Financial statements

NOTE 6



PROPERTY, PLANT AND EQUIPMENT

The movements under this heading in the balance sheet in 2017 and key information affecting the heading are as follows:

(Amounts in euros) Opening balance at 01/01/2017 Additions Disposals Transfers Balance at 31/12/17
Land 30.089.860 0 0 269.599 30.359.460
Buildings and constructions 20.142.413 0 0 0 20.142.413
Plant and equipment 251.799.160 5.775.140 -29.931.698 9.781.895 237.424.497
Tools 1.968.795 95.400 -87.307 0 1.976.888
Furniture 1.458.297 11.362 -6.480 0 1.463.180
Other PP&E 8.447.736 817.188 -157.394 0 9.107.530
PP&E under construction 2.213.374 11.185.295 0 -10.051.494 3.347.175
Total Cost 316.119.636 17.884.385 -30.182.878 0 303.821.142
Buildings and constructions -3.581.967 -685.225 0 0 -4.265.192
Plant and equipment -156.552.656 -20.099.659 28.340.564 0 -148.311.751
Tools -1.842.364 -75.568 87.307 0 -1.830.625
Furniture -1.265.715 -38.346 6.480 0 -1.297.581
Other PP&E -6.602.487 -772.970 157.394 0 -7.218.063
Total accumulated depreciation -169.845.190 -21.669.766 28.591.744 0 -162.923.212
CARRYING AMOUNT 146.274.446 -3.785.381 -1.591.134 0 140.897.930

The main investments in property, plant and equipment correspond to the new FTTH access network.

The Company also made major investments in increasing the capacity of the mobile network, further changes to the IMS–XVC networks (telephony and multimedia services over IP) and SMS and voicemail boxes, and in improving and extending the IPTV platform.

The assets contributed to the Company under the Decree, dated 17 June 2015, on the allocation and contribution of assets, rights and obligations to the government-owned company Andorra Telecom, S.A.U., effective for accounting purposes from 1 January 2015, include the following national assets (Annexe II of the Decree), which were valued by an independent expert on 8 June 2015.

PARISH DESCRIPTION Euros
Canillo Land and Central Office, Ransol 438.806
Encamp Land and Central Office, Encamp 703.726
Ordino Land and Central Office, Arans 1.767.919
La Massana Land, Prat del Molí, and Central Office 1 and 2, La Massana 2.617.678
Andorra la Vella Land and Building, Av. Meritxell 112 16.722.883
Andorra la Vella Land and Building, La Comella 2.386.347
Andorra la Vella Land and Buildings, Old Central Barracks of the Fire Prevention and Firefighting Service 8.895.144
Andorra la Vella Land and Building, Nexus Santa Coloma 15.570.174
Sant Julià de Lória Land and Central Office, Sant Julià 1.133.383
TOTAL VALUE ALLOCATED ASSETS 50.236.060

On 31 December 2017 the certified cost to date of demolishing the building at no. 112 Avinguda Meritxell was capitalised and added to the cost of the land, in accordance with the applicable accounting standards.

The demolition works are still continuing and are expected to be completed in late February 2018.

The breakdown of equipment and technical facilities at 31 December 2017 is as follows:

(Amounts in euros) Balance at 31/12/17 Accum. depreciation at 31/12/17 Net balance at 31/12/17
Plant and equipment in buildings 16.793.562 10.449.745 6.343.817
Plant and equipment on third-party land 3.648.344 2.769.442 878.903
Network 114.230.387 75.381.704 38.848.682
Telephone booths 1.531.781 1.313.213 218.568
Installed equipment 15.312.713 9.488.656 5.824.057
Electrical lines 622.119 528.653 93.466
Relay equipment 7.257.675 6.539.577 718.098
Central installations 78.027.917 41.840.762 36.187.155
Total equipment and technical facilities 237.424.497 148.311.751 89.112.746

The Company’s bylaws state that its corporate purpose includes the management and operation of telecommunications services and the management of the national radio and television networks. As the Company is unilaterally responsible for the broadcast of radio and television signals, it receives no remuneration for the management of said networks. The Law on public radio transmissions and the creation of the government-owned company RTVA, S.A. granted the Government powers to allocate the assets needed for the operation of radio and television services. This allocation did not make any reference to the assets held by the Company.

Installed equipment recorded under Plant and equipment includes items owned by the Company but in the possession of third parties who are customers of the Company.

It is the Company’s policy to take out insurance against any risks that may affect its property, plant and equipment. At the end of the 2017 reporting period all such risks were fully covered.