6-K 1 t1602703_6k.htm FORM 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 November, 2016

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-

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 NINE
MONTH PERIOD ENDED SEPTEMBER 30, 2016

This Report of Foreign Private Issuer on Form 6-K (this “Form 6-K”) is being filed by Adecoagro S.A. (“Adecoagro” or the “Company”) with the Securities and Exchange Commission (the “SEC”) and is incorporated by reference into the Company’s Registration Statement on Form F-3 filed with the SEC on December 6, 2013 (File No. 333-191325) and will be deemed to be a part thereof from the date on which this Form 6-K is filed with the SEC, to the extent not superseded by documents or reports subsequently filed or furnished. The Company is filing this report on Form 6-K for the purpose of filing a copy of the Company’s unaudited condensed consolidated financial statements as of and for the nine month period ended September 30, 2016 (the “Consolidated Financial Statements”) as Exhibit 99.1. 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: November 14, 2016

Adecoagro S.A.

Condensed Consolidated Interim Financial Statements as of September 30, 2016 and for the nine-month periods ended September 30, 2016 and 2015

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 893,973 are treasury shares)

F - 2

Adecoagro S.A.

Condensed Consolidated Interim Statements of Financial Position

as of September 30, 2016 and December 31, 2015

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

						September 30,				December 31,
		Note				2016				2015
						(unaudited)				(revised – see Note 2)
ASSETS
Non-Current Assets
Property, plant and equipment			6				815,592				696,889
Investment property			7				2,767				4,796
Intangible assets			8				17,572				16,661
Biological assets			9				8,651				6,476
Deferred income tax assets			18				39,407				68,744
Trade and other receivables			11				15,674				21,795
Derivative financial instruments			10				402				-
Other assets							609				651
Total Non-Current Assets							900,674				816,012
Current Assets
Biological assets			9				131,114				105,342
Inventories			12				163,271				85,286
Trade and other receivables			11				228,444				145,011
Derivative financial instruments			10				5,676				4,849
Cash and cash equivalents			13				136,482				198,894
Total Current Assets							664,987				539,382
TOTAL ASSETS							1,565,661				1,355,394
SHAREHOLDERS EQUITY
Capital and reserves attributable to equity holders of the parent
Share capital			14				183,573				183,573
Share premium			14				940,336				937,674
Cumulative translation adjustment							(522,290	)			(568,316	)
Equity-settled compensation							16,451				16,631
Cash flow hedge							(57,054	)			(137,911	)
Treasury shares							(1,342	)			(1,936	)
Reserve from the sale of non-controlling interests in subsidiaries							41,574				41,574
Retained earnings							39,101				48,795
Equity attributable to equity holders of the parent							640,349				520,084
Non-controlling interest							7,769				7,335
TOTAL SHAREHOLDERS EQUITY							648,118				527,419
LIABILITIES
Non-Current Liabilities
Trade and other payables			16				1,441				1,911
Borrowings			17				439,188				483,651
Deferred income tax liabilities			18				14,772				15,636
Payroll and social security liabilities			19				1,194				1,236
Derivatives financial instruments			10				2,293				119
Provisions for other liabilities							3,004				1,653
Total Non-Current Liabilities							461,892				504,206
Current Liabilities
Trade and other payables			16				67,300				53,731
Current income tax liabilities							3,860				962
Payroll and social security liabilities			19				30,247				22,153
Borrowings			17				337,601				239,688
Derivative financial instruments			10				16,102				6,575
Provisions for other liabilities			20				541				660
Total Current Liabilities							455,651				323,769
TOTAL LIABILITIES							917,543				827,975
TOTAL SHAREHOLDERS EQUITY AND LIABILITIES							1,565,661				1,355,394

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 nine-month periods ended September 30, 2016 and 2015

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

		Nine-months ended September 30				Three-months ended September 30
	Note	2016		2015 (revised – see Note 2)		2016		2015 (revised – see Note 2)
		(unaudited)
Sales of manufactured products and services rendered	21	407,804		316,468		196,990		118,014
Cost of manufactured products sold and services rendered	22	(299,522)		(243,463)		(140,984)		(87,443)
Gross Profit from Manufacturing Activities		108,282		73,005		56,006		30,571
Sales of agricultural produce and biological assets	21	129,343		139,178		49,453		52,488
Cost of agricultural produce sold and direct agricultural selling expenses	22	(129,343)		(139,178)		(49,453)		(52,488)
Initial recognition and changes in fair value of biological assets and agricultural produce	9	108,924		33,428		25,430		15,095
Changes in net realizable value of agricultural produce after harvest		(6,206)		9,914		(5,837)		6,016
Gross Profit from Agricultural Activities		102,718		43,342		19,593		21,111
Margin on Manufacturing and Agricultural Activities Before Operating Expenses		211,000		116,347		75,599		51,682
General and administrative expenses	22	(36,204)		(36,345)		(14,594)		(12,860)
Selling expenses	22	(50,015)		(48,225)		(22,850)		(17,193)
Other operating (expense) / income, net	24	(22,953)		31,267		11,208		15,660
Share of loss of joint ventures		-		(2,527)		-		(1,057)
Profit from Operations Before Financing and Taxation		101,828		60,517		49,363		36,232
Finance income	25	6,975		7,234		1,904		1,564
Finance costs	25	(114,093)		(64,316)		(46,175)		(19,712)
Financial results, net	25	(107,118)		(57,082)		(44,271)		(18,148)
(Loss)/Gain  before Income Tax		(5,290)		3,435		5,092		18,084
Income tax (expense) / benefit	18	(2,901)		1,812		1,715		(2,004)
(Loss) /Gain for the Period		(8,191)		5,247		6,807		16,080
Attributable to:
Equity holders of the parent		(9,792)		4,392		6,593		16,049
Non-controlling interest		1,601		855		214		31
Income per share Attributable to the equity holders of the parent during the period:
Basic		(0.081)		0.036		0.054		0.133
Diluted		(0.081)		0.036		0.053		0.131

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 nine-month periods ended September 30, 2016 and 2015

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

		Nine-months ended September 30				Three-months ended September 30
		2016		2015 (revised – see Note 2)		2016		2015 (revised – see Note 2)
		(unaudited)
(Loss) / Profit for the Period		(8,191)		5,247		6,807		16,080
Other comprehensive income:
Exchange differences on translating foreign operations		44,857		(151,364)		(2,969)		(79,897)
Cash flow hedge		80,859		(98,861)		14,888		(69,401)
Other comprehensive income / (loss) for the period		125,716		(250,225)		11,919		(149,298)
Total comprehensive income / (loss) for the period		117,525		(244,978)		18,726		(133,218)
Attributable to:
Equity holders of the parent		117,091		(245,004)		18,650		(132,968)
Non-controlling interest		434		26		76		(250)

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 nine-month periods ended September 30, 2016 and 2015

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

		Share Capital (Note 14)				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
Changes in Accounting Standard (see Note 2)			-				-				(1,756	)			-				-				-				-				8,598				6,842				-				6,842
Revised total equity at the beginning of the financial year			183,573				933,044				(397,560	)			16,735				(43,064	)			(2,840	)			25,508				54,242				769,638				7,589				777,227
Loss for the period			-				-				-				-				-				-				-				4,392				4,392				855				5,247
Other comprehensive income:
-  Items that may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations			-				-				(150,537	)			-				-				-				-				-				(150,537	)			(827	)			(151,364	)
Cash flow hedge (*)			-				-				-				-				(98,859	)			-				-				-				(98,859	)			(2	)			(98,861	)
Other comprehensive income for the period			-				-				(150,537	)			-				(98,859	)			-				-				-				(249,396	)			(829	)			(250,225	)
Total comprehensive income for the period			-				-				(150,537	)			-				(98,859	)			-				-				4,392				(245,004	)			26				(244,978	)
Employee share options (Note 15)
- Value of employee services			-				-				-				-				-				-				-				-				-				-				-
- Exercised			-				1,504				-				(520	)			-				275				-				-				1,259				-				1,259
- Forfeited			-				-				-				(136	)			-				-				-				136				-				-				-
Restricted shares (Note 15):
- Value of employee services			-				-				-				3,160				-				-				-				-				3,160				-				3,160
- Vested			-				3,103				-				(3,751	)			-				648				-				-				-				-				-
- Forfeited			-				-				-				-				-				-				-				-				-				-				-
Purchase of own shares (Note 15)			-				(256	)			-				-				-				(60	)			-				-				(316	)			-				(316	)
Balance at September 30, 2015 (revised and unaudited)			183,573				937,395				(548,097	)			15,488				(141,923	)			(1,977	)			25,508				58,770				528,737				7,615				536,352

(*) Net of 50,960 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 nine-month periods ended September 30, 2016 and 2015 (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 14)				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, 2016			183,573				937,674				(567,133	)			16,631				(137,911	)			(1,936	)			41,574				62,923				535,395				7,335				542,730
Changes in Accounting Standard (see Note 2)			-				-				(1,183	)			-				-				-				-				(14,128	)			(15,311	)			-				(15,311	)
Revised total equity at the beginning of the financial year			183,573				937,674				(568,316	)			16,631				(137,911	)			(1,936	)			41,574				48,795				520,084				7,335				527,419
Loss for the period			-				-				-				-				-				-				-				(9,792	)			(9,792	)			1,601				(8,191	)
Other comprehensive income:
-  Items that may be reclassified subsequently to profit or loss:
Exchange differences on translating foreign operations			-				-				46,026				-				-				-				-				-				46,026				(1,169	)			44,857
Cash flow hedge (*)			-				-				-				-				80,857				-				-				-				80,857				2				80,859
Other comprehensive income for the period			-				-				46,026				-				80,857				-				-				-				126,883				(1,167	)			125,716
Total comprehensive income for the period			-				-				46,026				-				80,857				-				-				(9,792	)			117,091				434				117,525
Employee share options (Note 15)
- Value of employee services			-				-				-				-				-				-				-				-				-				-				-
- Exercised			-				323				-				(102	)			-				55				-				-				276				-				276
- Forfeited			-				-				-				(98	)			-				-				-				98				-				-				-
Restricted shares (Note 15):
- Value of employee services			-				-				-				3,925				-				-				-				-				3,925				-				3,925
- Vested			-				3,225				-				(3,905	)			-				680				-				-				-				-				-
- Forfeited			-				-				-				-				-				-				-				-				-				-				-
-Purchase of own shares  (Note 15)			-				(886	)			-				-				-				(141	)			-				-				(1,027	)			-				(1,027	)
Balance at September 30, 2016 (unaudited)			183,573				940,336				(522,290	)			16,451				(57,054	)			(1,342	)			41,574				39,101				640,349				7,769				648,118

(*) Net of 41,903 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 nine-month periods ended September 30, 2016 and 2015

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

		Note				September 30, 2016				September 30, 2015 (revised)
						(unaudited)
Cash flows from operating activities:
(Loss) / Profit for the period							(8,191	)			5,247
Adjustments for:
Income tax expense/(benefit)			18				2,901				(1,812	)
Depreciation			22				81,887				74,923
Amortization			22				482				437
Gain from of disposal of other property items			24				(77	)			(909	)
Equity settled share-based compensation granted			23				3,925				3,160
(Gain)/loss from derivative financial instruments and forwards			24, 25				38,555				(25,952	)
Interest and other expense, net			25				30,996				32,534
Initial recognition and changes in fair value of non harvested biological assets (unrealized)							(36,464	)			(5,358	)
Changes in net realizable value of agricultural produce after harvest (unrealized)							840				(2,351	)
Provision and allowances							85				(17	)
Share of loss from joint venture							-				2,527
Foreign exchange gains, net			25				15,184				3,110
Cash flow hedge – transfer from equity			25				52,186				14,838
Subtotal							182,309				100,377
Changes in operating assets and liabilities:
Increase in trade and other receivables							(77,361	)			(17,597	)
Decrease/(Increase) in inventories							46,936				(68,226	)
(Increase)/Decrease in biological assets							(107,314	)			18,973
Decrease/(Increase) in other assets							51				(810	)
(Decrease)/Increase in derivative financial instruments							(27,411	)			27,579
Increase/(decrease) in trade and other payables							11,986				(19,428	)
Increase in payroll and social security liabilities							5,888				6,797
Increase in provisions for other liabilities							1,008				389
Net cash generated in operating activities before interest and taxes paid							36,092				48,054
Income tax paid							(1,001	)			(206	)
Net cash generated from operating activities							35,091				47,848

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 nine-month periods ended September 30, 2016 and 2015 (continued)

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

		Note				September 30, 2016				September 30, 2015 (revised)
						(unaudited)
Cash flows from investing activities:
Purchases of property, plant and equipment							(92,930	)			(111,177	)
Purchases of intangible assets			8				(1,017	)			(1,014	)
Interest received			25				6,723				6,820
Proceeds from sale of property, plant and equipment							1,550				703
Proceeds from disposal of subsidiaries							3,423				3,890
Loans to joint venture							-				(7,915	)
Net cash used in investing activities							(82,251	)			(108,693	)
Cash flows from financing activities:
Proceeds from equity settled share-based compensation exercised							276				1,259
Proceeds from long-term borrowings							111,580				285,751
Payments of long-term borrowings							(162,729	)			(78,104	)
Proceeds from short-term borrowings							207,446				156,059
Payment of short-term borrowings							(144,520	)			(139,635	)
Payment of derivatives financial instruments							(2,330	)			-
Interest paid							(31,815	)			(30,728	)
Purchase of own shares							(1,028	)			(295	)
Net cash generated from financing activities							(23,120	)			194,307
Net (Decrease)/Increase in cash and cash equivalents							(70,280	)			133,462
Cash and cash equivalents at beginning of period							198,894				113,795
Effect of exchange rate changes on cash and cash equivalents							7,868				(22,908	)
Cash and cash equivalents at end of period							136,482				224,349

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

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

1. 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 interim financial statements have been approved for issue by the Board of Directors on November 10, 2016.

2. Basis of preparation and presentation

The information presented in the accompanying interim financial statements as of September 30, 2016 and for the nine-month periods ended September 30, 2016 and 2015 is unaudited and in the opinion of management reflect all adjustments necessary to present fairly the financial position of the Group as that day results of operations and cash flows for those periods. All such adjustments are of a normal recurring nature. In preparing these 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 December 31, 2015, 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, 2015, except for the changes in accounting policies explained below.

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.

Changes in accounting policies

As explained in note 2 below, the group has adopted the amendments made to IAS 16 Property, Plant and Equipment (“IAS 16”) and IAS 41 Agriculture (“IAS 41”) in relation to bearer plants this year. These amendments have resulted in changes in accounting policies and adjustments to the amounts recognized in the financial statements.

(a)   Bearer plants

In 2014, the IASB made amendments to IAS 16 and IAS 41 which distinguish bearer plants from other biological assets. Bearer plants are solely used to grow produce over their productive lives and are seen to be similar to an item of machinery. They will therefore now be accounted for under IAS 16. However, agricultural produce growing on bearer plants will remain within the scope of IAS 41 and continue to be measured at fair value less cost to sell.

The Group’s sugarcane qualify as bearer plants under the new definition in IAS 41. As required under IAS 8, the change in accounting policy has been applied retrospectively. As a consequence, the sugarcane planting and coffee plantations were reclassified to property, plant and equipment and measured at amortized cost, effective January 1, 2016 and comparative figures have been retrospectively revised accordingly. Sugarcane planting are depreciated on straight-line basis over their useful life which was reassessed from 5 to 6 years as from January 1, 2016.

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)

2. Basis of preparation and presentation (continued)

As permitted under the transitional rules, the fair value of the sugarcane as of January 1, 2014 was deemed to be their cost going forward. The difference between the fair value and the previous carrying amount was recognized in retained earnings on transition.

However, agricultural produce growing on bearer plants will remain under the line biological asset.

(b) Impact on financial statements

As a result of the changes in the entity’s accounting policies, a prior year financial statement has been revised. The following tables show the adjustments recognized for each individual line item. Line items that were not affected by the change have not been included. As a result, the sub-totals and totals disclosed cannot be recalculated from the numbers provided. As permitted under the transitional rules, the impact on the current period is not disclosed.

Statements of Income (extracts)
		September 30, 2015 (Previously stated)				Increase/ (Decrease)				September 30, 2015 (Revised)
Cost of manufactured products sold and services rendered			(211,086	)			(32,377	)			(243,463	)
Initial recognition and changes in fair value of biological assets and agricultural produce			19,679				13,749				33,428
Profit before income tax			22,063				(18,628	)			3,435
Income tax (expense) / benefit			(4,521	)			6,333				1,812
Profit   for the period			17,542				(12,295	)			5,247
Attributable to:
Equity holders of the parent			16,687				(12,295	)			4,392
Non-controlling interests			855				-				855
			17,542				(12,295	)			5,247
Basic earnings per share			0.138				(0.102	)			0.036
Diluted earnings per share			0.136				(0.100	)			0.036

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)

2. Basis of preparation and presentation (continued)

Statement of Financial Position (extracts)
		31 December 2015 (Prev. stated)				Increase/ (Decrease)				31 December 2015 (Revised)
Property, plant and equipment			540,218				156,671				696,889
Biological assets			299,270				(187,452	)			111,818
Inventories			77,703				7,583				85,286
Deferred tax assets			60,857				7,887				68,744
Total assets			978,048				(15,311	)			962,737
Retained earnings			62,923				(14,128	)			48,795
Cumulative Translation Adjustment			(567,133	)			(1,183	)			(568,316	)
Total equity			(504,210	)			(15,311	)			(519,521	)

During the nine months ended September 30, 2016, the IASB did not publish new standards that would have a material impact on the Group when they become effective.

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 September, with the exception of wheat, which is harvested from December to January. Cotton is different in that while an as typically harvested from September to August, it 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. 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.

3. 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, 2015 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 nine month period ended September 30, 2016. 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 - 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)

· 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 September 30, 2016. All amounts are shown in US dollars.

		September 30, 2016
		(unaudited)
		Functional currency
Net monetary position (Liability)/ Asset		Argentine Peso				Brazilian Reais				Uruguayan Peso				US Dollar				Total
Argentine Peso			(5,781	)			-				-				-				(5,781	)
Brazilian Reais			-				(214,906	)			-				-				(214,906	)
US Dollar			(60,374	)			(416,283	)			25,901				80,835				(369,921	)
Uruguayan Peso			-				-				(388	)			-				(388	)
Total			(66,155	)			(631,189	)			25,513				80,835				(590,996	)

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 / depreciation of the US dollar against the respective functional currencies for the period ended September 30, 2016 would have impacted positively /(negatively) in the Group’s results Before Income Tax for the period. A portion of this effect would have been 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).

		September 30, 2016
		(unaudited)
		Functional currency
Net monetary position		Argentine Peso				Brazilian Reais				Uruguayan Peso				US Dollar				Total
US Dollar			(6,037	)			(41,628	)			2,590				-				(45,075	)
(Decrease) or increase in Profit Before Income Tax			(6,037	)			(41,628	)			2,590				-				(45,075	)

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 Group expects that the cash flows will occur and affect profit or loss between 2016 and 2020.

For the period ended September 30, 2016, a total amount before income tax of US$ 70,574 gain was recognized in other comprehensive income and an amount of US$ (52,186) 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 - 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)

· 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 September 30, 2016 (all amounts are shown in US dollars):

		September 30, 2016
		(unaudited)
		Functional currency
Rate per currency denomination		Argentine Peso				Brazilian Reais				Uruguayan Peso				Total
Fixed rate:
Argentine Peso			2,353				-				-				2,353
Brazilian Reais			-				148,367				-				148,367
US Dollar			93,750				48,982				2,004				144,736
Subtotal Fixed-rate borrowings			96,103				197,349				2,004				295,456
Variable rate:
Brazilian Reais			-				94,130				-				94,130
US Dollar			6,622				380,487				-				387,109
Subtotal Variable-rate borrowings			6,622				474,617				-				481,239
Total borrowings as per analysis			102,725				671,966				2,004				776,695
Finance leases			94				-				-				94
Total borrowings at September 30, 2016			102,819				671,966				2,004				776,789

At September 30, 2016, 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 increase as follows:

		September 30, 2016
		(unaudited)
		Functional currency
Rate per currency denomination		Argentine Peso				Brazilian Reais				Uruguayan Peso				Total
Variable rate:
Brazilian Reais			-				(941	)			-				(941	)
US Dollar			(66	)			(3,805	)			-				(3,871	)
Decrease in Profit Before Income Tax			(66	)			(4,746	)			-				(4,812	)

· Credit risk

As of September 30, 2016, 5 banks accounted for more than 76% of the total cash deposited (HSBC, ING, Banco do Brasil, Banco BBVA and Heritage).

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)

3. Financial risk management (continued)

· Derivative financial instruments

The following table shows the outstanding positions for each type of derivative contract as of September 30, 2016:

§ Futures / Options

		September 30, 2016
Type of derivative contract		Quantities (thousands) (**)				Notional amount				Market Value Asset/ (Liability)				Profit  / (Loss) (*)
										(unaudited)				(unaudited)
Futures:
Sale
Corn			84				12,593				699				699
Soybean			113				38,783				281				281
Sugar			118,963				44,197				(7,007	)			(7,553	)
Wheat			(4	)			(588	)			15				15
Options:
Buy put
Sugar			30,709				5,622				2,209				(3,571	)
Sell call
Sugar			84,760				3,527				(8,383	)			(5,298	)
Sell put
Sugar			8,909				1,067				(495	)			612
Buy call
Soybean			(3	)			1,135				26				(1,109	)
Margin calls			-				-				7,364				-
Total			243,531				106,336				(5,291	)			(15,924	)

(*) Included in line "Gain from commodity derivative financial instruments" Note 24.

(**) 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 September 30, 2016, 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, 2015.

During the period ended on September 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 had maturity dates ranging between September 2015 and December 2015. The outstanding contracts resulted in the recognition of a gain amounting to US$ 0.1 million in 2015.

During the period ended September 30, 2016, 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$ 52.5 million. No contract of this kind was entered in 2015. Those contracts entered in 2016 have maturity dates ranging between March 2016 and April 2017. The outstanding contracts resulted in the recognition of a loss of US$ 6.8 million in 2016.

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)

3. Financial risk management (continued)

During the period ended on September 2016, the Group entered into several currency forward contracts with Argentinian banks in order to hedge the fluctuation of the Argentinian peso against US Dollar for a total notional amount of US$ 33.2 million. The currency forward contracts maturity date is February 2016 and September 2016. The outstanding contracts resulted in the recognition of a loss amounting to US$ 0.5 million in 2016.

During the period ended on September 2016, the Group entered into several currency forward contracts in order to hedge the fluctuation of the US Dollar against Euro for a total notional amount of US$ 15.8 million. The currency forward contracts maturity date is December 2016 and March 2017.

Gain and losses on currency forward contracts are included within “Financial results, net” in the statement of income.

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, 2015 described in Note 4 except the change mentioned in Note 2.

Impairment testing

At the date of each statement of financial position, the Group reviews the carrying amounts of its property, plant and equipment and finite lived intangible assets to determine whether there is any indication that those assets could have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent, if any, of the impairment loss. Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. The Group’s property, plant and equipment items generally do not generate independent cash flows.

In the case of Goodwill, any goodwill acquired is allocated to the cash-generating unit (‘CGU’) expected to benefit from the business combination. As prescribed by IFRS, Goodwill is tested for impairment annually, or more frequently if events or changes in circumstances indicate that the carrying amount may be impaired. The impairment review requires management to undertake certain judgments, including estimating the recoverable value of the CGU to which the goodwill relates, based on either fair value less costs-to-sell or the value-in-use, as appropriate, in order to reach a conclusion on whether it deems the goodwill is impaired or not.

For purposes of the impairment testing, each CGU represents the smallest identifiable group of assets that generate cash inflows that are largely independent of the cash inflows from other assets or group of assets.

Farmlands may be used for different activities that may generate independent cash flows. Those farmlands that are used for more than one segment activity (i.e. crops and cattle or rental income), the farmland is further subdivided into two or more CGUs, as appropriate, for purposes of impairment testing. For its properties in Brazil, management identified a farmland together with its related mill as separate CGUs. Most of the farmlands in Argentina and Uruguay are treated as single CGUs.

Based on these criteria, management identified a total amount of 39 CGUs as of September 30, 2016 and thirty-eight CGUs as of September 30, 2015.

As of September 30, 2016 and 2015, due to the fact that there were no impairment indicators, the Group only tested those CGUs with allocated goodwill in Argentina, Brazil and Uruguay.

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)

4. Critical accounting estimates and judgments (continued)

CGUs tested based on a fair-value-less-costs-to-sell model at September 30, 2016 and 2015:

As of September 30, 2016, the Group identified 11 CGUs in Argentina and Uruguay (2015: 11 CGUs) to be tested based on this model (all CGUs with allocated goodwill). Estimating the fair value less costs-to-sell is based on the best information available, and refers to the amount at which the CGU could be bought or sold in a current transaction between willing parties. Management may be assisted by the work of external advisors. When using this model, the Group applies the “sales comparison approach” as its method of valuing most properties, which relies on results of sales of similar agricultural properties to estimate the value of the CGU. This approach is based on the theory that the fair value of a property is directly related to the selling prices of similar properties.

Fair values are determined by extensive analysis which includes current and potential soil productivity of the land (the ability to produce crops and maintain livestock) projected margins derived from soil use, rental value obtained for soil use, if applicable, and other factors such as climate and location. Farmland ratings are established by considering such factors as soil texture and quality, yields, topography, drainage and rain levels. Farmland may contain farm outbuildings. A farm outbuilding is any improvement or structure that is used for farming operations. Outbuildings are valued based on their size, age and design.

Based on the factors described above, each farm property is assigned different soil classifications for the purposes of establishing a value, Soil classifications quantify the factors that contribute to the agricultural capability of the soil. Soil classifications range from the most productive to the least productive.

The first step to establishing an assessment for a farm property is a sales investigation that identifies the valid farm sales in the area where the farm is located. A price per hectare is assigned for each soil class within each farm property. This price per hectare is determined based on the quantitative and qualitative analysis mainly described above.

The results are then tested against actual sales, if any, and current market conditions to ensure the values produced are accurate, consistent and fair.

The following table shows only the 11 CGUs (2015: 11 CGUs) where goodwill was allocated at each period end and the corresponding amount of goodwill allocated to each one:

CGU / Operating segment / Country		September 30, 2016				September 30, 2015
La Carolina / Crops / Argentina			40				64
La Carolina / Cattle / Argentina			13				22
El Orden  / Crops / Argentina			60				97
El Orden  / Cattle / Argentina			5				8
La Guarida / Crops / Argentina			405				658
La Guarida / Cattle / Argentina			330				536
Los Guayacanes / Crops / Argentina			511				830
Doña Marina / Rice / Argentina			1,803				2,930
Huelen / Crops / Argentina			2,020				3,283
El Colorado / Crops / Argentina			890				1,446
El Colorado / Cattle / Argentina			130				211
Closing net book value of goodwill allocated to CGUs tested (Note 8)			6,207				10,085
Closing net book value of PPE items and other assets allocated to CGUs tested			36,901				54,272
Total assets allocated to CGUs tested			43,108				64,357

Based on the testing above, the Group determined that none of the CGUs, with allocated goodwill, were impaired at September 30, 2016 and 2015.

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

 F - 17

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 (continued)

CGUs tested based on a value-in-use model at September 30, 2016 and 2015:

As of September 30, 2016, the Group identified 3 CGUs (2015: 3 CGUs) in Brazil to be tested base on this model (all CGUs with allocated goodwill). In performing the value-in-use calculation, the Group applied pre-tax rates to discount the future pre-tax cash flows. In each case, these key assumptions have been made by management reflecting past experience and are consistent with relevant external sources of information, such as appropriate market data. In calculating value-in-use, management may be assisted by the work of external advisors.

The key assumptions used by management in the value-in-use calculations which are considered to be most sensitive to the calculation are:

Key Assumptions		September 30, 2016		September 30, 2015
Financial projections		Covers 4 years for UMA		Covers 4 years for UMA
		Cover 7 years for AVI		Cover 7 years for AVI
Yield average growth rates		0-1%		0-1%
Future pricing increases		3% per annum		1% per annum
Future cost increases		3% per annum		1% per annum
Discount rates		9.3%		6.5%
Perpetuity growth rate		2.%		2%

Discount rates are based on the risk-free rate for U. S. government bonds, adjusted for a risk premium to reflect the increased risk of investing in South America and Brazil in particular. The risk premium adjustment is assessed for factors specific to the respective CGUs and reflects the countries that the CGUs operate in.

The following table shows only the 3 CGUs where goodwill was allocated at each period end and the corresponding amount of goodwill allocated to each one:

CGU/ Operating segment		September 30, 2016				September 30, 2015
AVI / Sugar, Ethanol and Energy			4,892				3,997
UMA / Sugar, Ethanol and Energy			2,564				2,122
Closing net book value of goodwill allocated to CGUs tested (Note 8)			7,456				6,119
Closing net book value of PPE items and other assets allocated to CGUs tested			689,857				554,688
Total assets allocated to 3 CGUs tested			697,313				560,807

Based on the testing above, the Group determined that none of the CGUs, with allocated goodwill, were impaired at September 30, 2016 and 2015.

Management views these assumptions as conservative and does not believe that any reasonable change in the assumptions would cause the carrying value of these CGU’s to exceed the recoverable amount.

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 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)

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;

§ 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 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.

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 - 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)

5. Segment information (continued)

Segment analysis for the nine-month period ended September 30, 2016 (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		916		79,724		1,967		777		83,384		324,420		-		-		407,804
Cost of manufactured products sold and services rendered		(536)		(68,627)		(1,852)		(142)		(71,157)		(228,365)		-		-		(299,522)
Gross Profit from Manufacturing Activities		380		11,097		115		635		12,227		96,055		-		-		108,282
Sales of agricultural produce and biological assets		108,732		1,165		19,446		-		129,343		-		-		-		129,343
Cost of agricultural produce sold and direct agricultural selling expenses		(108,732)		(1,165)		(19,446)		-		(129,343)		-		-		-		(129,343)
Initial recognition and changes in fair value of biological assets and agricultural produce		42,852		10,047		3,707		128		56,734		52,190		-		-		108,924
Changes in net realizable value of agricultural produce after harvest		(6,206)		-		-		-		(6,206)		-		-		-		(6,206)
Gross Profit from Agricultural Activities		36.646		10,047		3,707		128		50,528		52,190		-		-		102,718
Margin on Manufacturing and Agricultural Activities Before Operating Expenses		37,026		21,144		3,822		763		62,755		148,245		-		-		211,000
General and administrative expenses		(1,934)		(2,283)		(740)		(195)		(5,152)		(15,169)		-		(15,883)		(36,204)
Selling expenses		(4,421)		(9,238)		(476)		(46)		(14,181)		(35,803)		-		(31)		(50,015)
Other operating (loss)/income, net		(8,796)		314		468		8,137		123		(22,877)		-		(199)		(22,953)
Share of loss of joint ventures		-		-		-		-		-		-		-		-		-
Profit from Operations Before Financing and Taxation		21,875		9,937		3,074		8,659		43,545		74,396		-		(16,113)		101,828
Depreciation and amortization		(1,029)		(1,880)		(723)		(156)		(3,788)		(78,581)		-		-		(82,369)
Initial recognition and changes in fair value of biological assets and agricultural produce (unrealized)		9,886		4,017		1,001		128		15,032		21,432		-		-		36,464
Initial recognition and changes in fair value of biological assets and agricultural produce (realized)		32,966		6,030		2,706		-		41,702		30,758		-		-		72,460
Changes in net realizable value of agricultural produce after harvest (unrealized)		(840)		-		-		-		(840)		-		-		-		(840)
Changes in net realizable value of agricultural produce after harvest (realized)		(5,366)		-		-		-		(5,366)		-		-		-		(5,366)
Farmlands and farmland improvements, net		70,132		16,883		192		5,690		92,897		26,894		-		-		119,791
Machinery, equipment and other fixed assets, net		3,941		13,895		7,645		496		25,977		433,004		-		-		459,001
Bearer plants, net		-		-		-		1,866		1,866		213,403		-		-		215,249
Work in progress		1,403		4,892		1,423		-		7,718		13,833		-		-		21,551
Investment property		-		-		-		2,767		2,767		-		-		-		2,767
Goodwill		3,925		1,803		-		1,206		6,934		6,727		-		-		13,661
Biological assets		11,394		12,451		7,180		2,482		33,507		106,258		-		-		139,765
Inventories		36,414		21,736		2,300		-		60,450		102,821		-		-		163,271
Total segment assets		127,209		71,684		18,740		14,483		232,116		902,940		-		-		1,135,056
Borrowings		71,453		34,538		2,396		460		108,847		667,942		-		-		776,789
Total segment liabilities		71,453		34,538		2,396		460		108,847		667,942		-		-		776,789

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)

5. Segment information (continued)

Segment analysis for the nine-month period ended September 30, 2015 (revised and 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		787		65,684		1,041		988		68,500		247,968		-		-		316,468
Cost of manufactured products sold and services rendered		(438)		(53,839)		(1,108)		(536)		(55,921)		(187,542)		-		-		(243,463)
Gross Profit from Manufacturing Activities		349		11,845		(67)		452		12,579		60,426		-		-		73,005
Sales of agricultural produce and biological assets		114,487		342		24,349		-		139,178		-		-		-		139,178
Cost of agricultural produce sold and direct agricultural selling expenses		(114,487)		(342)		(24,349)		-		(139,178)		-		-		-		(139,178)
Initial recognition and changes in fair value of biological assets and agricultural produce		7,016		3,144		6,159		(24)		16,295		17,133		-		-		33,428
Changes in net realizable value of agricultural produce after harvest		9,914		-		-		-		9,914		-		-		-		9,914
Gross Profit / (loss) from Agricultural Activities		16,930		3,144		6,159		(24)		26,209		17,133		-		-		43,342
Margin on Manufacturing and Agricultural Activities Before Operating Expenses		17,279		14,989		6,092		428		38,788		77,559		-		-		116,347
General and administrative expenses		(2,656)		(2,366)		(1,108)		(55)		(6,185)		(14,499)		-		(15,661)		(36,345)
Selling expenses		(4,283)		(9,489)		(514)		(25)		(14,311)		(33,368)		-		(546)		(48,225)
Other operating income/(loss), net		14,065		692		(563)		6		14,200		16,816		-		251		31,267
Share of loss of joint ventures		(2,527)		-		-		-		(2,527)		-		-		-		(2,527)
Profit from Operations Before Financing and Taxation		21,878		3,826		3,907		354		29,965		46,508		-		(15,956)		60,517
Depreciation and amortization		(1,428)		(2,285)		(1,114)		(216)		(5,043)		(70,317)		-		-		(75,360)
Initial recognition and changes in fair value of biological assets and agricultural produce (unrealized)		(295)		899		-		171		775		4,583		-		-		5,358
Initial recognition and changes in fair value of biological assets and agricultural produce (realized)		7,311		2,245		6,159		(195)		15,520		12,550		-		-		28,070
Changes in net realizable value of agricultural produce after harvest (unrealized)		2,351		-		-		-		2,351		-		-		-		2,351
Changes in net realizable value of agricultural produce after harvest (realized)		7,563		-		-		-		7,563		-		-		-		7,563
As of  December 31,2015:
Farmlands and farmland improvements, net		75,702		16,053		289		5,265		97,309		22,359		-		-		119,668
Machinery, equipment and other fixed assets, net		3,853		14,367		9,422		611		28,253		369,184		-		-		397,437
Bearer plants, net		-		-		-		1,552		1,552		155,119		-		-		156,671
Work in progress		935		5,604		495		-		7,034		16,079		-		-		23,113
Investment property		-		-		-		4,796		4,796		-		-		-		4,796
Goodwill		4,609		2,117		-		1,192		7,918		5,592		-		-		13,510
Biological assets		22,536		23,131		6,786		288		52,741		59,077		-		-		111,818
Inventories		27,770		13,584		1,741		-		43,095		42,191		-		-		85,286
Total segment assets		135,405		74,856		18,733		13,704		242,698		669,601		-		-		912,299
Borrowings		54,321		24,932		5,318		1,273		85,844		637,495		-		-		723,339
Total segment liabilities		54,321		24,932		5,318		1,273		85,844		637,495		-		-		723,339

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)

6. Property, plant and equipment

Changes in the Group’s property, plant and equipment in the nine-month periods ended September 30, 2016 and 2015 were as follows:

		Farmlands				Farmland improvements				Buildings and facilities				Machinery, equipment, furniture and Fittings				Bearer plants				Others				Work in  progress				Total
Nine-month period ended September 30, 2015 (revised)
Opening net book amount.			174,420				5,401				194,771				277,586				214,677				4,551				120,176				991,582
Exchange differences			(28,887	)			(527	)			(68,585	)			(108,328	)			(71,695	)			(1,315	)			(18,132	)			(297,469	)
Additions			-				48				8,956				37,817				33,739				1,872				36,727				119,159
Transfers			-				895				40,742				65,844				6				385				(107,872	)			-
Disposals			-				-				(209	)			(654	)			-				(57	)			-				(920	)
Reclassification to non-income  tax credits (*)			-				-				(803	)			(737	)			-				-				(4,317	)			(5,857	)
Transfers to investment property			(580	)			-				-				-				-				-				-				(580	)
Depreciation (Note 22)			-				(965	)			(7,014	)			(41,919	)			(23,938	)			(1,087	)			-				(74,923	)
Closing net book amount			144,953				4,852				167,858				229,609				152,789				4,349				26,582				730,992
At September 30, 2015 (revised and unaudited)
Cost			144,953				14,271				267,095				535,342				176,727				13,628				26,582				1,176,598
Accumulated depreciation			-				(9,419	)			(97,237	)			(305,733	)			(23,938	)			(9,279	)			-				(445,606	)
Net book amount			144,953				4,852				167,858				229,609				152,789				4,349				26,582				730,992
Nine-month period ended September 30, 2016
Opening net book amount			114,527				5,141				167,468				226,049				156,671				3,920				23,113				696,889
Exchange differences			(3,347	)			(725	)			27,813				47,426				33,995				188				(392	)			104,958
Additions			-				-				5,857				26,683				50,952				1,245				12,905				97,642
Transfers			-				3,866				4,154				6,016				-				-				(14,036	)			-
Disposals			-				-				(7	)			(2,029	)			-				(78	)			-				(2,114	)
Reclassification to non-income  tax credits (*)			-				-				(966	)			(226	)			-				-				(39	)			(1,231	)
Transfers from  investment property			1,335				-				-				-				-				-				-				1,335
Depreciation (Note 22)			-				(1,006	)			(11,101	)			(42,341	)			(26,349	)			(1,090	)			-				(81,887	)
Closing net book amount			112,515				7,276				193,218				261,578				215,269				4,185				21,551				815,592
At September 30, 2016 (unaudited)
Cost			112,515				18,030				304,324				625,907				420,624				14,899				21,551				1,517,850
Accumulated depreciation			-				(10,754	)			(111,106	)			(364,329	)			(205,355	)			(10,714	)			-				(702,258	)
Net book amount			112,515				7,276				193,218				261,578				215,269				4,185				21,551				815,592

(*) Brazilian federal tax law allows entities to take a percentage of the total cost of the assets purchased as a tax credit. As of September 30, 2016, 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 - 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)

6. Property, plant and equipment (continued)

An amount of US$ 78,248 and US$ 70,918 of depreciation are included in “Cost of manufactured products sold and services rendered” for the nine-month periods ended September 30, 2016 and 2015, respectively. An amount US$ 3,147 and US$ 3,941 of depreciation are included in “General and administrative expenses” for the nine-month periods ended September 30, 2016 and 2015, respectively. An amount of US$ 492 and US$ 501 of depreciation are included in “Selling expenses” for the nine-month periods ended September 30, 2016 and 2015, respectively.

As of September 30, 2016, borrowing costs of US$ 1,334 (September 30, 2015: US$ 1,054) 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$ 18,980 as of September 30, 2016.

As of September 30, 2016 included within property, plant and equipment balances are US$ 480,285 related to the net book value of assets under finance leases.

7. Investment property

Investment property consists of farmland for rental, which do not depreciate.

Changes in the Group’s investment property in the nine-month periods ended September 30, 2016 and 2015 were as follows:

		September 30, 2016				September 30, 2015
		(unaudited)
Beginning of the period			4,796				6,675
Reclassification to property, plant and equipment			(1,335	)			580
Exchange differences			(694	)			(617	)
End of the period			2,767				6,638

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

		September 30, 2016				September 30, 2015
		(unaudited)
Rental income			777				988

As of September 30, 2016, the fair value of investment property was US$ 57 million (2015: US$ 53 million).

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)

8. Intangible assets

Changes in the Group’s intangible assets in the nine-month periods ended September 30, 2016 and 2015 were as follows:

		Goodwill				Trademarks				Software				Others				Total
Nine-month period ended September 30, 2015
Opening net book amount			20,172				959				2,634				13				23,778
Exchange differences			(3,968	)			(10	)			(860	)			(18	)			(4,856	)
Additions			-				-				973				41				1,014
Amortization charge (i) (Note 22)			-				-				(429	)			(8	)			(437	)
Closing net book amount			16,204				949				2,318				28				19,499
At September 30,2015 (unaudited)
Cost			16,204				2,488				4,023				165				22,880
Accumulated amortization			-				(1,539	)			(1,705	)			(137	)			(3,381	)
Net book amount			16,204				949				2,318				28				19,499
Nine-month period ended September 30, 2016
Opening net book amount			13,510				930				2,200				21				16,661
Exchange differences			151				(6	)			229				2				376
Additions			-				-				987				30				1,017
Amortization charge (i) (Note 22)			-				-				(450	)			(32	)			(482	)
Closing net book amount			13,661				924				2,966				21				17,572
At September 30, 2016 (unaudited)
Cost			13,661				2,463				5,260				199				21,583
Accumulated amortization			-				(1,539	)			(2,294	)			(178	)			(4,011	)
Net book amount			13,661				924				2,966				21				17,572

(i)    For the nine-month period ended September 30, 2016 an amount of US$ 450 and US$ 32 of amortization charges are included in “General and administrative expenses” and “Selling expenses”, respectively (US$ 429 and US$ 8 rot the comparative period).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, 2016 (see Note 4).

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)

9. Biological assets

Changes in the Group’s biological assets in the nine-month periods ended September 30, 2016 and 2015 were as follows:

		September 30, 2016				September 30, 2015 (revised)
		(unaudited)
Beginning of the period			111,818				124,735
Increase due to purchases			1,713				4
Initial recognition and changes in fair value of biological assets			108,924				33,428
Decrease due to harvest			(220,789	)			(183,293	)
Decrease due to disposals			(2,211	)			(2,728	)
Decrease due to sales of agricultural produce			(17,234	)			(21,621	)
Costs incurred during the period			148,912				156,946
Exchange differences			8,632				(26,595	)
End of the period			139,765				80,876

Biological assets as of September 30, 2016 and December 31, 2015 were as follows:

		September 30, 2016				December 31, 2015
		(unaudited)				(revised)
Non-current
Cattle for dairy production			6,747				6,459
Other cattle			1,904				17
			8,651				6,476
Current
Other cattle			1,011				598
Sown land – crops			11,394				22,536
Sown land – rice			12,451				23,131
Sown land – sugarcane			106,258				59,077
			131,114				105,342
Total biological assets			139,765				111,818

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)

10. Financial instruments

As of September 30, 2016, 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 September 30, 2016 and their allocation to the fair value hierarchy:

		2016
		Level 1				Level 2				Total
Assets
Derivative financial instruments			2,452				3,626				6,078
Total assets			2,452				3,626				6,078
Liabilities
Derivative financial instruments			(15,106	)			(10,653	)			(25,759	)
Total liabilities			(15,106	)			(10,653	)			(25,759	)

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)

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:

Class		Pricing Method		Parameters		Pricing Model		Level		Total
Futures		Quoted price		-		-		1		(6,012)
Options		Quoted price		-		-		1		(6,643)
Foreign-currency interest-rate swaps		Theoretical price		Swap curve Money market interest-rate curve Foreign-exchange curve		Present value method		2		(40)
Interest-rate swaps		Theoretical price		Swap curve; Money market interest-rate curve		Present value method		2		152
NDF		Quoted price		-		-		2		(7,138)
										(19,681)
Margin calls		-		-		-		-		7,364
										(12,317)

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)

11. Trade and other receivables, net

		September 30, 2016				December 31, 2015
		(unaudited)
Non current
Trade receivables			1,639				1,764
Trade receivables – net			1,639				1,764
Advances to suppliers			1,760				8,476
Income tax credits			6,522				6,428
Non-income tax credits (i)			1,498				1,914
Judicial deposits			2,467				2,105
Other receivables			1,788				1,108
Non current portion			15,674				21,795
Current
Trade receivables			90,806				55,846
Less: Allowance for trade receivables			(489	)			(481	)
Trade receivables – net			90,317				55,365
Prepaid expenses			3,319				3,914
Advance to Suppliers			38,269				12,182
Income tax credits			7,027				5,438
Non-income tax credits (i)			59,627				42,914
Cash collateral			2,187				3,037
Receivables from related parties (Note 27)			8,742				8,504
Receivable from disposal of subsidiary			-				2,997
Other receivables			18,956				10,660
Subtotal			138,127				89,646
Current portion			228,444				145,011
Total trade and other receivables, net			244,118				166,806

(i) Includes US$ 1,231 for the nine month period ended September 30, 2016 reclassified from property, plant and equipment (for the year ended December 31, 2015: US$ 941).

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)

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):

		September 30, 2016				December 31, 2015
		(unaudited)
Currency
US Dollar			87,005				30,191
Argentine Peso			45,041				36,210
Uruguayan Peso			758				566
Brazilian Reais			111,314				99,839
			244,118				166,806

As of September 30, 2016 trade receivables of US$ 16,765 (December 31, 2015: US$ 7,542) were past due but not impaired. The ageing analysis of these receivables indicates that US$ 4,856 and US$ 549 are over 6 months in September 30, 2016 and December 31, 2015, respectively. From the US$ 4,856, we initiated arbitration proceedings for US$ 4,6 million, for which we have an escrow account as collateral.

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

		September 30, 2016				December 31, 2015
		(unaudited)				(revised)
Raw materials			35,832				31,833
Finished goods			108,221				49,457
Stocks held by third parties			18,762				3,717
Others			456				279
			163,271				85,286

The cost of inventories recognized as expense are included in ‘Cost of manufactured products sold and services rendered’ amounted to US$ 299,522 for the nine-month period ended September 30, 2016. The cost of inventories recognized as expense and included in ‘Cost of agricultural produce sold and direct agricultural selling expenses’ amounted to US$ 95,199 for the nine-month period ended September 30, 2016.

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)

13. Cash and cash equivalents

		September 30, 2016				December 31, 2015
		(unaudited)
Cash at bank and on hand			114,518				185,864
Short-term bank deposits			21,964				13,030
			136,482				198,894

14. Shareholder´s Contributions

		Number of shares  (thousands)				Share capital  and share premium
At January 1, 2015			122,382				1,116,617
Employee share options exercised (Note 15)			-				-
Restricted share vested			-				-
At September 30,2015			122,382				1,116,617
At January 1, 2016			122,382				1,121,247
Employee share options exercised (Note 15)			-				323
Restricted share vested			-				3,225
Purchase of own shares			-				(886	)
At September 30, 2016			122,382				1,123,909

15. 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 granted 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

No expense was accrued for both periods under the Options Schemes.

As of September 30, 2016 36,768 options (September 30, 2015: 183,007) were exercised, and 23,716 (September 30, 2015: 31,230) were forfeited.

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)

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

(b) Restricted Share and Restricted Stock Unit Plan

As of September 30, 2016, the Group recognized compensation expense US$ 3.9 million related to the restricted shares granted under the Restricted Share Plan (September 30, 2015: US$ 3.2 million).

During the nine month period ended September 30 2016, 464,139 Restricted Share and Restricted Stock Units were granted (September 30, 2015: 624,670), 453,001 vested (September 30, 2015: 432,204), and 21,113 were forfeited (September 30, 2015: 32,217).

16. Trade and other payables

		September 30, 2016				December 31, 2015
		(unaudited)
Non-current
Payable from acquisition of property, plant and equipment (i)			1,042				1,563
Other payables			399				348
			1,441				1,911
Current
Trade payables			59,193				47,035
Advances from customers			4,052				2,838
Amounts due to related parties (Note 27)			409				465
Taxes payable			2,692				2,716
Other payables			954				677
			67,300				53,731
Total trade and other payables			68,741				55,642

(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)

17. Borrowings

		September 30, 2016				December 31, 2015
		(unaudited)
Non-current
Bank borrowings			439,167				483,583
Obligations under finance leases			21				68
			439,188				483,651
Current
Bank overdrafts			1,216				9
Bank borrowings			336,312				239,468
Obligations under finance leases			73				211
			337,601				239,688
Total borrowings			776,789				723,339

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

As of September 30, 2016, total bank borrowings include collateralized liabilities of US$ 688,594 (December 31, 2015: US$ 669,109). 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:

		September 30, 2016				December 31,  2015
		(unaudited)
Fixed rate:
Less than 1 year			131,076				89,918
Between 1 and 2 years			48,502				31,096
Between 2 and 3 years			43,856				30,197
Between 3 and 4 years			25,001				22,497
Between 4 and 5 years			21,256				18,779
More than 5 years			25,765				34,492
			295,456				226,979
Variable rate:
Less than 1 year			206,452				149,559
Between 1 and 2 years			175,315				109,488
Between 2 and 3 years			78,433				102,351
Between 3 and 4 years			7,053				79,341
Between 4 and 5 years			6,857				44,233
More than 5 years			7,129				11,109
			481,239				496,081
			776,695				723,060

A detail of the borrowings breakdown by currency is included in Note 3 – Interest rate risk.

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. Taxation

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

		September 30, 2016				September 30, 2015 (revised)
		(unaudited)
Current income tax			(5,783	)			(1,893	)
Deferred income tax			2,882				3,705
Income tax (expense) / benefit			(2,901	)			1,812

There has been no change in the statutory tax rates in the countries where the Group operates since December 31, 2015.

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

		September 30, 2016				September 30, 2015 (revised)
		(unaudited)
Beginning of period asset			53,108				2,437
Exchange differences			10,548				(15,777	)
Tax charge relating to cash flow hedge (i)			(41,903	)			50,962
Income tax expense (expense) / benefit			2,882				3,705
End of period asset			24,635				41,327

(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 US$ 52,186 loss for the nine-month period ended September 30, 2016.

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:

		September 30, 2016				September 30, 2015 (revised)
		(unaudited)
Tax calculated at the tax rates applicable to profits in the respective countries			1,511				(1,276	)
Non-deductible items			(2,432	)			3,105
Non-deductible items – Changes in estimates or previous year			(1,180	)			-
Tax losses where no deferred tax asset was recognized			(112	)			-
Others			(688	)			(17	)
Income tax (expense) / benefit			(2,901	)			1,812

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)

19. Payroll and social security liabilities

		September 30, 2016				December 31,  2015
		(unaudited)
Non-current
Social security payable			1,194				1,236
			1,194				1,236
Current
Salaries payable			12,051				4,755
Social security payable			2,953				2,766
Provision for vacations			11,683				9,877
Provision for bonuses			3,560				4,755
			30,247				22,153
Total payroll and social security liabilities			31,441				23,389

20. 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, 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)

21. Sales

		September 30, 2016				September 30, 2015
		(unaudited)
Sales of manufactured products and services rendered:
Ethanol			107,834				100,332
Sugar			186,575				109,205
Rice			78,811				64,580
Energy			29,791				38,431
Powder milk			1,575				1,041
Operating leases			799				986
Services			1,254				1,196
Others			1,165				697
			407,804				316,468
Sales of agricultural produce and biological assets:
Soybean			56,108				63,021
Cattle for dairy production			2,212				2,728
Corn			35,609				28,528
Cotton			1,275				1,261
Milk			17,234				21,621
Wheat			6,910				9,831
Chia			-				175
Peanut			-				691
Sunflower			6,364				9,906
Barley			723				625
Sorghum			-				110
Seeds			273				385
Others			2,635				296
			129,343				139,178
Total sales			537,147				455,646

In September 2016, includes sales of soybean, corn, rice, sugar, ethanol, cotton, sunflower, powder milk and others produced by third parties for an amount of US$ 792; US$ 2,915; US$ 17,921; US$ 50,016, US$ 1, US$ 37, US$ 2,407 , US$ 1,519 and US$ 430 respectively.

In September 2015, includes sales of soybean, corn, rice, powder milk, sugar and energy produced by third parties for an amount of US$ 1,042; US$ 37; US$ 7,394; US$586; US$ 21,910 and US$ 2 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 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)

21. Sales (continued)

The notional amount of these contracts is US$ 115.5 million as of September 30, 2016 (September 30, 2015: US$ 92.0 million) comprised primarily of 79.7 tons of sugar (U$S 57.2), 8.6 m³ of ethanol (US$ 5.4 million), 8.6 mhw of energy (U$S 8.8 million) and 7.0 tons of soybean (U$S 9.8 million), 7.7 tons of corn (US$ 6.0 million), 3.8 tons of wheat (US$ 2.1 million), and 0.1 of others crops (US$ 0.4 million) which expire between September 2016 and July 2017.

22. 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:

		September 30, 2016				September 30, 2015 (revised)
		(unaudited)
Cost of agricultural produce and biological assets sold			114,645				125,708
Raw materials and consumables used in manufacturing activities			177,105				128,778
Services			8,739				7,809
Salaries and social security expenses (Note 23)			47,721				43,495
Depreciation and amortization			82,369				75,360
Taxes (*)			2,713				2,582
Maintenance and repairs			9,276				7,432
Lease expense and similar arrangements(**)			1,366				1,201
Freights			31,688				31,445
Export taxes / selling taxes			16,084				22,616
Fuel and lubricants			9,094				5,886
Others			14,284				14,899
Total expenses by nature			515,084				467,211

(*) Excludes export taxes and selling taxes.

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

For the nine-month period ended September 30, 2016, an amount of US$ 299,522 is included as “cost of manufactured products sold and services rendered” (September 30, 2015: US$ 243,463); an amount of US$129,343 is included as “cost of agricultural produce sold and direct agricultural selling expenses” (September 30, 2015: US$ 139,178); an amount of US$ 36,204 is included in “general and administrative expenses” (September 30, 2015: US$ 36,345); and an amount of US$ 50,015 is included in “selling expenses” as described above (September 30, 2015: US$ 48,225).

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. Salaries and social security expenses

		September 30, 2016				September 30, 2015
		(unaudited)
Wages and salaries			32,288				30,600
Social security costs			11,508				9,735
Equity-settled share-based compensation			3,925				3,160
			47,721				43,495
Number of employees			8,364				8,326

24. Other operating (loss)/income, net

		September 30, 2016				September 30, 2015
		(unaudited)
(Loss)/Gain from commodity derivative financial instruments			(31,701	)			30,238
(Loss)/Gain from onerous contracts – forwards			(15	)			2
Gain from disposal of  other property items			77				909
Settlement agreement (Nota 26)			8,131				-
Others			555				118
			(22,953	)			31,267

25. Financial results, net

		September 30, 2016				September 30, 2015
		(unaudited)
Finance income:
- Interest income			6,723				6,820
- Other income			252				414
Finance income			6,975				7,234
Finance costs:
- Interest expense			(35,428	)			(36,961	)
- Cash flow hedge – transfer from equity			(52,186	)			(14,838	)
- Foreign exchange losses, net			(15,184	)			(3,110	)
- Taxes			(1,913	)			(2,312	)
-Loss from interest rate/foreign exchange rate derivative financial			(6,839	)			(4,288	)
- Other expenses			(2,543	)			(2,807	)
Finance costs			(114,093	)			(64,316	)
Total financial results, net			(107,118	)			(57,082	)

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)

26. Disclosure of leases and similar arrangements

The Group as lessor - Operating leases

On September 2013, Marfrig Argentina S.A. (“Marfrig Argentina”), the argentine subsidiary of the Brazilian company Marfrig Alimentos S.A. (“Marfrig Alimentos"), unilaterally early terminated the lease agreements for grazing land entered into with the Group on December 2009. The termination of the lease agreements was effective in the fourth quarter of 2013, and on April 2014, the Group filed an arbitration proceeding against Marfrig Argentina and Marfrig Alimentos claiming unpaid invoices for US$ 0.5 million and indemnification for early termination. On September 2016, the Parties settled the arbitration proceedings in the amount of US$ 9 million to be paid in two installments. As of today, we have collected US$ 7 million.

This settlement, net of the unpaid invoices and other expenses resulted in an income of US$ 8.1 million reflected in the line item Other operating income.

27. Related-party transactions

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

						Income (loss) included in  the statement of income				Balance receivable (payable)
Related party		Relationship		Description of transaction		September 30, 2016		September 30, 2015		September 30, 2016		December 31, 2015
						(unaudited)		(unaudited)		(unaudited)
Mario Jorge de Lemos Vieira/ Cia Agropecuaria Monte Alegre/ Alfenas Agricola Ltda/ Marcelo Weyland Barbosa Vieira/ Paulo Albert Weyland Vieira				Receivables (Note 11)		-		-		229		783
		(i)		Cost of manufactured products sold and services rendered (ii)		-		(195)		-		-
				General and Administrative expenses		-		-		-		-
				Payables (Note 16)		-		-		(368)		(23)
CHS Agro		Joint venture		Services		370		42		-		-
				Sales of good		-		2,245		-		-
				Interest income		69		137		-		-
				Receivables (Note 11)		-		-		8,513		7,990
				Payables (Note 16)		-		-		-		-
Directors and senior management		Employment		Compensation selected employees		(5,994)		(5,670)		(16,726)		(14,530)

(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 - 38