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COMPANY’S OPERATIONS (Tables)
 9 Months Ended
Sep. 30, 2021
Schedule of equity interest

Schedule of equity interest

              % equity interest
Entity     Main activity   Country (1)   09.30.21   12.31.20
BRF GmbH     Holding   Austria   100.00    100.00
BRF Foods LLC (g)   Import, industrialization and commercialization of products   Russia   99.99    99.90
BRF Global Company Nigeria Ltd.     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.     Marketing and logistics services   Nigeria   1.00   1.00
BRF Global GmbH     Holding and trading   Austria   100.00    100.00
BRF Foods LLC (h)   Import, industrialization and commercialization of products   Russia   0.01   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
Eclipse Holding Cöoperatief U.A.     Holding   The Netherlands   99.99    99.99
Buenos Aires Fortune S.A.     Holding   Argentina   4.36   4.36
Eclipse Latam Holdings     Holding   Spain   100.00    100.00
Buenos Aires Fortune S.A.     Holding   Argentina   95.64    95.64
Perdigão Europe Lda.     Import, export of products and administrative services   Portugal   100.00    100.00
Perdigão International Ltd. (d)   Import and export of products   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
Wellax Food Logistics C.P.A.S.U. Lda.     Import, commercialization of products and administrative services   Portugal   100.00    100.00
BRF Austria GmbH (o)   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     Import and commercialization of products   Saudi Arabia   100.00    100.00
Joody Al Sharqiya Food Production Factory LLC (b)   Import and commercialization of products   Saudi Arabia   100.00   - 
BRF Al Yasra Food K.S.C.C. ("BRF AFC") (c)   Import, commercialization and distribution of products   Kuwait   100.00    75.00
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
FFQ GmbH (e)   Industrialization, import and commercialization of products   Austria    -     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 (f)   Industrialization of grains and animal feed   Romania    -    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 (f)   Industrialization of grains and animal feed   Romania    -     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   99.99    99.99
BRF Energia S.A.     Commercialization of eletric energy   Brazil   100.00    100.00
BRF Pet S.A.     Industrialization, commercialization and distribution of feed and nutrients for animals   Brazil   100.00    100.00
Affinity Petcare Brasil Participações Ltda. (n)   Holding   Brazil   100.00    - 
Mogiana Alimentos S.A. (l)   Manufacturing, distribution and sale of Pet Food products   Brazil   50.00    - 
Gewinner Participações Ltda. (j)   Industrialization, distribution and sale of feed and nutrients for animals   Brazil   100.00    - 
Hecosul Alimentos Ltda. (j)   Manufacturing and sale of animal feed   Brazil   100.00    - 
Hercosul Distribuição Ltda. (j)   Import, export, wholesale and retail sale of food products for animals   Brazil   100.00    - 
Hercosul Soluções em Transportes Ltda. (j)   Road freight   Brazil   100.00    - 
Hercosul International S.R.L. (j)   Manufacturing, export, import and sale of feed and nutrients for animals   Paraguay   99.00    - 
Paraguassu Participações S.A. (m)   Holding   Brazil   100.00    - 
Mogiana Alimentos S.A. (l)   Manufacturing, distribution and sale of Pet Food products   Brazil   50.00    - 
Hercosul International S.R.L. (k)   Manufacturing, export, import and sale of feed and nutrients for animals   Paraguay   1.00    - 
PP-BIO Administração de bem próprio S.A. (i)   Management of assets   Brazil    -     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
Sadia Chile S.A.     Import, export and commercialization of products   Chile   60.00    60.00
Sadia International Ltd. (l)   Import and commercialization of products   Cayman Island    -     100.00
Sadia Uruguay S.A.     Import and commercialization of products   Uruguay   100.00    100.00
Sadia Alimentos S.A.     Holding   Argentina   56.90    56.90
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   0.01   0.01
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 January 18, 2021, 100% of the capital stock of Joody Al Sharqiya Food Production Factory LLC was acquired (note 1.2.1).
(c)On March 9, 2021, the minority stake on BRF AFC was acquired, as described below.
(d)On March 24, 2021, the subsidiary Perdigão International Ltd. was dissolved.
(e)On March 30, 2021, the subsidiary FFQ GmbH was dissolved.
(f)On May 4, 2021 the sale of shares held in Banvit Foods SRL was concluded, as described below.
(g)On May 31, 2021, BRF GmbH purchased additional 0.09% interest in BRF Food LLC from BRF Global GmbH.
(h)On May 31, 2021, BRF Global GmbH sold 0.09% interest in BRF Food LLC to BRF GmbH.
(i)On July 30, 2021, BRF S.A. sold all the shares held in PP-BIO Administração de bem próprio S.A.
(j)On August 02, 2021, 99% of the capital stock of Hercosul International S.R.L. was acquired by BRF Pet S.A., as per note 1.2.2
(k)On August 02, 2021, 1% of the capital stock of Hercosul International S.R.L. was acquired by BRF S.A., as per note 1.2.2
(l)On August 19, 2021, the subsidiary Sadia International Ltd. was dissolved.
(m)On September 01, 2021, Paraguassu Participações S.A. was acquired by BRF Pet S.A., as per note 1.2.3
(n)On September 01, 2021, Affinity Petcare Brasil Participações Ltda. was acquired by BRF Pet S.A., as per note 1.2.3
(o)On October 21, 2021 it was approved the merger of BRF Austria GmbH into BRF GmbH retroactively to 01 January 2021 according to the Austrian law.
The Company's current best estimate of the fair value of the assets and liabilities is presented below and reflected in the Company's condensed consolidated interim financial information:

The fair value of the acquired assets and assumed liabilities in the business combination is presented below:

    Fair value at the acquisition date
Assets    
Cash and cash equivalents    408
Inventories    832
Advances    232
Property, plant and equipment, net   30,128
Total   31,600
Liabilities    
Trade accounts payable   1,420
Taxes payable    550
Employee benefits    286
Other current liabilities    100
Total   2,356
     
Net assets acquired   29,244
     
Fair value of consideration transferred   41,620
     

Goodwill

   12,376

 

 

1.2.2.   Hercosul Group

On August 2, 2021 the Company concluded the acquisition of 100% of the capital stock of the companies that compose the Hercosul Group, after with the fulfillment of the conditions precedent. From this date, BRF Pet S.A. (“BRF Pet”) became owner of 100% of Gewinner Participações Ltda. and 99% of Hercosul International S.R.L. (“Hercosul International”) and BRF S.A. became owner of 1% of Hercosul International.

The initial fair value of the consideration transferred was of R$794,535 of which R$675,355 was paid in cash and R$119,180 will be paid in the next 4 years. The amount payable is subject to interest and was recorded as other liabilities, with subsequent changes recorded as financial expenses. According to conditions established in the acquisition contract, which are common to transactions of this nature, the value of the consideration may be adjusted based on the net debt, working capital and contingent assets of the Hercosul Group and for which the Company has used its best estimate at the disclosure date of this condensed consolidated interim financial information. There is no maximum amount defined for the price adjustment.

The Company incurred in expenses with advisors, lawyers and other related to the acquisition and integration of Hercosul Group in the amount of R$14,335 for the nine-month period ended on September 30, 2021, which were recognized under administrative expenses.

The preliminary goodwill of R$766,183 recognized in the acquisition consists mainly of the value of the synergies expected from the combination of the operations of BRF Pet, Hercosul Group and Mogiana Group and the value of the acquired intangibles, including brands, which reinforce BRF's presence in the pet food sector. The results, intangible assets with indefinite useful life and goodwill arising from this business combination are presented in Other segments (note 24).

Due to the size and complexity of the Hercosul Group operations, at the disclosure date of this condensed interim financial information, the evaluation by an independent party of the fair value of the assets acquired and liabilities assumed is in progress. The Company's current best estimate of the fair value of the assets and liabilities is presented below and reflected in the Company's condensed consolidated interim financial information:

         
    Fair value at the acquisition date
    Gewinner Participações
Consolidated		   Hercosul International
Assets        
Cash and cash equivalents   17,743   4,402
Trade and other receivables   40,838   8,475
Inventories   34,355   9,623
Recoverable taxes   15,771   4,078
Advances   29,103    -
Property, plant and equipment, net   23,829   59,135
Intangible assets    647    393
Other assets     773   2,805
Total   163,059   88,911
Liabilities        
Social and Labor Obligations   6,681    200
Trade accounts payable   66,760   8,320
Taxes payable   14,879    200
Loans and borrowings   65,825   29,555
Other liabilities   10,720   20,478
Total   164,865   58,753
         
Net assets acquired   (1,806)   30,158
         
Fair value of consideration transferred   726,186   68,349
         
Preliminary goodwill   727,992   38,191
The Company's current best estimate of the fair value of the assets and liabilities is presented below and reflected in the Company's condensed consolidated interim financial information:

Due to the size and complexity of the Hercosul Group operations, at the disclosure date of this condensed interim financial information, the evaluation by an independent party of the fair value of the assets acquired and liabilities assumed is in progress. The Company's current best estimate of the fair value of the assets and liabilities is presented below and reflected in the Company's condensed consolidated interim financial information:

         
    Fair value at the acquisition date
    Gewinner Participações
Consolidated		   Hercosul International
Assets        
Cash and cash equivalents   17,743   4,402
Trade and other receivables   40,838   8,475
Inventories   34,355   9,623
Recoverable taxes   15,771   4,078
Advances   29,103    -
Property, plant and equipment, net   23,829   59,135
Intangible assets    647    393
Other assets     773   2,805
Total   163,059   88,911
Liabilities        
Social and Labor Obligations   6,681    200
Trade accounts payable   66,760   8,320
Taxes payable   14,879    200
Loans and borrowings   65,825   29,555
Other liabilities   10,720   20,478
Total   164,865   58,753
         
Net assets acquired   (1,806)   30,158
         
Fair value of consideration transferred   726,186   68,349
         
Preliminary goodwill   727,992   38,191
Due to the size and complexity of the Mogiana Group operations, at the disclosure date of this condensed interim financial information, the evaluation by an independent party of the fair value of the assets acquired and liabilities assumed is in progress. The Company's current best estimate of the fair value of the assets and liabilities is presented below and reflected in the Company's condensed consolidated interim financial information:

Due to the size and complexity of the Mogiana Group operations, at the disclosure date of this condensed interim financial information, the evaluation by an independent party of the fair value of the assets acquired and liabilities assumed is in progress. The Company's current best estimate of the fair value of the assets and liabilities is presented below and reflected in the Company's condensed consolidated interim financial information:

 

Mogiana Group Combined   Fair value at the acquisition date
Assets    
Cash and cash equivalents    938
Marketable securities   29,842
Trade and other receivables   61,184
Inventories   55,334
Recoverable taxes   29,020
Property, plant and equipment, net   101,618
Intangible assets   1,064
Other assets    5,500
Total   284,500
Liabilities    
Trade accounts payable   55,838
Loans and borrowings   22,734
Lease liability   11,147
Taxes payable   10,438
Labor Obligations   6,296
Contingencies   8,363
Employee benefits   2,081
Deferred Taxes    750
Other liabilities   14,506
Total   132,153
     
Net assets acquired   152,347
     
Fair value of consideration transferred   435,773
     
Preliminary goodwill   283,426
Due to the pandemic, the Company has incurred in direct expenditures, such as transportation, personnel, prevention, control and donations, which are presented in the statement of income (loss) within the following line items

Due to the pandemic, the Company has incurred in direct expenditures, such as transportation, personnel, prevention, control and donations, which are presented in the statement of income (loss) within the following line items:

                 
        2021       2020
    Jul - Sep   Jan - Sep   Jul - Sep   Jan - Sep
Cost of sales (1)   (41,391)    (163,047)   (99,019)    (273,308)
Selling expenses   (27,315)   (51,405)   (2,241)   (48,558)
General and administrative expenses   (3,714)   (20,661)   (43,911)   (69,976)
Total expense   (72,420)    (235,113)    (145,171)    (391,842)
The main differences between these condensed consolidated interim financial information and those filed with the CVM, resulting from this event, are disclosed below.

The Company is subject to the reporting requirements established by the Brazilian Corporation Law and the regulations of the Securities and Exchange Commission of Brazil (Comissão de Valores Mobiliários, or “CVM”). The liability of this class action lawsuit was not recognized in the financial statements filed with the CVM for the year ended December 31, 2019, which were filed on March 3, 2020. Therefore, the class action lawsuit was recognized in the interim financial information filed with the CVM for the nine months ended September 30, 2020. The main differences between these condensed consolidated interim financial information and those filed with the CVM, resulting from this event, are disclosed below.

 

    As filed with the CVM Adjustment for class action settlement As filed with the SEC Corresponding notes
    09.30.20 09.30.20 09.30.20 09.30.20
Statement of income (loss)          
Other operating income (expenses), net    (113,193)  204,436  91,243  24 and 26 
Income taxes    (165,146)   (69,508)  (234,654)  10 
Net income from continuing operations     487,606  134,928   622,534  22