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Interest in Other Entities
 12 Months Ended
Dec. 31, 2019
Investments accounted for using equity method [abstract]  
Interest in Other Entities
6.
INTERESTS IN OTHER ENTITIES
The consolidated financial statements include the accounts of the Group and its subsidiaries. Additionally, the consolidated financial statements of the Group include its interest in joint operations in which the Company or certain subsidiaries have joint control with their partners (Note
2.2-d).
 
 a)
Main subsidiaries
The following table shows the principal direct and indirect subsidiaries classified by operating segment (Note 7):
 
Name
  
Country
  
Economic activity
Engineering and Construction:
    
GyM S.A.
  Peru, and Colombia  Civil construction, electro-mechanic assembly, buildings management and implementing housing development projects and other related services.
GyM Chile S.p.A.  Chile  Investment funds, investment companies and similar financial entities.
Vial y Vives - DSD S.A.  Chile  Construction engineering projects, civil construction and related technical consultancy, rental of agricultural machinery and equipment, forestry, construction and civil engineering without operator.
GMI S.A.  Peru, Mexico, and Bolivia  Advisory and consultancy services in engineering, carrying out studies and projects, managing projects and supervision of works.
Morelco S.A.S.  Colombia and Ecuador  Providing construction and assembly services, supply of equipment and materials, operation and maintenance and engineering services in the specialties of mechanics, instrumentation and civil works.
Infrastructure:
    
GMP S.A.  Peru  Oil and oil
by-products
extraction, operation and exploration services, as well as providing storage and fuel dispatch services.
Oiltanking Andina Services S.A.  Peru  Operation of the gas processing plant of Pisco - Camisea.
Transportadora de Gas Natural Comprimido Andino S.A.C.  Peru  Supply, process and market natural gas and its derivative products.
 
 
 
 
 
Concar S.A.  Peru  Highway and roads concessions operation and maintenance.
GyM Ferrovias S.A.  Peru  Concession for the operation of the public transportation system of Lima Metro (Metro de Lima Metropolitana).
Survial S.A.  Peru  Concession for constructing, operating and maintaining Section 1 of the “Southern Inter-oceanic” highway.
Norvial S.A.  Peru  Concession for restoring, operating and maintaining the “Ancon - Huacho - Pativilca” section of the Panamericana Norte road.
Concesion Canchaque S.A.C.  Peru  Concession for operating and maintaining of the Buenos Aires – Canchaque provincial road highway.
Concesionaria Via Expresa Sur S.A.  Peru  Concession for designing, constructing, operating and maintaining the Via Expresa - Paseo de la Republica in Lima.
Real estate:
    
VIVA GyM S.A.  Peru  Developing and managing real estate projects directly or together with other partners.
Parent company operation:
    
Adexus S.A.  Chile, Peru, Colombia and Ecuador  IT solutions services.
CAM Holding S.p.A.  Chile  Investment company.
Qualys S.A.  Peru  Human, economic and technological services to the Group’s companies.
Promotora Larcomar S.A.  Peru  Building a hotel complex on a plot of land located in the district of Miraflores.
Promotores Asociados de Inmobiliarias S.A.  Peru  Operating in the real-estate industry and engaged in the development and sale of office premises in Peru.
Negocios del Gas S.A.  Peru  Investment company for construction, operation, and maintenance of the pipeline system to transport natural gas and liquids.
Inversiones en Autopistas S.A.  Peru  Holding company of shares, participation or any other credit instrument or investment document.
 
The following table shows the Group’s subsidiaries and related interest as of December 31, 2019:
 
   
Percentage of
common shares
directly held by
Parent (%)
  
Percentage of
common shares
held by
Subsidiaries (%)
  
Percentage of
common
shares held by
the Group (%)
  
Percentage of
common shares
held by non-controlling

interests (%)
 
Engineering and Construction:
     
GyM S.A.
   98.87%   —     98.87%   1.13% 
- Morelco S.A.S.
   —     70.00%   70.00%   30.00% 
- GyM Chile S.p.A.
   —     100.00%   100.00%   —   
- Vial y Vives – DSD S.A.
   —     94.49%   94.49%   5.51% 
GMI S.A.
   89.41%   —     89.41%   10.59% 
- Ecología Tecnología Ambiental S.A.C.
   —     100.00%   100.00%   —   
- GM Ingenieria y Construcción de CV
   —     99.00%   99.00%   1.00% 
- GM Ingenieria Bolivia S.R.L.
   —     98.57%   98.57%   1.43% 
Infrastructure:
     
GMP S.A.
   95.00%   —     95.00%   5.00% 
- Oiltanking Andina Services S.A.
   —     50.00%   50.00%   50.00% 
- Transportadora de Gas Natural Comprimido Andino S.A.C.
   —     99.93%   99.93%   0.07% 
Concar S.A.
   100.00%   —     100.00%   —   
GyM Ferrovias S.A.
   75.00%   —     75.00%   25.00% 
Survial S.A.
   100.00%   —     100.00%   —   
Norvial S.A.
   18.20%   48.80%   67.00%   33.00% 
Concesión Canchaque S.A.
   99.96%   0.04%   100.00%   —   
Concesionaria Vía Expresa Sur S.A.
   99.98%   0.02%   100.00%   —   
Real Estate:
     
Viva GyM S.A.
   56.22%   43.32%   99.54%   0.46% 
Parent company operations:
     
Qualys S.A ( Previously Generadora Arabesco S.A.)
   100.00%   —     100.00%   —   
Promotora Larcomar S.A.
   46.55%   —     46.55%   53.45% 
Negocios del Gas S.A.
   99.99%   0.01%   100.00%   —   
Agenera S.A.
   99.00%   1.00%   100.00%   —   
Inversiones en Autopistas S.A.
   1.00%   99.00%   100.00%   —   
Cam Holding S.p.A.
   100.00%   —     100.00%   —   
Adexus S.A.
   100.00%   —     100.00%   —   
The following table shows the Group’s subsidiaries and related interest as of December 31, 2018:
 
   
Percentage of
common shares
directly held by
Parent (%)
  
Percentage of

common

shares held by
Subsidiaries (%)
  
Percentage of
common shares
held by
the Group (%)
  
Percentage of
common shares
held by non-controlling

interests (%)
 
Engineering and Construction:
     
GyM S.A.
   98.24%   —     98.24%   1.76% 
- Morelco S.A.S.
   —     70.00%   70.00%   30.00% 
- GyM Chile S.p.A.
   —     94.49%   99.99%   0.01% 
- Vial y Vives – DSD S.A.
   —     94.49%   94.49%   5.51% 
GMI S.A.
   89.41%   —     89.41%   10.59% 
- Ecología Tecnología Ambiental S.A.C.
   —     —     99.99%   0.01% 
- GM Ingenieria y Construcción de CV
   —     —     99.00%   1.00% 
- GM Ingenieria Bolivia S.R.L.
   —     —     99.00%   1.00% 
Infrastructure:
     
GMP S.A.
   95.00%   —     95.00%   5.00% 
- Oiltanking Andina Services S.A.
   —     50.00%   50.00%   50.00% 
- Transportadora de Gas Natural Comprimido Andino S.A.C.
   —     99.93%   99.93%   0.07% 
Concar S.A.
   99.99%   —     99.99%   0.01% 
GyM Ferrovias S.A.
   75.00%   —     75.00%   25.00% 
Survial S.A.
   99.99%   —     99.99%   0.01% 
Norvial S.A.
   67.00%   —     67.00%   33.00% 
Concesión Canchaque S.A.
   99.96%   —     99.96%   0.04% 
Concesionaria Vía Expresa Sur S.A.
   99.98%   0.02%   100.00%   —   
Real Estate:
     
Viva GyM S.A.
   63.44%   36.10%   99.54%   0.46% 
Parent company operations:
     
Qualys S.A (Previously Generadora Arabesco S.A.)
   99.00%   —     99.00%   1.00% 
Promotora Larcomar S.A.
   46.55%   —     46.55%   53.45% 
Negocios del Gas S.A.
   99.99%   0.01%   100.00%   —   
Agenera S.A.
   99.00%   1.00%   100.00%   —   
Inversiones en Autopistas S.A.
   100.00%   —     —     —   
Cam Holding S.p.A.
   100.00%   —     100.00%   —   
Adexus S.A.
   99.99%   0.01%   100.00%   —   
All investments in subsidiaries have been included in the consolidation. The proportion of voting rights in such subsidiaries is held directly by the Company and does not differ significantly from the proportion of shares held.
In June 2018, the Company expanded its shareholding to 100% of the subsidiary Adexus S.A. (Note
32-a).
In 2018, the subsidiary Cam Servicios del Perú S.A. was sold, as well as the following indirect subsidiaries: i) Stracon GyM S.A. through GyM S.A. and ii) Cam Chile S.p.A., through Cam Holding S.p.A. In that year, these investments were deconsolidated by the Company, and their operations are shown in Note 36.
As of December 31, the
non-controlling
interest is attributed to the following subsidiaries:
 
   
2018
   
2019
 
Viva GyM S.A. and subsidiaries
   168,612    168,839 
GyM S.A. and subsidiaries
   67,639    61,569 
Norvial S.A.
   65,918    63,031 
GMP S.A.
   23,424    24,413 
GyM Ferrovias S.A.
   55,986    77,564 
Promotora Larcomar S.A.
   13,121    3,058 
Other
   6,871    (199) 
  
 
 
   
 
 
 
   401,571    398,275 
  
 
 
   
 
 
 
In December 2019, the subsidiary Viva GyM S.A. through the General Shareholders’ Meeting
,
 
agreed to capitalize its supplementary premium for the amount of S/65.3 million to subsequently reduce the share capital in a
non-proportional
manner by returning contributions amounting to S/82.3 million. The return did not generate cash outflow as the reciprocal obligations between its shareholders with the subsidiary were offset. Consequently, the Company modified its participation in its subsidiary from 63.4% to 56.2%, in turn its subsidiary GyM S.A. (also a shareholder of Viva GyM S.A.) modified its stake from 36.1% to 43.3%.
In addition, in December 2019 the subsidiary GyM S.A. through the General Shareholders’ Meeting agreed to the capital increase for monetary contributions in the amount of S/146.1 million. Minority shareholders voluntarily waived the
pre-emptive
subscription right, causing the Company’s participation percentage to increase from 98.2% to 98.9%.
Summarized financial information of subsidiaries with material
non-controlling
interests
Set out below is the summarized financial information for each subsidiary that has
non-controlling
interests that are material to the Group.
Summarized statement of financial position
 
   
Viva GyM S.A.

and subsidiaries
  
GyM S.A.

and subsidiaries
  
Norvial S.A.
  
GyM Ferrovías S.A.
 
   
At December 31,
  
At December 31,
  
At December 31,
  
At December 31,
 
   
2018
  
2019
  
2018
  
2019
  
2018
  
2019
  
2018
  
2019
 
Current:
         
Assets
   720,976   591,402   1,262,588   1,232,486   109,778   84,889   534,148   449,180 
Liabilities
   (310,132)   (263,592)   (1,467,953)   (1,491,747)   (66,506)   (53,715)   (563,081)   (93,879) 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Current net assets (liabilities)
   410,844   327,810   (205,365)   (259,261)   43,272   31,174   (28,933)   355,301 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Non-current:
         
Assets
   98,504   121,529   980,653   1,100,218   462,739   442,186   974,688   623,033 
Liabilities
   (37,154)   (37,851)   (413,026)   (486,924)   (306,261)   (282,358)   (716,946)   (668,080) 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Non-current
net assets (liabilities)
   61,350   83,678   567,627   613,294   156,478   159,828   257,742   (45,047) 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Net assets
   472,194   411,488   362,262   354,033   199,750   191,002   228,809   310,254 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
 
Summarized income statement    
 
   
Viva GyM S.A. and
subsidiaries
  
GyM S.A. and
subsidiaries
  
Norvial S.A.
  
GyM Ferrovías S.A.
 
   
For the year ended
  
For the year ended
  
For the year ended
  
For the year ended
 
   
2018
  
2019
  
2018
  
2019
  
2018
  
2019
  
2018
  
2019
 
Revenue
   630,130   264,401   1,704,998   2,279,786   163,117   272,679   577,993   397,853 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Profit (loss) before income tax
   226,945   30,729   (154,452)   (116,081)   21,104   24,067   116,822   121,079 
Income tax
   (69,166)   (7,000)   18,559   (30,843)   (3,885)   (6,815)   (35,524)   (39,634) 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Profit (loss) for the year
   157,779   23,729   (135,893)   (146,924)   17,219   17,252   81,298   81,445 
Discontinued operations
   —     —     44,096   —     —     —     —     —   
Other comprehensive income
   —     —     (14,061)   (7,436)   —     —     —     —   
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Total comprehensive income for the year
   157,779   23,729   (105,858)   (154,360)   17,219   17,252   81,298   81,445 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Dividends paid to
non-controlling
interest (Note
35-d)
   84,870   —     4,241   —     8,184   8,580   —     —   
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Summarized statement of cash flows
 
   
Viva GyM S.A. and
subsidiaries
  
GyM S.A. and
subsidiaries
  
Norvial S.A.
  
GyM Ferrovías S.A.
 
   
For the year ended
  
For the year ended
  
For the year ended
  
For the year ended
 
   
2018
  
2019
  
2018
  
2019
  
2018
  
2019
  
2018
  
2019
 
Net cash provided from operating activities
   259,992   28,791   148,754   (25,502)   70,939   12,514   (161,318)   379,882 
Net cash (applied to) provided from investing activities
   (8,460)   (2,613)   233,150   (20,173)   (2)   (33)   1,928   2,845 
Net cash (applied to) provided from financing activities
   (255,979)   (58,722)   (388,836)   209,514   (43,536)   (46,045)   189,495   (273,009) 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
(Decrease) increase in cash and cash equivalents, net
   (4,447)   (32,544)   (6,932)   163,839   27,401   (33,564)   30,105   109,718 
Cash and cash equivalents at the beginning of the year
   97,709   93,262   179,560   172,628   72,449   99,850   161,073   191,178 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
Cash and cash equivalents at the end of the year
   93,262   60,718   172,628   336,467   99,850   66,286   191,178   300,896 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
 
The information above is the amount before inter-company eliminations.
 
 b)
Public services concessions
The Group has public service concessions. When applicable, the income attributable to the construction or restoration of infrastructure has been accounted for by applying the models described in Note 2.5 (financial asset model, intangible asset and forked model).
After the termination of the Contract between TGNCA and the Ministry of Energy and Mines, Management is preparing new gas compression and liquefaction projects. Additionally, it is evaluating the centralization of the gas business through this vehicle, a decision that must be approved by the Board of Directors in 2020.
In all the Group’s concessions, the infrastructure returns to the Grantor at the end of the Contract.
The concessions held by the Group are as follows as of December 31,
 2
018 and
2019:
Name of
Concession
  
Description
  
Estimated
investment
  
Consideration
 
Ordinary
shares held
 
Concession
termination
 
Accounting
model
Survial S.A.  This company operates and maintains a 750 km road from the San Juan de Marcona port to Urcos, Peru, which is connected to an interoceanic road. The road has five toll stations and three weigh stations.  US$99 million  Transaction secured by the Peruvian Government involving from annual payments for the maintenance and operation of the road, which is in charge of the Peruvian Ministry of Transport and Communications (MTC). 99.90% 2032 Financial asset
Canchaque S.A.C.  This company operates and periodically maintains a 78 km road which connects the towns of Buenos Aires and Canchaque, in Peru. The road has one toll station.  
US$31 million
(US$29 million in 2018)
  
Transaction secured by the Peruvian Government regardless the traffic volume.
 
Revenue is secured by an annual minimum amount of US$0.3 million.
 99.96% 2025 Financial asset
Concesionaria. La Chira S.A.  Designing, financing, constructing, operating and maintaining project called “Planta de Tratamiento de Aguas Residuales y Emisario Submarino La Chira”. The Project will treat approximately 25% of wastewaters in Lima.  S/250 million  Transaction secured by the Peruvian Government consisting of monthly and quarterly payments settled by Sedapal´s collection trust. 50.00% 2036 Financial asset
GyM Ferrovias S.A.  Concession for the operation of Line 1 of Lima Metro, Peru’s only urban railway system in Lima city, which includes (i) operation and maintenance of the existing trains (24 initial investment trains and 20 additional trains), (ii) operation and maintenance of the railway system (railway and infrastructure).  S/642 million  Transaction secured by the Peruvian Government involving a quarterly payment received from MTC based on km travelled per train. 75.00% 2041 Financial asset
Norvial S.A.  The Company operates and maintains the highway that connects Lima to the northwest of Peru. This 183 km road known as Red Vial 5 runs from the cities of Ancon to Pativilca and has three toll stations.  
US$187 million
(US$152 million in 2018)
  From users (self-financed concession; revenue is derived from collection of tolls). 67.00% 2028 Intangible
Via Expresa Sur S.A.  The Company obtained the concession for designing, financing, building, operating and maintaining the infrastructure associated with the Via Expresa Sur Project. This project involves the second stage expansion of the Via Expresa - Paseo de la Republica,between Republica de Panama Avenue and and Panamericana highway.  US$197 million  The contract gives the right of collection from users; however the Peruvian Government shall pay the difference when the operating revenue obtained is below US$18 million during the first two years and US$19.7 million from the third year to the fifteenth year of the effective period of the financing, with a ceiling of US$10 million. In June 2017, the contract was suspended temporarily for one year by agreement between the Concessionaire and the grantor. The suspension was extended until June 2020. 99.98% 2053 Bifurcated
 c)
Main joint operations
At December 31, 2019, the Group is a partner to 51 Joint Operations with third parties (51 at December 31, 2018 and 64 at December 31, 2017). The table below lists the Group’s major Joint Operations.
 
   
Percentage of interest
 
Joint operations
  
2017
  
2018
  
2019
 
Graña y Montero S.A.A.
    
- Concesionaria La Chira S.A.
   50%   50%   50% 
GyM S.A.
    
- Consorcio CDEM
   85%   85%   85% 
- Consorcio Huacho Pativilca
   67%   67%   67% 
- Consorcio GyM – CONCIVILES
   67%   67%   67% 
- Consorcio AMDP norte
   50%   50%   —   
- Consorcio Chicama - Ascope
   50%   50%   50% 
- Consorcio Constructor Alto Cayma
   50%   50%   50% 
- Consorcio Energía y Vapor
   50%   50%   50% 
- Consorcio Ermitaño
   50%   50%   50% 
- Consorcio GyM Sade Skanska
   50%   50%   50% 
- Consorcio
GYM-OSSA
   —     —     50% 
- Consorcio
GyM-Stracon
   —     50%   50% 
- Consorcio HV GyM
   50%   50%   50% 
- Consorcio La Chira
   50%   50%   50% 
- Consorcio Lima Actividades Comerciales Sur
   50%   50%   50% 
- Consorcio Lima Actividades Sur
   50%   50%   50% 
- Consorcio Menegua
   50%   50%   50% 
- Consorcio para la Atención y Mantenimiento de Ductos
   40%   40%   —   
- Consorcio Rio Mantaro
   50%   50%   50% 
- Consorcio Río Urubamba
   50%   50%   50% 
- Consorcio TNT Vial y Vives - DSD Chile LTDA
   50%   50%   50% 
- Constructora Incolur DSD Limitada
   50%   50%   50% 
- Consorcio Alto Cayma
   49%   49%   49% 
- Consorcio La Gloria
   49%   49%   49% 
- Consorcio Norte Pachacutec
   49%   49%   49% 
- Consorcio Italo Peruano
   48%   48%   48% 
- Consorcio Vial Quinua
   46%   46%   46% 
- Consorcio Constructor Ductos del Sur
   29%   29%   29% 
- Consorcio Constructor Chavimochic
   27%   27%   27% 
- Consorcio Vial ICAPAL
   10%   10%   10% 
GMP S.A.
    
- Consorcio Terminales
   50%   50%   50% 
- Terminales del Perú
   50%   50%   50% 
CONCAR S.A.
    
- Consorcio
Ancón-Pativilca
   67%   67%   67% 
- Consorcio Peruano de Conservación
   50%   50%   50% 
- Consorcio Manperán
   67%   67%   67% 
- Consorcio Vial Sierra
   50%   100%   50% 
- Consorcio Vial Ayahuaylas
   99%   99%   99% 
- Consorcio Vial Sullana
   99%   99%   99% 
- Consorcio Vial del Sur
   99%   99%   99% 
Viva GyM S.A.
    
- Consorcio Panorama
   35%   —     —   
GMI S.A.
    
- Consorcio Vial la Concordia
   88%   88%   88% 
- Consorcio
GMI-
Haskoningdhv
   —     70%   70% 
- Consorcio Supervisor Ilo
   55%   55%   55% 
- Consorcio
Poyry-GMI
   40%   40%   40% 
- Consorcio Internacional Supervisión Valle Sagrado
   33%   33%   33% 
- Consorcio Ecotec - GMI - PIM
   —     30%   30% 
- Consorcio Ribereño Chinchaycamac
   —     —     40% 
All the joint agreements listed above are operated in Peru, Chile and Colombia.
On November 2, 2019, the operation contract of Consorcio Terminales of the subsidiary GMP S.A., corresponding to the terminals of Pisco, Mollendo, Ilo, Cusco and Juliaca, was terminated, and the assets and operations were delivered to Petroperú. Currently, it is in the process of liquidating assets and liabilities.
The main activities of the joint operations correspond to:
 
Joint Operations in
  
Economic activity
Graña y Montero S.A.A.  Construction, operation and maintenance of La Chira wastewater treatment plant in the south of Lima. The project is aimed to solve Lima’s environmental problems caused by sewage discharged directly into the sea.
GyM S.A.  These joint operations were created exclusively 
for the
development of construction contracts.
GMP S.A.  Consorcio Terminales and Terminales del Peru provide services for receiving, storing, shipping and transporting liquid hydrocarbons, such as gasoline, jet fuel, diesel fuel and residual among others.
CONCAR S.A.  Concar’s joint operations provides rehabilitation service, routine and periodic maintenance of the road
,
and road conservation and preservation services.
GMI S.A.  Engineering consulting services in, study and project execution, project management and Works supervision.
The consolidated financial statements do not include any other type of entities in addition to those mentioned above, such as trust funds or special purpose entities.