EX-99.1 2 ex99-1.htm EX-99.1

INDEX

STATEMENT OF FINANCIAL POSITION | 4
STATEMENT OF INCOME (LOSS) | 5
STATEMENT OF COMPREHENSIVE INCOME (LOSS) | 6
STATEMENT OF CHANGES IN EQUITY | 7
STATEMENT OF CASH FLOWS | 8
STATEMENT OF VALUE ADDED | 9
MANAGEMENT REPORT | 10
1. COMPANY’S OPERATIONS | 37
2. BASIS OF PREPARATION AND PRESENTATION OF INTERIM FINANCIAL STATEMENTS | 42
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 42
4. CASH AND CASH EQUIVALENTS | 43
5. MARKETABLE SECURITIES | 44
6. TRADE ACCOUNTS RECEIVABLE AND OTHER RECEIVABLES | 44
7. INVENTORIES | 46
8. BIOLOGICAL ASSETS | 47
9. RECOVERABLE TAXES | 49
10. INCOME AND SOCIAL CONTRIBUTION TAXES | 51
11. JUDICIAL DEPOSITS | 53
12. INVESTMENTS | 54
13. PROPERTY, PLANT AND EQUIPMENT, NET | 55
14. INTANGIBLE ASSETS | 57
15. LOANS AND BORROWINGS | 59
16. TRADE ACCOUNTS PAYABLE | 63
17. SUPPLY CHAIN FINANCE | 63
18. LEASES | 64
19. SHARE-BASED PAYMENT | 67
20. EMPLOYEES BENEFITS PLANS | 68
21. PROVISION FOR TAX, CIVIL, LABOR AND OTHER RISKS | 69
22. EQUITY | 70
23. EARNINGS (LOSS) PER SHARE | 71
24. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT | 72
25. SEGMENT INFORMATION | 83
26. NET SALES | 86
27. OTHER OPERATING INCOME (EXPENSES), NET | 86
28. FINANCIAL INCOME (EXPENSES), NET | 87
29. STATEMENT OF INCOME BY NATURE | 87
30. RELATED PARTIES – PARENT COMPANY | 88

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 2

31. COMMITMENTS | 91
32. TRANSACTIONS THAT DO NOT INVOLVE CASH | 91
33. EVENTS AFTER THE REPORTING DATE | 91
34. APPROVAL OF THE INTERIM FINANCIAL INFORMATION | 93
COMENTARY ABOUT THE COMPANY PROJECTIONS BEHAVIOUR | 94
BREAKDOWN OF THE CAPITAL BY OWNER (NOT REVIEWED) | 94
INDEPENDENT AUDITOR’S REPORT ON REVIEW OF INTERIM FINANCIAL INFORMATION | 95
OPINION OF THE AUDIT AND INTEGRITY COMMITTEE | 96
STATEMENT OF EXECUTIVE BOARD ON THE INTERIM FINANCIAL INFORMATION AND INDEPENDENT AUDITOR’S REPORT | 97

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 3

(in thousands of Brazilian Reais)

STATEMENT OF FINANCIAL POSITION

|  |  | Parent company |  | Consolidated |  |  |  |  | Parent company |  | Consolidated
ASSETS | Note |  | 09.30.20 |  | 12.31.19 |  | 09.30.20 |  | 12.31.19 |  | LIABILITIES | Note |  | 09.30.20 |  | 12.31.19 |  | 09.30.20 |  | 12.31.19
CURRENT ASSETS |  |  |  |  |  |  |  |  |  |  | CURRENT LIABILITIES |  |  |  |  |  |  |  |  |
Cash and cash equivalents | 4 |  | 4,501,817 |  | 1,368,980 |  | 11,398,587 |  | 4,237,785 |  | Loans and borrowings | 15 |  | 4,276,437 |  | 3,033,034 |  | 4,398,427 |  | 3,132,029
Marketable securities | 5 |  | 311,048 |  | 396,994 |  | 313,091 |  | 418,182 |  | Trade accounts payable | 16 |  | 7,288,352 |  | 5,270,762 |  | 8,098,659 |  | 5,784,419
Trade and other receivables | 6 |  | 6,497,572 |  | 6,153,937 |  | 2,894,853 |  | 3,090,691 |  | Supply chain finance | 17 |  | 1,121,372 |  | 842,037 |  | 1,121,372 |  | 842,037
Inventories | 7 |  | 4,686,542 |  | 2,786,147 |  | 6,336,613 |  | 3,887,916 |  | Lease liability | 18 |  | 252,672 |  | 313,058 |  | 326,143 |  | 376,628
Biological assets | 8 |  | 1,829,790 |  | 1,545,127 |  | 1,903,441 |  | 1,603,039 |  | Payroll, related charges and employee profit sharing |  |  | 1,044,425 |  | 754,032 |  | 1,089,380 |  | 825,254
Recoverable taxes | 9 |  | 276,921 |  | 274,480 |  | 343,936 |  | 473,732 |  | Tax payable |  |  | 238,152 |  | 268,193 |  | 362,437 |  | 517,208
Recoverable income tax and social contribution | 9 |  | 25,281 |  | 40,291 |  | 59,896 |  | 152,486 |  | Derivative financial instruments | 24 |  | 783,613 |  | 151,722 |  | 793,361 |  | 153,612
Derivative financial instruments | 24 |  | 148,376 |  | 193,740 |  | 153,421 |  | 195,324 |  | Provision for tax, civil and labor risks | 21 |  | 1,067,456 |  | 1,081,103 |  | 1,071,964 |  | 1,084,308
Restricted cash |  |  | 1 |  | 296,294 |  | 1 |  | 296,294 |  | Employee benefits | 20 |  | 87,996 |  | 87,996 |  | 97,596 |  | 95,919
Assets held for sale |  |  | 15,637 |  | 16,671 |  | 35,659 |  | 99,245 |  | Advances from related parties | 30 |  | 8,868,203 |  | 5,364,164 |  | - |  | -
Other current assets |  |  | 364,104 |  | 495,743 |  | 495,714 |  | 590,733 |  | Other current liabilities |  |  | 249,885 |  | 329,166 |  | 752,965 |  | 512,591
Total current assets |  |  | 18,657,089 |  | 13,568,404 |  | 23,935,212 |  | 15,045,427 |  | Total current liabilities |  |  | 25,278,563 |  | 17,495,267 |  | 18,112,304 |  | 13,324,005
NON-CURRENT ASSETS |  |  |  |  |  |  |  |  |  |  | NON-CURRENT LIABILITIES |  |  |  |  |  |  |  |  |
LONG-TERM RECEIVALBLES |  |  |  |  |  |  |  |  |  |  | Loans and borrowings | 15 |  | 18,535,617 |  | 13,395,970 |  | 21,616,002 |  | 15,488,250
Marketable securities | 5 |  | 14,995 |  | 14,891 |  | 382,283 |  | 307,352 |  | Trade accounts payable | 16 |  | 6,402 |  | 12,347 |  | 6,402 |  | 12,347
Trade and other receivables | 6 |  | 57,228 |  | 71,029 |  | 57,244 |  | 71,029 |  | Lease liability | 18 |  | 1,907,641 |  | 1,939,494 |  | 2,072,500 |  | 2,054,552
Recoverable taxes | 9 |  | 5,253,866 |  | 5,167,016 |  | 5,253,842 |  | 5,169,547 |  | Tax payable |  |  | 176,808 |  | 190,257 |  | 176,808 |  | 190,257
Recoverable income tax and social contribution | 9 |  | 55,025 |  | 264,428 |  | 61,637 |  | 269,263 |  | Provision for tax, civil and labor risks | 21 |  | 742,872 |  | 709,760 |  | 743,202 |  | 710,061
Deferred income taxes | 10 |  | 1,983,517 |  | 1,808,494 |  | 1,999,083 |  | 1,845,862 |  | Deferred income tax | 10 |  | - |  | - |  | 129,212 |  | 85,310
Judicial deposits | 11 |  | 565,287 |  | 575,681 |  | 565,364 |  | 575,750 |  | Liabilities with related parties | 30 |  | 41,039 |  | 960,056 |  | - |  | -
Biological assets | 8 |  | 1,097,795 |  | 1,016,642 |  | 1,169,365 |  | 1,081,025 |  | Employee benefits | 20 |  | 550,203 |  | 506,791 |  | 675,625 |  | 593,555
Receivables from related parties | 30 |  | 339 |  | 234 |  | - |  | - |  | Derivative financial instruments | 24 |  | 21,354 |  | 3 |  | 21,354 |  | 3
Derivative financial instruments | 24 |  | 223 |  | 49,991 |  | 223 |  | 49,991 |  | Other non-current liabilities |  |  | 279,674 |  | 482,109 |  | 286,972 |  | 1,093,942
Restricted cash |  |  | 24,297 |  | - |  | 24,297 |  | - |  |  |  |  |  |  |  |  |  |  |
Other non-current assets |  |  | 72,250 |  | 78,516 |  | 76,975 |  | 85,537 |  |  |  |  |  |  |  |  |  |  |
Total long-term receivables |  |  | 9,124,822 |  | 9,046,922 |  | 9,590,313 |  | 9,455,356 |  | Total non-current liabilities |  |  | 22,261,610 |  | 18,196,787 |  | 25,728,077 |  | 20,228,277
|  |  |  |  |  |  |  |  |  |  | EQUITY | 22 |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  | Capital |  |  | 12,460,471 |  | 12,460,471 |  | 12,460,471 |  | 12,460,471
|  |  |  |  |  |  |  |  |  |  | Capital reserves |  |  | 140,626 |  | 192,845 |  | 140,626 |  | 192,845
Investments | 12 |  | 12,599,699 |  | 6,499,517 |  | 18,730 |  | 14,880 |  | Accumulated losses |  |  | (3,522,245) |  | (3,996,985) |  | (3,522,245) |  | (3,996,985)
Property, plant and equipment, net | 13 |  | 11,046,571 |  | 11,333,302 |  | 12,227,225 |  | 12,276,889 |  | Treasury shares |  |  | (123,938) |  | (38,239) |  | (123,938) |  | (38,239)
Intangible assets | 14 |  | 3,198,924 |  | 3,139,532 |  | 5,410,770 |  | 4,908,079 |  | Other comprehensive loss |  |  | (1,867,982) |  | (722,469) |  | (1,867,982) |  | (722,469)
|  |  |  |  |  |  |  |  |  |  | Attributable to controlling shareholders |  |  | 7,086,932 |  | 7,895,623 |  | 7,086,932 |  | 7,895,623
|  |  |  |  |  |  |  |  |  |  | Non-controlling interests |  |  | - |  | - |  | 254,937 |  | 252,726
Total non-current assets |  |  | 35,970,016 |  | 30,019,273 |  | 27,247,038 |  | 26,655,204 |  | Total equity |  |  | 7,086,932 |  | 7,895,623 |  | 7,341,869 |  | 8,148,349
TOTAL ASSETS |  |  | 54,627,105 |  | 43,587,677 |  | 51,182,250 |  | 41,700,631 |  | TOTAL LIABILITIES AND EQUITY |  |  | 54,627,105 |  | 43,587,677 |  | 51,182,250 |  | 41,700,631

The accompanying notes are an integral part of the interim financial information.

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 4

(in thousands of Brazilian Reais)

STATEMENT OF INCOME (LOSS)

|  |  | Parent company |  | Consolidated
|  |  |  |  | 2020 |  |  |  | 2019 |  |  |  | 2020 |  |  |  | 2019
| Note |  | Jul - Sep |  | Jan - Sep |  | Jul - Sep |  | Jan - Sep |  | Jul - Sep |  | Jan - Sep |  | Jul - Sep |  | Jan - Sep
CONTINUING OPERATIONS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
NET SALES | 26 |  | 8,204,499 |  | 22,716,953 |  | 7,281,753 |  | 20,725,547 |  | 9,942,591 |  | 27,995,582 |  | 8,459,486 |  | 24,156,745
Cost of sales | 29 |  | (6,621,317) |  | (18,633,112) |  | (5,711,393) |  | (16,631,063) |  | (7,598,133) |  | (21,419,255) |  | (6,363,893) |  | (18,452,433)
GROSS PROFIT |  |  | 1,583,182 |  | 4,083,841 |  | 1,570,360 |  | 4,094,484 |  | 2,344,458 |  | 6,576,327 |  | 2,095,593 |  | 5,704,312
OPERATING INCOME (EXPENSES) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Selling expenses | 29 |  | (1,059,722) |  | (3,150,070) |  | (988,092) |  | (2,876,028) |  | (1,366,469) |  | (4,011,692) |  | (1,160,295) |  | (3,552,367)
General and administrative expenses | 29 |  | (150,800) |  | (360,690) |  | (95,085) |  | (272,518) |  | (217,348) |  | (550,373) |  | (141,729) |  | (419,115)
Impairment loss on trade receivables | 6 |  | 2,228 |  | (6,850) |  | (12,576) |  | (20,149) |  | (3,371) |  | (15,126) |  | (16,238) |  | (20,036)
Other operating income (expenses), net | 27 |  | 1,249 |  | (82,861) |  | 285,834 |  | 461,350 |  | (13,193) |  | (113,193) |  | 289,347 |  | 443,148
Income (loss) from associates and joint ventures | 12 |  | 1,118,703 |  | 7,192,215 |  | 1,125,694 |  | 1,475,732 |  | - |  | - |  | (712) |  | (1,737)
INCOME BEFORE FINANCIAL RESULTS AND INCOME TAXES |  |  | 1,494,840 |  | 7,675,585 |  | 1,886,135 |  | 2,862,871 |  | 744,077 |  | 1,885,943 |  | 1,065,966 |  | 2,154,205
Financial expenses | 28 |  | (749,766) |  | (1,942,389) |  | (777,125) |  | (2,271,776) |  | (591,666) |  | (1,327,579) |  | (866,442) |  | (2,417,718)
Financial income | 28 |  | 59,604 |  | 232,713 |  | 612,077 |  | 1,152,627 |  | 72,702 |  | 267,413 |  | 634,073 |  | 1,194,802
Foreign exchange and monetary variations | 28 |  | (544,720) |  | (5,396,236) |  | (931,048) |  | (1,006,398) |  | 82,545 |  | (173,025) |  | (24,320) |  | (101,360)
INCOME BEFORE TAXES |  |  | 259,958 |  | 569,673 |  | 790,039 |  | 737,324 |  | 307,658 |  | 652,752 |  | 809,277 |  | 829,929
Income taxes | 10 |  | (43,167) |  | (94,933) |  | (354,931) |  | (226,385) |  | (88,949) |  | (165,146) |  | (363,672) |  | (306,579)
INCOME FROM CONTINUING OPERATIONS |  |  | 216,791 |  | 474,740 |  | 435,108 |  | 510,939 |  | 218,709 |  | 487,606 |  | 445,605 |  | 523,350
DISCONTINUED OPERATIONS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
LOSS FROM DISCONTINUED OPERATIONS |  |  | - |  | - |  | (141,201) |  | (895,142) |  | - |  | - |  | (141,201) |  | (906,323)
INCOME (LOSS) FOR THE PERIOD |  |  | 216,791 |  | 474,740 |  | 293,907 |  | (384,203) |  | 218,709 |  | 487,606 |  | 304,404 |  | (382,973)
Net Income from Continuing Operation Attributable to |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Controlling shareholders |  |  | 216,791 |  | 474,740 |  | 435,108 |  | 510,939 |  | 216,791 |  | 474,740 |  | 435,108 |  | 510,939
Non-controlling interest |  |  | - |  | - |  | - |  | - |  | 1,918 |  | 12,866 |  | 10,497 |  | 12,411
|  |  | 216,791 |  | 474,740 |  | 435,108 |  | 510,939 |  | 218,709 |  | 487,606 |  | 445,605 |  | 523,350
Net Loss From Discontinued Operation Attributable to |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Controlling shareholders |  |  | - |  | - |  | (141,201) |  | (895,142) |  | - |  | - |  | (141,201) |  | (895,142)
Non-controlling interest |  |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | (11,181)
|  |  | - |  | - |  | (141,201) |  | (895,142) |  | - |  | - |  | (141,201) |  | (906,323)
INCOME PER SHARE FROM CONTINUING OPERATIONS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Weighted average shares outstanding - basic |  |  |  |  |  |  |  |  |  |  | 807,406,368 |  | 809,583,921 |  | 811,536,857 |  | 811,464,814
Income per share - basic | 23 |  |  |  |  |  |  |  |  |  | 0.27 |  | 0.59 |  | 0.54 |  | 0.63
Weighted average shares outstanding - diluted |  |  |  |  |  |  |  |  |  |  | 807,464,700 |  | 809,642,253 |  | 811,536,857 |  | 811,464,814
Income per share - diluted | 23 |  |  |  |  |  |  |  |  |  | 0.27 |  | 0.59 |  | 0.54 |  | 0.63
LOSSES PER SHARE FROM DISCONTINUED OPERATIONS |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Weighted average shares outstanding - basic |  |  |  |  |  |  |  |  |  |  | 807,406,368 |  | 809,583,921 |  | 811,440,470 |  | 811,428,248
Losses per share - basic | 23 |  |  |  |  |  |  |  |  |  | - |  | - |  | (0.17) |  | (1.10)
Weighted average shares outstanding - diluted |  |  |  |  |  |  |  |  |  |  | 807,406,368 |  | 809,583,921 |  | 811,440,470 |  | 811,428,248
Losses per share - diluted | 23 |  |  |  |  |  |  |  |  |  | - |  | - |  | (0.17) |  | (1.10)

The accompanying notes are an integral part of the interim financial information.

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 5

(in thousands of Brazilian Reais)

STATEMENT OF COMPREHENSIVE INCOME (LOSS)

|  |  | Parent company |  | Consolidated
|  |  |  |  | 2020 |  |  |  | 2019 |  |  |  | 2020 |  |  |  | 2019
| Note |  | Jul - Sep |  | Jan - Sep |  | Jul - Sep |  | Jan - Sep |  | Jul - Sep |  | Jan - Sep |  | Jul - Sep |  | Jan - Sep
Income (loss) for the period |  |  | 216,791 |  | 474,740 |  | 293,907 |  | (384,203) |  | 218,709 |  | 487,606 |  | 304,404 |  | (382,973)
Other comprehensive income (loss) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Gain (loss) on foreign currency translation of foreign operations |  |  | (91,751) |  | (240,273) |  | (6,286) |  | 652,881 |  | (90,273) |  | (195,970) |  | 15,033 |  | 632,869
Loss on net investment hedge |  |  | (43,428) |  | (385,539) |  | (98,755) |  | (98,755) |  | (43,428) |  | (385,539) |  | (98,755) |  | (98,755)
Gain (loss) on cash flow hedge | 24 |  | 197,296 |  | (544,187) |  | (252,256) |  | (156,972) |  | 197,296 |  | (544,187) |  | (252,287) |  | (157,003)
Gain on debt investments measured at FVTOCI (1) | 5 |  | 348 |  | 178 |  | 189 |  | 1,757 |  | 348 |  | 178 |  | 189 |  | 1,757
Net other comprehensive income (loss),to be reclassified to the statement of income in subsequent periods |  |  | 62,465 |  | (1,169,821) |  | (357,108) |  | 398,911 |  | 63,943 |  | (1,125,518) |  | (335,820) |  | 378,868
Gain (loss) on equity investments measured at FVTOCI (1) | 5 |  | (924) |  | 4,079 |  | 22,431 |  | 102,745 |  | (924) |  | 4,079 |  | 22,431 |  | 102,745
Actuarial gains on pension and post-employment plans | 20 |  | 7,194 |  | 20,229 |  | 4,805 |  | 10,116 |  | 7,170 |  | 20,134 |  | 4,822 |  | 9,778
Net other comprehensive income, with no impact into subsequent statement of income |  |  | 6,270 |  | 24,308 |  | 27,236 |  | 112,861 |  | 6,246 |  | 24,213 |  | 27,253 |  | 112,523
Total comprehensive income (loss), net of taxes |  |  | 285,526 |  | (670,773) |  | (35,965) |  | 127,569 |  | 288,898 |  | (613,699) |  | (4,163) |  | 108,418
Attributable to |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Controlling shareholders |  |  | 285,526 |  | (670,773) |  | (35,965) |  | 127,569 |  | 285,526 |  | (670,773) |  | (35,965) |  | 127,569
Non-controlling interest |  |  | - |  | - |  | - |  | - |  | 3,372 |  | 57,074 |  | 31,802 |  | (19,151)
|  |  | 285,526 |  | (670,773) |  | (35,965) |  | 127,569 |  | 288,898 |  | (613,699) |  | (4,163) |  | 108,418

| (1) | FVTOCI: Fair Value Through Other Comprehensive Income.

Items above are stated net of tax and the related taxes are disclosed in note 10.

The accompanying notes are an integral part of the interim financial information.

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 6

(in thousands of Brazilian Reais)

STATEMENT OF CHANGES IN EQUITY

|  | Attributed to controlling shareholders
|  |  |  |  |  |  |  | Other comprehensive income (loss) |  |  |  |  |  |  |  |
|  | Paid-in capital |  | Capital reserve |  | Treasury shares |  | Accumulated foreign currency translation adjustments |  | Marketable securities at FVTOCI |  | Gain (losses) on cash flow hedge |  | Actuarial losses |  | Retained earnings (losses) |  | Total equity |  | Non-controlling interest |  | Total shareholders' equity (consolidated)
BALANCES AT DECEMBER 31, 2018 |  | 12,460,471 |  | 115,354 |  | (56,676) |  | (752,815) |  | (98,451) |  | (396,165) |  | (28,088) |  | (4,279,003) |  | 6,964,627 |  | 567,150 |  | 7,531,777
Adoption of IFRS 16 |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | 6,287 |  | 6,287 |  | - |  | 6,287
Comprehensive income (loss) (1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Gain (loss) on foreign currency translation of foreign operations |  | - |  | - |  | - |  | 626,254 |  | - |  | - |  | - |  | - |  | 626,254 |  | (30,666) |  | 595,588
Loss on net investment hedge |  | - |  | - |  | - |  | (66,818) |  | - |  | - |  | - |  | - |  | (66,818) |  | - |  | (66,818)
Gains on marketable securities measured at FVTOCI (2) |  | - |  | - |  | - |  | - |  | 102,905 |  | - |  | - |  | - |  | 102,905 |  | - |  | 102,905
Unrealized gains in cash flow hedge |  | - |  | - |  | - |  | - |  | - |  | 39,444 |  | - |  | - |  | 39,444 |  | - |  | 39,444
Actuarial losses on pension and post-employment plans |  | - |  | - |  | - |  | - |  | - |  | - |  | (148,735) |  | - |  | (148,735) |  | (1,786) |  | (150,521)
Income (loss) for the year |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | 297,612 |  | 297,612 |  | (160) |  | 297,452
SUB-TOTAL COMPREHENSIVE INCOME (LOSS) |  | - |  | - |  | - |  | 559,436 |  | 102,905 |  | 39,444 |  | (148,735) |  | 297,612 |  | 850,662 |  | (32,612) |  | 818,050
Realized loss in marketable securities at FVTOCI (2) |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | (52,493) |  | (52,493) |  | - |  | (52,493)
Employee benefits remeasurement - defined benefit |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | 30,612 |  | 30,612 |  | - |  | 30,612
Appropriation of income (loss) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Dividends |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | (4,988) |  | (4,988)
Share-based payments |  | - |  | (6,861) |  | 18,437 |  | - |  | - |  | - |  | - |  | - |  | 11,576 |  | - |  | 11,576
Acquisition (sale) of non-controlling interests |  | - |  | 84,352 |  | - |  | - |  | - |  | - |  | - |  | - |  | 84,352 |  | (276,824) |  | (192,472)
BALANCES AT DECEMBER 31, 2019 |  | 12,460,471 |  | 192,845 |  | (38,239) |  | (193,379) |  | 4,454 |  | (356,721) |  | (176,823) |  | (3,996,985) |  | 7,895,623 |  | 252,726 |  | 8,148,349
Comprehensive income (loss) (1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Gain (loss) on foreign currency translation of foreign operations |  | - |  | - |  | - |  | (240,273) |  | - |  | - |  | - |  | - |  | (240,273) |  | 44,303 |  | (195,970)
Loss on net investment hedge |  | - |  | - |  | - |  | (385,539) |  | - |  | - |  | - |  | - |  | (385,539) |  | - |  | (385,539)
Gains on marketable securities measured at FVTOCI (2) |  | - |  | - |  | - |  | - |  | 4,257 |  | - |  | - |  | - |  | 4,257 |  | - |  | 4,257
Unrealized losses in cash flow hedge |  | - |  | - |  | - |  | - |  | - |  | (544,187) |  | - |  | - |  | (544,187) |  | - |  | (544,187)
Actuarial gains (losses) on pension and post-employment plans |  | - |  | - |  | - |  | - |  | - |  | - |  | 20,229 |  | - |  | 20,229 |  | (95) |  | 20,134
Income for the period |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | 474,740 |  | 474,740 |  | 12,866 |  | 487,606
SUB-TOTAL COMPREHENSIVE INCOME (LOSS) |  | - |  | - |  | - |  | (625,812) |  | 4,257 |  | (544,187) |  | 20,229 |  | 474,740 |  | (670,773) |  | 57,074 |  | (613,699)
Share-based payments |  | - |  | (1,274) |  | 20,371 |  | - |  | - |  | - |  | - |  | - |  | 19,097 |  | - |  | 19,097
Acquisition (sale) of non-controlling interests (3) |  | - |  | (50,945) |  | - |  | - |  | - |  | - |  | - |  | - |  | (50,945) |  | (54,863) |  | (105,808)
Acquisition of treasury shares |  | - |  | - |  | (106,070) |  | - |  | - |  | - |  | - |  | - |  | (106,070) |  | - |  | (106,070)
BALANCES AT SEPTEMBER 30, 2020 |  | 12,460,471 |  | 140,626 |  | (123,938) |  | (819,191) |  | 8,711 |  | (900,908) |  | (156,594) |  | (3,522,245) |  | 7,086,932 |  | 254,937 |  | 7,341,869

| (1) | All changes in other comprehensive income are presented net of taxes.

| (2) | FVTOCI: Fair Value Through Other Comprehensive Income.

| (3) | Acquisition of remaining participation in the subsidiary Al Wafi (note 1.1).

The accompanying notes are an integral part of the interim financial information.

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 7

(in thousands of Brazilian Reais)

STATEMENT OF CASH FLOWS

|  | Parent company |  | Consolidated
|  | 2020 |  | 2019 |  | 2020 |  | 2019
|  | Jan - Sep |  | Jan - Sep |  | Jan - Sep |  | Jan - Sep
OPERATING ACTIVITIES |  |  |  |  |  |  |  |
Income from continuing operations |  | 474,740 |  | 510,939 |  | 487,606 |  | 523,350
Adjustments for: |  |  |  |  |  |  |  |
Depreciation and amortization |  | 936,404 |  | 949,094 |  | 1,127,954 |  | 1,116,508
Depreciation and depletion of biological assets |  | 578,814 |  | 548,821 |  | 645,551 |  | 600,926
Result on disposals of property, plant and equipments |  | 15,778 |  | (11,146) |  | 24,279 |  | (2,925)
Write-down of inventories to net realizable value |  | 70,454 |  | 108,028 |  | 96,916 |  | 116,558
Provision for tax, civil and labor risks |  | 259,250 |  | 684,073 |  | 260,311 |  | 705,701
Impairment |  | - |  | - |  | - |  | 15,640
Income from associates and joint ventures |  | (7,192,215) |  | (1,475,732) |  | - |  | 1,737
Financial results, net |  | 7,105,912 |  | 2,125,547 |  | 1,233,191 |  | 1,324,276
Tax recoveries and gains in tax lawsuits |  | (294,890) |  | (1,174,376) |  | (294,890) |  | (1,174,376)
Deferred income tax |  | 94,933 |  | 227,289 |  | 118,451 |  | 208,181
Employee profit sharing |  | 162,526 |  | 188,603 |  | 159,669 |  | 198,674
Other |  | 258,920 |  | 298,136 |  | 271,994 |  | 276,430
|  | 2,470,626 |  | 2,979,276 |  | 4,131,032 |  | 3,910,680
Trade accounts receivable |  | (295,819) |  | 1,482,653 |  | 827,060 |  | 738,405
Inventories |  | (1,970,849) |  | (412,924) |  | (1,980,815) |  | (695,948)
Biological assets - current |  | (284,663) |  | (25,321) |  | (295,995) |  | (44,356)
Trade accounts payable |  | 1,384,016 |  | (142,580) |  | 1,521,185 |  | (358,497)
Supply chain finance |  | 282,351 |  | (251,978) |  | 282,351 |  | (251,950)
Cash generated by operating activities |  | 1,585,662 |  | 3,629,126 |  | 4,484,818 |  | 3,298,334
Investments in securities at FVTPL (1) |  | 2,800 |  | (89,046) |  | - |  | (92,911)
Redemptions of securities at FVTPL (1) |  | 99,264 |  | 28,566 |  | 102,172 |  | 29,701
Interest received |  | 69,305 |  | 109,969 |  | 77,686 |  | 139,620
Dividends and interest on shareholders' equity received |  | 304,055 |  | 9,425 |  | - |  | 15,551
Payment of tax, civil and labor provisions |  | (215,439) |  | (491,764) |  | (215,439) |  | (491,764)
Payment of interest |  | (851,575) |  | (762,147) |  | (1,002,146) |  | (909,814)
Derivative financial instruments |  | 1,253,570 |  | (101,794) |  | 1,285,272 |  | (156,872)
Payment of income tax and social contribution |  | - |  | - |  | (152) |  | (90)
Other operating assets and liabilities |  | (133,030) |  | (986,471) |  | 378,166 |  | 468,113
Net cash provided by operating activities |  | 2,114,612 |  | 1,345,864 |  | 5,110,377 |  | 2,299,868
Net cash applied by operating activities from discontinued operations |  | - |  | (51,977) |  | - |  | (109,234)
Net cash provided by operating activities |  | 2,114,612 |  | 1,293,887 |  | 5,110,377 |  | 2,190,634
INVESTING ACTIVITIES |  |  |  |  |  |  |  |
Investments in securities at amortized cost |  | - |  | - |  | - |  | (15,362)
Redemptions of securities at amortized cost |  | - |  | 89,046 |  | - |  | 95,638
Redemptions of securities at FVTOCI (2) |  | - |  | 209,448 |  | 26,352 |  | 264,965
Redemption of restricted cash |  | 285,622 |  | 235,754 |  | 285,622 |  | 256,442
Additions to property, plant and equipment |  | (512,105) |  | (246,969) |  | (542,600) |  | (271,127)
Additions to biological assets - non-current |  | (656,499) |  | (543,074) |  | (725,484) |  | (597,942)
Proceeds from disposals of property, plant, equipment and investments |  | 69,696 |  | 392,707 |  | 69,696 |  | 1,851,183
Additions to intangible assets |  | (82,437) |  | (53,336) |  | (74,384) |  | (54,621)
Sale of participation in associated entities |  | - |  | - |  | 38,546 |  | -
Sale (acquisition) of participation in joint ventures and associated entities |  | (819) |  | (2,728) |  | (819) |  | (2,728)
Capital increase (decrease) in associates and joint ventures |  | (5,000) |  | - |  | - |  | -
Advance for future capital increase |  | - |  | (1,559) |  | - |  | -
Net cash provided (used in) investing activities |  | (901,542) |  | 79,289 |  | (923,071) |  | 1,526,448
Net cash provided (used in) investing activities from discontinued operations |  | - |  | - |  | - |  | (58,782)
Net cash provided (used in) investing activities |  | (901,542) |  | 79,289 |  | (923,071) |  | 1,467,666
FINANCING ACTIVITIES |  |  |  |  |  |  |  |
Proceeds from debt issuance |  | 8,041,948 |  | 4,743,866 |  | 8,666,404 |  | 4,964,243
Repayment of debt |  | (5,975,345) |  | (6,146,887) |  | (6,360,934) |  | (6,992,161)
Treasury shares acquisition |  | (106,070) |  | - |  | (106,070) |  | -
Acquisition of non-controlling interests |  | - |  | - |  | (100,390) |  | (183,672)
Payment of lease liabilities |  | (339,198) |  | (340,546) |  | (402,259) |  | (402,693)
Net cash provided (used in) by financing activities |  | 1,621,335 |  | (1,743,567) |  | 1,696,751 |  | (2,614,283)
Net cash provided (used in) by financing activities from discontinued operations |  | - |  | - |  | - |  | 1,567
Net cash provided (used in) by financing activities |  | 1,621,335 |  | (1,743,567) |  | 1,696,751 |  | (2,612,716)
EFFECT OF EXCHANGE RATE VARIATION ON CASH AND CASH EQUIVALENTS |  | 298,432 |  | 21,553 |  | 1,276,745 |  | 124,653
Net increase (decrease) in cash and cash equivalents |  | 3,132,837 |  | (348,838) |  | 7,160,802 |  | 1,170,237
At the beginning of the period |  | 1,368,980 |  | 3,826,698 |  | 4,237,785 |  | 5,036,011
At the end of the period |  | 4,501,817 |  | 3,477,860 |  | 11,398,587 |  | 6,206,248

| (1) | FVTPL: Fair Value Through Profit and Loss.

| (2) | FVTOCI: Fair Value Through Other Comprehensive Income.

The accompanying notes are an integral part of the interim financial information.

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 8

(in thousands of Brazilian Reais)

STATEMENT OF VALUE ADDED

|  | Parent company |  | Consolidated
|  | 2020 |  | 2019 (1) |  | 2020 |  | 2019 (1)
|  | Jan - Sep |  | Jan - Sep |  | Jan - Sep |  | Jan - Sep
1 - REVENUES |  | 25,959,411 |  | 23,935,487 |  | 31,186,515 |  | 27,637,980
Sales of goods and products |  | 25,508,872 |  | 23,072,578 |  | 30,790,075 |  | 26,751,314
Other income |  | 81,208 |  | 651,161 |  | 47,123 |  | 644,595
Revenue related to construction of own assets |  | 506,709 |  | 239,138 |  | 504,725 |  | 247,871
Expected credit losses |  | (137,378) |  | (27,390) |  | (155,408) |  | (5,800)
2 - RAW MATERIAL ACQUIRED FROM THIRD PARTIES |  | (16,928,700) |  | (14,722,520) |  | (20,025,269) |  | (16,818,154)
Costs of goods sold |  | (14,343,665) |  | (12,648,207) |  | (16,908,250) |  | (14,310,037)
Materials, energy, third parties services and other |  | (2,584,276) |  | (2,132,409) |  | (3,105,377) |  | (2,573,130)
Reversal for inventories losses |  | (759) |  | 58,096 |  | (11,642) |  | 65,013
3 - GROSS ADDED VALUE(1-2) |  | 9,030,711 |  | 9,212,967 |  | 11,161,246 |  | 10,819,826
4 - DEPRECIATION AND AMORTIZATION |  | (1,515,218) |  | (1,497,915) |  | (1,773,505) |  | (1,717,434)
5 - NET ADDED VALUE (3-4) |  | 7,515,493 |  | 7,715,052 |  | 9,387,741 |  | 9,102,392
6 - RECEIVED FROM THIRD PARTIES |  | 7,423,384 |  | 2,627,151 |  | 266,854 |  | 1,192,751
Income from associates and joint ventures |  | 7,192,215 |  | 1,475,732 |  | - |  | (1,737)
Financial income |  | 232,713 |  | 1,152,627 |  | 267,413 |  | 1,194,802
Others |  | (1,544) |  | (1,208) |  | (559) |  | (314)
7 - ADDED VALUE TO BE DISTRIBUTED (5+6) |  | 14,938,877 |  | 10,342,203 |  | 9,654,595 |  | 10,295,143
8 - DISTRIBUTION OF ADDED VALUE |  | 14,938,877 |  | 10,342,203 |  | 9,654,595 |  | 10,295,143
Payroll |  | 3,830,054 |  | 3,583,217 |  | 4,208,504 |  | 3,895,701
Salaries |  | 2,756,864 |  | 2,686,256 |  | 3,058,122 |  | 2,938,980
Benefits |  | 886,717 |  | 722,921 |  | 949,287 |  | 770,667
Government severance indemnity fund for employees |  | 186,473 |  | 174,040 |  | 201,095 |  | 186,054
Taxes, Fees and Contributions |  | 3,187,053 |  | 2,867,064 |  | 3,281,743 |  | 3,210,451
Federal |  | 1,345,060 |  | 1,318,849 |  | 1,432,862 |  | 1,659,123
State |  | 1,810,829 |  | 1,516,689 |  | 1,810,774 |  | 1,516,801
Municipal |  | 31,164 |  | 31,526 |  | 38,107 |  | 34,527
Capital Remuneration from Third Parties |  | 7,447,030 |  | 3,380,983 |  | 1,676,742 |  | 2,665,641
Interests, including exchange variation |  | 7,352,370 |  | 3,292,946 |  | 1,514,349 |  | 2,533,850
Rents |  | 94,660 |  | 88,037 |  | 162,393 |  | 131,791
Interest on Own-Capital |  | 474,740 |  | 510,939 |  | 487,606 |  | 523,350
Income of the period |  | 474,740 |  | 510,939 |  | 474,740 |  | 510,939
Non-controlling interest |  | - |  | - |  | 12,866 |  | 12,411

| (1) | The comparative period was restated for better disclosure of exchange variations.

The accompanying notes are an integral part of the interim financial information.

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| 1. | COMPANY’S OPERATIONS

BRF S.A. (“BRF”) and its subsidiaries (collectively the “Company”) is a publicly traded company, listed on the segment Novo Mercado of Brasil, Bolsa, Balcão (“B3”), under the ticker BRFS3, and listed on the New York Stock Exchange (“NYSE”), under the ticker BRFS. The Company’s registered office is at Rua Jorge Tzachel, nº 475, Bairro Fazenda, Itajaí - Santa Catarina and the main business office is in the city of São Paulo.

BRF is a Brazilian multinational company, with global presence, which owns a comprehensive portfolio of products, and it is one of the world’s largest companies of food products. The Company operates by raising, producing and slaughtering poultry and pork for processing, production and sale of fresh meat, processed products, pasta, margarine and others.

The Company holds as main brands Sadia, Perdigão, Qualy, Chester®, Kidelli, Perdix and Banvit, present mainly in Brazil, Turkey and Middle Eastern countries.

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 37

| 1.1. | Equity interest

|  |  |  |  |  |  | % equity interest
Entity |  |  | Main activity |  | Country (1) |  | 09.30.20 |  | 12.31.19
BRF Energia S.A. |  |  | Commercialization of eletric energy |  | Brazil |  | 100.00 |  | 100.00
BRF GmbH |  |  | Holding |  | Austria |  | 100.00 |  | 100.00
BRF Foods LLC |  |  | Import, industrialization and commercialization of products |  | Russia |  | 99.90 |  | 99.90
BRF Global Company Nigeria Ltd. | (a) |  | Marketing and logistics services |  | Nigeria |  | 99.00 |  | 99.00
BRF Global Company South Africa Proprietary Ltd. |  |  | Administrative, marketing and logistics services |  | South Africa |  | 100.00 |  | 100.00
BRF Global Company Nigeria Ltd. | (a) |  | Marketing and logistics services |  | Nigeria |  | 1.00 |  | 1.00
BRF Global GmbH |  |  | Holding and trading |  | Austria |  | 100.00 |  | 100.00
BRF Foods LLC |  |  | Import, industrialization and commercialization of products |  | Russia |  | 0.10 |  | 0.10
BRF Japan KK |  |  | Marketing and logistics services, import, export, industrialization and commercialization of products |  | Japan |  | 100.00 |  | 100.00
BRF Korea LLC |  |  | Marketing and logistics services |  | Korea |  | 100.00 |  | 100.00
BRF Shanghai Management Consulting Co. Ltd. |  |  | Provision of consultancy and marketing services |  | China |  | 100.00 |  | 100.00
BRF Shanghai Trading Co. Ltd. |  |  | Import, export and commercialization of products |  | China |  | 100.00 |  | 100.00
BRF Singapore Foods PTE Ltd. |  |  | Administrative, marketing and logistics services |  | Singapore |  | 100.00 |  | 100.00
BRF Hungary LLC | (c) |  | Import and commercialization of products |  | Hungary |  | - |  | 100.00
Compañía Paraguaya Comercial S.A. | (a) |  | Import and commercialization of products |  | Paraguay |  | 99.00 |  | 99.00
Eclipse Holding Cöoperatief U.A. |  |  | Holding |  | The Netherlands | 99.99 |  | 99.99
Buenos Aires Fortune S.A. |  |  | Holding |  | Argentina |  | 5.00 |  | 5.00
Eclipse Latam Holdings |  |  | Holding |  | Spain |  | 100.00 |  | 100.00
Buenos Aires Fortune S.A. |  |  | Holding |  | Argentina |  | 95.00 |  | 95.00
Perdigão Europe Lda. |  |  | Import, export of products and administrative services |  | Portugal |  | 100.00 |  | 100.00
Perdigão International Ltd. |  |  | Import and export of products |  | Cayman Island |  | 100.00 |  | 100.00
BFF International Ltd. | (f) |  | Financial fundraising |  | Cayman Island |  | - |  | 100.00
Highline International | (g) |  | Financial fundraising |  | Cayman Island |  | - |  | 100.00
Sadia Overseas Ltd. | (e) |  | Financial fundraising |  | Cayman Island |  | - |  | 100.00
ProudFood Lda |  |  | Import and commercialization of products |  | Angola |  | 90.00 |  | 90.00
Sadia Chile S.A. |  |  | Import, export and commercialization of products |  | Chile |  | 40.00 |  | 40.00
BRF Global Namíbia | (a) |  | Import and commercialization of products |  | Namibia |  | 100.00 |  | 100.00
Wellax Food Logistics C.P.A.S.U. Lda. |  |  | Import, commercialization of products and administrative services |  | Portugal |  | 100.00 |  | 100.00
BRF Austria GmbH |  |  | Holding |  | Austria |  | 100.00 |  | 100.00
One Foods Holdings Ltd |  |  | Holding |  | UAE |  | 100.00 |  | 100.00
Al-Wafi Food Products Factory LLC |  |  | Import, export, industrialization and commercialization of products |  | UAE |  | 49.00 |  | 49.00
Badi Ltd. |  |  | Holding |  | UAE |  | 100.00 |  | 100.00
Al-Wafi Al-Takamol International for Foods Products | (b) |  | Import and commercialization of products |  | Saudi Arabia |  | 100.00 |  | 75.00
BRF Al Yasra Food K.S.C.C. ("BRF AFC") |  |  | Import, commercialization and distribution of products |  | Kuwait |  | 49.00 |  | 49.00
BRF Foods GmbH |  |  | Industrialization, import and commercialization of products |  | Austria |  | 100.00 |  | 100.00
Al Khan Foodstuff LLC ("AKF") |  |  | Import, commercialization and distribution of products |  | Oman |  | 70.00 |  | 70.00
FFM Further Processing Sdn. Bhd. | (d) |  | Industrialization, import and commercialization of products |  | Malaysia |  | - |  | 70.00
FFQ GmbH |  |  | Industrialization, import and commercialization of products |  | Austria |  | 100.00 |  | 100.00
TBQ Foods GmbH |  |  | Holding |  | Austria |  | 60.00 |  | 60.00
Banvit Bandirma Vitaminli |  |  | Import, industrialization and commercialization of products |  | Turkey |  | 91.71 |  | 91.71
Banvit Enerji ve Elektrik ÜretimLtd. Sti. | (a) |  | Generation and commercialization of electric energy |  | Turkey |  | 100.00 |  | 100.00
Banvit Foods SRL |  |  | Industrialization of grains and animal feed |  | Romania |  | 0.01 |  | 0.01
Nutrinvestments BV |  |  | Holding |  | The Netherlands | 100.00 |  | 100.00
Banvit ME FZE |  |  | Marketing and logistics services |  | UAE |  | 100.00 |  | 100.00
Banvit Foods SRL |  |  | Industrialization of grains and animal feed |  | Romania |  | 99.99 |  | 99.99
One Foods Malaysia SDN. BHD. |  |  | Marketing and logistics services |  | Malaysia |  | 100.00 |  | 100.00
Federal Foods LLC |  |  | Import, commercialization and distribution of products |  | UAE |  | 49.00 |  | 49.00
Federal Foods Qatar |  |  | Import, commercialization and distribution of products |  | Qatar |  | 49.00 |  | 49.00
BRF Hong Kong LLC | (a) |  | Import, commercialization and distribution of products |  | Hong Kong |  | 100.00 |  | 100.00
Eclipse Holding Cöoperatief U.A. |  |  | Holding |  | The Netherlands | 0.01 |  | 0.01
Establecimiento Levino Zaccardi y Cia. S.A. | (a) |  | Industrialization and commercialization of dairy products |  | Argentina |  | 99.94 |  | 99.94
BRF Pet S.A. |  |  | Industrialization, commercialization and distribution of feed and nutrients for animals |  | Brazil |  | 100.00 |  | 100.00
PP-BIO Administração de bem próprio S.A. |  |  | Management of assets |  | Brazil |  | 33.33 |  | 33.33
PR-SAD Administração de bem próprio S.A. |  |  | Management of assets |  | Brazil |  | 33.33 |  | 33.33
ProudFood Lda |  |  | Import and commercialization of products |  | Angola |  | 10.00 |  | 10.00
PSA Laboratório Veterinário Ltda. |  |  | Veterinary activities |  | Brazil |  | 99.99 |  | 99.99
Sino dos Alpes Alimentos Ltda. | (a) |  | Industrialization and commercialization of products |  | Brazil |  | 99.99 |  | 99.99
Sadia Alimentos S.A. |  |  | Holding |  | Argentina |  | 43.10 |  | 43.10

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 38

|  |  |  |  |  |  | % equity interest
Entity |  |  | Main activity |  | Country (1) |  | 09.30.20 |  | 12.31.19
Sadia International Ltd. |  |  | Import and commercialization of products |  | Cayman Island |  | 100.00 |  | 100.00
Sadia Chile S.A. |  |  | Import, export and marketing of products |  | Chile |  | 60.00 |  | 60.00
Sadia Uruguay S.A. |  |  | Import and commercialization of products |  | Uruguay |  | 5.10 |  | 5.10
Compañía Paraguaya Comercial S.A. | (a) |  | Import and commercialization of products |  | Paraguay |  | 1.00 |  | 1.00
Sadia Alimentos S.A. |  |  | Holding |  | Argentina |  | 56.90 |  | 56.90
Sadia Uruguay S.A. |  |  | Import and commercialization of products |  | Uruguay |  | 94.90 |  | 94.90
Vip S.A. Empreendimentos e Participações Imobiliárias |  |  | Commercialization of owned real state |  | Brazil |  | 100.00 |  | 100.00
Establecimiento Levino Zaccardi y Cia. S.A. | (a) |  | Industrialization and commercialization of dairy products |  | Argentina |  | 0.06 |  | 0.06
PSA Laboratório Veterinário Ltda. |  |  | Veterinary activities |  | Brazil |  | 0.01 |  | 0.01
Sino dos Alpes Alimentos Ltda. | (a) |  | Industrialization and commercialization of products |  | Brazil |  | 0.01 |  | 0.01

(1) | UAE – United Arab Emirates

| (a) | Dormant subsidiaries. The Company is evaluating the liquidation of these subsidiaries.

| (b) | On April 21, 2020, Badi Ltd. acquired the non-controlling portion of Al-Wafi Al-Takamol International for Foods Products by the amount equivalent to R$100,390 (USD 19,000).

| (c) | On June 10, 2020, BRF Hungary LLC was dissolved.

| (d) | On June 24, 2020, BRF Foods GmbH sold all shares held of FFM Further Processing Sdn. Bhd to FFM Berhad for the amount equivalent to R$38,546 (USD7,350). The amount received is presented in the Investing Activities on the Statement of Cash Flows.

| (e) | On July 8, 2020, Sadia Overseas Ltd. was liquidated.

| (f) | On October 22, 2020 the subsidiary BFFI International Ltd. was dissolved.

| (g) | On November 5, 2020 the subsidiary Highline International was dissolved.

On August 20, 2019, the Company’s wholly-owned subsidiary Badi Limited executed a Share Purchase Agreement with Al Takamul International Company for Commercial Investment Limited for the purchase of the remaining 25% of the capital stock owned by non-controlling shareholders in Al Wafi Al Takamul International Company for Food Products Limited (“Wafi”), a company incorporated in the Kingdom of Saudi Arabia responsible for distributing BRF products in that country. The transaction closed on April 21, 2020 for an amount equivalent to R$100,390 thousand (USD19,000 thousand), at which point Wafi became a wholly-owned subsidiary of Badi Limited. The amount paid is presented in the Financing Activities on the Statement of Cash Flows and the difference between the amount paid and the book value of the participation in the subsidiary was recorded in Capital Reserves, in the amount of R$50,945.

On May 07, 2020, the Company executed a share purchase agreement with Hungry Bunny Limited and others, establishing the terms and conditions for the acquisition of 100% of the capital stock of Joody Al Sharqiya Food Production Factory, a food processing company in Saudi Arabia. The transaction considered an enterprise value equivalent to R$45,126 (USD8,000). The closing of this transaction is subject to the satisfaction of conditions precedent applicable to transactions of this nature, including the approval by regulatory authorities.

Except for the associates PP-BIO and PR-SAD in which the Company records the investments by the equity method, all other entities shown in the table above were consolidated.

| 1.2. | Investigations involving BRF

The Company has been subject to two external investigations, denominated “Carne Fraca Operation” in 2017 and “Trapaça Operation” in 2018, as detailed below. The Company’s Audit and Integrity Committee conducted independent investigations, along with the Independent Investigation Committee, composed of external members and with external legal advisors in Brazil and abroad with respect to the allegations involving BRF employees and former employees in the scope of the aforementioned operations and other ongoing investigations.

The main impacts observed as result of the referred investigations were recorded in other operating expenses in the amount of R$10,207 for the nine-month period ended on September 30, 2020 (R$58,397 in the same period of the previous year) and R$4,027 for three-month period ended on September 30, 2020 (R$15,850 in the same period of the previous year) mostly related to expenditures with lawyers, legal advisors and consultants.

In addition to the impacts already registered, there are uncertainties about the outcome of these operations which may result in penalties, fines and normative sanctions, right restrictions and other forms of liabilities, for which the Company is not able to make a reliable estimate of the potential losses.

The outcomes may result in payments of substantial amounts, which may cause a material adverse effect on the Company’s financial position, results and cash flows in the future.

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 39

| 1.2.1. | Carne Fraca Operation

On March 17, 2017, BRF became aware of a decision issued by a 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 the Carne Fraca Operation. Two BRF employees were detained and subsequently released, as well as three others were identified for questioning.

In April 2017, the Brazilian Federal Police and the Brazilian federal prosecutors filed charges against BRF employees, which were accepted by the judge responsible for the process, and its main allegations in this phase involved misconduct related to improper offers and/or promises to government inspectors.

On June 04, 2018, the Company was informed about the establishment of a responsibility administrative process (“PAR”) by the Office of the Comptroller General (“CGU”), under the Law Nº 12,846/2013 (“Anti-corruption Law”), which aims to verify eventual administrative responsibilities related to the facts object of the criminal lawsuit Nº 5016879-04.2017.4.04.7000, (“Criminal Lawsuit”) in progress under the 14th Federal Court of the subsection of Curitiba/PR, as a consequence of the Carne Fraca Operation.

BRF has informed certain regulators and governmental entities, including the U.S. Securities and Exchange Commission (“SEC”) and the U.S. Department of Justice (“DOJ”) about the Carne Fraca Operation and is cooperating with such authorities, which are conducting their own investigations.

On September 28, 2018, the sentence of the Criminal Lawsuit in first instance was published, discharging one of the BRF employees and convicting a former employee for six months of detention with the possibility of substitution for a right-restricting penalty. The Brazilian federal prosecutors presented appeal to the first instance decision. Since then, the appeal is being analyzed by the Federal Regional Court of the 4th region.

| 1.2.2. | Trapaça Operation

On March 5, 2018, the Company learned of a decision issued by a judge of the 1st Federal Court of Ponta Grossa/PR, authorizing the search and seizure of information and documents due to allegations involving misconduct relating to quality violations, improper use of feed components and falsification of tests at certain BRF manufacturing plants and accredited labs. Such operation was denominated as Trapaça Operation. On March 5, 2018, BRF received notice from the Ministry of Agriculture, Livestock and Food Supply (“MAPA”) immediately suspending exports from its Rio Verde/GO, Carambeí/PR and Mineiros/GO plants to 12 countries that require specific sanitary requirements for the control of the bacteria group Salmonella spp and Salmonella pullorum.

On May 14, 2018, the Company received the formal notice that twelve plants located in Brazil were removed from the list that permits imports of animal origin products by the European Union’s countries. The measure came into force as of May 16, 2018 and affects only the plants located in Brazil and which have export licenses to the European Union, not affecting the supply to other markets or other BRF plants located outside Brazil and that export to the European market.

On October 15, 2018, the Federal Police Department submitted to the 1st Federal Criminal Court of the Judicial Branch of Ponta Grossa – PR the final report of its investigation in connection to the Trapaça Operation. The police inquiry indicted 43 people, including former key executives of the Company.

On December 04, 2019, the Public Prosecution filed charges against eleven people related to allegations about Premix (compound of vitamins, minerals, and amino acids for the inclusion of micro ingredients in the feed for the ideal nutrition of the animals) as outcome of the Trapaça Operation. No administration member, director or executive in current management position has been identified.

BRF informed certain regulators and government entities, including SEC and DOJ about the Trapaça Operation and has been cooperating with such authorities, which are conducting their own investigations.

| 1.2.3. | Governance enhancement

The Company is cooperating with the investigations and collaborates to the clarification of the facts. The Company has been taking actions to strengthen the compliance with its policies, procedures and internal controls. In this sense, the Company has decided to move away, independently of the results of the investigations, all employees mentioned in the Federal Police’s final report of the Trapaça Operation until all facts are clarified.

The Company believes that its efforts strengthens and consolidates its governance to ensure the highest levels of safety standards, integrity and quality.

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 40

Among the actions implemented, are: (i) strengthening in the risk management, specially compliance, (ii) continuous strengthening of the Compliance, Internal Audit and Internal Controls departments, (iii) review and issuance of new policies and procedures specifically related to applicable anticorruption laws, (iv) review and enhancement of the procedures for reputational verification of business partners, (v) review and enhancement of the processes of internal investigation, (vi) expansion of the independent reporting channel, (vii) review of transactional controls, and (viii) review and issuance of new consequence policy for misconduct.

| 1.3. | U.S. Class Action

On March 12, 2018, a shareholder class action lawsuit was filed against the Company, some of its former managers and one current officer before the United States Federal District Court in the city of New York, on behalf of holders of American Depositary Receipts (“ADR”) between April 4, 2013 and March 5, 2018. The suit alleged violations of the federal securities laws of the United States related to allegations concerning, among other matters, Carne Fraca Operation and Trapaça Operation. On July 2, 2018, that Court appointed the City of Birmingham Retirement and Relief System lead plaintiff in the action. On October 25, 2019, the Court granted lead plaintiff leave to file a Fourth Amended Complaint, which was filed on November 8, 2019. On December 13, 2019, the served defendants filed a motion to dismiss. On January 21, 2020, the Lead Plaintiff filed its opposition motion and, on February 11, 2020, the defendants filed a response.

On March 27, 2020, the parties reached an agreement to settle this class action by payment of an amount equivalent to R$204,436 (USD40,000), to resolve all pending and prospective claims by individuals or entities who purchased or otherwise acquired BRF’s ADRs between April 4, 2013 and March 5, 2018. On May 27, 2020, the amount was transferred to an escrow account in the name of the lawyers of the Lead Plaintiff. On October 23, 2020, the agreement was approved by the United States District Court for the Southern District of New York.

The agreement does not constitute any admission of liability or wrongdoing by BRF or its executives and expressly provides that BRF denies any misconduct or that any plaintiff has suffered any damages or was harmed by any conduct alleged in this action.

The provision for the aforementioned amount was recognized in other operating expenses (note 27) in the first quarter of 2020.

| 1.4. | Coronavirus (COVID-19)

On January 31, 2020 the World Health Organization announced that the COVID-19 is a global health emergency and on March 11, 2020 declared it a global pandemic. The outbreak has triggered significant decisions from governments and private sector entities, which in addition to the potential impact, increased the uncertainty level for the economic agents and may cause effects in the amounts recognized in the financial statements.

BRF continues to operate its industrial complexes, distribution centers, logistics, supply chain and administrative offices, even if temporarily and partially under remote work regime in some of the corporate offices. Therefore, until the date of approval of the interim financial information, there has been no relevant change in its production plan, operation and/or commercialization. Additionally, management has developed and implemented contingency plans to maintain the operations and monitors the effects of the pandemic through a permanent multidisciplinary monitoring committee, formed by executives, specialists in the public health area and consultants.

Due to the pandemic, the Company has incurred in losses and additional expenditures, mainly related to idleness, personnel, prevention, control and donations, as shown below:

|  |  |  | Consolidated
|  |  |  | 2020
|  | Jul - Sep |  | Jan -Sep
Cost of sales |  | (99,019) |  | (273,308)
Selling expenses |  | (2,241) |  | (48,558)
General and administrative expenses |  | (43,911) |  | (69,976)
|  | (145,171) |  | (391,842)

Aiming to preventively strengthen its liquidity level, the Company contracted credit facilities with financial institutions in Brazil in the aggregate amount of, approximately, R$2,430,000 and average term of one year, without any financial

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 41

covenant clause. During July and August of 2020, the Company prepaid part of the referred credit facilities in the aggregated notional and interest amount of R$964,484 (note 15.4).

The management also understands that the projections of results and cashflows used for the impairment test of the cash generating units are still substantially adequate and there are no indications of possible impairment. Due to the high volatility and uncertainty around the length and the impact of the pandemic, the Company will keep monitoring the situation and evaluating the impacts on assumptions and estimates used in preparing our financial reporting.

| 1.5. | Seasonality

During the months of November and December of each year, the Company is impacted by seasonality in the Brazil operating segment due to Christmas and New Year’s Celebrations. The products that are relevant contributors are: turkey, Chester®, ham and pork cuts (hind leg/pork loin).

In the International operating segment, seasonality is due to Ramadan, which is the holy month of the Muslim calendar. The beginning of Ramadan depends on the beginning of the moon cycle and in 2020 occurred between April 24, 2020 and May 23, 2020.

Consequently to the pandemic, the behavior of the Company’s seasonality has circumstantially changed, due to the decreased movement of people, redirection of channels and changes in the consumption habits.

| 2. | BASIS OF PREPARATION AND PRESENTATION OF INTERIM FINANCIAL STATEMENTS

The parent company’s and consolidated interim financial information were prepared in accordance with the CPC 21 (R1) – Interim Financial Statements and the IAS 34 – Interim Financial Reporting issued by the International Accounting Standards Board - IASB as well as with the standards issued by the Brazilian Securities and Exchange Commission. All the relevant information applicable to the interim financial information, and only them, are being evidenced and correspond to those used by administration in its management.

The parent company’s and consolidated interim financial information are expressed in thousands of Brazilian Reais (“R$”) and the disclosures of amounts in other currencies, when applicable, were also expressed in thousands, unless otherwise stated.

The preparation of the parent company’s and consolidated interim financial information require 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. The uncertainty inherent to these judgments, assumptions and estimates could result in material adjustments to the carrying amount of certain assets and liabilities in future periods.

Any judgments, estimates and assumptions are reviewed at each reporting period.

The parent company’s and consolidated interim financial information were prepared based on the recoverable historical cost, except for the following material items recognized in the statements of financial position:

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

(ii) share-based payments and employee benefits measured at fair value;

(iii) biological assets measured at fair value; and

(iv) assets held for sale in the cases the fair value is lower than historical cost.

The Company prepared parent company’s and consolidated financial statements under the going concern assumption and disclosed all relevant information in its explanatory notes, in order to clarify and complement the accounting basis adopted.

| 3. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The interim financial information, in this case 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,

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 42

events and circumstances and do not repeat the information previously disclosed, except when Management judges that the maintenance of the information is relevant.

The interim financial information was prepared based on the accounting policies and estimates calculation methodologies adopted in the preparation of the annual financial statements for the year ended December 31, 2019 (note 3), except for the income tax expense, which was calculated according to CPC 21 / IAS 34 by applying the estimated annual effective tax rate to the pre-tax profit or loss for the interim period.

There were no changes on such policies and estimates calculation methodologies. As allowed by CPC 21 / IAS 34, Management decided not to disclose again the details of the accounting policies adopted by the Company. Hence, the interim financial information should be read along with the annual financial statements for the year ended December 31, 2019, in order to allow the users to further understand the Company’s financial conditions and liquidity, as well as its capacity to generate profits and cash flows.

| 4. | CASH AND CASH EQUIVALENTS

| Average rate (1) |  | Parent company |  | Consolidated
|  | 09.30.20 |  | 12.31.19 |  | 09.30.20 |  | 12.31.19
Cash and bank accounts |  |  |  |  |  |  |  |  |
U.S. Dollar | - |  | 828,315 |  | 403 |  | 4,242,272 |  | 1,356,128
Brazilian Reais | - |  | 49,563 |  | 166,506 |  | 51,264 |  | 167,051
Euro | - |  | 8,683 |  | 3,813 |  | 58,610 |  | 71,626
Other currencies | - |  | 371 |  | 180 |  | 965,415 |  | 694,982
|  |  | 886,932 |  | 170,902 |  | 5,317,561 |  | 2,289,787
Cash equivalents |  |  |  |  |  |  |  |  |
In Brazilian Reais |  |  |  |  |  |  |  |  |
Investment funds | 0.17% |  | 4,942 |  | 3,507 |  | 4,942 |  | 3,507
Bank deposit certificates | 2.98% |  | 3,036,570 |  | 869,473 |  | 3,049,149 |  | 879,758
|  |  | 3,041,512 |  | 872,980 |  | 3,054,091 |  | 883,265
In U.S. Dollar |  |  |  |  |  |  |  |  |
Term deposit | 0.25% |  | - |  | 254,583 |  | 46,863 |  | 270,714
Overnight | 0.10% |  | 573,373 |  | 70,515 |  | 2,970,751 |  | 689,874
Other currencies |  |  |  |  |  |  |  |  |
Term deposit | - |  | - |  | - |  | 9,321 |  | 104,145
|  |  | 573,373 |  | 325,098 |  | 3,026,935 |  | 1,064,733
|  |  | 4,501,817 |  | 1,368,980 |  | 11,398,587 |  | 4,237,785

| (1) | Weighted average annual rate.

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 43

| 5. | MARKETABLE SECURITIES

|  |  |  |  | Average rate (2) |  | Parent company |  | Consolidated
| WAM (1) |  | Currency |  |  | 09.30.20 |  | 12.31.19 |  | 09.30.20 |  | 12.31.19
Fair value through other comprehensive income |  |  |  |  |  |  |  |  |  |  |  |  |
Credit linked note | 2.65 |  | USD |  | 3.85% |  | - |  | - |  | - |  | 19,285
Stocks | - |  | R$ and HKD |  | - |  | - |  | - |  | 45,522 |  | 26,678
|  |  |  |  |  |  | - |  | - |  | 45,522 |  | 45,963
Fair value through profit and loss |  |  |  |  |  |  |  |  |  |  |  |  |
Financial treasury bills | 3.64 |  | R$ |  | 1.90% |  | 311,048 |  | 396,994 |  | 311,048 |  | 396,994
Investment funds - FIDC BRF | 3.21 |  | R$ |  | - |  | 14,995 |  | 14,891 |  | 14,995 |  | 14,891
Investment funds | 0.09 |  | ARS |  | - |  | - |  | - |  | 2,043 |  | 1,903
|  |  |  |  |  |  | 326,043 |  | 411,885 |  | 328,086 |  | 413,788
Amortized cost |  |  |  |  |  |  |  |  |  |  |  |  |
Sovereign bonds and others (3) | 2.58 |  | AOA |  | 3.82% |  | - |  | - |  | 321,766 |  | 265,783
|  |  |  |  |  |  | 326,043 |  | 411,885 |  | 695,374 |  | 725,534
Current |  |  |  |  |  |  | 311,048 |  | 396,994 |  | 313,091 |  | 418,182
Non-current (4) |  |  |  |  |  |  | 14,995 |  | 14,891 |  | 382,283 |  | 307,352

| (1) | Weighted average maturity in years.

| (2) | Weighted average annual rate.

(3) | It’s comprised of private securities and sovereign securities of the Angola Government and are presented net of expected losses in the amount of R$1,383 (R$1,983 on December 31, 2019).
(4) | Maturity until December of 2023. |

Additionally, as of September 30, 2020, the amount of R$237,945 (R$100,435 on December 31, 2019) was pledged as guarantee, with no use restrictions, for USD denominated future contracts traded on B3.

| 6. | TRADE ACCOUNTS RECEIVABLE AND OTHER RECEIVABLES

| Parent company |  | Consolidated
| 09.30.20 |  | 12.31.19 |  | 09.30.20 |  | 12.31.19
Trade accounts receivable |  |  |  |  |  |  |
Domestic customers | 856,947 |  | 1,333,344 |  | 859,254 |  | 1,336,762
Domestic related parties | 4,685 |  | 800 |  | - |  | -
Foreign customers | 561,151 |  | 457,413 |  | 2,655,458 |  | 2,215,050
Foreign related parties | 5,631,690 |  | 4,779,202 |  | - |  | -
| 7,054,473 |  | 6,570,759 |  | 3,514,712 |  | 3,551,812
( - ) Adjustment to present value | (6,153) |  | (8,522) |  | (8,299) |  | (10,121)
( - ) Expected credit losses | (594,883) |  | (457,505) |  | (659,256) |  | (503,848)
| 6,453,437 |  | 6,104,732 |  | 2,847,157 |  | 3,037,843
Current | 6,446,913 |  | 6,097,935 |  | 2,840,617 |  | 3,031,046
Non-current | 6,524 |  | 6,797 |  | 6,540 |  | 6,797
Other receivables | 130,203 |  | 150,156 |  | 133,780 |  | 153,799
( - ) Adjustment to present value | (1,219) |  | (1,936) |  | (1,219) |  | (1,936)
( - ) Expected credit losses | (27,621) |  | (27,986) |  | (27,621) |  | (27,986)
| 101,363 |  | 120,234 |  | 104,940 |  | 123,877
Current | 50,659 |  | 56,002 |  | 54,236 |  | 59,645
Non-current (1) | 50,704 |  | 64,232 |  | 50,704 |  | 64,232

| (1) | Weighted average maturity of 2.42 years.

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 44

The Company performs credit assignments with no right of return to the BRF Clients’ Credit Rights Investment Fund (“FIDC BRF“), whose sole purpose is to acquire credit rights arising from commercial transactions carried out between the Company and its clients in Brazil. On September 30, 2020, FIDC BRF had an outstanding balance of R$696,449 (R$730,251 on December 31, 2019) related to such credit rights, which are no longer recorded in the Company’s statement of financial position.

On September 30, 2020, other receivables are mainly represented by receivables from the sale of farms and various properties, with a balance of R$88,070 (R$109,419 on December 31, 2019).

The movements of the expected credit losses are presented below:

| Parent company |  | Consolidated
| 09.30.20 |  | 09.30.20
Beginning balance | (457,505) |  | (503,848)
(Additions) Reversals | (6,850) |  | (15,126)
Write-offs | 4,681 |  | 10,567
Exchange rate variation | (135,209) |  | (150,849)
Ending balance | (594,883) |  | (659,256)

The aging of trade accounts receivable is as follows:

| Parent company |  | Consolidated
| 09.30.20 |  | 12.31.19 |  | 09.30.20 |  | 12.31.19
Not overdue | 6,462,047 |  | 6,028,415 |  | 2,635,663 |  | 2,820,308
Overdue |  |  |  |  |  |  |
01 to 60 days | 6,050 |  | 29,232 |  | 217,473 |  | 143,303
61 to 90 days | 1,633 |  | 5,549 |  | 6,034 |  | 19,409
91 to 120 days | 2,761 |  | 1,568 |  | 5,305 |  | 3,723
121 to 180 days | 1,280 |  | 876 |  | 10,718 |  | 3,934
181 to 360 days | 6,022 |  | 5,166 |  | 20,305 |  | 20,748
More than 360 days | 574,680 |  | 499,953 |  | 619,214 |  | 540,387
( - ) Adjustment to present value | (6,153) |  | (8,522) |  | (8,299) |  | (10,121)
( - ) Expected credit losses | (594,883) |  | (457,505) |  | (659,256) |  | (503,848)
| 6,453,437 |  | 6,104,732 |  | 2,847,157 |  | 3,037,843

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 45

| 7. | INVENTORIES

| Parent company |  | Consolidated
| 09.30.20 |  | 12.31.19 |  | 09.30.20 |  | 12.31.19
Finished goods | 2,056,768 |  | 1,302,419 |  | 3,511,699 |  | 2,257,119
Work in progress | 181,494 |  | 147,022 |  | 186,666 |  | 149,470
Raw materials | 1,632,931 |  | 721,278 |  | 1,751,678 |  | 803,520
Packaging materials | 79,142 |  | 57,915 |  | 89,541 |  | 60,715
Secondary materials | 453,059 |  | 367,311 |  | 460,868 |  | 375,744
Supplies | 177,834 |  | 168,248 |  | 214,549 |  | 205,399
Imports in transit | 135,250 |  | 61,021 |  | 135,250 |  | 61,021
Other | 39,582 |  | 5,252 |  | 55,886 |  | 19,266
(-) Adjustment to present value | (69,518) |  | (44,319) |  | (69,524) |  | (44,338)
| 4,686,542 |  | 2,786,147 |  | 6,336,613 |  | 3,887,916

The movements in the write-down of inventories to the net realizable value of inventories, which were recorded against the Cost of Sales, are presented in the table below:

| Parent company
|  |  |  |  |  |  | 09.30.20
| Realizable value through sale | Impaired inventories | Obsolete inventories | Total
Beginning balance | (9,075) |  | (37,729) |  | (8,416) |  | (55,220)
Additions | (55,715) |  | (52,059) |  | (3,861) |  | (111,635)
Reversals | 41,181 |  | - |  | - |  | 41,181
Write-offs | - |  | 67,165 |  | 2,530 |  | 69,695
Ending balance | (23,609) |  | (22,623) |  | (9,747) |  | (55,979)

| Consolidated
|  |  |  |  |  |  | 09.30.20
| Realizable value through sale | Impaired inventories | Obsolete inventories | Total
Beginning balance | (10,712) |  | (42,526) |  | (14,919) |  | (68,157)
Additions | (79,319) |  | (62,710) |  | (8,560) |  | (150,589)
Reversals | 53,673 |  | - |  | - |  | 53,673
Write-offs | - |  | 78,746 |  | 6,704 |  | 85,450
Exchange rate variation | 322 |  | (231) |  | (267) |  | (176)
Ending balance | (36,036) |  | (26,721) |  | (17,042) |  | (79,799)

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 46

| 8. | BIOLOGICAL ASSETS

The live animals are represented by poultry and pork and segregated into consumables and animals for production. The rollforward of the biological assets are presented below:

| Parent company
|  |  |  |  |  |  |  |  |  |  |  |  | 09.30.20
| Current |  | Non-current
| Live animals |  | Live animals |  |  |
| Poultry | Pork | Total |  | Poultry | Pork | Forests | Total
Beginning balance | 557,773 |  | 987,354 |  | 1,545,127 |  | 350,285 |  | 337,804 |  | 328,553 |  | 1,016,642
Additions/Transfer | 6,878,274 |  | 5,097,805 |  | 11,976,079 |  | 47,259 |  | 260,620 |  | 27,847 |  | 335,726
Changes in fair value (1) | 1,462,032 |  | 251,791 |  | 1,713,823 |  | 33,159 |  | (133,453) |  | - |  | (100,294)
Harvest | - |  | - |  | - |  | - |  | - |  | (44,847) |  | (44,847)
Write-off | - |  | - |  | - |  | - |  | - |  | (80) |  | (80)
Transfer between current and non-current | 42,665 |  | 67,016 |  | 109,681 |  | (42,665) |  | (67,016) |  | - |  | (109,681)
Transfer to assets held for sale | - |  | - |  | - |  | - |  | - |  | 329 |  | 329
Transfer to inventories | (8,250,249) |  | (5,264,671) |  | (13,514,920) |  | - |  | - |  | - |  | -
Ending balance | 690,495 |  | 1,139,295 |  | 1,829,790 |  | 388,038 |  | 397,955 |  | 311,802 |  | 1,097,795
| Consolidated
|  |  |  |  |  |  |  |  |  |  |  |  | 09.30.20
| Current |  | Non-current
| Live animals |  | Live animals |  |  |
| Poultry | Pork | Total |  | Poultry | Pork | Forests | Total
Beginning balance | 615,685 |  | 987,354 |  | 1,603,039 |  | 414,668 |  | 337,804 |  | 328,553 |  | 1,081,025
Additions/Transfer | 6,888,735 |  | 5,097,805 |  | 11,986,540 |  | 55,420 |  | 260,620 |  | 27,847 |  | 343,887
Changes in fair value (1) | 1,462,903 |  | 251,791 |  | 1,714,694 |  | 27,246 |  | (133,453) |  | - |  | (106,207)
Harvest | - |  | - |  | - |  | - |  | - |  | (44,847) |  | (44,847)
Write-off | - |  | - |  | - |  | - |  | - |  | (80) |  | (80)
Transfer between current and non-current | 42,665 |  | 67,016 |  | 109,681 |  | (42,665) |  | (67,016) |  | - |  | (109,681)
Transfer to assets held for sale | - |  | - |  | - |  | - |  | - |  | 329 |  | 329
Transfer to inventories | (8,250,249) |  | (5,264,671) |  | (13,514,920) |  | - |  | - |  | - |  | -
Exchange variation | 4,407 |  | - |  | 4,407 |  | 4,939 |  | - |  | - |  | 4,939
Ending balance | 764,146 |  | 1,139,295 |  | 1,903,441 |  | 459,608 |  | 397,955 |  | 311,802 |  | 1,169,365

| (1) | The change in the fair value of biological assets includes depreciation of breeders and depletion of forests in the amount of R$578,814 (R$728,904 on December 31, 2019) in the parent company and R$645,551 (R$798,239 on December 31, 2019) in the consolidated.

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 47

The estimated balances and quantities of live animal are set forth below:

| Parent company
| 09.30.20 |  | 12.31.19
| Quantity (thousand of heads) |  | Value |  | Quantity (thousand of heads) |  | Value
Consumable biological assets |  |  |  |  |  |  |
Immature poultry | 172,014 |  | 690,495 |  | 170,071 |  | 557,773
Immature pork | 4,076 |  | 1,139,295 |  | 4,098 |  | 987,354
Total current | 176,090 |  | 1,829,790 |  | 174,169 |  | 1,545,127
Production biological assets |  |  |  |  |  |  |
Immature poultry | 6,176 |  | 147,202 |  | 6,093 |  | 129,837
Mature poultry | 10,295 |  | 240,836 |  | 10,329 |  | 220,448
Immature pork | 90 |  | 89,472 |  | 211 |  | 77,027
Mature pork | 459 |  | 308,483 |  | 455 |  | 260,777
Total non-current | 17,020 |  | 785,993 |  | 17,088 |  | 688,089
| 193,110 |  | 2,615,783 |  | 191,257 |  | 2,233,216

| Consolidated
| 09.30.20 |  | 12.31.19
| Quantity (thousand of heads) |  | Value |  | Quantity (thousand of heads) |  | Value
Consumable biological assets |  |  |  |  |  |  |
Immature poultry | 191,546 |  | 764,146 |  | 189,602 |  | 615,685
Immature pork | 4,076 |  | 1,139,295 |  | 4,098 |  | 987,354
Total current | 195,622 |  | 1,903,441 |  | 193,700 |  | 1,603,039
Production biological assets |  |  |  |  |  |  |
Immature poultry | 6,827 |  | 180,194 |  | 7,042 |  | 160,415
Mature poultry | 11,682 |  | 279,414 |  | 11,554 |  | 254,253
Immature pork | 90 |  | 89,472 |  | 211 |  | 77,027
Mature pork | 459 |  | 308,483 |  | 455 |  | 260,777
Total non-current | 19,058 |  | 857,563 |  | 19,262 |  | 752,472
| 214,680 |  | 2,761,004 |  | 212,962 |  | 2,355,511

As of September 30, 2020, the Company has forests pledged as collateral for financing and tax/civil contingencies in the amount of R$67,571 in the parent company and in the consolidated (R$62,408 in the parent company and in the consolidated at December 31, 2019).

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 48

| 9. | RECOVERABLE TAXES

| Parent company |  | Consolidated
| 09.30.20 |  | 12.31.19 |  | 09.30.20 |  | 12.31.19
Recoverable taxes |  |  |  |  |  |  |
VAT (1) | 1,510,074 |  | 1,476,595 |  | 1,575,471 |  | 1,635,664
PIS and COFINS ("Federal Taxes to Social Fund Programs") | 3,113,389 |  | 2,986,235 |  | 3,114,601 |  | 2,990,313
IPI ("Federal VAT") | 784,659 |  | 848,862 |  | 784,662 |  | 848,865
INSS ("Brazilian Social Security") | 260,093 |  | 255,950 |  | 260,098 |  | 255,967
Other | 40,949 |  | 41,048 |  | 41,806 |  | 80,144
(-) Impairment on recoverable taxes | (178,377) |  | (167,194) |  | (178,860) |  | (167,674)
| 5,530,787 |  | 5,441,496 |  | 5,597,778 |  | 5,643,279
Current | 276,921 |  | 274,480 |  | 343,936 |  | 473,732
Non-current | 5,253,866 |  | 5,167,016 |  | 5,253,842 |  | 5,169,547
Recoverable income tax and social contribution |  |  |  |  |  |  |
Income and social contribution tax ("IR/CS") | 89,291 |  | 313,704 |  | 130,562 |  | 430,778
(-) Impairment on recoverable taxes | (8,985) |  | (8,985) |  | (9,029) |  | (9,029)
| 80,306 |  | 304,719 |  | 121,533 |  | 421,749
Current | 25,281 |  | 40,291 |  | 59,896 |  | 152,486
Non-current | 55,025 |  | 264,428 |  | 61,637 |  | 269,263

| (1) | Value Added Taxes, including ICMS (Brazilian VAT).

The rollforward of the impairment on recoverable taxes are set forth below:

| Parent company
|  |  |  |  |  |  |  |  |  |  | 09.30.20
| VAT | PIS and COFINS | IR/CS | IPI | Other | Total
Beginning balance | (141,193) |  | (16,922) |  | (8,985) |  | (3,818) |  | (5,261) |  | (176,179)
Additions | (29,187) |  | - |  | - |  | (263) |  | - |  | (29,450)
Write-offs | 9,799 |  | 2,694 |  | - |  | 2,097 |  | 3,677 |  | 18,267
Ending balance | (160,581) |  | (14,228) |  | (8,985) |  | (1,984) |  | (1,584) |  | (187,362)

| Consolidated
|  |  |  |  |  |  |  |  |  |  | 09.30.20
| VAT | PIS and COFINS | IR/CS | IPI | Other | Total
Beginning balance | (141,193) |  | (16,922) |  | (9,029) |  | (3,818) |  | (5,741) |  | (176,703)
Additions | (29,187) |  | - |  | - |  | (263) |  | - |  | (29,450)
Write-offs | 9,799 |  | 2,694 |  | - |  | 2,097 |  | 3,677 |  | 18,267
Exchange rate variation | - |  | - |  | - |  | - |  | (3) |  | (3)
Ending balance | (160,581) |  | (14,228) |  | (9,029) |  | (1,984) |  | (2,067) |  | (187,889)

| 9.1. | State Taxes

| 9.1.1. | State VAT (“ICMS”) – Tax Movement of Goods and Services

As result of (i) export activity, (ii) tax benefits, (iii) sales in the domestic market subject to reduced rates; and (iv) acquisition of property, plant and equipment, the Company generates credits that are offset against debits arising from sales in the domestic market or transferred to third parties.

The Company has ICMS credit balances in the States of Paraná, Santa Catarina, Mato Grosso do Sul and Amazonas, which will be realized in the short and long term, based on the recoverability study approved by the Management.

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 49

| 9.2. | Federal Taxes

| 9.2.1. | PIS and COFINS - Contribution to the Social Integration Plan and Contribution for Social Security Financing

The accumulated tax credits of PIS and COFINS basically arise from credits on purchases of raw materials used in the production of exported products or products for which sale is taxed at zero rate, such as fresh meat and margarine. The realization of these credits usually occurs through offsetting with sales of taxed products in the domestic market, with other federal taxes, and more recently with social security contributions, or even, if necessary, through refund or reimbursement requests.

From the total balance of recoverable PIS and COFINS in the parent company and consolidated, R$2,712,716 on September 30, 2020 (R$2,674,629 on December 31, 2019) correspond to relevant tax assets recognized as result as gains from lawsuits related to the right to exclude the ICMS from the PIS and COFINS tax basis, according to the financial statements for 2019. In the study prepared by the Administration, its realization is estimated through offsetting with federal taxes and the reimbursement of the amounts through precatory as expected below:

| PIS and COFINS ("Federal Taxes to Social Fund Programs")
2022 | 233,000
2023 | 372,000
2024 | 623,000
2025 | 680,000
2026 | 804,716
| 2,712,716

| 9.2.2. | IPI - Industrialized Product Tax

The Company recognized relevant tax assets as result of gains from lawsuits related to IPI, specially “crédito prêmio”. The balance referring to these assets in the parent company and consolidated on September 30, 2020 is R$821,606 (R$1,025,376 on December 31, 2019), of which R$781,236 (R$840,455 on December 31, 2019) is recorded as Recoverable Taxes and R$40,370 (R$184,921 on December 31, 2019) as Other Current Assets, which refers to the cases in which the precatory has already been issued.

In the study prepared by the Administration, its realization is estimated through the refund of the amounts as expected below:

| IPI ("Federal VAT")
2021 | 40,370
2025 | 573,218
2026 | 208,018
| 821,606

| 9.2.3. | Realization of the tax credits

The Company received in cash, through refunds related to IPI credits, the amount of R$197,584 in the nine-month period ended September 30, 2020 and R$93,905 in the three-month period ended September 30, 2020 (null in the same periods of the previous year) in the parent company and consolidated.

Additionally, the Company offset other taxes such as INSS and withholding Income Tax in the amount of R$653,438 for the nine-month period ended September 30, 2020 (R$344,134 in the same period of the previous year) and R$289,306 for the three-month period ended September 30, 2020 (R$118,328 in the same period of the previous year) with other federal taxes, mainly with PIS and COFINS credits, in the parent company and consolidated, preserving its liquidity and optimizing its capital structure.

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 50

| 10. | INCOME AND SOCIAL CONTRIBUTION TAXES

| 10.1 | Deferred income and social contribution taxes

| Parent company |  | Consolidated
| 09.30.20 |  | 12.31.19 |  | 09.30.20 |  | 12.31.19
Assets |  |  |  |  |  |  |
Tax loss carryforwards (corporate income tax) | 1,780,643 |  | 1,780,424 |  | 1,787,233 |  | 1,785,027
Negative calculation basis (social contribution tax) | 680,598 |  | 680,518 |  | 682,970 |  | 682,175
Temporary differences - Assets |  |  |  |  |  |  |
Provisions for tax, civil and labor risks | 485,853 |  | 477,538 |  | 485,853 |  | 477,538
Suspended collection taxes | 14,294 |  | 31,069 |  | 14,294 |  | 31,069
Expected credit losses | 182,216 |  | 135,219 |  | 182,227 |  | 135,374
Impairment on tax credits | 66,030 |  | 60,771 |  | 66,030 |  | 60,771
Provision for other obligations | 107,781 |  | 93,619 |  | 107,781 |  | 93,619
Employees' profit sharing | 62,568 |  | 66,166 |  | 62,568 |  | 66,166
Write-down to net realizable value of inventories | 18,880 |  | 18,657 |  | 18,993 |  | 18,718
Employees' benefits plan | 216,988 |  | 202,228 |  | 216,988 |  | 202,228
Difference on tax x accounting basis for leases | 68,090 |  | 37,492 |  | 68,090 |  | 37,492
Unrealized losses on derivatives, net | 3,557 |  | - |  | 3,557 |  | -
Unrealized losses on fair value measurement, net | 100,292 |  | - |  | 100,292 |  | -
Adjustment to estimated annual effective tax rate - CPC 21 | 58,806 |  | - |  | 58,806 |  | -
Other temporary differences | 8,481 |  | 35,568 |  | 14,958 |  | 66,458
| 3,855,077 |  | 3,619,269 |  | 3,870,640 |  | 3,656,635
Temporary differences - Liabilities |  |  |  |  |  |  |
Difference on tax x accounting basis for goodwill amortization | (320,445) |  | (319,592) |  | (320,445) |  | (319,592)
Difference on tax x accounting basis for depreciation (useful life) | (842,838) |  | (802,844) |  | (842,838) |  | (802,844)
Business combination (1) | (693,372) |  | (622,203) |  | (716,844) |  | (640,318)
Unrealized gains on derivatives, net | - |  | (43,428) |  | - |  | (43,428)
Unrealized fair value gains, net | - |  | (11,998) |  | - |  | (11,998)
Other temporary differences | (14,905) |  | (10,710) |  | (120,642) |  | (77,903)
| (1,871,560) |  | (1,810,775) |  | (2,000,769) |  | (1,896,083)
Total deferred tax | 1,983,517 |  | 1,808,494 |  | 1,869,871 |  | 1,760,552
Total Assets | 1,983,517 |  | 1,808,494 |  | 1,999,083 |  | 1,845,862
Total Liabilities | - |  | - |  | (129,212) |  | (85,310)
| 1,983,517 |  | 1,808,494 |  | 1,869,871 |  | 1,760,552

| (1) | The deferred tax asset on the Sadia business combination was recorded on the amortization difference between the accounting and tax goodwill calculated as of the purchase price allocation date. The deferred tax liability on the Sadia business combination is substantially represented by the allocation of goodwill to property, plant and equipment, brands and contingent liabilities.

The roll-forward of deferred income taxes is set forth below:

| Parent company |  | Consolidated
|  |  | 2020
| Jan - Sep |  | Jan - Sep
Beginning balance | 1,808,494 |  | 1,760,552
Deferred income and social contribution taxes recognized in the statement of income | (94,933) |  | (165,146)
Deferred income and social contribution taxes recognized in other comprehensive income | 269,658 |  | 269,658
Other | 298 |  | 4,807
Ending balance | 1,983,517 |  | 1,869,871

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 51

| 10.2 | Estimated period of realization

Deferred tax assets arising from temporary differences will be realized as they are settled or realized. The period of settlement or realization of such differences is subject to externalities and is linked to several factors that are not under the control of Management.

In estimating the realization of deferred tax credits on tax losses and negative social contribution basis, Management considers its budget and strategic plans, adjusted based on the estimates of the main tax additions and exclusions, which were approved by the Board of Directors, as recommended by the Company’s Fiscal Council. Based on this estimate, Management believes that it is probable that these deferred tax credits will be realized, as shown below:

| Parent company |  | Consolidated
2021 | 100,037 |  | 100,037
2022 | 159,307 |  | 159,307
2023 | 267,209 |  | 267,209
2024 | 291,568 |  | 291,568
2025 to 2027 | 945,298 |  | 945,298
2028 onwards | 697,822 |  | 706,784
| 2,461,241 |  | 2,470,203

The deferred tax credits on tax losses and negative social contribution basis related to the parent company and its subsidiaries domiciled in Brazil do not expire and the use to offset income taxes payable is limited to 30% of future taxable income.

| 10.3 | Income and social contribution taxes reconciliation

| Parent company |  | Consolidated
|  |  | 2020 |  |  |  | 2019 |  |  |  | 2020 |  |  |  | 2019
| Jul - Sep |  | Jan - Sep |  | Jul - Sep |  | Jan - Sep |  | Jul - Sep |  | Jan - Sep |  | Jul - Sep |  | Jan - Sep
Income before income and social contribution taxes – continued operations | 259,958 |  | 569,673 |  | 790,039 |  | 737,324 |  | 307,658 |  | 652,752 |  | 809,277 |  | 829,929
Nominal tax rate | 34% |  | 34% |  | 34% |  | 34% |  | 34% |  | 34% |  | 34% |  | 34%
Expense at nominal rate | (88,386) |  | (193,689) |  | (268,613) |  | (250,690) |  | (104,604) |  | (221,936) |  | (275,154) |  | (282,176)
Reconciling items |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Income from associates and joint ventures | 380,359 |  | 2,445,353 |  | 384,658 |  | 503,671 |  | - |  | - |  | 100,007 |  | 83,316
Difference of tax rates on results of foreign subsidiaries | - |  | - |  | - |  | - |  | 62,127 |  | 1,060,802 |  | (53,254) |  | 53,336
Difference of functional currency of foreign subsidiaries | - |  | - |  | - |  | - |  | 289,404 |  | 1,343,322 |  | 126,709 |  | 109,376
Deferred tax assets not recognized (1) | (136,621) |  | (2,427,841) |  | 97,558 |  | 69,648 |  | (136,621) |  | (2,427,841) |  | 97,558 |  | 69,648
Share-based payment | (11,906) |  | (16,718) |  | (4,986) |  | (11,282) |  | (11,906) |  | (16,718) |  | (4,986) |  | (11,282)
Penalties | 367 |  | (5,813) |  | (12,652) |  | (11,950) |  | 367 |  | (5,813) |  | (12,652) |  | (11,950)
Investment grant | 21,441 |  | 40,955 |  | 11,226 |  | 41,915 |  | 21,441 |  | 40,955 |  | 11,226 |  | 41,915
Adjustment to estimated annual effective tax rate – CPC 21 | (216,245) |  | 58,806 |  | (547,964) |  | (552,802) |  | (216,245) |  | 58,806 |  | (547,965) |  | (552,802)
Reversal (recognition) of provision with no deferred tax constituted | - |  | - |  | 45,683 |  | 24,544 |  | - |  | - |  | 254,677 |  | 233,538
Other permanent differences | 7,824 |  | 4,014 |  | (59,841) |  | (39,439) |  | 7,088 |  | 3,277 |  | (59,838) |  | (39,498)
| (43,167) |  | (94,933) |  | (354,931) |  | (226,385) |  | (88,949) |  | (165,146) |  | (363,672) |  | (306,579)
Current income tax | - |  | - |  | 904 |  | 904 |  | (8,363) |  | (46,695) |  | (11,560) |  | (98,398)
Deferred income tax | (43,167) |  | (94,933) |  | (355,835) |  | (227,289) |  | (80,586) |  | (118,451) |  | (352,112) |  | (208,181)

| (1) | Amount related to the non-recognition of deferred tax on tax losses and negative basis in the amount of R$7,140,709 in the parent company and in the consolidated, due to limited capacity of realization (note 10.2).

The Company’s management determined that the total profits recorded by the holdings of its wholly owned subsidiaries abroad will not be redistributed. Such funds will be used for investments in the wholly owned subsidiaries.

Income tax returns in Brazil are subject to review by the tax authorities for a period of five years from the date of their delivery. The Company may be subject to additional collection of taxes, fines and interest as a result of these reviews. The results obtained by subsidiaries abroad are subject to taxation in accordance with the tax laws of each country.

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 52

| 11. | JUDICIAL DEPOSITS

The rollforward of the judicial deposits is set forth below:

| Parent company
|  |  |  |  |  |  | 09.30.20
| Tax | Labor | Civil, commercial and other | Total
Beginning balance | 244,977 |  | 301,739 |  | 28,965 |  | 575,681
Additions | 12,294 |  | 101,372 |  | 4,906 |  | 118,572
Release in favor of the Company | (11,224) |  | (33,070) |  | (240) |  | (44,534)
Release in favor of the counterparty | (907) |  | (91,741) |  | (1,987) |  | (94,635)
Interest | 3,846 |  | 5,774 |  | 583 |  | 10,203
Ending balance | 248,986 |  | 284,074 |  | 32,227 |  | 565,287

| Consolidated
|  |  |  |  |  |  | 09.30.20
| Tax | Labor | Civil, commercial and other | Total
Beginning balance | 244,977 |  | 301,808 |  | 28,965 |  | 575,750
Additions | 12,294 |  | 101,372 |  | 4,906 |  | 118,572
Release in favor of the Company | (11,224) |  | (33,070) |  | (240) |  | (44,534)
Release in favor of the counterparty | (907) |  | (91,741) |  | (1,987) |  | (94,635)
Interest | 3,846 |  | 5,774 |  | 583 |  | 10,203
Exchange rate variation | - |  | 8 |  | - |  | 8
Ending balance | 248,986 |  | 284,151 |  | 32,227 |  | 565,364

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 53

| 12. | INVESTMENTS

The rollforward of the direct investments in subsidiaries and affiliates of the parent company is set forth below:

| Subsidiaries |  | Affiliates |  |  |
| BRF Energia S.A. |  | BRF GmbH |  | Establec. Levino Zaccardi |  | BRF Pet S.A. |  | BRF Austria GmbH |  | PSA Labor. Veter. Ltda |  | Sadia Alimentos S.A. |  | Proud Food Lda |  | Sadia International Ltd. |  | Sadia Uruguay S.A. |  | Eclipse Holding Cooperatief |  | VIP S.A. Empr. e Particip. Imob |  | PP-BIO Adm. Bem próprio S.A. |  | PR-SAD Adm. Bem próprio S.A. |  | Total
|  |  |  |  |  |  |  |  |  |  |  |  |  |  | 09.30.20 |  | 12.31.19
a) Participation as of September 30, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
% of participation | 100.00% |  | 100.00% |  | 99.94% |  | 100.00% |  | 100.00% |  | 99.99% |  | 43.10% |  | 10.00% |  | 100.00% |  | 94.90% |  | 0.01% |  | 100.00% |  | 33.33% |  | 33.33% |  |  |  |
Total quantity of shares and quotas | 7,176,530 |  | 1 |  | 100 |  | 18,741,856 |  | 100 |  | 5,463,850 |  | 594,576,682 |  | 150,000 |  | 900,000 |  | 2,444,753,091 |  | 10,000 |  | 14,249,459 |  | - |  | - |  |  |  |
Quantity of shares and quotas held | 7,176,530 |  | 1 |  | 100 |  | 18,741,856 |  | 100 |  | 5,463,849 |  | 256,253,695 |  | 15,000 |  | 900,000 |  | 2,319,989,778 |  | 1 |  | 14,249,459 |  | - |  | - |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | - |  |  |  |  |  |
b) Information as of September 30, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Share capital | 7,177 |  | 6,523 |  | 1,186 |  | 32,664 |  | 120 |  | 5,564 |  | 338,054 |  | 3 |  | 2,933 |  | 497,012 |  | 334,999 |  | 50 |  | - |  | - |  |  |  |
Shareholders' equity | 729 |  | 12,326,423 |  | (430) |  | 17,445 |  | 150,917 |  | 5,386 |  | 2,308 |  | (326) |  | (14,817) |  | 91,492 |  | (30,452) |  | 2,390 |  | - |  | - |  |  |  |
Income (loss) for the year | (302) |  | 2,701,843 |  | (315) |  | (6,669) |  | 576,091 |  | (178) |  | (2,600) |  | (222) |  | (15,412) |  | (1,136) |  | 989 |  | 34 |  | - |  | - |  |  |  |
c) Movements of investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance (12.31.19) | 1,031 |  | 6,148,777 |  | - |  | 19,083 |  | - |  | 5,564 |  | 4,791 |  | - |  | 235,307 |  | 74,821 |  | - |  | 2,356 |  | 2,353 |  | 4,851 |  | 6,498,934 |  | 4,042,451
Result Movements |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Income (loss) | (302) |  | 6,561,916 |  | (293) |  | (6,638) |  | 576,613 |  | (178) |  | (898) |  | (22) |  | 62,982 |  | (999) |  | - |  | 34 |  | - |  | - |  | 7,192,215 |  | 1,186,569
Dividends and interests on shareholders' equity | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | (303,859) |  | - |  | - |  | - |  | - |  | - |  | (303,859) |  | (8,665)
Capital movements |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Capital increase | - |  | - |  | - |  | 5,000 |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | 180 |  | 639 |  | 5,819 |  | 2,385
Capital transaction between subsidiaries | - |  | - |  | - |  | - |  | - |  | - |  | (3,232) |  | - |  | (218) |  | (4,050) |  | - |  | - |  | - |  | - |  | (7,500) |  | 1,314,596
Acquisition (sale) of equity interest | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | (67,444)
Liquidation of subsidiary | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | 90,834
Goodwill on acquisition of non-controlling interests | - |  | - |  | - |  | - |  | (50,945) |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | (50,945) |  | -
Other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other comprehensive income | - |  | (384,270) |  | (25) |  | - |  | (246,105) |  | - |  | 333 |  | (1) |  | (9,029) |  | 17,037 |  | (1) |  | - |  | - |  | - |  | (622,061) |  | (81,086)
Provision for losses on investments | - |  | - |  | 318 |  | - |  | - |  | - |  | - |  | 23 |  | 14,817 |  | - |  | 1 |  | - |  | - |  | - |  | 15,159 |  | 128,757
Reversal of provision for losses on investments | - |  | - |  | - |  | - |  | (128,646) |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | (128,646) |  | (109,463)
Ending balance (09.30.20) | 729 |  | 12,326,423 |  | - |  | 17,445 |  | 150,917 |  | 5,386 |  | 994 |  | - |  | - |  | 86,809 |  | - |  | 2,390 |  | 2,533 |  | 5,490 |  | 12,599,116 |  | 6,498,934

The Company owns other investments in the amount of R$583 in the parent company and R$10,707 in the consolidated (R$583 at parent company and R$7,676 in the consolidated as of December 31, 2019).

On September 30, 2020, these associates, affiliates and joint ventures do not have any restriction to amortize their loans or advances to the Company.

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 54

| 13. | PROPERTY, PLANT AND EQUIPMENT, NET

The rollforward of property, plant and equipment is set forth below:

| Parent company
| Average rate (1) |  | 12.31.19 |  | Additions |  | Disposals |  |  |  |  |  | Transfers (2) |  | 09.30.20
Cost |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Land |  |  | 546,976 |  | 2,857 |  | (7,292) |  |  |  |  |  | 21,518 |  | 564,059
Buildings, facilities and improvements |  |  | 9,558,475 |  | 98,885 |  | (60,975) |  |  |  |  |  | 118,067 |  | 9,714,452
Machinery and equipment |  |  | 7,669,528 |  | 8,056 |  | (71,225) |  |  |  |  |  | 183,553 |  | 7,789,912
Furniture and fixtures |  |  | 101,855 |  | 333 |  | (1,774) |  |  |  |  |  | 7,800 |  | 108,214
Vehicles |  |  | 121,079 |  | 16,789 |  | (8,076) |  |  |  |  |  | (84) |  | 129,708
Construction in progress |  |  | 335,872 |  | 506,709 |  | - |  |  |  |  |  | (370,868) |  | 471,713
Advances to suppliers |  |  | - |  | 27 |  | - |  |  |  |  |  | 339 |  | 366
|  |  | 18,333,785 |  | 633,656 |  | (149,342) |  |  |  |  |  | (39,675) |  | 18,778,424
Depreciation |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Land (3) | 21.38% |  | (4,258) |  | (5,022) |  | 59 |  |  |  |  |  | (1,799) |  | (11,020)
Buildings, facilities and improvements | 9.40% |  | (3,126,532) |  | (443,457) |  | 46,157 |  |  |  |  |  | (5,305) |  | (3,529,137)
Machinery and equipment | 6.68% |  | (3,790,298) |  | (333,499) |  | 38,077 |  |  |  |  |  | 1,439 |  | (4,084,281)
Furniture and fixtures | 6.67% |  | (54,854) |  | (3,894) |  | 1,494 |  |  |  |  |  | (52) |  | (57,306)
Vehicles | 27.32% |  | (24,541) |  | (26,897) |  | 1,245 |  |  |  |  |  | 84 |  | (50,109)
|  |  | (7,000,483) |  | (812,769) |  | 87,032 |  |  |  |  |  | (5,633) |  | (7,731,853)
|  |  | 11,333,302 |  | (179,113) |  | (62,310) |  |  |  |  |  | (45,308) |  | 11,046,571

| (1) | Weighted average annual rate.

| (2) | Refers to the transfer of R$40,777 for intangible assets, R$4,553 for assets held for sale and R$(22) for biological assets.

| (3) | Land depreciation refers to right-of-use assets. The amount of R$3,137 of depreciation was recognized in the cost of formation of forests and will be realized in the result according to the depletion (note 18.1).

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 55

| Consolidated
| Average rate (1) |  | 12.31.19 |  | Additions |  | Disposals |  | Transfers (2) |  | Exchange rate variation |  | 09.30.20
Cost |  |  |  |  |  |  |  |  |  |  |  |  |
Land |  |  | 603,479 |  | 4,178 |  | (7,862) |  | 20,607 |  | 8,291 |  | 628,693
Buildings, facilities and improvements |  |  | 10,148,798 |  | 151,041 |  | (119,574) |  | 118,953 |  | 218,492 |  | 10,517,710
Machinery and equipment |  |  | 8,177,047 |  | 17,565 |  | (74,291) |  | 197,921 |  | 117,704 |  | 8,435,946
Furniture and fixtures |  |  | 140,439 |  | 333 |  | (1,863) |  | 11,293 |  | 14,332 |  | 164,534
Vehicles |  |  | 213,199 |  | 29,437 |  | (52,435) |  | (607) |  | 35,415 |  | 225,009
Construction in progress |  |  | 348,907 |  | 519,585 |  | - |  | (391,404) |  | 2,278 |  | 479,366
Advances to suppliers |  |  | 528 |  | 7,856 |  | - |  | 2,148 |  | (181) |  | 10,351
|  |  | 19,632,397 |  | 729,995 |  | (256,025) |  | (41,089) |  | 396,331 |  | 20,461,609
Depreciation |  |  |  |  |  |  |  |  |  |  |  |  |
Land (3) | 21.74% |  | (5,086) |  | (5,218) |  | 628 |  | (1,801) |  | (636) |  | (12,113)
Buildings, facilities and improvements | 8.85% |  | (3,263,801) |  | (501,507) |  | 104,719 |  | (11,584) |  | (51,506) |  | (3,723,679)
Machinery and equipment | 6.64% |  | (3,950,250) |  | (368,634) |  | 39,804 |  | 10,492 |  | (48,735) |  | (4,317,323)
Furniture and fixtures | 6.67% |  | (71,779) |  | (8,916) |  | 1,549 |  | (813) |  | (4,043) |  | (84,002)
Vehicles | 26.94% |  | (64,592) |  | (51,167) |  | 39,489 |  | (2,824) |  | (18,173) |  | (97,267)
|  |  | (7,355,508) |  | (935,442) |  | 186,189 |  | (6,530) |  | (123,093) |  | (8,234,384)
|  |  | 12,276,889 |  | (205,447) |  | (69,836) |  | (47,619) |  | 273,238 |  | 12,227,225

| (1) | Weighted average annual rate.

| (2) | Refers to the transfer of R$43,088 for intangible assets, R$4,553 to held for sale and R$(22) for biological assets.

| (3) | Land depreciation refers to right-of-use assets. The amount of R$3,137 of depreciation was recognized in the cost of formation of forests and will be realized in the result according to the depletion (note 18.1).

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 56

The amount of capitalized borrowing costs during the nine-month period ended on September 30, 2020 was of R$13,745 in the parent company and in the consolidated (R$14,772 in the parent company and in the consolidated in the same period of the previous year) and during the three-month period ended on September 30, 2020 was of R$5,357 in the parent company and in the consolidated (R$4,229 in the parent company and in the consolidated in the same period of the previous year).

The weighted average rate used to determine the amount of borrowing costs subject to capitalization was 6.15% p.a. in the parent company and in the consolidated for the nine-month period ended on September 30, 2020 (6.50% p.a. in the parent company and in the consolidated as in the same period of the previous year).

The book value of the property, plant and equipment items that are pledged as collateral for transactions of different natures are set forth below:

|  | Parent company and Consolidated
|  | Type of collateral |  | 09.30.20 |  | 12.31.19
Land |  | Financial/Tax |  | 221,762 |  | 221,727
Buildings, facilities and improvements |  | Financial/Tax |  | 1,485,342 |  | 1,499,808
Machinery and equipment |  | Financial/Labor/Tax/Civil |  | 1,468,561 |  | 1,488,889
Furniture and fixtures |  | Financial/Tax |  | 15,695 |  | 14,090
Vehicles |  | Financial/Tax |  | 294 |  | 369
|  |  |  | 3,191,654 |  | 3,224,883

| 14. | INTANGIBLE ASSETS

The intangible assets rollforward is set forth below:

|  |  | Parent company
| Average rate (1) |  | 12.31.19 |  | Additions |  | Disposals |  | Transfers |  | 09.30.20
Cost |  |  |  |  |  |  |  |  |  |  |
Goodwill |  |  | 1,783,655 |  | - |  | - |  | - |  | 1,783,655
Trademarks |  |  | 1,152,885 |  | - |  | - |  | - |  | 1,152,885
Non-compete agreement |  |  | 71,729 |  | - |  | (379) |  | - |  | 71,350
Outgrowers relationship |  |  | 14,604 |  | - |  | - |  | - |  | 14,604
Patents |  |  | 6,205 |  | - |  | - |  | - |  | 6,205
Software |  |  | 491,682 |  | 72,783 |  | (36,503) |  | 75,350 |  | 603,312
Intangible in progress |  |  | 11,450 |  | 73,337 |  | - |  | (43,115) |  | 41,672
|  |  | 3,532,210 |  | 146,120 |  | (36,882) |  | 32,235 |  | 3,673,683
Amortization |  |  |  |  |  |  |  |  |  |  |
Non-compete agreement | 35.30% |  | (57,690) |  | (9,484) |  | 379 |  | - |  | (66,795)
Outgrowers relationship | 12.86% |  | (12,744) |  | (842) |  | - |  | - |  | (13,586)
Patents | 19.05% |  | (5,524) |  | (355) |  | - |  | - |  | (5,879)
Software | 34.55% |  | (316,720) |  | (116,092) |  | 35,771 |  | 8,542 |  | (388,499)
|  |  | (392,678) |  | (126,773) |  | 36,150 |  | 8,542 |  | (474,759)
|  |  | 3,139,532 |  | 19,347 |  | (732) |  | 40,777 |  | 3,198,924

| (1) | Weighted average annual rate.

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 57

|  |  | Consolidated
| Average rate (1) |  | 12.31.19 |  | Additions |  | Disposals |  | Transfers |  | Exchange rate variation |  | 09.30.20
Cost |  |  |  |  |  |  |  |  |  |  |  |  |
Goodwill |  |  | 2,713,602 |  | - |  | - |  | - |  | 319,682 |  | 3,033,284
Trademarks |  |  | 1,322,262 |  | - |  | - |  | - |  | 12,984 |  | 1,335,246
Non-compete agreement |  |  | 99,229 |  | - |  | (379) |  | - |  | 10,906 |  | 109,756
Outgrowers relationship |  |  | 14,604 |  | - |  | - |  | - |  | - |  | 14,604
Patents |  |  | 6,305 |  | - |  | (106) |  | - |  | 6 |  | 6,205
Customer relationship |  |  | 892,758 |  | - |  | - |  | - |  | 249,661 |  | 1,142,419
Software |  |  | 523,615 |  | 73,411 |  | (36,530) |  | 78,054 |  | 11,531 |  | 650,081
Intangible in progress |  |  | 12,151 |  | 73,739 |  | - |  | (44,405) |  | 220 |  | 41,705
|  |  | 5,584,526 |  | 147,150 |  | (37,015) |  | 33,649 |  | 604,990 |  | 6,333,300
Amortization |  |  |  |  |  |  |  |  |  |  |  |  |
Non-compete agreement | 26.17% |  | (74,190) |  | (14,653) |  | 379 |  | - |  | (7,136) |  | (95,600)
Outgrowers relationship | 12.86% |  | (12,744) |  | (842) |  | - |  | - |  | - |  | (13,586)
Patents | 19.05% |  | (5,626) |  | (355) |  | 106 |  | - |  | (15) |  | (5,890)
Customer relationship | 7.36% |  | (242,263) |  | (59,742) |  | - |  | - |  | (78,849) |  | (380,854)
Software | 34.15% |  | (341,624) |  | (120,057) |  | 35,795 |  | 9,438 |  | (10,152) |  | (426,600)
|  |  | (676,447) |  | (195,649) |  | 36,280 |  | 9,438 |  | (96,152) |  | (922,530)
|  |  | 4,908,079 |  | (48,499) |  | (735) |  | 43,087 |  | 508,838 |  | 5,410,770

| (1) | Weighted average annual rate.

During the nine-month period ended on September 30, 2020, Management did not identify any event that could indicate an impairment of such assets.

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 58

| 15. | LOANS AND BORROWINGS

| Parent company
| Charges (p.a.) |  | Average rate (1) |  | WAMT (2) |  | 12.31.19 |  | Borrowing |  | Amortization |  | Interest paid |  | Interest accrued |  | Exchange rate variation |  | 09.30.20
Local currency |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Working capital | Fixed / CDI |  | 2.78% (6.07% on 12.31.19) |  | 0.8 |  | 3,312,639 |  | 1,200,000 |  | (2,040,795) |  | (131,155) |  | 130,670 |  | - |  | 2,471,359
Certificate of agribusiness receivables (3) | CDI / IPCA |  | 5.67% (6.73% on 12.31.19) |  | 1.8 |  | 1,597,447 |  | - |  | - |  | (23,819) |  | 67,262 |  | - |  | 1,640,890
Development bank credit lines | Fixed / Selic / TJLP |  | (5.09% on 12.31.19) |  | - |  | 45,516 |  | - |  | (45,470) |  | (427) |  | 381 |  | - |  | -
Export credit facility (4) | Fixed / CDI / USD |  | 3.93% |  | 5.9 |  | 1,612,365 |  | 1,490,809 |  | (453,176) |  | (94,555) |  | 119,348 |  | 548,082 |  | 3,222,873
Special program asset restructuring | IGPM |  | (12.22% on 12.31.19) |  | - |  | 284,308 |  | - |  | (287,621) |  | (5,142) |  | 8,455 |  | - |  | -
Debentures | CDI / IPCA |  | 7.28% (7.40% on 12.31.19) |  | 7.9 |  | 755,760 |  | 2,124,725 |  | - |  | (20,579) |  | 73,791 |  | - |  | 2,933,697
Fiscal incentives | Fixed |  | 2.40% (2.40% on 12.31.19) |  | - |  | 5,720 |  | 53,148 |  | (34,609) |  | (511) |  | 563 |  | - |  | 24,311
|  |  |  |  |  |  | 7,613,755 |  | 4,868,682 |  | (2,861,671) |  | (276,188) |  | 400,470 |  | 548,082 |  | 10,293,130
Foreign currency |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Bonds | Fixed / USD / EUR |  | 4.79% (4.36% on 12.31.19) |  | 11.7 |  | 8,407,975 |  | 2,644,055 |  | (2,995,561) |  | (562,605) |  | 583,400 |  | 3,436,912 |  | 11,514,176
Export credit facility | Fixed / LIBOR / USD |  | 4.13% (5.77% on 12.31.19) |  | 2.5 |  | 407,274 |  | - |  | (118,113) |  | (12,782) |  | 14,627 |  | 140,240 |  | 431,246
Advances for foreign exchange rate contracts | Fixed / USD |  | 3.88% |  | 0.5 |  | - |  | 529,211 |  | - |  | - |  | 9,641 |  | 34,650 |  | 573,502
|  |  |  |  |  |  | 8,815,249 |  | 3,173,266 |  | (3,113,674) |  | (575,387) |  | 607,668 |  | 3,611,802 |  | 12,518,924
|  |  |  |  |  |  | 16,429,004 |  | 8,041,948 |  | (5,975,345) |  | (851,575) |  | 1,008,138 |  | 4,159,884 |  | 22,812,054
Current |  |  |  |  |  |  | 3,033,034 |  |  |  |  |  |  |  |  |  |  |  | 4,276,437
Non-current |  |  |  |  |  |  | 13,395,970 |  |  |  |  |  |  |  |  |  |  |  | 18,535,617

| (1) | Weighted average annual rate.

| (2) | Weighted average maturity in years.

| (3) | The Certificates of Agribusiness Receivables (“CRA”) issued by the Company are backed by receivables of BRF S.A. from certain subsidiaries abroad.

| (4) | The Export Credit Facility was issued in Reais simultaneously and in connection with a foreign exchange rate swap, resulting essentially in a net cash flow in U.S. Dollars. As the transactions are inseparable, both are recorded together under Loans and Borrowings by their amortized cost.

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 59

| Consolidated
| Charges (p.a.) |  | Average rate (1) |  | WAMT (2) |  | 12.31.19 |  | Borrowing |  | Amortization |  | Interest paid |  | Interest accrued |  | Exchange rate variation |  | 09.30.20
Local currency |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Working capital | Fixed / CDI |  | 2.78% (6.07% on 12.31.19) |  | 0.8 |  | 3,312,639 |  | 1,200,000 |  | (2,040,795) |  | (131,155) |  | 130,670 |  | - |  | 2,471,359
Certificate of agribusiness receivables (3) | CDI / IPCA |  | 5.67% (6.73% on 12.31.19) |  | 1.8 |  | 1,597,447 |  | - |  | - |  | (23,819) |  | 67,262 |  | - |  | 1,640,890
Development bank credit lines | Fixed / Selic / TJLP |  | (5.09% on 12.31.19) |  | - |  | 45,516 |  | - |  | (45,470) |  | (427) |  | 381 |  | - |  | -
Debentures | CDI / IPCA |  | 7.28% (7.40% on 12.31.19) |  | 7.9 |  | 755,760 |  | 2,124,725 |  | - |  | (20,579) |  | 73,791 |  | - |  | 2,933,697
Export credit facility (4) | Fixed / CDI / USD |  | 3.93% |  | 5.9 |  | 1,612,365 |  | 1,490,809 |  | (453,176) |  | (94,555) |  | 119,348 |  | 548,082 |  | 3,222,873
Special program asset restructuring | IGPM |  | (12.22% on 12.31.19) |  | - |  | 284,308 |  | - |  | (287,621) |  | (5,142) |  | 8,455 |  | - |  | -
Fiscal incentives | Fixed |  | 2.40% (2.40% on 12.31.19) |  | - |  | 5,720 |  | 53,148 |  | (34,609) |  | (511) |  | 563 |  | - |  | 24,311
|  |  |  |  |  |  | 7,613,755 |  | 4,868,682 |  | (2,861,671) |  | (276,188) |  | 400,470 |  | 548,082 |  | 10,293,130
Foreign currency |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Bonds | Fixed / USD / EUR |  | 4.71% (4.36% on 12.31.19) |  | 10.6 |  | 10,407,484 |  | 2,644,055 |  | (2,999,648) |  | (680,633) |  | 654,812 |  | 4,255,198 |  | 14,281,268
Export credit facility | Fixed / LIBOR / USD |  | 4.13% (5.77% on 12.31.19) |  | 2.5 |  | 407,275 |  | - |  | (118,113) |  | (12,782) |  | 14,626 |  | 140,240 |  | 431,246
Advances for foreign exchange rate contracts | Fixed / USD |  | 3.88% |  | 0.5 |  | - |  | 529,211 |  | - |  | - |  | 9,641 |  | 34,650 |  | 573,502
Working capital | Fixed / TRY |  | 9.65% (16.56% on 12.31.19) |  | 1.4 |  | 191,765 |  | 624,456 |  | (381,502) |  | (32,543) |  | 33,314 |  | (207) |  | 435,283
|  |  |  |  |  |  | 11,006,524 |  | 3,797,722 |  | (3,499,263) |  | (725,958) |  | 712,393 |  | 4,429,881 |  | 15,721,299
|  |  |  |  |  |  | 18,620,279 |  | 8,666,404 |  | (6,360,934) |  | (1,002,146) |  | 1,112,863 |  | 4,977,963 |  | 26,014,429
Current |  |  |  |  |  |  | 3,132,029 |  |  |  |  |  |  |  |  |  |  |  | 4,398,427
Non-current |  |  |  |  |  |  | 15,488,250 |  |  |  |  |  |  |  |  |  |  |  | 21,616,002

| (1) | Weighted average annual rate.

| (2) | Weighted average maturity in years

| (3) | The Certificate of Agribusiness Receivable (“CRA”) issued by the Company are backed by receivables of BRF S.A. from certain subsidiaries abroad.

| (4) | The Export Credit Facility was issued in Reais simultaneously and in connection with a foreign exchange rate swap, resulting essentially in a net cash flow in U.S. Dollars. As the transactions are inseparable, both are recorded together under Loans and Borrowings by their amortized cost.

As of December 31, 2019 and September 30, 2020, the Company did not have any financial covenant clauses related to its loans and borrowings agreements.

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 60

| 15.1 | Revolving credit facility

With the purpose of maintaining a prudential and sustainable short-term liquidity position, continuing with the strategy of extending its average debt maturity and reducing the cost of debt, on December 27, 2019, the Company retained from Banco do Brasil a revolving credit facility up to the limit of R$1,500,000 for a period of three years. The referenced credit facility can be withdrawn totally or partially, at the Company’s will, whenever necessary. As of September 30, 2020, the facility was available, but unused.

On October 28, 2020, the Company retained an additional revolving credit facility as described in note 33.2.

| 15.2 | Issuance of Debentures

On July 17, 2020, 2,200,000 (two million, two hundred thousand) Debentures were subscribed with a notional value of R$ 1,000.00 (one thousand Brazilian Reais), in a total amount of R$2,200,000 (two billion and two hundred million Brazilian Reais), in two series as shown in the table below. The Debentures are simple, not convertible into shares, unsecured and for private placement. The Debentures were privately placed with VERT Companhia Securitizadora, to back its forty-sixth issuance of Agribusiness Receivables Certificates, in two series, which were object of public distribution with restricted placement efforts.

Parent company and Consolidated
09.30.20
Operation |  | Series |  | Issue date |  | Maturity |  | Rate |  | Notional |  | Updated Value
Debenture - 2nd Issue |  | 1st Series |  | 07.14.20 |  | 07.14.27 |  | IPCA + 5.30% p.a. |  | 705,000 |  | 696,561
Debenture - 2nd Issue |  | 2nd Series |  | 07.14.20 |  | 07.12.30 |  | IPCA + 5.60% p.a. |  | 1,495,000 |  | 1,467,390
|  |  |  |  |  |  |  |  |  | 2,200,000 |  | 2,163,951

The issuance costs of R$75,275 will be recognized on the statement of income over the term of the debt according to the effective interest rate method.

| 15.3 | Issuance of Senior Unsecured Notes

On September 21, 2020 BRF S.A. made an international offering of senior notes in the aggregate amount equivalent to R$2,722,000 (USD500,000), at 98.247% of the principal amount, with due date on September 21, 2050 and interest rate of 5.750% per year which is payable semi-annually. The Company incurred in issuance expenses of R$29,954 related to commissions and other costs, which, together with the R$47,717 of the issuance discount, will be recognized on the statement of income over the term of the notes according to the effective interest rate method.

The proceeds were substantially used for the settlement and renegotiation of other shorter-term loans, as described in the following item.

On October 26, 2020 there was an additional issuance, under the same indenture, as detailed in note 33.1.

| 15.4 | Tender Offer for Senior Notes

The Company executed two tender offers between July 17 and July 24, 2020 and between September 21 and October 9, 2020 for the following senior notes: (i) (a) 5.875% Senior Notes due 2022, (b) 2.750% Senior Notes due 2022, (c) 3.950% Senior Notes due 2023 and (d) 4.750% Senior Notes due 2024 all issued by BRF; and (ii) 4.350% Senior Notes due 2026, issued by BRF GmbH and guaranteed by BRF. The repurchases reached the cap and were fully settled by September 28, 2020 and its results are shown in the table below:

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 61

Instrument |  | Currency |  | Maturity |  | Notional repurchased |  | Outstanding notional (1)
|  |  | (loan currency) |  | (Reais) (2) |  | (loan currency) |  | (Reais) (3)
BRF S.A. - BRFSBZ 2 3/4 |  | EUR |  | June 3, 2022 |  | 158,109 |  | 977,194 |  | 372,392 |  | 2,462,703
BRF S.A. - BRFSBZ 5 7/8 (4) |  | USD |  | June 6, 2022 |  | 38,384 |  | 203,452 |  | 153,050 |  | 863,309
BRF S.A. - BRFSBZ 3.95 |  | USD |  | May 22, 2023 |  | 111,956 |  | 600,585 |  | 519,455 |  | 2,930,090
BRF S.A. - BRFSBZ 4 3/4 |  | USD |  | May 22, 2024 |  | 222,495 |  | 1,214,329 |  | 749,077 |  | 4,225,319
BRF GmbH - BRFSBZ 4.35 |  | USD |  | Sep 29, 2026 |  | 718 |  | 3,932 |  | 499,282 |  | 2,816,300

| (1) | Outstanding notional after the tender offer.

| (2) | Represented by the amount in the original loan currency, translated by the foreign exchange rate at the settlement date of the repurchase.

| (3) | Represented by the amount in the original loan currency, translated by the foreign exchange rate at the settlement date 09.30.20.

| (4) | Loan fully designated as hedge accounting (note 24.4.2.ii). The exchange rate variation between the designation date and the settlement date of the repurchased portion will remain in Other Comprehensive Income until the realization of highly probable sales (hedge object).

The Company paid the amount equivalent to R$3,160,274 for the repurchase of these liabilities, which includes notional, interest, premium and taxes. The Company incurred in financial expenses with the repurchases in the amount of R$112,206 with the premium paid, R$19,675 with taxes and R$16,900 with the write-off of the costs of issuance.

| 15.5 | Prepayment of Credit Facilities

Additionally to the tender offer described above, in July and August 2020, the Company prepaid certain bilateral credit facilities in Brazil with original maturity between September 2020 and August 2021, in the aggregated notional and interest amount of R$1,593,176, being R$964,484 related to the facilities described in note 1.4.

On October 28, 2020 the Company prepaid other loans, as described in note 33.3.

The transactions described in the items above, are adherent to the Company’s capital structure management strategy, which includes, among other aspects, the sustaining of liquidity, the lengthening of the average tenor of its indebtedness and the diversification of its sources of financing.

| 15.6 | Loans and borrowings maturity schedule

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

| Parent company |  | Consolidated
| 09.30.20 |  | 09.30.20
Current | 4,276,437 |  | 4,398,427
Non-current | 18,535,617 |  | 21,616,002
October to december 2021 | 390,413 |  | 432,113
2022 | 2,269,669 |  | 2,491,172
2023 | 2,606,047 |  | 2,629,701
2024 | 2,002,549 |  | 2,002,549
2025 onwards | 11,266,939 |  | 14,060,467
| 22,812,054 |  | 26,014,429

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 62

| 15.7 | Guarantees

| Parent company |  | Consolidated
| 09.30.20 |  | 12.31.19 |  | 09.30.20 |  | 12.31.19
Total of loans and financing | 22,812,054 |  | 16,429,004 |  | 26,014,429 |  | 18,620,279
Mortgage guarantees | 24,311 |  | 51,237 |  | 24,311 |  | 51,237
Related to FINEM-BNDES | - |  | 45,516 |  | - |  | 45,516
Related to tax incentives and other | 24,311 |  | 5,721 |  | 24,311 |  | 5,721

On September 30, 2020, the amount of bank guarantees contracted by the Company was of R$599,227 (R$666,335 as of December 31, 2019) which were offered mainly in litigations involving the Company’s use of tax credits. These guarantees have an average cost of 1.87% p.a. (1.77% p.a. as of December 31, 2019).

| 16. | TRADE ACCOUNTS PAYABLE

| Parent company |  | Consolidated
| 09.30.20 |  | 12.31.19 |  | 09.30.20 |  | 12.31.19
Domestic suppliers |  |  |  |  |  |  |
Third parties | 6,745,477 |  | 4,921,902 |  | 6,759,352 |  | 4,930,424
Related parties | 12,087 |  | 6,392 |  | - |  | -
| 6,757,564 |  | 4,928,294 |  | 6,759,352 |  | 4,930,424
Foreign suppliers |  |  |  |  |  |  |
Third parties | 617,135 |  | 404,068 |  | 1,425,673 |  | 915,611
| 617,135 |  | 404,068 |  | 1,425,673 |  | 915,611
(-) Adjustment to present value | (79,945) |  | (49,253) |  | (79,964) |  | (49,269)
| 7,294,754 |  | 5,283,109 |  | 8,105,061 |  | 5,796,766
Current | 7,288,352 |  | 5,270,762 |  | 8,098,659 |  | 5,784,419
Non-current | 6,402 |  | 12,347 |  | 6,402 |  | 12,347

On the trade accounts payable balance as of September 30, 2020, R$2,325,695 in the parent company and R$2,344,922 in the consolidated (R$1,434,152 in the parent company and R$1,435,025 in the consolidated as of December 31, 2019) correspond to supply chain finance transactions in which there were no changes in the payment terms and prices negotiated with the suppliers.

| 17. | SUPPLY CHAIN FINANCE

Parent company and Consolidated
|  | 09.30.20 |  | 12.31.19
Supply chain finance - Domestic suppliers |  | 930,957 |  | 671,869
Supply chain finance - Foreign suppliers |  | 205,389 |  | 182,126
|  | 1,136,346 |  | 853,995
(-) Adjustment to present value |  | (14,974) |  | (11,958)
|  | 1,121,372 |  | 842,037

The Company has agreements with several financial institutions that allow the suppliers to anticipate their receivables. The suppliers may choose whether to participate and if so, with which institution. The anticipation allows the suppliers to better manage their cash flow needs. This flexibility allows the Company to intensify its commercial relations with

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 63

the network of suppliers by potentially leveraging benefits such as preference for supply in case of restricted supply, better price conditions and/or more flexible payment terms, among others, without identifiable changes in other commercial conditions. These operations are presented in the cash flows of operating activities.

On September 30, 2020, the discount rates applied to the supply chain finance transactions agreed between our suppliers and the financial institutions in the domestic market were set between 0.39% and 0.58% p.m. (0.38% to 0.67% p.m. on December 31, 2019).

On September 30, 2020, 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 0.20% and 0.38% p.m. (0.32% to 0.46% p.m. on December 31, 2019).

| 18. | LEASES

The Company is lessee in several lease agreements for forest lands, offices, distribution centers, outgrowers, vehicles, among others. Some contracts have a renewal option for an additional period at the end of the agreement, established by contractual amendments. Automatic renewals or renewals for undetermined periods are not allowed.

The contract clauses mentioned, with respect to renewal, readjustment and purchase option, are contracted 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.

| 18.1 | Right-of-use assets

The right-of-use assets as set forth below are part of the balances of property, plant and equipment and intangible assets (notes 13 and 14).

| Parent company
| Average rate (1) |  | 12.31.19 |  | Additions |  | Disposals |  | Transfers |  | 09.30.20
Cost |  |  |  |  |  |  |  |  |  |  |
Land |  |  | 20,499 |  | 1,329 |  | (203) |  | 20,751 |  | 42,376
Buildings |  |  | 2,446,641 |  | 98,845 |  | (27,384) |  | (2,487) |  | 2,515,615
Machinery and equipment |  |  | 114,571 |  | 4,588 |  | (7,834) |  | - |  | 111,325
Vehicles |  |  | 112,917 |  | 16,789 |  | (8,034) |  | - |  | 121,672
Software |  |  | 55,705 |  | 72,766 |  | (35,624) |  | (18,264) |  | 74,583
|  |  | 2,750,333 |  | 194,317 |  | (79,079) |  | - |  | 2,865,571
Depreciation |  |  |  |  |  |  |  |  |  |  |
Land | 16.38% |  | (4,258) |  | (4,767) |  | 59 |  | (1,799) |  | (10,765)
Buildings | 28.44% |  | (459,122) |  | (288,696) |  | 25,869 |  | (6,765) |  | (728,714)
Machinery and equipment | 42.61% |  | (96,684) |  | (15,931) |  | 7,169 |  | - |  | (105,446)
Vehicles | 28.18% |  | (18,550) |  | (26,532) |  | 1,204 |  | - |  | (43,878)
Software | 45.21% |  | (44,815) |  | (24,533) |  | 35,624 |  | 8,564 |  | (25,160)
|  |  | (623,429) |  | (360,459) |  | 69,925 |  | - |  | (913,963)
|  |  | 2,126,904 |  | (166,142) |  | (9,154) |  | - |  | 1,951,608

| (1) | Weighted average annual rate.

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 64

| Consolidated
| Average rate (1) |  | 12.31.19 |  | Additions |  | Disposals | Transfers |  |  | Exchange rate variation |  | 09.30.20
Cost |  |  |  |  |  |  |  |  |  |  |  |  |
Land |  |  | 22,790 |  | 2,496 |  | (774) | 20,751 |  |  | 313 |  | 45,576
Buildings |  |  | 2,615,883 |  | 150,733 |  | (85,931) | (2,487) |  |  | 65,420 |  | 2,743,618
Machinery and equipment |  |  | 115,173 |  | 4,588 |  | (8,229) | - |  |  | 225 |  | 111,757
Vehicles |  |  | 207,443 |  | 29,422 |  | (52,393) | - |  |  | 33,548 |  | 218,020
Software |  |  | 55,705 |  | 72,766 |  | (35,624) | (18,264) |  |  | - |  | 74,583
|  |  | 3,016,994 |  | 260,005 |  | (182,951) | - |  |  | 99,506 |  | 3,193,554
Depreciation |  |  |  |  |  |  |  |  |  |  |  |  |
Land | 16.74% |  | (5,086) |  | (4,966) |  | 629 | (1,799) |  |  | (636) |  | (11,858)
Buildings | 28.23% |  | (512,836) |  | (332,538) |  | 84,416 | (6,765) |  |  | (21,594) |  | (789,317)
Machinery and equipment | 42.55% |  | (96,958) |  | (16,132) |  | 7,550 | - |  |  | (121) |  | (105,661)
Vehicles | 28.32% |  | (57,357) |  | (50,532) |  | 39,449 | - |  |  | (16,418) |  | (84,858)
Software | 45.21% |  | (44,815) |  | (24,533) |  | 35,624 | 8,564 |  |  | - |  | (25,160)
|  |  | (717,052) |  | (428,701) |  | 167,668 | - |  |  | (38,769) |  | (1,016,854)
|  |  | 2,299,942 |  | (168,696) |  | (15,283) | - |  |  | 60,737 |  | 2,176,700

| (1) | Weighted average annual rate.

| 18.2 | Lease liabilities

| Parent company
| WAM (1) |  | 12.31.19 |  | Additions |  | Payments |  | Interest paid |  | Interest accrued |  | Disposals |  | Transfers |  | 09.30.20
Land | 6.3 |  | 18,707 |  | 1,412 |  | (4,455) |  | (3,076) |  | 3,076 |  | (1,729) |  | 19,502 |  | 33,437
Buildings | 7.2 |  | 2,106,997 |  | 107,277 |  | (264,677) |  | (62,623) |  | 117,341 |  | (761) |  | (18,929) |  | 1,984,625
Machinery and equipment | 1.9 |  | 25,349 |  | 4,588 |  | (23,047) |  | (11,160) |  | 11,160 |  | (740) |  | 8 |  | 6,158
Vehicles | 2.1 |  | 100,362 |  | 16,789 |  | (24,025) |  | (7,145) |  | 7,145 |  | (7,362) |  | (581) |  | 85,183
Software | 1.8 |  | 1,137 |  | 72,767 |  | (22,994) |  | (3,166) |  | 3,166 |  | - |  | - |  | 50,910
|  |  | 2,252,552 |  | 202,833 |  | (339,198) |  | (87,170) |  | 141,888 |  | (10,592) |  | - |  | 2,160,313
Current |  |  | 313,058 |  |  |  |  |  |  |  |  |  |  |  |  |  | 252,672
Non-current |  |  | 1,939,494 |  |  |  |  |  |  |  |  |  |  |  |  |  | 1,907,641

| (1) | Weighted average maturity in years.

| Consolidated
| WAM (1) |  | 12.31.19 |  | Additions |  | Payments |  | Interest paid |  | Interest accrued |  | Disposals |  | Transfers |  | Exchange rate variation |  | 09.30.20
Land | 4.7 |  | 20,355 |  | 2,579 |  | (4,908) |  | (3,504) |  | 3,504 |  | (1,729) |  | 18,811 |  | 439 |  | 35,547
Buildings | 4.3 |  | 2,227,026 |  | 159,165 |  | (305,878) |  | (71,454) |  | 125,963 |  | (762) |  | (18,238) |  | 45,264 |  | 2,161,086
Machinery and equipment | 1.3 |  | 25,687 |  | 4,588 |  | (23,250) |  | (11,174) |  | 11,174 |  | (755) |  | 8 |  | 108 |  | 6,386
Vehicles | 1.7 |  | 156,975 |  | 29,422 |  | (45,229) |  | (10,677) |  | 10,677 |  | (13,834) |  | (581) |  | 17,961 |  | 144,714
Software | 1.8 |  | 1,137 |  | 72,767 |  | (22,994) |  | (3,166) |  | 3,166 |  | - |  | - |  | - |  | 50,910
|  |  | 2,431,180 |  | 268,521 |  | (402,259) |  | (99,975) |  | 154,484 |  | (17,080) |  | - |  | 63,772 |  | 2,398,643
Current |  |  | 376,628 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 326,143
Non-current |  |  | 2,054,552 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 2,072,500

| (1) | Weighted average maturity in years.

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 65

| 18.3 | Lease liabilities maturity schedule

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

| Parent company |  | Consolidated
| 09.30.20 |  | 09.30.20
Current | 252,672 |  | 326,143
Non-current | 1,907,641 |  | 2,072,500
October to december 2021 | 113,312 |  | 128,075
2022 | 374,974 |  | 422,346
2023 | 301,296 |  | 340,910
2024 | 254,518 |  | 261,163
2025 onwards | 863,541 |  | 920,006
| 2,160,313 |  | 2,398,643

| 18.4 | Incremental borrowing rate

The Company uses nominal incremental borrowing rates to measure its lease liabilities. The nominal and real interest rates are presented below:

|  | 09.30.20 |  | 12.31.19
Contract Terms |  | Nominal rate% p.a. |  | Actual rate% p.a. |  | Nominal rate% p.a. |  | Actual rate% p.a.
1 year |  | 5.69% |  | 1.05% |  | 8.46% |  | 4.97%
2 years |  | 5.96% |  | 2.61% |  | 9.49% |  | 5.37%
3 years |  | 6.75% |  | 2.52% |  | 10.60% |  | 6.28%
4 years |  | 8.50% |  | 4.56% |  | 11.43% |  | 7.01%
5 years |  | - |  | - |  | 11.84% |  | 7.28%
6 years |  | - |  | - |  | 12.13% |  | 7.48%
8 years |  | 10.70% |  | 6.46% |  | 12.43% |  | 7.67%
9 years |  | - |  | - |  | 12.51% |  | 7.78%
10 years |  | - |  | - |  | 12.61% |  | 7.84%
11 years |  | - |  | - |  | 12.68% |  | 7.86%
13 years |  | 11.63% |  | 7.63% |  | 12.81% |  | 7.93%
14 years |  | - |  | - |  | 12.86% |  | 7.96%
15 years |  | - |  | - |  | 12.90% |  | 7.97%
18 years |  | - |  | - |  | 13.01% |  | 8.03%
20 years |  | 13.26% |  | 9.00% |  | 13.12% |  | 8.12%

The rates presented above as of September 30, 2020 refer to the incremental borrowing rates used in contracts recognized during the nine-month period ended on September 30, 2020 and the rates as of December 31, 2019 refer to the rates used in contracts recognized in 2019.

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 66

| 18.5 | Amounts recognized in the statement of income

The amounts directly recognized in the statement of income presented below relate to items exempt of recognition: low-value assets, short-term leases and leases with variable payments.

|  | Parent Company |  | Consolidated
|  | 2020 |  | 2019 |  | 2020 |  | 2019
|  | Jul - Sep |  | Jan - Sep |  | Jul - Sep |  | Jan - Sep |  | Jul - Sep |  | Jan - Sep |  | Jul - Sep |  | Jan - Sep
Variable payments not included in the lease liabilities |  | 11,653 |  | 33,804 |  | 10,977 |  | 19,818 |  | 66,198 |  | 227,928 |  | 59,963 |  | 158,350
Expenses related to short-term assets |  | 11,971 |  | 40,510 |  | 45,242 |  | 137,341 |  | 44,399 |  | 128,648 |  | 50,482 |  | 176,114
Expenses related to low-value assets |  | 882 |  | 2,146 |  | 548 |  | 3,764 |  | 950 |  | 2,657 |  | 710 |  | 4,259
|  | 24,506 |  | 76,460 |  | 56,767 |  | 160,923 |  | 111,547 |  | 359,233 |  | 111,155 |  | 338,723

| 18.6 | Sale-and-leaseback transactions

During the nine-month period ended on September 30, 2020 three sale-and-leaseback transactions of grain warehouses were concluded. These warehouses are located in: (i) Campo Erê – Santa Catarina, (ii) Pato Branco, and (iii) Medianeira, both in the state of Paraná; which were analyzed according to the CPC 06 / IFRS 16 premises. The right-of-use assets and lease liabilities of each contract were recognized and are presented in the additions of the Buildings class, with the following amounts: (i) Campo Erê: Assets R$1,751 and Liabilities R$3,835, (ii) Pato Branco: Assets R$3,551 and Liabilities R$6,683, and (iii) Medianeira: Assets R$3,312 and Liabilities R$6,611.

| 19. | SHARE-BASED PAYMENT

The rules for the stock options and restricted shares plans granted to executives were disclosed in the financial statements for the year ended on December 31, 2019 (note 20). On April 27, 2020, the general shareholder’s meeting approved changes to the plans, increasing the limit of grants from 0.5% to 2.5% of the common, registered, book-entry shares with no par value, representative of the Company’s total capital stock.

The breakdown of the outstanding granted stock options is set forth as follows:

Date |  | Quantity |  | Grant (1) |  | Strike price (1)
Grant date |  | Beggining of exercise |  | End of the exercise |  | Options granted |  | Outstanding options |  | Fair value of the option |  | Granting date |  | Updated IPCA
04.26.16 |  | 04.30.17 |  | 04.30.21 |  | 8,724,733 |  | 1,275,000 |  | 9.21 |  | 56.00 |  | 66.90
05.31.16 |  | 05.31.17 |  | 05.31.21 |  | 3,351,220 |  | 1,145,330 |  | 10.97 |  | 46.68 |  | 55.35
|  |  |  |  |  | 12,075,953 |  | 2,420,330 |  |  |  |  |  |

| (1) | Amounts expressed in Brazilian Reais.

The breakdown of the outstanding granted restricted shares is set forth as follows:

Date |  | Quantity |  | Grant (1)
Grant |  | Vesting date |  | Shares granted |  | Outstanding shares |  | Fair value of the shares
10.01.18 |  | 10.01.21 |  | 2,311,394 |  | 901,178 |  | 21.44
07.01.19 |  | 07.01.22 |  | 1,815,649 |  | 1,129,138 |  | 30.61
09.16.19 |  | 10.01.22 |  | 68,605 |  | 45,736 |  | 30.61
06.01.20 |  | 06.01.23 |  | 3,571,736 |  | 3,552,107 |  | 21.28
|  |  |  | 7,767,384 |  | 5,628,159 |  |

| (1) | Amounts expressed in Brazilian Reais.

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 67

The rollforward of the granted options and shares for the nine-month period ended on September 30, 2020, is presented as follows:

|  | Consolidated
Outstanding options/shares as of December 31, 2019 |  | 4,722,734
Granted |  |
Restricted shares - June 2020 |  | 1,315,566
Restricted shares - April 2020 |  | 359,293
Exercised / Delivered: |  |
Restricted Shares – grant of April, 2020 |  | (260,487)
Restricted Shares – grant of September, 2019 |  | (16,580)
Restricted Shares – grant of June, 2019 |  | (140,945)
Restricted Shares – grant of October, 2018 |  | (267,475)
Restricted Shares – grant of June, 2018 |  | (97,875)
Forfeiture: |  |
Restricted shares - Grant of 2020 |  | (98,806)
Restricted shares - Grant of 2019 |  | (90,113)
Restricted shares - Grant of 2018 |  | (219,805)
Stock options - Grant of 2016 |  | (73,170)
Outstanding options/shares as of September 30, 2020 |  | 5,132,337

The weighted average exercise price of the outstanding options conditioned to services is R$61.43 (sixty-one Brazilian Reais and forty-three cents) (R$60.96 as of December 31, 2019), and the weighted average remaining vesting term is 8 months (17 months as of December 31, 2019).

The Company has registered under shareholders’ equity, the fair value of share-based compensation plans in the amount of R$254,171 (R$255,445 as of December 31, 2019) and in the amount of R$23,347 in the non-current liabilities (R$11,761 as of December 31, 2019). In the statement of income for the nine-month period ended on September 30, 2020 the amount recognized as expense was R$43,263 (R$33,172 in the same period of the previous year), and during the three-month period ended on September 30, 2020 the amount recognized as expense was R$21,239 (R$13,790 in the same period of the previous year).

| 20. | EMPLOYEES BENEFITS 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 on December 31, 2019 (note 21) and have not been changed during the following periods. The actuarial liabilities are presented below:

| Parent company |  | Consolidated
| Liabilities |  | Liabilities
| 09.30.20 |  | 12.31.19 |  | 09.30.20 |  | 12.31.19
Medical assistance | 197,464 |  | 187,274 |  | 197,464 |  | 187,274
F.G.T.S. Penalty (1) | 267,518 |  | 247,485 |  | 267,518 |  | 247,485
Award for length of service | 112,296 |  | 103,284 |  | 112,296 |  | 103,284
Other | 60,921 |  | 56,744 |  | 195,943 |  | 151,431
| 638,199 |  | 594,787 |  | 773,221 |  | 689,474
Current | 87,996 |  | 87,996 |  | 97,596 |  | 95,919
Non-current | 550,203 |  | 506,791 |  | 675,625 |  | 593,555

| (1) | FGTS – Government Severance Indemnity Fund for Employees

The Company estimated costs for pension and post-employment plans for the year of 2020, according to an appraisal report prepared in 2019 by an actuarial expert and recorded in the statement of income for the nine-month period

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 68

ended on September 30, 2020 against other comprehensive income a gain of R$20,229 in the parent company and R$20,134 in consolidated (R$10,116 in the parent company and R$9,778 in the same period of the previous year) and for the three-month period ended on September 30, 2020 a gain of R$7,194 in the parent company and R$7,170 in consolidated (R$4,805 in the parent company and R$4,822 in consolidated in the same period of the previous year).

| 21. | PROVISION FOR TAX, CIVIL, LABOR AND OTHER RISKS

The Company and its subsidiaries are involved in certain legal matters arising in the normal course of business, which include civil, tax, social security, labor, commercial and other processes.

Company’s Management believes that, based on the elements existing at the base date of the interim financial information, the provision for tax, civil, labor, commercial and other risks, is sufficient to cover eventual losses with administrative and legal proceedings, as set forth below.

| 21.1 | Contingencies with probable losses

The rollforward of the provisions for tax, labor, civil, commercial and other risks classified as with probable loss, and contingent liabilities is presented below:

| Parent company
|  |  |  |  |  |  |  |  | 09.30.20
| Tax |  | Labor |  | Civil, commercial and other | Contingent liabilities (Business combination) | Total
Beginning balance | 583,316 |  | 600,510 |  | 306,476 |  | 300,561 |  | 1,790,863
Additions | 70,861 |  | 251,098 |  | 44,624 |  | - |  | 366,583
Reversals | (61,248) |  | (95,204) |  | (23,369) |  | (1,388) |  | (181,209)
Payments | (70,906) |  | (213,678) |  | (25,490) |  | - |  | (310,074)
Interest | 44,747 |  | 65,913 |  | 33,505 |  | - |  | 144,165
Ending balance | 566,770 |  | 608,639 |  | 335,746 |  | 299,173 |  | 1,810,328
Current |  |  |  |  |  |  |  |  | 1,067,456
Non-current |  |  |  |  |  |  |  |  | 742,872

| Consolidated
|  |  |  |  |  |  |  |  | 09.30.20
| Tax | Labor | Civil, commercial and other | Contingent liabilities (Business combination) | Total
Beginning balance | 583,464 |  | 603,074 |  | 307,177 |  | 300,654 |  | 1,794,369
Additions | 70,861 |  | 252,071 |  | 44,726 |  | - |  | 367,658
Reversals | (61,248) |  | (95,216) |  | (23,370) |  | (1,388) |  | (181,222)
Payments | (70,906) |  | (213,678) |  | (25,490) |  | - |  | (310,074)
Interest | 44,747 |  | 65,912 |  | 33,505 |  | - |  | 144,164
Exchange rate variation | 15 |  | 192 |  | 55 |  | 9 |  | 271
Ending balance | 566,933 |  | 612,355 |  | 336,603 |  | 299,275 |  | 1,815,166
Current |  |  |  |  |  |  |  |  | 1,071,964
Non-current |  |  |  |  |  |  |  |  | 743,202

| 21.2 | Contingencies with possible losses

The Company is involved in contingencies for which losses are possible, in accordance with the assessment prepared by Management with support from legal advisors. Such contingencies have the same characteristics of those

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 69

disclosed in the 2019 financial statements and on September 30, 2020 had balances of R$11,991,289 (R$11,811,690 on December 31, 2019) for tax risks, R$1,495,741 (R$1,403,461 on December 31, 2019) for civil risks and R$198,410 (R$84,039 on December 31, 2019) for labor risks, for which only those resulting from the business combination with Sadia have a provision, recorded at the fair value estimated on the date of the business combination, in the amount of R$299,275 (R$300,654 as of December 31, 2019).

| 22. | EQUITY

| 22.1 | Capital Stock

On September 30, 2020, the subscribed and paid capital of the Company was R$12,553,418, which is composed of 812,473,246 common book-entry shares with no par value. The value of the capital stock is net of the public offering expenses of R$92,947, made on July 22, 2009.

The Company is authorized to increase the capital stock, irrespective of amendment to the bylaws, up to the limit of 1,000,000,000 (one billion) common book-entry shares with no par value.

| 22.1.1. | Breakdown of capital stock by nature

Parent company
| 09.30.20 |  | 12.31.19
Common shares | 812,473,246 |  | 812,473,246
Treasury shares | (4,766,084) |  | (713,446)
Outstanding shares | 807,707,162 |  | 811,759,800

| 22.1.2. | Rollforward of outstanding shares

Parent company
Quantity of outstanding of shares
|  | 09.30.20
Shares at the beginning of the year |  | 811,759,800
Purchase of treasury shares |  | (4,836,000)
Delivery of restricted shares |  | 783,362
Shares at the end of the year |  | 807,707,162

| 22.2 | Treasury shares

The Company has 4,766,084 shares held in treasury, with an average cost of R$26.00 (twenty-six Brazilian Reais) per share, and market value corresponding to R$87,601.

|  | Parent company
Quantity of outstanding of shares
|  | 09.30.20
Shares at the beggining of the exercise |  | 713,446
Purchase of treasury shares |  | 4,836,000
Delivery of restricted shares |  | (783,362)
Shares at the end of the exercise |  | 4,766,084

The program of repurchase of own shares, which was approved by the Board of Directors on March 26, 2020, was concluded on May 22, 2020. The Company purchased 4,836,000 common shares, representing 0.60% of its capital

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 70

stock, at the cost of R$106,070, with the purpose to maintain in treasury for eventual disposal, cancellation, as well as to comply with obligations and commitments made under the Stock Option Plan and the Restricted Stocks Plan.

| 23. | EARNINGS (LOSS) PER SHARE

The basic earnings (losses) per share are calculated by dividing the earnings (losses) attributable to the owners of ordinary shares, by the weighted average quantity of available ordinary shares during the period.

The diluted earnings (losses) per share are calculated by dividing the earnings (losses) attributable to the owners of ordinary shares by the weighted average quantity of available ordinary shares during the period summed to the weighted average quantity of ordinary shares that would be available on the conversion of all potential dilutive ordinary shares (stock options and restricted shares).

| Continued operations
|  |  | 2020 |  |  |  | 2019
| Jul - Sep |  | Jan - Sep |  | Jul - Sep |  | Jan - Sep
Basic numerator |  |  |  |  |  |  |
Net earnings (loss) for the exercise attributable to controlling shareholders | 216,791 |  | 474,740 |  | 435,108 |  | 510,939
Basic denominator |  |  |  |  |  |  |
Common shares | 812,473,246 |  | 812,473,246 |  | 812,473,246 |  | 812,473,246
Weighted average number of outstanding shares - basic (except treasury shares) | 807,406,368 |  | 809,583,921 |  | 811,536,857 |  | 811,464,814
Net earnings (loss) per share basic - R$ | 0.27 |  | 0.59 |  | 0.54 |  | 0.63
Diluted numerator |  |  |  |  |  |  |
Net earnings (loss) for the exercise attributable to controlling shareholders | 216,791 |  | 474,740 |  | 435,108 |  | 510,939
Diluted denominator |  |  |  |  |  |  |
Weighted average number of outstanding shares - basic (except treasury shares) | 807,406,368 |  | 809,583,921 |  | 811,536,857 |  | 811,464,814
Number of potential shares | 58,332 |  | 58,332 |  | - |  | -
Weighted average number of outstanding shares - diluted | 807,464,700 |  | 809,642,253 |  | 811,536,857 |  | 811,464,814
Net earnings (loss) per share diluted - R$ | 0.27 |  | 0.59 |  | 0.54 |  | 0.63

| Discontinued operations |  | Continued and discontinued operations
|  |  | 2019 |  |  |  | 2019
| Jul - Sep |  | Jan - Sep |  | Jul - Sep |  | Jan - Sep
Basic numerator |  |  |  |  |  |  |
Net earnings (loss) for the exercise attributable to controlling shareholders | (141,201) |  | (895,142) |  | 293,907 |  | (384,203)
Basic denominator |  |  |  |  |  |  |
Common shares | 812,473,246 |  | 812,473,246 |  | 812,473,246 |  | 812,473,246
Weighted average number of outstanding shares - basic (except treasury shares) | 811,536,857 |  | 811,464,814 |  | 811,536,857 |  | 811,464,814
Net earnings (loss) per share basic - R$ | (0.17) |  | (1.10) |  | 0.36 |  | (0.47)
Diluted numerator |  |  |  |  |  |  |
Net earnings (loss) for the exercise attributable to controlling shareholders | (141,201) |  | (895,142) |  | 293,907 |  | (384,203)
Diluted denominator |  |  |  |  |  |  |
Weighted average number of outstanding shares - basic (except treasury shares) | 811,536,857 |  | 811,464,814 |  | 811,536,857 |  | 811,464,814
Number of potential shares | - |  | - |  | - |  | -
Weighted average number of outstanding shares - diluted | 811,536,857 |  | 811,464,814 |  | 811,536,857 |  | 811,464,814
Net earnings (loss) per share diluted - R$ | (0.17) |  | (1.10) |  | 0.36 |  | (0.47)

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 71

| 24. | FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

| 24.1 | Overview

In the ordinary course of business, the Company is exposed to credit, liquidity and market risks, which are actively managed in compliance with the Financial Risk Management Policy (“Risk Policy”) and internal guidelines and strategic documents subject to such policy, executing the formal designation of its hedge accounting relations in accordance with CPC 48 / IFRS 09, as disclosed in the financial statements for the year ended on December 31, 2019.

| 24.2 | Credit risk management

The Company is exposed to the credit risk related to the financial assets held: trade and non-trade accounts receivable, marketable securities, derivative instruments and cash and equivalents.

On September 30, 2020, the Company held financial investments over R$100,000 at the following financial institutions: Banco Bradesco, Banco BIC, Banco BNP Paribas, Banco do Brasil, Banco BTG Pactual, Banco Itaú, Banco Safra, Banco Santander, Banco Votorantim, Citibank, HSBC, J.P. Morgan Chase Bank, T.Garanti Bankasi A.Ş. and Vakiflar Bankasi.

The Company also held derivative contracts with the following financial institutions: Banco Bradesco, Banco Itaú, Banco Santander, Banco Votorantim, Bank of America Merrill Lynch, Banco BNP Paribas, Citibank, Deutsche Bank, ING Bank, J.P. Morgan Chase Bank, Morgan Stanley, Rabobank and XP.

| 24.3 | Capital management and liquidity risk

On September 30, 2020, the long-term consolidated gross debt represented 80.65% (82.50% as of December 31, 2019) of the total gross indebtedness, which has an average term higher than seven years.

The Company monitors the gross debt and net debt as set forth below:

| Consolidated
| 09.30.20 |  | 12.31.19
| Current |  | Non-current |  | Total |  | Total
Foreign currency debt | (954,629) |  | (14,766,670) |  | (15,721,299) |  | (11,006,524)
Local currency debt | (3,443,798) |  | (6,849,332) |  | (10,293,130) |  | (7,613,755)
Derivative financial liabilities | (793,361) |  | (21,354) |  | (814,715) |  | (153,612)
Gross debt | (5,191,788) |  | (21,637,356) |  | (26,829,144) |  | (18,773,891)
Marketable securities and cash and cash equivalents | 11,711,678 |  | 382,283 |  | 12,093,961 |  | 4,963,319
Derivative financial assets | 153,421 |  | 223 |  | 153,644 |  | 245,315
Restricted cash | 1 |  | 24,297 |  | 24,298 |  | 296,294
Net debt |  |  |  |  | (14,557,241) |  | (13,268,963)

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

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 72

| Parent company
| 09.30.20
| Book value |  | Contractual cash flow |  | Up to 12 months |  | Oct - Dec 2021 |  | 2022 |  | 2023 |  | 2024 |  | 2025 onwards
Non derivative financial liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans and financing | 22,812,054 |  | 32,394,437 |  | 5,055,707 |  | 523,483 |  | 3,222,670 |  | 3,439,202 |  | 2,679,717 |  | 17,473,658
Trade accounts payable | 7,294,754 |  | 7,374,699 |  | 7,368,297 |  | 767 |  | 2,836 |  | 2,692 |  | 107 |  | -
Supply chain finance | 1,121,372 |  | 1,136,346 |  | 1,136,346 |  | - |  | - |  | - |  | - |  | -
Lease payables | 2,160,313 |  | 2,762,720 |  | 269,980 |  | 123,113 |  | 435,314 |  | 373,740 |  | 337,402 |  | 1,223,171
Derivative financial liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Financial instruments designated as cash flow hedge |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate derivatives | 36,056 |  | 36,056 |  | 28,645 |  | 7,411 |  | - |  | - |  | - |  | -
Currency derivatives | 615,635 |  | 615,635 |  | 609,277 |  | 5,897 |  | 461 |  | - |  | - |  | -
Commodities derivatives | 104,120 |  | 104,120 |  | 96,534 |  | 7,386 |  | 200 |  | - |  | - |  | -
Financial instruments not designated as cash flow hedge |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Currency derivatives | 49,156 |  | 49,156 |  | 49,156 |  | - |  | - |  | - |  | - |  | -

| Consolidated
| 09.30.20
| Book value |  | Contractual cash flow |  | Up to 12 months |  | Jul - Dec 2021 |  | 2022 |  | 2023 |  | 2024 |  | 2025 onwards
Non derivative financial liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans and financing | 26,014,429 |  | 36,445,383 |  | 5,346,027 |  | 574,837 |  | 3,591,534 |  | 3,595,783 |  | 2,802,226 |  | 20,534,976
Trade accounts payable | 8,105,061 |  | 8,185,025 |  | 8,178,623 |  | 767 |  | 2,836 |  | 2,692 |  | 107 |  | -
Supply chain finance | 1,121,372 |  | 1,136,346 |  | 1,136,346 |  | - |  | - |  | - |  | - |  | -
Lease payables | 2,398,643 |  | 3,050,187 |  | 348,484 |  | 139,153 |  | 490,309 |  | 422,879 |  | 346,211 |  | 1,303,151
Derivative financial liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Financial instruments designated as cash flow hedge |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate derivatives | 36,056 |  | 36,056 |  | 28,645 |  | 7,411 |  | - |  | - |  | - |  | -
Currency derivatives | 615,635 |  | 615,635 |  | 609,277 |  | 5,897 |  | 461 |  | - |  | - |  | -
Commodities derivatives | 104,120 |  | 104,120 |  | 96,534 |  | 7,386 |  | 200 |  | - |  | - |  | -
Financial instruments not designated as cash flow hedge |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Currency derivatives | 58,904 |  | 58,904 |  | 58,904 |  | - |  | - |  | - |  | - |  | -

The Company does not expect that the cash outflows to fulfill the obligations shown above will be significantly anticipated by factors unrelated to its best interests, or substantially modified outside the normal course of business.

| 24.4 | Market risk management

| 24.4.1. | Interest rate risk

The indebtedness is essentially linked to fixed coupons (R$, USD, EUR and TRY), Interbank Deposit Certificate (“CDI”), Broad Consumer Price Index (“IPCA”) and London Interbank Offered Rate (“LIBOR”). In situations of adverse market changes that result in an increase in these rates, the cost of floating-rate debt rises and on the other hand, the cost of fixed-rate debt decreases in relative terms.

Regarding marketable securities, the Company holds, mainly, instruments indexed by the CDI for investments in Brazil and fixed coupon in USD for investments in the foreign market.

The Company’s exposure to interest rates can be assessed in notes 5 and 15.

The derivative financial instruments hired to hedge the exposure to interest rates as of September 30, 2020 are shown in the table below:

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 73

09.30.20
Cash flow hedges - Derivative instruments |  | Maturity |  | Hedged Object |  | Asset |  | Liability |  | Notional |  | Fair value (R$)
Subsidiaries |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate swap |  | 3rd Qtr. 2021 |  | Debt |  | 118.00% CDI |  | 5.60% p.a. |  | 810,000 | BRL |  | (28,645)
Interest rate swap |  | 4th Qtr. 2021 |  | Debt |  | 118.00% CDI |  | 5.72% p.a. |  | 180,000 | BRL |  | (7,411)
|  |  |  |  |  |  |  |  |  |  |  |  | (36,056)
Derivative instruments not designated |  | Maturity |  |  |  | Asset |  | Liability |  | Notional |  | Fair value (R$)
Parent company and Consolidated |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate swap |  | 2nd Qtr. 2021 |  |  |  | USD + 2.80% p.a. |  | CDI + 2.27% p.a. |  | 49,900 | USD |  | 8,657
|  |  |  |  |  |  |  |  |  |  |  |  | 8,657

| 24.4.2. | Foreign exchange risk

This risk is the one that may cause unexpected losses to the Company resulting from volatility of the FX rates, reducing its assets and revenues or increasing its liabilities and costs. The Company’s exposure is managed in three dimensions: statement of financial position exposure, operating income exposure and investments exposure.

| i. | Statement of financial position exposure

Assets and liabilities denominated in foreign currency for which the exchange variations are recognized in the Financial Results are as follows, summarized in Brazilian Reais:

|  | Consolidated
|  | 09.30.20 |  | 12.31.19 (1)
Cash and cash equivalents |  | 7,566,208 |  | 2,591,746
Trade accounts receivable |  | 6,140,756 |  | 4,892,708
Trade accounts payable |  | (854,264) |  | (601,007)
Loans and financing |  | (14,939,437) |  | (8,854,826)
Other assets and liabilities, net |  | (261,137) |  | (162,341)
Exposure of assets and liabilities in foreign currencies |  | (2,347,874) |  | (2,133,720)
Derivative financial instruments (hedge) |  | 2,179,217 |  | 1,734,517
Exposure in result, net |  | (168,657) |  | (399,203)

| (1) | Restated for better presentation of the amount previously classified in Investments, which was relocated to the corresponding assets and liabilities.

The net P&L exposure is mainly composed of the following currencies:

Net P&L Exposure |  | 09.30.20 |  | 12.31.19
Argentinian Peso (ARS) |  | (5,253) |  | (13,236)
Euros (EUR) |  | (38,248) |  | 23,624
Pound Sterling (GBP) |  | 9,648 |  | 6,949
Yen (JPY) |  | 15,067 |  | (17,285)
Rubles (RUB) |  | 32,729 |  | 2,780
Turkish Liras (TRY) |  | 64,693 |  | (418,576)
U.S. Dollars (USD) |  | (247,293) |  | 16,541
Total |  | (168,657) |  | (399,203)

The derivative financial instruments hired to hedge the foreign currency statement of financial position exposure on September 30, 2020 are not designated as hedge accounting and are set forth below:

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 74

09.30.20
Derivative instruments not designated |  | Asset |  | Liability |  | Maturity |  | Notional |  | Exercise rate |  | Fair value (R$)
Parent company |  |  |  |  |  |  |  |  |  |  |  |  |
Non-deliverable forward |  | EUR |  | BRL |  | 4th Qtr. 2020 |  | EUR | 265,000 |  | 6.5378 |  | 20,942
Non-deliverable forward |  | USD |  | BRL |  | 4th Qtr. 2020 |  | USD | 340,000 |  | 5.5969 |  | 14,290
Non-deliverable forward |  | USD |  | BRL |  | 2nd Qtr. 2021 |  | USD | 50,000 |  | 5.2800 |  | 18,557
Non-deliverable forward |  | BRL |  | USD |  | 4th Qtr. 2020 |  | USD | 6,000 |  | 4.3314 |  | (7,855)
Collar |  | BRL |  | USD |  | 4th Qtr. 2020 |  | USD | 31,000 |  | 4.2996 |  | (41,301)
Futures - B3 |  | BRL |  | USD |  | 4th Qtr. 2020 |  | USD | 327,250 |  | 5.6317 |  | 2,880
|  |  |  |  |  |  |  |  |  |  |  |  | 7,513
Subsidiaries |  |  |  |  |  |  |  |  |  |  |  |  |
Non-deliverable forward |  | EUR |  | JPY |  | 4th Qtr. 2020 |  | EUR | 20,327 |  | 122.9881 |  | 845
Non-deliverable forward |  | USD |  | EUR |  | 4th Qtr. 2020 |  | EUR | 92,000 |  | 1.1670 |  | (3,207)
Non-deliverable forward |  | EUR |  | RUB |  | 4th Qtr. 2020 |  | EUR | 16,369 |  | 91.6373 |  | 971
Collar |  | TRY |  | USD |  | 4th Qtr. 2020 |  | USD | 50,000 |  | 7.8900 |  | (3,312)
Total Consolidated |  |  |  |  |  |  |  |  |  |  |  |  | 2,810

| ii. | Operating income exposure

The derivative and non-derivative financial instruments designated as cash flow hedges for foreing exchange operating income exposure on September 30, 2020 are set forth below:

09.30.20
Cash flow hedge - Derivative instruments |  | Hedged object |  | Asset |  | Liability |  | Maturity |  | Notional |  | Designation rate |  | Fair value
Parent company and consolidated |  |  |  |  |  |  |  |  |  |  |  |  |
Non-deliverable forward |  | USD Exports |  | BRL |  | USD |  | 4th Qtr. 2020 |  | USD | 104,000 |  | 5.4437 |  | (19,925)
Collar |  | USD Exports |  | BRL |  | USD |  | 4th Qtr. 2020 |  | USD | 280,000 |  | 4.6409 |  | (282,359)
Collar |  | USD Exports |  | BRL |  | USD |  | 1st Qtr. 2021 |  | USD | 112,000 |  | 4.8954 |  | (88,804)
Collar |  | USD Exports |  | BRL |  | USD |  | 2nd Qtr. 2021 |  | USD | 45,000 |  | 5.6328 |  | (7,578)
Collar |  | USD Exports |  | BRL |  | USD |  | 3rd Qtr. 2021 |  | USD | 10,000 |  | 5.6334 |  | (694)
|  |  |  |  |  |  |  |  |  |  |  |  |  |  | (399,360)
09.30.20
Cash flow hedge - Non-derivative instruments |  | Hedged object |  |  |  | Liability |  | Maturity |  | Notional |  | Designation rate |  | Fair value (1)
Parent company and consolidated |  |  |  |  |  |  |  |  |  |  |  |  |
Bond BRF SA BRFSBZ5 (2) |  | USD Exports |  |  |  | USD |  | 2nd Qtr. 2022 |  | USD | 70,928 |  | 2.0213 |  | (441,009)
Bond BRF SA BRFSBZ3 |  | USD Exports |  |  |  | USD |  | 2nd Qtr. 2023 |  | USD | 150,000 |  | 2.0387 |  | (540,300)
|  |  |  |  |  |  |  |  |  |  |  |  |  |  | (981,309)

| (1) | Corresponds to the effective portion of the hedge result accumulated in Other Comprehensive Income.

| (2) | For this instrument, the initial designation was of USD150,000, however there were repurchases with corresponding revocation of the designation in the amounts of USD31,338 at the rate of 3.2408, USD9,350 at the rate of 4.1827, USD27,190 at the rate of 5.1889 e USD11,194 at the rate of 5.5714. The accumulated exchange rate variation of the revoked portions is fixed and reserved in Other Comprehensive Income until the recognition of the hedge object in the second quarter of 2022.

| iii. | Investments exposure

The non-derivative financial instruments designated as net investment hedge instruments on September 30, 2020 are set forth below:

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 75

09.30.20
Net investment hedge - Non-derivative instruments |  | Protection (Investment) |  | Liability |  | Maturity |  | Notional |  | Rate |  | Fair value (1)
Parent company and consolidated |  |  |  |  |  |  |  |  |  |  |  |  |
Bond - BRF SA BRFSBZ 4.35 |  | Federal Foods LLC |  | USD |  | 3rd Qtr. 2026 |  | USD | 75,673 |  | 3.7649 |  | (142,588)
Bond - BRF SA BRFSBZ 4.35 |  | BRF Al Yasra Food |  | USD |  | 3rd Qtr. 2026 |  | USD | 108,757 |  | 3.7649 |  | (187,253)
Bond - BRF SA BRFSBZ 4.35 |  | Al Khan Foodstuff LLC |  | USD |  | 3rd Qtr. 2026 |  | USD | 65,570 |  | 3.7649 |  | (122,516)
|  |  |  |  |  |  |  |  |  |  |  |  | (452,357)

| (1) | Corresponds to the effective portion of the hedge result accumulated in Other Comprehensive Income.

| 24.4.3. | Commodities price risk

The financial instruments designated as cash flow hedges and fair value hedges for the commodities price exposure on September 30, 2020 are set forth below:

09.30.20
Cash flow hedge - Derivative instruments |  | Hedged object |  | Index |  | Maturity |  | Quantity |  | Exercise rate (USD/Ton) |  | Fair value
Parent company and consolidated |  |  |  |  |  |  |  |  |  |  |  |  |
Non-deliverable forward - buy |  | Soybean meal purchase - floating price |  | Soybean meal - CBOT |  | 1st Qtr. 2021 |  | 9,997 | ton |  | 115.15 |  | 2,856
Non-deliverable forward - buy |  | Soybean meal purchase - floating price |  | Soybean meal - CBOT |  | 2nd Qtr. 2021 |  | 100,441 | ton |  | 116.46 |  | 24,053
Non-deliverable forward - buy |  | Soybean oil purchase - floating price |  | Soybean oil - CBOT |  | 4th Qtr. 2020 |  | 7,198 | ton |  | 607.81 |  | 5,006
Non-deliverable forward - buy |  | Soybean oil purchase - floating price |  | Soybean oil - CBOT |  | 1st Qtr. 2021 |  | 10,297 | ton |  | 626.18 |  | 6,225
Non-deliverable forward - buy |  | Soybean oil purchase - floating price |  | Soybean oil - CBOT |  | 2nd Qtr. 2021 |  | 8,998 | ton |  | 675.23 |  | 3,082
Non-deliverable forward - buy |  | Soybean oil purchase - floating price |  | Soybean oil - CBOT |  | 3rd Qtr. 2021 |  | 1,000 | ton |  | 731.93 |  | 27
|  |  |  |  |  |  |  |  |  |  |  |  | 41,249

09.30.20
Fair value hedge - Derivative instruments |  | Hedged object |  | Index |  | Maturity |  | Quantity |  | Exercise rate (USD/Ton) |  | Fair value
Parent company and consolidated |  |  |  |  |  |  |  |  |  |  |  |  |
Non-deliverable forward - sell |  | Soybean purchase - fixed price |  | Soybean - CBOT |  | 4th Qtr. 2020 |  | 39,487 | ton |  | 342.08 |  | (7,586)
Non-deliverable forward - sell |  | Soybean purchase - fixed price |  | Soybean - CBOT |  | 1st Qtr. 2021 |  | 19,157 | ton |  | 349.76 |  | (2,740)
Non-deliverable forward - sell |  | Corn purchase - fixed price |  | Corn - CBOT |  | 4th Qtr. 2020 |  | 533,087 | ton |  | 144.77 |  | (13,336)
Non-deliverable forward - sell |  | Corn purchase - fixed price |  | Corn - CBOT |  | 1st Qtr. 2021 |  | 330,233 | ton |  | 152.73 |  | (225)
Non-deliverable forward - sell |  | Corn purchase - fixed price |  | Corn - CBOT |  | 2nd Qtr. 2021 |  | 739,919 | ton |  | 147.39 |  | (36,416)
Non-deliverable forward - sell |  | Corn purchase - fixed price |  | Corn - CBOT |  | 3rd Qtr. 2021 |  | 268,363 | ton |  | 142.97 |  | (14,905)
Non-deliverable forward - sell |  | Corn purchase - fixed price |  | Corn - CBOT |  | 4th Qtr. 2021 |  | 152,990 | ton |  | 145.54 |  | (7,386)
Non-deliverable forward - sell |  | Corn purchase - fixed price |  | Corn - CBOT |  | 1st Qtr. 2022 |  | 9,998 | ton |  | 153.33 |  | (200)
Corn future - sell |  | Corn purchase - fixed price |  | Corn - B3 |  | 4th Qtr. 2020 |  | 2,376 | ton |  | 1,003.60 |  | (45)
Corn future - sell |  | Corn purchase - fixed price |  | Corn - B3 |  | 1st Qtr. 2021 |  | 28,053 | ton |  | 990.17 |  | (661)
Corn future - sell |  | Corn purchase - fixed price |  | Corn - B3 |  | 2nd Qtr. 2021 |  | 18,765 | ton |  | 957.84 |  | (416)
Corn future - sell |  | Corn purchase - fixed price |  | Corn - B3 |  | 3rd Qtr. 2021 |  | 38,988 | ton |  | 819.48 |  | (888)
Corn future - sell |  | Corn purchase - fixed price |  | Corn - B3 |  | 4th Qtr. 2021 |  | 5,994 | ton |  | 828.25 |  | (143)
|  |  |  |  |  |  |  |  |  |  |  |  | (84,947)

09.30.20
Fair value hedge - Derivative instruments |  | Protection object |  | Assets |  | Liabilities |  | Maturity |  | Notional |  | Exercise rate |  | Fair value
Parent company and consolidated |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-deliverable forward |  | Cost in USD |  | BRL |  | USD | USD | 4th Qtr. 2020 |  | USD | 90,682 |  | 4.7863 |  | (76,763)
Non-deliverable forward |  | Cost in USD |  | BRL |  | USD | USD | 1st Qtr. 2021 |  | USD | 57,129 |  | 4.7109 |  | (53,064)
Non-deliverable forward |  | Cost in USD |  | BRL |  | USD | USD | 2nd Qtr. 2021 |  | USD | 109,056 |  | 5.2096 |  | (49,586)
Non-deliverable forward |  | Cost in USD |  | BRL |  | USD | USD | 3rd Qtr. 2021 |  | USD | 38,368 |  | 5.4856 |  | (7,876)
Non-deliverable forward |  | Cost in USD |  | BRL |  | USD | USD | 4th Qtr. 2021 |  | USD | 22,266 |  | 5.4695 |  | (5,674)
Non-deliverable forward |  | Cost in USD |  | BRL |  | USD | USD | 1st Qtr. 2022 |  | USD | 1,533 |  | 5.4651 |  | (461)
|  |  |  |  |  |  |  |  |  |  |  |  |  |  | (193,424)

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 76

| 24.5 | Effects of hedge instruments on financial information

The effects of financial instruments for hedging exchange rate, commodities price and interest rates in the income for the period, in other comprehensive income and in the financial position are set forth below:

Income for the period |  |  |  |  |  |  |  |  |  | Consolidated
Jul - Sep 2020 |  | Note |  | Exposure |  | Hedge accounting |  | Foreign Exchange |  | Commodities |  | Interest Rate |  | Total
Net Sales |  |  |  |  |  |  |  | 10,220,077 |  | - |  | - |  | 10,220,077
Derivatives result |  |  |  | Operating Results |  | Cash flow |  | (277,486) |  | - |  | - |  | (277,486)
Net Revenue |  | 26 |  |  |  |  |  | 9,942,591 |  | - |  | - |  | 9,942,591
Cost of Goods Sold |  |  |  |  |  |  |  | - |  | (7,537,572) |  | - |  | (7,537,572)
Derivatives result |  |  |  | Operating Results |  | Cash flow / Fair value |  | - |  | (60,561) |  | - |  | (60,561)
Cost of Goods Sold |  |  |  |  |  |  |  | - |  | (7,598,133) |  | - |  | (7,598,133)
Interests on Loans and Financing |  |  |  |  |  |  |  | - |  | - |  | (490,955) |  | (490,955)
Interest Rate Derivatives result |  |  |  | Interest expenses |  | Cash flow |  | - |  | - |  | (8,247) |  | (8,247)
Foreign Exchange variation on assets and liabilities |  |  |  |  |  |  |  | 4,420 |  | - |  | - |  | 4,420
Foreign Exchange Derivatives result |  |  |  | Financial Position |  | Not designated |  | 86,372 |  | - |  | - |  | 86,372
Effects on Financial Result |  | 28 |  |  |  |  |  | 90,792 |  | - |  | (499,202) |  | (408,410)
Other Comprehensive Income |  |  |  |  |  |  |  |  |  | Consolidated
Jul - Sep 2020 |  |  |  | Exposure |  | Hedge accounting |  | Foreign Exchange |  | Commodities |  | Interest Rate |  | Total
Derivative Instruments - current |  |  |  | Operating Results |  | Cash flow |  | 245,631 |  | 75,065 |  | 7,752 |  | 328,448
Non-derivative Instruments – non-current |  |  |  | Operating Results |  | Cash flow |  | (29,649) |  | - |  | - |  | (29,649)
Non-derivative Instruments - non-current |  |  |  | Foreign investments |  | Net investment |  | (43,428) |  | - |  | - |  | (43,428)
Other Comprehensive Income (1) |  |  |  |  |  |  |  | 172,554 |  | 75,065 |  | 7,752 |  | 255,371
Income for the period |  |  |  |  |  |  |  |  |  | Consolidated
Jan - Sep 2020 |  | Note |  | Exposure |  | Hedge accounting |  | Foreign Exchange |  | Commodities |  | Interest Rate |  | Total
Net Sales |  |  |  |  |  |  |  | 29,183,234 |  | - |  | - |  | 29,183,234
Derivatives result |  |  |  | Operating Results |  | Cash flow |  | (1,187,652) |  | - |  | - |  | (1,187,652)
Net Revenue |  | 26 |  |  |  |  |  | 27,995,582 |  | - |  | - |  | 27,995,582
Cost of Goods Sold |  |  |  |  |  |  |  | - |  | (21,291,958) |  | - |  | (21,291,958)
Derivatives result |  |  |  | Operating Results |  | Cash flow / Fair value |  | - |  | (127,297) |  | - |  | (127,297)
Cost of Goods Sold |  |  |  |  |  |  |  | - |  | (21,419,255) |  | - |  | (21,419,255)
Interests on Loans and Financing |  |  |  |  |  |  |  | - |  | - |  | (1,122,525) |  | (1,122,525)
Interest Rate Derivatives result |  |  |  | Interest expenses |  | Cash flow |  | - |  | - |  | (8,646) |  | (8,646)
Foreign Exchange variation on assets and liabilities |  |  |  |  |  |  |  | (1,529,314) |  | - |  | - |  | (1,529,314)
Foreign Exchange Derivatives result |  |  |  | Financial Position |  | Not designated |  | 1,364,935 |  | - |  | - |  | 1,364,935
Effects on Financial Result |  | 28 |  |  |  |  |  | (164,379) |  | - |  | (1,131,171) |  | (1,295,550)
Other Comprehensive Income |  |  |  |  |  |  |  |  |  | Consolidated
Jan - Sep 2020 |  |  |  | Exposure |  | Hedge accounting |  | Foreign Exchange |  | Commodities |  | Interest Rate |  | Total
Derivative Instruments - current |  |  |  | Operating Results |  | Cash flow |  | (505,629) |  | 107,738 |  | (22,202) |  | (420,093)
Non-derivative Instruments – non-current |  |  |  | Operating Results |  | Cash flow |  | (404,432) |  | - |  | - |  | (404,432)
Non-derivative Instruments - non-current |  |  |  | Foreign investments |  | Net investment |  | (385,539) |  | - |  | - |  | (385,539)
Other Comprehensive Income (1) |  |  |  |  |  |  |  | (1,295,600) |  | 107,738 |  | (22,202) |  | (1,210,064)

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 77

Equity balances |  |  |  |  |  |  |  |  |  | Consolidated
09.30.20 |  | Note |  | Exposure |  | Hedge accounting |  | Foreign Exchange |  | Commodities |  | Interest Rate |  | Total
Designated derivatives |  |  |  | Operating Results |  | Cash flow / Fair value |  | (592,784) |  | (43,698) |  | (36,056) |  | (672,538)
Not designated derivatives |  |  |  | Financial Position |  | Not designated |  | 11,467 |  | - |  | - |  | 11,467
Asset / (Liability) net |  |  |  |  |  |  |  | (581,317) |  | (43,698) |  | (36,056) |  | (661,071)
Derivative Instruments - current (2) |  |  |  | Operating Results |  | Cash flow |  | (428,794) |  | 67,294 |  | (22,202) |  | (383,702)
Derivative Instruments - non-current |  |  |  | Operating Results |  | Cash flow |  | (981,309) |  | - |  | - |  | (981,309)
Non-derivative Instruments - non-current |  |  |  | Foreign investments |  | Net investment |  | (452,357) |  | - |  | - |  | (452,357)
Other Comprehensive Income (1) |  |  |  |  |  |  |  | (1,862,460) |  | 67,294 |  | (22,202) |  | (1,817,368)
Derivatives result |  |  |  | Operating Results |  | Cash flow / Fair value |  | - |  | 352,244 |  | - |  | 352,244
Inventories |  | 7 |  |  |  |  |  | - |  | 352,244 |  | - |  | 352,244

| (1) | All effects are shown gross of taxes.

| (2) | Includes R$(8,389) related to the time value of the foreign exchange option contracts.

In the Statement of Cash Flows, the effect of the derivative financial instruments designated as hedge accounting is presented in the line item in which the hedged object is registered. For the instruments not designated, the effects are presented in the Derivative Financial Instruments line item.

Summarized financial position of derivative financial instruments:

| Parent company |  | Consolidated
| 09.30.20 |  | 12.31.19 |  | 09.30.20 |  | 12.31.19
Asset |  |  |  |  |  |  |
Designated as hedge accounting |  |  |  |  |  |  |
Currency derivatives | 22,851 |  | 166,729 |  | 22,851 |  | 166,729
Commodities derivatives | 60,422 |  | 25,191 |  | 60,422 |  | 25,191
Not designated as hedge accounting |  |  |  |  |  |  |
Currency derivatives | 65,326 |  | 51,811 |  | 70,371 |  | 53,395
| 148,599 |  | 243,731 |  | 153,644 |  | 245,315
Current assets | 148,376 |  | 193,740 |  | 153,421 |  | 195,324
Non-current assets | 223 |  | 49,991 |  | 223 |  | 49,991
Liabilities |  |  |  |  |  |  |
Designated as hedge accounting |  |  |  |  |  |  |
Currency derivatives | (615,635) |  | (73,417) |  | (615,635) |  | (73,417)
Commodities derivatives | (104,120) |  | (48,829) |  | (104,120) |  | (48,829)
Interest rate derivatives | (36,056) |  | - |  | (36,056) |  | -
Not designated as hedge accounting |  |  |  |  |  |  |
Currency derivatives | (49,156) |  | (29,479) |  | (58,904) |  | (31,369)
| (804,967) |  | (151,725) |  | (814,715) |  | (153,615)
Current liabilities | (783,613) |  | (151,722) |  | (793,361) |  | (153,612)
Non-current liabilities | (21,354) |  | (3) |  | (21,354) |  | (3)

| 24.6 | Sensitivity analysis

The Management understands that the most relevant risks that may affect the Company’s results are the volatility of commodities prices and foreign exchange rates.

The amounts below represent the possible impacts (incremental results) of the hedging instruments and their respective hedged positions, considering situations of increase and decrease in the selected risk factors.

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 78

The information used in the preparation of the analysis is based on the position as of September 30, 2020, which has been described in the items above. The future results may diverge significantly of the estimated values if the reality presents different than the considered premises. Positive values indicate gains and negative values indicate losses.

|  | Scenario
Exchange rate - Balance |  | Basis |  | - 50% |  | - 25% |  | - 10% |  | + 10% |  | + 25% |  | + 50%
USD |  | 5.6407 |  | 2.8204 |  | 4.2305 |  | 5.0766 |  | 6.2048 |  | 7.0509 |  | 8.4611
Monetary Assets and Liabilities |  |  |  | 488,832 |  | 244,416 |  | 97,766 |  | (97,766) |  | (244,416) |  | (488,833)
Derivative Instruments - Not designated |  |  |  | (365,185) |  | (182,592) |  | (73,037) |  | 73,037 |  | 182,592 |  | 365,185
Net effect |  |  |  | 123,647 |  | 61,824 |  | 24,729 |  | (24,729) |  | (61,824) |  | (123,648)
EUR |  | 6.6132 |  | 3.3066 |  | 4.9599 |  | 5.9519 |  | 7.2745 |  | 8.2665 |  | 9.9198
Monetary Assets and Liabilities |  |  |  | 713,889 |  | 356,945 |  | 142,778 |  | (142,778) |  | (356,945) |  | (713,889)
Derivative Instruments - Not designated |  |  |  | (694,765) |  | (347,383) |  | (138,953) |  | 138,953 |  | 347,383 |  | 694,765
Net effect |  |  |  | 19,124 |  | 9,562 |  | 3,825 |  | (3,825) |  | (9,562) |  | (19,124)
JPY |  | 0.0534 |  | 0.0267 |  | 0.0401 |  | 0.0481 |  | 0.0588 |  | 0.0668 |  | 0.0801
Monetary Assets and Liabilities |  |  |  | (74,321) |  | (37,161) |  | (14,864) |  | 14,864 |  | 37,161 |  | 74,321
Derivative Instruments - Not designated |  |  |  | 66,788 |  | 33,394 |  | 13,358 |  | (13,358) |  | (33,394) |  | (66,788)
Net effect |  |  |  | (7,533) |  | (3,767) |  | (1,506) |  | 1,506 |  | 3,767 |  | 7,533
RUB |  | 0.0727 |  | 0.0364 |  | 0.0545 |  | 0.0654 |  | 0.0800 |  | 0.0909 |  | 0.1091
Monetary Assets and Liabilities |  |  |  | (70,904) |  | (35,452) |  | (14,181) |  | 14,181 |  | 35,452 |  | 70,904
Derivative Instruments - Not designated |  |  |  | 54,540 |  | 27,270 |  | 10,908 |  | (10,908) |  | (27,270) |  | (54,540)
Net effect |  |  |  | (16,364) |  | (8,182) |  | (3,273) |  | 3,273 |  | 8,182 |  | 16,364
TRY |  | 0.7294 |  | 0.3647 |  | 0.5471 |  | 0.6565 |  | 0.8023 |  | 0.9118 |  | 1.0941
Monetary Assets and Liabilities |  |  |  | 118,639 |  | 59,320 |  | 23,728 |  | (23,728) |  | (59,320) |  | (118,639)
Derivative Instruments - Not designated |  |  |  | (150,986) |  | (75,493) |  | (30,197) |  | 30,197 |  | 75,493 |  | 150,986
Net effect |  |  |  | (32,347) |  | (16,173) |  | (6,469) |  | 6,469 |  | 16,173 |  | 32,347

|  |  | Scenario
| Exchange rate - Operating results |  | Basis |  | - 50% |  | - 25% |  | - 10% |  | + 10% |  | + 25% |  | + 50%
| USD |  | 5.6407 |  | 2.8204 |  | 4.2305 |  | 5.0766 |  | 6.2048 |  | 7.0509 |  | 8.4611
| Revenue in USD |  |  |  | (2,177,107) |  | (1,088,554) |  | (435,421) |  | 435,421 |  | 1,088,554 |  | 2,177,107
| NDF |  |  |  | 293,316 |  | 146,658 |  | 58,663 |  | (58,663) |  | (146,658) |  | (293,316)
| Collar |  |  |  | 1,164,080 |  | 560,225 |  | 217,560 |  | (243,489) |  | (621,699) |  | (1,252,047)
| Loans - Designated |  |  |  | 623,094 |  | 311,547 |  | 124,619 |  | (124,619) |  | (311,547) |  | (623,094)
| Net effect |  |  |  | (96,617) |  | (70,124) |  | (34,579) |  | 8,650 |  | 8,650 |  | 8,650

|  | Scenario
Exchange rate - Operating results |  | Basis |  | - 50% |  | - 25% |  | - 10% |  | + 10% |  | + 25% |  | + 50%
USD |  | 5.6407 |  | 2.8204 |  | 4.2305 |  | 5.0766 |  | 6.2048 |  | 7.0509 |  | 8.4611
Cost of Sales |  | BRL |  | (899,788) |  | (449,894) |  | (179,958) |  | 179,958 |  | 449,894 |  | 899,788
NDF |  | BRL |  | 899,788 |  | 449,894 |  | 179,958 |  | (179,958) |  | (449,894) |  | (899,788)
Net effect |  |  |  | - |  | - |  | - |  | - |  | - |  | -
|  | Scenario
Operating results - Commodities |  | Basis (1) |  | - 50% |  | - 25% |  | - 10% |  | + 10% |  | + 25% |  | + 50%
Soy Grain - CBOT |  | 375.82 |  | 187.91 |  | 281.86 |  | 338.24 |  | 413.40 |  | 469.77 |  | 563.73
Cost of Sales |  |  |  | (11,020) |  | (5,510) |  | (2,204) |  | 2,204 |  | 5,510 |  | 11,020
NDF |  |  |  | 11,020 |  | 5,510 |  | 2,204 |  | (2,204) |  | (5,510) |  | (11,020)
Net effect |  |  |  | - |  | - |  | - |  | - |  | - |  | -
Soybean Meal - CBOT |  | 131.80 |  | 65.90 |  | 98.85 |  | 118.62 |  | 144.98 |  | 164.75 |  | 197.70
Cost of Sales |  |  |  | 7,278 |  | 3,639 |  | 1,456 |  | (1,456) |  | (3,639) |  | (7,278)
NDF |  |  |  | (7,278) |  | (3,639) |  | (1,456) |  | 1,456 |  | 3,639 |  | 7,278
Net effect |  |  |  | - |  | - |  | - |  | - |  | - |  | -
Soybean Oil - CBOT |  | 733.83 |  | 366.92 |  | 550.37 |  | 660.45 |  | 807.22 |  | 917.29 |  | 1100.75
Cost of Sales |  |  |  | 10,088 |  | 5,044 |  | 2,018 |  | (2,018) |  | (5,044) |  | (10,088)
NDF |  |  |  | (10,088) |  | (5,044) |  | (2,018) |  | 2,018 |  | 5,044 |  | 10,088
Net effect |  |  |  | - |  | - |  | - |  | - |  | - |  | -
Corn - CBOT |  | 153.20 |  | 76.60 |  | 114.90 |  | 137.88 |  | 168.53 |  | 191.51 |  | 229.81
Cost of Sales |  |  |  | (155,855) |  | (77,927) |  | (31,171) |  | 31,171 |  | 77,927 |  | 155,855
NDF |  |  |  | 155,855 |  | 77,927 |  | 31,171 |  | (31,171) |  | (77,927) |  | (155,855)
Net effect |  |  |  | - |  | - |  | - |  | - |  | - |  | -

| (1) | Base price of each commodity in USD/ton.

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 79

| 24.7 | Financial instruments by category

| Parent company
| 09.30.20
| Amortized cost |  | Fair value through profit and loss |  | Total
Assets |  |  |  |  |
Cash and bank | 886,932 |  | - |  | 886,932
Cash equivalents | - |  | 3,614,885 |  | 3,614,885
Marketable securities | - |  | 326,043 |  | 326,043
Restricted cash | 24,298 |  | - |  | 24,298
Trade accounts receivable | 6,199,650 |  | 253,787 |  | 6,453,437
Other receivables | 101,363 |  | - |  | 101,363
Derivatives not designated | - |  | 65,326 |  | 65,326
Derivatives designated as hedge accounting (1) | - |  | 83,273 |  | 83,273
Liabilities |  |  |  |  |
Trade accounts payable | (7,294,754) |  | - |  | (7,294,754)
Supply chain finance | (1,121,372) |  | - |  | (1,121,372)
Loans and financing (2) | (22,812,054) |  | - |  | (22,812,054)
Derivatives not designated | - |  | (49,156) |  | (49,156)
Derivatives designated as hedge accounting (1) | - |  | (755,811) |  | (755,811)
| (24,015,937) |  | 3,538,347 |  | (20,477,590)

| (1) | All derivatives are measured at fair value. Those designated as hedge accounting have their gains and losses also affecting other comprehensive income and inventories.

| (2) | All loans and borrowings are measured at amortized cost. Those designated as hedge accounting have their gains and losses also affecting shareholders’ equity.

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 80

| Parent company
| 12.31.19
| Amortized cost |  | Fair value through profit and loss |  | Total
Assets |  |  |  |  |
Cash and bank | 170,902 |  | - |  | 170,902
Cash equivalents | - |  | 1,198,078 |  | 1,198,078
Marketable securities | - |  | 411,885 |  | 411,885
Restricted cash | 296,294 |  | - |  | 296,294
Trade accounts receivable | 5,878,791 |  | 225,941 |  | 6,104,732
Other receivables | 120,234 |  | - |  | 120,234
Derivatives not designated | - |  | 51,811 |  | 51,811
Derivatives designated as hedge accounting | - |  | 191,920 |  | 191,920
Liabilities |  |  |  |  |
Trade accounts payable | (5,283,109) |  | - |  | (5,283,109)
Supply chain finance | (842,037) |  | - |  | (842,037)
Loans and financing | (16,429,004) |  | - |  | (16,429,004)
Derivatives not designated | - |  | (29,479) |  | (29,479)
Derivatives designated as hedge accounting | - |  | (122,246) |  | (122,246)
| (16,087,929) |  | 1,927,910 |  | (14,160,019)

| Consolidated
| 09.30.20
| Amortized cost |  | Fair value through other comprehensive income |  | Fair value through profit and loss |  | Total
|  | Equity instruments |  | Debt instruments |  |
Assets |  |  |  |  |  |  |  |  |
Cash and bank | 5,317,561 |  | - |  | - |  | - |  | 5,317,561
Cash equivalents | - |  | - |  | - |  | 6,081,026 |  | 6,081,026
Marketable securities | 321,766 |  | 45,522 |  | - |  | 328,086 |  | 695,374
Restricted cash | 24,298 |  | - |  | - |  | - |  | 24,298
Trade accounts receivable | 2,593,370 |  | - |  | - |  | 253,787 |  | 2,847,157
Other receivables | 104,940 |  | - |  | - |  | - |  | 104,940
Derivatives not designated | - |  | - |  | - |  | 70,371 |  | 70,371
Derivatives designated as hedge accounting (1) | - |  | - |  | - |  | 83,273 |  | 83,273
Liabilities |  |  |  |  |  |  |  |  |
Trade accounts payable | (8,105,061) |  | - |  | - |  | - |  | (8,105,061)
Supply chain finance | (1,121,372) |  | - |  | - |  | - |  | (1,121,372)
Loans and financing (2) | (26,014,429) |  | - |  | - |  | - |  | (26,014,429)
Derivatives not designated | - |  | - |  | - |  | (58,904) |  | (58,904)
Derivatives designated as hedge accounting (1) | - |  | - |  | - |  | (755,811) |  | (755,811)
Written option– business combination | - |  | - |  | - |  | (236,440) |  | (236,440)
| (26,878,927) |  | 45,522 |  | - |  | 5,765,388 |  | (21,068,017)

| (1) | All derivatives are measured at fair value. Those designated as hedge accounting have their gains and losses also affecting other comprehensive income and inventories.

| (2) | All loans and borrowings are measured at amortized cost. Those designated as hedge accounting have their gains and losses also affecting shareholders’ equity.

| Consolidated
| 12.31.19
| Amortized cost |  | Fair value through other comprehensive income |  | Fair value through profit and loss |  | Total
|  | Equity instruments |  | Debt instruments |  |
Assets |  |  |  |  |  |  |  |  |
Cash and bank | 2,289,787 |  | - |  | - |  | - |  | 2,289,787
Cash equivalents | - |  | - |  | - |  | 1,947,998 |  | 1,947,998
Marketable securities | 265,783 |  | 26,678 |  | 19,285 |  | 413,788 |  | 725,534
Restricted cash | 296,294 |  | - |  | - |  | - |  | 296,294
Trade accounts receivable | 2,811,902 |  | - |  | - |  | 225,941 |  | 3,037,843
Other receivables | 123,877 |  | - |  | - |  | - |  | 123,877
Derivatives not designated | - |  | - |  | - |  | 53,395 |  | 53,395
Derivatives designated as hedge accounting | - |  | - |  | - |  | 191,920 |  | 191,920
Liabilities |  |  |  |  |  |  |  |  |
Trade accounts payable | (5,796,766) |  | - |  | - |  | - |  | (5,796,766)
Supply chain finance | (842,037) |  | - |  | - |  | - |  | (842,037)
Loans and financing | (18,620,279) |  | - |  | - |  | - |  | (18,620,279)
Derivatives not designated | - |  | - |  | - |  | (31,369) |  | (31,369)
Derivatives designated as hedge accounting | - |  | - |  | - |  | (122,246) |  | (122,246)
Written option– business combination | - |  | - |  | - |  | (706,920) |  | (706,920)
| (19,471,439) |  | 26,678 |  | 19,285 |  | 1,972,507 |  | (17,452,969)

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 81

| 24.8 | Fair value of financial instruments

The fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Depending on the inputs used for measurement, the financial instruments at fair value may be classified into 3 hierarchy levels:

| » | Level 1 – Uses quoted prices (unadjusted) for identical instruments in active markets. In this category are classified investments in stocks, credit linked notes, savings accounts, overnights, term deposits, Financial Treasury Bills (“LFT”) and investment funds;

| » | Level 2 – Uses 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. In this level are classified the investments in Bank Deposit Certificates (“CDB”) and derivatives, which are measured by well-known pricing models: discounted cash flows and Black-Scholes. The observable inputs are interest rates and curves, volatility factors and foreign exchange rates;

| » | Level 3 – Instruments for which significant inputs are non-observable. The Company has a financial liability arising from a put option written in the context of a business combination. This option gives the non-controlling shareholder the right to sell its equity stake in the subsidiary for an amount equivalent to a multiple of the income before taxes, interests, depreciation and amortization of the economic group of this subsidiary in the last 12 months prior to the exercise. The exercise period is comprised of the six-month period beginning on May 25, 2021. This liability is measured at fair value using internal assumptions regarding the results of that economic group. The effects of the remeasurement resulted in a gain in financial results of R$533,774 in the nine-month period ended on September 30, 2020 (loss of R$100,220 in the same period of the prior year), as per note 28.

The table below presents the overall classification of financial instruments measured at fair value by measurement hierarchy. For the nine-month period ended on September 30, 2020, there were no changes among the 3 levels of hierarchy.

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 82

| Parent company
| 09.30.20 |  | 12.31.19
| Level 1 |  | Level 2 |  | Total |  | Level 1 |  | Level 2 |  | Total
Financial Assets |  |  |  |  |  |  |  |  |  |  |
Fair value through profit and loss |  |  |  |  |  |  |  |  |  |  |
Savings account and overnight | 573,373 |  | - |  | 573,373 |  | 70,515 |  | - |  | 70,515
Term deposits | - |  | - |  | - |  | 254,583 |  | - |  | 254,583
Bank deposit certificates | - |  | 3,036,570 |  | 3,036,570 |  | - |  | 869,473 |  | 869,473
Financial treasury bills | 311,048 |  | - |  | 311,048 |  | 396,994 |  | - |  | 396,994
Investment funds | 19,937 |  | - |  | 19,937 |  | 18,398 |  | - |  | 18,398
Trade accounts receivable | - |  | 253,787 |  | 253,787 |  | - |  | 225,941 |  | 225,941
Derivatives | - |  | 148,599 |  | 148,599 |  | - |  | 243,731 |  | 243,731
Financial Liabilities |  |  |  |  |  |  |  |  |  |  |
Fair value through profit and loss |  |  |  |  |  |  |  |  |  |  |
Derivatives | - |  | (804,967) |  | (804,967) |  | - |  | (151,725) |  | (151,725)
| 904,358 |  | 2,633,989 |  | 3,538,347 |  | 740,490 |  | 1,187,420 |  | 1,927,910

| Consolidated
| 09.30.20 |  | 12.31.19
| Level 1 |  | Level 2 |  | Level 3 |  | Total |  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Financial Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fair value through other comprehensive income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Credit linked notes | - |  | - |  | - |  | - |  | 19,285 |  | - |  | - |  | 19,285
Stocks | 45,522 |  | - |  | - |  | 45,522 |  | 26,678 |  | - |  | - |  | 26,678
Fair value through profit and loss |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Savings account and overnight | 2,970,751 |  | - |  | - |  | 2,970,751 |  | 689,874 |  | - |  | - |  | 689,874
Term deposits | 56,184 |  | - |  |  |  | 56,184 |  | 374,859 |  | - |  | - |  | 374,859
Bank deposit certificates | - |  | 3,049,149 |  | - |  | 3,049,149 |  | - |  | 879,758 |  | - |  | 879,758
Financial treasury bills | 311,048 |  | - |  | - |  | 311,048 |  | 396,994 |  | - |  | - |  | 396,994
Investment funds | 21,980 |  | - |  | - |  | 21,980 |  | 20,301 |  | - |  | - |  | 20,301
Trade accounts receivable | - |  | 253,787 |  | - |  | 253,787 |  | - |  | 225,941 |  | - |  | 225,941
Derivatives | - |  | 153,644 |  | - |  | 153,644 |  | - |  | 245,315 |  | - |  | 245,315
Financial Liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Fair value through profit and loss |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Derivatives | - |  | (814,715) |  | - |  | (814,715) |  | - |  | (153,615) |  | - |  | (153,615)
Written option– business combination | - |  | - |  | (236,440) |  | (236,440) |  | - |  | - |  | (706,920) |  | (706,920)
| 3,405,485 |  | 2,641,865 |  | (236,440) |  | 5,810,910 |  | 1,527,991 |  | 1,197,399 |  | (706,920) |  | 2,018,470

Except for the items set forth below, the fair value of all other financial instruments is approximate to their book value. The fair value of the bonds set forth below is based in prices observed in active markets, level 1 of the fair value hierarchy, while the debentures are based in level 2 and are measured by discounted cash flows.

|  |  |  | Parent company and Consolidated
|  |  |  |  |  | 09.30.20 |  | 12.31.19
|  | Currency |  | Maturity |  | Book value |  | Fair value |  | Book value |  | Fair value
BRF S.A. |  |  |  |  |  |  |  |  |  |  |  |
BRF SA BRFSBZ 5 7/8 |  | USD |  | 2022 |  | (405,602) |  | (429,191) |  | (435,934) |  | (460,606)
BRF SA BRFSBZ 4 3/4 |  | USD |  | 2024 |  | (1,692,070) |  | (1,789,873) |  | (2,086,169) |  | (2,191,726)
BRF SA BRFSBZ 3.95 |  | USD |  | 2023 |  | (1,325,193) |  | (1,379,877) |  | (1,370,446) |  | (1,427,754)
BRF SA BRFSBZ 2 3/4 |  | EUR |  | 2022 |  | (1,112,379) |  | (1,132,333) |  | (1,492,653) |  | (1,559,476)
BRF SA BRFSBZ 4 7/8 |  | USD |  | 2030 |  | (4,231,591) |  | (4,385,182) |  | (3,022,773) |  | (3,160,573)
BRF SA BRFSBZ 5 3/4 |  | USD |  | 2050 |  | (2,747,341) |  | (2,812,164) |  | - |  | -
Debenture - 1st Issue |  | BRL |  | 2026 |  | (769,746) |  | (794,714) |  | (755,760) |  | (832,213)
Debenture - 2nd Issue |  | BRL |  | 2030 |  | (2,163,951) |  | (2,218,639) |  | - |  | -
Parent company |  |  |  |  |  | (14,447,873) |  | (14,941,973) |  | (9,163,735) |  | (9,632,348)
BRF GmbH |  |  |  |  |  |  |  |  |  |  |  |
BRF SA BRFSBZ 4.35 |  | USD |  | 2026 |  | (2,767,092) |  | (2,912,704) |  | (1,999,509) |  | (2,101,175)
Consolidated |  |  |  |  |  | (17,214,965) |  | (17,854,677) |  | (11,163,244) |  | (11,733,523)

| 25. | SEGMENT INFORMATION

The operating segments are reported consistently with the management reports provided to the main strategic and operational decision makers for assessing the performance of each segment and allocation of resources. The operating segments information are elaborated considering three reportable segments, being: Brazil, International and Other Segments.

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

| » | Poultry: production and sale of whole poultry and in-natura cuts.

| » | Pork and other: production and sale of in-natura cuts.

| » | Processed: production and sale of processed food, frozen and processed products derived from poultry, pork and beef, margarine, vegetables and soybean-based products.

| » | Other sales: sale of flour for food service and others.

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 83

Other segments are comprised of commercialization and development of animal nutrition ingredients, human nutrition, plant nutrition (fertilizers) and health care (health and wellness), as well as commercialization of agricultural products.

The net sales for each reportable operating segment is set forth below:

|  | Consolidated
|  |  |  | 2020 |  |  |  | 2019
Net sales |  | Jul - Sep |  | Jan - Sep |  | Jul - Sep |  | Jan - Sep
Brazil |  |  |  |  |  |  |  |
In-natura |  | 1,251,395 |  | 3,601,927 |  | 1,156,829 |  | 3,396,648
Poultry |  | 907,235 |  | 2,670,960 |  | 923,829 |  | 2,718,133
Pork and other |  | 344,160 |  | 930,967 |  | 233,000 |  | 678,515
Processed |  | 4,032,656 |  | 10,966,468 |  | 3,221,570 |  | 8,996,664
Other sales |  | 7,654 |  | 21,321 |  | 3,774 |  | 11,024
|  | 5,291,705 |  | 14,589,716 |  | 4,382,173 |  | 12,404,336
International |  |  |  |  |  |  |  |
In-natura |  | 3,635,187 |  | 10,651,454 |  | 3,261,118 |  | 9,270,793
Poultry |  | 3,016,452 |  | 8,994,799 |  | 2,923,084 |  | 8,372,167
Pork and other |  | 618,735 |  | 1,656,655 |  | 338,034 |  | 898,626
Processed |  | 589,996 |  | 1,664,171 |  | 543,316 |  | 1,592,295
Other sales |  | 84,187 |  | 216,733 |  | (8,478) |  | 112,236
|  | 4,309,370 |  | 12,532,358 |  | 3,795,956 |  | 10,975,324
Other segments |  | 341,516 |  | 873,508 |  | 281,357 |  | 777,085
|  | 9,942,591 |  | 27,995,582 |  | 8,459,486 |  | 24,156,745

The income (loss) before financial results for each segment is set forth below:

|  | Consolidated
|  |  |  | 2020 |  |  |  | 2019
|  | Jul - Sep |  | Jan - Sep |  | Jul - Sep |  | Jan - Sep
Brazil |  | 566,784 |  | 1,282,928 |  | 727,302 |  | 1,284,235
International |  | 200,302 |  | 868,636 |  | 429,819 |  | 980,955
Other segments |  | 62,496 |  | 122,654 |  | 28,378 |  | 68,907
Sub total |  | 829,582 |  | 2,274,218 |  | 1,185,499 |  | 2,334,097
Corporate |  | (85,505) |  | (388,275) |  | (119,533) |  | (179,892)
|  | 744,077 |  | 1,885,943 |  | 1,065,966 |  | 2,154,205

The items presented above as Corporate refer to relevant events not attributable to the normal course of business neither to the operating segments. The composition of the main effects in the Corporate segment is set forth below:

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 84

|  | Consolidated
|  |  |  | 2020 |  |  |  | 2019
Corporate |  | Jul - Sep |  | Jan - Sep |  | Jul - Sep |  | Jan - Sep
Investigations involving the Company (note 1.2) |  | (4,027) |  | (10,207) |  | (15,850) |  | (58,397)
Agreement - Class Action (note 1.3) |  | - |  | (204,436) |  | - |  | -
Tax and Civil Contingencies |  | (5,350) |  | (69,872) |  | (35,770) |  | (40,845)
Expenses COVID-19 |  | (40,568) |  | (66,828) |  | - |  | -
Results with disposal of businesses |  | (26,943) |  | (26,943) |  | (417) |  | 2,559
Results with disposal of fixed assets |  | (5,544) |  | (11,531) |  | (20,400) |  | 3,661
Expenses with demobilization |  | (5,034) |  | (11,295) |  | (22,929) |  | (37,091)
Arbitration reversal |  | - |  | 14,520 |  | - |  | -
Impairment of investments |  | - |  | (6,763) |  | 1,236 |  | (14,404)
Restructuring plan |  | - |  | (58) |  | 1,419 |  | (15,012)
Other (1) |  | 1,961 |  | 5,138 |  | (26,822) |  | (20,363)
|  | (85,505) |  | (388,275) |  | (119,533) |  | (179,892)

| (1) | In the period from July to September, 2019 it includes the constitution of provision of R$19,045 in favor of the Municipality of Lucas do Rio Verde, arising from the housing incentive program for employees.

No customer individually or in aggregate (economic group) accounted for more than 5% of net sales for the nine-month period ended on September 30, 2020 and 2019.

The goodwill arising from business combinations and the intangible assets with indefinite useful life (trademarks) were allocated to the reportable operating segments, considering the economic benefits generated by such intangible assets. The allocation of these intangible assets is presented below:

| Consolidated
| Goodwill |  | Trademarks |  | Total
| 09.30.20 |  | 12.31.19 |  | 09.30.20 |  | 12.31.19 |  | 09.30.20 |  | 12.31.19
Brazil | 1,151,498 |  | 1,151,498 |  | 982,478 |  | 982,478 |  | 2,133,976 |  | 2,133,976
International | 1,881,786 |  | 1,562,104 |  | 352,768 |  | 339,784 |  | 2,234,554 |  | 1,901,888
| 3,033,284 |  | 2,713,602 |  | 1,335,246 |  | 1,322,262 |  | 4,368,530 |  | 4,035,864

Information related to total assets by reportable segment is not disclosed, as it is not included in the set of information made available to the Company’s administration, which makes investment decisions and determine allocation of resources based on information about the consolidated assets.

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 85

| 26. | NET SALES

| Parent company |  | Consolidated
|  |  | 2020 |  |  |  | 2019 |  |  |  | 2020 |  |  |  | 2019
| Jul - Sep |  | Jan - Sep |  | Jul - Sep |  | Jan - Sep |  | Jul - Sep |  | Jan - Sep |  | Jul - Sep |  | Jan - Sep
Gross sales |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Brazil | 6,512,264 |  | 18,018,393 |  | 5,409,952 |  | 15,361,826 |  | 6,512,264 |  | 18,018,393 |  | 5,409,952 |  | 15,361,894
International | 2,607,278 |  | 7,359,010 |  | 2,661,819 |  | 7,632,039 |  | 4,636,072 |  | 13,440,650 |  | 4,179,103 |  | 11,924,715
Other segments | 364,659 |  | 930,702 |  | 297,416 |  | 855,721 |  | 378,246 |  | 968,825 |  | 303,930 |  | 858,901
| 9,484,201 |  | 26,308,105 |  | 8,369,187 |  | 23,849,586 |  | 11,526,582 |  | 32,427,868 |  | 9,892,985 |  | 28,145,510
Sales deductions |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Brazil | (1,220,558) |  | (3,428,677) |  | (1,027,820) |  | (2,957,599) |  | (1,220,559) |  | (3,428,677) |  | (1,027,779) |  | (2,957,558)
International | (24,632) |  | (73,278) |  | (34,234) |  | (89,854) |  | (326,702) |  | (908,292) |  | (383,147) |  | (949,391)
Other segments | (34,512) |  | (89,197) |  | (25,380) |  | (76,586) |  | (36,730) |  | (95,317) |  | (22,573) |  | (81,816)
| (1,279,702) |  | (3,591,152) |  | (1,087,434) |  | (3,124,039) |  | (1,583,991) |  | (4,432,286) |  | (1,433,499) |  | (3,988,765)
Net sales |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Brazil | 5,291,706 |  | 14,589,716 |  | 4,382,132 |  | 12,404,227 |  | 5,291,705 |  | 14,589,716 |  | 4,382,173 |  | 12,404,336
International | 2,582,646 |  | 7,285,732 |  | 2,627,585 |  | 7,542,185 |  | 4,309,370 |  | 12,532,358 |  | 3,795,956 |  | 10,975,324
Other segments | 330,147 |  | 841,505 |  | 272,036 |  | 779,135 |  | 341,516 |  | 873,508 |  | 281,357 |  | 777,085
| 8,204,499 |  | 22,716,953 |  | 7,281,753 |  | 20,725,547 |  | 9,942,591 |  | 27,995,582 |  | 8,459,486 |  | 24,156,745

| 27. | OTHER OPERATING INCOME (EXPENSES), NET

| Parent company |  | Consolidated
|  |  | 2020 |  |  |  | 2019 |  |  |  | 2020 |  |  |  | 2019
| Jul - Sep |  | Jan - Sep |  | Jul - Sep |  | Jan - Sep |  | Jul - Sep |  | Jan - Sep |  | Jul - Sep |  | Jan - Sep
Recovery of expenses (1) | 83,074 |  | 317,726 |  | 498,477 |  | 1,201,800 |  | 83,114 |  | 318,172 |  | 498,500 |  | 1,203,311
Provision reversal | 1,756 |  | 72,381 |  | 852 |  | 14,932 |  | 1,756 |  | 72,381 |  | 852 |  | 14,937
Scrap sales | 3,072 |  | 8,506 |  | 2,788 |  | 8,653 |  | 3,111 |  | 8,672 |  | 2,849 |  | 9,686
Provision for civil and tax risks (2) | (13,298) |  | (78,569) |  | (35,726) |  | (399,610) |  | (13,719) |  | (79,238) |  | (35,811) |  | (399,729)
Other employees benefits | (6,862) |  | (22,512) |  | (8,358) |  | (23,274) |  | (6,862) |  | (22,512) |  | (8,358) |  | (25,732)
Insurance claims costs | (2,008) |  | (7,485) |  | (3,239) |  | (17,084) |  | (877) |  | (3,394) |  | (360) |  | (15,337)
Net gains (losses) from the disposals of property, plant and equipment | (13,399) |  | (15,778) |  | (13,077) |  | 11,146 |  | (16,870) |  | (24,279) |  | (15,323) |  | 2,925
Employee participation and bonuses | (41,127) |  | (162,526) |  | (86,919) |  | (188,603) |  | (41,678) |  | (159,669) |  | (88,219) |  | (198,674)
Demobilization expenses | (8,705) |  | (14,569) |  | (21,905) |  | (39,092) |  | (8,534) |  | (14,790) |  | (28,599) |  | (46,683)
Expenses with investigations and class action (3) | (3,627) |  | (208,383) |  | (15,492) |  | (50,556) |  | (4,027) |  | (213,178) |  | (16,833) |  | (59,153)
Expected credit losses in other receivables | 32 |  | (3,153) |  | - |  | - |  | 32 |  | (3,125) |  | - |  | -
Other | 2,341 |  | 31,501 |  | (31,567) |  | (56,962) |  | (8,639) |  | 7,767 |  | (19,351) |  | (42,403)
| 1,249 |  | (82,861) |  | 285,834 |  | 461,350 |  | (13,193) |  | (113,193) |  | 289,347 |  | 443,148

| (1) | Includes recovery of taxes in the amount of R$295,593 for the nine-month period ended on September 30, 2020 and R$68,180 for the three-month period ended on September 30,2020, mainly referring to PIS and COFINS taxes on marketing, rebates and benefit expenses. For the three-month period ended on September 30, 2019, includes the effects of the final decision related to the exclusion of ICMS from the PIS and COFINS calculation base of R$467,278 (R$1,163,405 for the nine-month period ended on September 30, 2019).

| (2) | For the nine-month periods ended on September 30, 2019, includes the effects of the tax contingency on ICMS credit in the basic food basket products of R$358,935.

| (3) | Includes provision for class action agreement (note 1.3) in the first quarter of 2020.

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 86

| 28. | FINANCIAL INCOME (EXPENSES), NET

|  |  | Parent company |  | Consolidated
|  |  |  |  | 2020 |  |  |  | 2019 |  |  |  | 2020 |  |  |  | 2019
| Note |  | Jul - Sep |  | Jan - Sep |  | Jul - Sep (1) |  | Jan - Sep (1) |  | Jul - Sep |  | Jan - Sep |  | Jul - Sep (1) |  | Jan - Sep (1)
Financial income |  |  | 59,604 |  | 232,713 |  | 612,077 |  | 1,152,627 |  | 72,702 |  | 267,413 |  | 634,073 |  | 1,194,802
Interest on cash and cash equivalents | 4 |  | 27,069 |  | 80,916 |  | 32,297 |  | 91,989 |  | 34,938 |  | 85,967 |  | 38,218 |  | 107,669
Revenues from marketable securities | 5 |  | 1,707 |  | 23,628 |  | 22,400 |  | 67,042 |  | 6,530 |  | 51,917 |  | 37,981 |  | 92,385
Fair value throught other comprehensive income |  |  | - |  | - |  | - |  | - |  | 84 |  | 538 |  | 182 |  | 505
Fair value throught profit and loss |  |  | 1,588 |  | 7,648 |  | 6,047 |  | 16,291 |  | 1,588 |  | 7,304 |  | 6,271 |  | 16,127
Amortized cost |  |  | 119 |  | 15,980 |  | 16,353 |  | 50,751 |  | 4,858 |  | 44,075 |  | 31,528 |  | 75,753
Interest on recoverable taxes (2) | 9 |  | 18,690 |  | 98,946 |  | 563,050 |  | 982,385 |  | 18,723 |  | 99,063 |  | 563,116 |  | 982,583
Interest on other assets |  |  | 12,138 |  | 29,223 |  | (5,670) |  | 11,211 |  | 12,511 |  | 30,466 |  | (5,242) |  | 12,165
Financial expenses |  |  | (749,766) |  | (1,942,389) |  | (777,125) |  | (2,271,776) |  | (591,666) |  | (1,327,579) |  | (866,442) |  | (2,417,718)
Interest on loans and financing | 15 |  | (447,266) |  | (997,730) |  | (483,591) |  | (1,072,134) |  | (490,955) |  | (1,122,525) |  | (526,019) |  | (1,200,550)
Interest with related parties | 30 |  | (80,833) |  | (262,159) |  | (50,490) |  | (126,560) |  | - |  | - |  | - |  | -
Interest on contingencies (3) | 21 |  | (34,307) |  | (138,471) |  | (68,944) |  | (525,535) |  | (35,182) |  | (141,122) |  | (68,943) |  | (526,379)
Interest on leases | 18 |  | (46,628) |  | (141,889) |  | (44,398) |  | (135,228) |  | (50,829) |  | (154,692) |  | (48,351) |  | (148,058)
Interest on other liabilities |  |  | 4,032 |  | 9,392 |  | (7,247) |  | (33,563) |  | 4,030 |  | 9,414 |  | (7,351) |  | (12,335)
Written option - Business combination (4) |  |  | - |  | - |  | - |  | - |  | 143,421 |  | 533,774 |  | (80,253) |  | (100,220)
Adjustment to present value | 6 e 16 |  | (109,511) |  | (290,979) |  | (80,568) |  | (224,069) |  | (109,760) |  | (291,258) |  | (79,692) |  | (224,784)
Other |  |  | (35,253) |  | (120,553) |  | (41,887) |  | (154,687) |  | (52,391) |  | (161,170) |  | (55,833) |  | (205,392)
Monetary, exchange and derivative results, net |  |  | (544,720) |  | (5,396,236) |  | (931,048) |  | (1,006,398) |  | 82,545 |  | (173,025) |  | (24,320) |  | (101,360)
Exchange rate variation on monetary assets and liabilities |  |  | (605,899) |  | (6,725,955) |  | (993,747) |  | (923,057) |  | 4,420 |  | (1,529,314) |  | (43,283) |  | 39,260
Derivative results |  |  | 61,179 |  | 1,329,719 |  | 62,699 |  | (83,341) |  | 78,125 |  | 1,356,289 |  | 18,963 |  | (140,620)
|  |  | (1,234,882) |  | (7,105,912) |  | (1,096,096) |  | (2,125,547) |  | (436,419) |  | (1,233,191) |  | (256,689) |  | (1,324,276)

| (1) | The comparative period was restated for better disclosure of exchange variations effects and derivative results.

| (2) | For the three-month period ended on September 30, 2019, includes the effects of the final decision related to the exclusion of ICMS from the PIS and COFINS calculation base of R$515,216 (R$881,102 for the nine-month period ended on September 30, 2019).

| (3) | For the nine-month periods ended on September 30, 2019, includes the effects of the tax contingency on ICMS credit in the basic food basket products of R$390,242.

| (4) | Refers to the fair value remeasurement of the written option recorded from business combination (note 24.8). The deterioration of the results of the economic group of the referred subsidiary resulted in a reduction of the liability with the corresponding increase in financial results in the nine-month period ended on September 30, 2020.

| 29. | STATEMENT OF INCOME BY NATURE

The Company discloses its statement of income by function and thus presents below the details by nature:

| Parent company |  | Consolidated
|  |  | 2020 |  |  |  | 2019 |  |  |  | 2020 |  |  |  | 2019
| Jul - Sep |  | Jan - Sep |  | Jul - Sep |  | Jan - Sep |  | Jul - Sep |  | Jan - Sep |  | Jul - Sep |  | Jan - Sep
Costs of sales |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Raw materials and supplies (1) | 4,498,527 |  | 12,637,782 |  | 3,806,947 |  | 11,013,535 |  | 5,417,106 |  | 15,140,087 |  | 4,454,981 |  | 12,679,646
Salaries and employees benefits | 1,041,424 |  | 2,955,676 |  | 931,189 |  | 2,690,968 |  | 1,060,402 |  | 3,007,577 |  | 944,832 |  | 2,730,250
Depreciation | 424,617 |  | 1,259,721 |  | 412,332 |  | 1,245,554 |  | 466,876 |  | 1,379,928 |  | 443,076 |  | 1,336,559
Amortization | 24,739 |  | 51,128 |  | 21,156 |  | 57,385 |  | 40,500 |  | 98,083 |  | 34,898 |  | 97,718
Others | 632,010 |  | 1,728,805 |  | 539,769 |  | 1,623,621 |  | 613,249 |  | 1,793,580 |  | 486,106 |  | 1,608,260
| 6,621,317 |  | 18,633,112 |  | 5,711,393 |  | 16,631,063 |  | 7,598,133 |  | 21,419,255 |  | 6,363,893 |  | 18,452,433
Sales expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Indirect and direct logistics expenses | 525,863 |  | 1,588,941 |  | 470,344 |  | 1,338,022 |  | 619,365 |  | 1,827,774 |  | 534,130 |  | 1,536,511
Marketing | 102,510 |  | 306,182 |  | 69,147 |  | 290,787 |  | 137,473 |  | 427,706 |  | 44,168 |  | 381,616
Salaries and employees benefits | 276,608 |  | 793,694 |  | 302,379 |  | 810,981 |  | 363,920 |  | 1,035,654 |  | 367,492 |  | 999,442
Depreciation | 37,073 |  | 105,694 |  | 27,880 |  | 77,741 |  | 49,703 |  | 160,816 |  | 48,122 |  | 137,917
Amortization | 20,194 |  | 49,232 |  | 18,298 |  | 50,778 |  | 27,454 |  | 70,166 |  | 23,891 |  | 67,216
Others | 97,474 |  | 306,327 |  | 100,044 |  | 307,719 |  | 168,554 |  | 489,576 |  | 142,492 |  | 429,665
| 1,059,722 |  | 3,150,070 |  | 988,092 |  | 2,876,028 |  | 1,366,469 |  | 4,011,692 |  | 1,160,295 |  | 3,552,367
Administrative expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Salaries and employees benefits | 54,782 |  | 145,502 |  | 45,059 |  | 130,341 |  | 91,931 |  | 247,770 |  | 72,304 |  | 215,186
Fees | 12,387 |  | 41,600 |  | 10,115 |  | 24,330 |  | 12,387 |  | 41,600 |  | 10,115 |  | 24,330
Depreciation | 8,547 |  | 23,030 |  | 4,208 |  | 12,906 |  | 13,917 |  | 35,544 |  | 6,157 |  | 18,462
Amortization | 12,168 |  | 26,413 |  | 4,382 |  | 15,663 |  | 13,255 |  | 28,968 |  | 5,901 |  | 21,339
Others | 62,916 |  | 124,145 |  | 31,321 |  | 89,278 |  | 85,858 |  | 196,491 |  | 47,252 |  | 139,798
| 150,800 |  | 360,690 |  | 95,085 |  | 272,518 |  | 217,348 |  | 550,373 |  | 141,729 |  | 419,115

| (1) | Includes abnormal losses in the production chain.

The Company incurred in expenses with internal research and development of new products of R$48,228 for the nine-month period ended on September 30, 2020 in the parent company and in the consolidated (R$47,786 in the parent company and in the consolidated in the same period of the previous year) and R$17,041 in the parent company and in the consolidated for the three-month period ended on September 30, 2020 (R$16,270 in the parent company and in the consolidated in the same period of the previous year).

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 87

| 30. | RELATED PARTIES – PARENT COMPANY

In the normal course of business, rights and obligations arise between related parties, resulting from transactions of sale and purchase of products, as well as from financial operations.

The Company holds a Related Parties Transactions Policy, which was reviewed and approved by the Board of Directors and applies to all subsidiaries of the group.

The policy mentioned above provides the conditions that must be observed for the realization of a transaction between related parties, as well as establishes approval hierarchies according to the value and nature of the transactions involved. The policy also foresees situations of conflict of interests and how they must be conducted.

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 88

| 30.1 | Transactions and balances

The balances of the transactions with related parties registered in the statement of financial position of the Parent Company are as follows:

| Accounts receivable |  | Dividends and interest on the shareholders' equity receivable |  | Loans |  | Trade accounts payable |  | Other rights |  | Advances and other liabilities
| 09.30.20 |  | 12.31.19 |  | 09.30.20 |  | 12.31.19 |  | 09.30.20 |  | 12.31.19 |  | 09.30.20 |  | 12.31.19 |  | 09.30.20 |  | 12.31.19 |  | 09.30.20 |  | 12.31.19
Al-Wafi Food Products Factory LLC | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | 30 |  | - |  | (927)
Banvit | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | 337 |  | 1,094 |  | - |  | -
BRF Energia S.A. | - |  | - |  | - |  | - |  | - |  | - |  | (12,050) |  | (6,376) |  | - |  | - |  | - |  | -
BRF Foods GmbH | 830,261 |  | 833,062 |  | - |  | - |  | - |  | - |  | - |  | - |  | 143 |  | 1,296 |  | (2,425) |  | (1,733)
BRF Foods LLC | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | 522 |  | 466 |  | (5) |  | (2)
BRF Global GmbH | 4,639,420 |  | 3,843,949 |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | (5,800,840) | (1) | (4,049,636)
BRF GmbH | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | 997 |  | 1,520 |  | (1,913,854) | (2) | (1,311,123)
BRF Pet S.A. | 4,685 |  | 800 |  | - |  | - |  | - |  | - |  | (37) |  | (16) |  | 330 |  | 167 |  | - |  | -
Establecimiento Levino Zaccardi y Cia. S.A. | - |  | - |  | - |  | - |  | 339 |  | 234 |  | - |  | - |  |  |  |  |  | - |  | -
Federal Foods Qatar | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | (141)
FFM Further | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | 70 |  | - |  | -
Highline International Ltd. | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | (7,351)
One Foods Holdings | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | 5,662 |  | - |  | -
Perdigão International Ltd. | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | (1,151,079) | (1) | (905,550)
PSA Laboratório Veterinário Ltda. | - |  | - |  | 200 |  | 396 |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | -
Sadia Alimentos S.A. | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | (2,683) |  | (11,159)
Sadia Chile S.A. | 153,336 |  | 99,095 |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | -
Sadia Uruguay S.A. | 8,673 |  | 3,096 |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | (38,356) |  | (36,598)
VIP S.A. Empreendimentos e Partic. Imob. | - |  | - |  | 22 |  | 22 |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | -
Total | 5,636,375 |  | 4,780,002 |  | 222 |  | 418 |  | 339 |  | 234 |  | (12,087) |  | (6,392) |  | 2,329 |  | 10,305 |  | (8,909,242) |  | (6,324,220)

| (1) | The amount corresponds to export pre-payments, usual operation between the productive units in Brazil with the wholly-owned subsidiaries that operate as trading companies in the international market.

| (2) | Exercising its power as parent Company, BRF S.A. performs reimbursement to certain subsidiaries for losses incurred in the normal course of their operations, generating liabilities recorded as Other Obligations with Related Parties.

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 89

| Revenue |  | Financial results, net |  | Purchases
|  |  | 2020 |  |  |  | 2019 |  |  |  | 2020 |  |  |  | 2019 |  |  |  | 2020 |  |  |  | 2019
| Jul - Sep |  | Jan - Sep |  | Jul - Sep |  | Jan - Sep |  | Jul - Sep |  | Jan - Sep |  | Jul - Sep |  | Jan - Sep |  | Jul - Sep |  | Jan - Sep |  | Jul - Sep |  | Jan - Sep
Avex S.A. | - |  | - |  | - |  | 1,439 |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | -
BRF Energia S.A. | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | (55,791) |  | (187,251) |  | (53,748) |  | (170,939)
BRF Foods GmbH | 45,742 |  | 139,104 |  | 39,641 |  | 158,138 |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | -
BRF Global GmbH | 2,721,865 |  | 8,029,171 |  | 2,495,891 |  | 7,099,674 |  | (63,810) |  | (211,716) |  | (35,667) |  | (83,717) |  | - |  | - |  | - |  | -
BRF Pet S.A. | 1,650 |  | 4,137 |  | 1,087 |  | 1,837 |  | - |  | - |  | - |  | - |  | (4) |  | (62) |  | - |  | (26)
Campo Austral | - |  | - |  | - |  | 1,448 |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | -
Establecimiento Levino Zaccardi y Cia. S.A. | - |  | - |  | - |  | - |  | 4 |  | 10 |  | - |  | - |  | - |  | - |  | - |  | -
Perdigão International Ltd. | - |  | - |  | - |  | - |  | (16,498) |  | (48,377) |  | (13,288) |  | (38,608) |  | - |  | - |  | - |  | -
Sadia Alimentos S.A. | - |  | - |  | - |  | - |  | (44) |  | (405) |  | (249) |  | (980) |  | - |  | - |  | - |  | -
Sadia Chile S.A. | 31,762 |  | 111,280 |  | 21,579 |  | 51,749 |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | (46)
Sadia Uruguay S.A. | 14,790 |  | 35,504 |  | 10,925 |  | 30,917 |  | (485) |  | (1,671) |  | (1,286) |  | (3,255) |  | - |  | - |  | - |  | -
Total | 2,815,809 |  | 8,319,196 |  | 2,569,123 |  | 7,345,202 |  | (80,833) |  | (262,159) |  | (50,490) |  | (126,560) |  | (55,795) |  | (187,313) |  | (53,748) |  | (171,011)

The subsidiaries of the Company enter into loan agreements pursuant its cash management strategy. As of September 30, 2020, the balance of these transactions was R$2,268,425 (R$1,808,320 as of December 31, 2019) with a weighted average rate of 4.43% p.a. (4.43% p.a. as of December 31, 2019).

| 30.2 | Other Related Parties

The Company leased properties owned by BRF Previdência, for the nine-month period ended on September 30, 2020, the total amount paid as rent was R$14,646 (R$13,650 in the same period of the previous year) for the three-month ended on September 30, 2020, the total amount paid as rent was of R$4,882 (R$5,188 in the same period of the previous year).

Due to the acquisition of biodigesters from Instituto Sadia de Sustentabilidade, the Company has an outstanding payable to this entity of R$1,509 on September 30, 2020 (R$3,053 as of December 31, 2019) included in Other Liabilities.

| 30.3 | Granted guarantees

The Company recorded a liability in the amount of R$417 (R$844 as of December 31, 2019) related to the fair value of the guarantees offered to BNDES concerning a loan made by Instituto Sadia de Sustentabilidade.

The Company is the guarantor of loans related to a special program that aims the local development and were obtained by 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 through this program. The value of these guarantees on September 30, 2020 totaled R$4,440 (R$12,949 as of December 31, 2019).

| 30.4 | Management remuneration

The total remuneration and benefits expense with board members, statutory directors and the head of internal audit are set forth below:

| Consolidated
|  |  | 2020 |  |  |  | 2019
| Jul - Sep |  | Jan - Sep |  | Jul - Sep |  | Jan - Sep
Salary and profit sharing | 14,064 |  | 49,669 |  | 16,741 |  | 39,463
Short term benefits (1) | 680 |  | 2,291 |  | 56 |  | 187
Private pension | 304 |  | 1,200 |  | 238 |  | 540
Post-employment benefits | - |  | - |  | 78 |  | 125
Termination benefits | 2,104 |  | 6,507 |  | 3,403 |  | 11,572
Share-based payment | 5,561 |  | 13,955 |  | 4,205 |  | 8,188
| 22,713 |  | 73,622 |  | 24,721 |  | 60,075

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

In addition, the executive officers (non-statutory) received among remuneration and benefits the total amount of R$15,739 for the nine-month period ended on September 30, 2020 (R$26,731 in the same period of the previous year)

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 90

and R$6,304 for the three-month period ended on September 30, 2020 (R$3,680 in the same period of the previous year).

| 31. | COMMITMENTS

In the normal course of the business, the Company enters into agreements with third parties for the purchase of raw material, mainly corn and soymeal. The agreed prices in these agreements can be fixed or variable. The Company also enters into other agreements, such as electricity supply, packaging supplies, construction of buildings and others for the supply of its manufacturing activities. The firm commitments schedule is set forth below:

Parent company |  | Consolidated
|  | 09.30.20 |  | 09.30.20
Current |  | 5,195,067 |  | 5,520,167
Non-current |  | 1,647,815 |  | 1,750,266
October to december 2021 |  | 247,673 |  | 266,819
2022 |  | 339,239 |  | 388,039
2023 |  | 249,168 |  | 268,897
2024 |  | 235,490 |  | 242,878
2025 onwards |  | 576,245 |  | 583,633
|  | 6,842,882 |  | 7,270,433

| 32. | TRANSACTIONS THAT DO NOT INVOLVE CASH

The following transactions did not involve cash or cash equivalents during the nine-month period ended on September 30, 2020:

| (i) | Capitalized loan interest: as referred in note 13.

| (ii) | Addition of lease by right-of-use assets and respective lease liability: in the nine-month period ended on September 30, 2020, amounted to R$202,832 in the parent company and R$268,520 in the consolidated (R$2,194,447 in the parent company and R$2,422,759 in the consolidated in the same period of the previous year) and in the three-month period ended on September 30, 2020, amounted to R$31,163 in the parent company and R$40,920 in the consolidated (R$21,796 in the parent company and R$22,260 in the consolidated in the same period of the previous year).

| 33. | EVENTS AFTER THE REPORTING DATE

| 33.1 | Additional issuance of Senior Unsecured Notes

On October 26, 2020 BRF S.A. made an additional offer of senior notes in the aggregate amount equivalent to R$1,689,840 (USD300,000), at 98.242% of the principal amount, under the same indenture described in note 15.3, with due date on September 21, 2050, and interest rate of 5.750% per year which is payable semi-annually. The Company incurred in issuance expenses related to commissions and other costs, which, together with the issuance discount, will be recognized on the statement of income over the term of the notes according to the effective interest rate method.

The Company will use the proceeds for general corporate purposes, which may include the payment of the other outstanding loans.

| 33.2 | Revolving credit facility

On October 28, 2020 the Company retained an additional revolving credit facility before Banco do Brasil, up to the limit of R$1,500,000, for the next three years. The referred credit facility can be withdrawn totally or partially, at the Company’s will, whenever necessary.

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 91

| 33.3 | Prepayment of credit facilities

On October 29, 2020 the Company prepaid, with its own resources, loan agreements with financial institutions in Brazil, which would mature between March 2021 and March 2022, in the amount of R$1,970,437.

A part of these loans was designated as cash flow hedge object, for which the instruments are interest rate swap derivatives (note 24.4.1). The amount registered in the hedge accounting reserves, in other comprehensive income, will be immediately reclassified to the statement of income at the settlement of the object.

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 92

| 34. | APPROVAL OF THE INTERIM FINANCIAL INFORMATION

The interim financial information was approved and the issuance authorized by the Board of Directors on November 9, 2020.

BOARD OF DIRECTORS |
Chairman (Independent) | Pedro Pullen Parente
Vice-Chairman (Independent) | Augusto Marques da Cruz Filho
Independent Member | Dan Ioschpe
Independent Member | Flavia Buarque de Almeida
Independent Member | Flavia Maria Bittencourt
Non-Independent Member | Ivandré Motiel da Silva
Independent Member | José Luiz Osório de Almeida Filho
Independent Member | Luiz Fernando Furlan
Independent Member | Marcelo Feriozzi Bacci
Independent Member | Roberto Rodrigues
FISCAL COUNCIL |
Chairman | Attílio Guaspari
Member | Maria Paula Soares Aranha
Member | André Vicentini
AUDIT AND INTEGRITY COMMITTEE |
Comittee Coordinator (Independent) | Augusto Marques da Cruz Filho
Non-Independent Member | Ivandré Motiel da Silva
Independent Member | Marcelo Feriozzi Bacci
External Member | Valmir Pedro Rossi
External Member | Jerônimo Antunes
BOARD OF EXECUTIVE OFFICERS (1) |
Global Chief Executive Officer | Lorival Nogueira Luz Júnior
Vice-President of Finance and Investor Relations | Carlos Alberto Bezerra de Moura
Vice-President of Operations and Procurement Officer | Vinícius Guimarães Barbosa
Vice-President of Commercial Brazil Market | Sidney Rogério Manzaro
Vice-President of Human Resources and Shared Services | Alessandro Rosa Bonorino
Vice-President of Quality and Sustainability | Neil Hamilton dos Guimarães Peixoto Jr.
Vice-President of Sales & Operations Planning and Supply Chain | Leonardo Campo Dallorto
(1) On October 9, 2020, Mr. Rubens Fernandes Pereira resigned as Vice-President of Strategy, Managing and Innovation. Temporarily, the organizational structures within the scope of Strategy, Managing and Innovation will be distributed to the other members of the Executive Committee of the Company.
Marcos Roberto Badollato | Joloir Nieblas Cavichini
Accounting Director | Accountant – CRC 1SP257406/O-5

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 93

COMENTARY ABOUT THE COMPANY PROJECTIONS BEHAVIOUR

In the twelve-month period ended December 31, 2019, Company's net leverage, as measured by the Net Debt / Adjusted EBITDA ratio, reached 2.50x.

The projections initially disclosed on June 29, 2018 for the fiscal year ending December 31, 2019 were replaced on February 7, 2019, on June 3, 2019, on August 9, 2019 and finally on November 8, 2019. Following the completion of the Monetization Plan, the Company revised the net leverage guidance indicator to approximately 2.75X at the end of 2019 and maintained its guidance of approximately 2.65x for 2020. On March 3, 2020 the Company revised the net leverage guidance to a range between 2.35 - 2.75x for the year 2020.

BREAKDOWN OF THE CAPITAL BY OWNER (NOT REVIEWED)

The shareholding position of the shareholders holders of more than 5% of the voting stock, management, members of the Board of Directors is presented below:

|  | 09.30.20 |  | 12.31.19
Shareholders |  | Quantity |  | % |  | Quantity |  | %
Major shareholders |  |  |  |  |  |  |  |
Fundação Petrobras de Seguridade Social - Petros (1) |  | 92,716,266 |  | 11.41 |  | 92,716,266 |  | 11.41
Caixa de Previd. dos Func. do Banco do Brasil (1) |  | 75,048,452 |  | 9.24 |  | 76,974,752 |  | 9.47
Kapitalo Investimentos Ltda. |  | 40,760,522 |  | 5.02 |  | - |  | -
Management |  |  |  |  |  |  |  |
Board of Directors |  | 6,857,067 |  | 0.84 |  | 6,474,420 |  | 0.80
Executives |  | 619,724 |  | 0.08 |  | 236,338 |  | 0.03
Treasury shares |  | 4,766,084 |  | 0.59 |  | 713,446 |  | 0.09
Other |  | 591,705,131 |  | 72.82 |  | 635,358,024 |  | 78.20
|  | 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.

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 94

INDEPENDENT AUDITOR’S 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 September 30, 2020, which comprises the statement of financial position as of September 30, 2020 and the respective statements of income (loss) and comprehensive income (loss) for the three and nine-month period then ended and changes in equity and cash flows for the nine-month period then ended, including the explanatory notes.

The Company's management is responsible for the preparation of this individual and consolidated interim financial information in accordance with Technical Pronouncement CPC 21 (R1) - Demonstração Intermediária 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 Comissão de Valores Mobiliários - CVM, applicable to the preparation of Quarterly Information Form - ITR. Our responsibility is to express a conclusion on this interim financial information based on our review.

Scope of review

We conducted our review in accordance with the Brazilian and International standards on review engagements of interim financial information (NBC TR 2410 - Revisão de Informações Intermediárias Executada pelo Auditor da Entidade and ISRE 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively). A review of interim financial information consists of making inquiries, primarily of persons responsible for 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 auditing standards and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion on the individual and consolidated interim financial information

Based on our review, nothing has come to our attention that causes us to believe that the accompanying individual and consolidated interim financial information included in the Quarterly Information Form 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 Form - ITR, and presented in accordance with the standards issued by the Comissão de Valores Mobiliários - CVM.

Emphasis of matter

We draw attention to explanatory note 1.2 to the individual and consolidated interim financial information, which describe the investigations involving the Company, as well as their current and potential developments. In the current stage of the investigations, it is not possible to determine the potential financial and non-financial impacts on the Company resulting from them and of their potential developments and, consequently, to record potential losses which could have a material adverse effect on the Company´s financial position, results of operations and cash flows in the future. Our conclusion is unmodified in respect of this matter.

Other matters

Statements of Value Added

The individual and consolidated interim financial information, related to statements of value added for the nine-month period ended September 30, 2020, 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 Form - ITR of the Company. In order to form our conclusion, 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 – Demonstração do Valor Adicionado (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, consistent with the individual and consolidated interim financial information taken as a whole.

São Paulo, November 9, 2020

KPMG Auditores Independentes

CRC 2SP014428/O-6

Original report in Portuguese signed by

Fabian Junqueira Sousa

Accountant CRC 1SP235639/O-0

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 95

OPINION OF THE AUDIT AND INTEGRITY COMMITTEE

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

| (i) | the interim financial information (parent company and consolidated) for the nine-month period ended on September 30, 2020;

| (ii) | the Management Report; and

| (iii) | the review report issued without modification by KPMG Auditores Independentes.

Based on the documents reviewed and on the explanations provided, the members of the Audit and Integrity Committee, undersigned, issued an opinion for the approval of the interim financial information for the nine-month period ended on September 30,2020.

São Paulo, November 9, 2020.

Augusto Marques da Cruz Filho

Coordinator (Independent)

Ivandré Motiel da Silva

Non-Independent member

Marcelo Feriozzi Bacci

Independent member

Jerônimo Antunes

External member

Valmir Pedro Rossi

External member

BRF S.A. | INTERIM FINANCIAL INFORMATION - September 30, 2020 | 96

STATEMENT OF EXECUTIVE BOARD ON THE INTERIM FINANCIAL INFORMATION AND INDEPENDENT AUDITOR’S REPORT

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 interim financial information for the nine-month period ended on September 30, 2020, and

| (ii) | reviewed, discussed and agreed with conclusions expressed in the review report issued by KPMG Auditores Independentes for the Company's interim financial information for the nine-month period ended on September 30, 2020.

São Paulo, November 9, 2020.

Lorival Nogueira Luz Júnior

Global Chief Executive Officer

Carlos Alberto Bezerra de Moura

Vice President of Finance and Investor Relations

Vinícius Guimarães Barbosa

Vice-President of Operations and Procurement Officer

Sidney Rogério Manzaro

Vice-President of Commercial Brazil Market

Alessandro Rosa Bonorino

Vice-President of Human Resources and Shared Services

Neil Hamilton dos Guimarães Peixoto Jr.

Vice-President of Quality and Sustainability

Leonardo Campo Dallorto

Vice-President of Sales & Operations Planning and Supply Chain

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