Note 6 – Property, Plant and Equipment Audited

 

 

 

Commitments for capital expenditure in property, plant and equipment amounted to CHF 165 million at year-end 2016 (2015: CHF 72 million), mainly related to capital expenditures at the US sites in Portsmouth and Houston as well as for the Swiss-based operations. The carrying amount of property, plant and equipment under finance lease contracts at year-end 2016 amounted to CHF 5 million (2015: CHF 5 million). Depreciation relating to property, plant and equipment under finance lease amounted to CHF 0.3 million (2015: CHF 0.2 million). No assets were pledged for security of own liabilities in 2016 and 2015. The Group’s obligation under finance leases is secured by the lessors’ title to the leased assets.

Leases

1. Lessee

 

Lonza leases a number of vehicles, buildings, warehouses, factory and office facilities under operating leases. These leases run for periods between one and 20 years, all with an option to renew the lease after that date. None of the leases include contingent rentals.

During the year ended 31 December 2016, CHF 19 million (2015: CHF 16 million) was recognized as an expense in the consolidated income statement in respect of operating leases.

The land and building elements of a lease of land and buildings were considered separately for the purpose of lease classification as outlined in IAS 17.

2. Lessor

There is an operating lease for which Lonza acts as lessor. This lease falls within the scope of IAS 17 and IFRIC 4 guidance. It consists primarily of a biopharmaceutical manufacturing facility in Visp. The future minimum lease payments under non-cancelable operating leases are zero, because the lease payments are pre-financed by the customer.