Toshiba granted extension to accounting deadline

23 June 2017

Japan's Toshiba Corporation has been granted an extension to the deadline for the submission of its audited earnings results for the 2016 financial year, which ended on 31 March. At the same time, the company has slightly revised its annual loss estimate.

On 11 April, Toshiba reported a loss of JPY532 billion ($4.8 billion) for the first nine months of FY2016 (April to December), up from a JPY479.4 billion loss recorded in the same period of FY2015. These figures were released without the approval of its auditor, PricewaterhouseCoopers Aarata. At that time, Toshiba said it planned to announce its final earnings report for FY2016 in mid-May. On 15 May, Toshiba again postponed release of the results, but said it now expected to report a consolidated net loss of JPY950 billion. At the end of that month, the company said it aimed to file a securities report with the Tokyo Stock Exchange and Tokyo's Kanto Finance Bureau by the legally required deadline of 30 June.

Westinghouse, which Toshiba bought in 2006, filed for Chapter 11 bankruptcy on 29 March to protect it from creditors while it undergoes restructuring. Toshiba warned in December last year that it might have to write off "several billion" dollars because of Westinghouse's purchase in 2015 of US construction firm CB&I Stone & Webster (S&W).

Chip business

Toshiba announced on 21 June that it had selected a consortium of Innovation Network Corporation of Japan, Bain Capital Private Equity LP, and Development Bank of Japan as preferred bidder in respect of the sale of its computer chip business. It hopes to reach a definitive agreement with the consortium by 28 June, and to close the transaction in March 2018.

The chip business was spun off into a separate company on 1 April. Toshiba said earlier that, providing it can sell the business, it anticipates posting a net profit of JPY50 billion for fiscal year 2017-2018.

Toshiba announced today that it had received approval for an extension to the deadline for submitting its audited accounts for FY2016 from 30 June to 10 August.

The company said that although it expected the auditing of its accounts to be completed by 30 June, it had sought the extension because Westinghouse's "accounting and auditing procedures" will not be completed until the end of July. Final auditing procedures of Toshiba's accounts - expected to take about ten days - would then be carried out.

Toshiba said it is progressing with its investigation into whether the timing of the "recognition" of the construction losses related to Westinghouse was "appropriate". It said its Audit Committee has already recognised that "actions by certain senior managers were attempts at inappropriate pressure, but were of only limited scope and duration".

Toshiba has also revised its outlook for its FY2016 results, in which it expects to report a loss of JPY995 billion. Its outlook for total equity attributable to shareholders is minus JPY581.6 billion, with net assets of minus JPY303.9 billion.

The company said that as Westinghouse was deconsolidated from the group as of 31 March, "there is no possibility of major changes in the balance sheet as of 31 March 2017, unless there is a subsequent discovery of currently unknown events that occurred in the reporting period".

The Tokyo Stock Exchange and Nagoya Stock Exchange have notified Toshiba that its stock will be transferred from the first to the second section of the exchanges as of 1 August. In addition, the company will also be listed as a security on both exchanges in a grace period pertaining to delisting from 1 April 2017 to 31 March 2018.

Researched and written
by World Nuclear News

Filed under: Construction, Japan