WAY UPWARDS - HSE

Financial report of HSE Group
183
5.5.7.9.2 Non-financial assets
On each reporting date the company verifies the carrying
amount of significant non-financial assets with
the purpose to establish whether there are any signs
of impairment. If such signs exist, the recoverable
amount of the asset is estimated.
The recoverable amount of an asset or cash-generating
unit is the higher of the two: value in use or fair
value less costs of sale. When determining the value
of an asset in use, the expected future cash flows are
discounted to their current value by using the discount
rate before tax that reflects regular market assessments
of the time value of money and risks that
typically occur in relation to the asset. For the purpose
of impairment test, the assets that cannot be individually
tested are classified in the smallest possible group
of assets that generate cash flows from further use and
are mostly independent from receipts of other assets
and groups of assets (cash-generating unit).
The impairment of an asset or the cash-generating
unit is recognised when its carrying amount exceeds
its recoverable amount. Impairment is disclosed in the
income statement.
At the end of the reporting period, the company
evaluates losses due to impairment in previous periods
and thus establishes whether the loss has decreased
or even disappeared. Loss due to impairment
is reversed in case there has been a change in assessments,
on the basis of which the company defines
the recoverable amount of an asset. The impairment
loss is reversed to the amount up to which the asset’s
increased carrying amount does not exceed the carrying
amount that would have been determined net
of depreciation had no impairment loss been recognised
for the asset in prior periods.
previous years. They are created on the basis of the
decision by relevant management and supervisory
body.
Fair value reserve represents signs of revaluation
of derivatives and available-for-sale financial-assets of
group companies.
The retained earnings include profits or loss of the
group companies in the previous years and in the current
year.
The consolidated equity adjustment includes exchange
rate differences from translations of items in
financial statements of the group companies operating
abroad.
Minority interest represents the share of minority
owners in the total equity of subsidiaries.
5.5.7.11 Provisions for jubilee and
termination benefits
In accordance with legal regulations, collective agreement
and internal rules, the company is obliged to
pay jubilee benefits to employees and termination
benefits on their retirement for which long-term provisions
are created. There are no other existing pension
liabilities.
Provisions are created in the amount of estimated
future payments for termination and jubilee benefits
discounted at the end of the financial year. The calculation
is prepared for each employee by taking into
account the costs of termination benefits on retirement
and costs of all expected jubilee benefits until
retirement. Calculation with the use of projected unit
is prepared by actuary for all group companies. Payments
for termination benefits on retirement and jubilee
benefits decrease the created provisions.
5.5.7.10 Equity
5.5.7.12 Other provisions
Nominal capital and capital surplus represent cash
contributions and in-kind contributions made by the
owner of the controlling company.
As at 31 December 2002, the general equity revaluation
adjustments included the revaluation of
share capital before 2002 in accordance with then
applicable Slovene Accounting Standards. The adjustment
due to the transfer to new Slovene Accounting
Standards has been transferred to capital surplus. The
amount can only be used for increase in share capital.
Other reserves are amounts, which are purposely
retained earnings of the controlling company from the
Provisions are recognised when the company has a
legal or constructive liability arising from a past event,
and when it is likely that that an outflow of resources
embodying economic benefits will be required to settle
the liability.
The amount of the provision must be equal to
the present value of the expenditure expected to be
required to settle the liability. Since provisions are intended
for covering probable, but not certain obligations,
the amount recognised as a provision is merely
the best estimate of the expenditure needed for the
settlement of obligation existing on the date of the