 Good day fellow investors, Amira's 20F annual report finally came out and I've got so many questions, requests to comment what's my opinion so it is again proper to make a video on this even if I think we closed the Amira case last November but nevertheless as still things are discussed let me close this once forever. So before we start discussing Amira let me first discuss the risks of investing according to videos and how that goes and what can you follow and what you can't follow. I was also discussed on a German show so it's also good to address all of that. Let's start with the discussion about risk of investing and then discussing the German show and then discussing the investment lessons that are there from Amira. Amazing lessons for long-term investor. So let's start with the story. I was bullish on Amfi in 2017. My idea was that higher rise prices will lead to higher revenues and finally to more cash. Cash cash cash cash is the key word here on Amfi's balance sheet and perhaps a dividend that would potentially push the stock to above 20, 30 like it was the case with KRBL. That didn't happen and on the 30th of November I immediately published this video. The stock was still significantly above 4, 5 I think so 7.39 my time pm that's 1.39 pm eastern time November 30th when Amfi Amira published their previous financials. On that day the stock dropped from above 6 to 4, 4 something 4.30 I think was the low. I sold everything I had in Amfi immediately. As soon as the market opened I was the first seller. I even driven the price significantly down but I didn't like what I saw and this is what I said. Good day fellow investors. I think everybody will be expecting my take on Amira's earnings. Now this is a really great example of how I approach investments. You find something, you expect something. If it fits your expectations you make a lot of money. If it doesn't meet your expectations you don't lose a lot. The first time I recommended Amira on this channel was at 4.75. When I really thought okay at this price Amira there is little room for losses and there is a potential for a huge gain if the increase in basmati prices reflects onto the financials. That unfortunately in this first six months didn't happen. Is this possible that due to the seasonality of the business Amira's earnings improve significantly in the next six months? However we will know that first time somewhere in May when the company announces their full year results and then really see it in the audited report coming out at the end of July. So that is six months from now or eight months till the audited report in between there perhaps will be some financing but don't expect much. There is little probability of catalysts coming up in the next eight months which could make Amira a value trap. So let's first dig into the earnings and then I'll discuss my view on what's going on. Revenue increased eight percent but I expected much much more. The eight percent will just be from rise increases which means they didn't sell much more. The margin is always the healthy margin of 14.7 which is okay. Profit after tax in line with previous earnings which means that really wasn't an improvement even if we'll see later in the balance sheet there should have been. I really expected higher revenue at least 20-25% from the sales then I expected higher cash. This was really my catalyst much more cash on the balance sheet coming from profitable revenues profitable sales. That again didn't happen. If we look at the revenue it did increase from 210 to 228 million. What increased significantly and what I expected to increase was the change in inventory of finished goods. So the value of the inventory due to the seasoning to the aging of the petty increased from 12 million the benefit to 36 million of course in relation to higher prices. However this means that if there wouldn't be the change in inventory benefit there wouldn't be profitability for Amira. So you really have to see from different perspectives those basic earnings per share of 9 million or 30 cents 29 cents. This is my biggest worry and something I really don't like it could really be due to demonetization in India but nevertheless in the previous quarter past due trade receivables were 43 million now those 43 million are still there okay six months has passed which means there have been some payments from the past due receivables but now the past view for more than three months and less than six months are 45 million which means that the company like Amira that really depends on the trade receivables has 78 million past view 78 million is two dollars per share almost which would completely change how Amira looks. This is a catalyst to look at in the next earnings if Amira manages to get the fate in time the debt would be much lower the debt cost would be much lower profitability would be much higher alongside the debt financing. So I really don't like the earnings I hoped it would be better and that would that better that growth has been my catalyst for holding Amira. Such catalyst didn't happen I will be researching other stocks I will be looking at other stocks I will be keeping an eye on Amira to see what happens if the stock price goes significantly down creating another bargain I will look to open another position looking into July 2018 however there is still plenty of time from there the risks have increased because of the past due trade receivables which could really put in jail party the whole company possibly because the inventories guarantee Amira's debt and if though Amira loses those inventories to guarantee its debt it cannot sell it cannot make sales and a very very tricky situation can arise so from my perspective even if it looks like financials have improved everything has grown a little bit from my perspective the company is much much more riskier now so it didn't work out let's say we'll keep an eye we'll keep a joint and that's the story that's how investing goes I hope you are not disappointed well I think a lot of you will be disappointed but that's how investing is thank you for watching I hope to see you in the next video and I'm looking forward to your comments it's a great learning opportunity so we'll see how it works out and that's it so I clearly said the catalyst didn't materialize and there was no cash further no catalyst ahead which could make Amfi a value trap also I expected cash that didn't happen I also discussed how the change in inventory value is the only driver of profitability for Amira something that again increases the risks and I think I said it clearly how the risks have increased how I sold etc but then almost a year later I get to this this is a German show I don't understand German so I cannot really follow and Chuldigung but they did this report on how I trick people into crazy stocks and this is the portfolio of the Reinhardt that unfortunately bought these stocks at completely the wrong time the first time I discussed Amira it was at 4.74 when I sold everything it was at 4.8 even 5.5 something 5.75.3 I think the first time I discussed UPi it was at 12 then I said I sold at 15 the first part and sold at 24 all of it Lukara I never said I bought it and Orioles and Koppel are still good stocks since we discussed them so I discussed more than 100 stocks on this channel I share my analysis and people think that even if I'm in good mood that that's a signal to buy please I agree with the Germans here with the mission money comment that you should never invest based on youtube videos and that's one reason I started a stock market research platform where where I really show my portfolio my analysis my risk reward analysis my long-term investments what do I how do I build the portfolio and I have just started to build a portfolio it will take me a year until I build it so until that the price of the platform is just $249 where you get all my research so you get me working for you for full time doing the research that you can't do because you don't have the time or the knowledge so please before thinking about investing in anything that I discuss on youtube check what I do on my stock market research platform where there is my model portfolio and you can see where my money goes and what is the portfolio exposure which is key to understanding also the risk reward of companies like Amira because those are always interesting companies but you have to understand the risk reward and to be more sure about the risk reward this is what I wrote on my stock market research platform so I clearly said about the investment strategy there are ways to play this the first way is to simply avoid as the management's integrity is questionable which is the best thing to do for the risk averse investor avoid 99% of people should okay avoid risk averse hasta la vista the second way to play this is to wait for the market to really panic and push the price down and then hope for the management to save the situation be to good report or an investor presentation the report didn't come delayed filling the problems with audits which means okay more more trouble ahead the third way to play it if you really want to risk it but you have to understand you could lose 100% of your investment because always keep in mind that it could get delisted and you could lose 100% of your investment so that's the risk reward so please understand the risk reward and this is why I didn't buy amphi for the model portfolio as as soon as I looked at it rationally I said no way after November 2017 and then there was no cash so please check my research platform check my analysis and use those analysis as a tool to help you on the risk reward and what can happen I have a column I have about describing the risks of what can happen to a stock price and there are some stocks that I own that have a risk assessment of 100% and that's extremely important to understand for portfolio positioning etc so as the German said in the video as the German guys said in the video never ever invest on a youtube video please carefully assess the risk and reward my job is to analyze companies I analyze lots of companies so I document that on youtube now that we understand the risk reward let's look at Amira's current report amphi didn't file a report because the auditor didn't want to sign it so they need to check a lot of things first thing when you open the report the number of shares now is 46.3 million when I was looking at when I started researching Amira it was 27 million so huge dilution there which is okay something unfortunate however the big big impact here is the change in inventory of finished goods of 106 million which is huge on the company's assets so the total impairment of the inventory was 133 million so 134 million so one-time provision for impairment of inventory so their explanation will get to it later let's see other things as I went through the report so they of course the main risk is always the indebtedness that increased even in that time then something changed in the revenue where they used to book as revenue now they booked something as commission so 93 million in revenue less from an accounting difference and they had that 93 million in revenue increased other income from 0 to 5 million okay what's that's five six percent margin on a commission job okay it shouldn't be recognized that revenue but okay you can get across that as it was profit other income increased five million now the big thing and this is really huge cost of materials including change in inventory of finished goods and here they say notably the group recognized provision for impairment of inventory being one-time expense for the amount of 134 million in fiscal 2018 we carry inventories for regular period of time at times upon careful consideration the inventories are written off in their natural qualitative deterioration however this year we identified certain deterioration in quality of inventories primarily due to large number of warehousing facilities spread across India the mismatch in cash-to-cash cycle and sporadic unfavorable weather conditions the management believes these are one-time events driven largely by macroeconomic conditions and also by uncontrollable external factors this deteriorate deterioration in quality of inventory results into higher percentage of broken rice content upon processing the management has decided consciously and conservatively to recognize the provision for impairment of inventories of 134 million considering the adjustment in its realizable value when I read this this is pure bullshit I'm happy I sold when the higher inventory and basmati didn't turn into cash because it was fishy and strange that it didn't with basmati prices going up 50 percent now we know exactly why they why that didn't turn into cash this is the reason they didn't have the inventory they had broken rice across India so that's where the company blows up so amphi in the past was piling up profits in non-existing inventory over the years and here is where the trouble begins for amphi the inventory was the collateral for the loans from indian banks without that now that the banks know that the debt will be problematic going forward janana covers for the debt he's guaranteeing with the shares with the stocks with everything amira owns so as amira doesn't have the cash to repay the debt the banks probably will not refinance the debt and astalavista amira very negative cash flows always focus on the cash cash I hope that the catalyst would be the cash in 2017 that didn't come and I said astalavista in november as you heard in the video so the debt is there while the inventory declined I think that the banks will not renew this is where the company blows up inventories are down trade receivable so the customers are not paying 258 million from 209 to 199 so really really a cash crunching situation to amira and the trade receivables are also very questionable why are they not giving getting the money we have seen inventory I don't know if I should call it fraud or not but 130 million inventory you don't lose it overnight and now trade receivables are they there that's a good question that we'll see later and that was also risks that I mentioned extremely important in the video last november so inventory down receivable up depth to cover the bad trades it's not so what to take out from this first is agree with the Germans never invest on youtube video secondly cash is king thirdly low debt is king because that debt that really makes company blow up and makes the management do crazy things so it all boils down to a very very risky situation for amira and as I said in the previous video in november that the risks have increased while the rewards have gotten lower and that's why I sold everything back then as the catalyst didn't work and this actually might be a value trap it will be very interesting to see how this evolves how will shareholders be protected how will the land be sold at what price at what what will the banks get etc etc unfortunately the story is like this I'm happy that I sold back in November I'm sorry that I think it was very clear that I sold as the catalyst didn't materialize I'm sorry for all of those that lost money while holding the bag but that's something that you have to really understand when investing it's about risk reward and selling when something that doesn't happen that's crucial to sell when something doesn't happen and seek for other stocks as I said in the previous video so this is where I will close with Amira it all boils down to cash debt and watching carefully what's going on and acting on it never fall in love with the stock no matter what's the potential because then you're betting and not investing so also I remind you if you want to invest on anything that I do please check my stock market research platform with carefully detailed risk reward analysis and portfolio exposures which are the key to show you okay if we risk something how much do we risk and you will be surprised by seeing my portfolio and especially the cash allocation at this point in the market thank you for watching looking forward to your comments and I'll see you in the next video