17	PROPERTY, PLANT AND EQUIPMENT, NET

The movement in property, plant and equipment accounts and its related accumulated depreciation for the year ended December 31, 2015, 2016 and 2017 is as follows:


													Furniture and			Other			Replacement			In-transit			Work in
	Land			Buildings			Machinery			Vehicles			fixtures			equipment			units			units			progress			Total
At January 1, 2015
Cost		30,675			200,450			986,487			394,077			43,146			176,869			7,245			9,177			99,831			1,947,957
Accumulated depreciation and impairment		—			(35,479	)		(416,029	)		(201,815	)		(27,279	)		(120,333	)		(4	)		—			—			(800,939	)

Net carrying amount		30,675			164,971			570,458			192,262			15,867			56,536			7,241			9,177			99,831			1,147,018

Net initial carrying amount		30,675			164,971			570,458			192,262			15,867			56,536			7,241			9,177			99,831			1,147,018
Additions		—			9,021			105,575			86,923			12,684			22,802			—			16,018			44,933			297,956
CAM Brazil deconsolidation		—			(839	)		(1,462	)		(633	)		(70	)		—			—			—			—			(3,004	)
Reclassifications		—			36,180			32,389			9,300			1,245			7,272			10,529			(23,092	)		(73,823	)		—
Transfers to intangibles (Note 18)		—			—			68			—			—			—			—			—			(36,785	)		(36,717	)
Transfers to accounts receivable		—			(3,635	)		—			—			(777	)		(4,442	)		—			—			(5,168	)		(14,022	)
Deduction for sale of assets		(2,001	)		(1,235	)		(35,118	)		(42,464	)		(1,491	)		(7,979	)		—			—			(14,185	)		(104,473	)
Disposals – cost		—			(5,057	)		(10,224	)		(362	)		(2,299	)		(1,810	)		(2,326	)		(89	)		(1,206	)		(23,373	)
Depreciation charge		—			(11,780	)		(116,993	)		(54,545	)		(4,623	)		(13,141	)		—			—			—			(201,082	)
Discontinued operations		—			(1,818	)		—			(263	)		(533	)		(11,084	)		—			—			—			(13,698	)
Depreciation for sale deductions		—			1,003			23,907			32,566			799			7,751			—			—			—			66,026
Disposals – accumulated depreciation		—			3,060			4,373			323			503			1,331			—			—			—			9,590
Translations adjustments		(265	)		(306	)		(8,288	)		(2,221	)		(128	)		(506	)		—			(197	)		(553	)		(12,464	)

Net final carrying amount		28,409			189,565			564,685			220,886			21,177			56,730			15,444			1,817			13,044			1,111,757

At December 31, 2015
Cost		28,409			231,029			1,074,195			443,239			52,225			191,238			15,448			1,817			13,044			2,050,644
Accumulated depreciation and impairment		—			(41,464	)		(509,510	)		(222,353	)		(31,048	)		(134,508	)		(4	)		—			—			(938,887	)

Net carrying amount		28,409			189,565			564,685			220,886			21,177			56,730			15,444			1,817			13,044			1,111,757


													Furniture and			Other			Replacement			In-transit			Work in
	Land			Buildings			Machinery			Vehicles			fixtures			equipment			units			units			progress			Total
At January 1, 2016
Cost		28,409			231,029			1,074,195			443,239			52,225			191,238			15,448			1,817			13,044			2,050,644
Accumulated depreciation and impairment		—			(41,464	)		(509,510	)		(222,353	)		(31,048	)		(134,508	)		(4	)		—			—			(938,887	)

Net carrying amount		28,409			189,565			564,685			220,886			21,177			56,730			15,444			1,817			13,044			1,111,757

Net initial carrying amount		28,409			189,565			564,685			220,886			21,177			56,730			15,444			1,817			13,044			1,111,757
Additions		6,238			12,126			81,378			50,574			4,423			24,870			553			19,312			13,594			213,068
Adquisition of subsidiaries – Adexus (Note 33 a)		—			13,913			—			420			1,525			26,130			—			—			—			41,988
Reclassifications		—			588			1,927			(1,172	)		4,456			13,156			2,583			(17,349	)		(4,189	)		—
Transfers to inventories		2,941			—			—			—			—			—			—			—			—			2,941
Transfers to intangibles (Note 18)		—			—			—			—			—			—			—			—			(1,257	)		(1,257	)
Deduction for sale of assets		(5,256	)		(14,333	)		(60,374	)		(48,521	)		(1,724	)		(5,766	)		—			—			—			(135,974	)
Disposals – cost		—			(1,232	)		(15,149	)		(1,354	)		(1,579	)		(4,364	)		(661	)		(2	)		—			(24,341	)
Depreciation charge		—			(12,651	)		(104,638	)		(47,366	)		(6,947	)		(15,088	)		(5	)		—			—			(186,695	)
Impairment loss		—			(73	)		(5,190	)		(317	)		(3,301	)		(382	)		—			—			—			(9,263	)
Discontinued operations		—			(2,191	)		0			(675	)		(601	)		(13,039	)		—			—			—			(16,506	)
Depreciation for sale deductions		—			8,113			48,266			29,536			1,026			1,907			—			—			—			88,848
Disposals – accumulated depreciation		—			939			14,430			886			1,540			3,991			—			—			—			21,786
Translations adjustments		282			130			5,987			922			176			(344	)		—			—			94			7,247

Net final carrying amount		32,614			194,894			531,322			203,819			20,171			87,801			17,914			3,778			21,286			1,113,599

At December 31, 2016
Cost		32,614			241,150			1,088,229			443,641			59,593			246,102			17,923			3,778			21,286			2,154,316
Accumulated depreciation and impairment		—			(46,256	)		(556,907	)		(239,822	)		(39,422	)		(158,301	)		(9	)		—			—			(1,040,717	)

Net carrying amount		32,614			194,894			531,322			203,819			20,171			87,801			17,914			3,778			21,286			1,113,599


	Land			Buildings			Machinery			Vehicles			Furniture and fixtures			Other equipment			Replacement units			In-transit units			Work in progress			Total
At January 1, 2017
Cost		32,614			241,352			1,090,460			443,641			59,593			246,102			17,923			3,778			18,853			2,154,316
Accumulated depreciation and impairment		—			(46,256	)		(556,907	)		(239,822	)		(39,422	)		(158,301	)		(9	)		—			—			(1,040,717	)

Net carrying amount		32,614			195,096			533,553			203,819			20,171			87,801			17,914			3,778			18,853			1,113,599

Net initial carrying amount		32,614			195,096			533,553			203,819			20,171			87,801			17,914			3,778			18,853			1,113,599
Additions		157			2,724			48,207			36,594			11,607			36,179			925			22,877			13,178			172,448
Deconsolidation of GMD		(3,713	)		(26,109	)		—			(1,527	)		(2,153	)		(46,032	)		0			(3,903	)		(4	)		(-83,441	)
Reclassifications		0			1,969			12,459			2,888			609			6,579			4,076			(21,600	)		(6,980	)		—
Transfers to intangibles (Note 18)		—			—			2,119			724			—			—			—			(964	)		(2,048	)		(169	)
Deduction for sale of assets		(5,616	)		(51,736	)		(149,202	)		(92,079	)		(4,200	)		(5,270	)		—			—			—			(308,103	)
Disposals – cost		—			(1,869	)		(6,442	)		(7,941	)		(1,200	)		(12,592	)		—			(230	)		(3,606	)		(33,880	)
Depreciation charge		—			(12,469	)		(100,976	)		(45,457	)		(11,654	)		(26,928	)		—			—			—			(197,484	)
Impairment loss		—			—			(14,328	)		—			—			0			—			—			(352	)		(14,680	)
Depreciation for sale deductions		—			3,579			115,864			84,145			1,049			3,128			—			—			—			207,765
Disposals – accumulated depreciation		—			1,624			2,410			434			778			3,179			—			—			—			8,425
Translations adjustments		236			152			606			(350	)		(23	)		980			—			—			(346	)		1,255

Net final carrying amount		23,678			112,961			444,270			181,250			14,984			47,024			22,915			(42	)		18,695			865,735

At December 31, 2017
Cost		23,678			166,483			998,207			381,950			64,233			225,946			22,924			(42	)		19,047			1,902,426
Accumulated depreciation and impairment		—			(53,522	)		(553,937	)		(200,700	)		(49,249	)		(178,922	)		(9	)		—			-352			(1,036,691	)

Net carrying amount		23,678			112,961			444,270			181,250			14,984			47,024			22,915			(42	)		18,695			865,735

In 2016 and 2017 additions to the carrying amount correspond to the acquisition of fixed assets under finance leases or by direct acquisition.

The balance of work in progress at December 31, 2017 relates mainly to investments made by the subsidiary GMP S.A. for S/11 million (S/19 million at December 31, 2016) for the activities of oil drilling in order to increase the volume of exploitation of oil and gas. Additionally, the balance includes the construction work of Proyecto Hotel Larcomar for S/15.6 million (S/14.4 million in 2016).

In 2017 fixed asset sales amounted to S/127.2 million (S/70.5 million and S/55.8 million in 2016 and 2015, respectively) resulting in profits of S/26.9 million (profits of S/18.4 and S/17.4 million in 2016 and 2015, respectively) that are shown in the statement of income within “other income and expenses, net” (Note 29), the difference between the income proceeds from disposals of fixed assets and their profit are shown within “revenue from construction activities” and “gross profit”, respectively.

In September 2017, the Company signed a sale contract for the corporate building located in Miraflores with Volcomcapital Petit Thouars S.A.C. The sale was made in October 2017, the amount of the purchase-sale amount to US$20.5 million. This operation includes a 5-year lease period that can be extended up to 10 years as well as a purchase option on the building. The sale of the mentioned property generates a profit of US$3.5 million.

Depreciation of fixed assets and investment properties for the year is broken down in the statement of income as follows:


	2015			2016			2017
Cost of services and goods		186,661			177,699			178,209
Administrative expenses		16,711			11,317			13,224
(+) Depreciation GMD discontinued operation		—			—			8,361

Total depreciation related to property, plant and equipment		203,372			189,016			199,794
(-) Depreciation related to investment property		(2,290	)		(2,321	)		(2,310	)

Total depreciation related to property, plant and equipment		201,082			186,695			197,484

The amount of S/8.3 million corresponds to the depreciation recorded from January to May 2017 of the subsidiary GMD S.A. which was sold in June 2017.

In 2016, the Group determined indicators of impairment of items of property, plant and equipment relating to: i) early termination of the GSP concession in respect of Consorcio Constructor Ductos del Sur (CCDS) and ii) assets under stand-by status. Management calculated the recoverable amount of those assets as the fair value; fair value was determined taking into account appraisals performed by independent experts. The recognized impairment loss is mainly related to Consorcio Constructor Ductos del Sur (CCDS) for a total of S/4.1 million (Note 5.1-f), GyM for S/2.39 million and Stracon GyM S.A. for S/2.34 million, which are shown within “Expenses by nature” (Note 27).

At December 31, 2017 the Group has fully depreciated property, plant and equipment items that are still in use for S/154 million (S/151.6 million, at December 31, 2016).

The net carrying amount of machinery and equipment, vehicles and furniture and fixtures acquired under finance lease agreements is broken down as follows:

Financial Leasing


	At December 31,
	2015			2016			2017
Cost of acquisition		735,591			800,927			650,301
Accumulated depreciation		(327,465	)		(386,411	)		(351,447	)

Net carrying amount		408,126			414,516			298,854

Other financial liabilities are secured with items of property, plant and equipment for S/368.1 million (S/617.9 million in 2016).

Commitment for operating leases:

In relation to the sale lease contract for the corporate building located in Miraflores mentioned on the previous page, the Company has outstanding commitments for non-cancelable operating leases, with the following maturities:


	2017
Not later than 1 year		8,526
Within 2 to 5 years		35,161
Later than 5 years		46,451

		90,138