Cosan Ltd. | CIK:0001402902 | 3

  • Filed: 4/27/2018
  • Entity registrant name: Cosan Ltd. (CIK: 0001402902)
  • Generator: Donnelley Financial Solutions
  • SEC filing page: http://www.sec.gov/Archives/edgar/data/1402902/000119312518138511/0001193125-18-138511-index.htm
  • XBRL Instance: http://www.sec.gov/Archives/edgar/data/1402902/000119312518138511/czz-20171231.xml
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  • ifrs-full:DisclosureOfCommitmentsAndContingentLiabilitiesExplanatory

    20 Commitments

     

    (a) Commitments for the acquisition of assets and regulatory targets

    With the postponement of the 2015 Five-Year Tariff Review as a result of the publication of Resolutions ARSESP 493 and 494, both of May 27, 2014, which approved the “Tariff Review Process of Gas distribution companies in the State of São Paulo, defining event schedule,” and the “provisional adjustment of marketing margins of São Paulo Gas Company – Comgás,” there is no set regulatory commitment as of December 31, 2017 and 2016.

    Regulatory assets (liabilities)

     

         December 31, 2017     December 31, 2016  

    Cost of gas to be recovered/(transferred)

         (174,090     (394,552

    Credits of taxes to be recovered/(transferred)

         (48,549     (24,061

    Adjustment to present value of taxes

         1,742       1,592  

    Other

         —         3,010  
      

     

     

       

     

     

     
         (220,897     (414,011
      

     

     

       

     

     

     

    Opening balance

         (414,011     116,947  

    Closing balance

         (220,897     (414,011
      

     

     

       

     

     

     

    Expense not recognized in the statement of income before income tax and social contribution

         193,114       (530,958
      

     

     

       

     

     

     

    Regulatory assets (liabilities)

         243,722       (480,044

    Regulatory assets (liabilities) tax

         (12,222     (12,874
      

     

     

       

     

     

     
         231,500       (492,918

    Adjustment

         (26,270     (32,163

    Adjustment to present value (AVP) with tax credits

         151       1,400  

    Extemporaneous credits

         (12,267     (7,277
      

     

     

       

     

     

     
         193,114       (530,958

    The tariffs for the supply of gas to the different customer segments are authorized by the concession authority. In accordance with the terms of the Concession Agreement, the differences between the cost component of gas included in the tariffs charged to the customers and the actual cost of gas incurred are determined on a monthly basis and charged or credited to a regulation account (regulatory account).

    Periodically, charges or credits in the tariffs are determined by the regulator with the objective of amortizing the amounts accumulated in this account.

    The balance of this account is considered as an asset or as a liability, pursuant to the regulator’s set of accounts and for income tax purposes. However, this account is not recognized under IFRS, because the respective balance is not considered as an asset or as a liability, as its realization or liquidation depends on further purchases by the Company’s consumers.

     

    (b) Commitments with supply contracts

    Considering the current gas supply contracts, the subsidiary Comgás has a total financial commitment in an estimated present value of R$ 5.3 billion, which amount includes the minimum established in contract in both commodity and transportation.

     

    (c) Commitments to rental agreements

    As of December 31, 2017, the subsidiary Comgás has nine real estate lease contracts for which expenses recognized during the year ended on that date totaled R$ 2,847 (December 31, 2016—R$ 5,201).

    The terms of the lease are from one to six years, and most leases are renewable at the end of the lease period at the market rate.

    The total future minimum lease payments under the operating leases are:

     

         December 31, 2017      December 31, 2016  

    Gross lease obligations—minimum lease payments

         

    More than one year

         3,035        2,798  

    More than one year and less than five years

         8,010        907  

    More than five years

         5,013        —    
      

     

     

        

     

     

     
         16,058        3,705