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Amira Nature Foods Ltd Announces Results For The Six Months Ended September 30, 2015

The following excerpt is from the company's SEC filing.

DUBAI, United Arab Emirates – April 26, 2016 – Amira Nature Foods Ltd (the “Company;” or “Amira” NYSE: ANFI), a leading global provider of branded, packaged Indian specialty rice, today reported financial results for the six months ended September 30, 2015.

Six Months Ended September 30, 2015 versus Six Months Ended September 30, 2014:

Revenue declined by 17.3% to $231.7 million compared to $280.2 million

Adjusted EBITDA of $30.5 million compared to $38.8 million

Adjusted EBITDA margin of 13.2%

Adjusted profits after tax was $13.5 million compared to $19.8 million

Adjust ed earnings per share (“EPS”) was $0.38 compared to $0.55

Total debt to last twelve months Adjusted EBITDA of 2.1x

Bruce Wacha, Amira’s Chief Financial Officer stated, “We faced an extremely challenging first half of fiscal 2016 which included current industry trends toward lower pricing, currency translation, three years of re-audits, certain litigations and other temporary short term related business disruptions that required increased financial resources and management time. Nonetheless, we were able to maintain our EBITDA margins at their historical levels and remain profitable. Our business began to recover in the fourth quarter of our fiscal year. We are committed to enhancing our customer relationships and returning to growth.”

Six Months Ended September 30, 2015 Results

Revenue decreased by $48.5 million, or 17.3%, to $231.7 million in the six months ended September 30, 2015 from $280.2 million in the six months ended September 30, 2014. The decline in revenue was driven in part by what management believes to be certain temporary short term challenges, including among other things, current industry trends toward lower pricing, currency translation, obtaining three years of re-audits of the Company’s financial statements, successful completion of a forensic investigation, ongoing litigation and certain business matters which required increased financial resources and management time be devoted to matters that did not generate revenue.

During the six months ended September 30, 2015, the Company’s Indian sales increased by $11.4 million or 10.3% to $122.6 million from $111.2 million in the same period of 2014. Revenue growth in India was negatively impacted by the depreciation of the Indian rupee against the U.S. dollar during the six months ended September 30, 2015 as compared to September 30, 2014. Sales in India grew by approximately 17.4% during the six months ended September 30, 2015 as compared to the same period in 2014, when measured in Indian rupees. Sales in India benefited from an increase in distribution which was offset in part by lower prices net of an improved mix. The Company’s International sales decreased by $59.9 million or 35.4% to $109.1 million from $169.0 million for the same period in 2014. International sales were impacted by reduced volumes due in large part to business disruptions which management believes to be short term in nature. During the six months ended September 30, 2015, revenue from international sales contributed 47.1% of total sales, while revenue from Indian sales contributed 52.9% of total sales. During the six month period ended September 30, 2014, revenue from international sales contributed 60.3% of total sales, while revenue from Indian sales contributed 39.7% of total sales.

During the six months ended September 30, 2015, sales of Amira branded and third party branded products declined by $49.0 million or 17.6% to $228.6 million from $277.6 million during the same period in 2014. Amira branded and third party branded sales contribution to 98.7% of total sales for the period, compared to 99.1% in 2014 for the same period. During the six months ended September 30, 2015, institutional sales were $3.1 million or 1.3% of total sales for the period. During the six months ended September 30, 2014, institutional sales were $2.6 million or 0.9% of total sales for the period.

During the six months ended September 30, 2015, adjusted EBITDA decreased $8.3 million to $30.5 million from $38.8 million in the prior six months period. Adjusted EBITDA margins decreased by 60 basis points to 13.2% for the six months ended September 30, 2015, which is in-line with the Company’s three year historical average of 13.2%. The Company’s effective tax rate was 15.7% for the period, compared to 15.9% in the prior year’s period. Adjusted profit after tax was $13.5 million for period, compared to $19.8 million for the prior year’s period. Adjusted EPS was $0.38 for the period compared to $0.55 for the prior year’s period. A reconciliation of adjusted EBITDA, adjusted EBITDA margin, adjusted profit after tax and adjusted EPS is provided in the

“Non-IFRS Financial Measures”

section of this release.

For the trailing twelve months ended September 30, 2015, the Company had sales of $651.6 million, adjusted EBITDA of $91.6 million and adjusted EPS of $1.39 compared to revenue of $342.0 million, adjusted EBITDA of $41.9 million and adjusted EPS of $0.38 per share for the twelve month period ended June 30, 2012 which proceeded its initial public offering.

Balance Sheet and Cash Flow Highlights

As of September 30, 2015, the Company’s cash and cash equivalents were $20.7 million (not including $8.2 million of short term investments, deposits which are available on demand) and adjusted net working capital was $374.8 million. Total debt was $191.2 million as of September 30, 2015, compared to $211.0 million at March 31, 2015 and total debt to LTM adjusted EBITDA remained 2.1x. As of September 30, 2015, inventories were $233.7 million, compared to $262.9 million, trade receivables were $168.3 million

compared to $130.4 million and trade payables were $27.7 million compared to $34.3 million at March 31, 2015, respectively. Reconciliations of adjusted net working capital to the IFRS measures of working capital and total current and non-current debt, and LTM adjusted EBITDA respectively, are provided in the

section of this release.

Outlook

The Company will look to provide additional commentary around its current business conditions when it releases its full year Fiscal 2016 results. It also reiterated the statements made in its Form 6K filed with the Securities & Exchange Commission on January 25, 2016, where it noted that as a result of the three years of audits, certain litigations and other related business disruptions that it has been an extremely challenging year and that it looks forward to a return to normalcy and growth for the business for the fiscal year ending March 31, 2017.

The trade receivables balance included $162.4 million of receivables that are not past due, $5.1 million due less than three months, $0.5 million due less than six months, $0.3 million due less than one year and $0.9 million due more than one year.

About Amira Nature Foods Ltd

Founded in 1915, Amira has evolved into a leading global provider of branded packaged specialty rice and other food products, with sales in more than 60 countries around the world. The Company primarily sells Basmati rice, which is a premium long-grain rice grown only in certain regions of the Indian sub-continent, under its flagship Amira brand as well as under other third party brands. Amira sells its products through a broad distribution network in both the developed and emerging markets. The Company’s global headquarters are in Dubai, United Arab Emirates, and it also has offices in India, Malaysia, Singapore, Germany, the United Kingdom, and the United States. Amira Nature Foods Ltd is listed on the New York Stock Exchange (NYSE) under the ticker symbol “ANFI.” For more information, please visit

www.amira.net

On January 25, 2016, Amira Nature Foods released its 20-F filing for the fiscal year ended March 31, 2015. This filing can be found on Amira’s website at

https://www.amira.net/investor/sec-filings

/ or upon request from Amira’s investor relations team.

Safe Harbor for Forward-Looking Statements

This press release contains statements of a forward-looking nature. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by words or phrases such as “may,” “will,” “except,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “is/are likely to,” “future” or other similar expressions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. There is no assurance that our current expectations and projections are accurate. These forward-looking statements include, but are not limited to:

our goals and strategies;

our operations and expansion plans;

our future business development, results of operations, financial condition and financial statements;

our ability to protect our intellectual property rights;

projected revenue, EBITDA, adjusted EBITDA, profits, adjusted profits, earnings, adjusted earnings and other estimated financial information;

our ability to maintain strong relationships with our customers and suppliers;

governmental policies regarding our industry; and

the impact of legal proceedings.

You should not place undue reliance on forward-looking statements and you should read these statements in conjunction with the risk factors disclosed in “Risk Factors” appearing in Amira’s Annual Reports found on the SEC’s website located at www.sec.gov. Those risks are not exhaustive. We operate in a rapidly evolving environment. New risk factors emerge from time to time, and it is impossible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ from those contained in any forward-looking statement. We do not undertake any obligation to update or revise the forward-looking statements except as required under applicable law.

For Investor Inquiries:

Bruce Wacha, 646-779-1984

bruce.wacha@theamiragroup.com

Condensed Consolidated Statements of Financial Position

(Amounts in USD)

(Unaudited)

March 31, 2015

(Audited)

ASSETS

Non-current

Property, plant and equipment

20,749,947

22,556,188

Goodwill

1,448,701

1,405,057

Other intangible assets

1,645,890

1,693,856

Other long-term financial assets

439,971

398,511

Total non-current assets

24,284,509

26,053,612

Current

Inventories

233,739,060

262,887,805

Trade receivables

168,343,825

130,398,610

Derivative financial assets

402,627

638,467

Other financial assets

9,222,544

9,956,265

Prepayments

14,994,227

19,610,778

Other current assets

820,080

865,458

Cash and cash equivalents

20,674,298

46,660,922

Total current assets

448,196,661

471,018,305

Total assets

472,481,170

497,071,917

EQUITY AND LIABILITIES

Equity

Share capital

Share premium

84,508,496

82,896,596

Other reserves

(12,167,797

(6,013,634

Retained earnings

123,433,290

116,467,681

Equity attributable to shareholders of the Company

195,783,209

193,359,763

Equity attributable to non-controlling interest

28,590,706

27,965,362

Total equity

224,373,915

221,325,125

Liabilities

Non-current liabilities

Defined benefit obligations

378,766

331,041

958,791

1,465,707

Deferred tax liabilities (Net)

3,848,029

6,217,065

Total non-current liabilities

5,185,586

8,013,813

Current liabilities

Trade payables

27,683,095

34,336,831

190,191,620

209,578,866

Current tax liabilities (net)

17,152,164

14,364,651

Derivative financial liabilities

976,946

280,560

Other financial liabilities

5,865,155

6,977,989

Other current liabilities

1,052,689

2,194,082

Total current liabilities

242,921,669

267,732,979

Total liabilities

248,107,255

275,746,792

Total equity and liabilities

Condensed Consolidated Statements of Profit or Loss

Six months ended

September 30, 2015

September 30, 2014

231,734,884

280,200,545

Other income

106,701

74,659

Cost of material

(143,279,652

(267,672,107

Change in inventory of finished goods

(38,825,651

49,112,448

Employee benefit expenses

(6,890,500

(5,419,006

Depreciation and amortization

(1,059,994

(1,202,179

Freight, forwarding and handling expenses

(5,004,037

(9,416,138

Other expenses

(11,758,367

(11,566,530

25,023,384

34,111,692

Finance costs

(15,239,053

(15,137,450

Finance income

936,237

1,083,361

Other gains and (losses)

156,879

3,291,671

Profit before tax for the period

10,877,447

23,349,274

Income tax expense

(1,703,371

(3,702,122

Profit after tax for the period

9,174,076

19,647,152

Profit after tax attributable to:

Shareholders of the Company

6,965,609

15,577,093

Non-controlling interest

2,208,467

4,070,059

Earnings per share

Basic earnings per share

Diluted earnings per share

Amira Nature Foods Ltd

Condensed Consolidated Statements of Comprehensive Income

Other comprehensive income/(loss)

Items that may be reclassified subsequently to profit or loss:

Available for sale financial assets:

Current period gain/(loss)

21,632

30,129

Reclassification to profit or loss

(7,388

(5,400

14,244

24,729

Cash flow hedging reserve:

1,667,700

(2,587,545

312,655

(607,190

Currency translation reserve

(8,101,255

(3,333,979

Other comprehensive income/(loss) for the period, net of tax

(8,087,011

(3,916,440

Total comprehensive income for the period

1,087,065

15,730,712

Total comprehensive income/(loss) for the period attributable to:

461,722

12,429,923

625,343

3,300,789

Condensed Consolidated Statements of Changes in Equity (unaudited)

Other reserves

capital

premium

Share-based

compensation

Reserve for

available for

sale

translation

Reserve

Cash flow

hedging

Restructuring

Reserve

earnings

attributable to

of the

non -

controlling

interest

Total equity

Balance as at April 1, 2014 (Audited)

82,804,750

2,863,362

(30,127

(16,018,401

473,664

9,398,927

74,334,687

153,835,977

18,005,030

171,841,007

Issue of shares

54,996

55,000

Repurchase of shares from ex-director and cancelled

(38,186

(38,190

Share based compensation

Profit after tax for the period

Other comprehensive income /(loss) for the period

19,871

(2,679,116

(487,925

(3,147,170

(769,270

Total comprehensive income/(loss) for the period

Balance as at September 30, 2014 (Unaudited)

82,821,560

(10,256

(18,697,517

(14,261

89,911,780

166,282,710

21,305,819

187,588,529

Balance as at April 1, 2015 (Audited)

4,582,399

(6,634

(19,988,326

1,611,900

(1,612,000

1,961,725

11,455

(6,515,343

(6,503,888

(1,583,123

461,721

625,344

Balance as at September 30, 2015 (Unaudited)

4,932,124

(26,503,669

Note: Reported results and other information herein are preliminary and not final until the filing of the Company’s annual report on Form 20-F with the Securities and Exchange Commission and therefore remain subject to adjustment.

Condensed Consolidated Statements of Cash Flows

Six months ended

(A) CASH FLOW FROM OPERATING ACTIVITIES

Adjustments for non-cash items

2,701,241

2,297,255

Adjustments for non-operating incomes and expenses

14,299,818

14,053,132

Changes in operating assets and liabilities

(29,243,258

(41,709,501

(1,364,752

(2,009,840

Income taxes paid

(85,825

(509,525

Net cash used in operating activities

(1,450,577

(2,519,365

(B) CASH FLOW FROM INVESTING ACTIVITIES

Purchase of property, plant and equipment

(454,548

(1,320,860

Purchase of intangible assets

Advance for property, plant and equipment

31,685

Proceeds from sale of property, plant and equipment

Proceeds from term deposits

7,892,671

9,063,340

Investments in term deposits

(7,437,166

(7,663,164

Purchase of short term investments

(33,200

Interest income

467,630

364,706

Net cash generated from investing activities

503,432

412,270

(C) CASH FLOWS FROM FINANCING ACTIVITIES

Net (repayment of)/ proceeds from short term debt

(9,034,584

4,467,758

Proceeds from long term debt

19,500

18,150

Repayment of long term debt

(459,085

(716,850

Interest paid

(13,334,153

(12,750,565

Net cash used in financing activities

(22,808,322

(9,019,697

Effect of change in exchange rate on cash and cash equivalents

(2,231,157

(801,820

Net decrease in cash and cash equivalents (A+B+C+D)

(25,986,624

(11,928,612

Cash and cash equivalents at the beginning of the period

37,606,098

Cash and cash equivalents at the end of the period

25,677,486

In evaluating our business, we consider and use the non-IFRS measures EBITDA, adjusted EBITDA, adjusted profit after tax, adjusted earnings per share, adjusted net working capital and net debt as supplemental measures to review and assess our operating performance. The presentation of these non-IFRS financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with IFRS. We define: (1) EBITDA as profit after tax plus finance costs (net of finance income), income tax expense and depreciation and amortization; (2) adjusted EBITDA, as EBITDA plus non-cash expense for share-based compensation and one-time legal & professional charges for defending against a class action lawsuits for six months ended September 30, 2015 and 2014, respectively (3) adjusted profit after tax, as profit after tax plus non-cash expense for share-based compensation and one-time legal & professional charges for defending against a class action lawsuits for six months ended September 30, 2015 and 2014, respectively; (4) adjusted earnings per share as the quotient of: (a) adjusted profit after tax and (b) the sum of our weighted average number of shares (including dilutive impact of share options granted) for the applicable period and the ordinary shares subject to the exchange agreement between us and the non-controlling shareholders of Amira India; (5) adjusted net working capital as total current assets minus: (a) total current liabilities (b) cash and cash equivalents and plus current debt; and (6) net debt as total current and non-current debt minus cash and cash equivalents.

We use both EBITDA and adjusted EBITDA as measures of operating performance to assist in comparing performance from period to period on a consistent basis, as a measure for planning and forecasting overall expectations, for evaluating actual results against such expectations and as a performance evaluation metric, including as part of assessing and administering our executive and employee incentive compensation programs. We believe that the use of both EBITDA and adjusted EBITDA as non-IFRS measures facilitates investors’ assessment of our operating performance from period to period and from company to company by backing out potential differences caused by variations in items such as capital structure (affecting relative finance or interest expenses), non-recurring IPO-related expenses, one time legal and professional charges for defending class action suits, the book amortization of intangibles (affecting relative amortization expenses), the age and book value of property and equipment (affecting relative depreciation expenses) and other non-cash expenses. We also present these non-IFRS measures because we believe they are frequently used by securities analysts, investors and other interested parties as measures of the financial performance of companies in our industry.

These non-IFRS financial measures are not defined under IFRS and are not presented in accordance with IFRS. These non-IFRS financial measures have limitations as analytical tool, and when assessing our operating performance, investors should not consider it in isolation, or as a substitute for profit/ (loss) or other consolidated statements of operations data prepared in accordance with IFRS. Some of these limitations include, but are not limited to:

it does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;

it does not reflect changes in, or cash requirements for, our working capital needs;

it does not reflect the finance or interest expenses, or the cash requirements necessary to service interest or principal payments, on our debt;

it does not reflect income taxes or the cash requirements for any tax payments;

although depreciation and amortization are non-cash charges, the assets being depreciated and amortized often will have to be replaced in the future, and adjusted net profit, EBITDA and Adjusted EBITDA do not reflect any cash requirements for such replacements;

other companies may calculate EBITDA, Adjusted EBITDA and other non-IFRS measures differently than we do, limiting the usefulness of this non-IFRS measure as a comparative measure.

We compensate for these limitations by relying primarily on our IFRS results and using non-IFRS measures only as a supplemental information.

We present adjusted EBITDA, adjusted profit after tax, adjusted earnings per share, adjusted net working capital and net debt because we believe these measures provide additional metrics to evaluate our operations and, when considered with both our IFRS results and the reconciliation to profit after tax, basic and diluted earnings per share, working capital and total current and non-current debt, respectively, provide a more complete understanding of our business than could be obtained absent this disclosure. We also believe that these non-IFRS financial measures are useful to investors in assessing the operating performance of our business after reflecting the adjustments described above.

Reported results and other information herein are preliminary and not final until the filing of the Company’s annual report on Form 20-F with the Securities and Exchange Commission and therefore remain subject to adjustment.

In the following tables we have provided reconciliation of the non-IFRS measures to the most directly comparable IFRS measure:

Reconciliation of profit after tax to EBITDA and adjusted EBITDA:

Profit after tax (PAT)

Add: Income tax expense

Add: Finance costs (net of finance income)

14,302,816

14,054,089

Add: Depreciation and amortization

26,240,257

38,605,542

Add: Non-cash expenses for share-based compensation

1,961,726

187,222

Add: One-time legal & professional charges for defending against a class action lawsuit

2,330,733

30,532,716

38,792,764

Reconciliation of profit after tax to adjusted profit after tax:

13,466,535

19,834,374

Reconciliation of earnings per share and adjusted earnings per share:

Profit attributable to Shareholders of the Company

Weighted average number of shares (for basic earnings per share)

28,780,164

28,675,801

Dilutive impact of share options as converted in equivalent number of shares

245,346

Weighted average number of shares (for diluted earnings per share)

(D) = (B) + (C)

28,921,147

Basic earnings per share as per IFRS

(A) ÷ (B)

Diluted earnings per share as per IFRS

(A) ÷ (D)

Shares issuable under share exchange agreement for non-controlling interest

7,005,434

Number of shares outstanding including shares for non-controlling interest

(F) = (D) + (E)

35,785,598

35,926,581

(G) ÷ (F)

Reconciliation of working capital (total current assets minus total current liabilities) and adjusted net working capital:

As at March 31, 2015

(Amount in $)

Current assets:

Current liabilities:

Working Capital (Total current assets minus Total current liabilities)

205,274,992

203,285,326

Less: Cash and cash equivalents

Add: Current debt

Adjusted net working capital

374,792,314

366,203,270

Reconciliation of total current and non-current debt to net debt:

Non-current debt

Total current and non-current debt as per IFRS

191,150,411

211,044,573

Net debt

170,476,113

164,383,651

The above information was disclosed in a filing to the SEC. To see the filing, click here.

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