Chairman’s Report

Valued shareholders of Angostura Holdings Limited, the second year of the COVID-19
pandemic—2021—was a true test of the Group’s resilience and tenacity.

The challenges doubled, as the global economy continued to feel the impact
of the pandemic which began in early 2020. Angostura, with 197 years of
history, was affected. Having understood the challenges created by the
pandemic, Angostura, to its advantage, capitalised on the opportunities
which presented themselves in the face of the pandemic and was able to
sustain its growth and maintain its viability.

In 2021, Angostura reported profit after tax of $158.3m for the fiscal year
ended December 31, 2021, which represented an increase of 8.7% over the
prior fiscal year. Given the circumstances we faced from the fallout of the
pandemic and the absence of Carnival activities locally, I regard our results
as an accomplishment.

SEGMENTS & MARKETS
The global recovery in 2021 varied from market to market with vaccination
drives boosting reopening, but uncertainty prevailed as periodic lockdowns
and labour shortages continued in various countries. This was reflected in
our 2021 revenue performance which grew marginally by 1.8% to $922m as
international markets rebounded due to reduced health restrictions.

Strong growth came from Europe, the United Kingdom, and Australia, with 51%
growth collectively over prior year due to re-stocking of bars and restaurants
as restrictions were lifted. Premium rum sales grew by 34% in Europe, Middle
East, Africa and Asia (EMEAA) exceeding pre-pandemic levels by 57% above
2019.

Despite lifted restrictions, Bitters sales in North America experienced a 22%
contraction versus prior year revenue due to severe logistical challenges, as
labour constraints in the transportation industry affected the movement
of goods from ports as well as in-land to end distributors. Notwithstanding,
Bitters revenue was 2% over pre-pandemic levels (2019) and the outlook is
positive as this key market continues to recover in 2022.

Rum performed well in 2021 and standard and premium rums increased by
56% and 52% respectively, in the USA market, taking the North American
rum segment 33% over 2019 revenue.

Locally, the impact of the pandemic was more severely felt than in 2020 with
the loss of the Carnival season, reduced consumer spending, various public
health restrictions and general uncertainty affecting demand. Revenue in
the local market declined by 1%, or $8m.

However, Angostura continued its innovation drive which boosted revenues,
with new products in every segment. In the premium rum segment, the launch of
Angostura Tribute and Symphony in December was well received. In standard
rums, White Oak Grapefruit and Pineapple flavoured rums boosted local
consumption. The innovative Tamboo Spiced Rum was launched locally
and will be expanded internationally in 2022. The rebranding of Angostura
LLB to Angostura Chill, with the introduction of the new Blood Orange and
Bitters flavour, and the seasonal favourite Sorrel and Bitters flavour, was
a key success both at home and abroad, with 17% growth of this product
segment in 2021.

On average, Bitters grew by 30% in the EMEAA market. Robust demand
in Australasia, the United Kingdom, EMEAA and Latin America resulted in
these markets collectively contributing 48% of total Bitters revenue and all
surpassed 2019 revenue performance, supporting a favourable outlook for
continued international Bitters growth. The decline of Bitters sales in North
America negatively impacted our overall product mix in 2021, driving Gross
Profit (GP) margins down and exacerbating the impact of rising production
costs.

PROFITABILITY
During fiscal 2021, our business and profitability performance continued to
be impacted by the global pandemic as we faced increased raw material
prices, increased cost of freight, supply chain challenges and varying levels
of demand as global markets experienced different levels of reopening and
recovery. The GP margin was consistent with prior year at 47% as increases
in raw material prices resulted in a higher cost of production.

With the escalation of freight and transport costs by 250% in some cases,
profitability was stringently managed by reduced local trade and brand
spend while continuing to invest in key international markets and exploiting
savings in administrative expenses. Due to improvements in the underlying
assumptions for the forward-looking elements of the Expected Credit Loss,
we recorded a significant write-back of $6.4m in 2021.

Net finance income generated from returns on our investment portfolio,
which grew by 24.7% helped to bolster profit before tax.

EXPORT EXPANSIONS
On the export side, we expanded the reach of our ANGOSTURA® cocoa bitters
in the LATAM region including Argentina, Brazil, Peru, Chile, Puerto Rico and
Uruguay. In 2021, our presence in this region grew significantly, fuelled by the
strong distribution of Bitters.

In the EMEAA region, we tapped into five unique markets – Nepal, Kyrgyzstan,
Tanzania, Zanzibar and the Maldives.

In addition, we recorded significant growth in Nigeria and China. The Group’s
growth drivers were credited to aggressive off-trade growth, extension of shelf
space and increased visibility, major event activations, trade promotions,
sponsorships, key branding in the on-trade segment at critical outlets and
e-commerce listings.

AWARDS
Despite the setbacks that we faced, our employees worked diligently together
to achieve excellence. Such excellence, which evolved in the face of the
challenges of the pandemic, was recognised and rewarded, as the Group
copped major local and international awards for its brands and operations.

At the corporate level, we won the Internationally Known…T&T Owned
Company of the Year award from the Trinidad and Tobago Chamber of
Industry and Commerce; Innovator of the Year award from the Trinidad and
Tobago Manufacturers’ Association; Business Continuity and Surviving the
Pandemic award from the American Chamber of Commerce; Corporate
Social Responsibility and Innovator of the Year awards from the Supermarket
Association of Trinidad and Tobago

Angostura’s products, which are world-renowned continued to win awards in
2021; our rum and Bitters brands won over 40 international awards and also
topped the World Spirits Award for World Class Distillery and SIP Awards tasting
for Amaro di Angostura®. ANGOSTURA® cocoa bitters, our latest innovation
in the Bitters line, won Double Gold and Consumer Choice Innovation Awards
at the SIP 2021. The 2021 SIP Awards surged with more than 1,000 competing
brands from 49 countries – the highest since its inception in 2009. With a
record-breaking 1,183 submissions, the 2021 evaluation was by far the most
competitive for brands vying to secure coveted SIP Awards recognition and
exposure. Winning this coveted award was yet another excellent achievement
for the Angostura Group.

ANGOSTURA’S CORPORATE SOCIAL RESPONSIBILITY EFFORTS
In a bid to support the COVID-19 vaccination drive in the country, Angostura
produced care packages which included Angostura-made hand sanitizer,
surgical masks, antibacterial wipes and hand wash. Angostura partnered
with several business groups to distribute the packages at vaccination sites.
We also donated hundreds of thousands of dollars’ worth of food vouchers to
communities across the country to assist those impacted by the pandemic.

Angostura supported the neighbouring island, St. Vincent and the Grenadines
when the La Soufrière volcano erupted and displaced residents, by purchasing
and donating relief items to aid in their recovery.

Angostura also continued its drive to provide assistance to its fenceline
community of Morvant/Laventille through the sponsorship of education
and training programmes.

DIVIDEND
The Board of Directors is pleased to recommend a final dividend in respect
of the year ended December 31, 2021, of $0.26 per share which would result in
a total dividend of $0.35 per share, a 16.7% increase over the corresponding
period last year. This dividend will be paid on July 29, 2022, to shareholders
on record as at July 8, 2022. To facilitate this payment, the shareholders’
register will be closed on July 6, 2022.

SHARE PRICE
The share price has appreciated by 13.5% from 2018.

CLOSING REMARKS
As markets and economies open, the expectation is that we will soon return
to normalcy, moulded by two years of change and continuously evolving
to produce excellence for our shareholders. Our ability to successfully
navigate two consecutive years of a pandemic will go down as one of our
major achievements. During this year 2022, we look forward to opportunities to
expand our global reach and profitability, always mindful of the uncertainties
that lie ahead with the remnants of the pandemic. On behalf of the Board of
Directors, I would like as always to commend and thank our staff who have
worked to attain these results in the face of all of our challenges, for without
their efforts and dedication we would not be in this place.

The Group is excited about the future as we get closer to our 200-year
anniversary and will forge ahead with a focused strategic vision, with the
aim of bringing increased value to you, our shareholders.

Mr. Terrence Bharath
Chairman