The Consolidated Financial Statements include technotrans AG and its 21 subsidiaries, over which it exercises control. Control is routinely deemed to exist where a majority of voting rights is held. technotrans AG directly or indirectly holds a majority of voting rights in 20 subsidiaries. The group does not hold a majority of voting rights in SHT Immobilienbesitz GmbH & Co. Vermietungs KG, which exclusively holds and manages the factory premises in Bad Doberan that are let out to KLH Kältetechnik GmbH. However, based on the terms of the lease agreement the group essentially receives the entire income from this activity. The Board of Management consequently comes to the conclusion that SHT Immobilienbesitz GmbH & Co. Vermietungs KG is a subsidiary and is therefore to be included in consolidation. Subsidiaries that are of minor significance for the group and for the presentation of a true and fair view of the net worth, financial position and financial performance in view of their suspended or only minor level of business activity are fundamentally not included in the Consolidated Financial Statements. Three subsidiaries that are already in liquidation were not included in the Consolidated Financial Statements for reasons of minor significance.
On April 12, 2016 gds GmbH acquired 51 percent of the shares or voting rights in – and therefore control of – Ovidius GmbH, Berlin. Ovidius GmbH and its fully owned subsidiary, EasyBrowse GmbH based in Schwerin, develop XML-based content management and editorial systems for technical documentation. The acquisition therefore complements the product portfolio of gds GmbH. The acquisition was completed on the one hand through takeover of the own shares held by Ovidius GmbH itself and on the other hand by way of an increase in the share capital of Ovidius GmbH. In addition, put/call options were agreed with the remaining minority interests. technotrans is obliged to purchase the remaining non-controlling interests if the options are exercised. The put/call options contain identical rights for both buyer and seller. The calculation of the purchase price is fixed until 2021. The purchase price is dependent on the average revenue and earnings performance (EBIT) of both companies in the years 2017 to 2020. The fair value was determined on the basis of the multiples method, taking account of the planned financial indicators of the acquired companies for this period. From 2022, the purchase price is determined on the basis of the company valuation according to DCF methodology. The conditional purchase price was discounted using a risk-free cost-of-capital rate. The participating interest of gds GmbH in Ovidius GmbH may be increased to 100 percent through exercise. technotrans opted for the anticipated acquisition method” to reflect the acquisition in accounting terms. Accordingly, the acquisition of the outstanding non-controlling interests are recognised upon initial consolidation in the form of a conditional purchase price liability of € 1,090 thousand. With regard to the range of potential fluctuations estimated by technotrans due to changes in the valuation parameters, we refer to Note 32 “Financial instruments”. No payment cap has been agreed. As a result of the adoption of the anticipated acquisition method, no non-controlling interests are reported for these shares. Measurement effects from the conditional purchase price liability are recognised in profit or loss.
The acquired companies contributed € 1,325 thousand towards consolidated revenue. Their contribution to the net profit for the period was € -149 thousand. The companies were included in consolidation from the date of their acquisition. If the acquisition had taken place on January 1, 2016 the acquisition would have had an effect of € 1,948 thousand on consolidated revenue and of € -265 thousand on consolidated net profit.
The incidental costs of € 48 thousand were recognised in the Income Statement, under administrative expenses.
The corporate acquisition of Ovidius GmbH had the following effect on the Consolidated Financial Statements of technotrans AG:
|Property, plant end equipment||20|
|Deferred tax assets||74|
|Receivables and other assets||527|
|Cash and cash equivalents||802|
|Deferred tax liabilities||184|
|Identifiable assets and liabilities||1,433|
|Cost of acquisition||1,609|
|of which paid||0|
|of which capital increase||519|
|of which conditional purchase price||1,090|
|Cash and cash equivalents acquired||-283|
|Net cash inflow||283|
The trade receivables comprise gross amounts due for contractual receivables totalling € 460 thousand that were estimated in full to be recoverable at the time of acquisition. The goodwill of € 176 thousand includes non-separable intangible assets such as anticipated synergy and earnings potential, which was not recognised separately. Allocation of the purchase price to the acquired assets and liabilities in accordance with the standard IFRS 3 “Business Combinations” has been completed. The goodwill is not deductible for income tax purposes.
On September 9, 2016 technotrans AG obtained 98 percent of the shares and voting rights of GWK Gesellschaft Wärme Kältetechnik mbH, Meinerzhagen. GWK Gesellschaft Wärme Kältetechnik mbH offers products and services for industrial cooling and temperature control, including temperature controllers for various application areas in the plastics injection moulding sector. The products complement the existing product portfolio of the technotrans Group. The acquisition is another milestone for technotrans’ growth outside the printing industry and for accessing new markets with temperature control solutions.
Of the purchase price for this acquisition of € 22,057 thousand, € 21,312 thousand was paid in cash. There is a current liability of € 248 thousand to the seller. In addition, an entitlement by the remaining minority interest to distribution of a profit share in the amount of € 497 thousand was taken on. The entitlement was recognised as a liability upon first-time consolidation. The distributions are to be made in two equal amounts in the 2017 and 2018 financial years.
Transaction costs amounting to € 706 thousand arose in connection with this acquisition. The transaction costs were booked as an expense against operating profit, under administrative expenses.
The acquired company contributed € 18,014 thousand towards consolidated revenue. Its contribution to the net profit for the period was € 867 thousand. The company was included in consolidation from the time of its acquisition. If the acquisition had taken place on January 1, 2016 the acquisition would have had an effect of € 49,138 thousand on consolidated revenue and of € 624 thousand on consolidated net profit.
The acquired assets and liabilities were recognised at fair value in the course of purchase price allocation according to IFRS 3. The fair values of the identified assets and liabilities of GWK Gesellschaft Wärme Kältetechnik mbH at the time of acquisition are as follows:
|Property, plant and equipment||3,598|
|Deferred tax assets||865|
|Receivables and other assets||4,581|
|Cash and cash equivalents||318|
|Deferred tax liabilities||2,104|
|Identifiable assets and liabilities||5,017|
|Non-controlling interests based on the share of assets and liabilities||-100|
|Cost of acquisition||22,057|
|of which paid||21,312|
|of which liability||248|
|of which debt assumption||497|
|Cash and cash equivalents acquired||-318|
|Net cash outflow||20,994|
The gross amount of the acquired trade receivables at the time of acquisition was € 5,207 thousand; the best possible estimate of uncollectable trade receivables was € 473 thousand.
Allocation of the purchase price to the acquired assets and liabilities in accordance with the standard IFRS 3 “Business Combinations” is not yet final because the acquisition has only recently been completed. The purchase price allocation process that has not yet been completed has the purpose of allocating the acquisition costs to the fair values of the assets and liabilities. The fair values of previously unrecognised intangible assets for the acquired activities are also taken into account in this process, for example customer relationships and brands. The provisional goodwill totalling € 17,140 thousand results mainly from the expected synergies and earnings potential from the integration of the company into the group, because these cannot be recognised as separate intangible assets. The goodwill is not deductible for income tax purposes.
With effect from November 11, 2016 technotrans AG acquired the non-controlling interests in each of KLH Kältetechnik GmbH, Bad Doberan, KLH Cooling International Pte. Ltd., Singapore, and technotrans group (taicang) co. ltd., Taicang, PR China (formerly: Taicang KLH Cooling Systems Co. Ltd.) and increased its shareholdings to 100 percent. By way of counter-performance for the acquisition of the interests, technotrans AG granted the seller a fixed payment of € 2,600 thousand. The conditional and still-outstanding purchase price agreed from the initial acquisition was likewise settled with this payment. The conditional purchase price was measured at a fair value of € 166 thousand at the time of acquisition, with the result that the sum of € 180 thousand was released to profit or loss. The income is reported under the financial result for the financial year. The portion of the cost that exceeded the carrying amount of the controlling interests of € 980 thousand at the time of acquisition was offset against retained earnings (€ 1,454 thousand).
|technotrans AG||DE||Sassenberg||parent company|
|gds Sprachenwelt GmbH||DE||Hünfeld||100%||4)|
|technotrans graphics ltd.||GB||Colchester||100%|
|technotrans france s.a.r.l. (Saint-Maximin und Madrid)||FR||Saint-Maximin||100%|
|technotrans italia s.r.l.||IT||Legnano||100%|
|technotrans scandinavia AB||SE||Åkersberga||100%|
|technotrans america inc.||USA||Mt. Prospect||100%|
|technotrans américa latina ltda.||BR||Sao Paulo||100%|
|technotrans Asia Pacific limited, (Hongkong und Tokio)||CN||Hong Kong||100%|
|technotrans printing equipment (Beijing) co. Ltd.||CN||Beijing||100%||3)|
|technotrans technologies pte. ltd., (Singapur und Melbourne)||SG||Singapore||100%|
|technotrans middle east FZ-LLC||UAE||Dubai||100%|
|technotrans india pvt ltd||IN||Chennai||100%||3)|
|KLH Kältetechnik GmbH||DE||Bad Doberan||100%|
|KLH Cooling International Pte. Ltd.||SG||Singapore||100%|
|technotrans group (taicang) co. ltd.||CN||Taicang||100%|
|SHT Immobilienbesitz GmbH & Co. Vermietungs KG||DE||Mainz||94%||1)|
|GWK Gesellschaft Wärme Kältetechnik mbH||DE||Meinerzhagen||98%|
|GWK Heating and Cooling Technology (Shanghai) Co. Ltd.||CN||Shanghai||100%||6)|
|GWK Technique Chaud et froid s.a.r.l.||FR||St Chef||100%||6)|
|gwk Heating & Cooling Technology (Nanchang) Co. Ltd||CN||Nanchang||100%||6)|
|1) Limited partnership interest held by KLH Kältetechnik GmbH.
2) The domestic subsidiary has met the necessary conditions for taking advantage of the exemption provisions pursuant to Section 264 (3) of German
Commercial Code and uses the option not to prepare a management report and disclose its annual financial statements.
3) Indirect interest held through technotrans Asia Pacific limited
4) Indirect interest held through gds GmbH
5) Indirect interest held through Ovidius GmbH
6) Indirect interest held through GWK Gesellschaft Wärme Kältetechnik mbH; company is currently in liquidation and was not included in consolidation
for reasons of minor significance.
The Consolidated Financial Statements are based on the group companies’ annual financial statements and interim financial statements (Commercial Balance Sheet II based on IFRS) prepared in accordance with standard recognition and measurement principles at December 31, 2016.
Capital consolidation for the subsidiaries is performed according to the purchase method pursuant to IFRS 3. The costs of acquisition of the business combination in each case correspond to the cash components paid and the liabilities arising and acquired at the time of acquisition. These costs of acquisition are distributed between the identifiable assets, liabilities and contingent liabilities of the acquiree by their recognition at the respective fair values at the time of acquisition. The positive differences remaining after purchase price allocation are recognised as goodwill. The non-controlling interests were measured at acquisition cost (partial goodwill method). Changes in the group’s interest in a subsidiary that do not lead to a loss of control are reported as equity transactions. Goodwill is recognised as an asset and subjected to an impairment test annually. The costs associated with the business combination are recognised as an expense when they arise.
All intra-group receivables and liabilities, revenues, expenses and income as well as balances from intra-group supplies are eliminated on consolidation. Where necessary, deferred taxes are recognised for consolidation processes affecting income.
With the exception of certain financial instruments that are reported at fair value, the Consolidated Financial Statements are prepared based on historical cost.
The preparation of the Consolidated Financial Statements in accordance with IFRS requires the Board of Management to make estimates and assumptions which exercise influence on the amounts reported and the disclosures made on them in the Notes. Key exercises of judgment outside the context of estimates concern the definition of the cash-generating units, the consolidation of companies in which no majority of voting rights is held, and the measurement method for the non-controlling interests.
All estimates and assumptions are made to the best of our knowledge, in the interests of providing a true and fair view of the net worth, financial position and financial performance of the group. Such estimates and assumption-based policies involve uncertainty and may change in the course of time. The actual results may deviate from these assessments. Responsibility for regularly monitoring all key fair value measurements, including the Level 3 fair values, rests with Group Controlling. Changes are reported to the Finance Director. Regular reviews of the key non-observable input factors and of fair value adjustments are carried out.
The assessments and underlying assumptions are examined on a regular basis. If a reassessment results in a difference, that difference is reported in the accounting period in which the reassessment was made if it relates to that period only. It is recorded in the accounting period in which the reassessment was made, as well as in subsequent periods if it also influences the subsequent periods.
Assessments made by the Board of Management that are subject to a significant degree of uncertainty and bring with them the risk of significant adjustments in future financial years concern the following matters in particular:
Goodwill is reported in the Consolidated Balance Sheet as a result of acquisitions. Upon the initial consolidation of an acquisition, all identifiable assets, liabilities and potential liabilities are stated at their fair value at the date of acquisition. Assets such as land, buildings, and plant and equipment are normally measured on the basis of independent appraisals, while the fair value of an intangible asset is determined internally according to its nature and the complexity of its measurement, applying an appropriate measurement technique. The assumptions made here are regularly subject to forecasting uncertainty. In the 2016 financial year, Ovidius GmbH including its subsidiary as well as GWK Gesellschaft Wärme Kältetechnik mbH were acquired. The balances remaining after purchase price allocation were reported as goodwill. Goodwill in addition exists from corporate acquisitions in previous years. Goodwill is tested for impairment once a year or whenever any basis for impairment is identified. If allocation of the goodwill has not yet been completed (IAS 36.84), the disclosures are made according to IAS 36.133. With regard to “key exercises of judgment in the context of financial reporting for 2016”, see Note 2 “Goodwill” and Note 3 “Intangible Assets”.
At each balance sheet date the Board of Management is to assess whether there is any indication that the carrying amount of an item of property, plant and equipment or an intangible asset might be impaired. In that case, the recoverable amount of the asset in question is estimated. The recoverable amount corresponds to the higher of the fair value less the costs of disposal, or the value in use. In order to determine the value in use, the discounted future cash flows of the asset in question need to be determined. This estimate involves key assumptions about the underlying economic situation and future cash flows. Changes to these assumptions or circumstances could result in additional reductions for impairment in the future, or in reversals. With regard to “key exercises of judgment in the context of financial reporting for 2016”, see Note 1 “Property, Plant and Equipment”.
For the recognition and measurement of other provisions, the level and likelihood of the call are estimated. The level of the actual call may differ from the estimates. The assumptions and estimates are in each case based on current knowledge and the available data. With regard to “key exercises of judgment in the context of financial reporting for 2016”, see Note 15 “Provisions”.
Because the group has operations and generates income in many different countries, it is subject to widely varying tax laws in a large number of tax regimes. Although the management believes it has made a reasonable estimate of fiscal imponderables, there can be no assurance that the outcome of such fiscal imponderables will correspond to the original estimate. Any differences could have an impact on the tax liabilities and the deferred taxes. At every balance sheet date, the Board of Management assesses whether the realisability of future tax benefits is sufficiently probable for the reporting of deferred tax assets. This requires the management among other things to assess the tax benefits that arise from the available tax planning strategies and future taxable income. The deferred tax assets reported could decrease if the estimates of planned taxable income are reduced or if changes to current tax laws restrict the realisability of future tax benefits.
The application of a specific IFRS is indicated in the notes to the individual items of the financial statements. The following methods of recognition and measurement were fundamentally applied:
Property, plant and equipment are reported at historical cost less depreciation and accumulated impairment losses. Retrospective costs of acquisition are capitalised where they increase the value of the property, plant and equipment. In the case of self-constructed assets, the cost of conversion is calculated on the basis of prime costs as well as the systematically allocable fixed and variable production overheads, including depreciation. Regular maintenance and repair costs are recorded as an expense after they have occurred.
Apart from land, items of property, plant and equipment are depreciated according to the straight-line method, on the basis of their useful life. The useful life and method of depreciation are reassessed annually. Components of property, plant and equipment with a significant purchase value in relation to the total value are depreciated separately as appropriate. Upon sale or retirement, the costs and the corresponding accumulated depreciation for the assets are derecognised from the Balance Sheet; any gains or losses arising are recognised in the Income Statement.
|Buildings||25 to 50 years|
|Land improvements, fixtures and fittings||10 to 15 years|
|Tools, plant and equipment||3 to 10 years|
|Hardware, vehicle fleet||3 to 6 years|
Where there is a basis for impairment, property, plant and equipment are examined for impairment pursuant to IAS 36. Insofar as necessary, the carrying amount for property, plant and equipment is adjusted to the recoverable amount. If the circumstances which led to this measure subsequently cease to apply, this impairment is reversed at most by the net carrying amount that would have applied if no such reductions for impairment had been made.
The reported goodwill constitutes the difference between the purchase price and the fair value of the net assets acquired through business combinations. Pursuant to IAS 36, goodwill is to be tested for impairment once a year or if any basis for a reduction for impairment is established. For the impairment test, from the acquisition date any goodwill acquired through a business combination is allocated to the group’s cash-generating units which benefit from the synergy effects from the business combination. Insofar as necessary, the carrying amount is reduced to the "recoverable amount". Pursuant to IAS 36.124, such impairment is not reversed where the circumstances which led to it subsequently cease to apply.
Intangible assets, namely concessions, industrial and similar values acquired for consideration, and the customer base are carried at cost. They are amortised by the straight-line method, according to their useful life. The residual value, useful life and method of depreciation are reassessed annually.
Self-constructed intangible assets are recognised at cost. Development expenditure on the fundamental reengineering of a product is capitalised if the product is technically and economically realisable, the development is saleable, the expenditure can reliably be measured and the group possesses adequate resources to complete the development project. Pursuant to IAS 38.65 ff, it comprises the directly allocable prime costs as well as the production overheads that can be allocated directly to the creation, manufacture and preparation of the asset, where they arise between the start of the development phase and its conclusion. The conditions for capitalisation as laid down in IAS 38.21, 38.22 and 38.57 are met. Amortisation of development expenditure recognised as an intangible asset commences as soon as the asset is available for use. This usually coincides with the start of its commercial use.
All self-constructed intangible assets acquired for consideration have a finite useful life. The notes on property, plant and equipment apply analogously to any necessary impairment of intangible assets to the “recoverable amount”.
The taxes for the period comprise current and deferred taxes. Taxes are recognised in the Income Statement unless they refer to items that are recognised directly in profit or loss or in other comprehensive income. In such cases, the corresponding taxes are likewise recognised in profit or loss or in other comprehensive income. In accordance with IAS 12, deferred taxes are accounted for using the balance sheet liability method in respect of temporary differences between the carrying amounts in the Commercial Balance Sheet and the Tax Balance Sheet (liability method) and in respect of tax loss carryforwards for creditable tax. Deferred tax assets for temporary differences as well as tax loss carryforwards are only reported to the extent that it is probable that sufficient taxable income will be available in the future to make use of these. The deferred taxes are measured using the locally applicable tax rates that apply or have been announced at the balance sheet date.
Deferred tax assets and liabilities are also recognised on temporary differences arising from business combinations, except for temporary differences on goodwill where the latter are fiscally disregarded. Deferred tax assets and liabilities are offset if a right to perform offsetting exists and the items relate to income taxes levied by the same taxation authorities and for the same company.
The inventories recognised are always measured at cost of acquisition or cost of conversion, using the weighted average cost method, or at the net realisable value if lower. In accordance with IAS 2, cost of conversion includes the direct costs of material and direct costs of labour, as well as allocable fixed and variable production overheads arising in the manufacturing process, by way of target costing.
The net realisable value is the anticipated sales proceeds less the estimated costs of completion and the costs necessary to make the sale. If the reasons which have led to downward valuation cease to apply, a reversal is made.
Trade receivables and other current receivables are fundamentally reported at amortised cost, using the effective interest rate method. Reductions for impairment that are applied in the form of individual and group portfolio-based valuation allowances take adequate account of the credit risk. Objective failures result in the derecognition of the receivable in question. Non-current, non-interest-bearing receivables are discounted.
Cash and cash equivalents are reported at face value and converted into euros at the closing rates. They comprise cash on hand and demand deposits, as well as financial assets that can be converted into cash at any time.
Issued capital (no par value shares) is reported at the nominal amount.
If the company acquires treasury shares, these are offset against equity. The purchase and sale, issuance and retirement of treasury shares are not recognised within income, but as an addition to or disposal from equity. Differences between the cost of the issued shares and their fair value upon their sale or issuance are offset against retained earnings or capital reserves.
Liabilities are fundamentally recognised at amortised cost. Liabilities in foreign currency are translated in accordance with IAS 21.21 and 23 (a). With the exception of the conditional purchase price payments from corporate transactions, financial liabilities are not measured at fair value through profit or loss. When initially recognised, they are measured at fair value including the transaction costs and subsequently at amortised cost, using the effective interest method. Conditional purchase price payments are measured at fair value. Changes in the fair value are recognised through profit or loss.
Provisions are created to cover obligations to third parties if obligations existing at the reporting date are likely to result in a future outflow of resources and the latter amount can reliably be estimated. They are measured at the likely amount at which settlement will take place. Long-term provisions are discounted.
Provisions for warranties are created at the time of sale of the goods in question. Their level is based on past developments in warranties and on a consideration of all possible future warranty claims, weighted according to probability.
Provisions for litigation settlements are created in the amount of the expected call, alongside the costs of the proceedings.
Provisions for pensions and provisions for similar obligations are measured according to the projected unit credit method. Gains and losses resulting from changes in expectations regarding life expectancy, pension and pay increases expected in the future and the discount rate compared with the actual development during the period are recognised income-neutrally directly in other comprehensive income on the Statement of Comprehensive Income.
Derivative financial instruments are recognised at market value. At technotrans, derivative financial instruments were used exclusively for hedging interest rate risks at December 31, 2016. Where they qualify as cash flow hedges, the correspondingly effective adjustments to the market price are recognised within equity, with no effect on income. Financial instruments are reported if technotrans is a party to the contractual provisions of the financial instrument. Financial assets are reported at the settlement date except in the case of derivative financial instruments, which are reported at the trade date.
Revenues from the sale of goods are recognised in accordance with IAS 18.14 as soon as the significant risks and rewards associated with ownership of the products sold have been transferred to the buyer. Revenues from services are recognised as soon as the service has been performed. Revenue is reported less reductions in proceeds such as bonuses, rebates and trade discounts.
Financial income and charges are reported on an accrual basis in line with the effective interest method. Borrowing costs that are directly attributable to the acquisition, construction or manufacture of a qualifying asset are capitalised as part of the cost of that asset pursuant to IAS 23. No financing costs were capitalised in the 2016 financial year.
Currency translation: The financial statements of all foreign group companies prepared in foreign currency are translated according to the concept of the functional currency (IAS 21). The local currency of the country in which they are based is fundamentally recognised as the functional currency of the companies included in the Consolidated Financial Statements. In a departure from this principle, the euro is considered to be the functional currency of the subsidiary technotrans technologies pte ltd., Singapore, as its primary economic environment (revenues and expenses) is determined predominantly by the euro. The US dollar is moreover considered to be the functional currency of KLH Cooling International Pte. Ltd., Singapore, because its invoices are determined predominantly by the US dollar.
Business transactions conducted by a group company in a currency other than its functional currency are translated into and reported in the functional currency for the first time at the spot exchange rate on date of the business transaction. At each subsequent balance sheet date, monetary items (cash, receivables and liabilities) that were originally in a currency other than the functional currency are translated at the closing rate; the resulting exchange rate differences are recognised in the Income Statement. Non-monetary items are translated at the historical rate.
The assets and liabilities of foreign subsidiaries are translated at the mean rate at the balance sheet date (closing rate), and included in the Consolidated Financial Statements. Expenses and income are translated at the current rate, approximating to the mean rate for the year; the resulting differences are netted against equity, with no effect on income. Exchange differences compared with prior-year translation are likewise netted within equity, with no effect on income.
Exchange rate differences from the net investment in a foreign business (group company) are reported within equity with no effect on income; they are only recognised in the Income Statement upon disposal of the net investment.
The following rates were applied in currency translation:
|Mean rates for the
at balance sheet date
The Consolidated Financial Statements of technotrans AG at December 31, 2016 include all standards and interpretations adopted by the European Union, the application of which is mandatory from January 1, 2016.
The following standards were to be applied for the first time:
|Standard/interpretation||Applicable from (financial years starting on or after …)||Content||Effects on the Consolidated |
|Amendments to IAS 19: Defined Benefit Plans: Employee Contributions||February 1, 2015||The amendments clarify accounting for the contributions of employees or third parties under defined benefit plans by the reporting enterprise.||No significant|
|Improvements to IFRS (2010 to 2012)||February 1, 2015||In the context of the annual improvement project, amendments were made to seven standards (IFRS 2, IFRS 3, IFRS 8, IFRS 13, IAS 16, IAS 24, IAS 38).||No significant|
|Amendment to IFRS 11: Accounting for Acquisitions of Interests in Joint Operations||January 1, 2016||The amendment regulates the accounting for an acquisition of interests in a joint operation that constitutes a business within the meaning of IFRS 3.||None|
|Amendment to IAS 1: Notes||January 1, 2016||The amendments in IAS 1 concern various reporting issues for the Notes.||With the introduction of this amendment to the |
standard, technotrans has dispensed with notes
that are of no material importance.
|Amendment to IAS 16 and IAS 38: Clarification of Acceptable Methods of Depreciation and Amortisation||January 1, 2016||The amendments contain guidelines on how to determine an acceptable method of depreciation and amortisation||No significant|
|Amendment to IAS 16 and IAS 41: Agriculture: Bearer Plants||January 1, 2016||The amendments regulate the future accounting for bearer plants||None|
|Amendment to IAS 27: Equity Method in Separate Financial Statements||January 1, 2016||With the amendment, the equity method is permitted as an accounting option for shares in subsidiaries, joint ventures and associates in separate financial statements of an investor.||None|
|Amendment to IFRS 10, IFRS 12 and IAS 28: Investment Entities: Applying the Consolidation Exception||January 1, 2016||The amendment serves to clarify various aspects relating to the applying the consolidation exception according to IFRS 10 if the parent company satisfies the definition of an “investment entity”. In that case, parents are also released from the obligation to prepare consolidated financial statements if the higher-level parent does not consolidate its subsidiaries and instead reports them at fair value according to IFRS 10.||None|
|Improvements to IFRS (2012 to 2014)||January 1, 2016||In the context of the annual improvement project, amendments were made to four standards (IFRS 5, IFRS 7, IAS 19, IAS 34).||No significant|
During the 2016 financial year the International Accounting Standards Board (IASB) and the International Financial Reporting Interpretations Committee (IFRIC) published further standards and interpretations as well as amendments to existing standards, the application of which was not yet mandatory in the 2016 financial year. The technotrans Group does not plan the early adoption of the following new or amended standards and interpretations, the adoption of which is only mandatory in later financial years.
|Standard/interpretation||Applicable from (financial years starting on or after …)||Content||Anticipated effects on the Consolidated Financial Statements|
|IFRS 9: Financial Instruments||January 1, 2018||IFRS 9 replaces the existing guidelines in IAS 39 Financial Instruments: Recognition and Measurement||Currently under examination|
|IFRS 15: Revenue from Contracts with Customers||January 1, 2018||IFRS 15 Revenue from Contracts with Customers
specifies a comprehensive framework for determining whether, in what amount and at what time revenue is reported. It replaces existing guidelines on the reporting of revenue, including IAS 18 Revenue, IAS 11 Construction Contracts and IFRIC 13 Customer Loyalty Programmes.
|See the comments below this table.|
The effects of the new rules of IFRS 15: when goods are sold, revenue is currently recognised upon delivery and supply of the goods, and therefore at the point at which the customer accepts the goods as well as the accompanying risks and rewards incidental to the passage of ownership. We do not expect any changes compared with the previous practice under IAS 18 for proceeds from sales. Services are provided e.g. on the basis of a single agreement in various reporting periods. According to IFRS 15 the entire fee for the service contracts is spread over all services, based on their standalone selling prices. The standalone selling prices are determined on the basis of the list prices at which the group offers the services in separate transactions. We do not expect any material differences with regard to the point at which revenues for these services are recorded. The group is currently conducting a detailed assessment of the effects of the application of IFRS 15. In a second step, the implementation of possible adjustments will be analysed and effected.
In addition, the IASB published standards and interpretations that have not yet been adopted by the European Union. Of these, the following standards are of relevance for the group. The effects on the Consolidated Financial Statements are currently being examined.
|Standard/interpretation||Applicable from (financial years starting on or after …)||Content||Anticipated effects on the Consolidated Financial Statements|
|IFRS 16: Leases||January 1, 2019||IFRS 16 introduces a standard accounting model according to which lessees are required to account for leases. A lessee records a right-of-use asset that presents their right to the use of the underlying asset, as well as a liability from the lease that represents their obligation to make lease payments. There are exceptions for short-term leases and leases for low-value assets. Accounting by the lessor is comparable to the current standard – in other words, lessors continue to classify leases as finance or operating leases. IFRS 16 replaces the existing guidelines on leases, including IAS 17 Leases, IFRIC 4 Determining Whether an Arrangement Contains a Lease, SIC-15 Operating Leases – Incentives and SIC-27 Evaluating the Substance of Transactions in the Legal Form of a Lease.||See the comments below this table.|
|Amendment to IFRS 2: Classification and Measurement of Share-based Payment Transactions||January 1, 2018||The amendments relate to the accounting for cash-settled share-based payment transactions that include a performance condition, the classification of share-based payment transactions with net settlement features for tax to be withheld, and the accounting for modifications of share-based payment transactions from cash-settled to equity-settled.||None|
|Amendment to IFRS 4: Applying IFRS 9 ‘Financial Instruments’ with IFRS 4 ‘Insurance Contracts’||January 1, 2018||The changes concern the first-time adoption of IFRS 9 for insurers. Because of the different effective dates of IFRS and the new standard for insurance contracts, without these changes there would be increased volatility in results and double the conversion work for a transitional period.||None|
|Amendment to IFRS 10 and IAS 28: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture||Postponed indefinitely||The amendments address a known inconsistency between the rules of IFRS 10 and IAS 28 (2011) in the event of the disposal of assets to an associate or joint venture or the contribution of assets to an associate or joint venture.||None|
|Amendment to IFRS 15: Clarifications to IFRS 15||January 1, 2018||The amendments contain clarifications to various rules of IFRS 15 and also simplifications for the transition to the new standard.||Currently being examined (see IFRS 15)|
|Amendment to IAS 7: Disclosure initiative||January 1, 2017||The amendments are intended to improve information about changes in an entity’s debt. Following the amendment an entity will need to make disclosures on the changes in liabilities arising from financing activities where cash receipts and payments are shown under cash flow from financing activities in the cash flow statement. Accompanying financial assets are likewise to be included in the disclosures (e.g. assets from hedging transactions).||No significant|
|Amendment to IAS 12: Recognition of Deferred Tax Assets for Unrealised Losses||January 1, 2017||The amendments highlight accounting for deferred tax assets for unrealised losses on debt instruments measured at fair value.||No significant|
|Amendment to IAS 40: Transfers of Investment Property||January 1, 2018||The amendment of IAS 40 has the purpose of clarification. In which cases classification of a property as investment property starts or ends if the property is still under construction or development. The non-exhaustive list provided in IAS 40.57 meant the classification of non-completed properties was previously unclear. The list is now treated as explicitly non-exhaustive, so that properties not yet completed may likewise be subsumed under the rule.||None|
|IFRIC 22: Foreign Currency Transactions and Advance Consideration||January 1, 2018||IFRIC 22 addresses a question regarding IAS 21 The Effects of Changes in Foreign Exchange Rates. It clarifies at what point the exchange rate is determined for the translation of foreign currency translation which include the payment or receipt of advance consideration. The exchange rate for the underlying asset, income or expense is accordingly the date of recognition of the asset or liability resulting from advance consideration.||No significant|
|Improvements to IFRS (2014 to 2016)||January 1, 2017||Amendments to IFRS 12 were made under the “annual improvement project”.||No significant|
|Improvements to IFRS (2014 to 2016)||January 1, 2018||In the context of the annual improvement project, amendments were made to two standards (IFRS 1 and IAS 28).||No significant|
The effects of the new rules of IFRS 16: the standard has material effects on the presentation of the net worth, financial position and financial performance. Whereas payment obligations for operating leases were previously disclosed in the Notes, in future the resulting rights and obligations are to be recognised as right-of-use assets and lease liabilities. technotrans AG expects a significant increase in the balance sheet total at the time of first adoption in view of the rise in lease liabilities, as well as a similarly steep rise in fixed assets from the right-of-use assets to be capitalised. The increase in the lease liabilities results in a corresponding rise in net borrowings. In the Income Statement, depreciation and amortisation as well as the interest expense are recognised in future instead of the lease expense. This will lead to a substantial improvement in EBITDA and to a similar rise in the operating cash flow in the Cash Flow Statement. The overall effects will be investigated in a group-wide project on the implementation of IFRS 16, but no reliable estimate of the quantitative effects will be possible until that project has been completed.