Annual report - HSE

Property, plant and equipment (2)
in €
Property, plant and equipment 31 December 2012 31 December 2011
Land 38,614,997 38,667,781
Buildings 557,929,901 568,214,238
Production equipment 560,356,644 557,041,519
Other equipment 15,496,029 22,144,302
Property, plant and equipment being acquired 1,059,410,674 714,053,912
Property, plant and equipment 2,231,808,245 1,900,121,752
The majority of the Group companies are engaged in production of electricity or extraction
of raw materials used for electricity production. This requires specialised equipment and
buildings, where the equipment is located. Therefore, property, plant and equipment
account for the largest part of the Group’s assets.
The most important investments in property, plant and equipment of Group companies in
2012 include investments in Unit 6 at TEŠ and construction of HPP on the lower Sava River,
renovation of other power plants and production equipment. Additional information on
the Group’s investments is available in the business report (section 2.9 Investments).
In 2012, the companies included EUR 21,029,248 of borrowing costs to the cost of property,
plant and equipment.
In 2012, useful lives of major intangible assets were reviewed and it was established
that the useful lives of majority of assets were appropriately assessed, given the current
expectations regarding the usability of these assets. On the basis of analysis of the
condition of plants and the estimated operating regime of Unit 5 in TEŠ, the useful lives
of the facility and equipment were extended. Thus, depreciation of the facility for 2012
amounted to EUR 947,223, which was EUR 568,333 less compared to the initial amount,
while depreciation of production equipment totalled EUR 5,587,346 or EUR 4,202,177 than
the initial amount. Useful life of some other equipment was also extended or shortened;
namely total adjusted depreciation amounts to EUR 255,500, which is EUR 67,064 more
than the initial depreciation at previous depreciation rates.
Due to inclusion of the company Golte d.o.o. in consolidation, the Group’s property, plant
and equipment increased by EUR 13,853,781, the majority of which regards buildings (EUR
8,251,595) and production equipment (EUR 4,335,460). On the basis of appraisals, an
impairment of buildings and land in total amount of EUR 506,000 was carried out in the
group of property, while in the group of property in acquisition, a facility was impaired
in the amount of EUR 579,975. In the group of production equipment, an impairment
in the amount of EUR 600,000 was carried out, as errors in the guarantee period were
determined, due to which the equipment does not meet the initially determined technical
characteristics despite reconstruction and other equipment in the amount of EUR 250,765.
During consolidation, impairment of buildings and production equipment of the company
TET in total amount of EUR 15,764,589 was performed.
Majority of write-downs in property, plant and equipment refers to assets that were
destroyed in November floods, overhaul in Unit 5 and worn-out equipment, mostly
replaced by new equipment. Some property and equipment were sold.
EUR 269,276 of the Group’s equipment was under financial lease, while no property was
under financial lease.
5 Financial Report of HSE Group
Annual Report HSE 2012
186
The Group’s property and equipment are mortgaged in total amount of up to EUR
38,636,111. Precise balance of mortgages depends on the current balance of loan exposure
and conditions of banks with regard to collateral with mortgage.