6-K 1 a52517379.htm AENZA S.A.A. 6-K
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 October 2021

 Commission File Number 001-35991

AENZA S.A.A.
(Exact name of registrant as specified in its charter)
 
N/A
(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.

October 29, 2021


Sincerely yours,


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.

AENZA S.A.A.

By: /s/ DANIEL URBINA PEREZ
Name: Daniel Urbina Perez
Title: Chief Legal Officer
Date: October 29, 2021










AENZA S.A.A AND SUBSIDIARIES



CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31, 2020 AND SEPTEMBER 30, 2021 (UNAUDITED)

AENZA S.A.A AND SUBSIDIARIES


CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER 31, 2020  AND SEPTEMBER 30, 2021 (UNAUDITED)



CONTENTS
Page
   
   
Consolidated Statement of Financial Position
1
   
Consolidated Statement of Income
2
   
Consolidated Statement of Comprehensive Income
3
   
Consolidated Statement of Changes in Equity
4
   
Consolidated Statement of Cash Flows
5
   
Notes to the Consolidated Financial Statements
6 - 36


S/
=
Peruvian Sol
US$
 =
United States dollar
 
AENZA S.A.A. AND SUBSIDIARIES
                                
                                 
                                 
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
                          
(All amounts are expressed in thousands of S/ unless otherwise stated)
                    
                                 
ASSETS
              
LIABILITIES AND EQUITY
                
       
As of
  
As of
          
As of
    
As of
  
         December 31,    September 30,            December 31,      September 30,  
   
Note
  
2020
  
2021
      
Note
  
2020
    
2021
  
                                 
Current assets
              
Current liabilities
                
Cash and cash equivalents
  
8
  
              900,168
  
           1,019,547
  
Borrowings
  
15
  
              452,884
    
              297,913
  
Trade accounts receivables, net
  
9
  
              703,167
  
              721,184
  
Bonds
  
16
  
                58,446
    
              424,461
  
Work in progress
  
10
  
              186,433
  
              273,088
  
Trade accounts payable
  
17
  
           1,097,167
    
           1,042,243
  
Accounts receivable from related parties
  
11
  
                27,338
  
                30,835
  
Accounts payable to related parties
  
11
  
                43,818
    
                42,963
  
Other accounts receivable
  
12
  
              433,531
  
              399,919
  
Current income tax
      
                34,494
    
                61,137
  
Inventories, net
      
              552,000
  
              544,223
  
Other accounts payable
  
18
  
              718,406
    
              957,554
  
Prepaid expenses
      
                22,972
  
                27,225
  
Other provisions
  
19
  
                92,757
    
              105,805
  
Total current assets
      
           2,825,609
  
           3,016,021
  
Total current liabilities
      
           2,497,972
    
           2,932,076
  
                                 
Non-current assets
              
Non-current liabilities
                
Trade accounts receivable, net
  
9
  
              730,666
  
              765,660
  
Borrowings
  
15
  
              445,436
    
              408,040
  
Accounts receivable from related parties
  
11
  
              620,071
  
              671,838
  
Bonds
  
16
  
              874,313
    
              849,249
  
Prepaid expenses
      
                22,264
  
                18,873
  
Trade accounts payable
  
17
  
                40,502
    
                35,535
  
Other accounts receivable
  
12
  
              328,223
  
              371,789
  
Other accounts payable
  
18
  
              183,232
    
              160,249
  
Investments in associates and joint ventures
  
13
  
                35,516
  
                35,688
  
Accounts payable to related parties
  
11
  
                36,297
    
                51,006
  
Investment property
      
                26,073
  
                22,952
  
Other provisions
  
19
  
              336,609
    
              376,937
  
Property, plant and equipment, net
  
14
  
              405,469
  
              364,789
  
Deferred income tax liability
      
              102,907
    
                97,955
  
Intangible assets, net
  
14
  
              791,990
  
              747,691
  
Total non-current liabilities
      
           2,019,296
    
           1,978,971
  
Right-of-use assets, net
  
14
  
                64,518
  
                52,262
  
Total liabilities
      
           4,517,268
    
           4,911,047
  
Deferred income tax asset
      
              262,165
  
              300,365
                    
Total non-current assets
      
           3,286,955
  
           3,351,907
  
Equity
  
20
            
               
Capital
      
              871,918
    
              871,918
  
               
Legal reserve
      
              132,011
    
              132,011
  
               
Voluntary reserve
      
                29,974
    
                29,974
  
               
Share Premium
      
           1,131,574
    
           1,131,574
  
               
Other reserves
      
(169,234
 )
 
(168,102
 )
               
Retained earnings
      
(728,637
 )
 
(832,123
 )
               
Equity attributable to controlling interest in the Company
           1,267,606
    
           1,165,252
  
               
Non-controlling interest
      
              327,690
    
              291,629
  
               
Total equity
      
           1,595,296
    
           1,456,881
  
Total assets
      
           6,112,564
  
           6,367,928
  
Total liabilities and equity
      
           6,112,564
    
           6,367,928
  

The accompanying notes on pages 6 to 40 are an integral part of the consolidated financial statements.
- 1 -
AENZA S.A.A. AND SUBSIDIARIES
                  
                   
                   
CONSOLIDATED STATEMENT OF INCOME
                  
(All amounts are expressed in thousands of S/ unless otherwise stated)
              
                   
         
For the period
  
         
ended September 30,
  
   
Note
    
2020
    
2021
  
                   
                   
Revenues from construction activities
          
1,218,445
      
1,572,793
  
Revenues from services provided
          
747,447
      
884,544
  
Revenue from real estate and sale of goods
          
257,145
      
407,449
  
           
2,223,037
      
2,864,786
  
                       
Cost of construction activities
          
(1,149,551
)
    
(1,515,536
)
Cost of services provided
          
(658,657
)
    
(740,217
)
Cost of real estate and sale of goods
          
(202,286
)
    
(324,936
)
   
21
      
(2,010,494
)
    
(2,580,689
)
Gross profit
          
212,543
      
284,097
  
                       
Administrative expenses
  
21
      
(121,444
)
    
(141,961
)
Other income and expenses
  
22
      
(36,100
)
    
(6,610
)
Operating profit
          
54,999
      
135,526
  
                       
Financial expenses
  
23
      
(102,205
)
    
(184,915
)
Financial income
  
23
      
13,961
      
4,169
  
Share of the profit or loss of associates and joint ventures accounted for using the equity method
  
13
      
1,945
      
2,422
  
Loss before income tax
          
(31,300
)
    
(42,798
)
Income tax expense
          
(14,796
)
    
(37,142
)
Loss for the period
          
(46,096
)
    
(79,940
)
                       
(Loss) profit attributable to:
                      
Owners of the Company
          
(55,143
)
    
(103,486
)
Non-controlling interest
          
9,047
      
23,546
  
           
(46,096
)
    
(79,940
)
                       
                       
Loss per share attributable to owners of the
                      
Company during the period
  
27
      
(0.063
)
    
(0.119
)

The accompanying notes on pages 6 to 40 are an integral part of the consolidated financial statements.
- 2 -
AENZA S.A.A. AND SUBSIDIARIES
                  
                   
                   
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
                  
(All amounts are expressed in thousands of S/ unless otherwise stated)
                  
                   
         
For the period
  
         
ended September 30,
  
   
Note
    
2020
    
2021
  
                   
                   
Loss for the period
    
     
(46,096
)
    
(79,940
)
Other comprehensive income:
                        
Items that may be subsequently  reclassified to profit or loss
                        
Cash flow hedge, net of tax
            
(626
)
    
-
  
Foreign currency translation adjustment, net of tax
            
(14,465
)
    
2,305
  
Exchange difference from net investment in a foreign operation, net of tax
            
144
      
74
  
Other comprehensive income for the period, net of tax
            
(14,947
)
    
2,379
  
Total comprehensive income for the period
            
(61,043
)
    
(77,561
)
                         
Comprehensive income attributable to:
                        
Owners of  the Company
            
(65,850
)
    
(102,354
)
Non-controlling interest
            
4,807
      
24,793
  
             
(61,043
)
    
(77,561
)

The accompanying notes on pages 6 to 40 are an integral part of the consolidated financial statements.
- 3 -
AENZA S.A.A. AND SUBSIDIARIES
                                                            
                                                             
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
                                                        
FOR THE PERIOD ENDED SEPTEMBER 30, 2020 AND 2021
                                                        
(All amounts are expressed in thousands of S/ unless otherwise stated)
                                                  
   
Attributable to the controlling interests of the Company
              
   
Number
                                                        
   
of shares
          
Legal
    
Voluntary
    
Share
    
Other
    
Retained
          
Non-controlling
        
   
In thousands
    
Capital
    
reserve
    
reserve
    
premium
    
reserves
    
earnings
    
Total
    
interest
    
Total
  
                                                             
                                                             
Balances as of January 1, 2020
    
871,918
      
871,918
      
132,011
      
29,974
      
1,132,179
      
(177,506
)
    
(510,766
)
    
1,477,810
      
398,275
      
1,876,085
  
(Loss) profit for the period
    
-
      
-
      
-
      
-
      
-
      
-
      
(55,143
)
    
(55,143
)
    
9,047
      
(46,096
)
Cash flow hedge
    
-
      
-
      
-
      
-
      
-
      
(594
)
    
-
      
(594
)
    
(32
)
    
(626
)
Foreign currency translation adjustment
    
-
      
-
      
-
      
-
      
-
      
(10,257
)
    
-
      
(10,257
)
    
(4,208
)
    
(14,465
)
Exchange difference from net investment in a foreign operation
    
-
      
-
      
-
      
-
      
-
      
144
      
-
      
144
      
-
      
144
  
Comprehensive income of the period
    
-
      
-
      
-
      
-
      
-
      
(10,707
)
    
(55,143
)
    
(65,850
)
    
4,807
      
(61,043
)
Transactions with shareholders:
                                                                                
- Dividend distribution
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
(64,716
)
    
(64,716
)
- Contributions (devolution) of non-controlling shareholders, net
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
(11,419
)
    
(11,419
)
- Additional acquisition of non-controlling
    
-
      
-
      
-
      
-
      
(605
)
    
-
      
-
      
(605
)
    
(89
)
    
(694
)
Total transactions with shareholders
    
-
      
-
      
-
      
-
      
(605
)
    
-
      
-
      
(605
)
    
(76,224
)
    
(76,829
)
Balances as of September 30, 2020
    
871,918
      
871,918
      
132,011
      
29,974
      
1,131,574
      
(188,213
)
    
(565,909
)
    
1,411,355
      
326,858
      
1,738,213
  
                                                                                 
Balances as of January 1, 2021
    
871,918
      
871,918
      
132,011
      
29,974
      
1,131,574
      
(169,234
)
    
(728,637
)
    
1,267,606
      
327,690
      
1,595,296
  
(Loss) profit for the period
    
-
      
-
      
-
      
-
      
-
      
-
      
(103,486
)
    
(103,486
)
    
23,546
      
(79,940
)
Foreign currency translation adjustment
    
-
      
-
      
-
      
-
      
-
      
1,058
      
-
      
1,058
      
1,247
      
2,305
  
Exchange difference from net investment in a foreign operation
    
-
      
-
      
-
      
-
      
-
      
74
      
-
      
74
      
-
      
74
  
Comprehensive income of the period
    
-
      
-
      
-
      
-
      
-
      
1,132
      
(103,486
)
    
(102,354
)
    
24,793
      
(77,561
)
Transactions with shareholders:
                                                                                
- Dividend distribution
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
(36,250
)
    
(36,250
)
- Contributions (devolution) of non-controlling shareholders, net
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
(24,604
)
    
(24,604
)
Total transactions with shareholders
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
(60,854
)
    
(60,854
)
Balances as of September 30, 2021
    
871,918
      
871,918
      
132,011
      
29,974
      
1,131,574
      
(168,102
)
    
(832,123
)
    
1,165,252
      
291,629
      
1,456,881
  
The accompanying notes on pages 6 to 40 are an integral part of the consolidated financial statements.
- 4 -
AENZA S.A.A. AND SUBSIDIARIES
                  
                   
                   
CONSOLIDATED STATEMENT OF CASH FLOWS
                  
(All amounts are expressed in thousands of S/ unless otherwise stated)
                  
                   
         
For the period
  
         
ended September 30,
  
   
Note
    
2020
    
2021
  
                   
OPERATING ACTIVITIES
                  
Loss before income tax
          
(31,300
)
    
(42,798
)
Adjustments to  profit not affecting cash flows from operating activities:
                      
Depreciation
  
21
      
79,167
      
75,804
  
Amortization
  
21
      
75,164
      
74,153
  
Impairment of inventories
          
107
      
-
  
Impairment of accounts receivable and other accounts receivable
          
28,886
      
1,323
  
Reversal of impairment of inventories
          
(1,567
)
    
-
  
Debt condonation
          
(205
)
    
-
  
Reversal of property, plant and equipment
          
(319
)
    
(1,939
)
Impairment of intangible assets
          
8
      
-
  
Change in the fair value of the liability for put option
          
969
      
-
  
Other provisions
          
31,093
      
8,026
  
Financial expense,net
          
160,282
      
205,813
  
Impairment of work in progress
          
13,595
      
-
  
Share of the profit and loss of associates and joint ventures accounted for using the equity method
  
13
      
(1,945
)
    
(2,422
)
Reversal of provisions
          
(7,108
)
    
(9,101
)
Disposal of assets
          
2,322
      
5,627
  
(Profit) loss on sale of property, plant and equipment
          
(9
)
    
111
  
(Profit) loss on remeasurement of accounts receivable
          
(9,778
)
    
69,471
  
Net variations in assets and liabilities:
                      
Trade accounts receivable and working in progress
          
114,478
      
(135,177
)
Other accounts receivable
          
42,885
      
(70
)
Other accounts receivable from related parties
          
(30,836
)
    
(86,556
)
Inventories
          
(50,485
)
    
9,178
  
Pre-paid expenses and other assets
          
1,076
      
(862
 )
Trade accounts payable
          
(169,619
)
    
(61,760
)
Other accounts payable
          
68,456
      
173,132
  
Other accounts payable to related parties
          
15,823
      
(4,097
)
Other provisions
          
(5,347
)
    
(4,681
)
Interest payment
          
(99,912
)
    
(112,109
)
Payments for purchases of intangibles - Concessions
          
(890
)
    
(2,280
)
Payment of income tax
          
(83,799
)
    
(57,331
)
Net cash provided by operating activities
          
141,192
      
101,455
  
                       
INVESTING ACTIVITIES
                      
Sale of property, plant and equipment
          
5,563
      
6,476
  
Interest received
          
3,163
      
1,703
  
Dividends received
          
701
      
2,236
  
Payment for purchase of investments properties
          
(40
)
    
(124
)
Payments for intangible purchase
          
(39,498
)
    
(25,669
)
Payments for property, plant and equipment purchase
          
(24,746
)
    
(24,823
)
Net cash applied to investing activities
          
(54,857
)
    
(40,201
)
                       
FINANCING ACTIVITIES
                      
Loans received
          
66,466
      
208,224
  
Bonds issued
          
-
      
359,890
  
Amortization of loans received
          
(194,079
)
    
(443,425
)
Amortization of bonds issued
          
(28,022
)
    
(37,403
)
Payment for transaction costs for debt
          
-
      
(6,534
)
Dividends paid to non-controlling interest
          
(55,085
)
    
(18,225
)
Cash received (return of contributions) from non-controlling shareholders
          
(11,419
)
    
(24,604
)
Net cash applied to financing activities
          
(222,139
)
    
37,923
  
Net increase (net decrease) in cash
          
(135,804
)
    
99,176
  
Exchange difference
          
5,182
      
20,178
  
Cash and cash equivalents at the beginning of the period
          
950,701
      
900,168
  
Cash and cash equivalents at the end of the period
  
8
      
820,079
      
1,019,522
  
                       
NON-CASH TRANSACTIONS:
                      
Capitalization of interests
          
5,129
      
1,792
  
Acquisition of assets through finance leases
          
55
      
58
  
Dividends declared to non-controlling interest
          
9,631
      
18,025
  
Acquisition of right-of-use assets
          
9,673
      
5,707
  
Acquisition of supplier bonds
          
25,871
      
-
  
The accompanying notes on pages 6 to 40 are an integral part of the consolidated financial statements.
- 5 -
AENZA S.A.A (FORMERLY GRAÑA Y MONTERO S.A.A.) AND SUBSIDIARIES

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER 31, 2020 AND SEPTEMBER 30, 2021 (UNAUDITED)

1.       GENERAL INFORMATION

a) Incorporation and operations

AENZA S.A.A., (hereinafter the “Company”) is the parent Company of the AENZA S.A.A. Corporation that includes the Company and its subsidiaries (hereinafter, the “Corporation”) and is mainly engaged in holding investments in Corporation companies. Additionally, the Company provides services of strategic and functional advice and office leases space to the Corporation companies.

The General Shareholder’s Meeting on November 2, 2020 approved the modification of the Company’s corporate name from Graña y Montero S.A.A. to AENZA S.A.A. which is effective as of February 4, 2021.

The Corporation is a conglomerate of companies with operations including different business activities, the most significant are engineering and construction, infrastructure (public concession ownership and operation) and real estate businesses. See details of operating segments in Note 7.

b) Authorization for the issue of the financial statements

The condensed interim consolidated financial statements for the period ended September 30, 2021 were authorized by Management and Board of Directors on October 29, 2021.

The consolidated financial statements for the year ended December 31, 2020, have been prepared and issued with authorization of Management and the Board of Directors on March 5, 2021, and were approved on the General Shareholders’ Meeting held on March 31, 2021.

Since the date the financial statements were submitted to our shareholders for their approval, until the date of presentation to the Securities and Exchange Commission of the financial information attached to the annual report 20F, subsequent events with material impact on our results occurred and as a result, and in compliance with International Financial Reporting Standards (IFRS), we have recorded such impacts herein, this was revealed through a relevant information communication on May 17, 2021. The events referred to previously, are related mainly to the considerable progress in the negotiations of the Company’s plea bargain agreement, which allowed us to reassess our estimate of our exposure to the contingencies including within its scope. As a result, the amounts included in our financial statements were restructured.

After the filing of the Form 20-F, the Company signed an “Acta de Acuerdo Preparatorio de Colaboracion y Beneficios” (the “Agreement”), with the “Procuraduria Publica ad Hoc”. who dedicate themselves exclusively to the knowledge of investigations related to Crimes of Corruption of Officials and related incurred by the company Odebrecht and others (the “Prosecutor's Office” and with the ad hoc Public Prosecutor's Office for investigations and processes related to crimes of corruption of officials, money laundering and related assets incurred by the company Odebrecht and others (the "Office of the Attorney General"). Pursuant to the Agreement, the Company assumed an obligation to pay a civil penalty, which is within the estimates included in such financial information. The effects of the Effective Collaboration Agreement will enter into force as of their judicial approval.

The consolidated restructured financial statements for the year ended December 31, 2020 have been prepared and issued with authorization of Management and the Board of Directors on June 9, 2021 to ensure consistency between the information presented to the markets in which the Company’s securities are traded, and were approved on the General Mandatory Shareholder’s Meeting held on July 6, 2021.
- 6 -

c) Acta de Acuerdo Preparatorio de Colaboración y Beneficios – “The Agreement”

Pursuant to the Agreement executed on May 21, 2021, AENZA S.A.A. accepts it was utilized by certain former executives to commit illicit acts until 2016, and commits to pay a civil penalty to the Peruvian State of S/321.9 million and US$40.7 million.  The civil penalty is subject to (i) a repayment tenor of 12 years, (ii) the legal interest rate in domestic and foreign currency, (iii) a total collateral of S/197 million through a trust that includes shares issued by a subsidiary of AENZA, a mortgage on a real estate asset and debt service guaranty account. Among other conditions, the Agreement includes a restriction to participate in public construction and road maintenance contracts for 2 years.  As of September 30, 2021, we registered the present value of the amounts described before, which amount to S/165.1 million and US$17.2 million (totaling S/236.2 million).

The civil penalty covers the total contingency to which the Company was exposed because of the investigations revealed in the notes to the financial statements since 2017.  Nevertheless, the Agreement enforceability is subject to court approval and its terms and conditions are subject to confidentiality provisions in such agreement

d)
Changes in Shareholders and Board of Directors

On June 15, 2021, the Company was informed that IG4 Capital Infrastructure Investments LP (“IG4”) announced an “Oferta Publica de Adquisición” (“OPA”), or tender offer, for a total of 107,198,601 common shares with voting rights equivalent to 12.99% of the total stock issued by AENZA S.A.A.  Furthermore, the Company was informed by other shareholders representing collectively 12.72% of the common shares that 8.82% executed a vote sindication agreement with IG4 and that 3.4% transferred their shares to a trust in which IG4 holds the decision on voting rights (“derechos politicos”).

On August 10, 2021, the Company was informed that IG4 purchased a significant shareholding participation in AENZA S.A.A., amounting to 25.13% of the company’s capital stock, from which 12.29% was purchased within the OPA and 12.84% was purchased through the “Transaction Documents”, as such documents were denominated in the Offering Information Prospectus updated on July 12, 2021.  Furthermore, on August 12, 2021, certain shareholders of AENZA S.A.A. executed an Amendment to the Contrato de Fideicomiso with IG4 as “fideicomisario” and La Fiduciaria S.A. as “Fiduciaria”, in which, among other aspects, IG4 purchased the voting rights of AENZA’s common shares representing approximately 8.74% of the company’s capital stock, subject to a tenor of 8 years, which could be automatically renewed for an additional period of 8 years.

On August 26, 2021, the Company’s Board of Directors agreed to appoint Mr. André Mastrobuono as new Chief Executive Officer, effective on October 1, 2021. Mr. Luis Díaz Olivero would execute its duties as CEO until such date.

On September 20, 2021, a General Shareholders Meeting was held, in which a renewed Board of Directors was elected for the 2021-2024 period. On the same day, in a Board Meeting, Mr. Juan Vicente Revilla Vergara was appointed as Chairman of the Board and Mr. Gustavo Nickel Buffara de Freitas was appointed as Vice Chairman.  In addition, the Board approved the following changes in the Board Committees:


 1.
Change of denomination of the Strategy and Investments Committee to the Finance, Risks and Investments Committee;

2.
Merge the Audit Committee and the Risks and Compliance Committee into a new Audit and Compliance Committee, and transfer the supervision of risks to the Finance, Risks and Investments Committee;

3.
Create the Environmental, Social and Governance (ESG) Committee;

4.
Designate the members of the Board Committees:

(a)
Audit and Compliance Committee: Carlos Rojas Perla (Chairman), Santiago Hernando Pérez y Antonio Carlos Valente Da Silva.
(b) Environmental, Social and Governance (ESG) Committee: Gema Esteban Garrido (Chairman), Antonio Carlos Valente Da Silva y Esteban Viton Ramírez.

 (c)
Talent Committee: Juan Vicente Revilla Vergara (Chairman), Gustavo Nickel Buffara de Freitas, Santiago Hernando Pérez y Esteban Viton Ramirez.

(d)
Finance, Risks and Investments Committee: Pablo Ignacio Kühlenthal Becker (Chairman), Nicolás Bañados Lyon, Carlos Rojas Perla y Gustavo Nickel Buffara de Freitas

e) New State of emergency due to COVID

On September 16, 2021, the Peruvian Government extended the State of National Emergency for a period of 30 days as a result of COVID-19. Likewise, certain economic activities are restricted, according to the alert level in each department of Peru, until October 31, 2021. Management considers that the measures taken by the national authorities have no impact on the continuity and development of the operations of the Company because the activities carried out by the Company are within the group of permitted activities and have not been significantly impacted by the pandemic.

The Company’s Management continues to monitor the evolution of the situation and the guidance of the national and international authorities, since events beyond the control of Management may arise that require modifying the established business plan. A further spread of Covid-19 and the consequent measures taken to limit the spread of the disease could affect the ability to conduct business in the normal way and, therefore, affect the financial position and results of operations.

Citizen immobilization, the restriction of activities of strategic companies as well as the paralysis of public entities have affected the execution of investment projects as well as the performance of exploration activities, until the date of approval of the financial statements, it is not expected that operations and going concern will be affected.

2.       BASIS OF PREPARATION

The condensed interim consolidated financial statements for the period ended September 30, 2021 have been prepared in accordance with IAS 34 "Interim Financial Reporting". The condensed interim consolidated financial statements provide comparative information regarding prior periods; however, they do not include all the information and disclosures required in the annual consolidated financial statements, so they must be read together with the audited consolidated financial statements for the year ended December 31, 2020, which have been prepared in accordance with International Standards. of Financial Information (hereinafter "IFRS").
- 7 -

The condensed interim consolidated financial statements are presented in thousands of Peruvian Soles, unless otherwise stated.

3.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting policies used in the preparation of these condensed interim consolidated financial statements are consistent with those applied in the preparation of the consolidated financial statements at December 31, 2020.

4.       FINANCIAL RISK MANAGEMENT

Financial risk management is carried out by the Corporation’s Management. Management oversees the general management of risks in specific areas, such as foreign exchange rate risk, price risk, cash flow and fair value interest rate risk, credit risk, the use of derivative and non-derivative financial instruments and the investment of excess liquidity, which are supervised and monitored periodically.

4.1     Financial risk factors

The Corporation’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, price risk, fair value interest rate risk and cash flow interest rate risk), credit risk and liquidity risk. The Corporation’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Corporation’s financial performance.

a) Market risks

i) Foreign exchange risk

The Corporation is exposed to exchange rate risk as a result of the transactions carried out locally in foreign currency and due to its operations abroad. As of December 31, 2020 and September 30, 2021, this exposure is mainly concentrated in fluctuations of U.S. dollar, the Chilean and Colombian Pesos.

The balances of financial assets and liabilities denominated in foreign currencies correspond to balances in U.S. dollars, which are expressed at the published bid and ask exchange rate in effect at that date, according to the currency exchange rate:

   
At
    
At
  
   
December 31,
    
September 30,
  
   
2020
    
2021
  
             
Soles (a)
    
3.624
      
4.136
  
Chilean Pesos (b)
    
711.24
      
811.90
  
Colombian Pesos (c)
    
3,432.50
      
3,834.68
  

(a) Soles published by the Superintendency of Banking, Insurance and Pension Fund Administrators (SBS).
(b) Chilean pesos published by the Banco Central de Chile.
(c) Colombian pesos published by Banco of the Republica de Colombia.

The consolidated statement of financial position includes the following:
- 8 -
   
As of December 31, 2020
    
As of September 30, 2021
  
     
S/(000
)
  
USD(000)
      
S/(000
)
  
USD(000)
  
                             
Assets
    
2,125,400
      
586,479
      
2,089,791
      
505,266
  
Liabilities
    
1,165,475
      
321,599
      
2,615,696
      
632,422
  

For the periods ended September 30, 2020 and 2021, the Corporation’s exchange gains and losses for the Peruvian Sol, the Chilean and Colombian Pesos exposure against the U.S. dollar was:

   
2020
    
2021
  
             
Gain
    
321,590
      
355,243
  
Loss
    
(320,483
)
    
(372,876
)

ii) Price risk

Management considers that the exposure of the Corporation to the price risk of its investments in mutual funds, bonds, and equity securities is low since the invested amounts are not significant. Any fluctuation in their fair value will not have any significant impact on the balances reported in the consolidated financial statements.

iii) Cash flow and fair value interest rate risk

The Corporation’s interest rate risk mainly arises from its long-term borrowings. Borrowings issued at variable rates expose the Corporation to cash flow interest rate risk. Borrowings issued at fixed rates expose the Corporation to fair value interest rate risk.

b) Credit risk

Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions, as well as customer credit counterparties, including the outstanding balance of accounts receivable and committed transactions.

Concerning to loans to related parties, the Corporation has measures in place to ensure the recovery of these loans through the controls maintained by the Corporate Finance Management and the performance evaluation conducted by the Board of Directors.

Management does not expect the Corporation to incur any losses from the performance by these counterparties, except for the ones already recorded at the financial statements.

c) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and cash equivalents, the availability of funding through an adequate number of sources of committed credit facilities and the capacity to close out positions in the market. Historically, the Corporation cash flows enabled it to meet its obligations. Due to the COVID-19 pandemic (Note 1-e), the Corporation has implemented various actions to reduce its exposure to liquidity risk, and has developed a Financial Plan based on several steps, which were designed assuming attaining a plea bargain agreement within a reasonable time frame. The Financial Plan aims to enable compliance with the various obligations at the corporate and group companies’ levels.

The Corporation’s Corporate Finance Office monitors rolling forecasts of the Corporation’s liquidity requirements to ensure it exists sufficient cash to meet operational needs so that the Corporation does not breach borrowing limits or covenants, where applicable, on any of its borrowing facilities. Less significant financing transactions are controlled by the Finance Management of each subsidiary.
- 9 -

Such forecasting takes into consideration the Corporation’s debt financing plans, covenant compliance, compliance with internal ratio targets in the statement of financial position and, if applicable, external regulatory or legal requirements, for example, foreign currency restrictions.

Surplus cash held by the operating entities over the balance required for working capital management is invested in interest-bearing checking accounts or time deposits, selecting instruments with appropriate maturities and sufficient liquidity.

The table below analyzes the Corporation’s financial liabilities into relevant maturity groupings based on the remaining period from the date of the consolidated statement of financial position to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows, which include interest to be applied according to the established schedule.

   
Less than
      
1-2
      
2-5
    
More than
        
As of December 31, 2020
  
1 year
    
years
    
years
    
5 years
    
Total
  
                                   
Other financial liabilities (except
                                  
for finance leases and lease
                                  
liability for right-of-use asset)
    
433,318
      
183,796
      
197,785
      
23,953
      
838,852
  
Finance leases
    
16,287
      
14,919
      
20,851
      
8,515
      
60,572
  
Lease liability for right-of-use asset
    
24,714
      
32,006
      
19,847
      
11,131
      
87,698
  
Bonds
    
137,090
      
168,673
      
385,919
      
971,543
      
1,663,225
  
Trade accounts payables (except
                                        
non-financial liabilities)
    
1,001,470
      
40,502
      
-
      
-
      
1,041,972
  
Accounts payables to related parties
    
43,818
      
35,461
      
-
      
836
      
80,115
  
Other accounts payables (except
                                        
non-financial liabilities)
    
356,101
      
62,943
      
230,352
      
322,123
      
971,519
  
     
2,012,798
      
538,300
      
854,754
      
1,338,101
      
4,743,953
  

   
Less than
      
1-2
      
2-5
    
More than
        
As of September 30, 2021
  
1 year
    
years
    
years
    
5 years
    
Total
  
                                   
Other financial liabilities (except
                                  
  for finance leases and lease
                                  
  liability for right-of-use asset)
    
283,202
      
59,790
      
163,119
      
147,391
      
653,502
  
Finance leases
    
14,188
      
14,197
      
24,133
      
5,682
      
58,200
  
Lease liability for right-of-use asset
    
22,795
      
17,445
      
28,308
      
10,877
      
79,425
  
Bonds
    
1,254,506
      
173,457
      
450,584
      
826,629
      
2,705,176
  
Trade accounts payables (except
                                        
  non-financial liabilities)
    
1,009,563
      
6,879
      
22,548
      
9,732
      
1,048,722
  
Accounts payables to related parties
    
42,963
      
51,006
      
-
      
-
      
93,969
  
Other accounts payables (except
                                        
  non-financial liabilities)
    
377,676
      
62,377
      
236,625
      
336,509
      
1,013,187
  
     
3,004,893
      
385,151
      
925,317
      
1,336,820
      
5,652,181
  

4.2     Capital management risk

The Corporation’s objectives when managing capital are to safeguard the Corporation’s ability to continue as a going concern in order to provide returns for shareholders, benefits for other stakeholders and to maintain an optimal capital structure to minimize the cost of capital.  In 2017 the situation of the Corporation had lead Management to monitor deviations that might cause the non-compliance of covenants and may hinder the renegotiation of liabilities (Note 15). In extraordinary events as explained in Note 1, the Corporation identifies the possible deviations and requirements and establishes a plan.

In order to maintain or adjust the capital structure, the Corporation may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

The Corporation monitors capital based on 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 ‘equity’ as shown in the consolidated statement of financial position plus net debt.
- 10 -

As of December 31, 2020 and September 30, 2021, the gearing ratio is presented below indicating the Corporation’s strategy to keep it in a range from 0.08 to 0.70.

   
At
    
At
  
   
December 31,
    
September 30,
  
   
2020
    
2021
  
Total financial liabilities and bonds (Note 15 and Note 16)
    
1,831,079
      
1,979,663
  
Less: Cash and cash equivalents (Note 8)
    
(900,168
)
    
(1,019,547
)
Net debt
    
930,911
      
960,116
  
Total equity
    
1,595,296
      
1,456,881
  
Total capital
    
2,526,207
      
2,416,997
  
                 
Gearing ratio
    
0.37
      
0.40
  

4.3     Fair value estimation

For the classification of the type of valuation used by the Corporation 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 Corporation).

The table below shows the Corporation’s liabilities measured at fair value:

   
Level 3
  
As of December 31, 2020
      
       
Financial liabilities
      
Other financial entities (Note 15-b)
    
152,523
  
         
As of September 30, 2021
        
         
Financial liabilities
        
Other financial entities (Note 15-b)
    
169,534
  

5.       CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

Estimates and judgments used are continuously evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

In preparing these condensed interim consolidated financial statements, the significant judgements made by management in applying the Corporation’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, 2020.
- 11 -

6.       SEASONALITY OF OPERATIONS

The Corporation does not present seasonality in the operations of any of its subsidiaries; however, economic activities temporarily restricted due to COVID-19 pandemic and government measures implemented to contain the spread of the virus. As a result,  this situation affected negatively Corporation's revenues and financial position (Note 1.e).

7.       OPERATING SEGMENTS

Operating segments are reported consistently with the internal reports that are reviewed by the Corporation’ chief decision-maker; that is, the Executive Committee, which is led by the Chief Executive Officer. This Committee acts as the highest authority in making operational decisions, responsible for allocating resources and evaluating the performance of each operating segment.

The Corporation's operating segments are assessed by the activities of the following business units: (i) engineering and construction, (ii) infrastructure, and (iii) real estate.

As set forth under IFRS 8, reportable segments by significance of income are: ‘engineering and construction’ and ‘infraestructure’. However, the Corporation has voluntarily decided to report on all its operating segments.

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 are measured in a manner consistent with the basis of preparation of the financial statements. Sales of goods are related to Real State segment. Revenues from services are related to other segments.

Corporation sales and receivables are not concentrated on a few customers. There is no external customer that represents 10% or more of the Goup’s revenue.

The table below shows the Corporation’s financial statements by operating segments:
- 12 -
Operating segments financial position
                                            
Segment reporting
                                                      
         
Infrastructure
                          
As of December 31, 2020
  
Engineering and construction
    
Energy
    
Toll roads
    
Transportation
    
Water treatment
    
Real estate
    
Parent
Company
operations
    
Eliminations
    
Consolidated
  
                                                       
Assets.-
                                                      
Cash and cash equivalent
    
382,850
      
60,165
      
117,893
      
207,975
      
7,408
      
73,531
      
50,346
      
-
      
900,168
  
Trade accounts receivables, net
    
425,939
      
37,614
      
25,014
      
111,602
      
565
      
38,043
      
64,390
      
-
      
703,167
  
Work in progress, net
    
186,433
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
186,433
  
Accounts receivable from related parties
    
107,495
      
35
      
31,868
      
2,624
      
30
      
1,342
      
102,103
      
(218,159
)
    
27,338
  
Other accounts receivable
    
323,084
      
27,900
      
23,631
      
13,220
      
197
      
10,446
      
35,051
      
2
      
433,531
  
Inventories, net
    
58,653
      
36,016
      
8,496
      
31,861
      
-
      
418,341
      
360
      
(1,727
)
    
552,000
  
Prepaid expenses
    
7,798
      
1,964
      
6,485
      
328
      
116
      
-
      
6,281
      
-
      
22,972
  
Total current assets
    
1,492,252
      
163,694
      
213,387
      
367,610
      
8,316
      
541,703
      
258,531
      
(219,884
)
    
2,825,609
  
                                                                         
Long-term trade accounts receivable, net
    
53,036
      
-
      
15,740
      
632,214
      
-
      
2,181
      
27,495
      
-
      
730,666
  
Long-term accounts receivable from related parties
    
315,393
      
-
      
14,508
      
-
      
11,103
      
-
      
611,498
      
(332,431
)
    
620,071
  
Prepaid expenses
    
-
      
981
      
19,009
      
2,048
      
736
      
-
      
-
      
(510
)
    
22,264
  
Other long-term accounts receivable
    
134,719
      
70,694
      
531
      
-
      
7,346
      
54,237
      
60,696
      
-
      
328,223
  
Investments in associates and joint ventures
    
109,870
      
8,080
      
-
      
-
      
-
      
6,095
      
1,322,865
      
(1,411,394
)
    
35,516
  
Investment property
    
1,467
      
-
      
-
      
-
      
-
      
24,606
      
44,521
      
(44,521
)
    
26,073
  
Property, plant and equipment, net
    
169,091
      
166,382
      
9,186
      
794
      
146
      
9,592
      
16,718
      
33,560
      
405,469
  
Intangible assets, net
    
143,575
      
250,327
      
371,437
      
681
      
-
      
872
      
19,017
      
6,081
      
791,990
  
Right-of-use assets, net
    
8,179
      
9,872
      
4,626
      
99
      
-
      
3,936
      
51,401
      
(13,595
)
    
64,518
  
Deferred income tax asset
    
174,269
      
4,717
      
5,037
      
-
      
779
      
18,704
      
53,536
      
5,123
      
262,165
  
Total non-current assets
    
1,109,599
      
511,053
      
440,074
      
635,836
      
20,110
      
120,223
      
2,207,747
      
(1,757,687
)
    
3,286,955
  
Total assets
    
2,601,851
      
674,747
      
653,461
      
1,003,446
      
28,426
      
661,926
      
2,466,278
      
(1,977,571
)
    
6,112,564
  
                                                                         
Liabilities.-
                                                                        
Borrowings
    
230,682
      
32,550
      
2,405
      
42
      
-
      
95,709
      
102,469
      
(10,973
)
    
452,884
  
Bonds
    
4,546
      
-
      
32,819
      
21,081
      
-
      
-
      
-
      
-
      
58,446
  
Trade accounts payable
    
861,833
      
51,225
      
51,221
      
32,637
      
61
      
42,565
      
57,625
      
-
      
1,097,167
  
Accounts payable to related parties
    
185,104
      
1,083
      
17,738
      
21,531
      
-
      
19,074
      
15,708
      
(216,420
)
    
43,818
  
Current income tax
    
26,922
      
1,351
      
1,638
      
3,606
      
166
      
-
      
811
      
-
      
34,494
  
Other accounts payable
    
525,195
      
12,905
      
35,997
      
6,719
      
766
      
91,976
      
40,252
      
4,596
      
718,406
  
Provisions
    
8,876
      
18,943
      
1,659
      
-
      
-
      
492
      
62,787
      
-
      
92,757
  
Total current liabilities
    
1,843,158
      
118,057
      
143,477
      
85,616
      
993
      
249,816
      
279,652
      
(222,797
)
    
2,497,972
  
                                                                         
Borrowings
    
25,273
      
103,154
      
2,291
      
59
      
-
      
11,021
      
328,753
      
(25,115
)
    
445,436
  
Long-term bonds
    
22,911
      
-
      
248,029
      
603,373
      
-
      
-
      
-
      
-
      
874,313
  
Long-term trade accounts payable
    
-
      
-
      
-
      
-
      
-
      
-
      
40,502
      
-
      
40,502
  
Other long-term accounts payable
    
140,605
      
-
      
11,623
      
231
      
2,762
      
23,357
      
4,654
      
-
      
183,232
  
Long-term accounts payable to related parties
    
104,432
      
-
      
836
      
36,297
      
24,207
      
-
      
186,886
      
(316,361
)
    
36,297
  
Provisions
    
122,503
      
37,599
      
26,034
      
1,925
      
-
      
-
      
148,548
      
-
      
336,609
  
Deferred income tax liability
    
25,576
      
36,793
      
1,518
      
39,020
      
-
      
-
      
-
      
-
      
102,907
  
Total non-current liabilities
    
441,300
      
177,546
      
290,331
      
680,905
      
26,969
      
34,378
      
709,343
      
(341,476
)
    
2,019,296
  
Total liabilities
    
2,284,458
      
295,603
      
433,808
      
766,521
      
27,962
      
284,194
      
988,995
      
(564,273
)
    
4,517,268
  
Equity attributable to controlling interest in the Company
    
261,501
      
354,982
      
161,710
      
177,694
      
464
      
138,933
      
1,474,398
      
(1,302,076
)
    
1,267,606
  
Non-controlling interest
    
55,892
      
24,162
      
57,943
      
59,231
      
-
      
238,799
      
2,885
      
(111,222
)
    
327,690
  
Total liabilities and equity
    
2,601,851
      
674,747
      
653,461
      
1,003,446
      
28,426
      
661,926
      
2,466,278
      
(1,977,571
)
    
6,112,564
  

- 13 -
Operating segments financial position
                                                      
Segment reporting
                                                      
                           
Infrastructure
                          
     Engineering                                    Parent              
As of September 30, 2021
  
 and construction
    

Energy
    

Toll roads
    

Transportation
    
Water treatment
    

Real estate
    
 Company operations
    

Eliminations
    

Consolidated
  
                                                       
Assets.-
                                                      
Cash and cash equivalent
    
335,319
      
111,936
      
109,887
      
174,421
      
6,694
      
92,950
      
188,340
      
-
      
1,019,547
  
Trade accounts receivables, net
    
439,763
      
68,507
      
44,677
      
105,052
      
1,618
      
8,251
      
53,316
      
-
      
721,184
  
Work in progress, net
    
273,088
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
273,088
  
Accounts receivable from related parties
    
113,414
      
94
      
57,554
      
4,058
      
30
      
2,531
      
162,726
      
(309,572
)
    
30,835
  
Other accounts receivable
    
286,482
      
29,474
      
30,182
      
20,637
      
819
      
5,858
      
26,465
      
2
      
399,919
  
Inventories, net
    
55,466
      
39,683
      
7,778
      
32,760
      
38
      
407,235
      
2,997
      
(1,734
)
    
544,223
  
Prepaid expenses
    
10,635
      
2,226
      
5,167
      
551
      
52
      
-
      
8,594
      
-
      
27,225
  
Total current assets
    
1,514,167
      
251,920
      
255,245
      
337,479
      
9,251
      
516,825
      
442,438
      
(311,304
)
    
3,016,021
  
Investments available for sale
    
-
      
6,198
      
2
      
-
      
-
      
-
      
-
      
(6,200
)
    
-
  
Total current assets
    
1,514,167
      
258,118
      
255,247
      
337,479
      
9,251
      
516,825
      
442,438
      
(317,504
)
    
3,016,021
  
                                                                         
Long-term trade accounts receivable, net
    
78,127
      
-
      
16,101
      
658,422
      
-
      
-
      
13,010
      
-
      
765,660
  
Long-term accounts receivable from related parties
    
351,459
      
-
      
14,930
      
-
      
11,427
      
-
      
796,694
      
(502,672
)
    
671,838
  
Prepaid expenses
    
-
      
981
      
15,773
      
1,932
      
697
      
-
      
-
      
(510
)
    
18,873
  
Other long-term accounts receivable
    
176,801
      
85,497
      
-
      
-
      
7,346
      
59,356
      
42,789
      
-
      
371,789
  
Investments in associates and joint ventures
    
108,144
      
9,373
      
-
      
-
      
-
      
5,442
      
1,242,366
      
(1,329,637
)
    
35,688
  
Investment property
    
-
      
-
      
-
      
-
      
-
      
22,952
      
43,049
      
(43,049
)
    
22,952
  
Property, plant and equipment, net
    
153,291
      
151,838
      
7,787
      
697
      
140
      
7,279
      
11,669
      
32,088
      
364,789
  
Intangible assets, net
    
148,156
      
240,614
      
333,224
      
596
      
-
      
775
      
19,035
      
5,291
      
747,691
  
Right-of-use assets, net
    
4,857
      
4,871
      
4,787
      
71
      
22
      
2,417
      
45,212
      
(9,975
)
    
52,262
  
Deferred income tax asset
    
189,751
      
4,032
      
13,744
      
-
      
775
      
18,878
      
68,057
      
5,128
      
300,365
  
Total non-current assets
    
1,210,586
      
497,206
      
406,346
      
661,718
      
20,407
      
117,099
      
2,281,881
      
(1,843,336
)
    
3,351,907
  
Total assets
    
2,724,753
      
755,324
      
661,593
      
999,197
      
29,658
      
633,924
      
2,724,319
      
(2,160,840
)
    
6,367,928
  
                                                                         
Liabilities.-
                                                                        
Borrowings
    
156,660
      
26,959
      
3,198
      
47
      
18
      
75,357
      
48,853
      
(13,179
)
    
297,913
  
Bonds
    
4,492
      
-
      
34,429
      
23,400
      
-
      
-
      
368,338
      
(6,198
)
    
424,461
  
Trade accounts payable
    
817,148
      
56,007
      
37,914
      
27,393
      
335
      
32,194
      
64,032
      
7,220
      
1,042,243
  
Accounts payable to related parties
    
212,679
      
1,060
      
51,637
      
38,697
      
24
      
18,791
      
13,633
      
(293,558
)
    
42,963
  
Current income tax
    
35,164
      
13,377
      
11,724
      
-
      
242
      
152
      
478
      
-
      
61,137
  
Other accounts payable
    
701,903
      
20,412
      
40,881
      
9,224
      
826
      
117,921
      
61,116
      
5,271
      
957,554
  
Provisions
    
14,952
      
15,572
      
1,670
      
-
      
-
      
595
      
73,016
      
-
      
105,805
  
Total current liabilities
    
1,942,998
      
133,387
      
181,453
      
98,761
      
1,445
      
245,010
      
629,466
      
(300,444
)
    
2,932,076
  
                                                                         
Borrowings
    
11,430
      
116,551
      
1,757
      
24
      
5
      
6,620
      
293,512
      
(21,859
)
    
408,040
  
Long-term bonds
    
22,125
      
-
      
224,778
      
602,346
      
-
      
-
      
-
      
-
      
849,249
  
Long-term trade accounts payable
    
-
      
-
      
-
      
-
      
-
      
-
      
35,535
      
-
      
35,535
  
Other long-term accounts payable
    
119,521
      
-
      
9,286
      
219
      
3,136
      
25,399
      
2,688
      
-
      
160,249
  
Long-term accounts payable to related parties
    
238,986
      
-
      
836
      
88,508
      
24,671
      
-
      
206,316
      
(508,311
)
    
51,006
  
Provisions
    
133,847
      
45,560
      
31,112
      
2,651
      
-
      
-
      
163,767
      
-
      
376,937
  
Deferred income tax liability
    
18,971
      
32,888
      
-
      
46,096
      
-
      
-
      
-
      
-
      
97,955
  
Total non-current liabilities
    
544,880
      
194,999
      
267,769
      
739,844
      
27,812
      
32,019
      
701,818
      
(530,170
)
    
1,978,971
  
Total liabilities
    
2,487,878
      
328,386
      
449,222
      
838,605
      
29,257
      
277,029
      
1,331,284
      
(830,614
)
    
4,911,047
  
Equity attributable to controlling interest in the Company
    
182,809
      
397,820
      
155,950
      
120,444
      
401
      
137,409
      
1,390,212
      
(1,219,793
)
    
1,165,252
  
Non-controlling interest
    
54,066
      
29,118
      
56,421
      
40,148
      
-
      
219,486
      
2,823
      
(110,433
)
    
291,629
  
Total liabilities and equity
    
2,724,753
      
755,324
      
661,593
      
999,197
      
29,658
      
633,924
      
2,724,319
      
(2,160,840
)
    
6,367,928
  
- 14 -

Operating segment performance
                                            
Segment Reporting
                                                      
         
Infrastructure
                          
For the period ended September 30, 2020
  
Engineering
and
construction
    
Energy
    
Toll roads
    
Transportation
    
Water
treatment
    
Real estate
    
Parent
Company
operations
    
Elimination
    
Consolidated
  
                                                       
Revenue
    
1,435,515
      
272,966
      
305,099
      
253,923
      
2,511
      
66,473
      
176,585
      
(290,035
)
    
2,223,037
  
Gross profit (loss)
    
82,102
      
41,264
      
30,314
      
80,122
      
640
      
13,958
      
1,251
      
(37,108
)
    
212,543
  
Administrative expenses
    
(78,484
)
    
(11,758
)
    
(12,502
)
    
(9,932
)
    
(299
)
    
(14,150
)
    
(33,629
)
    
39,310
      
(121,444
)
Other income and expenses, net
    
3,756
      
(5,632
)
    
(13,532
)
    
66
      
13
      
730
      
(20,882
)
    
(619
)
    
(36,100
)
Operating  profit (loss)
    
7,374
      
23,874
      
4,280
      
70,256
      
354
      
538
      
(53,260
)
    
1,583
      
54,999
  
Financial expenses
    
(43,863
)
    
(14,724
)
    
(24,865
)
    
(4,721
)
    
(27
)
    
(8,665
)
    
(14,031
)
    
8,691
      
(102,205
)
Financial income
    
4,843
      
1,167
      
4,874
      
2,337
      
329
      
4,321
      
5,893
      
(9,803
)
    
13,961
  
Dividends
    
-
      
-
      
-
      
-
      
-
      
-
      
2,342
      
(2,342
)
    
-
  
Share of profit or loss in associates
                                                                        
and joint ventures
    
(258
)
    
1,686
      
-
      
-
      
-
      
32
      
(2,749
)
    
3,234
      
1,945
  
(Loss) profit before income tax
    
(31,904
)
    
12,003
      
(15,711
)
    
67,872
      
656
      
(3,774
)
    
(61,805
)
    
1,363
      
(31,300
)
Income tax
    
(3,003
)
    
(3,059
)
    
140
      
(20,651
)
    
(357
)
    
878
      
12,732
      
(1,476
)
    
(14,796
)
(Loss) profit for the year
    
(34,907
)
    
8,944
      
(15,571
)
    
47,221
      
299
      
(2,896
)
    
(49,073
)
    
(113
)
    
(46,096
)
                                                                         
(Loss) profit from attributable to:
                                                                        
Owners of the Company
    
(31,439
)
    
6,504
      
(13,785
)
    
35,416
      
299
      
(1,822
)
    
(49,035
)
    
(1,281
)
    
(55,143
)
Non-controlling interest
    
(3,468
)
    
2,440
      
(1,786
)
    
11,805
      
-
      
(1,074
)
    
(38
)
    
1,168
      
9,047
  
     
(34,907
)
    
8,944
      
(15,571
)
    
47,221
      
299
      
(2,896
)
    
(49,073
)
    
(113
)
    
(46,096
)

- 15 -

Operating segment performance
                                            
Segment Reporting
                                                      
         
Infrastructure
                          
For the Period ended September 30, 2021
  
Engineering
and
construction
    
Energy
    
Toll roads
    
Transportation
    
Water
treatment
    
Real estate
    
Parent
Company
operations
    
Elimination
    
Consolidated
  
                                                       
Revenue
    
1,783,054
      
376,616
      
374,467
      
260,366
      
2,694
      
144,734
      
174,332
      
(251,477
)
    
2,864,786
  
Gross profit (loss)
    
80,019
      
82,927
      
56,063
      
68,753
      
724
      
21,085
      
11,303
      
(36,777
)
    
284,097
  
Administrative expenses
    
(92,214
)
    
(10,500
)
    
(12,267
)
    
(11,493
)
    
(335
)
    
(10,941
)
    
(42,959
)
    
38,748
      
(141,961
)
Other income and expenses, net
    
(3,224
)
    
(2,434
)
    
(1,808
)
    
1,215
      
(15
)
    
992
      
(1,046
)
    
(290
)
    
(6,610
)
Operating (loss) profit
    
(15,419
)
    
69,993
      
41,988
      
58,475
      
374
      
11,136
      
(32,702
)
    
1,681
      
135,526
  
Financial expenses
    
(79,538
)
    
(9,144
)
    
(21,100
)
    
(6,806
)
    
(91
)
    
(8,804
)
    
(83,774
)
    
24,342
      
(184,915
)
Financial income
    
1,441
      
3,147
      
2,979
      
382
      
384
      
2,454
      
17,894
      
(24,512
)
    
4,169
  
Dividends
    
-
      
-
      
-
      
-
      
-
      
-
      
12,200
      
(12,200
)
    
-
  
Share of profit or loss in associates
                                                                        
and joint ventures
    
(1,712
)
    
2,046
      
-
      
-
      
-
      
830
      
2,331
      
(1,073
)
    
2,422
  
(Loss) profit before income tax
    
(95,228
)
    
66,042
      
23,867
      
52,051
      
667
      
5,616
      
(84,051
)
    
(11,762
)
    
(42,798
)
Income tax
    
7,596
      
(18,248
)
    
(6,279
)
    
(16,384
)
    
(266
)
    
(1,850
)
    
(1,679
)
    
(32
)
    
(37,142
)
(Loss) profit for the year
    
(87,632
)
    
47,794
      
17,588
      
35,667
      
401
      
3,766
      
(85,730
)
    
(11,794
)
    
(79,940
)
                                                                         
(Loss) profit from attributable to:
                                                                        
Owners of the Company
    
(84,528
)
    
42,838
      
10,989
      
26,750
      
401
      
(1,525
)
    
(85,668
)
    
(12,743
)
    
(103,486
)
Non-controlling interest
    
(3,104
)
    
4,956
      
6,599
      
8,917
      
-
      
5,291
      
(62
)
    
949
      
23,546
  
     
(87,632
)
    
47,794
      
17,588
      
35,667
      
401
      
3,766
      
(85,730
)
    
(11,794
)
    
(79,940
)

- 16 -

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

8.       CASH AND CASH EQUIVALENTS

This account comprises:

   
At December 31,
    
At September 30,
  
   
2020
    
2021
  
             
Cash on hand
    
996
      
892
  
Remittances in-transit
    
2,340
      
2,094
  
Bank accounts (a)
    
274,582
      
461,671
  
Current accounts
    
161,227
      
178,759
  
Banco de la Nacion
    
20,862
      
20,010
  
Savings deposits and mutual funds
    
9,038
      
3,489
  
Time deposits (less than 3 months)
    
83,455
      
259,413
  
Escrow account (b)
    
622,250
      
554,890
  
Operational funds
    
298,435
      
241,706
  
Reserve funds
    
144,737
      
172,819
  
Consortium funds
    
122,088
      
71,177
  
Guarantee funds
    
56,990
      
69,189
  
     
900,168
      
1,019,547
  

(a)
The Corporation maintains current accounts with local and foreign banks that include time deposits have maturities less than 90 days and may be renewed upon maturity. These deposits earn interest that fluctuates between 0.18% and 0.90%. Additionally, it includes current accounts in the Banco de la Nacion for the exclusive use of paying tax obligations.


(b)
The Corporation maintains trust accounts in local and foreign banks for the exclusive use of operations in projects and join operations. It also includes reserve funds for the payments of bonds issued by the subsidiaries Tren Urbano de Lima S.A. and Norvial S.A. amounting to S/115 million and S/23 million, respectively, as of September 30, 2021 (S/132 million and S/21 million, respectively, as of December 31, 2020).

The above figures are reconciled with the amount of cash shown in the consolidated statement of cash flows at the end of the period as follows:

   
At
    
At
  
   
December 31,
    
September 30,
  
   
2020
    
2021
  
Cash and cash equivalent on consolidated  statement of financial position
    
900,168
      
1,019,547
  
Bank overdrafts (Note 15)
    
-
)
    
(25
)
Balances per consolidated statement of cash flows
    
900,168
      
1,019,522
  

- 17 -

9.       TRADE ACCOUNTS RECEIVABLES, NET

This account comprises:

   
Total
    
Current
    
Non-current
  
   
At
    
At
    
At
    
At
    
At
    
At
  
   
December 31,
    
September 30,
    
December 31,
    
September 30,
    
December 31,
    
September 30,
  
   
2020
    
2021
    
2020
    
2021
    
2020
    
2021
  
                                     
Receivables (net) (a)
    
753,693
      
813,195
      
254,587
      
309,580
      
499,106
      
503,615
  
Unbilled receivables (net) - Subsidiaries (b)
    
413,364
      
385,422
      
337,244
      
297,702
      
76,120
      
87,720
  
Unbilled receivables (net) - Concessions (c)
    
266,776
      
288,227
      
111,336
      
113,902
      
155,440
      
174,325
  
     
1,433,833
      
1,486,844
      
703,167
      
721,184
      
730,666
      
765,660
  

a)
Receivables are presented net of impairment and present value discount. The value of the impairment amounts to S/43.6 million (S/47.2 million as of December 31, 2020). The ageing is detailed as follows:

   
At
    
At
  
   
December 31,
    
September 30,
  
   
2020
    
2021
  
Current
    
718,220
      
740,687
  
Past due up to 30 days
    
5,737
      
35,747
  
Past due from 31 days up to 90 days
    
6,801
      
13,223
  
Past due from 91 days up to 120 days
    
2,279
      
8,129
  
Past due from 121 days up to 360 days
    
4,185
      
1,336
  
Past due over 360 days
    
16,471
      
14,073
  
     
753,693
      
813,195
  

As of September 30, 2021, the amount overdue for more than 360 days mainly includes invoices receivable from subsidiaries: Cumbra Peru S.A. for S/9.8 million, UNNA Transporte S.A.C. for S/2.5 million, Cumbra Ingenieria S.A. for S/1.7 million, and others for S/0.1 million (Cumbra Peru S.A. for S/12.5 million, UNNA Transporte S.A.C. for S/2.7 million, Cumbra Ingenieria S,A. for S/0.8 millones and others for S/0.5 millones, as of December 31, 2020).

b)
Unbilled receivables from subsidiaries correspond to the estimates for services rendered that were not billed, valuations in process or pending approval. The balance includes impairment for S/5.6 million and present value discount for S/7.7 million (impairment for S/5.9 million and present value discount for S/12.5 million, as of December 31, 2020), and detailed by subsidiary:

   
At
    
At
  
   
December 31,
    
September 30,
  
   
2020
    
2021
  
Cumbra Peru S.A.
    
315,878
      
277,951
  
UNNA Transporte S.A.C.
    
6,298
      
10,808
  
Cumbra Ingenieria S.A.
    
25,823
      
46,195
  
UNNA Energia S.A.
    
1,512
      
2,524
  
Adexus S.A.
    
63,853
      
47,936
  
Qualys S.A.
    
-
      
8
  
     
413,364
      
385,422
  

c)
Unbilled receivables from concessions correspond to future invoice according to Concession Contract terms, as detailed below:

- 18 -

   
At
    
At
  
   
December 31,
    
September 30,
  
   
2020
    
2021
  
Tren Urbano de Lima S.A.
    
235,763
      
249,937
  
Survial S.A.
    
10,611
      
12,490
  
Norvial S.A.
    
15,436
      
18,643
  
Concesión Canchaque S.A.C.
    
4,401
      
6,536
  
Concesionaria La Chira S.A.
    
565
      
621
  
     
266,776
      
288,227
  

10.     WORK IN PROGRESS

This account comprises:

   
At
    
At
  
   
December 31,
    
September 30,
  
   
2020
    
2021
  
             
Cumbra Peru S.A.
    
170,965
      
264,244
  
Cumbra Ingenieria S.A.
    
15,468
      
8,844
  

   
186,433
      
273,088
  

Work in progress costs include all those expenses incurred for construction contracts. The Corporation estimates that all costs incurred will be billed and collected.

The main projects of work in progress, grouped by subsidiary, are presented below:

   
At
    
At
  
   
December 31,
    
September 30,
  
   
2020
    
2021
  
             
Vial y Vives - DSD S.A. - Quebrada Blanca Project
    
73,337
      
61,089
  
Vial y Vives - DSD S.A. - Modernization and expansion of Arauco Plant
    
24,224
      
104,681
  
Cumbra Peru S.A. - Concentrator Plant and tunnel of Quellaveco
    
68,701
      
91,422
  
Cumbra Peru S.A. - Talara Refinery
    
15,468
      
12,123
  
Others
    
4,703
      
3,773
  
     
186,433
      
273,088
  

11.     TRANSACTIONS WITH RELATED PARTIES

a) Transactions with related parties

Major transactions for the periods ended September 30, 2020 and 2021 between the Company and its related parties are summarized as follows:

   
2020
    
2021
  
Revenue from sales of goods and services:
            
- Joint operations
    
4,300
      
13,035
  

Inter-company services are agreed based on market terms and conditions as if they had been agreed with third parties.
- 19 -

b) Balances of transactions with related parties

   
As of December 31,
    
As of September 30,
  
   
2020
    
2021
  
   
Receivable
    
Payable
    
Receivable
    
Payable
  
Current portion:
                        
Joint operations
                        
Consorcio Rio Urubamba
    
9,357
      
-
      
10,007
      
-
  
Consorcio Rio Mantaro
    
-
      
7,655
      
-
      
8,618
  
Consorcio Constructor Chavimochic
    
-
      
6,208
      
-
      
9,440
  
Consorcio Peruano de Conservacion
    
3,156
      
-
      
615
      
2,377
  
Consorcio Vial Quinua
    
-
      
2,051
      
-
      
2,013
  
Consorcio Chicama Ascope
    
2,922
      
-
      
4,295
      
-
  
Consorcio Inti Punku
    
-
      
6,556
      
6,477
      
-
  
Consorcio GyM Conciviles
    
1,341
      
1,472
      
1,530
      
50
  
Consorcio Manperan
    
1,057
      
656
      
574
      
869
  
Consorcio Italo Peruano
    
1,520
      
217
      
1,381
      
135
  
Consorcio Norte Pachacutec
    
1,077
      
1,192
      
117
      
285
  
Consorcio Ermitaño
    
890
      
474
      
978
      
531
  
Terminales del Peru
    
501
      
161
      
96
      
161
  
Consorcio CDEM
    
1,111
      
-
      
34
      
-
  
Consorcio GyM-Stracon
    
-
      
644
      
-
      
98
  
Consorcio TNT Vial y Vives - DSD Chile Ltda
    
-
      
1,015
      
-
      
599
  
Otros menores
    
2,446
      
1,701
      
1,874
      
2,388
  
     
25,378
      
30,002
      
27,978
      
27,564
  
                                 
Other related parties
                                
Ferrovias S.A.
    
-
      
11,139
      
-
      
13,241
  
Peru Piping Spools S.A.C.
    
1,960
      
2,677
      
2,857
      
2,158
  
     
1,960
      
13,816
      
2,857
      
15,399
  
Current portion
    
27,338
      
43,818
      
30,835
      
42,963
  
                                 
                                 
                                 
Non-current portion
                                
Gasoducto Sur Peruano S.A.
    
620,071
      
-
      
671,838
      
-
  
Ferrovias S.A.
    
-
      
12,862
      
-
      
13,507
  
Ferrovias Participaciones S.A.
    
-
      
23,435
      
-
      
37,499
  
Non-current
    
620,071
      
36,297
      
671,838
      
51,006
  

Receivables and payables are mainly current and do not have specific guarantees.

Accounts receivable from related parties are mainly to sales of goods and services. These balances do not bear interest and as of September 30, 2021 do not require a provision for impairment. The account receivable from Gasoducto Sur Peruano S.A. is presented net of impairment and present value discount; the variation between December 2020 and September 2021, is mainly due to the effect of the exchange difference, generating an income of S/83.4 million; and the impact of the discount rate applied to the calculation of the present value, that generated an expense of S/31.6 million (Note 23).

Accounts payable to related parties mainly related to services of engineering, construction, maintenance and others. Such accounts are not interest bearing because they are short-term.
- 20 -

12.     OTHER ACCOUNTS RECEIVABLE

This account comprises:

   
Total
    
Current
    
Non-current
  
   
At
    
At
    
At
    
At
    
At
    
At
  
   
December 31,
    
September 30,
    
December 31,
    
September 30,
    
December 31,
    
September 30,
  
   
2020
    
2021
    
2020
    
2021
    
2020
    
2021
  
                                     
Advances to suppliers
    
76,200
      
39,278
      
76,200
      
39,278
      
-
      
-
  
Income tax on-account payments
    
48,054
      
50,375
      
48,052
      
50,373
      
2
      
2
  
VAT credit
    
54,076
      
56,031
      
43,498
      
46,297
      
10,578
      
9,734
  
Guarantee deposits
    
217,441
      
221,024
      
156,123
      
136,141
      
61,318
      
84,883
  
Claims to third parties
    
212,565
      
238,430
      
108,748
      
112,751
      
103,817
      
125,679
  
Petroleos del Peru S.A.- Petroperu S.A.
    
87,826
      
106,382
      
17,132
      
20,885
      
70,694
      
85,497
  
ITAN and other tax receivable
    
63,003
      
40,439
      
30,468
      
6,789
      
32,535
      
33,650
  
Restricted funds
    
29,121
      
40,038
      
2,092
      
32,692
      
27,029
      
7,346
  
Rental and sale of equipment - Cumbra Peru S.A. projects
    
29,149
      
34,348
      
29,149
      
34,348
      
-
      
-
  
Accounts receivable from personneel
    
10,957
      
13,468
      
10,957
      
13,376
      
-
      
92
  
Consorcio Panorama
    
25,026
      
28,267
      
-
      
-
      
25,026
      
28,267
  
Other minors
    
10,386
      
9,202
      
9,738
      
9,065
      
648
      
137
  
     
863,804
      
877,281
      
532,157
      
501,994
      
331,647
      
375,287
  
Impairment
    
(102,050
)
    
(105,573
)
    
(98,626
)
    
(102,075
)
    
(3,424
)
    
(3,498
)
     
761,754
      
771,708
      
433,531
      
399,919
      
328,223
      
371,789
  

The fair value of the other short-term accounts receivable is similar to their book value due to their short-term maturity. The non-current portion corresponds mainly to non-financial assets such as advances to suppliers and tax credits. Other non-current accounts receivable have maturities that vary between 2 and 5 years.

The maximum exposure to credit risk as of the reporting date is the carrying amount of each class of other accounts receivable mentioned.

13.     INVESTMENTS IN ASSOCIATES AND JOINT VENTURES

This account comprises:

   
At
    
At
  
   
December 31,
    
September 30,
  
   
2020
    
2021
  
Associates
    
27,246
      
26,126
  
Joint ventures
    
8,270
      
9,562
  
     
35,516
      
35,688
  

The movement of our investments in associates for the periods ended September 30, 2020 and 2021 is as follows:

   
2020
    
2021
  
Balance at January 1,
    
37,035
      
35,516
  
Dividends received
    
(701
)
    
(2,236
)
Equity interest in results
    
1,945
      
2,422
  
Conversion adjustment
    
17
      
(14
)
Balance at September 30,
    
38,296
      
35,688
  

Concesionaria Chavimochic S.A.C.

The entity was awarded the concesion of the Chavimochic irrigation project, including a) design and construction of the work required for the third-phase of the Chavimochic irrigation project in the province of La Libertad; b) operation and maintenance of works; and c) water supply to the Project users. Construction activities started in 2015; the effective concession period is 25 years, and the total investment amounts was estimated in US$647 million.
- 21 -

The civil works of the third stage of the Chavimochic Irrigation Project were structured in two phases. To date, the works of the first phase (Palo Redondo Dam) are 70% completed. However, at the beginning of 2017, the procedure for early termination of the Concession Contract was initiated due to the breach of contract by the Grantor, and all activities were suspended in December 2017. Due to the fact that no agreement was reached, the Concessionaire initiated an arbitration process at the UNCID, which is currently in process.

Moreover, from 2018 to date, the Peruvian Government (“the Grantor”) has been evaluating the modification of the Concession Contract, to determine a mechanism that allow the completion of the project, without resolution as of to date.

Finally, the Grantor and the Ministry of Agriculture and Irrigation (MINAGRI), and the Chavimochic Special Project, have signed an Agreement in order to allow MINAGRI to subrogate the ownership of the Project, within the framework of the provisions of the Emergency Decree N ° 021-2020.

14.     PROPERTY, PLANT AND EQUIPMENT, INTANGIBLE ASSETS AND RIGHT-OF-USE ASSETS

The movement in property, plant and equipment, intangible assets and right-of-use assets accounts for the periods ended September 30, 2020 and 2021, is as follows:

   
Property,
              
   
plant and
    
Intangibles
    
Right-of-use
  
   
equipment
    
assets
    
assets
  
   
(a)
    
(b)
    
(a)
  
                   
Net cost at January 1, 2020
    
463,990
      
854,227
      
90,581
  
                         
Additions
    
27,396
      
44,081
      
9,673
  
Reclassifications and disposals
    
(11,554
)
    
(23,807
)
    
(10,045
)
Conversion adjustments
    
(2,190
)
    
(3,682
)
    
(3
)
Deductions for sale of assets
    
(5,493
)
    
-
      
-
  
Depreciation, amortization
    
(57,547
)
    
(75,164
)
    
(19,812
)
                         
Net cost at September 30, 2020
    
414,602
      
795,655
      
70,394
  
                         
                         
Net cost at January 1, 2021
    
405,469
      
791,990
      
64,518
  
                         
Additions
    
24,881
      
28,558
      
5,707
  
Reclassifications and disposals
    
(2,945
)
    
(85
)
    
(425
)
Conversion adjustments
    
409
      
1,381
      
39
  
Deductions for sale of assets
    
(6,587
)
    
-
      
-
  
Depreciation, amortization
    
(56,438
)
    
(74,153
)
    
(17,577
)
                         
Net cost at September 30, 2021
    
364,789
      
747,691
      
52,262
  

(a) Property, plant and equipment and right-of-use assets

As of September 30, 2021, additions to property, plant and equipment mainly corresponds to machinery of the engineering and construction segment for S/13.6 million; works in progress corresponding to the drilling stage of the infrastructure segment for S/4.2 million; and equipment of the engineering and construction segment for S/2.5 million (as of September 30, 2020, machinery of the engineering and construction segment for S/12.4 million, works in progress of the infrastructure segment for S/5.8 million; and equipment of the engineering and construction segment for S/0.9 million).
- 22 -

As of September 30, 2021, additions to right-of-use assets correspond mainly to lease agreements for the acquisition of equipment.

For the periods ended September 30, 2020 and 2021, the depreciation of property, plant and equipment, investment property and right-of-use assets is presented in the Statement of Income as follows:

   
2020
    
2021
  
             
Cost of services and goods (Note 21)
    
73,265
      
70,621
  
Administrative expenses (Note 21)
    
5,902
      
5,183
  
Total depreciation
    
79,167
      
75,804
  
(-) Depreciation related to investment property
    
(1,808
)
    
(1,789
)
(-) Depreciation related to right-of-use assets (Note 14)
    
(19,812
)
    
(17,577
)
Total depreciation of property, plant and equipment
    
57,547
      
56,438
  

(b) Intangible assets

As of September 30, 2021, the additions to intangibles correspond mainly to investments in the preparation of wells and other assets of the infrastructure segment for S/18.4 million; software development of the engineering and construction segment for S/4.7 million; and concessions, licenses and other assets corresponding to the infrastructure segment for S/14.6 million (as of September 30, 2020, investments in the preparation of wells for S/40.6 million, concessions and licenses corresponding to the infrastructure segment for S/2.3 million).

For the periods ended September 30, 2020 and 2021, the amortization of intangibles is broken down in the statement of income as follows:

   
2020
    
2021
  
Cost of sales and services (Note 21)
    
72,009
      
70,817
  
Administrative expenses (Note 21)
    
3,155
      
3,336
  
     
75,164
      
74,153
  

Goodwill

Management reviews businesses results based on the type of economic activity carried out. Goodwill allocated to cash-generating units are:

   
At
    
At
  
   
December 31,
    
September 30,
  
   
2020
    
2021
  
Engineering and construction
    
38,211
      
39,036
  
Electromechanical
    
20,735
      
20,735
  
     
58,946
      
59,771
  

The variation reported in engineering and construction segment is due to translation adjustment of foreign business of the subsidiary Cumbra Peru S.A.
- 23 -

15.     BORROWINGS

This item comprises:

   
Total
    
Current
    
Non-current
  
   
At
    
At
    
At
    
At
    
At
    
At
  
   
December 31,
    
September 30,
    
December 31,
    
September 30,
    
December 31,
    
September 30,
  
   
2020
    
2021
    
2020
    
2021
    
2020
    
2021
  
                                     
Bank overdrafts (Note 8)
    
-
      
25
      
-
      
25
      
-
      
-
  
Bank loans (a)
    
571,659
      
377,671
      
409,272
      
253,048
      
162,387
      
124,623
  
Finance leases
    
52,391
      
49,801
      
13,635
      
11,301
      
38,756
      
38,500
  
Lease liability for right-of-use asset
    
72,726
      
67,462
      
19,950
      
18,841
      
52,776
      
48,621
  
Other financial entities (b)
    
201,544
      
210,994
      
10,027
      
14,698
      
191,517
      
196,296
  
     
898,320
      
705,953
      
452,884
      
297,913
      
445,436
      
408,040
  

(a) Bank loans

As of December 31, 2020 and September 30, 2021, this item comprises bank loans in local and foreign currencies for working capital purposes. These obligations accrue fixed interest rates that fluctuate between 0.5% and 11% in 2020 and between 0.9% and 11% in 2021.

               
Current
    
Non-current
  
               
At
    
At
    
At
    
At
  
   
Interest
    
Date of
    
December 31,
    
September 30,
    
December 31,
    
September 30,
  
   
rate
    
maturity
    
2020
    
2021
    
2020
    
2021
  
                                     
Cumbra Peru S.A. (i)
    
0.90% / 8.5
%
    
2025
      
222,924
      
148,753
      
19,977
      
8,811
  
UNNA Energia S.A. (ii)
    
6.04% / 7.68
%
    
2027
      
24,950
      
22,463
      
99,474
      
114,645
  
Viva Negocio Inmobiliario S.A.
    
6.85% / 11.00
%
    
2023
      
90,197
      
70,491
      
3,318
      
1,167
  
Adexus S.A.
    
10.03
%
    
2021
      
19,224
      
11,341
      
-
      
-
  
AENZA S.A.A. (iii)
    
9.10% / 10.10
%
    
2021
      
51,977
      
-
      
39,618
      
-
  
                     
409,272
      
253,048
      
162,387
      
124,623
  

i) Financial Stability Framework Agreement

In July 2017, the Company and its subsidiaries (Cumbra Peru S.A., Construyendo Pais S.A., Vial y Vives-DSD S.A. and Concesionaria Via Expresa Sur S.A.) signed a Financial Stability Framework Agreement with the following financial entities: Scotiabank Peru S.A., Banco Internacional del Peru S.A.A., BBVA Banco Continental, Banco de Credito del Peru, Citibank del Peru SA and Citibank N.A. The Framework Agreement aims to: (i) grant Cumbra Peru S.A. a syndicated revolving line of credit for working capital for up to US$1.6 million and S/143.9 million, which may be increased by an additional US$14 million subject to certain conditions; (ii) grant Cumbra Peru S.A. a line of credit of up to US$51.6 million and S/33.6 million; (iii) grant the Company, Cumbra Peru S.A., Construyendo Pais S.A., Vial y Vives - DSD S.A. and Concesionaria Via Expresa Sur S.A. a non-revolving line of credit to finance repayment commitments subject to performance bonds; (iv) grant a syndicated line of credit in favor of the Company and Cumbra Peru S.A. for the issuance of performance bonds up to an amount of US$100 million (which may be increased by an additional US$50 million subject to compliance with certain conditions); and (v) commit to maintain existing standby letters of credit issued at the request of Cumbra Peru S.A. and the Company, as well as the request of Construyendo Pais S.A., Vial y Vives – DSD S.A. and Concesionaria Via Expresa Sur S.A. The loan matured in July 2020, which maturity was extended, most recently, until May 31, 2021. On August 12, 2021, the lenders agreed to extend the maturity date of the Framework Agreement, the Financing Agreement and the Syndicated Letter of Guarantee Facility to July 31, 2022.

In accordance with the Financial Stability Framework Agreement, the Company must comply quarterly with two ratios, related to its invoices and sales provisions: (i) the calculated value of 90% of its bills receivable, and (ii) the calculated value of 80% of its income provisions must be greater than 50% of the amount pending payment.
- 24 -

In August 2021, USD20 million was paid, equivalent to S/81.3 million. As of September 30, 2021, the Company's balance payable under the Financial Stability Framework Agreement amounts to US$7.1 million, equivalent to S/29.5 million (US$30.7 million, equivalent to S/111 million, as of December 31, 2020)

As of September 30, 2021, the account receivable rate and unbilled receivable rate reached 273% and 320%, respectively.  As of December 31, 2020 due to the stoppage of activities generated by the COVID-19 pandemic, the account receivable rate and unbilled receivable rate reached 56% and 142%, respectively. In relation to account receivable rate, the Company complied with the requirement of the Financial Stability Framework Agreement.

ii) UNNA Energia S.A. Loan

Terminales del Peru (hereinafter “TP”), a joint operation of the subsidiary UNNA Energia S.A., has a medium-term loan agreement with Banco de Credito del Peru (hereinafter BCP) up to US$30 million to finance the investments committed and up to US$70 million to finance the additional investments from the operation contract of the North and Center terminals for the period 2015 to 2019 with a maximum exposure limit of US$80 million. These facilities are repaid within 8 years. In April 2021, an additional cash transfer of US$7.3 million (equivalent to US$28.2 million) was requested for the additional investments. As of September 30, 2021, TP has a total amount of financing of US$47.8 million (equivalent to S/197.8 million) and due in 2027 (US$46.4 million, equivalent to S/168.2 million, as of December 31, 2020). As of September 30, 2021, the amount of financing equivalent to the 50% interest held by the subsidiary UNNA Energia S.A. amounts to US$23.9 million, equivalent to S/97.5 million ( US$23.2 million, equivalent to S/84.1 million, as of December 31, 2020).

In addition, in November 2019, TP signed a loan agreement to finance the additional investments from 2019 to 2023, for a credit line amount to US$46 million with BCP. The contract confirmed the participation of an assignee, so BD Capital (BDC) acquired 50% of the BCP contractual position through the subscription of the accession contract and in November 2019 disbursed to TP US$23 million. As of September 30, 2021, TP has a total amount of financing of US$19.3 million (equivalent to S/79.9 million) and due in 2026 (US$22 million, equivalent to S/80 million, as of December 31, 2020). As of September 30, 2021, the amount of financing equivalent to the 50% interest held by the subsidiary UNNA Energia S.A. amounts to US$9.7 million, equivalent to S/39.6 million (US$11 million, equivalent to S/40 million, as of December 31, 2020).

As of September 30, 2021 and the date of this report, TP is in compliance with the ratios established in the contract loan.

iii) CS Peru Infrastructure Holdings LLC Loan

In July 2019, the Company entered into a medium-term loan credit agreement for up to US$35 million with CS Peru Infrastructure Holdings LLC. The term of the loan is three years, with quarterly installments of principal starting on the 18th month. The loan accrued interest at the following rates per annum: (i) for the period from and including the July 31, 2019 (“Closing Date”) to but excluding the date that is 6 months after the Closing Date, 9.10%; (ii) for the period from and including the date that is 6 months after the Closing Date to but excluding the date that is 1 year after the Closing Date, 9.35%; (iii) for the period between the first annual anniversary of the Closing Date and the day before the thirtieth month of the Closing Date, 9.60%, and (iv) for the period from the thirtieth month of the Closing Date to the third annual anniversary of the Closing Date, 10.10%. The loan was used for working capital in the Company, Cumbra Peru S.A. and Adexus S.A.

As of December 31, 2020, the Company defaulted with the covenants established in the loan contract, as a consequence, the loan was presented as current liabilities.

In August 2021, the loan was paid in full. (US$25.7 million, equivalent to S/93.2 million, as of December 31, 2020).
- 25 -

iv) Banco Santander Loan

On December 28, 2020, Técnicas Reunidas enforced two letters of credit for a total  amount of US$23.7 million, which had been issued by Santander on behalf of our subsidiary Cumbra Perú S.A. as security pursuant to a construction contract. As a result, Cumbra Perú S.A. subscribed a loan with Banco Santander for principal amount of US$23.7 million (equivalent to S/85.9 million). The loan accrues interest at an annual rate of Libor + 8%. The term of the loan was 30 days. We subsequently negotiated payment in installments, with the last installment due on September 30, 2022. As of September 30, 2021, the principal amount of the loan is US$23.7 million, equivalent to S/98.1 million (US$23.7 million, equivalent to S/85.9 million, as of December 31, 2020). As of September 30, 2021, Cumbra Perú S.A. has complied with the corresponding covenants.

(b) Other financial entities

The balance is mainly composed of the monetization of Norvial dividends, as described below.

At May 29, 2018 the Company subscribes an agreement between the Company and Inversiones Concesiones Vial S.A.C. ("BCI Peru") -whith the intervention of Fondo de Inversiones BCI NV (“Fondo BCI”) and BCI Management Administradora General de Fondos S.A. (“BCI” Asset Management”) - to monetize future dividends from Norvial S.A. to the Company. With the signing of this agreement, the Company obligated itself to indirectly transfer its economic rights over 48.8% of the share capital of Norvial S.A. by transferring its class B shares (equivalent to 48.8% of the capital of Norvial S.A.) to a vehicle specially constituted for such purposes named Inversiones en Autopistas S.A. The amount of the transaction was US$42.3 million (equivalent to S/138 million) and was completed on June 11, 2018.

Likewise, it has been agreed that the Company will have purchase options on 48.8% of Norvial's economic rights that BCI Peru will maintain through its participation in Inversiones en Autopistas S.A. These options will be subject to certain conditions such as the expiration of different terms, recovery of the investment made with the funds of the BCI Fund (according to different economic calculations) and/or that a change of control occurs.

During the 2020 period, the Company reviewed the projected cash flows and effective interest rate of the financial liability with BCI Peru based on new information available on Norvial's projected traffic and determined that there was a material quantitative change that exceeds the +/-10%. For this reason, the liability with BCI Peru measured at amortized cost was derecognized during 2020 in the amount of US$46 million; the difference between this amount and the new liability amounted to US$3.9 million, which was recorded in other income and expenses (net) in the income statement. Simultaneously, the Company recorded the same liability amounting to US$42.1 million which is measured at fair value from the date of initial recognition.

As of September 30, 2021, the loan balance payable amounted to US$40.9 million, equivalent to S/169.5 million (as of December 31, 2020, the balance was US$42.1 million, equivalent to S/152.5 million).
- 26 -
(c) Fair value of borrowings

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

   
Carrying amount
    
Fair value
  
   
At
    
At
    
At
    
At
  
   
December 31,
    
September 30,
    
December 31,
    
September 30,
  
   
2020
    
2021
    
2020
    
2021
  
                         
Bank overdrafts
    
-
      
25
      
-
      
25
  
Bank loans
    
571,659
      
377,671
      
589,737
      
401,659
  
Finance leases
    
52,391
      
49,801
      
54,343
      
50,077
  
Lease liability for right-of-use asset
    
72,726
      
67,462
      
88,779
      
73,957
  
Other financial entities
    
201,544
      
216,988
      
247,857
      
234,946
  
     
898,320
      
711,947
      
980,716
      
760,664
  

As of December 31, 2020 and as of September 30, 2021, the fair value is based on cash flows discounted using a rate based on the borrowing rate of 4.2% and 10% and are included as Level 2 in the level of measurement.

16.     BONDS

This item includes:

         
Total
          
Current
          
Non-current
  
   
At
    
At
    
At
    
At
    
At
    
At
  
   
December 31,
    
September 30,
    
December 31,
    
September 30,
    
December 31,
    
September 30,
  
   
2020
    
2021
    
2020
    
2021
    
2020
    
2021
  
                                     
Tren Urbano de Lima S.A. (a)
    
624,454
      
625,746
      
21,081
      
23,400
      
603,373
      
602,346
  
Norvial S.A. (b)
    
280,848
      
259,207
      
32,819
      
34,429
      
248,029
      
224,778
  
AENZA S.A.A. (c)
    
-
      
362,140
      
-
      
362,140
      
-
      
-
  
Cumbra Perú S.A. (d)
    
27,457
      
26,617
      
4,546
      
4,492
      
22,911
      
22,125
  
     
932,759
      
1,273,710
      
58,446
      
424,461
      
874,313
      
849,249
  

(a) Tren Urbano de Lima S.A.

In February 2015, the subsidiary Tren Urbano de Lima S.A. issue corporate bonds under Regulation S of the United States of America. The issuance was made in VAC soles (adjusted for the Constant Update Value) for an amount of S/629 million. The bonds expire in November 2039 and accrue interest at a rate of 4.75% (plus the VAC adjustment), present a risk rating of AA + (local scale) granted by Support & International Associates Risk Classifier. As of September 30, 2021, an accumulated amortization amounting to S/102.7 million (S/90.6 million as of December 31, 2020) has been made.

As of September 30, 2021, the balance includes VAC adjustments and interest payable for S/116.2 million (S/103.4 million as of December 31, 2020).

The account movement for the periods ended September 30, 2020 and 2021 is as follows:
- 27 -

   
2020
    
2021
  
             
Balance at January, 1
    
618,497
      
624,454
  
Amortization
    
(8,669
)
    
(12,179
)
Accrued interest
    
35,695
      
36,150
  
Interest paid
    
(22,563
)
    
(22,679
)
Balance at September, 30
    
622,960
      
625,746
  

As of December 31, 2020 and as of September 30, 2021, Tren Urbano de Lima S.A. has complied with the corresponding covenants.

As of September 30, 2021, the fair value amounts to S/625.9 million (S/710 million, as of December 31, 2020), this is based on discounted cash flows using the rate of 5% (3.6% as of December 31, 2020) and corresponds to level 2 of the fair value hierarchy.

(b) Norvial S.A.

Between 2015 and 2016, the subsidiary Norvial S.A. issued the First Corporate Bond Program on the Lima Stock Exchange for a total S/365 million. Risk rating agencies Equilibrium y Apoyo & Asociados Internacionales graded this debt instrument AA.

The capital raised was used to finance the construction of the second phase of Red Vial No.5 and the financing of VAT arising from a project-related expenses.

The account movement for the periods ended September 30, 2020 and 2021 is as follows:

   
2020
    
2021
  
             
Balance at January, 1
    
305,545
      
280,848
  
Amortization
    
(17,880
)
    
(21,537
)
Accrued interest
    
18,616
      
16,919
  
Interest paid
    
(18,529
)
    
(17,023
)
Balance at September, 30
    
287,752
      
259,207
  

As of December 31, 2020 and September 30, 2021, Norvial S.A. has complied with the covenants.

As of September 30, 2021, the fair value amounts to S/270 million (S/304.7 million as of December 31, 2020), is based on discounted cash flows using rate 7.9% (8.1% as of December 31, 2020) and is within level 2 of the fair value hierarchy.

(c) AENZA S.A.A.

In August 2021, AENZA S.A.A. issued bonds convertible (hereinafter, the "Bonds") into common shares with voting rights. The total amount of the issue was US$89.9 million, issuing 89,970 bonds, each with a nominal value of US$ 1,000.

The placement of these bonds was executed locally and is the result of the exercise of the preemptive subscription right provided by the applicable legislation, as well as their subsequent private offering. The Bonds have been made available to investors only in Peru pursuant to the provisions of the applicable Peruvian legislation

As of September 30, 2021, the principal balance amounts to US$ 89.9 million equivalent to S/366.1 million. The debt balance net of costs incurred amounts to S/362.1 million.

As of September 30, 2021, the fair value amounts to S/376.6 million, is based on discounted cash flows using rate 8.2% and is within level 3 of the fair value hierarchy.

(d) Cumbra Peru S.A.

At the beginning of  2020, the subsidiary Cumbra Peru S.A. prepared the First Private Bond Program, up to a maximum amount of US$8 million.

In the first quarter of the year 2020,  bonds issued amounts to US$7.8 million (equivalent to S/25.9 million) under the debt swap modality, related to its outstanding trade accounts.

The bonds mature in December 2027 and bear interest at a rate of 8.5%, payment is semi-annual and have a risk rating of B-, granted by the rating company Moody’s Peru. As of September 30, 2021, the balance includes accrued interest payable for US$0.1 million, equivalent to S/0.4 million (US$0.6 million, equivalent to S/2.2 million, as of December 31, 2020).
- 28 -

The account movement for the periods ended September 30, 2020 and 2021 is as follows:

   
2020
    
2021
  
             
Balance at January, 1
    
-
      
27,457
  
Additions
    
25,871
      
-
  
Amortization
    
(1,473
)
    
(3,687
)
Exchange difference
    
2,186
      
3,451
  
Accrued interest
    
1,576
      
1,664
  
Interest paid
    
(1,002
)
    
(2,268
)
Balance at September, 30
    
27,158
      
26,617
  

As of September 30, 2021, the fair value amounts to S/26.9 million (S/28.6 million as of December 31, 2020), is based on discounted cash flows using a rate of 8.3% (7.1% as of December 31, 2020) and is within level 3 of the fair value hierarchy.

(d) AENZA S.A.A.

In August 2021, AENZA S.A.A. issued bonds convertible (hereinafter, the "Bonds") into common shares with voting rights. The total amount of the issue was US$89.9 million, issuing 89,970 bonds, each with a nominal value of US$ 1,000.

The placement of these bonds was executed locally and is the result of the exercise of the preemptive subscription right provided by the applicable legislation, as well as their subsequent private offering.
The Bonds have been made available to investors only in Peru pursuant to the provisions of the applicable Peruvian legislation

As of September 30, 2021, the principal balance amounts to US$ 89.9 million equivalent to S/366.1 million. The debt balance net of costs incurred amounts to S/362.4 million.

As of September 30, 2021, the fair value amounts to S/26.9 million (S/28.6 million as of December 31, 2020), is based on discounted cash flows using a rate of 8.3% (7.1% as of December 31, 2020) and is within level 3 of the fair value hierarchy.

17.     TRADE ACCOUNTS PAYABLE

This item includes:

   
Total
    
Current
    
Non-current
  
   
At
    
At
    
At
    
At
    
At
    
At
  
   
December 31,
    
September 30,
    
December 31,
    
September 30,
    
December 31,
    
September 30,
  
   
  2020
    
2021
    
2020
    
2021
    
2020
    
2021
  
                                     
Invoices payable
    
470,118
      
589,323
      
470,118
      
589,323
      
-
      
-
  
Provision of contract costs (a)
    
618,797
      
436,897
      
618,797
      
436,897
      
-
      
-
  
Notes payable
    
48,754
      
51,558
      
8,252
      
16,023
      
40,502
      
35,535
  
     
1,137,669
      
1,077,778
      
1,097,167
      
1,042,243
      
40,502
      
35,535
  

(a) The contract cost provisions include:

(i)
Goods and services received and not invoiced for S/308.5 million on engineering and construction segment, S/53.4 million on infrastructure segment, S/14.1 million on parent company operations segment and S/21 million on real estate segment (S/429.2 million, S/62.8 million, S/47 million and S/24.6 million respectively, as of December 31, 2020).

- 29 -

ii)
Estimate costs to come according to the the completion porcentage of projects on engineerina and construction segment amounting to S/40.1 million (S/95.7 million, as of December 31, 2020).

18.     OTHER ACCOUNTS PAYABLE

This item includes:


  
Total
    
Current
    
Non-current
  
   
At
    
At
    
At
    
At
    
At
    
At
  
   
December 31,
    
September 30,
    
December 31,
    
September 30,
    
December 31,
    
September 30,
  
   
2020
    
2021
    
2020
    
2021
    
2020
    
2021
  
                                     
Advances received from customers (a)
    
309,590
      
417,909
      
278,490
      
409,768
      
31,100
      
8,141
  
Consorcio Ductos del Sur - payable (b)
    
88,206
      
67,606
      
28,836
      
16,396
      
59,370
      
51,210
  
Salaries and other payable
    
77,386
      
130,667
      
77,386
      
130,667
      
-
      
-
  
Put option liability on Morelco acquisition
    
118,622
      
135,382
      
79,096
      
90,271
      
39,526
      
45,111
  
Third-party loans
    
11,608
      
11,084
      
9,533
      
9,007
      
2,075
      
2,077
  
Other taxes payable
    
115,862
      
155,456
      
102,240
      
143,029
      
13,622
      
12,427
  
Acquisition of additional non-controlling interest
    
27,596
      
33,786
      
27,596
      
33,786
      
-
      
-
  
Guarantee deposits
    
23,744
      
26,144
      
23,744
      
26,144
      
-
      
-
  
Consorcio Rio Mantaro - payables
    
58,129
      
69,414
      
58,129
      
69,414
      
-
      
-
  
Provision of interest for debt with suppliers
    
16,425
      
20,348
      
-
      
212
      
16,425
      
20,136
  
Share purchase agreement - Inversiones Sur
    
14,496
      
16,544
      
-
      
-
      
-
      
16,544
  
Other accounts payables
    
39,974
      
33,463
      
33,356
      
28,860
      
21,114
      
4,603
  
     
901,638
      
1,117,803
      
718,406
      
957,554
      
183,232
      
160,249
  

(a)
Advances received from customers mainly corresponds to construction projects, and are applied to progress billings, in accordance with contract terms.

   
Total
    
Current
    
Non-current
  
   
At
    
At
    
At
    
At
    
At
    
At
  
   
December 31,
    
September 30,
    
December 31,
    
September 30,
    
December 31,
    
September 30,
  
   
2020
    
2021
    
2020
    
2021
    
2020
    
2021
  
                                     
Customer advances from Consortiums
    
83,640
      
62,064
      
83,640
      
62,064
      
-
      
-
  
Customer advances from real estate projects
    
78,286
      
108,201
      
78,286
      
108,201
      
-
      
-
  
Quellaveco Project
    
86,415
      
29,767
      
71,571
      
29,767
      
14,844
      
-
  
Special National Transportation Infrastructure Project
    
24,050
      
18,688
      
13,781
      
10,766
      
10,269
      
7,922
  
Gasoducto Piura Construction
    
31,048
      
17,899
      
25,292
      
17,899
      
5,756
      
-
  
Pebbles Quebrada Blanca Phase 2 Project
    
-
      
121,200
      
-
      
121,200
      
-
      
-
  
Evaporadores Modernización y ampliación de la Planta Arauco Project
    
-
      
30,565
      
-
      
30,565
      
-
      
-
  
Others
    
6,151
      
29,525
      
5,920
      
29,306
      
231
      
219
  
     
309,590
      
417,909
      
278,490
      
409,768
      
31,100
      
8,141
  

(b)
The balance of other accounts payable from Consorcio Constructor Ductos del Sur corresponds to payment obligations to vendors and main subcontractors for S/67.6 million (S/88.2 million as of December 31, 2020), the subsidiary Cumbra Peru S.A. as a result of the termination of Gasoducto Sur Peruano S.A. operations.

The fair value of current accounts approximates their book value due to their short-term maturities. The non-current part mainly includes non-financial liabilities such as advances received from customers; the remaining balance is not significant in the financial statements.

- 30 -

19.     PROVISIONS

This item includes:

   
Total
    
Current
    
Non-current
  
   
At
    
At
    
At
    
At
    
At
    
At
  
   
December 31,
    
September 30,
    
December 31,
    
September 30,
    
December 31,
    
September 30,
  
   
2020
    
2021
    
2020
    
2021
    
2020
    
2021
  
                                     
Legal claims (a)
    
370,787
      
411,274
      
79,966
      
89,336
      
290,821
      
321,938
  
Tax claims
    
5,630
      
9,695
      
1,954
      
4,660
      
3,676
      
5,035
  
Provision for well closure (b)
    
52,949
      
61,773
      
10,837
      
11,809
      
42,112
      
49,964
  
     
429,366
      
482,742
      
92,757
      
105,805
      
336,609
      
376,937
  

(a)
Legal contingencies correspond mainly to:

Civil compensation

Corresponds to the legal contingency estimated by management for exposure of the Company and its subsidiaries to a probable compensation in relation to their participation as minority partners in certain entities that developed infrastructure projects in Peru with companies belonging to the Odebrecht group and projects related to “Club de la Construcción”. As indicated in Note 1 c) through the Agreement signed on May 21, 2021, the entry into force of which is subject to judicial approval, the Company acknowledges that it was used by some of its former directors for the commission of illegal acts up to in 2016 and agrees, consequently, to pay a civil compensation to the State for a total amount of S / 321.9 million and US $ 40.7 million. As of September 30, 2021, the amount equivalent to the present value resulting from the amounts described above is recorded as one provision totals S/165.1 million and US$17.2 million, equivalent to a total S/236.2 million.

Proceso administrative Indecopi

On March 9, 2021, Cumbra Peru S.A. was notified with the Final Instruction Report prepared by the Technical Secretariat, which is subject to review by the Commission for the Defense of Free Competition of INDECOPI, related to the sanctioning administrative procedure mentioned in Note 1.c). In this regard, Company and its legal advisors estimate that, based on the findings of the Final Investigation Report, the fine to be imposed on Cumbra Peru S.A. in this case should not exceed S/39 million. As of September 30, 2021 the equivalent to the corresponding present value that results in S/24.5 million.

Securities Class actions NY SEC

During the first quarter of 2017 two securities class actions have been filed against the Company, and certain former employees in the Eastern District of New York.  Both complaints allege false and misleading statements during the class period.  In particular, they allege that the Company failed to disclose, among other things, that a) the Company knew that its partner Odebrecht was engaged in illegal activities, and b) the Company profited from such activities in violation of its own corporate governance standards.

As of July 2, 2020, the Company signed the settlement agreement with the plaintiffs' attorneys, by which the parties agree to terminate the class action, subject to the court approval and the payment of the transaction amount by the Company. The amount agreed for the termination of the class action is equivalent to US$20 million. The Company registered a provision of US$15 million (equivalent of S/49.8 million), the difference of US$5 million was covered by the professional liability insurance policy in accordance with the agreement signed with the insurance company. In september 2020 , the Company paid US$0.3 millones (equivalent to S/1.1 million). On September 14, 2021, the settlement agreement was approved by the Eastern District Court of New York.

On June 30, 2021, a first amendment to the agreement was signed, which stipulates a payment of US$0.6 million (equivalent to S/2.2 million), amortization of the oustanding balance on September 30, 2021, and annual interest of 8%.

- 31 -

As of September 30, 2021, the Company maintains a provision of US$14.1 million, equivalent to S/58.3 million, plus interest (as of December 31, 2020, US$14.7 million, equivalent to S/53.1 million, plus interest).

On October 1, 2021, the second amendment to the agreement was signed, whereby US$5.5 million (equivalent to S/22.7 million) was paid plus accrued interest of US$0.9 million (equivalent to S/3.6 million), established as a new expiration date June 30, 2022, plus accrued interest at an interest rate of 9% per year was set.

Other legal provisions

As of September 30, 2021, corresponds to civil, labor, administrative and contentious administrative contingencies estimated at S/97.1 (S/76 million as of December 31, 2020). In addition, within the legal contingencies of civil nature, it mainly includes claims received from clients for S/50.1 million corresponding to the subsidiary Cumbra Peru S.A. (S/41.1 million, as of December 31, 2020).

(b)
The provision for closure as of September 30, 2021 mainly corresponds to: i) provisions for the closure of wells of UNNA Energia S.A. for S/52.5 million; ii) provision of costs associated with the closing of the concession contract of Norvial S.A. for S/5.1 million (S/48.4 million and S/4.5 million respectively, as of December 31, 2020).

The account movement for the periods ended September 30, 2020 and 2021 are as follows:

               
Provision
        
   
Legal
    
Tax
    
for well
        
   
claims
    
claims
    
closure
    
Total
  
                         
At January 1, 2020
    
272,274
      
6,045
      
50,116
      
328,435
  
Additions
    
27,462
      
1,954
      
5,371
      
34,787
  
Present value
    
596
      
-
      
2,124
      
2,720
  
Reversals of provisions
    
(5,562
)
    
(1,546
)
    
-
      
(7,108
)
Payments
    
(3,343
)
    
(823
)
    
(1,181
)
    
(5,347
)
Translation adjustments / Exchange difference
    
4,275
      
-
      
-
      
4,275
  
At September 30, 2020
    
295,702
      
5,630
      
56,430
      
357,762
  
                                 
At January 1, 2021
    
370,787
      
5,630
      
52,949
      
429,366
  
Additions
    
23,380
      
2,686
      
-
      
26,066
  
Present value
    
14,346
      
-
      
3,655
      
18,001
  
Reversals of provisions
    
(9,140
)
    
-
      
-
      
(9,140
)
Reclasification
    
(5,755
)
    
1,379
      
3,978
      
(398
)
Payments
    
(4,601
)
    
-
      
(80
)
    
(4,681
)
Translation adjustments / Exchange difference
    
22,257
      
-
      
1,271
      
23,528
  
At September 30, 2021
    
411,274
      
9,695
      
61,773
      
482,742
  

20.     CAPITAL

As of September 30, 2021 and as of December 31, 2020, the capital of the Company is represented by 871,917,855 shares of a nominal value of S/1.00 each, all registered in the Public Registries.

As of September 30, 2021, a total of 140,719,490  shares were represented in ADS, equivalent to 28,143,898 ADSs at a rate of 5 shares per ADS.

As of December 31, 2020, a total of 190,863,050 shares were represented by ADS, equivalent to 38,172,610 ADSs at a rate of 5 shares per ADS.
- 32 -

21.     EXPENSES BY NATURE

For the periods ended September 30, 2020 and 2021, this item comprises:

   
Cost
              
   
of goods
    
Administrative
        
   
and services
    
expenses
    
Total
  
2020
                  
Salaries, wages and fringe benefits
    
693,980
      
69,439
      
763,419
  
Services provided by third-parties
    
592,023
      
33,678
      
625,701
  
Purchase of goods
    
393,696
      
72
      
393,768
  
Other management charges
    
167,295
      
8,782
      
176,077
  
Depreciation  (Note 14)
    
73,265
      
5,902
      
79,167
  
Amortization (Note 14)
    
72,009
      
3,155
      
75,164
  
Impairment of accounts receivable
    
15,441
      
321
      
15,762
  
Taxes
    
4,503
      
95
      
4,598
  
Recovery of property, plant and equipment
    
(258
)
    
-
      
(258
)
Inventory recovery
    
(1,460
)
    
-
      
(1,460
)
     
2,010,494
      
121,444
      
2,131,938
  
                         
2021
                        
Salaries, wages and fringe benefits
    
994,167
      
82,689
      
1,076,856
  
Services provided by third-parties
    
801,789
      
37,849
      
839,638
  
Purchase of goods
    
508,471
      
83
      
508,554
  
Other management charges
    
131,840
      
12,677
      
144,517
  
Depreciation  (Note 14)
    
70,621
      
5,183
      
75,804
  
Amortization (Note 14)
    
70,817
      
3,336
      
74,153
  
Impairment of accounts receivable
    
1,321
      
2
      
1,323
  
Taxes
    
3,600
      
142
      
3,742
  
Recovery of property, plant and equipment
    
(1,939
)
    
-
      
(1,939
)
Impairment of inventory
    
2
      
-
      
2
  
     
2,580,689
      
141,961
      
2,722,650
  
 
22.     OTHER INCOME AND EXPENSES

For the periods ended September 30, 2020 and 2021, this item comprises:

   
2020
    
2021
  
Other income:
            
Sale of assets
    
5,563
      
6,473
  
Recovery of provisions and impairments
    
4,322
      
5,461
  
Insurance compensation
    
44
      
2,293
  
Penalty income
    
-
      
1,005
  
Supplier debt forgiveness
    
205
      
-
  
Others
    
3,942
      
1,792
  
     
14,076
      
17,024
  

- 33 -

   
2020
    
2021
  
Other expenditures:
            
Asset impairment
    
26,719
      
3
  
Civil repair to the Peruvian Government
    
10,797
      
-
  
Net cost of fixed assets disposal
    
5,186
      
6,572
  
Disposal of property, plant and equipment
    
282
      
1,724
  
Provision for well closure
    
3,075
      
3,024
  
Administrative fine (a)
    
706
      
11,388
  
Others
    
3,411
      
923
  
     
50,176
      
23,634
  
     
(36,100
)
    
(6,610
)

(a)
The increase was mainly generated by fines corresponding to income tax assessments in Cumbra Peru for S/8.4 million and in AENZA for S/0.8 million. Additionally, in AENZA fines issued by the Superintendencia del Mercado de Valores for S/2 million. (In 2020, it corresponds to fines for income tax audits in Cumbra Peru for S/0.7 million).

23.     FINANCIAL INCOME AND EXPENSES

For the periods ended September 30, 2020 and 2021, this item comprises:

   
2020
    
2021
  
             
Financial income:
            
Interest on loans to third parties
    
309
      
174
  
Profit for present value of financial asset or financial liability
    
7,797
      
2,267
  
Exchange difference gain, net
    
1,107
      
-
  
Interest on short-term bank deposits
    
2,261
      
649
  
Others
    
2,487
      
1,079
  
     
13,961
      
4,169
  
                 
                 
Financial expenses:
                
Interest expense on:
                
- Bank loans (a)
    
39,962
      
50,113
  
- Bonds
    
20,192
      
23,181
  
- Loans from third parties
    
9,448
      
8,579
  
- Right-of-use
    
4,212
      
3,161
  
- Financial lease
    
2,380
      
2,515
  
Commissions and collaterals
    
18,302
      
18,627
  
Interests from Tax Authority
    
3,478
      
12,366
  
Loss for present value of financial asset or financial liability (b)
    
6,057
      
44,120
  
Update of fair value of financial asset or financial liability (c)
    
-
      
5,444
  
Exchange difference loss, net
    
-
      
17,633
  
Derivative financial instruments
    
64
      
-
  
Other financial expenses
    
3,239
      
968
  
Less capitalized interest
    
(5,129
)
    
(1,792
)
     
102,205
      
184,915
  

(a)
The variation in interest corresponds mainly to Inversiones en Autopistas S.A. which increased by S/7.4 million due to the loan with BCI Peru (Nota 15 b)

- 34 -

(b)
The increase is mainly generated by the effect of the present value of the account receivable from Gasoducto Sur Peruano S.A. for S/31.6 million (Note 11), due to the variation of the discount rate applied, which increased from 1.65% to 2.66%. Additionally, increase by the effect of the present value of the account payable according to the Acta de Acuerdo Preparatorio de Colaboración y Beneficios – “The Agreement” for S/11.1 million (Note 1 c).
   
(c)
The increase corresponds entirely to Inversiones en Autopistas S.A. for the recognition of the fair value of the loan with BCI Peru (Note 15 b).

24.     INCOME TAX

The condensed interim consolidated financial statements for the period ended September 30, 2021, income tax expense is recognized based on management’s estimate of the annual income tax rate expected for the full financial year. The estimated annual tax rate as of September 30, 2021 is 86.78% (47.27% for the period ended in September 30, 2020).

25.     CONTINGENCIES, COMMITTMENTS AND GUARANTEES

In the opinion of Management and its legal advisors, the provisions registered mainly for civil lawsuits, labor dispute processes, contentious and administrative processes and tax claims are sufficient to cover the results of these probable contingencies (Note 19).

a) Tax contingencies

The Company considers that the maximum exposure for tax contingencies of the Corporate amounts to S/228.5 million according to the following detail:

The appeal at SUNAT for S/139.8 million which includes S/127.3 million for 2014 Income Tax (Aenza S.A.A. for S/82.7 million, Cumbra Perú S.A. for S/39.7 million and Viva Negocio Inmobiliario S.A. for S/4.9 million), and for Income Tax from 2014 to 2016 in Consorcio Constructor Chavimochic for S/12.5 million.

Appeal at the Tax Court for S/83.1 million (Cumbra Perú S.A., Income Tax 2012 and 2013 for S/60.8 million; Aenza S.A.A., Income Tax 2009, 2010 and 2013 for S/10.2 million; Cumbra Ingeniería S.A., Income Tax 2013 and 2016 for S/9.1 million; and Viva Negocio Inmobiliario S.A., Income Tax 2009 and 2016 for S/3 million).

Contentious administrative process at the Judiciary for S/5.6 million (Aenza S.A.A., for Income Tax and IGV of 2001 for S/3.9 million, Income Tax 2011 for S/1.1 million, and for IGV from 1998 to 2002 for S/0.6 million).

Management estimates that all the afore mentioned processes will be favorable considering their characteristics and the evaluation of their legal advisors.

b) Other contingencies

The Company considers that the maximum exposure for other contingencies of the Corporate amounts to S/41.5 million according to the following detail:

Administrative processes amounting to S/23.5 million (Tren Urbano de Lima S.A. for S/17 million, Cumbra Perú S.A. for S/5.4 million, Viva Negocio Inmobiliario S.A. for S/0.7 million and UNNA Energía S.A. for S/0.4 million).

Civil lawsuits, mainly related to indemnities for damages, contract terminations and obligations to pay a sum of money amounting to S/10.2 million (Norvial S.A. for S/5.7 million, Cumbra Ingeniería S.A. for S/2.6 million, Morelco SAS. for S/1.2 million, Cumbra Perú S.A. for S/0.3 million, and UNNA Transporte S.A.C for S/0.2 million).
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Contentious administrative process, corresponding mainly to non-compliance amounting to S/0.9 million for UNNA Energía S.A.

Labor dispute processes amounting to S/6.9 million (Morelco SAS for S/4.1 million, UNNA Energía S.A. and subsidiaries for S/2 million, UNNA Transporte S.A.C for S/0.4 million, Tren Urbano de Lima S.A. for S/0.2 million y Viva Negocio Inmobiliario S.A. for S/0.2 million).

c) Letters bonds and guarantees

The Corporation maintains guarantees and letters of credit in force in various financial entities guaranteeing operations for US$388.3 million (US$427.5 million, as of December 31, 2020).

26.     DIVIDENDS

In compliance with certain covenants, the company will not pay, except for transactions with non-controlling interests. Certain of our debt or other contractual obligations may restrict our ability to pay dividends in the future. Additionally, “the Agreement” does not allow the distribution of dividends until 40% of the total amount of the committed civil penalty described in Note 1 c) has been amortized.

For the period ended September 30, 2021, the Corporation’s subsidiaries have paid dividends to its non-controlling interests in the amount of S/36.3 million (S/64.7 million for period  ended in September 30, 2020).

27.     LOSS PER SHARE

The basic loss per common share has been calculated by dividing the loss of the period attributable to the Corporation’s common shareholders by the weighted average of the number of common shares outstanding during that period. No diluted loss per common share has been calculated because there is no potential diluent common or investment shares (ie, financial instruments or agreements that entitle to obtain common or investment shares); therefore, it is the same as the loss per basic share.

For the periods ended September 30, 2020 and 2021, the basic loss per common share is as follows:

   
2020
    
2021
  
             
Loss attributable to owners of the Company
            
during the period
    
(55,143
)
    
(103,486
)
Weighted average number of shares in issue
                
at S/1.00 each, at September 30,
    
871,917,855
      
871,917,855
  
                 
Basic loss per share (in S/)
 (*)
 
(0.063
)
    
(0.119
)

(*) The Corporation does not have common shares with dilutive effects at September 30, 2020 and 2021.

28.     EVENTS AFTER THE DATE OF THE STATEMENT OF FINANCIAL POSITION
Between September 31, 2021 and the date of approval of the condensed interim consolidated financial statements, there have been no subsequent events that may affect the reasonableness of the financial statements issued.

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