A 15% fall in annual profit has been forecasted by the upscale retailer, Kirkcaldie & Stains Ltd. The fall will happen due to further reductions in the value of inventory along with reduced sales. Government's decision to stop reduction of buildings for tax purposes has also affected the Wellington department store. Currently, it has an annual depreciation charge of $600,000 on its buildings.

A reduction in full-year profit before tax from $1.53 million to $1.3 million has been forecasted by it.

He said, "This revised profit forecast reflects a reduction in sales and a decision to take further unplanned markdowns to ensure that our inventory remains clean for our financial year end position at August 31, 2010".

As the shareholders funds were in excess of $20 million, the Company's balance sheet remained strong. A mid-winter annual sale is being completed by the iconic store owner on Lambton Quay where business shirts sold at half price.

A deferred tax liability increase of about $3 million will also be included in the annual results, which will decrease the net income by the same amount.

Though, the cash flows, dividend policy or basic productivity were not affected by the adjustment. The company revealed the fact that the balance sheet will remain strong.