EX-1 2 exhibit01.htm

(CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) ITR – Quarterly Information – March 31, 2017 – BRF S.A. Index |

Identification |
Capital Stock Breakdown | 1
Individual Financial Statements |
Balance Sheet Assets | 2
Balance Sheet Liabilities | 3
Statement of Income | 5
Statement of Comprehensive Income | 6
Statement of Cash Flows | 7
Statement of Changes in Shareholders' Equity |
Statement of Changes in Shareholders' Equity - from 01/01/2017 to 03/31/2017 | 8
Statement of Changes in Shareholders' Equity - from 01/01/2016 to 03/31/2016 | 9
Statement of Added Value | 10
Consolidated Financial Statements |
Balance Sheet Assets | 11
Balance Sheet Liabilities | 12
Statement of Income | 14
Statement of Comprehensive Income | 15
Statement of Cash Flows | 16
Statement of Changes in Shareholders' Equity |
Statement of Changes in Shareholders' Equity - from 01/01/2017 to 03/31/2017 | 17
Statement of Changes in Shareholders' Equity - from 01/01/2016 to 03/31/2016 | 18
Statement of Added Value | 19
Management Report | 20
Explanatory Notes | 52
Breakdown of the Capital by Owner | 127
Declarations and Opinion |
Independent Auditors' Report on Review of Quartely Financial Information | 128
Opinion of the Audit Commitee | 130
Statement of Executive Board on the Quartely Financial Information and Independent Auditor's Report on Review of Interim Financial Information | 131

(CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) ITR – Quarterly Information – March 31, 2017 – BRF S.A. Identification / Capital Stock Breakdown |

Number of shares | Current Quarter
(Units) | 03.31.17
Paid-in Capital |
Common | 812,473,246
Preferred | -
Total | 812,473,246
Treasury Shares |
Common | 13,468,001
Preferred | -
Total | 13,468,001

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(CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) ITR – Quarterly Information – March 31, 2017 – BRF S.A. Individual FS /Balance Sheet Assets (in thousands of Brazilian Reais) |

Account Code | Account Description | Current Quarter 03.31.17 |  | Previous Year 12.31.16
1 | Total Assets | 39,149,981 |  | 43,286,755
1.01 | Current Assets | 16,895,415 |  | 19,063,769
1.01.01 | Cash and Cash Equivalents | 3,540,603 |  | 3,856,505
1.01.02 | Marketable Securities | 292,474 |  | 309,169
1.01.02.01 | Financial Investments Evaluated at Fair Value | 209,837 |  | 228,969
1.01.02.01.01 | Held for Trading | 209,837 |  | 228,969
1.01.02.02 | Marketable Securities Evaluated at Amortized Cost | 82,637 |  | 80,200
1.01.02.02.01 | Held to Maturity | 82,637 |  | 80,200
1.01.03 | Trade Accounts Receivable | 7,361,575 |  | 8,547,628
1.01.03.01 | Trade Accounts Receivable | 7,193,254 |  | 8,398,647
1.01.03.02 | Other Receivables | 168,321 |  | 148,981
1.01.04 | Inventories | 2,574,079 |  | 2,938,568
1.01.05 | Biological Assets | 1,406,600 |  | 1,617,747
1.01.06 | Recoverable Taxes | 945,059 |  | 1,015,610
1.01.06.01 | Current Recoverable Taxes | 945,059 |  | 1,015,610
1.01.06.01.01 | Income and social contribution tax (IR/CS) | 320,634 |  | 341,737
1.01.06.01.02 | Recoverable Taxes | 624,425 |  | 673,873
1.01.08 | Other Current Assets | 775,025 |  | 778,542
1.01.08.01 | Non-current Assets Held for Sale | 39,672 |  | 23,971
1.01.08.01.01 | Noncurrent Assets for Sale | 39,672 |  | 23,971
1.01.08.03 | Other | 735,353 |  | 754,571
1.01.08.03.01 | Interest on Shareholders' Equity Receivable | 9,421 |  | 16,868
1.01.08.03.02 | Derivatives | 199,570 |  | 197,915
1.01.08.03.04 | Accounts Receivable from Disposal of Equity Interest | 46,580 |  | 45,267
1.01.08.03.06 | Restricted Cash | 132,005 |  | 128,110
1.01.08.03.10 | Other | 347,777 |  | 366,411
1.02 | Non-current Assets | 22,254,566 |  | 24,222,986
1.02.01 | Non-current Assets | 5,224,738 |  | 5,046,633
1.02.01.01 | Financial Investments Evaluated at Fair Value | 253,760 |  | 329,876
1.02.01.01.02 | Available for Sale | 253,760 |  | 329,876
1.02.01.03 | Trade Accounts Receivable | 147,339 |  | 196,624
1.02.01.03.01 | Trade Accounts Receivable | 10,752 |  | 10,587
1.02.01.03.02 | Other Receivables | 136,587 |  | 186,037
1.02.01.05 | Biological Assets | 796,916 |  | 891,554
1.02.01.06 | Deferred Taxes | 1,076,243 |  | 740,300
1.02.01.06.01 | Deferred Income Tax and Social Contribution | 1,076,243 |  | 740,300
1.02.01.08 | Receivables from Related Parties | 95,962 |  | 97,773
1.02.01.08.04 | Receivables from Other Related Parties | 95,962 |  | 97,773
1.02.01.09 | Other Non-current Assets | 2,854,518 |  | 2,790,506
1.02.01.09.03 | Judicial Deposits | 731,618 |  | 724,767
1.02.01.09.05 | Income and social contribution tax (IR/CS) | 25,530 |  | 25,530
1.02.01.09.06 | Recoverable Taxes | 1,702,935 |  | 1,629,432
1.02.01.09.07 | Provision for losses | (164,408) |  | (159,736)
1.02.01.09.09 | Accounts Receivable from Disposal of Equity Interest | 16,748 |  | 28,897
1.02.01.09.10 | Restricted Cash | 442,500 |  | 427,557
1.02.01.09.11 | Other | 99,595 |  | 114,059
1.02.02 | Investments | 4,751,495 |  | 5,033,824
1.02.02.01 | Investments | 4,751,495 |  | 5,033,824
1.02.02.01.01 | Equity in Associates | 13,375 |  | 6,343
1.02.02.01.02 | Interest on Wholly-owned Subsidiaries | 4,737,013 |  | 5,026,374
1.02.02.01.04 | Other | 1,107 |  | 1,107
1.02.03 | Property, Plant and Equipment, Net | 9,362,767 |  | 10,690,784
1.02.03.01 | Property, Plant and Equipment in Operation | 8,637,135 |  | 9,763,961
1.02.03.02 | Property, Plant and Equipment Leased | 162,064 |  | 173,544
1.02.03.03 | Property, Plant and Equipment in Progress | 563,568 |  | 753,279
1.02.04 | Intangible | 2,915,566 |  | 3,451,745
1.02.04.01 | Intangible | 2,915,566 |  | 3,451,745
1.02.04.01.02 | Software | 134,785 |  | 143,693
1.02.04.01.03 | Trademarks | 1,173,000 |  | 1,173,000
1.02.04.01.04 | Goodwill | 1,542,929 |  | 2,096,587
1.02.04.01.05 | Software Leased | 43,842 |  | 15,209
1.02.04.01.06 | Other | 21,010 |  | 23,256

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(CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) ITR – Quarterly Information – March 31, 2017 – BRF S.A. Individual FS /Balance Sheet Liabilities (in thousands of Brazilian Reais) |

Account Code | Account Description | Current Quarter 03.31.17 |  | Previous Year 12.31.16
2 | Total Liabilities | 39,149,981 |  | 43,286,755
2.01 | Current Liabilities | 13,398,767 |  | 15,177,631
2.01.01 | Social and Labor Obligations | 190,742 |  | 203,335
2.01.01.01 | Social Obligations | 110,940 |  | 115,446
2.01.01.02 | Labor Obligations | 79,802 |  | 87,889
2.01.02 | Trade Accounts Payable | 5,152,650 |  | 6,094,303
2.01.02.01 | Domestic Suppliers | 4,410,353 |  | 5,122,041
2.01.02.01.01 | Domestic Suppliers | 3,704,001 |  | 4,114,966
2.01.02.01.02 | Supply Chain Finance | 706,352 |  | 1,007,075
2.01.02.02 | Foreign Suppliers | 742,297 |  | 972,262
2.01.02.02.01 | Foreign Suppliers | 510,820 |  | 643,755
2.01.02.02.02 | Supply Chain Finance | 231,477 |  | 328,507
2.01.03 | Tax Obligations | 192,030 |  | 204,516
2.01.03.01 | Federal Tax Obligations | 24,874 |  | 42,517
2.01.03.01.02 | Other Federal | 24,874 |  | 42,517
2.01.03.02 | State Tax Obligations | 165,023 |  | 159,215
2.01.03.03 | Municipal Tax Obligations | 2,133 |  | 2,784
2.01.04 | Short Term Debts | 2,072,221 |  | 2,566,425
2.01.04.01 | Short Term Debts | 2,072,221 |  | 2,566,425
2.01.04.01.01 | Local Currency | 1,682,562 |  | 1,987,925
2.01.04.01.02 | Foreign Currency | 389,659 |  | 578,500
2.01.05 | Other Obligations | 5,143,884 |  | 5,481,123
2.01.05.01 | Advances from related parties | 4,540,113 |  | 4,721,680
2.01.05.01.04 | Advances from related parties | 4,540,113 |  | 4,721,680
2.01.05.02 | Other | 603,771 |  | 759,443
2.01.05.02.01 | Dividends and Interest on Shareholders' Equity Payable | 2,031 |  | 2,307
2.01.05.02.04 | Derivatives | 340,221 |  | 506,712
2.01.05.02.08 | Other Obligations | 261,519 |  | 250,424
2.01.06 | Provisions | 647,240 |  | 627,929
2.01.06.01 | Tax, Social Security, Labor and Civil Risk Provisions | 286,172 |  | 271,710
2.01.06.01.01 | Tax Risk Provisions | 41,482 |  | 43,824
2.01.06.01.02 | Social Security and Labor Risk Provisions | 211,137 |  | 196,304
2.01.06.01.04 | Civil Risk Provisions | 33,553 |  | 31,582
2.01.06.02 | Other Provisons | 361,068 |  | 356,219
2.01.06.02.04 | Vacations & Christmas Bonuses Provisions | 288,729 |  | 279,512
2.01.06.02.05 | Employee Benefits Provisions | 72,339 |  | 76,707
2.02 | Non-current Liabilities | 14,208,948 |  | 16,269,146
2.02.01 | Long-term Debt | 11,270,343 |  | 13,368,668
2.02.01.01 | Long-term Debt | 11,270,343 |  | 13,368,668
2.02.01.01.01 | Local Currency | 7,144,285 |  | 6,655,730
2.02.01.01.02 | Foreign Currency | 4,126,058 |  | 6,712,938
2.02.02 | Other Obligations | 1,607,345 |  | 1,614,587
2.02.02.01 | Liabilities with Related Parties | 979,038 |  | 1,013,103
2.02.02.01.04 | Advances from Related Parties and Other Liabilities | 979,038 |  | 1,013,103
2.02.02.02 | Other | 628,307 |  | 601,484
2.02.02.02.06 | Other Obligations | 628,307 |  | 601,484
2.02.04 | Provisions | 1,331,260 |  | 1,285,891
2.02.04.01 | Tax, Social Security, Labor and Civil Risk Provisions | 1,084,288 |  | 1,032,507
2.02.04.01.01 | Tax Risk Provisions | 215,271 |  | 212,637
2.02.04.01.02 | Social Security and Labor Risk Provisions | 283,609 |  | 238,093
2.02.04.01.04 | Civil Risk Provision | 89,375 |  | 85,743
2.02.04.01.05 | Contingent Liability | 496,033 |  | 496,034
2.02.04.02 | Other Provisons | 246,972 |  | 253,384
2.02.04.02.04 | Employee Benefits Provisions | 246,972 |  | 253,384

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(CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) ITR – Quarterly Information – March 31, 2017 – BRF S.A. Individual FS /Balance Sheet Liabilities (in thousands of Brazilian Reais) |

Account Code | Account Description | Current Quarter 03.31.17 |  | Previous Year 12.31.16
2.03 | Shareholders' Equity | 11,542,266 |  | 11,839,978
2.03.01 | Paid-in Capital | 12,460,471 |  | 12,460,471
2.03.01.01 | Paid-in Capital | 12,553,418 |  | 12,553,418
2.03.01.02 | Cost of Shares Issuance | (92,947) |  | (92,947)
2.03.02 | Capital Reserves | (670,259) |  | (680,850)
2.03.02.01 | Goodwill on the Shares Issuance | 166,192 |  | 166,192
2.03.02.04 | Granted Options | 246,799 |  | 236,208
2.03.02.05 | Treasury Shares | (721,856) |  | (721,856)
2.03.02.07 | Gain on Disposal of Shares | (73,094) |  | (73,094)
2.03.02.08 | Goodwill on Acquisition of Non-Controlling Entities | (47,417) |  | (47,417)
2.03.02.09 | Acquisition of Non-Controlling Entities | (240,883) |  | (240,883)
2.03.04 | Profit Reserves | 1,350,675 |  | 1,350,675
2.03.04.01 | Legal Reserves | 540,177 |  | 540,177
2.03.04.02 | Statutory Reserves | 170,756 |  | 170,756
2.03.04.07 | Tax Incentives Reserve | 639,742 |  | 639,742
2.03.05 | Accumulated Earnings (Losses) | (281,434) |  | -
2.03.08 | Other Comprehensive Income | (1,317,187) |  | (1,290,318)
2.03.08.01 | Derivative Financial Intruments | (529,596) |  | (575,861)
2.03.08.02 | Financial Instruments (Available for Sale) | (70,315) |  | (25,998)
2.03.08.03 | Cumulative Translation Adjustments of Foreign Currency | (727,013) |  | (693,835)
2.03.08.04 | Actuarial Losses | 9,737 |  | 5,376

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(CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) ITR – Quarterly Information – March 31, 2017 – BRF S.A. Individual FS / Statement of Income (in thousands of Brazilian Reais) |

Account Code | Account Description | Accumulated Current Year 01.01.17 to 03.31.17 |  | Accumulated Previous Year 01.01.16 to 03.31.16
3.01 | Net Sales | 6,652,541 |  | 6,614,992
3.02 | Cost of Goods Sold | (5,416,212) |  | (5,161,845)
3.03 | Gross Profit | 1,236,329 |  | 1,453,147
3.04 | Operating (Expenses) Income | (1,259,451) |  | (1,308,859)
3.04.01 | Selling | (749,205) |  | (912,863)
3.04.02 | General and Administrative | (55,456) |  | (68,813)
3.04.04 | Other Operating Income | 58,631 |  | 43,900
3.04.05 | Other Operating Expenses | (226,185) |  | (77,683)
3.04.06 | Income from Associates and Joint Ventures | (287,236) |  | (293,400)
3.05 | Income Before Financial and Tax Results | (23,122) |  | 144,288
3.06 | Financial Results | (319,161) |  | (106,170)
3.06.01 | Financial Income | 377,629 |  | 999,168
3.06.02 | Financial Expenses | (696,790) |  | (1,105,338)
3.07 | Income Before Taxes | (342,283) |  | 38,118
3.08 | Income and Social Contribution | 60,849 |  | 944
3.08.01 | Current | (34,243) |  | (92,462)
3.08.02 | Deferred | 95,092 |  | 93,406
3.09 | Net Income from Continued Operations | (281,434) |  | 39,062
3.11 | Net Income | (281,434) |  | 39,062
3.99 | Earnings per Share - (Brazilian Reais/Share) |  |  |
3.99.01 | Earnings per Share - Basic |  |  |
3.99.01.01 | ON | (0.35223) |  | 0.04841
3.99.02 | Earning per Share - Diluted |  |  |
3.99.02.01 | ON | (0.35223) |  | 0.04841

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(CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) ITR – Quarterly Information – March 31, 2017 – BRF S.A. Individual FS / Statement of Comprehensive Income (in thousands of Brazilian Reais) |

Account Code | Account Description | Accumulated Current Year 01.01.17 to 03.31.17 |  | Accumulated Previous Year 01.01.16 to 03.31.16
4.01 | Net Income | (281,434) |  | 39,062
4.02 | Other Comprehensive Income | (26,869) |  | 206,546
4.02.01 | Gains (Losses) in Foreign Currency Translation Adjustments | (33,178) |  | (294,706)
4.02.02 | Unrealized Gains (Losses) in Available for Sale Marketable Securities | (63,588) |  | (48,883)
4.02.03 | Taxes on Unrealized Gains (Losses) on Investments on Available for Sale Marketable Securities | 19,271 |  | 18,996
4.02.04 | Unrealized Gains (Losses) on Cash Flow Hedge | 77,619 |  | 798,534
4.02.05 | Taxes on Unrealized Gains (Losses) on Cash Flow Hedge | (31,354) |  | (271,164)
4.02.06 | Actuarial Gains (Losses) on Pension and Post-employment Plans | 6,609 |  | 5,710
4.02.07 | Taxes on Realized Gains (Losses) on Pension Post-employment Plans | (2,248) |  | (1,941)
4.03 | Comprehensive Income | (308,303) |  | 245,608

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(CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) ITR – Quarterly Information – March 31, 2017 – BRF S.A. Individual FS / Statement of Cash Flow (in thousands of Brazilian Reais) |

Account Code | Account Description | Accumulated Current Year 01.01.17 to 03.31.17 |  | Accumulated Previous Year 01.01.16 to 03.31.16
6.01 | Net Cash Provided by Operating Activities | 251,976 |  | (299,784)
6.01.01 | Cash from Operations | 355,922 |  | (247,014)
6.01.01.01 | Net Income (Loss) for the Period | (281,434) |  | 39,062
6.01.01.03 | Depreciation and Amortization | 174,081 |  | 171,154
6.01.01.04 | Depreciation and Depletion of Biological Assets | 151,510 |  | 150,651
6.01.01.05 | Results on Disposals of Property, Plant and Equipments | (6,999) |  | 5,874
6.01.01.08 | Deferred Income Tax | (95,092) |  | (93,406)
6.01.01.09 | Provision for Tax, Civil and Labor Risks | 97,203 |  | 53,387
6.01.01.10 | Interest and Exchange Rate Variations | 16,409 |  | (854,106)
6.01.01.11 | Equity Pick-Up | 287,236 |  | 293,400
6.01.01.17 | Others | 13,008 |  | (13,030)
6.01.02 | Changes in Operating Assets and Liabilities | (103,946) |  | (52,770)
6.01.02.01 | Trade Accounts Receivable | 1,126,400 |  | 168,182
6.01.02.02 | Inventories | 97,101 |  | (87,265)
6.01.02.03 | Trade Accounts Payable | (536,846) |  | 164,008
6.01.02.04 | Supply Chain Finance | (397,753) |  | (369,318)
6.01.02.05 | Payment of Tax, Civil and Labor Risks Provisions | (59,999) |  | (49,082)
6.01.02.06 | Others Operatins Assets and Liabilities | (63,571) |  | (23,395)
6.01.02.07 | Investment in Held for Trading Securities | - |  | (198,662)
6.01.02.08 | Redemption of Held for Trading Securities | 25,115 |  | -
6.01.02.11 | Fair value for for Assets and Liabilities | (39,301) |  | 579,836
6.01.02.12 | Payment of Interest | (374,875) |  | (65,054)
6.01.02.14 | Interest on Shareholders' Equity Received | 7,447 |  | (11,618)
6.01.02.15 | Biological assets - Current | 50,034 |  | (160,402)
6.01.02.16 | Interest received | 62,302 |  | -
6.02 | Net Cash Provided by Investing Activities | (687,689) |  | (634,001)
6.02.04 | Redemptions of Available for Sale | 15,011 |  | -
6.02.05 | Redemptions of Restricted Cash (Investments) | - |  | (19,413)
6.02.06 | Additions to Property, Plant and Equipment | (233,736) |  | (458,642)
6.02.07 | Receivable from Disposals of Property, Plant and Equipment | 33,127 |  | 33,470
6.02.08 | Capital increase in subsidiaries | - |  | -
6.02.09 | Additions to Intangible | (39,554) |  | (23,251)
6.02.10 | Additions to Biological Assets - Non-current | (151,412) |  | (165,849)
6.02.11 | Investments in Associates and Joint Venturies | (305) |  | (316)
6.02.13 | Net Cash Transferred to Subsidiaries | (309,615) |  | -
6.02.17 | Advance for Future Capital Increase | (1,205) |  | -
6.03 | Net Cash Provided by Financing Activities | 119,923 |  | 1,994,641
6.03.01 | Proceeds from Debt Issuance | 715,584 |  | 3,049,211
6.03.02 | Payment of Debt | (595,661) |  | (212,740)
6.03.03 | Interest on Shareholders' Equity and Dividends Paid | - |  | (663,051)
6.03.06 | Treasury Shares Acquisition | - |  | (178,779)
6.04 | Exchange Rate Variation on Cash and Cash Equivalents | (112) |  | (536)
6.05 | Increase (Decrease) in Cash and Cash Equivalents | (315,902) |  | 1,060,320
6.05.01 | At the Beginning of the Period | 3,856,505 |  | 845,085
6.05.02 | At the End of the Period | 3,540,603 |  | 1,905,405

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(CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) ITR – Quarterly Information – March 31, 2017 – BRF S.A. Individual FS / Statement of Changes in Shareholders’ Equity for the Period from 01/01/2017 to 03/31/2017 (in thousands of Brazilian Reais) |

Account Code | Account Description | Capital Stock |  | Capital Reserves, Granted Options and Treasury Shares |  | Profit Reserves |  | Retained Earnings |  | Other Comprehensive Income |  | Shareholders' Equity |
5.01 | Balance at January 1, 2017 | 12,460,471 |  | (680,850) |  | 1,350,675 |  | - |  | (1,290,318) |  | 11,839,978 |
5.03 | Opening Balance Adjusted | 12,460,471 |  | (680,850) |  | 1,350,675 |  | - |  | (1,290,318) |  | 11,839,978 |
5.04 | Share-based Payments | - |  | 10,591 |  | - |  | - |  | - |  | 10,591 |
5.04.03 | Options Granted | - |  | 10,591 |  | - |  | - |  | - |  | 10,591 |
5.04.13 | Participation of Non-Controlling Shareholders' | - |  | - |  | - |  | - |  | - |  | - |
5.05 | Total Comprehensive Income | - |  | - |  | - |  | (281,434) |  | (26,869) |  | (308,303) |
5.05.01 | Net Income for the Period | - |  | - |  | - |  | (281,434) |  | - |  | (281,434) |
5.05.02 | Other Comprehensive Income | - |  | - |  | - |  | - |  | (26,869) |  | (26,869) |
5.05.02.01 | Financial Instruments Adjustments | - |  | - |  | - |  | - |  | 77,619 |  | 77,619 |
5.05.02.02 | Tax on Financial Instruments Adjustments | - |  | - |  | - |  | - |  | (31,354) |  | (31,354) |
5.05.02.06 | Unrealized Loss in Available for Sale Marketable Securities | - |  | - |  | - |  | - |  | (63,588) |  | (63,588) |
5.05.02.07 | Tax on Unrealized Loss in Available for Sale Marketable Securities | - |  | - |  | - |  | - |  | 19,271 |  | 19,271 |
5.05.02.08 | Actuarial Gains on Pension and Post-employment Plans | - |  | - |  | - |  | - |  | 4,361 |  | 4,361 |
5.05.02.09 | Cumulative Translation Adjustments of Foreign Currency | - |  | - |  | - |  | - |  | (33,178) |  | (33,178) |
5.07 | Balance at March 31, 2017 | 12,460,471 |  | (670,259) |  | 1,350,675 |  | (281,434) |  | (1,317,187) |  | 11,542,266 |

8

(CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) ITR – Quarterly Information – March 31, 2017 – BRF S.A. Individual FS / Statement of Changes in Shareholders’ Equity for the Period from 01/01/2016 to 03/31/2016 (in thousands of Brazilian Reais) |

Account Code | Account Description | Capital Stock |  | Capital Reserves, Granted Options and Treasury Shares |  | Profit Reserves |  | Retained Earnings |  | Other Comprehensive Income |  | Shareholders' Equity |
5.01 | Balance at January 1, 2016 | 12,460,471 |  | (3,940,955) |  | 6,076,775 |  | - |  | (1,079,514) |  | 13,516,777 |
5.03 | Opening Balance Adjusted | 12,460,471 |  | (3,940,955) |  | 6,076,775 |  | - |  | (1,079,514) |  | 13,516,777 |
5.04 | Share-based Payments | - |  | 3,576,690 |  | (3,859,592) |  | - |  | - |  | (282,902) |
5.04.03 | Options Granted | - |  | 19,706 |  | - |  | - |  | - |  | 19,706 |
5.04.04 | Treasury Shares Acquired | - |  | (178,779) |  | - |  | - |  | - |  | (178,779) |
5.04.06 | Dividends | - |  | - |  | (98,210) |  | - |  | - |  | (98,210) |
5.04.09 | Treasury Shares Canceled | - |  | 3,761,382 |  | (3,761,382) |  | - |  | - |  | - |
5.04.10 | Valuation of shares | - |  | (7,822) |  | - |  | - |  | - |  | (7,822) |
5.04.11 | Options Canceled | - |  | (17,797) |  | - |  | - |  | - |  | (17,797) |
5.04.13 | Participation of Non-Controlling Shareholders' | - |  | - |  | - |  | - |  | - |  | - |
5.05 | Total Comprehensive Income | - |  | - |  | - |  | 39,062 |  | 206,546 |  | 245,608 |
5.05.01 | Net Income for the Period | - |  | - |  | - |  | 39,062 |  | - |  | 39,062 |
5.05.02 | Other Comprehensive Income | - |  | - |  | - |  | - |  | 206,546 |  | 206,546 |
5.05.02.01 | Financial Instruments Adjustments | - |  | - |  | - |  | - |  | 798,534 |  | 798,534 |
5.05.02.02 | Tax on Financial Instruments Adjustments | - |  | - |  | - |  | - |  | (271,164) |  | (271,164) |
5.05.02.06 | Unrealized Gain in Available for Sale Marketable Securities | - |  | - |  | - |  | - |  | (48,883) |  | (48,883) |
5.05.02.07 | Tax on Unrealized Gain in Available for Sale Marketable Securities | - |  | - |  | - |  | - |  | 18,996 |  | 18,996 |
5.05.02.08 | Actuarial gains on pension and post-employment plans | - |  | - |  | - |  | - |  | 3,769 |  | 3,769 |
5.05.02.09 | Cumulative Translation Adjustments of Foreign Currency | - |  | - |  | - |  | - |  | (294,706) |  | (294,706) |
5.06 | Statements of Changes in Shareholders' Equity | - |  | - |  | 24,216 |  | (24,216) |  | - |  | - |
5.06.08 | Tax Incentives Reserve | - |  | - |  | 24,216 |  | (24,216) |  | - |  | - |
5.07 | Balance at March 31, 2016 | 12,460,471 |  | (364,265) |  | 2,241,399 |  | 14,846 |  | (872,968) |  | 13,479,483 |

9

(CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) ITR – Quarterly Information – March 31, 2017 – BRF S.A. Individual FS / Statement of Value Added (in thousands of Brazilian Reais) |

Account Code | Account Description | Accumulated Current Year 01.01.17 to 03.31.17 |  | Accumulated Previous Year 01.01.16 to 03.31.16
7.01 | Revenues | 7,451,749 |  | 7,560,957
7.01.01 | Sales of Goods, Products and Services | 7,414,947 |  | 7,255,547
7.01.02 | Other Income | (153,564) |  | (29,337)
7.01.03 | Revenue Related to Construction of Own Assets | 184,425 |  | 314,835
7.01.04 | (Provision) Reversal for Doubtful Accounts Reversal | 5,941 |  | 19,912
7.02 | Raw Material Acquired from Third Parties | (5,072,386) |  | (5,066,748)
7.02.01 | Costs of Products and Goods Sold | (4,400,224) |  | (4,080,922)
7.02.02 | Materials, Energy, Third Parties Services and Other | (664,813) |  | (991,446)
7.02.03 | Recovery (Loss) of Assets Values | (7,349) |  | 5,620
7.03 | Gross Added Value | 2,379,363 |  | 2,494,209
7.04 | Retentions | (325,591) |  | (321,805)
7.04.01 | Depreciation, Amortization and Exhaustion | (325,591) |  | (321,805)
7.05 | Net Added Value | 2,053,772 |  | 2,172,404
7.06 | Received from Third Parties | 90,555 |  | 706,049
7.06.01 | Equity Pick-Up | (287,236) |  | (293,400)
7.06.02 | Financial Income | 377,629 |  | 999,168
7.06.03 | Other | 162 |  | 281
7.07 | Added Value to be Distributed | 2,144,327 |  | 2,878,453
7.08 | Distribution of Added Value | 2,144,327 |  | 2,878,453
7.08.01 | Payroll | 881,321 |  | 955,953
7.08.01.01 | Salaries | 686,198 |  | 721,696
7.08.01.02 | Benefits | 146,971 |  | 181,731
7.08.01.03 | Government Severance Indemnity Fund for Employees Guarantee Fund for Length of Service - FGTS | 48,152 |  | 52,526
7.08.02 | Taxes, Fees and Contributions | 790,905 |  | 718,776
7.08.02.01 | Federal | 324,427 |  | 354,299
7.08.02.02 | State | 458,472 |  | 357,144
7.08.02.03 | Municipal | 8,006 |  | 7,333
7.08.03 | Capital Remuneration from Third Parties | 753,535 |  | 1,164,662
7.08.03.01 | Interests | 707,795 |  | 1,113,967
7.08.03.02 | Rents | 45,740 |  | 50,695
7.08.04 | Interest on Own Capital | (281,434) |  | 39,062
7.08.04.02 | Dividends | - |  | 98,210
7.08.04.03 | Retained Earnings | (281,434) |  | (59,148)

10

(CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) ITR – Quarterly Information – March 31, 2017 – BRF S.A. Consolidated FS / Balance Sheet Assets (in thousands of Brazilian Reais) |

Account Code | Account Description | Current Quarter 03.31.17 |  | Previous Year 12.31.16
1 | Total Assets | 43,370,714 |  | 42,944,936
1.01 | Current Assets | 18,937,579 |  | 18,893,738
1.01.01 | Cash and Cash Equivalents | 6,307,017 |  | 6,356,919
1.01.02 | Marketable Securities | 526,227 |  | 622,285
1.01.02.01 | Financial Investments Evaluated at Fair Value | 417,678 |  | 515,045
1.01.02.01.01 | Held for Trading | 274,444 |  | 271,245
1.01.02.01.02 | Available for Sale | 143,234 |  | 243,800
1.01.02.02 | Marketable Securities Evaluated at Amortized Cost | 108,549 |  | 107,240
1.01.02.02.01 | Held to Maturity | 108,549 |  | 107,240
1.01.03 | Trade Accounts Receivable | 3,315,509 |  | 3,234,129
1.01.03.01 | Trade Accounts Receivable | 3,147,180 |  | 3,085,147
1.01.03.02 | Other Receivables | 168,329 |  | 148,982
1.01.04 | Inventories | 4,919,178 |  | 4,791,640
1.01.05 | Biological Assets | 1,540,889 |  | 1,644,939
1.01.06 | Recoverable Taxes | 1,256,417 |  | 1,234,795
1.01.06.01 | Current Recoverable Taxes | 1,256,417 |  | 1,234,795
1.01.06.01.01 | Income and social contribution tax (IR/CS) | 378,113 |  | 388,683
1.01.06.01.02 | Recoverable Taxes | 882,467 |  | 850,287
1.01.06.01.03 | Provision for losses | (4,163) |  | (4,175)
1.01.08 | Other Current Assets | 1,072,342 |  | 1,009,031
1.01.08.01 | Non-current Assets Held for Sale | 41,822 |  | -
1.01.08.01.01 | Non-current Assets for Sale | 41,822 |  | -
1.01.08.02 | Assets of Discontinued Operations | - |  | 26,126
1.01.08.02.01 | Assets of Discontinued Operations and Held for Sale | - |  | 26,126
1.01.08.03 | Other | 1,030,520 |  | 982,905
1.01.08.03.01 | Interest on Shareholders' Equity Receivable | - |  | 7,448
1.01.08.03.02 | Derivatives | 199,931 |  | 198,015
1.01.08.03.04 | Accounts Receivable from Disposal of Equity Interest | 46,580 |  | 45,267
1.01.08.03.06 | Restricted Cash | 214,573 |  | 218,251
1.01.08.03.10 | Other | 569,436 |  | 513,924
1.02 | Non-current Assets | 24,433,135 |  | 24,051,198
1.02.01 | Non-current Assets | 6,005,041 |  | 5,573,723
1.02.01.01 | Financial Investments Evaluated at Fair Value | 313,272 |  | 379,475
1.02.01.01.02 | Available for Sale | 313,272 |  | 379,475
1.02.01.02 | Marketable Securities Evaluated at Amortized Cost | 144,126 |  | 148,253
1.02.01.02.01 | Held to Maturity | 144,126 |  | 148,253
1.02.01.03 | Trade Accounts Receivable | 147,977 |  | 197,225
1.02.01.03.01 | Trade Accounts Receivable | 10,759 |  | 10,701
1.02.01.03.02 | Other Receivables | 137,218 |  | 186,524
1.02.01.05 | Biological Assets | 929,925 |  | 917,345
1.02.01.06 | Deferred Taxes | 1,547,170 |  | 1,103,146
1.02.01.06.01 | Deferred Income Tax and Social Contribution | 1,547,170 |  | 1,103,146
1.02.01.08 | Receivables from related parties | 1,003 |  | -
1.02.01.08.04 | Receivables from related parties | 1,003 |  | -
1.02.01.09 | Other Non-current Assets | 2,921,568 |  | 2,828,279
1.02.01.09.03 | Judicial Deposits | 740,304 |  | 732,571
1.02.01.09.05 | Income and social contribution tax (IR/CS) | 40,477 |  | 45,061
1.02.01.09.06 | Recoverable Taxes | 1,736,487 |  | 1,633,957
1.02.01.09.07 | Provision for losses | (167,620) |  | (160,436)
1.02.01.09.09 | Accounts Receivable from Disposal of Equity Interest | 16,748 |  | 28,897
1.02.01.09.10 | Restricted Cash | 442,500 |  | 427,557
1.02.01.09.11 | Other | 112,672 |  | 120,672
1.02.02 | Investments | 67,012 |  | 58,683
1.02.02.01 | Investments | 67,012 |  | 58,683
1.02.02.01.01 | Equity in Associates | 65,655 |  | 57,325
1.02.02.01.04 | Other | 1,357 |  | 1,358
1.02.03 | Property, Plant and Equipment, Net | 11,766,725 |  | 11,746,238
1.02.03.01 | Property, Plant and Equipment in Operation | 10,951,156 |  | 10,680,586
1.02.03.02 | Property, Plant and Equipment Leased | 170,860 |  | 179,648
1.02.03.03 | Property, Plant and Equipment in Progress | 644,709 |  | 886,004
1.02.04 | Intangible | 6,594,357 |  | 6,672,554
1.02.04.01 | Intangible | 6,594,357 |  | 6,672,554
1.02.04.01.02 | Software | 159,042 |  | 164,033
1.02.04.01.03 | Trademarks | 1,312,106 |  | 1,313,194
1.02.04.01.04 | Goodwill | 4,287,204 |  | 4,343,550
1.02.04.01.05 | Software Leased | 43,842 |  | 15,209
1.02.04.01.06 | Other | 792,163 |  | 836,568

11

(CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) ITR – Quarterly Information – March 31, 2017 – BRF S.A. Consolidated FS / Balance Sheet Liabilities (in thousands of Brazilian Reais) |

Account Code | Account Description | Current Quarter 03.31.17 |  | Previous Year 12.31.16
2 | Total Liabilities | 43,370,714 |  | 42,944,936
2.01 | Current Liabilities | 12,333,388 |  | 12,640,423
2.01.01 | Social and Labor Obligations | 303,752 |  | 296,766
2.01.01.01 | Social Obligations | 159,896 |  | 146,648
2.01.01.02 | Labor Obligations | 143,856 |  | 150,118
2.01.02 | Trade Accounts Payable | 6,523,070 |  | 7,175,420
2.01.02.01 | Domestic Suppliers | 4,672,834 |  | 5,122,256
2.01.02.01.01 | Domestic Suppliers | 3,897,291 |  | 4,115,181
2.01.02.01.02 | Supply Chain Finance | 775,543 |  | 1,007,075
2.01.02.02 | Foreign Suppliers | 1,850,236 |  | 2,053,164
2.01.02.02.01 | Foreign Suppliers | 1,616,039 |  | 1,724,657
2.01.02.02.02 | Supply Chain Finance | 234,197 |  | 328,507
2.01.03 | Tax Obligations | 327,750 |  | 319,620
2.01.03.01 | Federal Tax Obligations | 117,874 |  | 118,032
2.01.03.01.01 | Income Tax and Social Contribution Payable | 76,772 |  | 64,149
2.01.03.01.02 | Other Federal | 41,102 |  | 53,883
2.01.03.02 | State Tax Obligations | 207,231 |  | 198,675
2.01.03.03 | Municipal Tax Obligations | 2,645 |  | 2,913
2.01.04 | Short Term Debts | 3,603,143 |  | 3,245,004
2.01.04.01 | Short Term Debts | 3,603,143 |  | 3,245,004
2.01.04.01.01 | Local Currency | 1,848,320 |  | 1,987,925
2.01.04.01.02 | Foreign Currency | 1,754,823 |  | 1,257,079
2.01.05 | Other Obligations | 848,255 |  | 936,715
2.01.05.02 | Other | 848,255 |  | 936,715
2.01.05.02.01 | Dividends and Interest on Shareholders' Equity Payable | 3,215 |  | 2,307
2.01.05.02.04 | Derivatives | 376,320 |  | 529,571
2.01.05.02.05 | Management and Employees Profit Sharing | 2,241 |  | 5,108
2.01.05.02.08 | Other Obligations | 466,479 |  | 399,729
2.01.06 | Provisions | 727,418 |  | 666,898
2.01.06.01 | Tax, Social Security, Labor and Civil Risk Provisions | 286,172 |  | 276,202
2.01.06.01.01 | Tax Risk Provisions | 41,482 |  | 44,064
2.01.06.01.02 | Social Security and Labor Risk Provisions | 211,137 |  | 200,556
2.01.06.01.04 | Civil Risk Provisions | 33,553 |  | 31,582
2.01.06.02 | Other Provisons | 441,246 |  | 390,696
2.01.06.02.04 | Vacations and Christmas Bonuses Provisions | 364,539 |  | 313,989
2.01.06.02.05 | Employee Benefits Provisions | 76,707 |  | 76,707
2.02 | Non-current Liabilities | 19,114,189 |  | 18,085,160
2.02.01 | Long-term Debt | 16,411,291 |  | 15,717,376
2.02.01.01 | Long-term Debt | 16,411,291 |  | 15,717,376
2.02.01.01.01 | Local Currency | 7,144,285 |  | 6,655,730
2.02.01.01.02 | Foreign Currency | 9,267,006 |  | 9,061,646
2.02.02 | Other Obligations | 854,639 |  | 850,552
2.02.02.02 | Other | 854,639 |  | 850,552
2.02.02.02.06 | Other Obligations | 854,639 |  | 850,552
2.02.03 | Deferred Taxes | 416,886 |  | 156,179
2.02.03.01 | Deferred Income Tax and Social Contribution | 416,886 |  | 156,179
2.02.04 | Provisions | 1,431,373 |  | 1,361,053
2.02.04.01 | Tax, Social Security, Labor and Civil Risk Provisions | 1,167,338 |  | 1,107,669
2.02.04.01.01 | Tax Risk Provisions | 240,409 |  | 237,651
2.02.04.01.02 | Social Security and Labor Risk Provisions | 337,892 |  | 279,186
2.02.04.01.04 | Civil Risk Provision | 92,719 |  | 90,922
2.02.04.01.05 | Contingent Liabilities | 496,318 |  | 499,910
2.02.04.02 | Other Provisons | 264,035 |  | 253,384
2.02.04.02.04 | Employee Benefits Provisions | 264,035 |  | 253,384

12

(CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) ITR – Quarterly Information – March 31, 2017 – BRF S.A. Consolidated FS / Balance Sheet Liabilities (in thousands of Brazilian Reais) |

Account Code | Account Description | Current Quarter 03.31.17 |  | Previous Year 12.31.16
2.03 | Shareholders' Equity | 11,923,137 |  | 12,219,353
2.03.01 | Paid-in Capital | 12,460,471 |  | 12,460,471
2.03.01.01 | Paid-in Capital | 12,553,418 |  | 12,553,418
2.03.01.02 | Cost of Shares Issuance | (92,947) |  | (92,947)
2.03.02 | Capital Reserves | (670,259) |  | (680,850)
2.03.02.01 | Goodwill on the Shares Issuance | 166,192 |  | 166,192
2.03.02.04 | Granted Options | 246,799 |  | 236,208
2.03.02.05 | Treasury Shares | (721,856) |  | (721,856)
2.03.02.07 | Gain on Disposal of Shares | (73,094) |  | (73,094)
2.03.02.08 | Goodwill on Acquisition of Non-Controlling Shareholders | (47,417) |  | (47,417)
2.03.02.09 | Acquisition of Non-Controlling Shareholders | (240,883) |  | (240,883)
2.03.04 | Profit Reserves | 1,350,675 |  | 1,350,675
2.03.04.01 | Legal Reserves | 540,177 |  | 540,177
2.03.04.02 | Statutory Reserves | 170,756 |  | 170,756
2.03.04.07 | Tax Incentives Reserve | 639,742 |  | 639,742
2.03.05 | Accumulated Earnings / Loss | (281,434) |  | -
2.03.08 | Other Comprehensive Income | (1,317,187) |  | (1,290,318)
2.03.08.01 | Derivative Financial Instruments | (529,596) |  | (575,861)
2.03.08.02 | Financial Instrument (Available for Sale) | (70,315) |  | (25,998)
2.03.08.03 | Cumulative Translation Adjustments of Foreign Currency | (727,013) |  | (693,835)
2.03.08.04 | Actuarial Losses | 9,737 |  | 5,376
2.03.09 | Non-controlling Interest | 380,871 |  | 379,375

13

(CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) ITR – Quarterly Information – March 31, 2017 – BRF S.A. Consolidated FS / Statement of Income (in thousands of Brazilian Reais) |

Account Code | Account Description | Accumulated Current Year 01.01.17 to 03.31.17 |  | Accumulated Previous Year 01.01.16 to 03.31.16
3.01 | Net Sales | 7,809,449 |  | 8,120,330
3.02 | Cost of Goods Sold | (6,359,940) |  | (6,089,605)
3.03 | Gross Profit | 1,449,509 |  | 2,030,725
3.04 | Operating (Expenses) Income | (1,381,308) |  | (1,375,697)
3.04.01 | Selling | (1,082,776) |  | (1,207,620)
3.04.02 | General and Administrative | (129,151) |  | (133,795)
3.04.04 | Other Operating Income | 64,469 |  | 46,551
3.04.05 | Other Operating Expenses | (241,383) |  | (92,974)
3.04.06 | Income from Associates and Joint Ventures | 7,533 |  | 12,141
3.05 | Income Before Financial and Tax Results | 68,201 |  | 655,028
3.06 | Financial Results | (412,545) |  | (604,290)
3.06.01 | Financial Income | 525,569 |  | 953,071
3.06.02 | Financial Expenses | (938,114) |  | (1,557,361)
3.07 | Income Before Taxes | (344,344) |  | 50,738
3.08 | Income and Social Contribution | 58,610 |  | (9,315)
3.08.01 | Current | (88,290) |  | (109,477)
3.08.02 | Deferred | 146,900 |  | 100,162
3.09 | Net Income from Continued Operations | (285,734) |  | 41,423
3.11 | Net Income | (285,734) |  | 41,423
3.11.01 | Attributable to: Controlling Shareholders | (281,434) |  | 39,062
3.11.02 | Attributable to: Non-controlling Interest | (4,300) |  | 2,361
3.99 | Earnings per share - (Brazilian Reais/Share) |  |  |
3.99.01 | Earnings per Share - Basic |  |  |
3.99.01.01 | ON | (0.35761) |  | 0.05134
3.99.02 | Earning per Share - Diluted |  |  |
3.99.02.01 | ON | (0.35761) |  | 0.05133

14

(CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) ITR – Quarterly Information – March 31, 2017 – BRF S.A. Consolidated FS / Statement of Comprehensive Income (in thousands of Brazilian Reais) |

Account Code | Account Description | Accumulated Current Year 01.01.17 to 03.31.17 |  | Accumulated Previous Year 01.01.16 to 03.31.16
4.01 | Net Income | (285,734) |  | 41,423
4.02 | Other Comprehensive Income | (26,869) |  | 206,546
4.02.01 | Gains (Losses) in Foreign Currency Translation Adjustments | (33,178) |  | (294,706)
4.02.02 | Unrealized Gains (Losses) in Available for Sale Marketable Securities | (63,588) |  | (48,883)
4.02.03 | Taxes on Unrealized Gains (Losses) on Investments on Available for Sale Marketable Securities | 19,271 |  | 18,996
4.02.04 | Unrealized Gains (Losses) on Cash Flow Hedge | 77,619 |  | 798,534
4.02.05 | Taxes on Unrealized Gains (Losses) on Cash Flow Hedge | (31,354) |  | (271,164)
4.02.06 | Actuarial Gains (Losses) on Pension and Post-employment Plans | 6,609 |  | 5,710
4.02.07 | Taxes on Realized Gains (Losses) on Pension Post-employment Plans | (2,248) |  | (1,941)
4.03 | Comprehensive Income | (312,603) |  | 247,969
4.03.01 | Attributable to: BRF Shareholders | (308,303) |  | 245,608
4.03.02 | Attributable to: Non-Controlling Shareholders | (4,300) |  | 2,361

15

(CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) ITR – Quarterly Information – March 31, 2017 – BRF S.A. Consolidated FS / Statement of Cash Flow (in thousands of Brazilian Reais) |

Account Code | Account Description | Accumulated Current Year 01.01.17 to 03.31.17 |  | Accumulated Previous Year 01.01.16 to 03.31.16
6.01 | Net Cash Provided by Operating Activities | (1,043,467) |  | (110,648)
6.01.01 | Cash from Operations | 96,516 |  | 77,834
6.01.01.01 | Net Income for the Period | (281,434) |  | 39,062
6.01.01.02 | Non-controlling Interest | (4,300) |  | 2,361
6.01.01.03 | Depreciation and Amortization | 250,356 |  | 216,722
6.01.01.04 | Depreciation and Depletion of Biological Assets | 187,148 |  | 155,679
6.01.01.05 | Results on Disposals of Property, Plant and Equipments | (4,327) |  | 5,461
6.01.01.08 | Deferred Income Tax | (146,900) |  | (100,162)
6.01.01.09 | Provision for Tax, Civil and Labor Risks | 101,171 |  | 53,003
6.01.01.10 | Interest and Exchange Rate Variations | (19,164) |  | (260,599)
6.01.01.11 | Equity Pick-Up | (7,533) |  | (12,141)
6.01.01.17 | Others | 21,499 |  | (21,552)
6.01.02 | Changes in Operating Assets and Liabilities | (1,139,983) |  | (188,482)
6.01.02.01 | Trade Accounts Receivable | (52,057) |  | 962,445
6.01.02.02 | Inventories | (124,856) |  | (211,138)
6.01.02.03 | Trade Accounts Payable | (338,138) |  | (29,191)
6.01.02.04 | Supply Chain Finance | (325,842) |  | (369,318)
6.01.02.05 | Payment of Tax, Civil and Labor Risks Provisions | (60,793) |  | (49,082)
6.01.02.06 | Others Operatins Assets and Liabilities | 83,261 |  | (647,640)
6.01.02.07 | Investment in Held for Trading Securities | (73,034) |  | (452,703)
6.01.02.08 | Redemption of Held for Trading Securities | 76,508 |  | 293,966
6.01.02.11 | Fair value for for Assets and Liabilities | (41,665) |  | 573,686
6.01.02.12 | Payment of Interest | (434,644) |  | (82,429)
6.01.02.13 | Payment of Income Tax and Social Contribution | (32,868) |  | (1,138)
6.01.02.14 | Interest on Shareholders' Equity Received | 7,447 |  | (11,618)
6.01.02.15 | Biological Assets - Current | 104,172 |  | (164,153)
6.01.02.16 | Interest Received | 72,526 |  | (169)
6.02 | Net Cash Provided by Investing Activities | (393,485) |  | (1,415,174)
6.02.04 | Redemptions of Available for Sale Securities | 104,612 |  | -
6.02.05 | Redemptions of Restricted Cash (Investments) | - |  | 1,326,861
6.02.06 | Additions to Property, Plant and Equipment | (281,603) |  | (458,642)
6.02.07 | Receivable from Disposals of Property, Plant and Equipment | 33,127 |  | 46,860
6.02.09 | Additions to Intangible | (39,625) |  | (23,710)
6.02.10 | Additions to Biological Assets - Non-current | (183,321) |  | (172,079)
6.02.11 | Investments in Associates and Joint Venturies | (305) |  | (316)
6.02.12 | Business Combination, net of cash | (26,370) |  | (2,134,148)
6.03 | Net Cash Provided by Financing Activities | 1,396,112 |  | 2,024,003
6.03.01 | Proceeds from Debt Issuance | 2,425,000 |  | 3,119,003
6.03.02 | Payment of Debt | (1,028,888) |  | (253,170)
6.03.03 | Interest on Shareholders' Equity and Dividends Paid | - |  | (663,051)
6.03.06 | Treasury Shares Acquisition | - |  | (178,779)
6.04 | Exchange Rate Variation on Cash and Cash Equivalents | (9,062) |  | (221,821)
6.05 | Decrease (Increase) in Cash and Cash Equivalents | (49,902) |  | 276,360
6.05.01 | At the Beginning of the Period | 6,356,919 |  | 5,362,890
6.05.02 | At the End of the Period | 6,307,017 |  | 5,639,250

16

(CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) ITR – Quarterly Information – March 31, 2017 – BRF S.A. Consolidated FS / Statement of Changes in Shareholders’ Equity for the Period from 01/01/2017 to 03/31/2017 (in thousands of Brazilian Reais) |

Account Code | Account Description | Capital Stock |  | Capital Reserves, Granted Options and Treasury Shares |  | Profit Reserves |  | Retained Earnings |  | Other Comprehensive Income |  | Shareholders' Equity |  | Participation of Non-Controlling Shareholders |  | Total Shareholders' Equity
5.01 | Balance at January 1, 2017 | 12,460,471 |  | (680,850) |  | 1,350,675 |  | - |  | (1,290,318) |  | 11,839,978 |  | 379,375 |  | 12,219,353
5.03 | Opening Balance Adjusted | 12,460,471 |  | (680,850) |  | 1,350,675 |  | - |  | (1,290,318) |  | 11,839,978 |  | 379,375 |  | 12,219,353
5.04 | Share-based Payments | - |  | 10,591 |  | - |  | - |  | - |  | 10,591 |  | 5,796 |  | 16,387
5.04.03 | Options Granted | - |  | 10,591 |  | - |  | - |  | - |  | 10,591 |  | - |  | 10,591
5.04.13 | Participation of Non-Controlling Shareholders' | - |  | - |  | - |  | - |  | - |  | - |  | 5,796 |  | 5,796
5.05 | Total Comprehensive Income | - |  | - |  | - |  | (281,434) |  | (26,869) |  | (308,303) |  | (4,300) |  | (312,603)
5.05.01 | Net Income for the Period | - |  | - |  | - |  | (281,434) |  | - |  | (281,434) |  | (4,300) |  | (285,734)
5.05.02 | Other Comprehensive Income | - |  | - |  | - |  | - |  | (26,869) |  | (26,869) |  | - |  | (26,869)
5.05.02.01 | Financial Instruments Adjustments | - |  | - |  | - |  | - |  | 77,619 |  | 77,619 |  | - |  | 77,619
5.05.02.02 | Tax on Financial Instruments Adjustments | - |  | - |  | - |  | - |  | (31,354) |  | (31,354) |  | - |  | (31,354)
5.05.02.06 | Unrealized Loss in Available for Sale Marketable Securities | - |  | - |  | - |  | - |  | (63,588) |  | (63,588) |  | - |  | (63,588)
5.05.02.07 | Tax on Unrealized Loss in Available for Sale Marketable Securities | - |  | - |  | - |  | - |  | 19,271 |  | 19,271 |  | - |  | 19,271
5.05.02.08 | Actuarial Gains on Pension and Post-employment Plans | - |  | - |  | - |  | - |  | 4,361 |  | 4,361 |  | - |  | 4,361
5.05.02.09 | Cumulative Translation Adjustments of Foreign Currency | - |  | - |  | - |  | - |  | (33,178) |  | (33,178) |  | - |  | (33,178)
5.07 | Balance at March 31, 2017 | 12,460,471 |  | (670,259) |  | 1,350,675 |  | (281,434) |  | (1,317,187) |  | 11,542,266 |  | 380,871 |  | 11,923,137

17

(CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) ITR – Quarterly Information – March 31, 2017 – BRF S.A. Consolidated FS / Statement of Changes in Shareholders’ Equity for the Period from 01/01/2016 to 03/31/2016 (in thousands of Brazilian Reais) |

Account Code | Account Description | Capital Stock |  | Capital Reserves, Granted Options and Treasury Shares |  | Profit Reserves |  | Retained Earnings |  | Other Comprehensive Income |  | Shareholders' Equity |  | Participation of Non-Controlling Shareholders |  | Total Shareholders' Equity
5.01 | Balance at January 1, 2016 | 12,460,471 |  | (3,940,955) |  | 6,076,775 |  | - |  | (1,079,514) |  | 13,516,777 |  | 319,076 |  | 13,835,853
5.03 | Opening Balance Adjusted | 12,460,471 |  | (3,940,955) |  | 6,076,775 |  | - |  | (1,079,514) |  | 13,516,777 |  | 319,076 |  | 13,835,853
5.04 | Share-based Payments | - |  | 3,576,690 |  | (3,859,592) |  | - |  | - |  | (282,902) |  | 43,449 |  | (239,453)
5.04.03 | Options Granted | - |  | 19,706 |  | - |  | - |  | - |  | 19,706 |  | - |  | 19,706
5.04.04 | Treasury Shares Acquired | - |  | (178,779) |  | - |  | - |  | - |  | (178,779) |  | - |  | (178,779)
5.04.06 | Dividends | - |  | - |  | (98,210) |  | - |  | - |  | (98,210) |  | - |  | (98,210)
5.04.09 | Treasury Shares Canceled | - |  | 3,761,382 |  | (3,761,382) |  | - |  | - |  | - |  | - |  | -
5.04.10 | Valuation of shares | - |  | (7,822) |  | - |  | - |  | - |  | (7,822) |  | - |  | (7,822)
5.04.11 | Options Canceled | - |  | (17,797) |  | - |  | - |  | - |  | (17,797) |  | - |  | (17,797)
5.04.13 | Participation of Non-Controlling Shareholders' | - |  | - |  | - |  | - |  | - |  | - |  | 43,449 |  | 43,449
5.05 | Total Comprehensive Income | - |  | - |  | - |  | 39,062 |  | 206,546 |  | 245,608 |  | 2,361 |  | 247,969
5.05.01 | Net Income for the Period | - |  | - |  | - |  | 39,062 |  | - |  | 39,062 |  | 2,361 |  | 41,423
5.05.02 | Other Comprehensive Income | - |  | - |  | - |  | - |  | 206,546 |  | 206,546 |  | - |  | 206,546
5.05.02.01 | Financial Instruments Adjustments | - |  | - |  | - |  | - |  | 798,534 |  | 798,534 |  | - |  | 798,534
5.05.02.02 | Tax on Financial Instruments Adjustments | - |  | - |  | - |  | - |  | (271,164) |  | (271,164) |  | - |  | (271,164)
5.05.02.06 | Unrealized Gain in Available for Sale Marketable Securities | - |  | - |  | - |  | - |  | (48,883) |  | (48,883) |  | - |  | (48,883)
5.05.02.07 | Tax on Unrealized Gain in Available for Sale Marketable Securities | - |  | - |  | - |  | - |  | 18,996 |  | 18,996 |  | - |  | 18,996
5.05.02.08 | Actuarial gains on pension and post-employment plans | - |  | - |  | - |  | - |  | 3,769 |  | 3,769 |  | - |  | 3,769
5.05.02.09 | Cumulative Translation Adjustments of Foreign Currency | - |  | - |  | - |  | - |  | (294,706) |  | (294,706) |  | - |  | (294,706)
5.06 | Statements of Changes in Shareholders' Equity | - |  | - |  | 24,216 |  | (24,216) |  | - |  | - |  | - |  | -
5.06.08 | Tax Incentives Reserve | - |  | - |  | 24,216 |  | (24,216) |  | - |  | - |  | - |  | -
5.07 | Balance at March 31, 2016 | 12,460,471 |  | (364,265) |  | 2,241,399 |  | 14,846 |  | (872,968) |  | 13,479,483 |  | 364,886 |  | 13,844,369

18

(CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) ITR – Quarterly Information – March 31, 2017 – BRF S.A. Consolidated FS / Statement of Value Added (in thousands of Brazilian Reais) |

Account Code | Account Description | Accumulated Current Year 01.01.17 to 03.31.17 |  | Accumulated Previous Year 01.01.16 to 03.31.16
7.01 | Revenues | 8,750,487 |  | 9,233,883
7.01.01 | Sales of Goods, Products and Services | 8,677,958 |  | 8,867,778
7.01.02 | Other Income | (159,186) |  | (39,733)
7.01.03 | Revenue Related to Construction of Own Assets | 225,886 |  | 386,569
7.01.04 | (Provision) Reversal for Doubtful Accounts Reversal | 5,829 |  | 19,269
7.02 | Raw Material Acquired from Third Parties | (5,954,291) |  | (6,136,926)
7.02.01 | Costs of Products and Goods Sold | (5,014,778) |  | (4,882,322)
7.02.02 | Materials, Energy, Third Parties Services and Other | (926,876) |  | (1,248,369)
7.02.03 | Recovery of Assets Values | (12,637) |  | (6,235)
7.03 | Gross Added Value | 2,796,196 |  | 3,096,957
7.04 | Retentions | (437,504) |  | (372,401)
7.04.01 | Depreciation, Amortization and Exhaustion | (437,504) |  | (372,401)
7.05 | Net Added Value | 2,358,692 |  | 2,724,556
7.06 | Received from Third Parties | 533,795 |  | 965,683
7.06.01 | Equity Pick-Up | 7,533 |  | 12,141
7.06.02 | Financial Income | 525,569 |  | 953,071
7.06.03 | Other | 693 |  | 471
7.07 | Added Value to be Distributed | 2,892,487 |  | 3,690,239
7.08 | Distribution of Added Value | 2,892,487 |  | 3,690,239
7.08.01 | Payroll | 1,210,443 |  | 1,137,529
7.08.01.01 | Salaries | 938,543 |  | 874,891
7.08.01.02 | Benefits | 214,921 |  | 207,477
7.08.01.03 | Government Severance Indemnity Fund for Employees Guarantee Fund for Length of Service - FGTS | 56,979 |  | 55,161
7.08.02 | Taxes, Fees and Contributions | 936,504 |  | 860,010
7.08.02.01 | Federal | 479,636 |  | 481,744
7.08.02.02 | State | 445,151 |  | 366,870
7.08.02.03 | Municipal | 11,717 |  | 11,396
7.08.03 | Capital Remuneration from Third Parties | 1,031,274 |  | 1,651,277
7.08.03.01 | Interests | 949,934 |  | 1,565,990
7.08.03.02 | Rents | 81,340 |  | 85,287
7.08.04 | Interest on Own Capital | (285,734) |  | 41,423
7.08.04.02 | Dividends | - |  | 98,210
7.08.04.03 | Retained Earnings | (281,434) |  | (59,148)
7.08.04.04 | Non-Controlling Interest | (4,300) |  | 2,361

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(CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) ITR – Quarterly Information – March 31, 2017 – BRF S.A. Explanatory Notes (in thousands of Brazilian Reais) |

1. COMPANY’S OPERATIONS

BRF S.A. (“BRF”) and its consolidated subsidiaries (collectively the “Company”) is a multinational Brazilian Company, which owns a comprehensive and diverse portfolio of products and it is one of the world’s largest producers of foods. With a focus on raising, producing and slaughtering of poultry and pork for processing, production and sale of fresh meat, processed products, pasta, sauce, mayonnaise, frozen vegetables and soybean by-products, among which the following are highlighted:

· Whole chickens and frozen cuts of chicken, turkey and pork;

· Ham products, bologna, sausages, frankfurters and other smoked products;

· Hamburgers, breaded meat products and meatballs;

· Lasagnas, pizzas, cheese breads, pies and frozen vegetables;

· Margarine, sauces and mayonnaise; and

· Soy meal and refined soy flour, as well as animal feed.

BRF is a public company, listed on the New Market of Brazilian Securities, Commodities and Future Exchange (“BM&FBOVESPA”), under the ticker BRFS3, and listed on the New York Stock Exchange (“NYSE”), under the ticker BRFS. Its headquarters are located at 475, Rua Jorge Tzachel in the City of Itajaí, State of Santa Catarina.

Our portfolio strategy is focused on creating new, convenient, practical and healthy products for our consumers based on their needs. We seek to achieve that goal through strong innovation to provide us with increasing value-added items that will differentiate us from our competitors and strengthen our brands.

The Company's business model is by means of a vertical and integrated production system, which are distributed through an extensive distribution network, reaching the 5 continents, to meet the supermarkets, retail stores, wholesalers, restaurants and other institutional customers. In addition, our facilities are strategically located near to their raw material suppliers or its main consumption centers.

The Company has as main brands Sadia, Perdigão, Qualy, Chester®, Perdix and Paty that are highly recognized, especially in Brazil, Argentina and the Middle East.

In 2017, the Company´s activities are organizes into 7 operating segments, due to the importance and growth potential of Africa region, which now has the same autonomy and organizational structure of other regions. Thus, the segments are as follows: Brazil, Latin America (“LATAM”), Europe, Middle East and North of Africa (“One Foods” previously denominated "MENA"), Asia, Africa and Other Segments (note 5). The One Foods also began to incorporate the operations of Malaysia and some countries in the African continent and Eastern Europe.

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(CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) ITR – Quarterly Information – March 31, 2017 – BRF S.A. Explanatory Notes (in thousands of Brazilian Reais) |

1.1. Equity interest

|  |  |  |  |  |  |  |  |  |  | % equity interest
Entity |  |  | Main activity |  | Country |  | Participation |  | Accounting method |  | 03.31.17 |  | 12.31.16
BRF Energia S.A. |  |  | Commercialization of eletric energy |  | Brazil |  | Direct |  | Consolidated |  | 100.00% |  | 100.00%
BRF GmbH |  |  | Holding |  | Austria |  | Direct |  | Consolidated |  | 100.00% |  | 100.00%
BRF Foods LLC | (h) |  | Import and commercialization of products |  | Russia |  | Indirect |  | Consolidated |  | 99.90% |  | 90.00%
BRF France SARL |  |  | Marketing and logistics services |  | France |  | Indirect |  | Consolidated |  | 100.00% |  | 100.00%
BRF Global Company Nigeria Ltd. |  |  | Marketing and logistics services |  | Nigeria |  | Indirect |  | Consolidated |  | 99.00% |  | 99.00%
BRF Global Company South Africa Proprietary Ltd. |  |  | Import and commercialization of products |  | South Africa |  | Indirect |  | Consolidated |  | 100.00% |  | 100.00%
BRF Global Company Nigeria Ltd. |  |  | Marketing and logistics services |  | Nigeria |  | Indirect |  | Consolidated |  | 1.00% |  | 1.00%
BRF Global GmbH | (b) |  | Holding and trading |  | Austria |  | Indirect |  | Consolidated |  | 100.00% |  | 100.00%
BRF Foods LLC | (h) |  | Import and commercialization of products |  | Russia |  | Indirect |  | Consolidated |  | 0.10% |  | -
Qualy 5201 B.V. | (b) |  | Import, commercialization of products and holding |  | The Netherlands |  | Indirect |  | Consolidated |  | 100.00% |  | 100.00%
Xamol Consultores Serviços Ltda. |  |  | Import and commercialization of products |  | Portugal |  | Indirect |  | Consolidated |  | 100.00% |  | 100.00%
BRF Japan KK |  |  | Marketing and logistics services |  | Japan |  | Indirect |  | Consolidated |  | 100.00% |  | 100.00%
BRF Korea LLC |  |  | Marketing and logistics services |  | Korea |  | Indirect |  | Consolidated |  | 100.00% |  | 100.00%
BRF Malaysia Sdn Bhd |  |  | Marketing and logistics services |  | Malaysia |  | Indireta |  | Consolidated |  | 100.00% |  | 100.00%
BRF Shanghai Management Consulting Co. Ltd. |  |  | Advisory and related services |  | China |  | Indirect |  | Consolidated |  | 100.00% |  | 100.00%
BRF Shanghai Trading Co. Ltd. |  |  | Commercialization and distribution of products |  | China |  | Indirect |  | Consolidated |  | 100.00% |  | 100.00%
BRF Singapore PTE Ltd. |  |  | Marketing and logistics services |  | Singapore |  | Indirect |  | Consolidated |  | 100.00% |  | 100.00%
BRF Germany GmbH |  |  | Import and commercialization of products |  | Germany |  | Indirect |  | Consolidated |  | 100.00% |  | 100.00%
BRF Holland B.V. |  |  | Import and commercialization of products |  | The Netherlands |  | Indirect |  | Consolidated |  | 100.00% |  | 100.00%
Campo Austral S.A. |  |  | Industrialization and commercialization of products |  | Argentina |  | Indirect |  | Consolidated |  | 2.63% |  | 2.63%
Eclipse Holding Cöoperatief U.A. |  |  | Holding |  | The Netherlands |  | Indirect |  | Consolidated |  | 0.01% |  | 0.01%
BRF B.V. |  |  | Industrialization, import and commercialization of products |  | The Netherlands |  | Indirect |  | Consolidated |  | 100.00% |  | 100.00%
ProudFood Lda | (i) |  | Import and commercialization of products |  | Angola |  | Indirect |  | Consolidated |  | 10.00% |  | -
BRF Hungary LLC |  |  | Import and commercialization of products |  | Hungary |  | Indirect |  | Consolidated |  | 100.00% |  | 100.00%
BRF Iberia Alimentos SL |  |  | Import and commercialization of products |  | Spain |  | Indirect |  | Consolidated |  | 100.00% |  | 100.00%
BRF Invicta Ltd. |  |  | Import, commercialization and distribution of products |  | England |  | Indirect |  | Consolidated |  | 62.00% |  | 62.00%
Invicta Food Products Ltd. |  |  | Import and commercialization of products |  | England |  | Indirect |  | Consolidated |  | 100.00% |  | 100.00%
BRF Wrexham Ltd. |  |  | Industrialization, import and commercialization of products |  | England |  | Indirect |  | Consolidated |  | 100.00% |  | 100.00%
Invicta Food Group Ltd. | (b) |  | Import, commercialization and distribution of products |  | England |  | Indirect |  | Consolidated |  | 100.00% |  | 100.00%
Invicta Foods Ltd. |  |  | Import, commercialization and distribution of products |  | England |  | Indirect |  | Consolidated |  | 100.00% |  | 100.00%
Invicta Foodservice Ltd. |  |  | Import, commercialization and distribution of products |  | England |  | Indirect |  | Consolidated |  | 100.00% |  | 100.00%
Universal Meats (UK) Ltd. | (b) |  | Import, Industrialization, commercialization and distribution of products |  | England |  | Indirect |  | Consolidated |  | 100.00% |  | 100.00%
BRF Italia SPA |  |  | Import and commercialization of products |  | Italy |  | Indirect |  | Consolidated |  | 67.00% |  | 67.00%
Compañía Paraguaya Comercial S.A. |  |  | Import and commercialization of products |  | Paraguay |  | Indirect |  | Consolidated |  | 99.00% |  | 99.00%
Campo Austral S.A. |  |  | Industrialization and commercialization of products |  | Argentina |  | Indirect |  | Consolidated |  | 50.06% |  | 50.06%
Itega S.A. |  |  | Holding |  | Argentina |  | Indirect |  | Consolidated |  | 96.00% |  | 96.00%
Eclipse Holding Cöoperatief U.A. |  |  | Holding |  | The Netherlands |  | Indirect |  | Consolidated |  | 99.99% |  | 99.99%
Buenos Aires Fortune S.A. |  |  | Holding |  | Argentina |  | Indirect |  | Consolidated |  | 5.00% |  | 5.00%
Campo Austral S.A. |  |  | Industrialization and commercialization of products |  | Argentina |  | Indirect |  | Consolidated |  | 10.61% |  | 10.61%
Eclipse Latam Holdings |  |  | Holding |  | Spain |  | Indirect |  | Consolidated |  | 100.00% |  | 100.00%
Buenos Aires Fortune S.A. |  |  | Holding |  | Argentina |  | Indirect |  | Consolidated |  | 95.00% |  | 95.00%
Campo Austral S.A. |  |  | Industrialization and commercialization of products |  | Argentina |  | Indirect |  | Consolidated |  | 6.34% |  | 6.34%
Campo Austral S.A. |  |  | Industrialization and commercialization of products |  | Argentina |  | Indirect |  | Consolidated |  | 30.36% |  | 30.36%
Itega S.A. |  |  | Holding |  | Argentina |  | Indirect |  | Consolidated |  | 4.00% |  | 4.00%
Golden Foods Poultry Limited |  |  | Holding |  | Thailand |  | Indirect |  | Consolidated |  | 48.52% |  | 48.52%
Golden Poultry Siam Limited |  |  | Holding |  | Thailand |  | Indirect |  | Consolidated |  | 51.84% |  | 51.84%
Golden Poultry Siam Limited |  |  | Holding |  | Thailand |  | Indirect |  | Consolidated |  | 48.16% |  | 48.16%
BRF Thailand Limited |  |  | Import, Industrialization, commercialization and distribution of products |  | Thailand |  | Indirect |  | Consolidated |  | 100.00% |  | 100.00%
BRF Feed Thailand Limited |  |  | Import, Industrialization, commercialization and distribution of products |  | Thailand |  | Indirect |  | Consolidated |  | 100.00% |  | 100.00%
Golden Foods Sales (Europe) Limited |  |  | Holding and trading |  | England |  | Indirect |  | Consolidated |  | 100.00% |  | 100.00%
Golden Quality Foods Europe BV |  |  | Import, commercialization and distribution of products |  | Thailand |  | Indirect |  | Consolidated |  | 100.00% |  | 100.00%
Golden Quality Foods Netherlands BV |  |  | Import, commercialization and distribution of products |  | Thailand |  | Indirect |  | Consolidated |  | 100.00% |  | 100.00%
Golden Foods Siam Europe Limited | (b) |  | Import, commercialization and distribution of products |  | England |  | Indirect |  | Consolidated |  | 100.00% |  | 100.00%
Perdigão Europe Lda. |  |  | Import and export of products |  | Portugal |  | Indirect |  | Consolidated |  | 100.00% |  | 100.00%
Perdigão International Ltd. |  |  | Import and export of products |  | Cayman Island |  | Indirect |  | Consolidated |  | 100.00% |  | 100.00%
BFF International Ltd. |  |  | Financial fundraising |  | Cayman Island |  | Indirect |  | Consolidated |  | 100.00% |  | 100.00%
Highline International | (a) |  | Financial fundraising |  | Cayman Island |  | Indirect |  | Consolidated |  | 100.00% |  | 100.00%
ProudFood Lda | (i) |  | Import and commercialization of products |  | Angola |  | Indirect |  | Consolidated |  | 90.00% |  | -
Sadia Chile S.A. |  |  | Import and commercialization of products |  | Chile |  | Indirect |  | Consolidated |  | 40.00% |  | 40.00%
Sadia Foods GmbH |  |  | Import and commercialization of products |  | Germany |  | Indirect |  | Consolidated |  | 100.00% |  | 100.00%
SATS BRF Food PTE Ltd. |  |  | Import, industrialization, commercialization and distribution of products |  | Singapore |  | Joint venture |  | Equity pick-up |  | 49.00% |  | 49.00%
BRF Global Namíbia |  |  | Import and commercialization of products |  | Namibia |  | Indirect |  | Consolidated |  | 100.00% |  | 100.00%
Wellax Food Logistics C.P.A.S.U. Lda. |  |  | Import and commercialization of products |  | Portugal |  | Indirect |  | Consolidated |  | 100.00% |  | 100.00%
BRF Luxembourg Sarl | (f) |  | Holding |  | Luxemburgo |  | Direct |  | Consolidated |  | 100.00% |  | 100.00%
BRF Austria GmbH | (f) |  | Holding |  | Austria |  | Indirect |  | Consolidated |  | 100.00% |  | 100.00%
One Foods Holdings Ltd | (d)(f) |  | Holding |  | United Arab Emirates |  | Indirect |  | Consolidated |  | 100.00% |  | -
Al-Wafi Food Products Factory LLC | (e)(f) |  | Industrialization and commercialization of products |  | United Arab Emirates |  | Indirect |  | Consolidated |  | 49.00% |  | -
Badi Ltd. | (e)(f) |  | Holding |  | United Arab Emirates |  | Indirect |  | Consolidated |  | 100.00% |  | -
BRF Al Yasra Food K.S.C.C. ("BRF AFC") | (e)(f) |  | Import, commercialization and distribution of products |  | Kuwait |  | Indirect |  | Consolidated |  | 49.00% |  | -
Al-Wafi Al-Takamol International for Foods Products | (e)(f) |  | Import and commercialization of products |  | Saudi Arabia |  | Indirect |  | Consolidated |  | 75.00% |  | -
BRF Foods GmbH | (e)(f) |  | Industrialization, import and commercialization of products |  | Austria |  | Indirect |  | Consolidated |  | 100.00% |  | -
Al Khan Foodstuff LLC ("AKF") | (c(e) |  | Import, commercialization and distribution of products |  | Oman |  | Indirect |  | Consolidated |  | 70.00% |  | -
FFM Further Processing Sdn. Bhd. | (e)(f) |  | Industrialization, import and commercialization of products |  | Malaysia |  | Indirect |  | Consolidated |  | 70.00% |  | 70.00%
SHB Comércio e Indústria de Alimentos S.A. | (e)(f) |  | Industrialization and commercialization of products |  | Brazil |  | Direct |  | Consolidated |  | 99.99% |  | -
TBQ Foods GmbH |  |  | Commercialization of products |  | Austria |  | Indirect |  | Consolidated |  | 100.00% |  | -
Federal Foods LLC | (e)(f) |  | Import, commercialization and distribution of products |  | United Arab Emirates |  | Indirect |  | Consolidated |  | 49.00% |  | -
Federal Foods Omã | (a) (e) (f) |  | Import, commercialization and distribution of products |  | Oman |  | Indirect |  | Consolidated |  | 49.00% |  | 49.00%
Federal Foods Qatar | (e)(f) |  | Import, commercialization and distribution of products |  | Qatar |  | Indirect |  | Consolidated |  | 49.00% |  | 49.00%
SHB Comércio e Indústria de Alimentos S.A. | (e)(f) |  | Industrialization and commercialization of products |  | Brazil |  | Direct |  | Consolidated |  | 0.01% |  | -
BRF Hong Kong LLC | (g) |  | Import, commercialization and distribution of products |  | Hong Kong |  | Indirect |  | Consolidated |  | 100.00% |  | -
Establecimiento Levino Zaccardi y Cia. S.A. | (a) |  | Industrialization and commercialization of dairy products |  | Argentina |  | Direct |  | Consolidated |  | 99.94% |  | 99.94%
K&S Alimentos S.A. |  |  | Industrialization and commercialization of products |  | Brazil |  | Direct |  | Consolidated |  | 100.00% |  | 100.00%
PP-BIO Administração de bem próprio S.A. |  |  | Management of assets |  | Brazil |  | Affiliate |  | Equity pick-up |  | 33.33% |  | 33.33%
PSA Laboratório Veterinário Ltda. |  |  | Veterinary activities |  | Brazil |  | Direct |  | Consolidated |  | 99.99% |  | 99.99%
Sino dos Alpes Alimentos Ltda. | (a) |  | Industrialization and commercialization of products |  | Brazil |  | Indirect |  | Consolidated |  | 99.99% |  | 99.99%
PR-SAD Administração de bem próprio S.A. |  |  | Management of assets |  | Brazil |  | Affiliate |  | Equity pick-up |  | 33.33% |  | 33.33%
Quickfood S.A. |  |  | Industrialization and commercialization of products |  | Argentina |  | Direct |  | Consolidated |  | 91.21% |  | 91.21%
Sadia Alimentos S.A. |  |  | Holding |  | Argentina |  | Direct |  | Consolidated |  | 43.10% |  | 43.10%
Avex S.A. |  |  | Industrialization and commercialization of products |  | Argentina |  | Indirect |  | Consolidated |  | 33.98% |  | 33.98%
Sadia International Ltd. |  |  | Import and commercialization of products |  | Cayman Island |  | Direct |  | Consolidated |  | 100.00% |  | 100.00%
Sadia Chile S.A. |  |  | Import and commercialization of products |  | Chile |  | Indirect |  | Consolidated |  | 60.00% |  | 60.00%
Sadia Uruguay S.A. |  |  | Import and commercialization of products |  | Uruguay |  | Indirect |  | Consolidated |  | 5.10% |  | 5.10%
Avex S.A. |  |  | Industrialization and commercialization of products |  | Argentina |  | Indirect |  | Consolidated |  | 66.02% |  | 66.02%
Compañía Paraguaya Comercial S.A. |  |  | Import and commercialization of products |  | Paraguay |  | Indirect |  | Consolidated |  | 1.00% |  | 1.00%
Sadia Alimentos S.A. |  |  | Holding |  | Argentina |  | Indirect |  | Consolidated |  | 56.90% |  | 56.90%
Sadia Overseas Ltd. |  |  | Financial fundraising |  | Cayman Island |  | Direct |  | Consolidated |  | 100.00% |  | 100.00%
Sadia Uruguay S.A. |  |  | Import and commercialization of products |  | Uruguay |  | Direct |  | Consolidated |  | 94.90% |  | 94.90%
UP Alimentos Ltda. |  |  | Industrialization and commercialization of products |  | Brazil |  | Affiliate |  | Equity pick-up |  | 50.00% |  | 50.00%
Vip S.A. Empreendimentos e Participações Imobiliárias |  |  | Commercialization of owned real state |  | Brazil |  | Direct |  | Consolidated |  | 100.00% |  | 100.00%
Establecimiento Levino Zaccardi y Cia. S.A. | (a) |  | Industrialization and commercialization of dairy products |  | Argentina |  | Indirect |  | Consolidated |  | 0.06% |  | 0.06%
PSA Laboratório Veterinário Ltda. |  |  | Veterinary activities |  | Brazil |  | Indirect |  | Consolidated |  | 0.01% |  | 0.01%
Sino dos Alpes Alimentos Ltda. | (a) |  | Industrialization and commercialization of products |  | Brazil |  | Indirect |  | Consolidated |  | 0.01% |  | 0.01%

(a) Dormant subsidiaries.

(b) The wholly-owned subsidiary BRF Global GmbH, operates as a trading in the European market and owns 101 direct subsidiaries in Madeira Island, Portugal, with an investment as of March 31, 2017 of R$3,144 (R$3,301 as of December 31, 2016) and a direct subsidiary in Den Bosch, The Netherlands, denominated Qualy 20 with an investment as of March 31, 2017 of R$6,566 (R$6,638 as of December 31, 2016). The wholly-owned subsidiary Qualy 5201 B.V. owns 212 subsidiaries in The Netherlands being the amount of this investment as of March 31, 2017 of R$19,962 (R$18,234 as of December 31, 2016). The indirect subsidiary Invicta Food Group Ltd. owns 120 direct subsidiaries in Ashford, England, with an investment of R$114,737 as of December 31, 2017 (R$112,471 as of December 31, 2016). The indirect subsidiary Universal Meats (UK) Ltd owns 99 direct subsidiaries in Ashford, England with an investment of R$38,957 as of March 31, 2017 (R$37,486 as of December 31, 2016). The indirect subsidiary Golden Foods Siam Europe Ltd owns 32 subsidiaries in Ashford, England with an investment of R$(89) as of March 31, 2017 (R$114,068 as of December 31, 2016). The purpose of these two subsidiaries is to operate in the European market to increase the Company’s market share, which is regulated by a system of poultry and turkey meat import quotas.

(c) On January 02, 2017, disposal of subsidiary to BRF Foods GmbH.

(d) On January 11, 2017, establishment of One Foods Holdings Ltd with 100% of equity interest.

(e) On January 12, 2017, acquisition of equity interest of the subsidiaries by One Foods Holdings Ltd. On December 31, 2016, such equity interests were held by wholly-owned subsidiary BRF GmbH.

(f) On January 13, 2017, capital increases in chain, with investment in SHB. On December 31, 2016, SHB’s equity interest was held by BRF S.A. (99.00%) and by PSA Laboratório Veterinário Ltda. (1,00%).

(g) On January 13, 2017, establishment of BRF Hong Kong LLC with 100% of equity interest.

(h) On February 02, 2017, acquisition of equity interest by BRF GmbH and BRF Global GmbH. On December 31, 2016, such equity interest was held by wholly-owned subsidiary Sadia Foods GmbH.

(i) On March 31, 2017, establishment of ProudFood Lda with 100% of equity interest, 90% held by the subsidiary BRF GmbH and 10% held by the subsidiary BRF Holland B.V.

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1.2. Business combination with Qatar Investment Authority ("QIA")

On January 9th 2017, BRF has entered into a share purchase agreement with the controlling shareholders of Banvit Bandirma Vitaminli Yem Sanayii A.Ş. (“Banvit” and “Shareholders”), for the acquisition of 79.5% of the shares issued by Banvit (“Shares”), the largest poultry producer in Turkey.

BRF Foods GmbH, a wholly-owned subsidiary of One Foods Holdings Ltd. (“One Foods”), on March 7, 2017 has established a new entity TBQ Foods GmbH (“TBQ”), which shall acquire Banvit Shares. Prior to the completion of the transaction, the Qatar Investment Authority (“QIA”), the sovereign wealth fund of the State of Qatar, shall acquire participation in TBQ so that One Foods and QIA will hold, respectively, 60% and 40% of participation in the new company. Following the conclusion of the Transaction, TBQ will launch a mandatory tender offer to acquire the remaining 20.5% of the Shares from the minority shareholders, on the same terms and conditions offered to the Shareholders.

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The completion of the Transaction is subject to the satisfaction of the conditions precedent set forth in the definitive documents, including anti-trust approvals.

1.3. Corporate reorganization One Foods Holdings Ltd. (“One Foods”)

On January 11, 2017, BRF established a new subsidiary, One Foods, based in Dubai, which will focus on predominantly Muslim markets.

The constitution of this subsidiary involved a restructuring that included: i) sale and purchase agreement on which One Foods acquired from BRF GmbH, BRF wholly-owned subsidiary, certain equity interest in entities that serve the Halal Business (for further details refer to note 1.1); and ii) contribution of the equity interest in SHB Indústria e Comércio de Alimentos to One Foods. SHB holds grain storage facilities, feed mills, outgrowers (outsourced farmers) agreements, hatcheries and 8 slaughtering and processing plants in Brazil.

On the date of transfer, the equity interest of SHB to One Foods Group, the transferred net assets were constituted as presented below:

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| 03.31.17
ASSETS |
CURRENT ASSETS |
Cash and cash equivalents | 309,615
Inventories | 275,960
Biological assets | 161,113
NON-CURRENT ASSETS |
Biological assets | 104,700
Property, plant and equipment, net | 1,335,491
Intangible | 557,759
Other current assets | 51,022
TOTAL ASSETS | 2,795,659
LIABILITIES |
CURRENT LIABILITIES |
Payroll and related charges | 37,774
Trade accounts payable | 23,521
Short-term debt | 79,721
Pension and other post-employment plans | 4,367
NON-CURRENT LIABILITIES |
Short-term debt | 2,408,976
Deferred income and social contribution taxes | 182,952
Pension and other post-employment plans | 16,322
TOTAL LIABILITIES | 2,753,633
TRANSFERRED NET ASSETS | 42,025

In addition BRF entered into certain agreements with One Foods that provide for the licensing of certain brands, operational and corporate activities cost sharing and supply of raw materials and finished goods.

On March 31, 2017, the total assets and shareholders' equity consolidated of One Foods were, respectively, R$7,935,784 and R$172,393.

1.4. Weak Flesh Operation (“Operation”)

The Brazilian authorities are investigating Brazil’s meat processing industry in the so-called “Weak Flesh Operation,” which became public on March 17, 2017. The investigation involves a number of companies in the industry in Brazil.

On March 17, 2017, BRF learned of a decision issued by a federal judge of the 14th Federal Court of Curitiba - Paraná, authorizing the search and seizure of information and documents, and the detention of certain individuals in the context of this Weak Flesh Operation. Two BRF employees were detained (one of which has been released) and three were identified for questioning (of which two were questioned, including José Roberto P. Rodrigues, Vice President – Corporate Integrity of BRF).

In addition to the above, the Mineiros plant was temporarily suspended by the Ministry of Agriculture, Livestock and Food Supply (“MAPA”) on March 17, 2017, so that MAPA could conduct an additional audit on its production process of such plant. After conducting an audit, the MAPA authorized the Mineiros plant to resume operations as of April 8, 2017. The Mineiros plant reopened on April 10, 2017 and resumed its operations on April 11, 2017.

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On April 15, 2017, the Brazilian Federal Police issued a report on the investigation and recommended charges against three BRF employees. On April 20, 2017, based on the Brazilian Federal Police investigation, Brazilian federal prosecutors filed charges against two BRF employees (one BRF regional manufacturing officer and one BRF corporate affairs manager). On April 24, 2017, the federal judge of the 14th Federal Court of Curitiba - Paraná, accepted the charges filed.

Based on the charges filed against such two employees, the main allegations at this stage involve alleged misconduct relating to improper offers and/or promises to government inspectors.

BRF maintain informed certain regulators and governmental entities, including the U.S. Securities and Exchange Commission and U.S. Department of Justice in relation to this matter. BRF is cooperating with these inquiries.

BRF's Statutory Audit Committee has already initiated an investigation with respect to the allegations involving BRF employees in the Weak Flesh Operation and it will involve outside counsel in connection with this investigation, if necessary.

As a result of this transaction, the Company may present losses that are not possible to be estimated at this moment and therefore, no provision has been recorded, except for expenses incurred and disclosed in note 32.

1.5. Seasonality

In Brazil and LATAM operating segments, in months of November and December of each year, the Company is impacted by seasonality due Christmas and New Years Celebrations, being the best-selling products in this period: turkey, Chester®, ham and pork loins.

In One Foods operating segment, seasonality is due to Ramadan, which is the holy month of the Muslim Calendar. The start of Ramadan depends on the beginning of the moon cycle and therefore can vary each year.

2. MANAGEMENT’S STATEMENT AND BASIS OF PREPARATION AND PRESENTATION OF FINANCIAL STATEMENTS

The Company’s individual and consolidated financial statements are prepared in accordance with the International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”) and interpretations issued by the International Financial Reporting Interpretations Committee (“IFRIC”), introduced in Brazil through Brazilian Accounting Pronouncements Committee (“CPC”) and its technical interpretations (“ICPC”) and guidelines (“OCPC”), approved by the Brazilian Securities Exchange Commission (“CVM”).

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The Company’s individual and consolidated financial statements are expressed in thousands of Brazilian Reais (“R$”), as well as the amounts of other currencies disclosed in the financial statements, when applicable, were also expressed in thousands. Amounts disclosed in Brazilian Reais are informed when applicable.

The preparation of the Company’s financial statements requires Management to make judgments, use estimates and adopt assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, as well as the disclosures of contingent liabilities, as of the reporting date. However, the uncertainty inherent to these judgments, assumptions and estimates could result in material adjustments to the carrying amount of the affected assets and liabilities in future periods.

The Company reviews its judgments, estimates and assumptions on a quarterly basis.

The individual and consolidated financial statements were prepared on the historical cost basis except for the following items which are measured at fair value:

(i.) derivative and non-derivative financial instruments measured at fair value;

(ii.) available for sale financial assets at fair value;

(iii.) marketable securities classified as cash and cash equivalents measured at fair value;

(iv.) share-based payments and employee benefits at fair value, and

(v.) biological assets at fair value.

The Company’s Management notes that the individual and consolidated financial statements were prepared considering the continuing capacity of this operating activities, demonstrated through several acquisitions and maintenance of its operations in the operating segments in which it operates.

In addition, disclosed all relevant information in its explanatory notes, in order to clarify and complement an accounting basis used in the preparation of its financial statements.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The quarterly financial information have been prepared according to CVM Deliberation Nº 673/11, that approved CPC 21 (R1), which establishes the minimum content of interim financial statement and the principles for measurement and recognition of a full or condensed set of financial statements for an interim period.

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The interim financial statements, in this case denominated as quarterly financial information, aim to provide updated information based on the last annual financial statements disclosed. Therefore, the quarterly financial information focus on new activities, events and circumstances and do not duplicate the information previously disclosed, except in the case where Management judged that the maintenance of the information was relevant.

The current quarterly financial information was consistently prepared based on the accounting policies and estimates calculation methodology adopted in the preparation of the annual financial statements for the year ended December 31, 2016 (note 3).

There were no changes on such policies and estimates calculation methodology. As allowed by CVM Deliberation Nº 673/11, Management decided not to disclose again the details of the accounting policies adopted by the Company. Hence, the quarterly financial information should be read in conjunction with the annual financial statements for the year ended December 31, 2016, in order to allow the users of this financial information to further understand the Company’s capacity of profit and future cash flows generation as well as its financial conditions and liquidity.

The exchange rates in Brazilian Reais that are effective at the balance sheet dates are as follows:

Exchange rate at the balance sheet date |  | 03.31.17 |  | 12.31.16
Bath (THB) |  | 0.0924 |  | 0.0911
Kwait Dinar (KWD) |  | 10.4053 |  | 10.6751
Dirham (AED) |  | 0.8628 |  | 0.8875
Singapore Dollar (SGD) |  | 2.2683 |  | 2.2572
U.S. Dollar (US$ or USD) |  | 3.1684 |  | 3.2591
Euro (€ or EUR) |  | 3.3896 |  | 3.4384
Forint Hungary (HUF) |  | 0.0110 |  | 0.0111
Yen (JPY) |  | 0.0284 |  | 0.0279
Pound Sterling (£ or GBP) |  | 3.9729 |  | 4.0364
Argentine Peso ($ or ARS) |  | 0.2060 |  | 0.2056
Chilean Peso (CLP) |  | 0.0048 |  | 0.0049
Uruguayan Peso (UYU) |  | 0.1107 |  | 0.1122
Rande Africa (ZAR) |  | 0.2361 |  | 0.2379
Renminbi Yuan China (CNY) |  | 0.4603 |  | 0.4695
Saudi Riyal (SAR) |  | 0.8449 |  | 0.8689
Qatar Riyal (QAR) |  | 0.8702 |  | 0.8951
Omani Riyal (OMR) |  | 8.2382 |  | 8.4718
Ringgit Malaysia (MYR) |  | 0.7163 |  | 0.7267
Ruble Russia (RUB) |  | 0.0561 |  | 0.0534
Won South Korea (KRW) |  | 0.0028 |  | 0.0027

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Average rates |  | 03.31.17 |  | 03.31.16
Bath (THB) |  | 0.0895 |  | 0.1096
Kwait Dinar (KWD) |  | 10.3046 |  | 12.9638
Dirham (AED) |  | 0.8558 |  | 1.0647
Singapore Dollar (SGD) |  | 2.2187 |  | 2.7844
U.S. Dollar (US$ or USD) |  | 3.1429 |  | 3.9100
Euro (€ or EUR) |  | 3.3484 |  | 4.3086
Forint Hungary (HUF) |  | 0.0108 |  | 0.0138
Yen (JPY) |  | 0.0277 |  | 0.0339
Pound Sterling (£ or GBP) |  | 3.8945 |  | 5.5957
Argentine Peso ($ or ARS) |  | 0.2006 |  | 0.2713
Chilean Peso (CLP) |  | 0.0048 |  | 0.0056
Uruguayan Peso (UYU) |  | 0.1107 |  | 0.1243
Rande Africa (ZAR) |  | 0.2378 |  | 0.2471
Renminbi Yuan China (CNY) |  | 0.4565 |  | 0.5978
Saudi Riyal (SAR) |  | 0.8382 |  | 1.0427
Qatar Riyal (QAR) |  | 0.8633 |  | 1.0739
Omani Riyal (OMR) |  | 8.1692 |  | 10.1638
Ringgit Malaysia (MYR) |  | 0.7072 |  | 0.9321
Ruble Russia (RUB) |  | 0.0535 |  | 0.0523
Won South Korea (KRW) |  | 0.0027 |  | 0.0033

4. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

4.1. Overview

In the normal course of its business, the Company is exposed to credit, liquidity and market risks, which are actively managed in conformity to the Financial Risk and Strategic Documents Management Policy (“Risk Policy”) and internal guidelines subject to such policy. The policy and guidelines, as well as the monitoring process, evaluation and approval processes of risk management were disclosed in detail in the financial statements for the year ended December 31, 2016 (note 4) and there were no changes in the three-month period ended March 31, 2017.

a. Credit risk management

The Company is subject to the credit risk related to trade accounts receivable, financial investments and derivative contracts.

Credit risk associated with trade accounts receivable is actively managed through the use of specific systems. Furthermore, it should be noted the diversification of the customer portfolio and the concession of credit to customers with good financial and operational conditions. The Company does not usually require collateral for sales to customer, and has a contracted credit insurance policy for specific markets.

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Credit risk associated with financial investments and derivative contracts is limited to the counterparties listed below and is managed according to rating and concentration of the company’s portfolio.

On March 31, 2017, the Company had financial investments over R$100,000 at the following financial institutions: Banco Bradesco, Banco do Brasil, Banco do Nordeste, Banco Itaú, Banco Safra, Banco Santander, Caixa Econômica Federal and Ing Bank.

The Company also held derivative contracts with the following financial institutions: Banco BNP, Banco Bradesco, Banco do Brasil, Banco Itaú, Banco Santander, Banco Votorantim, Citibank, Deutsche Bank, Ing Bank, Merrill Lynch and Rabobank.

b. Liquidity risk management

Liquidity risk management aims to reduce the impacts caused by events which may affect the Company’s cash flow. Thus, the Company utilizes the following metrics:

· Cash Flow at Risk (“CFaR”), which aims to statistically estimates the cash flows for the next twelve months and the Company’s liquidity exposure. The Company determined that the minimum cash available should be equivalent mainly to the average monthly billing and EBITDA for the last twelve-month period; and

· Value at Risk ("VaR") is used for derivative transactions that require payments of periodic adjustments. Currently, the Company holds only BM&F Bovespa operations with daily adjustments and in order to monitor them, such methodology is utilized, which statistically measures potential maximum adjustments to be paid at intervals of 1 to 21-days.

The Company maintains its leverage levels in order to avoid any impact to its ability to settle commitments and obligations. As a guideline, the majority of the debt should be in long term. On March 31, 2017, the long term debt portion accounted for 82.0% (82.9% as of December 31, 2016) of the total outstanding debt with an average term greater than

3 years.

The table below summarizes the commitments and contractual obligations that may impact the Company’s liquidity:

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| Parent company
| 03.31.17
| Book value |  | Cash flow contracted |  | 2017 |  | 2018 |  | 2019 |  | 2020 |  | 2021 |  | 2022 onwards
Non derivative financial liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans and financing | 9,213,909 |  | 11,404,763 |  | 2,081,250 |  | 3,110,786 |  | 3,711,057 |  | 1,510,729 |  | 10,161 |  | 980,780
BRF bonds | 4,128,655 |  | 5,020,964 |  | 170,021 |  | 650,646 |  | 131,271 |  | 131,271 |  | 131,271 |  | 3,806,484
Trade accounts payable | 4,214,821 |  | 4,214,821 |  | 4,214,821 |  | - |  | - |  | - |  | - |  | -
Supply chain finance | 937,829 |  | 937,829 |  | 937,829 |  | - |  | - |  | - |  | - |  | -
Financial lease | 267,155 |  | 360,749 |  | 120,078 |  | 51,105 |  | 45,255 |  | 32,039 |  | 23,433 |  | 88,839
Operational lease | - |  | 513,706 |  | 278,142 |  | 110,287 |  | 45,491 |  | 20,088 |  | 14,314 |  | 45,384
Derivative financial liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Financial instruments designated as cash flow hedge |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate and exchange rate derivatives | 145,807 |  | 130,636 |  | (6,338) |  | 136,974 |  | - |  | - |  | - |  | -
Currency derivatives (NDF) | 2,837 |  | 231 |  | 3,289 |  | (3,058) |  | - |  | - |  | - |  | -
Currency derivatives (options) | 13,329 |  | - |  | - |  | - |  | - |  | - |  | - |  | -
Commodities derivatives (NDF) | 3,135 |  | 3,135 |  | 3,135 |  | - |  | - |  | - |  | - |  | -
Financial instruments not designated as cash flow hedge |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Currency derivatives (NDF) | 2,040 |  | 6,585 |  | 6,585 |  | - |  | - |  | - |  | - |  | -
Currency derivatives (Future) | 577 |  | 576 |  | 576 |  | - |  | - |  | - |  | - |  | -
Interest rate and exchange rate derivatives | 172,407 |  | 242,828 |  | 242,828 |  | - |  | - |  | - |  | - |  | -
Currency derivatives (options) | 89 |  | - |  | - |  | - |  | - |  | - |  | - |  | -

| Consolidated
| 03.31.17
| Book value |  | Cash flow contracted |  | 2017 |  | 2018 |  | 2019 |  | 2020 |  | 2021 |  | 2022 onwards
Non derivative financial liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans and financing | 11,184,905 |  | 13,642,751 |  | 2,523,126 |  | 4,309,955 |  | 3,721,625 |  | 1,521,326 |  | 20,729 |  | 1,545,990
BRF bonds | 4,128,655 |  | 5,020,964 |  | 170,021 |  | 650,646 |  | 131,271 |  | 131,271 |  | 131,271 |  | 3,806,484
BFF bonds | 274,288 |  | 332,133 |  | 9,889 |  | 19,778 |  | 19,778 |  | 282,688 |  | - |  | -
Sadia bonds | 365,866 |  | 369,550 |  | 369,550 |  | - |  | - |  | - |  | - |  | -
BRF GMBH bonds | 1,544,329 |  | 3,222,856 |  | 112,874 |  | 112,874 |  | 112,874 |  | 112,874 |  | 112,874 |  | 2,658,486
Quickfood bonds | 131,718 |  | 125,955 |  | 25,588 |  | 23,347 |  | 16,141 |  | 36,459 |  | 12,210 |  | 12,210
SHB bonds | 2,384,673 |  | 2,238,872 |  | 34,456 |  | 68,913 |  | 68,913 |  | 68,913 |  | 68,913 |  | 1,928,764
Trade accounts payable | 5,513,330 |  | 5,513,330 |  | 5,513,330 |  | - |  | - |  | - |  | - |  | -
Supply chain finance | 1,009,740 |  | 1,009,740 |  | 1,009,740 |  | - |  | - |  | - |  | - |  | -
Financial lease | 275,456 |  | 375,534 |  | 124,409 |  | 54,491 |  | 47,181 |  | 33,114 |  | 23,433 |  | 92,906
Operational lease | - |  | 626,895 |  | 346,087 |  | 124,738 |  | 53,289 |  | 25,920 |  | 19,764 |  | 57,097
Derivative financial liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Financial instruments designated as cash flow hedge |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate and exchange rate derivatives | 161,607 |  | 152,477 |  | (493) |  | 152,579 |  | 391 |  | - |  | - |  | -
Currency derivatives (NDF) | 2,837 |  | 231 |  | 3,289 |  | (3,058) |  | - |  | - |  | - |  | -
Currency derivatives (options) | 13,329 |  | - |  | - |  | - |  | - |  | - |  | - |  | -
Commodities derivatives (NDF) | 3,135 |  | 3,135 |  | 3,135 |  | - |  | - |  | - |  | - |  | -
Financial instruments not designated as cash flow hedge |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Currency derivatives (NDF) | 22,339 |  | 30,223 |  | 30,223 |  | - |  | - |  | - |  | - |  | -
Currency derivatives (Future) | 577 |  | 576 |  | 576 |  | - |  | - |  | - |  | - |  | -
Interest rate and exchange rate derivatives | 172,407 |  | 183,780 |  | 183,780 |  | - |  | - |  | - |  | - |  | -
Commodities derivatives (Future) | 89 |  | - |  | - |  | - |  | - |  | - |  | - |  | -

c. Interest rate risk management

Interest rates risk is the one the Company incurs in economic losses resulting from changes in these rates, which could affect its assets and liabilities.

The Company’s Risk Policy does not restrict exposure to different interest rates, neither establishes limits for fixed or floating rates. However, the Company continually monitors the market interest rates, in order to evaluate any need to enter into hedging transaction to protect from the exposure to fluctuation of such rates and manage the mismatch between its financial investments and debts. In these transactions the Company enters into contracts that exchange floating rate for fixed rate or vice-versa. Such transactions were designated by the Company as cash flow hedge.

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The Company’s indebtedness is essentially tied to the London Interbank Offered rate ("LIBOR"), fixed coupon (“R$ and USD”), Long Term Interest Rate ("TJLP") and Monetary Unit of the Bank National Economic and Social Development ("UMBNDES") rates. In case of adverse changes in the market that result in LIBOR, TJLP and UMBNDES hikes, the cost of the floating indebtedness rises and on the other hand, the cost of the fixed indebtedness decreases in relative terms.

With regards to the Company's marketable securities, the main index is the Interbank Deposit Certificate ("CDI") for investments in Brazil and fixed coupon (“USD”) for investments in the International market.

d. Foreign exchange risk management

Foreign exchange risk is the one related to variations of foreign exchange rates that may cause the Company to incur unexpected losses, leading to a reduction of assets or an increase in liabilities.

The Risk Policy is intended to protect the Company's results from these variations, in order to:

· Protect operating revenues and costs that are related to transactions arising from commercial activities, such as estimated exports and purchases of raw materials, utilizing hedging instruments, that is, to protect its future cash flow denominated in foreign currency; and

· Manage assets and liabilities denominated in foreign currencies in order to protect the balance sheet of the Company, through the use of over-the-counter and futures transactions.

The Company’s consolidated financial statements are mainly impacted by the following currencies: Argentine Peso, Baht, Yen, Dirham, Euro, Kwait Dinar, Pound Sterling, Riyal Saudi Arabia, Riyal Qatar and U.S. Dollar.

Assets and liabilities denominated in foreign currency are as follows summarized in U.S. Dollar:

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| Consolidated
| 03.31.17 |  | 12.31.16
| Exposure (in thousand of US$)
Cash and cash equivalents | 27,829 |  | 8,500
Trade accounts receivable | 439,021 |  | 464,040
Trade accounts payable | (267,803) |  | (217,029)
Loans and financing | (1,669,915) |  | (1,664,644)
Hedge | 952,798 |  | 1,067,059
Investments, net | 456,073 |  | 135,556
Other assets and liabilities, net | 30,664 |  | 22,944
Exposure in result | (31,333) |  | (183,574)

The investments, net line item is comprised of natural hedges derived from assets and liabilities of foreign subsidiaries with the Brazilian Reais as functional currency. The US$456,073 exposure may be composed into US$1,439,876 assets and US$983,803 liabilities. The Company’s strategy seeks to neutralize the impacts of exchange variations, and for that objective, during 2017 more hedge was contracted to protect the direct exposure into statement of income.

The Company has a foreign exchange exposure that impacts shareholders’ equity of US$1,478,081 (equivalent to R$4,683,151) on March 31, 2017 (US$1,334,149 on December 31, 2016 equivalent to R$4,348,125). This exposure does not contemplate the effects of the financial instruments designated as hedge accounting presented in the note 4.2.1, which present a temporary effect on shareholders’ equity.

e. Commodity price risk management

In the normal course of its operations, the Company purchases commodities, mainly corn, soymeal, oil and live hog, which are some of the individual components of production cost.

Corn, soymeal and oil prices are subject to volatility resulting from weather conditions, crop yield, transportation and storage costs, government’s agricultural policy, foreign exchange rates and the prices of these commodities on the international market, among others factors. The prices of hog acquired from third parties are subject to market conditions and are influenced by internal availability and levels of demand in the international market, among other aspects.

The Risk Policy establishes limits for hedging the corn and soymeal purchase flow, aiming to reduce the impact resulting from a price increase of these raw materials, and may utilize derivative instruments or inventory management for this purpose. Currently, the management of inventory levels is used as a hedging instrument.

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f. Capital management

The Company’s definition of the adequate capital structure is essentially associated with (i) cash strength as a tolerance factor to liquidity volatility, (ii) financial leverage and (iii) maximization of the opportunity cost of capital.

The cash and liquidity strategy takes into consideration the historical scenarios of volatility of results as well as simulations of sectorial and systemic crises and is based on permitting the resilience in scenarios of restricted access to capital.

Financial leverage aims the balance between the different sources of funding and their conditions of allocation in order to maximize the opportunity cost to BRF in its business expansion initiatives. Moreover, the objective of maintaining the investment grade disciplines the weighting of using own and third party capital.

The Company monitors debt levels and net debt, which are shown below:

| Consolidated
| 03.31.17 |  | 12.31.16
| Current |  | Non-current |  | Total |  | Total
Foreign currency debt | (1,754,823) |  | (9,267,006) |  | (11,021,829) |  | (10,318,725)
Local currency debt | (1,848,320) |  | (7,144,285) |  | (8,992,605) |  | (8,643,655)
Other financial liabilities | (376,320) |  | - |  | (376,320) |  | (529,571)
Gross debt | (3,979,463) |  | (16,411,291) |  | (20,390,754) |  | (19,491,951)
Marketable securities and cash and cash equivalents | 6,833,244 |  | 457,398 |  | 7,290,642 |  | 7,506,932
Other financial assets | 199,931 |  | - |  | 199,931 |  | 198,015
Restricted cash | 214,573 |  | 442,500 |  | 657,073 |  | 645,808
Net debt | 3,268,285 |  | (15,511,393) |  | (12,243,108) |  | (11,141,196)

4.2. Derivative and non-derivative financial instruments designated as hedge accounting

As established by CVM Deliberation Nº 604/09, the Company applies hedge accounting to its derivative instruments classified as cash flow hedge of highly probable forecasted transactions and fair value hedge of firm commitments, in accordance with the Risk Policy. The cash flow hedge consists of hedging the exposure to variations of the cash flows attributable to a particular risk associated with a recognized asset or liability or a highly probable forecasted transaction that could affect profit and loss. The fair value hedge of a firm commitment is a protection against fluctuations of a specific type of risk associated to a firm agreement to exchange a determined quantity for a determined price in a specific date, or in specific future determined dates.

The Risk Policy has also the purpose of determining parameters for using financial instruments, including derivatives, which are designated as protection to operating and financial assets and liabilities, which are exposed to the variations of foreign exchange rates, the fluctuation of interest rates and changes to commodity prices. The Risk Management Committee is responsible for ensuring compliance to the requirements established by the Company’s Risk Policy, supported by the Risk Management area.

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The Company within its hedge accounting strategy utilizes the following financial instruments:

· Currency non-deliverable forwards – NDF;

· Interest rate and currency swap;

· Options;

· Fixed exchange rate;

· Export prepayments – PPEs;

· Senior unsecured notes – Bonds; and

· Commodities non-deliverable forwards - NDF

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4.2.1 Breakdown of the balances of derivative financial instruments and exchange fixed rate

The positions of outstanding derivative financial instruments and exchange fixed rate are as follows:

Parent company and Consolidated
03.31.17 |  | 12.31.16
Instrument |  | Hedge object |  | Reference currency (notional) |  | Reference value (notional) |  | Fair value (1) |  | Reference value (notional) |  | Fair value (1)
Financial instruments designated as hedge accounting |  |  |  |  |  |  |  |  |  |  |  |
NDF - U.S. Dollar sale |  | Currency |  | US$ |  | 273,756 |  | 26,799 |  | 106,935 |  | 6,556
NDF - Euro sale |  | Currency |  | EUR |  | 90,000 |  | 48,200 |  | 145,000 |  | 56,852
NDF - Pound Sterling sale |  | Currency |  | GBP |  | 49,000 |  | 5,412 |  | 34,000 |  | 11,142
Currency swap - U.S. Dollar |  | Currency |  | BRL |  | 250,000 |  | (137,577) |  | 250,000 |  | (150,803)
Interest rate swap - U.S. Dollar |  | Interest |  | US$ |  | 200,000 |  | (8,230) |  | 200,000 |  | (11,337)
Options - U.S. Dollar |  | Currency |  | US$ |  | 916,881 |  | 84,831 |  | 1,322,000 |  | 66,791
Options - Euro |  | Currency |  | EUR |  | 30,000 |  | 7,279 |  | 80,000 |  | 16,886
NDF - Commodities purchase |  | Commodities |  | Ton/US$ |  | 38,001 |  | (1,609) |  | 85,000 |  | (880)
NDF - Commodities sale |  | Commodities |  | Ton/US$ |  | 738,592 |  | 4,245 |  | 308,592 |  | 1,837
Future - BM&FBOVESPA |  | Commodities |  | Ton/US$ |  | 85,590 |  | 172 |  | 31,995 |  | (27)
Total in Parent company |  |  |  |  |  |  |  | 29,522 |  |  |  | (2,983)
Interest rate swap - U.S. Dollar |  | Interest |  | US$ |  | 200,000 |  | (15,800) |  | 200,000 |  | (22,025)
Fixed exchange rate - U.S. Dollar |  | Currency |  | US$ |  | - |  | - |  | 770 |  | (60)
Fixed exchange rate - Euro |  | Currency |  | EUR |  | 1,222 |  | 90 |  | 6,566 |  | (225)
Fixed exchange rate - Pound Sterling |  | Currency |  | GBP |  | 2,584 |  | 271 |  | 6,578 |  | 19
Total Consolidated |  |  |  |  |  |  |  | 14,083 |  |  |  | (25,274)
Financial instruments not designated as hedge accounting |  |  |  |  |  |  |  |  |  |  |  |
NDF - Purchase of U.S. Dollar |  | Currency |  | US$ |  | 680,000 |  | 2,042 |  | 680,000 |  | (82,481)
Currency swap - U.S. Dollar |  | Currency |  | US$ |  | 153,689 |  | (152,971) |  | 221,977 |  | (200,799)
Currency swap - Euro |  | Currency |  | EUR |  | 13,750 |  | (19,436) |  | 13,750 |  | (17,742)
Interest rate - R$ |  | Interest |  | BRL |  | 50,000 |  | 769 |  | 50,000 |  | 438
Options - U.S. Dollar - Put |  | Currency |  | US$ |  | 20,000 |  | 89 |  | - |  | -
Options - U.S. Dollar - Call |  | Currency |  | US$ |  | 20,000 |  | (89) |  | - |  | -
Future - BM&FBOVESPA |  | Currency |  | US$ |  | 105,000 |  | (577) |  | 150,000 |  | (5,230)
Total in Parent company |  |  |  |  |  |  |  | (170,173) |  |  |  | (305,814)
NDF - Purchase of Euro |  | Currency |  | EUR |  | 420,000 |  | (20,299) |  | 300,000 |  | (479)
Fixed exchange rate - US$ |  | Currency |  | US$ |  | - |  | - |  | 790 |  | 11
Total Consolidated |  |  |  |  |  |  |  | (190,472) |  |  |  | (306,282)
Total in Parent company |  |  |  |  |  |  |  | (140,651) |  |  |  | (308,797)
Total Consolidated |  |  |  |  |  |  |  | (176,389) |  |  |  | (331,556)

(1) The market value determination method used by the Company consists of calculating the future value based on the contracted conditions and determining the present value based on market curves, obtained from the database of Bloomberg and BM&FBOVESPA.

a. Non-deliverable forwards – NDF

i. Currency non-deliverable forwards - NDF

The position of the currency non-deliverable forward – NDF, by maturity, as well as the weighted average exchange rates and the fair value, are presented as follows:

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Parent company and Consolidated
03.31.17
PUT |  | R$ x US$ |  | R$ x EUR |  | R$ x GBP
Maturities |  | Notional (US$) |  | Average rate |  | Fair value |  | Notional (EUR) |  | Average rate |  | Fair value |  | Notional (GBP) |  | Average rate |  | Fair value
Financial instruments designated as cash flow hedge |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
April 2017 |  | 97,000 |  | 3.1777 |  | 1,373 |  | 20,000 |  | 3.9614 |  | 11,628 |  | 20,000 |  | 4.0095 |  | 865
May 2017 |  | 20,000 |  | 3.2263 |  | 1,371 |  | 20,000 |  | 4.0105 |  | 12,252 |  | 20,000 |  | 4.0391 |  | 1,570
June 2017 |  | 72,084 |  | 3.3631 |  | 11,665 |  | 20,000 |  | 4.0361 |  | 12,283 |  | 3,000 |  | 4.7235 |  | 2,140
July 2017 |  | - |  | - |  | - |  | 10,000 |  | 4.0447 |  | 5,912 |  | - |  | - |  | -
August 2017 |  | 44,672 |  | 3.4405 |  | 9,040 |  | 10,000 |  | 3.7744 |  | 3,012 |  | 3,000 |  | 4.1907 |  | 406
September 2017 |  | 20,000 |  | 3.4235 |  | 3,420 |  | 10,000 |  | 3.8154 |  | 3,113 |  | 3,000 |  | 4.2301 |  | 431
February 2018 |  | 20,000 |  | 3.3213 |  | (70) |  | - |  | - |  | - |  | - |  | - |  | -
|  | 273,756 |  | 3.3014 |  | 26,799 |  | 90,000 |  | 3.9612 |  | 48,200 |  | 49,000 |  | 4.0899 |  | 5,412

Parent company and Consolidated
CALL |  | US$ x R$ |  | US$ x EUR
Maturities |  | Notional (US$) |  | Average rate |  | Fair value |  | Notional (EUR) |  | Average rate |  | Fair value
Financial instruments not designated as cash flow hedge |  |  |  |  |  |  |  |  |  |  |  |
June 2017 |  | 680,000 |  | 3.1892 |  | 2,042 |  | 420,000 |  | 1.0876 |  | (20,299)
|  | 680,000 |  | 3.1892 |  | 2,042 |  | 420,000 |  | 1.0876 |  | (20,299)

ii. Commodities non-deliverable forwards – NDF

The position of the commodities non-deliverable forwards – NFD, by maturity, as well as weighted average exchange rates and the fair value, are presented as follows:

Parent company and Consolidated
03.31.17
CALL - Soymeal |  | Quantity |  | Average rate |  | Fair
Maturities |  | Ton |  | US$/Ton |  | value
Designated as hedge accounting |  |  |  |  |  |
April 2017 |  | 13,000 |  | 126.23 |  | (556)
May 2017 |  | 5,000 |  | 127.53 |  | (212)
June 2017 |  | 15,001 |  | 127.53 |  | (638)
July 2017 |  | 4,000 |  | 127.89 |  | (175)
August 2017 |  | 1,000 |  | 126.16 |  | (28)
|  | 38,001 |  | 127.09 |  | (1,609)
PUT - Corn |  | Quantity |  | Average rate |  | Fair
Maturities |  | Ton |  | US$/Ton |  | value
Designated as hedge accounting |  |  |  |  |  |
June 2017 |  | 542,591 |  | 148.51 |  | 3,708
August 2017 |  | 196,001 |  | 150.17 |  | 537
|  | 738,592 |  | 148.95 |  | 4,245

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b. Interest rate and currency swap

The position of interest rate and currency swap is presented as follows:

|  |  |  |  |  |  |  | Parent company |  | Consolidated
03.31.17
Instrument |  | Maturity |  | Assets (Hedged object) |  | Liabilities (Protected risk) |  | Notional |  | Fair value |  | Notional |  | Fair value
Financial instruments designated as cash flow hedge |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate |  | 01.22.18 |  | LIBOR 6M + 2.82% p.a. |  | 5.86% p.a. |  | 100,000 |  | (1,981) |  | 100,000 |  | (1,981)
Interest rate |  | 06.18.18 |  | LIBOR 3M + 2.60% p.a. |  | 5.47% p.a. |  | 100,000 |  | (6,249) |  | 100,000 |  | (6,249)
Interest rate |  | 02.01.19 |  | LIBOR 6M + 2.70% p.a. |  | 5.90% p.a. |  | - |  | - |  | 100,000 |  | (7,956)
Interest rate |  | 02.01.19 |  | LIBOR 6M + 2.70% p.a. |  | 5.88% p.a. |  | - |  | - |  | 100,000 |  | (7,844)
|  |  |  |  |  |  |  | 200,000 |  | (8,230) |  | 400,000 |  | (24,030)
Currency swap |  | 05.22.18 |  | R$ + 7.75% |  | US$ + 1.60% |  | 250,000 |  | (137,577) |  | 250,000 |  | (137,577)
|  |  |  |  |  |  |  |  |  | (145,807) |  |  |  | (161,607)
Financial instruments not designated as cash flow hedge |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate - Bond |  | 05.22.18 |  | R$ (Fixed rate of 7.75% p.a.) |  | 68.84% CDI |  | 50,000 |  | 769 |  | 50,000 |  | 769
Currency swap |  | 05.22.17 |  | US$ |  | 72.20% CDI |  | 17,812 |  | (17,920) |  | 17,812 |  | (17,920)
Currency swap |  | 05.22.17 |  | US$ |  | 73.76% CDI |  | 9,875 |  | (10,080) |  | 9,875 |  | (10,080)
Currency swap |  | 05.24.17 |  | US$ |  | 70.75% CDI |  | 116,636 |  | (115,883) |  | 116,636 |  | (115,883)
Currency swap |  | 06.06.17 |  | US$ |  | 73.00% CDI |  | 5,078 |  | (5,088) |  | 5,078 |  | (5,088)
Currency swap |  | 07.28.17 |  | US$ |  | 72.30% CDI |  | 4,288 |  | (4,000) |  | 4,288 |  | (4,000)
|  |  |  |  |  |  |  | 153,689 |  | (152,971) |  | 153,689 |  | (152,971)
Currency swap |  | 06.05.17 |  | EURO |  | 83.03% CDI |  | 13,750 |  | (19,436) |  | 13,750 |  | (19,436)
|  |  |  |  |  |  |  |  |  | (171,638) |  |  |  | (171,638)

c. Fixed exchange rate

The position of fixed exchange rate designated as hedge accounting is presented as follows:

Consolidated
03.31.17
PUT |  | THB x EUR |  | THB x GBP
Maturities |  | Notional EUR |  | Average EUR |  | Fair value |  | Notional GBP |  | Average GBP |  | Fair value
Designated as hedge accounting |  |  |  |  |  |  |  |  |  |  |  |
June 2017 |  | 1,222 |  | 37.7600 |  | 90 |  | 2,584 |  | 44.2846 |  | 271
|  | 1,222 |  | 37.7600 |  | 90 |  | 2,584 |  | 44.2846 |  | 271

d. Options

i. Currency options

The Company designates as a cash flow hedge only the variation in the intrinsic value of its options, recognizing the time value of the premium in the financial result. If the hedge is not effective and the option is not exercised due to devaluation of the Brazilian Real, the losses related to the options will be registered as financial expenses in the statement of income.

The Company has designated transactions involving options denominated collar where there is a purchase of a put option ("PUT") and a sale of a call option ("CALL"), simultaneously, such that the premium paid for the put is compensated by the premium received in the call.

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When the market price of any of the options is not available in an active market, the fair value is based on an option pricing model (Black-Scholes or Binomial).

Parent company and Consolidated
03.31.17
R$ x US$
Type |  | Maturities |  | Notional (US$) |  | Average US$ |  | Fair value
Financial instruments designated as cash flow hedge |  |  |  |  |  |  |  |
Collar - Call (Sale) |  | April 2017 |  | (100,000) |  | 3.9539 |  | -
Collar - Put (Purchase) |  | April 2017 |  | 100,000 |  | 3.2900 |  | 13,949
Collar - Call (Sale) |  | May 2017 |  | (142,000) |  | 3.7468 |  | (1,434)
Collar - Put (Purchase) |  | May 2017 |  | 142,000 |  | 3.2018 |  | 12,513
Collar - Call (Sale) |  | June 2017 |  | (137,844) |  | 3.8620 |  | (1,745)
Collar - Put (Purchase) |  | June 2017 |  | 137,844 |  | 3.2019 |  | 12,985
Collar - Call (Sale) |  | July 2017 |  | (142,474) |  | 4.0663 |  | (411)
Collar - Put (Purchase) |  | July 2017 |  | 142,474 |  | 3.2062 |  | 13,454
Collar - Call (Sale) |  | August 2017 |  | (84,563) |  | 3.8358 |  | (1,609)
Collar - Put (Purchase) |  | August 2017 |  | 84,563 |  | 3.2790 |  | 12,104
Collar - Call (Sale) |  | September 2017 |  | (80,000) |  | 3.9159 |  | (1,666)
Collar - Put (Purchase) |  | September 2017 |  | 80,000 |  | 3.2850 |  | 11,684
Collar - Call (Sale) |  | October 2017 |  | (100,000) |  | 4.0516 |  | (1,811)
Collar - Put (Purchase) |  | October 2017 |  | 100,000 |  | 3.2780 |  | 13,787
Collar - Call (Sale) |  | November 2017 |  | (40,000) |  | 3.5655 |  | (2,341)
Collar - Put (Purchase) |  | November 2017 |  | 40,000 |  | 3.0900 |  | 2,109
Collar - Call (Sale) |  | December 2017 |  | (20,000) |  | 3.6150 |  | (1,184)
Collar - Put (Purchase) |  | December 2017 |  | 20,000 |  | 3.0900 |  | 1,111
Collar - Call (Sale) |  | January 2018 |  | (20,000) |  | 3.7000 |  | (1,127)
Collar - Put (Purchase) |  | January 2018 |  | 20,000 |  | 3.1000 |  | 1,250
|  |  |  | - |  |  |  | 81,618
Put (Purchase) |  | April 2017 |  | 20,000 |  | 3.1600 |  | 858
Put (Purchase) |  | May 2017 |  | 15,000 |  | 3.1900 |  | 1,153
Put (Purchase) |  | June 2017 |  | 15,000 |  | 3.1900 |  | 1,202
|  |  |  |  |  |  |  | 3,213
|  |  |  |  |  |  |  | 84,831

Parent company and Consolidated
03.31.17
R$ x EUR
Type |  | Maturities |  | Notional (EUR) |  | Average EUR |  | Fair value
Financial instruments designated as cash flow hedge |  |  |  |  |  |  |  |
Collar - Call (Sale) |  | April 2017 |  | (10,000) |  | 4.4815 |  | -
Collar - Put (Purchase) |  | April 2017 |  | 10,000 |  | 3.6200 |  | 2,491
Collar - Call (Sale) |  | May 2017 |  | (10,000) |  | 4.5800 |  | -
Collar - Put (Purchase) |  | May 2017 |  | 10,000 |  | 3.6200 |  | 2,462
Collar - Call (Sale) |  | June 2017 |  | (10,000) |  | 4.7060 |  | -
Collar - Put (Purchase) |  | June 2017 |  | 10,000 |  | 3.6200 |  | 2,326
|  |  |  | - |  |  |  | 7,279

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Parent company and Consolidated
03.31.17
R$ x US$
Type |  | Maturities |  | Notional (US$) |  | Average US$ |  | Fair value
Financial instruments not designated as cash flow hedge |  |  |  |  |  |
Put (Sale) |  | April 2017 |  | (20,000) |  | 3.1250 |  | 89
Put (Purchase) |  | April 2017 |  | 20,000 |  | 3.1250 |  | (89)
|  |  |  | - |  |  |  | -

4.2.2 Breakdown of the balances of non-derivative financial instruments

The position of non-derivative financial instruments designated as cash flow hedge is presented as follows:

Parent company and Consolidated
|  |  |  |  |  | 03.31.17 |  | 12.31.16
Hedge Instrument |  | Hedge object |  | Reference currency (notional) |  | Value (notional) |  | Fair value (1) |  | Value (notional) |  | Fair value (1)
Financial instruments designated as cash flow hedge |  |  |  |  |  |  |  |  |  |  |  |
Export prepayment - PPEs |  | Exchange rate |  | USD |  | 283,333 |  | 897,713 |  | 300,000 |  | 977,730
Senior unsecured notes - Bonds |  | Exchange rate |  | USD |  | 268,662 |  | 952,789 |  | 268,662 |  | 977,157
|  |  |  |  |  | 551,995 |  | 1,850,502 |  | 568,662 |  | 1,954,887

(1) Reference value converted by Ptax rate in effect at period-end or partial repeal dates.

a. Export prepayments – PPEs

The position of PPEs designated as cash flow hedge is presented as follows:

Parent company and Consolidated
03.31.17
Hedge Instrument |  | Type of risk hedged |  | Maturities |  | Notional (US$) |  | Average rate |  | Fair value (1)
Export prepayment - PPE |  | US$ (E.R.) |  | 04.2017 to 02.2019 |  | 283,333 |  | 1.7909 |  | 897,713

(1) Reference value converted by the Ptax rate at the end of the period or partial revocation dates. Such amount demonstrate the total that may impact the Company's shareholders' equity.

b. Senior unsecured notes – Bonds

The position of bonds designated as cash flow hedge is presented as follows:

Parent company and Consolidated
03.31.17
Hedge Instrument |  | Type of risk hedged |  | Maturities |  | Notional (US$) |  | Average rate |  | Fair value (1)
BRF SA BRFSBZ5 |  | US$ (E.R.) |  | 06.2022 |  | 118,662 |  | 2.0213 |  | 477,529
BRF SA BRFSBZ3 |  | US$ (E.R.) |  | 05.2023 |  | 150,000 |  | 2.0387 |  | 475,260
|  |  |  |  |  | 268,662 |  | 2.0300 |  | 952,789

(1) Reference value converted by the Ptax rate at the end of the period or partial revocation dates. Such amount demonstrate the total that may impact the Company's shareholders' equity.

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4.3. Gains and losses of derivative and non-derivative financial instruments

The unrealized gains and losses of derivative and non-derivative financial instruments designated as cash flow hedge are recorded as a component of other comprehensive income, as set forth below:

| Shareholders' Equity
| Parent company |  | Consolidated
| 03.31.17 |  | 12.31.16 |  | 03.31.17 |  | 12.31.16
Derivatives designated as cash flow hedges |  |  |  |  |  |  |
Foreign exchange risks | (6,914) |  | (28,998) |  | (6,554) |  | (29,169)
Interest risks | (7,753) |  | (8,803) |  | (22,018) |  | (25,872)
Commodity risks | (5,688) |  | 3,389 |  | (5,688) |  | 3,389
| (20,355) |  | (34,412) |  | (34,260) |  | (51,652)
Non derivatives designated as cash flow hedges |  |  |  |  |  |  |
Foreign exchange risks | (734,076) |  | (812,007) |  | (734,076) |  | (812,007)
Gross losses | (754,431) |  | (846,419) |  | (768,336) |  | (863,659)
Deferred taxes on losses | 256,507 |  | 287,782 |  | 256,464 |  | 287,739
OCI recognized by subsidiaries | (13,948) |  | (17,283) |  | - |  | -
Losses, net of taxes | (511,872) |  | (575,920) |  | (511,872) |  | (575,920)
Change in gross losses | 91,988 |  | 798,351 |  | 95,323 |  | 819,983
Income taxes on financial instruments adjustments | (31,275) |  | (272,664) |  | (31,275) |  | (272,707)
OCI recognized by subsidiaries | 3,335 |  | 21,589 |  | - |  | -
Impact in other comprehensive income | 64,048 |  | 547,276 |  | 64,048 |  | 547,276

During the three-month period ended March 31, 2017, the realized transaction with derivative and non-derivative financial instruments designated as cash flow hedge resulted in a gain of R$117,928 (loss of R$70,262 during the three-month period ended March 31, 2016), composed by a net gain amounting to R$107,816 (loss of R$70,405 during the three-month period ended March 31, 2016) recorded as gross revenues and a net loss of R$10,112 (gain of R$143 during the three-month period ended March 31, 2016) recorded in the financial result.

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4.4. Breakdown of financial instruments by category – except derivatives

| Parent company
| 03.31.17
| Loans and receivables |  | Available for sale |  | Trading securities |  | Held to maturity |  | Financial liabilities |  | Total
Assets |  |  |  |  |  |  |  |  |  |  |
Amortized cost |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents | 3,540,603 |  | - |  | - |  | - |  | - |  | 3,540,603
Marketable securities | - |  | - |  | - |  | 82,637 |  | - |  | 82,637
Restricted cash | - |  | - |  | - |  | 574,505 |  | - |  | 574,505
Trade accounts receivable | 7,204,006 |  | - |  | - |  | - |  | - |  | 7,204,006
Other credits | 304,908 |  | - |  | - |  | - |  | - |  | 304,908
Other receivables | 1,749,515 |  | - |  | - |  | - |  | - |  | 1,749,515
Fair value |  |  |  |  |  |  |  |  |  |  |
Marketable securities | - |  | 253,760 |  | 209,837 |  | - |  | - |  | 463,597
Liabilities |  |  |  |  |  |  |  |  |  |  |
Amortized cost |  |  |  |  |  |  |  |  |  |  |
Trade accounts payable | - |  | - |  | - |  | - |  | (4,214,821) |  | (4,214,821)
Supply chain finance | - |  | - |  | - |  | - |  | (937,829) |  | (937,829)
Loans and financing |  |  |  |  |  |  |  |  |  |  |
Local currency | - |  | - |  | - |  | - |  | (8,826,847) |  | (8,826,847)
Foreign currency | - |  | - |  | - |  | - |  | (4,515,717) |  | (4,515,717)
Capital lease payable | - |  | - |  | - |  | - |  | (267,155) |  | (267,155)
| 12,799,032 |  | 253,760 |  | 209,837 |  | 657,142 |  | (18,762,369) |  | (4,842,598)

| Parent company
| 12.31.16
| Loans and receivables |  | Available for sale |  | Trading securities |  | Held to maturity |  | Financial liabilities |  | Total
Assets |  |  |  |  |  |  |  |  |  |  |
Amortized cost |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents | 3,856,505 |  | - |  | - |  | - |  | - |  | 3,856,505
Marketable securities | - |  | - |  | - |  | 80,200 |  | - |  | 80,200
Restricted cash | - |  | - |  | - |  | 555,667 |  | - |  | 555,667
Trade accounts receivable | 8,409,234 |  | - |  | - |  | - |  | - |  | 8,409,234
Other credits | 335,018 |  | - |  | - |  | - |  | - |  | 335,018
Other receivables | 74,164 |  | - |  | - |  | - |  | - |  | 74,164
Fair value |  |  |  |  |  |  |  |  |  |  |
Marketable securities | - |  | 329,876 |  | 228,969 |  | - |  | - |  | 558,845
Liabilities |  |  |  |  |  |  |  |  |  |  |
Amortized cost |  |  |  |  |  |  |  |  |  |  |
Trade accounts payable | - |  | - |  | - |  | - |  | (4,758,721) |  | (4,758,721)
Supply chain finance | - |  | - |  | - |  | - |  | (1,335,582) |  | (1,335,582)
Loans and financing |  |  |  |  |  |  |  |  |  |  |
Local currency | - |  | - |  | - |  | - |  | (8,643,655) |  | (8,643,655)
Foreign currency | - |  | - |  | - |  | - |  | (7,291,438) |  | (7,291,438)
Capital lease payable | - |  | - |  | - |  | - |  | (211,482) |  | (211,482)
| 12,674,921 |  | 329,876 |  | 228,969 |  | 635,867 |  | (22,240,878) |  | (8,371,245)

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| Consolidated
| 03.31.17
| Loans and receivables |  | Available for sale |  | Trading securities |  | Held to maturity |  | Financial liabilities |  | Total
Assets |  |  |  |  |  |  |  |  |  |  |
Amortized cost |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents | 6,307,017 |  | - |  | - |  | - |  | - |  | 6,307,017
Marketable securities | - |  | - |  | - |  | 252,675 |  | - |  | 252,675
Restricted cash | - |  | - |  | 82,568 |  | 574,505 |  | - |  | 657,073
Trade accounts receivable | 3,157,939 |  | - |  | - |  | - |  | - |  | 3,157,939
Other credits | 305,547 |  | - |  | - |  | - |  | - |  | 305,547
Other receivables | 1,783,067 |  | - |  | - |  | - |  | - |  | 1,783,067
Fair value |  |  |  |  |  |  |  |  |  |  |
Marketable securities | - |  | 456,506 |  | 274,444 |  | - |  | - |  | 730,950
Liabilities |  |  |  |  |  |  |  |  |  |  |
Amortized cost |  |  |  |  |  |  |  |  |  |  |
Trade accounts payable | - |  | - |  | - |  | - |  | (5,513,330) |  | (5,513,330)
Supply chain finance | - |  | - |  | - |  | - |  | (1,009,740) |  | (1,009,740)
Loans and financing |  |  |  |  |  |  |  |  |  |  |
Local currency | - |  | - |  | - |  | - |  | (8,992,605) |  | (8,992,605)
Foreign currency | - |  | - |  | - |  | - |  | (11,021,829) |  | (11,021,829)
Capital lease payable | - |  | - |  | - |  | - |  | (275,456) |  | (275,456)
| 11,553,570 |  | 456,506 |  | 357,012 |  | 827,180 |  | (26,812,960) |  | (13,618,692)

| Consolidated
| 12.31.16
| Loans and receivables |  | Available for sale |  | Trading securities |  | Held to maturity |  | Financial liabilities |  | Total
Assets |  |  |  |  |  |  |  |  |  |  |
Amortized cost |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents | 6,356,919 |  | - |  | - |  | - |  | - |  | 6,356,919
Marketable securities | - |  | - |  | - |  | 255,493 |  | - |  | 255,493
Restricted cash | - |  | - |  | 90,140 |  | 555,668 |  | - |  | 645,808
Trade accounts receivable | 3,095,848 |  | - |  | - |  | - |  | - |  | 3,095,848
Other credits | 335,506 |  | - |  | - |  | - |  | - |  | 335,506
Other receivables | 74,164 |  | - |  | - |  | - |  | - |  | 74,164
Fair value |  |  |  |  |  |  |  |  |  |  |
Marketable securities | - |  | 623,275 |  | 271,245 |  | - |  | - |  | 894,520
Liabilities |  |  |  |  |  |  |  |  |  |  |
Amortized cost |  |  |  |  |  |  |  |  |  |  |
Trade accounts payable | - |  | - |  | - |  | - |  | (5,839,838) |  | (5,839,838)
Supply chain finance | - |  | - |  | - |  | - |  | (1,335,582) |  | (1,335,582)
Loans and financing |  |  |  |  |  |  |  |  |  |  |
Local currency | - |  | - |  | - |  | - |  | (8,643,655) |  | (8,643,655)
Foreign currency | - |  | - |  | - |  | - |  | (10,318,725) |  | (10,318,725)
Capital lease payable | - |  | - |  | - |  | - |  | (216,823) |  | (216,823)
| 9,862,437 |  | 623,275 |  | 361,385 |  | 811,161 |  | (26,354,623) |  | (14,696,365)

4.5. Determination of the fair value of financial instruments

The Company discloses its financial assets and liabilities at fair value, based on the appropriate accounting pronouncements, which refers to concepts of valuation and disclosure requirements.

Particularly related to the disclosure, the Company applies the hierarchy requirements set out in CVM Deliberation 699/12, which involves the following aspects:

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· The fair value is the price that an asset could be exchanged and a liability could be settled, between knowledgeable willing parties in an arm’s length transaction; and

· Hierarchy on 3 levels for measurement of the fair value, according to observable inputs for the valuation of an asset or liability on the date of its measurement.

The valuation established on 3 levels of hierarchy for measurement of the fair value is based on observable and non-observable inputs. Observable inputs reflect market data obtained from independent sources, while non-observable inputs reflect the Company’s valuation technics. These 2 types of inputs create the hierarchy of fair value set forth below:

· Level 1 – Prices quoted (unadjusted) for identical instruments in active markets. Investments in credit linked notes, Brazilian foreign debt securities, Financial Treasury Bills (“LFT”) and stocks are classified at level 1 of the fair value hierarchy;

· Level 2 – Prices quoted in active markets for similar instruments, prices quoted for identical or similar instruments in non-active markets and evaluation models for which inputs are observable. Investments in Bank Deposit Certificates (“CDB”) are classified at level 2, since the determination of fair value is based on the price quotation of similar financial instruments in non-active markets. Readily observable market inputs are used, such as interest rate forecasts, volatility factors and foreign currency rates.

· Level 3 – Instruments whose significant inputs are non-observable. The Company does not have financial instruments in this level.

The table below presents the overall classification of financial assets and liabilities according to the valuation hierarchy. For the three-month period ended on March 31, 2017, there were no changes between the 3 levels of hierarchy.

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| Parent company
| 03.31.17
| Level 1 |  | Level 2 |  | Level 3 |  | Total
Assets |  |  |  |  |  |  |
Financial assets |  |  |  |  |  |  |
Available for sale |  |  |  |  |  |  |
Stocks | 253,760 |  | - |  | - |  | 253,760
Held for trading |  |  |  |  |  |  |
Bank deposit certificates | - |  | 49,642 |  | - |  | 49,642
Financial treasury bills | 160,195 |  | - |  | - |  | 160,195
Other financial assets |  |  |  |  |  |  |
Derivatives designated as hedge accounting | - |  | 194,630 |  | - |  | 194,630
Derivatives not designated as hedge accounting | - |  | 4,940 |  | - |  | 4,940
| 413,955 |  | 249,212 |  | - |  | 663,167
Liabilities |  |  |  |  |  |  |
Financial liabilities |  |  |  |  |  |  |
Other financial liabilities |  |  |  |  |  |  |
Derivatives designated as hedge accounting | - |  | (165,108) |  | - |  | (165,108)
Derivatives not designated as hedge accounting | - |  | (175,113) |  | - |  | (175,113)
| - |  | (340,221) |  | - |  | (340,221)
| Parent company
| 12.31.16
| Level 1 |  | Level 2 |  | Level 3 |  | Total
Assets |  |  |  |  |  |  |
Financial assets |  |  |  |  |  |  |
Stocks | 329,876 |  | - |  | - |  | 329,876
Held for trading |  |  |  |  |  |  |
Bank deposit certificates | - |  | 48,425 |  | - |  | 48,425
Financial treasury bills | 180,544 |  | - |  | - |  | 180,544
Other financial assets |  |  |  |  |  |  |
Derivatives designated as hedge accounting | - |  | 197,477 |  | - |  | 197,477
Derivatives not designated as hedge accounting | - |  | 438 |  | - |  | 438
| 510,420 |  | 246,340 |  | - |  | 756,760
Liabilities |  |  |  |  |  |  |
Financial liabilities |  |  |  |  |  |  |
Other financial liabilities |  |  |  |  |  |  |
Derivatives designated as hedge accounting | - |  | (200,460) |  | - |  | (200,460)
Derivatives not designated as hedge accounting | - |  | (306,252) |  | - |  | (306,252)
| - |  | (506,712) |  | - |  | (506,712)

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| Consolidated
| 03.31.17
| Level 1 |  | Level 2 |  | Level 3 |  | Total
Assets |  |  |  |  |  |  |
Financial assets |  |  |  |  |  |  |
Available for sale |  |  |  |  |  |  |
Credit linked notes | 108,887 |  | - |  | - |  | 108,887
Brazilian foreign debt securities | 34,347 |  | - |  | - |  | 34,347
Stocks | 313,272 |  | - |  | - |  | 313,272
Held for trading |  |  |  |  |  |  |
Bank deposit certificates | - |  | 50,857 |  | - |  | 50,857
Financial treasury bills | 160,195 |  | - |  | - |  | 160,195
Investment funds | 63,392 |  | - |  | - |  | 63,392
Other financial assets |  |  |  |  |  |  |
Derivatives designed as hedge accounting | - |  | 194,991 |  | - |  | 194,991
Derivatives not designated as hedge accounting | - |  | 4,940 |  | - |  | 4,940
| 680,093 |  | 250,788 |  | - |  | 930,881
Liabilities |  |  |  |  |  |  |
Financial liabilities |  |  |  |  |  |  |
Other financial liabilities |  |  |  |  |  |  |
Derivatives designed as hedge accounting | - |  | (180,908) |  | - |  | (180,908)
Derivatives not designated as hedge accounting | - |  | (195,412) |  | - |  | (195,412)
| - |  | (376,320) |  | - |  | (376,320)

| Consolidated
| 12.31.16
| Level 1 |  | Level 2 |  | Level 3 |  | Total
Assets |  |  |  |  |  |  |
Financial assets |  |  |  |  |  |  |
Available for sale |  |  |  |  |  |  |
Credit linked notes | 187,384 |  | - |  | - |  | 187,384
Brazilian foreign debt securities | 56,416 |  | - |  | - |  | 56,416
Stocks | 379,475 |  | - |  | - |  | 379,475
Held for trading |  |  |  |  |  |  |
Bank deposit certificates | - |  | 48,425 |  | - |  | 48,425
Financial treasury bills | 180,544 |  | - |  | - |  | 180,544
Investment funds | 42,276 |  | - |  | - |  | 42,276
Other financial assets |  |  |  |  |  |  |
Derivatives designed as hedge accounting | - |  | 197,520 |  | - |  | 197,520
Derivatives not designated as hedge accounting | - |  | 495 |  | - |  | 495
| 846,095 |  | 246,440 |  | - |  | 1,092,535
Liabilities |  |  |  |  |  |  |
Financial liabilities |  |  |  |  |  |  |
Other financial liabilities |  |  |  |  |  |  |
Derivatives designed as hedge accounting | - |  | (222,794) |  | - |  | (222,794)
Derivatives not designated as hedge accounting | - |  | (306,777) |  | - |  | (306,777)
| - |  | (529,571) |  | - |  | (529,571)

4.6. Comparison between book value and fair value of financial instruments

Except for the items presented below, the book value of all other financial instruments approximate fair value. The fair value of financial instruments presented below was based in prices observed in active markets, level 1 of the hierarchy for fair value measurement.

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| Parent company and Consolidated
|  |  | 03.31.17 |  | 12.31.16
| Maturity |  | Book value |  | Fair value |  | Book value |  | Fair value
BRF bonds |  |  |  |  |  |  |  |  |
BRF SA BRFSBZ5 | 2022 |  | (358,712) |  | (394,985) |  | (364,006) |  | (415,115)
BRF SA BRFSBZ4 | 2024 |  | - |  | - |  | (2,424,133) |  | (2,404,442)
BRF SA BRFSBZ3 | 2023 |  | (1,540,604) |  | (1,507,767) |  | (1,568,079) |  | (1,567,412)
BRF SA BRFSBZ7 | 2018 |  | (512,702) |  | (492,166) |  | (502,933) |  | (475,868)
BRF SA BRFSBZ2 | 2022 |  | (1,716,637) |  | (1,729,704) |  | (1,729,142) |  | (1,795,814)
Parent company |  |  | (4,128,655) |  | (4,124,622) |  | (6,588,293) |  | (6,658,651)
BFF bonds |  |  |  |  |  |  |  |  |
Sadia Overseas BRFSBZ7 | 2020 |  | (274,288) |  | (289,866) |  | (287,211) |  | (308,745)
Sadia bonds |  |  |  |  |  |  |  |  |
Sadia Overseas BRFSBZ6 | 2017 |  | (365,866) |  | (368,011) |  | (370,023) |  | (376,702)
Bonds BRF - SHB |  |  |  |  |  |  |  |  |
BRF SA BRFSBZ4 | 2024 |  | (2,384,673) |  | (2,336,232) |  | - |  | -
Bonds BRF Gmbh |  |  |  |  |  |  |  |  |
BRF SA BRFSBZ4 | 2026 |  | (1,544,329) |  | (1,459,119) |  | (1,606,615) |  | (1,538,817)
Quickfood bonds |  |  |  |  |  |  |  |  |
Quickfood | 2019 |  | (131,718) |  | (131,718) |  | (144,453) |  | (144,453)
Consolidated |  |  | (8,829,529) |  | (8,709,568) |  | (8,996,595) |  | (9,027,368)

4.7. Table of sensitivity analysis

In preparation of the sensitivity analysis, Management considered the derivative financial instruments used to mitigate the currency risk and commodities as relevant risks and could impact the Company's results. Currently, Management believes that fluctuations in interest rates do not significantly affect its financial results, since have opted for fixing through derivative financial instruments (interest rate swap), a considerable part of its post fixed debt.

The table below presents the possible impacts of derivative and non-derivative financial instruments considering scenarios of appreciation and depreciation of the main traded currencies by the Company with respect to its functional currency (Brazilian Real) and changes in corn prices on the Chicago Board of Trade (“CBOT”). The amount of exports utilized corresponds to notional value of derivative financial instruments entered into in order to hedge highly probable transaction.

Quantitative and qualitative information used in preparing these analyzes are based on the position for the period ended March 31, 2017. Future results to be measured may differ significantly from those estimates amounts, if the reality becomes different from the assumptions used.

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|  |  |  | 3.1684 |  | 2.8516 |  | 2.3763 |  | 3.9605 |  | 4.7526
Parity - Brazilian Reais x U.S. Dollar |  |  |  | Current |  | Scenario I |  | Scenario II |  | Scenario III |  | Scenario IV
Transaction/Instrument |  | Risk |  | Scenario |  | 10% appreciation |  | 25% appreciation |  | 25% devaluation |  | 50% devaluation
Designated as hedge accouting |  |  |  |  |  |  |  |  |  |  |  |
Non-deliverable forward |  | Devaluation of R$ |  | 36,406 |  | 123,143 |  | 253,249 |  | (180,436) |  | (397,278)
Options - currencies |  | Devaluation of R$ |  | 50,953 |  | 341,458 |  | 777,214 |  | 62,429 |  | 749,086
Export prepayments |  | Devaluation of R$ |  | (390,286) |  | (300,515) |  | (165,858) |  | (614,714) |  | (839,142)
Bonds |  | Devaluation of R$ |  | (305,572) |  | (220,449) |  | (92,765) |  | (518,379) |  | (731,187)
Swaps |  | Devaluation of R$ |  | (140,601) |  | (101,541) |  | (42,951) |  | (238,251) |  | (335,901)
Exports |  | Appreciation of R$ |  | 50,389 |  | (358,537) |  | (971,925) |  | 334,965 |  | (55,640)
Not designated as hedge accouting |  |  |  |  |  |  |  |  |  |  |  |
NDF - Purchase |  | Appreciation of R$ |  | (14,160) |  | (229,611) |  | (552,788) |  | 524,469 |  | 1,063,097
Future purchase - BM&FBOVESPA |  | Appreciation of R$ |  | - |  | 33,268 |  | 83,171 |  | (83,171) |  | (166,341)
Net effect |  |  |  | (712,871) |  | (712,784) |  | (712,653) |  | (713,088) |  | (713,306)
Shareholders' equity |  |  |  | (836,459) |  | (622,505) |  | (301,574) |  | (1,371,344) |  | (1,906,230)
Statement of income |  |  |  | 123,588 |  | (90,279) |  | (411,079) |  | 658,256 |  | 1,192,924
|  |  |  | 3.3896 |  | 3.0506 |  | 2.5422 |  | 4.2370 |  | 5.0844
Parity - Brazilian Reais x Euro |  |  |  | Current |  | Scenario I |  | Scenario II |  | Scenario III |  | Scenario IV
Transaction/Instrument |  | Risk |  | Scenario |  | 10% appreciation |  | 25% appreciation |  | 25% devaluation |  | 50% devaluation
Designated as hedge accouting |  |  |  |  |  |  |  |  |  |  |  |
Non-deliverable forward |  | Devaluation of R$ |  | 51,440 |  | 81,946 |  | 127,706 |  | (24,826) |  | (101,092)
Currency options |  | Devaluation of R$ |  | 6,912 |  | 17,081 |  | 32,334 |  | - |  | 14,857
Exports |  | Appreciation of R$ |  | (58,352) |  | (99,027) |  | (160,040) |  | 24,826 |  | 86,235
Not designated as hedge accouting |  |  |  |  |  |  |  |  |  |  |  |
Non-deliverable forward |  | Devaluation of R$ |  | (23,657) |  | (166,018) |  | (379,560) |  | 332,246 |  | 688,150
Net effect |  |  |  | (23,657) |  | (166,018) |  | (379,560) |  | 332,246 |  | 688,150
Shareholders' equity |  |  |  | - |  | - |  | - |  | - |  | -
Statement of income |  |  |  | (23,657) |  | (166,018) |  | (379,560) |  | 332,246 |  | 688,150
|  |  |  | 3.9729 |  | 3.5756 |  | 2.9797 |  | 4.9661 |  | 5.9594
Parity - Brazilian Reais x GBP |  |  |  | Current |  | Scenario I |  | Scenario II |  | Scenario III |  | Scenario IV
Transaction/Instrument |  | Risk |  | Scenario |  | 10% appreciation |  | 25% appreciation |  | 25% devaluation |  | 50% devaluation
Non-deliverable forward |  | Devaluation of R$ |  | 5,731 |  | 25,198 |  | 54,399 |  | (42,937) |  | (91,605)
Exports |  | Appreciation of R$ |  | (5,731) |  | (25,198) |  | (54,399) |  | 42,937 |  | 91,605
Net effect |  |  |  | - |  | - |  | - |  | - |  | -
|  |  |  | 147.14 |  | 132.42 |  | 110.35 |  | 183.92 |  | 220.70
Price parity CBOT - US$/Ton |  |  |  | Current |  | Scenario I |  | Scenario II |  | Scenario III |  | Scenario IV
Transaction/Instrument |  | Risk |  | Scenario |  | Decrease 10% |  | Decrease 25% |  | Increase 25% |  | Increase 50%
Designated as hedge accounting |  |  |  |  |  |  |  |  |  |  |  |
Non-deliverable forward |  | Increase in the price of corn |  | 4,251 |  | 38,683 |  | 90,331 |  | (81,828) |  | (167,908)
Net effect |  |  |  | 4,251 |  | 38,683 |  | 90,331 |  | (81,828) |  | (167,908)
Shareholders' equity |  |  |  | 4,251 |  | 38,683 |  | 90,331 |  | (81,828) |  | (167,908)
Statement of income |  |  |  | - |  | - |  | - |  | - |  | -

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5. SEGMENT INFORMATION

The operating segments are reported consistently with the management reports provided to the Board of Directors and Directors for assessing the performance of each segment and allocating resources.

As disclosed in note 1, in order to reflect the management structure changes the segment information of 2017 and 2016 were prepared considering the seven observable segments, as follows: Brazil, Latin America (“LATAM”), Europe, Middle East and North Africa (“One Foods”), Africa, Asia and Other Segments, which primarily observe our geographical structure.

These segments include sales of all distribution channels and operations are subdivided according to the nature of the products whose characteristics are described below:

· Poultry: involves the production and sale of whole poultry and in-natura cuts.

· Pork and other: involves the production and sale of in-natura cuts.

· Processed: involves the production and sale of processed foods, frozen and processed products derived from poultry, pork and beef, margarine, vegetable and soybean-based products.

· Other sales: involves the commercialization of flour for food service and others.

Other segments include sale of in-natura beef cuts, agricultural products and animal feed.

The net sales for each reportable operating segment are presented below:

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|  | Consolidated
Net sales |  | 03.31.17 |  | 03.31.16
Brazil |  |  |  |
In-natura |  | 853,931 |  | 790,586
Poultry |  | 663,288 |  | 612,075
Pork and other |  | 190,643 |  | 178,511
Processed |  | 2,795,466 |  | 2,728,716
Other sales |  | 4,283 |  | 21,353
|  | 3,653,680 |  | 3,540,655
Europe |  |  |  |
In-natura |  | 370,427 |  | 415,264
Poultry |  | 159,490 |  | 235,434
Pork and other |  | 210,937 |  | 179,830
Processed |  | 557,967 |  | 542,633
Other sales |  | 203 |  | -
|  | 928,597 |  | 957,897
One Foods |  |  |  |
In-natura |  | 1,154,673 |  | 1,418,927
Poultry |  | 1,143,421 |  | 1,408,961
Other |  | 11,252 |  | 9,966
Processed |  | 161,703 |  | 164,820
|  | 1,316,376 |  | 1,583,747
Africa |  |  |  |
In-natura |  | 108,782 |  | 139,809
Poultry |  | 88,883 |  | 113,264
Pork and other |  | 19,899 |  | 26,545
Processed |  | 34,070 |  | 36,277
|  | 142,852 |  | 176,086
Asia |  |  |  |
In-natura |  | 822,303 |  | 931,471
Poultry |  | 702,639 |  | 797,697
Pork and other |  | 119,664 |  | 133,774
Processed |  | 68,250 |  | 106,991
Other sales |  | 52,346 |  | 32,705
|  | 942,899 |  | 1,071,167
LATAM |  |  |  |
In-natura |  | 177,751 |  | 155,462
Poultry |  | 134,673 |  | 134,184
Pork and other |  | 43,078 |  | 21,278
Processed |  | 344,172 |  | 280,295
Other sales |  | 5,615 |  | 1,975
|  | 527,538 |  | 437,732
Other segments |  | 297,507 |  | 353,046
|  | 7,809,449 |  | 8,120,330

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The operating income for each reportable operating segment is presented below:

|  | Consolidated
|  | 03.31.17 |  | 03.31.16
Brazil |  | 330,613 |  | 334,207
Europe |  | (48,879) |  | 46,794
One Foods |  | (44,116) |  | 123,144
Africa |  | (27,890) |  | 12,286
Asia |  | 44,006 |  | 109,269
LATAM |  | 1,613 |  | 16,959
Other segments |  | (41,172) |  | 28,494
Sub total |  | 214,175 |  | 671,153
Corporate |  | (145,974) |  | (16,125)
|  | 68,201 |  | 655,028

The Corporate line presented above refers to extraordinary events not attributable to the operating segments, which are recognized as other operating income (expense). For the three-month period ended March 31, 2017, the main events were: R$56,134 contingencies, R$39,808 extraordinary expenses – weak flesh operation and R$35,320 Price adjustment in the transaction with Lactalis due to the sale of the dairy segment. For the three-month period ended March 31, 2016, the main events were tax contingencies.

No customer was individually or in aggregate responsible for more than 5% of net sales for the years ended March 31, 2017 and 2016.

The goodwill and intangible assets with indefinite useful life (trademarks) arising from business combination were allocated to the reportable operating segments, considering the nature of the products manufactured in each segment (cash-generating unit), as presented below:

| Consolidated
| Goodwill |  | Trademarks |  | Total
| 03.31.17 |  | 12.31.16 |  | 03.31.17 |  | 12.31.16 |  | 03.31.17 |  | 12.31.16
Brazil | 1,151,498 |  | 1,151,498 |  | 982,478 |  | 982,478 |  | 2,133,976 |  | 2,133,976
Europe | 702,043 |  | 652,989 |  | 20,138 |  | 20,139 |  | 722,181 |  | 673,128
One Foods (1) | 1,040,885 |  | 1,224,970 |  | 170,407 |  | 170,407 |  | 1,211,292 |  | 1,395,377
Asia | 671,412 |  | 594,046 |  | 3,871 |  | 4,553 |  | 675,283 |  | 598,599
LATAM | 721,366 |  | 720,047 |  | 135,212 |  | 135,617 |  | 856,578 |  | 855,664
| 4,287,204 |  | 4,343,550 |  | 1,312,106 |  | 1,313,194 |  | 5,599,310 |  | 5,656,744

(1) Goodwill arising from the future profitability expectation allocated to the reportable operating segment One Foods was reduced due to the deduction of deferred income tax, from the sale of BRF AFC and Federal Foods LLC by BRF GmbH (located in Austria) to One Foods Holdings (located in the United Arab Emirates). This deferred income tax deduction arises from the fact that the income tax rate in the United Arab Emirates is zero.

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Information referring to the total assets by reportable segments is not being disclosed, as it is not included in the set of information made available to the Company’s Management, which take investment decisions and determine allocation of assets on a consolidated basis.

6. CASH AND CASH EQUIVALENTS

| Average rate (p.a.) |  | Parent company |  | Consolidated
|  | 03.31.17 |  | 12.31.16 |  | 03.31.17 |  | 12.31.16
Cash and bank accounts |  |  |  |  |  |  |  |  |
U.S. Dollar | - |  | 4,507 |  | 4,708 |  | 562,372 |  | 680,132
Brazilian Reais | - |  | 93,443 |  | 46,077 |  | 97,592 |  | 46,375
Euro | - |  | 5,382 |  | 5,337 |  | 307,797 |  | 274,348
Other currencies | - |  | 2,800 |  | 10,960 |  | 828,880 |  | 729,562
|  |  | 106,132 |  | 67,082 |  | 1,796,641 |  | 1,730,417
Cash equivalents |  |  |  |  |  |  |  |  |
In Brazilian Reais |  |  |  |  |  |  |  |  |
Investment funds | 12.76% |  | 19,598 |  | 26,919 |  | 19,598 |  | 26,919
Savings account | 4.85% |  | 315 |  | 4,789 |  | 315 |  | 4,789
Bank deposit certificates | 11.54% |  | 3,398,918 |  | 3,746,146 |  | 3,516,184 |  | 3,830,200
|  |  | 3,418,831 |  | 3,777,854 |  | 3,536,097 |  | 3,861,908
In U.S. Dollar |  |  |  |  |  |  |  |  |
Term deposit | 2.13% |  | - |  | - |  | 159,291 |  | 327,010
Overnight | 0.52% |  | 15,640 |  | 11,569 |  | 803,852 |  | 421,481
Other currencies |  |  |  |  |  |  |  |  |
Term deposit | 5.30% |  | - |  | - |  | 11,136 |  | 16,103
|  |  | 15,640 |  | 11,569 |  | 974,279 |  | 764,594
|  |  | 3,540,603 |  | 3,856,505 |  | 6,307,017 |  | 6,356,919

7. MARKETABLE SECURITIES

|  |  |  |  | Average interest rate (p.a.) |  | Parent company |  | Consolidated
| WATM (1) |  | Currency |  |  | 03.31.17 |  | 12.31.16 |  | 03.31.17 |  | 12.31.16
Available for sale |  |  |  |  |  |  |  |  |  |  |  |  |
Credit linked note (a) | 1.15 |  | US$ |  | 3.39% |  | - |  | - |  | 108,887 |  | 187,384
Public securities (b) | 1.70 |  | US$ |  | 3.29% |  | - |  | - |  | 34,347 |  | 56,416
Stocks (c) | - |  | HKD and R$ |  | - |  | 253,760 |  | 329,876 |  | 313,272 |  | 379,475
|  |  |  |  |  |  | 253,760 |  | 329,876 |  | 456,506 |  | 623,275
Held for trading |  |  |  |  |  |  |  |  |  |  |  |  |
Bank deposit certificates ("CDB") (d) | 4.05 |  | R$ |  | 11.69% |  | 49,642 |  | 48,425 |  | 50,857 |  | 48,425
Financial treasury bills (e) | 2.42 |  | R$ |  | 12.15% |  | 160,195 |  | 180,544 |  | 160,195 |  | 180,544
Investment funds (f) | 0.80 |  | ARS |  | 19.97% |  | - |  | - |  | 63,392 |  | 42,276
|  |  |  |  |  |  | 209,837 |  | 228,969 |  | 274,444 |  | 271,245
Held to maturity |  |  |  |  |  |  |  |  |  |  |  |  |
Sovereign bonds and others (e) | 0.88 |  | AOA and R$ |  | 6.23% to 12.15% |  | 82,637 |  | 80,200 |  | 252,675 |  | 255,493
|  |  |  |  |  |  | 546,234 |  | 639,045 |  | 983,625 |  | 1,150,013
Current |  |  |  |  |  |  | 292,474 |  | 309,169 |  | 526,227 |  | 622,285
Non-current (2) |  |  |  |  |  |  | 253,760 |  | 329,876 |  | 457,398 |  | 527,728

(1) Weighted average maturity in years.

(2) Maturity within up to July 26, 2018

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(a) The credit linked note is a structured operation with a first-class financial institution that bears periodic interest (LIBOR + spread) and corresponds to a credit note that contemplates the Company’s risk.

(b) Brazilian foreign debt securities are denominated in U.S. Dollars and remunerated at pre and post-fixed rates.

(c) The stock balance comprises the market value of 26,000,000 (27,150,300 on December 31, 2016) stocks from Minerva ticker BEEF3 and market value of R$9.76 to each stock on March 31, 2017 (R$12.15 to each stock on December 31, 2016) and 77,583,000 (77,583,000 on December 31, 2016) stocks of Cofco Meat ticker 1610 and market value of HKD1.88 to each stock on March 31, 2017 (R$1.52 to each stock on December 31, 2016).

(d) Bank Deposit Certificate (“CDB”) investments are denominated in Brazilian Reais and remunerated at rates varying from 72% to 102% of the Interbank Deposit Certificate (“CDI”).

(e) Comprise for Financial Treasury Bills (“LFT”) are remunerated at the rate of the Special System for Settlement and Custody (“SELIC”) and securities of the Angola Government denominated in Kwansas.

(f) The fund in foreign currency is basically represented of public and private securities.

There were no changes in the characteristics of the marketable securities disclosed above as compared to the information disclosed in the financial statements for the year ended December 31, 2016 (note 8).

The unrealized loss from the change in fair value of the available for sale securities, recorded in other comprehensive income, corresponds to an accumulated loss of R$60,129 net of income tax of R$29,665 as of March 31, 2017 (loss of R$25,998 net of income tax of R$11,513 as of December 31, 2016).

Additionally, on March 31, 2017, of the total of marketable securities, R$51,189 (R$74,088 as of December 31, 2016) were pledged as collateral (without restriction for use) for operations with future contracts denominated in U.S. Dollars and future contracts of corn, traded on the Futures and Commodities Exchange (“BM&FBOVESPA”).

The Company has also restricted cash of R$574,505 in the parent company and R$657,073 in the consolidated on March 31, 2017 (R$555,667 in the parent company and R$645,808 in the consolidated on December 31, 2016) (note15).

Marketable securities non-current balance as of March 31, 2017 matures in 2018.

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The Company conducted an analysis of sensitivity to foreign exchange rate (note 4.7).

8. TRADE ACCOUNTS RECEIVABLE, NET AND OTHER RECEIVABLES

| Parent company |  | Consolidated
| 03.31.17 |  | 12.31.16 |  | 03.31.17 |  | 12.31.16
Trade accounts receivable, net |  |  |  |  |  |  |
Domestic customers | 1,167,252 |  | 1,308,066 |  | 1,173,340 |  | 1,308,066
Domestic related parties | 405,231 |  | 1,098 |  | 1,106 |  | 1,098
Foreign customers | 395,604 |  | 391,256 |  | 2,264,488 |  | 2,144,712
Foreign related parties | 5,627,259 |  | 7,108,387 |  | 131,679 |  | 64,681
| 7,595,346 |  | 8,808,807 |  | 3,570,613 |  | 3,518,557
( - ) Adjustment to present value | (9,285) |  | (11,577) |  | (12,047) |  | (16,253)
( - ) Allowance for doubtful accounts | (382,055) |  | (387,996) |  | (400,627) |  | (406,456)
| 7,204,006 |  | 8,409,234 |  | 3,157,939 |  | 3,095,848
Current | 7,193,254 |  | 8,398,647 |  | 3,147,180 |  | 3,085,147
Non-current | 10,752 |  | 10,587 |  | 10,759 |  | 10,701
Credit notes | 336,632 |  | 367,473 |  | 337,271 |  | 367,961
( - ) Adjustment to present value | (173) |  | (230) |  | (173) |  | (230)
( - ) Allowance for doubtful accounts | (31,551) |  | (32,225) |  | (31,551) |  | (32,225)
| 304,908 |  | 335,018 |  | 305,547 |  | 335,506
Current | 168,321 |  | 148,981 |  | 168,329 |  | 148,982
Non-current (1) | 136,587 |  | 186,037 |  | 137,218 |  | 186,524

(1) Weighted average maturity of 3.43 years.

Of the foreign related parties balance recorded in the parent company, is tied to Agribusiness Receivable Certificate ("CRA") operation, as disclosed in Note 20.2.

03.31.17
Operation |  | Date |  | Maturity |  | Average rate |  | Principal value |  | Updated Value
CRA 2018 - 1th Issue |  | 09.29.2015 |  | 10.01.2018 |  | 96.9% CDI |  | 1,000,000 |  | 996,454
CRA 2019 - 2sd Issue |  | 04.19.2016 |  | 04.19.2019 |  | 96.5% CDI |  | 1,000,000 |  | 1,016,565
CRA 2020 - 3th Issue |  | 12.16.2016 |  | 12.16.2020 |  | 96.0% CDI |  | 780,000 |  | 806,623
CRA 2023 - 3th Issue |  | 12.16.2016 |  | 12.18.2023 |  | IPCA + 5.90% |  | 720,000 |  | 714,788
|  |  |  |  |  |  |  | 3,500,000 |  | 3,534,430

On March 31, 2017 notes receivable are comprised mainly by receivables from the (i) sale of assets located in the City of Ana Rech (State of Rio Grande do Sul) to JBS, of R$40,420 and (ii) disposal of various other assets and farms, R$250,945.

The trade accounts receivable from related parties by the parent company are disclosed in note 29. The consolidated balances, refers to transaction with associates UP!, in domestic market and with joint ventures SATS BRF, in foreign market.

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The rollforward of allowance for doubtful accounts is presented below:

| Parent company |  | Consolidated
| 03.31.17 |  | 12.31.16 |  | 03.31.17 |  | 12.31.16
Beginning balance | (387,996) |  | (412,106) |  | (406,456) |  | (431,955)
Additions | (28,021) |  | (143,559) |  | (36,191) |  | (199,155)
Business combination | - |  | - |  | - |  | (10,571)
Reversals | 14,752 |  | 87,193 |  | 22,414 |  | 148,583
Write-offs | 11,701 |  | 30,637 |  | 11,701 |  | 30,657
Exchange rate variation | 7,509 |  | 49,839 |  | 7,905 |  | 55,985
Ending balance | (382,055) |  | (387,996) |  | (400,627) |  | (406,456)

The aging of trade accounts receivable is as follows:

| Parent company |  | Consolidated
| 03.31.17 |  | 12.31.16 |  | 03.31.17 |  | 12.31.16
Current | 7,171,805 |  | 8,380,049 |  | 2,629,825 |  | 2,389,900
Overdue |  |  |  |  |  |  |
01 to 60 days | 34,412 |  | 34,080 |  | 490,074 |  | 393,770
61 to 90 days | 7,503 |  | 8,701 |  | 32,140 |  | 41,958
91 to 120 days | 6,481 |  | 4,177 |  | 15,496 |  | 25,311
121 to 180 days | 10,546 |  | 8,182 |  | 30,381 |  | 72,312
181 to 360 days | 22,118 |  | 29,010 |  | 25,498 |  | 157,164
More than 361 days | 342,481 |  | 344,608 |  | 347,199 |  | 438,142
( - ) Adjustment to present value | (9,285) |  | (11,577) |  | (12,047) |  | (16,253)
( - ) Allowance for doubtful accounts | (382,055) |  | (387,996) |  | (400,627) |  | (406,456)
| 7,204,006 |  | 8,409,234 |  | 3,157,939 |  | 3,095,848

9. INVENTORIES

| Parent company |  | Consolidated
| 03.31.17 |  | 12.31.16 |  | 03.31.17 |  | 12.31.16
Finished goods | 1,412,532 |  | 1,551,119 |  | 3,420,968 |  | 3,207,877
Work in process | 135,726 |  | 147,231 |  | 204,011 |  | 172,765
Raw materials | 651,308 |  | 809,496 |  | 795,509 |  | 900,799
Packaging materials | 53,909 |  | 50,852 |  | 87,967 |  | 76,840
Secondary materials | 205,201 |  | 234,941 |  | 254,876 |  | 265,348
Warehouse | 131,621 |  | 144,731 |  | 225,435 |  | 205,692
Goods in transit | 8,191 |  | - |  | - |  | -
Imports in transit | 56,590 |  | 75,548 |  | 97,187 |  | 113,002
Other | 2,363 |  | 6,706 |  | 3,820 |  | 6,850
(-) Provision for adjustment to realizable value | (39,906) |  | (35,409) |  | (103,027) |  | (93,530)
(-) Provision for deterioration | (14,490) |  | (10,629) |  | (30,500) |  | (26,211)
(-) Provision for obsolescense | (5,911) |  | (6,920) |  | (6,500) |  | (7,649)
(-) Adjustment to present value | (23,055) |  | (29,098) |  | (30,568) |  | (30,143)
| 2,574,079 |  | 2,938,568 |  | 4,919,178 |  | 4,791,640

The write-offs of products sold from inventories to cost of sales during three-month period ended March 31, 2017 totaled R$5,416,212 in the parent company and R$6,359,940 in the consolidated (R$5,161,845 in the parent company and R$6,089,605 in the consolidated on December 31, 2016). Such amounts include the additions and reversals of inventory provisions presented in the table below:

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(CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) ITR – Quarterly Information – March 31, 2017 – BRF S.A. Explanatory Notes (in thousands of Brazilian Reais) |

| Parent company
| Provision for adjustment to realizable value |  | Provision for deterioration |  | Provision for obsolescence |  | Total
|  |  |  |  |  |  | 03.31.17
Beginning balance | (35,409) |  | (10,629) |  | (6,920) |  | (52,958)
Additions | (26,147) |  | (9,766) |  | (61) |  | (35,974)
Reversals | 21,650 |  | - |  | - |  | 21,650
Write-offs | - |  | 5,905 |  | 1,070 |  | 6,975
Ending balance | (39,906) |  | (14,490) |  | (5,911) |  | (60,307)

| Consolidated
| Provision for adjustment to realizable value |  | Provision for deterioration |  | Provision for obsolescence |  | Total
|  |  |  |  |  |  | 03.31.17
Beginning balance | (93,530) |  | (26,211) |  | (7,649) |  | (127,390)
Additions | (55,845) |  | (26,262) |  | (1,287) |  | (83,394)
Reversals | 43,984 |  | - |  | - |  | 43,984
Write-offs | - |  | 20,855 |  | 1,756 |  | 22,611
Exchange rate variation | 2,364 |  | 1,118 |  | 680 |  | 4,162
Ending balance | (103,027) |  | (30,500) |  | (6,500) |  | (140,027)

On March 31, 2017 and 2016, there were no inventory items pledged as collateral.

10. BIOLOGICAL ASSETS

The balance of biological assets are segregated in current and non-current assets are presented below:

| Parent company |  | Consolidated
| 03.31.17 |  | 12.31.16 |  | 03.31.17 |  | 12.31.16
Live animals | 1,406,600 |  | 1,617,747 |  | 1,540,889 |  | 1,644,939
Total current | 1,406,600 |  | 1,617,747 |  | 1,540,889 |  | 1,644,939
Live animals | 551,809 |  | 621,586 |  | 657,312 |  | 647,377
Forests | 245,107 |  | 269,968 |  | 272,613 |  | 269,968
Total non-current | 796,916 |  | 891,554 |  | 929,925 |  | 917,345
| 2,203,516 |  | 2,509,301 |  | 2,470,814 |  | 2,562,284

Live animals are represented for poultry and pork and separated into consumable and for production. There were no changes in classification of nature of biological assets as compared to the information disclosed in the financial statements for the year ended December 31, 2016 (note 11).

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The rollforward of biological assets for the year is presented below:

| Parent company
| Current |  | Non-current
| Live animals |  | Total |  | Live animals |  | Forests |  | Total
| Poultry |  | Pork |  |  |  | Poultry |  | Pork |  |  |  |  |
|  |  |  |  | 03.31.17 |  |  |  |  |  |  |  |  | 03.31.17
Beginning balance | 759,852 |  | 857,895 |  | 1,617,747 |  | 328,552 |  | 293,034 |  |  | 269,968 |  | 891,554
Additions/Transfer | 91,730 |  | 436,421 |  | 528,151 |  | 8,880 |  | 45,599 |  |  | 12,789 |  | 67,268
Fair value variation (1) | 145,019 |  | 16,465 |  | 161,484 |  | 1,291 |  | (15,132) |  |  | - |  | (13,841)
Harvest | - |  | - |  | - |  | - |  | - |  |  | (7,820) |  | (7,820)
Write-off | - |  | - |  | - |  | - |  | - |  |  | (2,500) |  | (2,500)
Transfer between current and non-current | 10,666 |  | 22,381 |  | 33,047 |  | (10,666) |  | (22,381) |  |  | - |  | (33,047)
Transfer of the held for sale | - |  | - |  | - |  | - |  | - |  |  | - |  | -
Transfer to inventories | (296,107) |  | (476,609) |  | (772,716) |  | - |  | - |  |  | - |  | -
Transfer SHB (2) | (161,113) |  | - |  | (161,113) |  | (77,368) |  | - |  |  | (27,330) |  | (104,698)
Ending balance | 550,047 |  | 856,553 |  | 1,406,600 |  | 250,689 |  | 301,120 |  |  | 245,107 |  | 796,916

| Consolidated
| Current |  | Non-current
| Live animals |  | Total |  | Live animals |  | Forests |  | Total
| Poultry |  | Pork |  |  |  | Poultry |  | Pork |  |  |  |  |
|  |  |  |  | 03.31.17 |  |  |  |  |  |  |  |  | 03.31.17
Beginning balance | 770,691 |  | 874,248 |  | 1,644,939 |  | 349,102 |  | 298,275 |  |  | 269,968 |  | 917,345
Additions/Transfer | 142,163 |  | 436,421 |  | 578,584 |  | 17,651 |  | 45,599 |  |  | 14,395 |  | 77,645
Business combination | - |  | - |  | - |  | - |  | - |  |  | - |  | -
Fair value variation (1) | 205,236 |  | 30,988 |  | 236,224 |  | (7,998) |  | (15,261) |  |  | - |  | (21,495)
Harvest | - |  | - |  | - |  | - |  | - |  |  | (9,250) |  | (9,250)
Write-off | - |  | - |  | - |  | (1,614) |  | (150) |  |  | (2,500) |  | (4,264)
Transfer between current and non-current | 14,089 |  | 16,197 |  | 30,286 |  | (14,089) |  | (16,197) |  |  | - |  | (30,286)
Transfer of the held for sale | - |  | - |  | - |  | - |  | - |  |  | - |  | -
Transfer to inventories | (451,466) |  | (497,800) |  | (949,266) |  | - |  | - |  |  | - |  | -
Exchange variation | 28 |  | 94 |  | 122 |  | 227 |  | 3 |  |  | - |  | 230
Ending balance | 680,741 |  | 860,148 |  | 1,540,889 |  | 344,893 |  | 312,419 |  |  | 272,613 |  | 929,925

(1) The fair value variation of biological assets includes depreciation of breeding stock in the amount of R$151,510 (R$658,021 as of December 31, 2016) in the parent company and R$180,964 (R$680,912 as of December 31, 2016) in the consolidated.

The quantities and balances per live animal assets are presented below:

| Parent company
| 03.31.17 |  | 12.31.16
| Quantity (thousand of heads) |  | Value |  | Quantity (thousand of heads) |  | Value
Consumable biological assets |  |  |  |  |  |  |
Immature poultry | 114,357 |  | 550,047 |  | 192,328 |  | 759,852
Immature pork | 3,796 |  | 856,553 |  | 3,691 |  | 857,895
Total current | 118,153 |  | 1,406,600 |  | 196,019 |  | 1,617,747
Production biological assets |  |  |  |  |  |  |
Immature poultry | 4,842 |  | 90,434 |  | 6,410 |  | 112,430
Mature poultry | 7,668 |  | 160,255 |  | 11,192 |  | 216,122
Immature pork | 100 |  | 57,260 |  | 193 |  | 58,180
Mature pork | 517 |  | 243,860 |  | 419 |  | 234,854
Total non-current | 13,127 |  | 551,809 |  | 18,214 |  | 621,586
| 131,280 |  | 1,958,409 |  | 214,233 |  | 2,239,333

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| Consolidated
| 03.31.17 |  | 12.31.16
| Quantity (thousand of heads) |  | Value |  | Quantity (thousand of heads) |  | Value
Consumable biological assets |  |  |  |  |  |  |
Immature poultry | 168,877 |  | 680,741 |  | 202,454 |  | 770,691
Immature pork | 3,798 |  | 860,148 |  | 3,788 |  | 874,248
Total current | 172,675 |  | 1,540,889 |  | 206,242 |  | 1,644,939
Production biological assets |  |  |  |  |  |  |
Immature poultry | 6,825 |  | 119,449 |  | 6,735 |  | 119,912
Mature poultry | 11,097 |  | 225,444 |  | 11,670 |  | 229,190
Immature pork | 139 |  | 64,091 |  | 195 |  | 58,934
Mature pork | 525 |  | 248,328 |  | 427 |  | 239,341
Total non-current | 18,586 |  | 657,312 |  | 19,027 |  | 647,377
| 191,261 |  | 2,198,201 |  | 225,269 |  | 2,292,316

11. RECOVERABLE TAXES

| Parent company |  | Consolidated
| 03.31.17 |  | 12.31.16 |  | 03.31.17 |  | 12.31.16
State ICMS ("VAT") | 1,442,647 |  | 1,449,352 |  | 1,611,712 |  | 1,575,071
PIS and COFINS ("Federal Taxes to Social Fund Programs") | 300,884 |  | 325,600 |  | 346,425 |  | 331,616
Income and social contribution tax (IR/CS) | 346,164 |  | 367,267 |  | 418,590 |  | 433,744
IPI ("Federal VAT") | 254,881 |  | 201,256 |  | 261,568 |  | 201,261
INSS ("Brazilian Social Security") | 289,020 |  | 280,305 |  | 289,103 |  | 280,384
Other | 39,928 |  | 46,792 |  | 110,146 |  | 95,912
(-) Provision for losses | (164,408) |  | (159,736) |  | (171,783) |  | (164,611)
| 2,509,116 |  | 2,510,836 |  | 2,865,761 |  | 2,753,377
Current | 945,059 |  | 1,015,610 |  | 1,256,417 |  | 1,234,795
Non-current | 1,564,057 |  | 1,495,226 |  | 1,609,344 |  | 1,518,582

The rollforward of the allowance for losses is presented below:

| Parent company
| State ICMS ("VAT") |  | PIS and COFINS ("Federal Taxes to Social Fund Programs") |  | Income and social contribution tax |  | IPI ("Federal VAT") |  | Other |  | Total
|  |  |  |  |  |  |  |  |  |  | 03.31.17
Beginning balance | (114,292) |  | (19,717) |  | (8,985) |  | (14,740) |  | (2,002) |  | (159,736)
Additions | (3,546) |  | - |  | - |  | - |  | (2,299) |  | (5,845)
Write-offs | 635 |  | - |  | - |  | 538 |  | - |  | 1,173
Ending balance | (117,203) |  | (19,717) |  | (8,985) |  | (14,202) |  | (4,301) |  | (164,408)

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| Consolidated |  |  |  |  |  |  |  |  |  |
| State ICMS ("VAT") | Income and social contribution tax | Other |  | Total
|  |  |  |  |  |  |  |  |  |  | 03.31.17
Beginning balance | (114,293) |  | (19,894) |  | (9,029) |  | (14,740) |  | (6,655) |  | (164,611)
Additions | (6,136) |  | - |  | - |  | - |  | (2,299) |  | (8,435)
Write-offs | 635 |  | - |  | - |  | 538 |  | 98 |  | 1,271
Exchange rate variation | - |  | - |  | - |  | - |  | (8) |  | (8)
Ending balance | (119,794) |  | (19,894) |  | (9,029) |  | (14,202) |  | (8,864) |  | (171,783)

12. ASSETS AND LIABILITIES NON-CURRENT HELD FOR SALE

12.1. Assets non-current held for sale

| Parent company
| 12.31.16 |  | Transfer from property, plant and equipment, net | Disposals |  | 03.31.17
Lands | 15,091 |  | 5,877 | - |  | 20,968
Buildings and improvements | 5,789 |  | 5,237 | - |  | 11,026
Machinery and equipment | 915 |  | 4,746 | - |  | 5,661
Facilities | 1,472 |  | - | - |  | 1,472
Furniture | 96 |  | 68 | - |  | 164
Vehicles and aircraft | 350 |  | 13 | (237) |  | 126
Forests | 258 |  | - | (3) |  | 255
| 23,971 |  | 15,941 | (240) |  | 39,672

| Consolidated
| 12.31.16 |  | Transfer from property, plant and equipment, net | Disposals |  | Exchange rate variation |  | 03.31.17
Lands | 15,093 |  | 5,877 | - |  | - |  | 20,970
Buildings and improvements | 5,789 |  | 5,237 | - |  | - |  | 11,026
Machinery and equipment | 15,714 |  | 4,746 | - |  | (191) |  | 20,269
Facilities | 1,472 |  | - | - |  | - |  | 1,472
Furniture | 102 |  | 68 | - |  | - |  | 170
Vehicles and aircraft | 350 |  | 19 | (237) |  | - |  | 132
Forests | 258 |  | - | (3) |  | - |  | 255
Provision for losses | (12,652) |  | - | - |  | 180 |  | (12,472)
| 26,126 |  | 15,947 | (240) |  | (11) |  | 41,822

Parte inferior do formulário

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13. INCOME AND SOCIAL CONTRIBUTION TAXES

13.1. Deferred income and social contribution taxes

| Parent company |  | Consolidated
| 03.31.17 |  | 12.31.16 |  | 03.31.17 |  | 12.31.16
Assets |  |  |  |  |  |  |
Tax loss carryforwards (corporate income tax) | 940,673 |  | 951,882 |  | 1,314,682 |  | 1,317,295
Negative calculation basis (social contribution tax) | 372,656 |  | 376,394 |  | 372,858 |  | 376,625
Temporary differences |  |  |  |  |  |  |
Provisions for tax, civil and labor risks | 287,187 |  | 264,662 |  | 291,446 |  | 268,163
Suspended collection taxes | 24,429 |  | 22,109 |  | 24,429 |  | 22,109
Allowance for doubtful accounts | 111,555 |  | 106,314 |  | 112,425 |  | 107,183
Provision for property, plant and equipment losses | - |  | - |  | 3,163 |  | 3,163
Provision for losses on tax credits | 51,463 |  | 50,656 |  | 52,947 |  | 51,266
Provision for other obligations | 76,873 |  | 64,788 |  | 79,627 |  | 67,504
Provision for inventory losses | 20,166 |  | 17,647 |  | 23,372 |  | 17,647
Employees' benefits plan | 108,566 |  | 112,231 |  | 115,852 |  | 112,231
Business combination - Sadia (1) | 383,144 |  | 329,010 |  | 298,457 |  | 329,010
Unrealized losses on derivatives financial instruments | 81,326 |  | 133,319 |  | 81,326 |  | 133,319
Unrealized losses on inventories | - |  | - |  | - |  | 2,371
Provision for losses - notes receivables | 13,410 |  | 13,226 |  | 13,420 |  | 13,226
Estimated annual effective tax rate - CPC 21 | 35,007 |  | - |  | 96,328 |  | -
Other temporary differences | 33,936 |  | 64,008 |  | 77,780 |  | 106,451
| 2,540,391 |  | 2,506,246 |  | 2,958,112 |  | 2,927,563
Liabilities |  |  |  |  |  |  |
Temporary differences |  |  |  |  |  |  |
Business combination - Sadia (1) | (626,359) |  | (702,957) |  | (626,359) |  | (702,957)
Business combination - other companies (2) | - |  | - |  | (151,535) |  | (58,234)
Unrealized gains on fair value | (29,338) |  | (78,253) |  | (29,210) |  | (78,253)
Difference between tax basis and accounting basis of goodwill amortization | (162,608) |  | (254,287) |  | (266,166) |  | (254,287)
Difference between tax depreciation rate and accounting depreciation rate (useful life) | (626,025) |  | (694,455) |  | (628,435) |  | (694,455)
Exchange rate variation - cash basis | - |  | - |  | (26,600) |  | -
Other temporary differences | (19,818) |  | (35,994) |  | (20,655) |  | (36,231)
| (1,464,148) |  | (1,765,946) |  | (1,748,960) |  | (1,824,417)
Total net deferred tax assets | 1,076,243 |  | 740,300 |  | 1,209,152 |  | 1,103,146
Business combination - Dánica and Avex | - |  | - |  | (6,473) |  | (6,733)
Business combination - AFC | - |  | - |  | - |  | (34,356)
Business combination - AKF | - |  | - |  | (18,142) |  | (19,050)
Business combination - Federal Foods | - |  | - |  | - |  | (7,562)
Business combination - Invicta | - |  | - |  | (3,615) |  | (39,803)
Other - exchange rate variation | - |  | - |  | (50,638) |  | (48,675)
| - |  | - |  | (78,868) |  | (156,179)
Total deferred tax | 1,076,243 |  | 740,300 |  | 1,130,284 |  | 946,967

(1) The deferred tax asset on the business combination with Sadia is mainly computed on the difference between the goodwill tax basis and goodwill accounting basis identified in the purchase price allocation. Deferred tax liability on business combination with Sadia is substantially represented by the fair value of property, plant and equipment, trademarks and contingent liabilities.

(2) Deferred tax liabilities related to the business combinations with Quickfood (trademarks, customer relationship, Fair value of property, plant and equipment) and AFC (customer relationship).

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Parte inferior do formulário

The rollforward of deferred tax is set forth below:

| Parent company |  | Consolidated
| 03.31.17 |  | 12.31.16 |  | 03.31.17 |  | 12.31.16
Beginning balance | 740,300 |  | 1,248,880 |  | 946,967 |  | 1,067,656
Deferred income and social contribution taxes recognized in the statement of income | 95,092 |  | (244,322) |  | 146,900 |  | 104,093
Deferred income and social contribution taxes recognized in other comprehensive income | (12,656) |  | (264,258) |  | (12,207) |  | (261,560)
Deferred income and social contribution taxes not recognized in the statement of income - (Dropdown SHB) | 253,507 |  | - |  | - |  | -
Business combination | - |  | - |  | (3,732) |  | (20,804)
Exchange rate variation over deferred income and social contribution taxes related to business combination | - |  | - |  | (1,659) |  | 43,997
Other | - |  | - |  | 54,015 |  | 13,585
Ending balance | 1,076,243 |  | 740,300 |  | 1,130,284 |  | 946,967

Certain subsidiaries of the Company located in Brazil have tax loss carryforwards and negative basis of social contribution of R$5,066 and R$5,171, (R$5,047 and R$5,152 as of December 31, 2016), respectively, for which no deferred tax asset was recorded. If there was an expectation that such tax credits would be realized the amount recognized in the balance sheet would be R$1,732 (R$1,725 as of December 31, 2016).

13.2. Estimated time of realization

Deferred tax arising from temporary differences will be realized as these differences are realized. The period of the settlement or realization of such differences is uncertain and is tied to several factors that are not under control of the Management.

When assessing the likelihood of the realization of deferred tax assets on income tax loss carryforward and negative calculation basis of social contribution tax, Management considers the Company’s budget, strategic plan and projected taxable income. Based on this estimate, Management believes that it is more likely than not that the deferred tax will be realized, as shown below:

| Parent company |  | Consolidated
2017 | 133,131 |  | 163,083
2018 | 221,818 |  | 263,150
2019 | 263,801 |  | 324,387
2020 | 285,406 |  | 358,109
2021 | 308,440 |  | 393,260
2022 onwards | 100,733 |  | 185,551
| 1,313,329 |  | 1,687,540

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13.3. Income and social contribution taxes reconciliation

| Parent company |  | Consolidated
| 03.31.17 |  | 03.31.16 |  | 03.31.17 |  | 03.31.16
Income before taxes from continued operations | (342,283) |  | 38,118 |  | (344,344) |  | 50,738
Nominal tax rate | 34% |  | 34% |  | 34% |  | 34%
Credit (expense) at nominal rate | 116,376 |  | (12,960) |  | 117,077 |  | (17,251)
Reconciling itens |  |  |  |  |  |  |
Equity interest in income of subsidiaries, associates and joint venture | (100,511) |  | (23,982) |  | 2,561 |  | 4,128
Exchange rate variation on foreign investments | 2,851 |  | (75,774) |  | 3,034 |  | (90,280)
Difference of tax rates on results of foreign subsidiaries | - |  | - |  | (105,280) |  | (17,356)
Investment grant | 8,960 |  | 8,234 |  | 8,960 |  | 8,234
Estimated annual effective tax rate - CPC 21 | 35,007 |  | 107,420 |  | 35,007 |  | 107,420
Other permanent differences | (1,834) |  | (1,994) |  | (2,749) |  | (4,210)
| 60,849 |  | 944 |  | 58,610 |  | (9,315)
Current income tax | (34,243) |  | (92,462) |  | (88,290) |  | (109,477)
Deferred income tax | 95,092 |  | 93,406 |  | 146,900 |  | 100,162

The taxable income, current and deferred income tax from foreign subsidiaries is presented below:

| Consolidated
| 03.31.17 |  | 03.31.16
Taxable income (loss) from foreign subsidiaries | (430,770) |  | (76,224)
Current income tax credit (expense) from foreign subsidiaries | (12,711) |  | (16,554)
Deferred income tax from foreign subsidiaries | 70,531 |  | 9,679

Company determined that the earnings recorded by the holdings of its wholly-owned subsidiaries located abroad will not be redistributed.

Such resources will be used for investments in the subsidiaries, and thus no deferred income tax was recognized. The total of undistributed earnings corresponds to R$3,055,483 of March 31, 2017 (R$3,317,099 as of December 31, 2016).

Brazilian income taxes are subject to review for a five-year period, during which the tax authorities might audit and assess the Company for additional taxes and penalties. Subsidiaries located abroad are taxed in their respective jurisdictions, according to local regulations.

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14. JUDICIAL DEPOSITS

The rollforward of the judicial deposits is presented below:

| Parent company
| Tax |  | Labor |  | Civil, commercial and other |  | Total
|  |  |  |  |  |  | 03.31.17
Beginning balance | 312,416 |  | 370,056 |  | 42,295 |  | 724,767
Additions | 15,176 |  | 34,352 |  | 552 |  | 50,080
Reversals | (15,632) |  | (14,535) |  | (199) |  | (30,366)
Write-offs | (5,616) |  | (14,810) |  | (3,019) |  | (23,445)
Price index update | 6,454 |  | 4,184 |  | (56) |  | 10,582
Ending balance | 312,798 |  | 379,247 |  | 39,573 |  | 731,618

| Consolidated
| Tax |  | Labor |  | Civil, commercial and other |  | Total
|  |  |  |  |  |  | 03.31.17
Beginning balance | 312,437 |  | 377,440 |  | 42,694 |  | 732,571
Additions | 15,176 |  | 35,273 |  | 552 |  | 51,001
Business combination | - |  | - |  | - |  | -
Reversals | (15,632) |  | (14,594) |  | (199) |  | (30,425)
Write-offs | (5,616) |  | (14,810) |  | (3,019) |  | (23,445)
Price index update | 6,462 |  | 4,184 |  | (57) |  | 10,589
Exchange rate variation | 1 |  | 12 |  | - |  | 13
Ending balance | 312,828 |  | 387,505 |  | 39,971 |  | 740,304

15. RESTRICTED CASH

|  |  |  |  | Average interest rate (p.a.) |  | Parent company |  | Consolidated
| Maturity (1) |  | Currency |  |  | 03.31.17 |  | 12.31.16 |  | 03.31.17 |  | 12.31.16
Bank deposit certificates (2) | 4.31 |  | R$ |  | 11.98% |  | 396,016 |  | 384,331 |  | 396,016 |  | 384,332
National treasury certificates (3) | 2.96 |  | R$ |  | 16.86% |  | 178,489 |  | 171,336 |  | 178,489 |  | 171,336
Bank deposit (4) | - |  | US$ |  | - |  | - |  | - |  | 82,568 |  | 90,140
|  |  |  |  |  |  | 574,505 |  | 555,667 |  | 657,073 |  | 645,808
Current |  |  |  |  |  |  | 132,005 |  | 128,110 |  | 214,573 |  | 218,251
Non-current |  |  |  |  |  |  | 442,500 |  | 427,557 |  | 442,500 |  | 427,557

(1) Weighted average maturity in years.

(2) The deposit was pledged as collateral in the disposal of the dairy segment to Groupe Lactalis (“Parmalat”).

(3) The national treasury certificates, which mature on 2020, are pledged as collateral for the loan obtained through the Special Program Asset Restructuring (“PESA”) (note 19).

(4) Deposit linked to operations in the international market.

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16. INVESTMENTS IN SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

16.1. Investments breakdown

| Parent company |  | Consolidated
| 03.31.17 |  | 12.31.16 |  | 03.31.17 |  | 12.31.16
Investment in subsidiaries and associates | 4,556,927 |  | 4,838,603 |  | 60,030 |  | 51,727
Goodwill Quickfood | 193,461 |  | 194,114 |  | - |  | -
Goodwill SATS BRF | - |  | - |  | 5,625 |  | 5,598
| 4,750,388 |  | 5,032,717 |  | 65,655 |  | 57,325
Other investments | 1,107 |  | 1,107 |  | 1,357 |  | 1,358
| 4,751,495 |  | 5,033,824 |  | 67,012 |  | 58,683

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16.2. Rollforward of the interest in subsidiaries and associates - Parent company

| Subsidiaries |  | Associates |  |  |  |
| BRF Energia S.A. |  | BRF GmbH |  | Establec. Levino Zaccardi |  | K&S Alimentos S.A. |  | BRF Luxembourg SARL |  | PSA Labor. Veter. Ltda |  | Quickfood S.A. |  | Sadia Alimentos S.A. |  | Sadia International Ltd. |  | Sadia Uruguay S.A. |  | Sadia Overseas S.A. |  | VIP S.A. Empr. e Particip. Imob |  | PP-BIO Adm. Bem próprio S.A. |  | PR-SAD Adm. Bem próprio S.A. |  | UP! Alimentos Ltda |  | Total
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 03.31.17 |  | 12.31.16
a) Capital share as of March 31, 2017 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
% of share | 100.00% |  | 100.00% |  | 99.94% |  | 100.00% |  | 100.00% |  | 99.99% |  | 91.21% |  | 43.10% |  | 100.00% |  | 94.90% |  | 100.00% |  | 100.00% |  | 33.33% |  | 33.33% |  | 50.00% |  |  |  |
Total number of shares and membership interests | 6,963,854 |  | 1 |  | 100 |  | 27,664,086 |  | 100 |  | 5,463,850 |  | 36,469,606 |  | 594,576,682 |  | 900 |  | 2,444,753,091 |  | 50,000 |  | 14,249,459 |  | - |  | - |  | 1,000 |  |  |  |
Number of shares and membership interest held | 6,963,854 |  | 1 |  | 100 |  | 27,664,086 |  | 100 |  | 5,463,849 |  | 33,264,887 |  | 256,253,695 |  | 900 |  | 2,319,989,778 |  | 50,000 |  | 14,249,459 |  | - |  | - |  | 500 |  |  |  |
b) Information as of March 31, 2017 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Capital stock | 5,972 |  | 6,523 |  | 1,420 |  | 27,664 |  | 42,783 |  | 5,564 |  | 50,601 |  | 257,336 |  | 2,933 |  | 262,028 |  | 3 |  | 40,061 |  | - |  | - |  | 1 |  |  |  |
Shareholders' equity | (19) |  | 4,219,283 |  | 56 |  | 29,683 |  | 46,237 |  | 5,698 |  | (45,608) |  | 81,461 |  | 217,222 |  | 158,359 |  | (76,840) |  | 52,938 |  | - |  | - |  | 13,455 |  |  |  |
Fair value adjustments of assets and liabilities acquired | - |  | - |  | - |  | - |  | - |  | - |  | 79,445 |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  |  |  |
Goodwill based on expectation of future profitability | - |  | - |  | - |  | - |  | - |  | - |  | 114,016 |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  |  |  |
Income (loss) for the period | (19) |  | (274,107) |  | (73) |  | 531 |  | 12,326 |  | 134 |  | (11,709) |  | (7,906) |  | (2,863) |  | (20,837) |  | (1,571) |  | 1,015 |  | - |  | - |  | 13,454 |  |  |  |
c) Balance of investments as of March 31, 2017 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance | - |  | 4,309,592 |  | 129 |  | 29,153 |  | 748 |  | 5,562 |  | 194,114 |  | 38,528 |  | 225,716 |  | 170,911 |  | - |  | 51,921 |  | 1,960 |  | 4,382 |  | 1 |  | 5,032,717 |  | 7,209,007
Equity pick-up | (19) |  | (274,107) |  | (73) |  | 531 |  | 12,326 |  | 134 |  | (10,680) |  | (3,408) |  | (2,863) |  | (19,774) |  | (1,571) |  | 1,015 |  | - |  | - |  | 6,727 |  | (291,762) |  | (851,356)
Unrealized profit in inventory | - |  | - |  | - |  | - |  | - |  | - |  | (2,364) |  | (12) |  | - |  | (457) |  | - |  | - |  | - |  | - |  | - |  | (2,833) |  | (2,506)
Exchange rate variation on goodwill in the acquisiton of non-controlling entities | - |  | 240 |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | 240 |  | 4,192
Exchange rate variation on goodwill | - |  | - |  | - |  | - |  | - |  | - |  | 353 |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | 353 |  | (92,131)
Goodwill | - |  | - |  | - |  | - |  | - |  | - |  | (1,007) |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | (1,007) |  | (4,639)
Advance for future capital increase | 1,205 |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | 1,205 |  | -
Exchange rate variation on foreign investments | - |  | 15,764 |  | - |  | - |  | (2,265) |  | - |  | - |  | - |  | (7,254) |  | - |  | 2,141 |  | - |  | - |  | - |  | - |  | 8,386 |  | (649,239)
Other comprehensive income | - |  | (46,304) |  | (2) |  | - |  | (6,597) |  | - |  | (337) |  | (94) |  | 1,628 |  | (328) |  | - |  | - |  | - |  | - |  | - |  | (52,034) |  | (631,359)
Establishment company | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | 682
Increase in capital | - |  | - |  | - |  | - |  | 42,026 |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | 72 |  | 233 |  | - |  | 42,331 |  | 72,245
Appreciation in exchange of shares | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | 1,234
Dividends and interests on shareholders' equity | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | (40,553)
Gain or loss on variation of equity interest | - |  | (3) |  | 2 |  | - |  | - |  | - |  | - |  | 83 |  | (5) |  | (97) |  | - |  | - |  | - |  | - |  | - |  | (20) |  | -
Acquisition of equity interest | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | 9,262
Impairment losses for investments | - |  | - |  | - |  | - |  | - |  | - |  | 13,382 |  | - |  | - |  | - |  | (570) |  | - |  | - |  | - |  | - |  | 12,812 |  | 7,878
| 1,186 |  | 4,005,182 |  | 56 |  | 29,684 |  | 46,238 |  | 5,696 |  | 193,461 |  | 35,097 |  | 217,222 |  | 150,255 |  | - |  | 52,936 |  | 2,032 |  | 4,615 |  | 6,728 |  | 4,750,388 |  | 5,032,717

The exchange rate variation result on the investments in foreign subsidiaries, whose functional currency is Brazilian Reais, totaling a gain of R$9,052 on March 31, 2017 (a loss of R$265,530 as of March 31, 2016), was recognized as financial result in the consolidated statement of income.

On March 31, 2017, these associates, affiliates and joint ventures do not have any significant restriction to transfer dividends or repay their loans or advances to the Company.

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16.3. Summary of financial information in associate

| K&S |  | PP-BIO |  | PR-SAD |  | UP! |  | Total
| 12.31.16 |  | 03.31.17 |  | 12.31.16 |  | 03.31.17 |  | 12.31.16 |  | 03.31.17 |  | 12.31.16 |  | 03.31.17 |  | 12.31.16
Current assets | - |  | - |  | - |  | - |  | - |  | 36,418 |  | 51,020 |  |  |  |
Non-current assets | - |  | 6,096 |  | 5,880 |  | 13,848 |  | 13,146 |  | 176 |  | 185 |  |  |  |
Current liabilities | - |  | - |  | - |  | - |  | - |  | (23,139) |  | (51,204) |  |  |  |
Shareholder's equity | - |  | 6,096 |  | 5,880 |  | 13,848 |  | 13,146 |  | 13,455 |  | 1 |  |  |  |
% of participation | 0.00% |  | 33.33% |  | 33.33% |  | 33.33% |  | 33.33% |  | 50.00% |  | 50.00% |  |  |  |
Book value of investment | - |  | 2,032 |  | 1,960 |  | 4,616 |  | 4,382 |  | 6,728 |  | 1 |  | 13,376 |  | 6,343
Dividends declared | - |  | - |  | - |  | - |  | - |  | 26,923 |  | 26,923 |  | 26,923 |  | 26,923
| K&S(1) |  | PP-BIO |  | PR-SAD |  | UP! |  |
| 03.31.16 |  | 03.31.17 |  | 03.31.16 |  | 03.31.17 |  | 03.31.16 |  | 03.31.17 |  | 03.31.16 |  |  |  |
Net revenues | 24,843 |  | - |  | - |  | - |  | - |  | 43,901 |  | 44,499 |  |  |  |
Net income (loss) | 4,687 |  | - |  | - |  | - |  | - |  | 13,454 |  | 11,843 |  |  |  |
Equity pick-up | 2,298 |  | - |  | - |  | - |  | - |  | 6,727 |  | 5,922 |  | 6,727 |  | 8,220

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17. PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment rollforward is presented below:

| Parent company
| Weighted average depreciation rate (p.a.) |  | 12.31.16 |  | Additions |  | Disposals |  | Transfers SHB (2) |  | Transfers (1) |  | 03.31.17
Cost |  |  |  |  |  |  |  |  |  |  |  |  |
Land | - |  | 547,952 |  | - |  | - |  | (68,774) |  | 5,816 |  | 484,994
Buildings and improvements | - |  | 5,216,174 |  | - |  | (4,076) |  | (672,616) |  | 76,378 |  | 4,615,860
Machinery and equipment | - |  | 7,248,188 |  | 10,256 |  | (30,081) |  | (1,004,964) |  | 209,782 |  | 6,433,181
Facilities | - |  | 1,893,687 |  | - |  | (2,720) |  | (177,152) |  | 42,475 |  | 1,756,290
Furniture | - |  | 116,121 |  | - |  | (318) |  | (10,375) |  | 2,445 |  | 107,873
Vehicles | - |  | 13,672 |  | - |  | (9) |  | (901) |  | 20 |  | 12,782
Construction in progress | - |  | 753,279 |  | 184,425 |  | - |  | - |  | (374,136) |  | 563,568
Advances to suppliers | - |  | 1,997 |  | 7,243 |  | - |  | - |  | (4,388) |  | 4,852
|  |  | 15,791,070 |  | 201,924 |  | (37,204) |  | (1,934,782) |  | (41,608) |  | 13,979,400
Depreciation |  |  |  |  |  |  |  |  |  |  |  |  |
Buildings and improvements | 3.04% |  | (1,584,343) |  | (34,244) |  | 88 |  | 186,697 |  | 3,308 |  | (1,428,494)
Machinery and equipment | 5.95% |  | (2,861,030) |  | (94,542) |  | 17,075 |  | 365,375 |  | 2,395 |  | (2,570,727)
Facilities | 3.72% |  | (600,665) |  | (18,072) |  | 807 |  | 50,423 |  | 52 |  | (567,455)
Furniture | 7.94% |  | (48,283) |  | (1,990) |  | 225 |  | 5,456 |  | 57 |  | (44,535)
Vehicles | 19.93% |  | (5,965) |  | (199) |  | 9 |  | 728 |  | 5 |  | (5,422)
|  |  | (5,100,286) |  | (149,047) |  | 18,204 |  | 608,679 |  | 5,817 |  | (4,616,633)
|  |  | 10,690,784 |  | 52,877 |  | (19,000) |  | (1,326,103) |  | (35,791) |  | 9,362,767

(1) Refers to the transfer of R$7,060 to intangible assets, R$12,790 to biological assets and R$15,941 to assets held for sale.

(2) As a result of the corporate reorganization of One Foods, as mentioned in note 1.3, was transferred from the parent company, relating to paid-in capital the net amount of R$1.335.491 to SHB.

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| Consolidated
| Weighted average depreciation rate (p.a.) |  | 12.31.16 |  | Additions |  | Business combinations (2) |  | Disposals |  | Transfers (1) |  | Functional currency |  | Exchange rate variation |  | 03.31.17
Cost |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Land | - |  | 575,911 |  | - |  | - |  | (489) |  | 5,816 |  | - |  | 581 |  | 581,819
Buildings and improvements | - |  | 5,648,592 |  | 6,414 |  | 13,281 |  | (4,518) |  | 86,624 |  | (1,869) |  | (691) |  | 5,747,833
Machinery and equipment | - |  | 7,994,146 |  | 17,733 |  | - |  | (34,426) |  | 281,191 |  | (1,893) |  | (1,589) |  | 8,255,162
Facilities | - |  | 2,047,923 |  | 94 |  | - |  | (2,905) |  | 49,070 |  | (1,401) |  | (1,283) |  | 2,091,498
Furniture | - |  | 163,475 |  | 58 |  | 12,485 |  | (482) |  | 3,055 |  | (58) |  | 540 |  | 179,073
Vehicles | - |  | 27,323 |  | 2 |  | 604 |  | (2,529) |  | 214 |  | - |  | (140) |  | 25,474
Construction in progress | - |  | 886,004 |  | 225,886 |  | - |  | - |  | (467,050) |  | (43) |  | (88) |  | 644,709
Advances to suppliers | - |  | 16,098 |  | 7,156 |  | - |  | - |  | (4,388) |  | (23) |  | (276) |  | 18,567
|  |  | 17,359,472 |  | 257,343 |  | 26,370 |  | (45,349) |  | (45,468) |  | (5,287) |  | (2,946) |  | 17,544,135
Depreciation |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Buildings and improvements | 3.03% |  | (1,694,486) |  | (42,466) |  | - |  | 94 |  | 3,253 |  | 165 |  | (182) |  | (1,733,622)
Machinery and equipment | 5.88% |  | (3,193,879) |  | (123,228) |  | - |  | 19,005 |  | 2,799 |  | 303 |  | (1,297) |  | (3,296,297)
Facilities | 3.78% |  | (646,314) |  | (22,436) |  | - |  | 863 |  | (235) |  | 132 |  | 111 |  | (667,879)
Furniture | 8.05% |  | (66,502) |  | (2,923) |  | - |  | 354 |  | (4) |  | 11 |  | 39 |  | (69,025)
Vehicles | 20.06% |  | (12,053) |  | (536) |  | - |  | 1,840 |  | 40 |  | - |  | 122 |  | (10,587)
|  |  | (5,613,234) |  | (191,589) |  | - |  | 22,156 |  | 5,853 |  | 611 |  | (1,207) |  | (5,777,410)
|  |  | 11,746,238 |  | 65,754 |  | 26,370 |  | (23,193) |  | (39,615) |  | (4,676) |  | (4,153) |  | 11,766,725

(1) Refers to the transfer of R$9,271 to intangible assets, R$14,397 to biological assets and R$15,947 to assets held for sale.

(2) Balance arise from the business combination of FFM Further.

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The Company has fully depreciated items that are still in operation, which are set forth below:

| Parent company |  | Consolidated
| 03.31.17 |  | 12.31.16 |  | 03.31.17 |  | 12.31.16
Cost |  |  |  |  |  |  |
Buildings and improvements | 105,563 |  | 116,090 |  | 122,188 |  | 122,181
Machinery and equipment | 571,950 |  | 634,661 |  | 671,127 |  | 674,325
Facilities | 64,953 |  | 70,490 |  | 74,372 |  | 74,369
Furniture | 12,542 |  | 14,200 |  | 20,222 |  | 20,061
Vehicles | 3,356 |  | 3,918 |  | 4,934 |  | 4,952
Others | 44,571 |  | 49,526 |  | 54,079 |  | 49,526
| 802,935 |  | 888,885 |  | 946,922 |  | 945,414

During the three-month period ended March 31, 2017, the Company capitalized interest in the amount of R$11,005 in the parent company and R$11,820 in the consolidated (R$8,629 in the parent company and in the consolidated during the three-month period ended March 31, 2016). The weighted average interest rate utilized to determine the capitalized amount was 7.41% p.a in the parent company and 10.15% in the consolidated (5.57% p.a. in the parent company and 5.66% in the consolidated as of March 31, 2016).

On March 31, 2017, except for the built to suit agreement mentioned in note 23.2, the Company had no commitments assumed related to acquisition or construction of property, plant and equipment items.

The property, plant and equipment items that are pledged as collateral for transactions of different natures are presented below:

|  |  |  | Parent company and Consolidated
|  |  |  | 03.31.17 |  | 12.31.16
|  | Type of collateral |  | Book value of the collateral |  | Book value of the collateral
Land |  | Financial/Tax |  | 238,985 |  | 258,880
Buildings and improvements |  | Financial/Tax |  | 1,173,297 |  | 1,253,648
Machinery and equipment |  | Financial/Labor/Tax/Civil |  | 2,060,272 |  | 2,129,395
Facilities |  | Financial/Tax |  | 516,556 |  | 523,314
Furniture |  | Financial/Tax |  | 22,387 |  | 23,591
Vehicles |  | Financial/Tax |  | 1,266 |  | 1,016
Others |  | Financial/Tax |  | 58,260 |  | 66,465
|  |  |  | 4,071,023 |  | 4,256,309

100

(CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) ITR – Quarterly Information – March 31, 2017 – BRF S.A. Explanatory Notes (in thousands of Brazilian Reais) |

18. INTANGIBLES

The intangible assets rollforward is set forth below:

|  |  | Parent company
| Weighted average amortization rate (p.a.) |  | 12.31.16 |  | Additions |  | Disposals |  | Transfers SHB (1) |  | Transfers |  | 03.31.17
Cost |  |  |  |  |  |  |  |  |  |  |  |  |
Non-compete agreement | - |  | 18,365 |  | 385 |  | - |  | - |  | - |  | 18,750
Goodwill | - |  | 2,096,587 |  | - |  | - |  | (553,658) |  | - |  | 1,542,929
Ava | - |  | 49,368 |  | - |  | - |  | - |  | - |  | 49,368
Eleva Alimentos | - |  | 808,140 |  | - |  | - |  | (304,582) |  | - |  | 503,558
Incubatório Paraíso | - |  | 656 |  | - |  | - |  | - |  | - |  | 656
Paraíso Agroindustrial | - |  | 16,751 |  | - |  | - |  | - |  | - |  | 16,751
Perdigão Mato Grosso | - |  | 7,636 |  | - |  | - |  | - |  | - |  | 7,636
Sadia | - |  | 1,214,036 |  | - |  | - |  | (249,076) |  | - |  | 964,960
Outgrowers relationship | - |  | 14,702 |  | - |  | - |  | - |  | - |  | 14,702
Trademarks | - |  | 1,173,000 |  | - |  | - |  | - |  | - |  | 1,173,000
Patents | - |  | 6,100 |  | - |  | - |  | - |  | - |  | 6,100
Software | - |  | 452,869 |  | 39,169 |  | (56,303) |  | (4,441) |  | 7,060 |  | 438,354
|  |  | 3,761,623 |  | 39,554 |  | (56,303) |  | (558,099) |  | 7,060 |  | 3,193,835
Amortization |  |  |  |  |  |  |  |  |  |  |  |  |
Non-compete agreement | 37.00% |  | (5,051) |  | (1,892) |  | - |  | - |  | - |  | (6,943)
Outgrowers relationship | 13.00% |  | (7,669) |  | (478) |  | - |  | - |  | - |  | (8,147)
Patents | 20.00% |  | (3,191) |  | (261) |  | - |  | - |  | - |  | (3,452)
Software | 21.00% |  | (293,967) |  | (22,403) |  | 56,303 |  | 340 |  | - |  | (259,727)
|  |  | (309,878) |  | (25,034) |  | 56,303 |  | 340 |  | - |  | (278,269)
|  |  | 3,451,745 |  | 14,520 |  | - |  | (557,759) |  | 7,060 |  | 2,915,566

(1) As a result of the corporate reorganization of One Foods, as mentioned in note 1.3, was transferred from the parent company, relating to paid-in capital the net amount of R$557,759 to SHB.

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(CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) ITR – Quarterly Information – March 31, 2017 – BRF S.A. Explanatory Notes (in thousands of Brazilian Reais) |

|  |  | Consolidated
| Weighted average amortization rate (p.a.) |  | 12.31.16 |  | Additions |  | Disposals |  | Business combination |  | Transfers |  | Exchange rate variation |  | 03.31.17
Cost |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-compete agreement | - |  | 51,283 |  | 385 |  | - |  | - |  | - |  | (598) |  | 51,070
Goodwill | - |  | 4,343,550 |  | - |  | (21) |  | (42,837) |  | (10,220) |  | (3,268) |  | 4,287,204
AKF | - |  | 129,518 |  | - |  | - |  | (2,120) |  | - |  | (1,450) |  | 125,948
Alimentos Calchaquí | - |  | 341,988 |  | - |  | (21) |  | - |  | - |  | 665 |  | 342,632
Ava | - |  | 49,368 |  | - |  | - |  | - |  | - |  | - |  | 49,368
Avex | - |  | 18,775 |  | - |  | - |  | - |  | - |  | 37 |  | 18,812
BRF AFC | - |  | 162,624 |  | - |  | - |  | (33,372) |  | - |  | (4,225) |  | 125,027
BRF Holland B.V. | - |  | 22,505 |  | - |  | - |  | - |  | - |  | (320) |  | 22,185
BRF Invicta | - |  | 119,092 |  | - |  | - |  | - |  | - |  | (1,874) |  | 117,218
Dánica | - |  | 4,779 |  | - |  | - |  | - |  | - |  | 7 |  | 4,786
Eclipse Holding Cooperatief | - |  | 209,950 |  | - |  | - |  | - |  | - |  | 409 |  | 210,359
Eleva Alimentos | - |  | 808,140 |  | - |  | - |  | - |  | - |  | - |  | 808,140
Federal Foods LLC | - |  | 70,474 |  | - |  | - |  | (7,345) |  | - |  | (1,965) |  | 61,164
Federal Foods Qatar L.L.C | - |  | 308,468 |  | - |  | - |  | - |  | - |  | (8,581) |  | 299,887
GFS Group | - |  | 684,368 |  | - |  | - |  | - |  | - |  | 15,025 |  | 699,393
GQFE - Golden Quality Foods Europe | - |  | 2,407 |  | - |  | - |  | - |  | - |  | (34) |  | 2,373
Incubatório Paraíso | - |  | 656 |  | - |  | - |  | - |  | - |  | - |  | 656
Invicta Food Group | - |  | 645 |  | - |  | - |  | - |  | - |  | (10) |  | 635
Paraíso Agroindustrial | - |  | 16,751 |  | - |  | - |  | - |  | - |  | - |  | 16,751
Perdigão Mato Grosso | - |  | 7,636 |  | - |  | - |  | - |  | - |  | - |  | 7,636
Quickfood | - |  | 113,793 |  | - |  | - |  | - |  | - |  | 221 |  | 114,014
Sadia | - |  | 1,214,036 |  | - |  | - |  | - |  | - |  | - |  | 1,214,036
Universal Meats Ltd. | - |  | 57,577 |  | - |  | - |  | - |  | (10,220) |  | (1,173) |  | 46,184
Import quotas | - |  | 58,155 |  | - |  | - |  | - |  | 42,197 |  | (1,078) |  | 99,274
Outgrowers relationship | - |  | 14,702 |  | - |  | - |  | - |  | - |  | - |  | 14,702
Trademarks | - |  | 1,313,194 |  | - |  | - |  | (668) |  | - |  | (420) |  | 1,312,106
Patents | - |  | 6,917 |  | - |  | - |  | - |  | - |  | (1) |  | 6,916
Customer relationship | - |  | 815,285 |  | - |  | - |  | (43,093) |  | (17,875) |  | (23,792) |  | 730,525
Supplier relationship | - |  | 14,562 |  | - |  | (1,991) |  | - |  | (11,547) |  | (128) |  | 896
Software | - |  | 503,998 |  | 39,240 |  | (56,303) |  | - |  | 9,271 |  | (360) |  | 495,846
|  |  | 7,121,646 |  | 39,625 |  | (58,315) |  | (86,598) |  | 11,826 |  | (29,645) |  | 6,998,539
Amortization |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-compete agreement | 54.20% |  | (7,734) |  | (3,476) |  | - |  | - |  | - |  | (35) |  | (11,245)
Import quotas | 45.83% |  | (21,697) |  | (14,998) |  | - |  | - |  | - |  | (13) |  | (36,708)
Outgrowers relationship | 13.00% |  | (7,669) |  | (478) |  | - |  | - |  | - |  | - |  | (8,147)
Patents | 19.98% |  | (3,912) |  | (267) |  | - |  | - |  | - |  | 2 |  | (4,177)
Customer relationship | 9.79% |  | (81,332) |  | (14,849) |  | 1 |  | 44,516 |  | - |  | 745 |  | (50,919)
Supplier relationship | 5.00% |  | (1,992) |  | (23) |  | 1,992 |  | - |  | - |  | (1) |  | (24)
Software | 21.00% |  | (324,756) |  | (24,676) |  | 56,300 |  | - |  | - |  | 170 |  | (292,962)
|  |  | (449,092) |  | (58,767) |  | 58,293 |  | 44,516 |  | - |  | 868 |  | (404,182)
|  |  | 6,672,554 |  | (19,142) |  | (22) |  | (42,082) |  | 11,826 |  | (28,777) |  | 6,594,357

For the three-month period ended March 31, 2017, Management did not identify and event that could indicate an impairment of such assets.

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(CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) ITR – Quarterly Information – March 31, 2017 – BRF S.A. Explanatory Notes (in thousands of Brazilian Reais) |

19. LOANS AND FINANCING

| Parent company
| Charges (p.a.) |  | Weighted average interest rate (p.a.) |  | WAMT (1) |  | Current |  | Non-current |  | 03.31.17 |  | Captured |  | Transfers SHB(2) |  | Amortization |  | Interest paid |  | Interest appropriated |  | Exchange rate variation |  | Current |  | Non-current |  | 12.31.16
Local currency |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Working capital | 9.31% (8.90% on 12.31.16) |  | 9.31% (8.90% on 12.31.16) |  | 0.7 |  | 1,153,276 |  | 518,500 |  | 1,671,776 |  | 649,270 |  | (64,564) |  | (247,883) |  | (16,720) |  | 25,547 |  | - |  | 1,326,126 |  | - |  | 1,326,126
Certificate of agribusiness receivables | 96.40% of CDI / IPCA + 5.90% (96.50% of CDI / IPCA + 5.90% on 12.31.16) |  | 11.60% (13.43% on 12.31.16) |  | 3.3 |  | 70,111 |  | 3,464,319 |  | 3,534,430 |  | - |  | - |  | - |  | (197,412) |  | 101,765 |  | - |  | 168,110 |  | 3,461,967 |  | 3,630,077
Development bank credit lines | Fixed rate / Selic / TJLP + 0.75% (Fixed rate / Selic / TJLP + 0.75% on 12.31.16) |  | 7.65% (7.93% on 12.31.16) |  | 0.7 |  | 397,309 |  | 471,519 |  | 868,828 |  | 62,439 |  | - |  | (86,170) |  | (9,890) |  | 10,146 |  | 11,291 |  | 381,303 |  | 499,709 |  | 881,012
Bonds | 7.75% (7.75% on 12.31.16) |  | 7.75% (7.75% on 12.31.16) |  | 1.2 |  | 13,695 |  | 499,007 |  | 512,702 |  | - |  | - |  | - |  | - |  | 16,575 |  | (6,806) |  | 4,140 |  | 498,793 |  | 502,933
Export credit facility | 12.17% (13.68% on 12.31.16) |  | 12.17% (13.68% on 12.31.16) |  | 2.0 |  | 10,997 |  | 1,850,000 |  | 1,860,997 |  | - |  | - |  | - |  | (119,125) |  | 57,825 |  | - |  | 72,297 |  | 1,850,000 |  | 1,922,297
Special program asset restructuring | Fixed rate / IGPM + 4.90% (Fixed rate / IGPM + 4.90% on 12.31.16) |  | 9.76% (12.09% on 12.31.16) |  | 3.0 |  | 934 |  | 251,146 |  | 252,080 |  | - |  | - |  | - |  | (4,710) |  | 5,104 |  | 130 |  | 3,546 |  | 248,010 |  | 251,556
Other secured debts | 8.50% (8.50% on 12.31.16) |  | 8.50% (8.50% on 12.31.16) |  | 2.1 |  | 32,292 |  | 89,794 |  | 122,086 |  | - |  | - |  | (7,493) |  | (2,591) |  | 2,577 |  | 11 |  | 32,331 |  | 97,251 |  | 129,582
Fiscal incentives | 2.40% (2.40% on 12.31.16) |  | 2.40% (2.40% on 12.31.16) |  | 0.3 |  | 3,948 |  | - |  | 3,948 |  | 3,875 |  | - |  | - |  | (15) |  | 16 |  | - |  | 72 |  | - |  | 72
|  |  |  |  |  |  | 1,682,562 |  | 7,144,285 |  | 8,826,847 |  | 715,584 |  | (64,564) |  | (341,546) |  | (350,463) |  | 219,555 |  | 4,626 |  | 1,987,925 |  | 6,655,730 |  | 8,643,655
Foreign currency |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Bonds | 3.57% (4.05% on 12.31.16) + e.r. US$ and EUR |  | 3.57% (4.05% on 12.31.16) + e.r. US$ and EUR |  | 5.7 |  | 67,509 |  | 3,548,444 |  | 3,615,953 |  | - |  | (2,424,133) |  | - |  | - |  | 36,580 |  | (81,854) |  | 48,170 |  | 6,037,190 |  | 6,085,360
Export credit facility | LIBOR + 2.74% (LIBOR + 2.74% on 12.31.16) + e.r. US$ |  | 4.08% (3.95% on 12.31.16) + e.r. US$ |  | 1.2 |  | 318,741 |  | 575,026 |  | 893,767 |  | - |  | - |  | (52,232) |  | (19,537) |  | 9,292 |  | (28,092) |  | 311,606 |  | 672,730 |  | 984,336
Advances for foreign exchange rate contracts | (2.39% + e.r. US$) + e.r. US$ |  | (2.39% + e.r. US$) + e.r. US$ |  | - |  | - |  | - |  | - |  | - |  | - |  | (199,322) |  | (4,742) |  | 347 |  | (9,123) |  | 212,840 |  | - |  | 212,840
Development bank credit lines | UMBNDES + 1.98% (UMBNDES + 2.10% on 12.31.16) + e.r. US$ and other currencies |  | 6.30% (6.24% on 12.31.16) + e.r. US$ and other currencies |  | 0.9 |  | 3,409 |  | 2,588 |  | 5,997 |  | - |  | - |  | (2,561) |  | (133) |  | 129 |  | (340) |  | 5,884 |  | 3,018 |  | 8,902
|  |  |  |  |  |  | 389,659 |  | 4,126,058 |  | 4,515,717 |  | - |  | (2,424,133) |  | (254,115) |  | (24,412) |  | 46,348 |  | (119,409) |  | 578,500 |  | 6,712,938 |  | 7,291,438
|  |  |  |  |  |  | 2,072,221 |  | 11,270,343 |  | 13,342,564 |  | 715,584 |  | (2,488,697) |  | (595,661) |  | (374,875) |  | 265,903 |  | (114,783) |  | 2,566,425 |  | 13,368,668 |  | 15,935,093

(1) Weighted average maturity in years.

(2) As a result of the corporate reorganization of One Foods, as mentioned in note 1.3, was transferred from the parent company, relating to paid-in capital the net amount of R$2,488,697 to SHB.

103

(CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) ITR – Quarterly Information – March 31, 2017 – BRF S.A. Explanatory Notes (in thousands of Brazilian Reais) |

| Consolidated
| Charges (p.a.) |  | Weighted average interest rate (p.a.) |  | WAMT (1) |  | Current |  | Non-current |  | 03.31.17 |  | Captured |  | Amortization |  | Interest paid |  | Interest appropriated |  | Exchange rate variation |  | Current |  | Non-current |  | 12.31.16
Local currency |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Working capital | 9.32% (8.90% on 12.31.16) |  | 9.32% (8.90% on 12.31.16) |  | 0.7 |  | 1,319,034 |  | 518,500 |  | 1,837,534 |  | 827,308 |  | (326,767) |  | (17,967) |  | 28,834 |  | - |  | 1,326,126 |  | - |  | 1,326,126
Certificate of agribusiness receivables | 96.40% of CDI / IPCA + 5,90% (96.50% of CDI / IPCA + 5,90% on 12.31.16) |  | 11.60% (13.43% on 12.31.16) |  | 3.3 |  | 70,111 |  | 3,464,319 |  | 3,534,430 |  | - |  | - |  | (197,412) |  | 101,765 |  | - |  | 168,110 |  | 3,461,967 |  | 3,630,077
Development bank credit lines | Fixed rate / Selic / TJLP + 0.75% (Fixed rate / Selic / TJLP + 0.75% on 12.31.16) |  | 7.65% (7.93% on 12.31.16) |  | 0.7 |  | 397,309 |  | 471,519 |  | 868,828 |  | 62,439 |  | (86,170) |  | (9,891) |  | 10,146 |  | 11,292 |  | 381,303 |  | 499,709 |  | 881,012
Bonds | 7.75% (7.75% on 12.31.16) |  | 7.75% (7.75% on 12.31.16) |  | 1.2 |  | 13,695 |  | 499,007 |  | 512,702 |  | - |  | - |  | - |  | 16,575 |  | (6,806) |  | 4,140 |  | 498,793 |  | 502,933
Export credit facility | 12.17% (13.68% on 12.31.16) |  | 12.17% (13.68% on 12.31.16) |  | 2.0 |  | 10,997 |  | 1,850,000 |  | 1,860,997 |  | - |  | - |  | (119,125) |  | 57,825 |  | - |  | 72,297 |  | 1,850,000 |  | 1,922,297
Special program asset restructuring | Fixed rate / IGPM + 4.90% (Fixed rate / IGPM + 4.90% on 12.31.16) |  | 9.76% (12.09% on 12.31.16) |  | 3.0 |  | 934 |  | 251,146 |  | 252,080 |  | - |  | - |  | (4,709) |  | 5,104 |  | 129 |  | 3,546 |  | 248,010 |  | 251,556
Other secured debts | 8.50% (8.50% on 12.31.16) |  | 8.50% (8.50% on 12.31.16) |  | 2.1 |  | 32,292 |  | 89,794 |  | 122,086 |  | - |  | (7,493) |  | (2,591) |  | 2,577 |  | 11 |  | 32,331 |  | 97,251 |  | 129,582
Fiscal incentives | 2.40% (2.40% on 12.31.16) |  | 2.40% (2.40% on 12.31.16) |  | 0.3 |  | 3,948 |  | - |  | 3,948 |  | 3,875 |  | - |  | (15) |  | 16 |  | - |  | 72 |  | - |  | 72
|  |  |  |  |  |  | 1,848,320 |  | 7,144,285 |  | 8,992,605 |  | 893,622 |  | (420,430) |  | (351,710) |  | 222,842 |  | 4,626 |  | 1,987,925 |  | 6,655,730 |  | 8,643,655
Foreign currency |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Bonds | 4.63% (4.71% on 12.31.16) + e.r. US$, EUR and ARS |  | 4.63% (4.71% on 12.31.16) + e.r. US$, EUR and ARS |  | 6.5 |  | 508,356 |  | 7,808,471 |  | 8,316,827 |  | - |  | (6,786) |  | (50,065) |  | 93,446 |  | (213,430) |  | 489,229 |  | 8,004,433 |  | 8,493,662
Export credit facility | LIBOR + 2.08% (LIBOR + 2.71% on 12.31.16) + e.r. US$ |  | 2.95% (3.85% on 12.31.16) + e.r. US$ |  | 2.0 |  | 826,564 |  | 1,400,092 |  | 2,226,656 |  | 1,003,147 |  | (52,232) |  | (23,438) |  | 13,455 |  | (24,870) |  | 312,219 |  | 998,375 |  | 1,310,594
Advances for foreign exchange rate contracts | (2.39% on 12.31.16) + e.r. US$ |  | (2.39% on 12.31.16) + e.r. US$ |  | - |  | - |  | - |  | - |  | - |  | (199,323) |  | (4,741) |  | 347 |  | (9,123) |  | 212,840 |  | - |  | 212,840
Development bank credit lines | UMBNDES + 1.98% (UMBNDES + 2.10% on 12.31.16) + e.r. US$ and other currencies |  | 6.30% (6.24% on 12.31.16) + e.r. US$ and other currencies |  | 0.9 |  | 3,409 |  | 2,588 |  | 5,997 |  | - |  | (2,561) |  | (133) |  | 129 |  | (339) |  | 5,883 |  | 3,018 |  | 8,901
Working capital | 18.86% (14.28% on 12.31.16) + e.r. ARS / + e.r US$ |  | 18.86% (14.28% on 12.31.16) + e.r. ARS / + e.r US$ |  | 0.7 |  | 416,494 |  | 55,855 |  | 472,349 |  | 528,231 |  | (347,556) |  | (4,557) |  | 7,728 |  | (4,225) |  | 236,908 |  | 55,820 |  | 292,728
|  |  |  |  |  |  | 1,754,823 |  | 9,267,006 |  | 11,021,829 |  | 1,531,378 |  | (608,458) |  | (82,934) |  | 115,105 |  | (251,987) |  | 1,257,079 |  | 9,061,646 |  | 10,318,725
|  |  |  |  |  |  | 3,603,143 |  | 16,411,291 |  | 20,014,434 |  | 2,425,000 |  | (1,028,888) |  | (434,644) |  | 337,947 |  | (247,361) |  | 3,245,004 |  | 15,717,376 |  | 18,962,380

(1) Weighted average maturity in years.

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The main characteristics of loan and financing agreements entered into by the Company were disclosed in note 20 of financial statements for the year ended December 31, 2016.

On March 31, 2017, the Company did not have financial covenants clauses related to its loan agreements.

19.1. Loans and financing maturity schedule

The maturity schedule of the loans and financing is as follows:

| Parent company |  | Consolidated
| 03.31.17 |  | 03.31.17
2017 | 1,815,969 |  | 2,505,095
2018 | 2,846,606 |  | 4,032,731
2019 | 3,302,519 |  | 3,318,660
2020 | 1,101,653 |  | 1,409,040
2021 | 7,373 |  | 19,581
2022 onwards | 4,268,444 |  | 8,729,327
| 13,342,564 |  | 20,014,434

19.2. Guarantees

| BR GAAP |  | BR GAAP and IFRS
| Parent company |  | Consolidated
| 03.31.17 |  | 12.31.16 |  | 03.31.17 |  | 12.31.16
Total of loans and financing | 13,342,564 |  | 15,935,093 |  | 20,014,434 |  | 18,962,380
Mortgage guarantees | 1,000,855 |  | 1,019,568 |  | 1,000,855 |  | 1,019,568
Related to FINEM-BNDES | 709,569 |  | 771,257 |  | 709,569 |  | 771,257
Related to FNE-BNB | 122,085 |  | 129,582 |  | 122,085 |  | 129,582
Related to tax incentives and other | 169,200 |  | 118,729 |  | 169,200 |  | 118,729

The Company is the guarantor of a loan obtained by Instituto Sadia de Sustentabilidade from the Bank National Economic and Social Development (“BNDES”). The loan was obtained with the purpose of allowing the implementation of biodigesters in the farms of the outgrowers which take part in the Company´s integration system, targeting the reduction of the emission of Greenhouse Gases. The value of these guarantees on March 31, 2017 totaled R$25,663 (R$28,390 as of December 31, 2016).

The Company is the guarantor of loans related to a special program, which aimed the local development of outgrowers in the central region of Brazil. The proceeds of such loans are utilized by the outgrowers to improve farm conditions and will be paid by them in 10 years, taking as collateral the land and equipment acquired by the outgrowers through this program. The guarantee totaled R$131,548 as of March 31, 2017 (R$138,542 as of December 31, 2016).

On March 31, 2017, the Company contracted bank guarantees in the amount of R$1,553,547 (R$1,934,547 as of December 31, 2016). These bank guarantees were offered mainly in litigations involving the Company´s use of tax credits. These guarantees have an average cost of 0.90% p.a. (0.90% p.a. as of December 31, 2016).

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19.3. Commitments

In the normal course of the business, the Company enters into agreements with third parties which are mainly related to the purchases of raw materials, such as corn and soymeal, where the agreed prices can be fixed or to be fixed. The Company enters into other agreements, such as electricity, packaging supplies and manufacturing activities. The amounts of these agreements at the date of these financial statements are set forth below:

|  | Parent company |  | Consolidated
|  | 03.31.17 |  | 03.31.17
2017 |  | 4,675,943 |  | 5,004,836
2018 |  | 598,381 |  | 639,470
2019 |  | 311,394 |  | 321,822
2020 |  | 220,160 |  | 220,772
2021 |  | 102,791 |  | 102,874
2022 onwards |  | 220,383 |  | 220,383
|  | 6,129,052 |  | 6,510,157

20. TRADE ACCOUNTS PAYABLE

| Parent company |  | Consolidated
| 03.31.17 |  | 12.31.16 |  | 03.31.17 |  | 12.31.16
Domestic suppliers |  |  |  |  |  |  |
Third parties | 3,527,073 |  | 4,147,917 |  | 3,925,097 |  | 4,148,132
Related parties | 214,516 |  | 13,118 |  | 17,023 |  | 13,118
| 3,741,589 |  | 4,161,035 |  | 3,942,120 |  | 4,161,250
Foreign suppliers |  |  |  |  |  |  |
Third parties | 509,024 |  | 629,891 |  | 1,616,039 |  | 1,727,542
Related parties | 1,796 |  | 13,864 |  | - |  | -
| 510,820 |  | 643,755 |  | 1,616,039 |  | 1,727,542
(-) Adjustment to present value | (37,588) |  | (46,069) |  | (44,829) |  | (48,954)
| 4,214,821 |  | 4,758,721 |  | 5,513,330 |  | 5,839,838

For the three-month period ended March 31, 2017, the average payment period is 89 days (99 days on December 31, 2016).

The information on accounts payable involving related parties is presented in note 29. The trade accounts payable to related parties refer to transactions with associates UP! in Brazil.

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21. SUPPLY CHAIN FINANCE

| Parent company |  | Consolidated
| 03.31.17 |  | 12.31.16 |  | 03.31.17 |  | 12.31.16
National suppliers | 706,352 |  | 1,007,075 |  | 775,543 |  | 1,007,075
Foreign suppliers | 231,477 |  | 328,507 |  | 234,197 |  | 328,507
| 937,829 |  | 1,335,582 |  | 1,009,740 |  | 1,335,582

The Company has partnerships with financial institutions that allow the suppliers to anticipate their receivables. The suppliers do have the freedom to choose whether to anticipate or not and, if positive, with which institution. The anticipation allows the suppliers to better manage their cash flow needs. The option given to the supplier does not change substantially the commercial agreements conditions between the Company and the supplier. As such, these transactions are presented in the operational cash flows for the period ended March 31, 2017 and December 31, 2016.

On March 31, 2017, the discount rates applied to the supply chain finance transactions agreed between our suppliers and the financial institutions in the internal market were set between 0.94% to 1.30% p.m. (1.08% to 1.33% p.m. on December 31, 2016).

On March 31, 2017, the discount rates applied to the supply chain finance transactions agreed between our suppliers and the financial institutions in the external market were set between 2.18% to 3.16% p.a. (2.06% to 3.03% p.a. on December 31, 2016).

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22. OTHER FINANCIAL ASSETS AND LIABILITIES

| Parent company |  | Consolidated
| 03.31.17 |  | 12.31.16 |  | 03.31.17 |  | 12.31.16
Derivatives designated as cash flow hedges |  |  |  |  |  |  |
Assets |  |  |  |  |  |  |
Non-deliverable forward (NDF) | 83,248 |  | 76,339 |  | 83,248 |  | 76,339
Currency option contracts | 105,439 |  | 118,741 |  | 105,439 |  | 118,741
Deliverable forwards contracts | - |  | - |  | 361 |  | 43
Non-deliverable forward of commodities (NDF) | 5,771 |  | 2,397 |  | 5,771 |  | 2,397
Corn and soymeal future contracts - BM&FBOVESPA | 172 |  | - |  | 172 |  | -
| 194,630 |  | 197,477 |  | 194,991 |  | 197,520
Liabilities |  |  |  |  |  |  |
Non-deliverable forward of currency (NDF) | (2,837) |  | (1,789) |  | (2,837) |  | (1,789)
Commodities (soy meal) non-deliverable forward (NDF) | (1,609) |  | (880) |  | (1,609) |  | (880)
Currency option contracts | (13,329) |  | (35,064) |  | (13,329) |  | (35,064)
Deliverable forwards contracts | - |  | - |  | - |  | (309)
Commodities (corn) non-deliverable forward (NDF) | (1,526) |  | (560) |  | (1,526) |  | (560)
Corn and soymeal future contracts - BM&FBOVESPA | - |  | (27) |  | - |  | (27)
Exchange rate contracts currency (Swap) | (145,807) |  | (162,140) |  | (161,607) |  | (184,165)
| (165,108) |  | (200,460) |  | (180,908) |  | (222,794)
Non derivatives designated as cash flow hedges |  |  |  |  |  |  |
Assets |  |  |  |  |  |  |
Non-deliverable forward of currency (NDF) | 4,082 |  | - |  | 4,082 |  | 46
Currency option contracts | 89 |  | - |  | 89 |  | -
Deliverable forwards contracts | - |  | - |  | - |  | 11
Exchange rate contracts currency (Swap) | 769 |  | 438 |  | 769 |  | 438
| 4,940 |  | 438 |  | 4,940 |  | 495
Liabilities |  |  |  |  |  |  |
Non-deliverable forward of currency (NDF) | (2,040) |  | (82,481) |  | (22,339) |  | (83,006)
Currency option contracts | (89) |  | - |  | (89) |  | -
Exchange rate contracts currency (Swap) | (172,407) |  | (218,541) |  | (172,407) |  | (218,541)
Dollar future contracts - BM&FBovespa | (577) |  | (5,230) |  | (577) |  | (5,230)
| (175,113) |  | (306,252) |  | (195,412) |  | (306,777)
Current assets | 199,570 |  | 197,915 |  | 199,931 |  | 198,015
Current liabilities | (340,221) |  | (506,712) |  | (376,320) |  | (529,571)

The collateral given in the transactions presented above are disclosed in note 7.

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23. LEASES

The Company is lessee in several contracts, which can be classified as operating or finance lease.

23.1. Operating lease

The minimum future payments of non-cancellable operating lease are presented below:

| Parent company |  | Consolidated
| 03.31.17 |  | 03.31.17
2017 | 278,142 |  | 346,087
2018 | 110,287 |  | 124,738
2019 | 45,491 |  | 53,289
2020 | 20,088 |  | 25,920
2021 | 14,314 |  | 19,764
2022 onwards | 45,384 |  | 57,097
| 513,706 |  | 626,895

The payments of operating lease agreements recognized as expense during the three-month period ended March 31, 2017 amounted to R$45,740 in the parent company and R$81,340 in the consolidated (R$50,695 in the parent company and R$85,287 in the consolidated during the three-month period ended March 31, 2016).

23.2. Finance lease

The Company enters into finance leases mainly for the acquisitions of machinery, equipment, vehicles, software and buildings, presented below:

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|  |  | Parent company |  | Consolidated
| Weighted average interest rate (p.a.) (1) |  | 03.31.17 |  | 12.31.16 |  | 03.31.17 |  | 12.31.16
Cost |  |  |  |  |  |  |  |  |
Machinery and equipment |  |  | 86,515 |  | 113,644 |  | 92,000 |  | 115,805
Software |  |  | 61,558 |  | 78,692 |  | 61,558 |  | 78,692
Vehicles |  |  | - |  | - |  | 492 |  | 491
Land |  |  | - |  | - |  | 1,666 |  | 1,662
Buildings |  |  | 160,952 |  | 141,732 |  | 163,671 |  | 144,446
|  |  | 309,025 |  | 334,068 |  | 319,387 |  | 341,096
Accumulated depreciation |  |  |  |  |  |  |  |  |
Machinery and equipment | 44.77% |  | (38,361) |  | (37,876) |  | (39,555) |  | (38,429)
Software | 80.00% |  | (17,716) |  | (63,483) |  | (17,716) |  | (63,483)
Vehicles | 20.00% |  | - |  | - |  | (260) |  | (259)
Buildings | 11.11% |  | (47,042) |  | (43,956) |  | (47,154) |  | (44,068)
|  |  | (103,119) |  | (145,315) |  | (104,685) |  | (146,239)
|  |  | 205,906 |  | 188,753 |  | 214,702 |  | 194,857

(1) The period of depreciation of leased assets corresponds to the lowest of term of the contract and the useful life of the asset, as determined by CVM Deliberation Nº 645/10.

The minimum future payments required for these finance leases are segregated as follows, and were recorded in current and non-current liabilities:

| Parent company
| 03.31.17
| Present value of minimum payments |  | Interest |  | Minimum future payments
2017 | 106,348 |  | 13,730 |  | 120,078
2018 | 35,199 |  | 15,906 |  | 51,105
2019 | 30,600 |  | 14,655 |  | 45,255
2020 | 21,654 |  | 10,385 |  | 32,039
2021 | 16,924 |  | 6,509 |  | 23,433
2022 onwards | 56,430 |  | 32,409 |  | 88,839
| 267,155 |  | 93,594 |  | 360,749

| Consolidated
| 03.31.17
| Present value of minimum payments |  | Interest |  | Minimum future payments
2017 | 108,706 |  | 15,703 |  | 124,409
2018 | 37,024 |  | 17,467 |  | 54,491
2019 | 31,641 |  | 15,540 |  | 47,181
2020 | 22,167 |  | 10,947 |  | 33,114
2021 | 16,924 |  | 6,509 |  | 23,433
2022 onwards | 58,994 |  | 33,912 |  | 92,906
| 275,456 |  | 100,078 |  | 375,534

The contract terms for both modalities, with respect to renewal, adjustment and purchase option, are according to market practices. In addition, there are no clauses of contingent payments or restrictions on dividends distribution, payments of interest on shareholders’ equity or obtaining debt.

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The Company also has commitments regarding financial leases, related to a “built to suit” agreement for the construction of office facilities will be build by third parties. The agreements terms will be 15 years from the signing date as well as the charge of rent expenses. If the Company defaults on its obligations, it will be subject to fines and/or acceleration of rent outstanding installments falling due, according to the term of each contract.

The estimated schedule of future payments related to these this agreement is set forth below:

|  | Parent company and Consolidated
|  | 03.31.17
2017 |  | 5,915
2018 |  | 8,359
2019 |  | 8,861
2020 |  | 9,393
2021 |  | 9,956
2022 onwards |  | 143,830
|  | 186,315

24. SHARE BASED PAYMENT

The rules of the stock options plan granted to executives were disclosed in the financial statements for the year ended December 31, 2016 (note 24) and are unchanged for this period.

According to the ordinary meeting of the Board of Directors held on March 30, 2017, were approved the granting of 863,528 stock options.

The breakdown of the outstanding granted options is presented as follows:

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Date |  | Quantity |  | Grant (1) |  | Price of converted share (1)
Grant date |  | Beginning of the year |  | End of the year |  | Options granted |  | Outstanding options |  | Fair value of the option |  | Granting date |  | Updated IPCA
Plan I |  |  |  |  |  |  |  |  |  |  |  |  |  |
05.02.12 |  | 05.01.13 |  | 05.01.17 |  | 3,708,071 |  | 284,021 |  | 7.82 |  | 34.95 |  | 48.32
05.02.13 |  | 05.01.14 |  | 05.01.18 |  | 3,490,201 |  | 689,894 |  | 11.88 |  | 46.86 |  | 60.84
04.04.14 |  | 04.03.15 |  | 04.03.19 |  | 1,552,564 |  | 550,524 |  | 12.56 |  | 44.48 |  | 54.70
05.02.14 |  | 05.01.15 |  | 05.01.19 |  | 1,610,450 |  | 867,443 |  | 14.11 |  | 47.98 |  | 58.61
12.18.14 |  | 12.17.15 |  | 12.17.19 |  | 5,702,714 |  | 4,374,055 |  | 14.58 |  | 63.49 |  | 75.55
|  |  |  |  |  | 16,064,000 |  | 6,765,937 |  |  |  |  |  |
Plan II |  |  |  |  |  |  |  |  |  |  |  |  |  |
04.26.16 |  | 04.30.17 |  | 04.30.21 |  | 8,724,733 |  | 6,050,000 |  | 9.21 |  | 56.00 |  | 57.87
05.31.16 |  | 05.31.17 |  | 05.31.20 |  | 3,351,220 |  | 3,120,440 |  | 10.97 |  | 46.68 |  | 47.86
03.30.17 |  | 03.30.17 |  | 03.31.21 |  | 863,528 |  | 863,528 |  | 9.45 |  | 38.43 |  | 38.43
|  |  |  |  |  | 12,939,481 |  | 10,033,968 |  |  |  |  |  |
|  |  |  |  |  | 29,003,481 |  | 16,799,905 |  |  |  |  |  |

(1) Amounts expressed in Brazilian Reais

The rollforward of the outstanding granted options for three-month period ended March 31, 2017 is presented as follows:

|  | Consolidated
Outstanding options as of December 31, 2016 |  | 16,506,807
Issued - grant of 2017 |  |
March 2017 |  | 863,528
Cancelled: |  |
Grant of 2016 |  | (189,170)
Grant of 2014 |  | (341,269)
Grant of 2013 |  | (30,091)
Grant of 2012 |  | (9,900)
Outstanding options as of March 31, 2017 |  | 16,799,905

The weighted average exercise prices of the outstanding options conditioned to services is R$59.51 (Fifty nine Brazilian Reais and fifty-one cents), and the weighted average of the remaining contractual term is 39 months.

The Company records as capital reserve in shareholders’ equity the fair value of the options in the amount of R$246,799 (R$236,208 as of December 31, 2016). During the three-month period ended March 31, 2017 the amount recognized as expense was R$10,591 (R$19,706 as of March 31, 2016).

During the three-month period ended March 31, 2017 there have been no exercised any

stock option by the Company’s executives.

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25. PENSION AND OTHER POST-EMPLOYMENT PLANS

25.1. Pension plans

The Company offers pension and other post-employment plans to the employees. The characteristics of such benefits were disclosed in the annual financial statements for the year ended December 31, 2016 (note 26) and have not been changed during this period.

The actuarial liabilities and the related effects in the statement of income are presented below:

| Parent company |  | Consolidated
| Liabilities |  | Liabilities
| 03.31.17 |  | 12.31.16 |  | 03.31.17 |  | 12.31.16
Medical assistance | 115,321 |  | 112,320 |  | 115,451 |  | 112,320
F.G.T.S. Penalty (1) | 127,715 |  | 137,190 |  | 141,970 |  | 137,190
Award for length of service | 49,338 |  | 52,018 |  | 53,825 |  | 52,018
Other | 26,937 |  | 28,563 |  | 29,496 |  | 28,563
| 319,311 |  | 330,091 |  | 340,742 |  | 330,091
Current | 72,339 |  | 76,707 |  | 76,707 |  | 76,707
Non-current | 246,972 |  | 253,384 |  | 264,035 |  | 253,384

(1) FGTS – Government Severance Indemnity Fund for Employees

The Company estimated costs for the year 2017, according to an appraisal report prepared in 2016 by an actuarial expert and recorded in statement of income for the period in counterpart to comprehensive income an expense of R$6,344 (expense of R$5,710 on March 31, 2016) in the parent company and R$10,651 (R$9,818 on March 31, 2016) in the consolidated.

26. PROVISION FOR TAX, CIVIL AND LABOR RISKS

The Company and its subsidiaries are involved in certain legal proceedings arising from the normal course of business, which include civil, administrative, tax, social security and labor claims.

The Company classifies the risk of unfavorable decisions in the legal proceedings as “probable”, “possible” or “remote”. The provisions recorded relating to such proceedings is determined by the Company’s management, based on legal advice and reasonably reflect the estimated probable losses.

The Company’s management believes that its provision for tax, civil and labor risks, accounted for according to CVM Deliberation Nº 594/09 is sufficient to cover estimated losses related to its legal proceedings, as presented below:

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26.1. Contingencies for probable losses

The rollforward of the provisions for tax, civil and labor risks is summarized below:

| Parent company
| Tax |  | Labor |  | Civil, commercial and other |  | Contingent liabilities |  | Total
|  |  |  |  |  |  |  |  | 03.31.17
Beginning balance | 256,461 |  | 434,397 |  | 117,325 |  | 496,034 |  | 1,304,217
Additions | 1,796 |  | 110,670 |  | 9,511 |  | - |  | 121,977
Reversals | (2,777) |  | (19,057) |  | (2,939) |  | (1) |  | (24,774)
Payments | (4,809) |  | (48,018) |  | (7,172) |  | - |  | (59,999)
Exchange rate variation | 6,082 |  | 16,754 |  | 6,203 |  | - |  | 29,039
Ending balance | 256,753 |  | 494,746 |  | 122,928 |  | 496,033 |  | 1,370,460
Current |  |  |  |  |  |  |  |  | 286,172
Non-current |  |  |  |  |  |  |  |  | 1,084,288

| Consolidated
| Tax |  | Labor |  | Civil, commercial and other |  | Contingent liabilities |  | Total
|  |  |  |  |  |  |  |  | 03.31.17
Beginning balance | 281,715 |  | 479,742 |  | 122,504 |  | 499,910 |  | 1,383,871
Additions | 7,559 |  | 133,998 |  | 12,767 |  | - |  | 154,324
Business combination | - |  | - |  | - |  | - |  | -
Reversals | (8,707) |  | (32,806) |  | (8,040) |  | (3,600) |  | (53,153)
Payments | (4,809) |  | (48,812) |  | (7,172) |  | - |  | (60,793)
Price index update | 6,082 |  | 16,802 |  | 6,203 |  | - |  | 29,087
Exchange rate variation | 51 |  | 105 |  | 10 |  | 8 |  | 174
Ending balance | 281,891 |  | 549,029 |  | 126,272 |  | 496,318 |  | 1,453,510
Current |  |  |  |  |  |  |  |  | 286,172
Non-current |  |  |  |  |  |  |  |  | 1,167,338

26.2. Contingencies classified as a risk of possible loss

The Company is involved in other tax, civil, labor and social security contingencies, for which losses have been assessed as possible by management with the support from legal counsel and therefore no provision was recorded. On March 31, 2017 the total amount of the possible contingencies was R$13,893,281 (R$13,667,857 as of December 31, 2016), of which R$496,318 (R$499,910 as of December 31, 2016) was recorded at fair value as a result of business combinations with Sadia, Avex and Dánica group, according to the requirements of paragraph 23 of CVM Deliberation Nº 665/11. The main natures of these contingencies were properly disclosed in the annual statements for the year ended December 31, 2016 (note 27.2).

27. SHAREHOLDERS’ EQUITY

27.1. Capital stock

On March 31, 2017, the capital subscribed and paid by the Company is R$12,553,418, which is composed of 812,473,246 book-entry shares of common stock without par value. The value of the capital stock is net of the public offering expenses of R$92,947.

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27.2. Breakdown of capital stock by nature

| Consolidated
| 03.31.17 |  | 12.31.16
Common shares | 812,473,246 |  | 812,473,246
Treasury shares | (13,468,001) |  | (13,468,001)
Outstanding shares | 799,005,245 |  | 799,005,245

27.3. Rollforward of outstanding shares

|  | Consolidated
|  |  |  | Quantity of outstanding of shares
|  | 03.31.17 |  | 12.31.16
Shares at the beggining of the period |  | 799,005,245 |  | 809,972,245
Purchase of treasury shares |  | - |  | (11,107,600)
Sale of treasury shares |  | - |  | 140,600
Shares at the end of the period |  | 799,005,245 |  | 799,005,245

27.4. Treasury shares

The Company has 13,468,001 shares in treasury, with an average cost of R$53.60 (fifty three Brazilian Reais and sixty cents) per share, with a market value corresponding to R$520,000.

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28. EARNINGS PER SHARE

| Parent company
| 03.31.17 |  | 03.31.16
Basic numerator |  |  |
Net (loss) profit for the period attributable to controlling shareholders | (281,434) |  | 39,062
Basic denominator |  |  |
Common shares | 812,473,246 |  | 812,473,246
Weighted average number of outstanding shares - basic (except treasury shares) | 799,005,245 |  | 806,871,604
Net (loss) earnings per share basic - R$ | (0.35223) |  | 0.04841
Diluted numerator |  |  |
Net (loss) profit for the period attributable to controlling shareholders | (281,434) |  | 39,062
Diluted denominator |  |  |
Weighted average number of outstanding shares - basic (except treasury shares) | 799,005,245 |  | 806,871,604
Number of potential shares (stock options) | - |  | 59,229
Weighted average number of outstanding shares - diluted | 799,005,245 |  | 806,930,833
Net (loss) earnings per share diluted - R$ | (0.35223) |  | 0.04841

Diluted results is calculated considering the numbers of dilutive potential ordinary shares (stock options). However, due to loss disclosed for the period ended March 31, 2017, the numbers of dilutive potential ordinary shares (stock options) has antidilutive effect and therefore was not considered in the calculation of loss per share diluted.

29. RELATED PARTIES – PARENT COMPANY

As part of the Company’s operations, rights and obligations arise between related parties, resulting from transactions of purchase and sale of products, loans agreed on normal conditions of market for similar transactions, based on contracts.

All the relationships between the Company and its subsidiaries were disclosed irrespective of the existence or not of transactions between these parties.

All the transactions and balances among the companies were eliminated in the consolidation and refer to commercial and/or financial transactions.

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29.1. Transactions and balances

The balances of the transactions with the related parties are as follow:

| Accounts receivable |  | Dividends and interest on the shareholders' equity receivable |  | Loan contracts |  | Trade accounts payable |  | Advance for future capital increase | Other rights |  | Other obligations
| 03.31.17 |  | 12.31.16 |  | 03.31.17 |  | 12.31.16 |  | 03.31.17 |  | 12.31.16 |  | 03.31.17 |  | 12.31.16 |  | 03.31.17 |  | 03.31.17 |  | 12.31.16 |  | 03.31.17 |  | 12.31.16
AKF | - |  | - |  | - |  | - |  | - |  | - |  | (267) |  | - |  | - |  | - |  | - |  | - |  | -
Al-Wafi Food Products Factory LLC | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | 31 |  | 31 |  | (279) |  | (281)
Avex S.A. | 73,408 |  | 51,812 |  | - |  | - |  | - |  | - |  | (134) |  | - |  | - |  | 25,468 |  | 25,468 |  | - |  | -
BFF International Ltd. | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | 1,728 |  | 1,777 |  | - |  | -
BRF Al Yasra | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | 163 |  | (3,188) |  | (3,279)
BRF Energia S.A. | - |  | - |  | - |  | - |  | - |  | - |  | (178) |  | - |  | 1,205 |  | - |  | - |  | - |  | -
BRF Foods GmbH | 1,284 |  | 148,947 |  | - |  | - |  | - |  | - |  | (50) |  | (51) |  | - |  | 233 |  | 233 |  | (3,093) |  | -
BRF Foods LLC | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | 372 |  | 342 |  | - |  | -
BRF Global GmbH | 5,441,753 |  | 6,823,021 |  | - |  | - |  | 95,962 |  | 97,773 |  | (1,222) |  | (13,436) |  | - |  | - |  | - |  | (4,382,712) | (1) | (4,702,753)
BRF GmbH | - |  | - |  | - |  | - |  | - |  | - |  | (13) |  | (14) |  | - |  | - |  | - |  | (1,173) |  | (1,171)
BRF Hong Kong | 175 |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | -
Campo Austral | 6,216 |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | -
Federal Foods | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | (64) |  | (72)
FFM Further | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | 70 |  | - |  | - |  | -
Highline International Ltd. | - |  | - |  | - |  | - |  | (5,778) |  | (5,944) |  | - |  | - |  | - |  | - |  | - |  | - |  | -
K&S Alimentos S.A. | - |  | - |  | 7,026 |  | 7,026 |  | - |  | - |  | - |  | - |  | - |  | 8 |  | - |  | - |  | -
Perdigão International Ltd. | - |  | - |  | - |  | - |  | (29,341) |  | (29,429) |  | - |  | - |  | - |  | 357 |  | 301 |  | (964,731) | (1) | (991,477)
PSA Laboratório Veterinário Ltda. | - |  | - |  | 1,344 |  | 1,344 |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | -
Quickfood S.A. | 45,880 |  | 23,661 |  | - |  | - |  | - |  | - |  | - |  | (251) |  | - |  | - |  | - |  | (675) |  | (377)
Sadia Alimentos S.A. | 16,548 |  | 14,910 |  | - |  | - |  | - |  | - |  | (110) |  | (112) |  | - |  | - |  | - |  | - |  | -
Sadia Chile S.A. | 33,314 |  | 35,484 |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | -
Sadia Uruguay S.A. | 8,681 |  | 10,552 |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | -
SHB com. e ind. de alim. S.A | 404,125 |  | - |  | - |  | - |  | - |  | - |  | (197,315) |  | - |  | - |  | 22,278 |  | - |  | (128,117) |  | -
UP! Alimentos Ltda. | 1,106 |  | 1,098 |  | - |  | 7,448 |  | - |  | - |  | (17,023) |  | (13,118) |  | - |  | 3,732 |  | 3,410 |  | - |  | -
VIP S.A. Empreendimentos e Partic. Imob. | - |  | - |  | 1,051 |  | 1,050 |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | -
Wellax Foods Logistics C.P.A.S.U. Lda. | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | 147 |  | 371 |  | - |  | -
Corall Consultoria LTDA. | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | (496)
Instituto de Desenvolvimento Gerencial S.A. | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | (54)
Edavila Consultoria Empresarial Eireli | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | (40)
Total | 6,032,490 |  | 7,109,485 |  | 9,421 |  | 16,868 |  | 60,843 |  | 62,400 |  | (216,312) |  | (26,982) |  | 1,205 |  | 54,424 |  | 32,096 |  | (5,484,032) |  | (5,700,000)

(1) The amount corresponds to advances for future export pre-payment. Other information about PPE’s are disclosed in note 4.2.2.a.

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| Revenue |  | Financial results, net |  | Purchases
| 03.31.17 |  | 03.31.16 |  | 03.31.17 |  | 03.31.16 |  | 03.31.17 |  | 03.31.16
Al-Wafi Foods | - |  | 25,909 |  | - |  | - |  | - |  | -
Avex S.A. | 21,531 |  | 11,775 |  | - |  | - |  | (134) |  | (276)
BRF Energia S.A. | - |  | - |  | - |  | - |  | (9,670) |  | -
BRF Foods GmbH | 2,748 |  | - |  | - |  | - |  | - |  | (49)
BRF Global GmbH | 1,518,544 |  | 2,668,713 |  | (29,275) |  | (431) |  | - |  | -
BRF Hong Kong | 175 |  | - |  | - |  | - |  | - |  | -
Campo Austral | 6,206 |  | - |  | - |  | - |  | - |  | -
Perdigão International Ltd. | - |  | - |  | (13,655) |  | (17,111) |  | - |  | -
Quickfood S.A. | 22,029 |  | 8,614 |  | - |  | - |  | (167) |  | (382)
Sadia Alimentos S.A. | 1,636 |  | - |  | - |  | - |  | - |  | -
Sadia Chile S.A. | 33,017 |  | 39,999 |  | - |  | - |  | - |  | -
Sadia Uruguay S.A. | 3,125 |  | 3,511 |  | - |  | - |  | - |  | -
SHB com. e ind. de alim. S.A | 1,060,616 |  | - |  | - |  | - |  | (585,119) |  | -
UP! Alimentos Ltda. | 3,615 |  | 3,410 |  | - |  | - |  | (50,512) |  | (45,454)
Hortigil Hortifruti S.A. (2) | - |  | 3,467 |  | - |  | - |  | - |  | -
Instituto de Desenvolvimento Gerencial S.A. (1) | - |  | - |  | - |  | - |  | - |  | (3,326)
Edavila Consultoria Empresarial Eireli (1) | - |  | - |  | - |  | - |  | (40) |  | -
Total | 2,673,242 |  | 2,765,398 |  | (42,930) |  | (17,542) |  | (645,642) |  | (49,487)

(1) Entity on which BRF has no equity interest, but have relationship with the Board of Directors, and provided services to the Company: (i) Corall Consultoria Ltda: provided organizational development consulting services; (ii) Instituto de Desenvolvimento Gerencial S.A.: provided advisory services related to strategic management and organizational restructure, and (iii) Edavila Consultoria Empresarial Eireli: provided consulting service related international marketing and innovation.

(2) Since April 08th , 2016, the entity doesn’t related parties, because Board of Director member has no more relationship with this entity.

All companies presented in note 1.1 are controlled by BRF, except for UP! Alimentos, PP-BIO, PR-SAD and SATS BRF which are associates or joint ventures.

The Company also recorded a liability in the amount of R$5,559 (R$6,150 as of December 31, 2016) related to the fair value of the guarantees offered to BNDES concerning a loan made by Instituto Sadia de Sustentabilidade.

Due to the acquisition of biodigesters from Instituto Sadia de Sustentabilidade, as of March 31, 2017 the Company recorded a payable to this entity of R$20,103 included in other liabilities (R$22,239 as of December 31, 2016).

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The Company entered into loans agreement with its subsidiaries. Below is a summary of the balances and rates charged for the transactions at the balance sheet date:

Counterparty |  |  |  | Balance |  | Interest rate (p.a.)
Creditor |  | Debtor |  | Currency |  | 03.31.17 |
Campo Austral S.A. |  | Buenos Aires Fortune S.A. |  | ARS |  | 948,748 |  | 20.0%
BRF GmbH |  | Federal Foods Qatar |  | US$ |  | 522,786 |  | 2.5%
BRF GmbH |  | BRF Global GmbH |  | EUR |  | 406,914 |  | 0.7%
Sadia Overseas Ltd. |  | BRF Global GmbH |  | US$ |  | 288,603 |  | 6.9%
BRF GmbH |  | Al Wafi Al Takamol |  | US$ |  | 279,721 |  | 1.1%
Eclipse Holding Cooperatief |  | Eclipse LATAM Holdings |  | EUR |  | 254,600 |  | 20.0%
BRF GmbH |  | BRF Foods GmbH |  | US$ |  | 243,129 |  | 1.6%
BRF Global GmbH |  | BFF International Ltd. |  | US$ |  | 237,431 |  | 1.5%
Sadia International Ltd. |  | Wellax Food Logistics |  | US$ |  | 181,504 |  | 1.5%
BRF GmbH |  | BRF Invicta |  | GBP |  | 147,952 |  | 3.0%
Perdigão International Ltd. |  | BRF Global GmbH |  | US$ |  | 144,293 |  | 3.2%
BRF GmbH |  | Federal Foods |  | US$ |  | 100,122 |  | 1.1%
BRF S.A |  | BRF Global GmbH |  | US$ |  | 95,962 |  | 3.0%
BRF GmbH |  | BRF Holland B.V. |  | EUR |  | 79,628 |  | 3.0%
BRF GmbH |  | BRF Foods LLC |  | US$ |  | 65,625 |  | 2.5%
BRF Holland B.V. |  | BRF B.V. (NL) |  | EUR |  | 40,878 |  | 3.0%
Campo Austral S.A. |  | Itega |  | ARS |  | 38,395 |  | 20.0%
Perdigão International Ltd. |  | BRF S.A |  | US$ |  | 29,341 |  | 1.4%
BRF GmbH |  | BRF Hong Kong |  | US$ |  | 9,539 |  | 3.6%
BRF GmbH |  | AL Wafi |  | US$ |  | 9,418 |  | 1.2%
Perdigão International Ltd. |  | BRF Foods LLC |  | US$ |  | 3,891 |  | 1.0%
BRF GmbH |  | BRF Singapore |  | SGD |  | 3,060 |  | 1.5%
BRF Holland B.V. |  | BRF Wrexam |  | GBP |  | 2,247 |  | 3.0%
Wellax Food Logistics |  | BRF Foods LLC |  | US$ |  | 2,012 |  | 7.0%
BRF Invicta Food |  | BRF Invicta |  | GBP |  | 1,988 |  | 0.7%
BRF GmbH |  | BRF Global GmbH |  | US$ |  | 1,166 |  | 3.3%
BRF GmbH |  | BRF Austria Gmbh |  | US$ |  | 731 |  | 4.0%

29.2. Other Related Parties

The Company leased properties owned by FAF. For the three-month period ended March 31, 2017, the total amount paid as rent was R$3,638 (R$3,638 during the three-month period ended March 31, 2016). The rent value was set based on market conditions.

29.3. Granted guarantees

All granted guarantees on behalf of related parties were disclosed in note 19.2.

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29.4. Management remuneration

The management key personnel include the directors and officers, members of the executive committee and the head of internal audit.

The total remuneration and benefits paid to these professionals are demonstrated below:

| Consolidated
| 03.31.17 |  | 03.31.16
Salary and profit sharing | 6,836 |  | 9,239
Short term benefits (1) | 58 |  | 199
Private pension | 167 |  | 203
Post-employment benefits | 4 |  | 46
Termination benefits | 840 |  | 1,909
Share based payment | 4,805 |  | 3,281
| 12,711 |  | 14,877

(1) Comprises: Medical assistance, educational expenses and others.

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30. NET SALES

| Parent company |  | Consolidated
| 03.31.17 |  | 03.31.16 |  | 03.31.17 |  | 03.31.16
Gross sales |  |  |  |  |  |  |
Brazil | 4,666,031 |  | 4,358,417 |  | 4,664,095 |  | 4,358,417
Europe | 723,877 |  | 592,051 |  | 995,843 |  | 1,019,294
One Foods | 1,148,092 |  | 1,234,874 |  | 1,484,066 |  | 1,777,149
Africa | 154,567 |  | 158,605 |  | 146,447 |  | 177,052
Asia | 748,061 |  | 786,046 |  | 950,936 |  | 1,091,385
LATAM | 214,605 |  | 136,425 |  | 619,672 |  | 533,674
Other segments | 173,550 |  | 256,299 |  | 318,705 |  | 381,479
| 7,828,783 |  | 7,522,717 |  | 9,179,764 |  | 9,338,450
Sales deductions |  |  |  |  |  |  |
Brazil | (1,008,773) |  | (817,771) |  | (1,010,415) |  | (817,762)
Europe | (8,027) |  | (7,293) |  | (67,246) |  | (61,397)
One Foods | (121,098) |  | (19,553) |  | (167,690) |  | (193,402)
Africa | (1,060) |  | (3,366) |  | (3,595) |  | (966)
Asia | (5,930) |  | (32,580) |  | (8,037) |  | (20,218)
LATAM | (621) |  | (1,086) |  | (92,134) |  | (95,942)
Other segments | (30,733) |  | (26,076) |  | (21,198) |  | (28,433)
| (1,176,242) |  | (907,725) |  | (1,370,315) |  | (1,218,120)
Net sales |  |  |  |  |  |  |
Brazil | 3,657,258 |  | 3,540,646 |  | 3,653,680 |  | 3,540,655
Europe | 715,850 |  | 584,758 |  | 928,597 |  | 957,897
One Foods | 1,026,994 |  | 1,215,321 |  | 1,316,376 |  | 1,583,747
Africa | 153,507 |  | 155,239 |  | 142,852 |  | 176,086
Asia | 742,131 |  | 753,466 |  | 942,899 |  | 1,071,167
LATAM | 213,984 |  | 135,339 |  | 527,538 |  | 437,732
Other segments | 142,817 |  | 230,223 |  | 297,507 |  | 353,046
| 6,652,541 |  | 6,614,992 |  | 7,809,449 |  | 8,120,330

31. RESEARCH AND DEVELOPMENT COSTS

Consist of expenditures on internal research and development of new products which are recognized when incurred. The expenditures amounted to R$9,635 for the three-month ended March 31, 2017 (R$11,359 during the three-month period ended March 31, 2016).

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32. OTHER OPERATING INCOME (EXPENSES), NET

| Parent company |  | Consolidated
| 03.31.17 |  | 03.31.16 |  | 03.31.17 |  | 03.31.16
Income |  |  |  |  |  |  |
Recovery of expenses | 45,352 |  | 26,853 |  | 45,544 |  | 27,598
Provision reversal | 6,557 |  | 1,085 |  | 6,557 |  | 1,085
Scrap sales | 2,379 |  | 2,548 |  | 3,561 |  | 3,126
Other | 4,343 |  | 13,414 |  | 8,807 |  | 14,742
| 58,631 |  | 43,900 |  | 64,469 |  | 46,551
Expenses |  |  |  |  |  |  |
Provision for civil, labor and tax risks | (54,616) |  | (20,339) |  | (56,134) |  | (20,339)
Extraordinary expenses -Weak Flesh Operation (1) | (39,368) |  | - |  | (39,808) |  | -
Transaction with Lactalis | (35,319) |  | - |  | (35,319) |  | -
Idleness costs (2) | (19,219) |  | (7,538) |  | (24,050) |  | (13,932)
Other employees benefits | (16,254) |  | (15,525) |  | (17,854) |  | (15,808)
Stock options plan | (10,591) |  | (1,909) |  | (10,591) |  | (1,909)
Insurance claims costs | (7,807) |  | (7,603) |  | (8,238) |  | (7,575)
Allowance for doubtful accounts | (5,349) |  | (2,225) |  | (5,273) |  | (2,206)
Net loss on the disposals of property, plant and equipment | (6,999) |  | (5,874) |  | (4,327) |  | (5,461)
Management profit sharing | - |  | (3,529) |  | - |  | -
Other | (30,663) |  | (13,141) |  | (39,789) |  | (25,744)
| (226,185) |  | (77,683) |  | (241,383) |  | (92,974)
| (167,554) |  | (33,783) |  | (176,914) |  | (46,423)

(1) Related to the weak flesh operation.

(2) Idleness cost includes depreciation charge R$8,335 (R$3,453 during the three-month period ended March 31, 2016) in the parent company and R$9,767 (R$3,783 during the three-month period ended March 31, 2016) in the consolidated.

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33. FINANCIAL INCOME (EXPENSES), NET

| Parent company |  | Consolidated
| 03.31.17 |  | 03.31.16 |  | 03.31.17 |  | 03.31.16
Financial income |  |  |  |  |  |  |
Exchange rate variation on other assets | - |  | - |  | 194,180 |  | -
Exchange rate variation on loans and financing | 57,564 |  | 657,294 |  | 156,695 |  | 657,145
Interest on cash and cash equivalents | 59,812 |  | 12,868 |  | 69,066 |  | 34,166
Interest on assets | 60,089 |  | 95,885 |  | 62,407 |  | 96,479
Interests on financial assets classified as |  |  |  |  |  |  |
Held to maturity | 21,274 |  | 21,703 |  | 21,274 |  | 21,703
Held for trading | 5,984 |  | 6,416 |  | 6,228 |  | 10,817
Available for sale | - |  | - |  | 4,505 |  | -
Exchange rate variation of foreign on net assets (1) | - |  | - |  | 9,052 |  | -
Exchange rate variation on liabilities | 171,963 |  | 205,002 |  | - |  | 132,761
Others | 943 |  | - |  | 2,162 |  | -
| 377,629 |  | 999,168 |  | 525,569 |  | 953,071
Financial expenses |  |  |  |  |  |  |
Interest on loans and financing | (264,984) |  | (192,574) |  | (354,018) |  | (233,993)
Losses on derivative transactions, net | (236,026) |  | (604,665) |  | (234,250) |  | (581,389)
Exchange rate variation on other liabilities | - |  | - |  | (147,873) |  | -
Adjustment to present value | (65,951) |  | (74,740) |  | (78,148) |  | (74,612)
Interest on liabilities | (44,146) |  | (47,870) |  | (46,583) |  | (48,538)
Exchange rate variation on marketable securities | (112) |  | (485) |  | (32,580) |  | (105,685)
Exchange rate variation of foreign on net assets (1) | - |  | - |  | - |  | (265,530)
Exchange rate variation on assets | (20,501) |  | (69,166) |  | - |  | (125,814)
Financial expenses on accounts payable | - |  | (67,028) |  | - |  | (67,028)
Interest expenses on loans to related parties | (42,930) |  | (17,542) |  | - |  | -
Others | (22,140) |  | (31,268) |  | (44,662) |  | (54,772)
| (696,790) |  | (1,105,338) |  | (938,114) |  | (1,557,361)
| (319,161) |  | (106,170) |  | (412,545) |  | (604,290)

(1) Refers to gains and losses on translation of assets and liabilities reported by the Company’s subsidiaries whose functional currency is Real.

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(CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) ITR – Quarterly Information – March 31, 2017 – BRF S.A. Explanatory Notes (in thousands of Brazilian Reais) |

34. STATEMENT OF INCOME BY NATURE

The Company has chosen to disclose its statement of income by function and thus presents below the details by nature:

| Parent company |  | Consolidated
| 03.31.17 |  | 03.31.16 |  | 03.31.17 |  | 03.31.16
Costs of sales |  |  |  |  |  |  |
Costs of goods | 4,051,008 |  | 3,597,135 |  | 4,483,772 |  | 4,377,704
Depreciation | 272,594 |  | 281,737 |  | 345,469 |  | 303,870
Amortization | 1,113 |  | 917 |  | 1,612 |  | 1,480
Salaries and employees benefits | 706,673 |  | 776,919 |  | 947,030 |  | 863,297
Others | 384,824 |  | 505,137 |  | 582,057 |  | 543,254
| 5,416,212 |  | 5,161,845 |  | 6,359,940 |  | 6,089,605
Sales expenses |  |  |  |  |  |  |
Depreciation | 14,556 |  | 12,545 |  | 15,474 |  | 13,549
Amortization | 1,854 |  | 1,985 |  | 6,799 |  | 4,126
Salaries and employees benefits | 213,055 |  | 212,108 |  | 288,257 |  | 290,519
Indirect and direct logistics expenses | 311,247 |  | 433,584 |  | 516,891 |  | 554,061
Others | 208,493 |  | 252,641 |  | 255,355 |  | 345,365
| 749,205 |  | 912,863 |  | 1,082,776 |  | 1,207,620
Administrative expenses |  |  |  |  |  |  |
Depreciation | 4,374 |  | 2,912 |  | 5,923 |  | 5,084
Amortization | 22,765 |  | 18,256 |  | 52,460 |  | 40,509
Salaries and employees benefits | 23,300 |  | 26,316 |  | 64,558 |  | 60,648
Fees | 5,440 |  | 7,685 |  | 7,006 |  | 7,718
Others | (423) |  | 13,644 |  | (796) |  | 19,836
| 55,456 |  | 68,813 |  | 129,151 |  | 133,795
Other operating expenses (1) |  |  |  |  |  |  |
Depreciation | 8,335 |  | 3,453 |  | 9,767 |  | 3,783
Others | 217,850 |  | 74,230 |  | 231,616 |  | 89,191
| 226,185 |  | 77,683 |  | 241,383 |  | 92,974

(1) The composition of other operating expenses is disclosed in note 32.

35. NEW ACCOUNTING STANDARDS AND PRONOUNCEMENTS RECENTLY ADOPTED AND NOT YET ADOPTED

During the three-month period ended March 31, 2017, the Company has not been required to adopted new accounting standards and pronouncements. Therefore, it is necessary to read this interim financial statement in conjunction with the financial statements for the year ended December 31, 2016 in order to obtain the details of recently adopted or not yet adopted accounting pronouncements.

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(CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) ITR – Quarterly Information – March 31, 2017 – BRF S.A. Explanatory Notes (in thousands of Brazilian Reais) |

36. APPROVAL OF THE CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements were approved by the Board of Directors on May 11, 2017.

BOARD OF DIRECTORS (1)
Chairman (Independent) | Abilio dos Santos Diniz
Vice-Chairman (Non-independent) Independent Member Independent Member Non-independent member Independent Member Independent Member Independent Member Independent Member Non-independent member | Francisco Petros O. L. Papathanasiadis Walter Fontana Filho Luiz Fernando Furlan José Carlos Reis de M. Neto Flávia Buarque de Almeida José Aurélio Drummond Júnior Marcos Guimarães Grasso Carlos da C. Parcias Júnior Walter Malieni Júnior

(1) The members of the Board of Directors were elected in Ordinary and Extraordinary General Meeting held on April 26, 2017.

FISCAL COUNCIL (2)
Chairman | Attílio Guaspari
Effective Member | Marcus Vinicius D. Severini
Effective Member | Antônio Carlos Rovai

(2) The members of the Fiscal Council were elected in Ordinary and Extraordinary General Meeting held on April 26, 2017.

AUDIT COMITTEE (3)
Coordinator (Non-independent) | Francisco Petros O. L. Papathanasiadis
Independent Member | Walter Fontana Filho
Non-independent member | Walter Malieni Júnior
External Member and Financial Specialist External Member | Fernando Maida Dall`Acqua Sérgio Ricardo Silva Rosa

(3) The members of the Audit Comittee were elected in Board of Directors Meeting held on March 27, 2017.

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(CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) ITR – Quarterly Information – March 31, 2017 – BRF S.A. Explanatory Notes (in thousands of Brazilian Reais) |

BOARD OF EXECUTIVE OFFICERS (4)
Chief Executive Officer Global / Vice President of Finance, and Investor Relations | Pedro de Andrade Faria
Vice President of Operations | Hélio Rubens M. dos Santos Júnior
Vice President of Corporate Integrity | José Roberto Pernomian Rodrigues
Vice President of People | Artur Paranhos Tacla
Vice President of Supply Chain | Leonardo Almeida Byrro

(4) The members of the Board of Executive Officers were elected in Board of Directors Meeting held on July 11, 2016.

Marcos Roberto Badollato

Controller

CRC 1SP219369/O-4

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(CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) ITR – Quarterly Information – March 31, 2017 – BRF S.A. BREAKDOWN OF THE CAPITAL BY OWNER (NOT REVIEWED) |

The shareholding position of the largest shareholders, management, members of the Board of Directors and Audit Committee of the Company is presented below:

|  | 03.31.17 |  | 12.31.16
Shareholders | Quantity | % | Quantity | %
Major shareholders |  |  |  |
Tarpon | 97,032,185 | 11.94 | 95,984,835 | 11.81
Fundação Petrobras de Seguridade Social - Petros (1) | 92,783,299 | 11.42 | 92,761,499 | 11.42
Caixa de Previd. dos Func. Do Banco do Brasil (1) | 86,691,252 | 10.67 | 86,628,752 | 10.66
BlackRock, Inc | 41,681,041 | 5.13 | 33,893,720 | 4.17
Management |  |  |  |
Board of Directors | 37,348,439 | 4.60 | 37,348,439 | 4.60
Executives | 167,952 | 0.02 | 50,252 | 0.01
Treasury shares | 13,468,001 | 1.66 | 13,468,001 | 1.66
Other | 443,301,077 | 54.56 | 452,337,748 | 55.67
| 812,473,246 | 100.00 | 812,473,246 | 100.00
(1) The pension funds are controlled by employees that participate in the respective companies. |

The shareholding position of the controlling shareholders that belong to the voting agreement and/or holders of more than 5% of the voting stock are presented below:

|  | 03.31.17 |  | 12.31.16
Shareholders | Quantity | % | Quantity | %
Tarpon | 97,032,185 | 11.94 | 95,984,835 | 11.81
Fundação Petrobras de Seguridade Social - Petros (1) | 92,783,299 | 11.42 | 92,761,499 | 11.42
Caixa de Previd. dos Func. Do Banco do Brasil (1) | 86,691,252 | 10.67 | 86,628,752 | 10.66
BlackRock, Inc | 41,681,041 | 5.13 | 33,893,720 | 4.17
| 318,187,777 | 39.16 | 309,268,806 | 38.06
Other | 494,285,469 | 60.84 | 503,204,440 | 61.94
| 812,473,246 | 100.00 | 812,473,246 | 100.00
(1) The pension funds are controlled by employees that participate in the respective companies. |

The Company is bound to arbitration in the Market Arbitration Chamber, as established by the arbitration clause in the by-laws.

127

A free translation from Portuguese into English of Independent Auditor’s Report on Review of Quarterly Financial Information

Report on Review of Interim Financial Information

To the Board of Directors and Shareholders of

BRF S.A.

Itajaí - SC

##

##

## Introduction

We have reviewed the accompanying individual and consolidated interim financial information of BRF S.A. (“Company”) contained in the Quarterly Information Form - ITR for the quarter ended March 31, 2017, which comprises the statement of financial position as of March 31, 2017, and the respective statements of profit or loss, other comprehensive income, changes in equity and cash flows for the three-month period then ended, including the footnotes.

The Company's management is responsible for the preparation of this interim financial information in accordance with Technical Pronouncement CPC 21 (R1) – Interim Financial Reporting and IAS 34 – Interim Financial Reporting, issued by the International Accounting Standards Board – IASB, as well as for the presentation of this information in accordance with standards issued by the Brazilian Securities and Exchange Commission, applicable to the preparation of Quarterly Information - 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 the Brazilian and International standards on review engagements of interim financial information (NBC TR 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity and ISRE 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively). A review of interim financial information consists of making inquiries, primarily of persons responsible for the financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with the audit standards and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

## Conclusion on the 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 has not been prepared, in all material respects, in accordance with CPC 21 (R1) and IAS 34, issued by IASB, applicable to the preparation of Quarterly Information - ITR, and presented in accordance with the standards issued by the Brazilian Securities and Exchange Commission.

Emphasis of matter

## We draw attention to explanatory note 1.4 to the interim financial information, which discloses information about the events, the measures taken by the Company and the potential consequences in the scope of the operation named Carne Fraca. Our conclusion is unmodified in respect to this matter.

##

## Other matters

##

## Statements of Value Added

The individual and consolidated interim financial information, related to statements of value added for the quarter ended March 31, 2017, prepared under the responsibility of the Company's management, presented as supplementary information for the purposes of IAS 34, were submitted to the review procedures followed together with the review of the Quarterly Information – ITR of the Company. In order to form our opinion, we evaluated whether these statements are reconciled to the interim financial information and to the accounting records, as applicable, and whether their form and content are in accordance with the criteria set on Technical Pronouncement CPC 09 - Statement of Value Added. Based on our review, nothing has come to our attention that causes us to believe that it has not been prepared, in all material respects, in accordance with the individual and consolidated interim financial information taken as a whole.

128

A free translation from Portuguese into English of Independent Auditor’s Report on Review of Quarterly Financial Information

Corresponding values
The individual and consolidated corresponding values comprising the statement of financial position for the year ended December 31, 2016 were previously audited by other independent auditors who issued an unmodified audit report on February 23, 2017 and the statements of profit and loss, comprehensive (loss) income, changes in shareholders’ equity, cash flows for the three months period ended March 31, 2016 were reviewed by other independent auditors respectively, who issued an unqualified review report on April 28, 2016. The individual and consolidated corresponding values comprising the statements of added-value for the three months period ended March 31, 2016, were submitted to the same review procedures by those independent auditors and, based on their review, those independent auditors issued a report reporting that nothing has come to their attention that causes us to believe that the statement of the added-value has not been prepared, in all material respects, in accordance with the individual and consolidated interim financial information taken as a whole.

São Paulo, May 11, 2017

KPMG Auditores Independentes
CRC 2SP014428/O-6

Original report in Portuguese signed by
Guilherme Nunes
Contador CRC 1SP195631/O-1

129

(CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) ITR – Quarterly Information – March 31, 2017 – BRF S.A. OPINION OF THE AUDIT COMMITTEE (1)

The Audit Committee of BRF S.A., in fulfilling its statutory and legal duties, reviewed:

(i) the quarterly financial information (parent company and consolidated) for the three-month period ended on March 31, 2017;

(ii) the Management Report; and

(iii) opinion report issued by KPMG Auditores Independentes.

Based on the documents reviewed and on the explanations provided, the members of the Audit Committee, undersigned, issued an opinion for the approval of the financial information identified above.

São Paulo, May 11, 2017.

Francisco Petros O. L. Papathanasiadis

Coordinator (Non-independent)

Walter Fontana Filho

Independent Member

Walter Malieni Júnior

Non-independent member

Fernando Maida Dall`Acqua

External Member and Financial Specialist

Sérgio Ricardo Silva Rosa

External Member

(1) On April 04, 2017, in Ordinary and Extraordinary General Meeting, the election of the new Audit Comittee was approved, as follows: Francisco Petros Oliveira Lima (Vice-presidente of the Board of Directors and Coordinator of the Audit Comittee), Walter Fontana Filho (independent member), Walter Malieni Jr (independent member), Fernando Maida Dall Acqua (External Member and Financial Specialist) e Sérgio Ricardo Silva Rosa (external member).

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(CONVENIENCE TRANSLATION INTO ENGLISH FROM THE ORIGINAL PREVIOUSLY ISSUED IN PORTUGUESE) ITR – Quarterly Information – March 31, 2017 – BRF S.A. STATEMENT OF EXECUTIVE BOARD ON THE QUARTELY FINANCIAL INFORMATION AND INDEPENDENT AUDITOR’S REPORT ON REVIEW OF INTERIM FINANCIAL INFORMATION (1)

In compliance with the dispositions of sections V and VI of article 25 of CVM Instruction No. 480/09, the executive board of BRF S.A., states:

(i) reviewed, discussed and agreed with the Company's quarterly financial information for the three-month period ended on March 31, 2017, and

(ii) reviewed, discussed and agreed with conclusions expressed in the review report issued by KPMG Auditores Independentes. for the Company's quarterly financial information for the three-month period ended on March 31, 2017.

São Paulo, May 11, 2017.

Pedro de Andrade Faria

Chief Executive Officer Global / Vice President of Finance and Investor Relations

Artur Paranhos Tacla

Vice President of People

Hélio Rubens Mendes dos Santos Junior

Vice President of Operations

José Roberto Pernomian Rodrigues

Vice President of Corporate Integrity

Leonardo Almeida Byrro

Vice President of Supply Chain

(1) The members of the Board of Executive Officers were elected in Board of Directors Meeting held on July 11, 2016.

131