Property, Plant and Equipment, Net and Right-of-Use Assets

12 Months Ended

Dec. 31, 2019

Text block [abstract]

Property, Plant and Equipment, Net and Right-of-Use Assets

16 PROPERTY, PLANT AND EQUIPMENT, NET AND RIGHT-OF-USE ASSETS

16.1. PROPERTY, PLANT AND EQUIPMENT

The movement in property, plant and equipment accounts and its related accumulated depreciation for the year ended December 31, 2017, 2018 and 2019 is as follows:

	Land			Buildings			Machinery			Vehicles			Furniture and fixtures			Other equipment			Replacement and 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			21,701			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			21,692			18,853			1,113,599
Net initial carrying amount		32,614			195,096			533,553			203,819			20,171			87,801			21,692			18,853			1,113,599
Additions		157			2,724			48,207			36,594			11,607			36,179			23,802			13,178			172,448
Deconsolidation, net		(3,713	)		(26,109	)		—			(1,527	)		(2,153	)		(46,032	)		(3,903	)		(4	)		(83,441	)
Reclassifications, net		—			1,969			12,459			2,888			609			6,579			(17,524	)		(6,980	)		—
Transfers to intangibles (Note 17)		—			—			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, net		—			(245	)		(4,032	)		(7,507	)		(422	)		(9,413	)		(230	)		(3,606	)		(25,455	)
Depreciation charge		—			(12,469	)		(100,976	)		(45,457	)		(11,654	)		(26,928	)		—			—			(197,484	)
Impairment loss		—			—			(14,328	)		—			—			—			—			(352	)		(14,680	)
Depreciation for sale deductions		—			3,579			115,864			84,145			1,049			3,128			—			—			207,765
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			22,873			18,695			865,735
At December 31, 2017
Cost		23,678			157,949			998,207			380,724			62,435			180,409			22,882			19,047			1,845,331
Accumulated depreciation and impairment		—			(44,988	)		(553,937	)		(199,474	)		(47,451	)		(133,385	)		(9	)		(352	)		(979,596	)
Net carrying amount		23,678			112,961			444,270			181,250			14,984			47,024			22,873			18,695			865,735
At January 1, 2018
Cost		23,678			157,949			998,207			380,724			62,435			180,409			22,882			19,047			1,845,331
Accumulated depreciation and impairment		—			(44,988	)		(553,937	)		(199,474	)		(47,451	)		(133,385	)		(9	)		(352	)		(979,596	)
Net carrying amount		23,678			112,961			444,270			181,250			14,984			47,024			22,873			18,695			865,735
Net initial carrying amount		23,678			112,961			444,270			181,250			14,984			47,024			22,873			18,695			865,735
Additions		—			13,216			11,318			9,377			2,145			14,122			5,577			27,431			83,186
Desconsolidation, net		(3,183	)		(33,989	)		(108,993	)		(110,859	)		(1,539	)		(32,878	)		—			(715	)		(292,156	)
Reclassifications		—			17,129			16,626			(1,415	)		(1,430	)		75			(10,577	)		(20,408	)		—
Deduction for sale of assets		—			(3,527	)		(55,567	)		(32,399	)		(2,164	)		(2,200	)		(124	)		—			(95,981	)
Disposals, net		—			(9,723	)		(2,607	)		(1,418	)		(292	)		(461	)		—			(118	)		(14,619	)
Depreciation charge		—			(14,257	)		(67,430	)		(19,391	)		(3,954	)		(18,068	)		—			—			(123,100	)
Impairment loss		—			—			(5,664	)		—			—			—			—			—			(5,664	)
Depreciation for sale deductions		—			1,189			37,452			14,868			1,813			1,702			—			—			57,024
Translations adjustments		(286	)		3,383			(3,310	)		(788	)		(134	)		(2,415	)		—			(321	)		(3,871	)
Net final carrying amount		20,209			86,382			266,095			39,225			9,429			6,901			17,749			24,564			470,554
At December 31, 2018
Cost		20,209			112,548			694,284			83,345			57,222			106,068			17,758			24,916			1,116,350
Accumulated depreciation and impairment		—			(26,166	)		(428,189	)		(44,120	)		(47,793	)		(99,167	)		(9	)		(352	)		(645,796	)
Net carrying amount		20,209			86,382			266,095			39,225			9,429			6,901			17,749			24,564			470,554
At January 1, 2019
Cost		20,209			112,548			694,284			83,345			57,222			106,068			17,758			24,916			1,116,350
Accumulated depreciation and impairment		—			(26,166	)		(428,189	)		(44,120	)		(47,793	)		(99,167	)		(9	)		(352	)		(645,796	)
Net carrying amount		20,209			86,382			266,095			39,225			9,429			6,901			17,749			24,564			470,554
Net initial carrying amount		20,209			86,382			266,095			39,225			9,429			6,901			17,749			24,564			470,554
Additions		290			396			23,011			861			687			8,693			7,036			39,584			80,558
Transfer to investment property (i)		(273	)		(1,187	)		—			—			—			—			—			—			(1,460	)
Reclassifications		—			1,544			40,840			1,033			118			2,054			(14,163	)		(31,426	)		—
Deduction for sale of assets		—			(78	)		(22,885	)		(9,531	)		(133	)		(2,789	)		(9	)		—			(35,425	)
Disposals, net		—			—			(316	)		(101	)		(187	)		(229	)		—			(804	)		(1,637	)
Depreciation charge		—			(5,992	)		(48,035	)		(9,782	)		(2,092	)		(6,137	)		—			—			(72,038	)
Impairment loss		—			—			(4,232	)		—			—			—			—			(15,786	)		(20,018	)
Depreciation for sale deductions		—			78			20,597			5,232			86			2,717			—			—			28,710
Translations adjustments		(525	)		(360	)		(3,719	)		(726	)		(13	)		(31	)		—			—			(5,374	)
Net final carrying amount		19,701			80,783			271,356			26,211			7,895			11,179			10,613			16,132			443,870
At December 31, 2019
Cost		19,974			113,339			726,173			74,434			55,710			111,696			10,624			32,270			1,144,220
Accumulated depreciation and impairment		(273	)		(32,556	)		(454,817	)		(48,223	)		(47,815	)		(100,517	)		(11	)		(16,138	)		(700,350	)
Net carrying amount		19,701			80,783			271,356			26,211			7,895			11,179			10,613			16,132			443,870

(i) During 2019, a property owned by Morelco S.A.S. (subsidiary of GyM S.A) was transferred to investment properties to the leased to a third party.

In 2017, 2018 and 2019, additions to cost correspond to acquisitions of fixed assets made under financial leases or direct purchases.

The balance of work in progress as of December 31, 2019, is related to investments made by the subsidiary GMP S.A. for S/15.2 million (S/17.3 million as of December 31, 2018 and S/11.0 million as of December 31, 2017) for drilling activities to increase the exploitation of oil and gas. In 2018, the balance included the construction works of the Larcomar Hotel Project for S/15.8 million (S/15.6 million in 2017).

In 2019 the sale of fixed assets amounted to S/12.7 million (S/31.9 million in 2018 and S/127.2 million in 2017), generating a gain of S/6.1 million (loss of S/7.1 million in 2018 and gain of S/26.9 million in 2017), which is shown in the statement of income under the caption “other income and expenses, net” (Note 28). The difference of income from the sale of fixed assets and the gain generated are presented under the caption “income from construction activities” and in “gross profit”, respectively.

Depreciation of property, plant and equipment and investment property is distributed in the income statement as follows:

	2017			2018			2019
Cost of services and goods (Note 26)		103,566			81,199			95,445
Administrative expenses (Note 26)		5,776			5,135			1,907
(+) Depreciation discontinued operations		90,452			39,085			—
Total depreciation related to property, plant and equipment and investment property		199,794			125,419			97,352
(-) Depreciation related to investment property		(2,310	)		(2,319	)		(2,356	)
(-) Depreciation related to right-of-use assets		—			—			(22,958	)
Total depreciation of property, plant and equipment		197,484			123,100			72,038

At 31 December 2019, the Group had fully depreciated assets in use of S/319.2 million (S/424.5 million in 2018 and S/154 million in 2017).

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

	At December 31,
	2017			2018			2019
Cost of acquisition		650,301			86,881			67,310
Accumulated depreciation		(351,447	)		(38,026	)		(44,671	)
Net carrying amount		298,854			48,855			22,639

Other financial liabilities are secured by property, plant and equipment for S/111.9 million (S/162.9 million in 2018 and S/368.1 million in 2017).

16.2. RIGHT-OF-USE ASSETS

As of December 31, 2019, the Group recognized assets and liabilities for right-of-use, as shown in the following table:

	Buildings			Machinery and equipments			Vehicles			Total
At January 1, 2019
Additions		63,479			18,597			19,669			101,745
Depreciation charge		(7,541	)		(6,899	)		(8,518	)		(22,958	)
Translations adjustments		26			—			—			26
Net final carrying amount		55,964			11,698			11,151			78,813
At December 31, 2019
Cost		63,505			18,597			19,669			101,771
Accumulated depreciation		(7,541	)		(6,899	)		(8,518	)		(22,958	)
Net carrying amount		55,964			11,698			11,151			78,813

The expense for depreciation of right-of-use assets for the year ended December 31, 2019 has been distributed in the following items of the consolidated statement of income:

	2019
Cost of services and goods		20,011
Administrative expenses		2,947
		22,958

The costs related to the leasing of machinery and equipment for which the Group applied the exceptions described in paragraph 5 of IFRS 16 are the following:

Leases under 12 months: S/167.3 million.

Leases of low value assets: S/7 million.

Likewise, leases whose payments are entirely variable, which depend on their future performance or use, were excluded, during the year 2019 the expenditure was: S/0.6 million.