Annual report - HSE

Write-downs in value include amortisation/depreciation costs related to consistent
transfer of value of amortisable intangible assets and depreciable property, plant and
equipment and investment property.
Write-downs in value also include impairments, write-downs and losses from the sales of
intangible assets and property, plant and equipment as well as impairments or write down
of receivables and inventories.
Labour costs are historical costs that refer to salaries and similar values in gross amounts
as well as duties that are calculated from this basis and are not an integral part of gross
amounts. These costs can be directly charged against creation of products and services
(costs of direct work) or they have the nature of indirect costs and are comprised in relevant
purpose (functional) groups of indirect costs.
Other operating expenses occur in relation to creation of provisions, environmental
charges and other duties.
Financial expenses comprise borrowing costs, including related derivatives and
impairment of investments. Interest expenses are recognised upon their occurrence, in the
amount of agreed-upon interest rate.
5.5.7.16 Tax
Taxes include current and deferred tax liabilities. Current tax is included in the consolidated
income statement. Deferred tax in recognised in the consolidated income statement and in
the consolidated statement of financial position.
Current tax liabilities are based on taxable profit for the period. The taxable profit defers
from net profit reported in the profit or loss, since it excludes the items of revenue or
expenses that are taxable or deductible in other years as well as items that are never
taxable or deductible. The Group companies’ current tax liabilities are calculated with tax
rates that are applicable on the reporting date. If current tax liability is lower than advances
paid, current tax receivable is posted.
Country Effective tax rate in 2012
Slovenia 18%
Croatia 20%
Serbia 10%
Macedonia 10%
Bosnia and Herzegovina 10%
Bulgaria 10%
Italy 27.5%
Deferred tax is completely disclosed using the liabilities method after the statement of
financial position for temporary differences arising between the tax value of assets and
liabilities and their carrying amounts in financial statements. Deferred income tax is defined
using tax rates (and legislation) applicable on the date of consolidated financial position
and for which it is expected to be in use when the receivable for deferred tax is realised or
the liability for deferred tax is settled.
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Annual Report HSE 2012
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A deferred tax asset is recognised, if there is a possibility that a taxable profit will be
available in the future, from which it will be possible to utilise temporary differences. It
represents the amount of the calculated corporate income tax on deductible temporary
differences.
Deferred tax liabilities represent the assessed amount of corporate income tax and taxable
temporary differences, which results in a higher tax payable in the future.