2012 Annual Report - Italcementi Group

Repayments refer to the partial return of the share capital by Sirio S.p.A.
Sales refer to the sale of the Silos Granari della Sicilia S.r.l. investment at a sale price of 18,311 thousand
euro, for which a net gain of 7,928 thousand euro was posted under finance income.
At December 31, 2012 the merger of Cementificio di Montalto S.p.A. into Italcementi S.p.A. took place; for
accounting and tax purposes, the transaction did not have a retroactive effect and the carrying amount of the
equity investment was written off against equity, generating recognition of a 45,621 thousand euro deficit.
Investments in subsidiaries and associates are tested for impairment if evidence of impairment emerges, by
comparing carrying amount with recoverable amount. The methods used to determine recoverable amount are
described in the accounting policies in the section “Impairment”.
The value configuration used to determine the recoverable amount of equity investments is value in use, that
is, fair value less costs to sell, with reference to comparable transactions.
The value in use of each equity investment is determined on the basis of 2013 budget data and on the
discounted projection of expected future cash flows, taking account of changes in operating assets, net of the
effects of investments for additions or restructuring. The observation period varies between five to nine years
according to the characteristics of the markets on which the Group companies operate. The terminal value is
calculated on the basis of the discounted cash flows for the last year. The growth rate is based on the forecast
long-term growth of the relevant industrial sector of the country and on the estimated long-term inflation rate.
The estimate assumes a growth rate, for operations in Italy, equivalent to the long-term inflation rate (2%). The
pre-tax discount rate used to calculate the present value of expected cash flows for operations in Italy is 8.8%.
The aforementioned discount and growth rates are supported by previous experience and are in line with those
in use in the sector.
Impairment testing highlighted the need to impair the investments in Calcementi Jonici S.p.A. for 9,772
thousand euro, Nuova Sacelit S.p.A. for 10,344 thousand euro and Calcestruzzi S.p.A. for 94,172 thousand
euro; in addition, impairment losses were recorded on the investments in Azienda Agricola Lodoletta S.r.l. for
104 thousand euro and Sirio S.p.A. for 1,203 thousand euro on the basis of estimated value in use.
264