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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 20-F
 o
    
    REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
 OR
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED ON DECEMBER
31, 2010
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934FOR THE TRANSITION PERIOD FROM TO
 OR
 o
    
    SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934Date of event requiring this shell company report
 COMMISSION FILE NUMBER: 001-35052
 Adecoagro S.A.
  N/A
 Grand Duchy of Luxembourg
 13-15 Avenue de la Liberté
L-1931 Luxembourg
R.C.S. Luxembourg B 153 681
+352 2689-8213
 
  Title of Each Class
    
    Name of Each Exchange on Which RegisteredCommon Shares
    
    New York Stock Exchange
 
 
 
  o þ
 
 o þ
  þ o
  o o
 
 Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
 o þ o
 
 o o
  o þ




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##### 



TABLE OF CONTENTS
  
 PageForward-Looking Statements
    
    
    iPresentation of Financial and Other Information
    
    
    iiPART IItem 1. Identity of Directors, Senior Management and Advisers
    
    
    1Item 2. Offer Statistics and Expected Timetable
    
    
    1Item 3. Key Information
    
    
    1A. Selected Financial Data
    
    
    1B. Capitalization and Indebtedness
    
    
    9C. Reasons for the Offer and Use of Proceeds
    
    
    9D. Risk Factors
    
    
    9Item 4. Information on the Company
    
    
    34A. History and Development of the Company
    
    
    34B. Business Overview
    
    
    36C. Organizational Structure
    
    
    85D. Property, Plants and Equipment
    
    
    85Item 4A. Unresolved Staff Comments
    
    
    86Item 5. Operating and Financial Review and Prospects
    
    
    86A. Operating Results
    
    
    88B. Liquidity and Capital Resources
    
    
    119C. Research And Development, Patents and Licenses, Etc.
    
    
    127D. Trend Information
    
    
    128E. Off-Balance Sheet Arrangements
    
    
    128F. Tabular Disclosure of Contractual Obligations
    
    
    128G. Safe Harbor
    
    
    128Item 6. Directors, Senior Management and Employees
    
    
    128A. Directors and Senior Management
    
    
    128B. Compensation
    
    
    133C. Board Practices
    
    
    133D. Employees
    
    
    136E. Share Ownership
    
    
    136Item 7. Major Shareholders and Related Party Transactions
    
    
    140A. Major Shareholders
    
    
    140B. Related Party Transactions
    
    
    141C. Interests of Experts and Counsel
    
    
    142Item 8. Financial Information
    
    
    143A. Consolidated Statements and Other Financial Information
    
    
    143B. Significant Changes
    
    
    143Item 9. The Offer and Listing
    
    
    143A. Offer and Listing Details
    
    
    144B. Plan of Distribution
    
    
    144C. Markets
    
    
    144D. Selling Shareholders
    
    
    144




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PageE. Dilution
    
    
    144F. Expenses of the Issue
    
    
    144Item 10. Additional Information
    
    
    144A. Share Capital
    
    
    144B. Memorandum and Articles of Association
    
    
    144C. Material Contracts
    
    
    154D. Exchange Controls
    
    
    154E. Taxation
    
    
    156F. Dividends and Paying Agents
    
    
    163G. Statement by Experts
    
    
    163H. Documents on Display
    
    
    163I. Subsidiary Information
    
    
    163Item 11. Quantitative and Qualitative Disclosures About Market Risk
    
    
    163Item 12. Description of Securities Other than Equity Securities
    
    
    163A. Debt Securities
    
    
    163B. Warrants and Rights
    
    
    163C. Other Securities
    
    
    163D. American Depositary Shares
    
    
    163PART II
    
    
    163Item 13. Defaults, Dividend Arrearages and Delinquencies
    
    
    163Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
    
    
    164Item 15. Controls and Procedures
    
    
    164Item 16A. Audit Committee Financial Expert
    
    
    164Item 16B. Code of Ethics
    
    
    164Item 16C. Principal Accountant Fees and Services
    
    
    164Item 16D. Exemptions from the Listing Standards for Audit Committees
    
    
    165Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
    
    
    165Item 16F. Change in Registrants Certifying Accountant
    
    
    165Item 16G. Corporate Governance
    
    
    165PART IIIItem 17. Financial Statements
    
    
    168Item 18. Financial Statements
    
    
    168Item 19. Exhibits
    
    
    168




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FORWARD-LOOKING STATEMENTS
  
    
    our business prospects and future results of operations;
 
    
    weather and other natural phenomena;
 
    
    developments in, or changes to, the laws, regulations and governmental policies
governing our business, including limitations on ownership of farmland by foreign
entities in certain jurisdiction in which we operate, environmental laws and
regulations;
 
    
    the implementation of our business strategy, including our development of the
Ivinhema mill and other current projects;
 
    
    our plans relating to acquisitions, joint ventures, strategic alliances or
divestitures;
 
    
    the implementation of our financing strategy and capital expenditure plan;
 
    
    the maintenance of our relationships with customers;
 
    
    the competitive nature of the industries in which we operate;
 
    
    the cost and availability of financing;
 
    
    future demand for the commodities we produce;
 
    
    international prices for commodities;
 
    
    the condition of our land holdings;
 
    
    the development of the logistics and infrastructure for transportation of our
products in the countries where we operate;
 
    
    the performance of the South American and world economies;
 
    
    the relative value of the Brazilian Real, the Argentine Peso, and the Uruguayan
Peso compared to other currencies; and
 
    
    the factors discussed under the section entitled Risk Factors in this annual
report.
   i




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PRESENTATION OF FINANCIAL AND OTHER INFORMATION
 Certain Defined Terms
  
    
    References to the terms Adecoagro S.A., Adecoagro,
we, us, our, Company
and our company refer to, Adecoagro S.A., a corporation organized
under the form of a société anonymeunder the laws of the Grand Duchy of Luxembourg,
and its subsidiaries, except in the case of historical financial and operating
information and results where we are referring to IFH LLC and unless otherwise
indicated.
 
    
    References to IFH and IFH LP mean International Farmland Holdings, LP, a
limited partnership (previously International Farmland Holdings, LLC, or IFH LLC)
organized under the laws of Delaware, and its subsidiaries.
 
    
    References to Adecoagro LP mean Adecoagro, LP, a limited partnership (previously
Adecoagro, LLC) organized under the laws of Delaware, and its subsidiaries.
 
    
    References to $, US$, U.S. dollars and dollars are to U.S. dollars.
 
    
    References to Argentine Pesos, Pesos or Ps. are to Argentine Pesos, the
official currency of Argentina.
 
    
    References to Brazilian Real, Real, Reais or R$ are to the Brazilian Real,
the official currency of Brazil.
 
    
    Unless stated otherwise, references to sales are to the combined sales of
manufactured products and services rendered plus sales of agricultural produce and
biological assets.
 Financial Statements
 Background
 société anonyme
  ii




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Non-IFRS Financial Measures
   iii




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Fiscal Year and Harvest Year
  
 iv




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Certain Weight Units and Measures in the Agricultural Business
  Agricultural weight units and measures1 metric ton
    
    1,000 kg
    
    1.102 U.S. (short) tons1 cubic meter
    
    1,000 liters1 kilogram (kg)
    
    2.20462 pounds1 pound
    
    0.45359 kg1 acre
    
    0.40469 hectares1 hectare (ha)
    
    2.47105 acresSoybean and Wheat1 bushel of soybean
    
    60 pounds
    
    27.2155 kg1 bag of soybean
    
    60 kg
    
    2.20462 bushels1 bushel/acre
    
    67.25 kg/ha1.00 U.S. dollar/bushel
    
    2.2046 U.S. dollar/bagCorn1 bushel of corn
    
    56 pounds
    
    25.4012 kg1 bag of corn
    
    60 kg
    
    2.36210 bushels1 bushel/acre
    
    62.77 kg/ha1.00 U.S. dollar/bushel
    
    2.3621 U.S. dollar/bagCotton1 bale
    
    480 pounds
    
    217.72 kg1 arroba
    
    14.68 kgCoffee1 bag of coffee
    
    60 kg
    
    132.28 pounds1.00 US$ cents/pound
    
    1.3228 U.S. dollar/bagDairy1 liter
    
    0.264 gallons
    
    2.273 pounds1 gallon
    
    3.785 liters
    
    8.604 pounds1 lbs
    
    0.440 liters
    
    0.116 gallons1.00 U.S. dollar/liter
    
    43.995 U.S. dollar/cwt
    
    3.785 U.S. dollar/gallon1.00 U.S. dollar/cwt
    
    0.023 U.S. dollar/liter
    
    0.086 U.S. dollar/gallon1.00 U.S. dollar/gallon
    
    0.264 U.S. dollar/liter
    
    11.622 U.S. dollar/cwtSugar & Ethanol
1 kg of TRS equivalent
    
    0.95 kg of VHP Sugar
    
    0.59 liters of Hydrated Ethanol1.00 US$ cents/pound
    
    22.04 U.S. dollar/ton
 Presentation of Information  Market Data and Forecasts
  v




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Rounding
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PART I
 
 Item 1. Identity of Directors, Senior Management and Advisers
  
 Item 2. Offer Statistics and Expected Timetable
  
 Item 3. Key Information
 
 A. SELECTED FINANCIAL DATA
     For the Year Ended December 31,2010
    
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006(In thousands of $)Statement of Income Data:Sales of manufactured products and services rendered
    
    
    294,529
    
    
    
    183,386
    
    
    
    117,173
    
    
    
    69,807
    
    
    
    47,145Cost of manufactured products sold and services
rendered
    
    
    (219,201
    )
    
    
    (180,083
    )
    
    
    (105,583
    )
    
    
    (63,519
    )
    
    
    (29,016
    )Gross profit from manufacturing activities
    
    
    75,328
    
    
    
    3,303
    
    
    
    11,590
    
    
    
    6,288
    
    
    
    18,129Sale of agricultural produce and biological assets
    
    
    131,738
    
    
    
    130,217
    
    
    
    127,036
    
    
    
    72,696
    
    
    
    37,370Cost of agricultural produce sold and direct
agricultural selling expenses(l)
    
    
    (131,738
    )
    
    
    (130,217
    )
    
    
    (127,036
    )
    
    
    (72,696
    )
    
    
    (37,370
    )Initial recognition and changes in fair value of
biological assets and agricultural produce
    
    
    (30,528
    )
    
    
    71,668
    
    
    
    61,000
    
    
    
    26,935
    
    
    
    (66
    )Changes in net realizable value of agricultural
produce after harvest
    
    
    7,999
    
    
    
    12,787
    
    
    
    1,261
    
    
    
    12,746
    
    
    
    3,160Gross (loss)/profit from agricultural activities
    
    
    (22,529
    )
    
    
    84,455
    
    
    
    62,261
    
    
    
    39,681
    
    
    
    3,094Margin on manufacturing and agricultural activities
before operating expenses
    
    
    52,799
    
    
    
    87,758
    
    
    
    73,851
    
    
    
    45,969
    
    
    
    21,223General and administrative expenses
    
    
    (56,562
    )
    
    
    (52,393
    )
    
    
    (45,633
    )
    
    
    (33,765
    )
    
    
    (13,147
    )Selling expenses
    
    
    (52,528
    )
    
    
    (31,169
    )
    
    
    (24,496
    )
    
    
    (14,762
    )
    
    
    (8,578
    )Other operating income, net
    
    
    18,224
    
    
    
    13,071
    
    
    
    17,323
    
    
    
    2,238
    
    
    
    9,287Excess of fair value of net assets acquired over cost
    
    
    
    
    
    
    
    
    
    
    1,227
    
    
    
    28,979
    
    
    
    Share of loss of joint ventures
    
    
    (50
    )
    
    
    (294
    )
    
    
    (838
    )
    
    
    (553
    )
    
    
    (Loss)/profit from operations before financing and
taxation
    
    
    (38,117
    )
    
    
    16,973
    
    
    
    21,434
    
    
    
    28,106
    
    
    
    8,785Finance income
    
    
    16,559
    
    
    
    11,553
    
    
    
    2,552
    
    
    
    12,925
    
    
    
    2,595
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For the Year Ended December 31,2010
    
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006(In thousands of $)Finance costs
    
    
    (39,496
    )
    
    
    (34,216
    )
    
    
    (50,860
    )
    
    
    (12,458
    )
    
    
    (4,490
    )Financial results, net
    
    
    (22,937
    )
    
    
    (22,663
    )
    
    
    (48,308
    )
    
    
    467
    
    
    
    (1,895
    )(Loss)/profit before income tax
    
    
    (61,054
    )
    
    
    (5,690
    )
    
    
    (26,874
    )
    
    
    28,573
    
    
    
    6,890Income tax benefit/(expense)
    
    
    16,263
    
    
    
    5,415
    
    
    
    10,449
    
    
    
    59
    
    
    
    (1,379
    )(Loss)/profit for the year
    
    
    (44,791
    )
    
    
    (275
    )
    
    
    (16,425
    )
    
    
    28,632
    
    
    
    5,511Attributable to:Equity holders of the parent
    
    
    (43,904
    )
    
    
    (260
    )
    
    
    (18,947
    )
    
    
    28,587
    
    
    
    5,400Non-controlling interest
    
    
    (887
    )
    
    
    (15
    )
    
    
    2,522
    
    
    
    45
    
    
    
    111(Losses)/Earnings per share for (loss)/profit
attributable to the equity holders of the parent
during the year:Basic
    
    
    (0.361
    )
    
    
    (0.002
    )
    
    
    (0.168
    )
    
    
    0.299
    
    
    
    0.077Diluted
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    0.292
    
    
    
    0.074
 For the Year Ended December 31,2010
    
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006Cash Flow Data:Net cash generated from/ (used in) operating
activities (2)
    
    
    26,938
    
    
    
    (45,807
    )
    
    
    (21,427
    )
    
    
    (49,757
    )
    
    
    (20,018
    )Net cash used in investing activities (2)
    
    
    (111,725
    )
    
    
    (114,386
    )
    
    
    (188,515
    )
    
    
    (265,189
    )
    
    
    (35,327
    )Net cash generated from financing activities
    
    
    79,828
    
    
    
    156,047
    
    
    
    213,200
    
    
    
    292,353
    
    
    
    150,626Other Financial Data:Adjusted Segment EBITDA (unaudited)(3)Crops
    
    
    33,613
    
    
    
    21,120
    
    
    
    34,040
    
    
    
    27,216
    
    
    
    7,333Rice
    
    
    7,121
    
    
    
    13,244
    
    
    
    13,966
    
    
    
    2,014
    
    
    
    2,782Dairy
    
    
    2,649
    
    
    
    484
    
    
    
    (2,159
    )
    
    
    1,051
    
    
    
    (1,646
    )Coffee
    
    
    (2,854
    )
    
    
    (3,550
    )
    
    
    (1,693
    )
    
    
    (3,440
    )
    
    
    1,883Cattle
    
    
    4,369
    
    
    
    1,525
    
    
    
    (761
    )
    
    
    (1,188
    )
    
    
    (514
    )Farming subtotal
    
    
    44,898
    
    
    
    32,823
    
    
    
    43,393
    
    
    
    25,653
    
    
    
    9,837Ethanol, sugar and energy
    
    
    51,735
    
    
    
    (26,903
    )
    
    
    (6,979
    )
    
    
    (10,146
    )
    
    
    (880
    )Land transformation
    
    
    20,837
    
    
    
    18,839
    
    
    
    15,201
    
    
    
    33,114
    
    
    
    7,623Corporate
    
    
    (22,353
    )
    
    
    (22,262
    )
    
    
    (23,077
    )
    
    
    (11,435
    )
    
    
    (5,629
    )Adjusted Consolidated EBITDA
    
    
    95,117
    
    
    
    2,497
    
    
    
    28,539
    
    
    
    37,186
    
    
    
    10,951
 
 (1)
    
    Consists of two components: (i) the cost of our agricultural produce and/or biological
assets sold as appropriate plus (ii) in the case of agricultural produce, the direct costs of
selling, including but not limited to, transportation costs, export taxes and other levies. The
cost of our agricultural produce sold represents the recognition as an expense of our agricultural
produce held in inventory valued at net realizable value. The cost of our biological assets and/or
agricultural produce sold at the point of harvest represents the recognition as an expense of our
biological assets and/or agricultural produce measured at fair value less costs to sell, generally
representing the applicable quoted market price at the time of sale. Accordingly, the line item
Sales of agricultural produce and biological assets is equal to the line item Cost of
agricultural produce plus direct agricultural selling expenses. See Item 5. Operating and
Financial Review and ProspectsA. Operating ResultsCritical Accounting Policies and
EstimatesBiological Assets and Agricultural Produce.(2)
    
    For the years ended December 31, 2007 and 2006, the retroactive reclassification of long term
biological asset planting costs and purchase of cattle outflows from Net cash generated from/(used
in) operating activities to Net cash used in investing activities totaled $18,284 and $6,142,
respectively. For further information, please see Note 2.3 to the consolidated financial
statements.(3)
    
    See Presentation of Financial and Other Information for the definitions of Adjusted Segment
EBITDA and Adjusted Consolidated EBITDA and reconciliation table below. As of December 31,2010
    
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006(In thousands of $)Statement of
Financial Position
Data:Biological assets
    
    
    186,757
    
    
    
    230,454
    
    
    
    125,948
    
    
    
    102,562
    
    
    
    40,900Inventories
    
    
    57,170
    
    
    
    57,902
    
    
    
    61,221
    
    
    
    58,036
    
    
    
    23,146Property, plant and equipment, net
    
    
    751,992
    
    
    
    682,878
    
    
    
    571,419
    
    
    
    538,017
    
    
    
    226,404
 2




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As of December 31,2010
    
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006(In thousands of $)Total assets
    
    
    1,340,851
    
    
    
    1,269,174
    
    
    
    1,028,234
    
    
    
    945,047
    
    
    
    438,083Non-current borrowings
    
    
    250,672
    
    
    
    203,134
    
    
    
    4,099
    
    
    
    62,090
    
    
    
    9,276Total borrowings
    
    
    389,472
    
    
    
    306,781
    
    
    
    228,313
    
    
    
    159,925
    
    
    
    37,875Equity attributable to equity holders of the
parent
    
    
    708,532
    
    
    
    741,934
    
    
    
    581,159
    
    
    
    556,321
    
    
    
    313,213Non-controlling interest
    
    
    14,570
    
    
    
    15,222
    
    
    
    57,269
    
    
    
    60,544
    
    
    
    6,392
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As of December 31, 2010Sugar,Ethanol
    
    
    LandFarming
    
    
    and
    
    
    Trans-Crops
    
    
    Rice
    
    
    Dairy
    
    
    Coffee
    
    
    Cattle
    
    
    Subtotal
    
    
    Energy
    
    
    formation
    
    
    Corporate
    
    
    Total(In thousands of $)Adjusted Segment EBITDA
(unaudited)Profit/(Loss) from Operations
Before Financing and Taxation
    
    
    31,902
    
    
    
    5,041
    
    
    
    5,836
    
    
    
    (5,753
    )
    
    
    4,000
    
    
    
    41,026
    
    
    
    (77,627
    )
    
    
    20,837
    
    
    
    (22,353
    )
    
    
    (38,117
    )Initial recognition and
changes in fair value of long
term biological assets(l)
(unrealized)
    
    
    
    
    
    
    
    
    
    
    (3,610
    )
    
    
    2,450
    
    
    
    36
    
    
    
    (1,124
    )
    
    
    96,795
    
    
    
    
    
    
    
    
    
    
    
    95,671Adjusted Segment EBIT
(unaudited)(2)
    
    
    31,902
    
    
    
    5,041
    
    
    
    2,226
    
    
    
    (3,303
    )
    
    
    4,036
    
    
    
    39,902
    
    
    
    19,168
    
    
    
    20,837
    
    
    
    (22,353
    )
    
    
    57,554Depreciation and amortization
    
    
    1,711
    
    
    
    2,080
    
    
    
    423
    
    
    
    449
    
    
    
    333
    
    
    
    4,996
    
    
    
    32,567
    
    
    
    
    
    
    
    
    
    
    
    37,563Adjusted Segment EBITDA
(unaudited)(2)
    
    
    33,613
    
    
    
    7,121
    
    
    
    2,649
    
    
    
    (2,854
    )
    
    
    4,369
    
    
    
    44,898
    
    
    
    51,735
    
    
    
    20,837
    
    
    
    (22,353
    )
    
    
    95,117Reconciliation to Profit/(Loss)(Loss) for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (44,791
    )Initial recognition and
changes in fair value of long
term biological assets(l)
(unrealized)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    95,671Income tax benefit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (16,263
    )Interest expense, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    33,028Foreign exchange, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,324
    )Other financial expenses, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,767
    )Adjusted Consolidated EBIT
(unaudited)(2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    57,554Depreciation and amortization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    37,563Adjusted Consolidated EBITDA
(unaudited)(2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    95,117
 4




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##### Table of Contents



As of December 31, 2009Sugar,Ethanol
    
    
    LandFarming
    
    
    and
    
    
    Trans-Crops
    
    
    Rice
    
    
    Dairy
    
    
    Coffee
    
    
    Cattle
    
    
    Subtotal
    
    
    Energy
    
    
    formation
    
    
    Corporate
    
    
    Total(In thousands of $)Adjusted Segment EBITDA
(unaudited)Profit/(Loss) from Operations Before Financing and Taxation
    
    
    19,054
    
    
    
    11,792
    
    
    
    113
    
    
    
    (16,782
    )
    
    
    1,299
    
    
    
    15,476
    
    
    
    4,920
    
    
    
    18,839
    
    
    
    (22,262
    )
    
    
    16,973Initial recognition and changes in fair value of long term
biological assets(l)(unrealized)
    
    
    
    
    
    
    
    
    
    
    (32
    )
    
    
    12,662
    
    
    
    (127
    )
    
    
    12,503
    
    
    
    (57,335
    )
    
    
    
    
    
    
    
    
    
    
    (44,832
    )Adjusted Segment EBIT (unaudited)(2)
    
    
    19,054
    
    
    
    11,792
    
    
    
    81
    
    
    
    (4,120
    )
    
    
    1,172
    
    
    
    27,979
    
    
    
    (52,415
    )
    
    
    18,839
    
    
    
    (22,262
    )
    
    
    (27,859
    )Depreciation and amortization
    
    
    2,066
    
    
    
    1,452
    
    
    
    403
    
    
    
    570
    
    
    
    353
    
    
    
    4,844
    
    
    
    25,512
    
    
    
    
    
    
    
    
    
    
    
    30,356Adjusted Segment EBITDA (unaudited)(2)
    
    
    21,120
    
    
    
    13,244
    
    
    
    484
    
    
    
    (3,550
    )
    
    
    1,525
    
    
    
    32,823
    
    
    
    (26,903
    )
    
    
    18,839
    
    
    
    (22,262
    )
    
    
    2,497Reconciliation to Profit/(Loss)(Loss) for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (275
    )Initial recognition and changes in fair value of long
term biological assets(l)
(unrealized)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (44,832
    )Income tax benefit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,415
    )Interest expense, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27,750Foreign exchange, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,903
    )Other financial expenses, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,816Adjusted Consolidated EBIT (unaudited)(2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (27,859
    )Depreciation and amortization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30,356Adjusted Consolidated EBITDA (unaudited)(2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,497
 5




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##### Table of Contents



As of December 31, 2009Sugar,Ethanol
    
    
    LandFarming
    
    
    and
    
    
    Trans-Crops
    
    
    Rice
    
    
    Dairy
    
    
    Coffee
    
    
    Cattle
    
    
    Subtotal
    
    
    Energy
    
    
    formation
    
    
    Corporate
    
    
    Total(In thousands $)Adjusted Segment EBITDA
(unaudited)Profit/(Loss) from Operations Before Financing and Taxation
    
    
    27,523
    
    
    
    13,256
    
    
    
    (667
    )
    
    
    864
    
    
    
    1,289
    
    
    
    42,265
    
    
    
    (12,955
    )
    
    
    15,201
    
    
    
    (23,077
    )
    
    
    21,434Initial recognition and changes in fair value of long
term biological assets(l)
(unrealized)
    
    
    
    
    
    
    
    
    
    
    (1,840
    )
    
    
    (3,355
    )
    
    
    (2,567
    )
    
    
    (7,762
    )
    
    
    (13,448
    )
    
    
    
    
    
    
    
    
    
    
    (21,210
    )Adjusted Segment EBIT (unaudited)(2)
    
    
    27,523
    
    
    
    13,256
    
    
    
    (2,507
    )
    
    
    (2,491
    )
    
    
    (1,278
    )
    
    
    34,503
    
    
    
    (26,403
    )
    
    
    15,201
    
    
    
    (23,077
    )
    
    
    224Depreciation and amortization
    
    
    6,517
    
    
    
    710
    
    
    
    348
    
    
    
    798
    
    
    
    517
    
    
    
    8,890
    
    
    
    19,424
    
    
    
    
    
    
    
    
    
    
    
    28,314Adjusted Segment EBITDA (unaudited)(2)
    
    
    34,040
    
    
    
    13,966
    
    
    
    (2,159
    )
    
    
    (1,693
    )
    
    
    (761
    )
    
    
    43,393
    
    
    
    (6,979
    )
    
    
    15,201
    
    
    
    (23,077
    )
    
    
    28,538Reconciliation to Profit/(Loss)(Loss) for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (16,425
    )Initial recognition and changes in fair value of long
term biological assets(l)
(unrealized)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (21,210
    )Income tax benefit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,449
    )Interest expense, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21,830Foreign exchange, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    24,932Other financial expenses, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,546Adjusted Consolidated EBIT (unaudited)(2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    224Depreciation and amortization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28,314Adjusted Consolidated EBITDA (unaudited)(2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28,538
 6




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##### Table of Contents



As of December 31, 2009Sugar,Ethanol
    
    
    LandFarming
    
    
    and
    
    
    Trans-Crops
    
    
    Rice
    
    
    Dairy
    
    
    Coffee
    
    
    Cattle
    
    
    Subtotal
    
    
    Energy
    
    
    formation
    
    
    Corporate
    
    
    Total(In thousands $)Adjusted Segment EBITDA
(unaudited)Profit/(Loss) from Operations Before Financing and Taxation
    
    
    25,729
    
    
    
    1,363
    
    
    
    1,720
    
    
    
    2,809
    
    
    
    2,184
    
    
    
    33,805
    
    
    
    (27,378
    )
    
    
    33,114
    
    
    
    (11,435
    )
    
    
    28,106Initial recognition and changes in fair value of long
term biological assets(l)
(unrealized)
    
    
    
    
    
    
    
    
    
    
    (1,009
    )
    
    
    (6,571
    )
    
    
    (3,814
    )
    
    
    (11,394
    )
    
    
    11,117
    
    
    
    
    
    
    
    
    
    
    
    (277
    )Adjusted Segment EBIT (unaudited)(2)
    
    
    25,729
    
    
    
    1,363
    
    
    
    711
    
    
    
    (3,762
    )
    
    
    (1,630
    )
    
    
    22,411
    
    
    
    (16,261
    )
    
    
    33,114
    
    
    
    (11,435
    )
    
    
    27,829Depreciation and amortization
    
    
    1,487
    
    
    
    651
    
    
    
    340
    
    
    
    322
    
    
    
    442
    
    
    
    3,242
    
    
    
    6,115
    
    
    
    
    
    
    
    
    
    
    
    9,357Adjusted Segment EBITDA (unaudited)(2)
    
    
    27,216
    
    
    
    2,014
    
    
    
    1,051
    
    
    
    (3,440
    )
    
    
    (1,188
    )
    
    
    25,653
    
    
    
    (10,146
    )
    
    
    33,114
    
    
    
    (11,435
    )
    
    
    37,186Reconciliation to Profit/(Loss)Profit for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    28,632Initial recognition and changes in fair value of long
term biological assets(l)
(unrealized)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (277
    )Income tax benefit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (59
    )Interest expense, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,094Foreign exchange, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,971
    )Other financial expenses, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,410Adjusted Consolidated EBIT (unaudited)(2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27,829Depreciation and amortization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,357Adjusted Consolidated EBITDA (unaudited)(2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
        37,186
 7




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##### Table of Contents



As of December 31, 2009Sugar,Ethanol
    
    
    LandFarming
    
    
    and
    
    
    Trans-Crops
    
    
    Rice
    
    
    Dairy
    
    
    Coffee
    
    
    Cattle
    
    
    Subtotal
    
    
    Energy
    
    
    formation
    
    
    Corporate
    
    
    Total(In thousands $)Adjusted Segment EBITDA
(unaudited)Profit/(Loss) from Operations Before Financing and Taxation
    
    
    6,436
    
    
    
    2,632
    
    
    
    325
    
    
    
    (625
    )
    
    
    264
    
    
    
    9,032
    
    
    
    (2,241
    )
    
    
    7,623
    
    
    
    (5,629
    )
    
    
    8,785Initial recognition and changes in fair value of long
term biological assets(l)
(unrealized)
    
    
    
    
    
    
    
    
    
    
    (2,289
    )
    
    
    2,431
    
    
    
    (871
    )
    
    
    (730
    )
    
    
    (2,852
    )
    
    
    
    
    
    
    
    
    
    
    (3,582
    )Adjusted Segment EBIT (unaudited)(2)
    
    
    6,436
    
    
    
    2,632
    
    
    
    (1,964
    )
    
    
    1,806
    
    
    
    (607
    )
    
    
    8,302
    
    
    
    (5,093
    )
    
    
    7,623
    
    
    
    (5,629
    )
    
    
    5,203Depreciation and amortization
    
    
    897
    
    
    
    150
    
    
    
    318
    
    
    
    77
    
    
    
    93
    
    
    
    1,535
    
    
    
    4,213
    
    
    
    
    
    
    
    
    
    
    
    5,748Adjusted Segment EBITDA (unaudited)(2)
    
    
    7,333
    
    
    
    2,782
    
    
    
    (1,646
    )
    
    
    1,883
    
    
    
    (514
    )
    
    
    9,837
    
    
    
    (880
    )
    
    
    7,623
    
    
    
    (5,629
    )
    
    
    10,951Reconciliation to Profit/(Loss)Profit for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,511Initial recognition and changes in fair value of long
term biological assets(l)
(unrealized)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,582
    )Income tax expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,379Interest expense, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,754Foreign exchange, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (565
    )Other financial expenses, net
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    706Adjusted Consolidated EBIT (unaudited)(2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,203Depreciation and amortization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,748Adjusted Consolidated EBITDA (unaudited)(2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,951
 
 (1)
    
    Long-term biological assets are sugarcane, coffee, dairy and cattle.(2)
    
    See Presentation of Financial and Other Information for the definitions of Adjusted Segment
EBIT, Adjusted Consolidated EBIT, Adjusted Segment EBITDA and Adjusted Consolidated EBITDA. 8




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##### Table of Contents



B. CAPITALIZATION AND INDEBTEDNESS
  
 C. REASONS FOR THE OFFER AND USE OF PROCEEDS
  
 D. RISK FACTORS
 Investing in our common shares involves a high degree of risk. Before making an investment
decision, you should carefully consider the information contained in this annual report,
particularly the risks described below, as well as in our consolidated financial statements and
accompanying notes. Our business activities, cash flow, financial condition and results of
operations could be materially and adversely affected by any of these risks. The market price of
our common shares may decrease due to any of these risks or other factors, and you may lose all or
part of your investment. The risks described below are those that we currently believe may
materially affect us.
 Risks Related to Our Business and Industries
 Unpredictable weather conditions, pest infestations and diseases may have an adverse impact on
agricultural production and may reduce the volume and sucrose content of sugarcane that we can
cultivate and purchase in a given harvest.
     9




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##### Table of Contents



Fluctuation in market prices for our products could adversely affect our financial condition and
results of operations.
  
    
    prevailing world commodity prices, which historically have been subject to
significant fluctuations over relatively short periods of time, depending on worldwide
demand and supply;
    
    changes in the agricultural subsidy levels of certain important producers (mainly the
U.S. and the European Union (E.U.) and the adoption of other government policies
affecting industry market conditions and prices;
    
    changes to trade barriers of certain important consumer markets (including China,
India, the U.S. and the E.U.) and the adoption of other governmental policies affecting
industry market conditions and prices;
    
    changes in government policies for biofuels;
    
    world inventory levels, i.e., the supply of commodities carried over from year to
year;
    
    climatic conditions and natural disasters in areas where agricultural products are
cultivated;
    
    the production capacity of our competitors; and
    
    demand for and supply of competing commodities and substitutes.
   Ethanol prices are correlated to the price of sugar and are becoming closely correlated to the
price of oil, so that a decline in the price of sugar will adversely affect both our ethanol and
sugar businesses, and a decline in the price of oil may adversely affect our ethanol business.
  10




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The expansion of our business through acquisitions poses risks that may reduce the benefits we
anticipate from these transactions.
    Adverse conditions may create delays in or the suspension of the construction of our Ivinhema
mill and/or significantly increase the amount of our expected investments.
   11




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A significant increase in the price of raw materials we use in our operations, or the shortage of
such raw materials, could adversely affect our results of operations.
   Increased energy prices and frequent interruptions of energy supply could adversely affect our
business.
  We depend on international trade and economic and other conditions in key export markets for our
products.
  12




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Our business is seasonal, and our revenues may fluctuate significantly depending on the growing
cycle of our crops.
 i.e.
 Our dairy and beef cattle are vulnerable to diseases.
  Our current insurance coverage may not be sufficient to cover our potential losses.
  13




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We may be exposed to material losses due to volatile prices of agricultural products since we do
not fully hedge our agricultural products price risk. We also may not be able to realize gains
related to price appreciation for hedged positions.
   A reduction in market demand for ethanol or a change in governmental policies reducing the amount
of ethanol required to be added to gasoline may adversely affect our business.
 Conselho Interministerial do Açúcar e Álcool
  Growth in the sale and distribution of ethanol depends in part on infrastructure improvements,
which may not occur on a timely basis, if at all.
  14




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We may be harmed by competition from alternative fuels, products and production methods.
  A substantial portion of our assets is farmland that is highly illiquid.
  We lease or have agriculture partnerships relating to a significant portion of our sugarcane
plantations.
  15




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We may be subject to labor disputes from time to time that may adversely affect us.
  We are subject to extensive environmental regulation, and concerns regarding climate change may
subject us to even stricter environmental regulations.
  Some of the agricultural commodities and food products that we produce contain genetically
modified organisms.
  If our products become contaminated, we may be subject to product liability claims, product
recalls and restrictions on exports that would adversely affect our business.
  16




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Our principal shareholders have the ability to direct our business and affairs, and their
interests could conflict with yours.
  Our internal controls over financial reporting may not be effective and our independent
registered public accounting firm may not be able to certify as to their effectiveness, which
could have a significant and adverse effect on our business and reputation.
   17




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The historical financial information in this annual report may not accurately predict our costs
of operations in the future.
  IFRS accounting standards require us to make numerous estimates in the compilation and
preparation of our financial results and limit the comparability of our financial statements to
similar issuers using U.S. GAAP.
 i.e.
 Certain of our subsidiaries have substantial indebtedness which could impair their financial
condition and decrease the amount of dividends we receive.
   The terms of the indebtedness of, and past breaches of financial ratio covenants by, certain of
our subsidiaries impose significant restrictions on their operating and financial flexibility.
  18




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Fluctuations in interest rates could have a significant impact on our results of operations,
indebtedness and cash flow.
 Taxa de Juros de Longo Prazo Certificado de
Depósito Interbancario
  19




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We may not be able to renew our credit lines when they mature, depriving us of needed liquidity.
  There is a risk that we could be treated as a U.S. domestic corporation for U.S. federal income
tax purposes, which could materially increase our U.S. federal income tax liability and subject
any dividends we pay to U.S. federal withholding tax.
  Risks Associated with the Countries in which We Operate
 We operate our business in emerging markets. Our results of operations and financial condition
are dependent upon economic conditions in those countries in which we operate, and any decline in
economic conditions could harm our results of operations or financial condition.
   20




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The economies of the countries in which we operate may be adversely affected by the deterioration
of other global markets.
    Governments have a high degree of influence in the economies in which we operate, which could
adversely affect our results of operations or financial condition.
  
    
    labor laws;
    
    economic growth;
    
    currency fluctuations;
    
    inflation;
    
    exchange and capital control policies;
    
    interest rates;
    
    liquidity of domestic capital and lending markets;
    
    monetary policy;
 21




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
    
    liquidity and solvency of the financial system;
    
    limitations on ownership of rural land by foreigners;
    
    developments in trade negotiations through the World Trade Organization or other
international organizations;
    
    environmental regulations;
    
    tax laws, including royalties and the effect of tax laws on distributions from our
subsidiaries;
    
    restrictions on repatriation of investments and on the transfer of funds abroad;
    
    expropriation or nationalization;
    
    import/export restrictions or other laws and policies affecting foreign trade and
investment;
    
    price fixing regulations;
    
    restrictions on land use or agricultural commodity production; and
    
    other political, social and economic developments, including political, social or
economic instability, in or affecting the country where each business is based.
  Currency exchange rate fluctuations relative to the U.S. dollar in the countries in which we
operate our businesses may adversely impact our results of operations and financial condition.
    22




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Inflation in some of the countries in which we operate, along with governmental measures to
combat inflation, may have a significant negative effect on the economies of those countries and,
as a result, on our financial condition and results of operations.
  Instituto
Nacional de Estadísticas y Censos
 Indice Geral
de Preços Mercado Fundação Getúlio Vargas .
 23




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Sistema Especial de Liquidação e
Custódia Comitê de Política
Monetária
    Disruption of transportation and logistics services or insufficient investment in public
infrastructure could adversely affect our operating results.
   24




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Risks Related to Argentina
 Argentine economic and political conditions and perceptions of these conditions in the
international market may have a direct impact on our business and our access to international
capital and debt markets, and could adversely affect our results of operations and financial
condition.
    The economy of Argentina may be affected by its governments limited access to financing from
international markets.
 e.g.
 25




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Proposed changes in Argentine law concerning foreign ownership of rural properties may adversely
affect our results of operations and future investments in rural properties in Argentina.
 Ley de Sociedades
  The lack of financing for Argentine companies may have an adverse effect on the results of our
operations in Argentina and on the market price of our common shares.
  Administradoras de Fondos de Jubilaciones y Pensiones Administración Nacional de la Seguridad Social
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There are concerns about the accuracy of the INDECs measurements.
    Government intervention in Argentina may have a direct impact on our prices and sales.
  Government measures to preempt or respond to social unrest may adversely affect the Argentine
economy and our business.
  27




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Disputes between the Argentine government and the agricultural sector may adversely affect the
Argentine economy and our business.
 retenciones móviles
 The Argentine government may order salary increases to be paid to employees in the private
sector, which would increase our operating costs.
  An increase in export duties and controls may have an adverse impact on our sales.
  Exchange controls could restrict the inflow and outflow of funds in Argentina.
  e.g.
 28




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Risks Related to Brazil
 Brazilian economic and political conditions and perceptions of these conditions in international
markets have a direct impact on our business and our access to international capital and debt
markets and could adversely affect our results of operations and financial condition.
   Changes in Brazilian tax laws may increase our tax burden.
  Widespread corruption and fraud relating to ownership of real estate may adversely affect our
business, especially our land transformation business.
  Social movements and the possibility of expropriation may affect the normal use of, damage, or
deprive us of the use of or fair value of, our properties.
 Movimento dos Trabalhadores Rurais Sem Terra Comissão Pastoral
da Terra
 29




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Recent changes in Brazilian rules concerning foreign investment in rural properties may adversely
affect our investments.
 in rem Conselho de Defesa
Nacional módulos de exploração indefinida Instituto Nacional de Colonização e
Reforma Agraria
  30




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The Brazilian government has exercised, and continues to exercise, significant influence over the
Brazilian economy.
  
    
    interest rates;
    
    monetary policy;
    
    limitation on ownership of rural land by foreigners;
    
    exchange controls and restrictions on remittances abroad;
    
    currency fluctuations;
    
    inflation;
    
    the liquidity of domestic capital and financial markets;
    
    tax policy; and
    
    other political, social and economic policies or developments in or affecting
Brazil.
  Our business in Brazil is subject to governmental regulation.
  31




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Agência Nacional do Petróleo Gás
Natural e Biocombustível Agência Nacional de
Energia Elétrica Ministerio da Agricultura Pecuaria e Abastecimento
 Government laws and regulations in Brazil governing the burning of sugarcane could have a
material adverse impact on our business or financial performance.
   Risks Related to a Luxembourg Company
 We are a Luxembourg corporation (société anonyme) and it may be difficult for you to obtain or
enforce judgments against us or our executive officers and directors in the United States.
   32




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
    
    the judgment of the U.S. court is enforceable (exécutoire) in the United States;
    
    the U.S. court had jurisdiction over the subject matter leading to the judgment
(that is, its jurisdiction was established in compliance both with Luxembourg private
international law rules and with the applicable domestic U.S. federal or state
jurisdictional rules);
    
    the U.S. court has applied to the dispute the substantive law which would have been
applied by Luxembourg courts;
    
    the judgment was granted following proceedings where the counterparty had the
opportunity to appear, and if it appeared, to present a defense;
    
    the U.S. court has acted in accordance with its own procedural laws; and
    
    the judgment of the U.S. court does not contravene Luxembourg international public
policy.
  You may have more difficulty protecting your interests than you would as a shareholder of a U.S.
corporation.
  You may not be able to participate in equity offerings, and you may not receive any value for
rights that we may grant.
  33




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Item 4. Information on the Company
 
 A. HISTORY AND DEVELOPMENT OF THE COMPANY
 General Information
 société anonyme
    History
  sociedad anónima
     34




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de minimis de minimis
  
 
 *
    
    Existing  Shareholders refer to shareholders of record prior to our IPO.**
    
    Does not account for an immaterial amount of shares required to be owned by other persons
pursuant to Maltese law.***
    
    Existing Shareholders retained a 2% stake in
IFH in amounts corresponding to their ownership of the Company. The 2% ownership does not
carry any preferential treatment. 35




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Principal Capital Expenditures
   
 B. BUSINESS OVERVIEW
 Our Company
    Year Ended December 31, 2010Sugar, Ethanol &Key Metrics
    
    Farming
    
    
    Energy
    
    
    Land TransformationOwned Hectares(1)
    
    
    269,577
    
    
    
    13,221Leased Hectares(2)
    
    
    37,707
    
    
    
    43,892Total Planted Hectares
2010/2011(3)
    
    
    196,155
    
    
    
    53,799Production 2009/2010(4)
    
    Crops, Rice, Coffee:
    
    Sugar:235,690 tons
    
    6,490 hectares(5)618,834
    
    
    Ethanol:174,303 m3Milk:41.6 million liters
    
    Energy:168,644MWhSales (in thousands of
$)(6)
    
    
    197,741
    
    
    
    228,526
    
    
    
    20,837
 36




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(1)
    
    Owned hectares in Farming business includes land used for productive activities (crops,
rice, coffee, cattle), land which is potentially croppable and land set aside as legal reserve and
other reserves.(2)
    
    Includes leased planted land (excluding second harvest) with crops and rice during the
2010/2011 harvest year.(3)
    
    Includes owned and leased planted land (including second harvest) with crops, rice, forage and
coffee during the 2010/2011 harvest year. Includes data as of March 31, 2011, to reflect full
harvest year.(4)
    
    Production in tons of crops, rice and coffee for 2009/2010 harvest year. Production in liters
of raw milk, tons of sugar, cubic meters of ethanol and MWh of energy for the period indicated. See
Presentation of Financial and Other Information.(5)
    
    Consists of undeveloped and/or undermanaged land put into production.(6)
    
    Sales in Land Transformation business represents capital gain from the sale of one of our
farms.  
    
    one of the largest owners of productive farmland in South America, with more than
225,676 owned hectares as of December 31, 2010 used in productive activities
(excluding legal land reserves pursuant to local regulations and other land reserves)
located in Argentina, Brazil and Uruguay, producing a wide range of agricultural
products.
    
    a leading producer of agricultural commodities in South America. During the
2009/2010 harvest year, we harvested 168,016 hectares (including 48,001 leased
hectares) and produced 524,890 tons of grains, including soybeans, corn, wheat,
sunflower and cotton.
    
    one of the largest producers of rough (unprocessed) rice in the world, planting
18,142 hectares (including 7,311 leased hectares) and producing over 91,000 tons
during the 2009/2010 harvest year, which accounted for 8% of the total Argentine
production according to the Confederacion de Molinos Arroceros del Mercosur
(Conmasur). As of December 31, 2010, we planted 27,542 hectares of rice (including
4,389 leased hectares). We are also a large processor and exporter of white rice in
Argentina, accounting for 12.8% of total white rice produced in Argentina and 15.5% of
total Argentine white rice exports during 2010, according to Aduana Argentinaand the
Federacion de Entidades Arroceras, respectively.
    
    a leading dairy producer in South America in terms of our cutting-edge technology,
productivity per cow and grain conversion efficiencies, producing over 41.6 million
liters of raw milk during 2010 and 11.2 million liters of raw milk during the first
quarter of 2011.
    
    one of the largest producers of green bean coffee in the world, with 1,632 fully
integrated and mechanized hectares devoted to coffee production as of December 31,
2010.
    
    a growing producer of sugar and ethanol in Brazil, where we are in the process of
building what we expect will be one of the most cost-efficient sugarcane crushing
clusters in Brazil. In the sugar and ethanol area:
 
    
    we currently own two sugar and ethanol mills in Brazil with an
aggregate installed crushing capacity of 5.2 million tons per year and
cogeneration (the generation of electricity from sugarcane bagasse, the fiber
portion of sugarcane that remains after the extraction of sugarcane juice)
capacity of 112 MW as of December 31, 2010;
 37




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
    
    we are currently in the process of obtaining the necessary
authorizations to start building our third sugar and ethanol mill in Brazil,
which, when combined with our existing Angélica mill (Angélica), will form a
cluster that we believe will allow us to become one of the lowest-cost producers
of sugar, ethanol and energy from sugarcane in Brazil; and
 
    
    we expect our planned cluster to have a total installed
sugarcane crushing capacity of 10.3 million tons per year and a cogeneration
capacity of 296 MW once it reaches full capacity in 2017, resulting in a total
sugarcane crushing capacity of 11.5 million tons per year for our three mills
together at that time.
 
    
    one of the leading companies in South America involved in the acquisition and
transformation of undermanaged land to more productive uses, generating higher cash
yields. During the last five fiscal years, we sold over 27,169 hectares of developed
land, generating capital gains of approximately $95 million.
  Farming Business
 
    
    Crop business: We produce a wide range of agricultural commodities including
soybeans, corn, wheat, sunflower and cotton, among others. In Argentina, our farming
activities are conducted mainly in the Argentine humid pampas region, where
agro-ecological conditions are optimal for low-cost production. Since 2004, we have
expanded our operations throughout the center-west region of Uruguay and the western
part of the state of Bahia, Brazil, as well as in the northern region of Argentina.
During the 2009/2010 harvest year, we planted approximately 168,016 hectares of crops,
including second harvests, producing 524,890 tons of grains, including soybeans, wheat
and corn, sunflower and cotton. We also produced over 52,000 tons of forage that we
used for cow feed in our dairy operation. During 2010/2011 harvest year we planted
166,981 hectares of crops, including second harvests.
    
    Rice business: We own a fully-integrated rice operation in Argentina. We produce
irrigated rice in the northeast provinces of Argentina, where the availability of
water, sunlight, and fertile soil results in one of the most ideal regions in the
world for producing rice at low cost. We believe that we are one of the largest
producers of rough (unprocessed) rice in Argentina, producing 91,000 tons during the
2009/2010 harvest year, which accounted for 8% of the total Argentine production
according to Conmasur. As of December 31, 2010, we planted 27,542 hectares of rice,
including 4,389 leased hectares. We own four rice mills that process our own
production, as well as rice purchased from third parties. We produce different types
of white and brown rice that are both sold in the domestic Argentine retail market and
exported.
    
    Coffee business: Our integrated coffee operation is located in the western part of
the state of Bahia, Brazil, where conditions are well-suited for producing specialty
coffee due to the availability of water for irrigation, the absence of frosts and the
flat topography that allows for a fully mechanized harvest. We grow coffee on 1,632
owned hectares and have available land and water to expand our operations to 2,700
hectares.
 38




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
    
    Dairy business: We believe that we are a leading dairy producer in South America in
terms of our utilization of cutting-edge technology, productivity per cow and grain
conversion efficiencies, producing over 41.6 million liters of raw milk during 2010,
with an average of 4,225 milking cows, delivering an average of 27 liters of milk per
cow per day. During the first quarter of 2011, we produced 11.2 million liters of raw
milk, with an average of 4,413 milking cows, delivering an average of 28.3 liters of
milk per cow per day. Through the production of raw milk, we are able to transform
forage and grains into value-added animal protein. We believe that our free-stall
dairy in Argentina is the first of its kind in South America and allows us to optimize
our use of resources (land, dairy cow feed and capital), increase our productivity and
maximize the conversion of forage and grain into raw milk.
    
    Cattle business: Until December 2009, we owned 58,348 head of cattle, which we
fattened for sale to meat processors and in Argentinas livestock auction markets. In
December 2009, we sold 55,543 head of cattle from our herd, not including cattle used
in our dairy business, to a meat processor for a total price of $14.2 million.
Additionally, we entered into a long-term lease agreement pursuant to which the meat
processor leases approximately 74,000 hectares of grazing land from us to raise and
fatten the purchased cattle. The lease agreement is tied to the market price of beef
at the end of each quarter.
  Year Ended December 31,2010
    
    
    2009
    
    
    2008
    
    
    2007Sales
    
    (In thousands of $)Crops(l)
    
    
    108,162
    
    
    
    92,029
    
    
    
    95,987
    
    
    
    59,293Rice(2)
    
    
    61,585
    
    
    
    69,350
    
    
    
    56,925
    
    
    
    26,422Coffee
    
    
    7,572
    
    
    
    14,265
    
    
    
    15,948
    
    
    
    7,267Dairy(3)
    
    
    14,297
    
    
    
    11,894
    
    
    
    14,821
    
    
    
    17,841Cattle(4)
    
    
    6,125
    
    
    
    28,478
    
    
    
    9,357
    
    
    
    7,258Total
    
    
    197,741
    
    
    
    216,016
    
    
    
    193,038
    
    
    
    118,081
 2010/2011
    
    
    2009/2010
    
    
    2008/2009
    
    
    2007/2008Harvest
    
    
    Harvest
    
    
    Harvest
    
    
    HarvestProduction
    
    Year(5)
    
    
    Year
    
    
    Year
    
    
    YearCrops (tons)(6)
    
    
    N/A
    
    
    
    524,890
    
    
    
    317,582
    
    
    
    351,787Rice (tons)(7)
    
    
    N/A
    
    
    
    91,723
    
    
    
    94,968
    
    
    
    98,577Coffee (tons)
    
    
    N/A
    
    
    
    2,221
    
    
    
    2,412
    
    
    
    3,028Total
    
    
    N/A
    
    
    
    618,723
    
    
    
    414,962
    
    
    
    453,392
 Year Ended December 31,2010
    
    
    2009
    
    
    2008
    
    
    2007Dairy (thousands of liters)(8)
    
    
    41,597
    
    
    
    47,479
    
    
    
    43,110
    
    
    
    34,592Cattle (tons)(4)(9)
    
    
    359
    
    
    
    4,149
    
    
    
    7,229
    
    
    
    6,632
 39




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2010/2011
    
    
    2009/2010
    
    
    2008/2009
    
    
    2007/2008Harvest
    
    
    Harvest
    
    
    Harvest
    
    
    HarvestYear
    
    
    Year
    
    
    Year
    
    
    YearPlanted Area
    
    (In hectares, including second harvest)Crops(10)
    
    
    166,981
    
    
    
    168,241
    
    
    
    139,518
    
    
    
    107,027Rice
    
    
    27,542
    
    
    
    18,142
    
    
    
    17,258
    
    
    
    14,820Coffee(11)
    
    
    1,632
    
    
    
    1,632
    
    
    
    1,632
    
    
    
    1,632Cattle(12)
    
    
    78,559
    
    
    
    87,392
    
    
    
    106,375
    
    
    
    124,635
 
 (1)
    
    Includes soybeans, corn, wheat, sunflower and cotton, among others.(2)
    
    Sales of processed rice, including rough rice purchased from third parties and processed in our
facilities.(3)
    
    Sales of raw milk and whole milk powder produced in 2007 pursuant to an agreement with a third
party.(4)
    
    In December 2009, we sold 55,543 head of cattle to a third party. The third party currently
leases grazing land from us to raise and fatten the cattle, and our payments under the lease are
tied to the market price of beef. See Operations and Principal ActivitiesFarmingCattle
Business.(5)
    
    As of the date of this annual report, the 2010/2011 harvest year crops were not fully
harvested. 2010/2011 harvesting operations began in October 2010, with the harvest of winter crops,
and will finish in August 2011, with the harvest of coffee.(6)
    
    Crop production does not include 52,482 tons, 52,960 tons and 53,398 tons of forage produced in
the 2009/2010, 2008/2009 and 2007/2008 harvest years, respectively.(7)
    
    Expressed in tons of rough rice produced on owned and leased farms.(8)
    
    Raw milk produced at our dairy farms.(9)
    
    Measured in tons of live weight. Production is the sum of the net increases (or decreases)
during a given period in live weight of each head of beef cattle.(10)
    
    Includes 3,653 hectares, 4,561 hectares, 5,382 hectares and 4,454 hectares used for the
production of forage during the 2010/2011, 2009/2010, 2008/2009 and 2007/2008 harvest years,
respectively.(11)
    
    Reflects the size of our coffee plantations, which are planted only once every 18 to 20 years.(12)
    
    Comprised of land devoted to raising beef cattle, which, since December 2009, is mostly leased
to a third party. See Operations and Principal ActivitiesFarmingCattle Business. Sugar Ethanol and Energy Business: Açúcar Monte Alegre
  40




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Year Ended December 31,2010
    
    
    2009
    
    
    2008
    
    
    2007Sales
    
    (In thousands of $)Sugar
    
    
    98,385
    
    
    
    26,143
    
    
    
    20,495
    
    
    
    17,133Ethanol
    
    
    114,793
    
    
    
    62,811
    
    
    
    29,385
    
    
    
    7,289Energy
    
    
    15,040
    
    
    
    8,216
    
    
    
    
    
    
    
    Other
    
    
    308
    
    
    
    417
    
    
    
    1,291
    
    
    
    Total(1)
    
    
    228,526
    
    
    
    97,587
    
    
    
    51,171
    
    
    
    24,422
 
 (1)
    
    Includes sales of sugarcane and other miscellaneous items to third parties. Year Ended December 31,Production
    
    2010
    
    
    2009
    
    
    2008
    
    
    2007Sugar (tons)
    
    
    235,690
    
    
    
    52,968
    
    
    
    67,772
    
    
    
    72,372Ethanol (cubic meters)
    
    
    174,303
    
    
    
    132,492
    
    
    
    70,067
    
    
    
    29,375Energy (MWh exported)
    
    
    168,644
    
    
    
    128,291
    
    
    
    
    
    
    
    
 Year Ended December 31,Other Metrics
    
    2010
    
    
    2009
    
    
    2008
    
    
    2007Sugarcane milled (% owned)
    
    
    95
    %
    
    
    94
    %
    
    
    98
    %
    
    
    100
    %Sugarcane crushing capacity
(millions of tons)
    
    
    5.2
    
    
    
    3.3
    
    
    
    1.7
    
    
    
    0.9% Mechanized harvesting
operations  Consolidated
    
    
    80
    %
    
    
    66
    %
    
    
    32
    %
    
    
    0
    %% Mechanized /harvesting
operations  Angélica mill
    
    
    100
    %
    
    
    99
    %
    
    
    99
    %
    
    NA
 Land Transformation Business:
 41




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##### Table of Contents



Year Ended December 31,2010
    
    
    2009
    
    
    2008
    
    
    2007Undeveloped/Undermanaged
land put into production
(hectares)
    
    
    6,490
    
    
    
    11,255
    
    
    
    33,387
    
    
    
    17,591Ongoing transformation of
croppable land (hectares)
    
    
    120,738
    
    
    
    110,751
    
    
    
    80,720
    
    
    
    66,562Number of farms sold
    
    
    1
    *
    
    
    1
    
    
    
    3
    
    
    
    2Hectares sold
    
    
    5,086
    
    
    
    5,005
    
    
    
    4,857
    
    
    
    8,714Capital gains from the sale
of land ($ thousands)
    
    
    20,837
    
    
    
    18,839
    
    
    
    15,201
    
    
    
    33,114
 
 *
    
    On December 21, 2010, we completed the sale of La Macarena, a 5,086 hectare farm located in
Rio Negro, Uruguay, for US$34 million. Our Strengths
  
    
    Unique and strategic asset base.We own strategically located farmland and
agro-industrial assets in Argentina, Brazil and Uruguay. We engage in continued
improvement of our operations and practices, resulting in the reduction of operating costs
and an increase in productivity, ultimately enhancing the value of our properties and
generating capital gains. Our operations also benefit from strategically located
industrial facilities throughout Argentina and Brazil, increasing operating efficiencies
and reducing operating and logistical costs. We are vertically integrated where economics
and returns are attractive, where the efficiency of our primary operation is significantly
enhanced, or where lack of a competitive market results in the absence of a transparent
price determination mechanism. Our diversified asset base creates valuable synergies and
economies of scale, including (i) the ability to transfer the technologies and best
practices that we have developed across our business lines, (ii) the ability to apply
value-adding land transformation strategies to farmland in connection with our farming and
sugarcane operations, and (iii) a greater ability to negotiate more favorable terms with
our suppliers and customers.
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Owning a significant portion of the land on which we operate is a key element of our
business model.
    
    Low-cost production leveraging agro-ecological competitive advantages.Each of the
commodity products we grow is produced in regions where agro-ecological conditions provide
competitive advantages and which, through the implementation of our efficient and
sustainable production model, allow us to become one of the lowest cost producers.
 
    
    Our grain and oilseed production is based in the Argentine humid
pampas region where soil fertility, regular rainfalls, temperate climate,
availability of land and proximity to ports contribute to the reduced use of
fertilizers and agrochemicals, high productivity and stable yields and efficient
logistics, ultimately resulting in one of the lowest costs per ton of grain
produced and delivered.
    
    Our cotton and coffee production is focused in western Bahia, Brazil.
This region is excellent for producing high quality cotton fiber and specialty
coffee at a low cost due to its ideal climate, well drained soils, high altitude,
availability of water for irrigation, and absence of frosts.
    
    Our rice operation is located in the northeast provinces of
Argentina, one of the best rice farming regions in the world due to plentiful
sunlight, abundant availability of water for low cost irrigation and large
potential for expansion.
    
    Our dairy operation is situated in the Argentine humid pampas region,
where cow feed (grains, oilseeds and forage) is efficiently and abundantly
produced at a low cost and climate and sanitary conditions are optimal for cow
comfort, which enhances productivity, cow reproduction rates and milk quality.
    
    We produce sugarcane in the center-south region of Brazil, which has
the lowest production costs in the world, significantly lower than other major
sugar producing regions, including India, China, the United States, the United
Kingdom, France and Germany.
 
    
    Standardized and scalable agribusiness model applying technological innovation.We have
consistently used innovative production techniques to ensure that we are at the forefront
of technological improvements and environmental sustainability standards in our industry.
We are implementing an agribusiness model that consists of specializing our workforce and
defining standard protocols to track crop development and control production variables,
thereby enhancing management decision-making. We further optimize our agribusiness model
through the effective implementation and constant adaptation of a portfolio of advanced
agricultural and information technologies and best practices tailored to each region in
which we operate and commodity we produce, allowing us to improve our crop yields, reduce
operating costs and maximize margins in a sustainable manner.
 
    
    In our farming business, we use no-till technology as the
cornerstone of our crop production and have been able to implement this technique
in areas within our production regions where it had not been used before.
Furthermore, we also utilize crop rotation, second harvests, integrated pest
management, balanced fertilization, water management and mechanization.
Additionally, we use the innovative silo bag storage method, utilizing large
polyethylene bags with a capacity of 180-200 tons which can be left on the field
for 12 months, resulting in low-cost, scalable and flexible storage on the field
during harvest, which we believe allows us to expand our crop storage capacity at
a low cost, generate important logistic and freight savings by moving our
production in the off-season when freight fares are lower, and time the entry of
our production into the market at optimal price points. See Operations and
Principal ActivitiesFarmingStorage and Conditioning.
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
    
    In our dairy business, we believe that we were the first company in
South America to implement the free-stall infrastructure in dairy operations,
resulting in more efficient conversion of feed to raw milk and higher production
rates per cow compared to our peers in the region.
    
    In our sugar, ethanol and energy business, our Angélica mill (i) has
a highly mechanized planting and harvesting operation, which has increased our
sugarcane production, reduced our operating costs and contributed to environmental
sustainability by eliminating the need to burn the sugarcane before harvest; (ii)
has the capacity to use all the bagasse (a by-product of the sugar and ethanol
production process) that is produced, with no incremental cost, to cogenerate 96
MW of clean and renewable electricity; (iii) is what we believe to be one of the
largest continuously operating sugar plants in Brazil designed for enhanced
efficiency and non-stop processing, producing 1,800 tons of sugar per day; and
(iv) has the ability to recycle by-products such as filter cake and vinasse by
using them as fertilizers in our sugarcane fields, as well as recycling water and
other effluents, generating important savings in input costs and protecting the
environment.
 
    
    Unique diversification model to mitigate cash flow volatility.We pursue a unique
multi-tier diversification strategy to reduce our exposure to production and market
fluctuations that may impact our cash flow and operating results. We seek geographic
diversification by spreading our portfolio of farmland and agro-industrial assets across
different regions of Argentina, Brazil and Uruguay, thereby lowering our risk exposure to
weather-related losses and contributing to stable cash flows. Additionally, we produce a
variety of products, including cotton, coffee, soybeans, corn, wheat, sunflower, rice,
barley, sorghum, safflower, rapeseed, raw milk, sugar, ethanol and energy, which lowers
our risk exposure to potentially depressed market conditions of any specific product.
Moreover, through vertical integration in the rice, dairy, sugar, ethanol and energy
businesses, and to a lesser extent in our coffee business, we process and transform a
portion of our agricultural commodities into branded retail products, reducing our
commodity price risk and our reliance on the standard market distribution channels for
unprocessed products. Finally, our commercial committee defines our commercial policies
based on market fundamentals and the consideration of logistical and production data to
develop a customized sale/hedge risk management strategy for each product.
    
    Expertise in acquiring farmland with transformation and appreciation potential.During
the last eight fiscal years, we have executed transactions for the purchase and
disposition of land for over $460 million and sold 27,169 hectares of developed land,
generating capital gains of approximately $95 million. We believe we have a superior track
record and have positioned ourselves as a key player in the land business in South
America. Our business development team has gained extensive expertise in evaluating and
acquiring farmland throughout South America and has a solid understanding of the
productivity potential of each region and of the potential for land transformation and
appreciation. To date, we have analyzed over 8.9 million hectares of farmland spread
throughout the regions in which we operate and other productive regions in the world. We
have developed a methodology to assess farmland and to appraise its potential value with a
high degree of accuracy and efficiency by using information generated through
sophisticated technology, including satellite images, rain and temperature records, soil
analyses, and topography and drainage maps. Our management team has gained extensive
experience in transforming and maximizing the appreciation potential of our land portfolio
through the implementation of our agribusiness techniques described above. We also have an
extensive track record rotating our asset portfolio to generate capital gains and monetize
the transformation and appreciation generated through our operations.
    
    Experienced management team, knowledgeable employees.Our people are our most important
asset. We have an experienced senior management team with an average of more than 20 years
of experience working in our sector and a solid track record of implementing and executing
large scale growth projects such as land transformations, greenfield developments of
industrial plants, and integrating acquisitions within our organization. Recruiting technically qualified
employees at each of our farms and operating sites is a main
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focus of our senior management
and a key to our success.
 Our Business Strategy
  
    
    Expand our farming business through organic growth, leasing and strategic acquisitions.
We will continue to seek opportunities for organic growth, target attractive acquisition
and leasing opportunities and strive to maximize operating synergies and achieve economies
of scale in each of our four main farming business areas (coffee, rice, crops and dairy).
We plan to continue expanding and consolidating our crop production throughout South
America. We also intend to continue expanding our rice segment in terms of production and
processing capacity, consolidating our leading position in Argentina and increasing our
presence throughout Brazil, Uruguay and other regions, to become a leading regional
player. We plan to expand our current dairy production capacity using the free-stall
model. We believe that the know-how and skills gained from the construction of our first
free-stall module can be easily replicated, allowing us to scale-up our production
efficiently and at a fast rate.
    
    Consolidate our sugar and ethanol cluster in the state of Mato Grosso do Sul, Brazil.
Our main strategy for our sugar and ethanol business is to build our cluster in Mato
Grosso do Sul, Brazil, through the construction of the Ivinhema mill, our second
greenfield project, which we expect to reach a full crushing capacity of 6.3 million tons
per year by 2017. See Sugar, Ethanol and EnergyOur Mills. Completion of the Ivinhema
mill will allow us to complete our advanced cluster with a planned total crushing capacity
of 10.3 million tons per year. The consolidation of the cluster will generate important
synergies, operating efficiencies and economies of scale such as (i) one centralized
management team, reducing total administration cost per ton of sugarcane milled; (ii) a
large sugarcane plantation supplying two mills, allowing for non-stop harvesting; and
(iii) a reduction in the average distance from the sugarcane fields to the mills,
generating important savings in sugarcane transportation expenses. We believe that the
Ivinhema mill will allow us to become one of the most efficient and low cost producers of
sugar, ethanol and energy in Brazil. Additionally, we plan to continue to monitor closely
the Brazilian sugar and ethanol industries and may pursue selective acquisitions that
provide opportunities to increase our economies of scale, operating synergies and
profitability.
    
    Further increase our operating efficiencies while maintaining a diversified portfolio.
We intend to continue to focus on improving the efficiency of our operations and
maintaining a low-cost structure to increase our profitability and protect our cash flows
from commodity price cycle risk. We seek to maintain our low-cost platform by (i) making
additional investments in advanced technologies, including those related to agricultural,
industrial and logistical processes and information technology, (ii) improving our
economies of scale through organic growth, strategic acquisitions, and more efficient
production methods, and (iii) fully utilizing our resources to increase our production
margins. In addition, we intend to mitigate commodity price cycle risk and minimize our
exposure to weather related losses by (i) maintaining a diversified product mix and
vertically integrating production of certain commodities and (ii) geographically
diversifying the locations of our farms.
    
    Continue to implement our land transformation strategy.We plan to continue to enhance
the value of our owned farmland and future land acquisitions by making them suitable for
more profitable agricultural activities, thereby seeking to maximize the return on our
invested capital in our land assets. In addition, we expect to continue rotating our land
portfolio through strategic dispositions of certain properties in order to realize and
monetize the transformation and appreciation value created by our land transformation activities. We also plan to leverage our knowledge and
experience in land asset- management to identify superior buying and selling opportunities.
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Operations and Principal Activities
 Farming
  Harvest Year2010/2011
    
    
    2009/2010
    
    
    2008/2009
    
    
    2007/2008Crops (thousands of tons)(1)
    
    
    91,910
    
    
    
    524,890
    
    
    
    317,582
    
    
    
    351,787Rice(2) (thousands of tons)
    
    NA
    
    
    
    91,723
    
    
    
    94,968
    
    
    
    98,577Coffee (thousands of tons)
    
    NA
    
    
    
    2,220
    
    
    
    2,412
    
    
    
    3,028
 Year Ended December 31,2010
    
    
    2009
    
    
    2008Dairy(3) (thousands of liters)
    
    
    41,597
    
    
    
    47,479
    
    
    
    43,110Cattle (thousands of tons)(4)(5)
    
    
    359
    
    
    
    4,149
    
    
    
    7,229
 
 (1)
    
    Crop production volume for the 2010/2011 harvest year includes only our wheat and barley
harvest, as the remaining crops were not yet harvested as of December 31, 2010.(2)
    
    Expressed in tons of rough rice produced in farms we own or lease.(3)
    
    Raw milk produced.(4)
    
    Measured in tons of live weight. Production is the sum of the net increases (or decreases)
during a given period in live weight of each head of beef cattle we own.(5)
    
    In December 2009, we sold 55,543 head of cattle to a third party. The third party currently
leases most of our grazing land to raise and fatten the cattle. Lease prices under the lease
agreements are tied to the market price of cattle. See Cattle Business Crops Business (Grains, Oilseeds and Cotton)
   Harvest Year2010/2011
    
    
    2009/2010
    
    
    2008/2009
    
    
    2007/2008Product Area
    
    (In hectares)Soybeans(l)
    
    
    90,167
    
    
    
    87,522
    
    
    
    63,973
    
    
    
    47,409Corn(l)
    
    
    30,505
    
    
    
    27,720
    
    
    
    20,200
    
    
    
    24,189Wheat
    
    
    25,656
    
    
    
    21,728
    
    
    
    18,917
    
    
    
    15,792Sunflower
    
    
    9,943
    
    
    
    14,784
    
    
    
    16,539
    
    
    
    7,775
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Harvest Year2010/2011
    
    
    2009/2010
    
    
    2008/2009
    
    
    2007/2008Product Area
    
    (In hectares)Cotton
    
    
    3,242
    
    
    
    425
    
    
    
    3,159
    
    
    
    3,478Other crops
    
    
    3,815
    
    
    
    11,501
    
    
    
    11,348
    
    
    
    3,930Forage
    
    
    3,653
    
    
    
    4,561
    
    
    
    5,382
    
    
    
    4,454Total(2)
    
    
    166,981
    
    
    
    168,241
    
    
    
    139,518
    
    
    
    107,027
 
 (1)
    
    Includes hectares planted in second harvests.(2)
    
    Includes 3,653 hectares, 4,561 hectares, 5382 hectares and 4,454 hectares used for the
production of forage during the 2010/2011, 2009/2010, 2008/2009 and 2007/2008 harvest years,
respectively.  Harvest Year2010/2011(1)
    
    
    2009/2010
    
    
    2008/2009
    
    
    2007/2008Crop Production
    
    (In thousands of tons)Soybeans
    
    
    N/A
    
    
    
    241,848
    
    
    
    96,982
    
    
    
    90,724Corn
    
    
    N/A
    
    
    
    180,613
    
    
    
    115,900
    
    
    
    153,751Wheat
    
    
    N/A
    
    
    
    49,592
    
    
    
    41,556
    
    
    
    61,951Sunflower
    
    
    N/A
    
    
    
    17,193
    
    
    
    22,128
    
    
    
    15,841Cotton
    
    
    N/A
    
    
    
    1,068
    
    
    
    9,218
    
    
    
    15,748Other crops
    
    
    N/A
    
    
    
    34,576
    
    
    
    31,799
    
    
    
    13,772Total
    
    
    N/A
    
    
    
    524,890
    
    
    
    317,582
    
    
    
    351,787
 
 (1)
    
    As of the date of this annual report, the 2010/2011 harvest was not fully completed.
2010/2011 harvesting operations began in October 2010 with the harvest of winter crops, and will
finish in August 2011, with the harvest of coffee.  Year Ended December 31,2010
    
    
    2009
    
    
    2008
    
    
    2007Sales
    
    (In thousands of $)Soybeans(l)
    
    
    64,890
    
    
    
    44,116
    
    
    
    39,025
    
    
    
    26,829Corn
    
    
    23,968
    
    
    
    14,654
    
    
    
    22,547
    
    
    
    11,186Wheat
    
    
    7,939
    
    
    
    10,218
    
    
    
    15,407
    
    
    
    8,310Sunflower
    
    
    4,880
    
    
    
    5,517
    
    
    
    5,615
    
    
    
    1,096Cotton
    
    
    2,395
    
    
    
    11,905
    
    
    
    5,813
    
    
    
    6,941Other crops(2)
    
    
    4,090
    
    
    
    5,619
    
    
    
    7,580
    
    
    
    4,931Total
    
    
    108,162
    
    
    
    92,029
    
    
    
    95,987
    
    
    
    59,293
 
 (1)
    
    Includes sales of soybean oil and soybean meal accounting for $8,420 thousand and $1,692
thousand for the years ended December 31, 2009 and 2008, respectively.(2)
    
    Includes other crops and farming services. Soybeans
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Corn
    Wheat
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Sunflower
   Cotton
    Other Crops
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Forages
  Crop Production Process
   Rice Business
  e.g. Ministerio de Agua Servicios Publicos y Media Ambiente Instituto
Correntino del Agua
  Harvest YearRice Product Area & Production
    
    2010/2011
    
    
    2009/2010
    
    
    2008/2009
    
    
    2007/2008Owned planted area (hectares)
    
    
    22,973
    
    
    
    10,831
    
    
    
    13,417
    
    
    
    11,981Leased planted area (hectares)
    
    
    4,568
    
    
    
    7,311
    
    
    
    3,840
    
    
    
    2,839Total rice planted (hectares)
    
    
    27,542
    
    
    
    18,142
    
    
    
    17,258
    
    
    
    14,820Rough rice production (thousands of tons)
    
    N/A
    
    
    
    91.723
    
    
    
    94.968
    
    
    
    98.577
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Production Process
     Year Ended December 31,2010
    
    
    2009
    
    
    2008
    
    
    2007Processed Rice Production
    
    
    
    
    
    (In thousands of tons)Rough rice processed  own
    
    
    75,752
    
    
    
    94,968
    
    
    
    98,577
    
    
    
    98,980Rough rice processed  third party
    
    
    52,957
    
    
    
    62,083
    
    
    
    20,587
    
    
    
    27,732Total rough rice processed
    
    
    128,709
    
    
    
    157,051
    
    
    
    119,164
    
    
    
    126,712White rice
    
    
    66,035
    
    
    
    77,440
    
    
    
    66,841
    
    
    
    70,300Brown rice
    
    
    6,699
    
    
    
    11,559
    
    
    
    2,557
    
    
    
    4,940Broken rice
    
    
    14,792
    
    
    
    19,859
    
    
    
    12,407
    
    
    
    11,739Total processed rice
    
    
    87,526
    
    
    
    108,858
    
    
    
    81,804
    
    
    
    86,980
 Year Ended December 31,2010
    
    
    2009
    
    
    2008
    
    
    2007Processed Rice Sales
    
    
    
    
    
    (In thousand of $)Total Sales
    
    
    61,585
    
    
    
    69,350
    
    
    
    56,925
    
    
    
    26,422
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Rice Seed Production
 Institute Nacional de Tecnología Agropecuaria Fondo Latinoamericano para Arroz de Riego Empresa de pesquisa Agropecuária e Extensão Rural de Santa Catarina Badische Anilin- und Soda-Fabrik
 Coffee Business
     Harvest YearCoffee Production & Sales
    
    2010/2011
    
    
    2009/2010
    
    
    2008/2009
    
    
    2007/2008Coffee plantation (hectares)
    
    
    1,632
    
    
    
    1,632
    
    
    
    1,632
    
    
    
    1,632Coffee pruning area (hectares)
    
    
    227
    
    
    
    406
    
    
    
    241
    
    
    
    Coffee production (thousands of tons)
    
    NA
    
    
    2,220
    
    
    
    2,412
    
    
    
    3,028
 Year Ended December 31,2010
    
    
    2009
    
    
    2008
    
    
    2007(In thousands of $)Coffee sales
    
    
    7,572
    
    
    
    14,265
    
    
    
    15,948
    
    
    
    7,267
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Coffee Production Process
    Dairy Business
   Year Ended December 31,Dairy Herd & Production
    
    2010
    
    
    2009
    
    
    2008
    
    
    2007Total dairy herd (head)
    
    
    9,178
    
    
    
    9,743
    
    
    
    9,587
    
    
    
    8,838Average milking cows
    
    
    4,225
    
    
    
    4,594
    
    
    
    4,377
    
    
    
    3,837Average daily production (liters per cow)
    
    
    27.0
    
    
    
    28.3
    
    
    
    26.9
    
    
    
    24.7Total production (thousands of liters)
    
    
    41,597
    
    
    
    47,479
    
    
    
    43,110
    
    
    
    34,592
 Year Ended December 31,2010
    
    2009
    
    2008
    
    2007(In thousands of $)Sales (thousands of $)
    
    
    14,297
    
    
    
    11,894
    
    
    
    14,821
    
    
    
    17,841
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Production Process
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La Lácteo Joint Venture
   Cattle Business
 Comision
Nacional de Defensa de de la Competencia
  55




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Year Ended December 31,2010
    
    
    2009
    
    
    2008
    
    
    2007(Head of cattle)Breeding(l)
    
    
    
    
    
    
    79,784
    
    
    
    91,263
    
    
    
    Fattening
    
    
    1,254
    
    
    
    2,804
    
    
    
    15,881
    
    
    
    13,278Total
    
    
    1,254
    
    
    
    2,804
    
    
    
    95,665
    
    
    
    104,541
 
 (1)
    
    For classification purposes, upon birth, all calves are considered to be in the breeding
process.  Storage and Conditioning
    Storage Capacity
    
    NominalCrops (tons)
    
    
    28,800Rice (tons)
    
    
    135,919
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Drying Capacity
    
    NominalCrops (tons/day)
    
    
    2,400Rice (tons/day)
    
    
    6,600
    Marketing, Sales and Distribution
 Crops
 Bolsa de Cereales de Buenos Aires Bolsa de Cereales de Rosario Bolsa de Mercadorias e Futuros Mercado a Término de Buenos Aires
 Soybeans:
 Corn:
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Wheat:
 Sunflower:
 Cotton:
 Rice:
  Coffee
 Dairy
  58




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Sugar, Ethanol and Energy
 Sugarcane
  
    
    Renewable: Sugarcane ethanol, unlike coal or oil, which can be
depleted, is produced from sugarcane plants that grow back year after year, provided
that they are replanted every six to eight years.
    
    Sustainable: Sugarcane only needs to be replanted every five to
seven years, as a semi-perennial crop. It can be harvested without uprooting the
plant, and therefore its cultivation has less of an impact on the soil and the
surrounding environment. The mechanization of the harvesting and planting process
further improves sustainable agricultural management.
    
    Energy Efficient: Sugarcane is highly efficient in converting
sunlight, water and carbon dioxide into stored energy. The energy output of sugarcane
is equal to nine times the energy input used in the production process, whereas the
energy output of corn ethanol is only about 1.9 to 2.3 times the energy input used in
its production process. Sugarcane produces seven times more energy compared to corn in
ethanol production.
    
    Low Carbon Emissions: Compared to gasoline, sugarcane ethanol
reduces greenhouse gases by more than 61%, which is the greatest reduction of any
other liquid biofuel produced today in large quantities. Ethanol made from sugarcane
is deemed an advanced biofuel by the United States EPA.
    
    Synergies: The main raw material used in the production of
electricity in sugar mills is bagasse, which is a by-product of the sugarcane milling
process, allowing for a renewable source of co- generated electricity.
  Conselho dos Produtores de Cana-de-Açúcar, Açúcar e
Álcool do Estado de Sao Paulo
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##### Table of Contents



Year Ended December 31,2010
    
    
    2009
    
    
    2008
    
    
    2007Grown on our
owned and
leased land
(tons)
    
    
    3,869,283
    
    
    
    2,075,531
    
    
    
    1,376,763
    
    
    
    889,355Purchased from
third parties
(tons)
    
    
    196,833
    
    
    
    139,498
    
    
    
    29,695
    
    
    
    1,792Total (tons)
    
    
    4,066,115
    
    
    
    2,215,029
    
    
    
    1,406,458
    
    
    
    891,147
 Sugarcane Harvesting Cycle
     Our Mills
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Açúcar Monte Alegre
   Capital Expenditures
    
    R$ millions
    
    
    US$ per ton(l)Industrial equipment
    
    
    531.1
    
    
    
    71.7Agricultural equipment
    
    
    134.0
    
    
    
    18.1Sugarcane planting cost
    
    
    257.3
    
    
    
    34.8Total
    
    
    922.5
    
    
    
    124.6
 
 (1)
    
    Considers a weighted average R$/US$ exchange rate of 1.851.   61




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licença de instalaçâo)
  Our Main Products
  Year Ended December 31,2010
    
    
    2009
    
    
    2008
    
    
    2007Sugar
    
    
    235,690
    
    
    
    52,968
    
    
    
    67,772
    
    
    
    72,372Ethanol
    
    
    174,303
    
    
    
    132,492
    
    
    
    70,067
    
    
    
    29,375Energy
    
    
    168,644
    
    
    
    128,291
    
    
    
    
    
    
    
    
 
   Year Ended December 31,2010
    
    
    2009
    
    
    2008
    
    
    2007(In thousands of $)Sugar
    
    
    98,385
    
    
    
    26,143
    
    
    
    20,495
    
    
    
    17,133Ethanol
    
    
    114,793
    
    
    
    62,811
    
    
    
    29,385
    
    
    
    7,289Energy
    
    
    15,040
    
    
    
    8,216
    
    
    
    
    
    
    
    Other(1)
    
    
    308
    
    
    
    417
    
    
    
    1,291
    
    
    
    Total
    
    
    228,526
    
    
    
    97,587
    
    
    
    51,171
    
    
    
    24,422
 
 (1)
    
    Includes sales of sugarcane and other miscellaneous items to third parties. Sugar
  62




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Ethanol
   Cogeneration
  Production Process
 Sugar.
 Ethanol.
 Cogeneration.
 63




---



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64




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##### Table of Contents




    
    It is a clean and renewable energy;
    
    It complements hydropower, the main source of Brazilian energy, as it is
generated during the sugarcane harvest period (April to December) when water
reservoirs are at their lowest level;
    
    It requires a short period of time to start operations; and
    
    It requires only a small investment in transmission lines when plants are
located close to consumer centers.
   Storage and Conditioning
  Nominal Storage Capacity
    
    Angélica
    
    
    UMA
    
    
    TotalEthanol (cubic meters)
    
    
    120,800
    
    
    
    27,000
    
    
    
    147,800Sugar (tons)
    
    
    90,000
    
    
    
    36,400
    
    
    
    126,400
 Marketing, Sales and Distribution
 Sugar: Escola Superior de Agricultura Luiz de Queiroz
 Ethanol:
 65




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Cogeneration:
  Camara de Comercialização de Energia Elétrica
 Land Transformation
       66




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67




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##### Table of Contents



Margenes Agropecuarios
     Acquisition
    
    
    Divestitures
    
    
    Total Land HoldingsYear Ended December 31,
    
    
    
    
    
    (In hectares)2002
    
    
    74,924
    
    
    
    
    
    
    
    74,9242003
    
    
    
    
    
    
    
    
    
    
    74,9242004
    
    
    34,659
    
    
    
    
    
    
    
    109,5832005
    
    
    22,103
    
    
    
    
    
    
    
    131,6862006
    
    
    5,759
    
    
    
    3,507
    
    
    
    133,9382007
    
    
    113,833
    
    
    
    8,714
    
    
    
    239,0572008
    
    
    43,940
    
    
    
    4,857
    
    
    
    278,1402009
    
    
    
    
    
    
    5,005
    
    
    
    273,1352010
    
    
    14,749
    
    
    
    5,086
    
    
    
    282,798
 Our Farms
 Appraisal of Farms.
 68




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##### Table of Contents



Book Value
    
    Cushman ValuationGross Size
    
    (In thousands of
    
    (In thousands ofFarm
    
    State, Country
    
    (Hectares)(1)
    
    $)(1)
    
    $)(1)
    
    Current UseEl Meridiano
    
    Buenos Aires, Argentina
    
    
    6,302
    
    
    
    15,773
    
    
    
    40,729
    
    
    GrainsLa Alegría
    
    Buenos Aires, Argentina
    
    
    2,439
    
    
    
    4,752
    
    
    
    9,930
    
    
    GrainsLas Horquetas
    
    Buenos Aires, Argentina
    
    
    2,089
    
    
    
    2,223
    
    
    
    8,761
    
    
    Grains & CattleSan Carlos
    
    Buenos Aires, Argentina
    
    
    4,239
    
    
    
    3,983
    
    
    
    26,701
    
    
    GrainsSanta Regina
    
    Buenos Aires, Argentina
    
    
    3,618
    
    
    
    3,710
    
    
    
    19,761
    
    
    GrainsEl Orden
    
    Santa Fe, Argentina
    
    
    6,860
    
    
    
    5,052
    
    
    
    9,321
    
    
    Grains & CattleLa Carolina
    
    Santa Fe, Argentina
    
    
    8,297
    
    
    
    6,111
    
    
    
    12,185
    
    
    Grains & CattleLa Rosa
    
    Santa Fe, Argentina
    
    
    4,087
    
    
    
    5,124
    
    
    
    16,383
    
    
    Grains & CattleSan Jose
    
    Santa Fe, Argentina
    
    
    7,630
    
    
    
    1,273
    
    
    
    5,361
    
    
    GrainsSan Joaquín
    
    Santa Fe, Argentina
    
    
    37,082
    
    
    
    11,070
    
    
    
    38,235
    
    
    Rice, Grains & CattleCarmen
    
    Santa Fe, Argentina
    
    
    10,020
    
    
    
    19,628
    
    
    
    85,382
    
    
    GrainsAbolengo
    
    Santa Fe, Argentina
    
    
    7,476
    
    
    
    19,058
    
    
    
    86,041
    
    
    GrainsLa Guarida
    
    Santiago del Estero, Argentina
    
    
    15,451
    
    
    
    11,354
    
    
    
    20,326
    
    
    Grains & CattleSanta Lucia
    
    Santiago del Estero, Argentina
    
    
    17,495
    
    
    
    27,474
    
    
    
    39,765
    
    
    Grains & CattleLos Guayacanes
    
    Salta, Argentina
    
    
    7,241
    
    
    
    17,688
    
    
    
    31,548
    
    
    GrainsLa Garrucha
    
    Salta, Argentina
    
    
    3,607
    
    
    
    8,811
    
    
    
    15,510
    
    
    GrainsOmbú
    
    Formosa, Argentina
    
    
    18,320
    
    
    
    8,165
    
    
    
    18,752
    
    
    Grains & CattleOscuro
    
    Corrientes, Argentina
    
    
    33,429
    
    
    
    7,687
    
    
    
    43,937
    
    
    Rice, Grains & CattleItá Caabó
    
    Corrientes, Argentina
    
    
    26,650
    
    
    
    19,837
    
    
    
    52,878
    
    
    Rice, Grains & CattleSan Agustín
    
    Corrientes, Argentina
    
    
    5,067
    
    
    
    2,153
    
    
    
    12,896
    
    
    Rice, Grains & CattleAlto Alegre
    
    Tocantins, Brazil
    
    
    6,082
    
    
    
    5,217
    
    
    
    11,152
    
    
    Grains & CottonConquista
    
    Tocantins, Brazil
    
    
    4,325
    
    
    
    5,217
    
    
    
    10,165
    
    
    Grains & CottonLagoa de Oeste
    
    Bahia, Brazil
    
    
    1,132
    
    
    
    2,312
    
    
    
    4,249
    
    
    CoffeePalmeira
    
    Bahia, Brazil
    
    
    1,000
    
    
    
    2,723
    
    
    
    2,717
    
    
    CoffeeHeloisa
    
    Bahia, Brazil
    
    
    800
    
    
    
    2,164
    
    
    
    2,702
    
    
    CoffeeMimoso
    
    Bahia, Brazil
    
    
    902
    
    
    
    2,701
    
    
    
    3,021
    
    
    CoffeeRio de Janeiro
    
    Bahia, Brazil
    
    
    10,012
    
    
    
    20,828
    
    
    
    32,438
    
    
    Grains & CoffeeBela Manhã
    
    Mato Grosso do Sul, Brazil
    
    
    381
    
    
    
    1,484
    
    
    
    1,750
    
    
    SugarcaneOuro Verde
    
    Mato Grosso do Sul, Brazil
    
    
    683
    
    
    
    2,406
    
    
    
    2,912
    
    
    SugarcaneDon Fabrício
    
    Mato Grosso do Sul, Brazil
    
    
    3,304
    
    
    
    11,746
    
    
    
    14,248
    
    
    Sugarcane
 69




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Book Value
    
    Cushman ValuationGross Size
    
    (In thousands of
    
    (In thousands ofFarm
    
    State, Country
    
    (Hectares)(1)
    
    $)(1)
    
    $)(1)
    
    Current UseTakuarê
    
    Mato Grosso do Sul, Brazil
    
    
    490
    
    
    
    2,109
    
    
    
    2,015
    
    
    SugarcaneAgua Branca
    
    Mato Grosso do Sul, Brazil
    
    
    1,614
    
    
    
    6,537
    
    
    
    6,371
    
    
    SugarcaneNossa Senhora Aparecida
    
    Mato Grosso do Sul, Brazil
    
    
    540
    
    
    
    1,958
    
    
    
    1,807
    
    
    SugarcaneSapálio
    
    Mato Grosso do Sul, Brazil
    
    
    6,062
    
    
    
    23,006
    
    
    
    25,085
    
    
    SugarcaneCarmen (Agua Santa)
    
    Mato Grosso do Sul, Brazil
    
    
    146
    
    
    
    833
    
    
    
    739
    
    
    SugarcaneLa Pecuaria
    
    Duranzo, Uruguay
    
    
    3,177
    
    
    
    10,225
    
    
    
    13,761
    
    
    GrainsDinaluca
    
    Corrientes, Argentina
    
    
    14,749
    
    
    
    21,450
    
    
    
    23,500
    
    
    RiceTotal
    
    
    
    
    282,798
    
    
    
    323,842
    
    
    
    753,032
 
 (1)
    
    Gross size, book value and valuation figures have been updated to reflect (i) foreign exchange rate on December 31, 2010, and (ii) the
disposition of the La Macarena farm on December 21, 2010.  Land Leasing and Agriculture Partnerships.
   Land Management.
  70




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Property, Plant and Equipment
  Facility
    
    Province, Country
    
    Relevant Operational Data
    
    Current UseChristophersen
    
    Santa Fe, Argentina
    
    18,700 tons of storage
capacity. 2,400 tons per day of
drying capacity
    
    Seedbed and stockpiling
plant (1)La Lácteo(2)
    
    Cordoba, Argentina
    
    250,000 liters per day processed
    
    Dairy processing facilitiesSemillero Itá
Caabó
    
    Corrientes, Argentina
    
    
    
    Rice genetic improvement
programMolino San Agustín
    
    Corrientes, Argentina
    
    Processing capacity of 3,500
tons of brown rice monthly, and
husk rice drying capacity of
450 tons per day
    
    Brown rice processing and
drying plantMolino Ala 
Mercedes
    
    Corrientes, Argentina
    
    Installed capacity of 5,000
tons of white rice monthly, and
husk rice drying capacity of
2,400 tons per day
    
    Rice processing and drying
plantMolino Ala  San
Salvador
    
    Entre Ríos, Argentina
    
    Installed capacity of 5,000
tons of white rice monthly, and
husk rice drying capacity of
1,100 tons per day
    
    Rice processing and drying
plantMolino Franck
    
    Santa Fe, Argentina
    
    Processing capacity of 5,300
tons of brown rice monthly, and
husk rice drying capacity if
1,700 tons per day
    
    Rice processing and drying
plantAngélica
Agroenergía
    
    Mato Grosso do Sul,
Brazil
    
    Installed milling capacity of
4.0 million tons of sugarcane
annually, 330,000 tons of VHP
sugar and over 220,000 cubic
meters of ethanol, and over
250,000 MWh
    
    Sugar and ethanol mill
producing hydrated
ethanol, anhydrous ethanol
and VHP sugar. Sells
energy to local networkUsina Monte Alegre
    
    Monte Belo, Brazil
    
    Present milling capacity of 1.2
million tons of sugarcane
annually, 120,000 tons of VHP
and white sugar and over 40,000
cubic meters of ethanol and
50,000 MWh
    
    Sugar mill producing VHP
and white sugar and
hydrated ethanol. Sells
energy to local network
 
 (1)
    
    Classification of wheat and soybean seeds.(2)
    
    Joint venture of which we own 50%.  Customers
   71




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Competition
    2009/2010 Harvest Year
    
    BrazilNumber of Mills(l)
    
    436Sugarcane crushed
    
    615.4 million tonsEthanol Production
    
    27.4 billion litersSugar Production
    
    37.7 million tons
 
 Source: Ministerio da Agricultura, Pecuaria e Abastacimento.(1)
    
    Based on Center-South region only.  72




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Supplies and Suppliers
    Seasonality
 i.e.
 Sustainability
  73




---



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Standardized and Scalable Agribusiness Model
     Contractors
    74




---



##### Table of Contents



Technical Adecoagro Group (TAG)
     Agricultura Certificada: la evolution
de la Siembra Directa
 Technology and Best Practices
  75




---



##### Table of Contents



No-Till
     Crop Rotation
  76




---



##### Table of Contents



Second Harvest  Double Cropping
  Integrated Pest Management (IPM)
  Balanced Fertilization
  Water management
  77




---



##### Table of Contents



Mechanization
  Synergies
  Information Technology
  Environmental Responsibility
  78




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##### Table of Contents



.
 Facultad de Ciencias Exactas y
Naturales de la Universidad de Buenos Aires Argentina . Fundación Habitat y Desarrollo.
 Código Florestal . Áreas de Preservación Permanente Áreas de
Reserva Legal
  79




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Social Programs
  Education
  Nutrition
   Internship Program
  80




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##### Table of Contents



Material Agreements
  Argentina
 Agreement with Quickfood S.A.
 Fideicomiso Financiero Ganadero
Cría I
 Joint-Venture with COPRA S.A.
 union
transitoria de empresas
 Milk Supply Agreement
  81




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Consignment Contract with Establecimiento Las Marías
  Acquisition of Assets from Galicia Warrants S.A.
  Brazil
 Sugar Sale Agreement
  Electric Energy Agreements
 .
  82




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Intellectual Property
     Insurance
  83




---



##### Table of Contents



Legal and Administrative Proceedings
  Environmental Regulations and Compliance
 e.g.
 licença prévia licença de
instalação
  84




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C. ORGANIZATIONAL STRUCTURE
 Corporate Structure
 société anonyme
   
 
 *
    
    Existing Shareholders refer to shareholders of record prior to our IPO.**
    
    Does not account for an immaterial amount of shares required to be owned by other persons
pursuant to Maltese law.***
    
    2% was owned pro rata among Existing Shareholders in
amounts corresponding to their ownership of the Company prior to our IPO. The 2% ownership held by
current members of IFH does not carry any preferential treatment. 
 D. PROPERTY, PLANTS AND EQUIPMENT
  85




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Item 4A. Unresolved Staff Comments
  
 Item 5. Operating and Financial Review and Prospects
 Overview
    Segment
    
    Agricultural Product
    
    Manufactured Product & Services RenderedCrops
    
    Soybean Corn Wheat Sunflower Cotton
    
    Soybean oil & soybean mealGrain drying & conditioningRice
    
    Rough rice
    
    White rice & brown riceDairy
    
    Raw milk
    
    Whole milk powderCoffee
    
    Coffee
    
    TradingCattle
    
    Head or kilograms of cattle
    
    Land leasingSugar,
    
    Sugarcane
    
    SugarEthanol and
    
    
    
    EthanolEnergy
    
    
    
    Energy
  86




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Manufacturing Activities
  Agricultural Activities
       87




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Land Transformation
     
 A. OPERATING RESULTS
 Trends and Factors Affecting Our Results of Operations
    88




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Year endedDecember 31,
    
    
    % Change2010
    
    
    2009
    
    
    2008
    
    
    2009-2010
    
    
    2008-2009Corn
    
    
    5.9
    
    
    
    5.5
    
    
    
    6.8
    
    
    
    7,2
    %
    
    
    (18.5
    %)Soybean
    
    
    3.1
    
    
    
    1.5
    
    
    
    2.1
    
    
    
    112.5
    %
    
    
    (30.9
    %)Soybean (second harvest)
    
    
    1.9
    
    
    
    1.6
    
    
    
    1.7
    
    
    
    21.3
    %
    
    
    (7.3
    %)Cotton
    
    
    2.5
    
    
    
    2.9
    
    
    
    4.5
    
    
    
    (13.9
    %)
    
    
    (35.6
    %)Wheat
    
    
    3.3
    
    
    
    2.3
    
    
    
    2.4
    
    
    
    41.3
    %
    
    
    (4.4
    %)Rice
    
    
    5.1
    
    
    
    5.5
    
    
    
    6.7
    
    
    
    (8.1
    %)
    
    
    (17.3
    %)Coffee
    
    
    1.4
    
    
    
    1.5
    
    
    
    2.3
    
    
    
    (7.9
    %)
    
    
    (21.7
    )%Sugarcane
    
    
    96.1
    
    
    
    93.4
    
    
    
    89.4
    
    
    
    3.3
    %
    
    
    4.5
    %
      89




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
    
    Initial recognition and changes in the fair value of biological assets and agricultural
produce in respect of unharvested biological assets undergoing biological transformation;
 
    
    Changes in net realizable value of agricultural produce for inventory carried at its
net realizable value; and
 
    
    Sales of manufactured products and sales of agricultural produce and biological assets
sold to third parties.
  Soybean in U.S. cents per bushel (CBOT)
    
    Coffee in U.S. cents per pound (ICE-NY)(GRAPH)
    
    (GRAPH)
 Sugar in U.S. cents per pound (ICE-NY)
    
    Ethanol in Reais per cubic meter (ESALQ)(GRAPH)
    
    (GRAPH)
     90




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Year ended December 31,2010
    
    
    2009
    
    
    2008HectaresCrops
    
    
    136,193
    
    
    
    104,986
    
    
    
    77,221Rice
    
    
    18,142
    
    
    
    17,258
    
    
    
    14,820Coffee
    
    
    1,632
    
    
    
    1,632
    
    
    
    1,632Sugar, Ethanol and Energy
    
    
    53,799
    
    
    
    49,470
    
    
    
    32,616
        91




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92




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Tax Rate (%)Argentina
    
    
    35Brazil(1)
    
    
    34Uruguay
    
    
    25
 
 (1)
    
    Including the Social Contribution on Net Profit (CSLL) Critical Accounting Policies and Estimates
  93




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Biological Assets and Agricultural Produce
    Biological AssetNo significant
    
    Significantbiological growth
    
    biological growth
    
    Agricultural Produce
    
    Manufactured ProductCrops
    
    Crop from planting
through
approximately 60
days
    
    Crop, approximately
60 days after
planting up to the
moment of harvest
(total period of
approximately 3 to
5 months).
    
    Harvested crop
(soybean, corn,
wheat, etc.)
    
    Soybean oil and soybean
mealRice
    
    Rice plant from
planting through
approximately 60
days
    
    Rice plant,
approximately 60
days after planting
up to the moment of
harvest (total
period of
approximately 3 to
4 months).
    
    Harvested rough rice
    
    Processed RiceCoffee
    
    Coffee tree from
planting through
approximately 18
months
    
    Coffee tree,
approximately 18
months after
planting until
exhausted in 15-20
harvests (total
period of
approximately 16
years).
    
    Harvested coffee
    
    CoffeeDairy
    
    Dairy cow is considered a biological asset
from birth/purchase to death or sale.
    
    Raw milk
    
    Processed milk (whole
milk powder) and dairy
productsCattle
    
    Beef cattle are considered a biological asset
from birth/purchase to death or sale.
    
    N/A
    
    N/ASugar, ethanol and
energy
    
    Sugarcane from
planting through
approximately 30
days
    
    Sugarcane,
approximately 30
days after planting
until exhausted in
5-6 harvests (total
period of
approximately 5.5
years).
    
    Sugarcane
    
    Sugar, ethanol and energy
 94




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Biological AssetNo significant
    
    Significantbiological growth
    
    biological growth
    
    Agricultural Produce
    
    Manufactured ProductVALUATION CRITERIA
    
    Cost, which
approximates fair
value less
accumulated
impairment losses,
if any.
For dairy and
cattle, fair value
less estimated cost
to sell.
    
    Fair value (using
discounted cash
flow valuation)
less cost to sell.
    
    Net realizable
value, except for
rough rice and milk
which are valued at
cost.
    
    Cost
     
    
    Production cycles or number of harvests;
    
    Production area in hectares;
    
    Estimated crop and rice yields;
    
    Estimated sucrose content (Total Recoverable Sugar or TRS) for sugarcane;
    
    Estimated costs of harvesting and other costs to be incurred until the crops and
rice reach maturity (mainly costs of pesticides, herbicides and spraying);
    
    Estimated transportation costs;
    
    Market prices; and
    
    Discount rates.
  95




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96




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97




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Business CombinationsPurchase Price Allocation
  Impairment Testing
    Fair Value of Derivatives and Other Financial Instruments
  98




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Income Taxes
 société anonyme
    Allowance for Trade Receivables
  Operating Segments
   99




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
    
    Our Crops segment includes the planting, harvesting and sale to grain traders of
grains, oilseeds and fibers (including wheat, corn, soybeans, cotton and sunflowers,
among others), and to a lesser extent the provision of grain warehousing and
conditioning and handling and drying services to third parties. Production activities
in our Crop segment reflect the most productive use of the land to maximize economic
return and not the performance of any one underlying crop. Accordingly, the relative
mix of underlying crops may change from harvest year to harvest year. A single manager
is responsible for the management of operating activity of all crops rather than a
manager for each individual crop.
    
    Our Rice segment consists of planting, harvesting, processing and marketing of
rice.
    
    Our Dairy segment consists of the production and sale of raw milk, which is
processed into manufactured products and marketed through our joint venture with Grupo
La Lácteo.
    
    Our Coffee segment consists of cultivating coffee and marketing our own and third
party coffee production.
    
    Our Cattle segment consists of purchasing and fattening beef cattle for sale to
meat processors and in local livestock auction markets and leasing land.
    Year Ended December 31,2010
    
    
    2009
    
    
    2008Sales
    
    (In thousands of $)Farming Business
    
    
    197,741
    
    
    
    216,016
    
    
    
    193,038Crops
    
    
    108,162
    
    
    
    92,029
    
    
    
    95,987Soybean(l)
    
    
    64,890
    
    
    
    44,116
    
    
    
    39,025Corn
    
    
    23,968
    
    
    
    14,654
    
    
    
    22,547Wheat
    
    
    7,939
    
    
    
    10,218
    
    
    
    15,407Sunflower
    
    
    4,880
    
    
    
    5,517
    
    
    
    5,615Cotton
    
    
    2,395
    
    
    
    11,905
    
    
    
    5,813Other crops(2)
    
    
    4,090
    
    
    
    5,619
    
    
    
    7,580Rice(3)
    
    
    61,585
    
    
    
    69,350
    
    
    
    56,925Coffee
    
    
    7,572
    
    
    
    14,265
    
    
    
    15,948Dairy
    
    
    14,297
    
    
    
    11,894
    
    
    
    14,821Cattle(4)
    
    
    6,125
    
    
    
    28,478
    
    
    
    9,357Sugar, Ethanol and Energy
Business(5)
    
    
    228,526
    
    
    
    97,587
    
    
    
    51,171
 100




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##### Table of Contents



Year Ended December 31,2010
    
    
    2009
    
    
    2008Sales
    
    (In thousands of $)Sugar
    
    
    98,385
    
    
    
    26,143
    
    
    
    20,495Ethanol
    
    
    114,793
    
    
    
    62,811
    
    
    
    29,385Energy
    
    
    15,040
    
    
    
    8,216
    
    
    
    Other
    
    
    308
    
    
    
    417Total
    
    
    426,267
    
    
    
    313,603
    
    
    
    244,209Land Transformation Business(6)
    
    
    20,837
    
    
    
    18,839
    
    
    
    15,201
 2010/2011
    
    
    2009/2010
    
    
    2008/2009
    
    
    2007/2008
    
    
    2006/2007Harvest
    
    
    Harvest
    
    
    Harvest
    
    
    Harvest
    
    
    HarvestProduction
    
    Year (7)
    
    
    Year
    
    
    Year
    
    
    Year
    
    
    YearFarming BusinessCrops (tons)(8)
    
    
    N/A
    
    
    
    524,890
    
    
    
    317,582
    
    
    
    351,787
    
    
    
    343,799Soybean (tons)
    
    
    N/A
    
    
    
    241,848
    
    
    
    96,982
    
    
    
    90,724
    
    
    
    149,619Corn (tons)
    
    
    N/A
    
    
    
    180,613
    
    
    
    115,900
    
    
    
    153,751
    
    
    
    117,974Wheat (tons)
    
    
    N/A
    
    
    
    49,592
    
    
    
    41,556
    
    
    
    61,951
    
    
    
    55,075Sunflower (tons)
    
    
    N/A
    
    
    
    17,193
    
    
    
    22,128
    
    
    
    15,841
    
    
    
    4,435Cotton (tons)
    
    
    N/A
    
    
    
    1,068
    
    
    
    9,218
    
    
    
    15,748
    
    
    
    9,236Other crops (tons)(2)
    
    
    N/A
    
    
    
    34,576
    
    
    
    31,799
    
    
    
    13,772
    
    
    
    7,461Rice(9) (tons)
    
    
    N/A
    
    
    
    91,723
    
    
    
    94,968
    
    
    
    98,577
    
    
    
    98,980Coffee (tons)(10)
    
    
    N/A
    
    
    
    2,110
    
    
    
    2,412
    
    
    
    3,028
    
    
    
    1,236
 Year Ended December 31,2010
    
    
    2009
    
    
    2008Processed rice(l1) (tons)
    
    
    87,526
    
    
    
    108,858
    
    
    
    81,804Dairy(11) (liters)
    
    
    41,597
    
    
    
    47,479
    
    
    
    43,110Cattle (tons)(4)(12)
    
    
    359
    
    
    
    4,149
    
    
    
    7,229Sugar, Ethanol and Energy BusinessSugar (tons)
    
    
    235,690
    
    
    
    52,968
    (12)
    
    
    67,772Ethanol (cubic meters)
    
    
    174,303
    
    
    
    132,492
    (12)
    
    
    70,067Energy (MWh exported)
    
    
    168,644
    
    
    
    128,291
    (12)
    
    
    Land Transformation Business (hectares traded)
    
    
    5,086
    
    
    
    5,005
    
    
    
    4,857
 2010/2011
    
    
    2009/2010
    
    
    2008/2009
    
    
    2007/2008Harvest
    
    
    Harvest
    
    
    Harvest
    
    
    HarvestPlanted Area
    
    Year
    
    
    Year
    
    
    Year
    
    
    YearFarming Business(13)
    
    
    (Hectares)Crops(14)
    
    
    163,070
    
    
    
    168,241
    
    
    
    139,518
    
    
    
    107,027Soybean
    
    
    90,167
    
    
    
    87,522
    
    
    
    63,973
    
    
    
    47,409Corn
    
    
    30,505
    
    
    
    27,720
    
    
    
    20,200
    
    
    
    24,189Wheat
    
    
    25,656
    
    
    
    21,728
    
    
    
    18,917
    
    
    
    15,792Sunflower
    
    
    9,943
    
    
    
    14,784
    
    
    
    16,539
    
    
    
    7,775Cotton
    
    
    3,242
    
    
    
    425
    
    
    
    3,159
    
    
    
    3,478Other crops(2)
    
    
    3,815
    
    
    
    11,501
    
    
    
    11,348
    
    
    
    3,930Forage
    
    
    3,653
    
    
    
    4,561
    
    
    
    5,382
    
    
    
    4,454Rice
    
    
    27,542
    
    
    
    18,142
    
    
    
    17,258
    
    
    
    14,820Coffee(15)
    
    
    1,632
    
    
    
    1,632
    
    
    
    1,632
    
    
    
    1,632Total Planted Area
    
    
    196,155
    
    
    
    188,015
    
    
    
    158,468
    
    
    
    123,480Second Harvest Area
    
    
    35,829
    
    
    
    29,119
    
    
    
    29,150
    
    
    
    25,352Leased Area
    
    
    37,707
    
    
    
    47,709
    
    
    
    13,645
    
    
    
    14,264
 101




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##### Table of Contents



2010/2011
    
    
    2009/2010
    
    
    2008/2009
    
    
    2007/2008Harvest
    
    
    Harvest
    
    
    Harvest
    
    
    HarvestPlanted Area
    
    Year
    
    
    Year
    
    
    Year
    
    
    YearOwned Croppable Area(16)
    
    
    122,619
    
    
    
    111,187
    
    
    
    115,613
    
    
    
    83,864Cattle Area(17)
    
    
    78,559
    
    
    
    87,392
    
    
    
    106,375
    
    
    
    124,635Total Productive Area
    
    
    201,178
    
    
    
    198,579
    
    
    
    221,988
    
    
    
    208,499
 Year Ended December 31,2010
    
    
    2009
    
    
    2008Sugar, Ethanol and Energy BusinessSugarcane plantation
    
    
    53,799
    
    
    
    49,470
    
    
    
    32,616Owned land
    
    
    9,907
    
    
    
    9,085
    
    
    
    3,369Leased land
    
    
    43,892
    
    
    
    40,385
    
    
    
    29,247Land Transformation BusinessUndeveloped/Undermanaged land put
into production (hectares)
    
    
    6,490
    
    
    
    11,255
    
    
    
    33,387
 
 (1)
    
    Includes soybean, soybean oil and soybean meal.(2)
    
    Includes barley, rapeseed and sorghum and farming services.(3)
    
    Sales of processed rice including rough rice purchased from third parties and processed in our
own facilities, rice seeds and services.(4)
    
    In December 2009, we sold 55,543 head of cattle to a third party. See Item 4. Information on
the CompanyB. Business OverviewCattle Business.(5)
    
    Includes sales of sugarcane and other miscellaneous items to third parties of $417 thousand and
$1,291 thousand during 2009 and 2008, respectively.(6)
    
    Represents capital gains from the sale of land.(7)
    
    As of the date of this annual report, the 2010/2011 harvest was not completed. 2010/2011
harvesting operations began in October 2010 with the harvest of winter crops, and will finish in
August 2011, with the harvest of coffee.(8)
    
    Crop production does not include 46,749 tons, 52,482 tons and 52,960 tons of forage produced in
the 2010/2011, 2009/2010 and 2008/2009 harvest years, respectively.(9)
    
    Expressed in tons of rough rice produced on owned and leased farms. The rough rice we produce,
along with additional rough rice we purchase from third parties, is ultimately processed and
constitutes the product sold in respect of the rice business.(10)
    
    Includes rough rice purchased from third parties and processed in our own facilities.
Expressed in tons of processed rice (1 ton of processed rice is approximately equivalent to 1.6
tons of rough rice).(11)
    
    Raw milk produced at our dairy farms.(12)
    
    Measured in tons of live weight. Production is the sum of the net increases (or decreases)
during a given period in live weight of each head of beef cattle we own.(13)
    
    Includes hectares planted in the second harvest.(14)
    
    Includes 3,653 hectares, 4,561 hectares and 5,382 hectares used for the production of forage
during the 2010/2011, 2009/2010 and 2008/2009 harvest years, respectively.(15)
    
    Reflects the size of our coffee plantations, which are planted only once every 18 to 20 years.(16)
    
    Does not include potential croppable areas being evaluated for transformation.(17)
    
    Comprised of land devoted to raising beef cattle, which is mostly leased to a third party. 102




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##### Table of Contents



Year ended December 31, 2010 as compared to year ended December 31, 2009
  2010
    
    
    2009(In thousands of $)Sales of manufactured products and services rendered
    
    
    294,529
    
    
    
    183,386Cost of manufactured products sold and services rendered
    
    
    (219,201
    )
    
    
    (180,083
    )Gross Profit from Manufacturing Activities
    
    
    75,328
    
    
    
    3,303Sales of agricultural produce and biological assets
    
    
    131,738
    
    
    
    130,217Cost of agricultural produce sold and direct agricultural selling expenses
    
    
    (131,738
    )
    
    
    (130,217
    )Initial recognition and changes in fair value of biological assets and agricultural produce
    
    
    (30,528
    )
    
    
    71,668Changes in net realizable value of agricultural produce after harvest
    
    
    7,999
    
    
    
    12,787Gross (Loss) / Profit from Agricultural Activities
    
    
    (22,529
    )
    
    
    84,455Margin on Manufacturing and Agricultural Activities Before Operating Expenses
    
    
    52,799
    
    
    
    87,758General and administrative expenses
    
    
    (56,562
    )
    
    
    (52,393
    )Selling expenses
    
    
    (52,528
    )
    
    
    (31,169
    )Other operating income, net
    
    
    18,224
    
    
    
    13,071Share of loss of joint ventures
    
    
    (50
    )
    
    
    (294
    )(Loss)/ Profit from Operations Before Financing and Taxation
    
    
    (38,117
    )
    
    
    16,973Finance income
    
    
    16,559
    
    
    
    11,553Finance costs
    
    
    (39,496
    )
    
    
    (34,216
    )Financial results, net
    
    
    (22,937
    )
    
    
    (22,663
    )(Loss) Before Income Tax
    
    
    (61,054
    )
    
    
    (5,690
    )Income tax benefit
    
    
    16,263
    
    
    
    5,415(Loss) for the Year
    
    
    (44,791
    )
    
    
    (275
    )
 Sales of Manufactured Products and Services Rendered
 Sugar,Ethanol andCrops
    
    
    Rice
    
    
    Dairy
    
    
    Coffee
    
    
    Cattle
    
    
    Energy
    
    
    Total(In thousands of $)2010
    
    
    344
    
    
    
    59,280
    
    
    
    
    
    
    
    2,709
    
    
    
    3,718
    
    
    
    228,478
    
    
    
    294,5292009
    
    
    9,667
    
    
    
    67,317
    
    
    
    752
    
    
    
    7,984
    
    
    
    172
    
    
    
    97,494
    
    
    
    183,386
  
    
    a $131.0 million increase in our Sugar, Ethanol and Energy segment due to: (i) a 73.5%
increase in the volume of sugar and ethanol sold, measured in TRS, from 325 thousand tons
of TRS equivalent in 2009 to 564 thousand tons of TRS equivalent in 2010. On average, one
metric ton of sugarcane is equivalent to 140 kilograms of TRS equivalent. While a mill can
produce either sugar or ethanol, the TRS input requirements differ between the two
products. On average, 1.045 kilogram of TRS equivalent is required to produce 1.0 kilogram
of sugar, while 1.691 kilograms of TRS equivalent is required to produce a liter of
ethanol. The increase in the volume of TRS equivalent sold in 2010 was due to an increase
of 84% in the volume of sugarcane crushed in our mills, from 2.2 million tons in 2009 to
4.1 million tons in 2010 due to the expansion of the crushing capacity at our Angélica
mill; (ii) a 41.1% increase in the average market price of ethanol, from $430.5 per cubic
meter in 2009 to $607.5 per cubic meter in 2010; (iii) a 20.9% increase in the average
market price of sugar, from $348.2 per ton in 2009 to $421.1 per ton in 2010; (iv) a 39.4%
increase in the volume of energy sold, from 128.3 thousand MWh in 2009 to 178.9 thousand
MWh in 2010. The following table sets forth the breakdown of sales by product for the
periods indicated.
 Period Ended December 31,
    
    
    Period Ended December 31,
    
    
    Period Ended December 31,2010
    
    
    2009
    
    
    
    
    
    2010
    
    
    2009
    
    
    
    
    
    2010
    
    
    2009(In millions of $)
    
    
    %Change
    
    
    (In thousands units)
    
    
    %Change
    
    
    (In dollars per unit)
    
    
    %ChangeEthanol(M3)
    
    
    114.8
    
    
    
    62.8
    
    
    
    82.8
    %
    
    
    189.0
    
    
    
    145.9
    
    
    
    29.5
    %
    
    
    607.5
    
    
    
    430.5
    
    
    
    41.1
    %Sugar(Tons)
    
    
    98.4
    
    
    
    26.1
    
    
    
    276.3
    %
    
    
    233.6
    
    
    
    75.1
    
    
    
    211.2
    %
    
    
    421.1
    
    
    
    348.2
    
    
    
    20.9
    %Energy(MWh)
    
    
    15.0
    
    
    
    8.2
    
    
    
    76.1
    %
    
    
    178.9
    
    
    
    128.3
    
    
    
    39.4
    %
    
    
    84.1
    
    
    
    66.6
    
    
    
    26.3
    %Others
    
    
    0.3
    
    
    
    0.4
    
    
    
    0.0
    %Total
    
    
    228.5
    
    
    
    97.5
    
    
    
    134.4
    %
 103




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##### Table of Contents



During 2010, the sugar facility at the Angélica mill was completed which increased sugar
production proportionally, therefore increasing sugar sales more than ethanol sales.
 
    
    a $3.5 million increase in our Cattle segment due to the revenues from the lease of
most of our cattle land to a third party in December 2009 for beef cattle grazing;
 partially offset by:
 
    
    a $8.0 million decrease in our Rice segment due to a 17.9% decrease in the volume of
white and brown rice sold, mainly as a result of a 18.0% decrease in the volume of rough
rice processed in our mills, as a result of a lower volume of rough rice purchased from
third parties due to increases in the price of rough rice. The decrease in volume was
partially offset by a 14.1% increase in price, from $347.9 per ton of rough rice
equivalent, which reflects the sale price of white and brown rice in 2009 to $397.0 per
ton of rough rice equivalent in 2010;
    
    a $9.3 million decrease in our Crops segment mainly due to a one-time production and
sale of 18.9 thousand tons of soybean meal and oil in a leased industrial facility during
2009;
    
    a $5.3 million decrease in our Coffee segment resulting from our cessation of coffee
trading activities related to third-party production (we continue to commercialize of our
own coffee production); and
    
    a $0.8 million decrease in our Dairy segment due to the cessation of whole milk powder
selling activities following our entry into the Grupo La Lácteo joint venture.
 Cost of Manufactured Products Sold and Services Rendered
 Sugar,Ethanol andCrops
    
    Rice
    
    Dairy
    
    Coffee
    
    Cattle
    
    Energy
    
    Total(In thousands of $)2010
    
    
    
    
    
    
    (52,017
    )
    
    
    
    
    
    
    (2,546
    )
    
    
    
    
    (164,638
    )
    
    
    (219,201
    )2009
    
    
    (5,447
    )
    
    
    (56,576
    )
    
    
    (613
    )
    
    
    (7,120
    )
    
    
    
    
    (110,327
    )
    
    
    (180,083
    )
 
    
    Cost of manufactured products sold and services rendered increased 21.7%, from
$180.1 million in 2009, to $219,2 million in 2010. This increase was primarily due to:
    
    a $54.3 million increase in our Sugar, Ethanol and Energy segment as a result of a
73.5% increase in the volume of sugar and ethanol sold coupled with a 34.1% increase in
the actual price of sugarcane, which was partially offset by decreases in the operating
costs per unit of TRS produced at the Angélica mill as compared to the prior year, which
had resulted from the unusual, sporadic rainfall pattern observed during the 2009/2010
harvest year that led to interruptions in harvesting activities, disruptions to milling
operations and less stable production rates during 2009;
  
    
    a $4.6 million decrease in our Rice segment due to a 17.9% decrease in the volume of
white and brown rice sold which was partially offset by a 12.0% increase in the cost per
unit sold, mainly as a result of an increase in the market price of rough rice, which is
the main component of the cost of the processed rice;
 
    
    a $5.4 million decrease in our Crops segment mainly due to the cost of raw materials
(soybeans) associated with the one-time sale of soybean meal and oil during 2009;
    
    a $4.6 million decrease in our Coffee segment due to a decrease in the volume of coffee
traded as a result of the cessation of coffee trading activities
since May 2010; and
    
    a $0.6 million decrease in our Dairy segment due to the cessation of whole milk powder
selling activities following our entry into the Grupo La Lácteo
joint venture.
 104




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##### Table of Contents



Sales and Cost of Agricultural Produce and Biological Assets
 Sugar,Ethanol andCrops
    
    
    Rice
    
    
    Dairy
    
    
    Coffee
    
    
    Cattle
    
    
    Energy
    
    
    Total(In thousands of $)2010
    
    
    107,818
    
    
    
    2,305
    
    
    
    14,297
    
    
    
    4,863
    
    
    
    2,407
    
    
    
    48
    
    
    
    131,7382009
    
    
    82,362
    
    
    
    2,033
    
    
    
    11,142
    
    
    
    6,281
    
    
    
    28,306
    
    
    
    93
    
    
    
    130,217
  
    
    A $25.5 million increase in our Crops segment mainly due to: (i) a 28.2% increase in
the production area, from 104,986 hectares in 2009 to 134,562 hectares in 2010, and (ii)
an increase in the average yields obtained in the 2009/2010 harvest as a result of better
weather conditions. The following table sets forth the breakdown of sales for the periods
indicated.
 Year Ended December 31,
    
    
    Year Ended December 31,
    
    
    Year Ended December 31,2010
    
    
    2009
    
    
    
    
    
    2010
    
    
    2009
    
    
    
    
    
    2010
    
    
    2009(In millions of $)
    
    
    
    %Change

    
    (In thousands of tons)
    
    
    
    %Change

    
    (In $ per ton)
    
    
    
    %ChangeSoybean.
    
    
    64.9
    
    
    
    35.7
    
    
    
    81.8
    %
    
    
    250.3
    
    
    
    120.3
    
    
    
    108,0
    %
    
    
    259.3
    
    
    
    296.7
    
    
    
    (12.6
    %)Corn
    
    
    24.0
    
    
    
    14.7
    
    
    
    63.6
    %
    
    
    182.0
    
    
    
    100.5
    
    
    
    81.0
    %
    
    
    128.3
    
    
    
    145.8
    
    
    
    (12.0
    %)Cotton
    
    
    2.4
    
    
    
    11.9
    
    
    
    (79.9
    %)
    
    
    1.8
    
    
    
    14.9
    
    
    
    (87.7
    %)
    
    
    1,314.7
    
    
    
    801.5
    
    
    
    64.0
    %Wheat
    
    
    7.9
    
    
    
    10.2
    
    
    
    (22.3
    %)
    
    
    51.7
    
    
    
    62.7
    
    
    
    (17.4
    %)
    
    
    153.5
    
    
    
    163.1
    
    
    
    (5.9
    %)Sunflower
    
    
    4.9
    
    
    
    5.5
    
    
    
    (11.6
    %)
    
    
    16.7
    
    
    
    27.8
    
    
    
    (39.9
    %)
    
    
    291.8
    
    
    
    198.1
    
    
    
    47.3
    %Barley
    
    
    1.2
    
    
    
    3.1
    
    
    
    (62.3
    %)
    
    
    8.6
    
    
    
    21.4
    
    
    
    (59.7
    %)
    
    
    135.8
    
    
    
    145.1
    
    
    
    (6.5
    %)Others
    
    
    2.6
    
    
    
    1.3
    
    
    
    102.4
    %
    
    
    19.7
    
    
    
    2.0
    
    
    
    905.9
    %Total
    
    
    107.8
    
    
    
    82.4
    
    
    
    30.9
    %
    
    
    530.9
    
    
    
    349.6
    
    
    
    51.9
    %
 
    
    a $3.1 million increase in our Dairy segment due to a 46.4% increase in the market
price of raw milk, from 23.5 cents per liter in 2009 to 34.4 cents per liter in 2010,
partially offset by a 12.4% decrease in the volume of liters produced, from 47.5 million
liters in 2009 to 41.6 million liters in 2010 due to a new production system for cows
(from the grazing dairy system to the free-stall dairy system); and
    
    a $0.3 million increase in our Rice segment mainly attributable to higher sales of rice
seeds to third parties as a result of an increase of the planting area in Argentina,
primarily due to better weather conditions;
  
    
    a $25.8 million decrease in our Cattle segment due to a 96.6% decrease in the number of
head of beef cattle sold, from 107.4 thousand head in 2009 to 3.7 thousand head in 2010,
as a result of the reduced herd size following the sale of most of our beef cattle herd in
December 2009; and
    
    a $1.4 million decrease in our Coffee segment primarily due to a 29.2% decrease in the
volume sold, from 2,808 tons in 2009 to 1,989 tons in 2010 as a result of a 7.9% decrease
in production from 2,412 tons in 2009 to 2,221 tons in 2010 and a 531.2% increase of
inventories at end of period from 141 tons in 2009 to 890 tons in 2010. The decrease in
production was mainly driven by a decrease
 105




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in harvested area generated by an increase in the area under pruning, from
276 hectares in 2009 to 406 hectares 2010.
  Initial Recognition and Changes in Fair Value of Biological Assets and Agricultural Produce
 Sugar,Ethanol andCrops
    
    
    Rice
    
    
    Dairy
    
    
    Coffee
    
    
    Cattle
    
    
    Energy
    
    
    Total(In thousands of $)2010
    
    
    38,879
    
    
    
    9,360
    
    
    
    9,129
    
    
    
    (2,630
    )
    
    
    737
    
    
    
    (86,003
    )
    
    
    (30,528
    )2009
    
    
    6,563
    
    
    
    12,170
    
    
    
    3,374
    
    
    
    (16,207
    )
    
    
    4,704
    
    
    
    61,064
    
    
    
    71,668
  
    
    a $147.1 million decrease in our Sugar, Ethanol and Energy segment due to:-
    
    a $154.3 million decrease, from a gain of $57.3 million in 2009 to a loss of $96.8
million in 2010 generated by a decrease in price estimates used in the DCF model to
determine the fair value of our sugarcane plantations. In the DCF model, the price of
future harvested sugarcane is calculated based on estimates of sugar price derived from
the NY11 futures contract. Sugar price estimates decreased as a result of an adjustment to
this valuation model for sugarcane, which increased the loss by $59.9 million at December
31, 2010. Sugar price estimates as of December 31, 2010 are calculated based on the
average of daily prices for sugar future contracts for the period June 1 to December 31,
2010 (i.e. 6-month moving average) rather than the single price for future contracts as of
year end. The change is expected to mitigate the impact of volatility and seasonality that
arises with a single pricing date; and-
    
    a $7.2 million increase, from a gain of $3.7 million in 2009 to a gain of $10.9 million
in 2010, generated by the recognition at fair value less cost to sell of sugarcane at the
point of harvest due to: (i) a 81.2% increase in harvested area from 22,222 hectares in
2009 to 40,263 hectares in 2010, (ii) a 2.9% increase in yields obtained, from 93.4 tons
per hectare in 2009 to 96.1 tons per hectare in 2010, and (iii) a 34.1% increase in the
price of sugarcane from $22.6 per ton in 2009 to $30.3 per ton in 2010, as a result of
higher sugar and ethanol market prices and higher TRS content in sugarcane, which was
partially offset by (iv) a 35.9% increase in actual production
costs, from $1,944.0 per
hectare in 2009 to $2,642.6 per hectare in 2010, mainly as a result of an increase in
transportation costs generated by the new sugarcane plots in the Ivinhema region, which
increased the average distance from our total sugarcane plots to the Angélica mill.
    
    Of the $86.0 million loss (which results from the $96.8 million loss plus $10.9
million gain) of initial recognition and changes in fair value of biological assets and
agricultural produce for 2010, $96.4 million represents the unrealized portion, as
compared to the $58.7 million gain unrealized portion of the $61.1 million gain of initial
recognition and changes in fair value of biological assets and agricultural produce in
2009;
    
    a $2.8 million decrease in our Rice segment as a result of (i) an 9.1% decrease in
yields from 83.3 tons in 2009 to 75.8 tons in 2010, and (ii) favorable weather conditions
during the end of 2009, which resulted in the recognition at fair value less cost to sell
of non-harvested rice of a larger proportion of the planted rice at the end of 2009,
reduced the recognition at fair value less cost to sell of rice at the point of harvest by
$63 million. These effects were partially offset by a 5.1% increase in the production area and a 2.1%
 106




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decrease in actual production costs (i.e.
agrochemical and fertilizer expenses).
    
    Of the $9.4 million of initial recognition and changes in fair value of biological
assets and agricultural produce for 2010, $6.3 million represents the unrealized portion,
as compared to the $6.8 million unrealized portion of the $12.2 million of initial
recognition and changes in fair value of biological assets and agricultural produce in
2009;
    
    a $4.0 million decrease in our Cattle segment as a result of the reduced herd size
following the sale of most of our beef cattle herd in December 2009
  
    
    a $32.3 million increase in our Crops segment mainly due to:
    
    a $28.0 million increase in the recognition at fair value less cost to sell of crops
at the point of harvest, from $2.1 million in 2009 to $30.2 million in 2010, mainly due
to: (i) higher crop yields (see Trends and Factors Affecting Our Results of
OperationsEffects of Yield Fluctuations), (ii) a 28.2% increase in the production area,
from 104,986 hectares in 2009 to 134,562 hectares in 2010 and (iii) a decrease in
agrochemical and fertilizer prices, which was partially offset by the favorable weather
conditions by the end of 2009, resulting in the recognition at fair value less cost to
sell of non-harvested crops of a larger proportion of the planted crops at the end of
2009, which reduced the recognition at fair value less cost to sell of crops at the point
of harvest for 2010 by $4.4 million compared to a reduction of $0.3 million for 2009. The
resulting actual average margin per hectare for our summer crops (i.e. soybean, corn,
sunflower and cotton) increased from $10.9 per hectare in 2009 (which is reflective of the
impact of the drought) to $198.9 per hectare in 2010; and
    
    a $4.3 million increase in the recognition at fair value less cost to sell for
non-harvested crops as of year-end, from $4.4 million in 2009 to $8.7 million in 2010,
primarily due to higher commodity prices, which resulted in an increase on average margin
per hectare from $193.0 per hectare in 2009 to $265.9 per hectare in 2010
    
    The following table sets forth actual production costs by crop for the periods
indicated:
 Year Ended December 31,2010
    
    
    2009(In $ per hectare)
    
    
    %ChangeCorn
    
    
    337.9
    
    
    
    363.9
    
    
    
    (7.1
    %)Soybean
    
    
    374.6
    
    
    
    295.6
    
    
    
    26.7
    %Soybean (second
harvest)
    
    
    219.7
    
    
    
    202.7
    
    
    
    8.4
    %Cotton
    
    
    1,628.5
    
    
    
    1,768.1
    
    
    
    (7.9
    %)Wheat
    
    
    219.1
    
    
    
    254.8
    
    
    
    (14.0
    %)
 
    
    a $13.6 million improvement in our Coffee segment due to:
    
    a $3.4 million increase in the recognition at fair value less cost to sell of coffee
at the point of harvest, from a loss of $3.5 million in 2009 to a loss of $0.2 million in
2010, due to a 70.0% increase in the actual price of coffee at the point of harvest; and
    
    a $10.2 million increase in the recognition at fair value less cost to sell of
non-harvested coffee, from a loss of $12.7 million in 2009 to a loss of $2.4 million in
2010. The $12.7 million loss of 2009 was mainly generated by a reduction of the area to be
harvested in the next five years as a result of the adoption of a pruning plan to correct
the growth pattern of our coffee trees, which impacted the
 107




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production estimates used in the DCF model used to determine the fair
value of our coffee plantations as of December 31, 2009.
    
    Of the $16.2 million loss in initial recognition and changes in fair value of
biological assets and agricultural produce for 2009, $15.7 million represents the
unrealized portion of the loss, as compared to the $2.5 million unrealized portion of the
loss of $2.6 million of initial recognition and changes in fair value of biological assets
and agricultural produce in 2010;
    
    a $5.7 million increase in our Dairy segment mainly due to:
    
    a $2.8 million increase in the recognition at fair value less cost to sell of raw
milk, from $3.1 million in 2009 to $5.9 million in 2010 due to a 46.4% increase in raw
milk market price partially offset by a 12.4% decrease in the volume of liters produced;
and
    
    a $2.9 million increase in the recognition at fair value less cost to sell of the
dairy herd, from $0.3 million in 2009 to $3.2 million 2010 as a result of a 78% increase
in the market prices of dairy cows.
    
    Of the $9.1 million in initial recognition and changes in fair value of biological
assets and agricultural produce for 2010, $3.6 million gain represents the unrealized
portion, as compared to the $0.03 million unrealized portion of the $3.4 million in
initial recognition and changes in fair value of biological assets and agricultural
produce in 2009.
 Changes in Net Realizable Value of Agricultural Produce after Harvest
 Sugar, Ethanol andCrops
    
    Rice
    
    Dairy
    
    Coffee
    
    Cattle
    
    Energy
    
    Total(In thousands of $)2010
    
    7,482
    
    N/A
    
    N/A
    
    517
    
    N/A
    
    N/A
    
    7,9992009
    
    11,362
    
    191
    
    N/A
    
    1,234
    
    N/A
    
    N/A
    
    12,787
    General and Administrative Expenses
 Sugar, Ethanol andCrops
    
    Rice
    
    Dairy
    
    Coffee
    
    Cattle
    
    Energy
    
    Corporate
    
    Total(In thousands of $)2010
    
    (7,087)
    
    (3,773)
    
    (2,910)
    
    (983)
    
    (350)
    
    (19,080)
    
    (22,379)
    
    
    (56,562
    )2009
    
    (6,280)
    
    (2,883)
    
    (2,221)
    
    (2,126)
    
    (2,909)
    
    (13,922)
    
    (22,052)
    
    
    (52,393
    )
  108




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Selling Expenses
 Sugar, 
Ethanol andCrops
    
    Rice
    
    Dairy
    
    Coffee
    
    Cattle
    
    Energy
    
    Total(In thousands of $)2010
    
    
    (1,522
    )
    
    
    (8,154
    )
    
    
    (333
    )
    
    
    (655
    )
    
    
    (175
    )
    
    
    (41,689
    )
    
    
    (52,528
    )2009
    
    
    (1,587
    )
    
    
    (7,485
    )
    
    
    (777
    )
    
    
    (1,353
    )
    
    
    (1,045
    )
    
    
    (18,922
    )
    
    
    (31,169
    )
  Other Operating Income, Net
 Sugar,
 Ethanol and
    
    LandCrops
    
    Rice
    
    Dairy
    
    Coffee
    
    Cattle
    
    Energy
    
    Transformation
    
    Corporate
    
    Total(In thousands of $)2010
    
    
    (6,194
    )
    
    
    345
    
    
    
    
    
    
    
    (2,165
    )
    
    
    70
    
    
    
    5,305
    
    
    
    20,837
    
    
    
    26
    
    
    
    18,2242009
    
    
    4,776
    
    
    
    (942
    )
    
    
    (108
    )
    
    
    806
    
    
    
    377
    
    
    
    (10,467
    )
    
    
    18,839
    
    
    
    (210
    )
    
    
    13,071
  
    
    a $15.6 million increase in our Sugar, Ethanol and Energy segment due to the
mark-to-market effect of future sales contracts for sugar; and
    
    a $2.0 million increase in our Land Transformation segment due to the sale of a
farmland in December 2010, which resulted in a $20.8 million gain, compared to the sale of
a farmland in December 2009, which generated a $18.8 million gain;
 partially offset by:
 
    
    a $11.0 million decrease in our Crops segment due to the mark-to-market effect of
outstanding hedge positions, which had a positive impact during 2009; and
    
    a $2.9 million decrease in our Coffee segment due to the mark-to-market effect of
outstanding coffee derivative positions.
  Share of Loss of Joint Ventures
  109




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Financial Results, Net
  Income Tax Benefit
   Loss for the Year
  Year ended December 31, 2009 as compared to year ended December 31, 2008
  Year Ended December 31,2009
    
    
    2008(In thousands of $)Sales of manufactured products and services rendered
    
    
    183,386
    
    
    
    117,173Cost of manufactured products sold and services rendered
    
    
    (180,083
    )
    
    
    (105,583
    )Gross Profit from Manufacturing Activities
    
    
    3,303
    
    
    
    11,590Sales of agricultural produce and biological assets
    
    
    130,217
    
    
    
    127,036Cost of agricultural produce sold and direct agricultural selling expenses
    
    
    (130,217
    )
    
    
    (127,036
    )Initial recognition and changes in fair value of biological assets and agricultural produce
    
    
    71,668
    
    
    
    61,000Changes in net realizable value of agricultural produce after harvest
    
    
    12,787
    
    
    
    1,261Gross Profit from Agricultural Activities
    
    
    84,455
    
    
    
    62,261
 110




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##### Table of Contents



Year Ended December 31,2009
    
    
    2008(In thousands of $)Margin on Manufacturing and Agricultural Activities Before Operating
Expenses
    
    
    87,758
    
    
    
    73,851General and administrative expenses
    
    
    (52,393
    )
    
    
    (45,633
    )Selling expenses
    
    
    (31,169
    )
    
    
    (24,496
    )Other operating income, net
    
    
    13,071
    
    
    
    17,323Excess of fair value of net assets acquired over cost
    
    
    
    
    
    
    1,227Share of loss of joint ventures
    
    
    (294
    )
    
    
    (838
    )Profit from Operations Before Financing and Taxation
    
    
    16,973
    
    
    
    21,434Finance income
    
    
    11,553
    
    
    
    2,552Finance costs
    
    
    (34,216
    )
    
    
    (50,860
    )Financial results, net
    
    
    (22,663
    )
    
    
    (48,308
    )(Loss) Before Income Tax
    
    
    (5,690
    )
    
    
    (26,874
    )Income tax benefit
    
    
    5,415
    
    
    
    10,449(Loss) for the Year
    
    
    (275
    )
    
    
    (16,425
    )
 Sales of Manufactured Products and Services Rendered
 Sugar,Ethanol andCrops
    
    Rice
    
    Dairy
    
    Coffee
    
    Cattle
    
    Energy
    
    Total(In thousands of $)2009
    
    
    9,667
    
    
    
    67,317
    
    
    
    752
    
    
    
    7,984
    
    
    
    172
    
    
    
    97,494
    
    
    183,3862008
    
    
    3,134
    
    
    
    53,280
    
    
    
    2,171
    
    
    
    8,544
    
    
    
    164
    
    
    
    49,880
    
    
    117,173
  
    
    a $47.6 million increase in our Sugar, Ethanol and Energy segment due to a
99.4% increase in the volume of sugar and ethanol sold, from 163 thousand tons of TRS
equivalent in 2008 to 325 thousand tons of TRS equivalent in 2009. The increase in the
volume of TRS equivalent sold in 2009 was due to an increase of 57.1% in the volume of
sugarcane crushed in our mills, from 1.4 million tons in 2008 to 2.2 million tons in
2009, and to a lower level of sugar and ethanol inventories, which had decreased by 44
thousand tons of TRS equivalent as of the end of 2009. The increase in the volume of
sugarcane crushed was mainly due to the expansion at our Angélica mill, which
commenced operations in 2008. The increase in sales was also due to new sales of
electricity in 2009 for a total amount of 128.3 thousand MWh, as a result of the
connection of our Angélica mill to the electricity network and the start up of the new
boiler and turbo generator at our UMA mill. This was partially offset by a 12.7%
decrease in the average market price of ethanol, from $493.0 per cubic meter in 2008
to $430.5 per cubic meter in 2009. The following table sets forth the breakdown of
sales by product for the periods indicated.
 Year Ended December 31,
    
    
    
    
    
    
    Year Ended December 31,
    
    
    
    
    
    
    Year Ended December 31,2009
    
    
    2008
    
    
    
    
    
    2009
    
    
    2008
    
    
    
    
    
    2009
    
    
    2008(In millions of $)
    
    
    %Change

    
    
    (In thousands units)
    
    


    %Change
    
    
    (In dollars per unit)
    
    
    %ChangeEthanol(M3)
    
    
    62.8
    
    
    
    29.4
    
    
    
    113.8
    %
    
    
    145.9
    
    
    
    59.6
    
    
    
    144.8
    %
    
    
    430.5
    
    
    
    493.0
    
    
    
    (12.7
    )%Sugar(Tons)
    
    
    26.1
    
    
    
    20.5
    
    
    
    27.6
    %
    
    
    75.1
    
    
    
    59.6
    
    
    
    25.9
    %
    
    
    348.1
    
    
    
    343.9
    
    
    
    1.2
    %Energy(MWh)
    
    
    8.2
    
    
    
    
    
    
    
    0
    %
    
    
    128.3
    
    
    
    
    
    
    
    0
    %
    
    
    64.0
    
    
    
    
    
    
    
    0
    %Others
    
    
    0.4
    
    
    
    
    
    
    
    0
    %Total
    
    
    97.5
    
    
    
    49.9
    
    
    
    95.5
    %
 111




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During 2009, our Angélica mill produced only ethanol. The high share of ethanol in our
production mix prevented us from capturing the increase in sugar prices during the second
semester of 2009. Angélica started producing sugar in 2010 after completing the
construction of its sugar facility;
 
    
    a $14.0 million increase in our Rice segment due to an increase in the
volume of white and brown rice sold as a result of an increase in the volume of rough
rice processed in our mills, from 119.2 thousand tons of rough rice in 2008 to 157.1
thousand tons of rough rice in 2009. The higher volume of rough rice processed was the
result of higher volume of rough rice purchased from third parties. The increase in
sales was also due to an increase in sales of processed rice purchased from third
parties, from 2.6 thousand tons of rough rice equivalent in 2008 to 25.9 thousand tons
of rough rice equivalent in 2009. The increase in volume was partially offset by a
18.5% decrease in price, from $426.7 per ton of rough rice equivalent in 2008 to
$347.9 per ton of rough rice equivalent in 2009; and
    
    a $6.5 million increase in our Crops segment mainly due to a one-time
production and sale of 18.9 thousand tons of soybean meal and oil in a leased
industrial facility during 2009;
 partially offset by:
 
    
    a $1.4 million decrease in our Dairy segment. Sales in 2009 correspond to
the sale of remaining inventory of whole milk powder produced in previous periods.
After the formation of the joint venture, Grupo La Lácteo, we ceased production of
whole milk powder;
    
    sales of manufactured products and services rendered for our Coffee
segment remained essentially unchanged from $8.5 million in 2008 to $8.0 million in
2009. These sales reflect the sales of our coffee trader subsidiary Adeco Comerica,
Exotica Importance Ltda., which traded coffee between producers from the east-center
region of Brazil and roasters in Japan, the E.U. and the U.S. Since May 2010, we are
no longer engaged in coffee trading; and
    
    sales of manufactured products and services rendered for our Cattle
segment remained unchanged, from $0.2 million in 2008 to $0.2 million in 2009, and
reflect land leased to third parties for beef cattle grazing.
 Cost of Manufactured Products Sold and Services Rendered
 Sugar, Ethanol andCrops
    
    Rice
    
    Dairy
    
    Coffee
    
    Cattle
    
    Energy
    
    Total(In thousands of $)2009
    
    (5,447)
    
    (56,576)
    
    (613)
    
    (7,120)
    
    
    
    (110,327)
    
    (180,083)2008
    
    (2,807)
    
    (39,862)
    
    (1,849)
    
    (6,978)
    
    
    
    (54,087)
    
    (105,583)
  
    
    a $56.2 million increase in our Sugar, Ethanol and Energy segment as a
result of a 99.4% increase in the volume of sugar and ethanol sold, further enhanced
by greater operating costs, primarily at our Angélica mill, associated mainly with (i)
increased costs due to the expansion of operations as they reach full productive
potential, (ii) the unusual, sporadic rainfall pattern observed during the 2009
harvest, resulting in interruptions in harvesting activities, disruptions to milling
operations and less stable productions rates, and (iii) a 7.7% decrease in the TRS
content of the sugarcane, from 135 kilograms per ton of sugarcane in 2008 to 124
kilograms per ton of sugarcane in 2009, due to the rainy weather during the harvest,
which increased the cost per unit of sugar and ethanol produced in 2009 as compared to
2008. As the TRS content of the harvested sugarcane decreases, more units of raw input
material (sugarcane) and milling is required to produce each unit of output (sugar and
ethanol);
 112




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##### Table of Contents




    
    a $16.7 million increase in our Rice segment due to a 55.0% increase in
the volume of white and brown rice sold which was partially offset by an 8.4% decrease
in the cost per unit sold, as a result of a decrease in the market price of rough
rice, which is the main component of the cost;
    
    a $2.6 million increase in our Crops segment mainly due to cost of raw
materials (soybeans) associated with the increase in sales volume of soybean meal and
oil; and
    
    our Coffee segment remained essentially unchanged, from $7.0 million in
2008 to $7.1 million in 2009;
 partially offset by:
 
    
    a $1.2 million decrease in our Dairy segment due to the cost of raw
materials (raw milk) associated with the decrease in sales volume of whole milk
powder.
 Sales and Cost of Agricultural Produce and Biological Assets
 Sugar, Ethanol andCrops
    
    Rice
    
    Dairy
    
    Coffee
    
    Cattle
    
    Energy
    
    Total(In thousands of $)2009
    
    
    82,362
    
    
    
    2,033
    
    
    
    11,142
    
    
    
    6,281
    
    
    
    28,306
    
    
    
    93
    
    
    
    130,2172008
    
    
    92,853
    
    
    
    3,645
    
    
    
    12,650
    
    
    
    7,404
    
    
    
    9,193
    
    
    
    1,291
    
    
    
    127,036
  
    
    a $19.1 million increase in our Cattle segment due to the sale of 107.5
thousand head of beef cattle during 2009, including the one-time sale of 55.5 thousand
head of beef cattle to a third party in December 2009;
 partially offset by:
 
    
    a $10.5 million decrease in our Crops segment mainly due to a decrease of
15% to 40%, depending on the crop, in the average yields obtained, as a result of a
severe drought affecting most of the regions in which we operate, which commenced
during mid-2008 and lasted until to mid-2009. See Trends and Factors Affecting Our
Results of OperationsEffects of Yield Fluctuations. The reduction in yields was
partially offset by a 36.0% increase in the production area, from 77,221 hectares in
2008 to 104,986 hectares in 2009. See Trends and Factors Affecting Our Results of
OperationsEffects of Yield Fluctuations for a breakdown of yields obtained by crop.
The following table sets forth the breakdown of sales by product for the periods
indicated.
 Year Ended December 31,
    
    
    Year Ended December 31,
    
    
    Year Ended December 31,%
    
    
    
    
    
    
    
    
    
    
    %
    
    
    
    
    
    
    
    
    
    
    %2009
    
    
    2008
    
    
    Change
    
    
    2009
    
    
    2008
    
    
    Change
    
    
    2009
    
    
    2008
    
    
    Change(In millions of $)
    
    
    (In thousands of tons)
    
    
    (In $ per ton)Soybean
    
    
    35.7
    
    
    
    37.3
    
    
    
    (4.4
    )%
    
    
    120.3
    
    
    
    129.6
    
    
    
    (7.2
    )%
    
    
    296.7
    
    
    
    288.1
    
    
    
    3.0
    %Corn
    
    
    14.7
    
    
    
    22.5(35.0
    )%
    
    
    100.5
    
    
    
    153.3
    
    
    
    (34.4
    )%
    
    
    145.8
    
    
    
    147.1
    
    
    
    (0.9
    )%Cotton
    
    
    11.9
    
    
    
    5.8
    
    
    
    104.8
    %
    
    
    14.9
    
    
    
    7.6
    
    
    
    96.1
    %
    
    
    799.0
    
    
    
    764.9
    
    
    
    4.5
    %Wheat
    
    
    10.2
    
    
    
    15.4
    
    
    
    (33.7
    )%
    
    
    62.7
    
    
    
    84.0
    
    
    
    (25.4
    )%
    
    
    163.0
    
    
    
    183.4
    
    
    
    (11.1
    )%Sunflower
    
    
    5.5
    
    
    
    5.6
    
    
    
    (1.7
    )%
    
    
    27.8
    
    
    
    15.3
    
    
    
    81.7
    %
    
    
    198.5
    
    
    
    367.0
    
    
    
    (45.9
    )%Barley
    
    
    3.1
    
    
    
    2.8
    
    
    
    10.3
    %
    
    
    21.4
    
    
    
    14.5
    
    
    
    47.6
    %
    
    
    145.1
    
    
    
    194.2
    
    
    
    (25.3
    )%Others
    
    
    1.3
    
    
    
    3.5
    
    
    
    (62.9
    )%
    
    
    
    
    
    
    Total
    
    
    82.4
    
    
    
    92.9
    
    
    
    (11.3
    )%
    
    
    347.6
    
    
    
    404.3
    
    
    
    (14.0
    )%
 113




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##### Table of Contents




    
    a $1.6 million decrease in our Rice segment mainly attributable to lower
sales of rice seeds to third parties as a result of a reduction of the planting area
in Argentina, due primarily to the drought;
    
    a $1.5 million decrease in our Dairy segment due to a 20.0% decrease in
the market price of raw milk, from 29.3 cents per liter in 2008 to 23.5 cents per
liter in 2009. This was partially offset by a 10.1% increase in the volume of liters
produced, from 43.1 million liters in 2008 to 47.5 million liters in 2009;
    
    a $1.2 million decrease in our Sugar, Ethanol and Energy segment due to a
decrease in the sale of raw sugarcane as a result of the increase in crushing capacity
at our Angélica mill, which eliminated the need to sell the excess raw sugarcane
produced in our agricultural operations to third party mills; and
    
    a $1.1 million decrease in our Coffee segment due primarily to a 14.9%
decrease in the market price of harvested coffee, from $2,628 per ton in 2008 to
$2,237 per ton in 2009, and to a lesser extent to a 0.3% decrease in the volume sold,
from 2,817 tons in 2008 to 2,808 tons in 2009, as a result of a 22.5% decrease in
yields due to unusually heavy rains at harvest time.
 Initial Recognition and Changes in Fair Value of Biological Assets and Agricultural Produce
 Sugar, EthanolCrops
    
    
    Rice
    
    
    Dairy
    
    
    Coffee
    
    
    Cattle
    
    
    and Energy
    
    
    Total(In thousands of $)2009
    
    
    6,563
    
    
    
    12,170
    
    
    
    3,374
    
    
    
    (16,207
    )
    
    
    4,704
    
    
    
    61,064
    
    
    
    71,6682008
    
    
    28,005
    
    
    
    7,854
    
    
    
    2,633
    
    
    
    4,485
    
    
    
    3,788
    
    
    
    14,235
    
    
    
    61,000
  
    
    a $46.8 million increase in our Sugar, Ethanol and Energy segment due to:
    
    a $2.9 million increase, from $0.8 million in 2008 to $3.7 million in
2009, generated by the recognition at fair value less cost to sell of sugarcane at the
point of harvest due to (i) a 44.3% increase in the area harvested from 15,400
hectares in 2008 to 22,222 hectares in 2009, in connection with the expansion of the
crushing capacity at our Angélica mill, (ii) a 4.5% increase in yields obtained, from
89.4 tons per hectare in 2008 to 93.4 tons per hectare in 2009, as a result of a
higher percentage of new plantations in the total plantation area, and (iii) a 3.9%
increase in the price of sugarcane from $21.8 per ton in 2008 to $22.6 per ton in
2009, as a result of higher sugar and ethanol market prices, which were partially
offset by a lower TRS content in sugarcane. Actual production costs remained
essentially unchanged, from $1,894.2 per hectare in 2008 to $1,944.0 per hectare in
2009; and
    
    a $43.9 million increase, from $13.4 million in 2008 to $57.3 million in
2009, mainly generated by increases in price and yield estimates used in the DCF model
to determine the fair value of our sugarcane plantations. Sugar price estimates were
increased as a result of the increase in the market prices for sugar from $11.8 cents
per pound as of December 31, 2008 to $27.0 cents per pound as of December 31, 2009 due
to negative weather conditions in Brazil and India during 2009 generating a reduction
in worldwide inventory. Yield estimates were increased as a result of a higher
percentage of new plantations in the total plantation area. A sugarcane plant can be
harvested between 5 to 6 times, once per year. The first cut can yield, on average,
120.0 tons per hectare. The yield decreases over time. The last cut can yield, on
average, 60.0 tons per hectare. As a result, new plantations generate greater yields
and are more valuable. The change in price and yield estimates resulted in an increase
in the fair value of our sugarcane plantations from $1,476.8 per hectare in 2008 to
$3,329.3 per hectare in 2009.
 114




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
    
    Of the $61.1 million of initial recognition and changes in fair value of
biological assets and agricultural produce for 2009, $58.7 million represents the
unrealized portion, as compared to the $13.7 million unrealized portion of the $14.3
million of initial recognition and changes in fair value of biological assets and
agricultural produce in 2008;
    
    a $4.3 million increase in our Rice segment as a result of:
    
    a $2.5 million decrease in gains generated by the recognition at fair
value less cost to sell of rice at the point of harvest, from $7.9 million in 2008 to
$5.4 million in 2009, due to (i) a 17.3% decrease in yields obtained, from 6.6 tons
per hectare in 2008 to 5.5 tons per hectare in 2009, due to the drought (see Trends
and Factors Affecting Our Results of OperationsEffects of Yield Fluctuations), and
(ii) a 25.8% increase in actual production costs, from $576.5 per hectare in 2008 to
$725.1 per hectare in 2009, as a result of higher herbicide, fertilizer and seed
prices, which was partially offset by a 16.5% increase in the production area, from
14,820 hectares in 2008 to 17,258 hectares in 2009. The resulting actual margin per
hectare decreased from $530.0 in 2008 to $313.5 in 2009; and
    
    a $6.8 million increase in the gains generated by the recognition at fair
value less cost to sell of non- harvested rice as of the year-end, from zero in 2008
to $6.8 million in 2009, due to better weather conditions by the end of 2009, which
resulted in an increase in the area of non-harvested rice attaining significant
biological transformation as of the end of the period, from zero hectares in 2008 to
11,185 hectares in 2009.
    
    Of the $7.9 million of initial recognition and changes in fair value of
biological assets and agricultural produce for 2008, there was zero unrealized
portion, as compared to the $6.8 million unrealized portion of the $12.2 million of
initial recognition and changes in fair value of biological assets and agricultural
produce in 2009;
    
    a $0.9 increase in our Cattle segment mainly due to a 12.0% increase in
the average market price of cattle; and
    
    a $0.7 million increase in our Dairy segment mainly due to a 26.5%
decrease in actual production costs, from $23.0 cents per liter in 2008 to $16.9 cents
per liter in 2009, primarily as a result of a decrease in feeding expenses;
 partially offset by:
 
    
    a $21.4 million decrease in our Crops segment mainly due to:
 
    
    a $25.6 million decrease in the recognition at fair value less cost to
sell of crops at the point of harvest, from $27.7 million to $2.1 million, mainly
due to (i) lower crop yields, which were impacted by the drought, and (ii) higher
actual production costs, primarily due to higher fertilizer and agrochemical
prices, partially offset by a 36.0% increase in the production area, from 77,221
hectares in 2008 to 104,986 hectares in 2009. The resulting actual margin per
hectare for our summer crops (i.e., soybean, corn, sunflower and cotton) decreased
from $364.5 per hectare in 2008 to $10.9 per hectare in 2009; and
    
    a $4.1 million increase in the recognition at fair value less cost to
sell for non-harvested crops as of year-end, from $0.3 million in 2008 to $4.4
million in 2009, due to better weather conditions by the end of 2009, which
resulted in an increase in the area of non-harvested crops attaining significant
biological transformation as of the end of the period, from 8,899 hectares in 2008
to 22,967 hectares in 2009.
 115




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##### Table of Contents



Year Ended December 31,2009
    
    
    2008
    
    
    % Change(In $ per hectare)Corn
    
    
    363.9
    
    
    
    357.1
    
    
    
    18.2
    %Soybean
    
    
    295.6
    
    
    
    266.1
    
    
    
    11.1
    %Soybean (second harvest)
    
    
    202.7
    
    
    
    158.5
    
    
    
    27.9
    %Cotton
    
    
    1,768.1
    
    
    
    1,151.2
    
    
    
    53.6
    %Wheat
    
    
    254.8
    
    
    
    217.7
    
    
    
    36.7
    %
 
    
    Of the $28.0 million of initial recognition and changes in fair value of
biological assets and agricultural produce for 2008, $0.3 million represents the
unrealized portion, as compared to the $4.4 million unrealized portion of the $6.6
million of initial recognition and changes in fair value of biological assets and
agricultural produce in 2009;
    
    a $20.7 million decrease in our Coffee segment due to:
    
    a $4.7 million decrease in the recognition at fair value less cost to sell
of coffee at the point of harvest, from a gain of $1.1 million in 2008 to a loss of
$3.6 million in 2009, due to (i) a 22.5%
    
    decrease in yields obtained, from 2.3 tons per hectare in 2008 to 1.8 tons
per hectare in 2009, due to unusually heavy rains at the moment of harvest, which
spoil the unharvested beans, and (ii) a 37.4% decrease in the actual price of coffee
at the point of harvest, from $2,419 per ton in 2008 to $1,515 per ton in 2009, as
result of lower market prices and lower quality of harvested coffee beans, which were
affected by the rains; and
    
    a $16.0 million decrease in the recognition at fair value less cost to
sell of non-harvested coffee, from a gain of $3.3 million in 2008 to a loss of $12.7
million in 2009, mainly generated by a reduction of the area to be harvested in the
short term as a result of the adoption of a more extensive pruning plan necessary to
correct the growth pattern of our coffee trees, which impacted the production
estimates used in the DCF model used to determine the fair value of our coffee
plantations. The change in the production estimates resulted in a decrease in the fair
value of our coffee plantations, from $15,938 per hectare in 2008 to $13,256 per
hectare in 2009.
    
    Of the $4.5 million loss in initial recognition and changes in fair value
of biological assets and agricultural produce for 2008, $3.3 million represents the
unrealized portion of the loss, as compared to the $15.7 million unrealized portion of
the $16.2 million of initial recognition and changes in fair value of biological
assets and agricultural produce in 2009.
 Changes in Net Realizable Value of Agricultural Produce after Harvest
 Sugar, EthanolCrops
    
    
    Rice
    
    
    Dairy
    
    
    Coffee
    
    
    Cattle
    
    
    and Energy
    
    
    Total(In thousands of $)2009
    
    
    11,362
    
    
    
    191
    
    
    
    N/A
    
    
    
    1,234
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    12,7872008
    
    
    2,211
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    (950
    )
    
    
    N/A
    
    
    
    N/A
    
    
    
    1,261
 i.e.
 116




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##### Table of Contents



General and Administrative Expenses
 Sugar, EthanolCrops
    
    
    Rice
    
    
    Dairy
    
    
    Coffee
    
    
    Cattle
    
    
    and Energy
    
    
    Corporate
    
    
    Total(In thousands of $)2009
    
    
    6,280
    
    
    
    2,883
    
    
    
    2,221
    
    
    
    2,126
    
    
    
    2,909
    
    
    
    13,922
    
    
    
    22,052
    
    
    
    52,3932008
    
    
    3,885
    
    
    
    398
    
    
    
    1,835
    
    
    
    3,308
    
    
    
    2,206
    
    
    
    12,646
    
    
    
    21,355
    
    
    
    45,633
  Selling Expenses
 Sugar, EthanolCrops
    
    
    Rice
    
    
    Dairy
    
    
    Coffee
    
    
    Cattle
    
    
    and Energy
    
    
    Total(In thousand of $)2009
    
    
    1,587
    
    
    
    7,485
    
    
    
    777
    
    
    
    1,353
    
    
    
    1,045
    
    
    
    18,922
    
    
    
    31,1692008
    
    
    3,959
    
    
    
    7,647
    
    
    
    967
    
    
    
    902
    
    
    
    473
    
    
    
    10,548
    
    
    
    24,496
  Other Operating Income, Net
 Sugar,Ethanoland
    
    
    LandCrops
    
    
    Rice
    
    
    Dairy
    
    
    Coffee
    
    
    Cattle
    
    
    Energy
    
    
    Transformation
    
    
    Corporate
    
    
    Total(In thousands of $)2009
    
    
    4,776
    
    
    
    (942
    )
    
    
    (108
    )
    
    
    806
    
    
    
    377
    
    
    
    (10,467
    )
    
    
    18,839
    
    
    
    (210
    )
    
    
    13,0712008
    
    
    4,824
    
    
    
    29
    
    
    
    18
    
    
    
    (27
    )
    
    
    16
    
    
    
    211
    
    
    
    13,974
    
    
    
    (1,722
    )
    
    
    17,323
  
    
    a $10.7 million decrease in our Sugar, Ethanol and Energy segment due to
the mark-to-market effect of future sales contracts for sugar. For further detail, see
Critical Accounting Policies and Estimates  Biological Assets and Agricultural
Produce to our consolidated financial statements;
 117




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##### Table of Contents




    
    a $1.0 million decrease in our Rice segment mainly due to the recognition
of a one-time loss on the sale of old equipment in 2009;
 partially offset by:
 
    
    a $4.9 million increase in our Land Transformation segment due to the sale
of a farmland in December 2009, which resulted in a $18.8 million gain, compared to
the sale of a farmland in May 2008, which generated a $14.0 million gain;
    
    a $0.8 million increase in our Coffee segment due to the mark-to-market
effect of outstanding hedging positions that resulted in a gain in 2009; and
    
    a $0.4 million increase in our Cattle segment due to the collection of
government production subsidies in 2009.
 Excess of Fair Value of Net Assets Acquired over Cost
  Share of Loss of Joint Ventures
  Financial Results, Net
  Income Tax Benefit
   (Loss)/Profit for the Year
  118




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##### Table of Contents



B. LIQUIDITY AND CAPITAL RESOURCES
  
    
    our ability to generate cash flows from our operations;
    
    the level of our outstanding indebtedness and the interest that we are
obligated to pay on such outstanding indebtedness;
    
    our capital expenditure requirements, which consist primarily of investments in
new farmland, in our operations, in equipment and plant facilities and maintenance
costs; and
    
    our working capital requirements.
   Years ended December 31 2010, 2009 and 2008
  Year ended December 31,2010
    
    
    2009
    
    
    2008Cash and cash equivalent at the beginning of the year
    
    
    74,806
    
    
    
    93,360
    
    
    
    70,686Cash generated from (used in) operating activities
    
    
    26,938
    
    
    
    (45,807
    )
    
    
    (21,427
    )Net cash used in investing activities
    
    
    (111,725
    )
    
    
    (114,386
    )
    
    
    (188,515
    )Cash generated by Financial activities
    
    
    79,828
    
    
    
    156,047
    
    
    
    213,200Effect of exchange rate changes on cash
    
    
    423
    
    
    
    (14,408
    )
    
    
    19,416Cash and cash equivalent at the end of the year
    
    
    70,269
    
    
    
    74,806
    
    
    
    93,360
 Operating Activities
 Year ended December 31, 2010
   119




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##### Table of Contents



Year ended December 31 2009
    Year ended December 31 2008
  120




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##### Table of Contents



Investing Activities
 Year ended December 31 2010
  Year ended December 31 2009
  Year ended December 31 2008
  Financing Activities
 Year ended December 31 2010
  Year ended December 31 2009
  121




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##### Table of Contents



Year ended December 31 2008
  Cash and Cash Equivalents
   Projected Sources and Uses of Cash
  
    
    operating cash flow;
    
    debt financing;
    
    the dispositions of transformed farmland and/or subsidiaries; and
    
    debt or equity offerings.
 We anticipate that we will use our cash:
 
    
    for other working capital purposes;
    
    to meet our budgeted capital expenditures;
    
    to make investment in new projects related to our business; and
    
    to refinance our current debts.
 122




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##### Table of Contents



Indebtedness and Financial Instruments
  As of December 31,2010
    
    
    2009
    
    
    2008
    
    
    2007(In thousands is of $)Fixed rate:Less than 1 year(l)
    
    
    52,326
    
    
    
    30,579
    
    
    
    95,209
    
    
    
    59,880Between 1 and 2 years
    
    
    22,425
    
    
    
    5,724
    
    
    
    678
    
    
    
    2,359Between 2 and 3 years
    
    
    7,661
    
    
    
    5,173
    
    
    
    191
    
    
    
    311Between 3 and 4 years
    
    
    7,394
    
    
    
    5,167
    
    
    
    127
    
    
    
    269Between 4 and 5 years
    
    
    5,920
    
    
    
    5,167
    
    
    
    
    
    
    
    184More than 5 years
    
    
    22,555
    
    
    
    5,167
    
    
    
    
    
    
    
    Total fixed rate:
    
    
    118,281
    
    
    
    56,977
    
    
    
    96,205
    
    
    
    63,003Variable rate:Less than 1 year(l)
    
    
    86,107
    
    
    
    72,391
    
    
    
    128,378
    
    
    
    36,536Between 1 and 2 years
    
    
    70,905
    
    
    
    68,667
    
    
    
    703
    
    
    
    12,886Between 2 and 3 years
    
    
    54,436
    
    
    
    55,907
    
    
    
    703
    
    
    
    11,569Between 3 and 4 years
    
    
    17,506
    
    
    
    49,511
    
    
    
    249
    
    
    
    11,569Between 4 and 5 years
    
    
    15,619
    
    
    
    787
    
    
    
    41
    
    
    
    10,918More than 5 years
    
    
    26,170
    
    
    
    1,621
    
    
    
    1,152
    
    
    
    10,963Total variable rate:
    
    
    270,743
    
    
    
    248,884
    
    
    
    131,226
    
    
    
    94,441Total:
    
    
    389,024
    
    
    
    305,861
    
    
    
    227,431
    
    
    
    157,744
 
 (1)
    
    The Company plans to partially rollover its short term debt using new available lines of
credit, or on using operating cash flow to cancel such debt.   123




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##### Table of Contents



 Syndicated Loan and BNDES Loan Facility
    2010
    
    2011
    
    2012 to 2013
    
    2014 to 2018Financial ratios:Debt Service Coverage Ratio (individual)
    
    > 0.65
    
    > 1.00
    
    > 1.00
    
    > 1.30Liquidity Ratio (individual)
    
    > 1.00
    
    > 1.00
    
    > 1.00
    
    > 1.00Liquidity Ratio (aggregate)
    
    > 0.65
    
    > 1.00
    
    > 1.20
    
    > 1.20Interest Coverage Ratio (aggregate)
    
    > 2.00
    
    > 2.00
    
    > 4.00
    
    > 4.00Net Bank Debt / EBITDA (aggregate)
    
    < 5.50
    
    < 3.00
    
    < 3.00
    
    < 3.00
 IDB Facility
    124




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##### Table of Contents



2011
    
    
    2012
    
    
    2013Financial ratios:Total Debt (aggregate) (in millions of $)(i)
    
    
    <115,000/120,000
    
    
    
    <115,000/120,000
    
    
    
    <115,000/120,000Capital Expenditures (aggregate) (in
millions of $)(ii)
    
    
    <20,000
    
    
    
    <15,000
    
    
    
    <15,000Debt to EBITDA (aggregate)
    
    
    <4.75
    
    
    
    <4.25
    
    
    
    <3.75Total Liabilities to Total Equity (aggregate)
    
    
    <1.50
    
    
    
    <1.30
    
    
    
    <1.30Current Asset to Current Liabilities
(aggregate)(iii)
    
    
    >1.10/1.30
    
    
    
    >1.10/1.30
    
    
    
    >1.10/1.30Interest Coverage (aggregate)
    
    
    >2.10
    
    
    
    >2.35
    
    
    
    >2.60Debt to Equity (aggregate)
    
    
    <1.20
    
    
    
    <1.20
    
    
    
    <1.20Short-Term Debt to Total Debt (aggregate)(iv)
    
    
    <0.50
    
    
    
    <0.50
    
    
    
    <0.50Debt to Equity (individual)
    
    
    <1.5
    (v)
    
    
    <1.20
    
    
    
    <1.20
 
 (i)
    
    From 2011 onwards, for the first, second and third financial quarters Total Debt must not
exceed 115,000. For the fourth financial quarter Total Debt must not exceed 120,000. Total
debt may exceed these amounts in any financial quarter provided that our Debt to EBITDA ratio
does not exceed 3.5:1.0.(ii)
    
    The $15 million Debt limit may be exceeded to the extent that the additional purchases or
capital expenditures are financed with equity contributions received during the same twelve
month period.(iii)
    
    From 2011 onwards, for the first, second and third financial quarters the ratio is >1.10,
and for the fourth quarter the ratio is >1.30.(iv)
    
    Measured annually.(v)
    
    Covenant redefined according to the March 24, 2011 amendment.  125




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BDB Facility
  Financial Ratios
    
    2010 to 2013
    
    
    2014 to 2020Debt Service Coverage Ratio (individual)
    
    
    >1.00
    
    
    
    >1.30Liquidity Ratio (individual)
    
    
    >1.00
    
    
    
    >1.00
 DB Facility
  Financial Ratios
    
    2010
    
    
    2011
    
    
    2012Interest Coverage Ratio (individual)
    
    
    >1.65
    
    
    
    >3.10
    
    
    
    >3.50Leverage Ratio (individual)
    
    
    <8.50
    
    
    
    <3.40
    
    
    
    <2.50Capital Expenditures (individual) (in millions of R$)
    
    
    <154.00
    
    
    
    <50.00
    
    
    
    <50.00
  Short-term Debt.
  126




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##### Table of Contents



Capital Expenditure Commitments
    2011 to 2013(In thousands of $)Farming
    
    240,536Sugar, Ethanol and Energy
    
    596,899Total
    
    837,435
   
 C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.
  Instituto Nacional de Semillas Registro Nacional de la Propiedad de Cultivares
 127




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##### Table of Contents



D. TREND INFORMATION
  
 E. OFF-BALANCE SHEET ARRANGEMENTS
  
 F. TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS
  Less Than
    
    
    One to
    
    
    Three toOne Year
    
    
    Three Years
    
    
    Five Years
    
    
    Thereafter
    
    
    Total(In millions of $)Bank loans(l)(2)
    
    
    168.4
    
    
    
    189.7
    
    
    
    60.3
    
    
    
    57.0
    
    
    
    475.3Leases
    
    
    21.3
    
    
    
    9.4
    
    
    
    26.2
    
    
    
    19.8
    
    
    
    76.7Acquisition of subsidiaries
    
    
    5.8
    
    
    
    5.8
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    189.7
    
    
    
    199.0
    
    
    
    86.5
    
    
    
    76.8
    
    
    
    552.0
 
 (1)
    
    Includes interest.(2)
    
    As of December 31, 2010, we entered into two new loans
facilities with Banco do Brasil S.A. and Deutsche Bank AG London Branch. 
 G. SAFE HARBOR
  128




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##### Table of Contents



Item 6. Directors, Senior Management and Employees
 
 A. DIRECTORS AND SENIOR MANAGEMENT
 Board of Directors
  Date ofName
    
    Position
    
    Appointment
    
    Age
    
    Initial TermAbbas Farouq Zuaiter
    
    Chairman
    
    
    2011
    
    
    
    43
    
    
    1 yearAlan Leland Boyce
    
    Director
    
    
    2011
    
    
    
    51
    
    
    2 yearsGuillaume van der Linden
    
    Director
    
    
    2011
    
    
    
    52
    
    
    1 yearPaulo Albert Weyland Vieira
    
    Director
    
    
    2011
    
    
    
    45
    
    
    2 yearsMariano Bosch
    
    Director
    
    
    2011
    
    
    
    41
    
    
    3 yearsPlínio Musetti
    
    Director
    
    
    2011
    
    
    
    57
    
    
    3 yearsMark Schachter
    
    Director
    
    
    2011
    
    
    
    32
    
    
    1 yearJulio Moura Neto
    
    Director
    
    
    2011
    
    
    
    59
    
    
    3 yearsAndrés Velasco Brañes
    
    Director
    
    
    2011
    
    
    
    50
    
    
    2 years
  Abbas (Eddy) Farouq Zuaiter.
 Alan Leland Boyce.
 Guillaume van der Linden.
 Paulo Albert Weyland Vieira.
 129




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##### Table of Contents



Mariano Bosch. Producir Conservando
 Plínio Musetti.
 Mark Schachter.
 Julio Moura Neto.
 130




---



##### Table of Contents



Andres Velasco Brañes.
 Executive Officers
  YearName
    
    Position
    
    Designated
    
    AgeMariano Bosch
    
    Chief Executive Officer
    
    
    2002
    
    
    
    41Carlos A. Boero Hughes
    
    Chief Financial Officer
    
    
    2008
    
    
    
    45Emilio F. Gnecco
    
    Chief Legal Officer
    
    
    2005
    
    
    
    35Walter Marcelo Sanchez
    
    Chief Commercial Officer
    
    
    2002
    
    
    
    48Mario José Ramón Imbrosciano
    
    Director of Business Development
    
    
    2003
    
    
    
    42Leonardo Berridi
    
    Country Manager for Brazil
    
    
    2004
    
    
    
    51Marcelo Vieira
    
    Director of Sugar and Ethanol Operations
    
    
    2005
    
    
    
    59Ezequiel Garbers
    
    Country Manager for Argentina and Uruguay
    
    
    2003
    
    
    
    45
 Mariano Bosch.
 Carlos A. Boero Hughes.
 131




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##### Table of Contents



Emilio Federico Gnecco.
 Walter Marcelo Sanchez.
 Mario José Ramón Imbrosciano.
 Leonardo Raúl Berridi.
 Marcelo Vieira. Uniäo da Industria de Cana-de-Acucar
 132




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##### Table of Contents



Sociedade Rural Brasileira Sindicato do Acucar de Minas Gerais.
 Ezequiel Garbers.
  
 B. COMPENSATION
 Compensation of Directors and Executive Officers
    
 C. BOARD PRACTICES
  ad nutum
 133




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##### Table of Contents



a.
    
    execute any acts or contracts on our behalf aimed at fulfilling our
corporate purpose, including those for which a special power of attorney is
required;b.
    
    carry out any transactions;c.
    
    agree, establish, authorize and regulate our operations, services and
expenses;d.
    
    delegate special tasks to directors, regulate the formation and
operation of committees and fix the remuneration and compensation of expenses of
advisors and/or staff with special duties, with a charge to overhead;e.
    
    appoint, suspend or remove agents or employees, establish their
duties, remuneration, and bonuses and grant them the powers that it deems
advisable;f.
    
    grant signature authorization to directors and officers, grant
general or special powers of attorney, including those to prosecute;g.
    
    call regular and special shareholders meetings and establish
agendas, submit for the shareholders approval our inventory, annual report,
balance sheet, statement of income and exhibits, propose depreciation,
amortization and reserves that it deems advisable, establish the amount of gains
and losses, propose the distribution of earnings and submit all this to the
shareholders meeting for consideration and resolution;h.
    
    fix the date for the payment of dividends established by the
shareholders meeting and make their payment; andi.
    
    make decisions relating to the issuance, subscription or
payment of shares pursuant to our articles of incorporation and decision of the regular or
special shareholders meetings.
  Audit Committee
   134




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##### Table of Contents



Compensation Committee
  Risk and Commercial Committee
   Strategy Committee
  135




---



##### Table of Contents



D. EMPLOYEES
 Employees
   As of December 31,2010
    
    
    2009
    
    
    2008
    
    
    2007Farming and Land Transformation
    
    
    1,425
    
    
    
    1,231
    
    
    
    1,235
    
    
    
    1,065Sugar and Ethanol
    
    
    3,276
    
    
    
    3,567
    
    
    
    2,848
    
    
    
    2,015Administrative
    
    
    562
    
    
    
    492
    
    
    
    461
    
    
    
    427Total
    
    
    5,263
    
    
    
    5,290
    
    
    
    4,544
    
    
    
    3,507
  Benefits
  
 E. SHARE OWNERSHIP
 Share Ownership
  Share Options and Restricted Share Plan
 Adecoagro/IFH 2004 Stock Incentive Option Plan and Adecoagro/IFH 2007/2008 Equity Incentive Plan
  136




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##### Table of Contents



Administration and Eligibility
   Amendment and Termination
  Granted Options
   Adecoagro S.A. Restricted Share Plan
   137




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##### Table of Contents



Administration and Eligibility
  Terms of Awards
   Amendment and Termination
  Share Options and Restricted Shares
  Number ofPlan under
    
    
    
    
    
    
    ordinarywhich
    
    
    Number of
    
    
    shares to be
    
    
    Exerciseawards
    
    
    restricted
    
    
    issued upon
    
    
    price perwere
    
    
    shares
    
    
    exercise of
    
    
    ordinary
    
    
    Date of
    
    
    Expirationgranted
    
    
    granted
    
    
    options
    
    
    share ($)
    
    
    Grant
    
    
    dateDirectors and
Executive OfficersAbbas Farouq Zuaiter
    
    
    2010
    
    
    
    *
    
    
    
    
    
    
    
    
    
    
    
    5/13/2011
    
    
    
    5/13/2021Alan Leland Boyce
    
    
    2010
    
    
    
    4,937
    
    
    
    
    
    
    
    
    
    
    
    5/13/2011
    
    
    
    5/13/2021Guillaume van der Linden
    
    
    2010
    
    
    
    *
    
    
    
    
    
    
    
    
    
    
    
    5/13/2011
    
    
    
    5/13/2021Paulo Albert Weyland
Vieira
    
    
    2010
    
    
    
    *
    
    
    
    
    
    
    
    
    
    
    
    5/13/2011
    
    
    
    5/13/2021Plínio Musetti
    
    
    2010
    
    
    
    *
    
    
    
    
    
    
    
    
    
    
    
    5/13/2011
    
    
    
    5/13/2021Mark Schachter
    
    
    2010
    
    
    
    *
    
    
    
    
    
    
    
    
    
    
    
    5/13/2011
    
    
    
    5/13/2021Julio Moura Neto
    
    
    2010
    
    
    
    *
    
    
    
    
    
    
    
    
    
    
    
    5/13/2011
    
    
    
    5/13/2021Andrés Velasco Brañes
    
    
    2010
    
    
    
    *
    
    
    
    
    
    
    
    
    
    
    
    5/13/2011
    
    
    
    5/13/2021Mariano Bosch
    
    
    2004
    
    
    
    
    
    
    
    173,236
    
    
    $
    5.82674
    
    
    
    1/05/2004
    
    
    
    1/05/20142004
    
    
    
    
    
    
    
    135,314
    
    
    $
    5.82674
    
    
    
    1/08/2005
    
    
    
    1/08/20152004
    
    
    
    
    
    
    
    28,038
    
    
    $
    5.82674
    
    
    
    1/06/2006
    
    
    
    1/06/20162004
    
    
    
    
    
    
    
    29,504
    
    
    $
    7.10862
    
    
    
    1/06/2006
    
    
    
    1/06/20162004
    
    
    
    
    
    
    
    112,740
    
    
    $
    8.62358
    
    
    
    1/07/2006
    
    
    
    1/07/20162007
    
    
    
    
    
    
    
    112,833
    
    
    $
    12.81883
    
    
    
    11/13/2007
    
    
    
    11/13/20172007
    
    
    
    
    
    
    
    86,306
    
    
    $
    13.40150
    
    
    
    1/30/2009
    
    
    
    1/30/20192010
    
    
    
    47,512
    
    
    
    
    
    
    
    
    
    
    
    4/01/2011
    
    
    
    4/01/20212010
    
    
    
    4,937
    
    
    
    
    
    
    
    
    
    
    
    5/13/2011
    
    
    
    5/13/2021
 138




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##### Table of Contents



Number ofPlan under
    
    
    
    
    
    
    ordinarywhich
    
    
    Number of
    
    
    shares to be
    
    
    Exerciseawards
    
    
    restricted
    
    
    issued upon
    
    
    price perwere
    
    
    shares
    
    
    exercise of
    
    
    ordinary
    
    
    Date of
    
    
    Expirationgranted
    
    
    granted
    
    
    options
    
    
    share ($)
    
    
    Grant
    
    
    dateCarlos A. Boero Hughes
    
    
    2004
    
    
    
    
    
    
    
    *
    
    
    $
    5.82674
    
    
    
    8/25/2008
    
    
    
    8/25/20182004
    
    
    
    
    
    
    
    *
    
    
    $
    7.10862
    
    
    
    8/25/2008
    
    
    
    8/25/20182007
    
    
    
    
    
    
    
    *
    
    
    $
    12.81883
    
    
    
    8/25/2008
    
    
    
    8/25/20182007
    
    
    
    
    
    
    
    *
    
    
    $
    13.40150
    
    
    
    1/30/2009
    
    
    
    1/30/20192010
    
    
    
    *
    
    
    
    
    
    
    
    
    
    
    
    4/01/2011
    
    
    
    4/01/2021Emilio F. Gnecco
    
    
    2004
    
    
    
    
    
    
    
    *
    
    
    $
    5.82674
    
    
    
    1/6/2007
    
    
    
    1/6/20172004
    
    
    
    
    
    
    
    *
    
    
    $
    8.62358
    
    
    
    1/6/2007
    
    
    
    1/6/20172007
    
    
    
    
    
    
    
    *
    
    
    $
    12.81883
    
    
    
    11/13/2007
    
    
    
    11/13/20172007
    
    
    
    
    
    
    
    *
    
    
    $
    13.40150
    
    
    
    1/30/2009
    
    
    
    1/30/20192010
    
    
    
    *
    
    
    
    
    
    
    
    
    
    
    
    4/01/2011
    
    
    
    4/01/2021Walter Marcelo Sanchez
    
    
    2004
    
    
    
    
    
    
    
    *
    
    
    $
    5.82674
    
    
    
    1/5/2004
    
    
    
    1/5/20142004
    
    
    
    
    
    
    
    *
    
    
    $
    5.82674
    
    
    
    1/8/2005
    
    
    
    1/8/20152004
    
    
    
    
    
    
    
    *
    
    
    $
    5.82674
    
    
    
    1/6/2006
    
    
    
    1/6/20162004
    
    
    
    
    
    
    
    *
    
    
    $
    7.10862
    
    
    
    1/6/2006
    
    
    
    1/6/20162004
    
    
    
    
    
    
    
    *
    
    
    $
    8.62358
    
    
    
    1/7/2006
    
    
    
    1/7/20162007
    
    
    
    
    
    
    
    *
    
    
    $
    12.81883
    
    
    
    11/13/2007
    
    
    
    11/13/20172007
    
    
    
    
    
    
    
    *
    
    
    $
    13.40150
    
    
    
    1/30/2009
    
    
    
    1/30/20192010
    
    
    
    *
    
    
    
    
    
    
    
    
    
    
    
    4/01/2011
    
    
    
    4/01/2021Mario
José Ramón Imbrosciano
    
    
    2004
    
    
    
    
    
    
    
    *
    
    
    $
    5.82674
    
    
    
    1/5/2004
    
    
    
    1/5/20142004
    
    
    
    
    
    
    
    *
    
    
    $
    5.82674
    
    
    
    1/8/2005
    
    
    
    1/8/20152004
    
    
    
    
    
    
    
    *
    
    
    $
    5.82674
    
    
    
    1/6/2006
    
    
    
    1/6/20162004
    
    
    
    
    
    
    
    *
    
    
    $
    7.10862
    
    
    
    1/6/2006
    
    
    
    1/6/20162004
    
    
    
    
    
    
    
    *
    
    
    $
    8.62358
    
    
    
    1/7/2006
    
    
    
    1/7/20162007
    
    
    
    
    
    
    
    *
    
    
    $
    12.81883
    
    
    
    11/13/2007
    
    
    
    11/13/20172007
    
    
    
    
    
    
    
    *
    
    
    $
    13.40150
    
    
    
    1/30/2009
    
    
    
    1/30/20192010
    
    
    
    *
    
    
    
    
    
    
    
    
    
    
    
    4/01/2011
    
    
    
    4/01/2021Leonardo Berridi
    
    
    2004
    
    
    
    
    
    
    
    *
    
    
    $
    5.82674
    
    
    
    1/5/2004
    
    
    
    1/5/20142004
    
    
    
    
    
    
    
    *
    
    
    $
    5.82674
    
    
    
    1/8/2005
    
    
    
    1/8/20152004
    
    
    
    
    
    
    
    *
    
    
    $
    5.82674
    
    
    
    1/6/2006
    
    
    
    1/6/20162004
    
    
    
    
    
    
    
    *
    
    
    $
    7.10862
    
    
    
    1/6/2006
    
    
    
    1/6/20162004
    
    
    
    
    
    
    
    *
    
    
    $
    8.62358
    
    
    
    1/7/2006
    
    
    
    1/7/20162007
    
    
    
    
    
    
    
    *
    
    
    $
    12.81883
    
    
    
    11/13/2007
    
    
    
    11/13/20172007
    
    
    
    
    
    
    
    *
    
    
    $
    13.40150
    
    
    
    1/30/2009
    
    
    
    1/30/20192010
    
    
    
    *
    
    
    
    
    
    
    
    
    
    
    
    4/01/2011
    
    
    
    4/01/2021Marcelo Vieira
    
    
    2004
    
    
    
    
    
    
    
    51,487
    
    
    $
    5.82674
    
    
    
    1/2/2006
    
    
    
    1/2/20162004
    
    
    
    
    
    
    
    56,370
    
    
    $
    8.62358
    
    
    
    1/7/2007
    
    
    
    1/7/20172007
    
    
    
    
    
    
    
    102,576
    
    
    $
    12.81883
    
    
    
    11/13/2007
    
    
    
    11/13/20172007
    
    
    
    
    
    
    
    62,818
    
    
    $
    13.40150
    
    
    
    1/30/2009
    
    
    
    1/30/20192010
    
    
    
    23,223
    
    
    
    
    
    
    
    
    
    
    
    4/01/2011
    
    
    
    4/01/2021Ezequiel Garbers
    
    
    2004
    
    
    
    
    
    
    
    *
    
    
    $
    5.82674
    
    
    
    1/5/2004
    
    
    
    1/5/20142004
    
    
    
    
    
    
    
    *
    
    
    $
    5.82674
    
    
    
    1/8/2005
    
    
    
    1/8/20152004
    
    
    
    
    
    
    
    *
    
    
    $
    5.82674
    
    
    
    1/6/2006
    
    
    
    1/6/20162004
    
    
    
    
    
    
    
    *
    
    
    $
    7.10862
    
    
    
    1/6/2006
    
    
    
    1/6/20162004
    
    
    
    
    
    
    
    *
    
    
    $
    8.62358
    
    
    
    1/7/2006
    
    
    
    1/7/20162007
    
    
    
    
    
    
    
    *
    
    
    $
    12.81883
    
    
    
    11/13/2007
    
    
    
    11/13/20172007
    
    
    
    
    
    
    
    *
    
    
    $
    13.40150
    
    
    
    1/30/2009
    
    
    
    1/30/20192010
    
    
    
    *
    
    
    
    
    
    
    
    
    
    
    
    4/01/2011
    
    
    
    4/01/2021Directors and Executive
Officers as a group
    
    
    
    
    
    
    308,810
    (1)
    
    
    2,996,971
    (2)
 
 *
    
    Upon the exercise of all options, would beneficially own less than 1% of total number of
outstanding shares.(1)
    
    Consists of 40,285 vested restricted shares within 60 days of the date of this annual report
and 268,525 unvested restricted shares.(2)
    
    Consists of 2,506,574 options exercisable within 60 days of the date of this annual report and
490,397 unvested options. 139




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##### Table of Contents



Item 7. Major Shareholders and Related Party Transactions
 
 A. MAJOR SHAREHOLDERS
   Number
    
    
    PercentPrincipal Shareholders:Pampas Humedas LLC(l)
    
    
    27,158,693
    
    
    
    22.62HBK Master Fund LP(2)
    
    
    20,471,770
    
    
    
    17.05Stichting Pensioenfonds Zorg en
Welzijn(3)
    
    
    15,307,824
    
    
    
    12.75Al Gharrafa
Investment Company(4)
    
    
    12,562,906
    
    
    
    10.46Ospraie Special Opportunities
Master Holdings Ltd.(5)
    
    
    10,818,025
    
    
    
    9.01Directors and Executive OfficersAbbas Farouq Zuaiter
    
    
    *
    
    
    
    *Alan Leland Boyce
    
    
    1,030,310
    
    
    
    0.86Guillaume van der Linden
    
    
    
    
    
    
    Paulo Albert Weyland Vieira
    
    
    *
    
    
    
    *Mariano
Bosch(6)
    
    
    737,555
    
    
    
    0.61Plínio Musetti
    
    
    *
    
    
    
    *Mark Schachter
    
    
    
    
    
    
    Julio Moura Neto
    
    
    
    
    
    
    Andrés Velasco Brañes
    
    
    
    
    
    
    Carlos A. Boero Hughes
    
    
    *
    
    
    
    *Emilio F. Gnecco
    
    
    *
    
    
    
    *Walter Marcelo Sanchez
    
    
    *
    
    
    
    *Mario José Ramón Imbrosciano
    
    
    *
    
    
    
    *Leonardo Berridi
    
    
    *
    
    
    
    *Marcelo
Vieira(7)
    
    
    1,040,760
    
    
    
    0.87Ezequiel Garbers
    
    
    *
    
    
    
    *Directors and Executive Officers
as a group
    
    
    5,079,230
    
    
    
    4.11
 140




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##### Table of Contents



*
    
    Beneficially owns less than 1% based on the total number of
outstanding shares.(1)
    
    The address of Pampas Húmedas LLC is c/o Soros Fund Management LLC 888 Seventh Avenue, New
York, NY 10106.(2)
    
    The address of HBK Master Fund LP is Maples Corporate Services Ltd.: PO BOX 309, Ugland House,
George Town, Grand Cayman KY1-1104, Cayman Islands / Notice Address: HBK Master Fund L.P. %HBK
Services LLC, Attn: Legal department, 2101 Cedar Spring Road, Suite 700, Dallas TX 75201, USA.
Includes 7,377,598 common shares we issued and sold to Al Gharrafa at a purchase price of $10.65
per share, pursuant to an agreement entered into on January 6, 2011. See exhibit 4.28.(3)
    
    Includes the purchase of
4,500,000 shares by Stichting, Pensioenfonds Zorg en Welzijn in our IPO. The address
 of Stichting Pensioenfonds Zorg en Welzijn is P.O. BOX 4001 NL-3700 KA Zeist The
Netherlands.(4)
    

    The address of Al Gharrafa Investment Company is Walker House, 87 Main Street, George Town, Grand Cayman,
KY1-9005, Cayman Islands.(5)
    
Reflects beneficial ownership of Ospraie Special
Opportunities Master Holdings Ltd. as of  February
3, 2011, including the purchase of 1,450,000 shares by Ospraie
Special Opportunities Master Holdings Ltd. and its affiliates in our
IPO. The address of Ospraie Special Opportunities Master Holdings Ltd. is Ospraie Advisors
L.P.: 320 Park Avenue, 27th floor, New York, NY 10022, USA.(6)
    
    Includes 606,609 shares issuable upon exercise of options held by Mr. Bosch that are
exercisable within 60 days of March 31, 2011. See Item 6. Directors, Senior
Management and EmployeesE. Share OwnershipShare Options and Restricted Share Plan.(7)
    
    Includes 216,198 shares issuable upon exercise of options held by Mr. Vieira that are
exercisable within 60 days of March 31, 2011. Mr. Vieira is the owner of
Liuede Holdings Ltd. See Item 6. Directors, Senior Management and EmployeesE. Share
OwnershipShare Options and Restricted Share Plan.  
 B. RELATED PARTY TRANSACTIONS
 Share Purchase and Sale Agreement and UMA Right of First Offer Agreement
   141




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Milk Supply Agreement
  Agriculture Partnership Agreements
  Registration Rights Agreement
  Ospraie Consent Agreement
  142




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C. INTERESTS OF EXPERTS AND COUNSEL
  
 Item 8. Financial Information
 
 A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION.
  Legal and Administrative Proceedings
   Dividend Policy
 pari passu
    
 B. SIGNIFICANT CHANGES
  143




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##### Table of Contents



Item 9. The Offer and Listing
 
 A. OFFER AND LISTING DETAILS
   Price per ShareFull financial Quarters Since Listing
    
    High
    
    
    LowFirst quarter
    
    
    13.50
    
    
    
    11.99
 Price per ShareLast Six Months
    
    High
    
    LowJanuary 2011
    
    
    12.60
    
    
    
    12.00February 2011
    
    
    13.50
    
    
    
    11.99March 2011
    
    
    13.48
    
    
    
    12.36April 2011
    
    
    13.47
    
    
    
    12.34May 2011
    
    
    12.62
    
    
    
    10.27June 1 to
June 27
    
    
    12.70
    
    
    
    11.49
 
 B. PLAN OF DISTRIBUTION
  
 C. MARKETS
  
 D. SELLING SHAREHOLDERS
  
 E. DILUTION
  
 F. EXPENSES OF THE ISSUE
  
 Item 10. Additional Information
 
 A. SHARE CAPITAL
  
 B. MEMORANDUM AND ARTICLES OF ASSOCIATION
  144




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##### Table of Contents



General
 société anonyme
        Share Capital
   145




---



##### Table of Contents



Form and Transfer of shares
    146




---



##### Table of Contents



Issuance of Shares
     Preemptive Rights
  147




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##### Table of Contents



Repurchase of Shares
   
    
    the prior authorization of the general meeting of shareholders (at the quorum
and majority for ordinary resolutions), which authorization sets forth the terms
and conditions of the proposed repurchase and in particular the maximum number of shares to be repurchased, the duration of the period for which the authorization
is given (which may not exceed five years) and, in the case of repurchase for
consideration, the minimum and maximum consideration per share, must have been
obtained;
    
    the repurchase may not reduce our net assets on a non-consolidated basis to a
level below the aggregate of the issued share capital and the reserves that we
must maintain pursuant to Luxembourg law or its articles of incorporation; and
    
    only fully paid up shares may be repurchased.
        148




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Capital Reduction
  General Meeting of Shareholders
        149




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##### Table of Contents



Voting Rights
    Ordinary General Meetings of Shareholders
 Extraordinary General Meetings of Shareholders
  Appointment and Removal of Directors
 150




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##### Table of Contents



Amendment to the Articles of Incorporation
    Merger and Division
  Liquidation
  No Appraisal Rights
  Distributions
   151




---



##### Table of Contents



Annual Accounts
   Information Rights
    Board of Directors
  ad nutum
   152




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##### Table of Contents



153




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##### Table of Contents



Transfer Agent and Registrar
  
 C. MATERIAL CONTRACTS
  
 D. EXCHANGE CONTROLS
 Foreign Exchange Controls
 Mercado Único y Libre de Cambios
  atesoramiento
  154




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e.g.
     i.e.
 155




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##### Table of Contents



bienes de uso gastos de investigation prospección y exploration activos intangibles bienes de cambio
  
 E. TAXATION
 Material Luxembourg Tax Considerations for Holders of Shares
   impôt sur le revenu impôt sur le revenu des collectivités
 156




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Tax regime applicable to realized capital gains
 Luxembourg Holders
 Luxembourg resident individual holders
    Luxembourg resident corporate holders
  Non-Luxembourg Holders
    157




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##### Table of Contents



Tax regime applicable to distributions
 Withholding tax
   Luxembourg Holders
  Net wealth tax
 Luxembourg Holders
  Bewertungsgesetz
 Non-Luxembourg Holders
  Stamp and registration taxes
  158




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##### Table of Contents



Estate and gift taxes
  United States Federal Income Taxation of the Company
     Material U.S. Federal Income Tax Considerations for U.S. Holders
  159




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##### Table of Contents




    
    insurance companies;
 
    
    tax-exempt organizations;
 
    
    brokers or dealers in securities or currencies and traders in securities that
elect to mark to market;
 
    
    certain financial institutions;
 
    
    partnerships or other pass-through entities;
 
    
    holders whose functional currency for U.S. federal income tax purposes is not
the U.S. dollar;
 
    
    U.S. expatriates;
 
    
    holders that hold our common shares as part of a hedge, straddle or conversion
or other integrated transaction; or
 
    
    holders that own, directly, indirectly, or constructively, 10% or more of the
total combined voting power of our common shares.
   
    
    an individual who is a citizen or resident of the United States;
 
    
    a corporation, or any other entity taxable as a corporation, created or
organized in or under the laws of the United States or any State thereof,
including the District of Columbia;
 
    
    an estate, the income of which is subject to U.S. federal income taxation
regardless of its source;
 
    
    a trust (a) if a court within the United States is able to exercise primary
supervision over its administration and one or more U.S. persons have the
authority to control all of its substantial decisions or (b) that has a valid
election in effect under applicable Treasury regulations to be treated as a U.S.
person.
  160




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Passive Foreign Investment Company (PFIC) Rules
    Dividends
     161




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##### Table of Contents



Taxation of Capital Gains
  i.e.
 Backup Withholding and Information Reporting
   162




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##### Table of Contents



F. DIVIDENDS AND PAYING AGENTS
  
 G. STATEMENT BY EXPERTS
  
 H. DOCUMENTS ON DISPLAY
  
 I. SUBSIDIARY INFORMATION
  
 Item 11. Quantitative and Qualitative Disclosures About Market Risk
  
 Item 12. Description of Securities Other than Equity Securities
 
 A. DEBT SECURITIES
  
 B. WARRANTS AND RIGHTS
  
 C. OTHER SECURITIES
  
 D. AMERICAN DEPOSITORY SHARES
  163




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##### Table of Contents



PART II
 
 Item 13. Defaults, Dividend Arrearages and Delinquencies
  
 Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
  
 Item 15. Controls and Procedures
 Disclosure Controls and Procedures
  Managements Annual Report on Internal Control over Financial Reporting and Attestation Report of
the Registered Public Accounting Firm
  Changes in internal control over financial reporting
  
 Item 16A. Audit Committee Financial Expert
  
 Item 16B. Code of Ethics
 www.adecoagro.com
 
 Item 16C. Principal Accountant Fees and Services
  For the year endedDecember 31,(in thousands of $)2009
    
    
    2010Audit Fees (1)
    
    
    619
    
    
    
    705Audit- Related Fees (2)
    
    
    304
    
    
    
    1,444Total
    
    
    923
    
    
    
    2,149
 164




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##### Table of Contents



(1)
    
    Audit fees means the aggregate fees billed for professional services rendered by
our principal auditors for the audit of our annual financial
statements.(2)
    
    Audit-related fees represents aggregate fees billed for professional services rendered by our
principal auditors for the assurance and related services, as well as in connection
with audit related services for SEC or other regulatory filings, including the IPO. Audit
Committee Approval Policies and Procedures
   
 Item 16D. Exemptions from the Listing Standards for Audit Committees
  
 Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
  
 Item 16F. Change in Registrants Certifying Accountant
   
 Item 16G. Corporate Governance
  Non-management Directors Meetings
  Communication with Non-Management Directors
 th
 165




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##### Table of Contents



Audit Committee
   Standards for Evaluating Director Independence
  Audit Committee Responsibilities
   Shareholder Voting on Equity Compensation Plans
  166




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##### Table of Contents



Disclosure of Corporate Governance Guidelines
  Code of Business Conduct and Ethics
   Chief Executive Officer Certification
  167




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##### Table of Contents



PART III
 
 Item 17. Financial Statements
  
 Item 18. Financial Statements.
  
 Item 19. Exhibits
 Exhibit Number
    
    Description1.1
    
    Amended and Restated Articles of Association of Adecoagro S.A. dated February 24, 2011.4.1
    
    Loan Agreement, dated December 19, 2008, between Adeco Agropecuaria S.A., Pilagá
S.R.L. and Inter-American Development Bank, previously filed as exhibit 10.1 to the
Companys registration statement on Form F-1 (File No. 333-171683) filed with the
Securities and Exchange Commission on January 13, 2011 (Form F-1) and incorporated
by reference herein.4.2
    
    First Amendment Offer to Loan Agreement, dated February 20, 2009, between Adeco
Agropecuaria S.A., Pilagá S.R.L. and Inter-American Development Bank, previously filed
as exhibit 10.2 to the Companys registration statement on Form F-1 and incorporated
by reference herein.4.3
    
    Second Amendment Offer to Loan Agreement, dated March 24, 2011, between Adeco
Agropecuaria S.A., Pilagá S.R.L. and Inter-American Development Bank.4.4
    
    Second Amendment Offer to Loan Agreement, dated December 29, 2009, between Adeco
Agropecuaria S.A., Pilagá S.R.L. and Inter-American Development Bank, previously filed
as exhibit 10.3 to the Companys registration statement on Form F-1 and incorporated
by reference herein.4.5
    
    Third Waiver Request to Loan Agreement, dated March 30, 2010, between Adeco
Agropecuaria S.A., Pilagá S.R.L. and Inter-American Development Bank, previously filed
as exhibit 10.4 to the Companys registration statement on Form F-1 and incorporated
by reference herein.4.6
    
    Fourth Amendment Offer to Loan Agreement, dated May 14, 2010, between Adeco
Agropecuaria S.A., Pilagá S.R.L. and Inter-American Development Bank, previously filed
as exhibit 10.5 to the Companys registration statement on Form F-1 and incorporated
by reference herein.4.7
    
    Senior Secured Loan Facility, dated July 28, 2010, between Angélica Agroenergia Ltda.
and Deutsche Bank AG, London Branch, previously filed as exhibit 10.6 to the Companys
registration statement on Form F-1 and incorporated by reference herein.4.8
    
    Export Prepayment Financing Agreement, dated July 13, 2007, between Angélica
Agroenergia Ltda. and a syndicate of banks, previously filed as exhibit 10.7 to the
Companys registration statement on Form F-1 and incorporated by reference herein.4.9
    
    First Amendment to Export Prepayment Financing Agreement, dated March 4, 2010, between
Angélica Agroenergia Ltda. and a syndicate of banks, previously filed as exhibit 10.8
to the Companys registration statement on Form F-1 and incorporated by reference
herein.4.10
    
    English translation of Financing Agreement through BNDES Repasse, dated February 1,
2008, between Adeco Brasil Participações S.A. and a syndicate of banks, previously
filed as exhibit 10.9 to the Companys registration statement on Form F-1 and
incorporated by reference herein.4.11
    
    English translation of First Amendment to Financing Agreement BNDES Repasse, dated
July 1, 2008, between Angélica Agroenergia Ltda. and a syndicate of banks, previously
filed as exhibit 10.10 to the Companys registration statement on Form F-1 and
incorporated by reference herein.
 168




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##### Table of Contents



Exhibit Number
    
    Description4.12
    
    English translation of Second Amendment to Financing Agreement BNDES Repasse, dated
March 4, 2010, between Angélica Agroenergia Ltda. and a syndicate of banks, previously
filed as exhibit 10.11 to the Companys registration statement on Form F-1 and
incorporated by reference herein.4.13
    
    English translation of Credit Facility, dated July 30, 2010, between Angélica
Agroenergia Ltda. and Banco do Brasil S.A., previously filed as exhibit 10.12 to the
Companys registration statement on Form F-1 and incorporated by reference herein.4.14
    
    Unit Issuance Agreement, dated February 16, 2006, between International Farmland
Holdings LLC and Usina Monte Alegre S.A., previously filed as exhibit 10.13 to the
Companys registration statement on Form F-1 and incorporated by reference herein.4.15
    
    Share Purchase and Sale Agreement, dated February 16, 2006, between International
Farmland Holdings LLC and Usina Monte Alegre S.A., previously filed as exhibit 10.14
to the Companys registration statement on Form F-1 and incorporated by reference
herein.4.16
    
    Right of First Offer Agreement, dated February 16, 2006, between International
Farmland Holdings LLC and Usina Monte Alegre S.A., previously filed as exhibit 10.15
to the Companys registration statement on Form F-1 and incorporated by reference
herein.4.17
    
    Supply Offer Letter for milk, dated November 7, 2007, between La Lácteo S.A. and Adeco
Agropecuaria S.R.L., previously filed as exhibit 10.16 to the Companys registration
statement on Form F-1 and incorporated by reference herein.4.18
    
    Amendment to Supply Offer Letter for milk, dated February 1, 2010, between La Lácteo
S.A. and Adeco Agropecuaria S.R.L., previously filed as exhibit 10.17 to the Companys
registration statement on Form F-1 and incorporated by reference herein.4.19
    
    Commercial Contract for sugar, dated March 23, 2010, between Angélica Agroenergia
Ltda. and Bunge International Commerce Ltd., previously filed as exhibit 10.18 to the
Companys registration statement on Form F-1 and incorporated by reference herein.4.20
    
    Amendment to Commercial Contract for sugar, dated June 17, 2010, between Angélica
Agroenergia Ltda. and Bunge International Commerce Ltd., previously filed as exhibit
10.19 to the Companys registration statement on Form F-1 and incorporated by
reference herein.4.21
    
    English translation of Consignment Contract, dated February 19, 2000, between Molinos
Ala S.A. (currently Pilagá S.R.L.) and Establecimiento Las Marías S.A.C.I.F.A.,
previously filed as exhibit 10.20 to the Companys registration statement on Form F-1
and incorporated by reference herein.4.22
    
    English translation of Sale Agreement, dated July 8, 2009, between Pilagá S.R.L. and
Galicia Warrants S.A., previously filed as exhibit 10.21 to the Companys registration
statement on Form F-1 and incorporated by reference herein.4.23
    
    English translation of Mortgage, dated July 8, 2009, between Pilagá S.R.L. and Galicia
Warrants S.A., previously filed as exhibit 10.22 to the Companys registration
statement on Form F-1 and incorporated by reference herein.4.24
    
    English translation of Reserve Power Agreement, dated February 6, 2009, between
Angélica Agroenergia Ltda. and Câmara de Comercialização de Energia Elétrica,
previously filed as exhibit 10.23 to the Companys registration statement on Form F-1
and incorporated by reference herein.4.25
    
    English translation of Energy Purchase Contract, dated January 19, 2009, between Usina
Monte Alegre Ltda. and Cemig Geração e Transmissão S.A., previously filed as exhibit
10.24 to the Companys registration statement on Form F-1 and incorporated by
reference herein.4.26
    
    English translation of Energy Distribution Contract, dated June 3, 2008 between
Angélica Agroenergia Ltda. and Empresa Energética do Mato Grosso do Sul., previously
filed as exhibit 10.25 to the Companys registration statement on Form F-1 and
incorporated by reference herein.4.27
    
    English translation of First Amendment to Energy Distribution Contract, dated April 6,
2009 between Angélica Agroenergia Ltda. and Empresa Energética do Mato Grosso do Sul.,
previously filed as exhibit 10.26 to the Companys registration statement on Form F-1
and incorporated by reference herein.4.28
    
    English translation of Second Amendment to Energy Distribution Contract, dated May 1,
2010 between Angélica Agroenergia Ltda. and Empresa Energética do Mato Grosso do Sul.,
 169




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Exhibit Number
    
    Descriptionpreviously filed as exhibit 10.27 to the Companys registration statement on Form F-1
and incorporated by reference herein.4.29
    
    English translation of Joint Venture Contract, dated December 22, 2009 between Pilagá
S.R.L. and COPRA S.A., previously filed as exhibit 10.28 to the Companys registration
statement on Form F-1 and incorporated by reference herein.4.30
    
    English translation of Sale Agreement for cattle, dated December 14, 2009, between
Adeco Agropecuaria S.A. and Quickfood S.A., previously filed as exhibit 10.29 to the
Companys registration statement on Form F-1 and incorporated by reference herein.4.31
    
    English translation of First Amendment to Sale Agreement for cattle, dated December
16, 2009, between Adeco Agropecuaria S.A. and Quickfood S.A., previously filed as
exhibit 10.30 to the Companys registration statement on Form F-1 and incorporated by
reference herein.4.32
    
    English translation of Second Amendment to Sale Agreement for cattle, dated December
17, 2009, between Adeco Agropecuaria S.A. and Quickfood S.A., previously filed as
exhibit 10.31 to the Companys registration statement on Form F-1 and incorporated by
reference herein.4.33
    
    English translation of Stock Purchase Agreement, dated August 23, 2010, between Kadesh
Hispania, S.L., Leterton España, S.L. and Dinaluca S.A., previously filed as exhibit
10.32 to the Companys registration statement on Form F-1 and incorporated by
reference herein.4.34
    
    Form of Registration Rights
Agreement between Adecoagro S.A. and certain shareholders, previously
filed as exhibit 10.33 to the Companys registration statement
on Form F-1 and incorporated by reference herein.4.35
    
    Fifth Amendment Offer to Loan Agreement, dated November 8, 2010, between Adeco
Agropecuaria S.A., Pilagá S.R.L. and Inter-American Development Bank, previously filed
as exhibit 10.37 to the Companys registration statement on Form F-1 and incorporated
by reference herein.4.36
    
    Second Amendment to Export Prepayment Financing Agreement, dated December 14, 2010,
between Angélica Agroenergia Ltda. and a syndicate of banks, previously filed as
exhibit 10.38 to the Companys registration statement on Form F-1 and incorporated by
reference herein.4.37
    
    English translation of Third Amendment to Financing Agreement BNDES Repasse, dated
December 14, 2010, between Angélica Agroenergia Ltda. and a syndicate of banks,
previously filed as exhibit 10.39 to the Companys registration statement on Form F-1
and incorporated by reference herein.4.38
    
    English translation of First Amendment to Credit Facility, dated December 18, 2010,
between Angélica Agroenergia Ltda. and Banco do Brasil S.A., previously filed as
exhibit 10.40 to the Companys registration statement on Form F-1 and incorporated by
reference herein.4.39
    
    Stock Subscription Agreement, dated January 6, 2011, between Adecoagro S.A. and Al
Gharrafa Investment Company, previously filed as exhibit 10.41 to the Companys
registration statement on Form F-1 and incorporated by reference herein.4.40
    
    English translation of Promise to Sell, dated December 21, 2010, between Kelizer
S.C.A. and Las Mesetas S.A.8.1
    
    Subsidiaries of Adecoagro S.A.12.1
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 200212.2
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 200213.1
    
    Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
Act of 200213.2
    
    Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
Act of 200215.1
    
    Consent of Cushman & Wakefield Argentina S.A.
 170




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SIGNATURES
  Adecoagro S.A./s/ Mariano BoschName:
    Mariano BoschTitle:
    Chief Executive Officer  171




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Adecoagro S.A.
 Consolidated Financial Statements as of and for the years
ended December 31, 2010, 2009 and 2008




---



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Report of Independent Registered Public Accounting Firm
 
    
 .




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##### Table of Contents



Legal information
 Denomination:
 Legal address:
 RCS Luxembourg  Company activity:  Date of registration:  Expiration of company charter:  Number of register:  Capital stock:
 Majority shareholder:  Legal address:  Parent company activity:  Capital stock:
 F - 3




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##### Table of Contents



Adecoagro S.A.
Consolidated Statements of Financial Position
as of December 31, 2010, 2009 and 2008
 Note
    
    
    2010
    
    
    2009
    
    
    2008ASSETSNon-Current AssetsProperty, plant and equipment, net
    
    
    6
    
    
    
    751,992
    
    
    
    682,878
    
    
    
    571,419Investment property
    
    
    7
    
    
    
    21,417
    
    
    
    21,246
    
    
    
    Intangible assets, net
    
    
    8
    
    
    
    28,653
    
    
    
    21,859
    
    
    
    18,108Biological assets
    
    
    9
    
    
    
    104,216
    
    
    
    170,347
    
    
    
    75,701Investments in joint ventures
    
    
    10
    
    
    
    6,271
    
    
    
    6,506
    
    
    
    7,508Deferred income tax assets
    
    
    21
    
    
    
    67,463
    
    
    
    45,113
    
    
    
    18,713Trade and other receivables, net
    
    
    11,12
    
    
    
    30,752
    
    
    
    22,065
    
    
    
    8,612Other assets
    
    
    
    
    
    
    26
    
    
    
    34
    
    
    
    87Total Non-Current Assets
    
    
    
    
    
    
    1,010,790
    
    
    
    970,048
    
    
    
    700,148Current AssetsBiological assets
    
    
    9
    
    
    
    82,541
    
    
    
    60,107
    
    
    
    50,247Inventories
    
    
    13
    
    
    
    57,170
    
    
    
    57,902
    
    
    
    61,221Trade and other receivables, net
    
    
    11,12
    
    
    
    119,205
    
    
    
    106,212
    
    
    
    75,928Derivative financial instruments
    
    
    11
    
    
    
    876
    
    
    
    99
    
    
    
    2,019Cash and cash equivalents
    
    
    11,14
    
    
    
    70,269
    
    
    
    74,806
    
    
    
    93,360Total Current Assets
    
    
    
    
    
    
    330,061
    
    
    
    299,126
    
    
    
    282,775Spin-off assets
    
    
    15
    
    
    
    
    
    
    
    
    
    
    
    45,311TOTAL ASSETS
    
    
    
    
    
    
    1,340,851
    
    
    
    1,269,174
    
    
    
    1,028,234SHAREHOLDERS EQUITYCapital and reserves attributable
to equity holders of the parentShare capital
    
    
    16
    
    
    
    120,000
    
    
    
    120,000
    
    
    
    108,108Share premium
    
    
    
    
    
    
    563,343
    
    
    
    563,343
    
    
    
    507,516Cumulative translation adjustment.
    
    
    
    
    
    
    11,273
    
    
    
    2,516
    
    
    
    (87,978
    )Equity-settled compensation
    
    
    
    
    
    
    13,659
    
    
    
    11,914
    
    
    
    9,092Retained earnings
    
    
    
    
    
    
    257
    
    
    
    44,161
    
    
    
    44,421Equity attributable to equity
holders of the parent
    
    
    
    
    
    
    708,532
    
    
    
    741,934
    
    
    
    581,159Non controlling interest
    
    
    
    
    
    
    14,570
    
    
    
    15,222
    
    
    
    57,269TOTAL SHAREHOLDERS EQUITY
    
    
    
    
    
    
    723,102
    
    
    
    757,156
    
    
    
    638,428LIABILITIESNon-Current LiabilitiesTrade and other payables
    
    
    11,19
    
    
    
    11,785
    
    
    
    6,822
    
    
    
    6,090Borrowings
    
    
    11,20
    
    
    
    250,672
    
    
    
    203,134
    
    
    
    4,099Derivative financial instruments
    
    
    11
    
    
    
    
    
    
    
    280
    
    
    
    Deferred income tax liabilities
    
    
    21
    
    
    
    111,495
    
    
    
    107,045
    
    
    
    94,627Payroll and social liabilities
    
    
    22
    
    
    
    1,178
    
    
    
    1,106
    
    
    
    834Provisions for other liabilities
    
    
    23
    
    
    
    4,606
    
    
    
    3,326
    
    
    
    777Total Non-Current Liabilities
    
    
    
    
    
    
    379,736
    
    
    
    321,713
    
    
    
    106,427Current LiabilitiesTrade and other payables
    
    
    11,19
    
    
    
    69,236
    
    
    
    62,098
    
    
    
    46,670Current income tax liabilities
    
    
    
    
    
    
    978
    
    
    
    222
    
    
    
    1,487Payroll and social liabilities
    
    
    22
    
    
    
    15,478
    
    
    
    10,079
    
    
    
    6,025Borrowings
    
    
    11,20
    
    
    
    138,800
    
    
    
    103,647
    
    
    
    224,214Derivative financial instruments
    
    
    11
    
    
    
    8,920
    
    
    
    12,607
    
    
    
    4,159Provisions for other liabilities
    
    
    23
    
    
    
    4,601
    
    
    
    1,652
    
    
    
    824Total Current Liabilities
    
    
    
    
    
    
    238,013
    
    
    
    190,305
    
    
    
    283,379TOTAL LIABILITIES
    
    
    
    
    
    
    617,749
    
    
    
    512,018
    
    
    
    389,806TOTAL SHAREHOLDERS EQUITY AND
LIABILITIES
    
    
    
    
    
    
    1,340,851
    
    
    
    1,269,174
    
    
    
    1,028,234
  F - 4




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##### Table of Contents



Adecoagro S.A.
Consolidated Statements of Income
for the years ended December 31, 2010, 2009 and 2008
 Note
    
    
    2010
    
    
    2009
    
    
    2008Sales of manufactured products and
services rendered
    
    
    24
    
    
    
    294,529
    
    
    
    183,386
    
    
    
    117,173Cost of manufactured products sold and
services rendered
    
    
    25
    
    
    
    (219,201
    )
    
    
    (180,083
    )
    
    
    (105,583
    )Gross Profit from Manufacturing Activities
    
    
    
    
    
    
    75,328
    
    
    
    3,303
    
    
    
    11,590Sales of agricultural produce and
biological assets
    
    
    24
    
    
    
    131,738
    
    
    
    130,217
    
    
    
    127,036Cost of agricultural produce sold and
direct agricultural selling expenses
    
    
    25
    
    
    
    (131,738
    )
    
    
    (130,217
    )
    
    
    (127,036
    )Initial recognition and changes in fair
value of biological assets and
agricultural produce
    
    
    
    
    
    
    (30,528
    )
    
    
    71,668
    
    
    
    61,000Changes in net realizable value of
agricultural produce after harvest
    
    
    
    
    
    
    7,999
    
    
    
    12,787
    
    
    
    1,261Gross (Loss) / Profit from Agricultural
Activities
    
    
    
    
    
    
    (22,529
    )
    
    
    84,455
    
    
    
    62,261Margin on Manufacturing and Agricultural
Activities Before Operating Expenses
    
    
    
    
    
    
    52,799
    
    
    
    87,758
    
    
    
    73,851General and administrative expenses
    
    
    25
    
    
    
    (56,562
    )
    
    
    (52,393
    )
    
    
    (45,633
    )Selling expenses
    
    
    25
    
    
    
    (52,528
    )
    
    
    (31,169
    )
    
    
    (24,496
    )Other operating income, net
    
    
    27
    
    
    
    18,224
    
    
    
    13,071
    
    
    
    17,323Excess of fair value of net assets
acquired over cost
    
    
    31
    
    
    
    
    
    
    
    
    
    
    
    1,227Share of loss of joint ventures
    
    
    10
    
    
    
    (50
    )
    
    
    (294
    )
    
    
    (838
    )(Loss) / Profit from Operations Before
Financing and Taxation
    
    
    
    
    
    
    (38,117
    )
    
    
    16,973
    
    
    
    21,434Finance income
    
    
    28
    
    
    
    16,559
    
    
    
    11,553
    
    
    
    2,552Finance costs
    
    
    28
    
    
    
    (39,496
    )
    
    
    (34,216
    )
    
    
    (50,860
    )Financial results, net
    
    
    28
    
    
    
    (22,937
    )
    
    
    (22,663
    )
    
    
    (48,308
    )Loss Before Income Tax
    
    
    
    
    
    
    (61,054
    )
    
    
    (5,690
    )
    
    
    (26,874
    )Income tax benefit
    
    
    21
    
    
    
    16,263
    
    
    
    5,415
    
    
    
    10,449Loss for the Year
    
    
    
    
    
    
    (44,791
    )
    
    
    (275
    )
    
    
    (16,425
    )Attributable to:Equity holders of the parent
    
    
    
    
    
    
    (43,904
    )
    
    
    (260
    )
    
    
    (18,947
    )Non controlling interest
    
    
    
    
    
    
    (887
    )
    
    
    (15
    )
    
    
    2,522Loss per share attributable to the equity
holders of the parent during the year:Basic
    
    
    29
    
    
    
    (0.361
    )
    
    
    (0.002
    )
    
    
    (0.168
    )Diluted
    
    
    29
    
    
    
    n/a
    
    
    
    n/a
    
    
    
    n/a
  F - 5




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##### Table of Contents



Adecoagro S.A.
Consolidated Statements of Comprehensive Income
for the years ended December 31, 2010, 2009 and 2008
 2010
    
    
    2009
    
    
    2008Loss for the year
    
    
    (44,791
    )
    
    
    (275
    )
    
    
    (16,425
    )Other comprehensive income:Exchange differences on translating
foreign operations
    
    
    8,956
    
    
    
    91,293
    
    
    
    (115,725
    )Other comprehensive income/ (loss)
for the year
    
    
    8,956
    
    
    
    91,293
    
    
    
    (115,725
    )Total comprehensive (loss) / income
for the year
    
    
    (35,835
    )
    
    
    91,018
    
    
    
    (132,150
    )Attributable to:Equity holders of the parent
    
    
    (35,147
    )
    
    
    89,215
    
    
    
    (128,277
    )Non controlling interest
    
    
    (688
    )
    
    
    1,803
    
    
    
    (3,873
    )
  F - 6




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##### Table of Contents



Adecoagro S.A.
Consolidated Statements of Changes in Shareholders Equity
for the years ended December 31, 2010, 2009 and 2008
 Attributable to equity holders of the parentMembers
    
    
    
    
    
    
    
    
    
    
    Cumulative
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Non
    
    
    TotalContributed
    
    
    Share Capital
    
    
    Share
    
    
    Translation
    
    
    Equity-settled
    
    
    Retained
    
    
    
    
    
    
    Controlling
    
    
    ShareholdersCapital
    
    
    (*)
    
    
    Premium
    
    
    Adjustment
    
    
    Compensation
    
    
    Earnings
    
    
    Subtotal
    
    
    Interest
    
    
    EquityBalance at January 1, 2008
    
    
    476,125
    
    
    
    
    
    
    
    
    
    
    
    21,512
    
    
    
    5,376
    
    
    
    64,661
    
    
    
    567,674
    
    
    
    49,191
    
    
    
    616,865Adjustments due to Reorganization
(See Note 1)
    
    
    (476,125
    )
    
    
    81,939
    
    
    
    384,664
    
    
    
    (430
    )
    
    
    (108
    )
    
    
    (1,293
    )
    
    
    (11,353
    )
    
    
    11,353
    
    
    
    Adjusted Balance at January 1, 2008
    
    
    
    
    
    
    81,939
    
    
    
    384,664
    
    
    
    21,082
    
    
    
    5,268
    
    
    
    63,368
    
    
    
    556,321
    
    
    
    60,544
    
    
    
    616,865Total comprehensive loss for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (109,330
    )
    
    
    
    
    
    
    (18,947
    )
    
    
    (128,277
    )
    
    
    (3,873
    )
    
    
    (132,150
    )Employee share options granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,824
    
    
    
    
    
    
    
    3,824
    
    
    
    78
    
    
    
    3,902Capital contribution
    
    
    
    
    
    
    26,169
    
    
    
    122,852
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    149,021
    
    
    
    3,041
    
    
    
    152,062Disposal of subsidiary
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    270
    
    
    
    
    
    
    
    
    
    
    
    270
    
    
    
    6
    
    
    
    276Disposal of non controlling interest
in subsidiaries
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,527
    )
    
    
    (2,527
    )Balance at December 31, 2008
    
    
    
    
    
    
    108,108
    
    
    
    507,516
    
    
    
    (87,978
    )
    
    
    9,092
    
    
    
    44,421
    
    
    
    581,159
    
    
    
    57,269
    
    
    
    638,428Total comprehensive income for the
year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    89,475
    
    
    
    
    
    
    
    (260
    )
    
    
    89,215
    
    
    
    1,803
    
    
    
    91,018Employee share options granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,822
    
    
    
    
    
    
    
    2,822
    
    
    
    58
    
    
    
    2,880Capital contribution
    
    
    
    
    
    
    11,892
    
    
    
    55,827
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    67,719
    
    
    
    1,382
    
    
    
    69,101Disposal of subsidiary
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,019
    
    
    
    
    
    
    
    
    
    
    
    1,019
    
    
    
    21
    
    
    
    1,040Subsidiaries spin-off
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (45,311
    )
    
    
    (45,311
    )Balance at December 31, 2009
    
    
    
    
    
    
    120,000
    
    
    
    563,343
    
    
    
    2,516
    
    
    
    11,914
    
    
    
    44,161
    
    
    
    741,934
    
    
    
    15,222
    
    
    
    757,156Total comprehensive loss for the year
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,757
    
    
    
    
    
    
    
    (43,904
    )
    
    
    (35,147
    )
    
    
    (688
    )
    
    
    (35,835
    )Employee share options granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,745
    
    
    
    
    
    
    
    1,745
    
    
    
    36
    
    
    
    1,781Balance at December 31, 2010
    
    
    
    
    
    
    120,000
    
    
    
    563,343
    
    
    
    11,273
    
    
    
    13,659
    
    
    
    257
    
    
    
    708,532
    
    
    
    14,570
    
    
    
    723,102
 
 (*)
    
    On January 24, 2011 shareholders approved a reverse stock split whereby every three shares of
capital stock were converted into two shares, changing the nominal value of common shares from
US$ 1 to US$ 1.5. Consequently, share capital as from January 24, 2011 totaled 80 million shares
that represent US$ 120 million (see Note 1).  F - 7




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##### Table of Contents



Adecoagro S.A.
Consolidated Statements of Cash Flows
for the years ended December 31, 2010, 2009 and 2008
 Note
    
    
    2010
    
    
    2009
    
    
    2008Cash flows from operating activities:Loss for the year
    
    
    
    
    
    
    (44,791
    )
    
    
    (275
    )
    
    
    (16,425
    )Adjustments for:Income tax benefit
    
    
    21
    
    
    
    (16,263
    )
    
    
    (5,415
    )
    
    
    (10,449
    )Depreciation
    
    
    6
    
    
    
    37,217
    
    
    
    30,059
    
    
    
    28,144Amortization
    
    
    8
    
    
    
    346
    
    
    
    297
    
    
    
    170Gain from the disposal of other property items
    
    
    27
    
    
    
    (847
    )
    
    
    (337
    )
    
    
    (479
    )Gain from
disposal of farmland (Note 15)
    
    
    27
    
    
    
    (20,837
    )
    
    
    
    
    
    
    Employee share/options granted
    
    
    26
    
    
    
    1,781
    
    
    
    2,880
    
    
    
    3,902Loss/ (gain) from derivative financial instruments
and forwards
    
    
    27,28
    
    
    
    (1,189
    )
    
    
    7,486
    
    
    
    (1,848
    )Interest expense, net
    
    
    28
    
    
    
    33,028
    
    
    
    27,750
    
    
    
    21,830Initial recognition and changes in fair value of non
harvested biological assets (unrealized)
    
    
    5
    
    
    
    72,374
    
    
    
    (55,841
    )
    
    
    (26,322
    )Changes in net realizable value of agricultural
produce after harvest (unrealized)
    
    
    5
    
    
    
    (1,527
    )
    
    
    (127
    )
    
    
    99Provision and allowances
    
    
    
    
    
    
    4,980
    
    
    
    4,013
    
    
    
    (367
    )Share of loss from joint venture
    
    
    10
    
    
    
    50
    
    
    
    294
    
    
    
    838Foreign exchange (gains)/ losses, net
    
    
    28
    
    
    
    (7,324
    )
    
    
    (10,903
    )
    
    
    24,932Gain from the sale of farmland businesses
    
    
    27
    
    
    
    
    
    
    
    (18,839
    )
    
    
    (13,974
    )Excess of fair value of net assets acquired over cost
    
    
    31
    
    
    
    
    
    
    
    
    
    
    
    (1,227
    )Changes in operating assets and liabilities:Decrease/ /(increase) in trade and other receivables
    
    
    
    
    
    
    3,584
    
    
    
    (30,388
    )
    
    
    (28,383
    )Decrease/ (increase) in inventories
    
    
    
    
    
    
    2,259
    
    
    
    3,442
    
    
    
    (3,289
    )Decrease in biological assets
    
    
    
    
    
    
    7,171
    
    
    
    20,389
    
    
    
    4,213Decrease/ /(increase) in other assets
    
    
    
    
    
    
    8
    
    
    
    (5
    )
    
    
    2,198(Decrease)/ increase in derivative financial
instruments
    
    
    
    
    
    
    (3,554
    )
    
    
    3,162
    
    
    
    3,720Decrease in other financial assets at fair value
through profit or loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,699(Decrease)/ increase in trade and other payables
    
    
    
    
    
    
    (4,221
    )
    
    
    11,508
    
    
    
    13,039Increase in payroll and social security liabilities
    
    
    
    
    
    
    5,470
    
    
    
    4,327
    
    
    
    1,247Increase/ (decrease) in provisions for other
liabilities
    
    
    
    
    
    
    319
    
    
    
    (165
    )
    
    
    (2,599
    )Net cash generated from/ (used in) operating
activities before interest and taxes paid
    
    
    
    
    
    
    68,034
    
    
    
    (6,688
    )
    
    
    669Interest paid
    
    
    
    
    
    
    (33,283
    )
    
    
    (25,797
    )
    
    
    (16,312
    )Income tax paid
    
    
    
    
    
    
    (7,813
    )
    
    
    (13,322
    )
    
    
    (5,784
    )Net cash generated from / (used in) operating
activities
    
    
    
    
    
    
    26,938
    
    
    
    (45,807
    )
    
    
    (21,427
    )
  F - 8




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##### Table of Contents



Adecoagro S.A.
Consolidated Statements of Cash Flows (Continued)
for the years ended December 31, 2010, 2009 and 2008
 Note
    
    
    2010
    
    
    2009
    
    
    2008Cash flows from investing activities:Acquisition of subsidiaries, net of cash acquired
    
    
    31
    
    
    
    (7,872
    )
    
    
    
    
    
    
    Purchases of property, plant and equipment
    
    
    6
    
    
    
    (87,679
    )
    
    
    (97,817
    )
    
    
    (186,296
    )Purchases of intangible assets
    
    
    8
    
    
    
    (33
    )
    
    
    (315
    )
    
    
    Purchase of cattle and non current biological
assets planting cost
    
    
    2.3
    
    
    
    (35,060
    )
    
    
    (40,492
    )
    
    
    (31,026
    )Interest received
    
    
    28
    
    
    
    1,341
    
    
    
    472
    
    
    
    1,494Proceeds from sale of property, plant and
equipment
    
    
    
    
    
    
    12,103
    
    
    
    7,341
    
    
    
    3,467Proceeds from disposal of subsidiaries
    
    
    15
    
    
    
    5,475
    
    
    
    16,425
    
    
    
    25,146Acquisition of non controlling interest in
subsidiaries
    
    
    31
    
    
    
    
    
    
    
    
    
    
    
    (1,300
    )Net cash used in investing activities
    
    
    
    
    
    
    (111,725
    )
    
    
    (114,386
    )
    
    
    (188,515
    )Cash flows from financing activities:Capital contributions from shareholders
    
    
    
    
    
    
    
    
    
    
    69,101
    
    
    
    175,453Proceeds from long-term borrowings
    
    
    20
    
    
    
    67,379
    
    
    
    80,000
    
    
    
    18,605Net increase in short-term borrowings
    
    
    20
    
    
    
    12,449
    
    
    
    6,946
    
    
    
    19,142Net cash generated from financing activities
    
    
    
    
    
    
    79,828
    
    
    
    156,047
    
    
    
    213,200Net (decrease)/ increase in cash and cash
equivalents
    
    
    
    
    
    
    (4,960
    )
    
    
    (4,146
    )
    
    
    3,258Cash and cash equivalents at beginning of year
    
    
    
    
    
    
    74,806
    
    
    
    93,360
    
    
    
    70,686Effect of exchange rate changes on cash
    
    
    
    
    
    
    423
    
    
    
    (14,408
    )
    
    
    19,416Cash and cash equivalents at end of year
    
    
    
    
    
    
    70,269
    
    
    
    74,806
    
    
    
    93,360
  F - 9




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 1. General information and Reorganization
     Reorganization
       F - 10




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 2. Summary of significant accounting policies
  2.1. Basis of preparation
      (a) Standards, amendments and interpretations to existing standards effective in 2010 and
adopted by the Group in 2010
   
    
    The revised standard gives the option of measuring non-controlling interests either at
fair value or at the proportionate share of the identifiable net assets. This choice can be
exercised for each business combination individually.
    
    In a business combination achieved in stages (step acquisition), the acquirer shall
remeasure its previously held equity interest in the acquiree at the date the acquirer
obtains control. Goodwill shall then be determined as the difference between the remeasured
carrying amount plus consideration transferred for the acquisition of the new shares and
any non-controlling interest, minus net assets acquired.
    
    Contingent consideration shall be measured at fair value at the acquisition date and
classified either as equity, or as asset or liability at the acquisition date. Contingent
consideration shall be recognized subsequently in accordance with the classification
determined at the acquisition date.
    
    Acquisition-related costs incurred in connection with business combinations shall be
recognized as expenses.
  F - 11




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 2.1. Basis of preparation (continued)
 
    
    For changes in contingent consideration classified as a liability at the acquisition
date, goodwill cannot be remeasured subsequently.
    
    According to the revised IFRS 3, effects from the settlement of relationships existing
prior to the business combination shall not be part of the exchange for the acquiree.
    
    In contrast to the previous version of IFRS 3, the revised standard governs the
recognition and measurement of rights that were granted to another entity prior to the
business combination and which are now reacquired as part of the business combination
(reacquired rights).The main changes that revised IAS 27 makes are as described below:
    
    Changes in a parents ownership interest in a subsidiary that do not result in the loss
of control shall only be accounted for within equity.
    
    If a parent loses control of a subsidiary it shall derecognize the consolidated assets
and liabilities. The new requirement is that any investment retained in the former
subsidiary shall be recognized at fair value at the date when control is lost; any
differences resulting from this shall be recognized in profit or loss.
    
    When losses attributed to the non-controlling interests exceed the non-controlling
interests in the subsidiarys equity, these losses shall be allocated to the
non-controlling interests even if this results in a deficit balance.
     F - 12




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 2.1 Basis of preparation (continued)
 (b) Standards, amendments and interpretations to existing standards that are effective in 2010
but not relevant to the Groups operations
         F - 13




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 2.1. Basis of preparation (continued)
 (c) Standards, amendments and interpretations to existing standards that are not yet effective
       F - 14




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 2.1. Basis of preparation (continued)
     2.2. Scope of consolidation
   F - 15




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 2.2. Scope of consolidation (continued)
 (a) Subsidiaries
    (b) Transactions and non controlling interest
   (c) Joint ventures
    F - 16




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 2.3. Revision of previously issued financial statements
  2.4. Segment reporting
  2.5. Foreign currency translation
 (a) Functional and presentation currency
  (b) Transactions and balances
   (c) Group companies
  
    
    assets and liabilities for each statement of financial position presented are translated
at the closing rate at the date of that statement of financial position;
    
    income and expenses for each statement of income are translated at average exchange
rates (unless this average is not a reasonable approximation of the cumulative effect of
the rates prevailing on the transaction dates, in which case income and expenses are
translated at the rate on the dates of the transactions); and
    
    all resulting exchange differences are recognized as a separate component of equity.
    F - 17




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 2.6. Property, plant and equipment
     Farmland improvements
    
    5-25 yearsBuildings and facilities
    
    20 yearsFurniture and fittings
    
    10 yearsComputer equipment
    
    3-5 yearsMachinery and equipment
    
    4-10 yearsVehicles
    
    4-5 years
   2.7. Investment property
  2.8. Leases
    F - 18




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 2.9. Goodwill
    2.10. Negative goodwill
  2.11. Other intangible assets
  2.12. Impairment of assets
 Goodwill
  Property, plant and equipment and finite lived intangible assets
   F - 19




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 2.12. Impairment of assets (continued)
   2.13. Biological assets
       
    
    Growing crops:
   F - 20




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 2.13. Biological assets (continued)
   
    
    Growing herd and cattle:
  
    
    Coffee:
     
    
    Sugarcane:
    F - 21




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 2.13. Biological assets (continued)
   2.14. Inventories
    2.15. Financial assets
  (a) Financial assets at fair value through profit or loss
  (b) Loans and receivables
  (c) Recognition and measurement
   F - 22




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 2.15. Financial assets (continued)
    (d) Offsetting financial instruments
  2.16. Derivative financial instruments and hedging activities
    2.17. Trade receivables
   F - 23




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 2.18. Cash and cash equivalents
  2.19. Trade payables
  2.20. Borrowings
  2.21. Provisions
  2.22. Onerous contracts
  2.23. Current and deferred income tax
    F - 24




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 2.23. Current and deferred income tax (continued)
     2.24. Revenue recognition
        F - 25




---



##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 2.25. Farmlands sales
   2.26. Earnings per share
  2.27. Equity-settled share-based payments
  2.28. Research and development
   F - 26




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 3. Financial risk management
 Risk management principles and processes
    
    
    Exchange rate risk
     2010Functional currencyNet monetary position
    
    Argentine
    
    
    Brazilian
    
    
    Uruguayan(Liability)/ Asset
    
    Peso
    
    
    Reais
    
    
    Peso
    
    
    US Dollar
    
    
    TotalArgentine Peso
    
    
    (36,845
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (36,845
    )Brazilian Reais
    
    
    
    
    
    
    (222,106
    )
    
    
    
    
    
    
    
    
    
    
    (222,106
    )US Dollar
    
    
    (71,378
    )
    
    
    (33,361
    )
    
    
    32,854
    
    
    
    2,139
    
    
    
    (69,746
    )Uruguayan Peso
    
    
    
    
    
    
    
    
    
    
    (56
    )
    
    
    
    
    
    
    (56
    )Total
    
    
    (108,223
    )
    
    
    (255,467
    )
    
    
    32,798
    
    
    
    2.139
    
    
    
    (328,753
    )
  F - 27




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 3. Financial risk management (continued)
 2009Functional currencyNet monetary position
    
    Argentine
    
    
    Brazilian
    
    
    Uruguayan(Liability)/ Asset
    
    Peso
    
    
    Reais
    
    
    Peso
    
    
    US Dollar
    
    
    TotalArgentine Peso
    
    
    25,438
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,438Brazilian Reais
    
    
    
    
    
    
    (28,337
    )
    
    
    
    
    
    
    
    
    
    
    (28,337
    )US Dollar
    
    
    (86,786
    )
    
    
    (148,252
    )
    
    
    (2,483
    )
    
    
    52,471
    
    
    
    (185,050
    )Uruguayan Peso
    
    
    
    
    
    
    
    
    
    
    5,260
    
    
    
    
    
    
    
    5,260Total
    
    
    (61,348
    )
    
    
    (176,589
    )
    
    
    2,777
    
    
    
    52,471
    
    
    
    (182,689
    )
 2008Functional currencyNet monetary position
    
    Argentine
    
    
    Brazilian
    
    
    Uruguayan(Liability)/ Asset
    
    Peso
    
    
    Reais
    
    
    Peso
    
    
    US Dollar
    
    
    TotalArgentine Peso
    
    
    (17,028
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (17,028
    )Brazilian Reais
    
    
    
    
    
    
    (29,343
    )
    
    
    
    
    
    
    
    
    
    
    (29,343
    )US Dollar
    
    
    (45,461
    )
    
    
    (106,180
    )
    
    
    (3,105
    )
    
    
    83,959
    
    
    
    (70,787
    )Uruguayan Peso
    
    
    
    
    
    
    
    
    
    
    547
    
    
    
    
    
    
    
    547Total
    
    
    (62,489
    )
    
    
    (135,523
    )
    
    
    (2,558
    )
    
    
    83,959
    
    
    
    (116,611
    )
 (Loss) Profit Before Income Tax
 2010Functional currencyArgentine
    
    
    Brazilian
    
    
    UruguayanNet monetary position
    
    Peso
    
    
    Reais
    
    
    Peso
    
    
    US Dollar
    
    
    TotalArgentine Peso
    
    
    n/a
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Brazilian Reais
    
    
    
    
    
    
    n/a
    
    
    
    
    
    
    
    
    
    
    
    US Dollar
    
    
    (7,138
    )
    
    
    (3,336
    )
    
    
    3,285
    
    
    
    n/a
    
    
    
    (7,189
    )Uruguayan Peso
    
    
    
    
    
    
    
    
    
    
    n/a
    
    
    
    
    
    
    
    (Increase) or
decrease in (Loss)
Profit Before Income
Tax
    
    
    (7,138
    )
    
    
    (3,336
    )
    
    
    3,285
    
    
    
    
    
    
    
    (7,189
    )
 2009Functional currencyArgentine
    
    
    Brazilian
    
    
    UruguayanNet monetary position
    
    Peso
    
    
    Reais
    
    
    Peso
    
    
    US Dollar
    
    
    TotalArgentine Peso
    
    
    n/a
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Brazilian Reais
    
    
    
    
    
    
    n/a
    
    
    
    
    
    
    
    
    
    
    
    US Dollar
    
    
    (8,679
    )
    
    
    (14,825
    )
    
    
    (248
    )
    
    
    n/a
    
    
    
    (23,752
    )Uruguayan Peso
    
    
    
    
    
    
    
    
    
    
    n/a
    
    
    
    
    
    
    
    (Increase) or
decrease in (Loss)
Before Income Tax
    
    
    (8,679
    )
    
    
    (14,825
    )
    
    
    (248
    )
    
    
    
    
    
    
    (23,752
    )
  F - 28




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 3. Financial risk management (continued)
 2008Functional currencyArgentine
    
    
    Brazilian
    
    
    UruguayanNet monetary position
    
    Peso
    
    
    Reais
    
    
    Peso
    
    
    US Dollar
    
    
    TotalArgentine Peso
    
    
    n/a
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Brazilian Reais
    
    
    
    
    
    
    n/a
    
    
    
    
    
    
    
    
    
    
    
    US Dollar
    
    
    ( 4,546
    )
    
    
    (10,618
    )
    
    
    ( 310
    )
    
    
    n/a
    
    
    
    (15,474
    )Uruguayan Peso
    
    
    
    
    
    
    
    
    
    
    n/a
    
    
    
    
    
    
    
    (Increase) or
decrease in (Loss)
Before Income Tax
    
    
    (4,546
    )
    
    
    (10,618
    )
    
    
    (310
    )
    
    
    
    
    
    
    (15,474
    )
 
    
    Raw material price risk
  Loss Before Income Tax
 
    
    End-product price risk
   Loss Before Income Tax
  F - 29




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 3.
    
    Financial risk management (continued)
 
    
    Liquidity risk
    Less than
    
    
    Between
    
    
    Between 2
    
    
    OverAt 31 December 2010
    
    1 year
    
    
    1 and 2 years
    
    
    and 5 years
    
    
    5 Years
    
    
    TotalTrade and other payables
    
    
    66,106
    
    
    
    606
    
    
    
    1,883
    
    
    
    3,568
    
    
    
    72,163Borrowings (excluding finance
lease liabilities)
    
    
    138,433
    
    
    
    93,330
    
    
    
    108,536
    
    
    
    48,725
    
    
    
    389,024Finance leases
    
    
    367
    
    
    
    81
    
    
    
    
    
    
    
    
    
    
    
    448Derivative financial instruments
    
    
    8,920
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,920Total
    
    
    213,826
    
    
    
    94,017
    
    
    
    110,419
    
    
    
    52,293
    
    
    
    470,555
 Less than
    
    
    Between
    
    
    Between 2
    
    
    OverAt 31 December 2009
    
    1 year
    
    
    1 and 2 years
    
    
    and 5 years
    
    
    5 Years
    
    
    TotalTrade and other payables
    
    
    53,161
    
    
    
    5,145
    
    
    
    
    
    
    
    
    
    
    
    58,306Borrowings (excluding finance
lease liabilities)
    
    
    102,970
    
    
    
    74,391
    
    
    
    121,712
    
    
    
    6,788
    
    
    
    305,861Finance leases
    
    
    677
    
    
    
    243
    
    
    
    
    
    
    
    
    
    
    
    920Derivative financial instruments
    
    
    12,607
    
    
    
    280
    
    
    
    
    
    
    
    
    
    
    
    12,887Total
    
    
    169,415
    
    
    
    80,059
    
    
    
    121,712
    
    
    
    6,788
    
    
    
    377,974
 Less than
    
    
    Between
    
    
    Between 2
    
    
    OverAt 31 December 2008
    
    1 year
    
    
    1 and 2 years
    
    
    and 5 years
    
    
    5 Years
    
    
    TotalTrade and other payables
    
    
    39,782
    
    
    
    2,679
    
    
    
    
    
    
    
    
    
    
    
    42,461Borrowings (excluding finance
lease liabilities)
    
    
    223,587
    
    
    
    1,381
    
    
    
    1,311
    
    
    
    1,152
    
    
    
    227,431Finance leases
    
    
    627
    
    
    
    255
    
    
    
    
    
    
    
    
    
    
    
    882Derivative financial instruments
    
    
    4,159
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,159Total
    
    
    268,155
    
    
    
    4,315
    
    
    
    1,311
    
    
    
    1,152
    
    
    
    274,933
  F - 30




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 3.
    
    Financial risk management (continued)
 
    
    Interest rate risk
      2010Functional currencyArgentine
    
    
    BrazilianRate per currency denomination
    
    Peso
    
    
    Reais
    
    
    Uruguayan Peso
    
    
    TotalFixed rate:Argentine Peso
    
    
    13
    
    
    
    
    
    
    
    
    
    
    
    13Brazilian Reais
    
    
    
    
    
    
    76,253
    
    
    
    
    
    
    
    76,253US Dollar
    
    
    34,465
    
    
    
    7,013
    
    
    
    475
    
    
    
    41,953Uruguayan Peso
    
    
    
    
    
    
    
    
    
    
    62
    
    
    
    62Subtotal Fixed-rate borrowings
    
    
    34,478
    
    
    
    83,266
    
    
    
    537
    
    
    
    118,281Variable rate:Argentine Peso
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Brazilian Reais
    
    
    
    
    
    
    113,514
    
    
    
    
    
    
    
    113,514US Dollar
    
    
    64,053
    
    
    
    93,176
    
    
    
    
    
    
    
    157,229Subtotal Variable-rate borrowings
    
    
    64,053
    
    
    
    206,690
    
    
    
    
    
    
    
    270,743Total borrowings as per analysis
    
    
    98,531
    
    
    
    289,956
    
    
    
    537
    
    
    
    389,024Finance leases
    
    
    171
    
    
    
    277
    
    
    
    
    
    
    
    448Total borrowings as per
statement of financial position
    
    
    98,702
    
    
    
    290,233
    
    
    
    537
    
    
    
    389,472
  F - 31




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 3.
    
    Financial risk management (continued)The analysis for the year ended December 31, 2009 is as follows (all amounts are shown in US
dollars):
 2009Functional currencyArgentine
    
    
    BrazilianRate per currency denomination
    
    Peso
    
    
    Reais
    
    
    Uruguayan Peso
    
    
    TotalFixed rate:Argentine Peso
    
    
    88
    
    
    
    
    
    
    
    
    
    
    
    88Brazilian Reais
    
    
    
    
    
    
    7,241
    
    
    
    
    
    
    
    7,241US Dollar
    
    
    49,608
    
    
    
    
    
    
    
    
    
    
    
    49,608Uruguayan Peso
    
    
    
    
    
    
    
    
    
    
    40
    
    
    
    40Subtotal Fixed-rate borrowings
    
    
    49,696
    
    
    
    7,241
    
    
    
    40
    
    
    
    56,977Variable rate:Argentine Peso
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Brazilian Reais
    
    
    
    
    
    
    139,695
    
    
    
    
    
    
    
    139,695US Dollar
    
    
    49,992
    
    
    
    59,197
    
    
    
    
    
    
    
    109,189Subtotal Variable-rate borrowings
    
    
    49,992
    
    
    
    198,892
    
    
    
    
    
    
    
    248,884Total borrowings as per analysis
    
    
    99,688
    
    
    
    206,133
    
    
    
    40
    
    
    
    305,861Finance leases
    
    
    257
    
    
    
    663
    
    
    
    
    
    
    
    920Total borrowings as per
statement of financial position
    
    
    99,945
    
    
    
    206,796
    
    
    
    40
    
    
    
    306,781
  2008Functional currencyArgentine
    
    
    BrazilianRate per currency denomination
    
    Peso
    
    
    Reais
    
    
    Uruguayan Peso
    
    
    TotalFixed rate:Argentine Peso
    
    
    35,343
    
    
    
    
    
    
    
    
    
    
    
    35,343Brazilian Reais
    
    
    
    
    
    
    5,560
    
    
    
    
    
    
    
    5,560US Dollar
    
    
    53,599
    
    
    
    
    
    
    
    1,703
    
    
    
    55,302Subtotal Fixed-rate borrowings
    
    
    88,942
    
    
    
    5,560
    
    
    
    1,703
    
    
    
    96,205Variable rate:Argentine Peso
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Brazilian Reais
    
    
    
    
    
    
    22,425
    
    
    
    
    
    
    
    22,425US Dollar
    
    
    
    
    
    
    108,801
    
    
    
    
    
    
    
    108,801Subtotal Variable-rate borrowings
    
    
    
    
    
    
    131,226
    
    
    
    
    
    
    
    131,226Total borrowings as per analysis
    
    
    88,942
    
    
    
    136,786
    
    
    
    1,703
    
    
    
    227,431Finance leases
    
    
    
    
    
    
    882
    
    
    
    
    
    
    
    882Total borrowings as per
statement of financial position
    
    
    88,942
    
    
    
    137,668
    
    
    
    1,703
    
    
    
    228,313
  F - 32




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 3.
    
    Financial risk management (continued)
 (Loss) Before Income Tax
 2010Functional currencyArgentine
    
    
    BrazilianRate per currency denomination
    
    Peso
    
    
    Reais
    
    
    Uruguayan Peso
    
    
    TotalVariable rate:Argentine Peso
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Brazilian Reais
    
    
    
    
    
    
    (1,134
    )
    
    
    
    
    
    
    (1,134
    )US Dollar
    
    
    (641
    )
    
    
    (932
    )
    
    
    
    
    
    
    (1,573
    )Total effects on (Loss)
Before Income Tax
    
    
    (641
    )
    
    
    (2,066
    )
    
    
    
    
    
    
    (2,707
    )
 2009Functional currencyArgentine
    
    
    BrazilianRate per currency denomination
    
    Peso
    
    
    Reais
    
    
    Uruguayan Peso
    
    
    TotalVariable rate:Argentine Peso
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Brazilian Reais
    
    
    
    
    
    
    (1,397
    )
    
    
    
    
    
    
    (1,397
    )US Dollar
    
    
    (500
    )
    
    
    (592
    )
    
    
    
    
    
    
    (1,092
    )Total effects on (Loss)
Before Income Tax
    
    
    (500
    )
    
    
    (1,989
    )
    
    
    
    
    
    
    (2,489
    )
 2008Functional currencyArgentine
    
    
    BrazilianRate per currency denomination
    
    Peso
    
    
    Reais
    
    
    Uruguayan Peso
    
    
    TotalVariable rate:Argentine Peso
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Brazilian Reais
    
    
    
    
    
    
    (224
    )
    
    
    
    
    
    
    (224
    )US Dollar
    
    
    
    
    
    
    (1,088
    )
    
    
    
    
    
    
    (1,088
    )Total effects on (Loss)
Before Income Tax
    
    
    
    
    
    
    (1,312
    )
    
    
    
    
    
    
    (1,312
    )
   F - 33




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 3.
    
    Financial risk management (continued)
 
    
    Credit risk
         F - 34




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 3.
    
    Financial risk management (continued)
 
    
    Capital risk management
  2010
    
    
    2009
    
    
    2008Total Debt
    
    
    389,472
    
    
    
    306,781
    
    
    
    228,313Total Equity
    
    
    723,102
    
    
    
    757,156
    
    
    
    638,428Total Capital
    
    
    1,112,574
    
    
    
    1,063,937
    
    
    
    866,741Gearing Ratio
    
    
    0.35
    
    
    
    0.29
    
    
    
    0.26
 
    
    Derivative financial instruments
    F - 35




---



##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 3.
    
    Financial risk management (continued)
  
    
    Futures
  2010MarketNotional
    
    
    Value Asset/Type of derivative contract
    
    Tons
    
    
    amount
    
    
    (Liability)
    
    
    (Loss)/ GainFutures:SaleCorn
    
    
    6.9
    
    
    
    149
    
    
    
    141
    
    
    
    141Soybean
    
    
    24.6
    
    
    
    5,939
    
    
    
    (2,789
    )
    
    
    (2,789
    )Sugar
    
    
    34.3
    
    
    
    15,955
    
    
    
    (3,287
    )
    
    
    (3,287
    )Coffee
    
    
    0.8
    
    
    
    3,213
    
    
    
    (2,231
    )
    
    
    (2,231
    )Wheat
    
    
    0.6
    
    
    
    111
    
    
    
    (4
    )
    
    
    (4
    )Total
    
    
    67.2
    
    
    
    25,367
    
    
    
    (8,170
    )
    
    
    (8,170
    )
  2009MarketNotional
    
    
    Value Asset/Type of derivative contract
    
    Tons
    
    
    amount
    
    
    (Liability)
    
    
    (Loss)/ GainFutures:SaleCorn
    
    
    26.8
    
    
    
    3,835
    
    
    
    (19
    )
    
    
    (19
    )Soybean
    
    
    20.1
    
    
    
    4,740
    
    
    
    (184
    )
    
    
    (184
    )Sugar
    
    
    92.2
    
    
    
    42,283
    
    
    
    (11,712
    )
    
    
    (11,712
    )Coffee
    
    
    0.5
    
    
    
    16
    
    
    
    99
    
    
    
    99Total
    
    
    139.6
    
    
    
    50,874
    
    
    
    (11,816
    )
    
    
    (11,816
    )
  2008MarketNotional
    
    
    Value Asset/Type of derivative contract
    
    Tons
    
    
    amount
    
    
    (Liability)
    
    
    (Loss)/GainFutures:SaleCorn
    
    
    15.9
    
    
    
    2,053
    
    
    
    249
    
    
    
    249Soybean
    
    
    30.9
    
    
    
    8,190
    
    
    
    1,323
    
    
    
    1,323Wheat
    
    
    1.5
    
    
    
    208
    
    
    
    5
    
    
    
    5Total
    
    
    48.3
    
    
    
    10,451
    
    
    
    1,577
    
    
    
    1,577
   F - 36




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 3.
    
    Financial risk management (continued)
 
    
    Floating-to-fixed interest rate swaps
     4.
    
    Critical accounting estimates and judgments
    F - 37




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 4.
    
    Critical accounting estimates and judgments (continued)
 (a)
    
    Business combinations  purchase price allocation
  (b) Impairment testing
        F - 38




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 4.
    
    Critical accounting estimates and judgments (continued)
    CGUs tested based on a fair-value-less-costs-to-sell model for the years ended December 31,
2010, 2009 and 2008:
      
    
    Current soil productivity and yields;
    
    Potential soil productivity based on market participant best use of soil property;
    
    Projected gross margin derived from soil use;
    
    Rental value obtained for soil use, if applicable;
    
    Similar comparable farmland property within the topographic area.
   F - 39




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 4. Critical accounting estimates and judgments (continued)
  December 31,
    
    
    December 31,
    
    
    December 31,CGU / Operating segment / Country
    
    2010
    
    
    2009
    
    
    2008La Carolina / Crops / Argentina
    
    
    176
    
    
    
    189
    
    
    
    209La Carolina / Cattle / Argentina
    
    
    29
    
    
    
    31
    
    
    
    34El Orden / Crops / Argentina
    
    
    215
    
    
    
    218
    
    
    
    240El Orden / Cattle / Argentina
    
    
    35
    
    
    
    36
    
    
    
    40La Guarida / Crops / Argentina
    
    
    2,574
    
    
    
    3,141
    
    
    
    3,187La Guarida / Cattle / Argentina
    
    
    255
    
    
    
    304
    
    
    
    309Los Guayacanes / Crops / Argentina
    
    
    1,966
    
    
    
    2,426
    
    
    
    2,463Doña Marina / Rice / Argentina
    
    
    7,023
    
    
    
    
    
    
    
    Closing net book amount of
goodwill allocated to CGUs (Note
8)
    
    
    12,273
    
    
    
    6,345
    
    
    
    6,482Closing net book amount of PPE
items and other assets
    
    
    76,779
    
    
    
    52,759
    
    
    
    58,294Total assets allocated to 8 CGUs
    
    
    89,052
    
    
    
    59,104
    
    
    
    64,776
   CGUs tested based on a value-in-use model for the years ended December 31, 2010, 2009 and
2008:
   Key Assumptions
    
    2010
    
    2009
    
    2008Financial projections
    
    Covers 8 years for Ivinhema
Covers 4 years for all others
    
    Covers 8 years for Ivinhema
Covers 4 years for all others
    
    Covers 8 years for Ivinhema
Covers 4 years for all othersYield average growth rates
    
    1-3%
    
    
    1-3%
    
    

    1-2%Future pricing increases
    
    2% per annum
    
    2% per annum
    
    2% per annumFuture cost increases
    
    2% per annum
    
    2% per annum
    
    2% per annumDiscount rates
    

    8.67%
    
    

    9.81%
    
    

    12.4%Perpetuity rate
    

    2.5%
    
    

    2.5%
    
    
    2.5%
  F - 40




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 4. Critical accounting estimates and judgments (continued)
   December 31,
    
    
    December 31,
    
    
    December 31,CGU/ Operating segment
    
    2010
    
    
    2009
    
    
    2008Ivinhema / Sugar, Ethanol and Energy
    
    
    9,531
    
    
    
    9,120
    
    
    
    6,796UMA / Sugar, Ethanol and Energy
    
    
    3,575
    
    
    
    3,421
    
    
    
    2,549UMA (f.k.a. Alfenas Café Ltda) / Coffee
    
    
    1,115
    
    
    
    1,067
    
    
    
    794Closing net book amount of goodwill
allocated to CGUs (Note 8)
    
    
    14,221
    
    
    
    13,608
    
    
    
    10,139Closing net book amount of PPE items
and other assets
    
    
    88,324
    
    
    
    90,157
    
    
    
    85,981Total assets allocated to 3 CGUs
    
    
    102,545
    
    
    
    103,765
    
    
    
    96,120
    (c) Biological assets
    F - 41




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 4. Critical accounting estimates and judgments (continued)
   (d) Fair value of derivatives and other financial instruments
  (e) Income taxes
   (f) Allowance for trade receivables
   F - 42




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 5. Segment information
   
    
    The Groups Farmingis further comprised of five 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
and handling and drying services to third parties. 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 of raw milk,
which is processed into manufactured products and marketed through the Groups joint
venture La Lácteo;
    
    The Groups CoffeeSegment consists of cultivating coffee beans and
marketing own and third partys coffee production;
    
    The Groups CattleSegment consists of purchasing and fattening of
beef cattle for sale to meat processors and local livestock auction markets. In
December 2009, the Group strategically decided to sell a significant amount of heads
of cattle from owned farmlands to Quickfood S.A., an international third party meat
processor. Additionally, the contract provides for the third party to lease the
Groups farmland under an operating lease agreement to raise and fatten the purchased
cattle. As required by the Antitrust Law, the Group reported this transaction to the
Argentine Antitrust Commission for formal approval. As of the date of these
consolidated financial statements, the authorization is still pending. The Group does
not have any evidence which may indicate this transaction will not be formally
approved.
 
    
    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 for which the Group
generally closes a deal for a
price lower than the lands fair value (generating gains); and (ii) realization of value
through the strategic disposition of assets (generating profits).
  F - 43




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 5. Segment information (continued)
    F - 44




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 5. Segment information (continued)
  Farming
    
    
    Sugar,Farming
    
    
    Ethanol and
    
    
    LandCrops
    
    
    Rice
    
    
    Dairy
    
    
    Coffee
    
    
    Cattle
    
    
    subtotal
    
    
    Energy
    
    
    Transformation
    
    
    Corporate
    
    
    TotalSales of manufactured products and services rendered
    
    
    344
    
    
    
    59,280
    
    
    
    
    
    
    
    2,709
    
    
    
    3,718
    
    
    
    66,051
    
    
    
    228,478
    
    
    
    
    
    
    
    
    
    
    
    294,529Cost of manufactured products sold and services rendered
    
    
    
    
    
    
    (52,017
    )
    
    
    
    
    
    
    (2,546
    )
    
    
    
    
    
    
    (54,563
    )
    
    
    (164,638
    )
    
    
    
    
    
    
    
    
    
    
    (219,201
    )Gross Profit from Manufacturing Activities
    
    
    344
    
    
    
    7,263
    
    
    
    
    
    
    
    163
    
    
    
    3,718
    
    
    
    11,488
    
    
    
    63,840
    
    
    
    
    
    
    
    
    
    
    
    75,328Sales of agricultural produce and biological assets
    
    
    107,818
    
    
    
    2,305
    
    
    
    14,297
    
    
    
    4,863
    
    
    
    2,407
    
    
    
    131,690
    
    
    
    48
    
    
    
    
    
    
    
    
    
    
    
    131,738Cost of agricultural produce sold and direct agricultural selling expenses
    
    
    (107,818
    )
    
    
    (2,305
    )
    
    
    (14,297
    )
    
    
    (4,863
    )
    
    
    (2,407
    )
    
    
    (131,690
    )
    
    
    (48
    )
    
    
    
    
    
    
    
    
    
    
    (131,738
    )Initial recognition and changes in fair value of biological assets and
agricultural produce
    
    
    38,879
    
    
    
    9,360
    
    
    
    9,129
    
    
    
    (2,630
    )
    
    
    737
    
    
    
    55,475
    
    
    
    (86,003
    )
    
    
    
    
    
    
    
    
    
    
    (30,528
    )Gain from changes in net realizable value of agricultural produce after
harvest
    
    
    7,482
    
    
    
    
    
    
    
    
    
    
    
    517
    
    
    
    
    
    
    
    7,999
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,999Gross Profit / (loss) from Agricultural Activities
    
    
    46,361
    
    
    
    9,360
    
    
    
    9,129
    
    
    
    (2,113
    )
    
    
    737
    
    
    
    63,474
    
    
    
    (86,003
    )
    
    
    
    
    
    
    
    
    
    
    (22,529
    )Margin on Manufacturing and Agricultural Activities Before Operating
Expenses
    
    
    46,705
    
    
    
    16,623
    
    
    
    9,129
    
    
    
    (1,950
    )
    
    
    4,455
    
    
    
    74,962
    
    
    
    (22,163
    )
    
    
    
    
    
    
    
    
    
    
    52,799General and administrative expenses
    
    
    (7,087
    )
    
    
    (3,773
    )
    
    
    (2,910
    )
    
    
    (983
    )
    
    
    (350
    )
    
    
    (15,103
    )
    
    
    (19,080
    )
    
    
    
    
    
    
    (22,379
    )
    
    
    (56,562
    )Selling expenses
    
    
    (1,522
    )
    
    
    (8,154
    )
    
    
    (333
    )
    
    
    (655
    )
    
    
    (175
    )
    
    
    (10,839
    )
    
    
    (41,689
    )
    
    
    
    
    
    
    
    
    
    
    (52,528
    )Other operating income, net
    
    
    (6,194
    )
    
    
    345
    
    
    
    
    
    
    
    (2,165
    )
    
    
    70
    
    
    
    (7,944
    )
    
    
    5,305
    
    
    
    20,837
    
    
    
    26
    
    
    
    18,224Share of loss of joint ventures
    
    
    
    
    
    
    
    
    
    
    (50
    )
    
    
    
    
    
    
    
    
    
    
    (50
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (50
    )Profit / (loss) from Operations Before Financing and Taxation
    
    
    31,902
    
    
    
    5,041
    
    
    
    5,836
    
    
    
    (5,753
    )
    
    
    4,000
    
    
    
    41,026
    
    
    
    (77,627
    )
    
    
    20,837
    
    
    
    (22,353
    )
    
    
    (38,117
    )Depreciation and amortization
    
    
    1,711
    
    
    
    2,080
    
    
    
    423
    
    
    
    449
    
    
    
    333
    
    
    
    4,996
    
    
    
    32,567
    
    
    
    
    
    
    
    
    
    
    
    37,563Initial recognition and changes in fair value of biological assets
(unrealized)
    
    
    8,719
    
    
    
    6,273
    
    
    
    3,610
    
    
    
    (2,450
    )
    
    
    (36
    )
    
    
    16,116
    
    
    
    (96,795
    )
    
    
    
    
    
    
    
    
    
    
    (80,679
    )Initial recognition and changes in fair value of agricultural produce
(unrealized)
    
    
    7,229
    
    
    
    742
    
    
    
    
    
    
    
    (71
    )
    
    
    
    
    
    
    7,900
    
    
    
    405
    
    
    
    
    
    
    
    
    
    
    
    8,305Initial recognition and changes in fair value of biological assets and
agricultural produce (realized)
    
    
    22,931
    
    
    
    2,345
    
    
    
    5,519
    
    
    
    (109
    )
    
    
    773
    
    
    
    31,459
    
    
    
    10,387
    
    
    
    
    
    
    
    
    
    
    
    41,846Gain from changes in net realizable value of agricultural produce after
harvest (unrealized)
    
    
    2,050
    
    
    
    
    
    
    
    
    
    
    
    (523
    )
    
    
    
    
    
    
    1,527
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,527Gain from changes in net realizable value of agricultural produce after
harvest (realized)
    
    
    5,432
    
    
    
    
    
    
    
    
    
    
    
    1,040
    
    
    
    
    
    
    
    6,472
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,472Property, plant and equipment, net
    
    
    204.454
    
    
    
    50,899
    
    
    
    4,202
    
    
    
    25,265
    
    
    
    18,831
    
    
    
    303,650
    
    
    
    448,342
    
    
    
    
    
    
    
    
    
    
    
    751,992Investment property
    
    
    
    
    
    
    1,168
    
    
    
    
    
    
    
    
    
    
    
    20,249
    
    
    
    21,417
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21,417Goodwill
    
    
    4,931
    
    
    
    7,023
    
    
    
    
    
    
    
    1,115
    
    
    
    319
    
    
    
    13,388
    
    
    
    13,106
    
    
    
    
    
    
    
    
    
    
    
    26,494Biological assets
    
    
    31,247
    
    
    
    21,555
    
    
    
    7,130
    
    
    
    21,577
    
    
    
    401
    
    
    
    81,910
    
    
    
    104,847
    
    
    
    
    
    
    
    
    
    
    
    186,757Investment in joint ventures
    
    
    
    
    
    
    
    
    
    
    6,271
    
    
    
    
    
    
    
    
    
    
    
    6,271
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,271Inventories
    
    
    22,926
    
    
    
    8,422
    
    
    
    883
    
    
    
    7,023
    
    
    
    61
    
    
    
    39,315
    
    
    
    17,855
    
    
    
    
    
    
    
    
    
    
    
    57,170Total segment assets
    
    
    263,299
    
    
    
    89,066
    
    
    
    19,063
    
    
    
    54,980
    
    
    
    39,542
    
    
    
    465,950
    
    
    
    584,151
    
    
    
    
    
    
    
    
    
    
    
    1,051,101Borrowings
    
    
    (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 - 45




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 5. Segment information (continued)
  Farming
    
    
    Sugar,Farming
    
    
    Ethanol and
    
    
    LandCrops
    
    
    Rice
    
    
    Dairy
    
    
    Coffee
    
    
    Cattle
    
    
    subtotal
    
    
    Energy
    
    
    Transformation
    
    
    Corporate
    
    
    TotalSales of manufactured products and services rendered
    
    
    9,667
    
    
    
    67,317
    
    
    
    752
    
    
    
    7,984
    
    
    
    172
    
    
    
    85,892
    
    
    
    97,494
    
    
    
    
    
    
    
    
    
    
    
    183,386Cost of manufactured products sold and services rendered
    
    
    (5,447
    )
    
    
    (56,576
    )
    
    
    (613
    )
    
    
    (7,120
    )
    
    
    
    
    
    
    (69,756
    )
    
    
    (110,327
    )
    
    
    
    
    
    
    
    
    
    
    (180,083
    )Gross Profit / (loss) from Manufacturing Activities
    
    
    4,220
    
    
    
    10,741
    
    
    
    139
    
    
    
    864
    
    
    
    172
    
    
    
    16,136
    
    
    
    (12,833
    )
    
    
    
    
    
    
    
    
    
    
    3,303Sales of agricultural produce and biological assets
    
    
    82,362
    
    
    
    2,033
    
    
    
    11,142
    
    
    
    6,281
    
    
    
    28,306
    
    
    
    130,124
    
    
    
    93
    
    
    
    
    
    
    
    
    
    
    
    130,217Cost of agricultural produce sold and direct agricultural selling expenses
    
    
    (82,362
    )
    
    
    (2,033
    )
    
    
    (11,142
    )
    
    
    (6,281
    )
    
    
    (28,306
    )
    
    
    (130,124
    )
    
    
    (93
    )
    
    
    
    
    
    
    
    
    
    
    (130,217
    )Initial recognition and changes in fair value of biological assets and
agricultural produce
    
    
    6,563
    
    
    
    12,170
    
    
    
    3,374
    
    
    
    (16,207
    )
    
    
    4,704
    
    
    
    10,604
    
    
    
    61,064
    
    
    
    
    
    
    
    
    
    
    
    71,668Gain from changes in net realizable value of agricultural produce after
harvest
    
    
    11,362
    
    
    
    191
    
    
    
    
    
    
    
    1,234
    
    
    
    
    
    
    
    12,787
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,787Gross Profit / (loss) from Agricultural Activities
    
    
    17,925
    
    
    
    12,361
    
    
    
    3,374
    
    
    
    (14,973
    )
    
    
    4,704
    
    
    
    23,391
    
    
    
    61,064
    
    
    
    
    
    
    
    
    
    
    
    84,455Margin on Manufacturing and Agricultural Activities Before Operating
Expenses
    
    
    22,145
    
    
    
    23,102
    
    
    
    3,513
    
    
    
    (14,109
    )
    
    
    4,876
    
    
    
    39,527
    
    
    
    48,231
    
    
    
    
    
    
    
    
    
    
    
    87,758General and administrative expenses
    
    
    (6,280
    )
    
    
    (2,883
    )
    
    
    (2,221
    )
    
    
    (2,126
    )
    
    
    (2,909
    )
    
    
    (16,419
    )
    
    
    (13,922
    )
    
    
    
    
    
    
    (22,052
    )
    
    
    (52,393
    )Selling expenses
    
    
    (1,587
    )
    
    
    (7,485
    )
    
    
    (777
    )
    
    
    (1,353
    )
    
    
    (1,045
    )
    
    
    (12,247
    )
    
    
    (18,922
    )
    
    
    
    
    
    
    
    
    
    
    (31,169
    )Other operating income, net
    
    
    4,776
    
    
    
    (942
    )
    
    
    (108
    )
    
    
    806
    
    
    
    377
    
    
    
    4,909
    
    
    
    (10,467
    )
    
    
    18,839
    
    
    
    (210
    )
    
    
    13,071Share of loss of joint ventures
    
    
    
    
    
    
    
    
    
    
    (294
    )
    
    
    
    
    
    
    
    
    
    
    (294
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (294
    )Profit / (loss) from Operations Before Financing and Taxation
    
    
    19,054
    
    
    
    11,792
    
    
    
    113
    
    
    
    (16,782
    )
    
    
    1,299
    
    
    
    15,476
    
    
    
    4,920
    
    
    
    18,839
    
    
    
    (22,262
    )
    
    
    16,973Depreciation and amortization
    
    
    2,066
    
    
    
    1,452
    
    
    
    403
    
    
    
    570
    
    
    
    353
    
    
    
    4,844
    
    
    
    25,512
    
    
    
    
    
    
    
    
    
    
    
    30,356Initial recognition and changes in fair value of biological assets
(unrealized)
    
    
    4,433
    
    
    
    6,759
    
    
    
    32
    
    
    
    (12,662
    )
    
    
    127
    
    
    
    (1,311
    )
    
    
    57,335
    
    
    
    
    
    
    
    
    
    
    
    56,024Initial recognition and changes in fair value of agricultural produce
(unrealized)
    
    
    1,485
    
    
    
    
    
    
    
    
    
    
    
    (3,043
    )
    
    
    
    
    
    
    (1,558
    )
    
    
    1,375
    
    
    
    
    
    
    
    
    
    
    
    (183
    )Initial recognition and changes in fair value of biological assets and
agricultural produce (realized)
    
    
    645
    
    
    
    5,411
    
    
    
    3,342
    
    
    
    (502
    )
    
    
    4,577
    
    
    
    13,473
    
    
    
    2,354
    
    
    
    
    
    
    
    
    
    
    
    15,827Gain from changes in net realizable value of agricultural produce after
harvest (unrealized)
    
    
    134
    
    
    
    
    
    
    
    
    
    
    
    (7
    )
    
    
    
    
    
    
    127
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    127Gain from changes in net realizable value of agricultural produce after
harvest (realized)
    
    
    11,228
    
    
    
    191
    
    
    
    
    
    
    
    1,241
    
    
    
    
    
    
    
    12,660
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,660Property, plant and equipment, net
    
    
    248,594
    
    
    
    31,282
    
    
    
    10,652
    
    
    
    2,680
    
    
    
    767
    
    
    
    293,975
    
    
    
    388,903
    
    
    
    
    
    
    
    
    
    
    
    682,878Investment property
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21,246
    
    
    
    21,246
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21,246Goodwill
    
    
    6,110
    
    
    
    
    
    
    
    
    
    
    
    1,067
    
    
    
    237
    
    
    
    7,414
    
    
    
    12,539
    
    
    
    
    
    
    
    
    
    
    
    19,953Biological assets
    
    
    27,467
    
    
    
    11,524
    
    
    
    4,313
    
    
    
    21,634
    
    
    
    815
    
    
    
    65,753
    
    
    
    164,701
    
    
    
    
    
    
    
    
    
    
    
    230,454Investment in joint ventures
    
    
    
    
    
    
    
    
    
    
    6,506
    
    
    
    
    
    
    
    
    
    
    
    6,506
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,506Inventories
    
    
    23,832
    
    
    
    9,460
    
    
    
    1,086
    
    
    
    1,992
    
    
    
    716
    
    
    
    37,086
    
    
    
    20,816
    
    
    
    
    
    
    
    
    
    
    
    57,902Total segment assets
    
    
    306,003
    
    
    
    52,266
    
    
    
    22,557
    
    
    
    27,373
    
    
    
    23,781
    
    
    
    431,980
    
    
    
    586,959
    
    
    
    
    
    
    
    
    
    
    
    1,018,939Borrowings
    
    
    63,893
    
    
    
    39,850
    
    
    
    9,963
    
    
    
    3,493
    
    
    
    
    
    
    
    117,199
    
    
    
    189,582
    
    
    
    
    
    
    
    
    
    
    
    306,781Total segment liabilities
    
    
    63,893
    
    
    
    39,850
    
    
    
    9,963
    
    
    
    3,493
    
    
    
    
    
    
    
    117,199
    
    
    
    189,582
    
    
    
    
    
    
    
    
    
    
    
    306,781
  F - 46




---



##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 5. Segment information (continued)
  Farming
    
    
    Sugar,Farming
    
    
    Ethanol and
    
    
    LandCrops
    
    
    Rice
    
    
    Dairy
    
    
    Coffee
    
    
    Cattle
    
    
    subtotal
    
    
    Energy
    
    
    Transformation
    
    
    Corporate
    
    
    TotalSales of manufactured products and services rendered
    
    
    3,134
    
    
    
    53,280
    
    
    
    2,171
    
    
    
    8,544
    
    
    
    164
    
    
    
    67,293
    
    
    
    49,880
    
    
    
    
    
    
    
    
    
    
    
    117,173Cost of manufactured products sold and services rendered
    
    
    (2,807
    )
    
    
    (39,862
    )
    
    
    (1,849
    )
    
    
    (6,978
    )
    
    
    
    
    
    
    (51,496
    )
    
    
    (54,087
    )
    
    
    
    
    
    
    
    
    
    
    (105,583
    )Gross Profit / (loss) from Manufacturing Activities
    
    
    327
    
    
    
    13,418
    
    
    
    322
    
    
    
    1,566
    
    
    
    164
    
    
    
    15,797
    
    
    
    (4,207
    )
    
    
    
    
    
    
    
    
    
    
    11,590Sales of agricultural produce and biological assets
    
    
    92,853
    
    
    
    3,645
    
    
    
    12,650
    
    
    
    7,404
    
    
    
    9,193
    
    
    
    125,745
    
    
    
    1,291
    
    
    
    
    
    
    
    
    
    
    
    127,036Cost of agricultural produce sold and direct agricultural selling expenses
    
    
    (92,853
    )
    
    
    (3,645
    )
    
    
    (12,650
    )
    
    
    (7,404
    )
    
    
    (9,193
    )
    
    
    (125,745
    )
    
    
    (1,291
    )
    
    
    
    
    
    
    
    
    
    
    (127,036
    )Initial recognition and changes in fair value of biological assets and
agricultural produce
    
    
    28,005
    
    
    
    7,854
    
    
    
    2,633
    
    
    
    4,485
    
    
    
    3,788
    
    
    
    46,765
    
    
    
    14,235
    
    
    
    
    
    
    
    
    
    
    
    61,000Gain from changes in net realizable value of agricultural produce after
harvest
    
    
    2,211
    
    
    
    
    
    
    
    
    
    
    
    (950
    )
    
    
    
    
    
    
    1,261
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,261Gross Profit from Agricultural Activities
    
    
    30,216
    
    
    
    7,854
    
    
    
    2,633
    
    
    
    3,535
    
    
    
    3,788
    
    
    
    48,026
    
    
    
    14,235
    
    
    
    
    
    
    
    
    
    
    
    62,261Margin on Manufacturing and Agricultural Activities Before Operating
Expenses
    
    
    30,543
    
    
    
    21,272
    
    
    
    2,955
    
    
    
    5,101
    
    
    
    3,952
    
    
    
    63,823
    
    
    
    10,028
    
    
    
    
    
    
    
    
    
    
    
    73,851General and administrative expenses
    
    
    (3,885
    )
    
    
    (398
    )
    
    
    (1,835
    )
    
    
    (3,308
    )
    
    
    (2,206
    )
    
    
    (11,632
    )
    
    
    (12,646
    )
    
    
    
    
    
    
    (21,355
    )
    
    
    (45,633
    )Selling expenses
    
    
    (3,959
    )
    
    
    (7,647
    )
    
    
    (967
    )
    
    
    (902
    )
    
    
    (473
    )
    
    
    (13,948
    )
    
    
    (10,548
    )
    
    
    
    
    
    
    
    
    
    
    (24,496
    )Other operating income, net
    
    
    4,824
    
    
    
    29
    
    
    
    18
    
    
    
    (27
    )
    
    
    16
    
    
    
    4,860
    
    
    
    211
    
    
    
    13,974
    
    
    
    (1,722
    )
    
    
    17,323Excess of fair value of net assets acquired over cost
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,227
    
    
    
    
    
    
    
    1,227Share of loss of joint ventures
    
    
    
    
    
    
    
    
    
    
    (838
    )
    
    
    
    
    
    
    
    
    
    
    (838
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (838
    )Profit / (loss) from Operations Before Financing and Taxation
    
    
    27,523
    
    
    
    13,256
    
    
    
    (667
    )
    
    
    864
    
    
    
    1,289
    
    
    
    42,265
    
    
    
    (12,955
    )
    
    
    15,201
    
    
    
    (23,077
    )
    
    
    21,434Depreciation and amortization
    
    
    6,517
    
    
    
    710
    
    
    
    348
    
    
    
    798
    
    
    
    517
    
    
    
    8,890
    
    
    
    19,424
    
    
    
    
    
    
    
    
    
    
    
    28,314Initial recognition and changes in fair value of biological assets
(unrealized)
    
    
    332
    
    
    
    
    
    
    
    1,840
    
    
    
    3,355
    
    
    
    2,567
    
    
    
    8,094
    
    
    
    13,448
    
    
    
    
    
    
    
    
    
    
    
    21,542Initial recognition and changes in fair value of agricultural produce
(unrealized)
    
    
    3,551
    
    
    
    
    
    
    
    
    
    
    
    931
    
    
    
    
    
    
    
    4,482
    
    
    
    298
    
    
    
    
    
    
    
    
    
    
    
    4,780Initial recognition and changes in fair value of biological assets and
agricultural produce (realized)
    
    
    24,122
    
    
    
    7,854
    
    
    
    793
    
    
    
    199
    
    
    
    1,221
    
    
    
    34,189
    
    
    
    489
    
    
    
    
    
    
    
    
    
    
    
    34,678Gain from changes in net realizable value of agricultural produce after
harvest (unrealized)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (99
    )
    
    
    
    
    
    
    (99
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (99
    )Gain from changes in net realizable value of agricultural produce after
harvest (realized)
    
    
    2,211
    
    
    
    
    
    
    
    
    
    
    
    (851
    )
    
    
    
    
    
    
    1,360
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,360Property, plant and equipment, net
    
    
    232,465
    
    
    
    50,804
    
    
    
    12,069
    
    
    
    12,523
    
    
    
    33,041
    
    
    
    340,902
    
    
    
    230,517
    
    
    
    
    
    
    
    
    
    
    
    571,419Spin-off assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    45,311
    
    
    
    
    
    
    
    45,311Goodwill
    
    
    3,610
    
    
    
    
    
    
    
    
    
    
    
    794
    
    
    
    383
    
    
    
    4,787
    
    
    
    11,834
    
    
    
    
    
    
    
    
    
    
    
    16,621Biological assets
    
    
    21,059
    
    
    
    6,908
    
    
    
    4,732
    
    
    
    25,453
    
    
    
    19,629
    
    
    
    77,781
    
    
    
    48,167
    
    
    
    
    
    
    
    
    
    
    
    125,948Investment in joint ventures
    
    
    
    
    
    
    
    
    
    
    7,508
    
    
    
    
    
    
    
    
    
    
    
    7,508
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,508Inventories
    
    
    21,201
    
    
    
    9,212
    
    
    
    
    
    
    
    5,326
    
    
    
    878
    
    
    
    36,617
    
    
    
    24,604
    
    
    
    
    
    
    
    
    
    
    
    61,221Total segment assets
    
    
    278,335
    
    
    
    66,924
    
    
    
    24,309
    
    
    
    44,096
    
    
    
    53,931
    
    
    
    467,595
    
    
    
    315,122
    
    
    
    45,311
    
    
    
    
    
    
    
    828,028Borrowings
    
    
    45,322
    
    
    
    36,258
    
    
    
    9,065
    
    
    
    
    
    
    
    
    
    
    
    90,645
    
    
    
    137,668
    
    
    
    
    
    
    
    
    
    
    
    228,313Total segment liabilities
    
    
    45,322
    
    
    
    36,258
    
    
    
    9,065
    
    
    
    
    
    
    
    
    
    
    
    90,645
    
    
    
    137,668
    
    
    
    
    
    
    
    
    
    
    
    228,313
  F - 47




---



##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 5. Segment information (continued)
   2010
    
    
    2009
    
    
    2008Total reportable assets as per
Segment Information
    
    
    1,050,101
    
    
    
    1,018,939
    
    
    
    828,028Intangible assets (excluding goodwill)
    
    
    2,159
    
    
    
    1,906
    
    
    
    1,487Deferred income tax assets
    
    
    67,463
    
    
    
    45,113
    
    
    
    18,713Trade and other receivables
    
    
    149,957
    
    
    
    128,277
    
    
    
    84,540Other assets
    
    
    26
    
    
    
    34
    
    
    
    87Derivative financial instruments
    
    
    876
    
    
    
    99
    
    
    
    2,019Cash and cash equivalents
    
    
    70,269
    
    
    
    74,806
    
    
    
    93,360Total assets as per the Statement of
Financial Position
    
    
    1,340,851
    
    
    
    1,269,174
    
    
    
    1,028,234
   2010
    
    
    2009
    
    
    2008Total reportable liabilities as per
Segment Information
    
    
    389,472
    
    
    
    306,781
    
    
    
    228,313Trade and other payables
    
    
    81,021
    
    
    
    68,920
    
    
    
    52,760Deferred income tax liabilities
    
    
    111,495
    
    
    
    107,045
    
    
    
    94,627Payroll and social liabilities
    
    
    16,656
    
    
    
    11,185
    
    
    
    6,859Provisions for other liabilities
    
    
    9,207
    
    
    
    4,978
    
    
    
    1,601Current income tax liabilities
    
    
    978
    
    
    
    222
    
    
    
    1,487Derivative financial instruments
    
    
    8,920
    
    
    
    12,887
    
    
    
    4,159Total liabilities as per the Statement
of Financial Position
    
    
    617,749
    
    
    
    512,018
    
    
    
    389,806
   F - 48




---



##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 5. Segment information (continued)
  Argentina
    
    
    Brazil
    
    
    Uruguay
    
    
    TotalProperty, plant and equipment
    
    
    246,602
    
    
    
    495,075
    
    
    
    10,315
    
    
    
    751,992Investment property
    
    
    21,417
    
    
    
    
    
    
    
    
    
    
    
    21,417Intangible assets
    
    
    1,115
    
    
    
    1,044
    
    
    
    
    
    
    
    2,159Goodwill
    
    
    12,272
    
    
    
    14,222
    
    
    
    
    
    
    
    26,494Investment in joint ventures
    
    
    6,271
    
    
    
    
    
    
    
    
    
    
    
    6,271Non-current portion of
biological assets
    
    
    7,169
    
    
    
    97,047
    
    
    
    
    
    
    
    104,216Initial recognition and
changes in fair value of
biological assets and
agricultural produce
    
    
    54,226
    
    
    
    (86,557
    )
    
    
    1,803
    
    
    
    (30,528
    )Gain from changes in net
realizable value of
agricultural produce after
harvest
    
    
    8,157
    
    
    
    (123
    )
    
    
    (35
    )
    
    
    7,999Sales of manufactured
products sold and services
rendered
    
    
    62,455
    
    
    
    232,074
    
    
    
    
    
    
    
    294,529Sales of agricultural
produce and biological
assets
    
    
    109,387
    
    
    
    17,158
    
    
    
    5,193
    
    
    
    131,738
  Argentina
    
    
    Brazil
    
    
    Uruguay
    
    
    TotalProperty, plant and equipment
    
    
    228,723
    
    
    
    430,175
    
    
    
    23,980
    
    
    
    682,878Investment property
    
    
    21,246
    
    
    
    
    
    
    
    
    
    
    
    21,246Intangible assets
    
    
    243
    
    
    
    1,663
    
    
    
    
    
    
    
    1,906Goodwill
    
    
    6,347
    
    
    
    13,606
    
    
    
    
    
    
    
    19,953Investment in joint ventures
    
    
    6,506
    
    
    
    
    
    
    
    
    
    
    
    6,506Non-current portion of
biological assets
    
    
    4,379
    
    
    
    165,968
    
    
    
    
    
    
    
    170,347Initial recognition and
changes in fair value of
biological assets and
agricultural produce
    
    
    26,995
    
    
    
    42,348
    
    
    
    2,325
    
    
    
    71,668Gain from changes in net
realizable value of
agricultural produce after
harvest
    
    
    10,001
    
    
    
    1,794
    
    
    
    992
    
    
    
    12,787Sales of manufactured
products sold and services
rendered
    
    
    68,020
    
    
    
    115,366
    
    
    
    
    
    
    
    183,386Sales of agricultural
produce and biological
assets
    
    
    99,661
    
    
    
    25,304
    
    
    
    5,252
    
    
    
    130,217
  F - 49




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 5. Segment information (continued)
  Argentina
    
    
    Brazil
    
    
    Uruguay
    
    
    TotalProperty, plant and equipment
    
    
    267,945
    
    
    
    284,046
    
    
    
    19,428
    
    
    
    571,419Intangible assets
    
    
    252
    
    
    
    1,235
    
    
    
    
    
    
    
    1,487Goodwill
    
    
    6,483
    
    
    
    10,138
    
    
    
    
    
    
    
    16,621Investment in joint ventures
    
    
    7,508
    
    
    
    
    
    
    
    
    
    
    
    7,508Non-current portion of
biological assets
    
    
    17,342
    
    
    
    58,359
    
    
    
    
    
    
    
    75,701Initial recognition and
changes in fair value of
biological assets and
agricultural produce
    
    
    31,124
    
    
    
    26,639
    
    
    
    3,237
    
    
    
    61,000Gain from changes in net
realizable value of agricultural
produce after harvest
    
    
    1,442
    
    
    
    343
    
    
    
    (524
    )
    
    
    1,261Sales of manufactured
products sold and services
rendered
    
    
    54,990
    
    
    
    62,026
    
    
    
    157
    
    
    
    117,173Sales of agricultural
produce and biological assets
    
    
    92,120
    
    
    
    24,653
    
    
    
    10,263
    
    
    
    127,036
  F - 50




---



##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 6. Property, plant and equipment
  Machinery,equipment,Farmland
    
    
    Buildings and
    
    
    furniture and
    
    
    Computer
    
    
    
    
    
    
    Work inFarmlands
    
    
    improvements
    
    
    facilities
    
    
    fittings
    
    
    equipment
    
    
    Vehicles
    
    
    progress
    
    
    TotalAt January 1, 2008Cost
    
    
    374,299
    
    
    
    3,448
    
    
    
    35,828
    
    
    
    69,973
    
    
    
    326
    
    
    
    1,905
    
    
    
    81,520
    
    
    
    567,299Accumulated depreciation
    
    
    
    
    
    
    (2,395
    )
    
    
    (10,282
    )
    
    
    (15,547
    )
    
    
    (150
    )
    
    
    (908
    )
    
    
    
    
    
    
    (29,282
    )Net book amount
    
    
    374,299
    
    
    
    1,053
    
    
    
    25,546
    
    
    
    54,426
    
    
    
    176
    
    
    
    997
    
    
    
    81,520
    
    
    
    538,017Year ended December 31, 2008Opening net book amount
    
    
    374,299
    
    
    
    1,053
    
    
    
    25,546
    
    
    
    54,426
    
    
    
    176
    
    
    
    997
    
    
    
    81,520
    
    
    
    538,017Exchange differences
    
    
    (43,094
    )
    
    
    (119
    )
    
    
    (10,235
    )
    
    
    (29,346
    )
    
    
    (253
    )
    
    
    126
    
    
    
    (27,270
    )
    
    
    (110,191
    )Additions
    
    
    740
    
    
    
    189
    
    
    
    59,759
    
    
    
    110,181
    
    
    
    1,294
    
    
    
    308
    
    
    
    13,825
    
    
    
    186,296Acquisition of subsidiary
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Transfers
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Disposals
    
    
    (11,466
    )
    
    
    (30
    )
    
    
    (798
    )
    
    
    (2,187
    )
    
    
    (3
    )
    
    
    (75
    )
    
    
    
    
    
    
    (14,559
    )Depreciation charge (Note 25)
    
    
    
    
    
    
    (230
    )
    
    
    (3,926
    )
    
    
    (23,313
    )
    
    
    (343
    )
    
    
    (332
    )
    
    
    
    
    
    
    (28,144
    )Closing net book amount
    
    
    320,479
    
    
    
    863
    
    
    
    70,346
    
    
    
    109,761
    
    
    
    871
    
    
    
    1,024
    
    
    
    68,075
    
    
    
    571,419At December 31, 2008Cost
    
    
    320,479
    
    
    
    3,488
    
    
    
    84,554
    
    
    
    148,621
    
    
    
    1,364
    
    
    
    2,264
    
    
    
    68,075
    
    
    
    628,845Accumulated depreciation
    
    
    
    
    
    
    (2,625
    )
    
    
    (14,208
    )
    
    
    (38,860
    )
    
    
    (493
    )
    
    
    (1,240
    )
    
    
    
    
    
    
    (57,426
    )Net book amount
    
    
    320,479
    
    
    
    863
    
    
    
    70,346
    
    
    
    109,761
    
    
    
    871
    
    
    
    1,024
    
    
    
    68,075
    
    
    
    571,419Year ended December 31, 2009Opening net book amount
    
    
    320,479
    
    
    
    863
    
    
    
    70,346
    
    
    
    109,761
    
    
    
    871
    
    
    
    1,024
    
    
    
    68,075
    
    
    
    571,419Exchange differences
    
    
    5,131
    
    
    
    (665
    )
    
    
    18,053
    
    
    
    35,981
    
    
    
    321
    
    
    
    (112
    )
    
    
    21,568
    
    
    
    80,277Additions
    
    
    2,602
    
    
    
    279
    
    
    
    7,319
    
    
    
    26,242
    
    
    
    427
    
    
    
    574
    
    
    
    65,063
    
    
    
    102,506Transfers
    
    
    
    
    
    
    
    
    
    
    12,815
    
    
    
    34,961
    
    
    
    104
    
    
    
    
    
    
    
    (47,880
    )
    
    
    Transfers to investment
property (Note 7)
    
    
    (21,246
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (21,246
    )Disposals
    
    
    (2,797
    )
    
    
    (16
    )
    
    
    (71
    )
    
    
    (3,943
    )
    
    
    (11
    )
    
    
    (166
    )
    
    
    
    
    
    
    (7,004
    )Reclassification to
non-income tax credits (*)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,631
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (8,631
    )Disposals of subsidiary
    
    
    (4,297
    )
    
    
    
    
    
    
    (26
    )
    
    
    (61
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,384
    )Depreciation charge (Note 25)
    
    
    
    
    
    
    (27
    )
    
    
    (5,782
    )
    
    
    (23,662
    )
    
    
    (330
    )
    
    
    (258
    )
    
    
    
    
    
    
    (30,059
    )Closing net book amount
    
    
    299,872
    
    
    
    434
    
    
    
    102,654
    
    
    
    170,648
    
    
    
    1,382
    
    
    
    1,062
    
    
    
    106,826
    
    
    
    682,878At December 31, 2009Cost
    
    
    299,872
    
    
    
    3,086
    
    
    
    122,644
    
    
    
    233,170
    
    
    
    2,205
    
    
    
    2,560
    
    
    
    106,826
    
    
    
    770,363Accumulated depreciation
    
    
    
    
    
    
    (2,652
    )
    
    
    (19,990
    )
    
    
    (62,522
    )
    
    
    (823
    )
    
    
    (1,498
    )
    
    
    
    
    
    
    (87,485
    )Net book amount
    
    
    299,872
    
    
    
    434
    
    
    
    102,654
    
    
    
    170,648
    
    
    
    1,382
    
    
    
    1,062
    
    
    
    106,826
    
    
    
    682,878
  F - 51




---



##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 6. Property, plant and equipment (continued)
 Machinery,equipment,Farmland
    
    
    Buildings and
    
    
    furniture and
    
    
    Computer
    
    
    
    
    
    
    Work inFarmlands
    
    
    improvements
    
    
    facilities
    
    
    fittings
    
    
    equipment
    
    
    Vehicles
    
    
    progress
    
    
    TotalYear ended December 31, 2010Opening net book amount
    
    
    299,872
    
    
    
    434
    
    
    
    102,654
    
    
    
    170,648
    
    
    
    1,382
    
    
    
    1,062
    
    
    
    106,826
    
    
    
    682,878Exchange differences
    
    
    (4,919
    )
    
    
    (27
    )
    
    
    2,337
    
    
    
    7,272
    
    
    
    45
    
    
    
    (33
    )
    
    
    4,173
    
    
    
    8,848Additions
    
    
    974
    
    
    
    10
    
    
    
    4,964
    
    
    
    22,337
    
    
    
    592
    
    
    
    455
    
    
    
    67,654
    
    
    
    96,986Acquisition of subsidiary (Note 31)
    
    
    13,666
    
    
    
    
    
    
    
    375
    
    
    
    33
    
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    14,076Transfers
    
    
    
    
    
    
    153
    
    
    
    65,398
    
    
    
    68,291
    
    
    
    68
    
    
    
    
    
    
    
    (133,910
    )
    
    
    Transfers from investment
property (Note 7)
    
    
    6,767
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,767Disposals
    
    
    (10,948
    )
    
    
    (153
    )
    
    
    (2,360
    )
    
    
    (456
    )
    
    
    (36
    )
    
    
    (122
    )
    
    
    
    
    
    
    (14,075
    )Reclassification to non-income
tax credits (*)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,271
    )
    
    
    (6,271
    )Depreciation charge (Note 25)
    
    
    
    
    
    
    (172
    )
    
    
    (8,120
    )
    
    
    (28,215
    )
    
    
    (449
    )
    
    
    (261
    )
    
    
    
    
    
    
    (37,217
    )Closing net book amount
    
    
    305,412
    
    
    
    245
    
    
    
    165,248
    
    
    
    239,910
    
    
    
    1,602
    
    
    
    1,103
    
    
    
    38,472
    
    
    
    751,992At December 31, 2010Cost
    
    
    305,412
    
    
    
    3,069
    
    
    
    193,358
    
    
    
    330,647
    
    
    
    2,874
    
    
    
    2,862
    
    
    
    38,472
    
    
    
    876,694Accumulated depreciation
    
    
    
    
    
    
    (2,824
    )
    
    
    (28,110
    )
    
    
    (90,737
    )
    
    
    (1,272
    )
    
    
    (1,759
    )
    
    
    
    
    
    
    (124,702
    )Net book amount
    
    
    305,412
    
    
    
    245
    
    
    
    165,248
    
    
    
    239,910
    
    
    
    1,602
    
    
    
    1,103
    
    
    
    38,472
    
    
    
    751,992
 
 (*)
    
    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 12).  F - 52




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 6. Property, plant and equipment (continued)
     7. Investment property
  2010
    
    
    2009
    
    
    2008Beginning of the year
    
    
    21,246
    
    
    
    
    
    
    
    Acquisition of subsidiary (Note 31)
    
    
    7,935
    
    
    
    
    
    
    
    Transfers (i), (ii)
    
    
    (6,767
    )
    
    
    21,246
    
    
    
    Exchange difference
    
    
    (997
    )
    
    
    
    
    
    
    End of the year
    
    
    21,417
    
    
    
    21,246
    
    
    
    
  2010
    
    
    2009
    
    
    2008Rental income
    
    
    3,718
    
    
    
    172
    
    
    
    
 
 (i)
    
    Transferred from property, plant and equipment in 2009. Relates to farmland rented out to third
parties. See Note 30 for details.(ii)
    
    Transferred to property, plant and equipment in 2010. Relates to finalization of contracts
with third parties.   F - 53




---



##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 8. Intangible assets
  Goodwill
    
    
    Trademarks
    
    
    Software
    
    
    TotalAt January 1, 2008Cost
    
    
    21,157
    
    
    
    2,153
    
    
    
    373
    
    
    
    23,683Accumulated amortization
    
    
    
    
    
    
    (321
    )
    
    
    (147
    )
    
    
    (468
    )Net book amount
    
    
    21,157
    
    
    
    1,832
    
    
    
    226
    
    
    
    23,215Year ended December 31, 2008Opening net book amount
    
    
    21,157
    
    
    
    1,832
    
    
    
    226
    
    
    
    23,215Exchange differences
    
    
    (3,351
    )
    
    
    (397
    )
    
    
    (4
    )
    
    
    (3,752
    )Disposal of subsidiary
    
    
    (1,185
    )
    
    
    
    
    
    
    
    
    
    
    (1,185
    )Amortization charge (i) (Note 25)
    
    
    
    
    
    
    (159
    )
    
    
    (11
    )
    
    
    (170
    )Closing net book amount
    
    
    16,621
    
    
    
    1,276
    
    
    
    211
    
    
    
    18,108At December 31, 2008Cost
    
    
    16,621
    
    
    
    1,756
    
    
    
    369
    
    
    
    18,746Accumulated amortization
    
    
    
    
    
    
    (480
    )
    
    
    (158
    )
    
    
    (638
    )Net book amount
    
    
    16,621
    
    
    
    1,276
    
    
    
    211
    
    
    
    18,108Year ended December 31, 2009Opening net book amount
    
    
    16,621
    
    
    
    1,276
    
    
    
    211
    
    
    
    18,108Exchange differences
    
    
    3,332
    
    
    
    303
    
    
    
    98
    
    
    
    3,733Disposal of subsidiary
    
    
    
    
    
    
    173
    
    
    
    142
    
    
    
    315Amortization charge (i) (Note 25)
    
    
    
    
    
    
    (196
    )
    
    
    (101
    )
    
    
    (297
    )Closing net book amount
    
    
    19,953
    
    
    
    1,556
    
    
    
    350
    
    
    
    21,859At December 31, 2009Cost
    
    
    19,953
    
    
    
    2,232
    
    
    
    609
    
    
    
    22,794Accumulated amortization and
impairment
    
    
    
    
    
    
    (676
    )
    
    
    (259
    )
    
    
    (935
    )Net book amount
    
    
    19,953
    
    
    
    1,556
    
    
    
    350
    
    
    
    21,859Year ended December 31, 2010Opening net book amount
    
    
    19,953
    
    
    
    1,556
    
    
    
    350
    
    
    
    21,859Exchange differences
    
    
    (482
    )
    
    
    742
    
    
    
    31
    
    
    
    291Additions
    
    
    
    
    
    
    6
    
    
    
    27
    
    
    
    33Acquisition of subsidiary (Note
31)
    
    
    7,023
    
    
    
    
    
    
    
    
    
    
    
    7,023Disposals
    
    
    
    
    
    
    (207
    )
    
    
    
    
    
    
    (207
    )Amortization charge (i) (Note 25)
    
    
    
    
    
    
    (213
    )
    
    
    (133
    )
    
    
    (346
    )Closing net book amount
    
    
    26,494
    
    
    
    1,884
    
    
    
    275
    
    
    
    28,653At December 31, 2010Cost
    
    
    26,494
    
    
    
    2,773
    
    
    
    667
    
    
    
    29.934Accumulated amortization
    
    
    
    
    
    
    (889
    )
    
    
    (392
    )
    
    
    (1,281
    )Net book amount
    
    
    26,494
    
    
    
    1,884
    
    
    
    275
    
    
    
    28,653
 
 (i)
    
    An amount of US$ 134; US$ 101 and US$ 11 of amortization charges are included in General and
administrative expenses for the years ended December 31, 2010, 2009 and 2008, respectively. An
amount of US$ 212; US$ 196 and US$ 159 of amortization charges are included in Selling expenses for
the years ended December 31, 2010, 2009 and 2008, respectively. There were no impairment charges
for any of the years presented (see Note 4 (b)).  F - 54




---



##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 9. Biological assets
  2010
    
    
    2009
    
    
    2008Beginning of the year
    
    
    230,454
    
    
    
    125,948
    
    
    
    102,562Increase due to purchases
    
    
    681
    
    
    
    296
    
    
    
    3,276Disposal of subsidiary (Note 15)
    
    
    
    
    
    
    (86
    )
    
    
    (376
    )Initial recognition and changes in
fair value of biological assets (i)
    
    
    (30,528
    )
    
    
    71,668
    
    
    
    61,000Decrease due to harvest
    
    
    (237,465
    )
    
    
    (84,990
    )
    
    
    (54,709
    )Decrease due to sales
    
    
    (2,138
    )
    
    
    (37,014
    )
    
    
    (6,382
    )Costs incurred during the year
    
    
    224,969
    
    
    
    136,625
    
    
    
    49,949Exchange differences
    
    
    784
    
    
    
    18,007
    
    
    
    (29,372
    )End of the year
    
    
    186,757
    
    
    
    230,454
    
    
    
    125,948
 
 (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$ (78,767) for the year ended December 31, 2010
(2009: US$ 52,935; 2008: US$ 25,141).
In 2010, an amount of US$ (60,146) (2009: US$ 29,834; 2008: US$ 29,576) was attributable to price
changes, and an amount of US$ (18,621) (2009: US$ 23,101; 2008: US$ (4,435)) was attributable to
physical changes.  2010
    
    
    2009
    
    
    2008Non-currentCattle for dairy production (i)
    
    
    7,130
    
    
    
    4,313
    
    
    
    4,732Breeding cattle (i)
    
    
    
    
    
    
    
    
    
    
    11,858Other cattle (ii)
    
    
    39
    
    
    
    66
    
    
    
    267Sown land  coffee (iii)
    
    
    18,600
    
    
    
    18,540
    
    
    
    24,763Sown land  sugarcane (iii)
    
    
    78,447
    
    
    
    147,428
    
    
    
    34,081104,216
    
    
    
    170,347
    
    
    
    75,701CurrentBreeding cattle (i)
    
    
    
    
    
    
    
    
    
    
    3,543Other cattle (iv)
    
    
    362
    
    
    
    749
    
    
    
    3,961Sown land  coffee (v)
    
    
    2,977
    
    
    
    3,094
    
    
    
    690Sown land  sugarcane (v)
    
    
    26,400
    
    
    
    17,273
    
    
    
    14,086Sown land  crops (ii)
    
    
    31,247
    
    
    
    27,467
    
    
    
    21,059Sown land  rice (ii)
    
    
    21,555
    
    
    
    11,524
    
    
    
    6,90882,541
    
    
    
    60,107
    
    
    
    50,247Total biological assets
    
    
    186,757
    
    
    
    230,454
    
    
    
    125,948
 
 (i)
    
    Classified as bearer and mature biological assets.(ii)
    
    Classified as consumable and immature biological assets.(iii)
    
    Classified as bearer and immature biological assets.(iv)
    
    As of December 31, 2010, and amount of US$ 186 (2009: 493; 2008: 2,718) was classified as
consumable and mature biological assets, and an amount of US$ 176 (2009: 256; 2008: 1,243) was
classified as consumable and immature biological assets.(v)
    
    As of December 31, 2010, and amount of US$ nil (2009: nil; 2008: nil) was classified as bearer
and mature biological assets, and an amount of US$ 29,378 (2009: 20,367; 2008: 14,776) was
classified as bearer and immature biological assets.  F - 55




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 9. Biological assets (continued)
    10. Investments in joint ventures
    2010
    
    
    2009
    
    
    2008Assets:Non-current assets
    
    
    4,944
    
    
    
    5,008
    
    
    
    3,621Current assets
    
    
    5,697
    
    
    
    5,689
    
    
    
    10,01910,641
    
    
    
    10,697
    
    
    
    13,640Liabilities:Non-current liabilities
    
    
    735
    
    
    
    740
    
    
    
    273Current liabilities
    
    
    3,635
    
    
    
    3,451
    
    
    
    5,8594,370
    
    
    
    4,191
    
    
    
    6,132Net assets of joint venture
    
    
    6,271
    
    
    
    6,506
    
    
    
    7,508
 2010
    
    
    2009
    
    
    2008Income
    
    
    1,989
    
    
    
    2,268
    
    
    
    1,605Expenses
    
    
    (2,039
    )
    
    
    (2,562
    )
    
    
    (2,443
    )Loss after income tax
    
    
    (50
    )
    
    
    (294
    )
    
    
    (838
    )
  F - 56




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 10. Investments in joint ventures (continued)
   11. Financial instruments by category
  Assets at fair
    
    
    SubtotalLoans and
    
    
    value through
    
    
    financial
    
    
    Non-financialreceivables
    
    
    profit and loss
    
    
    assets
    
    
    assets
    
    
    TotalDecember 31, 2010
Assets as per
statement of
financial positionTrade and other
receivables
    
    
    64,964
    
    
    
    
    
    
    
    64,694
    
    
    
    85,263
    
    
    
    149,957Derivative
financial
instruments
    
    
    
    
    
    
    876
    
    
    
    876
    
    
    
    
    
    
    
    876Cash and cash
equivalents
    
    
    70,269
    
    
    
    
    
    
    
    70,269
    
    
    
    
    
    
    
    70,269Total
    
    
    134,963
    
    
    
    876
    
    
    
    135,839
    
    
    
    85,263
    
    
    
    221,102
 Liabilities at
    
    
    Otherfair value
    
    
    financial
    
    
    Subtotalthrough profit
    
    
    liabilities at
    
    
    financial
    
    
    Non-financialand loss
    
    
    amortized cost
    
    
    liabilities
    
    
    liabilities
    
    
    TotalLiabilities as per
statement of
financial positionTrade and other
payables
    
    
    
    
    
    
    72,163
    
    
    
    72,163
    
    
    
    8,858
    
    
    
    81,021Borrowings
(excluding finance
lease liabilities)
    
    
    
    
    
    
    389,024
    
    
    
    389,024
    
    
    
    
    
    
    
    389,024Finance leases
    
    
    
    
    
    
    448
    
    
    
    448
    
    
    
    
    
    
    
    448Derivative
financial
instruments
    
    
    8,920
    
    
    
    
    
    
    
    8,920
    
    
    
    
    
    
    
    8,920Total
    
    
    8,920
    
    
    
    461,635
    
    
    
    470,555
    
    
    
    8,858
    
    
    
    479,413
  F - 57




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 11. Financial instruments by category (continued)
 Assets at fair
    
    
    SubtotalLoans and
    
    
    value through
    
    
    financial
    
    
    Non-financialreceivables
    
    
    profit and loss
    
    
    assets
    
    
    assets
    
    
    TotalDecember 31, 2009
Assets as per
statement of
financial positionTrade and other
receivables
    
    
    60,904
    
    
    
    
    
    
    
    60,904
    
    
    
    67,373
    
    
    
    128,277Derivative
financial
instruments
    
    
    
    
    
    
    99
    
    
    
    99
    
    
    
    
    
    
    
    99Cash and cash
equivalents
    
    
    74,806
    
    
    
    
    
    
    
    74,806
    
    
    
    
    
    
    
    74,806Total
    
    
    135,710
    
    
    
    99
    
    
    
    135,809
    
    
    
    67,373
    
    
    
    203,182Liabilities at
    
    
    Otherfair value
    
    
    financial
    
    
    Subtotalthrough profit
    
    
    liabilities at
    
    
    financial
    
    
    Non-financialand loss
    
    
    amortized cost
    
    
    liabilities
    
    
    liabilities
    
    
    TotalLiabilities as per
statement of
financial positionTrade and other
payables
    
    
    
    
    
    
    58,306
    
    
    
    58,306
    
    
    
    10,614
    
    
    
    68,920Borrowings
(excluding finance
lease liabilities)
    
    
    
    
    
    
    305,861
    
    
    
    305,861
    
    
    
    
    
    
    
    305,861Finance leases
    
    
    
    
    
    
    920
    
    
    
    920
    
    
    
    
    
    
    
    920Derivative
financial
instruments
    
    
    12,887
    
    
    
    
    
    
    
    12,887
    
    
    
    
    
    
    
    12,887Total
    
    
    12,887
    
    
    
    365,087
    
    
    
    377,974
    
    
    
    10,614
    
    
    
    388,588Asset at fair
    
    
    SubtotalLoans and
    
    
    value through
    
    
    financial
    
    
    Non-financialreceivables
    
    
    profit and loss
    
    
    assets
    
    
    assets
    
    
    TotalDecember 31, 2008
Assets as per
statement of
financial positionTrade and other
receivables
    
    
    31,157
    
    
    
    
    
    
    
    31,157
    
    
    
    53,383
    
    
    
    84,540Derivative
financial
instruments
    
    
    
    
    
    
    2,019
    
    
    
    2,019
    
    
    
    
    
    
    
    2,019Cash and cash
equivalents
    
    
    93,360
    
    
    
    
    
    
    
    93,360
    
    
    
    
    
    
    
    93,360Total
    
    
    124,517
    
    
    
    2,019
    
    
    
    126,536
    
    
    
    53,383
    
    
    
    179,919
  F - 58




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 11. Financial instruments by category (continued)
 Liabilities at
    
    
    Otherfair value
    
    
    financial
    
    
    Subtotalthrough  profit
    
    
    liabilities at
    
    
    financial
    
    
    Non-financialand loss
    
    
    amortized cost
    
    
    liabilities
    
    
    liabilities
    
    
    TotalLiabilities as per
statement of
financial positionTrade and other
payables
    
    
    
    
    
    
    42,461
    
    
    
    42,461
    
    
    
    10,299
    
    
    
    52,760Borrowings
(excluding finance
lease liabilities)
    
    
    
    
    
    
    227,431
    
    
    
    227,431
    
    
    
    
    
    
    
    227,431Finance leases
    
    
    
    
    
    
    882
    
    
    
    882
    
    
    
    
    
    
    
    882Derivative
financial
instruments
    
    
    4,159
    
    
    
    
    
    
    
    4,159
    
    
    
    
    
    
    
    4,159Total
    
    
    4,159
    
    
    
    270,774
    
    
    
    274,933
    
    
    
    10,299
    
    
    
    285,232
    Assets/ liabilitiesat fair value
    
    
    Other financialLoans and
    
    
    through profit
    
    
    liabilities atreceivables
    
    
    and loss
    
    
    amortized cost
    
    
    TotalDecember 31, 2010Interest income (i)
    
    
    1,341
    
    
    
    
    
    
    
    
    
    
    
    1,341Interest expense (i)
    
    
    
    
    
    
    
    
    
    
    (34,369
    )
    
    
    (34,369
    )Foreign exchange
gains/ (losses)
(ii)
    
    
    372
    
    
    
    
    
    
    
    (11,029
    )
    
    
    (10,657
    )Loss from
derivative
financial
instruments(iii)
    
    
    
    
    
    
    5,124
    
    
    
    
    
    
    
    5,124Net result
    
    
    1,713
    
    
    
    5,124
    
    
    
    (45,398
    )
    
    
    (38,561
    )
  F - 59




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 11. Financial instruments by category (continued)
 Assets/ liabilitiesat fair value
    
    
    Other financialLoans and
    
    
    through profit
    
    
    liabilities atreceivables
    
    
    and loss
    
    
    amortized cost
    
    
    TotalDecember 31, 2009Interest income (i)
    
    
    472
    
    
    
    
    
    
    
    
    
    
    
    472Interest expense (i)
    
    
    
    
    
    
    
    
    
    
    (28,222
    )
    
    
    (28,222
    )Foreign exchange
gains/ (losses)
(ii)
    
    
    11,939
    
    
    
    
    
    
    
    (13,936
    )
    
    
    (1,997
    )Gain from
derivative
financial
instruments(iii)
    
    
    
    
    
    
    (7,486
    )
    
    
    
    
    
    
    (7,486
    )Net result
    
    
    12,411
    
    
    
    (7,486
    )
    
    
    (42,158
    )
    
    
    (37,233
    )
 Assets/ liabilitiesat fair value
    
    
    Other financialLoans and
    
    
    through profit
    
    
    liabilities atreceivables
    
    
    and loss
    
    
    amortized cost
    
    
    TotalDecember 31, 2008Interest income (i)
    
    
    1,494
    
    
    
    
    
    
    
    
    
    
    
    1,494Interest expense (i)
    
    
    
    
    
    
    
    
    
    
    (23,324
    )
    
    
    (23,324
    )Foreign exchange
gains/ (losses)
(ii)
    
    
    
    
    
    
    
    
    
    
    (24,184
    )
    
    
    (24,184
    )Loss from
derivative
financial
instruments(iii)
    
    
    
    
    
    
    1,848
    
    
    
    
    
    
    
    1,848Net result
    
    
    1,494
    
    
    
    1,848
    
    
    
    (47,508
    )
    
    
    (44,166
    )
 
 (i)
    
    Included in Financial results, net in the statement of income.(ii)
    
    Included in Financial results, net in the statement of income.(iii)
    
    Included in Other operating income, net and Financial results, net in the statement of
income. Determining fair values
    F - 60




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 11. Financial instruments by category (continued)
     2010Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    TotalAssetsDerivative financial instruments
    
    
    876
    
    
    
    
    
    
    
    
    
    
    
    876Total assets
    
    
    876
    
    
    
    
    
    
    
    
    
    
    
    876LiabilitiesDerivative financial instruments
    
    
    2,197
    
    
    
    6,723
    
    
    
    
    
    
    
    8,920Total liabilities
    
    
    2,197
    
    
    
    6,723
    
    
    
    
    
    
    
    8,920
   F - 61




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 11. Financial instruments by category (continued)
 Concept
    
    Pricing Method
    
    Parameters
    
    Pricing ModelFutures
    
    Quoted price
    
    
    
    Options
    
    Quoted price
    
    
    
    Options/ OTC
    
    Quoted price
    
    
    
    MontecarloForeign-currency 
interest-rate swaps
    
    Theoretical price
    
    Swap curve; 
Money market
interest-rate 
curve;
Foreign-exchange
curve.
    
    Present value methodInterest-rate swaps
    
    Theoretical price
    
    Swap curve; 
Money market
interest-rate curve
    
    Present value method
 12. Trade and other receivables, net
 2010
    
    
    2009
    
    
    2008Non currentPrepaid expenses
    
    
    
    
    
    
    4,263
    
    
    
    295Income tax credits
    
    
    3,628
    
    
    
    4,241
    
    
    
    3,984Non-income tax credits (i)
    
    
    8,681
    
    
    
    11,279
    
    
    
    3,521Escrow deposits (ii)
    
    
    
    
    
    
    
    
    
    
    600Receivable from disposal of subsidiary
(iii) (Note 15)
    
    
    13,656
    
    
    
    
    
    
    
    Cash collateral
    
    
    3,079
    
    
    
    1,858
    
    
    
    Other receivables
    
    
    1,708
    
    
    
    424
    
    
    
    212Non current portion
    
    
    30,752
    
    
    
    22,065
    
    
    
    8,612CurrentTrade receivables
    
    
    32,702
    
    
    
    47,894
    
    
    
    24,670Receivables from related parties (Note 33)
    
    
    1,662
    
    
    
    2,554
    
    
    
    4,368Less: Allowance for trade receivables
    
    
    (1,323
    )
    
    
    (906
    )
    
    
    (391
    )Trade receivables  net
    
    
    33,041
    
    
    
    49,542
    
    
    
    28,647Prepaid expenses
    
    
    8,299
    
    
    
    5,530
    
    
    
    5,016Advances to suppliers
    
    
    14,274
    
    
    
    10,167
    
    
    
    15,714Income tax credits
    
    
    6,954
    
    
    
    6,569
    
    
    
    4,548Non-income tax credits (i)
    
    
    38,006
    
    
    
    23,500
    
    
    
    15,842Escrow deposits (ii)
    
    
    
    
    
    
    1,028
    
    
    
    3,683Cash collateral
    
    
    2,342
    
    
    
    2,763
    
    
    
    Receivable from disposal of subsidiary
(iii) (Note 15)
    
    
    10,432
    
    
    
    5,475
    
    
    
    Receivable with related parties (Note 33)
    
    
    291
    
    
    
    796
    
    
    
    180Other receivables
    
    
    5,566
    
    
    
    842
    
    
    
    2,298Subtotal
    
    
    86,164
    
    
    
    56,670
    
    
    
    47,281Current portion
    
    
    119,205
    
    
    
    106,212
    
    
    
    75,928Total trade and other receivables, net
    
    
    149,957
    
    
    
    128,277
    
    
    
    84,540
  F - 62




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 12. Trade and other receivables, net (continued)
      2010
    
    
    2009
    
    
    2008CurrencyUS Dollar
    
    
    53,561
    
    
    
    23,620
    
    
    
    21,504Argentine Peso
    
    
    38,977
    
    
    
    29,504
    
    
    
    35,032Uruguayan Peso
    
    
    697
    
    
    
    6,036
    
    
    
    3,516Brazilian Reais
    
    
    56,722
    
    
    
    69,117
    
    
    
    24,488149,957
    
    
    
    128,277
    
    
    
    84,540
  2010
    
    
    2009
    
    
    2008Up to 3 months
    
    
    7,929
    
    
    
    8,790
    
    
    
    8,6863 to 6 months
    
    
    542
    
    
    
    1,208
    
    
    
    1,435Over 6 months
    
    
    908
    
    
    
    1,257
    
    
    
    2,6709,379
    
    
    
    11,255
    
    
    
    12,791
    F - 63




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 12. Trade and other receivables, net (continued)
  2010
    
    
    2009
    
    
    2008At January 1
    
    
    906
    
    
    
    391
    
    
    
    1,170Charge of the year
    
    
    632
    
    
    
    664
    
    
    
    15Acquisition of subsidiary
    
    
    14
    
    
    
    
    
    
    
    Unused amounts reversed
    
    
    (189
    )
    
    
    
    
    
    
    (787
    )Used during the year
    
    
    
    
    
    
    (113
    )
    
    
    Exchange differences
    
    
    (40
    )
    
    
    (36
    )
    
    
    (7
    )At December 31
    
    
    1,323
    
    
    
    906
    
    
    
    391
         F - 64




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 13. Inventories
 2010
    
    
    2009
    
    
    2008Raw materials
    
    
    25,292
    
    
    
    23,843
    
    
    
    20,584Finished goods
    
    
    25,601
    
    
    
    30,338
    
    
    
    40,506Stocks held by third parties
    
    
    6,267
    
    
    
    3,299
    
    
    
    Others
    
    
    10
    
    
    
    422
    
    
    
    13157,170
    
    
    
    57,902
    
    
    
    61,221
  14. Cash and cash equivalents
 2010
    
    
    2009
    
    
    2008Cash at bank and on hand
    
    
    31,768
    
    
    
    72,903
    
    
    
    93,153Short-term bank deposits
    
    
    38,501
    
    
    
    1,903
    
    
    
    20770,269
    
    
    
    74,806
    
    
    
    93,360
 15. Disposals
  (a) Sales of farmlands
  (b) Sales and spin-off of subsidiaries
    F - 65




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 15. Disposals (continued)
  2010
    
    
    2009
    
    
    2008Farmlands
    
    
    
    
    
    
    
    
    
    
    43,012Trade and other receivables, net
    
    
    
    
    
    
    
    
    
    
    2,299
    
    
    
    
    
    
    
    45,311
  2010
    
    
    2009
    
    
    2008Foreign exchange translation adjustments
    
    
    
    
    
    
    
    
    
    
    4,410
    
    
    
    
    
    
    
    4,410
  16. Shareholders contributions
 Number of
    
    
    Share capital andshares
    
    
    share premiumAt 1 January 2008
    
    
    95,494
    
    
    
    466,603Contributed capital
    
    
    16,926
    
    
    
    149,021At 31 December 2008
    
    
    112,420
    
    
    
    615,624Contributed capital
    
    
    7,580
    
    
    
    67,719At 31 December 2009
    
    
    120,000
    
    
    
    683,343Contributed capital
    
    
    
    
    
    
    At 31 December 2010
    
    
    120,000
    
    
    
    683,343
 17. Equity-settled share-based payments
   F - 66




---



##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 17.
    
    Equity-settled unit-based payments (continued)
     May
    
    
    May
    
    
    May
    
    
    Feb
    
    
    Oct
    
    
    Dec
    
    
    Jan
    
    
    NovGrant Date
    
    2004
    
    
    2005
    
    
    2006
    
    
    2006
    
    
    2006
    
    
    2007
    
    
    2009
    
    
    2009Expected 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
    
    
    
    6,5Risk 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
    
    $
    1,48
    
    
    $
    1,40
    
    
    $
    2,02
    
    
    $
    1,67
    
    
    $
    1,98
    
    
    $
    3,19
    
    
    $
    2,35
    
    
    $
    2,52Possibility of ceasing
employment
before vesting
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %
    
    
    0,17
    %
    
    
    0,56
    %
    
    
    0,92
    %Exercise price
    
    $
    3,88
    
    
    $
    3,88
    
    
    $
    3,88
    
    
    $
    4,74
    
    
    $
    5,75
    
    
    $
    8,55
    
    
    $
    8,93
    
    
    $
    8,93
 Jan
    
    
    Jan
    
    
    Jun
    
    
    Sep
    
    
    SepGrant Date
    
    2010
    
    
    2010
    
    
    2010
    
    
    2010
    
    
    2010Expected volatility
    
    
    22
    %
    
    
    22
    %
    
    
    22
    %
    
    
    22
    %
    
    
    22
    %Expected life
    
    
    6,5
    
    
    
    6,5
    
    
    
    6,5
    
    
    
    6,5
    
    
    
    6,5Risk free rate
    
    
    2,34
    %
    
    
    2,34
    %
    
    
    1,79
    %
    
    
    1,41
    %
    
    
    1,41
    %Expected dividend yield
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %
    
    
    0
    %Fair value per option
    
    $
    2,41
    
    
    $
    2,25
    
    
    $
    2,11
    
    
    $
    2,03
    
    
    $
    2,19Possibility of ceasing
employment
before vesting
    
    
    1,05
    %
    
    
    1,05
    %
    
    
    1,55
    %
    
    
    1,76
    %
    
    
    1,76
    %Exercise price
    
    $
    8,55
    
    
    $
    8,93
    
    
    $
    8,93
    
    
    $
    8,93
    
    
    $
    8,55
  F - 67




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 17. Equity-settled unit-based payments (continued)
   The Adecoagro/ IFH 2004 Stock Incentive Option Plan
   2010
    
    
    2009
    
    
    2008Average
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    Averageexercise
    
    
    
    
    
    
    exercise
    
    
    
    
    
    
    exerciseprice per
    
    
    Options
    
    
    price per
    
    
    Options
    
    
    price per
    
    
    Optionsshare
    
    
    (thousands)
    
    
    share
    
    
    (thousands)
    
    
    share
    
    
    (thousands)At January 1
    
    
    4.49
    
    
    
    3,602
    
    
    
    4.49
    
    
    
    3,602
    
    
    
    4.49
    
    
    
    3,602Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited
    
    
    4.85
    
    
    
    (338
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Expired
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    At December 31
    
    
    4.45
    
    
    
    3,264
    
    
    
    4.49
    
    
    
    3,602
    
    
    
    4.49
    
    
    
    3,602
  Exerciseprice per
    
    
    Shares (in thousands)share
    
    
    2010
    
    
    2009
    
    
    2008Expiry date:May 1, 2014
    
    
    3.88
    
    
    
    1,011
    
    
    
    1,011
    
    
    
    1,011May 1, 2015
    
    
    3.88
    
    
    
    834
    
    
    
    858
    
    
    
    858May 1, 2016
    
    
    3.88
    
    
    
    343
    
    
    
    481
    
    
    
    481February 16, 2016
    
    
    4.74
    
    
    
    165
    
    
    
    165
    
    
    
    165October 1, 2016
    
    
    5.75
    
    
    
    911
    
    
    
    1,087
    
    
    
    1,087
  F - 68




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 17. Equity-settled unit-based payments (continued)
 The Adecoagro/ IFH 2007/ 2008 Equity Incentive Plan
   2010
    
    
    2009
    
    
    2008Average
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    Averageexercise
    
    
    
    
    
    
    exercise
    
    
    
    
    
    
    exerciseprice per
    
    
    Options
    
    
    price per
    
    
    Options
    
    
    price per
    
    
    Optionsshare
    
    
    (thousands)
    
    
    share
    
    
    (thousands)
    
    
    share
    
    
    (thousands)At January 1
    
    
    8.68
    
    
    
    3,046
    
    
    
    8.55
    
    
    
    1,969
    
    
    
    8.55
    
    
    
    1,969Granted
    
    
    8.84
    
    
    
    297
    
    
    
    8.93
    
    
    
    1,070
    
    
    
    
    
    
    
    Forfeited
    
    
    8.55
    
    
    
    (172
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Expired
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    At December 31
    
    
    8.70
    
    
    
    3,170
    
    
    
    8.68
    
    
    
    3,046
    
    
    
    8.55
    
    
    
    1,969
  Exerciseprice per
    
    
    Shares (in thousands)share
    
    
    2010
    
    
    2009
    
    
    2008Expiry date:Dec 1, 2017
    
    
    8.55
    
    
    
    1,796
    
    
    
    1,969
    
    
    
    1,969Jan 30, 2019
    
    
    8.93
    
    
    
    1,050
    
    
    
    1,050
    
    
    
    Nov 1, 2019
    
    
    8.93
    
    
    
    27
    
    
    
    27
    
    
    
    Jan 30, 2020
    
    
    8.55
    
    
    
    53
    
    
    
    
    
    
    
    Jan 30, 2020
    
    
    8.93
    
    
    
    121
    
    
    
    
    
    
    
    Jun 30, 2020
    
    
    8.93
    
    
    
    33
    
    
    
    
    
    
    
    Sep 1, 2020
    
    
    8.93
    
    
    
    66
    
    
    
    
    
    
    
    Sep 1, 2020
    
    
    8.55
    
    
    
    23
    
    
    
    
    
    
    
    
  F - 69




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 17. Equity-settled unit-based payments (continued)
  Exercisable sharesin thousands2010
    
    
    3.2532009
    
    
    3.0572008
    
    
    2.337
 Adecoagro S.A. Restricted Share Plan
    18. Legal and other reserves
     F - 70




---



##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 19. Trade and other payables
 2010
    
    
    2009
    
    
    2008Non-currentTrade payables (i)
    
    
    4,239
    
    
    
    5,047
    
    
    
    2,679Payable from acquisition of subsidiary
(Note 31) (i)
    
    
    5,802
    
    
    
    
    
    
    
    Taxes payable
    
    
    1,331
    
    
    
    1,391
    
    
    
    Other payables
    
    
    413
    
    
    
    384
    
    
    
    Contingent consideration arising on a
business combination
    
    
    
    
    
    
    
    
    
    
    3,41111,785
    
    
    
    6,822
    
    
    
    6,090CurrentTrade payables
    
    
    49,597
    
    
    
    50,377
    
    
    
    37,975Payable from acquisition of subsidiary
(Note 31) (i)
    
    
    5,802
    
    
    
    
    
    
    
    Advances from customers
    
    
    2,560
    
    
    
    871
    
    
    
    446Amounts due to related parties (Note 33)
    
    
    4,892
    
    
    
    330
    
    
    
    1,087Taxes payable
    
    
    4,967
    
    
    
    3,527
    
    
    
    2,877Contingent consideration arising on a
business combination
    
    
    
    
    
    
    4,825
    
    
    
    3,565Other payables
    
    
    1,418
    
    
    
    2,168
    
    
    
    72069,236
    
    
    
    62,098
    
    
    
    46,670Total trade and other payables
    
    
    81,021
    
    
    
    68,920
    
    
    
    52,760
   20. Borrowings
 2010
    
    
    2009
    
    
    2008Non-currentBank borrowings
    
    
    250,591
    
    
    
    202,891
    
    
    
    3,844Obligations under finance leases
    
    
    81
    
    
    
    243
    
    
    
    255250,672
    
    
    
    203,134
    
    
    
    4,099CurrentBank overdrafts
    
    
    209
    
    
    
    
    
    
    
    19,771Bank borrowings
    
    
    138,224
    
    
    
    102,970
    
    
    
    203,816Obligations under finance leases
    
    
    367
    
    
    
    677
    
    
    
    627138,800
    
    
    
    103,647
    
    
    
    224,214Total borrowings
    
    
    389,472
    
    
    
    306,781
    
    
    
    228,313
   F - 71




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 20. Borrowings (continued)
  2010
    
    
    2009
    
    
    2008Fixed rate:Less than 1 year
    
    
    52,326
    
    
    
    30,579
    
    
    
    95,209Between 1 and 2 years
    
    
    22,425
    
    
    
    5,724
    
    
    
    678Between 2 and 3 years
    
    
    7,661
    
    
    
    5,173
    
    
    
    191Between 3 and 4 years
    
    
    7,394
    
    
    
    5,167
    
    
    
    127Between 4 and 5 years
    
    
    5,920
    
    
    
    5,167
    
    
    
    More than 5 years
    
    
    22,555
    
    
    
    5,167
    
    
    
    118,281
    
    
    
    56,977
    
    
    
    96,205Variable rate:Less than 1 year
    
    
    86,107
    
    
    
    72,391
    
    
    
    128,378Between 1 and 2 years
    
    
    70,905
    
    
    
    68,667
    
    
    
    703Between 2 and 3 years
    
    
    54,436
    
    
    
    55,907
    
    
    
    703Between 3 and 4 years
    
    
    17,506
    
    
    
    49,511
    
    
    
    249Between 4 and 5 years
    
    
    15,619
    
    
    
    787
    
    
    
    41More than 5 years
    
    
    26,170
    
    
    
    1,621
    
    
    
    1,152270,743
    
    
    
    248,884
    
    
    
    131,226389,024
    
    
    
    305,861
    
    
    
    227,431
     F - 72




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 20. Borrowings (continued)
 
    
    Syndicated Loan and BNDES Loan Facility
     2010
    
    
    2011
    
    
    2012 to 2013
    
    
    2014 to 2018Financial ratios:Debt Service Coverage Ratio (individual)
    
    
    > 0.65
    
    
    
    > 1.00
    
    
    
    > 1.00
    
    
    
    > 1.30Liquidity Ratio (individual)
    
    
    > 1.00
    
    
    
    > 1.00
    
    
    
    > 1.00
    
    
    
    > 1.00Liquidity Ratio (aggregate)
    
    
    > 0.65
    
    
    
    > 1,00
    
    
    
    > 1.20
    
    
    
    > 1.20Interest Coverage Ratio (aggregate)
    
    
    > 2.00
    
    
    
    > 2.00
    
    
    
    > 4.00
    
    
    
    > 4.00Net Bank Debt / EBITDA (aggregate)
    
    
    < 5.50
    
    
    
    < 3.00
    
    
    
    < 3.00
    
    
    
    < 3.00
  F - 73




---



##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 20. Borrowings (continued)
 
    
    IDB Facility
       F - 74




---



##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 20. Borrowings (continued)
 2010 4Q
    
    
    2011
    
    
    2012
    
    
    2013Financial ratios:EBITDA (aggregate) (in millions of $)
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/ATotal Debt (aggregate) (in millions of $)
    
    
    < 115.00
    
    
    
    < 115.00
    
    
    
    < 115.00
    
    
    
    < 115.00Capital Expenditures (aggregate)(in millions of $)
    
    
    < 15.00
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/ADebt to EBITDA (aggregate)
    
    
    < 5.00
    
    
    
    < 4.75
    
    
    
    < 4.25
    
    
    
    < 3.75Total Liabilities to Total Equity (aggregate)
    
    
    < 1.50
    
    
    
    < 1.50
    
    
    
    < 1.30
    
    
    
    < 1.30Current Asset to Current Liabilities (aggregate) (i)
    
    
    > 1.30
    
    
    
    > 1.10/1.30
    
    
    
    > 1.10/1.30
    
    
    
    > 1.10/1.30Interest Coverage (aggregate)
    
    
    > 1.40
    
    
    
    > 2.10
    
    
    
    > 2.35
    
    
    
    > 2.60Debt to Equity (aggregate)
    
    
    < 1.20
    
    
    
    < 1.20
    
    
    
    < 1.20
    
    
    
    < 1.20Short-Term Debt to Total Debt (aggregate) (ii)
    
    
    < 0.57
    
    
    
    < 0.50
    
    
    
    < 0.50
    
    
    
    < 0.50Debt to Equity (individual)
    
    
    < 1.70
    
    
    
    < 1.5
    (iii)
    
    
    < 1.20
    
    
    
    < 1.20
 
 (i)
    
    From 2011 onwards, for the first, second and third quarters the ratio is >1.10. From 2011
onwards, for the fourth quarter the ratio is >1.30.(ii)
    
    Measured annually.(iii)
    
    On March 24, 2011, the Group entered into an amendment to the IDB Facility to redefine this
financial ratio covenant.  
    
    BDB Facility
   F - 75




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 20. Borrowings (continued)
 Financial Ratios
    
    2010 to 2013
    
    
    2014 to 2020Debt Service Coverage Ratio (individual)
    
    
    >1.00
    
    
    
    >1.30Liquidity Ratio (individual)
    
    
    >1.00
    
    
    
    >1.00
 
    
    DB Facility
  Financial Ratios
    
    2010
    
    2011
    
    2012Interest Coverage Ratio (individual)
    
    >1.65
    
    >3.10
    
    >3.50Leverage Ratio (individual)
    
    <8.50
    
    <3.40
    
    <2.50Capital Expenditures (individual) (in millions of R$)
    
    <154.00
    
    <50.00
    
    <50.00
   2010
    
    
    2009
    
    
    2008CurrencyArgentine Peso
    
    
    13
    
    
    
    88
    
    
    
    35,343US Dollar
    
    
    199,182
    
    
    
    158,797
    
    
    
    164,103Uruguayan Peso
    
    
    62
    
    
    
    40
    
    
    
    Brazilian Reais
    
    
    190,215
    
    
    
    147,856
    
    
    
    28,867389,472
    
    
    
    306,781
    
    
    
    228,313
  F - 76




---



##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 20. Borrowings (continued)
 Obligations under finance leases
   2010
    
    
    2009
    
    
    2008Not later than one year
    
    
    396
    
    
    
    719
    
    
    
    801Later than one year and not later than
five years
    
    
    81
    
    
    
    243
    
    
    
    327477
    
    
    
    962
    
    
    
    1,128Future finance charges on finance leases
    
    
    (29
    )
    
    
    (42
    )
    
    
    (246
    )Present value of finance lease liabilities
    
    
    448
    
    
    
    920
    
    
    
    882
  2010
    
    
    2009
    
    
    2008Not later than one year
    
    
    367
    
    
    
    677
    
    
    
    627Later than one year and not later than five years
    
    
    81
    
    
    
    243
    
    
    
    255448
    
    
    
    920
    
    
    
    882
  21. Taxation
   2010
    
    
    2009
    
    
    2008Current income tax
    
    
    (3,956
    )
    
    
    (1,034
    )
    
    
    903Deferred income tax
    
    
    20,219
    
    
    
    6,449
    
    
    
    9,546Income tax benefit
    
    
    16,263
    
    
    
    5,415
    
    
    
    10,449
  Tax Jurisdiction
    
    Income Tax RateArgentina
    
    
    35
    %Brazil
    
    
    34
    %Uruguay
    
    
    25
    %
  F - 77




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 21. Taxation (continued)
  2010
    
    
    2009
    
    
    2008Deferred income tax asset to be recovered
after more than 12 months
    
    
    66,756
    
    
    
    44,139
    
    
    
    16,068Deferred income tax asset to be recovered
within 12 months
    
    
    707
    
    
    
    974
    
    
    
    2,645Deferred income tax assets
    
    
    67,463
    
    
    
    45,113
    
    
    
    18,713Deferred income tax liability to be
recovered after more than 12 months
    
    
    108,644
    
    
    
    108,585
    
    
    
    92,457Deferred income tax liability to be
recovered within 12 months
    
    
    2,851
    
    
    
    6,460
    
    
    
    2,170Deferred income tax liability
    
    
    111,495
    
    
    
    107,045
    
    
    
    94,627Deferred income tax liabilities, net
    
    
    44,032
    
    
    
    61,932
    
    
    
    75,914
  2010
    
    
    2009
    
    
    2008Beginning of year
    
    
    61,932
    
    
    
    75,914
    
    
    
    100,661Exchange differences
    
    
    (4,961
    )
    
    
    (7,000
    )
    
    
    (11,237
    )Acquisition of subsidiary
    
    
    7,280
    
    
    
    
    
    
    
    Disposal of subsidiary (Note 15)
    
    
    
    
    
    
    (533
    )
    
    
    (3,964
    )Income tax benefit
    
    
    (20,219
    )
    
    
    (6,449
    )
    
    
    (9,546
    )End of year
    
    
    44,032
    
    
    
    61,932
    
    
    
    75,914
  Property, plant andDeferred income tax liabilities
    
    equipment
    
    
    Biological assets
    
    
    Others
    
    
    TotalAt January 1, 2008
    
    
    102,864
    
    
    
    6,730
    
    
    
    119
    
    
    
    109,713Charged/(credited) to the
statement of income
    
    
    (1,723
    )
    
    
    3,512
    
    
    
    229
    
    
    
    2,018Disposal of subsidiary
    
    
    (3,813
    )
    
    
    (151
    )
    
    
    
    
    
    
    (3,964
    )Exchange differences
    
    
    (11,130
    )
    
    
    (1,902
    )
    
    
    (108
    )
    
    
    (13,140
    )At December 31, 2008
    
    
    86,198
    
    
    
    8,189
    
    
    
    240
    
    
    
    94,627Charged/(credited) to the
statement of income
    
    
    (5,065
    )
    
    
    20,384
    
    
    
    670
    
    
    
    15,989Disposal of subsidiary
    
    
    (510
    )
    
    
    (14
    )
    
    
    (9
    )
    
    
    (533
    )Exchange differences
    
    
    (1,771
    )
    
    
    (1,555
    )
    
    
    288
    
    
    
    (3,038
    )At December 31, 2009
    
    
    78,852
    
    
    
    27,004
    
    
    
    1,189
    
    
    
    107,045Charged/(credited) to the
statement of income
    
    
    (1,992
    )
    
    
    2,051
    
    
    
    (376
    )
    
    
    (317
    )Acquisition of subsidiary
    
    
    7,280
    
    
    
    
    
    
    
    
    
    
    
    7,280Exchange differences
    
    
    (2,546
    )
    
    
    (263
    )
    
    
    296
    
    
    
    (2,513
    )At December 31, 2010
    
    
    81,594
    
    
    
    28,792
    
    
    
    1,109
    
    
    
    111,495
  F - 78




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 21. Taxation (continued)
 Equity-settledTax loss
    
    
    share-based
    
    
    BiologicalDeferred income tax assets
    
    Provisions
    
    
    carryforwards
    
    
    compensation
    
    
    Assets
    
    
    Others
    
    
    TotalAt January 1, 2008
    
    
    806
    
    
    
    3,679
    
    
    
    1,860
    
    
    
    
    
    
    
    2,707
    
    
    
    9,052Charged/(credited)
to the statement of
income
    
    
    (171
    )
    
    
    11,145
    
    
    
    1,366
    
    
    
    
    
    
    
    (776
    )
    
    
    11,564Exchange differences
    
    
    (195
    )
    
    
    (1,099
    )
    
    
    
    
    
    
    
    
    
    
    (609
    )
    
    
    (1,903
    )At December 31, 2008
    
    
    440
    
    
    
    13,725
    
    
    
    3,226
    
    
    
    
    
    
    
    1,322
    
    
    
    18,713Charged/(credited)
to the statement of
income
    
    
    675
    
    
    
    19,201
    
    
    
    999
    
    
    
    
    
    
    
    1,563
    
    
    
    22,438Exchange differences
    
    
    150
    
    
    
    3,479
    
    
    
    
    
    
    
    
    
    
    
    333
    
    
    
    3,962At December 31, 2009
    
    
    1,265
    
    
    
    36,405
    
    
    
    4,225
    
    
    
    
    
    
    
    3,218
    
    
    
    45,113Charged/(credited)
to the statement of
income
    
    
    1,980
    
    
    
    (2,655
    )
    
    
    617
    
    
    
    19,525
    
    
    
    435
    
    
    
    19,902Exchange differences
    
    
    63
    
    
    
    2,961
    
    
    
    
    
    
    
    (1,632
    )
    
    
    1,056
    
    
    
    2,448At December 31, 2010
    
    
    3,308
    
    
    
    36,711
    
    
    
    4,842
    
    
    
    17,893
    
    
    
    4,709
    
    
    
    67,463
    Jurisdiction
    
    Tax loss carry forward
    
    
    Expiration PeriodArgentina
    
    
    5,718
    
    
    5 yearsBrazil
    
    
    133,229
    
    
    No expiration date
   2010
    
    
    2009
    
    
    2008Tax calculated at the tax rates
applicable to profits in the
respective countries
    
    
    (23,004
    )
    
    
    (8,100
    )
    
    
    (12,789
    )Non-deductible items
    
    
    3,210
    
    
    
    702
    
    
    
    488Unused tax losses, net
    
    
    7,642
    
    
    
    688
    
    
    
    853Non-taxable income
    
    
    (4,234
    )
    
    
    
    
    
    
    Others
    
    
    123
    
    
    
    1,295
    
    
    
    999Income tax benefit
    
    
    (16,263
    )
    
    
    (5,415
    )
    
    
    (10,449
    )
  F - 79




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 22. Payroll and social security liabilities
 2010
    
    
    2009
    
    
    2008Non-currentSocial security payable
    
    
    1,178
    
    
    
    1,106
    
    
    
    8341,178
    
    
    
    1,106
    
    
    
    834CurrentSalaries payable
    
    
    3,471
    
    
    
    2,446
    
    
    
    1,416Social security payable
    
    
    2,223
    
    
    
    1,831
    
    
    
    936Provision for vacations
    
    
    6,155
    
    
    
    4,802
    
    
    
    2,532Provision for bonuses
    
    
    3,629
    
    
    
    1,000
    
    
    
    1,14115,478
    
    
    
    10,079
    
    
    
    6,025Total payroll and social security liabilities
    
    
    16,656
    
    
    
    11,185
    
    
    
    6,859
 23. Provisions for other liabilities
   Labor, legal and
    
    
    Tax and socialother claims
    
    
    security
    
    
    Onerous contracts
    
    
    TotalAt January 1, 2008
    
    
    844
    
    
    
    2,950
    
    
    
    
    
    
    
    3,794Additions
    
    
    327
    
    
    
    78
    
    
    
    
    
    
    
    405Used during year
    
    
    (240
    )
    
    
    (1,570
    )
    
    
    
    
    
    
    (1,810
    )Exchange differences
    
    
    (122
    )
    
    
    (666
    )
    
    
    
    
    
    
    (788
    )At December 31, 2008
    
    
    809
    
    
    
    792
    
    
    
    
    
    
    
    1,601Additions
    
    
    2,549
    
    
    
    801
    
    
    
    
    
    
    
    3,350Used during year
    
    
    (6
    )
    
    
    (158
    )
    
    
    
    
    
    
    (164
    )Exchange differences
    
    
    18
    
    
    
    173
    
    
    
    
    
    
    
    191At December 31, 2009
    
    
    3,370
    
    
    
    1,608
    
    
    
    
    
    
    
    4,978Additions
    
    
    1,770
    
    
    
    552
    
    
    
    3,947
    
    
    
    6,269Used during year
    
    
    (1,379
    )
    
    
    (705
    )
    
    
    
    
    
    
    (2,084
    )Exchange differences
    
    
    (27
    )
    
    
    71
    
    
    
    
    
    
    
    44At December 31, 2010
    
    
    3,734
    
    
    
    1,526
    
    
    
    3,947
    
    
    
    9,207
  F - 80




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##### Table of Contents

\

Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 23. Provisions for other liabilities (continued)
  2010
    
    
    2009
    
    
    2008Non current
    
    
    4,606
    
    
    
    3,326
    
    
    
    777Current
    
    
    4,601
    
    
    
    1,652
    
    
    
    8249,207
    
    
    
    4,978
    
    
    
    1,601
  24. Sales
 2010
    
    
    2009
    
    
    2008Sales of manufactured products and services
rendered:Rice
    
    
    58,876
    
    
    
    65,521
    
    
    
    51,681Ethanol
    
    
    114,793
    
    
    
    62,811
    
    
    
    29,385Sugar
    
    
    98,385
    
    
    
    26,143
    
    
    
    20,495Soybean oil and meal
    
    
    
    
    
    
    8,420
    
    
    
    1,692Energy
    
    
    15,040
    
    
    
    8,216
    
    
    
    Coffee
    
    
    2,709
    
    
    
    7,984
    
    
    
    8,544Services
    
    
    749
    
    
    
    2,848
    
    
    
    2,507Rental income
    
    
    3,718
    
    
    
    172
    
    
    
    Powder milk
    
    
    
    
    
    
    720
    
    
    
    2,171Others
    
    
    259
    
    
    
    551
    
    
    
    698294,529
    
    
    
    183,386
    
    
    
    117,173Sales of agricultural produce and biological assets:Soybean
    
    
    64,890
    
    
    
    35,696
    
    
    
    37,333Cattle
    
    
    2,978
    
    
    
    28,639
    
    
    
    9,548Corn
    
    
    23,968
    
    
    
    14,654
    
    
    
    22,547Cotton
    
    
    2,395
    
    
    
    11,905
    
    
    
    5,813Milk
    
    
    13,415
    
    
    
    10,809
    
    
    
    12,295Wheat
    
    
    7,939
    
    
    
    10,218
    
    
    
    15,407Coffee
    
    
    4,863
    
    
    
    6,281
    
    
    
    7,404Sunflower
    
    
    4,880
    
    
    
    5,517
    
    
    
    5,615Barley
    
    
    1,171
    
    
    
    3,106
    
    
    
    2,816Seeds
    
    
    2,537
    
    
    
    2,352
    
    
    
    3,822Others
    
    
    2,702
    
    
    
    1,040
    
    
    
    4,436131,738
    
    
    
    130,217
    
    
    
    127,036Total sales
    
    
    426,267
    
    
    
    313,603
    
    
    
    244,209
  F - 81




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 24. Sales (continued)
 Commitments to sell commodities at a future date
   25. Expenses by nature
   2010
    
    
    2009
    
    
    2008Cost of agricultural produce and biological assets sold
    
    
    117,992
    
    
    
    116,728
    
    
    
    104,992Raw materials and consumables used in manufacturing
activities
    
    
    136,208
    
    
    
    95,959
    
    
    
    44,444Services
    
    
    14,727
    
    
    
    39,374
    
    
    
    24,136Salaries and social security expenses (Note 26)
    
    
    52,728
    
    
    
    37,099
    
    
    
    40,061Depreciation and amortization
    
    
    37,563
    
    
    
    30,356
    
    
    
    28,314Taxes (*)
    
    
    25,821
    
    
    
    20,474
    
    
    
    12,975Maintenance and repairs
    
    
    14,299
    
    
    
    17,046
    
    
    
    6,713Freights
    
    
    24,198
    
    
    
    11,322
    
    
    
    8,686Export taxes / selling taxes
    
    
    7,846
    
    
    
    5,612
    
    
    
    9,940Fuel and lubricants
    
    
    9,336
    
    
    
    5,507
    
    
    
    4,407Lease expense and similar arrangements (**)
    
    
    3,262
    
    
    
    2,764
    
    
    
    1,782Others
    
    
    16,049
    
    
    
    11,621
    
    
    
    16,298Total expenses by nature
    
    
    460,029
    
    
    
    393,862
    
    
    
    302,748
 
 (*)
    
    Excludes export taxes and selling taxes.(**)
    
    Relates to various cancellable operating lease agreements for office and machinery equipment.   F - 82




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 26. Salaries and social security expenses
 2010
    
    
    2009
    
    
    2008Wages and salaries
    
    
    40,090
    
    
    
    27,777
    
    
    
    30,516Social security costs
    
    
    10,857
    
    
    
    6,442
    
    
    
    5,643Equity-settled share-based compensation
    
    
    1,781
    
    
    
    2,880
    
    
    
    3,90252,728
    
    
    
    37,099
    
    
    
    40,061Number of employees
    
    
    5,263
    
    
    
    5,290
    
    
    
    4,544
 27. Other operating income, net
 2010
    
    
    2009
    
    
    2008Gain from the sale of subsidiaries (Note
15)
    
    
    
    
    
    
    18,839
    
    
    
    13,974(Loss)/gain from commodity derivative
financial instruments
    
    
    106
    
    
    
    (7,486
    )
    
    
    1,848Loss from onerous contracts  forwards
    
    
    (3,935
    )
    
    
    
    
    
    
    Gain from disposal of farmland (Note 15)
    
    
    20,837
    
    
    
    
    
    
    
    Gain from disposal of other property
items
    
    
    847
    
    
    
    337
    
    
    
    479Others
    
    
    369
    
    
    
    1,381
    
    
    
    1,02218,224
    
    
    
    13,071
    
    
    
    17,323
 28. Financial results, net
 2010
    
    
    2009
    
    
    2008Finance income:- Interest income
    
    
    1,341
    
    
    
    472
    
    
    
    1,494- Foreign exchange gains, net
    
    
    7,324
    
    
    
    10,903
    
    
    
    - Gain from interest rate/foreign
exchange rate derivative financial
instruments
    
    
    5,018
    
    
    
    
    
    
    
    - Other income
    
    
    2,876
    
    
    
    178
    
    
    
    1,058Finance income
    
    
    16,559
    
    
    
    11,553
    
    
    
    2,552Finance costs:- Interest expense
    
    
    (34,369
    )
    
    
    (28,222
    )
    
    
    (23,324
    )- Foreign exchange losses, net
    
    
    
    
    
    
    
    
    
    
    (24,932
    )- Taxes
    
    
    (2,104
    )
    
    
    (2,060
    )
    
    
    (1,982
    )- Loss from interest rate/foreign
exchange rate derivative financial
instruments
    
    
    
    
    
    
    (314
    )
    
    
    - Other expenses
    
    
    (3,023
    )
    
    
    (3,620
    )
    
    
    (622
    )Finance costs
    
    
    (39,496
    )
    
    
    (34,216
    )
    
    
    (50,860
    )Total financial results, net
    
    
    (22,937
    )
    
    
    (22,663
    )
    
    
    (48,308
    )
  F - 83




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 29. Earnings per share
  2010
    
    
    2009
    
    
    2008Loss attributable to equity holders
of the Group
    
    
    (43,904
    )
    
    
    (260
    )
    
    
    (18,947
    )Weighted average number of shares in
issue (thousands)
    
    
    121,667
    
    
    
    120,000
    
    
    
    112,420Basic and diluted losses per share
    
    
    (0.361
    )
    
    
    (0.002
    )
    
    
    (0.168
    )
  30. Disclosure of leases and similar arrangements
 The Group as lessee
 Operating leases:
    2010
    
    
    2009
    
    
    2008No later than 1 year
    
    
    3,246
    
    
    
    11,681
    
    
    
    773Later than 1 year and no later than 5 years
    
    
    2,110
    
    
    
    3,824
    
    
    
    1,982Thereafter
    
    
    478
    
    
    
    487
    
    
    
    5,834
    
    
    
    15,992
    
    
    
    2,755
  F - 84




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 30. Disclosure of leases and similar arrangements (continued)
 Agriculture partnerships parceria :
   Finance leases:
    The Group as lessor
 Operating leases:
   2010
    
    
    2009
    
    
    2008Rental income
    
    
    3,718
    
    
    
    172
    
    
    
    
  2010
    
    
    2009
    
    
    2008No later than 1 year
    
    
    4,520
    
    
    
    2,370
    
    
    
    Later than 1 year and no later than 5 years
    
    
    18,081
    
    
    
    9,483
    
    
    
    Thereafter
    
    
    17,704
    
    
    
    11,853
    
    
    
    40,305
    
    
    
    23,706
    
    
    
    
 Finance leases:
   F - 85




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 31. Business combinations
 Acquisitions completed during the year ended December 31, 2010
 Acquisition of Dinaluca Sociedad Anónima (Dinaluca)
    Purchase consideration:Cash paid
    
    
    7,900Present value of seller financing (*)
    
    
    11,604Total purchase consideration
    
    
    19,504Fair value of net assets acquired
    
    
    12,481Goodwill
    
    
    7,023
 
 (*)
    
    Discounted at present value as of the date of acquisition.   Fair value
    
    
    Book value (*)Cash and cash equivalents
    
    
    28
    
    
    
    28Property, plant and equipment
    
    
    14,075
    
    
    
    1,729Investment property
    
    
    7,935
    
    
    
    766Deferred income tax
    
    
    (6,930
    )
    
    
    (101
    )Other current assets
    
    
    1,330
    
    
    
    1,330Other current liabilities
    
    
    (3,957
    )
    
    
    (3,957
    )Net assets acquired
    
    
    12,481
    
    
    
    (205
    )
  F - 86




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 31. Business combinations (continued).
   Cash paid
    
    
    7,900Cash and cash equivalents in subsidiary acquired .
    
    
    (28
    )Cash outflow on acquisition
    
    
    7,872
 Acquisitions completed during the year ended December 31, 2008
    F - 87




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 32. Group companies
  2010
    
    2009
    
    2008Country of
    
    Ownership
    
    Ownership
    
    Ownershipincorporation and
    
    percentage held if
    
    percentage held if
    
    percentage held ifActivities
    
    operation
    
    not 100%
    
    not 100%
    
    not 100%Details of principal subsidiary
undertakings:Operating companies (unless
otherwise stated):AmericasAdeco Agropecuaria S.A.
    
    (a)
    
    Argentina
    
    
    
    
    
    Pilagá S.A.
    
    (a)
    
    Argentina
    
    99.84%
    
    99.84%
    
    99.84%Cavok S.A.
    
    (a)
    
    Argentina
    
    
    
    
    
    Establecimientos El Orden S.A.
    
    (a)
    
    Argentina
    
    
    
    
    
    Bañado del Salado S.A.
    
    (a)
    
    Argentina
    
    
    
    
    
    Agrícola Ganadera San José S.R.L.
    
    (a)
    
    Argentina
    
    
    
    
    
    Santa Regina
Agropecuaria S.R.L.
    
    (a)
    
    Argentina
    
    
    
    
    
    La Paz
Agropecuaria S.R.L.
    
    (a)
    
    Argentina
    
    (i)
    
    (i)
    
    Agro Invest S.A.
    
    (a)
    
    Argentina
    
    
    
    
    
    54.25%Forsalta S.A.
    
    (a)
    
    Argentina
    
    
    
    
    
    Dinaluca S.A.
    
    (a)
    
    Argentina
    
    
    
    (ii)
    
    (ii)Adeco Agropecuaria Brazil S.A.
    
    (b)
    
    Brazil
    
    
    
    
    
    Adecoagro Comercio Exportação e
importação Ltda
(f.k.a. Alfenas Café
Ltda)
    
    (c)
    
    Brazil
    
    (iv)
    
    
    
    Angélica Agroenergia Ltda.
    
    (b)
    
    Brazil
    
    
    
    
    
    Usina Monte Alegre Ltda.
    
    (b)
    
    Brazil
    
    
    
    
    
    Fazenda Mimoso Ltda.
    
    (c)
    
    Brazil
    
    
    
    
    
    Ivinhema Agronergia S.A.
(f.k.a. Amandina Agroenergía
Ltda.)
    
    (b)
    
    Brazil
    
    
    
    
    
    Kelizer S.C.A.
    
    (a)
    
    Uruguay
    
    
    
    
    
    Adecoagro
Uruguay S.R.L.
    
    (a)
    
    Uruguay
    
    
    
    
    
    Holdings companies:AmericasAdeco Brazil Participacoes S.A.
    
    
    
    Brazil
    
    
    
    
    
    International Farmland Holdings LP
    
    
    
    United States
    
    98.00%
    
    98.00%
    
    98.00%Adecoagro LP
    
    
    
    United States
    
    
    
    
    
    Ladelux S.C.A.
    
    
    
    Uruguay
    
    
    
    
    
    AsiaAFI (L) LTD.
    
    
    
    Malaysia
    
    (iii)
    
    
    
    EuropeKadesh
Hispania S.L.
    
    
    
    Spain
    
    
    
    
    
    Leterton
España S.L.
    
    
    
    Spain
    
    
    
    
    
    Ona Ltd.
    
    
    
    Malta
    
    
    
    
    
    Toba Ltd.
    
    
    
    Malta
    
    
    
    
    
    Details of principal joint
venture undertakings:AmericasGrupo La Lácteo
    
    (d)
    
    Canada
    
    50.00%
    
    50.00%
    
    50.00%
  F - 88




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 32. Group companies (continued)
 
   33. Related-party transactions
  Income (loss) included in theDescription of
    
    statement of income
    
    
    Balance receivable (payable)Related party
    
    Relationship
    
    transaction
    
    2010
    
    
    2009
    
    
    2008
    
    
    2010
    
    
    2009
    
    
    2008Grupo La Lácteo
    
    Joint venture
    
    Sales of goods
    
    
    13,397
    
    
    
    10,849
    
    
    
    12,617
    
    
    
    
    
    
    
    
    
    
    
    Purchases of goods
    
    
    
    
    
    
    (748
    )
    
    
    (1,566
    )
    
    
    
    
    
    
    
    
    
    
    Receivables from related parties (Note 12)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,662
    
    
    
    2,554
    
    
    
    4,368Payables (Note 19)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,087
    )Mario Jorge de Lemos Vieira/ Cia
Agropecuaria Monte Alegre/ Alfenas Agricola Ltda/ Marcelo Weyland Barbosa Vieira/ Paulo Albert Weyland Vieira
    
    (i)
    
    Cost of manufactured products sold and services rendered (ii)
    
    
    (3,334
    )
    
    
    (2,155
    )
    
    
    (1,764
    )
    
    
    
    
    
    
    
    
    
    
    Receivables from related parties (Note 12)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    291
    
    
    
    796
    
    
    
    180Payables (Note 19)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,892
    )
    
    
    (330
    )
    
    
    Marcelo Weyland Barbosa Vieira/
Paulo Albert
Weyland Vieira/
Mario Jorge de
Lemos Vieira/
Corina de Almeida
Leite
    
    (i)
    
    Tax charge
    
    
    4,138
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Payables (Note 19)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Management and selected employees
    
    Employment
    
    Compensation selected employees (iii)
    
    
    (6,593
    )
    
    
    (8,330
    )
    
    
    (9,368
    )
    
    
    (13,659
    )
    
    
    (11,914
    )
    
    
    (9,092
    )
  F - 89




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##### Table of Contents



Adecoagro S.A.
Notes to the Consolidated Financial Statements (Continued)
 33. Related-party transactions (continued)
 
 Ospraie Consent Agreement
  34. Events after the date of the statement of financial position
 Initial Public Offering (IPO) and private placement
     F - 90