- 2012.02 REORIENT GROUP
Company Name: REORIENT GROUP LIMITEDStock Code: 00376Year end: December 31, 2011
Basis for qualified opinion
Prior year audit scope limitations affecting opening balances
The auditor’s report on the consolidated financial statements for the year ended 31 December 2010 was qualified in respect of limitations of audit scope described in sub-paragraphs (1) to (3) below. Any adjustments to these comparative amounts may have a consequential effect on the balance of accumulated losses of the Group and the Company as at 1 January 2011 and related disclosures in these financial statements.
1. Completeness of information
A winding-up petition against the Company was filed on 5 June 2007, and a winding-up order was made by the High Court of Hong Kong (the “Court”) on 18 March 2008. Messrs Edward Simon Middleton and Patrick Cowley were appointed as the Joint and Several Liquidators of the Company (the “Liquidators”) on 14 January 2009, pursuant to an Order of the Court. The Liquidators had only been able to provide books and records of the Group which were made available to them by the directors and management of the Group for the purpose of the audit. Accordingly, the Liquidators could not provide us with any written representations regarding any of the accounting information and records. In consequence, we were unable to carry out all the auditing procedures necessary to obtain adequate assurance regarding the assets, liabilities, income and expenses appearing in the financial statements for the year ended 31 December 2010. There were no satisfactory audit procedures that we could adopt to obtain sufficient appropriate audit evidence regarding the accuracy and completeness of the assets, liabilities, income and expenses of the Company and of the Group for the year ended 31 December 2010, and the adequacy of disclosures in these financial statements.
2. Loss of accounting records
The consolidated financial statements and the financial statements of the Company for the year ended 31 December 2010 contained financial information of the representative offices located in Beijing and Shenzhen (the “PRC representative offices”). The PRC representative offices were closed and the accounting records could not be retrieved. As a consequence, we were unable to obtain all information that we required in relation to our audit and were also unable to carry out other satisfactory auditing procedures that we considered necessary to obtain adequate assurance regarding assets, liabilities and profit or loss contributed by the PRC representative offices for the year and the adequacy of disclosures in these financial statements. In 2010, no amount was contributed from assets and profit or loss of the PRC representative offices. Liabilities contributed by the PRC representative offices amounting to HK$1,936,000 had been included in other payables and accrued charges in the financial statements as at 31 December 2010, of which we could not carry out satisfactory auditing procedures.
3. Directors’ emoluments
We were unable to carry out auditing procedures necessary to obtain adequate assurance regarding directors’ emoluments for the year ended 31 December 2010. This was not in accordance with the requirements of Section 161A of the Hong Kong Companies Ordinance.
In our opinion, except for the effects of the matter described in the Basis for qualified opinion paragraph, the consolidated financial statements give a true and fair view of the state of affairs of the Company and of the Group as at 31 December 2011, and of the Group’s loss and cash flows for
the year then ended in accordance with Hong Kong Financial Reporting Standards and have been properly prepared in accordance with the Hong Kong Companies Ordinance.