2017—Cosan S.A		5		15.00	%		33.70	%		298,107		(70,598	)		227,509		32.22		—		36.06		922
07/31/2018—Cosan S.A		5		15.00	%		33.70	%		210,602		—			210,602		38.61		—		36.06		260
04/20/2017—Comgás		5		12.16	%		27.20	%		61,300		—			61,300		47.80		—		37.29		398
08/12/2017—Comgás		5		10.09	%		30.00	%		97,780		—			97,780		54.25		—		36.37		605
08/01/2018—Comgás		5		10.56	%		32.38	%		96,787		—			96,787		54.25		—		36.37		140
10/01/2015—Rumo S.A		5		11.33	%		42.75	%		1,485,900		(177,700	)		1,308,200		6.10		—		6.10		1,488
01/02/2017—Rumo S.A		5		11.33	%		42.75	%		1,476,000		(129,500	)		1,346,500		6.10		—		6.10		1,617
09/01/2017—Rumo S.A		5		9.93	%		29.76	%		870,900		(30,900	)		840,000		10.42		—		10.42		1,809
08/01/2018—Rumo S.A		5		10.93	%		31.91	%		1,149,544		—			1,149,544		13.94		—		13.94		622

										8,329,552		(2,527,230	)		5,802,322								38,313

(i) —Cash settled

Cosan Limited

Notes to the consolidated interim financial statements

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

ii.

Reconciliation of outstanding stocks


	Stock option programs					Stock- Grant Programs
	Quantity			Weighted-average exercise price - R$		Quantity
At January 1, 2018		6,146,000			32.28		4,515,837
Granted ⁽ⁱ⁾		—			—		2,933,464
Vested ⁽ⁱ⁾		(942,000	)		23.32		(943,912	)
Cancelled		(35,000	)		—		(654,860	)

At September 30, 2018		5,169,000			30.69		5,850,529

(i)	In the period ended September 30, 2018, 1,476,531 shares were granted and vested by the beneficiaries of the Stock-Grant Plan – Equity-settled – Cosan Limited.

31	Subsequent events

31.1

Acquisition of Shell Argentina Conclusion

On October 1, Raízen Combustíveis concluded the acquisition of 100% of the shares issued by Shell Argentina for US $ 916.00 thousand, of which: (i) US $ 100,000 thousand through a deposit made on April 24, 2018, (ii) US $ 370,000 paid on October 1, 2018 and (iii) US $ 446,000 will be paid through December 2019. (Note 1)

31.2

Approval of contractual amendment – Comgás and Petrobras

On October 17, the subsidiary Comgás and Petróleo Brasileiro SA—Petrobras approved contractual additions related to the supply of natural gas, subject to certain items being altered, without prejudice to compliance with the other agreed suspensive conditions between the parts. These instruments provide for the addition of existing supply contracts until December 2021.

31.3

Incorporation of Cosan Logistíca S.A. (“Cosan Logística”)

On October 24, Management informed the market that it would evaluate the feasibility of merging the subsidiary Cosan Logística into Cosan S.A (“Intended Transaction”), which would become the direct controlling shareholder of Rumo SA. However, after several questions from shareholders and investors regarding the extent and effectiveness of the proposed simplification, Management, on November 1, 2018, decided to cancel the intended transaction.

31.4

Capital increase in subsidiary CLE

On October 29, 2018, the Company carried out a capital increase in its subsidiary CLE in the amount of R$ 500,000, through the issuance of 500,000 new common shares.

31.5

Dividend payment - Comgás

On November 6, 2018, subsidiary Comgás decided and approved the payment of interim dividends in the amount of R $ 456,632, distributed based on the Company’s results for the year 2018.

***

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 9, 2018


COSAN LIMITED

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