Angostura Holdings, the CL Financial subsidiary, has declared a loss of $1.28 billion for 2008 and is unable to produce its audited results for 2009.
While the company reported an unaudited net profit of $101.3 million for the first half of 2010, close to half of that is due to foreign currency gains. The company submitted its audited results for 2008–described by a stock market analyst as being the largest loss in the history of the T&T Stock Exchange–and its unaudited results for the first half of 2010 to the T&T Stock Exchange after 4 pm on Friday last. In reporting its first financial results of any kind since November 2008, Angostura stated that its consolidated financial statements for the year ended December 31, 2008, were "materially impacted by post-year-end events involving CL Financial."
The "precarious" financial position of its parent "impaired the collectability of circa $1.185 billion in receivables from the CL Financial Group," the company said. The rum and bitters producer stated in its report that recognising these provisions resulted in a net loss of $1.287 billion as well as accummulated losses of $307 million and negative shareholders' equity of $121 million. The company reported that because of its loss in 2008, it was not in a position to declare any dividends for that year. "These well documented financial challenges which confronted CL Financial placed Angostura Holdings in an extremely difficult position," according to the written report which accompanied the company's results, which was signed by the vice chairman of Angostura.
The company's external auditor, PricewaterhouseCoopers (PwC), issued a disclaimer of opinion in respect of Angostura's 2008 accounts. An auditor attached to a local private firm explained that a disclaimer of opinion is where an auditor is unable, for a particular reason, to express an opinion on accounts. Angostura described PwC's decision to issue the disclaimer of opinion as "disappointing to the board," because the disclaimer was issued "on the sole basis of insufficient financial records for one US-based subsidiary, namely Angostura Spirits and Wine Inc (ASW), which, in management's view, is not material to the consolidated financial statements taken as a whole." According to Angostura: "Our auditors have been uanble to perform sufficient audit work in respect of ASW to the extent required to provide reasonable assurance that its financial impact was unlikely to be significant."
Contacted for comment, Colin Wharfe, PwC's local assurance leader, said: "We do not discuss our client's business with anyone outside the firm." Wharfe said Angostura's disclaimer of opinion was the first time in his experience and that audits are premised on materiality. Angostura was suspended from trading on the local stock exchange in July 2009 because of its failure to publish its 2008 results. Last month, the T&T Securities and Exchange Commission fined the company $160,000 for late submission of accounts.