Note 6 – Property, Plant and Equipment Audited

 


Commitments for capital expenditure in property, plant and equipment amounted to CHF 107 million at year-end 2017 (2016: CHF 165 million), mainly related to capital expenditures at the US sites as well as for the Swiss-based operations. The carrying amount of property, plant and equipment under finance lease contracts at year-end 2017 amounted to CHF 9 million (2016: CHF 5 million). Depreciation relating to property, plant and equipment under finance lease amounted to CHF 0.6 million (2016: CHF 0.3 million). No assets were pledged for security of own liabilities in 2017 and 2016. The Group’s obligation under finance leases is secured by the lessors’ title to the leased assets.

Leases

1. Lessee

million CHF 2017 2016
     

Finance lease liabilities – minimum lease payments

   
Not later than 1 year 2 0
Later than 1 year and not later than 5 years 6 3
Later than 5 years 9 8
Total future minimum finance lease payments 17 11
Future finance charges on finance lease payments (5) (5)
Present value of minimum finance lease payments 12 6
     

Present value of finance lease liabilities

   
Not later than 1 year 1 0
Later than 1 year and not later than 5 years 4 1
Later than 5 years 7 5
Present value of minimum finance lease payments 12 6
     

Operating lease liabilities – minimum lease payments

   
Not later than 1 year 36 15
Later than 1 year and not later than 5 years 75 38
Later than 5 years 59 42
Total future minimum operating lease payments 170 95

 

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 2017, CHF 29 million (2016: CHF 19 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.