Cosan S.A. Indústria e Comércio

Transcription

1 Interim financial statements at September and auditor s report (A free translation of the original in Portuguese)

2 Interim Financial statements For the three and nine months period ended September and December 31, 2014 Contents Independent auditor report on review of interim financial statements... 2 Statement of financial position... 4 Statement of profit or loss and other comprehensive income... 6 Statement of changes in shareholders equity Statement of cash flows Statement of value added Notes to the consolidated interim financial statements

3 Independent auditor report on review of consolidated interim financial statements To the Board of Directors and Shareholders Cosan S.A. Indústria e Comércio São Paulo - SP Introduction We have reviewed the accompanying individual and consolidated interim financial information of Cosan S.A. Indústria e Comércio ( The Company ), contained in the Quarterly Information Form - ITR for the quarter ended September, which comprises the statement of financial position as of September and the respective statements of profit or loss and comprehensive income (loss) for the three and nine month periods then ended, and changes in shareholders equity and cash flows for the nine month period then ended, including the footnotes. Management is responsible for the preparation of the individual interim financial information in accordance with the Technical Pronouncement CPC 21(R1) - Interim Financial Information, and the consolidated interim financial information in accordance with CPC 21(R1) and the international standard IAS 34 - Interim Financial Reporting, issued by the International Accounting Standards Board - IASB, such as for the presentation of these information in accordance with the standards issued by the Brazilian Securities Commission - CVM, applicable to the preparation of Quarterly Information - ITR. Our responsibility is to express a conclusion on these interim financial information based on our review. Review scope We conducted our review in accordance with the Brazilian and International standards on reviews of interim information (NBC TR Review of Interim Financial Information Performed by the Independent Auditor of the Entity and ISRE Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively). A review of interim information consists of making inquiries, primarily of persons responsible for the financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with the audit standards and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion on the interim financial information Based on our review, nothing has come to our attention that causes us to believe that the interim financial information included in the Quarterly Information - ITR referred to above has not been prepared, in all material respects, in accordance with CPC 21(R1) and IAS 34 applicable to the preparation of Quarterly Information - ITR, and presented in accordance with the standards issued by the Brazilian Securities Commission - CVM. Others matters Interim information of the value added We have also reviewed the individual and consolidated statements of value added (DVA), related to the nine month period ended September, prepared under the responsibility of the 3

4 Company s management, which presentation in the interim information is required in accordance with standards issued by the Brazilian Securities Commission - CVM applicable to the preparation of Quarterly Information - ITR, and is considered as a supplementary information under IFRS, which do not require the presentation of DVA. These statements were subject to the same review procedures described above, and based on our review, nothing has come to our attention that causes us to believe that it has not been prepared, in all material respects, in accordance with the individual and consolidated interim financial information taken as a whole. Corresponding values The individual and consolidated financial information for the year ended December 31, 2014 presented for comparative purposes, were audited by other independent auditors, who issued an unqualified audit report on March 18, The individual and consolidated financial information for the nine month period ended on September 30, 2014, prepared originally before the partial spin-off of the Company and merger of the spun-off portion into Cosan Logística, which corresponds to the Company s logistics operations, described in note 2.3, were reviewed by other independent auditors, who issued an unqualified review report on November 5, As part of our review of the interim financial information for the nine month period ended on September, we reviewed the adjustments in the corresponding values of the interim financial information of 2014 and nothing has come to our attention that causes us to believe that it has not been prepared, in all material respects appropriately. We were not engaged to audit, review or apply any procedures to the interim financial information for the nine month period ended September 30, 2014, accordingly, we do not express an opinion or any other form of assurance on the interim financial information taken as a whole. The corresponding amounts related to the statements of value added (DVA), individual and consolidated, related to nine month period ended September 30, 2014, are submitted to the same review procedures for those independent auditors and, based on their review, those auditors issued report reporting that they had no knowledge of any fact which would lead them to believe that the DVA was not prepared, in all material respects, consistent with the individual and consolidated interim financial information taken as a whole. São Paulo, November 10, 2015 KPMG Auditores Independentes CRC 2SP014428/O-6 Original report in Portuguese signed by Carlos Augusto Pires Accountant CRC 1SP184830/O-7 4

5 Statement of financial position As of September and December 31, 2014 (In thousands of Brazilian Reais - R$) September Parent Company December 31, 2014 September December 31, 2014 Note Assets Cash and cash equivalents 4 40, ,004 1,865,000 1,540,192 Securities , ,735 Trade receivables , ,424 Derivative financial instruments ,820 6, ,899 30,069 Inventories , ,903 Receivables from related parties 7 47,912 29,413 85,912 51,387 Income tax 8,930 36,081 86,099 93,780 Taxes recoverable 3, ,483 78,516 Other financial assets 6 76,445 69,683 76,445 69,683 Dividends receivable 79,392 47, ,938 36,130 Other 28, ,748 65, ,480 Asset held for sale ,295 25,089 Total Current assets 683, ,504 4,709,616 3,408,388 Trade receivables ,933 34,299 Deferred tax assets , ,288 Receivables from related parties 7 185, , , ,527 Income tax 8,778 8,778 8,778 8,778 Taxes recoverable ,215 17,299 Judicial deposits , , , ,714 Other financial assets 6-38, ,497 Derivative financial instruments 23 1,212, ,988 2,084, ,297 Other non-current asset 592, , , ,912 Equity method investments 8 11,606,895 11,040, , ,678 Investment in joint ventures 9 2,850,166 2,942,384 8,279,197 8,404,502 Investment properties ,385,932 2,641,978 Property, plant and equipment 11 25,324 26, , ,435 Intangible assets 12 6,734 6,342 9,414,262 9,426,120 Total non-current assets 16,734,982 15,408,875 24,469,124 23,695,324 Total Assets 17,418,603 16,105,379 29,178,740 27,103,712 The accompanying notes are an integral part of these interim financial statements. 5

6 Statement of financial position As of September and December 31, 2014 (In thousands of Brazilian Reais - R$) Parent Company September December 31, 2014 September December 31, 2014 Note Liabilities Loans and borrowings , ,006 1,147, ,334 Derivative financial instruments 23-8, ,803 Trade payables ,528 1,545, ,170 Employee benefits 19,534 19,451 94, ,115 Income tax payable - 21,134 42,988 27,626 Other taxes payable 15 22, , , ,435 Dividends payable 15,106 12,437 15,756 20,347 Payables to related parties 7 409,167 1,669, , ,449 Other 18,612 40, , ,930 Total current liabilities 871,429 2,240,784 3,219,208 2,545,209 Loans and borrowings ,852,483 6,541,268 Preferred shareholders payable in subsidiaries 18 2,106,730 1,926,888 2,106,730 1,926,888 Derivative financial instruments ,763 64, , ,632 Other taxes payable ,411 2, , ,565 Provision for judicial demands , , , ,401 Payables to related parties 7 4,791,309 1,888, Pension and post-employment 25 benefits , ,764 Deferred tax liabilities , ,311 1,482,922 1,542,676 Other payable 111, , , ,036 Total non-current liabilities 8,111,840 5,046,319 13,816,538 12,109,230 Total liabilities 8,983,269 7,287,103 17,035,746 14,654,439 Equity 19 Share capital 3,822,725 3,632,231 3,822,725 3,632,231 Treasury shares (58,694) (58,694) (58,694) (58,694) Capital reserve 955, , , ,694 Other comprehensive income 70, ,298 70, ,298 Profit reserve 3,653,252 4,118,747 3,653,252 4,118,747 Retained earnings (7,580) - (7,580) - Equity attributable to: Owners of the Company 8,435,334 8,818,276 8,435,334 8,818,276 Non-controlling interests ,707,660 3,630,997 Total equity 8,435,334 8,818,276 12,142,994 12,449,273 Total equity and liabilities 17,418,603 16,105,379 29,178,740 27,103,712 The accompanying notes are an integral part of these interim financial statements. 6

7 Statement of profit or loss and other comprehensive income For the three and nine months period ended September and 2014 (In thousands of Brazilian Reais R$, except earnings per share) July 1, 2015 to September January 1, 2015 to September Parent Company July 1, 2014 to September 30, 2014 (Restated) January 1, 2014 to September 30, 2014 (Restated) Note General and administrative expenses (30,075) (91,225) (25,141) (75,383) Other expense, net 22 (12,588) (126,613) (18,500) (150,334) Operating expenses (42,663) (217,838) (43,641) (225,717) Loss before financial results, equity in earnings and income taxe (42,663) (217,838) (43,641) (225,717) Equity in earnings of investees Equity in earnings of associates 8 348, ,759 79, ,479 Equity in earnings of jointly controlled entity 9 (27,229) (92,218) 91, , , , , ,309 Financial results 21 Finance expense (114,404) (350,152) (98,409) (354,343) Finance income 58, ,656 13,314 83,940 Foreign exchange losses, net (1,130,449) (1,706,861) (298,747) (131,844) Derivatives 757,549 1,209, ,348 30,351 (428,696) (729,365) (229,494) (371,896) (Loss) Profit before taxes (149,849) (290,662) (102,668) 96,696 Income tax (expense) benefits 16 Current ,422 Deferred 136, ,082 89, , , ,082 89, ,364 (Loss) profit from continuing operations (13,343) (7,580) (13,151) 306,060 Profit from discontinued operation, net of tax ,384 69,442 (Loss) profit for the period (13,343) (7,580) 15, ,502 7

8 Statement of profit or loss and other comprehensive income For the three and nine months period ended September and 2014 (In thousands of Brazilian Reais R$, except earnings per share) Other comprehensive income Items that will never be reclassified to profit or loss: Actuarial gain on defined benefit plan - - 1, Taxes on items that will never be reclassified to profit or loss - - (621) (314) - - 1, Items that are or may be reclassified to profit or loss: Foreign currency translation differences (38,674) (65,361) (4,634) (16,659) Loss on cash flow hedge in jointly controlled entity (96,944) (40,789) (41,833) (83,214) Changes in fair value of available for sale securities 515 1, Taxes on items that are may be reclassified to profit or loss ,201 27,978 (135,103) (104,952) (32,201) (70,968) Total other comprehensive loss, net of tax (135,103) (104,952) (30,995) (70,359) Total comprehensive income (148,446) (112,532) (15,762) 305,143 Earning per share Continued operations 20 (R$0,03) (R$0,02) (R$0,03) R$0,75 Discontinued operations - - R$0,07 R$0,18 (R$0,03) (R$0,02) R$0,04 R$0,93 Earning per share Continued operations 20 (R$0,03) (R$0,02) (R$0,03) R$0,74 Discontinued operations - - R$0,07 R$0,17 The accompanying notes are an integral part of these interim financial statements. (R$0,03) (R$0,02) R$0,04 R$0,91 8

9 Statement of profit or loss and other comprehensive income For the three and nine months period ended September and 2014 (In thousands of Brazilian Reais R$, except earnings per share) July 1, 2015 to September January 1, 2015 to September July 1, 2014 to September 30, 2014 (Restated) January 1, 2014 to September 30, 2014 (Restated) Note Net sales 2,259,238 6,316,777 2,100,950 6,105,710 Cost of sales (1,619,341) (4,475,042) (1,488,800) (4,302,578) Gross profit 639,897 1,841, ,150 1,803,132 Selling expenses (231,060) (671,419) (229,667) (660,572) General and administrative expenses (143,793) (427,269) (133,887) (392,089) Other income (expense), net 22 (12,413) (113,187) (5,509) (102,990) Operating expenses (387,266) (1,211,875) (369,063) (1,155,651) Income before financial results, equity in earnings and income taxes 252, , , ,481 Equity in earnings of investees Equity in earnings of associates (2,740) (3,369) (2,702) Equity in earnings of jointly controlled entity 9 28, ,812 79, ,633 29, ,072 75, ,931 Financial results 21 Finance expense (270,170) (829,683) (248,536) (704,344) Finance income 140, ,002 44, ,825 Foreign exchange losses, net (180,793) (641,767) (209,636) (108,077) Derivatives 105, , ,513 58,433 (204,126) (749,601) (296,751) (610,163) Profit before taxes 77, ,331 22, ,249 Income tax (expense) benefits 16 Current (11,393) (118,882) (38,792) (92,061) Deferred (6,662) 148,923 74, ,223 (18,055) 30,041 35,230 21,162 Profit from continuing operations 59, ,372 57, ,411 Profit from discontinued operation, net of tax ,324 92,698 Profit for the period 59, ,372 95, ,109 9

10 Statement of profit or loss and other comprehensive income For the three and nine months period ended September and 2014 (In thousands of Brazilian Reais R$, except earnings per share) Other comprehensive income Items that will never be reclassified to profit or loss: Actuarial gain on defined benefit plan - - 3,027 1,611 Taxes on items that will never be reclassified to profit or loss - - (1,029) (548) - - 1,998 1,063 Items that are or may be reclassified to profit or loss: Foreign currency translation differences (38,674) (65,361) (4,634) (16,658) Loss on cash flow hedge in jointly controlled entity (97,338) (40,459) (41,833) (83,214) Changes in fair value of available for sale securities 4,132 7, ,411 Taxes on items that are may be reclassified to profit or loss (504) (2,901) 14,201 27,472 (132,384) (101,160) (32,201) (69,989) Total other comprehensive loss), net of tax (132,384) (101,160) (30,203) (68,926) Total comprehensive income (72,748) 83,212 65, ,183 Total net income attributable to: Owners of the Company (including discontinued operations) (13,344) (7,580) 15, ,502 Non-controlling interests 72, ,952 80, ,607 Total comprehensive income attributable to: Owners of the Company (148,447) (112,532) (15,762) 305,143 Non-controlling interests 75, ,744 81, ,040 The accompanying notes are an integral part of these interim financial statements. 10

11 Statements of changes in shareholder equity For the nine months period ended on September and 2014 (Amounts in thousands of Brazilian Reais R$) Common Stock Treasury share Capital Reserve Others equity components Legal Statutory reserve Profit Reverse Unrealized earnings Retained earnings Accumulated losses Total Noncontrolling interest January 01, ,691,822 (104,337) 856, , ,030 2,417, ,318 1,168,151-9,736,858 3,778,512 13,515,370 Profit for the nine months , , , ,109 Gain (loss) on cash flow hedge in jointly controlled entity (54,921) (54,921) - (54,921) Foreign currency translation effects (16,659) (16,659) - (16,659) Actuarial gain on defined benefit plan ,063 Change in fair value of available for sale securities ,591 Total comprehensive income for the year (70,359) , , , ,183 Exercise of stock options plan - 45, ,643-45,643 Dividends (63,645) (30,744) - - (94,389) (79,850) (174,239) Share based compensation - - 7, ,689-7,689 Total contributions by and distributions to owners of the Cosan - 45,643 7, (63,645) (30,744) - - (41,057) (79,850) (120,907) Cost of issuance of preferred shares in subsidiary - - (35,814) (35,814) - (35,814) Acquisition cost of the preferred shares of subsidiaries - - (1,316) (1,316) 3,514 2,198 Total contributions by and distributions to owners of the Cosan - - (37,130) (37,130) 3,514 (33,616) Spetember 30, ,691,822 (58,694) 827, , ,030 2,353, ,574 1,168, ,502 9,963,814 3,941,216 13,905,030 The accompanying notes are an integral part of these interim financial statements. Total Equity 11

12 Statements of changes in shareholder equity For the nine months period ended on September and 2014 (Amounts in thousands of Brazilian Reais R$) Common stock Treasury share Capital reserve Others equity components Legal Statutory reserve Profit reverse Unrealized earnings Retained earnings Accumulated loss Total Noncontrolling interest Total equity January 01, ,632,231 (58,694) 950, , ,631 2,481, ,574 1,168,151-8,818,276 3,630,997 12,449,273 Profit for the nine months (7,580) (7,580) 191, ,372 Gain (loss) on cash flow hedge in jointly controlled entity (40,789) (40,789) - (40,789) Foreign currency translation effects (65,361) (65,361) - (65,361) Change in fair value of available for sale securities , ,198 3,792 4,990 Total comprehensive income for the year (104,952) (7,580) (112,532) 195,744 83,212 Capital increase 190, (190,494) Dividend distribution effect to non-controlling - - (3,144) (3,144) 3,144 - Dividends (34,093) (46,553) (194,355) - (275,001) (124,655) (399,656) Share based compensation - - 8, ,228-8,228 Total contributions by and distributions to owners of the Cosan, recognized directly in 190,494-5, (224,587) (46,553) (194,355) - (269,917) (121,511) (391,428) equity Acquisition of non-controlling interest - - (493) (493) 2,430 1,937 Total transactions with owners of the parent, recognized directly in equity - - (493) (493) 2,430 1,937 September 3,822,725 (58,694) 955,285 70, ,631 2,256, , ,796 (7,580) 8,435,334 3,707,660 12,142,994 The accompanying notes are an integral part of these financial statements. 12

13 Statements of cash flows For the nine months ended on September and 2014 Note January 1, 2015 to September Parent Company January 1, 2014 to September 30, 2014 (Restated) Cash flows from operating activities (Loss) profit before taxes (290,662) 96,696 Adjustments for: Depreciation and amortization 11 / 12 2,987 2,495 Equity pick-up in investees 8 (748,759) (355,479) Equity pick-up in jointly controlled entities 9 92,218 (338,830) Option shares granted 22 8,229 7,689 Provision for judicial demands 29,747 29,867 Indexation charges, interest and exchange gains/losses, net 750, ,391 Other 4,607 34,560 (150,885) (173,611) Changes in: Investment securities - (65,000) Recoverable taxes - 31,088 Related parties (174,281) (40,131) Trade payables (1,638) (798) Employee benefits (11,626) (9,848) Provision for judicial demands (3,089) (9,279) Income tax and other tax (11,646) (58,208) Other assets and liabilities, net 17,225 71,757 (185,055) (80,419) Net cash generated by (used in) operating activities (335,940) (254,030) Cash flows from investing activities Acquisitions net of cash acquired (43,691) (111,124) Dividends received from investees 196, ,923 Dividends received from jointly controlled entity 34, ,010 Acquisition of property, plant and equipment and intangible assets 11 / 12 (2,038) (2,628) Related parties (3,372) - Minority Subscription 1,937 2,194 Net cash generated by (used in) investing activities 183, ,375 Cash flows from financing activities Loans and borrowings raised - 550,000 Payment of interest on loans, borrowings (3,975) - Related parties (12,642) (491,619) Derivative financial instruments 105,597 (164,555) Dividends paid (272,331) (99,352) Treasury shares - (148,537) Proceeds from exercise of share options - 45,643 Net cash used by financing activities (183,351) (308,420) Increase (decrease) in cash and cash equivalents (335,691) (65,075) Cash and cash equivalents at beginning of year 376, ,091 Cash and cash equivalents at end of year 40, ,016 13

14 Statements of cash flows For the nine months ended on September and 2014 Note January 1, 2015 to September January 1, 2014 to September 30, 2014 (Restated) Cash flows from operating activities Profit before taxes 154, ,249 Adjustments for: Depreciation and amortization 11 / , ,543 Equity pick-up in investees 8 2,740 2,702 Equity pick-up in jointly controlled entities 9 (276,812) (464,633) Gain on disposals assets 22 2,762 7,387 Option shares granted 8,228 7,689 Change in fair value of investment property 10 (23,162) (63,729) Provision for judicial demands 22 32,301 39,735 Indexation charges, interest and exchange gains/losses, net 897, ,894 Other 60,037 66,567 1,278,504 1,193,404 Changes in: Trade receivables (13,705) (61,908) Investment securities (45,512) (104,433) Discontinued operation - 52,394 Inventories (32,571) (13,939) Recoverable taxes (30,382) 51,258 Related parties (36,733) (62,338) Trade payables 505,529 96,886 Employee benefits (43,641) (28,305) Provision for judicial demands (7,303) 10,059 Income tax and other tax (32,839) (151,014) Other assets and liabilities, net (88,593) (2,580) 174,250 (213,920) Net cash generated by (used in) operating activities 1,452, ,484 Cash flows from investing activities Acquisitions net of cash acquired (34,644) (18,883) Dividends received from investees 1,150 1,938 Dividends received from jointly controlled entity 206, ,010 Acquisition of property, plant and equipment and intangible assets 11 / 12 (452,685) (572,842) Redemption of shares in subsidiary 8,281 - Proceeds from sale of property, plant and equipment, intangible and investments 5,155 1,178 Discontinued operation - (183,280) Net cash used in investing activities (266,318) (456,879) Cash flows from financing activities Loans and borrowings raised 515, ,870 Payment of principal on loans and borrowings (736,536) (2,551,834) Payment of interest on loans and borrowings (451,423) (592,887) Raising through of the preferred shares - 1,946,736 Related parties (3,807) - Derivative financial instruments 190,847 (73,396) Discontinued operation - (270,103) Dividends paid (404,230) (54,690) Proceeds from exercise of share options - 45,643 Net cash used by financing activities (917,110) (690,661) Increase (decrease) in cash and cash equivalents 269,326 (168,056) Cash and cash equivalents at beginning of year 1,540,192 1,474,553 Effect of exchange rate fluctuations on cash held 55,482 - Cash and cash equivalents at end of year 1,865,000 1,306,497 Supplemental cash flow information Interest paid 48,845 62,320 The accompanying notes are an integral part of these interim financial statements. 14

15 Statements of value added For the three and nine months ended September and 2014 January 1, 2015 to September Parent Company January 1, 2014 to September 30, 2014 (Restated) Revenues Other operational revenues, net 6,727-6,727 - Raw materials acquired from third parties Materials, energy, third parties services, others (168,664) (164,936) (168,664) (164,936) Gross value added (161,937) (164,936) Retention Depreciation and amortization (2,987) (2,495) (2,987) (2,495) Net value added (164,924) (167,431) Value added received in transfer Equity in earnings of associates 748, ,041 Equity in earnings of jointly controlled entity (92,217) 338,830 Financial revenue 1,327, ,291 1,984, ,162 Value added to be distributed 1,819, ,731 Distribution of value added Salaries 41,963 40,547 Taxes and contributions (274,939) (194,836) Financial expenses 2,057, ,187 Rentals and leasing 2,809 3,211 Net (loss) income from continuing operations (7,580) 306,622 1,819, ,731 The accompanying notes are an integral part of these interim financial statements. 15

16 Statements of value added For the three and nine months ended September and 2014 January 1, 2015 to September January 1, 2014 to September 30, 2014 (Restated) Revenues Sale of services and products, net 7,849,461 7,254,034 Other operational revenues, net 49, ,025 Allowance for doubtful accounts (14,839) (18,953) 7,884,134 7,683,106 Raw materials acquired from third parties Cost of sales and services rendered (5,209,126) (985,343) Materials, energy, third parties services, others (481,071) (4,433,795) (5,690,197) (5,419,138) Gross value added 2,193,937 2,263,968 Retention Depreciation and amortization (420,778) (433,543) (420,778) (433,543) Net value added 1,773,159 1,830,425 Value added received in transfer Equity in earnings of associates (2,740) (2,702) Equity in earnings of jointly controlled entity 276, ,633 Financial revenue 721, , , ,416 Value added to be distributed 2,758,297 2,518,841 Distribution of value added Salaries 270, ,201 Taxes and contributions 821, ,675 Financial expenses 1,471, ,647 Rentals and leasing 20,534 24,905 Non-controlling interests 191, ,353 Net income from continuing operations (7,580) 306,060 2,769,080 2,518,841 The accompanying notes are an integral part of these interim financial statements. 16

17 1 Operations Cosan S.A. Indústria e Comércio, ("Company" or "Cosan") is a publicly traded company with its shares traded on the Novo Mercado da Bolsa de Valores de São Paulo ("BM&FBOVESPA") under the ticker symbol CSAN3, and has its headquarters in the city of São Paulo, Brazil. Cosan Limited is the controlling shareholder of Cosan, in which it holds 62.51%. The primary activities in which Cosan, through its subsidiaries, operates, include 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) Purchase, sale and leasing of agricultural land through its subsidiaries, Radar Propriedades Agrícolas S.A. and Radar II Propriedades Agrícolas S.A. ( Radar ); (iii) Production and distribution of lubricants under the Mobil licensed trademark in Brazil, Bolivia, Uruguay and Paraguay, in addition to the European and Asian market using the Comma brand; and (iv) other investments, in addition to the corporate structures of the Company ( Cosan s other business ). On October 1, 2014 the segment Rumo was spun-off to Cosan Logística S.A, see more details in the note 2.3. The Company also holds interests in two jointly controlled entities ("Joint Ventures" or "JVs"): (i) Raízen Combustíveis S.A. ( Raízen Combustíveis ), fuel distribution business, and (ii) Raízen Energia S.A. ( Raízen Energia ), production and marketing of sugar, ethanol and energy cogeneration, produced from sugar cane bagasse. Cosan and Royal Dutch Shell ( Shell ) share control of the two entities, where each owns 50% of the economic control. 17

18 2 Presentation of interim financial statements and significant accounting policies 2.1 Basis of preparation Statement of compliance The interim individual and consolidated financial statements have been prepared in accordance with CPC 21 - Interim Financial Reporting and the International Accounting Standard IAS 34 Interim Financial Reporting issued by the International Accounting Standards Board (IASB), and presented in accordance with the standards issued by the Securities and Exchange Commission applicable to the preparation of the Quarterly Information - ITR. These financial statements have been prepared following the basis of preparation and accounting policies consistent with those adopted in preparing the financial statements for the year ended on December 31, 2014 and should be read together. Information notes that had no significant changes compared to December 31, 2014 were not fully presented in these financial statements. These interim financial statements were authorized for issue by the Board of Directors on November 10, Basis of measurement The interim financial statements include the accounts of Cosan and its subsidiaries. Cosan s subsidiaries are listed below: 18

19 September December 31, 2014 Subsidiaries _Águas da Ponte Alta S.A % 65.00% _Bioinvestments Negócios e Participações S.A % 65.00% _Comma Oil Chemicals % % _Companhia de Gás de São Paulo - COMGÁS 61.33% 60.69% _Cosan Biomassa S.A % % _Cosan Cayman II Limited % % _Cosan Global Limited % % _Cosan Investimentos e Participações S.A % % _Cosan Lubes Investments Limited % % _Cosan Lubrificantes e Especialidades S.A % % _Cosan Luxembourg S.A % % _Cosan Overseas Limited % % _Cosan Paraguay S.A % % _Cosan US, Inc % % _Nova Agrícola Ponte Alta S.A % 29.50% _Nova Amaralina S.A. Propriedades Agrícolas 29.50% 29.50% _Nova Santa Barbara Agrícola S.A % 29.50% _Pasadena Empreendimentos e Participações S.A % % _Proud Participações S.A % 65.00% _Radar II Propriedades Agrícolas S.A % 65.00% _Radar Propriedades Agrícolas S.A % 29.50% _Terras da Ponte Alta S.A % 29.50% _Vale da Ponte Alta S.A % 65.00% Zip Lube S.A % % 2.3 Discontinued operations Spin-off - Cosan Logística S.A. On October 1, 2014 in the Extraordinary General Meeting (EGM) it was considered and approved the partial spin-off and merger of the spun-off portion into Cosan Logística S.A, which corresponds to the Company s logistics operations. For purposes of comparability, the interim financial statements for the three and nine months period ended on September 30, 2014 have been restated to reflect and disclose the effects of discontinued operations. 19

20 Statement of profit or loss - For the three months ended September 30, 2014 : Dicontinued Published Operation Adjusted Gross profit 692,784 80, ,150 Income before financial results, equity in income 303,843 60, ,087 of associates and income taxes Equity in income of investees 75,799-75,799 Financial results (299,813) (3,061) (296,752) Income taxes expenses 15,860 (19,371) 35,231 Profit from continuing operations 95,689 38,324 57,365 Profit from discontinued operations, net of tax - (38,324) 38,324 Net income attributable to Owners of the Company 15,233-15,233 Published Parant Company Dicontinued Operation Adjusted Income before financial results, equity in income of associates and income taxes (43,641) - (43,641) Equity in income of investees 198,851 28, ,467 Financial results (229,494) - (229,494) Income taxes expenses 89,517-89,517 Profit from continuing operations 15,233 28,384 (13,151) Profit from discontinued operations, net of tax - (28,384) 28,384 Net income attributable to Owners of the Company 15,233-15,233 Statement of profit or loss - For the nine months ended September 30, 2014 : Dicontinued Published Operation Adjusted Gross profit 2,030, ,949 1,803,132 Income before financial results, equity in income 810, , ,481 of associates and income taxes Equity in income of investees 461, ,931 Financial results (633,273) (23,110) (610,163) Income taxes expenses (25,885) (47,047) 21,162 Profit from continuing operations 613,109 92, ,412 Profit from discontinued operations, net of tax - (92,698) 92,698 Net income attributable to Owners of the Company 613, ,109 Parant Company 20

21 Published Dicontinued Operation Adjusted Gross profit Income before financial results, equity in income of associates and income taxes (225,717) - (225,717) Equity in income of investees 763,751 69, ,309 Financial results (371,896) - (371,896) Income taxes expenses 209, ,364 Profit from continuing operations 375,502 69, ,060 Profit from discontinued operations, net of tax - (69,442) 69,442 Net income attributable to Owners of the Company 375, ,502 Cash flow - For the three months ended September 30, 2014 : Published Discontinued operation Adjusted Cash flows from operating activities Profit before taxes 79,829 57,695 22,134 Adjustment for reconciliation profit 454,643 40, ,252 Changes in assets and liabilities (82,295) (54,496) (27,799) Discontinued operation - (43,590) 43,590 Net cash generated by operating activities 452, ,177 Cash flows from investing activities Dividends received from jointly controlled entity 118, ,010 Acquisition of property, plant and equipment and intangible assets (297,312) (85,551) (211,761) Other activities investing (5,834) - (5,834) Discontinued operation - 85,551 (85,551) Net cash used in investing activities (185,136) - (185,136) Cash flows from financing activities Loans and borrowings raised 120,839 80,024 40,815 Payment of principal on loans and borrowings (189,263) (27,798) (161,465) Payment of principal on loans and borrowings (132,620) (10,870) (121,750) Raising through of the preferred shares (53,264) - (53,264) Dividends paid (31,250) (125,000) 93,750 Othet fiananciang activities 3,618-3,618 Discontinued operation - 83,644 (83,644) Net cash used by financing activities (281,940) - (281,940) Decrease in cash and cash equivalents (14,899) - (14,899) 21

22 Parant Company Published Discontinued operation Adjusted Cash flows from operating activities Profit before taxes (74,284) 28,384 (102,668) Adjustment for reconciliation profit 48,166 (28,384) 76,550 Changes in assets and liabilities 29,878-29,878 Net cash generated by operating activities 3,760-3,760 Cash flows from investing activities Dividends received from jointly controlled entity 211, ,760 Capital investment in subsidiaries and affiliates (68,706) - (68,706) Other activities investing (375) - (375) Net cash used in investing activities 142, ,679 Cash flows from financing activities Related parties (41,055) - (41,055) Othet fiananciang activities (12,406) - (12,406) Net cash used by financing activities (53,461) - (53,461) Decrease in cash and cash equivalents 92,978-92,978 22

23 Cash flow - For the nine months ended September 30, 2014 : Published Discontinued operation Adjusted Cash flows from operating activities Profit before taxes 638, , ,249 Adjustment for reconciliation profit 801, , ,154 Changes in assets and liabilities (460,752) (194,438) (266,314) Discontinued operation - (52,394) 52,394 Net cash generated by operating activities 979, ,483 Cash flows from investing activities Dividends received from jointly controlled entity 315, ,010 Acquisition of property, plant and equipment and (756,122) (183,280) (572,842) intangible assets Other activities investing (15,767) - (15,767) Discontinued operation - 183,280 (183,280) Net cash used in investing activities (456,879) - (456,879) Cash flows from financing activities Loans and borrowings raised 947,446 87, ,870 Payment of principal on loans and borrowings (2,628,674) (76,840) (2,551,834) Payment of interest on loans and borrowings (623,726) (30,839) (592,887) Raising through of the preferred shares 1,946,736-1,946,736 Dividends paid (304,690) (250,000) (54,690) Othet fiananciang activities (27,753) - (27,753) Discontinued operation - 270,103 (270,103) Net cash used by financing activities (690,661) - (690,661) Decrease in cash and cash equivalents (168,057) - (168,057) 23

24 Parant Company Published Discontinued operation Adjusted Cash flows from operating activities Profit before taxes 166,138 69,442 96,696 Adjustment for reconciliation profit (339,749) (69,442) (270,307) Changes in assets and liabilities (80,419) (80,419) Net cash generated by operating activities (254,030) - (254,030) Cash flows from investing activities Capital investment in subsidiaries and affiliates (111,124) - (111,124) Dividends received from investees Dividends received from jointly controlled entity Other activities investing (434) - (434) Net cash used in investing activities Cash flows from financing activities Loans and borrowings raised Payment of principal on loans and borrowings ( ) - ( ) Payment of interest on loans and borrowings ( ) - ( ) Related parties ( ) - ( ) Dividends paid ( ) - ( ) Discontinued operation (53.709) - (53.709) Net cash used by financing activities ( ) - ( ) Decrease in cash and cash equivalents (65.075) - (65.075) 24

25 2.4 Changes in accounting policies The following new standards and interpretations to existing standards were issued by the IASB but are not effective for the year ending in December Early adoption of standards, although encouraged by the IASB, is not permitted in Brazil by the Brazilian Accounting Pronouncements Committee (CPC). IFRS 9, Financial instruments, addresses the classification, measurement and recognition of financial assets and financial liabilities. IFRS 9 is effective for annual reporting periods beginning on or after January 1, The Company is currently assessing the potential impact of adopting IFRS 9. IFRS 15, Revenue from contracts with customers This new standard provides the principles that an entity apply to determine the measurement of income and when it is recognized. The standard is effective for annual periods beginning on or after January 1, The standard replaces IAS 18 Revenue and IAS 11 Construction contracts and related interpretations. The Company is currently assessing the potential impacts of adopting IFRS 15. There are no other Standards or Interpretations that are not yet effective that would be expected to have a significant impact on the Company. 25

26 3 Operating segments a) Segment information (consolidated) The following segment information is based on the information used by Cosan's senior management to assess the performance of the operating segments and to make decisions with regards to the allocation of resources. Cosan evaluates operating performance based on the measure of EBITDA. A reconciliation of EBITDA to profit (loss) of the period is presented below. Operating segments (i) Raízen Energia: production and sale of a variety of products derived from sugar cane, including raw sugar (VHP), anhydrous and hydrated ethanol, and activities related to energy cogeneration from sugarcane bagasse. In addition, this segment holds interests in companies engaged in research and development on new technologies; (ii) Raízen Combustíveis: distribution and sale of fuels, mainly through a network of service stations under the "Shell" brand throughout Brazil; (iii) COMGÁS: distribution of piped natural gas to part of the State of São Paulo (approximately 180 municipalities, including the region called Greater São Paulo) to customers in the industrial, residential, commercial, automotive, thermo generation and cogeneration sectors; (iv) Radar: management, buying, selling and leasing of agricultural properties; (v) Lubricants: production and distribution of lubricants under the Mobil brand in Brazil, Bolivia, Uruguay and Paraguay, as well as European and Asian market with a Comma trademark; and (vi) Other business: Other investments, beyond the Company's corporate structures. The operating segment other business includes subsidiaries with the aim of raising funds for the group. The segments Raízen Energia and Raízen Combustíveis are accounted for under the equity method and not consolidated in these interim financial statements according to CPC19 (R2) Negócios em conjunto / IFRS11 Joint arrangements. However, the Company s senior management continues to review segment information of 100% of the results of these segments and a reconciliation of these segments to the entity s financial information is presented in the column Joint Venture deconsolidation. The following summarized assets and selected profit or loss information by segment were prepared on the same basis as the accounting practices used in the preparation of consolidated information: 26

27 Raízen Energia Raízen Combustíveis COMGÁS Radar Lubricants Other business Deconsolidated effects IFRS 11 July 1, 2015 to September Segment elimination Statement of income: Net sales 2,637,476 15,638,868 1,743,099 31, , (18,276,344) - 2,259,238 Domestic market 1,098,525 15,638,868 1,743,099 31, , (16,737,393) - 2,163,625 External market 1,538, ,613 - (1,538,951) - 95,613 Gross profit 441, , ,674 21, ,115 (65) (1,195,776) - 639,897 Selling expenses (188,350) (305,979) (156,465) - (74,595) - 494,329 - (231,060) General and administrative expenses (137,341) (91,255) (78,338) (8,030) (18,482) (38,943) 228,596 - (143,793) Other income (expense), net (5,433) 88,042 (671) (12,150) (82,609) - (12,413) Financial results (462,881) (94,575) 889 3,198 (13,555) (194,658) 557,456 - (204,126) Financial expense (262,380) (45,428) (58,366) (266) (1,532) (214,931) 307,808 4,925 (270,170) Financial income 181,857 39, ,055 3,464 1,993 35,251 (221,269) (4,925) 140,838 Foreign exchange losses, net (622,213) (169,696) 349,574 - (17,435) (512,932) 791,909 - (180,793) Derivatives 239,855 81,137 (395,374) - 3, ,954 (320,992) - 105,999 Equity in earnings of associates (14,802) 3, (2,416) 118,901 11,297 (116,066) 419 Equity in earnings of joint ventures , ,767 Income tax expense benefit 161,011 (84,041) (94,867) (3,508) (4,484) 84,804 (76,970) - (18,055) Profit (loss) for the period (205,957) 269, ,222 12,856 3,968 (13,344) (63,677) (116,066) 59,636 Other selected data: Depreciation and amortization 509, , , ,140 1,147 (654,629) - 142,254 EBITDA 605, , ,065 13,268 42,147 97,657 (1,198,792) (116,066) 424,071 Addition PP&E, intangible and biological assets (cash) 230, , , ,222 6,996 (438,933) - 159, Reconciliation of EBITDA Profit (loss) for the period (205,957) 269, ,222 12,856 3,968 (13,344) (63,677) (116,066) 59,636 Income tax and social contribution (161,011) 84,041 94,867 3,508 4,484 (84,804) 76,970-18,055 Financial result, net 462,881 94,575 (889) (3,198) 13, ,658 (557,456) - 204,126 Depreciation and amortization 509, , , ,140 1,147 (654,629) - 142,254 EBITDA 605, , ,065 13,268 42,147 97,657 (1,198,792) (116,066) 424,071 27

28 Raízen Energia Raízen Combustíveis COMGÁS Radar Lubricants Other business Deconsolidated effects IFRS 11 January 1, 2015 to Septemebr Segment elimination Statement of income: Net sales 7,364,398 44,494,263 4,948,174 80,419 1,288, (51,858,661) - 6,316,777 Domestic market 3,054,921 44,494,263 4,948,174 80,419 1,032, (47,549,184) - 6,061,404 External market 4,309, ,373 - (4,309,477) - 255,373 Gross profit 1,070,155 2,214,742 1,461,154 62, ,210 (66) (3,284,897) - 1,841,735 Selling expenses (425,510) (903,002) (461,640) - (209,779) (1) 1,328,512 - (671,420) General and administrative expenses (399,167) (288,757) (238,794) (22,225) (52,014) (114,236) 687,924 - (427,269) Other income (expense), net 9, ,602 (4,540) 20, (130,212) (240,926) - (113,187) Financial results (690,226) (115,901) (131,363) 6,870 (22,552) (602,557) 806,127 - (749,602) Financial expense (662,354) (131,457) (255,045) (1,015) (23,021) (563,527) 793,811 12,925 (829,683) Financial income 482, , ,279 7,885 3,348 96,415 (600,696) (12,925) 279,002 Foreign exchange losses, net (1,082,392) (314,386) 153,124 - (11,860) (783,031) 1,396,778 - (641,767) Derivatives 572, ,301 (213,721) - 8, ,586 (783,766) - 442,846 Equity in earnings of associates (32,214) 10, (9,507) 281,962 21,597 (275,195) (2,740) Equity in earnings of joint ventures , ,812 Income tax expense benefit 242,477 (346,139) (226,842) (10,328) (13,507) 280, ,662-30,041 Profit (loss) for the period (225,161) 803, ,975 57,561 11,610 (7,580) (578,001) (275,195) 184,371 Other selected data: Depreciation and amortization 1,473, , , ,988 3,180 (1,905,703) - 420,779 EBITDA 1,696,459 1,697,034 1,116,197 61, , ,439 (3,393,493) (275,195) 1,324,711 Addition PP&E, intangible and biological assets (cash) 1,459, , ,659 1,604 31,904 40,115 (2,032,557) - 456,282 Reconciliation of EBITDA Profit (loss) for the period (225,161) 803, ,975 57,561 11,610 (7,580) (578,001) (275,195) 184,371 Income tax and social contribution (242,477) 346, ,842 10,328 13,507 (280,718) (103,662) - (30,041) Financial result, net 690, , ,363 (6,870) 22, ,557 (806,127) - 749,602 Depreciation and amortization 1,473, , , ,988 3,180 (1,905,703) - 420,779 EBITDA 1,696,459 1,697,034 1,116,197 61, , ,439 (3,393,493) (275,195) 1,324,711 28

29 Raízen Energia Raízen Combustíveis COMGÁS Radar Lubricants Other business Deconsolidated effects IFRS 11 Segment elimination July 1, 2014 to September 30, 2014 Descontinued operation Statement of income: Net sales 2,331,340 14,333,868 1,643,750 27, ,850 - (16,665,208) - 2,100, ,300 Domestic market 1,087,302 14,333,868 1,643,750 27, ,266 - (15,421,170) - 2,025, ,047 External market 1,244, ,584 - (1,244,038) - 75,584 43,253 Gross profit 373, , ,834 20,420 96,895 - (1,085,838) - 612,149 80,635 Selling expenses (146,015) (299,871) (165,140) - (64,528) - 445,886 - (229,668) - General and administrative expenses (137,330) (95,504) (75,174) (8,880) (17,687) (32,146) 232,834 - (133,887) (20,894) Other income (expense), net 23,331 83,828 (5,999) 18, (18,678) (107,159) - (5,507) 1,015 Financial results (194,020) (86,854) (48,122) 1,600 (7,950) (242,280) 280,874 - (296,752) (3,061) Financial expense (128,453) (38,708) (75,395) (215) 27,393 (203,462) 167,161 3,142 (248,537) (9,819) Financial income 106,535 23,250 27,222 1,815 1,705 17,308 (129,785) (3,142) 44,908 6,468 Foreign exchange losses, net (266,774) (68,122) (80,876) - (46,006) (82,754) 334,896 - (209,636) 290 Derivatives 94,672 (3,274) 80,927-8,958 26,628 (91,398) - 116,513 - Equity in earnings of associates (12,872) 3, (1,498) 122,119 8,985 (123,990) (3,369) - Equity in earnings of joint ventures , ,168 - Income tax expense benefit 63,139 (121,209) (66,295) (3,571) (1,954) 107,051 58,070-35,231 (19,371) Profit (loss) for the period (29,859) 196, ,104 28,323 3,694 15,234 (166,348) (123,990) 57,365 38,324 Other selected data: Depreciation and amortization 529, , , , (671,453) - 147,274 25,650 EBITDA 630, , ,398 30,537 30, ,354 (1,176,745) (123,990) 466,160 86,406 Addition PP&E, intangible and biological assets (cash) 387, , , ,627 24,258 (583,157) - 211,761 85, Reconciliation of EBITDA Profit (loss) for the period (29,859) 196, ,104 28,323 3,694 15,234 (166,348) (123,990) 57,365 38,324 Income tax and social contribution (63,139) 121,209 66,295 3,571 1,954 (107,051) (58,070) - (35,231) 19,371 Financial result, net 194,020 86,854 48,122 (1,600) 7, ,280 (280,874) - 296,752 3,061 Depreciation and amortization 529, , , , (671,453) - 147,274 25,650 EBITDA 630, , ,398 30,537 30, ,354 (1,176,745) (123,990) 466,160 86,406 29

30 Raízen Energia Raízen Combustíveis COMGÁS Radar Lubricants Other business Deconsolidated effects IFRS 11 Segment elimination January 1, 2014 to September 30, 2014 Descontinued operation Statement of income: Net sales 6,622,468 41,029,657 4,777, ,092 1,202, (47,652,125) - 6,105, ,715 Domestic market 2,884,269 41,029,657 4,777, , , (43,913,926) - 5,888, ,735 External market 3,738, ,790 - (3,738,199) - 216, ,980 Gross profit 1,191,299 2,000,178 1,468,361 70, , (3,191,477) - 1,803, ,950 Selling expenses (426,930) (884,888) (473,892) - (186,680) - 1,311,818 - (660,572) - General and administrative expenses (398,691) (296,456) (218,339) (25,727) (51,479) (96,544) 695,147 - (392,089) (63,632) Other income (expense), net 81, ,258 (13,926) 63, (153,268) (344,248) - (102,986) (464) Financial results (116,092) (78,719) (151,875) 6,891 39,240 (504,420) 194,811 - (610,164) (23,110) Financial expense (370,615) (102,013) (217,555) (779) 62,603 (557,858) 472,628 9,244 (704,345) (52,284) Financial income 252,247 69,840 65,707 7,670 3,282 76,410 (322,087) (9,244) 143,825 28,602 Foreign exchange losses, net (136,828) (15,108) (48,716) - (20,089) (39,272) 151,936 - (108,077) 572 Derivatives 139,104 (31,438) 48,689 - (6,556) 16,300 (107,666) - 58,433 - Equity in earnings of associates (28,803) 11, (4,837) 414,606 17,584 (412,471) (2,702) - Equity in earnings of joint ventures , ,633 - Income tax expense benefit (14,237) (327,571) (208,270) (11,410) (9,619) 250, ,808-21,163 (47,048) Profit (loss) for the period 288, , , ,145 51, ,503 (974,557) (412,471) 520,414 92,695 Other selected data: Depreciation and amortization 1,423, , , ,611 2,497 (1,827,177) - 433,543 70,378 EBITDA 1,842,798 1,495,555 1,138, ,391 75, ,958 (3,338,353) (412,471) 1,542, ,231 Addition PP&E, intangible and biological assets (cash) 1,963, , , ,545 50,100 (2,565,445) - 572, ,280 Reconciliation of EBITDA Profit (loss) for the period 288, , , ,145 51, ,503 (974,557) (412,471) 520,414 92,695 Income tax and social contribution 14, , ,270 11,410 9,619 (250,462) (341,808) - (21,163) 47,048 Financial result, net 116,092 78, ,875 (6,891) (39,240) 504,420 (194,811) - 610,164 23,110 Depreciation and amortization 1,423, , , ,611 2,497 (1,827,177) - 433,543 70,378 EBITDA 1,842,798 1,495,555 1,138, ,391 75, ,958 (3,338,353) (412,471) 1,542, ,231 30