Financial Information - Uralita
Financial Information - Uralita
Financial Information - Uralita
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ANNUAL REPORT 2006<br />
FINANCIAL INFORMATION<br />
4.19. Consolidated cash flow statements<br />
The consolidated cash flow statements are<br />
prepared using the indirect method and the<br />
terms used are defined as follows:<br />
• Cash flows: inflows and outflows of cash and<br />
cash equivalents; cash equivalents are shortterm<br />
investments that are highly liquid and<br />
have low risk that their value will change.<br />
• Operating activities: activities typically carried<br />
out by the Company and any others that<br />
cannot be classified as investing or financing<br />
activities.<br />
• Investing activities: the acquisition, disposal or<br />
use by other means of non-current assets and<br />
other investments not included in cash and<br />
cash equivalents.<br />
• Financing activities: activities that result in<br />
changes in the size and composition of equity<br />
and liabilities that are not generated by<br />
operating activities.<br />
4.20. CO 2 emission rights<br />
CO 2 emission rights granted by governments<br />
freely to consolidated companies, in line with the<br />
international environmental agreements reached<br />
with the Kyoto Protocol, are measured at the<br />
market value at which they were granted (01<br />
January 2006) and recognized in “Intangible<br />
assets” on the consolidated balance sheet at 31<br />
December 2006. At that date, the value of the<br />
rights used and pending use, respectively, are<br />
recognized in “Provisions” and “Deferred<br />
income” in the balance sheet at that date.<br />
The use of emission rights is recognized as a<br />
period expense in “Other operating expenses” in<br />
the consolidated income statement for the year<br />
ended 31 December 2006. The recognition of<br />
the deferred income is included in “Other<br />
operating revenues.”<br />
4.21. Environmental matters<br />
The consolidated companies treat as an expense<br />
of an environmental nature the payments made<br />
to personnel occupied exclusively with<br />
environmental tasks and the goods and<br />
purchases necessary for activity in this area, as<br />
well as the disposal of waste from operational<br />
activities. The remaining amounts related to<br />
environmental activities are considered<br />
investments.<br />
The consolidated companies also establish<br />
provisions for any responsibilities or obligations<br />
likely to arise relating to activities that affect the<br />
environment and whose amount can be<br />
estimated.<br />
4.22. Accounting judgments and estimates<br />
The information included in the accompanying<br />
consolidated annual accounts is the<br />
responsibility of the Group’s Directors.<br />
In the preparation of the consolidated financial<br />
statements for 2006 and 2005 estimates made<br />
by the Directors of the Group have been used to<br />
measure certain assets, liabilities, revenues,<br />
expenses and commitments recognized therein.<br />
These estimates relate primarily to:<br />
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