4.3 Annual Result
The positive development of the operating result was complemented by a slight improvement in the result from investing the liquidity reserve and a positive income tax effect from the formation of deferred tax assets on loss carry-forwards.
The financial result increased slightly from € 0.22 million to € 0.23 million due to the continuous rise in the interest rate for short-term financial investments. In the 2005/2006 financial year, SinnerSchrader continued to invest the liquidity reserve on a short-term basis so that it was available without any major interest rate change risks. The 1-month Euribor relevant to such investments rose over the financial year from 2.11 % as of 31 August 2005 to 3.09 % on 31 August 2006. The resultant effect was greater than can be seen from the development of the financial result because in the previous year, too, there had been a contribution to the financial result from the partial repayment of an amortised financing of a participation in the amount of € 0.03 million.
This means that the earnings before tax in the 2005/2006 financial year were € 0.8 million, in comparison to € 0.4 million in the previous year.
In spite of the positive pre-tax result, there was no current tax on income because the result could be completely offset against existing loss carry-forwards. Moreover, for the loss carry-forwards remaining after offsetting against the pre-tax earnings, deferred tax assets had to be formed with an effect on profits in accordance with international accounting standards. Due to the heightened expectation of future pre-tax profits after the last two financial years, with which the loss carry-forwards can be used, the basis for the formation of a value adjustment on the full active deferred tax assets disappeared, with the result that the use of the existing domestic loss carry-forwards in the statements for the 2005/2006 financial year had a full effect on profits. After offsetting with other deferred effects due to differences between international accounting and tax accounting, there was a deferred tax revenue of € 0.35 million. In the previous year, a tax revenue of € 0.15
million was achieved.
Overall, in the 2005/2006 financial year SinnerSchrader earned net income of almost € 1.2 million, which was thus more than twice as much as in the previous year. With around 11.4 million shares in circulation, this results in earnings per share of € 0.10, in comparison to € 0.05 in the previous year.
