Fertilizantes Heringer S.A. - under Court-supervised

(A free translation of the original in Portuguese)

Fertilizantes Heringer S.A. - under Court-supervised Reorganization Quarterly Information (ITR) at September 30, 2020 and report on review of quarterly information


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PricewaterhouseCoopers, Rua José Pires Neto 314, 10o, Campinas, SP, Brasil, 13025-170, Caixa Postal 3136, T: +55 (19) 3794 5400, www.pwc.com.br

Report on review of quarterly information To the Board of Directors and Stockholders Fertilizantes Heringer S.A. - under Court-supervised Reorganization Introduction We have reviewed the accompanying interim accounting information of Fertilizantes Heringer S.A. - under Court-supervised Reorganization ("Company"), included in the Quarterly Information Form (ITR) for the quarter ended September 30, 2020, comprising the balance sheet at that date and the statements of operations and comprehensive income (loss) for the quarter and nine-month period then ended, and the statements of changes in equity and cash flows for the nine-month periods then ended, and a summary of significant accounting policies and other explanatory information. Management is responsible for the preparation of the interim accounting information in accordance with the accounting standard CPC 21, Interim Financial Reporting, of the Brazilian Accounting Pronouncements Committee (CPC) and International Accounting Standard (IAS) 34 - Interim Financial Reporting, issued by the International Accounting Standards Board (IASB), as well as the presentation of this information in accordance with the standards issued by the Brazilian Securities Commission (CVM), applicable to the preparation of the Quarterly Information (ITR). Our responsibility is to express a conclusion on this interim accounting information based on our review. Scope of review We conducted our review in accordance with Brazilian and International Standards on Reviews of Interim Financial Information (NBC TR 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity, and ISRE 2410 - Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively). A review of interim information consists of making inquiries, primarily of persons responsible for financial and accounting matters and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Brazilian and International Standards on Auditing 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. Basis for qualified conclusion As mentioned in Note 6 to the interim quarterly information included in the Quarterly Information Form (ITR) at September 30, 2019, a final and unappealable decision was issued regarding a lawsuit filed by the Company seeking the exclusion of the Value-added Tax on Sales and Services (ICMS) from the calculation basis of the Social Integration Program (PIS) and the Social Contribution on Revenues (COFINS). This decision acknowledged the right of reimbursement of the amounts involved. The Company has neither calculated nor disclosed its estimate of the amounts recoverable, including interest/indexation accruals. We were unable to perform alternative procedures to estimate the amounts due during our review. Pursuant to the applicable accounting standards, the Company should have recorded these assets. We have been unable to determine the effects on the interim accounting information in the Quarterly Information Form (ITR) for the quarter ended September 30, 2020.

Fertilizantes Heringer S.A.

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Qualified conclusion on the interim information

Based on our review, except for the unquantified effects of the matter described in the "Basis for qualified conclusion" section, nothing has come to our attention that causes us to believe that the accompanying interim accounting information included in the quarterly information referred to above has not been prepared, in all material respects, in accordance with CPC 21 and IAS 34 applicable to the preparation of the Quarterly Information, and presented in accordance with the standards issued by the CVM. Emphasis of matter -Material uncertainty related to going concern We draw attention to Note 1.3 to the quarterly information included in the Quarterly Information Form (ITR), which describes that the interim accounting information was prepared under the going concern assumption following the approval, on December 3, 2019, of the Company’s Court-supervised Reorganization Plan which, among other matters, authorized the restructuring of the Company’s debt at different terms and interest rates for each creditor class. As described in Note 1.1, the Plan is structured on the basis of a series of scenarios reflecting the complexity and size of the Company’s business and the on numerous operating and financial processes and procedures affecting management's assumptions. The Company's ability to continue as a going concern depends on the success of the Court-supervised Reorganization Plan. This situation, along with the matters described in Note 1.3, including the uncertainties affecting the economic environment due to the COVID-19 pandemic, raise a significant doubt about the Company's ability to continue as a going concern. Our conclusion is not qualified in respect of this matter. Other matters Statements of value added The quarterly information referred to above includes the statement of value added for the nine-month period ended September 30, 2020. This statement is the responsibility of the Company's management, and is presented as supplementary information under IAS 34. This statement has been subjected to review procedures performed together with the review of the interim accounting information for the purpose of concluding whether it is reconciled with the interim accounting information and accounting records, as applicable, and if its form and content are in accordance with the criteria defined in the accounting standard CPC 09 - "Statement of Value Added". Based on our review, except for the unquantified effects of the matter described in the "Basis for qualified conclusion" section above, nothing has come to our attention that causes us to believe that this statement of value added has not been properly prepared, in all material respects, in accordance with the criteria established in this accounting standard, and consistent with the interim accounting information taken as a whole. Campinas, November 13, 2020 PricewaterhouseCoopers Eduardo Dias Vendramini Auditores Independentes Contador CRC 1SP220017/O-4 CRC 2SP000160/O-5

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Viana, November 13, 2020 - Fertilizantes Heringer (FHER3) - Under Court-supervised Reorganization - announces

today its results for the third quarter of 2020 - Conference call on November 16, 2020.

HIGHLIGHTS:

✓ Positive Net Result in 3Q;

✓ EBITDA was positive in 3Q20 and 9M20, with a substantial increase compared to the same periods of 2019;

✓ A substantial increase in delivered volume in 3Q20 and 9M20.

Conference Call in Portuguese

11:00 a.m. BRT (10:00 a.m. U.S. ET)

Phone: +55 (11) 3181-8565 / 4210-1803

Code: Heringer

Replay for a week:

+55 (11) 3193 1012

Password: 8621025#

Conference Call in English (SIMULTANEOUS TRANSLATION)

11:00 a.m. BRT (10:00 a.m. U.S. ET)

Phone: +1 (412) 717-9627 / (844) 204-8942

Code: Heringer

Replay for a week:

+55 (11) 3193 1012

Password: 4239245#

Investor Relations

Phone: +55 (19) 3322-2294 [email protected]

www.heringer.com.br/ri

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DELIVERED VOLUME AND SHARE OF EACH CROP A substantial increase in the delivered volume of all crops in 3Q20 over 3Q19 and maintenance of sales diversity by crops.

Robust resumption of the Company operations with a further two mixing units in service compared to the same period last year - Três Corações - MG and Dourados - MS. The inventory levels and the resumption of the Company's activities after the filing for court-supervised reorganization contributed to the significant increase in delivery volumes in the first nine months of 2020 over to the same period of last year.

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MIX OF DELIVERED PRODUCTS

Specialty products continue to be highly relevant to the Company's sales volumes and operating results. FERTILIZER DELIVERIES

BRAZILIAN FERTILIZER MARKET: Domestic Production: 3.39 million tonnes in 1H20, representing a reduction of 1.4% in relation to 1H19, which was 3.44

million tons.

Imports: Significant increase of 9.1% in 1H20, reaching 13.38 million tons compared to 12.27 million tons in 1H19, aiming

to offset the reduction in domestic production, thus meeting the increased demand for deliveries.

* Source: ANDA

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FINANCIAL PERFORMANCE 3Q20 STATEMENT OF OPERATIONS (R$ THOUSAND)

Net Revenue: Robust growth of 94%, mainly reflecting the increase in delivered volume at higher sales prices.

Gross Profit: Significant growth compared to the same period of last year, showing better margins and increased sales

volume.

SG&A: A sharp drop as a percentage of net revenue, down from 8.3% in 3Q19 to 4.9% in 3Q20.

EBITDA: Higher in 3Q20 versus 3Q19, reaching 9.0%, due to the increase in Net Revenue and Gross Profit.

Net Result: Positive by R$ 7 million in 3Q20, an important reversal of R$ 143 million compared to 3Q19 due to the points

reported above.

9M20 STATEMENT OF OPERATIONS (R$ THOUSAND)

* EBITDA adjusted for a non-recurring event (R$10.4 discount of ICMS tax on sales)

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Net Revenue: An exponential growth of 101% compared to the same period in 2019, due to the increase in delivered

volume added to the increase in sales prices.

Gross Profit: Significant increase compared to the same period of last year, raising gross margin to more than 13%,

mainly due to an increase in net revenue from sales in the period and the appropriate dilution of fixed costs.

SG&A: Much lower margin of net revenue, reflecting the Company's volumes of operation, closer to historical levels.

EBITDA: Positive by R$85 million in 9M20, an important reversal of R$153 million compared to 9M19, due to a

substantial increase in net revenue and gross profit, in addition lower SG&A expenses as a result of the Company's

restructuring process.

Net Result: Significantly impacted by foreign exchange losses (financial expense) on foreign currency debts for which

maturities had been extended up to 25 years, with no immediate cash effect.

OPERATING RESULTS *

A significant growth in the gross and EBITDA margins in the two periods, due to an assertive sales strategy, showing the Company's recovery process.

* % on Net Revenue

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BALANCE SHEET - 3Q20 vs. 3Q19

WORKING CAPITAL

* Accounts payable in 2019 and 3Q20 according to balance sheet data, less fiduciary sales with two suppliers

• Considering the increase in sales volume in the

period compared to the same period of last year,

the inventory balance is adjusted to meet

demand (seasonality).

• Reduction of around R$50 million in recoverable

taxes in the short and long term due to cash

receipts in the compared period.

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DAYS OF ACCOUNTS RECEIVABLE AND INVENTORIES

CASH FLOW

At the end of 3Q20, Heringer's cash and cash equivalents totaled R$25.6 million. See below the main items that make

up the change in the period:

a) Loss before income tax and social contribution of R$2.2 million;

b) Non-cash expenses of R$46.9 million, basically interest and exchange loss;

c) Increase of R$224.7 million in asset accounts, especially in inventory and accounts receivable from customers;

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d) Increase of R$9.0 million in liability accounts;

e) Net investment of R$8.6 million; and

f) Negative net cash flow from financing activities of R$164.0 million.

In 9M20, the net result was strongly affected by the exchange losses (financial expense), with no immediate cash effect

as the loans are due in the long-term (Court-supervised Reorganization).

BRAZILIAN AGRIBUSINESS INDUSTRY UPDATE

• IPEA: The agribusiness GDP is revised, and projection rises to 1.9% in 2020

The Institute of Applied Economic Research (IPEA) revised the forecast for the farming industry's GDP growth rate.

Released on October 22, 2020, the rate rose from 1.6% to 1.9% in 2020. The new forecast was driven by the

agricultural production estimates released in the same month by the IBGE. According to the research, a more

favorable scenario is expected for this year. The researchers arrived at the same GDP forecast in view of the harvest

estimate of Companhia Nacional de Abastecimento (CONAB).

• Brazil achieves the highest grain production in the 2019/2020 harvest

The 2019/20 Brazilian grain harvest production reached an all-time high of 257.8 million tonnes, notably soybean,

corn and cotton. This volume is 4.5%, or 11 million tonnes higher than the previous cycle. Data from the 12th and

last grain harvest survey released on September 10, 2020 by Companhia Nacional de Abastecimento (CONAB). The

growth is due to the 4.2% increase in the cultivated area, coupled with the 0.3% gain in productivity.

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• Meat prices should remain high until the end of 2020

With the appreciation of the U.S. dollar against the Brazilian real, producers are preferring to sell the product to

other countries, especially China, the country's main buyer. Animal feed is a commodity with prices quoted in U.S.

dollars.

• Agribusiness export revenue grows 8% in the year, to R$79 billion, according to CEPEA

The increase was driven by the volume sold to other countries, which rose 16% between January and September

2020. The Brazilian agribusiness export revenue reached US$79 billion between January and September 2020, up

8% year on year, according to data from the Ministry of Industry, Foreign Trade and Services, compiled by

Esalq/USP. The expansion was driven by the export volume, which increased 16% in the period, to 170 million

tonnes. The U.S. dollar amounts reflect an increase in the export volume, as the average prices of products in the

North American branch fell 6% in the period, according to the Center for Advanced Studies on Applied Economics

(CEPEA).

In Brazilian reais, revenue rose 26% in the first nine months of 2020, due to the depreciation of almost 16% of the

Brazilian real against the U.S. dollar.

• Brazilian soybean imported to China soar 51% in September

The world's largest soybean buyer imported 7.25 million tons from Brazil in September, compared to 4.79 million

tons in the same period of last year, a 51.4% increase.

IMPORTED RAW MATERIAL PRICE PERFORMANCE

In 3Q20, the price of the main raw materials in U.S. dollars increased in the international market, due to the higher demand mainly from Brazil, Africa and Asia (specifically India), supported by the good profitability of most agricultural commodities.

Source: Siacesp/FOB Brasil

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GRAIN PRODUCTION AND CULTIVATED AREA The 2019/20 Brazilian grain harvest production reached an all-time high of 257.8 million tonnes, 4.5% higher than the

previous cycle, and according to the 2st CONAB survey for the 2020/21 harvest, this growth should be around 4.3%

compared to the 2019/20 harvest.

Grain: corn, soybean, rice, beans, sorghum, castor bean, cotton, sunflower, barley, rye, canola, oat, peanut, wheat and triticale

Total Brazil (all crops) Source: 2st CONAB survey for the 20/21 harvest – November 2020

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APPENDIX I - BALANCE SHEET

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APPENDIX II - 3Q20 STATEMENT OF OPERATIONS

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APPENDIX III - 9M20 STATEMENT OF OPERATIONS

* EBITDA adjusted for a non-recurring event (R$10.4 discount of ICMS tax on sales)

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EBITDA (earnings before interest, tax, depreciation and amortization) is presented as additional information, given our

belief that it is an important indicator of our operating performance, as well as useful for comparing our performance

with that of other companies in the sector. However, this should not be considered a substitute for net income calculated

in accordance with accounting standards or as a measure of Heringer's profitability. Moreover, our calculations may

not be comparable with similar measures adopted by other companies in the sector.

We make forward-looking statements about future events that are subject to risks and uncertainties. These forward-

looking statements are based on the beliefs and assumptions of Heringer's management and on information currently

available. Forward-looking statements include information about our current plans, beliefs or expectations, as well as

those of Heringer's Board of Directors and Executive Officers.

The reservations related to forward-looking statements and information also include information on possible or

presumed operating results, as well as any statements preceded, followed or including words such as "believe", "may",

"will", "continue", "expect", "foresee" ,"intend", "plan", "estimate" or similar expressions.

Forward-looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions, as

they refer to future events, thus depending on circumstances that may or may not occur. Our future results and the

creation of value to shareholders may differ significantly from those expressed or implied in these forward-looking

statements. Many factors that may determine these results and figures are beyond Heringer's control or ability to

predict.

Fertilizantes Heringer S.A. – under Court Reorganization Balance sheets (All amounts in thousands of reais) (A free translation of the original in Portuguese)

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

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Note 09/30/2020 12/31/2019 Note 09/30/2020 12/31/2019

Assets Liabilities and equity (net capital deficiency) Current assets Current liabilities

Cash and cash equivalents 3 25,624 20,034 Trade payables 11 349,363 230,067 Trade receivables 4 200,527 172,293 Trade payables - CR 13 751 3,025 Inventories 5 621,203 344,761 Borrowings 12 281,912 162,601 Taxes recoverable 6 31,555 117,604 Borrowings - CR 13 - 39 Income tax and social contribution recoverable 7.a 56,004 74,523 Salaries and payroll charges 15,539 8,357 Other assets 8 39,198 33,118 Salaries and payroll charges - CR 13 17,577 23,507

Taxes payable 3,342 7,999 Advances from customers 4 48,074 7,234 Other liabilities 16 73,502 62,601

974,111 762,333 790,060 505,430

Non-current assets Non-current liabilities Trade receivables 4 16 297 Trade payables 11 13,143 13,206 Taxes recoverable 6 243,612 214,325 Trade payables - CR 13 422,482 321,888

Income tax and social contribution recoverable 7.a 120,195 98,569 Borrowings 12 35,728 37 Other assets 8 10,015 7,961 Borrowings - CR 13 519,730 415,929 Tax credits acquired 14 33,672 32,878 Salaries and payroll charges - CR 13 - 4,713 Judicial deposits 14 19,870 28,043 Provision for contingencies 14 37,310 34,654 Property, plant and equipment 10 434,659 436,752 Taxes payable - 194 Intangible assets 7,098 7,343 Deferred income tax and social contribution 7.b 229,852 252,497

1,258,245 1,043,118

869,137 826,168 Total liabilities 2,048,305 1,548,548

Equity (net capital deficiency) 15 Share capital 585,518 585,518

Carrying value adjustments 38,542 38,993 Accumulated deficit (829,117) (584,558)

Total equity (net capital deficiency) (205,057) 39,953

Total assets 1,843,248 1,588,501 Total liabilities and equity (net capital deficiency) 1,843,248 1,588,501

Fertilizantes Heringer S.A. – under Court Reorganization Statement of operations

Quarters ended September 30 (All amounts in thousands of reais) (A free translation of the original in Portuguese)


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Note 2020 2019

Net operating revenue 18 712,221 366,874 Cost of sales 19 (599,320) (322,601)

Gross profit 112,901 44,273

Operating expenses Selling expenses 19 (29,980) (22,562) General and administrative expenses 19 (26,305) (20,460) Other operating income (expenses), net 1,095 (111)

(55,190) (43,133)

Operating profit 57,711 1,140

Finance costs Foreign exchange variation, net 20 (18,052) (132,756) Other finance costs, net 21 (37,477) (4,209)

(55,529) (136,965)

Profit (loss) before income tax and social contribution 2,182 (135,825)

Income tax and social contribution 4,903 -

Profit (loss) for the period 7,085 (135,825)

Weighted average number of common shares (thousands) 53,857 53,857

Profit (loss) per share attributable to the owners of the parent during the period (in R$ per share) 17 0.1316 (2.5219)

Fertilizantes Heringer S.A. – under Court Reorganization Statement of operations

Nine-month periods ended September 30 (All amounts in thousands of reais) (A free translation of the original in Portuguese)


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Note 2020 2019

Net operating revenue 18 1,393,124 692,754 Cost of sales 19 (1,204,222) (662,184)

Gross profit 188,902 30,570

Operating expenses Selling expenses 19 (66,787) (59,421) General and administrative expenses 19 (61,576) (64,637) Other operating income (expenses), net 3,322 (8,743)

(125,041) (132,801)

Operating profit (loss) 63,861 (102,231)

Finance costs Foreign exchange losses, net 20 (235,481) (116,749) Other finance costs, net 21 (96,035) (27,256)

(331,516) (144,005)

Loss before income tax and social contribution (267,655) (246,236)

Income tax and social contribution 7.c 22,645 -

Loss for the period (245,010) (246,236)

Weighted average number of common shares (thousands) 53,857 53,857

Loss per share attributable to the owners of the parent during the period (in R$ per share) 17 (4.5493) (4.5720)

Fertilizantes Heringer S.A. – under Court Reorganization Statement of comprehensive income Quarters ended September 30 (All amounts in thousands of reais) (A free translation of the original in Portuguese)


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2020 2019

Loss for the period 7,085 (135,825)

Other comprehensive income (loss) - -

Total comprehensive income (loss) for the period 7,085 (135,825)

Fertilizantes Heringer S.A. – under Court Reorganization Statement of comprehensive income Nine-month periods ended September 30 (All amounts in thousands of reais) (A free translation of the original in Portuguese)


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2020 2019

Loss for the period (245,010) (246,236)

Other comprehensive income (loss) - -

Total comprehensive income (loss) for the period (245,010) (246,236)

Fertilizantes Heringer S.A. – under Court Reorganization Statement of changes in equity (net capital deficiency) Nine-month periods ended September 30 (All amounts in thousands of reais) (A free translation of the original in Portuguese)


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Share capital

Carrying value

adjustments

Accumulated deficit Total

At January 1, 2019 585,518 39,577 (1,246,931) (621,836) Prior year adjustments - correction of errors (Note 1.4) 8,259 8,259

Adjusted opening balances 585,518 39,577 (1,238,672) (613,577) Loss for the period (restated) - - (246,236) (246,236) Realization of deemed cost, net of deferred income tax and social contribution - (434) 434

At September 30, 2019 (restated) 585,518 39,143 (1,484,474) (859,813)

At January 1, 2020 585,518 38,993 (593,126) 31,385 Prior year adjustments - correction of errors (Note 1.4) 8,568 8,568

Adjusted opening balances 585,518 38,993 (584,558) 39,953 Loss for the period - - (245,010) (245,010) Realization of deemed cost, net of deferred income tax and social contribution - (451) 451 -

At September 30, 2020 585,518 38,542 (829,117) (205,057)

Fertilizantes Heringer S.A. – under Court Reorganization Statement of cash flows Nine-month periods ended September 30 (All amounts in thousands of reais) (A free translation of the original in Portuguese)


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2020 2019

Cash flows from operating activities Loss before income tax and social contribution (267,655) (246,236)

Expenses (income) not affecting cash Provision for impairment of trade receivables (524) 2,463 Adjustment to fair value - sub-portfolio traded (861) 26 Provision for inventory losses (2,772) 165 Depreciation and amortization 20,799 23,012 Loss on disposal of property, plant and equipment 1,410 (1,056) Purchase bonus (5,018) - Provision for adjustment to market value of assets held for sale - (64) Provision for vacation pay, 13th month salary and profit sharing 7,319 (3,374) Provision for (reversal of provision for) contingencies, net 2,656 (439) Reversal of discount on tax credits acquired 477 - Unrealized interest and foreign exchange variation on trade receivables, imports in transit, trade payables and borrowings 319,407

117,945

Unrealized gain (loss) on financial instruments (21,301)

75,238 (128,859)

Decrease (increase) in assets Trade receivables (26,672) (992) Inventories (265,701) (147,817) Taxes recoverable 53,178 143,812 Other assets (2,961) (10,847) Judicial deposits 934 (6,567)

Increase (decrease) in liabilities Trade payables 46,899 29,235

Forfeit - (5,462) New import financing - 34,838 Payments of import financing - (42,250) Salaries and payroll charges (17,753) 1,352 Taxes payable (4,851) (1,347) Advances from customers 40,840 (22,533) Other payables 7,038 4,936

Changes in assets and liabilities (169,049) (23,642)

Payment of interest on borrowings (21,326) (18,460)

Net cash used in operating activities

(115,137)

(170,961)

Cash flows from investing activities Purchase of property, plant and equipment (19,871) (522) Proceeds from sales of property, plant and equipment 3,843

Net cash provided by investing activities (19,871) 3,321

Cash flows from financing activities New borrowings 1,140,211 853,810 Principal of borrowings paid (999,613) (677,999)

Net cash provided by financing activities 140,598 175,811 Increase in cash and cash equivalents 5,590 8,171 Cash and cash equivalents at the beginning of the period 20,034 19,999

Cash and cash equivalents at the end of the period 25,624 28,170

Fertilizantes Heringer S.A. - under Court reorganization Statement of value added Nine-month periods ended September 30 (All amounts in thousands of reais) (A free translation of the original in Portuguese)


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2020 2019

Revenue Sales of goods and services 1,408,432 700,558 Other income 9,343 2,247 Revenue from the construction of own assets 10,073 (189) Provision for (reversal of provision for) impairment of trade receivables 1,055 (2,118)

1,428,903 700,498

Inputs acquired from third parties Cost of sales and services (1,184,504) (634,815) Materials, energy, outsourced services, and other (105,497) (80,490) Impairment/recovery of assets 1,339 (5,313) Other (32) (190)

(1,288,694) (720,808)

Gross value added 140,209 (20,310)

Depreciation and amortization (20,899) (23,011)

Net value added generated by the entity 119,310 (43,321)

Value added received through transfer

Adjustment to fair value - liabilities 14,078 - Finance income 133,616 282,673 Other 205 576

147,899 283,249

Total value added to distribute 267,209 239,928

Distribution of value added Personnel Direct compensation 45,721 59,521 Benefits 14,420 13,404 Government Severance Indemnity Fund for Employees (FGTS) 2,917 2,105

63,058 75,030

Taxes and contributions Federal (15,075) 2,972 State (20,666) (24,740) Municipal 683 929

(35,058) (20,839)

Third-party capital remuneration Foreign exchange variation / interest 476,960 418,801 Rentals 1,530 895 Other 5,730 12,520

484,220 432,216

Remuneration of own capital Loss for the period (245,010) (246,479)

Total value distributed 267,209 239,928


Fertilizantes Heringer S.A. – under Court Reorganization Notes to the quarterly information At September 30, 2020 In thousands of Brazilian Reais, unless otherwise stated

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1. General information Fertilizantes Heringer S.A. - under Court Reorganization ("Heringer" or "Company"), headquartered in the city of Viana, in the state of Espírito Santo, is mainly engaged in industrial production and sale of fertilizers, and currently owns 16 mixing units distributed through the Southeastern, Mid-Western, Southern and Northeastern regions of Brazil. In the state of Paraná, in addition to one mixing unit, the Company also has a sulfuric acid production unit and a single super phosphate ("SSP") production unit. The Company’s common shares are traded on the special segment of B3 S.A. - Brasil, Bolsa, Balcão known as the Novo Mercado (New Market), under the ticker symbol FHER3. Approval of the financial statements

The presentation of financial statements was approved and authorized by the Company's Board of Directors on November 13, 2020.

1.1. Court reorganization

On February 4, 2019, the Company filed for court reorganization ("CR"), which was approved at the General Meeting of Creditors held on December 3, 2019, and ratified by the court in charge of the case on February 14, 2020, with publication on February 19, 2020. During the preparation of the Court Reorganization Plan, the Company evaluated a series of possible scenarios regarding the development of its operating businesses and financial indicators, conducting discussions with creditors included in the Court Reorganization Plan. This preparatory work incorporated a series of scenarios reflecting the complexity and size of the Company’s business and numerous operating and financial processes and procedures affecting management's assumptions. The approved Court Reorganization Plan basically consisted of renegotiating the debt, attributing different terms and interest rates for each class of creditors. The Court Reorganization Plan provided for the following classes of creditors: Class I - Labor creditors; (ii) Class II - Secured creditors; (iii) Class III - Unsecured creditors; (iv) Class IV - Unsecured creditors (Small businesses - ME/Small-sized enterprises - EPP). The payment terms specific to each creditor were defined through options presented in the Court Reorganization Plan and elected by creditors, on March 20, 2020, 30 days after publication of the court reorganization ratification by the court. The Court Reorganization Plan presented by the court-appointed receiver, in the court records of proceeding 1000339-55.2019.8.26.0428, is available for consultation at the Company's website (http://ri.heringer.com.br/) (not reviewed by auditor) and at the Court's website (http://www.tjsp.jus.br/) (not reviewed by auditor).

Fertilizantes Heringer S.A. – under Court Reorganization Notes to the quarterly information At June 30, 2020 In thousands of Brazilian Reais, unless otherwise stated

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The information summarized below should be read in conjunction with the Court Reorganization Plan. In the event of any differences between the summary below and the Court Reorganization Plan, the provisions of the Court Reorganization Plan shall prevail. Up to September 30, 2020, the Company made payments of R$ 17,616 to Class I - Labor creditors. The remaining balance will be settled by June 2021 in consecutive monthly installments adjusted by the Referential Rate ("TR") variation, maturing on the 19th of each month, starting in October 2020. In September 2020, the balance of the class I - Labor debt was increased by R$ 5,498, for the Company’s court costs and fees in the in-court reorganization process, as determined by the reorganization judge. These fees will be paid by June 30, 2021. During the third quarter of 2020, the Company carried out an auction of assets as provided for in the In-court Reorganization Plan to accelerate payments to Class I - Labor creditors, which resulted in the sale of a series of non-operating assets, generating proceeds of R$ 9,106, which will be deposited in court until December 2020 and subsequently distributed to creditor class. In this same period, for Classes III - Unsecured creditors and IV - Unsecured creditors ME/EPP, payments up to R$ 1.5 per creditor were made, regardless of the payment option chosen. The remaining balance will be settled according to the conditions provided for in the published Court Reorganization Plan.

1.2. Debt reorganization and its effects With the approval of the court reorganization plan at the General Meeting of Creditors held on December 3, 2019, the terms, charges and other conditions related to Company debts assumed before the court reorganization were renewed, under the conditions provided for in the court reorganization plan. Consequently, pre-court reorganization debts originally submitted to the court reorganization were extinguished, and replaced by new financial liabilities initially measured at fair value, pursuant to CPC48/IFRS 9 - Financial instruments. As a result of fair value measurement of the new financial liabilities, the Company's financial position disclosed in the financial statements for the year ended December 31, 2019 was significantly affected. For fair value measurement of the new financial liabilities, the Company hired a specialized firm, which used the discounted cash flow method to estimate fair values. The discount rate considered as the most appropriate to reflect the Company's credit risk was estimated by adding to the basic interest rate the credit risk obtained based on benchmarks from comparable companies, similar to the capital structure the Company will have after implementing the Court Reorganization Plan. The methodology for estimating fair value was that of Level 2 - Observable market inputs for liabilities, either directly (that is, as prices) or indirectly (that is, derived from prices). The Company carried out the subsequent measurement of its liabilities at amortized cost, considering the effective interest rates, for the purposes of calculating the updated amount by class and option of each creditor, including recognizing the effect of the foreign exchange variation of the debts in foreign currency. Under these assumptions, the carrying amount of the Company's liabilities falling within the scope of the court reorganization totals R$ 960,540 at September 30, 2020, with the following breakdown by class of creditor and payment option:

Fertilizantes Heringer S.A. - under Court Reorganization Notes to the quarterly information At September 30, 2020 In thousands of Brazilian Reais, unless otherwise stated

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Payment option

Nominal value

Fair value adjustment

Balance at December 31,

2019

Foreign exchange variation

Interest incurred

Payments made

Adjustments / Transfers

Balance at September

30, 2020

Class I - Labor Single (i) 29,797 (1,577) 28,220 - 1,475 (17,616) 5,498 17,577

Total Class I

29,797 (1,577) 28,220 - 1,475 (17,616) 5,498 17,577

Class II - Secured Option 1 (ii) 272,343 (104,151) 168,192 33,040 6,043 - (7,700) 199,575

Option 2 32,565 (12,453) 20,112 4,699 722 - - 25,533

Total Class II

304,908 (116,604) 188,304 37,739 6,765 - (7,700) 225,108

Class III - Unsecured Option 1 367,803 (243,495) 124,308 30,988 10,653 - - 165,949

Option 2 288,487 (190,986) 97,501 16,628 7,752 - - 121,881

Option 3 (ii)

967,724

(640,659) 327,065 81,533 28,029 (561) (10,034) 426,032

Total Class III

1,624,014 (1,075,140) 548,874 129,149 46,434 (561) (10,034) 713,862

Class IV - Unsecured Option 1 3,585 (757) 2,828 - 463 (377) - 2,914

ME/EPP Option 2 6,926 (6,051) 876 - 203 - - 1,079

Total Class IV 10,512 (6,808) 3,704 - 666 (377) - 3,993

Grand total 1,969,230 (1,200,129) 769,101 166,888 55,341 (18,554) (12,236) 960,540

(i) Referring to court costs and fees party due by the Company, in the in-court reorganization process, as decided by the reorganization judge. These fees will be paid by June 30, 2021. (ii) In the period ended September 30, 2020, the Company, with authorization from the judge in charge of the in-court reorganization, entered into an agreement with one of its creditors

participating in the in-court reorganization process, for the use of court restricted funds for the settlement of part of the debt. As a consequence, there was reduction of the balance of the "Judicial deposits" account by R$ 7,700 thousand to settle debt.

(iii) In the period ended June 30, 2020, the judge responsible for the Company's court reorganization determined, in the records of the court reorganization process, the priority status

of the debt of one of its creditors. As a result, the Company performed the reclassification of debt in the updated amount of R$ 35,724 to the line item Borrowings in non-current liabilities. In the period ended June 30, 2020, the judge responsible for the court reorganization also determined the change of currency of the debt of one of its creditors, as well as the terms of interest. As a consequence, a substantial modification in the terms of the contract occurred, resulting in the extinction of the liability originally recorded and the recording of a new liability measured at fair value, as determined by CPC 48 / IFRS 9 - Financial instruments, resulting in a new fair value adjustment.


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1.3. Going concern

The quarterly information for the period ended September 30, 2020 has been prepared under the assumption that the Company will continue as a going concern and considering compliance with the legal requirements applicable to court reorganizations. The court reorganization aims at ensuring the Company's ability to continue as a going concern, reinforced with the approval of the court reorganization plan at the General Meeting of Creditors mentioned above, which resulted in the novation of the debts and their classification into current and non-current liabilities based on the terms and conditions of the plan.

In addition, the Company's management has a reasonable expectation to continue as a going concern and that its contracts will remain valid and enforceable throughout the process of implementing the measures approved in the Court Reorganization Plan.

The Company's ability to continue as a going concern will ultimately depend on the success of the court reorganization process and the materialization of other forecasts provided for in the Court Reorganization Plan. Although there is no evidence in this regard, it should be noted that these conditions and circumstances indicate the existence of significant uncertainty that may affect the success of the Court Reorganization and raise doubts about the Company's ability to continue as a going concern, including compliance with the resolutive or suspensive conditions precedent in the Court Reorganization Plan.

In the period ended September 30, 2020, the Company recorded a loss for the period and accumulated deficit of R$ 245,010 (R$ 110,572 at December 31, 2019) and R$ 829,117 (R$ 584,558 at December 31, 2019), respectively, as well as negative equity (capital deficiency) of R$ 205,057 at September 30, 2020 (positive equity of R$ 39,953 at December 31, 2019). Although the results for the nine-month period of 2020 have been significantly affected by the finance costs generated by the devaluation of Brazilian Real in part due to uncertainties arising from the economic environment due to the COVID-19 pandemic, these costs do not have a direct material impact on the Company's cash in the short term, since: (i) they are incurred mainly on the liabilities included in the court reorganization whose payments will occur substantially from 2023 and for a period of up to 25 years and (ii) there is a natural hedge for short-term liabilities arising from the purchase of inputs in foreign currency, with inventories priced in the market in U.S. dollars (Note 24 (b)). The Company's management remains confident that the cash flow projections used in the preparation of the Court Reorganization Plan, which provide for disbursements over the long-term payments, remain valid and are sufficient to support the Company's ability to continue as a going concern.

Additionally, as described in Note 27, the COVID-19 contagion has generated uncertainties in the economic environment, notably in the foreign currency and stock exchange markets. Other than the impacts of foreign exchange volatility, management has not identified material impacts on its operations or the sector in which it operates.

1.4. Restatement of comparative figures

In order to conform to the presentation of the financial statements and in compliance with the requirements of Technical Pronouncement CPC 23 - Accounting Policies, Changes in Accounting Estimates and Errors, the Company has restated the quarterly information for the quarter ended September 30, 2019 on a retrospective basis due to the final and unappealable ruling rendered on the proceeding challenging constitutionality of payment of Social Security Contribution (INSS) on services by cooperatives, which was made on December 14, 2017, which definitively acknowledged the Company's right to offset overpaid INSS in the period from 2010 to 2016, duly adjusted by the SELIC rate (Note 6).


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The restatement of the comparative figures impacted the balance sheet (non-current assets and equity in the amounts of R$ 8,568 and R $ 8,259 at December 31, 2019 and January 1, 2019, respectively) and the statement of operations ("Other finance costs, net" for the three and nine-month periods ended September 30, in the amounts of R$ 81 and R$ 243, respectively). The table below presents the adjustments performed in the comparative balances of balance sheets at December 31, 2019 and January 1, 2019: December 31, 2019 January 1, 2019

As originally presented Adjustment Restated


Balance sheet Assets Current assets 762,333 762,333 951,502 951,502 Non-current assets 817,600 8,568 826,168 874,220 8,259 882,641

Total assets 1,579,933 8,568 1,588,501 1,825,722 8,259 1,833,981

Liabilities and equity Current liabilities 505,430 505,430 2,378,923 2,378,923 Non-current liabilities 1,043,118 1,043,118 68,635 68,635 Equity 31,385 8,568 39,953 (621,836) 8,259 (613,577)

Total liabilities and equity 1,579,933 8,568 1,588,501 1,825,722 8,259 1,833,981

Statement of operations Quarter ended September 30, 2019 Nine-month period ended September 30, 2019



Finance income (costs), net

(4,290)

81

(4,209)

(27,499)

243

(27,256)

Loss before income tax and social contribution

(135,906)

81

(135,825)

(246,479)

243

(246,236)

Loss for the period

(135,906)

81

(135,825)

(246,479)

243

(246,236)

Attributable loss per share (in R$ per share)

(2.5219)

(2.5219)

(4.5765)

(4.5720)

There were no impacts in the Statement of Comprehensive Income, Cash Flows and Value Added, other than the aforementioned adjustment to profit or loss, for the three and nine-month periods ended September 30, 2019.


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2. Basis of preparation

The quarterly information - ITR has been prepared in accordance with accounting practices adopted in Brazil (BR GAAP), including the standards issued by the Securities Commission of Brazil (CVM) and the pronouncements issued by the Brazilian Accounting Pronouncements Committee (CPC), as well as according to the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), and discloses all information significant to the financial statements, which is consistent with the information utilized by Management in the performance of its duties.

2.1. Summary of significant accounting policies The accounting practices adopted in the preparation of this quarterly information - ITR are consistent with those disclosed in Note 2.1 to the financial statements at December 31, 2019. The Company adopted all standards, amendments to standards and interpretations issued by the CPC, CVM, IASB and other regulatory agencies, which were effective at September 30, 2020.

Standards, amendments and interpretation of standards In the nine-month period ended September 30, 2020, no new standards, amendments and interpretations of standards were issued in addition to those already disclosed in Note 2.3 to the Company's financial statements for the year ended December 31, 2019. Furthermore, there were no changes in relation to the estimated impacts disclosed in those financial statements that could affect the quarterly information for this period.

3. Cash and cash equivalents The Company considers cash equivalents as short-term investments readily convertible into a known amount of cash and subject to insignificant risk of change in value. They are held by the Company with the purpose of meeting short-term cash commitments rather than for investment or any other purposes, and refer to investments in Bank Deposit Certificates (CDB) and repo operations subject to a repurchase agreement by the financial institution, which are redeemable without penalties within a period of less than 90 days from the investment date.

Average rate

September 30, 2020

December 31, 2019

Cash and funds in bank current account 5,468 4,079 Bank Deposit Certificates (CDB) (i) 9 % of CDI 20,156 15,955 25,624 20,034 (i) These investments were contracted with prime financial institutions and are remunerated based on

percentages of variation in the Interbank Deposit Certificate (CDI) rates, with immediate liquidity.


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4. Trade receivables Trade receivables are amounts due for goods sold in the ordinary course of the Company's business. If collection is expected in one year or less, trade receivables are classified as current assets. If not, they are presented as non-current assets. Trade receivables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest rate method, less the estimated impairment loss. The estimated loss with impairment of trade receivables is established based on the historical average of losses incurred by the Company (expected losses). The Company analyzes at least on a quarterly basis whether there is objective evidence of impairment of its trade receivables (incurred losses). The assessment of the evidence testing is based on an individual analysis of delinquent customers, taking into consideration their ability to pay, the collateral provided and the evaluation of legal advisors and collection companies.

September 30,

2020

December 31,

2019 Domestic trade receivables (i) 244,002 217,318 Foreign trade receivables 992 1,003 Adjustment to fair value - sub-portfolio traded (3,426) (4,287) Adjustment to present value (397) (292) 241,171 213,742 Expected or incurred impairment losses on trade receivables (40,628) (41,152) 200,543 172,590

Current 200,527 172,293 Non-current 16 297 200,543 172,590

(i) The amount of R$ 654 (R$ 674 at December 31, 2019) arises from transactions with related parties (Note 9). At September 30, 2020 and December 31, 2019, the adjustment to present value was calculated based on all sales with a collection term of more than 30 days, using a discount rate of 1% per month under the discounted cash flow method. The reversal of the adjustment to present value is recorded in the statement of operations for the period, within "Finance income (costs), net". At September 30, 2020 and December 31, 2019, the Fair Value Adjustment was calculated on the balance of Trade receivables, considering the effective interest rate of the discounted notes. The balances of foreign trade receivables are denominated in U.S. dollars.


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At September 30, 2020 and December 31, 2019, none of the Company's customers represented more than 10% of the Company's total revenue or balances receivable. The fair values of trade receivables approximate the carrying amounts at September 30, 2020 and December 31, 2019.

At September 30, 2020, trade receivables totaling R$ 45,396 (R$ 38,527 at December 31, 2019) were past due. The Company did not record a provision for impairment of these trade receivables, since they relate to a number of independent customers without recent history of default, on which no losses are expected, or for which the Company holds real guarantees. The aging analysis of these trade receivables is presented as follows:

September 30,

2020

December 31,

2019 Up to 90 days 4,317 3,087 90 to 180 days 938 770 Over 180 days 40,141 34,670 45,396 38,527

At September 30, 2020, the provision for expected or incurred impairment loss on trade receivables amounted to R$ 40,628 (R$ 41,152 at December 31, 2019). The aging analysis of these receivables is as follows:

September 30,

2020

December 31,

2019 Not yet due 1,202 869 Up to 180 days 903 45 Over 180 days 38,523 40,238

40,628 41,152

During the nine-month periods ended September 30, 2020 and 2019, changes in the provision for impairment of trade receivables were as follows: 2020 2019

Opening balance 41,152 38,588 Provision recognized in the period 1,885 4,322 Reversal of provisions in the period (2,409) (1,859)

Closing balance 40,628 41,051

At September 30, 2020, advances from customers of R$ 48,074 (R$ 7,234 at December 31, 2019) arose from billings for future delivery and prepayments of sales made to customers.


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5. Inventories Inventories are stated at the lower of cost and net realizable value. Costs incurred to transfer each product to its current location and condition are accounted for as follows: (i) raw material and packaging materials - average cost of purchase, using the weighted moving average method; and (ii) the cost of finished products and work in process comprises raw materials, direct labor, other direct costs and related production overheads, always based on the normal operating capacity. Imports in transit are stated at the accumulated cost of each import transaction.

September 30,

2020

December 31,

2019 Raw materials and packaging materials 335,597 311,670 Imports in transit 190,803 20,261 Advances to suppliers 90,508 12,242 Indirect materials and PPEs 8,972 8,037 Provision for adjustment to market value (i) - (1,853) Provision for inventory losses / obsolescence (4,677) (5,596) 621,203 344,761

(i) This provision refers to raw material residues, of which the average inventory cost was higher than the realizable value. The cost of inventories presented in the statement of operations for the nine-month period and included in "Cost of sales" totaled R$ 1,141,686 (R$ 597,127 in 2019) (Note 19).

6. Taxes recoverable

September 30,

2020

December 31,

2019

Restated

(Note 1.4)

Social Contribution on Revenues (COFINS) (i) 169,569 214,936 Value-added Tax on Sales and Services (ICMS) (ii) 66,228 67,947 Social Integration Program (PIS) (i) 39,268 49,485 Withholding Income Tax (IRRF) on financial instruments 625 681 Social security tax (INSS) recoverable (iii) 8,688 8,568 Other 1 1 Provision for discount on disposal of ICMS credit (ii) (770) - Provision for tax credit losses - PIS and COFINS (i) (8,442) (9,689) 275,167 331,929


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September 30,

2020

December 31,

2019

Restated

(Note 1.4)

Current 31,555 117,604 Non-current 243,612 214,325 275,167 331,929

(i) The balance of PIS and COFINS recoverable of R$ 208,837 arises from the appropriation of tax credits, upon the acquisition of inputs, being higher than the amounts due to the same federal authority on sales; this is mainly due to the fact that most of the Company’s sales are subject to PIS and COFINS at a zero rate, in accordance with current legislation. The Company periodically requests that these credits be refunded and/or offset against federal tax debts also managed by the Brazilian Federal Revenue Service ("RFB"). At September 30, 2020, R$ 5,767 (R$ 63,746 at December 31, 2019) was under verification by the RFB, and R$ 199,902 (R$ 200,675 at December 31, 2019) was under discussion with the RFB and/or within the scope of the Administrative Board of Tax Appeals ("CARF"). An amount of R$ 3,168 was released, awaiting only a refund via bank deposit to the Company. These discussions are held within the scope of the RFB and CARF including disallowances of tax credits submitted by the RFB during the analysis of requests for refund and/or offset. Disallowances are mainly due to the appropriation of credits on expenses related to the contracting of: 1. Port services, necessary for the clearance of imported inputs; 2. Transport service in the purchase and transfer of products subject to zero rate; and 3. Municipal transport service.

In relation to these matters, the Company has a legal opinion from an external legal advisor addressing the legal, doctrinal and jurisprudential aspects related to the non-cumulative regime of the referred contributions, which concludes that the risk of loss is remote, in view of the position of the superior courts favorable to the Company. Considering this risk of loss and the position of the higher courts, the Company believes that no additional provision is necessary. In April 2020, the Company received a R$ 57,921 refund of federal taxes, mostly PIS and COFINS, and, in October 2020, the amount of R$ 5,241, both through bank deposit

(ii) This amount will be used in the acquisition of inputs for production or sale to third parties, as well as in the normal operations of the Company. At September 30, 2020, the Company obtained approval to transfer credits held with the São Paulo state authority of R$ 19,355, and awaits approval to transfer credits held with the same state authority, of R$ 23,862. As management expects to sell ICMS credits to third parties, a provision of R$ 770 was recorded for the credits approved and in the process of approval.


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(iii) At September 30, 2020, the Company recorded credits R$ 8,688 (R$ 8,568 at December 31, 2019) to reflect a final and unappealable ruling on December 14, 2017 from the proceeding challenging the constitutionality of INSS payment on services by cooperatives, which definitively acknowledged the Company's right to offset overpaid INSS in the period from July 2010 to March 2016. The Company restated the comparative figures (Note 1.4).

The Company is a plaintiff in the proceeding that discusses the exclusion of ICMS from the PIS and COFINS calculation basis. On September 30, 2019, a final and unappealable decision was rendered in connection with such proceeding, definitively acknowledging the Company's right to exclude ICMS from the PIS and COFINS calculation basis, as well as to offset the amounts overpaid from 2002, with interest based on the SELIC rate. The Company's management became aware of the final and unappealable court decision in August 2020 and, therefore, had not had time, through to the date of issue of this quarterly information, to calculate and to record the tax credit and the tax effects related to income taxes (IRPJ and CSLL) and PIS and COFINS including interest/indexation accruals. The Company expects to complete the calculations and perform these adjustments before year-end.

7. Income tax and social contribution Current tax assets and liabilities are measured at the expected amount recoverable from or payable to the tax authorities. The tax rates and tax laws used to calculate the amount are those enacted or substantively enacted at the end of the reporting period. Deferred income tax and social contribution ("deferred taxes") relating to items recognized directly in equity are also recorded in equity. Management periodically evaluates tax positions in which tax regulations are subject to interpretation, and records provisions where appropriate. There are uncertainties with respect to the interpretation of complex tax regulations, and the amount and timing of future taxable profit. Considering the non-current nature and the complexity of the existing contractual instruments, any differences between the actual results and assumptions adopted, or future changes in these assumptions, could require future adjustments to tax credits and expenses already recognized. Deferred income tax and social contribution are recognized on temporary differences at the end of each reporting period, between the balance of assets and liabilities recognized in the financial statements and the related tax bases used to determine taxable profit, including the balance of income tax and social contribution losses, where applicable. Deferred tax liabilities are generally recognized for all taxable temporary differences, and deferred tax assets are recognized for all deductible temporary differences only if it is probable that the Company will have sufficient future taxable profit against which such deductible temporary differences can be utilized. Deferred tax assets and liabilities are measured at the tax rates expected to be applied in the year in which the asset or liability will be realized or settled, based on the tax rates (and tax law) in force at the balance sheet date. The recovery of deferred tax assets is reviewed at the end of each reporting period, and the balance is adjusted to the amount expected to be recovered.


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Current and deferred income tax and social contribution are recognized as expense or income in the profit or loss for the period, except when referring to items recorded in other comprehensive income (loss), as applicable.

(a) Income tax and social contribution recoverable

September 30,

2020

December 31,

2019 Income tax 156,200 153,468 Social contribution 19,999 19,624 176,199 173,092


The balances arise from prepayments made via Tax Recovery, Refund or Offset (PER/DCOMP) of PIS and COFINS, and also from withholding income tax on financial investments.

They will be recovered partially through the Company's operations and partially through refund requests filed with the Brazilian Federal Revenue Service between April 2009 and September 2020, for the total amount of R$ 156,954 up to September 2020, as adjusted based on the Special System for Settlement and Custody (SELIC) rate, as well as through requests for offsetting against other taxes administered by the Federal Revenue.

(b) Composition of deferred income tax and social contribution The balances of deferred tax assets and liabilities at September 30, 2020 and December 31, 2019, were as follows:

September 30,

2020 December 31,

2019

Assets: Income tax and social contribution losses 123,806 125,747 Temporary differences:

Adjustment to fair value - Financial assets 1,165 1,458 Provision for sales commissions 1,798 1,478 Provision for contingencies 17,243 13,495 Provision for impairment of trade receivables 2,978 3,310 Adjustment to present value 136 99 Provision for losses on inventories, obsolescence and adjustment to

market value 1,589 2,533

Provision for losses on realization of assets held for sale 251 251 Provision for impairment of property, plant and equipment - 370 Provision for tax credits 3,132 3,294 Provision for write-off of credits 17,124 18,589 Provision for import taxes 4,217 4,217 Other temporary differences 9,396 9,192


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September 30,

2020 December 31,

2019

182,835 184,033 Liabilities:

Adjustment to fair value (i) (384,705) (408,044) Property, plant and equipment - deemed cost (ii) (24,120) (24,479) Other (3,862) (4,007)

(412,687) (436,530) Net (229,852) (252,497)

(i) Refers to the fair value adjustment arising from the debt restructuring (Note 1.2). (ii) Deferred tax liabilities calculated based on deemed cost of property, plant and equipment, arising from the

accounting at fair value at initial adoption of CPC 27.

In the period ended September 30, 2020, the balances of deferred taxes on deductible temporary differences and tax losses, were limited to expected offsets against projected taxable profits. In this assessment, management also considered the annual limitation of tax loss offsets restricted to 30% of taxable income.

(c) Reconciliation of the income tax and social contribution expense

Nine-month period ended

09/30/2020

Nine-month period

ended 09/30/2019 Restated (Note 1.4) Loss before income tax and social contribution (267,655) (246,236) Standard tax rate 34% 34%

Income tax and social contribution at the standard rate 91,003 83,720 Effects of permanent exclusions in the calculation of taxes:

Tax benefits and grants 1,073 426 Unrecognized deferred taxes on income tax and social contribution losses

(69,431) (84,146)

22,645 -

Income tax and social contribution in profit or loss:

Deferred 22,645 -

22,645 -

Effective tax rate 8% 0%


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(d) Changes in deferred tax assets and liabilities

Assets Liabilities Net At January 1, 2019 31,563 (31,563) -

Deferred taxes on realization of deemed cost of property, plant and equipment resulting from the depreciation of these assets -

359

359

Tax effect on changes in temporary differences (8,784) 1,985 (6,799) Tax effect on income tax and social contribution losses generated in

the period 6,440

-

6,440

At September 30, 2019 29,219 (29,219) - At January 1, 2020 184,033 (436,530) (252,497)

Deferred taxes on realization of deemed cost of property, plant and equipment resulting from the depreciation of these assets -

359

359

Tax effect on changes in temporary differences 743 23,484 24,227 Tax effect on income tax and social contribution losses generated in

the period (1,941)

-

(1,941)

At September 30, 2020 182,835 (412,687) (229,852)

At September 30, 2020, the Company had R$ 1,698,492 of income tax and social contribution losses for which no deferred tax asset was recorded.

8. Other assets

September 30,

2020

December 31,

2019 Advances to suppliers 6,080 2,718 Advances to employees 1,799 1,285 Receivables from the sale of PP&E to third parties 5,060 5,305 Assets held for sale (ii) 5,744 3,691 Credits with financial institutions (ii) 21,145 21,081 Sundry credits (iii) - 4,670 Purchase bonus 5,018 - Other 4,367 2,329 49,213 41,079 Current 39,198 33,118 Non-current 10,015 7,961

49,213 41,079

(i) In view of the Company's Court Reorganization, certain Financial Institutions had withheld balances of

collections, pledged as collateral, related to working capital agreements that are included in the consolidation of debts under Court Reorganization.


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(ii) As provided for in the court reorganization plan, non-operating assets were auctioned during the third quarter of 2020, in order to accelerate payments to Class I - Labor creditors. Therefore, as provided for in CPC 31 - "Non-current assets held for sale and discontinued operations", the amounts corresponding to these assets were reclassified to Other Assets.

(iii) After all proceedings regarding the process of expropriation of land and warehouse in the city of Rio

Grande da Serra - SP, filed by the local municipal government, in 1988, covered by a final and unappealable decision issued by the STJ - Superior Court of Justice, Writ of Payment No. 5015/1992, resulted in a payment on March 16, 2020 made through a bank deposit in the Company's account.

9. Related parties Fertilizantes Heringer S.A. - under Court Reorganization is controlled by Heringer Participações Ltda., which holds 51.48% of the Company' shares; OCP International Coöperatieve U.A. (OCP) holds 10% of the shares, PCS Sales (Canada) INC. (PCS) holds 9.5% of the shares and the remaining 29.02% are held by various investors, with none holding more than 5% of the shares.

(a) Transactions and balances The transactions carried out between the Company and its related parties and their subsidiaries consist of commercial transactions, including the lease of a property and other operations, and are summarized below:

September 30,

2020

December 31,

2019 Assets Trade receivables JFC V-Jorf Fert. Company S.A. 112 114 OCP Fertilizantes Ltda. (i) 21 21 OCP 404 422 SAFTCO S.A. 117 117 654 674

(i) Related to amounts receivable for dispatch of raw materials in a shorter period than the originally expected (Dispatch receivable).

September 30,

2020

December 31,

2019 Current liabilities Trade payables (i)

OCP 244,905 163,123 OCP Fertilizantes Ltda. 27

SAFTCO S.A. - 21,251 JFC V-Jorf Fert. Company 1 244,933 184,374


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September 30,

2020

December 31,

2019 Non-current liabilities Trade payables - CR

Canpotex Limited 5,420 4,731 JFC V-Jorf Fert. Company 6,080 2,400 SAFTCO S.A. 11,409 826

OCP 6,182 4,475 OCP Fertilizantes Ltda. 29,599 28,845

58,690 41,277 Borrowings - CR (ii) Dalton Dias Heringer 19,285 18,376 Dalton Carlos Heringer 9,108 9,254 Juliana Heringer Rezende 3,237 3,285

Eny de Miranda Heringer 8,082 8,560 39,712 39,475 98,402 80,752

343,335 265,126

(i) These arise from purchases of inputs, carried out in the normal course of the Company's

business, and also balances payable considered as first priority claims in the court reorganization process.

(ii) Loans payable to related parties are recorded in the balance sheet within Borrowings - CR.

Results of operations


09/30/2020


09/30/2019 Sales revenue

Dalton Dias Heringer (i) 36 10 36 10 Cost of sales

Dalton Dias Heringer (i) (45) (7) (45) (7)

Other operating income OCP 13 34 Dalton Dias Heringer 14 19 27 53 Finance costs

Interest on loans (237) (441) (237) (441)


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Results of operations


09/30/2020


09/30/2019 Purchases OCP Fertilizantes Ltda. 26 1,198 Saftco - 233 OCP 99,143 58,576 JFC V-Jorf Fert.Company 17,284 5,128 Dalton Dias Heringer - 4 116,453 65,139 (i) Sales of byproducts derived from the production process. In the first quarter of 2015, the Company entered into contracts with the current stockholders OCP and PCS for the purchase of phosphate and potassium fertilizers, respectively. The contracts are effective for ten years and renewable for another five years. In December 2016, the Company approved the amendment to the Contract signed with Canpotex (a subsidiary of PCS), which established certain payment terms for the supply of products and determined compensatory interest. The Company also approved the execution of a Contract with OCP, which provides the Company with a credit facility related to the commercial contract for the supply of phosphate fertilizers, and determines compensatory interest. These contracts are backed by guarantees from related parties. As the circumstances that caused the Company's filing for court reorganization affected its ability to

proceed with its commercial commitments entered into up to that date, the contracts with the

aforementioned related parties lost their effectiveness, however, after the filing for court reorganization

the Company has been making frequent purchases with OCP, under market conditions not contractually

established.

Regarding the guarantees related to the properties, they remain unchanged.

(b) Key management remuneration In the periods ended September 30, 2020 and 2019, total key management remuneration are as follows:


09/30/2020

Nine-month period ended 09/30/2019

Salaries and payroll charges 967 1,384 Management fees 1,157 1,698 Private pension plan 124 165 Other 33 49 2,281 3,296


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10. Property, plant and equipment Land and buildings comprise mainly factories and offices. Property, plant and equipment are stated at historical cost, less accumulated depreciation and/or accumulated impairment losses, if applicable. This cost was adjusted in order to reflect the deemed cost of land, buildings, and machinery and equipment on the date of transition to IFRS/CPCs. Historical cost includes expenditure that is directly attributable to the acquisition of the items, as well as the cost of replacing parts of such items, and borrowing costs for long-term construction projects, if the recognition criteria are met. Depreciation is calculated on the straight-line method, in accordance with the rates disclosed below. Land is not depreciated. Depreciation rates - % p.a.

Nominal Weighted

average Buildings and constructions From 1,8 to 25 3.47 Machinery, equipment and industrial facilities From 4 to 50 11.96 Other From 10 to 50 17.96 A property, plant and equipment item is derecognized upon disposal or when no future economic benefit is expected from its use or sale. Any gain or loss arising from the derecognition of an asset (measured as the difference between the net selling price and the carrying amount of the asset) is recognized in profit or loss for the year in which the asset is derecognized. The assets' net book values and useful lives, and the depreciation methods are reviewed at the end of each reporting period and adjusted prospectively, where applicable.


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Land

Buildings

and constructions

Machinery, equipment and industrial facilities

Other

Construction in progress

Total

At January 1, 2019 66,340 305,053 79,423 8,771 11,032 470,619 Purchases - - 65 6 451 522 Disposals - (30) (1,919) (236) (602) (2,787) Depreciation - (8,992) (11,593) (2,185) - (22,770) Transfers (i) - 1,404 1,056 70 (3,519) (989) At September 30, 2019 66,340 297,435 67,032 6,426 7,362 444,595

At January 1, 2020 66,340 294,439 63,516 4,676 7,781 436,752 Purchases - - 239 115 19,517 19,871 Disposals - (250) (2,107) (142) - (2,499) Depreciation - (7,641) (11,290) (1,623) - (20,554) Transfers (i) - (862) 5,932 52 (5,122) - Reversal of provision for impairment (ii) - 746 343 - - 1,089 At September 30, 2020 66,340 286,432 56,633 3,078 22,176 434,659

At December 31, 2019 Cost 66,340 384,164 322,408 31,571 7,781 812,264 Depreciation - (89,725) (258,892) (26,895) - (375,512) Net book value 66,340 294,439 63,516 4,676 7,781 436,752

At September 30, 2020 Cost 66,340 381,648 321,847 30,758 22,176 822,769 Depreciation - (95,963) (265,557) (26,590) - (388,110) Net book value 66,340 285,685 56,290 4,168 22,176 434,659 Disposals (250) (2,107) (142) (2,499)

- Cost (1,354) (6,734) (980) (9,068) - Depreciation 1,404 4,626 838 6,868


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(i) As provided for in the court reorganization plan, non-operating assets were auctioned in September and October, 2020, to accelerate payments to Class I - Labor creditors. Therefore, as provided for in CPC 31 - "Non-current assets held for sale and discontinued operations", the amounts corresponding to these assets were reclassified to Other Assets. (ii) In the period ended September 30, 2020, the Company wrote off impaired assets reversing the provision recognized in the year ended December 31, 2019.

Certain property, plant and equipment items amounting to R$ 283,250 at September 30, 2020 (R$ 325,212 at December 31, 2019) were pledged as collateral for transactions with suppliers, including related parties, and borrowings.

Impairment tests for property, plant and equipment

In the year ended December 31, 2019, in view of the economic and financial situation, the suspension of certain units and the difficulty in estimating the value in use of these assets, the Company's management contracted a specialized firm to assess the market value of assets presented in an appraisal report at market value (sale price loss cost of sales) of property, plant and equipment items. For the purposes of assessing impairment, assets were grouped at the lowest levels for which there are separately identifiable cash flows, as follows: (i) Category of asset and (ii) Cash-generating unit ("CGU"). Management determined as a CGU each of the Company's production units (including units in operation or suspended). In order to obtain the fair value of the assets, net of cost of sales, the appraiser used valuation methods recognized in the market. The methodology is described below:

(i) Industrial machinery and equipment The assessment of the net fair value of cost of sales was made using the replacement method, which reproduces results of greater reliability, obtaining the value of new assets, equal or similar, from the manufacturers, or used, from the specialized market, considering the state of conservation, maintenance, physical depreciation and technological depreciation. The values presented as the current replacement cost of the appraised assets were established based on catalogs, quotations and/or price lists requested, equal or similar, for payment in cash, directly with manufacturers, sales representatives or traders and for equipment developed within the company, by internal cost spreadsheets. Depending on the state of conservation of each asset, a scale from 0 to 100% in relation to the new asset, equal or similar to that quoted, was adopted. For the cases that were quoted on the pre-owned asset market, a percentage of 100% was attributed to the assets in the state of conservation in which they were. To determine the state of conservation of the assets, the criteria recommended by a professional with technical knowledge in his area of operation were adopted, based on an "in-loco" inspection, estimating a residual value at the end of their remaining useful life.


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(ii) Land, buildings and constructions

For land, buildings and constructions, the assessment of the net fair value of cost of sales was carried out by applying the comparative method of market data with the application of statistical inference, which was performed using specialized software with data gathered from the local real estate market at specific levels of precision and rationale. For the appraisal of the land, sales values for similar properties in the surrounding region were verified, as well as prices and research carried out with the real estate market in the region, for areas on offer, and homogenized to the same standards. For buildings and improvements, the cost of reproduction or replacement of similar buildings was considered, according to the project or official standard costs with calculation of variables of increases or decreases, in addition to the respective depreciations, considering the state of conservation in which they were found during the technical inspections. The cost/m2 values were gathered from the PINI table, prepared and released monthly by the Civil Construction Industry Union in the State of SP, in compliance with Law 4,591, seeking an economic magnitude, and means for inevitable errors to be within tolerance, thus reaching the correct market value of the assets at the appraisal date. The impairment test resulted in an adjustment of R$ 1,089 at December 31, 2019. In the nine-month period ended September 30, 2020, the Company wrote off impaired assets and reversed the provision. The Company considers that there are no material changes in the market that could affect the fair value of property, plant and equipment in relation to the amounts determined in the year ended December 31, 2019.


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11. Trade payables Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due in one year or less. If not, they are presented as non-current liabilities. Trade payables are recognized initially at fair value and subsequently measured at amortized cost using

the effective interest method.

September 30,

2020

December 31,

2019 Domestic trade payables 93,548 81,949 Foreign trade payables (i) 268,958 161,324 362,506 243,273


(i) The Company purchases most of its raw materials from foreign suppliers. Payables are

denominated in U.S. dollars. At September 30, 2020, the present value adjustment of R$ 19,329 was calculated on purchase bonus from foreign suppliers, for which such balances will only be deducted from future trade payables after the obligations under Court Reorganization are settled. At September 30, 2020, considering the existence of immediate liquidity guarantees with creditors, the amount of R$ 302,180 was considered as out-of-court in the Court Reorganization, of which R$ 289,038 is presented in current liabilities and R$ 13,143 in non-current liabilities. Consequently, it does not follow the payment flows presented in the Court Reorganization and for this reason it is presented separately in liabilities. The remaining balance refers to amounts payable in the normal course of the Company's operations, there is no outstanding balance at September 30, 2020.


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12. Borrowings Borrowings are financial liabilities, which are recognized initially at fair value, when the funds are received, net of transaction costs incurred and are subsequently presented at amortized cost, that is, plus charges, interest, and unamortized transaction costs in proportion to the period incurred, using the effective interest rate method. Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period. The book value and fair value of borrowings are described in Note 23.

At September 30, 2020, the Company did not have any contract with a restrictive financial clause.

Contractual interest rate

Effective interest rate

September 30, 2020

December 31, 2019

Local currency Working capital (i) 17.4% p.a. 17.4% p.a. 306,272 153,033 FINAME 2.5% p.a. 2.5% p.a. 60 229 Other obligations (ii) Libor + 3.0% p.a. Libor + 3.0% p.a. 11,308 9,376 317,640 162,638 Current 281,912 162,601 Non-current 35,728 37

317,640 162,638

Additional information on the types of borrowings contracted by the Company is shown below:

i) This relates to loans obtained from financial institutions. In the nine-month period ended September 30, 2020, working capital operations in current liabilities refer basically to Credit Rights Investment Funds (FIDC).

ii) Refers to transactions carried out with a coffee exporting trading company, which, at September 30, 2020, financed rural producers by purchasing agricultural inputs in the amount of R$ 11,308.


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iii) Composition of borrowings The borrowings mature as follows:

September 30,

2020

December 31,

2019

2020 226,579 162,601 2021 onwards 91,061 37 317,640 162,638

The Company recorded financial charges on borrowings incurred up to the date of approval of the filing for Court Reorganization, which occurred on February 6, 2019, as determined in article 9, item II of Law 11,101/2005.


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iv) Changes in borrowings

Import financing

Working capital - USD

Working capital - R$

Other obligations

FINAME BNDES Intercompany

loan Total At January 1, 2019 497,767 36,759 341,156 1,931 7,340 46,028 71,236 1,002,217 Proceeds from new borrowings 34,838 - 843,303 - 9,100 - 1,407 888,648 (-) Repayment of principal, including realized foreign exchange variation (42,250) - (671,148) (1,401) (5,450) - - (720,249) (-) Payment of interest (2,669) - (15,734) (57) - - - (18,460) (-) Offsetting credits and court-ordered debts in guarantee (ii) (139,664) - - - (139,664) Transfers - - (34,953) - - - 34,953 - Provision for interest 2,302 928 (1,105) 53 - 566 441 3,185 Unrealized foreign exchange variation 39,009 - - - - - - 39,009 At September 30, 2019 528,997 37,687 321,855 526 10,990 46,594 108,037 1,054,686

At January 1, 2020 - - 153,033 229 9,376 - - 162,638 Proceeds from new borrowings - - 1,138,059 - 2,152 - - 1,140,211 (-) Repayment of principal, including realized foreign exchange variation - - (999,224) (169) (220) - - (999,613) (-) Payment of interest - - (21,321) (5) - - - (21,326) Provision for interest - - - 5 - - - 5 Transfers (ii) - - 35,725 - - - - 35,725

At September 30, 2020 - - 306,272 60 11,308 - - 317,640

(i) Offsetting credits and court-ordered debts in guarantee with the financial institution, which ended the proceeding on April 2, 2019. (ii) In June 2020, the judge responsible for the court reorganization upheld the motion to grant priority status for balance with one of its creditors and, therefore, such

amount was transferred from the Company's court reorganization amounts and reclassified to non-current borrowings.


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13. Debts included in Court Reorganization As mentioned in Note 1.2, on December 3, 2019, the Company's Court Reorganization Plan was approved by the General Meeting of Creditors. At December 31, 2019, as a result of the approval of the court reorganization plan at the General Meeting of Creditors and ratification of the Court Reorganization by the court, the Company's management assessed in accordance with CPC 48/IFRS 9 - Financial Instruments that the terms and conditions originally signed between the Company and its creditors were substantially modified, so that the original financial liability was extinguished and a new financial liability was created, this measured on initial recognition at fair value. The Company carried out the subsequent measurement of such liabilities at amortized cost, considering the effective interest rates, for the purposes of calculating the updated amount by class and option of each creditor, including recognizing the effect of the foreign exchange variation of the debts in foreign currency. Under these assumptions, the carrying amount of the Company's obligations under Court Reorganization totals R$ 972,622 at September 30, 2020. The aforementioned court reorganization plan categorized the Company's debts in four classes in accordance with Law 11,101/2005, as follows:

September 30,

2020

December 31,

2019 Trade payables - CR (i) Class II - Secured 100,528 68,289 Class III - Unsecured 318,712 252,921 Class IV - Unsecured (ME/EPP) 3,993 3,703 423,233 324,913 Current 751 3,025 Non-current 422,482 321,888 423,233 324,913 Borrowings Class II - Secured 124,580 120,015 Class III - Unsecured 395,150 295,953 519,730 415,968 Current - 39 Non-current 519,730 415,929 519,730 415,968


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September 30,

2020

December 31,

2019 Salaries and payroll charges (ii) Class I - Labor 17,577 28,220 Current 17,577 23,507 Non-current - 4,713 17,577 28,220

(i) Refer to debts arising from purchases of raw materials, rendering of services and purchases of indirect materials, and balances of Advances from customers.

(ii) The liability recorded under Salaries and payroll charges - CR refers to debts arising from labor indemnities of employees terminated in the period between January and February 2019 resulting from the Company's restructuring process, and to the balances of salaries due to employees who remained active.

14. Contingencies

The Company is a party to legal and administrative proceedings arising in the normal course of its business. The provisions for losses arising from these matters are estimated and periodically adjusted by management, under the advice of its legal counsel.

The provision for contingencies at September 30, 2020 and December 31, 2019, was comprised as follows:

September 30,

2020

December 31,

2019 Nature of the contingencies:

Tax and administrative 1,070 786

(-) Judicial deposits (81) (685)

989 101

Labor and social security (a) 31,120 32,036

(-) Judicial deposits (3,274) (3,343)

27,846 28,693

Civil and environmental 8,483 6,163

(-) Judicial deposits (8) (303)

8,475 5,860

Total provision for contingencies 40,673 38,985

(-) Judicial deposits (3,363) (4,331)

37,310 34,654

(a) Labor and social security proceedings arise in the normal course of the Company's business and relate mainly to claims by former employees, as well as to disputes regarding the calculation and payment of social security charges.


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i) Changes in the provision for contingencies In the periods ended September 30, 2020 and 2019, changes in the provision for contingencies are as follows:

September 30,

2020

September 30,

2019

Opening balance 38,985 30,015

Constitution (reversal) of provision, net 436

(337)

Interest accruals 1,252 43 Closing balance 40,673 29,721

ii) Judicial deposits linked and not linked to proceedings provisioned

September 30,

2020

December 31,

2019

Tax and administrative 13,958 15,261 Civil and environmental (i) 2,243 10,063 Social security 3,500 3,432 Labor 3,532 3,618 23,233 32,374 Classified as reduction of the provision for contingencies (3,363) (4,331)

Balance of judicial deposits - Non-current assets 19,870 28,043

(i) The reduction in the balance of civil and environmental judicial deposits mainly arises from the

offsetting of R$ 7,700 thousand for payment of creditor participating in the in-court reorganization process (Note 1.3).


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iii) Contingent liabilities The Company is a party to the tax, social security, labor, administrative, civil, and environmental proceedings presented below, involving risks of loss classified by management under the advice of its legal counsel, as possible risk of loss, for which no provision has been recorded.

September 30,

2020

December 31,

2019

Tax and administrative (i) 228,903 241,484 Labor and social security (ii) 33,056 61,534 Civil and environmental (iii) 29,099 51,818 291,058 354,836

The amounts presented above are accrue charges at the SELIC rate or, where applicable, on the calculations made by the Company's legal advisors. (i) Tax proceedings refer substantially to tax assessment notices received by the Company as a result

of the utilization of PIS and COFINS to offset IRPJ and CSLL, which are the subject of questioning by the tax authorities (Note 6), in the amount of R$ 191,391 (R$ 206,459 at December 31, 2019). Additionally, the Company has tax proceedings involving ICMS in the amount of R$ 10,762 (R$ 10,472 at December 31, 2019), resulting from tax assessment notices and differing interpretations between the tax authorities and the Company. The main disputes are currently at the administrative level. The Company’s legal advisors monitor the progress of the proceedings and assess the risk of loss; as the likelihood of loss is possible, no provision has been recorded.

(ii) Labor and social security proceedings arise in the normal course of the Company's business and relate mainly to claims by former employees, as well as to disputes regarding the calculation and payment of social security charges. The Company's management monitors the progress of these proceedings, and, together with its legal advisors, assesses the existence of evidence of the need for cash disbursement. The decrease in the amounts of contingent labor liabilities occurred mainly due to two labor lawsuits in which the Company obtained favorable decisions, changing their classification to "remote", according to the opinion of the legal counselors.

(iii) Civil and environmental lawsuits - with claims for compensation for personal damages to residents of the community near the plant - are substantially related to the Public Civil Action that has as its object the Paranaguá unit, which, during the first half of 2020, witnessed a substantial reduction in the number of lawsuits, and the remainder subject to reviews for the provisioned amounts.


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iv) Public Civil Action against the unit of Paranaguá - PR In February 2009, the Federal Public Prosecution Office and that of the State of Paraná filed a Public Civil Action which claimed irregularities in the licensing process and alleged environmental damages caused by the SSP (Simple Superphosphate) plant in Paranaguá, in the state of Paraná. The likelihood of an unfavorable outcome to the Company for the request of the Public Prosecution Offices to demolish the buildings and vacate the area, are classified as remote by management, under the advice of its legal counsel. In May 2018, the trial court ruled the matter partially valid, determining that a new licensing process should be performed, with the preparation of an Environmental Impact Study and Report (EIA/RIMA). The sentence also established that a public hearing should be held, concerning the resuming of the SSP production activities, which are currently suspended. The Company was sentenced to pay R$ 500 for collective damages. The provision including accruals amounts to R$ 1,585.

v) Acquisition of tax credits and their utilization for offsetting against taxes due In February 2003, the Company acquired tax credits from a federal tax overpayments. A credit assignment agreement was signed and filed with the Registry of Deeds and Documents, and the substitution of the creditor was also requested and approved by the Federal Court, through a decision declared final and unappealable. At September 30, 2020, R$ 33,672 (R$ 32,878 - at December 31, 2019) refers to the indexation of tax credits by the IPCA-E, which the Company is awaiting for payment request from the Federal Government.

15. Equity (a) Share capital

The Company's share capital is fully comprised of common shares with no par value. Incremental costs directly attributable to the issue of new shares or options, where applicable, are shown in equity as a deduction from the proceeds, net of taxes. Pursuant to the Company's bylaws, the Board of Directors is authorized to increase the share capital up to the limit of R$ 800,000. The Company's subscribed capital at September 30, 2020 and December 31, 2019 is R$585,518, represented by 53,857,284 shares.

(b) Carrying value adjustments

Carrying value adjustments relate to the deemed cost of land and buildings recorded on the date of transition to CPCs and IFRS.


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(c) Appropriation of results and revenue reserves - tax incentives At September 30, 2020, the amount that would be transferred to revenue reserve - tax incentives amounting to R$ 3,156 was used to offset accumulated losses. These tax incentives have been used to reduce the accumulated deficit since December 31, 2008. At June 30, 2019, the annual tax incentive amounts used to offset accumulated losses, and which must be replaced to form the revenue reserve once profits are available, were as follows: 2008 to 2017 2018 2019 2020 Total PSDI (i) 208,546 8,871 87 - 217,504 Desenvolve (ii) 10,217 7,188 1,499 3,156 22,060 Other incentives received (iii) 6,685 - - - 6,685 225,448 16,059 1,586 3,156 246,249

Tax benefit of ICMS reduction:

(i) Tax incentive granted in December 2003, in connection with the Company's participation in the Sergipe

Industrial Development Program (PSDI) - Government of the State of Sergipe (SE), which involves a tax benefit corresponding to a 92% decrease in the Value-added Tax on Sales and Services (ICMS) amount calculated in the manufacturing unit located in Rosário do Catete (SE). The program expires on September 26, 2028.

(ii) Granted in November 2014 in connection with the Company's participation in the Program "Desenvolve"

from the Government of the State of Bahia (BA), which involves a tax benefit corresponding to a 90% decrease in the ICMS amount calculated in the manufacturing unit located in Candeias (BA). The program expires on October 31, 2026.

(iii) The Company is entitled to a 75% reduction in income tax payable, determined based on ‘development

profit’ for a 10-year period from the grant date, in accordance with Article 1 of Provisional Measure 2,199-14, of August 24, 2001. Incentive obtained from the Brazilian Northeast Development Agency - SUDENE and the Superintendence for the Development of the Amazon - SUDAM: (a) in 2011, the benefit was granted to the Camaçari (BA) unit, and is valid until 2020; (b) from 2014, the benefit was granted to the two units of Rondonópolis, State of Mato Grosso (MT), valid until 2023; and (c) as from 2016, the benefit was also granted to the unit in Candeias (BA), valid until 2025.

The benefits are directly recorded in the statement of operations and subsequently transferred from "Retained earnings" to "Revenue reserve - tax incentives". This reserve can only be used to increase capital or offset losses. Amounts used to offset losses must be subsequently transferred to reconstitute the original reserve account, to the extent that profits are available, in order to avoid possible tax contingencies, as this reserve cannot be distributed to stockholders, under penalty of having the benefit canceled. There is no tax incentive reserve in equity since there is accumulated deficit.


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16. Other liabilities

September 30, 2020

December 31, 2019

Other payables (i) 25,784 34,066 Demurrage payable 13,809 12,934 Import cost payable 28,579 10,669 Provision for commissions 5,287 4,347 Apportionments of imports 43 242 Other - 343 73,502 62,601

Current 73,502 62,601 Non-current - -

73,502 62,601

(i) Refers to labor provisions related to articles 467 and 477 of the Consolidation of Labor Laws (CLT), which deal with fines for late payment in severance payments of R$ 10,043 (R$ 10,043 at December 31, 2019), and administrative and financial consulting expenses related to the court reorganization of R$ 15,741 (R$ 24,023 at December 31, 2019).

17. Earnings (loss) per share

Shares and results used to calculate basic and diluted earnings (loss) per share for the periods ended September 30, 2020 and 2019 (in thousands, except earnings (loss) per share) are shown below:


09/30/2020


Restated (Note 1.4) Loss attributable to stockholders of the Company (245,452) (246,236) Weighted average number of common shares outstanding (thousands) 53,857

53,857

Basic earnings (loss) per share - R$ (4.5575) (4.5720)


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During the periods ended September 30, 2020 and 2019, the Company did not carry out transactions involving potentially dilutive common shares that generated differences between basic and diluted earnings (loss) per share. There are no dilution of losses.

18. Net operating revenue The Company uses the conceptual framework for revenue recognition, which is based on the five-step model: (i) identification of contracts with customers; (ii) identification of performance obligations in contracts; (iii) determination of the transaction price; (iv) allocation of the transaction price to the performance obligation provided in contracts and (v) recognition of revenue when the performance obligation is satisfied. Revenue is recognized when there is no performance obligation to be fulfilled by the Company, once control over products is transferred to the customer, that is, for Free on Board (FOB) sales. Revenue is recognized when the customer, using its own vehicles, collects the product at the units of the Company; and, for Cost, Insurance and Freight (CIF) sales, revenue is recognized only after the products are delivered at the location established by the customer, which has the ability to determine the manner in which they will be used and to obtain substantially all benefits from the product. Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services in the ordinary course of the Company's activities. Revenue is shown net of taxes, returns, rebates and discounts.

The reconciliation between gross and net sales revenue is as follows:

Quarter ended

09/30/2020 Quarter ended

09/30/2019 Gross sales of products 721,958 372,172 (-) Deductions from gross sales revenue:

Unconditional rebates and discounts, canceled sales and sales returns (2,433) (1,855) Taxes on sales (8,120) (4,132) Tax incentives - ICMS (PSDI) - - Tax incentives - ICMS (Desenvolve) 816 689

712,221 366,874


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Nine-month period

ended 09/30/2020 Nine-month period ended 09/30/2019

Gross sales of products 1,413,618 704,413 (-) Deductions from gross sales revenue:

Unconditional rebates and discounts, canceled sales and sales returns (5,185) (4,012) Taxes on sales (18,465) (8,900) Tax incentives - ICMS (PSDI) - 87 Tax incentives - ICMS (Desenvolve) 3,156 1,166

1,393,124 692,754

19. Costs and expenses by nature Expenditures related to freight of raw and auxiliary materials purchased are included in the cost of inventories, and subsequently to cost of sales, when the products are sold. Freight expenses related to the delivery of the products, as well as commission expenses on sales, are recorded as "Selling expenses", when incurred. Other costs are recognized on the accrual basis. The Company opted to classify the statements of operations by function. Breakdown by nature is as

follows:

Quarter ended


09/30/2019

Raw materials and consumables used in production 574,080 302,222 Transportation expenses 15,059 15. 8,642 Personnel expenses (Note 22) 25,654 125.8 20,977 Selling expenses 5,944 6 5,407 Depreciation and amortization 6,821 7,508 Profit sharing (Note 22) 3,396 (1,450) Advertising expenses 173 187 Operating leases 20 52 Other expenses 24,458 22,078 655,605 365,623

Classified as: Cost of sales and services 599,320 322,601 Selling expenses 29,980 22,562 General and administrative expenses 26,305 20,460

655,605 365,623


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09/30/2020


09/30/2019

Raw materials and consumables used in production 1,141,686 597,127 Transportation expenses 31,974 16,133 Personnel expenses (Note 22) 68,726 83,703 Selling expenses 11,680 10,702 Depreciation and amortization 20,899 23,011 Profit sharing (Note 22) 4,461 44 - Advertising expenses 431 465 Operating leases 67 432 Other expenses 52,661 54,669 1,332,585 786,242

Classified as: Cost of sales and services 1,204,222 662,184 Selling expenses 66,787 59,421 General and administrative expenses 61,576 64,637

1,332,585 786,242

20. Foreign exchange variation, net Foreign currency transactions are translated into the functional currency using the foreign exchange rates prevailing at the dates of the transactions or the dates of valuation when items are remeasured. Foreign exchange gains and losses arising from the settlement of these transactions and the translation at the year-end exchange rate of assets and liabilities in foreign currencies are recognized in the statement of operations.

Quarter ended

09/30/2020

Quarter ended

09/30/2019 Foreign exchange gains 34,272 50,095 Foreign exchange losses (i) (52,324) (182,851)

(18,052) (132,756)


09/30/2020


09/30/2019 Foreign exchange gains 39,894 117,659 Foreign exchange losses (i) (275,375) (234,408)

(235,481) (116,749)

(i) Foreign exchange variation generated by the increase in exchange rate in the period, related to

the debt included in the Court Reorganization process.


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21. Finance income and costs

Interest income (expense) is recognized on the accrual basis, using the effective interest rate method. Other finance income and costs are recognized on the accrual basis.

Quarter ended


09/30/2019 Restated (Note 1.4) Finance costs

Losses on derivative financial instruments - - Interest on financial liabilities and discounts obtained (28,957) (10,596) Interest on liabilities included in the court reorganization (13,499) - Expenses with adjustment to present value (1,857) (979) Taxes and fees on financial transactions (850) (176) Indexation charges (109) (167)

(44,659) (11,918) Finance income

Indexation credits 1,238 4,582 Income from adjustment to present value 4,880 2,710 Gains on derivative financial instruments - - Income from financial investments 13 1 Interest on financial assets and discounts obtained 1,051 416

7,182 7,709 (37,477) (4,209)


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09/30/2020


Restated (Note 1.4) Finance costs Losses on derivative financial instruments - (149,934) Interest on financial liabilities and discounts obtained (75,966) (33,123) Expenses with adjustment to present value (1,859) (5,375) Interest on liabilities included in the court reorganization (57,327) - Taxes and fees on financial transactions (2,146) (3,988) Indexation charges (904) (93) (138,202) (192,513) Finance income Indexation credits 11,863 16,925 Income from adjustment to present value 28,209 11,641 Gains on derivative financial instruments - 135,526 Income from financial investments 48 169 Interest on financial assets and discounts obtained 2,047 996 42,167 165,257 (96,035) (27,256)


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22. Employee expenses

Employee expenses are shown below:

Quarter ended


09/30/2019

Wages and salaries 13,888 11,570 Indemnities 1,862 1,343 Social security expenses 3,801 3,157 Benefits provided for in law 1,391 1,591 Additional benefits (i) 4,712 3,316

25,654 20,977

Profit sharing 3,396 (1,450)

29,050 19,527


09/30/2020


09/30/2019

Wages and salaries 38,561 37,749 Indemnities 2,984 21,772 Social security expenses 10,129 8,832 Benefits provided for in law 5,350 4,355 Additional benefits (i) 11,702 10,995

68,726 83,703

Profit sharing 4,461 -

73,187 83,703

(i) Health care plan, life insurance, private pension plan (defined contribution), income benefit and meal vouchers.


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23. Fair value of financial instruments The Company carries out transactions with a number of financial instruments, particularly cash and cash equivalents, trade receivables, trade payables and borrowings.

The financial instruments by category are as follows:

September 30, 2020

Assets at fair value through

profit or loss

Amortized cost

Total Assets, as per balance sheet

Cash and cash equivalents - 25,624 25,624 Trade receivables 112,907 87,636 200,543 Other assets, excluding advances made - 26,318 26,318 Judicial deposits - 19,870 19,870 Judicial deposits as reduction of prov. for contingencies -

3,363

3,363

112,907 162,811 275,718

September 30, 2020

Other financial

liabilities

Total Liabilities, as per balance sheet Borrowings (317,640) (317,640) Borrowings - CR (519,730) (519,730) Trade payables (362,506) (362,506) Trade payables - CR (423,233) (423,233) Other liabilities, excluding prepayments (73,448)

(73,448)

(1,696,557) (1,696,557)


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December 31, 2019

Assets at fair value

through profit or loss

Amortized

cost

Total Assets, as per balance sheet

Cash and cash equivalents - 20,034 20,034 Trade receivables 106,922 65,668 172,590 Other assets, excluding advances made - 31,182 31,182 Judicial deposits - 28,043 28,043 Judicial deposits as reduction of the provision for contingencies -

4,331

4,331

106,922 149,258 256,180

December 31, 2019

Liabilities measured at fair value through

profit or loss

Other financial

liabilities

Total Liabilities, as per balance sheet

Borrowings 162,638 162,638 Borrowings - CR 415,968 415,968 Trade payables 243,273 243,273 Trade payables - CR 324,913 324,913 Other liabilities, excluding prepayments 24,172 24,172

740,881 430,083 1,170,964

The Company's financial instruments, by carrying amount and fair value in the financial statements, are as follows:

September 30, 2020

Carrying amount Fair value

Financial assets Cash and cash equivalents 25,624 25,624 Trade receivables 200,543 200,543 Other assets, excluding advances made 26,318 26,318 Judicial deposits 19,870 19,870 Judicial deposits, as reduction of the provision for contingencies 3,363 3,363 Financial liabilities Borrowings (317,640) (317,640) Borrowings - CR (519,730) (519,730) Trade payables (362,506) (362,506) Trade payables - CR (423,233) (423,233) Other liabilities, excluding prepayments (73,448) (73,448)


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December 31, 2019

Carrying amount Fair value

Financial assets Cash and cash equivalents 20,034 20,034 Trade receivables 172,590 172,590 Other assets, excluding advances made 31,182 31,182 Judicial deposits 28,043 28,043 Judicial deposits, as reduction of the provision for contingencies 4,331 4,331

Financial liabilities Borrowings (162,638) (162,638) Borrowings - CR (415,968) (415,968) Trade payables (243,273) (243,273) Trade payables - CR (324,913) (324,913) Other liabilities, excluding prepayments (24,172) (24,172)

The fair value of financial assets and liabilities represents the amount for which the instrument could be exchanged between willing parties in an arm's length transaction, rather than in a forced sale or liquidation. The following methods and assumptions were used to estimate fair value:

• Cash and cash equivalents, trade receivables and trade payables approximate their carrying amount mainly due to the short-term maturity of these instruments.

• The fair value of borrowings is estimated by means of the discounted future cash flows, using rates currently available for debts of similar remaining terms (Note 12).

Fair value hierarchy - Derivative financial instruments

September

30, 2020 December

31, 2019

Level II Level II

Financial assets Sub-portfolio traded - FIDC 112,907 106,922 Financial liabilities Trade payables - CR 324,913 Borrowings - CR 415,968 At September 30, 2020 and December 31, 2019, there were no other assets and liabilities measured at fair value.


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24. Financial risk management objectives and policies

(a) Financial risk management policy The Company's activities expose it to a variety of financial risks: market risk (including currency risk, interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. The Company's risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Company's financial performance.

The Company periodically reviews the credit limits and creditworthiness of its customers. In view of the policies established for derivative financial instruments, management considers the occurrence of non-measurable risk situations to be unlikely.

(b) Market risk Interest rate risk This risk arises from the possibility that the Company may incur losses due to fluctuations in interest rates which increase the finance costs related to borrowings obtained in the market. The greater part of the Company's debts is included in the Court Reorganization, with fixed interest rates based on the TR rate for domestic debts or LIBROR for foreign debts, when applicable. As the Company has no significant interest-earning assets, its results and operating cash flows are not significantly affected by changes in market interest rates. Foreign exchange risk The Company operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the U.S. dollar. This risk arises from the possibility that the Company may incur losses due to fluctuations in exchange rates, which may increase the amounts of the transactions denominated in foreign currencies.


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At September 30, 2020 and December 31, 2019, the assets and liabilities in foreign currency, financial instruments that mitigate exchange rate risks, and the net exposure to exchange rate risk, are summarized as follows:

Period for the expected financial

impact

September 30,

2020

December 31,

2019 Imports in transit (Note 5) USD 33,826,000 (USD 5,027,000 at 12/31/2019)

Up to 35 days (190,803) (20,261)

Trade payables - foreign (Note 11) USD 47,682,000 (USD 38,720,000 at 12/31/2019)

Up to 180 days

268,958

161,324 Trade payables - CR USD 66,136,000 (USD 65,650,000 at 12/31/2019) (Note 13)

Up to the year 2045

373,051

264,615

Borrowings - CR USD 52,542,000 / € 48,000 (USD 74,924,000/ € 18,000 at 12/31/2019) (Note 13)

Up to the year 2045 296,644 299,982

747,850 705,660 Foreign trade receivables USD 176,000 (USD 249,000 at 12/31/2019) (Note 4)

Up to 30 days

(992)

(1,003)

Net exposure 746,858 704,657 Because of the significance of raw material imports to the Company's operations, the volatility of the foreign exchange rate represents a significant risk. If the effects of a devaluation of the Brazilian Real are not passed on to sales prices, or if an appreciation of the Brazilian Real is passed on to sales prices, significant reductions in profit margins could occur and, consequently, pose a significant risk to the Company's operations. In a scenario of raw materials with stable prices in U.S. Dollars on the international market, the Company's inventories provide a natural hedge for its liabilities denominated in foreign currency.

(c) Credit risk Credit risk arises from cash and cash equivalents, derivative financial instrument, deposits with banks and financial institutions, as well as credit exposures with customers, including receivables outstanding. The Company limits its exposure to credit risks associated with banks and financial investments by investing with prime financial institutions, in accordance with pre-established limits and ratings, and entering into derivative transactions only with financially sound counterparties. No credit limits were exceeded during the reporting period, and management does not expect any losses from non-performance by these counterparties. The credit quality of other financial assets that are neither past due nor impaired is assessed by reference to external credit ratings issued by a specialized company, if available, or to historical information about counterparty default rates:


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September 30,

2020

December 31,

2019 Current accounts and short-term bank deposits

Low risk for long term 25,624 20,034

25,624 20,034 The Company's sales policy is closely associated with the credit risk level it is willing to accept in the normal course of its business. The diversification of its receivables portfolio, the selectivity in accepting customers, as well as the monitoring of sales terms per business segment and individual limits of position, are the procedures adopted to minimize possible default problems in accounts receivable.

Due to the widespread customer base, the credit risk arising from transactions with customers is managed by means of an individual analysis of the Company's customers, which takes into account their payment history, prospects for growth of the customer's business and their ability to pay.

(d) Liquidity risk This is the risk of the Company not having sufficient liquid funds to meet its financial commitments, due to the mismatch of terms or volume in expected receipts and payments. To manage liquidity of cash in local and foreign currency, policies for future disbursements and receipts are determined, and monitored daily by the Head of Finance and Controllership together with Financial Management.

The table below presents the Company's financial liabilities, by maturity ranges, corresponding to the period from the balance sheet date to the maturity date established in the contracts. The amounts disclosed in the table are the contractual undiscounted cash flows. The balances due up to 12 months are equal to the book balances, as the impact of the discount to present value is not significant, except for borrowings.

Less than one year

From 1 to 2 years

From 2 to 5 years

At December 31, 2019 Borrowings 162,601 37 - Borrowings - CR 39 - 416,254 Trade payables 230,067 13,206 - Trade payables - CR 3,025 - 321,563 Other liabilities, excluding prepayments 24,172 - -

At September 30, 2020

Borrowings 281,912 35,728 - Borrowings - CR - - 519,730 Trade payables 349,363 13,143 - Trade payables - CR 751 - 422,482 Other liabilities, excluding prepayments 73,448 - -


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(e) Sensitivity analysis of derivative financial instruments The table below presents the sensitivity analysis of financial instruments, including derivatives. The Company's management adopted the following assumptions for Scenario I - probable:

• Instruments subject to foreign exchange rate risk - the probable scenarios consider an exchange rate of R$ 5.25/US$, based on the weekly FOCUS report disclosed by the Brazilian Central Bank, and a CDI rate of 1.90% p.a. (rates effective at the closing date of September 30, 2020), which, in Management's opinion, will remain stable over the next quarter. The other scenarios were built based on these rates.

• Instruments subject to interest rate risk- maintenance of the rate in view of the economic environment and funds offered by financial institutions during the period.

These analyses consider gains and losses for the next 12 months or up to the maturity dates of the contracts, as shown in brackets, if the U.S. dollar quotation and the CDI rate vary in accordance with the percentages below.

• USD exchange rate

Impact on profit or loss for the period and on equity - Scenarios II III Probable II III -25% -50% 25% 50% US dollar exchange rate R$ 3.9375 R$ 2.6250 R$ 5.2500 R$ 6.5625 R$ 7.8750 Trade payables abroad, net of imports in

transit 18,185

36,371

5,413

(18,185)

(36,371) Foreign trade payables - CR 98,479 196,959 29,315 (98,479) (196,959) Borrowings - CR 120,933 241,866 35,999 (12,933) (241,866) Foreign trade receivables (231) (462) (69) 231 462 237,367 474,734 70,658 (237,367) (474,734)

• EUR exchange rate

Impact on profit or loss for the year and on equity - Scenarios II III Probable II III -25% -50% 25% 50% EUR exchange rate R$ 4.6021 R$ 3.0681 R$ 6.1391 R$ 7.6701 R$ 9.2042 Borrowings - CR 28 55 - (28) (55) Gain (loss), net 28 55 - (28) (55)


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(f) Capital management

The Company's objectives when managing capital are to safeguard the ability to continue as a going concern in order to provide returns for stockholders and benefits to other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

The Company uses capital from third parties, suppliers and import financing to fund a portion of its working capital. It also uses its own and third-party capital to make long-term investments. In order to maintain or adjust the capital structure, the Company can make adjustments to the amount of dividends paid to stockholders, return capital to stockholders, issue new shares or sell assets to reduce, for example, debt. The Company monitors capital based on the indebtedness ratio. As established in the Company's bylaws, Article 18, item "i", the indebtedness ratio for borrowings contracted by the Executive Board cannot exceed 70% of the gross operating revenue for the most recently-ended financial year. Ratios exceeding this percentage must be approved by the Board of Directors. At September 30, 2019, this ratio was 69.8% (22.7% at December 31, 2019).

25. Insurance coverage The Company does not maintain insurance coverage for all its assets, as it understands that the risk of significant losses is remote. However, the Company has insurance policies for the units located in Candeias-BA and Viana-ES, with maximum indemnity limit of R$ 67,000, for the units located in Dourados-MS, Catalão-GO, Rio Verde-GO, Porto Alegre-RS, Manhuaçú-MG, Três Corações-MG, Uberaba-MG and Paranaguá-PR, with maximum indemnity limit of R$ 30,000, for the Paulínia units with maximum indemnity limit of R$ 21,399, for the vehicle fleet with maximum indemnity limit of R$ 100, and for a portion of accounts receivable and rural credit, with maximum indemnity limit of R$ 50,000.

26. Segment reporting Management defined the Company's operational segments based on the reports used for strategic decision-making, reviewed by the following major decision-makers of the Company: the Chairman of the Board of Directors, the Company's CEO who is also a member of the Board of Directors, and the other members of the Board of Directors. The Executive Board analyzes the Company's businesses from the perspective of the production process,

which consists of two segments: (i) Industrial segment, which comprises the sulfuric acid and Simple

Superphosphate (SSP) plant located in Paranaguá; and the (ii) Mixing segment, which comprises seven of

the Company's mixing units in operation and six which are suspended.


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The segment information reviewed by the chief decision makers for the periods ended September 30, 2020

and 2019 are as follows:



Restated (Note 1.4)

Industrial segment

Mixing segment Total

Industrial segment

Mixing segment Total

Gross sales revenue 1,413,618 1,413,618 704,413 704,413

Deductions and taxes on sales (20,494) (20,494) (11,659) (11,659) Net sales 1,393,124 1,393,124 692,754 692,754

Cost of sales (2,688) (1,201,534) (1,204,222) (4,505) (657,679) (662,184) Gross profit (loss) (2,688) 191,590 188,902 (4,505) 35,075 30,570 Operating expenses (125,041) (132,801) Finance costs, net (331,516) (144,005) Operating profit (267,655) (246,236) Income tax and social contribution 22,645 -

Profit (loss) for the period (245,010) (246,236) Depreciation and amortization 853 20,046 20,899 1,224 21,787 23,011

EBITDA (1,835) 86,595 84,760 (3,281) (75,939) (79,220)

As previously mentioned, the Industrial segment is currently intended to meet the requirements of the Mixing segment. Consequently, the sales of the Industrial segment to the mixing segment are measured considering the market price of the products at the time of the sale. The revenue from the Mixing segment reported to the chief decision makers was measured in a manner consistent with that presented in the statement of operations, and excluded the revenue generated by the Industrial segment.


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Assets by business segment are as follows:

September 30, 2020 December 31, 2019

Industrial segment

Mixing segment

Total Industrial segment

Mixing segment

Total

Restated (Note

1.4)

Inventories

1 621,002 621,203

1

344,760

344,761

PP&E and intangible assets

30,078 411,679 441,757

30,087

414,008

444,095

Other assets

- 780,488 780,288

-

799,645

799,645

Total assets 30,079 1,813,169 1,843,248 30,088 1,588,501 1,588,501

No information on liabilities is presented by segment. Management analyzes the liabilities as a whole, as it understands that an analysis of the balances of liabilities by segment is not relevant at present. Due to a Public Civil Action filed by the Federal and State Public Prosecution Offices (Note 14) claiming

irregularities in the licensing process and alleged environmental damage caused by the SSP (Single

Superphosphate) plant in Paranaguá (PR), the result of the Industrial segment was adversely impacted by

the suspension of operations at that plant.

Because of a preliminary injunction, which is therefore provisional, dated April 28, 2010, the production of the Acidulation, Granulation and Sulfur Conversion unit has been suspended, as informed in a significant event notice to the market. However, the Paranaguá Mixing Unit is authorized and operating. The annual production of the Paranaguá-PR industrial unit is approximately 250 thousand metric tons (not reviewed by auditor) of Simple Superphosphate (SSP) and 200 thousand metric tons (not reviewed by auditor) of sulfuric acid, which currently meets approximately 40% of the SSP needs (not reviewed by auditor), that is, 6% of the Company's total consumption of fertilizer raw materials (not reviewed by auditor). In the nine-month period ended September 30, 2020, the plant depreciation recorded in the statement of operations amounted to R$ 853 (R$ 845 in 2019).

27. Impacts from the COVID-19 pandemic The COVID-19 pandemic has created significant uncertainty in the market in relation to a possible economic recession, affecting disposable income, which may affect demand and, consequently, lead to reduction in domestic and export sales. The pandemic may also affect the Company's operations, creating interruptions in the supply and distribution chain, which would affect the business, as well as its operating and financial results.


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Such effects may also affect the Company's customers. Despite operating in the agricultural segment, long-term economic recessions may affect the agricultural market, impacting credit and liquidity positions of the Company and its customers. Cross border trade disputes have affected certain countries, including Brazil, impacting imports and, consequently, the internal competitiveness of several economic segments. Brazilian agriculture is usually less exposed since it is considered an essential activity and the demand for food continues irrespective of unemployment and income reductions. Brazil is one of the world's largest exporters of grains and other agricultural products; no major changes

in trends in demand and supply of products in 2020 are expected, except in specific sectors. Nevertheless,

COVID-19 has brought about great uncertainty and volatility in the agricultural commodities market.

Another important factor has been the significant devaluation of the Real in relation to the US Dollar, causing an increase in fertilizer costs, which inputs are mostly imported. Such impacts are generally absorbed by the market prices being dollar-pegged. This scenario is beneficial to exporters in the short term or while it lasts. In the case of the Company, the foreign exchange impact will not immediately affect its cash position, since its current debt denominated in foreign currency will be settled mainly as from 2023, due to the grace period provided for in its court reorganization plan. Consequently, management understands that the "foreign currency effect" has not yet affected the Company's financial situation despite having generated significant exchange variation expense. In relation to property, plant and equipment and trade receivables, management also understands that COVID-19 has not caused nor provisions for losses on trade receivables or other assets. When working from home is not possible, the number of employees working in offices have been reduced, providing adequate conditions to avoid contamination, such as sanitizing gel and masks, increasing the increased number of buses for transportation. Measures were taken for maintaining social distancing during meals in the Company's restaurant, providing communications and instructions on how to proceed and use safety and protective equipment and updated information on suspected or positively tested COVID-19 cases with the respective measures taken by the Company on a case-by-case basis. The Company continues to monitor each specific situation, seeking to be as efficient, adequate and pragmatic as possible, adapting to the new social and economic circumstances.

* * *

(A free translation of the original in Portuguese) OFFICERS' STATEMENT ON THE FINANCIAL STATEMENTS In compliance with article 25, paragraph 1, items V and VI, of the Brazilian Securities Commission (CVM) Normative Instruction 480/09, the Company's Chief Executive Officer and the other officers represent that they have reviewed and discussed and are in agreement with the financial statements and the conclusion in independent accountant’ Report on review of quarterly information. DIRECTOR'S COMPOSITION Dalton Carlos Heringer - Chief Executive Officer, Administrative Officer, Chief Financial Officer, Investor Relations Officer and Controllership Alfredo Fardin - Supply and Logistics Officer Ulisses Maestri - Commercial Officer and Technical Officer

(A free translation of the original in Portuguese) OFFICER'S STATEMENT ON THE INDEPENDENT AUDITOR'S REPORT In compliance with article 25, paragraph 1, items V and VI, of the CVM Normative Instruction 480/09, the Company's Chief Executive Officer and the other Officers state that they have reviewed and discussed and are in agreement with the financial statements and the conclusion in independent accountant’ Report on review of quarterly information. DIRECTOR'S COMPOSITION: Dalton Carlos Heringer - Chief Executive Officer, Administrative Officer, Chief Financial Officer, Investor Relations Officer and Controllership Alfredo Fardin - Supply and Logistics Officer Ulisses Maestri - Commercial Officer and Technical Officer