a50687377.htm

UN AUDITED

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

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES

UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012 AND 2013

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

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED STATEMENT OF FINANCIAL POSITION
UNAUDITED				LIABILITIES AND STOCKHOLDERS' EQUITY
ASSETS		At				At
		December	At June			December		At June
	Note	31, 2012	30, 2013		Note	31, 2012		30, 2013
		S/.000	S/.000			S/.000		S/.000
Current assets				Current liabilities
Cash and cash equivalents		780,114	418,903	Borrowings	11	452,819		469,341
Available-for-sale financial asset		5,005	6,063	Trade accounts payable		937,287		851,610
Trade accounts receivable		444,593	476,065	Accounts payable to related parties	8	42,734		47,394
Outstanding work in progress		525,251	864,821	Current taxes		158,834		103,257
Accounts receivable from related parties	8	49,761	88,871	Other accounts payable		1,015,129		969,946
Other accounts receivable		436,451	464,899	Other provisions	12	11,312		621
Inventories		747,416	764,904	Total current liabilities		2,618,115		2,442,169
Prepaid expenses		22,839	24,660
Total current assets		3,011,430	3,109,186	Non-current liabilities
				Borrowings	11	392,655		753,887
Non-current assets				Other accounts payable		52,776		129,849
Long-term trade accounts receivable		305,887	503,844	Other provisions	12	51,315		56,972
Other long-term accounts receivable		87,484	76,745	Derivative financial instruments		18,696		5,311
Investments in associates	9	37,446	72,328	Deferred income tax liability		82,179		101,854
Property investment		35,972	36,920	Total non-current liabilities		597,621		1,047,873
Property, plant and equipment	10	938,093	920,435	Total liabilities		3,215,736		3,490,042
Intangible assets	10	505,108	513,607
Derivative financial instruments		128	-	Equity	13
Deferred income tax asset		71,078	110,266	Capital		558,284		558,284
Total non-current assets		1,981,196	2,234,145	Legal reserve		107,011		111,657
				Other reserves		6,656		3,869
				Unrealized result		(3,716	)	6,591
				Retained earnings		723,972		754,632
				Equity attributable to controlling interest in the Company		1,392,207		1,435,033
				Non-controlling interest		384,683		418,256
				Total equity		1,776,890		1,853,289


		4,992,626	5,343,331			4,992,626		5,343,331

The accompanying notes on pages 6 to 22 are an integral part of the condensed interim consolidated financial statements.

- 1 -

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


GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED STATEMENT OF INCOME
UNAUDITED		For the six-month period
		ended
	Note	2012		2013
		S/.000		S/.000

Income from valuation of work		1,449,565		1,731,464
Income from services provided		724,920		738,924
Sale of goods and others		144,787		211,530
		2,319,272		2,681,918

Cost of works	14	(1,287,246	)	(1,477,914	)
Cost of services provided	14	(619,397	)	(608,316	)
Cost of goods and others sold	14	(62,023	)	(133,974	)
		(1,968,666	)	(2,220,204	)
Gross profits		350,606		461,714

Administrative expenses	14	(117,964	)	(169,776	)
Other income		17,970		15,022
Profit from the sale of investments				-
Other (losses) gains, net		539		(674	)
Operating profit		251,151		306,286

Financial expenses		(177,971	)	(300,022	)
Financial income		165,983		214,148
Interest in profit of associate
under the equity method of accounting		182		19,221
Profit before income tax		239,345		239,633
Income tax	15	(75,213	)	(79,206	)
Profit for the year		164,132		160,427


Other comprehensive income:
Cash flow hedge, net of taxes		603		3,364
Actuarial losses, net of taxes		(1,876	)	1,293
Translation adjustment		2,224		6,199
Total comprehensive income		951		10,856
Comprehensive income for the year		165,083		171,283

Profit attributable to:
Controlling interest in the Company		131,285		122,292
Non-controlling interest		32,847		38,135
		164,132		160,427
Comprehensive income attributable to:
Company controlling shareholders		132,172		132,599
Non-controlling interest		32,911		38,684
		165,083		171,283

Attributable profit		131,285		122,292

Weighted average number of shares in issue
at S/.1.00 each at June 30)		558,284,190		558,284,190


Basic and diluted earning per share (S/.)		0.235		0.219

The accompanying notes on pages 6 to 22 are an integral part of the condensed interim consolidated financial statements.

- 2 -

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES
CONDENSED INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
UNAUDITED

	For the six-month period
	ended June 30
	2012		2013
	S/.000		S/.000

Profit for the year	164,132		160,427

Comprehensive income:
Cash flow hedge, net of taxes	603		3,364
Actuarial losses, net of taxes	(1,876	)	1,293
Translation adjustment	2,224		6,199
Total comprehensive income	951		10,856
Comprehensive income for the year	165,083		171,283

Comprehensive income attributable to:
Company controlling shareholders	132,172		132,599
Non-controlling interest	32,911		38,684
	165,083		171,283

The accompanying notes on pages 6 to 22 are an integral part of the condensed interim consolidated financial statements.

- 3 -

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

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED STATEMENT OF CHANGES IN NET SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED JUNE 30, 2013 AND JUNE 30, 2012
UNAUDITED	Attributable to the Company's controlling shareholders
					Premium			Other
			Legal		for issue			comprehensive			Retained						Non-controlling
	Capital		reserve		of shares			income			earnings			Total			interest			Total
	S/.000		S/.000		S/.000			S/.000			S/.000			S/.000			S/.000			S/.000

Balances at January 1 , 2012		390,488		78,104		4,880			(310	)		715,860			1,189,022			264,064			1,453,086
Profit for the year		-		-		-			-			131,285			131,285			32,847			164,132
Cash flow hedge		-		-		-			573			-			573			30			603
Actuarial losses, net of taxes		-		-		-						(1,876	)		(1,876	)		-			(1,876	)
Translation adjustment		-		-		-			2,190			-			2,190			34			2,224
Comprehensive income for the year		-		-		-			2,763			129,409			132,172			32,911			165,083
Transactions with shareholders:
- Dividend distribution		-		-		-			-			(86,722	)		(86,722	)		(12,900	)		(99,622	)
- Legal Reserve				28,907								(28,907	)		-						-
- Contribuitions of non-controlling interest		-		-		-			-						-			11,131			11,131
- Effect of Stracon GyM consolidation		-		-		-			-			-			-			3,455			3,455
- Acquisition of Stracon G y M with contributions		-		-		-			-			-			-			9,947			9,947
- Capitalization		167,485		-		-			-			(167,485	)		-			-			-
- Sale and purchase of treasury shares		140		-		1,292			-			-			1,432			-			1,432
- Consolidation of subsidiary - LQS		-		-		-			-			-			-			10,604			10,604
- Other		171		-		(171	)		-			(584	)		(584	)		-			(584	)
Total transactions with shareholders		167,796		28,907		1,121			-			(283,698	)		(85,874	)		22,237			(63,637	)
Balances at June 30, 2012		558,284		107,011		6,001			2,453			561,571			1,235,320			319,212			1,554,532

Balance at January 1, 2013		558,284		107,011		6,656			(3,716	)		723,972			1,392,207			384,683			1,776,890
Net profit for the year												122,292			122,292			38,135			160,427
Cash flow hedge		-		-		-			3,196			-			3,196			168			3,364
Actuarial losses, net of taxes		-		-		-						970			970			323			1,293
Translation adjustment		-		-		-			6,141			-			6,141			58			6,199
Comprehensive income for the year		-		-		-			9,337			123,262			132,599			38,684			171,283
Transactions with shareholders:
Transfer to legal reserve		-		4,646		-			-			(4,646	)		-			-			-
- Dividend distribution		-		-		-			-			(86,986	)		(86,986	)		(10,438	)		(97,424	)
- Contribuitions of non-controlling interest		-		-		-			-			-			-			16,726			16,726
- Acquisition of non-controlling interest of GMD, VIVA and Concar				-		(2,787	)		-			-			(2,787	)		(4,548	)		(7,335	)
- Deconsolidation of subsidiary - LQS		-		-		-			-			-			-			(6,841	)		(6,841	)
- Other		-		-		-			-			-			-			(10	)		(10	)
Total transactions with shareholders		-		4,646		(2,787	)		-			(91,632	)		(89,773	)		(5,111	)		(94,884	)
Balances at June 30, 2013		558,284		111,657		3,869			5,621			755,602			1,435,033			418,256			1,853,289

The accompanying notes on pages 6 to 22 are an integral part of the condensed interim consolidated financial statements.

- 4 -

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

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS
UNAUDITED	For the six-month period
	ended June 30
	2012			2013
	S/.000			S/.000

CASH FLOWS OPERATING ACTIVITIES
Profit before taxes		239,345			239,633
Adjustment to net results not affecting cash flows
from operating activities
Depreciation		80,434			92,646
Amortization of other assets		32,371			44,893
Writte-off for obsolescence		-			1,534
Write-off of other provisions		(15,704	)		(5,529	)
Provision expenses		4,112			165
Share of the profit in associates
under the equity method		0			(19,221	)
Gains from sales of property, plant and equipment		(3,399	)		(961	)
Foreign exchange losses on operating activities		2,421			(4,772	)
Net changes in assets and liabilities:
Increase (decrease) in trade accounts receivable		(70,942	)		(380,217	)
Decrease in other accounts receivable		(236,058	)		(216,510	)
Increase (decrease) in accounts receivable from related parties		(59,909	)		(39,110	)
Decrease in inventories		(220,583	)		(20,939	)
(Decrease) increase in prepaid expenses and other assets		17,332			(1,978	)
(Decrease) increase in trade accounts payable		165,421			(78,861	)
Increase in other accounts payable		156,265			34,030
Increase (decrease) in other payables to related parties		(18,132	)		7,132
Decrease in current income tax		(162,488	)		(152,764	)
Payment for purchase of intangibles - Concessions		(16,581	)		(15,122	)
Increase in other provisions		-			(85	)
Net cash applied to operating activities		(106,094	)		(516,036	)

CASH FLOWS FROM INVESTING ACTIVITIES
Sale of property, plant and equipment		9,454			8,274
Dividends received		-			4,027
Payment for purchase of properties investment		(215	)		(1,727	)
Assets available for sale		342
Payment for purchase of intangibles		(6,789	)		(9,951	)
Payment for purchase of fixed assets		(142,349	)		(102,466	)
Net cash applied to investing activities		(139,557	)		(101,843	)

CASH FLOWS FROM FINANCING ACTIVITIES
Loans received		316,578			833,067
Amortization of loans received		(261,496	)		(465,490	)
Payment of interest		(14,109	)		(21,832	)
Dividends paid to non-controlling interest		(99,622	)		(97,424	)
Sale of interest in subsidiary in non-controlling interest		16,004			16,726
Acquisition of interest in subsidiary in non-controlling interest		-			(7,335	)
Capital contribution of non-controlling shareholders		6,983
Re-purchase of shares		1,432			-
Net cash provided to financing activities		(34,230	)		257,712
Net decrease in cash		(279,880	)		(360,167	)
Cash (outflows) inflows from consolidation		-			(5,816	)
Exchange losses on cash and cash equivalents		(2,421	)		4,772
Cash and cash equivalents at the beginning of the year		658,187			780,114
Cash and cash equivalents at the end of the year		375,886			418,903

Non-cash transactions:
Acquisition of assets under finance lease		36,014			32,009
Capitalization		167,485			0
Effect of Stracon GyM consolidation		24,994
Increase of participation in associate (Note 9)		0			1,491

The accompanying notes on pages 6 to 22 are an integral part of the condensed interim consolidated financial statements.

- 5 -

UN AUDITED

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

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2012 (UNAUDITED) AND 2013

1	GENERAL INFORMATION

The Company is the parent company of the Graña y Montero Group (hereinafter the Group) and its principal activity is the holding of investments in the different companies of the Group. Additionally, the Company provides services of general management, financial management, commercial management, legal advisory and human resources management to Group companies; it is also engaged in the leasing of offices to Group companies and third parties.

The Group is a conglomerate of companies with operations including different business activities, of which the most significant are engineering and construction, infrastructure (public concession operation), real estate businesses and technology services.

These condensed interim consolidated financial statements as of June 30, 2013 have been prepared and authorized for issuance by the Chief Financial Officer on July 30, 2013.

2	BASIS OF PREPARATION

These condensed interim consolidated financial statements for the six -month period ended June 30, 2013 have been prepared in accordance with (IAS 34) “Interim financial reporting”. The condensed interim consolidated financial statements should be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2012, which have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

3	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting policies used in the preparation of these interim condensed consolidated financial statements are consistent with those applied in the preparation of the year-end financial statements at December 31, 2012, except for income taxes, which for the interim period have been recognized applying the tax rate that would be applicable for 2013.

IFRS and amendments to IFRS applicable for the first time for the period covered in these interim financial statements. -

New IFRS or amendments to IFRS mandatory from January 1, 2013 have been considered by the Group in the preparation of these interim consolidated financial statements; however, they have not resulted in changes in the prior-year accounting policies. Major new IFRS or amendments to IFRS relevant to the Group activities are as follows:

●

IFRS 7, ‘Financial instruments: Disclosures’ as amended in October 2010. The IASB modified the disclosures required so that the users of the financial statements may assess the risk exposure related to financial asset transfers and the effect of these risk on the entity’s financial position. This standard did not result in significant changes in the disclosures in the interim consolidated financial statements.

●	IFRS 10, “Consolidated financial statements” – The application of this standard has not resulted in changes in the consolidation criteria applied by the Group.

- 6 -

UN AUDITED

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

●

IFRS 11, “Joint arrangements” – The application of this standard has not resulted in changes in the criteria applied by the Group in the recognition of interests in joint arrangements. Until 2012, the Group’s interest in these types of arrangements, mostly joint operations, were recognized as joint operations within the scope of IAS 31. As a result of the assessment of the assets and obligations for the liabilities arising from contracts, the Group has arrived at the conclusion that its interest in those contracts continue to be classified as joint operations. Therefore, the Group recognizes in its financial statements its share in the assets, liabilities, revenues and expenses of this type of contracts.

●	IFRS 12, “Disclosures of interests in other entities”. This standard did not result in significant changes in the disclosures in interim consolidated financial statements.

●

IFRS 13, ‘Fair value measurement’, aims to improve consistency and reduce complexity by providing a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across IFRSs. The requirements do not extend the use of fair value accounting but provide guidance on how it should be applied where its use is already required or permitted by other standards within IFRSs. See changes in disclosures in interim consolidated financial statements in note 4.3.

●

Amendment to IAS 1, ‘Presentation of financial statements’ relating to other comprehensive income. The major change resulting from this amendment is the requirement for entities to group the items of “other comprehensive income” (OCI) depending on whether they are reclassifiable or not to the statement of comprehensive income. See changes on disclosures in OCI.

●

IAS 19, ‘Employee benefits’ was amended in June 2011 by the IASB. The amendments eliminate the corridor approach and recognize financial expenses on a net basis. The adoption of this standard did not result in significant changes in the disclosures in interim consolidated financial statements nor have a material impact on the Group's financial position or performance.

●

IAS 28, ‘Investments in Associates and Joint Ventures’. It was amended in May 2011 by the IASB. The new standard includes guidelines to recognize joint ventures and associates under the equity method. The adoption of this standard did not result in significant changes in the disclosures in interim consolidated financial statements nor have a material impact on the Group's financial position or performance.

4	FINANCIAL RISK MANAGEMENT

4.1 Financial risk factors

The Group’s activities expose it to a variety of financial risks: market risk (including currency risk, price risk, fair value interest rate risk and cash flow interest rate risk), credit risk and liquidity risk.

The condensed interim consolidated financial statements do not include all financial risk management information and disclosures required in the annual financial statements; these should be read in conjunction with the Group’s annual financial statements as of December 31, 2012. There have been no changes since year-end in the risk management department of the Group or in any risk management policies.

4.1.1 Market risk

Compared to year end, no new material market risk hedging arrangements have occurred.

- 7 -

UN AUDITED

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

4.1.2 Credit risk

Compared to year end,the Group has no exposure to any new relevant credit risk.

4.1.3 Liquidity risk

Compared to year end, no major changes in undiscounted contractual cash flows have occurred, except for changes in the structure of the Group’s liabilities, resulting from an increase in the long-term debt relating to a syndicated loan which matures in 2018 (Note 11); the proceeds of this debt were used to repay a short-term loan and to finance investment activities of subsidiary GyM Ferrovías.

The following table categorizes the Group’s financial liabilities into relevant maturity groupings based on the remaining period from the date of the statement of financial position to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows:

	Less than 1		From 1 to 2		From 2 to 5		Over 5
	year		years		years		years		Total
	S/.000		S/.000		S/.000		S/.000		S/.000

As of December 31,2012
Borrowing (except for
finance leases) (*)		343,072		82,980		62,992		25,440		514,484
Finance leases (*)		124,709		103,373		130,246		22,119		380,447
Trade accounts payable		937,287		-		-		-		937,287
Other accounts payable		340,547		38,135		-		-		378,682
Accounts payable to
related parties		42,734		-		-		-		42,734
		1,788,349		224,488		193,238		47,559		2,253,634

As of June 30, 2013
Borrowing (except for
finance leases) (*)		362,083		302,038		250,793		-		914,914
Finance leases (*)		130,382		94,247		113,310		31,024		368,963
Trade accounts payable		851,610		-		-		-		851,610
Other accounts payable		238,581		20,085		3,933		21,749		284,348
Accounts payables to
related parties		47,394		-		-		-		47,394
		1,630,050		416,370		368,036		52,773		2,467,229

(*) Includes interest.

4.2 Capital management

The Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net debt is calculated as total borrowings (including current and non-current borrowings), less cash and cash equivalents. Total capital is calculated as total ‘equity’ as shown in the consolidated statement of financial position plus net debt.

- 8 -

UN AUDITED

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

As of December 31, 2012 and June 30, 2013 the gearing ratio was as follows:

	At December			At June
	31, 2012			30, 2013
	S/.000			S/.000

Total borrowings		845,474	)		1,223,228
Less: Cash and cash equivalents		(780,114	)		(418,903	)
Net debt		65,360			804,325
Total equity		1,776,890			1,853,289
Total capital		1,842,250			2,657,614

Gearing ratio		0.04			0.30

The gearing ratio is maintained within the limits set by Group Management, between 0.04 and 1.00. The increase in this ratio resulted from a slight increase in debt ratios and a decrease in cash and cash equivalent balances that were used in investments within the Group.

4.3 Fair value estimation

For the classification of the type of valuation used by the Group for its financial instruments at fair value, the following levels of measurement have been established:

-	Level 1: Measurement based on quoted prices in active markets for identical assets or liabilities.
-	Level 2: Measurement based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability (level 1), 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 Group).

The only financial instruments measured at fair value by the Group are interest rate swaps (variable to fixed), forward foreign exchange contracts (mostly euros and U.S. dollars) and available-for-sale investments. The measurement at fair value of these instruments corresponds to the characteristics of Level 2 and has been determined based on the present value of discounted future cash flows. During the six-month period ended June 30, 2013 there were no changes in the levels of measurement of financial instruments at fair value.

The carrying amount of cash and cash equivalents corresponds to its fair value. The Group considers that the carrying amount of short-term accounts receivable and payable approximates fair value. The fair value of financial liabilities has been estimated by discounting the future contractual cash flows at the interest rate currently prevailing in the market and which is available to the Group for similar financial instruments.

Fair value hierarchy -

The following table presents the Group’s financial assets and liabilities that are measured at fair value as of June 30, 2013.

- 9 -

UN AUDITED

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

	Level 1		Level 2		Level 3		Total
	S/.000		S/.000		S/.000		S/.000
Liabilities:
Derivative financial instruments - Cash flow hedging		-		5,311		-		5,311
Total liabilities		-		5,311		-		5,311

There were no transfers between Levels 1, 2 and 3 during the period.

Valuation techniques used to derive Level 2 fair values -

Level 2 hedging derivatives comprise forward foreign exchange contracts and interest rate swaps. These forward foreign exchange contracts have been fair valued using forward exchange rates that are quoted in an active market. Interest rate swaps are fair valued using forward interest rates extracted from observable yield curves. The effects of discounting are generally insignificant for Level 2 derivatives.

Group’s valuation processes -

The Corporate General Manager reviews the fair value of derivatives instruments by using the information provided by local financial institutions. Management performs this review at each reporting date. This information is reviewed at first by subsdiriaries’ management, and subsequently by the Corporate General Manager.

The Group has its financial instruments only in Level 2.

5	CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

The preparation of the condensed interim consolidated financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

In preparing these condensed interim consolidated financial statements, the significant judgements made by management in applying the Group’s accounting policies and the key sources of uncertainty were the same as those that applied to the consolidated financial statements for the year ended December 31, 2012, with the exception of changes in estimates that are required in determining the provision for income taxes for this interim period.

6	SEASONALITY OF OPERATIONS

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

7	SEGMENT REPORTING

Operating segments are reported consistent with the internal reports that are reviewed by the Corporate General Manager, who is the chief operating decision maker, responsible for allocating resources and evaluating the performance of each operating segment.

The Group's operating segments are assessed by the activity of the following business units: (i) engineering and construction, (ii) infrastructure, (iii) real estate, (iv) technical services and (v) the operation of the Parent Company (Holding).

- 10 -

UN AUDITED

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

As set forth under IFRS 8, reportable segments by significance of income are: ‘engineering and construction’ and ‘technical services’. However, the Group has voluntarily decided to report on all its operating segments as detailed in this Note.

Inter-segmental sales transactions are entered into at prices that are similar to those that would have been agreed to with unrelated third parties. Revenues from external customers reported to the Corporate General Manager are measured in a manner consistent with the basis of preparation of the financial statements.

Group sales and receivables are not concentrated on a few customers.

- 11 -

UN AUDITED

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

Assets and liabilities by operating segments

	Engineering		Infrastructure												Parent
	and						Mass		Water		Real		Technical		Company
	construction		Energy		Toll Roads		transit		treatment		estate		services		Operations		Eliminations			Consolidated
	S/.000		S/.000		S/.000		S/.000		S/.000		S/.000		S/.000		S/.000		S/.000			S/.000
As of December 31, 2012
Assets -
Cash and cash equivalents		423,332		30,650		90,644		28,312		68		73,004		85,287		48,491		326			780,114
Available-for-sale financial assets		-		-		-		-		-		-		-		5,005		-			5,005
Trade accounts receivable		181,107		26,922		6,560		20		43,692		19,336		166,895		61		-			444,593
Work in progress receivable		417,073		-		11,722		15,029		-		-		81,427		-		-			525,251
Accounts receivable from related parties		67,913		-		300		159		134		4,867		52,243		304,812		(380,667	)		49,761
Other accounts receivable		306,744		16,783		17,970		6,326		-		13,479		40,444		34,705		-			436,451
Inventories		145,301		8,287		-		6,419		-		523,722		64,048		1,392		(1,753	)		747,416
Prepaid expenses		5,882		1,309		583		7,220		-		1,589		5,149		1,107		-			22,839
Total current assets		1,547,352		83,951		127,779		63,485		43,894		635,997		495,493		395,573		(382,094	)		3,011,430

Accounts receivable - long term		-		-		-		305,887		-		-		-		-		-			305,887
Other accounts receivable - long term		11,256		14,696		13,833		11,206		3,720		6,803		24,274		1,696		-			87,484
Investments in associates		113,601		-		-		-		-		17,151		280		1,824		(895,132	)		37,446
Investment properties		-		-		-		-		-		35,972		-		-		-			35,972
Property, plant and equipment		539,018		205,853		2,034		3,365		-		4,470		109,259		76,317		(2,223	)		938,093
Intangible assets		197,205		95,283		146,186		7,830		2,406		772		24,461		14,855		16,110			505,108
Derivative financial instruments		-		-		-		-		-		128		-		-		-			128
Deferred income tax asset		14,751		-		6,184		8,287		-		6,110		34,190		-		1,556			71,078
Total non-current assets		875,831		315,832		168,237		336,575		6,126		71,406		192,186		894,692		(879,689	)		1,981,196
Total assets		2,423,183		399,783		296,016		400,060		50,020		707,403		687,679		1,290,265		(1,261,783	)		4,992,626

Liabilities-
Borrowings		119,960		16,216		14,226		-		8,271		43,216		96,015		154,915		-			452,819
Trade accounts payable		663,454		21,996		744		15,111		27		70,571		163,495		1,889		-			937,287
Accounts payable to related parties		42,973		1,610		13,970		290,601		15,763		9,231		46,376		14,189		(391,979	)		42,734
Current taxes		110,515		4,506		1,977		873		167		8,614		28,187		3,995		-			158,834
Other accounts payable		650,079		10,640		68,658		223		-		131,967		144,373		9,189		-			1,015,129
Other provisions		-		401		-		-		-		-		10,911		-		-			11,312
Total current liabilities		1,586,981		55,369		99,575		306,808		24,228		263,599		489,357		184,177		(391,979	)		2,618,115

Borrowings		180,857		97,777		48,513		-		-		49,657		12,427		3,424		-			392,655
Other accounts payable		-		14,640		-		-		-		12,858		24,681		597		-			52,776
Other provisions		16,133		7,558		-		-		-		-		27,624		-		-			51,315
Derivative financial instruments		-		5,999		-		12,697		-		-		-		-		-			18,696
Deferred income tax liability		63,858		2,563		24		-		722		68		9,634		5,310		-			82,179
Total non-current liabiilities		260,848		128,537		48,537		12,697		722		62,583		74,366		9,331		-			597,621
Total liabilities		1,847,829		183,906		148,112		319,505		24,950		326,182		563,723		193,508		(391,979	)		3,215,736
Equity attributable to controlling interest in the Company		472,097		192,411		90,124		60,416		12,535		147,054		103,015		1,086,774		(772,219	)		1,392,207
Non-controlling interest		103,257		23,466		57,780		20,139		12,535		234,167		20,941		9,983		(97,585	)		384,683
Total Liabilities and Equity		2,423,183		399,783		296,01		6 400,06		0 50,020		707,403		687,679		1,290,265		(1,261,783	)		4,992,626

- 12 -

UN AUDITED

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

Assets and liabilities by operating segments

			Infraestructure												Parent
	Engineering and						Mass		Water		Real		Technical		company
	Construction		Energy		Toll roads		Transit		treatment		Estate		Services		operation		Eliminations			Consolidated
	S/.000		S/.000		S/.000		S/.000		S/.000		S/.000		S/.000		S/.000		S/.000			S/.000
As of June 30, 2013
Assets -
Cash and cash equivalents		223,545		9,663		60,836		17,217		966		41,728		58,215		6,733		-			418,903
Available-for-sale financial assets		-		1,058		-		-		-		-		-		5,005		-			6,063
Trade accounts receivable		257,059		36,150		7,747		-		68,724		20,804		85,527		54		-			476,065
Work in progress receivable		693,132		-		4,706		33,602		-		-		133,381		-		-			864,821
Accounts receivable from related parties		92,122		566		50,838		135		-		894		70,644		588,110		(714,438	)		88,871
Other accounts receivable		290,899		18,749		11,164		14,701		5,232		13,571		79,958		33,449		(2,824	)		464,899
Inventories		101,261		8,128		-		8,873		-		563,442		85,566		273		(2,639	)		764,904
Prepaid expenses		6,755		2,514		1,186		4,477		40		2,780		4,853		2,055		-			24,660
Total current assets		1,664,773		76,828		136,477		79,005		74,962		643,219		518,144		635,679		(719,901	)		3,109,186

Accounts receivable - long term		-		-		-		503,844		-		-		-		-		-			503,844
Other accounts receivable - long term		-		14,343		23,734		15,892		2,714		9,855		8,057		2,150		-			76,745
Investments in associates		130,763		6,482		-		-		-		18,714		10,342		783,055		(877,028	)		72,328
Investment properties		-		-		-		-		-		36,920		-		-		-			36,920
Property, plant and equipment		524,206		185,658		1,830		4,541		-		5,435		112,904		88,086		(2,225	)		920,435
Intangible assets		196,327		103,798		148,411		8,703		2,355		830		21,616		15,335		16,232			513,607
Derivative financial instruments		-		-		-		-		-		-		-		-		-			-
Deferred income tax asset		40,870		-		5,215		17,110		-		6,172		38,810		-		2,089			110,266
Total non-current assets		892,166		310,281		179,190		550,090		5,069		77,926		191,729		888,626		(860,932	)		2,234,145
Total assets		2,556,939		387,109		315,667		629,095		80,031		721,145		709,873		1,524,305		(1,580,833	)		5,343,331

Liabilities -
Borrowings		160,741		20,395		19,801		-		39,791		75,700		94,932		57,981		-			469,341
Trade accounts payable		639,032		21,267		722		14,795		1,489		15,605		154,277		4,423		-			851,610
Accounts payable to related parties		44,285		1,269		33,150		553,907		11,728		10,8745		8,405		48,214		(714,438	)		47,394
Current taxes		70,192		1,683		1,423		134		155		8,251		20,075		1,344		-			103,257
Other accounts payable		719,996		7,236		61,211		301		-		93,904		77,547		9,751		-			969,946
Other provisions		-		401		-		-		-		-		220		-		-			621
Total current liabilities		1,634,246		52,251		116,307		569,137		53,163		204,334		405,456		121,713		(714,438	)		2,442,169

Borrowings		165,887		91,502		43,436		-		-		64,022		31,662		357,378		-			753,887
Other accounts payable		-		-		459		-		-		33,195		95,598		597		-			129,849
Other provisions		16,542		7,638		-		-		-		-		32,792		-		-			56,972
Derivative financial instruments		-		4,159		-		221		-		931		-		-		-			5,311
Deferred income tax liability		83,091		1,810		-		-		706		2,214		8,062		5,971		-			101,854
Total current liabilities		265,520		105,109		43,895		221		706		100,362		168,114		363,946		-			1,047,873
Total liabilities		1,899,766		157,360		160,202		569,358		53,869		304,696		573,570		485,659		(714,438	)		3,490,042
Equity attributable to
controlling interest in the company
		545,070		213,390		92,394		44,803		13,081		150,118		113,525		1,028,785		(766,133	)		1,435,033
Non-controlling interest		112,103		16,359		63,071		14,934		13,081		266,331		22,778		9,861		(100,262	)		418,256
Total liabilities and equity		2,556,939		387,109		315,667		629,095		80,031		721,145		709,873		1,524,305		(1,580,833	)		5,343,331

- 13 -

UN AUDITED

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

Operating segment performance

	Engineering			Infrastructure																		Parent
	and									Mass			Water			Real			Technical			Company
	construction			Energy			Toll Roads			transit			Treatment			state			services			Operations			Eliminations			Consolidated
	S/.000			S/.000			S/.000			S/.000			S/.000			S/.000			S/.000			S/.000			S/.000			S/.000

For the tree-month period ended
Jun 30, 2012 -

Revenues		1,533,357			140,721			56,694			34,393			20,841			92,135			510,591			22,714			(92,174	)		2,319,272
Gross profit		174,966			56,958			23,095			(1,492	)		7,687			56,086			61,468			(1,879	)		(26,283	)		350,606
Administrative expenses		(66,051	)		(6,872	)		(3,368	)		(4,138	)		(1,303	)		(3,423	)		(55,097	)		(2,787	)		25,075			(117,964	)
Other income (expenses)		302			(913	)		30			(4	)		-			(3,670	)		16,159			6,066			-			17,970
Profit from the sale of invesments		-			-			-			-			-			-			-			-			-			-
Other (losses) gains, net		-			539			-			-			-			-			-			-			-			539
Profit before interests
and taxes (EBIT)		109,217			49,712			19,757			(5,634	)		6,384			48,993			22,530			1,400			(1,208	)		251,151
Financial expenses		(118,070	)		(12,109	)		(9,359	)		(6,889	)		(4,612	)		(6,686	)		(14,199	)		(6,047	)		-			(177,971	)
Financial income		120,411			10,435			5,690			4,752			94			5,351			12,638			6,898			(286	)		165,983
Share of the profit or loss
in associates under the equity
method of accounting		5,538			-			-			-			-			-			-			167,435			(172,791	)		182
Profit before
income tax (EBT)		117,096			48,038			16.088			(7,771	)		1,866			47,658			20,969			169,686			(174,285	)		239,345
Income tax		(37,270	)		(14,631	)		(3,927	)		2,323			(560	)		(14,577	)		(6,462	)		(452	)		343			(75,213	)
Net profit for the period		79,826			33,407			12,161			(5,448	)		1,306			33,081			14,507			169,234			(173,942	)		164,132
Profit attributable to:
Controlling interest in the
Group		77,044			29,970			5,986			(4,086	)		653			8,418			12,966			168,738			(168,404	)		131,285
Non-controlling interest		2,782			3,437			6,175			(1,362	)		653			24,663			1,541			496			(5,538	)		32,847
Net Profit for the period		79,826			33,407			12,161			(5,448	)		1,306			33,081			14,507			169,234			(173,942	)		164,132

- 14 -

UN AUDITED

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

Operating segment performance

	Engineering			Infrastructure																		Parent
	and									Mass			Water			Real			Technical			Company
	construction			Energy			Toll Roads			transit			treatment			estate			services			Operations			Eliminations			Consolidated
	S/.000			S/.000			S/.000			S/.000			S/.000			S/.000			S/.000			S/.000			S/.000			S/.000

For the three-month period ended
June 30, 2013 -
Revenue		1,818,221			127,560			71,854			44,937			26,811			174,740			495,635			26,143			(103,983	)		2,681,918
Gross profit		261,062			42,928			27,753			1,024			3,471			66,009			83,955			(3,015	)		(21,473	)		461,714
Administrative expenses		(101,514	)		(7,602	)		(3,030	)		(3,862	)		(173	)		(9,064	)		(71,199	)		(4,463	)		31,131			(169,776	)
Other income (expenses)		7,529			93			287			(131	)		(3	)		(468	)		12,571			(1,591	)		(3,265	)		15,022
Profit from the sale of invesments		-			-			-			-			-			-			-			-			-			-
Other (losses) gains, net		-			210			-			114			-			(998	)		-			-			-			(674	)
Profit before interests
and taxes (EBIT)		167,077			35,629			25,010			(2,855	)		3,295			55,479			25,327			(9,069	)		6,393			306,286
Financial expenses		(168,751	)		(16,593	)		(13,439	)		(35,810	)		(1,745	)		(16,074	)		(22,933	)		(26,459	)		1,782			(300,022	)
Financial income		147,167			6,912			10,866			9,025			11			5,899			15,525			30,870			(12,127	)		214,148
Share of the profit or loss
in associates under the equity
method of accounting		24,534			359			-			-			-			72			474			37,078			(43,296	)		19,221
Profit before income tax (EBT)		170,027			26,307			22,437			(29,640	)		1,561			45,376			18,393			32,420			(47,248	)		239,633
Income tax		(54,764	)		(9,281	)		(6,614	)		8,822			(470	)		(12,627	)		(4,584	)		(661	)		973			(79,206	)
Net profit for the period		115,263			17,026			15,823			(20,818	)		1,091			32,749			13,809			31,759			(46,275	)		160,427

Profit attributable to:
Controlling interest in the
Group		95,198			16,240			10,529			(15,614	)		546			11,188			11,737			31,879			(39,411	)		122,292
Non-controlling interest		20,065			786			5,294			(5,204	)		545			21,561			2,072			(120	)		(6,864	)		38,135
		115,263			17,026			15,823			(20,818	)		1,091			32,749			13,809			31,759			(46,275	)		160,427

- 15 -

UN AUDITED

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

No major changes occurred in total assets as compared to the amount stated in the year-end financial statements.

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

8	TRANSACTIONS WITH RELATED PARTIES

a) Transactions with related parties -

Major transactions between the Group and its related parties included in the interim consolidated financial statements are summarized as follows:

	From the six-month
	period ended June 30
	2012		2013
	S/.000		S/.000
Revenue from sale of goods and services:
- Associates		-		1,983
- Joint operations		44,620		95,013
		44,620		96,996

Inter-company services were agreed upon under market terms as if they had been agreed to with third parties.

b) Key management compensation -

Key management includes directors (executives and non-executives) and members of the Executive Committee. The compensation paid or payable to key management in the first semester of 2013 amounted to S/.18.0 million (S/.16.2 million at June 30, 2012).

c) Balances of transactions with related parties -

	At December 31				At June 30,
	2012				2013
	Receivable		Payable		Receivable		Payable
	S/.000		S/.000		S/.000		S/.000

Associates:
Servicios SEC SA		-		-		5,553		-
Proyectos Inmobiliarios Consultores (PICSA)		223		-		241		194
JV Panama		-		-		768		-
Sierra Morena		-		243		-		-
		223		243		6,562		194

- 16 -

UN AUDITED

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

	At December 31				At June 30,
	2013				2013
	Receivable		Payable		Receivable		Payable
	S/.000		S/.000		S/.000		S/.000
Joint operations:

Consorcio GyM Conciviles		2,197		2,426		15,185		-
Consorcio Río Mantaro		8,974		-		8,934
Consorcio Vial Sur		1,622		-		8,598		8,702
Consorcio Grupo 12		8,699				7,381		1,482
Consorcio La Chira		-		7,868		-		11,713
Consorcio Brocal Pasco		4,711		-		5,284		-
Consorcio Tren Eléctrico		303		-		4,610		-
Consorcion Peruano de Conservacion		-		-		4,093		-
Consorcio La Gloria		3,430		3,443		3,926		3,707
Consorcio Ríos Pallca		-		-		3,298		-
Consorcio Tiwu		963		1,716		1,792		994
Consorcio Río Urubamba		1,790		-		1,770		-

Consorcio Vial Sullana		-		-		1,731		1,224
Consorcio Atocongo		1,650		-		1,650		-
Consorcio Lima Activ Comerc		-		-		1,579
Consorcio Constructor Alto Cayma		1,533		-		1,493		-
Consorcio Vial Ipacal		694		700		1,368		1,765
Consorcio Toromocho		1,819		3,432		1,076		-
Consorcio Terminales		628		-		854		-
Consorcio Lima		1,232		-		854		-
Consorcio Norte Pachacutec		-		-		688		847
Consorcio Vial Quinua		561		4,422		488		1,782
Consorcio Ancon Pativilca		-		1,054		-		1,314
Consorcio Alto Cayma		-		-		-		902
Consorcio Vial Ayahuaylas		-		-		431		-
Consorcio La Zanja		309		349		300		-
Consorcio Marcona		1,600		2,168		257		825
Consorcio Transmantaro		-		-		-		698
Other smaller		6,515		4,274		4,613		937
		49,230		31,852		82,253		36,892


Other related parties:
Besco		-		2,155		56		2,809
Ferrovias Argentina		-		7,118				7,499
El Cóndor Combustibles		-		1,366		-		-
Other smaller		308		-		-		-
		49,761		42,734		88,871		47,394

Accounts receivable and payable are of current maturity and have no specific guarantees.

Accounts receivable from related parties mainly arise from sales transactions for goods and services with a maturity period of 60 days. These balances are non interest-bearing because they have short-term maturities and do not require a provision for impairment.

Accounts payable to related parties mainly arise from transactions to provide services of engineering, construction, maintenance and others and have a maturity period of 60 days. Such accounts are not interest bearing because they are short-term.

- 17 -

UN AUDITED

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

9	INVESTMENTS IN ASSOCIATES

As of june 30, 2013, associates in which the Group has significant influence are substantially the same as those existing as of December 31, 2012.

In 2013, Logística de Químicos del Sur S.A.C. (hereinafter LQS) and Sistemas SEC SA (hereinafter SEC) was de-consolidated from the Group and is recorded as an equity method investment as of June 30, 2013. The effect of this transaction on total assets and total shareholders´equity is not material to the financial statements for any periods presented.

The movement of our investments in associates for the six-month period ended June 30, 2013 and the year ended December 31, 2012 is as follows:

	At December			At June
	31, 2012			30, 2013
	S/.000			S/.000

Beginning balance		25,953			37,446
Acquisition and/or contributions received		15,128			1,491
Share of the profit and loss in associates
under the equity method of accounting		604			19,221
Dividends received		(2,057	)		(4,027	)
LQS Investment		-			7,409
SEC Investment					9,864
Other		(2,182	)		924
		37,446			72,328

10	PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS

The movement in property, plant and equipment and intangible assets accounts was as follows

	Property,
	plant and			Intangible
	equipment			assets
	S/.000			S/.000

For the six-month period ended
June 30, 2012
At January 1, 2012		686,913			317,797
Additions		178,363			36,735
Acquisition of subsidiary - net		71,768			9,976
Transfers, disposals and adjustments		(12,435	)		(3,202	)
Deductions for sale of assets		(6,055	)		-
Depreciation, amortization and impairment charges		(79,773	)		(32,371	)
Net cost at June 30, 2012		838,781			328,935

For the six-month period ended
June 30, 2013
At January 1, 2013		938,093			505,108
Additions		134,476			25,073
Transfers, disposals and adjustments		(52,953	)		28,319
Deductions for sale of assets		(7,313	)		-
Depreciation, amortization and impairment charges		(91,868	)		(44,893	)
Net cost at June 30, 2013		920,43			5 513,607

- 18 -

UN AUDITED

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

Additions to property, plant and equipment comprise of acquisition of plant and equipment intended for the Group’s operations.

The 2012 adjustment to Property, plant and equipment and Intangible assets related to the acquisition of subsidiary relates to the acquisition of subsidiary Stracon GyM S.A. This transaction is described in detail in the annual consolidated financial statements as of December 31, 2012.

Goodwill -

Management reviews the results of its business operations based on the type of economic activity carried out. The economic activities that have given rise to goodwill for the Group were construction, electro-mechanical, engineering services and sale of IT equipment and services.

Goodwill by cash-generating units as of June 30, 2013 is broken down as follows:

	S/.000

Construction - Engineering		55,624
Construction - Mining services		13,366
Construction - Electromechanical		20,737
Information goods and services		4,172
		93,899

Management has tested impairment of its cash-generating units to which goodwill is allocated at June 30, 2013 applying criteria similar to those performed as of December 31, 2012. As a result of this evaluation, no impairment adjustments were considered necessary.

11	BORROWINGS

This item comprises:

	Total				Current				Non-current
	At		At		At		At		At		At
	December		June		December		June		December		June
	31, 2012		30, 2013		31, 2012		30, 2013		31, 2012		30, 2013
	S/.000		S/.000		S/.000		S/.000		S/.000		S/.000

Bank loans		501,692		891,047		337,196		352,844		164,496		538,203
Leases		343,782		332,181		115,623		116,497		228,159		215,684
		845,474		1,223,228		452,819		469,341		392,655		753,887

a) Bank loans obtained in 2013 -

On February 27, 2013, the Company entered into a syndicated loan agreement for up to a maximum amount of US$150 million (S/.417.0 million) with twelve financial institutions (ten of them foreign financial institutions).

As of June 30, 2013, the amount disbursed under the syndicated loan amounted to US$150 million (equivalent of S/.417.0 million). The funds obtained have been used for, among other corporate purposes, paying off a short-term loan of US$60 million (equivalent of S/.155.3 million) granted by BBVA Continental and providing working capital to its subsidiary GyM Ferrovías S.A. The syndicated loan will be paid in seventeen quarterly installments starting May 2014 until February 2018 and bears an annual interest of LIBOR (3 months) + 4.25%. This loan is fully and unconditional guaranteed by four of the Company's subsidiaries: GyM S.A., Graña y Montero Petrolera S.A., Concar S.A. and Viva GyM S.A. (the guarantors).

- 19 -

UN AUDITED

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

Material covenants the Group has to meet under this loan are assessed at each calendar quarter-end and include the following:

● The Coverage Ratio of adjusted consolidated debt of the company for the four quarters preceding the quarter of evaluation must be less than 3.00:1.00.

● The Coverage Ratio of adjusted consolidated debt of the guarantors of the four quarters preceding the quarter of evaluation must be less than 2.50:1.00 and.

● The consolidated net assets of the company at the close of each quarter must be equal or higher than that reported at September 30,2012 .

As of June 30, 2013, the Group was in compliance with the covenants required by the syndicated loan.

b) Fair value of borrowings -

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

	Carrying amounts				Fair value
	At December		At June		At December		At June
	31, 2012		30, 2013		31, 2012		30, 2013
	S/.000		S/.000		S/.000		S/.000

Loans from multilateral organizations		47,815		514,64		550,567		509,860
Other loans		797,659		708,583		828,208		699,630
		845,474		1,223,228		878,775		1,209,490

Fair values are based on the cash flows discounted by using borrowing rates ranging from 4.94% to 7.70%. It should be noted that the interest rate used are those applicable and negotiated by each Company.

12	OTHER PROVISIONS

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

	At December		At June
	31, 2012		30, 2013
	S/.000		S/.000

Current portion		11,312		621
Non-current portion		51,315		56,972
		62,627		57,593

The movement of this item for the six-month period ended June 30, 2012 and 2013 is as follows:


						Provisions			Provisions
	Legal		Contingent			for tax and			for oil well
	claims		liabilities			legal actions			closure		Total
	S/.000		S/.000			S/.000			S/.000		S/.000
For the six-month period
ended June 30, 2012 -
At January 1, 2012		6,702		24,466			102,776			-		133,944
Additions		4,112		-			-			-		4,112
Reclassifications		-		(24,466	)		-			-		(24,466	)
Adjustment							4,970					4,970
Write-offs		-		-			(15,704	)		-		(15,704	)
At June 30, 2012		10,814		-			92,042			-		102,856

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UN AUDITED

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

					Provisions			Provisions
	Legal		Contingent		for tax and			for oil well
	Claims		liabilities		legal actions			closure			Total
	S/.000		S/.000		S/.000			S/.000			S/.000

For the six-month period
ended June 30, 2013 -
At January 1, 2013		11,380		11,130		35,220			(4,897			62,627
Additions		165		-		-			-			165	)
Adjustment		6		409		-			-			415415
Disposals		-		-		(5,529	)		(85	)		(5,614	)
At June 30, 2013		11,551		11,539		29,691			4,812			57,593

As of January 1, 2012, contingent liabilities were maintained with CAM Chile and affiliates for services to be billed of S/.12.9 million and statutory bonuses and other worker benefits amounting to S/.11.5 million, which in the first quarter of 2012 became executable, and therefore, they were reclassified to other accounts payable.

Write-offs for the six-month period ended June 30, 2012 mainly consists of write-offs of provisions recognized in conjunction with the purchase price allocation related to the 2011 acquisition of CAM Chile and affiliates, since these contingencies expired over the period.

CAPITAL

As of June 30, 2013 and December 31, 2012, the authorized, subscribed and paid-in capital, according to the Company’s bylaws as amended, is represented by 558,284,190 common shares at S/.1.00 par value each.

At the General Shareholders’ Meeting held on March 30, 2012, the decision was made to capitalize retained earnings and as a result capital increased from S/.390,798,933 to S/.558,284,190. As a consequence of this transaction the nominal value of shares increased from S/.0.7 to S/.1.00 per share.

14	EXPENSES BY NATURE

This item comprises:

			Adminis-
	Cost of		trative-
	works		expenses		Total
	S/.000		S/.000		S/.000

For the six-month period ended
June 30, 2012:
Purchase of goods		68,207		-		68,207
Personnel charges		527,975		68,405		596,380
Services provided by third-parties		632,286		1,976		634,262
Taxes		3,307		318		3,625
Other management charges		354,130		36,813		390,943
Depreciation		74,876		5,558		80,434
Amortization		27,545		4,826		32,371
Inventory variance		280,340		68		280,408
		1,968,666		117,964		2,086,630

- 21 -

UN AUDITED

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

			Adminis-
	Cost of		trative-
	works		expenses		Total
	S/.000		S/.000		S/.000

For the six-month period ended
June 30, 2013:
Purchase of goods		429,565		-		429,565
Personnel charges		641,419		98,094		739,513
Services provided by third-parties		592,946		37,836		630,782
Taxes		6,420		372		6,792
Other management charges		304,550		23,082		327,632
Depreciation		85,835		6,812		92,647
Amortization		41,417		3,476		44,893
Inventory variance		118,052		104		118,156
		2,220,204		169,776		2,389,980

15	INCOME TAX EXPENSES

Income tax expense is recognised based on management’s estimate of the weighted average annual income tax rate expected for the full financial year. The expected estimated average annual tax rate used for the year to June 30, 2013 is 33.05% (31.42% for the six-month period ended June 30, 2012).

16	CONTINGENCIES, COMMITMENTS AND GUARANTEES

As of June 30, 2013, the Group’s contingencies show no variations with respect to the disclosures in the financial statement for the year ended December 31, 2012. As of June 30, 2013, totaled contingencies amounted to S/.29.8 million, The commitments and guarantees as of June 30, 2013 amount to US$142.2 milion and S/.42.9 milion.

DIVIDENDS

Dividends from the year ended December 31, 2012, of S/.0.156 per share totaling S/.86,986,244 , were approved at the General Shareholders’ meeting held on March 26, 2013. The interim financial statements do reflect dividends payable as of June 30, 2013.

Dividends from the year ended December 31, 2011, of S/.0.155 per share totaling S/.86,722,434, were approved at the General Shareholders’ meeting held on March 30, 2012. The interim financial statements do reflect dividends payable as of June 30, 2012.

For the six-month period ended June 30, 2013, the Group paid dividends on its subsidiaries to its non-controlling entities for S/.10.4 million (S/.12.9 million for the same period of 2012).

18	EVENTS AFTER THE DATE OF THE STATEMENT OF FINANCIAL POSITION

In exercise of the power delegated by th General Meeting of Shareholders at a meeting held on May 30, 2013 the Board approved the issuance of common stock through a public offering of “American Depositary Shares” (ADSs) registered with the Securities and Exchange Commission of the united States (SEC).

As part of that agreement, the Company will issue in the month of July 97,674,420 new common shares, equivalent to 19,534,884 ADSs with a unit price of U.S. $21.13 per ADS (approximately S/.11.75 per share). The total of the issued common shares are represented by 19,534,884 ADSs in the New York Stock Exchange and 558,284 in the Lima Stock Exchange.

- 22 -