6-K 1 a52701490.htm AENZA S.A.A FORM 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 April 2022

 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.

April 29, 2022


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: April 29, 2022


AENZA S.A.A. AND SUBSIDIARIES


CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31, 2021 (AUDITED) AND MARCH 31, 2022 (UNAUDITED)


AENZA S.A.A. AND SUBSIDIARIES


CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31, 2021  (AUDITED) AND MARCH 31, 2022 (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 - 37





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
        
As of
    
As of
  
         
December 31,
    
March 31,
  
   
Note
    
2021
    
2022
  
                   
Current assets
                  
Cash and cash equivalents
    
8
      
957,178
      
844,237
  
Trade accounts receivables, net
    
9
      
590,280
      
526,748
  
Work in progress
    
10
      
309,063
      
215,792
  
Accounts receivable from related parties
    
11
      
20,817
      
24,094
  
Other accounts receivable
    
12
      
487,058
      
365,807
  
Inventories, net
            
488,326
      
510,345
  
Prepaid expenses
            
32,142
      
36,247
  
Total current assets
            
2,884,864
      
2,523,270
  
                         
Non-current assets
                        
Trade accounts receivable, net
    
9
      
683,306
      
696,058
  
Accounts receivable from related parties
    
11
      
643,897
      
576,029
  
Prepaid expenses
            
23,607
      
32,696
  
Other accounts receivable
    
12
      
201,360
      
323,140
  
Investments in associates and joint ventures
    
13
      
31,173
      
30,745
  
Investment property
    
14
      
63,011
      
61,990
  
Property, plant and equipment, net
    
14
      
303,170
      
292,191
  
Intangible assets, net
    
14
      
743,391
      
732,004
  
Right-of-use assets, net
    
14
      
47,717
      
52,037
  
Deferred income tax asset
            
275,076
      
281,834
  
Total non-current assets
            
3,015,708
      
3,078,724
  
                         
                         
                         
                         
                         
                         
                         
                         
Total assets
            
5,900,572
      
5,601,994
  
                         
                         
The accompanying notes on pages 6 to 37 are an integral part of the consolidated financial statements.
  
 
                   
                   
                   
                   
                   
                   
                   
LIABILITIES AND EQUITY
        
As of
    
As of
  
         
December 31,
    
March 31,
  
   
Note
    
2021
    
2022
  
                   
Current liabilities
                  
Borrowings
    
15
      
241,340
      
198,309
  
Bonds
    
16
      
69,838
      
68,611
  
Trade accounts payable
    
17
      
980,767
      
867,047
  
Accounts payable to related parties
    
11
      
51,004
      
47,013
  
Current income tax
            
94,958
      
93,578
  
Other accounts payable
    
18
      
754,981
      
750,636
  
Other provisions
    
19
      
154,829
      
120,835
  
Total current liabilities
            
2,347,717
      
2,146,029
  
                         
Non-current liabilities
                        
Borrowings
    
15
      
338,560
      
311,713
  
Bonds
    
16
      
1,191,084
      
824,871
  
Other accounts payable
    
18
      
92,369
      
84,980
  
Accounts payable to related parties
    
11
      
50,712
      
31,436
  
Other provisions
    
19
      
329,497
      
339,136
  
Deferred income tax liability
            
97,367
      
98,751
  
Total non-current liabilities
            
2,099,589
      
1,690,887
  
Total liabilities
            
4,447,306
      
3,836,916
  
                         
Equity
    
20
                  
Capital
            
871,918
      
1,196,980
  
Legal reserve
            
132,011
      
132,011
  
Voluntary reserve
            
29,974
      
29,974
  
Share Premium
            
1,131,574
      
1,142,092
  
Other reserves
            
(135,947
)
    
(138,826
)
Retained earnings
            
(829,714
)
    
(859,902
)
Equity attributable to controlling interest in the Company
      
1,199,816
      
1,502,329
  
Non-controlling interest
            
253,450
      
262,749
  
Total equity
            
1,453,266
      
1,765,078
  
Total liabilities and equity
            
5,900,572
      
5,601,994
  


- 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 March 31,
  
   
Note
    
2021
    
2022
  
         
(as restated)
        
                   
Revenues from construction activities
          
516,668
      
673,432
  
Revenues from services provided
          
252,868
      
242,960
  
Revenue from real estate and sale of goods
          
95,536
      
132,726
  
           
865,072
      
1,049,118
  
                       
Cost of construction activities
          
(477,097
)
    
(656,093
)
Cost of services provided
          
(207,887
)
    
(181,446
)
Cost of real estate and sale of goods
          
(76,573
)
    
(102,445
)
     
21
      
(761,557
)
    
(939,984
)
Gross profit
            
103,515
      
109,134
  
                         
Administrative expenses
    
21
      
(44,173
)
    
(29,883
)
Other income and expenses
    
22
      
(1,596
)
    
(1,847
)
Operating profit
            
57,746
      
77,404
  
                         
Financial expenses
    
23
      
(68,239
)
    
(82,002
)
Financial income
    
23
      
1,699
      
5,078
  
Share of the profit or loss of associates and joint ventures accounted for using the equity method
    
13
      
1,006
      
(425
)
(Loss) profit before income tax
            
(7,788
)
    
55
  
Income tax expense
            
(11,221
)
    
(18,945
)
Loss from continuing operations
            
(19,009
)
    
(18,890
)
Loss from discontinued operations
    
3.2
      
(8,374
)
    
-
  
Loss for the period
            
(27,383
)
    
(18,890
)
                         
(Loss) profit attributable to:
                        
Owners of the Company
            
(34,697
)
    
(30,188
)
Non-controlling interest
            
7,314
      
11,298
  
             
(27,383
)
    
(18,890
)
                         
                         
Loss per share attributable to owners of the
                        
Company during the period
    
26
      
(0.040
)
    
(0.031
)
Loss per share from continuing operations
                        
attributable to owners of the Company during the period
     26      
(0.030
)
    
(0.031
)
                         
                         
The accompanying notes on pages 6 to 37 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 March 31,
  
 
2021
  
2022
  
 
(as restated)
      
                 
Loss for the period
    
(27,383
)
    
(18,890
)
Other comprehensive income:
                
Items that may be subsequently  reclassified to profit or loss
                
Foreign currency translation adjustment, net of tax
    
(5,456
)
    
(2,505
)
Exchange difference from net investment in a foreign operation, net of tax
    
(29
)
    
(39
)
Other comprehensive income for the period, net of tax
    
(5,485
)
    
(2,544
)
Total comprehensive income for the period
    
(32,868
)
    
(21,434
)
                 
Comprehensive income attributable to:
                
Owners of  the Company
    
(39,048
)
    
(33,067
)
Non-controlling interest
    
6,180
      
11,633
  
     
(32,868
)
    
(21,434
)
                 
Comprehensive income for the period attributable to owners of the Company:
                
Continuing operations
    
(29,565
)
    
(33,067
)
Discontinued operations
    
(9,483
)
    
-
  
     
(39,048
)
    
(33,067
)
                 
                 
The accompanying notes on pages 6 to 37 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 MARCH 31, 2021 AND 2022
                              
(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, 2021
    
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
    
-
      
-
      
-
      
-
      
-
      
-
      
(34,697
)
    
(34,697
)
    
7,314
      
(27,383
)
Foreign currency translation adjustment
    
-
      
-
      
-
      
-
      
-
      
(4,322
)
    
-
      
(4,322
)
    
(1,134
)
    
(5,456
)
Exchange difference from net investment in a foreign operation
    
-
      
-
      
-
      
-
      
-
      
(29
)
    
-
      
(29
)
    
-
      
(29
)
Comprehensive income of the period
    
-
      
-
      
-
      
-
      
-
      
(4,351
)
    
(34,697
)
    
(39,048
)
    
6,180
      
(32,868
)
Transactions with shareholders:
                                                                                
- Dividend distribution
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
(4,249
)
    
(4,249
)
- Contributions (devolution) of non-controlling shareholders, net
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
(10,761
)
    
(10,761
)
Total transactions with shareholders
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
(15,010
)
    
(15,010
)
Balances as of March 31, 2021
    
871,918
      
871,918
      
132,011
      
29,974
      
1,132,179
      
(181,857
)
    
(545,463
)
    
1,438,762
      
389,445
      
1,828,207
  
                                                                                 
Balances as of January 1, 2022
    
871,918
      
871,918
      
132,011
      
29,974
      
1,131,574
      
(135,947
)
    
(829,714
)
    
1,199,816
      
253,450
      
1,453,266
  
(Loss) profit for the period
    
-
      
-
      
-
      
-
      
-
      
-
      
(30,188
)
    
(30,188
)
    
11,298
      
(18,890
)
Foreign currency translation adjustment
    
-
      
-
      
-
      
-
      
-
      
(2,840
)
    
-
      
(2,840
)
    
335
      
(2,505
)
Exchange difference from net investment in a foreign operation
    
-
      
-
      
-
      
-
      
-
      
(39
)
    
-
      
(39
)
    
-
      
(39
)
Comprehensive income of the period
    
-
      
-
      
-
      
-
      
-
      
(2,879
)
    
(30,188
)
    
(33,067
)
    
11,633
      
(21,434
)
Transactions with shareholders:
                                                                                
- Contributions (devolution) of non-controlling shareholders, net
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
(2,334
)
    
(2,334
)
- Capital increase
    
325,062
      
325,062
      
-
      
-
      
10,518
      
-
      
-
      
335,580
      
-
      
335,580
  
Total transactions with shareholders
    
325,062
      
325,062
      
-
      
-
      
10,518
      
-
      
-
      
335,580
      
(2,334
)
    
333,246
  
Balances as of March 31, 2022
    
1,196,980
      
1,196,980
      
132,011
      
29,974
      
1,142,092
      
(138,826
)
    
(859,902
)
    
1,502,329
      
262,749
      
1,765,078
  
                                                                                 
                                                                                 
The accompanying notes on pages 6 to 37 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 March 31,  
   
Note
    
2021
    
2022
  
                   
OPERATING ACTIVITIES
                  
(Loss) profit before income tax
          
(16,881
)
    
55
  
Adjustments to  profit not affecting cash flows from
                      
operating activities:
                      
Depreciation
    
14 a
)
    
25,319
      
18,895
  
Amortization
    
14 b
)
    
24,494
      
24,359
  
Impairment of inventories
            
190
      
173
  
Impairment of accounts receivable and other accounts receivable
            
255
      
46
  
Reversal of impairment of inventories
            
(40
)
    
(111
)
Reversal of impairment of property, plant and equipment
            
(1,023
)
    
-
  
Reversal of impairment of intangible assets
            
(350
)
    
(595
)
Other provisions
            
4,350
      
6,820
  
Financial expense,net
            
68,643
      
(7,531
)
Share of the profit and loss of associates and joint ventures accounted for using the equity method
    
13
      
(1,006
)
    
425
  
Reversal of provisions
            
(1,593
)
    
(776
)
Reversal of disposal of assets
            
(138
)
    
(33
)
(Profit) loss on sale of property, plant and equipment
            
(10
)
    
37
  
Loss on remeasurement of accounts receivable
            
22,054
      
33,791
  
Net variations in assets and liabilities:
                        
Trade accounts receivable and working in progress
            
(106,203
)
    
145,409
  
Other accounts receivable
            
(4,325
)
    
12,673
  
Other accounts receivable from related parties
            
3,288
      
41,725
  
Inventories
            
(9,657
)
    
(21,229
)
Pre-paid expenses and other assets
            
109
      
(13,193
)
Trade accounts payable
            
11,145
      
(111,902
)
Other accounts payable
            
31,140
      
(31,349
)
Other accounts payable to related parties
            
(24,080
)
    
(20,076
)
Other provisions
            
(940
)
    
(428
)
Interest payment
            
(35,633
)
    
(38,627
)
Payments for purchases of intangibles - Concessions
            
(673
)
    
(908
)
Payment of income tax
            
(15,443
)
    
(33,700
)
Net cash (applied to) provided by operating activities
            
(27,008
)
    
3,950
  
                         
INVESTING ACTIVITIES
                        
Sale of property, plant and equipment
            
3,462
      
4,030
  
Interest received
            
656
      
742
  
Payment for purchase of investments properties
            
(75
)
    
-
  
Payments for intangible purchase
            
(2,954
)
    
(13,488
)
Payments for property, plant and equipment purchase
            
(4,987
)
    
(6,691
)
Net cash applied to investing activities
            
(3,898
)
    
(15,407
)
                         
FINANCING ACTIVITIES
                        
Loans received
            
21,380
      
7,618
  
Amortization of loans received
            
(69,581
)
    
(54,442
)
Amortization of bonds issued
            
(12,712
)
    
(14,041
)
Payment for transaction costs for debt
            
-
      
(1,818
)
Dividends paid to non-controlling interest
            
(4,249
)
    
(3,230
)
Cash received (return of contributions) from non-controlling shareholders
            
(10,761
)
    
(2,333
)
Net cash applied to financing activities
            
(75,923
)
    
(68,246
)
Net decrease in cash
            
(106,829
)
    
(79,703
)
Exchange difference
            
5,816
      
(33,238
)
Cash and cash equivalents at the beginning of the period
            
900,168
      
957,178
  
Cash and cash equivalents at the end of the period
    
8
      
799,155
      
844,237
  
                         
NON-CASH TRANSACTIONS:
                        
Capitalization of interests
            
1,120
      
852
  
Acquisition of assets through finance leases
            
24
      
-
  
Acquisition of right-of-use assets
            
42
      
8,776
  
Capitalization of convertible bonds
            
-
      
335,580
  
                         
The accompanying notes on pages 6 to 37 are an integral part of the consolidated financial statements.
          

- 5 -
AENZA S.A.A. AND SUBSIDIARIES
 

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER 31, 2021 (AUDITED) AND MARCH 31, 2022 (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 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 March 31, 2022 were authorized by Management and Board of Directors on April 29, 2022.

The consolidated financial statements for the year ended December 31, 2021, were prepared and issued with authorization of Management and the Board of Directors on March 4, 2022, and were approved on the General Shareholders’ Meeting held on March 31, 2021.

c)
Acuerdo preparatorio de colaboracion eficaz – “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$41.1 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 March 31, 2022, we registered the present value of the amounts described before, which amount to S/177.2 million and US$19.7 million (totaling S/474 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.

2.
 BASIS OF PREPARATION

The condensed interim consolidated financial statements for the period ended March 31, 2022 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, 2021, which have been prepared in accordance with International Standards. of Financial Information (hereinafter "IFRS").

The condensed interim consolidated financial statements are presented in thousands of Peruvian Soles, unless otherwise stated.
- 6 -

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, 2021.

3.1.
 Standards, amendments, and interpretation adopted by the Group

Standards, amendments and interpretation that have entered in force as of January 1, 2022, have not had impact on the condensed interim consolidated financial statements as of March 31, 2022, and fo this reason thay have not been disclosed. The Corporation has not adopted in advance any amendment and modification that are not yet effective.

3.2.
 Account balance reclassified as of March 31, 2021

Information on the subsidiary Adexus S.A. is presented., whose main activity is to provide information technology solutions mainly in Chile and Peru, as of March 31, 2020 the subsidiary was recognized as a non-current asset held for sale; However, as of March 31, 2021, it was reclassified as a discontinued operation.

As a result of this process, the amounts in the consolidated statement of income are reclassified as follows:
- 7 -

   
For the period ended
  
   
         
March 31, 2021
  
   
Reported
    
Adexus
    
As restated
  
                   
                   
Revenues from construction activities
    
516,668
      
-
      
516,668
  
Revenues from services provided
    
280,061
      
(27,193
)
    
252,868
  
Revenue from real estate and sale of goods
    
109,065
      
(13,529
)
    
95,536
  
     
905,794
      
(40,722
)
    
865,072
  
                         
Cost of construction activities
    
(477,097
)
    
-
      
(477,097
)
Cost of services provided
    
(237,954
)
    
30,067
      
(207,887
)
Cost of real estate and  sale of goods
    
(88,079
)
    
11,506
      
(76,573
)
     
(803,130
)
    
41,573
      
(761,557
)
Gross profit
    
102,664
      
851
      
103,515
  
                         
Administrative expenses
    
(49,517
)
    
5,344
      
(44,173
)
Other income and expenses
    
(1,609
)
    
13
      
(1,596
)
Operating profit
    
51,538
      
6,208
      
57,746
  
                         
Financial expenses
    
(71,153
)
    
2,914
      
(68,239
)
Financial income
    
1,728
      
(29
)
    
1,699
  
Share of the profit or loss of associates and joint ventures accounted for using the equity method
    
1,006
      
-
      
1,006
  
(Loss) profit before income tax
    
(16,881
)
    
9,093
      
(7,788
)
Income tax expense
    
(10,502
)
    
(719
)
    
(11,221
)
(Loss) profit from continuing operations
    
(27,383
)
    
8,374
      
(19,009
)
                         
Loss from discontinued operations
    
-
      
(8,374
)
    
(8,374
)
Loss for the period
    
(27,383
)
    
-
      
(27,383
)
                         
                         
(Loss) profit attributable to:
                        
Owners of the Company
    
(34,697
)
    
-
      
(34,697
)
Non-controlling interest
    
7,314
      
-
      
7,314
  
     
(27,383
)
    
-
      
(27,383
)
                         
Loss per share from continuing operations
                        
attributable to owners of the Company during the period
    
(0.040
)
    
0.010
      
(0.030
)


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, 2021 and as of March 31, 2022, this exposure is mainly concentrated in fluctuations of U.S. dollar, the Chilean and Colombian Pesos.
- 8 -

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,
    
March 31,
  
   
2021
    
2022
  
             
Soles (a)
    
3.998
      
3.701
  
Chilean Pesos (b)
    
844.69
      
787.98
  
Colombian Pesos (c)
    
3,981.16
      
3,748.15
  


(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 de la Republica de Colombia.

The consolidated statement of financial position includes the following:

   
At
    
At
  
   
December 31,
    
March 31,
  
   
2021
    
2022
  
   
USD(000)
    
USD(000)
  
             
Assets
    
519,448
      
423,581
  
Liabilities
    
512,947
      
425,900
  

For the periods ended March 31, 2021 and 2022, the Corporation’s exchange gains and losses for the Peruvian Sol, the Chilean and Colombian Pesos exposure against the U.S. dollar was:

   
2021
    
2022
  
             
Gain
    
92,995
      
189,522
  
Loss
    
(95,000
)
    
(186,369
)

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.

- 9 -


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. 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.

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, 2021
  
1 year
    
years
    
years
    
5 years
    
Total
  
                                   
Other financial liabilities (except
                                  
  for finance leases and lease
                                  
  liability for right-of-use asset)
    
224,503
      
52,751
      
173,392
      
124,320
      
574,966
  
Finance leases
    
5,624
      
4,613
      
296
      
-
      
10,533
  
Lease liability for right-of-use asset
    
18,817
      
24,295
      
21,993
      
8,086
      
73,191
  
Bonds
    
137,852
      
206,476
      
837,931
      
792,037
      
1,974,296
  
Trade accounts payables (except
                                        
  non-financial liabilities)
    
912,826
      
-
      
-
      
-
      
912,826
  
Accounts payables to related parties
    
51,004
      
50,712
      
-
      
-
      
101,716
  
Other accounts payables and other provisions
                                        
   (except non-financial liabilities)
    
323,070
      
22,941
      
109,383
      
422,666
      
878,060
  
     
1,673,696
      
361,788
      
1,142,995
      
1,347,109
      
4,525,588
  
                                         

- 10 -
                                         
                                         
   
Less than
      
1-2
      
2-5
    
More than
          
As of March 31, 2022
  
1 year
    
years
    
years
    
5 years
    
Total
  
                                         
Other financial liabilities (except
                                        
  for finance leases and lease
                                        
  liability for right-of-use asset)
    
196,062
      
65,810
      
134,279
      
104,776
      
500,927
  
Finance leases
    
5,269
      
3,561
      
-
      
-
      
8,830
  
Lease liability for right-of-use asset
    
18,803
      
27,879
      
20,906
      
4,681
      
72,269
  
Bonds
    
135,623
      
175,283
      
459,649
      
757,785
      
1,528,340
  
Trade accounts payables (except
                                        
  non-financial liabilities)
    
838,353
      
-
      
-
      
-
      
838,353
  
Accounts payables to related parties
    
47,013
      
30,430
      
-
      
1,006
      
78,449
  
Other accounts payables and other provisions
                                        
   (except non-financial liabilities)
    
328,070
      
19,239
      
103,766
      
426,572
      
877,647
  
     
1,569,193
      
322,202
      
718,600
      
1,294,820
      
3,904,815
  

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, 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.

As of December 31, 2021 and as of March 31, 2022, the gearing ratio is presented below.

   
At
    
At
  
   
December 31,
    
March 31,
  
   
2021
    
2022
  
Total financial liabilities and bonds (Note 15 and Note 16)
    
1,840,822
      
1,403,504
  
Less: Cash and cash equivalents (Note 8)
    
(957,178
)
    
(844,237
)
Net debt
    
883,644
      
559,267
  
Total equity
    
1,453,266
      
1,765,078
  
Total capital
    
2,336,910
      
2,324,345
  
                 
Gearing ratio
    
0.38
      
0.24
  

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).
- 11 -

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

   
Level 3
  
As of December 31, 2021
      
       
Financial liabilities
      
Other financial entities (Note 15-b)
    
165,878
  
         
As of March 31, 2022
        
         
Financial liabilities
        
Other financial entities (Note 15-b)
    
156,637
  

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, 2021.

6. SEASONALITY OF OPERATIONS

The Corporation does not present seasonality in the operations of any of its subsidiaries; and develop its bussiness normally during the period.

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) energy, (iii) infrastructure, and (iv) 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 estate 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, 2021
  
Engineering and construction
    

Energy
    

Toll roads
    

Transportation
    
Water treatment
    

Real estate
    
Parent Company operations
    

Eliminations
    

Consolidated
  
                                                       
Assets.-
                                                      
Cash and cash equivalent
    
303,925
      
121,873
      
114,100
      
182,607
      
7,499
      
109,828
      
117,346
      
-
      
957,178
  
Trade accounts receivables, net
    
366,299
      
67,662
      
38,418
      
106,856
      
1,003
      
9,958
      
84
      
-
      
590,280
  
Work in progress, net
    
309,063
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
309,063
  
Accounts receivable from related parties
    
95,390
      
121
      
48,012
      
4,309
      
-
      
3,166
      
52,644
      
(182,825
)
    
20,817
  
Other accounts receivable
    
390,133
      
31,092
      
30,057
      
18,734
      
960
      
3,783
      
12,297
      
2
      
487,058
  
Inventories, net
    
48,192
      
35,489
      
7,662
      
31,949
      
13
      
366,650
      
-
      
(1,629
)
    
488,326
  
Prepaid expenses
    
15,838
      
3,575
      
6,531
      
344
      
52
      
-
      
5,802
      
-
      
32,142
  
Total current assets
    
1,528,840
      
259,812
      
244,780
      
344,799
      
9,527
      
493,385
      
188,173
      
(184,452
)
    
2,884,864
  
                                                                         
Long-term trade accounts receivable, net
    
851
      
-
      
15,654
      
666,801
      
-
      
-
      
-
      
-
      
683,306
  
Long-term accounts receivable from related parties
    
335,150
      
-
      
19,700
      
42
      
11,536
      
-
      
584,596
      
(307,127
)
    
643,897
  
Prepaid expenses
    
-
      
981
      
20,558
      
1,894
      
684
      
-
      
-
      
(510
)
    
23,607
  
Other long-term accounts receivable
    
10,448
      
86,815
      
-
      
-
      
7,346
      
57,243
      
39,508
      
-
      
201,360
  
Investments in associates and joint ventures
    
108,038
      
8,951
      
-
      
-
      
-
      
5,443
      
1,559,672
      
(1,650,931
)
    
31,173
  
Investment property
    
-
      
-
      
-
      
-
      
-
      
22,416
      
42,558
      
(1,963
)
    
63,011
  
Property, plant and equipment, net
    
142,228
      
153,456
      
7,056
      
749
      
181
      
6,845
      
1,653
      
(8,998
)
    
303,170
  
Intangible assets, net
    
142,499
      
257,580
      
322,625
      
351
      
-
      
733
      
14,575
      
5,028
      
743,391
  
Right-of-use assets, net
    
3,825
      
3,890
      
5,308
      
61
      
17
      
1,888
      
40,789
      
(8,061
)
    
47,717
  
Deferred income tax asset
    
179,319
      
4,717
      
21,304
      
-
      
644
      
16,960
      
47,038
      
5,094
      
275,076
  
Total non-current assets
    
922,358
      
516,390
      
412,205
      
669,898
      
20,408
      
111,528
      
2,330,389
      
(1,967,468
)
    
3,015,708
  
Total assets
    
2,451,198
      
776,202
      
656,985
      
1,014,697
      
29,935
      
604,913
      
2,518,562
      
(2,151,920
)
    
5,900,572
  
                                                                         
Liabilities.-
                                                                        
Borrowings
    
136,512
      
27,046
      
3,687
      
45
      
18
      
69,065
      
13,573
      
(8,606
)
    
241,340
  
Bonds
    
4,896
      
-
      
36,637
      
24,496
      
-
      
-
      
3,809
      
-
      
69,838
  
Trade accounts payable
    
767,792
      
67,686
      
44,210
      
30,637
      
464
      
30,401
      
38,894
      
683
      
980,767
  
Accounts payable to related parties
    
130,848
      
1,079
      
47,340
      
42,185
      
19
      
19,155
      
13,623
      
(203,245
)
    
51,004
  
Current income tax
    
59,407
      
15,748
      
17,920
      
-
      
347
      
1,058
      
478
      
-
      
94,958
  
Other accounts payable
    
560,920
      
23,116
      
38,198
      
9,104
      
791
      
91,342
      
31,510
      
-
      
754,981
  
Provisions
    
70,585
      
25,498
      
4,158
      
-
      
-
      
560
      
54,028
      
-
      
154,829
  
Total current liabilities
    
1,730,960
      
160,173
      
192,150
      
106,467
      
1,639
      
211,581
      
155,915
      
(211,168
)
    
2,347,717
  
                                                                         
Borrowings
    
5,382
      
121,693
      
1,721
      
15
      
-
      
5,315
      
205,244
      
(810
)
    
338,560
  
Long-term bonds
    
21,386
      
-
      
215,296
      
602,201
      
-
      
-
      
352,201
      
-
      
1,191,084
  
Other long-term accounts payable
    
54,026
      
-
      
8,163
      
219
      
2,862
      
24,427
      
2,672
      
-
      
92,369
  
Long-term accounts payable to related parties
    
25,957
      
-
      
1,006
      
88,213
      
24,671
      
-
      
197,844
      
(286,979
)
    
50,712
  
Provisions
    
56,362
      
55,279
      
33,188
      
3,039
      
-
      
-
      
181,629
      
-
      
329,497
  
Deferred income tax liability
    
18,665
      
31,187
      
-
      
47,515
      
-
      
-
      
-
      
-
      
97,367
  
Total non-current liabilities
    
181,778
      
208,159
      
259,374
      
741,202
      
27,533
      
29,742
      
939,590
      
(287,789
)
    
2,099,589
  
Total liabilities
    
1,912,738
      
368,332
      
451,524
      
847,669
      
29,172
      
241,323
      
1,095,505
      
(498,957
)
    
4,447,306
  
Equity attributable to controlling interest in the Company
    
524,807
      
378,653
      
149,904
      
125,271
      
763
      
139,728
      
1,420,221
      
(1,539,531
)
    
1,199,816
  
Non-controlling interest
    
13,653
      
29,217
      
55,557
      
41,757
      
-
      
223,862
      
2,836
      
(113,432
)
    
253,450
  
Total liabilities and equity
    
2,451,198
      
776,202
      
656,985
      
1,014,697
      
29,935
      
604,913
      
2,518,562
      
(2,151,920
)
    
5,900,572
  
   

- 13 -

Operating segments financial position
                                                      
Segment reporting
                                                      
               
     Infrastructure
                         
As of March 31, 2022
  
Engineering and construction
    

Energy
    

Toll roads
    

Transportation
    
Water treatment
    

Real estate
    
Parent Company operations
    

Eliminations
    

Consolidated
  
                                                       
Assets.-
                                                      
Cash and cash equivalent
    
288,228
      
92,780
      
121,567
      
165,496
      
7,634
      
106,798
      
61,734
      
-
      
844,237
  
Trade accounts receivables, net
    
304,397
      
64,352
      
28,886
      
118,466
      
1,326
      
9,220
      
101
      
-
      
526,748
  
Work in progress, net
    
215,792
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
215,792
  
Accounts receivable from related parties
    
85,115
      
110
      
32,159
      
4,304
      
-
      
2,801
      
42,308
      
(142,703
)
    
24,094
  
Other accounts receivable
    
266,058
      
29,207
      
34,477
      
16,649
      
627
      
7,022
      
11,765
      
2
      
365,807
  
Inventories, net
    
53,165
      
35,809
      
8,094
      
36,254
      
13
      
378,588
      
-
      
(1,578
)
    
510,345
  
Prepaid expenses
    
17,425
      
3,058
      
8,072
      
795
      
81
      
-
      
6,816
      
-
      
36,247
  
Total current assets
    
1,230,180
      
225,316
      
233,255
      
341,964
      
9,681
      
504,429
      
122,724
      
(144,279
)
    
2,523,270
  
                                                                         
Long-term trade accounts receivable, net
    
8,517
      
-
      
16,245
      
671,296
      
-
      
-
      
-
      
-
      
696,058
  
Long-term accounts receivable from related parties
    
312,096
      
-
      
19,862
      
42
      
11,536
      
-
      
566,224
      
(333,731
)
    
576,029
  
Prepaid expenses
    
-
      
981
      
29,696
      
1,858
      
671
      
-
      
-
      
(510
)
    
32,696
  
Other long-term accounts receivable
    
138,578
      
83,092
      
-
      
-
      
7,346
      
55,606
      
38,518
      
-
      
323,140
  
Investments in associates and joint ventures
    
107,423
      
9,723
      
-
      
-
      
-
      
5,443
      
1,545,885
      
(1,637,729
)
    
30,745
  
Investment property
    
-
      
-
      
-
      
-
      
-
      
21,886
      
42,067
      
(1,963
)
    
61,990
  
Property, plant and equipment, net
    
134,744
      
150,898
      
6,759
      
694
      
173
      
6,422
      
1,499
      
(8,998
)
    
292,191
  
Intangible assets, net
    
142,171
      
259,721
      
309,989
      
322
      
-
      
673
      
14,363
      
4,765
      
732,004
  
Right-of-use assets, net
    
3,309
      
10,849
      
4,428
      
52
      
13
      
1,360
      
38,226
      
(6,200
)
    
52,037
  
Deferred income tax asset
    
172,900
      
4,929
      
23,733
      
-
      
651
      
18,059
      
56,494
      
5,068
      
281,834
  
Total non-current assets
    
1,019,738
      
520,193
      
410,712
      
674,264
      
20,390
      
109,449
      
2,303,276
      
(1,979,298
)
    
3,078,724
  
Total assets
    
2,249,918
      
745,509
      
643,967
      
1,016,228
      
30,071
      
613,878
      
2,426,000
      
(2,123,577
)
    
5,601,994
  
                                                                         
Liabilities.-
                                                                        
Borrowings
    
97,121
      
32,467
      
3,230
      
42
      
14
      
54,978
      
16,912
      
(6,455
)
    
198,309
  
Bonds
    
3,998
      
-
      
38,732
      
25,881
      
-
      
-
      
-
      
-
      
68,611
  
Trade accounts payable
    
675,354
      
46,543
      
42,830
      
34,230
      
241
      
33,682
      
32,105
      
2,062
      
867,047
  
Accounts payable to related parties
    
151,394
      
659
      
29,154
      
54,195
      
35
      
18,805
      
13,489
      
(220,718
)
    
47,013
  
Current income tax
    
69,628
      
1,377
      
21,101
      
-
      
347
      
638
      
487
      
-
      
93,578
  
Other accounts payable
    
507,534
      
22,801
      
41,354
      
9,038
      
900
      
106,726
      
62,283
      
-
      
750,636
  
Provisions
    
72,502
      
26,259
      
3,849
      
-
      
-
      
547
      
17,678
      
-
      
120,835
  
Total current liabilities
    
1,577,531
      
130,106
      
180,250
      
123,386
      
1,537
      
215,376
      
142,954
      
(225,111
)
    
2,146,029
  
                                                                         
Borrowings
    
3,082
      
105,471
      
1,227
      
8
      
-
      
15,868
      
186,541
      
(484
)
    
311,713
  
Long-term bonds
    
17,998
      
-
      
205,810
      
601,063
      
-
      
-
      
-
      
-
      
824,871
  
Other long-term accounts payable
    
49,224
      
-
      
7,214
      
170
      
2,866
      
22,835
      
2,671
      
-
      
84,980
  
Long-term accounts payable to related parties
    
25,729
      
-
      
1,006
      
47,936
      
25,434
      
-
      
188,555
      
(257,224
)
    
31,436
  
Provisions
    
56,883
      
52,418
      
35,195
      
3,371
      
-
      
-
      
191,269
      
-
      
339,136
  
Deferred income tax liability
    
15,716
      
33,969
      
-
      
49,066
      
-
      
-
      
-
      
-
      
98,751
  
Total non-current liabilities
    
168,632
      
191,858
      
250,452
      
701,614
      
28,300
      
38,703
      
569,036
      
(257,708
)
    
1,690,887
  
Total liabilities
    
1,746,163
      
321,964
      
430,702
      
825,000
      
29,837
      
254,079
      
711,990
      
(482,819
)
    
3,836,916
  
Equity attributable to controlling interest in the Company
    
490,461
      
392,676
      
154,198
      
143,421
      
234
      
138,909
      
1,711,136
      
(1,528,706
)
    
1,502,329
  
Non-controlling interest
    
13,294
      
30,869
      
59,067
      
47,807
      
-
      
220,890
      
2,874
      
(112,052
)
    
262,749
  
Total liabilities and equity
    
2,249,918
      
745,509
      
643,967
      
1,016,228
      
30,071
      
613,878
      
2,426,000
      
(2,123,577
)
    
5,601,994
  

 
- 14 -
Operating segment performance
                                                      
Segment Reporting
                                                      
               
     Infrastructure
                          
For the period ended March 31, 2021
  
Engineering and construction
    

Energy
    

Toll roads
    

Transportation
    
Water treatment
    

Real estate
    
Parent Company operations
    

Elimination
    

Consolidated
  
                                                       
Revenue
    
578,572
      
111,477
      
114,349
      
85,824
      
862
      
29,238
      
16,425
      
(71,675
)
    
865,072
  
Gross profit (loss)
    
45,943
      
22,433
      
13,387
      
24,821
      
277
      
3,788
      
4,695
      
(11,829
)
    
103,515
  
Administrative expenses
    
(31,563
)
    
(3,182
)
    
(4,334
)
    
(4,432
)
    
(197
)
    
(3,716
)
    
(8,786
)
    
12,037
      
(44,173
)
Other income and expenses, net
    
(4,512
)
    
109
      
391
      
1,267
      
(9
)
    
741
      
347
      
70
      
(1,596
)
Operating profit (loss)
    
9,868
      
19,360
      
9,444
      
21,656
      
71
      
813
      
(3,744
)
    
278
      
57,746
  
Financial expenses
    
(27,143
)
    
(3,392
)
    
(7,092
)
    
(2,864
)
    
(26
)
    
(3,468
)
    
(30,174
)
    
5,920
      
(68,239
)
Financial income
    
484
      
313
      
1,579
      
258
      
121
      
810
      
3,749
      
(5,615
)
    
1,699
  
Share of profit or loss in associates
                                                                        
and joint ventures
    
(652
)
    
658
      
-
      
-
      
-
      
-
      
(1,744
)
    
2,744
      
1,006
  
(Loss) profit before income tax
    
(17,443
)
    
16,939
      
3,931
      
19,050
      
166
      
(1,845
)
    
(31,913
)
    
3,327
      
(7,788
)
Income tax
    
(1,811
)
    
(4,943
)
    
(2,230
)
    
(5,836
)
    
(73
)
    
349
      
3,320
      
3
      
(11,221
)
(Loss) profit from continuing operations
    
(19,254
)
    
11,996
      
1,701
      
13,214
      
93
      
(1,496
)
    
(28,593
)
    
3,330
      
(19,009
)
Loss from discontinuing operations
    
-
      
-
      
-
      
-
      
-
      
-
      
(8,539
)
    
165
      
(8,374
)
(Loss) profit for the year
    
(19,254
)
    
11,996
      
1,701
      
13,214
      
93
      
(1,496
)
    
(37,132
)
    
3,495
      
(27,383
)
                                                                         
(Loss) profit from attributable to:
                                                                        
Owners of the Company
    
(19,506
)
    
10,611
      
340
      
9,910
      
93
      
(1,601
)
    
(37,117
)
    
2,573
      
(34,697
)
Non-controlling interest
    
252
      
1,385
      
1,361
      
3,304
      
-
      
105
      
(15
)
    
922
      
7,314
  
     
(19,254
)
    
11,996
      
1,701
      
13,214
      
93
      
(1,496
)
    
(37,132
)
    
3,495
      
(27,383
)


- 15 -

Operating segment performance
                                                      
Segment Reporting
                                                      
               
   
Infrastructure
                          
For the Period ended March 31, 2022
  
Engineering and construction
    

Energy
    

Toll roads
    

Transportation
    
Water treatment
    

Real estate
    
Parent Company operations
    

Elimination
    

Consolidated
  
                                                       
Revenue
    
709,200
      
139,656
      
124,101
      
101,679
      
1,094
      
29,503
      
16,950
      
(73,065
)
    
1,049,118
  
Gross profit (loss)
    
22,171
      
28,074
      
22,599
      
38,315
      
574
      
5,006
      
4,998
      
(12,603
)
    
109,134
  
Administrative expenses
    
(24,047
)
    
(3,157
)
    
(3,666
)
    
(2,830
)
    
(196
)
    
(3,148
)
    
(6,409
)
    
13,570
      
(29,883
)
Other income and expenses, net
    
(5,395
)
    
1,473
      
26
      
58
      
-
      
24
      
(352
)
    
2,319
      
(1,847
)
Operating (loss) profit
    
(7,271
)
    
26,390
      
18,959
      
35,543
      
378
      
1,882
      
(1,763
)
    
3,286
      
77,404
  
Financial expenses
    
(19,520
)
    
(5,422
)
    
(8,397
)
    
(1,739
)
    
(26
)
    
(4,015
)
    
(43,750
)
    
867
      
(82,002
)
Financial income
    
2,405
      
278
      
851
      
1,173
      
17
      
645
      
4,757
      
(5,048
)
    
5,078
  
Share of profit or loss in associates
                                                                        
and joint ventures
    
(612
)
    
772
      
-
      
-
      
-
      
-
      
(2,331
)
    
1,746
      
(425
)
(Loss) profit before income tax
    
(24,998
)
    
22,018
      
11,413
      
34,977
      
369
      
(1,488
)
    
(43,087
)
    
851
      
55
  
Income tax
    
(7,615
)
    
(6,343
)
    
(3,686
)
    
(10,777
)
    
(135
)
    
457
      
9,180
      
(26
)
    
(18,945
)
(Loss) profit from continuing operations
    
(32,613
)
    
15,675
      
7,727
      
24,200
      
234
      
(1,031
)
    
(33,907
)
    
825
      
(18,890
)
(Loss) profit for the year
    
(32,613
)
    
15,675
      
7,727
      
24,200
      
234
      
(1,031
)
    
(33,907
)
    
825
      
(18,890
)
                                                                         
(Loss) profit from attributable to:
                                                                        
Owners of the Company
    
(32,265
)
    
14,023
      
4,295
      
18,150
      
234
      
(820
)
    
(33,942
)
    
137
      
(30,188
)
Non-controlling interest
    
(348
)
    
1,652
      
3,432
      
6,050
      
-
      
(211
)
    
35
      
688
      
11,298
  
     
(32,613
)
    
15,675
      
7,727
      
24,200
      
234
      
(1,031
)
    
(33,907
)
    
825
      
(18,890
)


- 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 March 31,
  
   
2021
    
2022
  
             
Cash on hand
    
936
      
1,006
  
Remittances in-transit
    
2,222
      
2,256
  
Bank accounts
                
Current accounts
    
142,029
      
150,839
  
Banco de la Nacion
    
19,847
      
17,966
  
Savings deposits and mutual funds
    
62
      
131
  
Time deposits (less than 3 months) (a)
    
205,302
      
168,160
  
     
367,240
      
337,097
  
Escrow account (b)
                
Operational funds
    
261,001
      
191,746
  
Reserve funds
    
163,939
      
142,139
  
Consortium funds
    
78,589
      
99,476
  
Guarantee funds
    
83,251
      
70,517
  
     
586,780
      
503,878
  
Total Cash and Cash equivalents
    
957,178
      
844,237
  

(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 0.14% and 4.05%. 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 Red Vial 5 S.A. amounting to S/90 million and S/22 million, respectively, as of March 31, 2022 (S/110 million and S/22 million, respectively, as of December 31, 2021).

9. TRADE ACCOUNTS RECEIVABLES, NET

This account comprises:

   
Total
    
Current
    
Non-current
  
   
At
    
At
    
At
    
At
    
At
    
At
  
   
December 31,
    
March 31,
    
December 31,
    
March 31,
    
December 31,
    
March 31,
  
   
2021
    
2022
    
2021
    
2022
    
2021
    
2022
  
                                     
Receivables (net) (a)
    
773,575
      
664,883
      
269,427
      
158,577
      
504,148
      
506,306
  
Unbilled receivables (net) - Subsidiaries (b)
    
209,258
      
255,693
      
209,258
      
248,064
      
-
      
7,629
  
Unbilled receivables (net) - Concessions (c)
    
290,753
      
302,230
      
111,595
      
120,107
      
179,158
      
182,123
  
     
1,273,586
      
1,222,806
      
590,280
      
526,748
      
683,306
      
696,058
  

a)
Receivables are presented net of impairment and present value discount. The balance of the account includes an impairment and present value discount amounts to S/44.7 million (S/45.3 million as of December 31, 2021). The ageing is detailed as follows:

- 17 -

   
At
    
At
  
   
December 31,
    
March 31,
  
   
2021
    
2022
  
Current
    
683,921
      
609,364
  
Past due up to 30 days
    
41,222
      
17,491
  
Past due from 31 days up to 90 days
    
11,668
      
2,094
  
Past due from 91 days up to 120 days
    
15,814
      
2,860
  
Past due from 121 days up to 360 days
    
7,070
      
19,351
  
Past due over 360 days
    
13,880
      
13,723
  
     
773,575
      
664,883
  
                 
 
As of March 31, 2022, the amount overdue for more than 360 days mainly includes invoices receivable from subsidiaries: Cumbra Peru S.A. for S/9.6 million, Unna Transporte S.A.C. for S/2.6 million, Cumbra Ingenieria S.A. for S/1.5 million (Cumbra Peru S.A. for S/9.5 million, Unna Transporte S.A.C. for S/2.7 million, Cumbra Ingenieria S,A. for S/1.6 millones and others for S/0.1 millones, as of December 31, 2021).

b)
The rights to be billed of subsidiaries, in the Engineering and Construction segment, are documents related to the estimates of the degree of progress for services rendered not billed, and services pending billing for the rest of the Subsidiaries, they are presented net of impairment for S/5.5 million, and discounted to present value for S/7 million (S/5.2 million for impairment, and S/5.9 million for present value, as of December 31, 2021), and detailed by subsidiary:

   
At
    
At
  
   
December 31,
    
March 31,
  
   
2021
    
2022
  
Cumbra Peru S.A.
    
170,063
      
215,426
  
Cumbra Ingenieria S.A.
    
24,177
      
24,663
  
Unna Transporte S.A.C.
    
10,291
      
8,785
  
Unna Energía S.A.
    
4,718
      
6,771
  
Others
    
9
      
48
  
     
209,258
      
255,693
  
 
c)
Unbilled receivables from concessions correspond to future invoice according to Concession Contract terms, as detailed below:
 
   
At
    
At
  
   
December 31,
    
March 31,
  
   
2021
    
2022
  
Tren Urbano de Lima S.A.
    
256,526
      
270,332
  
Carretera Andina del  Sur S.A.C.
    
12,667
      
11,621
  
Red Vial 5 S.A.
    
16,451
      
16,349
  
Carretera Sierra Piura S.A.C.
    
4,489
      
3,268
  
Concesionaria La Chira S.A.
    
620
      
660
  
     
290,753
      
302,230
  

- 18 -
10. WORK IN PROGRESS, NET

This account comprises:

 
At
  
At
  
 
December 31,
  
March 31,
  
 
2021
  
2022
  
         
Cumbra Peru S.A.
    
304,940
      
210,182
  
Cumbra Ingenieria S.A.
    
4,123
      
5,610
  
     
309,063
      
215,792
  

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,
    
March 31,
  
   
2021
    
2022
  
             
Cumbra Peru S.A. - Concentrator Plant and tunnel of Quellaveco
    
82,253
      
91,479
  
Vial y Vives - DSD S.A. - Quebrada Blanca Project
    
64,777
      
55,439
  
Vial y Vives - DSD S.A. - Modernization and expansion of Arauco Plant
    
139,025
      
34,624
  
Cumbra Peru S.A. -  Jorge Chavez Airport
    
16,602
      
14,136
  
Cumbra Perú S.A. - Quebrada honda
    
-
      
6,327
  
Cumbra Ingeniería S.A. - Talara paquete 4
    
-
      
5,610
  
Others
    
6,406
      
8,177
  
     
309,063
      
215,792
  

11. TRANSACTIONS WITH RELATED PARTIES

a)    Transactions with related parties

Major transactions for the periods ended March 31, 2021 and 2022 between the Company and its related parties are summarized as follows:

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

   
2021
    
2022
  
Revenue from sales of goods and services:
            
- Joint operations
    
2,871
      
10,120
  
- Associates
    
229
      
-
  
     
3,100
      
10,120
  
                 

- 19 -
b)      Balances of transactions with related parties

   
As of December 31,
    
As of March 31,
  
   

     2021    

     2022  
   
Receivable
    
Payable
    
Receivable
    
Payable
  
Current portion:
                        
Joint operations
                        
Consorcio Rio Urubamba
    
9,792
      
-
      
9,416
      
-
  
Consorcio Rio Mantaro
    
-
      
7,043
      
-
      
5,987
  
Consorcio Constructor Chavimochic
    
-
      
9,301
      
-
      
8,925
  
Consorcio Peruano de Conservacion
    
654
      
2,392
      
655
      
2,642
  
Consorcio Vial Quinua
    
-
      
1,947
      
-
      
1,944
  
Consorcio Chicama Ascope
    
-
      
-
      
227
      
4
  
Consorcio Inti Punku
    
1,865
      
1,733
      
2,445
      
729
  
Consorcio GyM Conciviles
    
1,479
      
1,074
      
1,369
      
2,644
  
Consorcio Manperan
    
1,389
      
4,968
      
3,951
      
981
  
Consorcio Italo Peruano
    
1,394
      
106
      
1,304
      
109
  
Consorcio Norte Pachacutec
    
125
      
282
      
125
      
294
  
Consorcio Ermitaño
    
1,028
      
515
      
949
      
483
  
Terminales del Peru
    
92
      
399
      
84
      
399
  
Consorcio CDEM
    
-
      
1,545
      
-
      
433
  
Consorcio GyM-Stracon
    
-
      
143
      
-
      
105
  
Consorcio TNT Vial y Vives - DSD Chile Ltda
    
-
      
633
      
-
      
650
  
Otros menores
    
288
      
1,803
      
1,020
      
431
  
     
18,106
      
33,884
      
21,545
      
26,760
  
                                 
Other related parties
                                
Ferrovias S.A.
    
-
      
15,513
      
-
      
18,765
  
Peru Piping Spools S.A.C.
    
2,711
      
1,607
      
2,549
      
1,488
  
     
2,711
      
17,120
      
2,549
      
20,253
  
Current portion
    
20,817
      
51,004
      
24,094
      
47,013
  
                                 
                                 
                                 
Non-current portion
                                
Gasoducto Sur Peruano S.A.
    
643,897
      
-
      
576,029
      
-
  
Ferrovias S.A.
    
-
      
14,690
      
-
      
14,697
  
Ferrovias Participaciones S.A.
    
-
      
36,022
      
-
      
16,739
  
Non-current
    
643,897
      
50,712
      
576,029
      
31,436
  

Accounts receivable and payable are mainly of current maturity and have no specific guarantees; except for accounts receivable from Gasoducto Sur Peruano S.A. (GSP) and Ferrovias Participaciones S.A. These balances do not generate interest considering their maturity in the short term.

The non-current balance corresponds to the obligations arising from the early termination of the GSP project. As of March 31, 2022, the book value of the non-current account receivable registered by the parent Company, for S/372 million, was recorded using the discounted cash flow method, at a rate of 3.73% (2.73% in 2021) that originated a value of discount of S/94 million equivalent to US$26 million (S/400 million and S/77 million equivalent to US$20 million, as of December 31, 2021, respectively). Additionally, as a result of the early termination of the GSP and related facts, the subsidiary Cumbra Peru S.A. it has balances from the Consorcio Constructor Ductos del Sur (CCDS) to those who had previously deteriorated in 2016, it was integrated in the consolidation under the proportional participation method. As of March 31, 2022, the value of accounts receivable from CCDS corresponds mainly to collection rights to GSP for S/298 million, which includes S/271 million receivables from CCDS and S/27 million for lost profits (as of December 31, 2021, S/321 million which includes S/289 million and S/32 million, respectively).
- 20 -

12. OTHER ACCOUNTS RECEIVABLE

This account comprises:

         
Total
          
Current
          
Non-current
  
   
At
    
At
    
At
    
At
    
At
    
At
  
   
December 31,
    
March 31,
    
December 31,
    
March 31,
    
December 31,
    
March 31,
  
   
2021
    
2022
    
2021
    
2022
    
2021
    
2022
  
                                     
Advances to suppliers
    
33,769
      
40,349
      
33,769
      
40,349
      
-
      
-
  
Income tax on-account payments
    
44,072
      
47,584
      
44,072
      
47,584
      
-
      
-
  
VAT credit
    
47,295
      
48,998
      
38,924
      
40,822
      
8,371
      
8,176
  
Guarantee deposits
    
199,132
      
214,519
      
185,334
      
157,954
      
13,798
      
56,565
  
Claims to third parties
    
215,943
      
207,424
      
186,065
      
91,994
      
29,878
      
115,430
  
Petroleos del Peru S.A.- Petroperu S.A.
    
106,077
      
100,553
      
19,262
      
17,461
      
86,815
      
83,092
  
ITAN and other tax receivable
    
48,378
      
45,743
      
17,302
      
15,424
      
31,076
      
30,319
  
Restricted funds
    
7,346
      
7,346
      
-
      
-
      
7,346
      
7,346
  
Rental and sale of equipment - Cumbra Peru S.A. projects
    
32,827
      
29,964
      
32,827
      
29,964
      
-
      
-
  
Accounts receivable from personneel
    
16,963
      
10,041
      
16,963
      
10,041
      
-
      
-
  
Consorcio Panorama
    
27,193
      
25,277
      
-
      
-
      
27,193
      
25,277
  
Other minors
    
38,993
      
38,461
      
38,854
      
38,324
      
139
      
137
  
     
817,987
      
816,259
      
613,371
      
489,917
      
204,616
      
326,342
  
Impairment
    
(129,569
)
    
(127,312
)
    
(126,313
)
    
(124,110
)
    
(3,256
)
    
(3,202
)
     
688,418
      
688,947
      
487,058
      
365,807
      
201,360
      
323,140
  

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,
    
March 31,
  
   
2021
    
2022
  
Associates
    
22,047
      
20,846
  
Joint ventures
    
9,126
      
9,899
  
     
31,173
      
30,745
  

The movement of our investments in associates for the periods ended March 31, 2021 and 2022 is as follows:

   
2021
    
2022
  
Balance at January 1
    
35,516
      
31,173
  
Equity interest in results
    
1,006
      
(425
)
Conversion adjustment
    
16
      
(3
)
Balance at March 31
    
36,538
      
30,745
  

 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.

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.

Finally, as of the date of this report, the Grantor and Chavimochic concessionaire have signed an act of mutual agreement for the suspension of the issuance of the arbitration resolution for a period of 60 business days, in order to negotiate the restart of the Project works.

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 March 31, 2021 and 2022, is as follows:

         
Property,
              
         
plant and
    
Intangibles
    
Right-of-use
  
   
Investment
    
equipment
    
assets
    
assets
  
   
property
    
(a)
    
(b)
    
(a)
  
                         
Net cost at January 1, 2021
    
26,073
      
405,469
      
791,990
      
64,518
  
                                 
Additions
    
75
      
5,011
      
4,295
      
42
  
Reclassifications and disposals
    
-
      
859
      
551
      
(267
)
Conversion adjustments
    
(70
)
    
709
      
(1,718
)
    
207
  
Deductions for sale of assets
    
-
      
(3,452
)
    
-
      
-
  
Depreciation, amortization
    
(603
)
    
(18,893
)
    
(24,494
)
    
(5,823
)
                                 
Net cost at March 31, 2021
    
25,475
      
389,703
      
770,624
      
58,677
  
                                 
                                 
Net cost at January 1, 2022
    
63,011
      
303,170
      
743,391
      
47,717
  
                                 
Additions
    
-
      
6,691
      
14,396
      
8,776
  
Reclassifications and disposals
    
-
      
50
      
(6
)
    
(136
)
Conversion adjustments
    
-
      
(635
)
    
(1,418
)
    
(9
)
Deductions for sale of assets
    
-
      
(3,522
)
    
-
      
-
  
Depreciation, amortization
    
(1,021
)
    
(13,563
)
    
(24,359
)
    
(4,311
)
                                 
Net cost at March 31, 2022
    
61,990
      
292,191
      
732,004
      
52,037
  
                                 

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

As of March 31, 2022, additions to property, plant and equipment mainly corresponds to work in progress and units to be received corresponding to the drilling stage of the infrastructure segment for S/3.4 million; machinery of the engineering and construction segment for S/1.9 million; and equipment of the engineering and construction segment for S/1 million (as of March 31, 2021, machinery of the engineering and construction segment for S/3 million; and equipment of the engineering and construction segment for S/0.8 million).

During 2021, the net value corresponding to the building located in Surquillo has been reclassified to Investment Properties due to management's decision to lease the property located at Av Paseo de la Republica 4675.
- 22 -

As of March 31, 2022, additions to right-of-use assets correspond mainly to lease agreements for the acquisition of equipment.

For the periods ended March 31 2021 and 2022, the depreciation of property, plant and equipment, investment property and right-of-use assets is presented in the Statement of Income as follows:

   
2021
    
2022
  
             
Cost of services and goods (Note 21)
    
19,320
      
17,760
  
Administrative expenses (Note 21)
    
2,963
      
1,135
  
Depreciation discontinued operations
    
3,036
      
-
  
Total depreciation
    
25,319
      
18,895
  
(-) Depreciation related to investment property
    
(603
)
    
(1,021
)
(-) Depreciation related to right-of-use assets (Note 14)
    
(5,823
)
    
(4,311
)
Total depreciation of property, plant
    and equipment
    
18,893
      
13,563
  

(b)
Intangible assets

As of March 31 2022, the additions to intangibles correspond mainly to investments in the preparation of wells and other assets of the infrastructure segment for S/11.9 million; software development of the engineering and construction segment for S/1.5 million; and, concessions and licenses corresponding to the infrastructure segment for S/1 million (as of March 31 2021, investments in the preparation of wells and other assets for S/2.8 million; software development of the engineering and construction segment for S/1.4 million).

For the periods ended March 31 2021 and 2022, the amortization of intangibles is broken down in the statement of income as follows:

 
   
2021
    
2022
  
Cost of sales and services (Note 21)
    
23,150
      
23,933
  
Administrative expenses (Note 21)
    
974
      
426
  
Amortization discontinued operations
    
370
      
-
  
Total amortization for the period
    
24,494
      
24,359
  

Goodwill

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

   
2021
    
2022
  
Engineering and construction
    
36,345
      
35,737
  
Electromechanical
    
20,735
      
20,735
  
     
57,080
      
56,472
  
 
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,
    
March 31,
    
December 31,
    
March 31,
    
December 31,
    
March 31,
  
   
2021
    
2022
    
2021
    
2022
    
2021
    
2022
  
                                     
Bank loans (a)
    
343,679
      
283,966
      
217,935
      
169,533
      
125,744
      
114,433
  
Finance leases
    
9,836
      
8,296
      
5,118
      
4,840
      
4,718
      
3,456
  
Lease liability for right-of-use asset
    
60,507
      
61,123
      
14,541
      
14,980
      
45,966
      
46,143
  
Other financial entities (b)
    
165,878
      
156,637
      
3,746
      
8,956
      
162,132
      
147,681
  
     
579,900
      
510,022
      
241,340
      
198,309
      
338,560
      
311,713
  

(a)
Bank loans

As of December 31, 2021 and as of March 31, 2022, this item comprises bank loans in local and foreign currencies for working capital purposes. These obligations accrue fixed interest rates that fluctuate between 0.9% and 11% in 2021 and between 0.9% and 11.4% in 2022.

                     
Current
          
Non-current
  
               
At
    
At
    
At
    
At
  
   
Interest
    
Date of
    
December 31,
    
March 31,
    
December 31,
    
March 31,
  
   
rate
    
maturity
    
2021
    
2022
    
2021
    
2022
  
                                     
Cumbra Peru S.A. (i - iii)
    
0.92% / 8.11
%
    
2025
      
129,905
      
91,347
      
4,526
      
2,897
  
Unna Energía S.A. (ii)
    
6.04% / 7.68
%
    
2027
      
23,351
      
27,291
      
120,635
      
99,421
  
Viva Negocio Inmobiliario S.A. (iv)
    
7.00% / 11.35
%
    
2024
      
64,679
      
50,895
      
583
      
12,115
  
                     
217,935
      
169,533
      
125,744
      
114,433
  

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 (hereinafter BCP), Citibank del Peru S.A. and Citibank N.A. The objectives of the Financial Stability Framework Agreement were: to guarantee Cumbra Peru S.A. a syndicated revolving line for working capital, a non-revolving line of credit to finance repayment commitments subject to performance bonds; guarantee lines of credit for the issuance of the performance bond and undertake to maintain the existing letters of credit issued at the request of Cumbra Peru S.A. The maturity date is July 31, 2022.

On March 29, 2022, S/28.2 million and US$0.3 million corresponding to the total balance of the Financial Stability Framework Agreement were paid. The Company has complied with the obligations and covenants established in 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 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, its period of availability is until December 31, 2022, with a maximum exposure limit of US$80 million. These facilities are repaid within 8 years. In April and December 2021, an additional cash transfer of US$7.3 million (equivalent to US$28.2 million) and US$4.3 million (equivalent to US$16.9 million), respectively, was requested for the additional investments. As of March 31, 2022, TP has a total amount of financing of US$51.8 million (equivalent to S/191.9 million) and due in 2027 (US$54.3 million, equivalent to S/217.4 million, as of December 31, 2021). As of March 31, 2022, the amount of financing equivalent to the 50% interest held by the subsidiary Unna Energia S.A. amounts to US$25.9 million, equivalent to S/95.9 million (US$27.2 million, equivalent to S/108.7 million, as of December 31, 2021).
- 24 -

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 March 31, 2022, TP has a total amount of financing of US$17.5 million (equivalent to S/64.7 million) and due in 2026 (US$18.4 million, equivalent to S/73.6 million, as of December 31, 2021). As of March 31, 2022, the amount of financing equivalent to the 50% interest held by the subsidiary Unna Energia S.A. amounts to US$8.7 million, equivalent to S/32.3 million (US$9.2 million, equivalent to S/36.8 million, as of December 31, 2021).

As of March 31, 2022, TP is in compliance with the ratios established in the contract loan.

iii)
Banco Santander Peru S.A. Loan

On December 28, 2020, Tecnicas Reunidas enforced two letters of credit for a total  amount of US$23.7 million, which had been issued by Banco Santander Peru S.A. on behalf of our subsidiary Cumbra Peru S.A. as security pursuant to a construction contract. As a result, Cumbra Peru 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% and due on September 30, 2022. As of March 31, 2022, the principal amount of the loan is US$20.2 million, equivalent to S/74.8 million (US$20.2 million, equivalent to S/80.8 million, as of December 31, 2021).

As of March 31, 2022, Cumbra Peru S.A. is in compliance with the covenants under the Loan Agreement with Banco Santander Peru S.A.

On April 6 and 26, 2022, Cumbra Perú S.A. paid Banco Santander Peru S.A. US$1.5 million and US$18.7 million, respectively; Consequently, the entire debt was cancelled.

iv)
Viva Negocio Inmobiliario S.A. Loan

The balance consists mainly of the financing of the following projects:

-
Los Parques de Comas: As of March 31, 2022, promissory notes for a total of S/9.7 million with BBVA Continental, with an interest rate between 7.94% and 9.32%, maturing between April 2022 and January 2023 (S/9.7 million, at December 31, 2021).

-
El Nuevo Rancho: As of March 31, 2022, a promissory note with the Inter-American Finance Bank for S/17.9 million, with an interest rate of 11.35%, due in December 2024 (S/18.4 million, as of December 31, 2021).

-
Los Parques del Mar: As of March 31, 2022, promissory notes with the Banco de Credito del Peru for a total of S/35 million, with an interest rate of 7%, due in July 2022 (S/35.7 million, as of December 31). December 2021).

-
Los Parques de Carabayllo: As of March 31, 2022, loan with Eldo Peru S.A.C. for US$0.1 million equivalent to S/0.3 million, with an interest rate of 11%, maturing in April 2022 (US$0.35 million equivalent to S/1.4 million, as of December 31, 2021).

(b)
Other financial entities

The balance is composed of the monetization of Red Vial 5 S.A. dividends, as described below.

- 25 -
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 Red Vial 5 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 Red Vial 5 S.A. by transferring its class B shares (equivalent to 48.8% of the capital of Red Vial 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 Red Vial 5 S.A.'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 Red Vial 5'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 March 31, 2022, the loan balance payable amounted to US$42.3 million, equivalent to S/156.6 million (as of December 31, 2021, the balance was US$41.5 million, equivalent to S/165.8 million). Accrued interest amounted to S/2.3 million (for the period ended in March 31, 2021, S/2.4 million).

(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,
    
March 31,
    
December 31,
    
March 31,
  
   
2021
    
2022
    
2021
    
2022
  
                         
Bank loans
    
343,679
      
283,966
      
372,270
      
296,629
  
Finance leases
    
9,836
      
8,296
      
9,097
      
7,759
  
Lease liability for right-of-use asset
    
60,507
      
61,123
      
66,943
      
66,626
  
Other financial entities
    
165,878
      
156,637
      
165,878
      
156,637
  
     
579,900
      
510,022
      
614,188
      
527,651
  

As of March 31, 2022, the fair value is based on cash flows discounted using debt rates between 4.5% and 10% (between 3.9% and 10% as of December 31, 2021) and are included as Level 2 in the level of measurement.

- 26 -

16. BONDS

This item includes:

         
Total
          
Current
          
Non-current
  
   
At
    
At
    
At
    
At
    
At
    
At
  
   
December 31,
    
March 31,
    
December 31,
    
March 31,
    
December 31,
    
March 31,
  
   
2021
    
2022
    
2021
    
2022
    
2021
    
2022
  
                                     
Tren Urbano de Lima S.A. (a)
    
626,697
      
626,944
      
24,496
      
25,881
      
602,201
      
601,063
  
Red Vial 5 S.A. (b)
    
251,933
      
244,542
      
36,637
      
38,732
      
215,296
      
205,810
  
Cumbra Perú S.A. (c)
    
26,282
      
21,996
      
4,896
      
3,998
      
21,386
      
17,998
  
AENZA S.A.A. (d)
    
356,010
      
-
      
3,809
      
-
      
352,201
      
-
  
     
1,260,922
      
893,482
      
69,838
      
68,611
      
1,191,084
      
824,871
  

(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 March 31, 2022, an accumulated amortization amounting to S/111.8 million (S/106.9 million as of December 31, 2021) has been made.

As of March 31, 2022, the balance includes VAC adjustments and interest payable for S/125.9 million (S/121.1 million as of December 31, 2021).

The account movement for the periods ended March 31, 2021 and 2022 is as follows:

   
2021
    
2022
  
             
Balance at January, 1
    
624,454
      
626,697
  
Amortization
    
(4,014
)
    
(4,808
)
Accrued interest
    
11,757
      
12,848
  
Interest paid
    
(7,523
)
    
(7,793
)
Balance at March, 31
    
624,674
      
626,944
  
                 

As of December 31, 2021 and as of March 31, 2022, Tren Urbano de Lima S.A. has complied with the corresponding covenants.

As of March 31, 2021, the fair value amounts to S/627.2 million (S/626.8 million, as of December 31, 2021), this is based on discounted cash flows using the rate of 5.1% (4.9% as of December 31, 2021) and corresponds to level 3 of the fair value hierarchy.

(b)  Red Vial 5 S.A.

Between 2015 and 2016, the subsidiary Red Vial 5 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.

- 27 -
The account movement for the periods ended March 31, 2021 and 2022 is as follows:

   
2021
    
2022
  
             
Balance at January, 1
    
280,848
      
251,933
  
Amortization
    
(6,940
)
    
(7,299
)
Accrued interest
    
5,735
      
5,125
  
Interest paid
    
(5,822
)
    
(5,217
)
Balance at March, 31
    
273,821
      
244,542
  

As of December 31, 2021 and as of March 31, 2022, Red Vial 5 S.A. has complied with the covenants.

As of March 31, 2022, the fair value amounts to S/254 million (S/260 million as of December 31, 2021), is based on discounted cash flows using rate 8.4% as of March 31, 2022 (8.1% as of December 31, 2021) and is within level 2 of the fair value hierarchy.

(c)  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 March 31, 2022, the balance includes accrued interest payable for US$0.1 million, equivalent to S/0.4 million (US$0.3 million, equivalent to S/1 million, as of December 31, 2021).

The account movement for the periods ended March 31, 2021 and 2022 is as follows:

   
2021
    
2022
  
             
Balance at January, 1
    
27,457
      
26,282
  
Amortization
    
(1,758
)
    
(1,913
)
Exchange difference
    
912
      
(1,788
)
Accrued interest
    
536
      
472
  
Interest paid
    
(1,120
)
    
(1,057
)
Balance at March, 31
    
26,027
      
21,996
  
  
As of March 31, 2022, the fair value amounts to S/22.5 million (S/27.1 million as of December 31, 2021), is based on discounted cash flows using a rate of 7.7% (7.4% as of December 31, 2021) and is within level 3 of the fair value hierarchy.

(d)   AENZA S.A.A.

On August 2021 13, 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. The bonds mature in February 2024, bear interest at a rate of 8%, and are payable quarterly.

- 28 -
Pursuant to the terms and conditions of the convertible bond, they may be converted into shares as of the sixth month from the date of issuance, according to the following procedure: 1) the conversion day is the last business day of each month; 2) the conversion may be total or partial; 3) the conversion notice must be sent to the Bondholders' Representative no later than 5 business days prior to the conversion date; and 4) the conversion price will be the minimum between (i) US$0.33 (Zero and 33/100 Dollars) per Share, and (ii) 80% of the average price of the transactions occurring thirty (30) days prior to the Conversion Date, weighted by the volume of each transaction. The conversion will be made by dividing the current nominal value of each bond by the conversion price.

As of December 31, 2021, the principal balance amounted to US$89.9 million equivalent to S/359.7 million. The debt balance net of costs incurred amounted to S/356 million.

As of March 31, 2022, the Company converted all of the bonds into common shares (on February 28, 2022, for 11,000 bonds and on March 31, 2022, for 78,970 bonds), therefore the balance of the debt was fully canceled (Note 20).

17. TRADE ACCOUNTS PAYABLE

This item includes:

   
At
    
At
  
   
December 31,
    
March 31,
  
   
2021
    
2022
  
             
Invoices payable
    
506,798
      
442,611
  
Provision of contract costs (a)
    
468,360
      
418,186
  
Notes payable
    
5,609
      
6,250
  
     
980,767
      
867,047
  

(a)
The contract cost provisions include:

i)
Goods and services received not invoiced amounting to S/284.1 million for the engineering and construction segment, S/46.9 million for the infrastructure segment, S/21.2 million for the energy segment, S/21.2 million for the real estate and S/14 million for operations of the parent company (S/296.6 million, S/42.3 million, S/24.2 million, S/20.6 million and S/16 million, respectively, as of December 31, 2021).

ii)
Estimate costs to come according to the the completion porcentage of projects on engineering and construction segment amounting to S/30.8 million (S/68.6 million, as of December 31, 2021).


- 29 -
18. OTHER ACCOUNTS PAYABLE

This item includes:

   
     Total    
     Current    
   
Non-current
  
   
At
    
At
    
At
    
At
    
At
    
At
  
   
December 31,
    
March 31,
    
December 31,
    
March 31,
    
December 31,
    
March 31,
  
   
2021
    
2022
    
2021
    
2022
    
2021
    
2022
  
                                     
Advances received from customers (a)
    
322,680
      
284,489
      
315,644
      
278,493
      
7,036
      
5,996
  
Consorcio Ductos del Sur - payable (b)
    
77,665
      
71,045
      
29,242
      
27,070
      
48,423
      
43,975
  
Salaries and other payable
    
126,466
      
141,013
      
126,466
      
141,013
      
-
      
-
  
Put option liability on Morelco acquisition
    
27,986
      
25,907
      
27,986
      
25,907
      
-
      
-
  
Third-party loans
    
2,076
      
2,075
      
-
      
-
      
2,076
      
2,075
  
Other taxes payable
    
124,004
      
119,930
      
112,737
      
109,654
      
11,267
      
10,276
  
Acquisition of additional non-controlling interest
    
25,253
      
17,465
      
25,253
      
17,465
      
-
      
-
  
Guarantee deposits
    
26,017
      
25,248
      
26,017
      
25,248
      
-
      
-
  
Consorcio Rio Mantaro - payables
    
58,502
      
55,167
      
58,502
      
55,167
      
-
      
-
  
Provision of interest for debt with suppliers
    
3,056
      
3,397
      
285
      
393
      
2,771
      
3,004
  
Share purchase agreement - Inversiones Sur
    
15,992
      
14,804
      
-
      
-
      
15,992
      
14,804
  
Other accounts payables
    
37,653
      
75,076
      
32,849
      
70,226
      
4,804
      
4,850
  
     
847,350
      
835,616
      
754,981
      
750,636
      
92,369
      
84,980
  

(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,
    
March 31,
    
December 31,
    
March 31,
    
December 31,
    
March 31,
  
   
2021
    
2022
    
2021
    
2022
    
2021
    
2022
  
                                     
Customer advances from Consortiums
    
27,568
      
21,649
      
27,568
      
21,649
      
-
      
-
  
Customer advances for real estate projects
    
80,188
      
95,558
      
80,188
      
95,558
      
-
      
-
  
Quellaveco Project
    
10,841
      
10,859
      
10,841
      
10,859
      
-
      
-
  
Special National Transportation Infrastructure Project
    
19,582
      
19,142
      
12,765
      
13,316
      
6,817
      
5,826
  
Gasoducto Piura Construction
    
5,745
      
2,957
      
5,745
      
2,957
      
-
      
-
  
Pebbles Quebrada Blanca Phase 2 Project
    
120,642
      
128,650
      
120,642
      
128,650
      
-
      
-
  
Evaporadores Modernización y ampliación de la Planta Arauco Project
    
52,063
      
-
      
52,063
      
-
      
-
      
-
  
Others
    
6,051
      
5,674
      
5,832
      
5,504
      
219
      
170
  
     
322,680
      
284,489
      
315,644
      
278,493
      
7,036
      
5,996
  

(b)
The balance of other accounts payable from Consorcio Constructor Ductos del Sur corresponds to payment obligations to vendors and main subcontractors for S/71 million (S/77.6 million as of December 31, 2021), 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,
    
March 31,
    
December 31,
    
March 31,
    
December 31,
    
March 31,
  
   
2021
    
2022
    
2021
    
2022
    
2021
    
2022
  
                                     
Legal claims (a)
    
364,385
      
342,271
      
117,520
      
85,022
      
246,865
      
257,249
  
Tax claims
    
37,466
      
38,488
      
16,776
      
15,535
      
20,690
      
22,953
  
Provision for well closure (b)
    
82,475
      
79,212
      
20,533
      
20,278
      
61,942
      
58,934
  
     
484,326
      
459,971
      
154,829
      
120,835
      
329,497
      
339,136
  

(a)
Legal contingencies correspond mainly to:

Civil compensation to Peruvian Government

Corresponds to the legal contingency estimated by management for exposure of the Company and two of 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 Construccion”. 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$41.1 million. As of March 31, 2022, the amount equivalent to the present value resulting from the amounts descrived above is recorded as a provision of S/177.2 million and US$19.7 million, equivalent to a total S/250 million (As of December 31, 2021 was S/164.6 million and US$18.9 million equivalent to S/240.1 million).

Administrative process INDECOPI

i)
On March 9, 2021, Cumbra Peru S.A. was notified with an “Informe Final de Instruccion” prepared by INDECOPI’s Technical Secretary, in relation with the administrative sanction process against 33 construction companies and other 26 of their executives for allegedly arranging a coordination system through with they illegaly distributed several contract tenders conducted by Provias Nacional and other govenmental entities. Such report was subject to approval by INDECOPI’s “Comision de Defensa de la Libre Competencia”, which on November 15, 2021, through Resolution N°080-021-CLC-INDECOPI, ruled in favor to sanction the companies and their executives, included Cumbra Peru S.A. On December 9, 2021, Cumbra Peru filed an appeal against such ruling, suspending its application.  As of March 31, 2022, the Company and its legal advisors estimated a provision of S/54.7 million (S/52.6 million as of December 31, 2021).

ii)
On February 7, 2022, Cumbra Peru S.A. and Unna Transporte S.A.C. were notified by the National Directorate for the Investigation and Promotion of Free Competition under File 003-2020/CLC-IP, issuing Resolution 038-2021/DLC-INDECOPI of December 28, 2021, through which an administrative procedure is initiated penalty for the alleged execution of a horizontal collusive practice in the form of concerted distribution of suppliers in the contracting market for workers in the construction sector at the national level, during the period between the years 2011 to 2017. As of March 31, 2022, the Company and its legal advisors estimate a provision amounting to S/4.8 million in each of the subsidiaries.


Shareholder class action lawsuits in the Eastern District Court of New York

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.

- 31 -
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%. On September 14, 2021, the settlement agreement was approved by the Eastern District Court of New York.

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.

As of December 31, 2021, the Company maintains a provision of US$8.6 million.  As of March 31, 2022, this provision was transferred to other accounts payable and it is equivalent to S/33.3 million, and was full paid on April 8, 2022.

(b)
Provision for closure corresponds mainly to:

i)
Provisions for closure of wells of Unna Energia S.A. for S/68.1 million and contractual compliance with Petroperu for S/3.1 million (as of December 31, 2021, S/71.1 million and S/3.4 million, respectively);

ii)
In Red Vial 5 S.A. provision for costs associated with the closing of the concession contract and the process of claiming the tariff guarantee for toll suspension for S/5 million (as of December 31, 2021, S/5.1 million); and

The account movement for the periods ended March 31, 2021 and 2022 are as follows:

               
Provision
        
   
Legal
    
Tax
    
for well
        
   
claims
    
claims
    
closure
    
Total
  
                         
At January 1, 2021
    
368,241
      
8,176
      
52,949
      
429,366
  
Additions
    
4,350
      
-
      
668
      
5,018
  
Present value
    
1,347
      
-
      
104
      
1,451
  
Reversals of provisions
    
(1,593
)
    
-
      
-
      
(1,593
)
Reclasification
    
157
      
-
      
-
      
157
  
Payments
    
(913
)
    
-
      
(27
)
    
(940
)
Translation adjustments / Exchange difference
    
6,140
      
-
      
108
      
6,248
  
At March 31, 2021
    
377,729
      
8,176
      
53,802
      
439,707
  
                                 
At January 1, 2022
    
364,385
      
37,466
      
82,475
      
484,326
  
Additions
    
5,798
      
1,022
      
-
      
6,820
  
Present value
    
12,493
      
-
      
(1,473
)
    
11,020
  
Reversals of provisions
    
(776
)
    
-
      
-
      
(776
)
Reclasification
    
(28,093
)
    
-
      
-
      
(28,093
)
Payments
    
(290
)
    
-
      
(138
)
    
(428
)
Translation adjustments / Exchange difference
    
(11,246
)
    
-
      
(1,652
)
    
(12,898
)
At March 31, 2022
    
342,271
      
38,488
      
79,212
      
459,971
  

20. CAPITAL

In accordance with the terms and conditions of the convertible bond, holders of 11,000 Convertible Bonds, each with a par value of US$1,000 and for a principal amount equivalent to US$11 million, communicated the exercise of their conversion rights.

On February 28, 2022, the Company issued provisional certificates for 37,801,073 new common shares, with a nominal value of S/1.00 each, with voting rights, and they are fully subscribed and paid. Therefore, the Company increased its capital stock from S/871,917,855 to S/ 909,718,928; and with respect to the convertible bonds, as of February 28, 2022, the balance amounted to US$78.9 million.

- 32 -
Additionally, on March 31, 2022, holders of 78,970 convertible bonds, each for a par value of US$1,000 and for a principal amount equivalent to US$78.9 million, have communicated the exercise of their conversion right. The company converted the bonds, as well as paid the accrued interest to the bondholders who have exercised their conversion rights. As a consequence, the Company issued provisional certificates for 287,261,051 new common shares. Therefore, the capital stock of the Company has increased from S/909,718,928 to S/1,196,979,979. After this last operation, the convertible bonds have been fully cancelled.

As of March 31, 2022, a total of 135,133,785 shares were represented in ADS, equivalent to 27,026,757 ADSs at a rate of 5 shares per ADS.

As of December 31, 2021, a total of 136,637,740 shares were represented in ADS, equivalent to 27,327,548 ADSs at a rate of 5 shares per ADS.

21. EXPENSES BY NATURE

For the periods ended March 31, 2021 and 2022, this item comprises:
 
   
Cost
              
   
of goods
    
Administrative
        
   
and services
    
expenses
    
Total
  
2021
                  
Salaries, wages and fringe benefits
    
286,328
      
28,288
      
314,616
  
Services provided by third-parties
    
208,559
      
7,570
      
216,129
  
Purchase of goods
    
175,953
      
-
      
175,953
  
Other management charges
    
47,971
      
4,364
      
52,335
  
Depreciation  (Note 14.a)
    
19,320
      
2,963
      
22,283
  
Amortization (Note 14.b)
    
23,150
      
974
      
24,124
  
Impairment of accounts receivable
    
202
      
-
      
202
  
Taxes
    
947
      
14
      
961
  
Recovery of property, plant and equipment
    
(1,023
)
    
-
      
(1,023
)
Inventory recovery
    
150
      
-
      
150
  
     
761,557
      
44,173
      
805,730
  
                         
2022
                        
Salaries, wages and fringe benefits
    
360,988
      
20,390
      
381,378
  
Services provided by third-parties
    
328,587
      
4,790
      
333,377
  
Purchase of goods
    
124,128
      
248
      
124,376
  
Other management charges
    
83,350
      
2,875
      
86,225
  
Depreciation  (Note 14.a)
    
17,760
      
1,135
      
18,895
  
Amortization (Note 14.b)
    
23,933
      
426
      
24,359
  
Impairment of accounts receivable
    
46
      
-
      
46
  
Taxes
    
1,638
      
19
      
1,657
  
Recovery of property, plant and equipment
    
(545
)
    
-
      
(545
)
Impairment of inventory
    
99
      
-
      
99
  
     
939,984
      
29,883
      
969,867
  
 

- 33 -
22. OTHER INCOME AND EXPENSES

For the periods ended March 31, 2021 and 2022, this item comprises:
 
   
2021
    
2022
  
Other income:
            
Sale of assets
    
3,462
      
4,030
  
Valuation of well abandonment
    
-
      
1,023
  
Penalty income
    
465
      
215
  
Recovery of provisions and impairments
    
1,491
      
78
  
Others
    
1,768
      
486
  
     
7,186
      
5,832
  
                 
Other expenditures:
                
Net cost of fixed assets disposal
    
3,718
      
3,982
  
Civil penalty cover to the Peruvian Government
    
-
      
2,281
  
Administrative fine
    
4,790
      
736
  
Asset impairment
    
53
      
-
  
Valuation of well abandonment
    
71
      
-
  
Disposal of property, plant and equipment
    
-
      
101
  
Others
    
150
      
579
  
     
8,782
      
7,679
  
     
(1,596
)
    
(1,847
)

23. FINANCIAL INCOME AND EXPENSES

For the periods ended March 31, 2021 and 2022, this item comprises:

   
2021
    
2022
  
             
Financial income:
            
Interest on loans to third parties
    
54
      
47
  
Profit for present value of financial asset or
  financial liability
    
897
      
772
  
Interest on short-term bank deposits
    
174
      
510
  
Business interests
    
90
      
167
  
Exchange difference gain, net
    
-
      
3,153
  
Interest on mutual funds
    
110
      
11
  
Others
    
374
      
418
  
     
1,699
      
5,078
  
  
- 34 -

     2021      2022  
Financial expenses:
            
Interest expense on:
            
- Bank loans (a)
    
16,214
      
9,573
  
- Bonds (b)
    
6,271
      
18,839
  
- Loans from third parties
    
1,807
      
2,951
  
- Right-of-use
    
988
      
936
  
- Financial lease
    
218
      
153
  
Commissions and collaterals
    
6,081
      
5,823
  
Interests from Tax Administration (c)
    
8,778
      
2,315
  
Loss for present value of financial asset or
   financial liability (d)
    
25,769
      
41,390
  
Exchange difference loss, net
    
2,005
      
-
  
Other financial expenses
    
1,228
      
874
  
Less capitalized interest
    
(1,120
)
    
(852
)
     
68,239
      
82,002
  

(a)
The variation in interest corresponds mainly to the fact that the Company decreased by S/3.1 million due to the loan with CS Peru Infrastructure Holdings LLC (Gramercy), which was canceled in August 2021, the difference of S/3.2 million corresponds to Cumbra Peru S.A.C. mainly explained by the amortization of capital of the Tranche A Syndicated Line and Santander Spain, canceled in August and November 2021, respectively.

(b)
The increase corresponds mainly to the recording of interest and costs incurred by the Company for S/13.2 million due to the capitalization of the convertible bonds.

(c)
The variation corresponds to Cumbra Peru S.A.C. which decreased by S/8.1 million due to the cancellation of default interest on the SUNAT fine (Income Tax 2013) and increased by S/1.6 million (Agreement between Vial y Vives - DSD S.A. and General Treasury of the Republic of Chile for VAT payment).

(d)
The variation corresponds to the increase in the interest rate in the estimation of the present value of the civil compensation before the Ministerio de Justicia, impacting the Company for S/11.6 million, Unna Transporte S.A.C. for S/1.6 million and Cumbra Peru S.A.C. for S/2.3 million.


24. 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/304.7 million (S/303.1 million as of December 2021).

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

b) Other contingencies

As of March 31, 2022, contingencies held by the Corporation are substantially the same as those existing as of December 31, 2021


- 35 -
c) Letters bonds and guarantees

The Corporation maintains guarantees and letters of credit in force in various financial entities guaranteeing operations for US$462.8 million (US$471.9 million, as of December 31, 2021).

25. 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 March 31, 2022, the Corporation’s subsidiaries do not have paid dividends to its non-controlling interests (for period ended in March 31, 2021, the subsidiaries paid S/4.2 million).

26. 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 March 31, 2021 and 2022, the basic loss per common share is as follows:
 
         
2021
    
2022
  
                   
Loss attributable to owners of the Company
                  
during the period
          
(34,697
)
    
(30,188
)
Weighted average number of shares in issue
                      
at S/1.00 each, at March 31
          
871,917,855
      
983,883,698
  
                       
Basic loss per share (in S/)
    
(
*)
    
(0.040
)
    
(0.031
)
                         
                         
                         
             
2021
      
2022
  
                         
Loss from continuing operations attributable to owners
                        
of the Company during the period
            
(26,323
)
    
(30,188
)
Weighted average number of shares in issue
                        
at S/1.00 each, at March 31
            
871,917,855
      
983,883,698
  
                         
Basic loss per share (in S/)
    
(
*)
    
(0.030
)
    
(0.031
)
                         
 
(*) The Corporation does not have common shares with dilutive effects at March 31, 2021 and 2022.

- 36 -
27. EVENTS AFTER THE DATE OF THE STATEMENT OF FINANCIAL POSITION

Bridge Loan Agreement

On March 17, 2022, the company entered into a bridge loan credit agreement for up to US$120 million, with a group of financial entities comprised by Banco BTG Pactual S.A. - Cayman Branch, Banco Santander Peru S.A., HSBC Mexico, S.A., Institución de Banca Múltiple, Grupo Financiero HSBC, and Natixis, New York Branch. The proceeds of this loan will be used, among other corporate purposes, to execute the mandatory redemption of the bonds convertible into shares of our company. The financing will be repaid over a period of 18 months, and will be secured, subject to the fulfillment of certain precedent conditions, by a flow trust (first lien), a trust over the shares of Viva Negocio Inmobiliario S.A. (second lien), and a pledge on our shares in Unna Energía S.A. (first lien).

- 37 -