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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer


Pursuant to Rule 13a-16 or 15d-16 under the Securities Exchange Act of 1934

For the month of August, 2011

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 þ Form 40-F o

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): o

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): o

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 o No þ

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-___________.

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AS OF JUNE 30, 2011 AND FOR THE SIX-MONTH PERIODS ENDED JUNE 30, 2011 AND 2010

This report on Form 6-K is being furnished for the purpose of providing a copy of the registrant’s condensed consolidated financial statements as of June 30, 2011 and for the six-month periods ended June 30, 2011 and 2010 (the “Consolidated Financial Statements”). 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.

Report of Independent Registered Public Accounting Firm

To the Shareholders of
Adecoagro S.A.

We have reviewed the accompanying condensed consolidated interim statements of financial position of Adecoagro S.A. and its subsidiaries as of June 30, 2011, and the related condensed consolidated interim statements of income and comprehensive income for each of the three-month and six-month periods ended June 30, 2011 and 2010 and the condensed consolidated interim statements of changes in shareholders´ equity and of cash flows for the six-month periods ended June 30, 2011 and 2010. This interim financial information is the responsibility of the Company’s management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the accompanying condensed consolidated interim financial statements for them to be in conformity with International Accounting Standard 34, ‘Interim Financial Reporting’, as issued by the International Accounting Standards Board.

Buenos Aires, Argentina
August 12, 2011

PRICE WATERHOUSE & CO. S.R.L.



	by	(Partner)
	Mariano C. Tomatis

Adecoagro S.A.
Condensed Consolidated Interim Statements of Financial Position
as of June 30, 2011 and December 31, 2010 and 2009

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


		June 30,		December 31,		December 31,
	Note	2011		2010		2009
		(unaudited)		(restated) (*)		(restated) (*)
ASSETS
Non-Current Assets
Property, plant and equipment	6		781,737		751,992		682,878
Investment property			20,568		21,417		21,246
Intangible assets	7		29,222		28,653		21,859
Biological assets	8		162,937		133,593		190,714
Investments in joint ventures			5,453		6,271		6,506
Deferred income tax assets	16		56,792		67,463		45,113
Trade and other receivables	9		25,265		30,752		22,065
Other assets			25		26		34

Total Non-Current Assets			1,081,999		1,040,167		990,415

Current Assets
Biological assets	8		24,757		53,164		39,740
Inventories	10		135,833		57,170		57,902
Trade and other receivables	9		134,237		119,205		106,212
Derivative financial instruments			215,604		876		99
Short-term investments			48,000		—		—
Cash and cash equivalents	11		209,006		70,269		74,806

Total Current Assets			767,437		300,684		278,759

TOTAL ASSETS			1,849,436		1,340,851		1,269,174

SHAREHOLDERS EQUITY
Capital and reserves attributable to equity holders of the parent
Share capital	12		180,104		120,000		120,000
Share premium			926,269		563,343		563,343
Cumulative translation adjustment			42,108		11,273		2,516
Equity-settled compensation			13,713		13,659		11,914
Retained earnings			28,904		257		44,161

Equity attributable to equity holders of the parent			1,191,098		708,532		741,934

Non controlling interest			15,762		14,570		15,222

TOTAL SHAREHOLDERS EQUITY			1,206,860		723,102		757,156


LIABILITIES
Non-Current Liabilities
Trade and other payables	14		11,224		11,785		6,822
Borrowings	15		254,060		250,672		203,134
Derivative financial instruments			—		—		280
Deferred income tax liabilities	16		93,714		111,495		107,045
Payroll and social security liabilities	17		1,230		1,178		1,106
Provisions for other liabilities			4,265		4,606		3,326

Total Non-Current Liabilities			364,493		379,736		321,713

Current Liabilities
Trade and other payables	14		74,129		69,236		62,098
Current income tax liabilities			4,063		978		222
Payroll and social security liabilities	17		18,296		15,478		10,079
Borrowings	15		179,016		138,800		103,647
Derivative financial instruments			1,309		8,920		12,607
Provisions for other liabilities			1,270		4,601		1,652

Total Current Liabilities			278,083		238,013		190,305

TOTAL LIABILITIES			642,576		617,749		512,018

TOTAL SHAREHOLDERS EQUITY AND LIABILITIES			1,849,436		1,340,851		1,269,174


(*)		See Note 2.3.

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

F - 4

Adecoagro S.A.
Condensed Consolidated Interim Statements of Income
for the three-month and six-month periods ended June 30, 2011 and 2010

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


		Six-months ended June 30						Three-months ended June 30
	Note	2011			2010			2011			2010
		(unaudited)
Sales of manufactured products and services rendered	19		146,178			86,660			119,837			53,479
Cost of manufactured products sold and services rendered	20		(96,086	)		(75,560	)		(74,142	)		(40,313	)

Gross Profit/(Loss) from Manufacturing Activities			50,092			11,100			45,695			13,166

Sales of agricultural produce and biological assets	19		88,693			68,641			56,782			49,472
Cost of agricultural produce sold and direct agricultural selling expenses	20		(88,693	)		(68,641	)		(56,782	)		(49,472	)
Initial recognition and changes in fair value of biological assets and agricultural produce			55,969			(53,556	)		(2,489	)		(51,589	)
Changes in net realizable value of agricultural produce after harvest.			4,069			118			1,449			(1,516	)

Gross Profit/(Loss) from Agricultural Activities			60,038			(53,438	)		(1,040	)		(53,105	)

Margin on Manufacturing and Agricultural Activities Before Operating Expenses			110,130			(42,338	)		44,655			(39,939	)

General and administrative expenses	20		(33,508	)		(28,655	)		(16,201	)		(14,672	)
Selling expenses	20		(24,074	)		(17,455	)		(18,204	)		(11,451	)
Other operating (loss)/ income, net	22		(304	)		9,588			5,392			(1,942	)
Share of loss of joint ventures			(350	)		(220	)		(350	)		(220	)

Gain/(Loss) from Operations Before Financing and Taxation			51,894			(79,080	)		15,292			(68,224	)

Finance income	23		13,611			2,408			10,188			1,554
Finance costs	23		(24,654	)		(18,558	)		(9,346	)		(9,396	)

Financial results, net	23		(11,043	)		(16,150	)		842			(7,842	)

Gain/(Loss) Before Income Tax			40,851			(95,230	)		16,134			(76,066	)

Income tax (charge) / benefit	16		(12,754	)		24,650			(3,398	)		22,302

Gain/(Loss) for the Period			28,097			(70,580	)		12,736			(53,764	)


Attributable to:
Equity holders of the parent			27,569			(69,170	)		12,486			(52,786	)
Non controlling interest			528			(1,410	)		250			(978	)

Gains/(Losses) per share for loss attributable to the equity holders of the parent during the period:
Basic	24		0.2320			(0.5764	)		0.1040			(0.4399	)
Diluted	24		0.2304			(0.5764	)		0.1033			(0.4399	)

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

F - 5

Adecoagro S.A.
Condensed Consolidated Interim Statements of Comprehensive Income
for the three-month and six-month periods ended June 30, 2011 and 2010

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


	Six-months ended June 30					Three-months ended June 30
	2011		2010			2011		2010
			(unaudited)
Gain/(Loss) for the period		28,097		(70,580	)		12,736		(53,764	)
Other comprehensive income:
Exchange differences on translating foreign operations		31,477		(18,500	)		21,927		(8,261	)

Other comprehensive income/ (loss) for the period		31,477		(18,500	)		21,927		(8,261	)

Total comprehensive income/(loss) for the period		59,574		(89,080	)		34,663		(62,025	)


Attributable to:
Equity holders of the parent		58,404		(87,293	)		33,971		(60,887	)
Non controlling interest		1,170		(1,787	)		692		(1,138	)

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

F - 6

Adecoagro S.A.
Condensed Consolidated Interim Statements of Changes in Shareholders’ Equity
for the six-month periods ended June 30, 2011 and 2010

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


	Attributable to equity holders of the parent
					Cumulative												Non			Total
	Share		Share		Translation			Equity-settled			Retained						Controlling			Shareholders’
	Capital		Premium		Adjustment			Compensation			Earnings			Subtotal			Interest			Equity

Balance at January 1, 2010		120,000		563,343		2,516			11,914			44,161			741,934			15,222			757,156
Total comprehensive loss for the period		—		—		(18,123	)		—			(69,170	)		(87,293	)		(1,787	)		(89,080	)
Employee share options granted		—		—		—			970			—			970			20			990

Balance at June 30, 2010 (unaudited)		120,000		563,343		(15,607	)		12,884			(25,009	)		655,611			13,455			669,066


Balance at January 1, 2011		120,000		563,343		11,273			13,659			257			708,532			14,570			723,102
Total comprehensive income for the period		—		—		30,835			—			27,569			58,404			1,170			59,574
Net proceeds from IPO and Private placement (Note 12)		60,104		362,926		—			—			—			423,030			—			423,030
Employee share options granted (Note 13)		—		—		—			458			—			458			9			467
Restricted shares granted (Note 13)		—		—		—			674			—			674			13			687
Employee share options forfeited		—		—		—			(1,078	)		1,078			—			—			—

Balance at June 30, 2011 (unaudited)		180,104		926,269		42,108			13,713			28,904			1,191,098			15,762			1,206,860

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

F - 7

Adecoagro S.A.
Condensed Consolidated Interim Statements of Cash Flows
for the six-month periods ended June 30, 2011 and 2010

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


		June 30,			June 30,
	Note	2011			2010
		(unaudited)			(unaudited)
Cash flows from operating activities:
Gain /(Loss) for the period			28,097			(70,580	)
Adjustments for:
Income tax charge/(benefit)	16		12,754			(24,650	)
Depreciation	20		13,799			13,754
Amortization	7		189			196
Gain from disposal of other property items	22		(335	)		(654	)
Employee share options granted	21		1,154			990
Loss from derivative financial instruments and forwards	22, 23		(7,829	)		(9,586	)
Interest and other expense, net	23		14,667			11,475
Initial recognition and changes in fair value of non harvested biological assets (unrealized)			(16,665	)		68,717
Changes in net realizable value of agricultural produce after harvest (unrealized)			(28	)		136
Provision and allowances			(2,406	)		(902	)
Share of loss from joint venture			350			220
Foreign exchange (gains)/ losses, net	23		(713	)		4,221
Changes in operating assets and liabilities:
(Increase)/ decrease in trade and other receivables			(10,002	)		21,902
Increase in inventories			(73,828	)		(34,899	)
Decrease in biological assets			50,835			39,313
Decrease in other assets			1			9
Decrease in derivative financial instruments			(9,510	)		(2,390	)
Increase/ (decrease) in trade and other payables			3,811			(13,027	)
Increase in payroll and social security liabilities			2,870			3,320
Decrease in provisions for other liabilities			(3	)		(765	)

Net cash generated from/ (used in) operating activities before interest and taxes paid			7,208			6,800
Interest paid			(16,682	)		(14,699	)
Income tax paid			(15,527	)		(2,925	)


Net cash used in operating activities			(25,001	)		(10,824	)

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

F - 8

Adecoagro S.A.
Condensed Consolidated Interim Statements of Cash Flows
for the six-month periods ended June 30, 2011 and 2010 (Continued)

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


			June 30,			June 30,
	Note		2011			2010
			(unaudited)			(unaudited))
Cash flows from investing activities:
Purchases of property, plant and equipment				(23,577	)		(50,170	)
Purchases of intangible assets		7		(37	)		(36	)
Purchase of cattle and non current biological assets planting cost				(24,801	)		(25,367	)
Interest received		23		2,468			647
Proceeds from sale of property, plant and equipment				890			1,203
Short-term investments				(48,000	)		—
Acquisition of currency forward				(205,000	)		—

Net cash used in investing activities				(298,057	)		(73,723	)


Cash flows from financing activities:
Net proceeds from IPO and Private placement		12		421,778			—
Proceeds from long-term borrowings				17,167			12,725
Payments of long-term borrowings				(13,709	)		(18,626	)
Net increase in short-term borrowings				39,931			60,589

Net cash generated from financing activities				465,167			54,688

Net increase/(decrease) in cash and cash equivalents				142,109			(29,859	)

Cash and cash equivalents at beginning of period				70,269			74,806
Effect of exchange rate changes on cash and cash equivalents				(3,372	)		6,284

Cash and cash equivalents at end of period				209,006			51,231

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 and Reorganization

Adecoagro S.A. (the “Company” or “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 five reportable segments, which are described in detail in Note 5 to these condensed consolidated interim financial statements.

The Group was established in 2002 and has subsequently grown significantly both organically and through acquisitions. The Group currently has operations in Argentina, Brazil and Uruguay.

The Company is the Group’s ultimate parent company and is a Societe Anonyme corporation incorporated and domiciled in the Grand Duchy of Luxembourg. The address of its registered office is 13-15 Avenue de la Liberté, L-1931, Luxembourg.

These condensed consolidated interim financial statements have been approved for issue by the Board of Directors on August 12, 2011.

Reorganization

On October 30, 2010 the members of International Farmland Holdings LLC (“IFH”) completed the contribution of 98% of their respective interests in IFH on a pro rata basis to a newly formed entity, Adecoagro, as contribution in kind in exchange for 100% of the common shares of Adecoagro outstanding as of that date (the “Reorganization”). This Reorganization was done, among other things, to facilitate the initial public offering of the Group, which occurred on January 28, 2011. Adecoagro had no prior assets, holdings or operations.

The consolidated financial statements of Adecoagro at December 31, 2010 and for the six- month period ended June 30, 2010, are presented using the historical values from the consolidated financial statements of IFH. However, the issued share capital reflects that of Adecoagro as of that date. The Reorganization is retroactively reflected in the consolidated financial statements of Adecoagro as of that date, in the period in which the Reorganization occurred. The Reorganization did not qualify as a business combination under common control; rather, it was a simple Reorganization of the capital of IFH, the existing organization. As such, the Reorganization is a non-adjusting event under IAS 10 and therefore it is recognized retroactively in the consolidated financial statements of the period in which the Reorganization occurs.

On January 28, 2011 the Company successfully completed an initial public offering and a private placement (see Note 12).

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

The information presented in the accompanying interim six-month financial statements is unaudited. In the opinion of management, the accompanying condensed consolidated interim financial statements reflect all adjustments necessary to present fairly the financial position of the Group at June 30, 2011, results of operations and cash flows for the six months ended June 30, 2011 and 2010. All such adjustments are of a normal recurring nature. In preparing the accompanying condensed consolidated 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 condensed consolidated interim financial statements follow the same accounting policies and methods of their application as the Group’s audited December 31, 2010 annual financial statements, except as stated in 2.2 and 2.3 below. Accordingly, these condensed consolidated interim financial statements should be read in conjunction with the audited financial statements of the Group as of that date.

These condensed consolidated interim financial information as of June 30, 2011 and for the six-month periods ended June 30, 2011 and 2010 have been prepared in accordance with IAS 34, ‘Interim financial reporting’. The annual financial statements for the year ended December 31, 2010 have been prepared in accordance with International Financial Reporting Standards (IFRS) of the International Accounting Standards Board (IASB) and the Interpretations of the International Financial Reporting Interpretations Committee (IFRIC). The condensed consolidated interim financial statements are presented in United States Dollars.

2.1 New accounting standards

The impact of new accounting standards, amendments and interpretations on the Group’s financial statements for the six-month period ended June 30, 2011 is set out below:

An amendment to IAS 32 (Financial Instruments: Presentation) was issued in October 2009. The amendment clarifies that rights issues, options and warrants denominated in a currency other than the issuer’s functional currency and offered on a pro-rata basis to all owners of the same class of equity must be classified as equity. Such rights issues have so far been accounted for as liabilities. The change relates only to issues of a fixed number of shares at a fixed foreign-currency exercise price. The amendment is to be applied for annual periods beginning on or after February 1, 2010. Earlier application is permitted. The amendment was effective for the Group’s six-month period ended June 30, 2011, and did not have a material impact on the presentation of the Group’s financial position, results of operations or earnings per share.

IFRIC 19 “Extinguishing Financial Liabilities with Equity Instruments” was issued in November 2009. The interpretation addresses the accounting treatment in cases where a company settles all or part of a financial liability by issuing equity instruments to the creditor. It is to be applied for annual periods beginning on or after July 1, 2010. Earlier application is permitted. The amendment was effective for the Group’s six-month period ended June 30, 2011, and did not have a material impact on the presentation of the Group’s financial position, results of operations or earnings per share.

The IASB issued IAS 24 (revised) in November 2009. The revisions provide a partial exemption from the disclosure requirements for government-related entities and simplify the definition of a related party. The revisions are applicable for accounting periods beginning on or after 1 January 2011. Earlier application is permitted. The revised standard was effective for the Group’s six-month period ended June 30, 2011, and did not have a material impact on the presentation of the Group’s financial position, results of operations or earnings per share.

In November 2009 amendments were issued to IFRIC 14 “IAS 19 — The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction”, an interpretation of IAS 19 (Employee Benefits). The amendments apply when a company is subject to minimum pension plan funding requirements. They enable prepayments of the respective contributions to be recognized as an asset. The amendments are to be applied for annual periods beginning on or after January 1, 2011. Earlier application is permitted. The amendment was effective for the Group’s six-month period ended June 30, 2011, and did not have a material impact on the presentation of the Group’s financial position, results of operations or earnings per share.

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)

2.1 New accounting standards (continued)

On 6 May 2010, the IASB issued Improvements to IFRSs — a collection of amendments to seven IFRSs — as part of its program of annual improvements to its standards. The amendments are effective for annual periods beginning on or after July 1, 2010 and January 1, 2011 (thus effective for the Group’s six-month period ended June 30, 2011), although entities are permitted to adopt them earlier. These amendments relate to IFRS 1 “First Time Adoption of IFRS”, IFRS 3 “Business Combination”, IFRS 7 “Financial Instruments: Disclosures”, IAS 1 “Presentation of Financial Statements”, IAS 27 “Consolidated and separate financial statements”, IAS 34 “Interim Financial Reporting” and IFRIC 13 “Customer Loyalty Programmes”. The amendments did not have a material impact on the presentation of the Group’s financial position, results of operations or earnings per share.

2.2 New significant accounting policies

The following significant accounting policies were applied for the first time in the preparation of these condensed consolidated interim financial statements.

Short-term investments

Short-term investments includes fixed-term deposits not repayable on demand and with original maturities of more than three months.

2.3 Revision of previously issued financial statements

During the six-month period ended June 30, 2011, the Group changed its accounting policy for the classification of certain bearer biological assets, mainly sugar cane and coffee plantations, on the statement of financial position. As from June 30, 2011, the Group classified these biological assets as non-current assets in the statement of financial position. This is consistent with the trend of industry financial statements published in Brazil, which are based on IFRS recently adopted in that country. Comparative financial statements were revised as a result of such change, reducing current biological assets and increasing non-current biological assets in US$ 29,377 and US$ 20,367 as of December 31, 2010 and 2009, respectively.

2.4 Seasonality of operations

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

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

Risk management principles and processes

There have been no significant changes on the risks the Group’s activities are exposed to.

The Group’s approach to the identification, assessment and mitigation of risk is carried out by a Risk and Commercial Committee, which focuses on timely and appropriate management of risk. This Risk and Commercial Committee has overall accountability for the identification and management of risk across the Group.

The principal financial risks arising from financial instruments are raw material price risk, end-product price risk, exchange rate risk, interest rate risk, liquidity risk and credit risk.

The principal risks and uncertainties facing the business, which you could find in the annual financial statements of the Company, are the following:

•

End-product price risk

The Group uses a variety of commodity-based derivative instruments to manage its exposure to price volatility stemming from its integrated crop production activities. These instruments consist mainly of crop sales forwards contracts, but also includes occasionally put and call options.

Contract positions are designed to ensure that the Group would receive a defined minimum price for certain quantities of its production. The counterparties to these instruments generally are major financial institutions. In entering into these contracts, the Group has assumed the risk that might arise from the possible inability of counterparties to meet the terms of their contracts. The Group does not expect any losses as a result of counterparty defaults. The Group is also obliged to pay margin deposits and premiums for these instruments. These estimates represent only the sensitivity of the financial instruments to market risk and not the Group exposure to end product price risks as a whole, since the crops and cattle products sales, including sales forward contracts, are not financial instruments within the scope of IFRS 7 disclosure requirements.

The Group estimates that for the period ended June 30, 2011, other factors being constant, and a 5% increase (or decrease) in prices of the Group’s end products would increase (or decrease) Gain Before Income Tax by approximately US$ 4,646.

•

Liquidity risk

There have been no significant changes regarding exposure to liquidity risk since December 31, 2010.

•

Interest rate risk

There have been no significant changes regarding interest rate risk exposure since December 31, 2010.

The following table shows a breakdown of the Group’s fixed-rate and floating-rate borrowings per currency denomination and functional currency of the subsidiary issuing the loans (excluding finance leases) at June 30, 2011 (all amounts are shown in US dollars):

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)

Financial risk management (continued)


	June 30, 2011
	Functional currency
	Argentine		Brazilian
Rate per currency denomination	Peso		Reais		Uruguayan Peso		Total
			(unaudited)
Fixed rate:
Argentine Peso		91		—		—		91
Brazilian Reais		—		83,569		—		83,569
US Dollar		49,106		—		1,195		50,301

Subtotal Fixed-rate borrowings		49,197		83,569		1,195		133,961

Variable rate:
Brazilian Reais		—		109,741		—		109,741
US Dollar		54,755		134,348		—		189,103

Subtotal Variable-rate borrowings		54,755		244,089		—		298,844

Total borrowings as per analysis		103,952		327,658		1,195		432,805

Finance leases		126		145		—		271

Total borrowings at June 30, 2011		104,078		327,803		1,195		433,076

At June 30, 2011, if interest rates on floating-rate borrowings had been 1% higher (or lower) with all other variables held constant, Gain Before Income Tax for the period would decrease (or increase) as follows:

June 30, 2011

Functional currency

Argentine

Brazilian

Rate per currency denomination

Peso

Reais

Uruguayan Peso

Total

(unaudited)

Variable rate:

Brazilian Reais

—

1,097

—

1,097

US Dollar

548

1,343

—

1,891

Total effects on Gain Before Income Tax

548

2,440

—

2,989

•

Credit risk

There have been no significant changes regarding exposure to credit risk arising from outstanding receivables since December 31, 2010. As of June 30, 2011, one bank accounted for more than 75% of the total cash deposited (HSBC). Additionally, during the six-month period ended June 30, 2011, the Group entered into a derivative contract (currency forward) with the Deutsche Bank for a notional amount of US$ 205 million.

•

Derivative financial instruments

As part of its business operations, the Group uses a variety of derivative financial instruments to manage its exposure to the financial risks discussed above. As part of this strategy, the Group may enter into (i) interest rate derivatives to manage the composition of floating and fixed rate debt; (ii) currency derivatives to hedge certain foreign currency cash flows and to adjust the currency composition of its assets and liabilities; and (iii) crop future contracts and put and call options to manage its exposure to price volatility stemming from its integrated crop production activities. The Group’s policy is not to use derivatives for speculative purposes.

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)

Financial risk management (continued)

The Group’s primary objective for holding derivative financial instruments is to manage currency exchange rate risk, interest rate risk and commodity price risk. The Group generally enters into derivative transactions with large institutions with high-credit-quality (usually equal or higher than the Group’s). The market risk associated with these instruments resulting from price movements is expected to offset the market risk of the underlying transactions, assets and liabilities, being hedged.

Non-hedging derivatives are classified as current when realization within 12 months is expected. Otherwise they are classified as non-current, although any portion that is expected to be realized within 12 months of the date of the statement of financial position is presented as current. The Group did not apply hedge accounting to these instruments.

The following table shows the outstanding positions for each type of derivative contract as of June 30, 2011:

•

Futures / Options

As of June 30, 2011


	June 30, 2011
					Market
Type of			Notional		Value Asset/			(Loss)/ Gain
derivative contract	Tons		amount		(Liability)			(*)
					(unaudited)			(unaudited)
Futures:
Sale
Corn		9		2,478		210			210
Soybean		33		13,828		627			627
Wheat		1		170		9			(13	)
Sugar		15,545		8,459		(528	)		(1,587	)
Coffee		1,344		7,981		112			(304	)
Cotton		91		292		46			46
Options:
Corn		10		106		(13	)		(13	)

Total		17,033		33,314		463			(1,034	)


*()**		Included in line “Gain from commodity derivative financial instruments” within “Other operating income, net”. See Note 22.

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

•

Currency forward

The Company intends to use approximately US$ 230 million of the net proceeds from the Initial Public Offering to finance part of the construction costs of Ivinhema, the new sugar and ethanol mill in Brazil. Considering this, in April 2011, and in order to hedge the fluctuation of the Brazilian Reais against the US dollar, the Group bought a ninety-day Zero Coupon Note from Deutsche Bank AG London Branch for a notional amount of US$ 205 million (equivalent to Reais 328 million), where the amount of Brazilian Reais to receive at maturity is fixed. The Zero Coupon Note matured on August 2, 2011 and the Group received US$ 211 million, which resulted in the recognition of a gain of US$ 6 million included within “Finance income”.

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)

Critical accounting estimates and judgments

Critical accounting policies are those that are most important to the portrayal of the Group’s financial condition, results of operations and cash flows, and require management to make difficult, subjective or complex judgments and estimates about matters that are inherently uncertain. Management bases its estimates on historical experience and other assumptions that it believes are reasonable. The Group’s critical accounting policies are consistent with those of the annual financial statements for the year ended December 31, 2010. Further discussion on critical accounting policies for the period ended June 30, 2011 is included below.

Actual results could differ from estimates used in employing the critical accounting policies and these could have a material impact on the Group’s results of operations. The Group also has other policies that are considered key accounting policies, such as the policy for revenue recognition. However, these other policies, which are discussed in the notes to the Group’s financial statements, do not meet the definition of critical accounting estimates, because they do not generally require estimates to be made or judgments that are difficult or subjective.

(a) Impairment testing

For the six-month period ended June 30, 2011 there were no new events or circumstances that indicate that an impairment had occurred.

(b) Biological assets

The discounted cash flow model requires the input of highly subjective assumptions including observable and unobservable data. Generally the estimation of the fair value of biological assets and certain agricultural produce is based on models or inputs that are not observable in the market and the use of unobservable inputs is significant to the overall valuation of the assets. Unobservable inputs are determined based on the best information available, for example by reference to historical information of past practices and results, statistical and agronomical information, and other analytical techniques. Key assumptions include future market prices, estimated yields at the point of harvest, estimated production cycle, future cash flows, future costs of harvesting and other costs, and estimated discount rate.

(c) Fair value of derivatives and other financial instruments

Fair values of derivative financial instruments are computed with reference to quoted market prices on trade exchanges, when available. The fair values of commodity options are calculated using period-end market rates together with common option pricing models. The fair value of interest rate swaps has been calculated using a discounted cash flow analysis.

Segment information

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

The Group’s ‘Farming’ is further comprised of five reportable segments: Crops, Rice, Dairy, Coffee and Cattle.

The measurement principles for the Group’s segment reporting structure are based on the IFRS principles adopted in the condensed consolidated interim financial statements. Revenue generated and goods and services exchanged between segments are calculated on the basis of market prices.

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’.

F - 16

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

5. Segment information (continued)

Segment analysis for the six-month period ended June 30, 2011(unaudited):


	*Farming*																		*Sugar,*
																*Farming*			*ethanol and*			*Land*
	Crops			Rice			Dairy			Coffee			Cattle			*subtotal*			*energy*			*transformation*		Corporate			Total
Sales of manufactured products and services rendered		176			33,884			—			713			2,345			37,118			109,060			—		—			146,178
Cost of manufactured products sold and services rendered		—			(29,720	)		—			(629	)		(191	)		(30,540	)		(65,546	)		—		—			(96,086	)

Gross Profit from Manufacturing Activities		176			4,164			—			84			2,154			6,578			43,514			—		—			50,092

Sales of agricultural produce and biological assets		75,973			35			8,963			3,204			518			88,693			—			—		—			88,693
Cost of agricultural produce sold and direct agricultural selling expenses		(75,973	)		(35	)		(8,963	)		(3,204	)		(518	)		(88,693	)		—			—		—			(88,693	)
Initial recognition and changes in fair value of biological assets and agricultural produce		37,030			8,275			3,424			2,338			351			51,418			4,551			—		—			55,969
Gain from changes in net realizable value of agricultural produce after harvest		5,832			—			—			(1,763	)		—			4,069			—			—		—			4,069

Gross Profit from Agricultural Activities		42,862			8,275			3,424			575			351			55,487			4,551			—		—			60,038

Margin on Manufacturing and Agricultural Activities Before Operating Expenses		43,038			12,439			3,424			659			2,505			62,065			48,065			—		—			110,130

General and administrative expenses		(4,806	)		(4,016	)		(798	)		(635	)		(164	)		(10,419	)		(11,265	)		—		(11,824	)		(33,508	)
Selling expenses		(813	)		(5,605	)		(188	)		(235	)		(27	)		(6,868	)		(17,206	)		—		—			(24,074	)
Other operating (loss)/ income, net		(3,047	)		113			—			241			—			(2,693	)		2,411			—		(22	)		(304	)
Share of loss of joint ventures		—			—			(350	)		—			—			(350	)		—			—		—			(350	)

Gain/ (Loss) from Operations Before Financing and Taxation		34,372			2,931			2,088			30			2,314			41,735			22,005			—		(11,846	)		51,894


Depreciation and amortization		(658	)		(1,351	)		(232	)		(281	)		(120	)		(2,642	)		(11,346	)		—		—			(13,988	)
Initial recognition and changes in fair value of biological assets (unrealized)		5,074			—			1,485			(817	)		—			5,742			(10,650	)		—		—			(4,908	)
Initial recognition and changes in fair value of agricultural produce (unrealized)		10,026			4,123			—			3,155			—			17,304			4,269			—		—			21,573
Initial recognition and changes in fair value of biological assets and agricultural produce (realized)		21,930			4,152			1,939			—			351			28,372			10,932			—		—			39,304
Gain from changes in net realizable value of agricultural produce after harvest (unrealized)		—			—			—			28			—			28			—			—		—			28
Gain from changes in net realizable value of agricultural produce after harvest (realized)		5,832			—			—			(1,791	)		—			4,041			—			—		—			4,041

Property, plant and equipment, net		209,372			48,017			4,275			27,083			19,226			307,973			473,764			—		—			781,737
Investment property		—			—			—			—			20,568			20,568			—			—		—			20,568
Goodwill		4,770			6,717			—			1,190			308			12,985			14,190			—		—			27,175
Biological assets		22,142			2,435			7,946			22,742			219			55,484			132,210			—		—			187,694
Investment in joint ventures		—			—			5,453			—			—			5,453			—			—		—			5,453
Inventories		43,581			33,854			1,638			8,390			16			87,479			48,354			—		—			135,833

Total segment assets		279,865			91,023			19,312			59,405			40,337			489,942			668,518			—		—			1,158,460

Borrowings		66,029			41,631			10,408			15,638			—			133,706			299,370			—		—			433,076

Total segment liabilities		66,029			41,631			10,408			15,638			—			133,706			299,370			—		—			433,076

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)

5. Segment information (continued)

Segment analysis for the six-month period ended June 30, 2010 (unaudited):


	*Farming*																		*Sugar,*
																*Farming*			*ethanol and*			*Land*
	Crops			Rice			Dairy			Coffee			Cattle			*subtotal*			*energy*			*transformation*		Corporate			Total
Sales of manufactured products and services rendered		184			30,768			—			2,709			1,708			35,369			51,291			—		—			86,660
Cost of manufactured products sold and services rendered		—			(26,692	)		—			(2,546	)		—			(29,238	)		(46,322	)		—		—			(75,560	)

Gross Profit from Manufacturing Activities		184			4,076			—			163			1,708			6,131			4,969			—		—			11,100

Sales of agricultural produce and biological assets		59,836			153			5,951			1,310			1,342			68,592			49			—		—			68,641
Cost of agricultural produce sold and direct agricultural selling expenses		(59,836	)		(153	)		(5,951	)		(1,310	)		(1,342	)		(68,592	)		(49	)		—		—			(68,641	)
Initial recognition and changes in fair value of biological assets and agricultural produce		20,357			2,342			5,207			161			524			28,591			(82,147	)		—		—			(53,556	)
Gain from changes in net realizable value of agricultural produce after harvest		(863	)		—			—			981			—			118			—			—		—			118

Gross Profit/ (Loss) from Agricultural Activities		19,494			2,342			5,207			1,142			524			28,709			(82,147	)		—		—			(53,438	)

Margin on Manufacturing and Agricultural Activities Before Operating Expenses		19,678			6,418			5,207			1,305			2,232			34,840			(77,178	)		—		—			(42,338	)

General and administrative expenses		(3,685	)		(2,167	)		(1,307	)		(416	)		(180	)		(7,755	)		(9,394	)		—		(11,506	)		(28,655	)
Selling expenses		(660	)		(4,204	)		(166	)		(469	)		(140	)		(5,639	)		(11,816	)		—		—			(17,455	)
Other operating income, net		1,406			84			—			41			(12	)		1,519			8,639			—		(570	)		9,588
Share of loss of joint ventures		—			—			(220	)		—			—			(220	)		—			—		—			(220	)

Gain/ (Loss) from Operations Before Financing and Taxation		16,739			131			3,514			461			1,900			22,745			(89,749	)		—		(12,076	)		(79,080	)


Depreciation and amortization		(937	)		(950	)		(186	)		(53	)		(209	)		(2,335	)		(11,615	)		—		—			(13,950	)
Initial recognition and changes in fair value of biological assets (unrealized)		1,270			—			3,056			(789	)		—			3,537			(82,296	)		—		—			(78,759	)
Initial recognition and changes in fair value of agricultural produce (unrealized)		7,204			1,811			—			901			—			9,916			126			—		—			10,042
Initial recognition and changes in fair value of biological assets and agricultural produce (realized)		11,883			531			2,151			49			524			15,138			23			—		—			15,161
Gain from changes in net realizable value of agricultural produce after harvest (unrealized)		—			—			—			(136	)		—			(136	)		—			—		—			(136	)
Gain from changes in net realizable value of agricultural produce after harvest (realized)		(863	)		—			—			1,117			—			254			—			—					254

As of December 31, 2010:
Property, plant and equipment, net		204,454			50,898			4,202			25,265			18,831			303,650			448,342			—		—			751,992
Investment property		—			1,168			—			—			20,249			21,417			—			—		—			21,417
Goodwill		4,672			7,023			577			1,115			—			13,387			13,107			—		—			26,494
Biological assets		31,247			21,555			7,130			21,577			401			81,910			104,847			—		—			186,757
Investment in joint ventures		—			—			6,271			—			—			6,271			—			—		—			6,271
Inventories		22,926			8,422			883			7,023			61			39,315			17,855			—		—			57,170

Total segment assets		263,299			89,066			19,063			54,980			39,542			465,950			584,151			—		—			1,050,101

Borrowings		59,339			41,050			10,262			13,651			—			124,302			265,170			—		—			389,472

Total segment liabilities		59,339			41,050			10,262			13,651			—			124,302			265,170			—		—			389,472

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)

6. Property, plant and equipment

Changes in the Group’s property, plant and equipment in the six-month periods ended June 30, 2011 and 2010 were as follows:


										Machinery,
										equipment,
				Farmland			Buildings and			furniture and
	Farmlands			improvements			facilities			fittings			Computer equipment			Vehicles			Work in progress			Total
Six-month period ended June 30, 2010
Opening net book amount		299,872			434			102,654			170,648			1,382			1,062			106,826			682,878
Exchange differences		(10,779	)		(21	)		(4,059	)		(5,756	)		(51	)		(41	)		(3,455	)		(24,162	)
Additions		300			—			343			11,111			205			212			45,575			57,746
Transfers		—			154			30,327			27,378			24			—			(57,883	)		—
Disposals		—			—			(198	)		(264	)		(32	)		(55	)		—			(549	)
Reclassification to non-income tax credits (*)		—			—			—			—			—			—			(5,800	)		(5,800	)
Depreciation charge		—			(95	)		(3,384	)		(12,346	)		(197	)		(120	)		—			(16,142	)

Closing net book amount		289,393			472			125,683			190,771			1,331			1,058			85,263			693,971

At June 30, 2010 (unaudited)
Cost		289,393			3,219			149,057			265,639			2,351			2,676			85,263			797,598
Accumulated depreciation		—			(2,747	)		(23,374	)		(74,868	)		(1,020	)		(1,618	)		—			(103,627	)

Net book amount		289,393			472			125,683			190,771			1,331			1,058			85,263			693,971


Six-month period ended June 30, 2011
Opening net book amount		305,412			245			165,248			239,910			1,602			1,103			38,472			751,992
Exchange differences		(158	)		(14	)		9,877			15,172			90			(20	)		919			25,866
Additions		—			—			246			6,899			220			149			17,059			24,573
Transfers		—			542			7,927			4,317			137			—			(12,923	)		—
Disposals		—			—			(36	)		(489	)		—			(30	)		—			(555	)
Reclassification to non-income tax credits (*)		—			—			—			(1,533	)		—			—			—			(1,533	)
Depreciation charge		—			(127	)		(4,503	)		(13,488	)		(300	)		(188	)		—			(18,606	)

Closing net book amount		305,254			646			178,759			250,788			1,749			1,014			43,527			781,737

At June 30, 2011 (unaudited)
Cost		305,254			3,597			211,372			355,013			3,321			2,961			43,527			925,045
Accumulated depreciation		—			(2,951	)		(32,613	)		(104,225	)		(1,572	)		(1,947	)		—			(143,308	)

Net book amount		305,254			646			178,759			250,788			1,749			1,014			43,527			781,737

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)

6. Property, plant and equipment (continued)

(*) Brazilian federal tax law allows entities to take a percentage of the total cost of the assets purchased as a tax credit. The procedure adopted initially was to recognize such credits proportionally to the depreciation of these fixed assets on a monthly basis. During 2009, the Group elected to change the procedure to recognize these federal tax credits separately when the assets is purchased and, as permitted, the tax credits already “embedded” within the cost of the assets were reclassified to tax credit (See Note 9).

An amount of US$11,229 and US$11,263 of depreciation charges are included in “Cost of manufactured products sold and services rendered” for the six-month periods ended June 30, 2011 and 2010, respectively. An amount of US$2,570 and US$2,491 of depreciation charges are included in “General and administrative expenses” for the six-month periods ended June 30, 2011 and 2010, respectively. An amount of US$4,807 and US$2,388 of depreciation charges were not charged to the statement of income and were capitalized in “Inventories” for the six-month periods ended June 30, 2011 and 2010, respectively.

As of June 30, 2011, borrowing costs of US$475 (June 30, 2010: US$3,423) 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$362,981 as of June 30, 2011.

As of June 30, 2011, included within property, plant and equipment balances are US$0.2 million related to the net book value of assets under finance leases.

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)

7. Intangible assets

Changes in the Group’s intangible assets in the six-month periods ended June 30, 2011 and 2010 were as follows:


	Goodwill			Trademarks			Software			Total
Six-month period ended June 30, 2010
Opening net book amount		19,953			1,556			350			21,859
Exchange differences		(505	)		(158	)		(169	)		(832	)
Additions		—			—			36			36
Disposals		—			(195	)		—			(195	)
Amortization charge (i) (20)		—			(108	)		(88	)		(196	)

Closing net book amount		19,448			1,095			129			20,672

At June 30, 2010 (unaudited)
Cost		19,448			1,879			476			21,803
Accumulated amortization		—			(784	)		(347	)		(1,131	)

Net book amount		19,448			1,095			129			20,672


Six-month period ended June 30, 2011
Opening net book amount		26,494			1,884			275			28,653
Exchange differences		681			19			21			721
Additions		—			—			37			37
Amortization charge (ii) (Note 20)		—			(107	)		(82	)		(189	)

Closing net book amount		27,175			1,796			251			29,222

At June 30, 2011 (unaudited)
Cost		27,175			2,792			725			30,692
Accumulated amortization					(996	)		(474	)		(1,470	)

Net book amount		27,175			1,796			251			29,222


(i)		For the six-month period ended June 30, 2011 an amount of US$82 and US$107 of amortization charges are included in “General and administrative expenses” and “Selling expenses”, respectively. There were no impairment charges for any of the periods presented.

(ii)		For the six-month period ended June 30, 2010 an amount of US$88 and US$108 of amortization charges are included in “General and administrative expenses” and “Selling expenses”, respectively. There were no impairment charges for any of the periods presented.

The Group tests annually whether goodwill has suffered any impairment. The last impairment test of goodwill was performed as of December 31, 2010.

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)

8. Biological assets

Changes in the Group’s biological assets in the six-month periods ended June 30, 2011 and 2010 were as follows:


	June 30,			June 30,
	2011			2010
	(unaudited)			(unaudited)
Beginning of the period		186,757			230,454
Initial recognition and changes in fair value of biological assets (i)		55,969			(53,556	)
Decrease due to harvest		(196,322	)		(130,081	)
Decrease due to sales		(1,212	)		(1,540	)
Costs incurred during the period		132,196			102,514
Exchange differences		10,306			(7,046	)

End of the period year		187,694			140,745


(i)		Biological asset with a production cycle of more than one year (that is, sugarcane, coffee, dairy and cattle) generated “Initial recognition and changes in fair value of biological assets” amounting to US$10,664 (gain) for the six-month period ended June 30, 2011 (June 30, 2010: US$ (76,255) (loss)). In 2011, an amount of US$26,814 (2010: US$ (61,511)) was attributable to price changes, and an amount of US$ (16,150) (2010: US$ (14,744)) was attributable to physical changes.

Biological assets as of June 30, 2011 and December 31, 2010 and 2009 were as follows:


	June 30,		December 31,		December 31,
	2011		2010		2009
	(unaudited)
Non-current
Cattle for dairy production		7,946		7,130		4,313
Other cattle		39		39		66
Sown land — coffee		22,742		21,577		21,634
Sown land — sugarcane		132,210		104,847		164,701

		162,937		133,593		190,714

Current
Other cattle		180		362		749
Sown land — crops		22,142		31,247		27,467
Sown land — rice		2,435		21,555		11,524

		24,757		53,164		39,740

Total biological assets		187,694		186,757		230,454

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)

9. Trade and other receivables, net


	June 30,			December 31,
	2011			2010
	(unaudited)
Non current
Income tax credits		453			3,628
Non-income tax credits (i)		6,626			8,681
Receivable from disposal of farmlands (ii)		13,931			13,656
Cash collateral		3,332			3,079
Other receivables		923			1,708

Non current portion		25,265			30,752

Current
Trade receivables		45,469			32,702
Receivables from related parties (Note 25)		2,704			1,662
Less: Allowance for trade receivables		(1,389	)		(1,323	)

Trade receivables — net		46,784			33,041

Prepaid expenses		8,409			8,299
Advances to suppliers		13,292			14,274
Income tax credits		4,441			6,954
Non-income tax credits (i)		44,705			38,006
Cash collateral		2,381			2,342
Receivable from disposal of farmlands (ii)		10,678			10,432
Receivable with related parties (Note 25)		—			291
Other receivables		3,547			5,566

Subtotal		87,453			86,164

Current portion		134,237			119,205

Total trade and other receivables, net		159,502			149,957


(i)		Includes US$1,533 and US$6,721 reclassified from property, plant and equipment as of June 30, 2011 and December 31, 2010, respectively.

(ii)		Relates to the sale of a farmland for which total net proceeds of US$24.6 million have not been fully collected as of June 30, 2011.

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.

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. Trade and other receivables, net (continued)

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


	June 30,		December 31,
	2011		2010
	(unaudited)
Currency
US Dollar		55,116		53,561
Argentine Peso		32,123		38,977
Uruguayan Peso		889		697
Brazilian Reais		71,374		56,722

		159,502		149,957

As of June 30, 2011 trade receivables of US$27,761 (December 31, 2010: US$9,379) were past due but not impaired. The ageing analysis of these receivables is as follows:


	June 30,		December 31,
	2011		2010
	(unaudited)
Up to 3 months		24,944		7,929
3 to 6 months		369		542
Over 6 months		1,049		908

		26,362		9,379

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. The Group does not hold any collateral as security.

As of June 30, 2011 and December 31, 2010, the total amount of cash and cash equivalents mainly comprise cash in banks and short-term bank deposits. The Group is authorized to work with banks rated “BBB+” or higher. At June 30, 2011, one bank (HSBC) accounted for more than 75% of the total cash deposited. The remaining amount of cash and cash equivalents relates to cash in hand.

Additionally, during the six-month period ended June 30, 2011, the Group invested in fixed-term bank deposits with one bank (HSBC) and entered into a derivative contract (currency forward). The Group does not have investment in securities or other financial instruments for which risk may have increased due to the financial credit crisis.

The Group arranged the interest rate swaps with Citibank N.A. (United States), HSBC S.A. (Brazil) and Banco Pine S.A. (Brazil). The Group also arranged an Crop commodity futures are traded in the established trading markets of Argentina and Brazil through well rated brokers. Counterparty risk derived from these transactions is not material.

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. Inventories


	June 30,		December 31,
	2011		2010
	(unaudited)
Raw materials		39,481		25,292
Finished goods		92,915		25,601
Stocks held by third parties		3,382		6,267
Others		55		10

		135,833		57,170

The cost of inventories recognized as expense and included in “Cost of manufactured products sold and services rendered” amounted to US$89,992 for the six-month period ended June 30, 2011. The cost of inventories recognized as expense and included in “Cost of agricultural produce sold and direct agricultural selling expenses” amounted to US$70,409 for the six-month period ended June 30, 2011.

11. Cash and cash equivalents


	June 30,		December 31,
	2011		2010
	(unaudited)
Cash at bank and on hand		40,661		31,768
Short-term bank deposits		168,345		38,501

		209,006		70,269

12. Shareholders’ contributions


	Number of shares		Share capital and
	(thousands)		share premium
At January 1, 2010		120,000		683,343

At June 30, 2010		120,000		683,343


At January 1, 2011		120,000		683,343
At January 24, 2011, after reverse split (1)		80,000		683,343
Issue of shares on January 28, 2011 (2)		40,069		423,030

At June 30, 2011		120,069		1,106,373


(1)		The Extraordinary General Meeting of Adecoagro’s shareholders held on January 24, 2011 approved the reverse split of Adecoagro’s common shares, changing the nominal value of Adecoagro’s common shares from US$1 to US$1.5. Therefore, Adecoagro reduced total shares outstanding as of that date from 119,999,997 shares to 79,999,985 shares.

(2)		Initial Public Offering and private placement.

On January 28, 2011 the Company successfully completed an initial public offering of its shares in the New York Stock Exchange. The Company issued 28,405,925 shares, at a price of US$11 per share. In addition, on February 11, 2010, the Company issued 4,285,714 shares as a consequence of the over-alloment option exercised by the underwriters of the initial public offering, raising an overall amount of approximately US$359 million.

On January 28, 2011, Adecoagro’s also issued and sold to Al Gharrafa Investment Company 7,377,598 common shares at a purchase price per share of US$10,65, which is equal to the price per common share paid by the underwriters acting in the initial public offering of the Company. This transaction was conditioned upon, and closed immediately after, the closing of the initial public offering of the Company. Consequently the Company raised US$79 million.

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)

12. Shareholders’ contributions (continued)

The Company intends to use these funds to finance part of the construction costs of Ivinhema (sugar and ethanol mill in Brazil) and for potential investments in the acquisition of farmland and capital expenditures required in the expansion of the farming business.

Related transaction costs totaling US$15 million net of tax have been netted off with the deemed proceeds, on the Share premium issued.

13. Equity-settled share-based payments

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

(a) Option Schemes

For the six-month periods ended June 30, 2011 and 2010 the Group incurred US$0.5 million and US$1.0 million respectively, related to the options granted under the Option Schemes.

The fair value of the Option Schemes was measured at the date of grant using the Black-Scholes valuation technique. This valuation model takes into account factors such as non transferability, expected volatility, exercise restrictions and behavioral considerations.

Key grant-date fair value and other assumptions under the Option Schemes are detailed below:


	May			May			May			Feb			Oct			Dec			Jan			Nov
Grant Date	2004			2005			2006			2006			2006			2007			2009			2009

Expected volatility		39	%		37	%		36	%		36	%		36	%		36	%		21	%		22	%
Expected life		5.77			5.37			4.97			5.05			4.8			6.5			6.5			6.5
Risk free rate		3.46	%		3.56	%		4.46	%		4.13	%		4.14	%		3.22	%		1.85	%		2.31	%
Expected dividend yield		1	%		1	%		1	%		1	%		1	%		1	%		0	%		0	%
Fair value per option	$	2.21		$	2.10		$	3.03		$	2.51		$	2.97		$	4.78		$	3.52		$	3.78
Possibility of ceasing employment before vesting		0	%		0	%		0	%		0	%		0	%		0.09	%		0.40	%		0.72	%
Exercise price	$	5.83		$	5.83		$	5.83		$	7.11		$	8.62		$	12.82		$	13.40		$	13.40


	Jan			Jan			Jun			Sep			Sep
Grant Date	2010			2010			2010			2010			2010

Expected volatility		22	%		22	%		22	%		22	%		22	%
Expected life		6.5			6.5			6.5			6.5			6.5
Risk free rate		2.34	%		2.34	%		1.79	%		1.41	%		1.41	%
Expected dividend yield		0	%		0	%		0	%		0	%		0	%
Fair value per option	$	3.62		$	3.38		$	3.17		$	3.05		$	3.28
Possibility of ceasing employment before vesting		0.85	%		0.85	%		0.97	%		1.17	%		1.17	%
Exercise price	$	12.82		$	13.40		$	13.40		$	13.40		$	12.82

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)

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

Since the Group’s shares were not historically publicly traded expected volatility was determined by calculating the historical volatility of share prices of comparable entities in representative stock markets. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioral considerations.

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

2004 Incentive Option Plan


	June 30, 2011				June 30, 2010
	Average				Average
	exercise				exercise
	price per		Options		price per		Options
	share		(thousands)		share		(thousands)
At January 1		6.67		2,176		4.48		3,602
Granted		—		—		—		—
Forfeited		—		—		—		—
Exercised		—		—		—		—
Expired		—		—		—		—

At June 30		6.67		2,176		4.48		3,602

2007/2008 Equity Incentive Plan


	June 30, 2011					June 30, 2010
	Average					Average
	exercise					exercise
	price per		Options			price per		Options
	share		(thousands)			share		(thousands)
At January 1		13.05		2,113			8.69		3,046
Granted		—		—			8.81		174
Forfeited		12.82		(46	)		—		—
Exercised		—		—			—		—
Expired		—		—			—		—

At June 30		13.05		2,067			8.69		3,220

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

2004 Incentive Option Plan


	Exercise
	price per		Shares (in thousands)
Expiry date:	share		June 30, 2011		June 30, 2010
May 1, 2014		5.83		674		1,011
May 1, 2015		5.83		556		858
May 1, 2016		5.83		229		481
February 16, 2016		7.11		110		165
October 1, 2016		8.62		607		1,087

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)

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

2007/2008 Equity Incentive Plan


	Exercise price per		Shares (in thousands)
Expiry date:	share		June 30, 2011		June 30, 2010
Dec 1, 2017		12.82		1,151		1,969
Jan 30, 2019		13.40		700		1,050
Nov 1, 2019		13.40		18		27
Jan 30, 2020		12.82		35		53
Jan 30, 2020		13.40		81		121
Jun 30, 2020		13.40		22		—
Sep 1, 2020		13.40		44		—
Sep 1, 2020		12.82		15		—

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


	Exercisable shares in thousands
June 30, 2011		4,243
June 30, 2010		3,220

(b) Restricted Share Plan

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

For the six-month period ended June 30, 2011 the Group incurred US$0.7 million related to the restricted shares granted under the Restricted Share Plan.

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

Key grant-date fair value and other assumptions under the Adecoagro 2010 Restricted Share Plan are detailed below:


Grant Date	Apr 1, 2011			Apr 1, 2011			May 13, 2011
Fair value		12.69			12.69			12.36
Possibility of ceasing employment before vesting		5	%		10	%		0	%

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. Equity-settled share-based payments (continued)

Movements in the number of restricted shares outstanding under the Adecoagro 2010 Restricted Share Plan are as follows:


	Restricted shares
	(thousands)
	June 30, 2011
At January 1, 2011		—
Granted		427
Forfeited		—

At June 30, 2011		427

14. Trade and other payables


	June 30,		December 31,
	2011		2010
	(unaudited)
Non-current
Trade payables		3,125		4,239
Payable from acquisition of subsidiary		6,131		5,802
Taxes payable		1,518		1,331
Other payables		450		413

		11,224		11,785

Current
Trade payables		55,289		49,597
Payable from acquisition of subsidiary		6,162		5,802
Advances from customers		5,678		2,560
Amounts due to related parties (Note 25)		—		4,892
Taxes payable		4,429		4,967
Other payables		2,571		1,418

		74,129		69,236

Total trade and other payables		85,353		81,021

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. Borrowings


	June 30,		December 31,
	2011		2010
	(unaudited)
Non-current
Syndicated loan (*)		20,000		20,000
BNDES loan (*)		68,337		70,149
IDB facility (*)		33,940		42,837
Brazil Loan (*)		44,840		42,792
Deustche Bank loan (*)		32,000		35,000
Other bank borrowings		54,932		39,813
Obligations under finance leases		11		81

		254,060		250,672

Current
Bank overdrafts		79		209
Syndicated loan (*)		10,680		10,165
BNDES loan (*)		12,341		11,901
IDB facility (*)		16,926		16,384
Brazil Loan (*)		1,073		4,317
Deustche Bank loan (*)		18,365		15,379
Other bank borrowings		119,292		80,078
Obligations under finance leases		260		367

		179,016		138,800

Total borrowings		433,076		389,472


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

As of June 30, 2011, total bank borrowings include collateralized liabilities of US$327,384 (December 31, 2010: US$350,654). These loans are mainly collateralized by property, plant and equipment and shares of certain subsidiaries of the Group.

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


	June 30,		December 31,
	2011		2010
	(unaudited)
Fixed rate:
Less than 1 year		54,655		52,326
Between 1 and 2 years		34,378		22,425
Between 2 and 3 years		8,327		7,661
Between 3 and 4 years		7,826		7,394
Between 4 and 5 years		6,124		5,920
More than 5 years		22,651		22,555

		133,961		118,281

Variable rate:
Less than 1 year		124,101		86,107
Between 1 and 2 years		86,415		70,905
Between 2 and 3 years		34,978		54,436
Between 3 and 4 years		17,517		17,506
Between 4 and 5 years		13,847		15,619
More than 5 years		21,986		26,170

		298,844		270,743

		432,805		389,024

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)

15. Borrowings (continued)

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


	June 30,		December 31,
	2011		2010
	(unaudited)
Currency
Argentine Peso		217		13
US Dollar		239,404		199,182
Uruguayan Peso		—		62
Brazilian Reais		193,455		190,215

		433,076		389,472

Obligations under finance leases

Lease liabilities are effectively secured as the rights to the leased asset revert to the lessor in the event of default.

Gross finance lease liabilities — minimum lease payments:


	June 30,			December 31,
	2011			2010
	(unaudited)
Not later than one year		275			396
Later than one year and not later than five years		11			81

		286			477
Future finance charges on finance leases		(15	)		(29	)

Present value of finance lease liabilities		271			448

16. Taxation

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


	June 30,			June 30,
	2011			2010
	(unaudited)			(unaudited)
Current income tax		(13,436	)		1,039
Deferred income tax		682			23,611

Income tax (charge) / benefit		(12,754	)		24,650

There has been no change in the statutory tax rates in the countries where the Group operates since December 31, 2010.

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)

16. Taxation (continued)

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


	June 30,			June 30,
	2011			2010
	(unaudited)			(unaudited)
Beginning of period		44,032			61,932
Exchange differences		(5,176	)		(5,851	)
IPO deductible expenses directly charged to equity (*)		(1,252	)		—
Income tax benefit		(682	)		(23,611	)

End of period		36,922			32,470


(*)		See Note 12.

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


	June 30,			June 30,
	2011			2010
	(unaudited)			(unaudited)
Tax calculated at the tax rates applicable to profits in the respective countries		(14,577	)		31,538
Non-deductible items		(1,030	)		(3,868	)
Unused tax losses, net		2,569			(3,396	)
Others		284			376

Income tax (charge) / benefit		(12,754	)		24,650

17. Payroll and social security liabilities


	June 30,		December 31,
	2011		2010
	(unaudited)
Non-current
Social security payable		1,230		1,178

		1,230		1,178

Current
Salaries payable		6,836		3,471
Social security payable		2,820		2,223
Provision for vacations		6,457		6,155
Provision for bonuses		2,183		3,629

		18,296		15,478

Total payroll and social security liabilities		19,526		16,656

F - 33

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

18. 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, 2010.

19. Sales


	June 30,		June 30,
	2011		2010
	(unaudited)		(unaudited)
Sales of manufactured products and services rendered:
Ethanol		52,988		35,660
Sugar		42,900		12,526
Rice		33,444		30,365
Energy		13,011		3,058
Operating leases		2,364		1,679
Coffee		713		2,709
Services		597		613
Others		161		50

		146,178		86,660

Sales of agricultural produce and biological assets:
Soybean		39,237		39,510
Cattle for dairy production		701		336
Other cattle		511		1,204
Corn		18,729		12,845
Cotton		787		886
Milk		8,262		5,615
Wheat		9,497		3,069
Coffee		3,204		1,310
Sunflower		6,055		1,717
Barley		570		406
Seeds		35		349
Sorghum		946		1,050
Others		159		344

		88,693		68,641

Total sales		234,871		155,301

F - 34

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


19.		Sales (continued)

Commitments to sell commodities at a future date

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

The notional amount of these contracts is US$75.1 million as of June 30, 2011 (2010: US$49.4 million) comprised primarily of 117,628 tons of sugar (US$60.5 million), 30,244 tons of soybean (U$S 9.5 million), 9,869 tons of corn (US$1.6 million) and 775 tons of coffee (U$S 3.5 million) which expire between July 2011 and November 2011.

20. Expenses by nature

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


	June 30,		June 30,
	2011		2010
	(unaudited)		(unaudited)
Cost of agricultural produce and biological assets sold		79,890		61,616
Raw materials and consumables used in manufacturing activities		62,330		49,949
Services		8,453		5,794
Salaries and social security expenses (Note 21)		29,245		22,110
Depreciation and amortization		13,988		13,950
Taxes (*)		883		1,778
Maintenance and repairs		4,911		3,867
Lease expense and similar arrangements (**)		1,192		916
Freights		14,227		7,780
Export taxes / selling taxes		11,806		11,429
Fuel and lubricants		3,891		2,834
Others		11,545		8,288

Total expenses by nature		242,361		190,311


(*)		Excludes export taxes and selling taxes.

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

For the six-month period ended June 30, 2011, an amount of US$96,086 is included as “Cost of manufactured products sold and services rendered” (June 30, 2010: US$75,560); an amount of US$88,693 is included as “Cost of agricultural produce sold and direct agricultural selling expenses” (June 30, 2010: US$68,641); an amount of US$33,508 is included in “General and administrative expenses” (June 30, 2010: US$28,655); and an amount of US$24,074 is included in “Selling expenses” as described above (June 30, 2010: US$17,455).

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. Salaries and social security expenses


	June 30,		June 30,
	2011		2010
	(unaudited)		(unaudited)
Wages and salaries		21,967		17,112
Social security costs		6,124		4,008
Equity-settled share-based compensation		1,154		990

		29,245		22,110

Number of employees		5,852		5,749

22. Other operating (loss)/ income, net


	June 30,			June 30,
	2011			2010
	(unaudited)			(unaudited)
Gain from commodity derivative financial instruments		3,649			8,931
Loss from onerous contracts — forwards		(5,632	)		—
Gain from disposal of other property items		335			654
Others		1,344			3

		(304	)		9,588

23. Financial results, net


	June 30,			June 30,
	2011			2010
	(unaudited)			(unaudited)
Finance income:
- Interest income		2,468			647
- Foreign exchange gains, net		713			—
- Gain from interest rate/foreign exchange rate derivative financial instruments		9,812			655
- Other income		618			1,106

Finance income		13,611			2,408


Finance costs:
- Interest expense		(17,135	)		(12,122	)
- Foreign exchange losses, net		—			(4,221	)
- Taxes		(2,292	)		(1,076	)
- Other expenses		(5,227	)		(1,139	)

Finance costs		(24,654	)		(18,558	)


Total financial results, net		(11,043	)		(16,150	)

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)

24. Earnings per share

(a) Basic

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Group by the weighted average number of shares in issue during the period (Note 12).


	June 30,		June 30,
	2011		2010
	(unaudited)		(unaudited)
Gain/(loss) attributable to equity holders of the Group		27,569		(69,170	)
Weighted average number of shares in issue (thousands)		118,843		120,000

Basic gains/(losses) per share		0.2320		(0.5764	)

(b) Diluted

Diluted earnings per share is calculated by adjusting the weighted average number of shares outstanding to assume conversion of all dilutive potential shares. The Group has two categories of dilutive potential shares: equity-settled share options and restricted shares. For these equity-settled share options, a calculation is done to determine the number of shares that could have been acquired at fair value, based on the monetary value of the subscription rights attached to outstanding share options. The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the equity-settled share options.


	June 30,		June 30,
	2011		2010
	(unaudited)		(unaudited)
Gain / (loss) attributable to equity holders of the Group		27,569		(69,170	)

Weighted average number of shares in issue (thousands)		118,843		120,000
Adjustments for:
- Employee share options (thousands)		809		(*	)
- Restricted shares (thousands)		27		(*	)

Weighted average number of shares for diluted earnings per share (thousands)		119,679		120,000

Diluted earnings per share		0.2304		(0.5764	)


(*)		The effects of anti-dilutive potential shares are ignored in the earnings per share calculation at June 30, 2010. All shares are anti-dilutive in a loss period because they would decrease a loss per share.

As explained in Note 12, on January 24, 2011 the Extraordinary General Meeting of Adecoagro’s shareholders held on January 24, 2011 approved the reverse split of Adecoagro’s common shares, changing the nominal value of Adecoagro’s common shares from US$1 to US$1.5. Accordingly, the calculation of basic and diluted earnings per share for all periods presented had been adjusted retrospectively.

F - 37

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

25. 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)
		Description of	June 30,			June 30,			June 30,			December
Related party	Relationship	transaction	2011			2010			2011			31, 2010
			(unaudited)			(unaudited)			(unaudited)
Grupo La Lácteo	Joint venture	Sales of goods		8,262			5,615			—			—
		Receivables from
		related parties
		(Note 9)		—			—			2,704			1,662

Mario Jorge de Lemos	(i)	Cost of manufactured
Vieira/ Cia Agropecuaria		products sold and
Monte Alegre/ Alfenas		services rendered (ii)		—			(1,236	)		—			—
Agricola Ltda/Marcelo		Receivables from
Weyland Barbosa Vieira/		related parties
Paulo Albert Weyland		(Note 9)		—			—			—			291
Vieira		Payables (Note 14)		—			—			—			(4,892	)

UMA members	(i)	Tax credit		—			(3,991	)		—			—

Ospraie	(i)	Consent fee (iii)		(3,000	)		—			—			—

Management and	Employment	Compensation
selected employees		selected employees
		(iv)		(3,146	)		(2,937	)		(13,713	)		(13,659	)


(i)		Shareholder or affiliate of shareholder of the Company.

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

(iii)		One-time cost related to the agreement entered into with Ospraie to waive certain rights following the completion of initial public offering.

(iv)		Includes compensation expense under equity-settled share-based payments (Note 13).

26. Events after the date of the statement of financial position

As regard the Senior Secured Loan facility with Deutsche Bank AG, dated July 28, 2010, which bears interest at a variable rate of LIBOR plus 8.5% per annum, on August 3, 2011 the Group fully prepaid the outstanding capital. This optional prepayment amounts to US$47.7 million including interest accrued until the prepayment date. Additionally, the Company paid the premium fee of 2.5% of the principal outstanding amount to be able to make the prepayment, equivalent to US$1.1 million.

F - 38


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