6-K 1 s001008x1_6k.htm 6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

under the Securities Exchange Act of 1934

For the month of August, 2015

Commission File Number 001-35052

Adecoagro S.A.

(Translation of registrant’s name into English)

13-15 Avenue de la Liberté

L-1931 Luxembourg

R.C.S. Luxembourg B 153 681

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of 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): ¨

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): ¨

Indicate by check mark whether the registrant by furnishing the information contained in this Form 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): 82- .

UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS AS OF AND FOR THE SIX
MONTH PERIOD ENDED JUNE 30, 2015

Adecoagro S.A. (the “Company” or “Adecoagro”) is filing this report on Form 6-K for the purpose of providing a copy of the Company’s unaudited condensed consolidated financial statements as of and for the six month period ended June 30, 2015 (the “Consolidated Financial Statements”). This Form 6-K is incorporated by reference into the Company’s Registration Statement on Form F-3 filed on December 6, 2013 (File No. 333-191325) (the “Registration Statement”). The Consolidated Financial Statements are presented in U.S. Dollars and prepared in accordance with International Financial Reporting Standards.

The attachment contains forward-looking statements. The registrant desires to qualify for the “safe-harbor” provisions of the Private Securities Litigation Reform Act of 1995, and consequently is hereby filing cautionary statements identifying important factors that could cause the registrant’s actual results to differ materially from those set forth in the attachment.

The registrant’s forward-looking statements are based on the registrant’s current expectations, assumptions, estimates and projections about the registrant and its industry. These forward-looking statements can be identified by words or phrases such as “anticipate,” “believe,” “continue,” “estimate,” “expect,” “intend,” “is/are likely to,” “may,” “plan,” “should,” “would,” or other similar expressions.

The forward-looking statements included in the attached relate to, among others: (i) the registrant’s business prospects and future results of operations; (ii) weather and other natural phenomena; (iii) developments in, or changes to, the laws, regulations and governmental policies governing the registrant’s business, including limitations on ownership of farmland by foreign entities in certain jurisdictions in which the registrant operate, environmental laws and regulations; (iv) the implementation of the registrant’s business strategy, including its development of the Ivinhema mill and other current projects; (v) the registrant’s plans relating to acquisitions, joint ventures, strategic alliances or divestitures; (vi) the implementation of the registrant’s financing strategy and capital expenditure plan; (vii) the maintenance of the registrant’s relationships with customers; (viii) the competitive nature of the industries in which the registrant operates; (ix) the cost and availability of financing; (x) future demand for the commodities the registrant produces; (xi) international prices for commodities; (xii) the condition of the registrant’s land holdings; (xiii) the development of the logistics and infrastructure for transportation of the registrant’s products in the countries where it operates; (xiv) the performance of the South American and world economies; and (xv) the relative value of the Brazilian Real, the Argentine Peso, and the Uruguayan Peso compared to other currencies; as well as other risks included in the registrant’s other filings and submissions with the United States Securities and Exchange Commission.

These forward-looking statements involve various risks and uncertainties. Although the registrant believes that its expectations expressed in these forward-looking statements are reasonable, its expectations may turn out to be incorrect. The registrant’s actual results could be materially different from its expectations. In light of the risks and uncertainties described above, the estimates and forward-looking statements discussed in the attached might not occur, and the registrant’s future results and its performance may differ materially from those expressed in these forward-looking statements due to, inclusive, but not limited to, the factors mentioned above. Because of these uncertainties, you should not make any investment decision based on these estimates and forward-looking statements.

The forward-looking statements made in the attached relate only to events or information as of the date on which the statements are made in the attached. The registrant undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date on which the statements are made or to reflect the occurrence of unanticipated events.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	Adecoagro S.A.

	By		/s/ Carlos A. Boero Hughes
	Name:		Carlos A. Boero Hughes
	Title:		Chief Financial Officer and Chief Accounting Officer

Date: August 13, 2015

Adecoagro S.A.

Condensed Consolidated Interim Financial Statements as of June 30, 2015 and for the six-month periods ended June 30, 2015 and 2014

Legal information

Denomination: Adecoagro S.A.

Legal address: Vertigo Naos Building, 6, Rue Eugène Ruppert, L-2453, Luxembourg

Company activity: Agricultural and agro-industrial
Date of registration: June 11, 2010
Expiration of company charter: No term defined
Number of register (RCS Luxembourg): B153.681
Capital stock: 122,381,815 common shares (of which 1,294,623 are treasury shares)

Majority shareholder: Quantum Partners LP
Legal address: 1300 Thames St. 5^th FL, Baltimore MD 21231-3495, United States of America
Parent company activity: Investing
Capital stock: 25,910,004 common shares

F - 2

Adecoagro S.A.
Condensed Consolidated Interim Statements of Financial Position
as of June 30, 2015 and December 31, 2014
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)


		June 30,		December 31,
	Note	2015		2014
		(unaudited)
ASSETS
Non-Current Assets
Property, plant and equipment	6	713,824		776,905
Investment property	7	6,281		6,675
Intangible assets	8	22,033		23,778
Biological assets	9	290,843		286,044
Investments in joint ventures		1,200		2,752
Deferred income tax assets	19	44,136		45,597
Trade and other receivables	11	41,789		50,590
Other assets		506		587
Total Non-Current Assets		1,120,612		1,192,928
Current Assets
Biological assets	9	20,020		55,188
Inventories	12	148,714		104,919
Trade and other receivables	11	154,955		164,526
Derivative financial instruments	10	6,113		7,966
Cash and cash equivalents	13	163,466		113,795
Total Current Assets		493,268		446,394
TOTAL ASSETS		1,613,880		1,639,322
SHAREHOLDERS EQUITY
Capital and reserves attributable to equity holders of the parent
Share capital	15	183,573		183,573
Share premium	15	937,525		933,044
Cumulative translation adjustment		(467,250	)	(395,804	)
Equity-settled compensation		14,397		16,735
Cash flow hedge		(72,524	)	(43,064	)
Reserve from the sale of non-controlling interests in subsidiaries		25,508		25,508
Treasury shares		(1,943	)	(2,840	)
Retained earnings		60,020		45,644
Equity attributable to equity holders of the parent		679,306		762,796
Non-controlling interest		7,865		7,589
TOTAL SHAREHOLDERS EQUITY		687,171		770,385
LIABILITIES
Non-Current Liabilities
Trade and other payables	17	1,847		2,391
Borrowings	18	554,677		491,324
Deferred income tax liabilities	19	34,987		39,635
Payroll and social security liabilities	20	1,376		1,278
Derivatives financial instruments	10	-		39
Provisions for other liabilities	21	2,217		2,013
Total Non-Current Liabilities		595,104		536,680
Current Liabilities
Trade and other payables	17	49,075		83,100
Current income tax liabilities		1,353		76
Payroll and social security liabilities	20	26,408		27,315
Borrowings	18	230,371		207,182
Derivative financial instruments	10	23,683		13,860
Provisions for other liabilities	21	715		724
Total Current Liabilities		331,605		332,257
TOTAL LIABILITIES		926,709		868,937
TOTAL SHAREHOLDERS EQUITY AND LIABILITIES		1,613,880		1,639,322

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

F - 3

Adecoagro S.A.
Condensed Consolidated Interim Statements of Income
for the six-month periods ended June 30, 2015 and 2014
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

			Six-months ended June 30						Three-months ended June 30
	Note		2015			2014			2015			2014
			(unaudited)
Sales of manufactured products and services rendered		22		198,454			189,737			113,974			120,926
Cost of manufactured products sold and services rendered		23		(132,348	)		(126,095	)		(72,114	)		(79,755	)
Gross Profit from Manufacturing Activities				66,106			63,642			41,860			41,171
Sales of agricultural produce and biological assets		22		86,690			113,422			56,952			83,104
Cost of agricultural produce sold and direct agricultural selling expenses		23		(86,690	)		(113,422	)		(56,952	)		(83,104	)
Initial recognition and changes in fair value of biological assets and agricultural produce		9		33,948			39,860			10,282			915
Changes in net realizable value of agricultural produce after harvest				3,898			(1,704	)		4,060			(2,565	)
Gross Profit/(Loss) from Agricultural Activities				37,846			38,156			14,342			(1,650	)
Margin on Manufacturing and Agricultural Activities Before Operating Expenses				103,952			101,798			56,202			39,521
General and administrative expenses		23		(23,485	)		(23,634	)		(11,467	)		(12,854	)
Selling expenses		23		(31,032	)		(31,393	)		(17,777	)		(19,757	)
Other operating income / (expense), net		25		15,607			(2,384	)		(6,018	)		11,186
Share of loss of joint ventures				(1,470	)		(231	)		(592	)		(6	)
Profit from Operations Before Financing and Taxation				63,572			44,156			20,348			18,090
Finance income		26		5,670			4,301			2,379			2,136
Finance costs		26		(44,604	)		(39,180	)		(16,821	)		(20,842	)

Financial results, net		26		(38,934	)		(34,879	)		(14,442	)		(18,706	)
Profit / (Loss) Before Income Tax				24,638			9,277			5,906			(616	)
Income tax (expense)/ benefit		19		(9,542	)		(5,229	)		(4,571	)		2,068
Profit for the Period				15,096			4,048			1,335			1,452

Attributable to:
Equity holders of the parent				14,272			4,069			1,445			1,479
Non-controlling interest				824			(21	)		(110	)		(27	)

Income per share Attributable to the equity holders of the parent during the period:
Basic				0.118			0.034			0.012			0.012
Diluted				0.117			0.033			0.012			0.012

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

F - 4

Adecoagro S.A.
Condensed Consolidated Interim Statements of Comprehensive Income
for the six-month periods ended June 30, 2015 and 2014
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)


	Six-months ended June 30						Three-months ended June 30
	2015			2014			2015			2014
	(unaudited)

Profit for the Period		15,096			4,048			1,335			1,452
Other comprehensive income:
Exchange differences on translating foreign operations		(71,994	)		(2,792	)		6,103			10,993
Cash flow hedge		(29,460	)		3,393			12,432			7,775
Other comprehensive loss for the period		(101,454	)		601			18,535			18,768
Total comprehensive loss income for the period		(86,358	)		4,649			19,870			20,220

Attributable to:
Equity holders of the parent		(86,634	)		4,731			20,280			20,296
Non-controlling interest		276			(82	)		(410	)		(76	)

Total comprehensive income attributable to owners of the parent arising from:
Continuing operations		(86,634	)		4,731			20,280			20,296

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

F - 5

Adecoagro S.A.
Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity
for the six-month periods ended June 30, 2015 and 2014
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)


	Attributable to equity holders of the parent

	Share Capital (Note 15)		Share Premium			Cumulative Translation Adjustment			Equity-settled Compensation			Cash flow hedge *()**			Other reserves			Treasury shares			Reserve from the sale of non- controlling interests in subsidiaries		Retained Earnings		Subtotal			Non- Controlling Interest			Total Shareholders’ Equity

Balance at January 1, 2014		183,573		939,072			(311,807	)		17,352			(15,782	)		(161	)		(961	)		-		43,018		854,304			45			854,349

Profit for the period		-		-			-			-			-			-			-			-		4,069		4,069			(21	)		4,048

Other comprehensive income:
- Items that may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations

Cash flow hedge (*)		-		-			(2,736	)		-			-			-			-			-		-		(2,736	)		(56	)		(2,792	)
Other comprehensive income for the period		-		-			-			-			3,398			-			-			-		-		3,398			(5	)		3,393
Total comprehensive income for the period		-		-			(2,736	)		-			3,398			-			-			-		4,069		4,731			(82	)		4,649

Employee share options (Note 15)

- Value of employee services		-		-			-			6			-			-			-			-		-		6			-			6

- Exercised		-		649			-			(218	)		-			-			148			-		-		579			-			579

- Forfeited		-		-			-			(108	)		-			-			-			-		108		-			-			-

Restricted shares (Note 15):

- Value of employee services		-		-			-			1,701			-			-			-			-		-		1,701			-			1,701

- Vested		-		3,444			-			(4,053	)		-			160			446			-		-		(3	)		-			(3	)

- Forfeited		-		-			-			-			-			1			(1	)		-		-		-			-			-

Purchase of own shares (Note 15)		-		(10,424	)		-			-			-			-			(2,534	)		-		-		(12,958	)		-			(12,958	)
Sale of non-controlling interests in subsidiaries (Note 14)		-		-			15,825			-			-			-			-			25,575		-		41,400			8,009			49,409
Balance at June 30, 2014 (unaudited)		183,573		932,741			(298,718	)		14,680			(12,384	)		-			(2,902	)		25,575		47,195		889,760			7,972			897,732

(*) Net of 1,557 of Income Tax

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

F - 6

Adecoagro S.A.
Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity
for the six-month periods ended June 30, 2015 and 2014 (continued)
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)


	Attributable to equity holders of the parent
	Share Capital (Note 15)		Share Premium		Cumulative Translation Adjustment			Equity-settled Compensation			Cash flow hedge			Treasury shares			Reserve from the sale of non- controlling interests in subsidiaries		Retained Earnings		Subtotal			Non- Controlling Interest			Total Shareholders’ Equity

Balance at January 1, 2015		183,573		933,044		(395,804	)		16,735			(43,064	)		(2,840	)		25,508		45,644		762,796			7,589			770,385

Profit for the period		-		-		-			-			-			-			-		14,272		14,272			824			15,096

Other comprehensive income:
- Items that may be reclassified subsequently to profit or loss:		-		-		-			-			-			-			-		-		-			-			-
Exchange differences on translating foreign operations		-		-		(71,446	)		-			-			-			-		-		(71,446	)		(548	)		(71,994	)

Cash flow hedge (*)		-		-		-			-			(29,460	)		-			-		-		(29,460	)		-			(29,460	)
Other comprehensive income for the period		-		-		(71,446	)		-			(29,460	)		-			-		-		(100,906	)		(548	)		(101,454	)
Total comprehensive income for the period		-		-		(71,446	)		-			(29,460	)		-			-		14,272		(86,634	)		276			(86,358	)

Employee share options (Note 15)

- Value of employee services		-		-		-			-			-			-			-		-		-			-			-

- Exercised		-		1,378		-			(468	)		-			249			-		-		1,159			-			1,159

- Forfeited		-		-		-			(104	)		-			-			-		104		-			-			-

Restricted shares (Note 15):

- Value of employee services		-		-		-			1,985			-			-			-		-		1,985			-			1,985

- Vested		-		3,103		-			(3,751	)		-			648			-		-		-			-			-

- Forfeited		-		-		-			-			-			-			-		-		-			-			-
Balance at June 30, 2015 (unaudited)		183,573		937,525		(467,250	)		14,397			(72,524	)		(1,943	)		25,508		60,020		679,306			7,865			687,171

(*) Net of 15,296 of Income Tax.

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

F - 7

Adecoagro S.A.

Condensed Consolidated Interim Statements of Cash Flows

for the six-month periods ended June 30, 2015 and 2014

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)


	Note		June 30, 2015			June 30, 2014
				(unaudited)
Cash flows from operating activities:

Profit for the period				15,096			4,048
Adjustments for:
Income tax expense		19		9,542			5,229
Depreciation		23		29,674			34,273
Amortization		23		295			192
Gain from of disposal of other property items		25		(880	)		(606	)
Equity settled share-based compensation granted		24		1,985			1,707
(Gain)/loss from derivative financial instruments and forwards		25, 26		(15,306	)		2,620
Interest and other expense, net		26		20,640			25,768
Initial recognition and changes in fair value of non harvested biological assets (unrealized)				(24,728	)		(11,199	)
Changes in net realizable value of agricultural produce after harvest (unrealized)				(1,080	)		2,305
Provision and allowances				860			42
Share of loss from joint venture				1,470			231
Foreign exchange gains, net		26		9,653			3,268
Cash flow hedge – transfer from equity		26		7,754			4,609
Subtotal				54,976			72,487
Changes in operating assets and liabilities:
Decrease / (increase) in trade and other receivables				7,426			(23,700	)
(Increase) in inventories				(52,610	)		(49,251	)
Decrease in biological assets				37,271			45,059
Decrease in other assets				12			10
Decrease /(increase) in derivative financial				25,805			(8,107	)
(Decrease) in trade and other payables				(26,962	)		(13,583	)
Increase in payroll and social security liabilities				1,964			3,721
(Decrease) / increase in provisions for other liabilities				(241	)		191
Net cash generated in operating activities before interest and taxes paid				47,641			26,827
Income tax paid				(152	)		(268	)
Net cash generated from operating activities				47,489			26,559

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

F -8

Adecoagro S.A.

Condensed Consolidated Interim Statements of Cash Flows

for the six-month periods ended June 30, 2015 and 2014 (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)


	Note		June 30, 2015			June 30, 2014
				(unaudited)
Cash flows from investing activities:

Purchases of property, plant and equipment				(69,899	)		(113,081	)
Purchases of intangible assets		8		(811	)		(658	)
Purchase of cattle and non-current biological assets planting cost				(25,850	)		(54,402	)
Interest received		26		4,906			3,393
Investments in joint ventures				-			(1,372	)
Proceeds from sale of property, plant and equipment				424			745
Proceeds from disposal of subsidiaries				-			1,003
Loans to joint venture				(7,912	)		-

Net cash used in investing activities				(99,142	)		(166,372	)

Cash flows from financing activities:
Proceeds from equity settled share-based compensation exercised				1,177			576
Proceeds from long-term borrowings				166,874			159,104
Payments of long-term borrowings				(48,928	)		(59,539	)
Net proceeds from the sale of minority interest in subsidiaries				-			49,414
Proceeds from short-term borrowings				37,378			42,374
Payment of short-term borrowings				(19,689	)		(71,174	)
Interest paid				(20,256	)		(25,182	)
Purchase of own shares				-			(12,992	)
Net cash generated from financing activities				116,556			82,581
Net increase / (decrease) in cash and cash equivalents				64,903			(57,232	)
Cash and cash equivalents at beginning of period				113,795			232,147
Effect of exchange rate changes on cash and cash equivalents				(15,232	)		24,412

Cash and cash equivalents at end of period				163,466			199,327

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

F - 9

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

General information

Adecoagro S.A. (the “Company” or “Adecoagro”) is the Group’s ultimate parent company and is a société anonyme (stock corporation) organized under the laws of the Grand Duchy of Luxembourg. Adecoagro is a holding company primarily engaged through its operating subsidiaries in agricultural and agro-industrial activities. The Company and its operating subsidiaries are collectively referred to hereinafter as the “Group”. These activities are carried out through three major lines of business, namely, Farming; Sugar, Ethanol and Energy and Land Transformation. Farming is further comprised of three reportable segments, which are described in detail in Note 5 to these condensed consolidated interim financial statements.

Adecoagro is a public company listed in the New York Stock Exchange as a foreign registered company under the symbol of AGRO.

These condensed consolidated interim financial statements have been approved for issue by the Board of Directors on August 11, 2015.

On March 27, 2015, Adecoagro commenced a series of transactions for the purpose of transferring the domicile of Adecoagro LP to Luxembourg. In connection with the Adecoagro LP redomiciliation, Adecoagro merged IFH LP into Adecoagro LP with Adecoagro LP as the surviving entity. In connection with this merger, all of the assets and liabilities of IFH L.P. vested in Adecoagro LP, Ona Ltd became its general partner and Toba Ltd became a wholly owned subsidiary of Adecoagro LP. In connection with the transactions completed on March 27, 2015, Ona Ltd. assigned its general partnership interest in Adecoagro LP to Adecoagro GP S.a.r.l., a societe responsibilitie limitee organized under the laws of Luxembourg, on April 1, 2015. Also on April 1, 2015, Adecoagro completed the redomiciliation of Adecoagro LP out of Delaware to Luxembourg and Adecoagro LP, without dissolution or liquidation, continued its corporate existence as Adecoagro LP S.C.S., a societe en commandite simple organized under Luxembourg law, effective April 2, 2015. Since that date the affairs of Adecoagro LP S.C.S. have been governed by its by-laws and Luxembourg law. This operation had no accounting impact.

Basis of preparation and presentation

The information presented in the accompanying condensed consolidated interim financial statements (“interim financial statements”) as of June 30, 2015 and for the six-month periods ended June 30, 2015 and 2014 is unaudited and in the opinion of management reflect all adjustments necessary to present fairly the financial position of the Group as of June 30, 2015, results of operations and cash flows for the six-month periods ended June 30, 2015 and 2014. All such adjustments are of a normal recurring nature. In preparing these accompanying interim financial statements, management has made certain estimates and assumptions that affect reported amounts in the financial statements and disclosures of contingencies. Actual results may differ from those estimates. The results for interim periods are not necessarily indicative of annual results.

These interim financial statements have been prepared in accordance with IAS 34, ‘Interim financial reporting’ and they should be read in conjunction with the annual financial statements for the year ended 31 December 2014, which have been prepared in accordance with IFRSs.

The accounting policies adopted in the preparation of the interim financial statements are consistent with those followed in the preparation of the Group’s annual consolidated financial statements for the year ended December 31, 2014.

A complete list of standards, amendments and interpretations to existing standards published but not yet effective for the Group is described in Note 2.1 to the annual financial statements. None of those standards have a material impact on the information to be presented in the financial statements.

During the six months ended June 30, 2015, the IASB did not publish new standards that would have a material impact on the Group when they become effective.

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

F -10

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

Basis of preparation and presentation (continued)

Seasonality of operations

The Group’s business activities are inherently seasonal. The Group generally harvest and sell its grains (corn, soybean, rice and sunflower) between February and June, with the exception of wheat, which is harvested from December to January. Coffee and cotton are different in that while both are typically harvested from June to August, they require a conditioning process which takes about two to three months. Sales in other business segments, such as in Dairy business segments, tend to be more stable. However, the sale of milk is generally higher during the fourth quarter, when the weather is warmer and pasture conditions are more favorable. The sugarcane harvesting period typically begins April/May and ends in November/December. This creates fluctuations in sugar and ethanol inventory, usually peaking in December to cover sales between crop harvests (i.e., January through April). As a result of the above factors, there may be significant variations in the results of operations from one quarter to another, as planting activities may be more concentrated in one quarter whereas harvesting activities may be more concentrated in another quarter. In addition, quarterly results may vary as a result of the effects of fluctuations in commodities prices, production yields and costs on the determination of initial recognition and changes in fair value of biological assets and agricultural produce.

Financial risk management

Risk management principles and processes

The Group continues to be exposed to several risks arising from financial instruments including price risk, exchange rate risk, interest rate risk, liquidity risk and credit risk. A thorough explanation of the Group’s risks and the Group’s approach to the identification, assessment and mitigation of risks is included in Note 3 to the annual financial statements. There have been no changes to the Group’s exposure and risk management principles and processes since December 31, 2014 and refers readers to the annual financial statements for information.

However, the Group considers that the following tables below provide useful information to understand the Group’s interim results for the six month period ended June 30, 2015. These disclosures do not appear in any particular order of potential materiality or probability of occurrence.

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

F -11

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

3.	Financial risk management (continued)

● Exchange rate risk

The following tables show the Group’s net monetary position broken down by various currencies for each functional currency in which the Group operates at June 30, 2015. All amounts are shown in US dollars.

	June 30, 2015
	(unaudited)
	Functional currency
Net monetary position	Argentine			Brazilian			Uruguayan
(Liability)/ Asset	Peso			Reais			Peso			US Dollar		Total
Argentine Peso		(15,289	)		-			-			-		(15,289	)
Brazilian Reais		-			(253,942	)		-			-		(253,942	)
US Dollar		(72,910	)		(364,854	)		23,745			84,014		(330,005	)
Uruguayan Peso		-			-			(252	)		-		(252	)
Total		(88,199	)		(618,796	)		23,493			84,014		(599,488	)

The Group’s analysis shown on the tables below is carried out based on the exposure of each functional currency subsidiary against the US dollar. The Group estimated that, other factors being constant, a 10% appreciation of the US dollar against the respective functional currencies for the period ended June 30, 2015 would have increased the Group’s Profit Before Income Tax for the period. A 10% depreciation of the US dollar against the functional currencies would have an equal and opposite effect on the income statement. A portion of this effect would be recognized as other comprehensive income since a portion of the Company’s borrowings was used as cash flow hedge of the foreign exchange rate risk of a portion of its highly probable future sales in US dollars (see Hedge Accounting - Cash Flow Hedge below for details).

	June 30, 2015
	(unaudited)
	Functional currency
	Argentine			Brazilian			Uruguayan
Net monetary position	Peso			Reais			Peso		US Dollar		Total
Argentine Peso		-			-			-		-		-
Brazilian Reais		-			-			-		-		-
US Dollar		(7,291	)		(36,485	)		2,374		-		(41,402	)
Uruguayan Peso		-			-			-		-		-
(Decrease) or increase in Profit Before Income Tax		(7,291	)		(36,485	)		2,374		-		(41,402	)

Hedge Accounting - Cash Flow Hedge

Effective July 1, 2013, the Group formally documented and designated cash flow hedging relationships to hedge the foreign exchange rate risk of a portion of its highly probable future sales in US dollars using a portion of its borrowings denominated in US dollars, currency forwards and foreign currency floating-to-fixed interest rate swaps.

The Company expects that the cash flows will occur and affect profit or loss between 2015 and 2020.

For the period ended June 30, 2015, a total amount before income tax of US$ 52,524 was recognized in other comprehensive income and an amount of US$ 7,754 loss was reclassified from equity to profit or loss within “Financial results, net”.

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

F - 12

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

3.	Financial risk management (continued)

● Interest rate risk

The following table shows a breakdown of the Group’s fixed-rate and floating-rate borrowings per currency denomination and functional currency of the subsidiary issuing the loans (excluding finance leases) at June 30, 2015 (all amounts are shown in US dollars):

June 30, 2015

(unaudited)

Functional currency

Argentine

Brazilian

Uruguayan

Rate per currency denomination

Peso

Reais

Peso

Total

Fixed rate:

Argentine Peso

17,562

Brazilian Reais

183,021

US Dollar

59,733

36,128

2,000

97,861

Subtotal Fixed-rate borrowings

77,295

219,149

2,000

298,444

Variable rate:

Brazilian Reais

94,871

US Dollar

20,097

371,176

391,273

Subtotal Variable-rate borrowings

20,097

466,047

486,144

Total borrowings as per analysis

97,392

685,196

2,000

784,588

Finance leases

460

460

Total borrowings at June 30, 2015

97,852

685,196

2,000

785,048

At June 30, 2015, if interest rates on floating-rate borrowings had been 1 % higher (or lower) with all other variables held constant, Loss Before Income Tax for the period would decrease as follows:

	June 30, 2015
	(unaudited)
	Functional currency
	Argentine			Brazilian			Uruguayan
Rate per currency denomination	Peso			Reais			Peso		Total
Variable rate:
Brazilian Reais		-			(949	)		-		(949	)
US Dollar		(201	)		(3,712	)		-		(3,913	)
(Decrease) or increase in Profit Before Income Tax		(201	)		(4,661	)		-		(4,862	)

● Credit risk

As of June 30, 2015, 4 banks accounted for more than 89% of the total cash deposited (Rabobank, HSBC, Banco do Brasil and Itau).

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

F - 13

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

3.	Financial risk management (continued)

● Derivative financial instruments

The following table shows the outstanding positions for each type of derivative contract as of June 30, 2015:

• Futures / Options


	June 30, 2015
		Quantities				Market
Type of		(thousands)		Notional		Value Asset/		Profit / (Loss)
derivative contract		()**		amount		(Liability)		*()**
						(unaudited)		(unaudited)
Futures:
Sale
Corn		252		37,365		(3,999	)	(3,803	)
Soybean		243		81,488		(6,136	)	(5,798	)
Purchase
Wheat		(1	)	(78	)	(24	)	(25	)
Sugar		182,074		56,960		3,436		1,901
		360		142		9		(9	)
Ethanol

OTC:
		55,372		1,542		2,633		(2,060	)
Sugar

Options:
*Sell call*
Corn		12		(360	)	(223	)	66
Total		238,312		177,059		(4,304	)	(9,728	)

(*) Included in line “Gain from commodity derivative financial instruments” Note 25.

(**) All quantities expressed in tons except otherwise indicated.

Commodity future contract fair values are computed with reference to quoted market prices on future exchanges.

• Other derivative financial instruments

As of June 30, 2015, the Group has floating-to-fixed interest rate swap, foreign currency fixed-to-floating interest rate swap and foreign currency floating-to fixed interest rate swap agreements, which were also outstanding as of December 31, 2014.

During the period ended June 30, 2014, the Group entered into several currency forward contracts with Brazilian banks in order to hedge the fluctuation of the Brazilian Reais against US Dollar for a total notional amount of US$ 25.5 million. No contract of this kind was entered in 2015. Those contracts entered in 2014 had maturity dates ranging between March 2014 and June 2014. The outstanding contracts resulted in the recognition of a gain of US$ 0.3 million in 2015 and US$ 0.1 million in 2014, respectively. Gain and losses on currency forward contracts are included within “Financial results, net” in the statement of income.

During the period ended on June 2015, the Group entered into several currency forward contracts with Uruguayan banks in order to hedge the fluctuation of the US Dollar against Euro for a total notional amount of US$ 8.2 million. The currency forward contracts maturity date ranging between September 2015 and December 2015. The outstanding contracts resulted in the recognition of a loss amounting to US$ 0.13 million in 2015. Gain and losses on currency forward contracts are included within “Financial results, net” in the statement of income.

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

F - 14

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

4.	Critical accounting estimates and judgments

The Group’s critical accounting policies are also consistent with those of the audited annual financial statements for the year ended December 31, 2014 described in Note 4.

5.	Segment information

IFRS 8 “Operating Segments” requires an entity to report financial and descriptive information about its reportable segments, which are operating segments or aggregations of operating segments that meet specified criteria. Operating segments are components of an entity about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. The CODM evaluates the business based on the differences in the nature of its operations, products and services. The amount reported for each segment item is the measure reported to the CODM for these purposes.

The Group operates in three major lines of business, namely, Farming; Sugar, Ethanol and Energy; and Land Transformation.

● The Group’s ‘Farming’ line of business is further comprised of three reportable segments:

• The Group’s ‘Crops’ Segment consists of planting, harvesting and sale of grains, oilseeds and fibers (including wheat, corn, soybeans, cotton and sunflowers, among others), and to a lesser extent the provision of grain warehousing/conditioning, handling and drying services to third parties, and the purchase and sale of crops produced by third parties crops. Each underlying crop in the Crops segment does not represent a separate operating segment. Management seeks to maximize the use of the land through the cultivation of one or more type of crops. Types and surface amount of crops cultivated may vary from harvest year to harvest year depending on several factors, some of them out of the Group’s control. Management is focused on the long-term performance of the productive land, and to that extent, the performance is assessed considering the aggregated combination, if any, of crops planted in the land. A single manager is responsible for the management of operating activity of all crops rather than for each individual crop.

• The Group’s ‘Rice’ Segment consists of planting, harvesting, processing and marketing of rice;

• The Group’s ‘Dairy’ Segment consists of the production and sale of raw milk and other dairy products;

• The Group’s ‘All Other Segments’ column consists of the aggregation of the remaining non-reportable operating segments, which do not meet the quantitative thresholds for disclosure and for which the Group’s management does not consider them to be of continuing significance as from January 1, 2014, namely, Coffee and Cattle.

● The Group’s ‘Sugar, Ethanol and Energy’ Segment consists of cultivating sugarcane which is processed in owned sugar mills, transformed into ethanol, sugar and electricity and marketed;

● The Group’s ‘Land Transformation’ Segment comprises the (i) identification and acquisition of underdeveloped and undermanaged farmland businesses; and (ii) realization of value through the strategic disposition of assets (generating profits).

The measurement principles for the Group’s segment reporting structure are based on the IFRS principles adopted in the interim financial statements.

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

F - 15

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

5.	Segment information (continued)

Total segment assets and liabilities are measured in a manner consistent with that of the condensed consolidated interim financial statements. These assets and liabilities are allocated based on the operations of the segment and the physical location of the asset. The Group’s investment in the joint venture CHS S.A. is allocated to the ‘Crops’ segment.

The following table presents information with respect to the Group’s reportable segments. Certain other activities of a holding function nature not allocable to the segments are disclosed in the column ‘Corporate’.

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

F - 16

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

5.	Segment information (continued)

Segment analysis for the six-month period ended June 30, 2015 (unaudited)



	*Farming*															*Sugar,*
	Crops			Rice			Dairy			All Other Segments			*Farming* *subtotal*			*Ethanol and* *Energy*			*Land* *Transformation*		*Corporate*			*Total*
Sales of manufactured products and services rendered		431			48,679			754			662			50,526			147,928			-		-			198,454
Cost of manufactured products sold and services rendered		(262	)		(40,193	)		(884	)		(331	)		(41,670	)		(90,678	)		-		-			(132,348	)
Gross Profit from Manufacturing Activities		169			8,486			(130	)		331			8,856			57,250			-		-			66,106
Sales of agricultural produce and biological assets		70,477			48			16,165			-			86,690			-			-		-			86,690
Cost of agricultural produce sold and direct agricultural selling expenses		(70,477	)		(48	)		(16,165	)		-			(86,690	)		-			-		-			(86,690	)
Initial recognition and changes in fair value of biological assets and agricultural produce		15,473			3,755			4,178			(2	)		23,404			10,544			-		-			33,948
Changes in net realizable value of agricultural produce after harvest		3,898			-			-			-			3,898			-			-		-			3,898
Gross Profit from Agricultural Activities		19,371			3,755			4,178			(2	)		27,302			10,544			-		-			37,846
Margin on Manufacturing and Agricultural Activities Before Operating Expenses		19,540			12,241			4,048			329			36,158			67,794			-		-			103,952
General and administrative expenses		(1,792	)		(1,618	)		(747	)		(41	)		(4,198	)		(10,152	)		-		(9,135	)		(23,485	)
Selling expenses		(2,751	)		(6,763	)		(346	)		(13	)		(9,873	)		(20,633	)		-		(526	)		(31,032	)
Other operating income / (loss), net		1,480			601			(306	)		1			1,776			13,609			-		222			15,607
Share of loss of joint ventures		(1,470	)		-			-			-			(1,470	)		-			-		-			(1,470	)
Profit / (loss) from Operations Before Financing and Taxation		15,007			4,461			2,649			276			22,393			50,618			-		(9,439	)		63,572

Depreciation and amortization		(976	)		(1,561	)		(755	)		(151	)		(3,443	)		(26,526	)		-		-			(29,969	)
Initial recognition and changes in fair value of biological assets (unrealized)		21			-			-			120			141			18,147			-		-			18,288
Initial recognition and changes in fair value of agricultural produce (unrealized)		7,471			2,726			-			(122	)		10,075			(3,635	)		-		-			6,440
Initial recognition and changes in fair value of biological assets and agricultural produce (realized)		7,981			1,029			4,178			-			13,188			(3,968	)		-		-			9,220
Changes in net realizable value of agricultural produce after harvest (unrealized)		1,080			-			-			-			1,080			-			-		-			1,080
Changes in net realizable value of agricultural produce after harvest (realized)		2,818			-			-			-			2,818			-			-		-			2,818
Farmlands and farmland improvements, net		107,811			20,412			327			7,996			136,546			27,530			-		-			164,076
Machinery, equipment and other fixed assets, net		5,467			19,291			13,424			967			39,149			473,790			-		-			512,939
Work in progress		2,103			6,297			1,257			-			9,657			27,152			-		-			36,809
Investment property		-			-			-			6,281			6,281			-			-		-			6,281
Goodwill		6,827			3,038			-			1,343			11,208			7,038			-		-			18,246
Biological assets		12,745			6,869			8,913			1,993			30,520			280,343			-		-			310,863
Investment in joint ventures		1,200			-			-			-			1,200			-			-		-			1,200
Inventories		56,143			37,012			2,857			-			96,012			52,702			-		-			148,714
Total segment assets		192,296			92,919			26,778			18,580			330,573			868,555			-		-			1,199,128
Borrowings		62,613			39,787			5,253			1,141			108,794			676,254			-		-			785,048
Total segment liabilities		62,613			39,787			5,253			1,141			108,794			676,254			-		-			785,048

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

F - 18

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

5.	Segment information (continued)

Segment analysis for the six-month period ended June 30, 2014 (unaudited)


	*Farming*															*Sugar,*
	Crops			Rice			Dairy			All Other Segments			*Farming* *subtotal*			*Ethanol and* *Energy*			*Land* *Transformation*		*Corporate*			*Total*
Sales of manufactured products and services rendered		117			51,883			322			788			53,110			136,627			-		-			189,737
Cost of manufactured products sold and services rendered		-			(39,328	)		(322	)		(33	)		(39,683	)		(86,412	)		-		-			(126,095	)
Gross Profit from Manufacturing Activities		117			12,555			-			755			13,427			50,215			-		-			63,642
Sales of agricultural produce and biological assets		98,341			1,460			13,621			-			113,422			-			-		-			113,422
Cost of agricultural produce sold and direct agricultural selling expenses		(98,341	)		(1,460	)		(13,621	)		-			(113,422	)		-			-		-			(113,422	)
Initial recognition and changes in fair value of biological assets and agricultural produce		42,871			11,557			3,890			(386	)		57,932			(18,072	)		-		-			39,860
Changes in net realizable value of agricultural produce after harvest		(1,704	)		-			-			-			(1,704	)		-			-		-			(1,704	)
Gross Profit / (loss) from Agricultural Activities		41,167			11,557			3,890			(386	)		56,228			(18,072	)		-		-			38,156
Margin on Manufacturing and Agricultural Activities Before Operating Expenses		41,284			24,112			3,890			369			69,655			32,143			-		-			101,798
General and administrative expenses		(2,083	)		(1,602	)		(777	)		(84	)		(4,546	)		(10,132	)		-		(8,956	)		(23,634	)
Selling expenses		(2,029	)		(9,126	)		(272	)		(13	)		(11,440	)		(19,225	)		-		(728	)		(31,393	)
Other operating (loss)/income, net		(5,245	)		235			20			(15	)		(5,005	)		2,484			-		137			(2,384	)
Share of loss of joint ventures		(231	)		-			-			-			(231	)		-			-		-			(231	)
Profit / (loss) from Operations Before Financing and Taxation		31,696			13,619			2,861			257			48,433			5,270			-		(9,547	)		44,156

Reserve from the sale of non-controlling interests in subsidiaries		-			-			-			-			-			-			25,575		-			25,575
Depreciation and amortization		(994	)		(1,672	)		(775	)		(209	)		(3,650	)		(30,815	)		-		-			(34,465	)
Initial recognition and changes in fair value of biological assets (unrealized)		726			-			-			-			726			(3,337	)		-		-			(2,611	)
Initial recognition and changes in fair value of agricultural produce (unrealized)		14,722			6,106			-			-			20,828			(7,018	)		-		-			13,810
Initial recognition and changes in fair value of biological assets and agricultural produce (realized)		27,423			5,451			3,890			(386	)		36,378			(7,717	)		-		-			28,661
Changes in net realizable value of agricultural produce after harvest (unrealized)		(2,305	)		-			-			-			(2,305	)		-			-		-			(2,305	)
Changes in net realizable value of agricultural produce after harvest (realized)		601			-			-			-			601			-			-		-			601
Farmlands and farmland improvements, net		132,741			23,080			375			1,710			157,906			38,676			-		-			196,582
Machinery, equipment and other fixed assets, net		29,959			20,120			15,193			2,604			67,876			507,183			-		-			575,059
Work in progress		353			1,442			746			-			2,541			92,853			-		-			95,394
Investment property		-			-			-			8,136			8,136			-			-		-			8,136
Goodwill		8,091			3,394			-			1,247			12,732			9,903			-		-			22,635
Biological assets		20,324			4,502			7,968			2,247			35,041			283,495			-		-			318,536
Investment in joint ventures		-			-			-			3,660			3,660			-			-		-			3,660
Inventories		61,117			30,822			4,209			226			96,374			54,226			-		-			150,600
Total segment assets		222,874			83,388			28,491			24,855			359,608			1,010,995			-		-			1,370,603
Borrowings		63,737			31,793			(1,399	)		1,642			95,773			686,573			-		-			782,346
Total segment liabilities		63,737			31,793			(1,399	)		1,642			95,773			686,573			-		-			782,346

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

F -19

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

Property, plant and equipment

Changes in the Group’s property, plant and equipment in the six-month periods ended June 30, 2015 and 2014 were as follows:


	Farmlands			Farmland improvements			Buildings and facilities			Machinery, equipment, furniture and fittings			Computer equipment			Vehicles			Work in progress			Total
Six-month period ended June 30, 2014
Opening net book amount		216,843			8,852			206,462			297,910			1,690			1,184			57,579			790,520
Exchange differences		(26,549	)		(1,721	)		4,741			15,155			75			(217	)		2,794			(5,722	)
Additions		-			-			14,708			44,439			889			126			56,627			116,789
Transfers		-			-			13,649			7,924			32			-			(21,605	)		-
Disposals		-			-			(7	)		(443	)		(5	)		(21	)		-			(476	)
Reclassification to non-income tax credits (*)		-			-			(173	)		(578	)		-			-			-			(751	)
Depreciation (Note 23)		-			(843	)		(8,371	)		(23,553	)		(383	)		(174	)		-			(33,324	)
Closing net book amount		190,294			6,288			231,009			340,854			2,298			898			95,395			867,036
At June 30, 2014 (unaudited)
Cost		190,294			14,025			307,411			565,144			6,365			4,233			95,395			1,182,867
Accumulated depreciation		-			(7,737	)		(76,402	)		(224,290	)		(4,067	)		(3,335	)		-			(315,831	)
Net book amount		190,294			6,288			231,009			340,854			2,298			898			95,395			867,036
Six-month period ended June 31, 2015
Opening net book amount		174,420			5,401			194,771			277,586			3,371			1,180			120,176			776,905
Exchange differences		(14,938	)		(317	)		(26,558	)		(41,401	)		(463	)		(107	)		(16,401	)		(100,185	)
Additions		-			-			8,025			32,064			515			1,078			30,854			72,536
Transfers		-			171			34,154			58,982			327			-			(93,634	)		-
Disposals		-			-			(173	)		(270	)		(2	)		(33	)		-			(478	)
Reclassification to non-income tax credits (*)		-			-			(393	)		(701	)		-			-			(4,186	)		(5,280	)
Depreciation (Note 23)		-			(661	)		(7,018	)		(21,195	)		(546	)		(254	)		-			(29,674	)
Closing net book amount		159,482			4,594			202,808			305,065			3,202			1,864			36,809			713,824
At June 30, 2015 (unaudited)
Cost		159,482			12,992			286,228			550,550			7,815			5,453			36,809			1,059,329
Accumulated depreciation		-			(8,398	)		(83,420	)		(245,485	)		(4,613	)		(3,589	)		-			(345,505	)
Net book amount		159,482			4,594			202,808			305,065			3,202			1,864			36,809			713,824

(*) Brazilian federal tax law allows entities to take a percentage of the total cost of the assets purchased as a tax credit. As of June 30, 2015, ICMS tax credits were reclassified to trade and other receivables.

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

F - 19

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

Property, plant and equipment (continued)

An amount of US$ 26,875 and US$ 29,847 of depreciation are included in “Cost of manufactured products sold and services rendered” for the six-month periods ended June 30, 2015 and 2014, respectively. An amount US$ 2,692 and US$ 3,109 of depreciation are included in “General and administrative expenses” for the six-month periods ended June 30, 2015 and 2014, respectively. An amount of US$ 402 and US$ 560 of depreciation are included in “Selling expenses” for the six-month periods ended June 30, 2015 and 2014, respectively.

As of June 30, 2015, borrowing costs of US$ 4,193 (June 30, 2014: US$ 1,938) were capitalized as components of the cost of acquisition or construction of qualifying assets.

Certain of the Group’s assets have been pledged as collateral to secure the Group’s borrowings and other payables. The net book value of the pledged assets amounts to US$ 497,443 as of June 30, 2015.

As of June 30, 2015 included within property, plant and equipment balances are US$ 603 related to the net book value of assets under finance leases.

Investment property

Changes in the Group’s investment property in the six-month periods ended June 30, 2015 and 2014 were as follows:


	June 30,			June 30,
	2015			2014
	(unaudited)
Beginning of the period		6,675			10,147
Exchange differences		(394	)		(2,011	)
End of the period		6,281			8,136

Cost		6,281			8,136
Accumulated depreciation		-			-
Net book amount		6,281			8,136

The following amounts have been recognized in the statement of income in the line “Sales of manufactured products and services rendered”:


	June 30,		June 30,
	2015		2014
	(unaudited)
Rental income		662		786

As of June 30, 2015, the fair value of investment property was US$ 48 million (2014: US$ 58 million).

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

F - 20

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

Intangible assets

Changes in the Group’s intangible assets in the six-month periods ended June 30, 2015 and 2014 were as follows:


	Goodwill			Trademarks			Software			Others			Total
Six-month period ended June 30, 2014
Opening net book amount		24,869			1,129			1,343			-			27,341
Exchange differences		(2,234	)		(17	)		(97	)		-			(2,348	)
Additions		-			-			651			7			658
Amortization charge (i) (Note 23)		-			(72	)		(120	)		-			(192	)
Closing net book amount		22,635			1,040			1,777			7			25,459
At June 30,2014 (unaudited)
Cost		22,635			2,509			2,806			136			28,086
Accumulated amortization		-			(1,469	)		(1,029	)		(129	)		(2,627	)
Net book amount		22,635			1,040			1,777			7			25,459

Six-month period ended June 30, 2015
Opening net book amount		20,172			959			2,634			13			23,778
Exchange differences		(1,926	)		(5	)		(328	)		(2	)		(2,261	)
Additions		-			-			811			-			811
Amortization charge (ii) (Note 23)		-			-			(292	)		(3	)		(295	)
Closing net book amount		18,246			954			2,825			8			22,033
At June 30, 2015 (unaudited)
Cost		18,246			2,493			4,393			140			25,272
Accumulated amortization		-			(1,539	)		(1,568	)		(132	)		(3,239	)
Net book amount		18,246			954			2,825			8			22,033

(i) For the six-month period ended June 30, 2014 an amount of US$ 120 and US$ 72 of amortization charges are included in “General and administrative expenses” and “Selling expenses”, respectively. There were no impairment charges for any of the periods presented.

(ii) For the six-month period ended June 30, 2015 an amount of US$ 292 and US$ 3 of amortization charges are included in “General and administrative expenses” and “Selling expenses”, respectively. There were no impairment charges for any of the periods presented.

The Group tests annually whether goodwill has suffered any impairment. The last impairment test of goodwill was performed as of September 30, 2014.

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

F - 21

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

Biological assets

Changes in the Group’s biological assets in the six-month periods ended June 30, 2015 and 2014 were as follows:


	June 30,			June 30,
	2015			2014
	(unaudited)
Beginning of the period		341,232			292,144
Increase due to purchases		4			526
Initial recognition and changes in fair value of biological assets		33,948			39,860
Decrease due to harvest		(177,994	)		(204,515	)
Decrease due to disposals		(1,624	)		(1,060	)
Decrease due to sales of agricultural produce		(14,541	)		(12,561	)
Costs incurred during the period		172,496			200,292
Exchange differences		(42,658	)		3,850

End of the period		310,863			318,536

Biological assets as of June 30, 2015 and December 31, 2014 were as follows:


	June 30,		December 31,
	2015		2014
	(unaudited)
Non-current
Cattle for dairy production		8,483		8,856
Other cattle		24		25
Sown land – coffee		1,993		2,193
Sown land – sugarcane		280,343		274,970
		290,843		286,044
Current
Other cattle		406		301
Sown land – crops		12,745		31,012
Sown land – rice		6,869		23,875
		20,020		55,188
Total biological assets		310,863		341,232

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

F - 22

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

10.

Financial instruments

As of June 30, 2015, the financial instruments recognized at fair value on the statement of financial position comprise derivative financial instruments.

In the case of Level 1, valuation is based on unadjusted quoted prices in active markets for identical financial assets that the Group can refer to at the date of the statement of financial position. A market is deemed active if transactions take place with sufficient frequency and in sufficient quantity for price information to be available on an ongoing basis. Since a quoted price in an active market is the most reliable indicator of fair value, this should always be used if available. The financial instruments the Group has allocated to this level mainly comprise crop futures and options traded on the stock market. In the case of securities, the Group allocates them to this level when either a stock market price is available or prices are provided by a price quotation on the basis of actual market transactions.

Derivatives not traded on the stock market allocated to Level 2 are valued using models based on observable market data. For this, the Group uses inputs directly or indirectly observable in the market, other than quoted prices. If the financial instrument concerned has a fixed contract period, the inputs used for valuation must be observable for the whole of this period. The financial instruments the Group has allocated to this level mainly comprise interest-rate swaps and foreign-currency interest-rate swaps.

In the case of Level 3, the Group uses valuation techniques not based on inputs observable in the market. This is only permissible insofar as no observable market data are available. The inputs used reflect the Group’s assumptions regarding the factors, which market players would consider in their pricing. The Group uses the best available information for this, including internal company data. The Group does not have financial instruments allocated to this level for any of the periods presented.

The following tables present the Group’s financial assets and financial liabilities that are measured at fair value as of June 30, 2015 and their allocation to the fair value hierarchy:


	2015
	Level 1			Level 2			Level 3		Total

Assets
Derivative financial instruments		3,480			2,633			-		6,113
Total assets		3,480			2,633			-		6,113
Liabilities
Derivative financial instruments		(10,417	)		(13,266	)		-		(23,683	)
Total liabilities		(10,417	)		(13,266	)		-		(23,683	)

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

F - 23

Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements (continued)
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

10.

Financial instruments (continued)

When no quoted prices in an active market are available, fair values (particularly with derivatives) are based on recognized valuation methods. The Group uses a range of valuation models for this purpose, details of which may be obtained from the following table:


	Pricing
Class	Method	Parameters	Pricing Model	Level	Total
Futures	Quoted price	—	—	1	(6,714	)

Options	Quoted price	—	—	1	(223	)

Options/OTC	Quoted price	—	—	1	2,633

Foreign-currency	Theoretical price	—	—	2	(129	)
interest-rate swaps

Interest-rate swaps	Theoretical price	Swap curve;	Present value	2	(13,137	)
		Money market	method
		interest-rate curve

					(17,570	)

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

F-24

Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements (continued)
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

11.

Trade and other receivables, net


				December
	June 30, 2015			31, 2014
	(unaudited)
Non-current
Trade receivables		2,871			3,528
Receivables from related parties (Note 28)		78			-
Trade receivables – net		2,949			3,528
Advances to suppliers		10,787			12,149
Income tax credits		7,498			6,759
Non-income tax credits (i)		17,176			18,609
Judicial deposits		2,301			2,545
Receivable from disposal of subsidiary		-			3,997
Other receivables		1,078			3,003
Non-current portion		41,789			50,590
Current
Trade receivables		44,770			65,059
Receivables from related parties (Note 28)		8,695			258
Less: Allowance for trade receivables		(632	)		(527	)
Trade receivables – net		52,833			64,790
Prepaid expenses		6,180			6,884
Advance to Suppliers		23,799			11,717
Income tax credits		6,140			6,492
Non-income tax credits (i)		37,189			42,685
Cash collateral		28			6,329
Receivable from disposal of subsidiary		3,578			4,451
Other receivables		25,208			21,178
Subtotal		102,122			99,736
Current portion		154,955			164,526
Total trade and other receivables, net		196,744			215,116

(i) Includes US$ 5,280 for the six-month period ended June 30, 2015 reclassified from property, plant and equipment (for the year ended December 31, 2014: US$ 4,514).

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

F-25

Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements (continued)
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

11.

Trade and other receivables, net (continued)

The fair values of current trade and other receivables approximate their respective carrying amounts due to their short-term nature. The fair values of non-current trade and other receivables approximate their carrying amount, as the impact of discounting is not significant.

The carrying amounts of the Group’s trade and other receivables are denominated in the following currencies (expressed in US dollars):

	June 30,		December 31,
	2015		2014
	(unaudited)
Currency
US Dollar		50,030		45,341
Argentine Peso		46,378		49,876
Uruguayan Peso		—		8,385
Brazilian Reais		100,336		111,514
		196,744		215,116

As of June 30, 2015 trade receivables of US$ 5,891 (December 31, 2014: US$ 4,224) were past due but not impaired. The ageing analysis of these receivables indicates that 927 and 1,269 are over 6 months in June 30, 2015 and December 31, 2014, respectively.

The creation and release of allowance for trade receivables have been included in ‘Selling expenses’ in the statement of income. Amounts charged to the allowance account are generally written off, when there is no expectation of recovering additional cash.

The other classes within other receivables do not contain impaired assets.

The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above.

12.

Inventories


	June 30,		December 31,
	2015		2014
	(unaudited)
Raw materials		29,102		35,662
Finished goods		113,367		65,562
Stocks held by third parties		5,825		3,395
Others		420		300
		148,714		104,919

The cost of inventories recognized as expense are included in ‘Cost of manufactured products sold and services rendered’ amounted to US$ 132,348 for the six-month period ended June 30, 2015. The cost of inventories recognized as expense and included in ‘Cost of agricultural produce sold and direct agricultural selling expenses’ amounted to US$ 58,463 for the six-month period ended June 30, 2015.

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

F-26

Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements (continued)
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

13.	Cash and cash equivalents

	June 30,		December 31,
	2015		2014
	(unaudited)
Cash at bank and on hand		128,794		104,132
Short-term bank deposits		34,672		9,663
		163,466		113,795

14.

Disposals

Sale of 49% of interest in Global Anceo S.L.U. and Global Hisingen S.L.U.

In June, 2014, the Group sold 49% of its interest in Global Anceo S.L.U. and Global Hisingen S.L.U. The main underlying assets of such corporations are Guayacanes and La Guarida farms.

Sale price amounted US$ 50.5 million and US$ 49.4 million was collected as of the transaction’s day. As the Company did not lose control of its subsidiaries, this operation is classified as an equity’s transaction, and the margin of the operation was registered in Statement of Changes in Shareholders’ Equity under the line item “Reserve from the sale of non-controlling interests in subsidiaries”. The transaction resulted in an increase of equity attributable to owners of the Company of US$ 25.6 million and also an increase in non-controlling interest of US$ 8.0 million.

15.

Shareholder’s Contributions


	Number of		Share capital
	shares		and share
	(thousands)		premium
At January 1, 2014		122,382		1,122,645
Employee share options exercised (Note 16)		—		649
Restricted shares vested		—		3,444
Purchase of own shares		—		(10,424	)
At June 30,2014		122,382		1,116,314

At January 1, 2015		122,382		1,116,617
Employee share options exercised (Note 16)		—		1,378
Restricted shares vested		—		3,103
At June 30, 2015		122,382		1,121,098

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

F-27

Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements (continued)
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)


15.	Shareholder’s Contributions

	Share Repurchase Program

On September 24, 2013, the Board of Directors of the Company has authorized a share repurchase program for up to 5% of its outstanding shares. The repurchase program has commenced on September 24, 2013 and will be reviewed by the Board of Directors after a 12-month period: repurchases of shares under the program are made from time to time in open market transactions in compliance with the trading conditions of Rule 10b-18 under the U.S. Securities Exchange Act of 1934, as amended, and applicable rules and regulations. The share repurchase program does not require Adecoagro to acquire any specific number or amount of shares and may be modified, suspended, reinstated or terminated at any time in the Company’s discretion and without prior notice. The size and the timing of repurchases will depend upon market conditions, applicable legal requirements and other factors. On August 12, 2014 the Board of directors decided to extend the program for a 12 month period.


16.	Equity-settled share-based payments

The Group has set a “2004 Incentive Option Plan” and a “2007/2008 Equity Incentive Plan” (collectively referred to as “Option Schemes”) under which the Group grants equity-settled options to senior managers and selected employees of the Group’s subsidiaries. Additionally, in 2010 the Group has set a “Adecoagro Restricted Share and Restricted Stock Unit Plan” (referred to as “Restricted Share Plan”) under which the Group grants restricted shares, or restricted stock units to senior and medium management and key employees of the Group’s subsidiaries.

(a) Option Schemes

For the six-month periods ended June 30, 2015 and 2014 the Group incurred US$ nil million for the both period, related to the options granted under the Option Schemes.

Movements in the number of equity-settled options outstanding and their related weighted average exercise prices under plans are as follows:

2004 Incentive Option Plan

June 30, 2015

June 30,2014

Average

exercise

price per

Options

price per

Options

share

(thousands)

share

(thousands)

At January 1

6,71

1,916

6.67

2,061

Forfeited

)

Exercised

6,76

(166

)

5.83

(99

)

At June 30

6,69

1,750

6.70

1,957

2007/2008 Equity Incentive Plan

June 30, 2015

June 30,2014

Average

exercise

price per

Options

price per

Options

share

(thousands)

share

(thousands)

At January 1

13.07

1,729

13.07

1,751

Forfeited

12.98

(23

)

13.22

(22

)

At June 30

13.07

1,706

13.06

1,729

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

F - 28

Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements (continued)
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)


16.	Equity-settled share-based payments (continued)

Options outstanding under the plans have the following expiry date and exercise prices:

2004 Incentive Option Plan


	Exercise
	price per		Shares (in thousands)
Expiry date (i):	share		June 30, 2015		June 30, 2014
May 1, 2024		5.83		570		577
May 1, 2025		5.83		517		553
May 1, 2026		5.83		68		153
February 16, 2026		7.11		103		110
October 1, 2026		8.62		493		564

(i) On May 2014, the Board of directors decided to extend the expired date.

2007/2008 Equity Incentive Plan


	Exercise
	price per		Shares (in thousands)
Expiry date:	share		June 30, 2015		June 30, 2014
Dec 1, 2017		12.82		932		950
Jan 30, 2019		13.40		596		599
Nov 1, 2019		13.40		8		8
Jan 30, 2020		12.82		26		26
Jan 30, 2020		13.40		62		65
Jun 30, 2020		13.40		22		22
Sep 1, 2020		13.40		44		44
Sep 1, 2020		12.82		15		15

The following table shows the exercisable shares at period end under the Adecoagro/ IFH 2004 Incentive Option Plan and the Adecoagro/ IFH 2007/ 2008 Equity Incentive Plan:


	Exercisable
	shares in
	thousands
June 30, 2015		3,456
June 30, 2014		3,686

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

F - 29

Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements (continued)
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)


16.	Equity-settled share-based payments (continued)

(b) Restricted Share and Restricted Stock Unit Plan

The Restricted Share and Restricted Stock Unit Plan were effectively established in 2010 and amended in November 2011 and is administered by the Compensation Committee of the Company. Awards under this plan vest over a 3-year period from the date of grant at 33% on each anniversary of the grant date. Participants are entitled to receive one common share of the Company for each restricted share or restricted unit issued. For the Restricted Share Plan there are no performance requirements for the delivery of common shares, except that a participant’s employment with the Group must not have been terminated prior to the relevant vesting date. If the participant ceases to be an employee for any reason, any unvested restricted share shall not be converted into common shares and the participant shall cease for all purposes to be a shareholder with respect to such shares.

On July 18, 2011, the Group issued and registered 427,293 restricted shares with a nominal value of US$ 1.5 which were granted under the Restricted Share Plan. While the restricted shares are not vested, they are recognized in “Other reserves”. Once they are vested, the reserve is reversed and a share premium is recognized. As of June 30, 2015, all the restricted shares were vested.

The restricted shares under the Restricted Share Plan were measured at fair value at the date of grant.

As of June 30, 2015, the Group recognized compensation expense US$ 0.9 million related to the restricted shares granted under the Restricted Share Plan (2014: US$ 0.8 million).

Key grant-date fair value and other assumptions under the Restricted Share and Restricted Stock Unit Plan are detailed below:


Grant Date	Apr 1, 2013			May 15, 2013			Apr 1, 2014			May 15, 2014			Apr 1, 2015			May 13, 2015

Fair value		8.08			7.48			7.92			8.72			9.45			10.12
Possibility of ceasing employment before vesting		5	%		0	%		5	%		0	%		5	%		0	%

Movements in the number of restricted shares outstanding under the Restricted Share and Restricted Stock Unit Plan are as follows:


	Restricted shares (thousands)		Restricted stock units (thousands)			Restricted shares (thousands)			Restricted stock units (thousands)
	2015		2015			2014			2014
At January 1		-		861			110			699
Granted		-		-			-			470
Forfeited		-		(16	)		(3	)		(15	)
Vested		-		-			(107	)		(297	)
At June 30		-		845			-			857

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

F - 30

Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements (continued)
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)


17.	Trade and other payables


	June 30,		December 31,
	2015		2014
	(unaudited)
Non-current
Payable from acquisition of property, plant and equipment (i)		1,563		2,084
Other payables		284		307
		1,847		2,391
Current
Trade payables		43,889		70,269
Advances from customers		2,510		5,636
Amounts due to related parties (Note 28)		23		-
Taxes payable		2,402		4,217
Escrows arising on business combinations		-		316
Other payables		251		2,662
		49,075		83,100
Total trade and other payables		50,922		85,491

(i) These trades payable are mainly collateralized by property, plant and equipment.

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

F - 31

Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements (continued)
(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)


18.	Borrowings


	June 30,		December 31,
	2015		2014
	(unaudited)
Non-current
Votoratim		-		434
ABC Brazil Loan		3,570		3,571
Bradesco Loan (*)		4,473		4,557
BNDES Loan Facility(*)		136,607		163,009
IDB Facility (*)		13,938		21,972
Ciudad de Buenos Aires Loan		11,429		11,389
Banco do Brazil Loan Facility (*)		54,069		68,653
Itaú BBA Facility (*)		22,232		30,654
ING/ABN/Bladex (*)		18,836		28,000
Rabobank, Syndicated Loan (*)		62,804		71,562
ING Bank N,V, Syndicated Loan (*)		66,333		66,002
ING/Rabobank/ABN/Crédit
Agricole/HSBC/Caixa Geral/Galena(*)		140,841		-
Other bank borrowings		19,329		21,224
Obligations under finance leases		216		293
		554,677		491,324

Current
Bank overdrafts		-		7,789
BNDES Loan Facility (*)		39,618		27,430
IDB Facility (*)		-		15,827
Ciudad de Buenos Aires Loan		15,842		2,947
Galicia Loan		5,977		1,000
Banco do Brazil Loan Facility (*)		16,286		12,708
Rabobank Loan (*)		26,554		38,665
ITAU (*)		15,861		27,319
ABC Brazil Loan		3,768		10,134
Bradesco Loan (*)		4,292		4,086
Votoratim		2,479		2,421
ING/ABN/Bladex(*)		-		4
Rabobank, Syndicated Loan (*)		9,359		217
ING/HSBC/ICBC/BES/Bradesco/Hinduja/Bladex/BoC/Paschi(*)		28,680		32,606
ING/Rabobank/ABN/Crédit Agricole/HSBC/Caixa Geral/Galena(*)		16,671		-
Banco Macro		10,016		-
Other bank borrowings		34,724		23,742
Obligations under finance leases		244		287
		230,371		207,182
Total borrowings		785,048		698,506

(*) The Group was in compliance with the related covenants under the respective loan agreements.

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

F - 32

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

18. Borrowings (continued)

New loan - ING Bank N.V. Syndicated Loan

In January and February 2015, Adecoagro Vale do Ivinhema entered into a US$ 160.0 million loan with syndicate of banks, led by ING Bank N.V. and Rabobank, due 2018. This syndicate loan bears an interest of LIBOR 3 months + 4.40% per annum and contains certain customary financial covenants and restrictions which require us to meet pre-defined financial ratios, among other restrictions, as well as restrictions on the payment of dividends.

As of June 30, 2015, total bank borrowings include collateralized liabilities of US$ 685,196 (December 31, 2014: US$ 640,034). These loans are mainly collateralized by property, plant and equipment sugarcane plantations, sugar export contracts and shares of certain subsidiaries of the Group.

The maturity of the Group’s borrowings (excluding obligations under finance leases) and the Group’s exposure to fixed and variable interest rates is as follows:


	June 30,		December 31,
	2015		2014
	(unaudited)
Fixed rate:
Less than 1 year		114,204		95,524
Between 1 and 2 years		40,350		45,518
Between 2 and 3 years		32,697		41,685
Between 3 and 4 years		29,009		25,809
Between 4 and 5 years		27,641		39,992
More than 5 years		54,543		87,219
		298,444		335,747
Variable rate:
Less than 1 year		115,923		111,371
Between 1 and 2 years		162,487		130,426
Between 2 and 3 years		126,871		80,199
Between 3 and 4 years		58,536		13,154
Between 4 and 5 years		6,959		7,346
More than 5 years		15,368		19,683
		486,144		362,179
		784,588		697,926

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

F-33

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

18. Borrowings (continued)

The carrying amounts of the Group’s borrowings are denominated in the following currencies (expressed in US dollars):


	June 30,		December 31,
	2015		2014
	(unaudited)
Currency
US Dollar		489,315		320,638
Brazilian Reais		277,892		362,733
Argentine Peso		17,841		15,135
		785,048		698,506

19. Taxation

Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual earnings.


	June 30,			June 30,
	2015			2014
	(unaudited)
Current income tax		(2,081	)		(1,620	)
Deferred income tax		(7,461	)		(3,609	)
Income tax expense		(9,542	)		(5,229	)

There has been no change in the statutory tax rates in the countries where the Group operates since December 31, 2014.

Argentine law includes a 10% withholding tax on dividend distributions made by Argentine companies to individuals and foreign beneficiaries. As of June 30, 2015, the Company did not record any liability on retain earnings at their Argentine subsidiaries due to its dividend policy which defines that the Company intends to retain any future earnings to finance operations and the expansion of their business and does not intend to distribute or pay any cash dividends on our common shares in the foreseeable future.

The gross movement on the deferred income tax account is as follows:


	June 30,			June 30,
	2015			2014
	(unaudited)
Beginning of period asset/(liability)		5,963			(9,255	)
Exchange differences		(4,649	)		12,948
Tax charge relating to cash flow hedge (i)		15,296			(1,557	)
Income tax expense		(7,461	)		(3,609	)
End of period asset/(liability)		9,149			(1,473	)

(i)	Relates to the gain or loss before income tax of cash flow hedge recognized in other comprehensive income net of the amount reclassified from equity to profit and loss amounting to U$S 464 gain for the six-month period ended June 30, 2015.

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

F-34

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

19.

Taxation (continued)

The tax on the Group’s profit before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to profits of the consolidated entities as follows:

	June 30,			June 30,
	2015			2014
	(unaudited)
Tax calculated at the tax rates applicable to
profits in the respective countries		(8,837	)		(3,796	)
Non-deductible items		(797	)		(66	)
Utilization of tax losses		277			-
Non-taxable income		(564	)		(1,564	)
Others expenses		379			197
Income tax expense		(9,542	)		(5,229	)

20.

Payroll and social security liabilities

	June 30,		December 31,
	2015		2014
	(unaudited)
Non-current
Social security payable		1,376		1,278
		1,376		1,278
Current
Salaries payable		10,146		6,322
Social security payable		3,095		3,898
Provision for vacations		10,057		12,364
Provision for bonuses		3,110		4,731
		26,408		27,315
Total payroll and social security liabilities		27,784		28,593

21.

Provisions for other liabilities

The Group is subject to several laws, regulations and business practices of the countries where it operates, In the ordinary course of business, the Group is subject to certain contingent liabilities with respect to existing or potential claims, lawsuits and other proceedings, including those involving tax, labor and social security, administrative and civil and other matters. The Group accrues liabilities when it is probable that future costs will be incurred and it can reasonably estimate them. The Group bases its accruals on up-to-date developments, estimates of the outcomes of the matters and legal counsel experience in contesting, litigating and settling matters. As the scope of the liabilities becomes better defined or more information is available, the Group may be required to change its estimates of future costs, which could have a material effect on its results of operations and financial condition or liquidity. There have been no material changes to claimed amounts and current proceedings since December 31, 2014.

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

F - 35

Adecoagro S.A.
Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

22.

Sales

	June 30,		June 30,
	2015		2014
	(unaudited)
Sales of manufactured products and services rendered:
Ethanol		72,941		74,963
Sugar (*)		53,303		43,036
Rice (*)		47,843		50,478
Energy		21,684		18,628
Powder milk		754		-
Operating leases		662		867
Services		910		1,432
Others		357		333
		198,454		189,737
Sales of agricultural produce and biological assets:
Soybean (*)		38,533		58,018
Cattle for dairy production		1,624		1,060
Corn (*)		14,044		28,939
Cotton		925		333
Milk		14,541		12,561
Wheat		6,946		5,704
Sunflower		9,046		3,896
Barley		596		916
Sorghum		14		43
Seeds		48		778
Others		373		1,174
		86,690		113,422
Total sales		285,144		303,159

(*) Includes sales of soybean, rice, powder milk and sugar produced by third parties for an amount of US$ 426; US$ 7,394; US$ 354 and US$ 8,974 respectively.

Commitments to sell commodities at a future date

The Group entered into contracts to sell non-financial instruments, mainly, sugar, soybean and corn through sales forward contracts. Those contracts are held for purposes of delivery the non-financial instrument in accordance with the Group’s expected sales. Accordingly, as the own use exception criteria are met, those contracts are not recorded as derivatives.

The notional amount of these contracts is US$ 113.2 million as of June 30, 2015 (June 30, 2014: US$ 78.9 million) comprised primarily of 3,603 m³ of ethanol (US$ 1.6 million), 293,470 mhw of energy (U$S 24.6 million) and 57,465 tons of soybean (U$S 24.3 million), 82,103 tons of corn (US$ 10.6 million), 3,264 tons of wheat (US$ 0.4 million), 500 tons of cotton (US$ 0.8 million), 400 tons of sorghum (US$ 0.1) and 5,092 of others crops (US$ 2.1 million) which expire between July 2015 and December 2015.

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

F - 36

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

23. Expenses by nature

The following table provides the additional disclosure required on the nature of expenses and their relationship to the function within the Group:


	June 30,		June 30,
	2015		2014
	(unaudited)
Cost of agricultural produce and biological assets sold		74,628		79,986
Raw materials and consumables used in manufacturing activities		79,847		89,556
Services		5,503		7,162
Salaries and social security expenses (Note 24)		29,611		30,176
Depreciation and amortization		29,969		34,465
Taxes (*)		1,617		1,683
Maintenance and repairs		5,855		6,404
Lease expense and similar arrangements(**)		835		1,239
Freights		17,128		18,763
Export taxes / selling taxes		15,204		14,646
Fuel and lubricants		3,852		4,042
Others		9,506		6,422
Total expenses by nature		273,555		294,544

(*) Excludes export taxes and selling taxes.

(**) Relates to various cancellable operating lease agreements for office and machinery equipment.

For the six-month period ended June 30, 2015, an amount of US$ 132,348 is included as “cost of manufactured products sold and services rendered” (June 30, 2014: 126,095); an amount of US$ 86,690 is included as “cost of agricultural produce sold and direct agricultural selling expenses” (June 30, 2014: 113,422); an amount of US$ 23,485 is included in “general and administrative expenses” (June 30, 2014: 23,634); and an amount of US$ 31,032 is included in “selling expenses” as described above (June 30, 2014: 31,393).

24. Salaries and social security expenses


	June 30,		June 30,
	2015		2014
	(unaudited)
Wages and salaries		20,717		21,362
Social security costs		6,909		7,107
Equity-settled share-based compensation		1,985		1,707
		29,611		30,176
Number of employees		8,452		8,020

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

F - 37

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

25. Other operating (loss)/income, net


	June 30,			June 30,
	2015			2014
	(unaudited)
Gain/(Loss) from commodity derivative financial instruments		14,735			(3,208	)
Gain / (Loss) from onerous contracts – forwards		1			(132	)
Gain from disposal of other property items		880			606
Others		(9	)		350
		15,607			(2,384	)

26. Financial results, net


	June 30,			June 30,
	2015			2014
	(unaudited)
Finance income:
- Interest income		4,906			3,393
- Gain from interest rate/foreign exchange rate derivative financial instruments, net		570			720
- Other income		194			188
Finance income		5,670			4,301

Finance costs:
- Interest expense		(24,151	)		(27,809	)
- Cash flow hedge – transfer from equity		(7,754	)		(4,609	)
- Foreign exchange losses, net		(9,653	)		(3,268	)
- Taxes		(1,457	)		(1,954	)
- Other expenses		(1,589	)		(1,540	)
Finance costs		(44,604	)		(39,180	)
Total financial results, net		(38,934	)		(34,879	)

27. Disclosure of leases and similar arrangements

The Group as lessor - Operating leases

In September 2013, Marfrig Argentina S.A. (“Marfrig ARG”), an Argentine company subsidiary of the Brazilian company Marfrig Alimentos S.A. (today Marfrig Global Foods S.A.) (“Marfrig Brazil”) unilaterally early terminated the Master Agreement, including the lease agreements entered into with the Group on December 2009 for a ten-year term. Therefore, on April 21, 2014 the Group filed a lawsuit against Marfrig ARG and Marfrig Brazil claiming the indemnification set forth in the Master Agreement and unpaid invoices for aggregate of approximately US$ 22.5 million. The lawsuit was filed with the Court of Arbitration of the Stock Exchange Chamber of the City of Buenos Aires.

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

F - 38

Adecoagro S.A.

Notes to the Condensed Consolidated Interim Financial Statements (continued)

(All amounts in US$ thousands, except shares and per share data and as otherwise indicated)

28. Related-party transactions

The following is a summary of the balances and transactions with related parties:


			Income (loss) included in						Balance receivable
			the statement of income						(payable)
		Description of	June 30,			June 30,			June 30,			December
Related party	Relationship	transaction	2015			2014			2015			31, 2014

			(unaudited)			(unaudited)			(unaudited)
Mario Jorge de Lemos
Vieira/ Cia Agropecuaria		Receivables (Note 11)		-			-			783			258
Monte Alegre/ Alfenas
Agricola Ltda/ Marcelo	(i)	Cost of manufactured
Weyland Barbosa Vieira/		products sold and		(148	)		-			-			-
Paulo Albert Weyland		services rendered (ii)
Vieira		Payables (Note 17)		-			-			(23	)		-

CHS Agro	Joint venture	Services		14			(18	)		-			-

		Sales of goods		2,245			-			-			-

		Interest income		56			-			-			-

		Receivables (Note 11)		-			-			7,990			-
Directors and senior	Employment	Compensation
management		selected employees		(3,475	)		(3,713	)		(14,530	)		(16,876	)

(i) Shareholder of the Company.

(ii) Relates to agriculture partnership agreements (“parceria”)

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

F-39