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A Triumph-Adler AG tax loss carryforwards no longer deductible following Kyocera Mita takeover

Tuesday 20. January 2009 - Kyocera Mita Corporation, Osaka, Japan, has today announced that, as of the expiry of the acceptance period for its voluntary public takeover offer of December 13, 2008, it now holds 37.320.235 shares of TA Triumph-Adler AG (a direct share of approximately 67.39%), and that the takeover offer for a further 11,799,656 shares of TA Triumph-Adler AG, corresponding to a share of around 21.31%, was accepted.

The takeover offer is subject to anti-trust approval by the European Commission, as well as South African anti-trust authorities.

Subject to the granting of these two approvals, Kyocera Mita Corporation consequently holds a share of 88.69% of the voting rights in TA Triumph-Adler AG, and has thus acquired a share of over 50% of the total number of voting rights in TA Triumph-Adler AG as a result of its takeover offer. Subject to the granting of these two approvals, and pursuant to § 8 c, Paragraph 1,1 Clause 2 of the German Corporation Income Tax Act, this means in turn that all tax loss carryforwards of TA Triumph-Adler AG and of its German subsidiaries already in existence as of this date, are no longer tax-deductible.

The tax benefits arising from these loss carryforwards were capitalized as deferred tax assets to an amount of around EUR20 million pursuant to IFRS 12 in the interim financial statements of the TA Triumph-Adler Group as of September 30, 2008. In all likelihood, this item must now be written down in its entirety. Group earnings in the consolidated financial statements as of December 31, 2008 will consequently be correspondingly lower, and a charge will be applied to consolidated equity.

This accounting process has no impact on the balance sheet of the legally relevant parent company, TA Triumph-Adler AG, and has no effect on operating cash flow. Effects on components of Group financing cannot be excluded currently, however. This possibility was communicated to the affected parties ahead of the submission of the takeover offer. In this connection, the Management Board of TA Triumph-Adler AG refers to Section 7.2 of the offer document, in which Kyocera Mita declares that it will “enable the continuation of financing or corresponding replacement financing through appropriate measures”.