4. Detailed information on statement of profit and loss and OCI items

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4.1 Rental income

in CHF thousands	1.4.2019 to 31.3.2020	1.4.2018 to 31.3.2019

Potential rental income	10 219	9 074
Vacancy	–798	–1 010
Net rent reductions	0	–11
Rental income	9 421	8 053

Potential rental income increased by TCHF 1ʼ145 compared to the previous year, mainly due to the acquisition of the property in Zurich-Oerlikon. New rentals in Berne and Egg led to a reduction in vacancies of TCHF 243, while the increase in vacancies in Baden had a counteracting effect. Overall, rental income increased by TCHF 1ʼ368 compared with the previous year.

The following table shows the 5 main tenants who generated 57.0% of the rental income in the current financial year.

Tenant	Sector	%

Baker & McKenzie, Zurich	Law firm	31.2
Roland Berger, Zurich	Consulting	14.9
BR Bauhandel AG, Bern	Distribution	4.1
Testo Industrial Services AG, Egg	Quality control	4.0
Notariat Oerlikon, Zurich	Notary	2.8
Total		57.0

The following table contains a maturity analysis of lease payments categorised by contract term, showing the undiscounted lease payments to be received after the reporting date:

in CHF thousands	31.03.2020	31.03.2019

Less than one year	1 748	389
One to two years	699	2 243
Two to three years	634	392
Three to four years	632	307
Four to five years	786	602
More than five years	4 945	4 256
Total undiscounted lease payments	9 444	8 189

4.2 Real estate expenses

in CHF thousands	1.4.2019 to 31.3.2020	1.4.2018 to 31.3.2019

External property management fees	–243	–229
Non recoverable service charges	–78	–47
Insurance	–79	–85
Marketing costs	–46	–31
Property taxes	–24	–27
Legal fees	0	–2
Other property-related expenses	–60	–49
Total real estate expenses	–530	–470

Total real estate expenses increased by CHFk 60 compared to the previous year. In addition to higher marketing costs, the increase is due to the acquisition of the property in Zurich Oerlikon.

4.3 Personnel expenses

in CHF thousands	1.4.2019 to 31.3.2020	1.4.2018 to 31.3.2019

Wages and salaries	–1 554	–2 740
Social security contributions	–119	–155
Pension plan expenses	–107	–136
Other personnel expenses	–95	–226
Total personnel expenses	–1 875	–3 257

The decrease in personnel expenses by CHFk 1ʼ382 results from lower bonus payments and a reduction in the number of employees from eight to five during the year.

Other personnel expenses include lump-sum expense allowance and travel cost for employees and member of the Board of Directors, fees for directorsʼ and officersʼ insurance, costs for recruting of new employees and expenses for the further training of existing staff.

4.4 Administrative expense

in CHF thousands	1.4.2019 to 31.3.2020	1.4.2018 to 31.3.2019

Legal and tax advisory	–239	–318
Other advisory and investor relations	–220	–300
Rent expenses	–191	–193
Bookkeeping and IT	–104	–159
Other taxes	–89	–117
Audit	–67	–70
Valuation	–42	–33
Project related advisory expenses	–23	–27
Depreciation	–25	–20
Travel expenses	–9	–119
Notarial charges	–1	–4
Other administrative expenses	–95	–86
Total administrative expenses	–1 105	–1 446

Administrative expenses fell by CHFk 341 or 24%. On the one hand, this is a result of the further optimization of the companyʼs cost structure, on the other hand, one-off expenses were incurred in the previous year – particularly in the area of consulting costs – in connection with the final assessment of property gains taxes and legal advice in connection with the simplification of the corporate structure.

Other income

Other income of TCHF 511 mainly relates to surpluses from the settlement of an escrow account set up in connection with the sale of the German portfolio in 2017. Also in the previous year, other income mainly related to settled claims resulting from the sale of the German portfolio.

4.5 Financial expense and income

in CHF thousands	1.4.2019 to 31.3.2020	1.4.2018 to 31.3.2019

Financial expenses
Mortgage interest expenses 1	–743	–714
Other interest expenses 1	–2	–3
Currency translation adjustments	–106	–124
Total financial expenses	–851	–841

Financial income
Interest income 2	230	485
Total financial income	230	485
Net financial expenses	–621	–356

1 The respective liabilities belong to the category "Financial liabilities at amortized cost".

2 The assets to which this income relates belong to the category "Financial Assets at amortized cost".

Financial expenses mainly relate to interest on the mortgage loan. In connection with the acquisition of the Zurich Oerlikon property, limits provided under the framework financing were used.

As in the previous year, the interest income of CHFk 230 relates exclusively to an income tax credit. More detailed information can be found in note 4.6.

4.6 Income taxes

Income tax

in CHF thousands	1.4.2019 to 31.3.2020	1.4.2018 to 31.3.2019

Income taxes in profit and loss
Current taxes from previous year	271	5 276
Total current taxes	271	5 276

Changes in tax loss carry forwards	–365	–1 600
Changes in valuation	–642	–697
Changes in other positions	–275	–9
Total deferred taxes	–1 282	–2 306
Total income taxes in profit and loss	–1 011	2 970

Income taxes in comprehensive income statement (OCI)
Current taxes in OCI	0	0
Deferred taxes in OCI	5	16
Total income taxes in comprehensive income statement (OCI)	5	16

The current tax income in the amount of CHF 0.3 million results mainly from the release of tax provisions due to the definitive assessments of Züblin Immobilien AG for property gains taxes (for the changes of ownerships in 2009 and 2013) as well as the income taxes for the financial years 2009/2010 to 2012/2013 (cantonal and municipal taxes, direct federal taxes). In the previous year, provisions in the amount of CHF 5.3 million were already released in this connection. In the tax years concerned, the inter- and intra-cantonal loss offset for real estate gains tax and ordinary income tax in particular was unclear. The tax provisions as at 31 March 2018 reflected the maximum and most probable risk at that time. As part of the assessment procedure, the issue of loss offsetting was clarified with the tax authorities and a solution was found, which meant that the tax provisions as at 31 March 2019 could be adjusted accordingly. In the current financial year, all tax years were finally settled.

The expenses for deferred income taxes amount to CHF 1.3 million in the current financial year (previous year: CHF 2.3 million). In the previous year, deferred taxes included a special effect in the amount of CHF 1.3 million, which was due to the additional release of loss carryforwards in connection with the above-mentioned assessments.

In total, income tax expenses in the 2019/20 financial year amounted to CHF 1.0 million. This corresponds to a decrease of CHF 4.0 million compared with income of CHF 3.0 million in the previous year. As already explained, this is entirely attributable to special items in connection with the clarification of the issue of loss offsetting.

The following table provides a reconciliation of income taxes at the reference tax rate to the income tax reported in the income statement:

Income tax reconciliation

in CHF thousands	1.4.2019 to 31.3.2020	1.4.2018 to 31.3.2019

Financial year
Profit before tax	5 639	3 244
Reference rate 1	19.57%	18.28%
Income taxes at reference rate	–1 103	–593
Income taxes recogized in Profit & Loss	–1 011	2 970
Difference	92	3 563
Adjustments:
– Changes in tax rates on deferred tax positions	217	90
– Items taxed at other than reference rate	–65	–317
– Changes in loss carry forwards not recognized	–99	–484
– Income taxes from previous periods	39	4 274

1 The reference tax rate for the Group is calculated at 19.57% (previous year 18.28%). The calculation was made using absolute numbers.

4.7 Earnings per share

in CHF thousands	1.4.2019 to 31.3.2020	1.4.2018 to 31.3.2019

Average number of shares entitled to dividends	3 316 303	3 318 027

Earnings	4 628	6 214

Earnings per share in CHF	1.40	1.87

Züblin Immobilien Holding AG has no equity instruments which would lead to a dilution.