Financial Risk Management (Tables)

12 Months Ended

Dec. 31, 2019

Schedule of Consolidated Statement of Financial Position

At December 31,

2018 and

2019, the consolidated statement of financial position includes the following:


	2018				2019
	S/(000)		USD(000)		S/(000)		USD(000)
Assets		2,273,132		674,753		2,859,324		862,021
Liabilities		2,042,176		604,383		1,751,479		528,031

Schedule of Foreign Currency Exchange Gains and Losses Exposure against US Dollar

The Group’s exchange gains and losses for the Peruvian Sol, the Chilean and Colombian Pesos exposure against the U.S. dollar was:


	2017			2018			2019
Gain		329,751			382,104			390,008
Loss		(323,927	)		(405,380	)		(422,578	)

Schedule of Assets and Liabilities Equivalent to Functional Currency

The consolidated statement of changes in equity comprises a foreign currency translation adjustment originated by its subsidiaries. The consolidated statement of financial position includes assets and liabilities in functional currency equivalent to (in thousands):


	2018				2019
	Assets		Liabilities		Assets		Liabilities
Chilean Pesos		48,129,848		49,728,313		19,915,617		39,193,917
Colombian Pesos		163,560,697		76,978,655		187,119,204		76,446,723

Schedule of Undiscounted Cash Flows of Financial Liabilities

The table below analyzes the Group’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.


	Less than 1 year		1-2 years		2-5 years		More than 5 years		Total
At December 31, 2018
Other financial liabilities (except for finance leases)		816,122		273,079		129,233		41,577		1,260,011
Finance leases		15,151		7,489		14,094		—		36,734
Bonds		111,080		153,287		355,667		1,174,404		1,794,438
Trade accounts payables (except non-financial liabilities)		980,723		—		—		—		980,723
Accounts payables to related parties		55,941		21,849		—		—		77,790
Other accounts payables (except non-financial liabilities)		116,806		17,777		338,627		—		473,210
Other non-financial liabilities		—		61		—		—		61

		2,095,823		473,542		837,621		1,215,981		4,622,967

	Less than 1 year		1-2 years		2-5 years		More t han 5 years		Total
At December 31, 2019
Other financial liabilities (except for finance leases and lease liability for right-of-use asset)		479,000		147,473		177,018		—		803,491
Finance leases		10,826		3,467		13,346		—		27,639
Lease liability for right-of-use asset		24,966		38,788		31,167		7,603		102,524
Bonds		115,690		157,516		358,461		1,077,960		1,709,627
Trade accounts payables (except non-financial liabilities)		966,620		—		—		—		966,620
Accounts payables to related parties		38,916		21,747		—		836		61,499
Other accounts payables (except non-financial liabilities)		200,098		2,505		194,908		—		397,511
Other non-financial liabilities		—		52		—		—		52
		1,836,116		371,548		774,900		1,086,399		4,068,963

Schedule of Information About Gearing Ratio

As of December 31, 2018, and 2019, the gearing ratio is presented below indicating the Group’s strategy to keep it in a range from 0.10 to 0.70.


	2018			2019
Total financial liabilities and bonds		2,139,714			1,723,108
Less: Cash and cash equivalents		(801,140	)		(948,978	)

Net debt		1,338,574			774,130
Total equity		2,489,931			1,876,085

Total capital		3,828,505			2,650,215

Gearing ratio		0.35			0.29

Schedule of Assets and Liabilities Measured at Fair Value

The table below shows the Group’s assets and liabilities measured at fair value on December 31, 2018, and 2019:


	Level 2
At December 31, 2018
Financial liabilities
Derivatives used for hedging		61
At December 31, 2019
Financial liabilities
Derivatives used for hedging		52

4.4	COVID-19 Pandemic

As a result of the outbreak of Coronavirus 2019 (COVID-19), the Group’s results of operations, financial positions and cash flows have been adversely affected as of the date of this report with potential impacts on subsequent periods, including but not limited to the significant decline in revenue and significant operating cash flow. The impacts may also include additional allowance for doubtful accounts and impairment to the Group’s long-term assets. Because of the significant uncertainties surrounding the COVID-19, the exact financial impact is unpredictable and will depend on future developments, including new information which may emerge concerning the duration of the lockdown which has been extended until June 30th for Perú, until September 18th for Chile and until August 31st for Colombia, the actions taken by authorities and other entities to contain the COVID-19 outbreak, among others, all of which are beyond the Group’s control. The Group will continue to closely monitor the impacts of COVID-19 through the course of the year 2020.

From mid-March until the end of May 2020, substantially all of our engineering and construction and real estate projects in Perú were mandatorily shut down, however, as part of the Government plan to activate some industries by stages, most of our projects of our engineering and construction and real estate segments are gradually resuming. In Colombia the projects under execution were declare as essential projects therefore they continued operating since the beginning of the lockdown. Finally our projects in Chile were shut down but only for few days, after which they resume operations. Our infrastructure operations, were declared essential businesses, therefore have continue operating, however, certain of our infrastructure businesses have been adversely affected, in particular, by the sharp decline in traffic volumes and oil and gas prices (also due to the dispute in March among OPEC member countries).

On the liquidity side, the Company has implemented a plan that includes several measures to reduce expenses and preserve cash in response to the ongoing COVID-19 pandemic, including the following: (i) developing a 12-week cash plan, project-by-project, to ensure that the Company will continue to meet its critical obligations during that period, which plan is monitored and updated weekly; (ii) preparing a cash plan for the remainder of the 2020 fiscal year, to identify in advance key liquidity issues that may arise; (iii) identifying and renegotiating certain of the company’s obligations with respect to its suppliers, banks and other third parties; (iv) identifying and reducing non-essential general expenses across the group; (v) reducing headcount, and temporarily reducing salaries of senior management, across the company’s three segments; and (vi) reducing capital expenditures across the company’s subsidiaries. In addition the Group is evaluating the selling of minor assets that will help finance any deficit during the year.