Cosan Limited Consolidated financial statements as of December 31, 2019 and 2018 Contents Independent Auditor´s Report on the consolidated financial statements ............................................................................................................................................ 3 Consolidated statement of financial position ............................................................................................................................................ 10 Consolidated statement of profit or loss and other comprehensive income ............................................................................................................................................ 12 Consolidated statement of changes in equity ............................................................................................................................................ 14 Consolidated statement of cash flows ............................................................................................................................................ 17 Notes to the consolidated financial statements ............................................................................................................................................ 21 2 KPMG Auditores Independentes Rua Arquiteto Olavo Redig de Campos, 105, 6º andar – Torre A Caixa Postal 79518 – CEP 04707-970 – São Paulo/SP – Brasil Telefone +55 (11) 3940-1500, Fax +55 (11) 3940-1501 www.kpmg.com.br Independent Auditor´s Report on the consolidated financial statements To the Board of Directors and Shareholders of Cosan Limited Bermuda Opinion We have audited the consolidated financial statements of Cosan Limited (“the Company”), which comprise the statement of financial position as at December 31, 2019, the statements of profit or loss, comprehensive income, changes in equity and cash flows for the year then ended, as well as the corresponding notes, comprising the significant accounting policies and other explanatory information. In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of Cosan Limited as at December 31, 2019, and its consolidated financial performance and its cash flows for the year then ended, in accordance with International Financial Reporting Standards (IFRS) issued by International Accounting Standards Board (IASB). Basis for opinion We conducted our audit in accordance with Brazilian and International Standards on Auditing. Our responsibilities under those standards are further described in section “Auditors’ responsibilities for the audit of the consolidated financial statements” of our report. We are independent of the Company in accordance with the relevant ethical requirements included in the Accountant Professional Code of Ethics (“Código de Ética Profissional do Contador”) and in the professional standards issued by the Brazilian Federal Accounting Council (“Conselho Federal de 3 Contabilidade”), and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Unbilled revenue See Note 17 to the consolidated financial statements The key audit matter How the matter was addressed in our audit On a monthly basis, the Company´s subsidiary We evaluated the key controls for allocating the Companhia de Gás de São Paulo (Comgás) gas volume between customer segments recognizes revenue from gas sales operations during the interval of time between the date of based on the measurement of its customer’s the last measurement and the end of the consumption. This consumption measurement month. and its billing occurs in monthly cycles whose dates may differ from the monthly accounting We performed, among others, the following closing dates. procedures: Unbilled revenue is recognized for that interval i. Documental test, based on sampling, of the of time between the date of the last information that was used by the measurement and the end of the month based Company´s subsidiary as the basis for on an estimate that takes into account the allocating the gas volume per customer volume of gas consumed per customer segment. segment and its measurement based on the ii. Recalculation of unbilled revenue by different applicable tariffs for each segment. customer segment, including evaluation of the key assumptions used. The balance of unbilled revenue for the year ended December 31, 2019 is R$ 622,572 iii. Independent estimate of the allocation of thousand. the gas volume per customer segments considering the historical consumption at Due to the relevance of the unbilled revenue the end of the year and comparison to the balance and the judgment to estimate the estimated volume per segment calculated allocation of the gas volume among the by the Company´s subsidiary. customer segments during the interval of time iv. Comparison of the tariffs used for valuation between the date of the last measurement and of revenue per customer segment, with the the end of the month, this matter was tariffs determined by the regulatory agency. considered significant for our audit. v. Comparison of the average consumption assumption estimated by the Company´s subsidiary with the actual average consumption referring to the billing of the subsequent cycle occurred in January 2020. 4 vi. Reconciliation of unbilled revenue balance with accounting records. We have also considered if the disclosures made in the consolidated financial statements consider the relevant aspects required by the applicable financial reporting frameworks. Based on the evidence obtained through the procedures summarized above, we considered that the unbilled revenue balance and the corresponding notes are acceptable in the context of the consolidated financial statements taken as a whole, for the year ended December 31, 2019. Equity method on jointly-controlled entity See Note 9 to the consolidated financial statements The key audit matter How the matter was addressed in our audit The Company has an indirect interest in the We planned and communicated the scope of jointly-controlled entity Raízen Energia S.A., our work, discussed the risks of material which operates in the production and trade of misstatement and sent instructions to the sugar, ethanol and cogeneration of energy, auditors of the jointly-controlled entity. We held mainly produced from sugarcane bagasse. Due meetings with the auditors responsible for the to the segment in which it operates, the jointly-controlled entity, and reviewed and valuation of biological assets is subject to a evaluated the work performed on the valuation significant judgment involving: estimated of biological assets, including the audit harvest area, productivity forecast, discount evidence obtained and the documentation of rates, quantity and projected prices. Due to the the experts involved in the audit of the valuation relevance of the investment in Raízen Energia of biological assets. We have analyzed the S.A. and due to the degree of judgment and communications and reports submitted by the estimates used in the valuation of biological jointly-controlled entity's auditor, as well as the assets, this matter was considered significant procedures performed and the conclusions for our audit. reached, specifically the determination of materiality and the audit procedures performed to address the risks on the valuation of biological assets. We also evaluated the adequacy of the disclosures made in the consolidated financial statements. As a result of the evidence obtained from the procedures described above, we considered that the procedures performed on the valuation of biological assets of jointly-controlled entity and consequently the effect in the equity pick- up recognized by the Company are acceptable in the context of the consolidated financial statements for the year ended December 31, 2019. 5 Recoverability of deferred taxes assets See Note 13 to the consolidated financial statements The key audit matter How the matter was addressed in our audit The Company´s subsidiary Rumo Malha – We evaluated the key internal controls related Paulista S.A. recognized deferred taxes asset to the preparation and review of the projection related to temporary differences and tax loss of future taxable profits, specifically the carry-forward, which are considered recoverable business plan and budget. We compared the based on the generation of future taxable profits. budget approved for the previous year with the actual results incurred in order to confirm the The estimated availability of future taxable reliability of the projections of future results. profits requires judgment for the projections and With the assistance of our corporate finance interpretation of tax laws. The recoverable specialists, we evaluated the main amount of the deferred taxes assets recognized assumptions used to support the projection of may vary significantly if different assumptions future taxable profits, including (i) expectations are applied to the projection of future