SCT - Unusual Non-Cash Tax Adjustment
3:34PM, 20 Aug 2010 | GENERAL
20 August 2010
Scott Technology Limited ("Scott") advises that it will incur an unusual
non-cash tax adjustment of approximately NZ$1 million in its financial
results for the year ended 31 August 2010.
The unusual non-cash tax adjustment arises from the significant taxation
changes announced by the New Zealand Government in its budget in May 2010.
These include the elimination of depreciation on buildings for tax purposes,
and a reduction in the corporate taxation rate from 30 percent to 28 percent,
both with effect for Scott from 1 September 2011.
Scott has carried out a preliminary review of its future tax obligations in
the light of these changes. Based on this review, the company has assessed
that it is required to increase its provision for deferred tax by NZ$1
million. The final amount, which will be confirmed at the full year audit,
recorded in the financial result for the year ended 31 August 2010 to be
announced in mid October 2010.
The increased provision is a one-off accounting entry that is non-cash in
nature and will not affect underlying profitability or the dividend payout in
respect of the 2010 financial year. Whilst the recognition of the deferred
tax liability is non-cash in nature, the elimination of the tax deductibility
buildings will result in a small increase in future income tax payments.
Chief Financial Officer