Andres Wines Ltd.

Andres Wines Ltd.

June 06, 2006 17:48 ET

Andres Wines Ltd. in the Process of Filing Notice of Action

GRIMSBY, ONTARIO--(CCNMatthews - June 6, 2006) - Andres Wines Ltd. (TSX:ADW.A)(TSX:ADW.B) today announced it is in the process of filing a Notice of Action in the Superior Court of Ontario against a former non-executive employee for apparent misappropriation of funds. The alleged misappropriation of funds is believed to have occurred over several years and is estimated to be in the range of $3 - 7 million. The Company believes that its insurance policies will cover a portion of any loss incurred.

Management discovered certain inconsistencies while preparing for the Company's recent year end audit. Immediately, Andres hired independent forensic accountants KPMG Forensic to conduct a full investigation. The Board of Directors' Audit Committee, KPMG Forensic, the Company's insurers, auditors and management team have been working closely to fully resolve the situation.

The investigation has revealed that the alleged misappropriation of funds was a sophisticated and well-orchestrated series of events conducted solely by the former non-executive employee over several years. The Company has determined that the alleged misappropriation of funds will not have any material impact on the Company's financial position or results for the year ended March 31, 2006. In addition, Andres is continuing to put in place procedures to further strengthen its financial controls.

The Company expects it will be releasing its year end financials on or before June 29, 2006. Andres will also be restating its 2005 financial results once the investigation is complete, but based on current information, does not expect the restatement to materially impact previously reported earnings for fiscal 2005 or prior years.

Andres Wines Ltd. is a leading producer and marketer of quality wines in Canada. With wineries in British Columbia, Ontario and Nova Scotia, the Company markets wines produced from grapes grown in Ontario's Niagara Peninsula, British Columbia's Okanagan Valley and vineyards around the world. The Company's award-winning premium and ultra-premium brands include Peller Estates, Trius, Hillebrand Estates, Thirty Bench, Sandhill, Copper Moon, Calona Vineyards Artist Series VQA wines and Red Rooster wines. Complementing these premium brands are a number of popular priced products including Hochtaler, Domaine D'Or, Schloss Laderheim, Royal and Sommet. With the acquisition of Cascadia Brands Inc, the Company also markets craft beer under the Granville Island brand. With a focus on serving the needs of all wine consumers, the Company produces and markets consumer-made wine kit products through Winexpert Inc. and Vineco International. In addition, the Company owns and operates Vineyards Estate Wines and WineCountry Vintners, an independent wine retailer in Ontario with more than 100 well-positioned retail locations. Andres common shares trade on the Toronto Stock Exchange (symbols ADW.A and ADW.B).

Contact Information

  • Andres Wines Ltd.
    Peter Patchet
    Chief Financial Officer, EVP Human Resources
    (905) 643-4131, ext 2210