Annual report 2016

ANNUAL REPORT 2016 • Železiarne Podbrezová a.s. 8 8 - Amendments to IAS 16 “Property, Plant and Equipment” and IAS 38 “Intangible Assets” – Clarification of Acceptable Methods of Depreciation and Amortisation – adopted by the EU on 2 December 2015 (effective for annual periods beginning on or after 1 January 2016), - Amendments to IAS 16 “Property, Plant and Equipment” and IAS 41 “Agriculture” – Bearer Plants – adopted by the EU on 23 November 2015 (effective for annual periods beginning on or after 1 January 2016), - AmendmentstoIAS19“EmployeeBenefits” – DefinedBenefitPlans:EmployeeContributions – adoptedbytheEUon17December2014(effective for annual periods beginning on or after 1 February 2015), - Amendments to IAS 27 “Separate Financial Statements” – Equity Method in Separate Financial Statements – adopted by the EU on 18 December 2015 (effective for annual periods beginning on or after 1 January 2016), - Amendments to various standards “Improvements to IFRSs (cycle 2010 – 2012)” resulting from the annual improvement project of IFRS (IFRS 2, IFRS 3, IFRS 8, IFRS 13, IAS 16, IAS 24 and IAS 38) primarily with a view to removing inconsistencies and clarifying wording – adopted by the EU on 17 December 2014 (amendments are to be applied for annual periods beginning on or after 1 February 2015), - Amendments to various standards “Improvements to IFRSs (cycle 2012 – 2014)” resulting from the annual improvement project of IFRS (IFRS 5, IFRS 7, IAS 19 and IAS 34) primarily with a view to removing inconsistencies and clarifying wording – adopted by the EU on 15 December 2015 (amendments are to be applied for annual periods beginning on or after 1 January 2016). The adoption of these amendments to the existing standards has not led to any material changes to the Company’s financial statements. At the date of authorisation of these financial statements, the following new standards and amendments to standards issued by IASB and adopted by the EU are not yet effective: - IFRS 9 “Financial Instruments” – adopted by the EU on 22 November 2016 (effective for annual periods beginning on or after 1 January 2018), - IFRS15“RevenuefromContractswithCustomers” andamendmentsto IFRS15“EffectiveDateof IFRS15” – adoptedbytheEUon22September 2016 (effective for annual periods beginning on or after 1 January 2018). At present, IFRS as adopted by the EU do not significantly differ from regulations adopted by the International Accounting Standards Board (IASB) except for the following new standards, amendments to the existing standards and new interpretation, which were not endorsed for use in EU as at date of publication of financial statements (effective dates stated below are for IFRS in full): - IFRS14“RegulatoryDeferralAccounts” (effectiveforannualperiodsbeginningonorafter1January2016) – theEuropeanCommissionhasdecided not to launch the endorsement process of this interim standard and to wait for the final standard, - IFRS 16 “Leases” (effective for annual periods beginning on or after 1 January 2019), - Amendments to IFRS 2 “Share-based Payment” – Classification and Measurement of Share - based Payment Transactions (effective for annual periods beginning on or after 1 January 2018), - Amendmentsto IFRS4 “InsuranceContracts” – Applying IFRS9 Financial Instruments with IFRS 4 Insurance Contracts (effective for annualperiods beginning on or after 1 January 2018 or when IFRS 9 Financial Instruments is applied for the first time), - Amendments to IFRS 10 “Consolidated Financial Statements” and IAS 28 “Investments in Associates and Joint Ventures” – Sale or Contribution of Assets between an Investor and its Associate or Joint Venture and further amendments (effective date deferred indefinitely until the research project on the equity method has been concluded), - Amendments to IFRS 15 “Revenue from Contracts with Customers” – Clarifications to IFRS 15 Revenue from Contracts with Customers (effective for annual periods beginning on or after 1 January 2018), - Amendments to IAS 7 “Statement of Cash Flows” – Disclosure Initiative (effective for annual periods beginning on or after 1 January 2017), - Amendments to IAS 12 “Income Taxes” – Recognition of Deferred Tax Assets for Unrealised Losses (effective for annual periods beginning on or after 1 January 2017), - Amendments to IAS 40 “Investment Property” – Transfers of Investment Property (effective for annual periods beginning on or after 1 January 2018), - Amendments to various standards “Improvements to IFRSs (cycle 2014 – 2016)” resulting from the annual improvement project of IFRS (IFRS 1, IFRS 12 and IAS 28) primarily with a view to removing inconsistencies and clarifying wording (amendments to IFRS 12 are to be applied for annual periods beginning on or after 1 January 2017 and amendments to IFRS 1 and IAS 28 are to be applied for annual periods beginning on or after 1 January 2018), - IFRIC 22 “Foreign Currency Transactions and Advance Consideration” (effective for annual periods beginning on or after 1 January 2018). The Company anticipates that the adoption of these new standards and amendments to the existing standards will have no material impact on the financial statements of the Company in the period of initial application. Hedge accounting for a portfolio of financial assets and liabilities whose principles have not been adopted by the EU remains unregulated. According to the Company’s estimates, accounting for hedging instruments in connection with the financial assets or financial liabilities portfolios under IAS 39 “Financial Instruments: Recognition and Measurement” would not have a significant impact on the financial statements had it been adopted as at the reporting date. 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Statement of compliance The separate financial statements have been prepared in accordance with the Act on Accounting and IFRS as adopted by the EU and on the going concernassumption.IFRSasadoptedbytheEUdonotcurrentlydifferfrom IFRSas issuedbythe IASB,exceptforcertainstandardsand interpretations thathavenotbeen endorsed bythe EU as described above. UndertheSlovakActon Accounting No.431/2002Coll. asamended, the Company is also required to prepare its consolidated financial statements in compliance with IFRS as adopted by the EU (see also Note 1.7). (b) Basis of preparation of the separate financial statements Theseparatefinancialstatementsarepreparedunderthehistoricalcostconvention,exceptforcertainfinancial instruments.Theprincipalaccounting policies adopted are set out below. In order that the Slovak statutory financial statements conform to IFRS as adopted by the EU, the accompanying separate financial statements reflect certain adjustments and reclassifications not recorded in the accounting records of the company. Thereportingcurrencyandthefunctionalcurrency istheeuro(EUR).Thedata intheseparatefinancialstatementsarereported ineurosunlessstated otherwise. The preparation of the financial statements in conformity with IFRS requires the use of certain accounting estimates. It also requires management to exercise its judgment in the process of applying the accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant for the separate financial statements are disclosed in Note 4. The financial statements have been prepared under the going concern assumption. NOTES TO THE SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016 (IN EUROS)