2012 Annual Report - Italcementi Group

2012 Annual Report
Presentation 4
General information 14
Annual Report Consolidated Annual Report Directors’ report 146
Sustainability disclosure Italcementi S.p.A. Annual Report Separate financial statements 241
Extraordinary session 351
2.1 Investment property
Investment property of 18,833 thousand euro (12,875 thousand euro at December 31, 2011) is carried at
amortized cost.
(in thousands of euro)
Investment property
Net carrying amount at December 31, 2011 12,875
Gross amount 34,780
Accumulated depreciation ( 21,905)
Net carrying amount at December 31, 2011 12,875
Additions 83
Disposals ( 339)
Depreciation ( 493)
Reclassifications 6,707
Net carrying amount at December 31, 2012 18,833
Gross amount 76,140
Accumulated depreciation ( 57,307)
Net carrying amount at December 31, 2012 18,833
Depreciation exclusively concerned civil and industrial buildings and is calculated on the basis of the respective
useful lives adopted by the company: civil buildings 33 years, industrial buildings 18 years.
The reclassifications related to a number of sold sites and the Pontassieve industrial area with buildings held
under a lease.
The fair value of these investments at December 31, 2012 was 96.1 million euro.
3. Goodwill
This totaled 25,170 thousand euro and arose from the merger of Cementificio di Montalto S.p.A.
The goodwill acquired in a business combination is allocated to the cash-generating units (CGU). Goodwill
recoverability is tested at least once a year or more frequently if indications of impairment emerge. The
methods used to determine the recoverable amount of the CGUs are described in the accounting policies in
the section “Impairment of assets” (note 1.12).
The recovery slowdown that was apparent in 2011 intensified in 2012, especially in the construction industry;
consequently, while the measures contemplated in the 2010-2014 Business Plan remain valid, a number of
macroeconomic and sector assumptions in the Plan have been revised. For the purposes of impairment
testing, determination of the future cash flows to be used was based on the 2013 Budget and, where
necessary, for subsequent-year projections, on new assumptions and economic assessments deemed to
reflect the new market conditions.
As in 2011 an explicit forecast period of 9 years was used; in this way we believe that projected cement
consumption is structurally balanced and aligned with the related long-term estimate implicit in the cement
structural demand curve for Italy.
The terminal value is generally estimated on the basis of the activity of the CGU in its mid-cycle market and
takes account of the market cycle and changes after the explicit forecast period. Account is also taken of the
presumed expected level of cement consumption in 10-15 years, and also of a number of positioning
indicators: the level of market development, per-capita consumption and technical coefficients.
The projections are management’s best estimate of future trends and possible economic conditions.
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