Report of Foreign Issuer (6-k)

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report of Foreign Issuer

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

of the Securities Exchange Act of 1934

For the month of May, 2016

Commission File Number: 1-33659

COSAN LIMITED

(Translation of registrant’s name into English)

Av. Juscelino Kubitschek, 1327, – 4 ^th floor

São Paulo, SP 04543-000 Brazil

(Address of principal executive offices)

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


Form 20-F X		Form 40-F

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


Yes		No X

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


Yes		No X

COSAN LIMITED


Item
1.		Consolidated interim financial statements as at March 31, 2016 and independent auditors’ review report

Cosan Limited

Consolidated interim financial

statements as at March 31, 2016 and

independent auditors’ review report

Cosan Limited

Consolidated financial statements

March 31, 2016

Contents


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

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 March 31, 2016, which comprises the statement of financial position as of March 31, 2016 and the respective statements of profit or loss and comprehensive income (loss), changes in equity and cash flows for the three-month period then ended, including the footnotes.

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

Scope of review

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

Conclusion

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

São Paulo, May 12, 2016

KPMG Auditores Independentes

CRC 2SP014428/O-6

Rogério Hernandez Garcia

Contador CRC 1SP213431/O-5

Cosan Limited

Consolidated statements of financial position

(In thousands of Brazilian Reais - R$)


	Note	March 31, 2016		December 31, 2015 (Restated)
	Note	March 31, 2016		December 31, 2015 (Restated)
Assets
Cash and cash equivalents	5		3,209,652		3,505,824
Restricted cash			—		57,290
Marketable securities	6		549,694		749,698
Trade receivables	7		903,486		904,245
Derivative financial instruments	26		54,610		138,105
Inventories			654,074		656,901
Receivables from related parties	9		81,152		75,229
Income tax receivable			130,162		135,050
Other current tax receivable	8		213,680		311,892
Dividends receivable			146,730		12,064
Assets held for sale	12		217,515		149,938
Other current assets			132,910		138,995

Total current assets			6,293,665		6,835,231

Trade receivables	7		62,355		60,733
Restricted cash			181,875		200,893
Deferred tax assets	20		1,683,252		1,698,611
Receivables from related parties	9		235,665		221,345
Income tax receivable			253,838		274,597
Other non-current tax receivable	8		706,734		633,549
Judicial deposits	21		691,760		680,224
Derivative financial instruments	26		1,929,835		2,292,191
Other non-current assets			1,195,610		1,185,787
Investments in associates	10		180,702		184,376
Investments in joint ventures	11		8,266,574		8,237,190
Investment property	12		2,526,141		2,595,035
Property, plant and equipment	13		10,033,703		9,805,887
Intangible assets and goodwill	14		17,274,892		17,309,689

Total non-current assets			45,222,936		45,380,107

Total assets			51,516,601		52,215,338

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		March 31, 2016			December 31, 2015 (Restated)
	Note		March 31, 2016			December 31, 2015 (Restated)
Liabilities
Loans, borrowings and debentures		15		3,443,065			2,775,510
Leases		16		542,366			539,615
Advances on real estate credits				58,479			88,089
Derivative financial instruments		26		309,635			812
Trade payables		18		1,949,548			1,963,981
Employee benefits payable				199,864			256,279
Income tax payable				50,632			59,620
Other taxes payable		19		174,807			153,540
Leases on concessions		17		26,782			20,205
Dividends payable				36,108			39,934
Payables to related parties		9		242,961			204,080
Deferred revenue				14,167			110,517
Other financial liabilities				132,246			236,698
Other current liabilities				413,902			473,753

Total current liabilities				7,594,562			6,922,633

Loans, borrowings and debentures		15		14,991,399			16,053,693
Leases		16		1,188,325			1,202,086
Advances on real estate credits				207,356			196,917
Derivative financial instruments		26		689,694			741,686
Trade payables		18		865			1,031
Other taxes payable		19		47,646			51,327
Provision for legal proceedings		21		1,214,779			1,193,931
Leases on concessions		17		2,293,627			2,204,039
Post-employment benefits		27		349,414			344,447
Deferred tax liabilities		20		4,084,553			4,179,564
Preferred shareholders payable in subsidiaries				2,111,942			2,042,878
Deferred revenue				70,168			95,730
Other non-current liabilities				800,288			723,034

Total non-current liabilities				28,050,056			29,030,363

Total liabilities				35,644,618			35,952,996

Shareholders’ equity		22
Share capital				5,328			5,328
Additional paid-in capital				4,001,024			4,006,562
Accumulated other comprehensive loss				(474,885	)		(478,207	)
Retained earnings				2,556,875			2,425,567

Equity attributable to owners of the parent				6,088,342			5,959,250
Non-controlling interests				9,783,641			10,303,092

Total shareholders’ equity				15,871,983			16,262,342

Total liabilities and shareholders’ equity				51,516,601			52,215,338

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

Cosan Limited

Consolidated statements of profit or loss and other comprehensive income

For the quarters ended March 31, 2016 and 2015

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


	Note		March 31, 2016			March 31, 2015
	Note		March 31, 2016			March 31, 2015
Net sales				3,141,982			2,141,124
Cost of sales				(2,066,104	)		(1,591,340	)

Gross profit				1,075,878			549,784

Selling expenses				(236,830	)		(219,326	)
General and administrative expenses				(235,540	)		(179,812	)
Other income expense, net		25		(37,566	)		(99,324	)

Operating expense				(509,936	)		(498,462	)

Income before equity in earnings of investees and financial results				565,942			51,322

Equity in earnings of investees
Equity in earnings of associates		10		(1,558	)		(4,635	)
Equity in earnings of joint ventures		11		441,344			157,772

				439,786			153,137
Financial results		24
Finance expense				(876,738	)		(291,612	)
Finance income				250,773			69,791
Foreign exchange losses, net				525,354			(591,834	)
Derivatives				(704,142	)		555,232

				(804,753	)		(258,423	)
Profit (loss) before taxes				200,975			(53,964	)

Income tax (expense) benefit		20
Current				(101,495	)		(4,838	)
Deferred				81,275			84,529

				(20,220	)		79,691
Net profit for the period				180,755			25,727

Other comprehensive income (loss)		22
Items that may be reclassified to profit or loss:
Foreign currency translation effect				33,810			(80,686	)
(Loss) gain on cash flow hedge in joint ventures and subsidiary				(27,092	)		20,735
Changes in fair value of available for sale securities				(2,579	)		1,486

Cosan Limited

Consolidated statements of profit or loss and other comprehensive income

For the quarters ended March 31, 2016 and 2015

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


Taxes on items that may be reclassified to profit or loss		877	(505	)

Total other comprehensive income (loss), net of tax		5,016	(58,970	)

Total comprehensive income (loss)		185,771	(33,243	)

Net income attributable to:
Owners of the Parent		131,308	9,539
Non-controlling interests		49,447	16,188

Total comprehensive income (loss) attributable to:
Owners of the Parent		134,630	(50,459	)
Non-controlling interests		51,141	17,216

Basic earnings per share from continuing operations	23	R$0.50	R$0.04
Diluted earnings per share from continuing operations	23	R$0.44	(R$0.02	)

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

Cosan Limited

Consolidated statements of changes in equity

For the quarters ended March 31, 2016 and 2015

(In thousands of Brazilian Reais – R$)


			Capital reserve
	Share capital		Additional paid-in capital			Accumulated other comprehensive loss			Retained earnings			Equity attributable to owners of the parent			Non- controlling interests			Total equity
At January 1, 2016		5,328		4,006,562			(478,207	)		2,483,283			6,016,966			10,337,706			16,354,672
Adoption to IAS 41 effect—joint ventures (Note 2.2)		—		—			—			(57,716	)		(57,716	)		(34,614	)		(92,330	)

At January 1, 2016 (Restated)		5,328		4,006,562			(478,207	)		2,425,567			5,959,250			10,303,092			16,262,342

Net profit for the period		—		—			—			131,308			131,308			49,447			180,755
Other comprehensive income:
Foreign currency translation effects		—		—			20,610			—			20,610			13,200			33,810
Loss on cash flow hedge in joint ventures and subsidiary		—		—			(16,935	)		—			(16,935	)		(10,157	)		(27,092	)
Changes in fair value of available for sale securities		—		—			(353	)		—			(353	)		(1,349	)		(1,702	)

Total comprehensive income for the period		—		—			3,322			131,308			134,630			51,141			185,771

Contributions by and distributions to owners of the Parent:
Dividends—non-controlling interests		—		(7,091	)		—			—			(7,091	)		7,091			—
Share-based compensation—Subsidiaries		—		1,553			—			—			1,553			1,396			2,949
Dividends		—		—			—			—			—			(579,079	)		(579,079	)

Total contributions by and distributions to owners of the Parent		—		(5,538	)		—			—			(5,538	)		(570,592	)		(576,130	)

At March 31, 2016		5,328		4,001,024			(474,885	)		2,556,875			6,088,342			9,783,641			15,871,983

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

Cosan Limited

Consolidated statements of changes in equity

For the quarters ended March 31, 2016 and 2015

(In thousands of Brazilian Reais – R$)


			Capital reserve
	Share capital		Additional paid-in capital		Accumulated other comprehensive income			Retained earnings		Equity attributable to owners of the parent			Non- controlling interests			Total equity
At January 1, 2015		5,328		3,887,109		(165,618	)		2,117,739		5,844,558			7,644,749			13,489,307
Net profit for the period		—		—		—			9,539		9,539			16,188			25,727
Other comprehensive income:
Foreign currency translation effects		—		—		(72,952	)		—		(72,952	)		(7,734	)		(80,686	)
Gain on cash flow hedge in joint ventures and subsidiary		—		—		12,962			—		12,962			7,773			20,735
Changes in fair value of available for sale securities		—		—		(8	)		—		(8	)		989			981

Total comprehensive income for the period		—		—		(59,998	)		9,539		(50,459	)		17,216			(33,243	)

Contributions by and distributions to owners of the Parent:
Share-based compensation—Subsidiaries		—		1,831		—			—		1,831			1,098			2,929
Dividends		—		—		—			—		—			(75,000	)		(75,000	)

Total contributions by and distributions to owners of the Parent		—		1,831		—			—		1,831			(73,902	)		(72,071	)

At March 31, 2015		5,328		3,888,940		(225,616	)		2,127,278		5,795,930			7,588,063			13,383,993

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

Cosan Limited

Consolidated statements of cash flows

For the quarters ended March 31, 2016 and 2015

(In thousands of Brazilian Reais – R$)


	Note		March 31, 2016			March 31, 2015
Cash flows from operating activities
Profit (loss) before taxes				200,975			(53,964	)
Adjustments for:
Depreciation and amortization		13 / 14		401,332			165,391
Equity in earnings of associates		10		1,558			4,635
Equity in earnings of joint ventures		11		(441,344	)		(157,772	)
Loss on disposal of assets				4,841			1,281
Share-based compensation expense		9		2,949			2,930
Change in fair value of investment property		12 / 25		290			(14,320	)
Provisions for legal proceedings		25		21,197			9,200
Indexation charges, interest and exchange gains/losses, net				860,692			331,898
Other				3,308			20,502

				1,055,798			309,781
Decrease (increase) in assets/ (Decrease) Increase in liabilities:
Trade receivables				2,646			(8,280	)
Inventories				(6,276	)		33,468
Recoverable taxes				41,179			(34,796	)
Related parties				16,599			(46,693	)
Trade payables				(27,619	)		213,518
Other financial liabilities				(104,451	)		—
Employee benefits				(74,943	)		(54,012	)
Provisions for legal proceedings				(16,465	)		(312	)
Judicial deposits				(1,566	)		(955	)
Post-employment benefits				(6,284	)		(5,201	)
Income and other taxes				(76,394	)		(990	)
Leases on concessions				(25,996	)		—
Other assets and liabilities, net				(112,759	)		(105,096	)

				(392,329	)		(9,349	)
Net cash generated by operating activities				663,469			300,432

Cash flows from investing activities
Capital contribution in associates				(2,170	)		(22,555	)
Marketable securities				213,463			—
Restricted cash				78,283			—
Dividends received from joint ventures				251,396			93,925
Acquisition of property, plant and equipment, intangible assets and investments, net				(389,300	)		(181,685	)

Net cash generated by (used in) investing activities				151,672			(110,315	)

Cosan Limited

Consolidated statements of cash flows

For the quarters ended March 31, 2016 and 2015

(In thousands of Brazilian Reais – R$)


Cash flows from financing activities
Loans, borrowings and debentures raised	628,261		705,479
Payment of loans, borrowings and debentures
Principal	(527,214	)	(359,460	)
Interest	(330,694	)	(167,633	)
Payment of leases
Principal	(111,206	)	—
Interest	(91,171	)	—
Advances on real estate credits	(31,176	)	—
Derivative financial instruments	(8,131	)	178,832
Dividends paid	(583,129	)	(75,000	)

Net cash (used in) generated by financing activities	(1,054,460	)	282,218

(Decrease) increase in cash and cash equivalents	(239,319	)	472,335

Cash and cash equivalents at beginning of the period	3,505,824		1,649,340
Effects of exchange rate changes on cash held	(56,853	)	710

Cash and cash equivalents at end of the period	3,209,652		2,122,385

Supplemental cash flow information:
Income taxes paid	(32,530	)	(24,082	)

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

Cosan Limited

Notes to the consolidated financial statements

For the quarters ended March 31, 2016 and 2015

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

1 Operations

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

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

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

On March 31, 2016, Cosan Logística had a negative consolidated working capital of R$2,863,678 and loss for the period of R$48,044. Nevertheless, it presented a net cash generation from operations of R$355,105 and made investments in the modernization of its fleet and improving the railway network in the amount of R$284,874, in line with its business plan.

The subsidiary Cosan S.A. and Cosan Logística are part of an agreement with the non-controlling interest holder of Rumo. This agreement provides the non-controlling interest holder the right to substitute its shares in Rumo for a fixed number of shares to be issued by Cosan S.A. and Cosan Logística. On April 28, 2016, the GIF Rumo Fundo de Investimentos em Participações (“GIF”) exercised its right to Exchange shares issued by Rumo for shares issued by Cosan S.A. and shares issued by Cosan Logística.

On April 13, 2016, Rumo completed a capital increase in an amount of R$2,600,000 through an offer of shares to investors in Brazil and abroad. Rumo intends to use the net proceeds from the offering to strengthen its working capital and make investments.

2 Basis of preparation

2.1 Statement of compliance

The consolidated interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting, as issued by the International Accounting Standards Board (IASB), and in accordance with the regulations issued by the Brazilian Securities Commission—CVM applicable to the preparation of the Quarterly Information—ITR. They do not include all the information required for a complete set of IFRS financial statements. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Company’s financial position and performance since the last annual consolidated financial statements as at and for the year ended December 31, 2015.

The significant judgments made by management in applying the Company’s accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as at and for the year ended December 31, 2015, except for the adoption of new standards and interpretations effective as of January 1, 2016. The Company has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

These consolidated financial statements were authorized for issue by the Board of Directors on May 12, 2016.

Cosan Limited

Notes to the consolidated financial statements

For the quarters ended March 31, 2016 and 2015

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

2.2 New standards, interpretations and amendments adopted by the Company—Restated

Although these new standards and amendments apply for the first time in 2016, they do not have a material impact on the annual consolidated financial statements or the interim consolidated financial statements of the Company. The nature and the impact of each new standard or amendment is described below:

Amendments to IAS 16 and IAS 41 Agriculture: Bearer Plants

The amendments change the accounting requirements for biological assets that meet the definition of bearer plants. Under the amendments, biological assets that meet the definition of bearer plants will no longer be within the scope of IAS 41 Agriculture . Instead, IAS 16 will apply. After initial recognition, bearer plants will be measured under IAS 16 at accumulated cost (before maturity) and using either the cost model. The amendments also require that produce that grows on bearer plants will remain in the scope of IAS 41 measured at fair value less costs to sell. For government grants related to bearer plants, IAS 20 Accounting for Government Grants and Disclosure of Government Assistance will apply. These amendments substantially impact the jointly controlled company Raízen Energia and do not have any effect to the Company since it does not have any bearer plants. The impact related to the initial adoption of the accounting standard for the year ended December 31, 2015, as follow:


	Consolidated statements of financial position December 31, 2015
	As issued			IAS 41 effect			Restated
Assets
Current assets		6,835,231			—			6,835,231
Investments in joint ventures		8,329,520			(92,330	)		8,237,190
Other non-current assets		37,142,917			—			37,142,917

Total assets		52,307,668			(92,330	)		52,215,338

Liabilities
Current liabilities		6,922,633			—			6,922,633
Non-current liabilities		29,030,363			—			29,030,363

Total liabilities		35,952,996			—			35,952,996

Shareholders’ equity
Share capital		5,328			—			5,328
Additional paid-in capital		4,006,562			—			4,006,562
Accumulated other comprehensive loss		(478,207	)		—			(478,207	)
Retained earnings		2,483,283			(57,716	)		2,425,567

Equity attributable to owners of the parent		6,016,966			(57,716	)		5,959,250
Non-controlling interests		10,337,706			(34,614	)		10,303,092

Total shareholders’ equity		16,354,672			(92,330	)		16,262,342

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

Cosan Limited

Notes to the consolidated financial statements

For the quarters ended March 31, 2016 and 2015

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

3 Significant accounting policies

The accounting policies set out below have been applied consistently by the Company to all periods presented.

3.1 Basis of consolidation

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


	March 31, 2016			December 31, 2015
Directly owned subsidiaries
Cosan Logística S.A.		63.27	%		63.27	%
Cosan S.A. Indústria e Comércio		62.51	%		62.51	%
Interest of Cosan S.A. in its subsidiaries
Águas da Ponte Alta S.A.		65.00	%		65.00	%
Bioinvestments Negócios e Participações S.A.		65.00	%		65.00	%
Comma Oil Chemicals Limited		100.00	%		100.00	%
Companhia de Gás de São Paulo—COMGÁS		61.33	%		61.33	%
Cosan Biomassa S.A.		100.00	%		100.00	%
Cosan Cayman II Limited		100.00	%		100.00	%
Cosan Global Limited		100.00	%		100.00	%
Cosan Investimentos e Participações S.A.		100.00	%		100.00	%
Cosan Lubes Investments Limited		100.00	%		100.00	%
Cosan Lubrificantes e Especialidades S.A.		100.00	%		100.00	%
Cosan Luxembourg S.A.		100.00	%		100.00	%
Cosan Overseas Limited		100.00	%		100.00	%
Cosan Paraguay S.A.		100.00	%		100.00	%
Cosan US, Inc.		100.00	%		100.00	%
Ilha Terminal Distribuição de Produto Químicos Ltda.		100.00	%		100.00	%
Nova Agrícola Ponte Alta S.A.		29.50	%		29.50	%
Nova Amaralina S.A. Propriedades Agrícolas		29.50	%		29.50	%
Nova Santa Barbara Agrícola S.A.		29.50	%		29.50	%
Pasadena Empreendimentos e Participações S.A.		100.00	%		100.00	%
Proud Participações S.A.		65.00	%		65.00	%
Radar II Propriedades Agrícolas S.A.		65.00	%		65.00	%
Radar Propriedades Agrícolas S.A.		29.50	%		29.50	%
Terras da Ponte Alta S.A.		29.50	%		29.50	%
Vale da Ponte Alta S.A.		65.00	%		65.00	%
Zip Lube S.A.		100.00	%		100.00	%
Interest of Cosan Logística S.A. in its subsidiaries
ALL – América Latina Logística Argentina S.A.		23.89	%		23.89	%
ALL – América Latina Logística Armazéns Gerais Ltda.		26.26	%		26.26	%
ALL – América Latina Logística Central S.A.		19.31	%		19.31	%
ALL – América Latina Logística Equipamentos Ltda. ⁽ⁱ⁾		—			26.26	%
ALL – América Latina Logística Intermodal S.A.		26.26	%		26.26	%
ALL – América Latina Logística Malha Norte S.A.		26.06	%		26.06	%
ALL – América Latina Logística Malha Oeste S.A.		26.26	%		26.26	%
ALL – América Latina Logística Malha Paulista S.A.		26.26	%		26.26	%
ALL – América Latina Logística Malha Sul S.A.		26.26	%		26.26	%
ALL – América Latina Logística Mesopotâmica S.A.		18.53	%		18.53	%
ALL – América Latina Logística Participações S.A. ⁽ⁱ⁾		—			26.26	%
ALL – América Latina Logística Rail Management Ltda.		13.13	%		13.13	%
ALL – América Latina Logística S.A.		26.26	%		26.26	%
ALL – América Latina Logística Serviços Ltda.		26.26	%		26.26	%
Boswells S.A.		26.26	%		26.26	%
Brado Holding S.A.		26.26	%		26.26	%
Brado Logística e Participações S.A.		16.34	%		16.34	%
Brado Logística S.A.		16.34	%		16.34	%
Logispot Armazéns Gerais S.A.		13.39	%		13.39	%
Paranaguá S.A.		26.22	%		26.22	%
PGT—Grains Terminal S.A.		26.26	%		26.26	%
Portofer Transporte Ferroviário Ltda.		26.26	%		26.26	%
Rumo Logística Operadora Multimodal S.A.		26.26	%		26.26	%

(i)

Incorporated in March 1, 2016 by ALL Intermodal S.A.

Cosan Limited

Notes to the consolidated financial statements

For the quarters ended March 31, 2016 and 2015

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

3.2 New standards and interpretations not yet adopted

•

IFRS 9, published in July 2014, replaces the existing guidance in IAS 39 Financial Instruments: Recognition and Measurement.

IFRS 9 includes revised guidance on the classification and measurement of financial instruments, a new expected credit loss model for calculating impairment on financial assets, and new general hedge accounting requirements. It also carries forward the guidance on recognition and derecognition of financial instruments from IAS 39. The Company has yet to assess IFRS 9’s full impact. The Company will also consider the impact of the remaining phases of IFRS 9 when completed by the Board.

IFRS 9 is effective for annual reporting periods beginning on or after January 1, 2018, with early adoption permitted.

•

IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognized. It replaces existing revenue recognition guidance, including IAS 18 Revenue, IAS 11—Construction Contracts and IFRIC 13—Customer Loyalty Programmes. IFRS 15 is effective for annual reporting periods beginning on or after January 1, 2018, with early adoption permitted.

The Company is currently assessing the potential impacts of adopting IFRS 15.

•

IFRS 16—Leases was issued on January 13, 2016. IFRS 16 eliminates the current dual accounting model for lessees, which distinguishes between on-balance sheet finance leases and off-balance sheet operating leases. Instead, there is a single, on-balance sheet accounting model that is similar to current finance lease accounting. For lessees, the lease becomes an on-balance sheet liability that attracts interest, together with a new asset on the other side of the balance sheet. In other words, lessees will appear to become more asset-rich but also more heavily indebted. The new standard takes effect in January 2019.

There are no other IFRS or IFRIC interpretations that are not yet effective and that are expected to have a significant impact on the Company.

4 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.

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

Cosan Limited

Notes to the consolidated financial statements

For the quarters ended March 31, 2016 and 2015

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


	March 31, 2016																														Additional information
	Raízen Energia			Raízen Combustíveis			COMGÁS			Radar			Lubricants			Logistics			Other business			Deconsolidated effects IFRS 11			Segment elimination / adjustments			Total consolidated			Cosan Energia			Cosan Logística
Statement of profit or loss:
Net sales		3,866,279			16,391,752			1,460,076			22,913			479,124			1,185,891			34			(20,258,031	)		(6,056	)		3,141,982			1,962,148			1,185,891
Domestic market		1,679,105			16,391,752			1,460,076			22,913			365,932			1,145,496			34			(18,070,857	)		(6,056	)		2,988,395			1,848,956			1,145,496
External market		2,187,174			—			—			—			113,192			40,395			—			(2,187,174	)		—			153,587			113,192			40,395
Cost of sales		(2,667,086	)		(15,600,588	)		(828,583	)		—			(371,944	)		(871,083	)		(550	)		18,267,674			6,056			(2,066,104	)		(1,201,078	)		(871,083	)
Gross profit		1,199,193			791,164			631,493			22,913			107,180			314,808			(516	)		(1,990,357	)		—			1,075,878			761,070			314,808
Selling expenses		(188,404	)		(357,096	)		(154,584	)		—			(83,974	)		1,728			—			545,500			—			(236,830	)		(238,557	)		—
General and administrative expenses		(163,286	)		(101,209	)		(73,327	)		(7,575	)		(18,793	)		(89,774	)		(46,071	)		264,495			—			(235,540	)		(141,656	)		(88,046	)
Other income (expense), net		68,479			80,718			(2,016	)		(211	)		1,701			2,272			(39,312	)		(149,197	)		—			(37,566	)		(39,836	)		2,272
Financial results		209,241			(132,961	)		(96,075	)		3,764			(18,913	)		(427,296	)		(371,013	)		(76,280	)		104,780			(804,753	)		(449,360	)		(427,296	)
Financial expense		(262,775	)		(43,355	)		(209,988	)		(409	)		(8,797	)		(469,652	)		(292,672	)		306,130			104,780			(876,738	)		(494,390	)		(469,652	)
Financial income		162,288			59,551			113,554			4,222			964			61,526			70,507			(221,839	)		—			250,773			189,136			61,526
Foreign exchange losses, net		(15,174	)		358,297			123,854			(49	)		17,421			46,520			337,608			(343,123	)		—			525,354			507,512			46,520
Derivatives		324,902			(507,454	)		(123,495	)		—			(28,501	)		(65,690	)		(486,456	)		182,552			—			(704,142	)		(651,618	)		(65,690	)
Equity in earnings of associates		(36,283	)		2,520			—			—			(866	)		3,558			282,490			33,763			(286,740	)		(1,558	)		(5,116	)		3,558
Equity in earnings of joint ventures		—			—			—			—			—			—			441,344			—			—			441,344			441,344			—
Income tax (expense) benefit		(368,617	)		(109,974	)		(104,635	)		(3,936	)		567			10,320			113,089			478,591			(35,625	)		(20,220	)		5,085			10,320

Profit (loss) for the period		720,323			173,162			200,856			14,955			(13,098	)		(184,384	)		380,011			(893,485	)		(217,585	)		180,755			332,974			(184,384	)

Net income attributable to:
Owners of the Parent		720,323			163,097			200,856			14,955			(13,098	)		(48,044	)		380,011			(883,420	)		(403,372	)		131,308			248,706			(48,044	)
Non-controlling interests		—			10,065			—			—			—			(136,340	)		—			(10,065	)		185,787			49,447			84,268			(136,340	)

Other selected data:
Depreciation and amortization		643,442			163,619			119,047			155			20,629			209,786			2,963			(807,061	)		—			352,580			142,794			209,786
EBITDA		1,523,141			579,716			520,613			15,282			25,877			442,378			640,898			(2,102,857	)		(286,740	)		1,358,308			920,043			442,378
Additions to PP&E, intangible and biological assets		810,634			179,164			94,139			100			9,348			284,874			838			(989,798	)		—			389,299			104,425			284,874
Reconciliation of EBITDA:
Profit (loss) for the period		720,323			173,162			200,856			14,955			(13,098	)		(184,384	)		380,011			(893,485	)		(217,585	)		180,755			332,974			(184,384	)
Income tax and social contribution		368,617			109,974			104,635			3,936			(567	)		(10,320	)		(113,089	)		(478,591	)		35,625			20,220			(5,085	)		(10,320	)
Financial result, net		(209,241	)		132,961			96,075			(3,764	)		18,913			427,296			371,013			76,280			(104,780	)		804,753			449,360			427,296
Depreciation and amortization		643,442			163,619			119,047			155			20,629			209,786			2,963			(807,061	)		—			352,580			142,794			209,786

EBITDA		1,523,141			579,716			520,613			15,282			25,877			442,378			640,898			(2,102,857	)		(286,740	)		1,358,308			920,043			442,378

Cosan Limited

Notes to the consolidated financial statements

For the quarters ended March 31, 2016 and 2015

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


	March 31, 2015																														Additional information
	Raízen Energia			Raízen Combustíveis			COMGÁS			Radar			Lubricants			Logistics			Other business			Deconsolidated effects IFRS 11			Segment elimination / adjustments			Total consolidated			Cosan Energia			Cosan Logística
Statement of profit or loss:
Net sales		3,080,040			14,061,510			1,534,064			21,606			379,843			205,611			—			(17,141,550	)		—			2,141,124			1,935,513			205,611
Domestic market		1,166,359			14,061,510			1,534,064			21,606			305,666			176,847			—			(15,227,869	)		—			2,038,183			1,861,336			176,847
External market		1,913,681			—			—			—			74,177			28,764			—			(1,913,681	)		—			102,941			74,177			28,764
Cost of sales		(2,620,827	)		(13,260,089	)		(1,154,677	)		(1,738	)		(288,575	)		(146,350	)		—			15,880,916			—			(1,591,340	)		(1,444,991	)		(146,350	)
Gross profit		459,213			801,421			379,387			19,868			91,268			59,261			—			(1,260,634	)		—			549,784			490,522			59,261
Selling expenses		(149,073	)		(315,933	)		(154,521	)		—			(64,805	)		—			—			465,006			—			(219,326	)		(219,326	)		—
General and administrative expenses		(140,651	)		(100,271	)		(86,595	)		(7,207	)		(16,146	)		(24,371	)		(45,493	)		240,922			—			(179,812	)		(140,878	)		(24,370	)
Other income (expense), net		39,099			60,926			(2,081	)		14,324			159			(460	)		(111,266	)		(100,025	)		—			(99,324	)		(98,864	)		(460	)
Financial results		(238,303	)		12,953			(73,959	)		1,691			3,770			(20,398	)		(169,527	)		225,350			—			(258,423	)		(284,713	)		(20,398	)
Financial expense		(204,842	)		(38,955	)		(103,891	)		(355	)		(8,445	)		(10,323	)		(172,421	)		243,797			3,823			(291,612	)		(273,813	)		(10,323	)
Financial income		147,793			37,777			37,314			2,070			329			5,653			28,248			(185,570	)		(3,823	)		69,791			64,109			5,652
Foreign exchange losses, net		(605,426	)		(172,806	)		(242,513	)		(24	)		2,614			(56,217	)		(295,694	)		778,232			—			(591,834	)		(568,545	)		(56,217	)
Derivatives		424,172			186,937			235,131			—			9,272			40,489			270,340			(611,109	)		—			555,232			493,536			40,490
Equity in earnings of associates		(5,990	)		4,048			—			—			(4,960	)		—			8,960			1,942			(8,635	)		(4,635	)		(4,635	)		—
Equity in earnings of joint ventures		—			—			—			—			—			—			157,772			—			—			157,772			157,772			—
Income tax (expense) benefit		42,751			(144,976	)		(31,841	)		(3,343	)		(5,705	)		(4,832	)		125,412			102,225			—			79,691			84,524			(4,833	)

Profit (loss) for the period		7,046			318,168			30,390			25,333			3,581			9,200			(34,142	)		(325,214	)		(8,635	)		25,727			(15,598	)		9,200

Net income attributable to:
Owners of the Parent		7,046			306,146			30,390			25,333			3,581			7,553			(34,142	)		(313,192	)		(23,176	)		9,539			(43,683	)		7,554
Non-controlling interests		—			12,022			—			—			—			1,647			—			(12,022	)		14,541			16,188			28,085			1,647

Other selected data:
Depreciation and amortization		627,614			139,333			119,451			245			17,928			26,653			974			(766,947	)		—			165,251			138,598			26,653
EBITDA		830,212			589,524			255,641			27,230			23,444			61,083			10,947			(1,419,736	)		(8,635	)		369,710			323,189			61,084
Additions to PP&E, intangible and biological assets		828,526			239,699			123,566			668			8,300			30,989			18,162			(1,068,225	)		—			181,685			150,696			30,989
Reconciliation of EBITDA:
Profit (loss) for the period		7,046			318,168			30,390			25,333			3,581			9,200			(34,142	)		(325,214	)		(8,635	)		25,727			(15,598	)		9,200
Income tax and social contribution		(42,751	)		144,976			31,841			3,343			5,705			4,832			(125,412	)		(102,225	)		—			(79,691	)		(84,524	)		4,833
Financial result, net		238,303			(12,953	)		73,959			(1,691	)		(3,770	)		20,398			169,527			(225,350	)		—			258,423			284,713			20,398
Depreciation and amortization		627,614			139,333			119,451			245			17,928			26,653			974			(766,947	)		—			165,251			138,598			26,653

EBITDA		830,212			589,524			255,641			27,230			23,444			61,083			10,947			(1,419,736	)		(8,635	)		369,710			323,189			61,084

Cosan Limited

Notes to the consolidated financial statements

For the quarters ended March 31, 2016 and 2015

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


	March 31, 2016																														Additional information
	Raízen Energia			Raízen Combustíveis			COMGÁS			Radar			Lubricants			Logistics			Other business			Deconsolidated effects IFRS 11			Segment elimination			Total consolidated			Cosan Energia			Cosan Logística
Statement of financial position:
Cash and cash equivalents		2,987,675			1,384,957			1,000,160			817			72,625			207,406			1,928,644			(4,372,632	)		—			3,209,652			2,660,251			207,406
Marketable securities		—			—			—			254,313			—			295,381			—			—			—			549,694			254,313			295,381
Trade receivables		457,795			1,606,572			480,985			35,977			246,230			202,649			—			(2,064,367	)		—			965,841			763,189			202,649
Derivative financial instruments		1,241,138			85,699			557,395			—			—			87,548			1,339,502			(1,326,837	)		—			1,984,445			1,870,234			87,548
Inventories		511,997			1,184,264			132,608			—			300,548			217,555			3,363			(1,696,261	)		—			654,074			436,518			217,555
Other current assets		1,670,389			1,341,716			91,661			190,992			63,279			343,988			302,105			(3,012,105	)		(69,876	)		922,149			628,507			343,988
Other non-current assets		3,041,550			842,308			277,987			62			23,666			2,860,622			1,795,254			(3,883,858	)		(8,857	)		4,948,734			2,088,105			2,860,622
Investment in associates		210,425			—			—			—			9,061			44,045			11,466,849			(210,425	)		(11,339,253	)		180,702			136,657			44,045
Investment in joint ventures		—			—			—			—			—			—			8,266,574			—			—			8,266,574			8,266,573			—
Biological assets		968,521			—			—			—			—			—			—			(968,521	)		—			—			—			—
Investment property		—			—			—			2,526,141			—			—			—			—			—			2,526,141			2,526,141			—
Property, plant and equipment		11,365,960			2,411,346			—			1,740			242,310			9,637,560			152,093			(13,777,306	)		—			10,033,703			396,143			9,637,560
Intangible assets and goodwill		3,263,773			4,411,262			8,592,772			1,903			807,867			7,863,667			8,683			(7,675,035	)		—			17,274,892			9,411,226			7,863,667
Loans, borrowings and debenture		(9,840,669	)		(2,976,278	)		(3,745,234	)		—			(541,796	)		(8,662,993	)		(5,484,441	)		12,816,947			—			(18,434,464	)		(9,274,483	)		(8,662,993	)
Derivative financial instruments		(684,318	)		(312,010	)		—			—			(28,765	)		(38,011	)		(932,553	)		996,328			—			(999,329	)		(961,318	)		(38,011	)
Trade payables		(891,846	)		(774,195	)		(1,143,536	)		(2,294	)		(241,456	)		(558,791	)		(4,336	)		1,666,041			—			(1,950,413	)		(1,391,622	)		(558,791	)
Employee benefits payable		(382,263	)		(112,280	)		(34,849	)		(4,122	)		(13,789	)		(137,000	)		(10,104	)		494,543			—			(199,864	)		(62,864	)		(137,000	)
Other current liabilities		(776,143	)		(1,470,728	)		(137,948	)		(34,499	)		(88,966	)		(1,284,717	)		(214,171	)		2,246,871			67,851			(1,692,450	)		(431,382	)		(1,284,717	)
Other non-current liabilities		(1,233,956	)		(2,762,282	)		(1,206,805	)		(105,185	)		(178,240	)		(7,242,814	)		(3,812,259	)		3,996,238			177,205			(12,368,098	)		(5,291,608	)		(7,242,814	)
Total assets (net of liabilities) allocated by segment		11,910,028			4,860,351			4,865,196			2,865,845			672,574			3,836,095			14,805,203			(16,770,379	)		(11,172,930	)		15,871,983			12,024,580			3,836,095

Total assets		25,719,223			13,268,124			11,133,568			3,011,945			1,765,586			21,760,421			25,263,067			(38,987,347	)		(11,417,986	)		51,516,601			29,437,857			21,760,421

Equity attributable to owners of the parent		11,910,991			4,689,812			4,865,196			2,865,845			672,574			1,066,452			14,805,203			(16,600,803	)		(18,186,928	)		6,088,342			8,716,872			1,066,452
Non-controlling interests		(963	)		170,539			—			—			—			2,769,643			—			(169,576	)		7,013,998			9,783,641			3,307,708			2,769,643

Total shareholders’ equity		11,910,028			4,860,351			4,865,196			2,865,845			672,574			3,836,095			14,805,203			(16,770,379	)		(11,172,930	)		15,871,983			12,024,580			3,836,095

Cosan Limited

Notes to the consolidated financial statements

For the quarters ended March 31, 2016 and 2015

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


	December 31, 2015 (Restated)																														Additional information
	Raízen Energia			Raízen Combustíveis			COMGÁS			Radar			Lubricants			Logistics			Other business			Deconsolidated effects IFRS 11			Segment elimination			Total consolidated			Cosan Energia			Cosan Logística
Statement of financial position:
Cash and cash equivalents		2,995,495			885,880			1,967,643			1,016			96,907			246,849			1,193,409			(3,881,375	)		—			3,505,824			3,129,530			246,849
Marketable securities		—			—			—			241,430			—			508,268			—			—			—			749,698			241,430			508,268
Trade receivables		719,092			2,058,601			540,132			38,510			220,417			165,671			248			(2,777,693	)		—			964,978			799,308			165,671
Derivative financial instruments		1,465,816			255,665			665,032			—			12,363			99,863			1,653,038			(1,721,481	)		—			2,430,296			2,292,859			99,863
Inventories		2,371,987			1,287,946			134,347			—			293,916			225,784			2,854			(3,659,933	)		—			656,901			431,117			225,784
Other current assets		1,579,568			1,029,510			132,960			120,615			51,926			364,168			277,393			(2,609,078	)		(66,604	)		880,458			503,502			364,168
Other non-current assets		3,425,968			921,891			279,091			51			(135,853	)		2,824,311			1,937,123			(4,347,859	)		(9,717	)		4,895,006			2,070,687			2,824,311
Investment in associates		225,670			248,456			—			—			8,453			44,241			11,971,024			(474,126	)		(11,839,342	)		184,376			140,134			44,241
Investment in joint ventures		—			—			—			—			—			—			8,237,190			—			—			8,237,190			8,237,190			—
Biological assets		730,348			—			—			—			—			—			—			(730,348	)		—			—			—			—
Investment property		—			—			—			2,595,035			—			—			—			—			—			2,595,035			2,595,035			—
Property, plant and equipment		10,975,677			2,409,555			—			2,029			243,080			9,404,087			156,691			(13,385,232	)		—			9,805,887			401,800			9,404,087
Intangible assets and goodwill		3,261,623			4,414,352			8,620,436			1,669			818,362			7,862,420			6,802			(7,675,975	)		—			17,309,689			9,447,269			7,862,420
Loans, borrowings and debenture		(11,549,211	)		(3,226,449	)		(3,823,067	)		—			(512,758	)		(8,585,175	)		(5,908,203	)		14,775,660			—			(18,829,203	)		(9,755,703	)		(8,585,175	)
Derivative financial instruments		(676,321	)		(67,902	)		—			—			(291	)		(1,780	)		(740,427	)		744,223			—			(742,498	)		(740,718	)		(1,780	)
Trade payables		(1,126,540	)		(937,177	)		(1,302,397	)		(2,511	)		(235,663	)		(420,189	)		(4,252	)		2,063,717			—			(1,965,012	)		(1,544,822	)		(420,189	)
Employee benefits payable		(315,704	)		(83,214	)		(65,522	)		(5,684	)		(15,061	)		(149,871	)		(20,141	)		398,918			—			(256,279	)		(106,407	)		(149,871	)
Other current liabilities		(920,298	)		(968,904	)		(103,331	)		(35,464	)		(135,945	)		(1,477,920	)		(237,919	)		1,889,202			64,528			(1,926,051	)		(463,015	)		(1,477,920	)
Other non-current liabilities		(1,364,086	)		(3,129,560	)		(1,180,987	)		(104,403	)		(209,245	)		(7,094,274	)		(3,754,009	)		4,493,646			108,965			(12,233,953	)		(5,236,850	)		(7,094,274	)

Total assets (net of liabilities) allocated by segment		11,799,084			5,098,650			5,864,337			2,852,293			500,608			4,016,453			14,770,821			(16,897,734	)		(11,742,170	)		16,262,342			12,442,346			4,016,453

Total assets		27,751,244			13,511,856			12,339,641			3,000,355			1,609,571			21,745,662			25,435,772			(41,263,100	)		(11,915,663	)		52,215,338			30,289,861			21,745,662

Equity attributable to owners of the parent		11,800,047			4,926,655			5,864,337			2,852,293			500,608			1,113,277			14,770,821			(16,726,702	)		(19,142,086	)		5,959,250			8,753,858			1,113,277
Non-controlling interests		(963	)		171,995			—			—			—			2,903,176			—			(171,032	)		7,399,916			10,303,092			3,688,488			2,903,176

Total shareholders’ equity		11,799,084			5,098,650			5,864,337			2,852,293			500,608			4,016,453			14,770,821			(16,897,734	)		(11,742,170	)		16,262,342			12,442,346			4,016,453

Cosan Limited

Notes to the consolidated financial statements

For the quarters ended March 31, 2016 and 2015

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

Net sales by segment:


	March 31, 2016			March 31, 2015
Raízen Energia
Ethanol		1,936,912			1,626,484
Sugar		1,846,288			1,408,329
Cogeneration		43,881			12,686
Other		39,198			32,541

		3,866,279			3,080,040
Raízen Combustíveis
Fuels		16,391,752			14,061,510

		16,391,752			14,061,510
COMGÁS
Industrial		1,006,065			1,027,851
Residential		155,406			120,857
Thermo generation		51,721			115,109
Construction revenue		66,192			90,381
Commercial		53,327			61,609
Cogeneration		54,523			65,972
Automotive		47,150			45,038
Other		25,692			7,247

		1,460,076			1,534,064
Radar
Land lease		19,189			16,986
Property sales		—			1,879
Other		3,724			2,741

		22,913			21,606
Lubricants
Lubricants		425,912			309,708
Basic oil		48,942			37,455
Other		4,270			32,680

		479,124			379,843
Other businesses		34			—
IFRS 11—Deconsolidated of adjustments/eliminations joint ventures and eliminations		(20,264,087	)		(17,141,550	)

Cosan Energia		1,956,091			1,935,513

Logistics
North operations ⁽ⁱ⁾		895,886			205,611
South operations ⁽ⁱ⁾		224,871			—
Container operations ⁽ⁱ⁾		65,134			—

		1,185,891			205,611

Total		3,141,982			2,141,124

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

Cosan Limited

Notes to the consolidated financial statements

For the quarters ended March 31, 2016 and 2015

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

5 Cash and cash equivalents


	March 31, 2016		December 31, 2015
Cash and bank deposits		512,206		305,510
Short-term investments		2,697,446		3,200,314

		3,209,652		3,505,824

Short-term investments are composed as follows:


	March 31, 2016		December 31, 2015
Investment funds
Repurchase agreements		880,819		1,252,229
Bank certificate of deposits—CDB		911,477		792,279
Other		124,072		199,919

		1,916,368		2,244,427
Bank investments
Repurchase agreements		582,976		407,971
Bank certificate of deposits—CDB		176,752		542,658
Other		21,350		5,258

		781,078		955,887
		2,697,446		3,200,314

6 Marketable securities


	March 31, 2016		December 31, 2015
Government security		68,757		334,167
Bank certificate of deposits—CDB		338,856		271,323
Debentures		142,081		144,208

		549,694		749,698

Cosan Limited

Notes to the consolidated financial statements

For the quarters ended March 31, 2016 and 2015

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

7 Trade receivables


	March 31, 2016			December 31, 2015
Domestic—Brazilian Reais		1,010,489			999,007
Export—Foreign currency		23,251			29,402
Allowance for doubtful accounts		(67,899	)		(63,431	)

		965,841			964,978

Current		903,486			904,245

Non-current		62,355			60,733

8 Other current tax receivable


	March 31, 2016			December 31, 2015
ICMS—State VAT		603,531			597,023
COFINS—Revenue tax		240,431			235,980
PIS—Revenue tax		67,619			69,098
PAES—Special Program for Installment Payments		1,977			33,245
Provision for non-realization tax		(7,587	)		(7,587	)
Other		14,443			17,682

		920,414			945,441

Current		213,680			311,892

Non-current		706,734			633,549

9 Related parties

a) Receivables from and payables to related parties:


	March 31, 2016		December 31, 2015
Current assets
Commercial operations
Raízen Energia S.A.		43,770		47,591
Raízen Combustíveis S.A.		12,510		3,052
Aguassanta Participações S.A.		6,322		6,371
Other		4,436		4,085

		67,038		61,099

Cosan Limited

Notes to the consolidated financial statements

For the quarters ended March 31, 2016 and 2015

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


Corporate operation / Agreements
Raízen Energia S.A.	14,114	13,028

	14,114	13,028
Financial operations
Raízen Combustíveis S.A.	—	1,102

	—	1,102
	81,152	75,229

Non-current assets
Receivables under the framework agreement
Raízen Energia S.A.	89,763	89,763
Janus Brasil Participações S.A.	20,875	20,875

	110,638	110,638
Financial operations
Rezende Barbosa Group	85,558	70,365
Novvi Limited Liability Company	15,586	17,121
Other	17	8

	101,161	87,494
Corporate operation
Raízen Energia S.A.	23,866	23,029
Other	—	184

	23,866	23,213
	235,665	221,345

Total	316,817	296,574

Current liabilities
Commercial operations
Raízen Energia S.A.	44,673	46,582
Raízen Combustíveis S.A.	96,813	71,489
Other	105	(454	)

	141,591	117,617
Corporate operations / Agreements
Raízen Energia S.A.	93,560	78,653
Raízen Combustíveis S.A.	7,810	7,810

	101,370	86,463
Total	242,961	204,080

Cosan Limited

Notes to the consolidated financial statements

For the quarters ended March 31, 2016 and 2015

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

b) Related party transactions:


	March 31, 2016			March 31, 2015
Sales of goods and services
Raízen Energia S.A.		114,835			95,741
Raízen Combustíveis S.A.		27,898			—
Other		422			—

		143,155			95,741
Purchase of goods / Inputs
Raízen Energia S.A.		(19	)		—
Raízen Combustíveis S.A.		(201,095	)		(12	)
Other		(125	)		—

		(201,239	)		(12	)
Land lease
Raízen Energia S.A.		16,171			14,502

		16,171			14,502
Shared income (expense)
Aguassanta Participações S.A.		79			106
Raízen Energia S.A.		(19,008	)		(22,734	)

		(18,929	)		(22,628	)
Financial result
Raízen Energia S.A.		361			810
Rezende Barbosa Group		—			9
Other		(201	)		(48	)

		160			771
Total		(60,682	)		88,374

c) Officers’ and directors’ compensation


	March 31, 2016		March 31, 2015
Regular compensation		11,075		14,215
Stock option expense		2,480		2,929
Bonuses and other variable compensation		10,285		8,152

		23,840		25,296

Cosan Limited

Notes to the consolidated financial statements

For the quarters ended March 31, 2016 and 2015

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

10 Investments in associates

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


	Tellus Brasil Participações S.A.			Novvi Limited Liability Company			Janus Brasil Participações S.A.			Other investments			Total
Shares issued by the associate		65,957,282			200,002			16,166,927			—
Shares held by Cosan		33,638,214			100,001			31,699,465			—
Cosan ownership interest		51.00	%		50.00	%		51.00	%		—

Equity in earnings (losses) of associates at March 31, 2015		2,539			(4,950	)		(23	)		(2,201	)		(4,635	)
At December 31, 2015		99,638			6,783			23,713			54,242			184,376
Equity in earnings (losses) of associates		(1,989	)		(866	)		867			430			(1,558	)
Capital increase		—			2,170			—			—			2,170
Dividends		—			—			—			(3,754	)		(3,754	)
Other		(492	)		—			—			(40	)		(532	)

At March 31, 2016		97,157			8,087			24,580			50,878			180,702

Cosan Limited

Notes to the consolidated financial statements

For the quarters ended March 31, 2016 and 2015

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

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


	Cosan S.A. Indústria e Comércio			Cosan Logística S.A.			Companhia de Gás de São Paulo—COMGÁS			Rumo Logística Operadora Multimodal S.A.			Logispot Armazéns Agrícolas S.A.			Radar Propriedades Agrícolas S.A.			Radar II Propriedades Agrícolas S.A.			Elimination of participation Radar II in Radar			Total
Shares issued by the associate		407,214,353			405,856,814			124,009,308			299,015,898			2,040,816			21,148,989			830,690,258			—
Shares held by non-controlling shareholders		153,511,030			152,153,491			47,950,970			220,507,722			1,000,000			17,147,822			290,710,861			—
Non-controlling interest		37.49	%		36.73	%		38.67	%		73.74	%		49.00	%		81.08	%		35.00	%		—


Equity in earnings (losses) of associates at March 31, 2015		(16,377	)		2,832			11,948			1,647			—			13,271			2,867			—			16,188
At December 31, 2015		3,700,096			46,043			2,109,567			2,866,244			36,835			1,728,749			349,022			(498,850	)		10,337,706
Equity in earnings (losses) of associates		119,164			(17,645	)		77,665			(135,649	)		(690	)		3,139			4,091			(628	)		49,447
Other comprehensive income (losses)		(17	)		318			—			2,434			—			(1,139	)		(81	)		179			1,694
Dividends		(103,728	)		—			(475,351	)		—			—			—			—			—			(579,079	)
Other		(38,070	)		130			11,344			469			—			—			—			—			(26,127	)

At March 31, 2016		3,677,445			28,846			1,723,225			2,733,498			36,145			1,730,749			353,032			(499,299	)		9,783,641

Cosan Limited

Notes to the consolidated financial statements

For the quarters ended March 31, 2016 and 2015

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

11 Investments in joint ventures

Changes to investments in joint ventures were as follows:


	Raízen Combustíveis S.A.			Raízen Energia S.A.			Total
Shares issued by the associate		3,303,168,484			5,902,595,634
Shares held by Cosan		1,651,584,242			2,951,297,817
Cosan ownership interest		50.00	%		50.00	%

Equity in earnings of joint ventures at March 31, 2015		152,765			5,007			157,772
At December 31, 2015		3,204,834			5,124,686			8,329,520
Adoption to IAS 41 effect (Note 2.2)		—			(92,330	)		(92,330	)
At December 31, 2015 (Restated)		3,204,834			5,032,356			8,237,190
Equity in earnings of joint ventures		81,185			360,159			441,344
Other comprehensive losses		(1,045	)		(14,572	)		(15,617	)
Interest on capital		(16,500	)		—			(16,500	)
Dividends		(182,060	)		(197,783	)		(379,843	)

At March 31, 2016		3,086,414			5,180,160			8,266,574

The statement of financial position and statement of profit or loss of the joint ventures are disclosed in Note 4, Segments.

Pursuant to the terms of the Raízen Joint Venture—Framework Agreement, Cosan is responsible for certain legal proceedings that existed prior to the formation of Raízen, net of judicial deposits as of April 1, 2011, as well as tax installments under the REFIS (tax amnesty and refinancing program), recorded in “Other taxes payable”. Additionally, Cosan has access to a credit line (stand-by facility) granted to Raízen in the amount of US$500 million, which was unused at March 31, 2016.

12 Assets held for sale and investment property


	Investment property			Assets held for sale			Total
At December 31, 2015		2,595,035			149,938			2,744,973
Change in fair value		(290	)		(4,409	)		(4,699	)
Additions		—			3,382			3,382
Transfers		(68,604	)		68,604			—

At March 31, 2016		2,526,141			217,515			2,743,656

Cosan Limited

Notes to the consolidated financial statements

For the quarters ended March 31, 2016 and 2015

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

13 Property, plant and equipment


	Land, buildings and improvements			Machinery, equipment and facilities			Railcars and locomotives			Permanent railways			Construction in progress			Other			Total
Cost
At December 31, 2015		859,957			663,223			4,235,037			3,568,597			824,034			467,090			10,617,938
Additions		—			6,385			9,611			—			414,546			2,855			433,397
Disposals		—			(98	)		(823	)		(9,816	)		—			(5,870	)		(16,607	)
Transfers		28,296			19,549			119,316			(5,106	)		(184,887	)		11,751			(11,081	)

At March 31, 2016		888,253			689,059			4,363,141			3,553,675			1,053,693			475,826			11,023,647
Depreciation
At December 31, 2015		(118,056	)		(218,925	)		(248,686	)		(209,308	)		—			(17,076	)		(812,051	)
Additions		(9,457	)		(19,972	)		(68,676	)		(67,146	)		—			(15,725	)		(180,976	)
Disposals		—			98			440			3,046			—			2,486			6,070
Transfers		846			1,161			—			—			—			(4,994	)		(2,987	)

At March 31, 2015		(126,667	)		(237,638	)		(316,922	)		(273,408	)		—			(35,309	)		(989,944	)
At December 31, 2015		741,901			444,298			3,986,351			3,359,289			824,034			450,014			9,805,887

At March 31, 2016		761,586			451,421			4,046,219			3,280,267			1,053,693			440,517			10,033,703

Capitalization of borrowing costs

Capitalized borrowing costs for the quarter ended March 31, 2016 amounted to R$1,798 (R$1,401 for the quarter ended March 31, 2015).

Cosan Limited

Notes to the consolidated financial statements

For the quarters ended March 31, 2016 and 2015

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

14 Intangible assets


	Goodwill			Concession rights			Improvements to public concessions and operating licenses			Trademarks			Customer relationships			Other			Total
Cost
At December 31, 2015		713,291			16,664,047			432,529			252,474			940,470			404,013			19,406,824
Additions		—			76,813			—			—			18,830			2,722			98,365
Disposals		—			(8,493	)		—			—			(1,026	)		—			(9,519	)
Transfers		—			385			—			—			(1,740	)		11,108			9,753
Business combination		—			33,142			—			—			—			—			33,142

At March 31, 2016		713,291			16,765,894			432,529			252,474			956,534			417,843			19,538,565
Amortization
At December 31, 2015		—			(1,011,806	)		(193,818	)		(159,789	)		(575,411	)		(156,311	)		(2,097,135	)
Additions		(1,423	)		(111,058	)		(2,935	)		(5,707	)		(36,712	)		(15,470	)		(173,305	)
Disposals		—			6,244			—			—			520			—			6,764
Transfers		—			124			—			—			—			(121	)		3

At March 31, 2016		(1,423	)		(1,116,496	)		(196,753	)		(165,496	)		(611,603	)		(171,902	)		(2,263,673	)
At December 31, 2015		713,291			15,652,241			238,711			92,685			365,059			247,702			17,309,689

At March 31, 2016		711,868			15,649,398			235,776			86,978			344,931			245,941			17,274,892

Cosan Limited

Notes to the consolidated financial statements

For the quarters ended March 31, 2016 and 2015

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

Capitalization of borrowing costs

Capitalized borrowing costs for the quarter ended March 31, 2016, amounted to R$5,182 (R$4,545 for the quarter ended March 31, 2015). The weighted average interest rate used to capitalize borrowing costs on the balance of construction in progress, was 13.94% p.a. for the quarter ended March 31, 2016 (12.37% p.a. for the quarter ended March 31, 2015).


Intangible assets (excluding goodwill)	Annual rate of amortization—%	March 31, 2016		December 31, 2015
Gas distribution concession—COMGÁS ⁽ⁱ⁾	Concession term		8,230,941		8,237,379
Concession rights—Rumo ⁽ⁱⁱ⁾	Concession term		7,418,457		7,414,862

			15,649,398		15,652,241
Operating license for port terminal ⁽ⁱⁱⁱ⁾	4.00%		235,776		238,711

			235,776		238,711
Trademarks
Mobil	10.00%		62,774		68,481
Comma	—		24,204		24,204

			86,978		92,685
Relationships with customers
COMGÁS	20.00%		294,954		313,694
Lubricants	6.00%		49,977		51,365

			344,931		365,059
Other
Software licenses	20.00%		133,009		126,469
Other	15.00%		112,932		121,233

			245,941		247,702
			16,563,024		16,596,398

(i)

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

(ii)

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

(iii)

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

Impairment testing of cash-generating units goodwill

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

During the quarter ended March 31, 2016, no impairment indicators were identified that would trigger the need for an impairment test.

Cosan Limited

Notes to the consolidated financial statements

For the quarters ended March 31, 2016 and 2015

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

15 Loans, borrowings and debentures


	Interest
Description	Index ⁽ⁱ⁾	Annual interest ⁽ⁱⁱ⁾			March 31, 2016		December 31, 2015		Maturity
Description	Index ⁽ⁱ⁾	Annual interest ⁽ⁱⁱ⁾			March 31, 2016		December 31, 2015		Maturity
Loan and borrowings
BNDES	URTJLP		9.12	%		2,768,966		2,851,793		Aug-2029
	Fixed		5.50	%		969,228		1,016,225		Sep-2018
	TJ462		10.43	%		770,501		809,660		Oct-2020
	Selic		16.20	%		316,655		298,258		Jun-2023
	TJLP		10.19	%		190,565		176,900		Oct-2018
	Selic		15.75	%		5,315		5,595		Sep-2020
	Fixed		3.97	%		4,476		4,684		Jan-2024
	IPCA		15.58	%		4,358		4,152		Nov-2021
	URTJLP		10.85	%		26,650		217		Jun-2016
EIB	US$ + LIBOR		2.28	%		779,278		869,014		Sep-2021
Foreign loans	LIBOR Sterling		3.95	%		279,781		312,940		Dec-2019
FRN	US$		2.63	%		190,973		216,134		Jan-2017
ECN	112% of CDI		15.95	%		418,611		406,805		Sep-2019
	109% of CDI		15.50	%		318,371		304,644		Oct-2018
	US$		3.79	%		81,371		126,669		Jul-2016
Perpetual Notes	US$		8.25	%		1,801,543		1,976,673		—
Resolution 4131	US$		3.11	%		425,075		477,705		Oct-2020
	US$ + LIBOR		2.40	%		439,467		471,045		Mar-2018
	US$ + LIBOR		1.76	%		359,192		406,348		Nov-2016
Senior Notes Due 2018	Fixed		9.50	%		854,964		875,376		Mar-2018
Senior Notes Due 2023	US$		5.00	%		1,811,358		2,009,296		Mar-2023
FINEP	Fixed		5.00	%		130,077		137,133		Nov-2020
Trade banks	CDI + 3.50% p.a.		18.13	%		198,428		205,781		Sep-2016
	CDI + 4.91% p.a.		19.73	%		196,179		195,632		Jun-2019
	Fixed		20.98	%		2,888		3,898		Jun-2016
	CDI + 1,80 a.a.		16.18	%		172,357		—		May-2016
	CDI + 4,80% a.a.		19.61	%		70,552		—		Apr-2016
Working capital	CDI + 2.50% p.a.		16.98	%		409,844		388,203		Dec-2018
	US$ + LIBOR		4.45	%		87,145		100,121		Sep-2021
	CDI + 0.28% p.m.		18.02	%		23,471		25,004		Dec-2016
	121.10% of CDI		17.37	%		8,015		10,144		Nov-2016
Overdraft	118% of CDI		16.89	%		74,714		17,764		Apr-2016
Prepayment	US$ + LIBOR		3.62	%		50,015		—		Feb-2017

						14,240,383		14,703,813
Debentures
Convertible debentures	URTJLP		9.01	%		2,553		2,592		Jun-2016
Non-convertible debentures	CDI + 2.05% p.a		16.47	%		1,431,533		1,431,607		Apr-2018
	CDI + 1.30% p.a.		15.61	%		803,298		775,228		Oct-2017
	IPCA		18.79	%		621,760		594,157		Dec-2025
	108% of CDI		15.34	%		507,517		526,285		Jul-2018
	IPCA		16.53	%		501,757		484,246		Sep-2020
	Fixed		13.13	%		168,799		161,175		Oct-2020
	CDI		15.17	%		125,252		119,785		Sep-2019
	% of net revenue		—			31,612		30,315		Jun-2016

						4,194,081		4,125,390
Total						18,434,464		18,829,203

Current						3,443,065		2,775,510

Non-current						14,991,399		16,053,693

(i)

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

(ii)

As at March 31, 2016.

Cosan Limited

Notes to the consolidated financial statements

For the quarters ended March 31, 2016 and 2015

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

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


	March 31, 2016		December 31, 2015
Brazilian Real		12,129,266		11,863,258
US Dollar		6,025,417		6,653,005
Pound Sterling		279,781		312,940

		18,434,464		18,829,203

Financial Covenants

The Company and its subsidiaries are subject to certain restrictive financial covenants set forth in existing loans, financing and debentures agreements in relation to certain financial and non-financial indicators. Financial ratios are: (i) consolidated net debt / EBITDA; (ii) EBITDA / consolidated financial results (considers only interest on debentures, loans / financing and derivative activities); (iii) equity / net assets, being item (iii) applicable only to BNDES. Except for BNDES, whose measurement is required annually, a quarterly measurement is required on the reporting date, using the consolidated financial statements.

With the acquisition of ALL the Company initiated a process of discussion with the banks by setting new standards for the covenants. Except for BNDES, whose new net debt indicators / EBITDA and ICD are yet to be set, all other creditors have agreed to a ratio of up to 5.5x net debt / EBITDA. If the negotiations with BNDES require a lower leverage ratio, such ratio will be extended to all other creditors with equivalent covenants conditions. On March 31, 2016, quarterly financial covenants were met within the new established standards.

As at March 31, 2016, the Company, its subsidiaries and joint ventures were in compliance with all debt financial covenants.

Cosan Limited

Notes to the consolidated financial statements

For the quarters ended March 31, 2016 and 2015

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

16 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		722,678			1,171,539			352,854			2,247,071
Rolling stock		691,543			1,075,481			238,483			2,005,507
Terminal		24,055			90,591			114,371			229,017
Other		7,080			5,467			—			12,547
Interests		(180,312	)		(261,213	)		(74,855	)		(516,380	)
Rolling stock		(162,692	)		(212,922	)		(46,003	)		(421,617	)
Terminal		(16,044	)		(46,961	)		(28,852	)		(91,857	)
Other		(1,576	)		(1,330	)		—			(2,906	)

Present value of minimum lease payments		542,366			910,326			277,999			1,730,691

Current											542,366

Non-current											1,188,325

Leases have various expiration dates, the last maturing in June 2043. The amounts are updated annually by Brazilian market price index (Índice Geral de Preços do Mercado-IGPM) plus TJLP (Long-Term Interest Rate) or CDI.

Operating leases

As of March 31, 2016, the future minimum lease payments under non-cancellable leases are as follows:


	March 31, 2016		December 31, 2015
Future minimum lease payments
Less than one year		19,664		22,788
Between one and five years		23,904		24,364
More than five years		9,096		13,528

		52,664		60,680

Cosan Limited

Notes to the consolidated financial statements

For the quarters ended March 31, 2016 and 2015

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

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

17 Leases on concessions


	Leases		Concessions		Total		Judicial deposits
Payables
Malha Sul		38,892		27,181		66,073		—
Malha Paulista		—		25,416		25,416		—

		38,892		52,597		91,489		—
Court Discussion
Malha Paulista		1,226,495		1,559		1,228,054		116,983
Malha Oeste		940,225		60,641		1,000,866		18,439

		2,166,720		62,200		2,228,920		135,422

Total		2,205,612		114,797		2,320,409		135,422

Current						26,782

Non-current						2,293,627

18 Trade payables


	March 31, 2016			December 31, 2015
Natural gas suppliers		1,352,519			1,489,552
Materials and service suppliers		758,613			627,067
Fuels suppliers		1,693			3,535
Judicial deposits ⁽ⁱ⁾		(294,976	)		(294,976	)
Other		132,564			139,834

		1,950,413			1,965,012
Current		1,949,548			1,963,981

Non-current		865			1,031

(i)

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 September 2015 began to be secured by a bank guarantees. On March 31, 2016, the guaranteed value in the judicial deposit is R$ 294,976 and the guaranteed value through surety is of R$ 689,314.

Cosan Limited

Notes to the consolidated financial statements

For the quarters ended March 31, 2016 and 2015

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

19 Other taxes payable


	March 31, 2016		December 31, 2015
ICMS—State VAT		87,054		73,692
Tax Amnesty and Refinancing Program—REFIS		51,169		56,041
COFINS—Revenue tax		22,803		23,080
INSS—Social security		7,066		7,483
PIS—Revenue tax		4,906		4,670
Other		49,455		39,901

		222,453		204,867
Current		174,807		153,540

Non-current		47,646		51,327

20 Income tax and social contribution

a) Reconciliation of income and social contribution tax expenses:


	March 31, 2016			March 31, 2015
Profit before taxes		200,975			(53,964	)
Income tax and social contribution at nominal rate (34%)		(68,332	)		18,348
Adjustments to reconcile nominal to effective tax rate
Equity in earnings of investees (non-taxable income)		149,527			52,067
Compensation action		1,398			—
Differences in tax rates on earnings / losses of overseas companies		(43,108	)		22,287
Differences in tax rates on entities under Brazilian presumed profits tax regime		2,344			6,361
Tax profit of the activity (operating income)		10,691			—
Stock options		(1,003	)		(996	)
Interest on capital (net received)		(5,610	)		(6,120	)
Non-deductible expenses
(donations, gifts, etc.)		(2,037	)		(12,262	)
Tax losses not recorded		(69,917	)		(73	)
Other		5,827			79

Income tax and social contribution benefit (expense)—current and deferred		(20,220	)		79,691

Effective rate—%		10.06			147.67

Cosan Limited

Notes to the consolidated financial statements

For the quarters ended March 31, 2016 and 2015

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

b) Deferred income tax assets and liabilities:


	March 31, 2016												December 31, 2015
	Basis			Income taxes (25%)			Social contribution (9%)			Total income taxes (34%)			Total income taxes (34%)
Tax loss carry forwards
Income tax loss carry forwards		6,960,165			1,740,041			—			1,740,041			1,597,697
Social contribution tax loss carry forwards		7,019,123			—			631,721			631,721			580,269
Temporary differences
Foreign currency losses		2,171,889			542,972			195,470			738,442			937,281
Provision for judicial demands		1,086,937			271,734			97,824			369,558			354,730
Impairment		1,000,652			250,163			90,059			340,222			350,325
Business combination—Property, plant and equipment		648,855			162,214			58,397			220,611			246,757
Tax deductible goodwill		206,196			51,549			18,558			70,107			129,207
Gains or losses on actuarial liabilities		310,490			77,623			27,944			105,567			103,820
Allowance for doubtful accounts		290,575			72,644			26,152			98,796			95,015
Regulatory asset		221,559			55,390			19,940			75,330			76,764
Profit sharing		56,665			14,166			5,100			19,266			32,327
Concession contract		(35,495	)		(8,874	)		(3,195	)		(12,069	)		(12,552	)
Assets held for sale		(85,692	)		(1,714	)		(925	)		(2,639	)		(1,255	)
Business combination—Other fair value adjustments		(772,238	)		(44,697	)		(18,413	)		(63,110	)		(66,404	)
Property, plant and equipment		(281,206	)		(70,301	)		(25,309	)		(95,610	)		(147,749	)
Unrealized gains on derivatives instruments		(727,520	)		(181,880	)		(65,477	)		(247,357	)		(469,899	)
Unrealized gains on investment properties		(1,975,635	)		(39,513	)		(21,337	)		(60,850	)		(62,069	)
Gain on formation of joint ventures		(3,338,342	)		(834,586	)		(300,451	)		(1,135,037	)		(1,135,037	)
(-) Valuation allowance		(7,591,278	)		(1,194,617	)		(430,062	)		(1,624,679	)		(1,526,639	)
Business combination—Intangible assets		(11,258,292	)		(2,814,573	)		(1,013,246	)		(3,827,819	)		(3,839,323	)
Other		746,886			189,884			68,324			258,208			275,782

Total net liability					(1,762,375	)		(638,926	)		(2,401,301	)		(2,480,953	)
Deferred income tax—Assets											1,683,252			1,698,611
Deferred income tax—Liabilities											(4,084,553	)		(4,179,564	)

Total net deferred taxes											(2,401,301	)		(2,480,953	)

c) Changes in deferred income taxes, net:


At December 31, 2015—Net deferred tax liability	(2,480,953	)
Recorded through income	81,275
Recorded through other comprehensive income	877
Business combinations	(11,268	)
Other	8,768

At March 31, 2016—Net deferred tax liability	(2,401,301	)

Cosan Limited

Notes to the consolidated financial statements

For the quarters ended March 31, 2016 and 2015

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

21 Provision for legal proceedings


	Provision for legal proceedings				Judicial deposits
	March 31, 2016		December 31, 2015		March 31, 2016		December 31, 2015
Tax		446,656		441,674		379,242		377,435
Civil, regulatory and environmental		301,818		284,344		182,168		181,180
Labor		466,305		467,913		130,350		121,609

		1,214,779		1,193,931		691,760		680,224

Changes in provision for legal proceedings:


	Tax			Civil, regulatory and environmental			Labor			Total
At December 31, 2015		441,674			284,344			467,913			1,193,931
Accruals		1,979			8,541			22,831			33,351
Write-off / Reversals		(3,287	)		(3,925	)		(32,643	)		(39,855	)
Indexation and interest charges		6,290			12,858			8,204			27,352

At March 31, 2016		446,656			301,818			466,305			1,214,779

Tax claims

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


	March 31, 2016		December 31, 2015
Compensation with FINSOCIAL		258,489		255,022
State VAT—ICMS credits		80,937		79,417
INSS—Social security		59,181		57,916
PIS and COFINS		2,210		2,781
IPI—Excise tax credit—NT		1,125		1,105
Federal income taxes		329		329
Other		44,385		45,104

		446,656		441,674

Cosan Limited

Notes to the consolidated financial statements

For the quarters ended March 31, 2016 and 2015

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

b) Judicial claims deemed as possible losses, and therefore not accrued


	March 31, 2016		December 31, 2015
ICMS—State VAT		1,950,943		1,904,253
Federal income taxes ⁽ⁱ⁾		1,590,230		886,178
Foreign financial operation		929,997		911,942
PIS and COFINS—Revenue taxes		885,261		879,669
IRRF—Withholding tax		808,988		792,104
INSS—Social security and other		599,233		577,686
IPI—Excise tax credit—NT		489,983		484,606
Goodwill ALL		455,579		446,535
Penalties related to tax positions		365,020		258,391
Compensation with IPI—IN 67/98		124,737		123,522
MP 470—Tax installments		115,351		113,814
Intermodal		78,360		76,914
Stock option		58,688		57,554
Financial transactions tax on loan		51,073		49,844
Social security contributions		41,563		40,855
Compensation credit award		35,403		—
Other		956,623		952,651

		9,537,032		8,556,518

(i)

The tax contingencies relate to the tax assessments mainly in the Federal sphere assessed as possible losses by the legal counsel and management and, therefore, no reserve was required. Until the date of approval of the interim financial statements, the Company had science assessment notice on goodwill amortization expense amounting possible is R$598,052. The tax assessment is questioned at the administrative level.

Civil, labor, regulatory and environmental

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

•

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

•

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

•

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

•

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

Cosan Limited

Notes to the consolidated financial statements

For the quarters ended March 31, 2016 and 2015

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

b) Judicial claims deemed as possible losses, and therefore not accrued

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


	March 31, 2016		December 31, 2015
Civil		2,436,926		2,385,643
Labor		1,024,388		960,446
Regulatory		364,344		339,267
Environmental		314,168		295,984

		4,139,826		3,981,340

22 Shareholders’ equity

a) Share capital

As of March 31, 2016, Cosan Limited’s share capital is composed of the following:


Shareholders—Common shares	Class A and / or BDRs		%		Class B1 shares		%
Queluz Holdings Limited		5,241,111		3.01		66,321,766		68.85
Usina Costa Pinto S.A. Açúcar e Álcool		—		—		30,010,278		31.15
Gávea Investimentos Ltda.		21,167,463		12.14		—		—
Skagen AS		16,120,419		9.25		—		—
MSOR Participações S.A.		1,811,250		1.04		—		—
Other		124,018,596		71.14		—		—

Total shares outstanding		168,358,839		96.56		96,332,044		100.00

Treasury shares		5,996,502		3.44		—		—
Total		174,355,341		100.00		96,332,044		100.00

b) Treasury shares

The Company holds 5,996,502 Class A treasury shares as of March 31, 2016 and December 31, 2015 with a market value of US$4.92 per share at December 31, 2015 (US$3.69 per share at December 31, 2015).

c) Other comprehensive (loss) income


	December 31, 2015			Comprehensive (loss) income			March 31, 2016
Foreign currency translation effects		(468,350	)		33,810			(434,540	)
Loss on cash flow hedge in joint ventures and subsidiaries		(235,779	)		(27,092	)		(262,871	)
Revaluation of investment properties reclassified from property, plant and equipment		190,735			—			190,735
Actuarial gain on defined benefit plan		28,032			—			28,032
Changes in fair value of available for sale securities		6,748			(1,702	)		5,046

Total		(478,614	)		5,016			(473,598	)

Cosan Limited

Notes to the consolidated financial statements

For the quarters ended March 31, 2016 and 2015

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


Attributable to:
Owners of the Parent	(478,207	)	3,322	(474,885	)
Non-controlling interests	(407	)	1,694	1,287


	December 31, 2014			Comprehensive (loss) income			March 31, 2015
Foreign currency translation effects		(298,446	)		(80,686	)		(379,132	)
Gain (loss) on cash flow hedge in joint ventures and subsidiaries		(10,574	)		20,735			10,161
Revaluation of investment properties reclassified from property, plant and equipment		190,735			—			190,735
Actuarial (losses) gain on defined benefit plan		47,104			—			47,104
Changes in fair value of available for sale securities		(1,467	)		981			(486	)

Total		(72,648	)		(58,970	)		(131,618	)

Attributable to:
Owners of the Parent		(165,618	)		(59,998	)		(225,616	)
Non-controlling interests		92,970			1,028			93,998

23 Earnings per share

The following table sets forth the calculation of earnings per share for the quarter ended March 31, 2016 and 2015 (in thousands of Brazilian Reais, except per share amounts):


	March 31, 2016			March 31, 2015
Profit attributable to ordinary equity holders for basic earnings		131,308			9,539
Effect of dilution:
Dilutive effect of subsidiary’s stock option plan		(328	)		69
Dilutive effect of put option		(15,601	)		(15,601	)

Profit attributable to ordinary equity holders adjusted for the effect of dilution		115,379			(5,993	)

Weighted average number of shares outstanding		264,690,883			264,690,883
Basic earnings per share from continuing operations		R$0.50			R$0.04
Diluted earnings per share from continuing operations		R$0.44			(R$0.02	)

Cosan Limited

Notes to the consolidated financial statements

For the quarters ended March 31, 2016 and 2015

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

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

ALL Malha Norte issued to BNDES Participações S.A., bonds convertible in to shares, remunerated at market rates, amounting to R$ 2,553 on March 31, 2016, whose maturity date is June 2016.

The stock option plan is out of money, so, the exercise price of the options granted is much higher than the average stock price during the period. These financial instruments have antidilutive effects in the periods presented.

24 Financial results


	March 31, 2016			March 31, 2015
Cost of gross debt
Interest on debt		(434,685	)		(177,484	)
Exchange and monetary variations		500,422			(692,766	)
Derivatives		(700,125	)		620,756
Guarantees and warranties on debt		(37,096	)		(5,744	)

		(671,484	)		(255,238	)
Income from financial investment		119,176			48,876

Cost of debt, net		(552,308	)		(206,362	)

Other charges and monetary variations
Monetary variation on leases and concessions agreements		(73,408	)		—
Monetary restatement and interest on leases		(50,705	)		—
Interest on other receivables		35,501			(9,528	)
Interest on other liabilities		(196,627	)		(68,859	)
Bank charges		11,173			(15,816	)
Other		21,621			42,142

		(252,445	)		(52,061	)

Financial results, net		(804,753	)		(258,423	)

Reconciliation
Finance expense		(876,738	)		(291,612	)
Finance income		250,773			69,791
Foreign exchange losses, net		525,354			(591,834	)
Derivatives		(704,142	)		555,232

Financial results, net		(804,753	)		(258,423	)

Cosan Limited

Notes to the consolidated financial statements

For the quarters ended March 31, 2016 and 2015

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

25 Other income expense, net


	March 31, 2016			March 31, 2015
Insurance reimbursement income		7,150			2,505
Rental income		385			168
Cost related to internal organization and prospective acquisitions		—			(103,844	)
Changes in the fair value of investment properties		(290	)		14,320
Loss on disposal of non-current assets		(6,493	)		(1,282	)
Provisions for legal proceedings		(37,869	)		(9,200	)
Other		(449	)		(1,991	)

		(37,566	)		(99,324	)

26 Financial instruments

Financial risk management

Overview

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

•

Credit risk;

•

Liquidity risk; and

•

Market risk.

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

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


	March 31, 2016		December 31, 2015
Assets
Fair value through profit or loss
Investment funds		1,916,368		2,244,427
Marketable securities		549,694		749,698
Derivate financial instruments		1,984,445		2,430,296

		4,450,507		5,424,421
Loans and receivables
Cash and cash equivalents		1,293,284		1,261,397
Trade receivables		965,841		964,978
Receivables from related parties		316,817		296,574
Dividends receivable		146,730		12,064

		2,722,672		2,535,013
Total		7,173,179		7,959,434

Cosan Limited

Notes to the consolidated financial statements

For the quarters ended March 31, 2016 and 2015

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


Liabilities
Liabilities amortized cost
Loans, borrowings and debentures	13,877,349	13,895,414
Leases	1,730,691	1,741,701
Advances on real state credits	265,835	285,006
Trade payables	1,950,413	1,965,012
Other financial liabilities	132,246	236,698
Payables to related parties	242,961	204,080
Contingent consideration	150,255	217,377
Dividends payable	36,108	39,934
Tax installments—REFIS	51,169	56,041
Preferred shareholders payable in subsidiaries	2,111,942	2,042,878

	20,548,969	20,684,141
Fair value through profit or loss
Loans, borrowings and debentures	4,557,115	4,933,789
Post-employment benefits	349,414	344,447
Derivative financial instruments	999,329	742,498

	5,905,858	6,020,734
	26,454,827	26,704,875

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 March 31, 2016 and December 31, 2015, the fair values relating to transactions involving derivative financial instruments to protect the Company’s risk exposure were using observable inputs such as quoted prices in active markets, or discounted cash flows based on market curves, and are presented below:


	Notional				Fair value
	March 31, 2016		December 31, 2015		March 31, 2016			December 31, 2015
Exchange rate derivatives
Forward agreements		1,826,141		2,058,190		(251,844	)		46,247
Interest rate and exchange rate risk
Swap agreements (interest rate)		1,088,636		1,083,526		(60,559	)		(107,230	)
Cross currency interest rate swaps		4,410,543		4,629,948		1,297,519			1,748,781

		5,499,179		5,713,474		1,236,960			1,641,551
Total financial instruments						985,116			1,687,798

Assets						1,984,445			2,430,296

Liabilities						(999,329	)		(742,498	)

Cosan Limited

Notes to the consolidated financial statements

For the quarters ended March 31, 2016 and 2015

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

Credit risk


	March 31, 2016		December 31, 2015
Cash and cash equivalents ⁽ⁱ⁾		3,209,652		3,505,824
Trade receivables ⁽ⁱⁱ⁾		965,841		964,978
Derivative financial instruments ⁽ⁱⁱⁱ⁾		1,984,445		2,430,296
Marketable securities		549,694		749,698
Dividends receivable		146,730		12,064

		6,856,362		7,662,860

(i)	The cash and cash equivalents are held with bank and financial institution counterparties, which are rated BB to AAA.

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


	March 31, 2016		December 31, 2015
AAA		530,803		1,473,089
AA		3,966,318		4,068,000
A		809,141		357,399
BB		51,455		207,097
BBB		386,074		580,233

		5,743,791		6,685,818

(ii)

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

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

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

Credit risk from balances with banks and financial institutions is managed by the Company’s treasury department in accordance with the Company’s policy.

Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits are reviewed on an annual basis and may be updated throughout the year. The limits are set to minimize the concentration of risks and therefore mitigate financial loss through potential counterparty’s failure to make payments. The Company’s maximum exposure to credit risk for the components of the statement of financial position is the carrying amounts as illustrated in Note 15. The Company’s maximum exposure for financial guarantees and financial derivative instruments are as below.

Cosan Limited

Notes to the consolidated financial statements

For the quarters ended March 31, 2016 and 2015

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

Liquidity risk

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

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


	March 31, 2016															December 31, 2015
	Up to 1 year			1—2 years			3—5 years			More than 5 years			Total			Total
Loans, borrowings and debentures		(3,804,154	)		(3,934,110	)		(7,558,221	)		(6,141,810	)		(21,438,295	)		(29,450,102	)
Trade payables		(1,949,518	)		(895	)		—			—			(1,950,413	)		(1,965,012	)
Other financial liabilities		(132,246	)		—			—			—			(132,246	)		(236,698	)
REFIS		(12,958	)		(11,803	)		(22,128	)		(9,607	)		(56,496	)		(64,529	)
Leases		(671,470	)		(497,844	)		(664,222	)		(303,196	)		(2,136,732	)		(2,132,455	)
Advances on real estate credits		(138,824	)		(136,354	)		(72,601	)		—			(347,779	)		(382,559	)

		(6,709,170	)		(4,581,006	)		(8,317,172	)		(6,454,613	)		(26,061,961	)		(34,231,355	)

Market risk

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

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

a) Foreign exchange risk

As at March 31, 2016 and December 31, 2015, the Company and its subsidiaries had the following net exposure to the exchange rate variations on assets and liabilities denominated in Brazilian Reais:

Cosan Limited

Notes to the consolidated financial statements

For the quarters ended March 31, 2016 and 2015

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


	March 31, 2016						December 31, 2015
	R$			US$			R$			US$
Cash and cash equivalents		471,420			132,462			256,003			65,561
Trade receivables		17,481			4,912			18,227			4,668
Advances to suppliers		62,010			17,424			85,155			21,808
Trade payables		(16,372	)		(4,600	)		(15,894	)		(4,070	)
Loans, borrowings and debentures		(6,025,417	)		(1,693,056	)		(6,653,006	)		(1,703,802	)
Advances from clients		(14,422	)		(4,052	)		(1,701	)		(436	)
Contingent consideration		(17,993	)		(5,056	)		(65,064	)		(16,663	)
Derivative financial instruments		6,236,684			1,752,419			6,688,138			1,712,799

Foreign exchange exposure, net		713,391			200,453			311,858			79,865

Sensitivity analysis on changes in foreign exchange rates:

The probable scenario was defined based on the U.S. Dollar market rates as at March 31, 2016, which determines the fair values of the derivatives at that date. Stressed scenarios (positive and negative effects, before tax effects) were defined based on changes of a 25% and 50% to the U.S. Dollar exchange rates used in the probable scenario.

Based on the financial instruments denominated in U.S. Dollars at March 31, 2016, the Company performed a sensitivity analysis by increasing and decreasing the exchange rate for R$/US$ by 25% and 50%. The probable scenario considers the estimated exchange rates at the due date of the transactions for the companies with functional currency Real (positive and negative, before tax effects), as follows:

Exchange rate sensitivity analysis (R$/US$)

March 31,
2016

Scenario

Probable

25%

50%

-25%

-50%

At March 31, 2016

3.5589

3.9600

4.9500

5.9400

2.9700

1.9800

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		53,129			184,267			315,404			(78,008	)		(209,145	)
Trade receivables		USD fluctuation		1,970			6,833			11,696			(2,893	)		(7,755	)
Advances to suppliers		USD fluctuation		6,989			24,238			41,488			(10,261	)		(27,511	)
Trade payables		USD fluctuation		(1,845	)		(6,399	)		(10,954	)		2,709			7,263
Exchange rate derivatives ⁽ⁱ⁾		USD fluctuation		205,808			713,795			1,221,782			(302,179	)		(810,167	)
Exchange rate		USD and
and interest derivatives ⁽ⁱ⁾		CDI fluctuation		497,072			1,723,976			2,950,880			(729,832	)		(1,956,735	)
Loans, borrowings and debentures		USD fluctuation		(679,070	)		(2,355,192	)		(4,031,313	)		997,052			2,673,174
Advances from clients		USD fluctuation		(1,625	)		(5,637	)		(9,649	)		2,386			6,398
Contingent consideration		USD fluctuation		(2,028	)		(7,033	)		(12,038	)		2,977			7,983

Impacts on profit or loss				80,400			278,848			477,295			(118,048	)		(316,496	)

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

Cosan Limited

Notes to the consolidated financial statements

For the quarters ended March 31, 2016 and 2015

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

b) Interest rate risk

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

Sensitivity analysis on changes in interest rates:

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


	March 31, 2016
Exposure interest rate ⁽ⁱ⁾	Probable			25%			50%			-25%			-50%
Cash and cash equivalents		372,248			93,062			186,124			(93,062	)		(186,124	)
Marketable securities		75,858			18,964			37,929			(18,964	)		(37,929	)
Leases		(37,563	)		(9,171	)		(18,343	)		9,171			18,343
Advances on real state credits		(177,209	)		(33,218	)		(56,789	)		33,218			56,789
Interest rate derivatives		(60,559	)		(97,768	)		(185,369	)		110,338			236,375
Loans, borrowings and debentures		(1,667,037	)		(416,759	)		(833,518	)		416,759			833,518

Impacts on profit or loss		(1,494,262	)		(444,890	)		(869,966	)		457,460			920,972

The probable scenario considers the estimated interest rate, as follows:


	Probable			25%			50%			-25%			-50%
SELIC		13.82	%		17.28	%		20.73	%		10.37	%		6.91	%
CDI		13.80	%		17.25	%		20.70	%		10.35	%		6.90	%
TJ462		8.50	%		10.63	%		12.75	%		6.38	%		4.25	%
TJLP		7.50	%		9.38	%		11.25	%		5.63	%		3.75	%
IPCA		5.65	%		7.06	%		8.47	%		4.24	%		2.82	%
LIBOR		1.20	%		1.50	%		1.80	%		0.90	%		0.60	%

Financial instruments fair value

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

•

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

•

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

Cosan Limited

Notes to the consolidated financial statements

For the quarters ended March 31, 2016 and 2015

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

•

The market value of the Senior Notes Due 2018 and 2023 listed on the Luxembourg Stock Exchange (Note 15) is based on their quoted market price as of March 31, 2016, of 81.60% (78.71% on December 31, 2015) and 87.85% (83.83% at December 31, 2015), respectively, of the face nominal value at March 31, 2016.

•

The fair value of Perpetual Notes listed on the Luxembourg Stock Exchange (Note 15) is based on their quoted market price as March 31, 2016 of 84.44% (79.64% at December 31, 2015) of the face value of obligations at March 31, 2016.

•

The fair value of other loans and financing, the respective market values substantially approximate the amounts recorded due to the fact that these financial instruments are subject to variable interest rates (Note 15).

•

The fair values of the remaining of assets held for sale are derived from quoted market prices in active markets.

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

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

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


	Carrying amount						Assets and liabilities measured at fair value
	March 31, 2016			December 31, 2015			March 31, 2016					December 31, 2015
	March 31, 2016			December 31, 2015			Level 1		Level 2			Level 1		Level 2
Assets
Investment funds		1,916,368			2,244,427			—		1,916,368			—		2,244,427
Marketable securities		549,694			749,698			—		549,694			—		749,698
Derivate financial instruments		1,984,445			2,430,296			—		1,984,445			—		2,430,296

Total		4,450,507			5,424,421			—		4,450,507			—		5,424,421

Liabilities
Loans, borrowings and debentures		(4,557,115	)		(4,933,789	)		—		(4,557,115	)		—		(4,933,789	)
Post-employment benefits		(349,414	)		(344,447	)		—		(349,414	)		—		(344,447	)
Derivative financial instruments		(999,329	)		(742,498	)		—		(999,329	)		—		(742,498	)

Total		(5,905,858	)		(6,020,734	)		—		(5,905,858	)		—		(6,020,734	)

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.

Cosan Limited

Notes to the consolidated financial statements

For the quarters ended March 31, 2016 and 2015

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

Operations and accounting effects of this adoption are as follows:


	Debt			Derivative			Total
At December 31, 2015		2,522,772			(822,586	)		1,700,186
Interest amortization		(45,299	)		(42,401	)		(87,700	)
Fair value		(123,442	)		982,131			858,689

At March 31, 2016		2,354,031			117,144			2,471,175

Capital management

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

27 Post-employment benefits


	March 31, 2016		December 31, 2015
Futura		48,236		48,414
Futura II		342		335
COMGÁS		300,836		295,698

		349,414		344,447

During the period ended March 31, 2016, the expense recognized in relation to the actuarial contributions was R$6,921 (R$7,577 on March 31, 2015).

28 Share-based payment

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


	Expected life (years)								Number of instruments on March 31, 2016						Market price on grant date		Exercise price at March 31, 2016		Fair value at grant date –R$ ⁽ⁱ⁾
			Interest rate			Expected volatility			Granted		Exercisable options		Outstanding
Share option programs			Interest rate			Expected volatility			Granted		Exercisable options		Outstanding
August 18, 2011 (A)		1 to 5		12.39	%		31.44	%		4,825,000		1,285,000		2,250,000		22.98		26.72		6,80
August 18, 2011 (B)		1 to 10		12.39	%		30.32	%		5,000,000		1,080,000		4,080,000		22.98		26.72		8,15
December 12, 2012 (C)		1 to 5		8.78	%		31.44	%		700,000		372,000		652,000		39.80		46.29		10.10
April 24, 2013		5		13.35	%		27.33	%		970,000		—		930,000		46.51		52.95		17,95
April 25, 2014		5		12.43	%		29.85	%		960,000		—		930,000		37.10		43.22		15,67
August 31, 2015		5		14.18	%		33.09	%		759,000		—		759,000		18.15		20.03		7.67
October 2, 2015		5		15.66	%		62.94	%		4,485,238		—		4,205,238		6.30		7.72		2.83

										17,699,238		2,737,000		13,806,238

(i)

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

Cosan Limited

Notes to the consolidated financial statements

For the quarters ended March 31, 2016 and 2015

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

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


	Number of options			Weighted- average exercise price – R$
At December 31, 2015		13,876,238			24.22
Cancellation or settlements		(70,000	)		—

At March 31, 2016		13,806,238			24.37

29	Subsequent events

29.1

Capital increase in subsidiary Cosan Logística

On April 13, 2016 approved the capital increase of R$580,000 through the issuance of 1.054.545.455 (one billion, fifty four million, five hundred and forty-five thousand, and four hundred and fifty five) common shares. These funds will be used to increase capital in the subsidiary Rumo. On the same date it approved the reverse stock split at a ratio of four (4) common shares to one (1) common share.

29.2

Capital increase in indirect subsidiary Rumo

On April 13, 2016 Rumo completed a capital increase, pursuant to CVM Rule 476 and Regulation “S” for foreign investors, of R$2,600,000 (cash received, net of issuance costs, totaled R$2,545,877) through the issuance of 1,040,000,000 (one billion and forty million) Rumo’s common shares of which the Company paid the amount of R$750,000. These funds will be used for cash strengthening and financing of Rumo’s business plan.

29.3

Capital increase in indirect subsidiary COMGÁS

On April 26, 2016 COMGÁS approved the capital increase of R$168,828, from R$1,143,548 on December 31, 2015 to R$1,312,376, through the capitalization of capital reserve in the amount of the effective credit tax earned by the Company in the year ended December 31, 2015.

29.4

Exercise of right of stocks exchange

On April 22, 2016, the GIF, a subsidiary of Gávea Investimentos and shareholder of Rumo, exercised its right to exchange or swap 12,831,102 shares issued by Rumo for shares issued by Cosan S.A. and shares issued by Cosan Logística, pursuant to the shareholders’ agreement entered into in 2010, as amended, between Cosan Logística, TPG VI Fundo de Investimento em Participações, GIF, Cosan S.A and Cosan Limited.

The exchange ratio established is 19.246654 Bound Shares to one (1) share of Cosan S.A. and one (1) share of Cosan Logística, subject to usual adjustments to be determined within the contractual terms, such as Rumo’s share grouping, which is determined within the established contractual terms. The Company has 120 days after April 22, 2016 to complete the transaction.

***

SIGNATURES

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

Date: May 13, 2016


COSAN LIMITED

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

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