5. Property, plant and equipment

The net book value of property, plant and equipment as at 31 December 2014, 2013 was as follows:

On 6 August 2014 assets of mobile business were transferred to T2 RTK Holding for completion the second stage of the deal to create a new national mobile operator (refer to Note 8).

At 31 December 2014 and 2013 cost of fully depreciated property, plant and equipment was 196,082 and 181,117 respectively.

Interest capitalization

Interest amounting to 1,126 and 2,780 was capitalized in property, plant and equipment for the years ended 31 December 2014 and 2013 respectively. The capitalization rate used to determine the amount of borrowing costs eligible for capitalization was 8.25% and 8.37% for the years ended 31 December 2014 and 2013 respectively.

Pledged property, plant and equipment

Property, plant and equipment with a carrying value of 427 and 2,072 was pledged in relation to loan agreements entered into by the Group as at 31 December 2014 and 2013 respectively.

Impairment of property, plant and equipment

As at 31 December 2014 and 2013 the Group conducted impairment testing of its property, plant, equipment, to identify possible irrecoverability of the assets. The Group assessed the recoverable amount of the assets for which estimation on individual basis is impossible within respective CGU. The Group defines CGUs as regional branches (in case of Rostelecom), legal entities or group of legal entities (in case of subsidiaries).

In 2013 as a result of reorganization (refer to Note 8) a number of legal entities were merged with the Company which caused the change in composition of CGUs. Assets including goodwill previously allocated to legal entities were reallocated to regional branches to which former entities have been merged.

The recoverable amount of each CGU is determined by estimating its value in use. Value in use calculation uses cash-flow projections based on actual and budgeted financial information approved by management and discount rate which reflects time value of money and risks associated with each individual CGU. Key assumptions used by management for the reporting dates in the calculation of value in use are as follows:

• discount rates are estimated in real terms as the weighted average cost of capital on pre tax basis. Nominal rates for discounting varies from 18.10% to 27.54% per CGU;
• OIBDA margin is based on historical actual results and varies from 6.45% to 65.82% per CGU;
• for CGU, except GNC Alfa, cash flow projections cover the period of five years, cash flows beyond five-year period are extrapolated using growth rate of 2% for each CGU.

For CGU GNC Alfa cash flow projections cover the period of siх years, due to special terms of business model at the acquisition date.

Future cash flows were adjusted using consistent assumptions about price increases attributable to general inflation.

For individual items of construction in progress for which the Group has no intention to complete and use or sell them the impairment loss was recognised in the amount of their carrying value.

2014 impairment testing

As a result of impairment testing no loss in respect of property, plant and equipment was recognised.

2013 impairment testing

As a result of impairment testing no loss in respect of property, plant and equipment was recognised.