Revenue is recognised if the risks and rewards associated with ownership of the products sold have been transferred to the buyer. For deliveries, revenue is therefore realised in accordance with the agreed terms of delivery; for services, it is realised when the service has been performed.

Revenue is shown broken down by division in the segment report. € 130,408 thousand (2015: € 104,841 thousand) is the result of the sale of goods including sales of parts, and € 21,384 thousand (2015: € 17,997 thousand) from the provision of services. The geographical composition of revenue in 2016 was Germany € 80,006 thousand (2015: € 61,413 thousand), rest of Europe € 35,660 thousand (2015: € 28,475 thousand), America € 20,884 thousand (2015: € 18,220 thousand), Asia € 14,979 thousand (2015: € 14,730 thousand) and Africa € 262 thousand (2015: € 0 thousand).

The cost of sales comprises the cost of traded products and the cost price of merchandise sold. In accordance with IAS 2, it includes both costs which can be directly allocated, such as cost of materials and cost of labour, and also overheads, including pro rata depreciation and amortisation on property, plant and equipment used for production and on intangible assets. The amount for inventories reported as an expense in the period under review broadly corresponds to the costs of materials (raw materials, consumables and changes in inventories of finished goods and work in progress). The costs of the field service and the expense arising in connection with warranty obligations are likewise reported under cost of sales. Other cost of sales is mainly comprised of other building costs.

The distribution costs include costs for the Distribution Department and for in-house services, and also the costs of advertising and logistics. This item also includes sales-related expenditure for commissions and impairment of receivables.

The administrative expenses comprise personnel and material costs for management and administration, insofar as not charged to other cost centres as internal services.

In the 2016 financial year, the fees for the auditors recorded as an expense pursuant to Section 319 (1) first and second sentences of German Commercial Code amounted to € 326 thousand (2015: € 266 thousand). The figures for the 2016 financial year include the fees and expenses of the auditors of the Consolidated Financial Statements, KPMG AG Wirtschaftsprüfungsgesellschaft, for the auditing of the Consolidated Financial Statements, the auditing of the annual financial statements of technotrans AG, KLH Kältetechnik GmbH and GWK Gesellschaft Wärme Kältetechnik mbH, as well as for tax consultancy provided to technotrans AG, its controlled companies and gds Sprachenwelt GmbH.

No research costs were incurred. Development costs are charged as ongoing expenses until the criteria of IAS 38.57 are satisfied cumulatively. From that point on, development costs are recognised as an intangible asset (see Note 3 “Intangible Assets”).

The income unrelated to the accounting period comprises for example cash receipts from previously impaired receivables, and the other operating income includes development cost contributions from customers. Exchange rate gains mainly constitute unrealised changes in the measurement of intragroup assets and liabilities.

The interest income in the amount of € 25 thousand (2015: € 39 thousand) is from interest on bank credit balances. The figure additionally includes € 180 thousand (2015: € 180 thousand) from the termination of the conditional purchase price for the KLH companies. Interest income from the compounding of the corporation tax credit balances amounted to € 5 thousand in the 2016 financial year (2015: € 6 thousand).

The interest expenses comprise mainly interest charged on the group’s financial liabilities.

This item additionally includes interest expenses from compounding as well as from changes to the discount rate in the amount of € 327 thousand.

No borrowing costs were capitalised in the reporting period.

Income tax expense includes corporation income tax and trade earnings tax for the domestic companies, and also comparable taxes on income for the foreign businesses. Other operating taxes are included in other operating expenses.

The deferred tax is attributable to temporally divergent valuations in the companies’ tax balance sheets and the Consolidated Balance Sheet in accordance with the balance sheet liability method.

The reported deferred tax assets also include tax relief claims where it is anticipated that existing tax loss carryforwards will be used in subsequent years. The deferred tax is calculated on the basis of the tax rates applicable or expected at the time of realisation in the individual countries concerned.

The applicable tax rate in Germany of 30.26 percent (2015: 30.17 percent) calculated for the year under review is based on a corporation tax rate of 15.00 percent, a solidarity surcharge of 5.50 percent and an effective trade earnings tax rate of 14.44 percent (2015: 14.34 percent).

The following capitalised deferred tax assets and liabilities relate to recognition and measurement differences for the individual items on the Balance Sheet and to loss carryforwards which can be used in future:

The € 2,337 thousand increase in deferred tax liabilities from non-current assets results from the assets capitalised in the context of the business combinations in the 2016 financial year (cf. Note II a) “Consolidated Companies”).

There are tax loss carryforwards amounting to € 17,394 thousand (2015: € 16,798 thousand) for 2016. Deferred taxes amounting to € 1,845 thousand (2015: € 715 thousand) were recognised as an asset on an amount of € 5,466 thousand (2015: € 2,045 thousand) in agreement with IAS 12.34. Of this, loss carryforwards amounting to € 2,183 thousand are attributable to the companies acquired in the 2016 financial year, for which deferred tax assets were recognised in full. No deferred tax assets were recognised on the remaining loss carryforwards of € 11,928 thousand (2015: € 14,753 thousand) and on deductible temporary differences of € 1,580 thousand (2014: € 1,536 thousand). The loss carryforwards may be carried forward for 20 years in the USA (€ 7,788 thousand; 2015: € 9,838 thousand), for nine years in Japan (€ 109 thousand; 2015: € 183 thousand) and for an unlimited period in other cases. In view of the uncertain earnings expectations of the companies in Asia, of technotrans america inc., technotrans américa latina ltda. and technotrans scandinavia AB, no or only pro rata deferred taxes were created on the loss carryforwards.

The following table reconciles the expected tax expense with the actual income tax expense.

In the year under review there were only deferred taxes recognised in other comprehensive income from the change in cash flow hedges in the amount of € -18 thousand (2015: € -15 thousand) and from the change in the pension obligation in the amount of € 10 thousand (2015: € 0 thousand). As in the previous year, exchange rate differences from net investments in a foreign business did not lead to any deferred tax in the 2016 financial year.

The figure for basic earnings per share is obtained by dividing the share of earnings attributable to the shareholders of technotrans AG by the weighted average number of ordinary shares outstanding in the financial year:

In the 2016 financial year there were once again no stock options that would have had a dilutive effect on earnings per share pursuant to IAS 33.