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 August 2020

 Commission File Number 001-35991

GRAÑA Y MONTERO 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.

August 3, 2020

Sincerely yours,

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

GRAÑA Y MONTERO S.A.A.

By: /s/ LUIS FRANCISCO DIAZ OLIVERO
Name: Luis Francisco Diaz Olivero
Title: Chief Executive Officer
Date: August 3, 2020

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTSAT

DECEMBER 31, 2019 (AUDITED) AND JUNE 30 2020 (UNAUDITED)

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTSAT DECEMBER 31, 2019 (AUDITED) AND JUNE 30, 2020 (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

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(All amounts are expressed in thousands of S/ unless otherwise stated)
ASSETS						LIABILITIES AND EQUITY
		As at		As at				As at			As at
		December 31,		June 30,				December 31,			June 30,
	Note	2019		2020			Note	2019			2020
Current assets						Current liabilities
Cash and cash equivalents	8		948,978		946,311	Borrowings	15		454,260			359,809
Trade accounts receivables, net	9		821,737		466,137	Bonds	16		44,737			55,253
Work in progress, net	10		49,457		106,535	Trade accounts payable	17		1,136,121			970,602
Accounts receivable from related parties	11		36,658		42,250	Accounts payable to related parties	11		38,916			52,323
Other accounts receivable	12		444,500		428,135	Current income tax			47,999			28,018
Inventories, net			552,573		614,411	Other accounts payable	18		635,305			740,834
Prepaid expenses			11,348		18,910	Provisions	19		113,483			111,320
			2,865,251		2,622,689	Total current liabilities			2,470,821			2,318,159
Non-current assets as held for sale			205,418		172,424	Non-current liabilities as held for sale			210,025			173,086
Total current assets			3,070,669		2,795,113	Total current liabilities			2,680,846			2,491,245
Non-current assets						Non-current liabilities
Trade accounts receivable, net	9		753,202		765,103	Borrowings	15		344,806			415,825
Work in progress, net	10		23,117		36,781	Bonds	16		879,305			889,296
Accounts receivable from related parties	11		574,723		603,110	Trade accounts payable	17		-			1,667
Prepaid expenses			27,934		27,436	Other accounts payable	18		273,101			251,437
Other accounts receivable	12		272,541		280,526	Accounts payable to related parties	11		22,583			23,006
Investments in associates and joint ventures	13		37,035		38,544	Provisions	19		214,952			227,069
Investment property			28,326		27,040	Derivative financial instruments			52			-
Property, plant and equipment, net	14		443,870		408,390	Deferred income tax liability			112,734			97,802
Intangible assets, net	14		853,315		813,749	Total non-current liabilities			1,847,533			1,906,102
Right-of-use assets, net	14		78,813		66,617	Total liabilities			4,528,379			4,397,347
Deferred income tax asset			240,919		253,043
Total non-current assets			3,333,795		3,320,339	Equity
						Capital	20		871,918			871,918
						Legal reserve			132,011			132,011
						Voluntary reserve			29,974			29,974
						Share Premium			1,132,179			1,132,179
						Other reserves			(177,506	)		(188,502
						Retained earnings			(510,766	)		(580,561
						Equity attributable to controlling interest in the Company			1,477,810			1,397,019
						Non-controlling interest			398,275			321,086
						Total equity			1,876,085			1,718,105
Total assets			6,404,464		6,115,452	Total liabilities and equity			6,404,464			6,115,452

The accompanying notes on pages 6 to 38 are an integral part of the consolidated financial statements.

- 1 -

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(All amounts are expressed in thousands of S/ unless otherwise stated)
		For the period
		ended June 30,
	Note	2019			2020
Revenues from construction activities			927,841			803,701
Revenues from services provided			482,089			425,749
Revenue from real estate and sale of goods			219,052			135,577
			1,628,982			1,365,027
Cost of construction activities			(859,651	)		(784,176	)
Cost of services provided			(374,206	)		(379,278	)
Cost of real estate and  sale of goods			(168,788	)		(107,870	)
	21		(1,402,645	)		(1,271,324	)
Gross profit			226,337			93,703
Administrative expenses	21		(94,840	)		(72,275	)
Other income and expenses	22		46,183			(8,116	)
Operating profit			177,680			13,312
Financial expenses			(117,720	)		(74,208	)
Financial income			44,389			6,650
Share of the profit or loss of associates and joint ventures accounted for using the equity method	13		(1,757	)		1,519
Profit (loss) before income tax			102,592			(52,727	)
Income tax expense			(54,804	)		(8,983	)
Profit (loss) from continuing operations			47,788			(61,710	)
Loss from discontinued operations			(11,925	)		(8,916	)
Profit (loss) for the period			35,863			(70,626	)
Profit (loss) attributable to:
Owners of the Company			27,040			(69,795	)
Non-controlling interest			8,823			(831	)
			35,863			(70,626	)
Earnings (loss) per share attributable to owners of the
Company during the period	26		0.035			(0.080	)
Earnings (loss) per share from continuing operations
attributable to owners of the Company during the period	26		0.057			(0.070	)

The accompanying notes on pages 6 to 38 are an integral part of the consolidated financial statements.

- 2 -

GRAÑA Y MONTERO 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 June 30,
	2019			2020
Profit (loss) for the period		35,863			(70,626	)
Other comprehensive income:
Items that may be subsequently  reclassified to profit or loss
Cash flow hedge, net of tax		(32	)		(67	)
Foreign currency translation adjustment, net of tax		(4,694	)		(15,238	)
Exchange difference from net investment in a foreign operation, net of tax		(13	)		(127	)
Other comprehensive income for the period, net of tax		(4,739	)		(15,432	)
Total comprehensive income for the period		31,124			(86,058	)
Comprehensive income attributable to:
Owners of  the Company		25,033			(80,791	)
Non-controlling interest		6,091			(5,267	)
		31,124			(86,058	)
Comprehensive income for the period attributable to owners of the Company:
Continuing operations		36,451			(71,450	)
Discontinued operations		(11,418	)		(9,341	)
		25,033			(80,791	)

The accompanying notes on pages 6 to 38 are an integral part of the consolidated financial statements.

- 3 -

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED JUNE 30, 2019 AND 2020
(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, 2019		729,434		729,434		132,011		29,974		992,144		(170,620	)		375,417			2,088,360			401,571			2,489,931
Profit for the period		-		-		-		-		-		-			27,040			27,040			8,823			35,863
Cash flow hedge		-		-		-		-		-		(30	)		-			(30	)		(2	)		(32	)
Foreign currency translation adjustment		-		-		-		-		-		(1,964	)		-			(1,964	)		(2,730	)		(4,694	)
Exchange difference from net investment in a foreign operation		-		-		-		-		-		(13	)		-			(13	)		-			(13	)
Comprehensive income of the period		-		-		-		-		-		(2,007	)		27,040			25,033			6,091			31,124
Transactions with shareholders:
- Dividend distribution		-		-		-		-		-		-			-			-			(3,722	)		(3,722	)
- Contributions (devolution) of non-controlling shareholders, net		-		-		-		-		-		-			-			-			(17,790	)		(17,790	)
- Capital Increase		142,484		142,484		-		-		138,907		-			-			281,391			-			281,391
- Others		-		-		-		-		-		-			-			-			(62	)		(62	)
Total transactions with shareholders		142,484		142,484		-		-		138,907		-			-			281,391			(21,574	)		259,817
Balances as of June 30, 2019		871,918		871,918		132,011		29,974		1,131,051		(172,627	)		402,457			2,394,784			386,088			2,780,872
Balances as of January 1, 2020		871,918		871,918		132,011		29,974		1,132,179		(177,506	)		(510,766	)		1,477,810			398,275			1,876,085
Loss for the period		-		-		-		-		-		-			(69,795	)		(69,795	)		(831	)		(70,626	)
Cash flow hedge		-		-		-		-		-		(64	)		-			(64	)		(3	)		(67	)
Foreign currency translation adjustment		-		-		-		-		-		(10,806	)		-			(10,806	)		(4,432	)		(15,238	)
Exchange difference from net investment in a foreign operation		-		-		-		-		-		(126	)		-			(126	)		(1	)		(127	)
Comprehensive income of the period		-		-		-		-		-		(10,996	)		(69,795	)		(80,791	)		(5,267	)		(86,058	)
Transactions with shareholders:
- Dividend distribution		-		-		-		-		-		-			-			-			(61,684	)		(61,684	)
- Contributions (devolution) of non-controlling shareholders, net		-		-		-		-		-		-			-			-			(10,238	)		(10,238	)
Total transactions with shareholders		-		-		-		-		-		-			-			-			(71,922	)		(71,922	)
Balances as of June 30, 2020		871,918		871,918		132,011		29,974		1,132,179		(188,502	)		(580,561	)		1,397,019			321,086			1,718,105

The accompanying notes on pages 6 to 38 are an integral part of the consolidated financial statements.

- 4 -

GRAÑA Y MONTERO 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 June 30,
	Note	2019			2020
OPERATING ACTIVITIES
Profit (loss) before income tax			90,667			(61,643	)
Adjustments to  profit not affecting cash flows from
operating activities:
Depreciation	21		37,964			47,756
Amortization	21		49,644			50,160
Impairment of accounts receivable and other accounts receivable			347			1,654
Reversal of impairment of inventories			(1,323	)		(1,071	)
Debt condonation			-			(183	)
Impairment (reversal) of property, plant and equipment			10,363			(258	)
Impairment of intangible assets			3,257			-
Change in the fair value of the liability for put option			-			636
Other provisions			9,365			13,890
Financial expense,net			64,573			116,612
Impairment of work in progress			-			13,487
Share of the profit and loss of associates and joint ventures accounted for using the equity method	13		1,757			(1,519	)
Reversal of provisions			(1,547	)		(7,420	)
Disposal (reversal) of assets			332			704
Profit on sale of property, plant and equipment			(1,382	)		(186	)
Profit on remeasurement of accounts receivable			(23,693	)		(1,379	)
Net variations in assets and liabilities:
Trade accounts receivable and working in progress			300,374			317,970
Other accounts receivable			6,715			42,266
Other accounts receivable from related parties			8,390			(61,254	)
Inventories			(77,284	)		(48,683	)
Pre-paid expenses and other assets			(15,988	)		(7,064	)
Trade accounts payable			65,354			(174,737	)
Other accounts payable			(44,254	)		98,638
Other accounts payable to related parties			9,962			16,032
Other provisions			(250	)		(1,525	)
Interest payment			(80,472	)		(68,666	)
Payments for purchases of intangibles - Concessions			(9,385	)		(855	)
Payment of income tax			(35,535	)		(63,648	)
Net cash provided by operating activities			367,951			219,714
INVESTING ACTIVITIES
Sale of property, plant and equipment			5,297			6,710
Interest received			15,084			2,433
Dividends received			332			-
Payment for purchase of investments properties			(35	)		(20	)
Payments for intangible purchase			(65,798	)		(37,981	)
Payments for property, plant and equipment purchase			(27,359	)		(18,842	)
Net cash applied to investing activities			(72,479	)		(47,700	)
FINANCING ACTIVITIES
Loans received			247,206			59,566
Amortization of loans received			(787,967	)		(136,179	)
Amortization of bonds issued			(14,843	)		(16,745	)
Dividends paid to non-controlling interest			(3,721	)		(54,270	)
Cash received (return of contributions) from non-controlling shareholders			(17,790	)		(10,238	)
Capital increase			281,391			-
Net cash applied to financing activities			(295,724	)		(157,866	)
Net increase in cash			(252	)		14,148
Exchange difference			(9,027	)		(16,815	)
Cash and cash equivalents at the beginning of the period			801,021			948,978
Cash and cash equivalents at the end of the period	8		791,742			946,311
NON-CASH TRANSACTIONS:
Capitalization of interests			3,525			2,815
Acquisition of assets through finance leases			3,038			32
Dividends declared to non-controlling interest			-			7,414
Acquisition of right-of-use assets			-			7,979
Acquisition of subsidiary debt			-			17,440
Acquisition of supplier bonds			-			25,871

The accompanying notes on pages 6 to 38 are an integral part of the consolidated financial statements.

- 5 -

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER 31, 2019 (AUDITED) AND JUNE 30, 2020 (UNAUDITED)

1.  GENERAL INFORMATION

a) Incorporation and operations

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

The Group 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 June 30, 2020 were authorized preliminary by Management and Board of Directors on August 3, 2020.

The consolidated financial statements for the year ended December 31, 2019 were approved on the Annual General Mandatory Shareholder’s Meeting on July 13, 2020.

c) The Impact of the Ongoing Novel Coronavirus (COVID-19)

The ongoing COVID-19 pandemic and government measures to contain the spread of the virus are disrupting economic activity, and consequently adversely affecting our business, results of operations and financial condition. As conditions remain highly uncertain and changing rapidly, it is difficult to predict the full extent of the impact of the pandemic. If conditions persist, however, it is likely that the pandemic and the related government measures will have a material adverse effect on the Company.

Countries around the world—including Peru as well as Chile and Colombia—have adopted extraordinary measures to contain the spread of COVID-19, including imposing travel restrictions, requiring closures of non-essential businesses, establishing restrictions on public gatherings, instructing residents to practice social distancing, issuing stay-at-home orders, implementing quarantines and similar actions.

The COVID-19 pandemic and the related government measures have significantly increased economic uncertainty and are likely to cause a global recession. According to recent projections from the International Monetary Fund, during 2020, the global economy is expected to contract by 3.0%, with Latin America expected to contract 7.2% and Peru, Chile and Colombia, in particular, expected to contract 12%, 4.3% and 4.9%, respectively. Moreover, the impact of the pandemic on economic activity has been sudden and severe, and we cannot predict the extent to which the economies in the countries where we operate will ultimately be impacted.

- 6 -

Since mid-March, substantially all of our engineering and construction and real estate projects were mandatorily shut down. By the end of the second quarter, a large number of projects have resumnd their operations with COVID-19 protocols, but nothing can guarantee their continuity or the time to recover to construction level existing prior to the start of the pandemic. Our infrastructure operations, which have for the most part been declared essential businesses, have continued to operate; 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).

Regarding the extent of the COVID-19 pandemic and its impact on the industries in which we operate, the full extent to which COVID-19 will impact our business, results of operations and financial condition is currently under evaluation. We believe that the severity of the impact on the Company will depend, to a large extent, on how long the crisis continues as the total impact and duration of the COVID-19 outbreak continues to evolve as of the date of this quarterly report.

The Company is taking significant measures to mitigate the impact of the crisis on the Group. Among other measures, we are prioritizing the health and safety of our employees, as well as the medium-term sustainability of their employment. Certain actions we are taking include: the design and implementation of protocols to return to project sites, the creation of new office layouts to be compliant with social distancing guidelines, the development of telecommuting schemes, and other major cost-saving initiatives in operation and in support offices.

d) Current situation of the Company

As a result of decisions of a previous administration, the Group is involved in a series of criminal investigations and administrative procedures conducted by the Public Ministry that are based on events that occurred between 2004 and 2015. Such situations led to organizational changes at Group´s corporate governance structure, the initiation of independent investigations and the adoption of measures to address and clarify such situations, as explained below:

  ●
On January 9, 2017, the Board of Directors approved the performance of an independent investigation related to six projects developed in association with companies of the Odebrecht Group.

  ●
On March 30, 2017, the Board of Directors created a Risk, Compliance and Sustainability Committee, who was in charge of the oversight of the investigation independently of Management. The external investigation was performed by the law firm Simpson Thacher & Bartlett LLP, with the assistance of forensic accountants, who reported exclusively to the Risk, Compliance and Sustainability Committee.

  ●
The external investigation concluded on November 2, 2017 and identified no evidence to conclude that any company personnel engaged in bribery in connection with any of our Company’s public projects in Peru with Odebrecht or its subsidiaries, or that any Company personnel was aware of, or knowingly participated in, any corrupt payments made in relation to such projects.

  ●
Subsequently, in August 2019, José Graña Miró Quesada, a shareholder and the former chairman of our Company, indicated in public statements to the media that he and Hernando Graña Acuña, a shareholder and former board member of our Company, had initiated a process of plea bargaining to cooperate with Peruvian prosecutors in respect of multiple projects in which our Company participated with Odebrecht and in respect of the alleged “Construction Club”. Due to the confidential nature of the plea bargain process, the reported information is limited and difficult to verify. Any admission or other evidence of wrongdoing would be inconsistent with information gathered during the internal investigation and would have a material impact on the findings of the prior internal investigation.

- 7 -

  ● As new information about the various Peruvian criminal investigations of the Company emerged, and news that the Company’s former chairman and director were plea bargaining with Peruvian authorities, the Company's Board of Directors continued to investigate the allegations that were the subject of the investigations, including matters relating to the “Construction Club”, which was beyond the scope of the internal investigation conducted by Simpson Thacher & Bartlett LLP. After an extensive and detailed review process, the Company shared information relevant to the investigations with the Peruvian authorities within the framework of a plea bargain process.

  ● As a result of its contribution to the investigations, on December 27, 2019, the Company signed a preliminary settlement and cooperation agreement whereby the Anti-Corruption Prosecutor and the Ad hoc Prosecutor's Office promise to execute a final plea bargain agreement with the Company that would provide the Company with certainty regarding the contingencies it faces as a result of the above-mentioned processes. Additionally, in the aforementioned preliminary agreement, the Anti-Corruption Prosecutor and the Ad Hoc Attorney General's Office authorize the Company to disclose its existence but maintain its content confidential.

At the same time, over the last three years, the new administration together with the new board initiated a transformation process based on the principles of Truth, Transparency and Integrity, making profound changes in the organization of the Company, such as the reconfiguration of the Board of Directors with an independent majority, new shareholding composition, as well as the creation of new governance practices, such as the Corporate Risk Management and autonomous Compliance function, with direct report to the Board of Directors, among other actions.

Criminal investigations derived from projects developed in partnership with companies of the Odebrecht group

In connection with the Lava Jato case, the Company participated directly or through its subsidiaries as minority partner in certain entities that developed six infrastructure projects in Peru with companies belonging to the Odebrecht group (hereinafter Odebrecht).

In 2016, Odebrecht entered into a Plea Agreement with the authorities of the United States Department of Justice and the Office of the District Attorney for the Eastern District of New York by which it admitted corruption acts in connection with some of these projects in which the Company participate as minority partner.

  ● IIRSA Sur

In relation to investigations on IIRSA Sur, the former Chairman of the Board of Directors was included as a subject of an investigation for collusion, and a former director and a former executive was included as a subject of an investigation for money laundering. Subsequently, Graña y Montero S.A.A. and GyM S.A.  have been included as third-party civilians responsible in the process, which means that it will be assessed whether the obligation to indemnify Governement for damages resulting from the facts under investigation will be imposed on these entities.

- 8 -

  ● Electric Train construction project

The first Preparatory Investigation Court of the Judiciary decided to incorporate GyM S.A. as civil third-party responsible in the process related to the construction of the Electric train construction Project, tranches 1 and 2. In this investigation the former Chairman of the Board, a former director and a former manager have been charged.

  ● Gasoducto Sur Peruano (GSP)

In 2019, the Company concluded that it may have exposure with respect to the preliminary investigation process conducted in relation to GSP (the South Peruvian Gas Pipeline project), even though as of the date hereof, it has not been indicted or incorporated as a civilly liable third-party, although the former Chairman of the Board of Directors and a former director are seeking plea bargain agreements in relation to this process, among others.

Criminal investigations in conection to the Construction Club case

GyM S.A. has been incorporated, along with other construction companies, in the criminal investigation that the Public Ministry has been carrying out for the alleged crime of corruption of officials in relation to the so-called Construction Club. Similarly, at the end of February 2020, the Public Ministry has requested the incorporation of Concar S.A., the latter is pending judicial decision. Like officials of other construction companies, a former commercial manager of GyM S.A., the former president of the Board of Directors, a former director and the former Corporate General Manager of the Company have been included in the criminal investigation.

Anticorruption Law - effects on the Group

Law 30737 and its regulation issued by Supreme Decree 096-2018-EF have mitigated the Company and subsidiaries exposure to the corruption cases. These rules set clear guidelines to estimate the potential compensation reducing the uncertainty derived from the legal proceedings, by among other things, preventing the imposition of liens or attachments of assets that would impair its ability to operate.

The benefits of the mentioned rules are subject to the fulfillment of the following obligations:

a.	The obligation to set up a trust that will guarantee any eventual payment obligation of an eventual civil compensation in favor of the Peruvian Government;
b.	The obligation not to transfer funds abroad without the prior consent of the Ministry of Justice;
c.	The implementation of a compliance program; and
d.	The obligation to disclose information to the authorities and to collaborate in the investigation.

The Group has designed a compliance program which is currently under implementation, it fully cooperates with the authorities in its investigations and has executed a trust agreement with the Ministry of Justice, under which the Company has established for an approximate amount of S/80 million (equivalent to US$24 million).

On the other hand, based on the standards indicated and their guidelines, Management has estimated that the value of the civil damages for the cases described above is S/280 million (US$83.6 million)  and has registered as of June 30, 2020 S/154.5 million (equivalent to US$46.1 million) as net present value.

On the other hand, in cases where a provision for civil reparation has been registered, there are two projects carried out in partnership with Odebrecht that to date are not under investigation. If this is started and some evidence is found, the maximum possible exposure for civil reparation estimated according to Law 30737 for both projects would be S/52.7 million (approximately US$15.7 million).

- 9 -

However, the Company, through its external legal advisors, continues to conduct an ongoing evaluation of the information related to the criminal investigations described in this note in order to keep its defense prepared in the event any new charges may arise during those investigations. In conducting the aforementioned evaluation, the Company does not rule out the possibility of finding new incriminating evidence that is not known to date.

Investigations and administrative process initiated by INDECOPI in conection to the Construction Club case

On July 11, 2017, the Peruvian National Institute for the Defense of Free Competition and the Protection of Intellectual Property (“INDECOPI”) initiated an investigation against several construction companies, including GyM S.A., about the existence of an alleged cartel called the Construction Club. Throughout the investigation, GyM S.A. has provided to INDECOPI with all the information requested and continues collaborating with the ongoing investigation.

On February 11, 2020, GyM S.A. was notified by the Technical Secretariat of the Commission for the Defense of Free Competition (“INDECOPI”) with the resolution that begins a sanctioning administrative procedure involving a total of 35 companies and 28 natural persons, for  alleged anticompetitive conduct in the market of Public Works. The resolution does not include the assignment of responsibilities or the result of the administrative disciplinary procedure, which will be determined at the end of the said procedure. The procedure is in a probatory stage, therefore, INDECOPI has not carried out actions in order to quantifying the possible penalties that could result.

2.  IMPACT OF THE COVID-19 PANDEMIC

The recent outbreak of the Novel Coronavirus 2019 (COVID-19) pandemic, which has been declared by the World Health Organization to be a “public health emergency of international concern”, has spread across the world since the end of 2019. In response to the decline in economic activity, the governments of Perú, Chile and Colombia have announced large stimulus programs to assist families and businesses.

As a result of the outbreak, 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, 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.

From the analysis made the different business of the Group have been impacted as follows:

  1)
In the engineering and construction business we estimated figures revised 2020, considering a conservative scenario in which no new contracts are awarded in the rest of the year, therefore revenues for the year will be equivalent to the remaining backlog.   However, revenues could be increased as a result of negotiations on going with our clients regarding higher costs due to stoppages and new operating standards due to the COVID-19 situation.  At the end of the second quarter, the backlog has increased as a consequence of the aforementioned points.

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2)	In the real estate business the shut down of projects has impacted the delivery of real estate units during the year, which impacts the revenues and results of the year.
3)	The infrastructure businesses continue operating because they were declared essential services.  However, there were some impacts on the different businesses:

a.	Line 1 of the Metro operates with less passengers but revenues are not impacted due to the fact that revenues don’t depend on traffic but on the amount of kms travelled by each train.
b.	Oil and gas business has been impacted by the reduction of the oil Price to levels below the estimations considered for 2020.  In response to the sanitary crisis, Lots III and IV are in force majeure and due to this situation, further investments on new wells have been cancelled and suppliers obligations are being renegotiated as well as a new schedule for investment commitments are under review.
c.	The sanitary emergency situation caused an impact on Norvial S.A. revenues and on the results of 2020 as a result of traffic reduction. However, the level of traffic carried has been gradually recovered.  In addition, in May the Republic Congress approved a law in order suspending the collection of toll, a measure that was in effect from May 9 to June 30, 2020. The Concession Contract clause 9.9, about operator contract guarantee, establishes Grantor’s obligation to recognize and pay the Concessionaire the corresponding rate difference in the event that any public entity does not allow the Concessionaire to collect the rate in accordance to the Concession Contract.  The estimate compensation in application of the aforementioned clause will be claimed to the Government.
d.	In the case of the other two road concessions, Survial S.A. and Concesion Canchaque S.A., the suspension in the collection of tolls will not impact the results of the year because the revenues do not depend on traffic.

In general terms, we have not been affected by interruptions in the supply chain of personnel, services or materials, and despite the shut down of some of our projects, we do not estimate penalties or breach of our agreements.

The most important goodwill of the Group are the result of acquisitions in Colombia and Chile. Considering that in both countries the impacts of the pandemic did not lead to major projects shut downs, our estimates of the value of the goodwill have not been affected. Based on our interim impairment assessment as of June 30, 2020, we have determined that our goodwill is not impaired.  However, we are unable to predict how long this conditions will persist, what additional measures may be introduced by governments or clients or what effect any such additional measures may have on our business.

On the liquidity side, the Group 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 twelve-week cash plan, project-by-project, to ensure that Group subsidiaries 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 Group’s subsidiaries obligations with respect to 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 and Directors’ allowances, across the Group’s three segments; and (vi) reducing capital expenditures across the Group’s subsidiaries. In addition, the Group is evaluating the selling of non-strategic minor assets to finance any cash flow deficit during the year. This plan was approved by the Board of Directors on April and May 2020. The Group will continue to closely monitor the impacts of COVID-19 through the course of the year 2020. Therefore, the accompanying financial statements have been prepared assuming that the Group and subsidiaries will continue as a going concern.

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3.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3.1  Basis of preparation

The condensed interim consolidated financial statements for the period ended June 30, 2020 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, 2019, 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.

3.1.1.   Account balance reclassified as of December 31, 2019

The receivable balance to Consorcio Constructor Ductos del Sur amounting to S/27.8 million as of December 31, 2019 was reclassified from “other accounts receivable” to “accounts receivable from related parties”. See reclassification performed:

ASSETS	As at					As at
	December 31,					December 31,
	2019					2019
	Audited		Reclassification			Reclassified
Current assets
Cash and cash equivalents		948,978		-			948,978
Trade accounts receivables, net		821,737		-			821,737
Work in progress, net		49,457		-			49,457
Accounts receivable from related parties		36,658		-			36,658
Other accounts receivable		444,500		-			444,500
Inventories, net		552,573		-			552,573
Prepaid expenses		11,348		-			11,348
		2,865,251		-			2,865,251
Non-current assets as held for sale		205,418		-			205,418
Total current assets		3,070,669		-			3,070,669
Non-current assets
Trade accounts receivable, net		753,202		-			753,202
Work in progress, net		23,117		-			23,117
Accounts receivable from related parties		546,941		27,782			574,723
Prepaid expenses		27,934		-			27,934
Other accounts receivable		300,323		(27,782	)		272,541
Investments in associates and joint ventures		37,035		-			37,035
Investment property		28,326		-			28,326
Property, plant and equipment, net		443,870		-			443,870
Intangible assets, net		853,315		-			853,315
Right-of-use assets, net		78,813		-			78,813
Deferred income tax asset		240,919		-			240,919
Total non-current assets		3,333,795		-			3,333,795
Total assets		6,404,464		-			6,404,464

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3.2  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, 2019.

4.  FINANCIAL RISK MANAGEMENT

Financial risk management is carried out by the Group’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 Group’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 Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Group’s financial performance. The Group uses derivative financial instruments to hedge certain risk exposures in one of its subsidiaries and considers the use of other derivatives in the event that it identifies risks that may generate an adverse effect for the Group in the short and medium-term.

a) Market risks

i) Foreign exchange risk

The Group 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, 2019 and June 30, 2020, this exposure is mainly concentrated in fluctuations of U.S. dollar, the Chilean and Colombian Pesos.

ii) Price risk

Management considers that the exposure of the Group 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 Group’s interest rate risk mainly arises from its long-term borrowings. Borrowings issued at variable rates expose the Group to cash flow interest rate risk. Borrowings issued at fixed rates expose the Group to fair value interest rate risk.

b) Credit risk

Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions, as well as customer credit counterparties, including the outstanding balance of accounts receivable and committed transactions. For banks and financial institutions, only independently rated parties with a minimum rating of ‘A’ are accepted.

- 13 -

Concerning to loans to related parties, the Group 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 Group 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 Group cash flows enabled it to maintain sufficient cash to meet its obligations. However, since 2017, the Group experienced liquidity problems due to the early termination of the GSP concession agreement and the obligations assumed. As a consequence, the Group started a disinvestment plan to be able to meet the obligations resulting from this scenario. This plan was met and the GSP debt was terminated. Due to the COVID-19 pandemic (Note 2), the Group has considered measures to reduce risk exposure and has implemented a new plan in order to meet its requirements of cash for the different businesses.

Group Corporate Finance monitors rolling forecasts of the Group’s liquidity requirements to ensure it exists sufficient cash to meet operational needs so that the Group 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 Group’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.

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, which include interest to be applied according to the established schedule.

	Less than			1-2		2-5	More than
At December 31, 2019	1 year		years		years		5 years		Total
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

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	Less than			1-2		2-5	More than
At June 30, 2020	1 year		years		years		5 years		Total
Other financial liabilities (except
for finance leases and lease		360,526		227,588		184,289		-		772,403
liability for right-of-use asset)		8,926		4,857		5,627		-		19,410
Lease liability for right-of-use asset		23,978		38,541		14,323		13,114		89,956
Bonds		127,275		164,627		381,424		1,030,184		1,703,510
Trade accounts payables (except
non-financial liabilities)		871,436		1,667		-		-		873,103
Accounts payables to related parties		52,323		22,170		-		836		75,329
Other accounts payables (except
non-financial liabilities)		236,859		2,338		180,224		-		419,421
		1,681,323		461,788		765,887		1,044,134		3,953,132

4.2  Capital management risk

The Group’s objectives when managing capital are to safeguard the Group’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 Group had lead Management to monitor deviations that might cause the non-compliance of covenants and may hinder the renegotiation of liabilities (Note15). In extraordinary events as explained in Note 2, the Group identifies the possible deviations and requirements and establishes a plan.

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

The Group 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, 2019 and June 30, 2020, the gearing ratio is presented below indicating the Group’s strategy to keep it in a range from 0.10 to 0.70.

	At			At
	December 31,			June 30,
	2019			2020
Total financial liabilities and bonds (Note 15 and Note 16)		1,723,108			1,720,183
Less: Cash and cash equivalents (Note 8)		(948,978	)		(946,311	)
Net debt		774,130			773,872
Total equity		1,876,085			1,718,105
Total capital		2,650,215			2,491,977
Gearing ratio		0.29			0.31

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, 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).

- 15 -

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

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

As of June 30, 2020, this financial liability was settled.

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 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, 2019.

6.  SEASONALITY OF OPERATIONS

The Group does not present seasonality in the operations of any of its subsidiaries; however, economic activities temporarily restricted during last quarter, due to COVID-19 pandemic and government measures implemented to contain the spread of the virus. As a result,  this situation affected negatively Group's revenues and financial position (Note 2).

7.  OPERATING SEGMENTS

Operating segments are reported consistently with the internal reports that are reviewed by the Group’ 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 Group's operating segments are assessed by the activities of the following business units: (i) engineering and construction, (ii) infrastructure, and (iii) real estate.

As set forth under IFRS 8, reportable segments by significance of income are: ‘engineering and construction’ and ‘infraestructure’. However, the Group 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.

Group 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.

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The table below shows the Group’s financial statements by operating segments:

Operating segments financial position
Segment reporting
			Infrastructure
As of December 31, 2019	Engineering and construction		Energy		Toll roads		Transportation		Water treatment		Real estate		Parent Company operations		Eliminations			Consolidated
Assets.-
Cash and cash equivalent		372,991		53,118		123,020		300,896		6,388		60,718		31,847		-			948,978
Trade accounts receivables, net		531,591		63,402		44,513		97,059		1,168		83,019		985		-			821,737
Work in progress, net		49,457		-		-		-		-		-		-		-			49,457
Accounts receivable from related parties		202,181		369		43,852		1,853		-		1,144		99,794		(312,535	)		36,658
Other accounts receivable		327,977		30,853		30,228		18,548		109		9,509		27,274		2			444,500
Inventories, net		57,093		32,366		7,109		30,594		-		437,012		-		(11,601	)		552,573
Prepaid expenses		6,812		1,271		2,779		231		133		-		122		-			11,348
		1,548,102		181,379		251,501		449,181		7,798		591,402		160,022		(324,134	)		2,865,251
Non-current assets classified as held for sale		2,398		-		-		-		-		-		203,020		-			205,418
Total current assets		1,550,500		181,379		251,501		449,181		7,798		591,402		363,042		(324,134	)		3,070,669
Long-term trade accounts receivable, net		97,256		-		36,273		619,086		-		587		-		-			753,202
Long-term work in progress, net		-		-		23,117		-		-		-		-		-			23,117
Long-term accounts receivable from related parties		318,748		-		836		-		10,475		-		552,687		(308,023	)		574,723
Prepaid expenses		-		887		24,462		2,307		788		-		-		(510	)		27,934
Other long-term accounts receivable		86,097		63,649		5,156		-		7,346		50,449		59,844		-			272,541
Investments in associates and joint ventures		109,839		8,006		-		-		-		6,062		1,495,422		(1,582,294	)		37,035
Investment property		1,450		-		-		-		-		26,876		-		-			28,326
Property, plant and equipment, net		186,589		184,819		11,106		841		153		11,742		49,779		(1,159	)		443,870
Intangible assets, net		136,547		244,901		443,420		794		-		1,029		19,490		7,134			853,315
Right-of-use assets, net		5,638		24,038		3,860		5		7		5,048		55,532		(15,315	)		78,813
Deferred income tax asset		176,740		4,741		13,054		-		720		19,736		20,752		5,176			240,919
Total non-current assets		1,118,904		531,041		561,284		623,033		19,489		121,529		2,253,506		(1,894,991	)		3,333,795
Total assets		2,669,404		712,420		812,785		1,072,214		27,287		712,931		2,616,548		(2,219,125	)		6,404,464
Liabilities.-
Borrowings		180,535		42,760		2,383		5		6		116,231		121,379		(9,039	)		454,260
Bonds		-		-		28,995		15,742		-		-		-		-			44,737
Trade accounts payable		932,142		67,444		34,762		28,508		132		39,645		33,488		-			1,136,121
Accounts payable to related parties		206,907		2,233		35,554		21,024		-		23,437		58,951		(309,190	)		38,916
Current income tax		18,451		961		3,710		23,887		-		704		286		-			47,999
Other accounts payable		441,271		16,721		53,987		4,713		835		83,345		34,433		-			635,305
Provisions		6,031		18,459		6,183		-		-		230		82,580		-			113,483
Non-current liabilities classified as held for sale		-		-		-		-		-		-		210,025		-			210,025
Total current liabilities		1,785,337		148,578		165,574		93,879		973		263,592		541,142		(318,229	)		2,680,846
Borrowings		32,620		116,218		2,070		-		-		11,010		190,671		(7,783	)		344,806
Long-term bonds		-		-		276,550		602,755		-		-		-		-			879,305
Other long-term accounts payable		222,887		-		15,989		2,176		2,106		26,841		3,102		-			273,101
Long-term accounts payable to related parties		120,255		-		836		22,583		23,784		-		165,286		(310,161	)		22,583
Provisions		80,125		40,268		24,691		1,394		-		-		68,474		-			214,952
Derivative financial instruments		-		52		-		-		-		-		-		-			52
Deferred income tax liability		31,037		36,476		5,806		39,172		-		-		243		-			112,734
Total non-current liabilities		486,924		193,014		325,942		668,080		25,890		37,851		427,776		(317,944	)		1,847,533
Total liabilities		2,272,261		341,592		491,516		761,959		26,863		301,443		968,918		(636,173	)		4,528,379
Equity attributable to controlling interest in the Company		330,992		346,415		258,223		232,692		424		137,542		1,644,707		(1,473,185	)		1,477,810
Non-controlling interest		66,151		24,413		63,046		77,563		-		273,946		2,923		(109,767	)		398,275
Total liabilities and equity		2,669,404		712,420		812,785		1,072,214		27,287		712,931		2,616,548		(2,219,125	)		6,404,464

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Operating segments financial position
Segment reporting
			Infrastructure
As of June 30, 2020	Engineering and construction		Energy		Toll roads		Transportation		Water treatment		Real estate		Parent Company operations		Eliminations			Consolidated
Assets.-
Cash and cash equivalent		420,871		64,728		110,809		253,375		7,461		55,066		34,001		-			946,311
Trade accounts receivables, net		272,543		42,514		28,324		95,054		550		26,897		255		-			466,137
Work in progress, net		106,270		-		-		-		-		-		265		-			106,535
Accounts receivable from related parties		151,587		169		37,932		2,142		-		11,386		98,239		(259,205	)		42,250
Other accounts receivable		323,217		29,853		29,828		11,797		197		8,048		25,193		2			428,135
Inventories, net		79,214		36,320		8,627		34,345		-		457,734		-		(1,829	)		614,411
Prepaid expenses		6,879		2,481		6,142		3,308		53		-		47		-			18,910
		1,360,581		176,065		221,662		400,021		8,261		559,131		158,000		(261,032	)		2,622,689
Non-current assets classified as held for sale		2,334		-		-		-		-		-		170,090		-			172,424
Total current assets		1,362,915		176,065		221,662		400,021		8,261		559,131		328,090		(261,032	)		2,795,113
Long-term trade accounts receivable, net		93,801		-		49,449		620,744		-		1,109		-		-			765,103
Long-term work in progress, net		-		-		36,781		-		-		-		-		-			36,781
Long-term accounts receivable from related parties		327,853		-		916		-		10,672		-		619,063		(355,394	)		603,110
Prepaid expenses		-		981		24,075		2,128		762		-		-		(510	)		27,436
Other long-term accounts receivable		92,986		66,466		5,702		-		7,346		53,793		54,233		-			280,526
Investments in associates and joint ventures		109,962		9,070		-		-		-		6,056		1,379,504		(1,466,048	)		38,544
Investment property		1,329		-		-		-		-		25,711		45,503		(45,503	)		27,040
Property, plant and equipment, net		173,123		176,680		9,613		764		142		10,832		2,694		34,542			408,390
Intangible assets, net		129,417		262,188		394,925		737		-		957		18,917		6,608			813,749
Right-of-use assets, net		5,450		18,375		6,679		-		8		4,315		44,840		(13,050	)		66,617
Deferred income tax asset		179,768		6,173		14,325		-		692		22,869		24,042		5,174			253,043
Total non-current assets		1,113,689		539,933		542,465		624,373		19,622		125,642		2,188,796		(1,834,181	)		3,320,339
Total assets		2,476,604		715,998		764,127		1,024,394		27,883		684,773		2,516,886		(2,095,213	)		6,115,452
Liabilities.-
Borrowings		168,181		39,379		2,951		-		6		121,741		34,715		(7,164	)		359,809
Bonds		4,482		-		32,136		18,635		-		-		-		-			55,253
Trade accounts payable		770,640		76,012		35,711		30,887		200		24,910		32,242		-			970,602
Accounts payable to related parties		187,697		2,180		15,099		46,901		35		25,309		45,125		(270,023	)		52,323
Current income tax		20,851		1,496		733		2,077		221		1,435		1,205		-			28,018
Other accounts payable		507,666		16,043		63,688		6,177		859		109,829		36,572		-			740,834
Provisions		7,996		8,705		10,919		-		-		485		83,215		-			111,320
Non-current liabilities classified as held for sale		-		-		-		-		-		-		186,184		(13,098	)		173,086
Total current liabilities		1,667,513		143,815		161,237		104,677		1,321		283,709		419,258		(290,285	)		2,491,245
Borrowings		26,313		112,960		3,997		-		-		9,054		271,315		(7,814	)		415,825
Long-term bonds		24,108		-		262,437		602,751		-		-		-		-			889,296
Long-term trade accounts payable		-		-		1,667		-		-		-		-		-			1,667
Other long-term accounts payable		202,207		-		15,903		2,121		2,182		26,089		2,935		-			251,437
Long-term accounts payable to related parties		127,487		10		836		23,006		24,207		-		177,982		(330,522	)		23,006
Provisions		87,315		49,946		20,775		1,394		-		-		67,639		-			227,069
Deferred income tax liability		19,779		34,482		2,781		40,758		-		-		2		-			97,802
Total non-current liabilities		487,209		197,398		308,396		670,030		26,389		35,143		519,873		(338,336	)		1,906,102
Total liabilities		2,154,722		341,213		469,633		774,707		27,710		318,852		939,131		(628,621	)		4,397,347
Equity attributable to controlling interest in the Company		270,945		348,943		235,391		187,265		173		136,230		1,574,862		(1,356,790	)		1,397,019
Non-controlling interest		50,937		25,842		59,103		62,422		-		229,691		2,893		(109,802	)		321,086
Total liabilities and equity		2,476,604		715,998		764,127		1,024,394		27,883		684,773		2,516,886		(2,095,213	)		6,115,452

- 18 -

Operating segment performance
Segment Reporting
				Infrastructure
For the period ended Jun 30, 2019	Engineering and construction			Energy			Toll roads			Transportation			Water treatment			Real estate			Parent Company operations			Elimination			Consolidated
Revenue		1,050,498			274,222			315,137			202,958			1,782			65,820			44,565			(326,000	)		1,628,982
Gross profit (loss)		103,187			57,749			46,323			37,459			393			8,883			(1,985	)		(25,672	)		226,337
Administrative expenses		(66,993	)		(12,322	)		(15,150	)		(7,317	)		(259	)		(11,008	)		(13,907	)		32,116			(94,840	)
Other income and expenses, net		5,216			226			(16,911	)		(1	)		-			(144	)		56,917			880			46,183
Operating profit (loss)		41,410			45,653			14,262			30,141			134			(2,269	)		41,025			7,324			177,680
Financial expenses		(36,505	)		(5,663	)		(14,521	)		(7,302	)		(11	)		(8,975	)		(52,078	)		7,335			(117,720	)
Financial income		2,294			565			1,305			14,854			328			1,968			38,249			(15,174	)		44,389
Dividends		-			-			-			-			-			-			3,904			(3,904	)		-
Share of profit or loss in associates
and joint ventures		(4,063	)		1,073			-			-			-			-			(1,017	)		2,250			(1,757	)
(Loss) profit before income tax		3,136			41,628			1,046			37,693			451			(9,276	)		30,083			(2,169	)		102,592
Income tax		(13,378	)		(12,046	)		(6,891	)		(10,925	)		(256	)		1,845			(13,181	)		28			(54,804	)
(Loss) profit from continuing operations		(10,242	)		29,582			(5,845	)		26,768			195			(7,431	)		16,902			(2,141	)		47,788
Loss from discontinuing operations		-			-			-			-			-			-			(11,844	)		(81	)		(11,925	)
(Loss) profit for the year		(10,242	)		29,582			(5,845	)		26,768			195			(7,431	)		5,058			(2,222	)		35,863
(Loss) profit from attributable to:
Owners of the Company		(10,538	)		27,001			(9,235	)		20,077			195			(5,709	)		10,470			(5,221	)		27,040
Non-controlling interest		296			2,581			3,390			6,691			-			(1,722	)		(5,412	)		2,999			8,823
		(10,242	)		29,582			(5,845	)		26,768			195			(7,431	)		5,058			(2,222	)		35,863

- 19 -

Operating segment performance
Segment Reporting
				Infrastructure
For the period ended June 30, 2020	Engineering and construction			Energy			Toll roads			Transportation			Water treatment			Real estate			Parent Company operations			Elimination			Consolidated
Revenue		963,206			178,837			193,267			167,652			1,681			32,298			38,299			(210,213	)		1,365,027
Gross profit (loss)		29,801			23,142			15,951			50,916			425			6,573			(5,282	)		(27,823	)		93,703
Administrative expenses		(57,119	)		(8,026	)		(8,525	)		(6,770	)		(208	)		(10,908	)		(9,221	)		28,502			(72,275	)
Other income and expenses, net		3,010			(744	)		(13,466	)		72			-			419			1,891			702			(8,116	)
Operating (loss) profit		(24,308	)		14,372			(6,040	)		44,218			217			(3,916	)		(12,612	)		1,381			13,312
Financial expenses		(32,599	)		(11,001	)		(17,376	)		(3,412	)		(26	)		(6,280	)		(17,238	)		13,724			(74,208	)
Financial income		2,529			489			3,947			2,553			231			3,479			8,348			(14,926	)		6,650
Dividends		-			-			-			-			-			-			2,342			(2,342	)		-
Share of profit or loss in associates
and joint ventures		134			1,062			-			-			-			(5	)		(31,305	)		31,633			1,519
(Loss) profit before income tax		(54,244	)		4,922			(19,469	)		43,359			422			(6,722	)		(50,465	)		29,470			(52,727	)
Income tax		826			(864	)		496			(13,256	)		(250	)		1,412			2,639			14			(8,983	)
(Loss) profit from continuing operations		(53,418	)		4,058			(18,973	)		30,103			172			(5,310	)		(47,826	)		29,484			(61,710	)
Loss from discontinuing operations		-			-			-			-			-			-			(8,853	)		(63	)		(8,916	)
(Loss) profit for the year		(53,418	)		4,058			(18,973	)		30,103			172			(5,310	)		(56,679	)		29,421			(70,626	)
(Loss) profit from attributable to:
Owners of the Company		(49,220	)		2,608			(16,615	)		22,577			172			(1,312	)		(56,649	)		28,644			(69,795	)
Non-controlling interest		(4,198	)		1,450			(2,358	)		7,526			-			(3,998	)		(30	)		777			(831	)
		(53,418	)		4,058			(18,973	)		30,103			172			(5,310	)		(56,679	)		29,421			(70,626	)

- 20 -

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		At
	December 31,		June 30,
	2019		2020
Cash on hand		1,323		1,022
Remittances in-transit		5,664		744
Bank accounts		223,378		280,342
Escrow account (a)		552,439		521,056
Time deposits		166,174		143,147
		948,978		946,311

(a)
The Group maintains various administration or guarantee trusts depending on the purposes for which they were created. The balance corresponding to Reserve Funds Issued Bonds includes operating reserve accounts, maintenance and debt service payments, among others, corresponding to the bond issuance of the subsidiaries.  The balance includes reserve funds for bond payments issued by the subsidiaries GyM Ferrovias S.A. and Norvial S.A. amounting to S/174 million and S/17 million, as of June 30, 2020, respectively (S/181 million and S/18 million, for the year 2019, respectively), as shown as follows:

	At		At
	December 31,		June 30,
	2019		2020
Reserve funds issued bonds		199,192		191,455
Real estate projects		31,794		23,329
Engineering and construction projects		236,526		246,531
Infrastructure projects		84,927		59,741
		552,439		521,056

9.  TRADE ACCOUNTS RECEIVABLES, NET

This account comprises:

	Total				Current				Non-current
	At		At		At		At		At		At
	December 31,		June 30,		December 31,		June 30,		December 31,		June 30,
	2019		2020		2019		2020		2019		2020
Receivables (net) (a)		918,410		697,105		375,229		153,942		543,181		543,163
Unbilled receivables (net) - Subsidiaries (b)		421,841		292,829		336,272		211,729		85,569		81,100
Unbilled receivables (net) - Concessions (c)		234,688		241,306		110,236		100,466		124,452		140,840
		1,574,939		1,231,240		821,737		466,137		753,202		765,103

- 21 -

  a)
Receivables are presented net of impairment and present value discount for S/5.9 million and S/9.6 million, respectively (S/4.9 million and S/10.1 million as of December 31, 2019). The ageing is detailed as follows:

	At		At
	December 31,		June 30,
	2019		2020
Current		801,510		597,748
Past due up to 30 days		28,611		18,293
Past due from 31 days up to 90 days		20,955		681
Past due from 91 days up to 120 days		36,707		3,685
Past due from 121 days up to 360 days		9,204		9,234
Past due over 360 days		21,423		67,464
		918,410		697,105

  b)
Unbilled receivables from subsidiaries correspond to services performed and valuations in process or pending approval. The balance is net of present value discount for S/16.8 million (S/20.6 million as of December 31, 2019), and detailed by subsidiary:

	At		At
	December 31,		June 30,
	2019		2020
GyM S.A.		384,660		258,810
Concar S.A.		10,737		7,305
GMI S.A.		24,787		25,153
GMP S.A.		1,657		1,561
		421,841		292,829

  c)
Unbilled receivables from concessions correspond to future invoice according to Concession Contract terms. This amount is presented net of impairment of S/3.5 million as of June 30, 2020 and December 31, 2019, as detailed below:

	At		At
	December 31,		June 30,
	2019		2020
GyM Ferrovias S.A.		208,205		208,828
Survial S.A.		16,466		12,132
Norvial S.A.		2,149		15,437
Concesión Canchaque S.A.C.		6,700		4,359
Concesionaria La Chira S.A.		1,168		550
		234,688		241,306

10.  WORK IN PROGRESS, NET

This account comprises:

	Total				Current					Non-current
	At		At		At		At			At		At
	December 31,		June 30,		December 31,		June 30,			December 31,		June 30,
	2019		2020		2019		2020			2019		2020
Unbilled receivable concessions in progress (a)		23,117		36,781		-		-			23,117		36,781
Work in progress (b)		49,457		106,535		49,457		106,535	)		-		-
		72,574		143,316		49,457		106,535			23,117		36,781

- 22 -

Work in progress costs include all those expenses incurred by the Group for construction contracts as detailed below:

a)

Includes the pre-operating costs incurred by the Concessionaire Vía Expresa Sur S.A for the concession contract for the Vía Expresa Sur project. The increase as of June 30, 2020, corresponds to the reclassification of the intangible portion, according to the bifurcated model  adopted by the Concession, due to the suspension signed with the Metropolitan Municipality of Lima to agree on the terms and conditions to approve the Early Termination of the Concession Contract by mutual agreement, in accordance with the clause 16.3 of the aforementioned contract.

b)

Includes mainly S/93.6 million corresponding to GyM S.A. and its subsidiary Vial y Vives - DSD S.A. (S/28.3 million as of December 31, 2019); and S/8.6 million from GMI S.A. (S/19.7 million as of December 31, 2019).

11.  TRANSACTIONS WITH RELATED PARTIES

a) Transactions with related parties

Major transactions between the Company and its related parties are summarized as follows:

	At June 30,
	2019		2020
Revenue from sales of goods and services:
- Associates		108		911
- Joint operations		20,418		11,838
		20,526		12,749

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

b) Balances of transactions with related parties

	At December 31,				At June 30,
	2019				2020
	Receivable		Payable		Receivable		Payable
Current portion:
Joint operations
Consorcio Rio Urubamba		9,042		-		9,252		-
Consorcio Peruano de Conservacion		3,592		-		2,972		-
Consorcio Italo Peruano		1,011		363		1,813		217
Consorcio Constructor Chavimochic		-		5,953		-		9,004
Consorcio GyM Conciviles		1,257		1,958		1,310		2,107
Consorcio La Gloria		1,750		1,017		1,599		973
Consorcio Ermitaño		831		440		842		464
Terminales del Peru		1,176		-		1,028		-
Consorcio TNT Vial y Vives - DSD Chile Ltda		-		1,088		-		1,841
Consorcio Rio Mantaro		-		5,869		-		7,149
Consorcio Vial Quinua		-		2,048		-		2,050
Consorcio Huacho Pativilca		1,419		5,895		68		274
Consorcio CDEM		639		-		420		132
Consorcio GyM-Stracon		2,230		-		1		146
Consorcio GyM-OSSA		7,202		-		14,144		-
Consorcio Chicama Ascope		2,471		-		2,536		-
Other minors		1,407		2,102		3,802		4,049
		34,026		26,733		39,787		28,406

- 23 -

	At December 31,				At June 30,
	2019				2020
	Receivable		Payable		Receivable		Payable
Other related parties
Ferrovias Argentina		-		12,183		-		22,944
Peru Piping Spools S.A.C.		2,632		-		2,463		973
		2,632		12,183		2,463		23,917
Current portion		36,658		38,916		42,250		52,323
Non-current portion:
Gasoducto Sur Peruano S.A.		572,624		-		600,870		-
Ferrovias Participaciones		-		22,583		-		23,006
Other minors		2,099		-		2,240		-
Non-current		574,723		22,583		603,110		23,006

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

Accounts receivable from related parties have maturity periods of 60 days and are related to sales of goods and services. These balances do not bear interest and as of June 2020 do not require a provision for impairment. The account receivable from GSP is presented net of impairment and present value discount .

Accounts payable to related parties mainly related to 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. Long-term accounts payable to Ferrovias Participaciones do not bear interest.

12.  OTHER ACCOUNTS RECEIVABLE

This account comprises:

	Total						Current						Non-current
	At			At			At			At			At		At
	December 31,			At June 30,			December 31,			At June 30,			December 31,		At June 30,
	2019			2020			2019			2020			2019		2020
Advances to suppliers		135,481			91,080			135,481			91,080			-		-
Income tax on-account prepaid		70,647			61,387			70,647			61,385			-		2
VAT credit		45,910			72,227			31,646			56,693			14,264		15,534
Guarantee deposits		181,400			203,877			98,046			121,311			83,354		82,566
Claims to third parties		79,771			92,681			38,874			44,985			40,897		47,696
Petroleos del Peru S.A.- Petroperu S.A.		80,942			84,415			17,293			17,949			63,649		66,466
ITAN and other tax receivable		60,883			51,679			30,233			21,090			30,650		30,589
Restricted funds		15,974			8,841			973			960			15,001		7,881
Rental and sale of equipment - GyM S.A. projects		30,798			29,382			30,798			29,382			-		-
Accounts receivable from personnel		2,836			7,356			2,836			7,356			-		-
Consorcio Panorama		23,491			24,891			-			-			23,491		24,891
Other minors		16,488			10,528			15,253			5,627			1,235		4,901
		744,621			738,344			472,080			457,818			272,541		280,526
Impairment		(27,580	)		(29,683	)		(27,580	)		(29,683	)		-		-
		717,041			708,661			444,500			428,135			272,541		280,526

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.

- 24 -

13.  INVESTMENTS IN ASSOCIATES AND JOINT VENTURES

This account comprises:

	At		At
	December 31,		June 30,
	2019		2020
Associates		28,875		29,324
Joint ventures		8,160		9,220
		37,035		38,544

The movement of our investments in associates for the six months period ended June 30, 2019 and 2020 is as follows:

	At June 30,
	2019			2020
Beginning balance		257,765			37,035
Dividends received		(332	)		-
Share of the profit or loss in associates and joint
ventures		(1,757	)		1,519
Impairment of investment		(142	)		-
Translation adjustments		-			(10	)
Ending balance		255,534			38,544

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.

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. The arbitration proceedings are suspended, as a consequence of the of the National Emergency.

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

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

- 25 -

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 six months period ended June 30, 2019 and 2020, is as follows:

	Property,
	plant and			Intangibles			Right-of-use
	equipment			assets			assets
Net cost at January 1, 2019		470,554			847,095			-
Additions		30,652			74,544			-
Reclassifications, disposals and adjustments		(11,327	)		(5,963	)		-
Deductions for sale of assets		(3,872	)		-			-
Depreciation, amortization		(36,794	)		(49,644	)		-
Net cost at June 30, 2019		449,213			866,032			-
Net cost at January 1, 2020		443,870			853,315			78,813
Additions		18,874			39,870			7,979
Reclassifications, disposals and adjustments (*)		(11,361	)		(29,276	)		(10,153	)
Deductions for sale of assets		(6,463	)		-			-
Depreciation, amortization		(36,530	)		(50,160	)		(10,022	)
Net cost at June 30, 2020		408,390			813,749			66,617

(*) Includes translation adjustments in the subsidiary GyM S.A. in property plant and equipment and intangibles, amounted to S/3.7 million and S/5.6 million, respectively.

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

As of June 30, 2020, additions to property, plant and equipment mainly corresponds to S/ 7.4 million in machinery in the engineering and construction segment and S/ 4.9 million in ongoing works in the infrastructure segment (S/ 3.3 million in machinery of the engineering and construction and real estate segment; S/ 4.4 million in various equipment of the engineering and construction segment; and S/ 18.8 million units to be received and works in progress in the segment infrastructure as of June 30, 2019).

As of June 30, 2020, additions to right-of-use assets comprise lease agreements signed by the Group in the first semester.

Depreciation of property, plant and equipment, investment property and right-of-use assets is presented in the Statement of Income as follows:

	At June 30,
	2019			2020
Cost of goods and services (Note 21)		36,141			44,674
Administrative expenses (Note 21)		1,823			3,082
Total depreciation related to property, plant and equipment, investment property and right-of-use assets		37,964			47,756
(-) Depreciation of investment property		(1,170	)		(1,205	)
(-) Depreciation of right-of-use asset		-			(10,021	)
Total depreciation of property, plant and equipment		36,794			36,530

- 26 -

b) Intangible assets

As of June 30, 2019 and 2020, additions registered in intangible assets mainly comprise of investments in preparation of wells located in Lots I, III, IV and V to provide oil explotation services.

As of June 30, 2020, S/ 24 million has been reclassified to work in progress, related to the intangible of the Concessionaire Via Expresa Sur (Note 29.2).

Amortization of intangibles is broken down in the statement of income as follows:

	At June 30,
	2019		2020
Cost of goods and services (Note 21)		46,822		47,997
Administrative expenses (Note 21)		2,822		2,163
		49,644		50,160

Goodwill

Management reviews businesses results based on the type of economic activity carried out.

Goodwill allocated to cash-generating units are:

	At		At
	December 31,		June 30,
	2019		2020
Engineering and construction (*)		36,632		34,093
Electromechanical		20,735		20,735
		57,367		54,828

(*) The variation reported in engineering and construction segment is due to translation adjustment of foreign business of the subsidiary GyM S.A.

As a result of the impairment testing on goodwill performed by Management on an annual basis the recoverable amount of the related cash-generating unit (CGU) is determined based on the higher of its value in use and fair value less cost of disposal.  Value in use is determined based on the future cash flows expected to be generated by the assessed CGU.

15.  BORROWINGS

This item comprises:

	Total				Current				Non-current
	At		At		At		At		At		At
	December 31,		June 30,		December 31,		June 30,		December 31,		June 30,
	2019		2020		2019		2020		2019		2020
Bank loans (a)		553,658		517,217		424,362		318,349		129,296		198,868
Finance leases		22,980		18,054		9,749		8,040		13,231		10,014
Lease liability for right-of-use asset		80,216		72,942		18,246		18,748		61,970		54,194
Other financial entities (b)		142,212		167,421		1,903		14,672		140,309		152,749
		799,066		775,634		454,260		359,809		344,806		415,825

a) Bank loans

As of December 31, 2019 and June 30, 2020, this item comprises bank loans in local and foreign currencies for working capital purposes. These obligations accrue fixed interest rates that fluctuate between 1.0% and 12.0% in 2019 and between 1.0% and 11.0% in 2020.

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						Current				Non-current
						At		At		At		At
	Interest			Maturity		December 31,		June 30,		December 31,		June 30,
	rate			date		2019		2020		2019		2020
GyM S.A. (i)		1.00% / 11.00	%		2023		170,798		160,660		26,401		19,377
GMP S.A. (ii)		5.05% / 7.68	%		2027		30,367		27,683		102,895		104,475
Viva GyM S.A.		6.84% / 8.88	%		2021		110,343		116,333		-		-
Graña y Montero S.A.A. (iii)		9.10% / 10.10	%		2022		112,854		13,673		-		75,016
							424,362		318,349		129,296		198,868

i) Financial Stability Framework Agreement

In July 2017, the Company and its subsidiaries (GyM S.A., Construyendo Pais S.A., Vial y Vives-DSD S.A. and Concesionaria Vía Expresa Sur S.A.) entered into a Financial Stability Framework Agreement with the following financial entities: Scotiabank Perú S.A., Banco Internacional del Perú S.A.A., BBVA Banco Continental, Banco de Crédito del Perú, Citibank del Peru SA and Citibank N.A. The Framework Agreement aims to: (i) grant GyM a syndicated revolving line of credit for working capital for up to US$1.6 million and S/143.9 million, which may be increased by an additional US$14 million subject to certain conditions; (ii) grant GyM S.A. a line of credit of up to US$51.6 million and S/33.6 million; (iii) grant the Company, GyM S.A., Construyendo Pais S.A., Vial y Vives - DSD S.A. and Concesionaria Vía Expresa Sur S.A. a non-revolving line of credit to finance repayment commitments subject to performance bonds; (iv) grant a syndicated line of credit in favor of Graña y Montero S.A.A. and GyM S.A. for the issuance of performance bonds up to an amount of US$100 million (which may be increased by an additional US$50 million subject to compliance with certain conditions); and (v) commit to maintain existing standby letters of credit issued at the request of GyM S.A. and the Company, as well as the request of Construyendo Pais S.A., Vial y Vives – DSD and Concesionaria Vía Expresa Sur S.A.

As of June 30, 2020 the pending balance of the Financial Stability Framework Agreement is US$41.5 million (equivalent to S/147 million).

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

As of June 30, 2020 due to the stoppage of activities generated by the COVID-19 pandemic, the account receivable rate and unbilled receivable rate reached 13% and 53%, respectively. In relation to account receivable rate, the Company does not comply with the requirement of the Financial Stability Framework Agreement.

As of to date, a waiver with financial entities has been request for the quarantine period, March until September 30 of this year, due to the current situation that has affected the normal development of the Company's activities.

ii) Terminales del Peru Loan

Terminales del Peru (hereinafter “TP”), a joint operation of the subsidiary GMP S.A., has a medium-term loan agreement with Banco de Credito del Peru (hereinafter BCP) up to US$30 million to finance the investments committed and up to US$70 million to finance the additional investments from the operation contract of the North and Center terminals for the period 2015 to 2019 with a maximum exposure limit of US$80 million. These facilities are repaid within 8 years. As of June 30, 2020, these loans amount to S/88.3 million, this amount corresponds to the 50% interest held by the subsidiary GMP and due in 2027.

- 28 -

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 June 30, 2020, the loan amounts to S/40.7 million, this amount corresponds to the 50% interest held by the subsidiary GMP and is due in 2026.

As of June 30, 2020 and the date of this report, TP is in compliance with the ratios established in the contract loan.

iii) CS Peru Infrastructure Holdings LLC Loan

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

The loan was used for working capital in the Company, GyM S.A. and Adexus S.A. In February 2020, US$ 10 million was partially paid. As of the date of this report, the principal amount outstanding under this loan is US$25 million (equivalent to S/88.5 million).

On November 21, 2019, as a result of the initiation of a preventive insolvency process by the Chilean subsidiary, Adexus SA, the Company received a communication from CS Peru Infrastructure Holdings LLC reporting the occurrence of a default event under the loan contract, in accordance with the provisions of Section 7.02 (e) and 9.09 of the same contract. As a consequence, as of December 31, 2019, the loan was classified as current liabilities. On February 28, 2020, the waiver was obtained by the Company, so it was reclassified to non-current liabilities. As of June 30, 2020 and as of the date of this report, the Company is in compliance with the covenants established in the loan contract.

b) Other financial entities

Monetization of Norvial dividends

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

Likewise, it has been agreed that the Company will have purchase options on 48.8% of Norvial's economic rights that BCI Peru will maintain through its participation in Inversiones en Autopistas S.A. These options will be subject to certain conditions such as the expiration of different terms, recovery of the investment made with the funds of the BCI Fund (according to different economic calculations) and / or that a change of control occurs. The balance of the loan payable amounts to the equivalent in soles of US$ 42.3 million as of June 30, 2020 and December 31, 2019.

- 29 -

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,		June 30,		December 31,		June 30,
	2019		2020		2019		2020
Bank loans		553,658		517,217		572,019		532,614
Finance leases		22,980		18,054		23,027		16,727
Lease liability for right-of-use asset		80,216		72,942		96,799		83,929
Other financial entities		142,212		167,421		142,212		167,421
		799,066		775,634		834,057		800,691

As of June 30, 2020, the fair value is based on cash flows discounted using a rate based on the borrowing rate of 2.6% and 11% (2.9% and 11%  as of December 31, 2019) and are included as Level 2 in the level of measurement.

16.  BONDS

This item is broken down as follows:

	Total				Current				Non-current
	At		At		At		At		At		At
	December 31,		June 30,		December 31,		June 30,		December 31,		June 30,
	2019		2020		2019		2020		2019		2020
GyM Ferrovias S.A. (a)		618,497		621,386		15,742		18,635		602,755		602,751
Norvial S.A. (b)		305,545		294,573		28,995		32,136		276,550		262,437
GyM S.A. (c)		-		28,590		-		4,482		-		24,108
		924,042		944,549		44,737		55,253		879,305		889,296

a) GyM Ferrovias S.A.

In February 2015, the subsidiary GyM Ferrovias S.A. made an international issue of corporate bonds under Regulation S of Unites States of America. The issue was made in soles VAC (adjusted for the Constant Update Value) for an amount of S/629 million. The bonds mature in November 2039 and earn interest at a rate of 4.75% (plus the VAC adjustment), present a risk rating of AA+ (local scale) granted by Apoyo & Asociados Internacionales Clasico de Riesgo. As of June 30, 2020, an amortization has been made up to S/84.8 million (S/79 million as of December 31, 2019).

As of June 30, 2020, the balance includes accrued interest payable and VAC adjustments for S/95 million (S/86.8 million as of December 31, 2019).

The account movement for the six months period ended June 30, 2019 and 2020 is as follows:

	2019			2020
Balance at January, 1		611,660			618,497
Amortization		(5,638	)		(5,768	)
Accrued interest		23,894			23,704
Interest paid		(15,040	)		(15,047	)
Balance at June, 30		614,876			621,386

- 30 -

As part of the structuring process of the bond, GyM Ferrovias S.A. committed to report and verify compliance with the following, measured based on their individual financial statements (covenants):

  -
Debt service coverage ratio not less than 1.2 times.

  -
Maintain a constant balance in the minimum trust equal to one quarter of operation and maintenance costs (including the IGV).

  - Maintain a constant balance in the minimum trust equal to the following two coupons according to the bond schedule.

As of December 31, 2019 and June 30, 2020, GyM Ferrrovias S.A. has complied with the covenants.

As of June 30, 2020, the fair value amounts to S/698.4 million (S/686.8 million as of December 31, 2019), is based on discounted cash flows using rates 4.2% (4.32% as of December 31, 2019) and is within level 2 of the fair value hierarchy.

b) Norvial S.A.

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

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

The account movement for the six months ended at June 30, 2019 and 2020 is as follows:

	2019			2020
Balance at January, 1		325,382			305,545
Amortization		(9,205	)		(10,977	)
Accrued interest		11,782			12,474
Capitalized interest		1,398			-
Interest paid		(13,187	)		(12,469	)
Balance at June, 30		316,170			294,573

As part of the process of bond structuring, Norvial S.A. engaged to adhere to the following covenants:

  -
Debt service coverage ratio of not less than 1.3 times.

  -
Proforma gearing ratio lower than 4 times.

As of June 30, 2020, Norvial S.A. has complied with the covenant of leverage ratio; however, the debt service coverage ratio is below the minimum required. This ratio was generated as a consequence of the reduction in revenues from the sale of tolls due to lower traffic of vehicules during the pandemic stoppage (Note 2).  Norvial S.A. is managing a waiver request through a General Assembly of Bondholders of the First Norvial Corporate Bond Program (As of December 31, 2019, Norvial S.A. has complied with the corresponding covenants).

As of June 30, 2020, the fair value amounts to S/325 million (S/327.2 million as of December 31, 2019), is based on discounted cash flows using rates between 6.73% and 7.05% (between 6.20% and 7.59% as of December 31, 2019) and is within level 2 of the fair value hierarchy.

- 31 -

c) GyM S.A.

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

In the first quarter of the year,  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 June 30, 2020, the balance includes accrued interest payable for US$293 thousand (equivalent to S/1 million).

As of June 30, 2020, GyM S.A. has complied with the covenants.

As of June 30, 2020, the fair value amounts to S/29.6 million, is based on discounted cash flows using rates 7.61% and is within level 3 of the fair value hierarchy.

17.  TRADE ACCOUNTS PAYABLE

This item includes:

	At		At
	December 31,		June 30,
	2019		2020
Invoices payable		340,579		351,802
Provision of contract costs		758,116		602,528
Notes payable		37,426		17,939
		1,136,121		972,269

As of June 30, 2020, the contract cost provisions include: i) estimate costs to come according to the the completion porcentage of projects amounting to S/113.6 million, mainly for GyM S.A. and GMI S.A. (S/169.5 million as of December 31, 2019); and ii) services received not invoiced S/488.9 million (S/588.6 million as of December 31, 2019).

18.  OTHER ACCOUNTS PAYABLE

This item includes:

	Total				Current				Non-current
	At		At		At		At		At		At
	December 31,		June 30,		December 31,		June 30,		December 31,		June 30,
	2019		2020		2019		2020		2019		2020
Advances received from customers (a)		307,839		384,270		270,714		354,526		37,125		29,744
Consorcio Ductos del Sur - payable (b)		148,076		128,371		-		-		148,076		128,371
Salaries and other payable		87,869		111,301		87,869		111,301		-		-
Other taxes payable		104,444		75,949		84,235		58,337		20,209		17,612
Put option liability on Morelco acquisition		106,444		114,268		71,341		76,158		35,103		38,110
Consorcio Rio Mantaro - payables		35,625		56,798		35,625		56,798		-		-
Acquisition of additional non-controlling interest		22,697		24,230		22,697		24,230		-		-
Guarantee deposits		13,201		16,983		13,201		16,983		-		-
Third-party loans		11,619		11,602		9,545		9,527		2,074		2,075
Other accounts payables		70,592		68,499		40,078		32,974		30,514		35,525
		908,406		992,271		635,305		740,834		273,101		251,437

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

- 32 -

	Total				Current				Non-current
	At		At		At		At		At		At
	December 31,		June 30,		December 31,		June 30,		December 31,		June 30,
	2019		2020		2019		2020		2019		2020
Advances - Consortiums		115,250		98,758		113,093		97,295		2,157		1,463
Advances - Real estate projects		66,258		94,783		66,258		94,783		-		-
Advances - Engineering and construction		83,747		140,299		64,561		125,466		19,186		14,833
Advances - Road concessions		42,030		49,774		26,534		36,557		15,496		13,217
Others		554		656		268		425		286		231
		307,839		384,270		270,714		354,526		37,125		29,744

  (b)
The balance of other accounts payable from Consorcio Constructor Ductos del Sur corresponds to payment obligations to vendors and main subcontractors for S/142 million (S/148 million as of December 31, 2019), assumed by the subsidiary GyM S.A; as a result of the termination of GSP operations.

The fair value of short-term 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 for the periods shown.

19.  PROVISIONS

The movement for the six months ended at June 31, 2019 and 2020 is as follows:

				Contingent
				liabilities			Provision
	Legal			resulting from			for well
	contingencies			acquisitions			closure			Total
At January 1, 2019		84,728			4,498			20,382			109,608
Additions		13,564			-			200			13,764
Reversals of provisions		(1,091	)		(456	)		-			(1,547	)
Payments		(250	)		-			-			(250	)
Translation adjustments		(29	)		(56	)		-			(85	)
At June 30, 2019		96,922			3,986			20,582			121,490
At January 1, 2020		278,319			-			50,116			328,435
Additions		14,492			-			1,034			15,526
Reversals of provisions		(7,420	)		-			-			(7,420	)
Payments		(490	)		-			(1,035	)		(1,525	)
Exchange difference		3,414			-			-			3,414
Translation adjustments		(41	)		-			-			(41	)
At June 30, 2020		288,274			-			50,115			338,389

Legal contingencies

a) Civil compensation

Corresponding to the legal contingency estimated by management for exposure of the Company and its subsidiaries to a probable compensation in relation to their participation as minority partners in certain entities that developed infrastructure projects in Peru with companies belonging to the Odebrecht group and projects related to “Club de la Construcción”. As of June 30, 2020, the present value of the estimated provision totals S/154.5  million (S/77.7 million as of June 30, 2019).

b) Securities Class actions NY SEC

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

- 33 -

As of the date of this report, the Company has signed the definitive settlement agreement with the plaintiffs' attorneys, by which the parties agree to terminate the class action, subject to the court approval and the payment of the transaction amount by the Company. The amount agreed for the termination of the class action is equivalent to US$ 20 million. As of June 30, 2020, the Company registered a provision of US$15 million (equivalent to S/53.1 million) the difference of US$5 million will be covered by the professional liability insurance policy in accordance with the agreement signed with the insurance company.

20.  CAPITAL

As of June 30, 2020 and as of December 31, 2019, the capital of the Company is represented by 871,917,855 shares of a nominal value of S/1.00 each, all registered in the Public Registries.

As of June 30, 2020, a total of 202,455,240 shares were represented in ADS, equivalent to 40,491,048 ADSs at a rate of 5 shares per ADS.

As of December 31, 2019, a total of 218,043,480 shares were represented by ADS, equivalent to 43,608,696 ADSs at a rate of 5 shares per ADS.

21.  EXPENSES BY NATURE

For the six month period ended June 30, 2019 and 2020, this item comprises:

	Cost of
	goods and			Administrative
	services			expenses		Total
At June 30, 2019
Salaries, wages and fringe benefits		378,778			58,403		437,181
Services provided by third-parties		500,917			19,054		519,971
Purchase of goods		246,355			-		246,355
Other management costs		190,766			12,438		203,204
Depreciation (Note 14 a)		36,141			1,823		37,964
Amortization (Note 14 b)		46,822			2,822		49,644
Impairment of accounts receivable		347			-		347
Taxes		4,150			300		4,450
Impariment of property, plant and equipment		(308	)		-		(308	)
Inventory recovery		(1,323	)		-		(1,323	)
Total		1,402,645			94,840		1,497,485
At June 30, 2020
Services provided by third-parties		358,663			15,667		374,330
Salaries, wages and fringe benefits		440,550			45,172		485,722
Purchase of goods		231,964			-		231,964
Other management costs		144,185			6,115		150,300
Depreciation (Note 14 a)		44,674			3,082		47,756
Amortization (Note 14 b)		47,997			2,163		50,160
Impairment of accounts receivable		1,654			-		1,654
Taxes		2,966			76		3,042
Property, plant and equipment recovery		(258	)		-		(258	)
Inventory recovery		(1,071	)		-		(1,071	)
Total		1,271,324			72,275		1,343,599

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22.  OTHER INCOME AND EXPENSES

For the six month period ended June 30, 2019 and 2020, this item comprises:

	At June 30,
	2019		2020
Other income:
Sale of assets		5,297		6,710
Debt forgiveness to suppliers		5,277		183
Recovery of provisions and impairments		1,228		4,392
Profit from Mizuho Bank Ltd. agreement (a)		67,039		-
Others		1,590		2,451
		80,431		13,736
Other expenses:
Cost of assets disposal		4,278		6,664
Asset impairment (b)		27,638		13,487
Provision for well closure		201		1,034
Administrative fine		1,446		160
Others		685		507
		34,248		21,852
		46,183		(8,116	)

a)

Corresponds to the profit from the refinancing operation executed by Mizuho, linked to the agreement signed between GyM Ferrovías S.A. and Mizuho Bank Ltd.  Pursuant to the terms of such agreement, the Company provided a stand-by letter of credit to guarantee a financial derivative required to execute the CPAOs purchase transaction related to the Expansion Project.  Furthermore, the agreement stated that in case Mizuho Bank refinanced the debt obtained for the purchase of the CPAOs, the Company would be entitled to receive 70% of the profit obtained from such refinancing.

b)

Corresponds to the impairment of intangibles and accounts receivable at subsidiary Concesionaria Vía Expresa Sur S.A. for S/13.5 million, as a result of the Company's estimates on the recovery of the investment maintained in the project. The Concession Contract has been suspended by mutual agreement with the Municipality of Lima since June 2017. In June 2020, an additional suspension letter was signed with the Municipality of Lima in order to agree on the terms and conditions for an early termination of the Concession Contract by mutual agreement, in accordance with the clause 16.3 of the aforementioned contract.

23.  INCOME TAX

The condensed interim consolidated financial statements for the six months period ended June 30, 2020, income tax expense is recognized based on management’s estimate of the annual income tax rate expected for the full financial year. The estimated annual tax rate as of June 30, 2020 is 17.04% (53.42% for the  period ended in June 30, 2019).

24.  CONTINGENCIES, COMMITTMENTS AND GUARANTEES

As of June 30, 2020, contingencies held by the Group are substantially the same as those existing as of December 31, 2019.

The Group maintains guarantees and letters of credit in force in various financial entities guaranteeing operations for US$431 million (US$390 million, as of December 31, 2019).

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25.  DIVIDENDS

As part of the covenants at the refinancing agreements mentioned in Note 15, the Company is unable to pay dividends as established in the Financial Stability Framework Agreement.

For the six month period ended June 30, 2020, the Group’s subsidiaries have paid dividends to its non-controlling interests in the amount of S/61.7 million (S/3.7 million for the  period ended in June 30, 2019).

26.  EARNINGS (LOSS) PER SHARE

The basic earnings (loss) per common share has been calculated by dividing the loss of the period attributable to the Group’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 earnings (loss) per basic share.

The basic earnings (loss) per common share is as follows:

		At June 30,
		2019		2020
Earning (loss) attributable to owners of the Company
during the period			27,040		(69,795	)
Weighted average number of shares in issue
at S/1.00 each, at June 30,			771,127,696		871,917,855
Basic earnings (loss) per share (S/)	(*)		0.035		(0.080	)
			At June 30,
			2019		2020
Earning (loss) from continuing operations attributable to owners
of the Company during the period			43,926		(60,879	)
Weighted average number of shares in issue
at S/1.00 each, at June 30,			771,127,696		871,917,855
Basic earnings (loss) per share (S/)	(*)		0.057		(0.070	)

(*) The Group does not have common shares with dilutive effects at June 30, 2019 and June 30, 2020.

27.  NON-CURRENT ASSET HELD FOR SALE

The subsidiary Adexus S.A. (hereinafter Adexus) has been reclassified as non-current assets held for sale at December 31, 2019 and June 30, 2020, whose main activity is to provide information technology solutions mainly in Chile and Peru

On November 19, 2019, Adexus filed an application for reorganization under law 20 720 with the Chilean courts of justice. The Company impaired the total investment value as of December 31, 2019.

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On January 9, 2020, the Company communicated that the creditors committee of Adexus approved with the favorable vote of more than 80% of the pledge creditors and 85% of the unsecured creditors, respectively, the judicial reorganization agreement proposed by Adexus in the framework of the reorganization procedure. According to the terms of the judicial reorganization agreement, Adexus will restructure and pay the total of its reorganized liabilities within a maximum period of six years, according to the new agreed conditions, being authorized to continue with its commercial activities normally. As a result of the financial protection provided by the Chilean law and with the support of its creditors, Adexus has achieved the restructuring of its liabilities while continuing to serve all its customers.  As of June 30, 2020, Adexus S.A. has complied with the payment schedule agreed with the creditors.

Although the Company investment in Adexus has been declared as an available-for-sale investment and on an exceptional basis, the Group decided that Adexus will be subject to the patrimonial protection law; after achieving this restructuring, the Group will focus on honoring it in the terms agreed while finding the right shareholder for the future development of the Company.

	At			At
	December 31,			June 30,
	2019			2020
ASSETS
Cash and cash equivalets		1,723			2,565
Accounts receivables, net		129,739			101,944
Inventories, net		2,828			2,342
Other assets, net		68,730			63,239
Total assets		203,020			170,090
LIABILITIES
Borrowings		91,529			112,442
Accounts payable		118,497			73,742
Total liabilities		210,026			186,184
Total net assets		(7,006	)		(16,094	)

28.  EVENTS AFTER THE DATE OF THE STATEMENT OF FINANCIAL POSITION

1) NY SEC Shareholder Claim Class Actions

On July 2, 2020, the Company entered into a settlement agreement (the “Agreement”) with the participants in the class action lawsuit (“class action”) that a group of shareholders had with our company, see Note 22 ii ). The validity of the Agreement is subject to the approval of the New York Court; terminating, through this act, the process definitively.

The Agreement establishes a payment equivalent to US$20 million, to be made as follows:

a)	US$5.35 million will be paid within 30 days from the date the preliminary approval of the Agreement is issued; US$5 million with funds from the corresponding insurance policy; and
b)	US$14.65 million will be paid no later than June 30, 2021. Additionally interest bear at the annual rate of 5% calculated from the date the Court's preliminary approval is issued until payment date.

2)   Agreement to suspend the term of the concession and suspension of obligations of the Concesionaria Vía Expresa Sur S.A.

On July 15, 2020, the Metropolitan Municipality of Lima and the Concessionaire Via Expresa Sur S.A. agreed to extend the suspension of the Concession Term and the execution of obligations of the Concession Contract, until September 14, 2020, as a maximum term. During the suspension period, the parties will agree on terms and conditions to determine the Early Termination of the Concession Contract by mutual agreement. The parties will work together to evaluate and agree on the terms and conditions for the Expiration of the Concession by mutual agreement.

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