UNITED STATES SECURITIES
AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form
20 F/A



| | ☐ | REGISTRATION
STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
| | - | ----------------------------------------------------------------------------------------------

OR

| | ☒ | ANNUAL
REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED ON DECEMBER 31, 2016
| | - | -----------------------------------------------------------------------------------------------------------------------------------

OR

| | ☐ | TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| | - | ----------------------------------------------------------------------------------------



FOR
THE TRANSITION PERIOD FROM   TO
OR

| | ☐ | SHELL
COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| | - | -------------------------------------------------------------------------------------------

Date of event requiring this shell company report



COMMISSION FILE NUMBER:
001-35052



Adecoagro S.A.

(Exact name of Registrant
as specified in its charter)



N/A

(Translation of Registrant’s
name into English)



Grand Duchy of Luxembourg

(Jurisdiction of incorporation or organization)



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

Tel: +352.2644.9372

(Address of principal
executive offices)



Gorka Fernandez Matute

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

Email: gorka.fernandezmatute@intertrustgroup.com

Tel: +352.2644.9372

(Name, Telephone, E-Mail
and/or Facsimile number and Address of Company Contact Person)



Securities registered or to be registered pursuant to Section 12(b)
of the Act:



|Title of Each Class | Name of Each Exchange on Which Registered
|------------------- | -----------------------------------------
|Common Shares       | New York Stock Exchange                  



Securities registered
or to be registered pursuant to Section 12(g) of the Act: None



Securities for which
there is a reporting obligation pursuant to Section 15(d) of the Act: None



The number of outstanding
shares of each of the issuer’s classes of capital stock as of December 31, 2016:



121,143,497 Common Shares,
par value $1.50 per share



Indicate by check mark
if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act

Yes☒ No☐



If
this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes☐ No☒



Indicate by check mark
whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and
(2) has been subject to such filing requirements for the past 90 days.

Yes☒ No☐



Indicate by check
mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data
File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). (*)

Yes
☐ No☐



(*) This requirement does not apply to the registrant
in respect of this filing.



Indicate by check mark whether
the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See
definition of “large accelerated filer," accelerated filer,” and "emerging growth company" in Rule 12b-2
of the Exchange Act. (Check one):



|Large accelerated filer☒ | Accelerated filer ☐ | Non-accelerated filer ☐ 
|------------------------ | ------------------- | ------------------------
|                         |                     | Emerging growth company☐



If
an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act. ☐



Indicate
by check mark which basis of accounting the registrant has used to prepare the financial statements included in this
filing: U.S. GAAP ☐  International Financial Reporting Standards as issued by the International Accounting Standards
Board ☒ Other ☐



If'
“Other" has been checked in response to the previous question, indicate by check mark which financial statement item
the Registrant has elected to follow: Item 17 ☐ Item
18☐



If
this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes ☐ No ☒


















EXPLANATORY NOTE



This Form 20-F/A amends our
Annual Report on Form 20-F for the year ended December 31, 2016 (the “Annual Report”), as filed with the U.S.
Securities and Exchange Commission (the “Commission”) on April 28, 2017 (the “Original Filing”) and is
being filed solely to correct a typographical error with respect to the date of Price Waterhouse & Co. S.R.L.’s audit
report (the “PwC audit report”) contained in the Annual Report. The originally signed PwC audit report bears the date
April 27, 2017. However, the PwC audit report as filed was dated inadvertently as of April 24, 2017. Although we have re-filed
the entire PwC audit report and financial statements, for clarity, this amendment is limited in scope to the correction of the
typographical error in the date of the PwC audit report and does not amend, update, or change any other items or disclosures contained
in the Original Filing.



Other than as expressly set forth
above, this amendment does not, and does not purport to, amend, restate, or update the information contained in the Annual Report,
or reflect any events that have occurred after the Annual Report was filed.  As a result, our Annual Report, as amended hereby,
continues to speak as of the initial filing date of our Annual Report and should not be understood to mean that any statements
contained herein have been updated to reflect developments as of any date subsequent to April 28, 2017.



This
Form 20-F/A consists solely of a cover page, this explanatory note, the PwC audit report and our financial statements,
the updated auditors’ consent, updated certifications of our principal executive officer and our principal financial officer,
and a signature page. The only change in these certifications from the certifications of the Company’s principal
executive officer and principal financial officer filed as exhibits to the Original Filings is their date.



2







| | Item 18. | Financial Statements.
| | -------- | ---------------------



See pages F-1 through F-90 of this annual report.





| | Item 19. | Exhibits
| | -------- | --------







|               |  |                                                                                                                                                                                                                                                                                                                                                                 
|-------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit Number |  | Description                                                                                                                                                                                                                                                                                                                                                     
|               |  |                                                                                                                                                                                                                                                                                                                                                                 
|1.1            |  | Amended and Restated Articles of Association of Adecoagro S.A. dated April 20,2016 , previously filed as exhibit 1.1 to the Company’s Annual Report on Form 20-F filed with the Securities and Exchange Commission on April 28, 2017 (“Form 20-F”) and incorporated by reference herein.                                                                        
|               |  |                                                                                                                                                                                                                                                                                                                                                                 
|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 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.                                                                              
|               |  |                                                                                                                                                                                                                                                                                                                                                                 
|4.4            |  | 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.                                                                                    
|               |  |                                                                                                                                                                                                                                                                                                                                                                 
|4.5            |  | 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.                                                                                   
|               |  |                                                                                                                                                                                                                                                                                                                                                                 
|4.6            |  | 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.                                                                               
|               |  |                                                                                                                                                                                                                                                                                                                                                                 
|4.7            |  | Amendment Offer to Loan Agreement, dated March 24, 2011, between Adeco Agropecuaria S.A., Pilagá S.R.L. and Inter-American Development Bank, previously filed as Exhibit 4.7 to the Company’s annual report on Form 20-F for the year ended December 31, 2011 and incorporated herein by reference.                                                             
|               |  |                                                                                                                                                                                                                                                                                                                                                                 
|4.8            |  | Amendment Offer 02/2011 to Loan Agreement, dated November 9, 2011, between Adeco Agropecuaria S.A., Pilagá S.A. and Inter- American Development Bank, previously filed as Exhibit 4.8 to the Company’s annual report on Form 20-F for the year ended December 31, 2011 and incorporated herein by reference.                                                    
|               |  |                                                                                                                                                                                                                                                                                                                                                                 
|4.9            |  | 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.                                                                                                           
|               |  |                                                                                                                                                                                                                                                                                                                                                                 
|4.10           |  | 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.                                                                                             
|               |  |                                                                                                                                                                                                                                                                                                                                                                 
|4.11           |  | 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.                                                                                          
|               |  |                                                                                                                                                                                                                                                                                                                                                                 
|4.12           |  | 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.                                                                          
|               |  |                                                                                                                                                                                                                                                                                                                                                                 
|4.13           |  | 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.                                                                       
|               |  |                                                                                                                                                                                                                                                                                                                                                                 
|4.14           |  | 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.                                                      
|               |  |                                                                                                                                                                                                                                                                                                                                                                 
|4.15           |  | 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.                                                                                                           
|               |  |                                                                                                                                                                                                                                                                                                                                                                 
|4.16           |  | 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.                                                                                                          
|               |  |                                                                                                                                                                                                                                                                                                                                                                 





3







|4.17 | 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.                                             
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                              
|4.18 | 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.                                                
|     |                                                                                                                                                                                                                                                                                                              
|4.19 | 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.                                                                      
|     |                                                                                                                                                                                                                                                                                                              
|4.20 | 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.                                                         
|     |                                                                                                                                                                                                                                                                                                              
|4.21 | 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.                                                   
|     |                                                                                                                                                                                                                                                                                                              
|4.22 | 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.                                       
|     |                                                                                                                                                                                                                                                                                                              
|4.23 | 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.
|     |                                                                                                                                                                                                                                                                                                              
|4.24 | English translation of Sale Agreement, dated July8, 2009,between PilagáS.R.L.andGalicia Warrants S.A., previously filed as exhibit 10.21 to the Company’s registration statement on Form F-1 and incorporated by reference herein.                                                                           
|     |                                                                                                                                                                                                                                                                                                              
|4.25 | 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.                                                                            
|     |                                                                                                                                                                                                                                                                                                              
|4.26 | 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.    
|     |                                                                                                                                                                                                                                                                                                              
|4.27 | 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.                                  
|     |                                                                                                                                                                                                                                                                                                              
|4.28 | 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.                        
|     |                                                                                                                                                                                                                                                                                                              
|4.29 | 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.    
|     |                                                                                                                                                                                                                                                                                                              
|4.30 | 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., previously filed as exhibit 10.27 to the Company’s registration statement on Form F-1 and incorporated by reference herein.     
|     |                                                                                                                                                                                                                                                                                                              
|4.31 | 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.                                                   
|     |                                                                                                                                                                                                                                                                                                              
|4.32 | 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.                                
|4.33 | 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.                               
|     |                                                                                                                                                                                                                                                                                                              
|4.34 | 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.                                  
|     |                                                                                                                                                                                                                                                                                                              
|4.35 | 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







|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|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 tda. 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., previously filed as exhibit 4.40 to the Company’s Annual Report on Form 20- for fiscal year-end 2010 and incorporated by reference herein.                                                                                                                                                                                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|4.41 | English translation of Stock Purchase Agreement, dated August 18, 2011, between Kadesh Hispania, S.L., Leterton España, S.L. and Compañía Agroforestal de Servicios y Mandatos S.A., previously filed as Exhibit 4.41 to the Company’s annual report on Form 20-F for the year ended December 31, 2011 and incorporated herein by reference.                                                                                                                                                                                                                                                              
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|4.42 | English translation of Stock Purchase Agreement, dated August 19, 2011, between Kadesh Hispania, S.L., Leterton España, S.L. and Simoneta S.A., previously filed as Exhibit 4.42 to the Company’s annual report on Form 20-F for the year ended December 31, 2011 and incorporated herein by reference.                                                                                                                                                                                                                                                                                                   
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|4.43 | Export Prepayment Facility, dated November 5, 2014 by and among Adecoagro Vale do Ivinhema S.A., Adecoagro Brasil Participacoes S.A., Usina Monte Alegre Ltda., ING Captal LLC, Rabobank Curacao N.V., ING Bank N.V., ING BANK N.V. Sao Paulo Branch and other Lenders party thereto..                                                                                                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|4.44 | Export Prepayment Finance Agreement dated December 20, 2016 by and among Adecoagro Vale Do Ivinhema S.A., as borrower, Adecoagro Brasil Participacoes S.A., Adeco Agropecuaria Brasil Ltda., and Usina Monte Alegre Ltda., as guarantors, ING Capital LLC, Cooperative Rabobank U.A., as arrangers and bookmakers, Banco Rabobank International Brasil S.A., as administrative agent and collateral agent, Cooperative Rabobank U.A., as collection account agent and paying agent, and the Lenders party thereto, previously filed as exhibit 4.44 to the Form 20-F and incorporated by reference herein.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|8.1  | Subsidiaries of Adecoagro S.A. as of April 30, 2015 previously filed as exhibit 8.1 to the Form 20-F and incorporated by reference herein.                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|12.1 | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|12.2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|13.1 | Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|13.2 | Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|15.1 | Consent of Cushman & Wakefield Argentina S.A. Consent of Price previously filed as exhibit 15.1 to the Form 20-F and incorporated by reference herein                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|15.2 | Consent of Price Waterhouse & Co. S.R.L.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  







5









SIGNATURES





The registrant hereby certifies
that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign
this annual report on Form 20-F/A on its behalf.



| | Adecoagro S.A.                
| | ------------------------------
| |                               
| | /s/ Mariano Bosch             
| | Name: Mariano Bosch           
| | Title: Chief Executive Officer



Date: June 21, 2017











6









Adecoagro
S.A.



Consolidated Financial Statements as of December
31, 2016, 2015 and 2014 and for the years ended December 31, 2016, 2015 and 2014










Report of Independent Registered Public Accounting Firm



To the Shareholders of

Adecoagro S.A.



In our opinion, the
accompanying consolidated statement of financial position and the related consolidated statements of income, comprehensive income,
changes in shareholders’s equity and cash flows present fairly, in all material respects, the financial position of Adecoagro
S.A. and its subsidiaries at December 31, 2016 and 2015, and the results of their operations and their cash flows for each of the
three years in the period ended December 31, 2016 in conformity with International Financial Reporting Standards as issued by the
International Accounting Standards Board. Also in our opinion, the Company maintained, in all material respects, effective internal
control over financial reporting as of December 31, 2016, based on criteria established in Internal Control - Integrated
Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's management
is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting, included in “Management’s Annual Report
on Internal Control over Financial Reporting” included in Item 15 of this Annual Report on Form 20-F. Our responsibility
is to express opinions on these financial statements and on the Company's internal control over financial reporting based on our
integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement and whether effective internal control over financial reporting was maintained in
all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining
an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing
and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included
performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable
basis for our opinions.



As discussed in Note
32.1, the company changed the manner in which it accounts for biological assets and property, plant and equipment.



A company’s internal
control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance
of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only
in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a
material effect on the financial statements.



Because of its inherent
limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation
of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures may deteriorate.



| | Buenos Aires, Argentina.              
| | --------------------------------------
| | April 27, 2017                        
| |                                       
| | PRICE WATERHOUSE & CO. S.R.L.         
| | by /s/ Marcelo de Nicola     (Partner)
| | Marcelo de Nicola                     



F- 2







Legal information



Denomination: Adecoagro S.A.



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



Company activity:Agricultural and agro-industrial

Date of registration:June 11, 2010

Expiration of company charter:No term defined

Number of register (RCS Luxembourg):B153.681

Capital stock:122,381,815 common shares (of which 1,238,318
are treasury shares)



F- 3







Adecoagro S.A.

Consolidated Statements of Income

for the years ended December 31, 2016,
2015 and 2014

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



|                                                                                                              |  | Note |  |  | 2016 |          |   | 2015 (*) |  |          | 2014 (*) | 
|------------------------------------------------------------------------------------------------------------- |  | ---- |  |  | ---- | -------- | - | -------- |  | -------- | -------- | 
|                                                                                                              |  |      |  |  |      |          |   |          |  |          |          | 
|Sales of goods and services rendered                                                                          |  | 4    |  |  |      | 869,235  |   |          |  | 674,314  |          | 
|Cost of goods sold and services rendered                                                                      |  | 5    |  |  |      | (678,581 | ) |          |  | (557,786 | )        | 
|Initial recognition and changes in fair value of biological assets and agricultural produce                   |  | 15   |  |  |      | 125,456  |   |          |  | 54,528   |          | 
|Changes in net realizable value of agricultural produce after harvest                                         |  |      |  |  |      | (5,841   | ) |          |  | 14,691   |          | 
|Margin on Manufacturing and Agricultural Activities Before Operating Expenses                                 |  |      |  |  |      | 310,269  |   |          |  | 185,747  |          | 
|General and administrative expenses                                                                           |  | 6    |  |  |      | (50,750  | ) |          |  | (48,425  | )        | 
|Selling expenses                                                                                              |  | 6    |  |  |      | (80,673  | ) |          |  | (70,268  | )        | 
|Other operating income, net                                                                                   |  | 8    |  |  |      | (8,297   | ) |          |  | 31,066   |          | 
|Share of loss of joint venture                                                                                |  | 16   |  |  |      | -        |   |          |  | (2,685   | )        | 
|Profit from Operations                                                                                        |  |      |  |  |      | 170,549  |   |          |  | 95,435   |          | 
|Finance income                                                                                                |  | 9    |  |  |      | 7,957    |   |          |  | 9,150    |          | 
|Finance costs                                                                                                 |  | 9    |  |  |      | (165,380 | ) |          |  | (116,890 | )        | 
|Financial results, net                                                                                        |  | 9    |  |  |      | (157,423 | ) |          |  | (107,740 | )        | 
|Profit / (Loss) Before Income Tax                                                                             |  |      |  |  |      | 13,126   |   |          |  | (12,305  | )        | 
|Income tax (expense) / benefit                                                                                |  | 10   |  |  |      | (9,387   | ) |          |  | 7,954    |          | 
|Profit / (Loss) for the Year                                                                                  |  |      |  |  |      | 3,739    |   |          |  | (4,351   | )        | 
|                                                                                                              |  |      |  |  |      |          |   |          |  |          |          | 
|Attributable to:                                                                                              |  |      |  |  |      |          |   |          |  |          |          | 
|Equity holders of the parent                                                                                  |  |      |  |  |      | 2,039    |   |          |  | (5,593   | )        | 
|Non-controlling interest                                                                                      |  |      |  |  |      | 1,700    |   |          |  | 1,242    |          | 
|                                                                                                              |  |      |  |  |      |          |   |          |  |          |          | 
|Earnings / (Loss) per share from operations attributable to the equity holders of the parent during the year: |  |      |  |  |      |          |   |          |  |          |          | 
|Basic earnings per share                                                                                      |  | 11   |  |  |      | 0.017    |   |          |  | (0.046   | )        | 
|Diluted earnings per share                                                                                    |  | 11   |  |  |      | 0.017    |   |          |  | (0.046   | )        | 



(*): The prior years have been adjusted to reflect the
Company’s adoption of amendments to IAS 16 and IAS 41 as further described in Note 32.



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



F- 4







Adecoagro S.A.

Consolidated Statements of Comprehensive
Income

for the years ended December 31, 2016,
2015 and 2014

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



|                                                                  |  | 2016 |         |  | 2015 (*) |  |          | 2014 (*) | 
|----------------------------------------------------------------- |  | ---- | ------- |  | -------- |  | -------- | -------- | 
|                                                                  |  |      |         |  |          |  |          |          | 
|Profit / (Loss) for the year                                      |  |      | 3,739   |  |          |  | (4,351   | )        | 
|Other comprehensive income:                                       |  |      |         |  |          |  |          |          | 
|-  Items that may be reclassified subsequently to profit or loss: |  |      |         |  |          |  |          |          | 
|Exchange differences on translating foreign   operations          |  |      | 39,496  |  |          |  | (178,146 | )        | 
|Cash flow hedge, net of tax (Note 2)                              |  |      | 100,615 |  |          |  | (94,851  | )        | 
|Other comprehensive income / (loss) for the year                  |  |      | 140,111 |  |          |  | (272,997 | )        | 
|Total comprehensive income / (loss) for the year                  |  |      | 143,850 |  |          |  | (277,348 | )        | 
|                                                                  |  |      |         |  |          |  |          |          | 
|Attributable to:                                                  |  |      |         |  |          |  |          |          | 
|Equity holders of the parent                                      |  |      | 143,603 |  |          |  | (275,077 | )        | 
|Non-controlling interest                                          |  |      | 247     |  |          |  | (2,271   | )        | 



(*): The prior years have been adjusted to reflect the
Company’s adoption of amendments to IAS 16 and IAS 41 as further described in Note 32.



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



F- 5







Adecoagro S.A.

Consolidated Statements of Financial
Position

as of December 31, 2016, 2015 and 2014

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



|                                                                   |  | Note |  |  | 2016 |           |   | 2015 (*) |  |           | 2014 (*) | 
|------------------------------------------------------------------ |  | ---- |  |  | ---- | --------- | - | -------- |  | --------- | -------- | 
|ASSETS                                                             |  |      |  |  |      |           |   |          |  |           |          | 
|Non-Current Assets                                                 |  |      |  |  |      |           |   |          |  |           |          | 
|Property, plant and equipment, net                                 |  | 12   |  |  |      | 802,608   |   |          |  | 696,889   |          | 
|Investment property                                                |  | 13   |  |  |      | 2,666     |   |          |  | 4,796     |          | 
|Intangible assets, net                                             |  | 14   |  |  |      | 17,252    |   |          |  | 16,661    |          | 
|Biological assets                                                  |  | 15   |  |  |      | 8,516     |   |          |  | 6,476     |          | 
|Investments in joint ventures                                      |  | 16   |  |  |      | -         |   |          |  | -         |          | 
|Deferred income tax assets                                         |  | 10   |  |  |      | 38,586    |   |          |  | 68,744    |          | 
|Trade and other receivables, net                                   |  | 18   |  |  |      | 17,412    |   |          |  | 21,795    |          | 
|Other assets                                                       |  |      |  |  |      | 566       |   |          |  | 651       |          | 
|Total Non-Current Assets                                           |  |      |  |  |      | 887,606   |   |          |  | 816,012   |          | 
|Current Assets                                                     |  |      |  |  |      |           |   |          |  |           |          | 
|Biological assets                                                  |  | 15   |  |  |      | 136,888   |   |          |  | 105,342   |          | 
|Inventories                                                        |  | 19   |  |  |      | 111,754   |   |          |  | 85,286    |          | 
|Trade and other receivables, net                                   |  | 18   |  |  |      | 157,528   |   |          |  | 145,011   |          | 
|Derivative financial instruments                                   |  | 17   |  |  |      | 3,398     |   |          |  | 4,849     |          | 
|Other assets                                                       |  |      |  |  |      | 24        |   |          |  | -         |          | 
|Cash and cash equivalents                                          |  | 20   |  |  |      | 158,568   |   |          |  | 198,894   |          | 
|Total Current Assets                                               |  |      |  |  |      | 568,160   |   |          |  | 539,382   |          | 
|TOTAL ASSETS                                                       |  |      |  |  |      | 1,455,766 |   |          |  | 1,355,394 |          | 
|SHAREHOLDERS EQUITY                                                |  |      |  |  |      |           |   |          |  |           |          | 
|Capital and reserves attributable to equity holders of the parent  |  |      |  |  |      |           |   |          |  |           |          | 
|Share capital                                                      |  | 22   |  |  |      | 183,573   |   |          |  | 183,573   |          | 
|Share premium                                                      |  | 22   |  |  |      | 937,250   |   |          |  | 937,674   |          | 
|Cumulative translation adjustment                                  |  |      |  |  |      | (527,364  | ) |          |  | (568,316  | )        | 
|Equity-settled compensation                                        |  |      |  |  |      | 17,218    |   |          |  | 16,631    |          | 
|Cash flow hedge                                                    |  | 2    |  |  |      | (37,299   | ) |          |  | (137,911  | )        | 
|Treasury shares                                                    |  |      |  |  |      | (1,859    | ) |          |  | (1,936    | )        | 
|Reserve from the sale of non-controlling interests in subsidiaries |  | 21   |  |  |      | 41,574    |   |          |  | 41,574    |          | 
|Retained earnings                                                  |  |      |  |  |      | 50,998    |   |          |  | 48,795    |          | 
|Equity attributable to equity holders of the parent                |  |      |  |  |      | 664,091   |   |          |  | 520,084   |          | 
|Non-controlling interest                                           |  |      |  |  |      | 7,582     |   |          |  | 7,335     |          | 
|TOTAL SHAREHOLDERS EQUITY                                          |  |      |  |  |      | 671,673   |   |          |  | 527,419   |          | 
|LIABILITIES                                                        |  |      |  |  |      |           |   |          |  |           |          | 
|Non-Current Liabilities                                            |  |      |  |  |      |           |   |          |  |           |          | 
|Trade and other payables                                           |  | 25   |  |  |      | 1,427     |   |          |  | 1,911     |          | 
|Borrowings                                                         |  | 26   |  |  |      | 430,304   |   |          |  | 483,651   |          | 
|Deferred income tax liabilities                                    |  | 10   |  |  |      | 14,689    |   |          |  | 15,636    |          | 
|Payroll and social liabilities                                     |  | 27   |  |  |      | 1,235     |   |          |  | 1,236     |          | 
|Derivatives financial instruments                                  |  | 17   |  |  |      | 662       |   |          |  | 119       |          | 
|Provisions for other liabilities                                   |  | 28   |  |  |      | 3,299     |   |          |  | 1,653     |          | 
|Total Non-Current Liabilities                                      |  |      |  |  |      | 451,616   |   |          |  | 504,206   |          | 
|Current Liabilities                                                |  |      |  |  |      |           |   |          |  |           |          | 
|Trade and other payables                                           |  | 25   |  |  |      | 92,158    |   |          |  | 53,731    |          | 
|Current income tax liabilities                                     |  |      |  |  |      | 1,387     |   |          |  | 962       |          | 
|Payroll and social liabilities                                     |  | 27   |  |  |      | 26,844    |   |          |  | 22,153    |          | 
|Borrowings                                                         |  | 26   |  |  |      | 205,092   |   |          |  | 239,688   |          | 
|Derivative financial instruments                                   |  | 17   |  |  |      | 6,406     |   |          |  | 6,575     |          | 
|Provisions for other liabilities                                   |  | 28   |  |  |      | 590       |   |          |  | 660       |          | 
|Total Current Liabilities                                          |  |      |  |  |      | 332,477   |   |          |  | 323,769   |          | 
|TOTAL LIABILITIES                                                  |  |      |  |  |      | 784,093   |   |          |  | 827,975   |          | 
|TOTAL SHAREHOLDERS EQUITY AND LIABILITIES                          |  |      |  |  |      | 1,455,766 |   |          |  | 1,355,394 |          | 



(*): The prior years have been adjusted to reflect the
Company’s adoption of amendments to IAS 16 and IAS 41 as further described in Note 32.



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



F- 6







Adecoagro S.A.

Consolidated Statements of Changes in
Shareholders’ Equity

for the years ended December 31, 2016,
2015 and 2014

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



|                                                                      |  | Attributable
    to equity holders of the parent |         |  |                               |  |         |                                         | 
|--------------------------------------------------------------------- |  | ------------------------------------------------ | ------- |  | ----------------------------- |  | ------- | --------------------------------------- | 
|                                                                      |  | Share
    Capital  (Note 22)                     |         |  | Share
     Premium  (Note 22) |  |         | Cumulative
     Translation  Adjustment | 
|                                                                      |  |                                                  |         |  |                               |  |         |                                         | 
|Balance at January 1, 2014                                            |  |                                                  | 183,573 |  |                               |  | 939,072 |                                         | 
|Profit for the year                                                   |  |                                                  | -       |  |                               |  | -       |                                         | 
|Other comprehensive income:                                           |  |                                                  |         |  |                               |  |         |                                         | 
|-  Items
    that may be reclassified subsequently to profit or loss: |  |                                                  |         |  |                               |  |         |                                         | 
|Exchange differences on translating
    foreign operations            |  |                                                  | -       |  |                               |  | -       |                                         | 
|Cash flow
    hedge                                                   |  |                                                  | -       |  |                               |  | -       |                                         | 
|Other comprehensive income
    for the year                           |  |                                                  | -       |  |                               |  | -       |                                         | 
|Total comprehensive income
    for the year                           |  |                                                  | -       |  |                               |  | -       |                                         | 
|                                                                      |  |                                                  |         |  |                               |  |         |                                         | 
|Employee share options (Note 23)                                      |  |                                                  |         |  |                               |  |         |                                         | 
|- Value of employee services                                          |  |                                                  | -       |  |                               |  | -       |                                         | 
|- Exercised                                                           |  |                                                  | -       |  |                               |  | 955     |                                         | 
|- Forfeited                                                           |  |                                                  | -       |  |                               |  | -       |                                         | 
|Restricted shares (Note 23):                                          |  |                                                  |         |  |                               |  |         |                                         | 
|- Value of employee services                                          |  |                                                  | -       |  |                               |  | -       |                                         | 
|- Vested                                                              |  |                                                  | -       |  |                               |  | 3,444   |                                         | 
|- Forfeited                                                           |  |                                                  | -       |  |                               |  | -       |                                         | 
|Purchase of own shares (Note 22)                                      |  |                                                  | -       |  |                               |  | (10,427 | )                                       | 
|Sale of non-controlling interests
    in subsidiaries (Note 21)       |  |                                                  | -       |  |                               |  | -       |                                         | 
|Balance at December 31,
    2014                                      |  |                                                  | 183,573 |  |                               |  | 933,044 |                                         | 



(*): Net
of 14,149 of Income Tax



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



F- 7







Adecoagro S.A.

Consolidated Statements of Changes in
Shareholders’ Equity

for the years ended December 31, 2016,
2015 and 2014

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



|                                                                     |  | Attributable
    to equity holders of the parent |         |  |                               |  |         |                                         | 
|-------------------------------------------------------------------- |  | ------------------------------------------------ | ------- |  | ----------------------------- |  | ------- | --------------------------------------- | 
|                                                                     |  | Share
    Capital  (Note 22)                     |         |  | Share
     Premium  (Note 22) |  |         | Cumulative
     Translation  Adjustment | 
|                                                                     |  |                                                  |         |  |                               |  |         |                                         | 
|Balance at January 1, 2015                                           |  |                                                  | 183,573 |  |                               |  | 933,044 |                                         | 
|Changes in Accounting Standard
    (see Note 32)                     |  |                                                  | -       |  |                               |  | -       |                                         | 
|Total equity at the beginning
    of the financial year              |  |                                                  | 183,573 |  |                               |  | 933,044 |                                         | 
|Loss for the year                                                    |  |                                                  | -       |  |                               |  | -       |                                         | 
|Other comprehensive income:                                          |  |                                                  |         |  |                               |  |         |                                         | 
|- Items
    that may be reclassified subsequently to profit or loss: |  |                                                  |         |  |                               |  |         |                                         | 
|Exchange differences on translating
    foreign operations           |  |                                                  | -       |  |                               |  | -       |                                         | 
|Cash flow
    hedge (*)                                              |  |                                                  | -       |  |                               |  | -       |                                         | 
|Other comprehensive income
    for the year                          |  |                                                  | -       |  |                               |  | -       |                                         | 
|Total comprehensive income
    for the year                          |  |                                                  | -       |  |                               |  | -       |                                         | 
|                                                                     |  |                                                  |         |  |                               |  |         |                                         | 
|Employee share options (Note 23)                                     |  |                                                  |         |  |                               |  |         |                                         | 
|- Exercised                                                          |  |                                                  | -       |  |                               |  | 1,786   |                                         | 
|- Forfeited                                                          |  |                                                  | -       |  |                               |  | -       |                                         | 
|Restricted shares (Note 23):                                         |  |                                                  |         |  |                               |  |         |                                         | 
|- Value of employee services                                         |  |                                                  | -       |  |                               |  | -       |                                         | 
|- Vested                                                             |  |                                                  | -       |  |                               |  | 3,103   |                                         | 
|- Forfeited                                                          |  |                                                  | -       |  |                               |  |         |                                         | 
|Purchase of own shares (Note 22)                                     |  |                                                  | -       |  |                               |  | (259    | )                                       | 
|Sale of non-controlling interests
    in subsidiaries (Note 21)      |  |                                                  | -       |  |                               |  | -       |                                         | 
|Balance at December 31,
    2015                                     |  |                                                  | 183,573 |  |                               |  | 937,674 |                                         | 



(*) Net of 49,106 of Income
Tax.



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



F- 8







Adecoagro S.A.

Consolidated Statements of Changes in
Shareholders’ Equity

for the years ended December 31, 2016,
2015 and 2014

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



|                                                                     |  | Attributable
    to equity holders of the parent |         |  |                               |  |         |                                         | 
|-------------------------------------------------------------------- |  | ------------------------------------------------ | ------- |  | ----------------------------- |  | ------- | --------------------------------------- | 
|                                                                     |  | Share
    Capital  (Note 22)                     |         |  | Share
     Premium  (Note 22) |  |         | Cumulative
     Translation  Adjustment | 
|                                                                     |  |                                                  |         |  |                               |  |         |                                         | 
|Balance at January 1, 2016                                           |  |                                                  | 183,573 |  |                               |  | 937,674 |                                         | 
|Changes in Accounting Standard
    (see Note 32)                     |  |                                                  | -       |  |                               |  | -       |                                         | 
|Total equity at the beginning
    of the financial year              |  |                                                  | 183,573 |  |                               |  | 937,674 |                                         | 
|Profit for the year                                                  |  |                                                  | -       |  |                               |  | -       |                                         | 
|Other comprehensive income:                                          |  |                                                  |         |  |                               |  |         |                                         | 
|- Items
    that may be reclassified subsequently to profit or loss: |  |                                                  |         |  |                               |  |         |                                         | 
|Exchange differences on translating
    foreign operations           |  |                                                  | -       |  |                               |  | -       |                                         | 
|Cash flow
    hedge (*)                                              |  |                                                  | -       |  |                               |  | -       |                                         | 
|Other comprehensive income
    for the year                          |  |                                                  | -       |  |                               |  | -       |                                         | 
|Total comprehensive income
    for the year                          |  |                                                  | -       |  |                               |  | -       |                                         | 
|                                                                     |  |                                                  |         |  |                               |  |         |                                         | 
|Employee share options (Note 23):                                    |  |                                                  |         |  |                               |  |         |                                         | 
|- Exercised                                                          |  |                                                  | -       |  |                               |  | 438     |                                         | 
|- Forfeited                                                          |  |                                                  | -       |  |                               |  | -       |                                         | 
|Restricted shares (Note 23):                                         |  |                                                  |         |  |                               |  |         |                                         | 
|- Value of employee services                                         |  |                                                  | -       |  |                               |  | -       |                                         | 
|- Vested                                                             |  |                                                  | -       |  |                               |  | 3,225   |                                         | 
|- Forfeited                                                          |  |                                                  | -       |  |                               |  |         |                                         | 
|Purchase of own shares (Note 22)                                     |  |                                                  | -       |  |                               |  | (4,087  | )                                       | 
|Balance at December 31,
    2016                                     |  |                                                  | 183,573 |  |                               |  | 937,250 |                                         | 



(*) Net
of (52,282) of Income Tax.



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



F- 9





Adecoagro S.A.

Consolidated
Statements of Cash Flows

for the years ended December 31, 2016,
2015 and 2014

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



|                                                                                              |  |  | Note |  |  |  | 2016    |   |  |  | 2015 (*) |   |  |  | 2014 (*) |  
|--------------------------------------------------------------------------------------------- |  |  | ---- |  |  |  | ------- | - |  |  | -------- | - |  |  | -------- | -
|Cash flows from operating activities:                                                         |  |  |      |  |  |  |         |   |  |  |          |   |  |  |          |  
|Profit / (Loss) for the year                                                                  |  |  |      |  |  |  | 3,739   |   |  |  | (4,351   | ) |  |  | 11,036   |  
|Adjustments for:                                                                              |  |  |      |  |  |  |         |   |  |  |          |   |  |  |          |  
|Income tax expense / (benefit)                                                                |  |  | 10   |  |  |  | 9,387   |   |  |  | (7,954   | ) |  |  | 10,535   |  
|Depreciation                                                                                  |  |  | 12   |  |  |  | 126,799 |   |  |  | 103,816  |   |  |  | 137,165  |  
|Amortization                                                                                  |  |  | 14   |  |  |  | 701     |   |  |  | 585      |   |  |  | 509      |  
|Gain from disposal of farmlands and other assets                                              |  |  | 8    |  |  |  | -       |   |  |  | (7,914   | ) |  |  | -        |  
|Loss/(Gain) from the disposal of other property items                                         |  |  | 8    |  |  |  | 1,255   |   |  |  | (721     | ) |  |  | (985     | )
|Equity settled share-based compensation granted                                               |  |  | 7    |  |  |  | 4,796   |   |  |  | 4,396    |   |  |  | 3,867    |  
|Loss/(Gain) from derivative financial instruments and forwards                                |  |  | 8, 9 |  |  |  | 21,745  |   |  |  | (17,686  | ) |  |  | (6,548   | )
|Interest and other financial expense, net                                                     |  |  | 9    |  |  |  | 44,734  |   |  |  | 43,822   |   |  |  | 50,941   |  
|Initial recognition and changes in fair value of non harvested biological assets (unrealized) |  |  | 3    |  |  |  | (9,811  | ) |  |  | (11,326  | ) |  |  | (12,635  | )
|Changes in net realizable value of agricultural produce after harvest (unrealized)            |  |  | 3    |  |  |  | 90      |   |  |  | (4,406   | ) |  |  | (1,134   | )
|Provision and allowances                                                                      |  |  |      |  |  |  | 341     |   |  |  | (79      | ) |  |  | 355      |  
|Share of loss from joint venture                                                              |  |  | 16   |  |  |  | -       |   |  |  | 2,685    |   |  |  | 924      |  
|Foreign exchange losses, net                                                                  |  |  | 9    |  |  |  | 19,062  |   |  |  | 23,423   |   |  |  | 9,246    |  
|Cash flow hedge – transfer from equity                                                        |  |  | 9    |  |  |  | 85,214  |   |  |  | 32,700   |   |  |  | 12,031   |  
|Subtotal                                                                                      |  |  |      |  |  |  | 308,052 |   |  |  | 156,990  |   |  |  | 215,307  |  
|Changes in operating assets and liabilities:                                                  |  |  |      |  |  |  |         |   |  |  |          |   |  |  |          |  
|(Increase) in trade and other receivables                                                     |  |  |      |  |  |  | (30,996 | ) |  |  | (2,300   | ) |  |  | (38,622  | )
|(Increase) in inventories                                                                     |  |  |      |  |  |  | (22,301 | ) |  |  | (9,275   | ) |  |  | (34,841  | )
|(Increase) in biological assets                                                               |  |  |      |  |  |  | (23,677 | ) |  |  | (20,154  | ) |  |  | (38,213  | )
|Decrease / (Increase) in other assets                                                         |  |  |      |  |  |  | 83      |   |  |  | (871     | ) |  |  | 21       |  
|(Increase) / Decrease in derivative financial instruments                                     |  |  |      |  |  |  | (17,892 | ) |  |  | 25,880   |   |  |  | 4,493    |  
|Increase / (Decrease) in trade and other payables                                             |  |  |      |  |  |  | 39,054  |   |  |  | (9,871   | ) |  |  | 6,390    |  
|Increase in payroll and social security liabilities                                           |  |  |      |  |  |  | 3,052   |   |  |  | 4,996    |   |  |  | 6,253    |  
|Increase / (Decrease) in provisions for other liabilities                                     |  |  |      |  |  |  | 1,175   |   |  |  | 21       |   |  |  | (179     | )
|Net cash generated from operating activities before taxes paid                                |  |  |      |  |  |  | 256,550 |   |  |  | 145,416  |   |  |  | 120,609  |  
|Income tax paid                                                                               |  |  |      |  |  |  | (1,149  | ) |  |  | (230     | ) |  |  | (458     | )
|Net cash generated from operating activities                                                  |  |  |      |  |  |  | 255,401 |   |  |  | 145,186  |   |  |  | 120,151  |  



(*): The prior years have been adjusted to reflect the
Company’s adoption of amendments to IAS 16 and IAS 41 as further described in Note 32.



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



F- 10







Adecoagro S.A.

Consolidated
Statements of Cash Flows (Continued)

for the years ended December 31, 2016,
2015 and 2014

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



|                                                                       |  |  | Note |  |  |  | 2016     |   |  |  | 2015 (*) |   |  |  | 2014 (*) |  
|---------------------------------------------------------------------- |  |  | ---- |  |  |  | -------- | - |  |  | -------- | - |  |  | -------- | -
|Cash flows from investing activities:                                  |  |  |      |  |  |  |          |   |  |  |          |   |  |  |          |  
|Purchases of property, plant and equipment                             |  |  | 12   |  |  |  | (134,105 | ) |  |  | (141,770 | ) |  |  | (305,728 | )
|Purchases of intangible assets                                         |  |  | 14   |  |  |  | (1,218   | ) |  |  | (1,203   | ) |  |  | (2,098   | )
|Interest received                                                      |  |  | 9    |  |  |  | 7,671    |   |  |  | 8,201    |   |  |  | 7,068    |  
|Proceeds from disposal of other property items,                        |  |  |      |  |  |  | 2,215    |   |  |  | 1,303    |   |  |  | 1,024    |  
|Proceeds from sale of farmland and other assets                        |  |  | 21   |  |  |  | -        |   |  |  | 12,610   |   |  |  | -        |  
|Proceeds from disposal of subsidiaries                                 |  |  | 21   |  |  |  | 3,423    |   |  |  | 3,890    |   |  |  | 1,318    |  
|Investment in joint ventures                                           |  |  | 16   |  |  |  | -        |   |  |  | -        |   |  |  | (1,372   | )
|Payment of seller financing arising on subsidiaries acquired           |  |  |      |  |  |  | -        |   |  |  | -        |   |  |  | (684     | )
|Loans to joint venture                                                 |  |  |      |  |  |  | -        |   |  |  | (8,082   | ) |  |  | -        |  
|Net cash used in investing activities                                  |  |  |      |  |  |  | (122,014 | ) |  |  | (125,051 | ) |  |  | (300,472 | )
|                                                                       |  |  |      |  |  |  |          |   |  |  |          |   |  |  |          |  
|Cash flows from financing activities:                                  |  |  |      |  |  |  |          |   |  |  |          |   |  |  |          |  
|Net proceeds from the sale of non-controlling interest in subsidiaries |  |  | 21   |  |  |  | -        |   |  |  | 21,964   |   |  |  | 49,343   |  
|Proceeds from equity settled shared-based compensation exercised       |  |  |      |  |  |  | 380      |   |  |  | 1,259    |   |  |  | 839      |  
|Proceeds from long-term borrowings                                     |  |  | 26   |  |  |  | 167,385  |   |  |  | 299,343  |   |  |  | 180,048  |  
|Payments of long-term borrowings                                       |  |  | 26   |  |  |  | (277,913 | ) |  |  | (165,455 | ) |  |  | (177,027 | )
|Interest paid                                                          |  |  |      |  |  |  | (48,400  | ) |  |  | (48,438  | ) |  |  | (48,899  | )
|Proceeds from short-term borrowings                                    |  |  | 26   |  |  |  | 257,395  |   |  |  | 211,045  |   |  |  | 152,216  |  
|Payments of short-term borrowings                                      |  |  | 26   |  |  |  | (272,033 | ) |  |  | (208,309 | ) |  |  | (70,239  | )
|Payment of derivatives financial instruments                           |  |  |      |  |  |  | (3,724   | ) |  |  | (18,676  | ) |  |  | -        |  
|Purchase of own shares                                                 |  |  |      |  |  |  | (4,772   | ) |  |  | (320     | ) |  |  | (12,992  | )
|Net cash generated from financing activities                           |  |  |      |  |  |  | (181,682 | ) |  |  | 92,413   |   |  |  | 73,289   |  
|Net increase / (decrease) in cash and cash equivalents                 |  |  |      |  |  |  | (48,295  | ) |  |  | 112,548  |   |  |  | (107,032 | )
|Cash and cash equivalents at beginning of year                         |  |  |      |  |  |  | 198,894  |   |  |  | 113,795  |   |  |  | 232,147  |  
|Effect of exchange rate changes on cash and cash equivalents           |  |  |      |  |  |  | 7,969    |   |  |  | (27,449  | ) |  |  | (11,320  | )
|Cash and cash equivalents at end of year                               |  |  |      |  |  |  | 158,568  |   |  |  | 198,894  |   |  |  | 113,795  |  



(*): The prior years have been adjusted to reflect the
Company’s adoption of amendments to IAS 16 and IAS 41 as further described in Note 32.



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



F- 11







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 1. | General information
| | -- | -------------------



Adecoagro S.A. (the
"Company" or "Adecoagro") is the Group’s ultimate parent company and is a société anonyme
(stock corporation) organized under the laws of the Grand Duchy of Luxembourg. Adecoagro is a holding company primarily engaged
through its operating subsidiaries in agricultural and agro-industrial activities. The Company and its operating subsidiaries are
collectively referred to hereinafter as the "Group". These activities are carried out through three major lines of business,
namely, Farming; Sugar, Ethanol and Energy and Land Transformation. Farming is further comprised of three reportable segments,
which are described in detail in Note 3 to these consolidated financial statements.



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



These consolidated
financial statements have been approved for issue by the Board of Directors on March 14, 2017.



| | 2. | Financial risk management
| | -- | -------------------------



Risk management
principles and processes



The Group’s activities
are exposed to a variety of financial risks. The Group’s overall risk management program focuses on the unpredictability
of financial markets and seeks to minimize the Group’s capital costs by using suitable means of financing and to manage and
control the Group’s financial risks effectively. The Group uses financial instruments to hedge certain risk exposures.



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



The principal financial
risks are related to raw material price, end-product price, exchange rate, interest rate, liquidity and credit. This section provides
a description of the principal risks and uncertainties that could have a material adverse effect on the Group’s strategy,
performance, results of operations and financial condition. These risks do not appear in any particular order of potential materiality
or probability of occurrence.



| | · | Exchange rate risk
| | - | ------------------



The Group’s cash
flows, statement of income and statement of financial position are presented in US dollars and may be affected by fluctuations
in exchange rates. Currency risks as defined by IFRS 7 arise on account of monetary assets and liabilities being denominated in
a currency that is not the functional currency.



A significant majority
of the Group’s business activities is conducted in the respective functional currencies of the subsidiaries (primarily the
Brazilian Reais and the Argentine Peso). However, the Group may transact in currencies other than the respective functional currencies,
mainly the US dollars. As such, these subsidiaries may hold US dollar denominated monetary balances at each year-end as indicated
in the tables below.



The Group’s net
financial position exposure to the US dollar is managed on a case-by-case basis, partly by hedging certain expected cash flows
with foreign exchange derivative contracts.



The following tables
show the net monetary position of the respective subsidiaries within the Group categorized by functional currency. Non-US dollar
amounts are presented in US dollars for purpose of these tables.



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



F- 12







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 2. | Financial risk management (continued)
| | -- | -------------------------------------



|                                          |  | 2016                              |        
|----------------------------------------- |  | --------------------------------- | -------
|                                          |  | Subsidiaries’ functional currency |        
|Net monetary position  (Liability)/ Asset |  | Argentine  Peso                   |        
|Argentine Peso                            |  |                                   | 1,518  
|Brazilian Reais                           |  |                                   | -      
|US Dollar                                 |  |                                   | (44,088
|Uruguayan Peso                            |  |                                   | -      
|Total                                     |  |                                   | (42,570



|                                          |  | 2015                              |        
|----------------------------------------- |  | --------------------------------- | -------
|                                          |  | Subsidiaries’ functional currency |        
|Net monetary position  (Liability)/ Asset |  | Argentine  Peso                   |        
|Argentine Peso                            |  |                                   | (7,513 
|Brazilian Reais                           |  |                                   | -      
|US Dollar                                 |  |                                   | (61,256
|Uruguayan Peso                            |  |                                   | -      
|Total                                     |  |                                   | (68,769



The Group’s analysis
shown on the tables below is carried out based on the exposure of each functional currency subsidiary against the US dollar. The
Group estimated that, other factors being constant, a hypothetical 10% appreciation/depreciation of the US dollar against the respective
functional currencies for the years ended December 31, 2016 and 2015 would have decreased/increased the Group’s Profit
Before Income Tax for the year. A 10% depreciation of the US dollar against the functional currencies would have an equal and
opposite effect on the income statement. A portion of this effect would have been recognized as other comprehensive income since
a portion of the Company’s borrowings was used as cash flow hedge of the foreign exchange rate risk of a portion of its highly
probable future sales in US dollars (see Hedge Accounting - Cash Flow Hedge below for details).



|                      |  | Functional currency | 
|--------------------- |  | ------------------- | 
|Net monetary position |  | Argentine  Peso     | 
|2016                  |  | US Dollar           | 
|2015                  |  | US Dollar           | 



The tables above only
consider the effect of a hypothetical appreciation / depreciation of the US dollars on the Group’s net financial position.
A hypothetical appreciation / depreciation of the US dollar against the functional currencies of the Group’s subsidiaries
has historically had a positive / negative effect, respectively, on the fair value of the Group’s biological assets and the
end prices of the Group’s agriculture produce, both of which are generally linked to the US dollar.



Hedge Accounting
- Cash Flow Hedge



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



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



F- 13







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 2. | Financial risk management (continued)
| | -- | -------------------------------------



Principal amounts of
long-term borrowings (non-derivative financial instruments) and notional values of foreign currency forward contracts (derivative
financial instruments) were designated as hedging instruments. These instruments are exposed to Brazilian Reais/ US dollar foreign
currency risks related to operations in Brazil and Argentine Peso/US Dollar in Argentina, respectively. As of December 31, 2016
and 2015, approximately 18.1% and 28.4%, respectively, of projected sales qualify as highly probable forecast transactions for
hedge accounting purposes and were designated as hedged items.



The Group has prepared
formal documentation in order to support the designation above, including an explanation of how the designation of the hedging
relationship is aligned with the Group’s Risk Management Policy, identification of the hedging instrument, the hedged transactions,
the nature of the risk being hedged and an analysis which demonstrates that the hedge is expected to be highly effective. The Group
reassesses the prospective and retrospective effectiveness of the hedge on an ongoing basis comparing the foreign currency component
of the carrying amount of the hedging instruments and of the highly probable future sales.



Under cash flow hedge
accounting, effect of changes in foreign currency exchange rates on derivative and non-derivative hedging instruments not be immediately
recognized in profit or loss, but be reclassified from equity to profit or loss in the periods when the future sales occur, thus
allowing for a more appropriate presentation of the results for the period reflecting the strategy in the Group’s Risk Management
Policy.



The
Company expects that the cash flows will occur and affect profit or loss between 2017 and 2021.



For the year ended
December 31, 2016, a total amount before income tax of 67,683 gain (US$ 176,657 loss in 2015) was recognized in other comprehensive
income and an amount of US$ 85,214 loss (US$ 32,700 loss in 2015) was reclassified from equity to profit or loss within “Financial
results, net”.



| | · | Raw material price risk
| | - | -----------------------



Inflation in the costs
of raw materials and goods and services from industry suppliers and manufacturers presents risks to project economics. A significant
portion of the Group’s cost structure includes the cost of raw materials primarily seeds, fertilizers and agrochemicals,
among others. Prices for these raw materials may vary significantly.



| | · | End-product price risk
| | - | ----------------------



Prices for commodities
products have historically been cyclical, reflecting overall economic conditions and changes in capacity within the industry, which
affect the profitability of entities engaged in the agribusiness industry. The Group combines different actions to minimize price risk.
A percentage of crops are to be sold during and post harvest period. The Group manages minimum and maximum prices for each commodity
as well as gross margin per each crop as to decide when and how to sell. End-product price risks are hedged if economically viable
and possible by entering into forward contracts with major trading houses or by using derivative financial instruments, consisting
mainly of crops and sugar future contracts, but also includes occasionally put and call options. A movement in end-product futures
prices would result in a change in the fair value of the end product hedging contracts. These fair value changes, after taxes,
are recorded in the statement of income.



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



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



F- 14





Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 2. | Financial risk management (continued)
| | -- | -------------------------------------



| | · | Liquidity risk
| | - | --------------



The Group is exposed
to liquidity risks, including risks associated with refinancing borrowings as they mature, and that borrowing facilities are not
available to meet cash requirements. Failure to manage liquidity risks could have a material impact on the Group’s cash flow
and statement of financial position.



Prudent liquidity risk
management includes managing the profile of debt maturities and funding sources close oversight of cash flows projections, maintaining
sufficient cash, and ensuring the availability of funding from an adequate amount of committed credit facilities and the ability
to close out market positions. The Group's ability to fund its existing and prospective debt requirements is managed by maintaining
diversified funding sources with adequate available funding lines from high quality lenders; and reaching to have long-term financial
facilities.



As of December 31,
2016, cash and cash equivalents of the Group totaled U$S 158.6 million, which could be used for managing liquidity risk.



The tables below analyzes
the Group’s non-derivative financial liabilities and derivative financial liabilities into relevant maturity groupings based
on the remaining period at the statement of financial position to the contractual maturity date. The amounts disclosed in the table
are the contractual undiscounted cash flows and as a result they do not reconcile to the amounts disclosed on the statement of
financial position except for short-term payables when discounting is not applied.



|At 31 December 2016              |  | Less than 1 year |         |  | Between 1 and 2 years |  |         | Between 2 and 5 years |  |  | Over 5 Years |  |  | Total |       
|-------------------------------- |  | ---------------- | ------- |  | --------------------- |  | ------- | --------------------- |  |  | ------------ |  |  | ----- | ------
|Trade and other payables         |  |                  | 79,715  |  |                       |  | 1,082   |                       |  |  | 19           |  |  |       | 326   
|Borrowings                       |  |                  | 239,588 |  |                       |  | 218,717 |                       |  |  | 221,036      |  |  |       | 35,702
|Derivative financial instruments |  |                  | 6,406   |  |                       |  | 662     |                       |  |  | -            |  |  |       | -     
|Total                            |  |                  | 325,709 |  |                       |  | 220,461 |                       |  |  | 221,055      |  |  |       | 36,028



|At 31 December 2015              |  | Less than 1 year |         |  | Between 1 and 2 years |  |         | Between 2 and 5 years |  |  | Over 5 Years |  |  | Total |       
|-------------------------------- |  | ---------------- | ------- |  | --------------------- |  | ------- | --------------------- |  |  | ------------ |  |  | ----- | ------
|Trade and other payables         |  |                  | 48,177  |  |                       |  | 566     |                       |  |  | 1,062        |  |  |       | 283   
|Borrowings                       |  |                  | 275,914 |  |                       |  | 176,712 |                       |  |  | 372,672      |  |  |       | 66,689
|Derivative financial instruments |  |                  | 6,575   |  |                       |  | 119     |                       |  |  | -            |  |  |       | -     
|Total                            |  |                  | 330,666 |  |                       |  | 177,397 |                       |  |  | 373,734      |  |  |       | 66,972



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



F- 15







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 2. | Financial risk management (continued)
| | -- | -------------------------------------



| | · | Interest rate risk
| | - | ------------------



The Group’s interest
rate risk arises from long-term borrowings at floating rates, which expose the Group to cash flow interest rate risk. Borrowings
issued at fixed rates expose the Group to fair value interest rate risk. The interest rate profile of the Group's borrowings is
set out in Note 26.



The Group occasionally
manages its cash flow interest rate risk exposure by using floating-to-fixed interest rate swaps. Such interest rate swaps have
the economic effect of converting borrowings from floating rates to fixed rates.



The following tables
show a breakdown of the Group’s fixed-rate and floating-rate borrowings per currency denomination and functional currency
of the subsidiary issuing the loans (excluding finance leases). These analyses are performed after giving effect to interest rate
swaps.



The analysis for
the year ended December 31, 2016 and 2015 is as follows:



|                                                        |  | 2016                              |       
|------------------------------------------------------- |  | --------------------------------- | ------
|                                                        |  | Subsidiaries’ functional currency |       
|Rate per currency denomination                          |  | Argentine  Peso                   |       
|Fixed rate:                                             |  |                                   |       
|Argentine Peso                                          |  |                                   | 1,005 
|Brazilian Reais                                         |  |                                   | -     
|US Dollar                                               |  |                                   | 15,065
|Subtotal Fixed-rate borrowings                          |  |                                   | 16,070
|Variable rate:                                          |  |                                   |       
|Brazilian Reais                                         |  |                                   | -     
|US Dollar                                               |  |                                   | 48,677
|Subtotal Variable-rate borrowings                       |  |                                   | 48,677
|Total borrowings as per analysis                        |  |                                   | 64,747
|Finance leases                                          |  |                                   | 181   
|Total borrowings as per statement of financial position |  |                                   | 64,928



|                                                        |  | 2015                              |       
|------------------------------------------------------- |  | --------------------------------- | ------
|                                                        |  | Subsidiaries’ functional currency |       
|Rate per currency denomination                          |  | Argentine  Peso                   |       
|Fixed rate:                                             |  |                                   |       
|Argentine Peso                                          |  |                                   | 3,125 
|Brazilian Reais                                         |  |                                   | -     
|US Dollar                                               |  |                                   | 58,378
|Subtotal Fixed-rate borrowings                          |  |                                   | 61,503
|Variable rate:                                          |  |                                   |       
|Brazilian Reais                                         |  |                                   | -     
|US Dollar                                               |  |                                   | 13,180
|Subtotal Variable-rate borrowings                       |  |                                   | 13,180
|Total borrowings as per analysis                        |  |                                   | 74,683
|Finance leases                                          |  |                                   | 279   
|Total borrowings as per statement of financial position |  |                                   | 74,962



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



F- 16







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 2. | Financial risk management (continued)
| | -- | -------------------------------------



For the years ended
December 31, 2016 and 2015, if interest rates on floating-rate borrowings had been 1% higher with all other variables held constant,
the Group’s Profit Before Income Tax for the years would have decreased as shown below. A 1% decrease in interest
rates would have an equal and opposite effect on the income statement.



|                                          |  | 2016                              |     
|----------------------------------------- |  | --------------------------------- | ----
|                                          |  | Subsidiaries’ functional currency |     
|Rate per currency denomination            |  | Argentine  Peso                   |     
|Variable rate:                            |  |                                   |     
|Brazilian Reais                           |  |                                   | -   
|US Dollar                                 |  |                                   | (487
|Total effects on Profit Before Income Tax |  |                                   | (487



|                                          |  | 2015                              |     
|----------------------------------------- |  | --------------------------------- | ----
|                                          |  | Subsidiaries’ functional currency |     
|Rate per currency denomination            |  | Argentine  Peso                   |     
|Variable rate:                            |  |                                   |     
|Brazilian Reais                           |  |                                   | -   
|US Dollar                                 |  |                                   | (132
|Total effects on Profit Before Income Tax |  |                                   | (132



The sensitivity analysis
has been determined assuming that the change in interest rates had occurred at the date of the statement of financial position
and had been applied to the exposure to interest rate risk for financial instruments in existence at that date. The 100 basis point
increase or decrease represents management's assessment of a reasonable possible change in those interest rates, which have the
most impact on the Group, specifically the United States and Brazilian rates over the period until the next annual statement of
financial position date.



| | · | Credit risk
| | - | -----------



The Group’s exposures
to credit risk arise in certain agreements in relation to amounts owed for physical product sales, the use of derivative instruments,
and the investment of surplus cash balances. The Group is also exposed to political and economic risk events, which may cause non-payment
of foreign currency obligations to the Group.



The Group’s policy
is to manage credit exposure to trading counterparties within defined trading limits. All of the Group’s significant counterparties
are assigned internal credit limits.



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



F- 17







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 2. | Financial risk management (continued)
| | -- | -------------------------------------



The Group sells to
a large base of customers. Type and class of customers may differ depending on the Group’s business segments. For the years
ended December 31, 2016 and 2015, more than 95% and 95%, respectively, of the Group’s sales of crops were sold to 121 and
95 well-known customers (both multinational and local) with good credit history with the Group. In the Sugar, Ethanol and Energy
segment, sales of ethanol were concentrated in 35 and 25 customers, which represented 96 % and 96 % of total sales of
ethanol for the years ended December 31, 2016 and 2015, respectively. Approximately 71 % and 82 % of the Group’s
sales of sugar were concentrated in 20 and 13 well-known traders for the years ended December 31, 2016 and 2015, respectively.
The remaining 3 % and 18 %, which mainly relates to “crystal sugar”, were dispersed among several customers.
In 2016 and 2015, energy sales are 96 % and 96 % concentrated in 14 major customers. In the dairy segment, 85 %
and 92 % of the sales were concentrated in 14 and 14 well-known customers in 2016 and 2015, respectively.



No credit limits were
exceeded during the reporting periods and management does not expect any losses from non-performance by these counterparties. If
any of the Group’s customers are independently rated, these ratings are used. Otherwise, the Group assesses the credit quality
of the customer taking into account its financial position, past experience and other factors (see Note 18 for details). The Group
may seek cash collateral, letter of credit or parent company guarantees, as considered appropriate. Sales to customers are primarily
made by credit with customary payment terms. The maximum exposure to credit risk is represented by the carrying amount of each
financial asset in the statement of financial position after deducting any impairment allowance. The Group’s exposure of
credit risk arising from trade receivables is set out in Note 18.



The Group is exposed
to counterparty credit risk on cash and cash equivalent balances. The Group holds cash on deposit with a number of financial institutions.
The Group manages its credit risk exposure by limiting individual deposits to clearly defined limits. The Group only deposits with
high quality banks and financial institutions. As of December 31, 2016 and 2015, the total amount of cash and cash equivalents
mainly comprise cash in banks and short-term bank deposits. The Group is authorized to transact with banks rated “BBB+”
or higher. As of December 31, 2016 and 2015, 4 and 3 banks (primarily HSBC, Rabobank, Citibank and Banco do Brasil) accounted
for more than 85 % and 86 %, respectively, of the total cash deposited. The remaining amount of cash and cash equivalents
relates to cash in hand. Additionally, during the year ended December 31, 2016, the Group invested in fixed-term bank deposits
with mainly two banks (Banco do Brasil and Citibank) and also entered into derivative contracts (currency forward). The Group does
not have investment in securities or other financial instruments for which risk may have increased due to the financial credit
crisis. The Group’s exposure of credit risk arising from cash and cash equivalents is set out in Note 20.



The Group’s primary
objective for holding derivative financial instruments is to manage currency exchange rate risk, interest rate risk and commodity
price risk. The Group generally enters into derivative transactions with high-credit-quality counterparties and, by policy, limits
the amount of credit exposure to any one counterparty based on an analysis of that counterparty's relative credit standing. The
amounts subject to credit risk related to derivative instruments are generally limited to the amounts, if any, by which counterparty's
obligations exceed the obligations with that counterparty.



The Group arranged
interest rate swaps with HSBC and Itau in Brazil. The Group also entered into crop commodity futures traded in the established
trading markets of Argentina and Brazil through well-rated brokers. Management does not expect any counterparty to fail to meet
its obligations.



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



F- 18







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 2. | Financial risk management (continued)
| | -- | -------------------------------------



| | · | Capital risk management
| | - | -----------------------



The Group’s objectives
when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for
shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In
order to maintain or adjust the capital structure, it may adjust the amount of dividends paid to shareholders, return capital to
shareholders, issue new shares or by own shares or sell assets to reduce debt. Consistent with others in the industry, the Group
monitors capital on the basis of the gearing ratio. This ratio is calculated as total debt (including current and non-current borrowings
as shown in the consolidated statement of financial position, if applicable) divided by total capital. Total capital is calculated
as equity, as shown in the consolidated statement of financial position, plus total debt. During the year ended December 31,
2016, the strategy was to maintain the gearing ratio within 0.45 to 0.60, as follows:



|              |  |  | 2016      |  |  |  | 2015 (*)  | 
|------------- |  |  | --------- |  |  |  | --------- | 
|Total Debt    |  |  | 635,396   |  |  |  | 723,339   | 
|Total Equity  |  |  | 671,673   |  |  |  | 527,419   | 
|Total Capital |  |  | 1,307,069 |  |  |  | 1,250,758 | 
|Gearing Ratio |  |  | 0.49      |  |  |  | 0.58      | 



(*) The prior years have been adjusted to reflect the Company’s
adoption of amendments to IAS 16 and IAS 41 as further described in Note 32.



| | · | Derivative financial instruments
| | - | --------------------------------



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



Derivative financial
instruments involve, to a varying degree, elements of market and credit risk not recognized in the financial statements. The market
risk associated with these instruments resulting from price movements is expected to offset the market risk of the underlying transactions,
assets and liabilities, being hedged. The counterparties to the agreements relating to the Group’s contracts generally are
large institutions with credit ratings equal to or higher than BBB+. The Group continually monitors the credit rating of such counterparties
and seeks to limit its financial exposure to any one financial institution. While the contract or notional amounts of derivative
financial instruments provide one measure of the volume of these transactions, they do not represent the amount of the Group’s
exposure to credit risk. The amounts potentially subject to credit risk (arising from the possible inability of counterparties
to meet the terms of their contracts) are generally limited to the amounts, if any, by which the counterparties’ obligations
under the contracts exceed the Group’s obligations to the counterparties.



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



F- 19







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 2. | Financial risk management (continued)
| | -- | -------------------------------------



The following tables
show the outstanding positions for each type of derivative contract as of the date of each statement of financial position:



| | § | Futures/ options
| | - | ----------------



As of December 31, 2016:



|                            |  | 2016                       
|--------------------------- |  | ---------------------------
|Type of
derivative contract |  | Quantities
(thousands) (**)
|Futures:                    |  |                            
|Sale                        |  |                            
|Corn                        |  |                            
|Soybean                     |  |                            
|Sugar                       |  |                            
|Ethanol                     |  |                            
|Options:                    |  |                            
|Buy put                     |  |                            
|Soybean                     |  |                            
|Sugar                       |  |                            
|Sell call                   |  |                            
|Sugar                       |  |                            
|Sell put                    |  |                            
|Sugar                       |  |                            
|Total                       |  |                            



As of December 31, 2015:



|                            |  | 2015                       
|--------------------------- |  | ---------------------------
|Type of
derivative contract |  | Quantities
(thousands)
(**)
|Futures:                    |  |                            
|Sale                        |  |                            
|Corn                        |  |                            
|Soybean                     |  |                            
|Sugar                       |  |                            
|Ethanol                     |  |                            
|OTC:                        |  |                            
|Sugar                       |  |                            
|Options:                    |  |                            
|Buy put                     |  |                            
|Soybean                     |  |                            
|Sugar                       |  |                            
|Sell call                   |  |                            
|Sugar                       |  |                            
|Sell put                    |  |                            
|Sugar                       |  |                            
|Total                       |  |                            



(*) Included in the line item “(Loss) / Gain
from commodity derivative financial instruments” of Note 8.

(**) All quantities expressed in tons and
m3.

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



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



F- 20







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 2. | Financial risk management (continued)
| | -- | -------------------------------------



| | § | Foreign currency floating-to-fixed interest rate swap
| | - | -----------------------------------------------------



In July 2016 the Group's
subsidiary in Brazil, Adecoagro Vale do Ivinhema entered into a Reais 90 million (US$ 27.8 as of that date) loan with Bradesco.
The loan bears interest at a variable rate of CDI (an interbanking floating interest rate in USD) plus 2.1% per year. At same moment
and with same bank, the Company entered into a swap operation, which intention is to effectively convert the principal amount and
interest rate denominated in Reais, to a principal amount an interest rate denominated in US$, plus a fixed rate of 6.55 %.
The swap expires according to the due dates of the loan, until May 2019. As of December 31, 2016, the Group recorded a liability
of US$ 0.7 million representing the estimated fair value of the swap as of that date.



| | § | Currency forward
| | - | ----------------



During the year ended
December 31, 2016, the Group entered into several currency forward contracts with Brazilian banks in order to hedge the fluctuation
of the Brazilian Reais against the US Dollar for a total aggregate amount of US$ 57.2 million. The currency forward contracts entered
in 2016 had maturity dates ranging between March 2016 and April 2017. The outstanding contracts resulted in a recognition of a
loss of US$ 16.9 million in 2016.



During the year ended
on December 31, 2016, the Group entered into several currency forward contracts with Argentinian banks in order to hedge the fluctuation
of the Argentinean peso against US Dollar for a total notional amount of US$ 30.2 million. The currency forward contracts maturity
date were in February 2016 and May 2017. The outstanding contracts resulted in the recognition of a loss amounting to US$ 0.3 million
in 2016.



During the year ended
on December 31, 2016, the Group entered into several currency forward contracts in order to hedge the fluctuation of the US Dollar
against Euro for a total notional amount of US$ 10.7 million. The currency forward contracts maturity date is March 2017.
The outstanding contracts resulted in the recognition of a gain amounting to US$ 0.6 million in 2016.



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



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



F- 21







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 3. | Segment information
| | -- | -------------------



According to IFRS 8,
operating segments are identified based on the ‘management approach’. Operating segments are components of an entity
about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”)
in deciding how to allocate resources and in assessing performance (the Management committee in the case of the Company). This
classification is based on the differences in the nature of its operations, products and services. This approach stipulates external
segment reporting based on the Group’s internal organizational and management structure and on internal financial reporting
to the chief operating decision maker.



The Group operates
in three major lines of business, namely, Farming; Sugar, Ethanol and Energy; and Land Transformation. The Coffee and Cattle businesses
are now presented within “Farming – All Other Segments” because they not meet the quantitive threshold for disclosure.



| | · | 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 this segment
does not represent a separate operating segment. Management seeks to maximize the use of the land through the cultivation of one
or more type of crops. Types and surface amount of crops cultivated may vary from harvest year to harvest year depending on several
factors, some of them out of the Group ́s control. Management is focused on the long-term performance of the productive land,
and to that extent, the performance is assessed considering the aggregated combination, if any, of crops planted in the land. A
single manager is responsible for the management of operating activity of all crops rather than for each individual crop.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



| | § | The Group’s ‘Dairy’ Segment consists of the production and sale of raw
milk and other dairy products,
| | - | -----------------------------------------------------------------------------------------------------



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



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



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



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



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



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



F- 22







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 3. | Segment information (continued)
| | -- | -------------------------------



Segment analysis for
the year ended December 31, 2016



|                                                                                                             |  | Farming |          | Sugar,Ethanol and |  | Land  |         | Corporate             |  | Total            
|------------------------------------------------------------------------------------------------------------ |  | ------- | -------- | ----------------- |  | ----- | ------- | --------------------- |  | -----------------
|                                                                                                             |  | Crops   |          | Rice              |  | Dairy |         | All
    othersegments |  | Farming

subtotal
|Sales of goods and services rendered                                                                         |  |         | 142,124  |                   |  |       | 96,562  |                       |  |                  
|Cost of goods sold and services rendered                                                                     |  |         | (141,731 | )                 |  |       | (83,574 | )                     |  |                  
|Initial recognition and changes in fair value of biological assets
    and agricultural produce              |  |         | 48,790   |                   |  |       | 10,498  |                       |  |                  
|Changes in net realizable value of agricultural
    produce after harvest                                    |  |         | (5,841   | )                 |  |       | -       |                       |  |                  
|Margin on Manufacturing and Agricultural Activities
    Before Operating Expenses                            |  |         | 43,342   |                   |  |       | 23,486  |                       |  |                  
|General and administrative expenses                                                                          |  |         | (2,770   | )                 |  |       | (3,373  | )                     |  |                  
|Selling expenses                                                                                             |  |         | (5,692   | )                 |  |       | (11,583 | )                     |  |                  
|Other operating income, net                                                                                  |  |         | (8,787   | )                 |  |       | 402     |                       |  |                  
|Share of loss of joint ventures                                                                              |  |         | -        |                   |  |       | -       |                       |  |                  
|Profit / (loss) from Operations Before Financing and Taxation                                                |  |         | 26,093   |                   |  |       | 8,932   |                       |  |                  
|                                                                                                             |  |         |          |                   |  |       |         |                       |  |                  
|Depreciation and amortization                                                                                |  |         | (1,369   | )                 |  |       | (2,766  | )                     |  |                  
|Initial recognition and changes in fair value of biological assets
    and agricultural produce (unrealized) |  |         | 5,790    |                   |  |       | 2,316   |                       |  |                  
|Initial recognition and changes in fair value of biological assets
    and agricultural produce (realized)   |  |         | 43,000   |                   |  |       | 8,182   |                       |  |                  
|Changes in net realizable value of agricultural produce after harvest
    (unrealized)                       |  |         | (90      | )                 |  |       | -       |                       |  |                  
|Changes in net realizable value of agricultural produce after harvest
    (realized)                         |  |         | (5,751   | )                 |  |       | -       |                       |  |                  
|Farmlands and farmland improvements, net                                                                     |  |         | 68,224   |                   |  |       | 18,868  |                       |  |                  
|Machinery, equipment and other fixed assets, net                                                             |  |         | 3,892    |                   |  |       | 14,949  |                       |  |                  
|Bearer plants, net                                                                                           |  |         | -        |                   |  |       | -       |                       |  |                  
|Work in progress                                                                                             |  |         | 1,100    |                   |  |       | 3,274   |                       |  |                  
|Investment property                                                                                          |  |         | -        |                   |  |       | -       |                       |  |                  
|Goodwill                                                                                                     |  |         | 3,782    |                   |  |       | 1,737   |                       |  |                  
|Biological assets                                                                                            |  |         | 28,189   |                   |  |       | 25,575  |                       |  |                  
|Inventories                                                                                                  |  |         | 29,562   |                   |  |       | 12,102  |                       |  |                  
|Total segment assets                                                                                         |  |         | 134,749  |                   |  |       | 76,505  |                       |  |                  
|Borrowings                                                                                                   |  |         | 43,878   |                   |  |       | 47,156  |                       |  |                  
|Total segment liabilities                                                                                    |  |         | 43,878   |                   |  |       | 47,156  |                       |  |                  



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



F- 23







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 3. | Segment information (continued)
| | -- | -------------------------------



Segment analysis for
the year ended December 31, 2015



|                                                                                                             |  | Farming |          | Sugar,Ethanol and |  | Land  |         | Corporate         |  | Total          
|------------------------------------------------------------------------------------------------------------ |  | ------- | -------- | ----------------- |  | ----- | ------- | ----------------- |  | ---------------
|                                                                                                             |  | Crops   |          | Rice              |  | Dairy |         | All othersegments |  | Farmingsubtotal
|Sales of goods and services rendered                                                                         |  |         | 154,741  |                   |  |       | 84,668  |                   |  |                
|Cost of goods sold and services rendered                                                                     |  |         | (154,287 | )                 |  |       | (69,075 | )                 |  |                
|Initial recognition and changes in fair value of biological assets and agricultural produce                  |  |         | 11,561   |                   |  |       | 2,822   |                   |  |                
|Changes in net realizable value of agricultural produce after
    harvest                                    |  |         | 14,691   |                   |  |       | -       |                   |  |                
|Margin on Manufacturing and Agricultural Activities Before
    Operating Expenses                            |  |         | 26,706   |                   |  |       | 18,415  |                   |  |                
|General and administrative expenses                                                                          |  |         | (3,987   | )                 |  |       | (3,136  | )                 |  |                
|Selling expenses                                                                                             |  |         | (5,672   | )                 |  |       | (12,592 | )                 |  |                
|Other operating income, net                                                                                  |  |         | 16,422   |                   |  |       | 600     |                   |  |                
|Share of loss of joint ventures                                                                              |  |         | (2,685   | )                 |  |       | -       |                   |  |                
|Profit / (loss) from Operations Before Financing and Taxation                                                |  |         | 30,784   |                   |  |       | 3,287   |                   |  |                
|                                                                                                             |  |         |          |                   |  |       |         |                   |  |                
|Reserve from the sale of non-controlling interests in subsidiaries (see Note 21)                             |  |         | -        |                   |  |       | -       |                   |  |                
|Depreciation and amortization                                                                                |  |         | (2,427   | )                 |  |       | (2,987  | )                 |  |                
|Initial recognition and changes in fair value of biological assets and agricultural produce
    (unrealized) |  |         | 2,234    |                   |  |       | 587     |                   |  |                
|Initial recognition and changes in fair value of biological assets and agricultural produce
    (realized)   |  |         | 9,327    |                   |  |       | 2,235   |                   |  |                
|Changes in net realizable value of agricultural produce after harvest (unrealized)                           |  |         | 4,406    |                   |  |       | -       |                   |  |                
|Changes in net realizable value of agricultural produce after harvest (realized)                             |  |         | 10,285   |                   |  |       | -       |                   |  |                
|                                                                                                             |  |         |          |                   |  |       |         |                   |  |                
|Farmlands and farmland improvements, net                                                                     |  |         | 75,702   |                   |  |       | 16,053  |                   |  |                
|Machinery, equipment and other fixed assets, net                                                             |  |         | 3,853    |                   |  |       | 14,367  |                   |  |                
|Bearer plants, net                                                                                           |  |         | -        |                   |  |       | -       |                   |  |                
|Work in progress                                                                                             |  |         | 935      |                   |  |       | 5,604   |                   |  |                
|Investment property                                                                                          |  |         | -        |                   |  |       | -       |                   |  |                
|Goodwill                                                                                                     |  |         | 4,609    |                   |  |       | 2,117   |                   |  |                
|Biological assets                                                                                            |  |         | 22,536   |                   |  |       | 23,131  |                   |  |                
|Inventories                                                                                                  |  |         | 27,770   |                   |  |       | 13,584  |                   |  |                
|Total segment assets                                                                                         |  |         | 135,405  |                   |  |       | 74,856  |                   |  |                
|Borrowings                                                                                                   |  |         | 54,321   |                   |  |       | 24,932  |                   |  |                
|Total segment liabilities                                                                                    |  |         | 54,321   |                   |  |       | 24,932  |                   |  |                



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



F- 24







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 3. | Segment information (continued)
| | -- | -------------------------------



Segment analysis for the year ended December
31, 2014



|                                                                                                             |  | Farming |          | Sugar,
    Ethanol |  | Land  |         | Corporate                  |  | Total               
|------------------------------------------------------------------------------------------------------------ |  | ------- | -------- | ------------------ |  | ----- | ------- | -------------------------- |  | --------------------
|                                                                                                             |  | Crops   |          | Rice               |  | Dairy |         | All
    other
    segments |  | Farming
    subtotal
|Sales of goods sold and services rendered                                                                    |  |         | 177,662  |                    |  |       | 103,682 |                            |  |                     
|Cost of goods sold and services rendered                                                                     |  |         | (177,473 | )                  |  |       | (84,199 | )                          |  |                     
|Initial recognition and changes in fair value of biological assets
    and agricultural produce              |  |         | 40,267   |                    |  |       | 8,559   |                            |  |                     
|Changes in net realizable value of agricultural
    produce after harvest                                    |  |         | 3,401    |                    |  |       | -       |                            |  |                     
|Margin on Manufacturing
    and Agricultural Activities Before Operating Expenses                            |  |         | 43,857   |                    |  |       | 28,042  |                            |  |                     
|General and administrative expenses                                                                          |  |         | (4,343   | )                  |  |       | (3,218  | )                          |  |                     
|Selling expenses                                                                                             |  |         | (4,201   | )                  |  |       | (14,367 | )                          |  |                     
|Other operating income, net                                                                                  |  |         | 356      |                    |  |       | 480     |                            |  |                     
|Share of loss of joint ventures                                                                              |  |         | (924     | )                  |  |       | -       |                            |  |                     
|Profit / (loss) from Operations Before Financing
    and Taxation                                            |  |         | 34,745   |                    |  |       | 10,937  |                            |  |                     
|                                                                                                             |  |         |          |                    |  |       |         |                            |  |                     
|Reserve from the sale of non-controlling interests in subsidiaries
    (see Note 21)                         |  |         | -        |                    |  |       | -       |                            |  |                     
|Depreciation and amortization                                                                                |  |         | (1,926   | )                  |  |       | (3,261  | )                          |  |                     
|Initial recognition and changes in fair value of biological assets
    and agricultural produce (unrealized) |  |         | 2,813    |                    |  |       | (2,340  | )                          |  |                     
|Initial recognition and changes in fair value of biological assets
    and agricultural produce (realized)   |  |         | 37,454   |                    |  |       | 10,899  |                            |  |                     
|Gain from changes in net realizable value of agricultural produce
    after harvest (unrealized)             |  |         | 1,134    |                    |  |       | -       |                            |  |                     
|Gain from changes in net realizable value of agricultural produce
    after harvest (realized)               |  |         | 2,267    |                    |  |       | -       |                            |  |                     



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



F- 25







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 3. | Segment information (continued)
| | -- | -------------------------------



Total segment assets
and liabilities are measured in a manner consistent with that of the consolidated financial statements. These assets and
liabilities are allocated based on the operations of the segment and the physical location of the asset. The Group’s investment
in CHS Agro S.A. is allocated to the ‘Crops’ segment. Therefore, the Group’s share of profit or loss after income
taxes and its carrying amount are reported in this segment.



Total reportable segments’
assets and liabilities are reconciled to total assets as per the statement of financial position as follows:



|                                                        |  | 2016 |           | 2015
|------------------------------------------------------- |  | ---- | --------- | ----
|Total reportable assets as per Segment Information      |  |      | 1,075,837 |     
|Intangible assets (excluding goodwill)                  |  |      | 3,847     |     
|Deferred income tax assets                              |  |      | 38,586    |     
|Trade and other receivables                             |  |      | 174,940   |     
|Other assets                                            |  |      | 590       |     
|Derivative financial instruments                        |  |      | 3,398     |     
|Cash and cash equivalents                               |  |      | 158,568   |     
|Total assets as per the Statement of Financial Position |  |      | 1,455,766 |     



|                                                             |  | 2016 |         | 2015
|------------------------------------------------------------ |  | ---- | ------- | ----
|Total reportable liabilities as per Segment Information      |  |      | 635,396 |     
|Trade and other payables                                     |  |      | 93,585  |     
|Deferred income tax liabilities                              |  |      | 14,689  |     
|Payroll and social liabilities                               |  |      | 28,079  |     
|Provisions for other liabilities                             |  |      | 3,889   |     
|Current income tax liabilities                               |  |      | 1,387   |     
|Derivative financial instruments                             |  |      | 7,068   |     
|Total liabilities as per the Statement of Financial Position |  |      | 784,093 |     



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



F- 26







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 3. | Segment information (continued)
| | -- | -------------------------------



Non-current assets
and net revenue and fair value gains and losses are shown by geographic region. These are the regions in which the Group is active:
Argentina, Brazil and Uruguay.



As of and for the year
ended December 31, 2016:



|                                                                                            |  | Argentina |         | Brazil |  | Uruguay |         | Total
|------------------------------------------------------------------------------------------- |  | --------- | ------- | ------ |  | ------- | ------- | -----
|Property, plant and equipment                                                               |  |           | 101,513 |        |  |         | 694,137 |      
|Investment property                                                                         |  |           | 2,666   |        |  |         | -       |      
|Goodwill                                                                                    |  |           | 5,980   |        |  |         | 7,425   |      
|Non-current portion of biological assets                                                    |  |           | 8,516   |        |  |         | -       |      
|                                                                                            |  |           |         |        |  |         |         |      
|Initial recognition and changes in fair value of biological assets and agricultural produce |  |           | 62,970  |        |  |         | 62,556  |      
|(Loss) from changes in net realizable value of agricultural produce after harvest           |  |           | (4,491  | )      |  |         | (958    | )    
|Sales of goods and services rendered                                                        |  |           | 164,264 |        |  |         | 432,468 |      



As of and for the year
ended December 31, 2015:



|                                                                                            |  | Argentina |         | Brazil |  | Uruguay |         | Total
|------------------------------------------------------------------------------------------- |  | --------- | ------- | ------ |  | ------- | ------- | -----
|Property, plant and equipment                                                               |  |           | 110,218 |        |  |         | 579,694 |      
|Investment property                                                                         |  |           | 4,796   |        |  |         | -       |      
|Goodwill                                                                                    |  |           | 7,287   |        |  |         | 6,223   |      
|Non-current portion of biological assets                                                    |  |           | 6,476   |        |  |         | -       |      
|                                                                                            |  |           |         |        |  |         |         |      
|Initial recognition and changes in fair value of biological assets and agricultural produce |  |           | 16,637  |        |  |         | 37,097  |      
|Gain / (Loss) from changes in net realizable value of agricultural produce after harvest    |  |           | 16,139  |        |  |         | (32     | )    
|Sales of goods and services rendered                                                        |  |           | 166,447 |        |  |         | 295,456 |      



As of and for the year
ended December 31, 2014:



|                                                                                            |  | Argentina |         | Brazil |  | Uruguay |         | Total
|------------------------------------------------------------------------------------------- |  | --------- | ------- | ------ |  | ------- | ------- | -----
|                                                                                            |  |           |         |        |  |         |         |      
|Initial recognition and changes in fair value of biological assets and agricultural produce |  |           | 57,369  |        |  |         | 42,042  |      
|Gain / (Loss) from changes in net realizable value of agricultural produce after harvest    |  |           | 1,629   |        |  |         | (345    | )    
|Sales of goods and services rendered                                                        |  |           | 192,820 |        |  |         | 328,512 |      



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



F- 27







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 4. | Sales
| | -- | -----



|                                             |  | 2016 |         | 2015 |  | 2014
|-------------------------------------------- |  | ---- | ------- | ---- |  | ----
|Manufactured products and services rendered: |  |      |         |      |  |     
|Rice                                         |  |      | 94,331  |      |  |     
|Ethanol                                      |  |      | 211,451 |      |  |     
|Sugar                                        |  |      | 330,895 |      |  |     
|Soybean oil and meal                         |  |      | -       |      |  |     
|Energy                                       |  |      | 53,995  |      |  |     
|Powder milk                                  |  |      | 4,816   |      |  |     
|Services                                     |  |      | 1,160   |      |  |     
|Operating Leases                             |  |      | 984     |      |  |     
|Others                                       |  |      | 1,423   |      |  |     
|                                             |  |      | 699,055 |      |  |     
|Agricultural produce and biological assets:  |  |      |         |      |  |     
|Soybean                                      |  |      | 63,797  |      |  |     
|Cattle for dairy                             |  |      | 3,059   |      |  |     
|Corn                                         |  |      | 48,502  |      |  |     
|Cotton                                       |  |      | 1,434   |      |  |     
|Milk                                         |  |      | 24,561  |      |  |     
|Wheat                                        |  |      | 16,951  |      |  |     
|Sunflower                                    |  |      | 7,275   |      |  |     
|Sorghum                                      |  |      | -       |      |  |     
|Rice                                         |  |      | 950     |      |  |     
|Barley                                       |  |      | 1,240   |      |  |     
|Seeds                                        |  |      | 625     |      |  |     
|Others                                       |  |      | 1,786   |      |  |     
|                                             |  |      | 170,180 |      |  |     
|Total sales                                  |  |      | 869,235 |      |  |     



Commitments to
sell commodities at a future date



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



The notional amount
of these contracts is US$ 111.8 million as of December 31, 2016 (2015: US$ 62.4 million; 2014: US$ 31.5 million)
comprised primarily of 146,524 tons of sugar (US$ 59.5 million), 10,005 m3 of ethanol (US$ 4.5 million), 464,697 mwh
of energy (US$ 28.0 million), 23,179 tons of soybean (U$S 6.1 million), 31,598 tons of wheat (US$ 5.4 million),
and 52,918 tons of corn (US$ 8.1 million) which expire between February 2017 and December 2017.



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



F- 28







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 5. | Cost of goods sold and services rendered
| | -- | ----------------------------------------



As of December 31, 2016:



|                                                                                        |  | 2016 
|--------------------------------------------------------------------------------------- |  | -----
|                                                                                        |  | Crops
|Finished goods at the beginning of 2016 (Note 19)                                       |  |      
|Cost of production of manufactured products (Note 6)                                    |  |      
|Purchases                                                                               |  |      
|Agricultural produce                                                                    |  |      
|Transfer to raw material                                                                |  |      
|Direct agricultural selling expenses                                                    |  |      
|Tax recoveries (i)                                                                      |  |      
|Changes in net realizable value of agricultural produce after harvest                   |  |      
|Finished goods at the end of December 31, 2016 (Note 19)                                |  |      
|Exchange differences                                                                    |  |      
|Cost of goods sold and services rendered, and direct agricultural selling expenses year |  |      



(i): Correspond to the presumed credit
of ICMS over the sale values.



As of December 31, 2015:



|                                                                                        |  | 2015 
|--------------------------------------------------------------------------------------- |  | -----
|                                                                                        |  | Crops
|Finished goods at the beginning of 2015 (Note 19)                                       |  |      
|Cost of production of manufactured products (Note 6)                                    |  |      
|Purchases                                                                               |  |      
|Agricultural produce                                                                    |  |      
|Transfer to raw material                                                                |  |      
|Direct agricultural selling expenses                                                    |  |      
|Tax recoveries (i)                                                                      |  |      
|Changes in net realizable value of agricultural produce after harvest                   |  |      
|Finished goods at the end of December 31, 2015 (Note 19)                                |  |      
|Exchange differences                                                                    |  |      
|Cost of goods sold and services rendered, and direct agricultural selling expenses year |  |      



(i): Correspond to the presumed credit
of ICMS over the sale values.



As of December 31, 2014:



|                                                                                        |  | 2014 
|--------------------------------------------------------------------------------------- |  | -----
|                                                                                        |  | Crops
|Finished goods at the beginning of 2014 (Note 19)                                       |  |      
|Cost of production of manufactured products (Note 6)                                    |  |      
|Purchases                                                                               |  |      
|Agricultural produce                                                                    |  |      
|Transfer to raw material                                                                |  |      
|Direct agricultural selling expenses                                                    |  |      
|Tax recoveries (i)                                                                      |  |      
|Changes in net realizable value of agricultural produce after harvest                   |  |      
|Finished goods at the end of December 31, 2014 (Note 19)                                |  |      
|Exchange differences                                                                    |  |      
|Cost of goods sold and services rendered, and direct agricultural selling expenses year |  |      



(i): Correspond to the presumed credit of
ICMS over the sale values.



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



F- 29







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 6. | Expenses by nature
| | -- | ------------------



The Group presented the statement of income
under the function of expense method. Under this method, expenses are classified according to their function as part of the line
items “cost of goods sold and direct agricultural selling expenses”, “general and administrative expenses”
and “selling expenses”.



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



Expenses by nature
for the year ended December 31, 2016:



|                                                         |  | Cost of production of manufactured products (Note 5) |     |      |  |       |        |                    
|-------------------------------------------------------- |  | ---------------------------------------------------- | --- | ---- |  | ----- | ------ | -------------------
|                                                         |  | Crops                                                |     | Rice |  | Dairy |        | All other  segments
|Salaries, social security expenses and employee benefits |  |                                                      | -   |      |  |       | 5,590  |                    
|Raw materials and consumables                            |  |                                                      | 468 |      |  |       | 3,927  |                    
|Depreciation and amortization                            |  |                                                      | -   |      |  |       | 856    |                    
|Fuel, lubricants and others                              |  |                                                      | -   |      |  |       | 86     |                    
|Maintenance and repairs                                  |  |                                                      | -   |      |  |       | 1,408  |                    
|Freights                                                 |  |                                                      | -   |      |  |       | 4,901  |                    
|Export taxes / selling taxes                             |  |                                                      | -   |      |  |       | -      |                    
|Export expenses                                          |  |                                                      | -   |      |  |       | -      |                    
|Contractors and services                                 |  |                                                      | 10  |      |  |       | -      |                    
|Energy transmission                                      |  |                                                      | -   |      |  |       | -      |                    
|Energy power                                             |  |                                                      | -   |      |  |       | 913    |                    
|Professional fees                                        |  |                                                      | -   |      |  |       | 90     |                    
|Other taxes                                              |  |                                                      | -   |      |  |       | 58     |                    
|Contingencies                                            |  |                                                      | -   |      |  |       | -      |                    
|Lease expense and similar arrangements                   |  |                                                      | -   |      |  |       | 145    |                    
|Third parties raw materials                              |  |                                                      | -   |      |  |       | 3,001  |                    
|Tax recoveries                                           |  |                                                      | -   |      |  |       | -      |                    
|Others                                                   |  |                                                      | -   |      |  |       | 1,344  |                    
|Subtotal                                                 |  |                                                      | 478 |      |  |       | 22,319 |                    
|Own agricultural produce consumed                        |  |                                                      | -   |      |  |       | 38,935 |                    
|Total                                                    |  |                                                      | 478 |      |  |       | 61,254 |                    



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



F- 30







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 6. | Expenses by nature (continued)
| | -- | ------------------------------



Expenses by nature for the year ended December
31, 2015:



|                                                         |  | Cost of production of manufactured products (Note 5) |    |      |  |       |        |                    
|-------------------------------------------------------- |  | ---------------------------------------------------- | -- | ---- |  | ----- | ------ | -------------------
|                                                         |  | Crops                                                |    | Rice |  | Dairy |        | All other  segments
|                                                         |  |                                                      |    |      |  |       |        |                    
|Salaries, social security expenses and employee benefits |  |                                                      | -  |      |  |       | 5,952  |                    
|Raw materials and consumables                            |  |                                                      | 56 |      |  |       | 3,760  |                    
|Depreciation and amortization                            |  |                                                      | -  |      |  |       | 1,305  |                    
|Fertilizers, agrochemicals and seeds                     |  |                                                      | -  |      |  |       | -      |                    
|Fuel, lubricants and others                              |  |                                                      | -  |      |  |       | 102    |                    
|Maintenance and repairs                                  |  |                                                      | -  |      |  |       | 1,167  |                    
|Freights                                                 |  |                                                      | 9  |      |  |       | 4,303  |                    
|Export taxes / selling taxes                             |  |                                                      | -  |      |  |       | -      |                    
|Export expenses                                          |  |                                                      | -  |      |  |       | -      |                    
|Contractors and services                                 |  |                                                      | -  |      |  |       | -      |                    
|Energy transmission                                      |  |                                                      | -  |      |  |       | -      |                    
|Energy power                                             |  |                                                      | -  |      |  |       | 622    |                    
|Professional fees                                        |  |                                                      | -  |      |  |       | 84     |                    
|Other taxes                                              |  |                                                      | -  |      |  |       | 85     |                    
|Contingencies                                            |  |                                                      | -  |      |  |       | -      |                    
|Lease expense and similar arrangements                   |  |                                                      | -  |      |  |       | 77     |                    
|Third parties raw materials                              |  |                                                      | -  |      |  |       | 9,506  |                    
|Tax recoveries                                           |  |                                                      | -  |      |  |       | -      |                    
|Others                                                   |  |                                                      | 2  |      |  |       | 691    |                    
|Subtotal                                                 |  |                                                      | 67 |      |  |       | 27,654 |                    
|Own agricultural produce consumed                        |  |                                                      | -  |      |  |       | 32,791 |                    
|Total                                                    |  |                                                      | 67 |      |  |       | 60,445 |                    



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





F- 31







Adecoagro
S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 6. | Expenses by nature (continued)
| | -- | ------------------------------



Expenses by nature for the year ended December
31, 2014:



|                                                         |  | Cost
    of production of manufactured products (Note 5) |   |      |  |       |        |                           
|-------------------------------------------------------- |  | -------------------------------------------------------- | - | ---- |  | ----- | ------ | --------------------------
|                                                         |  | Crops                                                    |   | Rice |  | Dairy |        | All
    other
    segments
|                                                         |  |                                                          |   |      |  |       |        |                           
|Salaries, social security expenses and employee benefits |  |                                                          | - |      |  |       | 5,842  |                           
|Raw materials and consumables                            |  |                                                          | - |      |  |       | -      |                           
|Depreciation and amortization                            |  |                                                          | - |      |  |       | 1,322  |                           
|Fuel, lubricants and others                              |  |                                                          | - |      |  |       | 108    |                           
|Maintenance and repairs                                  |  |                                                          | - |      |  |       | 1,383  |                           
|Freights                                                 |  |                                                          | - |      |  |       | 5,906  |                           
|Export taxes / selling taxes                             |  |                                                          | - |      |  |       | -      |                           
|Export expenses                                          |  |                                                          | - |      |  |       | -      |                           
|Contractors and services                                 |  |                                                          | - |      |  |       | -      |                           
|Energy transmission                                      |  |                                                          | - |      |  |       | -      |                           
|Veterinary expenses                                      |  |                                                          | - |      |  |       | -      |                           
|Energy power                                             |  |                                                          | - |      |  |       | 654    |                           
|Professional fees                                        |  |                                                          | - |      |  |       | 122    |                           
|Other taxes                                              |  |                                                          | - |      |  |       | -      |                           
|Contingencies                                            |  |                                                          | - |      |  |       | -      |                           
|Lease expense and similar arrangements                   |  |                                                          | - |      |  |       | 84     |                           
|Third parties raw materials                              |  |                                                          | - |      |  |       | 8,392  |                           
|Tax recoveries                                           |  |                                                          | - |      |  |       | -      |                           
|Others                                                   |  |                                                          | - |      |  |       | -      |                           
|Subtotal                                                 |  |                                                          | - |      |  |       | 23,813 |                           
|Own agricultural produce consumed                        |  |                                                          | - |      |  |       | 46,282 |                           
|Total                                                    |  |                                                          | - |      |  |       | 70,095 |                           



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



F- 32







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 7. | Salaries and social security expenses
| | -- | -------------------------------------



|                                        |  | 2016 |         | 2015 |  | 2014
|--------------------------------------- |  | ---- | ------- | ---- |  | ----
|Wages and salaries (i)                  |  |      | 117,423 |      |  |     
|Social security costs                   |  |      | 28,849  |      |  |     
|Equity-settled share-based compensation |  |      | 4,796   |      |  |     
|                                        |  |      | 151,068 |      |  |     
|Number of employees                     |  |      | 8,326   |      |  |     



| | (i) | Includes US$ 28,475, US$ 16,708 and US$ 42,354, capitalized in Property, Plant and Equipment for the years 2016, 2015 and 2014,
respectively.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------



| | 8. | Other operating income, net
| | -- | ---------------------------



|                                                             |  | 2016 |         | 2015 |  | 2014
|------------------------------------------------------------ |  | ---- | ------- | ---- |  | ----
|Gain from disposal of farmland and other assets (Note 21)    |  |      | -       |      |  |     
|(Loss) / Gain from commodity derivative financial instrument |  |      | (16,007 | )    |  |     
|Loss from onerous contracts – forwards                       |  |      | (44     | )    |  |     
|(Loss) /Gain from disposal of other property items           |  |      | (1,255  | )    |  |     
|Settlement agreement (Nota 29)                               |  |      | 8,489   |      |  |     
|Others                                                       |  |      | 520     |      |  |     
|                                                             |  |      | (8,297  | )    |  |     



| | 9. | Financial results, net
| | -- | ----------------------



|                                                                                 |  | 2016 |          | 2015 |  | 2014
|-------------------------------------------------------------------------------- |  | ---- | -------- | ---- |  | ----
|Finance income:                                                                  |  |      |          |      |  |     
|- Interest income                                                                |  |      | 7,671    |      |  |     
|- Other income                                                                   |  |      | 286      |      |  |     
|Finance income                                                                   |  |      | 7,957    |      |  |     
|                                                                                 |  |      |          |      |  |     
|Finance costs:                                                                   |  |      |          |      |  |     
|- Interest expense                                                               |  |      | (48,198  | )    |  |     
|- Cash flow hedge – transfer from equity (Note 2)                                |  |      | (85,214  | )    |  |     
|- Foreign exchange losses, net                                                   |  |      | (19,062  | )    |  |     
|- Taxes                                                                          |  |      | (2,719   | )    |  |     
|- Loss from interest rate/foreign exchange rate derivative financial instruments |  |      | (5,694   | )    |  |     
|- Other expenses                                                                 |  |      | (4,493   | )    |  |     
|Finance costs                                                                    |  |      | (165,380 | )    |  |     
|Total financial results, net                                                     |  |      | (157,423 | )    |  |     



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



F- 33







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 10. | Taxation
| | --- | --------



Adecoagro is subject
to the applicable general tax regulations in Luxembourg.



The Group’s income
tax has been calculated on the estimated assessable taxable results for the year at the rates prevailing in the respective foreign
tax jurisdictions. The subsidiaries of the Group are required to calculate their income taxes on a separate basis according to
the rules and regulations of the jurisdictions where they operate. Therefore, the Group is not legally permitted to compensate
subsidiaries’ losses against subsidiaries’ income. The details of the provision for the Group’s consolidated
income tax are as follows:



|                               |  | 2016 |         | 2015 |  | 2014
|------------------------------ |  | ---- | ------- | ---- |  | ----
|Current income tax             |  |      | (21,505 | )    |  |     
|Deferred income tax            |  |      | 12,118  |      |  |     
|Income tax (expense) / benefit |  |      | (9,387  | )    |  |     



The statutory tax rate in the countries
where the Group operates for all of the years presented are:



|Tax Jurisdiction |  | Income Tax Rate
|---------------- |  | ---------------
|Argentina        |  |                
|Brazil           |  |                
|Uruguay          |  |                



Deferred tax assets
and liabilities of the Group as of December 31, 2016 and 2015, without taking into consideration the offsetting of balances within
the same tax jurisdiction, will be recovered or settled as follows:



|                                                                      |  | 2016 |         | 2015
|--------------------------------------------------------------------- |  | ---- | ------- | ----
|Deferred income tax asset to be recovered after more than 12 months   |  |      | 96,822  |     
|Deferred income tax asset to be recovered within 12 months            |  |      | 17,504  |     
|Deferred income tax assets                                            |  |      | 114,326 |     
|                                                                      |  |      |         |     
|Deferred income tax liability to be settled after more than 12 months |  |      | (86,573 | )   
|Deferred income tax liability to be settled within 12 months          |  |      | (3,856  | )   
|Deferred income tax liability                                         |  |      | (90,429 | )   
|Deferred income tax assets, net                                       |  |      | 23,897  |     



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



|                                                     |  | 2016 |         | 2015 |  | 2014
|---------------------------------------------------- |  | ---- | ------- | ---- |  | ----
|Beginning of year                                    |  |      | 53,108  |      |  |     
|Exchange differences                                 |  |      | 10,953  |      |  |     
|Tax (charge) benefit relating to cash flow hedge (i) |  |      | (52,282 | )    |  |     
|Income tax (expense) / benefit                       |  |      | 12,118  |      |  |     
|End of year                                          |  |      | 23,897  |      |  |     



(i): Relates to the gain or loss before
income tax of cash flow hedge recognized in other comprehensive income amounting to US$ (67,683) for the year ended December 31,
2016 (2015: US$ 176,657; 2014: US$ 53,584); net of the reclassification from Equity to Income Statements of US$ (85,214) for the
year ended December 31, 2016 (2015: US$ (32,700); 2014: (12,031))



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



F- 34







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 10. | Taxation (continued)
| | --- | --------------------



The movement in the
deferred income tax assets and liabilities during the year, without taking into consideration the offsetting of balances within
the same tax jurisdiction, is as follows:



|Deferred income tax  liabilities               |  | Property,  plant and  equipment |         | Biological  assets |  | Others |        | Total
|---------------------------------------------- |  | ------------------------------- | ------- | ------------------ |  | ------ | ------ | -----
|At January 1, 2014                             |  |                                 | 77,038  |                    |  |        | 11,152 |      
|Charged/(credited) to the statement of income  |  |                                 | (6,446  | )                  |  |        | 3,469  |      
|Exchange differences                           |  |                                 | (16,367 | )                  |  |        | (2,137 | )    
|At December 31, 2014                           |  |                                 | 54,225  |                    |  |        | 12,484 |      
|(Credited)/charged to the statement of income  |  |                                 | 22,310  |                    |  |        | 8,260  |      
|Exchange differences                           |  |                                 | (20,571 | )                  |  |        | (4,781 | )    
|At December 31, 2015                           |  |                                 | 55,964  |                    |  |        | 15,963 |      
|(Credited) /charged to the statement of income |  |                                 | 3,380   |                    |  |        | (2,752 | )    
|Exchange differences                           |  |                                 | (512    | )                  |  |        | 911    |      
|At December 31, 2016                           |  |                                 | 58,832  |                    |  |        | 14,122 |      



|Deferred income tax  assets                   |  | Provisions |        | Tax loss Carry  forwards |  | Equity-settled  share-based  compensation |         | Biological Assets |  | Others |       | Total
|--------------------------------------------- |  | ---------- | ------ | ------------------------ |  | ----------------------------------------- | ------- | ----------------- |  | ------ | ----- | -----
|At January 1, 2014                            |  |            | 5,827  |                          |  |                                           | 69,620  |                   |  |        | 6,417 |      
|Charged/(credited) to the statement of income |  |            | (3,745 | )                        |  |                                           | (2,636  | )                 |  |        | (522  | )    
|Tax charge relating to cash flow hedge        |  |            | -      |                          |  |                                           | 14,149  |                   |  |        | -     |      
|Exchange differences                          |  |            | (313   | )                        |  |                                           | (12,780 | )                 |  |        | -     |      
|At December 31, 2014                          |  |            | 1,769  |                          |  |                                           | 68,353  |                   |  |        | 5,895 |      
|Charged/(credited) to the statement of income |  |            | 770    |                          |  |                                           | 24,541  |                   |  |        | (275  | )    
|Tax charge relating to cash flow hedge        |  |            | -      |                          |  |                                           | 49,106  |                   |  |        | -     |      
|Exchange differences                          |  |            | (750   | )                        |  |                                           | (34,809 | )                 |  |        |       |      
|At December 31, 2015                          |  |            | 1,789  |                          |  |                                           | 107,191 |                   |  |        | 5,620 |      
|Charged/(credited) to the statement of income |  |            | 353    |                          |  |                                           | 31,074  |                   |  |        | 20    |      
|Tax charge relating to cash flow hedge        |  |            | -      |                          |  |                                           | (52,282 | )                 |  |        | -     |      
|Exchange differences                          |  |            | 289    |                          |  |                                           | 11,135  |                   |  |        | -     |      
|At December 31, 2016                          |  |            | 2,431  |                          |  |                                           | 97,118  |                   |  |        | 5,640 |      



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



F- 35







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 10. | Taxation (continued)
| | --- | --------------------



Tax loss carry forwards
in Argentina and Uruguay generally expire within 5 years. Tax loss carry forwards in Brazil do not expire. However, in Brazil,
the taxable profit for each year can only be reduced by tax loss carry forward up to a maximum of 30 %.



In order to fully realize
the deferred tax asset, the Group will need to generate future taxable income in the countries where the tax loss carry forward
were incurred. Based upon the level of historical taxable income and projections for future taxable income over the periods in
which the deferred tax assets are deductible, management believes that as at December 31, 2016, it is probable that the Group will
realize all of the deferred tax assets in Argentina and some portion of the deferred tax assets in Brazil.



As of December 31,
2016, the Group’s tax loss carry forwards and their corresponding jurisdictions are as follows:



|Jurisdiction |  | Tax loss carry forward |         | Expiration Period
|------------ |  | ---------------------- | ------- | -----------------
|Argentina    |  |                        | 62,480  |                  
|Brazil       |  |                        | 219,840 |                  
|Uruguay      |  |                        | 1,773   |                  



Deferred income tax
assets are recognized for tax loss carry-forwards to the extent that the realization of the related tax benefit through future
taxable profits is probable. The Group did not recognize deferred income tax assets of US$ 4.0 million in respect of losses
amounting to US$ 11.8 million that can be carried forward against future taxable income.



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



|                                                                                  |  | 2016 |        | 2015 |  | 2014
|--------------------------------------------------------------------------------- |  | ---- | ------ | ---- |  | ----
|Tax calculated at the tax rates applicable to profits in the respective countries |  |      | (3,644 | )    |  |     
|Non-deductible items                                                              |  |      | (3,304 | )    |  |     
|Non-deductible items – changes in estimates on previous year                      |  |      | (1,182 | )    |  |     
|Tax losses where no deferred tax asset was recognized                             |  |      | (569   | )    |  |     
|Non-taxable income                                                                |  |      | -      |      |  |     
|Others                                                                            |  |      | (688   | )    |  |     
|Income tax (expense) / benefit                                                    |  |      | (9,387 | )    |  |     



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



F- 36





Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 11. | Earnings per share
| | --- | ------------------



(a) Basic



Basic earnings per share is calculated by
dividing the profit attributable to equity holders of the Group by the weighted average number of shares in issue during the period
excluding ordinary shares held as treasury shares (Note 22).



|                                                                          |  | 2016 |         | 2015 |  | 2014
|------------------------------------------------------------------------- |  | ---- | ------- | ---- |  | ----
|                                                                          |  |      |         |      |  |     
|Profit/(Loss) from operations attributable to equity holders of the Group |  |      | 2,039   |      |  |     
|Weighted average number of shares in issue (thousands)                    |  |      | 121,421 |      |  |     
|Basic earnings / (loss) per share from operations                         |  |      | 0.017   |      |  |     



(b) Diluted



Diluted earnings per
share is calculated by adjusting the weighted average number of shares outstanding to assume conversion of all dilutive potential
shares. The Group has two categories of dilutive potential shares: equity-settled share options and restricted units. For these
instruments, a calculation is done to determine the number of shares that could have been acquired at fair value, based on the
monetary value of the subscription rights attached to outstanding share options. The number of shares calculated as above is compared
with the number of shares that would have been issued assuming the exercise of the equity-settled share options. As of December
31, 2016, there were 1,658 thousands (2015: 1,701 thousands; 2014: 1,729 thousands) share options/restricted units outstanding
that could potentially have a dilutive impact in the future but were antidilutive for the periods presented.



|                                                                             |  | 2016 |         | 2015 |  | 2014
|---------------------------------------------------------------------------- |  | ---- | ------- | ---- |  | ----
|                                                                             |  |      |         |      |  |     
|Profit / (Loss) from operations attributable to equity holders of the Group  |  |      | 2,039   |      |  |     
|Weighted average number of shares in issue (thousands)                       |  |      | 121,421 |      |  |     
|Adjustments for:                                                             |  |      |         |      |  |     
|- Employee share options and restricted units (thousands)                    |  |      | 1,695   |      |  |     
|Weighted average number of shares for diluted earnings per share (thousands) |  |      | 123,116 |      |  |     
|Diluted earnings / (loss) per share from operations                          |  |      | 0.017   |      |  |     



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



F- 37







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 12. | Property, plant and equipment
| | --- | -----------------------------



Changes in the Group’s property, plant
and equipment in 2016 and 2015 were as follows:



|                                                  |  | Farmlands |         | Farmland  improvements |  | Buildings and   facilities |        | Machinery,   equipment,   furniture and  fittings |  | Bearer plants |         | Others |  | Work in   progress |          | Total
|------------------------------------------------- |  | --------- | ------- | ---------------------- |  | -------------------------- | ------ | ------------------------------------------------- |  | ------------- | ------- | ------ |  | ------------------ | -------- | -----
|At January1, 2015                                 |  |           |         |                        |  |                            |        |                                                   |  |               |         |        |  |                    |          |      
|Cost                                              |  |           | 174,420 |                        |  |                            | 13,855 |                                                   |  |               | 284,994 |        |  |                    | 541,400  |      
|Accumulated depreciation                          |  |           | -       |                        |  |                            | (8,454 | )                                                 |  |               | (90,223 | )      |  |                    | (263,814 | )    
|Net book amount                                   |  |           | 174,420 |                        |  |                            | 5,401  |                                                   |  |               | 194,771 |        |  |                    | 277,586  |      
|Year ended December31, 2015                       |  |           |         |                        |  |                            |        |                                                   |  |               |         |        |  |                    |          |      
|Opening net book amount                           |  |           | 174,420 |                        |  |                            | 5,401  |                                                   |  |               | 194,771 |        |  |                    | 277,586  |      
|Exchange differences                              |  |           | (56,498 | )                      |  |                            | (1,588 | )                                                 |  |               | (70,454 | )      |  |                    | (106,957 | )    
|Additions                                         |  |           | -       |                        |  |                            | 48     |                                                   |  |               | 11,666  |        |  |                    | 47,926   |      
|Reclassification to investment property (Note 13) |  |           | (580    | )                      |  |                            | -      |                                                   |  |               | -       |        |  |                    | -        |      
|Transfers                                         |  |           | 430     |                        |  |                            | 2,574  |                                                   |  |               | 43,879  |        |  |                    | 68,136   |      
|Disposals                                         |  |           | (3,245  | )                      |  |                            | -      |                                                   |  |               | (1,564  | )      |  |                    | (1,728   | )    
|Reclassification to non-income tax credits (*)    |  |           | -       |                        |  |                            | -      |                                                   |  |               | (1,048  | )      |  |                    | (740     | )    
|Depreciation (Note 6)                             |  |           | -       |                        |  |                            | (1,294 | )                                                 |  |               | (9,782  | )      |  |                    | (58,174  | )    
|Closing net book amount                           |  |           | 114,527 |                        |  |                            | 5,141  |                                                   |  |               | 167,468 |        |  |                    | 226,049  |      



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



F- 38







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 12. | Property, plant and equipment (continued)
| | --- | -----------------------------------------



|                                                  |  | Farmlands |         | Farmland  improvements |  | Buildings and  facilities |         | Machinery,  equipment,  furniture and fittings |  | Bearer plants |          | Others |  | Work in  progress |          | Total
|------------------------------------------------- |  | --------- | ------- | ---------------------- |  | ------------------------- | ------- | ---------------------------------------------- |  | ------------- | -------- | ------ |  | ----------------- | -------- | -----
|At December31, 2015                               |  |           |         |                        |  |                           |         |                                                |  |               |          |        |  |                   |          |      
|Cost                                              |  |           | 114,527 |                        |  |                           | 14,889  |                                                |  |               | 267,473  |        |  |                   | 548,037  |      
|Accumulated depreciation                          |  |           | -       |                        |  |                           | (9,748  | )                                              |  |               | (100,005 | )      |  |                   | (321,988 | )    
|Net book amount                                   |  |           | 114,527 |                        |  |                           | 5,141   |                                                |  |               | 167,468  |        |  |                   | 226,049  |      
|Year ended December31, 2016                       |  |           |         |                        |  |                           |         |                                                |  |               |          |        |  |                   |          |      
|Opening net book amount                           |  |           | 114,527 |                        |  |                           | 5,141   |                                                |  |               | 167,468  |        |  |                   | 226,049  |      
|Exchange differences                              |  |           | (6,004  | )                      |  |                           | (838    | )                                              |  |               | 26,675   |        |  |                   | 46,053   |      
|Additions                                         |  |           | -       |                        |  |                           | -       |                                                |  |               | 7,420    |        |  |                   | 36,190   |      
|Reclassification to investment property (Note 13) |  |           | 1,335   |                        |  |                           | -       |                                                |  |               | -        |        |  |                   | -        |      
|Transfers                                         |  |           | -       |                        |  |                           | 6,856   |                                                |  |               | 6,491    |        |  |                   | 6,608    |      
|Disposals                                         |  |           | -       |                        |  |                           | -       |                                                |  |               | (1,078   | )      |  |                   | (3,125   | )    
|Reclassification to non-income tax credits (*)    |  |           | -       |                        |  |                           | -       |                                                |  |               | (1,233   | )      |  |                   | (227     | )    
|Depreciation (Note 6)                             |  |           | -       |                        |  |                           | (1,519  | )                                              |  |               | (15,688  | )      |  |                   | (60,238  | )    
|Closing net book amount                           |  |           | 109,858 |                        |  |                           | 9,640   |                                                |  |               | 190,055  |        |  |                   | 251,310  |      
|At December31, 2016                               |  |           |         |                        |  |                           |         |                                                |  |               |          |        |  |                   |          |      
|Cost                                              |  |           | 109,858 |                        |  |                           | 20,907  |                                                |  |               | 305,748  |        |  |                   | 633,536  |      
|Accumulated depreciation                          |  |           | -       |                        |  |                           | (11,267 | )                                              |  |               | (115,693 | )      |  |                   | (382,226 | )    
|Net book amount                                   |  |           | 109,858 |                        |  |                           | 9,640   |                                                |  |               | 190,055  |        |  |                   | 251,310  |      



(*) Brazilian federal tax law allows entities to take a percentage
of the total cost of the assets purchased as a tax credit. As of December 31, 2016 and 2015, ICMS tax credits were reclassified
to trade and other receivables.



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



F- 39







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 12. | Property, plant and equipment (continued)
| | --- | -----------------------------------------



Depreciation is calculated
using the straight-line method to allocated their cost over the estimated usefull lives. Farmlands are not depreciated.



|Farmland improvements    | 5-25 years
|------------------------ | ----------
|Buildings and facilities | 20 years  
|Furniture and fittings   | 10 years  
|Computer equipment       | 3-5 years 
|Machinery and equipment  | 4-10 years
|Vehicles                 | 4-5 years 
|Bearer plants            | 6 years   



The assets’
residual values and useful lives are reviewed, and adjusted if appropriate, at each statement of financial position date.



Depreciation charges
are included in “Cost of production of Biological Assets”, “Cost of production of manufactures products”,
“General and administrative expenses”, “Selling expenses” and capitalized in “Property, plant and
equipment” for the years ended December 31, 2016, 2015 and 2014, respectively.



During the year ended
December 31, 2016, borrowing costs of US$ 4,654 (2015: US$ 7,684, 2014: US$ 6,864) were capitalized as components
of the cost of acquisition or construction for qualifying assets.



Certain of the Group’s
assets have been pledged as collateral to secure the Group’s borrowings and other payables. The net book value of the pledged
assets amounts to US$ 575,882 as of December 31, 2016 (2015: US$ 416,393).



| | 13. | Investment property
| | --- | -------------------



Changes in the Group’s investment
property in 2016 and 2015 were as follows:



|                                                             |  | 2016 |        | 2015
|------------------------------------------------------------ |  | ---- | ------ | ----
|Beginning of the year                                        |  |      | 4,796  |     
|Reclassification (to)/from property, plant and equipment (i) |  |      | (1,335 | )   
|Exchange difference                                          |  |      | (795   | )   
|End of the year                                              |  |      | 2,666  |     
|Cost                                                         |  |      | 2,666  |     
|Accumulated depreciation                                     |  |      | -      |     
|Net book amount                                              |  |      | 2,666  |     



(i)       Relates
to new contracts with third parties.



As of December 31,
2016, the fair value (level 3) of investment property was US$ 57 million (2015: US$ 55 million).



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



F- 40







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 14. | Intangible assets
| | --- | -----------------



Changes in the Group’s intangible
assets in 2016 and 2015 were as follows:



|                             |  | Goodwill |        | Trademarks |  | Software |        | Others |  | Total
|---------------------------- |  | -------- | ------ | ---------- |  | -------- | ------ | ------ |  | -----
|At January 1,2015            |  |          |        |            |  |          |        |        |  |      
|Cost                         |  |          | 20,172 |            |  |          | 2,498  |        |  |      
|Accumulated amortization     |  |          | -      |            |  |          | (1,539 | )      |  |      
|Net book amount              |  |          | 20,172 |            |  |          | 959    |        |  |      
|Year ended December 31, 2015 |  |          |        |            |  |          |        |        |  |      
|Opening net book amount      |  |          | 20,172 |            |  |          | 959    |        |  |      
|Exchange differences         |  |          | (6,662 | )          |  |          | (29    | )      |  |      
|Additions                    |  |          | -      |            |  |          | -      |        |  |      
|Amortization charge (i)      |  |          | -      |            |  |          | -      |        |  |      
|Closing net book amount      |  |          | 13,510 |            |  |          | 930    |        |  |      
|At December 31, 2015         |  |          |        |            |  |          |        |        |  |      
|Cost                         |  |          | 13,510 |            |  |          | 2,469  |        |  |      
|Accumulated amortization     |  |          | -      |            |  |          | (1,539 | )      |  |      
|Net book amount              |  |          | 13,510 |            |  |          | 930    |        |  |      
|Year ended December 31, 2016 |  |          |        |            |  |          |        |        |  |      
|Opening net book amount      |  |          | 13,510 |            |  |          | 930    |        |  |      
|Exchange differences         |  |          | (105   | )          |  |          | (8     | )      |  |      
|Additions                    |  |          | -      |            |  |          | -      |        |  |      
|Amortization charge (i)      |  |          | -      |            |  |          | -      |        |  |      
|Closing net book amount      |  |          | 13,405 |            |  |          | 922    |        |  |      
|At December 31, 2016         |  |          |        |            |  |          |        |        |  |      
|Cost                         |  |          | 13,405 |            |  |          | 2,461  |        |  |      
|Accumulated amortization     |  |          | -      |            |  |          | (1,539 | )      |  |      
|Net book amount              |  |          | 13,405 |            |  |          | 922    |        |  |      



| | (i) | Amortization charges are included in “General and administrative expenses” and “Selling
expenses” for the years ended December 31, 2016 and 2015, respectively. There were no impairment charges for any of the years
presented (see Note 33 (a)).
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



F- 41







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 15. | Biological assets
| | --- | -----------------



Changes in the Group’s biological
assets in 2016 and 2015 were as follows:



|                                                                       |  | 2016      
|---------------------------------------------------------------------- |  | ----------
|                                                                       |  | Crops (ii)
|Beginning of the year                                                  |  |           
|Increase due to purchases                                              |  |           
|Initial recognition and changes in fair value of biological assets (i) |  |           
|Decrease due to harvest / disposals                                    |  |           
|Costs incurred during the year                                         |  |           
|Exchange differences                                                   |  |           
|End of the year year                                                   |  |           



|                                                                       |  | 2015      
|---------------------------------------------------------------------- |  | ----------
|                                                                       |  | Crops (ii)
|Beginning of the year                                                  |  |           
|Increase due to purchases                                              |  |           
|Initial recognition and changes in fair value of biological assets (i) |  |           
|Decrease due to harvest / disposals                                    |  |           
|Costs incurred during the year                                         |  |           
|Exchange differences                                                   |  |           
|End of the year year                                                   |  |           



(i)       Biological
asset with a production cycle of more than one year (that is dairy and cattle) generated “Initial recognition and changes
in fair value of biological assets” amounting to US$ 66,168 for the year ended December 31, 2016 (2015: US$ 40,145;
2014: US$ 51,390). In 2016, an amount of US$ 56,783 (2015: US$ 44,236; 2014: US$ 105,466) was attributable to price
changes, and an amount of US$ 9,385 (2015: US$ (4,091); 2014: US$ (54,076)) was attributable to physical changes.

| | (ii) | Biological assets that are measured at fair value within level 3 of the hierarchy.
| | ---- | ----------------------------------------------------------------------------------



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



F- 42







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 15. | Biological assets (continued)
| | --- | -----------------------------



Cost of production as of December 31, 2016:



|                                                         |  | Crops |        | Rice |  | Dairy |        | All other  segments |  | Sugar,  Ethanol and  Energy |        | Total
|-------------------------------------------------------- |  | ----- | ------ | ---- |  | ----- | ------ | ------------------- |  | --------------------------- | ------ | -----
|Salaries, social security expenses and employee benefits |  |       | 3,786  |      |  |       | 5,820  |                     |  |                             | 3,849  |      
|Depreciation and amortization                            |  |       | 395    |      |  |       | -      |                     |  |                             | -      |      
|Fertilizers, agrochemicals and seeds                     |  |       | 24,774 |      |  |       | 8,047  |                     |  |                             | 80     |      
|Fuel, lubricants and others                              |  |       | 971    |      |  |       | 1,527  |                     |  |                             | 772    |      
|Maintenance and repairs                                  |  |       | 1,253  |      |  |       | 2,811  |                     |  |                             | 1,787  |      
|Freights                                                 |  |       | 1,421  |      |  |       | 479    |                     |  |                             | 127    |      
|Contractors and services                                 |  |       | 23,769 |      |  |       | 13,248 |                     |  |                             | -      |      
|Feeding expenses                                         |  |       | -      |      |  |       | -      |                     |  |                             | 9,053  |      
|Veterinary expenses                                      |  |       | -      |      |  |       | -      |                     |  |                             | 1,624  |      
|Energy power                                             |  |       | 119    |      |  |       | 853    |                     |  |                             | 492    |      
|Professional fees                                        |  |       | 131    |      |  |       | 85     |                     |  |                             | 169    |      
|Other taxes                                              |  |       | 1,561  |      |  |       | 131    |                     |  |                             | 8      |      
|Lease expense and similar arrangements                   |  |       | 6,965  |      |  |       | 97     |                     |  |                             | 8      |      
|Others                                                   |  |       | 3,462  |      |  |       | 741    |                     |  |                             | 563    |      
|Subtotal                                                 |  |       | 68,607 |      |  |       | 33,839 |                     |  |                             | 18,532 |      
|Own agricultural produce consumed                        |  |       | -      |      |  |       | -      |                     |  |                             | 5,353  |      
|Total                                                    |  |       | 68,607 |      |  |       | 33,839 |                     |  |                             | 23,885 |      



Cost of production as of December 31, 2015:



|                                                         |  | Crops |        | Rice |  | Dairy |        | All other  segments |  | Sugar,  Ethanol and  Energy |        | Total
|-------------------------------------------------------- |  | ----- | ------ | ---- |  | ----- | ------ | ------------------- |  | --------------------------- | ------ | -----
|Salaries, social security expenses and employee benefits |  |       | 4,573  |      |  |       | 7,729  |                     |  |                             | 4,765  |      
|Depreciation and amortization                            |  |       | 461    |      |  |       | 11     |                     |  |                             | -      |      
|Fertilizers, agrochemicals and seeds                     |  |       | 30,639 |      |  |       | 10,370 |                     |  |                             | -      |      
|Fuel, lubricants and others                              |  |       | 1,645  |      |  |       | 2,783  |                     |  |                             | 908    |      
|Maintenance and repairs                                  |  |       | 973    |      |  |       | 3,610  |                     |  |                             | 1,972  |      
|Freights                                                 |  |       | 616    |      |  |       | 1,063  |                     |  |                             | 125    |      
|Contractors and services                                 |  |       | 27,364 |      |  |       | 16,512 |                     |  |                             | -      |      
|Feeding expenses                                         |  |       | -      |      |  |       | -      |                     |  |                             | 9,742  |      
|Veterinary expenses                                      |  |       | -      |      |  |       | -      |                     |  |                             | 1,913  |      
|Energy power                                             |  |       | 149    |      |  |       | 608    |                     |  |                             | 423    |      
|Professional fees                                        |  |       | 155    |      |  |       | 215    |                     |  |                             | 386    |      
|Other taxes                                              |  |       | 1,534  |      |  |       | 146    |                     |  |                             | 16     |      
|Lease expense and similar arrangements                   |  |       | 10,459 |      |  |       | 358    |                     |  |                             | 2      |      
|Others                                                   |  |       | 3,157  |      |  |       | 619    |                     |  |                             | 422    |      
|Subtotal                                                 |  |       | 81,725 |      |  |       | 44,024 |                     |  |                             | 20,674 |      
|Own agricultural produce consumed                        |  |       | -      |      |  |       | -      |                     |  |                             | 4,446  |      
|Total                                                    |  |       | 81,725 |      |  |       | 44,024 |                     |  |                             | 25,120 |      



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



F- 43







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 15. | Biological assets (continued)
| | --- | -----------------------------



Biological assets in 2016 and 2015 were
as follows:



|                                |  | 2016 |         | 2015
|------------------------------- |  | ---- | ------- | ----
|Non-current                     |  |      |         |     
|Cattle for dairy production (i) |  |      | 6,584   |     
|Breeding cattle (ii)            |  |      | 1,533   |     
|Other cattle (ii)               |  |      | 399     |     
|                                |  |      | 8,516   |     
|Current                         |  |      |         |     
|Breeding cattle (iii)           |  |      | 501     |     
|Other cattle (iii)              |  |      | 243     |     
|Sown land – crops (ii)          |  |      | 28,189  |     
|Sown land – rice (ii)           |  |      | 25,575  |     
|Sown land – sugarcane (ii)      |  |      | 82,380  |     
|                                |  |      | 136,888 |     
|Total biological assets         |  |      | 145,404 |     



| | (i) | Classified as bearer and mature biological assets.
| | --- | --------------------------------------------------

| | (ii) | Classified as consumable and immature biological assets.
| | ---- | --------------------------------------------------------

| | (iii) | Classified as consumable and mature biological assets.
| | ----- | ------------------------------------------------------



The fair value less
estimated point of sale costs of agricultural produce at the point of harvest amounted to US$ 141,645 for the year ended December
31, 2016 (2015: US$ 81,108).



The following table
presents the Group ́s biological assets that are measured at fair value at December 31, 2016 and 2015 (see Note 17 to
see the description of each fair value level):



|                            |  | 2016    |       | 2015   
|--------------------------- |  | ------- | ----- | -------
|                            |  | Level 1 |       | Level 2
|                            |  |         |       |        
|Cattle for dairy production |  |         | -     |        
|Breeding cattle             |  |         | 2,034 |        
|Other cattle                |  |         | -     |        
|Sown land – sugarcane       |  |         | -     |        
|Sown land – crops           |  |         | -     |        
|Sown land – rice            |  |         | -     |        



There were no transfers between any levels
during the year.



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



F- 44









Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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







| | 15. | Biological assets (continued)
| | --- | -----------------------------



The following significant
unobservable inputs were used to measure the Group ́s biological assets using the discounted cash flow valuation technique:



|Description           |  | Unobservableinputs                                                                                                                                                                     |  | Range of unobservable inputs                                                                                                                                                                                                                                                                                                                                                                                                       |  | Relationship of unobservableinputs to fair value                                                                                                                                                                                                                                                                                                                                                                          
|--------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                      |  |                                                                                                                                                                                        |  | 2016                                                                                                                                                                                                                                                                                                                                                                                                                               |  | 2015                                                                                                                                                                                                                                                                                                                                                                                                                      
|Sown land – sugarcane |  | Sugarcane yield –
        tonnes per hectare; Sugarcane TRS (kg of sugar per ton of cane) Production Costs – US$ per hectare. (Include maintenance,
        harvest and leasing costs) |  | -Sugarcane yield: 60-100
        tn/ha
        -Sugarcane TRS: 120-140
        kg of sugar/ton of cane
        -Maintenance costs: 500-600
        US$/ha
        -Harvest costs: 9.0 -14.0
        US$/ton of cane
        -Leasing costs: 12.0-14.4
        tn/ha                                                                                                                                                                |  | -Sugarcane yield: 60-90
        tn/ha
        -Sugarcane TRS: 130-140
        kg of sugar/ton of cane
        -Maintenance costs: 440-530
        US$/ha
        -Harvest costs: 7.0 -10.0
        US$/ton of cane
        -Leasing costs: 12.0-14.4
        tn/ha                                                                                                                                                        
|Sown land – crops     |  | Crops yield – tonnes
        per hectare; Commercial Costs – usd per hectare;
        Production Costs –
        US$ per hectare.                                                      |  | - Crops yield: 2.0 –
        2.8 tn/ha for Wheat, 5.4 – 7.7  tn/ha for Corn, 2mentira.7 - 3.8 tn/ha for Soybean and 1.5-2.1 for Sunflower
        - Commercial Costs: 66-97 US$/ha for Wheat, 150-225 US$/ha for Corn, 70-110 US$/ha for Soybean and 65-90 US$/ha for Sunflower
        - Production Costs: 170-250 US$/ha for Wheat, 350-550 US$/ha for Corn, 270-400 US$/ha for Soybean and 200-300 US$/ha for
        Sunflower |  | - Crops yield: 1.8 - 2.5
        tn/ha for Wheat, 5.0 - 8.0 tn/ha for Corn, 2.0 - 3.2 tn/ha for Soybean and 1.6-2.3 for Sunflower
        - Commercial Costs: 60-95 US$/ha for Wheat, 175-265 US$/ha for Corn, 75-110 US$/ha for Soybean and 65-90 US$/ha for Sunflower
        - Production Costs: 170-250 US$/ha for Wheat, 340-500 US$/ha for Corn, 270-430 US$/ha for Soybean and 250-350 US$/ha for
        Sunflower
|Sown land – rice      |  | Rice yield – tonnes
        per hectare;
        Commercial Costs –
        usd per hectare;
        Production Costs –
        US$ per hectare.                                       |  | -Rice yield: 5.1 -6.1 tn/ha
    -Commercial Costs: 8-15 US$/ha
    -Production Costs: 750-1,000 US$/ha                                                                                                                                                                                                                                                                                                                             |  | -Rice yield: 4.4 -6.8
        tn/ha
        -Commercial Costs: 6-15 US$/ha
        -Production Costs: 705-1,150 US$/ha                                                                                                                                                                                                                                                                                                    



As of December 31,
2015, the impact of a reasonable 10 % increase (decrease) in estimated costs, with all other variables held constant, would
result in a decrease (increase) in the fair value of the Group’s plantations less cost to sell of US$ 9.1 million for
sugarcane, US$ 1.1 million for crops and US$ 2.8 million for rice.



As of December 31,
2016, the impact of a reasonable 10 % increase (decrease) in estimated costs, with all other variables held constant, would
result in a decrease (increase) in the fair value of the Group’s plantations less cost to sell of US$ 10.8 million for
sugarcane, US$ 1.0 million for crops and US$ 2.7 million for rice.



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



F- 45







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 16. | Investments in joint ventures
| | --- | -----------------------------



The table below lists
the Group’s investment in joint ventures for the years ended December 31, 2016, 2016 and 2015:



|                   |  |                              |  | % of ownership interest held |   
|------------------ |  | ---------------------------- |  | ---------------------------- | --
|Name of the entity |  | Country of
incorporation and |  | December 31, 2016            |   
|                   |  | operation                    |  |                              |   
|CHS AGRO S.A.      |  | Argentina                    |  |                              | 50



On February 26, 2013,
the Group formed CHS AGRO, a joint venture with CHS Inc. CHS Inc. is a leading farmer-owned energy, grains and foods company based
in the United States. The Group holds a 50 % interest in CHS AGRO. On October 2014, CHS AGRO finished its sunflower processing
plant in the city of Pehuajo, Province of Buenos Aires, Argentina.



|                             |  | 2016 |   | 2015
|---------------------------- |  | ---- | - | ----
|At the beginning of the year |  |      | - |     
|Share of loss                |  |      | - |     
|Exchange differences         |  |      | - |     
|At the end of the year       |  |      | - |     



The following amounts
represent the assets (including goodwill) and liabilities, and income and expenses of the joint ventures:



|                            |  | 2016 |         | 2015
|--------------------------- |  | ---- | ------- | ----
|Assets:                     |  |      |         |     
|Non-current assets          |  |      | 17,185  |     
|Current assets              |  |      | 9316    |     
|                            |  |      | 26,501  |     
|Liabilities:                |  |      |         |     
|Non-current liabilities     |  |      | 22,000  |     
|Current liabilities         |  |      | 15,273  |     
|                            |  |      | 37,273  |     
|Net assets of joint venture |  |      | (10,772 | )   



|                       |  | 2016 |         | 2015 |  | 2014
|---------------------- |  | ---- | ------- | ---- |  | ----
|Income                 |  |      | 9,390   |      |  |     
|Expenses               |  |      | (16,048 | )    |  |     
|Loss before income tax |  |      | (6,658  | )    |  |     



The shares in the
joint ventures were not publicly traded for any of the years presented.



There are no contingent
liabilities relating to the Group’s interest in the joint ventures, and no contingent liabilities of the ventures themselves.



According to the
laws of certain of the countries in which the Group operates, 5 % of the profit of the year is separated to constitute legal
reserves until they reach legal capped amounts (20 % of total capital). These legal reserves are not available for dividend
distribution and can only be released to absorb losses. The Group’s joint ventures have not reached the legal capped amounts.



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



F- 46







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 17. | Financial instruments by category
| | --- | ---------------------------------



The Group classified
its financial assets in the following categories:



(a) Financial
assets at fair value through profit or loss



Financial assets at
fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if acquired
principally for the purpose of selling in the short-term. Derivatives are also categorized as held for trading unless they are
designated as hedges. For all years presented, the Group’s financial assets at fair value through profit or loss comprise
mainly derivative financial instruments.



(b) Loans and
receivables



Loans and receivables
are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Loans and receivables
comprise “trade and other receivables” and “cash and cash equivalents” in the statement of financial position.



The following tables
show the carrying amounts of financial assets and financial liabilities by category of financial instrument and reconciliation
to the corresponding line item in the statements of financial position, as appropriate. Since the line items “Trade and other
receivables, net” and “Trade and other payables” contain both financial instruments and non-financial assets
or liabilities (such as other tax receivables or advance payments for services to be received in the future), the reconciliation
is shown in the columns headed “Non-financial assets” and “Non-financial liabilities”.



|                                              |  | Loans and receivables |         | Assets at fair value through profit or loss |  | Subtotal financial assets |       | Non- financial assets |  | Total
|--------------------------------------------- |  | --------------------- | ------- | ------------------------------------------- |  | ------------------------- | ----- | --------------------- |  | -----
|                                              |  |                       |         |                                             |  |                           |       |                       |  |      
|December 31,2016                              |  |                       |         |                                             |  |                           |       |                       |  |      
|Assets as per statement of financial position |  |                       |         |                                             |  |                           |       |                       |  |      
|Trade and other receivables                   |  |                       | 79,964  |                                             |  |                           | -     |                       |  |      
|Derivative financial instruments              |  |                       | -       |                                             |  |                           | 3,398 |                       |  |      
|Cash and cash equivalents                     |  |                       | 158,568 |                                             |  |                           | -     |                       |  |      
|Total                                         |  |                       | 238,532 |                                             |  |                           | 3,398 |                       |  |      



|                                                    |  | Liabilities at fair value through profit or loss |        | Other financial liabilities at amortized cost |  | Subtotal financial liabilities |         | Non- financial liabilities |  | Total
|--------------------------------------------------- |  | ------------------------------------------------ | ------ | --------------------------------------------- |  | ------------------------------ | ------- | -------------------------- |  | -----
|Liabilities as per statement of financial position  |  |                                                  |        |                                               |  |                                |         |                            |  |      
|Trade and other payables                            |  |                                                  | 31,424 |                                               |  |                                | 49,718  |                            |  |      
|Borrowings (excluding finance lease liabilities)(i) |  |                                                  | -      |                                               |  |                                | 635,215 |                            |  |      
|Finance leases                                      |  |                                                  | -      |                                               |  |                                | 181     |                            |  |      
|Derivative financial instruments (i)                |  |                                                  | 7,068  |                                               |  |                                | -       |                            |  |      
|Total                                               |  |                                                  | 38,492 |                                               |  |                                | 685,114 |                            |  |      



(i)    Effective July 1, 2013,the Group formally documented and designated cash flow hedging relationships to hedge the foreign exchange
rate risk of a portion of its highly probable future sales in US dollars using a portion of its borrowings denominated in US dollars,
currency forwards and foreign currency floating-to-fixed interest rate swaps (see Note 2).



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



F- 47







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 17. | Financial instruments by category (continued)
| | --- | ---------------------------------------------



|                                              |  | Loans and receivables |         | Assets at fair value through profit or loss |  | Subtotal financial assets |       | Non- financial assets |  | Total
|--------------------------------------------- |  | --------------------- | ------- | ------------------------------------------- |  | ------------------------- | ----- | --------------------- |  | -----
|                                              |  |                       |         |                                             |  |                           |       |                       |  |      
|December 31, 2015                             |  |                       |         |                                             |  |                           |       |                       |  |      
|Assets as per statement of financial position |  |                       |         |                                             |  |                           |       |                       |  |      
|Trade and other receivables                   |  |                       | 83,435  |                                             |  |                           | -     |                       |  |      
|Derivative financial instruments              |  |                       | -       |                                             |  |                           | 4,849 |                       |  |      
|Cash and cash equivalents                     |  |                       | 198,894 |                                             |  |                           | -     |                       |  |      
|Total                                         |  |                       | 282,329 |                                             |  |                           | 4,849 |                       |  |      



|                                                    |  | Liabilities at fair value through profit or loss |        | Other financial liabilities at amortized cost |  | Subtotal financial liabilities |         | Non- financial liabilities |  | Total
|--------------------------------------------------- |  | ------------------------------------------------ | ------ | --------------------------------------------- |  | ------------------------------ | ------- | -------------------------- |  | -----
|Liabilities as per statement of financial position  |  |                                                  |        |                                               |  |                                |         |                            |  |      
|Trade and other payables                            |  |                                                  | 19,734 |                                               |  |                                | 30,354  |                            |  |      
|Borrowings (excluding finance lease liabilities)(i) |  |                                                  | -      |                                               |  |                                | 723,060 |                            |  |      
|Finance leases                                      |  |                                                  | -      |                                               |  |                                | 279     |                            |  |      
|Derivative financial instruments (i)                |  |                                                  | 6,694  |                                               |  |                                | -       |                            |  |      
|Total                                               |  |                                                  | 26,428 |                                               |  |                                | 753,693 |                            |  |      



(i)    Effective July 1, 2013,the Group formally documented and designated cash flow hedging relationships to hedge the foreign exchange
rate risk of a portion of its highly probable future sales in US dollars using a portion of its borrowings denominated in US dollars,
currency forwards and foreign currency floating-to-fixed interest rate swaps (see Note 2).



Liabilities carried
at amortized cost also included liabilities under finance leases where the Group is the lessee and which therefore have to be measured
in accordance with IAS 17. The categories disclosed are determined by reference to IAS 39. Finance leases are excluded from the
scope of IFRS 7. Therefore, finance leases have been shown separately.



Because of the short
maturities of most trade accounts receivable and payable, other receivables and liabilities, and cash and cash equivalents, their
carrying amounts at the closing date do not differ significantly from their respective fair values. The fair value of long-term
borrowings is disclosed in Note 26.



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



F- 48







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 17. | Financial instruments by category (continued)
| | --- | ---------------------------------------------



Income, expense,
gains and losses on financial instruments can be assigned to the following categories:



|                                               |  | Loans and receivables |         | Assets/ liabilities at fair value through profit or loss |  | Other financial liabilities at amortized cost |         | Total
|---------------------------------------------- |  | --------------------- | ------- | -------------------------------------------------------- |  | --------------------------------------------- | ------- | -----
|                                               |  |                       |         |                                                          |  |                                               |         |      
|December 31, 2016                              |  |                       |         |                                                          |  |                                               |         |      
|Interest income (i)                            |  |                       | 7,671   |                                                          |  |                                               | -       |      
|Interest expense (i)                           |  |                       | (39,533 | )                                                        |  |                                               | -       |      
|Foreign exchange gains/ (losses) (i)           |  |                       | 4,737   |                                                          |  |                                               | (12,288 | )    
|Gain from derivative financial instruments(ii) |  |                       | -       |                                                          |  |                                               | (21,745 | )    
|Net result                                     |  |                       | (27,125 | )                                                        |  |                                               | (34,033 | )    



|                                               |  | Loans and receivables |         | Assets/ liabilities at fair value through profit or loss |  | Other financial liabilities at amortized cost |         | Total
|---------------------------------------------- |  | --------------------- | ------- | -------------------------------------------------------- |  | --------------------------------------------- | ------- | -----
|                                               |  |                       |         |                                                          |  |                                               |         |      
|December 31, 2015                              |  |                       |         |                                                          |  |                                               |         |      
|Interest income (i)                            |  |                       | 8,201   |                                                          |  |                                               | -       |      
|Interest expense (i)                           |  |                       | (42,615 | )                                                        |  |                                               | -       |      
|Foreign exchange gains/ (losses) (i)           |  |                       | 1,499   |                                                          |  |                                               | (27,526 | )    
|Gain from derivative financial instruments(ii) |  |                       | -       |                                                          |  |                                               | 17,686  |      
|Net result                                     |  |                       | (32,915 | )                                                        |  |                                               | (9,840  | )    



| | (i) | Included in “Financial Results, net” in the statement of income.
| | --- | ----------------------------------------------------------------

| | (ii) | Included in “Other operating income, net” and “Financial Results, net” in the statement of income.
| | ---- | --------------------------------------------------------------------------------------------------



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



F- 49







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 17. | Financial instruments by category (continued)
| | --- | ---------------------------------------------



Determining fair values



IFRS 13 defines fair
value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. All financial instruments recognized at fair value are allocated to one of the valuation
hierarchy levels of IFRS 13. This valuation hierarchy provides for three levels. The allocation reflects which of the fair values
derive from transactions in the market and where valuation is based on models because market transactions are lacking. The level
in the fair value hierarchy is categorized in its entirety is determined on the basis of the lowest level input that is significant
to the fair value measurement in its entirety.



As of December 31,
2016 and 2015, the financial instruments recognized at fair value on the statement of financial position comprise derivative financial
instruments.



In the case of Level
1, valuation is based on unadjusted quoted prices in active markets for identical financial assets that the Group can refer to
at the date of the statement of financial position. The financial instruments the Group has allocated to this level mainly comprise
crop futures and options traded on the stock market.



Derivatives not traded
on the stock market allocated to Level 2 are valued using models based on observable market data. The financial instruments the
Group has allocated to this level mainly comprise interest-rate swaps and foreign-currency interest-rate swaps.



In the case of Level
3, the Group uses valuation techniques not based on inputs observable in the market. This is only permissible insofar as no observable
market data are available. The Group does not have financial instruments allocated to this level for any of the years presented.



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



F- 50







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 17. | Financial instruments by category (continued)
| | --- | ---------------------------------------------



The following tables
present the Group’s financial assets and financial liabilities that are measured at fair value as of December 31, 2016 and
2015 and their allocation to the fair value hierarchy:



|                                 |  |  |      | Level 1 |  | Level 2 |        | Total
|-------------------------------- |  |  | ---- | ------- |  | ------- | ------ | -----
|                                 |  |  |      |         |  |         |        |      
|Assets                           |  |  |      |         |  |         |        |      
|Derivative financial instruments |  |  | 2016 |         |  |         | 2,789  |      
|Derivative financial instruments |  |  | 2015 |         |  |         | 4,849  |      
|                                 |  |  |      |         |  |         |        |      
|Liabilities                      |  |  |      |         |  |         |        |      
|Derivative financial instruments |  |  | 2016 |         |  |         | (1,196 | )    
|Derivative financial instruments |  |  | 2015 |         |  |         | (4,326 | )    



There were no transfers within level 1
and 2 during the years ended December 31, 2016 and 2015.



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



|Class                                    |  | Pricing Method    |  | Parameters                                                                |  | Pricing Model        |  | Level |  | Total
|---------------------------------------- |  | ----------------- |  | ------------------------------------------------------------------------- |  | -------------------- |  | ----- |  | -----
|                                         |  |                   |  |                                                                           |  |                      |  |       |  |      
|                                         |  |                   |  |                                                                           |  |                      |  |       |  |      
|Futures                                  |  | Quoted price      |  | -                                                                         |  | -                    |  | 1     |  |      
|                                         |  |                   |  |                                                                           |  |                      |  |       |  |      
|Options                                  |  | Quoted price      |  | -                                                                         |  | -                    |  | 1     |  |      
|                                         |  |                   |  |                                                                           |  |                      |  |       |  |      
|NDF                                      |  | -                 |  | -                                                                         |  | -                    |  | 2     |  |      
|                                         |  |                   |  |                                                                           |  |                      |  |       |  |      
|Foreign-currency interest-rate
    swaps |  | Theoretical price |  | Swap curve; Money market interest-rate
    curve; Foreign-exchange curve. |  | Present value method |  | 2     |  |      
|                                         |  |                   |  |                                                                           |  |                      |  |       |  |      





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



F- 51







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 18. | Trade and other receivables, net
| | --- | --------------------------------



|                                                   |  | 2016 |         | 2015
|-------------------------------------------------- |  | ---- | ------- | ----
|Non-current                                        |  |      |         |     
|Trade receivables                                  |  |      | 1,802   |     
|Trade receivables                                  |  |      | 1,802   |     
|Advances to suppliers                              |  |      | 1,930   |     
|Income tax credits                                 |  |      | 7,472   |     
|Non-income tax credits (i)                         |  |      | 1,853   |     
|Judicial deposits                                  |  |      | 3,280   |     
|Other receivables                                  |  |      | 1,075   |     
|Non-current portion                                |  |      | 17,412  |     
|Current                                            |  |      |         |     
|Trade receivables                                  |  |      | 61,546  |     
|Receivables from related parties (Note 31)         |  |      | 8,114   |     
|Less: Allowance for trade receivables              |  |      | (643    | )   
|Trade receivables – net                            |  |      | 69,017  |     
|Prepaid expenses                                   |  |      | 8,302   |     
|Advances to suppliers                              |  |      | 21,451  |     
|Income tax credits                                 |  |      | 7,116   |     
|Non-income tax credits (i)                         |  |      | 43,572  |     
|Cash collateral                                    |  |      | 3,546   |     
|Receivables from related parties (Note 31)         |  |      | 172     |     
|Receivable from disposal of subsidiaries (Note 21) |  |      | -       |     
|Other receivables                                  |  |      | 4,352   |     
|Subtotal                                           |  |      | 88,511  |     
|Current portion                                    |  |      | 157,528 |     
|Total trade and other receivables, net             |  |      | 174,940 |     



(i) Includes US$ 1,499 (2015:
6,129) reclassified from Property, plant and equipment.



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



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



F- 52







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 18. | Trade and other receivables, net (continued)
| | --- | --------------------------------------------



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



|                |  | 2016 |         | 2015
|--------------- |  | ---- | ------- | ----
|Currency        |  |      |         |     
|US Dollar       |  |      | 54,012  |     
|Argentine Peso  |  |      | 45,641  |     
|Uruguayan Peso  |  |      | 762     |     
|Brazilian Reais |  |      | 74,525  |     
|                |  |      | 174,940 |     



As of December 31,
2016 trade receivables of US$ 14,641 (2015: US$ 7,542) were past due but not impaired. The ageing analysis of these
receivables indicates that 5,264 and 549 are over 6 months in 2016 and 2015, respectively.



The Group recognizes
an allowance for trade receivables when there is objective evidence that the Group will not be able to collect all amounts due
according to the original terms of the receivables.



Delinquency in payments
is an indicator that a receivable may be impaired. However, management considers all available evidence in determining when a receivable
is impaired. Generally, trade receivables, which are more than 180 days past due are fully provided for. However, certain receivables
180+ days overdue are not provided for based on a case-by-case analysis of credit quality analysis. Furthermore, receivables, which
are not 180+ days overdue, may be provided for if specific analysis indicates a potential impairment.



Movements on the Group’s
allowance for trade receivables are as follows:



|                        |  | 2016 |      | 2015 |  | 2014
|----------------------- |  | ---- | ---- | ---- |  | ----
|At January 1            |  |      | 481  |      |  |     
|Charge of the year      |  |      | 387  |      |  |     
|Unused amounts reversed |  |      | (178 | )    |  |     
|Used during the year    |  |      | -    |      |  |     
|Exchange differences    |  |      | (47  | )    |  |     
|At December 31          |  |      | 643  |      |  |     



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



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



As of December 31,
2016, approximately 82% (2015: 73%) of the outstanding unimpaired trade receivables (neither past due not impaired) relate to sales
to 17 well-known multinational companies with good credit quality standing, including but not limited to Camara de Comercializacao
de Energia Electrica CCEE, Louis Dreyfus Commodities Suisse S.A.T, Alimport, Czarnikow Group Limited, Establecimientos Las Marias,
Mastellone Hnos.S.A., Bunge Agritrade S.A., ETG Commodities Ltd., among others. Most of these entities or their parent companies
are externally credit-rated. The Group reviews these external ratings from credit agencies.



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



F- 53







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 18. | Trade and other receivables, net (continued)
| | --- | --------------------------------------------



The remaining percentage
as of December 31, 2016 and 2015 of the outstanding unimpaired trade receivables (neither past due nor impaired) relate to sales
to a dispersed large quantity of customers for which external credit ratings may not be available. However, the total base of customers
without an external credit rating is relatively stable.



New customers with
less than six months of history with the Group are closely monitored. The Group has not experienced credit problems with these
new customers to date. The majority of the customers for which an external credit rating is not available are existing customers
with more than six months of history with the Group and with no defaults in the past. A minor percentage of customers may have
experienced some non-significant defaults in the past but fully recovered.



| | 19. | Inventories
| | --- | -----------



|                             |  | 2016 |         | 2015(*)
|---------------------------- |  | ---- | ------- | -------
|Raw materials                |  |      | 42,108  |        
|Finished goods (Note 5)      |  |      | 68,191  |        
|Stocks held by third parties |  |      | 1,308   |        
|Others                       |  |      | 147     |        
|                             |  |      | 111,754 |        



(*) The prior years have been adjusted to reflect the Company’s
adoption of amendments to IAS 16 and IAS 41 as further described in Note 32.



| | 20. | Cash and cash equivalents
| | --- | -------------------------



|                         |  | 2016 |         | 2015
|------------------------ |  | ---- | ------- | ----
|Cash at bank and on hand |  |      | 130,001 |     
|Short-term bank deposits |  |      | 28,567  |     
|                         |  |      | 158,568 |     



| | 21. | Disposals
| | --- | ---------



Year ended December
31, 2014



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



In June, 2014, the
Group completed the sale of a 49 % interest in both Global Anceo S.L.U. and Global Hisingen S.L.U., companies which main underlying
assets are the Guayacanes and La Guarida farms, for an aggregate sale price of US$ 50.5 million. The net proceeds received as of
the transaction ́s day amounted to US$ 49.3 million.



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



F- 54







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 21. | Disposals (continued)
| | --- | ---------------------



The sale of the respective
equity interests did not result in the loss of control of these companies and therefore the transactions were treated as equity
transactions for accounting purposes.The difference between the net proceeds received and the recognition of the non-controlling
interest was registered in Statement of Changes in Shareholders’ Equity under the line item “Reserve from the sale
of non-controlling interests in subsidiaries” for an amount of US$ 41.3 million (US$ 25.5 million in the column item “Reserve
from the sale of non-controlling interests in subsidiaries” and US$ 15.8 million in the column item “Cumulative Translation
Adjustment”) and also an increase in non-controlling interest of US$ 8.0 million.



Year ended December
31, 2015



Sale of La Cañada
Farm.



In November 2015, the
Group completed the sale of “La Cañada”, a 3,399 hectare farm located in the province of San Luis, Argentina,
for a total consideration of US$ 12.6 million fully collected as of year-end. This transaction resulted in a gain of US$ 7.9 million
included within “Other operating income, net”.



Sale of 49% of interest in Global Acamante S.L.U.
Global Calidon S.L.U., Global Carelio S.L.U. and Global Mirabilis S.L.U.



In December, 2015,
the Group completed the sale of a 49 % interest in Global Acamante S.L.U., Global Calidon S.L.U., Global Carelio S.L.U. and
Global Mirabilis S.L.U., companies which main underlying assets are El Orden and La Carolina farms, for an aggregate sale price
of US$ 22.0 million, which were fully collected at the time of the transaction.



The sale of the respective
equity interests did not result in the loss of control of these companies and therefore. The difference between the net proceeds
received and the recognition of the non-controlling interest was registered in Statement of Changes in Shareholders’ Equity
under the line item “Reserve from the sale of non-controlling interests in subsidiaries” for an amount of US$ 19.9
million (US$ 16.1 million in the column item “Reserve from the sale of non-controlling interests in subsidiaries”
and US$ 3.9 million in the column item “Cumulative Translation Adjustment”) and also an increase in non-controlling
interest of US$ 2.0 million.



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



F- 55







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 22. | Shareholders’ contributions
| | --- | ---------------------------



The share capital
of the Group is represented by common shares with a nominal value of US$ 1.5 per share and one vote each.



|                                               |  | Number of shares |         |  | Share capital and share premium | 
|---------------------------------------------- |  | ---------------- | ------- |  | ------------------------------- | 
|At January 1 2014                              |  |                  | 122,382 |  |                                 | 
|Employee share options exercised (Note 23) (1) |  |                  | -       |  |                                 | 
|Restricted shares and units vested (Note 23)   |  |                  | -       |  |                                 | 
|Purchase of own shares                         |  |                  | -       |  |                                 | 
|At 31 December 2014                            |  |                  | 122,382 |  |                                 | 
|Employee share options exercised (Note 23) (1) |  |                  | -       |  |                                 | 
|Restricted shares and units vested (Note 23)   |  |                  | -       |  |                                 | 
|Purchase of own shares                         |  |                  | -       |  |                                 | 
|At 31 December 2015                            |  |                  | 122,382 |  |                                 | 
|Employee share options exercised (Note 23) (1) |  |                  | -       |  |                                 | 
|Restricted shares units vested (Note 23)       |  |                  | -       |  |                                 | 
|Purchase of own shares                         |  |                  | -       |  |                                 | 
|At 31 December 2016                            |  |                  | 122,382 |  |                                 | 



| | (1) | Treasury shares were used to settle these options and units.
| | --- | ------------------------------------------------------------



Share Repurchase
Program



On September 24,
2013, the Board of Directors of the Company has authorized a share repurchase program for up to 5% of its outstanding shares. The
repurchase program has commenced on September 24, 2013 and is reviewed by the Board of Directors after each 12-month period: repurchases
of shares under the program aremade from time to time in open market transactions in compliance with the trading conditions of
Rule 10b-18 under the U.S. Securities Exchange Act of 1934, as amended, and applicable rules and regulations. The share repurchase
program does not require Adecoagro to acquire any specific number or amount of shares and may be modified, suspended, reinstated
or terminated at any time in the Company’s discretion and without prior notice. The size and the timing of repurchases will
depend upon market conditions, applicable legal requirements and other factors. On August 12, 2014 the Board of Directors decided
to extend the program for a 12 month-period. Also, on August 15, 2015 the Board of directors decided to extend the program for
another 12 months period.



As of December 31,
2016, the Company repurchased 2,840,825 shares under this program, of which 1,605,497 have been applied to some exercise of the
Company’s stock option plan and restricted stock units plan.



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





F- 56







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 23. | Equity-settled share-based payments
| | --- | -----------------------------------



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



| | (a) | Option Schemes
| | --- | --------------



The fair value of the
options under the Option Schemes was measured at the date of grant using the Black-Scholes valuation technique.



As of the date of these
financial statements all options has already been vested and expensed. The Group recognized aggregate compensation expense of US$
nil for the year ended December 31, 2016 (2015: US$ nil; 2014: US$ 0.3 million) related to the options granted under the Option
Schemes.



The Adecoagro/ IFH
2004 Stock Incentive Option Plan was effectively established in 2004 and is administered by the Compensation Committee of the
Company. Options are exercisable over a ten-year period. In May 2014 this period was extended for another ten year-period.



Movements in the number
of equity-settled options outstanding and their related weighted average exercise prices under the Adecoagro/ IFH 2004 Stock Incentive
Option Plan are as follows:

|               |  | 2016                             |      | 2015                |  | 2014                             
|-------------- |  | -------------------------------- | ---- | ------------------- |  | ---------------------------------
|               |  | Average exercise price per share |      | Options (thousands) |  | Average exercise price per  Share
|               |  |                                  |      |                     |  |                                  
|At January 1   |  |                                  | 6.67 |                     |  |                                  
|Forfeited      |  |                                  | -    |                     |  |                                  
|Exercised      |  |                                  | 6.96 |                     |  |                                  
|At December 31 |  |                                  | 6.66 |                     |  |                                  



Options outstanding
at year end under this Plan have the following expiry date and exercise prices:



|                  |  | Exercise  price per |      | Shares (in thousands)
|----------------- |  | ------------------- | ---- | ---------------------
|Expiry date (i):  |  | share               |      | 2016                 
|May 1, 2024       |  |                     | 5.83 |                      
|May 1, 2025       |  |                     | 5.83 |                      
|May 1, 2026       |  |                     | 5.83 |                      
|February 16, 2026 |  |                     | 7.11 |                      
|October 1, 2026   |  |                     | 8.62 |                      



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



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



F- 57







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 23. | Equity-settled unit-based payments (continued)
| | --- | ----------------------------------------------



The Adecoagro/ IFH
2007/ 2008 Equity Incentive Plan was effectively established in late 2007 and is administered by the Compensation Committee
of the Company. Options are exercisable over a ten-year period.



Movements in the number
of equity-settled options outstanding and their related weighted average exercise prices under the Adecoagro/ IFH 2007/2008 Equity
Incentive Plan are as follows:



|               |  | 2016                             |       | 2015                |  | 2014                             
|-------------- |  | -------------------------------- | ----- | ------------------- |  | ---------------------------------
|               |  | Average exercise price per share |       | Options (thousands) |  | Average exercise price per  share
|               |  |                                  |       |                     |  |                                  
|At January 1   |  |                                  | 13.07 |                     |  |                                  
|Forfeited      |  |                                  | 12.98 |                     |  |                                  
|At December 31 |  |                                  | 13.07 |                     |  |                                  



Options outstanding
at year-end under the Adecoagro/ IFH 2007/2008 Equity Incentive Plan have the following expiry date and exercise prices:



|                                  |  | Exercise  |       |                       |  |      |     |     
|--------------------------------- |  | --------- | ----- | --------------------- |  | ---- | --- | ----
|                                  |  | price per |       | Shares (in thousands)
|Expiry date:                      |  | share     |       | 2016                  |  | 2015 |     | 2014
|From Nov 13, 2017 to Aug 25, 2018 |  |           | 12.82 |                       |  |      | 908 |     
|Jan 30, 2019                      |  |           | 13.40 |                       |  |      | 595 |     
|Jun 1, 2019                       |  |           | 12.82 |                       |  |      | 3   |     
|Nov 1, 2019                       |  |           | 13.40 |                       |  |      | 11  |     
|From Jan 30, 2020 to Sep 1, 2020  |  |           | 13.40 |                       |  |      | 110 |     
|From Jan 30, 2020 to Sep 1, 2020  |  |           | 12.82 |                       |  |      | 31  |     
|                                  |  |           |       |                       |  |      |     |     



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



|     |  | Exercisable shares  in thousands
|---- |  | --------------------------------
|2016 |  |                                 
|2015 |  |                                 
|2014 |  |                                 



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



F- 58







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 23. | Equity-settled unit-based payments (continued)
| | --- | ----------------------------------------------



| | (b) | Restricted Share and Restricted Stock Unit Plan
| | --- | -----------------------------------------------



The Restricted Share
and Restricted Stock Unit Plan was effectively established in 2010 and amended in November 2011. It is administered by the Compensation
Committee of the Company. Restricted shares or units under these Plan vest over a 3-year period from the date of grant at 33 %
on each anniversary of the grant date. Participants are entitled to receive one common share of the Company for each restricted
share or restricted unit granted. There are no performance requirements for the delivery of common shares, except that a participant’s
employment with the Group must not have been terminated prior to the relevant vesting date. If the participant ceases to be an
employee for any reason, any unvested restricted unit shall not be converted into common shares. The maximum number of ordinary
shares with respect to which awards may be made under the Plan is 2,474,701. The maximum numbers of ordinary shares is revised
annually.



At December 31, 2016,
the Group recognized compensation expense US$ 4.3 million related to the restricted stock units granted under the Restricted
Share Plan (2015: US$ 4.4 million).



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



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



|Grant Date                                       |  | Apr 1, 
    2014 |      | May 15,
     2014 |  | Apr 1,
    2015 |      | May 15,
    2015 |  | Apr 1,
    2016 |      | May 15,
    2016
|------------------------------------------------ |  | ---------------- | ---- | ----------------- |  | --------------- | ---- | ---------------- |  | --------------- | ---- | ----------------
|                                                 |  |                  |      |                   |  |                 |      |                  |  |                 |      |                 
|Fair value                                       |  |                  | 7.92 |                   |  |                 | 8.72 |                  |  |                 | 9.45 |                 
|Possibility of ceasing employment before vesting |  |                  | 5    | %                 |  |                 | 0    | %                |  |                 | 5    | %               



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



|               |  | Restricted
    stock units (thousands) |       | Restricted
    stock units (thousands) |  | Restricted
    shares (thousands) |       | Restricted
    stock units (thousands)
|-------------- |  | -------------------------------------- | ----- | -------------------------------------- |  | --------------------------------- | ----- | --------------------------------------
|               |  | 2016                                   |       | 2015                                   |  | 2014                              |       | 2014                                  
|At January 1   |  |                                        | 1,018 |                                        |  |                                   | 861   |                                       
|Granted (1)    |  |                                        | 464   |                                        |  |                                   | 626   |                                       
|Forfeited      |  |                                        | (29   | )                                      |  |                                   | (37   | )                                     
|Vested         |  |                                        | (453  | )                                      |  |                                   | (432  | )                                     
|At December 31 |  |                                        | 1,000 |                                        |  |                                   | 1,018 |                                       



(1) Approved by the
Board of Directors of March 15, 2016 and the Shareholders Meeting of April 20, 2016



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



F- 59







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 24. | Legal and other reserves
| | --- | ------------------------



According to the laws
of certain of the countries in which the Group operates, a portion of the profit of the year (5%) is separated to constitute legal
reserves until they reach legal capped amounts. These legal reserves are not available for dividend distribution and can only be
released to absorb losses. The legal limit of these reserves has not been met.



Legal and other reserves
amount to US$ 45,080 as of December 31, 2016 (2015: US$ 44,540) and are included within the balance of retained earnings in the
statement of changes in shareholders’ equity.



The Company may make
distributions in the form of dividends or otherwise to the extent that it has distributable retained earnings or
available distributable reserves (including share premium) that result from the Stand Alone Financial Statements prepared
in accordance with Luxembourg GAAP. No distributable retained earning result from the Stand Alone Financial Statements of the Company
as of December 31, 2015, but the Company has distributable reserves in excess of US$ 920,171.



| | 25. | Trade and other payables
| | --- | ------------------------



|                                                              |  | 2016 |        | 2015
|------------------------------------------------------------- |  | ---- | ------ | ----
|Non-current                                                   |  |      |        |     
|Payable from acquisition of property, plant and equipment (i) |  |      | 1,042  |     
|Other payables                                                |  |      | 385    |     
|                                                              |  |      | 1,427  |     
|Current                                                       |  |      |        |     
|Trade payables                                                |  |      | 77,325 |     
|Advances from customers                                       |  |      | 7,758  |     
|Amounts due to related parties (Note 31)                      |  |      | 1,152  |     
|Taxes payable                                                 |  |      | 4,685  |     
|Other payables                                                |  |      | 1,238  |     
|                                                              |  |      | 92,158 |     
|Total trade and other payables                                |  |      | 93,585 |     



| | (i) | These trades payable are mainly collateralized by property, plant and equipment of the Group.
| | --- | ---------------------------------------------------------------------------------------------



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



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



F- 60







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 26. | Borrowings
| | --- | ----------



|                                 |  | 2016 |         | 2015
|-------------------------------- |  | ---- | ------- | ----
|Non-current                      |  |      |         |     
|Bank borrowings                  |  |      | 430,202 |     
|Obligations under finance leases |  |      | 102     |     
|                                 |  |      | 430,304 |     
|Current                          |  |      |         |     
|Bank overdrafts                  |  |      | 90      |     
|Bank borrowings                  |  |      | 204,923 |     
|Obligations under finance leases |  |      | 79      |     
|                                 |  |      | 205,092 |     
|Total borrowings                 |  |      | 635,396 |     



As of December 31,
2016, total bank borrowings include collateralized liabilities of US$ 525,663 (2015: US$ 669,109). These loans are mainly
collateralized by property, plant and equipment, sugarcane plantations, sugar export contracts and shares of certain subsidiaries
of the Group.



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



|                      |  | 2016 |         | 2015
|--------------------- |  | ---- | ------- | ----
|Fixed rate:           |  |      |         |     
|Less than 1 year      |  |      | 67,682  |     
|Between 1 and 2 years |  |      | 43,630  |     
|Between 2 and 3 years |  |      | 40,047  |     
|Between 3 and 4 years |  |      | 21,857  |     
|Between 4 and 5 years |  |      | 21,116  |     
|More than 5 years     |  |      | 20,239  |     
|                      |  |      | 214,571 |     
|Variable rate:        |  |      |         |     
|Less than 1 year      |  |      | 137,331 |     
|Between 1 and 2 years |  |      | 150,517 |     
|Between 2 and 3 years |  |      | 81,947  |     
|Between 3 and 4 years |  |      | 18,457  |     
|Between 4 and 5 years |  |      | 18,309  |     
|More than 5 years     |  |      | 14,083  |     
|                      |  |      | 420,644 |     
|                      |  |      | 635,215 |     



Borrowings incurred
by the Group’s subsidiaries in Brazil are repayable at various dates between January 2017 and April 2024 and bear either
fixed interest rates ranging from 2.5 % to 9.0 % per annum or variable rates based on LIBOR or other specific base-rates
plus spreads ranging from 4.13 % to 17.52 % per annum. At December 31, 2016 LIBOR (six months) was 1.32 % (2015:
0.85 %).



Borrowings incurred
by the Group ́s subsidiaries in Argentina are repayable at various dates between January 2017 and September 2023 and bear
either fixed interest rates ranging from 6.11 % and 7.00 % per annum for those borrowings denominated in US dollar, and
a fixed interest rate ranging from 9.90 % and 28.75 % per annum for those borrowings denominated in argentine pesos.



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



F- 61







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 26. | Borrowings (continued)
| | --- | ----------------------



Brazilian Subsidiaries



The main loans of the Group’s
Brazilian Subsidiaries are:

|Bank                                                                         | Grant
    Date       | Nominalamount                    | Capital
    outstanding as of December 31 | Maturity
    date | Annual
    Interest Rate
|---------------------------------------------------------------------------- | -------------------- | -------------------------------- | ----------------------------------------- | ----------------- | ------------------------
|2016                                                                         | 2015                
|(In
    millions)                                                            | Millions
    ofReais | Millions
    ofequivalentDollars | Millions
    ofequivalentDollars         
|Banco
    Do Brasil (1)                                                      | October
    2012     | R$                               | 130.0                                     | R$                | 109.9                   
|Itau
    BBA FINAME Loan (2)                                                 | December
    2012    | R$                               | 45.9                                      | R$                | 30.4                    
|Itau
    BBA (3)                                                             | March
    2013       | R$                               | 75.0                                      | R$                | 18.8                    
|Banco
    do Brasil / Itaú BBVA Finem Loan (4)                               | September
    2013   | R$                               | 273.0                                     | R$                | 219.4                   
|BNDES
    Finem Loan (5)                                                     | November
    2013    | R$                               | 215.0                                     | R$                | 163.9                   
|ING
    / Rabobank / ABN / HSBC / Credit Agricole / Caixa Geral / Galena (6) | January
    2015     | US$                              | 160.0                                     |                   | -                       
|ING
    / Rabobank / Bladex / Credit Agricole / Votorantim / ABN (7)         | August
    2015      | US$                              | 110.0                                     |                   | -                       
|Rabobank
    (8)                                                             | February
    2016    | US$                              | 40.0                                      |                   | -                       
|Tokyo-Mitsubishi
    (9)                                                     | August
    2016      | US$                              | 30.0                                      |                   | -                       
|Bradesco
    (10)                                                            | July
    2016        | R$                               | 90.0                                      | R$                | 90.0                    
|Votorantim
    (11)                                                          | July
    2016        | US$                              | 15.0                                      |                   | -                       



| | (1) | Collateralized by (i) a first degree mortgage of the Carmen (Santa Agua) farm; (ii) a first degree
mortgage of the Sapálio farm; (iii) a first degree mortgage of the Takuare farm; and (iv) liens over the Ivinhema mill and
equipment.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Collateralized by (i) a first degree mortgage of the Carmen (Santa Agua) farm; (ii) a first degree
mortgage of the Sapálio farm; (iii) a first degree mortgage of the Takuare farm; and (iv) liens over the Ivinhema mill and
equipment.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | Collateralized by power sales contract.
| | --- | ---------------------------------------

| | (4) | Collateralized by (i) a first degree mortgage of the Carmen (Santa Agua) farm; (ii) a first degree
mortgage of the Sapálio farm; (iii) a first degree mortgage of the Takuare farm; (iv) liens over the Ivinhema mill and equipment;
and (v) power sales contract.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (5) | Collateralized by (i) liens over the Ivinhema mill and equipment; and (ii) power sales contracts.
| | --- | -------------------------------------------------------------------------------------------------

| | (6) | Collateralized by (i) a first-degree mortgage of the Conquista, Alto Alegre, Dom Fabrício,
Nossa Senhora Aparecida, Água Branca, Ouro Verde and Bela Manhã farms, (ii) pledge of sugarcane, and (iii) sales
contracts.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (7) | Collateralized by (i) a first-degree mortgage of the Rio de Janeiro farm, and (ii) sales contracts.
| | --- | ---------------------------------------------------------------------------------------------------

| | (8) | Collateralized by sales contracts.
| | --- | ----------------------------------

| | (9) | Collateralized by sales contracts.
| | --- | ----------------------------------

| | (10) | Collateralized by pledge of ethanol.
| | ---- | ------------------------------------

| | (11) | Collateralized by (i) power sales contract and (ii) sales contracts.
| | ---- | --------------------------------------------------------------------



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



F- 62







Adecoagro
S.A.

Notes to the Consolidated Financial Statements
(Continued)

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





| | 26. | Borrowings (continued)
| | --- | ----------------------



The abovementioned
loans contain certain customary financial covenants and restrictions which require us to meet pre-defined financial ratios, among
other restrictions, as well as restrictions on the payment of dividends. These financial ratios are measured considering the statutory
financial statements of the Brazilian Subsidiaries.



During 2016 and 2015 the Group was in
compliance with all financial covenants.



Argentinian Subsidiaries



The main loans of the Group’s
Argentinian Subsidiaries are:



|Bank                  | Grant
    Date | Nominalamount     | Capital
    outstanding as ofDecember 31 | Maturity
    date       | Annual
    Interest Rate
|--------------------- | -------------- | ----------------- | ---------------------------------------- | ----------------------- | ------------------------
|2016                  | 2015          
|(In millions)         | (In millions)  | (In
    millions)
|IDB
    Tranche A (1) | Feb-09         | US$
          20  | US$    
    6.15                         | US            $
    8.7 | Nov-18                  
|IFC
    Tranche A (2) | Dic-16         | US$
          25  | US$
      25.00                          | -                       | Sep-21                  
|IFC
    Tranche B (2) | Dic-16         | US$
          25  | US$  
    25.00                          | -                       | Sep-23                  



(1): Collateralized
by property, plant and equipment with a net book value of US$ 24.77 million, by a mortgage over (i) Carmen and La Rosa farms which
are property of Adeco Agropecuaria S.A. and (ii) El Meridiano farm which is the property of Pilagá S.A.



(2): Collateralized
by a US$ 75 million mortgage over Carmen farm, which is property of Adeco Agropecuaria S.A.



The Group entered
into a floating to fix interest rate forward swap, fixing LIBOR at 1.25%, effective May 2012.



The abovementioned
loans contain certain customary financial covenants and restrictions which require us to meet pre-defined financial ratios, among
other restrictions, as well as restrictions on the payment of dividends. These financial ratios are measured considering the statutory
financial statements of the Argentinian Subsidiaries.



During 2016 and 2015 the Group was in compliance with
all financial covenants.



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



|                |  | 2016 |         | 2015
|--------------- |  | ---- | ------- | ----
|Currency        |  |      |         |     
|US Dollar       |  |      | 437,307 |     
|Brazilian Reais |  |      | 196,903 |     
|Argentine Peso  |  |      | 1,186   |     
|                |  |      | 635,396 |     



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



F- 63









Adecoagro
S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 27. | Payroll and social security liabilities
| | --- | ---------------------------------------



|                                              |  | 2016 |        | 2015
|--------------------------------------------- |  | ---- | ------ | ----
|Non-current                                   |  |      |        |     
|Social security payable                       |  |      | 1,235  |     
|                                              |  |      | 1,235  |     
|Current                                       |  |      |        |     
|Salaries payable                              |  |      | 7,351  |     
|Social security payable                       |  |      | 3,063  |     
|Provision for vacations                       |  |      | 12,109 |     
|Provision for bonuses                         |  |      | 4,321  |     
|                                              |  |      | 26,844 |     
|Total payroll and social security liabilities |  |      | 28,079 |     



| | 28. | Provisions for other liabilities
| | --- | --------------------------------



The Group is subject
to several laws, regulations and business practices of the countries where it operates. In the ordinary course of business, the
Group is subject to certain contingent liabilities with respect to existing or potential claims, lawsuits and other proceedings,
including those involving tax, labor and social security, administrative and civil and other matters. The Group accrues liabilities
when it is probable that future costs will be incurred and it can reasonably estimate them. The Group bases its accruals on up-to-date
developments, estimates of the outcomes of the matters and legal counsel experience in contesting, litigating and settling matters.
As the scope of the liabilities becomes better defined or more information is available, the Group may be required to change its
estimates of future costs, which could have a material effect on its results of operations and financial condition or liquidity.



The table below shows
the movements in the Group's provisions for other liabilities categorized by type of provision:



|                     |  | Labor, legal and other claims |        | Onerous contracts |  | Total
|-------------------- |  | ----------------------------- | ------ | ----------------- |  | -----
|At January 1, 2015   |  |                               | 2,729  |                   |  |      
|Additions            |  |                               | 1,483  |                   |  |      
|Used during year     |  |                               | (921   | )                 |  |      
|Exchange differences |  |                               | (998   | )                 |  |      
|At December 31, 2015 |  |                               | 2,293  |                   |  |      
|Additions            |  |                               | 3,447  |                   |  |      
|Used during year     |  |                               | (2,174 | )                 |  |      
|Exchange differences |  |                               | 291    |                   |  |      
|At December 31, 2016 |  |                               | 3,857  |                   |  |      



Analysis of total provisions:



|            |  | 2016 |       | 2015
|----------- |  | ---- | ----- | ----
|Non current |  |      | 3,299 |     
|Current     |  |      | 590   |     
|            |  |      | 3,889 |     



The Group is engaged
in several legal proceedings, including tax, labor, civil, administrative and other proceedings in Brazil, which qualified as contingent
liabilities for an aggregate claimed nominal amount of US$ 18.2 million and US$ 30.1 million as of December 31, 2016
and 2015, respectively.



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



F- 64







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 29. | Disclosure of leases and similar arrangements
| | --- | ---------------------------------------------



The Group as
lessee



Operating leases:



The Group leases land
for crop cultivation in Argentina. The leases have an average term of a crop year and are renewable at the option of the lessee
for additional periods. Under the lease agreements, rent accrues generally at the time of harvest. Rent is payable at several times
during the crop year. Lease expense was US$ 6.8 million for the year ended December 31, 2016 (2015: US$ 10.8 million;
2014: US$ 12.8 million). Lease expense is capitalized as part of biological assets.



The Group also leases
various offices and machinery under cancellable operating lease agreements which involve no significant amount.



The future aggregate
minimum lease payments under cancellable operating leases are as follows:



|                                            |  | 2016 |       | 2015
|------------------------------------------- |  | ---- | ----- | ----
|No later than 1 year                        |  |      | 5,311 |     
|Later than 1 year and no later than 5 years |  |      | 2,294 |     
|                                            |  |      | 7,605 |     



Agriculture “partnerships”(parceriaby its exact term in Portuguese):



The Group enters
into contracts with landowners to cultivate sugarcane on their land. These contracts have an average term of 5 years.



Under these contracts,
the Group makes payments based on the market value of sugarcane per hectare (in tons) used by the Group in each harvest, with the
market value based on the price of sugarcane published by CONSECANA and a fixed amount of total recoverable sugar per ton. Lease
expense was US$ 64.9 million for the year ended December 31, 2016 (2015: US$ 53.41 million; 2014: US$ 65.0 million).
Lease expense is included in “Initial recognition and changes in fair value of biological assets and agricultural produce”
in the statement of income.



Finance leases:



Most of the leased
assets carried in the consolidated statement of financial position as part of a finance lease relate to long-term rental and lease
agreements for vehicles, machinery and equipment. Obligations under finance leasing totals US$ 181 and US$ 279 as of
December 31, 2016 and 2015, respectively.



The Group as lessor



Operating leases:



The Group acts as
a lessor in connection with an operating lease related to leased farmland, classified as investment property. The lease payments
received are recognized in profit or loss. The lease has a term of ten years.



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



|              |  | 2016 |     | 2015 |  | 2014
|------------- |  | ---- | --- | ---- |  | ----
|Rental income |  |      | 954 |      |  |     



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



F- 65







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 29. | Disclosure of leases and similar arrangements (continued)
| | --- | ---------------------------------------------------------



The future minimum
rental payments receivable under cancellable leases are as follows:



|                                            |  | 2016 |       | 2015
|------------------------------------------- |  | ---- | ----- | ----
|No later than 1 year                        |  |      | 494   |     
|Later than 1 year and no later than 5 years |  |      | 988   |     
|                                            |  |      | 1,482 |     



On September 2013,
Marfrig Argentina S.A. (“Marfrig Argentina”), the argentine subsidiary of the Brazilian company Marfrig Alimentos S.A.
(“Marfrig Alimentos"), unilaterally early terminated the lease agreements for grazing land entered into with the Group
on December 2009. The termination of the lease agreements was effective in the fourth quarter of 2013, and on April 2014, the Group
filed an arbitration proceeding against Marfrig Argentina and Marfrig Alimentos claiming unpaid invoices for US$ 0.5 million
and indemnification for early termination. On September 2016, the Parties settled the arbitration proceedings in the amount of
US$ 9 million. As of December 31 2016 the group collected US$ 7 million and as of the date of this financial statements
the group has collected the full amount.



This settlement, net
of the unpaid invoices and other expenses resulted in an income of US$ 8.5 million reflected in the line item Other operating
income.



Finance leases:



The Group does not act as a lessor in
connection with finance leases.



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



F- 66







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 30. | Group companies
| | --- | ---------------



The following table details the subsidiaries
that comprised the Group as of December 31, 2016 and 2015:



|                                                |  |            |  |                                        |  | 2016                                   |       | 2015                                  
|----------------------------------------------- |  | ---------- |  | -------------------------------------- |  | -------------------------------------- | ----- | --------------------------------------
|                                                |  | Activities |  | Country of incorporation and operation |  | Ownership percentage held if not 100 % |       | Ownership percentage held if not 100 %
|Details of principal subsidiary undertakings:   |  |            |  |                                        |  |                                        |       |                                       
|Operating companies (unless otherwise stated):  |  |            |  |                                        |  |                                        |       |                                       
|Adeco Agropecuaria S.A.                         |  | (a)        |  | Argentina                              |  |                                        | -     |                                       
|Pilagá S.A.                                     |  | (a)        |  | Argentina                              |  |                                        | 99.84 | %                                     
|Cavok S.A.                                      |  | (a)        |  | Argentina                              |  |                                        | 51    | %                                     
|Establecimientos El Orden S.A.                  |  | (a)        |  | Argentina                              |  |                                        | 51    | %                                     
|Bañado del Salado S.A.                          |  | (a)        |  | Argentina                              |  |                                        | -     |                                       
|Agro Invest S.A.                                |  | (a)        |  | Argentina                              |  |                                        | 51    | %                                     
|Forsalta S.A.                                   |  | (a)        |  | Argentina                              |  |                                        | 51    | %                                     
|Dinaluca S.A.                                   |  | (a)        |  | Argentina                              |  |                                        | -     |                                       
|Simoneta S.A.                                   |  | (a)        |  | Argentina                              |  |                                        | -     |                                       
|Compañía Agroforestal S.M.S.A.                  |  | (a)        |  | Argentina                              |  |                                        | -     |                                       
|Energía Agro S.A.U.                             |  | (a)        |  | Argentina                              |  |                                        | -     |                                       
|Adeco Agropecuaria Brasil Ltda.                 |  | (b)        |  | Brazil                                 |  |                                        | -     |                                       
|Adecoagro Vale do Ivinhema Ltda.                |  | (b)        |  | Brazil                                 |  |                                        | -     |                                       
|Adecoagro Commodities Ltda.                     |  | (b)        |  | Brazil                                 |  |                                        | -     |                                       
|Usina Monte Alegre Ltda.                        |  | (b)        |  | Brazil                                 |  |                                        | -     |                                       
|Kelizer S.A.                                    |  | (a)        |  | Uruguay                                |  |                                        | -     |                                       
|Agroglobal S.A. (f.k.a. Adecoagro Uruguay S.A.) |  | (a)        |  | Uruguay                                |  |                                        | -     |                                       
|Holdings companies:                             |  |            |  |                                        |  |                                        |       |                                       
|Adeco Brasil Participações S.A.                 |  | -          |  | Brazil                                 |  |                                        | -     |                                       
|International Farmland Holdings LP              |  | (d)        |  | United States                          |  |                                        | -     |                                       
|Adecoagro LP S.C.S.                             |  | (e)        |  | Luxembourg                             |  |                                        | -     |                                       
|Adecoagro GP S.a.r.l.                           |  | -          |  | Luxembourg                             |  |                                        | -     |                                       
|Ladelux S.C.A.                                  |  | -          |  | Uruguay                                |  |                                        | -     |                                       
|Spain Holding Companies                         |  | (c)        |  | Spain                                  |  |                                        | -     |                                       



(a) Mainly crops, rice, cattle
and others.



(b) Mainly sugarcane, ethanol and energy.



(c) Comprised by (1) wholly owned subsidiaries: Kadesh España
S.L.U.; Leterton España S.L.U.; Global Asterion S.L.U.; Global Acasto S.L.U.; Global Laertes S.L.U.; Global Seward S.L.U.;
Global Pindaro S.L.U.; Global Pileo S.L.U.; Peak Texas S.L.U.; Peak City S.L.U. and 51% controlled subsidiaries (see note 21):
Global Acamante S.L.U.; Global Carelio S.L.U.; Global Calidon S.L.U.; Global Mirabilis S.L.U. Global Anceo S.L.U.Global Hisingen
S.L.U.



(d) Merge without liquidation with Adecoagro L.P. in April 2015.



(e) The continuer from the merger between Adecoagro LP and International
Farmland Holdings LP.



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



F- 67







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 30. | Group companies (continued)
| | --- | ---------------------------



The percentage voting
right for each principal subsidiary is the same as the percentage of capital stock held. Issued share capital represents only ordinary
shares/ quotas, units or their equivalent. There are no preference shares or units issued in any subsidiary undertaking.



According to the
laws of certain of the countries in which the Group operates, 5 % of the profit of the year is separated to constitute legal
reserves until they reach legal capped amounts (20 % of total capital). These legal reserves are not available for dividend
distribution and can only be released to absorb losses. The Group’s joint ventures have not reached the legal capped amounts.



| | 31. | Related-party transactions
| | --- | --------------------------



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







|Related
    party                                                              |  | Relationship  |      | Description of
    transaction                |      | Income (loss)
    included in thestatement of income |        | Balance receivable(payable)/(equity)
|------------------------------------------------------------------------------ |  | ------------- | ---- | --------------------------------------------- | ---- | ---------------------------------------------------- | ------ | ------------------------------------
|                                                                               |  |               | 2016 |                                               | 2015 |                                                      | 2014   |                                     
|                                                                               |  |               |      |                                               |      |                                                      |        |                                     
|Mario Jorge de Lemos Vieira/
    Cia                                           |  | (i)           |      | Cost of goods sold and services rendered (ii) |      |                                                      | (42    | )                                   
|Agropecuaria Monte Alegre/ Alfenas                                             |  |               |      | Receivables from related parties (Note 18)    |      |                                                      | -      |                                     
|Agricola Ltda/ Marcelo Weyland Barbosa
    Vieira/ Paulo Albert Weyland Vieira |  |               |      | Payables (Note 25)                            |      |                                                      | -      |                                     
|Directors and senior management                                                |  | Employment    |      | Compensation selected employess               |      |                                                      | (5,213 | )                                   
|                                                                               |  |               |      |                                               |      |                                                      |        |                                     
|CHS Agro                                                                       |  | Joint venture |      | Purchases of goods                            |      |                                                      | -      |                                     
|                                                                               |  |               |      | Receivables from related parties (Note 18)    |      |                                                      | -      |                                     
|                                                                               |  |               |      | Payables from related parties (Note 25)       |      |                                                      | -      |                                     
|                                                                               |  |               |      | Sales of goods                                |      |                                                      | 372    |                                     
|                                                                               |  |               |      | Services                                      |      |                                                      | 87     |                                     
|                                                                               |  |               |      | Interest income                               |      |                                                      | 326    |                                     





| | (i) | Shareholders of the Company.
| | --- | ----------------------------

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



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



F- 68







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 32. | Summary of significant accounting policies
| | --- | ------------------------------------------



The principal accounting
policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently
applied to all the years presented, unless otherwise stated.



| | 32.1 | Basis of preparation and presentation
| | ---- | -------------------------------------



The consolidated financial
statements of the Group have been prepared in accordance with International Financial Reporting Standards (IFRS) of the International
Accounting Standards Board (IASB) and the Interpretations of the International Financial Reporting Interpretations Committee (IFRIC).
All IFRS issued by the IASB, effective at the time of preparing these consolidated financial statements have been applied.



The consolidated
financial statements have been prepared under the historical cost convention as modified by financial assets and financial liabilities
(including derivative instruments) at fair value through profit or loss and biological assets and agricultural produce at the
point of harvest measured at fair value.



In order to
facilitate the understanding of our Consolidated Financial Statements, we have changed the format of the presentation of our
income statement. During the fourth quarter of 2016, we aggregate our sales in a single line item titled “Sales of
goods and services rendered”. Likewise, the corresponding cost has also been aggregated and presented as a single line
item titled “Cost of goods sold and services rendered”. The breakdown of sales is now included in Note 4 to the
Consolidated Financial Statements. The comparative figures have been retroactively changed accordingly.





The preparation of
consolidated financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires
management to exercise its judgment in the process of applying the Group’s accounting policies. The areas involving a higher
degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements
are disclosed in Note 32.



(a) Standards,
amendments and interpretations to existing standards effective and adopted by the Group in 2015



The following standards,
amendments and interpretations to existing standards have been published and were mandatory for the Group as of January 1, 2015:



All the amendments
to the standards IAS 32, ‘Financial instruments: Presentation’ – Offsetting financial assets and financial liabilities,
IAS 36, ‘Impairment of assets’ – Recoverable amount disclosures for non-financial assets and IAS 39, ‘Financial
instruments: Recognition and measurement’ – Novation of derivatives and continuation of hedge accounting have been
analyzed by the Company. The application of these standards did not materially affect the Group’s financial position or results
of operations.



Other standards, amendments
and interpretations which are effective for the financial year beginning on 1 January 2015 are not material to the Group.



| | § | Effects of the adoption of the amendments of IAS 41 and IAS 16
| | - | --------------------------------------------------------------



In June 2014, the
IASB made amendments to IAS 16 Property, Plant and Equipment and IAS 41 Agriculture which distinguish bearer plants from other
biological assets. Bearer plants are solely used to grow produce over their productive lives and are seen to be similar to an item
of machinery. They will therefore now be accounted for under IAS 16. However, agricultural produce growing on bearer plants will
remain within the scope of IAS 41 and continue to be measured at fair value less cost to sell. The amendments shall be applied
for annual periods beginning on or after January 1, 2016, with earlier application permitted.



The Group’s
sugarcane and coffee plantations qualify as bearer plants under the new definition in IAS 41. As required under IAS 8, the change
in accounting policy applied retrospectively. As a consequence, the sugarcane planting and coffee plantations was reclassified
to property, plant and equipment and measured at amortized cost and depreciated over their useful life on straight-line basis,
effective January 1, 2016 and comparative figures retrospectively revised accordingly. The Group adopted the transitional rule
which allows companies to apply fair value of bearer plants as their deemed cost as of January 1, 2014.



However, agricultural
produce growing on sugarcane and coffee plantations will remain under the line biological asset and continue to be measured at
fair value less cost to sell.



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



F- 69







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 32.1 | Basis of preparation and presentation (continued)
| | ---- | -------------------------------------------------



These amendments
resulted in changes in accounting policies and adjustments to the amounts and the results of the operations recognized in the financial
statements as of and for the years ended December 31, 2016 and 2015, as follows:



|Statements of Income (extracts)
|-------------------------------

|                                          |  | 2015(Previously
    stated) |          | Increase/
    (Decrease) |  | 2015 
(Revised) |         | 2014(Previously
    stated) |  | Increase/
    (Decrease) |          | 2014 
(Revised)
|----------------------------------------- |  | --------------------------- | -------- | ------------------------ |  | --------------- | ------- | --------------------------- |  | ------------------------ | -------- | ---------------
|Cost of goods sold and services rendered  |  |                             | (505,693 | )                        |  |                 | (52,093 | )                           |  |                          | (557,886 | )              
|Change in fair value of biological assets |  |                             | 36,869   |                          |  |                 | 17,659  |                             |  |                          | 54,528   |                
|Profit / (Loss) before income tax         |  |                             | 22,129   |                          |  |                 | (34,434 | )                           |  |                          | (12,305  | )              
|Income tax (expense) / benefit            |  |                             | (3,754   | )                        |  |                 | 11,708  |                             |  |                          | 7,954    |                
|Profit / (Loss)for the period             |  |                             | 18,375   |                          |  |                 | (22,726 | )                           |  |                          | (4,351   | )              
|Attributable to:                          |  |                             |          |                          |  |                 |         |                             |  |                          |          |                
|Equity holders of the parent              |  |                             | 17,133   |                          |  |                 | (22,726 | )                           |  |                          | (5,593   | )              
|Non-controlling interests                 |  |                             | 1,242    |                          |  |                 | -       |                             |  |                          | 1,242    |                
|                                          |  |                             | 18,375   |                          |  |                 | (22,726 | )                           |  |                          | (4,351   | )              
|Basic earnings per share                  |  |                             | 0.142    |                          |  |                 | (0.188  | )                           |  |                          | (0.046   | )              
|Diluted earnings per share                |  |                             | 0.140    |                          |  |                 | (0.186  | )                           |  |                          | (0.046   | )              



|Balance sheet (extracts)
|------------------------



|                                  |  | 31 December
    2015 (Prev. stated) |          | Increase/
    (Decrease) |  | 31 December
    2015 (Revised) |          | 1 January 2015
    (Prev. stated) |  | Increase/
    (Decrease) |          | 1 January 2015
    (Revised)
|--------------------------------- |  | ----------------------------------- | -------- | ------------------------ |  | ------------------------------ | -------- | --------------------------------- |  | ------------------------ | -------- | ----------------------------
|Biological assets                 |  |                                     | 299,270  |                          |  |                                | (187,452 | )                                 |  |                          | 111,818  |                             
|Property, plant and equipment     |  |                                     | 540,218  |                          |  |                                | 156,671  |                                   |  |                          | 696,889  |                             
|Deferred tax assets               |  |                                     | 60,857   |                          |  |                                | 7,887    |                                   |  |                          | 68,744   |                             
|Inventories                       |  |                                     | 77,703   |                          |  |                                | 7,583    |                                   |  |                          | 85,286   |                             
|Total assets                      |  |                                     | 978,048  |                          |  |                                | (15,311  | )                                 |  |                          | 962,737  |                             
|                                  |  |                                     |          |                          |  |                                |          |                                   |  |                          |          |                             
|Retained earnings                 |  |                                     | 62,923   |                          |  |                                | (14,128  | )                                 |  |                          | 48,795   |                             
|Cumulative Translation Adjustment |  |                                     | (567,133 | )                        |  |                                | (1,183   | )                                 |  |                          | (568,316 | )                           
|Total equity                      |  |                                     | 542,730  |                          |  |                                | (15,311  | )                                 |  |                          | (527,419 | )                           



|Cash flow (extracts)                        
|--------------------------------------------
|                                            
|Net cash generated from operating activities
|Net cash used in investing activities       



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



F- 70







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 32.1 | Basis of preparation and presentation (continued)
| | ---- | -------------------------------------------------



(b) Standards,
amendments and interpretations to existing standards that are not yet effective



Below is a description
of the standards, amendments and interpretations issued by the IASB to existing standards that have been issued and are mandatory
for the Group’s fiscal periods beginning after January 1, 2015 and which have not been early adopted by the Group:



In May 2014, the IASB
issued IFRS 15, "Revenue from contracts with customers", which deals with revenue recognition and establishes principles
for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and
cash flows arising from an entity’s contracts with customers. Revenue is recognized when a customer obtains control of a
good or service and thus has the ability to direct the use and obtain the benefits from the good or service. The standard replaces
IAS 18 ‘Revenue’ and IAS 11 ‘Construction contracts’ and related interpretations. The standard is effective
for annual periods beginning on or after January 1, 2018 and earlier application is permitted. The Group has not yet assessed the
potential impact IFRS 15 may have on the financial position and results of operations of the Group.



In July 2014 the
IASB published the final version of IFRS 9 Financial Instrument which replaces earlier versions of IFRS 9 and completes the IASB’s
project to replace IAS 39 Financial Instruments: Recognition and Measurement. It includes requirements on the classification and
measurement of financial assets and liabilities, as well as an expected credit losses model that replaces the current incurred
loss impairment model. The standard is effective for accounting periods beginning on or after January 1, 2018. Early adoption is
permitted. The Group has not yet assessed IFRS 9’s full impact on the financial position and results of operations of the
Group.



In September 2014,
the IASB issued the amendments to IFRS 10, “Consolidated financial statements” and IAS 28, “Investments in associates
and joint ventures”, which addresses an acknowledged inconsistency between the requirements of both standards in dealing
with the sale or contribution of assets between an investor and its associate or joint venture. These amendments must be applied
on annual periods beginning on or after January 1, 2016. The Group is currently assessing the impact these amendments may have
on the financial position and results of operations of the Group.



In January 2016, the
IASB finished its long-standing project on lease accounting and published IFRS 16, ‘Leases’, which replaces the current
guidance in IAS 17. This will require far-reaching changes in accounting by lessees in particular. The standard applies to annual
periods beginning on or after 1 January 2019, with earlier application permitted if IFRS 15, ‘Revenue from Contracts with
Customers’, is also applied. The Group has not yet assessed the potential impact IFRS 16 may have on the financial position
and results of operations of the Group.



There are no other
IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Group.



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



F- 71







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 32.2 | Scope of consolidation
| | ---- | ----------------------



The consolidated
financial statements include the results of the Company and all of its subsidiaries from the date that control commences to the
date that control ceases. They also include the Group’s share of the net income of its jointly-controlled entities on an
equity-accounted basis from the point at which joint control commences, to the date that it ceases.



(a)
Subsidiaries



Subsidiaries are
all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable
returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries
are fully consolidated from the date that control commences and deconsolidated from the date that control ceases.



The Group uses the
acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition of a subsidiary
is the fair value of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration
transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related
costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination
are measured initially at their fair values at the acquisition date.



The Group recognizes
any non-controlling interest in the acquiree on an acquisition-by-acquisition basis either at fair value or at the non-controlling
interest’s proportionate share of the acquiree’s net assets.



The excess of the
consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any
previous equity interest in the acquiree over the fair value of the identifiable net assets acquired is recorded as goodwill.



Inter-company transactions, balances and
unrealized gains on transactions between group companies are eliminated. Unrealized losses are also eliminated. Accounting policies
of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.



(b) Changes
in ownership interests in subsidiaries without change of control



Transactions with
non-controlling interests that do not result in loss of control are accounted for as equity transactions – that is, as transactions
with the owners in their capacity as owners. The difference between the fair value of any consideration paid and the relevant share
acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling
interests are also recorded in equity.



(c) Disposal
of subsidiaries



When the Group ceases
to have control any retained interest in the entity is re-measured to its fair value at the date when control is lost, with the
change in carrying amount recognized in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently
accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amount previously recognized
in other comprehensive income in respect of that entity is accounted for as if the Group had directly disposed of the related assets
or liabilities. This may mean that amounts previously recognized in other comprehensive income are reclassified to profit or loss.



(d) Joint
arrangements



Under IFRS 11, investments
in joint arrangements are classified as either joint operations or joint ventures depending on the contractual rights and obligations
each investor has rather than the legal structure of the joint arrangement.



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



F- 72







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 32.2 | Scope of consolidation (continued)
| | ---- | ----------------------------------



The Group has assessed
the nature of its joint arrangements and determined them to be joint ventures and value them under the equity method.



Under the equity
method of accounting, interests in joint ventures are initially recognized in the consolidated statement of financial position
at cost and adjusted thereafter to recognize the Group’s share of the post-acquisition of profits or losses and movements
in other comprehensive income, respectively. When the share of losses of an investee equals or exceeds the carrying amount of an
investment the Group discontinue applying the equity method, the investment is reduced to zero and does not record additional losses.
If the investee subsequently reports net income, the Group would resume applying the equity method only after its share of that
net income equals the share of net losses not recognized during the period the equity method was suspended.



Unrealized
gains on transactions between the Group and its joint ventures are eliminated to the extent of the Group’s interest in the
joint ventures. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Accounting policies of the joint ventures have been changed where necessary to ensure consistency with the policies adopted by
the Group.



| | 32.3 | Segment reporting
| | ---- | -----------------



According to IFRS 8,
operating segments are identified based on the ‘management approach’. This approach stipulates external segment reporting
based on the Group’s internal organizational and management structure and on internal financial reporting to the chief operating
decision maker (the Management Committee in the case of the Company)



| | 32.4 | Foreign currency translation
| | ---- | ----------------------------



(a) Functional
and presentation currency



Items included in the
financial statements of each of the Group’s entities are measured using the currency of the primary economic environment
in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in US
dollars, which is the Group’s presentation currency.



(b) Transactions
and balances



Foreign currency transactions
are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where
items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation
at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the statement
of income, in the line Item “Finance income” or “Finance cost”, as appropriate.



(c) Group companies



The results and financial
position of all the Group entities (none of which has the currency of a hyper-inflationary economy) that have a functional currency
different from the presentation currency are translated into the presentation currency as follows:



| | · | 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.
| | - | ------------------------------------------------------------------------------------



When a foreign operation
is partially disposed of or sold, exchange differences that were recorded in equity are recognized in the statement of income as
part of the gain or loss on sale.



Goodwill and fair value
adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated
at the closing rate.



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



F- 73







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 32.5 | Property, plant and equipment
| | ---- | -----------------------------



Property, plant and
equipment is recorded at cost, less accumulated depreciation and impairment losses, if any. Historical cost comprises the purchase
price and any costs directly attributable to the acquisition. Under the definition of Property plant and equipment is included
the bearer plants, such as sugarcane and coffe trees.



Where individual
components of an item of property, plant and equipment have different useful lives, they are accounted for as separate items, which
are depreciated separately.



Subsequent costs
are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that
future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The
carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to the statement of income
when they are incurred.



The depreciation
methods and periods used by the group are disclosed in Note 12.



Gains and losses
on disposals are determined by comparing the proceeds with the carrying amount and are recognized within “Other operating
income, net” in the statement of income.



| | 32.6 | Investment property
| | ---- | -------------------



Investment property
consists of farmland for rental or for capital appreciation and not used in production or for sale in the ordinary course of business,
and it is measured at cost less accumulated depreciation and any impairment losses if any.



| | 32.7 | Leases
| | ---- | ------



The Group classifies
its leases at the inception as finance or operating leases. Leases are classified as finance leases whenever the terms of the lease
transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases
and charged to the statements of income in a straight-line basis over the period of the lease. Finance leases are capitalized at
the lease’s inception at the lower of the fair value of the leased property and the present value of the minimum lease payments.
The corresponding rental obligations, net of finance charges, are included as “Borrowings”



| | 32.8 | Goodwill
| | ---- | --------



Goodwill represents
future economic benefits arising from assets that are not capable of being individually identified and separately recognized by
the Group on an acquisition. Goodwill on acquisition is initially measured at cost. being the excess of the consideration over
the fair value of the Group’s share of net assets of the acquired subsidiary undertaking at the acquisition date. Following
initial recognition, goodwill is measured at cost less any accumulated impairment losses. It is allocated to those cash generating
units expected to benefit from the acquisition for the purpose of impairment testing. Goodwill arising on the acquisition of subsidiaries
is included within “Intangible assets” on the statement of financial position. Goodwill arising on the acquisition
of foreign entities is treated as an asset of the foreign entity denominated in the local currency and translated at the closing
rate.



Goodwill is not amortized
but tested for impairment on an annual basis, or more frequently if there is an indication of impairment. Gains and losses on the
disposal of a Group entity include any goodwill relating to the entity sold (see Note 32.10).



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



F- 74







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 32.9 | Other intangible assets
| | ---- | -----------------------



Other intangible assets
that are acquired by the Group, which have finite useful lives, are measured at cost less accumulated amortization and impairment
losses, if any. These intangible assets comprise trademarks and computer software and are amortized in the statement of income
on a straight-line basis over their estimated useful lives estimated to be 10 to 20 years and 3 to 5 years, respectively.



| | 32.10 | Impairment of assets
| | ----- | --------------------



Goodwill



For the purpose of
impairment testing, assets are grouped at the lowest levels for which there are separately identifiable cash flows, known as cash-generating
units. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss
is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit
pro-rata on the basis of the carrying amount of each asset may in the unit. Impairment losses recognized for goodwill cannot be
reversed in a subsequent period. Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing
value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash
flows have not been adjusted (see Note 33 (a) for details).



Property, plant
and equipment and finite lived intangible assets



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



If the recoverable
amount of an asset or cash-generating unit is estimated to be less than its carrying amount, that carrying amount is reduced to
its recoverable amount. An impairment loss is recognized immediately in the statement of income.



Where an impairment
loss subsequently reverses, the carrying amount of the asset or cash-generating unit is increased to the revised estimate of its
recoverable amount, not to exceed the carrying amount that would have been determined had no impairment loss been recognized for
the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognized immediately in the statement of
income.



| | 32.11 | Biological assets
| | ----- | -----------------



Biological assets comprise
growing crops (mainly corn, wheat, soybeans, sunflower and rice), sugarcane, coffee and livestock (growing herd and cattle for
dairy production).



The Group distinguishes
between consumable and bearer biological assets, and between mature and immature biological assets. “Consumable” biological
assets are those assets that may be harvested as agriculture produce or sold as biological assets, for example livestock intended
for dairy production. “Bearer” biological assets are those assets capable of producing more than one harvest, for example
sugarcane or livestock from which raw milk is produced. “Mature” biological assets are those that have attained harvestable
specifications (for consumable biological assets) or are able to sustain regular harvests (for bearer biological assets). “Immature”
biological assets are those assets other than mature biological assets.



Costs are capitalized
as biological assets if, and only if, (a) it is probable that future economic benefits will flow to the entity, and (b) the cost
can be measured reliably. The Group capitalizes costs such as: planting, harvesting, weeding, seedlings, irrigation, agrochemicals,
fertilizers and a systematic allocation of fixed and variable production overheads that are directly attributable to the management
of biological assets, among others. Costs that are expensed as incurred include administration and other general overhead and unallocated
production overhead, among others.



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



F- 75







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 32.11 | Biological assets (continued)
| | ----- | -----------------------------



Biological assets,
both at initial recognition and at each subsequent reporting date, are measured at fair value less costs to sell, except where
fair value cannot be reliably measured. Cost approximates fair value when little biological transformation has taken place since
the costs were originally incurred or the impact of biological transformation on price is not expected to be material.



Gains and losses
that arise on measuring biological assets at fair value less costs to sell and measuring agricultural produce at the point of harvest
at fair value less costs to sell are recognized in the statement of income in the period in which they arise in the line item “Initial
recognition and changes in fair value of biological assets and agricultural produce”.



Where there is an
active market for a biological asset or agricultural produce, quoted market prices in the most relevant market are used as a basis
to determine the fair value. Otherwise, when there is no active market or market-determined prices are not available, fair value
of biological assets is determined through the use of valuation techniques.



Therefore, the fair
value of biological assets is generally derived from the expected discounted cash flows of the related agricultural produce. The
fair value of the agricultural produce at the point of harvest is generally derived from market determined prices. A general description
of the determination of fair values based on the Company’s business segments follow:



| | · | Growing crops:
| | - | --------------



Growing crops, for
which biological transformation is not significant, are measured at cost, which approximates fair value. Expenditure on growing
crops includes land preparation expenses and other direct expenses incurred during the sowing period including labor, seedlings,
agrochemicals and fertilizers among others.



Otherwise, biological
assets are measured at fair value less estimated point-of-sale costs at initial recognition and at any subsequent period. Point-of-sale
costs include all costs that would be necessary to sell the assets



The fair value of
growing crops excluding sugarcane and coffee is measured based on a formula, which takes into consideration the estimated crop
yields, estimated market prices and costs, and discount rates. Yields are determined based on several factors including location
of farmland, environmental conditions and other restrictions and growth at the time of measurement. Yields are multiplied by sown
hectares to determine the estimated tons of crops to be obtained. The tons are then multiplied by a net cash flow determined at
the future crop prices less the direct costs to be incurred. This amount is discounted at a discount rate, which reflects current
market assessments of the assets involved and the time value of money.



| | · | Growing herd and cattle:
| | - | ------------------------



Livestock are measured
at fair value less estimated point-of-sale costs, with any changes therein recognized in the statement of income, on initial recognition
as well as subsequently at each reporting period. The fair value of livestock is determined based on the actual selling prices
less estimated point-of-sale costs in the markets where the Group operates.



| | · | Coffee:
| | - | -------



The agricultural produce growing on the coffee trees, are biological
assets, and are valued at fair value less cost to sell. Projected costs include maintenance, pruning, land leasing, harvesting
and coffee treatment. These estimates are discounted at an appropriate discount rate.



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



F- 76







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 32.11. | Biological assets (continued)
| | ------ | -----------------------------



| | · | Sugarcane:
| | - | ----------



Sugarcane planting
costs form part of Property plant and equipment. The agricultural produce growing on sugarcane is classified as biological assets
and are measured at fair value less cost to sell. The fair value of agricultural produce growing on sugarcane depends on the variety,
location and maturity of the plantation.



Agricultural produce
growing in the Sugarcane, for which biological growth is not significant, is valued at cost, which approximates fair value. Expenditure
on the agricultural produce growing in the sugarcane consists mainly of labor, agrochemicals and fertilizers among others. When
it has attained significant biological growth, it is measured at fair value through a discounted cash flow model. Revenues are
based on estimated yearly production volume (which will be destined to sugar, ethanol, energy and raw cane production) and the
price is calculated as the average of daily prices for sugar future contracts (Sugar #11 ICE-NY contracts) for a six months period.
Projected costs include maintenance and land leasing among others. These estimates are discounted at an appropriate discount rate.



| | 32.12 | Inventories
| | ----- | -----------



Inventories comprise
of raw materials, finished goods (including harvested agricultural produce and manufactured goods) and others.



Harvested agricultural
produce (except for rice and milk) are measured at net realizable value until the point of sale because there is an active market
in the produce, there is a negligible risk that the produce will not be sold and there is a well-established practice in the industry
carrying the inventories at net realizable value. Changes in net realizable value are recognized in the statement of income in
the period in which they arise under the line item “Changes in net realizable value of agricultural produce after harvest”.



All other inventories
(including rice and milk) are measured at the lower of cost and net realizable value. Cost is determined using the weighted average
method.



| | 32.13 | Financial assets
| | ----- | ----------------



Financial assets are
classified in the following categories: at fair value through profit or loss and loans and receivables. The classification depends
on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at
initial recognition (see Note 17).



(a) Recognition
and measurement



Regular purchases and
sales of financial assets are recognized on the trade-date – the date on which the Group commits to purchase or sell the
asset. Financial assets not carried at fair value through profit or loss are initially recognized at fair value plus transaction
costs. Financial assets carried at fair value through profit or loss are initially recognized at fair value and transaction costs
are expensed in the statement of income. Financial assets are derecognized when the rights to receive cash flows from the investments
have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership. Financial
assets at fair value through profit or loss are subsequently carried at fair value. Loans and receivables are subsequently carried
at amortized cost using the effective interest method.



Gains or losses arising
from changes in the fair value of the “financial assets at fair value through profit or loss” category are presented
in the statement of income within “Other operating income, net” in the period in which they arise.



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



F- 77







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 32.13 | Financial assets (continued)
| | ----- | ----------------------------



If the market for a
financial asset is not active (and for unlisted securities), the Group establishes fair value by using valuation techniques. These
include the use of recent arm’s length transactions, reference to other instruments that are substantially the same, discounted
cash flow analysis, and option pricing models, making maximum use of market inputs and relying as little as possible on entity-specific
inputs.



The Group assesses
at each statement of financial position date whether there is objective evidence that a financial asset or a group of financial
assets is impaired. Impairment testing of trade receivables is described in Note 32.15.



(b)
Offsetting financial instruments



Financial assets and
liabilities are offset and the net amount reported in the statement of financial position when there is a legally enforceable right
to offset the recognized amounts and there is an intention to settle on a net basis, or realize the asset and settle the liability
simultaneously. This right must not be contingent on future events and must be enforceable in any case.



| | 32.14 | Derivative financial instruments and hedging activities
| | ----- | -------------------------------------------------------



Derivatives are initially
recognized at fair value on the date a derivative contract is entered into and are subsequently remeasured at their fair value.
Commodity future contract fair values are computed with reference to quoted market prices on future exchanges markets. The fair
values of commodity options are calculated using year-end market rates together with common option pricing models. The fair value
of interest rate swaps has been calculated using a discounted cash flow analysis.



The Group manages
exposures to financial and commodity risks using hedging instruments that provide the appropriate economic outcome. The principal
hedging instruments used may include commodity future contracts, put and call options, foreign exchange forward contracts and interest
rate swaps. The Group does not use derivative financial instruments for speculative purposes.



The Group’s
policy is to apply hedge accounting to hedging relationships where it is both permissible under IAS 39, practical to do so and
its application reduces volatility, but transactions that may be effective hedges in economic terms may not always qualify for
hedge accounting under IAS 39. Any derivatives that the Group holds to hedge these exposures are classified as “held for
trading” and are shown in a separate line on the face of the statement of financial position. The method of recognizing gains
or losses on derivatives depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the
item being hedged. Gains and losses on commodity derivatives are classified within “Other operating income, net”. Gains
and losses on interest rate and foreign exchange rate derivatives are classified within ‘Financial results, net’. The
Group designates certain derivatives as hedges of the foreign currency risk associated with highly probable forecast transactions
(cash flow hedge).



The Group documents
at the inception of the transaction the relationship between hedging instruments and hedged items, as well as its risk management
objectives and strategy for undertaking various hedging transactions. The Group also documents its assessment, both at hedge inception
and on an ongoing basis, of whether the instruments that are used in hedging transactions are highly effective in offsetting changes
in fair value or cash flows of hedged items.



Cash flow hedge



The effective portion
of the gain or loss on the instruments that are designated and qualify as cash flow hedges is recognized in other comprehensive
income. The gain or loss relating to the ineffective portion is recognized immediately in the statement of income within "Finance
income” or “Finance cost”, as appropriate.



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



F- 78







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 32.14 | Derivative financial instruments and hedging activities (continued)
| | ----- | -------------------------------------------------------------------



Amounts accumulated
in equity are reclassified to profit or loss in the periods when the hedged item affects profit or loss. The gain or loss relating
to the effective portion is recognized in the statement of income within "Finance income” or “Finance cost”,
as appropriate.



When a hedging instrument
expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in
equity at that time remains in equity and is recognized when the forecast transaction is ultimately recognized in the statement
of income. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity
is immediately transferred to the statement of income.



| | 32.15 | Trade and other receivables and trade and other payables
| | ----- | --------------------------------------------------------



Trade receivables are
recognized initially at fair value and subsequently measured at amortized cost using the effective interest method. In the case
of receivables, less allowance for trade receivables.



An allowance for trade
receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according
to the original terms of the receivables. Such evidence includes significant financial difficulties of the debtor, probability
that the debtor will enter bankruptcy or financial reorganization, and default or delinquency in payments. Subsequent recoveries
of amounts previously written off are credited against selling expenses in the statement of income.



| | 32.16 | Cash and cash equivalents
| | ----- | -------------------------



Cash and cash equivalents includes cash in hand, deposits held
at call with banks and other short-term highly liquid investments with original maturities of three months or less. In the statements
of cash flows, interest paid is presented within financing cash flows and interest received is presented within investing activities.



| | 32.17 | Borrowings
| | ----- | ----------



Borrowings are initially
recognized at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortized cost using the effective
interest method. Borrowing costs are capitalized during the period of time that is required to complete and prepare the asset for
its intended use.



| | 32.18 | Provisions
| | ----- | ----------



Provisions are recognized
when (i) the Group has a present legal or constructive obligation as a result of past events; (ii) it is probable that an outflow
of resources will be required to settle the obligation; and (iii) a reliable estimate of the amount of the obligation can be made.
Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax
rate that reflects current market assessments of the time value of money and the risks specific to the obligation.



| | 32.19 | Onerous contracts
| | ----- | -----------------



The Group enters
into contracts, which require the Group to sell commodities in accordance with the Group's expected sales. These contracts do not
qualify as derivatives. These contracts are not recognized until at least one of the parties has performed under the agreement.
However, when the contracts are onerous, the Group recognizes the present obligation under the contracts as a provision included
within “Provision and other liabilities” in the statement of financial position. Losses under these onerous contracts
are recognized within “Other operating income, net” in the statement of income.



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



F- 79







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 32.20 | Current and deferred income tax
| | ----- | -------------------------------



The Group’s tax
benefit or expense for each year comprises the charge for current tax payable and deferred taxation attributable to the Group’s
operating subsidiaries. Tax is recognized in the statement of income, except to the extent that it relates to items recognized
directly in equity. In this case, the tax is also recognized in equity.



The current income
tax charge is calculated on the basis of the tax laws enacted at the date of the statement of financial position in the countries
where the Group’s subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in
tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions
where appropriate on the basis of amounts expected to be paid to the tax authorities.



Deferred income tax
is recognized, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and
their carrying amounts in the consolidated financial statements. However, the deferred income tax is not accounted for if it arises
from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction
affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) effective in
the countries where the Group’s subsidiaries operate and generate taxable income.



Deferred income tax
assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary
differences can be utilized.



Deferred income tax
is provided on temporary differences arising on investments in subsidiaries, except where the timing of the reversal of the temporary
difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.



The Group is able to
control the timing of dividends from its subsidiaries and hence does not expect to remit overseas earnings in the foreseeable future
in a way that would result in a charge to taxable profit. Hence deferred tax is recognized in respect of the retained earnings
of overseas subsidiaries only to the extent that, at the date of the statement of financial position, dividends have been accrued
as receivable or a binding agreement to distribute past earnings in future has been entered into by the subsidiary.



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



F- 80







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 32.21 | Revenue recognition
| | ----- | -------------------



The Group’s primary
activities comprise agricultural and agro-industrial activities.



The Group’s agricultural
activities comprise growing and selling agricultural produce. In accordance with IAS 41 “Agriculture”, cattle are measured
at fair value with changes therein recognized in the statement of income as they arise. Agricultural produce is measured at net
realizable value with changes therein recognized in the statement of income as they arise. Therefore, sales of agricultural produce
and cattle generally do not generate any separate gains or losses in the statement of income. See Notes 32.11 and 32.12 for additional
details.



The Group’s agro-industrial
activities comprise the selling of manufactured products (i.e. industrialized rice, milk-related products, ethanol, sugar, energy,
among others). These sales are measured at the fair value of the consideration received or receivable, net of returns and allowances,
trade and other discounts, and sales taxes, as applicable. Revenue is recognized when the significant risks and rewards of ownership
have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods
can be estimated reliably, and there is no continuing management involvement with the goods. Transfers of risks and rewards vary
depending on the individual terms of the contract of sale.



The Group also provides
certain agricultural-related services such as grain warehousing/conditioning and other services, e.g. handling and drying services.
Revenue from services is recognized as services are provided.



The Group leases owned
farmland property to third parties under operating lease agreements. Rental income is recognized on a straight-line basis over
the period of the lease.



The Group is a party
to a 10-year power agreement for the sale of electricity which expires in 2018. The delivery period starts in May and ends in November
of each year. The Group is also a party to two 15-year power agreements which delivery period starts in March and ends in December
of each year, these two agreements will expire in 2024 and 2025, respectively. Prices under all the agreements are adjusted annually
for inflation. Revenue related to the sale of electricity under these two agreements is recorded based upon output delivered.



| | 32.22 | Farmlands sales
| | ----- | ---------------



The Group’s strategy
is to profit from land appreciation value generated through the transformation of its productive capabilities. Therefore, the Group
may seek to realize value from the sale of farmland assets and businesses.



Farmland sales are
not recognized until (i) the sale is completed, (ii) the Group has determined that it is probable the buyer will pay, (iii) the
amount of revenue can be measured reliably, and (iv) the Group has transferred to the buyer the risk of ownership, and does not
have a continuing involvement. Gains from “farmland sales” are included in the statement of income under the line item
“Other operating income, net”.



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



F- 81







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 32.23 | Assets held for sale and discontinued operations
| | ----- | ------------------------------------------------



When the Group intends
to dispose of, or classify as held for sale, a business component that represents a separate major line of business or geographical
area of operations, or a subsidiary acquired exclusively with a view to resale, it classifies such operations as discontinued.
The post tax profit or loss of the discontinued operations is shown as a single amount on the face of the statement of income,
separate from the other results of the Group. Assets and liabilities classified as held for sale are measured at the lower of carrying
value and fair value less costs to sell.



Non-current assets
and disposal groups are classified as held for sale if their carrying amount will be recovered through a disposal rather than through
continuing use. This condition is regarded as met only when management is committed to the sale (disposal), the sale (disposal)
is highly probable and expected to be completed within one year from classification and the asset is available for immediate sale
(disposal) in its present condition. The statements of income for the comparative periods are represented to show the discontinued
operations separate from the continuing operations.



| | 32.24 | Earnings per share
| | ----- | ------------------



Basic earnings per share is calculated
by dividing the net income for the year attributable to equity holders of the parent by the weighted average number of ordinary
shares outstanding during the year. Diluted net earnings per share is computed by dividing the net income for the period by the
weighted average number of ordinary shares outstanding, and when dilutive, adjusted for the effect of all potentially dilutive
shares, including share options, on an as-if converted basis.



| | 32.25 | Equity-settled share-based payments
| | ----- | -----------------------------------



The Group issues equity
settled share-based payments to certain directors, senior management and employees. Options under the awards were measured at fair
value at the date of grant. An expense is recognized to spread the fair value of each award over the vesting period on a straight-line
basis, after allowing for an estimate of the awards that will eventually vest. The estimate of the level of vesting is reviewed
at least annually, with any impact on the cumulative charge being recognized immediately.



| | 32.26 | Research and development
| | ----- | ------------------------



Research phase expenditure is expensed as
incurred. Development expenditure is capitalized as an internally generated intangible asset only if it meets strict criteria,
relating in particular to technical feasibility and generation of future economic benefits. Research expenses have been immaterial
to date. The Group has not capitalized any development expenses to date.



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



F- 82







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 33. | Critical accounting estimates and judgments
| | --- | -------------------------------------------



Critical accounting
policies are those that are most important to the portrayal of the Group’s financial condition, results of operations and
cash flows, and require management to make difficult, subjective or complex judgments and estimates about matters that are inherently
uncertain. Management bases its estimates on historical experience and other assumptions that it believes are reasonable. The Group’s
critical accounting policies are discussed below.



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



(a)Impairment
testing



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



Goodwill is tested
for impairment annually or more frequently if events or changes in circumstances indicate that the carrying amount may be impaired.
The impairment review requires management to undertake certain judgments, including estimating the recoverable value of the CGU
to which the goodwill relates, based on either fair value less costs-to-sell or the value-in-use, as appropriate, in order to reach
a conclusion on whether it deems the goodwill is impaired or not.



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



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



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



As of September 30,
2016 and 2015, there were no impairment indicators on the Company’s long lived assets. Therefore, the Group only tested those
CGUs with allocated goodwill in Argentina, Brazil and Uruguay.



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



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



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



F- 83







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 33. | Critical accounting estimates and judgments (continued)
| | --- | -------------------------------------------------------



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



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



The first step to
establishing an assessment for a farm property is a sales investigation that identifies the valid farm sales in the area where
the farm is located.



A price per hectare
is assigned for each soil class within each farm property. This price per hectare is determined based on the quantitative and qualitative
analysis mainly described above.



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



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



|CGU / Operating segment / Country                                             |  | September 30, 2016 |        | September 30, 2015
|----------------------------------------------------------------------------- |  | ------------------ | ------ | ------------------
|La Carolina / Crops / Argentina                                               |  |                    | 40     |                   
|La Carolina / Cattle / Argentina                                              |  |                    | 13     |                   
|El Orden/ Crops / Argentina                                                   |  |                    | 60     |                   
|El Orden/ Cattle / Argentina                                                  |  |                    | 5      |                   
|La Guarida / Crops / Argentina                                                |  |                    | 405    |                   
|La Guarida / Cattle / Argentina                                               |  |                    | 330    |                   
|Los Guayacanes / Crops / Argentina                                            |  |                    | 511    |                   
|Doña Marina / Rice / Argentina                                                |  |                    | 1,803  |                   
|Huelen / Crops / Argentina                                                    |  |                    | 2,020  |                   
|El Colorado / Crops / Argentina                                               |  |                    | 890    |                   
|El Colorado / Cattle / Argentina                                              |  |                    | 130    |                   
|Closing net book value of goodwill allocated to CGUs tested (Note 14)         |  |                    | 6,207  |                   
|Closing net book value of PPE items and other assets allocated to CGUs tested |  |                    | 36,901 |                   
|Total assets allocated to CGUs tested                                         |  |                    | 43,108 |                   



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



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



F- 84







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 33. | Critical accounting estimates and judgments (continued)
| | --- | -------------------------------------------------------



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



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



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



|Key Assumptions            |  | September 30,2016      |  | September 30,2015     
|-------------------------- |  | ---------------------- |  | ----------------------
|Financial projections      |  | Covers 4 years for UMA |  | Covers 4 years for UMA
|                           |  | Cover 7 years for AVI  |  | Cover 7 years for AVI 
|Yield average growth rates |  | 0-1%                   |  | 0-1%                  
|Future pricing increases   |  | 3% per annum           |  | 1% per annum          
|Future cost increases      |  | 3% per annum           |  | 1% per annum          
|Discount rates             |  | 6.22%                  |  | 6.5%                  
|Perpetuity growth rate     |  | 2.%                    |  | 2%                    



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



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



|CGU/ Operating segment                                                        |  | September 30, 2016 |         | September 30, 2015
|----------------------------------------------------------------------------- |  | ------------------ | ------- | ------------------
|AVI / Sugar, Ethanol and Energy                                               |  |                    | 4,892   |                   
|UMA / Sugar, Ethanol and Energy                                               |  |                    | 2,564   |                   
|Closing net book value of goodwill allocated to CGUs tested (Note 14)         |  |                    | 7,456   |                   
|Closing net book value of PPE items and other assets allocated to CGUs tested |  |                    | 689,857 |                   
|Total assets allocated to 3 CGUs tested                                       |  |                    | 697,313 |                   



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



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



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



F- 85







Adecoagro S.A.

Notes to the Consolidated Financial Statements
(Continued)

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



| | 33. | Critical accounting estimates and judgments (continued)
| | --- | -------------------------------------------------------



(b) Biological
assets



The nature of the Group’s biological assets and the basis
of determination of their fair value are explained under Note 32.11. The discounted cash flow model requires the input of highly
subjective assumptions including observable and unobservable data. Generally the estimation of the fair value of biological assets
is based on models or inputs that are not observable in the market and the use of unobservable inputs is significant to the overall
valuation of the assets. Unobservable inputs are determined based on the best information available, for example by reference to
historical information of past practices and results, statistical and agronomical information, and other analytical techniques.
Key assumptions include future market prices, estimated yields at the point of harvest, estimated production cycle, future cash
flows, future costs of harvesting and other costs, and estimated discount rate.



Market prices are
generally determined by reference to observable data in the principal market for the agricultural produce. Harvesting costs and
other costs are estimated based on historical and statistical data. Yields are estimated based on several factors including the
location of the farmland and soil type, environmental conditions, infrastructure and other restrictions and growth at the time
of measurement. Yields are subject to a high degree of uncertainty and may be affected by several factors out of the Group’s
control including but not limited to extreme or unusual weather conditions, plagues and other crop diseases, among other factors.



The key assumptions
discussed above are highly sensitive. Reasonable shifts in assumptions including but not limited to increases or decreases in prices,
costs and discount factors used would result in a significant increase or decrease to the fair value of biological assets. In addition,
cash flows are projected over a number of years and based on estimated production. Estimates of production in themselves are dependent
on various assumptions, in addition to those described above, including but not limited to several factors such as location, environmental
conditions and other restrictions. Changes in these estimates could materially impact on estimated production, and could therefore
affect estimates of future cash flows used in the assessment of fair value (see Note 15).



(c) Fair value
of derivatives and other financial instruments



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



(d) Income
taxes



The Group is subject
to income taxes in numerous jurisdictions. Significant judgment is required in determining the worldwide provision for income taxes.
There are many transactions and calculations for which the ultimate tax determination is uncertain. The Group recognizes liabilities
for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these
matters is different from the amounts that were initially recorded, such differences will impact the current and deferred income
tax assets and liabilities in the period in which such determination is made.



Deferred tax assets
are reviewed each reporting date and reduced to the extent that it is no longer probable that sufficient taxable income will be
available to allow all or part of the asset to be settled. Deferred tax assets and liabilities are not discounted. The ultimate
realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those
temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future
taxable income and tax planning strategies in making this assessment (see Note 10 for details).



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



F- 86