Annual Report 2014

Financial report
Consolidated financial statements
Significant accounting policies
The accounting policies have been applied
consistently to all periods presented in the
consolidated financial statements, and have
been applied consistently by all entities.
Certain comparatives have been reclassified
to conform to current year’s presentation.
A - Property, plant and equipment
Property, plant and equipment are
measured at acquisition or construction
costs less accumulated depreciation and
impairment loss (see Note E). The cost of
property, plant and equipment acquired in
a business combination is the fair value as
at the date of acquisition. After recognition,
the items of property, plant and equipment
are carried at cost and not revaluated.
Costs include expenditures that are directly
attributable to the acquisition of the asset;
e.g. costs incurred to bring the asset to
its working condition and location for its
intended use. It includes the estimated
costs of dismantling and removing the
assets and restoring the sites, to the extent
that the liability is also recognised as a
provision. The costs of self-constructed
assets include the cost of material, direct
labour and an appropriate proportion of
production overheads. Borrowing costs
incurred and directly attributable to the
acquisition or construction of an asset that
takes a substantial period of time to get
ready for its intended use, are capitalised
as incurred. When all the activities
necessary to prepare this asset are
completed, borrowing costs cease
to be capitalised.
An item of property, plant and equipment
is derecognised upon disposal or when no
future economic benefits are expected
from its use or disposal. Any gain or loss
arising on de-recognition of the asset
(calculated as the difference between the
net disposal proceeds and the carrying
amount of the asset) is included in the
operating income in the year the asset
is derecognised.
an item of property, plant and equipment
the cost of replacing part of such an
item when that cost is incurred if it is
probable that the future economic benefits
embodied with the item will flow to the
Group and the costs of the item can be
measured reliably. The carrying amount
of the parts replaced is derecognised. All
other costs are recognised in the income
statement as an expense as incurred.
Assets held under finance lease Leases
of property, plant and equipment where
the Group assumes substantially all
the risks and rewards of ownership are
classified as finance leases. Property, plant
and equipment acquired through a finance
lease is recognised at the commencement
of the lease term at the lower of the fair
value of the leased asset and the present
value of minimum lease payments, each
determined at the date of inception of
the lease. Subsequently, such assets
are measured consistently with owned
property, plant and equipment, except
that the useful life is limited by the lease
term if the transfer of ownership at the
end of the lease term is not reasonably
certain. The corresponding lease liabilities
are included in non-current and current
financial liabilities.
Depreciation Depreciation starts when
an asset is available for use and is charged
to the income statement on a straightline
basis over the estimated useful life.
The depreciable amount of each part of
property, plant and equipment with a cost
that is significant in relation to the total
cost of the asset is depreciated separately
over its useful life on a straight-line basis.
Costs of major inspections are depreciated
separately over the period until the next
major inspection. Temporarily idle assets
continue to be depreciated.
Estimated useful lives of the major
components of property, plant and
equipment are as follows:
Subsequent expenditures The Group
recognises in the carrying amount of
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