Financial statements

NOTE 6



PROPERTY, PLANT AND EQUIPMENT

The movements under this heading in the balance sheet in 2019 and key information affecting the heading are as follows:

(Amounts in euros) Opening balance at 01/01/2019 Additions Disposals Transfers Balance at 31/12/2019
Land 32.091.572 0 0 0 32.091.572
Buildings and constructions 18.902.310 0 0 0 18.902.310
Plant and equipment 237.835.671 5.563.657 -10.735.245 4.623.354 237.287.438
Tools 1.996.754 2.752 -49.364 1.950.142
Furniture 1.237.422 44.805 -4.932 1.277.295
Other Property Plant &Equipment 9.044.116 353.052 -383.593 112.916 9.126.491
PP&E under construction 1.763.333 3.862.406 -5.500 -4.736.270 883.968
Advances for property, plant & Equipment 306.864 0 -306.864 0 0
Total Cost 303.178.042 9.826.671 -11.485.498 0 301.519.215
Buildings and constructions -4.866.771 -626.011 0 0 -5.492.782
Plant and equipment -155.935.887 -19.009.252 10.211.286 0 -164.733.853
Tools -1.773.827 -65.374 49.364 0 -1.789.838
Furniture -1.072.647 -24.300 4.932 0 -1.092.015
Other Property Plant &Equipment -7.435.208 -661.422 383.583 0 -7.713.048
Total accumulated depreciation -171.084.340 -20.386.360 10.649.164 0 -180.821.536
Provision for impairment
Technical facilities 0 -566.741 0 0 -566.741
CARRYING AMOUNT 132.093.701 -11.126.430 -836.334 0 120.130.938

The main additions of property, plant and equipment correspond to the improvements to the IPTV platforms and the capitalisation of new television decoders as part of the Nova TV project launched in May 2019 and slated for completion during the first quarter of 2020. They also include the work to improve the radio network, mobile network and broadband network, along with projects to optimise the energy and air conditioning systems at the Massana technical centre and Nexus building, among others.

Derecognitions in 2019 primarily correspond to the investments in the SDH.ECI transport network and the switching stations that have been replaced, equipment and facilities in the Arans building that have been removed ahead of relocating the data centre to La Massana, and equipment related with the DTT service that fell into disuse in 2019.

This heading also includes derecognitions for devices on customers' premises that have been replaced as part of the Nova TV project.

The Impairment provision – Plant and equipment heading includes a provision of 566,741 euros to adjust the carrying amount of investments related with the Cloud Service Provider (CSP) project to their value in use.

The increase in depreciation of property, plant and equipment and amortisation of intangible assets versus 2018 is due to: the accelerated depreciation of a number of assets ahead of the first phase of the 5G roll-out at the end of 2021, the relocation of the Company's data centre in Arans to the La Massana data centre, and completion of the STB revamp, expected to be completed in the first quarter of 2020. The adjustment of the useful lives of these assets will give rise to an additional depreciation charge in 2019, 2020 or 2021 depending on each case.

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, SAU, 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. The carrying amount of the assets at the allocation date was as follows:

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

The breakdown of equipment and technical facilities at 31 December 2019 is as follows:

(Amounts in euros) Balance at 31/12/19 Accum. depreciation at 31/12/19 Deterioration 31/12/19 Net balance at 31/12/19
Plant and equipment in buildings 18.035.475 -12.495.232 5.540.243
Plant and equipment on third-party land 3.709.024 -3.019.446 689.577
Network 117.932.281 -85.265.707 32.666.574
Telephone booths 1.537.435 -1.418.460 118.975
Installed equipment 15.019.652 -10.418.150 4.601.503
Electrical lines 622.119 -565.585 56.533
Relay equipment 7.065.186 -6.621.010 444.176
Central installations 73.332.329 -44.924.845 -566.741 27.840.742
Alres infr. tècniques 33.938 -5.418 28.520
Total equipment and technical facilities 237.287.438 -164.733.853 -566.741 71.986.843

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, SA 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. The insurance policies which were valid at 31 December 2019 were adequate to cover the Company’s assets.