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However, China Ouhua is confident that its existing financial standing is sufficient to finance its working capital requirements for the next 24 months. Meanwhile, China Ouhua's management said it had made efforts to improve sales revenue, but the wine market in China remains highly competitive and the prolonged impact of the Covid-19 pandemic had further impacted the group's operating result. 'These conditions indicate the existence of a material uncertainty which may cast significant doubt about the group’s and company’s ability to continue as a going concern,' UHY Lee Seng Chan added. In addition, the discounted cash flow shows negative losses. The impairments were made due to the subsidiary's continuous business losses due to loss of major markets.

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The auditor also drew attention to the full impairment made in China Ouhua's financial statements for FY2022 to the amount due from its subsidiary Yantai Fazenda Ouhua Winery Co Ltd and investment in the subsidiary amounting to RMB75.85 million and RMB60.14 million respectively. 'Consequently, we are unable to determine whether any adjustments to the carrying amount of the deposits as at are necessary.' As at the date of this report, the procedures in relation to the transaction are pending completion.Īs such, UHY Lee Seng Chan said it was unable to obtain sufficient appropriate audit evidence with respect to the extent of recoverability and valuation of the deposits of RMB118.8 million. Under the sale and purchase agreement entered into in December 2013, in the event that the transaction is not completed, Huangwu Subdistrict Office will refund the deposits of RMB118.8 million to the group. KUALA LUMPUR (April 27): The external auditor of China Ouhua Winery Holdings Ltd has flagged a material uncertainty that may cast significant doubt on the China-based wine producer's ability to continue as a going concern.Īccording to a filing with Bursa Malaysia on Thursday (April 27), Messrs UHY Lee Seng Chan & Co's report, on the audit of China Ouhua's financial statements for the financial year ended (FY2022), noted that included in its trade and other receivables are deposits of RMB118.8 million (RM76.5 million), representing 90% of the total purchase price of RMB132 million which the group had paid to Huangwu Subdistrict Office, Zhifu District, Yantai City, for the purchase of a piece of government property in the south of Yantai City, China.