CZZ Cosan Limiited

 

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 August, 2015

 

Commission File Number: 1-33659

 

COSAN LIMITED

(Translation of registrant’s name into English)

 

Av. Juscelino Kubitschek, 1327 – 4^th floor

São Paulo, SP 04543-000 Brazil

(Address of principal executive offices)

 

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

 

Form 20-F

X

Form 40-F

 

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

 

Yes

No

X

 

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

 

Yes

No

X

 

COSAN LIMITED

 

Item
1.	Earnings Release 2015
2.	Cosan Limited Consolidated interim financial statements at June 30, 2015 and independent auditors’ review report

Item 1

 

 

 

EARNINGS RELEASE 2Q15

 

São Paulo, August 12, 2015 – COSAN LIMITED (NYSE: CZZ e BM&FBovespa: CZLT33) announces today its results for the second quarter of 2015 (2Q15) composed by April, May and June 2015. The results are consolidated in accordance with the accounting principles adopted in Brazil and internationally (IFRS).

 

 

Financial Highlights

Summary of Financial Information	2Q15	2Q14	Chg.%	1Q15	Chg.%
Amount in BRL MM	(Apr-Jun)	(Apr-Jun)	2Q15 x 2Q14	(Jan-Mar)	2Q15 x 1Q15
Net Revenue	3,333.2	2,246.0	48.4%	2,141.1	55.7%
Gross Profit	1,165.6	700.9	66.3%	549.8	n/a
Gross Margin (%)	35.%	31.2%	3.8 p.p.	25.7%	9.3 p.p.
Operating Profit	749.0	240.0	n/a	51.3	n/a
EBITDA	1,157.7	575.0	n/a	369.7	n/a
EBITDA Margin (%)	34.7%	25.6%	9.1 p.p.	17.3%	17.5 p.p.
Equity Pick-up	91.9	164.3	-44.1%	153.1	-40.%
Net Income before non-controlling Interest	149.0	183.3	-18.7%	25.7	n/a
Net Income	6.5	38.7	-83.2%	9.5	-31.6%
Net Margin (%)	0.2%	1.7%	-1.5 p.p.	0.4%	-0.2 p.p.

 

 

 

Investor Relations E-mail: ri@cosan.com.br Telephone: +55 11 3897-9797 Website: ri.cosan.com.br

 

 

Business Units

 

We list below the business units of Cosan S/A and Cosan Logística S/A, companies that comprise Cosan Limited’s portfolio.

 

The business units (reportable segments) are organized as follows:

 

o	Cosan S.A.	Raízen Energia
		Raízen Combustíveis
		Comgás
		Lubrificantes
		Radar
		Outros Negócios
o	Cosan Logística S.A.	Rumo Logística

 

 

Cosan Limited Consolidated Result

 

The Company's subsidiaries Cosan S/A Indústria e Comércio (BM&FBovespa CSAN3) and Cosan Logístisca S/A (BM&FBovespa RLOG3) reported their results on August 13 2015. The full Earnings Releases with main financial and operational information, in addition to the quarterly financial statements, can be found on their websites:

 

o

Cosan - Investor Relations

 

o

Cosan Logística - Investor Relations

 

We present below the 2Q15 results by business segment as previously detailed. All information reflect 100% of their financial performance, regardless of Cosan Limited’s stake. For reconciliation purposes of the consolidated EBITDA, the Adjustments and Eliminations column refers to the elimination of net profits of the business controlled by Cosan for consolidation purposes.

 

 

Results by Business Unit (BRL mm) 2Q15	Raízen Combustíveis	Raízen Energia	Comgás	Lubricants	Radar	Other Businesses	Adjusts and Eliminations	Deconsolidated effects IFRS 11	Cosan S A	Cosan Limited (parent company)	Cosan Logística	Adjusts and Eliminations	Cosan Limited
Net Revenue	14,793.9	1,646.9	1,671.0	424.1	26.9	0.0	-	(16,440.8)	2,122.0	-	1,220.3	(9.1)	3,333.2
Cost of Goods and Services	(14,134.5)	(1,477.8)	(1,090.9)	(314.3)	(5.5)	(0.0)	-	15,612.3	(1,410.7)	-	(766.0)	9.1	(2,167.6)
Gross Profit	659.4	169.1	580.1	109.8	21.4	0.0	-	(828.5)	711.3	-	454.3	-	1,165.6
Gross Margin(%)	4.5%	10.3%	34.7%	25.9%	79.5%	96.3%	n/a	5.0%	33.5%	n/a	37.2%	- %	35.0%
Selling Expenses	(281.1)	(88.1)	(150.7)	(70.4)	-	-	-	369.2	(221.0)	-	(0.0)	-	(221.0)
General and Administrative Expenses	(97.2)	(121.2)	(73.9)	(17.4)	(7.0)	(44.4)	-	218.4	(142.6)	(6.1)	(84.8)	-	(233.5)
Other Operating Revenues (Expenses)	82.6	(24.3)	(1.8)	0.2	6.5	(6.8)	-	(58.3)	(1.9)	-	39.8	-	37.9
Equity Pick-up	3.1	(11.4)	-	(2.1)	(0.0)	221.8	(127.9)	8.4	91.7	37.8	0.2	(37.8)	91.9
Depreciation and Amortization	147.7	336.4	119.7	18.9	0.2	1.1	-	(484.1)	139.9	-	176.9	-	316.8
EBITDA	514.5	260.5	473.5	39.1	21.1	171.7	(127.9)	(775.0)	577.4	31.7	586.4	(37.8)	1,157.7
EBITDA Margin (%)	3.5%	15.8%	28.3%	9.2%	78.4%	n/a	n/a	4.7%	27.2%	n/a	48.1%	- %	34.7%
Financial income	(47.1)	(195.1)	(92.8)	(13.0)	(0.4)	(183.7)	4.2	242.2	(285.7)	(8.6)	(355.0)	-	(649.2)
Financial expense	41.5	152.4	41.9	1.0	2.3	32.9	(4.2)	(193.9)	74.0	0.0	47.9	-	122.0
Foreign exchange gain (losses), net	28.1	145.2	46.1	3.0	-	58.5	-	(173.4)	107.5	(9.4)	(0.1)	-	98.1
Derivatives	(56.8)	(91.6)	(53.5)	(3.7)	-	(99.5)	-	148.3	(156.7)	(7.1)	(15.9)	-	(179.7)
Income taxes expenses	(117.1)	38.7	(100.1)	(3.3)	(3.5)	70.5	-	78.4	(36.4)	-	(46.6)	-	(83.0)
Non-controlling interests	(7.0)	-	-	-	-	-	(90.9)	7.0	(90.9)	-	(25.4)	(22.6)	(138.9)
Profit (loss) for the period	208.3	(26.3)	195.4	4.1	19.4	49.4	(218.8)	(182.1)	49.4	6.5	10.9	(60.4)	6.5

 

 

Disclaimer

This document contains forward-looking statements and estimates. These forward-looking statements and estimates are solely forecasts and do not represent any guarantee of prospective results. All stakeholders should know that these statements and estimates are and will be, depending on the case, subject to risks, uncertainties and factors related to the operations and business environment of Cosan and its subsidiaries, and therefore the actual results of these companies may significantly differ from the estimated or implied prospective results contained in such forward-looking statements and estimates.

 

 

Financial Statements

 

Cosan Limited (CZZ)

 

Cosan Limited	2Q15	2Q14	Chg.%
Income Statement for the period in (BRL mm)	(Apr - Jun)	(Apr - Jun)	2Q15 x 2Q14
Net Operating Revenue	3,333,241	2,246,009	48.4%
Gross Profit	1,165,604	700,934	66.3%
Sales, general and administrative expenses	(454,541)	(394,693)	15.2%
Other operating income (expenses), net	37,920	(66,197)	n/a
Financial revenue	121,956	74,420	63.9%
Financial expenses	(649,236)	(321,994)	n/a
Foreign exchange variation	98,078	20,822	n/a
Derivative	(179,704)	(12,106)	n/a
Equity pick up	91,930	164,331	-44.1%
Income and Social Contribution Taxes	(83,001)	17,817	n/a
Equity attributable to non-controlling interests	(138,897)	(144,586)	-3.9%
Net Income from discontinued operations	3,582	-	n/a
Net Income (loss)	6,528	38,747	-83.2%
Cosan Limited	2Q15	1Q15
Balance Sheet (BRL mm)	(Apr - Jun)	(Jan - Mar)
Cash and Cash Equivalents	2,531,947	2,122,385
Securities	725,916	159,200
Accounts Receivable	985,703	808,616
Inventories	439,184	324,701
Other Current Assets	833,905	443,305
Investments	8,695,359	8,642,451
Investment Property	2,643,211	2,649,976
Property, Plant and Equipment	9,186,721	1,510,363
Intangible	17,211,442	10,266,512
Other Non-Current Assets	4,733,673	2,576,778
Total Assets	49,554,217	31,299,536
Loans and Financing	(16,546,239)	(9,860,253)
Suppliers	(2,015,638)	(1,373,919)
Salaries Payable	(212,046)	(77,096)
Other current liabilities	(1,317,429)	(354,595)
Other non-current liabilities	(12,578,266)	(5,657,644)
Net Equity	(16,236,873)	(13,383,991)
Total Liabilities	(49,554,217)	(31,299,536)

 

 

Cosan Industria e Comércio S/A (CSAN3)

 

Cosan Energia	2Q15	2Q14	Chg.%
Income Statement for the period	(Apr - Jun)	(Apr - Jun)	2Q15 x 2Q14
Net Operating Revenue	2,122,027	2,055,528	3.2%
Gross Profit	711,317	639,022	11.3%
Sales, general and administrative expenses	(363,632)	(357,366)	1.8%
Other operating income (expenses), net	(1,911)	(58,015)	-96.7%
Financial revenue	74,036	63,413	16.8%
Financial expenses	(285,655)	(283,147)	0.9%
Foreign exchange variation	107,547	23,811	n/a
Derivative	(156,689)	(7,459)	n/a
Equity pick up	91,749	164,331	-44.2%
Income and Social Contribution Taxes	(36,427)	20,251	n/a
Equity attributable to non-controlling interests	(90,886)	(105,474)	-13.8%
Net Income from discontinued operations	-	4,779	-100.0%
Net Income (loss)	49,447	104,147	-52.5%
Cosan Energia	2Q15	1Q15
Balance Sheet	(Apr - Jun)	(Jan - Mar)
Cash and Cash Equivalents	2,020,616	1,861,592
Securities	191,487	159,200
Accounts Receivable	828,679	785,840
Inventories	332,394	317,790
Other Current Assets	400,891	450,107
Investments	8,654,294	8,642,451
Investment Property	2,643,211	2,649,976
Property, Plant and Equipment	372,858	370,970
Intangible	9,410,069	9,417,620
Other Non-Current Assets	2,018,580	2,032,330
Total Assets	28,399,821	28,407,779
Loans and Financing	(8,221,860)	(8,384,823)
Suppliers	(1,313,803)	(1,192,167)
Salaries Payable	(77,604)	(62,518)
Other current liabilities	(355,452)	(307,734)
Other non-current liabilities	(5,446,345)	(5,430,995)
Net Equity	(12,362,650)	(12,437,504)
Total Liabilities	(28,399,821)	(28,407,779)

 

 

Cosan Logística S/A (RLOG3)

 

Cosan Logística	2Q15	2Q14
Income Statement for the period	(Apr - Jun)	(Apr - Jun)
Net Operating Revenue	1,220,285	190,481
Gross Profit	454,287	61,912
Sales, general and administrative expenses	(84,782)	(22,763)
Other operating income (expenses), net	39,831	(8,182)
Financial revenue	47,898	9,992
Financial expenses	(354,971)	(34,063)
Foreign exchange variation	(58)	169
Derivative	(15,872)	-
Equity pick up	181	0
Income and Social Contribution Taxes	(46,573)	(2,435)
Equity attributable to non-controlling interests	(25,438)	(1,046)
Net Income from discontinued operations	3,582	-
Net Income (loss)	10,920	3,584
Cosan Logística	2Q15	1Q15
Balance Sheet	(Apr - Jun)	(Jan - Mar)
Cash and Cash Equivalents	508,474	251,102
Securities	534,429	-
Accounts Receivable	157,024	22,776
Inventories	106,790	6,911
Other Current Assets	461,756	22,364
Investments	41,066	0
Property, Plant and Equipment	8,813,863	1,139,393
Intangible	7,801,373	848,892
Other Non-Current Assets	2,715,086	544,442
Total Assets	21,153,730	2,876,370
Loans and Financing	(7,965,805)	(1,119,754)
Loans and financing -CP	(1,094,348)	(132,521)
Loans and financing -LP	(6,871,457)	(987,234)
Suppliers	(701,835)	(181,753)
Salaries Payable	(134,442)	(14,578)
Other current liabilities	(971,551)	(71,000)
Other non-current liabilities	(7,131,921)	(226,649)
Net Equity	(4,222,558)	(1,262,637)
Total Liabilities	(21,153,730)	(2,876,370)

 

 

 

Item 2

 

 

Cosan Limited

 

Consolidated interim financial statements at

June 30, 2015 and independent

auditors’ review report

 

 

 

 

 

 

 

 

 

 

Cosan Limited

 

Consolidated interim financial statements

 

For the three and six month periods ended June 30, 2015 and 2014

 

 

Contents

 

Independent auditors’ report on review of interim financial statements	3
Consolidated statements of financial position	5
Consolidated statements of profit or loss and other comprehensive income (loss)	7
Statements of changes in shareholders’ equity	9
Consolidated statements of cash flows	11
Notes to the consolidated interim financial statements	13

Independent auditors’ report on review of interim financial statements

 

To the Board of Directors and Shareholders

Cosan Limited

 

 

Introduction

We have reviewed the accompanying consolidated interim financial information of Cosan Limited (“The Company”), contained in the Quarterly Information Form - ITR for the quarter ended June 30, 2015, which comprises the statement of financial position as of June 30, 2015 and the respective statements of profit or loss and comprehensive income (loss) for the three and six month periods then ended, and changes in shareholders’ equity and cash flows for the six month period then ended, including the footnotes.

 

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

 

Review scope

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

 

Conclusion on the consolidated interim financial information

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

 

Other Matter

 

Corresponding values

The consolidated financial information for the year ended December 31, 2014 and the consolidated interim financial information for the three and six month periods ended June 30, 2014, presented for comparative purposes, were audited and reviewed, respectively, by other independent auditors, who issued an unqualified audit report on March 18, 2015 and an unqualified review report on August 13, 2014, respectively

 

São Paulo, August 7, 2015

 

/s/ KPMG Auditores Independentes

 

KPMG Auditores Independentes

 

CRC 2SP014428/O-6

 

 

/s/ Carlos Augusto Pires

 

Carlos Augusto Pires

Contador CRC 1SP184830/O-7

 

 

Cosan Limited

 

Consolidated statements of financial position

(In thousands of Brazilian Reais - R$)

  

		Note				June 30, 2015				December 31, 2014
Assets
Cash and cash equivalents			5				2,531,947				1,649,340
Investment securities							725,916				149,735
Trade receivables			6				985,703				865,109
Derivative financial instruments			26				152,733				30,069
Inventories							439,184				353,720
Receivables from related parties			8				55,984				38,357
Income tax receivable							64,327				94,100
Other current tax receivable							397,152				78,818
Other trade receivables			7				74,985				69,683
Dividends receivable							47,352				36,130
Assets held for sale			11				42,728				25,089
Other current assets							151,379				174,957
Total current assets							5,669,390				3,565,107
Trade receivables			6				120,856				480,992
Restricted cash							148,326				—
Deferred tax assets			19				1,602,619				214,164
Receivables from related parties			8				197,520				212,527
Income tax receivable							175,028				8,778
Other non-current tax receivable							488,835				17,299
Judicial deposits			20				757,031				418,385
Other trade receivables			7				345,236				370,497
Derivative financial instruments			26				1,414,421				860,509
Other non-current assets							898,224				648,669
Investment in associates			9				177,638				130,677
Investment in joint ventures			10				8,517,721				8,404,503
Investment property			11				2,643,211				2,641,978
Property, plant and equipment			12				9,186,721				1,435,890
Intangible assets and goodwill			13				17,211,442				10,286,373
Total non-current assets							43,884,829				26,131,241
Total assets							49,554,219				29,696,348
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				June 30, 2015				December 31, 2014
Liabilities
Loans, borrowings and debentures			14				2,353,182				1,056,353
Leases			15				443,433				—
Advances on real estate credits							143,283				—
Derivative financial instruments			26				120,129				13,803
Trade payables			17				2,015,638				1,112,459
Employee benefits payable							212,046				120,416
Income tax payable							27,446				30,905
Other taxes payable			18				170,336				307,741
Leases and concessions			16				19,300				—
Dividends payable							18,363				33,354
Payables to related parties			8				111,226				137,441
Other current liabilities							384,042				158,471
Total current liabilities							6,018,424				2,970,943
Loans, borrowings and debentures			14				14,193,057				7,446,287
Leases			15				1,350,327				—
Advances on real estate credits							177,127				—
Derivative financial instruments			26				527,595				319,632
Trade payables			17				1,110				—
Other taxes payable			18				531,955				334,565
Provision for legal proceedings			20				1,248,432				657,779
Leases and concessions			16				2,030,247				—
Pension and post-employment benefits			28				312,047				301,850
Deferred tax liabilities			19				4,149,807				1,739,274
Preferred shareholders payable in subsidiaries			21				2,050,181				1,926,888
Deferred revenue							108,173				—
Other non-current liabilities							618,860				509,823
Total non-current liabilities							27,298,918				13,236,098
Total liabilities							33,317,342				16,207,041
Shareholders' equity			22
Share capital							5,328				5,328
Additional paid in capital							4,004,253				3,887,109
Other comprehensive loss							(190,860	)			(165,618	)
Retained earnings							2,039,561				2,117,739
Equity attributable to owners of the parent							5,858,282				5,844,558
Non-controlling interests			9				10,378,595				7,644,749
Total shareholders' equity							16,236,877				13,489,307
Total shareholders' equity and liabilities							49,554,219				29,696,348

 

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 (loss)

For the three and six month periods ended June 30, 2015 and 2014

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

 

						April 1, 2015 to				January 1, 2015				April 1, 2014 to				January 1, 2014
		Note				June 30, 2015				to June 30, 2015				June 30, 2014				to June 30, 2014
Net sales							3,333,241				5,474,365				2,246,009				4,403,195
Cost of sales							(2,167,637	)			(3,758,978	)			(1,545,075	)			(3,065,869	)
Gross profit							1,165,604				1,715,387				700,934				1,337,326
Selling expenses							(221,034	)			(440,361	)			(224,284	)			(430,904	)
General and administrative expenses							(233,506	)			(413,318	)			(170,408	)			(317,985	)
Other expense, net			25				37,919				(61,404	)			(66,197	)			(98,989	)
Operating expense							(416,621	)			(915,083	)			(460,889	)			(847,878	)
Income before financial results, equity
in earnings of investees and income taxes							748,983				800,304				240,045				489,448
Equity in earnings of investees
Equity in earnings of associates			9				1,656				(2,978	)			1,858				667
Equity in earnings of joint ventures			10				90,274				248,045				162,473				385,465
							91,930				245,067				164,331				386,132
Financial results			24
Finance expense							(649,236	)			(940,848	)			(321,994	)			(507,459	)
Finance income							121,956				191,747				74,420				122,771
Foreign exchange (losses) gains, net							98,078				(493,756	)			20,822				96,559
Derivatives							(179,704	)			375,528				(12,106	)			(73,187	)
							(608,906	)			(867,329	)			(238,858	)			(361,316	)
Profit before taxes							232,007				178,042				165,518				514,264
Income tax (expense) benefit			19
Current							(115,853	)			(120,691	)			(35,688	)			(66,227	)
Deferred							32,853				117,382				53,504				24,482
							(83,000	)			(3,309	)			17,816				(41,745	)
Profit from continuing operations							149,007				174,733				183,334				472,519
Loss from discontinued operations, net of tax			30				(3,582	)			(3,582	)			—				—
Profit for the period							145,425				171,151				183,334				472,519
Other comprehensive income (loss)			22
Items that will not be reclassified to profit or loss:
Actuarial loss on defined benefit plan							—				—				(1,058	)			(1,417	)
Taxes on items that will not
be reclassified to profit or loss							—				—				360				482
							—				—				(698	)			(935	)
Items that may be reclassified to profit or loss:
Foreign currency translation effect							13,649				(67,037	)			6,687				3,164
Gain (loss) on cash flow hedge in
joint ventures and subsidiary							35,793				56,528				33,027				(41,380	)
Changes in fair value of
available for sale securities							3,512				4,998				1,635				2,547
Taxes on items that may be
reclassified to profit or loss							(1,568	)			(2,073	)			(11,785	)			13,203
							51,386				(7,584	)			29,564				(22,466	)
Total other comprehensive
loss, net of tax							51,386				(7,584	)			28,866				(23,401	)
Total comprehensive income							196,811				163,567				212,200				449,118

 

 

Cosan Limited

 

Consolidated statements of profit or loss and other comprehensive income (loss)

For the three and six month periods ended June 30, 2015 and 2014

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

 

 

Net income attributable to:
Owners of the Parent (including
discontinued operations)							6,528				16,067				38,748				179,553
Non-controlling interests							138,897				155,084				144,586				292,966
Total comprehensive
income (loss) attributable to:
Owners of the Parent							41,285				(9,174	)			59,392				170,217
Non-controlling interests							155,526				172,741				152,808				278,901
Basic earnings per share			23
Continuing operations						R$	0.03			R$	0.06			R$	0.15			R$	0.68
Discontinued operations						R$	(0.00)			R$	0.00			R$	0.00			R$	0.00
						R$	0.03			R$	0.06			R$	0.15			R$	0.68
Diluted earnings per share			23
Continuing operations						R$	(0.03)			R$	0.00			R$	0.06			R$	0.51
Discontinued operations						R$	(0.00)			R$	(0.00)			R$	0.00			R$	0.00
						R$	(0.03)			R$	0.00			R$	0.06			R$	0.51

 

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

 

Cosan Limited

 

Statements of changes in shareholders’ equity

For the six months period ended June 30, 2015 and 2014

(In thousands of Brazilian Reais - R$)

 

						Capital reserve												Equity
						Additional				Other								attributable				Non-
		Share				paid in				comprehensive				Retained				to owners				controlling				Total
		capital				capital				(loss) income				earnings				of the parent				interests				equity
At January 1, 2015			5,328				3,887,109				(165,618	)			2,117,739				5,844,558				7,644,749				13,489,307
Profit for the period			—				—				—				16,068				16,068				155,084				171,152
Other comprehensive income
Foreign currency translation effects			—				—				(60,767	)			—				(60,767	)			(6,270	)			(67,037	)
Gain on cash flow hedge in
joint ventures and subsidiary			—				—				35,102				—				35,102				21,052				56,154
Changes in fair value of
available for sale Securities			—				—				423				—				423				2,876				3,299
Total comprehensive income for the period			—				—				(25,242	)			16,068				(9,174	)			172,742				163,568
Contributions by and distributions to
owners of the Parent
Dividends - non-controlling interests			—				(1,965	)			—				—				(1,965	)			(1,179	)			(3,144	)
Share based compensation - Subsidiaries			—				3,664				—				—				3,664				2,195				5,859
Dividends			—				—				—				(94,246	)			(94,246	)			(237,586	)			(331,832	)
Total contributions by and
distributions to owners of the Parent			—				1,699				—				(94,246	)			(92,547	)			(236,570	)			(329,117	)
Transactions with owners of the Parent
Acquisition of non-controlling interest			—				409				—				—				409				(12,594	)			(12,185	)
Business combination ALL			—				118,937				—				—				118,937				2,831,469				2,950,406
Share buy-back costs - Rumo			—				(3,901	)			—				—				(3,901	)			(21,201	)			(25,102	)
Total transactions with owners of the Parent			—				115,445				—				—				115,445				2,797,674				2,913,119
At June 30, 2015			5,328				4,004,253				(190,860	)			2,039,561				5,858,282				10,378,595				16,236,877

 

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

 

Cosan Limited

 

Statements of changes in shareholders’ equity

For the six months period ended June 30, 2015 and 2014

(In thousands of Brazilian Reais - R$) 

 

						Capital reserve												Equity
						Additional				Other								attributable				Non-
		Share				paid in				comprehensive				Retained				to owners				controlling				Total
		capital				capital				(loss) income				earnings				of the parent				interests				equity
At January 1, 2014			5,328				3,828,858				(84,887	)			2,136,975				5,886,274				7,433,490				13,319,764
Profit for the period			—				—				—				179,553				179,553				292,966				472,519
Other comprehensive income
Foreign currency translation effects			—				—				7,697				—				7,697				(4,533	)			3,164
Loss on cash flow hedge in
joint ventures and subsidiary			—				—				(17,015	)			—				(17,015	)			(10,296	)			(27,311	)
Actuarial loss on defined benefit plan			—				—				(372	)			—				(372	)			(563	)			(935	)
Changes in fair value of
available for sale Securities			—				—				354				—				354				1,327				1,681
Total comprehensive income for the period			—				—				(9,336	)			179,553				170,217				278,901				449,118
Contributions by and distributions to
owners of the Parent
Share options exercised - Subsidiaries			—				3,055				—				—				3,055				1,849				4,904
Dividends - non-controlling interests			—				458				—				—				458				—				458
Share based compensation - Subsidiaries			—				3,194				—				—				3,194				1,932				5,126
Dividends			—				—				—				(92,071	)			(92,071	)			(115,433	)			(207,504	)
Total contributions by and distributions to
owners of the Parent			—				6,707				—				(92,071	)			(85,364	)			(111,652	)			(197,016	)
Transactions with owners of the Parent
Acquisition of non-controlling interest			—				(820	)			—				—				(820	)			3,018				2,198
Acquisition cost of the preferred			—				—				—				—				—				—				—
shares of subsidiaries			—				(22,513	)			—				—				(22,513	)			(13,622	)			(36,135	)
Total transactions with owners of the Parent			—				(23,333	)			—				—				(23,333	)			(10,604	)			(33,937	)
At June 30, 2014			5,328				3,812,232				(94,223	)			2,224,457				5,947,794				7,590,135				13,537,929

 

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

 

Cosan Limited

 

Consolidated statements of cash flows

For the six month period ended June 30, 2015 and 2014

(In thousands of Brazilian Reais - R$) 

 

						January 1, 2015				January 1, 2014
		Note				to June 30, 2015				to June 30, 2014
Cash flows from operating activities
Profit before taxes							178,043				514,264
Adjustments for:
Depreciation and amortization			12 / 13				482,062				331,312
Equity in earnings of associates			9				2,978				(667	)
Equity in earnings of joint ventures			10				(248,045	)			(385,465	)
Loss on disposal of assets							3,096				4,806
Share-based compensation expense			8				5,859				5,126
Change in fair value of investment property			11 / 25				(23,162	)			(44,983	)
Provisions for legal proceedings							23,537				26,230
Indexation charges, interest and
exchange gains/losses, net							988,093				388,300
Other							69,876				45,509
							1,482,337				884,432
Changes in:
Trade receivables							(61,150	)			(129,754	)
Inventories							4,005				7,546
Recoverable taxes							45,880				36,455
Related parties							(60,268	)			(50,595	)
Advances to suppliers							(25,474	)			—
Trade payables							335,339				58,271
Employee benefits							(51,425	)			(42,658	)
Provisions for legal proceedings							(7,360	)			(7,998	)
Judicial deposits							(16,802	)			(1,120	)
Actuarial on defined benefit plan							(11,201	)			(3,949	)
Income and other taxes							(113,194	)			(132,006	)
Other assets and liabilities, net							(119,281	)			(113,721	)
							(80,931	)			(379,529	)
Net cash generated by operating activities							1,401,406				504,903
Cash flows from investing activities
Capital contribution in associates							(48,721	)			(12,667	)
Securities							183,192				—
Restricted cash							74,742				—
Net cash acquired in business combination			3				169,703				—
Dividends received from associates							1,151				1,938
Dividends received from joint ventures							206,425				197,000
Acquisition of property, plant and
equipment and intangible assets							(797,960	)			(458,810	)
Proceeds from sale of property, plant
and equipment, intangibles and investments							1,316				796
Net cash used in investing activities							(210,152	)			(271,743	)

 

 

Cosan Limited

 

Consolidated statements of cash flows

For the six month period ended June 30, 2015 and 2014

(In thousands of Brazilian Reais - R$) 

 

 

						January 1, 2015				January 1, 2014
		Note				to June 30, 2015				to June 30, 2014
Cash flows from financing activities
Loans, borrowings and debentures raised							2,382,655				826,607
Payment of loans, borrowings and debentures
Principal							(1,865,705	)			(2,439,439	)
Interest							(488,549	)			(491,106	)
Payment of leases
Principal							(83,372	)			—
Interest							(63,005	)			—
Advances on real estate credits							(33,061	)			—
Derivative financial instruments							203,950				(36,275	)
Share capital paid in preferred shares							—				2,000,000
Dividends paid							(356,430	)			(272,058	)
Treasury shares							(12,185	)			—
Related parties							(3,806	)			—
Proceeds from exercise of share options							—				4,904
Net cash used in financing activities							(319,508	)			(407,367	)
Increase (decrease) in cash and cash equivalents							871,746				(174,207	)
Cash and cash equivalents at beginning of period							1,649,340				1,509,565
Effects of exchange rate changes on cash held							10,861				5,077
Cash and cash equivalents at ended of period							2,531,947				1,340,435
Supplemental cash flow information
Income taxes paid							52,725				82,289
Business combination - non-cash effect							2,537,831				—

 

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

1

Operations

 

Cosan Limited (“Cosan”) was incorporated in Bermuda on April 30, 2007. Cosan’s class A common shares are traded on the New York Stock Exchange (NYSE) (ticker - CZZ). The BDRs (Brazilian Depositary Receipts) representing Cosan’s class A common shares are listed on the Brazilian Stock Exchange (BM&FBovespa) (ticker - CZLT33). Mr. Rubens Ometto Silveira Mello is the ultimate controlling shareholder of Cosan. Cosan controls its subsidiaries Cosan S.A. Indústria e Comércio (“Cosan S.A.”) and Cosan Logística S.A. (“Cosan Log”) through a 62.51 % and 63.27% interest, respectively. Cosan, Cosan S.A., Cosan Log and its subsidiaries are collectively referred to as the “Company”.

 

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

 

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

 

2

Basis of preparation

 

2.1

Statement of compliance

 

The consolidated interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting, as issued by the International Accounting Standards Board (IASB), and in accordance with the regulations issued by the Brazilian Securities Commission - CVM applicable to the preparation of the Quarterly Information - ITR. They do not include all the information required for a complete set of IFRS financial statements. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Company’s financial position and performance since the last annual consolidated financial statements as at and for the year ended December 31, 2014.

 

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, 2014.

 

These consolidated interim financial statements were authorized for issue by the Board of Directors on August 6, 2015.

 

2.2

Basis of consolidation

 

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

 

			Ownership percentage
			June 30, 2015				December 31, 2014
Directly owned subsidiaries
Cosan Logística S.A.(i)			63.27				62.51
Cosan S.A. Indústria e Comércio			62.51				62.51

 

(i)

Change in the ownership interest reflects the buy-back program of its common shares, as per the press release issued on April 7, 2015.

 

During the 2nd quarter of 2015, Cosan S.A. increased its interest in COMGÁS to 61.33% due to the capital increase arising from the partial use of tax benefit of goodwill according to the COMGÁS "Extraordinary Annual General Meeting" held on April 30, 2015. The Company did not recognize the new ownership percentage, because it is awaiting the end of the deadline for the minorities to exercise their option to purchase additional shares.

 

2.3

New standards and interpretations not yet adopted

 

A number of new standards and amendments to standards and interpretations are effective for annual periods beginning after January 1, 2015, and have not been applied in preparing these consolidated financial statements. None of these is expected to have a significant effect on the consolidated financial statements of the Company, except the following:

 

·

IFRS 9, ‘Financial instruments’, addresses the classification, measurement and recognition of financial assets and financial liabilities. IFRS 9 is effective for annual reporting periods beginning on or after January 1, 2018. The Company will also consider the impact of the remaining phases of IFRS 9 when completed by the Board;

 

·

IFRS 15, ‘Revenue from contracts with customers’ deals with revenue recognition and establishes principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. The standard is effective for annual periods beginning on or after January 1, 2018. The standard replaces IAS 18 ‘Revenue’ and IAS 11 ‘Construction contracts’ and related interpretations. The Company is currently assessing the potential impacts of adopting IFRS 15.

 

There are no other Standards or Interpretations that are not yet effective that would be expected to have a material impact on the Company.

 

3	Business combinations

 

ALL – América Latina Logística S.A. (“ALL”)

 

On April 1, 2015, Cosan, through its subsidiary Rumo Logística Operadora Multimodal S.A. (“Rumo”), acquired 100% of the common shares of ALL and started to consolidate the results of operations of ALL as of that date.

 

The acquisition occurred through the replacement of ALL shares with Rumo shares, at the exchange ratio of 2.879303067 registered, book-entry common shares without par value issued by Rumo for each 1 (one) registered, book-entry common share without par value issued by ALL. Therefore, according to such exchange ratio, 1,963,670,770 registered, book-entry common shares without par value were issued by Rumo, representing 65.67% of Rumo’s shareholders’ equity, attributable to ALL shareholders registered on March 31, 2015, represented by 681,995,165 common shares.

 

ALL is located in the City of Curitiba, State of Paraná. The Company’s main activities are the railroad transportation related activities and the acquisition, leasing or lending of locomotives, wagons and other railway equipment.

 

ALL operates railroad transportation in the Southern region of Brazil through ALL – América Latina Logística Malha Sul S.A., and in the Mid-West region and State of São Paulo through its subsidiaries ALL – América Latina Logística Malha Paulista S.A., ALL – América Latina Logística Malha Norte S.A. and ALL – América Latina Logística Malha Oeste S.A..

 

(i)

Consideration transferred

 

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

 

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

 

(a)

Settlement of pre-existing relationship

 

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

 

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

 

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

 

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

 

 

(ii)

Identifiable assets acquired and liabilities assumed

 

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

 

Description
Cash and cash equivalents			169,703
Investment securities			940,689
Trade receivables			407,459
Inventories			84,326
Other credits			1,622,044
Property, plant and equipment			7,225,047
Intangible assets			7,483,232
Loans, borrowings and debentures			(6,639,223	)
Leases			(1,857,947	)
Advances on real estate credits			(340,255	)
Trade payables			(890,153	)
Leases and concessions			(1,974,280	)
Provision for legal proceedings			(554,269	)
Deferred tax liabilities			(1,135,203	)
Other liabilities			(1,560,925	)
Consolidated net assets			2,980,245
Non-controlling interests			(242,873	)
Total identifiable net assets acquired			2,737,372

 

(a)

Measurement of fair value

 

The valuation techniques used for measuring the fair value were market prices for similar items when they are available, depreciated replacement cost when appropriate, discounted cash flow, and other.

 

If new information obtained within one year of the date of acquisition about facts and circumstances that existed at the date of acquisition identifies adjustments to the above amounts, or any additional provisions that existed at the date of acquisition, then the accounting for the acquisition will be revised.

 

Rumo has elected to measure the participation of Brado Holding S.A. (“Brado”) minority shareholders according to the proportion of the non-controlling shareholders’ in the fair value of identifiable net assets of Brado.

 

Accounts receivable fair value of R$ 407,459 is net of an allowance of R$ 59,506.

 

The costs related the acquisition were recorded in "other operating expenses" in the profit and loss in the amount of R$ 5,295.

 

The consolidated statement of profit or loss includes, from the date of acquisition, revenues and net income of R$ 1,124,779 and R$ 54,503, respectively, generated by ALL and its subsidiaries.

 

If ALL had been consolidated from January 1, 2015, the consolidated statement of profit or loss would present net revenue of R$ 2,190,421 and a net loss of R$ 192,998.

 

 

4	Operating segments

 

Segment information

 

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

 

Operating segments

 

I.

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

 

II.

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

 

III.

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

 

IV.

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

 

V.

Radar: management, buying, selling and leasing of agricultural;

 

VI.

Lubricants: production and distribution of lubricants under the Mobil brand in Brazil, Bolivia, Uruguay and Paraguay, as well as European and Asian market with a Comma trademark; and

 

VII.

Other business: other investments, in addition to the corporate activities of the Company. The other business 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 “Deconsolidation IFRS 11”.

 

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

 

		April 1, 2015 to June 30, 2015																																								Additional information
		Raízen Energia				Raízen Combustíveis				COMGÁS				Radar				Lubricants				Cosan Log				Other business				Deconsolidated effects IFRS 11				Segment elimination				Total consolidated				Cosan Energia				Cosan Log
Statement of profit or loss:
Net sales			1,646,883				14,793,885				1,671,012				26,927				424,088				1,220,285				—				(16,440,768	)			(9,071	)			3,333,241				2,122,027				1,220,285
Domestic market			790,038				14,793,885				1,671,012				26,927				338,505				1,175,685				—				(15,583,923	)			(9,071	)			3,203,058				2,036,444				1,175,685
External market			856,845				—				—				—				85,583				44,600				—				(856,845	)			—				130,183				85,583				44,600
Gross profit			169,103				659,384				580,093				21,397				109,827				454,287				—				(828,487	)			—				1,165,604				711,317				454,287
Selling expenses			(88,087	)			(281,090	)			(150,654	)			—				(70,380	)			—				—				369,177				—				(221,034	)			(221,034	)			—
General and administrative expenses			(121,175	)			(97,231	)			(73,860	)			(6,988	)			(17,385	)			(84,782	)			(50,491	)			218,406				—				(233,506	)			(142,597	)			(84,782	)
Other income (expense), net			(24,342	)			82,634				(1,787	)			6,460				214				39,831				(6,799	)			(58,292	)			—				37,919				(1,911	)			39,831
Financial results			10,958				(34,279	)			(58,294	)			1,979				(12,766	)			(323,003	)			(216,822	)			23,321				—				(608,906	)			(260,761	)			(323,003	)
Financial expense			(195,132	)			(47,074	)			(92,788	)			(351	)			(13,043	)			(354,971	)			(192,261	)			242,206				4,178				(649,236	)			(285,655	)			(354,971	)
Financial income			152,405				41,452				41,910				2,330				1,027				47,899				32,968				(193,857	)			(4,178	)			121,956				74,036				47,899
Foreign exchange losses, net			145,247				28,116				46,063				—				2,960				(59	)			49,114				(173,363	)			—				98,078				107,547				(59	)
Derivatives			(91,562	)			(56,773	)			(53,479	)			—				(3,710	)			(15,872	)			(106,643	)			148,335				—				(179,704	)			(156,689	)			(15,872	)
Equity in earnings of associates			(11,422	)			3,064				—				—				(2,131	)			181				169,310				8,358				(165,704	)			1,656				1,475				181
Equity in earnings of joint ventures			—				—				—				—				—				—				90,274				—				—				90,274				90,274				—
Income tax expense benefit			38,715				(117,122	)			(100,134	)			(3,477	)			(3,318	)			(46,573	)			70,502				78,407				—				(83,000	)			(36,427	)			(46,573	)
Profit (loss) for the period			(26,250	)			215,360				195,364				19,371				4,061				39,941				55,974				(189,110	)			(165,704	)			149,007				140,336				39,941
Other selected data:
Depreciation and amortization			336,430				147,697				119,701				246				18,919				176,885				1,059				(484,127	)			—				316,810				139,925				176,885
EBITDA			260,507				514,458				473,493				21,115				39,064				586,402				203,353				(774,965	)			(165,704	)			1,157,723				577,449				586,402
Additions to PP&E, intangible
and biological assets (cash)			357,555				116,873				122,454				272				6,959				471,631				14,955				(474,428	)			—				616,271				144,639				471,631
Reconciliation of EBITDA:
Profit (loss) for the period			(26,250	)			215,360				195,364				19,371				4,061				39,941				55,974				(189,110	)			(165,704	)			149,007				140,336				39,941
Income tax and social contribution			(38,715	)			117,122				100,134				3,477				3,318				46,573				(70,502	)			(78,407	)			—				83,000				36,427				46,573
Financial result, net			(10,958	)			34,279				58,294				(1,979	)			12,766				323,003				216,822				(23,321	)			—				608,906				260,761				323,003
Depreciation and amortization			336,430				147,697				119,701				246				18,919				176,885				1,059				(484,127	)			—				316,810				139,925				176,885
EBITDA			260,507				514,458				473,493				21,115				39,064				586,402				203,353				(774,965	)			(165,704	)			1,157,723				577,449				586,402

		January 1, 2015 to June 30, 2015																																								Additional information
		Raízen Energia				Raízen Combustíveis				COMGÁS				Radar				Lubricants				Cosan Log				Other business				Deconsolidated effects IFRS 11				Segment elimination				Total consolidated				Cosan Energia				Cosan Log
Statement of profit or loss:
Net sales			4,726,922				28,855,395				3,205,075				48,533				803,931				1,425,897				—				(33,582,317	)			(9,071	)			5,474,365				4,057,539				1,425,897
Domestic market			1,956,396				28,855,395				3,205,075				48,533				644,171				1,352,533				—				(30,811,791	)			(9,071	)			5,241,241				3,897,779				1,352,533
External market			2,770,526				—				—				—				159,760				73,364				—				(2,770,526	)			—				233,124				159,760				73,364
Gross profit			628,316				1,460,805				959,479				41,265				201,094				513,549				—				(2,089,121	)			—				1,715,387				1,201,838				513,550
Selling expenses			(237,160	)			(597,023	)			(305,176	)			—				(135,185	)			—				—				834,183				—				(440,361	)			(440,360	)			—
General and administrative expenses			(261,826	)			(197,502	)			(160,456	)			(14,195	)			(33,532	)			(109,152	)			(95,983	)			459,328				—				(413,318	)			(283,475	)			(109,154	)
Other income (expense), net			14,757				143,560				(3,867	)			20,783				373				39,371				(118,064	)			(158,317	)			—				(61,404	)			(100,775	)			39,371
Financial results			(227,345	)			(21,326	)			(132,251	)			3,671				(8,996	)			(343,402	)			(386,351	)			248,671				—				(867,329	)			(545,475	)			(343,402	)
Financial expense			(399,974	)			(86,029	)			(196,678	)			(705	)			(21,488	)			(365,294	)			(364,683	)			486,003				8,000				(940,848	)			(559,468	)			(365,294	)
Financial income			300,198				79,229				79,224				4,400				1,355				53,551				61,217				(379,427	)			(8,000	)			191,747				138,144				53,551
Foreign exchange losses, net			(460,179	)			(144,690	)			(196,450	)			(24	)			5,575				(56,276	)			(246,581	)			604,869				—				(493,756	)			(460,998	)			(56,276	)
Derivatives			332,610				130,164				181,653				—				5,562				24,617				163,696				(462,774	)			—				375,528				336,847				24,617
Equity in earnings of associates			(17,412	)			7,112				—				—				(7,090	)			181				178,271				10,300				(174,340	)			(2,978	)			(3,159	)			180
Equity in earnings of joint ventures			—				—				—				—				—				—				248,045				—				—				248,045				248,045				—
Income tax expense benefit			81,466				(262,098	)			(131,975	)			(6,821	)			(9,023	)			(51,406	)			195,916				180,632				—				(3,309	)			48,097				(51,406	)
Profit (loss) for the period			(19,204	)			533,528				225,754				44,703				7,641				49,141				21,834				(514,324	)			(174,340	)			174,733				124,736				49,139
Other selected data:
Depreciation and amortization			964,044				287,030				239,152				491				36,847				203,538				2,034				(1,251,074	)			—				482,062				278,522				203,538
EBITDA			1,090,719				1,103,982				729,132				48,344				62,507				647,487				214,303				(2,194,701	)			(174,340	)			1,527,433				900,636				647,485
Additions to PP&E, intangible and biological assets (cash)			1,198,002				358,627				246,020				940				15,264				502,621				33,115				(1,556,629	)			—				797,960				295,339				502,621
Reconciliation of EBITDA:
Profit (loss) for the period			(19,204	)			533,528				225,754				44,703				7,641				49,141				21,834				(514,324	)			(174,340	)			174,733				124,736				49,139
Income tax and social contribution			(81,466	)			262,098				131,975				6,821				9,023				51,406				(195,916	)			(180,632	)			—				3,309				(48,097	)			51,406
Financial result, net			227,345				21,326				132,251				(3,671	)			8,996				343,402				386,351				(248,671	)			—				867,329				545,475				343,402
Depreciation and amortization			964,044				287,030				239,152				491				36,847				203,538				2,034				(1,251,074	)			—				482,062				278,522				203,538
EBITDA			1,090,719				1,103,982				729,132				48,344				62,507				647,487				214,303				(2,194,701	)			(174,340	)			1,527,433				900,636				647,485

		April 1, 2014 to June 30, 2014																																								Additional information
		Raízen Energia				Raízen Combustíveis				COMGÁS				Radar				Lubricants				Rumo				Other business				Deconsolidated effects IFRS 11				Segment elimination				Total consolidated				Cosan Energia				Cosan Log
Statement of profit or loss:
Net sales			1,686,295				13,684,833				1,616,390				35,194				403,946				190,481				(2	)			(15,371,128	)			—				2,246,009				2,055,528				190,481
Domestic market			804,045				13,684,833				1,616,390				35,194				333,431				156,758				(2	)			(14,488,878	)			—				2,141,771				1,985,013				156,758
External market			882,250				—				—				—				70,515				33,723				—				(882,250	)			—				104,238				70,515				33,723
Gross profit			325,518				617,953				525,116				25,108				88,800				61,912				(2	)			(943,471	)			—				700,934				639,023				61,912
Selling expenses			(117,716	)			(301,549	)			(158,421	)			—				(65,864	)			—				—				419,265				—				(224,285	)			(224,286	)			—
General and administrative expenses			(121,002	)			(95,817	)			(76,034	)			(8,496	)			(16,422	)			(22,764	)			(46,691	)			216,819				—				(170,407	)			(133,080	)			(22,764	)
Other income (expense), net			(1,510	)			76,669				(815	)			67,909				(240	)			(8,182	)			(124,869	)			(75,159	)			—				(66,197	)			(58,013	)			(8,182	)
Financial results			13,502				7,474				(47,203	)			2,146				21,924				(23,902	)			(191,823	)			(20,976	)			—				(238,858	)			(203,380	)			(23,902	)
Financial expense			(113,764	)			(43,261	)			(70,770	)			(296	)			(7,473	)			(33,978	)			(212,464	)			157,025				2,987				(321,994	)			(283,146	)			(33,978	)
Financial income			79,801				28,923				23,026				2,442				1,784				9,907				40,248				(108,724	)			(2,987	)			74,420				63,413				9,907
Foreign exchange losses, net			51,162				20,132				(3,106	)			—				35,906				169				(12,147	)			(71,294	)			—				20,822				23,812				169
Derivatives			(3,697	)			1,680				3,647				—				(8,293	)			—				(7,460	)			2,017				—				(12,106	)			(7,459	)			—
Equity in earnings of associates			(5,568	)			2,078				—				—				(2,041	)			—				136,790				3,490				(132,891	)			1,858				1,858				—
Equity in earnings of joint ventures			—				—				—				—				—				—				162,473				—				—				162,473				162,473				—
Income tax expense benefit			18,713				(88,342	)			(83,012	)			(5,113	)			(10,440	)			(2,434	)			118,815				69,629				—				17,816				20,252				(2,434	)
Profit (loss) for the period			111,937				218,466				159,631				81,554				15,717				4,630				54,693				(330,403	)			(132,891	)			183,334				204,847				4,630
Other selected data:
Depreciation and amortization			398,562				128,842				129,663				242				16,830				23,013				873				(527,404	)			—				170,621				147,608				23,013
EBITDA			478,284				428,176				419,509				84,763				21,063				53,979				128,574				(906,460	)			(132,891	)			574,997				535,583				53,979
Additions to PP&E, intangible and biological assets (cash)			566,641				128,790				164,256				215				9,002				83,782				9,386				(695,431	)			—				266,641				182,859				83,782
Reconciliation of EBITDA:
Profit (loss) for the period			111,937				218,466				159,631				81,554				15,717				4,630				54,693				(330,403	)			(132,891	)			183,334				204,847				4,630
Income tax and social contribution			(18,713	)			88,342				83,012				5,113				10,440				2,434				(118,815	)			(69,629	)			—				(17,816	)			(20,252	)			2,434
Financial result, net			(13,502	)			(7,474	)			47,203				(2,146	)			(21,924	)			23,902				191,823				20,976				—				238,858				203,380				23,902
Depreciation and amortization			398,562				128,842				129,663				242				16,830				23,013				873				(527,404	)			—				170,621				147,608				23,013
EBITDA			478,284				428,176				419,509				84,763				21,063				53,979				128,574				(906,460	)			(132,891	)			574,997				535,583				53,979

		January 1, 2014 to June 30, 2014																																								Additional information
		Raízen Energia				Raízen Combustíveis				COMGÁS				Radar				Lubricants				Rumo				Other business				Deconsolidated effects IFRS 11				Segment elimination				Total consolidated				Cosan Energia				Cosan Log
Statement of profit or loss:
Net sales			4,291,128				26,695,789				3,133,770				98,744				772,215				398,415				51				(30,986,917	)			—				4,403,195				4,004,780				398,415
Domestic market			1,796,967				26,695,789				3,133,770				98,744				631,009				335,688				51				(28,492,756	)			—				4,199,262				3,863,574				335,688
External market			2,494,161				—				—				—				141,206				62,727				—				(2,494,161	)			—				203,933				141,206				62,727
Gross profit			817,391				1,288,248				973,527				50,352				167,072				146,315				60				(2,105,639	)			—				1,337,326				1,191,011				146,315
Selling expenses			(280,915	)			(585,017	)			(308,753	)			—				(122,150	)			—				—				865,932				—				(430,903	)			(430,903	)			—
General and administrative expenses			(261,361	)			(200,952	)			(143,164	)			(16,846	)			(33,793	)			(42,738	)			(81,445	)			462,313				—				(317,986	)			(258,203	)			(42,738	)
Other income (expense), net			58,659				178,429				(7,927	)			44,864				170				(1,481	)			(134,615	)			(237,088	)			—				(98,989	)			(97,504	)			17,109
Financial results			77,928				8,135				(103,753	)			5,291				47,190				(20,048	)			(289,996	)			(86,063	)			—				(361,316	)			(313,411	)			(20,048	)
Financial expense			(242,162	)			(63,305	)			(142,160	)			(564	)			35,210				(42,464	)			(363,583	)			305,467				6,102				(507,459	)			(455,807	)			(42,464	)
Financial income			145,712				46,590				38,485				5,855				1,577				22,134				60,822				(192,302	)			(6,102	)			122,771				98,918				22,134
Foreign exchange losses, net			129,946				53,014				32,160				—				25,917				282				38,200				(182,960	)			—				96,559				101,559				282
Derivatives			44,432				(28,164	)			(32,238	)			—				(15,514	)			—				(25,435	)			(16,268	)			—				(73,187	)			(58,081	)			—
Equity in earnings of associates			(15,931	)			7,332				—				—				(3,339	)			—				283,611				8,599				(279,605	)			667				667				—
Equity in earnings of joint ventures			—				—				—				—				—				—				385,465				—				—				385,465				385,465				—
Income tax expense benefit			(77,376	)			(206,361	)			(141,975	)			(7,839	)			(7,665	)			(27,677	)			143,411				283,737				—				(41,745	)			(14,068	)			(27,677	)
Profit (loss) for the period			318,395				489,814				267,955				75,822				47,485				54,371				306,491				(808,209	)			(279,605	)			472,519				463,054				72,961
Other selected data:
Depreciation and amortization			894,416				261,308				247,832				485				36,347				44,728				1,607				(1,155,724	)			—				330,999				286,271				44,728
EBITDA			1,212,259				949,348				761,515				78,855				44,307				146,824				454,683				(2,161,607	)			(279,605	)			1,206,579				1,076,804				165,414
Additions to PP&E, intangible and biological assets (cash)			1,575,698				406,590				320,066				254				14,918				97,729				25,843				(1,982,288	)			—				458,810				361,081				97,729
Reconciliation of EBITDA:
Profit (loss) for the period			318,395				489,814				267,955				75,822				47,485				54,371				306,491				(808,209	)			(279,605	)			472,519				463,054				72,961
Income tax and social contribution			77,376				206,361				141,975				7,839				7,665				27,677				(143,411	)			(283,737	)			—				41,745				14,068				27,677
Financial result, net			(77,928	)			(8,135	)			103,753				(5,291	)			(47,190	)			20,048				289,996				86,063				—				361,316				313,411				20,048
Depreciation and amortization			894,416				261,308				247,832				485				36,347				44,728				1,607				(1,155,724	)			—				330,999				286,271				44,728
EBITDA			1,212,259				949,348				761,515				78,855				44,307				146,824				454,683				(2,161,607	)			(279,605	)			1,206,579				1,076,804				165,414

		June 30, 2015																																								Additional information
		Raízen Energia				Raízen Combustíveis				COMGÁS				Radar				Lubricants				Cosan Log				Other business				Deconsolidated effects IFRS 11				Segment elimination				Total consolidated				Cosan Energia				Cosan Log
Statement of financial position:
Cash and cash equivalents			3,751,457				133,182				1,306,547				1,119				93,451				508,474				622,356				(3,884,639	)			—				2,531,947				2,020,616				508,474
Investment securities			—				—				—				191,487				—				534,429				—				—				—				725,916				191,487				534,429
Trade receivables			438,328				1,464,833				633,059				15,156				180,222				157,024				242				(1,903,161	)			—				985,703				828,679				157,024
Derivative financial instruments			751,527				7,986				488,252				—				13,115				13,869				1,051,918				(759,513	)			—				1,567,154				1,526,741				13,869
Inventories			1,372,773				1,451,604				131,136				—				201,197				106,790				61				(2,824,377	)			—				439,184				332,394				106,790
Other current assets			1,564,595				626,904				84,460				54,580				40,842				461,756				232,661				(2,191,499	)			(40,392	)			833,907				400,891				461,756
Other non-current assets			2,836,151				2,661,375				252,651				19,594				(209,285	)			2,715,086				1,963,351				(5,497,526	)			(7,722	)			4,733,675				2,018,581				2,715,086
Investment in associates			230,817				262,041				—				—				10,691				41,066				11,895,076				(492,858	)			(11,769,195	)			177,638				136,573				41,066
Investment in joint ventures			—				—				—				—				—				—				8,517,721				—				—				8,517,721				8,517,721				—
Biological assets			2,003,476				—				—				—				—				—				—				(2,003,476	)			—				—				—				—
Investment property			—				—				—				2,643,211				—				—				—				—				—				2,643,211				2,643,211				—
Property, plant and equipment			10,171,547				2,432,634				—				2,224				221,651				8,813,863				148,983				(12,604,181	)			—				9,186,721				372,858				8,813,863
Intangible assets and goodwill			3,278,282				4,285,945				8,598,206				708				803,954				7,801,373				7,201				(7,564,227	)			—				17,211,442				9,410,069				7,801,373
Loans, borrowings and debenture			(10,786,372	)			(1,459,528	)			(3,364,292	)			—				(341,074	)			(7,965,805	)			(4,875,068	)			12,245,900				—				(16,546,239	)			(8,221,860	)			(7,965,805	)
Trade payables			(690,156	)			(755,329	)			(1,156,369	)			(799	)			(152,646	)			(701,835	)			(3,989	)			1,445,485				—				(2,015,638	)			(1,313,803	)			(701,835	)
Derivative financial instruments			(122,738	)			(41,834	)			—				—				936				(25,618	)			(623,042	)			164,572				—				(647,724	)			(622,106	)			(25,618	)
Employee benefits payable			(398,017	)			(114,689	)			(39,786	)			(5,035	)			(16,438	)			(134,442	)			(16,345	)			512,706				—				(212,046	)			(77,604	)			(134,442	)
Other current liabilities			(1,107,866	)			(1,433,095	)			(103,940	)			(17,559	)			(94,755	)			(971,551	)			(168,543	)			2,540,961				38,919				(1,317,429	)			(355,452	)			(971,551	)
Other non-current liabilities			(2,778,903	)			(2,784,289	)			(1,041,006	)			(98,680	)			(153,085	)			(7,131,921	)			(4,162,768	)			5,563,192				9,194				(12,578,266	)			(5,446,346	)			(7,131,921	)
Total assets (net of liabilities) allocated by segment			10,514,901				6,737,740				5,788,918				2,806,006				598,776				4,222,558				14,589,815				(17,252,641	)			(11,769,196	)			16,236,877				12,362,650				4,222,558
Total assets			26,398,953				13,326,504				11,494,311				2,928,079				1,355,838				21,153,730				24,439,570				(39,725,457	)			(11,817,309	)			49,554,219				28,399,821				21,153,730

		December 31, 2014																																								Additional information
		Raízen Energia				Raízen Combustíveis				COMGÁS				Radar				Lubricants				Cosan Log				Other business				Deconsolidated effects IFRS 11				Segment elimination				Total consolidated				Cosan Energia				Cosan Log
Statement of financial position:
Cash and cash equivalents			2,643,950				173,470				973,708				6,011				39,810				86,487				543,324				(2,817,420	)			—				1,649,340				1,540,192				86,487
Investment securities			—				—				—				149,735				—				—				—				—				—				149,735				149,735				—
Trade receivables			620,300				1,920,778				605,483				22,214				194,486				42,685				241				(2,541,078	)			—				865,109				822,424				42,685
Derivative financial instruments			542,102				28,378				335,058				—				(721	)			—				556,241				(570,480	)			—				890,578				880,366				—
Inventories			2,315,907				1,128,771				125,406				—				222,486				5,817				11				(3,444,678	)			—				353,720				347,903				5,817
Other current assets			2,228,121				493,252				137,360				31,052				26,416				24,500				362,644				(2,721,373	)			(64,839	)			517,133				518,065				24,500
Other non-current assets			1,986,145				2,365,613				256,077				15,538				(184,670	)			480,989				1,809,988				(4,351,758	)			(6,610	)			2,371,312				1,890,315				480,989
Investment in associates			209,205				256,729				—				—				16,032				—				11,916,471				(465,934	)			(11,801,826	)			130,677				130,678				—
Investment in joint ventures			—				—				—				—				—				—				8,404,503				—				—				8,404,503				8,404,503				—
Biological assets			1,828,304				—				—				—				—				—				—				(1,828,304	)			—				—				—				—
Investment property			—				—				—				2,641,978				—				—				—				—				—				2,641,978				2,641,978				—
Property, plant and equipment			9,848,969				2,464,316				—				11,288				221,466				1,084,455				118,681				(12,313,285	)			—				1,435,890				351,435				1,084,455
Intangible assets and goodwill			3,288,709				4,267,514				8,595,251				173				824,277				860,253				6,419				(7,556,223	)			—				10,286,373				9,426,120				860,253
Loans, borrowings and debenture			(10,377,585	)			(1,557,782	)			(3,133,347	)			—				(261,166	)			(784,709	)			(4,323,418	)			11,935,367				—				(8,502,640	)			(7,397,602	)			(784,709	)
Trade payables			(636,619	)			(529,990	)			(848,770	)			(790	)			(118,784	)			(141,289	)			(2,826	)			1,166,609				—				(1,112,459	)			(971,170	)			(141,289	)
Derivative financial instruments			(359,408	)			(188,556	)			(4,960	)			—				—				—				(328,474	)			547,964				—				(333,434	)			(333,435	)			—
Employee benefits payable			(252,219	)			(66,799	)			(58,955	)			(5,336	)			(15,437	)			(19,302	)			(21,387	)			319,018				—				(120,417	)			(101,115	)			(19,302	)
Other current liabilities			(776,208	)			(1,896,387	)			(118,021	)			(20,783	)			(100,853	)			(89,787	)			(402,204	)			2,672,595				63,735				(667,913	)			(602,788	)			(89,787	)
Other non-current liabilities			(2,687,911	)			(2,263,528	)			(992,028	)			(93,552	)			(193,082	)			(221,851	)			(3,977,389	)			4,951,439				7,722				(5,470,180	)			(5,248,327	)			(221,851	)
Total assets (net of liabilities) allocated by segment			10,421,762				6,595,779				5,872,262				2,757,528				670,260				1,328,248				14,662,826				(17,017,541	)			(11,801,818	)			13,489,306				12,449,278				1,328,248
Total assets			25,511,712				13,098,821				11,028,343				2,877,989				1,359,582				2,585,186				23,718,523				(38,610,533	)			(11,873,275	)			29,696,348				27,103,714				2,585,186

Net sales by segment:

 

		April 1, 2015 to				January 1, 2015				April 1, 2014 to				January 1, 2014
		June 30, 2015				to June 30, 2015				June 30, 2014				to June 30, 2014
Raízen Energia
Ethanol			940,503				2,566,987				879,319				2,200,596
Sugar			464,968				1,873,297				582,806				1,808,275
Cogeneration			172,052				184,738				174,986				202,252
Other			69,359				101,900				49,184				80,005
			1,646,882				4,726,922				1,686,295				4,291,128
Raízen Combustíveis
Fuels			14,793,885				28,855,395				13,684,833				26,695,789
			14,793,885				28,855,395				13,684,833				26,695,789
COMGÁS
Industrial			1,049,105				2,076,956				1,036,150				2,061,577
Residential			181,347				302,204				170,090				282,266
Construction revenue			103,343				193,724				117,463				235,104
Thermo generation			135,036				250,145				103,833				191,428
Cogeneration			72,128				138,100				64,174				128,008
Commercial			71,792				133,401				64,014				119,471
Automotive			50,014				95,051				49,957				96,754
Other			8,247				15,494				10,709				19,162
			1,671,012				3,205,075				1,616,390				3,133,770
Radar
Property sales			6,436				8,315				17,671				63,260
Land lease			16,519				33,505				15,682				31,808
Other			3,972				6,713				1,841				3,676
			26,927				48,533				35,194				98,744
Lubricants
Lubricants			363,725				702,393				335,299				654,487
Basic oil			56,704				94,158				64,168				110,191
Other			3,659				7,380				4,479				7,537
			424,088				803,931				403,946				772,215
Cosan's other business			—				—				(2	)			51
IFRS 11 - Deconsolidated of
adjustments/eliminations joint
ventures and eliminations			(16,449,838	)			(33,591,388	)			(15,371,128	)			(30,986,917	)
Cosan Energia			2,112,956				4,048,468				2,055,528				4,004,780
Cosan Log
Logistics			1,167,748				1,323,774				137,793				292,739
Port handling			40,968				87,519				43,879				93,308
Other			11,569				14,604				8,809				12,368
			1,220,285				1,425,897				190,481				398,415
Total consolidated			3,333,241				5,474,365				2,246,009				4,403,195

 

5

Cash and cash equivalents

 

		June 30, 2015				December 31, 2014
Brazilian Reais
Cash and bank deposits			132,335				57,703
Short-term investments			2,277,478				1,496,620
			2,409,813				1,554,323
U.S. Dollars and Pound Sterling
Cash and bank deposits			122,134				95,017
			122,134				95,017
			2,531,947				1,649,340

 

Short-term investments are mainly comprised of exclusive funds as presented below:

 

		June 30, 2015				December 31, 2014
Exclusive funds
Repurchase agreements(i)			798,594				423,535
Bank certificate of deposits - CDB(ii)			202,271				87,646
			1,000,865				511,181
Bank investments
Repurchase agreements(i)			953,655				222,570
Bank certificate of deposits - CDB(ii)			322,958				762,869
			1,276,613				985,439
			2,277,478				1,496,620

 

(i)

These refer to purchases of assets, mainly government securities, with the commitment to repurchase at a rate previously established by the parties, generally with a one-day term.

 

(ii)

These refer mainly to Bank Deposit Certificates - CDBs, issued by Brazilian financial institutions with original maturities of 90 days or less or for which there are no penalties or other restrictions for early redemption.

 

6

Trade receivables

 

		June 30, 2015				December 31, 2014
Domestic - Brazilian Reais			1,154,888				1,369,013
Export - Foreign currency			16,487				25,323
Allowance for doubtful accounts			(64,816	)			(48,235	)
			1,106,559				1,346,101
Current			985,703				865,109
Non-current			120,856				480,992

 

7

Other trade receivables

 

		June 30, 2015				December 31, 2014
Receivable from ExxonMobil(i)			345,236				332,405
Receivable from sale of
discontinued operations(ii)			74,985				107,775
			420,221				440,180
Current			74,985				69,683
Non-current			345,236				370,497

 

(i)

The subsidiary Cosan Lubrificantes e Especialidades S.A. has a receivable from ExxonMobil related to tax debits included in the Brazilian Government's tax amnesty and refinancing program (“Refis IV”), which are the responsibility of ExxonMobil Brasil Holdings BV (“ExxonMobil”);

 

(ii)

Receivables from the sale of Cosan Alimentos S.A. to be received in October 2015 plus the CDI or SELIC indexed.

 

8

Related parties

 

a)

Receivables from and payables to related parties:

 

		June 30, 2015				December 31, 2014
Current assets
Commercial operations
Raízen Energia S.A.			35,480				23,229
Raízen Combustíveis S.A.			5,453				2,576
Aguassanta Participações S.A.			6,344				6,340
Other			4,501				556
			51,778				32,701
Corporate operation / Agreements
Raízen Energia S.A.			2,806				3,388
			2,806				3,388
Financial operations
Raízen Combustíveis S.A.			1,400				1,319
Rezende Barbosa Group			—				949
			1,400				2,268
			55,984				38,357
Non-current assets
Receivables under the
framework agreement
Raízen Energia S.A.			89,763				104,984
Raízen Combustíveis S.A.			—				15,126
			89,763				120,110
Financial operations
Rezende Barbosa Group			84,995				84,996
Other			11				4
			85,006				85,000
Corporate operation
Novvi Limited Liability Company			12,005				7,417
Tellus Brasil Participações Ltda.			10,562				—
Other			184				—
			22,751				7,417
			197,520				212,527
Total			253,504				250,884
Current liabilities
Commercial operations
Raízen Energia S.A.			19,617				25,926
Raízen Combustíveis S.A.			1,862				1,283
Shell Brazil Holding B.V.			—				3,820
Other			47				96
			21,526				31,125
Corporate operations / Agreements
Raízen Energia S.A.			78,757				94,892
Raízen Combustíveis S.A.			11,162				11,402
			89,919				106,294
Financial operations
Other			(219	)			22
			(219	)			22
Total			111,226				137,441

 

 

b)

Related party transactions:

 

		April 1, 2015 to				January 1, 2015 to				April 1, 2014 to				January 1, 2014 to
		June 30, 2015				June 30, 2015				June 30, 2014				June 30, 2014
Sales of goods and services
Raízen Energia S.A.			42,596				138,337				51,240				133,861
Raízen Combustíveis S.A.			31,182				34,857				—				—
Other			127				127				1,058				1,072
			73,905				173,321				52,298				134,933
Purchase of goods / Inputs
Raízen Energia S.A.			(67	)			(70	)			(4	)			(4	)
Raízen Combustíveis S.A.			(1,751	)			(1,764	)			(354	)			(719	)
			(1,818	)			(1,834	)			(358	)			(723	)
Land lease
Raízen Energia S.A.			14,777				29,279				14,701				25,651
			14,777				29,279				14,701				25,651
Shared income (expense)
Aguassanta Participações S.A.			111				216				118				224
Raízen Energia S.A.			(10,674	)			(21,342	)			(3,373	)			(6,892	)
			(10,563	)			(21,126	)			(3,255	)			(6,668	)
Financial result
Raízen Energia S.A.			420				1,230				607				1,223
Rezende Barbosa Group			1				10				126				293
Aldwich Temple Venture Capital Ltd.			(27	)			(108	)			(64	)			(130	)
Other			(49	)			(97	)			74				126
			345				1,035				743				1,512
Total			76,646				180,675				64,129				154,705

 

c)

Officers’ and directors’ compensation

 

		April 1, 2015 to				January 1, 2015 to				April 1, 2014 to				January 1, 2014 to
		June 30, 2015				June 30, 2015				June 30, 2014				June 30, 2014
Regular compensation			6,655				20,870				7,939				14,884
Stock option expense			2,930				5,859				2,563				5,126
Bonuses and other variable compensation			24,908				33,060				18,124				24,470
			34,493				59,789				28,626				44,480

9

Investment in associates

 

a)

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

 

		Tellus Brasil Participações S.A.				Novvi Limited Liability Company				Janus Brasil Participações S.A.				Vertical UK LLP				Other				Total
Shares issued by the associate			65,957,282				200,002				1,364,827				—				—
Shares held by Cosan			33,638,214				100,001				689,685				—				—
Cosan ownership interest			51.00	%			50.00	%			51.00	%			50.00	%			—
Equity in earnings (losses) of
associates at June 30, 2014			4,028				(3,339	)			—				1,057				(1,079	)			667
At December 31, 2014			94,417				14,522				13,063				6,512				2,163				130,677
Equity in earnings (losses) of associates			5,986				(7,081	)			146				(1,630	)			(399	)			(2,978	)
Other comprehensive income (losses)			(429	)			3,765				—				—				—				3,336
Business combination			—				—				—				—				41,285				41,285
Capital increase			(5,333	)			—				11,907				—				5				6,579
Other			(568	)			—				—				—				(693	)			(1,261	)
At June 30, 2015			94,073				11,206				25,116				4,882				42,361				177,638

 

b)

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

 

		Cosan S.A. Indústria e Comércio S.A.				Companhia de Gás de São Paulo - "COMGÁS"				Cosan Logística S.A.				Rumo Logística Operadora Multimodal S.A.				Logispot Armazéns Gerais S.A.				Radar Propriedades Agrícolas S.A.				Radar II Propriedades Agrícolas S.A.				Elimination of participation Radar II in Radar				Total
Shares issued by investee			407,214,353				121,870,985				405,856,814				299,015,898				2,040,816				21,148,989				830,690,258				—
Shares held by non-controlling shareholders			153,511,030				47,909,318				152,153,491				220,507,722				1,000,000				17,147,822				290,710,861				—
Non-controlling interest			37.49	%			39.31	%			36.73	%			73.74	%			49.00	%			81.08	%			35.00	%			—
Equity in earnings (losses) at June 30, 2014			—				106,024				—				13,685				(370	)			25,744				17,232				(5,163	)			157,152
At December 31, 2014			3,653,052				2,111,578				(106	)			323,636				37,066				1,680,612				337,743				(498,832	)			7,644,749
Equity in earnings (losses)			2,161				88,747				6,867				28,186				(1,101	)			26,609				3,615				—				155,084
Other comprehensive income			11,265				—				434				3,298				—				2,447				214				—				17,658
Dividends			(48,041	)			(121,511	)			—				(69,213	)			—				—				—				—				(238,765	)
Business combinations			—				—				70,911				2,760,558				—				—				—				—				2,831,469
Other			2,056				—				(15,551	)			(18,105	)			—				—				—				—				(31,600	)
At June 30, 2015			3,620,493				2,078,814				62,555				3,028,360				35,965				1,709,668				341,572				(498,832	)			10,378,595

 

c)

Information of the subsidiaries

 

The subsidiary COMGÁS is currently going through a tariff cycle revision process. The completion date of COMGÁS 2014-2019 cycle revision process, which was predicted to occur initially at the end of May 2014, was postponed to the end of May 2015 by ARSESP by means of Decisions no. 494, of May 27, 2014, and no. 533, of December 10, 2014. COMGÁS is a waiting for information from ARSESP regarding the next tariff revision process stages.

 

On June 30, 2015, the subsidiary COMGÁS has a regulatory unrecognized accounts receivable in the amount of R$ 211,178 (R$ 242,654 on December 31, 2014) related to differences between the actual cost of gas incurred, paid by COMGÁS and the cost of gas included and charged to customers in accordance with tariff structure defined by ARSESP. During the quarter, the net movement in the cost of gas was R$ 31,476 and the update by the Selic rate was R$ 14,111.

 

10

Investment in joint ventures

 

Changes to investments in joint ventures were as follows:

 

		Raízen Combustíveis S.A.				Raízen Energia S.A.				Total
Shares issued by investee			3,303,168,484				5,902,595,634
Shares held by Cosan			1,651,584,242				2,951,297,817
Cosan ownership interest			50.00	%			50.00	%
Equity in earnings of
joint ventures at June 30, 2014			218,491				166,974				385,465
At December 31, 2014			3,218,466				5,186,037				8,404,503
Equity in earnings of joint ventures			256,649				(8,604	)			248,045
Other comprehensive income			—				55,173				55,173
Dividends			(190,000	)			—				(190,000	)
At June 30, 2015			3,285,115				5,232,606				8,517,721

 

A summary of the statement of financial position and the statement of profit or loss of the joint ventures are disclosed in Note 4, Operating segments.

 

The cash flows and other comprehensive income of the joint ventures are summarized below:

 

		Raízen Energia S.A.								Raízen Combustíveis S.A.
		June 30, 2015				June 30, 2014				June 30, 2015				June 30, 2014
Cash flows
Operating activities			3,071,347				1,358,778				958,959				439,974
Investing activities			(1,204,282	)			(1,564,406	)			(66,250	)			69,933
Financing activities			(715,507	)			675,046				(681,080	)			(511,308	)
Increase (decrease) in
cash and cash equivalents			1,151,558				469,418				211,629				(1,401	)
Other comprehensive income			91,141				237,915				533,528				489,465

 

11

Assets held for sale and investment property

 

		Investment property				Assets held for sale				Total
At December 31, 2014			2,641,978				25,089				2,667,067
Change in fair value			25,597				(2,435	)			23,162
Transfers			(18,364	)			27,342				8,978
Disposals			(6,000	)			(7,268	)			(13,268	)
At June 30, 2015			2,643,211				42,728				2,685,939

12

Property, plant and equipment

 

		Land, buildings and improvements				Machinery, equipment and facilities				Railcars and locomotives				Permanent railways				Construction in progress				Other				Total
Cost
At December 31, 2014			514,857				450,089				519,993				—				255,317				37,602				1,777,858
Additions			23,896				4,158				143,453				119,801				347,272				47,841				686,421
Disposals			—				(609	)			(251	)			(1,939	)			—				(15,956	)			(18,755	)
Transfers			8,770				26,216				—				(47,603	)			(57,256	)			78,855				8,982
Business combination (Note 3)			252,487				82,664				2,946,849				3,409,109				—				533,938				7,225,047
At June 30, 2015			800,010				562,518				3,610,044				3,479,368				545,333				682,280				9,679,553
Depreciation
At December 31, 2014			(103,615	)			(165,904	)			(55,688	)			—				—				(16,761	)			(341,968	)
Additions			(11,982	)			(22,522	)			(82,239	)			(33,206	)			—				(8,721	)			(158,670	)
Disposals			—				84				—				—				—				3				87
Transfers			7,429				273				—				—				—				17				7,719
At June 30, 2015			(108,168	)			(188,069	)			(137,927	)			(33,206	)			—				(25,462	)			(492,832	)
At December 31, 2014			411,242				284,185				464,305				—				255,317				20,841				1,435,890
At June 30, 2015			691,842				374,449				3,472,117				3,446,162				545,333				656,818				9,186,721

 

Capitalization of borrowing costs

 

Capitalized borrowing costs for the six months period ended June 30, 2015 amounted to R$ 27,280 (R$ 3,500 for the six months period ended June 30, 2014). The weighted average interest rate used to capitalize interest on the balance of construction in progress, was 5.58% p.a. for the six months period ended June 30, 2015 (5.51% p.a. for June 30, 2014).

 

13

Intangible assets

 

		Goodwill				Concession rights				Improvements to public concessions and operating licenses				Trademarks				Customer relationships				Other				Total
Cost
At December 31, 2014			703,956				8,790,010				898,520				252,474				862,324				228,097				11,735,381
Additions			—				198,127				—				—				42,050				10,268				250,445
Disposals			—				(7,066	)			(493,907	)			—				(3,074	)			—				(504,047	)
Transfers(i)			—				(31	)			—				—				31				12,452				12,452
Business combination (Note 3)			—				7,403,519				—				—				—				79,713				7,483,232
At June 30, 2015			703,956				16,384,559				404,613				252,474				901,331				330,530				18,977,463
Depreciation
At December 31, 2014			—				(636,730	)			(142,833	)			(136,962	)			(425,282	)			(107,201	)			(1,449,008	)
Additions			—				(188,946	)			(22,791	)			(11,414	)			(77,779	)			(22,462	)			(323,392	)
Disposals			—				5,058				—				—				1,307				—				6,365
Transfers(i)			—				—				—				—				—				14				14
At June 30, 2015			—				(820,618	)			(165,624	)			(148,376	)			(501,754	)			(129,649	)			(1,766,021	)
At December 31, 2014			703,956				8,153,280				755,687				115,512				437,042				120,896				10,286,373
At June 30, 2015			703,956				15,563,941				238,989				104,098				399,577				200,881				17,211,442

 

(i) The balance of transfers relates to amounts reclassified from property, plant and equipment and investment property.                                                      

Capitalization of borrowing costs

 

Capitalized borrowing costs for the six month period ended June 30, 2015, amounted to R$ 9,383 (R$ 10,441 for June 30, 2014). The weighted average interest rate used to capitalize borrowing costs on the balance of construction in progress, was 10.40% p.a. for the six months period ended June 30, 2015 (10.19% p.a. for June 30, 2014).

 

Intangible assets (excluding goodwill)		Annual rate of amortization - %				June 30, 2015				December 31, 2014
Gas distribution concession - COMGÁS(i)			Concession term				8,187,959				8,153,279
Concession rights - Rumo(ii)			Concession term				7,375,982				—
							15,563,941				8,153,279
Improvements to public rail concessions(iii)			Concession term				—				505,237
Operating license for port terminal(iv)			4.00				238,989				250,450
							238,989				755,687
Trademarks
Mobil			10.00				79,894				91,308
Comma			—				24,204				24,204
							104,098				115,512
Relationships with customers
COMGÁS			20.00				345,312				375,119
Lubricants			6.00				54,265				61,923
							399,577				437,042
Other
Software licenses			20.00				101,194				83,889
Other			15.00				99,687				37,008
							200,881				120,897
Total							16,507,486				9,582,417

 

(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. The amortization term is 39 years (the remaining concession period, plus extension);

 

(ii)

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

 

(iii)

Refers to improvements made to the Federal Government rail under concession and operated by ALL until March 31, 2015, when ALL was acquired by the Rumo; and

 

(iv)

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

 

Impairment testing of cash-generating units containing goodwill

 

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

 

During the six month periods ended June 30, 2015, no impairment indicator was identified that would trigger the need for an impairment test.

 

14

Loans, borrowings and debentures

 

		Interest
Description(i)		Index(ii)			Annual interest(iii)				June 30, 2015				December 31, 2014				Matures
Loan and borrowings
BNDES		Selic			15.7	%			306,171				274,000				Oct-2020
		TJ462			8.8	%			888,701				834,565				Oct-2020
		TJLP			8.46	%			2,519,411				288,209				Jun-2029
EIB		US$ + LIBOR			2.06	%			783,411				691,463				Sep-2021
FINAME		URTJLP			7.98	%			651,257				457,570				Jul-2023
		Fixed			4.42	%			664,011				307,230				Dec-2024
FINEM		Fixed			3.5	%			3,428				3,420				Jan-2024
		IPCA			16.72	%			3,836				3,483				Nov-2021
		URTJLP			7.66	%			13,322				13,231				Jan-2022
FINEP		Fixed			5,00	%			151,062				165,032				Nov-2020
Foreign loans		LIBOR Sterling			3.93	%			263,781				224,047				Dec-2019
FRN		US$			2.63	%			168,219				—				Jan-2017
NCC		105.9% of CDI			14.44	%			5,696				—				Jul-2015
NCE		TJLP			12.84	%			123,019				—				Jul-2015
		109% of CDI			14.87	%			307,841				—				Sep-2018
		112% of CDI			15.28	%			401,197				—				Oct-2018
Perpetual Notes		US$			8.25	%			1,570,796				1,344,760				—
Resolution 4131		US$			2.74	%			252,976				29,338				Feb-2017
		US$ + LIBOR			1.63	%			307,678				266,006				Nov-2015
		US$ + LIBOR			2.11	%			542,514				466,494				Mar-2018
Senior Notes Due 2018		Fixed			9.5	%			875,090				874,494				Mar-2018
Senior Notes Due 2023		US$			5.00	%			1,611,867				1,352,796				Mar-2023
Trade banks		260.1% of CDI			35.48	%			5,778				—				Jun-2016
		107.5% of CDI			14.66	%			70,537				—				Jul-2015
		CDI + 1.25 p.a.			15.06	%			110,408				—				Sep-2015
Working capital		CDI + 1.43%			15.27	%			91,318				85,628				Sep-2016
		CDI + 1.20%			15.00	%			108,143				101,515				Oct-2017
		US$ + LIBOR			4.18	%			159,113				133,185				Sep-2016
Other					—				3,146				7,559				—
									12,963,727				7,924,025

 

Debentures
Convertible debentures		URTJLP			8.1	%			64,463				—				Jun-2016
Non-convertible debentures		% of net revenue			—				27,488				—				Jun-2016
		Fixed			10.1	%			161,103				—				Oct-2020
		Fixed rate + IPCA			14.74	%			480,675				447,386				Sep-2020
		108% of CDI			14.73	%			521,016				—				Jul-2018
		CDI+1.3% p.a.			15.12	%			768,786				—				Oct-2017
		CDI			15.97	%			1,427,172				—				Apr-2018
		CDI			14.66	%			131,809				131,229				Sep-2019
									3,582,512				578,615
Total									16,546,239				8,502,640
Current									2,353,182				1,056,353
Non-current									14,193,057				7,446,287

 

(i)

Loans and borrowings are guaranteed by promissory notes and endorsements of the Company and controlling shareholders, besides other guarantees, such as: (i) credit rights originated from the expansion contracts of the logistic segment and gas distribution (BNDES), (ii) underlying assets (property, plant and equipment and intangible assets) being financed (FINAME) in an amount of R$ 3,290,251 (R$ 1,738,661 on December 31, 2014);

 

(ii)

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

 

(iii)

As at June 30, 2015, unless otherwise indicated.

 

Debentures

 

On April 29, 2015, Rumo concluded the placement of the third tranche of non-convertible debentures, indivisible, at a par value totaling R$ 1,427,172. The maturity of which is April, 2018.

 

Changes in loans, borrowings and debentures:

 

At December 31, 2014			8,502,640
Acquisition			2,382,655
Monetary and exchange variations			1,363,982
Payment			(2,354,254	)
Business combination			6,639,223
Other			11,993
At June 30, 2015			16,546,239

 

Covenants

 

The Company and its subsidiaries are subject to certain restrictive financial covenants set forth in existing loans, financing and debentures agreements in relation to certain financial and non-financial indicators.

 

Financial covenants are required to be calculated on an annual basis, at the end of each fiscal year.

 

As at June 30, 2015, Cosan, its subsidiaries and jointly-controlled entities were in compliance with all financial covenants.

 

15

Leases

 

Finance lease liabilities

 

Finance lease liabilities are payable as follows:

 

		Less than one year				Between one and five years				More than five years				Total
Future minimum
lease payments			689,161				1,213,051				528,555				2,430,767
Interests			(245,728	)			(104,999	)			(286,280	)			(637,007	)
Present value of
minimum lease payments			443,433				1,108,052				242,275				1,793,760
Current															443,433
Non-current															1,350,327

 

Leases have various expiration dates, the last maturing in June 2022. The amounts are updated annually by Brazilian market price index (Índice Geral de Preços do Mercado-IGPM) plus TJLP (Long-Term Interest Rate) or CDI.

 

Operating leases

 

i)

Leases as lessee

 

As of June 30, 2015, the future minimum lease payments under non-cancellable leases were agreements are as follows:

 

		June 30, 2015
		COMGÁS				Cosan Log
Future minimum
lease payments
Less than one year			3,436				17,298
Between one and five years			4,921				14,970
More than five years			—				3,224
			8,357				35,492
Amounts recognized in
profit or loss			(2,303	)			(2,121	)

 

COMGÁS rents properties through 15 lease contracts. The lease terms are for a period of one to six years, and the majority of lease agreements are renewable at the end of the lease period at market rates.

 

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

 

16

Leases and concessions

 

Rumo, through its subsidiary ALL, recognizes their expenses related to operating lease and concession agreements on a straight-line basis during the term of the concession period. The amount recognized in non-current liabilities refers to the amounts that have not been paid due to discussions in court about agreement conditions and/or portions allocated during the grace period.

 

The amount of leases and concessions payable refers to the updated concession amount, net of payments made up to the balance sheet date:

 

		Payables				Court Discussion				At June 30, 2015
Leases			39,848				1,904,332				1,944,180
Concessions			49,870				55,497				105,367
			89,718				1,959,829				2,049,547
Current											19,300
Non-current											2,030,247

 

Court Discussion

 

Rumo, through its subsidiary ALL, is challenging in court the economic and financial imbalance of the Lease and Concession Agreements.

 

In May 2005, the company filed a note in the 20^th Federal Court of Rio de Janeiro, questioning the economic and financial imbalance of the Lease and Concession Agreements, due to the high disbursement incurred by the Company for the payment of labor judicial proceedings and other costs involved, which are of the Rede Ferroviária Federal S.A responsibility.

 

ALL Malha Paulista required an specialized expertise in order to determine the new value for the lease and concession installments, as well as a review of the payment of due and falling due installments until the effective expertise inspection for determination of the adequate value. In July 2005, the request was granted. In September 2005, the request was revoked by the Federal Court of Rio de Janeiro. The action still has no judgment and awaits the conclusion of the expert examination. The value related to the lease installments was being deposited in court until September 2007, when the Company obtained a judicial authorization to replace the judicial deposits for a banking guarantee letter. The management, supported by the opinion of its lawyers, assesses the chances of success as probable, but keeps the debt registry because it is a legal obligation.

 

 

ALL Malha Oeste is claiming the reestablishment of the economic-financial balance, as an imbalance was caused due to the cancellation of transportation agreements existing at the moment of the privatization representing a change in the regulatory environment and conditions set forth in the Notice of the Privatization - further growth forecasts that defined the value of the deal was not materialized. The lawsuit has been discussed by 16^th Federal Court of Rio de Janeiro. The amount related to overdue installments of the Company was having guaranteed by purchasing of government securities. In March 2008 the Company was authorized to replace the guarantee by bank pledge and, in May 2008 the Company redeemed the values. In December 2014 the court recognized the occurrence of economic and financial imbalance of contracts, remaining the definition of skill to determine the amount of imbalance and related aspects.

 

Management, supported by the opinion of its lawyers, assesses the chances of success as probable, but keeps the debt registry because it is a legal obligation not definitively decided yet in favor of the Company.

 

Judicial deposits on June 30, 2015 concerning the above claims total:

 

ALL Malha Paulista			115,365
ALL Malha Oeste			17,299
			132,664

 

17

Trade payables

 

		June 30, 2015				December 31, 2014
Natural gas suppliers			1,360,903				1,043,997
Judicial deposits(i)			(294,976	)			(294,976	)
Materials and service suppliers			950,821				363,438
			2,016,748				1,112,459
Current			2,015,638				1,112,459
Non-current			1,110				-

 

(i)

The contracts for the supply of natural gas have their composite price built in two parts: a part that is indexed according to a basket of fuel oil in the international market and readjusted quarterly; and another part that is readjusted annually based on the domestic and/or American inflation. The cost of gas is practiced in R$/m³, and the Bolivian gas is calculated at US$/MMBTU, with correction by the monthly exchange rate variation.

 

In February 25, 2014, COMGÁS obtained a preliminary injunction against Petrobrás, which assured the Company the right to provide a deposit of the controversial monthly value due to Petrobrás, corresponding to the difference in prices between (i) the price in the TCQ Contract for the Supply of Gas signed between COMGÁS and Petrobrás and (ii) the price under the Firm Contract signed between Petrobrás and Gás Brasiliano Distribuidora S.A. , whereas the obligation of equality assumed before the Petrobrás Group with the State Regulatory Agency - ARSESP. Initially, the security was provided by bank deposits which, subsequently, after the preliminary injunction was granted by the STJ in November 06, 2014, were replaced by a letter of guarantee issued by a first-tier financial institution.

 

Therefore, the controversial values calculated based on the supply of gas from January to September 2014 were assured in a court decision upon a judicial deposit and the controversial values calculated found as of the supply of gas from October 2014 to June 2015 began to be secured by a bank surety. The guaranteed value in the judicial deposit is R$ 294,976 and the guaranteed value through surety is of R$ 475,487.

 

18

Other taxes payable

 

		June 30, 2015				December 31, 2014
Tax Amnesty and
Refinancing Program - REFIS(i)			560,661				524,703
ICMS - State VAT			85,785				67,777
COFINS - Revenue tax			20,642				18,702
INSS - Social security			5,222				2,739
PIS - Revenue tax			4,460				2,511
Other			25,521				25,874
			702,291				642,306
Current			170,336				307,741
Non-current			531,955				334,565

 

(i)

Comprises mainly refinancing of federal taxes liability related to ExxonMobil Brazil Holdings BV ("ExxonMobil").

 

19

Income tax and social contribution

 

a)

Reconciliation of income and social contribution tax expenses

 

		April 1, 2015 to				January 1, 2015 to				April 1, 2014 to				January 1, 2014 to
		June 30, 2015				June 30, 2015				June 30, 2014				June 30, 2014
Profit before taxes			232,007				178,042				165,518				514,264
Income tax and social
contribution at nominal rate (34%)			(78,882	)			(60,535	)			(56,276	)			(174,850	)
Adjustments to reconcile
nominal to effective tax rate
Equity method investments
(non-taxable income)			31,256				83,323				55,873				131,285
Differences in tax rates on entities under
Brazilian presumed profits tax regime			4,784				11,144				24,354				20,606
Tax profit of the activity (operating income)			9,096				9,096				—				—
Non-deductible expenses
(donations, gifts, etc.)			1,044				(11,219	)			(1,818	)			(3,535	)
Amortized goodwill			464				464				—				—
Judicial demand related to income tax			—				—				—				13,839
Interest on capital (net received)			—				(6,120	)			—				(6,970	)
Stock options			(996	)			(1,992	)			(871	)			(1,743	)
Differences in tax rates on
earnings / losses of overseas companies			(19,727	)			3,647				(2,761	)			(16,794	)
Tax losses carryfoward not recorded			(27,348	)			(27,422	)			(732	)			(1,406	)
Other			(2,691	)			(3,696	)			47				(2,177	)
Income tax and social contribution
benefit (expense) - current and deferred			(83,000	)			(3,309	)			17,816				(41,745	)
Effective rate - %			35.77				1.86				-10.76				8.12

 

b)

Deferred income tax assets and liabilities

 

		June 30, 2015																December 31, 2014
		Basis				Income taxes (25%)				Social contribution (9%)				Total income taxes (34%)				Total income taxes (34%)
Tax loss carry forwards
Income tax loss carry forwards			6,082,034				1,520,509				—				1,520,509				319,168
Social contribution tax loss carry forwards			6,116,638				—				550,497				550,497				116,578
Temporary differences
Foreign currency losses			1,612,387				403,097				145,115				548,212				303,488
Tax deductible goodwill			695,331				173,833				62,580				236,413				298,102
Provision for judicial demands			770,799				192,700				69,372				262,072				183,714
Allowance for doubtful accounts			334,636				83,659				30,117				113,776				53,385
Profit sharing			54,342				13,585				4,891				18,476				11,345
Expenses tax deferred			175,859				43,965				15,827				59,792				—
(-) Credits without estimated realization			(3,676,806	)			(919,201	)			(330,913	)			(1,250,114	)			—
Unrealized gains on derivatives instruments			(743,607	)			(185,902	)			(66,925	)			(252,827	)			(126,351	)
Unrealized gain on sale of investments			(35,653	)			(8,913	)			(3,209	)			(12,122	)			(18,772	)

 

 

Impairment			954,347				238,587				85,891				324,478				—
Other temporary differences			334,747				83,687				30,127				113,814				(33,391	)
Property, plant and equipment			(148,816	)			(37,204	)			(13,393	)			(50,597	)			(41,669	)
Gain on formation of joint ventures			(3,338,342	)			(834,586	)			(300,451	)			(1,135,037	)			(1,135,036	)
Unrealized gains on investment properties			(2,429,828	)			(48,597	)			(26,242	)			(74,839	)			(74,801	)
Assets held for sale			(42,729	)			(855	)			(461	)			(1,316	)			(773	)
Concession contract			46,468				11,617				4,182				15,799				15,057
Regulatory asset			242,654				60,664				21,839				82,503				82,503
Gains or losses on actuarial liabilities			267,067				66,767				24,036				90,803				87,594
Business combination - Property,
plant and equipment			830,224				207,556				74,720				282,276				(36,594	)
Business combination - Intangible assets			(11,398,677	)			(2,849,669	)			(1,025,881	)			(3,875,550	)			(1,390,752	)
Business combination - Other
fair value adjustments			(135,842	)			(33,961	)			(12,226	)			(46,187	)			(24,513	)
Other			(200,051	)			(50,013	)			(18,006	)			(68,019	)			(113,392	)
Total net liability							(1,868,675	)			(678,513	)			(2,547,188	)			(1,525,110	)
Deferred income tax - Assets															1,602,619				214,164
Deferred income tax - Liabilities															(4,149,807	)			(1,739,274	)
Total net deferred taxes															(2,547,188	)			(1,525,110	)

 

c)

Changes in deferred income taxes, net:

 

At December 31, 2014 – Net deferred tax liability			(1,525,110	)
Recorded through income			117,382
Recorded through other comprehensive income			(2,073	)
Business combinations (Note 3)			(1,135,203	)
Other			(2,184	)
At June 30, 2015 - Net deferred tax liability			(2,547,188	)

 

20

Provision for legal proceedings

 

		Provision for legal proceedings								Judicial deposits
		June 30, 2015				December 31, 2014				June 30, 2015				December 31, 2014
Tax			440,935				343,038				352,210				319,444
Civil			254,204				139,268				210,499				48,445
Labor			553,293				175,473				194,322				50,496
			1,248,432				657,779				757,031				418,385

 

 

Changes in provision for legal proceedings:

 

		Tax				Civil				Labor				Total
At December 31, 2014			343,038				139,268				175,473				657,779
Accruals			10,622				10,086				23,599				44,307
Write-off / Reversals			(2,788	)			(13,040	)			(34,765	)			(50,593	)
Transfers			6,850				(6,850	)			—				—
Business combinations (Note 3)			70,124				105,153				378,992				554,269
Indexation and interest charges			13,089				19,587				9,994				42,670
At June 30, 2015			440,935				254,204				553,293				1,248,432

 

Judicial claims deemed to be probable losses, fully accrued

 

a)

Tax claims

 

		June 30, 2015				December 31, 2014
Compensation with FINSOCIAL			247,874				241,739
INSS - Social security			54,971				47,449
State VAT - ICMS credits			77,438				24,231
Tax on services			9,273				—
PIS e COFINS			6,535				—
Other			44,844				29,619
			440,935				343,038

 

b)

Civil and environmental

 

The Company and its subsidiaries are party in a number of civil and legal claims related to (i) indemnification for material and moral damages, (ii) public civil claims related to burning of sugarcane stubble, and (iii) environmental matters.

 

The Company and its subsidiaries are also defendants in a number of labor claims filed by former employees and service providers challenging, among other things, unpaid overtime, night shift premiums and risk premiums, employment guarantees, and the reimbursement of withholdings from payroll such as social contributions and trade union charges.

 

Judicial claims deemed as possible losses, and therefore not accrued

 

a)

Tax claims

 

		June 30, 2015				December 31, 2014
ICMS - State VAT			1,775,736				1,572,934
Foreign financial operation(i)			871,847				—
PIS and COFINS - Revenue taxes			865,424				680,065
Federal income taxes			757,732				751,495
IRRF - Withholding tax			757,400				656,087
INSS - Social security and other			596,448				530,223
IPI - Excise tax credit - NT			475,014				441,707
Goodwill ALL S.A.(ii)			426,763				—
Penalties related to tax positions			174,075				—
Compensation with IPI - IN 67/98			121,016				118,865
MP 470 - Tax installments(iii)			97,439				—
Intermodal			73,605				—
Stock option			56,099				—
Other			910,801				648,850
			7,959,399				5,400,226

 

(i)

The Brazilian Tax Authority assessed ALL Malha Sul arguing that the interest expense on financial investments abroad and loans would not be deductible. In addition, notice of violation was issued questioning the non-taxation by PIS and COFINS on hedge transactions. The chance of loss is considered possible, since: a) the financial investments were made with countries on which Brazil has treaty providing for the non-taxation; b) the incidence of PIS and COFINS on hedging transactions was rejected by decree dated 2005. The amount on June 30, 2015 is R$ 871,847, already reduced by R$ 400,665 based on partially favorable decisions rendered so far which is still subject to appeal by the Tax Authorities.

 

(ii)

Tax assessments issued by the Brazilian Tax Authority in 2011 and 2013 against ALL Holding concerning: a) Amortization expense disallowance based on future profitability, as well as financial expenses; b) non-taxation of supposed capital gain on disposal of equity interest in a company of the same group. The chance of loss is considered possible and the amount at June 30, 2015 is R$ 426,763, already reduced by R$ 315,047 based on favorable decisions rendered to date at the administrative level, which is still subject to appeal by Tax Authorities.

 

(iii)

The Brazilian Tax Authority partially rejected the installment requests for federal tax debts made by ALL Malha Sul and the ALL Intermodal, arguing that the tax losses offered by the companies were not sufficient to discharge of their debts. The probability of loss is considered possible, since the losses pointed existed and were available for such use. The updated amount of loss on June 30, 2015 is R$ 97,439.

 

 

b)

Civil and labor

 

The civil and labor claims for which unfavorable outcomes are deemed possible are as follow:

 

		June 30, 2015				December 31, 2014
Civil			1,067,319				1,118,151
Labor			737,999				391,992
			1,805,318				1,510,143

 

21	Preferred shareholders payable in subsidiaries

 

On June 27, 2014, Cosan S.A. transferred to a newly-incorporated wholly-owned subsidiary, Cosan Investimentos e Participações S.A., its shares in Raízen Energia S.A. and Raízen Combustíveis S.A. in addition to a debenture Cosan S.A. had issued and placed with Banco Bradesco S.A.. The net assets transferred at that date totaled R$ 1,979,519.

 

Concurrently, also on June 27, 2014, Cosan S.A. executed an Investment Agreement with Fundo de Investimentos em Participações Multisetorial Plus II (“FIP Multisetorial”) and with Razac Fundo de Investimentos em Participações (“FIP Razac”). FIP Multisetorial and FIP Razac are funds owned by Banco Bradesco BBI S.A and Citibank Distribuidora de Títulos e Valores Mobiliários S.A., respectively. Pursuant to this agreement, FIP Multisetorial and FIP Razac subscribed and paid-in R$ 2,000,000 of non-voting preferred shares issued by Cosan Investimentos e Participações S.A.. These preferred shares will be remunerated based on a formula designed to provide a return over 15 year’s equivalent to the CDI rate. In the event the accumulated remuneration falls short of the minimum amount prescribed in the formula, as at April 30, 2021, the preferred shareholders will have a put against Cosan S.A. for an amount equivalent to the value of the initial investment plus interest based on the CDI less any CDI-indexed dividends paid.

 

The investment in the net assets of the joint ventures, Raízen Energia S.A. and Raízen Combustíveis S.A., continue to be accounted for on the equity method without affecting the Company’s 50% interest in the results of each venture. The transaction underlying the Investment Agreement has been classified as a non-current financial liability in Cosan´s and Cosan S.A.´s balance sheet and the statement of profit or loss reflects the CDI equivalent dividends classified as financial expenses.

 

22	Stockholders’ Equity

 

a)

Share capital

 

As of June 30, 2015, Cosan Limited’s share capital is composed of the following:

 

Shareholders - Common shares		Class A and / or BDRs				%				Class B1 shares				%
Queluz Holding Limited			7,758,116				4.45				66,321,766				68.85
Usina Costa Pinto S.A. Açúcar e Álcool			—				—				30,010,278				31.15
Gávea Funds			21,167,463				12.14				—				—
MSOR Participações S.A.			1,811,250				1.04				—				—
Usina Bom Jesus S.A.			255,000				0.15				—				—
FIA Rio das Pedras			16,000				0.01				—				—
Other			137,351,010				78.78				—				—
Total shares outstanding			168,358,839				96.56				96,332,044				100.00
Treasury shares			5,996,502				3.44				—				—
Total			174,355,341				100.00				96,332,044				100.00

 

There have been no changes to the number of shares issued during the periods presented.

 

Class B1 shares entitle the holder to 10 votes per share whereas Class A and BDRs’ shares are entitled to one vote per share.

 

b)

Treasury shares

 

The Company holds 5,996,502 Class A treasury shares as of June 30, 2015 and December 31, 2014 with a market value of US$ 6.16 per share at June 30, 2015 (US$ 7.75 per share at December 31, 2014).

 

c)

Other comprehensive (loss) income

 

		December 31, 2014				Comprehensive (loss) income				June 30, 2015
Foreign currency translation differences			(298,446	)			(67,037	)			(365,483	)
Gain (loss) on cash flow
hedge in joint ventures and subsidiaries			(10,574	)			56,154				45,580
Revaluation of investment properties
reclassified from property, plant and equipment			190,735				—				190,735
Actuarial gain on defined benefit plan			47,104				—				47,104
Changes in fair value of
available for sale securities, net			(1,467	)			3,299				1,832
Total			(72,648	)			(7,584	)			(80,232	)
Attributable to:
Owners of the Company			(165,618	)			(25,242	)			(190,860	)
Non-controlling interests			92,970				17,658				110,628

 

 

		December 31, 2013				Comprehensive  (loss) income				June 30, 2014
Foreign currency translation differences			(223,038	)			3,164				(219,874	)
Gain (loss) on cash
flow hedge in joint ventures and subsidiaries			43,384				(27,311	)			16,073
Revaluation of investment properties
reclassified from property, plant and equipment			190,735				—				190,735
Actuarial gain (loss) on defined benefit plan			16,092				(935	)			15,157
Changes in fair value of
available for sale securities, net			(7,480	)			1,681				(5,799	)
Total			19,693				(23,401	)			(3,708	)
Attributable to:
Owners of the Company			(84,887	)			(9,336	)			(94,223	)
Non-controlling interests			104,580				(14,065	)			90,515

 

23	Earnings per share

 

		April 1, 2015 to				January 1, 2015 to				April 1, 2014 to				January 1, 2014 to
		June 30, 2015				June 30, 2015				June 30, 2014				June 30, 2014
Numerator
Profit from continuing operations
attributable to owners of the Parent
Basic			7,123				16,663				38,748				179,553
Dilutive effect of subsidiary's
stock option plan			(71	)			(7	)			(8,446	)			(29,217	)
Dilutive effect of put option			(15,601	)			(15,601	)			(15,601	)			(15,601	)
Diluted			(8,549	)			1,055				14,701				134,735
Loss from discontinued operations
attributable to owners of the Parent
Basic			(595	)			(595	)			—				—
Dilutive effect of subsidiary's
stock option plan			—				—				—				—
Diluted			(595	)			(595	)			—				—
Denominator
Weighted average number
of shares outstanding			264,690,883				264,690,883				264,690,883				264,690,883
Basic earnings per share
Continuing operations		R$	0.03			R$	0.06			R$	0.15			R$	0.68
Discontinued operations		R$	(0.00)			R$	0.00			R$	0.00			R$	0.00
		R$	0.03			R$	0.06			R$	0.15			R$	0.68
Diluted (loss) earnings per share
Continuing operations		R$	(0.03)			R$	0.00			R$	0.06			R$	0.51
Discontinued operations		R$	(0.00)			R$	(0.00)			R$	0.00			R$	0.00
		R$	(0.03)			R$	0.00			R$	0.06			R$	0.51

 

 

24	Financial results, net

 

		April 1, 2015 to				January 1, 2015 to				April 1, 2014 to				January 1, 2014 to
		June 30, 2015				June 30, 2015				June 30, 2014				June 30, 2014
Financial expense
Interest on loans			(375,532	)			(531,043	)			(200,087	)			(385,129	)
Interest expense			(104,883	)			(183,963	)			(32,448	)			(3,114	)
Indexation expenses			(76,427	)			(112,268	)			(13,444	)			(30,630	)
Bank fees			(70,177	)			(91,357	)			(76,015	)			(88,586	)
Leases			(22,217	)			(22,217	)			—				—
			(649,236	)			(940,848	)			(321,994	)			(507,459	)
Financial income
Income from short term investments			92,968				141,844				34,176				64,391
Interest income			16,554				31,935				35,186				51,393
Indexation income			12,434				17,968				5,058				6,987
			121,956				191,747				74,420				122,771
Foreign exchange effects, net			98,078				(493,756	)			20,822				96,559
Derivative income (losses)
Foreign exchange and
interest rate derivatives			(179,704	)			375,528				(12,106	)			(73,187	)
			(179,704	)			375,528				(12,106	)			(73,187	)
			(608,906	)			(867,329	)			(238,858	)			(361,316	)

 

25	Other income (expenses), net

 

		April 1, 2015 to				January 1, 2015 to				April 1, 2014 to				January 1, 2014 to
		June 30, 2015				June 30, 2015				June 30, 2014				June 30, 2014
Gain on pre-existing relationship before negotiations for the business combinations			29,838				29,838				—				—
Changes in the fair value of investment properties			8,842				23,162				67,904				44,983
Rental income			1,958				2,129				181				348
Loss on disposal of non-current assets			(1,377	)			(2,659	)			(2,754	)			(4,806	)
Provisions for legal proceedings			(10,024	)			(19,224	)			(7,790	)			(26,230	)
Cost related to internal organization and prospective acquisitions(i)			(2,816	)			(106,660	)			(124,212	)			(124,212	)
Other			11,498				12,010				474				10,928
			37,919				(61,404	)			(66,197	)			(98,989	)

 

(i)

Refers to costs incurred by the Company with lawyers, consultants, business advisors and other related services for certain reorganizations and prospective acquisitions.

 

 

26	Financial instruments

 

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

 

		June 30, 2015				December 31, 2014
Assets
Fair value through profit or loss
Cash and cash equivalents			2,531,947				1,649,340
Investment securities			874,242				149,735
Derivate financial instruments			1,567,154				890,578
			4,973,343				2,689,653
Loans and receivables
Trade receivables			1,106,559				1,346,101
Related parties			258,566				250,884
Dividends receivable			47,352				36,130
Other receivables			420,221				440,180
			1,832,698				2,073,295
Total			6,806,041				4,762,948
Liabilities
Liabilities amortized cost
Loans, borrowings and debentures			12,398,899				5,991,887
Leases			1,793,760				—
Trade payables			2,016,748				1,112,459
Related parties			116,288				137,441
Contingent consideration - Earn out			128,616				186,649
Dividends payable			18,363				33,354
Tax installments - REFIS			560,661				524,703
Preferred shareholders payable in subsidiaries			2,050,181				1,926,888
			19,083,516				9,913,381
Fair value through profit or loss
Loans, borrowings and debentures			4,147,340				2,510,753
Advances on real state credits			320,410				—
Pension and post-employment benefits			312,047				301,850
Derivative financial instruments			647,724				333,435
			5,427,521				3,146,038
Total			24,511,037				13,059,419

 

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

 

 

Risk management structure

 

As at June 30, 2015 and December 31, 2014, the fair values relating to transactions involving derivative financial instruments to protect the Company’s risk exposure were using observable inputs such as quoted prices in active markets, or discounted cash flows based on market curves, and are presented below:

 

		Notional								Fair value
		June 30, 2015				December 31, 2014				June 30, 2015				December 31, 2014				P&L(i)
Exchange rate derivatives
Swap agreements			176,557				828,443				(18,080	)			330,099				4,862
Forward agreements			1,841,777				178,127				(102,875	)			21,250				(110,014	)
Options			—				—				—				(8,842	)			217,992
			2,018,334				1,006,570				(120,955	)			342,507				112,840
Interest rate and exchange rate risk
Swap agreements (interest rate)			900,634				221,560				(43,532	)			(40,330	)			181,219
Cross currency interest rate swaps			2,894,397				1,659,904				1,083,917				254,966				304,700
			3,795,031				1,881,464				1,040,385				214,636				485,919
Total financial instruments											919,430				557,143				598,759
Assets											1,567,154				890,578
Liabilities											(647,724	)			(333,435	)

 

(i)

The Company recorded in the statement of profit or loss and other comprehensive income, the net effect of the Senior Notes 2023 designated for hedge accounting. Therefore, the amount of R$ 223,231 is accounted for as Financial Expense.

 

Credit risk

 

COMGÁS has no concentration of credit risk due to its broad customer base.

 

Credit risk is managed through specific rules regarding client acceptance, including credit ratings and limits for customer exposure, including the requirement for a letter of credit from a major bank and obtaining actual warranties when given credit, when applicable. Management believes that credit risk is adequately managed through its policy of allowances for doubtful accounts.

 

The Company and its subsidiaries may acquire exchange rate and interest rate derivative instruments in the BM&FBovespa, OTC, registered CETIP or the international markets, with several banks, within the limits established in the Treasury Policy for each bank.

 

 

The credit risk on cash and cash equivalents, bank deposits in national and foreign financial institutions are determined using the rating instruments accepted by the market as follows:

 

		June 30, 2015				December 31, 2014
Cash and cash equivalents			2,531,947				1,649,340
Investment securities			874,242				149,735
Trade receivables			1,106,559				1,346,101
Derivative financial instruments			1,567,154				890,578
Receivables from related parties			258,566				250,884
Other trade receivables			420,221				440,180
Dividends receivable			47,352				36,130
			6,806,041				4,762,948

 

a)

Impairment

 

The Company tests annually their financial assets not classified as at fair value through profit or loss, including an interest in an equity-accounted investee, are assessed at each reporting date to determine whether there is objective evidence of impairment.

 

b)

Guarantees

 

Cosan’s policy is to provide financial guarantees only to subsidiaries (Note 14).

 

Liquidity risk

 

Liquidity risk is the risk that the Company and its subsidiaries will not be able to meet its obligations associated with its financial liabilities that are settled with cash payments or other financial assets. The Company and its subsidiaries manage liquidity risk by ensuring, as much as possible, the availability of sufficient liquidity to meet its obligations due, under normal and stress situations, without causing unacceptable losses or risking the Company’s and its subsidiaries reputation.

 

The Company’s non-derivative financial liabilities classified by due date (contracted undiscounted cash flows basis) are as follows:

 

		June 30, 2015																				December 31, 2014
		Up to 1 year				1 - 2 years				3 - 5 years				More than 5 years				Total				Total
Loans, borrowings and debentures			(3,142,112	)			(2,410,048	)			(7,687,950	)			(7,913,047	)			(21,153,157	)			(14,988,841	)
Trade payables			(2,015,638	)			(1,110	)			—				—				(2,016,748	)			(1,034,282	)
REFIS			(21,929	)			(21,027	)			(39,908	)			(451,425	)			(534,289	)			(524,704	)
			(5,179,679	)			(2,432,185	)			(7,727,858	)			(8,364,472	)			(23,704,194	)			(16,547,827	)

 

Market risk

 

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

 

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

 

 

a)

Foreign exchange risk

 

As at June 30, 2015 and December 31, 2014, the Company and its subsidiaries had the following net exposure to the exchange rate variations on assets and liabilities denominated in U.S. Dollars and Brazilian Reais:

 

		June 30, 2015								December 31, 2014
			R$				USD				R$				USD
Cash and cash equivalents			72,036				23,218				40,782				15,354
Trade receivables			6,934				2,235				4,708				1,772
Trade payable			(25,256	)			(8,140	)			—				—
Loans, borrowings and debentures			(5,667,153	)			(1,780,248	)			(4,337,999	)			(1,633,160	)
Contingent consideration - Earn out			(31,655	)			(10,203	)			(47,340	)			(17,822	)
Derivative financial instruments			4,713,056				1,903,045				9,235,274				3,745,648
Foreign exchange exposure, net			(932,038	)			129,907				4,895,425				2,111,792

                               

i.

Sensitivity analysis on changes in foreign exchange rates

 

The probable scenario was defined based on the U.S. Dollar market rates as at June 30, 2015, which determines the fair values of the derivatives at that date. Stressed scenarios (positive and negative effects, before tax effects) were defined based on changes of a 25% and 50% to the U.S. Dollar exchange rates used in the probable scenario.

 

Based on the financial instruments denominated in U.S. Dollars at June 30, 2015 the Company performed a sensitivity analysis by increasing and decreasing the exchange rate for R$/US$ by 25% and 50%. The probable scenario considers the estimated exchange rates at the due date of the transactions for the companies with functional currency Real (positive and negative, before tax effects), as follows:

 

				Exchange rate sensitivity analysis (R$/US$)
									Scenario
					June 30, 2015				Probable				25%				50%				-25%				-50%
At June 30, 2015					3.1026				3.1026				3.8783				4.6539				2.3270				1.5513

 

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

 

					Variation scenario
Instrument		Risk factor			Probable				25%				50%				-25%				-50%
Cash and cash equivalents		USD fluctuation			72,036				17,791				35,580				(17,791	)			(35,580	)
Trade receivables in foreign currency		USD fluctuation			6,934				1,734				3,467				(1,734	)			(3,467	)
Exchange rate derivatives		USD fluctuation			2,137,306				492,251				984,490				(492,251	)			(984,490	)
Exchange rate and interest derivatives		USD and CDI fluctuation			2,575,750				856,857				1,681,109				(791,646	)			(1,615,899	)
Trade payable		USD fluctuation			(25,256	)			(6,314	)			(12,628	)			6,314				12,628
Loans, borrowings and debentures		USD fluctuation			(5,667,153	)			(1,317,063	)			(2,634,115	)			1,317,063				2,634,115
Contingent consideration - Earn out		USD fluctuation			(31,655	)			(7,914	)			(15,828	)			(7,914	)			(15,828	)
Impacts on profit or loss					(932,038	)			37,342				42,075				12,041				(8,521	)

 

 

b)

Interest rate risk

 

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

 

i.

Sensitivity analysis on changes in interest rates

 

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

 

		June 30, 2015
Exposure interest rate			Balance				Probable(i)				25%				50%				-25%				-50%
Cash and cash equivalents			375,987				427,272				12,821				25,642				(12,821	)			(25,642	)
Investment securities			534,429				607,326				18,224				36,448				(18,224	)			(36,448	)
Loans, borrowings and debentures			1,261,240				1,170,245				(357,412	)			(714,824	)			357,412				714,824
Derivative financial instruments			(65,435	)			(67,902	)			87,199				189,328				(72,908	)			(134,975	)
Advances on real estate credits			(320,410	)			(341,237	)			(10,926	)			(21,852	)			10,926				21,852
Leases			(1,793,760	)			(2,038,429	)			(61,167	)			(122,334	)			61,167				122,334
Impacts on profit or loss							(242,725	)			(311,261	)			(607,592	)			325,552				661,945

 

(i)

The CDI and TJLP indexes considered of 13.64% and 6.00%, respectively, were obtained from information available in the market.

 

Financial instruments fair value

 

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

 

		Carrying amount								Fair value(i)
		June 30, 2015				December 31, 2014				June 30, 2015				December 31, 2014
Assets
Cash and cash equivalents			2,531,947				1,649,340				2,531,947				1,649,340
Investment securities			874,242				149,735				874,242				149,735
Trade receivables			1,106,559				1,346,101				1,106,559				1,346,101
Derivative financial instruments			1,567,154				890,578				1,567,154				890,578
Related parties			258,566				250,884				258,566				250,884
Other receivables			420,221				440,180				420,221				440,180
Dividends receivable			47,352				36,130				47,352				36,130
Total			6,806,041				4,762,948				6,806,041				4,762,948

 

 

Liabilities
Loans, borrowings and debentures			16,546,239				8,502,640				16,327,891				8,287,378
Advances on real estate credits			320,410				—				320,410				—
Derivative financial instruments			647,724				333,435				647,724				333,435
Trade payables			2,016,748				1,112,459				2,016,748				1,112,459
Payables to related parties			116,288				137,441				116,288				137,441
Lease			1,793,760				—				1,793,760				—
Pension and post-employment benefits			312,047				301,850				312,047				301,850
Preferred shareholders payable in subsidiaries			2,050,181				1,926,888				2,050,181				1,926,888
Tax installments - REFIS			560,661				524,703				560,661				524,703
Contingent consideration - Earn out			128,616				186,649				128,616				186,649
Dividends payable			18,363				33,354				18,363				33,354
Total			24,511,037				13,059,419				24,292,689				12,844,157

 

(i)

If these loans and borrowings were recorded at fair value, they would be considered as “Level 2” in the fair value hierarchy presented on Note 27.

 

Hedge accounting – Fair value

 

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

 

		Debt				Derivative				Total
At December 31, 2014			1,352,796				(183,086	)			1,169,710
Interest amortization			(40,330	)			(34,305	)			(74,635	)
Fair value			299,401				(223,231	)			76,170
At June 30, 2015			1,611,867				(440,622	)			1,171,245

 

27	Fair value hierarchy

 

Assets and liabilities
measured at fair value		Level 1				Level 2				Total
At June 30, 2015
Cash and cash equivalents			—				2,531,947				2,531,947
Derivative financial assets			—				1,567,154				1,567,154
Derivative financial liabilities			—				(647,724	)			(647,724	)
Loans, borrowings and debentures			—				(4,147,340	)			(4,147,340	)
Advances on real state credits			—				(320,410	)			(320,410	)
Investments securities			—				874,242				874,242
Pension and post-employment benefits			—				(312,047	)			(312,047	)
Assets held for sale			—				42,728				42,728
Investment properties			—				2,643,211				2,643,211
Total			—				2,231,761				2,231,761

 

 

At December 31, 2014
Derivative financial assets			—				890,578				890,578
Derivative financial liabilities			—				333,434				333,434
Loans, borrowings and debentures			—				2,806,097				2,806,097
Contingent consideration - Earn out			—				186,649				186,649
Pension plan assets			313,955				49,061				363,016
Securities			—				149,735				149,735
Assets held for sale			—				25,089				25,089
Preferred shareholders
payable in subsidiaries			—				1,926,888				1,926,888
Investment properties			—				2,641,978				2,641,978
Total			313,955				9,009,509				9,323,464

 

28	Pension and post-employment benefit plans

 

		June 30, 2015				December 31, 2014
Futura			23,770				23,048
Futura II			278				240
COMGÁS			287,999				278,562
Total			312,047				301,850

 

Pension plans

 

Defined benefit

 

Cosan Lubrificantes e Especialidades S.A. has a non-contributory defined benefit pension plan (Futura, formerly Previd Exxon) for certain employees upon retirement. This plan was amended to close it to new entrants and approved by the relevant authorities on May 5, 2011. No new employees are eligible to participate on the plan, contributions ceased, and participants are guaranteed a benefit proportionate to their accumulated entitlement as at March 31, 2011. During the three and six month periods ended June 30, 2015, the amounts of contributions totaled R$ 843 and R$ 1,879, respectively (R$ 2,368 and R$ 4,645 for the three and six month periods ended June 30, 2014).

 

Defined contribution

 

Since June 1, 2011, the Company and its subsidiaries have sponsored a defined contribution plan for all employees (Futura II). The Company does not have a legal or constructive obligation to pay further contributions if the fund does not have sufficient assets to pay all of the benefits owed. During the three and six month periods ended June 30, 2015, the amounts of contributions totaled R$ 378 and R$ 809, respectively (R$ 436 and R$ 1,009 for the three and six month period ended June 30, 2014).

 

COMGÁS offers a supplementary retirement plan, through a defined contribution Free Benefit Generating Plan (“PGBL”). During the three and six month periods ended June 30, 2015, employers’ contributions to the plan totaled R$4,577 and R$ 8,102, respectively (R$ 8,187 and R$ 16,373 for the three and six month periods ended June 30, 2014).

 

 

29	Share-based payment

 

Cosan S.A.

 

At the annual and extraordinary general shareholders’ meeting held on July 29, 2011, the guidelines for the outlining and structuring of the stock option compensation plan for Cosan S.A.’s executives and employees were approved, authorizing the issue of up to 5% of shares of Cosan S.A.’s total capital. This stock option plan was created to attract and retain executives and key employees, offering them the opportunity to become Cosan S.A.’s shareholders.

 

On August 18, 2011, Cosan S.A.’s board of directors approved the total number of stock option awards of 12,000,000 shares to be issued or treasury shares held by Cosan S.A., corresponding to 2.41% of the share capital at that time. On the same date the eligible executives were informed about the terms and conditions of the stock-option plan.

 

The numbers of options in the six month periods ended June 30, 2015 is 8,912,000 with weighted average exercise price R$ 30.09. During the six month periods ended June 30, 2015, there was no change in the plan options.

 

Cosan Log

 

With the acquisition of ALL by the Rumo, the stock option plan were canceled and assumed by the Rumo. Therefore, the fair value stock options were recalculated on the merger date on April 1, 2015.

 

The total of 1,478,659 options that were assumed by the Rumo is R$ 0.18 per fair value option, calculated by the binomial method. The average exercise price is R$ 5.03. This measure will generate a total expenditure relating to the plan of R$ 264.

 

30	Discontinued operations

 

Discontinued operations represent the results of ALL's subsidiaries in Argentina in the final discontinuity stage. The results of discontinued operations for the quarter ended June 30, 2015 are as follows:

 

		April 1, 2015 to
		June 30, 2015
Selling, general and administrative expenses			(503	)
Financial results			(3,072	)
Loss before taxes			(3,575	)
Income tax (expense) benefit			(7	)
Loss from discontinued operations, net of tax			(3,582	)

 

The operating cash flow from discontinued operations amounted to an outflow of R$ 478.

 

***

 

 

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.

 

			COSAN LIMITED
Date:	August 14, 2015		By:	/s/ Marcelo Eduardo Martins
				Name:	Marcelo Eduardo Martins
				Title:	Chief Financial Officer and Investor Relations Officer

 

 

 

 

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