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CSAN Cosan

Filed: 16 May 21, 8:00pm

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 6-K

 

Report of Foreign Issuer

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

Securities Exchange Act of 1934

For the month of May 2021

Commission File Number: 333-251238

 

COSAN S.A.

(Exact name of registrant as specified in its charter)

 

N/A

(Translation of registrant’s name into English)

 

 Av. Brigadeiro Faria Lima, 4100, – 16th floor
São Paulo, SP 04538-132 Brazil
(Address of principal executive offices)

 

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

Form 20-F  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 

 

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 

 

 




Graphics

 

A free translation from Portuguese into English of Independent Auditor’s Review Report on Interim Financial Information prepared in Brazilian currency in accordance with NBC TG 21 and IAS 34 and the rules issued by the Brazilian Securities Commission (CVM), applicable to the preparation of Quarterly Information (ITR)


 

 

To

Shareholders, Board of Director and Officers of

Cosan S.A.

São Paulo - SP

 

Introduction

 

We have reviewed the accompanying individual and consolidated interim financial information, contained in the Quarterly Information Form (ITR) of - Cosan S.A. (“Company”) for the quarter ended March 31, 2021, comprising the statement of financial position as of March 31, 2021 and the related statements of profit or loss, of comprehensive income, of changes in equity and of cash flows for the three month period then ended, including the explanatory notes.

 

Management is responsible for preparation of the individual and consolidated interim financial information in accordance with Accounting Pronouncement NBC TG 21 - Demonstrações intermediárias, and IAS 34 - Interim Financial Reporting, issued by the International Accounting Standards Board (IASB), as well as for the fair presentation of this information in conformity with the rules issued by the Brazilian Securities and Exchange Commission (CVM) applicable to the preparation of the Quarterly Information Form (ITR). Our responsibility is to express a conclusion on this interim financial information based on our review.

 

Scope of review

 

We conducted our review in accordance with Brazilian and international standards on review engagements (NBC TR 2410 - Revisão de Informações Intermediárias Executada pelo Auditor da Entidade and ISRE 2410 - Review of Interim Financial Information performed by the Independent Auditor of the Entity, respectively). A review of interim financial information consists of making inquiries, primarily of persons responsible for 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 auditing 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 individual and the consolidated interim financial information

 

Based on our review, nothing has come to our attention that causes us to believe that the accompanying individual and consolidated interim financial information included in the quarterly information referred to above are not prepared, in all material respects, in accordance with NBC TG 21 and IAS 34 applicable to the preparation of Quarterly Information Form (ITR), and presented consistently with the rules issued by the Brazilian Securities and Exchange Commission.

 

 


Graphics

 

Emphasis of matter

 

Restatement of Earnings per share

 

As mentioned in Note 16, due to the share split, the Company adjusted earnings per share and the related notes correspondents for the thee-month period ended March 31, 2020, as provided for in Brazilian Accounting Standard CPC 41 – Resultado por ação / IAS 33 – Earnings per share. Our conclusion is not qualified in respect of this matter.

 

Other matters

 

Statements of value added

 

The abovementioned quarterly information includes the statement of value added (SVA) for the three-month period ended March 31, 2021, prepared under Company’s Management responsibility and presented as supplementary information by IAS 34. These statements have been subject to review procedures performed together with the review of the quarterly information with the objective to conclude whether they are reconciled to the interim financial information and the accounting records, as applicable, and if its format and content are in accordance with the criteria set forth by NBC TG 09 - Demonstração do Valor Adicionado. Based on our review, nothing has come to our attention that causes us to believe that they were not prepared, in all material respects, consistently with the overall interim financial information.

 

São Paulo, May 14, 2021.

 

ERNST & YOUNG

Auditores Independentes S.S.

CRC-2SP034519/O-6

 

 

/s/Marcos Alexandre S. Pupo
Marcos Alexandre S. Pupo
Accountant CRC-1SP221749/O-0



(In thousands of Brazilian Reais - R$)

 

 

 

 

Parent Company

 

Consolidated

 

Note

 

March 31, 2021

 

December 31, 2020

 

March 31, 2021

 

December 31, 2020

Assets

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

5.1

 

1,249,667

 

1,149,267

 

7,933,170

 

4,614,053

Marketable securities

5.2

 

844,191

 

788,965

 

3,735,659

 

2,271,570

Trade receivables

5.3

 

 

 

2,285,407

 

1,585,708

Derivative financial instruments

5.10

 

86,858

 

 

382,585

 

156,208

Inventories

7

 

 

 

961,975

 

685,900

Receivables from related parties

5.5

 

130,865

 

286,993

 

94,402

 

71,783

Income tax receivable

 

 

150,766

 

141,018

 

261,698

 

178,501

Other current tax receivable

6

 

35,525

 

35,507

 

675,385

 

434,480

Dividends receivable

 

 

177,032

 

160,694

 

102,592

 

77,561

Sector financial assets

5.9

 

 

 

184,105

 

241,749

Other financial assets

5.4

 

 

779,695

 

69,381

 

848,821

Other current assets

 

 

117,683

 

101,673

 

396,752

 

270,065

Total current assets

 

 

2,792,587

 

3,443,812

 

17,083,111

 

11,436,399

Trade receivables

5.3

 

 

 

25,995

 

19,131

Restricted cash

5.2

 

30,012

 

 

59,872

 

Deferred tax assets

13

 

251,591

 

54,032

 

2,150,103

 

629,591

Receivables from related parties

5.5

 

575,972

 

473,349

 

283,064

 

199,983

Income tax receivable

 

 

 

 

145,791

 

836

Other non-current tax receivable

6

 

37,651

 

37,533

 

978,329

 

167,224

Judicial deposits

14

 

385,292

 

380,727

 

884,403

 

544,226

Derivative financial instruments

5.10

 

3,089,713

 

2,457,604

 

5,850,020

 

2,971,210

Other non-current assets

 

 

170,936

 

165,310

 

297,633

 

227,857

Investments in associates

8.1

 

16,250,838

 

11,026,580

 

382,640

 

333,705

Investments in joint ventures

9

 

2,259,602

 

2,314,537

 

8,145,564

 

7,988,208

Property, plant and equipment

10.1

 

62,722

 

61,459

 

14,680,228

 

416,996

Intangible assets and goodwill

10.2

 

2,022

 

2,191

 

17,503,169

 

10,045,296

Contract asset

10.3

 

 

 

602,093

 

695,938

Right-of-use assets

10.4

 

32,460

 

24,809

 

7,885,307

 

84,224

Total non-current assets

 

 

23,148,811

 

16,998,131

 

59,874,211

 

24,324,425

Total assets

 

 

25,941,398

 

20,441,943

 

76,957,322

 

35,760,824

 

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



 

 

 

Parent Company

 

Consolidated

 

Note

 

March 31, 2021

 

December 31, 2020

 

March 31, 2021

 

December 31, 2020

Liabilities

 

 

 

 

 

 

 

 

 

Loans, borrowings and debentures

5.6

 

44,863

 

 

2,413,080

 

2,352,057

Leases

5.8

 

7,070

 

11,108

 

533,515

 

20,466

Derivative financial instruments

5.10

 

569

 

7,291

 

225,870

 

293,656

Trade payables

5.7

 

1,323

 

4,066

 

2,309,971

 

1,875,192

Employee benefits payables

 

 

14,285

 

25,168

 

262,518

 

195,881

Income tax payables

 

 

6,909

 

2,571

 

88,421

 

374,339

Other taxes payable

12

 

109,828

 

125,368

 

427,666

 

367,076

Dividends payable

 

 

68,899

 

216,929

 

147,214

 

285,177

Concessions payable

11

 

 

 

159,745

 

Payables to related parties

5.5

 

193,655

 

278,740

 

366,835

 

150,484

Sector financial liabilities

5.9

 

 

 

92,386

 

91,912

Other financial liabilities

 

 

 

 

509,656

 

149,293

Other current liabilities

 

 

95,450

 

103,501

 

388,399

 

259,580

Total current liabilities

 

 

542,851

 

774,742

 

7,925,276

 

6,415,113

Loans, borrowings and debentures

5.6

 

5,971,015

 

 

34,162,954

 

13,075,170

Leases

5.8

 

30,544

 

17,037

 

2,553,675

 

59,297

Preferred shareholders payable in subsidiaries

 

 

391,187

 

387,044

 

391,187

 

387,044

Derivative financial instruments

5.10

 

114,599

 

124,171

 

114,599

 

124,171

Other taxes payable

12

 

140,827

 

141,233

 

148,397

 

146,895

Provision for legal proceedings

14

 

312,708

 

308,819

 

1,394,453

 

887,794

Concessions payable

11

 

 

 

2,855,739

 

Provision for uncovered liability of associates

8.1

 

331,041

 

458,852

 

 

Payables to related parties

5.5

 

7,745,942

 

7,096,139

 

 

Post-employment benefits

21

 

181

 

177

 

734,291

 

728,677

Deferred tax liabilities

13

 

 

 

3,680,685

 

1,271,208

Sector financial liabilities

5.9

 

 

 

511,124

 

473,999

Deferred revenue

 

 

 

 

40,393

 

Other non-current liabilities

 

 

289,611

 

286,064

 

805,197

 

685,642

Total non-current liabilities

 

 

15,327,655

 

8,819,536

 

47,392,694

 

17,839,897

Total liabilities

 

 

15,870,506

 

9,594,278

 

55,317,970

 

24,255,010

Shareholders' equity

15

 

 

 

 

 

 

 

 

Share capital

 

 

6,365,853

 

5,727,478

 

6,365,853

 

5,727,478

Treasury shares

 

 

(91,158)

 

(583,941)

 

(91,158)

 

(583,941)

Additional paid-in capital

 

 

(2,978,460)

 

(939,347)

 

(2,978,460)

 

(939,347)

Accumulated other comprehensive loss

 

 

(263,319)

 

(252,610)

 

(263,319)

 

(252,610)

Retained earnings

 

 

6,399,169

 

6,896,085

 

6,399,169

 

6,896,085

Profit for the period

 

 

638,807

 

 

638,807

 

Equity attributable to:

 

 

 

 

 

 

 

 

 

  Owners of the Company

 

 

10,070,892

 

10,847,665

 

10,070,892

 

10,847,665

  Non-controlling interests

8.2

 

 

 

11,568,460

 

658,149

Total shareholders' equity

 

 

10,070,892

 

10,847,665

 

21,639,352

 

11,505,814

Total shareholders' equity and liabilities

 

 

25,941,398

 

20,441,943

 

76,957,322

 

35,760,824


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


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

 

 

 

 


Parent Company


Consolidated

 

Note

 


March 31, 2021

 


March 31, 2020

 


March 31, 2021

 


March 31, 2020

(Restated)

Net sales

17

 


 


 


4,715,799

 


3,506,512

Cost of sales

18

 


 


 


(3,369,867)

 


(2,486,377)

Gross profit

 

 


 


 


1,345,932

 


1,020,135

Selling expenses

18

 


 


 


(158,655)

 


(279,396)

General and administrative expenses

18

 


(47,337)

 


(34,922)

 


(363,608)

 


(171,225)

Other expenses, net

19

 


(25,040)

 


(74,548)

 


(28,926)

 


(35,954)

Operating expenses

 

 


(72,377)

 


(109,470)

 


(551,189)

 


(486,575)

Result before equity in earnings of investees, finance results and taxes

 

 


(72,377)

 


(109,470)

 


794,743

 


533,560

Interest in earnings of associates

8.1

 


954,353

 


435,575

 


(1,194)

 


820

Interest in earnings of joint ventures

9

 


(54,936)

 


(24,159)

 


254,801

 


191,344

Equity in earnings of investees

 

 


899,417

 


411,416

 


253,607

 


192,164

Finance expense

 

 


(202,357)

 


(291,755)

 


(171,818)

 


(748,020)

Finance income

 

 


36,325

 


60,779

 


191,152

 


265,649

Foreign exchange, net

 

 


(729,972)

 


(1,406,185)

 


(991,459)

 


(1,538,025)

Net effect of derivatives

 

 


590,696

 


1,284,503

 


590,214

 


1,397,199

Finance results, net

20

 


(305,308)

 


(352,658)

 


(381,911)

 


(623,197)

Profit before taxes

 

 


521,732

 


(50,712)

 


666,439

 


102,527

Income taxes

13

 


 

 


 

 


 

 


 

Current

 

 


 


 


399,860

 


(125,231)

Deferred

 

 


117,075

 


152,962

 


(358,036)

 


139,409

 

 

 


117,075

 


152,962

 


41,824

 


14,178

Profit for the period

 

 


638,807

 


102,250

 


708,263

 


116,705

Profit attributable to:

 

 


 

 


 

 


 

 


 

Owners of the Company

 

 


638,807

 


102,250

 


638,807

 


102,250

Non-controlling interests

 

 


 


 


69,456

 


14,455

 

 

 


638,807

 


102,250

 


708,263

 


116,705

Earnings per share16











Basic

 

 


 

 


 

 

R$

0.3685

 

R$

0.0655

Diluted

 

 


 

 


 

 

R$

0.3662

 

R$

0.0647

 

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



(In thousands of Brazilian Reais - R$)

 

 

 

Parent Company

 

Consolidated

 

 

March 31, 2021

 

March 31, 2020

 

March 31, 2021

 

March 31, 2020

Profit for the period

 

638,807

 

102,250

 

708,263

 

116,705

Items that are or may subsequently be reclassified to profit or loss:

 

 

 

 

 

 

 

 

Foreign currency translation differences

 

244,947

 

563,497

 

272,535

 

610,682

Gain on cash flow hedge

 

(255,795)

 

(155,635)

 

(256,387)

 

(155,635)

Change in fair value of financial assets

 

139

 

(1)

 

139

 

(1)

 

 

(10,709)

 

407,861

 

16,287

 

455,046

Total comprehensive income for the period

 

628,098

 

510,111

 

724,550

 

571,751

Total comprehensive income attributable to:

 

 

 

 

 

 

 

 

Owners of the Company

 

628,098

 

510,111

 

628,098

 

510,111

Non-controlling interests

 

 

 

96,452

 

61,640

 

 

628,098

 

510,111

 

724,550

 

571,751

 

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



(In thousands of Brazilian Reais - R$)

 

 

 

 

 

 

 

Capital reserve

 

 

 

Profit reserve

 

 

 

 

 

 

 

 

 

 

Share capital

 

Treasury share

 

Corporate transactions - Law 6404

 

Capital transactions

 

Accumulated other comprehensive loss

 

Legal

 

Statutory reserve

 

Profit to be realized

 

Retained earnings

 

Accumulated profits

 

Total

 

Non-controlling interest

 

Total equity

At January 1, 2021

 

5,727,478

 

(583,941)

 

737

 

(940,084)

 

(252,610)

 

42,593

 

6,334,427

 

171,021

 

348,044

 

 

10,847,665

 

658,149

 

11,505,814

Profit for the period

 

 

 

 

 

 

 

 

 

 

638,807

 

638,807

 

69,456

 

708,263

Other comprehensive income: (note 15)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss on cash flow hedge

 

 

 

 

 

(255,795)

 

 

 

 

 

 

(255,795)

 

(592)

 

(256,387)

Foreign currency translation differences

 

 

 

 

 

244,947

 

 

 

 

 

 

244,947

 

27,588

 

272,535

Change in fair value of financial assets

 

 

 

 

 

139

 

 

 

 

 

 

139

 

 

139

Total comprehensive income for the period

 

 

 

 

 

(10,709)

 

 

 

 

 

638,807

 

628,098

 

96,452

 

724,550

Transactions with owners of the Company

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contributions and distributions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital increase (Note 15)

 

638,375

 

 

 

(638,375)

 

 

 

 

 

 

 

 

1,750

 

1,750

Cancellation of treasury shares (Note 15)

 

 

496,916

 

 

 

 

 

(496,916)

 

 

 

 

 

 

Share options exercised

 

 

645

 

 

1,543

 

 

 

 

 

 

 

2,188

 

 

2,188

Dividends

 

 

 

 

 

 

 

 

 

 

 

 

(3,407)

 

(3,407)

Treasury shares acquired (Note 15)

 

 

(4,778)

 

 

 

 

 

 

 

 

 

(4,778)

 

 

(4,778)

Corporate reorganization (Note 1.2)

 

 

 

 

(1,400,557)

 

 

 

 

 

 

 

(1,400,557)

 

10,836,134

 

9,435,577

Share-based payment transactions

 

 

 

 

1,564

 

 

 

 

 

 

 

1,564

 

964

 

2,528

Total contributions by and distributions to owners of the Company

 

638,375

 

492,783

 

 

(2,035,825)

 

 

 

(496,916)

 

 

 

 

(1,401,583)

 

10,835,441

 

9,433,858

Transactions with owners of the Company

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change of shareholding interest in subsidiary (Note 8.2)

 

 

 

 

(3,288)

 

 

 

 

 

 

 

(3,288)

 

(21,582)

 

(24,870)

Total changes in ownership interests

 

 

 

 

(3,288)

 

 

 

 

 

 

 

(3,288)

 

(21,582)

 

(24,870)

Total transactions with owners of the Company

 

638,375

 

492,783

 

 

(2,039,113)

 

 

 

(496,916)

 

 

 

 

(1,404,871)

 

10,813,859

 

9,408,988

At March 31, 2021

 

6,365,853

 

(91,158)

 

737

 

(2,979,197)

 

(263,319)

 

42,593

 

5,837,511

 

171,021

 

348,044

 

638,807

 

10,070,892

 

11,568,460

 

21,639,352

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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




 

 

 

 

 

 

Capital reserve

 

 

 

Profit reserve

 

 

 

 

 

 

 

 

 

 

Share capital

 

Treasury share

 

Corporate transactions - Law 6404

 

Capital transactions

 

Accumulated other comprehensive loss

 

Legal

 

Statutory reserve

 

Profit to be realized

 

Retained earnings

 

Accumulated profits

 

Total

 

Non-controlling interest

 

Total equity

At January 1, 2020

 

5,045,214

 

(112,785)

 

737

 

(958,738)

 

(349,501)

 

121,270

 

6,288,472

 

171,021

 

348,044

 

 

10,553,734

 

507,482

 

11,061,216

Profit for the period

 

 

 

 

 

 

 

 

 

 

102,250

 

102,250

 

14,455

 

116,705

Other comprehensive income: (note 15)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss on cash flow hedge

 

 

 

 

 

(155,635)

 

 

 

 

 

 

(155,635)

 

 

(155,635)

Foreign currency translation differences

 

 

 

 

 

563,497

 

 

 

 

 

 

563,497

 

47,185

 

610,682

Change in fair value of financial assets

 

 

 

 

 

(1)

 

 

 

 

 

 

(1)

 

 

(1)

Total comprehensive income for the period

 

 

 

 

 

407,861

 

 

 

 

 

102,250

 

510,111

 

61,640

 

571,751

Transactions with owners of the Company

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contributions and distributions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital increase

 

 

 

 

 

 

 

 

 

 

 

 

6,666

 

6,666

Share options exercised

 

 

1,081

 

(1,081)

 

 

 

 

 

 

 

 

 

 

Dividends - non-controlling interests

 

 

 

 

 

 

 

 

 

 

 

 

(1,145)

 

(1,145)

Treasury shares acquired

 

 

(290,772)

 

 

 

 

 

 

 

 

 

(290,772)

 

 

(290,772)

Share-based payment transactions

 

 

 

 

3,132

 

 

 

 

 

 

 

3,132

 

18

 

3,150

Total contributions by and distributions to owners of the Company

 

 

(289,691)

 

(1,081)

 

3,132

 

 

 

 

 

 

 

(287,640)

 

5,539

 

(282,101)

Transactions with owners of the Company

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change of shareholding interest in subsidiary

 

 

 

 

44,569

 

 

 

 

 

 

 

44,569

 

30,431

 

75,000

Total changes in ownership interests

 

 

 

 

44,569

 

 

 

 

 

 

 

44,569

 

30,431

 

75,000

Total transactions with owners of the Company

 

 

(289,691)

 

(1,081)

 

47,701

 

 

 

 

 

 

 

(243,071)

 

35,970

 

(207,101)

At March 31, 2020

 

5,045,214

 

(402,476)

 

(344)

 

(911,037)

 

58,360

 

121,270

 

6,288,472

 

171,021

 

348,044

 

102,250

 

10,820,774

 

605,092

 

11,425,866

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 


(In thousands of Brazilian Reais - R$)

 

 

 

 

Parent Company

 

Consolidated

 

Note

 

March 31, 2021

 

March 31, 2020

 

March 31, 2021

 

March 31, 2020

Cash flows from operating activities

 

 

 

 

 

 

 

 

 

Profit before taxes

 

 

521,732

 

(50,712)

 

666,439

 

102,527

Adjustments for:

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

2,474

 

2,814

 

311,311

 

143,520

Interest in earnings of associates

8.1

 

(954,353)

 

(435,575)

 

1,194

 

(820)

Interest in earnings of joint ventures

9

 

54,936

 

24,159

 

(254,801)

 

(191,344)

(Gain) loss on disposals assets

 

 

 

 

(316)

 

1,781

Share-based payment

 

 

2,689

 

2,208

 

6,177

 

3,145

Legal proceedings provision

 

 

24,013

 

7,288

 

35,459

 

6,945

Interest and exchange, net

 

 

306,928

 

375,470

 

400,649

 

659,776

Sectorial financial assets and liabilities, net

5.9

 

 

 

96,608

 

Provisions for employee benefits

 

 

1,626

 

(750)

 

35,355

 

16,298

Allowance for expected credit losses

 

 

 

 

(1,079)

 

7,686

Other

 

 

26

 

66,339

 

(37,995)

 

45,728

 

 

 

(39,929)

 

(8,759)

 

1,259,001

 

795,242

Trade receivables

 

 

 

 

(45,005)

 

(32,984)

Inventories

 

 

 

 

(6,828)

 

(30,050)

Other current tax, net

 

 

(15,252)

 

(13,210)

 

98,432

 

(20,875)

Income tax (i)

 

 

12,349

 

(22,247)

 

(97,078)

 

(402,541)

Related parties, net

 

 

6,063

 

(221,814)

 

(16,146)

 

(7,506)

Trade payables

 

 

(3,156)

 

(3,770)

 

(152,515)

 

6,442

Employee benefits

 

 

(23,591)

 

(13,233)

 

(140,415)

 

(69,409)

Provision for legal proceedings

 

 

(166)

 

(2,469)

 

(19,570)

 

(5,327)

Other financial liabilities

 

 

 

 

(15,614)

 

(34,758)

Judicial deposits

 

 

(633)

 

(1,130)

 

(10,472)

 

27,983

Contractual obligations for assignment of credit rights

 

 

 

(132,200)

 

 

(132,200)

Post-employment benefits

 

 

 

 

(7,861)

 

(10,903)

Other assets and liabilities, net

 

 

(22,494)

 

(3,686)

 

(3,185)

 

(121,388)

 

 

 

(46,880)

 

(413,759)

 

(416,257)

 

(833,516)

Net cash (used in) generated by operating activities

 

 

(86,809)

 

(422,518)

 

842,744

 

(38,274)

Cash flows from investing activities

 

 

 

 

 

 

 

 

 

Capital contribution in associates

 8.1

 

(1,500)

 

(11,142)

 

 

(1,142)

Acquisition of subsidiary, net of cash acquired

 

 

 

 

 

(90,247)

(Purchase) sale of marketable securities

 

 

(52,254)

 

(158,652)

 

1,574,984

 

(449,198)

Restricted cash

 

 

(30,012)

 

 

24,405

 

Dividends received from associates

 

 

198,020

 

 

 

Other financial assets

 

 

 

 

8

 

Acquisition of property, plant and equipment, intangible assets and contract assets

 

 

(65)

 

(3,072)

 

(467,800)

 

(258,645)

Cash in the merger operation

1.2

 

353,601

 

 

8,125,855

 

Net cash generated by (used in) investing activities

 

 

467,790

 

(172,866)

 

9,257,452

 

(799,232)

 


Cash flows from financing activities

 

 

 

 

 

 

 

 

 

Loans, borrowings and debentures raised

5.6

 

 

 

583,128

 

76,108

Repayment of principal on loans, borrowings and debentures

5.6

 

(5,427)

 

(1,700,000)

 

(6,945,855)

 

(1,950,907)

Payment of interest on loans, borrowings and debentures

5.6

 

(134,759)

 

(35,203)

 

(513,490)

 

(199,603)

Payment of derivative financial instruments

 

 

(25,383)

 

(36,078)

 

(505,080)

 

(13,727)

Receipt of derivative financial instruments

 

 

103,738

 

79,857

 

550,961

 

106,243

Payment of derivative financial instruments, except debt

 

 

(218,809)

 

 

(218,809)

 

Receipt of derivative financial instruments, except debt

 

 

197,679

 

 

197,679

 

Repayment of principal on leases

5.8

 

(305)

 

(167)

 

(27,769)

 

(2,358)

Payment of interest on leases

5.8

 

(315)

 

(208)

 

(18,482)

 

(937)

Equity contribution from shareholders interest

 

 

 

 

 

75,000

Equity contribution from non-controlling interest

 8.2

 

 

 

1,750

 

6,666

Related parties

 

 

(185,547)

 

 

 

(17,063)

Payments to redeem entity's shares

 

 

(4,778)

 

(290,772)

 

(34,529)

 

(290,772)

Acquisition of non-controlling interests

 

 

(6,675)

 

 

 

Dividends paid

 

 

 

 

(3,319)

 

(1,213)

Receipts of consideration assets

 

 

 

 

 

65,478

Net cash used in financing activities

 

 

(280,581)

 

(1,982,571)

 

(6,933,815)

 

(2,147,085)

Increase (decrease) in cash and cash equivalents

 

 

100,400

 

(2,577,955)

 

3,166,381

 

(2,984,591)

Cash and cash equivalents at beginning of the period

 

 

1,149,267

 

3,490,707

 

4,614,053

 

6,076,644

Effect of exchange rate fluctuations on cash held

 

 

 

(249)

 

152,736

 

247,390

Cash and cash equivalents at end of the period

 

 

1,249,667

 

912,503

 

7,933,170

 

3,339,443

Additional information

 

 

 

 

 

 

 

 

 

Income tax paid (i)

 

 

 

3,767

 

37,560

 

380,279


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

(i)
In the three-month period ended March 31, 2021, the Company paid the annual adjustment of the Income Tax and Social Contribution of 2020 using tax credits, so that the amount presented as payment in the supplementary information refers only to monthly advances based on gross revenue.

                   

 

Statement of cash flows

(In thousands of Brazilian Reais - R$)

Non-cash transaction

 

  1. Recognition of interest on shareholder’s equity decided by Raízen Combustíveis S.A. in the amount of R$19,221.

 

  1. Acquisition of assets for construction of the natural gas distribution pipeline in the Comgás subsidiary with payment in installments in the amount of R$1,982.

 

  1. Capital contribution to the subsidiary Payly Soluções de Pagamentos S.A. in the amount of R$3,750, through the capitalization of reimbursable expenses.

 

  1. Registration of right-of-use against the lease liability in the amount of R$6,209 related to new contracts covered by the commercial lease rule.

 

  1. Acquisition of assets logistics operations with payment in installments in the amount of R$14,209 on March 31, 2021.

 

Disclosure of interest and dividends

 

The Company discloses the dividends and interest on shareholders' equity received as cash flow from investing activities, with the purpose of avoiding distortions in its cash flows from operation activities.

 

Interest received or paid is classified as cash flow in financing activities, as it is considered to be part of the costs of obtaining financial resources.



(In thousands of Brazilian Reais - R$)

 

 

 

Parent Company

Consolidated

 

 

March 31, 2021

 

December 31, 2020

 

March 31, 2021

 

December 31, 2020

Revenues







Sales of products and services net of returns

 

 

 

5,766,154

 

4,340,830

Other operating revenues (expenses), net

 

(1,291)

 

(69,299)

 

7,526

 

(26,697)

Allowance for doubtful accounts

 

 

 

931

 

(7,686)

 

 

(1,291)

 

(69,299)

 

5,774,611

 

4,306,447

Raw materials acquired from third parties

 

 

 

 

 

 

 

 

Cost of goods sold and services rendered

 

 

 

(3,259,106)

 

(2,483,982)

Materials, energy, third party services, others

 

(47,657)

 

(21,058)

 

(150,534)

 

(146,787)

 

 

(47,657)

 

(21,058)

 

(3,409,640)

 

(2,630,769)

Gross value added

 

(48,948)

 

(90,357)

 

2,364,971

 

1,675,678










Retention

 

 

 

 

 

 

 

 

Depreciation and amortization

 

(2,474)

 

(2,814)

 

(311,311)

 

(143,520)

 

 

(2,474)

 

(2,814)

 

(311,311)

 

(143,520)

Net value added

 

(51,422)

 

(93,171)

 

2,053,660

 

1,532,158










Value added transferred in

 

 

 

 

 

 

 

 

Interest in earnings of subsidiaries

 

954,353

 

435,575

 

(1,194)

 

820

Interest in earnings of joint ventures

 

(54,936)

 

(24,159)

 

254,801

 

191,344

Finance income

 

36,325

 

60,779

 

191,152

 

265,649

 

 

935,742

 

472,195

 

444,759

 

457,813

Value added to be distributed

 

884,320

 

379,024

 

2,498,419

 

1,989,971










Distribution of value added

 

 

 

 

 

 

 

 

Payroll and social charges

 

14,431

 

12,706

 

166,138

 

126,519

Direct remuneration

 

12,217

 

11,248

 

148,297

 

109,120

Benefits

 

1,552

 

1,353

 

17,192

 

16,504

FGTS and others

 

662

 

105

 

649

 

895










Taxes and contributions

 

(112,690)

 

(150,791)

 

1,051,816

 

857,902

Federal

 

(113,539)

 

(151,634)

 

350,308

 

235,108

State

 

 

 

679,281

 

607,582

Municipal

 

849

 

843

 

22,227

 

15,212










Finance expense and rents

 

343,772

 

414,859

 

572,202

 

888,845

Interest and exchange variation

 

333,409

 

401,016

 

491,704

 

859,903

Rents

 

2,140

 

1,422

 

3,334

 

Others

 

8,223

 

12,421

 

77,164

 

28,942










Non-controlling interests

 

 

 

69,456

 

14,455

Profit for the period

 

638,807

 

102,250

 

638,807

 

102,250

 

 

884,320

 

379,024

 

2,498,419

 

1,989,971


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


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

 

1 Operations

 

Cosan S.A. (“Cosan” or “the Company”) is a publicly traded Company with shares traded on the Novo Mercado of B3 S.A. - Brasil, Bolsa, Balcão, or “B3”, under the ticker symbol CSAN3, on the São Paulo Stock Exchange. New York, or "NYSE", under the ticker symbol CSAN and is headquartered in the city of São Paulo, Brazil. Mr. Rubens Ometto Silveira Mello is the ultimate controlling shareholder of Cosan. 

 

Acquisition of Biosev S.A. by Raízen

On February 8, 2021, the jointly controlled subsidiary Raízen S.A. entered into an acquisition agreement with Biosev S.A., or "Biosev", and Hédera Investimentos e Participações S.A., or "Hédera", as the controlling shareholder of Biosev, among other parties, whereby Raízen agreed, under the terms and conditions established therein, to acquire up to 100% of the shares issued by Biosev.

 

The acquisition will involve an exchange of shares, with Raízen issuing preferred shares in the amount of 3.5% of its share capital and also paying an amount of R$3,600,000 in cash to refinance part of Hédera's debt. There will also be an issue of redeemable shares equivalent to 1.49% of Raízen's share capital for a symbolic amount. On March 1, 2021, the Brazilian Antitrust Authority (Conselho Administrativo de Defesa Econômica), or “CADE,” approved the transaction. The consummation of the acquisition is subject to compliance with certain conditions precedent established in the acquisition contract, there is no accounting impact in these financial statements. The expectation is that, after the acquisition, the shareholder structure of Raízen and Biosev will be as follows:


Notes to the interim financial statements

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

 

Image9

 

1.1 Covid-19

 

During the quarter ended March 31, 2021, the Company, its subsidiaries and jointly controlled companies continue to monitor the evolution of the COVID-19 pandemic in Brazil and worldwide, in order to take preventive measures to minimize the spread of the virus, ensure continuity of operations and safeguard the health and safety of our employees and partners. The response to the pandemic has been effective in limiting the impacts on our operational facilities, employees, supply chain and logistics.

 

The Company ended the period ended March 31, 2021 with cash of R$7,933,170, net working capital with a positive balance of R$9,157,835 and a net profit of R$708,263.

 

Our covenants are assessed monthly for our need to generate sufficient cash flows to meet indebtedness and our ability to meet the covenants contained in the contracts that govern our indebtedness. Until March 31, 2021, the Company and its subsidiaries have been complying with all restrictive financial clauses.

 

Notes to the interim financial statements

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


Considering the low level of interest rates in Brazil and in the locations of our subsidiaries, we consider that despite the short-term fluctuations in some macroeconomic assumptions due to the impacts of the COVID-19 pandemic, our weighted average cost of capital should not undergo material changes.

 

The Company assessed the circumstances that could indicate impairment of its non-financial assets and concluded that there were no changes in the circumstances that would indicate an impairment loss. Our tax recovery projections are based on the same scenarios and assumptions used in the impairment assessment.

 

Losses due to the non-recoverability of financial assets were calculated based on the credit risk analysis, which includes the history of losses, the individual situation of the customers, the situation of the economic group to which they belong, the real guarantees for debts and macroeconomic indicators and is considered on March 31, 2021, sufficient to cover possible losses on the amounts receivable, in addition to a prospective assessment that consider the change or expected change in economic factors that affect the expected credit losses, which will be determined based on weighted probabilities and measured at an amount equal to the expected credit loss for life.

 

The credit quality of accounts receivable falling due is considered adequate, and the amount of the effective risk of possible losses in accounts receivable from customers is presented as losses due to the non-recoverability of financial assets.

 

Our inventories are composed, substantially, of lubricants, base oil and materials for the construction of gas pipelines, which are products that are not valid or have a long duration and, therefore, we do not observe indicators of obsolescence or non-performance.

 

To date, there have been no changes in the scope of the Company's leases, including adding, terminating, extending, reducing the lease term. Also, there was no change in the consideration for the leases that we are both lessees and lessors.


Notes to the interim financial statements

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


1.2 Corporate reorganization

On July 2, 2020, the Boards of Directors of Cosan S.A., Cosan Limited and Cosan Logística S.A. (“Cosan Logística”), or collectively the “Companies”, authorized studies to be carried out on the proposed corporate reorganization to simplify the structure of the economic group.

 

As part of an effort to streamline its operations, Cosan S.A. carried out a Corporate Reorganization to improve the current corporate structure, making Cosan S.A. the only holding company of the Cosan Group (“Grupo Cosan” refers to the economic entity previously represented by Cosan Limited , Cosan S.A., Cosan Logística and its subsidiaries before the Merger, which, after the Merger, is represented by Cosan S.A. and its subsidiaries, as the context requires). The Operation aimed to simplify the corporate structure of the Cosan Group, unify and consolidate the outstanding shares in the financial market (“free floats”) of the Companies, increase the liquidity of their securities, as well as unlock the value that exists within the Cosan Group and facilitate future fundraising.

 

As part of the Transaction carried out, Cosan Limited and Cosan Logística were merged into Cosan S.A.. After the completion of the transaction, the outstanding shares of Cosan S.A. were directly held by all shareholders of Cosan Limited, Cosan S.A. and Cosan Logística. As part of the Mergers, Cosan S.A. issued American Depositary Shares (“ADSs”) listed on the New York Stock Exchange (New York Stock Exchange - NYSE) or Cosan S.A. shares listed on B3 S.A. - Brasil, Bolsa, Balcão (“B3”) for the shareholders of Cosan Limited. As for Cosan Logística, the shareholders of Cosan Logística became owners of shares of Cosan S.A.


Notes to the interim financial statements

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


Image10

Simplified operational structure after incorporations.

 

Respecting the Merger Protocols, subject to the terms and conditions described therein, and after the consummation of all transactions contemplated by them, Cosan Limited and Cosan Logística were merged, ceased to exist and their rights and obligations were transferred to Cosan S.A. as a Company successor.

 

The administrators of Cosan S.A., Cosan Limited and Cosan Logística evaluated the exchange ratio negotiated and recommended by the committees and stated as follows:

 

  1. The exchange ratio was 0.772788 shares issued by Cosan Limited for each share issued by Cosan S.A, or 1 American Depositary Receipts (“ADRs”) of the Company (each ADR representing a common share of the Company). Thus, as a result of the Merger and in view of the Exchange Ratio, 308,554,969 shares issued by Cosan S.A. were issued former Cosan Limited shareholders; and

 

  1. The exchange ratio was 3.943112 shares issued by Cosan Logística for each share issued by Cosan S.A. Thus, as a result of the Merger and in view of the Exchange Ratio, 31,025,350 shares issued by Cosan S.A. were issued to the former shareholders of Cosan Logística.

 

Notes to the interim financial statements

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


On January 22, 2021, the proposed corporate reorganization of the Companies, which consisted of the merger of companies under common control Cosan Limited and Cosan Logística, was approved at the respective extraordinary general meetings of the Companies.

 

After the approval of the Mergers at the respective Extraordinary Shareholders' Meetings (“AGE”) of the companies, Cosan Logística shareholders were able to exercise the right of withdrawal within 30 days after the AGEs, based on the Valuation Report at Cosan's Market Price Logistics, resulting in R$12.40 per share. On February 22, 2021, the term ended and no shareholder exercised his right of withdrawal.

 

Also considering the meeting of the Company's Board of Directors held on February 5, 2021, among other matters, the Board decided to cancel 10,000,000 shares issued by the Company that were held in treasury.

 

The merged and consolidated subsidiaries as of March 1, 2021, generated a profit of R$57,814 in the Company's net income for the month March 2021.

 

Basis of preparation of reviewed financial information

The balance sheets as of March 1, 2021 are based on the individual and consolidated historical balances of Cosan S.A., Cosan Limited and Cosan Logística, as shown below:

Notes to the interim financial statements

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

 

Parent company 

Open Balance (01/03/2021)

 

 

 

 

 

 

Incorporated companies

 

 

 

 

 

 

 

 

 

Consolidated Cosan S.A.

 

Corporate Cosan Limited

 

Consolidated Cosan Logística

 

Total incorporated assets

 

Elimination

 

Adjustments

 

Cosan S.A. post-reorganization

Assets

 

 

 

 

 

 

 

 

 

 

1.2.(a)

 

1.2.(b)

 

 

Cash and cash equivalents

 

 

1,099,643

 

353,595

 

6

 

353,601

 

 

 

1,453,244

Marketable securities

 

 

927,011

 

 

 

 

 

 

927,011

Derivative financial instruments

 

 

71,133

 

 

 

 

 

 

71,133

Receivables from related parties

 

 

279,718

 

54

 

194

 

248

 

(12,481)

 

 

267,485

Income tax receivable

 

 

143,359

 

3

 

2,841

 

2,844

 

 

 

146,203

Other current tax receivable

 

 

35,515

 

 

4

 

4

 

 

 

35,519

Dividends receivable

 

 

160,694

 

148,271

 

 

148,271

 

(148,271)

 

 

160,694

Other financial assets

 

 

734,903

 

 

 

 

 

(734,903)

 

Other current assets

 

 

101,221

 

1,744

 

 

1,744

 

 

 

102,965

Total current assets

 

 

3,553,197

 

503,667

 

3,045

 

506,712

 

(160,752)

 

(734,903)

 

3,164,254

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deferred tax assets

 

 

75,959

 

 

 

 

 

80,483

 

156,442

Receivables from related parties

 

 

576,929

 

 

 

 

 

 

576,929

Other non-current tax receivable

 

 

37,623

 

 

 

 

 

 

37,623

Judicial deposits

 

 

384,455

 

 

1,017

 

1,017

 

 

 

385,472

Derivative financial instruments

 

 

2,758,732

 

183,426

 

 

183,426

 

 

 

2,942,158

Other non-current assets

 

 

169,370

 

 

 

 

 

 

169,370

Investments in associates

 

 

13,025,364

 

8,769,145

 

4,259,390

 

13,028,535

 

(8,761,919)

 

329,118

 

17,621,098

Property, plant and equipment

 

 

60,457

 

2,724

 

 

2,724

 

 

 

63,181

Intangible assets and goodwill

 

 

2,067

 

 

 

 

 

 

2,067

Right-of-use assets

 

 

24,212

 

8,430

 

 

8,430

 

 

 

32,642

Total non-current assets

 

 

17,115,168

 

8,963,725

 

4,260,407

 

13,224,132

 

(8,761,919)

 

409,601

 

21,986,982

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

 

20,668,365

 

9,467,392

 

4,263,452

 

13,730,844

 

(8,922,671)

 

(325,302)

 

25,151,236

 Notes to the interim financial statements

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

 

 

 

 

 

 

Incorporated companies

 

 

 

 

 

 

 

 

 

Consolidated Cosan S.A.

 

Corporate Cosan Limited

 

Consolidated Cosan Logística

 

Total incorporated assets

 

Elimination

 

Adjustments

 

Cosan S.A. post-reorganization

Liabilities

 

 

 

 

 

 

 

 

 

 

1.2.(a)

 

1.2.(b)

 

 

Loans, borrowings and debentures

 

 

 

98,397

 

38,981

 

137,378

 

 

 

137,378

Leases

 

 

2,785

 

824

 

 

824

 

 

 

3,609

Derivative financial instruments

 

 

1,253

 

 

 

 

 

 

1,253

Trade payables

 

 

1,769

 

207

 

40

 

247

 

 

 

2,016

Employee benefits payables

 

 

24,246

 

 

 

 

 

 

24,246

Income tax payables

 

 

614

 

3

 

5

 

8

 

 

 

622

Other taxes payable

 

 

115,593

 

9

 

1,251

 

1,260

 

 

(11,544)

 

105,309

Dividends payable

 

 

216,929

 

 

241

 

241

 

(148,271)

 

 

68,899

Payables to related parties

 

 

318,535

 

4,844

 

407

 

5,251

 

(12,483)

 

 

311,303

Other current liabilities

 

 

107,502

 

7,902

 

992

 

8,894

 

 

 

116,396

Total current liabilities

 

 

789,226

 

112,186

 

41,917

 

154,103

 

(160,754)

 

(11,544)

 

771,031

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, borrowings and debentures

 

 

 

4,124,973

 

1,719,992

 

5,844,965

 

 

 

5,844,965

Leases

 

 

24,930

 

8,887

 

 

8,887

 

 

 

33,817

Preferred shareholders payable in subsidiaries

 

 

389,585

 

 

 

 

 

 

389,585

Derivative financial instruments

 

 

110,554

 

 

 

 

 

 

110,554

Other taxes payable

 

 

140,978

 

 

 

 

 

 

140,978

Provision for legal proceedings

 

 

309,484

 

 

 

 

 

 

309,484

Provision for uncovered liability of associates

 

 

432,350

 

 

 

 

 

 

432,350

Payables to related parties

 

 

7,499,128

 

47,771

 

 

47,771

 

 

 

7,546,899

Post-employment benefits

 

 

155

 

 

 

 

 

 

155

Other non-current liabilities

 

 

288,658

 

 

 

 

 

 

288,658

Total non-current liabilities

 

 

9,195,822

 

4,181,631

 

1,719,992

 

5,901,623

 

 

 

15,097,445

Total liabilities

 

 

9,985,048

 

4,293,817

 

1,761,909

 

6,055,726

 

(160,754)

 

(11,544)

 

15,868,476

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders' equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share capital

 

 

5,727,478

 

5,328

 

2,284,893

 

2,290,221

 

(1,651,846)

 

 

6,365,853

Reserves and other components of equity

 

 

4,955,839

 

5,168,247

 

216,650

 

5,384,897

 

(7,110,071)

 

(313,758)

 

2,916,907

 

 

 

10,683,317

 

5,173,575

 

2,501,543

 

7,675,118

 

(8,761,917)

 

(313,758)

 

9,282,760

Equity attributable to:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Owners of the Company

 

 

10,683,317

 

5,173,575

 

2,501,543

 

7,675,118

 

(8,761,917)

 

(313,758)

 

9,282,760

Total shareholders' equity

 

 

10,683,317

 

5,173,575

 

2,501,543

 

7,675,118

 

(8,761,917)

 

(313,758)

 

9,282,760

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total shareholders' equity and liabilities

 

 

20,668,365

 

9,467,392

 

4,263,452

 

13,730,844

 

(8,922,671)

 

(325,302)

 

25,151,236

 

Notes to the interim financial statements

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

 

Consolidated

Open Balance (01/03/2021)                                                          

 

 

 

 

 

Incorporated companies

 

 

 

 

 

 

 

 

 

Consolidated Cosan S.A.

 

Corporate Cosan Limited

 

Consolidated Cosan Logística

 

Total incorporated assets

 

Elimination

 

Adjustments

 

Cosan S.A. post-reorganization

Assets

 

 

 

 

 

 

 

 

 

 

1.2.(a)

 

1.2.(b)

 

 

Cash and cash equivalents

 

 

4,367,675

 

356,410

 

7,769,445

 

8,125,855

 

 

 

12,493,530

Marketable securities

 

 

1,686,029

 

327

 

3,025,185

 

3,025,512

 

 

 

4,711,541

Trade receivables

 

 

1,639,123

 

305

 

617,546

 

617,851

 

 

 

2,256,974

Derivative financial instruments

 

 

182,922

 

 

82,191

 

82,191

 

 

 

265,113

Inventories

 

 

659,485

 

8

 

255,042

 

255,050

 

 

 

914,535

Receivables from related parties

 

 

205,383

 

36

 

36,451

 

36,487

 

(12,481)

 

 

229,389

Income tax receivable

 

 

169,644

 

7

 

98,343

 

98,350

 

 

 

267,994

Other current tax receivable

 

 

372,525

 

172

 

345,539

 

345,711

 

 

 

718,236

Dividends receivable

 

 

77,561

 

148,271

 

6,322

 

154,593

 

(148,271)

 

 

83,883

Sectorial financial assets

 

 

216,488

 

 

 

 

 

 

216,488

Other financial assets

 

 

804,256

 

 

 

 

 

(734,903)

 

69,353

Other current assets

 

 

294,606

 

1,955

 

264,994

 

266,949

 

 

 

561,555

Total current assets

 

 

10,675,697

 

507,491

 

12,501,058

 

13,008,549

 

(160,752)

 

(734,903)

 

22,788,591

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade receivables

 

 

19,476

 

 

6,303

 

6,303

 

 

 

25,779

Restricted cash

 

 

 

 

29,835

 

29,835

 

 

 

29,835

Deferred tax assets

 

 

631,987

 

33

 

1,350,121

 

1,350,154

 

 

 

1,982,141

Receivables from related parties

 

 

207,905

 

 

94,473

 

94,473

 

(47,770)

 

 

254,608

Income taxes receivable

 

 

309

 

 

40,707

 

40,707

 

 

 

41,016

Other non-current tax receivable

 

 

168,666

 

 

782,580

 

782,580

 

 

 

951,246

Judicial deposits

 

 

551,833

 

 

328,984

 

328,984

 

 

 

880,817

Derivative financial instruments

 

 

3,311,933

 

183,426

 

2,346,374

 

2,529,800

 

 

 

5,841,733

Contract asset

 

 

655,680

 

 

 

 

 

 

655,680

Other non-current assets

 

 

235,161

 

2

 

57,726

 

57,728

 

 

 

292,889

Investments in associates

 

 

331,005

 

8,758,462

 

49,953

 

8,808,415

 

(9,087,580)

 

329,118

 

380,958

Investments in joint ventures

 

 

7,613,457

 

 

 

 

 

 

7,613,457

Property, plant and equipment

 

 

424,651

 

4,335

 

14,032,909

 

14,037,244

 

 

 

14,461,895

Intangible assets and goodwill

 

 

10,184,202

 

15,159

 

7,226,616

 

7,241,775

 

 

 

17,425,977

Right-of-use assets

 

 

83,664

 

8,853

 

7,809,397

 

7,818,250

 

 

 

7,901,914

Total non-current assets

 

 

24,419,929

 

8,970,270

 

34,155,978

 

43,126,248

 

(9,135,350)

 

329,118

 

58,739,945

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

 

35,095,626

 

9,477,761

 

46,657,036

 

56,134,797

 

(9,296,102)

 

(405,785)

 

81,528,536

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Notes to the interim financial statements

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

 

 

 

 

 

 

Incorporated companies

 

 

 

 

 

 

 

 

 

Consolidated Cosan S.A.

 

Corporate Cosan Limited

 

Consolidated Cosan Logística

 

Total incorporated assets

 

Elimination

 

Adjustments

 

Cosan S.A. post-reorganization

Liabilities

 

 

 

 

 

 

 

 

 

 

1.2.(a)

 

1.2.(b)

 

 

Loans, borrowings and debentures

 

 

842,781

 

98,420

 

2,318,462

 

2,416,882

 

 

 

3,259,663

Leases

 

 

11,867

 

1,068

 

510,047

 

511,115

 

 

 

522,982

Derivative financial instruments

 

 

146,261

 

 

 

 

 

 

146,261

Trade payables

 

 

1,813,517

 

1,335

 

566,273

 

567,608

 

 

 

2,381,125

Employee benefits payables

 

 

214,941

 

1,782

 

154,262

 

156,044

 

 

 

370,985

Income tax payables

 

 

331,264

 

580

 

245,826

 

246,406

 

 

 

577,670

Other taxes payable

 

 

375,996

 

10

 

33,092

 

33,102

 

 

(11,544)

 

397,554

Dividends payable

 

 

285,209

 

 

10,267

 

10,267

 

(148,271)

 

 

147,205

Concessions payable

 

 

 

 

159,330

 

159,330

 

 

 

159,330

Payables to related parties

 

 

304,021

 

5,786

 

188,971

 

194,757

 

(12,483)

 

 

486,295

Sectorial financial liabilities

 

 

93,244

 

 

 

 

 

 

93,244

Other financial liabilities

 

 

120,247

 

 

361,494

 

361,494

 

 

 

481,741

Other current liabilities

 

 

229,603

 

9,289

 

298,692

 

307,981

 

 

 

537,584

Total current liabilities

 

 

4,768,951

 

118,270

 

4,846,716

 

4,964,986

 

(160,754)

 

(11,544)

 

9,561,639

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, borrowings and debentures

 

 

14,091,982

 

4,125,001

 

20,275,636

 

24,400,637

 

 

 

38,492,619

Leases

 

 

67,882

 

9,097

 

2,430,749

 

2,439,846

 

 

 

2,507,728

Preferred shareholders payable in subsidiaries

 

 

389,585

 

 

 

 

 

 

389,585

Derivative financial instruments

 

 

110,554

 

 

 

 

 

 

110,554

Other taxes payable

 

 

146,539

 

 

2,112

 

2,112

 

 

 

148,651

Provision for legal proceedings

 

 

890,189

 

 

497,574

 

497,574

 

 

 

1,387,763

Concessions payable

 

 

 

 

2,849,861

 

2,849,861

 

 

 

2,849,861

Payables to related parties

 

 

 

47,771

 

 

47,771

 

(47,771)

 

 

Post-employment benefits

 

 

733,047

 

 

57

 

57

 

 

 

733,104

Deferred tax liabilities

 

 

1,326,171

 

 

1,988,261

 

1,988,261

 

 

(80,483)

 

3,233,949

Sectorial financial liabilities

 

 

499,016

 

 

 

 

 

 

499,016

Deferred revenue

 

 

 

 

42,100

 

42,100

 

 

 

42,100

Other non-current liabilities

 

 

694,781

 

 

64,680

 

64,680

 

 

 

759,461

Total non-current liabilities

 

 

18,949,746

 

4,181,869

 

28,151,030

 

32,332,899

 

(47,771)

 

(80,483)

 

51,154,391

Total liabilities

 

 

23,718,697

 

4,300,139

 

32,997,746

 

37,297,885

 

(208,525)

 

(92,027)

 

60,716,030

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders' equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share capital

 

 

5,727,478

 

5,328

 

2,284,893

 

2,290,221

 

(1,651,846)

 

 

6,365,853

Reserves and other components of equity

 

 

4,955,839

 

5,168,247

 

216,650

 

5,384,897

 

(7,110,071)

 

(313,758)

 

2,916,907

 

 

 

10,683,317

 

5,173,575

 

2,501,543

 

7,675,118

 

(8,761,917)

 

(313,758)

 

9,282,760

Equity attributable to:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Owners of the Company

 

 

10,683,317

 

5,173,575

 

2,501,543

 

7,675,118

 

(8,761,917)

 

(313,758)

 

9,282,760

  Non-controlling interests

 

 

693,612

 

4,047

 

11,157,747

 

11,161,794

 

(325,660)

 

 

11,529,746

Total shareholders' equity

 

 

11,376,929

 

5,177,622

 

13,659,290

 

18,836,912

 

(9,087,577)

 

(313,758)

 

20,812,506

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total shareholders' equity and liabilities

 

 

35,095,626

 

9,477,761

 

46,657,036

 

56,134,797

 

(9,296,102)

 

(405,785)

 

81,528,536

 

Notes to the interim financial statements

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

 

Adjustments and assumptions used

The financial information was prepared and presented based on the individual and consolidated balances and the adjustments were determined following Management's assumptions and best estimates that include the following adjustments: 

 

1.2.(a) Elimination

The consummate operation was an intra-group reorganization, in which: (1) it involved only entities that are under common control; and (2) all the entities involved were already presented at Cosan Limited on a consolidated basis. As a result, the investment balances that Cosan Limited held in Cosan logistics and Cosan S.A. were eliminated, as well as the effects of transactions between related parties.

 

1.2.(b) Adjustment of other financial assets

Cosan S.A. owned 40,065,607 shares of Rumo S.A., representing 2.16% of its shareholders 'equity, and 477,196 shares of Cosan Logística, representing 0.10% of its shareholders' equity. These shares were recorded in the balance sheet as a financial asset, being measured at fair value through profit or loss, as Management considered trading these shares.

 

With the corporate reorganization, the financial asset, as well as its applicable taxes, was derecognized for R$734,903 and, consequently, an investment in subsidiary of R$329,118 was recorded. Additionally, the amount of R$313,758 was recognized in equity.

  

Notes to the interim financial statements

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

 

2  Statement of compliance

These individual and consolidated interim financial statements have been prepared and are being presented in accordance with technical pronouncement CPC 21 (R1) - Interim Financial Statements and with international standards IAS 34 - Interim Financial Reporting, issued by the International Accounting Standards Board (IASB), and also based on the provisions contained in the Brazilian Corporation Law, and presented in a manner consistent with the rules issued by the Brazilian Securities and Exchange Commission, applicable to the preparation of quarterly information - ITR.

 

The presentation of the Statements of Value Added (DVA), individual and consolidated, is required by Brazilian corporate law and the accounting practices adopted in Brazil applicable to publicly-held companies CPC 09 - Statement of Added Value. IFRS standards do not require the presentation of this statement. As a consequence, under IFRS, this statement is presented as supplementary information, without prejudice to the set of interim financial statements.

 

Except for information from the merged companies, these interim financial statements were prepared following the basis of preparation and accounting policies consistent with those adopted in the preparation of the financial statements of December 31, 2020 and should be read together.

 

The information in the explanatory notes that have not undergone any significant changes compared to December 31, 2020 has not been fully presented in this quarterly information.

 

The relevant information proper to the interim financial statements, and only them, are being disclosed and that correspond to those used by Management in its management.

 

These interim financial statements were authorized for issue by Management on May 14, 2021.


Notes to the interim financial statements

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


3  Accounting policies

These interim financial statements were prepared following the basis of preparation and accounting policies consistent with those adopted in the preparation of the financial statements of December 31, 2020, except for the statements described in the respective notes from the companies incorporated in the corporate reorganization, as per note 1.2. All balances have been rounded to the nearest thousand, except where otherwise indicated.


 4  Segment information

The following segment information is used by Company’s senior management (the “Chief Operating Decision Maker”) to assess the performance of the operating segments and to make decisions with regards to the allocation of resources. This information is prepared on a basis consistent with the accounting policies used in the preparation of the financial statements. The Company evaluates the performance of its operating segments based on the measure of Earnings Before Interest Taxes, Depreciation and Amortization (“EBITDA”).

 

Reported segments:

 

  1. Raízen Energia: production and marketing of a variety of products derived from sugar cane, including raw sugar (Very High Polarization, or “VHP”), and renewable products, such as anhydrous and hydrated ethanol, second generation ethanol and activities related to energy cogeneration from sugarcane bagasse, among other. In addition, this segment holds interests in companies engaged in research and development on new technology;

 

  1. Raízen Combustíveis: distribution and marketing of fuels, mainly through a franchised network of service stations under the “Shell” brand throughout Brazil, petroleum refining, the operation of fuel resellers, a convenience store business, the manufacture and sale of automotive and industrial lubricants, and the production and sale of liquefied petroleum gas throughout Argentina;

 

Notes to the interim financial statements

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


  1. Gas and Energy: its main activities are: (i) distribution of piped natural gas in part of the State of São Paulo to customers in the industrial, residential, commercial, automotive and cogeneration sectors; and (ii) the sale of electricity, comprising the purchase and sale of electricity to other traders, to consumers who have a free choice of supplier and to other agents permitted by law, other investments in the development process and corporate activities, including TRSP - LNG Regasification Terminal of São Paulo S.A. (“TRSP”), Rota 4 Participações S.A. (“Rota 4”) and Edge II - Empresa de Geração de Energia S.A..

 

  1. Moove: production and distribution of lubricants under the Mobil brand in Brazil, Argentina, Bolivia, Uruguay, Paraguay, the United States of America and Europe, as well as in the European and Asian markets under the “Comma” trademark and corporate activities;

 

  1. Logistics: logistics services for rail transportation, storage and port loading of commodities, mainly for grains and sugar, leasing of locomotives, wagons and another railroad equipment; and

 

Reconciliation:

 

  1. Cosan Corporate: digital wallet platform and other investments, in addition to the corporate activities of the Company. The Cosan corporate segment includes the financing subsidiaries for the Cosan group.

 

Although, Raízen Energia S.A. (“Raízen Energia”) and Raízen Combustíveis are equity accounted joint ventures and are no longer proportionally consolidated, senior management continues to review segment information. A reconciliation of these segments is presented in the column “Deconsolidated effects.”

 

Notes to the interim financial statements

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

 

 

March 31, 2021

 

Reported segments

 

Reconciliation

 

Consolidated

 

Raízen Energia

 

Raízen Combustíveis

 

Gas and Energy

 

Moove

 

Logistics (ii)

 

Cosan Corporate

 

Deconsolidated effects

 

Segment elimination

 

 

 

Brazil

 

Argentina

 

 

 

 

 

 

 

Statement of profit or loss:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross sales

9,909,774

 

23,919,738

 

5,243,764

 

3,207,371

 

1,783,529

 

828,461

 

377

 

(39,073,276)

 

(4,083)

 

5,815,655

Domestic market (i)

5,050,364

 

23,919,738

 

5,243,764

 

3,207,371

 

1,627,996

 

828,461

 

377

 

(34,213,866)

 

(4,083)

 

5,660,122

External market (i)

4,859,410

 

 

 

 

155,533

 

 

 

(4,859,410)

 

 

155,533

Net sales

9,424,596

 

22,945,322

 

3,541,760

 

2,516,622

 

1,417,556

 

785,351

 

353

 

(35,911,678)

 

(4,083)

 

4,715,799

Cost of sales

(8,655,960)

 

(21,935,380)

 

(3,027,334)

 

(1,817,781)

 

(1,083,803)

 

(471,989)

 

(377)

 

33,618,674

 

4,083

 

(3,369,867)

Gross profit

768,636

 

1,009,942

 

514,426

 

698,841

 

333,753

 

313,362

 

(24)

 

(2,293,004)

 

 

1,345,932

Selling expenses

(262,598)

 

(344,589)

 

(247,121)

 

(26,173)

 

(128,739)

 

(3,052)

 

(691)

 

854,308

 

 

(158,655)

General and administrative expenses

(165,706)

 

(137,025)

 

(56,139)

 

(225,586)

 

(56,036)

 

(31,412)

 

(50,574)

 

358,870

 

 

(363,608)

Other income (expenses), net

113,048

 

61,219

 

32,677

 

(6,167)

 

12,928

 

(10,782)

 

(24,905)

 

(206,944)

 

 

(28,926)

Interest in earnings of associates

 

91,527

 

 

 

 

130

 

524,629

 

(91,527)

 

(525,953)

 

(1,194)

Interest in earnings of joint ventures

10,382

 

(8,393)

 

 

 

 

 

254,801

 

(1,989)

 

 

254,801

Finance results, net

(240,798)

 

(201,154)

 

(99,329)

 

(59,806)

 

(51,423)

 

(175,677)

 

(95,005)

 

541,281

 

 

(381,911)

Finance expense

(78,574)

 

57,448

 

(18,135)

 

(145,108)

 

(7,612)

 

(444)

 

(18,653)

 

39,261

 

 

(171,817)

Finance income

81,136

 

52,822

 

39,601

 

149,922

 

2,836

 

19,474

 

18,919

 

(173,559)

 

 

191,151

Foreign exchange, net

(234,400)

 

(811,895)

 

(82,553)

 

(83,347)

 

(58,589)

 

(164,859)

 

(684,664)

 

1,128,848

 

 

(991,459)

Derivatives

(8,960)

 

500,471

 

(38,242)

 

18,727

 

11,942

 

(29,848)

 

589,393

 

(453,269)

 

 

590,214

Income tax (expense)benefit

(46,216)

 

(125,978)

 

(52,987)

 

90,030

 

(43,557)

 

(34,755)

 

30,106

 

225,181

 

 

41,824

Profit (loss) for the period

176,748

 

345,549

 

91,527

 

471,139

 

66,926

 

57,814

 

638,337

 

(613,824)

 

(525,953)

 

708,263

Profit (loss) attributable to:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Owners of the Company

181,822

 

331,233

 

91,527

 

462,399

 

46,487

 

17,067

 

638,807

 

(604,582)

 

(525,953)

 

638,807

Non-controlling interests

(5,074)

 

14,316

 

 

8,740

 

20,439

 

40,747

 

(470)

 

(9,242)

 

 

69,456

 

176,748

 

345,549

 

91,527

 

471,139

 

66,926

 

57,814

 

638,337

 

(613,824)

 

(525,953)

 

708,263

Other select data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

1,083,642

 

82,247

 

164,221

 

137,040

 

26,049

 

145,248

 

2,972

 

(1,330,110)

 

2

 

311,311

EBITDA

1,547,404

 

754,928

 

408,064

 

577,955

 

187,955

 

413,494

 

706,208

 

(2,710,396)

 

(525,951)

 

1,359,661

Additions to PP&E, intangible and contract assets

1,257,312

 

54,332

 

147,579

 

231,244

 

6,579

 

229,235

 

742

 

(1,459,223)

 

 

467,800

Reconciliation of EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit (loss) for the period

176,748

 

345,549

 

91,527

 

471,139

 

66,926

 

57,814

 

638,337

 

(613,824)

 

(525,953)

 

708,263

Income tax and (expense) benefit

46,216

 

125,978

 

52,987

 

(90,030)

 

43,557

 

34,755

 

(30,106)

 

(225,181)

 

 

(41,824)

Finance results, net

240,798

 

201,154

 

99,329

 

59,806

 

51,423

 

175,677

 

95,005

 

(541,281)

 

 

381,911

Depreciation and amortization

1,083,642

 

82,247

 

164,221

 

137,040

 

26,049

 

145,248

 

2,972

 

(1,330,110)

 

2

 

311,311

EBITDA

1,547,404

 

754,928

 

408,064

 

577,955

 

187,955

 

413,494

 

706,208

 

(2,710,396)

 

(525,951)

 

1,359,661

 

(i)                   Domestic markets: sales within the countries where each entity is located; external markets: sales export.

(ii)                  The results of the Logistics segment were consolidated as of March 1, 2021 as a result of the corporate reorganization, as detailed in Note 1.2.

 

Notes to the interim financial statements

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

 

 

March 31, 2020

 

Reported segments

 

Reconciliation

 

Consolidated

 

Raízen Energia

 

Raízen Combustíveis

 

Gas and Energy

 

Moove

 

Cosan Corporate

 

Deconsolidated effects

 

Segment elimination

 

 

 

Brazil

 

Argentina

 

 

 

 

 

 

Statement of profit or loss:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross sales

9,455,018

 

21,610,931

 

4,187,768

 

3,098,875

 

1,313,842

 

 

(35,253,717)

 

 

4,412,717

Domestic market (i)

4,910,943

 

21,610,931

 

4,187,768

 

3,098,875

 

1,260,713

 

 

(30,709,642)

 

 

4,359,588

External market (i)

4,544,075

 

 

 

 

53,129

 

 

(4,544,075)

 

 

53,129

Net sales

8,995,333

 

20,537,673

 

2,986,452

 

2,475,345

 

1,031,167

 

 

(32,519,458)

 

 

3,506,512

Cost of sales

(8,179,782)

 

(19,744,529)

 

(2,732,934)

 

(1,680,462)

 

(804,738)

 

(1,177)

 

30,657,245

 

 

(2,486,377)

Gross profit

815,551

 

793,144

 

253,518

 

794,883

 

226,429

 

(1,177)

 

(1,862,213)

 

 

1,020,135

Selling expenses

(209,245)

 

(368,841)

 

(190,759)

 

(158,828)

 

(119,623)

 

(945)

 

768,845

 

 

(279,396)

General and administrative expenses

(144,462)

 

(127,058)

 

(37,248)

 

(85,668)

 

(46,670)

 

(38,887)

 

308,768

 

 

(171,225)

Other income (expenses), net

269,821

 

113,046

 

24,485

 

10,688

 

28,341

 

(74,983)

 

(407,352)

 

 

(35,954)

Interest in earnings of associates

 

(13,310)

 

 

4

 

 

398,298

 

13,310

 

(397,482)

 

820

Interest in earnings of joint ventures

(4,338)

 

449

 

 

 

 

191,344

 

3,889

 

 

191,344

Finance results, net

(336,010)

 

(165,145)

 

(51,673)

 

(595)

 

(39,040)

 

(583,562)

 

552,828

 

 

(623,197)

Finance expense

(228,080)

 

(278,501)

 

(23,775)

 

(89,481)

 

(8,112)

 

(650,427)

 

530,356

 

 

(748,020)

Finance income

97,332

 

75,158

 

7,491

 

206,133

 

9,987

 

49,529

 

(179,981)

 

 

265,649

Foreign exchange, net

(608,211)

 

(2,879,339)

 

(30,724)

 

(151,280)

 

(74,013)

 

(1,312,732)

 

3,518,274

 

 

(1,538,025)

Derivatives

402,949

 

2,917,537

 

(4,665)

 

34,033

 

33,098

 

1,330,068

 

(3,315,821)

 

 

1,397,199

Income tax (expense)benefit

(109,232)

 

(96,560)

 

(11,633)

 

(182,896)

 

(13,612)

 

210,686

 

217,425

 

 

14,178

Profit (loss) for the period

282,085

 

135,725

 

(13,310)

 

377,588

 

35,825

 

100,774

 

(404,500)

 

(397,482)

 

116,705

Profit (loss) attributable to:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Owners of the Company

244,384

 

137,284

 

(13,310)

 

372,196

 

25,286

 

102,250

 

(368,358)

 

(397,482)

 

102,250

Non-controlling interests

37,701

 

(1,559)

 

 

5,392

 

10,539

 

(1,476)

 

(36,142)

 

 

14,455

 

282,085

 

135,725

 

(13,310)

 

377,588

 

35,825

 

100,774

 

(404,500)

 

(397,482)

 

116,705

Other select data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

1,197,519

 

78,221

 

142,584

 

116,762

 

23,468

 

3,290

 

(1,418,324)

 

 

143,520

EBITDA

1,924,846

 

475,651

 

192,580

 

677,841

 

111,945

 

476,940

 

(2,593,077)

 

(397,482)

 

869,244

Additions to PP&E, intangible and contract assets

1,068,310

 

74,922

 

87,372

 

250,758

 

3,140

 

4,747

 

(1,230,604)

 

 

258,645

Reconciliation of EBITDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit (loss) for the period

282,085

 

135,725

 

(13,310)

 

377,588

 

35,825

 

100,774

 

(404,500)

 

(397,482)

 

116,705

Income tax and (expense) benefit

109,232

 

96,560

 

11,633

 

182,896

 

13,612

 

(210,686)

 

(217,425)

 

 

(14,178)

Finance results, net

336,010

 

165,145

 

51,673

 

595

 

39,040

 

583,562

 

(552,828)

 

 

623,197

Depreciation and amortization

1,197,519

 

78,221

 

142,584

 

116,762

 

23,468

 

3,290

 

(1,418,324)

 

 

143,520

EBITDA

1,924,846

 

475,651

 

192,580

 

677,841

 

111,945

 

476,940

 

(2,593,077)

 

(397,482)

 

869,244

 

Notes to the interim financial statements

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

 

 

March 31, 2021

 

Reported segments

 

Reconciliation

Consolidated

 

Raízen Energia

 

Raízen Combustíveis

 

Gas and Energy

 

Moove

 

Logistics

 

Cosan Corporate

 

Deconsolidated effects

 

Segment elimination

 

 

 

Brazil

 

Argentina

 

 

 

 

 

 

 

Statement of financial position:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

4,042,966

 

2,011,708

 

593,072

 

1,424,003

 

900,064

 

3,724,605

 

1,884,498

 

(6,647,746)

 

 

7,933,170

Marketable securities

 

 

 

788,702

 

186,220

 

1,746,047

 

1,014,690

 

 

 

3,735,659

Trade receivables

1,421,788

 

2,230,966

 

580,390

 

1,073,911

 

615,839

 

620,870

 

782

 

(4,233,144)

 

 

2,311,402

Derivative financial instruments

4,814,134

 

3,381,132

 

 

526,832

 

30,973

 

2,383,630

 

3,291,170

 

(8,195,266)

 

 

6,232,605

Inventories

1,227,966

 

2,904,582

 

1,498,494

 

126,141

 

578,053

 

257,774

 

7

 

(5,631,042)

 

 

961,975

Sectorial financial assets

 

 

 

184,105

 

 

 

 

 

 

184,105

Other financial assets

154,940

 

 

 

 

69,381

 

 

 

(154,940)

 

 

69,381

Other current assets

5,218,462

 

3,188,185

 

736,231

 

250,143

 

190,841

 

591,686

 

1,002,862

 

(9,142,878)

 

(504,703)

 

1,530,829

Other non-current assets

5,758,948

 

2,199,360

 

51,234

 

174,664

 

303,242

 

2,878,845

 

1,905,722

 

(8,009,542)

 

(463,278)

 

4,799,195

Investments in associates

 

3,713,879

 

390

 

(1)

 

 

50,082

 

9,956,732

 

(3,714,269)

 

(9,624,173)

 

382,640

Investments in joint ventures

560,064

 

757,228

 

 

 

 

 

8,145,564

 

(1,317,292)

 

 

8,145,564

Biological assets

1,353,186

 

 

 

 

 

 

 

(1,353,186)

 

 

Derivative financial instruments

 

2,768,998

 

117,434

 

589,634

 

12,459

 

 

 

(2,886,432)

 

 

602,093

Right-of-use assets

5,233,892

 

81,424

 

430,312

 

19,119

 

45,585

 

7,787,692

 

32,911

 

(5,745,628)

 

 

7,885,307

Property, plant and equipment

12,640,458

 

2,495,398

 

4,327,190

 

21,439

 

334,271

 

14,247,292

 

77,226

 

(19,463,046)

 

 

14,680,228

Intangible assets and goodwill

3,596,404

 

2,471,303

 

40,239

 

8,946,407

 

1,315,639

 

7,214,055

 

27,068

 

(6,107,946)

 

 

17,503,169

Loans, borrowings and debentures

(16,849,614)

 

(6,728,597)

 

(856,567)

 

(6,185,908)

 

(847,762)

 

(15,594,719)

 

(13,947,645)

 

24,434,778

 

 

(36,576,034)

Derivative financial instruments

(5,906,602)

 

(154,953)

 

(19,597)

 

(225,301)

 

 

 

(115,168)

 

6,081,152

 

 

(340,469)

Trade payables

(4,253,194)

 

(5,646,695)

 

(1,011,285)

 

(1,127,985)

 

(683,358)

 

(496,192)

 

(2,436)

 

10,911,174

 

 

(2,309,971)

Employee benefits payable

(478,168)

 

(93,398)

 

(84,356)

 

(48,450)

 

(64,243)

 

(133,822)

 

(16,003)

 

655,922

 

 

(262,518)

Sectorial financial liabilities

 

 

 

(603,510)

 

 

 

 

 

 

(603,510)

Other current liabilities

(2,089,192)

 

(3,727,929)

 

(1,524,233)

 

(385,124)

 

(244,394)

 

(996,903)

 

(502,583)

 

7,341,354

 

41,068

 

(2,087,936)

Preferred shareholders payable in subsidiaries

 

 

 

 

 

 

(391,187)

 

 

 

(391,187)

Leases

(4,588,316)

 

(95,631)

 

(391,249)

 

(9,767)

 

(47,754)

 

(2,991,574)

 

(38,095)

 

5,075,196

 

 

(3,087,190)

Other non-current liabilities

(2,189,300)

 

(4,699,358)

 

(773,430)

 

(1,921,606)

 

(576,807)

 

(5,841,934)

 

(2,245,717)

 

7,662,088

 

926,909

 

(9,659,155)

Total assets (net of liabilities) allocated by segment

9,668,822

 

7,057,602

 

3,714,269

 

3,617,448

 

2,118,249

 

15,447,434

 

10,080,398

 

(20,440,693)

 

(9,624,177)

 

21,639,352

Total assets

46,023,208

 

28,204,163

 

8,374,986

 

14,125,099

 

4,582,567

 

41,502,578

 

27,339,232

 

(82,602,357)

 

(10,592,154)

 

76,957,322

Shareholders' equity attributable to:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity attributable to owners of the Company

9,578,833

 

6,777,863

 

3,714,269

 

3,554,347

 

1,473,416

 

4,596,413

 

10,070,893

 

(20,070,965)

 

(9,624,177)

 

10,070,892

Non-controlling interests

89,989

 

279,739

 

 

63,101

 

644,833

 

10,851,021

 

9,505

 

(369,728)

 

 

11,568,460

Total shareholders' equity

9,668,822

 

7,057,602

 

3,714,269

 

3,617,448

 

2,118,249

 

15,447,434

 

10,080,398

 

(20,440,693)

 

(9,624,177)

 

21,639,352

 

Notes to the interim financial statements

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

 

 

December 31, 2020

 

Reported segments

 

Reconciliation

Consolidated

 

Raízen Energia

 

Raízen Combustíveis

 

Gas and Energy

 

Moove

 

Cosan Corporate

 

Deconsolidated effects

 

Segment elimination

 

 

 

Brazil

 

Argentina

 

 

 

 

 

 

Statement of financial position:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

2,293,506

 

752,369

 

396,039

 

1,899,533

 

936,345

 

1,778,175

 

(3,441,914)

 

 

4,614,053

Marketable securities

 

 

 

1,188,625

 

168,066

 

914,879

 

 

 

2,271,570

Trade receivables

1,835,656

 

2,070,824

 

358,816

 

1,121,612

 

483,227

 

 

(4,265,296)

 

 

1,604,839

Derivative financial instruments

4,904,580

 

2,835,980

 

 

517,181

 

28,463

 

2,581,774

 

(7,740,560)

 

 

3,127,418

Inventories

3,975,086

 

3,068,435

 

1,274,045

 

121,064

 

564,836

 

 

(8,317,566)

 

 

685,900

Sectorial financial assets

 

 

 

241,749

 

 

 

 

 

241,749

Other financial assets

160,600

 

 

 

 

69,126

 

779,695

 

(160,600)

 

 

848,821

Other current assets

4,862,274

 

3,003,780

 

769,740

 

276,139

 

146,166

 

1,211,108

 

(8,635,794)

 

(601,024)

 

1,032,389

Other non-current assets

5,374,084

 

2,247,516

 

61,018

 

169,905

 

398,796

 

1,566,400

 

(7,682,618)

 

(365,383)

 

1,769,718

Investments in associates

 

3,299,738

 

356

 

 

 

4,989,472

 

(3,300,094)

 

(4,655,767)

 

333,705

Investments in joint ventures

536,540

 

769,252

 

 

 

 

7,988,208

 

(1,305,792)

 

 

7,988,208

Biological assets

1,073,582

 

 

 

 

 

 

(1,073,582)

 

 

Derivative financial instruments

 

2,764,818

 

95,840

 

686,690

 

9,248

 

 

(2,860,658)

 

 

695,938

Right-of-use assets

4,698,238

 

86,737

 

425,391

 

19,865

 

39,550

 

24,809

 

(5,210,366)

 

 

84,224

Property, plant and equipment

11,667,442

 

2,544,094

 

3,953,982

 

15,326

 

327,535

 

74,135

 

(18,165,518)

 

 

416,996

Intangible assets and goodwill

3,599,864

 

2,479,947

 

9,221

 

8,769,986

 

1,268,095

 

7,215

 

(6,089,032)

 

 

10,045,296

Loans, borrowings and debentures

(17,516,886)

 

(6,258,929)

 

(781,703)

 

(7,043,909)

 

(802,938)

 

(7,580,380)

 

24,557,518

 

 

(15,427,227)

Derivative financial instruments

(4,502,866)

 

(246,237)

 

(15,155)

 

(286,018)

 

(348)

 

(131,461)

 

4,764,258

 

 

(417,827)

Trade payables

(3,244,436)

 

(5,203,174)

 

(863,672)

 

(1,182,111)

 

(688,139)

 

(4,942)

 

9,311,282

 

 

(1,875,192)

Employee benefits payable

(383,114)

 

(85,993)

 

(65,269)

 

(74,543)

 

(96,192)

 

(25,146)

 

534,376

 

 

(195,881)

Sectorial financial liabilities

 

 

 

(565,911)

 

 

 

 

 

(565,911)

Other current liabilities

(3,014,286)

 

(2,729,837)

 

(1,186,505)

 

(662,779)

 

(290,827)

 

(673,340)

 

6,930,628

 

40,998

 

(1,585,948)

Preferred shareholders payable in subsidiaries

 

 

 

 

 

(387,044)

 

 

 

(387,044)

Leases

(4,246,196)

 

(101,500)

 

(387,074)

 

(10,320)

 

(41,299)

 

(28,144)

 

4,734,770

 

 

(79,763)

Other non-current liabilities

(2,015,788)

 

(4,942,688)

 

(744,976)

 

(1,856,161)

 

(554,141)

 

(2,235,324)

 

7,703,452

 

925,409

 

(3,720,217)

Total assets (net of liabilities) allocated by segment

10,057,880

 

6,355,132

 

3,300,094

 

3,345,923

 

1,965,569

 

10,850,089

 

(19,713,106)

 

(4,655,767)

 

11,505,814

Total assets

44,981,452

 

25,923,490

 

7,344,448

 

15,027,675

 

4,439,453

 

21,915,870

 

(78,249,390)

 

(5,622,174)

 

35,760,824

Shareholders' equity attributable to:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity attributable to owners of the Company

9,967,891

 

6,075,393

 

3,300,094

 

3,288,315

 

1,367,157

 

10,847,666

 

(19,343,378)

 

(4,655,473)

 

10,847,665

Non-controlling interests

89,989

 

279,739

 

 

57,608

 

598,412

 

2,423

 

(369,728)

 

(294)

 

658,149

Total shareholders' equity

10,057,880

 

6,355,132

 

3,300,094

 

3,345,923

 

1,965,569

 

10,850,089

 

(19,713,106)

 

(4,655,767)

 

11,505,814

Notes to the interim financial statements

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

 

4.1  Net sales by segment

 

 

March 31, 2021

 

December 31, 2020

Reported segment

 

 

 

Raízen Energia

 

 

 

  Ethanol

3,735,930

 

3,669,801

  Sugar

3,437,927

 

2,302,881

  Gas

587,717

 

824,047

  Diesel

1,025,346

 

1,512,534

  Cogeneration

494,691

 

667,281

  Other

142,985

 

18,789

 

9,424,596

 

8,995,333

Raízen Combustíveis

 

 

 

  Fuels

26,030,763

 

23,240,477

  Other

456,319

 

283,648

 

26,487,082

 

23,524,125

Gas and Energy

 

 

 

Natural gas

 

 

 

  Industrial

1,508,875

 

1,487,813

  Residential

294,334

 

311,140

  Cogeneration

140,769

 

94,195

  Automotive

59,859

 

76,296

  Commercial

89,890

 

126,311

  Construction revenue

179,282

 

197,221

  Other

24,403

 

13,594

 

2,297,412

 

2,306,570

Electricity trading

219,210

 

168,775

Moove

 

 

 

  Finished goods

1,257,545

 

953,350

  Basic oil

128,952

 

51,394

  Services

31,059

 

26,423

 

1,417,556

 

1,031,167

Logistics

 

 

 

  North operations

589,227

 

  South operations

169,880

 

  Container operations

26,244

 

 

785,351

 

Reconciliation

 

 

 

Cosan Corporate

353

 

Deconsolidated effects and eliminations

(35,915,761)

 

(32,519,458)

Total

4,715,799

 

3,506,512


Notes to the interim financial statements

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


5  Financial assets and liabilities

 

Financial assets and liabilities are as following:

 

 

 

 

Parent Company

 

Consolidated

 

Note

 

March 31, 2021

 

December 31, 2020

 

March 31, 2021

 

December 31, 2020

Assets

 

 

 

 

 

 

 

 

 

  Fair value through profit or loss

 

 

 

 

 

 

 

 

 

    Cash and cash equivalents

5.1

 

704,884

 

1,148,860

 

1,509,462

 

2,154,257

    Marketable securities

5.2

 

844,191

 

788,965

 

3,735,659

 

2,271,570

    Other financial assets

5.4

 

 

779,695

 

69,381

 

848,821

    Derivate financial instruments

5.10

 

3,176,571

 

2,457,604

 

6,232,605

 

3,127,418

 

 

 

4,725,646

 

5,175,124

 

11,547,107

 

8,402,066

 Amortized cost

 

 

 

 

 

 

 

 

 

    Cash and cash equivalents

5.1

 

544,783

 

407

 

6,423,708

 

2,459,796

    Trade receivables

5.3

 

 

 

2,311,402

 

1,604,839

    Receivables from related parties

5.5

 

706,837

 

760,342

 

377,466

 

271,766

    Sector financial assets

5.9

 

 

 

184,105

 

241,749

    Dividends receivable

 

 

177,032

 

160,694

 

102,592

 

77,561

 

 

 

1,428,652

 

921,443

 

9,399,273

 

4,655,711

Total

 

 

6,154,298

 

6,096,567

 

20,946,380

 

13,057,777











 

Note

 

March 31, 2021

 

December 31, 2020

 

March 31, 2021

 

December 31, 2020

Liabilities

 

 

 

 

 

 

 

 

 

  Amortized cost

 

 

 

 

 

 

 

 

 

    Loans, borrowings and debentures

5.6

 

(1,761,793)

 

 

(17,224,203)

 

(8,590,199)

    Trade payables

5.7

 

(1,323)

 

(4,066)

 

(2,309,971)

 

(1,875,192)

    Other financial liabilities

 

 

 

 

(509,656)

 

(149,293)

    Lease liabilities

5.8

 

(37,614)

 

(28,145)

 

(3,087,190)

 

(79,763)

    Installment Leases and concessions under

11

 

 

 

(3,015,484)

 

    Payables to related parties

5.5

 

(7,939,597)

 

(7,374,879)

 

(366,835)

 

(150,484)

    Preferred shareholders payable in subsidiaries

 

 

(391,187)

 

(387,044)

 

(391,187)

 

(387,044)

    Dividends payable

 

 

(68,899)

 

(216,929)

 

(147,214)

 

(285,177)

    Sector financial liabilities

5.9

 

 

 

(603,510)

 

(565,911)

    Tax installments - REFIS

12

 

(193,108)

 

(193,353)

 

(201,885)

 

(199,586)

 

 

 

(10,393,521)

 

(8,204,416)

 

(27,857,135)

 

(12,282,649)

  Fair value through profit or loss

 

 

 

 

 

 

 

 

 

    Loans, borrowings and debentures

5.6

 

(4,254,085)

 

 

(19,351,831)

 

(6,837,028)

    Consideration payable

 

 

 

 

(218,115)

 

(224,787)

    Derivative financial instruments

5.10

 

(115,168)

 

(131,462)

 

(340,469)

 

(417,827)

 

 

 

(4,369,253)

 

(131,462)

 

(19,910,415)

 

(7,479,642)

Total

 

 

(14,762,774)

 

(8,335,878)

 

(47,767,550)

 

(19,762,291)


Notes to the interim financial statements

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


5.1 Cash and cash equivalents

 

 

Parent Company

 

Consolidated

 

March 31, 2021

 

December 31, 2020

 

March 31, 2021

 

December 31, 2020

Cash and bank accounts

544,621

 

255

 

685,467

 

75,160

Savings account

 

 

1,066,876

 

986,379

Financial investments

705,046

 

1,149,012

 

6,180,827

 

3,552,514

 

1,249,667

 

1,149,267

 

7,933,170

 

4,614,053

 

Financial investments include the following:

 

 

 

Parent company

 

Consolidated

 

 

March 31, 2021

 

December 31, 2020

 

March 31, 2021

 

December 31, 2020

Investment fund

 

 

 

 

 

 

 

 

Repurchase agreements

 

545,619

 

856,078

 

1,234,537

 

1,671,802

Bank certificate of deposits - CDB

 

159,265

 

292,782

 

261,377

 

474,910

Other

 

 

 

13,548

 

7,545

 

 

704,884

 

1,148,860

 

1,509,462

 

2,154,257

Bank investments

 

 

 

 

 

 

 

 

Repurchase agreements

 

 

 

54,397

 

1,293,833

Bank certificate of deposits - CDB

 

 

 

4,500,543

 

104,272

Other

 

162

 

152

 

116,425

 

152

 

 

162

 

152

 

4,671,365

 

1,398,257

 

 

705,046

 

1,149,012

 

6,180,827

 

3,552,514

 

The Company’s onshore financial investments are remunerated at rates around 100% of the Brazilian interbank offering rate (Certificado de Depósito Interbancário), or “CDI,” on March 31, 2021 (97% of CDI on December 31, 2020) and offshore financial investments are remunerated at rates around 100% of Fed funds. The sensitivity analysis on interest rate risks is in note 5.12.

 

Notes to the interim financial statements

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

 

5.2 Marketable securities and restricted cash


Accounting policy

Restricted cash are measured and classified at amortized cost, both of them with the average maturity of government bonds between two and five years, however they can be promptly redeemed and are subject to an insignificant risk of change in value.

 

 

Parent company

 

Consolidated

 

March 31, 2021

 

December 31, 2020

 

March 31,  2021

 

December 31, 2020

Marketable securities

 

 

 

 

 

 

 

Government security (i)

844,191

 

788,965

 

3,730,333

 

2,271,570

Bank certificate of deposit - CDB

 

 

5,326

 

 

844,191

 

788,965

 

3,735,659

 

2,271,570

Restricted cash

 

 

 

 

 

 

 

Securities pledged as collateral

30,012

 

 

59,872

 

 

30,012

 

 

59,872

 

 

(i) Government securities have stated interest connected to Special System for Settlement and Custody (Sistema Especial de Liquidação e de Custódia), or “SELIC”, with a return of approximately 100% of the CDI.

 

5.3 Trade receivables

        

 

 

Consolidated

 

 

March 31, 2021

 

December 31, 2020

Domestic – Local currency

 

2,357,843

 

1,717,683

Export – Foreign currency

 

81,750

 

17,502

 

 

2,439,593

 

1,735,185

 

 

 

 

 

Expected credit losses

 

(128,191)

 

(130,346)

 

 

2,311,402

 

1,604,839

 

 

 

 

 

Current

 

2,285,407

 

1,585,708

Non-current

 

25,995

 

19,131

 

 

2,311,402

 

1,604,839

 

Notes to the interim financial statements

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

 

5.4 Other financial assets

 

The balance of other financial assets is composed as following:

 

 

 

 

Parent Company

 

Consolidated

 

 

 

March 31, 2021

 

December 31, 2020

 

March 31, 2021

 

December 31, 2020

Rumo S.A. Shares (i)

 

 

 

770,862

 

 

770,862

Cosan Logística S.A. Shares (i)

 

 

 

8,833

 

 

8,833

Other financial assets (ii)

 

 

 

 

69,381

 

69,126

 

 

 

 

779,695

 

69,381

 

848,821

Current

 

 

 

779,695

 

69,381

 

848,821

 

 

 

 

779,695

 

69,381

 

848,821

 

(i)Through the corporate reorganization detailed in note 1.2, the registered value of the shares started to be classified as investments.


(ii)On March 31, 2020, Cosan Lubes Investments Limited (“CLI”) received R$65,478 due to the satisfaction of the conditions precedent on December 31, 2019, as provided for in the investment agreement between the Company and CVC Fund VII (“CVC”). On April 15, 2021, the updated amount of R$ 68,876 was liquidated.


Notes to the interim financial statements

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

 

5.5 Related parties

 

a)      Summary of balances to related parties

 

 

 

Parent Company

 

Consolidated

 

 

March 31, 2021

 

December 31, 2020

 

March 31, 2021

 

December 31, 2020

Current asset

 

 

 

 

 

 

 

 

Commercial operations

 

 

 

 

 

 

 

 

Raízen Energia S.A. (i)

 

13,833

 

23,274

 

45,213

 

29,485

Rumo S.A

 

1,330

 

4,289

 

 

8,388

Aguassanta Participações S.A.

 

947

 

837

 

947

 

837

Cosan Lubrificantes e Especialidades (ii)

 

12,149

 

219,613

 

 

Compass Gás e Energia

 

3,562

 

3,732

 

 

Payly Soluções e Pagamentos S.A

 

1,747

 

2,390

 

 

Raízen Combustíveis S.A. (i)

 

1,953

 

644

 

9,134

 

1,448

Termag - Terminal Marítimo de Guarujá S.A.

 

 

 

14,286

 

Other

 

1,780

 

9,190

 

694

 

8,601

 

 

37,301

 

263,969

 

70,274

 

48,759

Financial operations

 

 

 

 

 

 

 

 

Raízen Energia S.A. (i)

 

22,245

 

21,141

 

22,245

 

21,141

Cosan Lubrificantes e Especialidades

 

69,436

 

 

 

Raízen Combustíveis S.A.

 

1,883

 

1,883

 

1,883

 

1,883

 

 

93,564

 

23,024

 

24,128

 

23,024

Total current assets

 

130,865

 

286,993

 

94,402

 

71,783

Non-current assets

 

 

 

 

 

 

 

 

Commercial operations

 

 

 

 

 

 

 

 

Raízen Combustíveis S.A. (i)

 

 

 

47,731

 

Termag - Terminal Marítimo de Guarujá S.A.

 

 

 

75,000

 

 

 

 

 

122,731

 

Preferred shares

 

 

 

 

 

 

 

 

Janus Brasil Participações S.A

 

4,959

 

 

4,959

 

Raízen Combustíveis S.A. (i)

 

 

 

199

 

 

 

4,959

 

 

5,158

 

Corporate / financial operations

 

 

 

 

 

 

 

 

Raízen Energia S.A.

 

155,175

 

155,175

 

155,175

 

155,175

Other

 

 

 

 

44,808

Cosan Lubrificantes e Especialidades (ii)

 

415,838

 

318,174

 

 

 

 

571,013

 

473,349

 

155,175

 

199,983

Total non-current assets

 

575,972

 

473,349

 

283,064

 

199,983

Total assets

 

706,837

 

760,342

 

377,466

 

271,766

 

Notes to the interim financial statements

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

 

 

 

Parent Company

 

Consolidated

 

 

March 31, 2021

 

December 31, 2020

 

March 31, 2021

 

December 31, 2020

Current liabilities

 

 

 

 

 

 

 

 

Commercial operations

 

 

 

 

 

 

 

 

Raízen Energia S.A. (i)

 

30,934

 

30,447

 

58,125

 

42,709

Raízen Combustíveis S.A. (i)

 

 

 

206,382

 

Rumo S.A

 

387

 

571

 

 

704

Cosan Lubrificantes e Especialidades (ii)

 

533

 

8,059

 

 

Other

 

5,041

 

258

 

933

 

53

 

 

36,895

 

39,335

 

265,440

 

43,466

Corporate / financial operations

 

 

 

 

 

 

 

 

Raízen Combustíveis S.A. (i)

 

14,693

 

11,386

 

14,693

 

11,387

Cosan Overseas Limited (iii)

 

36,814

 

33,579

 

 

Cosan Luxembourg S.A. (iii)

 

23,275

 

103,643

 

 

Raízen Energia S.A.

 

81,978

 

90,797

 

86,561

 

95,631

Shell Brazil Holding B.V.

 

 

 

141

 

 

 

156,760

 

239,405

 

101,395

 

107,018

Total current liabilities

 

193,655

 

278,740

 

366,835

 

150,484

Non-current liabilities

 

 

 

 

 

 

 

 

Corporate / financial operations

 

 

 

 

 

 

 

 

Cosan Lubrificantes e Especialidades (ii)

 

877,012

 

875,690

 

 

Cosan Luxembourg S.A. (iii)

 

3,951,078

 

3,603,911

 

 

Aldwich

 

49,261

 

 

 

Cosan Overseas Limited (iii)

 

2,868,591

 

2,616,538

 

 

Total non-current liabilities

 

7,745,942

 

7,096,139

 

 

Total liabilities

 

7,939,597

 

7,374,879

 

366,835

 

150,484

 

(i)Current and non-current assets receivable from Raízen Energia and Raízen Combustíveis are, primarily, tax credits which will be reimbursed to the Company when realized. The preferred shares are used to Raízen reimburse Cosan, with preferential dividends, when the net operating loss is consumed in Raízen.



Current liabilities represent amounts owed to Raízen Energia and Raízen Combustíveis related to expenses regarding legal disputes and other liabilities, generated before the formation of joint ventures, which are responsibility of Cosan S.A..


(ii)On December 31, 2018, a contract for the assumption of rights and obligations between the Company and the subsidiary CLE was signed and assets and liabilities related to the fuel business were transferred from the acquisition of Esso Brasileira de Petróleo Ltda. (“Esso”) in 2008, which were not contributed to the formation of Raízen, a fact that generated an increase in the active and passive accounts of related parties of the Company in that year and which has been moved as the transactions are settled. This transfer of assets and liabilities does not impact the consolidated position of Company. nor the information by segment.

       

Notes to the interim financial statements

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

 

(iii)These operations serve as a vehicle for the transfer of resources from the Company to the subsidiaries, which are the bondholders and who are responsible for honoring their obligations. The increases observed in these liability balances refer to the exchange rate variation, which affected the PPE (Export Prepayment) operations that we have today between the Companies and the subsidiaries Cosan Luxemburgo S.A and Cosan Overseas Limited.


b)     Related party transactions

 

Parent Company

 

Consolidated

 

March 31, 2021

 

March 31, 2020

 

March 31, 2021

 

March 31, 2020

Revenue

 

 

 

 

 

 

 

Rumo S.A (i)

 

 

10,636

 

7,662

Raízen Energia S.A.

 

 

14,030

 

5,725

Raízen Combustíveis S.A

 

 

8,945

 

10,046

Shell Energy do Brasil Ltda.

 

 

7,934

 

 

 

 

41,545

 

23,433

Purchase of goods / inputs / services

 

 

 

 

 

 

 

Raízen Energia S.A.

 

 

(13,332)

 

Raízen Combustíveis S.A

 

 

(823)

 

Other

 

 

 

(14)

 

 

 

(14,155)

 

(14)

Shared (expenses) income

 

 

 

 

 

 

 

Rumo S.A (i)

842

 

1,192

 

842

 

1,192

Cosan Lubrificantes e Especialidades

740

 

1,045

 

 

Payly Soluções de Pagtos S.A.

36

 

 

 

Compass Gas e Energia S.A

784

 

 

 

Comgas Cia De Gas De São Paulo

328

 

 

 

Sinlog Tecnologia em Logística S.A.

36

 

 

36

 

Raízen Energia S.A.

(1,258)

 

(1,061)

 

(12,245)

 

(13,201)

 

1,508

 

1,176

 

(11,367)

 

(12,009)

Financial result

 

 

 

 

 

 

 

Cosan Lubrificantes e Especialidades

 

(1,750)

 

 

Cosan Limited (i)

82

 

286

 

168

 

533

Cosan Luxembourg S.A.

(378,158)

 

(849,240)

 

 

Cosan Overseas Limited

(311,234)

 

(639,973)

 

 

Raízen Combustíveis S.A

1,308

 

2,067

 

 

Aldwych Temple Venture

(1,491)

 

 

1,308

 

2,067

 

(689,493)

 

(1,488,610)

 

1,476

 

2,600

Total

(687,985)

 

(1,487,434)

 

17,499

 

14,010

 

(i)         Balances related to the months before the date of the corporate restructuring 1.2.

 

Notes to the interim financial statements

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

 

c)      Officers’ and directors’ compensation

 

The Company has a compensation policy approved by the Board of Directors that includes salaries, contributions to a post-employment defined benefit plan and share-based payment according notes 21 and 22.

 

 

March 31, 2021

 

March 31, 2020

Short-term benefits to officers and directors

9,983

 

7,044

Share-based payment transactions

445

 

3,762

Post-employment benefits

87

 

 

10,515

 

10,806

 

5.6 Loans, borrowings and debentures

 

Description

 

Index

 

Annual interest rate

 

March 31, 2021

 

December 31, 2020

 

Maturity

 

Objective

Without guarantee

 

 

 

 

 

 

 

 

 

 

 

 

Senior Notes Due 2029

 

Fixed 5,50%

 

5.50%

 

4,254,085

 

 

Sep-29

 

Acquisition

Non-convertible debentures

 

CDI + 2,65

 

5.37%

 

1,761,793

 

 

Aug-25

 

Investment

Total

 

 

 

 

 

6,015,878

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

 

 

 

 

44,863

 

 

 

 

 

Non-current

 

 

 

 

 

5,971,015

 

 

 

 

 

 


Notes to the interim financial statements

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

 

 

Interest

 

Consolidated

 

 

 

 

Description

 

Index

 

Annual interest rate

 

March 31, 2021

 

December 31, 2020

 

Maturity

 

Objective

Secured

 

 

 

 

 

 

 

 

 

 

 

 

BNDES

 

URTJLP

 

6.51%

 

3,060,887

 

 

Dec-29

 

Investment

 

 

Fixed

 

5.63%

 

600,795

 

 

Jan-25

 

Investment

 

 

IPCA

 

7.46%

 

831

 

 

Nov-21

 

Investment

 

 

URTJLP

 

9.93%

 

264

 

 

Mar-22

 

Investment

 

 

Fixed

 

3.50%

 

990

 

 

Jan-24

 

Investment

 

 

IPCA - 3.25%

 

8.21%

 

978,684

 

807,438

 

Apr-29

 

Investment

 

 

IPCA - 4.10%

 

9.10%

 

170,257

 

175,374

 

Apr-29

 

Investment

Export Credit Agreement (ECA)

 

Euribor + 0,58%

 

0.58%

 

112,213

 

 

Sep-26

 

Investment

European investment bank (EIB)

 

USD + Libor 6M + 0,54%

 

0.80%

 

33,725

 

30,817

 

May-21

 

Investment

 

 

USD + Libor 6M + 0,61%

 

0.80%

 

31,539

 

57,813

 

Sep-21

 

Investment

 

 

 

 

 

 

4,990,185

 

1,071,442

 

 

 

 

Unsecured

 

 

 

 

 

 

 

 

 

 

 

 

Foreign loans

 

GBP+Libor 06 + 1,50% Base 365

 

1.40%

 

157,557

 

143,039

 

Jul-21

 

Working capital

 

 

GBP - Fixed

 

1.40%

 

39,487

 

35,556

 

Nov-22

 

Working capital

 

 

GBP+Libor-06 + 1,10% Base 360

 

1.18%

 

157,259

 

142,091

 

Dec-21

 

Acquisition

 

 

GBP+Libor-06 + 1,50% Base 360

 

1.53%

 

276,269

 

248,666

 

Dec-22

 

Acquisition

 

 

EUR - Pré-fixado

 

4.42%

 

1,734

 

2,095

 

Sep-22

 

Investment

 

 

CDI + 1,03%

 

3.70%

 

82,792

 

 

Feb-23

 

Investment

 

 

CDI + 0,80%

 

3.47%

 

501,824

 

 

Dec-23

 

Investment

Loan 4131

 

USD

 

0.93%

 

299,534

 

 

Nov-22

 

Working capital

 

 

CDI

 

4.60%

 

209,466

 

 

Apr-21

 

Working capital

 

 

USD + 3,67%

 

3.67%

 

448,384

 

415,232

 

May-23

 

Investment

 

 

USD + 1,59%

 

1.59%

 

 

388,912

 

Apr-21

 

Investment

 

 

USD + 1,36%

 

1.60%

 

411,505

 

 

Feb-24

 

Investment

 

 

IPCA + 0,81%

 

5.81%

 

264,866

 

 

Jan-48

 

Working capital

 

 

Fixed

 

1.87%

 

20,209

 

 

Oct-21

 

Working capital

Perpetual Notes

 

USD

 

8.25%

 

2,884,555

 

2,631,100

 

Nov-40

 

Acquisition

Senior Notes Due 2023

 

USD

 

5.00%

 

603,906

 

569,466

 

Mar-23

 

Acquisition

Senior Notes Due 2025

 

USD

 

5.88%

 

3,198,838

 

 

Jan-25

 

Acquisition

Senior Notes Due 2027

 

USD

 

7.00%

 

4,443,306

 

4,379,812

 

Jan-27

 

Acquisition

Senior Notes Due 2028

 

USD

 

5.25%

 

2,775,562

 

 

Jan-28

 

Acquisition

Senior Notes Due 2029

 

Fixed 5,50%

 

5.50%

 

4,254,085

 

 

Sep-29

 

Acquisition

Prepayment

 

100% Libor-03 - 3.50% base 360

 

0.00%

 

 

27,129

 

Mar-21

 

Working capital

 

 

100% Libor-03 - 1% base 360

 

1.20%

 

115,420

 

104,318

 

Nov-21

 

Working capital

Debentures

 

IPCA + 4,68%

 

9.70%

 

552,106

 

 

Feb-26

 

Investment

 

 

IPCA + 4,50%

 

9.52%

 

694,131

 

 

Feb-29

 

Investment

 

 

IPCA + 3,60%

 

6.24%

 

374,017

 

 

Dec-30

 

Working capital

 

 

CDI + 2,65

 

5.37%

 

1,761,793

 

 

Aug-25

 

Investment

 

 

IPCA + 6,80%

 

11.93%

 

838,747

 

 

Apr-30

 

Investment

 

 

IPCA + 3,90%

 

8.89%

 

1,002,781

 

 

Oct-29

 

Investment

 

 

IPCA + 4,00%

 

8.99%

 

1,003,867

 

 

Dec-35

 

Investment

 

 

IPCA + 7,48%

 

12.64%

 

312,369

 

299,524

 

Dec-22

 

Investment

 

 

IPCA + 7,36%

 

12.51%

 

102,168

 

97,956

 

Dec-25

 

Investment

 

 

IPCA + 5,87%

 

10.95%

 

883,036

 

890,658

 

Dec-23

 

Investment

 

 

IPCA + 4,33%

 

9.34%

 

468,629

 

452,457

 

Oct-24

 

Investment

 

 

IGPM + 6,10%

 

19.49%

 

325,315

 

298,706

 

May-28

 

Investment

 

 

100% CDI +0,50%

 

3.16%

 

2,020,296

 

2,007,849

 

Oct-22

 

Investment

Working capital

 

100% CDI - 2.75%

 

5.47%

 

100,036

 

100,045

 

Jun-22

 

Working capital

Promissory notes

 

100% CDI - 3.00%

 

4.96%

 

 

601,058

 

Apr-21

 

Investment

 

 

100% CDI - 3.40%

 

5.36%

 

 

520,116

 

Apr-21

 

Investment

 

 

 

 

 

 

31,585,849

 

14,355,785

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

 

 

36,576,034

 

15,427,227

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current

 

 

 

 

 

2,413,080

 

2,352,057

 

 

 

 

Non-current

 

 

 

 

 

34,162,954

 

13,075,170

 

 

 

 

Notes to the interim financial statements

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

 

The Company used the annual average rate of the CDI of 2.65% and Long-term Interest Rate (Taxa de Juros de Longo Prazo), or “TJLP,” of 4.39%. 

 

Non-current borrowings are scheduled to fall due as follows:

 

 

 

Parent Company

 

Consolidated

 

 

March 31, 2021

 

December 31, 2020

 

March 31, 2021

 

December 31, 2020

13 to 24 months

 

 

 

4,343,252

 

2,605,687

25 to 36 months

 

580,000

 

 

3,322,477

 

2,039,863

37 to 48 months

 

580,000

 

 

5,009,523

 

623,971

49 to 60 months

 

580,000

 

 

1,304,915

 

171,794

61 to 72 months

 

 

 

5,047,022

 

238,050

73 to 84 months

 

 

 

3,996,770

 

4,512,773

85 to 96 months

 

 

 

1,609,097

 

238,095

Thereafter

 

4,231,015

 

 

9,529,898

 

2,644,937

 

 

5,971,015

 

 

34,162,954

 

13,075,170

 

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

 

 

Parent Company

 

Consolidated

 

 

March 31, 2021

 

December 31, 2020

 

March 31, 2021

 

December 31, 2020

Brazilian reais (BRL)

 

1,761,793

 

 

16,310,947

 

6,251,180

U.S. Dollar (USD)

 

4,254,085

 

 

19,500,359

 

8,604,600

British pound (GBP)

 

 

 

630,572

 

569,352

Euro (EUR)

 

 

 

134,156

 

2,095

 

 

6,015,878

 

 

36,576,034

 

15,427,227

 

On February 23, 2021, the subsidiary Comgás, based on its Liability Management policy and current market conditions, decided to prepay the loan 4131 contracted with Scotiabank in April 2020, with exchange of indexer by means of swap considering tax of CDI + 2.75% and original maturity in April 2021, subsequently contracting a debt of equal value with the same counterparty, however, extending the term by three years to mature in February 2024, with exchange of indexer by means of swap tax of CDI + 1.25%. The only effect of this transaction on the interim financial statements for the three-month period ended March 31, 2021, was the positive result of the settlement of the swap for on 2020 operation with a net cash receipt of approximately R$5 million.



Notes to the interim financial statements

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

 

All debts denominated in U.S. dollar have currency risk protection through derivative financial instruments (Note 5.10), except for perpetual notes.

 

Below are the movements in loans, borrowings and debentures occurred for the period ended March 31, 2021:

 

 

Parent Company

 

Consolidated

March 31, 2020

 

 

15,427,227

Corporate reorganization (Note 1.2)

 

5,982,343

 

26,817,519

Raised

 

 

583,128

Amortization of principal (i)

 

(5,427)

 

(6,945,855)

Payment of interest

 

(134,759)

 

(513,490)

Interest, exchange rate and fair value

 

173,721

 

1,207,505

March 31, 2021

 

6,015,878

 

36,576,034

 

(i)         Debt settlement: Senior Notes Due 2024 (R$4,514,289), NCE CDI + 3.05% (R$208,464) and NCE CDI + 3.15% (R$468,516), by the subsidiary Rumo S.A..

 

a)    Guarantees

The subsidiary Comgás has financing contracts with the European Investiment Bank (“EIB”), destined for investments and is guaranteed, according to each contract, by bank guarantee, with an average cost of 1.47% per year or by real guarantees (assets) and guarantee account. As of March 31, 2021, the balance of bank guarantees contracted was R$123,885 (R$113,000 on December 31, 2020).

 

In Rumo some financing contracts with the National Bank for Economic and Social Development (“BNDES”), intended for investments, are also guaranteed, according to each contract, by bank guarantee, with an average cost of 0.93% per year or by real guarantees (assets) and guarantee account. On March 31, 2021, the balance of bank guarantees contracted was R$3,392,192 (R$3,687,323 on December 31, 2020).

 


Notes to the interim financial statements

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

 

To calculate the average rates, the annual average CDI of 2.25% (2.78% as of December 31, 2020) and TJLP of 4.70% (4.87% as of December 31, 2020) were considered on an annual basis.

 

b)    Available credit line

As of March 31, 2021, the Company had credit lines in banks with AA rating, which were not used, in the total amount of R$250,000 (R$250,000 on December 31, 2020) and R$1,201,981 (R$487,378 in December 31, 2020), to investee Rumo SA.

 

The use of these credit lines is subject to certain contractual conditions.

 

c)    Financial covenants

Under the terms of the major borrowing facilities, the Company and its subsidiaries are required to comply with the following financial covenants:

 

Debt


Triggers


Ratios

Debenture 4th Issue – Comgás


Short-term indebtedness/ Total indebtedness (iii) cannot exceed 0.6


 0.05

Debenture 4th to 8th Issue – Comgás


Net debt (i) / EBITDA (ii) cannot exceed 4.00


 1.70

BNDES - Comgás


 1.70

Resolution 4131 - Comgás


 1.70

Senior Notes Due 2027 - Cosan


Net debt pro forma (iv) / EBITDA (ii) | (iv) not higher than or equal to 3.5


 3.00

Senior Notes Due 2029 - Cosan


Net debt (i) / EBITDA (ii) not higher than or equal to 3.5


 3.00

Senior Notes Due 2025 - Rumo


Net debt (i) / EBITDA (ii) not higher than or equal to 3.3


 2.00

BNDES - Rumo


EBITDA (ii) / Consolidated financial result (v) higher or equal 2.0x in December 2021


293.86 (vi)

 


(i)Net debt consists of current and non-current debt, net of cash and cash equivalents and marketable securities. Net debt is a non-GAAP measure.

(ii) Corresponds to the accumulated EBITDA of the last twelve months.

(iii)  Indebtedness means the sum of current and noncurrent loans, financing and debentures, leases and current and noncurrent derivative financial instruments.


Notes to the interim financial statements

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

 


(iv)Net debt and EBITDA pro forma, including joint ventures financial information. Net debt and EBITDA pro forma are a non-GAAP measure.

(v)The financial result of the net debt is represented by the cost of the net debt.

(vi)The Rumo S.A. presented a financial result from the consolidated debt due to the prepayment of Senior Notes 2024, excluding the effects of this operation, the index would be 11.11.


For the other loans, borrowings and debentures of the Company there are no debt financial covenants.

 

The terms of loans included cross-default provisions.

 

On March 31, 2021, the Company and its subsidiaries was in compliance with all debt financial covenants.

 

d)     Fair value and exposure to financial risk

 

The fair value of the loans is based on the discounted cash flow using its implicit discount rate. They are classified as a level 2 fair value in the hierarchy (Note 5.10) due to the use of unobservable data, including own credit risk.

 

The details of the Company’s exposure to risks arising from loans are shown in Note 5.12.

 


Notes to the interim financial statements

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

 

5.7 Trade payables

 

The carrying amounts of suppliers and other accounts payable are the same as their fair values, due to their short-term nature.

 

 

 

Parent Company

 

Consolidated

 

 

March 31, 2021

 

December 31, 2020

 

March 31, 2021

 

December 31, 2020

Materials and service suppliers

 

1,323

 

4,066

 

1,450,456

 

1,095,051

Natural gas/ transport and logistics suppliers

 

 

 

859,515

 

780,141

 

 

1,323

 

4,066

 

2,309,971

 

1,875,192

 

5.8 Leases

 

Accounting policy 

At the beginning or in the modification of a contract, the Company assesses whether a contract is or contains a lease.

 

The lease liability is initially measured at the present value of lease payments that are not made on the start date, discounted at the interest rate implicit in the lease or, if that rate cannot be determined immediately, by the Company’s incremental loan rate. The Company generally uses its incremental loan rate as a discount rate.

 

The lease payments included in the measurement of the lease liability comprise the following:

 

  • fixed payments, including fixed payments in essence;
  • variable lease payments that depend on index or rate, initially measured using the index or rate on the start date;
  • amounts expected to be paid by the lessee, in accordance with the residual value guarantees; and

 



Notes to the interim financial statements

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


  • the exercise price of the call option if the lessee is reasonably certain to exercise that option, and payment of fines for terminating the lease, if the lease term reflects the lessee exercising the option to terminate the lease.

 

Subsequent valuation of the lease liability is at amortized cost, using the effective interest method. It is remeasured when there is a change in future lease payments resulting from a change in index or rate, if there is a change in the amounts that are expected to be paid according to the residual value guarantee, if the Company changes its valuation, an option will be exercised purchase, extension or termination or if there is an essentially fixed revised lease payment.

 

When the lease liability is remeasured in this way, an adjustment corresponding to the carrying amount of the right-of-use asset is made or is recorded in the income statement if the carrying amount of the right-of-use asset has been reduced to zero.



 

Consolidated

 

Financial

 

Operational - concessions

 

Operational - other

 

Total

At January 1, 2021

 

 

79,763

 

79,763

Corporate reorganization (Note 1.2)

403,008

 

2,353,947

 

194,006

 

2,950,961

Additions

 

 

22,693

 

22,693

Appropriation of interest and exchange variation

4,142

 

22,484

 

5,538

 

32,164

Repayments of principal from debts

(10,739)

 

(12,124)

 

(4,906)

 

(27,769)

Payments of interest from debts

 

(16,514)

 

(1,968)

 

(18,482)

Contractual adjustment

 

47,815

 

45

 

47,860

At March 31, 2021

396,411

 

2,395,608

 

295,171

 

3,087,190

 

 

 

 

 

 

 

 

Current

223,399

 

239,256

 

70,860

 

533,515

Non-current

173,012

 

2,156,352

 

224,311

 

2,553,675

 

396,411

 

2,395,608

 

295,171

 

3,087,190

 

Notes to the interim financial statements

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

 

5.9 Sector financial asset and liability

 

The changes in net sector financial asset (liability) for the period ended March 31, 2021 were as follows:


 

 

Sectorial assets

 

Sectorial liabilities

 

Total

January 01, 2021

 

241,749

 

(565,911)

 

(324,162)

Cost of gas (i)

 

(59,010)

 

-

 

(59,010)

Credits of taxes (ii)

 

-

 

(37,599)

 

(37,599)

Monetary variations (iii)

 

1,366

 

-

 

1,366

Other revenue (iv)

 

-

 

-

 

-

March 31, 2021

 

184,105

 

(603,510)

 

(419,405)

 

 

 

 

 

 

 

Current

 

184,105

 

(92,386)

 

91,719

Non-current

 

-

 

(511,124)

 

(511,124)

 

 

184,105

 

(603,510)

 

(419,405)

 

(i)Refers to the cost of gas purchased higher than that contained in the tariffs, 100% classified in current assets, since ARSESP's resolution provides for tariff recovery on a quarterly basis.
(ii)Credits, mainly, from the exclusion of ICMS on the basis of PIS and COFINS, which will be returned to consumers when the lawsuit is final, and which should be discussed with ARSESP regarding the mechanisms and criteria for reimbursement.
(iii)Monetary restatement on the current gas account, based on the SELIC rate.


Notes to the interim financial statements

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

 

5.10 Derivative financial instruments

 

 

Notional

 

Fair value

 

March 31, 2021

 

December 31, 2020

 

March 31, 2021

 

December 31, 2020

Fuel derivative agreements

 

 

 

 

 

 

 

  Forward agreements (i)

 

13,422

 

 

(348)

 

 

 

 

 

 

 

 

Energy derivative agreements

 

 

 

 

 

 

 

  Forward agreements (ii)

1,374,618

 

1,354,967

 

(137,781)

 

(189,423)

 

 

 

 

 

 

 

 

Exchange rate derivatives

 

 

 

 

 

 

 

  Forward agreements

1,540,336

 

345,144

 

86,318

 

(509)

 

 

 

 

 

 

 

 

Interest rate and exchange rate risk

 

 

 

 

 

 

 

  Swap agreements (shares) (iii)

600,000

 

 

308,440

 

  Swap agreements (interest rate)

4,463,765

 

1,170,861

 

645,488

 

346,488

  Swap agreements (exchange and interest rate)

11,124,750

 

4,281,071

 

4,989,671

 

2,553,383

 

16,188,515

 

5,451,932

 

5,943,599

 

2,899,871

 

 

 

 

 

 

 

 

Total financial instruments

 

5,892,136

 

2,709,591

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

382,585

 

156,208

Non-current assets

 

 

 

 

5,850,020

 

2,971,210

Current liabilities

 

 

 

 

(225,870)

 

(293,656)

Non-current liabilities

 

 

 

 

(114,599)

 

(124,171)

Total

 

 

 

 

5,892,136

 

2,709,591

 

(i)Forward contracts for fuels contracted by the subsidiary Moove, which seek to reduce possible impacts on the price fluctuation of the commodity that can affect our lubricant costs.


(ii)The subsidiary Compass Gás e Energia has a portfolio of energy contracts (purchase and sale) aimed at meeting demands and offers for consumption or supply of energy. In addition, there is a portfolio of contracts that comprises forward positions, usually short-term. For this portfolio, there is no purchase commitment with a sales contract.


Notes to the interim financial statements

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

 

(iii)The Company contracted a Total Return Swap, with Banco Santander (Brasil) S.A. In accordance with the total return swap, which will have a financial settlement, Cosan will receive the return on the variation in the price of CSAN3 shares adjusted by the dividends for the period and will pay interest annual rates referenced to CDI + Spread. The equivalent contracted amount of CSAN3 shares with a total return swap was 9,937,003 and the total initial value is R$600,000.

 

Derivatives are only used for economic hedging purposes and not as speculative investments.

 

Fair value hedge

 

Currently the Company has adopted the hedge accounting of fair value for some its operations. Both the hedging instruments and the hedged items are measured and recognized at fair value through profit or loss.

 

The effects of the foreign currency-related hedging instruments and interest rate swaps on the Company’s financial position and performance are as follows:

 

 

 

Book value

 

Accumulated fair value adjustment

 

Notional

 

March 31, 2021

 

December 31, 2020

 

March 31, 2021

 

December 31, 2020

Exchange rate hedge

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Designated items

 

 

 

 

 

 

 

 

 

     Senior notes 2025 (Rumo Luxembourg)

(1,740,550)

 

(3,198,838)

 

 

15,777

 

     Senior notes 2028 (Rumo Luxembourg)

(2,791,600)

 

(2,775,562)

 

 

71,314

 

Total debt

(4,532,150)

 

(5,974,400)

 

 

87,091

 

 

 

 

 

 

 

 

 

 

 

Derivative financial instruments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     Senior swaps notes 2025 (Rumo Luxembourg)

1,740,550

 

1,485,832

 

 

(13,748)

 

     Senior swaps notes 2028 (Rumo Luxembourg)

2,791,600

 

494,411

 

 

5,589

 

Derivative total

4,532,150

 

1,980,243

 

 

(8,159)

 

 

 

 

 

 

 

 

 

 

 

Total

 

(3,994,157)

 

 

78,932

 

 

Notes to the interim financial statements

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

 

 

 

 

 

 

Book value

 

Accumulated fair value adjustment

 

Notional

 

March 31, 2021

 

December 31, 2020

 

March 31, 2021

 

December 31, 2020

Interest rate hedge

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Designated items

 

 

 

 

 

 

 

 

 

     Senior notes 2023 (Cosan Luxembourg)

(691,157)

 

(603,906)

 

(569,466)

 

(231,636)

 

(237,050)

     Debenture 3rd issue - 3rd series (Comgás)

 

 

 

 

575

     Debenture 5th issue - single series (Comgás)

(684,501)

 

(883,036)

 

(890,658)

 

7,622

 

(22,040)

     Debenture (Rumo)

(2,329,136)

 

(2,380,664)

 

 

36,984

 

Total debt

(3,704,794)

 

(3,867,606)

 

(1,460,124)

 

(187,030)

 

(258,515)

 

 

 

 

 

 

 

 

 

 

Derivative financial instruments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     Senior swaps notes 2023 (Cosan Luxembourg)

691,157

 

433,317

 

392,899

 

35,012

 

(42,532)

     Debenture 3rd issue swaps - 3rd series (Comgás)

 

 

 

 

862

     Debenture 5th issue swaps - single series (Comgás)

684,501

 

195,752

 

211,741

 

(15,989)

 

10,731

     Debenture Swap (Rumo)

2,354,965

 

123,905

 

 

7,627

 

Derivative total

3,730,623

 

752,974

 

604,640

 

26,650

 

(30,939)

 

 

 

 

 

 

 

 

 

 

Total

25,829

 

(3,114,632)

 

(855,484)

 

(160,380)

 

(289,454)

 

Fair value option

 

Certain derivative instruments have not been linked to documented hedge structures. The Company opted to designate the protected liabilities (hedge objects) to be recorded at fair value through profit or loss. Considering that derivative instruments are always accounted for at fair value through profit or loss, the accounting effects are the same that would be obtained through hedge documentation:


Notes to the interim financial statements

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



 

 

 

 

 

Book value

 

Accumulated fair value adjustment

 

 

 

Notional

 

March 31, 2021

 

December 31, 2020

 

March 31, 2021

 

December 31, 2020

Exchange rate hedge

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Objects

 

 

 

 

 

 

 

 

 

 

 

Sênior Notes 2027

USD+7,0%

 

(3,703,245)

 

(4,461,557)

 

(4,379,812)

 

207,213

 

(349,181)

EIB 3ª Tranche

US$ + LIBOR6M + 0,54%

 

(9,625)

 

(33,725)

 

(30,817)

 

507

 

156

EIB 4ª Tranche

US$ + LIBOR6M + 0,61%

 

(9,237)

 

(31,539)

 

(57,813)

 

441

 

308

Loan 4131 (Comgás - 2018)

US$ + 3,67%

 

(268,125)

 

(448,384)

 

(415,232)

 

(15,811)

 

(24,247)

Loan 4131 (Comgás - 2020)

US$ + 1,59%

 

 

 

(388,912)

 

 

1,967

Loan 4131 (Comgás - 2021)

US$ + 1,60%

 

(407,250)

 

(411,505)

 

 

16,374

 

ECA

EUR + 0,58%

 

(100,198)

 

(112,213)

 

 

11,588

 

Loan 4131 (Rumo)

USD + 2,20%

 

(220,000)

 

(299,534)

 

 

3,162

 

Total

 

 

(4,717,680)

 

(5,798,457)

 

(5,272,586)

 

223,474

 

(370,997)

 

 

 

 

 

 

 

 

 

 

 

 

Derivative instruments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FX and interest swap

BRL + 126,85% do CDI

 

3,703,245

 

2,157,170

 

2,272,648

 

270,391

 

1,320,629

EIB 3ª Tranche

BRL + 88,5% do CDI

 

9,625

 

23,789

 

21,176

 

2,613

 

24,927

EIB 4ª Tranche

BRL + 81,1% do CDI

 

9,237

 

22,120

 

39,256

 

4,891

 

26,219

Loan 4131 (Comgás - 2018)

BRL + 107,9% do CDI

 

268,125

 

192,812

 

154,627

 

38,185

 

117,080

Loan 4131 (Comgás - 2020)

BRL + CDI + 2,75%

 

 

 

(6,214)

 

15,711

 

(12,904)

Loan 4131 (Comgás - 2021)

BRL + CDI + 1,25%

 

407,250

 

4,811

 

 

4,811

 

Inflation and interest rate swaps

BRL + 107% do CDI

 

100,198

 

42,327

 

 

(5,902)

 

Inflation and interest rate swaps

BRL + 118% do CDI

 

220,000

 

100,438

 

 

4,128

 

Derivative total

 

 

4,717,680

 

2,543,467

 

2,481,493

 

334,828

 

1,475,951

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

(3,254,990)

 

(2,791,093)

 

558,302

 

1,104,954

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Book value

 

Accumulated fair value adjustment

 

 

 

Notional

 

March 31, 2021

 

December 31, 2020

 

March 31, 2021

 

December 31, 2020

Interest rate hedge

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Objects

 

 

 

 

 

 

 

 

 

 

 

     Debenture (Rumo)

IPCA + 4,68%

 

(500,000)

 

(552,106)

 

 

(3,056)

 

     Debenture (Rumo)

IPCA + 4,50%

 

(600,000)

 

(694,131)

 

 

1,757

 

Total

 

 

(1,100,000)

 

(1,246,237)

 

 

(1,299)

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative instruments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FX and interest swap

107% CDI

 

500,000

 

70,819

 

 

(2,658)

 

FX and interest swap

105% CDI

 

600,000

 

90,259

 

 

(5,306)

 

Derivative total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

(1,100,000)

 

(1,246,237)

 

 

(1,299)

 

 

Notes to the interim financial statements

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

 

There is an economic relationship between the hedged item and the hedge instrument, since the terms of the interest rate and foreign exchange swap correspond to the terms of the fixed rate loan, that is, notional amount, term and payment. The Company established a 1:1 hedge ratio for hedge relationships, since the underlying risk of the interest rate and exchange rate swap is identical to the hedged risk component. To test the effectiveness of the hedge, the Company uses the discounted cash flow method and compares the changes in the fair value of the hedge instrument with the changes in the fair value of the hedged item attributable to the hedged risk. 


5.11 Recognized fair value measurements

 

The market value of the Senior Notes are listed on the Luxembourg Stock Exchange (Note 5.6) is based on their quoted market price are as follows:

 

 

 

Company

 

March 31, 2021

 

December 31, 2020

Senior notes 2023

 

Cosan Luxembourg

 

100.16%

 

101.02%

Senior notes 2025

 

Rumo Luxembourg

 

105.43%

 

104.96%

Senior notes 2028

 

Rumo Luxembourg

 

105.07%

 

105.04%

Senior notes 2027

 

Cosan Luxembourg

 

106.57%

 

108.20%

Senior notes 2029

 

Cosan S.A.

 

106.01%

 

103.47%

Perpetual notes

 

Cosan Overseas Limited

 

102.79%

 

102.88%

 

All the resulting fair value estimates are included in level 2.

 

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, 2021

 

December 31, 2020

 

March 31, 2021

 

December 31, 2020

 

Note

 

 

 

 

 

Level 1

 

Level 2

 

Level 1

 

Level 2

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

  Investment funds

5.1

 

1,509,462

 

2,154,257

 

 

1,509,462

 

 

2,154,257

  Marketable securities

5.2

 

3,735,659

 

2,271,570

 

 

3,735,659

 

 

2,271,570

  Other financial assets

5.4

 

69,381

 

848,821

 

69,381

 

 

848,821

 

  Derivate financial instruments

5.10

 

6,232,605

 

3,127,418

 

 

6,232,605

 

 

3,127,418

Total

 

 

11,547,107

 

8,402,066

 

69,381

 

11,477,726

 

848,821

 

7,553,245

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

  Loans, borrowings and debentures

5.6

 

(19,351,831)

 

(6,837,028)

 

 

(19,351,831)

 

 

(6,837,028)

  Consideration payable

 

 

(218,115)

 

(224,787)

 

 

(218,115)

 

 

(224,787)

  Derivative financial instruments

5.10

 

(340,469)

 

(417,827)

 

 

(340,469)

 

 

(417,827)

Total

 

 

(19,910,415)

 

(7,479,642)

 

 

(19,910,415)

 

 

(7,479,642)


Notes to the interim financial statements

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

 

5.12  Financial risk management

 

This note explains the Company’s exposure to financial risks and how these risks could affect the group’s future financial performance. Current period profit and loss information has been included where relevant to add further context.

Risk

Exposure arising from

Measurement

Management

Market risk – foreign exchange

(i) Future commercial transactions.

(ii) Recognized financial assets and liabilities not denominated in Brazilian reais.

(i) Cash flow forecasting

(ii) Sensitivity analysis

Foreign currency forwards.

Market risk – interest rate

Cash and cash equivalents, marketable securities, loans, borrowings and debentures, leases and derivative.

(i) Sensitivity analysis

Interest rate Swap.

Credit risk

Cash and cash equivalents, marketable securities trade receivables, derivatives, receivables from related parties and dividends.

(i) Ageing analysis

(ii) Credit ratings

Diversification of bank deposits, credit limits and letters of credit.

Liquidity risk

Loans, borrowings and debentures, trade payables, other financial liabilities, REFIS, leases, derivative, payables to related parties and dividends.

(i) Rolling cash flow forecasts

Availability of committed credit lines and borrowing facilities.

 

The Company’s risk management is predominantly controlled by a central treasury department under policies approved by the Board of Directors. The Company’s Management identifies, evaluates and hedges financial risks in close co-operation with the Company’s operating units. The Board provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

 

Where all relevant criteria are met, hedge accounting is applied to remove the accounting mismatch between the hedging instrument and the hedged item. This will effectively result in recognizing interest expense at a fixed interest rate for the hedged floating rate loans and inventory at the fixed foreign currency rate for the hedged purchases.


Notes to the interim financial statements

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

 

The Company may choose to formally designate new debt transactions involving hedging derivative financial instruments through swap between exchange variation and interest rates, as measured at fair value. The fair value option is intended to eliminate or reduce any inconsistency in measurement or recognition of certain liabilities, which would otherwise arise. Thus, both the swaps and the respective debts are measured at fair value and this option is irrevocable and should be made only upon initial recording (“inception”) of the operation.

 

The Company’s policy is to maintain 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.

 

The usage of financial instruments in order to protect against these areas of volatility is determined through an analysis of the risk exposure that management intends to cover.

 

a)    Market risk

The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

 

  1. Foreign exchange risk

 

At March 31, 2021 and December 31, 2020, the Company had the following net exposure to the exchange rate variations on assets and liabilities denominated in U.S. Dollar (U.S.$.) and Euro:

 

March 31, 2021

 

December 31, 2020

Cash and cash equivalents

1,271,634

 

143,676

Trade receivables

81,750

 

17,502

Trade payables

(97,488)

 

(174,178)

Loans, borrowings and debentures

(19,579,128)

 

(8,007,493)

Consideration payable

(218,115)

 

(224,787)

Derivative financial instruments (notional)

16,775,697

 

5,453,252

Foreign exchange exposure, net

(1,765,650)

 

(2,792,028)

 

Notes to the interim financial statements

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

 

The sensitivity of profit or loss to changes in the exchange rates arises mainly from U.S. Dollar denominated financial instruments and the impact on other components of equity arises from foreign forward exchange contracts designated as cash flow hedges though its joint ventures.

 

A reasonably possible strengthening (weakening) of the Real against the US dollars and Euro as of March 31, 2021 would have affected the measurement of foreign currency-denominated financial instruments and the affected shareholders' equity and income by the amounts indicated below:

 

 

 

 

 

 

 

Variation scenario

Instrument

 

Risk factor

 

Probable

 

25%

 

50%

 

-25%

 

-50%

Cash and cash equivalents

 

Currency fluctuation

 

(160,033)

 

766,053

 

1,647,756

 

(997,354)

 

(1,879,057)

Trade receivables

 

Currency fluctuation

 

69,593

 

52,195

 

34,797

 

86,991

 

104,389

Trade payables

 

Currency fluctuation

 

(82,988)

 

(62,241)

 

(41,494)

 

(103,735)

 

(124,482)

Derivative financial instrumen