11. Property, plant and equipment

Details of property, plant and equipment in the accompanying consolidated balance sheet and related changes are as follows:


 Land and buildings Leasehold improvements, furniture and machinery Other plant
and equipment		 Work in
progress		 Total
Cost




Balance at 01/02/2011 786,725 5,491,846 265,096 86,825 6,630,492
Acquisitions 202,713 596,507 50,619 352,181 1,202,020
Acquisitions of new companies 100 69,145 962 454 70,661
Disposals (13,069) (176,513) (24,187) (4,158) (217,926)
Transfers 47,807 58,850 1,918 (55,028) 53,548
Foreign exchange translation differences 4,028 51,507 1,555 13,109 70,199
Balance at 31/01/2012 1,028,305 6,091,341 295,964 393,384 7,808,993
Balance at 01/02/2012 1,028,305 6,091,341 295,964 393,384 7,808,993
Acquisitions 152,123 980,570 52,014 218,280 1,402,987
Disposals (2,323) (315,064) (39,066) (16,261) (372,713)
Transfers 298,638 105,115 5,782 (402,755) 6,781
Foreign exchange translation differences (12,754) (95,815) (3,273) 1,870 (109,973)
Balance at 31/01/2013 1,463,989 6,766,147 311,421 194,518 8,736,075
Depreciation
Balance at 01/02/2011 70,531 2,905,874 176,461 - 3,152,866
Depreciation charge for the year 95,773 459,417 32,545 - 587,735
Acquisitions of new companies 572 34,214 1,445 - 36,231
Disposals (8,182) (139,447) (23,407) - (171,036)
Transfers 9,811 18,602 (23,610) - 4,803
Foreign exchange translation differences 5,148 14,973 541 - 20,662
Balance at 31/01/2012 173,652 3,293,634 163,975 - 3,631,261
Balance at 01/02/2012 173,652 3,293,634 163,975 - 3,631,261
Depreciation charge for the year 29,970 610,044 38,769 - 678,784
Disposals (3,465) (258,274) (32,945) - (294,684)
Transfers 4,528 (1,751) (56) - 2,721
Foreign exchange translation differences (479) (38,988) (1,693) - (41,160)
Balance at 31/01/2013 204,206 3,604,666 168,049 - 3,976,921
Impairment losses (note 31.2-g)
Balance at 01/02/2011 - 80,543 - - 80,543
Depreciation charge for the year - 70,317 - - 70,317
Applications - (29,364) - - (29,364)
Disposals - (6,829) - - (6,829)
Transfers - - - - 0
Foreign exchange translation differences - - - - 0
Balance at 31/01/2012 - 114,667 - - 114,667
Balance at 01/02/2012 - 114,667 - - 114,667
Depreciation charge for the year - 35,555 - - 35,555
Applications - (28,854) - - (28,854)
Disposals - (26,012) - - (26,012)
Transfers - 1,391 - - 1,391
Balance at 31/01/2013 - 96,747 - - 96,747
Carrying amount




Balance at 31/01/2012 854,653 2,683,040 131,989 393,384 4,063,066
Balance at 31/01/2013 1,259,784 3,064,735 143,371 194,518 4,662,407

Additions to land and buildings in 2012 include the investment for the acquisition of premises in London housing the flagship Zara store in Bond Street and the investment made to expand the corporate headquarters in Arteixo (A Coruña, Spain), a project expected to be completed in 2013. The most significant additions in 2011 relate to the investments made to acquire the premises housing world flagship Zara stores on Fifth Avenue in New York and Corso Vittorio Emanuele in Milan.

“Other plant and equipment” includes, inter alia, information technology equipment and motor vehicles.

The impairment charge for the year corresponds to valuation adjustments relating to plant and equipment in stores, the amount of which is determined on the basis of the budget for 2013 and estimated growth in sales and expenses for the following two years in the business plan. The estimated cash flows for the period not covered by this plan are extrapolated taking into account forecast growth for comparable stores over the rest of the lease term.

Also, sensitivity analyses were performed in relation to reasonably possible changes in the main fair value estimates and the results did not vary significantly.

Disposals comprise mainly assets related to the commercial premises at which the Group carries on its commercial activities.

Fully depreciated items of property, plant and equipment include certain items, mainly machinery, fixtures and furniture, with a gross cost value of euros 1,474,245 thousand and euros 1,163,605 thousand at 31 January 2013 and 31 January 2012, respectively.

Through its corporate risk management policy, the Group identifies, assesses and controls damage and liability-related risks to which the Group companies are exposed. It does this by compiling and measuring the main risks of damage, loss of profits and liability affecting the Group and implements prevention and protection policies aimed at reducing the frequency and intensity of these risks.

Likewise, standard measurement criteria are established at corporate level which enable the different risk risks to which the Group is exposed to be quantified, measured and insured.

Lastly, the Group takes out insurance policies through corporate insurance programs to protect its assets from risk and establishes limits, excesses and conditions according to the nature of such risk and the financial relevance of the company concerned.