PKC Group Oyj - Company Announcement

PKC HAS RECEIVED A TAX REASSESSMENT DECISION RELATED TO BUSINESS RESTRUCTURING CARRIED OUT IN 2009 – TAXES AND RELATED PAYMENTS AMOUNT TO EUR 8.3 MILLION

PKC Group Plc         Company Announcement 23 September 2014     9.00 a.m.



PKC HAS RECEIVED A TAX REASSESSMENT DECISION RELATED TO BUSINESS RESTRUCTURING
CARRIED OUT IN 2009 - TAXES AND RELATED PAYMENTS AMOUNT TO EUR 8.3 MILLION 



PKC Group has received a tax reassessment decision from Finnish tax
administration in relation to the Wiring Systems business restructuring carried
out in 2009. The decision obliges PKC Group to pay EUR 8.3 million additional
taxes, punitive tax increases and interests, which company will record in the
third quarter results. 



The tax reassessment decision is based on the transfer pricing tax audit
carried out in the beginning of 2011. Tax reassessment relates to the Wiring
Systems business restructuring that was carried out in 2009 due to business and
commercial reasons. As a part of the restructuring, the company sold certain
specified, fixed term client contracts and inventory to its Estonian
subsidiary. The company used third party valuation to support the assessment of
arm's length pricing for the transactions. The valuation was carried out in
accordance with generally applied valuation principles. The company's
management considered that the valuation supported its view on the market value
of the assets sold. At the time of the decision-making on the restructuring,
the financial crisis was at its deepest and the business subject to
reorganisation was loss-making. Due to the difficult market situation and the
loss-making business, the company was forced to adapt its business operations.
PKC Group also carried out several co-determination negotiations in its Finnish
operations in 2009. 



The company and the Finnish tax administration have significantly different
views in assessing the nature of the reorganisation and its valuation. PKC
Group is of the opinion that it has complied with the tax laws, OECD's transfer
pricing guidelines and tax administration's guidelines. PKC Group considers the
claim to be without foundation and will appeal the decision to the Board of
Adjustment. 



PKC Group Plc

Board of Directors



Matti Hyytiäinen

President & CEO





For additional information, contact:

Matti Hyytiäinen, President & CEO, PKC Group Plc, +358 400 710 968

Juha Torniainen, CFO, PKC Group Plc, Tel. + 358 (0)40 570 8871





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PKC Group is a global partner, designing, manufacturing and integrating
electrical distribution systems, electronics and related architecture
components for the commercial vehicle industry and other selected segments. The
Group has production facilities in Brazil, China, Estonia, Finland, Germany,
Lithuania, Mexico, Poland, Russia, Serbia and the USA. The Group's revenue in
2013 totalled EUR 884.0 million. PKC Group Plc is listed on NASDAQ OMX Helsinki
Ltd.