Annual report - HSE

4.5.7.3 Long-term investments in subsidiaries
Investments in subsidiaries are those where the company has the controlling influence and
it performs consolidated financial statements for this group of companies.
In financial statements, investments in subsidiaries are valued at cost.
The company recognises revenue from investment in the period when the decision on
payment of profit shares was adopted.
Additional inputs in subsidiaries increase the cost of investments.
Any indications of impairment of investments in subsidiaries are determined on an annual
basis.
In the event impartial evidence exists that a loss due to impairment was incurred, the
amount of loss is measured as the difference between the carrying amount of a financial
asset and the present value of estimated future cash flows discounted at the market
interest rate for similar financial assets, and recognised as revaluation financial expense.
If a subsidiary is submitted to liquidation, the difference between carrying amount and
liquidation value of the investment is recorded in financial revenue or expenses.
4.5.7.4 Financial instruments
Financial instruments include the following assumptions:
• non-derivative financial assets;
• non-derivative financial liabilities;
• derivatives.
4.5.7.4.1 Non-derivative financial assets
Non-derivative financial assets comprise cash and cash equivalents, receivables and loans
and investment.
Financial asset is derecognised when contractual rights to cash flows from this asset are
discontinued or when the rights to contractual cash flows from the financial asset are
transferred on the basis of a transaction in which all risks and benefits from the ownership
of financial asset are transferred.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market.
At initial recognition, loans and receivables are disclosed at fair value increased by
direct costs of transaction. After initial recognition, loans and receivables are measured
at amortised cost and decreased by the loss due to impairment. Loans and receivables
are recorded in the statement of financial position as financial and operating assets and
include granted loans with interests, receivables due from buyers and receivables due
from others.
In the books of account loans are recognised in accordance with settlement (repayment)
date, while receivables are recognised in accordance with trading date.
They are included under current assets, except in case of maturities of more than 12
months after the date of the statement of financial position. In such case they are classified
under long-term assets.
Cash and cash equivalents
Cash and cash equivalents comprise cash, bank deposits of up to three months and other
short-term quickly realisable investments with original maturity of three months or less.
They are carried at cost. Overdrafts on bank accounts are included under short-term
financial liabilities.
Annual Report HSE 2012
4 Financial Report of the company HSE
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