a51029341.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN ISSUER

PURSUANT TO RULE 13a-16 OR 15b-16 OF

THE SECURITIES EXCHANGE ACT OF 1934

For the month of January 2015

Commission File Number 001-35591

GRAÑA Y MONTERO S.A.A.

(Exact name of registrant as specified in its charter)

GRAÑA Y MONTERO GROUP

(Translation of registrant’s name into English)

Republic of Peru

(Jurisdiction of incorporation or organization)

Avenida Paseo de la República 4667, Lima 34,

Surquillo, Lima

Peru

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F ___X____ Form 40-F _______

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [ ]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [ ]

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes _______ No ___X____

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): Not applicable.

____________________

/s/Dennis Gray Febres

Stock Market Representative

Graña y Montero S.A.A.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

GRAÑA Y MONTERO S.A.A.

By: /s/ DENNIS GRAY FEBRES

Name: Dennis Gray Febres

Title: Stock Market Representative

January 29, 2015

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AT DECEMBER 31, 2013 AND 2014 AND FOR THE PERIOD ENDED IN THIS DATE

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AT DECEMBER 31, 2013 AND 2014 AND FOR THE PERIOD ENDED IN THIS DATE

CONTENTS

Condensed Interim Consolidated Statement of Financial Position

Condensed Interim Consolidated Income Statement

Condensed Interim Consolidated Statement of Comprehensive Income

Condensed Interim Consolidated Statement of Shareholders’ Equity

Condensed Interim Consolidated Statement of Cash Flows

Notes to the Condensed Interim Consolidated Financial Statements

S/. = New Peruvian Sol

US$ = United States dollar

(All amounts are expressed in thousands of S/. unless otherwise stated)

UNAUDITED

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AT DECEMBER 31, 2013 (AUDITED) AND AT DECEMBER 31, 2014 (UNAUDITED)

ASSETS						LIABILITIES AND EQUITY
		At		At				At		At
		December 31,		December 31,				December 31,		December 31,
	Note	2013		2014			Note	2013		2014

Current assets						Current liabilities
Cash and cash equivalents			959,415		818,402	Borrowings	12		486,119		1,420,363
Financial assets available for sale			-		7,105	Trade accounts payable			991,397		1,183,223
Trade accounts receivables			521,872		1,100,539	Accounts payable to related parties	9		25,585		83,027
Outstanding work in progress			971,743		1,157,164	Current taxes			159,234		206,950
Accounts receivable from related parties	9		83,850		99,061	Other accounts payable			745,094		1,016,309
Other accounts receivable			556,696		578,515	Other provisions	13		8,895		11,441
Inventories			762,797		833,570	Total current liabilities			2,416,324		3,921,313
Prepaid expenses			25,686		26,444
Non-current assets classified as held for sale			21,474		14,457	Non-current liabilities
Total current assets			3,903,533		4,635,257	Borrowings	12		309,703		328,007
						Long-term trade accounts payable			2,157		3,779
Non-current assets						Other long-term accounts payable			205,396		132,917
Long-term trade accounts receivable			591,917		579,955	Other provisions	13		43,418		48,089
Long-term outstanding work in progress			-		35,971	Derivative financial instruments			3,911		2,999
Other long-term accounts receivable			38,151		44,553	Deferred income tax liability			138,554		78,993
Available-for-sale financial assets	8		88,333		93,144	Total non-current liabilities			703,139		594,784
Investments in associates and joint ventures	10		87,967		229,563	Total liabilities			3,119,463		4,516,097
Investment property			36,945		36,244
Property, machinery and equipment	11		952,906		1,146,392	Equity	14
Intangible assets	11		480,885		865,152	Capital			660,054		660,054
Deferred income tax asset			135,521		137,041	Legal reserve			111,657		132,011
Prepaid expenses			-		9,478	Premium for share issuance			1,027,533		899,312
Total non-current assets			2,412,625		3,177,493	Other comprehensive income			18,423		(6,385	)
						Retained earnings			947,766		1,116,102
						Equity attributable to controlling interest in the Company			2,765,433		2,801,094
						Non-controlling interest			431,262		495,559
						Total equity			3,196,695		3,296,653
			6,316,158		7,812,750				6,316,158		7,812,750

The accompanying notes on pages 7 to 24 are an integral part of the consolidated financial statements.

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(All amounts are expressed in thousands of S/. unless otherwise stated)

UNAUDITED

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED STATEMENT OF INCOME

		For the period
		ended December 31,
	Note	2013			2014


Revenues from construction activities			3,820,393			4,825,832
Revenues from services provided			1,748,127			1,835,973
Revenue from real estate and sale of goods			398,980			346,875
			5,967,500			7,008,680

Cost of construction activities			(3,354,420	)		(4,336,501	)
Cost of services provided			(1,349,850	)		(1,489,736	)
Cost of real estate and goods sold			(259,108	)		(231,150	)
	15		(4,963,378	)		(6,057,387	)
Gross profit			1,004,122			951,293

Administrative expenses	15		(361,792	)		(429,439	)
Other income and expenses			26,034			17,581
Gain (loss) from the sale of investments			5,722			-
Other gains, net			(733	)		(80	)
Operating profit			673,353			539,355

Financial expenses			(583,452	)		(460,149	)
Financial income			469,834			368,796
Dividends received			1,170			9,350
Share of the profit or loss in associates and joint
ventures under the equity method of accounting			33,562			53,445
Profit before income tax			594,467			510,797
Income tax	16		(182,323	)		(149,674	)
Profit for the period			412,144			361,123

Profit attributable to:
Owners of the Company			320,016			299,655
Non-controlling interest			92,128			61,468
			412,144			361,123

Earnings per share from continuing operations
attributable to owners of the Company during
the twelve-month period ended			0.485			0.454

Weighted average number of shares in issue
at S/.1.00 each, at December 31,			660,054			660,054

The accompanying notes on pages 7 to 24 are an integral part of the consolidated financial statements.

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(All amounts are expressed in thousands of S/. unless otherwise stated)

UNAUDITED

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

	For the period
	ended December 31,
	2013			2014


Profit for the period		412,144			361,123
Other comprehensive income:
Items that will not be reclassified to profit or loss
Adjustment for actuarial gains and losses, net of tax		(6,121	)		1,549

Items that may be subsequently reclassified to profit or loss
Cash flow hedge, net of tax		3,733			568
Foreign currency translation adjustment, net of tax		(1,071	)		(20,943	)
Change in value of available-for-sale financial assets		19,060			2,084
Exchange difference of investments		-			(12,794	)
		21,722			(31,085	)
Other comprenhensive income for the period, net of tax		15,601			(29,536	)
Total comprehensive income for the period		427,745			331,587

Comprehensive income attributable to:
Controlling interest in the Company		337,564			276,009
Non-controlling interest		90,181			55,578
		427,745			331,587

The accompanying notes on pages 7 to 24 are an integral part of the consolidated financial statements.

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(All amounts are expressed in thousands of S/. unless otherwise stated)

UNAUDITED

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED STATEMENT OF CHANGES IN NET SHAREHOLDERS' EQUITY

FOR THE PERIODO ENDED DECEMBER 31, 2013 AND DECEMBER 31, 2014



		Attributable to the controlling interests of the Company
	Number of shares		Legal	Premium for issuance		Other comprehensive		Retained				Non-controlling
	In thousands	Capital	reserve	of shares		income		earnings		Total		interest		Total


Balances as of January 1, 2013	558,284	558,284	107,011	6,656		(3,716	)	723,972		1,392,207		391,034		1,783,241
Profit for the period	-	-	-	-		-		320,016		320,016		92,128		412,144
Cash flow hedge	-	-	-	-		3,546		-		3,546		187		3,733
Adjustment for actuarial gains and losses	-	-	-	-		-		(4,591	)	(4,591	)	(1,530	)	(6,121	)
Foreign currency translation adjustment	-	-	-	-		(467	)	-		(467	)	(604	)	(1,071	)
Change in value of available-for-sale financial assets						19,060		-		19,060		-		19,060
Comprehensive income of the period	-	-	-	-		22,139		315,425		337,564		90,181		427,745
Transactions with shareholders:
- Transfer to legal reserve	-	-	4,646	-		-		(4,646	)	-		-		-
- Dividend distribution	-	-	-	-		-		(86,985	)	(86,985	)	(51,794	)	(138,779	)
- Issuance of shares	101,770	101,770	-	1,055,488		-		-		1,157,258		-		1,157,258
- Contributions of non-controlling shareholders	-	-	-	-		-		-		-		34,774		34,774
- Additional acquisition of non-controlling	-	-	-	(34,611	)	-		-		(34,611	)	(29,257	)	(63,868	)
- Deconsolidation of subsidiaries	-	-	-	-		-		-		-		(19,377	)	(19,377	)
- Purchase of subsidiaries	-	-	-	-		-		-		-		15,701		15,701
Total transactions with shareholders	101,770	101,770	4,646	1,020,877		-		(91,631	)	1,035,662		(49,953	)	985,709
Balances as of December 31, 2013	660,054	660,054	111,657	1,027,533		18,423		947,766		2,765,433		431,262		3,196,695


Balances as of January 1, 2014	660,054	660,054	111,657	1,027,533		18,423		947,766		2,765,433		431,262		3,196,695
Profit for the period	-	-	-	-		-		299,655		299,655		61,468		361,123
Cash flow hedge	-	-	-	-		540		-		540		28		568
Adjustment for actuarial gains and losses	-	-	-	-		-		1,162		1,162		387		1,549
Foreign currency translation adjustment	-	-	-	-		(14,871	)	-		(14,871	)	(6,072	)	(20,943	)
Change in value of available-for-sale financial assets						2,084		-		2,084		-		2,084
Exchange difference of investments						(12,561	)	-		(12,561	)	(233	)	(12,794	)
Comprehensive income of the period	-	-	-	-		(24,808	)	300,817		276,009		55,578		331,587
Transactions with shareholders:
- Transfer to legal reserve	-	-	20,354	-		-		(20,354	)	-		-		-
- Dividend distribution	-	-	-	-		-		(112,127	)	(112,127	)	(64,496	)	(176,623	)
- Contributions of non-controlling shareholders	-	-	-	-		-		-		-		56,535		56,535
- Additional acquisition of non-controlling	-	-	-	(128,221	)	-		-		(128,221	)	(50,109	)	(178,330	)
- Returns additional capital from non-controlling interests	-	-	-	-		-		-		-		(4,240	)	(4,240	)
- Sale of non-controlling Chile SPA. In VyV DSD	-	-	-	-		-		-		-		1,627		1,627
- Desconsolidation Concar	-	-	-	-		-		-		-		2,284		2,284
- Purchase of subsidiaries	-	-	-	-		-		-		-		67,118		67,118
Total transactions with shareholders	-	-	20,354	(128,221	)	-		(132,481	)	(240,348	)	8,719		(231,629	)
Balances as of December 31, 2014	660,054	660,054	132,011	899,312		(6,385	)	1,116,102		2,801,094		495,559		3,296,653

The accompanying notes on pages 7 to 24 are an integral part of the consolidated financial statements.

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(All amounts are expressed in thousands of S/. unless otherwise stated)

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES


CONDENSED INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS



		For the year ended
		December 31,
	Note	2013			2014

OPERATING ACTIVITIES
Profit before income tax			594,467			510,797
Adjustments to profit not affecting cash flows from
operating activities:
Depreciation	15		181,479			185,309
Amortization of other assets	15		78,387			74,730
Impairment of inventory			2,239			218
Impairment of accounts receivable			110			-
Impairment of other assets			774			-
Provisions			15,084			15,127
Share of the profit and loss in associates
under the equity method of accounting			(33,562	)		(53,445	)
Reversal of impairment			-			(1,169	)
Reversal of provisions			(14,556	)		(20,446	)
Profit on sale of property, plant and equipment			(734	)		(4,659	)
Profit on sale of investments in associates			(5,722	)		-
Net variations in assets and liabilities:
Decrease in trade accounts receivable			(783,965	)		(541,911	)
Decrease in other accounts receivable			(33,606	)		(26,330	)
Decrease in other accounts receivable from related parties			(34,089	)		(15,291	)
Decrease in inventories			(21,071	)		(52,105	)
Increase in pre-paid expenses and other assets			(539	)		(2,032	)
Increase in trade accounts payable			56,836			3,445
Increase (decrease) in other accounts payable			(145,380	)		66,494
Increase in other accounts payable to related parties			(14,677	)		58,342
Decrease in other provisions			(16,269	)		(7,208	)
Payments for intangible purchase - Concessions			(2,329	)		(82,698	)
Payment of income tax			(190,556	)		(154,134	)
Net cash provided by (applied to) operating activities			(367,679	)		(46,968	)

INVESTING ACTIVITIES
Sale of investment in associates			6,800			-
Sale of property, machinery and equipment			15,861			43,015
Dividends received			4,688			36,718
Payment for purchase of available-for-sale investment			(56,100	)		-
Payment for purchase of property investments			(2,974	)		(1,450	)
Payments for intangible purchase			(22,375	)		(60,846	)
Payments for investments purchase			-			(129,685	)
Direct cash inflow (outflow) from acquisition of subsidiaries			(88,342	)		(169,869	)
Payments for fixed asset purchase			(197,553	)		(265,989	)
Net cash applied to investing activities			(339,995	)		(548,105	)

FINANCING ACTIVITIES
Loans received			1,351,964			2,853,304
Amortization of loans received			(1,378,359	)		(2,053,422	)
Interest payment			(61,013	)		(46,411	)
Dividends paid to owners of the parent			(86,986	)		(112,127	)
Dividends paid to non-controlling interest			(51,794	)		(60,424	)
Cash received (contribution return) to non-controlling shareholders			34,774			52,295
Acquisition or sale of interest in a subsidiary of non-controlling shareholders			(63,868	)		(176,703	)
Issuance of shares, net of related expenses			1,147,418			-
Net cash (applied to) provided by financing activities			892,136			456,511
(Net decrease) net increase in cash			184,463			(138,562	)
Cash decrease in deconsolidation			(5,162	)		(2,451	)
Cash and cash equivalents at the beginning of the year			780,114			959,415
Cash and cash equivalents at the end of the year			959,415			818,402

NON-CASH TRANSACTIONS:
Debt capitalization			7,989			-
Acquisition of assets through finance leases			43,812			160,190
Adjustment for deconsolidation			(19,943	)		2,284
Change in fair vaue of available-for-sale financial asset			19,060			3,367


The accompanying notes on pages 7 to 24 are an integral part of the consolidated financial statements.

- 6 -

(All amounts are expressed in thousands of S/. unless otherwise stated)

UNAUDITED

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AT DECEMBER 31, 2013 AND 2014 (UNAUDITED), AND AT DECEMBER 31, 2013 (AUDITED)

1	GENERAL INFORMATION

The Company is the parent company of the Graña y Montero Group (hereinafter the Group) and its principal activity is the holding of investments in the different companies of the Group. Additionally, the Company provides services of general management, financial management, commercial management, legal advisory and human resources management to Group companies; it is also engaged in the leasing of offices to Group companies and third parties.

The Group is a conglomerate of companies with operations including different business activities, of which the most significant are engineering and construction, infrastructure (public concession operation), real estate businesses and technology services.

On December 12 2014, the company has been awarded the “Buena Pro” of the license contracts for 30 years for Block III and IV of Perupetro located in the Talara basin, in the region of Piura. This contract requires us to drill 230 development wells in Block III and 330 development wells in Block IV in a period of 10 years, representing an estimated total investment of US$ 430 million for both blocks. The start of operations of both blocks is scheduled for April 2015, when a production of around 1,700 barrels per day is expected; while the commitment to begin drilling becomes effective one year after the start of operations.

These condensed interim consolidated financial statements as of December 31, 2014 have been prepared and authorized for issuance by the Chief Financial Officer on January 29, 2014.

2	BASIS OF PREPARATION

These condensed interim consolidated financial statements for the period ended December 31, 2014 have been prepared in accordance with (IAS 34) “Interim financial reporting”. The condensed interim consolidated financial statements should be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2013, which have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

3	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting policies used in the preparation of these interim condensed consolidated financial statements are consistent with those applied in the preparation of the year-end financial statements at December 31, 2013

4	FINANCIAL RISK MANAGEMENT

4.1 Financial risk factors

The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, price risk, fair value interest rate risk and cash flow interest rate risk), credit risk and liquidity risk.

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(All amounts are expressed in thousands of S/. unless otherwise stated)

UNAUDITED

The condensed interim consolidated financial statements do not include all financial risk management information and disclosures required in the annual financial statements; these should be read in conjunction with the Group’s annual financial statements as of December 31, 2013. There have been no changes since year-end in the risk management department of the Group or in any risk management policies.

4.1.1 Market risk –

Compared to year end, no new material market risk hedging arrangements have occurred.

4.1.2 Credit risk –

Compared to year end, the Group has no exposure to any new relevant credit risk.

4.1.3 Liquidity risk -

Compared to year end, no major changes in undiscounted contractual cash flows have occurred, except for changes in the structure of the Group’s liabilities, resulting from an increase in the short-term debt, mainly for working capital.

The following table categorizes the Group’s financial liabilities into relevant maturity groupings based on the remaining period from the date of the statement of financial position to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows:

	Less than 1 year		From 1 to 2 years		From 2 to 5 years		Over 5 years		Total
As of December 31, 2013
Borrowing (except for
finance leases)		371,302		118,347		64,698		-		554,347
Finance leases liabilities		115,698		82,492		87,829		22,912		308,931
Trade accounts payable		991,397		2,157		-		-		993,554
Accounts payable to related parties		25,585		-		-		-		25,585
Other accounts payable		215,413		28,745		5,197		2,354		251,709
Trading and net settled derivative financial instruments
(interest rate swaps)		1,773		2,138		-		-		3,911
		1,721,168		233,879		157,724		25,266		2,138,037
As of December 31, 2014
Borrowing (except for
finance leases)		1,314,733		89,896		43,091		-		1,447,720
Finance leases liabilities		137,301		90,645		122,378		11,224		361,548
Trade accounts payable		1,183,223		3,779		-		-		1,187,002
Accounts payable to related parties		83,027		-		-		-		83,027
Other accounts payable		555,149		38,887		12,961		1,249		608,246
Trading and net settled derivative
financial instruments
(interest rate swaps)		772		2,227		-		-		2,999
		3,274,205		225,434		178,430		12,473		3,690,542

4.2 Capital management -

The Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including current and non-current borrowings), less cash and cash equivalents. Total capital is calculated as total ‘equity’ as shown in the consolidated statement of financial position plus net debt.

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(All amounts are expressed in thousands of S/. unless otherwise stated)

UNAUDITED

As of December 31, 2013, no gearing ratio was part of the analysis because cash surpluses were higher than financial obligations and equity had not been used to secure compliance with financial obligations as it is shown in the table below. As of December 31, 2014, due to the fact that the Company has acquired significant borrowings, the Company’s strategy was to maintain a gearing ratio between 0.03 and 1.00.

	December 31,			December 31,
	2013			2014

Total borrowing		795,822			1,748,370
Less: Cash and cash equivalents		( 959,415	)		(818,402	)
Net debt		( 163,593	)		929,968
Total equity		3,196,695			3,296,653
Total capital		3,033,102			4,226,621

Gearing ratio		0.00			0.22

4.3 Fair value estimation -

For the classification of the type of valuation used by the Group for its financial instruments at fair value, the following levels of measurement have been established:

- Level 1: Measurement based on quoted prices in active markets for identical assets or liabilities.

- Level 2: Measurement based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability (level 1), either directly (that is, as prices) or indirectly (that is, derived from prices).

- Level 3: Measurement based on inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs, generally based on internal estimates and assumptions of the Group).

The only financial instruments measured at fair value by the Group are interest rate swaps (variable to fixed), forward foreign exchange contracts (mostly euros and U.S. dollars) and available-for-sale investments. The measurement at fair value of these instruments corresponds to the characteristics of Level 2 and has been determined based on the present value of discounted future cash flows. During the period ended December 31, 2014 there were no changes in the levels of measurement of financial instruments at fair value.

The carrying amount of cash and cash equivalents corresponds to its fair value. The Group considers that the carrying amount of short-term accounts receivable and payable approximates fair value. The fair value of financial liabilities has been estimated by discounting the future contractual cash flows at the interest rate currently prevailing in the market and which is available to the Group for similar financial instruments.

Fair value hierarchy -

The following table presents the Group’s financial assets and liabilities that are measured at fair value as of December 31, 2014.

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(All amounts are expressed in thousands of S/. unless otherwise stated)

UNAUDITED

	Level 1		Level 2		Level 3		Total

Liabilities:
Derivative financial instruments - Cash
flow hedging		-		2,999		-		2,999
Total liabilities		-		2,999		-		2,999

There were no transfers between Levels 1, 2 and 3 during the period.

5	CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

Preparation of the condensed interim consolidated financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

In preparing these condensed interim consolidated financial statements, the significant judgements made by management in applying the Group’s accounting policies and the key sources of uncertainty were the same as those that applied to the consolidated financial statements for the year ended December 31, 2013.

6	SEASONALITY OF OPERATIONS

The Group shows no material seasonality in the operations of any of its subsidiaries; operations are carried out regularly during the course of the period.

7	SEGMENT REPORTING

Operating segments are reported consistent with the internal reports that are reviewed by the Corporate General Manager, who is the chief operating decision maker, responsible for allocating resources and evaluating the performance of each operating segment.

The Group's operating segments are assessed by the activity of the following business units: (i) engineering and construction, (ii) infrastructure, (iii) real estate, (iv) technical services and (v) the operation of the Parent Company (Holding).

As set forth under IFRS 8, reportable segments by significance of income are: ‘engineering and construction’ and ‘technical services’. However, the Group has voluntarily decided to report on all its operating segments as detailed in this Note.

Inter-segmental sales transactions are entered into at prices that are similar to those that would have been agreed to with unrelated third parties. Revenues from external customers reported to the Corporate General Manager are measured in a manner consistent with the basis of preparation of the financial statements.

Group sales and receivables are not concentrated on a few customers.

- 10 -

(All the amounts are expressed in thousand of S/. unless otherwise stated)
UNAUDITED

Operating segments financial position

Segment reporting

	Engineering		Infrastructure												Parent
	and construction		Energy		Toll roads		Mass transit		Water treatment		Real estate		Technical services		Company Operations		Eliminations			Consolidated
As of December 31, 2013
Assets.-
Cash and cash equivalents		265,788		17,764		80,785		23,318		445		43,026		46,469		481,820		-			959,415
Trade Accounts receivable		265,544		29,527		12,347		4,090		-		17,938		192,382		44		-			521,872
Outstanding work in progress		734,976		6,966		2,433		31,187		37,489		-		158,692		-		-			971,743
Accounts receivable from related parties		107,732		4,083		18,660		163		-		561		53,845		733,645		(834,839	)		83,850
Other accounts receivable		364,414		26,840		11,180		34,263		4,557		17,939		65,794		33,469		(1,760	)		556,696
Inventories		90,671		7,741		-		11,927		-		590,567		63,912		487		(2,508	)		762,797
Prepaid expenses		7,440		1,318		5,442		4,394		3		2,596		4,130		363		-			25,686
Non-current assets classified as held for sale		21,474		-		-		-		-		-		-		-		-			21,474
Total Current assets		1,858,039		94,239		130,847		109,342		42,494		672,627		585,224		1,249,828		(839,107	)		3,903,533

Long-term trade accounts receivable		-		-		-		591,917		-		-		-		-		-			591,917
Long-term trade accounts receivable from related parties		-		-		-		-		-		-		-		57,501		(57,501	)		-
Other long-term accounts receivable		-		-		10,081		-		1,858		11,811		12,301		2,100		-			38,151
Available-for-sale financial asset		-		1,058		-		-		-		-		2		88,333		(1,060	)		88,333
Investments in associates and joint ventures		153,556		7,287		-		-		-		16,297		10,454		1,301,315		(1,400,942	)		87,967
Investment property		-		-		-		-		-		36,945		-		-		-			36,945
Property, plant and equipment		534,067		190,844		3,919		6,724		-		5,636		114,081		103,840		(6,205	)		952,906
Intangible assets		174,771		101,978		145,711		6,450		1,151		957		18,883		15,282		15,702			480,885
Deferred income tax asset		68,699		644		4,258		8,765		-		4,860		42,119		1,264		4,912			135,521
Total non-current assets		931,093		301,811		163,969		613,856		3,009		76,506		197,840		1,569,635		(1,445,094	)		2,412,625
Total assets		2,789,132		396,050		294,816		723,198		45,503		749,133		783,064		2,819,463		(2,284,201	)		6,316,158


Liabilities.-
Borrowings		195,083		33,847		46,007		-		5,869		77,854		126,872		587		-			486,119
Trade accounts payable		751,097		19,950		3,353		9,912		280		42,484		160,104		4,217		-			991,397
Accounts payable to related parties		43,373		877		25,572		642,510		24,058		21,493		77,613		24,928		(834,839	)		25,585
Current taxes		117,087		3,477		2,515		81		366		3,161		30,498		2,049		-			159,234
Other accounts payable		526,994		10,882		42,891		879		-		72,617		79,050		11,781		-			745,094
Other provisions		-		4,207		3,846		-		-		-		842		-		-			8,895
Total current liabilities		1,633,634		73,240		124,184		653,382		30,573		217,609		474,979		43,562		(834,839	)		2,416,324

Borrowings		127,067		86,334		9,780		-		-		52,318		31,367		2,837		-			309,703
Long-term trade accounts payable		-		-		-		2,157		-		-		-		-		-			2,157
Accounts payables to related parties		-		-		-		-		-		28,500		29,001		-		(57,501	)		-
Other long-term accounts payable		124,344		-		462		-		-		9,723		69,957		910		-			205,396
Other provisions		14,832		4,668		-		-		-		-		23,918		-		-			43,418
Derivative financial instruments		-		3,563		-		201		-		147		-		-		-			3,911
Deferred income tax liability		119,367		453		166		-		340		7,074		5,864		3,599		1,691			138,554
Total non-current liabilities		385,610		95,018		10,408		2,358		340		97,762		160,107		7,346		-55,810			703,139
Total liabilities		2,019,244		168,258		134,592		655,740		30,913		315,371		635,086		50,908		(890,649	)		3,119,463
Equity		622,900		211,431		120,407		50,594		14,590		152,713		125,736		2,758,671		(1,291,609	)		2,765,433
Non-controlling interest		146,988		16,361		39,817		16,864		-		281,049		22,242		9,884		(101,943	)		431,262
Total liabilities and equity		2,789,132		396,050		294,816		723,198		45,503		749,133		783,064		2,819,463		-2,284,201			6,316,158

- 11 -

(All the amounts are expressed in thousand of S/. unless otherwise stated)
UNAUDITED

Operating segments financial position

Segment reporting

	Engineering		Infrastructure												Parent
	and construction		Energy		Toll roads		Mass transit		Water treatment		Real estate		Technical services		Company Operations		Eliminations			Consolidated
As of December 31, 2014
Assets.-
Cash and cash equivalents		285,367		54,085		53,312		51,522		8,407		54,268		134,678		176,763		-			818,402
Available-for-sale financial assets		7,105		-		-		-		-		-		-		-		-			7,105
Trade Accounts receivable		596,281		35,201		46,598		71,817		-		57,584		293,024		34		-			1,100,539
Outstanding work in progress		1,140,778		1,414		-		-		14,972		-		-		-		-			1,157,164
Accounts receivable from related parties		121,989		6,723		-		216		-		6,561		65,242		371,765		(473,435	)		99,061
Other accounts receivable		384,482		10,781		9,042		29,515		3,154		11,409		63,797		65,275		1,060			578,515
Inventories		126,293		7,921		-		13,909		-		630,758		55,601		486		(1,398	)		833,570
Prepaid expenses		11,490		891		822		6,056		407		235		5,119		1,424		-			26,444
Non-current assets classified as held for sale		14,457		-		-		-		-		-		-		-		-			14,457
Total Current assets		2,688,242		117,016		109,774		173,035		26,940		760,815		617,461		615,747		(473,773	)		4,635,257

Long-term trade accounts receivable		-		-		-		579,955		-		-		-		-		-			579,955
Long-term outstanding work in progress		-		25,387		10,584		-		-		-		-		-		-			35,971
Long-term trade accounts receivable from related parties		-		-		408		-		-		-		433		171,048		(171,889	)		-
Other long-term accounts receivable		6,192		4,449		11,776		4,130		1,587		9,705		4,496		2,218		-			44,553
Available-for-sale financial assets		-		1,058		-		-		-		-		2		93,144		(1,060	)		93,144
Investments in associates and joint ventures		161,938		7,316		-		-		-		62,863		10,059		1,873,754		(1,886,367	)		229,563
Investment property		-		-		-		-		-		36,244		-		-		-			36,244
Property, plant and equipment		650,538		193,182		2,036		14,271		-		7,344		166,323		119,483		(6,785	)		1,146,392
Intangible assets		410,312		146,477		234,923		6,247		1,100		1,187		32,838		17,417		14,651			865,152
Deferred income tax asset		90,323		714		4,604		244		-		9		37,364		925		2,858			137,041
Prepaid expenses		-		-		2,416		7,062		-		-		-		-		-			9,478
Total non-current assets		1,319,303		378,583		266,747		611,909		2,687		117,352		251,515		2,277,989		(2,048,592	)		3,177,493
Total assets		4,007,545		495,599		376,521		784,944		29,627		878,167		868,976		2,893,736		(2,522,365)			7,812,750

Liabilities.-
Borrowings		624,492		69,577		95,902		404,915		-		144,314		80,531		632		-			1,420,363
Trade accounts payable		944,417		27,148		3,250		12,385		159		31,690		155,713		8,461		-			1,183,223
Accounts payable to related parties		89,445		1,061		55,679		278,819		13,052		24,106		82,203		12,421		(473,759	)		83,027
Current taxes		169,566		6,881		3,726		198		138		2,186		21,624		2,631		-			206,950
Other accounts payable		799,120		16,762		22,599		2,141		-		64,280		91,607		19,800		-			1,016,309
Other provisions		-		8,414		-		-		-		-		3,027		-		-			11,441
Total current liabilities		2,627,040		129,843		181,156		698,458		13,349		266,576		434,705		43,945		(473,759	)		3,921,313

Borrowings		145,964		99,767		633		-		-		16,368		63,070		2,205		-			328,007
Long-term trade accounts payable		-		-		1,622		2,157		-		-		-		-		-			3,779
Accounts payables to related parties		-		-		-		-		-		109,126		62,522		-		(171,648	)		-
Other long-term accounts payable		54,949		349		495		4,820		-		4,679		66,745		880		-			132,917
Other provisions		26,878		6,959		-		-		-		-		14,252		-		-			48,089
Derivative financial instruments		-		2,999		-		-		-		-		-		-		-			2,999
Deferred income tax liability		48,721		1,330		-		-		325		8,707		6,271		13,639		-			78,993
Total non-current liabilities		276,512		111,404		2,750		6,977		325		138,880		212,860		16,724		(171,648	)		594,784
Total liabilities		2,903,552		241,247		183,906		705,435		13,674		405,456		647,565		60,669		(645,407	)		4,516,097
Equity		932,803		236,149		150,788		59,633		15,953		157,276		130,833		2,823,454		(1,705,795	)		2,801,094
Non-controlling interest		171,190		18,203		41,827		19,876		-		315,435		90,578		9,613		(171,163	)		495,559
Total liabilities and equity		4,007,545		495,599		376,521		784,944		29,627		878,167		868,976		2,893,736		(2,522,365	)		7,812,750

- 12 -

(All amounts are expressed in thousands of S/. unless otherwise stated)

UNAUDITED

Operating segment performance

Segment Reporting

	Engineering		Infrastructure												Parent
	and						Mass		Water		Real		Technical		Company
	construction		Energy		Toll roads		transit		treatment		estate		services		operations		Eliminations		Consolidated
Year 2013 -
Revenue	4,075,255		321,097		195,861		118,541		45,489		313,731		1,169,115		51,525		(323,114	)	5,967,500
Gross profit	559,544		97,495		66,455		19,670		3,179		113,732		179,175		(4,031	)	(31,097	)	1,004,122
Administrative expenses	(217,927	)	(16,170	)	(6,600	)	(8,025	)	(212	)	(20,993	)	(132,486	)	(8,616	)	49,237		(361,792	)
Other income and expenses	10,762		(3,851	)	(35	)	758		(2	)	(727	)	24,669		(2,689	)	(2,851	)	26,034
Gains from the sale of investments	-		-		-		-		-		3,197		-		2,525		-		5,722
Other gains (losses) , net	-		290		-		-		-		(1,023	)	-		-		-		(733	)
Profit before interests and taxes	352,379		77,764		59,820		12,403		2,965		94,186		71,358		(12,811	)	15,289		673,353
Financial expenses	(318,447	)	(28,534	)	(22,392	)	(60,292	)	(47	)	(27,010	)	(35,235	)	(95,722	)	4,227		(583,452	)
Financial income	291,812		14,303		17,982		34,315		17		13,227		19,382		108,617		(29,821	)	469,834
Dividends received	-		-		-		-		-		-		-		-		1,170		1,170
Share of the profit or loss in associates under the equity method of accounting	41,971		1,587		-		-		-		64		1,070		320,362		(331,492	)	33,562
Profit before income tax	367,715		65,120		55,410		(13,574	)	2,935		80,467		56,575		320,446		(340,627	)	594,467
Income tax	(111,240	)	(20,066	)	(14,971	)	477		(881	)	(21,427	)	(16,655	)	(781	)	3,221		(182,323	)
Net profit for the period	256,475		45,054		40,439		(13,097	)	2,054		59,040		39,920		319,665		(337,406	)	412,144

Profit attributable to:

Controlling interest in the Group	211,594		41,635		26,077		(9,823	)	2,054		19,154		34,296		319,762		(324,733	)	320,016
Non-controlling interest	44,881		3,419		14,362		(3,274	)	-		39,886		5,624		(97	)	(12,673	)	92,128
Net profit for the period	256,475		45,054		40,439		(13,097	)	2,054		59,040		39,920		319,665		(337,406	)	412,144

- 13 -

(All amounts are expressed in thousands of S/. unless otherwise stated)

UNAUDITED

Operating segment performance

Segment Reporting

	Engineering		Infrastructure												Parent
	and						Mass		Water		Real		Technical		Company
	construction		Energy		Toll roads		transit		treatment		estate		Services		operations		Eliminations		Consolidated
Year 2014 -
Revenue	5,035,674		350,339		338,153		166,951		29,323		224,560		1,208,168		53,241		(397,729	)	7,008,680
Gross profit	535,247		124,455		76,697		42,109		2,307		62,413		142,180		(7,574	)	(26,541	)	951,293
Administrative expenses	(263,868	)	(17,256	)	(8,035	)	(14,714	)	(317	)	(21,058	)	(125,264	)	(35,444	)	56,517		(429,439	)
Other income and expenses	346		(4,428	)	33		18		-		(846	)	10,711		12,713		(966	)	17,581
Loss from the sale of investments	-		-		-		-		-		-		(2,139	)	-		2,139		-
Other gains (losses) , net	-		(116	)	-		-		-		(6	)	42		-		-		(80	)
Profit before interests and taxes	271,725		102,655		68,695		27,413		1,990		40,503		25,530		(30,305	)	31,149		539,355
Financial expenses	(256,901	)	(30,640	)	(19,037	)	(39,782	)	(57	)	(30,353	)	(39,891	)	(59,048	)	15,560		(460,149	)
Financial income	194,478		19,196		9,535		35,264		18		15,639		14,319		117,216		(36,869	)	368,796
Dividends received	-		-		-		-		-		-		-		264,951		(255,601	)	9,350
Share of the profit or loss in associates under the equity method of accounting	48,242		29		-		-		-		12,178		591		-		(7,595	)	53,445
Profit before income tax	257,544		91,240		59,193		22,895		1,951		37,967		549		292,814		(253,356	)	510,797
Income tax	(61,143	)	(29,400	)	(16,158	)	(10,842	)	(588	)	(11,452	)	(5,744	)	(14,581	)	234		(149,674	)
Net profit for the period	196,401		61,840		43,035		12,053		1,363		26,515		(5,195	)	278,233		(253,122	)	361,123

Profit attributable to:

Controlling interest in the Group	166,868		58,234		32,774		9,040		1,363		9,527		(5,428	)	278,505		(251,228	)	299,655
Non-controlling interest	29,533		3,606		10,261		3,013		-		16,988		233		(272	)	(1,894	)	61,468
Net profit for the period	196,401		61,840		43,035		12,053		1,363		26,515		(5,195	)	278,233		(253,122	)	361,123

- 14 -

(All amounts are expressed in thousands of S/. unless otherwise stated)

UNAUDITED

No major changes occurred in total assets as compared to the amount stated in the year-end financial statements.

There are no differences as compared to the year-end financial statements based on segmentation or measurement of financial performance by segment.

8	FINANCIAL ASSETS AVAILABLE FOR SALE

This account comprises the investment maintained by the Company directly and indirectly in Transportadora de Gas del Perú S.A. (TGP), a local entity that operates gas transportation systems. At December 31, 2012 the investment corresponded to shares representing the 0.6% of interest in the TGP’s capital.

In December 2013, the Group acquired from one of the TGP’s shareholders, Pluspetrol Resources Corporation (hereinafter Pluspetrol), an additional 1.04% interest in TGP paying a consideration of US$20 million (equivalent to S/.56.1 million). At December 31, 2013, the fair value of the Group´s interest in TGP equals S/.88.3 million. The change in fair value from 2012 to 2013 of S/.19.1 million, net of the income tax of S/.8.2 million is recorded within other comprehensive income. At December 31, 2014, the fair value of the Group´s interest in TGP equals S/.93.1 million. The change in fair value from 2013 to 2014 of S/.3.3 million, net of the income tax of S/.1.4 million is recorded within other comprehensive income.

Together with the acquisition of the 1.04% interest, the Company acquired from Pluspetrol on behalf of the Canada Pension Plan Investment Board (CPPIB) an additional indirect interest of 11.34% in TGP. The investment for US$217 million was funded entirely by CPPIB. The risk and rewards of the entire investment are assumed by CPPIB.

Given the features of the transaction, it has been treated as an off-balance transaction because, in substance, the Company is acting as an agent for CPPIB. Therefore, the Company has not recognized neither the investment in TGP nor any obligation to CPPIB.

On February 27, 2014 the Company transferred 10.43% to CPPIB and 0.91% to CFI, retaining the 1.04% interest.

9	TRANSACTIONS WITH RELATED PARTIES

a) Transactions with related parties -

Major transactions between the Company and its related parties are summarized as follows:

	From the period ended December 31,
	2013		2014
Revenue from sale of goods and services:
- Associates		4,915		6,040
- Joint operations		67,601		43,897
		72,516		49,937

Inter-company services were agreed upon under market terms as if they had been agreed to with third parties.

- 15 -

(All amounts are expressed in thousands of S/. unless otherwise stated)

UNAUDITED

b) Balances of transactions with related parties

	At December 31, 2013				At December 31, 2014
	Receivable		Payable		Receivable		Payable
Consorcio GyM Conciviles		33,405		-		48,581		-
Consorcio Peruano de Conservación		15,080		-		15,365		-
Consorcio Tren Eléctrico		2,499		-		7,380		-
Consorcio Terminales		4,294		-		6837		-
Consorcio Rio Urubamba		2,798		-		5,107		3,796
Consorcio Sistemas SEC		-		-		4,349		-
Consorcio La Gloria		3,696		3,398		3,805		3,423
Consorcio Constructor Alto Cayma		566		4,881		1,424		-
Consorcio JV Panamá		1,323		-		1,043		-
Consorcio Lima		312		-		877		-
Consorcio Norte Pachacutec		556		952		531		1,068
Consorcio HV GyM		-		-		387		-
Consorcio Huacho Pativilca		-		-		369		4,555
Comerciales Sur		206		-		294		-
Consorcio Pasco		-		-		248		-
Consorcio Constructora Incolur-DSD Limitada		-		-		246		404
Consorcio Toromocho		62		34		210		-
Consorcio Rio Pallca		3,903		-		187		282
Consorcio Constructor Chavimochic		-		-		141		2,896
Consorcio Proyecto Chiquintirca		134		-		134		-
Consorcio Alto Cayma		5,557		666		121		700
Consorcio Construcciones y Montajes		-		-		116		1,198
Consorcio Vial Quinua		37		1,315		115		-
Bechtel Vial y Vives Servicios Complementarios Ltda.		-		-		96		4,648
Consorcio Atocongo		712		-		-		915
Consorcio Brocal Pasco		1,913		41		-		-
Consorcio Ingenieria y Construcción Bechtel		-		3,924		-		570
Consorcio La Chira		-		51		-		-
Consorcio Rio Mantaro		3,822		-		-		5,140
Consorcio Vial Ipacal		283		-		-		-
Consorcio Vial Sullana		470		-		-		-
Consorcio Vial Sur		737		-		-		-
Consorcio EIMISA		-		-		-		2,955
Ingenieria y Construccion Sigdo Koppers-Vial y Vives OGP1 Ltda.		-		-		-		35,302
Others		1,485		965		1,098		1,082
		83,850		16,227		99,061		68,934


Ferrovias Argentina SA		-		8,771		-		14,093
Besco		-		587		-		-

		-		9,358		-		14,093
		83,850		25,585		99,061		83,027

Accounts receivable and payable are of current maturity and have no specific guarantees.

Accounts receivable from related parties mainly arise from sales transactions for goods and services with a maturity period of 60 days. These balances are non-interest-bearing because they have short-term maturities and do not require a provision for impairment.

Accounts payable to related parties mainly arise from transactions to provide services of engineering, construction, maintenance and others and have a maturity period of 60 days. Such accounts are not interest bearing because they are short-term.

10	INVESTMENTS IN ASSOCIATES AND JOINT VENTURES

The movement of our investments in associates for the period ended December 31, 2013 and December 31, 2014 is as follows:

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(All amounts are expressed in thousands of S/. unless otherwise stated)

UNAUDITED

	At December 31, 2013			At December 31, 2014

Beginning balance		37,446			87,967
Acquisition and/or contributions received		10,598			129,685
Share of the profit and loss in associates under the equity method of accounting		33,562			53,445
Dividends received		(4,687	)		(36,718	)
Sale of investments		(6,683	)		-
Adjustment LQS		7,408			-
Adjustment SEC		9,379			-
Other		944			(4,816	)
Ending balances		87,967			229,563

On December 2013, the Company was awarded the concession for the operation of Chavimochic Irrigation Project. The project consists of the following activities: i) design and construction work of the third phase of the Chavimochic Irrigation Project, in La Libertad; ii) operation and work maintenance; and iii) water supply to the project users. Construction works will begin in 2015, concession has a 25-year period and total investment amounts to US$647 million.

For the operation of the concession the Company, Constructora Norberto Odebrecht S.A. and Odebrecht Partipacoes e Investimentos S.A. have formed Concesionaria Chavimochic S.A.C. in which the Company has 26.5% interest. As of March 14, 2014 the Company has issued S/.13.3 million equity.

Additionally, the Company acquired Panorama Plaza’s Business with a contribution of S/.38 million, it corresponds to a participation as 35%. The main active is a land located in the district of Santiago de Surco, which is developing the real estate project consisting of a commercial area and two office towers of 17 floors.

On December 2014, the Company acquired 51% of Tecgas NV – which is the current Strategic Operator of Transportadora de Gas del Perú and, also owns 100% of shares of Compañía Operadora de Gas del Amazonas (hereinafter “COGA”), whose value amounts to S/. 75.8 million.

11	PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS

For the period ended December 31,2013 and 2014, the movement in property, plant and equipment and intangible assets accounts was as follows:

	Property, plant and equipment			Intangible assets

At January 1, 2013		953,531			480,398
Additions		241,365			24,704
Acquisition of subsidiary - net		52,922			13,719
Transfers, disposals and adjustments		(100,298	)		40,451
Deductions for sale of assets		(15,127	)		-
Depreciation, amortization		(179,487	)		(78,387	)
Net cost at December 31, 2013		952,906			480,885

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(All amounts are expressed in thousands of S/. unless otherwise stated)

UNAUDITED

	Property, plant and equipment			Intangible assets

At January 1, 2014		952,906			480,885
Additions		425,954			143,544
Acquisition of subsidiary - net		70,614			260,100
Transfers, disposals and adjustments		(81,614	)		55,399
Deductions for sale of assets		(38,310	)		(46	)
Depreciation, amortization		(183,158	)		(74,730	)
Net cost at December 31, 2014		1,146,392			865,152

Additions to property, plant and equipment comprise of acquisition of plant and equipment intended for the Group’s operations.

The amounts registered in Property, plant and equipment and intangible assets were obtained through the acquisition of Coasin Instalaciones Limitada (Note 19.a), direct control acquired by CAM Chile S.A. and Inversiones y Construcciones Ltda., and the acquisition of Morelco S.A.S (Note 19.b) whose control was acquired by GyM S.A.

Goodwill -

Management reviews the results of its business operations based on the type of economic activity carried out. The economic activities that have given rise to goodwill for the Group were engineering and construction, electro-mechanical works, mining services, IT services and telecommunications services.

Goodwill by cash-generating units is broken down as follows:

	At December		At December
	31, 2013		31, 2014
Construction - Engineering		36,812		232,828
Construction - Mining services		13,366		13,366
Construction - Electromechanical		20,737		20,737
IT services		4,172		4,172
Telecommunications Services		-		5,743
		75,087		276,846

Goodwill from the telecommunications services corresponds to the acquisition of the subsidiary Coasin Instalaciones Limitada, which is subsidiary of CAM Chile S.A. (Note 19.a), and the acquisition of the subsidiary Morelco S.A.S which is subsidiary of GyM S.A. (Note 19.b).

As a result of the impairment testing on goodwill performed by Management on an annual basis the recoverable amount of the related cash-generating unit (CGU) is determined based on its value in use. Value in use is determined based on the future cash flows expected to be generated by the assessed CGU. As a result of these assessments no provisions for impairment were required. As of December 31, 2014 same criteria were applied as those in test impairment at December 31, 2013.

12	BORROWINGS

This item comprises:

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(All amounts are expressed in thousands of S/. unless otherwise stated)

UNAUDITED

	Total				Current				Non-current
	At December 31, 2013		At December 31, 2014		At December 31, 2013		At December 31, 2014		At December 31, 2013		At December 31, 2014

Bank loans		514,228		1,419,428		381,005		1,297,131		133,223		122,297
Leases		281,594		328,942		105,114		123,232		176,480		205,710
		795,822		1,748,370		486,119		1,420,363		309,703		328,007

Bank loans -

As of December 31, 2013 and December 31, 2014, this item comprises bank loans in local and foreign currencies for working capital purposes. These obligations bear interest at fixed rates which fluctuated between 2% and 9% in 2013, and 1% and 9% in 2014.

On January 15, 2014 the subsidiary Norvial S.A. signed a short term bridge loan with Banco de Crédito del Perú – BCP for an amount of up to S/. 120 million and US$12 million. On such date, under the aforementioned facility S/.50 million were disbursed at an interest rate of 6.32%, and during 2014 an accumulated of S/.85 million have been disbursed. This loan will be canceled with a bond issuance to placed in the local capital markets that will finance the construction of the second stage of this road.

In June 2014, the subsidiary GyM Ferrovías signed a short term loan with BBVA Continental of S/.200 million at an interest rate of 5.75%, due on December 2014. In August 2014, another short term loan with Banco de Crédito del Perú-BCP of S/.200 million at an interest rate of 5.90%, due on January 2015. In December 2014, the short term loan with BBVA was refinanced through a short term loan provided by BCP. These loans will be cancelled with an international bond issuance under the Regulation S, to be placed in February 2015. This issuance will consist of 25-year corporate bonds, at an inflation adjusted (VAC) interest rate, to be place mainly to insurance companies and pension funds.

As of December 31, 2014, the Company maintained unused credit limits for S/.2,459 million, which expire within one year (S/.2,626 million as of December 31, 2013).

b) Fair value of borrowings -

The carrying amount and fair value of borrowings are broken down as follows:

	Carrying amounts				Fair value
	At December 31, 2013		At December 31, 2014		At December 31, 2013		At December 31, 2014

Other loans		753,223		1,748,370		642,842		1,702,634
Loans from multilateral organizations		42,599		-		44,384		-
		795,822		1,748,370		687,226		1,702,634

The fair value is based on cash flows discounted using a rate based on the borrowing rate of 4.4% and 8.0% (4.1% and 8.05% in 2013). It should be noted that the interest rate used are those applicable and negotiated by each Company.

13	PROVISIONS

This item is broken down based on the expectation of liquidation as follows:

	At December 31, 2013		At December 31, 2014

Current portion		8,895		11,441
Non-current portion		43,418		48,089
		52,313		59,530

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(All amounts are expressed in thousands of S/. unless otherwise stated)

UNAUDITED

The movement of this item for the period ended December 31, 2013 and 2014 is as follows:

				Contingent			Provisions for the			Provision			Provision
	Legal			liabilities from			for the acquisition			for well			for periodic
	claims			acquisitions			of CAM			closure			maintenance			Total

At January 1, 2013		11,380			6,006			35,220			4,897			-			57,503
Additions		2,039			-			-			154			12,868			15,061
Additions from business combinations		-			3,846			-			-			-			3,846
Reversals		(882	)		-			(13,674	)		-			6,728			(7,828	)
Payments		(320	)		-			-			(199	)		(15,750	)		(16,269	)
At December 31, 2013		12,217			9,852			21,546			4,852			3,846			52,313



At January 1, 2014		12,217			9,852			21,546			4,852			3,846			52,313
Additions		9,944			-			-			2,696			2,487			15,127
Additions from business combinations		17,086			2,658			-			-			-			19,744
Reversals		(4,072	)		(4,116	)		(12,258	)		-			-			(20,446	)
Payments		(537	)		-			-			(338	)		(6,333	)		(7,208	)
At December 31, 2014		34,638			8,394			9,288			7,210			-			59,530

Reversals for the period ended December 31, 2014 mainly consists of write-offs of provisions recognized in conjunction with the purchase price allocation related to acquisition of CAM Chile in S/.12.3 million. (S/.13.7 million as of December 31, 2013).

CAPITAL

As of December 31, 2014 and December 31, 2013, the authorized, subscribed and paid-in capital, according to the Company’s bylaws as amended, is represented by 660,053,790 common shares at S/.1.00 par value each.

Subsequently, a resolution of the General Meeting on March 26, 2013, as well as agreements adopted at meetings of the Board on May 30, July 23 and August 22 of 2013, mandated the issuance of common stock through a public offering of "American Depositary Shares" (ADS´s) registered in the Securities and Exchange Commission (SEC) and NYSE, increasing the capital sum from S/.558,284 to S/.660,054.

This capital increase was carried out in two tranches as follows:

(i) The first tranche in the amount of S/.97,674 (representing the issuance of 97,674,420 common shares issued and 19,534,884 ADS’s, therefore, at 5 shares per ADS), and,

(ii) A second tranche in the amount of S/.4,095 (representing the issuance of 4,095,180 common shares and ADS’s 819,036, issued at 5 shares per ADS rate).

As of December 31, 2014, the amount of 253,635,480 common shares is representing en ADSs (equivalents at 50,727,096 ADS’s therefore, at 5 shares per ADS).

15	EXPENSES BY NATURE

For the period ended December 31, 2013 and 2014, this item comprises:

- 20 -

(All amounts are expressed in thousands of S/. unless otherwise stated)

UNAUDITED

	Cost of services and goods			Adminis- trative- expenses			Total
2013
Purchase of goods		212,819			-			212,819
Personnel charges		1,527,146			169,469			1,696,615
Services provided by third-parties		1,520,254			93,666			1,613,920
Taxes		8,930			614			9,544
Other management charges		533,544			72,413			605,957
Depreciation		168,090			13,389			181,479
Amortization		67,254			11,133			78,387
Impairment		2,349			764			3,113
Variation of inventories		922,992			344			923,336
		4,963,378			361,792			5,325,170
2014
Purchase of goods		1,016,429			836			1,017,265
Personnel charges		1,864,216			210,028			2,074,244
Services provided by third-parties		2,137,178			120,697			2,257,875
Taxes		11,356			6,212			17,568
Other management charges		824,928			71,197			896,125
Depreciation		170,784			14,525			185,309
Amortization		68,089			6,641			74,730
Impairment		1,238			87			1,325
Reversal of impairment		(1,169	)		-			(1,169	)
Variation of inventories		(35,662	)		(784	)		(36,446	)
		6,057,387			429,439			6,486,826

16	INCOME TAX

The weighted-average tax rate was 29.30% (30.67% in 2013). The variation of the effective rate as compared to the previous year is due to the effect of the permanent differences in the income tax calculation.

17	CONTINGENCIES, COMMITTMENTS AND GUARANTEES

As of December 31, 2014, total contingencies amounted S/.29 million. In addition the Group had guarantee commitments with different financial institutions securing transactions in the amount of US$21.6 million and S/.535.5 million.

DIVIDENDS

For the period ended December 31, 2014, the Group paid dividends on its subsidiaries to its non-controlling entities for S/.60 million (S/.51.8 million for the same period of 2013).

Dividends from the year ended December 31, 2013, of S/.0.169 per share totaling S/.112,126,908 were approved at the General Shareholders’ meeting held on March 28, 2014, and was paid on April 28, 2014.

- 21 -

(All amounts are expressed in thousands of S/. unless otherwise stated)

UNAUDITED

19	BUSINESS COMBINATIONS

a) Acquisition of Coasin Instalaciones Limitada.

In March 2014, through the subsidiaries CAM Chile S.A. and Inversiones y Construcciones Ltda., the Group acquired control of Coasin Instalaciones Limitada with the purchase of 100.00% of its equity shares. Coasin is an entity domiciled in Chile, whose main economic activity is the provision of maintenance and installation services and telecommunications equipment.

This acquisition is part of the Group’s plan to increase its presence in markets that present high growth potential as in Chile, and in attractive industries, such as public services.

The Price paid by CAM Chile S.A. for the acquisition of Coasin amounted to US$2.1 million (equivalent to S/.6.4 million) and resulted in the recognition of goodwill for S/.5.7 million at the acquisition date.

The following tables summarize the consideration paid for Coasin and the preliminary determination of fair value of assets acquired, liabilities assumed a at the acquisition date:

	S/.000			US$000
Cash and cash equivalents		3			1
Trade accounts receivable		4,675			1,564
Inventories		276			92
Prepaid expenses		33			11
Property, plant and equipment		711			238
Intangibles (“Order backlog”)		1,377			461
Deferred income tax		(178	)		(60	)
Trade accounts payable		(3,592	)		(1,202	)
Contingent liabilities		(2,658	)		(889	)
Fair value of net assets		647			216

Goodwill		5,743			1,921
Total paid for acquisition		6,390			2,137

Cash payment for acquisition		6,390			2,137
Cash and cash equivalent of the acquired subsidiary		(3	)		(1	)
Direct cash outflow from acquisition		6,387			2,136

The income and the profit generated for the period from the acquisition date to December 31, 2014 amounted to S/.66.3 million and S/.0.7 million, respectively.

The Group has a measurement period not exceeding one year from the acquisition of Coasin date on the additional assets and liabilities arising from new information could be obtained regarding the information that there are recognized in the date of acquisition and which is neither new events occurring after the acquisition date, in this case the Group adjusts the initial amounts recognized in the business combination date.

b) Acquisition of Morelco S.A.S.

At the end of December 2014, the Group’s subsidiary GyM S.A. acquired control of Morelco S.A.S. with the purchase of 70.00% of its equity shares. Morelco is an entity domiciled in Colombia whose main economic activity is construction and assembly. This acquisition is part of the Group’s plan to increase its presence in markets that present high growth potential as in Colombia, and in attractive industries, such as mining and energy.

- 22 -

(All amounts are expressed in thousands of S/. unless otherwise stated)

UNAUDITED

The following tables summarize the consideration paid for Morelco and the preliminary determination of fair value of assets acquired, liabilities assumed and the non-controlling interest at the acquisition date:

	S/.000		US$000

Cash and cash equivalents	68,148		22,800
Trade accounts receivable	81,121		27,140
Outstanding work in progress	98,946		33,103
Other accounts receivable	62,319		20,850
Inventories	17,577		5,881
Prepaid expenses	2,079		696
Available for sale financial assets	7,105		2,377
Property, plant and equipment	69,903		23,387
Intangibles	52,560		17,585
Deferred income tax	7,826		2,618
Borrowings	(39,486	)	(13,211	)
Trade accounts payable	(101,096	)	(33,823	)
Other accounts payable	(85,624	)	(28,646	)
Contingent liability	17,085	)	(5,716	)
Deferred income tax	(641	)	(215	)
Fair value of net assets	223,652		74,826

Non-controlling interest (30.00%)	(67,096	)	(22,448	)
Goodwill	200,420		67,053
Total paid for acquisition	356,977		119,431

Cash payment for the acquisition	237,630		77,495
Cash and cash equivalent of the acquired subsidiary	(68,148	)	(22,800	)
Direct cash outflow from acquisition	163,482		54,695

If Morelco would have been consolidated since January 1, 2014, the revenue and profit generated would have been S/.722.57 million and S/.80.75 million, respectively.

c) Acquisition of DSD Construcciones y Montajes S.A. (DSD)

In August 2013, through the subsidiaries GyM Minería S.A., Ingeniería y Construcción Vial y Vives S.A. and GyM Chile S.p.A., the Group acquired control of DSD with the purchase of 85.95% of its equity shares. DSD is an entity domiciled in Chile whose main economic activity is the execution of electromechanical works and assemblies in construction projects of oil refineries, pulp and paper, power plants and mining plants.

During the period of twelve months after the acquisition date the Group reassessed the purchase price allocation from the acquisition of DSD Construcciones y Montajes S.A. which was made in August, 2013 and reallocated the amount of S/.1.7 million from goodwill (net of tax impact of S/.0.5 million and non-controlling interest of S/.0.3 million) to fixed assets, intangible, trade accounts receivable, other accounts receivable and contingent liabilities in the amounts of S/.0.4 million, S/.1.9 million, S/.0.2 million, S/.3.5 million and S/.3 million respectively. This effect corresponds to the measurement period adjustment of the preliminary fair value assigned to the assets and liabilities acquired.

The price paid by GyM for the acquisition of DSD Construcciones y Montajes S.A. amounted to US$37.2 million (equivalent to S/.103.9 million) and resulted in the recognition of goodwill for S/.6.1 million, at the acquisition date, which is detailed as follows:

- 23 -

(All amounts are expressed in thousands of S/. unless otherwise stated)

UNAUDITED

	Previous reported				Revised
	S/.000		US$000		S/.000		US$000
Cash and cash equivalents	15,530		5,562		15,530		5,562
Trade accounts receivable	74,502		26,684		74,317		26,618
Accounts receivable from related parties	6,605		2,366		10,083		3,611
Prepaid expenses	1,032		369		1,032		369
Investments	2,608		935		2,608		935
Property, plant and equipment	52,504		18,805		52,922		18,955
Intangibles	5,741		2,056		7,591		2,719
Deferred income tax	2,192		785		2,192		785
Trade accounts payable	(5,328	)	(1,908	)	(5,328	)	(1,908	)
Other accounts payable	(38,679	)	(13,854	)	(38,679	)	(13,854	)
Contingent liabilities	(815	)	(292	)	(3,846	)	(1,378	)
Deferred income tax liability	(4,187	)	(1,500	)	(4,692	)	(1,681	)
Fair value of net assets	111,705		40,008		113,730		40,733

Non-controlling interest (14.05%)	(15,701	)	(5,624	)	(15,986	)	(5,725	)
Goodwill	7,868		2,802		6,128		2,178
Total paid for acquisition	103,872		37,186		103,872		37,186

Cash payment for the acquisition	103,872		37,186		103,872		37,186
Cash and cash equivalent of the acquired subsidiary	(15,530	)	(5,562	)	(15,530	)	(5,562	)
Direct cash outflow from acquisition	88,342		31,624		88,342		31,624

The income and the profit generated for the period from the acquisition date to December 31, 2013 amounted to S/.82.97 million and S/.8.3 million, respectively.

If DSD Construcciones y Montajes S.A. had been consolidated from January 1, 2013, the income and the profit generated would have been S/.182.68 million and S/.10.15 million, respectively

20	EVENTS AFTER THE DATE OF THE STATEMENT OF FINANCIAL POSITION

a) On October 03, 2014 we informed about the adjudication of the “Buena Pro” of the Public Bidding for the concession of the “Operation of the collection unit of the integrated transportation system of Lima”, in which we participated as a consortium together with our subsidiary GMD S.A.

We have been expecting to be informed about the date for the signing of the contract, however, on January 20, 2015 we received the official letter 007-2015-MML/IMPL/GG from the Metropolitan Municipality of Lima, indicating that the Protransporte’s Board of Directors has declared the nullity of the “Buena Pro” we were adjudicated, taking back the Public Bidding process until the phase before the publication of the contract draft indicated in the process schedule. This decision is based on the report issued by the Ministry of Economics and Finance which specifies that according to law, they have to issue an opinion regarding the contract previously to the adjudication of it. In this case, the Municipality of Lima sent the mentioned contract for opinion of the Ministry after the adjudication.

It is important to mention that the Group’s backlog doesn’t include any figures related to this contract.

Finally, hereby we inform that we have been analyzing our legal situation facing the decision taken by the Municipality, in order to determine which actions we can take.

- 24 -