(9)Property, Plant and Equipment
Details of property, plant and equipment and movement in the consolidated balance sheet at 31 December 2017 and 2016 are included in Appendix IV, which forms an integral part of this note to the Consolidated Financial Statements.
Property, plant and development under construction at 31 December 2017 and 2016 mainly comprise investments made to extend the companies’ equipment and to increase their productive capacity.
In 2017, the Group has capitalized interests for a total amount of Euros 8,839 thousand (Euros 13,019 thousand in 2016)
a)Insurance
Group policy is to contract sufficient insurance coverage for the risk of damage to property, plant and equipment. At 31 December 2017 the Group has a combined insurance policy for all Group companies, which more than adequately covers the carrying amount of all the Group’s assets.
b)Losses on disposal of property, plant and equipment
Total losses incurred on disposals of property, plant and equipment for 2017 amount to Euros 1,468 thousand (Euros 4,021 thousand in 2016).
c)Assets under finance lease
The Group contracted the following types of property, plant and equipment under finance leases at 31 December 2016:
|
|
|
Thousands of Euros |
|
||||
|
|
|
Cost |
|
Accumulated |
|
Carrying amount |
|
|
Land and buildings |
|
2,213 |
|
(1,421 |
) |
792 |
|
|
Plant and machinery |
|
13,336 |
|
(4,784 |
) |
8,552 |
|
|
|
|
|
|
|
|
|
|
|
|
|
15,549 |
|
(6,205 |
) |
9,344 |
|
|
|
|
|
|
|
|
|
|
The Group has contracted the following types of property, plant and equipment under finance leases at 31 December 2017:
|
|
|
Thousands of Euros |
|
||||
|
|
|
Cost |
|
Accumulated |
|
Carrying amount |
|
|
Land and buildings |
|
2,545 |
|
(815 |
) |
1,730 |
|
|
Plant and machinery |
|
14,249 |
|
(6,564 |
) |
7,685 |
|
|
|
|
|
|
|
|
|
|
|
|
|
16,794 |
|
(7,379 |
) |
9,415 |
|
|
|
|
|
|
|
|
|
|
Details of minimum lease payments and the present value of finance lease liabilities, disclosed by maturity date, are detailed in note 20 (c).
d)Self – constructed property, plant and equipment
At 31 December 2017 the Group has recognized Euros 52,218 thousand as self -constructed property, plant and equipment (Euros 68,529 thousand at 31 December 2016).
e)Purchase commitments
At 31 December 2017 the Group has property, plant and equipment purchase commitments amounting to Euros 39,675 thousand (Euros 39,773 thousand at 31 December 2016).
f)Impairment
A group of assets forming part of the Hospital segment has been tested for impairment due to the decrease in the results of the segment and no impairment has been observed. The recoverable amount of the aforementioned assets is calculated based on the fair value less cost of disposal, using cash flow projections based on five-year financial budgets approved by management. Cash flows estimated as of the year in which stable growth has been reached by the assets are extrapolated using a pre-tax discount rate of 12.2% and a perpetual growth rate of 2% (10.3% and 2% respectively in fiscal year 2016).