PURE.L Regulatory News (PURE)

PureCircle Limited

("PureCircle" or the "Company")

Interim results for the six months ended 31 December 2015

PureCircle (LSE: PURE) the world's largest producer and marketer of high purity stevia today announces its unaudited interim results for the six month period from 1 July 2015 to 31 December 2015 ("1H FY 16").

HIGHLIGHTS

- Sales increase 26% to $54.5m, with growth in all regions and across all ingredients

- Gross margin increased 56% to $22.6m, with gross margin % up 8 points to 42%

- Adjusted EBITDA increased 108% to $13.5m

- Net profit improved $6m to $5m, generating EPS of three cents per share

- $17m improvement in net cash from operations to $9m

- Net debt reduced 12% to $46m

- Mintel: more than 9,000 products launched with stevia: of which more than 70% in last 3 years

- Regulatory approvals in India and Brazil open additional large market opportunities

- Production capacity expansion in progress to service expected future demand growth

- PureCircle admitted to the LSE Main Market in October 2015

SUMMARY FINANCIALS

** Operating profit, adjusted EBITDA and headroom are non-GAAP alternative performance measures and are laid out on page 14 and 15. The full profit and loss account is detailed on page 5.

The unaudited financial statements comprising the profit and loss and cashflow statements for the six months to 31 December 2015 ("1H FY16") along with the balance sheet as at 31 December 2015 are set out below, together with the unaudited profit and loss and cashflow comparatives for the six months to 31 December 2014 ("1H FY15").

Sales: Sales of $54m increased 26% over 1H FY15 ($43m). There has been growth across all global sales regions and across all ingredients. Our innovation continues to enable new Food and Beverage adoption of stevia and support continued roll-outs of products already launched.

Gross margin: Gross margin increased $8m or 56% to $22.6m. Gross margin % of 42% was 8 percentage points (24%) higher than 1H FY15 (34%). The increase in gross margin reflected increased volumes, innovation led improvements in sales mix and the foreign exchange benefits of Chinese and Malaysian currencies weakening against the US$. The foreign exchange benefits were 3 gross margin percentage points versus 1H FY15.

Adjusted EBITDA: of $13.5m represented a $7m or 108% increase over 1H FY15 ($6.5m). The improvement reflect $8m higher gross margins partly offset by $1m increased SG&A investment in PCL's operational management and global customer service infrastructure, including in-region application capacity, to support anticipated future sales growth.

Net Result after Tax: 1H FY16 net result of $5m represented a $6m improvement on 1H FY15. The net result reflects $7m improved adjusted EBITDA, partly offset by the net impact of:

- ($2.0m) costs of moving to the LSE Main Market in October 2015

- ($1.3m) increased Long Term Incentive Plan (LTIP) and bonus costs,

- $4.5m favourable year on year foreign exchange movements,

- $1m favourable interest; and

- ($3.8m) adverse tax movements, reflecting improved profitability.

Earnings Per Share: The Group recorded Earnings Per Share of $0.03 a share in 1H FY16, on a fully diluted basis.

Operating cashflow before working capital: The Group generated $13m of Operating cashflow before working capital in 1H FY16 a $5.5m (73%) improvement on 1H FY15, in line with the earnings improvement.

Net cash from operations: the Group generated $8.6m of net cash from operations in 1H FY16 a $17m improvement on the comparative period in FY15. This reflected improved profitability and lower inventories than a year ago partly offset by higher receivables due to higher sales.

Net debt: Net debt of $46m is $6m lower than the $52m at 31 December 2014. This reflects positive operating cashflow, favourable foreign exchange movements on the Group's Chinese and Malaysian denominated debt and lower inventories, partly offset by higher receivables due to higher sales.

Headroom: The Group closed 1H FY16 with cash and bank facility headroom of $73m (1H FY15 $76m). The Group is sufficiently funded for its current expansion plans.

BUSINESS DEVELOPMENTS

Market: The Global Stevia market has continued to develop strongly across 1H FY16 with adoption deepening across a wider range of Food and Beverage (F&B) categories enabled by our innovation. Mintel data shows that by end CY2015 more than 9,000 F&B products had been launched using stevia with more than 70% of these occurring within the last 3 years. The data also indicates that the depth of category penetration and the size of brand adopting continues to increase, including widening adoption in major F&B categories such as Dairy, Carbonated Soft Drinks, Teas and Sauces. Further, the data confirms increasing F&B product reformulations, as opposed to just line extensions, and deeper calorie reductions: both trends demonstrate growing F&B brand commitment to stevia.

Global obesity and diabetes epidemics continue to worsen with more than 600 million people now predicted to be obese by 2035 (up 50% from 400 million in 2013). Public debate and calls for regulatory action to address the issues are increasing, particularly concerning added sugar. At the same time, consumers are actively seeking natural sustainable sources for their sweeteners, as opposed to using artificial low calorie products. 1H FY16 has seen real heightening of media activity on these topics which is likely to continue.

In November 2015 India approved the use of stevia as a F&B ingredient, which means that globally more than 5 billion consumers now have access to products using stevia. In addition Brazil has just approved the use of stevia as an ingredient permitted to be mixed with sugar, opening up significant additional market potential.

The B2B stevia ingredient industry is estimated to have had a market size of approximately $200m in CY2015. The F&B products already launched using stevia are estimated to have the potential to support an industry with market size of more than $1billion when those products are fully rolled out and mature. The pace of F&B adoption to-date, particularly in mainstream products, coupled with consumer concerns about obesity provide confidence that the stevia market will develop to such a size.

Innovation: PureCircle continues to lead stevia innovation with new products and applications designed to meet identified market needs and unlock further demand to help moderate calories naturally. In July we launched Sigma D and Sigma T, the first products in our Matrix Solutions range that provide category specific taste solutions. Then in December we launched our Zeta TM suite of ingredients that enable great tasting product formulations with deeper calorie reductions.

Each of our new developments continue to grow overall market usage and strengthen further our market share.

With our strong diversified customer base, our unique breadth of product innovation and application support, our global supply chain and customer support infrastructure already established, PureCircle continues to retain and build further market leadership.

Production capacity expansion: With the prospect of sustained long term market growth, PureCircle is expanding its production capacity at both our extraction and purification facilities. This is to ensure we meet anticipated future increased volume demand, further sustain market share and strengthen our first mover advantage. When fully commissioned we anticipate that the production capacity will be able to support sales of approximately $450 to $500m.

While we work on expanding capacity, our existing production facilities and customer services supply chain continue to produce and deliver increased volumes to clients globally.

Leaf: As reported in September leaf supply tightened in FY2015 with prices in China increasing significantly which led to higher cost of sales. Over the long term stevia is a highly efficient source of natural sweetness with excellent sustainability and agro-economic properties which will underpin a well-balanced sustainable global supply. However, until there is improved visibility of end customer demand and large scale supply is fully diversified, leaf pricing volatility may continue. Our plans are to have majority supply outside of China by 2020. To achieve this, we continue to lead the diversification of leaf supply into new geographic regions centered on our leaf development hubs in Africa, South America and India. We are also making progress working with larger commercial agricultural partners who have the potential to scale supply more quickly than traditional smallholders.

Management and systems: To support the management of our planned growth we continue to invest in management and information systems. In FY15 we implemented the first core modules of Oracle JD Edwards ERP system and in 1H FY16 we progressed the implementation of additional modules that are scheduled to come on stream progressively in 2HFY16 and FY17. In 1H FY16 we have again strengthened management with the appointments of Group Head of Human Resources and regional heads of Leaf development.

On 18 February 2016 we announced the recruitment of Mr. Rakesh Sinha to take over from William Mitchell who, as previously announced, will later in the year be retiring as Chief Financial Officer.

Main Market: in October 2015 the Company's shares were admitted to a Listing on the Main Market of the London Stock Exchange (LSE). The move to the Main Market was undertaken so as to further enhance the growing investor profile of PureCircle and to improve liquidity in the trading of PureCircle shares by making them more accessible for larger international investment funds. Cost of the admission process amounted to $2.0m which has been charged to profit in 1H FY16.

Auditors: following a formal tender process in line with best Main Market practice, in January 2016 the Group appointed PricewaterhouseCoopers LLP (PwC) London as auditors, taking over from PwC Malaysia.

Board of Directors: In July we strengthened the Board of Directors with the appointment of Mitch Adamek and Guy Wollaert as Non Executive Directors who both bring years of relevant commercial experience and insights to the Company that will support our future development. Effective today Mr. Olivier Maes will retire as a Director of the Company and step down from the Board. Mr. Maes has been a Non Executive Director for nine years and retires in line with the Corporate Governance Code. We would like to thank him for his contribution both as a Non Executive Director and as Chairman of the Remuneration Committee. Mr. Adamek will join the Audit Committee replacing Mr. Maes effective 1 March 2016.

Outlook: Commenting on the 1H FY16 trading, the Group CEO Magomet Malsagov said:  Despite continued uncertainty in global economies and capital markets, during 1H FY16 all key industry trends have continued to develop in favour of stevia. Regulators, politicians and F&B companies in all regions are being challenged to find solutions to obesity and diabetes. Mintel data shows that stevia is being used increasingly as part of the solution.

In 1H FY16 we again strengthened our position as market leader with further proprietary product innovation and growth in both delivered sales and project pipelines. To support our sustained long term growth prospects, we are expanding our production capacity.  

Reflecting the development of stevia into a mainstream ingredient for Food and Beverage products, in October 2015 we transferred our market listing to the Main Market of the London Stock Exchange (LSE). After seven successful years on LSE AiM we believe the Main Market will provide a more appropriate share trading platform to support the next stages in our development.

In July we welcomed Mitch Adamek and Guy Wollaert to our Board and already in 1H FY16 we have benefitted from their insights and experience. Today we say goodbye to Olivier Maes who retires from the Board after nine years' service: on behalf of the entire board I wish to thank him for his contribution to the success of PureCircle. His experience in the food and beverage sector has served the company well. 

With increased adoption of PureCircle stevia solutions by the global F&B industry the Company is confident of significant medium to long term growth in sales and profitability. Growth in profitability is already evident in our 1H FY16 results and we expect more in 2H FY16. However the trajectory of our sales growth will likely be uneven and is dependent on the pace and extent of customer roll-outs.

Contacts

This announcement is available on the Company's website www.purecircle.com.

NOTES TO EDITORS

PureCircle is the world's leading producer of high-purity stevia ingredients for the global food and beverage industry. Its mission is to encourage healthier diets around the world through the supply of natural ingredients to the global food and beverage industry. Its vision is to lead the global expansion of stevia as the next mass volume, natural-origin sweetener. PureCircle has offices around the world with the global headquarters in Kuala Lumpur, Malaysia. The Business was founded in 2002. PureCircle shares are listed on the Main Market of the London Stock Exchange and trade under the ticker symbol PURE. For more information, visit: www.purecircle.com.

Condensed consolidated statement of comprehensive income

for the period ended 31 December 2015

Condensed consolidated statement of financial position

As at 31 December 2015

Condensed consolidated statement of changes in equity

as at 31 December 2015

Condensed consolidated cash flow statement for the period ended 31 December 2015

Condensed consolidated cash flow statement for the period ended 31 December 2015 (continued)

The cash and bank balances of $48.5m on the face of the balance sheet includes restricted cash amounting to $0.3m which is excluded from the cash flow statement.

Notes to interim financial statements

1. General information

The Company was incorporated and registered as a private limited company in Bermuda, under the Companies (Bermuda) Law 1991 (as amended). The Company is listed on the Main Market of the London Stock Exchange.

The Company is engaged principally in the business of investment holding whilst the principal activities of the rest of the Group are the production, marketing and distribution of speciality natural ingredients based upon high purity stevia.

The unaudited condensed consolidated interim financial statements have been authorised for issue by the Board of Directors on 1 March 2016.

2. Basis of preparation

The condensed consolidated financial information comprises the unaudited interim financial information for the six months to 31 December 2015 and 31 December 2014. The condensed consolidated interim financial statements has been prepared in accordance with IAS 34, "Interim Financial reporting" and the Disclosure and Transparency Rules issued by the Financial Conduct Authority. The condensed consolidated financial information is unaudited but has been reviewed by the auditors and their review report is set out on page 19.

The condensed consolidated interim financial statements should be read in conjunction with the Group's annual financial statements for the year ended 30 June 2015 ("FY2015"), which have been prepared in accordance with International Financial Reporting Standards ("IFRSs"). The auditors' report on those statements was unqualified and did not contain an emphasis of matter paragraph.

This condensed consolidated information has been prepared under the historical cost convention and on a basis consistent with the IFRS accounting policies as set out in the Annual Report for the year ended 30 June 2015.

The preparation of this condensed consolidated financial information requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities at the date of this condensed consolidated financial information. Such estimates and assumptions are based on historical experience and various other factors that are believed to be reasonable in the circumstances and constitute management's best judgement at the date of the condensed consolidated financial information. The key estimates and assumptions were the same as those applied to the consolidated financial statements for the year ended 30 June 2015. In the future actual experience may deviate from these estimates and assumptions, which could affect these condensed consolidated financial information as the original estimates and assumptions are modified, as appropriate, in the period in which the circumstances change.

3. Accounting policies

The accounting policies adopted are consistent with those of the previous financial year. Amendments to IFRSs effective for the financial year ending 30 June 2016 are not expected to have a material impact on the group.

4. Fair value estimation

Assets and liabilities measured at fair value can be determined based on valuation methods as defined in the fair value measurement hierarchy as follows:

(i) Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1).

(ii) Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (Level 2).

(iii) Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3).

There are no assets and liabilities of the Group which are measured at fair value. The carrying values of the financial assets and liabilities of the Group at the balance sheet date approximated their fair values.

5. Other income

Other income represents net foreign exchange gain and other miscellaneous income.

6. Other expenses

Other expenses represent net foreign exchange loss and other operating expenses.

7. Principal risks and uncertainties

The Group operates a structured risk management process, which identifies and evaluates risks and uncertainties and reviews mitigation activity. The principal risks and uncertainties which may affect the business activities of the Group are summarised below.

· Continued growth in the Stevia Market:

The Group has pioneered the development of the high purity stevia market and is focused on the further development of that market. Additionally the Group has an operationally geared business model in which profitability is sensitive to volumes. This makes the Group's future profitability sensitive to the continued growth in the Stevia Market.

Management mitigate this risk with an active programme of new stevia product innovation to support further consumer adoption of stevia and to enable future F&B formulation projects. Further the Group invests to protect and promote the natural credentials of stevia. These activities coupled with external evidence, such as Mintel data, shows continued strong growth in F&B product launches using stevia which provides confidence in there being sustainable stevia market growth over the long term.

· Competition: over time more competitors may enter the stevia market with the potential to reduce the Group's share of that market

As pioneers in the development of the stevia market, the Group is believed currently to have a majority share of the Global stevia market. There is a risk that as stevia becomes established as a large volume mainstream F&B ingredient, more competitors may enter the stevia market with the potential to reduce the Group's share of that market. Further competitors, in coming into the market, may seek to attack the Group with disruptive supply technologies.

This risk is mitigated by the significant potential growth in the total size of the stevia market. The global sweetener and flavour markets have an annual ingredient sales value in excess of $90 billion. By contrast the CY2015 global stevia market size is estimated at just $0.2 billion. This means there remains considerable growth potential for stevia market and with it scope for the Group to grow revenues significantly even with reduced market share. Further there is limited scope for any new technologies to be labelled as naturally sourced, which is likely to significantly limit their acceptance by consumers.

· Leaf costs: the Group's financial performance can be impacted by material changes in the input costs of its primary raw material, the stevia leaf

Dried leaf from the stevia plant is the Group's primary raw material and it constitutes the majority of the Group's variable costs of production. It follows that the Group's financial performance can be impacted by material changes in the input costs of the stevia leaf.

Over the long term stevia is a highly efficient source of natural sweetness with excellent sustainability and agro-economic properties which will underpin a well-balanced sustainable global supply that will substantially mitigate this risk.

In the medium term, the Group is managing this risk by developing large scale diversified supply outside China. Our plans are to have majority supply outside of China by 2020. To achieve this, PureCircle continues to lead the diversification of leaf supply into new geographic regions centred on our leaf development hubs in Africa, South America and India. Further the Group is making progress working with larger commercial agricultural partners who have the potential to scale supply more quickly than traditional smallholders.

· Working capital funding to support large growth plans:

The Group currently controls its supply chain 100% from leaf supply through extraction, purification to end customer sales relationships. This 100% control critically provides the Group with its innovation leadership. At the same time it requires the Group to fund the working capital from leaf purchases through to end sales receivables and including appropriate inventory holdings. Given the Group's growth plans, working capital funding requirements may increase. There is always a risk that capital market conditions may make funding of such working capital hard to source.

The Group manages its working capital growth risk actively through a suite of ongoing policies. These include operational policies to ensure balance between supply purchases, inventory holdings and forecast sales cashflows; that maintains appropriate gross cash and facility headroom availability at all times; and that works actively to build and maintain bank and equity relationships.

· Concentrated production capacity:

As pioneers in the development of the stevia industry it is inevitable that for a certain period in its development the Group's production capacity will be concentrated into specific facilities. This situation will continue until such time as demand volumes warrant the construction of more diversified production capacity. During this period the Group is at risk of catastrophic event impacting either of its production facilities.

The Group manages this risk actively through a variety of policies and practices. The Group has a policy of holding high levels of finished goods specifically and inventory generally relative to sales levels; and management work closely with larger customers to ensure that their inventory holdings are appropriate; the production facilities are designed on a modular basis so as to reduce the likelihood of any one event impacting more than a proportion of the total facility.

· Management: As pioneers in the development of the stevia industry, the Group is reliant upon the performance of highly skilled personnel including its senior management team

Stevia is a relatively new industry, in consequence the talent pool of management with the skills and experience of working in the stevia market is smaller than that in other more established industries.

The Group manages this risk by ongoing investment in senior management retention programmes for all key managers, including the Group's Long Term Incentive Programme (LTIP).

· Managing growth: the Group has significant growth plans, which will require more complex execution skills and processes

The Group has grown significantly (by over 200%) across the last five years and has plans to continue to do so. With such levels of growth comes the challenges of managing a more complex business including a diverse customer base and an expanded product portfolio.

The Group manages these risks by investing heavily in appropriately skilled senior management and in global management information systems including the roll out of Oracle's JD Edwards global Enterprise Resource Planning (ERP) management information system.

· Managing health and safety

The Group operates in the food ingredient industry and operates a food grade supply chain, including large production facilities. As a result health and safety considerations are a significant operating factor for the Group's business.

The Group manages its health and safety requirements actively through a combination of strategy, design, policy and process management. The Group's strategy is to be in full compliance with all health and safety requirements at all times across the Group; our supply chain, including production configuration, is designed to support this strategy and operating policies and processes are structured to re-inforce compliance on an ongoing basis.

8. Going Concern

After reviewing the Group's cashflows for the foreseeable future covering a period of not less than twelve months from the date of this report, the directors are satisfied that, at the time of approving the unaudited condensed consolidated financial statements, it is appropriate to continue to adopt a going concern basis of accounting.

9. Segmental information

Management determines the Group's operating segments based on the criteria used by the Chief Operating Decision Maker who has been identified as the Chief Executive Officer (CEO) for making strategic decisions. Management considers the Group to be a single operating segment whose activities are the production, marketing and distribution of natural sweeteners and flavors.

From a geographical perspective, the Group is a multinational with operations located on all continents, but managed as one unified global organization.

In the reporting of financial information, the Group uses certain alternative performance measures that are not required under IFRS, the generally accepted accounting principles (GAAP) under which the Group reports. The Group believes that these additional measures, which are used internally, are useful to users of the financial information in helping them understand the underlying business performance.

The primary performance indicators used by the Group are revenues, gross margin, gross margin %, adjusted EBITDA, net cash from operations, net debt and headroom.

The above measures are considered useful by management because:

- In the Group's high operationally geared business model profitability is sensitive to revenues and gross margin %.

- Adjusted EBITDA is considered the most efficient profit and loss account indicator of "operating cashflow profitability"

- Net cash from operations, net debt and headroom are important measures of cashflow and debt capacity

- Gross margin is calculated as revenues less cost of sales including sales duty and freight costs

- Gross margin % is calculated as gross margin as a % of revenues

- Operating profit is calculated as gross margin less administrative expenses plus other income

- Adjusted EBITDA is calculated as operating profit plus depreciation and amortization. This also represents earnings for the financial period plus taxation, finance costs, depreciation, amortization, foreign exchange, other expenses and Main Market listing costs all added back

- Other expenses comprise discretionary remuneration related costs including the Group's Long Term Incentive Plan (LTIP) and bonus

- Net debt is calculated as total bank borrowings (both short and long term) less gross cash and bank balances.

- Headroom is calculated as gross cash and bank balances plus all unutilised elements of the Group's bank facilities.

Seasonality

Due to the seasonal nature of the Group operations, higher revenues and operating profits are usually expected in the second half of the year than the first six months.

In the financial year ended 30 June 2015, 34% of revenues accumulated in the first half of the year, with 64% accumulating in the second half.

Geographical information

10. Property, plant and equipment and intangible assets

During the period, the Group invested USD5.9 million in property, plant and equipment.

The addition to intangible assets is in respect of capitalisation of product developments and transfer from biological assets during the period, net of amortisation for products now launched commercially.

11. Inventories

12. Biological assets

Nursery plants with a book value of $3.4m (FY15 $3.6m) previously reported as biological assets have been transferred to product development within intangible assets reflecting the changed nature of the Group's nursery operations. The group's leaf nurseries are now focused on improving leaf strains and similar leaf development intellectual property activity as opposed to their historic role in the production and supply of seedlings.

13. Borrowings

During the period, the Group repaid bank loans amounting to USD72 million, in line with previously disclosed repayment terms. The Group then drew down bank loans amounting to USD58 million at a weighted average effective interest rate of 5% per annum. The proceeds were used to meet working capital.

The non-current term loans fall due in September 2019.

14. Income taxes

Income tax expense is recognised based on management's best estimate of the weighted average annual income tax rate expected for the full financial year.

The Company was granted a tax assurance certificate dated 18 August 2007 under the Exempted Undertakings Tax Protection Act 1966 pursuant to which it is exempted from any Bermuda taxes (other than local property taxes) until 28 March 2016 which was extended to 31 March 2035 following the enactment of the Exempted Undertakings Tax Protection Amendment Act 2011.

A subsidiary of the Group, PureCircle Sdn Bhd (PCSB), has been granted the Bio-Nexus Status by the Malaysian Biotechnology Corporation Sdn Bhd in which PCSB is entitled to a 100% income tax exemption for a period of 10 years on its first statutory income commencing in 2009. Upon the expiry of the 10-year incentive period, PCSB will be entitled to a concessionary tax rate of 20% on income derived from qualifying activities for a further period of 10 years.

Another subsidiary of the Group, PureCircle (Jiangxi) Co. Ltd. (PCJX), has also been granted a 10% exemption on corporate tax from 1 January 2013 to 31 December 2020 by Ganzhou State Tax Revenue Department under the Western Ganzhou State Development program.

15. Share capital and share premium

16. Earnings per share

The basic earnings per share is calculated by dividing the profit attributable to owners of the Company by the weighted average number of ordinary shares in issue during the period.

17. Dividends

No dividends were declared or paid by the Company during the interim period.

18. Contingent liabilities and capital commitments

At the end of the period, there are no material contingent liabilities which, upon becoming enforceable, may have a material impact on the financial position of the Group.

Capital commitments amounting to approximately USD5.8million were approved and contracted for, the purchase of land and upgrading of plant and machinery in Malaysia.

19. Events after the end of the reporting period

There were no events that had a material impact to the condensed consolidated interim financial statements after the end of the reporting period.

20. Significant related party transactions

(a) Identities of related parties:

The Group and / or the Company have related party relationships with:

i) its subsidiaries and joint ventures;

ii) the directors who are the key management personnel; and

The following transactions were carried out by the Group during the period:

(b) Related parties

21. Directors' Responsibility Statement

The Directors confirm, that to the best of their knowledge, that this condensed financial information has been prepared in accordance with IAS34 "Interim Financial reporting", and that this Half-Year Report includes a fair review of the information required by the Disclosure and Transparency Rules of the Financial Conduct Authority, paragraphs DTR 4.2.7 and DTR 4.2.8.

The Directors of PureCircle Limited are as listed on pages 44 and 45 in the PureCircle Limited Annual report for the year ended 30 June 2015.

Details of all the current Directors of PureCircle Limited are maintained at www.purecircle.com

For and on behalf of the Directors:

Magomet Malsagov William Mitchell

CEO CFO

1 March 2016

Independent review report to PureCircle Limited

Report on the condensed consolidated interim financial statements

Our conclusion

We have reviewed the condensed consolidated interim financial statements (the "interim financial statements") in the interim results of PureCircle Limited for the six month period ended 31 December 2015. Based on our review, nothing has come to our attention that causes us to believe that the condensed consolidated interim financial statements are not prepared, in all material respects, in accordance with International Accounting Standard 34 and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

What we have reviewed

The interim financial statements comprise:

· the condensed consolidated statement of financial position as at 31 December 2015;

· the condensed consolidated statement of comprehensive income for the period then ended;

· the condensed consolidated cash flow statement for the period then ended;

· the condensed consolidated statement of changes in equity for the period then ended; and

· the explanatory notes to the condensed consolidated interim financial statements.

The interim financial statements included in the interim results have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as issued by the International Accounting Standards Board and the Disclosure Rules and Transparency Rules of the United Kingdom's Financial Conduct Authority.

As disclosed in note 2 to the interim financial statements, the financial reporting framework that has been applied in the preparation of the full annual financial statements of the Group is applicable law and International Financial Reporting Standards (IFRSs) as issued by the International Accounting Standards Board.

Responsibilities for the condensed consolidated interim financial statements and the review

Our responsibilities and those of the directors

The interim results, including the interim financial statements, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Our responsibility is to express to the company a conclusion on the condensed consolidated interim financial statements in the half-yearly report based on our review. This report, including the conclusion, has been prepared for and only for the company for the purpose of complying with the Disclosure and Transparency Rules of the Financial Conduct Authority and for no other purpose. We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

What a review of condensed consolidated financial statements involves

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures.

A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

We have read the other information contained in the interim results and considered whether it contains any apparent misstatements or material inconsistencies with the information in the interim financial statements.

PricewaterhouseCoopers LLP

Chartered Accountants

1 March 2016

London

Notes:

(a) The maintenance and integrity of the PureCircle Limited website is the responsibility of the directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website.

(b) Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Shareholder Information

Internet

Investors and corporate stakeholders

www.purecircle.com

Health professionals, customers, policy makers, consumers

www.globalsteviainstitute.com

Investors Relations

Requests for copies of the annual reports published in 2015 and previous years or other investor relations matters should be addressed to PureCircle office: ir@purecircle.com 

Share Registrar

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PO Box 83, Ordnance House,

31 Pier Road St Helier

Jersey JE4 8PW

Channel Islands.

In the UK (Depository Interests)

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