On completion of the Companys previously announced private placement with CBG Holdings LLC, an
affiliate of Constellation Brands, Inc. (Constellation), Constellation will become an affiliate of the Company. In August the Companys predecessor auditor, Deloitte LLP (Deloitte) informed the Company that as a result of this affiliation, the
firm would no longer be considered independent of the Company under the rules and regulations of the Public Company Accounting Standards Board (PCAOB) and the U.S. Securities and Exchange Commission (SEC
)
.
Upon notification by Deloitte, the Companys audit committee undertook a process to identify a new independent auditor. The Company in collaboration with
Constellation reviewed and documented the services provided by certain audit firms to both companies to assess their independence relative to the rules and regulations of the PCAOB and the SEC
.
All major international audit firms were noted to have independence issues relating to the provision of services determined to be impermissible under the
independence rules of the SEC, with KPMG LLP (KPMG) noted to have provided the least of such services. Accordingly, KPMG was requested by the Company to assess and perform independence evaluation procedures.
KPMGs independence evaluation procedures also identified that the firm had provided valuation and tax loaned staff services to the Company during the
fiscal year ending March 31, 2019, which were determined to be impermissible under the independence rules of the SEC. All such engagements were completed or terminated prior to October 4, 2018.
KPMG considered whether the matters noted above impacted its objectivity and ability to exercise impartial judgment with regard to its engagement as our
auditors and have concluded that there has been no impairment of KPMGs objectivity and ability to exercise impartial judgment on all matters encompassed within its audits.
After taking into consideration the independence of these audit firms in connection with identifying a new independent auditor, including the facts and
circumstances of the above matter and KPMGs determination, the Companys audit committee also concluded that KPMGs objectivity and ability to exercise impartial judgment has not been impaired.
Accordingly, upon Deloittes resignation, on October 4, 2018 KPMG was appointed as the Companys independent auditor for the audit of the
consolidated financial statements of the Company as at and for the year ended March 31, 2019
.
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