The additions within technical equipment and machinery as well as other assets, plant and other equipment mainly comprise replacement purchases.

As in previous years, no self-constructed assets were capitalised in the 2015 financial year. No write-downs or reversals were performed in the year under review. Property amounting to € 10,979 thousand (2014: € 12,284 thousand) belonging to the group is used as collateral for long-term loans (cf. Note 11 “Financial liabilities”).

The following table shows the residual carrying values of technotrans goodwill, broken down by segment:

The goodwill resulting from the acquisition of the shares of the KLH companies with effect from January 1, 2013 as well as the acquisition of the shares of the Termotek Group with effect from January 7, 2011 was tested for impairment at the level of the Laser Cooling group cash-generating units within the Technology segment, because synergies and advantages from the business combinations can only be determined at that level. Equally, the goodwill is monitored exclusively on the basis of this cash-generating unit.

Goodwill of € 585 thousand was recognised as an asset in connection with the acquisition of gds Sprachenwelt GmbH on September 1, 2012. This goodwill is allocated to the Translation Services cash-generating unit in the Services segment.

The cash-generating units were tested for impairment according to IAS 36.10 in the 2015 financial year. For this, the carrying amount of a cash-generating unit is compared with the recoverable amount. The recoverable amount is the higher of the two amounts of the fair value less proceeds of disposal, and the value in use. The fair value measurement was classified as a Level 3 fair value based on the input factors of the measurement technique used.

At technotrans, the recoverable amount corresponds to the value in use. The key assumptions made for this value in use were as follows: the starting point for the cash flow forecasts for goodwill was the budget for 2016 and revenue trends for the 2017 to 2020 financial years of the respective cash-generating units. Average revenue growth of 6.4 percent (2014: 6.5 percent) and an average EBIT margin of 11.0 percent (2014: 8.0 percent) were assumed for the Laser Cooling cash-generating unit for the years 2017 to 2020, and a trend averaging 5.0 percent (2014: 5.0 percent) (revenue) and 11.9 percent (2014: 14.1 percent) (EBIT margin) for the Translation Services cash-generating unit. No separate revenue plans for the cash-generating units in question were drawn up for subsequent financial years; instead, further average revenue growth rates of a constant 1.5  percent (2014: 1.5 percent) (long-term market trend for the laser industry and for translation services) were assumed for both cash-generating units. Furthermore, the costs (materials, personnel and other costs) for each cash-generating unit were estimated on the basis of assumptions for the forecasting period; cost increases were suitably taken into account. All assumptions by the Board of Management are based on experience and reflect expectations concerning the relevant customers and industry.

Discounting of the anticipated cash flows is based on weighted pre-tax cost-of-capital rates of 12.97 percent (2014: 12.38 percent) for the Laser Cooling cash generating unit and 11.54 percent (2014: 11.42 percent) for the Translation Services cash generating unit.

The values in use determined on the basis of these assumptions each exceed the carrying amounts of the cash-generating units.

The carrying amounts of intangible assets fell further compared with the previous year. The decrease is mainly attributable to depreciation and amortisation of € 720 thousand (2014: € 720 thousand) on the customer base with a cost of € 3,600 thousand identified within the context of purchase price allocation in the 2013 financial year.

Intangible assets arising from development activities are capitalised pursuant to IAS 38 if it is probable that future economic advantage will accrue from the use of the asset and the costs of the asset can be reliably determined. technotrans AG and Termotek GmbH capitalised intangible assets which are the result of development activities amounting to € 185 thousand in the financial year (2014: € 173 thousand).

As in previous years, the items capitalised were predominantly development projects for products outside the printing industry. In the 2015 financial year a number of development projects such as the group-wide control platform developed over the past few years as well as special cooling technologies for baggage scanners were brought to a successful conclusion. These are now being depreciated over their useful lives.

Due to nonfulfilment of the requirements for recognition as stated in IAS 38.57, development costs amounting to € 4,293 thousand (2014: € 3,382 thousand) were recognised as an expense.

There are no concessions, industrial and similar rights or development expenditure recognised as an intangible asset with an unlimited useful life. The useful life taken as the basis for the amortisation of software and development expenditure recognised as an intangible asset is three to five years.

In the Income Statement, the amortisation of development expenditure recognised as an intangible asset is allocated to the cost of sales using the function of expense method, according to the principle of causation. The amortisation of concessions, industrial and similar rights has been allocated to the cost of sales, distribution costs, administrative expenses and development costs by means of cost centre accounting.

Of total inventories, the amount of € 3,880 thousand (2014: € 3,175 thousand) is reported at the fair value, less production costs still to be incurred and distribution costs. Impairment of inventories totalling € 436 thousand (2014: € 951 thousand) was recognised as an expense in the 2015 financial year. Reversals of € 632 thousand (2014: € 604 thousand) in the same period led to an income, as higher net realisable values could be assumed than in the previous year.

In the Technology segment, receivables outstanding are owed mainly by major printing press and laser manufacturers, as well as by end customers.

In the year under review, additions to the impairment of receivables totalling € 286 thousand (2014: € 187 thousand) were booked to distribution costs in the Income Statement. Impairment was applied in order to measure the receivables at fair value. This impairment reflects the actual credit risk. Impairment is applied in particular if the debtor is experiencing considerable financial difficulties. The amounts stated for trade receivables are fundamentally adjusted via a value adjustment account. Receivables are only derecognised once the debtor has opened insolvency proceedings or the receivable has become uncollectable.

The following table provides an overview of impairment of receivables:

This comprises ongoing income tax receivable as well as a corporation tax credit balance from previous years.

At December 31, 2015 technotrans AG had a remaining corporation tax credit balance of € 127 thousand from previous years. This rebate (Section 37 (5) of German Corporation Tax Act) has been capitalised at the present value of € 122 thousand (2014: € 179 thousand). The rebate will be paid in ten equal annual instalments between 2008 and 2017; the income tax receivable has correspondingly been allocated pro rata to current and non-current assets. The interest for determination of the present value is 3.75 percent.

Cash and cash equivalents comprise balances with banks and cash on hand. The fair value of cash and cash equivalents corresponds to the carrying amount. There were no marketable securities at the balance sheet date.

The development in cash and cash equivalents is shown in the Cash Flow Statement.

The development in equity is shown in the Statement of Movements in Equity. The equity of the group totalled € 51,725 thousand at December 31, 2015 (2014: € 47,470 thousand). Of this, € 928 thousand (2014: € 975 thousand) is attributable to non-controlling interests.

Issued Capital

At December 31, 2015 the issued capital (share capital) of technotrans AG comprised 6,907,665 issued no par value registered shares, of which 6,530,588 were outstanding. The shares outstanding are fully paid. Each no par value share represents a nominal amount of € 1 of the share capital. All shares carry identical rights. No special rights or preferences are granted to individual shareholders. The same applies to dividend entitlements.

Authorised Capital

The Annual General Meeting on May 15, 2014 authorised the Board of Management to raise the share capital, with the consent of the Supervisory Board, by the issuance of new shares on one or more occasions by May 14, 2019, against contributions, by up to a total of € 3,450,000. No use was made of this authorisation in 2015.

Conditional Capital

At the Annual General Meeting on May 15, 2014 the Board of Management was, with the consent of the Supervisory Board, authorised to issue bearer and/or registered bonds with a term of a maximum of five years on one or more occasions up until May 14, 2019 of an aggregate nominal amount of up to € 10 million and to grant the bearers of bonds conversion options on up to 690,000 no par value registered treasury shares in accordance with the respective terms of the bonds (convertible bond terms).

The conversion options granted to the bearers of the bonds may cover shares in the company representing an amount of up to € 690,000.00 of the share capital. As well as in euros, the convertible bonds may be issued in the legal currency of an OECD country, limited to the corresponding euro countervalue.

The shareholders have a fundamental right to subscribe to bonds. The bonds may also be accepted by a bank or a consortium of banks with the obligation to offer them to the shareholders for subscription. In addition, however, the Board of Management is, with the consent of the Supervisory Board, authorised to exclude the statutory subscription right of the shareholders to the bonds within the limits laid down individually and specifically by the authorisation.

The Board of Management is authorised, with the consent of the Supervisory Board, to specify the further details of the issuance and features of the convertible bonds and their terms itself, meaning in particular the currency, interest rate, issuing amount, term and denomination of the convertible bonds, the conversion price and period, the exchange ratio and payment of the countervalue in money instead of exchange for treasury shares. This authorisation was not used in the 2015 financial year.

Capital Reserve

The premium from the past share issues from the issuance of shares under conversion options from conditional capital and from the issuance of ordinary shares from authorised capital (capital increase for contribution in kind) was paid into the capital reserve. The costs of the share issues were deducted.

Retained Earnings

The retained earnings also include profit carried forward and additional other reserves. Of these, an amount of € 691 thousand (2014: € 691 thousand) relates to the legal reserve of technotrans AG pursuant to Section 150 (2) of German Stock Corporation Act and € 377 thousand (2014: € 391 thousand) to the reserve for treasury shares of technotrans AG.

The difference of € 43 thousand (2014: € 118 thousand) between the cost of the shares and their fair value at the time of issuance (€ 247 thousand; 2014: € 213 thousand), resulting from the issuance of treasury shares, was reported in the retained earnings.

Pursuant to Section 268 (8) of German Commercial Code, an amount totalling € 106 thousand (2014: € 530 thousand) of the other retained earnings of the parent company may not be distributed due to the capitalisation of deferred taxes.

Other Reserves

Pursuant to IAS 39, the negative market value of the interest rate swaps used was recognised in the hedging reserve with no income effect, following deduction of deferred taxes (cf. Note 32 “Financial instruments”). In the 2015 financial year, a gain of € 49 thousand (2014: loss of € 76 thousand) was reported within equity with no effect on income. As in the previous year, no gains were realised. In return, deferred tax of € 15 thousand (2014: € 23 thousand) was booked with no effect on income.

technotrans AG has extended loans to its subsidiaries that are to be regarded as net investments in foreign businesses. Pursuant to IAS 21.32 and IAS 12.61A, the accumulated translation differences up to the balance sheet date and any taxes on these are netted directly within equity. Exchange rate differences are only recognised through profit and loss upon liquidation or partial liquidation of the company.

In the 2015 financial year, currency translation losses from the above loans in the amount of € 655 thousand (2014: € 124 thousand gain) were netted directly within equity; because their liquidation or partial liquidation are not planned for the foreseeable future, as in the previous year no deferred taxes on these exchange rate losses were netted income-neutrally within equity in the financial year.

In previous years, foreign currency gains on a loan extended to technotrans Asia Pacific ltd. Hong Kong, China, for € 153 thousand was reported within equity with no effect on income because this loan was qualified as a net investment pursuant to IAS 21. Since that company’s liquidation is planned in the medium term, these gains were recognised through profit and loss in the financial year.

The exchange differences include differences from the translation of the subsidiaries’ equity to be consolidated at the historical rate and at the rate on the balance sheet date. This item furthermore includes the differences resulting from the translation of the assets and liabilities of the international subsidiaries at the closing rate and from the translation of the expenses and income at the average rate for the year.

Treasury Shares

At the Annual General Meeting on May 15, 2014 the shareholders authorised the Board of Management to buy back treasury shares in accordance with Section 71 (1) No. 8 of German Stock Corporation Act. The scope of this authorisation is for the buying back of a portion of up to € 690,000.00 of the share capital (690,000 no par value shares, corresponding to 9.98 percent of the share capital at the time of the resolution) and is valid until May 14, 2019. No shares were bought back during the period January to December 2015. Pursuant to IAS 32.33 the shares bought back are deducted from equity at their cost (including incidental costs). The buy-back is in line with the strategic objectives of the company. In the 2015 financial year, 14,154 no par value shares (2014: 22,960 no par value shares) with a fair value of € 247 thousand (2014: € 213 thousand) were issued to employees by way of a remuneration component. At the reporting date of December 31, 2015 the total treasury shares amounted to 377,077 ordinary shares (2014: 391,231 ordinary shares).

Capital Management

At December 31, 2015 the equity ratio was 68.0 percent (2014: 63.7 percent). One of the most important financial objectives for technotrans AG is to assure its solvency at all times, and increase the long-term value of the group.

The creation of adequate liquidity reserves is very important in this respect. The aim is always to have liquidity reserves amounting to at least 10 percent of annual revenue. This objective is achieved by implementing various measures in order to reduce capital costs and optimise the capital structure, alongside practising effective risk management.

Methodologically, technotrans’ capital management approach is based on financial market oriented indicators, such as the return on sales (long-term target margin for EBIT: 10 percent), the equity ratio (target: > 50 percent) and gearing. technotrans is not subject to capital requirements laid down in the articles of incorporation. A sound capital structure provides technotrans with the stability that serves as the basis for a business model focusing on sustainability, and thus in the long term meets both the requirements of customer and supplier relations and serves the needs of the employees and shareholders.

The unsecured loan carries the obligation to adhere to certain financial indicators (financial covenants). The financial ratios, equity ratio, gearing and EBITDA margin are determined for the Consolidated Financial Statements and were complied with in the 2015 financial year.

There were no hedged liabilities at the balance sheet date. Interest rate hedges exist only in the case of financial liabilities.

Terms to Maturity of Financial Liabilities

Amounts owed to banks with a carrying amount of € 3,880 thousand (2014: € 5,713 thousand) are collateralised by land charges on the company premises in Sassenberg.

Financial liabilities of € 150 thousand (2014: € 250 thousand) relate to Termotek GmbH. No collateral was furnished for these loans.

At the reporting date KLH Kältetechnik GmbH had financial liabilities of € 746 thousand (2014: € 1,288 thousand) secured in full by land charges on the factory site Am Waldrand 10 in Bad Doberan.

SHT Immobilienbesitz GmbH & Co. Vermietungs KG had financial liabilities of € 854 thousand (2014: € 889 thousand). The real estate Am Waldrand 10a in Bad Doberan serves as security.

In the 2015 financial year the call/put option agreed in connection with the acquisition of gds Sprachenwelt GmbH, Hünfeld, was exercised early. technotrans AG now indirectly holds 100 percent of the shares of gds Sprachenwelt GmbH.

On the basis of current plans, the conditional purchase price for the KLH companies was reduced by € 180 thousand.

All trade payables have a term of up to one year.

The prepayments received originate in the main from project business. They are used for financing the finished goods included in the inventories but from which no revenue has yet been realised. The rise is attributable to the healthy business performance at the end of the financial year.

The obligations to personnel consist largely of gratuities, bonuses and performance-related pay for employees, as well as time credits. It is in the first instance uncertain when these obligations will have to be met.

Partial retirement employment contracts were concluded with two employees in the 2015 financial year. The obligation from these partial retirement employment contracts was determined actuarially. The calculation is based on an interest rate of 2.34 percent. Partial retirement obligations are covered against possible bankruptcy pursuant to Section 8a of the German Partial Retirement Act. To provide cover, cash was paid into a money market fund (Deka Investments) and pledged in favour of the employees. Under IAS 19.7 the assets constitute “plan assets” and are netted with the corresponding provision. Income from the plan assets is netted with the corresponding expenses. No income was realised in the 2015 financial year. Cash of € 42 thousand was invested at December 31, 2015.

Provisions for warranties are created for current statutory, contractual and constructive warranty obligations towards third parties. The provisions were measured taking experience as the starting point, incorporating the circumstances at the balance sheet date.

The other provisions comprise costs for the preparation of the annual accounts, commission payments and other costs. The factor of uncertainty both in this case and for payments to be made under warranty is principally the amount in question.

A direct pension pledge has been made to employees of the former BVS Beratung Verkauf Service Grafische Technik GmbH. Pensions are already paid for all employees. The “defined benefit obligation” (DBO) for purposes of calculating the provisions for pensions was determined on the basis of an actuarial report, using the 2005 G reference tables published by Prof Dr Klaus Heubeck. The calculation is based on an interest rate of 2.1 percent (2014: 2.1 percent) and a pension trend of 2.0 percent (2014: 2.0 percent). The development in pay levels and employee fluctuation were not taken into account, as those eligible for pensions have since left the company. The interest costs for the DBO in 2015 amount to € 5 thousand (2014: € 7 thousand). The actuarial gain amounts to € 2 thousand (2014: € 37 thousand loss). Pension payments amounting to € 11 thousand (2014: € 9 thousand) were made in 2015.

In the year under review, income tax payable relates substantially to technotrans AG and its controlled companies as well as KLH Kältetechnik GmbH.