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 2016

 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, 2016

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

UNAUDITED

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AT DECEMBER 31, 2014 AND 2015 AND FOR THE PERIOD ENDED IN THIS DATE

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

UNAUDITED

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AT DECEMBER 31, 2014 AND 2015 AND FOR 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

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

ASSETS							LIABILITIES AND EQUITY
			At							At
			December 31,		December 31,					December 31,			December 31,
	Note		2014		2015			Note		2014			2015
Current assets							Current liabilities
Cash and cash equivalents				818,402		554,002	Borrowings		12		1,425,455			1,228,020
Financial asset at fair value through profit or loss				5,601		26,273	Bonds		13		-			37,083
Trade accounts receivables				1,084,544		1,050,791	Trade accounts payable				1,177,581			1,635,760
Unbilled work in progress				1,161,798		1,319,187	Accounts payable to related parties		9		83,027			73,540
Accounts receivable from related parties		9		99,061		280,153	Current income tax				89,614			34,100
Other accounts receivable				584,975		824,556	Other accounts payable				1,007,743			1,072,141
Inventories				833,570		1,159,154	Provisions		14		11,441			13,513
Prepaid expenses				26,438		40,023	Total current liabilities				3,794,861			4,094,157
Non-current assets classified as held for sale				9,513		214
Total current assets				4,623,902		5,254,433	Non-current liabilities
							Borrowings		12		326,124			553,336
Non-current assets							Long-term bonds		13		-			757,008
Long-term trade accounts receivable				579,956		621,831	Long-term trade accounts payable				3,779			-
Long-term unbilled work in progress				35,971		59,754	Other long-term accounts payable				281,651			250,792
Long-term accounts receivable from related parties		9		-		12,018	Long-term accounts payable to related parties		9		-			32,154
Prepaid expenses				9,478		22,386	Provisions		14		54,174			35,618
Other long-term accounts receivable				44,553		65,929	Derivative financial instruments				2,999			2,331
Available-for-sale financial assets		8		93,144		120,134	Deferred income tax liability				93,386			102,360
Investments in associates and joint ventures		10		229,563		650,388	Total non-current liabilities				762,113			1,733,599
Investment property				36,244		34,702	Total liabilities				4,556,974			5,827,756
Property, plant and equipment		11		1,147,018		1,116,442
Intangible assets		11		778,743		876,335	Equity
Deferred income tax asset				152,109		172,981	Capital		15		660,054			660,054
Total non-current assets				3,106,779		3,752,900	Legal reserve				132,011			132,011
							Optional reserve				-			29,974
							Share Premium				899,311			898,417
							Other reserves				(113,895	)		(129,660	)
							Retained earnings				1,113,696			1,064,269
							Equity attributable to controlling interest in the Company				2,691,177			2,655,065
							Non-controlling interest				482,530			524,512
							Total equity				3,173,707			3,179,577
Total assets				7,730,681		9,007,333	Total liabilities and equity				7,730,681			9,007,333
The accompanying notes on pages 8 to 26 are an integral part of the consolidated financial statements.

-2-

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

UNAUDITED

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES

CONSOLIDATED INCOME STATEMENT

			For the year
			ended December 31,
	Note		2014			2015
Revenues from construction activities				4,749,159			5,513,655
Revenues from services provided				1,912,646			1,901,498
Revenue from real estate and sale of goods				346,875			417,280
				7,008,680			7,832,433
Cost of construction activities				(4,336,388	)		(5,309,999	)
Cost of services provided				(1,489,574	)		(1,523,358	)
Cost of real estate and goods sold				(231,150	)		(296,267	)
		16		(6,057,112	)		(7,129,624	)
Gross profit				951,568			702,809
Administrative expenses		16		(421,367	)		(410,789	)
Other income and expenses				15,136			30,097
Operating profit				545,337			322,117
Financial expenses				(102,816	)		(178,948	)
Financial income				11,462			38,107
Share of the profit or loss in associates and joint
ventures under the equity method of accounting				53,445			38,375
Profit before income tax				507,428			219,651
Income tax		17		(146,196	)		(76,799	)
Profit for the year				361,232			142,852
Profit attributable to:
Owners of the Company				299,743			89,084
Non-controlling interest				61,489			53,768
				361,232			142,852
Earnings per share from continuing operations
attributable to owners of the Company during
the year				0.454			0.135
The accompanying notes on pages 8 to 26 are an integral part of the consolidated financial statements.

-3-

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

UNAUDITED

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

			For the year
			ended December 31,
	Note		2014			2015
Profit for the year				361,232			142,852
Other comprehensive income:
Items that will not be reclassified to profit or loss
Remeasurement of actuarial gains and losses, net of tax				(1,777	)		(5,072	)
Items that may be subsequently  reclassified to profit or loss
Cash flow hedge, net of tax				568			723
Foreign currency translation adjustment, net of tax				(20,463	)		(44,710	)
Change in value of available-for-sale financial assets, net of tax		8		4,649			19,433
Exchange difference from net investment in a foreign operation, net of tax				(12,794	)		(5,220	)
				(28,040	)		(29,774	)
Other comprenhensive income for the year, net of tax				(29,817	)		(34,846	)
Total comprehensive income for the year				331,415			108,006
Comprehensive income attributable to:
Owners of  the Company				277,912			69,693
Non-controlling interest				53,503			38,313
				331,415			108,006
The accompanying notes on pages 8 to 26 are an integral part of the consolidated financial statements.

-4-

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

UNAUDITED

	Attributable to the controlling interests of the Company
	Number								Premium			Other
	of shares				Legal		Optional		for issuance			reserves			Retained						Non-controlling
	In thousands		Capital		reserve		reserve		of shares						earnings			Total			interest			Total
	In thousands
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 year		-		-		-		-		-			-			299,743			299,743			61,489			361,232
Cash flow hedge		-		-		-		-		-			540			-			540			28			568
Adjustment for actuarial gains and losses		-		-		-		-		-			-			(1,332	)		(1,332	)		(445	)		(1,777	)
Foreign currency translation adjustment		-		-		-		-		-			(13,086	)		-			(13,086	)		(7,377	)		(20,463	)
Change in value of available-for-sale financial assets		-		-		-		-		-			4,649			-			4,649			-			4,649
Exchange difference from net investment in a foreign operation		-		-		-		-		-			(12,602	)		-			(12,602	)		(192	)		(12,794	)
Comprehensive income of the year		-		-		-		-		-			(20,499	)		298,411			277,912			53,503			331,415
Transactions with shareholders:
- Transfer to legal reserve		-		-		20,354		-		-			-			(20,354	)		-			-			-
- Dividend distribution		-		-		-		-		-			-			(112,127	)		(112,127	)		(68,062	)		(180,189	)
- Contributions of non-controlling shareholders		-		-		-		-		-			-			-			-			47,376			47,376
- Additional acquisition of non-controlling		-		-		-		-		(128,222	)		-			-			(128,222	)		(50,109	)		(178,331	)
- Sale to non-controlling interest in GyM Chile Spa		-		-		-		-											-			1,627			1,627
- Deconsolidation of subsidiaries		-		-		-		-											-			2,284			2,284
- Put option liability from acquisition of non-controlling		-		-		-		-					(111,819	)					(111,819	)		(2,010	)		(113,829	)
- Purchase of subsidiaries		-		-		-		-		-			-			-			-			66,659			66,659
Total transactions with shareholders		-		-		20,354		-		(128,222	)		(111,819	)		(132,481	)		(352,168	)		(2,235	)		(354,403	)
Balances as of December 31, 2014		660,054		660,054		132,011		-		899,311			(113,895	)		1,113,696			2,691,177			482,530			3,173,707
Balances as of January 1, 2015		660,054		660,054		132,011		-		899,311			(113,895	)		1,113,696			2,691,177			482,530			3,173,707
Profit for the year		-		-		-		-		-			-			89,084			89,084			53,768			142,852
Cash flow hedge		-		-		-		-		-			687			-			687			36			723
Adjustment for actuarial gains and losses		-		-		-		-		-			-			(3,626	)		(3,626	)		(1,446	)		(5,072	)
Foreign currency translation adjustment		-		-		-		-		-			(30,748	)		-			(30,748	)		(13,962	)		(44,710	)
Change in value of available-for-sale financial assets		-		-		-		-		-			19,433			-			19,433			-			19,433
Exchange difference from net investment in a foreign operation		-		-		-		-		-			(5,137	)		-			(5,137	)		(83	)		(5,220	)
Comprehensive income of the year		-		-		-		-		-			(15,765	)		85,458			69,693			38,313			108,006
Transactions with shareholders:
- Transfer to Optional  reserve		-		-		-		29,974		-			-			(29,974	)		-			-			-
- Dividend distribution		-		-		-		-		-			-			(104,911	)		(104,911	)		(4,535	)		(109,446	)
- Contributions of non-controlling shareholders		-		-		-		-		-			-			-			-			6,730			6,730
- Additional acquisition of non-controlling		-		-		-		-		(894	)		-			-			(894	)		(971	)		(1,865	)
- Sale to non-controlling interest		-		-		-				-			-			-			-			2,445			2,445
Total transactions with shareholders		-		-		-		29,974		(894	)		-			(134,885	)		(105,805	)		3,669			(102,136	)
Balances as of December 31, 2015		660,054		660,054		132,011		29,974		898,417			(129,660	)		1,064,269			2,655,065			524,512			3,179,577
The accompanying notes on pages 8 to 26 are an integral part of the consolidated financial statements.

-5-

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

UNAUDITED

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

			For the year
			ended December 31,
	Note		2014			2015
OPERATING ACTIVITIES
Profit before income tax				507,428			219,651
Adjustments to  profit not affecting cash flows from
operating activities:
Depreciation		11		185,310			217,070
Amortization of other assets		11		74,730			89,355
Impairment of inventories		16		62			-
Impairment of accounts receivable		16		71			5,019
Impairment of property, plant and equipment		16		2,415			3,813
Impairment of others assets				14,170			-
Reversal of impairment of inventories				(1,169	)		-
Profit on fair value of financial asset at fair value through profit or loss				-			(3,614	)
Gain for the upgrade put options liability				-			(19,220	)
Other Provisions		14		6,559			6,398
Interest income							(18,855	)
Interest expense				-			121,161
Foreign exchange loss on loans				-			44,451
Adjustments to PPA of loans				-			169
Share of the profit and loss in associates
under the equity method of accounting		10		(53,445	)		(38,375	)
Reversal of provisions		14		(9,394	)		(9,012	)
Lower of fixed and intangible assets				-			9,281
Lower of investments				-			2,755
Profit on sale of property, plant and equipment				(4,845	)		(14,788	)
Loss on financial asset at fair value through profit or loss				-			279
Loss on sale of investments				-			5,953
Net variations in assets and liabilities:
Decrease in trade accounts receivable				(594,993	)		(101,474	)
Increase (decrease) in other accounts receivable				32,159			(158,063	)
Decrease in other accounts receivable from related parties				(15,291	)		(142,421	)
Decrease in inventories				(51,489	)		(220,653	)
Increase (decrease) in pre-paid expenses and other assets				(8,634	)		10,262
Increase in trade accounts payable				82,051			199,400
Increase (decrease) in other accounts payable				(19,731	)		(57,061	)
Increase (decrease) in other accounts payable to related parties				58,342			19,621
Decrease in other provisions				(7,208	)		(6,770	)
Payments related to Norvial Concession				(82,698	)		(145,489	)
Payment of income tax				(154,878	)		(150,604	)
Net cash provided by (applied to) operating activities				(40,478	)		(131,761	)
INVESTING ACTIVITIES
Sale of investment in associates				-			1,009
Sale of property, plant and equipment				42,968			62,207
Sale of financial asset at fair value through profit or loss				-			4,604
Sale of non-current assets classified as held for sale				-			327
Return of contributions				-			481
Dividends received		10		36,718			51,960
Payment for purchase of available-for-sale investment				-			-
Payment for purchase of financial asset at fair value through profit or loss				-			(22,245	)
Payment for purchase of investments properties				(1,450	)		(748	)
Payments for intangible purchase				(60,846	)		(30,348	)
Payments for purchase and contributions on investment in associate and joint ventures				(129,859	)		(481,639	)
Direct cash outflow from acquisition of subsidiaries				(167,921	)		-
Payments for property, plant and equipment purchase				(265,567	)		(195,690	)
Net cash applied to investing activities				(545,957	)		(610,082	)
FINANCING ACTIVITIES
Loans received				2,852,271			5,256,873
Amortization of loans received				(2,053,422	)		(4,565,078	)
Payment for transaction costs by issuing bonds				-			(18,517	)
Interest payment				(46,411	)		(111,251	)
Dividends paid to owners of the parent				(112,127	)		(104,911	)
Dividends paid to non-controlling interest				(63,990	)		(4,535	)
Cash received from non-controlling shareholders				47,376			6,730
Acquisition or sale of interest in a subsidiary of non-controlling shareholders				(175,824	)		580
Net cash (applied to) provided by financing activities				447,873			459,891
Net increase (net decrease) in cash				(138,562	)		(281,952	)
Cash decrease in deconsolidation				(2,451	)		-
Cash from acquiisition of Joint Venture				-			17,552
Cash and cash equivalents at the beginning of the year				959,415			818,402
Cash and cash equivalents at the end of the year				818,402			554,002
NON-CASH TRANSACTIONS:
Acquisition of assets through finance leases				163,399			92,093
Adjustment for deconsolidation of former subsidiaries				2,284			-
Change in fair vaue of available-for-sale financial asset				4,649			19,433
Account payable - acquisition of Morelco				45,684			-
Put option liability from acquisition of non-controlling				113,829			-
The accompanying notes on pages 8 to 26 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, 2015 (UNAUDITED), AND AT DECEMBER 31, 2014 (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.

These condensed interim consolidated financial statements as of December 31, 2015 have been prepared and authorized for issuance by the Chief Financial Officer on January 28, 2016.

2 BASIS OF PREPARATION

These condensed interim consolidated financial statements for the period ended December 31, 2015 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, 2014, 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, 2014.

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.

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, 2014.  There have been no changes since year-end in the risk management department of the Group or in any risk management policies.

4.1.1Market risk –

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

-7-

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

UNAUDITED

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 with the previous year, there was significant variation in the cash flow of undiscounted contractual due to the issuance of bonds by the subsidiries GyM Ferrovías and Norvial.

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		From 1 to		From 2 to		Over
	year		2 years		5 years		5 years		Total
At December 31, 2014
Other financial liabilities (except
finance leases)		1,318,817		72,696		56,206		-		1,447,719
Finance leases		138,988		92,242		122,378		11,224		364,832
Trade payables		1,178,849		3,779		-		-		1,182,628
Payables to related parties		83,027		-		-		-		83,027
Other payables		337,692		32,449		-		-		370,141
Other non-financial liabilities		-		2,999		-		-		2,999
		3,057,373		204,165		178,584		11,224		3,451,346
At December 31, 2015
Other financial liabilities (except
finance leases)		1,102,855		181,729		223,713		-		1,508,297
Finance leases		157,957		118,311		42,513		10,431		329,212
Bonds payable		97,391		173,994		350,721		1,124,826		1,746,932
Trade payables		1,635,760		-		-		-		1,635,760
Payables to related parties		73,540		31,746		-		408		105,694
Other payables		636,790		51,709		34,953		7,034		730,486
Other non-financial liabilities		-		2,331		-		-		2,331
		3,704,293		559,820		651,900		1,142,699		6,058,712

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.

As of December 31, 2014 and December 31, 2015, 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,
	2014			2015
Total borrowing and bonds		1,751,579			2,575,447
Less: Cash and cash equivalents		(818,402	)		(554,002	)
Net debt		933,177			2,021,445
Total equity		3,173,707			3,179,577
Total capital		4,106,884			5,201,022
Gearing ratio		0.23			0.39

-8-

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

UNAUDITED

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, 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 fair value of the investment held in Transportadora de Gas del Perú S.A. (TGP) classified as  available-for-sale financial asset was based on unobservable inputs in the market; the Group calculated its fair value based on its discounted cash flows as of the financial statement date. The information used to determine the fair value of this investment corresponds to Level 3 (Note 8).

Financial assets classified as at fair value through profit or loss corresponds to investments in mutual funds and bonds. Their fair value has been determined with observable information of Level 2.

Other financial instruments measured at fair value correspond to the interest rate swaps signed by subsidiary GMP S.A., by which a variable-interest instrument is changed to a fixed interest rate (cash flow hedge). The information used for determining the fair value of these instruments are Level 2 and has been determined based on the present value of discounted future cash flows applied to the interest-rate change projections of Citibank N.A.

The carrying amounts of cash and cash equivalents correspond to their fair values. The Company considers that the carrying amount of trade accounts receivable and payable is similar to their fair values. The fair value of financial liabilities, disclosed in Note 12-b), 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 Company for similar financial instruments (Level 2).

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, 2014.

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.

-9-

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

UNAUDITED

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

UNAUDITED

Operating segments financial position
Segment reporting
	Engineering		Infrastructure												Parent
	and								Water		Real		Technical		Company
	construction		Energy		Toll roads		Mass transit		treatment		estate		services		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
Financial asset at fair value through profit or loss		5,601		-		-		-		-		-		-		-		-			5,601
Trade accounts receivables		581,150		35,201		46,598		71,817		-		57,584		292,160		34		-			1,084,544
Unbilled work in progress		1,145,412		1,414		-		-		14,972		-		-		-		-			1,161,798
Accounts receivable from related parties		121,989		6,723		-		216		-		6,561		65,242		371,765		(473,435	)		99,061
Other accounts receivable		389,805		10,781		9,042		29,515		3,154		11,409		63,797		66,414		1,058			584,975
Inventories		126,293		7,921		-		13,909		-		630,758		55,601		486		(1,398	)		833,570
Prepaid expenses		11,483		891		822		6,056		407		235		5,120		1,424		-			26,438
Non-current assets classified as held for sale		9,513		-		-		-		-		-		-		-		-			9,513
Total current assets		2,676,613		117,016		109,774		173,035		26,940		760,815		616,598		616,886		(473,775	)		4,623,902
Long-term trade accounts receivable		-		-		-		579,956		-		-		-		-		-			579,956
Long-term unbilled work in progress		-		25,387		10,584		-		-		-		-		-		-			35,971
Long-term accounts receivable from related parties		-		-		408		-		-		-		433		182,548		(183,389	)		-
Prepaid expenses		-		-		2,416		7,062		-		-		-		-		-			9,478
Other long-term accounts receivable		6,192		4,449		11,776		4,131		1,587		9,705		4,496		2,217		-			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		1,729,640		(1,742,253	)		229,563
Investment property		-		-		-		-		-		36,244		-		-		-			36,244
Property, plant and equipment		651,165		193,183		2,036		14,270		-		7,344		166,322		119,483		(6,785	)		1,147,018
Intangible assets		323,231		146,477		234,923		6,247		1,100		1,187		33,508		17,417		14,653			778,743
Deferred income tax asset		107,469		714		4,604		244		-		9		37,557		926		586			152,109
Total non-current assets		1,249,995		378,584		266,747		611,910		2,687		117,352		252,377		2,145,375		(1,918,248	)		3,106,779
Total assets		3,926,608		495,600		376,521		784,945		29,627		878,167		868,975		2,762,261		(2,392,023	)		7,730,681
Liabilities.-
Borrowings		629,584		69,577		95,902		404,915		-		144,314		80,531		632		-			1,425,455
Trade accounts payable		938,774		27,148		3,250		12,385		159		31,690		155,714		8,461		-			1,177,581
Accounts payable to related parties		89,445		1,061		55,679		278,819		24,552		24,106		82,203		12,421		(485,259	)		83,027
Current income tax		71,287		5,493		249		32		138		1,150		11,259		6		-			89,614
Other accounts payable		771,127		18,518		26,076		2,308		-		65,316		101,973		22,425		-			1,007,743
Provisions		-		8,414		-		-		-		-		3,027		-		-			11,441
Total current liabilities		2,500,217		130,211		181,156		698,459		24,849		266,576		434,707		43,945		(485,259	)		3,794,861
Borrowings		144,081		99,767		633		-		-		16,368		63,070		2,205		-			326,124
Long-term trade accounts payable		-		-		1,622		2,157		-		-		-		-		-			3,779
Other long-term accounts payable		201,227		349		495		4,820		-		4,679		69,201		880		-			281,651
Long-term accounts payable to related parties		-		-		-		-		-		109,126		62,522		-		(171,648	)		-
Provisions		34,148		5,774		-		-		-		-		14,252		-		-			54,174
Derivative financial instruments		-		2,999		-		-		-		-		-		-		-			2,999
Deferred income tax liability		65,787		1,331		-		-		325		8,707		7,021		10,215		-			93,386
Total non-current liabilities		445,243		110,220		2,750		6,977		325		138,880		216,066		13,300		(171,648	)		762,113
Total liabilities		2,945,460		240,431		183,906		705,436		25,174		405,456		650,773		57,245		(656,907	)		4,556,974
Equity attributable to controlling interest in the Company		817,751		236,925		150,788		59,633		4,453		157,276		128,428		2,695,401		(1,559,478	)		2,691,177
Non-controlling interest		163,397		18,244		41,827		19,876		-		315,435		89,774		9,615		(175,638	)		482,530
Total liabilities and equity		3,926,608		495,600		376,521		784,945		29,627		878,167		868,975		2,762,261		(2,392,023	)		7,730,681

-11-

(All amounts are expressed in thousands 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, 2015
Assets.-
Cash and cash equivalents		172,116		42,638		58,640		111,454		9,094		74,459		60,193			25,408		-			554,002
Financial asset at fair value through profit or loss		26,273		-		-		-		-		-		-			-		-			26,273
Trade accounts receivables		614,917		43,260		22,045		63,516		-		59,108		247,945			-		-			1,050,791
Unbilled work in progress		1,301,501		-		-		-		17,686		-		-			-		-			1,319,187
Accounts receivable from related parties		316,188		12,145		18,820		301		-		34,724		48,520			132,735		(283,280	)		280,153
Other accounts receivable		599,127		25,857		5,699		25,668		10,250		20,535		102,251			35,249		-			824,636
Inventories		159,557		10,025		-		13,678		-		920,092		61,734			389		(6,321	)		1,159,154
Prepaid expenses		12,899		2,207		1,401		10,787		458		349		11,402			520		-			40,023
Non-current assets classified as held for sale		214		-		-		-		-		-		-			-		-			214
Total current assets		3,202,792		136,132		106,605		225,404		37,488		1,109,267		532,045			194,301		(289,601	)		5,254,433
Long-term trade accounts receivable		-		-		-		621,831		-		-		-			-		-			621,831
Long-term unbilled work in progress		-		40,727		19,027		-		-		-		-			-		-			59,754
Long-term accounts receivable from related parties		-		-		408		-		-		-		500			256,022		(244,912	)		12,018
Prepaid expenses		-		3,692		15,584		2,112		998		-		-			-		-			22,386
Other long-term accounts receivable		534		14,214		30,473		2,198		1,589		14,727		(1	)		2,195		-			65,929
Available-for-sale financial assets		-		-		-		-		-		-		-			120,134		-			120,134
Investments in associates and joint ventures		122,717		8,265		-		-		-		28,732		9,228			2,587,270		(2,105,824	)		650,388
Investment property		-		-		-		-		-		34,702		-			-		-			34,702
Property, plant and equipment		606,158		198,774		1,624		217		-		11,302		175,322			130,137		(7,092	)		1,116,442
Intangible assets		302,992		137,130		364,819		311		-		1,043		32,903			23,537		13,600			876,335
Deferred income tax asset		126,471		1,325		3,003		-		-		1,171		39,034			656		1,321			172,981
Total non-current assets		1,158,872		404,127		434,938		626,669		2,587		91,677		256,986			3,119,951		(2,342,907	)		3,752,900
Total assets		4,361,664		540,259		541,543		852,073		40,075		1,200,944		789,031			3,314,252		(2,632,508	)		9,007,333
Liabilities.-
Borrowings		652,974		101,096		55,428		-		-		224,380		91,366			102,776		-			1,228,020
Bonds		-		-		5,537		31,546		-		-		-			-		-			37,083
Trade accounts payable		1,409,981		35,428		3,768		24,498		154		14,334		134,974			12,623		-			1,635,760
Accounts payable to related parties		114,089		3,990		40,578		9,962		10,560		58,790		39,476			79,711		(283,616	)		73,540
Current income tax		19,322		-		753		-		166		26		13,750			83		-			34,100
Other accounts payable		649,602		20,340		2,841		1,682		-		257,616		127,207			12,853		-			1,072,141
Provisions		-		6,341		-		-		-		-		7,172			-		-			13,513
Total current liabilities		2,845,968		167,195		108,905		67,688		10,880		555,146		413,945			208,046		(283,616	)		4,094,157
Borrowings		375,952		83,307		-		-		-		27,562		66,515			-		-			553,336
Long-term bonds		-		-		180,686		576,322		-		-		-			-		-			757,008
Long-term trade accounts payable		-		-		-		-		-		-		-			-		-			-
Other long-term accounts payable		178,789		-		493		-		-		-		70,296			1,214		-			250,792
Long-term accounts payable to related parties		-		-		-		94,172		24,035		120,083		38,332			-		(244,468	)		32,154
Provisions		24,624		7,034		-		-		-		-		3,960			-		-			35,618
Derivative financial instruments		-		2,331		-		-		-		-		-			-		-			2,331
Deferred income tax liability		52,593		4,250		107		9,723		270		11,937		2,742			20,738		-			102,360
Total non-current liabilities		631,958		96,922		181,286		680,217		24,305		159,582		181,845			21,952		(244,468	)		1,733,599
Total liabilities		3,477,926		264,117		290,191		747,905		35,185		714,728		595,790			229,998		(528,084	)		5,827,756
Equity attributable to controlling interest in the Company		719,053		255,032		198,345		78,127		4,890		158,605		158,561			3,071,802		(1,989,350	)		2,655,065
Non-controlling interest		164,685		21,110		53,007		26,041		-		327,611		34,680			12,452		(115,074	)		524,512
Total liabilities and equity		4,361,664		540,259		541,543		852,073		40,075		1,200,944		789,031			3,314,252		(2,632,508	)		9,007,333

-12-

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

UNAUDITED

Operating segment performance
Segment Reporting
	Engineering			Infrastructure																		Parent
	and construction			Energy			Toll roads			Mass transit			Water treatment			Real estate			Technical services			Company operations			Eliminations			Consolidated
For the period
ended December 31, 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		535,360			124,455			76,697			42,109			2,307			62,413			142,342			(7,574	)		(26,541	)		951,568
Administrative expenses		(258,554	)		(17,256	)		(8,035	)		(14,714	)		(317	)		(21,058	)		(122,506	)		(35,444	)		56,517			(421,367	)
Other income and expenses		(9,796	)		(3,359	)		33			18			-			(852	)		5,856			22,063			1,173			15,136
Operating profit		267,010			103,840			68,695			27,413			1,990			40,503			25,692			(20,955	)		31,149			545,337
Financial expenses		(69,046	)		(11,564	)		(11,321	)		(5,245	)		(55	)		(14,807	)		(27,393	)		(1,725	)		38,340			(102,816	)
Financial income		6,623			120			1,819			727			16			93			1,821			59,893			(59,650	)		11,462
Share of the profit or loss
in associates and joint ventures under the equity
method of accounting		48,242			29			-			-			-			12,178			590			270,045			(277,639	)		53,445
Profit before income tax		252,829			92,425			59,193			22,895			1,951			37,967			710			307,258			(267,800	)		507,428
Income tax		(59,252	)		(29,768	)		(16,158	)		(10,842	)		(588	)		(11,452	)		(5,788	)		(12,582	)		234			(146,196	)
Profit for the year		193,577			62,657			43,035			12,053			1,363			26,515			(5,078	)		294,676			(267,566	)		361,232
Profit attributable to:
Owners of the Company		164,095			59,010			32,774			9,040			1,363			9,527			(5,342	)		294,948			(265,672	)		299,743
Non-controlling interest		29,482			3,647			10,261			3,013			-			16,988			264			(272	)		(1,894	)		61,489
		193,577			62,657			43,035			12,053			1,363			26,515			(5,078	)		294,676			(267,566	)		361,232

-13-

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

UNAUDITED

Operating segment performance
Segment Reporting
	Engineering			Infrastructure																		Parent
	and construction			Energy			Toll roads			Mass transit			Water treatment			Real estate			Technical services			Company operations			Eliminations			Consolidated
For the period
ended December 31, 2015
Revenue		5,841,559			389,377			394,462			211,279			27,994			215,764			1,152,544			70,531			(471,077	)		7,832,433
Gross profit		357,278			63,530			78,544			48,804			2,225			51,755			178,303			(7,004	)		(70,626	)		702,809
Administrative expenses		(287,553	)		(18,214	)		(10,319	)		(10,529	)		(310	)		(19,521	)		(115,018	)		(29,882	)		80,557			(410,789	)
Other income and expenses		12,880			1,365			55			2			-			1,759			5,894			11,114			(2,972	)		30,097
Operating profit		82,605			46,681			68,280			38,277			1,915			33,993			69,179			(25,772	)		6,959			322,117
Financial expenses		(129,529	)		(19,953	)		(4,713	)		(5,303	)		(45	)		(11,642	)		(32,246	)		(2,818	)		27,301			(178,948	)
Financial income		8,875			158			8,722			2,316			121			746			2,145			56,101			(41,077	)		38,107
Share of the profit or loss
in associates and joint ventures under the equity
method of accounting		15,035			944			-			-			-			14,888			589			80,659			(73,740	)		38,375
Profit before income tax		(23,014	)		27,830			72,289			35,290			1,991			37,985			39,667			108,170			(80,557	)		219,651
Income tax		(29,750	)		(7,650	)		(18,794	)		(10,630	)		(520	)		(7,649	)		5,231			(9,208	)		2,171			(76,799	)
Profit for the year		(52,764	)		20,180			53,495			24,660			1,471			30,336			44,898			98,962			(78,386	)		142,852
Profit attributable to:
Owners of the Company		(65,755	)		17,072			40,010			18,495			1,471			12,983			38,519			99,704			(73,415	)		89,084
Non-controlling interest		12,991			3,108			13,485			6,165			-			17,353			6,379			(742	)		(4,971	)		53,768
		(52,764	)		20,180			53,495			24,660			1,471			30,336			44,898			98,962			(78,386	)		142,852

-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 AVAILABLE-FOR-SALE FINANCIAL ASSETS

This account comprises the investment held by the Company, directly and indirectly, in Transportadora de Gas del Perú S.A. (TGP), a Peruvian entity engaged in providing gas transportation services.

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) obtaining a total interest of 1.64% at December 31, 2013.  At December 31, 2013, the fair value of the Group´s interest in TGP equals S/.88.3 million, based on the price paid in one recent arm's length transaction which occurred in December 2013 among knowledgeable willing parties. The fluctuation in the fair value of this investment in 2013 amounts to S/.19.1 million, net of its income tax effect amounting to for S/.8.2 million. The net amount has been recognized in the statement of 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-sheet transaction because, in substance, the Company is acting as an agent to CPPIB. Therefore, the Company did not recognized either the investment in TGP nor any obligation to CPPIB.

This acquisition is part of an investment agreement entered into with CPPIB, whereby both parties commit themselves to initiate and develop projects in the oil and gas industry.

On December 27, 2013 the Company announced its intention to transfer the previously acquired interest of 11.34% in TGP to CPPIB (10.43%) and to Corporación Financiera de Inversiones – CFI (0.91%), if none of the existing TGP shareholders exercise their first option of share acquisition rights.

On February 27, 2014, the Company transferred the shares to the above indicated entities, retaining in TGP an interest equivalent to 1.64%, for this transaction the Group obtained a commission fee of S/.7.5 million which is included in ‘other income and expenses’.

At December 31, 2014, the fair value of the Group´s interest in TGP equals S/.93.14 million based on the discounted cash flow method. The information used in the calculation is as follows:

-   Discounted cash flows from operating activities of TGP net of cash flows from investment activities (CAPEX).

-   Cash flows were estimated for a 30 year term.

-   The discount rate used is 8% corresponding to the Company’s WACC.

-   The interest of the Company in TGP is 1.64% as of December 31, 2014

The fluctuation in the fair value of this investment in 2014 amounts to S/.3.56 million, net of its income tax effect amounting to  S/.1.25 million, plus the adjustment for changes in rate of income tax amounting to S/.1.09 million, which has been recognized in the statement of other comprehensive income.

-15-

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

UNAUDITED

The fluctuation in the fair value of this investment in 2015 amounts to S/.9.83 million, net of its income tax effect amounting to S/.3.82 million, plus the adjustment for changes in rate of income tax amounting to S/.3.74 million, which has been recognized in the statement of other comprehensive income.

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,
	2014		2015
Revenue from sale of goods and services:
- Associates		6,040		1,400
- Joint operations		43,897		52,384
		49,937		53,784

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

b)      Balances of transactions with related parties

-16-

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

UNAUDITED

	At December 31,		At December 31,
	2014		2015
	Receivable	Payable	Receivable	Payable
Consorcio Constructor Ductos del Sur	-	-	154,383	-
Consorcio GyM Conciviles	48,581	-	57,679	-
Consorcio Rio Urubamba	5,107	3,796	10,856	2,819
Consorcio Terminales del Perú	-	-	9,459	-
Adexus S.A.	-	-	8,521	-
Consorcio Peruano de Conservación	15365	-	6,270	-
Consorcio Rio Mantaro	-	-	6,021	15,941
Energía y Vapor	-	-	3,328	-
Consorcio Terminales	6,837	-	3,235	-
Consorcio La Gloria	3,805	3,423	3,116	3,077
Ingenieria y Construccion Sigdo Koppers-Vial y Vives O	-	35,302	2,659	3,900
Consorcio Constructor Chavimochic	141	2,896	2,558	6,422
Consorcio Menegua	-	-	1,910	-
Constructora incolur DSD Ltda	-	-	1,681	-
Consorcio Lima	877	-	1,430	-
Consorcio Norte Pachacutec	531	1,068	1,026	669
Revamps U250	-	-	970	965
Monterrey	-	-	807	-
Consorcio Italo Peruano	-	-	465	21,907
Consorcio Constructor Alto Cayma	1,424	-	387	-
Genorsac	-	-	327	-
Consorcio Construcciones y Montajes	116	1,198	112	2,533
Consorcio Rio Pallca	187	282	109	811
Bechtel Vial y Vives Servicios Complementarios Ltda.	96	4,648	84	6,957
Consorcio Huacho Pativilca	369	4,555	80	5,041
Consorcio Tren Electrico	7,380	-	-	-
Consorcio Sistemas SEC	4,349	-	-	-
Consorcio JV PAnamá	1,043	-	-	-
Consorcio Alto Cayma	121	700	-	-
Consorcio Vial Quinua	115	-	-	-
Consorcio Ingenieria y Construcción Bechtel	-	5,140	-	-
Consorcio EIMISA	-	2,955	-	-
Consorcio Atocongo	-	915	-	-
Other minor	2,617	2,056	2,680	2,498
	99,061	68,934	280,153	73,540
Ferrovias Argentina S.A.	-	14,093	-	20,136
Concesionaria La Chira	-	-	12,018	12,018
	-	14,093	12,018	32,154
	99,061	83,027	292,171	105,694

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

As of December 31, 2015, associates in which the Group has significant influence are similar to those existing as of December 31, 2014, except for the acquisitions mentioned.

-17-

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

UNAUDITED

The movement of our investments in associates for the period ended December 31, 2014 and December 31, 2015 is as follows:

	2014		2015
Beginning balance	87,967		229,563
Acquisition and/or contributions received	129,859		481,639
Reduction of capital	-		(3,364	)
Share of the profit and loss in associates
under the equity method of accounting	53,445		38,375
Dividends received	(36,718	)	(51,960	)
Asociación Panorama	-		(39,180	)
Other	(4,990	)	(4,685	)
Ending balance	229,563		650,388

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 wich the Company has 26.5% interest. As of March 14, 2014 the Company has issued S/.13.3 million equity.

In January 2014, the Company signed a Joint Venture Agreement with Inversiones Maje SA in order to develop the Panorama project that consisted in building and sale of offices and commercial establishments located in Surco, the Company participated with 35% and Inversiones Maje SA with 65%.

On December 17, 2015 and be of interest to both parties that they actively and directly participate in decision-making, management and business administration; those agreed to resolve in advance the Association Agreement and continue the business in a joint venture with the same levels of holding referred to in the preceding paragraph. Due to the liquidation of the Association, the Company generated a profit of S/. 0.21 million.

As a consequence of the liquidation of the Association and the recognition of the result of the joint venture in December, the company received for its contribution of S/.39.18 million the 35% of the assets and liabilities of the Joint Venture, that is S/. 142.02 and S/.102.84 million respectively.

In August 2015, the Company and Sistemas y Redes Limitada shareholders signed the Pact Adexus SA, and on that date the issue of 23,571 new shares by Adexus and payments made by the Company in full thereof new shares.With this, the Company has 44% interest with a contribution of S/.44.1 million.

Also in August 2015, as part of a private placement, the Company through its indirect subsidiary Stracon GyM SA has signed the 19.94% of shares of Red Eagle Mining Corporation for an amount of US$7 million (equivalent to S/.22.3 million). Additionally, held a mining services contract for US$155 million to develop and operate for eight years the San Ramon mine (Colombia) owned by the company Red Eagle Mining Corporation.

In November 2015 the subsidiary Negocios del Gas S.A. adquired a 20% interest of Concesionaria Gaseoducto Sur Peruano representing an investment of approximately US $ 215 million, as of December 2015 the contribution was S/. 391 millon.

Concesionaria Gasoducto Sur Peruano is responsible for the design, construction  and operation of pipeline systemsfor transportation of gas and associated liquids to southern Peru. This project will bring natural gas primarily to the departments of Cusco, Arequipa, Puno and Moquegua.

11 PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS

For the period ended December 31,2014 and 2015, the movement in property, plant and equipment and intangible assets accounts was as follows:

-18-

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

UNAUDITED

and intangible assets accounts was as follows:

	Property,
	plant and			Intangible
	equipment			assets
At January 1, 2014		952,906			480,885
Additions		428,966			143,544
Acquisition of subsidiary - net		69,835			175,334
Transfers, disposals and adjustments		( 83,407	)		53,710
Deductions for sale of assets		( 38,123	)		-
Depreciation, amortization		(183,159	)		(74,730	)
Net cost at December 31, 2014		1,147,018			778,743
At January 1, 2015		1,147,018			778,743
Additions		300,491			180,602
Transfers, disposals and adjustments		( 77,840	)		6,345
Deductions for sale of assets		( 38,447	)		-
Depreciation, amortization		(214,780	)		(89,355	)
Net cost at December 31, 2015		1,116,442			876,335

As of December 30, 2014 and 2015, additions to property, plant and equipment comprise of acquisition of plant and equipment intended for the Group’s operations.

As of December 31, 2014, the amounts registered in Property, plant and equipment and intangible assets were obtained through the acquisition of Coasin Instalaciones Limitada (Note 20.a), direct control acquired by CAM Chile S.A. and Morelco S.A.S.

As of December 31, 2015, the amounts registered in Intangible assets comprise of investements in building  the second Ancón-Huacho-Pativilca road section of the Panamericana Norte highway (concession under intangible model ).

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, 2014		31, 2015
Construction - Engineering		135,461		140,090
Construction - Mining services		13,366		13,366
Construction - Electromechanical		20,737		20,737
IT services		4,172		4,172
Telecommunications Services		6,413		6,443
		180,149		184,808

-19-

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

UNAUDITED

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, 2015 same criteria were applied as those in test impairment at December 31, 2014.

12 BORROWINGS

This item comprises:

	Total				Current				Non-current
	At		At		At		At		At		At
	December		December		December		December		December		December
	31, 2014		31, 2015		31, 2014		31, 2015		31, 2014		31, 2015
Bank loans		1,419,428		1,480,071		1,300,636		1,082,860		118,792		397,211
Leases		332,151		301,285		124,819		145,160		207,332		156,125
		1,751,579		1,781,356		1,425,455		1,228,020		326,124		553,336

a)     Bank loans -

As of December 31, 2015 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 1.0% and 9.0% in 2014 and between 1% and 13.1% in 2015.

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 finance the construction of the second stage of the "Ancon - Huacho Pativilca" road.

In June 2014, the subsidiary GyM Ferrovías S.A. signed a short term loan with BBVA Continental of S/.200 million at an interest rate of 5.75%, due on December 2014.  In December 2014, the short term loan with BBVA Continental was refinanced through a short term loan provided by BCP, due in February 2015. 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.  These loans were canceled with an international bond issuance under the Regulation S, placed in February 2015. 

As of December 31, 2015, the Company maintained unused credit limits for S/.4,666 million, which expire within one year (S/.2,459 million as of December 31, 2014).

b)      Fair value of borrowings -

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

	Carrying amounts				Fair value
	At December		At December		At December		At December
	31, 2014		31, 2015		31, 2014		31, 2015
Other loans		1,751,579		1,781,356		1,705,843		1,792,046

The fair value is based on cash flows discounted using a rate based on the borrowing rate of 4.8% and 13.1% (4.4% and 8.0% in 2014). It should be noted that the interest rate used are those applicable and negotiated by each Company.

-20-

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

UNAUDITED

13 BONDS

On February 10th, 2015, the subsidiary GyM Ferrovías completed an international corporate bonds issuance under the Regulation S.  The bonds were issued in Soles VAC (adjusted by the “Valor de Actualización Constante”) for an amount of S/. 629 million.  The bonds are due on November 25th, 2039 (a tenor of 24.8 years), and interest rate of 4.75% (plus the VAC adjustment), a local rating of AA+ provided by Apoyo & Asociados Internacionales Clasificadora de Riesgo, and are secured by Mortgage on the Concession, Lien on GyM Ferrovías shares, Assignment of Collection Rights on the Administration Trust, a Cash Flow Trust and Reserve Accounts for Debt Service, Operation and Maintenance and Ongoing Capex.  The bonds were assigned to Insurance Companies, Peruvian Pension Funds and Government Funds.  The proceeds from the issuance were used to amortize a short term loan provided by Banco de Crédito del Perú-BCP for S/.400 million, funding of the reserve accounts, payment of the issuance expenses, and finally the partial repayment of a subordinated loan provided by Graña y Montero S.A.A. to GyM Ferrovías.

The July 23, 2015, Norvial SA issued the First Corporate Bond Program on the Lima Stock Exchange, the total amount of S/.365 million. The first issue was for S/.80 million for a term of 5 years at a nominal interest rate of 6.75%. The second issue was for S/. 285 million for a term of 11.5 years with a nominal interest rate of 8.375%; was structured in 3 disbursement, on July 23 the first disbursement was received for S/.105 million, and the next two are due in January and July 2016 by S/.100 million and S/.80 million, respectively. Risk rating agencies Equilibrium and Apoyo & Asociados International awarded the AA rating to the debt instrument. This financing is secured by: (i) The Trust flows, except flows corresponding to the remuneration and fee regulation; (ii) the mortgage on the Concession; (iii) Secured Transactions Shares; (iv) transfer of rights; and (v) In general, any additional guarantees granted in favor of Secured Creditors. The purpose of the award funds is to finance the construction of the second stage of the Road Network No. 5 and the financing of VAT linked to the implementation of the project expenses.

14 PROVISIONS

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

	At December		At December
	31, 2014		31, 2015
Current portion		11,441		13,513
Non-current portion		54,174		35,618
		65,615		49,131

The movement of this item for the period ended December 31, 2014 and 2015 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, 2014		12,217			9,852			21,546			4,852			3,846			52,313
Additions		1,376			-			-			2,696			2,487			6,559
Additions from business combinations		-			27,651			-			-			-			27,651
Reversals					(4,306	)		(9,394	)		-						(13,700	)
Payments		(537	)		-			-			(338	)		(6,333	)		(7,208	)
At December 31, 2014		13,056			33,197			(12,152	)		7,210			-			65,615
At January 1, 2015		13,056			33,197			12,152			7,210			-			65,615
Additions		5,748			549			-			101			-			6,398
Translation adjustment		(375	)		(3,835	)		( 537	)		-			-			(4,747	)
Reversals		-			(3,569	)		(7,796	)		-			-			(11,365	)
Payments		(1,580	)		( 5,186	)		-			(4	)		-			(6,770	)
At December 31, 2015		16,849			21,156			3,819			7,307			-			49,131

Reversals for the period ended December 31, 2015 mainly consists of write-offs of provisions recognized in conjunction with the purchase price allocation related to acquisition of CAM Chile in S/.7.8 million. (S/.9.4 million as of December 31, 2014).

-21-

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

UNAUDITED

15 CAPITAL

As of December 31, 2014 and December 31, 2015, 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.

As of December 31, 2014, the amount of 253,635,480 common shares is represented by 50,727,096 ADSs, at 5 shares per ADS.

As of December 31, 2015, the amount of 250,860,370 common shares is represented by 50,172,074 ADSs, at 5 shares per ADS.

16 EXPENSES BY NATURE

For the period ended December 31, 2014 and 2015, this item comprises:

	Cost of services and goods			Administrative expenses
2014
Purchase of goods		1,218,522			836
Personnel charges		1,864,053			210,028
Services provided by third-parties		2,105,226			120,714
Taxes		11,356			6,212
Other management charges		686,593			63,124
Depreciation		170,785			14,525
Amortization		68,089			6,641
Impairment		2,477			71
Variation of inventories		(69,989	)		(784	)
		6,057,112			421,367
2015
Purchase of goods		1,420,420			-
Personnel charges		2,128,130			215,101
Services provided by third-parties		2,915,591			137,980
Taxes		37,129			1,919
Other management charges		656,301			30,220
Depreciation		199,013			18,055
Amortization		81,841			7,514
Impairment		8,633			-
Variation of inventories		(325,584	)		-
		7,121,474			410,789

17 INCOME TAX

These condensed interim consolidated financial statements for the period ended December 31, 2015, income tax expense is recognised based on management’s estimate of the weighted average annual income tax rate expected for the full financial year. The estimated average annual tax rate used for the year to 31 december 2015 is 41.68% (28.81% for the period ended December 31, 2014). 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.

-22-

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

UNAUDITED

18 CONTINGENCIES, COMMITTMENTS AND GUARANTEES

As of December 31, 2015, contingencies held by the Group are substantially the same as those existing as of December 31, 2014.

In addition the Group had guarantee commitments with different financial institutions securing transactions in the amount of US$21.6 million.

19 DIVIDENDS

For the period ended December 31, 2015 , the Group has paid dividends to its non-controlling subsidiaries participate by S/.5 million (S/.68 million for the same period in 2014).

Dividends from the year ended December 31, 2014, of S/.0.159 per share totaling S/. 104,910,523 were approved at the General Shareholders’ meeting held on March 27, 2015, and was paid on April 2015.

20 BUSINESS COMBINATIONS

a)    Acquisition of Coasin Instalaciones Limitada.

In March 2014, through the subsidiarie CAM Chile S.A., 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.

During the period of twelve months after the acquisition date the Group reassessed the purchase price allocation from the acquisition of Coasin Instalaciones Limitada which was made in March 2014 and reallocated the amount of S/.0.67 million from goodwill (net of tax impact of S/.0.19 million to trade accounts receivable in the amounts of S/.0.86 million. This effect corresponds to the measurement period adjustment of the preliminary fair value assigned to the assets and liabilities acquired.

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/.6.4 million at the acquisition date, which is detailed as follows:

	Previous reported						Revised
	S/.000			US$000			S/.000			US$000
Cash and cash equivalents		3			1			3			1
Trade accounts receivable		4,675			1,564			3,811			1,275
Inventories		276			92			276			92
Prepaid expenses		33			11			33			11
Property, plant and equipment		711			238			711			238
Intangibles		1,377			461			1,377			461
Deferred income tax		(178	)		(60	)		16			4
Trade accounts payable		(3,592	)		(1,202	)		(3,592	)		(1,202	)
Contingent liabilities		(2,658	)		(889	)		(2,658	)		(889	)
Fair value of net assets		647			216			(23	)		(9	)
Goodwill		5,743			1,921			6,413			2,146
Total paid for acquisition		6,390			2,137			6,390			2,137
Cash payment for the acquisition		6,390			2,137			6,390			2,137
Cash and cash equivalent
of the acquired subsidiary		(3	)		(1	)		(3	)		(1	)
Direct cash outflow from acquisition		6,387			2,136			6,387			2,136

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

-23-

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

UNAUDITED

b)    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:

	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

c)    Acquisition of Morelco S.A.S.

-24-

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

UNAUDITED

In December 23, 2014, through subsidiary GyM S.A. the Company obtained control of Morelco S.A.S. (Morelco) by acquiring 70.00% of its capital shares. Morelco is an entity domiciled in Colombia that is mainly engaged in providing construction and assembly services.  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.

The acquisition value of the investment in Morelco amounted to US$74.7 million (equivalent to S/.222.2 million) which is comprised of cash payments of US$78.5 million (equivalent to S/.231.5 million), a balance payable of US$9.1 million (equivalent to S/.27.1 million), and resulted in the recognition of goodwill for US$35.2 million (equivalent to S/.103 million) at the acquisition date.

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

	Previous reported						Revised
	S/.000			US$000			S/.000			US$000
Cash and cash equivalents		69,930			23,514			69,930			23,514
Trade receivables		92,138			30,981			67,716			22,769
Outstanding work accounts
in progress – receivables from clients		101,533			34,140			110,777			37,248
Other receivables		63,949			21,503			63,949			21,504
Inventories		18,037			6,065			18,037			6,065
Prepaid expenses		2,133			717			2,127			715
Investments held for sale		7,291			2,452			5,747			1,932
Property, plant and equipment		70,756			23,792			69,081			23,228
Intangibles		64,491			21,685			64,491			21,685
Deferred income tax assets		8,031			2,700			24,560			8,258
Short-term borrowings		(31,204	)		(10,492	)		(31,204	)		(10,492	)
Long-term borrowings		(9,315	)		(3,132	)		(9,315	)		(3,132	)
Trade accounts payables		(103,739	)		(34,882	)		(102,438	)		(34,444	)
Other accounts payables		(87,863	)		(29,544	)		(87,863	)		(29,544	)
Contingent liabilities		(17,533	)		(5,895	)		(24,993	)		(8,404	)
Deferred income tax liability		(3,801	)		(1,278	)		(18,404	)		(6,188	)
Fair value of net assets (provisional)		244,834			82,326			222,198			74,714
Non-controlling interest (30.00%)		(73,450	)		(24,697	)		(66,659	)		(22,414	)
Goodwill (Note 17)		105,764			36,118			103,055			35,240
Initial purchase consideration		277,148			93,747			258,594			87,540
Cash payment for acquisition		231,464			78,462			231,464			78,462
Cash and cash equivalents of the acquired subsidiary		(69,930	)		(23,514	)		(69,930	)		(23,514	)
Direct cash outflow during the year for the acquisition		161,534			54,948			161,534			54,948

Final product Price Adjustment Agreement, GyM SA maintains an estimated payable associated with purchases of US$10.8 million (equivalent to S/.32.4 million) to be repaid by distributing a special dividend of Morelco to the seller, balance likewise recognized a receivable for GYM by revenue backlog of US$1.7 million (equivalent to S/.5.3 million) to be repaid by freeing up resources account Alianza Fiduciaria SA.

21 EVENTS AFTER THE DATE OF THE STATEMENT OF FINANCIAL POSITION

On December 10, 2015 the company subscribed a medium term loan credit agreement for up to US$ 200 million with Credit Suisse AG, Cayman Islands Branch.  The loan is 5 year term, with a quarterly installments starting on the 18th month anniversary and an interest rate of libor plus 3.9%.  The proceeds will be used to finance the participation of our subsidiary Negocios de Gas S.A. in the company Gasoducto Sur Peruano S.A., which is the concessionaire of the “Improvements to the country’s energy safety and development of the Southern Gas Pipeline Project. 

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

UNAUDITED

The 4th of January 2016,  the company acquire new shares of Adexus S.A., company based in Chile,  for a total amount of 8,929 shares of the mentioned company, and therefore have increased it’s participation from 44% to 52%. This acquisition of shares has an approximate value of US$ 2.5 million.

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