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CONSOLIDATED FINANCIAL REPORT | EXPLANATORY NOTES
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also other work on machinery with the intent of reducing fibre manufacturing costs. Significant
investments were also made in the metallurgy area, following the Group's decision to complete the
vertical production process at some of its plants (Schuylkill Haven and Abbeville in North America,
Suzhou in China). Lastly, other investments were made in the plants in Douvrin (France) and
Eindhoven (Netherlands) in order to improve efficiency and reduce optical fibre manufacturing costs;
•
Euro 48 million, or 24% of the total, for structural work. This mainly related to construction of the
Group's new headquarters in the Bicocca district of Milan, to refurbishment of the Arco Felice
docking facilities, as well as extensive work on buildings and production lines to comply with the
latest regulations.
There are liens for Euro 6 million against the value of machinery in connection with long-term loans (Euro 10
million at 31 December 2014).
When closing the present financial year, the Prysmian Group reviewed whether there was any evidence that
its CGUs might be impaired, and then tested for impairment those CGUs potentially at "risk".
Such impairment testing has resulted in the full impairment of Plant and machinery, Equipment, and Assets
under construction primarily in the CGU Energy Products - Brazil (Euro 13 million). In this particular case, the
cash flow forecasts for 2016-2018 have been determined by projecting forward the cash flows expected by
management in 2016 (at constant growth rates); the WACC (Weighted Average Cost of Capital, as defined
in the paragraph "Goodwill impairment test"), used to discount cash flows for determining value in use for the
Brazil CGU is 16.4%.The perpetuity growth rate (G) projected after 2018 is 2%.
Furthermore, the Group has tested other assets for impairment which, although belonging to larger CGUs for
which there was no specific evidence of impairment, presented impairment indicators in relation to particular
market circumstances. This has led to the recognition of Euro 5 million in additional impairment losses in
2015, comprising Euro 2 million to write down the site in Ascoli Piceno (Italy) and other minor impairment
losses.
"Buildings" include assets under finance lease with a net book value of Euro 15 million at 31 December 2015,
compared with Euro 17 million at 31 December 2014. The maturity dates of finance leases are reported in
Note 12. Borrowings from banks and other lenders; such leases generally include purchase options.