16. Property, plant and equipment
| RUB million | Land and building | Plant and equipment | Fixtures and fittings | Construction in progress | Total |
|---|---|---|---|---|---|
| Cost | |||||
| At 1 January 2010 | 11,675 | 33,912 | 840 | 10,934 | 57,361 |
| Additions | — | — | — | 10,614 | 10,614 |
| Transfers | 625 | 3,913 | 1,387 | (5,925) | — |
| Transfer to investments in associates, see note 17 | — | (1,183) | — | (10) | (1,193) |
| Disposals | (38) | (410) | (12) | (158) | (618) |
| At 1 January 2011 | 12,262 | 36,232 | 2,215 | 15,455 | 66,164 |
| Reclassification | — | 541 | (541) | — | — |
| Additions | — | 1,738 | 313 | 14,750 | 16,801 |
| Transfers | 1,778 | 7,487 | — | (9,265) | — |
| Disposals | (184) | (662) | (38) | (190) | (1,074) |
| At 31 December 2011 | 13,856 | 45,336 | 1,949 | 20,750 | 81,891 |
| Accumulated depreciation | |||||
| At 1 January 2010 | (2,530) | (11,671) | (603) | — | (14,804) |
| Depreciation charge | (505) | (4,457) | (119) | — | (5,081) |
| Impairment | — | (213) | — | (190) | (403) |
| Transfer to investments in associates, see note 17 | — | 297 | — | — | 297 |
| Disposals | 27 | 272 | 8 | — | 307 |
| At 1 January 2011 | (3,008) | (15,772) | (714) | (190) | (19,684) |
| Depreciation charge | (794) | (4,757) | (253) | — | (5,804) |
| Reversal of impairment | — | — | — | 190 | 190 |
| Disposals | 80 | 415 | 28 | — | 523 |
| At 31 December 2011 | (3,722) | (20,114) | (939) | — | (24,775) |
| Net book value at 1 January 2010 | 9,145 | 22,241 | 237 | 10,934 | 42,557 |
| Net book value at 1 January 2011 | 9,254 | 20,460 | 1,501 | 15,265 | 46,480 |
| Net book value at 31 December 2011 | 10,134 | 25,222 | 1,010 | 20,750 | 57,116 |
RUB 94 million of interest expense was capitalized in the cost of qualifying assets.
(a) Impairment testing
At the reporting date the Group performed an impairment testing under IAS 36. Cash flow forecasts for different factories representing separate cash-generating units were prepared for the forecast period of 5 to 10 years and a terminal value was derived after the forecast period. The following assumptions were applied in the impairment testing:
- After-tax discount rate 13.8% (2010: 13.8%)
- Terminal growth rate 3% (2010: 3%)
Based on the analysis, no impairment loss was recognised. A 2% change in the discount rate would not have resulted in an impairment loss.
(b) Security
Properties with a carrying amount of RUB 1,783 million (2010: RUB 4,643 million) are pledged to secure bank loans, see note 26.
(c) Leasing
Machinery with the carrying value of RUB 2,603 million (31 December 2010: RUB 994 million) is leased under various finance lease agreements, see note 28.
Notes to the Consolidated Financial Statements