Note

Carrying amounts

Carrying amounts of property, plant and equipment

 * Financial information restated as presented in point 2.3 of the notes to the consolidated financial statements.

Carrying amounts of property, plant and equipment

 * Financial information restated as presented in point 2.3 of the notes to the consolidated financial statements.

Gross carrying amount of property, plant and equipment

* Financial information restated as presented in point 2.3 of the notes to the consolidated financial statements.

Impairment losses

 * Financial information restated as presented in point 2.3 of the notes to the consolidated financial statements.

In 2016, the Group capitalised borrowing costs related to the acquisition of property, plant and equipment of PLN 10 319 thousand (2015: PLN 5 790 thousand).

In the reporting period, the Group recognised impairment loss on property, plant and equipment of PLN 25 589 thousand (2015: PLN 59 226 thousand) presented in other operating expenses. The amount consists of:

• impairment loss for property, plant and equipment related to the fat processing plant (Chemicals Segment) in the total amount of PLN 9 443 thousand, including mainly buildings and structures of PLN 4 379 thousand and technical devices and machines of PLN 5 064 thousand. The impairment loss was recognised mainly due to the negative performance of the plant and the decrease in the forecasted future cash flows resulting from: operating below full capacity, an increase in the main raw material’s prices - animal fat and strong competition from the Asian market using palm oil in production. The recoverable amount of the plant amounts to PLN 39 647 thousand (31.12.2015: PLN 52 740 thousand) and was determined as a value in use, with the nominal weighted average cost of capital of 8.03% (31.12.2015: 7.85%) calculated post-tax;
• impairment loss for discontinued investments to property, plant and equipment under construction amounting to PLN 13 923 thousand (Fertilizers-Agro Segment: PLN 6 668 thousand, Plastics Segment: PLN 1 181 thousand, Chemicals Segment: PLN 1 424 thousand, Energy Segment: PLN 229 thousand, Other Activities Segment: PLN 4 421 thousand), for which the recoverable amount was estimated at nil.

In 2015, the impairment losses were recognised for:

• property, plant and equipment related to the carbon disulphide plant, the sodium sulphide plant, tankers and transport containers for carbon disulphide (Chemicals Segment) in the total amount of PLN 13 245 thousand, including mainly buildings and structures of PLN 1 982 thousand, technical devices and machines of PLN 3 110 thousand and vehicles of PLN 8 079 thousand.
• property, plant and equipment and intangible assets of cyclohexanone from benzene plant (Plastics Segment) in the amount of PLN 12 125 thousand including mainly technical devices and machines of PLN 11 535 thousand.
• unused plant of phthalic anhydride (Other Segments) in the amount of PLN 7 876 thousand, including buildings and structures of PLN 3 204 thousand and technical devices and machines of PLN 4 672 thousand.
• property, plant and equipment related to the fat processing plant (Chemicals Segment) in the total amount of PLN 18 405 thousand, including mainly buildings and structures of PLN 7 858 thousand and technical devices and machines of PLN 9 493 thousand.

Other impairment losses concerned property, plant and equipment which are not in use and will be put into liquidation in the foreseeable future or will be physically liquidated. The utilisation of impairment allowances applies to property, plant and equipment that were put into liquidation, were removed or sold and for which impairment had previously been recognised.

There were no indications in the current period that the impairment recognised in prior years for polioxymethylene (POM) installation (Plastics segment) may cease to exist and needs to be reversed.

Property, plant and equipment under construction

The most significant items of property, plant and equipment under construction included:

• Construction of the New Heat and Power Plant in Grupa Azoty ZAK S.A. which is to restore heat and power production capacity using solutions complying with the increasing environmental requirements. As at the 31 December 2016, the capitalised expenditures amounted to PLN 287 162 thousand (31 December 2015: PLN 199 651 thousand),
• Exhaust gas treatment system and modernisation of ECII power plant in Grupa Azoty POLICE which is to adapt the plant to EU IED Directive. As at the 31 December 2016, the capitalised expenditures amounted to PLN 55 676 thousand (31 December 2015: PLN 117 914 thousand),
• Construction of Polyamide Plant II in the Parent Company. As at the 31 December 2016, the capitalised expenditures amounted to PLN 210 010 thousand (31 December 2015: PLN 60 948 thousand),
• Construction of Granulation Plant II in the Parent Company. As at the 31 December 2016, the capitalised expenditures amounted to PLN 111 988 thousand (31 December 2015: PLN 30 336 thousand),
• Construction of extraction-condensing turbine in the Parent Company. As at the 31 December 2016, the capitalised expenditures amounted to PLN 50 081 thousand (31 December 2015: PLN 29 704 thousand),
• Modernisation of ammonia plant in Grupa Azoty POLICE. As at the 31 December 2016, the capitalised expenditures amounted to PLN 89 031 thousand (31 December 2015: PLN 29 497 thousand),
• Construction of a PDH propylene production unit in PDH Polska S.A. As at the 31 December 2016, the capitalised expenditures amounted to PLN 57 519 thousand (31 December 2015: PLN 21 277 thousand).
• Construction of plant producing granular fertilizers based on ammonium nitrate in Grupa Azoty PUŁAWY. As at the 31 December 2016, the capitalised expenditures amounted to PLN 42 824 thousand (31 December 2015: PLN 8 906 thousand).

Leased assets

The Group leases under finance leases mainly computers, IT infrastructure, catalysts and vehicles including locomotives, carriages, passenger cars and fork lifts.

Security

As at 31 December 2016, the carrying amount of property, plant and equipment pledged as security for bank loans amounted to PLN 20 726 thousand (31 December 2015: PLN 26 120 thousand).