Business
Sun Gro Horticulture Income Fund Announces Reclassification of Income Tax Asset
Sun Gro Horticulture Income Fund Announces Reclassification of Income Tax Asset.
About this update from Coloured Ties Capital Inc
[{"type":"text","content":"\n\n\n\nTRADING SYMBOL: Toronto Stock Exchange - GRO.UN\n\n\nVANCOUVER, March 7 /CNW/ - Sun Gro Horticulture Income Fund (the Fund)\ntoday announced that, as part of an internal review of tax matters, it\ndetermined that Sun Gro Horticulture Canada Ltd. (Sun Gro, or the company) had\nfiled an income tax return for 2002 that incorrectly carried back operating\nlosses in that year to a prior period. This resulted in an income tax refund\nto the company of $1.1 million that was received in 2003. Instead of carrying\nthe operating losses back and receiving the tax refund, they should have been\ncarried forward to offset taxable income in subsequent years. The company has\nreached an agreement with the Canada Revenue Agency to repay the $1.1 million\ntax refund plus $0.3 million of accrued interest. Payment will be made in\nMarch 2007 with funds drawn on Sun Gro's revolving operating facility. The\ncompany has restated its 2005 balance sheet to reflect a reclassification of\nthis income tax asset. The benefit of these operating losses will be available\nto offset taxes payable in future years. The reclassification did not affect\nearnings or distributable cash in 2005 and 2006.\n\n\nThe restated December 31, 2005 balance sheet reflects a reduction in\nfuture taxes payable, and an increase in accounts payable and other accrued\nliabilities equal to the $1.1 million. The interest amount has been recorded\nas a 2006 expense. The $1.1 million is equivalent to approximately\n$3.5 million of operating losses. The addition of this amount to the operating\nlosses that the company may carry forward to offset future taxable income\nbrings the total of Sun Gro's loss carryforwards to approximately\n$9.9 million. Of this total, $5.4 million expires in 2010 and $4.5 million\nexpires in 2015. By utilizing these loss carryforwards, Sun Gro has not yet\nneeded to take any tax deduction for depreciation. These deductions will still\nbe available to offset future taxable income in Canada after the loss\ncarryforwards are utilized.\n\n\nForward-Looking Statements\n\n\nThis news release contains forward-looking statements. These statements\nrelate to future events or future performance and reflect Sun Gro's\nexpectations regarding its growth, results of operations, performance,\nbusiness prospects, opportunities or industry performance or trends. These\...