|Results for FY ended March 2018||Financial Forecast for FY ended March 2019||Year-on-year|
※Notice Concerning Recording of Deferred Tax Liabilities
Elematec Corporation announces that it has decided to change the policy on dividend payments from consolidated subsidiaries to Elematec and will, accordingly, record deferred tax liabilities as stated below.
- 1. Reason for recording deferred tax liabilities
- In order to streamline cash management and reduce exchange risks on a consolidated basis, Elematec has decided to change the policy on dividend payments from consolidated subsidiaries to Elematec and flexibly collect more dividends from consolidated subsidiaries. The following tax expenses will be incurred when overseas consolidated subsidiaries make dividend payments to Elematec:
- (1) Overseas withholding tax incurred in countries where overseas consolidated subsidiaries are located
- (2) Japanese income taxes incurred in Japan on dividends received by Elematec
- Under tax effect accounting, the amount of tax a parent company assumes in relation to dividend income from its subsidiaries must be recorded as deferred tax liabilities for the purpose of developing consolidated financial statements. In line with the change of the policy on dividend payments from consolidated subsidiaries, Elematec has decided to employ the accounting treatment of recording tax burdens expected to be incurred in the future as deferred tax liabilities in advance in the current fiscal year.
- 2. Impact on business results
- In line with the recording of deferred tax liabilities, income taxes – deferred will increase about 1.1 billion yen and profit attributable to owners of parent will temporarily decrease by the same amount in the fiscal year ending March 31, 2019. The decline is due to the above accounting treatment and thus does not mean a decline in its profitability. In addition, because the primary cause of the decline is the recording of income taxes – deferred, which does not require a cash payment at this moment, there is no revision to the dividend forecast.
Forecasts on future performance are based on the judgment and assumptions of management using information presently available. Actual performance may greatly diverge from forecasts due to fluctuations in risks and various uncertainties, and changes in economic climate.