KUALA LUMPUR (Apr 25): China Ouhua Winery Holdings Ltd’s external auditor has expressed a qualified opinion on the group’s financial statements for the financial year ended Dec 31, 2017.

Messrs UHY Lee Seng Chan & Co said it was unable to obtain sufficient appropriate audit evidence on the extent of recoverability of a deposit of RMB118.8 million that was used for a contract to purchase land and property in China.

The deposit is about 90% of the total cash consideration of RMB 132 million which was made to the Huangwu Subdistrict Office, Zhifu District in Yantai City when the group entered into a contract to purchase land, buildings, and ancillary facilities, including 320 KVA power distribution equipment, water supply systems, roads surrounding the factory and enclosing wall.

“Consequently, we were unable to determine whether any adjustments to the carrying amount of deposits as at 31 Dec 2017 were necessary,” the auditors said of their audit of the company’s financial statements,which was appended in a bourse filing.

The deposit was included in the trade and other receivables on the group’s balance sheet.

China Ouhua’s share price was unchanged at 7.5 sen on Wednesday with about 155,000 shares traded, giving it a market capitalization of RM50 million.