Annual report - HSE

5.5.6 Branch and representative offices
The Group has three foreign branch offices - in the Czech Republic, Slovakia and Macedonia,
and a representative office in Romania. In 2012, the Group operated through the branch
offices to a minimum degree. The operations of branch and representative offices are
included in the Group’s financial statements.
5.5.7 Significant accounting policies
The consolidated financial statements are prepared on the basis of accounting policies
presented below. The abovementioned accounting policies are used for all years
presented, unless otherwise indicated.
The comparative data was adopted when needed so that it is in accordance with the
presentation of data in the current year.
5.5.7.1 Basis for consolidation
Consolidated financial statements comprise financial statements of the controlling
company and subsidiaries. Subsidiaries are companies controlled by the Group. This means
that the Group is able to decide on financial and business orientations of the company for
obtaining benefits from its operations. Financial statements of subsidiaries are included in
consolidated financial statements from the date when the controlling begins to the date
when it stops.
Transactions with the owners of non-controlling share are considered in a same way as
transactions with external partners. Profits and losses of the owners of non-controlling
share are disclosed in the consolidated income statement. The equity of non-controlling
share owners in the consolidated statement of financial position is disclosed separately
from other equity items.
The financial statements of Group companies have been incorporated into the consolidated
financial statements on the basis of full consolidation. The financial statements are merged
item by item by adding up similar items of assets, liabilities, equity, revenue and expenses.
Consolidated financial statements do not include balances of receivables and liabilities
among the Group companies, revenue and expenses and unrealised profits and losses
from transactions within the Group.
Exchange differences from translation of financial statements of subsidiaries whose
functional currency is not the same as presentation currency of the Group are recognised
in consolidated equity adjustment or statement of other comprehensive income.
5.5.7.2 Intangible assets
Intangible assets are long-term assets enabling the performance of the Group companies’
registered activities without existing physically.
Intangible assets comprise long-term property rights (also emission coupons), goodwill
and other intangible assets.
Upon initial recognition, an intangible asset is measured at cost. The cost also includes
import and non-refundable purchase taxes after the commercial and other discounts
have been deducted and all costs directly attributable to preparation of an asset for the
intended use. Borrowing costs that are directly attributed to the purchase of an intangible
qualifying asset (until its capitalisation) are recognised as a part of cost of such asset.
Intangible assets are subsequently measured using the cost model.
The Group has no intangible assets, for which it would record the residual value when
purchased.
Annual Report HSE 2012
5 Financial Report of HSE Group
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