SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF THE

SECURITIES EXCHANGE ACT OF 1934

For the month of ~~December~~April, ~~2020~~ 2021(Commission File No. 001-33356),

Gafisa S.A.

(Translation of Registrant's name into English)

Av. Juscelino Kubitschek 1830 |03º andar| Conj. 32 Torre 2 - Cond. São Luiz

São Paulo, SP, 04543- 000

Federative Republic of Brazil

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file
annual reports under cover Form 20-F or Form 40-F.

Form 20-F ___X___ Form 40-F ______

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1) Yes ______ No ___X___

Indicate by check mark if the registrant is submitting
the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Yes ______ No ___X___

Indicate by check mark whether by furnishing the information contained in this Form,
the Registrant is also thereby furnishing the information to the Commission pursuant
to Rule 12g3-2(b) under the Securities Exchange Act of 1934:

Yes ______ No ___X___

If “Yes” is marked, indicate below the file number assigned
to the registrant in connection with Rule 12g3-2(b): N/A

Financial Statements

Gafisa S.A.

~~Quarterly information~~December 31, 2020

~~September 30,~~Independent ~~2020~~Auditor’s Report on the Financial Statements

(A free translation of the original report in Portuguese as published in Brazil containing Quarterly Information (ITR) prepared in accordance with the accounting practices adopted in Brazil).

Company data
Capital Composition		3
Individual financial statements
Balance sheet - Assets		4
Balance sheet - Liabilities		5
Statement of income		6
Statement of comprehensive income (loss)		7
Statement of cash flow		8
Statements of changes in equity
01/01/2020 to 09/30/2020		9
01/01/2019 to 09/30/2019		10
Statement of value added		11
Consolidated financial statements
Balance sheet - Assets		12
Balance sheet - Liabilities		13
Statement of income		15
Statement of comprehensive income (loss)		16
Statement of cash flow		17
Statements of changes in equity
01/01/2020 to 09/30/2020		18
01/01/2019 to 09/30/2019		19
Statement of value added		20
Comments on performance		21
Notes to the quartely information		43
Other information deemed relevant by the Company		74
Reports and statements
Independent auditors' report on the review of the quarterly information		77
		80
Management statement of interim financial information
Management statement on the report n review of interim financial information		81

COMPANY DATA / CAPITAL COMPOSITION

Number of Shares	CURRENT QUARTER
(in thousands)	09/30/2020
Paid-in Capital
Common	290,732
Preferred	0
Total	290,732
Treasury shares
Common	342
Preferred	0
Total	342

INDIVIDUAL FINANCIAL STATEMENTS - BALANCE SHEET - LIABILITIES AND EQUITY (in thousands of Brazilian Reais)

CODE	DESCRIPTION	ACTUAL QUARTER 9/30/2020	PRIOR YEAR 12/31/2019
1	Total Assets	2,954,304	2,504,512
1.01	Current Assets	1,652,693	1,334,900
1.01.01	Cash and cash equivalents	43	810
1.01.01.01	Cash and banks	43	810
1.01.02	Short-term investments	619,025	401,243
1.01.02.01	Fair value of short-term investments	619,025	401,243
1.01.03	Accounts receivable	340,903	361,649
1.01.03.01	Trade accounts receivable	340,903	361,649
1.01.03.01.01	Receivables from clients of developments	304,312	347,158
1.01.03.01.02	Receivables from clients of construction and services rendered	36,591	14,491
1.01.04	Inventories	528,437	490,419
1.01.04.01	Properties for sale	528,437	490,419
1.01.07	Prepaid expenses	416	1,227
1.01.07.01	Prepaid expenses and others	416	1,227
1.01.08	Other current assets	162,869	79,552
1.01.08.01	Non current assets held for sale	3,709	3,709
1.01.08.03	Others	159,160	75,843
1.01.08.03.01	Other assets	65,760	52,455
1.01.08.03.03	Receivables from related parties	93,400	23,388
1.02	Non current assets	1,302,611	1,169,612
1.02.01	Non current assets	348,567	469,268
1.02.01.04	Accounts receivable	73,142	98,368
1.02.01.04.01	Receivables from clients of developments	73,142	98,368
1.02.01.05	Inventories	116,194	230,049
1.02.01.05.01	Properties for sale	116,194	230,049
1.02.01.10	Others non current assets	159,231	140,851
1.02.01.10.03	Other assets	118,160	107,435
1.02.01.10.04	Receivables from related parties	41,071	33,416
1.02.02	Investments	942,229	681,645
1.02.02.01	Investments	942,229	681,645
1.02.03	Property and equipment	6,805	12,147
1.02.03.01	Operation property and equipment	6,805	12,147
1.02.04	Intangible assets	5,010	6,552
1.02.04.01	Intangible assets	5,010	6,552

INDIVIDUAL FINANCIAL STATEMENTS - BALANCE SHEET - LIABILITIES AND EQUITY (in thousands of Brazilian Reais)

CODE	DESCRIPTION	ACTUAL QUARTER 9/30/2020	PRIOR YEAR 12/31/2019
2	Total Liabilities	2,954,304	2,504,512
2.01	Current liabilities	1,153,854	1,237,207
2.01.01	Social and labor obligations	10,342	11,963
2.01.01.02	Labor obligations	10,342	11,963
2.01.02	Suppliers	65,995	79,106
2.01.03	Tax obligations	62,217	58,556
2.01.03.01	Federal tax obligations	62,217	58,556
2.01.04	Loans and financing	427,681	541,826
2.01.04.01	Loans and financing	300,534	383,647
2.01.04.01.01	Loans and financing in local currency	300,534	383,647
2.01.04.02	Debentures	127,147	158,179
2.01.05	Other obligations	396,987	406,133
2.01.05.01	Payables to related parties	186,301	191,364
2.01.05.02	Others	210,686	214,769
2.01.05.02.04	Obligations for purchase of properties and advances from customers	66,660	89,825
2.01.05.02.06	Other payables	132,183	110,189
2.01.05.02.07	Obligations assumed on the assignment of receivables	11,843	14,755
2.01.06	Provisions	190,632	139,623
2.01.06.01	Tax, labor and civil lawsuits	190,632	139,623
2.01.06.01.01	Tax lawsuits	44	1,995
2.01.06.01.02	Labor lawsuits	25,096	30,699
2.01.06.01.04	Civil lawsuits	165,492	106,929
2.02	Non current liabilities	290,826	373,597
2.02.01	Loans and financing	145,698	146,375
2.02.01.01	Loans and financing	120,118	107,029
2.02.01.01.01	Loans and financing in local currency	120,118	107,029
2.02.01.02	Debentures	25,580	39,346
2.02.02	Other liabilities	55,788	91,250
2.02.02.02	Others	55,788	91,250
2.02.02.02.03	Obligations for purchase of properties and advances from customers	40,692	68,515
2.02.02.02.04	Other liabilities	4,484	6,272
2.02.02.02.06	Obligations assumed on the assignment of receivables	10,612	16,463
2.02.03	Deferred taxes	12,114	12,114
2.02.03.01	Deferred income tax and social contribution	12,114	12,114
2.02.04	Provisions	77,226	123,858
2.02.04.01	Tax, labor and civel lawsuits	77,226	123,858
2.02.04.01.01	Tax lawsuits	1	687
2.02.04.01.02	Tax and labor lawsuits	4,478	3,149
2.02.04.01.04	Civil lawsuits	72,747	120,022
2.03	Equity	1,509,624	893,708
2.03.01	Capital	1,041,248	2,926,280
2.03.02	Capital Reserves	335,162	294,094
2.03.02.05	Treasury shares	(2,634)	(43,517)
2.03.02.07	Constitution of capital reserve	250,599	250,599
2.03.02.09	Reserve for granting stock options	87,197	87,012
2.03.05	Retained earnings/accumulated losses	133,214	(2,326,666)

INDIVIDUAL FINANCIAL STATEMENTS - INCOME - (in thousands of Brazilian Reais)

CODE	DESCRIPTION	ACTUAL QUARTER 07/01/2020 to 09/30/2020	YEAR TO DATE 01/01/2020 to 09/30/2020	SAME QUARTER FROM PREVIOUS YEAR 07/01/2019 to 09/30/2019	YEAR TO DATE FROM PREVIOUS YEAR 01/01/2019 to 09/30/2019
3.01	Gross Sales and/or Services	96,026	215,419	69,329	235,665
3.01.01	Revenue from real estate development	105,150	235,487	75,946	256,393
3.01.03	Taxes on real estate sales and services	(9,124)	(20,068)	(6,617)	(21,728)
3.02	Cost of sales and/or services	(71,322)	(157,819)	(41,009)	(162,614)
3.02.01	Cost of real estate development	(71,322)	(157,819)	(41,009)	(162,614)
3.03	Gross profit	24,704	57,600	28,320	73,051
3.04	Operating expenses/income	(52,607)	(122,562)	(7,206)	(86,612)
3.04.01	Selling expenses	(2,022)	(6,158)	(1,633)	(9,585)
3.04.02	General and administrative expenses	(19,543)	(51,136)	(11,053)	(26,136)
3.04.05	Other operating expenses	(26,394)	(61,608)	(2,607)	(55,877)
3.04.05.01	Depreciation and amortization	(1,610)	(5,373)	(2,848)	(10,625)
3.04.05.02	Other operating expenses	(24,784)	(56,235)	178	(45,252)
3.04.06	Income from equity method investments	(4,648)	(3,660)	8,150	(4,986)
3.05	Income (loss) before financial results and income taxes	(27,903)	(64,962)	21,114	(13,561)
3.06	Financial	(28,590)	(40,538)	(22,782)	(47,185)
3.06.02	Financial expenses, net	(28,590)	(40,538)	(22,782)	(47,185)
3.06.02.01	Financial expenses, net	(28,590)	(40,538)	(22,782)	(47,185)
3.07	Income before income taxes	(56,493)	(105,500)	(1,668)	(60,746)
3.09	Income (loss) from continuing operation	(56,493)	(105,500)	(1,668)	(60,746)
3.11	Income (loss) for the period	(56,493)	(105,500)	(1,668)	(60,746)
3.99	Earnings per Share – (Reais / Share)	-	-	-	-
3.99.01	Basic Earnings per Share	-	-	-	-
3.99.01.01	ON	(0,39011)	(0,72852)	(0,03189)	(1,16151)
3.99.02	Diluted Earnings per Share	-	-	-	-
3.99.02.01	ON	(0,39011)	(0,72852)	(0,03189)	(1,16151)

INDIVIDUAL FINANCIAL STATEMENTS - COMPREHENSIVE INCOME (LOSS) - (in thousands of Brazilian Reais)

CODE	DESCRIPTION	ACTUAL QUARTER 0701/2020 to 09/30/2020	YEAR TO DATE 01/01/2020 to 09/30/2020	SAME QUARTER FROM PREVIOUS YEAR 07/01/2019 to 09/30/2019	YEAR TO DATE FROM PREVIOUS YEAR 01/01/2019 to 09/30/2019
4.01	Income (loss) for the period	(56,493)	(105,500)	(1,668)	(60,746)
4.03	Comprehensive income (loss) for the period	(56,493)	(105,500)	(1,668)	(60,746)

INDIVIDUAL FINANCIAL STATEMENTS - CASH FLOWS - INDIRECT METHOD - (in thousands of Brazilian Reais)

CODE	DESCRIPTION	YEAR TO DATE 01/01/2020 to 09/30/2020	YEAR TO DATE FROM PREVIOUS YEAR 01/01/2019 to 09/30/2019
6.01	Net cash from operating activities	(84,850)	(32,500)
6.01.01	Cash generated in the operations	(21,780)	(59,275)
6.01.01.01	Income (loss) before income and social contribution taxes	(105,500)	(60,746)
6.01.01.02	Income from equity method investments	(3,660)	(4,986)
6.01.01.03	Stock options expenses	(362)	(2,698)
6.01.01.04	Unrealized interest and finance charges, net	1,382	1,902
6.01.01.06	Depreciation and amortization	5,373	10,625
6.01.01.07	Provision for legal claims	51,127	45,378
6.01.01.08	Provision for profit sharing	6,194	500
6.01.01.09	Warranty provision	1,102	(3,918)
6.01.01.11	Allowance for doubtful accounts	15,347	(17,116)
6.01.01.12	Provision for realization of non-financial assets - properties for sale	(921)	(28,222)
6.01.01.13	Provision for penalties due to delay in construction works	832	754
6.01.01.15	Payable for sale of shares	0	(748)
6.01.02	Variation in assets and liabilities	(63,070)	91,775
6.01.02.01	Trade accounts receivable	21,862	117,528
6.01.02.02	Properties for sale	76,758	129,393
6.01.02.03	Other accounts receivable	(17,806)	(32,574)
6.01.02.04	Prepaid expenses	811	677
6.01.02.05	Obligations for purchase of properties and adv. from customers	(50,988)	(51,007)
6.01.02.06	Taxes and contributions	3,660	8,734
6.01.02.07	Suppliers	(12,981)	(13,126)
6.01.02.08	Salaries and payable charges	(7,816)	(1,898)
6.01.02.09	Transactions with related parties	380	4,763
6.01.02.10	Other obligations	(76,950)	(70,715)
6.02	Net cash from investing activities	(216,217)	(281,653)
6.02.01	Purchase of property and equipment and intangible assets	1,511	(4,333)
6.02.03	Redemption of short-term investments	262,076	34,040
6.02.04	Purchase of short-term investments	(479.858)	(311,360)
6.03	Net cash from financing activities	300,354	224,086
6.03.01	Capital increase	477.900	132,266
6.03.02	Increase in loans, financing and debentures	80,333	81,163
6.03.03	Payment of loans, financing and debentures	(196,523)	(193,285)
6.03.06	Loan transactions with related parties	(80,607)	(10,117)
6.03.08	Disposal of treasury shares	0	148
6.03.09	Result of the disposal of treasury shares	19,251	6,984
6.03.12	Constitution of reserves	0	206,927
6.05	Net increase (decrease) of cash and cash equivalents	(767)	(22,935)
6.05.01	Cash and cash equivalents at the beginning of the period	810	29,180
6.05.02	Cash and cash equivalents at the end of the period	43	4,112

INDIVIDUAL STATEMENT OF CHANGES IN EQUITY FROM 01/01/2020 TO 09/30/2020 (in thousands of Brazilian reais)

CODE	DESCRIPTION	Capital	Capital reserves, stock options and treasury shares	Profit reserves	Retained earnings	Other comprehensive income	Total Equity
5.01	Opening balance	2,926,280	294,094	-	(2,326,666)	-	893,708
5.03	Opening adjusted balance	2,926,280	294,094	-	(2,326,666)	-	893,708
5.04	Capital transactions with shareholders	(1,885,032)	41,068	-	2,565,380	-	721,416
5.04.01	Capital increase	700,001	-	-	-	-	700,001
5.04.03	Stock option plan	-	184	-	-	-	184
5.04.05	Treasury shares sold	-	40,884	-	(19,635)	-	21,231
5.04.08	Capital reduction	(2,585,033)	-	-	2,585,033	-	-
5.05	Total of comprehensive income (loss)	-	-	-	(105,500)	-	(105,500)
5.05.01	Net income (loss) for the period	-	-	-	(105,500)	-	(105,500)
5.07	Closing balance	1,041,248	355,162	-	133,214	-	1,509,624

INDIVIDUAL STATEMENT OF CHANGES IN EQUITY FROM 01/01/2019 TO 09/30/2019 (in thousands of Brazilian reais)

CODE	DESCRIPTION	Capital	Capital reserves, stock options and treasury shares	Profit reserves	Retained earnings	Other comprehensive income	Total Equity
5.01	Opening balance	2,521,319	278,401	0	(2,308,403)	0	491,317
5.03	Opening adjusted balance	2,521,319	278,401	0	(2,308,403)	0	491,317
5.04	Capital transactions with shareholders	132,265	220,590	0	(3,267)	0	349,588
5.04.01	Capital increase	132,265	0	0	-	0	132,265
5.04.03	Stock option plan	0	355	0	-	0	355
5.04.05	Treasury shares sold	0	141	0	7	0	148
5.04.08	Treasury shares cancelled	0	5,747	0	(5,747)	0	-
5.04.09	Treasury shares reissued	0	(20,671)	0	20,671	0	-
5.04.10	Share repurchase program	0	28,091	0	(18,198)	0	9,893
5.04.11	Advance for future capital increase	0	206,927	0	(59,078)	0	206,927
5.05	Total of comprehensive income (loss)	0	0	0	(60,746)	0	(60,746)
5.05.01	Net income (loss) for the period	0	0	0	(60,746)	0	(60,746)
5.07	Closing balance	2,653,584	498,991	0	(2,372,416)	0	780,159

INDIVIDUAL STATEMENT OF VALUE ADDED (in thousands of Brazilian Reais)

CODE	DESCRIPTION	YEAR TO DATE 01/01/2020 to 09/30/2020	YEAR TO DATE FROM PREVIOUS YEAR 01/01/2019 to 09/30/2019
7.01	Revenue	235,487	257,393
7.01.01	Real estate development, sales and services	250,834	240,277
7.01.04	Allowance for doubtful accounts	(15,347)	17,116
7.02	Inputs acquired from third parties	(218,867)	(191,772)
7.02.01	Cost of Sales and/or Services	(141,109)	(140,857)
7.02.02	Materials, energy, outsourced labor and other	(77,758)	(50,915)
7.03	Gross value added	16,620	65,621
7.04	Retentions	(5,373)	(10,625)
7.04.01	Depreciation and amortization	(5,373)	(10,625)
7.05	Net value added produced by the Company	11,247	54,996
7.06	Added value received on transfer	17,962	16,448
7.06.01	Income from equity method investments	(3,660)	4,986
7.06.02	Financial income	21,622	11,462
7.07	Value added total to be distributed	29,209	71,444
7.08	Value added distribution	29,209	71,444
7.08.01	Personnel and payroll charges	27.972	22,139
7.08.01.01	Direct remuneration	27.972	22,139
7.08.02	Taxes and contributions	25,686	26,971
7.08.02.01	Federal	25,686	26,971
7.08.03	Compensation – Interest	81.051	83,080
7.08.03.01	Interest	78.870	80,404
7.08.03.02	Rent	2,181	2,676
7.08.04	Compensation – Company capital	(105,500)	(60,746)
7.08.04.03	Net income (Retained losses)	(105,500)	(60,746)

CONSOLIDATED FINANCIAL STATEMENTS - BALANCE SHEET - ASSETS (in thousands of Brazilian Reais)

CODE	DESCRIPTION	ACTUAL QUARTER 9/30/2020	PRIOR YEAR 12/31/2019
1	Total Assets	3,445,750	2,551,887
1.01	Current Assets	2,648,455	1,800,168
1.01.01	Cash and cash equivalents	6,705	12,435
1.01.01.01	Cash and banks	6,705	12,435
1.01.02	Short-term investments	623,995	401,895
1.01.02.01	Fair value of short-term investments	623,995	401,895
1.01.03	Accounts receivable	544,147	445,303
1.01.03.01	Trade accounts receivable	544,147	445,303
1.01.03.01.01	Receivables from clients of developments	507,399	430,664
1.01.03.01.02	Receivables from clients of construction and services rendered	36,748	14,639
1.01.04	Inventories	1,317,144	786,660
1.01.04.01	Properties for sale	1,317,144	786,660
1.01.07	Prepaid expenses	1,405	1,860
1.01.07.01	Prepaid expenses and others	1,405	1,860
1.01.08	Other current assets	155,449	152,015
1.01.08.01	Non current assets for sale	7,014	7,014
1.01.08.03	Others	148,435	145,001
1.01.08.03.01	Other accounts receivable and others	146,125	67,395
1.01.08.03.03	Derivative financial instruments	2,310	77,606
1.02	Non current assets	797,305	751,719
1.02.01	Non current assets	503,511	591,674
1.02.01.04	Accounts receivable	86,843	112,135
1.02.01.04.01	Receivables from clients of developments	86,843	112,135
1.02.01.05	Inventories	191,985	279,207
1.02.01.05.01	Properties for sale	191,985	279,207
1.02.01.10	Others non current assets	224,683	200,332
1.02.01.10.03	Other assets	124,946	166,916
1.02.01.10.04	Receivables from related parties	99,737	33,416
1.02.02	Investments	272,497	138,802
1.02.02.01	Interest in associates and affiliates	272,497	138,802
1.02.03	Property and equipment	15,935	14,159
1.02.03.01	Operation property and equipment	15,935	14,159
1.02.04	Intangible assets	5,362	7,084
1.02.04.01	Intangible assets	5,362	7,084

CONSOLIDATED FINANCIAL STATEMENTS - BALANCE SHEET - LIABILITIES AND EQUITY (in thousands of Brazilian Reais)

CODE	DESCRIPTION	ACTUAL QUARTER 9/30/2020	PRIOR YEAR 12/31/2019
2	Total Liabilities	3,445,750	2,551,887
2.01	Current liabilities	1,440,307	1,252,402
2.01.01	Social and labor obligations	10,774	12,291
2.01.01.02	Labor obligations	10,774	12,291
2.01.02	Suppliers	1331,054	95,450
2.01.03	Tax obligations	82,979	69,868
2.01.03.01	Federal tax obligations	82,979	69,868
2.01.04	Loans and financing	476,495	584,303
2.01.04.01	Loans and financing	349,348	426,124
2.01.04.01.01	In Local Currency	349,348	426,124
2.01.04.02	Debentures	127,147	158,179
2.01.05	Other obligations	545,648	349,755
2.01.05.01	Payables to related parties	92,228	64,384
2.01.05.02	Others	453,420	285,371
2.01.05.02.04	Obligations for purchase of properties and advances from customers	259,336	129,353
2.01.05.02.06	Other payables	178,550	135,492
2.01.05.02.07	Obligations assumed on the assignment of receivables	15,534	20,526
2.01.06	Provisions	193,357	140,735
2.01.06.01	Tax, labor and civel lawsuits	193,357	140,735
2.01.06.01.01	Tax lawsuits	2,131	1,995
2.01.06.01.02	Labor lawsuits	25,096	31,593
2.01.06.01.04	Civel lawsuits	166,130	107,147
2.02	Non current liabilities	491,553	404,342
2.02.01	Loans and financing	269,003	146,375
2.02.01.01	Loans and financing	153,340	107,029
2.02.01.01.01	Loans and financing in local currency	153,340	107,029
2.02.01.02	Debentures	115,663	39,346
2.02.02	Other obligations	124,186	121,975
2.02.02.02	Others	124,186	121,975
2.02.02.02.03	Obligations for purchase of properties and advances from customers	87,942	93,075
2.02.02.02.04	Other payables	21,884	9,065
2.02.02.02.06	Obligations assumed on the assignment of receivables	14,360	19,835
2.02.03	Deferred taxes	12,114	12,114
2.02.03.01	Deferred income tax and social contribution	12,114	12,114
2.02.04	Provisions	86,250	123,878
2.02.04.01	Tax, labor and civel lawsuits	86,250	123,878
2.02.04.01.01	Tax lawsuits	98	707
2.02.04.01.02	Labor lawsuits	7,280	3,149
2.02.04.01.04	Civel lawsuits	78,872	120,022
2.03	Equity	1,513,890	895,143
2.03.01	Capital	1,041,248	2,926,280
2.03.01.01	Share Capital	1,041,248	2,926,280
2.03.02	Capital Reserves	2225,162	294,094
2.03.02.05	Treasury shares	(2,634)	(43,517)
2.03.02.07	Constitution of capital reserve	250,599	250,599
2.03.02.09	Reserve for granting stock options	87,197	87,012

CONSOLIDATED FINANCIAL STATEMENTS - BALANCE SHEET - LIABILITIES AND EQUITY (in thousands of Brazilian Reais)

CODE	DESCRIPTION	ACTUAL QUARTER 9/30/2020	PRIOR YEAR 12/31/2019
2.03.05	Retained earnings/accumulated losses	133,214	(2,326,666)
2.03.09	Non-controlling interest	4,266	1,435

CONSOLIDATED FINANCIAL STATEMENTS - INCOME - (in thousands of Brazilian Reais)

CODE	DESCRIPTION	ACTUAL QUARTER 07/01/2020 to 09/30/2020	YEAR TO DATE 01/01/2020 to 09/30/2020	SAME QUARTER FROM PREVIOUS YEAR 07/01/2019 to 09/30/2019	YEAR TO DATE FROM PREVIOUS YEAR 01/01/2019 to 09/30/2019
3.01	Gross Sales and/or Services	148,632	304,135	89,212	284,292
3.01.01	Revenue from real estate development	159,579	327,637	96,438	307,534
3.01.03	Taxes on real estate sales and services	(10,947)	(23,502)	(7,226)	(23,242)
3.02	Cost of sales and/or services	(124,220)	(112,327)	(51,108)	(202,770)
3.02.01	Cost of real estate development	(124,220)	(112,327)	(51,108)	(202,770)
3.03	Gross profit	24,412	43,176	38,104	81,522
3.04	Operating expenses/income	(51,952)	(79,516)	(17,597)	(98,950)
3.04.01	Selling expenses	(3,909)	(6,840)	(2,170)	(11,683)
3.04.02	General and administrative expenses	(19,543)	(31,593)	(12,678)	(31,918)
3.04.05	Other operating expenses	(28,393)	(36,807)	(3,054)	(57,438)
3.04.05.01	Depreciation and amortization	(1,936)	(4,048)	(3,223)	(11,739)
3.04.05.02	Other operating expenses	(26,457)	(32,759)	169	(45.699)
3.04.06	Income from equity method investments	(107)	(4,276)	305	2,089
3.05	Income (loss) before financial results and income taxes	(27,540)	(36,340)	20,507	(17,428)
3.06	Financial	(28,049)	(10,750)	(21,548)	(41,976)
3.07	Income before income taxes	(55,589)	(47,090)	(1,041)	(59,404)
3.08	Income and social contribution taxes	(1,064)	(2,015)	(508)	(1,221)
3.08.01	Current	(1,064)	(2,015)	(508)	(1,221)
3.09	Income (loss) from continuing operation	(57,193)	(49,105)	(1,549)	(60,625)
3.11	Income (loss) for the period	(57,193)	(49,105)	(1,549)	(60,625)
3.11.01	Income (loss) attributable to the Company	(56,493)	(49,007)	(1,668)	(60,746)
3.11.02	Net income attributable to non-controlling interests	(700)	(98)	119	121
3.99	Earnings per Share – (Reais / Share)	-	-	-	-
3.99.01	Basic Earnings per Share	-	-	-	-
3.99.01.01	ON	(0,39011)	(0,72852)	(0,03189)	(1,16151)
3.99.02	Diluted Earnings per Share	-	-	-	-
3.99.02.01	ON	(0,39011)	(0,72852)	(0,03189)	(1,16151)

CONSOLIDATED FINANCIAL STATEMENTS - COMPREHENSIVE INCOME (LOSS) - (in thousands of Brazilian Reais)

CODE	DESCRIPTION	ACTUAL QUARTER 07/01/2020 to 09/30/2020	YEAR TO DATE 01/01/2020 to 09/30/2020	SAME QUARTER FROM PREVIOUS YEAR 07/01/2019 to 09/30/2019	YEAR TO DATE FROM PREVIOUS YEAR 01/01/2019 to 09/30/2019
4.01	Consolidated Income (loss) for the period	(57,193)	(106,299)	(1,549)	(60,625)
4.03	Consolidated comprehensive income (loss) for the period	(57,193)	(106,299)	(1,549)	(60,625)
4.03.01	Income (loss) attributable to the Company	(56,493)	(105,500)	(1,668)	(60,746)
4.03.02	Net income attributable to the noncontrolling interests	(700)	(799)	119	121

CONSOLIDATED FINANCIAL STATEMENTS - CASH FLOWS - INDIRECT METHOD - (in thousands of Brazilian Reais)
CODE	DESCRIPTION	YEAR TO DATE 01/01/2020 to 09/30/2020	YEAR TO DATE FROM PREVIOUS YEAR 01/01/2019 to 09/30/2019
6.01	Net cash from operating activities	(218,444)	68,098
6.01.01	Cash generated in the operations	6,005	(47,507)
6.01.01.01	Income (loss) before income and social contribution taxes	(102,681)	(59,404)
6.01.01.02	Income from equity method investments	4,383	(2,089)
6.01.01.03	Stock options expenses	(362)	(2,698)
6.01.01.04	Unrealized interest and finance charges, net	2,130	4,302
6.01.01.06	Depreciation and amortization	5,984	11,739
6.01.01.07	Provision for legal claims	52,708	45,885
6.01.01.08	Provision for profit sharing	6,194	500
6.01.01.09	Warranty provision	1,102	(3,918)
6.01.01.11	Allowance for doubtful accounts	34,197	(17,116)
6.01.01.12	Provision for realization of non-financial assets - properties for sale	(1,044)	(28,221)
6.01.01.13	Provision for penalties due to delay in construction works	3.394	754
6.01.01.15	Payable for sale of shares	0	2,759
6.01.02	Variation in assets and liabilities	(224,449)	115,605
6.01.02.01	Trade accounts receivable	(83,182)	127,949
6.01.02.02	Properties for sale	(27,289)	145,244
6.01.02.03	Other accounts receivable	(88,096)	(35,981)
6.01.02.04	Prepaid expenses	815	509
6.01.02.05	Obligations for purchase of properties and adv. from customers	(32,744)	(56,461)
6.01.02.06	Taxes and contributions	7,794	7,610
6.01.02.07	Suppliers	33,726	(2,189)
6.01.02.08	Salaries and payable charges	(7,721)	(12,366)
6.01.02.09	Transactions with related parties	47,135	26,045
6.01.02.10	Other obligations	(71,268)	(93,534)
6.01.02.11	Income tax and social contribution payable	(3,619)	(1,221)
6.02	Net cash from investing activities	(228,193)	(280,902)
6.02.01	Purchase of property and equipment and intangible assets	(4,618)	(4,361)
6.02.03	Redemption of short-term investments	(287,594)	50,445
6.02.04	Purchase of short-term investments	(511,169)	(326,986)
6.03	Net cash from financing activities	(439,392)	193,319
6.03.01	Capital increase	477,900	132,266
6.03.02	Increase in loans, financing and debentures	310,900	89,672
6.03.03	Payment of loans, financing and debentures	(359,646)	(232,561)
6.03.06	Loan transactions with related parties	(9,013)	(10,117)
6.03.08	Disposal of treasury shares	0	148
6.03.09	Result of the disposal of treasury shares	19,251	6,984
6.03.12	Constitution of reserves	0	206,927
6.04	Foreign Exchange Gains and Losses on Cash and Cash Equivalents	1,515	0
6.05	Net increase (decrease) of cash and cash equivalents	(5,730)	(19,485)
6.05.01	Cash and cash equivalents at the beginning of the period	12,435	32,304
6.05.02	Cash and cash equivalents at the end of the period	6,705	12,819

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FROM 07/01/2020 TO 09/30/2020 (in thousands of Brazilian reais)

CODE	DESCRIPTION	Capital	Capital reserves, stock options and treasury shares	Profit reserves	Retained earnings	Other comprehensive income	Total Shareholders equity	Non Controlling interest	Total equity Consolidated
5.01	Opening balance	2,926,280	294,094	0	(2,326,666)	0	893,708	1,435	895.143
5.03	Opening adjusted balance	2,926,280	294,094	0	(2,326,666)	0	893,708	1,435	895.143
5.04	Capital transactions with shareholders	(1,885,032)	41,068	0	2,565,380	0	721,416	3,630	725,046
5.04.01	Capital increase	700,001	0	0	0	0	700,001	0	700,001
5.04.03	Stock option plan	0	184	0	0	0	184	0	184
5.04.05	Treasury shares sold	0	40,884	0	(19,653)	0	21,231	0	21,231
5.04.08	Capital reduction	(2,585,033)	0	0	2,585,033	0	0	0	0
5.04.10	Low discontinued operation	0	0	0	0	0	0	3,630	3,630
5.05	Total of comprehensive income (loss)	0	0	0	(105,500)	0	(105,500)	(799)	(106,299)
5.05.01	Net income (loss) for the period	0	0	0	(105,500)	0	(105,500)	(799)	(106,299)
5.07	Closing balance	1,041,248	355,162	0	133,214	0	1,509,624	4,266	1,513,890

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FROM 07/01/2019 TO 09/30/2019 (in thousands of Brazilian reais)

CODE	DESCRIPTION	Capital	Capital reserves, stock options and treasury shares	Profit reserves	Retained earnings	Other comprehensive income	Total Shareholders equity	Non Controlling interest	Total equity Consolidated
5.01	Opening balance	2,521,319	278,401	0	(2,308,403)	0	491,317	1,847	493,191
5.03	Opening adjusted balance	2,521,319	278,401	0	(2,308,403)	0	491,317	1,847	493,191
5.04	Capital transactions with shareholders	132,265	220,590	0	(3,267)	0	349,588	0	349,588
5.04.01	Capital increase	132,265	-	0	0	0	132,265	0	132,265
5.04.03	Stock option plan	-	355	0	0	0	355	0	355
5.04.05	Treasury shares sold	-	141	0	7	0	148	0	148
5.04.08	Treasury shares cancelled	-	5,747	0	(5,747)	0	0	0	0
5.04.09	Treasury shares reissued	-	(20,671)	0	20,671	0	0	0	0
5.04.10	Share repurchase program	-	28.091	0	(18,198)	0	9,893	0	9,893
5.04.11	Advance for Future Increase of capital	-	206,927	0	0	0	(206,927)	0	206,927
5.05	Total of comprehensive income (loss)	-	0	0	(60,746)	0	(60,746)	121	(60,625)
5.05.01	Net income (loss) for the period	-	0	0	(60,746)	0	(60,746)	121	(60,625)
5.06	Reserves	-	0	0	-	0	9	(80)	(80)
5.06.01	Constitution of reserves	-	0	0	-	0	0	(80)	(80)
5.07	Closing balance	2,653,584	298,991	0	(2,372,418)	0	780,159	1,915	782,074

CONSOLIDATED STATEMENT OF VALUE ADDED (in thousands of Brazilian Reais)
CODE	DESCRIPTION	YEAR TO DATE 01/01/2020 to 09/30/2020	YEAR TO DATE FROM PREVIOUS YEAR 01/01/2019 to 09/30/2019
7.01	Revenues	327,637	307,534
7.01.01	Real estate development, sales and services	361,834	290,418
7.01.04	Allowance for doubtful accounts	(34,197)	17,116
7.02	Inputs acquired from third parties	(293,587)	(229,328)
7.02.01	Cost of Sales and/or Services	(211,240)	(172,414)
7.02.02	Materials, energy, outsourced labor and other	(82,347)	(56,914)
7.03	Gross value added	34,050	78,206
7.04	Retentions	(5,984)	(11,739)
7.04.01	Depreciation and amortization	(5,984)	(11,739)
7.05	Net value added produced by the Company	28,066	66,467
7.06	Value added received on transfer	18,195	14,052
7.06.01	Income from equity method investments	(4,383)	2,089
7.06.02	Financial income	22,587	11,963
7.07	Total value added to be distributed	46,261	80,519
7.08	Value added distribution	46,261	80,519
7.08.01	Personnel and payroll charges	29,807	23,717
7.08.01.01	Direct remuneration	29,807	23,717
7.08.02	Taxes and contributions	33,089	30,022
7.08.02.01	Federal	33,089	30,022
7.08.03	Compensation – Interest	88,865	87,526
7.08.03.01	Interest	88,865	84,295
7.08.03.02	Rent	2,181	3,231
7.08.04	Compensation – Company capital	(105,500)	(60,746)
7.08.04.03	Net income (Retained losses)	(105,500)	(60,746)

FOR IMMEDIATE RELEASE - São Paulo, November 16, 2020 – Gafisa S.A. (B3: GFSA3; OTC: GFASY), a leading Brazilian homebuilder, announced today its operational and financial results for the third quarter ended September 30, 2020.

GAFISA ANNOUNCES 3Q20 RESULTS

Gafisa’s growth upturn is a reality, with 253% higher sales volume, R$1.1 billion in launches in 2020, and R$1 billion PSV in new acquisitions

The third quarter of 2020 was marked by Gafisa’s consistent recovery of operational performance, highlighting sales, launches, construction works delivery, and land acquisition. We recorded the best sales performance over the past two years, totaling R$144 million sales, reflecting a 253% quarter-on-quarter increase.

After two years without new launches, we resumed launches in the third quarter of 2020, with Chez Perdizes, High Line Jardins, and Normandie Moema projects, totaling a PSV of R$264 million, all of them located in high-valued regions, with good liquidity in the city of São Paulo. Subsequently to the end of the third quarter, all these three launches today report healthy levels of sales, 20% in Chez Perdizes, 45% in High Line Jardins, and 60% in Normandie Moema. For the fourth quarter, we have other three launches totaling R$875 million, highlighting the Cyano Barra project with R$570 million PSV and a project in Campo Belo, SP, with R$262 million PSV.

Again, we evidence the consistency of the Company’s planning and delivery capacity, with two other projects delivered, with a total PSV of R$140 million, the 7th project delivered in 2020. We obtained the occupancy permit for the 8th and 9th projects, now we have achieved 94% of PSV estimated to be delivered in 2020. With the conclusion of the Upcon acquisition, we added two projects to be delivered in 2020, reaching a total of 10 projects with nearly R$1 billion PSV and 1,474 units.

The evolution of construction works was maintained, as well as projects and sales, even during the pandemic. The Company, through its Management Committee – COVID-19, upheld the prevention measures necessary to ensure everyone’s safety, evidencing the focus and discipline of Gafisa’s new management, even amidst a more challenging international scenario.

Still referring to our operational performance, it is worth noting that we acquired in the quarter two excellent plots of land in the city of São Paulo, one in Vila Mariana district, with an estimated PSV of R$116 million and another in the Butantã district, with an estimated PSV of R$162 million. Upcon also brought to our landbank an estimated PSV of R$900 million. We also concluded negotiations to acquire four projects from Calçada S.A., with an approximate PSV of R$747 million, and the acquisition of the last plot of land at Av. Delfim Moreira, definitively sets Gafisa’s return to the city of Rio de Janeiro, through differentiated projects.

Concerning financial results, it is worth noting that we maintained the REF margin (backlog results) at approximately 35%. This evidences that backlog result sustains the Company’s margin at healthy levels in a continued and consistent improvement, despite a temporary reduction of adjusted gross margin (no financial cost), due to our conservative approach when recording provision for dissolutions and repricing of older inventories during the pandemic.

We also should point out a continuous improvement of the Company’s balance sheet and deleverage. Within one year, we went from a Net Debt/Shareholders’ Equity ratio of 162% in 1Q19 to current 7.6% in 3Q20, with a capital increase approved on August 7, 2020, injecting R$218.2 million into the Company’s cash.

We are confident that we are reaching a new cycle of high growth in the real estate market, with interest rates nearing the lowest historical levels, unparalleled credit market growth, and development. Furthermore, as fixed-income investments have very low yield, or even negative, real estate investment has increasingly become relevant in the investment portfolio of individuals and institutional investors.

Within this virtuous context of growth in the real estate market and the assertive actions in its real estate development core business, Gafisa is executing its transformation to become a real estate platform to go beyond its core activity of real estate development. From its solid balance sheet and strategic planning, Gafisa set up a new line of business, the Gafisa Properties. We are also developing partnerships and investments in startups to bring innovation, technology, and new services for Gafisa and its clients. Gafisa Properties will own real estate assets to become profitable through leasing flows across the real estate spectrum, such as offices, residential units, shopping malls, and hotels, and its portfolio will be composed of Gafisa’s built assets or under construction (e.g., offices, stores, and small residential units of up 50 m2)and new acquisitions with a focus on non-replicable locations and/or assets with turnaround opportunities. As far as innovation is concerned, we will apply our background and market expertise to pursue synergies and new business models according to a real estate Ecosystem vision that transforms Gafisa’s real estate assets into business platforms to be explored throughout real estate asset’s life cycle, whether assets held Gafisa Properties or sold by Gafisa to its end clients. We are confident that these actions will allow the Company to capture value for its shareholders.

Gafisa relies on a traditional brand and is recognized as a benchmark in the Brazilian market. We are refining our new management model with dynamism and discipline, to prepare the Company for a new development and growth cycle that will restore Gafisa’s history of success and value creation for our shareholders.

Ian Andrade

Chief Financial and Investor Relations Officer

OPERATIONAL RESULTS

Table 1 – Operational Performance (R$ 000)

	3Q20	2Q20	Q/Q (%)	3Q19	A/A (%)	9M20	9M19	Y/Y (%)
Launches	263,789	-	-	-	-	263,789	-	-
Gross sales	143,878	41,383	247.7%	39,963	260.0%	185,260	219,127	(15.5%)
Dissolutions	(26,224)	(21,543)	21.7%	(10,210)	156.8%	(47,767)	(83,245)	(42.6%)
Net Sales	117,654	19,840	493.0%	29,753	295.4%	137,494	135,881	1.2%
Speed of Sales (SoS)	10.57%	2.39%	8.2 p.p.	3.00%	7.6 p.p.	12.13%	11.60%	0.5 p.p.
Delivered PSV	140,255	543,720	(74.2%)	-	-	683,975	171,648	298.5%

Table 2 – Financial Performance (R$ 000)

1Adjusted by capitalized interest with stock option plan (non-cash) and minority shareholders.

2 Backlog results net of PIS/COFINS taxes (3.65%), excluding the impact of the PVA (Present Value Adjustment) method according to Law No. 11.638.

3 Backlog results comprise the projects restricted by a condition precedent.

4 Cash and cash equivalents and marketable securities.

Launches

In 3Q20, Gafisa resumed launches, three projects with an estimated total PSV of R$264 million. These launches are a result of a relevant restructuring process. It is worth noting that the social distancing rules inflicted by the pandemic of Covid-19, suspended the operation of sales stands, affecting the economic activity in the country. The Company also postponed for a few months the launches foreseen early in the year, evidencing our focus and commitment to the Company’s turnaround. As subsequent events, we already launched for 4Q20, other two projects, highlighting the Cyano Barra with R$570 million PSV, and we are already in the pre-launch of another project in Campo Belo, with an estimated PSV of R$262 million.

Sales

Gross sales soared 247.7% to R$143.8 million in 3Q20 versus 2Q20, even during the pandemic, sales grew by 260.0% year-on-year. The quarter-on-quarter increase reflects the restructuring of the sales area, with Gafisa Sales’ improved structure. The higher speed of sales compared to 3Q19 also reflects greater sales options available, with a resumption of launches and pre-launches in 3Q20.

Dissolutions reached R$24.2 million in 3Q20, surging 12.4% from 2Q20 and 156% year-on-year. The quarter-on-quarter increase partially stems from a higher volume of deliveries in the period (not a concern for Management) and the pandemic of COVID-19. Efforts endeavored in the 2019 restructuring process advanced, resulting in renegotiations with Gafisa’s clients, a more accurate credit analysis of potential clients, as well as the recovery of client confidence in the Company.

¹ It considers LTM.

Net sales totaled R$117.7 million in 3Q20.

¹ It considers LTM.

Sales Over Supply (SoS)

Sales Over Supply (SoS) reached 10.6% in 3Q20, an increase of 8.3 p.p. from 2Q20 and 7.6 p.p. from 3Q19. This increase reflects a higher volume of sales and launches in the quarter. We believe that this figure should improve with the Company’s next launches, which besides making available new products, usually has a significant impact on inventory units sale.

Inventory (Property for Sale)

The Company’s inventory at market value consolidated with projects acquired from Upcon totaled R$995.9 million in 3Q20.

Table 3 – Inventory at Market Value 2Q20 x 3Q20 (R$ 000)

	Inventories 2Q20	Launches	Dissolutions		Gross Sales	UPCON		Adjustments				Inventories 3Q20	% Q/Q
São Paulo	686,125	45,553	22,749	(132,434)			215,563		4,193		841,749		22.7%
Rio de Janeiro	120,572	-	3,021	(5,134)			-		5,225		123,684		2.6%
Other markets	35,032	-	454	(6,310)			-		1,256		30,433		-13.1%
Total	841,729	-	26,224	(143,878)			215,563			10,675	995,866		18.3%

¹ Adjustments in the period reflect the updates related to the project scope, launch date, and pricing.

Inventory turnover in the last 12 months dropped from 73 months in 2Q20 to 53 months in 3Q20, 27.7% lower than in the previous quarter, owing to higher sales volume in the period.

Approximately 73% of inventory is composed of residential units located in the State of São Paulo and with higher liquidity.

Table 4 – Inventory at Market Value– Financial Progress – POC - (R$ 000)

	Not initiated	Up to 30% built	30% to 70% built	More than 70% built	Finished units	Total 3Q20
São Paulo	129,376	72,461	229,018	168,826	242,069	841,749
Rio de Janeiro	-	-	-	-	123,684	123,684
Other markets	-	-	-	8,599	21,834	30,433
Total	129,376	72,461	229,018	177,425	387,587	995,866

* % POC does not necessarily reveal the status of construction works, but the project’s financial progress.

Table 5 – Inventory at Market Value – Commercial x Residential Breakdown- (R$ 000)~

	Residential	Comercial	Total
SP	723,513	118,236	841,749
RJ	15,641	108,043	123,684
Others	30,433	-	30,433
Total	769,587	226,279	995,866

Delivered Projects and Transfer

In 3Q20, we delivered two projects, totaling 421 units, and a total PSV of R$140.3 million. It is also worth noting that besides delivering these two projects, in the third quarter, the Company obtained the occupancy permit for two projects with 160 units and PSV of R$166 million, besides projects delivered in 1H20 with 775 units and PSV of R$608.9 million. Total deliveries foreseen for 2020 is 10 projects with a PSV of R$971.8 million and 1,474 units. Therefore, out of the total, we already delivered/obtained occupancy permit for 9 projects or 94% of PSV.

Table 6 – Deliveries

Project	Delivery date	Launch date	Location	% share	Units 100% (Ex. swap units)	PSV % R$000
Vila Rica	feb/20	2016	Santos/SP	50%	69	65,168
Total 1Q20					69	65,168
Moov Estação Vila Prudente	abr/20	ago/16	São Paulo	100%	150	72,097
Gafisa Like Alto da Boa Vista	mai/20	ago/16	São Paulo	100%	220	158,676
Gafisa Square Ipiranga	mai/20	out/16	São Paulo	100%	224	263,490
Marquês 2900	mai/20	dez/16	São Paulo	50%	112	49,455
Total 2Q20					706	543,719
Moov Freguesia	ago/20	set/16	São Paulo	100%	307	91,893
Uplife Interlagos	ago/20	mai/15	São Paulo	100%	114	48,361
Total 3Q20					421	140,255
Total 2020					1,196	749,142

¹ Number of units corresponding to a 100% share in projects, net of swaps;

PSV transferred in 3Q20 was R$73.5 million, 3.6% lower than in 2Q20, and 48.7% higher than in 3Q19. The lower volume of transfer reflects a smaller amount of projects delivered this quarter compared to the previous quarter. We highlight that this result was achieved even amidst a pandemic, with restricted business hours at notary offices, banks, people’s movement, and our team in home office most of the time. We again reiterate the Company’s expectation of a significant increase in PSV transferred during 2020, due to the expected delivery of 10 projects in total.

Table 7 – Transfer and Delivery - (R$ 000)

	3Q20	2Q20	Q/Q (%)	3Q19	A/A (%)	9M20	9M19	Y/Y (%)
PSV Transferred¹	70,468	76,244	-7.6%	49,426	42.6%	146,711	158,449	-7.4%
Delivered Projects	2	4	-50.0%	-	-	6	2	200.0%
Delivered Units²	421	716	-41.2%	-	-	1,137	365	211.5%
PSV delivered³	140,255	543,719	-74.2%	-	-	683,974	171,648	298.5%

¹ PSV transferred refers to the effective cash inflow from units transferred to financial institutions;

² Number of units corresponding to a 100% share in projects, net of swaps;

³ PSV = Potential Sales Value of units, net of brokerage, and swap.

Landbank

With an estimated PSV of R$4.8 billion, the Company’s landbank represents potential 40 projects/phases totaling 9,599 units. Approximately 49% of the acquisition value of our land consists of most of which are located in the city of São Paulo. This quarter, the Company acquired two plots of land in São Paulo, in Vila Mariana and Butantã districts, with an estimated PSV of R$255 million.

Table 8 - Landbank (R$ 000)

	PSV¹ (%Cia.)	% Swap Total	% Swap Units	%Swap Finan.	Potential Units (%Cia.)	Potential Units (100%)
São Paulo	2,901,083	38.7%	32.5%	6.2%	6,111	6,339
Rio de Janeiro	1,282,715	72.2%	72.2%	0.0%	1,641	1,895
Others	593,614	38.1%	38.1%	0.0%	1,089	1,366
Total	4,777,412	48.6%	44.6%	4.0%	8,840	9,599

¹ The PSV (% Gafisa) reported is net of swap and brokerage fee.

² The swap percentage is measured compared to the historical cost of land acquisition.

³ Potential units are net of swap and refer to the Gafisa’s and/or its partners’ interest in the project.

Table 9 – Changes in the Landbank (2Q20 vs. 3Q20 - R$ 000)

	Initial Landbank	Land Acquisition	Launches	Dissolutions	UPCON	Adj.	Final Landbank
São Paulo	2,015,053	255,265	45,553	(232,755)	879,345	(61,378)	2,901,083
Rio de Janeiro	1,282,715	-	-	-	-	-	1,282,715
Others	593,614	-	-	-	-	-	593,614
Total	3,891,382	255,265	45,553	(232,755)	879,345	(61,378)	4,777,412

FINANCIAL RESULTS

Revenue

Net revenue amounted to R$148.6 million in the third quarter of 2020, 77.4% higher than in 2Q20, reflecting higher sales and works in progress in the period. Year-on-year, net revenue soared 66.6%, due to higher sales volume and construction works evolution.

Table 10 – Revenue Recognition (R$ 000)

	3Q20				3Q19
Launches	Contracted Sales1	% Sales	Revenue	% Revenue	Contracted Sales	% Sales	Revenue	% Revenue
2018	52,326	45.9%	50,769	34.2%	(1,354)	(4.5%)	3,057	3.4%
2017	27,241	23.9%	44,396	29.9%	(472)	(1.6%)	13,794	15.5%
2016	6,450	5.7%	10,739	7.2%	13,091	44.0%	39,625	44.4%
2015	18,260	16.0%	25,271	17.0%	13,021	43.8%	21,488	24.1%
<2014	9,671	8.5%	17,457	11.7%	5,467	18.4%	11,247	12.6%
Total	113,947	100.0%	148,632	100.0%	29,753	100.0%	89,211	100.0%

¹ Contracted sales exclude UPCON sales, as it does not have revenue recognized in the quarter

Gross Profit & Margin

Gafisa’s adjusted gross profit reached R$36.6 million in 3Q20, versus R$29.6 million in 2Q20 and R$45.3 million in 3Q19. The adjusted gross margin declined 10.7p.p. in the quarter to 24.6%, on the back of a greater conservative approach when recording provision for dissolutions, expected losses, and price variation in the period, amidst a challenging scenario of Covi-19 pandemic. Adjusted gross margin in 3Q20, excluding non-recurring items was 29.4%, higher than the margin of 2.3 p.p. recorded in 2Q20.

	3Q20	2Q20	Q/Q (%)	3Q19	Y/Y (%)	9M20	9M19	Y/Y (%)
Net Revenue	148,632	83,800	77.4%	89,212	66.6%	304,135	284,292	7.0%
Gross Profit	24,412	22,714	7.5%	38,104	(35.9%)	67,588	81,522	-17%
Gross Margin	16.4%	27.1%	-10.7p.p.	42.7%	-26.3p.p.	22.2%	28.7%	-6.5p.p.
(-) Financial Costs	(12,175)	(6,857)	77.6%	(7,147)	70.4%	(25,307)	(30,356)	-17%
Adjusted Gross Profit ¹	36,587	29,571	23.7%	45,251	(19.1%)	92,895	111,878	-17%
Adjusted Gross Profit Margin	24.6%	35.3%	-10.7p.p.	50.7%	-26.1p.p.	30.5%	39.4%	-8.8p.p.

Table 11 – Gross Margin (R$ 000)

¹ Adjusted by capitalized interests.

Selling, General and Administrative Expenses (SG&A)

Selling, general and administrative expenses totaled R$23.5 million in 3Q20, 22.3% higher than in 2Q20, and 57.9% higher than in 3Q19.

General and administrative expenses came to R$19.5 million, 29.1% higher than the previous quarter, due to a provision for a bonus of R$3.0 million in the period. In 3Q20, recurring general and administrative expenses totaled R$12.1 million, 18% lower than the R$14.2 million recorded in 2Q20.

Table 12 – SG&A Expenses (R$ 000)

	3Q20	2Q20	Q/Q (%)	3Q19	Y/Y (%)	9M20	9M19	Y/Y (%)
Selling Expenses	(3,909)	(4,047)	-3.4%	(2,170)	80.1%	(10,749)	(11,683)	-8%
G&A Expenses	(19,543)	(15,133)	29.1%	(12,678)	54.1%	(51,136)	(31,918)	60%
Total SG&A Expenses	(23,452)	(19,180)	22.3%	(14,848)	57.9%	(61,885)	(43,601)	42%

Other Operating Income/Expenses totaled expenses of R$26.5 million. Out of this amount, R$21.3 million refers to the provision for litigation and settlements made by the Company, as part of its project to settle contingent liabilities.

Table 13 – Other Operating Income/Expenses (R$ 000)

	3Q20	2Q20	Q/Q (%)	3Q19	Y/Y (%)	9M20	9M19	Y/Y (%)
Litigation Expenses	(21,357)	(19,353)	10.4%	-	0.0%	(52,708)	(45,769)	15.2%
Others	(5,100)	(662)	670.4%	169	-3117.8%	(6,509)	70	-9398.6%
Total	(26,457)	(20,015)	32.2%	169	-15755.0%	(59,217)	(45,699)	29.6%

Adjusted EBITDA

Adjusted EBITDA came to R$7.9 million in 3Q20, 2.6% higher than the R$7.7 million reported in the previous quarter. Year-on-year, Adjusted EBITDA declined compared to R$31.1 million.

Table 14 – Adjusted EBITDA (R$ 000)

	3Q20	2Q20	Q/Q (%)	3Q19	Y/Y (%)	9M20	9M19	Y/Y (%)
Net Income (Loss)	(56,493)	(23,545)	139.9%	(1,668)	3286.9%	(105,500)	(60,746)	73.7%
(+) Financial Results	28,049	2,354	1091.5%	21,548	30.2%	38,799	41,976	-7.6%
(+) Income Tax / Social Contribution	1,604	886	81.0%	508	215.7%	3,619	1,221	196.4%
(+) Depreciation and Amortization	1,936	1,882	2.9%	3,223	-39.9%	5,984	11,739	-49.0%
(+) Capitalized Interest	12,175	6,857	77.6%	7,147	70.4%	25,307	30,356	-16.6%
(+) Expenses w/ Stock Options Plans	(6)	47	(112.7%)	174	-103.4%	(362)	(2,698)	-86.6%
(+) Minority Shareholders	(700)	(112)	525.0%	119	-688.2%	(799)	121	-760.3%
(+) Litigation Expenses	21,357	19,353	10.4%	-	0.0%	52,708	45,769	15.2%
Adjusted EBITDA¹	7,922	7,722	2.6%	31,051	-74.5%	19,756	67,738	-70.8%

¹ Adjusted by capitalized interests, with a stock option plan (non-cash) and minority shareholders.

Financial Result

Net financial result totaled (R$28.1) million in 3Q20 from (R$2.4) million in 2Q20, reflecting the volatility of certain securities in the period and the effect of swap operation contracted.

Net Result

Net result in 3Q20 came negative at R$56.5 million, compared to net losses of R$23.5 million and R$1.7 million recorded in 2Q20 and 3Q19, respectively.

Table 15 – Net Result (R$ 000)

	3Q20	2Q20	Q/Q (%)	3Q19	Y/Y (%)	9M20	9M19	Y/Y (%)
Net Revenue	148,632	83,800	77.4%	89,212	66.6%	304,135	284,292	7.0%
Gross Result	24,412	22,714	7.5%	38,104	-35.9%	67,588	81,522	-17.1%
Gross Margin	16.4%	27.1%	-39.4%	42.7%	-61.5%	22.2%	28.7%	-22.5%
(-) Financial Costs	12,175	6,857	77.6%	(7,147)	-270.4%	25,307	(30,356)	-183.4%
Recurring Adjusted Gross Result¹	36,587	15,857	130.7%	45,251	-19.1%	92,895	111,878	-17.0%
Recurring Adjusted Gross Margin¹	24.6%	18.9%	30.1%	50.7%	-51.5%	30.5%	39.4%	-22.4%
Adjusted EBITDA²	7,922	7,722	2.6%	31,051	-74.5%	19.756	21.969	-10.1%
Adjusted EBITDA Margin²	5.3%	9.2%	-42.2%	34.8%	-84.7%	6.5%	7.7%	-15.9%
Adjusted Net Result³	(56,493)	(23,545)	139.9%	(1,668)	3286.9%	(105,500)	(60,746)	73.7%
( - ) Litigation Expenses	(21,357)	(19,353)	10.4%	-	0.0%	(52,708)	(45,769)	15.2%
Net Result (ex-Litigation Expenses)	(35,136)	(4,192)	738.2%	(1,668)	2006.5%	(52,792)	(14,977)	252.5%

1 Adjusted by capitalized interests.

2 Adjusted by capitalized interests, with a stock option plan (non-cash) and minority shareholders.

Revenue Backlog and Results

At the end of 3Q20, the balance of revenue backlog according to the PoC method totaled R$100.3 million, compared to R$109.6 million and R$166.1 million reported in the previous quarter and the same period last year, respectively. Margin to be recognized was 34.4%, in line with 2Q20.

Table 16 – Backlog Results (REF) (R$ 000)

	3Q20	2Q20	Q/Q (%)	3Q19	Y/Y (%)
Revenue Backlog	291,189	306,484	-5%	465,102	-37%
Backlog Costs (units sold)	(190,878)	(196,870)	-3%	(298,953)	-36%
Backlog Results	100,311	109,614	-8%	166,149	-40%
Backlog Margin	34.4%	35.8%	-132bps	35.7%	-127bps

Notes: Backlog results net of PIS/COFINS taxes (3.65%) and excluding the impact of the PVA (Present Value Adjustment) method according to Law No. 11.638.

Backlog results comprise the projects restricted by a condition precedent.

BALANCE SHEET

Cash and Cash Equivalents and Marketable Securities

On September 30, 2020, cash and cash equivalents and marketable securities totaled R$630.7 million, compared to R$570.2 million in 2Q20, reflecting the inflow of funds from a capital increase of R$218.2 million and debt amortization in the period, so that to sustain a liquidity cushion and enable our growth resumption. The Company believes that disciplined cost control and the maintenance of a liquidity reserve are essential for the operation. This business vision and team’s readiness allowed the company to go through this period of uncertainty very consistently and smoothly.

Receivables

At the end of 3Q20, total accounts receivable came to R$933.2 million. Of this amount, R$630.9 million were already recognized in the balance sheet.

Table 17 – Total Receivables (R$ 000)

	3Q20	2Q20	Q/Q(%)	3Q19	Y/Y (%)
Receivables from developments - backlog	302,220	318,095	-5%	482,721	-37%
Receivables PoC - ST (on balance sheet)	544,147	445,811	22%	409,212	33%
Receivables PoC - LT (on balance sheet)	86,843	93,529	-7%	119,765	-27%
Total	933,210	857,435	9%	1,011,698	-8%

Notes: ST – Short term | LT- Long term | PoC – Percentage of Completion Method.

Receivables from developments: Accounts receivable not yet recognized according to PoC and BRGAAP.

Receivables from PoC: Accounts receivable already recognized according to PoC and BRGAAP.

Table 18 – Receivables Schedule (R$ 000)

	Total	2020	2021	2022	2023	2024 – Onwards
Receivables Backlog	302,222	106,367	105,594	76,631	3,690	9,940
Receivables PoC	630,990	260,387	360,332	5,334	1,310	3,627
Total	933,212	366,754	465,926	81,965	5,000	13,567

Cash Generation

Table 19 – Cash Generation (R$ 000)

	1Q19	2Q19	3Q19	4Q19	1Q20	2Q20	3Q20
Cash 1	63,068	182,817	394,216	414,330	363,337	570,156	630,660
Change in Cash Available (1)	(74,092)	119,749	211,399	20,114	(50,993)	206,819	60,504
Total Debt	790,172	770,715	750,826	730,678	710,169	673,649	745,499
Change in Total Debt (2)	(99,241)	(19,457)	(19,889)	(20,148)	(20,509)	(36,520)	71,850
Capital Increase (3)	-	132,265	206,927	65,768	-	259,729	218,171
Cash Generation in the Period (1) - (2) - (3)	25,149	6,941	24,361	(25,506)	(30,484)	(16,390)	(229,517)
Final Accumulated Cash Generation ²	25,149	32,090	56,451	30,945	461	(15,929)	(245,446)

¹ Cash and cash equivalents and marketable securities.

² It considers LTM.

Liquidity

Advancing the work of strengthening the Company’s balance sheet, the Net Debt/Shareholders’ Equity ratio reached 7.6% at the end of 3Q20, compared to 8.8% reported in 2Q20, due to higher cash deriving from capital increase. Within one year, we went from a Net Debt/Shareholders’ Equity ratio of 45.6% in 3Q19 to current 7.6% in 3Q20. Net debt increased to R$123.5 million from R$114.8 million reported in the previous quarter.

Table 20 – Debt and Investor Obligation (R$ 000)

	3Q20	2Q20	Q/Q(%)	3Q19	Y/Y (%)
Housing Financial System - SFH	259,432	266,210	-2.5%	267,923	-3.2%
Real Estate Financial System - SFI	126,340	146,613	-13.8%	175,565	-28.0%
Debentures (Projects)	172,578	112,338	53.6%	194,625	-11.3%
Bank Credit Notes (Projects)	59,696	40,219	48.4%	37,794	58.0%
Subtotal Project Debt (A)	618,046	565,380	9.3%	675,907	-8.6%
Debentures (Working Capital)	70,232	33,529	109.5%	49,646	41.5%
Bank Credit Notes (Working Capital)	40,922	62,799	-34.8%	14,899	174.7%
Other operations (Working Capital)	16,299	11,941	36.5%	10,374	57.1%
Subtotal Working Capital Debt (B)	127,453	108,269	17.7%	74,919	70.1%
Total Debt (A)+(B)= (C)	745,499	673,649	10.7%	750,826	-0.7%
Cash and Cash Equivalents1 (D)	630,660	570,156	10.6%	394,216	60.0%
Net Debt (C) - (D) = (E)	114,839	103,493	11.0%	356,610	-67.8%
Shareholders’ Equity + Minority (F)	1,513,890	1,177,187	34.3%	782,074	93.6%
(Net Debt) / (SE) (E)/(F)=(G)	7.6%	8.8%	-121bps	45.6%	-3801bps
(Net Debt - Proj. Fin.) / (SE) ((E)-(A))/(F)=(H)	(33.2%)	(39.2%)	600bps	(40.8%)	759bps

¹Cash and cash equivalents and marketable securities.

The Company ended 3Q20 with R$332.6 million indebtedness falling due this year, accounting for 44.6% of total debt. Note that approximately 82.9% of the Company’s debt is linked to projects, therefore, maturities are connected with the delivery of projects to still occur in 2020, and we already delivered or obtained the occupancy permit for 9 projects, or 94% of PSV estimated for this year’s deliveries. On September 30, 2020, the consolidated average cost of debt was 9,5% p.a.

Table 21– Debt Maturity (R$ 000)

	Average cost (a.a.)	Total	Until Dec/20	Until Dec/21	Until Dec/22	Until Dec/23	After Dec/23
Housing Financial System - SFH	TR + 7,00% a 14,20%	259,432	187,455	-	-	-	71,977
Real Estate Financial System - SFI	Pre +13,66% / 143% CDI	126,340	519	77,298	7,800	7,800	32,923
Debentures (Projects)	CDI + 3% / CDI + 3,75% / CDI + 5,00% / CDI + 6,00%	172,578	73,669	8,361	465	-	90,083
Bank Credit Notes (Projects)	CDI + 3,50% / Pre + 16,77%	59,696	12,292	23,027	19,660	4,717	-
Subtotal Project Debt (A)		618,046	273,935	108,686	27,925	12,517	194,983
Debentures (Working Capital)	IPCA + 7,8%	70,232	42,279	11,426	10,670	5,857	-
Bank Credit Notes (Working Capital)	CDI + 3,7%/ 4,25%	40,922	62	40,860	-	-	-
Other operations (Working Capital)	Pre + 11,36%	16,299	16,299	-	-	-	-
Subtotal Working Capital Debt (B)		127,453	58,640	52,286	10,670	5,857	-
Total Debt (A)+(B)= (C)		745,499	332,575	160,972	38,595	18,374	194,983
Total maturity per period %		-		44.6%	21.6%	5.2%	2.5%
Project debt maturity as % of total debt (B)/ (E)		-	-	82.4%	67.5%	72.4%	68.1%
Working capital maturity as % of total debt ((A)+(C))/ (E)		44.6%	44.6%	17.6%	32.5%	27.6%	31.9%

Consolidated Income Statement

	3Q20	2Q20	Q/Q (%)	3Q19	Y/Y (%)	9M20	9M19	Y/Y (%)
Net Revenue	148,632	83,800	77.4%	89,212	66.6%	304,135	284,292	7.0%
Operational Costs	(124,220)	(61,086)	103.4%	(51,108)	143.1%	(236,547)	(202,770)	16.7%
Gross Result	24,412	22,714	7.5%	38,104	(35.9%)	67,588	81,522	-17.1%
Gross Margin	16,4%	27,1%	-10.7p.p.	42,7%	-26.3p.p.	22,2%	28,7%	-244.9%
Operational Expenses	(51,952)	(43,131)	20.5%	(17,597)	195.2%	(131,469)	(98,950)	-277.0%
Selling Expenses	(3,909)	(4,047)	(3.4%)	(2,170)	80.1%	(10,749)	(11,683)	-8.0%
General and Administrative Expenses	(19,543)	(15,133)	29.1%	(12,678)	54.1%	(51,136)	(31,918)	60.2%
Other Operating Revenue/Expenses	(26,457)	(20,015)	32.2%	169	(15755.0%)	(59,217)	(45,699)	29.6%
Depreciation and Amortization	(1,936)	(1,882)	2.9%	(3,223)	(39.9%)	(5,984)	(11,739)	-49.0%
Equity Income	(107)	(2,054)	(94.8%)	305	(135.1%)	(4,383)	2,089	-309.8%
Operational Result	(27,540)	(20,417)	34.9%	20,507	(234.3%)	(63,881)	(17,428)	-294.1%
Net Financial Result	(28,049)	(2,354)	1091.5%	(21,548)	30.2%	(38,799)	(41,976)	-252.9%
Financial Income	(6,512)	21,091	(130.9%)	3,229	(301.7%)	22,578	11,963	88.7%
Financial Expenses	(21,537)	(23,445)	(8.1%)	(24,777)	(13.1%)	(61,377)	(53,939)	13.8%
Net Income Before Taxes on Income	(55,589)	(22,771)	144.1%	(1,041)	5240.0%	(102,680)	(59,404)	-191.6%
Deferred Taxes	-	-	-	-	-	-	-	-
Income Tax and Social Contribution	(1,604)	(886)	81.0%	(508)	215.7%	(3,619)	(1,221)	196.4%
Net Income After Taxes on Income	(57,193)	(23,657)	141.8%	(1,549)	3592.3%	(106,299)	(60,625)	75.3%
Minority Shareholders	(700)	(112)	525.0%	119	(688.2%)	(799)	121	-760.3%
Net Income	(56,493)	(23,545)	139.9%	(1,668)	3286.9%	(105,500)	(60,746)	73.7%

Consolidated Balance Sheet

	3Q20	2Q20	Q/Q (%)	3Q19	Y/Y (%)
Current assets
Cash and Cash Equivalents	6,705	19,512	-66%	12,819	-48%
Securities	623,955	550,644	13%	381,397	64%
Receivables from clients	544,147	445,811	22%	409,212	33%
Properties for sales	1,317,144	855,315	54%	820,892	60%
Other account receivable	148,435	178,058	-17%	119,897	24%
Prepaid expenses and other	1,045	1,131	-8%	2,159	-52%
Land for sale	7,014	7,014	0%	38,681	-82%
Subtotal	2,648,445	2,057,485	29%	1,785,057	48%
Non current assets
Receivables from clients	86,843	93,529	-7%	119,765	-27%
Properties for sales	191,985	293,573	-35%	190,953	1%
Other account receivable	224,683	221,739	1%	145,232	55%
Subtotal	503,511	608,841	-17%	455,950	10%
Intangible, property and equipment	21,297	17,444	22%	24,465	-13%
Investments	272,497	138,566	97%	300,726	-9%
Total Asset	3,445,750	2,822,336	22%	2,566,198	34%
Current liabilities
Loans and financing	349,348	283,923	23%	364,766	-4%
Debentures	127,147	119,367	7%	179,423	-29%
Obligation for purchase of land	259,336	111,790	132%	105,823	145%
Material and service suppliers	131,054	131,941	-1%	129,825	1%
Taxes and contributions	82,979	83,689	-1%	64,886	28%
Provision for contingencies	193,357	184,084	5%	179,681	8%
Other liabilities	297,086	253,603	17%	207,540	43%
Subtotal	1,440,307	1,168,397	23%	1,231,944	17%
Non current liabilities
Loans and financing	153,340	243,859	-37%	141,789	8%
Debentures	115,663	26,500	336%	64,848	78%
Obligation for purchase of land	87,942	92,998	-5%	147,147	-40%
Deferred taxes	12,114	12,114	0%	49,372	-75%
Provision for contingencies	86,250	78,809	9%	110,564	-22%
Other liabilities	36,244	22,472	61%	38,460	-6%
Subtotal	491,553	476,752	3%	552,180	-11%
Shareholders’ Equity
Shareholders’ equity	1,509,624	1,175,852	28%	780,159	94%
Minority Interest	4,266	1,335	220%	1,915	123%
Subtotal	1,513,890	1,177,187	29%	782,074	94%
Total Liabilities and Shareholders’ Equity	3,445,750	2,822,336	22%	2,566,198	34%

Balance Sheet by brand - Consolidated 3Q20

	Gafisa	Upcon	Consolidated
Current assets
Cash and Cash Equivalents	5,190	1,515	6,705
Securities	623,955	-	623,955
Receivables from clients	512,367	31,780	544,147
Properties for sales	902,215	414,929	1,317,144
Other account receivable	210,381	9,656	148,435
Prepaid expenses and other	1,045	-	1,045
Land for sale	7,014	-	7,014
Subtotal	2,262,167	457,880	2,648,445
Non current assets
Receivables from clients	83,588	3,255	86,843
Properties for sales	191,985	-	191,985
Other account receivable	223,848	835	224,683
Subtotal	499,421	4,090	503,511
Intangible, property and equipment	19,877	1,420	21,297
Investments	270,123	2,374	272,497
Total Asset	3,051,588	465,764	3,445,750
Current liabilities
Loans and financing	312,371	108,579	349,348
Debentures	127,147	-	127,147
Obligation for purchase of land	128,280	131,056	259,336
Material and service suppliers	128,777	2,277	131,054
Taxes and contributions	77,662	5,317	82,979
Provision for contingencies	193,357	-	193,357
Other liabilities	280,023	17,063	297,086
Subtotal	1,247,617	264,292	1,440,307
Non current liabilities
Loans and financing	128,881	24,459	153,340
Debentures	115,663	-	115,663
Obligation for purchase of land	61,404	26,538	87,942
Deferred taxes	12,114	-	12,114
Provision for contingencies	77,226	9,024	86,250
Other liabilities	20,686	15,558	36,244
Subtotal	415,974	75,579	491,553
Shareholders’ Equity
Shareholders’ equity	1,387,362	122,262	1,509,624
Minority Interest	635	3,631	4,266
Subtotal	1,387,997	125,893	1,513,890
Total Liabilities and Shareholders’ Equity	3,051,588	465,764	3,445,750

Consolidated Cash Flow

	3T20	3T19	9M20	9M19
Net Income (Loss) before taxes	(55,589)	(1,041)	(102,681)	(59,404)
Expenses/revenues that do not impact working capital	31,713	1,522	108,686	11,897
Depreciation and amortization	1,936	3,223	5,984	11,739
Impairment	-	(2)	(1,044)	(28,221)
Expenses with stock option plans	(5)	174	(362)	(2,698)
Unrealized interest and fees, net	(4)	1,216	2,130	4,302
Equity income	107	(305)	4,383	(2,089)
Warranty provision	1,998	(2,136)	1,102	(3,918)
Provision for contingencies	21,358	-	52,708	45,885
Profit sharing provision	3,107	-	6,194	500
Provision (reversal) for doubtful accounts	2,833	(5,342)	34,197	(17,116)
Provision for fine due to construction work delay	383	1,935	3,394	754
Quotas assignment		2,759		2,759
Receivables	(62,895)	42,139	(83,182)	127,949
Properties for sale	54,688	14,765	(27,289)	145,244
Other receivables	(22,053)	(11,886)	(88,096)	(35,981)
Prepaid expenses	86	159	815	509
Obligations for purchase of land	(15,104)	(1,590)	(32,744)	(56,461)
Taxes and contribution	(6,027)	4,528	7,794	7,610
Suppliers	(2,960)	(39,327)	33,726	(2,189)
Payroll, charges and bônus provision	(2,834)	(546)	(7,721)	(2,366)
Other accounts payable	(110,900)	62,090	(71,268)	(93,534)
Transactions with related parties	25,623	7,765	47,135	26,045
Paid taxes	(1,604)	(508)	(3,619)	(1,221)
Cash used in operating activities	(167,856)	78,070	(218,444)	68,098
Acquisition of properties and equipment	(4,369)	1,656	(4,618)	(4,361)
Redemption of securities, collaterals, and credits	151,192	2,311	287,594	50,445
Investment in marketable securities and restricted credits	(226,018)	(209,548)	(511,169)	(326,986)
Equity Securities	-	(2,717)	-	-
Cash used in investing activities	(79,195)	(208,298)	(228,193)	(280,902)
Increase of loans and financing	192,447	37,885	310,900	89,672
Amortization of loans and financing	(182,030)	(58,990)	(359,646)	(232,561)
Loan operations	(3,464)	(759)	(9,013)	(10,117)
Sale of treasury shares	-	-	-	148
Proceeds from sale of treasury shares	7,605	(53,389)	19,251	6,984
Capital increase	218,171	-	477,900	132,266
Subscription and payment of common shares	-	206,927	-	206,927
Cash acquired from Upcon	1,515	-	1,515	-
Cash Flow from Financing Activities	234,244	131,674	440,907	193,319
Increase (Decrease) in cash and cash equivalents	(12,807)	1,446	(5,730)	(19,485)
Beginning of the period	19,512	11,373	12,435	32,304
End of the period	6,705	12,819	6,705	12,819

This release contains forward-looking statements about business prospects, estimates for operating and financial results, and Gafisa’s growth prospects. Readers can identify many of these statements when reading words such as “estimates,” “believes,” “expects,” and “will,” as well as similar words or their respective negatives. Although management believes the expectations conveyed in such statements to be reasonable, it is unable to guarantee that such expectations will come to fruition, and they should not be deemed as projections. By their nature, forward-looking statements require us to make assumptions and, as such, are subject to risks and uncertainties. They are mere expectations and therefore are based exclusively on what management expects concerning the future of the business and its continued access to capital to fund the Company’s business plan. Such forward-looking statements depend, substantially, on changes in market conditions, government regulations, competitive pressures, the performance of the Brazilian economy, and the industry, among other factors; therefore, they are subject to change without prior notice. The forward-looking statements included in this release are based on the assumption that our plans and operations will not be affected by such risks, but if our plans and operations happen to be affected by these risks, the forward-looking statements might become inaccurate. We do not commit to revising these forward-looking statements unless it is explicitly required by the applicable securities regulation.

(A free translation of the original report in Portuguese as published in Brazil)

Gafisa S.A.

~~Notes~~Financial ~~to the quarterly financial information~~Statements

~~September~~December 3031, 2020

~~(Amounts in thousands of Brazilian Reais, except as otherwise stated)~~Contents

Management Report	1
Independent Auditor’s Report on the Financial Statements	7

Audited financial statements

Statements of financial position	13
Statement of profit or loss	15
Statement of comprehensive income	16
Statement of changes in equity	17
Statement of cash flows	18
Statement of value added	19
Notes to the financial statements	20
Statement of the executive officers about the financial statements	78
Statement of the executive officers about the opinion report of the independent auditors	79
Minutes of the Audit Committee’s meeting	80
Minutes of the Board of Directors’ meeting	81
Earnings release 4Q20	82

2020 MANAGEMENT REPORT

GAFISA RESUMES SUSTAINABLE GROWTH AND PROFITABILITY IN 2020

Recurring net income of R$ 29 million for the 4Q20 as compared to R$ 23 million down for the 4Q19, an increase of R$ 52 million.

Dear Shareholders,

In 2020 we have reaped the first fruits of the restructuring process initiated in 2019 in an incisive and assertive way. Supported by a capital structure strengthened by our shareholders, combined with the current Management’s determination and focus on results, we have successfully responded to the extraordinary challenges of an unprecedent crisis and achieved impressive results. The resumption of Gafisa’s growth has materialized in 2020 in the operational, financial and strategic levels.

In the operational level, we have launched R$898.0 million in TSV, the best annual performance since 2016. The resumption of launches in 2020 is a direct consequence of the Company’s growth strategy in organic way as well as through M&As, considering that 67.5% of launches arise from the assets acquired by the new management through M&A. Two transactions are worth noting: the acquisition of Upcon and four Calçada projects in Rio. In both, besides the landbank, there was an important Human Capital addition, with the joining of cooperative and high performance teams. The acquisition of Calçada also enabled “Gafisa Rio” to start its operations with an iconic launch already in the 4Q20, and to have active operations on a local office’s initiative.

In terms of landbank, we have a acquired a total of 14 land in 2020 with potential TSV of R$2.1 billion, considering that approximately 60.0% are also from M&A transactions. In the fourth quarter, our sales amounted to R$292.0 million, doubling our sales for the 3Q20, and the best quarterly sales performance since 2Q18. This increase shows that not only Gafisa’s launches resumed with differentiated ventures, but also the continuous strengthening of our sales force. Additionally, we have delivered a total of 12 ventures in 2020, with over 2,000 units and R$ 1.1 billion in TSV, all within the terms renegotiated by the new management with customers, which shows the Company’s focus on results and great delivery capacity. This large delivery volume was made in a year marked by the challenges posed by the pandemic, which reaffirms the great commitment and consistency of the new Management’s work with all of its stakeholders.

It is worth noting that the year 2020 was deeply marked by the Covid-19 pandemic, which required rapid and assertive changes to work practices, adjustments in operational and financial planning, among other changes introduced to assure that construction works continued, but without failing to give priority to the safety of our employees, customers and suppliers. As Company and part of a deeply shaken society, Gafisa understands its role and shows solidarity with the innumerous victims of this crisis. This experience heightened our sense of responsibility and our commitment to work for the benefit of the society, the environment and governance.

Our financial results for the 4Q20 and 2020 reflect the growth of our operating activities and start to reflect the new project era. We recorded a growth in adjusted gross margin from 24.6% for the 3Q20 to 29% for the 4Q20. Net revenue reached R$579.9 million, a growth above 290.0% as compared to the 3Q20, being determining factor in generating a net income of R$29 million (all of which recurring). When compared to the recurring net income for the 4Q19, which was R$ 23 million down, we have an increase of R$ 52 million in the latest quarter. It is also worth mentioning that the REF margin (unrecognized profit or loss) is still at a very healthy level of 32.8%.

This year can be considered as the company’s recovery in the credit agenda in the financial and capital markets. New funding for projects were negotiated at rates from CDI + 3.5% p.a. All projects that were launched have identified financing calculations, as well as all construction works in progress. Moreover, we have adopted for some projects the rationale of obtaining finance in advance, considering the business lifecycle, partially or fully refunding land disbursement and guaranteeing funds for completing works. We thus started to re-leverage the Company, with discipline and well-developed projects, to maximize the return of capital of shareholders and enjoying the good moment in the credit market.

We rely on a well-devised business planning for the next cycles, and for 2021 we have disclosed the Launch Guidance of R$1.5 to R$1.7 billion. Our short and medium-term landbank considers a pipeline of 18 projects and approximately R$2.5 billion in estimated TSV. We continue to intensely seek growth through acquisitions of both land and assets for Gafisa or Gafisa Propriedades.

Also in 2020, we have structured Gafisa Propriedades according to our strategic planning devised in the end of 2019 and that included the transformation of Gafisa into a broad real estate business platform, with new business lines and use of innovation and technology to diversify its income generation. We gained leverage from the Company’s extensive expertise in the real estate sector, this new business unit will be Gafisa’s vehicle for real estate investment, development and management focused on income generation.

Gafisa understands its power and relevance in the development and construction market, potentialized by the tradition of its trademark – one of the top recognized trademarks in this sector of the Brazilian market. Our new management model has been adopted with energy and discipline, reviving the Company’s history of success and creation of value to our shareholders.

OPERATIONAL AND FINANCIAL PERFORMANCE

The year 2020 marked the consistent recovery of good operational performance by the Company, of which sales, launches and deliveries of construction works were noteworthy.

In the year 2020, the Company resumed its launches, relying on five ventures that totaled a TSV estimated at R$898 million. It is worth noting that the Covid-19 pandemic - that restricted travels, closed sales stands and affected the country’s economic activities - postponed for some months the launches planned for the beginning of the year, demonstrating our focus and commitment to the Company’s growth recovery.

Sales

In 2020, the Company recorded gross sales of R$ 516.9 million (without including a transaction between Gafisa and Gafisa Propriedades), 77.0% up on 2019. The growth can be explained by the resumption of launches, which had been discontinued from the 1Q19, besides the continuous strengthening of our sales force. Cancelled contracts totaled R$78.9 million, 18.1% drop from 2019, of R$96.4 million.

Changes in Gross Sales and Cancelled Contracts (R$ million)

Total deliveries in 2020 was above the estimate of 10 ventures, reaching 12 delivered projects, with 2,115 units and a total TSV of R$1.1 billion. Such large delivery volume in a year marked by the pandemic, and little longer than 18 months after the new Management took over the Company.

Net revenue reached R$579.9 million for the 4Q20, an increase of over 290.0% as compared to the 3Q20, a result of the increase in sales, acquisitions made over the period, and construction progress. In relation to the same period of the previous year, the growth was nearly 400.0%. Considering yearly figures, in 2020 net revenue totaled R$884.0 million, up 120.8% from 2019.

Gafisa’s adjusted gross profit for the fourth quarter amounted to R$168.0 million, as compared to the R$36.6 million reported for the 3Q20 and R$44.2 million for the 4Q19. The adjusted gross margin for the quarter was 29.0%, a 4.4 p.p. increase quarter-on-quarter, due to the start of the recognition of the new management projects, which have overall shown better margins as compared to previous managements.

In the year-over-year comparison, we also note a growth in total adjusted gross profit, which reached R$260.9 million in 2020, up 76.1% from 2019.

¹ Adjusted for capitalized interest

The net income was recorded in the amount of R$29.0 million for the 4Q20, while a net loss was recorded in the amount of R$56.5 million for the 3Q20, and profit of R$47.0 million was recorded for the 4Q19 – a drop of 38.3% year-over-year. Meanwhile, in the 4Q19 nearly R$ 33 million was non-recurring. Considering recurring net income, the 4Q20 is double as compared to the one recorded for the 4Q19. In relation to yearly amounts, the net loss for 2020 amounted to R$76.5 million.

The net income for the 4Q20 starts to reflect the new era of ventures, with differentiated projects and more robust margins.

HUMAN RESOURCES

We have an experienced team who is at the vanguard of the Brazilian real estate sector and other business types, which positively contributes to the continuous improvement in our processes, client satisfaction and respect, as well as to attain favorable results to our Company.

Occupational safety and accident are central themes for Gafisa. Therefore, we maintain a continuous program of risk identification, prevention and mitigation, which aims, besides preserving the physical integrity of our direct or indirect staff, to offer a basis for a healthier life. For us, investing in safety is a guarantee of wellness in and out of the work environment. We offer training programs to the team in the field (directly related to construction works), as well as to our collaborators of third-party companies, who provide services in our sites and some ventures.

The Company has 277 employees (base December 2020).

CORPORATE GOVERNANCE

Gafisa’s Board of Directors is responsible for making decisions and formulating general guidelines and policies for the Company’s business, including its long-term strategies. In addition, the Board also appoints executive officers and supervises their activities. The decisions of the Board of Directors are taken by the majority vote of its members. In the event of a disagreement, the Chair of the Board of Directors has, in addition to her/his personal vote, to cast a tie-breaking vote.

The current Board is formed by eight members, most of whom are independent (62.5%). The members serve for a unified term of office of two years*, according to the Listing Rules of Novo Mercado, with reelection and removal being permitted by shareholders in Shareholders’ Meeting. The members of Board of Directors are shown in the following table.

Name	Birth date	Position	Election date
Leo Julian Simpson	03/30/1956	Chairman	April 15, 2019
Antonio Carlos Romanoski	02/12/1945	Effective Member	April 15, 2019
Eduardo Larangeira Jácome	10/15/1955	Effective Member	April 15, 2019
Nelson Sequeiros Rodriguez Tanure	11/21/1951	Effective Member	April 15, 2019
João Antonio Lopes Filho	08/12/1963	Effective Member	February 7, 2020
Thomas Cornelius Azevedo Reichenheim	12/04/1947	Effective Member	April 15, 2019
Nelson de Queiroz Sequeiros Tanure	05/28/1985	Effective Member	August 7, 2020
Gilberto Benevides	07/24/1951	Effective Member	April 30, 2020

FISCAL COUNCIL

Gafisa’s Articles of Incorporation provide for a non-permanent Fiscal Council, the Shareholders’ Meeting being able to determine its installation and members, as provided in the Law. The Fiscal Council, when installed, will comprise three to five members, and an equal number of alternates. The operations of the Fiscal Council, when installed, ends in the first Annual Shareholders’ Meeting (ASM) held after its installation, the re-election of its members being permitted. The compensation of fiscal council members is set at the Shareholders’ Meeting that elect them. The Company’s Fiscal Council is not currently installed.

EXECUTIVE MANAGEMENT

The Executive Management is the Company’s body mainly responsible for managing and daily monitoring the general policies and guidelines established at the Shareholders’ Meeting and Board of Directors. Gafisa’s Executive Management shall be composed of a minimum of two and a maximum of eight members, including the CEO, the CFO and the IR Officer, elected by the Board of Directors for a three-year term of office, reelection being permitted, as established in the Articles of Incorporation. In the current term of office, six members comprise the Executive Management:

NAME	POSITION	DATE OF LAST INVESTITURE	TERM OF OFFICE
Ian Monteiro de Andrade	CFO and Investor Relations Officer	March 2, 2020	March 2, 2023
Guilherme Augusto Soares Benevides	COO	May 17, 2019	May 16, 2022
Guilherme Luis Pesenti e Silva	Statutory Officer	January 28, 2020	January 28, 2023
Luiz Fernando Ortiz	Statutory Officer	January 28, 2020	January 28, 2023
Fabio Freitas Romano	Statutory Officer	March 2, 2020	March 2, 2023
André Ackermann	Statutory Officer	March 2, 2020	March 2, 2023

AUDIT COMMITTEE

The Audit Committee supervises the Company’s accounting and financial reporting, planning and analysis processes, including those of quarterly and financial reporting. It guides the involvement and disclosure of auditors throughout the auditing process, assuring the full compliance with legal requirements and accounting standards. Moreover, it is responsible for monitoring the internal control and internal audit processes, and choosing the accounting policies. The members are Gilberto Braga, Pedro Carvalho de Mello and Thomas Cornelius Azevedo Reichenheim.

DIVIDENDS, SHAREHOLDERS RIGHTS AND SHARE DATA

In order to protect the interest of all shareholders equally, the Company establishes that, according to the effective legislation and the best governance practices, the following rights are entitled to Gafisa’s shareholders:

Vote in annual or extraordinary Shareholders' Meeting, and make recommendations and provide guidance to the Board of Directors on decision making;

Receive dividends and participate in profit sharing or other share-related distributions, in proportion to their interests in capital;

Supervise Gafisa's management, according to its Articles of Incorporation, and step down from the Company in the cases provided in the Brazilian Corporate Law; and

Receive at least 100% of the price paid for common share of the controlling stake, according to the Listing Rules of Novo Mercado, in case of public offering of shares as a result of the disposal of the Company's control.

Under the terms of article 47, paragraph 2 (b) of Articles of Incorporation, the balance of net income for the year, calculated after the deductions provided in the Articles of Incorporation and adjusted according to article 202, of the Brazilian Corporate Law, will have 25% of it allocated to the payment of mandatory dividend to all shareholders of the Company.

Considering that the Company recognized loss for the year ended December 31, 2020, there is no proposal for allocation of net income and dividend distribution for such year.

CAPITAL MARKETS

The Company has diluted capital, and its securities are traded in the Brazilian market and abroad through American Depositary Receipt (ADR). From December 17, 2018, Gafisa’s shares are no longer listed on the New York Stock Exchange (NYSE), and its ADRs started to be traded Over the Counter (OTC). The Company’s delisting process was approved in the meeting of the Board of Directors held on November 26, 2018.

Gafisa is currently reevaluating the re-listing process of the New York Stock Exchange (NYSE), aiming to increase the visibility of the Company and access to new markets.

In 2020, we reached an average daily trading volume of R$35.6 million on B3 and US$ 33,071 on NYSE/OTC. The Company’s shares ended the year 2020 quoted at R$4.35 (GFSA3) and US$1.62 (GFASY).

INDEPENDENT AUDITORS

The Company’s policy on commissioning non-external audit services to independent auditors is based on principles that preserve their autonomy. These internationally accepted principles consist of the following: (a) the auditor cannot audit its own work, (b) the auditor cannot function in the role of management in its client, and (c) the auditor cannot promote the interests of its client. According to Article 2 of CVM Instruction 381/03, Gafisa informs that BKR Lopes Machado, the independent audit firm of the Company and its subsidiaries, did not provide services other than independent audit in 2020.

MANAGEMENT STATEMENT

The Executive Management declares, in compliance with article 25, paragraph 1, items V and VI, of CVM Instruction 480/2009, that it revised, discussed and agrees with the Financial Statements contained in this Report and the opinion issued in the Independent Auditor’s Report on them.

INDEPENDENT AUDITOR’S REPORT ON INDIVIDUAL AND CONSOLIDATED FINANCIAL STATEMENTS

Shareholders and Management of

Gafisa S.A.

São Paulo, SP

Opinion

We have audited the accompanying individual and consolidated financial statements of Gafisa S.A. (“Gafisa” or “Company”), identified as Company and Consolidated, respectively, which comprise the statement of financial position as of December 31, 2020, and the respective statement of profit or loss, statement of comprehensive income, statement of changes in equity, and statement of cash flows for the year then ended, as well as the corresponding explanatory notes, including the summary of significant accounting policies.

Opinion on the individual financial statements

In our opinion, the aforementioned individual financial statements present fairly, in all material respects, the financial position of Gafisa S.A. as of December 31, 2020, and the performance of its operations and cash flows for the year then ended, in accordance with the accounting practices adopted in Brazil, applicable to real estate development entities in Brazil, registered with the Brazilian Securities and Exchange Commission (CVM).

Opinion on the consolidated financial statements

In our opinion, the aforementioned consolidated financial statements present fairly, in all material respects, the consolidated financial position of Gafisa S.A. as of December 31, 2020, and its consolidated performance of its operations and cash flows for the year then ended, in accordance with the accounting practices adopted in Brazil and the International Financial Reporting Standards (IFRS), issued by the International Accounting Standards Board (IASB), applicable to real estate development entities in Brazil, registered with the Brazilian Securities and Exchange Commission (CVM).

Basis for opinion on the individual and consolidated financial statements

We conducted our audit in accordance with the Brazilian and International Standards on Auditing. Our responsibilities, according to such standards, are described in the following section, entitled “Auditor’s responsibility for the audit of individual and consolidated financial statements”. We are independent of the Company and its subsidiaries, according to the relevant ethical principles established in the Accountant’s Code of Professional Ethics and the professional standards issued by the Federal Accounting Council (CFC), and comply with other ethical responsibilities according to such standards. We believe that the audit evidence we have obtained is sufficient and appropriate to base our opinion.

Emphasis

Accounting practices adopted in Brazil applicable to real estate development entities in Brazil, registered with the CVM

As described in Note 2.1, the individual (Company) and consolidated financial statements have been prepared in accordance with the accounting practices adopted in Brazil and the International Financial Reporting Standards (IFRS), issued by the International Accounting Standards Board (IASB), applicable to real estate development companies in Brazil, registered with the CVM. Accordingly, the determination of the accounting policy to be adopted by entity, on recognition of revenue from purchase and sale of real estate unit not yet completed, on aspects related to transfer of control, follows the understanding expressed by CVM in the Circular Letter/CVM/SNC/SEP 02/2018 on the application of NBC TG 47 (IFRS 15).

Our opinion does not contain exception in relation to this matter.

Key audit matters

Key Audit Matters (KAM) are those that, in our professional judgment, were of most significance in our audit of the current year. These matters were addressed in the context of our audit of the individual and consolidated financial statements as a whole, and in forming our opinion thereon, and, therefore, we do not provide a separate opinion on these matters.

Recognition of revenues

The Company recognizes real estate sales revenue during construction as established in the Circular Letter CVM/SNC/SEP 02/2018, as described in the Notes 2.1 and 2.2.2 to the individual and consolidated financial statements. The recognition of the revenue of the Company and its subsidiaries requires the measurement of progress and satisfaction of performance obligation over time. This measurement requires significant and timely judgment by the Management of the Company and its subsidiaries of the estimate of inputs and expenditures necessary for satisfying the respective performance obligations, considering, for example, the costs to be incurred until the completion of construction works and measurement of the progress of the respective real estate ventures.

Consequently this matter was considered key for our audit because we consider the high risk of subjectivity in the evaluation of the estimates made by the Company’s Management, linked to the relevance and amounts involved in revenue recognition.

How our audit conducted this matter:

Our main audit procedures aimed at the appropriate recognition of the revenue from real estate sales during construction were the following: (i) Evaluation of the effectiveness of the internal controls directly related to the approval and revision of construction costs (incurred and to be incurred), used in the calculation of the percentage of completion of real estate ventures; (ii) On sampling basis, we have obtained budget maps – from the commencement of construction of the qualifiable asset until its latest version - and we compared them with the accounting records. We also compared, on sampling basis, the documents supporting the incurred costs, units sold, and amount of sales contracts used in revenue calculation. (iii) Recalculation of revenue recognized based on information extracted from budgets approved by the engineer responsible for the venture. (iv) analytical reviews of the estimates of costs incurred and to be incurred; and (v) evaluation of the disclosure in the individual and consolidated financial statements.

Based on the findings of the followed audit procedures, we understand that: (i) the assumptions adopted by Management to estimate the costs to be incurred are acceptable in the context of the individual and consolidated financial statements; and (ii) the calculations made by Management about the percentage of completion correspond to the criteria established in the Circular Letter CVM/SNC/SEP 02/2018.

Provisions and contingent liabilities

According to Note 2.2.1 – item © and 16, the Company and its subsidiaries are parties to lawsuits of tax, civil and labor nature, for which Management estimates the involved amounts and records a provision in the individual and consolidated financial statements for the cases it considers that there will be a probable loss, as established in the accounting standard CPC 25 (IAS 17) - Provisions, Contingent Liabilities and Contingent Assets. Besides the lawsuits considered as probable loss, the Company is party to labor and civil lawsuits in progress, for which no provision is recorded, as the likelihood of loss is considered possible or remote by Management, based on the positions of its legal counsel. The risk evaluation and loss estimates are prepared by management based on available evidences and opinion of the Company’s legal counsel, involving high judgment level, given the complexity of themes. The progress of such lawsuits in the many applicable levels may result in change in the evaluation of risk of loss, and significantly impact the recognized provisions and the profit or loss of the Company and its subsidiaries.

Due to the volume of claims, the criteria established for timely identifying the need for recognizing a provision and the existence of significant judgments involved in the process of evaluation and measurement of provisions and disclosures of contingent liabilities, we considered it a key audit matter.

How our audit conducted this matter:

Our audit procedures included, but were not limited to the following: (i) obtaining, reading and evaluating the mails of the legal counsel of the Company and its subsidiaries, (ii) matching the total contingent liabilities mentioned by the Company’s legal counsel that are expected to lead to a probable outflow of funds with the existing provision in the individual and consolidated financial statements, (iii) inspecting the Management’s meeting minutes, and (iv) analyzing the disclosures made in the notes to the individual and consolidated financial statements.

We consider that the criteria and assumptions adopted by Management for determining the provision for contingent liabilities, as well as the corresponding disclosures are reasonable, being consistent with the information received during our audit.

Business combination – Company and Consolidated

As detailed in Notes 2.1 and 9.1.1 to the financial statements, the Company completed the process of acquisition of the total shares in Upcon S.A. (“UPCON”) on September 23, 2020 and the process of acquisition of a total of four ventures of Calçada S.A. (SPE of Calçada) on November 16, 2020, companies that carry out operations in the same business segments of the Company. This transaction was recognized by using the acquisition method, which requires, among other procedures, that the Company determines at the effective control acquisition date, the fair value of the consideration transferred, the fair value of assets acquired and liabilities assumed, and the determination of goodwill or gain from bargain purchase. Such procedures often involve a high level of judgment and are subject to a high level of uncertainty. In view of the related high judgment level and the impact that any change in assumptions may have on the financial statements, we consider this to be a key audit matter.

Performed audit procedures

Our audit procedures included, but were not limited to, reading the documents that formalized the transaction, such as contracts and minutes, and obtaining evidences that support the determination of the control acquisition date and consideration transferred, and calculation of the acquisition cost. With the support of our corporate finance experts, we analyzed the methodology adopted for measuring the previously held interest in acquired assets and liabilities assumed, and evaluated whether the adopted assumptions for projecting cash flows and making calculations were reasonable, by comparing, when available, with market information, as well as evaluated the sensitivity analysis regarding the main adopted assumptions and the impacts of possible changes in such assumptions on the measured amounts and their relevance in relation to the financial statements as a whole.

Based on the analyzed information, we analyzed the calculation to determine acquisition cost and goodwill, and evaluated the appropriateness of the disclosures made by the Company.

Based on the evidences obtained through the above-summarized procedures, we consider the balances related to the investments in UPCON and Calçada’s SPE acceptable, and we consider that the judgments and assumptions adopted by management to evaluate the recoverable amount of goodwill to be reasonable, and the disclosures are consistent with the obtained data and information.

Other matters

Statements of Value Added

The individual and consolidated statements of value added (DVA) for the year ended December 31, 2020, prepared under the responsibility of the Company’s management, and presented as supplementary information for IFRS purposes, were submitted to the audit procedures performed together with the audit of the financial statements of the Company. To form our opinion, we evaluated whether these statements are reconciled with the financial statements and accounting records, as applicable, and whether their formats and contents follow the criteria established in the NTC TG 09 – Statement of Value Added. In our opinion, the accompanying statements of value added were fairly prepared, in all material respects, according to the criteria established in such Standard and are consistent with the individual and consolidated financial statements taken as a whole.

Other information that accompany the individual and consolidated financial statements and the auditor’s report

The Company’s Management is responsible for such other information, which comprise the Management Report.

Our opinion on the individual and consolidated financial statements does not include the Management Report, and we do not express any type of audit conclusion on such report.

In connection with the audit of the individual and consolidated financial statements, our responsibility is to read the Management Report, and, in doing so, consider whether such report is, in material respects, inconsistent with the financial statements or with the knowledge we obtained in the audit or otherwise appears to be materially misstated If, based on the work we have performed, we conclude that there is material misstatement in the Management Report, we are required to report such fact. We have nothing to report in this regard.

Management’s and governance responsibility for the individual and consolidated financial statements

The Company’s Management is responsible for the preparation and fair presentation of the individual and consolidated financial statements in accordance with the accounting practices adopted in Brazil and the International Financial Reporting Standards (IFRS), applicable to real estate development entities in Brazil, registered with the Brazilian Securities and Exchange Commission (CVM), and for the internal controls that it deemed necessary to enable the preparation of financial statements free from material misstatement, whether due to fraud or error.

In the preparation of the individual and consolidated financial statements, Management is responsible for assessing the Company’s ability to continue as going concern, disclosing, when applicable, the matters related to its going concern, and the use of this accounting basis in the preparation of the financial statements, unless Management intends to liquidate the Company and its subsidiaries, or cease their operations, or do not have any realistic alternative to avoid the discontinuance of operations.

Those charged with governance of the Company and its subsidiaries are those with responsibility for supervising the process of preparation of the financial statements.

Independent auditor’s responsibilities for the audit of financial statements

Our objectives are to obtain reasonable assurance about whether the individual and consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report including our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Brazilian and International Standards on Auditing will always detect any existing material misstatements. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could be reasonably expected to influence the economic decisions of users taken on the basis of such financial statements.

As part of the audit in accordance with Brazilian and International Standards on Auditing, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

· Identify and assess risks of material misstatements of the individual and consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide basis for our opinion. The risk of not detecting material misstatement resulting from fraud is higher than for one resulting from error, once fraud may involve collusion, forgery, intentional omissions, misrepresentations and the override of internal control.

· Obtain understanding of internal controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal controls of the Company and its subsidiaries.

· Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

· Conclusion on the appropriateness of management’s use of the going concern basis of accounting, and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubts on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, then we are required to draw attention in our auditor’s report to the related disclosures in the individual and consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidences obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

· Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the individual and consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation. _ Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group to express an opinion on the individual and consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit, and, consequently, the audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in the internal control that we identify during our audit.

We also provide to those charged with governance with a statement that we have complied with relevant ethical requirements, including the applicable independence requirements, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those that were of most significance in the audit of the financial statements of the current year and are therefore the key audit matters. We describe these matters in our auditor’s report, unless the law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Rio de Janeiro, March 16, 2021.

Mário Vieira Lopes

Accountant - CRC- RJ 060.611/O-0

Gafisa S.A.

Statements of financial position – Assets

Years ended December 31, 2020 and 2019

(In thousands of Brazilian reais)

		Company		Consolidated
	Notes	2020	2019	2020	2019

Current assets
Cash and cash equivalents	4.1	469	810	29,038	12,435
Short-term investments	4.2	413,438	401,243	593,082	401,895
Trade accounts receivable	5	340,096	361,649	487,083	445,303
Properties for sale	6	319,516	490,419	1,243,841	786,660
Receivables from related parties	21.1	147,369	23,388	1,102	77,606
Prepaid expenses	-	269	1,227	890	1,860
Non-current assets held for sale	8.1	3,709	3,709	7,014	7,014
Other assets	7	125,498	52,455	180,837	67,395
Total current assets		1,350,364	1,334,900	2,542,887	1,800,168

Non-current assets
Trade accounts receivable	5	182,117	98,368	217,169	112,135
Properties for sale	6	194,974	230,049	305,460	279,207
Receivables from related parties	21.1	44,972	33,416	115,502	33,416
Other assets	7	106,330	107,435	112,739	166,916
		528,393	469,268	750,870	591,674

Investments in ownership interests	9.1	1,199,683	681,645	307,412	138,802
Investment property	9.2	-	-	119,119	-
Property and equipment	10	11,919	12,147	25,181	14,159
Intangible assets	11	4,444	6,552	4,530	7,084
		1,216,046	700,344	456,242	160,045

Total non-current assets		1,744,439	1,169,612	1,207,112	751,719




Total assets		3,094,803	2,504,512	3,749,999	2,551,887

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

Gafisa S.A.

Statements of financial position – Liabilities

Years ended December 31, 2020 and 2019

(Amounts in thousands of Brazilian reais)

		Company		Consolidated
	Notes	2020	2019	2020	2019

Current liabilities
Loans and financing	12	291,270	383,647	332,447	426,124
Debentures	13	120,399	158,179	120,737	158,179
Financial instruments	20	6,125	-	6,125	-
Payables for purchase of properties and advances from customers	17	65,969	89,825	336,029	129,353
Payables for goods and service suppliers	-	93,392	79,106	122,576	95,450
Taxes and contributions	-	57,280	58,556	86,831	69,868
Salaries, payroll charges and profit sharing	-	15,472	11,963	16,983	12,291
Provisions for legal claims and commitments	16	145,636	139,623	147,066	140,735
Obligations assumed on the assignment of receivables	14	10,829	14,755	13,296	20,526
Payables to related parties	21.1	295,261	191,364	98,430	64,384
Other payables	15	124,434	110,189	186,466	135,492
Total current liabilities		1,226,067	1,237,207	1,466,986	1,252,402

Non-current liabilities
Loans and financing	12	109,523	107,029	338,027	107,029
Debentures	13	18,543	39,346	143,588	39,346
Payables for purchase of properties and advances from customers	17	37,175	68,515	79,400	93,075
Deferred income tax and social contribution	19	12,114	12,114	14,649	12,114
Provisions for legal claims and commitments	16	103,003	123,858	103,417	123,878
Obligations assumed on the assignment of receivables	14	9,431	16,463	10,896	19,835
Other payables	15	16,570	6,272	34,648	9,065
Total non-current liabilities		306,359	373,597	724,625	404,342

Equity
Capital	18.1	1,083,249	2,926,280	1,083,249	2,926,280
Treasury shares	18.1	(2,632)	(43,517)	(2,632)	(43,517)
Reserve for capital and granting stock options	-	319,569	337,611	319,569	337,611
Profit reserve	18.2	162,191	-	162,191	-
Retained losses	18.2	-	(2,326,666)	-	(2,326,666)
		1,562,377	893,708	1,562,377	893,708
Non-controlling interests		-	-	(3,989)	1,435
Total equity		1,562,377	893,708	1,558,388	895,143
Total liabilities and equity		3,094,803	2,504,512	3,749,999	2,551,887

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

Gafisa S.A.

Statement of profit or loss

Years ended December 31, 2020 and 2019

(Amounts in thousands of Brazilian reais, except as otherwise stated)

		Company		Consolidated
	Notes	2020	2019	2020	2019

Continuing operations
Net operating revenue	22	412,663	360,589	884,045	400,465

Operating costs
Real estate development and sales	23	(321,733)	(238,714)	(702,824)	(282,684)

Gross profit		90,930	121,875	181,221	117,781

Operating (expenses)/income
Selling expenses	23	(11,461)	(12,020)	(28,992)	(14,889)
General and administrative expenses	23	(78,772)	(46,954)	(81,553)	(54,133)
Income from equity method investments	9	49,886	46,863	(2,339)	(5,003)
Depreciation and amortization	10 and 11	(6,623)	(12,859)	(8,278)	(14,181)
Derecognition of goodwill from remeasurement of investment	-	-	(161,100)	-	(161,100)
Other income/(expenses), net	23	(52,474)	79,483	(56,455)	141,771

Profit (loss) before finance income and costs and income tax and social contribution		(8,514)	15,288	3,604	10,246

Finance costs	24	(93,478)	(82,920)	(101,532)	(76,830)
Finance income	24	25,638	16,631	28,537	17,206

Loss before Income tax and social contribution		(76,354)	(51,001)	(69,391)	(49,378)

Current income tax and social contribution		(167)	-	(7,608)	(1,984)
Deferred income tax and social contribution		-	37,259	-	37,259

Total income tax and social contribution	19.i	(167)	37,259	(7,608)	35,275

Net income (loss) from continuing operations		(76,521)	(13,742)	(76,999)	(14,103)

Net income (loss) from discontinued operations		-	-	-	-

Loss for the year		(76,521)	(13,742)	(76,999)	(14,103)

(-) Loss attributable to:
Non-controlling interests		-	-	(478)	(361)
Owners of the parent		(76,521)	(13,742)	(76,521)	(13,742)

Weighted average number of shares (in thousands)	27	179,882	68,584

Basic loss per thousand shares - In reais	27	(0.425)	(0.200)
From continuing operations		(0.425)	(0.200)
		-

Diluted loss per thousand shares - In reais	27	(0.425)	(0.200)
From continuing operations		(0.425)	(0.200)

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

Gafisa S.A.

Statement of comprehensive income

Years ended December 31, 2020 and 2019

(Amounts in thousands of Brazilian reais, except as otherwise stated)

	Company		Consolidated
	2020	2019	2020	2019

Loss for the year	(76,521)	(13,742)	(76,999)	(14,103)

Total comprehensive income for the year, net of taxes	(76,521)	(13,742)	(76,999)	(14,103)

Attributable to:
Owners of the parent	(76,521)	(13,742)	(76,521)	(13,742)
Non-controlling interests	-	-	(478)	(361)

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

Gafisa S.A.

Statement of changes in equity

Years ended December 31, 2020 and 2019

(Amounts in thousands of Brazilian reais)

			Attributed to Owners of the Parent
	Notes	Capital	Treasury shares	Reserve for capital and granting shares	Profit reserve	Retained losses	Total Company	Non-controlling interests	Total consolidated
Balance as of December 31, 2018		2,521,319	(58,950)	337,351	-	(2,308,403)	491,317	1,874	493,191

Capital increase	18.1	404,961	-	(157)	-	-	404,804	-	404,804
Stock option plan	18.3	-	-	417	-	-	417	-	417
Treasury shares sold	18.1	-	141	-	-	7	148	-	148
Treasury shares cancelled	18.1	-	5,747	-	-	(5,747)	-	-	-
Treasury shares reissued	18.1	-	(20,671)	-	-	20,671	-	-	-
Share repurchase program	18.1	-	30,216	-	-	(19,452)	10,764	-	10,764
Recognition of reserves	-	-	-	-	-	-	-	(78)	(78)
Loss for the year	-	-	-	-	-	(13,742)	(13,742)	(361)	(14,103)

Balances as of December 31, 2019		2,926,280	(43,517)	337,611	-	(2,326,666)	893,708	1,435	895,143

Capital reduction	18.1	(2,585,032)	-		-	2,585,032	-	-	-
Capital increase	18.1	742,001	-	-	-	-	742,001	-	742,001
Expenditures for issuing shares	18.1	-	-	(18,288)	-	-	(18,288)	-	(18,288)
Recognized granted options	18.1	-	-	246	-	-	246	-	246
Stock option plan	18.3	-	-	-	-	-	-	-	-
Treasury shares sold	18.1	-	40,885	-	-	(19,654)	21,232	-	21,232
Recognition of reserves	-	-	-	-	-	-	-	(2)	(2)
Loss for the year	-	-	-	-	-	(76,521)	(76,521)	(478)	(76,999)
Acquisition of non-controlling interests	-	-	-	-	-	-	-	(4,945)	(4,945)
Retained earnings					162,191	(162,191)	-	-	-
Balance as of December 31, 2020		1,083,249	(2,632)	319,569	162,191	-	1,562,377	(3,989)	1,558,388

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

Gafisa S.A.

Statement of cash flows

Years ended December 31, 2020 and 2019

(Amounts in thousands of Brazilian reais)

	Company		Consolidated
	2020	2019	2020	2018
Operating activities
Profit (loss) before Income tax and social contribution	(76,354)	(51,001)	(69,393)	(49,378)
Expenses/(income) not affecting cash and cash equivalents:
Depreciation and amortization (Notes 10 and 11)	6,623	12,859	8,278	14,181
Stock option plan (Note 18.3)	(347)	(2,366)	(347)	(2,366)
Unrealized interest and charges, net	1,664	3,068	1,009	5.448
Warranty provision (Note 15)	9,208	(7,521)	9,208	(7,521)
Provisions for legal claims and commitments (Note 16)	64,302	9,990	56,148	8,300
Provision for profit sharing (Note 25 (iii))	16,194	5,000	16,194	5,000
Allowance for expected credit losses and cancelled contracts (Note 5)	15,822	(61,460)	43,343	(47,257)
Provision for realization of non-financial assets:
Properties and land for sale (Notes 6 and 8)	(68,215)	(37,394)	(69,282)	(36,913)
Provision for penalties due to delay in construction work (Note 15)	(793)	3,659	2,137	5,283
Income from equity method investments (Note 9)	(49,886)	(46,863)	2,340	5,003
Derecognition of goodwill based on inventory surplus (Note 6 and 9)	-	3,000	-	-
Derecognition of goodwill from remeasurement of investment in associate (Note 9)	-	161,100	-	161,100
Acquisition of subsidiary (Note 9)	-	(43,954)	-	-
Goodwill based on inventory surplus and gain from bargain purchase (Note 9)	-	(39,886)	-	-
Assignment of investment shares (Note 9)	-	27,843	-	2,759
	-
Decrease/(increase) in operating assets
Trade accounts receivable	(88,976)	134,996	(206,326)	115,003
Properties for sale and land for sale	274,193	232,986	(414,152)	131,581
Other assets	(185,783)	(36,498)	(151,536)	(98,544)
Prepaid expenses	958	956	970	808

Increase/(decrease) in operating liabilities
Payables for purchase of properties and advances from customers	(55,196)	(75,759)	193,001	(87,003)
Taxes and contributions	(1,277)	12,888	16,963	12,592
Payables for goods and service suppliers	14,095	(48,714)	27,559	(37,750)
Salaries, payroll charges and profit sharing	(12,651)	835	(11,468)	511
Other payables	(71,016)	(87,818)	51,061	(76,443)
Transactions with related parties	26,149	(56,408)	49,006	21,608
Paid taxes	(167)	-	(7,608)	(1,983)
Cash and cash equivalents from (used in) operating activities	(181,453)	13,538	(452,895)	44,019

Investing activities
Acquisition of property and equipment and intangible assets (Notes 10 and 11)	(4,287)	(3,275)	(16,746)	(3,581)
Increase in short-term investments	(500,350)	(360,294)	(564,749)	(387,319)
Redemption of short-term investments	488,155	61,878	373,562	90,280
Investments	(30,000)	-	(30,000)	-
Cash (used in) from investing activities	(46,482)	(301,691)	(237,933)	(300,620)

Financing activities
Increase in loans, financing and debentures	98,036	113,839	625,677	122,639
Payment of loans, financing and debentures - principal	(213,524)	(200,937)	(382,666)	(229,846)
Payment of loans, financing and debentures - interest	(28,517)	(54,033)	(33,774)	(56,976)
Loan transactions with related parties	(125,552)	(11,179)	(12,604)	(11,179)
Treasury shares repurchase program (Note 18.1)	19,251	7,132	19,251	7,132
Capital increase	477,900	404,962	477,900	404,962
Cash and cash equivalents from (used in) financing activities	227,594	259,784	693,784	236,732

Cash acquired from Upcon and Calçada	-	-	13,647	-
Net increase/(decrease) in cash and cash equivalents	(341)	(28,369)	16,603	(19,869)

Cash and cash equivalents
At the beginning of the year	810	29,179	12,435	32,304
At the end of the year	469	810	29,038	12,435

Net increase/(decrease) in cash and cash equivalents	(341)	(28,369)	16,603	(19,869)

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

Gafisa S.A.

Statement of value added

Years ended December 31, 2020 and 2019

(Amounts in thousands of Brazilian reais)

	Company		Consolidated

	2020	2019	2020	2019


Revenues	451,706	394,252	935,013	437,289
Real estate development and sales	467,528	332,792	978,360	390,032
Reversal (recognition) of allowance for doubtful accounts and cancelled contracts	(15,822)	61,460	(43,347)	47,257
Inputs acquired from third parties (including taxes on purchases)	(353,164)	(314,103)	(737,722)	(294,610)
Operating costs - Real estate development and sales	(259,538)	(208,823)	(623,106)	(244,409)
Materials, energy, outsourced labor and other	(93,626)	39,228	(114,616)	94,307
Gain from bargain purchase	-	16,592	-	16,592
Derecognition of goodwill from remeasurement of investment	-	(161,100)	-	(161,100)

Gross value added	98,542	80,149	197,291	142,679

Depreciation and amortization	(6,623)	(12,859)	(8,278)	(14,181)

Net value added produced by the entity	91,919	67,290	189,013	128,498

Value added received on transfer	75,524	63,494	26,198	12,203
Income from equity method investments	49,886	46,863	(2,339)	(5,003)
Finance income	25,638	16,631	28,537	17,206

Total value added to be distributed	167,443	130,784	215,211	140,701

Value added distribution	167,443	130,784	215,211	140,701
Personnel and payroll charges	37,316	26,851	39,652	28,429
Taxes and contributions	47,417	1,647	67,271	7,106
Interest and rents	159,231	116,028	184,809	118,908
Retained earnings attributable to non-controlling interests	-	-	478	361
Incurred losses	(76,521)	(13,742)	(76,999)	(14,103)

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

Gafisa S.A.

Notes to the financial statements--Continued

December 31, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

Operations

Gafisa S.A. ("Gafisa" or "Company") is a publicly-traded company with registered office at Presidente Juscelino Kubitschek, 1.830, conjunto comercial 32, 3^o andar, Bloco 2, in the city and state of São Paulo, Brazil, and began its operations in 1997 with the objectives of: (i) promoting and managing all forms of real estate ventures on its own behalf or for third parties (in the latter case, as construction company or proxy); (ii) selling and purchasing real estate properties; (iii) providing civil construction and civil engineering services; (iv) developing and implementing marketing strategies related to its own and third party real estate ventures; and (v) investing in other companies who share similar objectives.

The Company enters into real estate development projects with third parties through special purpose entities (~~SPE~~SPEs) or through the formation of consortia and condominiums. Subsidiaries significantly share the managerial and operating structures, and corporate, managerial and operating costs with the Company. The SPEs, condominiums and consortia operate solely in the real estate industry and are linked to specific ventures.

The Company has stocks traded on B3 S.A. – Brasil, Bolsa, Balcão (former BM&FBovespa), reporting its information to the Brazilian Securities and Exchange Commission (CVM) and the U.S. Securities and Exchange Commission (SEC). The ADSs were delisted on the NYSE on December 17, 2018, and are currently traded Over the Counter (OTC).

1.1

Coronavirus – COVID-19

In the ~~period ended~~year ~~September 30,~~ 2020, there has not been any significant impact from the outbreak of Coronavirus on the Company’s operations. A Crisis Management Committee has been created that holds daily meetings and total availability for discussing and taking important disease prevention measures.

Awareness campaigns to promote actions that mitigate transmission (frequent hygiene, distancing, meeting through virtual platforms, exclusive service channel, among others) have been created. We have implemented a series of educative and preventative measures targeted at our construction site employees, reducing the staff considered to be in the risk group. The sales activities have focused on digital interactions with prospective customers.

The Company will keep following the implementation of the necessary actions with the Government Authorities, Ministry of Health, and trade associations.

Until the disclosure date of ~~this~~these ~~quarterly information~~financial statements, the Company has not noted a significant increase in customer default and contract cancellation or reduction in sales volume. Moreover, the construction of ventures has been according to the original schedule, considered essential service by the federal government.

Also, due to the Covid-19 pandemic, the Company has postponed the launches planned for the second quarter to the second half of this year.

The Company has opted for deferring the payment of the federal taxes related to March, April and May 2020, collected later on, pursuant to Ordinances 139, 150 and 245. Under the terms of Provisional Measure 927, of March 22, 2020, the Company has also opted for deferring the FGTS deposits by employers, related to March, April and May 2020, with collection in six monthly installments from July 2020. Pursuant to Provisional Measure 936, of March 31, 2020, converted into Law 14,020 of 2020, the Company has reduced salaries by 25%, with proportional reduction in working hours, of a certain group of employees over a 90-day period. Additionally, there has been a voluntary 50% reduction in the ~~salary~~fees of the Board of Director’s members over a 180-day period.

~~Thus far~~Moreover, ~~there is~~ a ~~high~~ volatility in the Company’s stock price traded on the stock exchange has been noted as a result of the global concern for this pandemic and its developments.

Gafisa S.A.

Notes to the financial statements--Continued

December 31, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

Operations--Continued

1.1

Coronavirus – COVID-19

Management understands that at present, the projections used in the analysis of realization of its assets shall not suffer significant changes in the face of this event, and keeps the adopted assumptions.

(A1.2 ~~free~~Gafisa ~~translation of the original report in Portuguese as published in Brazil)~~Propriedades

In the year 2020, the Company created a new business unit, which will comprise real estate assets aimed to generate income, aimed to carry out management services of own and third-party real estate. Gafisa Propriedades (former Upcon S.A) borns with Gafisa’s assets that currently exist and others that are in development (Note 9.2) and with acquisitions of assets in unique locations and/or opportunities for operational turnaround. It is worthy of note the acquisitions made in the first quarter of 2021 of Hotel Fasano Itaim in the city of São Paulo, currently under construction, of Jardim Guadalupe Shopping and São Conrado Fashion Mall (pending closing), both in the city of Rio de Janeiro, and the entry in the venture Cidade Matarazzo in São Paulo, as mentioned below and in Note 31(ii).

~~Notes~~On toJanuary 13, 2021, the ~~quarterly~~Company ~~financial~~completed the ~~information~~acquisition of 32 studio apartments and Hotel Fasano Itaim through the investment funds it controls. The transaction totaled R$ 310,000, with the interest of Gafisa Propriedades reaching 80.37% in Hotel Fasano Itaim and 100% in studio apartments.

~~September~~Also 30in January 2021, ~~2020~~Gafisa Propriedades completed the acquisition of Jardim Guadalupe Shopping and signed the agreement for the acquisition of São Conrado Fashion Mall. The transaction totals R$ 99,300, in two tranches, the first in January 2021, and the other in January 2022. The acquisition is being made through Equity Fund.

~~(Amounts~~On inMarch ~~thousands~~8, of2021, ~~Brazilian~~the ~~Reais~~Company informed that Gafisa Propriedades entered into a contract for entering in Cidade Matarazzo, ~~except~~related asto ~~otherwise~~the ~~stated)~~acquisition of private suites with hotel services.

21.3 ~~Presentation~~Gafisa ~~of quarterly information and summary of significant accounting policies~~Rio

2On November 16, 2020, the Company completed the acquisition of four ventures of Calçada S.A. (Note 9.1.1), ~~Basis~~marking the return of ~~presentation~~Gafisa to Rio de Janeiro’s real estate development market. “Gafisa Rio” becomes the Company’s base for operating in the segment with local office, and ~~preparation~~performing an active role on the acquisition of ~~individual~~new land and ~~consolidated~~launches ~~quarterly~~in ~~information~~progress.

On2. ~~November~~Presentation ~~16, 2020, the Company’s Board~~ of ~~Directors~~financial ~~has~~statements ~~approved the individual~~ and ~~consolidated~~summary ~~quarterly financial information~~ of ~~the Company~~significant ~~and~~accounting ~~authorized its disclosure.~~policies

The individual Quarterly Financial Information (ITR) has been prepared in accordance with the Accounting Pronouncements Committee (CPC) Technical Pronouncement 21 (R1) – Interim Financial Reporting, and the consolidated Quarterly Financial Information (ITR) has been prepared in accordance with such pronouncement and the International Accounting Standard (IAS) 34 – Interim Financial Reporting, applicable to the real estate development entities in Brazil, registered with the Brazilian Securities and Exchange Commission (CVM)2.1. ~~The~~Basis ~~aspects related to the transfer~~ of ~~control~~presentation inand ~~the~~preparation ~~sale~~ of ~~real~~individual ~~estate~~and ~~units~~consolidated ~~follow~~financial the understanding of the company’s management, aligned with that issued by the CVM in the Circular Letter /CVM/SNC/SEP 02/18 on the application of the Technical Pronouncement NBC TG 47 (IFRS 15), consistently with the rules issued by the CVM, applicable to the preparation of the ITR.statements

~~The~~On ~~quarterly~~March ~~financial information has been prepared using the same accounting practices~~16, ~~judgments~~2021, ~~estimates and assumptions adopted in~~ the ~~presentation and~~Company’s ~~preparation~~ Board of ~~the~~Directors ~~financial~~approved ~~statements~~these ~~for~~individual ~~the~~and ~~year~~consolidated ~~ended December 31, 2019. Therefore, the corresponding quarterly~~ financial ~~information~~ ~~shall~~statements beof ~~read together with~~ the ~~financial~~Company ~~statements~~and asauthorized oftheir ~~December 31, 2019~~disclosure.

The individual ~~quarterly~~ financial ~~information~~statements, ofidentified as ~~the~~ “Company”, ishave ~~not~~been ~~considered~~prepared inand ~~compliance~~are ~~with~~being ~~the~~presented ~~International~~according ~~Financial~~to ~~Reporting~~the ~~Standards (IFRS),~~accounting ~~once~~practices itadopted ~~considers~~in Brazil, including the ~~capitalization~~pronouncements ofissued ~~interest~~by onthe ~~qualifying~~Accounting ~~assets~~Pronouncements ofCommittee ~~investees~~(CPC), inapproved by the ~~individual~~Brazilian ~~quarterly~~Securities ~~financial~~and Exchange Commission ~~information~~(CVM) ofand are disclosed together with the ~~Company~~consolidated financial statements.

The ~~quarterly~~consolidated financial statements of ~~information~~the ~~has~~Company have been prepared onand aare ~~going~~being ~~concern~~presented ~~basis.~~according ~~Management~~to ~~periodically~~the ~~assesses~~accounting practices adopted in Brazil, including the ~~Company’s~~pronouncements issued ~~ability~~by the CPC, approved by the Brazilian Securities and Exchange Commission (CVM), and according to ~~continue as~~the ~~going~~International ~~concern~~Financial ~~when~~Reporting Standards ~~preparing~~(IFRS) issued by the ~~quarterly~~International ~~financial~~Accounting ~~information~~Standards Board (IASB).

~~All amounts reported in the accompanying quarterly financial information are in thousands of reais, except as otherwise stated.~~21

~~The~~Gafisa ~~other~~S.A. ~~explanations related~~Notes to ~~this~~the ~~note~~financial ~~were~~statements--ContinuedDecember ~~not~~31, ~~subject~~2020(Amounts ~~to material changes~~ in ~~relation~~thousands toof ~~the~~Brazilian ~~disclosures~~Reais, inexcept ~~Note 2.1 to the individual and consolidated financial statements~~ as ofotherwise ~~December 31, 2019.~~stated)

~~All~~2. ~~material~~Presentation ~~information characteristic~~ of ~~the quarterly~~ financial ~~information,~~statements and ~~only~~summary ~~it,~~of issignificant ~~being~~accounting ~~evidenced, and corresponds to those used by Management in its administration.~~policies—Continued

2.1.1. ~~Consolidated~~Basis ~~quarterly~~of presentation and preparation of individual and consolidated financial ~~information~~statements--Continued

The ~~accounting practices~~individual ~~were~~financial ~~uniformly~~statements ~~adopted~~of inthe Company ~~all~~are ~~subsidiaries~~not ~~included~~considered in compliance with the ~~consolidated~~International ~~quarterly~~Financial ~~financial~~Reporting ~~information~~Standards (IFRS), ~~and~~once they consider the ~~fiscal~~capitalization ~~year~~ of ~~these~~interest ~~companies~~on isqualifying assets of investees in the ~~same~~financial statements of the Company. ~~See~~In ~~further~~view ~~details~~of the fact that there is no difference between the Company’s and the consolidated equity and profit or loss, the Company opted for presenting such individual and consolidated information in ~~Note~~only 9one set.

The ~~other~~consolidated ~~explanations~~financial statements are ~~related~~specifically toin ~~this~~compliance ~~note~~with ~~were~~the ~~not~~International ~~subject~~Financial Reporting Standards (IFRS) applicable to ~~material~~real ~~changes~~estate development entities in ~~relation~~Brazil, toregistered with the ~~disclosures~~CVM. inThe ~~Note~~aspects ~~2.1.1~~related to the ~~individual~~transfer ~~and~~of ~~consolidated financial~~control ~~statements~~in asthe sale of ~~December~~real 31estate units follow the understanding of the Company’s Management, ~~2019~~aligned with that expressed by the CVM in Circular Letter/CVM/SNC/SEP 02/2018 about the application of Technical Pronouncement CPC 47 – Revenue from contracts with customers (IFRS 15).

(AAll ~~free~~material ~~translation~~information characteristic of the ~~original~~financial ~~report~~statements, inand ~~Portuguese~~only asit, ~~published~~is being evidenced, and corresponds to those used by Management in ~~Brazil)~~its administration.

~~Gafisa~~The Spresentation of the individual and consolidated Statement of Value Added (DVA) is required by the Brazilian corporate legislation and the accounting practices adopted in Brazil applicable to publicly-held companies and was prepared according to CVM Resolution 557, of November 12, 2008, which approved the accounting pronouncement CPC 09 – Statement of Value Added.A The IFRS does not require the presentation of this statement. Consequently, under the IFRS, this statement is presented as additional information, without causing harm to the financial statements as a whole.

~~Notes~~The tofinancial statements have been prepared on a going concern basis. Management makes an assessment of the ~~quarterly~~Company’s ability to continue as going concern when preparing the financial ~~information~~statements.

~~September~~The 30individual and consolidated financial statements have been prepared based on historical cost, ~~2020~~except for those measured at fair value, when indicated.

~~(Amounts~~All amounts reported in the accompanying financial statements are in thousands of ~~Brazilian~~ Reais, except as otherwise stated).

2.1.1.

Consolidated financial statements

The consolidated financial statements of the Company include the financial statements of Gafisa and its direct and indirect subsidiaries. The Company controls an entity when it is exposed or is entitled to variable returns arising from its involvement with the entity and has the ability to affect those returns through the power that it exerts over the entity. The existence and the potential effects of voting rights, which are currently exercisable or convertible, are taken into account when evaluating whether the Company controls other entity. The subsidiaries are fully consolidated from the date the control is transferred and the consolidation is discontinued from the date control ceases.

Gafisa S.A.

Notes to the financial statements--Continued

December 31, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

Presentation of financial statements and summary of significant accounting policies--Continued

2.2.

Summary of significant accounting policies

2.1.1.

Consolidated financial statements--Continued

In the Company’s individual financial statements, the financial statements of direct and indirect subsidiaries are recognized using the equity method.

The accounting practices were uniformly adopted in all subsidiaries included in the consolidated financial statements, and the fiscal year of these companies is the same of the Company. See further details in Note 9.

2.1.2.

Functional and presentation currency

The functional and presentation currency of the Company is the Brazilian real, mainly because of its revenues and the incurred costs of operations.

2.2.1.

Accounting judgments, estimates and assumptions

Accounting estimates and judgments are evaluated on an ongoing basis based on historical experience and other factors, including expectations on future events, considered reasonable under the circumstances.

The preparation of the individual and consolidated financial statements of the Company requires Management to make judgments, estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities, as well as the disclosure of contingent liabilities, at the reporting date of financial statements.

Assets and liabilities subject to estimates and assumptions include the provision for impairment of asset, transactions with share-based payment, provision for legal claims, fair value of financial instruments, measurement of the estimated cost of ventures, deferred tax assets, among others.

The main assumptions related to sources of uncertainty over future estimates and other important sources of uncertainty over estimates at the reporting date of the statement of financial position, which may result in different amounts upon settlement are discussed below:

Impairment loss of non-financial assets

An impairment loss exists when the asset’s carrying amount exceeds its recoverable amount, which is the higher of an asset’s fair value less costs to sell and its value in use. The calculation of the fair value less cost to sell is based on available information on sale transactions of similar assets or market prices less additional costs of disposal. The calculation of the value in use is based on the discounted cash flow model.

Cash flows are derived from the budget for the following five years, and do not include uncommitted restructuring activities or future significant investments that will improve the asset basis of the cash-generating unit being tested. The recoverable amount is sensitive to the discount rate used under the discounted cash flow method, the estimated future cash inflows, and to the growth rate used for purposes of extrapolation.

Indefinite lived intangible assets and goodwill attributable to future economic benefit are tested at least annually, and/or when circumstances indicate a decrease in the carrying amount. The main assumptions used for determining the recoverable amount of cash-generating units are detailed in Note 9.

Gafisa S.A.

Notes to the financial statements--Continued

December 31, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

Presentation of financial statements and summary of significant accounting policies--Continued

2.2.

Summary of significant accounting policies--Continued

2.2.1.

Accounting judgments, estimates and assumptions--Continued

b) Share-based payment transactions

The Company measures the cost of transactions with employees to be settled with shares based on the fair value of equity instruments on the grant date. For cash-settled share-based transactions, the liability is required to be remeasured at the end of each reporting period through the settlement date, recognizing in profit or loss possible changes in fair value, which requires revaluation of the estimates used at the end of each reporting period. The estimate of the fair value of share-based payments requires the determination of the most adequate pricing model to grant equity instruments, which depends on the grant terms and conditions.

It also requires the determination of the most adequate data for the pricing model, including the expected option life, volatility and dividend income, and the corresponding assumptions. The assumptions and models used for estimating the fair value of share-based payments are disclosed in Note 18.3.

Provision for legal claims

The Company is party to many lawsuits and administrative proceedings and recognizes a provision for tax, labor and civil claims (Note 16). Provisions are recognized for all claims related to lawsuits which likelihoods of losses are considered probable. Provisions are reviewed and adjusted to take into account the changes in circumstances, such as applicable statutes of limitations, findings of tax inspections, or additional exposures found based on new court issues or decisions.

Contingent liabilities for which losses are considered possible are only disclosed in a note to financial statements, and those for which losses are considered remote are neither accrued nor disclosed.

Contingent assets are recognized only when there are secured guarantees or final and unappealable favorable court decisions. Contingent assets with probable favorable decision are only disclosed in explanatory note.

There are uncertainties inherent in the interpretation of complex tax rules and in the value and timing of future taxable income. In the ordinary course of business, the Company and its subsidiaries are subject to assessments, audits, legal claims and administrative proceedings in civil, tax and labor matters.

Gafisa S.A.

Notes to the financial statements--Continued

December 31, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

Presentation of financial statements and summary of significant accounting policies--Continued

2.2.

Summary of significant accounting policies—Continued

2.2.1.

Accounting judgments, estimates and assumptions– Continued

Allowance for expected credit losses

The Company makes an in-depth analysis of the contracts with customers outstanding for recognizing the allowance for expected credit losses for all sale contracts of real estate units, and the amounts are accrued as contra-entry to the recognition of the respective development revenue, based on data history of its current operations and estimates. This allowance is calculated based on the percentage of completion of the construction work, the methodology used for recognizing profit or loss (Note 2.2.2). Such analysis is individually made by sale contract, in line with CPC 48 – Financial Instruments, item 5.5.17 (c).

The Company annually reviews its assumptions for recognizing the loss allowance, in the face of the review of the history of its current operations and improvement in its estimates.

Warranty provision

The Company and its subsidiaries record a provision to cover expenditures for repairing construction defects covered during the warranty period, based on the estimate that considers the history of incurred expenditures adjusted by the future expectation, which is regularly reviewed, except for the subsidiaries that operate with third-party companies, which are the own guarantors of the provided construction services. The warranty term provided is five years from the delivery of the venture.

Estimated cost of construction

Estimated costs, mainly comprising the incurred and estimated costs for completing the construction works, are regularly reviewed, based on the progress of construction, and any resulting adjustments are recognized in profit or loss of the Company. The effects of such estimate reviews affect profit or loss.

Realization of deferred income tax

The initial recognition and further analysis of the realization of a deferred income tax is carried out when it is probable that a taxable profit will be available in subsequent years to offset the deferred tax asset, based on projections of results, and supported by internal assumptions and future economic scenarios that enable its total or partial use.

Allowance for contract cancellation

The Company recognizes an allowance for contract cancellation when it identifies risks of cash inflows. Contracts are monitored to identify the moment when these conditions are mitigated. While it does not occur, no revenue or cost is recognized in profit or loss, the amounts only being recorded in asset and liability accounts.

The other provisions recognized in the Company are described in Note 2.2.22.

Gafisa S.A.

Notes to the financial statements--Continued

December 31, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

Presentation of financial statements and summary of significant accounting policies—Continued

2.2.

Summary of significant accounting policies—Continued

2.2.2.

Recognition of revenues and expenses

The Company applied CPC 47 – Revenue from Contracts with Customers from January 1, 2018, including the guidance contained in Circular Letter CVM/SNC/SEP 02/2018, of December 12, 2018, which establishes the accounting procedures for recognition, measurement and disclosure of certain types of transactions arising from contracts for purchase and sale of real estate unit not yet completed in real estate development entities.

According to CPC 47, the recognition of revenue from contracts with customers started to have a new regulation, based on transfer of control over promised goods or service, which can be at a point in time or over time, according to the satisfaction or not of the “contractual performance obligations”. Revenue is measured in an amount that reflects the consideration the entity expects to be entitled and is based on a five-step model detailed as follows: 1) identification of contract; 2) identification of performance obligations; 3) determination of transaction price; 4) allocation of transaction price to performance obligations; 5) revenue recognition.

The Company records the accounting effects of contracts only when: (i) the parties approve the contract; (ii) it can identify each party’s rights and the established payment terms; (iii) the contract has commercial substance; and (iv) is probable that it will collect the consideration to which the Company is entitled.

(i)

Real estate development and sales

(a) For the sales of completed units, revenues are recognized when the sale is completed with transfer of control, regardless of the timing of receipt of the contractual value.

(b) For the pre-sale of completed units during construction phase:

The incurred cost (including cost of land, and other directly related expenditure for making inventory) that corresponds to the units sold is included in profit or loss. For the units not yet sold, the incurred cost is included in inventory (Note 2.2.7);

Sales revenues are recognized in profit or loss to the extent construction progresses, once the transfer of control is performed continually, using the percentage-of-completion method for each venture, this percentage being measured in view of the incurred cost in relation to the total estimated cost of the respective ventures;

Sales revenues recognized in excess of actual payments received from customers is recorded as either a current asset or long-term receivables in “Trade accounts receivable”. Any payment received in connection with the sales of units that exceeds the amount of revenues recognized is recorded as “Payables for purchase of land and advances from customers";

Gafisa S.A.

Notes to the financial statements--Continued

December 31, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

Presentation of financial statements and summary of significant accounting policies—Continued

2.2.

Summary of significant accounting policies--Continued

2.2.2.

Recognition of revenues and expenses--Continued

(i)

Real estate development and sales

Interest and inflation-indexation charges on accounts receivable, as well as the adjustment to present value of account receivable, are included in the real estate development and sales when incurred, on a pro rata basis using the accrual basis of accounting;

Financial charges on accounts payable for acquisition of land and those directly associated with the financing of construction are capitalized and recorded in the inventory of properties for sale, and included in the incurred cost of units under construction until their completion, and follow the same recognition criteria as the cost of real estate development for units sold while under construction;

The taxes levied and deferred on the difference between real estate development revenues and the cumulative revenue subject to tax are calculated and recognized when this difference in revenues is recognized;

Other expenses, including advertising and publicity, are recognized in profit or loss when incurred.

(ii)

Construction services

Revenues from real estate services are recognized as services are rendered and tied to the construction management activities for third parties and technical advisory services.

(iii)

Barter transactions

Barter transactions have the objective of receiving land from third parties that are settled with the delivery of real estate units or transfer of portions of the revenue from the sale of real estate units of ventures. The land acquired by the Company and its subsidiaries is determined based on fair value, as a component of inventories, with a corresponding entry to advances from customers in liabilities. Revenues and costs incurred from barter transactions are included in profit or loss over the course of construction period of ventures, as previously described in item (i)(b).

2.2.3.

Financial instruments

Financial instruments are recognized from the date the Company becomes a party to the contractual provisions of financial instruments, and mainly comprise cash and cash equivalents, short-term investments, accounts receivable, loans and financing, suppliers, and other debts.

After initial recognition, financial instruments are measured as described below:

Gafisa S.A.

Notes to the financial statements--Continued

December 31, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

Presentation of financial statements and summary of significant accounting policies--Continued

2.2.

Summary of significant accounting policies--Continued

2.2.3.

Financial instruments--Continued

(i)

Financial instruments at fair value through profit or loss

A financial instrument is classified into fair value through profit or loss if it is held for trading, or designated as such at initial recognition.

Financial instruments are designated at fair value through profit or loss if the Company manages these investments and makes purchase and sale decisions based on their fair value in accordance with the investment strategy and risk management. After initial recognition, related transaction costs are recognized in profit or loss when incurred.

Financial instruments at fair value through profit or loss are measured at fair value, and their fluctuations are recognized in profit or loss.

In the year ended December 31, 2020, the Company entered into derivative financial instruments to mitigate the risk arising from its exposure to index and interest volatility recognized at fair value in profit or loss for the year. In accordance with its treasury policies, the Company had derivative contracts to hedge the interest rate fluctuation, maturing in February 2021.

The Company does not adopt the hedge accounting practice.

(ii)

Financial assets

Financial assets are classified into financial assets at fair value through profit or loss, amortized cost and fair value through comprehensive income. The Company determines the classification of its financial assets at their initial recognition, when it becomes a party to the contractual provisions of the instrument, based on the business model in which the asset is managed and its contractual cash flow characteristics.

Financial assets are initially recognized at fair value, plus, in the case of investments not designated at fair value through profit or loss, the transaction costs that are directly attributable to their acquisition.

The financial assets of the Company include cash and cash equivalents, short-term investments, trade accounts receivable, and derivative financial instruments.

Derecognition (write-off)

A financial asset (or, as the case may be, a portion of a financial asset or portion of a group of similar financial assets) is derecognized when:

The rights to receive cash inflows of an asset expire;

The Company transfers its rights to receive cash inflows of an asset or assume an obligation to fully pay the cash inflows received, without significant delay, to a third party because of a “transfer” agreement; and (a) the Company substantially transfers the risks and rewards of the asset, or (b) the Company does not substantially transfer or retain all risks and rewards related to the asset, but transfers the control over the asset.

Gafisa S.A.

Notes to the financial statements--Continued

December 31, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

Presentation of financial statements and summary of significant accounting policies--Continued

2.2.

Summary of significant accounting policies--Continued

2.2.3.

Financial instruments--Continued

(ii)

Financial assets--Continued

Derecognition (write-off)

When the Company has transferred its rights to receive cash inflows of an asset, or signed an agreement to transfer it, and has not substantially transferred or has retained all risks and rewards related to the asset, an asset is recognized to the extent of the continuous involvement of the Company with the asset. In this case, the Company also recognizes a related liability. The transferred asset and related liability are measured based on the rights and obligations that the Company has maintained.

The continuous involvement by means of a guarantee on the transferred asset is measured at the lower of the original carrying amount of the asset and the highest consideration that may be required from the Company.

Impairment of financial assets

Financial assets, except for those designated at fair value through profit or loss, are tested for indication of impairment at the end of each reporting period. The impairment losses are recognized if, and only if, there is objective evidence of impairment of the financial asset as a result of one or more events that have occurred after its initial recognition, with impact on the estimated future cash flows of such asset.

For financial assets recorded at cost, the impairment loss corresponds to the difference between the asset’s carrying amount and the present value of the estimated future cash flows, discounted at the current return rate of a similar asset. This impairment loss will not be reversed in subsequent periods.

The carrying amount of the financial asset is directly reduced by the impairment loss for all financial assets, except for accounts receivable, in which the carrying amount is reduced by allowance. Subsequent recoveries of previously derecognized amounts are credited to the allowance. The changes in the carrying amount of the allowance are recognized in profit or loss.

(iii)

Financial liabilities

Financial liabilities are classified at initial recognition at amortized cost or measured at fair value through profit or loss.

Financial liabilities at fair value through profit or loss include financial liabilities for trading and financial liabilities designated at initial recognition as fair value through profit or loss.

Loans and financing

Subsequent to initial recognition, loans and financing accruing interest are measured at amortized cost, using the effective interest rate method. Gains and losses are recognized in statement of profit or loss, at the time liabilities are derecognized, as well as during the amortization process using the effective interest rate method.

Gafisa S.A.

Notes to the financial statements--Continued

December 31, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

Presentation of financial statements and summary of significant accounting policies--Continued

2.2.

Summary of significant accounting policies--Continued

2.2.3.

Financial instruments--Continued

(iii)

Financial liabilities--Continued

A debt security convertible into the Company’s common shares is presented separately in the statement of financial position between the liability and equity components. The issuer’s obligation to make payments of interest and principal is a liability that exists while the instrument is not converted and the equity instrument is an embedded option to convert the liability into the issuer’s shares.

Derecognition (write-off)

A financial liability is derecognized when its contractual obligations are discharged, cancelled or expire. When an existing financial liability is substituted for another from the same creditor, under substantially different terms, or when the terms of an existing liability are significantly modified, this substitution or modification is treated as a derecognition of the original liability and recognition of a new liability, the difference in the corresponding carrying amounts being recognized in profit or loss.

2.2.4.

Cash and cash equivalents and short-term investments

Cash and cash equivalents substantially comprise demand deposits and bank certificates of deposit held under resale agreements, denominated in Reais, with high market liquidity and contractual maturities of 90 days or less, and for which there are no penalties or other restrictions for the immediate redemption thereof.

Cash equivalents are classified as financial assets at fair value through profit or loss and are recorded at the original amounts plus income earned, calculated on a “pro rata basis", which are equivalent to their market values, not having any impact to be accounted for in the Company’s equity.

Short-term investments include bank deposit certificates, federal government bonds, exclusive investment funds that are fully consolidated, and collaterals, which are classified at fair value through profit or loss (Note 4.2).

2.2.5.

Trade accounts receivable

These are presented at present and realizable values. The classification between current and non-current is made based on the expected maturity of contract installments, considering current those falling due in one year or less.

The installments due are indexed based on the National Civil Construction Index (INCC) during the period of construction, and based on the General Market Price Index (IGP-M) and interest at 12% p.a., after the delivery of the units.

The adjustment to present value is calculated between the contract signature date and the estimated date to transfer the completed property’ keys to the buyer, using a discount rate represented by the average rate of the financing obtained by the Company, net of inflation, as mentioned in Note 2.2.19.

Considering that financing its customers is an important part of the Company operations, the reversal of the present value adjustment was carried out as contra-entry to the group of real estate development revenue, consistently with interest incurred on the portion of receivables balance related to the period subsequent to the handover of keys.

Gafisa S.A.

Notes to the financial statements--Continued

December 31, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

Presentation of financial statements and summary of significant accounting policies--Continued

2.2.

Summary of significant accounting policies--Continued

2.2.6.

Housing Loan Certificate (CCI)

The Company and its subsidiaries carry out the assignment and/or securitization of receivables related to receivables with collateral of completed projects and those still under construction. This securitization is carried out through the issuance of the Housing Loan Certificate (“Cédula de Crédito Imobiliário” or CCI), which is assigned to financial institutions. When there is no right of recourse, this assignment is recorded as reduction of accounts receivable. When there is right of recourse against the Company, the assigned receivable is maintained in the statement of financial position and the funds from assignment are classified into the account “Obligations assumed on assignment of receivable”, until certificates are settled by customers.

In this situation, the transaction cost is recorded in “finance costs” in the statement of profit or loss for the year in which the transaction is made.

2.2.7.

Properties for sale

The Company and its subsidiaries acquire land for future real estate developments, on payment conditions in current currency or through barter transactions. Land acquired through barter transaction is stated at fair value of the units to be delivered, and the revenue and cost are recognized according to the criteria described in Note 2.2.2 (iii).

Properties are stated at construction cost, and decreased by provision when it exceeds its net realizable value. In the case of real estate under construction, the portion in inventories corresponds to the cost incurred for units that have not yet been sold. The incurred cost comprises construction costs (materials, own or outsourced labor, and other related items), and legal expenses relating to the acquisition of land and projects, land costs, and financial charges on the venture incurred over the construction period.

The classification of land between current and non-current assets is made by Management based on the expected period for launching real estate ventures. Management periodically revises the estimates of real estate ventures launches.

2.2.8.

Prepaid expenses

These are recognized in profit or loss as incurred using the accrual basis of accounting.

2.2.9.

Land available for sale

Land available for sale is measured at the lower of the carrying amount and the fair value less costs to sell, and is classified as held for sale if its carrying amount is to be recovered through a sale transaction of the land. This condition is considered fulfilled only when the sale is highly probable, and the asset is available for immediate sale under its current condition. Management shall commit to sell it within one year of the classification date.

Gafisa S.A.

Notes to the financial statements--Continued

December 31, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

Presentation of financial statements and summary of significant accounting policies--Continued

2.2.

Summary of significant accounting policies--Continued

2.2.10.

Investments in ownership interests

Investments in ownership interest are recorded in the Company balance using the equity method.

When the Company's equity in the losses of investees is equal to or higher than the amount invested, the Company recognizes the residual portion in net capital deficiency since it assumes obligations and makes payments on behalf of these companies. For this purpose, the Company recognizes a provision at an amount considered appropriate to meet the obligations of the investee (Note 9).

2.2.11.

Property and equipment

Items of property and equipment are measured at cost, less accumulated depreciation and/or any accumulated impairment losses, if applicable.

An item of property and equipment is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising from derecognition of an asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is recognized in profit or loss for the year when the asset is derecognized.

Depreciation is calculated based on the straight-line method considering the estimated useful lives of the assets (Note 10).

Expenditures incurred in the construction of sales stands, display apartments and related furnishings are included in property and equipment of the Company and its subsidiaries. Depreciation of these assets commences upon launch of the development and is recorded over the term the stand is in use, and is written-off when it is retired.

Property and equipment are subject to periodic assessments of impairment.

2.2.12.

Intangible assets

(i) Expenditures related to the acquisition and implementation of computer systems and software licenses are recorded at acquisition cost, and amortized on straight-line basis over a period of up to five years, and are subject to periodic assessments of impairment of assets.

(ii) The Company’s investments in subsidiaries include goodwill when the acquisition cost exceeds the market value of net assets of the acquiree.

Impairment testing of goodwill is performed at least annually, or whenever circumstances indicate an impairment loss.

2.2.13.

Payables for purchase of properties and advances from customers

Payables for purchase of properties are recognized at the amounts corresponding to the contractual obligations assumed. Subsequently they are measured at amortized cost, plus, when applicable, interest and charges proportional to the incurred period (“pro rata” basis), net of present value adjustment.

The obligations related to barter transactions of land in exchange for real estate units are stated at fair value of the units to be delivered.

Gafisa S.A.

Notes to the financial statements--Continued

December 31, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

Presentation of financial statements and summary of significant accounting policies--Continued

2.2.

Summary of significant accounting policies--Continued

2.2.14.

Income tax and social contribution on net income

(i) Current income tax and social contribution

Current tax is the expected tax payable or receivable/to be offset in relation to taxable profit for the year.

Income taxes in Brazil comprise income tax (25%) and social contribution on net income (9%), for entities on the standard profit regime, for which the composite statutory rate is 34%. Deferred taxes for these entities are recognized on all temporary differences at the reporting date between the tax bases of assets and liabilities, and their carrying amounts.

As permitted by tax legislation, certain subsidiaries opted for the presumed profit regime, a method under which the taxable profit is calculated as a percentage of gross sales. For these companies, the income tax is calculated on estimated profits at rate of 8% and 12% of gross revenues, respectively, on which the rates of the respective tax and contribution are levied.

As permitted by legislation, the development of certain ventures are subject to the “afetação” regime, based on which the land and its features where a real estate will be developed, as well as other binding assets, rights and obligations, are separated from the developer’s assets, and comprise the “patrimônio de afetação” (detached assets), intended for the completion of the corresponding development, and delivery of real estate units to the respective buyers. In addition, certain subsidiaries made the irrevocable option for the Special Taxation Regime (RET), according to which the income tax and social contribution are calculated at 1.92% on gross revenues (4% also considering PIS and COFINS on revenues).

(ii) Deferred income tax and social contribution

Deferred taxes are recognized in relation to tax losses and temporary differences between the amount of assets and liabilities for accounting purposes and the corresponding amounts used for tax purposes.

They are recognized to the extent that it is probable that future taxable profit will be available to be used for offsetting deferred tax assets, based on profit projections made using internal assumptions, and considering future economic scenarios that make it possible their full or partial use, upon the recognition of a provision for the non-realization of the balance. The recognized amounts are periodically reviewed, and the impacts of realization or settlement are reflected in compliance with tax legislation provisions.

Deferred tax on accumulated tax losses does not have an expiration date, however, they can only be offset against up to 30% of the taxable profit for each year. Companies that opt for the presumed profit tax regime cannot offset tax losses for a period in subsequent years.

Deferred tax assets and liabilities are stated at net amount in the statement of financial position when there is the legal right and intention to offset them when determining the current taxes, related to the same legal entity and the same tax authority.

Presentation of financial statements and summary of significant accounting policies--Continued

2.2.

Summary of significant accounting policies--Continued

Gafisa S.A.

Notes to the financial statements--Continued

December 31, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

2.2.15.

Other current and non-current liabilities

These liabilities are stated at their known or estimated amounts, plus, when applicable, adjustment for charges and inflation-indexed variations through the reporting date of the statement of financial position, which contra-entry is recorded in profit or loss. When applicable, current and non-current liabilities are recorded at present value based on interest rates that reflect the term, currency and risk of each transaction.

2.2.16.

Stock option plan

As approved by its Board of Directors, the Company offers executives and employees share-based compensation plans (stock options), as payments for services received.

The fair value of options is determined on the grant date, considering that it is recognized as expense in profit or loss (as contra-entry to equity), to the extent services are provided by employees and management members.

In an equity-settled transaction, in which the plan is modified, a minimum expense is recognized corresponding to the expense as if the terms had not been changed. An additional expense is recognized for any modification that increases the total fair value of granted options, or that otherwise benefits the employee, measured on the modification date.

In case of cancellation of a stock option plan, this is treated as if it had been granted on the cancellation date, and any unrecognized plan expense is immediately recognized. However, if a new plan substitutes the cancelled plan, and a substitute plan is designated on the grant date, the cancelled plan and the new plan are treated as if they were a modification of the original plan, as previously mentioned.

The Company annually revises its estimates of the amount of options that shall be vested, considering the vesting conditions not related to the market and the conditions based on length of service. The Company recognizes the impact of the revision of the initial estimates, if any, in the statement of profit or loss, as contra-entry to equity.

2.2.17.

Share-based payment - Phantom Shares

The Company has a cash-settled share-based payment plan (phantom shares) under fixed terms and conditions. There is no expectation of the effective negotiation of shares, once there shall be no issue and/or delivery of shares for settling the plan.

According to CPC 10 (R1) – Share-based Payment, these amounts are recorded as a reserve payable, with contra-entry in profit or loss for the year, based on the fair value of the phantom shares granted, and during the vesting period. The fair value of this liability is remeasured and adjusted every reporting period, according to the change in the fair value of the benefit granted and vesting.

Presentation of financial statements and summary of significant accounting policies--Continued

2.2.

Summary of significant accounting policies--Continued

2.2.18.

Other employee benefits

The salaries and benefits granted to the Company’s employees and executives include fixed compensation (salaries, social security contributions (INSS), Government Severance Indemnity

Gafisa S.A.

Notes to the financial statements--Continued

December 31, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

Fund for Employees (FGTS), vacation pay, and 13th monthly salary, among other) and variable compensation such as profit sharing, bonus, and stock option-based payments. These benefits are recorded in profit or loss for the year, under the account “General and administrative expenses”, as they are incurred.

The bonus system operates with individual and corporate targets, structured based on the efficiency of corporate goals, followed by the business goals and, finally, individual goals.

The Company and its subsidiaries do not offer private pension or retirement plans.

2.2.19.

Present value adjustment – assets and liabilities

Assets and liabilities arising from long or short-term transactions are adjusted to present value if significant.

In installment sales of units not completed, real estate development entities present receivables adjusted for inflation, including the installment related to the delivery of units, without accrual of interest, and shall be discounted to present value, as the agreed inflation rates do not include interest.

Borrowing costs and those related to finance the construction of real estate ventures are capitalized. Therefore, the reversal of the present value adjustment of an obligation related to these items is included in the cost of real estate unit sold or in the inventories of properties for sale, as the case may be, until the period of construction of the project is completed.

Accordingly, certain assets and liabilities are adjusted to present value based on discount rates that reflect the best estimate of the time value of money.

The applied discount rate’s underlying economic basis and assumption is the average rate of the financing and loans obtained by the Company, net of the inflationary effect (Notes 5 and 12).

2.2.20.

Debenture and public offering costs

Transaction costs and premiums on issuance of securities are accounted for as a direct reduction in the amount raised by the Company and are amortized over the terms of the instrument and the net balance is classified as reduction in the respective transaction (Note 13).

2.2.21.

Borrowing costs

The borrowing costs directly attributable to ventures during construction phase, and to land during the development of assets for sale are capitalized as part of the cost of that asset during the construction period, since there is borrowing outstanding, which is recognized in profit or loss to the extent units are sold. All other borrowing costs are recorded as expense when incurred. Borrowing costs comprise interest and other related costs incurred, including those for raising finance.

Gafisa S.A.

Notes to the financial statements--Continued

December 31, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

Presentation of financial statements and summary of significant accounting policies--Continued

2.2.

Summary of significant accounting policies--Continued

2.2.21.

Borrowing costs

Charges that are not recognized in profit or loss of subsidiaries are recorded in the financial statements of the Company, in the account investments in non-current assets (Note 9).

2.2.22.

Provisions

(i)

Provision for penalties due to delay in construction work

As contractually provided, the Company has the practice of provisioning the charges payable to eligible customers for projects whose delivery is delayed over 180 days, in line with the respective contractual clause and history of payments.

2.2.23.

Sales taxes

For companies under the taxable profit regime, levied on non-cumulative basis, the PIS and COFINS contribution rates are levied at 1.65% and 7.6%, respectively, on gross revenue and discounting certain credits determined based on incurred costs and expenses. For companies that opt for the presumed profit taxation regime, under the cumulative taxation regime, the PIS and COFINS contribution rates are levied at 0.65% and 3%, respectively, on gross revenue, without discounts of credits in relation to incurred costs and expenses.

2.2.24.

Treasury shares

Own equity instruments that are repurchased (treasury shares) and are recognized at cost and charged to equity. No gain or loss is recognized in the statement of profit or loss upon purchase, sale, issue, or cancellation of the Company’s own equity instruments.

2.2.25.

Interest on equity and dividends

The proposal for distributing dividends and interest on equity made by Management that is in the portion equivalent to the minimum mandatory dividend is recorded as current liabilities in the heading “Dividends payable”, as it is considered a legal obligation provided for in the Articles of Incorporation of the Company.

2.2.26.

Earnings (loss) per share – basic and diluted

Basic earnings (loss) per share are calculated by dividing the net income (loss) available (allocated) to ordinary shareholders by the weighted average number of common shares outstanding over the period.

Diluted earnings per share are calculated in a similar manner, except that the shares outstanding are increased, to include the additional shares that would be outstanding, in case the shares with dilutive potential attributable to stock option had been issued over the respective periods, using the weighted average price of shares.

Presentation of financial statements and summary of significant accounting policies--Continued

2.2.

Summary of significant accounting policies--Continued

2.2.27.

Non-current asset held for sale

Gafisa S.A.

Notes to the financial statements--Continued

December 31, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

The Company classifies a non-current asset as held for sale if its carrying amount is recovered by sale transaction. In such case, the asset or group of assets held for sale shall be available for immediate sale on its current conditions, subject only to the terms that are usual and common for sale of such assets held for sale. With this, the sale shall be highly probable.

For a sale to be highly probable, Management shall be committed to the plan to sell the asset, and shall have initiated an active program to locate a buyer and complete the plan. In addition, the asset held for sale shall also be effectively marketed for sale at a sales price that is reasonable in relation to its current fair value. Also, the sale is expected to be completed within one year of the classification date, unless events beyond the control of the Company change such period.

The asset held for sale is measured at the lower of its carrying amount and the fair value less cost to sell. In case the carrying amount is higher than the fair value, an impairment loss is recognized in statement of profit or loss for the year. Any reversal or gain will only be recorded within the limit of the recognized loss.

2.2.28.

Business combination

The business combination transactions are recognized using the acquisition method. The cost of an acquisition is measured by the sum of the consideration transferred, measured at fair value at the acquisition date, and the amount of any non-controlling interests in the acquired entity. The acquisition directly related costs shall be recognized as expense when incurred.

In the acquisition of a business, Management evaluates the financial assets and liabilities assumed to classify and allocate them according to the contractual terms, the economic circumstances, and the pertinent conditions that exist at the acquisition date.

Goodwill is initially measured as the excess of the consideration transferred over the fair value of the acquired net assets (identifiable assets and liabilities assumed, net). If the consideration is lower than the fair value of acquired net assets, the difference shall be recognized as gain in the statement of profit or loss. Gains from a bargain purchase are immediately recognized in profit or loss.

After initial recognition, goodwill is measured at cost, less any accumulated loss on recoverable amount. For purposes of testing the recoverable amount, the goodwill acquired in a business combination, from the acquisition date, shall be allocated to each of the cash-generating units of the Company that are expected to be benefitted from the combination synergies, regardless of the other assets or liabilities of the acquired entity that are attributed to such units.

In the year ended December 31, 2020, the Company made a business combination transaction, related to the acquisition by Gafisa of the totality of shares issued by Upcon, which became a subsidiary of the Company, and the acquisition of the totality of interest in four real estate ventures of Calçada S.A. in Rio de Janeiro (Note 9.1.1).

Gafisa S.A.

Notes to the financial statements--Continued

December 31, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

Presentation of financial statements and summary of significant accounting policies--Continued

2.2.

Summary of significant accounting policies—Continued

2.2.29.

Investment property

Investment properties are properties held to earn rentals or for capital appreciation, and are initially measured at cost, including transaction costs. After initial recognition, investment properties are measured at fair value. All income from operating lease of assets for purposes of earning rental or capital appreciation are recorded as investment properties and measured using the fair value model. The gains and losses arising from changes in the fair value of investment property are recognized in profit or loss for the period in which they arise.

An investment property is derecognized on disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from its disposal. Any gain or loss arising from the property derecognition (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is recognized in the profit or loss for the period in which it is derecognized.

New standards, changes and interpretation of standards issued and adopted from 2020, and not yet adopted

~~The explanations~~3.1 ~~related~~New ~~to this note were not subject to material~~ standards, changes inand ~~relation~~interpretation toof ~~the~~standards ~~disclosures~~issued ~~in Note 3 to the individual~~ and ~~consolidated~~adopted ~~financial~~from ~~statements as of December 31, 2019.~~2020

~~There~~As isof noJanuary ~~other standard~~1, ~~changes~~2020, the tofollowing standards orare ~~interpretation~~in ~~issued~~effect. ~~and~~The ~~not~~adoption ~~yet~~of ~~adopted~~these ~~that~~standards ~~could,~~and oninterpretations ~~the~~did ~~Management’s~~not ~~opinion,~~ have ~~significant~~ any material impact ~~arising~~on ~~from~~the ~~their~~disclosures or ~~adoption~~amounts ondisclosed ~~its~~in ~~quarterly~~these financial ~~information~~statements.

(i)

Amendments to CPC 15 (R1): Definition of business - clarify that to be considered a business, an acquired set of activities and assets must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs. These amendments did not have impact on the Company’s financial statements.

(ii) Amendments to CPC 38, CPC 40 (R1) and CPC 48: Interest Rate Benchmark Reform, provide exemptions that apply to all hedging relationships directly affected by the interest rate benchmark reform. A hedging relationship is directly affected if the reform gives rise to uncertainties about the timing or the amount of interest rate benchmark-based cash flows of the hedged item or of the hedging instrument. These amendments do not have impact on the financial statements of the Company, once the latter does not have interest rate hedging relationships.

(iii) Amendments to CPC 26 (R1) and CPC 23: Definition of material, provide a new definition of material that states that the “information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity”. The amendments clarify that materiality will depend on the nature or magnitude of information, either individually or in combination with other information, in the context of financial statements. A misstated information is material if it could be reasonably expected to influence decisions taken by primary users. These amendments did not have any impact on the financial statements, nor are expected to have any future impact on the Company.

Gafisa S.A.

Notes to the financial statements--Continued

December 31, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

New standards, changes and interpretation of standards issued and adopted from 2020, and not yet adopted--Continued

3.1 New standards, changes and interpretation of standards issued and adopted from 2020--Continued

(iv) Revision of CPC 00 (R2): Conceptual Framework for Financial Reporting, provides updated definitions and criteria for recognition of assets and liabilities, and clarifies some important concepts. These amendments did not have impact on the Company’s financial statements.

(v) Amendments to CPC 06 (R2): Covid-19-related Rent Concessions, provides lessees with concessions in the application of the CPC 06 (R2) provisions about the modification of lease contract, by recognizing the concessions occurring as direct consequence of the Covid-19 pandemic. As a practical expedient, a lessee may elect not to assess whether a Covid-related rent concession granted by the lessor is a lease modification. This amendment did not have any impact on the Company’s financial statements.

3.1 New standards, changes and interpretation of standards issued and not yet adopted

A series of new standards are coming into effect for years beginning after January 1, 2021. The Company has not adopted these standards in the preparation of the accompanying Financial Statements. The following amended standards and interpretations shall not have a significant impact on the Company’s consolidated financial statements.

(i)

Onerous contracts - costs of fulfilling a contract (amendments to CPC 25/IAS 37)

(ii)

Interest rate benchmark reform – Phase 2 (amendments to CPC 48/IFRS 9, CPC 38/IAS39, CPC 40/IFRS 7, CPC 11/IFRS 4 and CPC 06/IFRS 16),

(iii)

Property, plant and equipment: Proceeds before intended use (amendments to CPC 27/IAS 16)

(iv)

Reference to the Conceptual Framework (amendments to CPC 15 / IFRS 3)

(v)

Classification of Liabilities as Current or Non-current (amendments to CPC 26/IAS 1)

(vi)

IFRS 17 Insurance Contracts.

There is no other standard, changes to standards or interpretation issued and not yet adopted that could, on the Management’s opinion, have significant impact arising from their adoption on its financial statements, however, studies on them are in progress.

Gafisa S.A.

Notes to the financial statements--Continued

December 31, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

Cash and cash equivalents and short-term investments

4.1.

Cash and cash equivalents

	Company		Consolidated
	09/30/2020	12/31/2019	09/30/2020	12/31/2019
	2020	2019	2020	2019
Cash and banks	43	810	6,705	12,435
Cash and banks (a)	469	810	29,038	12,435
Total cash and cash equivalents (Note 20.i.d, 20.ii.a and 20.iii)	43469	810	629,~~705~~038	12,435

(a) These are held to meet short-term cash commitments and not for investment or other purposes. They comprise cash balance with immediate liquidity and insignificant risk of change in value.

4.2.

Short-term investments

	Company		Consolidated
	09/30/2020	12/31/2019	09/30/2020	12/31/2019
	2020	2019	2020	2019
Fixed-income funds (a)	~~135~~136,~~445~~058	125,961	~~135~~144,~~444~~437	125,962
Government bonds (LFT) (a)	903,~~598~~078	231,725	903,~~597~~078	231,725
Real estate investment fund (a)	~~221~~151,~~451~~553	-	~~221~~151,~~451~~553	-
Bank certificates of deposit (b)	143,788	10,460	147,378	10,523
Securities purchased under resale agreements	-	125	-	125
Restricted credits (c)	27,743	32,972	29,085	33,560
Bank certificates of deposit (b)	99,489	10,460	118,466	10,523
Securities purchased under resale agreements	-	125	-	125
Restricted credits (c)	23,260	32,972	175,548	33,560
Total short-term investments (Note 20.i.d, 20.ii.a and 20.iii)	~~619~~413,~~025~~438	401,243	~~623~~593,~~955~~082	401,895

(a) Exclusive and open-end funds whose purpose is to invest in financial assets and/or fixed-income investment modalities that follow the fluctuations in interest rates in the interbank deposit market (CDI), by investing its funds mostly in investment fund shares and/or investment funds comprising investment fund shares. The Company entered into a swap contract to mitigate the risk of its exposure to index and interest rate volatility (Note 20(i)(b)).

(b) As of ~~September 30 and~~ December 31, ~~2019~~2020, Certificates of Bank Deposit (CDBs) include interest earned ~~through~~ranging ~~the~~from ~~statement~~93.5% ofto ~~financial~~103.5% ~~position’s reporting date, ranging from~~ (93.5% to 110% in 2019) of Interbank Deposit Certificates (CDI).

(c) Restricted credits are represented by funds pledged toand asset separated from transactions with financial institutions.

(A free translation of the original report in Portuguese as published in Brazil)

Gafisa S.A.

Notes to the quarterly financial information

September 30, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

Trade accounts receivable

	Company		Consolidated
	09/30/2020	12/31/2019	09/30/2020	12/31/2019
	2020	2019	2020	2019
Real estate development and sales	~~434~~518,~~567~~847	492,205	~~687~~749,~~561~~065	605,067
(-) Allowance for expected credit losses	(11,346)	(12,065)	(14,032)	(16,265)
(-) Allowance for expected and incurred credit losses	(10,421)	(12,065)	(16,365)	(16,265)
( - ) Allowance for cancelled contracts (a)	(4344,~~547~~947)	(27,481)	(7380,~~912~~727)	(37,485)
( - ) Present value adjustment	(~~2,220~~329)	(7,133)	(57,~~375~~038)	(8,518)
Services and construction and other receivables	3659,~~591~~063	14,491	3659,~~748~~317	14,639
Total trade accounts receivable (Note 20.i.d and 20.ii.a)	~~414~~522,~~045~~213	460,017	~~630~~704,~~990~~252	557,~~438~~43B8
Current	340,~~903~~096	361,649	~~544~~487,~~147~~083	445,303
Non-current	73182,~~142~~117	98,368	86217,~~843~~169	112,135

(a) The increase in the allowance for cancelled contracts was mainly caused by the re-evaluation of the current contracts in relation to the uncertainty over cash inflows due to the impact of the Covid-19 pandemic on the Company’s portfolio of receivables.

Gafisa S.A.

Notes to the financial statements--Continued

December 31, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

Trade accounts receivable--Continued

The current and non-current portions have the following maturities:

	Company		Consolidated
Maturity	~~09/30/~~2020	~~12/31/~~2019	~~09/30/~~2020	~~12/31/~~2019
Past due:
Past due: (a)
Up to 90 days (a)	75,846	19,785	77,378	32,306
Up to 90 days	19,601	19,785	42,726	32,306
From 91 to 180 days	4437,~~609~~096	8,294	4638,~~647~~081	11,424
Over 180 days	98116,~~247~~290	90,216	~~137~~157,~~154~~484	115,619
	218,702	118,295	261,179	159,349
	172,987	118,295	238,291	159,349
Falling due:
2020	~~28,272~~-	286,456	~~84,669~~-	343,~~972~~971
2021	~~155~~221,~~615~~301	83,082	~~298~~350,~~155~~078	97,213
2022	~~17.804~~47,186	5,276	2872,~~876~~280	5,368
2023	1336,~~444~~049	3,180	1346,~~627~~790	3,247
2024 onwards	37,321	10,407	37,803	10,557
2024	26,899	2,791	27,269	2,830
	252,456	388,401	463,130	460,357
2025 onwards	73,488	7,616	73,674	7,728
( - ) Present value adjustment	(2,220)	(7,133)	(5,375)	(8,518)
	404,923	388,401	570,091	460,357
( - ) Allowance for expected credit losses and cancelled contracts	(54,893)	(39,546)	(87,944)	(53,750)
( - ) Present value adjustment	(329)	(7,133)	(7,038)	(8,518)
	414,045	460,017	630,990	557,438
(-) Allowance for expected and incurred credit losses and cancelled contracts	(55,368)	(39,546)	(97,092)	(53,750)
	522,213	460,017	704,252	557,438

(a) The increase in the period is due to the relevance of the delivery of ~~six~~ten ventures in the ~~period~~year ended ~~September~~December 3031, 2020. As reflection of the Covid-19 pandemic, the time required by banks and registry offices to process information for transferring the ownership of delivered units increased.

~~During~~The balance of accounts receivable from units sold and not yet completed is not fully reflected in the ~~period ended~~financial ~~September~~statements. ~~30,~~Its ~~2020,~~recording is limited to the ~~changes~~portion inof the ~~allowances~~recognized ~~for~~revenues ~~expected~~net ~~credit~~of ~~losses~~the ~~and~~amounts ~~cancelled~~already ~~contracts~~received, ~~are~~according ~~summarized~~to asthe ~~follows:~~accounting practice mentioned in Note 2.2.2(i)(b).

	Company	Consolidated
Balance as of December 31, 2019	(39,546)	(53,750)
Additions (Note 22)	(24,445)	(69,893)
Write-offs / Reversals (Note 22)	9,098	35,742
Acquired balance Upcon	-	(43)
Balance as of September 30, 2020	(54,893)	(87,944)

As of December 31, 2020, the amount received from customers in excess of the recognized revenues totaled R$1,471 (R$1,540 in 2019) in the Company’s statements, and R$151,172 (R$14,197 in 2019) in the consolidated statements, and are classified in the heading “Payables for purchase of properties and advances from customers" (Note 17). The change in the year is due to the acquisition of the totality of shares in Upcon S.A. and assets of Calçada S.A. (Note 9.2).

~~The~~Accounts ~~other~~receivable ~~explanations~~from ~~related~~completed toreal ~~this~~estate ~~note~~units ~~were~~financed ~~not~~by ~~subject~~the toCompany ~~material~~are ~~changes~~ in ~~relation~~general toadjusted by the ~~disclosures~~IGP-M variation plus annual interest of 12%, with revenue being recorded in ~~Note~~profit 5or toloss in the ~~financial statements~~account as“Revenue offrom ~~December~~real 31estate development and sale, ~~2019~~barter transactions and construction services".

(AThe balances ~~free~~of ~~translation~~allowance offor expected credit losses are considered sufficient by the ~~original~~Company’s ~~report~~management into ~~Portuguese~~cover asthe ~~published~~estimate inof future ~~Brazil)~~losses on realization of the accounts receivable.

~~Gafisa~~During ~~S.A.~~the years ended December 31, 2020 and 2019, the changes in the allowances for expected credit losses and cancelled contracts are summarized as follows:

~~Notes to the quarterly financial information~~41

~~September~~Gafisa 30S.A. Notes to the financial statements--ContinuedDecember 31, 2020(Amounts in thousands of Brazilian Reais, except as otherwise stated)

~~(Amounts~~5. inTrade ~~thousands~~accounts ~~of Brazilian Reais, except as otherwise stated)~~receivable--Continued


	Company	Consolidated

Balance as of December 31, 2018	(101,006)	(101,006)
Additions (Note 22)	(10,630)	(26,150)
Write-offs / Reversals (Note 22)	72,090	73,406
Balance as of December 31, 2019	(39,546)	(53,750)
Acquired balance Upcon/ assets of Calçada	-	(3,568)
Additions (Note 22)	(26,198)	(76,905)
Write-offs / Reversals (Note 22)	10,376	37,131
Balance as of December 31, 2020	(55,368)	(97,092)

The present value adjustment recognized in revenue from real estate development for the year ended December 31, 2020 totaled R$6,804 (R$10,764 in 2019), in the Company’s statements, and R$1,479 (R$10,873 in 2019) in the consolidated statements.

Receivables from units not yet completed were measured at present value using a discount rate determined according to the criteria described in Note 2.2.2. The discount rate applied by the Company and its subsidiaries was 2.21% for the year 2020 (6.64% in 2019), net of Civil Construction National Index (INCC).

The Company entered into the following Housing Loan Certificate (CCI) transactions, which are aimed at the assignment by the assignor to the assignee of a portfolio comprising select residential and business real estate receivables performed and to be performed arising out of Gafisa and its subsidiaries. The assigned portfolios, discounted to present value, are recorded under the heading “obligations assumed on the assignment of receivables”.

				Transaction balance Company (Note 14)		Transaction balance Consolidated (Note 14)
	Transaction date	Assigned portfolio	Portfolio discounted to present value	2020	2019	2020	2019
(i)	Jun 27, 2011	203,915	171,694	23	322	23	412
(ii)	Nov 14, 2012	181,981	149,025	-	-	85	2,586
(iii)	Dec 27, 2012	72,021	61,647	972	1,683	972	1,683
(iv)	Nov 29, 2013	24,149	19,564	173	242	480	1,170
(v)	Nov 25, 2014	15,200	12,434	371	833	486	1,203
(vi)	Dec 3, 2015	32,192	24,469	1,232	2,342	3,148	5,300
(vii)	Dec 19, 2016	27,954	27,334	3,287	5,845	3,682	6,429
(viii)	May 9, 2016	17,827	17,504	2,250	3,385	3,062	4,625
(ix)	Aug 19, 2016 (a)	15,418	14,943	1,752	2,351	1,774	2,392
(x)	Dec 21, 2016	21,102	19,532	4,964	5,961	5,067	6,106
(xi)	Mar 29, 2017	23,748	22,993	5,236	8,254	5,413	8,455
				20,260	31,218	24,192	40,361

(a)

The consolidated balance of the transaction as of December 31, 2020 and 2019 (Note 14) does not include the jointly-controlled entities, which are accounted for using the equity method, according to CPCs 18(R2) and 19(R2).

Transaction (i) was entered into with Banco BTG Pactual S.A. (Note 14).

Transactions (ii), (iii), (iv) and (v) were entered into with Polo Multisetorial Fundo de Investimento em Direitos Creditórios Não Padronizados (Note 14).

Transactions (vi), (vii), (viii), (ix), (x) and (xi) were entered into with Polo Capital Securitizadora S.A. (Note 14).

In the transactions above, the Company and its subsidiaries are jointly responsible until the time of the transfer of the collateral to the securitization company.

For the items (i) to (iii) and (viii) to (xiii) above, the Company was engaged to perform, among other duties, the management of the receipt of receivables, the assignment’s underlying assets, collection of defaulting customers, among other, according to the criteria of each investor, being paid for these services.

Gafisa S.A.

Notes to the financial statements--Continued

December 31, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

Properties for sale

	Company		Consolidated
	09/30/2020	12/31/2019	09/30/2020	12/31/2019
	2020	2019	2020	2019
Land	~~388~~384,~~370~~324	423,074	~~933~~607,~~588~~564	573,715
( - ) Provision for loss on realization of land	(~~122~~111,~~621~~307)	(122,621)	(~~122~~111,~~621~~307)	(122,621)
( - ) Present value adjustment	(~~1,830~~641)	(5,200)	(~~1,830~~676)	(5,198)
Properties under construction (Note 29)	~~162~~148,~~075~~865	190,383	~~386~~880,~~489~~471	355,980
Completed units	~~240~~63,~~238~~246	264,381	~~304~~107,~~234~~882	283,991
( - ) Provision for loss on realization of properties under construction and completed units	(638,~~193~~726)	(65,627)	(649,~~542~~131)	(67,099)
Allowance for cancelled contracts	4138,~~592~~729	36,078	7374,~~811~~498	47,099
Total properties for sale	~~644~~514,~~631~~490	720,468	1,~~509~~549,~~129~~301	1,065,867
Current	~~528~~319,~~437~~516	490,419	1,~~317~~243,~~144~~841	786,660
Non-current	~~116,~~194,974	230,049	~~191~~305,~~985~~460	279,207

InDuring the years ~~period~~ ended ~~September~~ 30December 31, 2020 and 2019, the ~~change~~changes in the provision for loss on realization ~~of properties for sale~~ is summarized ~~below~~as follows:

	Company	Consolidated
Balance as of December 31, 2018	(163,078)	(164,603)
Reclassification from land available for sale (Note 8.1)	(52,196)	(52,196)
Write-off (a)	27,026	27,079
Balance as of December 31, 2019	(188,248)	(189,720)
Write-offs (a)	2,434	2,557
Additions	(3,025)	(3,482)
Balance as of September 30, 2020	(185,814)	(187,163)
Write-offs (a)	59,926	61,450
Reversal (b)	11,314	11,314
Balance as of December 31, 2020	(120,033)	(120,438)

(a) The amount of write-offs refers to the respective units sold and project revision in the ~~period~~year 2020.

(b)

Amount related to the reversal of land impairment in view of project revision and viability.

The amount of properties for sale offered as guarantee for financial liabilities is described in Note 12.

~~The~~As ~~other~~disclosed ~~explanations related~~in toNote ~~this~~12, ~~note~~the ~~were~~balance ~~not~~of capitalized ~~subject~~financial tocharges ~~material~~as ~~changes~~of inDecember ~~relation~~31, to2020 ~~the~~was ~~disclosures~~R$146,582 (R$193,798 in ~~Note~~2019) 6in to the ~~financial~~Company’s statements as, ofand ~~December 31~~R$173,228 (R$206,935 in 2019) in the consolidated statements.

Other assets

	Company		Consolidated
	09/30/2020	12/31/2019	09/30/2020	12/31/2019
	2020	2019	2020	2019
Advances to suppliers	1711,~~574~~091	20,142	2015,~~226~~217	20,702
Recoverable taxes (IRRF, PIS, COFINS, among other)	8,320	11,733	14,163	17,285
Advance - Fasano transaction (Notes 1.2 and 31(ii))	62,000	-	62,000	-
Arbitration decision amount	5,777	5,777	66,391	66,391
Recoverable taxes (IRRF, PIS, COFINS, among other)	13,739	11,733	18,833	17,285
Credits with the controlling shareholders of Calçada (a)	20,000	-	20,000	-
Judicial deposits (Note 16.a)	110,314	122,238	120,407	129,933
Judicial deposits (Note 16.a)	132,249	122,238	140,661	129,933
Arbitration decision amount (a)	5,777	5,777	66,391	66,391
Other assets	-	-	9,630	-
Credit for land acquisition (b)	25,570	-	-	-
Total other assets	183,920	159,890	271,071	234,311
Other	3,337	-	10,728	-
Current	65,760	52,455	146,125	67,395
Total other assets	231,828	159,890	293,576	234,311
Non-current	118,160	107,435	124,946	166,916
Current	125,498	52,455	180,837	67,395
Non-current	106,330	107,435	112,739	166,916

(a) Amount related to the ~~advance~~outcome ~~made~~of the arbitration decision related to ~~the acquisition~~venture ofconstruction ~~four~~contracts ~~ventures~~with ofpartners, ~~Calçada~~which ~~Empreendimentos~~was ~~Imobiliários.~~awarded ~~The~~on ~~transaction~~November ~~was~~12, ~~approved~~2019 by the ~~Administrative Council~~Arbitration Court, managed by the Center for ~~Economic~~Arbitration ~~Defense~~and ~~(CADE)~~Mediation onof ~~November~~the 3Chamber ~~(Note~~of 31Commerce ~~(ii))~~Brazil – Canada.

(b)

Amount related to credits for acquisition of land located in Rio de Janeiro, carried out by subsidiary.

Gafisa S.A.

Notes to the financial statements--Continued

December 31, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

Non-current assets held for sale

8.1 Land available for sale

The Company, in line with its strategic direction, opted to sell land not included in the business plan in effect. Likewise, it devised a ~~specific~~ specific plan for the sale of such land. ~~The~~Their carrying amount ~~of such land~~, adjusted to market value when applicable, after the test for impairment, is as follows:

	Company			Consolidated
	Cost	Provision for impairment	Net balance	Cost	Provision for impairment	Net balance
Balance as of December 31, 2018	146,182	(71,340)	74,842	149,488	(71,340)	78,148
Reclassification from properties for sale (Note 6)	-	-	-	-	-	-
Reclassification to properties for sale (Note 6)	(83,579)	52,196	(31,383)	(83,579)	52,196	(31,383)
Additions (Note 23)	-	-	-	-	-	-
Reversal / write-offs (a)	(50,117)	10,367	(39,750)	(50,117)	10,366	(39,751)
Balance as of December 31, 2019	12,486	(8,777)	3,709	15,792	(8,778)	7,014
Additions	-	-	-	-	-	-
Additions (Note 23)	-	-	-	-	-	-
Reversal / write-offs	-	-	-	-	-	-
Balance as of September 30, 2020	12,486	(8,777)	3,709	15,792	(8,778)	7,014
Balance as of December 31, 2020	12,486	(8,777)	3,709	15,792	(8,778)	7,014

(Aa) ~~free~~The ~~translation~~amount of write-offs over the ~~original~~period ~~report~~mainly refers to the cancelled land sales contract in ~~Portuguese~~January as2019, ~~published~~located in ~~Brazil)~~the city of Rio de Janeiro – RJ.

~~Gafisa~~The Ssale of assets held for sale is considered highly probable, and the Company keeps an active program to locate buyers.A Additionally, Management has made the necessary efforts to successfully dispose such assets for amounts not below the recorded ones. Changes in economic conditions or transactions currently in discussion may result in the recognition of losses in addition to those already recognized.

~~Notes to the quarterly financial information~~44

~~September~~Gafisa 30S.A. Notes to the financial statements--ContinuedDecember 31, 2020(Amounts in thousands of Brazilian Reais, except as otherwise stated)

~~(Amounts in thousands of Brazilian Reais, except as otherwise stated)~~9. Investments

9. 1 Investments in ownership interests

(i)

Information on subsidiaries, associates and jointly-controlled investees

										Company				Consolidated
		Interest in capital - %		Total assets	Total liabilities	Equity and advance for future capital increase		Profit (loss) for the ~~period~~year		Investments		Income from equity method investments		Investments		Income from equity method investments
Subsidiaries:		~~09/30/~~2020	~~12/31/~~2019	~~09/30/~~2020	~~09/30/~~2020	~~09/30/~~2020	~~12/31/~~2019	~~09/30/~~2020	~~09/30/~~2019	~~09/30/~~2020	~~12/31/~~2019	~~09/30/~~2020	~~09/30/~~2019	~~09/30/~~2020	~~12/31/~~2019	~~09/30/~~2020	~~09/30/~~2019
UPCON S.A.	(f)	100%	100%	465,763	342,931	122,832	-	-	-	122,832	-	-	-	-	-	-	-
Gafisa Rio	-	100%	100%	228,826	140,758	88,068	-	50,288	-	88,068	-	50,288	-	-	-	-	-
Novum Directiones SPE Ltda.	-	100%	100%	177,253	98,294	78,959	44,120	(1,404)	-	78,959	44,120	(1,404)	-	-	-	-	-
Gafisa Propriedades S.A.	-	100%	100%	312,752	230,708	82,044	-	(6,021)	-	82,045	-	(6,022)	-	-	-	-	-
Gafisa SPE-104 Emp. Imob. Ltda.	-	100%	100%	93,723	25,130	68,594	55,422	12,951	4,670	68,594	55,422	13,172	4,670	-	-	-	-
Novum Directiones SPE Ltda.	-	100%	100%	207,585	130,311	77,274	44,120	(3,089)	(6,078)	77,274	44,120	(3,089)	(6,078)	-	-	-	-
Gafisa SPE-89 Emp. Imob. Ltda.	-	100%	100%	109,157	58,143	51,014	51,015	(1)	(13)	51,014	51,015	(1)	(13)	-	-	-	-
Gafisa SPE 80 Emp. Imob. Ltda.	-	100%	100%	82,479	6,062	76,417	-	315	-	76,417	-	315	-	-	-	-	-
Gafisa SPE-81 Emp. Imob. Ltda.	-	100%	100%	48,799	824	47,975	47,964	11	1,819	47,975	47,964	11	1,819	-	-	-	-
Gafisa SPE-104 Emp. Imob. Ltda.	-	100%	100%	91,079	24,296	66,783	55,422	11,140	5,454	66,783	55,422	11,361	5,454	-	-	-	-
Upcon SPE 29 Emp. Imob. Ltda	-	100%	100%	53,776	38	53,738	-	-	-	53,738	-	-	-	-	-	-	-
Gafisa SPE-89 Emp. Imob. Ltda.	-	100%	100%	51,991	979	51,012	51,015	(3)	(15)	51,012	51,015	(3)	(15)	-	-	-	-
Gafisa SPE-81 Emp. Imob. Ltda.	-	100%	100%	48,914	825	48,089	47,964	125	47,963	48,089	47,964	125	47,963	-	-	-	-
Upcon Spe 28 Emp. Imob. Ltda	-	100%	100%	44,047	26	44,021	-	-	-	44,021	-	-	-	-	-	-	-
GDU Loteamentos Ltda.	-	100%	100%	43,206	19	43,187	43,206	(19)	-	43,187	43,206	(19)	-	-	-	-	-
Gafisa SPE- 132 Emp. Imob. Ltda.	-	100%	100%	39,179	8,985	30,193	30,193	-	-	30,193	30,193	-	-	-	-	-	-
Nuove Direzioni SPE Ltda	-	100%	100%	54,793	17,509	37,283	30,887	6,396	-	37,283	30,887	6,396	-	-	-	-	-
Nuove Direzioni SPE Ltda.	-	100%	100%	41,364	11,202	30,162	30,887	(725)	-	30,162	30,887	(725)	-	-	-	-	-
Gafisa SPE- 132 Emp. Imob. Ltda.	-	100%	100%	39,199	9,006	30,193	30,193	-	(1)	30,193	30,193	-	(1)	-	-	-	-
Gafisa SPE-137 Emp. Imob. Ltda.	-	100%	100%	25,608	42	25,567	25,567	-	-	25,567	25,567	-	-	-	-	-	-
Edsp 88 Participações S.A.	-	100%	100%	29,~~474~~332	12,682	16,~~792~~650	16,724	68(74)	~~175~~212	16,~~792~~650	16,724	68(74)	~~175~~212	-	-	-	-
Gafisa SPE-111 Emp. Imob. Ltda.	-	100%	100%	18,~~139~~614	32,~~293~~944	1415,~~846~~670	14,848	~~(2)~~822	~~508~~14,847	1415,~~846~~670	14,848	~~(2)~~822	~~508~~14,847	-	-	-	-
Manhattan Square Em. Im.Res.02 SPE Ltd.	-	100%	100%	15,960	1,238	14,722	14,722	(1)	(809)	14,722	14,722	(1)	(809)	-	-	-	-
Gafisa SPE 33 Emp. Imob. Ltda.	-	100%	100%	196,861	182,424	14,437	13,227	1,209	(103)	14,437	13,227	1,209	(103)	-	-	-	-
Gafisa SPE 33 Emp. Imob. Ltda.	-	100%	100%	196,161	182,632	13,530	13,227	302	138	13,530	13,227	302	138	-	-	-	-
Maraville Gafsa SPE Emp. Imob. Ltda.	-	100%	100%	15,222	1,711	13,511	13,257	254	1,172	13,511	13,257	254	1,172	-	-	-	-
Maraville Gafisa SPE Emp. Imob. Ltda.	-	100%	100%	14,553	1,050	13,503	13,257	246	1,504	13,503	13,257	246	1,504	-	-	-	-
Gafisa SPE-134 Emp. Imob. Ltda.	-	100%	100%	13,748	2,232	11,516	11,630	(114)	(1,073)	11,516	11,630	(114)	(1,073)	-	-	-	-
Gafisa SPE-134 Emp. Imob. Ltda.	-	100%	100%	13,481	1,815	11,667	11,630	36	(129)	11,667	11,630	36	(129)	-	-	-	-
Upcon SPE 7 Emp. Imob. Ltda	-	100%	100%	14,091	4,759	9,331	-	-	-	9,331	-	-	-	-	-	-	-
Gafisa SPE-78 Emp. Imob. Ltda.		100%	100%	8,685	2,730	5,955	6,479	(525)	1,215	5,955	6,479	(525)	1,215	-	-	-	-
Gafisa SPE 78 Emp. Imob. Ltda.	-	100%	100%	9,123	2,717	6,406	6,479	(73)	1,415	6,406	6,479	(73)	1,415	-	-	-	-
OCPC01 adjustment - capitalized interest	(a)			-	-	-	-	-	-	20,307	21,923	-	(2)	-	-	-	-
OCPC01 adjustment - capitalized interest (d)	(a)	100%	100%	-	-	-	-	-	-	16,481	21,923	-	-	-	-	-	-
Other (*)				60,671	27,125	33,543	112,957	(2,468)	(5,719)	32,927	71,998	(7,621)	(4,929)	-	-	-	-
Other		100%	100%	356,111	318,912	37,200	127,682	4,483	(10,676)	36,601	86,720	4,490	(11,027)	-	-	-	-
Subtotal Subsidiaries				1,~~401~~937,~~176~~357	~~778~~1,~~135~~088,960	~~623~~848,~~041~~397	532,~~220~~221	865,~~469~~639	353,~~359~~117	~~642~~864,~~732~~280	513,182	365,~~537~~866	452,~~147~~766	-	-	-	-
Jointly-controlled investees:
Gafisa e Ivo Rizzo SPE-47 Emp. Imob. Ltda.	-	80%	80%	34,~~093~~263	1,~~746~~952	32,~~346~~310	32,347	1(36)	6	25,~~878~~849	25,877	-(28)	5	25,~~878~~849	25,877	-(28)	5
Sitio Jatiuca Emp. Imob. SPE Ltda	-	50%	50%	3536,~~210~~190	43,~~658~~844	3032,~~552~~345	29,636	~~916~~2,709	~~905~~223	1516,~~276~~173	14,818	~~458~~1,355	~~452~~111	1516,~~276~~173	14,818	~~458~~1,355	~~452~~111
Varandas Grand Park Emp. Imob. SPE Ltda.	(b)	50%	50%	34,004	5,238	28,767	28,773	165	1,526	14,383	14,387	(3)	1,309	14,383	14,387	(3)	1,309
Varandas Grand Park Emp. Imob. Spe Ltda.	(b)	50%	50%	34,093	5,034	29,059	28,773	457	2,742	14,529	14,387	143	1,917	14,529	14,387	143	1,917
Parque Arvores Empr. Imob. Ltda.	(b)	50%	50%	2829,~~876~~533	3,~~157~~622	25,~~719~~911	24,616	1,~~524~~716	23,~~411~~116	12,~~860~~956	12,308	~~552~~648	1,~~054~~407	12,~~860~~956	12,308	~~552~~648	1,~~054~~407
Atins Emp. Imob. Ltda.	-	50%	50%	25,289	1,333	23,955	20,813	3,142	1,823	11,978	10,406	1,571	911	11,978	10,406	1,571	911
Atins Emp. Imob.s Ltda.		50%	50%	19,952	659	19,293	20,813	4,859	3,084	9,646	10,406	2,430	1,542	9,646	10,406	2,430	1,542
Gafisa SPE-116 Emp. Imob. Ltda.	-	50%	50%	2524,~~133~~278	43,~~273~~414	20,~~860~~863	25,111	(~~912~~909)	2,~~749~~574	10,~~430~~432	12,555	(~~456~~454)	1,~~375~~287	10,~~430~~432	12,555	(~~456~~454)	1,~~375~~287
FIT 13 SPE Emp. Imob. Ltda.	-	50%	50%	21,~~501~~423	1,~~798~~699	19,~~703~~724	19,779	(7655)	~~103~~72	9,~~851~~862	9,889	(3827)	5136	9,~~851~~862	9,889	(3827)	5136
Performance Gafisa Gen. Severiano Ltda	-	50%	50%	11,658	28	11,631	11,631	-	166	5,815	5,816	-	83	5,815	5,816	-	83
Performance Gafisa General Severiano Ltda		50%	50%	11,658	33	11,625	11,631	(6)	(69)	5,813	5,816	(3)	(35)	5,813	5,816	(3)	(35)
Other (*)	-			6869,~~628~~334	2827,~~474~~769	4041,~~153~~567	38,751	~~374~~(6,802)	(31,~~220~~080)	2021,~~386~~532	19,850	(3,~~527~~462)	(16,~~832~~895)	32,~~544~~711	29,122	(3,~~577~~494)	(16,~~587~~650)
Subtotal jointly-controlled investees				~~284~~280,~~392~~724	5048,~~705~~026	~~233~~232,~~686~~697	231,457	51,~~134~~933	610,~~469~~668	126,~~857~~792	125,906	~~(1,443)~~602	~~3,408~~(625)	~~139~~137,~~015~~971	135,178	~~(1,493)~~570	~~3,653~~(380)
Associates:
Alphaville Urbanismo S.A.	-	-	-	-	-	-	(1,479,312)	-	(603,985)	-	-	-	-	-	-	-	-
Alphaville Urbanismo S.A		0%	0%	-	-	-	(1,479,312)	-	(603,985)	-	-	-	-	-	-	-	-
Citta Ville SPE Emp. Imob. Ltda.	-	50%	50%	5,512	1,135	4,377	4,272	105	1,622	2,188	2,136	53	811	2,188	2,136	53	811
Città Ville SPE Emp. Imob. Ltda.		50%	50%	4,912	534	4,378	4,272	107	1,571	2,189	2,136	53	785	2,189	2,136	53	785
Gafisa Tiner Campo Belo I Emp. Imob. Ltda	-	45%	45%	1,142	25	1,117	1,189	(72)	(6)	503	535	(32)	(1)	503	535	(32)	(3)
Gafisa Tiner Campo Belo I Emp. Imob. Ltda.		45%	45%	1,153	25	1,128	1,189	(60)	55	508	535	(27)	25	508	535	(27)	25
Other (*)	-			(1)	-	(1)	(1)	1	-	-	-	(1)	-	728	953	-	-
Other				-	-	-	(2)	(1)	-	-	-	-	4	716	953	-	5
Indirect jointly-controlled investees Gafisa				6,~~653~~065	~~1,160~~559	5,~~493~~506	(1,473,~~852~~853)	3446	(602,~~369~~359)	2,~~691~~697	2,671	2026	~~810~~814	3,~~419~~413	3,624	2126	~~808~~815
Goodwill arising from acquisition of subsidiary (c)	-									130,063	-	-	-	130,063	-	-	-
Goodwill arising from acquisition of subsidiaries (Note 9.1.1)	(c)									166,028	-	-	-	166,028	-	-	-
Goodwill based on inventory surplus (d)	-									39,886	39,886	-	-	-	-	-	-
Goodwill based on inventory surplus	(d)									39,886	39,886	-	-	-	-	-	-
Total investments										~~942~~1,~~229~~199,683	681,645	266,~~114~~494	852,~~365~~955	~~272~~307,~~497~~412	138,802	~~(1,472)~~596	~~4,461~~435
(*) Includes companies with investment balances below R$ 5,000.

~~(A free translation of the original report in Portuguese as published in Brazil)~~45

Gafisa S.A. Notes to the financial statements--ContinuedDecember 31, 2020(Amounts in thousands of Brazilian Reais, except as otherwise stated)

~~Notes to the quarterly financial information~~9. Investments--Continued

~~September~~9.1 ~~30,~~Investments ~~2020~~in ownership interests--Continued

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

9. Investments in ownership interests--Continued

(i)

Information on subsidiaries, associates and jointly-controlled investees--Continued

										~~Company~~	Company			~~Consolidated~~	Consolidated
	Interest in capital - %		~~Total assets~~	Total ~~liabilities~~assets	~~Equity~~Total ~~and advance for future capital increase~~liabilities	Equity and advance for future capital increase		~~Profit (loss) for the period~~	Profit (loss) for the year	~~Investments~~	Investments	~~Income from equity method investments~~	Income from equity method investments	~~Investments~~	Investments	~~Income from equity method investments~~	Income from equity method investments
Provision for net capital deficiency (e):	~~09/30/~~2020	~~12/31/~~2019	~~09/30/2020~~	~~09/30/~~2020	~~09/30/~~2020	~~12/31/2019~~2020	2019	~~09/30/2020~~	~~09/30/2019~~2020	~~09/30/2020~~2019	~~12/31/2019~~2020	~~09/30/2020~~2019	~~09/30/2019~~2020	~~09/30/2020~~2019	~~12/31/2019~~2020	~~09/30/2020~~2019	~~09/30/2019~~2020	2019
Manhattan Square Emp. Imob. Res. 01 SPE Ltda	50%	50%	42,160	55,638	(13,477)	(6,791)		(6,686)	-	(8,086)	(4,075)	(4,011)	-	(8,086)	(4,075)	(4,011)	-
Gafisa SPE 45 Ltda	100%	100%		4,091	10,773	(6,682)	-		(6,986)	-	(6,682)	-	(6,986)	-	-	-	-	-
Gafisa SPE 113 Em. Imob. Ltda.	60%	60%	2,542	15,384	(12,841)	(6,569)		(58)	(230)	(6,421)	(3,284)	(3,133)	(1,130)	(6,421)	(3,284)	(3,133)	(1,130)
Manhattan Square Emp. Im. Resid. 01 SPE Ltda	50%	50%		2,499	15,431	(12,932)	(6,569)		(149)	(313)	(6,467)	(3,284)	(3,178)	(1,130)	(6,467)	(3,284)	(3,178)	(1,130)
Manhattan Square Emp.Imob. Com. 01 SPE Ltda	50%	50%	3,254	9,800	(6,546)	(6,558)		(4)	(250)	(3,273)	(3,279)	4	(2,133)	(3,273)	(3,279)	4	(2,133)
Manhattan Square Emp. Im. Com. 01 SPE Ltda	50%	50%		3,342	9,888	(6,546)	(6,558)		(4)	(294)	(3,273)	(3,279)	4	(2,175)	(3,273)	(3,279)	4	(2,175)
Other (*)			424,021	435,533	(11,513)	(4,483)		(8,306)	(182)	(11,183)	(4,156)	1,366	(114)	(328)	(325)	4,229	891
Upcon SPE26 Emp. Imob. Ltda	100%	100%		103,644	106,780	(3,135)	-		-	-	(3,135)	-	-	-	-	-	-	-
Total provision for net capital deficiency			471,977	516,355	(44,377)	(24,401)	-	(15,054)	(662)	(28,963)	(14,794)	(5,774)	(3,377)	(18,108)	(10,963)	(2,911)	(2,372)
Gafisa Spe- 130 Emp. Imobiliários Ltda.	100%	100%		8,594	10,072	(1,477)	(1,137)		(340)	(1,138)	(1,477)	(1,137)	(340)	(1,138)	-	-	-	-
Total income from equity method investments												(3,660)	4,986			(4,383)	2,089
Delfim Moreira RJ	100%	100%		111,660	112,550	(890)	-		(890)	-	(890)	-	(890)	-	-	-	-	-
Gafisa SPE-133 Emp. Imob. Ltda.	100%	100%		394,838	395,080	(241)	-		(328)	-	(241)	-	(328)	-	-	-	-	-
Other				232,687	235,722	(18,491)	(10,138)		(10,158)	(12,457)	632	(7,094)	(4,890)	(1,649)	3,010	(4,400)	239	(2,133)
Total provision for net capital deficiency				861,355	896,296	(50,394)	(24,402)	-	(18,855)	(14,202)	(21,533)	(14,794)	(16,608)	(6,092)	(6,730)	(10,963)	(2,935)	(5,438)
Total income from equity method investments													49,886	46,863			(2,339)	(5,003)

(*) Includes companies with investment balances below (R$ 5,000).

(a)

Financial charges of the Company not recorded in the profit or loss of subsidiaries, as required by paragraph 6 of OCPC01.

(b) The Company recorded expense of R$386 in Income from equity method investments for the ~~period~~year ended ~~September~~December 3031, 2020 related to the recognition, by jointly-controlled entities, of prior year adjustments, in accordance with the ICPC09 (R2) - Individual, Separate and Consolidated Financial Statements and the Equity Method of Accounting.

(c) Recognition of goodwill ~~arising~~on ~~from the~~ acquisition of the totality of UPCON S.A.’s shares and Calçada S.A.’s four ventures in the amounts of R$130,643 and R$35,385, respectively. The Company commissioned a study from a company specialized in determining Purchase Price Allocation (PPA) for allocation of goodwill over a period of up to one year, according to CPC 15(R1) - Business Combinations.

(d) Amount related to the goodwill arising from purchase of the control of SPE GDU Loteamentos Ltda. granted on December 27, 2019 by Alphavile Urbanismo for the urban development business ~~with acquired assets~~.

(e)

The provision for net capital deficiency is recorded in the line item “Other payables” (Note 15).

(f) In view of the completion of the transaction of acquisition of the totality of Upcon S.A.’s shares on September 22, 2020 (Note 9.1), the Company did not recorded any income from equity method investments for the eight remaining days of the month.

(ii)

Information on significant investees

	Significant investee:			Other investees:
	Other investees:
	Alphaville Urbanismo S.A.			Subsidiaries		Jointly-controlled investees		Associates
	Subsidiaries		Jointly-controlled investees		Associates
	09/30/2020	12/31/2019		09/30/2020	12/31/2019	09/30/2020	12/31/2019	09/30/2020	12/31/2019
	2020	2019	2020	2019	2020	2019
Cash and cash equivalents	-139,172	-4,611	12,174	537,~~900~~267	41,~~611~~615	202,~~266~~087	~~37,267~~	~~1,605~~	~~2,087~~
Current assets	-1,432,951	-636,457	239,756	~~979~~265,~~389~~219	~~636~~5,~~457~~883	~~251~~6,~~345~~702	~~265,219~~	~~6,472~~	~~6,702~~
Non-current assets	-504,394	-409,773	40,968	~~421~~30,~~787~~084	~~409,773~~182	~~33,047~~84	~~30,084~~	~~181~~	84
Current liabilities	-936,767	-550,908	28,661	~~605~~42,~~272~~975	~~550,908~~486	311,~~902~~159	~~42,975~~	~~1,090~~	~~1,159~~
Non-current liabilities	-152,169	-6,307	19,366	~~173~~20,~~433~~871	~~6,307~~73	~~18,804~~167	~~20,871~~	70	~~167~~
	09/30/2020	09/30/2019		09/30/2020	09/30/2019	09/30/2020	09/30/2019	09/30/2020	09/30/2019
Net revenue	354,506	57,038	40,601	63,551	30	264
Net revenue	-	27,107		32,913	54,505	27,497	53,271	(65)	228
Operating costs	(256,353)	(37,503)	(18,545)	(45,014)	-	-
Operating costs	-	-		(17,393)	(34,056)	(14,823)	(38,467)	-	(26)
Depreciation and amortization	(885)	(1,294)	(5)	(21)	-	-
Depreciation and amortization	-	-		(3)	(1,114)	(5)	(21)	-	-
Finance income (cost)	(10,544)	(657)	(273)	670	12	312
Finance income (expenses)	-	-		(3,194)	(793)	253	(2,374)	8	282
Income tax and social contribution	(2,338)	(1,603)	(1,182)	(1,883)	(14)	(94)
Income tax and social contribution	-	-		(495)	(1,204)	(850)	(1,472)	(12)	(87)
Profit or loss from continuing operations	65,639	53,117	10,594	10,668	46	1,626
Profit or loss from continued operations	-	(603,985)		8,469	3,359	5,134	6,469	33	(602,362)

(iii)

Change in investments

	Company	Consolidated
Balance as of December 31, 2019	681,645	138,802
Income from equity method investments	266,~~114~~494	~~(1,472)~~596
Capital contribution (reduction)	(1,~~150~~111)	5392
Recognition of goodwill (9.(i).(c))	130,063	130,063
Dividends receivable	(5,005)	(5,005)
Investment UPCON	122,832	-
Goodwill arising from acquisition of subsidiaries (Note 9.1.1)	166,028	166,028
Other investments	6,725	5,051
Acquisition of subsidiaries (Note 9.1.1)	160,032	-
Balance as of September 30, 2020	942,229	272,497
Acquisition of subsidiaries of Upcon (a)	76,074	-
Merger of subsidiaries (b)	55,757	-
Other investments	(231)	6,899
Balance as of December 31, 2020	1,199,683	307,412

~~The other explanations~~(a) Amount related to ~~this~~the ~~note~~acquisition ~~were~~of ~~not~~shares ~~subject to material changes~~ in ~~relation~~SPEs tocontrolled ~~the~~by ~~disclosures~~Upcon inS.A., ~~Note~~which 9is tofully ~~the~~controlled ~~financial~~by ~~statements as~~Gafisa ~~of December 31, 2019~~S.A.

(Ab) Amount ~~free~~related ~~translation~~to of the ~~original~~assignment ~~report~~of shares in ~~Portuguese~~SPEs ascontrolled ~~published~~by inGafisa ~~Brazil)~~S.A., to SPE 80 Emp. Imob. Ltda, which is fully controlled by the Company.

~~Gafisa S.A.~~ 46

Gafisa S.A. Notes to the ~~quarterly~~ financial ~~information~~statements--ContinuedDecember 31, 2020(Amounts in thousands of Brazilian Reais, except as otherwise stated)

~~September 30, 2020~~9. Investments--Continued

~~(Amounts~~9.1 Investments in ~~thousands~~ownership ~~of Brazilian Reais, except as otherwise stated)~~interests--Continued

9.1.1 ~~Investments in ownership interests--Continued~~Business combination

~~9.1~~(i) Acquisition ~~Business~~Upcon ~~combination~~S.A.

~~(i)~~On ~~Acquisition~~September ~~UPCON~~23, 2020, the Company disclosed the completion of the acquisition of the totality of Upcon S.A.’s shares, settled with the Company’s shares. Such transaction gave rise to a goodwill in the amount of R$130,063, for which the Company commissioned a study from a company specialized in determining Purchase Price Allocation (PPA) for allocation of goodwill over a period of up to one year, according to CPC 15(R1) - Business Combinations.

On September 23, 2020, the Company disclosed the completion of the acquisition of the totality of Upcon S.A.’s shares, settled with the Company’s shares. Such transaction gave rise to a goodwill in the amount of R$130,063, for which the Company commissioned a study from a company specialized in determining the Purchase Price Allocation (PPA) for allocation of goodwill over a period of up to one year, according to CPC 15(R1) - Business Combinations.

The following table shows the determination of the acquisition cost, pursuant to CVM Resolution 665/11:

Acquisition cost	252,895
Acquired net assets	122,~~832~~252
Goodwill to be allocated	130,063
Goodwill not allocated	130,643

(ii) Acquisition of Calçada S.A.’s ventures

On November 16, 2020, the Company disclosed the completion of the acquisition of the totality of four ventures from Calçada S.A., settled through shares of the Company and financial disbursement. Such transaction gave rise to a total net goodwill in the amount of R$35,385, for which the Company commissioned a study from a company specialized in determining Purchase Price Allocation (PPA) for allocation of goodwill over a period of up to one year, according to CPC 15(R1) - Business Combinations.

The following table shows the determination of the acquisition cost, pursuant to CVM Resolution 665/11:


Acquisition cost	73,165
Acquired net assets	37,780
Goodwill not allocated	35,385

Gafisa S.A.

Notes to the financial statements--Continued

December 31, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

9. Investments--Continued

9.2

Investment property

As mentioned in Note 1, in the year of 2020 the Company created a new business unit, Gafisa Propriedades, for carrying out the management of real estate that are completed and of third parties. In this context, as of December 31, 2020 the investment properties of this new business unit comprise commercial properties of ventures located in the state of São Paulo and Rio de Janeiro and acquired of Gafisa S.A. and subsidiaries. These properties were initially recognized at cost and will be measured at fair value in subsequent years.

The Company does not have restriction to the capacity of realization of its investment property or for repairs, maintenance or improvements.

	Consolidated
Balance as of December 31, 2019	-
Additions of commercial properties:
Rio de Janeiro	73,229
São Paulo	45,890
Balance as of December 31, 2020	119,119

10.

Property and equipment

		Company		~~Company~~							~~Consolidated~~
Description	~~12/31/~~2019	Additions	~~Additions~~Write-offs	100% depreciated items	~~Write-offs~~2020	~~100% depreciated items~~	~~09/30/2020~~2019	~~12/31/2019~~	Additions	~~Additions~~Write-offs	Additions Upcon	~~Write-offs~~100% depreciated items	~~Addition UPCON~~2020	~~100% depreciated items~~	~~09/30/2020~~
Cost
Hardware	8,922	-	-	(4,918)	-4,004	~~(4,918)~~	49,~~004~~111	~~9,111~~	-	-	-	-(4,946)	-4,165	~~(4,946)~~	~~4,165~~
Leasehold improvements and installations	785	2,655	-(1,389)	-	-2,051	-	~~785~~771	~~771~~	2,655	-(1,389)	9	-	102,046	-	~~781~~
Furniture and fixtures	637	-	-	-	-637	-	~~637~~741	~~741~~	-	-	122	-	~~123~~863	-	~~864~~
Machinery and equipment	2,561	-	-	(2,528)	-33	-	2,561	~~2,561~~	-	-	22	-(2,528)	2255	-	~~2,583~~
Right-of-use assets	3,235	1,039	-617	-	~~(217)~~4,891	-	3,~~018~~235	~~3,235~~	1,039	-617	726	~~(217)~~-	~~726~~5,617	-	~~3,744~~
Sales stands	5,794	779	~~194~~(2,188)	-	(24,~~188)~~385	-	311,~~800~~638	~~11,638~~	8,666	~~6,328~~(3.018)	7,904	~~(2,222)~~-	325,~~069~~190	-	~~18,813~~
	21,934	4,473	~~194~~(2,960)	(7,446)	(216,~~405)~~001	~~(4,918)~~	1428,~~805~~057	~~28,057~~	12,360	6(3,~~328~~790)	8,783	(27,~~439~~474)	337,~~950~~936	~~(4,946)~~	~~30,950~~
Accumulated depreciation
Hardware	(3,826)	(2,333)	~~(1,915)~~-	4,918	-(1,241)	~~4,918~~	(~~823~~3,905)	~~(3,905)~~	(2,372)	~~(1,948)~~-	-	-4,946	-(1,331)	~~4,946~~	~~(907)~~
Leasehold improvements and installations	(782)	(399)	~~(266)~~1,984	-	-803	-	(~~1,048~~737)	~~(737)~~	(406)	~~(269)~~1,984	(7)	-	~~(7)~~834	-	~~(1,013)~~
Furniture and fixtures	(511)	(64)	~~(48)~~-	-	-(575)	-	(~~559~~604)	~~(604)~~	(66)	~~(49)~~-	(78)	-	(75748)	-	~~(728)~~
Machinery and equipment	(2,315)	(240)	~~(192)~~-	2,528	-(27)	-	(2,~~507~~315)	~~(2,315)~~	(240)	~~(192)~~-	(8)	-2,528	(735)	-	~~(2,514)~~
Right-of-use assets	(1,711)	(689)	~~(710)~~-	-	-(2,400)	-	(21,~~421~~711)	~~(1,711)~~	(688)	~~(710)~~-	(714)	-	(~~715~~3,113)	-	~~(3,136)~~
Sales stands	(642)	-	-	-	-(642)	-	(~~642~~4,626)	~~(4,626)~~	(1,386)	~~(394)~~826	(3,176)	29-	(18,~~726~~362)	-	~~(6,717)~~
	(9,787)	(3,725)	(31,~~131)~~984	7,446	-(4,082)	~~4,918~~	(813,~~000~~898)	~~(13,898)~~	(5,158)	(32,~~562)~~810	(3,983)	297,474	(212,~~530~~755)	~~4,946~~	~~(15,015)~~
Total property and equipment	12,147	748	(~~2,937~~976)	-	(211,~~405)~~919	-	614,~~805~~159	~~14,159~~	7,202	~~2,766~~(980)	4,800	~~(2,410)~~-	125,~~420~~181	-	~~15,935~~

The ~~other~~following ~~explanations~~useful ~~related to~~lives ~~this~~and ~~note~~rates ~~were~~are ~~not~~used ~~subject~~for ~~to material changes in relation to the disclosures in Note 10 to the financial statements as of December~~calculating ~~31, 2019.~~depreciation:

	Useful life	Average annual depreciation rate - %
Leasehold improvements and installations	4 years	25
Furniture and fixtures	10 years	10
Hardware	5 years	20
Machinery and equipment	10 years	10
Sales stands	1 year	100

The residual value, useful life, and depreciation methods are reviewed at the end of each year; no change having been made in relation to the information for the prior year.

Property and equipment are subject to periodic assessments of impairment. As of December 31, 2020 and 2019 there was no indication of impairment of property and equipment.

Gafisa S.A.

Notes to the financial statements--Continued

December 31, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

11.

Intangible assets

			Company	~~Company~~
	12/31/2019								09/30/2020
	2019					2020
	Balance	Additions	Write-offs	Amortizations	~~Write-offs~~100% amortized items	Balance	~~Amortizations~~	~~100% amortized items~~	~~Balance~~
Software – Cost	15,953	-42	(2,162)	-	-(3,514)	10,319	-	~~(1,807)~~	~~14,146~~
Software – Depreciation	(9,401)	-	1,405	(2,804)	-3,514	(7,286)	~~(2,215)~~	~~1,807~~	~~(9,809)~~
Other	-	~~700~~1,505	-	(94)	-	1,411	~~(27)~~	-	~~673~~
Total intangible assets	6,552	~~700~~1,547	(757)	(2,898)	-	4,444	~~(2,242)~~	-	~~5,010~~

		Consolidated		~~Consolidated~~
	12/31/2019								09/30/2020
	2019					2020
	Balance	Additions	Write-offs	Amortizations	~~Write-offs~~100% amortized items	Balance	~~Amortizations~~	~~100% amortized items~~	~~Balance~~
Software – Cost	17,353	-42	(3,190)	-	-(3,514)	10,691	-	~~(1,807)~~	~~15,546~~
Software – Depreciation	(10,269)	-	2,209	(3,026)	-3,514	(7,572)	~~(2,395)~~	~~1,807~~	~~(10,857)~~
Other	-	~~700~~1,505	-	(94)	-	1,411	~~(27)~~	-	~~673~~
Total intangible assets	7,084	~~700~~1,547	(981)	(3,120)	-	4,530	~~(2,422)~~	-	~~5,362~~

~~The~~Other ~~other~~intangible ~~explanations related~~assets tocomprise ~~this~~expenditures on ~~note~~the ~~were~~acquisition ~~not~~and ~~subject~~implementation toof ~~material~~information ~~changes~~systems inand ~~relation~~software tolicenses, ~~the~~amortized ~~disclosures~~over ~~in Note 10 to~~ the ~~financial~~average ~~statements as~~term of ~~December~~five ~~31,~~years ~~2019~~(20% per year).

(AAs ~~free~~of ~~translation~~December 31, 2020, the test of recovery of the ~~original~~intangible ~~report~~assets of the Company resulted in ~~Portuguese~~the asneed ~~published~~for recognition of a provision for loss on realization (impairment) in ~~Brazil~~the amount of R$981 (R$536 in 2019), related to the Company’s software.

Gafisa S.A.

Notes to the quarterly financial information

September 30, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

12.

Loans and financing

			Company		Consolidated
Type	Maturity	Annual interest rate	~~09/30/~~2020	~~12/31/~~2019	~~09/30/~~2020	~~12/31/~~2019
National Housing System - SFH /SFI (i) (ii)	May 2019 to July 2025	7.00% to 14.20% + TR 13.66% and 143% of CDI	365,146	421,382	385,772	456,247
National Housing System - SFH /SFI (i)	May 2019 to July 2025	7.00% to 14.20% + TR 13.66% and 143% of CDI	341,495	421,382	389,258	456,247
Certificate of Bank Credit (CCB) (ii)	March 2021 to ~~April~~October ~~2022~~2025	Fixed 16.77%~~/12.68%/6.00%~~ 23.5%/ 3.70%/ 4.25%/ 6%+CDI	5048,~~561~~954	55,022	53257,~~739~~123	55,022
Other transactions			410,~~945~~344	14,272	6324,~~177~~093	21,884
Total loans and financing (Note 20.i.d, 20.ii.a and 20.iii)			~~420~~400,~~652~~793	490,676	~~502~~670,~~688~~474	533,153
Total current			~~300~~291,~~534~~270	383,647	~~349~~332,~~348~~447	426,124
Non-current			~~120~~109,~~118~~523	107,029	~~153~~338,~~340~~027	107,029

(i) On ~~March~~The ~~26,~~SFH ~~2020,~~financing ~~the~~is ~~Company~~used ~~completed~~for ~~the~~covering ~~renegotiation of~~costs ~~its~~related ~~financial~~to ~~liabilities with~~ the ~~financial~~development ~~institution~~of ~~Banco~~real doestate ~~Brasil~~ventures ~~S.A.~~of in the ~~total~~Company ~~amount~~and ofits ~~R$138~~subsidiaries,~~355.~~ ~~This~~and ~~transaction enabled~~backed ~~the~~by ~~Company~~secured toguarantee ~~extend~~by the ~~final~~first-grade ~~maturity~~mortgage of ~~such~~real ~~debts~~estate ~~until~~ventures ~~June 2025~~ and ~~reduce~~ the ~~finance~~fiduciary ~~cost.~~assignment ~~Also~~or inpledge ~~the scope~~ of ~~the~~ ~~renegotiation, the Company started to work on the time required to sell the units in inventory tied to this transaction~~receivables.

(ii) In the ~~period~~year ended ~~September~~December 3031, 2020, the Company made payments totaling R$~~250~~293,~~469~~029, of which R$~~235~~274,~~151~~237 related to principal and R$1518,~~318~~793 related to the interest payable. Additionally, during the year, the Company entered into CCB transactions in the total amount of R$195,000, with final maturity between October 2023 and November 2025.

Rates

CDI - Interbank Deposit Certificates;

TR - Referential Rate

Gafisa S.A.

Notes to the financial statements--Continued

December 31, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

12. Loans and financing--Continued

The current and non-current portions have the following maturities:

	Company		Consolidated	~~Consolidated~~
Maturity	~~09/30/~~2020	~~12/31/~~2019	2020	~~09/30/2020~~2019	~~12/31/2019~~
2020	~~182,748~~-	383,647	-	~~217~~426,~~189~~124	~~426,124~~
2021	~~122~~291,~~406~~270	103,269	332,447	~~140~~103,~~620~~269	~~103,269~~
2022	11,560	3,760	27,664	273,~~461~~760	~~3,760~~
2023	7,800	-	73,106	~~12,517~~-	-
2024 onwards	96,138	-		104,901	-
2024	7,800	-	7,800	-
	420,652	490,676		502,688	533,153
2025	82,363	-	229,457	-
	400,793	490,676	670,474	533,153

The Company and its subsidiaries have restrictive covenants under certain loans and financing that limit their ability to perform certain actions, such as issuing debt, and that could require the acceleration or refinancing of loans if the Company does not fulfill certain restrictive covenants.

The ratios and minimum and maximum amounts required under restrictive covenants for loan and financing transactions are as follows:

	09/30/2020	12/31/2019
	2020	2019
Loans and financing
Total accounts receivable(1) plus inventories required to be below zero or 2.0 times over venture debt(2)	67.5435 times	4.52 times
Total accounts receivable(1) plus inventories of completed units required to be below zero or 2.0 times over net debt less venture debt(2)	(434.5963) times	(9.04) times
Total debt, less venture debt, less cash and cash equivalents and short-term investments(3), cannot exceed 75% of equity plus non-controlling interests	-172.1403%	-15.81%
Total receivables(1) plus unrecognized income plus total inventories of completed units required to be 1.5 time over the net debt plus payable for purchase of properties plus unrecognized cost	52.4052 times	3.79 times

⁽¹⁾

Total receivables, whenever mentioned, refer to the amount reflected in the Statement of Financial Position plus the amount not shown in the Statement of Financial Position.

⁽²⁾

Venture debt and secured guarantee debt refer to SFH debts, defined as the sum of all disbursed borrowing contracts which funds were provided by the SFH.

⁽³⁾

Cash and cash equivalents and short-term investments refer to cash and cash equivalents and marketable securities.

Finance costs of loans, financing and debentures (ANote ~~free~~13) ~~translation~~are capitalized at the cost of each venture and land, according to the ~~original~~use ~~report~~of funds, and recognized in ~~Portuguese~~profit or loss for the year, according to the criteria for revenue recognition. The average capitalization rate used in the determination of costs of loans eligible to capitalization was 8.93% as ~~published~~of December 31, 2020 (10.84% in ~~Brazil~~2019).

Gafisa S.A.

Notes to the quarterly financial information

September 30, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

12. Loans and financing--Continued

The following table shows the summary of finance costs and charges and the capitalized portion in the line item properties for sale.

	Company		Consolidated		~~Consolidated~~
	09/30/2020		09/30/2019		09/30/2020	09/30/2019
	2020	2019	2020	2019
Total financial charges for the year	5980,~~898~~081	88,230	6695,~~184~~116	89,737	~~64,686~~	~~68,205~~
Capitalized financial charges (Note 30)	(1318,~~483~~819)	(21,179)	(1735,~~756~~516)	(30,358)	~~(21,685)~~	~~(25,229)~~
Subtotal (Note 24)	4661,~~415~~262	67,051	4859,~~428~~600	59,379	~~43,001~~	~~42,976~~
Financial charges included in “Properties for sale”:
Opening balance	193,798	211,465	~~211~~206,~~465~~935	223,807	~~206,935~~	~~223,807~~
Capitalized financial charges	1318,~~483~~819	21,179	1735,~~756~~516	30,358	~~21,685~~	~~25,229~~
Financial charges related to cancelled land sales contract	(3,840)	(38,~~840~~955)	(3,840)	(8,955)	~~(3,840)~~	~~(8,955)~~
Charges recognized in profit or loss (Note 23)	(1662,~~710~~195)	(29,891)	(2179,~~757~~719)	(38,275)	~~(25,307)~~	~~(30,356)~~
Acquired balance UPCON	-				17,408
Balance acquired from subsidiaries	-	-	14,336	-
Closing balance	186,731		198,509		216,881	209,725
Closing balance (Note 6)	146,582	193,798	173,228	206,935

The recorded amount of properties for sale offered as guarantee for loans, financing and debentures is R$~~379~~307,~~986~~233 (R$421,120 in 2019).

~~The other explanations related to this note were not subject to material changes in relation to the disclosures in Note 12 to the financial statements as of December 31, 2019.~~50

Gafisa S.A.

Notes to the financial statements--Continued

December 31, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

13.

Debentures

				Company		Consolidated
Program/placements	Principal - R$	Annual interest	Final maturity	~~09/30/~~2020	~~12/31/~~2019	~~09/30/~~2020	~~12/31/~~2019
Tenth placement (i)	22,453	IPCA + 7.8%	December 2023	3429,~~522~~833	38,038	3429,~~522~~833	38,038
Eleventh placement – 1st Series A (ii)	-	-	-	-	52,008	-	52,008
Twelfth placement (iii)	39,843	CDI + 3.75 %	December 2020	3932,~~800~~503	57,139	3932,~~800~~503	57,139
Thirteenth placement (iv)	17,777	CDI + 3.00%	June 2022	169,~~671~~236	33,792	169,~~671~~236	33,792
Fourteenth placement (v)	22,835	CDI + 5.00%	October 2020	261,~~024~~920	16,548	261,~~024~~920	16,548
Fifteenth placement (a)	33,750	IGPM - 0.50%	July 2021	3539,~~710~~875	-	3539,~~710~~875	-
RB Capital (b)	90,083	CDI + 6.00%	September 2024	-	-	90125,~~083~~383	-
Total debentures (Note 20.i.d, 20.ii.a, 20.iii and 30.ii)				152,727	197,525	242,810	197,525
Sixteenth placement (c)	25,570	100% CDI	February 2021	25,575	-	25,575	-
Current portion				127,147	158,179	127,147	158,179
Total debentures (Note 20.i.d, 20.ii.a, 20.iii and 30.ii)				138,942	197,525	264,325	197,525
Non-current portion				25,580	39,346	115,663	39,346
Current portion				120,399	158,179	120,737	158,179
Non-current portion				18,543	39,346	143,588	39,346

(a)

In the context of the acquisition of the totality of UPCON’s shares, on July 17, 2020, the Company signed the indenture of the 15th convertible debenture, of the subordinate type, into two series, in the total amount of R$33,750, maturing on July 15, 2020. The coupon rate applied to the face value corresponds to 0.50% per year and the index is the IGPM. The principal and coupon payments are only made on the respective maturity date, and may be settled by using the Company’s shares.

(b) On September 15, 2020, the subsidiary Novum signed the indenture of the first non-convertible debenture issue, with secured guarantee, in sole series, in the total amount of R$190,000, maturing in September 2024. The net proceeds from this issue will be fully and only used to develop the residential real estate development ventures “Scena Tatuapé", "Parque Ecoville", "Moov Belém", "Moov Estação Brás", "Moov Parque Maia", "Belvedere" and "Upside Paraíso". The funds shall be released according to the construction works’ needs, amortization and interest payments shall be made at the end of the operation. The coupon rate applied to the face value corresponds to the cumulative change of Interbank Deposits (DI) plus a surcharge equivalent to 6% p.a.

In(c) On October 21, 2020, the ~~period~~Company ~~ended September~~approved 30the indenture of the 16th convertible debenture issue, in two series, in the total amount of R$ 117,570, each with unit value of R$10. The first series, in the amount of R$42,000, was converted in the context of the acquisition of interest in four ventures of Calçada S.A. (Note 9.1). The second series, in the amount of R$25,570, was subscribed on December 28, 2020, with final maturity on March 31, 2021. As of December 31, 2020, the amount of option for converting liabilities into the Company’s ~~made~~shares is R$6,125 (Note 20 (i)(d)). The coupon rate applied to the ~~following~~face ~~payments:~~value corresponds to the cumulative change of Interbank Deposits (DI).

	Face value placement	Interest payable	Total amortization
(i)	4,771	1,366	6,137
(ii)	52,026	2,928	54,954
(iii)	17,639	2,451	20,090
(iv)	17,590	1,292	18,882
(v)	12,511	1,198	13,709
	104,537	9,235	113,772

In the year ended December 31, 2020, the Company made the following payments:

	Face value placement	Interest payable	Total amortization
(i)	9,704	2,709	12,413
(ii)	52,026	2,928	54,954
(iii)	25,720	2,983	28,703
(iv)	25,181	1,486	26,667
(v)	36,730	1,401	38,131
(a)	-	1,578	1,578
	149,361	13,085	162,446

The current and non-current portions have the following maturities:

	Company		Consolidated
Maturity	~~09/30/~~2020	~~12/31/~~2019	~~09/30/~~2020	~~12/31/~~2019
2020	~~80,394~~-	158,179	~~80,394~~-	158,179
2021	56120,~~131~~399	23,119	56120,~~131~~737	23,119
2022	1011,~~344~~428	11,243	1011,~~344~~428	11,243
2023	57,~~858~~115	4,984	57,~~858~~115	4,984
2024	-	-	90125,~~083~~045	-
	152,727	197,525	242,810	197,525
	138,942	197,525	264,325	197,525

~~(A free translation of the original report in Portuguese as published in Brazil)~~51

Gafisa S.A. Notes to the financial statements--ContinuedDecember 31, 2020(Amounts in thousands of Brazilian Reais, except as otherwise stated)

Notes to the quarterly financial information

September 30, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

13.

Debentures--Continued

The Company is compliant with the restrictive covenants of debentures at the reporting date of ~~this~~these ~~quarterly~~financial ~~information~~statements. The ratios and minimum and maximum amounts required under restrictive covenants are as follows:

	09/30/2020	12/31/2019
	2020	2019
Tenth placement
Total accounts receivable(1) plus inventories required to be below zero or 2.0 times over net debt less venture debt(2)	(981.4457) times	(14.62) times
Total debt, less venture debt(2), less cash and cash equivalents and short-term investments(3), cannot exceed 75% of equity plus non-controlling interests	-172.1403-%	-15.81%

(a)

⁽¹⁾Total receivables, whenever mentioned, refer to the amount reflected in the Statement of Financial Position plus the amount not shown in the Statement of Financial Position.

⁽²⁾Venture debt and secured guarantee debt refer to SFH debts, defined as the sum of all disbursed borrowing contracts which funds were provided by the SFH.

⁽³⁾Cash and cash equivalents and short-term investments refer to cash and cash equivalents and marketable securities.

The other explanations related to this note were not subject to material changes in relation to the disclosures in Note 13 to the financial statements as of December 31, 2019.

14.

Obligations assumed on the assignment of receivables

The transactions of assignment of the receivable portfolio are as follows:

	Company		Consolidated
	09/30/2020	12/31/2019	09/30/2020	12/31/2019
	2020	2019	2020	2019
Obligation CCI June/2011	152	322	294	412
Obligation CCI June/2011 - Note 5(i)	23	322	23	412
Obligation CCI November/2012	-	-	2,441	2,586
Obligation CCI November/2012 - Note 5(ii)	-	-	85	2,586
Obligation CCI December/2012	950	1,683	950	1,683
Obligation CCI December/2012 - Note 5(iii)	972	1,683	972	1,683
Obligation CCI November/2013	183	242	644	1,170
Obligation CCI November/2013 - Note 5(iv)	173	242	480	1,170
Obligation CCI November/2014	436	833	616	1,203
Obligation CCI November/2014 - Note 5(v)	371	833	486	1,203
Obligation CCI December/2015	1,410	2,342	3,950	5,300
Obligation CCI December/2015 - Note 5(vi)	1,232	2,342	3,148	5,300
Obligation CCI February/2016	3,705	5,845	4,168	6,429
Obligation CCI February/2016 - Note 5(vii)	3,287	5,845	3,682	6,429
Obligation CCI May/2016	2,639	3,385	3,525	4,625
Obligation CCI May/2016 - Note 5(viii)	2,250	3,385	3,062	4,625
Obligation CCI August/2016	1,898	2,351	1,922	2,392
Obligation CCI August/2016 - Note 5(ix)	1,752	2,351	1,774	2,392
Obligation CCI December/2016	5,162	5,961	5,274	6,106
Obligation CCI December/2016 - Note 5(x)	4,964	5,961	5,067	6,106
Obligation CCI March/2017	5,920	8,254	6,110	8,455
Obligation CCI March/2017 - Note 5(xi)	5,236	8,254	5,413	8,455
Total obligations assumed on assignment of receivables (Note 20.i.d and 20.ii.a)	2220,~~455~~260	31,218	2924,~~894~~192	40,361
Current	1110,~~843~~829	14,755	1513,~~534~~296	20,526
Non-current	109,~~612~~431	16,463	1410,~~360~~896	19,835

The current and non-current portions have the following maturities:

	Company		Consolidated
Maturity	~~09/30/~~2020	~~12/31/~~2019	~~09/30/~~2020	~~12/31/~~2019
2020	~~3,287~~-	14,755	~~7,313~~-	20,526
2021	810,~~036~~829	5,193	1013,~~962~~296	7,020
2022	32,~~946~~953	3,620	52,~~277~~977	4,284
2023	2,~~066~~127	1,895	2,~~916~~493	2,221
2024	5,120	5,755	3,426	6,310
2024 onwards	4,351	5,755	5,426	6,310
	22,455	31,218	29,894	40,361
	20,260	31,218	24,192	40,361

~~The other explanations~~Regarding ~~related~~the toabove ~~this~~transactions, ~~note~~the ~~were~~assignor ~~not~~is ~~subject~~required to ~~material~~fully ~~changes~~formalize inthe ~~relation~~guarantee toinstruments ~~the~~of ~~disclosures~~receivables in ~~Note~~favor 14of to the ~~financial statements~~assignee. asUntil ofit ~~December~~is 31fully fulfilled, ~~2019~~these amounts will be classified into a separate account in current and non-current liabilities.

Transaction (i) was entered into with Banco BTG Pactual S.A. ~~free~~at ~~translation~~rates of ~~the~~11.48% ~~original~~plus ~~report~~INCC infor ~~Portuguese~~receivables asof ~~published~~units innot ~~Brazil)~~delivered, and IGP-M or IPCA for the period after the certificate of occupancy.

~~Gafisa~~Transactions (ii), S(iii), (iv) and (v) were entered into with Polo Multisetorial Fundo de Investimento em Direitos Creditórios Não Padronizados at rates that range between 10.A50% and 11.48%, plus INCC for receivables of units not delivered, and IGP-M or IPCA for the period after the certificate of occupancy.

~~Notes~~Transactions (vi), to(vii), (viii), (ix), (x) and (xi) were entered into with Polo Capital Securitizadora S.A. at rates of 12.00%, plus INCC for receivables of units not delivered, and IGP-M or IPCA for the ~~quarterly~~period ~~financial~~after ~~information~~the certificate of occupancy.

~~September 30, 2020~~52

Gafisa S.A. Notes to the financial statements--ContinuedDecember 31, 2020(Amounts in thousands of Brazilian Reais, except as otherwise stated)

15.

Other payables

	Company		Consolidated
	09/30/2020	12/31/2019	09/30/2020	12/31/2019
	2020	2019	2020	2019
Provision for penalties due to delay in construction work	42,~~491~~866	3,659	87,~~677~~420	5,283
Cancelled contract payable and allowance for cancelled contracts	7460,~~305~~514	71,549	~~107~~91,~~428~~711	97,255
Warranty provision	1523,~~521~~627	14,419	1523,~~521~~628	14,419
Long term PIS and COFINS (deferred and payable)	417,~~665~~130	5,780	618,~~038~~166	8,372
Provision for net capital deficiency (Note 9.i.e)	2821,~~963~~533	14,794	186,~~108~~730	10,963
Long-term suppliers (Note 20.i.d)	~~1,311~~987	1,179	1,~~781~~816	1,382
Share-based payment - Phantom Shares (Note 18.3)	1,156	1,702	1,156	1,702
Share-based payment - Phantom Shares (Note 18.4)	1,109	1,702	1,109	1,702
Other liabilities	6,255	3,379	41,725	5,181
Other liabilities (a)	13,238	3,379	70,534	5,181
Total other payables	~~136~~141,~~667~~004	116,461	~~200~~221,~~434~~114	144,557
Current	~~132~~124,~~183~~434	110,189	~~178~~186,~~550~~466	135,492
Non-current	416,~~484~~570	6,272	2134,~~884~~648	9,065

(a) Other liabilities related to several diluted amounts.

16.

Provisions for legal claims and commitments

InThe Company and its subsidiaries are parties to lawsuits and administrative proceedings at various courts and government bodies that arise from the ~~period~~ordinary course of business, involving ~~ended~~tax, ~~September~~labor, 30civil, ~~2020~~and other matters. Management, based on information provided by its legal counsel, analysis of the ~~changes~~pending inclaims and, with respect to the labor claims, based on past experience regarding the amounts claimed, recognized a provision ~~are~~in ~~summarized~~an asamount ~~follows:~~considered sufficient to cover the estimated losses on pending decisions. The Company does not expect any reimbursement in connection with these claims.

Company	Civil lawsuits	Tax proceedings	Labor claims	Total
Balance as of December 31, 2019	226,951	2,682	33,848	263,481
Additional provision (Note 23)	51,127	-	-	51,127
Payment and reversal of provision not used	(39,839)	(2,637)	(4,274)	(46,750)
Balance as of September 30, 2020	238,239	45	29,574	267,858
Current	165,492	44	25,096	190,632
Non-current	72,747	1	4,478	77,226

In the years ended December 31, 2020 and 2019, the changes in provision are summarized below:

Consolidated	Civil lawsuits	Tax proceedings	Labor claims	Total
Company	Civil lawsuits	Tax proceedings	Labor claims	Total
Balance as of December 31, 2019	227,169	2,702	34,742	264,613
Balance as of December 31, 2018	235,294	637	55,133	291,064
Additional provision (Note 23)	52,708	-	-	52,708
Additional provision (Note 23) (i)	5,744	1,313	2,933	9,990
Payment and reversal of provision not used	(41,000)	(570)	(5,168)	(46,738)
Payment and reversal of provision not used (i)	(14,087)	732	(24,218)	(37,573)
Acquired balance UPCON	6,125	97	2,802	9,024
Balance as of December 31, 2019	226,951	2,682	33,848	263,481
Balance as of September 30, 2020	245,002	2,229	32,376	279,607
Additional provision (Note 23) (i)	64,302	-	-	64,302
Current	166,130	2,131	25,096	193,357
Payment and reversal of provision not used (ii)	(62,765)	(1,607)	(14,772)	(79,144)
Non-current	78,872	98	7,280	86,250
Balance as of December 31, 2020	228,488	1,075	19,076	248,639
Current	141,397	1,075	3,164	145,636
Non-current	87,091	-	15,912	103,003

Consolidated	Civil lawsuits	Tax proceedings	Labor claims	Total
Balance as of December 31, 2018	235,482	637	57,690	293,809
Additional provision (Note 23)	5,456	1,369	1,475	8,300
Payment and reversal of provision not used	(13,769)	696	(24,423)	(37,496)
Balance as of December 31, 2019	227,169	2,702	34,742	264,613
Additional provision (Note 23)	56,148	-	-	56,148
Payment and reversal of provision not used	(62,665)	(971)	(15,666)	(79,302)
Acquired balance of Upcon	9,024	-	-	9,024
Balance as of December 31, 2020	229,676	1,731	19,076	250,483

Current	142,171	1,731	3,164	147,066
Non-current	87,505	-	15,912	103,417

Gafisa S.A.

Notes to the financial statements--Continued

December 31, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

16.

Provisions for legal claims and commitments--Continued

(a) Civil lawsuits, tax proceedings and labor claims

As of ~~September 30~~December 31, 2020, the Company and its subsidiaries have deposited in court the amount of R$~~132~~110,~~249~~314 (R$122,238 in 2019) in the Company’s statements, and R$~~140~~120,~~661~~407 (R$129,933 in 2019) in the consolidated statements (Note 7).

	Company		Consolidated
	09/30/2020	12/31/2019	09/30/2020	12/31/2019
	2020	2019	2020	2019
Civil lawsuits	6058,~~782~~416	50,308	6665,~~000~~401	54,706
Tax proceedings	3743,~~161~~767	40,516	3846,~~535~~537	41,989
Labor claims	348,~~306~~131	31,414	368,~~126~~469	33,238
Total (Note 7)	~~132~~110,~~249~~314	122,238	~~140~~120,~~661~~407	129,933

(Ai) ~~free~~As ~~translation~~ of December 31, 2020, the ~~original~~provisions ~~report~~related to civil lawsuits (R$5,397 in ~~Portuguese~~2019) asrelated ~~published~~to lawsuits in ~~Brazil~~which the Company is included in the defendant side to be liable for in and out of court debts which original debtor is a former shareholder of the Company, Cimob Companhia Imobiliária (“Cimob”), or involve other companies of the same economic group of Cimob. In these lawsuits, the plaintiff argues that the Company should be liable for Cimob’s debts, because in its understanding the requirements for piercing of the corporate veil of Cimob to reach the Company (business succession, merger of assets and/or formation of a same economic group involving the Company and the Cimob Group) are present.

~~Gafisa~~The SCompany does not agree with the statement of facts based on which it has been included in these lawsuits and continues to dispute in court its liability for the debts of a third company, as well as the amount charged by the plaintiffs.A The Company has already obtained favorable and unfavorable decisions in relation to this matter, reason why it is not possible to estimate a uniform outcome in all lawsuits. The Company also aims by filing a lawsuit against Cimob and its former and current parent companies for obtaining the recognition that it should not be liable for the debts of that company, as well as indemnity of the amounts already paid by the Company in lawsuits relating to the charge of debts owed by Cimob.

~~Notes~~(ii) Environmental ~~to the quarterly financial information~~risk

~~September~~Considering 30the diversity of environmental legislation in the federal, ~~2020~~state and municipal levels, which may restrict or impede the development of real estate ventures, the Company analyzes all environmental risks, including the possible existence of hazardous or toxic materials, residues, vegetation and proximity of the land to permanent preservation areas, in order to mitigate risks in the development of ventures, during the process of land acquisition for future ventures.

~~(Amounts~~In inaddition, ~~thousands~~the environmental legislation establishes criminal, civil and administrative sanctions to individuals and legal entities for activities considered as environmental infringements or offense. The penalties include the stop of ~~Brazilian~~development ~~Reais~~activities, ~~except~~loss of tax benefits, confinement and fines. The lawsuits in dispute by the Company in civil court are considered by the legal counsel as ~~otherwise~~possible ~~stated~~loss in the amount of R$375 in the Company’s and consolidated statements (R$375 in the Company’s and consolidated statements in 2019).

Gafisa S.A.

Notes to the financial statements--Continued

December 31, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

16.

Provisions for legal claims and commitments--Continued

(iiii) ~~Lawsuits~~ ~~which~~The ~~likelihood~~Company requested an Arbitration Procedure to the Center for Arbitration and Mediation of ~~loss~~the isChamber ~~rated~~of Commerce Brazil-Canada, on July 31, 2018, against Yogo Participações e Empreendimentos Imobiliários S.A. (“Yogo”); Polo Real Estate Fundo de Investimentos e Participações, and Polo Capital Real Estate Gestão de Recursos Ltda. as ~~possible~~shareholders of Yogo; and Comasa – Construtora Almeida de Martins Ltda., in view of the breach of contractual obligations. As of December 31, 2020, no decision has been awarded yet.

As(iv) ofLawsuits ~~September 30,~~which 2020, the Company and its subsidiaries are aware of other claims, and civil, labor and tax risks. Based on the history of probable lawsuits and the specific analysis of main claims, the measurement of the claims with likelihood of loss considered possible amounted to R$487,235 (R$562,439 in 2019) in the Company’s statements and R$488,172 (R$565,410 in 2019) in the consolidated statements, based on average past outcomes adjusted to current estimates, for which the Company’s Management believes it is ~~not~~rated ~~necessary to~~as ~~recognize a provision for any losses. The change in the period was caused by the change in the volume of lawsuits with diluted amounts, and review of the involved amounts.~~possible

	Company		Consolidated
	09/30/2020	12/31/2019	09/30/2020	12/31/2019
Civil lawsuits	312,790	398,325	312,790	398,676
Tax proceedings	110,167	97,871	110,486	98,186
Labor claims	64,278	66,243	64,896	68,548
	487,235	562,439	488,172	565,410

As of December 31, 2020, the Company and its subsidiaries are aware of other claims, and civil, labor and tax risks. Based on the history of probable lawsuits and the specific analysis of main claims, the measurement of the claims with likelihood of loss considered possible amounted to R$421,242 (R$563,239 in 2019) in the Company’s statements and R$425,045 (R$565,410 in 2019) in the consolidated statements, based on average past outcomes adjusted to current estimates, for which the Company’s Management believes it is not necessary to recognize a provision for any losses. The change in the period was caused by the change in the volume of lawsuits with diluted amounts, and review of the involved amounts.

	Company		Consolidated
	2020	2019	2020	2019

Civil lawsuits	253,403	398,325	254,219	398,676
Tax proceedings	117,647	97,871	117,987	98,186
Labor claims	50,192	66,243	52,839	68,548
	421,242	562,439	425,045	565,410

(b)

Payables related to the completion of real estate ventures

~~There~~The ~~was~~Company nocommits ~~material change~~to incomplete ~~relation~~units sold and to comply with the ~~information~~laws ~~disclosed~~regulating inthe ~~Note~~civil ~~16(i)(b)~~construction tosector, including obtaining licenses from the ~~financial~~proper ~~statements~~authorities, asand compliance with the terms for starting and delivering the ventures, being subject to legal and contractual penalties. As of December 31, ~~2019~~2020, the Company and its subsidiaries have restricted cash in guarantee to loans, which will be released to the extent the guarantee ratios described in Note 4.2 are met, which include land and receivables pledged in guarantee of 120% of the debt outstanding.

(c)

Other commitments

In addition to the commitments mentioned in Notes 6, 12 and 13, the Company has commitments related to the rental of two commercial properties where its facilities are located, at a monthly cost of R$171 (including rent, condominium fees, and IPTU), indexed to the IGP-M/FGV change and termination of contract in August 2024.

The estimate of minimum future rent payments of this new contract for commercial property (cancellable leases) totals R$87,~~240~~474, considering the above-mentioned contract expiration, as follows.

	Consolidated
Estimate of payment	09/30/2020
2020	766
2021	2,153
2022	2,239
2023	2,329
2024 onwards	753
	8,240

~~The~~Gafisa ~~other~~S.A. ~~explanations related~~Notes to ~~this~~the ~~note~~financial ~~were~~statements--ContinuedDecember ~~not~~31, ~~subject~~2020(Amounts ~~to material changes~~ in ~~relation~~thousands toof ~~the~~Brazilian ~~disclosures~~Reais, inexcept ~~Note 16 to the financial statements~~ as ofotherwise ~~December 31, 2019.~~stated)

(A16. ~~free~~Provisions ~~translation~~for oflegal ~~the~~claims ~~original~~and ~~report in Portuguese as published in Brazil)~~commitments--Continued

Gafisa S.A.

	Consolidated
Estimate of payment	2020

2021	2,153
2022	2,239
2023	2,329
2024 onwards	753
	7,474

Notes to the quarterly financial information

September 30, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

17.

Payables for purchase of properties and advances from customers

		Company		Consolidated
	Maturity	~~09/30/~~2020	~~12/31/~~2019	~~09/30/~~2020	~~12/31/~~2019
Payables for purchase of properties	~~October~~January ~~2020~~2021 to November 2022	42,~~939~~310	68,020	~~180~~163,~~127~~597	68,133
Present value adjustment		(~~1,855~~783)	(5,295)	(~~1,859~~819)	(5,298)
Advances from customers
Development and services		1,088	1,540	58,173	14,197
Development and services (Note 5)		1,471	1,540	151,172	14,197
Barter transaction – Land (Note 30 (i))		6560,~~180~~146	94,075	~~110~~101,~~837~~479	145,396
Total payables for properties and advances from customers (Notes 20.i.d and 20.ii.a)		~~107~~103,~~352~~144	158,340	~~347~~415,~~278~~429	222,428
Current		6665,~~660~~969	89,825	~~259,~~336,029	129,353
Non-current		4037,~~692~~175	68,515	8779,~~942~~400	93,075

The current and non-current portions ~~fall~~have ~~due~~the asfollowing ~~follows~~maturities:

	Company		Consolidated	~~Consolidated~~
Maturity	~~09/30/~~2020	~~12/31/~~2019	2020	~~09/30/2020~~2019	~~12/31/2019~~
2020	~~26,908~~-	89,825	-	~~145~~129,~~672~~353	~~129,353~~
2021	4565,~~985~~969	28,352	336,029	7840,~~072~~219	~~40,219~~
2022	2427,~~086~~594	29,208	32,177	6633,~~983~~396	~~33,396~~
2023	89,~~843~~424	10,599	38,086	4510,~~842~~597	~~10,597~~
2024 onwards	1,530	356		10,709	8,863
2024	157	356	586	8,863
	107,352	158,340		347,278	222,428
2025 onwards	-	-	8,551	-
	103,144	158,340	415,429	222,428

18. Equity

18.1.

Capital

At the Extraordinary Shareholders’ Meeting held on April 30, 2020, shareholders approved the absorption of the Company’s retained losses by its capital in the amount of R$2,585,~~033~~032.

The Company’s Board of Directors ratified the following capital increases in the period ended September 30, 2020:

· On August 7, 2020: subscription and ~~pay-in~~payment of 75,610,000 new common shares at the price of R$4.10, totaling R$ 310,001.

· On September 25, 2020: subscription and ~~pay-in~~payment of 95,121,951 new common shares at the price of R$4.10, totaling R$390.,000.

~~Accordingly,~~· ~~as of~~On ~~September~~November 3016, 2020,: ~~the~~subscription ~~Company's authorized~~ and ~~paid-in~~payment ~~capital~~of ~~amounted to R$1~~9,~~041~~944,~~248~~150 ~~(R$2,926,280~~new ~~in 2019), represented by 290,731,951 registered~~ common shares, ~~with~~at nothe ~~par~~price ~~value,~~ of ~~which 341~~R$4.22,~~570~~ ~~(2,981,052~~totaling ~~in 2019) were held in treasury~~R$42,000.

~~According~~Accordingly, toas of December 31, 2020, the Company’'s ~~Articles~~authorized ofand ~~Incorporation,~~paid-in capital ~~may~~amounted beto ~~increased~~R$1,083,248 ~~without~~(R$2,926,280 ~~need~~in of2019), ~~making~~represented ~~amendment~~by ~~to it~~300,676,101 ~~upon~~registered ~~resolution~~common ofshares ~~the~~(120,000,000 ~~Board~~in ~~of Directors~~2019), ~~which~~with ~~shall~~no ~~set~~par ~~the~~value, ~~conditions~~of ~~for~~which ~~issuance~~341,570 ~~within the limit of 600~~(2,~~000~~981,~~000~~052 ~~(six~~in ~~hundred million~~2019) ~~common shares~~were held in treasury.

~~(A free translation of the original report in Portuguese as published in Brazil)~~56

Gafisa S.A. Notes to the financial statements--ContinuedDecember 31, 2020(Amounts in thousands of Brazilian Reais, except as otherwise stated)

Notes to the quarterly financial information

September 30, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

18.

Equity--Continued

18.1.

Capital--Continued

	Treasury shares
	Type	GFSA3	R$	%	Market value (*) R$ thousand		Carrying amount R$ thousand
Acquisition date		Number (i)	Weighted average price	% - on shares outstanding	09/30/2020	12/31/2019	09/30/2020	12/31/2019
2001	11/20/2001	44,462	38.9319	0.04%	193	385	1,731	1,731
2013	Acquisitions	1,372,096	51.9927	1.15%	5,941	11,896	71,339	71,339
2014	Acquisitions	3,243,947	35.5323	2.71%	14,046	28,125	115,265	115,265
2014	Transfers	(405,205)	43.3928	-0.34%	(1,755)	(3,513)	(17,583)	(17,583)
2014	Cancellations	(2,039,086)	44.9677	-1.70%	(8,829)	(17,679)	(91,693)	(91,693)
2015	Acquisitions	884,470	27.3124	0.74%	3,830	7,668	24,157	24,157
2015	Transfers	(90,622)	33.3473	-0.08%	(392)	(786)	(3,022)	(3,022)
2015	Cancellations	(2,225,020)	33.3543	-1.86%	(9,634)	(19,291)	(74,214)	(74,214)
2016	Acquisitions	334,020	26.0254	0.28%	1,446	2,896	8,693	8,693
2016	Transfers	(68,814)	31.2290	-0.06%	(298)	(597)	(2,149)	(2,149)
2017	Transfers	(112,203)	30.6320	-0.09%	(487)	(973)	(3,435)	(3,435)
2018	Acquisitions	13,221,300	13.4953	11.06%	57,248	114,629	178,425	178,425
2018	Transfers	(17,319)	30.6022	-0.01%	(75)	(150)	(530)	(530)
2018	Cancellations	(1,030,326)	-	-0.86%	(4,461)	(8,933)	-	-
2018	Disposal	(9,168,280)	16.1463	-7.67%	(39,699)	(79,489)	(148,034)	(148,034)
2019	Acquisitions	6,794,011	14.7355	5.68%	29,418	58,904	100,113	100,113
2019	Transfers	(9,174)	15.3695	-0.01%	(40)	(80)	(141)	(141)
2019	Cancellations	(370,000)	15.5324	-0.31%	(1,602)	(3,208)	(5,747)	(5,747)
2019	Disposal	(7,377,205)	14.5999	-6.17%	(31,943)	(63,960)	(109,658)	(109,658)
2020	Disposal	(2,639,482)	14.5979	-2.17%	(11,430)	-	(40,882)	-
		341,570	7.7116	0.33%	1,477	25,844	2,634	43,517

According to the Company’s Articles of Incorporation, capital may be increased without need of making amendment to it, upon resolution of the Board of Directors, which shall set the conditions for issuance within the limit of 600,000,000 (six hundred million) common shares.

(*) Market value calculated based on the closing share price on September 30, 2020 of R$4.33 (R$8.67 in 2019) not considering the effect of occasional volatilities.

	Treasury shares
	Type	GFSA3	R$	%	*Market value () R$ thousand**		Carrying amount R$ thousand
Acquisition date		Number (i)	Weighted average price	% - on shares outstanding	2020	2019	2020	2019
2001	11/20/2001	44,462	38.9319	0.11%	193	385	1,731	1,731

2013	Acquisitions	1,372,096	51.9927	3.46%	5,969	11,896	71,339	71,339

2014	Acquisitions	3,243,947	35.5323	8.19%	14,111	28,125	115,265	115,265
2014	Transfers	(405,205)	43.3928	-1.02%	(1,763)	(3,513)	(17,583)	(17,583)
2014	Cancellations	(2,039,086)	44.9677	-5.15%	(8,870)	(17,679)	(91,693)	(91,693)

2015	Acquisitions	884,470	27.3124	2.23%	3,847	7,668	24,157	24,157
2015	Transfers	(90,622)	33.3473	-0.23%	(394)	(786)	(3,022)	(3,022)
2015	Cancellations	(2,225,020)	33.3543	-5.61%	(9,679)	(19,291)	(74,214)	(74,214)

2016	Acquisitions	334,020	26.0254	0.84%	1,453	2,896	8,693	8,693
2016	Transfers	(68,814)	31.2290	-0.17%	(299)	(597)	(2,149)	(2,149)

2017	Transfers	(112,203)	30.6320	-0.28%	(488)	(973)	(3,435)	(3,435)

2018	Acquisitions	13,221,300	13.4953	33.36%	57,513	114,629	178,425	178,425
2018	Transfers	(17,319)	30.6022	-0.04%	(75)	(150)	(530)	(530)
2018	Cancellations	(1,030,326)	-	-2.60%	(4,482)	(8,933)	-	-
2018	Disposal	(9,168,280)	16.1463	-23.14%	(39,882)	(79,489)	(148,034)	(148,034)

2019	Acquisitions	6,794,011	14.7355	10.01%	29,554	58,904	100,113	100,113
2019	Transfers	(9,174)	15.3695	-0.01%	(40)	(80)	(141)	(141)
2019	Cancellations	(370,000)	15.5324	-0.54%	(1,610)	(3,208)	(5,747)	(5,747)
2019	Disposal	(7,377,205)	14.5999	-10.84%	(32,091)	(63,960)	(109,658)	(109,658)

2020	Disposal	(2,639,482)	14.5979	-0.91%	(11,481)	-	(40,885)	-
		341,570	9.0131	1.64%	1,486	25,844	2,632	43,517

(*)

Market value calculated based on the closing share price on December 31, 2020 of R$4.35 (R$8.67 in 2019) not considering the effect of occasional volatilities.

The Company holds shares in treasury acquired in 2001 in order to guarantee the performance of lawsuits (Note 16(a)(i)).

The change in the number of shares outstanding is as follows:

	Common shares - In thousands
Shares outstanding as of December 31, 2018	38,599
Subscription of shares	76,642
Repurchase of shares	(7,164)
Disposal of shares	7,386
Cancellation of treasury shares	370
Change in shares held by the management members of the Company	1,172
Shares outstanding as of December 31, 2019	117,005
Subscription of shares	~~170~~180,~~732~~677
Disposal of shares	2,~~639~~640
Change in management’s shares	(9,786)
Change in shares held by the management members of the Company	(9,809)
Shares outstanding as of September 30, 2020	280,590
Shares outstanding as of December 31, 2020	290,513
Weighted average shares outstanding (Note 27)	~~144~~179,~~814~~882

18.2. ~~Stock~~Allocation ~~option~~of ~~plan~~profit (loss) for the year

~~Expenses~~According ~~for~~to ~~granting~~the Company’s Articles ~~stocks~~of ~~are~~Incorporation, ~~recorded~~profit ~~under~~for the ~~account~~year ~~“General~~is ~~and~~allocated ~~administrative~~as ~~expenses”~~follows, ~~(Note~~after ~~23)~~deduction for any accumulated losses and ~~showed~~provision ~~the~~for ~~following~~income ~~effects~~taxes: on(i) ~~profit~~5% orto ~~loss~~legal reserve, reaching up to 20% of paid-in capital, or when the ~~periods~~legal ~~ended~~reserve ~~September~~balance plus capital reserves is in excess of 30% of capital; (ii) 25% of the remaining balance to pay mandatory dividends; and (iii) amount not in excess of 71.25% to set up the Reserve for Investments, ~~2020~~with the purpose of financing the expansion of the operations of the Company and ~~2019:~~its subsidiaries.

	09/30/2020	09/30/2019
Equity-settled stock option plans	184	355
Phantom Shares (Note 18.3)	(546)	(3,053)
Total option grant expenses (Note 23)	(362)	(2,698)

~~Changes~~Gafisa inS.A. ~~the stock~~Notes ~~options~~to ~~outstanding in~~ the ~~period~~financial ~~ended~~statements--ContinuedDecember ~~September 30~~31, 2020(Amounts ~~and~~in ~~year~~thousands ~~ended~~of ~~December~~Brazilian 31Reais, ~~2019,~~except ~~including the respective weighted average exercise prices are~~ as ~~follows:~~otherwise stated)

	2020		2019
	Number of options	Weighted average exercise price (reais)	Number of options	Weighted average exercise price (reais)
Options outstanding at the beginning of the year	1,230,383	16.64	1,239,557	15.58
Options granted	-	-	-	-
Options exercised (i)	-	-	(9,174)	(16.16)
Options outstanding at the end of the year	1,230,383	16.64	1,230,383	16.64

(i) In the year ended December 31, 2019, the amount received through exercised options was R$148.

(A free translation of the original report in Portuguese as published in Brazil)

Gafisa S.A.

Notes to the quarterly financial information

September 30, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

18.

Equity--Continued

18.2. ~~Stock~~Allocation ~~option~~of ~~plan~~profit (loss) for the year--Continued

AsThe Board of ~~September 30~~Directors, by resolution at ~~2020~~the Annual Shareholders’ Meeting, ~~the~~shall ~~stock~~examine ~~options~~the ~~outstanding~~accounts and ~~exercisable~~financial ~~are~~statements asrelated ~~follows:~~to the fiscal year 2020.

Options outstanding			Options exercisable
Number of options	Weighted average remaining contractual life (years)	Weighted average exercise price (reais)	Number of options	Weighted average exercise price (reais)
1,230,383	5.50	16.64	682,964	23.27

In view of the retained losses as of December 31, 2020, the allocation of profit or loss for the year is not applicable.

During the period ended September 30, 2020 and year ended December 31, 2019, the Company did not grant any option in connection with its stock option plans comprising common shares.

Balance of retained losses for 2018	(2,308,403)
Net loss for the year 2019	(13,742)
Proceeds from disposal of treasury shares	(4,521)
Balance of retained losses for 2019	(2,326,666)
Incurred retained losses	2,585,032
Net loss for the year 2020	(76,521)
Proceeds from disposal of treasury shares	(19,654)
Retained earnings	(162,191)
Balance of retained losses for 2020	-

18.3.

Stock option plan

Expenses for granting stocks are recorded under the account “General and administrative expenses” (Note 23) and showed the following effects on profit or loss in the years ended December 31, 2020 and 2019:

	2020	2019
Equity-settled stock option plans	246	534
Phantom Shares (Note 18.4)	(593)	(2,900)
Total option grant expenses (Note 23)	(347)	(2,366)

(i)

Gafisa

The Company has a total of six stock option plans comprising common shares, launched in 2012, 2013, 2014, 2015, 2016 and 2018 which follows the rules established in the Stock Option Plan of the Company.

The granted options entitle their holders (employees) to subscribe common shares of the Company’s capital, after periods that range from one to four years of employment (essential condition to exercise the option), and expire six to ten years after the grant date.

The fair value of options is set on the grant date, and it is recognized as expense in profit or loss (as contra-entry to equity) during the grace period of the plan, to the extent the services are provided by employees and management members.

The changes in the stock options outstanding in the years ended December 31, 2020 and 2019, including the respective weighted average exercise prices, are as follows:

Gafisa S.A.

Notes to the financial statements--Continued

December 31, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

18.

Equity--Continued

18.3.

Stock option plan--Continued

	2020		2019
	Number of options	Weighted average exercise price (reais)	Number of options	Weighted average exercise price (reais)
Options outstanding at the beginning of the year	1,230,383	16.64	1,239,557	15.58
Options granted	-	-	-	-
Options exercised (i)	-	-	(9,174)	(16.16)
Options expired	(244,944)	(16.98)	-	-
Options outstanding at the end of the year	985,439	16.56	1,230,383	16.64

(i) In the year ended December 31, 2019, the amount received through exercised options was R$148.

As of December 31, 2020, the stock options outstanding and exercisable are as follows:

Options outstanding			Options exercisable
Number of options	Weighted average remaining contractual life (years)	Weighted average exercise price (reais)	Number of options	Weighted average exercise price (reais)

985,439	5.50	16.98	552,041	17.78

During the years ended December 31, 2020 and 2019, the Company did not grant any option in connection with its stock option plans comprising common shares.

The models used by the Company for pricing granted options are the Binomial model for traditional options and the MonteCarlo model for options in the Restricted Stock Options format.

18.34. Share-based payment - Phantom Shares

The Company has a total of two cash-settled share-based payment plans with fixed terms and conditions, according to the plans approved by the Company, launched in 2015 and 2016.

As of ~~September 30~~December 31, 2020, the amount of R$1,~~156~~109 (R$1,702 in 2019), related to the fair value of the phantom shares granted, is recognized in the line item “Other payables” (Note 15).

~~The other explanations related to this note were not subject to material changes in relation to the disclosures in Note 18 to the financial statements as of December 31, 2019.~~59

Gafisa S.A.

Notes to the financial statements--Continued

December 31, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

19.

Income tax and social contribution

The reconciliation of the effective tax rate for the ~~periods~~years ended ~~September~~December 3031, 2020 and 2019 is as follows:

	Company		Consolidated
	09/30/2020	09/30/2019	09/30/2020	09/30/2019
	2020	2019	2020	2019
Loss before income tax and social contribution, and statutory interest	(~~105~~76,~~500~~354)	(6051,~~746~~001)	(~~102~~69,~~680~~632)	(5949,~~404~~378)
Income tax calculated at the applicable rate - 34%	3525,~~870~~960	2017,~~654~~340	3423,~~911~~593	2016,~~197~~789
Net effect of subsidiaries and ventures taxed by presumed profit and RET	-	-	~~(608)~~18,559	-17,951
Income from equity method investments	(121,~~245)~~248	(115,~~695)~~933	(121,~~245)~~248	(~~710~~1,701)
Stock option plan	(6384)	(~~121~~142)	(6384)	(~~121~~142)
Other permanent differences	22,533	-	21,633	-
Net effect of divestment in associate	-	22,610	-	22,610
Charges on payables to venture partners	-	-	-	-
Other permanent differences	33,036	22,555	10,913	19,102
Recognized (unrecognized) tax credits	(57,095)	(18,838)	(58,247)	(20,587)
Charges on payables to venture partners	-	-	-	18
	-	-	(3,619)	(1,221)
Recognized (unrecognized) tax credits	(80,327)	(41,037)	(81,837)	(39,352)
Tax expenses - current	-	-	(3,619)	(1,221)
	(167)	37,259	(7,608)	35,275
Tax income (expenses) - deferred	-	-	-	-
Tax expenses - current	(167)	-	(7,608)	(1,984)
Tax income (expenses) - deferred	-	37,259	-	37,259

(A free translation of the original report in Portuguese as published in Brazil)

Gafisa S.A.

Notes to the quarterly financial information

September 30, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

19. Income tax and social contribution--Continued

(ii)

Deferred income tax and social contribution

AsThe ofCompany ~~September 30,~~recognized ~~2020~~deferred ~~and~~tax ~~December~~assets on ~~31,~~tax ~~2019,~~losses ~~deferred~~and income tax and social contribution ~~are~~carryforwards ~~from~~for prior years, which have no expiration, and for which offset is limited to 30% of annual taxable profit, to the ~~following~~extent ~~sources:~~the taxable profit is probable to be available for offsetting temporary differences, based on the assumptions and conditions established in the business model of the Company.

	Company		Consolidated
	09/30/2020	12/31/2019	09/30/2020	12/31/2019
Assets
Provisions for legal claims	91,072	89,584	91,998	89,968
Temporary differences - deferred PIS and COFINS	15,396	14,997	15,396	14,997
Provisions for realization of non-financial assets	266,570	260,327	266,570	260,327
Temporary differences - CPC adjustment	6,654	12,114	6,654	12,114
Other provisions	13,575	6,489	13,575	6,479
Income tax and social contribution loss carryforwards	456,147	411,064	477,605	431,311
	849,414	794,575	871,798	815,196
Unrecognized tax credits of continued operations	(781,081)	(723,986)	(803,465)	(745,218)
	(781,081)	(723,986)	(803,465)	(745,218)
Liabilities
Discounts	(2,069)	(2,069)	(2,069)	(2,069)
Temporary differences - CPC adjustment	(7,877)	(42,273)	(7,877)	(41,671)
Income taxed between cash and accrual basis	(70,501)	(38,361)	(70,501)	(38,352)
	(80,447)	(82,703)	(80,447)	(82,092)
Total, net	(12,114)	(12,114)	(12,114)	(12,114)

As of December 31, 2020 and 2019, deferred income tax and social contribution are from the following sources

	Company		Consolidated
	2020	2019	2020	2019
Assets
Provisions for legal claims	84,538	89,584	85,164	89,968
Temporary differences - deferred PIS and COFINS	15,708	14,997	15,708	14,997
Provisions for realization of non-financial assets	258,904	261,816	256,227	261,816
Temporary differences - CPC adjustment	8,363	12,114	8,363	12,114
Other provisions	18,204	6,489	18,204	6,479
Income tax and social contribution loss carryforwards	494,113	411,064	516,369	431,311
	879,829	796,064	900,035	816,685

Unrecognized tax credits of continued operations	(804,313)	(725,475)	(827,055)	(746,707)
	(804,313)	(725,475)	(827,055)	(746,707)
Liabilities
Discounts	(2,069)	(2,069)	(2,069)	(2,069)
Temporary differences - CPC adjustment	(6,212)	(42,273)	(6,211)	(41,671)
Income taxed between cash and accrual basis	(79,349)	(38,361)	(79,349)	(38,352)
	(87,630)	(82,703)	(87,629)	(82,092)

Total, net	(12,114)	(12,114)	(14,649)	(12,114)

Gafisa S.A.

Notes to the financial statements--Continued

December 31, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

19.

Income tax and social contribution--Continued

The balances of income tax and social contribution loss carryforwards for offset are as follows:

	Company
	09/30/2020			12/31/2019
	2020			2019
	Income tax	Social contribution	Total	Income tax	Social contribution	Total
Balance of income tax and social contribution loss carryforwards	(1,~~341~~453,~~609~~272)	(1,~~341~~453,~~609~~272)	-	1,209,011	1,209,011	-
Deferred tax assets (25%/9%)	~~335~~(363,~~402~~318)	~~120~~(130,~~745~~794)	~~456~~(494,~~147~~113)	302,253	108,811	411,064
Recognized deferred tax assets	21,~~194~~826	~~790~~658	2,~~984~~484	9,781	3,521	13,302
Unrecognized deferred tax assets	~~333~~(365,~~208~~144)	~~119~~(131,~~955~~452)	~~453~~(496,~~163~~597)	292,472	105,290	397,762

	Consolidated
	09/30/2020			12/31/2019
	2020			2019
	Income tax	Social contribution	Total	Income tax	Social contribution	Total
Balance of income tax and social contribution loss carryforwards	(1,~~404~~518,~~723~~733)	(1,~~404~~518,~~723~~733)	-	1,268,563	1,268,563	-
Deferred tax assets (25%/9%)	~~351~~(379,~~181~~683)	~~126~~(136,~~425~~686)	~~477~~(516,~~606~~369)	317,141	114,170	431,311
Recognized deferred tax assets	21,~~194~~826	~~790~~658	2,~~984~~484	9,781	3,521	13,302
Unrecognized deferred tax assets	~~348~~(381,~~987~~509)	~~125~~(137,~~635~~344)	~~474~~(518,~~622~~853)	307,360	110,649	418,009

~~The~~In ~~other~~the ~~explanations~~years ended December 31, 2020 and ~~related~~2019, tothe ~~this~~credit ~~note~~effect ~~were~~of ~~not~~income ~~subject~~tax toand ~~material~~social ~~changes~~contribution inon ~~relation~~statement toof profit or loss of the ~~disclosures~~Company inis ~~Note~~mainly 19caused toby the ~~financial statements~~write-off asand impairment recorded at the initial value of ~~December~~the 31portion of remeasurement of the investment stated at fair value, ~~2019~~respectively.

(A free translation of the original report in Portuguese as published in Brazil)

Gafisa S.A.

Notes to the quarterly financial information

September 30, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

20.

Financial instruments

The Company and its subsidiaries engage in operations involving financial instruments. These instruments are managed through operational strategies and internal controls aimed at providing liquidity, return and safety. The use of financial instruments for hedging purposes is achieved through a periodical analysis of exposure to the risk that the Management intends to cover (exchange, interest rate, etc.) which is submitted to the corresponding Management bodies for approval and performance of the proposed strategy. The control policy consists of ongoing monitoring of the contracted conditions in relation to the prevailing market conditions. The Company and its subsidiaries do not use derivatives or any other risky assets for speculative purposes. The result from these operations is consistent with the policies and strategies devised by the Company’s Management. The Company and its subsidiaries operations are subject to the risk factors described below:

(i)

Risk considerations

Credit risk

~~There~~The ~~was~~Company noand ~~significant change~~its insubsidiaries ~~relation~~restrict their exposure to ~~the~~ credit risks ~~disclosed~~associated inwith ~~Note~~cash ~~20(i)(a)~~and tocash ~~the~~equivalents, ~~financial~~investing ~~statements~~only asin short-term securities of ~~December~~top ~~31,~~tier ~~2019~~financial institutions.

With regards to accounts receivable, the Company restricts its exposure to credit risks through sales to a broad base of customers and ongoing credit analysis. Additionally, there is no relevant history of losses due to the existence of secured guarantee, represented by real estate unit, for the recovery of its products in the cases of default during the construction period.

Gafisa S.A.

Notes to the financial statements--Continued

December 31, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

20.

Financial instruments--Continued

(i)

Risk considerations--Continued

As of December 31, 2020 and 2019, there was no significant credit risk concentration associated with customers.

Derivative financial instruments

In the ~~period~~year ended ~~September~~ 30December 31, 2020, the Company entered into ~~financial~~ derivative financial instruments to mitigate the risk arising from its exposure to to index and interest volatility recognized at fair value in profit or loss for the year.

As of December 30 31, 2020, the Company had derivative contracts to hedge the interest rate fluctuation, maturing in February 2021. The ~~derivate~~derivative contracts are as follows:

	Reais	Percentage		Maturity		Unrealized gains/(losses) on derivative instruments, net
Interest rate swap contracts	Face value		Swap – Liability position	Beginning	End	~~09/30/~~2020	~~12/31/~~2019
Swap 1	79,003		120% CDI	08/05/2020	02/04/2021	~~1,495~~236	-
Swap 2	100,000		Fixed 7%	09/10/2020	02/16/2021	~~(878)~~141	-
Total derivative financial instruments						617	-

Interest rate risk

~~There~~Interest ~~was~~rate norisk ~~significant~~arises from the possibility ~~change~~that the Company and its subsidiaries may experience gains or losses arising from fluctuations in ~~relation~~the interest rates of its financial assets and liabilities. Aiming to mitigate this kind of risk, the Company and its subsidiaries seek to diversify funding in terms of fixed and floating rates. The interest ~~rate~~rates ~~risks~~on loans, financing and debentures are disclosed in Notes 12 and 13. The interest rates contracted on financial investments are disclosed in Note 204. Accounts receivable from completed real estate units (iNote 5)~~(c)~~ toare ~~the~~subject ~~financial~~to ~~statements~~annual interest asrate of ~~December 31~~12%, ~~2019~~recognized on a pro rata basis.

Liquidity risk

~~There~~Liquidity ~~was~~risk norefers ~~significant~~to the possibility ~~change~~that inthe ~~relation~~Company toand ~~the~~its ~~liquidity~~subsidiaries ~~risks~~do ~~disclosed~~not inhave ~~Note~~sufficient ~~20(i)(d)~~funds to ~~the~~meet ~~financial~~their ~~statements~~commitments asin view of ~~December~~the ~~31,~~settlement ~~2019~~terms of its rights and obligations.

(ATo ~~free~~mitigate ~~translation~~liquidity risks, and to optimize the weighted average cost of capital, the ~~original~~Company ~~report~~and its subsidiaries monitor on an on-going basis the indebtedness levels according to the market standards, and the fulfillment of covenants provided for in ~~Portuguese~~loan, asfinancing ~~published~~and debenture agreements, in ~~Brazil~~order to guarantee that the operating-cash generation and the advance funding, when necessary, are sufficient to meet the schedule of commitments, appropriately mitigating liquidity risk to the Company or its subsidiaries (Notes 12 and 13).

~~Gafisa S.A.~~ 62

Gafisa S.A. Notes to the ~~quarterly~~ financial ~~information~~statements--ContinuedDecember 31, 2020(Amounts in thousands of Brazilian Reais, except as otherwise stated)

September 30, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

20.

Financial instruments--Continued

(i)

Risk considerations--Continued

Liquidity risk--Continued

The maturities of financial instruments of loans, financing, suppliers, debentures, forward transactions, obligations assumed on assignment of receivables, suppliers, payables for purchase of properties and advance from customers are as follows:

Year ended September 30, 2020	Company
Year ended December 31, 2020	Company
Liabilities	Less than 1 year	1 to 3 years	4 to 5 years	Over 5 years	Total
Loans and financing (Note 12)	~~300~~291,~~534~~270	~~120~~109,~~118~~523	-	-	~~420~~400,~~652~~793
Debentures (Note 13)	~~127~~120,~~147~~399	2518,~~580~~543	-	-	~~152~~138,~~727~~942
Obligations assumed on assignment of receivables (Note 14)	11,843	6,204	2,258	2,150	22,455
Financial instrument – premium of debenture option (Note 13)	6,125	-	-	-	6,125
Suppliers (Note 15 and Note 20.ii.a)	65,995	1,311	-	-	67,306
Obligations assumed on assignment of receivables (Note 14)	10,829	6,189	2,408	834	20,260
Payables for purchase of properties and advances from customers (Note 17)	66,660	38,478	2,214	-	107,352
Suppliers (Note 15 and Note 20.ii.a)	93,392	987	-	-	94,379
	572,179	191,691	4,472	2,150	770,492
Payables for purchase of properties and advances from customers (Note 17)	65,969	37,018	157	-	103,144
	587,984	172,260	2,565	834	763,643
Assets
Cash and cash equivalents and short-term investments (Notes 4.1 and 4.2)	~~619~~413,~~068~~907	-	-	-	~~619~~413,~~068~~907
Trade accounts receivable (Note 5)	340,~~903~~096	6882,~~591~~899	499,~~551~~218	-	~~414~~522,~~045~~213
	959,971	68,591	4,551	-	1,033,113
	754,003	82,899	99,218	-	936,120

Year ended September 30, 2020	Consolidated
Year ended December 31, 2020	Consolidated
Liabilities	Less than 1 year	1 to 3 years	4 to 5 years	Over 5 years	Total
Loans and financing (Note 12)	~~349~~332,~~348~~447	~~153~~338,~~340~~027	-	-	~~502~~670,~~688~~474
Debentures (Note 13)	~~127~~120,~~147~~737	~~115~~143,~~663~~588	-	-	~~242~~264,~~810~~325
Obligations assumed on assignment of receivables (Note 14)	15,534	8,480	4,961	919	29,894
Financial instrument – premium of debenture option (Note 13)	6,125	-	-	-	6,125
Suppliers (Note 15 and Note 20.ii.a)	131,054	1,781	-	-	132,835
Obligations assumed on assignment of receivables (Note 14)	13,296	7,229	2,471	1,196	24,192
Payables for purchase of properties and advances from customers (Note 17)	259,336	76,099	11,843	-	347,278
Suppliers (Note 15 and Note 20.ii.a)	122,576	1,816	-	-	124,392
	882,419	355,363	16,804	919	1,255,505
Payables for purchase of properties and advances from customers (Note 17)	336,029	70,264	9,136	-	415,429
	931,210	560,924	11,607	1,196	1,504,937
Assets
Cash and cash equivalents and short-term investments (Notes 4.1 and 4.2)	~~630~~622,~~060~~120	-	-	-	~~630~~622,~~660~~120
Trade accounts receivable (Note 5)	~~544~~487,~~147~~083	80117,~~031~~461	699,~~812~~708	~~35,035~~-	~~630~~704,~~990~~252
	1,174,807	80,031	6,812	35,035	1,261,650
	1,109,203	117,761	99,708	-	1,326,372

Fair value classification

The Company uses the following classification to determine and disclose the fair value of financial instruments by valuation technique:

Level 1: quoted prices (without adjustments) in active markets for identical assets or liabilities;

Level 2: inputs other than the quoted market prices within Level 1 that are observable for asset or liability, either directly (as prices) or indirectly (derived from prices); and

Level 3: inputs for asset or liability not based on observable market data (unobservable inputs).

The classification level of fair value for financial instruments measured at fair value through profit or loss of the Company as of ~~September~~December 3031, 2020 and ~~December 31,~~ 2019 is as follows:

	Company			Consolidated
	Fair value classification
As of September 30, 2020	Level 1	Level 2	Level 3	Level 1	Level 2	Level 3
Financial assets
Short-term investments (Note 4.2)	-	619,025	-	-	623,955	-

	Company			Consolidated
	Fair value classification
As of December 31, 2019	Level 1	Level 2	Level 3	Level 1	Level 2	Level 3
Financial assets
Short-term investments (Note 4.2)	-	401,243	-	-	401,895	-

Gafisa S.A.

Notes to the financial statements--Continued

December 31, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

(A free translation of the original report in Portuguese as published in Brazil)

Gafisa S.A.

Notes to the quarterly financial information

September 30, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

20.

Financial instruments--Continued

(i)

Risk considerations--Continued

Liquidity risk--Continued

Fair value classification--Continued

In the period ended September 30, 2020 and year ended December 31, 2019, there was no transfer between the Levels 1 and 2 fair value classifications, nor were transfers between Levels 3 and 2 fair value classifications.

	Company			Consolidated
	Fair value classification
As of December 31, 2020	Level 1	Level 2	Level 3	Level 1	Level 2	Level 3

Financial assets
Short-term investments (Note 4.2)	-	413,348	-	-	593,082	-
Financial liabilities
Premium of convertible debenture option (Note 13)	-	6,125	-	-	6,125	-

	Company			Consolidated
	Fair value classification
As of December 31, 2019	Level 1	Level 2	Level 3	Level 1	Level 2	Level 3

Financial assets
Short-term investments (Note 4.2)	-	401,243	-	-	401,895	-

In the years ended December 31, 2020 and 2019, there was no transfer between the Levels 1 and 2 fair value classifications, nor were transfers between Levels 3 and 2 fair value classifications.

(ii)

Fair value of financial instruments

Fair value measurement

The ~~Company~~following ~~uses~~estimated fair values were ~~the~~determined ~~same~~using ~~methods~~available market information and ~~assumptions~~proper ~~disclosed~~measurement inmethodologies. ~~Note~~However, ~~20(ii)(~~a) toconsiderable ~~the~~amount ~~financial~~of ~~statements~~judgment asis ofnecessary to ~~December~~interpret ~~31,~~market ~~2019~~information toand ~~measure~~estimate fair value. Accordingly, the estimates presented in this document are not necessarily indicative of ~~each~~amounts ~~financial~~that ~~instrument~~the ~~classification~~Company ~~for~~could ~~which~~realize in the ~~estimate~~current market. The use of ~~value~~different ismarket ~~practicable~~assumptions and/or estimation methodology may have a significant effect on estimated fair values.

The ~~most~~following ~~significant carrying~~methods ~~amounts~~ and ~~fair~~assumptions ~~values~~were used ofin ~~financial~~order ~~assets~~to ~~and~~estimate ~~liabilities~~the asfair value of ~~September~~each ~~30,~~financial ~~2020~~instrument ~~and~~type ~~December~~for ~~31,~~which ~~2019,~~the ~~classified into~~estimate ~~Level 2~~ of ~~the~~values ~~fair~~is ~~value classification, are as follows:~~practicable.

	Company
	09/30/2020		12/31/2019
	Carrying amount	Fair value	Carrying amount	Fair value	Classification
Financial assets
Cash and cash equivalents (Note 4.1)	43	43	810	810	(*)
Short-term investments (Note 4.2)	619,025	619,025	401,243	401,243	(*)
Trade accounts receivable (Note 5)	414,045	414,045	460,017	460,017	(**)
Loans receivable (Note 21.1)	112,665	112,665	33,416	33,416	(**)
Financial liabilities
Loans and financing (Note 12)	420,652	396,770	490,676	502,909	(**)
Debentures (Note 13)	152,727	186,482	197,525	278,727	(**)
Suppliers	67,306	67,306	80,285	80,285	(**)
Obligations assumed on assignment of receivables (Note 14)	22,455	22,455	31,218	31,218	(**)
Payables for purchase of properties and advances from customers (Note 17)	107,352	107,352	158,340	158,340	(**)
Loan payable (Note 21.1)	7,922	7,922	9,280	9,280	(**)

(i)

The amounts of cash and cash equivalents, short-term investments, accounts receivable, other receivables, suppliers, and other current liabilities approximate to their fair values recorded in the financial statements.

	Consolidated
	09/30/2020		12/31/2019
	Carrying amount	Fair value	Carrying amount	Fair value	Classification
Financial assets
Cash and cash equivalents (Note 4.1)	6,705	6,705	12,435	12,435	(*)
Short-term investments (Note 4.2)	623,955	623,955	401,895	401,895	(*)
Trade accounts receivable (Note 5)	630,990	630,990	557,438	557,438	(**)
Loans receivable (Note 21.1)	41,070	41,070	33,416	33,416	(**)
Financial liabilities
Loans and financing (Note 12)	502,688	403,210	533,153	542,909	(**)
Debentures (Note 13)	242,810	186,482	197,525	278,727	(**)
Suppliers	132,835	132,835	96,832	96,832	(**)
Obligations assumed on assignment of receivables (Note 14)	29,894	29,894	40,361	40,361	(**)
Payables for purchase of properties and advances from customers (Note 17)	347,355	347,355	222,428	222,428	(**)
Loan payable (Note 21.1)	7,922	7,922	9,280	9,280	(**)

(ii)

The fair value of bank loans and other financial debts is estimated through future cash flows discounted using benchmark interest rates available for similar and outstanding debts or terms.

~~(*) Fair value through profit or loss~~64

Gafisa S.A. Notes to the financial statements--ContinuedDecember 31, 2020(**)Amounts ~~Amortized cost~~in thousands of Brazilian Reais, except as otherwise stated)

There was no material change in relation to the information disclosed Note 20(ii)(a) to the financial statements as of December 31, 2019.

(A free translation of the original report in Portuguese as published in Brazil)

Gafisa S.A.

Notes to the quarterly financial information

September 30, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

20.

Financial instruments–Continued

(ii)

Fair value of financial instruments--Continued

ba) ~~Risk~~Fair ofvalue ~~debt acceleration~~measurement--Continued

AsThe ofmost ~~September 30,~~significant ~~2020,~~carrying ~~the~~amounts ~~Company has loans~~ and ~~financing contracts with restrictive covenants related to cash generation, indebtedness ratios,~~ ~~capitalization,~~fair ~~debt~~values ~~coverage, maintenance~~ of ~~shareholding~~financial ~~position,~~assets and ~~others.~~liabilities ~~The~~as ~~breach~~ of ~~such~~December ~~obligations by the Company may give rise to the acceleration of its debts and/or acceleration of other debts of the Company~~31, ~~including~~2020 ~~due to the performance of any cross default or cross acceleration clauses, which may negatively impact the profit or loss of the Company~~ and ~~the~~2019 ~~value of~~are ~~its~~as ~~shares.~~follows:

	Company
	2020		2019
	Carrying amount	Fair value	Carrying amount	Fair value	Classification

Financial assets
Cash and cash equivalents (Note 4.1)	469	469	810	810	(*)
Short-term investments (Note 4.2)	413,438	413,438	401,243	401,243	(*)
Trade accounts receivable (Note 5)	522,213	522,213	460,017	460,017	(**)
Loans receivable (Note 21.1)	169,321	169,321	33,416	33,416	(**)

Financial liabilities
Loans and financing (Note 12)	400,793	429,373	490,676	502,909	(**)
Debentures (Note 13)	138,942	169,104	197,525	278,727	(**)
Financial instrument – premium of debenture option (Note 20(i)(d))	6,125	6,125	-	-	(**)
Suppliers	94,379	94,379	80,285	80,285	(**)
Obligations assumed on assignment of receivables (Note 14)	20,260	20,260	31,218	31,218	(**)
Payables for purchase of properties and advances from customers (Note 17)	103,144	103,144	158,340	158,340	(**)
Loan payable (Note 21.1)	19,633	19,633	9,280	9,280	(**)

	Consolidated
	2020		2019
	Carrying amount	Fair value	Carrying amount	Fair value	Classification

Financial assets
Cash and cash equivalents (Note 4.1)	29,038	29,038	12,435	12,435	(*)
Short-term investments (Note 4.2)	593,082	593,082	401,895	401,895	(*)
Trade accounts receivable (Note 5)	704,252	704,252	557,438	557,438	(**)
Loans receivable (Note 21.1)	44,972	44,972	33,416	33,416	(**)

Financial liabilities
Loans and financing (Note 12)	670,474	436,294	533,153	542,909	(**)
Debentures (Note 13)	264,325	294,487	197,525	278,727	(**)
Financial instrument – premium of debenture option (Note 20(i)(d))	6,125	6,125	-	-	(**)
Suppliers	124,392	124,392	96,832	96,832	(**)
Obligations assumed on assignment of receivables (Note 14)	24,192	24,192	40,361	40,361	(**)
Payables for purchase of properties and advances from customers (Note 17)	415,429	415,429	222,428	222,428	(**)
Loan payable (Note 21.1)	8,232	8,232	9,280	9,280	(**)

(*) Fair value through profit or loss

(**) Amortized cost

Risk of debt acceleration

As of December 31, 2020, the Company has loans and financing contracts with restrictive covenants related to cash generation, indebtedness ratios, capitalization, debt coverage, maintenance of shareholding position, and others. The breach of such obligations by the Company may give rise to the acceleration of its debts and/or acceleration of other debts of the Company, including due to the performance of any cross default or cross acceleration clauses, which may negatively impact the profit or loss of the Company and the value of its shares.

These restrictive covenants have been complied with by the Company and do not limit its ability to conduct its business as usual.

~~(iii) Capital stock management~~65

~~The~~Gafisa ~~explanations related~~S.A. toNotes ~~this note were not subject~~ to ~~material~~the ~~changes~~financial instatements--ContinuedDecember ~~relation~~31, to2020(Amounts ~~the disclosures~~ in ~~Note~~thousands ~~20(iii)~~of toBrazilian ~~the~~Reais, ~~financial~~except ~~statements~~ as ofotherwise ~~December 31, 2019.~~stated)

The Company included in its net debt structure: loans and financing, debentures, less cash and cash equivalents and short-term investments:

	Company		Consolidated
	09/30/2020	12/31/2019	09/30/2020	12/31/2019
Loans and financing (Note 12)	420,652	490,676	502,688	533,153
Debentures (Note 13)	152,727	197,525	242,810	197,525
( - ) Cash and cash equivalents and short-term investments (Notes 4.1 and 4.2)	(619,068)	(402,053)	(630,660)	(414,330)
Net debt	(45,689)	286,148	114,838	316,348
Equity	1,509,624	893,708	1,513,890	895,143

(A free translation of the original report in Portuguese as published in Brazil)

Gafisa S.A.

Notes to the quarterly financial information

September 30, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

20.

Financial instruments--Continued

(iii)

Capital stock management

The objective of the Company’s capital stock management is to guarantee the maintenance of a strong credit rating in institutions and an optimum capital ratio, in order to support the Company’s business and maximize value to shareholders.

The Company controls its capital structure by making adjustments and adapting to current economic conditions. In order to maintain its structure adjusted, the Company may pay dividends, return on capital to shareholders, take out new loans and issue debentures, among others.

There were no changes in objectives, policies or procedures during the years ended December 31, 2020 and 2019.

The Company included in its net debt structure: loans and financing, debentures, obligations assumed on assignment of receivables, and payables to venture partners less cash and cash equivalents and short-term investments):

	Company		Consolidated
	2020	2019	2020	2019

Loans and financing (Note 12)	400,793	490,676	670,474	533,153
Debentures (Note 13)	138,942	197,525	264,325	197,525
( - ) Cash and cash equivalents and short-term investments (Notes 4.1 and 4.2)	(413,907)	(402,053)	(622,120)	(414,330)
Net debt	125,828	286,148	312,679	316,348
Equity	1,562,377	893,708	1,558,388	895,143

(iv)

Sensitivity analysis

The ~~sensitivity~~ sensitivity analysis of financial instruments for the ~~period~~years ended ~~September~~December 3031, 2020 and 2019 describes the risks that may give rise to material changes in the Company’s profit or loss, as provided for by CVM, through Rule 475/08, in order to show a 10%, 25% and 50% increase/decrease in the risk variable considered.

As of ~~September 30~~December 31, 2020, besides the derivative instruments, the Company has the following financial instruments:.

Financial investments, loans and financing and debentures linked to the Interbank Deposit Certificate (CDI);

Loans and financing linked to the Referential Rate (TR) and CDI, and debentures linked to the CDI and Broad Consumer Price Index (IPCA);

Accounts receivable and payables for purchase of properties, linked to the National Civil Construction Index (INCC) and General Market Price Index (IGP-M).

For the sensitivity analysis in the ~~period~~year ended ~~September~~December 3031, 2020, the Company considered the interest rates of investments, loans and accounts receivable, the CDI rate at 32.5475%, TR at 0%, INCC at 58.3281%, IPCA at 34.1452% and IGP-M at 1423.4014%. The scenarios considered were as follows:

Gafisa S.A.

Notes to the financial statements--Continued

December 31, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

20.

Financial instruments–Continued

(iv)

Sensitivity analysis--Continued

Scenario I - Probable: 10% increase/decrease in the risk variables used for pricing

Scenario II - Possible: 25% increase/decrease in the risk variables used for pricing

Scenario ~~III~~ III - ~~Possible~~Remote: 50% increase/decrease in the risk variables used for pricing

The Company shows in the following chart the sensitivity to risks to which the Company is exposed, taking into account that the possible effects would impact the future results, based on the exposures shown as of December 31, ~~2019~~2020. The effects on equity are basically the same of the profit or loss ones.

		Scenario
		I	II	III	III	II	I
Transaction	Risk	Increase 10%	Increase 25%	Increase 50%	Decrease 50%	Decrease 25%	Decrease 10%
Financial investments	Increase/decrease of CDI	21,~~036~~088	52,~~089~~720	105,~~178~~439	(105,~~178~~439)	(52,~~089~~720)	(21,~~036~~088)
Loans and financing	Increase/decrease of CDI	(~~442~~861)	(12,~~105~~151)	(24,~~209~~303)	24,~~209~~303	12,~~105~~151	~~442~~861
Debentures	Increase/decrease of CDI	(~~193~~112)	(~~483~~280)	(~~966~~560)	~~966~~560	~~483~~280	~~193~~112
Net effect of CDI change		~~1,401~~115	~~3,501~~289	~~7,003~~576	(~~7,003~~576)	(~~3,501~~289)	(~~1,401~~115)
Loans and financing	Increase/decrease of TR	-	-	-	-	-	-
Net effect of TR change		-	-	-	-	-	-
Debentures	Increase/decrease of IPCA	(~~105~~129)	(~~262~~322)	(~~525~~645)	~~525~~645	~~262~~322	~~105~~129
Net effect of IPCA change		(~~105~~129)	(~~262~~322)	(~~525~~645)	~~525~~645	~~262~~322	~~105~~129
Accounts receivable	Increase/decrease of INCC	23,~~138~~759	59,~~344~~397	1018,~~688~~794	(1018,~~688~~794)	(59,~~344~~397)	(23,~~138~~759)
Payables for purchase of properties	Increase/decrease of INCC	(13,~~754~~364)	(48,~~385~~409)	(816,~~771~~818)	816,~~771~~818	48,~~385~~409	13,~~754~~364
Net effect of INCC change		~~384~~395	~~959~~988	1,~~917~~976	(1,~~917~~976)	(~~959~~988)	(~~384~~395)
Accounts receivable	Increase/decrease of IGP-M	24,~~616~~510	611,~~539~~275	1322,~~078~~550	(1322,~~078~~550)	(611,~~539~~275)	(24,~~616~~510)
Net effect of IGP-M change		24,~~616~~510	611,~~539~~275	1322,~~078~~550	(1322,~~078~~550)	(611,~~539~~275)	(24,~~616~~510)

~~(A free translation of the original report in Portuguese as published in Brazil)~~67

Gafisa S.A. Notes to the financial statements--ContinuedDecember 31, 2020(Amounts in thousands of Brazilian Reais, except as otherwise stated)

Notes to the quarterly financial information

September 30, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

21.

Related parties

21.1.

Balances with related parties

The transactions between the Company and related companies are made under conditions and prices established between the parties.

	Company		Consolidated
Current account	~~09/30/~~2020	~~12/31/~~2019	~~09/30/~~2020	~~12/31/~~2019
Assets
Current account:
Current account (a):
Total SPEs	~~353~~354	354	4756,~~376~~964	64,441
Subsidiaries	-	-	4151,~~979~~421	57,027
Jointly-controlled investees	~~320~~321	321	5,~~364~~510	7,381
Associates	33	33	33	33
Condominium, consortia and third-party works	13,600	13,162	13,601	13,165
Condominium, consortia (b) and third-party works (c)	14,668	13,162	14,668	13,165
Loan receivable (Note 20.ii.a)	112,665	33,416	41,070	33,416
Loan receivable (d) (Note 20.ii.a)	169,321	33,416	44,972	33,416
Dividends receivable	7,~~853~~998	9,872	-	-
	134,471	56,804	102,047	111,022
	192,341	56,804	116,604	111,022
Current	93147,~~400~~369	23,388	21,~~310~~102	77,606
Non-current	4144,~~071~~972	33,416	99115,~~737~~502	33,416
Liabilities
Current account:
Current account (a):
Total SPEs	(~~178~~275,~~379~~628)	(182,084)	(8490,~~306~~198)	(55,104)
Subsidiaries	(~~130~~223,~~980~~995)	(156,192)	(3638,~~908~~565)	(29,211)
Jointly-controlled investees	(4448,~~515~~749)	(23,228)	(4448,~~514~~749)	(23,229)
Associates	(2,884)	(2,664)	(2,884)	(2,664)
Loan payable (Note 20.ii.a)	(719,~~922~~633)	(9,280)	(78,~~922~~232)	(9,280)
	(186,301)	(191,364)	(92,228)	(64,384)
	(295,261)	(191,364)	(98,430)	(64,384)
Current	(~~186~~295,~~301~~261)	(191,364)	(9298,~~228~~430)	(64,384)
Non-current	-	-	-	-

(a) The ~~composition~~Company participates in the development of real estate ventures with other partners, ~~nature~~ directly or through related parties, based on the formation of condominiums and/or ~~conditions~~consortia. The management structure of these ventures and the ~~balances~~cash management are centralized in the lead partner of ~~loans~~the ~~receivable~~venture, which manages the construction schedule and ~~payable~~budgets. Thus, the lead partner ensures that the investments of the ~~Company~~necessary funds are made and allocated as ~~follows~~planned. ~~Loans~~The sources and use of resources of the venture are reflected in these balances, observing the respective interest of each investor, which are not subject to indexation or financial charges and do not have a fixed maturity ~~from~~date. ~~July 2020~~Such operations aim at simplifying business relations that demand the joint management of amounts reciprocally owed by the involved parties and, ~~are~~consequently, ~~tied~~the tocontrol over the ~~cash~~change ~~flows~~of amounts reciprocally provided which offset against each other at the time the current account is closed. The average term for the development and completion of the ~~related~~ventures in which the resources are invested is between 24 and 30 months. The Company receives a compensation for the management of these ventures.

	Company		Consolidated
	09/30/2020	12/31/2019	09/30/2020	12/31/2019	Nature	Interest rate
UPCON	71,595	-	-	-	Working capital	n/a
Lagunas - Tembok Planej. e Desenv. Imob. Ltda.	7,662	6,272	7,662	6,272	Construction	12% p.a. + IGPM
Manhattan Residencial I - OAS Empreendimentos	399	392	399	392	Construction	10% p.a. + TR
Target Offices & Mall- SPE Yogo Part. Emp. Im. e Comasa Const.	33,009	26,752	33,009	26,752	Construction	12% p.a. + IGPM
Total receivable	112,665	33,416	41,070	33,416
Dubai Residencial - Franere, Com. Const. e Imob. Ltda.	1,189	1,025	1,189	1,025	Construction	6% p.a.
Parque Árvores - Franere, Com. Const. e Imob. Ltda.	3,647	5,372	3,647	5,372	Construction	6% p.a.
Parque Águas - Franere, Com. Const. e Imob. Ltda.	3,086	2,883	3,086	2,883	Construction	6% p.a.
Total payable	7,922	9,280	7,922	9,280

(b)

Refers to transactions between the lead partner of consortium, partners, and condominiums.

In(c) ~~the~~Refers ~~period ended September 30, 2020 the recognized finance income from interest on loans amounted~~ to ~~R$7,246~~operations ~~(R$2,731~~ in ~~2018) in the Company~~third-party’s ~~and~~ ~~Consolidated statement (Note 24)~~works.

(d) The ~~information regarding~~loans ~~Management~~of ~~transactions~~the Company with its subsidiaries, shown below, are made to provide subsidiaries with cash to carry out their respective activities, subject to the respective agreed-upon financial charges. The businesses and ~~compensation~~operations iswith ~~described~~related parties are carried out strictly at arm’s length, in ~~Note~~order 25to protect the interests of the both parties involved in the business.

The ~~other explanations~~ ~~related~~composition, tonature ~~this~~and ~~note~~conditions ~~were~~of ~~not~~the ~~subject~~balances toof ~~material~~loans ~~changes~~receivable inand ~~relation~~payable toof the ~~disclosures~~Company inare ~~Note~~as 21follows. Loans have maturity from January 2021 and are tied to the ~~financial~~cash ~~statements as~~flows of ~~December~~the ~~31,~~related ~~2019~~ventures.

(A free translation of the original report in Portuguese as published in Brazil)

	Company		Consolidated
	2020	2019	2020	2019	Nature	Interest rate


Gafisa Propriedades S.A. and subsidiaries	124,349	-	-	-	Working capital	n/a
Lagunas - Tembok Planej. e Desenv. Imob. Ltda.	6,624	6,272	6,624	6,272	Construction	12% p.a. + IGPM
Manhattan Residencial I - OAS Empreendimentos	407	392	407	392	Construction	10% p.a. + TR
Target Offices & Mall- SPE Yogo Part. Emp. Im. e Comasa Const.	37,941	26,752	37,941	26,752	Construction	12% p.a. + IGPM
Total receivable	169,321	33,416	44,972	33,416

Gafisa Propriedades S.A. and subsidiaries	11,401	-	-	-	Working capital	n/a
Dubai Residencial - Franere, Com. Const. e Imob. Ltda.	1,273	1,025	1,273	1,025	Construction	6% p.a.
Parque Árvores - Franere, Com. Const. e Imob. Ltda.	3,724	5,372	3,724	5,372	Construction	6% p.a.
Parque Águas - Franere, Com. Const. e Imob. Ltda.	3,235	2,883	3,235	2,883	Construction	6% p.a.
Total payable	19,633	9,280	8,232	9,280

~~Gafisa S.A.~~ 68

Gafisa S.A. Notes to the ~~quarterly~~ financial ~~information~~statements--ContinuedDecember 31, 2020(Amounts in thousands of Brazilian Reais, except as otherwise stated)

September 30, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

21.

Related parties--Continued

21.1.

Balances with related parties--Continued

In the year ended December 31, 2020 the recognized finance income from interest on loans amounted to R$12,160 (R$4,195 in 2019) in the Company’s and Consolidated statement (Note 24).

The information regarding Management transactions and compensation is described in Note 25.

21.2.

Endorsements, guarantees and sureties

The financial transactions of the subsidiaries are guaranteed by the endorsement or surety in proportion to the interest of the Company in the capital stock of such companies, in the amount of R$~~254~~323,~~431~~125 as of ~~September~~December 3031, 2020 (R$132,336 in 2019).

22.

Net operating revenue

	Company		Consolidated
	09/30/2020	09/30/2019	09/30/2020	09/30/2019
	2020	2019	2020	2019
Gross operating revenue
Real estate development, sale, barter transactions and construction services	~~250~~467,~~834~~528	~~240~~332,~~277~~792	~~361~~974,~~788~~787	~~290~~390,~~417~~032
(Recognition) Reversal of allowance for expected losses and cancelled contracts (Note 5)	(15,~~347~~822)	1761,~~116~~460	(3439,~~151~~774)	1747,~~116~~257
Taxes on sale of real estate and services	(2039,~~068~~043)	(2133,~~728~~663)	(2350,~~502~~968)	(2336,~~241~~824)
Net operating revenue	~~215~~412,~~419~~663	~~235~~360,~~665~~589	~~304~~884,~~135~~045	~~284~~400,~~292~~465

Gafisa S.A.

Notes to the financial statements--Continued

December 31, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

23.

Costs and expenses by nature

These are represented by the following:

	Company		Consolidated
	09/30/2020	09/30/2019	09/30/2020	09/30/2019
	2020	2019	2020	2019
Cost of real estate development and sales:
Construction cost	(72277,~~062~~555)	(~~106~~169,~~354~~355)	(~~132~~619,~~560~~791)	(~~128~~199,~~487~~538)
Land cost	(5310,~~565~~255)	(2862,~~582~~328)	(6128,~~170~~798)	(3667,~~946~~082)
Development cost	(714,~~169~~175)	(45,~~260~~526)	(918,~~197~~038)	(56,~~627~~227)
Capitalized financial charges (Note 12)	(16,710)	(21,757)	(25,307)	(30,356)
Provision for loss on realization of properties for sale (Note 6 and 8)	68,215	27,026	69,282	27,079
Maintenance/warranty	(8,313)	(1,661)	(8,313)	(1,354)
Capitalized financial charges (Note 12)	(62,195)	(29,891)	(79,719)	(38,275)
Total cost of real estate development and sales	(157,819)	(162,614)	(236,547)	(202,770)
Maintenance/warranty	(25,768)	1,360	(25,760)	1,359
Selling expenses:
Total cost of real estate development and sales	(321,733)	(238,714)	(702,824)	(282,684)
Product marketing	(2,615)	(3,134)	(4,337)	(3,794)
Selling expenses:
Brokerage and sale commission	(1,734)	(2,420)	(2,821)	(3,293)
Product marketing	(4,431)	(3,223)	(11,222)	(3,950)
Customer Relationship Management (CRM) and corporate marketing	(1,809)	(3,921)	(2,871)	(4,499)
Brokerage and sale commission	(4,785)	(2,893)	(8,356)	(4,331)
Other	-	(110)	(720)	(97)
Customer Relationship Management (CRM) and corporate marketing	(2,168)	(5,790)	(8,337)	(6,473)
Total selling expenses	(6,158)	(9,585)	(10,749)	(11,683)
Other	(77)	(114)	(1,077)	(135)
General and administrative expenses:
Total selling expenses	(11,461)	(12,020)	(28,992)	(14,889)
Salaries and payroll charges	(16,515)	(10,060)	(16,515)	(12,150)
General and administrative expenses:
Employee benefits	(2,852)	(1,166)	(2,852)	(1,409)
Salaries and payroll charges	(23,507)	(18,143)	(23,507)	(20,650)
Travel and utilities	(395)	(114)	(395)	(138)
Employee benefits	(3,784)	(1,677)	(3,784)	(1,982)
Services	(20,586)	(8,393)	(20,586)	(10,138)
Travel and utilities	(643)	(185)	(643)	(218)
Rents and condominium fees	(2,181)	(2,676)	(2,181)	(3,231)
Services	(29,077)	(13,564)	(29,077)	(16,035)
IT	(2,836)	(5,139)	(2,836)	(6,207)
Rents and condominium fees	(3,558)	(3,217)	(3,558)	(3,803)
Stock option plan (Note 18.2)	362	2,698	362	2,698
IT	(4,123)	(6,556)	(4,123)	(7,751)
Reserve for profit sharing (Note 25.iii)	(6,194)	(500)	(6,194)	(500)
Stock option plan (Note 18.3)	347	2,366	347	2,366
Other	61	(786)	61	(843)
Reversal (Expense) of reserve for profit sharing (Note 25.iii)	(16,194)	(5,000)	(16,194)	(5,000)
Total general and administrative expenses	(51,136)	(26,136)	(51,136)	(31,918)
Other	1,767	(978)	(1,014)	(1,060)
Other income (expenses), net
Total general and administrative expenses	(78,772)	(46,954)	(81,553)	(54,133)
Expenses with lawsuits (Note 16)	(51,127)	(45,378)	(52,708)	(45,769)
Other income (expenses), net
Other	(5,108)	126	(6,509)	70
Expenses with lawsuits (Note 16)	(64,302)	(9,990)	(56,148)	(8,300)
Total other income (expenses), net	(56,235)	(45,252)	(59,217)	(45,699)
Result of the transaction of acquisition of GDU Loteamentos	-	66,500	-	66,500
Gain from bargain purchase	-	16,592	-	16,592
Other (a)	11,828	6,381	(307)	66,979
Total other income (expenses), net	(52,474)	79,483	(56,455)	141,771

(Aa) ~~free~~Amount ~~translation~~ of R$5,777 in the ~~original~~Company’s ~~report~~statements and R$66,391 in ~~Portuguese~~the asconsolidated ~~published~~statements inrelated to the outcome of the arbitration decision related to venture construction contracts with partners, which was awarded on November 12, 2019 by the Arbitration Court, managed by the Center for Arbitration and Mediation of the Chamber of Commerce Brazil) – Canada.

Gafisa S.A.

Notes to the quarterly financial information

September 30, 2020

(Amounts in thousands of Brazilian Reais, except as otherwise stated)

24.

Finance income (cost)

	Company		Consolidated
	09/30/2020	09/30/2019	09/30/2020	09/30/2019
	2020	2019	2020	2019
Finance income
Income from financial investments	139,~~864~~440	712,~~613~~601	1410,~~006~~178	712,649
Finance income on loan (Note 21.1)	712,~~246~~160	24,~~976~~195	712,~~246~~160	24,~~976~~195
Other finance income	~~512~~4,038	~~873~~(165)	16,~~326~~199	~~1,338~~362
Subtotal finance income	2125,~~622~~638	1116,~~462~~631	2228,~~578~~537	1117,~~963~~206
Finance cost
Finance costs
Interest on funding, net of capitalization (Note 12)	(4661,~~415~~262)	(4867,~~428~~051)	(4359,~~001~~600)	(4259,~~976~~379)
Amortization of debenture cost	(12,~~991~~609)	(2,~~116~~857)	(12,~~991~~609)	(2,~~116~~857)
Banking expenses	(613,~~691~~213)	(57,~~871~~480)	(714,~~321~~042)	(78,~~212~~931)
Offered discount and other finance expenses	(7,063)	(2,232)	(9,064)	(1,635)
Derivative transactions (Note 20.i.b)	(6,125)	-	(6,125)	-
Subtotal finance cost	(62,160)	(58,647)	(61,377)	(53,939)
Offered discount and other finance cost (a)	(10,269)	(5,532)	(19,156)	(5,663)
Total finance income (cost), net	(40,538)	(47,185)	(38,799)	(41,976)
Subtotal finance cost	(93,478)	(82,920)	(101,532)	(76,830)
Total finance income (cost), net	(67,840)	(66,289)	(72,995)	(59,624)

(a)

Of this amount, R$6,578 refer to the loss incurred on the sale of Tecnisa’s shares (TCSA3), and mark to market as of December 31, 2020. On February 3, 2021, the Company ended the totality of Tecnisa's shares that it held.

Filing Compare · Gafisa S.A.