The auditor of Guangdong Kelon Electrical Holdings has qualified the appliance maker's results for last year, which showed it made a net loss of 44.65 million yuan. The troubled company immediately followed up yesterday's figures by announcing a series of changes to improve corporate governance after recent reports that it was under investigation by mainland regulators. Kelon's auditor, Deloitte Touche Tohmatsu, said of the results: 'We have not obtained all the information and explanations necessary for our audit. We were unable to determine whether proper books of account had been kept.' Deloitte was unable to validate 576 million yuan of sales to two customers last year. It was also dissatisfied with the fact that Kelon booked more than 200 million yuan of sales returns last year when the management had previously said no allowance for sales returns was necessary. The net loss at one of the world's biggest producers of refrigerators and air-conditioners came after a net profit of 191.17 million yuan in 2003, according to international financial reporting standards. Turnover grew 36.8 per cent to 8.43 billion yuan last year. After the results had been released, Kelon issued 13 announcements on the Hong Kong stock exchange website, which included proposed amendments to the company's articles of association with the aim of tightening corporate governance and internal controls. A Kelon spokeswoman in Shunde, Guangdong province, denied the issue of so many announcements was in response to pressure from the China Securities Regulatory Commission. She said she was aware of mainland reports that the commission was investigating Kelon and other firms controlled by Kelon chairman Koo Chu-kwan over connected transactions and possible illegal funds transfer. One of the proposed changes to Kelon's articles of association states that controlling shareholders 'shall not take advantage of connected transactions, profit distribution, asset restructuring, external investment, capital appropriation and loan guarantee to the detriment of the company''.