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 April 2018

 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/ Luis Francisco Diaz Olivero  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/ LUIS FRANCISCO DIAZ OLIVEROName: Luis Francisco Diaz Olivero Title: Stock Market Representative

April 26,  2018

(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 FOR THE
THREE-MONTH PERIOD ENDED AT MARCH 31, 2017 AND 2018 (UNAUDITED);
AND CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT
DECEMBER 31, 2017 AND MARCH 31, 2018 (UNAUDITED)

(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 FOR THE
THREE-MONTH PERIOD ENDED AT MARCH 31, 2017 AND 2018 (UNAUDITED);
AND CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT
DECEMBER 31, 2017 AND MARCH 31, 2018 (UNAUDITED)

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

(Free translation from the original in Spanish)

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

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

ASSETS							LIABILITIES AND EQUITY
			As at		As at					As at			As at
			December 31,		March 31,					December 31,			March 31,
	Note		2017		2018			Note		2017			2018
Current assets							Current liabilities
Cash and cash equivalents		8		638,212		630,097	Borrowings		13		1,056,764			1,195,982
Financial asset at fair value through profit or loss				181		222	Bonds		14		36,655			35,662
Trade accounts receivables, net				1,027,087		948,235	Trade accounts payable				1,456,219			1,554,868
Unbilled work in progress, net				657,093		708,327	Accounts payable to related parties				62,893			62,425
Accounts receivable from related parties		9		136,106		131,322	Current income tax				78,748			105,219
Other accounts receivable				769,653		872,449	Other accounts payable				846,436			804,397
Inventories, net				766,497		756,830	Provisions		15		13,503			13,068
Prepaid expenses				37,695		57,110					3,551,218			3,771,621
				4,032,524		4,104,592
							Non-current liabilities classified as held for sale				248,459			251,080
Non-current assets classified as held for sale		10		521,160		503,438
							Total current liabilities				3,799,677			4,022,701
Total current assets				4,553,684		4,608,030
							Non-current liabilities
Non-current assets							Borrowings		13		633,299			586,640
Long-term trade accounts receivable, net				835,277		918,732	Long-term bonds		14		910,912			908,189
Long-term unbilled work in progress, net				28,413		28,902	Other long-term accounts payable				601,906			511,972
Long-term accounts receivable from related parties		9		518,834		497,792	Long-term accounts payable to related parties				25,954			27,292
Prepaid expenses				38,082		51,562	Provisions		15		32,396			31,462
Other long-term accounts receivable				422,162		358,950	Derivative financial instruments				383			224
Investments in associates and joint ventures		11		49,449		46,583	Deferred income tax liability				77,190			85,593
Investment property				45,687		45,160	Total non-current liabilities				2,282,040			2,151,372
Property, plant and equipment, net		12		867,247		828,244	Total liabilities				6,081,717			6,174,073
Intangible assets, net		12		941,642		961,365
Deferred income tax asset				449,193		472,483	Equity
Total non-current assets				4,195,986		4,209,773	Capital		16		660,054			660,054
							Legal reserve				132,011			132,011
							Optional reserve				29,974			29,974
							Share Premium				881,795			881,795
							Other reserves				(165,446	)		(143,301	)
							Retained earnings				650,759			636,581
							Equity attributable to controlling interest in the Company				2,189,147			2,197,114
							Non-controlling interest				478,806			446,616
							Total equity				2,667,953			2,643,730
Total assets				8,749,670		8,817,803	Total liabilities and equity				8,749,670			8,817,803

The accompanying notes on pages 8 to 28 are an integral part of the consolidated financial statements.

-2-

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

UNAUDITED

(Free translation from the original in Spanish)

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

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES

CONSOLIDATED INCOME STATEMENT

			For the period of three months
			ended March 31,
	Note		2017			2018
Revenues from construction activities				568,221			708,158
Revenues from services provided				559,762			418,473
Revenue from real estate and sale of goods				290,382			184,400
				1,418,365			1,311,031
Cost of construction activities				(601,941	)		(695,069	)
Cost of services provided				(421,261	)		(342,701	)
Cost of real estate and goods sold				(183,989	)		(120,014	)
		17		(1,207,191	)		(1,157,784	)
Gross profit				211,174			153,247
Administrative expenses		17		(96,916	)		(92,990	)
Other income and expenses				749			14,247
Gain from the sale of investments				25,768			(1,529	)
Operating profit				140,775			72,975
Financial expenses				(45,895	)		(69,122	)
Financial income				27,416			4,919
Share of the profit or loss in associates and joint
ventures under the equity method of accounting				5,482			(1,676	)
Profit (loss) before income tax				127,778			7,096
Income tax		18		(39,684	)		(12,096	)
Loss for the year from continuing operations				88,094			(5,000	)
Profit for the year from discontinued operations				-			-
Loss for the year				88,094			(5,000	)
Profit (loss) attributable to:
Owners of the Company				79,123			(14,178	)
Non-controlling interest				8,971			9,178
				88,094			(5,000	)
Earnings (loss) per share from continuing operations
attributable to owners of the Company during
the year				0.120			(0.021	)

The accompanying notes on pages 8 to 28 are an integral part of the consolidated financial statements.

-3-

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

UNAUDITED

(Free translation from the original in Spanish)

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

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

		For the period of three months
		ended March 31,
	Note	2017			2018
Profit (Loss) for the period			88,094			(5,000	)
Other comprehensive income:
Items that may be subsequently  reclassified to profit or loss
Cash flow hedge, net of tax			198			111
Foreign currency translation adjustment, net of tax			(5,031	)		15,201
Exchange difference from net investment in a foreign operation, net of tax			(3,616	)		1,498
			(8,449	)		16,810
Other comprenhensive income for the year, net of tax			(8,449	)		16,810
Total comprehensive income for the year			79,645			11,810
Comprehensive income attributable to:
Owners of  the Company			71,843			7,967
Non-controlling interest			7,802			3,843
			79,645			11,810

The accompanying notes on pages 8 to 28 are an integral part of the consolidated financial statements.

-4-

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

UNAUDITED

(Free translation from the original in Spanish)

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

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

FOR THE PERIOD OF THE THREE MONTHS ENDED MARCH 31, 2017 AND 2018

	Attributable to the controlling interests of the Company
	Number of shares				Legal		Optional		Premium for issuance		Other			Retained						Non-controlling
	In thousands		Capital		reserve		reserve		of shares		reserves			earnings			Total			interest			Total
Balances as of January 1, 2017		660,054		660,054		132,011		29,974		882,464		(167,299	)		471,395			2,008,599			512,809			2,521,408
Profit (loss) for the year		-		-		-		-		-		-			79,123			79,123			8,971			88,094
Cash flow hedge		-		-		-		-		-		188			-			188			10			198
Foreign currency translation adjustment		-		-		-		-		-		(4,274	)		-			(4,274	)		(757	)		(5,031	)
Exchange difference from net investment in a foreign operation		-		-		-		-		-		(3,194	)		-			(3,194	)		(422	)		(3,616	)
Comprehensive income of the year		-		-		-		-		-		(7,280	)		79,123			71,843			7,802			79,645
Transactions with shareholders:
- Dividend distribution		-		-		-		-		-		-			-			-			(4,558	)		(4,558	)
- Contributions (devolution) of non-controlling shareholders,net		-		-		-		-		-		-			-			-			(166	)		(166	)
Total transactions with shareholders		-		-		-		-		-		-			-			-			(4,724	)		(4,724	)
Balances as of March 31, 2017		660,054		660,054		132,011		29,974		882,464		(174,579	)		550,518			2,080,442			515,887			2,596,329
Balances as of January 1, 2018		660,054		660,054		132,011		29,974		881,795		(165,446	)		650,759			2,189,147			478,806			2,667,953
Profit (loss) for the year		-		-		-		-		-		-			(14,178	)		(14,178	)		9,178			(5,000	)
Cash flow hedge		-		-		-		-		-		105			-			105			6			111
Foreign currency translation adjustment		-		-		-		-		-		20,573			-			20,573			(5,372	)		15,201
Exchange difference from net investment in a foreign operation		-		-		-		-		-		1,467			-			1,467			31			1,498
Comprehensive income of the year		-		-		-		-		-		22,145			(14,178	)		7,967			3,843			11,810
Transactions with shareholders:
- Dividend distribution		-		-		-		-		-		-			-			-			(5,032	)		(5,032	)
- Contributions (devolution) of non-controlling shareholders,net		-		-		-		-		-		-			-			-			(31,001	)		(31,001	)
Total transactions with shareholders		-		-		-		-		-		-			-			-			(36,033	)		(36,033	)
Balances as of March 31, 2018		660,054		660,054		132,011		29,974		881,795		(143,301	)		636,581			2,197,114			446,616			2,643,730

The accompanying notes on pages 8 to 28 are an integral part of the consolidated financial statements.

-5-

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

UNAUDITED

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

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

			For the period of three months
			ended March 31,
	Note		2017			2018
OPERATING ACTIVITIES
Loss before income tax				127,778			7,096
Adjustments to  profit not affecting cash flows from
operating activities:
Depreciation				50,249			42,229
Amortization of other assets				23,622			23,123
Impairment of inventories				301			-
Impairment of accounts receivable and other accounts receivable				85			110
Debt condonation							-
Impairment of property, plant and equipment		12		333			-
Impairment of intangible assets							-
Financial expenses-CCDS							-
Expenses for liquidation of works - CCDS							-
Indemnification income							-
Profit on fair value of financial asset at fair value through profit or loss				(37	)		-
Change in the fair value of the liability for put option							-
Other Provisions		15		962			1,530
Dividends income from available-for-sale financial assets
Return receipt from Morelco				-			-
Remeasurement of purchase consideration of Morelco				-			-
Financial expense,net				47,157			48,022
Other provisions in CCDS							-
Foreign exchange loss (gain) on loans				(47,766	)		(2,094	)
Share of the profit and loss in associates and joint ventures
under the equity method of accounting		11		(5,482	)		1,676
Reversal of provisions		15		(20	)		(2,366	)
Disposal of fixed assets				3,410			719
Disposal of investments at fair value through profit or loss				64			-
Profit on sale of property, plant and equipment				(2,511	)		(24,563	)
Loss on financial asset at fair value through profit or loss							-
Loss on sale of non-current asset held for sale				(25,724	)		-
Profit on sale from available-for-sale financial assets				-			1,478
Loss on sale of investments in subsidiaries
Loss on remeasurement of accounts receivable				-			15,066
Loss on remeasurement of investment							-
Net variations in assets and liabilities:
Trade accounts receivable and unbilled working in progress				(2,177	)		(78,871	)
Other accounts receivable				(35,142	)		(25,103	)
Other accounts receivable from related parties				11,393			16,698
Inventories				77,353			(17,970	)
Pre-paid expenses and other assets				(7,086	)		(32,901	)
Trade accounts payable				(64,374	)		104,474
Other accounts payable				21,018			(117,954	)
Other accounts payable to related parties				(22,383	)		42,679
Other provisions				(2,501	)		(419	)
Interest payment				(46,882	)		(39,070	)
Payments for purchases of intangibles - Concessions				(3,178	)		(2,186	)
Payment of income tax				(26,545	)		(512	)
Net cash applied to operating activities				71,917			(39,109	)

-6-

INVESTING ACTIVITIES
Sale of available-for-sale investment		-		(36,595	)
Sale of property, plant and equipment		15,860		37,963
Sale of non-current assets held for sale		43,364		18,865
Interest received		1,700		1,508
Payment for purchase of investments properties		(840	)	(52	)
Payments for intangible purchase		(21,768	)	(32,604	)
Payments for property, plant and equipment purchase		(47,304	)	(22,433	)
Net cash applied to investing activities		(8,988	)	(33,348	)
FINANCING ACTIVITIES
Loans received		453,988		308,588
Amortization of loans received		(588,705	)	(225,717	)
Amortization of bonds issued		(8,134	)	(7,994	)
Payment for transaction costs for debt		(873	)	-
Dividends paid to non-controlling interest		(4,558	)	(5,032	)
Cash received (return of contributions )from non-controlling shareholders		(166	)	(5,612	)
Net cash provided by financing activities		(148,448	)	64,233
Net increase (net decrease) in cash		(85,519	)	(8,224	)
Cash and cash equivalents at the beginning of the year		606,949		638,212
Cash and cash equivalents at the end of the period	8	521,430		629,988
NON-CASH TRANSACTIONS:
Acquisition of assets through finance leases		22,193		-

The accompanying notes on pages 8 to 28 are an integral part of the consolidated financial statements.

-7-

(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 FOR THE THREE-MONTH PERIOD ENDED AT MARCH 31, 2017 AND 2018 (UNAUDITED); AND CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT DECEMBER 31, 2017 AND MARCH 31, 2018 (UNAUDITED)

1 GENERAL INFORMATION

The Company is the parent company of the Graña y Montero Group (hereinafter the Group) and it is mainly engaged in holding the 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 the Group´s companies; it is also engaged in the leasing of offices to the Group’s companies.

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 ownership and operation), real estate businesses and services.

These condensed interim consolidated financial statements as of March 31, 2018 have been prepared and authorized for issuance by the Chief Financial Officer on April 26, 2018.

2 BASIS OF PREPARATION

These condensed interim consolidated financial statements for the period ended March 31, 2018 have been prepared in accordance with (IAS 34) “Interim financial reporting”.

To date, audited reports for the periods 2016 and 2017 have not been issued by our external auditors. As it is well known, we carried out complementary procedures and an internal investigation, since some projects involving minority and non-controlling companies were being investigated in Peru. The investigation concluded without findings in relation to acts of corruption in such projects.

On October 04, 2017, we informed through a Relevant Information Communication that Graña y Montero S.A.A (the “Company”) and Gaveglio, Aparicio y Asociados S.C. de R.L. (“PwC”), a registered public accounting firm and the member in Peru of the PricewaterhouseCoopers network of firms, have determined that PwC is not independent of the Company with respect to the fiscal year 2016 as a consequence of non-audit services provided by PwC to the Company beginning in the fourth quarter of fiscal year 2016. The services relate to the Company’s testing of controls in accordance with the U.S. Sarbanes-Oxley Act.

As a result, the Company and PwC mutually agreed to the Company’s dismissal of PwC as auditor of the Company’s consolidated financial statements for the fiscal year 2016. The shareholder meeting on November 02, 2017 approved the withdrawal of PwC as auditor and appointed Vizcarra & Asociados SCRL, member of Moore Stephens as new independent auditor for fiscal year 2016 and 2017.

In addition, on April 17, 2018 we reported as significant fact that on or about March 23, 2018, PwC informed the Company that it would not authorize the use of its 2015 audit opinion without conducting substantial additional procedures, which represents a difference in understanding from what the Company has had since October 2017 when PwC ceased to be the Company´s auditor. PwC could not give any assurance as to when it could complete such additional procedures and stated it could take several months.

-8-

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

UNAUDITED

Because of this situation, to avoid further delay in filing the 2016 Form 20-F, and in light of all the facts and circumstances, the Audit and Process Committee of the Company  appointed Moore Stephens to audit the 2015 fiscal year. Among other factors, as the Company’s current auditor, Moore Stephens is in the process of completing its audit work with respect to the 2016 fiscal year and thus, in the Company’s view, can more timely and efficiently complete the 2015 processes as well.

The board of directors of the Company is calling a special shareholders’ meeting to ratify the appointment of Moore Stephens to audit the Company’s 2015 consolidated financial statements.

Considering that the audit of the Financial Statementes as of December 2016 and 2017 are not completed, the information for the periods 2016 and 2017 are preliminary and may be subject to subsequent modifications.

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, 2017, except for the new international financial information regulations (IFRS) effective as of January 1, 2018, which the Group is in the process of adoption.

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.

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, no new credit risk has been identified in the Group, considering that the level of lines used has remained the same as in the previous year.

4.1.3 Liquidity risk

The Company has been working on identifying non-strategic assets for sale and allocating funds to debt amortization and other liabilities.

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:

-9-

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

UNAUDITED

	Less than 1		From 1 to		From 2 to		Over
	year		2 years		5 years		5 years		Total
At December 31, 2017
Other financial liabilities (except
for finance leases)		1,003,500		336,913		290,253		-		1,630,666
Finance leases		72,864		41,877		24,022		638		139,401
Bonds		109,746		148,986		353,349		1,272,647		1,884,728
Trade accounts payables		1,456,219		-		-		-		1,456,219
Accounts payables to related parties		62,893		25,954		-		-		88,847
Other accounts payables		153,530		34,527		121,955		-		310,012
Other non-financial liabilities		-		383		-		-		383
		2,858,752		588,640		789,579		1,273,285		5,510,256
At March 31, 2018
Other financial liabilities (except
for finance leases)		1,149,118		325,866		263,932		-		1,738,916
Finance leases		64,235		35,165		20,797		159		120,356
Bonds		108,858		150,357		361,512		1,237,059		1,857,786
Trade accounts payables		1,526,349		7,180.00		6,911.00		-		1,540,440
Accounts payables to related parties		62,425		27,292		-		-		89,717
Other accounts payables		258,088		23,706		121,148		-		402,942
Other non-financial liabilities		-		224		-		-		224
		3,169,073		569,790		774,300		1,237,218		5,750,381

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, 2017 and and March 31, 2018, the gearing ratio is presented below indicating the Company’s strategy to keep it in a range from 0.10 to 0.70. The gearing ratio was as follows:

	As at			As at
	December 31,			March 31,
	2017			2018
Total borrowing and bonds		2,637,630			2,726,473
Less: Cash and cash equivalents		(638,212	)		(630,097	)
Net debt		1,999,418			2,096,376
Total equity		2,667,953			2,643,730
Total capital		4,667,371			4,740,106
Gearing ratio		0.43			0.44

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).

-10-

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

UNAUDITED

- 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 financial assets classified as at fair value through profit or loss has been determined with observable information of Level 1.

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 13-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, 2017.

6 SEASONALITY OF OPERATIONS

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

7 SEGMENT INFORMATION

Business 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.

-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, 2017
Assets.-
Cash and cash equivalents		183,901		43,878		121,901		161,073		4,204			97,709		21,914		3,632		-			638,212
Financial asset at fair value through profit or loss		181		-		-		-		-			-		-		-		-			181
Trade accounts receivables		368,302		64,364		128,124		117,042		604			45,897		302,335		419		-			1,027,087
Unbilled work in progress		651,063		-		-		-		-			-		-		6,030		-			657,093
Accounts receivable from related parties		269,432		2,746		62,525		3,072		8,852			69,382		9,947		66,059		(355,909	)		136,106
Other accounts receivable		530,820		55,959		66,765		31,381		1,922			27,504		42,561		12,741		-			769,653
Inventories		46,500		15,093		8,685		19,457		-			643,882		52,754		190		(20,064	)		766,497
Prepaid expenses		4,470		1,168		2,354		10,312		164			216		18,250		761		-			37,695
Non-current assets classified as held for sale		302,884		-		-		-		-			-		-		218,276		-			521,160
Total current assets		2,357,553		183,208		390,354		342,337		15,746			884,590		447,761		308,108		(375,973	)		4,553,684
Long-term trade accounts receivable		-		-		14,747		793,991		-			-		26,539		-		-			835,277
Long-term unbilled work in progress		-		-		28,413		-		-			-		-		-		-			28,413
Long-term accounts receivable from related parties		-		-		27,660		-		-			-		474		636,940		(146,240	)		518,834
Prepaid expenses		-		-		24,585		13,115		892			-		-		-		(510	)		38,082
Other long-term accounts receivable		26,340		53,917		11,159		255,179		7,348			9,811		1,712		56,696		-			422,162
Investments in associates and joint ventures		110,565		7,344		-		-		-			1		10,113		2,053,881		(2,132,455	)		49,449
Investment property		-		-		-		-		-			45,687		-		-		-			45,687
Property, plant and equipment		509,700		171,226		18,572		580		60			11,621		102,448		70,627		(17,587	)		867,247
Intangible assets		203,390		160,288		492,424		323		-			1,022		48,903		24,032		11,260			941,642
Deferred income tax asset		178,317		5,507		11,057		-		-			10,316		39,201		194,998		9,797			449,193
Total non-current assets		1,028,312		398,282		628,617		1,063,188		8,300			78,458		229,390		3,037,174		(2,275,735	)		4,195,986
Total assets		3,385,865		581,490		1,018,971		1,405,525		24,046			963,048		677,151		3,345,282		(2,651,708	)		8,749,670
Liabilities.-
Borrowings		591,987		46,924		2,589		-		-			162,031		139,821		113,412		-			1,056,764
Bonds		-		-		24,361		12,294		-			-		-		-		-			36,655
Trade accounts payable		960,188		62,658		85,329		81,161		132			43,724		187,554		36,412		(939	)		1,456,219
Accounts payable to related parties		122,007		3,664		60,857		83,841		14			37,396		14,429		115,387		(374,702	)		62,893
Current income tax		29,379		1,282		1,122		-		161			45,299		1,505		-		-			78,748
Other accounts payable		492,366		12,487		68,994		27,058		49			63,654		107,837		73,991		-			846,436
Provisions		6,682		5,204		-		-		-			20		1,597		-		-			13,503
Non-current liabilities classified as held for sale		248,459		-		-		-		-			-		-		-		-			248,459
Total current liabilities		2,451,068		132,219		243,252		204,354		356			352,124		452,743		339,202		(375,641	)		3,799,677
Borrowings		127,773		101,549		1,945		-		-			12,010		26,458		363,564		-			633,299
Long-term bonds		-		-		319,549		591,363		-			-		-		-		-			910,912
Other long-term accounts payable		129,022		-		52,349		349,987		158			32,058		35,863		2,469		-			601,906
Long-term accounts payable to related parties		4,306		-		836		89,023		23,445			-		30,739		5,261		(127,656	)		25,954
Provisions		8,587		16,707		-		-		-			-		1,847		5,255		-			32,396
Derivative financial instruments		-		383		-		-		-			-		-		-		-			383
Deferred income tax liability		26,632		8,958		8,606		23,290		210			-		9,494		-		-			77,190
Total non-current liabilities		296,320		127,597		383,285		1,053,663		23,813			44,068		104,401		376,549		(127,656	)		2,282,040
Total liabilities		2,747,388		259,816		626,537		1,258,017		24,169			396,192		557,144		715,751		(503,297	)		6,081,717
Equity attributable to controlling interest in the Company		530,193		299,411		323,987		110,632		(123	)		217,290		105,911		2,616,168		(2,014,322	)		2,189,147
Non-controlling interest		108,284		22,263		68,447		36,876		-			349,566		14,096		13,363		(134,089	)		478,806
Total liabilities and equity		3,385,865		581,490		1,018,971		1,405,525		24,046			963,048		677,151		3,345,282		(2,651,708	)		8,749,670

-12-

(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 March 31, 2018
Assets.-
Cash and cash equivalents		154,243		41,010		90,696		243,276		5,121			80,065		8,409		7,277		-			630,097
Financial asset at fair value through profit or loss		222		-		-		-		-			-		-		-		-			222
Trade accounts receivables		359,001		68,699		99,719		195,307		682			46,921		177,405		501		-			948,235
Unbilled work in progress		564,671		-		-		-		-			-		130,241		13,415		-			708,327
Accounts receivable from related parties		297,339		2,663		55,232		3,259		8,852			70,699		18,900		75,149		(400,771	)		131,322
Other accounts receivable		558,316		52,539		75,637		35,784		1,108			22,531		111,622		14,912		-			872,449
Inventories		56,206		15,810		9,613		21,415		-			614,828		58,212		997		(20,251	)		756,830
Prepaid expenses		5,148		1,006		2,206		32,711		86			182		13,297		2,474		-			57,110
Non-current assets classified as held for sale		285,162		-		-		-		-			-		-		218,276		-			503,438
Total current assets		2,280,308		181,727		333,103		531,752		15,849			835,226		518,086		333,001		(421,022	)		4,608,030
Long-term trade accounts receivable		-		-		14,747		878,365		-			-		25,620		-		-			918,732
Long-term unbilled work in progress		-		-		28,902		-		-			-		-		-		-			28,902
Long-term accounts receivable from related parties		-		-		27,866		-		-			-		1,355		626,827		(158,256	)		497,792
Prepaid expenses		-		-		41,595		9,598		879			-		-		-		(510	)		51,562
Other long-term accounts receivable		20,283		57,529		13,665		227,848		7,347			9,035		896		22,347		-			358,950
Investments in associates and joint ventures		107,311		7,847		-		-		-			-		9,466		2,065,815		(2,143,856	)		46,583
Investment property		-		-		-		-		-			45,160		-		-		-			45,160
Property, plant and equipment		476,301		168,568		17,396		801		57			10,732		102,056		69,920		(17,587	)		828,244
Intangible assets		216,876		174,902		487,255		425		-			1,076		45,881		23,911		11,039			961,365
Deferred income tax asset		183,650		5,373		11,871		-		-			15,247		38,221		208,193		9,928			472,483
Total non-current assets		1,004,421		414,219		643,297		1,117,037		8,283			81,250		223,495		3,017,013		(2,299,242	)		4,209,773
Total assets		3,284,729		595,946		976,400		1,648,789		24,132			916,476		741,581		3,350,014		(2,720,264	)		8,817,803
Liabilities.-
Borrowings		563,672		47,174		1,628		148,553		-			148,205		163,914		122,836		-			1,195,982
Bonds		-		-		23,146		12,516		-			-		-		-		-			35,662
Trade accounts payable		974,672		72,991		56,793		172,379		217			38,553		197,072		43,130		(939	)		1,554,868
Accounts payable to related parties		126,702		2,703		58,917		114,969		22			34,279		17,948		130,684		(423,799	)		62,425
Current income tax		35,001		1,963		29		-		124			42,996		25,106		-		-			105,219
Other accounts payable		395,884		12,102		60,847		32,054		62			102,151		123,702		77,595		-			804,397
Provisions		6,682		5,163		-		-		-			20		1,203		-		-			13,068
Non-current liabilities classified as held for sale		251,080		-		-		-		-			-		-		-		-			251,080
Total current liabilities		2,353,693		142,096		201,360		480,471		425			366,204		528,945		374,245		(424,738	)		4,022,701
Borrowings		119,239		95,293		1,580		-		-			11,985		18,997		339,546		-			586,640
Long-term bonds		-		-		315,182		593,007		-			-		-		-		-			908,189
Other long-term accounts payable		128,022		-		45,910		298,348		209			-		36,980		2,503		-			511,972
Long-term accounts payable to related parties		4,599		-		836		87,188		23,322			-		40,444		6,133		(135,230	)		27,292
Provisions		8,572		16,155		-		-		-			-		1,480		5,255		-			31,462
Derivative financial instruments		-		224		-		-		-			-		-		-		-			224
Deferred income tax liability		26,169		12,848		10,216		25,695		206			-		10,459		-		-			85,593
Total non-current liabilities		286,601		124,520		373,724		1,004,238		23,737			11,985		108,360		353,437		(135,230	)		2,151,372
Total liabilities		2,640,294		266,616		575,084		1,484,709		24,162			378,189		637,305		727,682		(559,968	)		6,174,073
Equity attributable to controlling interest in the Company		536,243		306,129		331,423		123,061		(30	)		215,488		97,640		2,609,007		(2,021,847	)		2,197,114
Non-controlling interest		108,192		23,201		69,893		41,019		-			322,799		6,636		13,325		(138,449	)		446,616
Total liabilities and equity		3,284,729		595,946		976,400		1,648,789		24,132			916,476		741,581		3,350,014		(2,720,264	)		8,817,803

-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 three-month period
ended March 31, 2017
Revenue		684,495			103,882			95,160			62,108			755			219,925			327,589			16,515			(92,064	)		1,418,365
Gross profit (loss)		52,614			19,286			26,074			12,765			174			86,477			33,545			(5,395	)		(14,366	)		211,174
Administrative expenses		(51,843	)		(4,205	)		(7,965	)		(3,346	)		(62	)		(4,851	)		(30,704	)		(10,902	)		16,962			(96,916	)
Other income and expenses		1,619			(708	)		126			6			-			(145	)		105			405			(659	)		749
Gain from the sale of investments		25,768			-			-			-			-			-			-			-			-			25,768
Operating profit		28,158			14,373			18,235			9,425			112			81,481			2,946			(15,892	)		1,937			140,775
Financial expenses		(11,143	)		(2,986	)		(2,784	)		(1,070	)		(1	)		(7,971	)		(8,549	)		(20,359	)		8,968			(45,895	)
Financial income		14,771			2,552			806			947			3			58			1,366			18,401			(11,488	)		27,416
Share of the profit or loss
in associates and joint ventures under the equity
method of accounting		20,845			529			-			-			-			-			124			92,510			(108,526	)		5,482
Profit before income tax		52,631			14,468			16,257			9,302			114			73,568			(4,113	)		74,660			(109,109	)		127,778
Income tax		(13,183	)		(4,484	)		(4,237	)		(2,920	)		(75	)		(19,460	)		344			4,374			(43	)		(39,684	)
Profit (loss) for the period		39,448			9,984			12,020			6,382			39			54,108			(3,769	)		79,034			(109,152	)		88,094
Profit (loss) attributable to:
Owners of the Company		36,200			8,947			8,066			4,787			39			34,362			(3,122	)		79,057			(89,213	)		79,123
Non-controlling interest		3,248			1,037			3,954			1,595			-			19,746			(647	)		(23	)		(19,939	)		8,971
		39,448			9,984			12,020			6,382			39			54,108			(3,769	)		79,034			(109,152	)		88,094

-14-

(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 three-month period
ended March 31, 2018
Revenue		674,767			124,596			148,501			151,168			807			71,372			265,608			26,069			(151,857	)		1,311,031
Gross profit (loss)		51,345			29,312			27,392			25,918			120			12,288			7,069			4,506			(4,703	)		153,247
Administrative expenses		(43,647	)		(4,285	)		(7,753	)		(2,417	)		(67	)		(4,112	)		(23,321	)		(18,169	)		10,781			(92,990	)
Other income and expenses		12,867			1,028			(46	)		523			-			(181	)		135			(111	)		32			14,247
Gain from the sale of investments		(1,529	)		-			-			-			-			-			-			-			-			(1,529	)
Operating profit		19,036			26,055			19,593			24,024			53			7,995			(16,117	)		(13,774	)		6,110			72,975
Financial expenses		(18,603	)		(3,302	)		(6,608	)		(1,221	)		-			(5,830	)		(7,074	)		(33,637	)		7,153			(69,122	)
Financial income		7,377			318			630			907			14			1,216			247			7,009			(12,799	)		4,919
Share of the profit or loss
in associates and joint ventures under the equity
method of accounting		(2,977	)		401			-			-			-			-			362			12,827			(12,289	)		(1,676	)
Profit before income tax		4,833			23,472			13,615			23,710			67			3,381			(22,582	)		(27,575	)		(11,825	)		7,096
Income tax		(10,400	)		(6,780	)		(4,121	)		(7,140	)		(97	)		(974	)		3,927			12,681			808			(12,096	)
Profit (loss) for the period		(5,567	)		16,692			9,494			16,570			(30	)		2,407			(18,655	)		(14,894	)		(11,017	)		(5,000	)
Profit (loss) attributable to:
Owners of the Company		(6,667	)		15,352			7,745			12,428			(30	)		(1,801	)		(14,269	)		(14,857	)		(12,079	)		(14,178	)
Non-controlling interest		1,100			1,340			1,749			4,142			-			4,208			(4,386	)		(37	)		1,062			9,178
		(5,567	)		16,692			9,494			16,570			(30	)		2,407			(18,655	)		(14,894	)		(11,017	)		(5,000	)

-15-

(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 previous year-end financial statements.

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

8 CASH AND CASH EQUIVALENTS

This account comprises:

	at December 31,		at March 31,
	2017		2018
Cash on hand		16,468		2,172
In-transit remittances		1,036		1,039
Bank accounts		397,883		443,717
Time deposits		115,010		54,920
Mutual funds		107,815		128,249
		638,212		630,097

Reconciliation to cash flow statement

The above figures reconcile to the amount of cash shown in the statement of cash flows at the end of:

	at December 31,			at March 31,
	2017			2018
Cash and Cash Equivalent on Balance Sheet		638,212			630,097
Bank overdrafts (note 13)		(120	)		(109	)
Balances per statement of cash flows		638,092			629,988

9 TRANSACTIONS WITH RELATED PARTIES

a) Transactions with related parties -

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

	For the year ended March 31,
	2017		2018
Revenue from sale of goods and services:
- Associates		554		70
- Joint operations		3,388		8,313
		3,942		8,383

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, 2017						At March 31, 2018
	Receivable			Payable			Receivable			Payable
Joint operations:
Consorcio GyM Conciviles		61,764			-			61,931			-
Consorcio Constructor Ductos del Sur		14,389			-			11,797			-
Consorcio Italo Peruano		14,536			18,849			11,449			16,654
Consorcio Rio Urubamba		8,964			-			8,927			-
Consorcio Peruano de Conservación		7,417			-			7,113			-
Consorcio Terminales del Perú		3,290			-			2,538			-
Consorcio Vial Sierra		2,355			1,854			2,537			561
Consorcio Constructor Chavimochic		1,959			5,817			2,044			5,833
Consorcio La Gloria		1,688			1,358			1,729			1,361
Consorcio Rio Mantaro		1,134			763			1,085			16,620
Consorcio Ermitaño		1,067			6			1,206			356
Consorcio Menegua		39			-			42			-
Consorcio para la Atención y Mantenimiento de Ductos		-			12,074			-			-
Consorcio Vial Quinua		-			2,162			-			2,130
Consorcio Huacho Pativilca		-			2,377			-			3,071
Consorcio Energía y Vapor		-			72			-			-
Other minor		14,818			14,692			15,529			13,778
		133,420			60,024			127,927			60,364
Other related parties:
Gaseoducto Sur Peruano S.A		521,241			-			500,927
Perú Piping Spools S.A.C.		279			185			260			348
Ferrovias Participaciones		-			21,648			-			21,857
Ferrovias Argentina		-			2,684			-			2,549
Arturo Serna		-			4,306			-			4,599
		521,520			28,823			501,187			29,353
		654,940			88,847			629,114			89,717
Less non-current portion:
Gaseoducto Sur Peruano S.A		(518,834	)		-			(497,792	)		-
Ferrovias Participaciones		-			(21,648	)		-			(21,857	)
Arturo Serna		-			(4,306	)		-			(4,599	)
Other minor		-			-			-			(836	)
Current Portion		136,106			62,893			131,322			62,425

Accounts receivable and payable have no specific guarantees.

Current 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.

Current 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.

-17-

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

UNAUDITED

10 NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE

As of March 31, 2018, this item includes the balances of the Consorcio Constructor Ductos del Sur for S/285.2 million, and the reclassification of the investment in the associate Gasoducto Sur Peruano S.A. for S/218.2 million.

In February and March 2017, the Company sold through its brokerage operations part of its shares (representing 9.97%) in the Red Eagle Mining Corporation investment, obtaining a remaining interest of 2.70%. The sale price was agreed at US$13.3 million (equivalent to S/43 million), which were canceled in full.

In August 2017, the Company capitalized claims to Red Eagle Mining Corporation for US$4 million. As of December 31, 2017, the investment represents 6.18%. In January and March 2018, the Company sold through its brokerage operations the total of its shares in the Red Eagle Mining Corporation investment. The sale price was agreed at US$3.99 million (equivalent to S/16.24 million), which were canceled in full.

11 INVESTMENTS IN ASSOCIATES AND JOINT VENTURES

The movement of our investments in associates for the period ended March 31, 2017 and 2018 is as follows:

	2017			2018
Beginning balance		389,755			49,449
Capital dercrease		-			(289	)
Share of the profit and loss in associates		10,075			(1,676	)
Sale of investments		(240	)		-
GSP adjustment		(218,276	)		-
Other		(277	)		(901	)
Ending balance		181,037			46,583

On November 2015, subsidiary Negocios del Gas SA. Adquired an interest of 20% of concessionaire Gasoducto Sur Peruano, which represents an investment of approximately US$248 million, at December 2015 the contribution was S/391 million and at December 2016 its contribution was increased in S/374 million.

According to a notification issued by the Ministry of Energy and Mines of Peru on January 24, 2017, the early termination of the Concession Contract was declared, based on the provisions of clause

6.7 of the Concession Agreement "Improvements to the country's energy security and development of the South Peru Gas Pipeline ", as GSP failed to certify the financial closing within the established contractual deadline and proceeded to the immediate execution of the performance guarantee. This situation generated the execution of the counter-guarantees offered by the Group to the company issuing the performance guarantee of the Concession Contract for US $ 52.5 million (S /. 176.6 million) and US $ 129 million (S / 433.3 million). for the corporate guarantee of the bridge loan granted to GSP.

On October 11, 2017, the agreement was signed for the delivery of the goods of the Southern Peru Gas Pipeline concession between GSP and the Ministry of Energy and Mines (MEM). As stated in the agreement, GSP delivered most of the Concession Assets in possession to the administrator designated by the MEM for its custody and conservation. The assets include all the works, equipment and facilities provided for the execution of the project, as well as the engineering studies that were prepared by the concessionaire company.

-18-

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

UNAUDITED

After the termination of the contract, the Peruvian Government, in accordance with the contract, had to hire a consultancy entity of recognized international prestige that calculated the Net Book Value ("VCN" for its Spanish definition “Valor Contable Neto”) of the Concession Assets and the subsequent call for up to three public auctions, being the base amount for the first of them 100% of the VCN, guaranteeing in any case that after the third auction, in case the concession has not been awarded, the payment to GSP would be at least 72.25% of the VCN. Having elapsed more than a year since the termination of the contract, the Peruvian Government has not taken any action to calculate the VCN and call for auctions. In the opinion of the external and internal legal advisors, since the previous procedure had not been done within the established deadlines, the Peruvian Government would be obliged to pay GSP 100% of the VCN. Regarding the amount of the VCN there is a previous calculation reviewed by an audit firm as an independent expert as of December 31, 2016, commissioned by GSP, which determined a VCN of 2,602 million dollars.

GSP as of December 4, 2017 entered into a bankruptcy proceeding that will be carried out by the National Institute for the Defense of Competition and Intellectual Protection of Peru (hereinafter, INDECOPI), and the Group has registered accounts receivable in 2017 charge for US $ 434,465.77 and the fiduciary based in its capacity as administrator of the trust constituted US $ 169,287,006

Based on the amount of the VCN, applying the payments foreseen in the insolvency proceedings, the subordination contracts and the loan cession agreements between the Group and GSP partners, the assumption that an international arbitration will be required to achieve the payment by the Government, and, in accordance with the conclusions of the internal and external legal advisors, it is estimated that the international arbitration would take approximately 5 years to resolve. This is why an impairment of the investment was recorded, which includes a finance update and estimation of costs for US $ 202.3 million before taxes at the income statement.

In addition, considering the early termination of the GSP contract, the Group evaluated the impairment of the financial statements of CCDS. As a result, a net loss before taxes of S / 15.2 million was determined that was recognized in gross profit in the Engineering and Construction segment.

Same as in the Emergency Decree 003, Law 30737 in its First Section, includes Odebrecht and its related companies, which include GSP. According to this Law, GSP will not be able to make transfers abroad, will require the consent of the Ministry of Justice in case it wishes to sell assets and must deposit the proceeds of such sale in a guarantee trust. Likewise, the entities of the Government that must make some payment to the entities included in the Law, must withheld according to the contract 10%, equivalent to the net profit margin, and deposit it in the aforementioned trust in guarantee. According to our internal and external legal advisors, Government payment for the VCN is not within the scope of the withholding, as this payment does not include net profit margin, nor is a sale of assets

As of March 31, 2017, the investment was reclassified to Non-current assets classified as held for sale.

In February 2017 subsidiary Viva GyM S.A. signed a purchase-sales agreement comprising its equity interest (representing 22.5%) held in associate Promoción Inmobiliaria del Sur S.A. The agreed selling price was US$25 million (equivalent to S/81 million), which was fully paid.

12 PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS

For the period ended March 31, 2017 and 2018, the movement in property, plant and equipment and intangible assets accounts was as follows:

-19-

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

UNAUDITED

	Property, plant and			Intangible
	equipment			assets
At January 1, 2017		1,113,599			960,286
Adiciones		69,497			31,413
Transfers, disposals and adjustments		(30,296	)		5,060
Deductions for sale of assets		(13,349	)		0
Depreciation, amortization		(49,674	)		(23,622	)
Net cost at March 31, 2017		1,089,777			973,137
At January 1, 2018		867,247			941,642
Additions		22,433			36,002
Subsidiary deconsolidation		(13,100	)		0
Transfers, disposals and adjustments		6,715			6,844
Deductions for sale of assets		(13,400	)		0
Depreciation, amortization		(41,651	)		(23,123	)
Net cost at March 31, 2018		828,244			961,365

i) Property, plant and equipment

As of March 31, 2017 and 2018, additions to property, plant and equipment comprise of acquisition of machinery and equipment intended for the Group’s operations.

At December 31, 2017 the Group determined indicators of impairment of items of property, plant and equipment related to unused fixed assets and calculated the recoverable amount of these assets as the fair value determined by appraisals made by independent experts. The recognized impairment loss is mainly related to GyM S.A. for S/11.4 million, Morelco for S/0.24 million and Stracon GyM S.A. for S/ 2.7 million, which are shown within “Expenses by nature” (Note 17).

ii) Intangible assets

As of March 31, 2017 and 2018, additions registered in intangible assets mainly comprise of investments in building the second Ancón-Huacho-Pativilca road section of the Panamericana Norte highway (concession under intangible model) and in preparation of wells located in Lots I, III, IV and V to provide oil and hydrocarbon exploitation services.

a. Goodwill

Management reviews the results of its businesses based on the type of economic activity carried out.

Goodwill allocated to cash-generating units are:

	at December 31,		at March 31,
	2017		2018
Engineering and construction		75,052		79,992
Electromechanical		20,737		20,737
Mining and construction services		13,366		13,366
Telecommunications services		6,720		6,720
IT equipment and services		930		930
		116,805		121,745

-20-

(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 the higher of its value in use and fair value less cost of disposal. Value in use is determined based on the future cash flows expected to be generated by the assessed CGU.

As of March 31, 2018 same criteria used as those applied in the impairment test at December 31, 2017 that concluded there was no impairment in the CGU .

b. Trademarks

This item mainly comprises the trademarks acquired in the business combination processes with Vial y Vives S.A.C. (S/75.4 million) in October 2012; Morelco S.A.S. (S/33.3 million) in December 2014; and Adexus S.A. (S/9.1 million) in August 2016. Management determined that the brands obtained from Vial y Vives, Morelco and Adexus have indefinite lives; consequently, annual impairment tests are performed on these intangibles.

As a result of these tests, the VyV-DSD trademark was partially S/29.5 million as of December 31, 2017.

13 BORROWINGS

This item comprises:

	Total				Current				Non Current
	At December 31, 2017		At March 31, 2018		At December 31, 2017		At March 31, 2018		At December 31, 2017		At March 31, 2018
Bank overdrafts		120		109		120		109		-		-
Bank loans		1,561,634		1,670,738		990,467		1,136,356		571,167		534,382
Leases		128,309		111,775		66,177		59,517		62,132		52,258
		1,690,063		1,782,622		1,056,764		1,195,982		633,299		586,640

a) Bank loans

As of December 31, 2017 and March 31, 2018, this item comprises bank loans in local and foreign currencies for working capital purposes. These obligations bear interest at fixed rates which fluctuated between 3.3% and 13.8% in 2017 and between 1.0% and 14.4% in 2018.

			Current		Non-current
			At	At	At	At
	Interest	Date of	December	March	December	March
	rate	maturity	31, 2017	31, 2018	31, 2017	31, 2018
GyM S.A.	3.30% / 8.73%	2018 / 2020	551,413	528,105	95,376	92,825
Graña y Montero S.A.A.	Libor USD 3M + de 4.9% a 5.5%	2018 / 2020	113,412	122,836	363,564	339,546
GyM Ferrovías	Libor USD 1M + de 2%	2018	-	148,553	-	-
Viva GyM S.A.	7.00% / 10.94%	2018 / 2018	157,592	144,132	-	861
CAM Holding S.A.	6.05% / 13.76%	2018 / 2020	77,775	91,160	12,807	10,190
GMP S.A.	4.45% / 6.04%	2018 / 2020	42,911	43,269	96,245	90,960
Adexus S.A.	3.63% / 3.98%	2018 / 2019	46,552	58,279	3,175	-
CONCAR S.A.	7.50%	2018	812	22	-	-
			990,467	1,136,356	571,167	534,382

i) Credit Suisse Syndicated Loan

In December 2015, the Group entered into a medium term loan credit agreement for up to US$200 million (equivalent to S/672 million), with Credit Suisse AG, Cayman Islands Branch and Credit Suisse Securities (USA) LLC. The initial term of the loan was set at five years, with quarterly installments starting to be paid on the 18th month. The loan accrued interest at a rate of three months Libor plus 3.9% per year. The proceeds were used to finance the equity interest in GSP. As of December 31, 2016, the outstanding balance amounted to US$148.5 million (equivalent to S/481.9 million), and it’s included within the current portion.

-21-

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

UNAUDITED

On June 27, 2017, the Group renegotiated the terms of this loan to clear breaches related to the termination of the GSP concession. The new terms require repayment by December, 2020, with required prepayments to be made with the proceeds of asset sales of 40% in the first year and an additional 30% in the second year of the amendment. The syndicated loan accrues interest at LIBOR plus 4.90% per year. Under the amendment, the Group is prohibited from paying dividends until the loan is fully repaid. The loan is secured by (i) a lien on Concar’s shares; (ii) a lien on Almonte’s shares; (iii) a mortgage over certain real estate properties in Miraflores and Surquillo; (iv) liens on certain accounts; (v) a lien on GyM’s share; (vi) a second lien on CAM’s shares; (vii) a second lien on CAM Servicios del Perú S.A.’s shares; and (viii) a first lien on cash flows from the sale of certain assets.

The agreement contains certain covenants, including the obligation by the Group to maintain the following financial ratios during the term of the agreement: (1) the Consolidated EBITDA to Consolidated Interest Expense Ratio shall not be less than 3.5:1.0 commencing on April 1, 2018 and thereafter; (2) the Consolidated Leverage Ratio (as defined therein) shall not be greater than 3.5:1.0 at any time during the period commencing on December 31, 2016 and ending on March 31, 2017; 3.5:1.0 at any time during the period commencing on July 1, 2017 and ending on September 30, 2017; and no greater than 2.5:1.0 at any time thereafter; and (3) the Debt Service Coverage Ratio as of the last day of any fiscal quarter of the borrower, falling on or after the first anniversary of the closing date, shall not be less than 1.5:1.0, commencing on April 1, 2018 and thereafter.

As of to date, the outstanding balance of the loan capital is US$76.3 million (equivalent to S/246.4 million).

ii) GSP Bridge Loan

At December 31, 2016, the current balance includes US$129 million (equivalent to S/433.3 million) of the corporate guarantee issued by the Company to secure the bridge loan given to GSP, which was enforceable at that date. On June, 2017, the Company has reached a new term loan with Natixis, BBVA, SMBC and MUFJ for US$78.7 million (equivalent to S/264.8 million), the proceeds of which were used to repay the GSP bridge loan.

The maturity is June, 2020, with required prepayments to be made with the proceeds of asset sales of 40% in the first year and an additional 30% in the second year. The new term contains the following covenant: the consolidated leverage ratio shall not be more than 3.5:1.0 at any time, and accrues interest at LIBOR plus 4.50% per year, which increases to 5.00% during the second year and 5.50% during the third year. Under the new term, the Group is prohibited from paying dividends until the loan is fully repaid. Also, the new term is secured by (i) a first lien on our rights to receive the termination payment derived from the GSP termination (the “VCN”), (ii) a second lien on our shares of GyM and Concar; (iii) a second lien on our shares of Almonte; (iv) a second lien on certain real estate properties in Miraflores and Surquillo; (v) a second lien on our shares of CAM; (vi) a second lien on our shares of CAM Servicios del Perú S.A.; and (vii) a first lien on cash flows from the sale of certain assets.

As of to date, the outstanding balance of the loan capital is US$72.5 million (equivalent to S/235.3 million)

-22-

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

UNAUDITED

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, 2017		At March 31, 2018		At December 31, 2017		At March 31, 2018
Total loans		1,690,063		1,782,622		1,768,160		1,878,017

The fair value is based on cash flows discounted using a rate based on the borrowing rate of 3.6% and 13.8% (2.4% and 13.8% in 2017). It should be noted that the interest rate used are those applicable and negotiated by each Company.

14 BONDS

This item is broken down as follows:

	Total			Current			Non-Current
		At December 31, 2017	At March 31, 2018		At December 31, 2017	At March 31, 2018		At December 31, 2017	At March 31, 2018
GyM Ferrovías (a)		603,657	605,523		12,294	12,516		591,363	593,007
Norvial (b)		343,910	338,328		24,361	23,146		319,549	315,182
		947,567	943,851		36,655	35,662		910,912	908,189

a) GyM Ferrovías S.A.

In February 2015 subsidiary GyM Ferrovías issued corporate bonds under the U.S. Regulation S. This issue was carried out in Peruvian Soles VAC (the Spanish acronym for constant value update) for a total amount of S/629 million. The issues costs for this transactions were for S/22 million. Maturity of these bonds is November 2039 and bear interest at a rate of 4.75% (plus VAC adjustment), they have a risk rating of AA+ (local grading)  granted by Apoyo & Asociados Internacionales Clasificadora de Riesgo and a collateral structure that includes a mortgage on the concession to which GyM Ferrovías is a concessionaire, security on the shares of GyM Ferrovías, Assignment of the collection rights arising from the Management Trust, a Cash Flow and Reserve Trust for the Service of the Debt, Operation and Maintenance and in-progress Capex. At March 31, 2018 the Group made a payment of S/60 million (2018 payments totals S/. 2.5 million).

Capital raised from bond issue were used in amortizing a short-term loan with Banco de Crédito del Perú – BCP for S/400 million, funding the reserve accounts, payment of costs of bond issue and partial repayment of the subordinated loan obtained from parent Company by GyM Ferrovías.

At March 31, 2018 the balance includes accrued interest payable for S/3 million.

As part of the process of bond structuring, GyM Ferrovías engaged to adhere to the following covenants:

- Debt service coverage ratio of not less than 1.2 times.

- Keeping a constant minimum balance of trust equal to a quarter of operating and maintenance costs (including VAT)

- Keeping a constant minimum balance of trust equal to two coupons as per schedule.

As of December 31,2017 and March 31, 2018 the Company has complied with its covenants.

On August 23, 2017, GyM Ferrovias S. A. and Line One CPAO Purchaser LLC entered into the Sale and Purchase Agreement and Assignment of Rights Agreement regarding the CPAO (“Pago Anual por Inversiones Complementarias” in Spanish) derived from the Concession Agreement for up to US$ 316 million.

-23-

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

UNAUDITED

On August 23,2017, GyM Ferrovias S. A. as Borrower, Mizuho Bank, Ltd. and Sumintomo Mitsui Banking Corporation as Lenders and Mizuho Bank, Ltd. as Administrative Agent entered into a US$80 million Working Capital loan agreement to partially finance the Expansion Project of Line 1 Lima Metro. As of the close of this report, USD 46 million has been disbursed.

b) Norvial S.A.

In July 2015, Norvial S.A. issued the First Corporate Bond Program on the Lima Stock Exchange for a total S/365 million. The first issue was for S/80 million at 5 years, bearing an interest rate of 6.75% and funds were drawn on July 23, 2015. The second issue was for S/285 million at 11.5 years, bearing an interest rate of 8.375%, structured in 3 disbursements: the first disbursement of S/105 million was on July 23,2015; the second disbursement of S/100 million was on January 25, 2016; the third disbursement of S/80 million was received in July 25, 2016. The issuance costs corresponding to the first issue and to the first and second disbursements of the second issue were for S/3.9 million. Risk rating agencies Equilibrium y Apoyo & Asociados Internacionales graded this debt instrument AA. This financing transaction has been secured by (i) a cash flow trust, related to the consideration and the regulatory rate; (ii) a mortgage on the concession in which Norvial S.A. is a concessionaire; (iii) a security on shares: (iv) collection rights and (v) in general, all those additional collaterals given to the secured creditors. The capital raised is intended to finance the construction of the Second Phase of Red Vial No.5 and the financing of VAT arising from a project- related expenses.

As of March 31, 2018 the balance included interest payables for S/4.2 million (S/4.4 million at December 31, 2017)

As part of the process of bond structuring, Norvial engaged to adhere to the following covenants:

- Debt service coverage ratio of not less than 1.3 times.

- Proforma gearing ratio lower than 4 times.

As of December 31,2017 and March 31, 2018 the Company has complied with its covenants.

Fair value of the bonds of both Companies at March 31, 2018 amounted to S/1.061 million (at December 31,2017 amounted to S/1,036 million), which has been calculated based on the discounted cash flows, using rates between 4.38% and 5.90% (rates between 4.49% and 6.63% at December 31,2017) which are within level 2 of the fair value hierarchy.

15 PROVISIONS

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

	At December 31, 2017		At March 31, 2018
Current portion		13,503		13,068
Non-current portion		32,396		31,462
		45,899		44,530

-24-

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

UNAUDITED

The movement of this item for the period ended December 31, 2017 and March 31, 2018 is as follows:

				Contingent
				liabilities			Provision
	Legal			resulting from			for well
Other provisions	claims			acquisitions			closure			Total
At January 1, 2017		15,732			8,125			17,216			41,073
Additions		83			-			879			962
Reversals of provisions		(20	)		-			-			(20	)
Payments		(2,501	)		-			-			(2,501	)
Translation adjustments		(2	)		(133	)		-			(135	)
At March 31, 2017		13,292			7,992			18,095			39,379
At January 1, 2018		20,699			8,396			16,804			45,899
Additions		1,369			161			(554	)		976
Reversals of provisions		(1,928	)		(438	)		-			(2,366	)
Payments		(117	)		(302	)		-			(419	)
Translation adjustments		52			387			-			439
At March 31, 2018		20,076			8,204			16,250			44,530

16 CAPITAL

As of December 31, 2016 and 2017, 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, 2017, the amount of 259,302,745 common shares is represented by 51,860,549 ADSs, at 5 shares per ADS..

As of March 31, 2018, the amount of 257,977,735 common shares is represented by 51,595,547 ADSs, at 5 shares per ADS.

17 EXPENSES BY NATURE

For the period ended March 31, 2017 and 2018, this item comprises:

-25-

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

UNAUDITED

	Cost of		Adminis-
	services		trative-
	and goods		expenses
2017
Inventories, materials and consumables used		260,411		-
Personnel charges		374,273		55,833
Services provided by third-parties		361,757		15,529
Taxes		3,708		562
Other management charges		141,012		16,432
Depreciation		45,637		4,612
Amortization		19,693		3,929
Impairment of inventories		301		-
Impairment of accounts receivable		85		-
Impairment of property, plant and equipment		314		19
		1,207,191		96,916
2018
Inventories, materials and consumables used		204,997		50
Personnel charges		387,874		44,110
Services provided by third-parties		360,976		28,989
Taxes		271		255
Other management charges		141,768		16,022
Depreciation		39,990		2,239
Amortization		21,801		1,322
Impairment of accounts receivable		107		3
		1,157,784		92,990

As of December 31, 2017, the subsidiary Viva GyM found signs of impairment in inventories item, therefore, the subsidiary calculated the recoverable amount of such assets  as the fair value determined by appraisals made by independent experts. As a result, impairment was recorded for S/ 37 million. Impaired assets corresponds mainly to the properties of the Nuevo Rancho project, apartments (S / 30 million) and land (S / 5.7 million).

18 INCOME TAX

These condensed interim consolidated financial statements for the period ended March 31, 2018, income tax expense is recognized 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 March 31,2018 is 170.46% (31.06% for the period ended March 31, 2017). 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.

19 CONTINGENCIES, COMMITTMENTS AND GUARANTEES

As of March 31, 2018, contingencies held by the Group are substantially the same as those existing as of December 31, 2017.

In addition the Group had guarantee commitments with different financial institutions securing transactions in the amount of US$187.4 million.

-26-

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

UNAUDITED

20 DIVIDENDS

As part of the covenants at the refinancing agreements mentioned in note 13, the Company is unable to pay dividends until the cancellation of all liabilities related to these borrowings.

For the period ended March 31, 2018, the Group has paid dividends to its non-controlling subsidiaries participate by S/5 million (S/4.5 million for the same period in 2017).

21 EVENTS AFTER THE DATE OF THE STATEMENT OF FINANCIAL POSITION

Between March 31, 2018 and the date of approval of the condensed interim consolidated financial statements, there have been no subsequent events that may affect the fairness of the financial statements issued.

Continuing with the non-strategic assets divestment process initiated by the Company, on March 28, 2018, the subsidiary GYM sold its total share (87.59%) in Stracon GyM S.A. for a total of US $

76.8 million. All of the inflows will be used to amortize their financial obligations.

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