GLANCY BINKOW & GOLDBERG LLP Lionel Z. Glancy Robert V ... · Amira Nature Foods Ltd (the...

CLASS ACTION COMPLAINT

GLANCY BINKOW & GOLDBERG LLP

Lionel Z. Glancy

Robert V. Prongay

Casey E. Sadler

1925 Century Park East, Suite 2100

Los Angeles, CA 90067

Telephone: (310) 201-9150

Facsimile: (310) 201-9160

LAW OFFICES OF HOWARD G. SMITH

Howard G. Smith

3070 Bristol Pike, Suite 112

Bensalem, PA 19020

Telephone: (215) 638-4847

Facsimile: (215) 638-4867

Attorneys for Plaintiff

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

PLAINTIFF, Individually and on Behalf of

All Others Similarly Situated,

Plaintiff,

v.

AMIRA NATURE FOODS LTD, KARAN

A. CHANANA, and BRUCE C. WACHA,

Defendants.

Case No. DRAFT

CLASS ACTION COMPLAINT FOR

VIOLATIONS OF THE FEDERAL

SECURITIES LAWS

JURY TRIAL DEMANDED


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Plaintiff (“Plaintiff”), by and through his attorneys, alleges the following upon

information and belief, except as to those allegations concerning Plaintiff, which are alleged

upon personal knowledge. Plaintiff’s information and belief is based upon, among other things,

his counsel’s investigation, which includes without limitation: (a) review and analysis of

regulatory filings made by AMIRA NATURE FOODS LTD (“Amira” or the “Company”), with

the United States (“U.S.”) Securities and Exchange Commission (“SEC”); (b) review and

analysis of press releases and media reports issued by and disseminated by Amira; and (c) review

of other publicly available information concerning Amira.

NATURE OF THE ACTION AND OVERVIEW

1. This is a class action on behalf of purchasers of Amira securities between August

26, 2013 and February 8, 2015, inclusive (the “Class Period”), seeking to pursue remedies under

the Securities Exchange Act of 1934 (the “Exchange Act”).

2. Amira is a global provider of branded packaged Indian specialty rice, with sales in

over 60 countries. The Company sells Basmati rice, 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.

3. On February 9, 2015, Prescient Point Research Group published a research report

(the “Prescient Report”) about Amira alleging fraudulent activities. The Prescient Report

alleged, among other things, that Amira significantly inflated its international Basmati rice

revenues in fiscal years 2013 and 2014 and that over 50% of the Company’s consolidated sales


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could be fabricated. Additionally, the Prescient Report allegedly identified many undisclosed

related party entities and transactions that could be used to manipulate the routing of funds. The

Prescient Report also alleged that the Company intends to transfer $30 million of the $225

million newly raised debt capital to a related party in a sham real estate transaction.

4. On this news, shares of Amira declined $3.45 per share, nearly 26%, to close on

February 9, 2015, at $9.95 per share, on unusually heavy volume.

5. Throughout the Class Period, Defendants made false and/or misleading

statements, as well as failed to disclose material adverse facts about the Company’s business,

operations, and prospects. Specifically, Defendants made false and/or misleading statements

and/or failed to disclose: (1) that the Company was overstating its international Basmati revenue;

(2) that, as a result, the Company’s consolidated sales revenues were also overstated; (3) that the

Company was engaged in multiple undisclosed related party transactions; and (4) that, as a result

of the foregoing, Defendants’ statements about Amira’s business, operations, and prospects,

were false and misleading and/or lacked a reasonable basis.

6. As a result of Defendants’ wrongful acts and omissions, and the precipitous

decline in the market value of the Company’s securities, Plaintiff and other Class members have

suffered significant losses and damages.

JURISDICTION AND VENUE

7. The claims asserted herein arise under Sections 10(b) and 20(a) of the Exchange

Act (15 U.S.C. §§78j(b) and 78t(a)) and Rule 10b-5 promulgated thereunder by the SEC (17

C.F.R. § 240.10b-5).

8. This Court has jurisdiction over the subject matter of this action pursuant to 28

U.S.C. §1331 and Section 27 of the Exchange Act (15 U.S.C. §78aa).


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9. Venue is proper in this Judicial District pursuant to 28 U.S.C. §1391(b) and

Section 27 of the Exchange Act (15 U.S.C. §78aa(c)). Substantial acts in furtherance of the

alleged fraud or the effects of the fraud have occurred in this Judicial District. Many of the acts

charged herein, including the preparation and dissemination of materially false and/or misleading

information, occurred in substantial part in this Judicial District.





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.

PARTIES

11. Plaintiff, as set forth in the accompanying certification, incorporated by reference

herein, purchased Amira common stock during the Class Period, and suffered damages as a

result of the federal securities law violations and false and/or misleading statements and/or

material omissions alleged herein.

12. Defendant Amira is an British Virgin Islands corporation with its principal

executive offices located at 29E, A.U. Tower, Jumeirah Lake Towers, Dubai, United Arab

Emirates.

13. Defendant Karan A. Chanana (“Chanana”) was, at all relevant times, Chief

Executive Officer (“CEO”) and a director of Amira.


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14. Defendant Bruce C. Wacha (“Wacha”) was, at all relevant times, Chief Financial

Officer (“CFO”) of Amira.

15. Defendants Chanana and Wacha are collectively referred to hereinafter as the

“Individual Defendants.” The Individual Defendants, because of their positions with the

Company, possessed the power and authority to control the contents of Amira’s reports to the

SEC, press releases and presentations to securities analysts, money and portfolio managers and

institutional investors, i.e., the market. Each defendant was provided with copies of the

Company’s reports and press releases alleged herein to be misleading prior to, or shortly after,

their issuance and had the ability and opportunity to prevent their issuance or cause them to be

corrected. Because of their positions and access to material non-public information available to

them, each of these defendants knew that the adverse facts specified herein had not been

disclosed to, and were being concealed from, the public, and that the positive representations

which were being made were then materially false and/or misleading. The Individual

Defendants are liable for the false statements pleaded herein, as those statements were each

“group-published” information, the result of the collective actions of the Individual Defendants.

SUBSTANTIVE ALLEGATIONS

Background





developed and emerging markets. The Company’s global headquarters are in Dubai, United Arab


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Emirates, and it also has offices in India, Malaysia, Singapore, Germany, the United Kingdom,

and the United States.

Materially False and Misleading

Statements Issued During the Class Period

17. The Class Period begins on August 26, 2013. On this day, Amira issued a press

release entitled, “Amira Nature Foods Ltd Announces First Quarter Fiscal 2014 Financial

Results.” Therein, the Company, in relevant part, stated:

First Quarter Revenue Increased 37.6% to $110.3 Million

First Quarter EBITDA Increased 42.4% to $14.5 Million

Amira Nature Foods Ltd (the “Company”) (NYSE: ANFI), a leading global

provider of packaged Indian specialty rice, today reported financial results for the

first quarter ended June 30, 2013.

First Quarter Financial Highlights:

Revenue increased 37.6% to $110.3 million, compared to $80.2 million in

the first quarter of fiscal 2013

EBITDA increased 42.4% to $14.5 million, compared to $10.2 million

Profit after tax increased 124.5% to $7.3 million, compared to $3.3 million

Basic and diluted earnings per share(1) was $0.21 compared to $0.13

For better quarter-over-quarter comparability, after using 35.7 million

fully diluted shares, adjusted earnings per share was $0.21 compared to

$0.09 in the first quarter of fiscal 2013

Karan A. Chanana, Amira’s Chairman and Chief Executive Officer, stated, “We

are off to a strong start in fiscal 2014. In the first quarter, we generated robust

revenue and EBITDA growth, reflecting the continued strong demand for our

products and successful execution on our business strategy.”

Mr. Chanana continued, “In fiscal 2014, we believe we are positioned to benefit

from the progress we made to our business last fiscal year, including the addition

of new customers in both India and internationally and an expanded geographic

footprint. We recently announced the launch of the Amira Organic business

division, which we expect will enable us to enhance the strength of the Amira

brand product offering and capitalize on the growing global demand for organic

packaged foods for years to come.”

First Quarter Fiscal 2014 Results


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Revenue for the first quarter of fiscal 2014 increased 37.6% to $110.3 million,

compared to $80.2 million for the same period in fiscal 2013. The revenue

increase was primarily due to increased sales volume and prices both in India and

internationally. Revenue in the first quarter of fiscal 2014 for Amira and third

party branded products was 96.0% of total revenue, compared to 95.8% for the

first quarter of fiscal 2013.

Cost of materials including change in inventory of finished goods increased $21.6

million, or 32.8%, to $87.5 million in the first quarter of fiscal 2014 from $65.9

million in the first quarter of fiscal 2013. This increase primarily reflects the

growth in revenue. As a percentage of revenue, cost of material decreased to

79.3% in the first quarter of fiscal 2014, compared to 82.2% in the first quarter of

fiscal 2013, primarily due to improved operating efficiencies and economies of

scale.

EBITDA increased 42.4% to $14.5 million in the first quarter of fiscal 2014,

compared to $10.2 million in the same period last year. A reconciliation of

EBITDA to the IFRS measure of profit after tax is provided in the “Non-IFRS

Financial Measures” section of this release.

Profit after tax for the first quarter of fiscal 2014 increased 124.5% to $7.3

million, compared to $3.3 million in the quarter of fiscal 2013. Basic and diluted

earnings per share(1) was $0.21 compared to $0.13 for the first quarter of fiscal

2013.

For better quarter-over-quarter comparability, after using 35.7 million fully

diluted shares, adjusted earnings per share was $0.21 compared to $0.09 in the

first quarter of fiscal 2013. A reconciliation of adjusted earnings per share to basic

and diluted earnings per share is provided in the “Non-IFRS Financial Measures”

section of this release.

Balance Sheet and Cash Flow Highlights

At June 30, 2013, the Company’s cash and cash equivalents was $32.6 million

and adjusted net working capital was $226.6 million. Net debt (after deducting

cash and cash equivalents) as of June 30, 2013 was $107.7 million. As of June 30,

2013, inventory decreased $20.7 million to $160.8 million from $181.5 million as

of March 31, 2013. As of June 30, 2013, trade receivables were $62.4 million, a

decrease of $4.4 million from $66.8 million as of March 31, 2013. Reconciliations

of adjusted net working capital and net debt to the IFRS measures of working

capital and total current and non-current debt, respectively, are provided in the

“Non-IFRS Financial Measures” section of this release.

Fiscal 2014 Outlook


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The Company reiterates its previously issued guidance and continues to expect

full year fiscal 2014 revenue in the range of $480 million to $507 million and

EBITDA in the range of $62 million to $66 million. This is in line with long-term

guidance previously provided to the investment community in connection with

Amira’s initial public offering. We note that the Company’s guidance is based on

foreign exchange rates as of June 30, 2013 and takes into account the potential

impact of foreign currency fluctuations for the remainder of our fiscal year.

18. On November 11, 2013, Amira issued a press release entitled, “Amira Nature

Foods Ltd Announces Second Quarter Fiscal 2014 Financial Results.” Therein, the Company, in

relevant part, stated:

Second Quarter Revenue Increased 36.1% to $108.0 Million

Second Quarter EBITDA Increased 38.1% to $14.1 Million

Amira Nature Foods Ltd (the “Company”) (NYSE: ANFI), a leading global


second quarter and six months ended September 30, 2013.

Second Quarter Financial Highlights:

Revenue increased 36.1% to $108.0 million, compared to $79.4 million



Basic and diluted earnings per share (1) was $0.18 compared to $0.09

(All comparisons above are to the second quarter of fiscal 2013)


are pleased to report strong second quarter financial results, as our revenue

increased 36.1% and EBITDA grew 38.1%. Our results reflect our ability to

consistently add new customers in India and internationally, enter new markets as

well as the continued growing demand for our premium product offerings.”

Mr. Chanana continued, “As we begin the second half of fiscal 2014, we are well

positioned to deliver another strong year. Our business continues to benefit from

our successful execution on our strategic initiatives, including our expanding

product portfolio, which includes our recently launched Amira Organic business

division. We have been encouraged by our customers’ responses to our organic

products and are excited about the long-term potential for this segment of our

business. Based on our year-to-date results and outlook for the remainder of the

year, we are reiterating our annual revenue and EBITDA guidance.”


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Second Quarter Fiscal 2014 Results

Revenue for the second quarter of fiscal 2014 increased 36.1% to $108.0 million,


increase was primarily due to increased sales volume both in India and

internationally.


million, or 34.0%, to $82.0 million in the second quarter of fiscal 2014 from

$61.2 million in the second quarter of fiscal 2013. This increase primarily reflects

the growth in revenue. As a percentage of revenue, cost of material decreased to

75.9% in the second quarter of fiscal 2014, compared to 77.1% in the second

quarter of fiscal 2013, primarily due to improved operating efficiencies and

economies of scale.

EBITDA increased 38.1% to $14.1 million in the second quarter of fiscal 2014,


EBITDA to the IFRS measure of profit after tax is provided in the “Non-IFRS


Profit after tax for the second quarter of fiscal 2014 increased 90.0% to $6.3

million, compared to $3.3 million in the quarter of fiscal 2013. Basic and diluted

earnings per share(1) was $0.18 compared to $0.09 for the second quarter of fiscal

2013.

First Six Months Fiscal 2014 Results

For the first six months of fiscal 2014, net revenue increased 36.8% to $218.3

million, compared to $159.5 million for the same period of fiscal 2013. EBITDA

increased 40.2% to $28.6 million, compared to $20.4 million for the same period

in fiscal 2013. Profit after tax increased 107.2% to $13.6 million, compared to

$6.6 million in the same period in fiscal 2013.

Basic and diluted earnings per share(1) was $0.38 compared to $0.18 for the first

six months of fiscal 2013.


At September 30, 2013, the Company’s cash and cash equivalents were $46.2

million and adjusted net working capital was $223.2 million. Net debt (after

deducting cash and cash equivalents) as of September 30, 2013 was $102.6

million. As of September 30, 2013, inventory decreased $15.8 million to $165.7

million from $181.5 million as of March 31, 2013. As of September 30, 2013,

trade receivables were $69.5 million, an increase of $2.7 million from $66.8

million as of March 31, 2013. Reconciliations of adjusted net working capital and

net debt to the IFRS measures of working capital and total current and non-


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current debt, respectively, are provided in the “Non-IFRS Financial Measures”


Fiscal 2014 Outlook

The Company reiterates its previously issued guidance and continues to expect

full year fiscal 2014 revenue in the range of $480 million to $507 million and

EBITDA in the range of $62 million to $66 million. This is in line with long-term

guidance previously provided to the investment community in connection with

Amira’s initial public offering. The Company’s guidance is based on foreign

exchange rates as of September 30, 2013.

19. On February 25, 2014, Amira issued a press release entitled, “Amira Nature

Foods Ltd Announces Third Quarter Fiscal 2014 Financial Results.” Therein, the Company, in


Third Quarter Revenue Increased 25.1% to $142.5 Million

Third Quarter EBITDA Increased 29.3% to $17.7 Million

Company Raises Fiscal 2014 Outlook

Amira Nature Foods Ltd (the “Company;” NYSE:ANFI), a leading global


third quarter and nine months ended December 31, 2013.

Third Quarter Financial Highlights :

Revenue increased 25.1% to $142.5 million, compared to $113.9 million



Basic and diluted earnings per share (1) was $0.20 compared to $0.11

For better quarter over quarter comparability, after using 35.7 million fully

diluted shares, adjusted earnings per share was $0.22 compared to $0.17.

(All comparisons above are to the third quarter of fiscal 2013)

Karan A. Chanana, Amiras Chairman and Chief Executive Officer, stated, Our

strong financial performance in the third quarter highlights the increasing demand

for our premium products, the positive response to our expanding product line,

and our growing geographic footprint. Our successful execution on all aspects of

our business model enables us to increase our revenue by 25.1% and EBITDA by

29.3% in the third quarter.


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Mr. Chanana continued, Based on our year-to-date performance and outlook for

the final quarter, we remain confident in our ability to deliver a record year in

fiscal 2014 and are raising our annual revenue and EBITDA guidance. Our

business will benefit from recently announced key contracts, including the launch

of Amira branded products in Reliance Retail Limited stores across India and our

acquisition of a German branded business of basmati rice. We look forward to

finishing the year on a strong note and well positioned for fiscal 2015.

Third Quarter Fiscal 2014 Results

Revenue for the third quarter of fiscal 2014 increased 25.1% to $142.5 million,


increase was primarily due to increased sales volume and price of Basmati rice

both in India and internationally. Revenue in the third quarter of fiscal 2014 for

Amira and third party branded products was 95.8% of total revenue, compared to

99.0% for the same period in fiscal 2013. Institutional sales in the third quarter of

fiscal 2014 contributed 4.2% of total revenue, compared to 1.0% of total revenue,

for the same period in fiscal 2013.


million, or 28.3%, to $107.4 million in the third quarter of fiscal 2014 from $83.7

million in the third quarter of fiscal 2013. This increase primarily reflects the

growth in revenue. As a percentage of revenue, cost of material increased to

75.4% in the third quarter of fiscal 2014, compared to 73.5% in the third quarter

of fiscal 2013 due to increase in raw material prices.

EBITDA increased 29.3% to $17.7 million in the third quarter of fiscal 2014,


EBITDA to the IFRS measure of profit after tax is provided in the Non-IFRS

Financial Measures section of this release.

Profit after tax for the third quarter of fiscal 2014 increased 85.5% to $7.7 million,

compared to $4.2 million in the quarter of fiscal 2013. Basic and diluted earnings

per share (1) was $0.20 compared to $0.11 for the third quarter of fiscal 2013.

For better quarter over quarter comparability, after using 35.7 million fully diluted

shares, adjusted earnings per share was $0.22 compared to $0.17 in the third

quarter of fiscal 2013. Reconciliations of adjusted earnings per share, to basic and

diluted earnings per share are provided in the Non-IFRS Financial Measures


First Nine Months Fiscal 2014 Results

For the first nine months of fiscal 2014, net revenue increased 31.9% to $360.8

million, compared to $273.4 million for the same period of fiscal 2013. EBITDA

increased 35.8% to $46.2 million, compared to $34.0 million for the same period


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in fiscal 2013. Profit after tax increased 98.8% to $21.4 million, compared to

$10.7 million in the same period in fiscal 2013. Basic and diluted earnings per

share (1) was $0.58 compared to $0.37 for the first nine months of fiscal 2013.

For better quarter over quarter comparability, after using 35.7 million fully diluted

shares, adjusted earnings per share was $0.60 for the first nine months of fiscal

2014 compared to $0.35 for the same period in fiscal 2013. Reconciliations of

adjusted earnings per share, to basic and diluted earnings per share are provided in

the Non-IFRS Financial Measures section of this release.


At December 31, 2013, the Companys cash and cash equivalents were $34.8


deducting cash and cash equivalents) as of December 31, 2013 was $125.5

million. The Companys harvest season began in the third quarter in October and

ended in January. During this period, the Company prudently increased inventory

in order to meet expected demand, as of December 31, 2013, inventory increased

$72.5 million to $253.9 million from $181.5 million as of March 31, 2013. As of

December 31, 2013, trade receivables were $74.7 million, an increase of $7.9

million from $66.8 million as of March 31, 2013. Reconciliations of adjusted net

working capital and net debt to the IFRS measures of working capital and total

current and non-current debt, respectively, are provided in the Non-IFRS

Financial Measures section of this release.

Fiscal 2014 Outlook

The Company raises its previously issued guidance and expects full year fiscal

2014 revenue in the range of $507 million to $517 million and EBITDA in the

range of $66 million to $68 million. This is in line with long-term guidance

previously provided to the investment community in connection with Amiras

initial public offering. The Companys guidance is based on foreign exchange rates

as of December 31, 2013.

20. On June 16, 2014, Amira issued a press release entitled, “Amira Nature Foods Ltd

Announces Fourth Quarter and Full Year Fiscal 2014 Financial Results.” Therein, the Company,

in relevant part, stated:

Fourth Quarter Revenue Increased 33.0% to $186.6 Million and Adjusted

EBITDA Increased 45.4% to $26.4 Million

Full Year Revenue Increased 32.3% to $547.3 Million and Adjusted EBITDA

Increased 44.0% to $75.5 Million


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Amira Nature Foods Ltd (the “Company”) (ANFI), a leading global provider of

packaged Indian specialty rice, today reported financial results for the fourth

quarter and full year ended March 31, 2014.

Fourth Quarter Financial Highlights:

Revenue increased 33.0% to $186.6 million compared to $140.2 million

Adjusted EBITDA increased 45.4% to $26.4 million compared to $18.1

million

Adjusted EBITDA margin increased by more than 100 bps to 14.1% of

sales

Adjusted profit after tax increased 97.2% to $16.8 million compared to

$8.5 million

Basic earnings per share(1) was $0.47 compared to $0.24

Adjusted earnings per share was $0.47 compared to $0.24

Fiscal Year 2014 Financial Highlights:

Revenue increased 32.3% to $547.3 million compared to $413.7 million


million

Adjusted EBITDA margin increased by more than 100 bps to 13.8% of

sales

Profit after tax increased 98.1% to $38.1 million compared to $19.2

million

Adjusted profit after tax, which excludes non-cash expenses for share

based compensation of approximately $2.9 million, increased 93.2% to

$41.0 million compared to $21.2 million

Basic and diluted earnings per share(1) was $1.04 compared to $0.63


(All comparisons above are to the fourth quarter and fiscal year 2014,

respectively. Non-IFRS financial measures are reconciled in the tables below.)


are very pleased with our performance in the fourth quarter and full year 2014,

where we grew sales dramatically, improved operating margins, nearly doubled

income and made significant investment for continued future growth.”

He continued, “We are focused on a dramatically increasing class of consumers in

our home market, while also exploiting new opportunities around the world to

further grow our business. To bolster our growth in India we established eight

company owned and managed distribution centers in key cities around the country

and plan to add seven more distribution centers by the end of the fiscal 2015 to

further support our success in India.”


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“Internationally, we have made key investments in core regions, including our

acquisition of Basmati Rice GmbH which added to our positions in Germany and

throughout Continental Europe. We continued to invest in the UK, increasing our

marketing spend and building our presence to more than 3,000 distribution points,

and in the US where we have nearly doubled our revenues over the past year.”

Bruce Wacha, Amira’s Chief Financial Officer, added, “The Company had a very

strong fourth quarter and fiscal 2014 performance, reporting yet another record

year. Our revenue grew by more than 30%, our operating margins grew by more

than 100 bps, Adjusted EBITDA increased by approximately 45% and Adjusted

earnings per share grew by nearly 100%. We have continued to invest in future

growth while maintaining a conservative balance sheet of just 2.4x total debt to

Adjusted EBITDA and 2.0x net debt to Adjusted EBITDA.”

Fourth Quarter Fiscal 2014 Results

Revenue for the fourth quarter of fiscal 2014 increased 33.0% to $186.6 million,


increase was primarily due to increased pricing and sales volumes in India and

internationally. Revenue in the fourth quarter also benefited from the inclusion of

Basmati Rice GmbH, which was acquired in January 2014.

Revenue in the fourth quarter of fiscal 2014 for Amira and third party branded

products was $158.3 million up approximately $20 million compared to $138.5

million for the same period in fiscal 2013. Sales to the Company’s institutional

customers were up significantly, contributing $28.3 million in revenue for the

quarter.

Margins also increased due to improved pricing dynamics, operating efficiencies

and economies of scale. Cost of materials including change in inventory of

finished goods were $137.4 million, or 73.7% of sales in the fourth quarter of

fiscal 2014, compared to $109.0 million, or 77.7% of sales in the fourth quarter of

fiscal 2013. Freight, forwarding and handling expenses were $7.5 million, or

4.0% of revenue compared to $5.4 million, or 3.8% of revenue, in the prior year’s

fourth quarter.

Adjusted EBITDA increased 45.4% to $26.4 million in the fourth quarter of fiscal

2014, compared to $18.1 million in the same period last year. Adjusted EBITDA

margin increased by more than 100 bps to 14.1% in the fourth quarter of 2014. A

reconciliation of Adjusted EBITDA to the IFRS measure of profit after tax is

provided in the “Non-IFRS Financial Measures” section of this release.

Adjusted profit after tax for the fourth quarter of fiscal 2014 increased 97.2% to

$16.8 million, compared to $8.5 million in the fourth quarter of fiscal 2014. Basic

earnings per share(1) was $0.47 compared to $0.24 for the fourth quarter of fiscal

2013. A reconciliation of adjusted profit after tax to the IFRS measure of profit


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after tax is provided in the “Non-IFRS Financial Measures” section of this

release.

Adjusted earnings per share was $0.47 compared to $0.24 in the fourth quarter of

fiscal 2013. Reconciliations of adjusted earnings per share to basic and diluted

earnings per share is provided in the “Non-IFRS Financial Measures” section of

this release.

Fiscal Year 2014 Results

For the full year fiscal 2014, revenue increased 32.3% to $547.3 million,

compared to $413.7 million in fiscal 2013. Adjusted EBITDA increased 44.0% to

$75.5 million, compared to $52.4 million in fiscal 2013 and Adjusted EBITDA

margins increased by more than 100 bps to 13.8%. Profit after tax increased

98.1% to $38.1 million, compared to $19.2 million in fiscal 2013. Adjusted profit

after tax, which excludes non-cash expenses for share based compensation of

approximately $2.9 million, increased 93.2% to $41.0 million, compared to $21.2

million in fiscal 2013. A reconciliation of adjusted EBITDA and adjusted profit

after tax to the IFRS measure of profit after tax is provided in the “Non-IFRS


Basic and diluted earnings per share(1) for fiscal 2014 was $1.04 compared to

$0.63 each in fiscal 2013. Adjusted earnings per share was $1.14 in fiscal 2014

compared to $0.59 in fiscal 2013. Reconciliations of adjusted earnings per share,

to basic and diluted earnings per share are provided in the “Non-IFRS Financial

Measures” section of this release.


At March 31, 2014, the Company’s cash and cash equivalents was $36.6 million,

adjusted net working capital was $299.2 million, or 54.6% of sales, compared to

$256.2 million, or 61.9% of sales, in the prior year. Net debt (after deducting cash

and cash equivalents) as of March 31, 2014 was $148.2 million. Net debt to

Adjusted EBITDA was 2.0x, compared to 2.4x at the end of fiscal 2013. As of

March 31, 2014, inventory was $255.0 million, or 46.6% of sales, compared to

$181.5 million, or 43.9% of sales, as of March 31, 2013. As of March 31, 2014,

trade receivables were $80.9 million, or 14.8% of sales, compared to $66.8

million, or 16.1% of sales, in the prior year. Reconciliations of adjusted net


current and non-current debt, respectively, are provided in the “Non-IFRS


Fiscal 2015 Outlook

For 2015, the Company expects revenue and Adjusted EBITDA to increase by

more than 20%. The Company maintains its long term outlook for $1 billion in


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revenue and $150 million in Adjusted EBITDA as has been previously

communicated to investors as part of its initial public offering. This outlook is

based on current foreign exchange rates.

21. On July 28, 2014, Amira filed its Annual Report with the SEC on Form 20-F for

the 2014 fiscal year. The Company’s Form 20-F was signed by Defendants Chanana and Wacha

and affirmed the results previously announced June 16, 2014.

22. On August 28, 2014, Amira issued a press release entitled, “Amira Nature Foods

Ltd Announces First Quarter Fiscal 2015 Financial Results.” Therein, the Company, in relevant

part, stated:

First Quarter Revenue Grew 25.9 % to $138.8 Million

Adjusted EBITDA Increased 30.9% to $19.1 Million

Amira Nature Foods Ltd (the “Company;” or “Amira” NYSE: ANFI), a leading

global provider of packaged Indian specialty rice, today reported financial results

for its fiscal 2015 first quarter which ended on June 30, 2014.

First Quarter Financial Highlights:

Revenue grew 25.9% to $138.8 million compared to $110.3 million in the

year earlier period


million

Adjusted EBITDA margin increased to 13.7% percent of sales compared

to 13.2%

Adjusted profits after tax increased 24.7% to $9.3 million compared to

$7.4 million

Basic earnings per share was $0.25 compared to $0.21


Karan A. Chanana, Amira’s Chairman and Chief Executive Officer, stated, “Our

strong first quarter performance reflects increased demand and a favorable pricing

environment for our products - with gains in our core Indian and Middle East

markets, as well as in developed markets, such as the US, the UK and Continental

Europe where we continue to make inroads in these priority markets. We believe

that fiscal 2015 will be a great year and we expect to meet our growth forecasts as

we expand markets and distribution points around the world.”


16

Bruce Wacha, Amira’s Chief Financial Officer, added, “We are pleased with the

progress in the first quarter – we grew top line, adjusted EBITDA and profits by

approximately 25% or more, while also increasing margins and improving our

balance sheet. We added to inventory during the quarter providing support for our

future sales growth and simultaneously reduced our trade payables and debt.”

First Quarter Fiscal 2015 Results

Revenue for the first quarter of fiscal 2015 increased 25.9% to $138.8 million,

compared to $110.3 million for same period in fiscal 2014. The revenue increase

was primarily due to continuing increases in sales volume, pricing and mix.

Amira branded and third party branded sales increased by 29.3% to $136.8

million. Revenue from institutional sales fell marginally in dollar terms to $2.0

million from $4.4 million a year ago. Sales in India increased by 20.9% to $55.8

million (an increase of 30.3% in Indian rupees), while non-India or international

sales increased by 29.5% to $83.0 million.

Cost of materials including change in inventory of finished goods increased by

$20.7 million, or 23.7% to $108.2 million in the first quarter of fiscal 2015 from

$87.5 million in the first quarter of 2014, primarily reflecting revenue growth

during that period. As a percentage of revenue, cost of materials including change

in inventory of finished goods decreased to 78.0% in the three months ended June

30, 2014, versus 79.3% in the same period a year ago, due to improved pricing,

operating efficiencies and continued benefit from economies of scale.

Adjusted EBITDA increased by approximately $4.5 million or 30.9% to $19.1

million, with adjusted EBITDA margins increasing by approximately 50 basis

points to 13.7%. Adjusted EBITDA benefited from improvements in cost of

materials including change in inventory of finished goods and freight, forwarding

and handling, which improved by approximately 140 basis points and 240 basis

points as a percentage of sales, respectively. These gains were offset in part by

slight increases in employee benefit costs and other expenses.

Adjusted profit after tax increased by $1.8 million or 24.7% to $9.3 million for

the three months ended June 30, 2014. Adjusted EPS increased by 23.8% to $0.26

per share from $0.21 per share in the year-ago quarter.

A reconciliation of Adjusted EBITDA, Adjust profit after tax and Adjusted EPS is

provided in the “Non-IFRS Financial Measures” section of this release.


At June 30, 2014, the Company’s cash and cash equivalents was $32.8 million

and adjusted net working capital was $311.1 million. Net debt (after deducting

cash and cash equivalents) as of June 30, 2014 was $150.2 million. As of June 30,

2014, inventories increased $10.7 million to $265.7 million from $255.0 at March


17

31, 2014, trade receivables were $71.4 million, a decrease of $9.5 million from

$80.9 million, trade payables were $23.7 million, a decrease of $17.5 million

from $41.2 million and total debt was $182.9 million a decrease of $1.9 million

from $184.8 million. Reconciliations of adjusted net working capital and net debt

to the IFRS measures of working capital and total current and non-current debt,

respectively, are provided in the “Non-IFRS Financial Measures” section of this

release.

Fiscal 2015 Outlook

The Company reiterates its previously-issued guidance and expects full-year

fiscal 2015 Revenue and Adjusted EBITDA growth in excess of 20%. This is in

line with long-term guidance previously provided to the investment community.

The Company’s guidance is based on foreign exchange rates as of June 30, 2014

and does not take into account the potential impact of foreign currency

fluctuations for the remainder of the fiscal year.

23. On November 24, 2014, Amira issued a press release entitled, “Amira Nature

Foods Ltd Announces Second Quarter Fiscal 2015 Financial Results.” Therein, the Company, in


Second Quarter Revenue Grew 30.9 % to $141.4 Million

Second Quarter Adjusted EBITDA Increased 39.4% to $19.7 Million

Amira Nature Foods Ltd (the “Company;” or “Amira” NYSE: ANFI), a leading

global provider of packaged Indian specialty rice, today reported financial results

for its fiscal 2015 second quarter which ended on September 30, 2014.

Second Quarter 2015 Financial Highlights versus Second Quarter 2014:

Revenue grew 30.9% to $141.4 million compared to $108.0 million in the

prior year


million

Adjusted EBITDA margin increased to 14.0% percent of sales compared

to 13.1%

Adjusted profits after tax increased 66.4% to $10.6 million compared to

$6.3 million


Karan A. Chanana, Amira’s Chairman and Chief Executive Officer, stated, “Our

strong second quarter performance reflects increased demand and a favorable

pricing environment for our products, with strong gains in our core Indian and


18

Middle East markets, while we continue to make progress in our expansion efforts

throughout developed markets such as the US, UK and Continental Europe.

During the quarter, we leveraged many of our existing relationships with

international retailers, resulting in increased shelf space and volume around the

world and across multiple sales channels. Additionally, we were successful in

expanding our distribution through new partnerships, such as Snapdeal, India’s

largest online marketplace and Asda, a wholly owned division of Walmart.

Importantly, we expect strong growth for the remainder of fiscal 2015, driven by

ongoing distribution gains and market expansion, as we continue to successfully

execute on our strategic initiatives.”

Bruce Wacha, Amira’s Chief Financial Officer added, “Today we reported our

ninth consecutive quarter of double digit revenue and profit growth as a public

company. Revenue, adjusted EBITDA and adjusted earnings per share were all up

in excess of 30% for the quarter driven by strong pricing and double digit volume

gains in our core Amira and third party branded business. Our Basmati and other

specialty rice sales were up significantly, while our more opportunistic

institutional business, as expected, declined from last year’s exceptionally high

levels. We continue to see many opportunities in our home market and around the

world to grow our business and create value for our shareholders.”

Second Quarter Fiscal 2015 Results

Revenue for the second quarter of fiscal 2015 increased 30.9% to $141.4 million,

compared to $108.0 million for same period in fiscal 2014. The revenue increase

was primarily due to increases in sales volume, pricing and mix in Amira branded

and third party branded sales. Amira branded and third party branded sales

increased by $63.4 million or 82.0% to $140.7 million. Revenue from institutional

sales fell to $0.7 million from $30.7 million a year ago. Sales in India increased

by 41.2% to $55.3 million, or up 37.7% in Indian rupees, while sales outside of

India or international sales increased by 25.1% to $86.1 million.

Cost of materials including change in inventory of finished goods increased by

$28.3 million, or 34.6% to $110.3 million in the three months ended September

30, 2014 from $82.0 million in the three months ended September 30, 2013,

primarily reflecting the growth in revenue. As a percentage of revenue, cost of

materials including change in inventory of finished goods increased to 78.0% in

the three months ended September 30, 2014 as compared to 75.9% in the three

months ended September 30, 2013. Cost of materials including change in

inventory of finished goods as a percentage of revenue, was negatively impacted

due to currency exchange fluctuation on revenue which was offset by a foreign

exchange gain based on the Company’s hedging policy. Accordingly, our cost of

materials including change in finished goods as a percentage of Revenue plus

foreign exchange accounting gain/ (loss) (due to hedging of foreign exchange

risk) decreased to 77.3% as compared to 77.8% in same period last year. While

the net impact of all the remaining items was an increase of 40 bps on margins.


19

Adjusted EBITDA increased by $5.5 million or 39.4% to $19.7 million, with

adjusted EBITDA margins increasing by 90 basis points to 14.0%. Other gains

and (losses) increased to a gain of $2.0 million for the three months ended

September 30, 2014 compared to a loss of $3.6 million during the prior year

period. The $2.0 million gain was primarily driven by a foreign exchange benefit,

resulting from the Company’s hedging policy when the Indian rupee strengthened

against the U.S. dollar. The average exchange rate for the quarter ended

September 30, 2014 was ₹60.61, compared to ₹62.11 in the quarter ended

September 30, 2013.

Adjusted profit after tax increased by $4.3 million or 66.4% to $10.6 million for

the three months ended September 30, 2014. Adjusted EPS increased by 65.2% to

$0.29 per share from $0.18 per share in the prior year. Adjusted profit after tax

and adjusted EPS benefited from a lower effective tax rate of 8.2% for the three

months ended September 30, 2014 compared to 30.1% for the three months ended

September 30, 2013. This was primarily due to a relatively higher contribution of

revenue and corresponding profit from lower tax jurisdictions in the quarter.

A reconciliation of adjusted EBITDA, adjusted profit after tax and adjusted EPS

is provided in the “Non-IFRS Financial Measures” section of this release.

First Six Months of Fiscal 2015 Results

For the first six months of fiscal 2015, revenue increased 28.4% to $280.2

million, compared to $218.3 million for the same period of fiscal 2014. Adjusted

EBITDA increased 35.1% to $38.8 million, compared to $28.7 million for the

same period in fiscal 2014. Adjusted profit after tax increased 43.9% to $19.8

million, compared to $13.8 million in the same period in fiscal 2014.

Adjusted earnings per share were $0.55 compared to $0.39 for the first six months

of fiscal 2014.


As of September 30, 2014, the Company’s cash and cash equivalents were $25.7


deducting cash and cash equivalents) as of September 30, 2014 was $158.5

million. As of September 30, 2014, inventories decreased $3.6 million to $251.3

million from $255.0 as of March 31, 2014, trade receivables were $86.5 million,

an increase of $5.6 million from $80.9 million, trade payables were $11.9 million,

a decrease of $29.3 million from $41.2 million and total debt was $184.2 million

a decrease of $0.6 million from $184.8 million. Reconciliations of adjusted net


current and non-current debt, respectively, are provided in the “Non-IFRS



20

Fiscal 2015 Outlook

The Company reiterates its previously-issued guidance and expects full-year

fiscal 2015 revenue and adjusted EBITDA growth in excess of 20%. This is in

line with long-term guidance previously provided to the investment community.

The Company’s guidance is based on foreign exchange rates as of September 30,

2014.

24. On January 28, 2015, Amira filed a Report of Foreign Private Issuer with the SEC

on Form 6-K. Therein, the Company, in relevant part, stated:

On January 28, 2015, Amira Nature Foods Ltd (the “Company”), issued a press

release announcing the offering of $225 Million Senior Secured Second Lien

Notes (the “Notes”) and, concurrent with the closing of the Notes, the Company’s

expectation that it will enter into a new $35 Million Senior Secured Revolving

Credit Facility (the “Revolving Credit Facility”), which the Company expects will

be undrawn at the time of the closing of the Notes. The Revolving Credit Facility

will be secured by first-priority liens on the collateral (other than an escrow

account and certain escrowed funds) that secures the Notes on a second-priority

basis by such collateral. In connection with the offering of the Notes, the

Company disclosed certain information set forth below.

Acquisition of Amira Enterprises

Within a commercially reasonable period of time after the closing of the sale of

the Notes, Amira Nature Foods Ltd (Mauritius), a Mauritius company (“Amira

Mauritius”), will apply $30.0 million of the net proceeds of the Notes as cash

consideration to acquire Amira Enterprises Private Limited (the “Amira

Enterprises Share Purchase”), an Indian company (“Amira Enterprises”), an entity

which owns approximately 86 acres of land in Karnal, India adjacent to 48.2 acres

of land that we have previously purchased and on which we have begun to

construct our new processing and milling facility, including facilities for drying

and storing rice paddy and Basmati rice and for storing and distributing Basmati

rice and other products. Members of the family of our Chairman, Karan A.

Chanana, currently own Amira Enterprises and will receive the proceeds of the

sale to Amira Mauritius. The independent members of the Board of Directors of

Amira Nature Foods Ltd (BVI), a British Virgin Islands (“BVI”) business

company (“ANFI”), have approved this transaction and have received

independent third party valuations of the land on which basis the independent

members have concluded that the transaction is being conducted on an arm’s-

length basis.


21

25. The statements contained in ¶¶__-__ were materially false and/or misleading

when made because defendants failed to disclose or indicate the following: (1) that the Company

was overstating its international Basmati revenue; (2) that, as a result, the Company’s

consolidated sales revenues were also overstated; (3) that the Company was engaged in multiple

undisclosed related party transactions; and (4) that, as a result of the foregoing, Defendants’

statements about Amira’s business, operations, and prospects, were false and misleading and/or

lacked a reasonable basis.

Disclosures at the End of the Class Period

26. On February 9, 2015, Prescient Point Research Group published a research report

about Amira. Therein, the research report, in relevant part, stated:

The more we researched Amira, the more red flags we found. But our interest was

recently piqued for two reasons:

1. Amira intends to transfer $30m of $225m of newly raised of debt capital in

what amounts to a sham real estate transaction. The purchase price appears to be

multiples of both his purchase price and current market rates, amounting to an

egregious transfer of shareholder capital into his pockets.

We should mention, as discussed extensively in this report, our investigation has

revealed that the Indian rice industry is rampant with fraud. []

2. We have developed information that amounts to a smoking gun

To be clear, we believe Amira Nature Foods i[s] fabricating the financials it

files with the Securities and Exchange Commission. We hope that investors

who own ANFI equity and those considering buying debt or equity at what

appears to be a fundamentally low valuation familiarize themselves with the

risks we addressed. There are many more we do not. We also hope that the SEC

and Deloitte take necessary precautions in protecting investors.

We have sourced official Indian government Basmati export data that proves

ANFI has overstated its international Basmati revenue. We estimate that ANFI

inflated this metric by ~145% in FY’13 and ~117% in FY’14, implying that in

FY’14, ~19% of ANFI consolidated sales were fabricated. We have also collected

evidence indicating Amira is lying about its India Basmati revenue, which it tells

US investors is derived wholly from the sale of branded product. Amira claimed


22

~$224m in Indian Basmati revenue in FY’14; we estimate it actually generated

~$38m, implying that another 34% of consolidated sales are fabricated. Over 50%

of ANFI’s consolidated revenue is suspect; that number could be larger, as we are

giving the company full credit for its reported revenue from non-Basmati rice and

other commodity products.

We have identified scores of undisclosed related party entities that are listed to be

operating from within Amira’s headquarters, use Amira email addresses, and are

directed by ANFI CEO Karan Chanana or his wife; at least a couple of these

entities are in the business of distributing rice, including Basmati rice, and other

commodities.

We have also identified a company named Gautam TechAgro we have tied to

CEO Karan Chanana, and that claims to be one of Amira’s largest suppliers; a

ranking employee at Gautam also claims it is “National distributor for Amira.”

We also have new answers to old questions. We have received confirmation that

Amira has been transacting with an undisclosed related party Karam Enterprises

since IPO’ing, and that Karam was Amira’s largest customer. Karam was

purportedly Amira’s sole distributor in the EMEA, its largest market outside of

India.

We think Amira bears a striking resemblance to a fraudulent US-listed Chinese

RTO, so are confident that it will meet the same fate. []

27. On this news, shares of Amira declined $3.45 per share, nearly 26%, to close on

February 9, 2015, at $9.95 per share, on unusually heavy volume.

CLASS ACTION ALLEGATIONS

28. Plaintiff brings this action as a class action pursuant to Federal Rule of Civil

Procedure 23(a) and (b)(3) on behalf of a class, consisting of all those who purchased Amira’s

securities between August 26, 2013 and February 8, 2015, inclusive (the “Class Period”) and

who were damaged thereby (the “Class”). Excluded from the Class are Defendants, the officers

and directors of the Company, at all relevant times, members of their immediate families and

their legal representatives, heirs, successors or assigns and any entity in which Defendants have

or had a controlling interest.


23

29. The members of the Class are so numerous that joinder of all members is

impracticable. Throughout the Class Period, Amira’s securities were actively traded on the New

York Stock Exchange (the “NYSE”). While the exact number of Class members is unknown to

Plaintiff at this time and can only be ascertained through appropriate discovery, Plaintiff believes

that there are hundreds or thousands of members in the proposed Class. Millions of Amira

shares were traded publicly during the Class Period on the NYSE. Record owners and other

members of the Class may be identified from records maintained by Amira or its transfer agent

and may be notified of the pendency of this action by mail, using the form of notice similar to

that customarily used in securities class actions.

30. Plaintiff’s claims are typical of the claims of the members of the Class as all

members of the Class are similarly affected by Defendants’ wrongful conduct in violation of

federal law that is complained of herein.

31. Plaintiff will fairly and adequately protect the interests of the members of the

Class and has retained counsel competent and experienced in class and securities litigation.

32. Common questions of law and fact exist as to all members of the Class and

predominate over any questions solely affecting individual members of the Class. Among the

questions of law and fact common to the Class are:

(a) whether the federal securities laws were violated by Defendants’ acts as

alleged herein;

(b) whether statements made by Defendants to the investing public during the

Class Period omitted and/or misrepresented material facts about the business, operations, and

prospects of Amira; and


24

(c) to what extent the members of the Class have sustained damages and the

proper measure of damages.

33. A class action is superior to all other available methods for the fair and efficient

adjudication of this controversy since joinder of all members is impracticable. Furthermore, as

the damages suffered by individual Class members may be relatively small, the expense and

burden of individual litigation makes it impossible for members of the Class to individually

redress the wrongs done to them. There will be no difficulty in the management of this action as

a class action.

UNDISCLOSED ADVERSE FACTS

34. The market for Amira’s securities was open, well-developed and efficient at all

relevant times. As a result of these materially false and/or misleading statements, and/or failures

to disclose, Amira’s securities traded at artificially inflated prices during the Class Period.

Plaintiff and other members of the Class purchased or otherwise acquired Amira’s securities

relying upon the integrity of the market price of the Company’s securities and market

information relating to Amira, and have been damaged thereby.

35. During the Class Period, Defendants materially misled the investing public,

thereby inflating the price of Amira’s securities, by publicly issuing false and/or misleading

statements and/or omitting to disclose material facts necessary to make Defendants’ statements,

as set forth herein, not false and/or misleading. Said statements and omissions were materially

false and/or misleading in that they failed to disclose material adverse information and/or

misrepresented the truth about Amira’s business, operations, and prospects as alleged herein.

36. At all relevant times, the material misrepresentations and omissions particularized

in this Complaint directly or proximately caused or were a substantial contributing cause of the


25

damages sustained by Plaintiff and other members of the Class. As described herein, during the

Class Period, Defendants made or caused to be made a series of materially false and/or

misleading statements about Amira’s financial well-being and prospects. These material

misstatements and/or omissions had the cause and effect of creating in the market an

unrealistically positive assessment of the Company and its financial well-being and prospects,

thus causing the Company’s securities to be overvalued and artificially inflated at all relevant

times. Defendants’ materially false and/or misleading statements during the Class Period

resulted in Plaintiff and other members of the Class purchasing the Company’s securities at

artificially inflated prices, thus causing the damages complained of herein.

LOSS CAUSATION

37. Defendants’ wrongful conduct, as alleged herein, directly and proximately caused

the economic loss suffered by Plaintiff and the Class.

38. During the Class Period, Plaintiff and the Class purchased Amira’s securities at

artificially inflated prices and were damaged thereby. The price of the Company’s securities

significantly declined when the misrepresentations made to the market, and/or the information

alleged herein to have been concealed from the market, and/or the effects thereof, were revealed,

causing investors’ losses.

SCIENTER ALLEGATIONS

39. As alleged herein, Defendants acted with scienter in that Defendants knew that

the public documents and statements issued or disseminated in the name of the Company were

materially false and/or misleading; knew that such statements or documents would be issued or

disseminated to the investing public; and knowingly and substantially participated or acquiesced

in the issuance or dissemination of such statements or documents as primary violations of the


26

federal securities laws. As set forth elsewhere herein in detail, Defendants, by virtue of their

receipt of information reflecting the true facts regarding Amira, his/her control over, and/or

receipt and/or modification of Amira’s allegedly materially misleading misstatements and/or

their associations with the Company which made them privy to confidential proprietary

information concerning Amira, participated in the fraudulent scheme alleged herein.

APPLICABILITY OF PRESUMPTION OF RELIANCE

(FRAUD-ON-THE-MARKET DOCTRINE)

40. The market for Amira’s securities was open, well-developed and efficient at all

relevant times. As a result of the materially false and/or misleading statements and/or failures to

disclose, Amira’s securities traded at artificially inflated prices during the Class Period. On

February 24, 2014, the Company’s stock closed at a Class Period high of $23.17 per share.

Plaintiff and other members of the Class purchased or otherwise acquired the Company’s

securities relying upon the integrity of the market price of Amira’s securities and market

information relating to Amira, and have been damaged thereby.

41. During the Class Period, the artificial inflation of Amira’s stock was caused by

the material misrepresentations and/or omissions particularized in this Complaint causing the

damages sustained by Plaintiff and other members of the Class. As described herein, during the

Class Period, Defendants made or caused to be made a series of materially false and/or

misleading statements about Amira’s business, prospects, and operations. These material

misstatements and/or omissions created an unrealistically positive assessment of Amira and its

business, operations, and prospects, thus causing the price of the Company’s securities to be

artificially inflated at all relevant times, and when disclosed, negatively affected the value of the

Company stock. Defendants’ materially false and/or misleading statements during the Class


27

Period resulted in Plaintiff and other members of the Class purchasing the Company’s securities

at such artificially inflated prices, and each of them has been damaged as a result.

42. At all relevant times, the market for Amira’s securities was an efficient market for

the following reasons, among others:

(a) Amira stock met the requirements for listing, and was listed and actively

traded on the NYSE, a highly efficient and automated market;

(b) As a regulated issuer, Amira filed periodic public reports with the SEC

and/or the NYSE;

(c) Amira regularly communicated with public investors via established

market communication mechanisms, including through regular dissemination of press releases

on the national circuits of major newswire services and through other wide-ranging public

disclosures, such as communications with the financial press and other similar reporting services;

and/or

(d) Amira was followed by securities analysts employed by brokerage firms

who wrote reports about the Company, and these reports were distributed to the sales force and

certain customers of their respective brokerage firms. Each of these reports was publicly

available and entered the public marketplace.

43. As a result of the foregoing, the market for Amira’s securities promptly digested

current information regarding Amira from all publicly available sources and reflected such

information in Amira’s stock price. Under these circumstances, all purchasers of Amira’s

securities during the Class Period suffered similar injury through their purchase of Amira’s

securities at artificially inflated prices and a presumption of reliance applies.

NO SAFE HARBOR


28

44. The statutory safe harbor provided for forward-looking statements under certain

circumstances does not apply to any of the allegedly false statements pleaded in this Complaint.

The statements alleged to be false and misleading herein all relate to then-existing facts and

conditions. In addition, to the extent certain of the statements alleged to be false may be

characterized as forward looking, they were not identified as “forward-looking statements” when

made and there were no meaningful cautionary statements identifying important factors that

could cause actual results to differ materially from those in the purportedly forward-looking

statements. In the alternative, to the extent that the statutory safe harbor is determined to apply to

any forward-looking statements pleaded herein, Defendants are liable for those false forward-

looking statements because at the time each of those forward-looking statements was made, the

speaker had actual knowledge that the forward-looking statement was materially false or

misleading, and/or the forward-looking statement was authorized or approved by an executive

officer of Amira who knew that the statement was false when made.

FIRST CLAIM

Violation of Section 10(b) of

The Exchange Act and Rule 10b-5

Promulgated Thereunder Against All Defendants

45. Plaintiff repeats and realleges each and every allegation contained above as if

fully set forth herein.

46. During the Class Period, Defendants carried out a plan, scheme and course of

conduct which was intended to and, throughout the Class Period, did: (i) deceive the investing

public, including Plaintiff and other Class members, as alleged herein; and (ii) cause Plaintiff and

other members of the Class to purchase Amira’s securities at artificially inflated prices. In

furtherance of this unlawful scheme, plan and course of conduct, defendants, and each of them,

took the actions set forth herein.


29

47. Defendants (i) employed devices, schemes, and artifices to defraud; (ii) made

untrue statements of material fact and/or omitted to state material facts necessary to make the

statements not misleading; and (iii) engaged in acts, practices, and a course of business which

operated as a fraud and deceit upon the purchasers of the Company’s securities in an effort to

maintain artificially high market prices for Amira’s securities in violation of Section 10(b) of the

Exchange Act and Rule 10b-5. All Defendants are sued either as primary participants in the

wrongful and illegal conduct charged herein or as controlling persons as alleged below.

48. Defendants, individually and in concert, directly and indirectly, by the use, means

or instrumentalities of interstate commerce and/or of the mails, engaged and participated in a

continuous course of conduct to conceal adverse material information about Amira’s financial

well-being and prospects, as specified herein.

49. These defendants employed devices, schemes and artifices to defraud, while in

possession of material adverse non-public information and engaged in acts, practices, and a

course of conduct as alleged herein in an effort to assure investors of Amira’s value and

performance and continued substantial growth, which included the making of, or the

participation in the making of, untrue statements of material facts and/or omitting to state

material facts necessary in order to make the statements made about Amira and its business

operations and future prospects in light of the circumstances under which they were made, not

misleading, as set forth more particularly herein, and engaged in transactions, practices and a

course of business which operated as a fraud and deceit upon the purchasers of the Company’s

securities during the Class Period.

50. Each of the Individual Defendants’ primary liability, and controlling person

liability, arises from the following facts: (i) the Individual Defendants were high-level executives


30

and/or directors at the Company during the Class Period and members of the Company’s

management team or had control thereof; (ii) each of these defendants, by virtue of their

responsibilities and activities as a senior officer and/or director of the Company, was privy to and

participated in the creation, development and reporting of the Company’s internal budgets, plans,

projections and/or reports; (iii) each of these defendants enjoyed significant personal contact and

familiarity with the other defendants and was advised of, and had access to, other members of the

Company’s management team, internal reports and other data and information about the

Company’s finances, operations, and sales at all relevant times; and (iv) each of these defendants

was aware of the Company’s dissemination of information to the investing public which they

knew and/or recklessly disregarded was materially false and misleading.

51. The defendants had actual knowledge of the misrepresentations and/or omissions

of material facts set forth herein, or acted with reckless disregard for the truth in that they failed

to ascertain and to disclose such facts, even though such facts were available to them. Such

defendants’ material misrepresentations and/or omissions were done knowingly or recklessly and

for the purpose and effect of concealing Amira’s financial well-being and prospects from the

investing public and supporting the artificially inflated price of its securities. As demonstrated

by Defendants’ overstatements and/or misstatements of the Company’s business, operations,

financial well-being, and prospects throughout the Class Period, Defendants, if they did not have

actual knowledge of the misrepresentations and/or omissions alleged, were reckless in failing to

obtain such knowledge by deliberately refraining from taking those steps necessary to discover

whether those statements were false or misleading.

52. As a result of the dissemination of the materially false and/or misleading

information and/or failure to disclose material facts, as set forth above, the market price of


31

Amira’s securities was artificially inflated during the Class Period. In ignorance of the fact that

market prices of the Company’s securities were artificially inflated, and relying directly or

indirectly on the false and misleading statements made by Defendants, or upon the integrity of

the market in which the securities trades, and/or in the absence of material adverse information

that was known to or recklessly disregarded by Defendants, but not disclosed in public

statements by Defendants during the Class Period, Plaintiff and the other members of the Class

acquired Amira’s securities during the Class Period at artificially high prices and were damaged

thereby.

53. At the time of said misrepresentations and/or omissions, Plaintiff and other

members of the Class were ignorant of their falsity, and believed them to be true. Had Plaintiff

and the other members of the Class and the marketplace known the truth regarding the problems

that Amira was experiencing, which were not disclosed by Defendants, Plaintiff and other

members of the Class would not have purchased or otherwise acquired their Amira securities, or,

if they had acquired such securities during the Class Period, they would not have done so at the

artificially inflated prices which they paid.

54. By virtue of the foregoing, Defendants have violated Section 10(b) of the

Exchange Act and Rule 10b-5 promulgated thereunder.

55. As a direct and proximate result of Defendants’ wrongful conduct, Plaintiff and

the other members of the Class suffered damages in connection with their respective purchases

and sales of the Company’s securities during the Class Period.

SECOND CLAIM

Violation of Section 20(a) of

The Exchange Act Against the Individual Defendants

56. Plaintiff repeats and realleges each and every allegation contained above as if

fully set forth herein.


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57. The Individual Defendants acted as controlling persons of Amira within the

meaning of Section 20(a) of the Exchange Act as alleged herein. By virtue of their high-level

positions, and their ownership and contractual rights, participation in and/or awareness of the

Company’s operations and/or intimate knowledge of the false financial statements filed by the

Company with the SEC and disseminated to the investing public, the Individual Defendants had

the power to influence and control and did influence and control, directly or indirectly, the

decision-making of the Company, including the content and dissemination of the various

statements which Plaintiff contends are false and misleading. The Individual Defendants were

provided with or had unlimited access to copies of the Company’s reports, press releases, public

filings and other statements alleged by Plaintiff to be misleading prior to and/or shortly after

these statements were issued and had the ability to prevent the issuance of the statements or

cause the statements to be corrected.

58. In particular, each of these Defendants had direct and supervisory involvement in

the day-to-day operations of the Company and, therefore, is presumed to have had the power to

control or influence the particular transactions giving rise to the securities violations as alleged

herein, and exercised the same.

59. As set forth above, Amira and the Individual Defendants each violated Section

10(b) and Rule 10b-5 by their acts and/or omissions as alleged in this Complaint. By virtue of

their positions as controlling persons, the Individual Defendants are liable pursuant to Section

20(a) of the Exchange Act. As a direct and proximate result of Defendants’ wrongful conduct,

Plaintiff and other members of the Class suffered damages in connection with their purchases of

the Company’s securities during the Class Period.

PRAYER FOR RELIEF


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WHEREFORE, Plaintiff prays for relief and judgment, as follows:

(a) Determining that this action is a proper class action under Rule 23 of the Federal

Rules of Civil Procedure;

(b) Awarding compensatory damages in favor of Plaintiff and the other Class

members against all defendants, jointly and severally, for all damages sustained as a result of

Defendants’ wrongdoing, in an amount to be proven at trial, including interest thereon;

(c) Awarding Plaintiff and the Class their reasonable costs and expenses incurred in

this action, including counsel fees and expert fees; and

(d) Such other and further relief as the Court may deem just and proper.

JURY TRIAL DEMANDED

Plaintiff hereby demands a trial by jury.

DATED:

By:___DRAFT______________________

GLANCY BINKOW & GOLDBERG LLP Lionel Z. Glancy

Robert V. Prongay

Casey E. Sadler

1925 Century Park East, Suite 2100

Los Angeles, CA 90067

Telephone: (310) 201-9150

Facsimile: (310) 201-9160

LAW OFFICES OF HOWARD G. SMITH Howard G. Smith

3070 Bristol Pike, Suite 112

Bensalem, PA 19020

Telephone: (215) 638-4847

Facsimile: (215) 638-4867

Attorneys for Plaintiff

GLANCY BINKOW & GOLDBERG LLP Lionel Z. Glancy Robert V ... · Amira Nature Foods Ltd (the...

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