UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO SECTION 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
Dated March 6, 2020
Commission File Number: 001-38405
BIOCERES CROP SOLUTIONS CORP.
(Translation of registrant's name into English)
Ocampo 210 bis, Predio CCT, Rosario
Province of Santa Fe, Argentina (Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-Fx Form 40-F¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
EXPLANATORY NOTE | |
The following exhibit is filed as part of this Form 6-K: | |
Exhibit List | |
EXHIBIT | |
NO. | DESCRIPTION |
99.1 Bioceres Crop Solutions Corp. consolidated financial statements as of December 31, 2019, June 30, 2019 and for the six-month periods ended December 31, 2019 and 2018.
1
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, Bioceres Crop Solutions Corp. has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Bioceres Crop Solutions Corp. | ||
(Registrant) | ||
Date: March 6, 2020 | By : | /s/ Federico Trucco |
Name: Federico Trucco | ||
Title: Chief Executive Officer | ||
2 |
Exhibit 99.1
BIOCERES CROP SOLUTIONS CORP.
Unaudited interim condensed consolidated financial statements as of December 31, 2019, June 30, 2019 and for the six-month periods ended December 31, 2019 and 2018.
BIOCERES CROP SOLUTIONS CORP. | |
INDEX | |
Unaudited interim condensed consolidated financial statements as of December 31, 2019, June 30, 2019 and for the six-month periods ended | |
December 31, 2019 and 2018. | |
Unaudited interim condensed consolidated statements of financial position as of December 31, 2019 and June 30, 2019 | F-3 |
Unaudited interim condensed consolidated statements of comprehensive income for the six-month and three-month periods ended December 31, 2019 and | |
2018 | F-5 |
Unaudited interim condensed consolidated statements of changes in equity for the six-month periods ended December 31, 2019 and 2018 | F-6 |
Unaudited interim condensed consolidated statements of cash flows for the six-month periods ended December 31, 2019 and 2018 | F-8 |
Notes to the unaudited interim condensed consolidated financial statements | F-10 |
F-2 |
BIOCERES CROP SOLUTIONS CORP.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF
FINANCIAL POSITION
As of December 31, 2019, and June 30, 2019
(Amounts in US Dollars)
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Other financial assets
Trade receivables
Other receivables
Income and minimum presumed income taxes recoverable Inventories
Biological assets
Total current assets
NON-CURRENT ASSETS
Other financial assets
Other receivables
Income and minimum presumed income taxes recoverable Deferred tax assets
Investments in joint ventures and associates
Property, plant and equipment
Intangible assets
Goodwill
Right-of-use leased asset
Total non-current assets
Total assets
Notes | 12/31/2019 | 06/30/2019 |
5.1 | 10,568,858 | 3,450,873 |
5.2 | 5,018,453 | 4,683,508 |
5.3 | 77,760,561 | 59,236,377 |
5.4 | 3,731,810 | 1,981,829 |
80,039 | 1,263,795 | |
5.5 | 30,779,336 | 27,322,003 |
5.6 | 1,128,346 | 270,579 |
129,067,403 | 98,208,964 | |
5.2 | 334,615 | 376,413 |
5.4 | 1,752,131 | 1,560,310 |
5,600 | 1,184 | |
1,987,574 | 3,743,709 | |
11 | 24,270,981 | 25,321,028 |
5.7 | 41,586,032 | 43,834,548 |
5.8 | 35,298,224 | 39,616,426 |
5.9 | 26,468,268 | 29,804,715 |
17 | 807,833 | - |
132,511,258 | 144,258,333 | |
261,578,661 | 242,467,297 |
The accompanying Notes are an integral part of these unaudited interim condensed consolidated financial statements. Related parties' balances and transactions are disclosed in Note 14.
F-3
BIOCERES CROP SOLUTIONS CORP.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF
FINANCIAL POSITION
As of December 31, 2019, and June 30, 2019
(Amounts in US Dollars)
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Borrowings
Employee benefits and social security Deferred revenue and advances from customers Income and minimum presumed income taxes payable Government grants
Financed payment - Acquisition of business Lease liability
Total current liabilities
NON-CURRENT LIABILITIES
Trade and other payables
Borrowings
Employee benefits and social security
Government grants
Due to joint ventures and associates
Deferred tax liabilities
Provisions
Private warrants
Lease liability
Total non-current liabilities
Total liabilities
EQUITY
Equity attributable to owners of the parent Non-controlling interests
Total equity
Total equity and liabilities
Notes | 12/31/2019 | 06/30/2019 |
5.10 | 55,356,154 | 40,578,494 |
5.11 | 71,083,500 | 66,477,209 |
5.12 | 4,662,697 | 5,357,218 |
5.13 | 5,749,476 | 1,074,463 |
2,109,114 | 142,028 | |
1,495 | 2,110 | |
5.14 | - | 2,826,611 |
17 | 657,633 | - |
139,620,069 | 116,458,133 | |
5.10 | 452,654 | 452,654 |
5.11 | 40,082,075 | 37,079,521 |
5.12 | 200,459 | - |
4,243 | 8,098 | |
11 | 1,704,901 | 1,970,903 |
16,328,476 | 21,101,871 | |
5.15 | 287,325 | 439,740 |
5.16 | 1,302,524 | 2,861,511 |
17 | 528,179 | - |
60,890,836 | 63,914,298 | |
200,510,905 | 180,372,431 | |
46,741,879 | 47,301,863 | |
14,325,877 | 14,793,003 | |
61,067,756 | 62,094,866 | |
261,578,661 | 242,467,297 |
The accompanying Notes are an integral part of these unaudited interim condensed consolidated financial statements. Related parties' balances and transactions are disclosed in Note 14.
F-4
BIOCERES CROP SOLUTIONS CORP.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME
For the six-month and three-month periods ended December 31, 2019 and 2018
(Amounts in US Dollars)
Six-month period ended | Three-month period ended |
Revenues
Government grants
Initial recognition and changes in the fair value of biological assets
Cost of sales
Research and development expenses
Selling, general and administrative expenses
Share of profit or loss of joint ventures and associates Other incomes or expenses, net
Operating profit
Finance results
Profit before income tax
Income tax
Profit for the period
Other comprehensive (loss) / income
Items that may be subsequently reclassified to profit and loss Exchange differences on translation of foreign operations from joint ventures
Exchange differences on translation of foreign operations
Items that will not be subsequently reclassified to loss and profit Revaluation of property, plant and equipment, net of tax, of JV and
associates 1
Revaluation of property, plant and equipment, net of tax 2
Total comprehensive (loss) / income
Income for the period attributable to:
Equity holders of the parent
Non-controlling interests
Total comprehensive (loss) / income attributable to:
Equity holders of the parent
Non-controlling interests
Profit per share
Basic and dilutive income attributable to ordinary equity holders of the parent (3)
Notes | 12/31/2019 | 12/31/2018 | 12/31/2019 | 12/31/2018 |
6.1 | 98,502,367 | 92,058,506 | 62,272,547 | 62,452,761 |
24,236 | 12,960 | 2,398 | 6,481 | |
719,343 | - | 719,343 | - | |
6.2 | (53,307,802) | (47,652,679) | (32,962,728) | (33,153,669) |
6.3 | (2,127,352) | (1,094,157) | (923,613) | (45,665) |
6.4 | (19,182,319) | (16,662,087) | (10,497,408) | (10,581,602) |
11 | 1,298,505 | 812,593 | 1,240,958 | 732,437 |
(181,566) | (298,562) | (286,534) | (400,173) | |
25,745,412 | 27,176,574 | 19,564,963 | 19,010,570 | |
6.5 | (19,868,676) | (14,559,272) | (3,471,629) | (823,618) |
5,876,736 | 12,617,302 | 16,093,334 | 18,186,952 | |
7 | (1,204,655) | (5,050,749) | (3,443,508) | (7,021,142) |
4,672,081 | 7,566,553 | 12,649,826 | 11,165,810 | |
(7,566,525) | (2,511,723) | 5,834,121 | 13,883,530 | |
(10,309,083) | (2,992,364) | 7,397,362 | 16,218,984 | |
(2,688,252) | (1,813,351) | 1,646,918 | 3,921,176 | |
(7,620,831) | (1,179,013) | 5,750,444 | 12,297,808 | |
2,742,558 | 480,641 | (1,563,241) | (2,335,454) | |
355,702 | 301,235 | (206,019) | (261,033) | |
2,386,856 | 179,406 | (1,357,222) | (2,074,421) | |
(2,894,444) | 5,054,830 | 18,483,947 | 25,049,340 | |
4,264,504 | 4,229,006 | 11,314,881 | 6,847,451 | |
407,577 | 3,337,547 | 1,334,945 | 4,318,359 | |
4,672,081 | 7,566,553 | 12,649,826 | 11,165,810 | |
(2,427,318) | 2,258,578 | 16,286,073 | 16,505,763 | |
(467,126) | 2,796,252 | 2,197,874 | 8,543,577 | |
(2,894,444) | 5,054,830 | 18,483,947 | 25,049,340 | |
8 | 0.118 | 0.117 | 0.313 | 0.190 |
- The tax effect of the revaluation of property, plant and equipment of JV and associates was $118,567 and $90,371 for the six-month periods ended December 31, 2019 and 2018, respectively.
- The tax effect of the revaluation of property, plant and equipment was $795,619 and $ 53,824 for the six-month periods ended December 31, 2019 and 2018, respectively.
- For the six-month periods ended December 31,2019 and 2018, diluted EPS was the same as basic EPS. See Note 8.
The accompanying Notes are an integral part of these unaudited interim condensed consolidated financial statements. Related party balances and transactions are disclosed in Note 14.
F-5
BIOCERES CROP SOLUTIONS CORP.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the six-month periods ended December 31, 2019 and 2018
(Amounts in US Dollars)
Description
06/30/2019
Share-based incentives Profit for the period
Other comprehensive (loss) / income
12/31/2019
Attributable to the equity holders of the parent
Equity / | ||||||||
Stock options | Foreign | Revaluation | (deficit) | |||||
and share | currency | of PP&E and | attributable to | Non- | ||||
based | translation | effect of tax | owners of the | controlling | ||||
Issued capital | Share premium | incentives | Retained deficit | reserve | rate change | parent | Interests | Total equity |
3,613 | 96,486,865 | - | (21,972,287) | (31,479,583) | 4,263,255 | 47,301,863 | 14,793,003 | 62,094,866 |
- | - | 1,867,334 | - | - | - | 1,867,334 | - | 1,867,334 |
- | - | - | 4,264,504 | - | - | 4,264,504 | 407,577 | 4,672,081 |
- | - | - | - | (8,885,868) | 2,194,046 | (6,691,822) | (874,703) | (7,566,525) |
3,613 | 96,486,865 | 1,867,334 | (17,707,783) | (40,365,451) | 6,457,301 | 46,741,879 | 14,325,877 | 61,067,756 |
The accompanying Notes are an integral part of these unaudited interim condensed consolidated financial statements. Related parties' balances and transactions are disclosed in Note 14.
F-6
BIOCERES CROP SOLUTIONS CORP.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the six-month periods ended December 31, 2019 and 2018
(Amounts in US Dollars)
Description
06/30/2018
Adjustment of opening balance for the application of IAS 29
Parent company investment Share-based incentives Profit for the period
Other comprehensive (loss) / income
12/31/2018
Attributable to the equity holders of the parent
Equity / | ||||||||
Foreign | Revaluation of | (deficit) | ||||||
currency | PP&E and | attributable to | Non- | |||||
Share-based | translation | effect of tax | owners of the | controlling | ||||
Issued capital | Share premium | incentives | Retained deficit | reserve | rate change | parent | Interests | Total equity |
2,810 | 68,023,449 | 102,827 | (26,149,583) | (36,612,070) | 8,346,051 | 13,713,484 | 19,420,172 | 33,133,656 |
- | - | - | 19,560,024 | - | - | 19,560,024 | 7,797,295 | 27,357,319 |
- | (10,710,438) | - | - | - | - | (10,710,438) | - | (10,710,438) |
- | - | 8,921 | - | - | - | 8,921 | - | 8,921 |
- | - | - | 4,229,006 | - | - | 4,229,006 | 3,337,547 | 7,566,553 |
- | - | - | - | (2,258,813) | 288,385 | (1,970,428) | (541,295) | (2,511,723) |
2,810 | 57,313,011 | 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 consolidated financial statements. Related parties' balances and transactions are disclosed in Note 14.
F-7
BIOCERES CROP SOLUTIONS CORP.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the six-month periods ended December 31, 2019 and 2018
(Amounts in US Dollars)
OPERATING ACTIVITIES
Profit for the period
Adjustments to reconcile profit to net cash flows Income tax
Finance results
Depreciation of property, plant and equipment
Amortization of intangible assets
Depreciation of leased assets
Share-based incentive and stock options
Share of profit or loss of joint ventures and associates Loss of control of subsidiaries
Provisions for contingencies
Allowance for impairment of trade debtors
Allowance for obsolescence
Initial recognition and changes in the fair value of biological assets Gain or loss on sale of equipment and intangible assets
Working capital adjustments
Trade receivables
Other receivables
Income and minimum presumed income taxes
Inventories
Trade and other payables
Employee benefits and social security
Deferred revenue and advances from customers
Government grants
Interest collected
Inflation effects on working capital adjustments
Net cash flows generated by (used in) operating activities
Notes | 12/31/2019 | 12/31/2018 |
4,672,081 | 7,566,553 | |
1,204,655 | 5,050,749 | |
19,868,676 | 14,559,272 | |
5.7 | 989,524 | 1,084,831 |
5.8 | 1,103,069 | 992,292 |
17 | 308,030 | - |
1,867,334 | 8,921 | |
11 | (1,298,505) | (812,593) |
- | (10,591) | |
(8,134) | (6,159) | |
1,120,787 | (12,223) | |
524,264 | 183,272 | |
(719,343) | - | |
63,837 | 8,953 | |
(21,614,137) | (28,356,963) | |
(2,813,836) | 2,826,327 | |
2,253,460 | 2,353,086 | |
(5,867,564) | (4,762,715) | |
11,334,503 | 3,685,444 | |
(634,278) | 807,486 | |
3,348,229 | 233,737 | |
(4,470) | (19,349) | |
2,158,848 | 207,817 | |
(11,575,594) | (7,488,269) | |
6,281,436 | (1,900,122) |
The accompanying Notes are an integral part of these unaudited interim condensed consolidated financial statements. Related parties' balances and transactions are disclosed in Note 14.
F-8
BIOCERES CROP SOLUTIONS CORP.
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the six-month periods ended December 31, 2019 and 2018
(Amounts in US Dollars)
Notes | |||
INVESTMENT ACTIVITIES | |||
Proceeds from sale of property, plant and equipment | |||
Investment in joint ventures and associates and associates | 11 | ||
Purchase of property, plant and equipment | 5.7 | ||
Capitalized development expenditures | 5.8 | ||
Purchase of intangible assets | 5.8 | ||
Net cash flows used in investing activities | |||
FINANCING ACTIVITIES | |||
Proceeds from borrowings | |||
Repayment of borrowings and interest payments | |||
(Decrease) increase in bank overdraft and other short-term borrowings | |||
Other financial proceeds or payments, net | |||
Leased assets payments | |||
Net cash flows generated by financing activities | |||
Net increase in cash and cash equivalents | |||
Inflation effects on cash and cash equivalents | |||
Cash and cash equivalents as of beginning of the period | 5.1 | ||
Effect of exchange rate changes on cash and equivalents | |||
Cash and cash equivalents as of the end of the period | 5.1 |
12/31/2019 | 12/31/2018 |
17,071 | 16,432 |
- | (127,728) |
(1,007,253) | (1,369,143) |
(504,122) | (47,552) |
(98,308) | (21,184) |
(1,592,612) | (1,549,175) |
55,536,625 | 37,766,624 |
(54,939,806) | (37,099,366) |
(1,086,208) | 5,596,390 |
2,018,181 | (1,057,450) |
(243,414) | - |
1,285,378 | 5,206,198 |
5,974,202 | 1,756,901 |
(99,554) | (477,540) |
3,450,873 | 2,215,103 |
1,243,337 | 756,690 |
10,568,858 | 4,251,154 |
The accompanying Notes are an integral part of these unaudited interim condensed consolidated financial statements. Related parties' balances and transactions are disclosed in Note 14.
F-9
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
Index
- General information
- Accounting standards and basis of preparation
- Statement of compliance with IFRS as issued by IASB
- Authorization for the issue of the unaudited interim condensed consolidated financial Statements
- Basis of measurement
- Functional currency and presentation currency
- Changes in accounting policies
- Changes in accounting estimates and judgements
- New standards, amendments and interpretations issued by the IASB
- Seasonality
- Information about components of unaudited interim condensed consolidated statements of financial position
- Cash and cash equivalents
- Other financial assets
- Trade receivables
- Other receivables
- Inventories
5.6 Biological assets
- Property, plant and equipment
- Intangible assets
- Goodwill
- Trade and other payables
- Borrowings
- Employee benefits and social security
- Deferred revenue and advances from customers
- Financed payment - Acquisition of business
- Provisions
- Private warrants
6. Information about components of unaudited interim condensed consolidated statement of comprehensive income
- Revenues
- Cost of sales
- R&D classified by nature
- Expenses classified by nature and function
- Finance results
F-10
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
- Taxation
- Earnings per share
- Information about unaudited interim condensed consolidated components of equity
- Parent company investment
- Share capital
- Shares summary
- Non-controllinginterest
- Cash flow information
- Joint ventures and associates
- Segment information
- Financial instruments- risk management
- Shareholders and other related parties' balances and transactions
- Key management personnel compensation
- Share-basedpayments
- Leases
- Contingencies, commitments and restrictions on the distribution of profits
- Events occurring after the reporting period
F-11
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
1. GENERAL INFORMATION
Bioceres Crop Solutions Corp ("the Company"), together with its subsidiaries ("the Group") is a fully integrated provider of crop productivity technologies designed to enable the transition of agriculture towards carbon neutrality. The Group has a unique biotech platform with high-impact, patented technologies for seeds and microbial agricultural inputs, as well as next generation crop nutrition and protection solutions.
The Group's headquarters and primary operations are based in Argentina, which is its key end-market, but its footprint exceeds country edges, with agricultural inputs across more than 25 countries, including Brazil, Paraguay, India, United States, Uruguay, Germany, South Africa among others.
Short-term financial situation
The Group has revolving credit facilities up to an amount of approx. $30 million with financial institutions that jointly with the generation of resources from the business operations, allows the Group to meet its current financial obligations. In addition, to meet short-term debts, the Group could, if necessary, issue new corporate bonds up to $32 million. This program was already authorized by the regulatory authorities of Argentina and could be allocated to the Group's needs.
On January 23, 2020, the Company signed a preliminary term sheet for an issuance of convertible secured promissory notes (the "Notes") due 2023 for an amount up to $45 million. At maturity or upon a change of control, the holders of the Notes will have the option to convert the outstanding amount into ordinary shares of the Company at a price of $8 per share or pursuant to the terms set forth in the Note, respectively. The Company also will have the option to convert the notes into ordinary shares, which conversion will become mandatory for the holders, upon meeting of certain conditions set forth in the Notes.
2. ACCOUNTING STANDARDS AND BASIS OF PREPARATION
2.1. Statement of compliance with IFRS as issued by IASB
These unaudited interim condensed consolidated financial statements for the six-month period ended December 31, 2019 have been prepared in accordance with Accounting Standard IAS 34 Interim Financial Reporting.
These unaudited interim condensed consolidated financial statements do not include all the notes of the type normally included in an annual financial statement. Accordingly, these unaudited interim condensed consolidated financial statements are to be read in conjunction with the Consolidated financial statements as of June 30, 2019.
2.2. Authorization for the issue of the unaudited interim condensed consolidated financial statements
These unaudited interim condensed consolidated financial statements of the Group as of December 31, 2019, June 30, 2019 and for the six-month period ended December 31, 2019 and 2018 have been authorized by the Board of Directors of Bioceres Crop Solution Corp on March 5, 2020.
2.3. Basis of measurement
The unaudited interim condensed consolidated 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 CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
2.4. Functional currency and presentation currency
- 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, was over 100%. It was for this reason that, in accordance with IAS 29, the Argentine economy had to 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 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 index as of December 31, and June 30, 2018 were 184.2552 and 144.8053, respectively.
The index as of December 31, and June 30, 2019 were 283.4442 and 225.5370, respectively.
The comparative figures in these unaudited interim condensed consolidated financial statements presented in a stable currency are not adjusted for subsequent changes in the price level or exchange rates.
- Presentation currency
The unaudited interim condensed consolidated financial statements of the Group are presented in US Dollars, which is the presentation currency.
- 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 exchange reserve relating to such operation up to the date of disposal are transferred to the consolidated statement of profit or loss and other comprehensive income as part of the profit or loss taking place upon such disposal.
F-13
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
2.5. Changes in accounting policies
The accounting policies adopted in the preparation of this unaudited interim condensed consolidated financial statements are consistent with those adopted for the preparation of the Consolidated financial statements as of June 30, 2019.
2.6. Changes in accounting estimates and judgments
- Fair value of Bioceres S.A. shares granted to Rizobacter's management.
For equity-settledshare-based payment transactions, the Group measures the goods or services received, and the corresponding increase in equity, directly, at their fair value unless it cannot be estimated reliably. If the Group cannot estimate reliably the fair value of the goods or services received, it measures their value, and the corresponding increase in equity, indirectly, by reference to the fair value of the equity instruments granted. See Note 16.
- Fair value of stock options granted to directors and certain executives of the Group
Certain executives and directors of the Group were granted incentives in the form of options to purchase shares of the Company as consideration for services.
The estimate of the fair value of equity-settledshare-based payment transactions requires a determination to be made of the most adequate option pricing model to apply depending on the terms and conditions of the arrangement. This estimate also requires a determination of those factors most appropriate to the pricing model, including the expected life of the option and the expected volatility of the share price upon the basis of which hypotheses are made. The Group measures the fair value of these transactions at the grant date applying the Black-Scholes formula adjusted to consider the possible dilutive effect of the future exercise of the share options granted on their estimated fair value at grant date. The hypotheses used for the estimate of the fair value of these transactions are disclosed in Note 16 and may not necessarily take place in the future.
There were no other significant changes in accounting estimates and judgments with respect to the Consolidated financial statements as of June 30, 2019.
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 16 - Leases
IFRS 16 was issued in January 2016. It results in almost all leases being recognized on the balance sheet, as the distinction between operating and finance leases is 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 new standard is effective for financial years commencing on or after January 1, 2019. See Note 17.
IFRIC 23 - Uncertainty over income tax treatments
In October 2017, the IASB issued IFRC 23. When there is uncertainty about income tax treatments, this interpretation addresses: (i) whether uncertain tax treatments should be considered separately or not; (ii) the assumptions made about the analysis of tax treatments by the tax authorities (it should be considered whether the tax authority is likely to accept an uncertain tax treatment assuming that said tax authority will examine such uncertain tax treatment); (iii) how an entity determines fiscal gain (tax loss), tax bases, unused taxes, unused tax credits and tax rates (probability of occurrence analysis); and (iv) how changes in the relevant facts and circumstances are considered.
The new standard is effective for years beginning on January 1, 2019. This standard does not have a material impact in the Group.
F-14
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
Amendments to IFRS 9 - Pre-payment features with negative compensation
The narrow-scope amendments made to IFRS 9 Financial Instruments in October 2017 enable entities to measure certain pre-payable financial assets with negative compensation at amortized cost. These assets, which include some loan and debt securities, would otherwise have to be measured at fair value through profit or loss. To qualify for amortized cost measurement, the negative compensation must be "reasonable compensation for early termination of the contract" and the asset must be held within a "held to collect" business model.
The new standard is effective for years beginning on January 1, 2019 and early adoption was allowed. These amendments do not have a material impact in the Group.
Amendments to IAS 28 - Long-term interests in associates and joint ventures
The amendments clarify the accounting for long-term interests in an associate or joint venture, which in substance form a part of the net investment in the associate or joint venture, but to which equity accounting is not applied. Entities must account for such interests under IFRS 9 Financial Instruments before applying the loss allocation and impairment requirements in IAS 28 Investments in Associates and Joint Ventures.
The new standard is effective for years beginning on January 1, 2019 and early adoption was allowed. These amendments do not have a material impact in the Group.
Annual improvements to IFRS standards 2015-2017 cycle
The following improvements were finalized in December 2017:
IFRS 3 Business Combinations clarified that obtaining control of a business that is a joint operation is a business combination achieved in stages. IFRS 11 Joint Arrangements clarified that the party obtaining joint control of a business that is a joint operation should not remeasure its previously held interest in the joint operation. IAS 12 Disclosure of Interests in Other Entities clarified that the income tax consequences of dividends on financial instruments classified as equity should be recognized according to where the past transactions or events that generated distributable profits were recognized. IAS 23 Borrowing Costs clarified that, if a specific borrowing remains outstanding after the related qualifying asset is ready for its intended use or sale, it becomes part of general borrowings.
The new standard is effective for years beginning on January 1, 2019 and early adoption was allowed. This standard does not have material impact in the Group.
Amendments to IAS 19 - Plan amendment, curtailment or settlement
The amendments to IAS 19 Employee Benefits clarify the accounting for defined benefit plan amendments, curtailments and settlements. They confirm that entities must (i) calculate the current service cost and net interest for the remainder of the reporting period after a plan amendment, curtailment or settlement by using the updated assumptions from the date of the change; (ii) recognize any reduction in a surplus immediately in profit or loss, either as part of past service cost or as a gain or loss on settlement. In other words, a reduction in a surplus must be recognized in profit or loss even if that surplus was not previously recognized because of the impact of the asset ceiling; and (iii) separately recognize any changes in the asset ceiling through other comprehensive income.
The new standard is effective for years beginning on January 1, 2019 and early adoption was allowed. These amendments do not have a material impact in the Group.
F-15
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
Amendments to IAS 1 and IAS 8 - Definition of material
The IASB has made amendments to IAS 1 Presentation of Financial Statements and IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors which use a consistent definition of materiality throughout International Financial Reporting Standards and the Conceptual Framework for Financial Reporting, clarify when information is material and incorporate some of the guidance in IAS 1 about immaterial information. In particular, the amendments clarify (i) that the reference to obscuring information addresses situations in which the effect is similar to omitting or misstating that information, and that an entity assesses materiality in the context of the financial statements as a whole, and (ii) the meaning of "primary users of general-purpose financial statements" to whom those financial statements are directed, by defining them as "existing and potential investors, lenders and other creditors" that must rely on general purpose financial statements for much of the financial information they need.
The new standard is effective for years beginning on January 1, 2019 and early adoption was allowed. These amendments do not have a material impact in the Group.
Amendments to IFRS 3 - Definition of business
The amended definition of a business requires an acquisition to include an input and a substantive process that together significantly contribute to the ability to create outputs. The definition of the term "outputs" is amended to focus on goods and services provided to customers, generating investment income and other income, and it excludes return in the form of lower costs and other economic benefits. The amendments will likely result in more acquisitions being accounted for as asset acquisitions.
The new standard is effective for years beginning on January 1, 2019 and early adoption was allowed. These amendments do not have a material impact in the Group.
Amendments to IFRS 10 and IAS 28 - Sale or contribution of assets between an investor and its associate or joint venture.
The IASB has made limited scope amendments to IFRS 10 Consolidated financial statements and IAS 28 Investments in associates and joint ventures. The amendments clarify the accounting treatment for sales or contribution of assets between an investor and its associates or joint ventures. They confirm that the accounting treatment depends on whether the non-monetary assets sold or contributed to an associate or joint venture constitute a business (as defined in IFRS 3 Business Combinations).
Where the non-monetary assets constitute a business, the investor will recognize the full gain or loss on the sale or contribution of assets. If the assets do not meet the definition of a business, the gain or loss is recognized by the investor only to the extent of the other investor´s is interests in the associate or joint venture. The amendments apply prospectively.
Amendments to IAS 1 - Classification of liabilities as current or non-current
The amendments aim to promote consistency in applying the requirements by helping companies determine whether, in the statement of financial position, debt and other liabilities with an uncertain settlement date should be classified as current (due or potentially due to be settled within one year) or non-current. The amendments include clarifying the classification requirements for debt a company might settle by converting it into equity.
The amendments include (a) specifying that an entity's right to defer settlement must exist at the end of the reporting period; (b) clarifying that classification is unaffected by management's intentions or expectations about whether the entity will exercise its right to defer settlement; (c) clarifying how lending conditions affect classification; and (d) clarifying requirements for classifying liabilities an entity will or may settle by issuing its own equity instruments.
The amendments clarify, not change, existing requirements, and so are not expected to affect the Group significantly. However, they could result in reclassifying some liabilities from current to non-current, and vice versa.
The amendments are effective for years beginning on January 1, 2022 and early adoption is allowed.
F-16
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
4. SEASONALITY
The Group's 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's 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 contracts 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.
5. INFORMATION ABOUT COMPONENTS OF UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
5.1. Cash and cash equivalents
Cash and banks
US Treasury bills
5.2. Other financial assets
12/31/2019 | 06/30/2019 |
5,080,613 | 3,450,873 |
5,488,245 | - |
10,568,858 | 3,450,873 |
Current
Restricted short-term deposit Other investments
Other marketable securities
Non-current
Shares of Bioceres S.A. Other marketable securities
12/31/2019 06/30/2019
4,369,254 4,327,275
643,165 347,718
6,034 8,515
5,018,453 4,683,508
12/31/2019 | 06/30/2019 |
333,390 | 374,685 |
1,225 | 1,728 |
334,615 | 376,413 |
F-17
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
5.3. Trade receivables
Trade debtors
Allowance for impairment of trade debtors
Shareholders and other related parties (Note 14)
Allowance for impairment of shareholders and other related parties (Note 14) Allowance for return of goods
Trade debtors - Parent company (Note 14)
Trade debtors - Joint ventures and associates (Note 14)
Discounted and deferred checks
5.4. Other receivables
12/31/2019 | 06/30/2019 |
71,234,677 | 48,910,484 |
(4,194,083) | (3,360,224) |
250,438 | 467,743 |
(30,236) | (75,596) |
(1,182,331) | (800,606) |
439,140 | 440,268 |
1,260,427 | 2,369 |
9,982,529 | 13,651,939 |
77,760,561 | 59,236,377 |
Current
Taxes
Other receivables - Other related parties (Note 14)
Other receivables - Joint ventures and associates (Note 14) Prepayments to suppliers
Reimbursements over exports
Prepaid expenses and other receivables
Loans receivable
Miscellaneous
Non-current
Taxes
Reimbursements over exports
Miscellaneous
5.5. Inventories
12/31/2019 06/30/2019
1,651,468 584,641
2,516 10,971
485,156 250,783
570,484 496,001
364,305 366,594
240,946 213,597
125,000-
291,935 59,242
3,731,810 1,981,829
12/31/2019 | 06/30/2019 |
734,638 | 681,168 |
885,364 | 878,470 |
132,129 | 672 |
1,752,131 | 1,560,310 |
Agrochemicals Seeds and grains Microbiological resale products Microbiological products produced Goods in transit
Supplies
Allowance for obsolescence
12/31/2019 | 06/30/2019 |
32,346 | 22,137 |
643,295 | 207,519 |
13,278,992 | 13,894,018 |
9,135,393 | 8,370,583 |
1,671,709 | 751,737 |
6,778,170 | 4,482,827 |
(760,569) | (406,818) |
30,779,336 | 27,322,003 |
F-18
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
5.6. Biological assets
Biological assets | 12/31/2019 | 06/30/2019 |
1,128,346 | 270,579 | |
1,128,346 | 270,579 |
On September 16, 2019, Rizobacter Argentina S.A., a subsidiary of the Company, entered into an agreement with Espartina S.A. ("Espartina") to share its business of producing grain crops. The joint operation is classified as a joint agreement as established in IFRS 11, while the parties are entitled to the assets and obligations over the related liabilities. Rizobacter Argentina S.A. recognizes as a joint operator, in relation to its participation, assets, liabilities, income and expenses. The production obtained is distributed according to the contributions made by each party. Rizobacter corresponds to 5% and Espartina to 95%. The in-kind contributions made during the period amount to $588,857 (Note 14). Each party decides the way of commercialization and the destination of the grains produced.
In the agreement, Rizobacter undertakes to provide inputs and money necessary for producing the grains according to the established participation percentages. Espartina contributes with all the cultural practices on fields, inputs not provided by Rizobacter and all the administration expenses needed for the production.
Changes in Biological assets
Beginning of the period
Initial recognition and changes in the fair value of biological assets Decrease due to harvest / disposals
Cost incurred during the period
Exchange differences
End of the period
Soybean | Corn | Wheat | Barley | Total |
237,723 | 32,856 | - | - | 270,579 |
205,730 | 255,674 | 209,801 | 48,138 | 719,343 |
(241,542) | (54,501) | (63,507) | (48,978) | (408,528) |
293,416 | 187,807 | 161,713 | 46,378 | 689,314 |
(99,425) | (29,004) | (14,312) | 379 | (142,362) |
395,902 | 392,832 | 293,695 | 45,917 | 1,128,346 |
5.7. Property, plant and equipment
Property, plant and equipment as of December 31, 2019 and June 30, 2019 included the following:
Gross carrying amount
Accumulated depreciation
Net carrying amount
12/31/2019 | 06/30/2019 |
53,779,411 | 57,059,972 |
(12,193,379) | (13,225,424) |
41,586,032 | 43,834,548 |
F-19
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
1. Net carrying amount for each class of assets is as follows:
Class
Office equipment
Vehicles
Equipment and computer software
Fixtures and fittings
Machinery and equipment
Land and buildings
Buildings in progress
Total
2. Gross carrying amount as of December 31, 2019 is as follows:
Net carrying | Net carrying |
amount | amount |
12/31/2019 | 06/30/2019 |
195,440 | 213,437 |
1,239,458 | 1,785,701 |
71,085 | 123,472 |
4,050,264 | 4,737,396 |
5,672,741 | 6,336,691 |
29,473,512 | 29,969,237 |
883,532 | 668,614 |
41,586,032 | 43,834,548 |
Class
Office equipment
Vehicles
Equipment and computer software Fixtures and fittings Machinery and equipment
Land and buildings
Buildings in progress
Total
As of the | Gross carrying amount | Foreign | As of the | |||
beginning of | currency | end of | ||||
period | Additions | Reclasifications | Disposals | translation | Revaluation | period |
629,119 | 16,919 | - | - | (58,750) | - | 587,288 |
3,604,537 | 104,849 | (384,438) | (143,395) | (305,040) | - | 2,876,513 |
955,657 | 8,631 | (390,125) | - | (85,968) | - | 488,195 |
6,438,430 | 19,026 | - | - | (709,698) | - | 5,747,758 |
10,233,501 | 479,735 | (413,322) | - | (1,120,114) | - | 9,179,800 |
34,530,114 | 3,378 | - | - | (3,836,143) | 3,318,976 | 34,016,325 |
668,614 | 374,715 | - | - | (159,797) | - | 883,532 |
57,059,972 | 1,007,253 | (1,187,885) | (143,395) | (6,275,510) | 3,318,976 | 53,779,411 |
3. Accumulated depreciation as of December 31, 2019 is as follows:
Class
Office equipment
Vehicles
Equipment and computer software Fixtures and fittings Machinery and equipment
Land and buildings
Total
Accumulated | Depreciation | Accumulated | |||
as of the | Foreign | as | |||
beginning of | Disposals / | currency | of the end of | ||
period | Reclasifications | Of the period | translation | Revaluation | period |
415,682 | - | 18,197 | (42,031) | - | 391,848 |
1,818,836 | (230,012) | 210,091 | (161,860) | - | 1,637,055 |
832,185 | (349,836) | 15,632 | (80,871) | - | 417,110 |
1,701,034 | - | 178,229 | (181,769) | - | 1,697,494 |
3,896,810 | (233,094) | 258,832 | (415,489) | - | 3,507,059 |
4,560,877 | - | 308,543 | (463,108) | 136,501 | 4,542,813 |
13,225,424 | (812,942) | 989,524 | (1,345,128) | 136,501 | 12,193,379 |
F-20 |
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
4. Gross carrying amount as of December 31, 2018 is as follows:
Gross carrying amount
Class
Office equipment
Vehicles
Equipment and computer software Fixtures and fittings Machinery and equipment
Land and buildings
Buildings in progress
Total
Adjustment | |||||||
of opening | |||||||
net book | |||||||
As of the | amount for | Foreign | As of the | ||||
beginning of | application | currency | end of | ||||
period | of IAS 29 | Additions | Reclasifications | Disposals | translation | Revaluation | period |
243,948 | 334,496 | 19,188 | - | (7,818) | (14,607) | - | 575,207 |
1,660,294 | 1,052,861 | 905,231 | - | - | (10,956) | - | 3,607,430 |
419,638 | 417,173 | 14,417 | - | (10,528) | (12,817) | - | 827,883 |
3,826,665 | 1,913,979 | 612 | 198,756 | - | (277,278) | - | 5,662,734 |
5,404,029 | 3,982,367 | 71,506 | - | (22,066) | (49,321) | - | 9,386,515 |
33,026,981 | 1,475,392 | 227,293 | 15,530 | - | (862,138) | 58,910 | 33,941,968 |
182,839 | 78,750 | 130,896 | (214,286) | - | (6,637) | - | 171,562 |
44,764,394 | 9,255,018 | 1,369,143 | - | (40,412) | (1,233,754) | 58,910 | 54,173,299 |
5. Accumulated depreciation as of December 31, 2018 is as follows:
Class
Office equipment
Vehicles
Equipment and computer software Fixtures and fittings Machinery and equipment
Land and buildings
Total
Adjustment | Depreciation | |||||
of opening | ||||||
Accumulated | net book | |||||
as of the | amount for | Foreign | Accumulated | |||
beginning of | application | Disposals / | Of the | currency | as of the end | |
period | of IAS 29 | Reclasifications | period | translation | Revaluation | of period |
49,129 | 309,342 | (3,688) | 16,539 | (6,893) | - | 364,429 |
560,691 | 765,972 | - | 254,987 | (8,119) | - | 1,573,531 |
207,402 | 491,761 | - | 30,777 | (8,668) | - | 721,272 |
318,582 | 912,661 | - | 166,913 | (26,265) | - | 1,371,891 |
937,736 | 2,115,831 | (11,339) | 311,004 | (74,247) | - | 3,278,985 |
2,513,708 | 1,377,613 | - | 304,611 | (98,093) | 61,977 | 4,159,816 |
4,587,248 | 5,973,180 | (15,027) | 1,084,831 | (222,285) | 61,977 | 11,469,924 |
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), considering the most recent independent valuations and market data. As of December 31, 2019, the Group reviewed the valuations in order to determine the variations between the fair values and their book value taking into consideration the valuations made in June 2019. Management determined the property, pla and equipment's value within a range of reasonable fair value estimates. All resulting fair value estimates for land and buildings are classified as level 3 and are consistent with the methodology disclosed in the annual financial statements.
F-21
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
5.8. Intangible assets
Intangible assets as of December 31, 2019 and June 30, 2019 included the following:
Gross carrying amount
Accumulated amortization
Net carrying amount
1. Net carrying amount of each class of intangible assets is as follows:
Class
Seed and integrated products
Soybean HB4
Ecoseed integrated products
Crop nutrition
Microbiological products
Other intangible assets
Trademarks and patents
Software
Customer loyalty
Total
12/31/2019 | 06/30/2019 |
41,973,607 | 45,848,737 |
(6,675,383) | (6,232,311) |
35,298,224 | 39,616,426 |
Net carrying | Net carrying |
amount | amount |
12/31/2019 | 06/30/2019 |
6,584,944 | 6,120,336 |
2,379,559 | 2,627,946 |
1,572,112 | 2,208,117 |
6,892,144 | 8,063,648 |
789,788 | 994,723 |
17,079,677 | 19,601,656 |
35,298,224 | 39,616,426 |
F-22
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
2. Gross carrying amount as of December 31, 2019 is as follows:
Class
Seed and integrated products
Soybean HB4
Ecoseed integrated products
Crop nutrition
Microbiological products
Other intangible assets
Trademarks and patents
Software
Customer loyalty
Total
3. Accumulated amortization as of December 31, 2019 is as follows:
Class
Crop nutrition
Microbiological products
Other intangible assets
Trademarks and patents
Software
Customer loyalty
Total
Gross carrying amount | |||
As of the | Foreign | ||
beginning of | currency | As of the end | |
period | Additions | translation | of period |
6,120,336 | 464,608 | - | 6,584,944 |
2,627,946 | 39,514 | (287,901) | 2,379,559 |
3,267,200 | - | (498,873) | 2,768,327 |
9,810,822 | - | (1,074,808) | 8,736,014 |
2,149,340 | 98,308 | (219,709) | 2,027,939 |
21,873,093 | - | (2,396,269) | 19,476,824 |
45,848,737 | 602,430 | (4,477,560) | 41,973,607 |
Amortization | |||
Accumulated as | Foreign | Accumulated as | |
of beginning of | currency | of the end of | |
period | Of the period | translation | period |
1,059,083 | 236,898 | (99,766) | 1,196,215 |
1,747,174 | 288,105 | (191,409) | 1,843,870 |
1,154,617 | 203,512 | (119,978) | 1,238,151 |
2,271,437 | 374,554 | (248,844) | 2,397,147 |
6,232,311 | 1,103,069 | (659,997) | 6,675,383 |
4. Gross carrying amount as of December 31, 2018 is as follows:
Class
Seed and integrated productsSoybean HB4
Crop nutrition
Microbiology products
Other intangible assetsTrademarks and patents Software
Customer loyalty
Total
Gross carrying amount
Adjustment | ||||
of opening | ||||
net book | ||||
As of the | amount for | Foreign | ||
beginning of | application | currency | As of the | |
period | of IAS 29 | Additions | translation | end of period |
4,927,853 | - | 509,953 | - | 5,437,806 |
2,505,864 | 841,714 | 47,552 | (84,926) | 3,310,204 |
6,278,706 | 2,986,739 | 21,184 | (256,245) | 9,030,384 |
1,444,603 | 438,726 | - | (16,471) | 1,866,858 |
13,998,289 | 6,658,894 | - | (524,066) | 20,133,117 |
29,155,315 | 10,926,073 | 578,689 | (881,708) | 39,778,369 |
F-23 |
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
5. Accumulated amortization as of December 31, 2018 is as follows:
Amortization | |||||
Adjustment | |||||
of opening | |||||
net book | |||||
Accumulated as | amount for | Foreign | Accumulated | ||
of beginning of | application | currency | as of the end | ||
Class | period | of IAS 29 | Of the period | translation | of period |
Crop nutrition
Microbiology products
Other intangible assetsTrademarks and patents Software
Customer loyalty
Total
383,380 | 202,791 | 157,484 |
704,024 | 334,919 | 297,813 |
495,293 | 227,264 | 149,820 |
915,273 | 435,389 | 387,175 |
2,497,970 | 1,200,363 | 992,292 |
(14,868) | 728,787 |
(26,380) | 1,310,376 |
(18,344) | 854,033 |
(34,266) | 1,703,571 |
(93,858) | 4,596,767 |
The amortization charge is included in Notes 6.3 and 6.4.
5.9. Goodwill
The variations in goodwill occurred during the period corresponds to the result of inflation adjustment and conversion to presentation currency. There have not been goodwill impairment indicators.
Carrying amount of goodwill as of December 31, 2019 and June 30, 2019 is as follows:
Rizobacter
Semya
5.10. Trade and other payables
12/31/2019 | 06/30/2019 |
20,840,686 | 23,484,761 |
5,627,582 | 6,319,954 |
26,468,268 | 29,804,715 |
Current
Trade creditors
Shareholders and other related parties (Note 14) Trade creditors - Parent company (Note 14)
Trade creditors - Joint ventures and associates (Note 14) Taxes
Consideration payment Semya acquisition (Note 14) Miscellaneous
Non-current
Consideration payment Semya acquisition (Note 14)
12/31/2019 | 06/30/2019 |
37,322,043 | 30,489,072 |
1,657,580 | 1,796,932 |
99,037 | 1,568,036 |
13,949,951 | 4,805,149 |
2,035,657 | 1,475,410 |
122,950 | 122,950 |
168,936 | 320,945 |
55,356,154 | 40,578,494 |
452,654 | 452,654 |
452,654 | 452,654 |
F-24
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
5.11. Borrowings
Current
Bank overdrafts
Bank borrowings
Corporate bonds
Discount checks
Net loans payables-Parents companies and related parties to Parents (Note 14) Finance lease
Non-current
Subordinated loan
Bank borrowings
Corporate bonds
Net loans payables-Parents companies and related parties to Parents (Note 14) Finance lease
12/31/2019 | 06/30/2019 |
619,986 | - |
52,192,021 | 46,467,308 |
8,319,842 | 8,416,768 |
4,101,109 | 5,807,303 |
5,850,542 | 5,399,883 |
- | 385,947 |
71,083,500 | 66,477,209 |
15,427,778 | - |
8,647,607 | 16,239,743 |
4,006,690 | 8,018,884 |
12,000,000 | 12,358,024 |
- | 462,870 |
40,082,075 | 37,079,521 |
The carrying value of some borrowings as of December 31, 2019 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.
12/31/2019 | 06/30/2019 | |||
Amortized cost | Fair value | Amortized cost | Fair value |
Current
Bank borrowings Discount checks Corporate Bonds
Non-currentBank borrowings Corporate Bonds
52,192,021 51,373,640
4,101,109 3,794,642
8,319,842 7,532,344
8,647,607 7,675,881
4,006,690 3,447,098
46,467,308 | 46,857,879 |
5,807,303 | 5,230,123 |
8,416,768 | 7,632,806 |
16,239,743 | 14,274.547 |
8,018,884 | 6,972,332 |
The Group has met the capital and interest installments whose maturity was effective in the six-month period ended December 31, 2019. Covenant compliance is required to be measured annually.
Subordinated loan
On October 15, 2019, the Group entered into a loan agreement with Arvesa Corp. and Bioceres LLC, its controlling shareholder, as lenders. The facility is for an amount of up to US$20 million, of which US$15 million has been drawdown as of the date of this report. Drawdown capital and capitalized interest are due after 24 months of the date of the loan agreement. Cash interest will be paid quarterly at a 15% rate. The portion of the loan funded by Arvesa is guaranteed by Bioceres S.A. and Bioceres LLC.
F-25
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
Net loans payables-Parents companies and related parties to Parents
Financial assets (other receivables from the controlling entities ("Parents") and related parties to Parents) and liabilities (loans payable to Parents companies) are offset and the net amount is reported in the Statement of Financial Position where the Company currently has 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.
The following table presents the recognized financial instruments that are offset:
Gross amounts | ||||
set | Net amounts | |||
off in the | presented in the | |||
Statement | Statement of | |||
of Financial | Financial | |||
Parents companies and related parties to Parents | Gross amounts | Position | Position | |
Current other receivables | 10,537,438 | (10,537,438) | - | |
Total current assets | 10,537,438 | (10,537,438) | - | |
Current borrowings | (16,387,980) | 10,537,438 | (5,850,542) | |
Total current liabilities | (16,387,980) | 10,537,438 | (5,850,542) | |
Non-current borrowings | (12,000,000) | - | (12,000,000) | |
Total non-current liabilities | (12,000,000) | - | (12,000,000) | |
5.12. | Employee benefits and social security | |||
Current | 12/31/2019 | 06/30/2019 | ||
Salaries and social security | 1,729,504 | 1,563,581 | ||
Staff incentives and vacations | 1,094,484 | 1,481,384 | ||
Key management personnel (Note 14) | 1,838,709 | 2,312,253 | ||
4,662,697 | 5,357,218 | |||
Non-current | ||||
Key management personnel (Note 14) | 200,459 | - | ||
200,459 | - | |||
5.13. | Deferred revenue and advances from customers | |||
Advances from customers | 12/31/2019 | 06/30/2019 | ||
5,749,476 | 1,074,463 | |||
5,749,476 | 1,074,463 | |||
5.14. | Financed payment- Acquisition of business | |||
Financed payment to sellers | 12/31/2019 | 06/30/2019 | ||
- | 2,826,611 | |||
- | 2,826,611 |
In October 2019, the last installment of Finance payment to sellers was paid.
F-26
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
5.15. Provisions
Provisions for contingencies | 12/31/2019 | 06/30/2019 |
287,325 | 439,740 | |
287,325 | 439,740 |
There are not expected reimbursements related to the provisions.
5.16. Private warrants
Private warrants | 12/31/2019 | 06/30/2019 |
1,302,524 | 2,861,511 | |
1,302,524 | 2,861,511 |
As of June 30, 2019, the fair value of the private warrants using a share price of $5.30 and risk-free rate of 1.7631%, decreased to $2.8 million and the Group recognized a finance gain of $0.6 million.
As of December 31, 2019, the fair value of the private warrants using a share price of $5.05 and risk-free rate of 1.693%, decreased to $1.3 million and the Group recognized a finance gain of $1.6 million.
6. INFORMATION ABOUT COMPONENTS OF UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
6.1. Revenues
Sale of goods and services Royalties
12/31/2019 | 12/31/2018 |
97,286,206 | 91,539,573 |
1,216,161 | 518,933 |
98,502,367 | 92,058,506 |
Transactions of sales of goods and services with joint ventures, shareholders and other related parties are reported in Note 14.
F-27
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
6.2. Cost of sales
Item
Inventories as of the beginning of the period
Adjustment of opening net book amount for the application of IAS 29 Purchases of the period
Production costs
Foreign currency translation
Subtotal
Inventories as of the end of the period
Cost of sales
6.3. R&D classified by nature
Item
Amortization intangible assets
Import and export expenses
Depreciation property, plant and equipment
Freight and haulage
Employee benefits and social securities
Taxes
Maintenance
Energy and fuel
Supplies and materials
Mobility and travel
Share-based incentives
Professional fees and outsourced services
Professional fees related parties
Office supplies
Insurance
Depreciation of leased assets
Miscellaneous
Total
R&D Capitalized (Note 5.8)
R&D profit and loss
Total
% of total revenue
12/31/2019 | 12/31/2018 |
27,322,003 | 19,366,001 |
- | 4,273,416 |
51,638,178 | 45,121,088 |
6,310,757 | 5,119,487 |
(1,183,800) | (2,129,829) |
84,087,138 | 71,750,163 |
(30,779,336) | (24,097,484) |
53,307,802 | 47,652,679 |
Research and | Research and |
development | development |
expenses | expenses |
12/31/2019 | 12/31/2018 |
525,003 | 269,721 |
9,527 | 7,947 |
20,149 | 64,988 |
- | 1,674 |
602,410 | 268,830 |
418 | 1,564 |
14,322 | 22,305 |
37,099 | 42,733 |
383,226 | 352,130 |
24,894 | 18,920 |
- | 8,921 |
5,452 | 24,640 |
488,516 | - |
4,081 | - |
2,524 | 4,369 |
5,564 | - |
4,167 | 5,415 |
2,127,352 | 1,094,157 |
12/31/2019 | 12/31/2018 |
504,122 | 557,505 |
2,127,352 | 1,094,157 |
2,631,474 | 1,651,662 |
2.67% | 1.79% |
F-28
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
6.4. Expenses classified by nature and function
Item
Amortization intangible assets Analysis and storage Commissions and royalties Import and export expenses Depreciation property, plant and equipment Depreciation of leased assets Impairment of receivables
Freight and haulage
Employee benefits and social securities Maintenance
Energy and fuel
Supplies and materials
Mobility and travel
Publicity and advertising
Contingencies
Share-based incentives
Professional fees and outsourced services Professional fees related parties
Office supplies
Insurance
Information technology expenses Obsolescence
Taxes
Miscellaneous
Total
Selling, general | ||
and | ||
Production | administrative | Total |
costs | expenses | 12/31/2019 |
- | 578,066 | 578,066 |
21,129 | 3,017 | 24,146 |
771,883 | 245,341 | 1,017,224 |
82,036 | 577,023 | 659,059 |
625,286 | 344,089 | 969,375 |
177,095 | 125,371 | 302,466 |
- | 1,120,787 | 1,120,787 |
451,648 | 1,664,525 | 2,116,173 |
2,555,203 | 6,273,892 | 8,829,095 |
227,532 | 275,117 | 502,649 |
237,510 | 73,047 | 310,557 |
174,031 | 137,727 | 311,758 |
8,964 | 974,167 | 983,131 |
- | 1,078,928 | 1,078,928 |
- | (8,134) | (8,134) |
- | 1,867,334 | 1,867,334 |
337,896 | 406,488 | 744,384 |
- | 32,672 | 32,672 |
38,433 | 192,830 | 231,263 |
51,019 | 249,522 | 300,541 |
282 | 382,249 | 382,531 |
524,264 | - | 524,264 |
16,513 | 2,495,732 | 2,512,245 |
10,033 | 92,529 | 102,562 |
6,310,757 | 19,182,319 | 25,493,076 |
F-29
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
Selling, | |||
general and | |||
Production | administrative | Total | |
Item | costs | expenses | 12/31/2018 |
Amortization intangible assets | - | 722,571 | 722,571 |
Analysis and storage | 535,388 | 125,556 | 660,944 |
Commissions and royalties | 396,325 | 186,406 | 582,731 |
Import and export expenses | 34,977 | 542,692 | 577,669 |
Depreciation property, plant and equipment | 727,133 | 292,710 | 1,019,843 |
Impairment of receivables | - | (12,223) | (12,223) |
Freight and haulage | 100,005 | 1,161,936 | 1,261,941 |
Employee benefits and social securities | 2,421,592 | 6,809,782 | 9,231,374 |
Maintenance | 186,019 | 115,158 | 301,177 |
Energy and fuel | 210,971 | 281,614 | 492,585 |
Supplies and materials | 131,569 | 231,682 | 363,251 |
Mobility and travel | 55,899 | 678,997 | 734,896 |
Publicity and advertising | - | 700,370 | 700,370 |
Contingencies | - | (6,159) | (6,159) |
Information technology expenses | - | 304,568 | 304,568 |
Professional fees and outsourced services | 28,188 | 1,006,110 | 1,034,298 |
Professional fees related parties | - | 411,352 | 411,352 |
Office supplies | 19,882 | 211,263 | 231,145 |
Insurance | 38,213 | 238,714 | 276,927 |
Obsolescence | 111,595 | 71,677 | 183,272 |
Taxes | 11,358 | 2,407,613 | 2,418,971 |
Miscellaneous | 110,373 | 179,698 | 290,071 |
Total | 5,119,487 | 16,662,087 | 21,781,574 |
6.5. Finance results | |||
Finance income | 12/31/2019 | 12/31/2018 | |
Interest generated by assets | 2,158,848 | 207,817 | |
Other finance income | 35,360 | - | |
2,194,208 | 207,817 | ||
Finance costs | |||
Interest generated by liabilities with the parent | (1,341,181) | (22,125) | |
Interest generated by liabilities | (13,717,389) | (11,363,229) | |
Financial commissions | (757,751) | (1,058,499) | |
Other financial loss | (18,102) | (167,822) | |
(15,834,423) | (12,611,675) | ||
Other finance results | |||
Exchange differences generated by assets | 21,922,850 | 25,492,428 | |
Exchange differences generated by liabilities | (36,862,783) | (37,603,766) | |
Changes in fair value of financial assets or liabilities and other financial results | 2,747,580 | 90,122 | |
Net gain of inflation effect on monetary items | 5,963,892 | 9,865,802 | |
(6,228,461) | (2,155,414) | ||
Total net finance results | (19,868,676) | (14,559,272) | |
F-30 |
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
7. TAXATION
Tax reform in Argentina
On December 29, 2017, the Government promulgated Law 27,430 - Income Tax. This law changed the tax rates for Argentine companies and gradually reduced them from 35% to 30% for fiscal periods beginning from January 1, 2018 until December 31, 2019, and 25% for fiscal periods beginning on or after January 1, 2020 (inclusive).
Additionally, Law No. 27,430, as amended by Law No. 27,468, provided that, for fiscal years beginning on or after January 1, 2018, an inflation adjustment shall be applied in any fiscal year in which the rate of inflation, accumulated in the thirty-six months prior to the end of the fiscal year being settled, exceeds 100%. With respect to the first, second and third fiscal years from its effective date, this procedure shall be applicable in the event that the accumulated variation of inflation, calculated from the beginning of the first fiscal year until the closing of each fiscal year, exceeds 55%, 30% and 15%, respectively. The positive or negative inflation adjustment, corresponding to the first, second and third fiscal year, should be imputed one-third in the fiscal period for which the adjustment is calculated and the remaining two-thirds, in equal parts, in the next two fiscal periods.
In December 2019, the Government promulgated Law 27,541. It provided that the tax rate reduction established by Law 27,430 was suspended until the fiscal years beginning on or after January 1, 2021. Thus, the tax rate of 30% was maintained. Law 27,541 also provided that, for the first and second financial years starting on or after 1 January 2019, one-sixth of the inflation adjustment will be computed in the fiscal year of the adjustment calculation and the remaining five- sixths in equal parts in the five immediately following tax periods.
Given that the inflation is expected to exceed 30% in 2020, the Group has determined the income tax considering the application of the inflation adjustment.
Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual earnings.
Current tax expense
Deferred tax
Total
The gross movement on the deferred income tax account is as follows:
12/31/2019 | 12/31/2018 |
(3,131,407) | (2,586,902) |
1,926,752 | (2,463,847) |
(1,204,655) | (5,050,749) |
Beginning of the period deferred tax Income tax provision
Charge to OCI
Conversion difference
Rate change
Total net deferred tax
12/31/2019 | 12/31/2018 |
(17,358,162) | (7,990,121) |
1,926,752 | (2,892,309) |
(795,619) | (71,762) |
1,886,127 | (3,778,326) |
- | 382,761 |
(14,340,902) | (14,349,757) |
F-31
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
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:
Earning/(Loss) before income tax-rate 0%
Loss/(Earnings) before income tax-rate 21%
Earnings before income tax-rate 30%
Income tax charge by applying tax rate to loss before tax: Share of profit or loss of subsidies, joint ventures and associates Stock options charge
Rate change adjustment
Non-deductible expenses and untaxed gains
Representation expenses
Foreign investment coverage
Result for inflation effect on monetary items and other finance results
Income tax
12/31/2019 | 12/31/2018 |
3,265,949 | (1,226,319) |
(318,391) | - |
2,929,178 | 13,843,621 |
(811,891) | (4,153,086) |
719,033 | (287,223) |
(239,312) | (2,498) |
(77,592) | 370,802 |
(33,642) | (373,736) |
(56,841) | (55,178) |
381,154 | 80,637 |
(1,085,564) | (630,467) |
(1,204,655) | (5,050,749) |
8. EARNINGS PER SHARE (EPS) | |||||
The numerators and denominators used in the calculation of basic EPS and diluted EPS are presented below: | |||||
12/31/2019 | 12/31/2018 | ||||
Numerator | |||||
Profit for the period (basic EPS) | 4,264,504 | 4,229,006 | |||
Profit for the period (diluted EPS) | 4,264,504 | 4,229,006 | |||
Denominator | |||||
Weighted average number of shares (basic EPS) | 36,120,517 | 36,120,517 | |||
Weighted average number of shares (diluted EPS) | 36,120,517 | 36,120,517 | |||
Basic and diluted income attributable to ordinary equity holders of the parent | 0.118 | 0.117 |
The 27,116,174 shares issued to Bioceres LLC in exchange of its Bioceres Inc Crop Business and its equity interest in Bioceres Semillas, together with the 119,443 shared issued to exercise the Bioceres Semillas' tag along and the 862,500 shares received by Bioceres LLC from the original founders of Union, were considered retrospectively in the EPS calculations. The denominators used in the EPS calculation assume those events have occurred at the beginning of the earliest period presented.
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, warrants and share-based incentives.
Warrants outstanding were not included in the diluted EPS calculations for the six-month period ended December 31, 2019 and 2018 because the average market price of ordinary shares during the period did not exceed the exercise price of the warrants.
F-32
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
In December 2019, stock options were granted with respect to 1,200,000 ordinary shares for certain executives and directors of the Group. See Note 16. These share options are treated as contingently issuable shares because their issue is contingent upon satisfying specified conditions in addition to the passage of time. The stock options were not included in the diluted EPS calculation for the six-month periods ended December 31,2019 and 2018 because the average market price of ordinary shares during the period is lower than the assumed proceeds per option.
There are neither ordinary shares transactions nor potential ordinary shares transactions that have occurred after December 31, 2019 that would have changed significantly the number of ordinary shares or potential ordinary shares outstanding at the end of the reporting period.
9. INFORMATION ABOUT UNAUDITED INTERIM CONDENSED CONSOLIDATED COMPONENTS OF EQUITY
9.1. Parent company investment
The Group has recognized the contribution of assets and (liabilities) made by the shareholders into the Company, until the merger was consummated, as share premium decrease as follows:
Capital contributions
Intangible contributed
Incorporation of financial debt (*)
(*) Financial debt taken by the Group in connect with Rizobacter acquisition
12/31/2019 | 12/31/2018 |
- | 294,041 |
- | 623,022 |
- | (11,627,501) |
- | (10,710,438) |
9.2. Share capital
The 27,116,174 shares issued to Bioceres LLC in exchange of its Bioceres Inc Crop Business and its equity interest in Bioceres Semillas, together with the 119,443 shares issued to exercise the Bioceres Semillas' tag-along and the 862,500 shares received by Bioceres LLC from the original founders of Union, were considered retrospectively in issued capital based on the assumption of those events have occurred at the beginning of the earliest period presented.
9.3. Shares summary
As of the date of this financial statement, we had (i) 100,000,000 ordinary shares ($0.0001 par value) authorized, (ii) 36,120,517 ordinary shares issued and outstanding, (iii) 1,000,000 preference shares ($0.0001 par value) authorized, (iv) no preference shares issued and outstanding, (v) 12,700,000 private placement warrants outstanding (5,200,000 of which were issued in connection with Union's IPO and 7,500,000 of which were issued in connection with the merger) classified as liability (Note 5.16) and (vi) 11,500,000 public warrants outstanding. Public warrants were classified as equity and its consideration was included in the "Share Premium" column.
Holders of the ordinary shares are entitled to one vote for each ordinary share.
F-33
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
9.4. Non-controllinginterests
There were no dividends paid to non-controlling interest in the periods ended December 31, 2019, and 2018.
10. CASH FLOW INFORMATION
Significant non-cash transactions related to investment and financing activities are as follows:
Investment activities
Investment in kind in other related parties (Note 14) Non-monetary contributions in joint ventures (Note 11)
Financing activities
Parent company investment
11. JOINT VENTURES AND ASSOCIATES
Liabilities
Trigall Genetics S.A.
Assets
Synertech Industrias S.A.
Indrasa Biotecnología S.A.
Changes in joint ventures and associates' investments:
12/31/2019 | 12/31/2018 |
588,857 | - |
250,000 | 97,096 |
838,857 | 97,096 |
12/31/2019 | 12/31/2018 |
- | (10,710,438) |
- | (10,710,438) |
12/31/2019 | 06/30/2019 |
1,704,901 | 1,970,903 |
1,704,901 | 1,970,903 |
12/31/2019 | 06/30/2019 |
24,232,713 | 25,297,376 |
38,268 | 23,652 |
24,270,981 | 25,321,028 |
As of the beginning of the period
Adjustment of opening net book amount for the application of IAS 29 Monetary contributions
Non-monetary contributions
Parent company investment
Loss of control of Indrasa Biotecnología S.A.
Revaluation of property, plant and equipment
Foreign currency translation
Share of profit or loss
As of the end of the period
12/31/2019 | 12/31/2018 |
23,350,125 | 17,059,757 |
- | 8,206,634 |
- | 127,728 |
250,000 | 97,096 |
- | 294,041 |
- | 10,591 |
355,702 | 301,235 |
(2,688,252) | (1,813,351) |
1,298,505 | 812,593 |
22,566,080 | 25,096,324 |
F-34
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
Share of profit or loss of joint ventures and associates:
Trigall Genetics S.A.
Semya S.A.
Synertech Industrias S.A.
Indrasa Biotecnología S.A.
12. SEGMENT INFORMATION
The following tables present information with respect to the Group´s reporting segments:
12/31/2019 | 12/31/2018 |
15,430 | (79,998) |
- | (21,961) |
1,267,200 | 906,547 |
15,875 | 8,005 |
1,298,505 | 812,593 |
Period ended December 31, 2019
Revenues
Sale of goods and services
Royalties
Others
Government grants
Initial recognition and changes in the fair value of biological assets
Total
Cost of sales
Gross margin per segment % of Segment Revenue
Period ended December 31, 2018
Revenues
Sale of goods and services
Royalties
Others
Government grants
Total
Cost of sales
Gross margin per segment % of Segment Revenue
Seed and | |||
integrated | |||
products | Crop protection | Crop nutrition | Consolidated |
18,191,663 | 50,376,063 | 28,718,480 | 97,286,206 |
1,216,161 | - | - | 1,216,161 |
24,236 | - | - | 24,236 |
- | 719,343 | - | 719,343 |
19,432,060 | 51,095,406 | 28,718,480 | 99,245,946 |
(7,257,723) | (28,626,084) | (17,423,995) | (53,307,802) |
12,174,337 | 22,469,322 | 11,294,485 | 45,938,144 |
63% | 44% | 39% | 46% |
Seed and | |||
integrated | |||
products | Crop protection | Crop nutrition | Consolidated |
18,962,636 | 46,435,705 | 26,141,232 | 91,539,573 |
518,933 | - | - | 518,933 |
12,960 | - | - | 12,960 |
19,494,529 | 46,435,705 | 26,141,232 | 92,071,466 |
(6,285,219) | (26,078,960) | (15,288,500) | (47,652,679) |
13,209,310 | 20,356,745 | 10,852,732 | 44,418,787 |
68% | 44% | 42% | 48% |
F-35 |
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
13. FINANCIAL INSTRUMENTS - RISK MANAGEMENT
The following tables show additional information required under IFRS 7 on the financial assets and liabilities recorded as of December 31, 2019 and June 30, 2019.
Financial asset
Cash and cash equivalents Other financial assets Trade receivables Other receivables (*)
Total
Mandatorily measured at fair | |||
Amortized cost | value through profit or loss | ||
12/31/2019 | 06/30/2019 | 12/31/2019 | 06/30/2019 |
5,080,613 | 3,450,873 | 5,488,245 | - |
4,703,869 | 4,703,688 | 649,199 | 356,233 |
77,760,561 | 59,236,377 | - | - |
2,286,405 | 1,566,732 | - | - |
89,831,448 | 68,957,670 | 6,137,444 | 356,233 |
(*) Advances expenses and tax balances are not included.
Financial liability
Trade Payables and other payables
Borrowings
Employee benefits and social security Financed payment - Acquisition of business Warrants
Total
Financial instruments measured at fair value
Measurement at fair value at 12/31/2019
Financial assets at fair value
Other financial assets
US Treasury bills
Financial liabilities valued at fair value Private warrants
Measurement at fair value at 06/30/2019
Financial assets at fair value
Other financial assets
Financial liabilities valued at fair value Private warrants
Estimation of fair value
Mandatorily measured at fair | |||
Amortized cost | value through profit or loss | ||
12/31/2019 | 06/30/2019 | 12/31/2019 | 06/30/2019 |
55,808,808 | 41,031,148 | - | - |
111,165,575 | 103,556,730 | - | - |
4,863,156 | 5,357,218 | - | - |
- | 2,826,611 | - | - |
- | - | 1,302,524 | 2,861,511 |
171,837,539 | 152,771,707 | 1,302,524 | 2,861,511 |
Level 1 | Level 2 | Level 3 | |
649,199 | - | - | |
5,488,245 | - | - | |
- | - | 1,302,524 | |
Level 1 | Level 2 | Level 3 | |
356,233 | - | - | |
- | - | 2,861,511 |
The fair value of marketable securities and US Treasury Bills is calculated using the market approach using quoted prices in active markets for identical assets. The quoted market price used for financial assets held by the Group is the current bid price. These instruments are included in level 1.
F-36
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
The Group's financial liabilities, which were not traded in an active market were determined using valuation techniques that maximize the use of available market information, and thus rely as little as possible on specific estimates of the entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instruments are included in level 2.
If one or more of the significant inputs is not based on observable market data, the instruments are included in level 3.
The model and inputs used to value the Private warrants at its fair value is mentioned in Note 5.16. The sensitivity analysis was based on a 5% change in the volatility of instrument. These change in isolation would have increased / decreased the amount of the financial liability by $2.3 million and $0.6 million if the volatility was 34.14% or 24.14%, respectively.
The Group's policy is to recognize transfers between different categories of the fair value hierarchy at the time they occur or when there are changes in the circumstances that cause the transfer.
There were no transfers between levels of the fair value hierarchy. There were no changes in economic or business circumstances affecting fair value.
Financial instruments not measured at fair value
The financial instruments not measured at fair value include cash and cash equivalents, trade accounts receivable, other accounts receivable, certain other financial assets, trade payables and other payables, borrowings, employee benefits and social security and financed payments.
The carrying value of financial instruments not measured at fair value does not differ significantly from their fair value, except for borrowings (Note 5.11).
14. SHAREHOLDERS AND OTHER RELATED PARTIES BALANCES AND TRANSACTIONS
During the periods ended December 31, 2019 and December 31, 2018 the transactions between the Group and related parties, and the related balances owed by and to them, are as follows:
Amount of the transactions of the period ended | ||||||||||
Party | Transaction type | 12/31/2019 | 12/31/2018 | |||||||
Joint ventures and associates | Sales and services | 3,614,799 | 2,221,306 | |||||||
Joint ventures and associates | Purchases of goods and services | (13,910,670) | (10,939,567) | |||||||
Joint ventures and associates | Equity contributions | 250,000 | 518,865 | |||||||
Joint ventures and associates | Net loans granted / (cancelled) | - | (6,410,011) | |||||||
Joint ventures | Interest gain | - | 42,202 | |||||||
Salaries, social security benefits and other | ||||||||||
Key management personnel | benefits | (3,840,825) | (1,670,232) | |||||||
Key management personnel | Loans granted | - | 499,867 | |||||||
Key management personnel | Interest gain | 23,537 | 1,459 | |||||||
Shareholders and other related parties | Sales of goods and services | 323,159 | 1,366,014 | |||||||
Shareholders and other related parties | Purchases of goods and services | (213,874) | (253,639) | |||||||
Shareholders and other related parties | Net loans granted/(cancelled) | - | 404,459 | |||||||
Shareholders and other related parties | Interest gain | - | 18,238 | |||||||
Shareholders and other related parties | In-kind contributions (Note 5.6) | 588,857 | - | |||||||
Parent company | Interest gain/(lost) | 391,537 | - | |||||||
Parent company | Purchases of goods and services | (95 | ) | (56,514 | ) | |||||
Total | (12,773,575 | ) | (14,257,553 | ) | ||||||
F-37 | ||||||||||
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
Amounts receivable from related parties | ||||||||
Party | Transaction type | 12/31/2019 | 06/30/2019 | |||||
Parent company | Trade debtors | 439,140 | 440,268 | |||||
Shareholders and other related parties | Trade receivables | 250,438 | 467,743 | |||||
Shareholders and other related parties | Allowance for impairment | (30,236) | (75,596) | |||||
Other receivables - Other related parties | Other receivables | 2,516 | 10,971 | |||||
Joint ventures and associates | Trade debtors | 1,260,427 | 2,369 | |||||
Joint ventures and associates | Other receivables | 485,156 | 250,783 | |||||
Total | 2,407,441 | 1,096,538 | ||||||
Amounts payable to related parties | ||||||||
Party | Transaction type | 12/31/2019 | 06/30/2019 | |||||
Parent company | Trade creditors | (99,037) | (1,568,036) | |||||
Parents companies and related parties to | ||||||||
Parents | Net loans payables | (17,850,542) | (17,757,907) | |||||
Parent company | Consideration payment Semya acquisition | (575,604) | (575,604) | |||||
Salaries, social security benefits and other | ||||||||
Key management personnel | benefits | (2,039,168) | (2,312,253) | |||||
Shareholders and other related parties | Trade and other payables | (1,657,580) | (1,796,932) | |||||
Joint ventures and associates | Trade and other payables | (13,949,951 | ) | (4,805,149 | ) | |||
Total | (36,171,882 | ) | (28,815,881 | ) | ||||
15. KEY MANAGEMENT PERSONNEL COMPENSATION
The compensation of directors and other members of key management personnel, including social contributions and other benefits, was as follows for the period ended December 31, 2019, and 2018.
Salaries, social security and other benefits Share-based incentives
Total
12/31/2019 | 12/31/2018 |
1,973,491 | 1,670,232 |
1,867,334 | - |
3,840,825 | 1,670,232 |
F-38
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
16. SHARE-BASEDPAYMENTSIncentive payments based on Parent shares
On August 7, 2019, pursuant to the listing of Bioceres Crop Solutions Corp. on the New York Stock Exchange, the Board of Directors of Bioceres S.A., approved the cancellation of the stock grant incentive plan of Bioceres S.A. for Rizobacter Senior Management. At the same date, the Board of Directors of Bioceres S.A. approved the issuance of 36,000 ordinary shares to each of the members of the Rizobacter Senior Management team.
The shares issued by Bioceres S.A. were valued at measurement date at $5.53 per share as described in Note 2.6.
Incentive payments based on options
In December 2019, purchase options were granted with respect to 1,200,000 ordinary shares for certain executives and directors of the Group.
The exercise price of the stock options is USD 4.55, and they are vested when the beneficiaries have served a period of service since the grant date until each vesting period described below. The beneficiaries must remain in the Company or subsidiary as of the date of exercising the option to exercise it. The stock options expire on October 31, 2029.
Options can be exercised for a period of up to three years, with 1/3 vesting every 12 months, and on a cashless basis at their volume weighted average price ("VWAP") of the ordinary shares during twenty-day period to the date of exercise.
The fair value of the stock options at the grant date was estimated using the "Black-Scholes" model considering the terms and conditions under which the options on actions were granted and adjusted to consider the possible dilutive effect of the future exercise of options.
Factor | Incentive option plan | |
Weighted average fair value of shares | USD 5.42 | |
Exercise price | USD 4.55 | |
Weighted average expected volatility (*) | 29.69% | |
Dividend rate | 0% | |
Weighted average risk-free interest rate | 1.66% | |
Weighted average expected life | 9.89 years | |
Weighted average fair value of stock options at measurement date | USD 2.47 |
(*) Implied volatility of Public warrants
There are no market-related performance conditions or non-vesting conditions that should be considered for determining the fair value of options.
The Group estimates that 100% of the share options will be exercised, taking into account historical patterns of executives maintaining their jobs and the probability of the exercising the options. This estimate is reviewed at the end of each annual or interim period.
F-39
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
The following table shows the weighted average amount and exercise price and the movements of the stock options of executives and directors of the Group during the six-month period ended December 31, 2019 and 2018.
At the beginning Granted during the period Annulled during the period Exercised during the period Expired during the period Effective at period
12/31/2019 | 31/12/2018 | ||
Number of | Exercise | Number of | Exercise |
options | price | options | price |
- | - | - | - |
1,200,000 | 4,55 | - | - |
- | - | - | - |
- | - | - | - |
- | - | - | - |
1,200,000 | 4,55 | - | - |
The charge of the plan recognized during the period amount to $ 1,069,629.
17. LEASES
As mentioned in Note 3, the Group began applying IFRS 16 and recognized the cumulative initial effect as an adjustment to the opening equity at the date of initial application. The comparative information was not restated.
The Group recognized a right-of-use asset and a lease liability.
The right-of-use asset was initially measured at the amount of the lease liability plus initial direct costs incurred adjusted from pre-payments made related to the lease. The right-of-use asset was measured at cost less accumulated depreciation and accumulated impairment.
The lease liability was initially measured at the present value of the lease payments payable over the lease term, discounted at the rate implicit in the lease if that can be readily determined. If that rate could not be readily determined, the Group use its incremental borrowing rate.
In applying IFRS 16 for the first time, the Group has used the following practical expedients permitted by the standard: (i) the use of a single discount rate to a portfolio of leases with reasonably similar characteristics, (ii) reliance on previous assessments on whether leases are onerous, (iii) the accounting for operating leases with a remaining lease term of less than 12 months as at 1 July 2019 as short-term leases, (iv) the exclusion of initial direct costs for the measurement of the right-of-use asset at the date of initial application, and (v) the use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease.
The information about the right of use and liabilities related with lease assets, are as follows:
Lease liability
Operating lease commitments as at June 30,2019
Discounted using the lessee's incremental borrowing rate of at the date of initial application Add: finance lease liabilities recognized as at June 30,2019
Lease liability recognized as at 1 July 2019
Lease Liabilities
Non-current
Current
Total
782,791 |
674,360 |
848,817 |
1,523,177 |
664,980 |
858,197 |
1,523,177 |
F-40
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
Right-of-use leased asset
Cost
Book value at the beginning of the period
Additions for initial application of IFRS 16
Additions of the period
Book value at the end of the period
Depreciation
Accumulated depreciation at the beginning of the period Depreciation of the period
Accumulated depreciation at the end of the period
Total
Lease liability
Book value at the beginning of the period
Additions for initial application of IFRS 16
Additions of the period
Interest expenses, exchange differences and inflation effects Payments of the period
Total
Lease Liabilities
Non-current
Current
Total
The recognized right-of-use assets relate to the following types of assets:
12/31/2019 |
- |
1,523,177 |
351,731 |
1,874,908 |
759,045 |
308,030 |
1,067,075 |
807,833 |
12/31/2019 |
- |
1,523,177 |
279,862 |
(373,813) |
(243,414) |
1,185,812 |
12/31/2019 |
528,179 |
657,633 |
1,185,812 |
Machinery and equipment
Vehicles
Equipment and computer software
Land and buildings
18. CONTINGENCIES, COMMITMENTS AND RESTRICTIONS ON THE DISTRIBUTION OF PROFITS
12/31/2019 | 7/1/2019 |
413,321 | 413,321 |
384,438 | 384,438 |
390,125 | 390,125 |
687,024 | 335,293 |
1,874,908 | 1,523,177 |
In order to guarantee the obligations assumed on the Syndicated loan (incorporated in Bank borrowings in Note 5.11), Rizobacter signed and granted a pledge of a fixed term certificate constituted on September 11, 2017, and extended on December 9, 2019 for $4.4 million disclosed as "Restricted short-term deposit" in "Other financials assets" (Note 5.2).
As of December 31, 2019, Rizobacter had $1 million of debt secured by checks from customers.
There were no other significant changes to the contingencies, commitments and restrictions on the distribution of profits from the disclosed made in the Consolidated financial statement as of June 30, 2019.
F-41
BIOCERES CROP SOLUTIONS CORP.
NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in US Dollars, except otherwise indicated)
19. EVENTS OCCURRING AFTER THE REPORTING PERIOD
On February 14, 2020, the Group completed the offering of US$7.6 million under Series II of its corporate bonds due 2021. The Group intends to use the proceeds to improve its debt profile as well as for general corporate purposes, including working capital to further support international growth.
Subsequent to December 31, 2019, there have been no other situations or circumstances that may require significant adjustments or further disclosure in these Unaudited interim condensed consolidated financial statements that were not mentioned above.
F-42
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Bioceres Crop Solutions Corp. published this content on 06 March 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 March 2020 21:14:11 UTC