EX-99.1 2 a19-5480_6ex99d1.htm EX-99.1

Exhibit 99.1

 

BIOCERES INC CROP BUSINESS

& BIOCERES SEMILLAS S.A.

 

Unaudited interim condensed combined financial
statements as of December 31, 2018, June 30, 2018
and for the six-month periods ended December 31,
2018 and 2017

 


 

BIOCERES INC CROP BUSINESS & BIOCERES SEMILLAS S.A.

 

INDEX

 

Unaudited interim condensed combined financial statements as of December 31, 2018, June 30, 2018 and for the six-month periods ended December 31, 2018 and 2017.

 

 

 

Unaudited interim condensed combined statements of financial position as of December 31, 2018 and June 30, 2018

F-3

 

 

Unaudited interim condensed combined statements of comprehensive income for the six-month and three-month periods ended December 31, 2018 and 2017

F-5

 

 

Unaudited interim condensed combined statements of changes in equity for the six-month periods ended December 31, 2018 and 2017

F-6

 

 

Unaudited interim condensed combined statements of cash flows for the six-month periods ended December 31, 2018 and 2017

F-7

 

 

Notes to the Unaudited interim condensed combined financial statements

F-9

 

F-2


 

BIOCERES INC CROP BUSINESS & BIOCERES SEMILLAS S.A.

 

UNAUDITED INTERIM CONDENSED COMBINED STATEMENTS OF FINANCIAL POSITION

 

As of December 31, 2018 and June 30, 2018

(Amounts in USD)

 

 

 

Notes

 

12/31/2018

 

06/30/2018

 

ASSETS

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

Cash and cash equivalents

 

5.1

 

4,251,154

 

2,215,103

 

Other financial assets

 

5.2

 

4,567,406

 

4,550,847

 

Trade receivables

 

5.3

 

82,120,771

 

52,888,427

 

Other receivables

 

5.4

 

5,084,534

 

4,240,205

 

Income and minimum presumed income taxes recoverable

 

 

 

61,834

 

2,082,269

 

Inventories

 

5.5

 

24,097,484

 

19,366,001

 

Total current assets

 

 

 

120,183,183

 

85,342,852

 

 

 

 

 

 

 

 

 

NON-CURRENT ASSETS

 

 

 

 

 

 

 

Other financial assets

 

5.2

 

346,575

 

243,358

 

Other receivables

 

5.4

 

1,409,634

 

4,979,507

 

Income and minimum presumed income taxes recoverable

 

 

 

570,231

 

126,653

 

Deferred tax assets

 

 

 

624,646

 

5,601,821

 

Investments in joint ventures and associates

 

9

 

27,144,578

 

19,072,055

 

Property, plant and equipment

 

5.6

 

42,703,375

 

40,177,146

 

Intangible assets

 

5.7

 

35,181,602

 

26,657,345

 

Goodwill

 

5.8

 

21,556,423

 

14,438,027

 

Total non-current assets

 

 

 

129,537,064

 

111,295,912

 

Total assets

 

 

 

249,720,247

 

196,638,764

 

 

The accompanying Notes are an integral part of these Unaudited interim condensed combined financial statements. Related parties’ balances and transactions are disclosed in Note 12.

 

F-3


 

BIOCERES INC CROP BUSINESS & BIOCERES SEMILLAS S.A.

 

UNAUDITED INTERIM CONDENSED COMBINED STATEMENTS OF FINANCIAL POSITION

 

As of December 31, 2018 and June 30, 2018

(Amounts in USD)

 

 

 

Notes

 

12/31/2018

 

06/30/2018

 

LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

Trade and other payables

 

5.9

 

42,911,186

 

27,708,830

 

Borrowings

 

5.10

 

89,924,339

 

65,308,928

 

Employee benefits and social security

 

5.11

 

5,194,969

 

4,411,713

 

Deferred revenue and advances from customers

 

5.12

 

1,234,024

 

1,007,301

 

Income and minimum presumed income taxes payable

 

 

 

708,189

 

2,569

 

Government grants

 

 

 

4,754

 

17,695

 

Financed payment - Acquisition of business

 

5.14

 

19,338,121

 

20,223,590

 

Total current liabilities

 

 

 

159,315,582

 

118,680,626

 

 

 

 

 

 

 

 

 

NON-CURRENT LIABILITIES

 

 

 

 

 

 

 

Borrowings

 

5.10

 

18,026,397

 

25,708,205

 

Government grants

 

 

 

9,124

 

15,532

 

Investments in joint ventures and associates

 

9

 

2,048,254

 

2,012,298

 

Deferred tax liabilities

 

 

 

14,974,403

 

13,591,942

 

Provisions

 

5.13

 

502,199

 

845,486

 

Financed payment - Acquisition of business

 

5.14

 

 

2,651,019

 

Total non-current liabilities

 

 

 

35,560,377

 

44,824,482

 

Total liabilities

 

 

 

194,875,959

 

163,505,108

 

 

 

 

 

 

 

 

 

EQUITY

 

 

 

 

 

 

 

Equity attributable to owners of the parent

 

 

 

24,830,569

 

13,713,484

 

Non-controlling interests

 

 

 

30,013,719

 

19,420,172

 

Total equity

 

 

 

54,844,288

 

33,133,656

 

 

 

 

 

 

 

 

 

Total equity and liabilities

 

 

 

249,720,247

 

196,638,764

 

 

The accompanying Notes are an integral part of these Unaudited interim condensed combined financial statements. Related parties’ balances and transactions are disclosed in Note 12.

 

F-4


 

BIOCERES INC CROP BUSINESS & BIOCERES SEMILLAS S.A.

 

UNAUDITED INTERIM CONDENSED COMBINED STATEMENTS OF COMPREHENSIVE INCOME

 

For the six-month and three-month periods ended December 31, 2018 and 2017

(Amounts in USD)

 

 

 

 

 

Six-month
period ended

 

Six-month
period ended

 

Three-month
period ended

 

Three-month
period ended

 

 

 

Notes

 

12/31/2018

 

12/31/2017

 

12/31/2018

 

12/31/2017

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

6.1

 

92,058,506

 

80,978,570

 

62,452,761

 

47,119,021

 

Government grants

 

 

 

12,960

 

28,667

 

6,481

 

14,055

 

Total revenue

 

 

 

92,071,466

 

81,007,237

 

62,459,242

 

47,133,076

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

6.2

 

(47,652,679

)

(47,866,280

)

(33,153,669

)

(27,854,647

)

Research and development expenses

 

6.3

 

(942,692

)

(2,066,798

)

105,800

 

(1,128,424

)

Selling, general and administrative expenses

 

6.4

 

(16,826,517

)

(19,859,876

)

(10,746,032

)

(11,464,668

)

Share of profit or loss of joint ventures and associates

 

9

 

812,593

 

(72,238

)

732,437

 

(127,355

)

Other income or expenses, net

 

 

 

(298,562

)

286,772

 

(400,173

)

343,650

 

Operating profit

 

 

 

27,163,609

 

11,428,817

 

18,997,605

 

6,901,632

 

 

 

 

 

 

 

 

 

 

 

 

 

Finance income

 

6.5

 

25,790,367

 

5,371,368

 

8,643,261

 

4,044,654

 

Finance costs

 

6.6

 

(50,202,476

)

(18,564,163

)

(15,032,953

)

(11,797,328

)

Net gain of inflation effects on the monetary items

 

 

 

9,865,802

 

 

5,579,039

 

 

Profit / (loss) before income tax

 

 

 

12,617,302

 

(1,763,978

)

18,186,952

 

(851,042

)

 

 

 

 

 

 

 

 

 

 

 

 

Income tax

 

 

 

(5,050,749

)

5,856,052

 

(7,021,142

)

5,566,215

 

Profit for the period

 

 

 

7,566,553

 

4,092,074

 

11,165,810

 

4,715,173

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income / (loss)

 

 

 

(2,511,723

)

(11,651,111

)

13,883,530

 

(7,494,623

)

 

 

 

 

 

 

 

 

 

 

 

 

Items that may be subsequently reclassified to profit and loss

 

 

 

(2,992,364

)

(11,872,524

)

16,218,984

 

(7,716,036

)

Exchange differences on translation of foreign operations from joint ventures

 

 

 

(1,935,511

)

(4,328,736

)

3,799,016

 

(3,064,453

)

Exchange differences on translation of foreign operations

 

 

 

(1,056,853

)

(7,543,788

)

12,419,968

 

(4,651,583

)

Items that will not be subsequently reclassified to loss and profit

 

 

 

480,641

 

221,413

 

(2,335,454

)

221,413

 

Revaluation of property, plant and equipment, net of tax, of JV and associates

 

 

 

301,235

 

 

(261,033

)

 

Revaluation of property, plant and equipment, net of tax

 

 

 

179,406

 

 

(2,074,421

)

 

Tax rate change over revaluation of property, plant and equipment

 

 

 

 

221,413

 

 

221,413

 

Total comprehensive income or (loss)

 

 

 

5,054,830

 

(7,559,037

)

25,049,340

 

(2,779,450

)

 

 

 

 

 

 

 

 

 

 

 

 

Profit for the period attributable to:

 

 

 

 

 

 

 

 

 

 

 

Equity holders of the parent

 

 

 

4,229,006

 

1,127,545

 

6,847,451

 

1,953,863

 

Non-controlling interests

 

 

 

3,337,547

 

2,964,529

 

4,318,359

 

2,761,310

 

 

 

 

 

7,566,553

 

4,092,074

 

11,165,810

 

4,715,173

 

Total comprehensive income / (loss) attributable to:

 

 

 

 

 

 

 

 

 

 

 

Equity holders of the parent

 

 

 

2,258,578

 

(6,184,443

)

16,505,763

 

(2,444,850

)

Non-controlling interests

 

 

 

2,796,252

 

(1,374,594

)

8,543,577

 

(334,600

)

 

 

 

 

5,054,830

 

(7,559,037

)

25,049,340

 

(2,779,450

)

 

The accompanying Notes are an integral part of these Unaudited interim condensed combined financial statements. Related party balances and transactions are disclosed in Note 12.

 

F-5


 

BIOCERES INC CROP BUSINESS & BIOCERES SEMILLAS S.A.

 

UNAUDITED INTERIM CONDENSED COMBINED STATEMENTS OF CHANGES IN EQUITY

For the six-month periods ended December 31, 2018 and 2017

 

(Amounts in USD)

 

 

 

Attributable to the equity holders of the parent

 

 

 

 

 

Description

 

Parent
company
investment
(Note 7.1)

 

Stock options

 

Retained results

 

Foreign currency
translation

 

Revaluation
of PP&E

 

Equity /
(deficit)
attributable to
owners of the
parent

 

Non-controlling
Interests

 

Total equity

 

06/30/2017

 

56,257,329

 

72,822

 

(15,110,050

)

(6,598,080

)

1,219,600

 

35,841,621

 

41,397,445

 

77,239,066

 

Parent company investment

 

195,119

 

 

 

 

 

195,119

 

 

195,119

 

Stock options

 

 

34,219

 

 

 

 

34,219

 

 

34,219

 

Profit of the period

 

 

 

1,127,545

 

 

 

1,127,545

 

2,964,529

 

4,092,074

 

Other comprehensive income or loss

 

 

 

 

 

(7,444,836

)

132,848

 

(7,311,988

)

(4,339,123

)

(11,651,111

)

12/31/2017

 

56,452,448

 

107,041

 

(13,982,505

)

(14,042,916

)

1,352,448

 

29,886,516

 

40,022,851

 

69,909,367

 

 

 

 

Attributable to the equity holders of the parent

 

 

 

 

 

Description

 

Parent
company
investment
(Note 7.1)

 

Stock options

 

Retained results

 

Foreign
currency
translation

 

Revaluation
of PP&E

 

Equity /
(deficit)
attributable to
owners of the
parent

 

Non-controlling
Interests

 

Total equity

 

06/30/2018

 

68,026,259

 

102,827

 

(26,149,583

)

(36,612,070

)

8,346,051

 

13,713,484

 

19,420,172

 

33,133,656

 

Adjustment of opening balance for the application of IAS 29

 

 

 

19,560,024

 

 

 

19,560,024

 

7,797,295

 

27,357,319

 

Parent company investment

 

(10,710,438

)

 

 

 

 

(10,710,438

)

 

(10,710,438

)

Stock options

 

 

8,921

 

 

 

 

8,921

 

 

8,921

 

Profit of the period

 

 

 

4,229,006

 

 

 

4,229,006

 

3,337,547

 

7,566,553

 

Other comprehensive income or loss

 

 

 

 

(2,258,813

)

288,385

 

(1,970,428

)

(541,295

)

(2,511,723

)

12/31/2018

 

57,315,821

 

111,748

 

(2,360,553

)

(38,870,883

)

8,634,436

 

24,830,569

 

30,013,719

 

54,844,288

 

 

The accompanying Notes are an integral part of these Unaudited interim condensed combined financial statements. Related parties’ balances and transactions are disclosed in Note 12.

 

F-6


 

BIOCERES INC CROP BUSINESS & BIOCERES SEMILLAS S.A.

 

UNAUDITED INTERIM CONDENSED COMBINED STATEMENTS OF CASH FLOWS

For the six-month periods ended December 31, 2018 and 2017

 

(Amounts in USD)

 

 

 

Notes

 

12/31/2018

 

12/31/2017

 

OPERATING ACTIVITIES

 

 

 

 

 

 

 

Profit for the period

 

 

 

7,566,553

 

4,092,074

 

 

 

 

 

 

 

 

 

Adjustments to reconcile loss to net cash flows

 

 

 

 

 

 

 

Income tax

 

 

 

5,050,749

 

(5,856,052

)

Depreciation of property, plant and equipment

 

5.6

 

1,084,831

 

1,159,959

 

Amortization of intangible assets

 

5.7

 

992,292

 

1,135,677

 

Share of profit or loss of joint ventures and associates

 

9

 

(812,593

)

72,238

 

Loss of control of subsidiaries

 

 

 

(10,591

)

 

Changes in fair value of financial assets

 

 

 

(77,700

)

204,977

 

Provisions for contingencies

 

6.4

 

6,159

 

 

Allowance for impairment of trade debtors

 

6.4

 

(12,223

)

1,468,316

 

Allowance for obsolescence

 

6.4

 

183,272

 

272,772

 

Puttable instruments interest

 

 

 

 

371,803

 

Stock options

 

 

 

8,921

 

34,219

 

Gain or loss on sale of equipment and intangible assets

 

 

 

23,809

 

25,872

 

Interests and exchange differences from borrowings

 

 

 

1,304,539

 

608,020

 

Other financial results accrued

 

 

 

786,961

 

(157,070

)

 

 

 

 

 

 

 

 

Working capital adjustments

 

 

 

 

 

 

 

Trade receivables

 

 

 

(29,262,197

)

(27,516,272

)

Other receivables

 

 

 

(3,668,494

)

(1,509,005

)

Income and minimum presumed income taxes

 

 

 

2,282,477

 

1,700,060

 

Inventories

 

 

 

(4,914,755

)

455,925

 

Trade and other payables

 

 

 

15,202,356

 

15,927,021

 

Employee benefits and social security

 

 

 

783,256

 

(1,492,611

)

Deferred revenue and advances from customers

 

 

 

226,723

 

28,174

 

Income and minimum presumed income taxes payable

 

 

 

 

(1,020,687

)

Government grants

 

 

 

(19,349

)

(39,981

)

Net cash flows used in operating activities

 

 

 

(3,275,004

)

(10,034,571

)

 

The accompanying Notes are an integral part of these Unaudited interim condensed combined financial statements. Related parties’ balances and transactions are disclosed in Note 12.

 

F-7


 

BIOCERES INC CROP BUSINESS & BIOCERES SEMILLAS S.A.

 

UNAUDITED INTERIM CONDENSED COMBINED STATEMENTS OF CASH FLOWS

For the six-month periods ended December 31, 2018 and 2017

 

(Amounts in USD)

 

 

 

Notes

 

12/31/2018

 

12/31/2017

 

INVESTMENT ACTIVITIES

 

 

 

 

 

 

 

Proceeds from sale of property, plant and equipment

 

 

 

1,576

 

113,677

 

Investment in joint ventures and associates and associates

 

9

 

(127,728

)

(763,744

)

Purchase of property, plant and equipment

 

5.6

 

(1,369,143

)

(1,774,343

)

Net loans cancelled from / (granted to) joint ventures

 

 

 

6,410,011

 

(2,090,101

)

Capitalized development expenditures

 

5.7

 

(47,552

)

(227,247

)

Purchase of intangible assets

 

5.7

 

(21,184

)

(354,338

)

Net cash flows provided by / (used in) investing activities

 

 

 

4,845,980

 

(5,096,096

)

 

 

 

 

 

 

 

 

FINANCING ACTIVITIES

 

 

 

 

 

 

 

Proceeds from borrowings

 

 

 

33,101,021

 

30,845,929

 

Repayment of borrowings and interest payments

 

 

 

(33,217,626

)

(16,352,594

)

(Decrease)/Increase bank overdraft and other short-term borrowings

 

 

 

581,680

 

471,658

 

Net cash flows provided by financing activities

 

 

 

465,075

 

14,964,993

 

 

 

 

 

 

 

 

 

Net increase / (decrease) in cash and cash equivalents

 

 

 

2,036,051

 

(165,674

)

Cash and cash equivalents as of beginning of the period

 

5.1

 

2,215,103

 

1,679,478

 

Cash and cash equivalents as of the end of the period

 

5.1

 

4,251,154

 

1,513,804

 

 

The accompanying Notes are an integral part of these Unaudited interim condensed combined financial statements. Related parties’ balances and transactions are disclosed in Note 12.

 

F-8


 

BIOCERES INC CROP BUSINESS & BIOCERES SEMILLAS S.A.

 

NOTES TO THE UNAUDITED INTERIM CONDENSED COMBINED FINANCIAL STATEMENTS

(Amounts in USD, except otherwise indicated)

 

Index

 

1. General information

2. Accounting standards and basis of preparation

2.1. Statement of compliance with IFRS as issued by IASB

2.2. Scope of combination

2.3. Authorization for the issue of the Unaudited Interim condensed combined financial Statements

2.4. Basis of measurement

2.5. Functional currency and presentation currency

2.6. Changes in accounting policies

2.7. Changes in accounting estimates and judgements

2.8. Changes in subsidiaries

3. New standards, amendments and interpretations issued by the IASB

4. Seasonality

5. Information about components of Unaudited Interim condensed combined statements of financial position

5.1. Cash and cash equivalents

5.2. Other financial assets

5.3. Trade receivables

5.4. Other receivables

5.5. Inventories

5.6. Property, plant and equipment

5.7. Intangible assets

5.8. Goodwill

5.9. Trade and other payables

5.10. Borrowings

5.11. Employee benefits and social security

5.12. Deferred revenue and advances from customers

5.13. Provisions

5.14. Financed payment - Acquisition of business

6. Information about components of combined statement of comprehensive income

6.1. Revenue

6.2. Cost of sales

6.3. R&D classified by nature

6.4. Expenses classified by nature and function

6.5. Finance income

 

F-9


 

BIOCERES INC CROP BUSINESS & BIOCERES SEMILLAS S.A.

 

NOTES TO THE UNAUDITED INTERIM CONDENSED COMBINED FINANCIAL STATEMENTS

(Amounts in USD, except otherwise indicated)

 

6.6. Finance costs

7. Information about combined components of equity

7.1. Parent company investment

7.2. Non-controlling interest

8. Cash flow information

9. Joint ventures and associates

10. Segment information

11. Financial instruments- risk management

12. Shareholders and other related parties’ balances and transactions

13. Key management personnel compensation

14. Contingencies, commitments and restrictions on the distribution of profits

15. Events occurring after the reporting period

 

F-10


 

BIOCERES INC CROP BUSINESS & BIOCERES SEMILLAS S.A.

 

NOTES TO THE UNAUDITED INTERIM CONDENSED COMBINED FINANCIAL STATEMENTS

(Amounts in USD, except otherwise indicated)

 

1.                   GENERAL INFORMATION

 

These combined financial statements consist of those of Bioceres Inc Crop Business (as defined below) on a carve-out basis and Bioceres Semillas S.A. (“Bioceres Semillas” and together with Bioceres Inc Crop Business, the “Group”).

 

On March 14, 2019, Union Acquisition Corp. (“Union”), a Cayman Islands exempted special purpose acquisition company listed on the New York Stock Exchange and Domestic filer for SEC purposes,  consummated the previously announced business combination pursuant to a share exchange agreement, dated as of November 8, 2018 (as amended, the “Exchange Agreement”) by and among Union and Bioceres, Inc., a company incorporated under the laws of Delaware, which converted into Bioceres LLC pursuant to the Reorganization (as defined below) on February 28, 2019.

 

See previous details of the business combination in the Combined financial statements as of June 30, 2018, June 30, 2017, December 31, 2016, for the year ended June 30, 2018, for the six-month transition period ended June 30, 2017 and for the years ended December 31, 2016 and 2015 (“Combined financial statements as of June 30, 2018”).

 

Prior to the consummation of the business combination on March 14, 2019, the following steps took place among Bioceres, Inc. and certain of its affiliates (collectively the “Reorganization”).

 

On February 13, 2019, Bioceres, Inc. formed a new subsidiary, BCS Holding Inc. (“BCS Holding”), and contributed its crop business net assets (consisting of certain assets and liabilities, the “Bioceres Inc Crop Business”) to BCS Holding in exchange for 100% equity interest in BCS Holding. On February 28, 2019, Bioceres, Inc. converted into Bioceres LLC, and on March 1, 2019, Bioceres S.A., a company organized under the laws of Argentina and our ultimate parent company (“Parent”), contributed all its equity interest in Bioceres Semillas (its direct majority owned subsidiary) to Bioceres LLC in exchange for additional equity interests in Bioceres LLC.

 

In addition, concurrently with the consummation of the business combination on March 14, 2019, the Rizobacter Call Option (as defined below) was exercised, pursuant to which the total indirect ownership of BCS Holding in Rizobacter increased to 80.00% of all outstanding stock of Rizobacter. On October 22, 2018, Parent, RASA Holding LLC, a Delaware limited liability company and a wholly owned subsidiary of Bioceres, Inc., now a wholly-owned subsidiary of BCS Holding (“RASA Holding”), and Pedro Enrique Mac Mullen, María Marta Mac Mullen and International Property Services Corp., as sellers (collectively, the “Grantors”) entered into an amended and restated option agreement (as may be amended from time to time, the “Rizobacter Call Option Agreement”), pursuant to which the Parent, RASA Holding or any of their nominated affiliates would have the option (the “Rizobacter Call Option”) to purchase from the Grantors all of their 11,916,000 shares of common stock of Rizobacter Argentina S.A., an Argentine corporation and a subsidiary of RASA Holding (“Rizobacter”), representing 29.99% of all outstanding common stock of Rizobacter. Consideration for the Rizobacter Call Option (net of prepayments) was in the form of UAC shares.

 

As a result of the business combination and the other transactions contemplated by the Exchange Agreement, as well as the Reorganization and exercise of the Rizobacter Call Option, Union became the holding company of BCS Holding, its subsidiaries and Bioceres Semillas. Upon the consummation of the business combination, Union changed its name to Bioceres Crop Solutions Corp and its fiscal year to June 30.

 

The Group is a fully-integrated agricultural biotechnology business with a leadership position in the South America region. It operates multiple technology platforms to develop and commercialize products that enhance crop productivity and expand feedstock applications in order to provide value to its customers around the world.

 

F-11


 

BIOCERES INC CROP BUSINESS & BIOCERES SEMILLAS S.A.

 

NOTES TO THE UNAUDITED INTERIM CONDENSED COMBINED FINANCIAL STATEMENTS

(Amounts in USD, except otherwise indicated)

 

Financial and economic situation

 

On February 26, 2019, the board of directors of Rizobacter held a meeting and approved the holding of a shareholder meeting on April 4, 2019, in which the shareholders will be asked to approve the issuance of non-convertible privately placed bonds, in an amount up to US$16 million. The bonds will be secured by certain pledge and mortgage agreements. It is expected that the proceeds therefrom will be used for working capital purposes.

 

To meet short-term debts, the Group could, if necessary, issue a new Corporate Bond up to US$40 million. This program is already authorized by the regulatory authorities of Argentina and could be allocated to the Group’s needs. In addition, the Group has revolving credit facilities up to an amount of USD 31.1 million with financial institutions, that jointly with the generation of resources from the business operations, allows the Group to meet its current financial obligations.

 

2.                   ACCOUNTING STANDARDS AND BASIS OF PREPARATION

 

2.1.                           Statement of compliance with IFRS as issued by IASB

 

These Unaudited interim condensed combined financial statements for the six-month period ended December 31, 2018 has been prepared in accordance with Accounting Standard IAS 34 Interim Financial Reporting.

 

These Unaudited interim condensed combined financial statements do not include all the notes of the type normally included in an annual financial statements. Accordingly, these unaudited interim condensed combined financial statements are to be read in conjunction with the Combined financial statements as of June 30, 2018.

 

2.2.                           Scope of combination

 

IFRS provides no guidelines for the preparation of combined financial statements, which are therefore subject to the rules given in International Accounting Standards (IAS) 8.12. This paragraph requires consideration of the most recent pronouncements of other standard-setting bodies, other financial reporting requirements and recognized industry practices. During the reporting periods of the Unaudited Interim condensed combined financial statements, the assets and liabilities forming the Group were under common control of Bioceres.

 

2.3.                           Authorization for the issue of the Unaudited interim condensed combined financial statements

 

These Unaudited interim condensed combined financial statements of the Group as of December 31, 2018, June 30, 2018 and for the six-month period ended December 31, 2018 and 2017 have been authorized by the Board of Directors of Bioceres S.A. at their meetings held on March 20, 2019.

 

2.4.                           Basis of measurement

 

The Unaudited interim condensed combined financial statements of the Group have been prepared using:

 

·                                Going Concern Basis of Accounting, considering the conclusion of the assessment made by the Group’s Management about the ability of the Group and its subsidiaries to continue as a going concern, in accordance with the requirements of paragraph 25 of IAS 1, “Presentation of Financial Statements”.

 

·                                Accrual Basis of Accounting (except for cash flows information). Under this basis of accounting, the effects of transactions and other events are recognized as they occur, even when there are no cash flows.

 

F-12


 

BIOCERES INC CROP BUSINESS & BIOCERES SEMILLAS S.A.

 

NOTES TO THE UNAUDITED INTERIM CONDENSED COMBINED FINANCIAL STATEMENTS

(Amounts in USD, except otherwise indicated)

 

2.5.                           Functional currency and presentation currency

 

a)                           Functional currency

 

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic market in which the entity operates (i.e., “the functional currency”).

 

IAS 29 “Financial reporting in hyperinflationary economies” requires that the financial statements of an entity whose functional currency is the currency of a hyperinflationary economy with high inflation, whether they are based on the historical cost method or the current cost method, be stated in terms of the measuring unit current at the closing date of the reporting period. For such purpose, the inflation produced from the acquisition date or the revaluation date, as applicable, must be computed in non-monetary items. The standard details a series of factors to be considered for concluding whether an economy is a hyperinflationary economy, including, but not limited to, a cumulative inflation rate over a three-year period that approaches or exceeds 100%. Inflation accumulated in three years, as of June 30, 2018, is over 100%. It is for this reason that, in accordance with IAS 29, the Argentine economy should be considered as high inflation since July 1, 2018. Consequently, the Group has applied IAS 29 to these financial statements.

 

In an inflationary period, any entity that maintains an excess of monetary assets over monetary liabilities, will lose purchasing power, and any entity that maintains an excess of monetary liabilities on monetary assets, will gain purchasing power, provided that such items are not subject to an adjustment mechanism.

 

Briefly, the restatement mechanism of IAS 29 establishes that monetary assets and liabilities will not be restated because they are already expressed in a current unit of measurement at the end of the reporting period. Assets and liabilities subject to adjustments based on specific agreements, will be adjusted according to that agreements. Non-monetary items measured at their current values at the end of the reporting period, such as the net realizable value or others, do not need to be restated. The remaining non-monetary assets and liabilities will be restated for a general price index. The loss or gain for the net monetary position will be included in the net result of the reporting period, revealing this information in a separate line item.

 

The inflation adjustment on the initial balances was calculated by means of conversion factor derived from the Argentine price indexes published by the National Institute of Statistics. The average index for the six-month period ended December 31, 2018, was 1.2724.

 

The comparative figures in these Unaudited interim condensed combined financial statements presented in a stable currency are not adjusted for subsequent changes in the price level or exchange rates. This resulted in an initial difference, arising on the adoption of hyperinflation accounting, between the closing equity of the previous year and the opening equity of the current year. The Company recognized this initial difference directly in equity.

 

b)                           Presentation currency

 

The Unaudited interim condensed combined financial statements of the Group are presented in USD, which is the presentation currency.

 

c)                            Foreign currency

 

Transactions entered into by Group entities in a currency other than their functional currency are recorded at the relevant exchange rates as of the date upon which such transactions occur. Foreign currency monetary assets and liabilities are translated at the prevailing exchanges rates as of the final day of each reporting period. Exchange differences arising on the retranslation of unsettled monetary assets and liabilities are recognized immediately in profit or loss, except for foreign currency borrowings qualifying as a hedge of a net investment in a foreign operation for which exchange differences are recognized in other comprehensive income and accumulated in the foreign exchange reserve along with the exchange differences arising on the retranslation of the foreign operation. Upon the disposal of a foreign operation, the cumulative exchange differences recognized in the foreign

 

F-13


 

BIOCERES INC CROP BUSINESS & BIOCERES SEMILLAS S.A.

 

NOTES TO THE UNAUDITED INTERIM CONDENSED COMBINED FINANCIAL STATEMENTS

(Amounts in USD, except otherwise indicated)

 

exchange reserve relating to such operation up to the date of disposal are transferred to the combined statement of profit or loss and other comprehensive income as part of the profit or loss taking place upon such disposal.

 

2.6.                           Changes in accounting policies

 

The accounting policies adopted in the preparation of this Unaudited interim condensed combined financial statements are consistent with those adopted for the preparation of the Combined financial statements as of June 30, 2018.

 

2.7.                           Changes in accounting estimates and judgments

 

There were no significant changes in accounting estimates and judgments with respect to the Combined financial statements as of June 30, 2018.

 

2.8.                           Changes in subsidiaries

 

In the period ended December 31, 2018, the participation of Rizobacter S.A. in Indrasa S.A. decreased by 35%, therefore the Group loss the control over this subsidiary.

 

3.                            NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS ISSUED BY THE IASB

 

The following new standards became applicable for the current reporting period and the Group had to change its accounting policies as a result of adopting the following standards:

 

IFRS 15 - Revenue from contracts with customers

 

The main changes are the following:

 

The standard introduces a new five-step model for recognizing revenue from contracts with customers:

 

1) Identifying the contract with the customer.

 

2) Identifying separate performance obligations in the contract.

 

3) Determining the transaction price.

 

4) Allocating the transaction price to separate performance obligations.

 

5) Recognizing revenue when the performance obligations are satisfied.

 

The Group has chosen a modified retrospective application of IFRS 15.

 

The impact of adopting IFRS 15 was not significant and therefore no cumulative effect upon adoption was recorded.

 

The standard and interpretations issued, but not yet in force at the date of issuance of these Unaudited Interim condensed combined financial statements, which are or may be applicable to the Group, are:

 

IFRS 16 — Leases.

 

IFRIC 23: Uncertainty over income tax treatments

 

The Group intends to adopt these standards and interpretations when they enter into force, except that the opposite is indicated.

 

F-14


 

BIOCERES INC CROP BUSINESS & BIOCERES SEMILLAS S.A.

 

NOTES TO THE UNAUDITED INTERIM CONDENSED COMBINED FINANCIAL STATEMENTS

(Amounts in USD, except otherwise indicated)

 

IFRS 16 - Leases

 

IFRS 16 was issued in January 2016. It will result in almost all leases being recognized on the balance sheet, as the distinction between operating and finance leases will be removed. Under the new standard, an asset (the right to use the leased item) and a financial liability to pay rentals are recognized. The only exceptions are short-term and low-value leases.

 

The accounting for lessors will not significantly change.

 

The standard will affect primarily the accounting for the Group’s operating leases. However, the Group has not yet assessed what adjustments, if any, are necessary due to the change in the definition of the lease term and the different treatment of variable lease payments and of extension and termination options. It is therefore not yet possible to estimate the amount of right-of-use assets and lease liabilities that will have to be recognized on adoption of the new standard and how this may affect the Group’s profit or loss and classification of cash flows going forward.

 

The new standard will be effective for financial years commencing on or after January 1, 2019. At this stage, the Group does not intend to adopt the standard before its effective date.

 

The Group is currently assessing the impact of the new disclosure requirements and currently it is not possible to estimate the potential effects to the Group.

 

IFRIC 23: Uncertainty over income tax treatments

 

On 7 June 2017, the IFRS Interpretations Committee (IFRS IC) issued IFRIC 23, which clarifies how the recognition and measurement requirements of IAS 12 Income taxes are applied where there is uncertainty over income tax treatments.

 

The interpretation specifically addresses: i) whether an entity considers uncertain tax treatments separately, ii) the assumptions an entity makes about the examination of tax treatments by taxation authorities, iii) how an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates and iv) how an entity considers changes in facts and circumstances

 

IFRIC 23 is effective for annual periods beginning on or after 1 January 2019. At this stage, the Group does not intend to adopt the standard before its effective date. The Group does not expect impacts due to the application of this interpretation.

 

4.         SEASONALITY

 

The Group revenues fluctuate depending on the timing of orders from our distributors and customers and on prevailing seed market prices, which influence the purchase decisions of growers, the end users of seed and integrated products, crop protection products and crop nutrition products. Given the cyclicality of crop planting and harvesting and South America’s planting and growing seasons, which vary from year to year, our business is highly seasonal. This results in substantial fluctuations in quarterly sales and profitability. Generally, the Group sales are concentrated in the third and fourth quarters of each calendar year, when demand for seed and integrated products, crop protection products and crop nutrition products increases as growers begin planting their fields. With seed and integrated products business, the Group contract with growers and seed suppliers based upon our anticipated market demand. Generally, in seed and integrated products business we stock the seed during the harvest season and ship from inventory throughout the year, with the objective of selling most of the inventory from the current year’s harvest before the next year’s, with crop protection and crop nutrition business following a similar cycle to the seed cycle. The impact of seasonality and the resulting fluctuations in quarterly results may be moderated as we achieve our international expansion plans for seed business in geographies with contrasting seasons and climates.

 

F-15


 

BIOCERES INC CROP BUSINESS & BIOCERES SEMILLAS S.A.

 

NOTES TO THE UNAUDITED INTERIM CONDENSED COMBINED FINANCIAL STATEMENTS

(Amounts in USD, except otherwise indicated)

 

5.         INFORMATION ABOUT COMPONENTS OF UNAUDITED INTERIM CONDENSED COMBINED STATEMENTS OF FINANCIAL POSITION

 

5.1.         Cash and cash equivalents

 

 

 

12/31/2018

 

06/30/2018

 

Cash and banks

 

4,251,154

 

2,215,103

 

 

 

4,251,154

 

2,215,103

 

 

5.2.         Other financial assets

 

 

 

12/31/2018

 

06/30/2018

 

Current

 

 

 

 

 

Other marketable securities

 

9,594

 

12,526

 

Restricted short-term deposit

 

4,557,812

 

4,538,321

 

 

 

4,567,406

 

4,550,847

 

 

 

 

12/31/2018

 

06/30/2018

 

Non-current

 

 

 

 

 

Shares of Bioceres S.A.

 

345,160

 

240,920

 

Other marketable securities

 

1,415

 

2,438

 

 

 

346,575

 

243,358

 

 

5.3.         Trade receivables

 

 

 

12/31/2018

 

06/30/2018

 

Trade debtors

 

58,257,231

 

44,641,053

 

Allowance for impairment of trade debtors

 

(2,727,937

)

(3,212,170

)

Shareholders and other related parties (Note 12)

 

670,723

 

571,216

 

Allowance for impairment of related parties (Note 12)

 

(29,230

)

(23,126

)

Allowance for return of goods

 

(757,979

)

(1,517,361

)

Trade debtors - Parent company (Note 12)

 

348,734

 

361,606

 

Trade debtors - Joint ventures and associates (Note 12)

 

759,407

 

209,039

 

Discounted and deferred checks

 

25,599,822

 

11,858,170

 

 

 

82,120,771

 

52,888,427

 

 

F-16


 

BIOCERES INC CROP BUSINESS & BIOCERES SEMILLAS S.A.

 

NOTES TO THE UNAUDITED INTERIM CONDENSED COMBINED FINANCIAL STATEMENTS

(Amounts in USD, except otherwise indicated)

 

5.4.         Other receivables

 

 

 

12/31/2018

 

06/30/2018

 

Current

 

 

 

 

 

Taxes

 

389,091

 

664,926

 

Other receivables - Shareholders and other related parties (Note 12)

 

4,001

 

119,677

 

Other receivables - Parent Company (Note 12)

 

643,075

 

103,251

 

Other receivables - Joint ventures and associates (Note 12)

 

66,948

 

1,962,459

 

Prepayments to suppliers

 

3,157,534

 

516,742

 

Reimbursements over exports

 

362,480

 

362,815

 

Loans receivable

 

 

1,360

 

Miscellaneous

 

461,405

 

508,975

 

 

 

5,084,534

 

4,240,205

 

 

 

 

12/31/2018

 

06/30/2018

 

Non-Current

 

 

 

 

 

Taxes

 

117,022

 

295,924

 

Reimbursements over exports

 

547,645

 

346,575

 

Other receivables - Joint ventures and associates (Note 12)

 

250,000

 

4,337,008

 

Miscellaneous

 

494,967

 

 

 

 

1,409,634

 

4,979,507

 

 

5.5.         Inventories

 

 

 

12/31/2018

 

06/30/2018

 

Agrochemicals

 

17,146

 

94,486

 

Seeds and grains

 

276,740

 

514,000

 

Microbiological resale products

 

9,889,535

 

8,389,191

 

Microbiological products produced

 

9,437,870

 

6,383,263

 

Goods in transit

 

1,793,967

 

776,869

 

Supplies

 

3,463,819

 

3,978,934

 

Allowance for obsolescence

 

(781,593

)

(770,742

)

 

 

24,097,484

 

19,366,001

 

 

5.6.         Property, plant and equipment

 

Property, plant and equipment as of December 31, 2018 and June 30, 2018 included the following:

 

 

 

12/31/2018

 

06/30/2018

 

Gross carrying amount

 

54,173,299

 

44,764,394

 

Accumulated depreciation

 

(11,469,924

)

(4,587,248

)

Net carrying amount

 

42,703,375

 

40,177,146

 

 

F-17


 

BIOCERES INC CROP BUSINESS & BIOCERES SEMILLAS S.A.

 

NOTES TO THE UNAUDITED INTERIM CONDENSED COMBINED FINANCIAL STATEMENTS

(Amounts in USD, except otherwise indicated)

 

1.   Net carrying amount for each class of assets is as follows:

 

Class

 

Net carrying
amount
12/31/2018

 

Net carrying
amount
06/30/2018

 

Office equipment

 

210,778

 

194,819

 

Vehicles

 

2,033,899

 

1,099,603

 

Equipment and computer software

 

106,611

 

212,236

 

Fixtures and fittings

 

4,290,843

 

3,508,083

 

Machinery and equipment

 

6,107,530

 

4,466,293

 

Land and buildings

 

29,782,152

 

30,513,273

 

Buildings in progress

 

171,562

 

182,839

 

Total

 

42,703,375

 

40,177,146

 

 

2.   Gross carrying amount as of December 31, 2018 is as follows:

 

 

 

Gross carrying amount

 

Class

 

As of the
beginning
of period

 

Adjustment
of opening
net book
amount for
application
of IAS 29

 

Additions

 

Transfers

 

Disposals

 

Foreign
currency
translation

 

Revaluation

 

As of the
end of
period

 

Office equipment

 

243,948

 

334,496

 

19,188

 

 

(7,818

)

(14,607

)

 

575,207

 

Vehicles

 

1,660,294

 

1,052,861

 

905,231

 

 

 

(10,956

)

 

3,607,430

 

Equipment and computer software

 

419,638

 

417,173

 

14,417

 

 

(10,528

)

(12,817

)

 

827,883

 

Fixtures and fittings

 

3,826,665

 

1,913,979

 

612

 

198,756

 

 

(277,278

)

 

5,662,734

 

Machinery and equipment

 

5,404,029

 

3,982,367

 

71,506

 

 

(22,066

)

(49,321

)

 

9,386,515

 

Land and buildings

 

33,026,981

 

1,475,392

 

227,293

 

15,530

 

 

(862,138

)

58,910

 

33,941,968

 

Buildings in progress

 

182,839

 

78,750

 

130,896

 

(214,286

)

 

(6,637

)

 

171,562

 

Total

 

44,764,394

 

9,255,018

 

1,369,143

 

 

(40,412

)

(1,233,754

)

58,910

 

54,173,299

 

 

3.   Accumulated depreciation as of December 31, 2018 is as follows:

 

 

 

Depreciation

 

Class

 

Accumulated
as of the
beginning of
period

 

Adjustment
of opening
net book
amount for
application
of IAS 29

 

Disposals

 

Of the
period

 

Foreign
currency
translation

 

Revaluation

 

Accumulated
as of the end
of period

 

Office equipment

 

49,129

 

309,342

 

(3,688

)

16,539

 

(6,893

)

 

364,429

 

Vehicles

 

560,691

 

765,972

 

 

254,987

 

(8,119

)

 

1,573,531

 

Equipment and computer software

 

207,402

 

491,761

 

 

30,777

 

(8,668

)

 

721,272

 

Fixtures and fittings

 

318,582

 

912,661

 

 

166,913

 

(26,265

)

 

1,371,891

 

Machinery and equipment

 

937,736

 

2,115,831

 

(11,339

)

311,004

 

(74,247

)

 

3,278,985

 

Land and buildings

 

2,513,708

 

1,377,613

 

 

304,611

 

(98,093

)

61,977

 

4,159,816

 

Total

 

4,587,248

 

5,973,180

 

(15,027

)

1,084,831

 

(222,285

)

61,977

 

11,469,924

 

 

F-18


 

BIOCERES INC CROP BUSINESS & BIOCERES SEMILLAS S.A.

 

NOTES TO THE UNAUDITED INTERIM CONDENSED COMBINED FINANCIAL STATEMENTS

(Amounts in USD, except otherwise indicated)

 

4.   Gross carrying amount as of December 31, 2017 is as follows:

 

 

 

Gross carrying amount

 

Class

 

As of the
beginning
of period

 

Additions

 

Transfers

 

Disposals

 

Foreign
currency
translation

 

Revaluation

 

As of the
end of
period

 

Office equipment

 

252,220

 

23,580

 

 

(4,264

)

(22,008

)

 

249,528

 

Vehicles

 

2,223,102

 

264,490

 

 

(100,774

)

(189,974

)

 

2,196,844

 

Equipment and computer software

 

426,530

 

134,315

 

3,764

 

 

(48,863

)

 

515,746

 

Fixtures and fittings

 

4,665,074

 

282

 

223,823

 

 

(516,015

)

 

4,373,164

 

Machinery and equipment

 

9,177,077

 

213,944

 

 

(25,739

)

(1,023,851

)

 

8,341,431

 

Land and buildings

 

30,931,226

 

50,845

 

115,916

 

 

(3,315,985

)

 

27,782,002

 

Buildings in progress

 

870,469

 

1,086,887

 

(343,503

)

(46,288

)

(129,431

)

 

1,438,134

 

Total

 

48,545,698

 

1,774,343

 

 

(177,065

)

(5,246,127

)

 

44,896,849

 

 

5.   Accumulated depreciation as of December 31, 2017 is as follows:

 

 

 

Depreciation

 

Class

 

Accumulated
as of the
beginning of
period

 

Disposals

 

Of the
period

 

Foreign
currency
translation

 

Revaluation

 

Accumulated
as of the end
of period

 

Office equipment

 

31,522

 

 

16,751

 

(3,406

)

 

44,867

 

Vehicles

 

373,216

 

(37,516

)

265,531

 

(37,606

)

 

563,625

 

Equipment and computer software

 

118,169

 

 

87,997

 

(13,554

)

 

192,612

 

Fixtures and fittings

 

204,171

 

 

123,385

 

(28,302

)

 

299,254

 

Machinery and equipment

 

771,636

 

 

387,680

 

(127,913

)

 

1,031,403

 

Land and buildings

 

828,109

 

 

278,615

 

(105,598

)

 

1,001,126

 

Total

 

2,326,823

 

(37,516

)

1,159,959

 

(316,379

)

 

3,132,887

 

 

The depreciation charge is included in Notes 6.3 and 6.4.

 

Revaluation of property, plant and equipment

 

At a minimum, the Group updates their assessment of the fair value of its land and buildings at the end of each reporting year (after the revaluation policy was adopted), taking into account the most recent independent valuations and market data. Valuations were performed at September 30, 2018. Management determined the property, plant and equipment’s value within a range of reasonable fair value estimates.

 

All resulting fair value estimates for properties are included in level 3.

 

F-19


 

BIOCERES INC CROP BUSINESS & BIOCERES SEMILLAS S.A.

 

NOTES TO THE UNAUDITED INTERIM CONDENSED COMBINED FINANCIAL STATEMENTS

(Amounts in USD, except otherwise indicated)

 

5.7.              Intangible assets

 

Intangible assets as of December 31, 2018 and June 30, 2018 included the following:

 

 

 

12/31/2018

 

06/30/2018

 

 

 

 

 

 

 

Gross carrying amount

 

39,778,369

 

29,155,315

 

Accumulated amortization

 

(4,596,767

)

(2,497,970

)

Net carrying amount

 

35,181,602

 

26,657,345

 

 

1.                        Net carrying amount of each class of intangible assets is as follows:

 

Class

 

Net carrying
amount
12/31/2018

 

Net Carrying
amount
06/30/2018

 

Seed and integrated products

 

 

 

 

 

Soybean HB4

 

5,437,806

 

4,927,853

 

Crop nutrition

 

 

 

 

 

Microbiology products

 

2,581,417

 

2,122,484

 

Other intangible assets

 

 

 

 

 

Trademarks and patents

 

7,720,008

 

5,574,682

 

Software

 

1,012,825

 

949,310

 

Customer loyalty

 

18,429,546

 

13,083,016

 

Total

 

35,181,602

 

26,657,345

 

 

2.                        Gross carrying amount as of December 31, 2018 is as follows:

 

 

 

Gross carrying amount

 

Class

 

As of the
beginning of
period

 

Adjustment
of opening
net book
amount for
application
of IAS 29

 

Additions

 

Disposals

 

Foreign
currency
translation

 

As of the
end of
period

 

Seed and integrated products

 

 

 

 

 

 

 

 

 

 

 

 

 

Soybean HB4

 

4,927,853

 

 

509,953

 

 

 

5,437,806

 

Crop nutrition

 

 

 

 

 

 

 

 

 

 

 

 

 

Microbiology products

 

2,505,864

 

841,714

 

47,552

 

 

(84,926

)

3,310,204

 

Other intangible assets

 

 

 

 

 

 

 

 

 

 

 

 

 

Trademarks and patents

 

6,278,706

 

2,986,739

 

21,184

 

 

(256,245

)

9,030,384

 

Software

 

1,444,603

 

438,726

 

 

 

(16,471

)

1,866,858

 

Customer loyalty

 

13,998,289

 

6,658,894

 

 

 

(524,066

)

20,133,117

 

Total

 

29,155,315

 

10,926,073

 

578,689

 

 

(881,708

)

39,778,369

 

 

F-20


 

BIOCERES INC CROP BUSINESS & BIOCERES SEMILLAS S.A.

 

NOTES TO THE UNAUDITED INTERIM CONDENSED COMBINED FINANCIAL STATEMENTS

(Amounts in USD, except otherwise indicated)

 

3.                        Accumulated amortization as of December 31, 2018 is as follows:

 

 

 

Amortization

 

Class

 

Accumulated
as of
beginning of
period

 

Adjustment
of opening
net book
amount for
application of
IAS 29

 

Disposals

 

Of the period

 

Foreign
currency
translation

 

Accumulated
as of the end
of period

 

Crop nutrition

 

 

 

 

 

 

 

 

 

 

 

 

 

Microbiology products

 

383,380

 

202,791

 

 

157,484

 

(14,868

)

728,787

 

Other intangible assets

 

 

 

 

 

 

 

 

 

 

 

 

 

Trademarks and patents

 

704,024

 

334,919

 

 

297,813

 

(26,380

)

1,310,376

 

Software

 

495,293

 

227,264

 

 

149,820

 

(18,344

)

854,033

 

Customer loyalty

 

915,273

 

435,389

 

 

387,175

 

(34,266

)

1,703,571

 

Total

 

2,497,970

 

1,200,363

 

 

992,292

 

(93,858

)

4,596,767

 

 

4.                        Gross carrying amount as of December 31, 2017 is as follows:

 

 

 

Gross carrying amount

 

Class

 

As of the
beginning of
period

 

Additions

 

Disposals

 

Foreign
currency
translation

 

As of the end
of period

 

Seed and integrated products

 

 

 

 

 

 

 

 

 

 

 

Soybean HB4

 

3,111,253

 

1,191,649

 

 

 

4,302,902

 

Crop nutrition

 

 

 

 

 

 

 

 

 

 

 

Microbiology products

 

3,782,238

 

227,247

 

 

(424,253

)

3,585,232

 

Other intangible assets

 

 

 

 

 

 

 

 

 

 

 

Trademarks and patents

 

10,906,317

 

 

 

(1,183,997

)

9,722,320

 

Software

 

1,787,925

 

354,338

 

 

(215,488

)

1,926,775

 

Customer loyalty

 

24,315,484

 

 

 

(2,639,549

)

21,675,935

 

Total

 

43,903,217

 

1,773,234

 

 

(4,463,287

)

41,213,164

 

 

F-21


 

BIOCERES INC CROP BUSINESS & BIOCERES SEMILLAS S.A.

 

NOTES TO THE UNAUDITED INTERIM CONDENSED COMBINED FINANCIAL STATEMENTS

(Amounts in USD, except otherwise indicated)

 

5.                            Accumulated amortization as of December 31, 2017 is as follows:

 

 

 

Amortization

 

Class

 

Accumulated
as of
beginning of
period

 

Disposals

 

Of the period

 

Foreign
currency
translation

 

Accumulated
as of the end
of period

 

Crop nutrition

 

 

 

 

 

 

 

 

 

 

 

Microbiology products

 

290,969

 

 

177,896

 

(42,345

)

426,520

 

Other intangible assets

 

 

 

 

 

 

 

 

 

 

 

Trademarks and patents

 

503,553

 

 

341,276

 

(75,307

)

769,522

 

Software

 

395,156

 

 

172,824

 

(53,333

)

514,647

 

Customer loyalty

 

654,648

 

 

443,681

 

(97,901

)

1,000,428

 

Total

 

1,844,326

 

 

1,135,677

 

(268,886

)

2,711,117

 

 

The amortization charge is included in Notes 6.3 and 6.4.

 

5.8.                  Goodwill

 

The variations in goodwill occurred during the periods combined correspond to the restatement as a result of inflation adjustment and conversion to presentation currency. There have been no goodwill impairment indicators.

 

Carrying amount of goodwill as of December 31, 2018 and June 30, 2018 is as follows:

 

 

 

12/31/2018

 

06/30/2018

 

 

 

 

 

 

 

Rizobacter

 

21,556,423

 

14,438,027

 

Total

 

21,556,423

 

14,438,027

 

 

5.9.                  Trade and other payables

 

 

 

12/31/2018

 

06/30/2018

 

 

 

 

 

 

 

Trade creditors

 

32,940,441

 

22,222,872

 

Shareholders and other related parties (Note 12)

 

609,405

 

365,994

 

Trade creditors - Joint ventures and associates (Note 12)

 

5,921,185

 

3,493,113

 

Taxes

 

3,197,358

 

35,391

 

Miscellaneous

 

242,797

 

1,591,460

 

 

 

42,911,186

 

27,708,830

 

 

F-22


 

BIOCERES INC CROP BUSINESS & BIOCERES SEMILLAS S.A.

 

NOTES TO THE UNAUDITED INTERIM CONDENSED COMBINED FINANCIAL STATEMENTS

(Amounts in USD, except otherwise indicated)

 

5.10.           Borrowings

 

 

 

12/31/2018

 

06/30/2018

 

Current

 

 

 

 

 

Bank overdraft

 

628,191

 

532,912

 

Bank borrowings

 

49,773,964

 

44,061,555

 

Corporate bonds

 

 

3,262,924

 

BAF Loans

 

17,001,531

 

5,112,222

 

Discount checks

 

15,744,315

 

10,243,204

 

Loans payables-Parent company (Note 12)

 

6,554,512

 

1,816,084

 

Finance lease

 

221,826

 

280,027

 

 

 

89,924,339

 

65,308,928

 

Non-current

 

 

 

 

 

Bank borrowings

 

17,756,408

 

25,253,940

 

Finance lease

 

269,989

 

454,265

 

 

 

18,026,397

 

25,708,205

 

 

On August 31, 2018, we paid the last capital and interest service of Corporate bonds. After these payments there are no more outstanding Corporate bonds corresponding to the regime of public offering.

 

The carrying value of some borrowings as of December 31, 2018 measured at amortized cost differ from their fair value.  The following fair values measured are based on discounted cash flows (Level 3) due to the use of unobservable inputs, including own credit risk.

 

 

 

12/31/2018

 

 

 

Amortized cost

 

Fair value

 

Current

 

 

 

 

 

Bank borrowings

 

49,773,964

 

48,305,162

 

Discount checks

 

15,744,315

 

13,136,316

 

Non-current

 

 

 

 

 

Bank borrowings

 

17,756,408

 

15,311,874

 

 

The group has met the capital and interest installments whose maturity was effective in the six-month period ended December 31, 2018.

 

Covenant compliance is required to be measured annually.

 

5.11.           Employee benefits and social security

 

 

 

12/31/2018

 

06/30/2018

 

 

 

 

 

 

 

Salaries and social security

 

3,555,827

 

3,146,583

 

Staff incentives and vacations

 

1,639,142

 

1,265,130

 

 

 

5,194,969

 

4,411,713

 

 

F-23


 

BIOCERES INC CROP BUSINESS & BIOCERES SEMILLAS S.A.

 

NOTES TO THE UNAUDITED INTERIM CONDENSED COMBINED FINANCIAL STATEMENTS

(Amounts in USD, except otherwise indicated)

 

5.12.       Deferred revenue and advances from customers

 

 

 

12/31/2018

 

06/30/2018

 

 

 

 

 

 

 

Advances from customers

 

1,234,024

 

1,007,301

 

 

 

1,234,024

 

1,007,301

 

 

5.13.       Provisions

 

 

 

12/31/2018

 

06/30/2018

 

 

 

 

 

 

 

Provisions for contingencies

 

502,199

 

845,486

 

 

 

502,199

 

845,486

 

 

There are no expected reimbursements related to the provisions.

 

5.14.       Financed payment — Acquisition of business

 

 

 

12/31/2018

 

06/30/2018

 

Current

 

 

 

 

 

Purchase option

 

13,720,000

 

14,605,469

 

Financed payment to sellers

 

5,618,121

 

5,618,121

 

 

 

19,338,121

 

20,223,590

 

Non-current

 

 

 

 

 

Financed payment to sellers

 

 

2,651,019

 

 

 

 

2,651,019

 

 

As of the date of issuance of these Unaudited interim condensed combined financial statements, the three installments that were due in October 2017, April 2018 and October 2018, have been fully paid for a value of USD 3.5 million, USD 2.9 million and USD 2.9 million, respectively.

 

Purchase option

 

On October 22, 2018, the Parent, RASA Holding, and the Grantors entered into the Rizobacter Call Option Agreement, pursuant to which the Beneficiaries would have the option to purchase from the Grantors all of their Rizobacter Stock, representing 29.99% of all outstanding common stock of Rizobacter. On March 14, 2019, concurrently with the closing of business combination, the Rizobacter Call Option was exercised, pursuant to which the total indirect ownership of BCS Holding in Rizobacter increased to 80.00% of all outstanding stock of Rizobacter. The consideration for the Rizobacter Call Option was USD 1,265,000 in cash and USD 48,715,000 in Union shares. See Note 1.

 

6.                        INFORMATION ABOUT COMPONENTS OF COMBINED STATEMENT OF COMPREHENSIVE INCOME

 

6.1.              Revenue

 

 

 

12/31/2018

 

12/31/2017

 

 

 

 

 

 

 

Sale of goods

 

91,528,663

 

80,744,811

 

Royalties

 

518,933

 

150,335

 

Rendering of services

 

10,910

 

83,424

 

 

 

92,058,506

 

80,978,570

 

 

F-24


 

BIOCERES INC CROP BUSINESS & BIOCERES SEMILLAS S.A.

 

NOTES TO THE UNAUDITED INTERIM CONDENSED COMBINED FINANCIAL STATEMENTS

(Amounts in USD, except otherwise indicated)

 

Transactions of sales of goods and services with joint ventures and with shareholders and other related parties are reported in Note 12.

 

6.2.              Cost of sales

 

Item

 

12/31/2018

 

12/31/2017

 

 

 

 

 

 

 

Inventory as of the beginning of the period

 

19,366,001

 

31,338,034

 

Adjustment of opening net book amount for the application of IAS 29

 

4,273,416

 

 

Purchases of the period

 

45,121,088

 

44,448,194

 

Production costs

 

5,119,487

 

6,366,253

 

Foreign currency translation

 

(2,129,829

)

(9,196,266

)

Subtotal

 

71,750,163

 

72,956,215

 

Inventory as of the end of the period

 

(24,097,484

)

(25,089,935

)

Cost of sales

 

47,652,679

 

47,866,280

 

 

6.3.              R&D classified by nature

 

Item

 

Research and
development
expenses
12/31/2018

 

Research and
development
expenses
12/31/2017

 

 

 

 

 

 

 

Amortization intangible assets

 

118,256

 

519,124

 

Analysis and storage

 

 

10,331

 

Import and export expenses

 

7,947

 

11,195

 

Depreciation property, plant and equipment

 

64,988

 

157,117

 

Freight and haulage

 

1,674

 

487

 

Employee benefits and social securities

 

268,830

 

627,975

 

Taxes

 

1,564

 

2,956

 

Maintenance

 

22,305

 

16,953

 

Energy and fuel

 

42,733

 

52,769

 

Supplies and materials

 

352,130

 

258,975

 

Mobility and travel

 

18,920

 

51,064

 

Stock options based incentive

 

8,921

 

34,219

 

Professional fees and outsourced services

 

24,640

 

275,682

 

Office supplies

 

 

15,187

 

Insurance

 

4,369

 

12,973

 

Miscellaneous

 

5,415

 

19,791

 

Total

 

942,692

 

2,066,798

 

 

 

 

12/31/2018

 

12/31/2017

 

 

 

 

 

 

 

R&D Capitalized (Note 5.7)

 

557,505

 

1,418,896

 

R&D profit and loss

 

942,692

 

2,066,798

 

Total

 

1,500,197

 

3,485,694

 

% of total revenue

 

1.63

%

4.30

%

 

F-25


 

BIOCERES INC CROP BUSINESS & BIOCERES SEMILLAS S.A.

 

NOTES TO THE UNAUDITED INTERIM CONDENSED COMBINED FINANCIAL STATEMENTS

(Amounts in USD, except otherwise indicated)

 

6.4.              Expenses classified by nature and function

 

Item

 

Production
costs

 

Selling,
general and
administrative
expenses

 

Total
12/31/2018