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2008-03-03 10:15:00 CET 2008-03-03 10:15:00 CET REGULATED INFORMATION Cencorp - Company AnnouncementPUBLIC WARNING BY THE FINANCIAL SUPERVISION AUTHORITY TO CENCORP CORPORATIONCencorp Corporation has today been notified of the following decision by the Financial Supervision Authority "PUBLIC WARNING BY FIN-FSA TO CENCORP FOR NEGLECT OF DISCLOSURE OBLIGATION" The Financial Supervision Authority (FIN-FSA) has issued a public warning to Cencorp Corporation for neglect of the disclosure obligation. The FIN-FSA is of the view that Cencorp's conduct has repeatedly during the year 2006 been in violation of financial markets provisions, since it has provided unjustified estimates of the company's prospects and has delayed the correction of these estimates and because, due to the recognition of a deferred tax asset, has failed to give a true and fair view of the result of the company's operations and financial position in its financial statements for 2005 and 2006. Due to the continuous and repetitive nature of the company's misconduct, FIN-FSA is of the opinion that the company's behaviour qualifies for a public warning. The prospects of the company's net sales and results published by Cencorp in 2006 were unjustified, since in publishing its prospects, the company failed to pay due attention to its actual performance and uncertainties related to its business operations, such as changes in customers' purchasing behaviour and tightening of the competitive situation. The further the period proceeded, the clearer the excessive optimism of the prospects became. The company revised its prospects during the period, but these changes were inadequate and were not made without undue delay. The company has failed to provide sufficient justifications for the guidance it issued. The financial statements for 2005 and 2006 failed to give a true and fair view of the result of the company's operations and financial position, as the consolidated financial statements contained a material error. The company should not have recognised deferred tax assets for the carry forward of unused tax losses in its consolidated financial statements for years 2005 and 2006. The criteria for recognising a deferred tax asset for carry forward of unused tax losses were not met, since the company had a history of recent losses and it could not present in its consolidated financial statements for 2005 and 2006 other convincing evidence, as required by IAS 12 Income Taxes, that sufficient taxable profit would be available against which the unused tax losses could be utilised. The amount of the error was material, since the deferred tax asset, the recognition criteria of which was not met, amounted to 24% of equity in the consolidated balance sheet on 31 December 2005, and 51% of equity on 31 December 2006. The company announced its decision to restate in its financial statements for 2007 the comparative figures for 2005 and 2006 concerning the deferred tax asset. This is the first public warning issued by the FIN-FSA. A public warning is an administrative sanction, which the FIN-FSA has been authorised to issue since 2003. The decision is not legally final as Cencorp Corporation has the right to appeal the decision, issued on 3 March 2008, with the Market Court within 30 days of receiving the decision. FINANCIAL SUPERVISION AUTHORITY Cencorp Corporation has made an internal investigation in the matter and restated in its financial statements for 2007 the comparative figures for 2005 and 2006 concerning the deferred tax asset as released on January 18, 2008. Opinion of Cencorp Corporation is that company has acted diligently in the matter and given the answers requested to the Financial Supervision Authority. According to the decision of the Financial Supervision Authority the matter as a whole does not require any stricter actions. In Lohja, March 3, 2008 Cencorp Corporation BOARD OF DIRECTORS Further information: Ville Parpola Vice President, Legal Affairs Tel. +358 40 772 6484 Cencorp develops and supplies automation solutions to the electronics and semiconductor industry that enhance productivity. Distribution: Helsinki Stock Exchanges Main media www.cencorp.com Neither this press release nor any copy of it may be taken, transmitted into or distributed in the United States of America or its territories or possessions. |
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