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.