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 March 2021

Commission File Number 001-35991

AENZA S.A.A.

(Exact name of registrant as specified in its charter)

N/A

(Translation of registrant’s name into English)

Republic of Peru

(Jurisdiction of incorporation or organization)

Avenida Paseo de la República 4667, Lima 34,

Surquillo, Lima

Peru

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F ___X____ Form 40-F _______

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [ ]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [ ]

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes _______ No ___X____

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): Not applicable.

March 5, 2021

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: March 5, 2021

AENZA S.A.A (FORMERLY GRAÑA Y MONTERO S.A.A.) AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2019 AND 2020

AENZA S.A.A (FORMERLY GRAÑA Y MONTERO S.A.A.) AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2019 AND 2020

CONTENTS	Page


Report of Independent Auditors	1 - 2

Consolidated Statement of Financial Position	3

Consolidated Statement of Income	4

Consolidated Statement of Comprehensive Income	5

Consolidated Statement of Changes in Equity	6

Consolidated Statement of Cash Flows	7

Notes to the Consolidated Financial Statements	8 – 113

S/ = Peruvian Sol

US$ = United States dollar

(FREE TRANSLATION)

REPORT OF INDEPENDENT AUDITORS

To the Shareholders and Members of the Board of AENZA S.A.A. (formerly Graña y Montero S.A.A.)

We have audited the accompanying consolidated financial statements of AENZA S.A.A. (antes Graña y Montero S.A.A.) and Subsidiaries, which comprise the consolidated statements of financial position as of December 31, 2020 and 2019, the consolidated statements of income, the consolidated statements of comprehensive income, the consolidated statements of changes in equity and the Consolidated statements of cash flows corresponding to the years ended on those dates, as well as the summary of significant accounting policies and other explanatory notes.

Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards (IFRS), issued by the International Accounting Standards Board (IASB) in force internationally. This responsibility includes designing, implementing, and maintaining the internal control that Management considers pertinent to allow the preparation and fair presentation of financial statements free of material misstatements, whether as a result of fraud or error; select and apply the appropriate accounting policies; and make reasonable accounting estimates in accordance with the circumstances.

Responsibility of the auditors

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. Our audits were carried out in accordance with the International Auditing Standards (ISA), published by the International Auditing and Assurance Standards Board (IAASB), approved for application in Peru by the Board of Deans of Associations of Public Accountants of Peru. Such standards require that we comply with ethical requirements and that we plan and perform the audit to obtain reasonable assurance that the consolidated financial statements do not contain material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and information disclosed in the financial statements. The procedures selected depend on the auditor's judgment, which includes assessing the risk that the financial statements will contain material misstatements, whether as a result of fraud or error. In making this risk assessment, the auditor takes into consideration the relevant internal control of the Company in the preparation and fair presentation of the financial statements in order to design audit procedures in accordance with the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal control. An audit also includes evaluating whether the accounting principles applied are appropriate and whether the accounting estimates made by management are reasonable, as well as an evaluation of the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide us with a basis for our audit opinion.

- 1 -

(FREE TRANSLATION)

In our opinion, the accompanying consolidated financial statements present fairly, in all their significant aspects, the consolidated financial position of AENZA S.A.A. (formerly Graña y Montero S.A.A) and Subsidiaries as of December 31, 2020 and 2019, as well as their financial performance and cash flows for the years ended on those dates, in accordance with International Financial Reporting Standards (IFRS), issued by the International Accounting Standards Board (IASB) in force internationally.

Emphasis of Matters

As discussed in Note 1.c) to the consolidated financial statements, AENZA S.A.A. (formerly Graña y Montero S.A.A.) has been included as a responsible third party in the investigations related to the IIRSA Sur case and has an exposure to the preliminary investigation processes conducted in relation to the projects Gasoducto Sur Peruano and IIRSA Norte; GyM S.A. (a subsidiary of AENZA S.A.A.) has been included as a responsible third party in IIRSA Sur case, the Electric Train Construction and Construction Club and has also been included in a Sanctioning Administrative Process by a Peruvian regulatory entity for the existence of an alleged cartel called the Construction Club. Likewise, Concar S.A. (a subsidiary of AENZA S.A.A.) has been required to be included in the investigation process of the Construction Club. The aforementioned Note 1.c) also describes that the Company signed an agreement of understanding with the Peruvian authorities where they undertake to enter into a definitive plea agreement regarding the contingencies it faces as a consequence of the aforementioned processes. The Company's Management estimates that, according to the level of progress in the negotiations for the closure of the plea agreement, it is unlikely that new relevant information related to the process will appear; however, does not rule out the possibility of finding, in the future, adverse evidence, nor does it rule out that the authorities or third parties will find, in the future, adverse evidence not currently known to date during the investigations being conducted.

As indicated in the Notes 12 and 15 to the consolidated financial statements, the Company has an account receivable from Gasoducto Sur Peruano (an associate entity of AENZA S.A.A.) for S/ 620 million as of December 31, 2020. Gasoducto Sur Peruano entered into a bankruptcy process due to the early termination of the concession contract with the Peruvian government to build, operate and maintain the transportation system for natural gas pipelines, this process is in the creditors’ recognition stage that will form the creditors’ assembly. Based on the preliminary plea agreement signed with the Peruvian authorities, the Company desisted from requesting an arbitration for the collection of that debt; however, according to the opinion of its legal advisors, the Company considers that Gasoducto Sur Peruano can exercise its right to collect from the Peruvian State for the net book value of the concession assets and thus recover the corresponding accounts receivable.

Lima, Peru

March 5, 2021

Reprisal by:

Jaime E. Vizcarra Moscoso

Chartered Public Accountant

Registration Nº 06847

- 2 -

AENZA S.A.A. (FORMERLY 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
		As of December 31,
	Note	2019	2020
		(as restated)
Current assets
Cash and cash equivalents	9	950,701	900,168
Trade accounts receivables, net	10	914,204	703,167
Work in progress, net	11	49,457	186,433
Accounts receivable from related parties	12	36,658	27,338
Other accounts receivable	13	454,474	477,165
Inventories, net	14	555,401	552,000
Prepaid expenses		16,478	22,972
		2,977,373	2,869,243

Non-current assets as held for sale		2,398	-

Total current assets		2,979,771	2,869,243

Non-current assets
Trade accounts receivable, net	10	779,609	730,666
Work in progress, net	11	23,117	-
Accounts receivable from related parties	12	574,723	620,071
Prepaid expenses		27,934	22,264
Other accounts receivable	13	273,432	328,223
Investments in associates and joint ventures	15	37,035	35,516
Investment property		28,326	26,073
Property, plant and equipment, net	16	463,990	405,469
Intangible assets, net	17	854,227	791,990
Right-of-use assets, net	16.2	90,581	64,518
Deferred income tax asset	24	271,719	262,623
Total non-current assets		3,424,693	3,287,413





Total assets		6,404,464	6,156,656


The accompanying notes on pages 8 to 113 are an integral part of the consolidated financial statements.

LIABILITIES AND EQUITY
		As of December 31,
	Note	2019	2020
		(as restated)
Current liabilities
Borrowings	18	481,529	452,884
Bonds	19	44,737	58,446
Trade accounts payable	20	1,159,075	1,097,167
Accounts payable to related parties	12	38,916	43,818
Current income tax		51,169	34,494
Other accounts payable	21	669,674	718,406
Provisions	22	113,483	141,744
Total current liabilities		2,558,583	2,546,959

Non-current liabilities
Borrowings	18	409,066	445,436
Bonds	19	879,305	874,313
Trade accounts payable	20	34,814	40,502
Other accounts payable	21	296,290	183,230
Accounts payable to related parties	12	22,583	36,297
Provisions	22	214,952	237,836
Derivative financial instruments		52	-
Deferred income tax liability	24	112,734	102,907
Total non-current liabilities		1,969,796	1,920,521
Total liabilities		4,528,379	4,467,480

Equity	23
Capital		871,918	871,918
Legal reserve		132,011	132,011
Voluntary reserve		29,974	29,974
Share Premium		1,132,179	1,131,574
Other reserves		(177,506)	(169,234)
Retained earnings		(510,766)	(635,101)
Equity attributable to controlling interest in the Company		1,477,810	1,361,142
Non-controlling interest		398,275	328,034
Total equity		1,876,085	1,689,176
Total liabilities and equity		6,404,464	6,156,656

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AENZA S.A.A. (FORMERLY 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 year
			ended December 31,
	Note		2019			2020
			(as restated)

Revenues from construction activities				2,411,880			1,815,671
Revenues from services provided				1,254,059			1,055,423
Revenue from real estate and sale of goods				671,922			442,935
				4,337,861			3,314,029

Cost of construction activities				(2,351,563	)		(1,716,309	)
Cost of services provided				(1,035,251	)		(929,206	)
Cost of real estate and sale of goods				(500,610	)		(347,906	)
		26		(3,887,424	)		(2,993,421	)
Gross profit				450,437			320,608

Administrative expenses		26		(248,652	)		(152,909	)
Other income and expenses		28		(339,494	)		(87,232	)
Operating (loss) profit				(137,709	)		80,467

Financial expenses		27		(253,134	)		(156,943	)
Financial income		27		74,346			37,231
Share of the profit or loss of associates and joint ventures accounted for using the equity method		15 a)-b)		(218,774	)		770
Loss before income tax				(535,271	)		(38,475	)
Income tax expense		29		(303,371	)		(57,989	)
Loss for the year				(838,642	)		(96,464	)

(Loss) profit attributable to:
Owners of the Company				(884,721	)		(124,335	)
Non-controlling interest				46,079			27,871
				(838,642	)		(96,464	)


Loss per share attributable to owners of the
Company during the year		34		(1.076	)		(0.143	)


The accompanying notes on pages 8 to 113 are an integral part of the consolidated financial statements.

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AENZA S.A.A. (FORMERLY 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 year
			ended December 31,
	Note		2019			2020


Loss for the year				(838,642	)		(96,464	)
Other comprehensive income:

Items that may be subsequently reclassified to profit or loss
Cash flow hedge, net of tax		30		6			(626	)
Foreign currency translation adjustment, net of tax		30		(8,170	)		8,304
Exchange difference from net investment in a foreign operation, net of tax		30		(456	)		708
Other comprehensive income for the year, net of tax				(8,620	)		8,386
Total comprehensive income for the year				(847,262	)		(88,078	)

Comprehensive income attributable to:
Owners of the Company				(891,607	)		(116,063	)
Non-controlling interest				44,345			27,985
				(847,262	)		(88,078	)


The accompanying notes on pages 8 to 113 are an integral part of the consolidated financial statements.

- 5 -

AENZA S.A.A. (FORMERLY GRAÑA Y MONTERO S.A.A.) AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED DECEMBER 31, 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
- IFRS adoption		-		-		-		-		-			-			(1,462	)		(1,462	)		-			(1,462	)
Initial balances restated		729,434		729,434		132,011		29,974		992,144			(170,620	)		373,955			2,086,898			401,571			2,488,469
(Loss) profit for the year		-		-		-		-		-			-			(884,721	)		(884,721	)		46,079			(838,642	)
Cash flow hedge		-		-		-		-		-			6			-			6			-			6
Foreign currency translation adjustment		-		-		-		-		-			(6,440	)		-			(6,440	)		(1,730	)		(8,170	)
Exchange difference from net investment in a foreign operation		-		-		-		-		-			(452	)		-			(452	)		(4	)		(456	)
Comprehensive income of the year		-		-		-		-		-			(6,886	)		(884,721	)		(891,607	)		44,345			(847,262	)
Transactions with shareholders:
- Dividend distribution		-		-		-		-		-			-			-			-			(12,762	)		(12,762	)
- Contributions (devolution) of non-controlling shareholders, net		-		-		-		-		-			-			-			-			(32,996	)		(32,996	)
- Additional acquisition of non-controlling		-		-		-		-		1,883			-			-			1,883			(1,883	)		-
- Capital Increase		142,484		142,484		-		-		138,152			-			-			280,636			-			280,636
Total transactions with shareholders		142,484		142,484		-		-		140,035			-			-			282,519			(47,641	)		234,878
Balances as of December 31, 2019		871,918		871,918		132,011		29,974		1,132,179			(177,506	)		(510,766	)		1,477,810			398,275			1,876,085

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) profit for the year		-		-		-		-		-			-			(124,335	)		(124,335	)		27,871			(96,464	)
Cash flow hedge		-		-		-		-		-			(594	)		-			(594	)		(32	)		(626	)
Foreign currency translation adjustment		-		-		-		-		-			8,158			-			8,158			146			8,304
Exchange difference from net investment in a foreign operation		-		-		-		-		-			708			-			708			-			708
Comprehensive income of the year		-		-		-		-		-			8,272			(124,335	)		(116,063	)		27,985			(88,078	)
Transactions with shareholders:
- Dividend distribution		-		-		-		-		-			-			-			-			(82,412	)		(82,412	)
- Contributions (devolution) of non-controlling shareholders, net		-		-		-		-		-			-			-			-			(15,725	)		(15,725	)
- Additional acquisition of non-controlling		-		-		-		-		(605	)		-			-			(605	)		(89	)		(694	)
Total transactions with shareholders		-		-		-		-		(605	)		-			-			(605	)		(98,226	)		(98,831	)
Balances as of December 31, 2020		871,918		871,918		132,011		29,974		1,131,574			(169,234	)		(635,101	)		1,361,142			328,034			1,689,176


The accompanying notes on pages 8 to 113 are an integral part of the consolidated financial statements.

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AENZA S.A.A. (FORMERLY 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 year
			ended December 31,
	Note		2019			2020

OPERATING ACTIVITIES
Loss before income tax				(535,271	)		(38,475	)
Adjustments to profit not affecting cash flows from
operating activities:
Depreciation		26		112,318			98,504
Amortization		26		107,499			98,621
Impairment of inventories		26		4,503			791
Impairment of accounts receivable and other accounts receivable		26		290,491			91,330
Reversal of impairment of inventories				(4,752	)		(821	)
Debt condonation				(18,186	)		(9,451	)
Impairment (reversal) of property, plant and equipment		26		20,018			-
Impairment of intangible assets		28		45,821			-
Reversal of impairment of accounts receivable				(19,448	)		-
Reversal of impairment of intangible assets				(20,676	)		-
Change in the fair value of the liability for put option		28		4,697			245
Other provisions		22		186,894			80,673
Financial expense,net				167,872			225,212
Impairment of investment				384			38
Incremental cost accrued				-			8,875
Share of the profit and loss of associates and joint ventures accounted for using the equity method		15 a)-b)		218,774			(770	)
Reversal of provisions		22		(7,471	)		(36,827	)
Disposal (reversal) of assets				349			8,895
Profit on sale of property, plant and equipment		16		(11,892	)		(2,322	)
Profit on remeasurement of accounts receivable				45,363			(25,888	)
Net variations in assets and liabilities:
Trade accounts receivable and working in progress				457,709			131,674
Other accounts receivable				148,833			(46,120	)
Other accounts receivable from related parties				(11,178	)		(20,461	)
Inventories				(34,091	)		22,578
Pre-paid expenses and other assets				4,964			(823	)
Trade accounts payable				58,973			(42,062	)
Other accounts payable				(286,110	)		(58,013	)
Other accounts payable to related parties				(24,461	)		3,591
Other provisions				(1,134	)		(9,051	)
Interest payment				(172,377	)		(137,369	)
Payments for purchases of intangibles - Concessions				(25,917	)		(3,519	)
Payment of income tax				(94,669	)		(112,851	)
Net cash provided by operating activities				607,829			226,024

INVESTING ACTIVITIES
Sale of property, plant and equipment				18,607			9,118
Interest received				6,552			4,292
Dividends received		15 a)-b)		1,517			2,318
Payment for purchase of investments properties				(88	)		(98	)
Payments for intangible purchase				(84,201	)		(46,767	)
Payments for property, plant and equipment purchase				(93,017	)		(33,596	)
Net cash applied to investing activities				(150,630	)		(64,733	)

FINANCING ACTIVITIES
Loans received				644,312			185,644
Amortization of loans received				(1,130,301	)		(275,163	)
Amortization of bonds issued				(31,335	)		(37,981	)
Payment for transaction costs for debt				(4,770	)		-
Dividends paid to non-controlling interest		35 d)		(12,762	)		(82,412	)
Cash received (return of contributions) from non-controlling shareholders				(32,996	)		(15,725	)
Capital increase		23		280,636			-
Net cash applied to financing activities				(287,216	)		(225,637	)
Net increase (net decrease) in cash				169,983			(64,346	)
Exchange difference				(20,303	)		13,813
Cash and cash equivalents at the beginning of the year				801,021			950,701
Cash and cash equivalents at the end of the year		9		950,701			900,168

NON-CASH TRANSACTIONS:
Capitalization of interests				7,229			4,887
Acquisition of assets through finance leases				3,851			71
Acquisition of right-of-use assets				101,745			12,075
Reclassification to other accounts receivable by Concesionaria Vía Expresa Sur				-			24,157
Acquisition of supplier bonds				-			25,871

The accompanying notes on pages 8 to 113 are an integral part of the consolidated financial statements.

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AENZA S.A.A (FORMERLY GRAÑA Y MONTERO S.A.A.) AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2019 AND 2020

1 GENERAL INFORMATION

a) Incorporation and operations

AENZA S.A.A., formerly Graña y Montero S.A.A. (hereinafter the “Company”) is the parent Company of the AENZA Corporation that includes the Company and its subsidiaries (hereinafter, the “Corporation”) and is mainly engaged in holding investments in Corporation companies. In addition, the Company provides strategic and functional services and office leases to the companies of the Corporation.

The General Shareholder’s Meeting on November 2, 2020 approved the modification of the Company’s name from Graña y Montero S.A.A. to AENZA S.A.A. which is effective as of February 4, 2021.

The Corporation is a conglomerate of companies whose operations encompass different business activities where, the most significant are engineering and construction, infrastructure (public concession ownership and operation) and development of real estate projects (Note 7).

b) Authorization for the issue of the financial statements

The consolidated financial statements for the year ended December 31, 2020, have been prepared and issued with authorization of Management and the Board of Directors’ on March 5, 2021, and will be submitted for approval consideration to the General Shareholders’ Meeting to be held within the term established by law. Management expects that the consolidated financial statements as of December 31, 2020, will be approved with no modifications.

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) Current situation of the Company

The Corporation is involved in a series of criminal investigations conducted by the Public Ministry and administrative proceedings conducted by INDECOPI based on events that occurred between years 2003 and 2015.

Such situations led to significant changes at Corporation´s corporate governance structure, the opening of independent investigations and the adoption of measures to address and clarify these situations, as explained below:

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

•	On March 2, 2017, a new Corporate General Manager was appointed and on March 31, 2017, the shareholders appointed a new Board of Directors with an independent majority, all non-executive directors, introducing fundamental changes in the corporate governance and culture of the Corporation.

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

•	The external investigation concluded on November 2, 2017 and found no evidence that the Company or its subsidiaries or any of its directors or officers, former or current, have intentionally or knowingly participated in acts of corruption related to the projects developed in association with Odebrecht.

- 8 -

•	Subsequently, in August 2019, José Graña Miró Quesada, a shareholder and former chairman of our Company's Board of Directors, publicly announced that he and Hernando Graña Acuña, a shareholder and former member of the Company's Board of Directors, had initiated a process of plea bargaining to cooperate with Peruvian prosecutors in relation to the investigations of “Lava Jato” case and others in progress. Due to the reserved nature of the plea bargain process, it is impossible for us to know of verify the statements made by the aforementioned persons within the scope of those processes. Any admission or other evidence provided that corroborate wrongdoing could be inconsistent with the investigations carried out and could have a significant impact on your conclusions.

•	As new information emerged, the Company's Board of Directors continued to investigate the facts that were the subject of the criminal investigations, including matters relating to the “Construction Club”, which scope was outside of the investigation carried out by Simpson Thacher & Bartlett LLP. After an extensive and detailed review process, it was decided to share all the findings with the Peruvian authorities within the framework of a plea bargain process, in line with the Company's committment to transparency and integrity.

•	As a result of its contribution to the investigations, on December 27, 2019, the Company signed a preliminary agreement whereby the Anti-Corruption Prosecutor Office 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 Office and the Ad Hoc Attorney General's Office authorize the Company to disclose the existence of the agreement but to maintain its content confidential.

•	At the same time, since the beginning of year 2017, the new administration together with the new Board of Directors began a transformation process based on the principles of Truth, Transparency and Integrity, making profound changes in the organization supported by a Board of Directors with an independent majority, 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 as a minority partner of Odebrecht Group companies, directly or through its subsidiaries, in entities or consortiums that developed six infrastructure projects.

In 2016, Odebrecht entered into an Agreement with 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, which are mentioned below:

•	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. were included as civilly liable third-party 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.

•	Electric Train Construction Project

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

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•	Gasoducto Sur Peruano (GSP)

In year 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). As of the date hereof, the Company has not been indicted or incorporated as a civilly liable third-party or as an investigated legal person.

Subsequently, in 2020, the Company and its legal advisors concluded that there is exposure to the preliminary investigation process conducted in relation to the IIRSA Norte project. To date, the Company has not been incorporated either as a responsible civil third party or as an investigated legal person.

Criminal investigations in relation to the Construction Club case

GyM S.A. has been incorporated, along with other construction companies, as a legal entity investigated 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., a 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 into these events.

Anticorruption Law - effects on the Corporation

Law 30737 and its regulation issued by Supreme Decree 096-2018-EF have mitigated the Company and subsidiaries exposure on the corruption cases. These standards set guidelines for the calculation of potential indemnification, reducing uncertainty about the imposition of seizures on assets that could hinder the operation of the Company's business.

In the case of the Company and its subsidiary GyM, the benefits of the mentioned rules are subject to the fulfillment of the following obligations as a consequence of the association with Odebrecht in the IRSA Sur and construction of the Electric train construction Project, tranches 1 and 2:

-	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;
-	The obligation not to transfer funds abroad without the prior consent of the Ministry of Justice;
-	The implementation of a compliance program; and
-	The obligation to disclose information to the authorities and to collaborate in the investigation.

The Corporation 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/72 million (equivalent to US$20 million).

In 2020, the Company was included in the framework of Law 30737 for the IIRSA Norte and Chavimochic. However, the Company has been in contact with the Ministry of Justice in order to clarify this information, given that the incorporation of the Company in the Category 2 is not in accordance with the provisions set forth in the law. Based on the standards indicated and their guidelines, It is estimated that the value of the contingencies related to Odebrecht and the Construction Club described above is S/338 million (US$93.3 million) and was recorded at December 31, 2020 the equivalent to the corresponding present value that results in S/191 million (equivalent to US$52.7 million).

On the other hand, in addition to the cases where a provision for civil reparation has been recorded, there is a project carried out in partnership with Odebrecht that to date is 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 the project would be S/9.6 million (approximately US$2.6 million).

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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. Management estimates that, given the progress achieved in the negotiations of a plea bargain agreement, it would be unlikely that new material information related to the process will appear. However, management cannot rule out the possibility of finding, in the future, adverse evidence, nor that the authorities or third parties find, in the future, adverse evidence not currently known during the investigations that are being carried out.

Investigations and administrative process initiated by INDECOPI in relation 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. GyM S.A. has provided to INDECOPI with all the information requested and continues collaborating with the investigation.

On February 11, 2020, the subsidiary GyM S.A. was notified by the Technical Secretariat of the Commission for the Defense of Free Competition of 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 sanctioning procedure, which will be determined at the end of said procedure. The proceeding is in its evidentiary stage, therefore, INDECOPI has not carried out the actions aimed at quantifying the possible sanctions that could result.

d)	Impact of the COVID-19 Pandemic

The outbreak of the COVID-19 pandemic, which the World Health Organization declared to be a “public health emergency of international concern”, has spread across the world since 2019. Throughout 2020, countries around the world, including Peru, Chile and Colombia, took extraordinary measures to contain the spread of COVID-19, including social immobilization, imposition of travel restrictions, temporary closure of non-essential businesses, restrictions on public gatherings and similar actions.

These measures led to a substantial reduction in economic activity, especially in the second quarter of 2020. In response to this situation, the governments of Peru, Chile and Colombia implemented various stimulus programs to assist families and businesses.

In this context the results of operations, financial positions and cash flows of the Corporation have been adversely affected during second quarter of 2020. However as of the date of this report and as a result of the gradual normalization of activities since July 2020, the results of the following months show a significant recovery in activity.

From the analysis carried out by Management the different business of the Corporation have been impacted during 2020 as follows:

1) In the engineering and construction business the mandatory stoppage of activities, specially from March to June, caused total revenues to decrease 25% compared to 2019. However, the gradual normalization of activities from July and the result of negotiations with our clients regarding higher costs due to the stoppages and new operating standards prevented gross and oerating margins from deteriorating substantially compared to 2019. Finally, it was very relevant the award of new contracts during the year, especially the contract for the construction of the second runway at Jorge Chavez airport and the contract for the construction of the Piura gas pipeline.

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. However, despite these adverse circumstances, a positive result was achieved for this business in 2020.

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3) The infrastructure businesses continue operating as they were declared essential services:

a.	Line 1 of the Metro operated with fewer passengers but revenues were not impacted due to the fact that revenues don’t depend on traffic but on the amount of kms travelled by each train.
b.	The oil and gas business was impacted by the reduction of the oil Price to levels below the estimations considered for 2020. During the sanitary crisis, the enforceability of further investment obligation on new wells in Lots III and IV was suspended obligations with suppliers were renegotiated.
c.	The state emergency situation caused an impact on Norvial S.A. revenues and on the results of 2020 as a result of lower vehicle traffic until July. In addition, in May the Peruvian Congress approved a law in order suspending the collection of tolls, a measure that was in effect from May 9 to June 30, 2020. Norvial S.A. has claimed from the State the payment of a compensation foreseen in clause 9.9 of the Concession Contract, which establishes the obligation of the Grantor to recognize and pay the Concessionaire the corresponding tariff difference in the event that any public entity does not allow the Concessionaire to collect the tariff as stipulated in the same contract.
d.	In the road concessions Survial S.A. and Concesion Canchaque S.A. the suspension in the collection of tolls did not impact the results of the year as the revenues do not depend on vehicle traffic.

In general terms, we have not been affected by interruptions in the supply chain of personnel, services or materials, and despite the temporary stoppage of some of our projects, there we no penalties or non-compliance with our agreements with clients.

The most important goodwill of the Corporation is 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 impairment assessment as of December 31, 2020, we have determined that our goodwill is not impaired.

On the liquidity side, the Corporation 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) renegotiating certain of the Corporation’s subsidiaries obligations with respect to suppliers, banks and other third parties; (iv) identifying and reducing non-essential general expenses across the Corporation; (v) reducing headcount, and temporarily reducing salaries of senior management and Directors’ allowances, across the Corporation’s three segments; and (vi) reducing capital expenditures across the Corporation’s subsidiaries. This plan was approved by the Board of Directors on April and May 2020 sessions. In this regard, the accompanying financial statements have been prepared assuming that the Corporation and subsidiaries will continue as a going concern.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied in all the years presented, unless otherwise stated.

2.1 Basis of preparation

The consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with International Financial Reporting Standards (IFRS) and interpretations issued by the IFRS Interpretations Committee (IFRIC) applicable to companies reporting under IFRS. The financial statements comply with IFRS as issued by the IASB in force as of December 31, 2019, and December 31, 2020, respectively.

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The consolidated financial statements have been prepared under the historical cost convention, except for derivative financial instruments, financial assets at fair value through profit or loss, and available-for-sale financial assets measured at fair value. The financial statements are presented in thousands of Peruvian Sol unless otherwise stated.

The preparation of the consolidated financial statements in conformity with IFRS requires the use of certain critical accounting estimates. Also requires that the Management exercise its critical judgment in the process of applying the Corporation's accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

2.2 Consolidation of financial statements

a) Subsidiaries

Subsidiaries are entities over which the Company has control. Subsidiaries are fully consolidated from the date on which control is transferred to the Corporation. They are deconsolidated from the date that control ceases.

The Corporation applies the acquisition method to account for business combinations. Identifiable assets acquired, liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date.

The Corporation evaluates the measurement of the non-controlling interest on an acquisition-by-acquisition basis. As of December 31, 2019, and 2020, the measurements of the non-controlling interest in the Corporation´s acquisitions were made at the non-controlling interest´s proportionate share of the recognized amounts of the acquiree’s identifiable net assets.

Business acquisition-related costs are expensed as incurred.

Any contingent consideration assumed by the Corporation with the selling party is recognized at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration are recognized in accordance with IFRS 9 “Financial Instruments” as profit or loss.

Goodwill is initially measured as the excess of the acquisition cost, the fair value at the acquisition date of any interest previously acquired plus the fair value of the non-controlling interest, over the net identifiable assets acquired and liabilities and contingent liabilities assumed. If the acquisition cost is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized in profit or loss at the time of acquisition.

For consolidating subsidiaries, balances, income, and expenses from transactions between Group companies are eliminated. Profits and losses resulting from inter-company transactions that are recognized as assets are also eliminated. Group companies use common accounting practices, except for those that are specifically required for specific businesses.

b)	Changes in ownership interests in subsidiaries without change of control

Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions, in other words as transactions with owners in their capacity as owners. The difference between the fair value of any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interest are also recorded in equity at the time of disposal.

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c)	Disposal of subsidiaries

When the Corporation ceases to have control over a subsidiary, any retained interest in the entity is re-measured at its fair value at the date when control is lost, with the change in carrying amount recognized in profit or loss at such date. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognized in other comprehensive income in respect of that entity are accounted for as if the Corporation had directly disposed of the related assets or liabilities. This may mean that the amount previously recognized in other comprehensive income is reclassified to profit or loss.

d)	Joint arrangements

Contracts in which the Corporation and one or more of the contracting parties have joint control on the relevant joint activities are called joint arrangements.

Investments in joint arrangements are classified as either joint operations or joint ventures depending on the contractual rights and obligations of each investor. The Corporation has assessed the nature of its joint arrangements and determined them to be both joint ventures as well as joint operations.

Joint ventures are accounted for using the equity method. Under this method, interests in joint ventures are initially recognized at cost and adjusted thereafter to recognize the Corporation’s share of the post-acquisition profits or losses and movements in the comprehensive income statement.

The Corporation assesses on an annual basis whether there is any objective evidence that the investment in the joint ventures and associate is impaired. If this is the case, the Corporation calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognizes the impairment loss in share of the profit or loss in associates and joint ventures under the equity method of accounting in the income statement. In addition, the Corporation stops the use of the equity method if the entity ceases to be an operating entity.

Joint operations are joint arrangements whereby the parties that have joint control of the arrangement, have rights over the assets, and obligations for the liabilities, relating to the arrangement. Each party recognizes its assets, liabilities, revenue and cost and its share of any asset or liability jointly held and, on any revenue, or cost arisen from the joint operation.

In the Corporation, joint operations mainly relate to consortiums (entities without legal personality) created exclusively for the development of a construction contract. Considering that the only objective of the consortium is to develop a specific project, all revenue and costs are included within revenue from construction activities and cost of construction activities, respectively.

e)	Associates

Associates are all entities over which the Corporation has significant influence but not control, generally accompanying a holding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method (see section d) above).

Profits and losses resulting from transactions between the Corporation and its associates are recognized in the Corporation’s consolidated financial statements only to the extent of unrelated investor’s interests in the associates. Unrealized losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates are changed where necessary to ensure consistency with the policies adopted by the Corporation.

Impairment losses are measured and recorded in accordance with section d) above.

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2.3	Segment reporting

Operating segments are reported in a consistent manner with internal reporting provided to the Management of the Corporation.

If an entity changes the structure of its internal organization in a manner that causes the composition of its reportable segments to change, the Corporation restates the information for earlier periods unless the information is not available.

2.4	Foreign currency translation

a)	Functional and presentation currency

The consolidated financial statements are presented in Peruvian soles, which is the functional and presentation currency of the Corporation. All subsidiaries, joint arrangements, and associates use the Peruvian Sol as their functional currency, except for foreign entities, for which the functional currency is the currency of the country in which they operate.

b)	Transactions and balances

Foreign currency transactions are translated into the functional currency using prevailing the exchange rates at the date of the transactions or valuation when items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognized in the consolidated income statement, except when deferred in other comprehensive income. Foreign exchange gains and losses of all monetary items are included in the income statement within financial income or expense.

Exchange differences arising on loans from the Company to its subsidiaries in foreign currencies are recognized in the separate financial statements of the Company and separate financial statements of the subsidiaries. In the consolidated financial statements, such exchange differences are recognized in other comprehensive income and are re-classified in the income statement on the disposal of the subsidiary or debt repayment to the extent such loans qualify as part of the “net investment in a foreign operation”.

c)	Corporation companies

The results and financial position of all the Corporation entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency of the Corporation are translated into the presentation currency as follows:

i)	Assets and liabilities for each statement of financial position are translated using the closing exchange rate prevailing at the date of the consolidated statement of financial position;
ii)	income and expenses for each income statement are translated at the average exchange rate (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated using the exchange rate on the date of the transaction);
iii)	capital is translated by using the historical exchange rate for each capital contribution made; and
iv)	all exchange differences are recognized as separate components in other comprehensive income, within foreign currency translations adjustment.

Goodwill and fair value adjustments arising from the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and are translated at the closing exchange rate. Exchange differences are recognized in other comprehensive income.

2.5	Public services concession agreements

Concession agreements signed between the Corporation and the Peruvian Government entitle the Corporation, as a Concessionaire, to assume obligations for the construction or improvement of infrastructure and which qualify as public service concessions are accounted as defined by IFRIC 12 “Service Concession Arrangements”. The consideration to be received from the Government for the services of constructing or improving public infrastructure is recognized as a financial asset, an intangible asset or both, as stated below:

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a)	It is recognized as a financial asset to the extent that it has a contractual right to receive cash or other financial assets either because the Government secures the payment of specified or determinable amounts or because the Government will cover any difference arising from the amounts actually received from public service users in relation with the specified or determinable amounts. These financial assets are recognized initially at fair value and subsequently at amortized cost (financial asset model).

b)	It is recognized as an intangible asset to the extent that the service agreement grants the Corporation a contractual right to charge users of the public service. The resulting intangible asset is measured at cost and is amortized as described in Note 2.15 (intangible asset model).

c)	It is recognized as a financial asset and an intangible asset when the Corporation recovers its investment partially by a financial asset and partially by an intangible asset (bifurcated model).

2.6	Cash and cash equivalents

In the consolidated statements of financial position and cash flows, cash and cash equivalents include cash on hand, on-demand bank deposits, other highly liquid investments with original maturities of three months or less and bank overdrafts. In the consolidated statement of financial position, bank overdrafts are included in the balance of borrowings as current liabilities.

2.7	Financial assets

2.7.1 Classification and measurement

The Corporation classifies its financial assets, according to its subsequent measurement, in the following categories: i) amortized cost; ii) financial assets at fair value through other comprehensive income and iii) financial assets at fair value through profit or loss. The classification depends on the purpose for which the financial assets were acquired on the basis of the Corporation's business model for managing the financial assets and the characteristics of the contractual cash flows of the financial asset.

Management determines the classification of its financial assets at the date of its initial recognition and re-evaluates this classification at the date of each closing of its consolidated financial statements. As of December 31, 2019, and 2020, the Corporation only maintains financial assets in the following categories:

a) Amortized cost

This category is the most relevant for the Corporation. The Corporation measures financial assets at amortized cost if the following conditions are met:

i) The financial asset is held within a business model with the objective of maintaining the financial assets to obtain the contractual cash flows; and

ii) The contractual terms of the financial asset generate cash flows, on specific dates, that are only payments of the principal and interest on the amount of the outstanding principal.

Financial assets at amortized cost are subsequently measured using the effective interest method and are subject to impairment. Profits and losses are recognized in profits or losses when the asset is written off, modified or impaired.

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Trade accounts receivable, accounts receivable from related companies, other accounts receivable, work in progress and cash and cash equivalents are included in current assets except for those over twelve months after the date of the consolidated statement of financial position. The latter are classified as non-current assets.

b) Financial assets at fair value through other comprehensive results

Financial assets at fair value through other comprehensive income of the Corporation are classified in this category when they meet the following conditions:

i) keep them within a business model whose objective is achieved by obtaining contractual cash flows and selling financial assets; and

ii) the contractual terms of the financial asset give rise, on specific dates, to cash flows that are only payments of the principal and interest on the outstanding principal amount.

The investment account at Inversiones en Autopistas S.A. is included in this category.

c) Financial assets at fair value through profit or loss

Financial assets that do not meet the criteria of amortized costs or fair value through other comprehensive income are measured at fair value through profit or loss. The result in a debt investment that is subsequently measured at fair value through gains and losses is recognized in the consolidated statement of comprehensive income in the period in which it occurs.

Financial assets at fair value through profit or loss are non-derivative financial assets designated by the Corporation at their fair value upon initial recognition and are held for sale. These are included in current assets.

2.7.2 Derecognition of financial assets

The Corporation derecognizes a financial asset when the contractual rights over the cash flows of the financial asset expire, or when it transfers the rights to receive the contractual cash flows in a transaction in which all the risks and benefits of ownership of the financial asset are substantially transferred, or does not transfer or retain substantially all the risks and benefits related to the property and does not retain control over the assets transferred.

The Corporation participates in transactions in which it transfers the assets recognized in its statement of financial position but retains all or substantially all the risks and advantages of the assets transferred, and/or control over them. In these cases, the assets transferred are not derecognized and are measured on a basis that reflects rights and obligations that the Corporation has retained.

2.8	Impairment of financial assets

IFRS 9 “Financial Instruments”, requires to register expected credit losses of all financial assets, except for those that are carried at fair value with an effect on results, estimating it over 12 months or for the entire life of the financial instrument ("lifetime"). In accordance with the provisions of the standard, the Corporation applies the simplified approach (which estimates the loss for the entire life of the financial instrument), for the commercial debtors of the rental business line of the real estate sector, and the general approach for the trade accounts receivables, and other accounts receivable; the same that requires evaluating whether or not a significant increase in risk exists to determine whether the loss should be estimated based on 12 months after the reporting date or during the entire life of the asset.

The Corporation has established a policy to conduct an evaluation, at the end of each reporting period, to identify whether the asset has suffered a significant increase in credit risk since the initial date. Both the credit losses expected at 12 months and the expected credit losses during the life of the asset are calculated individually or collectively, depending on the nature of the portfolio.

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For financial assets for which the Corporation has no reasonable expectation of recovering, either the entire outstanding amount or a portion thereof, the gross carrying amount of the financial asset is reduced. This is considered a decrease in (partial) accounts of the financial asset.

2.9	Derivative financial instruments and hedging activities

Derivatives are initially recognized at fair value on the date a derivative contract is signed into and are subsequently re-measured at their fair value at the end of each reporting period. The method for recognizing the gain or loss resulting from changes in the fair value of the derivatives depends on whether they are designated as an hedging instrument, and if so, the nature of the item being hedged.

The Corporation designates certain derivatives as hedges of a particular risk associated with a recognized asset or liability (fair value hedge) or a highly probable forecast transaction (cash flow hedge). Derivatives are initially recognized at fair value on the date of subscription of the contract and are subsequently recognized at their fair value.

The Corporation documents, at the inception of the transaction, the relationship between hedging instruments and hedged items, as well as its risk management objectives and strategy for undertaking various hedges transactions. The Corporation also documents its assessment, both at hedge inception as at the date of each subsequent statement of financial position, of whether the derivatives used in hedges transactions are highly effective in offsetting changes in fair values or cash flows of hedged items.

The fair value of various derivative instruments used for hedging purposes and changes in the account reserves for hedges in equity are disclosed in Note 8. The full fair value of a hedging derivative is classified as a non-current asset or liability when the remaining maturity period of the hedged item is more than 12 months and as a current asset or liability when the remaining maturity period of the hedged item is less than 12 months. Trading derivatives are classified as a current asset or liability.

Cash flow hedge

The effective portion of changes in the fair value of derivatives that are designated and qualify as fair value hedges is recognized as other comprehensive income. The gain or loss relating to the ineffective portion is recognized immediately in the income statement. Amounts accumulated in equity are reclassified to profit or loss in the periods when the hedged item affects profit or loss (for example, when the forecasted sale that is hedged takes place).

The gain or loss relating to the effective portion of interest rate swaps hedging variable rate borrowings is recognized in the income statement as “Financial income or Financial expenses”.

However, when the forecasted transaction that is hedged results in the recognition of a non-financial asset (for example, inventory or fixed assets), the gains or losses previously deferred in equity are transferred from equity and are included in the initial measurement of the cost of the non-financial asset. The deferred amounts are finally recognized in cost of goods sold in the case of inventory or depreciation in the case of fixed assets.

When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and will be reversed to income when the forecasted transaction is finally recognized in the statement of comprehensive income. When a forecasted transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the income statement within “other income and expenses, net”.

2.10	Trade accounts receivables

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Trade receivables are amounts due from customers for goods or services sold by the Corporation. If the collection is expected in one year or less, they are classified as current assets. If not, they are presented as non-current assets. In the Infrastructure segment it includes the billing of the first purchase of trains as part of the model of the financial asset of the concessionaire GyM Ferrovias S.A. (Note 2.5).

Trade receivables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method, less any provision for impairment, except for receivables of less than one year that are stated at a nominal amount which is similar to their fair values since they are short term.

It includes Management estimates corresponding to the collection rights for services performed pending invoice and/or approval by client, which have been valued using the completion percentage method. It corresponds mainly to the Engineering and Construction segment (subsidiaries GyM S.A. and GMI S.A.). In the Infrastructure segment, for concessions it corresponds to future collections for public services, mainly represented by unconditional contractual rights to be received from the Grantor under the model of the financial asset (Note 2.5).

2.11	Work in progress

This account includes the balance of work in progress costs incurred that relates to future activities of the construction contracts (see Note 2.27 for detail on revenue recognition from construction activities and concessions services).

Changes in estimates of contract revenues and costs can increase or decrease the estimated margin. When a change in the estimate is known, the cumulative impact of the change is recorded in the period in which it is known, based on the progress completed.

2.12	Inventories

The inventories include land, works in progress and finished buildings related to the real estate activity, materials used in the construction activity and marketed supplies for exploration and extraction activities.

a)	Real estate activity

Land used for the execution of real estate projects is recognized at acquisition cost. Work in progress and finished real estate includes the costs of design, materials, direct labor, borrowing costs (directly attributable to the acquisition, construction, production of the asset), other indirect costs and general expenses related to the construction.

Net realizable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses. Annually, the Corporation reviews whether inventories have been impaired identifying three groups of inventories to measure their net realizable value: i) land bought for future real estate projects which are compared to their net appraisal value; if the acquisition value is higher, a provision of impairment is recognized; ii) land under construction, impairment is measured based on cost projections; if these costs are higher than selling prices of each real estate unit, an impairment estimated is recorded; and iii) completed real estate units; these inventory items are compared to the selling prices less selling expenses; if these selling expenses are higher, a provision for impairment is recorded.

For the reductions in the carrying amount of these inventories to their net realizable value, a provision is recognized for impairment of inventories with a charge to profit or loss for the year in which those reductions occur.

b)	Exploration and extraction activities

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Inventories are valued at production costs or net realizable value (NRV), the one with the lowest result, on the basis of the weighted average method. The NRV represents the value at which it is estimated to make oil, gas and its derivatives LPG and HAS, which is calculated on the basis of international prices at which discounts that are usually granted are deducted. Miscellaneous supplies, materials, and spare parts are valued at cost or replacement value, whichever is less based on the average method. The cost of inventories excludes financing expenses and exchange differences. Inventories to be received are recorded at cost by the specific identification method.

The Corporation constitutes a devaluation of materials charged to income for the year in cases in which the book value exceeds its recoverable value.

c)	Other activities

Materials and supplies are recorded at cost by the weighted average method or at their replacement value, the lower. The cost of these items includes freight and non-refundable applicable taxes.

The devaluation of these items is estimated on the basis of specific analysis made by the Management on its rotation. If it is identified that the book value of the stocks of materials and supplies exceeds their replacement value, the difference is charged to income in the year in which this situation is determined.

Management considers that as of the date of the consolidated financial statements it is not necessary to establish additional provisions to those recognized in the financial statements to cover losses due to obsolescence of these inventories.

2.13	Investment property

Investment properties are shown at cost less accumulated depreciation and impairment losses, if any. Subsequent costs attributable to investment properties are capitalized only if it is probable that future economic benefits will flow to the Company and the cost of these assets can be measured reliably; if not, they are recognized as expenses when incurred.

Repair and maintenance expenses are recognized in profit and loss when they are incurred. If the property’s carrying amount is greater than its estimated recoverable amount, an adjustment to reduce the carrying amount to the recoverable amount is recognized.

Depreciation is determined by the straight-line method at a rate that is considered sufficient to absorb the cost of the assets and the end of the useful life and considered their significant components with useful lives substantially different (each component is treated separately for depreciation purposes). The estimated useful lives of those properties range from 5 to 50 years.

The investment properties held by the Corporation correspond to: (i) “Agustino Plaza” Shopping Center, located in the El Agustino District, and (ii) the stores situated within the stations of Line 1 of the Lima Metro; the properties owned by the subsidiary Viva GyM S.A. are represented by a fair value amount to US$14.16 million, equivalent to S/51.31 million as of December 31, 2020 (US$18.7 million, equivalent to S/62.6 million, as of December 31 of 2019).

These investment properties have been leased under the modality of an operating lease.

2.14	Property, plant and equipment

Property, plant and equipment are stated at historical cost less accumulated depreciation and impairment losses, if any. Historical cost includes expenditure that is directly attributable to the acquisition of these items.

Subsequent costs are included in the asset’s carrying amount or are recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Corporation and the cost of the item can be measured reliably. Repairs and maintenance expense are charged to the statement of income during the financial period in which they are incurred.

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Assets under construction are capitalized as a separate component. At their completion, the cost of such assets is transferred to their definitive category.

Replacement units are major spare parts in which depreciation starts when the units are installed for use within the related asset.

Depreciation of machinery, equipment and vehicles recognized as “Major equipment” are depreciated based on their hours of use. Under this method, the total number of work hours that machinery and equipment is capable of producing is estimated and a charge per hour is determined. The depreciation of other assets that do not qualify as “Major equipment” is calculated under the straight-line method to allocate their cost less their residual values over their estimated useful lives, as follows:

		Years
Buildings and facilities		Between 3 and 50
Machinery and equipment		Between 2 and 10
Vehicles		Between 2 and 10
Furniture and fixtures		Between 2 and 10
Other equipment		Between 2 and 10

Residual values and useful lives are reviewed and adjusted as appropriate at each reporting date. Gains and losses on disposals are recognized in “Other income and expenses, net” in the statement of income. Regarding joint operations that carry out construction activities, the difference between the proceeds from disposals of fixed assets and their carrying amount is shown within “revenue from construction activities” and “cost of construction activities”, respectively.

2.15	Intangible assets

Goodwill

Goodwill arises on the acquisition of subsidiaries and represents the excess of the purchase consideration, the amount of any non-controlling interest and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the net identifiable assets acquired. If the payment made, the amount of the non-controlling interest recognized and previously held interest measured at fair value is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the consolidated statement of income.

Goodwill acquired in a business combination is allocated to each cash-generating units (CGU), or group of CGUs, that is expected to benefit from the synergies of the combination. Goodwill is monitored at the operating segment level.

Goodwill impairment reviews are performed at least annually and when events or changes in circumstances indicate a potential impairment. Any impairment is recognized immediately as an expense in item “Other income and expenses, net” and cannot be reversed later.

ii)	Trademarks

Trademarks acquired separately are shown at historical cost. Trademarks acquired in a business combination are recognized at fair value at the acquisition date. Management has determined that these trademarks have indefinite useful lives.

Trademark impairment reviews are performed at least annually and when events or changes in circumstances indicate a potential impairment. Any impairment is recognized immediately as an expense in item “Other income and expenses, net”. The carrying amount that has been subject to impairment is reviewed at each reporting date to verify possible reversals of the impairment and is recognized in the “other income and expenses, net” item.

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iii)	Concession rights

The intangible asset consisting of the right to charge users for the services related to service concessions agreements (Note 2.5 and Note 6.b) is initially recorded at the fair value of construction or improvement services and before amortization is started, an impairment test is performed; it is amortized under the straight-line method, from the date revenue starts using the lower of its estimated expected useful life or effective period of the concession agreement.

iv)	Contractual relationships with customers

Contractual relationships with customers are assets resulting from business combinations that were initially recognized at fair value as determined based on the expected cash flows from those relations over a period of time based on the estimated permanent of the Corporation’s customer (the estimation of useful life is based on the term of contract with customers which fluctuate between 5 and 9 years). The useful life and the impairment of these assets are individually assessed.

v) Cost of development wells

Costs incurred in preparing wells to extract hydrocarbons in Blocks I, III, IV, and V, located in Talara, are capitalized as part of intangible assets. These costs are amortized over the useful lives of the wells (estimated in remaining periods for Blocks I and V and the unit of production method for Blocks III and IV), until the end period of the agreements signed with Perupetro.

vi)	Software and development costs

Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the Corporation are recognized as intangible assets when the following criteria are met:

-	technically feasible to complete the software product so that it will be available for use;
-	management intends to complete the software product and use or sell it;
-	there is the ability to use or sell the software product;
-	it can be demonstrated how the software product will probably generate future economic benefits;
-	technical, financial and other resources are available to complete the development and to use or sell the software product; and
-	expenses incurred during its development can be reliably measured.

Other development costs that do not meet these criteria are reconized in the statement of income as incurred. Development costs previously recognized as an expense are not recognized as an asset in a subsequent period. Computer software development costs recognized as assets are amortized over their estimated useful lives, which fluctuate between 2 to 15 years.

vii) Land use rights

Refers to the rights maintained by the subsidiary Promotora Larcomar S.A. Land use of rights are stated at historical cost less amortization and any accumulated impairment losses. The useful life of this asset is based on the agreement signed (60 years) and may be extended if agreed by parties. Amortization will begin when it becomes ready for its intended use by Management.

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2.16	Impairment of non-financial assets

Assets subject to amortization are subject to impairment tests when events or circumstances occur that indicate that their book value may not be recovered. Impairment losses are measured as the amount by which the book value of the asset exceeds its recoverable value. The recoverable value of the assets corresponds to the higher of its fair value and its value in use. For purposes of the impairment assessment, assets are grouped at the lowest levels in which they generate identifiable cash flows (cash-generating units). The book value of non-financial assets other than goodwill that have been subject to write-offs for impairment is reviewed at each reporting date to verify possible reversals of impairment.

2.17	Financial liabilities

The financial liabilities of the Corporation include trade accounts payable, accounts payable to related parties, remuneration and other accounts payable. All financial liabilities are initially recognized at fair value and subsequently valued at amortized cost using the effective interest rate method.

Financial liabilities are classified as current liabilities if the payment must be made within a year or less (or in the normal operating cycle of the business if it is greater), otherwise, they are presented as non-current liabilities.

2.18	Trade accounts payable

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business. Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer), if not, they are presented as non-current liabilities.

Accounts payable are initially recognized at their fair value and subsequently are amortized at amortized cost using the effective interest method, except for accounts payable within less than one year that are recorded at their nominal value that is similar to their fair value due to its maturity in the short term.

2.19	Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include liabilities designated at initial recognition as at fair value through profit or loss.

Financial liabilities designated at initial recognition at fair value through profit or loss are designated at the initial recognition date, and only if the criteria of IFRS 9 are met. The Company has only designated the obligation with BCI Peru as a financial liability at fair value through profit or loss, see note 18.

2.20	Other financial liabilities

Corresponds to the loans and bonds issued by the Corporation, which are initially recognized at their fair value, net of the costs incurred in the transaction. These financial liabilities are subsequently recorded at amortized cost; any difference between the funds received (net of transaction costs) and the redemption value is recognized in the statement of income during the period of the loan using the effective interest method.

The costs incurred to obtain these financial liabilities are recognized as transaction costs to the extent that it is probable that part or the entire loan will be received. In this case, these charges are deferred until the time the loan is received.

2.21	Borrowing costs

Debt costs are recognized at the statement of income in the period in which they have been incurred, except for intangible assets and inventories in which the borrowing costs are capitalized.

General and specific borrowing costs directly attributable to the acquisition, construction or production of qualified assets, which are assets that necessarily take a substantial period (more than 12 months) to reach their condition of use or sale, are added to the cost of said assets until the period when the assets are substantially ready for use or sale. The Corporation suspends the capitalization of borrowing costs during the periods in which the development of activities of a qualified asset has been suspended. The income obtained from the temporary investment of specific loans that have not yet been invested in qualified assets is deducted from the borrowing costs eligible for capitalization.

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2.22	Current and deferred income tax

Income tax expense comprises current and deferred tax. Tax expense is recognized in the statement of income, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In this case, tax is also recognized in the statement of comprehensive income or directly in equity, respectively.

The current income tax is calculated based on the tax laws enacted at the date of the statement of financial position in the countries where the Company and its subsidiaries operate and generate taxable income. Management, where appropriate, establishes provisions based on amounts expected to be paid to the tax authorities.

Deferred tax is recognized on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. Deferred income tax is determined using tax rates (and legislation) that have been enacted as of the date of the statement of financial position and that are expected to be applicable when the deferred income tax is realized or paid.

Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except for deferred income tax liability where the timing of the reversal of the temporary difference is controlled by the Corporation, and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax arising from the initial recognition of goodwill is not recognized; likewise, the deferred tax is not recorded if it arises from the initial recognition of an asset or liability in a transaction that is not a business combination that does not affect the accounting or tax profit or loss at the time of the transaction.

2.23	Employee benefits

The Corporation recognizes a liability when the employee has rendered services in exchange for which is entitled to receive future payments and an expense when the Corporation has consumed the economic benefit from the service provided by the employee in exchange for the benefits in question.

The Corporation determines employee benefits in accordance with current labor and legal regulations and classifies them as short-term benefits, long-term benefits, and termination benefits.

Short-term benefits are those other than termination indemnities, whose payment is settled in the twelve months following the end of the period in which the employees have rendered the services; they correspond to current remunerations (salaries, wages and contributions to social security), annual paid and sick absences, participation in profits and incentives and other non-monetary benefits.

Long-term benefits are those benefits that must be paid more than twelve months after the end of the period in which the services were rendered. As of December 31, 2019, and 2020, the Corporation does not grant benefits in this category.

Termination benefits are those benefits payable as a result of (i) the entity’s decision to terminate the employee’s contract before the retirement date, and (ii) the employee’s decision to voluntarily accept the conclusion of the relationship of work.

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Short-term benefits:

a)	Current salaries and wages

The current remunerations are constituted by salaries, wages, contributions to social security, statutory bonuses and compensation for the time of services. Salaries, wages, and contributions to social security are settled on a monthly basis.

Entities of the Corporation recognize the expense and the related liability for statutory bonuses based on applicable laws and regulations effective in Peru, Chile, and Colombia. In Peru bonuses correspond to two monthly payments, settled one in July and one in December of each year, and accrue based on the consideration of the service.

The compensation for time of service corresponds to the indemnification rights of the staff, and is accrued based on the consideration of the service calculated according to the legislation in force in each country in which the entities of the Corporation operate and determine as follows: (i) in Peru it is equivalent to half the remuneration in force at the date of payment and this is effected by deposit in bank accounts designated by the workers in the months of May and November of each year; (ii) In Colombia, it is equivalent to 8.33% of the monthly remuneration, (iii) In Chile this benefit is not available.

b)	Annual paid absences

Annual holidays are recognized on an accrual basis. The provision for the estimated obligation for the annual vacations of personnel resulting from the services rendered by employees is recognized on the date of the consolidated statement of financial position and corresponds; (i) one month for personnel in Peru, (ii) fifteen days for personnel in Colombia, and (iii) in the case of Chile, they are subject to the worker’s seniority and range from fifteen to thirty days.

c)	Workers’ profit sharing and incentives

The workers’ profit sharing is determined on the basis of the legal provisions in force in each country where the entities of the Corporation operate, as follows: (i) in Peru it is equivalent to 5% of the taxable base determined by each entity of the Corporation, in accordance with current income tax legislation, (ii) in Chile, workers’ participation is a component of the remuneration (equivalent to 4.75 minimum wages per year) and not a determinable percentage of the profit, (iii) in Colombia these benefits are not provided to employees.

Termination benefits

The Corporation entities recognize the liability and expense for severance payments when they occur, based on the legal provisions in force in each country. In accordance with the legislation of Peru, the compensation for arbitrary dismissal for personnel with an indefinite contract amounts to 1.5 times the monthly remuneration for each year worked.

In Colombian legislation, for the first year worked, the equivalent of 30 days of salary is granted, and from the second year on, the compensation will be the equivalent of 20 days of salary for each additional year (or the proportion); in the legislation of Chile is granted compensation of thirty days of salary for each year worked with a maximum salary of 330 days.

2.24	Provisions

a) General

Provisions are recognized when i) the Corporation has a present, legal or constructive obligation as a result of past events; ii) it is probable that an outflow of resources will be required to settle the obligation; and iii) the amount has been reliably estimated. Provisions are reviewed at year - end. If the time value of money is significant, provisions are discounted using a pre-tax rate that reflects, when applicable, the specific risks related to the liability. Reversal of the discount due to the passage of time results in the obligation being recognized with a charge to the statement of income as a financial expense.

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Contingent obligations when their existence will only be confirmed by future events or their amount cannot be reliably measured. Contingent assets are not recognized and are disclosed only if it is probable that the Corporation will generate an income from economic benefits in the future.

b) Provision for the closure of production wells

The subsidiary GMP S.A. recognizes a provision for the closure of operating units that correspond to the legal obligation to close oil production wells once the production phase has been completed. At the initial date of recognition, the liability that arises from this obligation measured at its fair value and discounted at its present value, according to the valuation techniques established by IFRS 13, “Fair Value Measurement”, and is simultaneously charged to the intangible account in the consolidated statement of financial position.

Subsequently, the liability is increased in each period to reflect the financial cost considered in the initial measurement of the discount, and the capitalized cost is depreciated based on the useful life of the related asset. When a liability is settled, the subsidiaries recognize any gain or loss that may arise. The fair value changes estimated for the initial obligation and the interest rates used to discount the flows they are recognized as an increase or decrease in the book value of the obligation and the asset to which they relate to, any decrease in the provision, and any decrease of the asset that may exceed the carrying amount of said asset is immediately recognized in the consolidated statement of income.

If the review of the estimated obligation results in the need to increase the provision and, accordingly, increase the carrying amount of the asset, the subsidiaries should also take into consideration if the said increase corresponds to an indicator that the asset has been impaired and, if so, impairment tests are to be carried out (Note 2.16).

2.25	Put option arrangement

The subsidiary GyM S.A. signed a sale option contract on the equity of its subsidiary Morelco SAS (Note 32) that allows the shareholder to reallocate its shares over a period of 10 years. The amount payable under the option is initially recognized at the present value of the reimbursement under “Other accounts payable”, directly charged to equity. The charge to equity is recorded separately as put options subscribed on the non-controlling interest, adjacent to the non-controlling interest in the net assets of the consolidated subsidiaries.

Subsequently, the financial liability is updated by changes in the assumptions on which the estimation of the expected cash flows is based and by the financial component due to the passage of time. The effects of this update are recognized in results. In the event that the option expires without being exercised, the liability is written off with the corresponding adjustment to equity.

2.26

Capital

Common shares are classified as equity.

Incremental costs directly attributable to the issue of new shares or options are shown in equity, as a deduction, of the proceeds, net of taxes.

2.27	Revenue recognition from contracts with customers

Revenues from contracts with customers are recognized, for each performance obligation, either during a period of time or at a specific time, depending on which method best reflects the transfer of control of the underlying products or services to the obligation of particular performance with the client.

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The Corporation recognizes the income through the application of the five steps defined in the regulation i) identification of the contract with the client; ii) identification of performance obligations in the contract; iii) determination of the price of the transaction; iv) allocation of the transaction price for performance obligations; and v) recognition of income when (or as) a performance obligation is satisfied.

Subsequently, the Corporation policy of recognition of each type of income according to IFRS 15:

i) Engineering and construction

Revenues from engineering and construction contracts are recognized over time as the Corporation performs its obligations because there is a continuous transfer of control of the deliverable to the customer pursuant to the terms of such contracts. For this reason, the Corporation accounts for revenue over time by measuring the progress towards complete satisfaction of its performance obligations under each contract. In this manner, revenues are accounted for using the percentage-of-completion method, based on surveys of performance by the Corporation’s experts who review the work performed to date under each contract.

The Corporation recognizes revenue based on surveys of work to date, using the output method, which is the direct measurement of the value to the customer of the construction services completed to date relative to the remaining services to be performed under the contract. The Corporation believes that the use of the output method based on surveys of performance provides a faithful depiction of the transfer of services by the Corporation to the customer because it reflects an enforceable right to payment from the Corporation for the work completed to date.

The contract generates assets when the costs incurred are greater than the cost associated with those revenues. Otherwise, liabilities are generated for the accrued costs not invoiced. When it is probable that the total costs of the contract will exceed the related revenue, the expected loss is immediately recognized.

Revenues for additional work resulting from a modification or an instruction received from the customer to make a change in the scope of work or the price, or both, will result in an increase in contract revenue. The Corporation does not account for contract modifications unless approved by the customer. In addition, the Corporation reviews the enforceability of changes to the rights and obligations in contract modifications.

As part of its evaluation of whether changes to the rights and obligations in a contract modification are enforceable, the Corporation considers whether one or more of the following factors has been satisfied: a) the contract, applicable law or other evidence provides a legal basis for the modification; b) additional costs were caused by circumstances that were unforeseen on the date of execution of the contract and not a result of deficiencies incurred by the Corporation’s performance; c) modification-related costs are identifiable and considered reasonable in view of the work performed; or d) evidence supporting the modification is objective and verifiable. When one or more of the foregoing factors is satisfied, the changes to the rights and obligations in the contract modification are considered by the Corporation to be enforceable.

The Corporation estimates the change in the transaction price arising from the contract modification if the transaction price has not yet been approved by the customer in accordance with the requirements of IFRS 15 to estimate variable consideration. In order to include variable consideration related to a contract modification in the estimated transaction price, the Corporation must conclude that it is ‘highly probable’ that a significant revenue reversal will not occur. The Corporation determines the probability that the revenue reversal will occur (and therefore whether such price will be recovered) based on an analysis of whether any of the following factors is present: i) contractual entitlement; ii) past practices with the customer; iii) specific discussions or preliminary negotiations with the customer; and iv) verbal approval by the customer. If, as a result of such analysis, the Corporation concludes that it is ‘highly probable’ that a significant reversal in the amount of revenue recognized will not occur, it recognizes the variable consideration relating to the contract modification.

When the contract profit cannot be estimated reliably, the associated revenue is recognized to the extent of costs incurred are recoverable. Revenue is billed once approval is received by the owners of the work in progress.

The nature of certain contracts, such us cost-plus fee contracts in its E&C segment and unit price or similar contracts in its E&C segment and certain services it provides in its Infrastructure segment, give rise to variable consideration. Depending on the type of contract, this variable consideration may include reimbursable or target costs; variable number of units; award and incentive fees; and penalties. The Corporation estimates the amount of revenue to be recognized as variable consideration using the expected value method or the most likely amount method, whichever is expected to better predict the amount of consideration to which the Corporation will be entitled. These methods require the Corporation to estimate costs, unit quantities, award/incentive fees and penalties. In making such estimates, judgments are required to evaluate potential variances in the cost of materials, the cost of labor, productivity levels, the impact of change orders, liability claims and contract disputes, the achievement of contractual performance standards, and other contingencies.”

ii)	Real-estate – Real estate, urban and industrial lots

Sale of Real estate

Revenue from sales of real estate properties is recognized when control over the property has been transferred to the client with the delivery record. Revenue is measured based on the price agreed under the contract. Until this is met, the incomes received will be counted as customer advances. These sales contracts have two performance obligations: i) the one corresponding to the transfer of the property, which includes the common areas of the building where these real estates are located, and ii) the one corresponding to the transfer of the common area outside the real estate assets but that are part of the real estate projects, which are recognized when the common area has been delivered.

Sale of urban lots

Revenue related to sales of urban lots is recognized when control over the property is transferred to the customer. Until this is met, the incomes received will be recognized as customer advances. Revenue is measured based on the transaction price agreed under the contract. These sales contracts have a single performance obligation for the sale of lots, which is executed upon delivery of the sale of the assets.

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Sale of industrial lots

Revenue related to sales of industrial lots is recognized when control over the property has been transferred to the customer. Until this is met, the incomes received will be counted as customer advances. These sales contracts have two performance obligations: i) transfer of the industrial lot and ii) urban authorization of the industrial lot.

iii) Infrastructure

Income for provided services of oil and gas extraction, fuel dispatch and other services

The revenue from providing these services is recognized at the time the service is provided, calculating the service actually provided as a portion of the total services to be provided. This type of income has a single performance obligation; that is performed when the service is provided at a time moment.

Income from the sale of oil and derivative products

Revenue from the sale of goods is recognized when the control of the assets is transferred to the customer, which is when the goods are delivered. In this type of income there is only one performance obligation for the sale of oil; which is executed at the delivery of the goods.

Income from concession services

Revenues from concession services correspond to operation and maintenance services, and are recognized according to their nature in the period in which the service is provided. In this revenue there is only one performance obligation, executed when the service is provided.

2.28	Recognition of cost and expenses

Engineering and construction contracts

Contract costs include all direct costs such as materials, labor, subcontracting costs, manufacturing and supply costs of equipment, start-up costs, depreciation and amortization, and indirect costs. Periodically, the Group evaluates the reasonableness of the estimates used in the determination of the total estimated contract cost. If, as a result of this evaluation, there are modifications to the revenue or cost previously estimated, or if the total estimated cost of the project exceeds expected revenues, an adjustment is made in order to reflect the effect in results of the period in which the adjustment or loss is incurred.

Costs for sale of oil and derivative products

The costs of the services rendered and the costs of sales of petroleum and derivative products are recognized when they are incurred, simultaneously with the recognition of related revenues. Other costs and expenses are recognized as they accrue, regardless of when they are paid and are recorded in the accounting periods to which they relate.

Costs for concession operation services

The costs of the operation and maintenance services are recognized when they are incurred, simultaneously with the recognition of related revenues. Other costs and expenses are recognized as they are accrued, regardless of when they are paid and are recorded in the accounting periods with which they are related.

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2.29

Leases

Lease contracts are analyzed for the purpose of identifying those containing the characterisctics according to IFRS 16 Leases (hereinafter “IFRS 16”) for recognition, measurement, presentation and disclosure.

The Corporation evaluates in every lease contract the following:

●	If you have the right to control the use of the identified asses,
●	If the contract term is longer that twelve months,
●	If the underlying asset amount is a material amount, and,
●	That the fees to be paid are not entirely variable.

a) Leases in which the Corporation is a lessee

The Corporation recognizes a right-of-use asset and a lease liability as of the beginning of the lease.

The right-of-use asset is initially measured by the initial amount of the lease liability adjusted for any lease payment made on or before the start date, plus the initial direct costs incurred. The right-of-use assets are depreciated in a straight line, from the start date until the end of the lease contract. The term of the lease includes the periods covered by an option to extend the contract if the Corporation is reasonably sure to exercise that option.

The lease liability is the total unpaid installments, measured at amortized cost using the effective interest method. It is measured again when there is a change in future lease payments that arise from a change in an index or rate, if there is a change in the Corporation's estimate of the amount expected to be paid under a residual value guarantee, or if the Corporation changes its assessment of whether it is sure that it will exercise a purchase, extension or term option.

When the lease liability is measured again, the carrying amount of the right-of-use asset is adjusted.

In engineering and construction segment, interest expenses related to leasing contracts of the core business are reported in gross margin; the rest of the Corporation segments, report them in financial expenses.

Operational cash flows will be greater since cash payments for the main portion of the lease debt are classified within the financing activities. Only the part of the payments that reflects interest can continue to be presented as operating cash flow.

b) Leases in which the Corporation is a lessor

Liabilities for operating leases and assets are included in the statement of financial position according to the nature of the asset. Revenues from operating leases are recognized in a straight line over the term of the lease agreement and the incentives granted to lessees are reduced from rental income.

Based on the foregoing, the Corporation as lessor has not changed the recognition of its leases.

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2.30 Dividend distribution

Dividend distribution to the Corporation shareholders is recognized as a liability in the financial statements in the period in which the dividends are approved.

2.31	Significant non-operating items

Significant non-operating items are separately shown in the financial statements when they are necessary to provide an adequate understanding of the Corporation’s financial performance. These material items are income or expenses shown separately due to their nature or significant amount.

2.32 Account balance reclassified as of December 31, 2019

	a)	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”.

	b)	Information on the subsidiary Adexus S.A. is presented. (hereinafter “Adexus”), whose main activity is to provide information technology solutions mainly in Chile and Peru, as of December 31, 2019 the subsidiary was recognized as a non-current asset held for sale; However, as of September 30, 2020, it was reclassified as a continuing operation for the reasons set forth in Note 36.

As a result of this process, the balances in the consolidated statement of financial position are reclassified as follows:

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	As of								As of
	December 31,								December 31,
	2019		Reclassified (a)			Adexus (b)			2019
ASSETS	Audited								As restated
Current assets
Cash and cash equivalents		948,978		-			1,723			950,701
Trade accounts receivables, net		821,737		-			92,467			914,204
Work in progress, net		49,457		-			-			49,457
Accounts receivable from related parties		36,658		-			-			36,658
Other accounts receivable		444,500		-			9,974			454,474
Inventories, net		552,573		-			2,828			555,401
Prepaid expenses		11,348		-			5,130			16,478
		2,865,251		-			112,122			2,977,373

Non-current assets as held for sale		205,418		-			(203,020	)		2,398

Total current assets		3,070,669		-			(90,898	)		2,979,771

Non-current assets
Trade accounts receivable, net		753,202		-			26,407			779,609
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	)		891			273,432
Investments in associates and joint ventures		37,035		-			-			37,035
Investment property		28,326		-			-			28,326
Property, plant and equipment, net		443,870		-			20,120			463,990
Intangible assets, net		853,315		-			912			854,227
Right-of-use assets, net		78,813		-			11,768			90,581
Deferred income tax asset		240,919		-			30,800			271,719
Total non-current assets		3,333,795		-			90,898			3,424,693

Total assets		6,404,464		-			-			6,404,464

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	As of								As of
	December 31,								December 31,
	2019			Reclassified (a)		Adexus (b)			2019
	Audited								As restated
LIABILITIES AND EQUITY
Current liabilities
Borrowings		454,260			-		27,269			481,529
Bonds		44,737			-		-			44,737
Trade accounts payable		1,136,121			-		22,954			1,159,075
Accounts payable to related parties		38,916			-		-			38,916
Current income tax		47,999			-		3,170			51,169
Other accounts payable		635,305			-		34,369			669,674
Provisions		113,483			-		-			113,483
Total current liabilities		2,470,821			-		87,762			2,558,583

Non-current liabilities as held for sale		210,025			-		(210,025	)		-

Total current liabilities		2,680,846			-		(122,263	)		2,558,583

Non-current liabilities
Borrowings		344,806			-		64,260			409,066
Bonds		879,305			-		-			879,305
Trade accounts payable		-			-		34,814			34,814
Other accounts payable		273,101			-		23,189			296,290
Accounts payable to related parties		22,583			-		-			22,583
Provisions		214,952			-		-			214,952
Derivative financial instruments		52			-		-			52
Deferred income tax liability		112,734			-		-			112,734
Total non-current liabilities		1,847,533			-		122,263			1,969,796
Total liabilities		4,528,379			-		-			4,528,379

Equity
Capital		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	)		-		-			(177,506	)
Retained earnings		(510,766	)		-		-			(510,766	)
Equity attributable to controlling interest in the Company		1,477,810			-		-			1,477,810
Non-controlling interest		398,275			-		-			398,275
Total equity		1,876,085			-		-			1,876,085
Total liabilities and equity		6,404,464			-		-			6,404,464

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

- 32 -

	For the year ended
	December 31, 2019
	Reported			Adexus			As restated


Revenues from construction activities		2,411,880			-			2,411,880
Revenues from services provided		1,089,465			164,594			1,254,059
Revenue from real estate and sale of goods		583,659			88,263			671,922
		4,085,004			252,857			4,337,861

Cost of construction activities		(2,351,563	)		-			(2,351,563	)
Cost of services provided		(866,326	)		(168,925	)		(1,035,251	)
Cost of real estate and sale of goods		(425,352	)		(75,258	)		(500,610	)
		(3,643,241	)		(244,183	)		(3,887,424	)
Gross profit		441,763			8,674			450,437

Administrative expenses		(213,908	)		(34,744	)		(248,652	)
Other income and expenses		(326,754	)		(12,740	)		(339,494	)
Operating loss		(98,899	)		(38,810	)		(137,709	)

Financial expenses		(231,709	)		(21,425	)		(253,134	)
Financial income		74,656			(310	)		74,346
Share of the profit or loss of associates and joint ventures accounted for using the equity method		(218,774	)		-			(218,774	)
Loss before income tax		(474,726	)		(60,545	)		(535,271	)
Income tax expense		(319,957	)		16,586			(303,371	)
Loss from continuing operations		(794,683	)		(43,959	)		(838,642	)

(Loss) profit from discontinued operations		(43,959	)		43,959			-
Loss for the year		(838,642	)		-			(838,642	)

(Loss) profit attributable to:
Owners of the Company		(884,721	)		-			(884,721	)
Non-controlling interest		46,079			-			46,079
		(838,642	)		-			(838,642	)

3 STANDARDS, AMENDMENTS, AND INTERPRETATION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS

a) New standards and amendments to standards and interpretations adopted by the Company in 2020

The following accounting standards (IFRS), amendments to standards and interpretations are effective as of January 1, 2020, and have had no impact on the Company's consolidated financial statements:

•	Amendments to IAS 1 and IAS 8 - Definition of materiality.

	The amendments provide a new definition of "materiality" as information the omission of which, through error or obstruction, would reasonably be expected to influence the decision-making of the primary users of the financial statements. The amendments clarify that materiality will depend on the nature or extent of information, individually or aggregated with other information, in the context of the financial statements.

•	Amendments to IFRS 3 - Definition of a Business

	The amendments provide a new definition of business that requires an acquisition to include at least one input and one substantive process that together contribute significantly to the ability to create products. The definition of the term "products" is modified to focus on goods and services provided to customers, generating investment and other income, and excludes returns in the form of lower costs, savings and other economic benefits.

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•	Amendments to IFRS 7, IFRS 9 and IAS 39 - Benchmark interest rate reform The amendments to IFRS 7 Financial Instruments: Disclosures, IFRS 9 Financial Instruments and IAS 39 Financial Instruments: Recognition and Measurement provide certain exemptions in relation to benchmark interest rate reforms. The exemptions relate to hedge accounting and have the effect that the reforms should generally not cause the termination of hedge accounting. However, any hedge ineffectiveness will continue to be recorded in the income statement.

•	Modifications to the Conceptual Framework for Financial Reporting

The revised conceptual framework includes some new concepts and definitions, as well as criteria for recognition of assets and liabilities, and clarifies some concepts. In particular, the IASB has issued a revised Conceptual Framework to be used for standard-setting decisions with immediate effect. Key changes include:

	(i) Increasing the importance of management in the objective of financial reporting.
	(ii) Restoring prudence as a component of neutrality.
	(iii) Defining a reporting entity, which may be a legal entity, or a part of an entity.
	(iv) Revise the definitions of an asset and a liability.
	(v) Eliminate the probability threshold for recognition and add guidance on derecognition.
	(vi) Add guidance on different measurement bases; and
	(vii) establishing that profit or loss is the primary performance indicator and that, in principle, income and expenses in other comprehensive income should be recycled when this improves the relevance or faithful representation of the financial statements.

	These amendments had no impact on the consolidated financial statements and are not expected to have future impacts on the Company.

•	Amendment to IFRS 16 "Leases" – Rent decrease related to Covid-19

	This amendment was issued on May 28, 2020, is applicable for annual periods beginning on June 1, 2020 and provides an exemption in relation to the accounting treatment of lease modifications under IFRS 16 to lessees that obtain lease modifications in the context of Covid-19 (payment holidays and extension of lease payments).

	The application of this amendment had no significant impact on the Company's consolidated financial statements as of December 31, 2020.

b) New standards and interpretations that have not been adopted in advance

The following standards, amendments to standards and interpretations have been published with application for periods beginning after the date of presentation of these financial statements and have not been adopted in advance:

•	Amendment to IAS 1: Classification of Liabilities as current or non-current.

	The amendments to IAS 1 Presentation of Financial Statements clarify that liabilities are classified as current or non-current, depending on the rights that exist at the end of the reporting period. The classification is not affected by the entity's expectations or events after the reporting date (e.g., receipt of a waiver or breach of covenant).

	The amendments also clarify what IAS 1 means when it refers to the 'settlement' of a liability.

	The amendments could affect the classification of liabilities, particularly for entities that previously considered management's intentions in determining classification and for some liabilities that may be converted to equity.

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	The amendments should be applied retrospectively in accordance with the normal requirements of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors.

	The amendments are effective for annual reporting periods beginning on or after January 1, 2023 and should be applied retrospectively.

•	Amendment to IAS 16 - Property, Plant and Equipment: Property, Plant and Equipment: Property, Plant and Equipment: Product before use

	This amendment prohibits entities from deducting from the cost of an item of Property, Plant and Equipment any income from the sale of items produced while bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. Instead, an entity should recognize the proceeds from the sale of such items, and the production costs associated with those items, in profit or loss.

	Likewise, the amendment clarifies that when IAS 16 indicates that an entity is "testing whether the asset is operating properly", it refers to the physical and technical evaluation, the financial performance of the asset being not relevant.

	This modification is effective from January 1, 2022 and must be applied retrospectively.

•	Amendments to IFRS 3 - reference to the Conceptual Framework

	Minor amendments were made to IFRS 3 Business Combinations to update the references to the Conceptual Framework for Financial Reporting and to add an exception for the recognition of liabilities and contingent liabilities within the scope of IAS 37 Provisions, Contingent Liabilities and Contingent Assets and IFRIC Interpretation 21 Liens.

	The amendments also confirm that contingent assets should not be recognized at the acquisition date.

	The amendment will be effective for annual reporting periods on or after January 1, 2022.

•	Onerous Contracts - Cost of fulfilling a contract - Amendments to IAS 37

	In May 2020, the International Accounting Standards Board issued amendments to IAS 37 to specify which cost an entity needs to include when assessing whether a contract is onerous or loss making.

	The amendment to IAS 37 clarifies that direct contract performance costs include both incremental contract performance costs and an allocation of other costs directly related to the performance of contracts. Before recognizing a separate provision for an onerous contract, an entity recognizes any impairment loss that has occurred on assets used to fulfill the contract.

	The amendment is effective for annual reporting periods beginning on or after January 1, 2022.

	The Company will apply this modification to contracts for which it has not yet fulfilled all its obligations at the beginning of the annual reported period, in which it is the first time the modifications are applied.

•	Annual Improvements to IFRSs 2018-2020 Cycle

	As part of its 2018-2020 annual improvements to the IFRS standard process in May 2020 the IASB issued the following amendments:

	(i) IFRS 9 Financial Instruments - clarifies which fees should be included in the 10% test for derecognition of financial liabilities.
	(ii) IFRS 16 Leases - amended Illustrative Example 13 to remove the illustration of lessor payments related to leasehold improvements, to eliminate any misinterpretation on the treatment of lease incentives.

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	(iii) IFRS 1 First-time Adoption of International Financial Reporting Standards - permits entities that have measured their assets and liabilities at the carrying amounts recorded in the books of their parent to also measure any cumulative translation differences using the amounts reported by the parent. This amendment will also apply to associates and joint ventures that have taken the same IFRS 1 exception.

	The amendments will be effective for annual reporting periods beginning on or after January 1, 2022 with early adoption permitted.

•	Amendment to IFRS 10 and IAS 28 - Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

	The IASB has made limited scope amendments to IFRS 10 "Consolidated Financial Statements" and IAS 28 "Investments in Associates and Joint Ventures".

	The amendments clarify the accounting treatment of sales or contributions of assets between an investor and its associates or joint ventures. They also confirm that the accounting treatment will depend on whether the non-cash assets sold or contributed to an associate or joint venture constitute a "business" (as defined in IFRS 3 "Business Combinations").

	When the non-monetary assets constitute a business, the investor shall recognize the full gain or loss from the sale or contribution of the assets. If the assets do not meet the definition of a business, the gain or loss is recognized by the investor only to the extent of the investment of the other investors in the joint venture associate. These amendments will be applied prospectively.

	In December 2015, the IASB decided to defer the date of application of this amendment until its research project on the equity method has been completed.

	The amendments will be effective for annual reporting periods beginning on or after January 1, 2023 and should be applied retrospectively to items of property, plant and equipment made available for use on or after the beginning of the earliest period presented when the entity first applied the amendment.

The Company is currently evaluating the impact that the modifications or amendments described before may have on current practice.

4 FINANCIAL RISK MANAGEMENT

Financial risk management is carried out by the Corporation’s Management. Management oversees the general management of financial risks, 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 monitoring periodically.

4.1 Financial Risk Factors

The Corporation’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, price risk, fair value interest rate risk and cash flow interest rate risk), credit risk and liquidity risk. The Corporation’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Corporation’s financial performance. The Corporation 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 Corporation in the short and medium-term.

a) Market risks

i) Foreign exchange risk

The Corporation is exposed to exchange rate risk as a result of the transactions carried out locally in foreign currency and due to its operations abroad. As of December 31, 2019, and 2020 this exposure is mainly concentrated in fluctuations of U.S. dollar, the Chilean and Colombian Pesos.

As of December 31, 2020, the balances of financial assets and liabilities denominated in foreign currencies correspond to balances in U.S. dollars, which are expressed at the published bid and ask exchange rate in effect at that date, according to the currency exchange rate: soles for S/3.624 published by the Superintendency of Banking, Insurance and Pension Fund Administrators (SBS), Chilean pesos for CLP711.24 published by the Central Bank of Chile and Colombian pesos for COP3,432.50 published by Banco of the Republica of Colombia.

- 36 -

As of December 31, the consolidated statement of financial position includes the following:

		2019		2020
	S/(000)	USD(000)	S/(000)	USD(000)

Assets	2,868,128	864,675	2,125,400	586,479
Liabilities	1,754,630	528,981	1,165,475	321,599

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

	2019			2020


Gain		392,942			426,851
Loss		(425,782	)		(432,653	)

As of December 31, 2020 the Peruvian Sol, the Chilean and Colombian Pesos had strengthened/weakened by 2% against the U.S. dollar, with all other variables held constant, the pre-tax results for the year would have increased/decreased by S/0.1 million (S/0.7 million in 2019).

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

			2019				2020
	Assets		Liabilities		Assets		Liabilities

Chilean Pesos		53,383,866		65,260,543		40,869,086		74,151,415
Colombian Pesos		187,119,204		76,446,723		113,350,078		54,581,654

The Corporation’s foreign exchange translation adjustment for 2020 was positive by S/8.3 million (in 2019, S/8.2 million, negative).

ii) Price risk

Management considers that the exposure of the Corporation to the price risk of its investments in mutual funds, bonds, and equity securities is low since the invested amounts are not significant. Any fluctuation in their fair value will not have any significant impact on the balances reported in the consolidated financial statements.

iii) Cash flow and fair value interest rate risk

The Corporation’s interest rate risk mainly arises from its long-term borrowings. Borrowings issued at variable rates expose the Corporation to cash flow interest rate risk. Borrowings issued at fixed rates expose the Corporation to fair value interest rate risk. Group policy is to maintain most of its borrowings at fixed rate instruments; 62.3% of total debt in 2020 (61.8% in 2019) was contracted at fixed rates and 37.7% at variable rates (38.2% in 2019) which consisted of a 37.5% fixed rate plus VAC (adjusted for inflation) and the remaining 0.2% at a variable rate (37.7% fixed rate + VAC and the remaining 0.5% at a variable rate in 2019).

- 37 -

During 2019 and 2020, the debt subject to fixed rate plus VAC is related to a bond issued in Peruvian Sol to finance the GyM Ferrovias Project, Metro Line 1 (Note 19). Any increase in the interest rate resulting from higher inflation will have no significant impact on the Corporation’s profit because these revenues are also adjusted for inflation.

In the event that the Corporation accrues variable interest rates in soles and U.S. dollars, the policy would be to hedge the cash flow risk with interest rate swap-type derivatives, on which the hedge accounting treatment is applied.

As of December 31, 2019, the libor rate plus three months had increased/decreased by 5%, with all other variables held constant, the pre-tax results for the year would have increased/decreased by S/0.01 million. In 2019 there was no significant ineffectiveness in the cash flow hedge. In 2020, it was not necessary to perform the sensitivity analysis since the variable rate debt was not significant.

b) Credit risk

Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions, as well as customer credit counterparties, including the outstanding balance of accounts receivable and committed transactions.

Concerning to loans to related parties, the Corporation has measures in place to ensure the recovery of these loans through the controls maintained by the Corporate Finance Management and the performance evaluation conducted by the Board.

Management does not expect the Corporation to incur any losses from the performance by these counterparties, except for the ones already recorded at the financial statements.

c) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and cash equivalents, the availability of funding through an adequate number of sources of committed credit facilities and the capacity to close out positions in the market. Historically, the Group cash flows enabled it to meet its obligations. Due to the COVID-19 pandemic (Note 1-d), the Company has implemented various actions to reduce its exposure to liquidity risk, and has developed a Financial Plan based on several steps, which were designed assuming attaining a plea bargain agreement within a reasonable time frame. The Financial Plan aims to enable compliance with the various obligations at the corporate and group companies’ levels.

The Group’s Corporate Finance Office 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 Corporation’s debt financing plans, covenant compliance, compliance with internal statement of financial position ratio targets and, if applicable, external regulatory or legal requirements, for example, foreign currency restrictions.

Surplus cash held by the operating entities over the balance required for working capital management is invested in interest-bearing checking accounts or time deposits, selecting instruments with appropriate maturities and sufficient liquidity.

- 38 -

The table below analyzes the Corporation’s financial liabilities into relevant maturity groupings based on the remaining period from the date of the consolidated statement of financial position to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

	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)		501,864		147,473		235,222		-		884,559
Finance leases		11,438		3,531		13,346		-		28,315
Lease liability for right-of-use asset		31,036		40,808		32,562		11,551		115,957
Bonds		115,690		157,516		358,461		1,077,960		1,709,627
Trade accounts payables (except
non-financial liabilities)		989,574		-		34,814		-		1,024,388
Accounts payables to related parties		38,916		21,747		-		836		61,499
Other accounts payables (except
non-financial liabilities)		220,602		2,505		219,788		-		442,895
Other non-financial liabilities		-		52		-		-		52
		1,909,120		373,632		894,193		1,090,347		4,267,292

	Less than			1-2		2-5	More than
At December 31, 2020	1 year		years		years		5 years		Total

Other financial liabilities (except
for finance leases and lease
liability for right-of-use asset)		433,318		183,796		197,785		23,953		838,852
Finance leases		16,287		14,919		20,851		8,515		60,572
Lease liability for right-of-use asset		24,714		32,006		19,847		11,131		87,698
Bonds		137,090		168,673		385,919		971,543		1,663,225
Trade accounts payables (except
non-financial liabilities)		1,001,470		40,502		-		-		1,041,972
Accounts payables to related parties		43,818		35,461		-		836		80,115
Other accounts payables (except
non-financial liabilities)		288,037		2,185		115,321		-		405,543
		1,944,734		477,542		739,723		1,015,978		4,177,977

4.2	Capital management risk

The Corporation’s objectives when managing capital are to safeguard the Corporation’s ability to continue as a going concern in order to provide returns for shareholders, benefits for other stakeholders and to maintain an optimal capital structure to minimize the cost of capital. In 2017 the situation of the Corporation had lead Management to monitor deviations that might cause the non-compliance of covenants and may hinder renegotiation of liabilities (Note18-a). In extraordinary situations and events as explained in Note 1 d), the Corporation identifies potential deviations and requirements and establishes a plan.

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

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

As of December 31, 2019, and 2020, the gearing ratio is presented below indicating the Corporation’s strategy to keep it in a range from 0.10 to 0.70.

- 39 -

	2019			2020
Total financial liabilities and bonds (Note 18 and Note 19)		1,814,637			1,831,079
Less: Cash and cash equivalents (Note 9)		(950,701	)		(900,168	)
Net debt		863,936			930,911
Total equity		1,876,085			1,689,176
Total capital		2,740,021			2,620,087

Gearing ratio		0.32			0.36

4.3	Fair value estimation

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

-	Level 1:	Measurement based on quoted prices in active markets for identical assets or liabilities.
-	Level 2:	Measurement based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices).
-	Level 3:	Measurement based on inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs, generally based on internal estimates and assumptions of the Corporation).

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

	Level 2	Level 3

At December 31, 2019

Financial liabilities
Derivatives used for hedging (a)	52	-

At December 31, 2020

Financial liabilities
Other financial entities (Note 18-d)	-	152,523

(a) As of December 31, 2020, this financial liability was liquidated.

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.

5.1 Critical accounting estimates and assumptions

The Corporation makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below.

a)	Evaluation of the impairment of goodwill and other fixed assets of definite useful life and intangible assets of indefinite useful life

- 40 -

Impairment reviews are undertaken annually to determine if goodwill arising from business acquisitions and other intangible assets with indefinite useful life are impaired, in accordance with the policy described in Note 2.15-i). For this purpose, goodwill is allocated to the different Cash Generating Unit (“CGU”) to which it relates while other intangible assets with indefinite useful life are assessed individually.

If the Corporation experiences a significant drop in revenues or a drastic increase in costs or changes in other factors, the fair value of their business units might decrease. If management determines that the factors reducing the fair value of the business are permanent, those economic factors will be taken into consideration to determine the recoverable amount of those business units and therefore, goodwill, as well as other intangible assets with indefinite useful life may be deemed to be impaired, which may cause their write-down.

As of December 31, 2019, and 2020 the Corporation has performed a sensitivity analysis increasing or decreasing the assumptions of gross margin, discount rate, and revenue and terminal growth rate by a 10%, with all the other variables held constant, as follows:

- 41 -

	Difference between recoverable amount and carrying amounts
				2019				2020

Goodwill

Gross margin		(10	%)	+10	%	(10	%)	+10	%
Engineering and construction		(25.54	%)	(4.25	%)	(8.30	%)	37.10	%
Electromechanical		35.63	%	52.97	%	41.81	%	55.60	%
Discount rate:		(10	%)	+10	%	(10	%)	+10	%
Engineering and construction		(4.30	%)	(23.09	%)	32.68	%	0.53	%
Electromechanical		48.89	%	39.92	%	52.32	%	45.23	%
Terminal growth rate:		(10	%)	+10	%	(10	%)	+10	%
Engineering and construction		(16.31	%)	(13.38	%)	11.58	%	17.44	%
Electromechanical		42.36	%	46.32	%	46.83	%	50.65	%

Trademarks

Revenue growth rate:	(10	%)	+10	%	(10	%)	+10	%
Morelco	22.14	%	60.11	%	59.65	%	123.51	%
Vial y Vives - DSD	110.69	%	72.38	%	(1.04	%)	2.79	%

Discount rate:	(10	%)	+10	%	(10	%)	+10	%
Morelco	63.02	%	23.56	%	124.29	%	66.82	%
Vial y Vives - DSD	78.72	%	106.64	%	(6.56	%)	9.95	%

Terminal growth rate:	(10	%)	+10	%	(10	%)	+10	%
Morelco	37.49	%	44.02	%	86.47	%	97.09	%
Vial y Vives - DSD	88.07	%	95.20	%	(9.14	%)	11.05	%

Goodwill

In 2020, if the gross margin had been 10% less than management's estimate, the Corporation would have had to recognize an impairment provision for goodwill of the Engineering and Construction CGU (Morelco); however, if the discount rate or terminal growth rate had been 10% less or 10% more than management's estimate, it would not have had to recognize an impairment provision. In 2019, if these assumptions had been 10% less or 10% more than Management's estimate, the Corporation would not have recognized a provision for impairment of goodwill in the Electromechanical CGU (GMA); however, at the same variation, the Corporation would have to recognized a provision for impairment of the Engineering and Construction (Morelco).

As a result of these assessments, as of December 31, 2020, no impairment provision was identified. As of December 31, 2019, an impairment of the goodwill in Morelco was identified and recorded in the Engineering and Construction CGU (Note 17).

Trademarks

In 2020, if the revenue growth rate, terminal growth rate, or discount rate were 10% below Management's estimates, the Corporation would have had to recognize a provision for trademark impairment in Vial y Vives-DSD. In 2019, if these assumptions had been 10% less or 10% more than Management's estimates, the Corporation would have not recognized a provision for impairment in trademarks.

As a result of these assessments, as of December 31, 2020, no impairment provision was identified. As of December 31, 2019, a reversal of goodwill impairment was identified and recorded in the Engineering and Construction CGU, trademark impairment in Vial y Vives-DSD (Note 17).

- 42 -

Review of carrying amounts of GMP's long-lived assets

At the date of each consolidated statement of financial position, the Group reviews the carrying amounts of its non-financial assets with finite useful lives to determine whether there is any indication that their carrying amounts are impaired. If there is any indication of impairment, the recoverable amount of the asset is estimated in order to determine, if applicable, the amount of the impairment.

The determination of whether an asset or group of assets is impaired involves management's estimates with a certain level of uncertainty, such as future oil and gas (commodity) prices, effects of inflation on operating expenses, discount rates, production profiles and the outlook for world supply and demand conditions for crude oil, natural gas and refined products. Expected future cash flows are determined using management's best estimate of future oil and gas prices and reserve volumes.

The level of expected future production in any impairment test is based on assumptions about future oil and gas prices, development and production costs, current tax regimes, among other factors.

As a consequence of the decrease in crude oil and gas prices at international level, the Group performed an impairment test of its long-lived assets belonging to its Cash Generating Units (hereinafter CGU), crude oil and non-associated gas, Block I, Block V, Block III, Block IV and the Pariñas Gas Plant, respectively, for which it used the value in use approach, since it has considered within its maintenance capex cash flows and the pre-tax valuation has been performed.

Management based its estimates of expected future cash flows to determine the recoverable value on i) information on reserves determined by technical management; and ii) estimated future prices and costs projected by management, using the following assumptions:

•	Projection horizon of the concession of its lots, (Block I until 2021, Block V until 2023, Block III until 2045, Block IV until 2045 and gas plant until 2046).

•

Future prices projected based on information available in the market at the date of the consolidated statement of financial position, based on a "Crude Oil Brent" price forecast and published by the Energy Information Administration (EIA) starting at US$/bbl57.50, reaching US$/bbl100.25 in the long term for crude oil. Likewise, the prices for the Company have been considered a reference price starting at US$/bbl57.50 up to US$/bbl98.68 in the long term.

•	Future costs projected by Management based on the estimated evolution of the business, considering the investment plan reported to Perupetro S.A.

•	Actual discount rate for the four Lots is 11.09% and for the Plant 10.17%, which is the weighted average cost of capital (WACC) rate, determined in accordance with the Company's policies, before taxes.

The recoverable value determined by the Company for crude oil following the value in use approach was S/783.8 million, which is higher than the carrying value of the CGU's S/361 million, therefore management concludes that it is not required to recognize an impairment recovery of its assets (Level 3).

Sensitivity analysis

The sensitivity of the results obtained from the impairment test above to changes in the assumptions used by management is detailed below:

-	Changes in projected future prices based on information available in the market at a date close to the date of approval of the consolidated financial statements by the Board of Directors. This assumption has considered a decrease in quoted oil and gas prices at December 31, 2019 by 10%.

-	Changes in the discount rate: If the discount rate used by management were to increase by 10%.

As a result of the volatility of oil and gas prices in the international and local market, the Company sensitized the prices and discount rates in its expected cash flow model according to the assumptions included obtaining the recoverable values as of December 31, 2020. Assuming that prices had been reduced by 10%, and the discount rate had been increased by 10%, this would have resulted in a negative variation in the Company's value in use of 29.2%. Although there is a high level of uncertainty, the impact is not significant in the separate financial statements, which is still higher than the carrying value of the CGU's S/194 million.

b) Income taxes

Determination of the tax obligations and expenses requires interpretations of the applicable tax laws and regulations. The Corporation seeks legal and tax counsel before making any decision on tax matters.

Deferred income tax assets and liabilities are calculated on the temporary differences arising between the tax basis of assets and liabilities and the amounts stated in the financial statement of each entity that makes up the Corporation, using the tax rates in effect in each of the years in which the difference is expected to reverse. Any change in tax rates will affect the deferred income tax assets and liabilities. This change will be recognized in the consolidated statement of income in the period in which the change takes effect.

Deferred income tax assets are recognized only to the extent that it is probable that future taxable profits will be available against which deductible temporary differences and tax loss carryforwards can be utilized. For this purpose, the Corporation takes into consideration all available evidence, including factors such as historical data, projected income, current operations, and tax planning strategies. A tax benefit related to a tax position is only recognized if it is more likely than not that the benefit will ultimately be realized.

The Corporation’s possible maximum exposure to tax contingencies amount to S/147.7 million.

The income tax for the year includes Management's evaluation of the amount of taxes to be paid in uncertain tax positions, where the liabilities have not yet been agreed with the tax administration.

c) Percentage of completion revenue recognition

Service revenues based on construction contracts are recognized by the percentage of completion method, which requires estimating the margin will be obtained culminating works. Projections of these margins are determined by management based on their budgets execution and adjusted periodically in order to use updated information to reflect actual performance in the work. In this regard, management believes that the estimates made at the end of the year are reasonable. When changes occur not approved in the scope of work, income is recognized as equivalent to the cost incurred (no profit is recognized) until it has been approved the additional work.

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The revenue of the contract is recognized as such in the consolidated statement of comprehensive income in the accounting periods in which the work was executed. Costs related to the construction contract costs are recognized as works in the consolidated comprehensive income in the accounting periods in which the work was executed. However, any expected and likely cost overruns related to the contract over total expected income under the contract is recognized as expense immediately. In addition, any change in the estimates under the contract is recognized as a change in accounting estimates in the period in which the change is made and future periods if applicable. In certain construction contracts, the terms of these agreements allow to retain an amount to customers until it culminates with construction. Under these contracts, the total amount cannot be recognized until the construction is finished.

As of December 31, 2019 and 2020, a sensitivity analysis was performed considering a 10% increase/decrease in the Corporation’s gross margins, as follows:

	2019			2020

Revenues		2,411,880			1,815,671
Gross profit		60,317			99,362
%		2.50			5.47
Plus 10%		2.75			6.02
Increase in profit before income tax		6,010			9,941
		66,327			109,303

Less 10%		2.25			4.92
Decrease in profit before income tax		(6,010	)		(9,941	)
		54,307			89,421

d) Provision for well closure costs

As of December 31, 2020, the present value of the estimated provision for the closure of 193 wells located in Talara amounted to S/52.9 million (S/50.1 million as of December 31, 2019, for the closure of 189 wells). The well closure liability is adjusted to reflect the changes that resulted from the passage of time and from reviews of either the date of occurrence or the amount of the present value of the originally estimated obligations (Note 17-d).

The Corporation estimates the present value of its future obligation for well closure costs, or well closure liability, and increases the carrying amount of the asset that will be withdrawn in the future and that is shown under the heading of intangibles in the consolidated statement of financial position.

In 2020, the calculation of the provision has been separated according to the obligations currency. Therefore, the pre-tax discount rates used for the calculation of the present value were 0.36% (for dollars) 1.95% (for soles) Block I, and 0.17% (for dollars) 1.149% (for soles) Block V (1.58% for Block I and 1.66% for Block V in 2019), and 1.55% (for dollars) 5.65% (for soles) for Blocks III and IV (2.33% in 2019), based on the rate applicable to Peruvian sovereign bonds in soles and dollars between 3, 5 and 30 years respectively, in effect as of December 2019 and 2020.

If on December 31, 2019, and 2020, the estimated rate had increased or decreased by 10%, with all variables held constant, the impact on pre-tax profit would not have been significant.

e) Impairment of investment in associate and account receivable to Gasoducto Sur Peruano S.A. (GSP)

Based on the termination of the concession agreement, on which Gasoducto Sur Peruano S.A. (GSP) acts as concessionaire (Note 15 a-i), as well as the agreements taken at the end of the year, the Corporation identified potential impairment indicators affecting the recoverability of its investment. Consequently, the Corporation impaired the full investment amount in 2019.

In that process, the Corporation has applied judgment to weight the various uncertainties surrounding the amount that can be recovered from this investment. Management has determined the recoverable amount assuming the following key factors: (i) the amount that GSP will recover as a result of a possible public auction, (ii) the liquidation of the company via the GSP Creditor´s meeting, and (iii) the validity of its right to subordinate the Odebrecht Group’s debts in GSP.

The calculation of the impairment estimate assumes a process of liquidation of GSP in accordance with Peruvian legislation, whereby the value of the asset to be recovered is first applied to the payments of liabilities in the different categories of creditors and the remainder, if it is the case, to the payment of the shareholders, taking into account the existing subordination agreements.

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In 2018 in relation to the amount to be recovered by GSP, the Corporation is assuming a recovery of the minimum amount established in the concession agreement, which is equivalent to 72.25% of the Net Carrying Amount (NCA) of the Concession assets. This amount, in substance, represents a minimum payment to be obtained by GSP based on a public auction (liquidation) to be set up for the adequate transfer of the Concession’s assets to a new Concessionaire, under the relevant contractual terms and conditions. Additionally, given the situation of non-compliance by the Peruvian State and the situation in which the process of forming the creditors' meeting was, and according to the opinion of lawyers for similar cases, the term for five years was estimated the recovery of the account receivable.

As of 31 December, 2019 and 2020, the recovery of NCA estimated by Management equals 50%, in consideration of the agreements taken as a consequence of the signing of the preliminary effective collaboration agreement. Likewise, considering that the formation of the creditors' meeting is still pending, the deadline to initiate actions to start the collection process has been delayed. Therefore, a total term of eight years has been considered, from the date and until the formation of the creditors' meeting, the approval of the settlement plan, the presentation of the arbitration claim, as well as the entire arbitration process in itself.

5.2 Critical judgments in applying the accounting policies

Consolidation of entities in which the Corporation holds less than 50%

The Corporation owns some direct and indirect subsidiaries of which the Corporation has control even though it has less than 50% of the voting rights. These subsidiaries mainly comprise indirect subsidiaries in the real estate business owned through Viva GyM S.A., having the power to affect the relevant activities that impact the subsidiaries’ returns, even though the Corporation holds interest between 30% and 50%. Additionally, the Corporation has control de facto by a contractual agreement with the majority investor over Promotora Larcomar S.A. of which it owns 46.55% of the equity interest.

GMP S.A. Lots III and IV, License contracts for the exploitation of hydrocarbons

As a result of the signing in March 2015 of the license agreements for block III and IV, the Group's oil production and business capacity has increased. The most relevant critical judgments applied by the Group are listed below.

The Corporation's Management concluded that it acquired control over the assets of the aforementioned blocks, by defining the main aspects of the operation, maintenance and disposal, as well as being exposed to the main risks and benefits inherent to the ownership of the assets and, consequently, the Group is not simply assuming a right of use. Therefore, on April 2015, the Group recognized facilities, machinery and equipment for S / 35.7 million and will recognize its futures investments as part of its assets.

Additionally, the Group would assume the costs of the permanent abandonment of the productive wells and facilities that are part of its operations and that have been produced in the Group's management, which, for safety, environmental or economic reasons, cease to operate, in accordance with established in clause 13.5 of the aforementioned contract. It should be noted that it is not the Group's obligation to carry out closure activities for existing wells that are not produced by it. These costs must be part of the assets of the company, see Note 13 - Intangible Assets - Provision for the closure of wells.

On December 31, 2016, the Company began its well drilling activities in Block IV, which continued until March 2020, when due to a Sanitary Emergency, the drilling campaigns were suspended due to Force Majeure. In Block III, the company has not started its drilling activities, for reasons of Force Majeure, as it does not have the authorization of the Miramar Vichayal Peasant Community (the Community), until the Easement Contract is registered in Public Registries. In November 2019, GMP and the Community entered into the Easement Agreement. Efforts are under way to register the Easement Contract in Public Records, to then continue with the respective payments and start the drilling campaign in Block III.

Consolidation of entities in which the Corporation does not have joint control but holds rights and obligations over the assets and liabilities

The Corporation assesses, on an ongoing basis, the nature of the contracts signed with one or more parties. If no control or joint control is determined to be held by the Corporation, but it has rights over assets and obligations for liabilities under the arrangement, then the Corporation recognizes its assets, liabilities, revenue and expenses and its share of any jointly controlled assets or liabilities and any revenue or expense arising under the arrangement as a joint operation in accordance with IFRS 11 - Joint arrangements (Note 2.2-d).

6. INTERESTS IN OTHER ENTITIES

The consolidated financial statements include the accounts of the Corporation and its subsidiaries. Additionally, the consolidated financial statements of the Corporation include its interest in joint operations in which the Company or certain subsidiaries have joint control with their partners (Note 2.2-d).

a) Main subsidiaries

The following table shows the principal direct and indirect subsidiaries classified by operating segment (Note 7):

Name	Country	Economic activity

Engineering and Construction:

GyM S.A.	Peru, and Colombia	Civil construction, electro-mechanic assembly, buildings management and implementing housing development projects and other related services.

GyM Chile S.p.A.	Chile	Investment funds, investment companies and similar financial entities.

Vial y Vives - DSD S.A.	Chile	Construction engineering projects, civil construction and related technical consultancy, rental of agricultural machinery and equipment, forestry, construction and civil engineering without operator.

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Name	Country	Economic activity

GMI S.A.	Peru, Mexico, and Bolivia	Advisory and consultancy services in engineering, carrying out studies and projects, managing projects and supervision of works.

Morelco S.A.S.	Colombia and Ecuador	out studies and projects, managing projects and supervision of works. Providing construction and assembly services, supply of equipment and materials, operation and maintenance and engineering services in the specialties of mechanics, instrumentation and civil works.

Infrastructure:

GMP S.A.	Peru	Oil and oil by-products extraction, operation and exploration services, as well as providing storage and fuel dispatch services.

Oiltanking Andina Services S.A.	Peru	Operation of the gas processing plant of Pisco - Camisea.

Transportadora de Gas Natural Comprimido Andino S.A.C.	Peru	Supply, process and market natural gas and its derivative products.

Concar S.A.C.	Peru	Highway and roads concessions operation and maintenance.

GyM Ferrovias S.A.	Peru	Concession for the operation of the public transportation system of Lima Metro (Metro de Lima Metropolitana).

Survial S.A.	Peru	Concession for constructing, operating and maintaining Section 1 of the “Southern Inter-oceanic” highway.

Norvial S.A.	Peru	Concession for restoring, operating and maintaining the “Ancon - Huacho - Pativilca” section of the Panamericana Norte road.

Concesion Canchaque S.A.C.	Peru	Concession for operating and maintaining of the Buenos Aires – Canchaque provincial road highway.

Concesionaria Via Expresa Sur S.A.	Peru	Concession for designing, constructing, operating and maintaining the Via Expresa - Paseo de la Republica in Lima.
Real estate:

VIVA GyM S.A.	Peru	Developing and managing real estate projects directly or together with other partners.
Parent company operation:

Adexus S.A.	Chile, Peru, Colombia and Ecuador	IT solutions services.

CAM Holding S.p.A.	Chile	Investment company.

Qualys S.A.	Peru	Human, economic and technological services to the B4s companies.

Promotores Asociados de Inmobiliarias S.A.	Peru	Operating in the real-estate industry and engaged in the development and sale of office premises in Peru.

Negocios del Gas S.A.	Peru	Investment company for construction, operation, and maintenance of the pipeline system to transport natural gas and liquids.

Inversiones en Autopistas S.A.	Peru	Holding company of shares, participation or any other credit instrument or investment document.

Agenera S.A.C.	Peru	Activities related to the generation, cogeneration, transmission, import, export and distribution of electrical energy.

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The following table shows the Corporation’s subsidiaries and related interest as of December 31, 2020:

	Percentage of common shares directly held by Parent (%)			Percentage of common shares held by Subsidiaries (%)			Percentage of common shares held by the Group (%)			Percentage of common shares held by non-controlling interests (%)
Engineering and Construction:
GyM S.A.		98.90	%		-			98.90	%		1.10	%
- Morelco S.A.S.		-			70.00	%		70.00	%		30.00	%
- GyM Chile S.p.A.		-			100.00	%		100.00	%		-
- Vial y Vives – DSD S.A.		-			94.49	%		94.49	%		5.51	%
GMI S.A.		89.41	%		-			89.41	%		10.59	%
- Ecología Tecnología Ambiental S.A.C.		-			100.00	%		100.00	%		-
- GM Ingenieria y Construcción de CV		-			100.00	%		100.00	%		0.00	%
- GM Ingenieria Bolivia S.R.L.		-			98.57	%		98.57	%		1.43	%

Infrastructure:
GMP S.A.		95.00	%		-			95.00	%		5.00	%
- Oiltanking Andina Services S.A.		-			50.00	%		50.00	%		50.00	%
- Transportadora de Gas Natural
Comprimido Andino S.A.C.		-			99.93	%		99.93	%		0.07	%
Concar S.A.C.		100.00	%		-			100.00	%		-
GyM Ferrovias S.A.		75.00	%		-			75.00	%		25.00	%
Survial S.A.		100.00	%		-			100.00	%		-
Norvial S.A.		18.20	%		48.80	%		67.00	%		33.00	%
Concesión Canchaque S.A.		99.96	%		0.04	%		100.00	%		-
Concesionaria Vía Expresa Sur S.A.		99.98	%		0.02	%		100.00	%		-

Real Estate:
Viva GyM S.A.		56.22	%		43.32	%		99.54	%		0.46	%

Parent company operations:
Qualys S.A.		100.00	%		-			100.00	%		-
Promotora Larcomar S.A.		46.55	%		-			46.55	%		53.45	%
Negocios del Gas S.A.		99.99	%		0.01	%		100.00	%		-
Agenera S.A.		99.00	%		1.00	%		100.00	%		-
Inversiones en Autopistas S.A.		1.00	%		99.00	%		100.00	%		-
Cam Holding S.p.A.		100.00	%		-			100.00	%		-
Adexus S.A.		100.00	%		-			100.00	%		-

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The following table shows the Corporation’s subsidiaries and related interest as of December 31, 2019:

	Percentage of common shares directly held by Parent (%)			Percentage of common shares held by Subsidiaries (%)			Percentage of common shares held by the Group (%)			Percentage of common shares held by non-controlling interests (%)
Engineering and Construction:
GyM S.A.		98.87	%		-			98.87	%		1.13	%
- Morelco S.A.S.		-			70.00	%		70.00	%		30.00	%
- GyM Chile S.p.A.		-			100.00	%		100.00	%		-
- Vial y Vives – DSD S.A.		-			94.49	%		94.49	%		5.51	%
GMI S.A.		89.41	%		-			89.41	%		10.59	%
- Ecología Tecnología Ambiental S.A.C.		-			100.00	%		100.00	%		-
- GM Ingenieria y Construcción de CV		-			99.00	%		99.00	%		1.00	%
- GM Ingenieria Bolivia S.R.L.		-			98.57	%		98.57	%		1.43	%

Infrastructure:
GMP S.A.		95.00	%		-			95.00	%		5.00	%
- Oiltanking Andina Services S.A.		-			50.00	%		50.00	%		50.00	%
- Transportadora de Gas Natural
Comprimido Andino S.A.C.		-			99.93	%		99.93	%		0.07	%
Concar S.A.C.		100.00	%		-			100.00	%		-
GyM Ferrovias S.A.		75.00	%		-			75.00	%		25.00	%
Survial S.A.		100.00	%		-			100.00	%		-
Norvial S.A.		18.20	%		48.80	%		67.00	%		33.00	%
Concesión Canchaque S.A.		99.96	%		0.04	%		100.00	%		-
Concesionaria Vía Expresa Sur S.A.		99.98	%		0.02	%		100.00	%		-

Real Estate:
Viva GyM S.A.		56.22	%		43.32	%		99.54	%		0.46	%

Parent company operations:
Qualys S.A.		100.00	%		-			100.00	%		-
Promotora Larcomar S.A.		46.55	%		-			46.55	%		53.45	%
Negocios del Gas S.A.		99.99	%		0.01	%		100.00	%		-
Agenera S.A.		99.00	%		1.00	%		100.00	%		-
Inversiones en Autopistas S.A.		1.00	%		99.00	%		100.00	%		-
Cam Holding S.p.A.		100.00	%		-			100.00	%		-
Adexus S.A.		100.00	%		-			100.00	%		-

All investments in subsidiaries have been included in the consolidation. The proportion of voting rights in such subsidiaries is held directly by the Company and does not differ significantly from the proportion of shares held.

As of December 31, the non-controlling interest is attributed to the following subsidiaries:


	2019			2020
Viva GyM S.A. and subsidiaries		168,839			132,238
GyM S.A. and subsidiaries		61,569			51,798
Norvial S.A.		63,031			57,941
GMP S.A.		24,413			24,162
GyM Ferrovias S.A.		77,564			59,231
Promotora Larcomar S.A.		3,058			3,022
Other		(199	)		(358	)
		398,275			328,034

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In December 2019, the subsidiary Viva GyM S.A. through the General Shareholders’ Meeting, it agreed to capitalize its supplementary premium for the amount of S/65.3 million to subsequently reduce the share capital in a non-proportional manner by returning contributions amounting to S/82.3 million. The return did not generate cash outflow as the reciprocal obligations between its shareholders with the subsidiary were offset. Consequently, the Company modified its participation in its subsidiary from 63.4% to 56.2%, in turn its subsidiary GyM S.A. (also a shareholder of Viva GyM S.A.) modified its stake from 36.1% to 43.3%.

In addition, in December 2019 the subsidiary GyM S.A. through the General Shareholders' Meeting agreed to the capital increase for monetary contributions in the amount of S/146.1 million. Minority shareholders voluntarily waived the pre-emptive subscription right, causing the Company's participation percentage to increase from 98.2% to 98.9%.

Summarized financial information of subsidiaries with material non-controlling interests

Set out below is the summarized financial information for each subsidiary that has non-controlling interests that are material to the Corporation.

Summarized statement of financial position

	Viva GyM S.A. and subsidiaries						GyM S.A. and subsidiaries						Norvial S.A.						GyM Ferrovías S.A.
	At December 31,						At December 31,						At December 31,						At December 31,
	2019			2020			2019			2020			2019			2020			2019			2020
Current:
Assets		591,402			541,703			1,232,486			1,310,053			84,889			72,462			449,180			367,610
Liabilities		(263,592	)		(249,816	)		(1,491,747	)		(1,696,190	)		(53,715	)		(45,185	)		(93,879	)		(85,616	)
Current net assets (liabilities)		327,810			291,887			(259,261	)		(386,137	)		31,174			27,277			355,301			281,994

Non-current:
Assets		121,529			120,223			1,100,218			1,092,120			442,186			403,280			623,033			635,836
Liabilities		(37,851	)		(34,378	)		(486,924	)		(399,948	)		(282,358	)		(254,979	)		(668,080	)		(680,905	)
Non-current net assets (liabilities)		83,678			85,845			613,294			692,172			159,828			148,301			(45,047	)		(45,069	)
Net assets		411,488			377,732			354,033			306,035			191,002			175,578			310,254			236,925

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Summarized income statement

	Viva GyM S.A. and subsidiaries						GyM S.A. and subsidiaries						Norvial S.A.						GyM Ferrovías S.A.
	For the year ended						For the year ended						For the year ended						For the year ended
	2019			2020			2019			2020			2019			2020			2019			2020

Revenue		264,401			182,439			2,279,786			1,816,358			272,679			134,149			397,853			345,258


Profit (loss) before income tax		30,729			17,816			(116,081	)		(46,199	)		24,067			(2,029	)		121,079			87,522
Income tax		(7,000	)		(2,854	)		(30,843	)		(1,753	)		(6,815	)		1,405			(39,634	)		(26,681	)
Profit (loss) for the year		23,729			14,962			(146,924	)		(47,952	)		17,252			(624	)		81,445			60,841
Other comprehensive income		-			-			(7,436	)		7,368			-			-			-			-
Total comprehensive income for the year		23,729			14,962			(154,360	)		(40,584	)		17,252			(624	)		81,445			60,841

Summarized statement of cash flows

	Viva GyM S.A.						GyM S.A.
	and subsidiaries						and subsidiaries						Norvial S.A.						GyM Ferrovías S.A.
	For the year ended						For the year ended						For the year ended						For the year ended
	2019			2020			2019			2020			2019			2020			2019			2020

Net cash provided from
operating activities		28,791			84,770			(25,503	)		(8,737	)		12,514			36,942			379,882			52,055
Net cash (applied to) provided from
investing activities		(2,613	)		(473	)		(20,173	)		(8,835	)		(33	)		(12	)		2,845			812
Net cash (applied to) provided from
financing activities		(58,722	)		(71,484	)		209,515			26,550			(46,045	)		(39,667	)		(273,009	)		(145,788	)
(Decrease) increase in cash
and cash equivalents, net		(32,544	)		12,813			163,839			8,978			(33,564	)		(2,737	)		109,718			(92,921	)
Cash and cash equivalents
at the beginning of the year		93,262			60,718			172,628			346,603			99,850			66,286			191,178			300,896
Cash and cash equivalents
at the end of the year		60,718			73,531			336,467			355,581			66,286			63,549			300,896			207,975

The information above is the amount before inter-company eliminations.

b) Public services concessions

The Corporation has public service concessions. When applicable, the income attributable to the construction or restoration of infrastructure has been accounted for by applying the models described in Note 2.5 (financial asset model, intangible asset and forked model).

Since the termination of the Contract between TGNCA and the Ministry of Energy and Mines, Management has worked on developing and completing new gas compression and liquefaction projects. Additionally, it is evaluating the centralization of the gas business through this vehicle and expects to start the gas compression project in 2021.

In all the Corporation's concessions, the infrastructure returns to the Grantor at the end of the Contract.

- 50 -

The concessions held by the Corporation are as follows as of December 31, 2020:

Name of

Estimated

Ordinary

Concession

Accounting

Concession

Description

investment

Consideration

shares held

termination

model

Survial S.A.

This company operates and maintains a 750 km road from the San Juan de Marcona port to Urcos, Peru, which is connected to an interoceanic road.

The road has five toll stations and three weigh stations.

US$99 million

Transaction secured by the Peruvian Government involving from annual payments for the

maintenance and operation of the road, which is in charge of the Peruvian Ministry of Transport and Communications (MTC).

99.90

2032

Financial asset

Canchaque S.A.C.

This company operates and periodically maintains a 78 km road which connects the towns of Buenos Aires and Canchaque, in Peru.

The road has one toll station.

US$31 million

Transaction secured by the Peruvian Government regardless the traffic volume.

Revenue is secured by an annual minimum amount of US$0.3 million.

99.96

2025

Financial asset

Concesionaria. La Chira S.A.

Designing, financing, constructing, operating and maintaining project called “Planta de Tratamiento de Aguas

Residuales y Emisario Submarino La Chira”. The Project will treat approximately 25%

of wastewaters in Lima.

S/250 million

Transaction secured by the Peruvian Government consisting of monthly and

quarterly payments settled by B4s collection trust.

50.00

2036

Financial asset

GyM Ferrovias S.A.

Concession for the operation of Line 1 of Lima Metro, Peru’s only urban railway system in Lima city, which includes (i) operation and maintenance

of the existing trains (24 initial investment trains and 20 additional trains), (ii) operation and maintenance of the railway system (railway and infrastructure).

S/642 million

Transaction secured by the Peruvian Government involving a quarterly payment received from

MTC based on km travelled per train.

75.00

2041

Financial asset

- 51 -

Name of

Estimated

Ordinary

Concession

Accounting

Concession

Description

investment

Consideration

shares held

termination

model

Norvial S.A.

The Company operates and maintains the highway that connects
Lima to the northwest of Peru.
This 183 km road known as Red Vial 5 runs from the cities of Ancon to Pativilca and has three toll stations.

US$187 million

Collected from users (self-financed concession; revenue is derived from
collection of tolls).

67.00

2028

Intangible

Via Expresa Sur S.A.asset

The contract gives the right
for designing, financing, building,
operating and maintaining the
infrastructure associated with the Via Expresa Sur Project.
This project involves the second stage expansion of the Via Expresa - Paseo de la Republica,between Av. Republica de Panama and and Panamericana
highway.

US$197 million

The contract gives the right of collection from users; however the Peruvian Government shall pay the difference when the operating revenue obtained is below US$18 million during the first two years and US$19.7 million from the third year to the fifteenth year of the effective

period of the financing, with a ceiling of US$10 million. In June 2017, the contract was suspended temporarily and has been extended until June 2021. To date, the term of the Concession remains suspended by agreement between the parties pending agreement on the terms and conditions to approve the Early Termination of the Concession Contract by Mutual Agreement as provided in Clause 16.3 of the aforementioned Contract.

99.98

2053

Financial

- 52 -

c) Main joint operations

As of December 31, 2019, and 2020, the Corporation is a partner to 51 and 52 Joint Operations with third parties, respectively. The table below lists the Corporation’s major Joint Operations.

				Percentage of interest
Joint operations	2019			2020

AENZA S.A.A.
- Concesionaria La Chira S.A.		50	%		50	%

GyM S.A.
- Consorcio CDEM		85	%		-
- Consorcio Huacho Pativilca		67	%		67	%
- Consorcio GyM – CONCIVILES		67	%		67	%
- Consorcio Chicama - Ascope		50	%		-
- Consorcio Constructor Alto Cayma		50	%		50	%
- Consorcio Energía y Vapor		50	%		-
- Consorcio Ermitaño		50	%		50	%
- Consorcio GyM Sade Skanska		50	%		-
- Consorcio GYM-OSSA		50	%		100	%
- Consorcio GyM-Stracon		50	%		50	%
- Consorcio HV GyM		50	%		50	%
- Consorcio La Chira		50	%		50	%
- Consorcio Lima Actividades Comerciales Sur		50	%		50	%
- Consorcio Lima Actividades Sur		50	%		50	%
- Consorcio Menegua		50	%		-
- Consorcio Rio Mantaro		50	%		-
- Consorcio Río Urubamba		50	%		50	%
- Consorcio TNT Vial y Vives - DSD Chile LTDA		50	%		-
- Constructora Incolur DSD Limitada		50	%		-
- Consorcio Alto Cayma		49	%		49	%
- Consorcio La Gloria		49	%		49	%
- Consorcio Norte Pachacutec		49	%		49	%
- Consorcio Italo Peruano		48	%		48	%
- Consorcio Vial Quinua		46	%		46	%
- Consorcio Constructor Ductos del Sur		29	%		29	%
- Consorcio Constructor Chavimochic		27	%		27	%
- Consorcio Inti Punku		-			49	%
- Consorcio Pasco		1	%		1	%

GMP S.A.
- Consorcio Terminales		50	%		50	%
- Terminales del Perú		50	%		50	%

- 53 -

	Percentage of interest
Joint operations	2019			2020

Concar S.A.C.
- Consorcio Ancón-Pativilca		67	%		67	%
- Consorcio Peruano de Conservación		50	%		50	%
- Consorcio Manperán		67	%		67	%
- Consorcio Vial Sierra		50	%		50	%
- Consorcio Vial Ayahuaylas		99	%		99	%
- Consorcio Vial ICAPAL		10	%		10	%
- Consorcio Vial Sullana		99	%		99	%
- Consorcio Vial del Sur		99	%		99	%
- Consorcio Obras Viales		99	%		99	%

GMI S.A.
- Consorcio Vial la Concordia		88	%		88	%
- Consorcio GMI- Haskoningdhv		70	%		70	%
- Consorcio Supervisor Ilo		55	%		55	%
- Consorcio Poyry-GMI		40	%		40	%
- Consorcio Internacional Supervisión Valle Sagrado		33	%		33	%
- Consorcio Ecotec - GMI - PIM		30	%		30	%
- Consorcio Ribereño Chinchaycamac		40	%		40	%
- Consorcio Supervisor GRH		-			64	%
- Consorcio Ecotec - GMI		-			20	%

All the joint agreements listed above are operated in Peru, Chile and Colombia.

On November 2, 2019, the operation contract of Consorcio Terminales of the subsidiary GMP S.A., corresponding to the terminals of Pisco, Mollendo, Ilo, Cusco and Juliaca, was terminated, and the assets and operations were delivered to Petroperú. Currently, it is in the process of liquidating assets and liabilities.

The main activities of the joint operations correspond to:

Joint Operations in		Economic activity

AENZA S.A.A (formerly Graña y Montero S.A.A.)		Construction, operation and maintenance of La Chira wastewater treatment plant in the south of Lima. The project is aimed to solve Lima’s environmental problems caused by sewage discharged directly into the sea.

GyM S.A.		These joint operations were created exclusively to development of construction contracts.

GMP S.A.		Consorcio Terminales and Terminales del Peru provide services for receiving, storing, shipping and transporting liquid hydrocarbons, such as gasoline, jet fuel, diesel fuel and residual among others.

CONCAR S.A.C.		Concar’s joint operations provides rehabilitation service, routine and periodic maintenance of the road; and road conservation and preservation services.

GMI S.A.		Engineering consulting services in, study and project execution, project management and Works supervision.

- 54 -

The consolidated financial statements do not include any other type of entities in addition to those mentioned above, such as trust funds or special purpose entities.

7 SEGMENT REPORTING

Operating segments are reported consistently with the internal reports that are reviewed by the Corporation’s chief decision-maker; that is, the Executive Committee, which is led by the Corporate General Manager. This Committee acts as the maximum authority in operations decision making and is responsible for allocating resources and evaluating the performance of each operating segment.

The Corporation’s operating segments are assessed by the activities of the following business units: (i) engineering and construction, (ii) infrastructure, (iii) real estate and (iv) parent company operations.

As set forth under IFRS 8, reportable segments based on the level of revenue is: ‘engineering and construction’. However, the Corporation has voluntarily decided to report on all its operating segments as detailed in this Note.

The revenues derived from foreign operations (Chile, Colombia y Mexico) comprise 24% of the Corporation’s total revenue reported in (19% to 2019).

Sales between segments are carried out at arm’s length, are not material, and are eliminated on consolidation. The revenue from external parties is measured in a manner consistent with that in the income statement. Sale of goods relate to the real estate segment. Revenue from services relate to all other segments.

Group sales and receivables are not concentrated in a few private customers.

The principal activities of the Corporation in each operating segments are as follows:

a) Engineering and construction: This segment includes from traditional engineering services such as structural, civil and design engineering, and architectural planning to advanced specialties including process design, simulation, and environmental services at three divisions; i) civil works, such as the construction of hydroelectric power stations and other large infrastructure facilities; (ii) electro-mechanic construction, such as concentrator plants, oil, and natural gas pipelines, and transmission lines; iii) building construction, such as office buildings, residential buildings, hotels, affordable housing projects, shopping centers, and industrial facilities.

b) Infrastructure: The Corporation has long-term concessions or similar contractual arrangements in Peru for three toll roads, the Lima Metro, a wastewater treatment plant in Lima, four producing oil fields, a gas processing plant and operation and maintenance services for infrastructure assets.

c) Real Estate: The Corporation develops and sells homes targeted to low and middle-income population sectors which are experiencing a significant increase in disposable income, as well as, office and commercial space to a lesser extent.

d) Parent Company Operation Corresponds to services provided to related entities of the Corporation such as strategic and functional advisory services and operational leasing of offices.

The Executive Committee uses adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) to assess the performance of operating segments. In the years 2019 and 2020,additional provisions have been considered for some of the Corporation´s asses, such as impairment of investments, impairment of account receivables, impairment of goodwill, provision for civil repair and legal claims.

- 55 -

Profit before income tax reconciles to EBITDA as follows:



	2019			2020
Net loss		(838,643	)		(96,464	)
Financial income and expenses		178,787			119,712
Income tax		303,372			57,989
Depreciation and amortization		219,817			199,720
Initial EBITDA		(136,667	)		280,957

Extraordinary adjustments to EBITDA
Impairment of investments		261,924			-
Impairment of accounts receivables		332,862			58,514
Impairment of goodwill		33,089			-
Provisions: civil compensation and legal claims		127,147			37,109
Provisions for labor claims		-			7,434
Impairment recovery		(40,094	)		-
Adjusted EBITDA		578,261			384,014





The EBITDA for each segment is as follows:

		2019			2020
Engineering and construction		51,147			55,766
Infrastructure		403,554			288,659
Real estate		56,821			32,555
Parent company operations		(417,954	)		13,372
Intercompany eliminations		484,693			(6,338	)
EBITDA		578,261			384,014

Backlog refers to the expected future revenue under signed contracts and legally binding letters of intent. The breakdown by operating segments as of December 31, 2020, and the dates in which they are estimated to be realized is shown in the following table:

		Annual Backlog
	2020	2021	2022	2023+
Engineering and Construction	3,091,072	2,588,137	502,935	-
Infrastructure	1,784,582	601,020	597,520	586,042
Real estate	218,598	194,654	23,944	-
Parent company operations	166,324	97,808	45,702	22,814
Intercompany eliminations	(440,152)	(145,950)	(146,968)	(147,235)
	4,820,424	3,335,670	1,023,134	461,621

The following table shows the Corporation’s financial statements by operating segments:

- 56 -

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		33,570		-		950,701
Trade accounts receivables, net		531,591		63,402		44,513		97,059		1,168		83,019		93,452		-		914,204
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		37,248		2		454,474
Inventories, net		57,093		32,366		7,109		30,594		-		437,012		2,828		(11,601)		555,401
Prepaid expenses		6,812		1,271		2,779		231		133		-		5,252		-		16,478
		1,548,102		181,379		251,501		449,181		7,798		591,402		272,144		(324,134)		2,977,373
Non-current assets classified as held for sale		2,398		-		-		-		-		-		-		-		2,398
Total current assets		1,550,500		181,379		251,501		449,181		7,798		591,402		272,144		(324,134)		2,979,771

Long-term trade accounts receivable, net		97,256		-		36,273		619,086		-		587		26,407		-		779,609
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		60,735		-		273,432
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		69,899		(1,159)		463,990
Intangible assets, net		136,547		244,901		443,420		794		-		1,029		20,402		7,134		854,227
Right-of-use assets, net		5,638		24,038		3,860		5		7		5,048		67,300		(15,315)		90,581
Deferred income tax asset		176,740		4,741		13,054		-		720		19,736		51,552		5,176		271,719
Total non-current assets		1,118,904		531,041		561,284		623,033		19,489		121,529		2,344,404		(1,894,991)		3,424,693
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		148,648		(9,039)		481,529
Bonds		-		-		28,995		15,742		-		-		-		-		44,737
Trade accounts payable		932,142		67,444		34,762		28,508		132		39,645		56,442		-		1,159,075
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		3,456		-		51,169
Other accounts payable		441,271		16,721		53,987		4,713		835		83,345		68,802		-		669,674
Provisions		6,031		18,459		6,183		-		-		230		82,580		-		113,483
Total current liabilities		1,785,337		148,578		165,574		93,879		973		263,592		418,879		(318,229)		2,558,583

Borrowings		32,620		116,218		2,070		-		-		11,010		254,931		(7,783)		409,066
Long-term bonds		-		-		276,550		602,755		-		-		-		-		879,305
Long-term trade accounts payable		-		-		-		-		-		-		34,814		-		34,814
Other long-term accounts payable		222,887		-		15,989		2,176		2,106		26,841		26,291		-		296,290
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		550,039		(317,944)		1,969,796
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

- 57 -


Operating segments financial position
Segment reporting
									Infrastructure
As of December 31, 2020	Engineering and construction		Energy		Toll roads		Transportation		Water treatment		Real estate		Parent Company operations		Eliminations			Consolidated

Assets.-
Cash and cash equivalent		382,850		60,165		117,893		207,975		7,408		73,531		50,346		-			900,168
Trade accounts receivables, net		425,939		37,614		25,014		111,602		565		38,043		64,390		-			703,167
Work in progress, net		186,433		-		-		-		-		-		-		-			186,433
Accounts receivable from related parties		107,495		35		31,868		2,624		30		1,342		104,007		(220,063	)		27,338
Other accounts receivable		323,084		27,900		67,265		13,220		197		10,446		35,051		2			477,165
Inventories, net		58,653		36,016		8,496		31,861		-		418,341		360		(1,727	)		552,000
Prepaid expenses		7,798		1,964		6,485		328		116		-		6,281		-			22,972
Total current assets		1,492,252		163,694		257,021		367,610		8,316		541,703		260,435		(221,788			2,869,243

Long-term trade accounts receivable, net		53,036		-		15,740		632,214		-		2,181		27,495		-			730,666
Long-term accounts receivable from related parties		315,393		-		14,508		-		11,103		-		611,498		(332,431	)		620,071
Prepaid expenses		-		981		19,009		2,048		736		-		-		(510	)		22,264
Other long-term accounts receivable		134,719		70,694		531		-		7,346		54,237		60,696		-			328,223
Investments in associates and joint ventures		109,870		8,080		-		-		-		6,095		1,424,614		(1,513,143	)		35,516
Investment property		1,467		-		-		-		-		24,606		44,521		(44,521	)		26,073
Property, plant and equipment, net		169,091		166,382		9,186		794		146		9,592		16,718		33,560			405,469
Intangible assets, net		143,575		250,327		371,437		681		-		872		19,017		6,081			791,990
Right-of-use assets, net		8,179		9,872		4,626		99		-		3,936		51,401		(13,595	)		64,518
Deferred income tax asset		174,269		4,717		5,037		-		779		18,704		53,994		5,123			262,623
Total non-current assets		1,109,599		511,053		440,074		635,836		20,110		120,223		2,309,954		(1,859,436	)		3,287,413
Total assets		2,601,851		674,747		697,095		1,003,446		28,426		661,926		2,570,389		(2,081,224	)		6,156,656

Liabilities.-
Borrowings		230,682		32,550		2,405		42		-		95,709		102,469		(10,973	)		452,884
Bonds		4,546		-		32,819		21,081		-		-		-		-			58,446
Trade accounts payable		861,833		51,225		51,221		32,637		61		42,565		57,625		-			1,097,167
Accounts payable to related parties		185,104		1,083		19,642		21,531		-		19,074		15,708		(218,324			43,818
Current income tax		26,922		1,351		1,638		3,606		166		-		811		-			34,494
Other accounts payable		525,195		12,905		35,997		6,719		766		91,976		40,252		4,596			718,406
Provisions		17,711		18,943		6,694		-		-		492		97,904		-			141,744
Total current liabilities		1,851,993		118,057		150,416		85,616		993		249,816		314,769		(224,701			2,546,959

Borrowings		25,273		103,154		2,291		59		-		11,021		328,753		(25,115			445,436
Long-term bonds		22,911		-		248,029		603,373		-		-		-		-			874,313
Long-term trade accounts payable		-		-		-		-		-		-		40,502		-			40,502
Other long-term accounts payable		140,605		-		11,623		231		2,761		23,357		4,653		-			183,230
Long-term accounts payable to related parties		104,432		-		836		36,297		24,207		-		186,886		(316,361			36,297
Provisions		83,198		37,599		17,436		1,925		-		-		97,678		-			237,836
Deferred income tax liability		25,576		36,793		1,518		39,020		-		-		-		-			102,907
Total non-current liabilities		401,995		177,546		281,733		680,905		26,968		34,378		658,472		(341,476			1,920,521
Total liabilities		2,253,988		295,603		432,149		766,521		27,961		284,194		973,241		(566,177			4,467,480
Equity attributable to controlling interest in the Company		291,636		354,982		206,993		177,694		465		138,933		1,594,264		(1,403,825			1,361,142
Non-controlling interest		56,227		24,162		57,953		59,231		-		238,799		2,884		(111,222			328,034
Total liabilities and equity		2,601,851		674,747		697,095		1,003,446		28,426		661,926		2,570,389		(2,081,224			6,156,656

- 58 -

Operating segment performance
Segment Reporting
													Infrastructure
For the year ended December 31, 2019	Engineering and construction			Energy			Toll roads			Transportation			Water treatment			Real estate			Parent Company operations			Elimination			Consolidated


Revenue		2,797,326			552,584			633,301			397,853			3,555			264,401			342,608			(653,767	)		4,337,861
Gross profit (loss)		98,362			108,291			96,164			119,464			500			70,787			6,584			(49,715	)		450,437
Administrative expenses		(141,421	)		(24,230	)		(28,623	)		(17,991	)		(397	)		(22,045	)		(75,146	)		61,201			(248,652	)
Other income and expenses, net		9,937			606			(47,998	)		(2,661	)		12			20,020			(318,489	)		(921	)		(339,494	)
Operating (loss) profit		(33,122	)		84,667			19,543			98,812			115			68,762			(387,051	)		10,565			(137,709	)
Financial expenses		(74,171	)		(13,266	)		(27,297	)		(10,948	)		(12	)		(42,320	)		(123,339	)		38,219			(253,134	)
Financial income		5,644			2,033			2,245			33,214			826			3,829			74,546			(47,991	)		74,346
Dividends		-			-			-			-			-			-			12,688			(12,688	)		-
Share of profit or loss in associates
and joint ventures		(3,558	)		2,293			-			-			-			458			(711,962	)		493,995			(218,774	)
(Loss) profit before income tax		(105,207	)		75,727			(5,509	)		121,078			929			30,729			(1,135,118	)		482,100			(535,271	)
Income tax		(35,457	)		(22,911	)		(17,112	)		(39,634	)		(506	)		(7,000	)		(179,633	)		(1,118	)		(303,371	)
(Loss) profit for the year		(140,664	)		52,816			(22,621	)		81,444			423			23,729			(1,314,751	)		480,982			(838,642	)

(Loss) profit from attributable to:
Owners of the Company		(137,109	)		48,056			(28,270	)		61,084			423			(4,995	)		(1,304,676	)		480,766			(884,721	)
Non-controlling interest		(3,555	)		4,760			5,649			20,360			-			28,724			(10,075	)		216			46,079
		(140,664	)		52,816			(22,621	)		81,444			423			23,729			(1,314,751	)		480,982			(838,642	)

- 59 -

Operating segment performance
Segment Reporting
									Infrastructure
For the year ended December 31, 2020	Engineering and construction		Energy		Toll roads		Transportation		Water treatment		Real estate		Parent Company operations		Elimination		Consolidated


Revenue		2,092,592		369,798		466,824		345,258		3,359		182,439		240,799		(387,040)		3,314,029
Gross profit (loss)		115,995		53,251		40,858		107,918		366		40,345		8,134		(46,259)		320,608
Administrative expenses		(102,985)		(16,119)		(16,584)		(12,738)		(289)		(16,462)		(42,543)		54,811		(152,909)
Other income and expenses, net		(10,914)		(4,185)		(34,283)		72		42		1,962		(39,991)		65		(87,232)
Operating profit (loss)		2,096		32,947		(10,009)		95,252		119		25,845		(74,400)		8,617		80,467
Financial expenses		(54,173)		(17,525)		(32,376)		(9,316)		(275)		(12,647)		(59,076)		28,445		(156,943)
Financial income		6,603		2,239		4,326		1,586		897		4,584		47,506		(30,510)		37,231
Dividends		-		-		-		-		-		-		7,222		(7,222)		-
Share of profit or loss in associates
and joint ventures		-		2,391		-		-		-		34		(261)		(1,394)		770
(Loss) profit before income tax		(45,474)		20,052		(38,059)		87,522		741		17,816		(79,009)		(2,064)		(38,475)
Income tax		(3,614)		(7,500)		(13,477)		(26,681)		(277)		(2,854)		(3,549)		(37)		(57,989)
(Loss) profit for the year		(49,088)		12,552		(51,536		60,841		464		14,962		(82,558)		(2,101)		(96,464)

(Loss) profit from attributable to:
Owners of the Company		(46,445)		9,176		(43,581)		45,631		464		1,391		(82,518)		(8,453)		(124,335)
Non-controlling interest		(2,643)		3,376		(7,955)		15,210		-		13,571		(40)		6,352		27,871
		(49,088)		12,552		(51,536)		60,841		464		14,962		(82,558)		(2,101)		(96,464)

- 60 -

Segments by geographical areas

	2019		2020
Revenues:
- Peru		3,496,799		2,517,928
- Chile		599,301		642,038
- Colombia		241,761		151,876
- Panamá		-		2,187
		4,337,861		3,314,029

Non-current assets:
- Peru		3,065,132		2,934,200
- Chile		235,803		245,727
- Colombia		123,758		107,486
		3,424,693		3,287,413

8 FINANCIAL INSTRUMENTS

8.1 Financial instruments by category

The classification of financial assets and liabilities by category is as follows:

	At December, 31
	2019		2020
Financial assets according to the statement of financial position
Loans and accounts receivable at amortized cost:
- Cash and cash equivalents		950,701		900,168
- Trade accounts receivable and other accounts receivable
(excluding financial assets)		1,358,282		1,222,211
- Financial assets related to concession agreements		748,365		775,677
- Accounts receivable from related parties		36,658		27,338
		3,094,006		2,925,394

Financial assets related to concession agreements are presented in the consolidated statement of financial position as the line items short-term trade accounts receivable and long-term trade accounts receivable.

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	At December, 31
	2019		2020
Financial liabilities according to the statement of financial position
Other financial liabilities at amortized cost:
- Other financial liabilities		774,075		773,203
- Finance leases		23,650		52,391
- Lease liability for right-of-use asset		92,870		72,726
- Bonds		924,042		932,759
- Trade and other accounts payable
(excluding non-financial liabilities)		1,467,283		1,447,515
- Accounts payable to related parties		61,499		80,115
		3,343,419		3,358,709
Hedging derivatives:
- Derivative financial instruments		52		-

8.2 Credit quality of financial assets

The credit quality of financial assets that are neither past due nor impaired can be assessed with reference to external risk ratings (if they exist), or based on historical information on the default rates of their counterparties.

As of December 31, the credit quality of financial assets is presented below:

	2019		2020
Cash and cash equivalents (*)
Banco de Credito del Peru (A+)		303,193		351,515
Banco Continental (A+)		186,239		147,868
Citibank (A)		183,723		128,100
Banco Scotiabank (A+)		114		54,478
Banco de la Nacion (A)		64,106		52,448
Credicorp Capital Colombia (AAA)		41,718		45,808
Banco Interbank (A)		56,114		22,882
JP Morgan (AAA)		46		21,247
Santander Colombia (AAA)		15,183		18,256
Banco Scotiabank - Chile (A+)		5,833		17,174
Banco Bogota (BB+)		7,255		12,194
Banco Santander - Chile (AAA)		1,407		8,579
Banco Santander - Perú (A)		115		8,516
Fondo de Inversion Alianza (AA+)		9,801		2,114
Banco de crédito e Inversiones - Chile (AA+)		44,338		-
Banco de crédito e Inversiones - Chile (AA+)		17,853		-
Others		6,676		5,653
		943,714		896,832

For banks in Peru, these risk ratings are obtained from the risk rating agencies authorized by the Superintendence of Banking, Insurance and AFP (SBS). For banks in Chile, ratings are obtained from the risk rating agencies authorized by the Superintendence of Securities and Insurance (SVS) of Chile (Fitch Chile Clasificadora de Riesgo Ltda. and ICR International Credit Rating Cia Clasificadora de Riesgo Ltda.). For banks in Colombia, ratings are obtained from the following financial institutions: Fitch Ratings, Value and Risk Rating S.A., BRC Standard and Poor’s Rating and Technical Committe of BRC Investor Services S.A. SCV.

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(*) The difference between the balances shown and the balances of the statement of financial position correspond to cash and remittances in transit (Note 9).

The credit quality of customers is assessed in three categories (internal classification):

A:	New customers/related parties (less than six months),
B:	Existing customers/related parties (with more than six months of trade relationship) with no previous default history; and
C:	Existing customers/related parties (with more than six months of trade relationship) with previous default history.

	2019		2020
Trade accounts receivable (Note 10)
Counterparties with no external risk rating
A		58,442		40,034
B		1,492,446		1,275,523
C		142,925		118,276
		1,693,813		1,433,833
Receivable from related parties and
joint operators (Note 12)
B		611,381		647,409

The total balance of trade accounts receivable and accounts receivable from related parties is subject to the terms and conditions of the respective contract, none of which has been renegotiated.

9 CASH AND CASH EQUIVALENTS

As of December 31, this account comprises:

	2019		2020
Cash on hand		1,323		996
Remittances in-transit		5,664		2,340
Bank accounts		225,101		300,552
Escrow account (a)		552,439		501,015
Time deposits (b)		166,174		95,265
		950,701		900,168

(a)

The Corporation maintains trust accounts in local and foreign banks that includes reserve funds for bond payments issued by the subsidiaries GyM Ferrovias S.A. and Norvial S.A. for the year 2020 S/132 million and S/21 million, respectively (for the year 2019 S/181 million and S/18 million, respectively), as shown in the following detail:

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	2019		2020
Reserve funds issued bonds		199,192		153,075
Real estate projects		31,794		35,273
Engineering and construction projects		236,526		263,631
Infrastructure projects		84,927		49,036
		552,439		501,015

(b)	Time deposits have maturities less than 90 days and may be renewed upon maturity. These deposits earn interest that fluctuates between 0.25% and 2.70%.

Financial		Interest
	entities	rate			2019		2020

GyM Ferrovias S.A.	Banco de Credito del Peru		2.70	%		32,300		65,000
GyM Ferrovias S.A.	Banco Continental					69,531		-
Norvial S.A.	Banco de Credito del Peru		0.25	%		4,763		7,429
AENZA S.A.A. (formerly Graña y Montero S.A.A.)	Banco de Credito del Peru		2.40	%		5,312		6,500
Concesionaria la Chira S.A.	Banco de Credito del Peru		1.65	%		-		6,250
Survial S.A.	Banco de Credito del Peru		0.15	%		15,400		4,800
Concesion Canchaque S.A.C.	Banco de Credito del Peru		0.25	%		662		4,381
GMP S.A.	Banco de Credito del Peru		0.50	%		-		905
GyM S.A.	Banco de Credito del Peru					28,213		-
GMI S.A.	Banco de Credito del Peru					9,993		-
						166,174		95,265

10 TRADE ACCOUNTS RECEIVABLES, NET

As of December 31,this account comprises:

	Total				Current				Non-current
	2019		2020		2019		2020		2019		2020

Receivables (net) (a)		959,151		753,693		415,970		254,587		543,181		499,106
Unbilled receivables (net) - Subsidiaries (b)		499,974		413,364		387,998		337,244		111,976		76,120
Unbilled receivables (net) - Concessions (c)		234,688		266,776		110,236		111,336		124,452		155,440
		1,693,813		1,433,833		914,204		703,167		779,609		730,666

The fair value of current accounts receivable is similar to their book value because their average maturity period is less than 60 days. These current accounts receivable do not accrue interest and do not have specific guarantees.

As of December 31, 2020, trade accounts receivable correspond mainly to GyM Ferrovias S.A. in S/743.8 (S/716.1 million to 2019), GyM S.A. in S/435.8 million (S/575.5 million as of 2019), Adexus S.A. in S/91.7 million (S/118.9 million as of 2019), GMI S.A. in S/43.2 million (S/53.3 million as of 2019), Viva GyM S.A. in S/40.2 million (S/83.6 million as of 2019), GMP S.A. in S/37.6 million (S/63.4 million as of 2019), and others in S/41.5 million (S/83 million to 2019).

Trade accounts receivable of GyM Ferrovias S.A. includes the financial asset related to contractual right, for the amount of S/590.1 million (S/579.8 as of December 31, 2019).

a)	The detail of the age of the commercial receivables net of impairment corresponds as follows:

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	2019		2020
Current		817,233		718,220
Past due up to 30 days		45,922		5,737
Past due from 31 days up to 90 days		27,364		6,801
Past due from 91 days up to 120 days		1,319		2,279
Past due from 121 days up to 360 days		10,502		4,185
Past due over 360 days		56,811		16,471
		959,151		753,693

b) The unbilled receivables by subsidiaries are documents related to the estimates of the degree of progress for services rendered that were not billed, according to the following detail:

	2019		2020
GYM S.A.		384,660		315,878
Concar S.A.C.		10,737		6,298
GMI S.A.		24,787		25,823
GMP S.A.		1,657		1,512
Adexus S.A.		78,133		63,853
		499,974		413,364

Below are the unbilled receivables by the subsidiaries grouped by the main projects:

	2019		2020
Infrastructure
Operation and maintenance of roads		9,837		4,167
Oil services		1,657		1,512
Others		901		2,131
		12,395		7,810

Engineering and Construction
Talara Refinery	190,831	70,329
Project Quellaveco	52,488	84,014
Project Mina Justa	26,658	1,743
Civil works, assembly and electromechanics - Acero Arequipa	16,449	1,357
Project Mina Gold Fields La Cima S.A.	3,409	15,055
Generating Plant Machu Picchu	13,098	15,653
Works and Consortiums	11,311	6,576
Engineering and Construction Works VYV - DSD Chile Ltda.	38,194	43,159
Engineering and Construction Works - Morelco S.A.S.	40,400	16,066
Others	16,608	87,749
	409,446	341,701

Parent Company Operation	78,133	63,853
	499,974	413,364

c) The unbilled receivables (net) – Concessions (Note 2.5), corresponds to future collections for public services granted according detail below:

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	2019		2020
GyM Ferrovias S.A.		208,205		235,763
Survial S.A.		16,466		10,611
Norvial S.A.		2,149		15,436
Concesión Canchaque S.A.C.		6,700		4,401
Concesionaria La Chira S.A.		1,168		565
		234,688		266,776

d) In 2020, Management recognized in the period an impairment in trade accounts receivable for S/48.2 million (S/0.8 million in 2019), according the following detail:

	2019			2020
Balance at January, 1		(7,633	)		(8,422	)
Imparment, net (Note 26.ii)		(955	)		(19,772	)
Imparment, net (Note 28.b)		-			(33,874	)
Write-off		12			5,653
Exchange difference		37			(212	)
Translation adjustments		117			(3	)
Balance at December, 31		(8,422	)		(56,630	)

e)	The unbilled receivables from GyM Ferrovías S.A. to the Peruvian State no current, which is subsequently measured at its cost amortized, accrued interest at a rate of 7.7% as the used rate in a financial instrument of similar characteristics (similar term, currency and counterparty risk)


		Carrying amount			Fair value
	2019		2020	2019		2020

GyM Ferrovias S.A.	579,765		590,092	696,665		783,643

	579,765		590,092	696,665		783,643

f)	The maximum exposure to credit risk at the reporting date is the carrying amount of accounts receivable and work in progress (Note 11).

11 WORK IN PROGRESS, NET

As of December 31, this account comprises:

	Total				Current					Non-current
	2019		2020		2019		2020			2019		2020

Unbilled receivable concessions in progress (a)		23,117		-		-		-			23,117		-
Work in progress (b)		49,457		186,433		49,457		186,433	)		-		-
		72,574		186,433		49,457		186,433			23,117		-

The ongoing work costs include all expenses incurred by the Corporation under construction contracts currently in force. The Corporation estimates that all the cost incurred will be billed and collected.

a) Corresponds to the accounts receivable from the Municipality of Lima related to the mandatory investments from the Concession Contract and the income guaranteed by the Grantor from the start of exploitation. As of December 31, 2019, these accounts are presented in the long term because it was expected to be collected once the operation stage began. To date, both the Concession term and most of the obligations under the respective Concession Contract remain suspended by agreement between the parties and pending the agreement of the terms and conditions to approve the Early Termination of the Concession Contract by Mutual Agreement. In accordance with the provisions of Clause 16.3 of the aforementioned Contract, for this reason the balance has been reclassified to “Other accounts receivable - Third-party claims”.

b) Mainly includes S/171 million corresponding to GyM S.A. and its subsidiary Vial y Vives - DSD S.A. (S/29.6 million as of December 31, 2019); and S/15.5 million from GMI S.A. (S/19.9 million as of December 31, 2019).

Below are the work in progress grouped by the main projects:

	2019		2020
Infrastructure
Road operation and maintenance		23,117		-
		23,117		-

Engineering and construction
Engineering and Construction Works - GYM Chile S.p.A.		19,531		97,561
Talara Refinery		20,126		15,468
North Concentrator Plant of Quellaveco		1,033		50,216
Ground transport tunnel of Quellaveco		-		18,485
Others		8,767		4,703
		49,457		186,433
		72,574		186,433

12 TRANSACTIONS WITH RELATED PARTIES AND JOINT OPERATORS

a) Transactions with related parties

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

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	2019		2020
Revenue from sales of goods and services:
- Joint operations		44,130		15,903
- Associates		108		5
		44,238		15,908
Purchase of goods and services:
- Joint operations		1,765		-
- Associates		-		1,225
		1,765		1,225

Transactions between related parties are made based on current price lists and the terms and conditions are the same as those agreed with third parties.

b) Key management compensation

The key management includes directors (executives and non-executives), members of the Executive Committee and Internal Audit Management. Compensation paid or payable to key management in 2020 amounted to S/64.5 million (in 2019, the balance of S/87.4 million) and It only includes short-term benefits.

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c)	Balances at the end of the year were:

	At December 31,				At December 31,
	2019				2020
	Receivable		Payable		Receivable		Payable
Current portion:
Joint operations
Consorcio Rio Urubamba		9,042		-		9,357		-
Consorcio Peruano de Conservacion		3,592		-		3,156		-
Consorcio Italo Peruano		1,011		363		1,520		217
Consorcio Constructor Chavimochic		-		5,953		-		6,208
Consorcio GyM Conciviles		1,257		1,958		1,341		1,472
Consorcio La Gloria		1,750		1,017		69		113
Consorcio Ermitaño		831		440		890		474
Terminales del Peru		1,176		-		501		161
Consorcio TNT Vial y Vives - DSD Chile Ltda		-		1,088		-		1,015
Consorcio Rio Mantaro		-		5,869		-		7,655
Consorcio Vial Quinua		-		2,048		-		2,051
Consorcio Huacho Pativilca		1,419		5,895		4		85
Consorcio CDEM		638		-		1,111		-
Consorcio GyM-Stracon		2,230		-		-		644
Consorcio GyM-OSSA		7,202		-		-		-
Consorcio Chicama Ascope		2,471		-		2,922		-
Consorcio Inti Punku		-		-		-		6,556
Consorcio Manperan		-		-		1,057		656
Consorcio Norte Pachacutec		-		-		1,077		1,192
Other minors		1,407		2,102		2,373		1,503
		34,026		26,733		25,378		30,002

Other related parties
Ferrovías Argentina		-		12,183		-		11,139
Perú Piping Spools S.A.C.		2,632		-		1,960		2,677
		2,632		12,183		1,960		13,816
Current portion		36,658		38,916		27,338		43,818



Non-current portion
Gasoducto Sur Peruano S.A.		572,624		-		620,071		-
Ferrovías Argentina		-		-		-		12,862
Ferrovías Participaciones		-		22,583		-		23,435
Other minors		2,099		-		-		-
Non-current		574,723		22,583		620,071		36,297

Accounts receivable and payable are mainly of current maturity and have no specific guarantees; except for accounts receivable from GSP and Ferrovías participations. These balances do not generate interest considering their maturity in the short term.

The non-current balance corresponds to the obligations arising from the early termination of the GSP project (Note 15 a-i). As of December 31, 2020, the book value of the non-current account receivable registered by the Company, for S/364 million, was recorded using the discounted cash flow method, at a rate of 1.6% (3.46% in 2019) that originated a value of discount of S/44 million equivalent to US$12 million (S/333 million and S/57 million equivalent to US$17.8 million, as of December 31, 2019, respectively). Additionally, as a result of the early termination of the GSP, and related facts, the subsidiary GyM S.A. it has balances from the Consorcio Constructor Ductos del Sur (CCDS) to those who had previously deteriorated in 2016, it was integrated in the consolidation under the proportional participation method. As of December 31, 2020, the value of accounts receivable from CCDS corresponds mainly to collection rights to GSP for S/299 million, which includes S/267 million receivable from CCDS and S/32 million for lost profits (as of December 31, 2019, S/298 million which includes S/270 million and S/28 million, respectively).

- 68 -

Transactions with non-controlling interests are disclosed in Note 35.

13 OTHER ACCOUNTS RECEIVABLE

As of December 31, this account comprises:

				Total						Current						Non-current
	2019			2020			2019			2020			2019			2020

Advances to suppliers (a)		135,481			76,200			135,481			76,200			-			-
Income tax on-account payments (b)		71,541			48,054			71,541			48,052			-			2
VAT credit (c)		47,167			54,076			32,903			43,498			14,264			10,578
Guarantee deposits (d)		189,210			217,441			104,965			156,123			84,245			61,318
Claims to third parties (e)		83,054			212,565			38,874			108,748			44,180			103,817
Petroleos del Peru S.A.- Petroperu S.A. (f)		80,942			87,826			17,293			17,132			63,649			70,694
ITAN and other tax receivable		60,883			63,003			30,233			30,468			30,650			32,535
Restricted funds (g)		16,523			29,121			1,522			2,092			15,001			27,029
Rental and sale of equipment - GyM S.A. projects		30,798			29,149			30,798			29,149			-			-
Accounts receivable from personneel		2,940			10,957			2,940			10,957			-			-
Consorcio Panorama (h)		23,491			25,026			-			-			23,491			25,026
Other minors		16,574			10,386			15,339			9,738			1,235			648
		758,604			863,804			481,889			532,157			276,715			331,647
Impairment (i)		(30,698	)		(58,416	)		(27,415	)		(54,992	)		(3,283	)		(3,424	)
		727,906			805,388			454,474			477,165			273,432			328,223

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 ranging from 2 to 5 years.

The maximum exposure to credit risk at the reporting date is the carrying amount of each class of other accounts receivable mentioned. The Corporation does not request guarantees

Below is a description and composition of the main accounts receivable:

(a) Advance to suppliers - corresponds mainly to the following:

	Current
	2019		2020

Alsthom Transporte - Linea 1		2,597		5,786
Advances - joint operations vendors		49,181		36,803
Others		35,400		26,660
		135,481		76,200

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(b) Income tax on-account payments, consist of income tax payments and credits in the following subsidiaries:

	Total				Current				Non-current
	2019		2020		2019		2020		2019		2020
GyM S.A.		45,628		35,599		45,628		35,599		-		-
GMI S.A.		7,203		3,532		7,203		3,532		-		-
GMP S.A.		2,400		1,883		2,400		1,883		-		-
Concar S.A.		3,709		3,340		3,709		3,340		-		-
Viva GyM S.A.		3,485		1,351		3,485		1,351		-		-
AENZA S.A.A. (formerly Graña y Montero S.A.A.)		2,895		1,348		2,895		1,348		-		-
Norvial S.A.		4,266		5		4,266		5		-		-
Survial S.A.		426		141		426		141		-		-
Others		1,529		855		1,529		853		-		2
		71,541		48,054		71,541		48,052		-		2

	Total				Current				Non-current
	2019		2020		2019		2020		2019		2020

GyM S.A.		12,963		12,868		12,963		12,868		-		-
GyM Ferrovias S.A.		11,970		3,335		11,970		3,335		-		-
AENZA S.A.A. (formerly Graña y Montero S.A.A.)		-		648		-		648		-		-
Concar S.A.		1,653		1,527		1,653		1,527		-		-
Survial SA.		1,817		2,631		1,817		2,631		-		-
GMI S.A.		1,513		13,754		1,513		13,754		-		-
Viva GyM S.A.		6,874		8,111		513		953		6,361		7,158
GMP S.A.		396		678		396		678		-		-
Others		9,981		10,524		2,078		7,104		7,903		3,420
		47,167		54,076		32,903		43,498		14,264		10,578

Management considers that VAT credit will be recovered in the regular course of future operations of subsidiaries.

(d) Guarantee deposits

Corresponds to funds held by customers for construction contracts mainly from the subsidiary GyM S.A.

These deposits are retained by customers to ensure the subsidiary’s compliance with its obligations under the contracts. The amounts retained will be recovered once the work is completed.


	Total				Current				Non-current
	2019		2020		2019		2020		2019		2020
Talara Refinery		55,567		58,831		308		812		55,259		58,019
Retention Toquepala		19,630		-		19,630		-		-		-
Retention Minera Teck		16,075		64,175		16,075		64,175		-		-
Retention Quellaveco		15,926		23,699		15,926		23,699		-		-
Joint operations retention		29,575		29,792		15,654		29,792		13,921		-
Retention Morelco		15,261		14,108		15,261		14,108		-		-
Retention Marcobre		5,052		302		5,052		302		-		-
SBLC guarantees - Sale of CAM Chile S.p.A.		14,726		-		3,576		-		11,150		-
Others		17,398		26,534		13,483		23,235		3,915		3,299
		189,210		221,298		104,965		156,123		84,245		61,318

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(e) Third-party claims

	Total				Current				Non-current
	2019		2020		2019		2020		2019		2020
Técnicas Reunidas - Talara (e-1)		-		53,635		-		-		-		53,635
Municipality of Lima (e.2)		-		49,625		-		49,625		-		-
Ministerio de Vivienda and Fondo Mi Vivienda		20,536		21,816		-		-		20,536		21,816
Accounts receivable from joint venture		39,736		60,861		23,934		38,326		15,802		22,535
Others		22,782		26,628		14,940		20,797		7,842		5,831
		83,054		212,565		38,874		108,748		44,180		103,817

(e.1) Tecnicas Reunidas - Talara

GyM S.A. filed a lawsuit case against Tecnicas Reunidas for approximately US$78 million as indemnification for damages as a consequence of several contractual breaches. Tecnicas Reunidas has filed a counterclaim for approximately US$ 81 million alleging that GyM S.A. has breached the subcontract entered between the two companies. On December 28, 2020, Tecnicas Reunidas executed two letters of guarantee issued by Banco Santander, for US$16 million for Performance and the second letter for advance payment for US$7.7 million, despite the fact that the obligations guaranteed by the letter of guarantee were being litigated in the process described in this paragraph. As of December 31, 2020, the balance of this item at face value amounts to US$17.3 million equivalent to S/62.5 million (at present value the balance amounts to US$14.8 million equivalent to S/53.6 million).

(e.2) Municipalidad Metropolitana de Lima

Includes the reclassification of net intangible assets for S/21.8 million (Note 17), work in progress - related to concession agreements for S/23.1 million (Note 11-a). In 2020, this item includes an impairment of S/12.2 million (Note 28-b).

(f) Other accounts receivable from Petroperu S.A.

It corresponds to accounts receivable to Petroperu S.A., for the additional investments of the Terminales del Peru Consortium of the subsidiary GMP S.A.

(g) Restricted funds

As of December 31, 2020, includes restricted funds of S/19.1 million of the Company and S/0.9 million of the subsidiary Viva GyM S.A. for bank certificates under guarantee and S/7.3 corresponds to the bank accounts for the reserve account of the Concesionaria La Chira S.A. and others subsidiaries for S/1.6 million (S/7.7 million, S/0.9 million, S/7.3 million and S/0.5 million as of December 31, 2019, respectively).

(h) Consorcio Panorama

Corresponds to the settlement agreement of the Consorcio Panorama signed by Viva GyM S.A. and Inversiones Maje S.A.C. on December 14, 2018. This balance includes the return of contributions and the profit earned, based on future sales of the properties held in the project.

(i) Impairment

The movement in impairment of other receivables during 2019 and 2020 was as follows

	Totales						Guaranties Retention								Claims to third parties
	2019			2020			2019		2020			2019			2020
Balance at January, 1		(25,567	)		(30,698	)		-		165			(25,567	)		(30,863	)
Impairment of Concar S.A.C. (Note 26.ii)		(1,457	)		(11,431	)		-		-			(1,457	)		(11,431	)
Impairment of Sucursal Colombia (Note 26.ii)		(3,283	)		-			-		-			(3,283	)		-
Impairment of third-party claims (Note 26.ii)		(964	)		(887	)		-		-			(964	)		(887	)
Impairment of third-party claims (Note 28.b)		-			(513	)		-		-			-			(513	)
Impairment of Cam Holding S.P.A. (Note 28.b)		-			(12,511	)		-		(12,511	)		-			-
Impairment of Concesionaria Vía Expresa Sur S.A. (Note 28.b)		-			(12,213	)		-		-			-			(12,213	)
Reversal of impairment of third-party claims (Note 28.b)		32			-			-		-			32			-
Write-off		-			12,205			-		12,530			-			(325	)
Exchange difference		387			(2,188	)		-		-			387			(2,188	)
Translations adjustments		154			(180	)		165		(184	)		(11	)		4
Balance at December, 31		(30,698	)		(58,416	)		165		-			(30,863	)		(58,416	)

(f) Other accounts receivable from Petroperu S.A.

It corresponds to accounts receivable to Petroperu S.A., for the additional investments of the Terminales del Perú S.A. Consortium of the subsidiary GMP S.A.

(g) Restricted funds

As of December 31, 2020, includes restricted funds of S/19.1 million of the Company AENZA and S/0.9 million of the subsidiary Viva GyM S.A. for bank certificates under guarantee and S/7.3 corresponds to the bank accounts for the reserve account of the Concesionaria La Chira S.A. and others subsidiaries for S/1.6 million (S/7.7 million, S/0.9 million, S/7.3 million and S/0.5 million as of December 31, 2019, respectively).

(h) Consorcio Panorama

14 INVENTORIES

As of December 31, this account comprises:

	2019			2020
Land		183,218			176,927
Work in progress - Real estate		158,010			164,514
Finished properties		86,190			78,048
Construction materials		59,879			58,621
Merchandise and supplies		77,787			80,142
		565,084			558,252
Impairment of inventories		(9,683	)		(6,252	)
		555,401			552,000

Land

Land comprises properties, net of impairment and includes properties for the development of the following projects of the subsidiary GyM Viva S.A. As of December 31, 2020, the land impairment provision equals S/1.2 million (S/5.2 million in 2019):

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	2019		2020
Lurin (a)		71,902		81,493
San Isidro (b)		51,285		51,626
Nuevo Chimbote (c)		17,457		17,616
Barranco (d)		14,202		14,432
Piura (e)		11,805		11,760
Carabayllo III		16,567		-
		183,218		176,927

(a) Plot of land of 107 hectares that corresponds to Inmobiliaria Almonte S.A.C. and a land 210 hectares that corresponds to Inmobiliaria Almonte 2 S.A.C., both lands located in the district of Lurin, province of Lima, destined for the purposes of industrial development and public housing.

(b) Land located on David Samanez Ocampo street N° 140 in San Isidro district where a 15-story building with 24 apartments and 124 parking lots will be built.

(d) Land located in Paul Harris St. N°332 and N°336 in Barranco district, for the development of a residential building project.

(e) Land located in the district of Veintiséis de Octubre, province of Piura with an area of 65,096 m2 for the development of Los Parques de Piura IV project.

Real estate - work in progress

As of December 31, real state work in progress comprises the following projects:

	2019		2020
Los Parques de Comas		77,757		66,114
Los Parques del Callao		35,549		26,613
Los Parques de Piura		5,658		9,514
Los Parques del Mar		32,183		44,683
Los Parques de Carabayllo III		-		10,266
Inmobiliaria Pezet 417 S.A.C.		4,091		4,459
Others		2,772		2,865
		158,010		164,514

During 2020 the Corporation has capitalized financing costs of these construction projects (Note 2.2) amounting to S/3.8 million at annual interest rates between 7% and 11% (S/3.7 million in 2019 at interest rates between 7% and 12%).

Finished properties

As of December 31, the balance of finished properties consists of the following investment properties:

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	2019		2020
Los Parques de Comas		37,605		32,098
Los Parques de Callao		10,914		14,479
Huancayo		19,672		13,033
Los Parques de Carabayllo III		168		8,518
Strip Callao		-		6,286
El Nuevo Rancho		4,060		1,284
Los Parques de Piura		6,050		1,034
Klimt		5,978		-
Los Parques de San Martín de Porres		903		-
Others		840		1,316
		86,190		78,048

As of December 31, 2020, the balance of finished properties is net of an impairment of S/3.8 million (S/4.5 million as of December 31, 2019).

Construction materials

As of December 31, 2020, the construction materials correspond mainly to projects of the subsidiary GyM S.A. for S/53.1 million (GyM S.A. for S/56.2 million as of December 31, 2019).

15 INVESTMENTS IN ASSOCIATES AND JOINT VENTURES

As of December 31, this account comprises:

	2019		2020
Associates		28,875		27,246
Joint ventures		8,160		8,270
		37,035		35,516

The amounts recognized in the income statement as the value of the equity interest are as follows:

	2019			2020
Associates		(220,993	)		(1,635	)
Joint ventures		2,219			2,405
		(218,774	)		770

a) Investment in associates

Set out in the table below are the associates of the Corporation as of December 31, 2019, and 2020 the associates listed below have share capital solely consisting of common shares, which are held directly by the Corporation. None of the associates are listed companies; therefore, there is no quoted market price available for their shares.

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				Carrying amount
	Class	Interest in capital		At December 31,
Entity	of share	2019	2020	2019	2020
		%	%
Gasoducto del Peru S.A. ( * )	Common	-	-	-	-
Concesionaria Chavimochic S.A.C.	Common	26.50	26.50	18,320	18,058
Peru Piping Spools S.A.C.	Common	33.33	33.33	4,166	2,760
Obratres S.A.C.	Common	37.50	37.50	3,756	3,812
Inversiones Majes S.A.	Common	9.59	9.59	2,306	2,283
Others				327	333
				28,875	27,246

(*) Mainly corresponds to an write-off of the investment in Gasoducto Sur Peruano S.A. as a whole.

The movement of the investments in associates is as follows:

	2019			2020
Opening balance		250,282			28,875
Equity interest in results		(220,993	)		(1,635	)
Impairment of investment		(374	)		(38	)
Conversion adjustment		(40	)		44
Final balance		28,875			27,246

The most significant associates are described as follows:

i) Gasoducto Sur Peruano S.A.

In November 2015, the Corporation acquired a 20% interest in Gasoducto Sur Peruano S.A. (hereinafter “GSP”) and obtained a 29% interest in Consorcio Constructor Ductos del Sur (hereinafter “CCDS”) through its subsidiary GyM S.A. GSP signed on July 22, 2014, a concession contract with the Peruvian Government to build, operate and maintain the pipelines transportation system of natural gas to meet the demand of cities in the south of Peru (hereinafter, the “Concession Contract”). Additionally, GSP signed an engineering, procurement, and construction contract with CCDS. The Corporation made an investment of US$242.5 million and was required to assume 20% of the performance guarantee established in the concession contract for US$262.5 million and 21.49% of the guarantee for a bridge loan obtained by GSP of US$600 million.

Early termination of the Concession Agreement

On January 24, 2017 the Ministry of Energy and Mines (hereinafter “MEM”) notified the early termination of the Concession Contract under its clause 6.7 based on GSP’s failure to provide evidence of the project’s financial closing within the contractual deadline and proceeded to the immediate enforcement of the performance guarantee. This situation generated the enforcement of the guarantees provided by the Company for US$52.5 million nominal value and US$129 million nominal value to secure GSP’s obligation with its lenders under a bridge loan granted to it. Under the Concession Agreement, the guarantees were paid by the Company on behalf of GSP, therefore the Company recognized a right to collect from GSP an amount equal to US$181.5 million nominal value that was recorded in 2016 as accounts receivable from related parties.

On October 11, 2017, GSP and MEM entered into an agreement to deliver the concession asstes pursuant to the Concession Agreement. These assets included all the works, equipment, facilities and engineering studies needed for the development of the project.

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After the termination of the Concession Contract, the Peruvian Government should have appointed a recognized international audit firm to calculate the net book value of the concession assets (hereinafter "VCN") and conducted up to three public auctions of the GSP concession pursuant to clause 20 of the Concession Agreement. However, as of the date hereof, the Peruvian Government continues to be in breach of such contractual obligation. An independent audit firm engaged by GSP calculated the VCN to equal US$2,602 million as of December 31, 2016.

On December 4, 2017, GSP entered into a bankruptcy proceeding before the National Institute for the Defense of Competition and Intellectual Protection of Peru. The Corporation registered a claim for accounts receivable for US$0.4 million and and an additional accounts receivable of US$169.3 million that is held in trust in benefit of the Company’s creditors. The process is in the debt recognition stage to determine the parties who will be entitled to participate in the Creditors’ Assembly to convoked under the mentioned bankrupcy proceeding.

On December 21, 2018, the Company. submitted to the Peruvian Government a request for direct negotiations demanding the payment of the VCN in favor of GSP therefore, commencing the cool off period under the Concession Contract. This request is based on the right that creditors have under article 1219 of the Peruvian Civil Code to initiate actions against its debtor’s debtors that the former to collect a credit that would allow the payment of the outstanding debt. Upon the conclusion of the contractual cool off period, the Company filed on October 18, 2019 a request for arbitration before CIADI. The Company withdrew its request for arbitration on December 27 of the same year the preliminary plea bargain agreement entered on the same date by the Company with the Prosecutor and the Ad hoc State Counsel (Note 1).

The fair value of the investment in GSP, as Corporate associate, is based on the amount of the VCN, taking into consideration the payments anticipated in the insolvency proceedings, the subordination contracts and the loan assignment agreements entered into by the Company and its partners in the project. Based on management’s estimate of such payments, an impairment of the investment value for US$220 million (S/739 million), corresponding to the year end 2019 US$65 million (S/218 million). In addition, Management has applied, at the consolidated financial statements of the company, an impairment of US$81.5 million (S/276 million) to the long-term account receivable from GSP, and also discount under the amortized cost for US$17 million (S/58 million). In addition, write-off of US$54 million (S/180 million) was made over the deferred tax asset. These effects amounted to US$163.5 million (S/552 million) before taxes recorded in the income statement for the year ended December 31, 2019 and US$54 million (S/180 million) related to income tax expense.

As of December 31, 2020, the fair value of the investment in GSP was determined to be US$88.6 million, equivalent to S/320 million (as of December 31, 2019 US$83 million, equivalent to S/275 million), the Corporation's management maintains the 8-year investment recovery estimate; however, it has updated the discount rate used in its estimates from 3.43% to 1.6%, resulting in an amortized cost discounting gain of US$5.4 million (S/22.8 million).

In the opinion of our internal and external legal advisors, any proceeds received by GSP from the Peruvian Government derived from the former’s obligation to reimburse the VCN of the concession assets would not be subject to retention under Law 30737 since this payment does not include a net profit margin, nor does it correspond to the sale of assets.

Such withdrawal does not imply the loss of the Company's right of collection against GSP nor does it restrict, limit or obstruct the possibility that GSP has of exercising its rights against the Government in the future.

ii) 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.

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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.

The following table shows the financial information of the principal associates:

Summarized financial information for associates –

	Concesionaria
	Chavimochic S.A.C.
	At December, 31
Entity	2019			2020

Current
Assets		55,830			58,814
Liabilities		(1,596	)		(4,795	)

Non-current
Assets		12,408			11,635
Net assets		66,642			65,654

				Concesionaria
				Chavimochic S.A.C.
Entity	2019			2020

Administrative expenses		(11,028	)		(4,521	)
Loss operative		(11,028	)		(4,521	)
Others		(719	)		3,534
Loss of the year		(11,747	)		(987	)
Total comprehensive loss		(11,747	)		(987	)

b) Investment in Joint Ventures

Set out below are the joint ventures of the Corporation as of December 31:

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						Carrying amount
	Class		Interest in capital			At December 31,
Entity	of share		2019	2020	2019	2020
			%	%

Logistica Quimicos del Sur S.A.C.	Common	)	50.00	50.00	8,006	8,080
Constructora SK-VyV Ltda.	Common		50.00	50.00	29	34
Others			-	-	125	156
					8,160	8,270

The movement of the investments in joint ventures was as follows:

	2019			2020
Opening balance		7,483			8,160
Equity interest in results		2,219			2,405
Dividends received		(1,517	)		(2,318	)
Conversion adjustment		(14	)		23
Impairment of investment		(11	)		-
Final balance		8,160			8,270

The following table shows the financial information of the principal joint ventures:

Summarized financial information for joint ventures

				At December, 31
Logistica Quimicos del Sur S.A.C.	2019			2020

Current
Cash and cash equivalents		2,131			2,710
Other current assets		2,416			3,324
Total current assets		4,547			6,034

Other current liabilities		(4,381	)		(6,108	)
Total current liabilities		(4,381	)		(6,108	)

Non-current
Total non-current assets		37,620			35,715
Total non-current liabilities		(21,773	)		(19,484	)
Net assets		16,013			16,157


Revenue		12,622			13,351
Depreciation and amortization		(2,505	)		(2,394	)
Interest expense		(644	)		(508	)
Profit from continuing operations		4,698			6,854
Income tax expense		(1,913	)		(2,072	)
Profit from continuing operations after income tax		4,587			4,782
Total comprehensive income		4,587			4,782

The Corporation received dividends in 2020 from Logística Quimicos del Sur S.A. for S/2.3 million (S/1.5 million in 2019).

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16 PROPERTY, PLANT AND EQUIPMENT, NET AND RIGHT-OF-USE ASSETS

16.1. PROPERTY, PLANT AND EQUIPMENT

The movement in property, plant and equipment accounts and its related accumulated depreciation for the year ended December 31, 2019 and 2020 is as follows:

													Furniture						Replacement
													and			Other			and in-transit			Work in
	Land			Buildings			Machinery			Vehicles			fixtures			equipment			units			progress			Total

At January 1, 2019
Cost		20,482			129,482			689,845			85,349			59,643			170,622			17,814			34,582			1,207,819
Accumulated depreciation and impairment		(273	)		(33,808	)		(435,630	)		(45,272	)		(49,311	)		(139,579	)		(10	)		(352	)		(704,235	)
Net carrying amount		20,209			95,674			254,215			40,077			10,332			31,043			17,804			34,230			503,584

Net initial carrying amount		20,209			95,674			254,215			40,077			10,332			31,043			17,804			34,230			503,584
Additions (i)		290			459			23,011			866			759			9,897			7,036			39,584			81,902
Depreciation charge		-			(7,387	)		(48,035	)		(9,816	)		(2,338	)		(12,989	)		(1	)		-			(80,566	)
Deduction for sale of assets (ii)		-			(78	)		(22,885	)		(9,531	)		(133	)		(2,789	)		(9	)		-			(35,425	)
Depreciation for sale deductions (ii)		-			78			19,520			5,232			86			2,717			-			-			27,633
Disposals, net		-			(674	)		(316	)		(101	)		(187	)		(2,350	)		-			-			(3,628	)
Impairment loss		-			-			(3,155	)		-			-			-			-			(15,785	)		(18,940	)
Transfers (iii)		(273	)		(1,187	)		-			-			-			-			-			(804	)		(2,264	)
Reclassifications		-			1,672			52,720			342			207			369			(14,217	)		(41,093	)		-
Translations adjustments		(525	)		(647	)		(3,719	)		(746	)		(142	)		(2,527	)		-			-			(8,306	)
Net final carrying amount		19,701			87,910			271,356			26,323			8,584			23,371			10,613			16,132			463,990

At December 31, 2019
Cost		19,974			129,911			726,173			75,146			58,236			179,179			10,624			32,269			1,231,512
Accumulated depreciation and impairment		(273	)		(42,001	)		(454,817	)		(48,823	)		(49,652	)		(155,808	)		(11	)		(16,137	)		(767,522	)
Net carrying amount		19,701			87,910			271,356			26,323			8,584			23,371			10,613			16,132			463,990

- 78 -

													Furniture						Replacement
													and			Other			and in-transit			Work in
	Land			Buildings			Machinery			Vehicles			fixtures			equipment			units			progress			Total

At January 1, 2020
Cost		19,974			129,911			726,173			75,146			58,236			179,179			10,624			32,269			1,231,512
Accumulated depreciation and impairment		(273	)		(42,001	)		(454,817	)		(48,823	)		(49,652	)		(155,808	)		(11	)		(16,137	)		(767,522	)
Net carrying amount		19,701			87,910			271,356			26,323			8,584			23,371			10,613			16,132			463,990

Net initial carrying amount		19,701			87,910			271,356			26,323			8,584			23,371			10,613			16,132			463,990
Additions (i)		-			412			17,941			-			844			1,781			3,549			11,538			36,065
Depreciation charge		-			(7,636	)		(53,220	)		(4,461	)		(1,344	)		(11,899	)		-			-			(78,560	)
Deduction for sale of assets (ii)		-			(192	)		(26,046	)		(11,762	)		(523	)		(448	)		-			-			(38,971	)
Depreciation for sale deductions (ii)		-			58			25,293			5,836			495			428			-			-			32,110
Disposals, net		(9,895	)		(2,014	)		(237	)		(94	)		(140	)		6			-			-			(12,374	)
Impairment loss		-			(161	)		(5,069	)		(17	)		33			-			-			-			(5,214	)
Transfers (iii)		-			-			-			-			-			89			-			-			89
Reclassifications		-			1,404			23,745			35			-			379			(2,216	)		(23,347	)		-
Translations adjustments		800			1,419			3,474			864			(12	)		1,769			-			20			8,334
Net final carrying amount		10,606			81,200			257,237			16,724			7,937			15,476			11,946			4,343			405,469

At December 31, 2020
Cost		10,879			132,940			750,769			64,666			52,843			156,111			11,957			20,481			1,200,646
Accumulated depreciation and impairment		(273	)		(51,740	)		(493,532	)		(47,942	)		(44,906	)		(140,635	)		(11	)		(16,138	)		(795,177	)
Net carrying amount		10,606			81,200			257,237			16,724			7,937			15,476			11,946			4,343			405,469

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(i) In 2019 and 2020, additions to cost correspond to acquisitions of fixed assets made under financial leases or direct purchases.

(ii) In 2020 the sale of fixed assets which is shown in the statement of income under the caption “other income and expenses, net” (Note 28) amounted to S/9.1 million (S/12.7 million in 2019), generating a gain of S/2.3 million (S/6.1 million in 2019).

(iii) During 2019, a property owned by Morelco S.A.S. (subsidiary of GyM S.A) was transferred to investment properties to the leased to a third party. During 2020, corresponds to transfers received for software, and expenses related to GMP S.A.'s well development.

Depreciation of property, plant and equipment and investment property is distributed in the income statement as follows:

	2019			2020

Cost of services and goods (Note 26)		108,066			90,146
Administrative expenses (Note 26)		4,252			8,358
Total depreciation related to property, plant and equipment and investment property		112,318			98,504
(-) Depreciation related to investment property		(2,356	)		(2,412	)
(-) Depreciation related to right-of-use assets (Note 16.2)		(29,396	)		(17,531	)
Total depreciation of property, plant and equipment		80,566			78,561

As of December 31, 2020, the Corporation had fully depreciated assets in use of S/119.1 million (S/135.2 million in 2019).

The net carrying amount of machinery and equipment, vehicles and furniture and fixtures acquired under finance lease contracts is broken down as follows:

				At December 31,
	2019			2020

Cost of acquisition		68,553			64,623
Accumulated depreciation		(46,773	)		(52,165	)
Net carrying amount		21,780			12,458

Other financial liabilities are secured by property, plant and equipment for S/79.7 million (S/111.9 million in 2019).

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16.2. RIGHT-OF-USE ASSETS

As of December 31, 2019 and 2020, the Corporation recognized assets and liabilities for right-of-use, as shown in the following table:

	Buildings			Machinery and equipments			Vehicles			Total

At January 1, 2019
Additions		80,279			18,597			20,830			119,706
Depreciation charge		(13,568	)		(6,899	)		(8,929	)		(29,396	)
Translations adjustments		271			-			-			271
Net final carrying amount		66,982			11,698			11,901			90,581

At December 31, 2019
Cost		80,550			18,597			20,830			119,977
Accumulated depreciation		(13,568	)		(6,899	)		(8,929	)		(29,396	)
Net carrying amount		66,982			11,698			11,901			90,581


At January 1, 2020		66,982			11,698			11,901			90,581
Additions		6,681			876			4,518			12,075
Depreciation charge		(13,211	)		(5,834	)		1,514			(17,531	)
Disposals, net		(10,463	)		-			(11,078	)		(21,541	)
Translations adjustments		880			-			54			934
Net final carrying amount		50,869			6,740			6,909			64,518

At December 31, 2019
Cost		75,849			19,344			14,324			109,517
Accumulated depreciation		(24,980	)		(12,604	)		(7,415	)		(44,999	)
Net carrying amount		50,869			6,740			6,909			64,518

The expense for depreciation of right-of-use assets has been distributed in the following items of the consolidated statement of income:


	2019		2020

Cost of services and goods		26,449		15,938
Administrative expenses		2,947		1,593
		29,396		17,531

The costs related to the leasing of machinery and equipment for which the Corporation applied the exceptions described in paragraph 5 of IFRS 16 are the following:

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Leases under 12 months: S/351.7 million (S/167.3 million in 2019).

Leases of low value assets: S/5.1 million (S/7 million in 2019).

Likewise, leases whose payments are entirely variable, which depend on their future performance or use, were excluded, during the year 2020 the expenditure was S/48.7 million (in 2019, S/0.6 million).

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17 INTANGIBLE ASSETS

The movement in intangible assets and the related accumulated amortization as of December 31, 2019 and 2020 is as follows:

										Contractual			Software and			Costs of			Land
				Trade-			Concession			relations			development			development			use			Other
	Goodwill			marks			rights			with clients			costs			of wells			rights			assets			Total
At January 1, 2019
Cost		95,789			76,307			680,920			75,862			98,621			456,508			13,288			85,468			1,582,763
Accumulated amortization and impairment		(3,431	)		(23,817	)		(214,078	)		(71,565	)		(54,264	)		(321,004	)		-			(38,426	)		(726,585	)
Net cost		92,358			52,490			466,842			4,297			44,357			135,504			13,288			47,042			856,178

Net initial cost		92,358			52,490			466,842			4,297			44,357			135,504			13,288			47,042			856,178
Additions		-			-			26,645			-			(15,044	)		102,022			-			5,212			118,835
Capitalization of interest expenses		-			-			2,725			-			-			-			-			802			3,527
Transfers from assets under construction		-			-			-			-			672			-			-			(672	)		-
Derecognition - net		-			-			-			-			(2,015	)		-			-			(1,351	)		(3,366	)
Amortization		-			-			(49,049	)		(3,682	)		(7,529	)		(43,552	)		-			4,500			(99,312	)
Impairment loss		(33,089	)		-			(3,213	)		-			-			-			(2,468	)		-			(38,770	)
Impairment reversal		-			20,676			-			-			-			-			-			-			20,676
Translations adjustments		(1,902	)		(2,471	)		-			(114	)		946			-			-			-			(3,541	)
Net final cost		57,367			70,695			443,950			501			21,387			193,974			10,820			55,533			854,227

At December 31, 2019
Cost		93,887			73,836			710,290			72,810			63,278			558,530			13,288			113,057			1,698,976
Accumulated amortization and impairment		(36,520	)		(3,141	)		(266,340	)		(72,309	)		(41,891	)		(364,556	)		(2,468	)		(57,524	)		(844,749	)
Net cost		57,367			70,695			443,950			501			21,387			193,974			10,820			55,533			854,227

- 83 -

										Contractual			Software and			Costs of			Land
				Trade-			Concession			relations			development			development			use			Other
	Goodwill			marks			rights			with clients			costs			of wells			rights			assets			Total
At January 1, 2020
Cost		93,887			73,836			710,290			72,810			63,278			558,530			13,288			113,057			1,698,976
Accumulated amortization and impairment		(36,520	)		(3,141	)		(266,340	)		(72,309	)		(41,891	)		(364,556	)		(2,468	)		(57,524	)		(844,749	)
Net cost		57,367			70,695			443,950			501			21,387			193,974			10,820			55,533			854,227

Net initial cost		57,367			70,695			443,950			501			21,387			193,974			10,820			55,533			854,227
Additions		-			-			4,412			-			1,526			37,994			-			6,473			50,405
Capitalization of interest expenses		-			-			-			-			-			-			-			1,105			1,105
Transfers from assets under construction		-			-			-			-			(64	)		(25	)		-			-			(89	)
Derecognition - net		-			-			-			-			(492	)		-			-			-			(492	)
Amortization		-			-			(52,408	)		-			(6,037	)		(36,942	)		-			(3,234	)		(98,621	)
Translations adjustments		1,579			7,810			-			22			201			-			-			-			9,612
Reclassifications		-			(84	)		(24,157	)		-			74			-			-			10			(24,157	)
Net final cost		58,946			78,421			371,797			523			16,595			195,001			10,820			59,887			791,990

At December 31, 2020
Cost		95,466			81,562			690,545			77,542			63,871			596,499			13,288			120,645			1,739,418
Accumulated amortization and impairment		(36,520	)		(3,141	)		(318,748	)		(77,019	)		(47,276	)		(401,498	)		(2,468	)		(60,758	)		(947,428	)
Net cost		58,946			78,421			371,797			523			16,595			195,001			10,820			59,887			791,990

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a) Goodwill

Management reviews the results of its businesses on the basis of the type of economic activity carried on. As of December 31, the goodwill of the cash-generating units (CGUs) is distributed as follows:

	2019		2020
Engineering and construction		36,632		38,211
Electromechanical		20,735		20,735
		57,367		58,946

As a result of management’s annual impairment tests on goodwill, the recoverable amount of cash-generating units was determined on the basis of the greater their value in use and fair value less disposal costs. The value in use was determined on the basis of expected future cash flows generated by the evaluation of CGUs.

As a result of these evaluations, in 2020, no impairment was identified. In 2019, an impairment was identified in Morelco S.A.S. for S/33 million and Adexus S.A. for S/0.9 million. Through the subsidiary GyM S.A., the loss due to deterioration in Morelco was generated by the decrease in expected flows as a result of the reduction in the contracting of new projects during the year (“Backlog”). Additionally, the Company impaired the value of goodwill in Adexus, because the subsidiary submitted a request for bankruptcy reorganization before the courts of justice of Chile, under the law 20.720 of that country (Note 36).

The main assumptions used by the Corporation to determine fair value less disposal costs and value in use are as follows:

	Engineering
	and			Electro-
	construction			mechanical
	%			%

2019
Gross margin		12.43	%		8.86	%
Terminal growth rate		3.00	%		2.00	%
Discount rate		11.83	%		11.40	%

2020
Gross margin		12.50	%		9.36	%
Terminal growth rate		3.00	%		2.00	%
Discount rate		11.06	%		11.77	%

These assumptions have been used for the analysis of each CGUs for a period of 5 years.

Management determines budgeted gross margins based on past results and market development expectations. Average growth rates are consistent with those prevailing in the industry. The discount rates used are pre-tax or post-tax, as applicable, and reflect the specific risks associated with the CGUs evaluated.

b) Trademarks

- 85 -

This item mainly includes the brands acquired in the business combination processes with Vial y Vives S.A.C. (S/75.4 million) in August 2013, Morelco S.A.S. (S/33.33 million) in December 2014 and Adexus S.A. (S/9.1 million) in August 2016. Management determined that the brands from Vial y Vives, Morelco and Adexus have indefinite useful lives; consequently, annual impairment tests are performed on these intangible assets as explained in paragraph a) above.

As a result of these evaluations, in 2020, no impairment was identified. In 2019, the Vial y Vives - DSD the brand impairment was reversed for S/20.7 million (equivalent to CLP4,782 million). Management considered that the market value of the brand has increased due to the increase of projects in execution and projects and award process.

Additionally, in 2019, the Company impaired the value of the Adexus brand, because the subsidiary submitted a request for bankruptcy reorganization before the courts of justice of Chile, under the law 20.720 of that country (Note 36).

The main assumptions used by the Corporation to determine fair value less cost of sales are as follows:

				Engineering
	and construction
	Morelco			Vial y Vives-DSD
	%			%

2019
Average revenue growth rate		5.70	%		19.58	%
Terminal growth rate		3.00	%		2.00	%
Discount rate		11.83	%		14.12	%


2020
Average revenue growth rate		7.60	%		5.00	%
Terminal growth rate		3.00	%		2.10	%
Discount rate		11.06	%		13.16	%

c) Concessions

As of December 31, mainly include intangibles of Norvial S.A.:

- 86 -

	2019		2020

EPC Contract		62,319		54,506
Construction of the second tranch of the “Ancon-
Huacho-Pativilca” highway		4,809		3,406
Cost of capitalized indebtedness at effective interest
rates between 7.14% and 8.72%		950		-
Road improvement		14,449		12,922
Implementation for road safety		8,152		9,034
Work capitalization of second roadway		314,614		280,326
Disbursements for land adquisition		4,233		4,510
Other intangible assets contracted for the
delivery process		7,477		5,026
Total Norvial S.A.		417,003		369,730
Other concessions		26,947		2,067
		443,950		371,797

Additionally, the reclassification presented includes S/21.8 million from Concesionaria Via Expresa Sur S.A. which was transferred to other accounts receivable (Note 13.e).

d) Cost of well’s development

Through one of its subsidiaries, GMP S.A., the Corporation operates and extracts oil from two fields (Lot I and Lot V) located in the province of Talara, in northern Peru. Both fields are operated under long-term service contracts in which the Corporation provides hydrocarbon extraction services to Perupetro. The expiration date of these contracts are December 2021 and October 2023 for Lot 1 and Lot V, respectively.

On December 10, 2014, the Peruvian State granted the subsidiary GMP S.A. the right to exploit for 30 years the oil lots III and IV (owned by the Peruvian State - Perupetro) located in the Talara basin, Piura. The investment committed is estimated at US$400 million and corresponds to the drilling of 230 wells in Lot III and 330 wells in Lot IV. The drilling began in April 2015 in both lots.

As part of the Corporation’s obligations under the infrastructure, it is necessary to incur certain costs to prepare the wells located in Lots I, III, IV and V. These costs are capitalized as part of the intangible assets with a value of S/41 million during 2020 (S/108 million in 2019), which includes the capitalization of the provision for dismantling wells and instalations in Lots I, III, IV and V, which during 2020 has not had a significant movement (S/36 million during 2019).

The lots are amortized on the basis of the useful lives of the wells (determined on the remaining terms for lots I and V and units produced for lots III and IV), until the term of contract with Perupetro.

e) Amortization of intangible assets

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

	2019		2020
Cost of sales and services (Note 26)		94,676		94,483
Administrative expenses (Note 26)		4,636		4,138
		99,312		98,621

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18 BORROWINGS

As of December 31, this item includes:

			Total				Current				Non-current
	2019		2020		2019		2020		2019		2020

Bank loans (a)		631,863		571,659		445,289		409,272		186,574		162,387
Finance leases (b)		23,650		52,391		10,357		13,635		13,293		38,756
Lease liability for right-of-use asset (c)		92,870		72,726		23,980		19,950		68,890		52,776
Other financial entities (d)		142,212		201,544		1,903		10,027		140,309		191,517
		890,595		898,320		481,529		452,884		409,066		445,436

a) Bank Loans

As of December 31, 2019 and 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 0.5% and 11.0% in 2020.

								Current				Non-current
	Interest			Date of		At December, 31				At December, 31
	rate			maturity		2019		2020		2019		2020

GyM S.A. (i)		2.00% / 11.00	%		2022		170,798		222,924		26,401		19,977
GMP S.A. (ii)		3.06% / 6.04	%		2027		30,367		24,950		102,895		99,474
AENZA S.A.A. (formerly Graña y Montero S.A.A.) (iii)		9.10% / 10.10	%		2022		112,854		51,977		-		39,618
Adexus S.A.		0.50% / 1.15	%		2021		20,927		19,224		57,278		-
Viva GyM S.A.		6.84% / 11.00	%		2022		110,343		90,197		-		3,318
							445,289		409,272		186,574		162,387

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.

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 December 31, 2020 due to the stoppage of activities generated by the COVID-19 pandemic, the account receivable rate and unbilled receivable rate reached 56% and 142%, respectively. In relation to account receivable rate, the Company does not comply with the requirement of the Financial Stability Framework Agreement.

- 88 -

As of December 31, 2019, the balance payable under the Financial Stability Framework Agreement amounted to US$44.2 million (equivalent to S/146.6 million). In August 2019, the Corporation paid the entire balance of Tranche B, equivalent to S/9.7 million and US$9.2 million. In September and October 2019, Tranche A was partially paid for S/.0.4 million and US$0.1 million; and S/0.5 million, respectively.

As of December 31, 2020, the Company's balance payable under the Financial Stability Framework Agreement amounts to US$30.7 million (equivalent to S/111 million).

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 S.A.(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 December 31, 2020, these loans amount to US$23.2 million (equivalent to S/84.1 million), and due in 2027, this amount corresponds to the 50% interest held by the subsidiary GMP.

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 December 31, 2020, the loan amounts to US$11 million (equivalent to S/40 million), this amount corresponds to the 50% interest held by the subsidiary GMP and is due in 2026.

As of December 31, 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.

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. In February 2020, US$10 million was partially paid. On February 28, 2020, the waiver was obtained by the Company, so it was reclassified to non-current liabilities. As of December 31, 2020 and as of the date of this report, the Company is in compliance with the covenants established in the loan contract.

- 89 -

On November 13, 2020, as a consequence of the health crisis caused by COVID-19, the Company notified CS Peru Infrastructure Holdings LLC of the breach of the leverage ratio in accordance with Section 8.10 (b) for the period ended September 30, 2020. On December 23, 2020, the Company obtained a waiver from CS Peru Infrastructure Holdings LLC for the non-applicability of the leverage ratio for the period ended September 30, 2020 and December 31, 2020.

As of December 31, 2020, the principal amount of the loan is US$25.7 million, equivalent to S/93.2 million (US$35 million, equivalent to S/112.9 million, as of December 31, 2019).

b) Financial Leases

						Current				Non-current
	Interest			Date of		At December, 31				At December, 31
	rate			maturity		2019		2020		2019		2020

Adexus S.A.		0.23% / 0.51	%		2027		608		6,848		62		31,557
Viva GyM S.A.		7.79% / 9.04	%		2023		4,297		4,617		7,399		4,357
GyM S.A.		4.80% / 7.67	%		2023		3,395		2,021		5,678		2,823
GMP S.A.		6.28	%		2022		1,511		149		154		19
Concar S.A.C.		4.30% / 5.05	%		2020		546		-		-		-
							10,357		13,635		13,293		38,756

The minimum payments to be made according to their maturity and the present value of the leasing obligations are as follows:

	At December 31,
	2019			2020

Up to 1 year		11,438			16,287
From 1 to 5 years		16,877			35,770
Over 5 years		-			8,515
		28,315			60,572
Future financial charges		(4,665	)		(8,181	)
Present value of the obligations for finance lease contracts		23,650			52,391

The present value of the finance lease agreements obligations are as follows:

	At December 31,
	2019		2020

Up to 1 year		10,357		13,635
From 1 year to 5 years		13,293		30,635
Over 5 years		-		8,121
		23,650		52,391

- 90 -

c) Lease liability for right-of-use asset

						Current				Non-current
	Interest			Date of				At December, 31				At December, 31
	rate			maturity		2019		2020		2019		2020

GMP S.A.		6.59% / 7.80	%		2023		10,584		6,765		10,261		2,926
AENZA S.A.A. (formerly Graña y Montero S.A.A.)		7.88	%		2027		4,888		6,534		50,362		41,403
Adexus S.A.		0.25% / 0.50	%		2025		5,734		3,408		6,920		5,656
GyM S.A.		7.65	%		2022		1,592		852		541		426
Concar S.A.C.		5.55	%		2024		1,171		2,047		806		1,925
GMI S.A.		7.40	%		2023		-		302		-		381
Ferrovías S.A.		10.00	%		2023		-		42		-		59
Other minors		6.31% / 10.00	%		2020		11		-		-		-
							23,980		19,950		68,890		52,776

The minimum payments to be made according to their maturity and the present value of the lease liability for right-of-use asset obligations are as follows:

	At December 31,
	2019			2020

Up to 1 year		31,036			24,714
From 1 to 5 years		73,370			51,853
Over 5 years		11,551			11,131
		115,957			87,698
Future financial charges		(23,087	)		(14,972	)
Present value of the lease liability for right-of-use asset obligations		92,870			72,726

The present value of the lease liability for right-of-use asset obligations are as follows:

	At December 31,
	2019		2020

Up to 1 year		23,981		19,950
From 1 year to 5 years		57,713		42,641
Over 5 years		11,176		10,135
		92,870		72,726

d) Other financial entities

The balance is mainly composed of the monetization of Norvial dividends, as described below.

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.

- 91 -

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.

During the 2020 period, the Company reviewed the projected cash flows and effective interest rate of the financial liability with BCI Peru based on new information available on Norvial's projected traffic and determined that there was a material quantitative change that exceeds the +/-10% . For this reason, the liability with BCI Peru measured at amortized cost was derecognized during 2020 in the amount of US$46 million; the difference between this amount and the new liability amounted to US$3.9 million, which was recorded in other income and expenses (net) in the income statement. Simultaneously, the Company recorded the same liability amounting to US$42.1 million which is measured at fair value from the date of initial recognition, see note 2.19.

As of December 31, 2020, the loan balance payable amounted to US$42.1 million (equivalent to S/152.5 million), and corresponds entirely to the loan principal (as of December 31, 2019, the balance was US$42.9 million, equivalent to S/142.2 million).

Fair value of debt

The book value and fair value of financial liabilities are as follows:

	Carrying amount				Fair value
	At December, 31				At December, 31
	2019		2020		2019		2020

Bank loans		631,863		571,659		650,224		589,737
Finance leases		23,650		52,391		23,697		54,343
Lease liability for right-of-use asset		92,870		72,726		109,453		88,779
Other financial entities		142,212		201,544		142,212		247,857
		890,595		898,320		925,586		980,716

In 2020, fair values are based on discounted cash flows using debt rates between 0.7% and 11% (between 2.9% and 11% in 2019) and are within level 2 of the fair value hierarchy.

- 92 -

BONDS

As of December 31, this item includes:

	Total				Current				Non-current
	2019		2020		2019		2020		2019		2020

GyM Ferrovías S.A. (a)		618,497		624,454		15,742		21,081		602,755		603,373
Norvial S.A. (b)		305,545		280,848		28,995		32,819		276,550		248,029
GyM S.A. (c)		-		27,457		-		4,546		-		22,911
		924,042		932,759		44,737		58,446		879,305		874,313

GyM Ferrovias S.A.

In February 2015, the subsidiary GyM Ferrovias S.A. issue corporate bonds under Regulation S of the United States of America. The issuance was made in VAC soles (adjusted for the Constant Update Value) for an amount of S/629 million. The bonds expire in November 2039 and accrue interest at a rate of 4.75% (plus the VAC adjustment), present a risk rating of AA + (local scale) granted by Support & International Associates Risk Classifier. As of December 31, 2020, an accumulated amortization amounting to S/90.6 million (S/79 million as of December 31, 2019) has been made.

As of December 31, 2020, the balance includes accrued interest payable and VAC adjustments for S/103.4 million (S/86.8 million as of December 31, 2019).

As of December 31, 2019 and 2020, the movement of this account is as follows:

	2019			2020

Balance at January, 1		611,660			618,497
Amortization		(11,330	)		(11,582	)
Accrued interest		48,253			47,615
Interest paid		(30,086	)		(30,076	)
Balance at December, 31		618,497			624,454

As part of the bond structuring process, GyM Ferrovias S.A. pledged to report and verify compliance with the following, measured according to 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 month of operation and maintenance costs (including VAT). As of December 31, 2019, maintain a minimum balance equal to one quarter of operating and maintenance costs.

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 2020, GyM Ferrovias S.A. has complied with the corresponding covenants.

As of December 31, 2020, the fair value amounts to S/710 million (S/686.8 million, as of December 31, 2019), this is based on discounted cash flows using the rate of 3.6% (4.32% as of December 31, 2019) and corresponds to level 2 of the fair value hierarchy.

- 93 -

Norvial S.A.

Between 2015 and 2016, the subsidiary, Norvial S.A., issued the First Corporate Bond Program on the Lima Stock Exchange for S/365 million. The rating companies Equilibrium Risk and Apoyo & Asociados Internacionales gave the rating of AA to this debt instrument.

The purpose of the awarded funds was to finance the construction works of the Second Stage of the Road Network No. 5 and the financing of the VAT linked to the execution of the expenses of the Project.

As of December 31, 2019, and 2020, the movement in this account is as follows:

	2019			2020

Balance at January, 1		325,382			305,545
Amortization		(20,005	)		(24,820	)
Accrued interest		23,482			24,619
Capitalized interest		2,725			-
Interest paid		(26,039	)		(24,496	)
Balance at December, 31		305,545			280,848

As part of the bond structuring process, Norvial S.A. undertook to periodically report and verify compliance with the following covenants:

Debt service coverage ratio not less than 1.3 times;

Proforma leverage ratio less than 4 times.

As of December 31, 2019, and 2020, Norvial S.A. has complied with the corresponding covenants.

As of December 31, 2020, the fair value amounts to S/304.7 million (as of December 31, 2019, amounts to S/327.2 million,), this is based on discounted cash flows using rates between 6.73% and 8.07% (between 6.20% and 7.59% as of December 31, 2019) corresponds to level 2 of the fair value hierarchy.

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 December 31, 2020, the balance includes accrued interest payable for US$0.6 million (equivalent to S/2.2 million).

As of December 31, 2020, the fair value amounts to S/28.6 million, is based on discounted cash flows using rate 7.14% and is within level 3 of the fair value hierarchy.

- 94 -

TRADE ACCOUNTS PAYABLE

As of December 31, this item includes:

	Total				Current				Non-current
	2019		2020		2019		2020		2019		2020

Invoices payable (a)		398,347		470,118		363,533		470,118		34,814		-
Provision of contract costs (b)		758,116		659,299		758,116		618,797		-		40,502
Notes payable		37,426		8,252		37,426		8,252		-		-
		1,193,889		1,137,669		1,159,075		1,097,167		34,814		40,502

(a) Invoices payable are obligations accredited with formal documents. The following are the invoices payable according to main projects:

	2019		2020
Infrastructure
Linea 1 - Metro de Lima		15,125		18,992
Oil services		46,932		33,085
Operation and maintenance - Roads		16,000		20,194
		78,057		72,271

Engineering and Construction
Talara Refinery		59,740		96,051
Engineering and Construction Works VYV - DSD Chile Ltda.		26,368		70,987
Project Quellaveco		26,589		55,107
Engineering and Construction Works - Morelco S.A.S.		8,141		17,616
Works and Consortiums		64,571		17,114
Project Mina Justa		12,267		14,190
Project Mina Gold Fields La Cima S.A.		5,302		10,353
Generating Plant Machu Picchu		6,575		3,488
Civil works, assembly and electromechanics - Acero Arequipa		5,421		2,428
Civil Works, Assembly and Electromechanics - Toquepala		10,325		-
Others		2,825		44,385
		228,124		331,719
Real Estate		26,072		18,056
Parent Company Operation		66,094		48,072
		398,347		470,118

- 95 -

b) Provision of contract costs are obligations not accredited with formal documents. Below are the services received not billed according to main projects:

	2019		2020
Infrastructure
Linea 1 - Metro de Lima		13,383		13,645
Oil services		20,512		18,140
Operation and maintenance - Roads		18,762		31,027
		52,657		62,812

Engineering and Construction
Talara Refinery		418,540		204,102
Engineering and Construction Works VYV - DSD		68,140		106,186
Engineering and Construction Works - Morelco SAS		34,804		84,513
Project Quellaveco		24,185		42,822
Project Mina Justa		19,852		33,525
Mina Project of Gold Fields La Cima S.A.		15,050		12,670
Civil Works, Assembly and Electromechanics - Acero Arequipa		17,382		5,222
Generating Plant Machu Picchu		4,633		1,222
Civil Works, Assembly and Electromechanics - Toquepala		5,055		-
Others		71,450		34,682
		679,091		524,944
Real estate		13,573		24,509
Parent Company Operation		12,795		47,034
		758,116		659,299

OTHER ACCOUNTS PAYABLE

As of December 31, this item includes:

	Total				Current				Non-current
	2019		2020		2019		2020		2019		2020

Advances received from customers (a)		307,839		309,590		270,714		278,490		37,125		31,100
Consorcio Ductos del Sur - payable (b)		148,076		88,206		-		28,836		148,076		59,370
Salaries and other payable		92,313		77,386		92,313		77,386		-		-
Put option liability on Morelco acquisition (Note 32)		106,444		118,622		71,341		79,096		35,103		39,526
Third-party loans		11,619		11,608		9,545		9,533		2,074		2,075
Other taxes payable		108,457		115,862		88,248		102,240		20,209		13,622
Acquisition of additional non-controlling interest (Note 35-a)		22,697		27,596		22,697		27,596		-		-
Guarantee deposits		16,445		23,744		16,445		23,744		-		-
Consorcio Rio Mantaro - payables		35,625		58,129		35,625		58,129		-		-
Provision of interest for debt with suppliers		16,055		16,425		4,326		-		11,729		16,425
Other accounts payables		100,394		54,468		58,420		33,356		41,974		21,112
		965,964		901,636		669,674		718,406		296,290		183,230

(a)

Advances received from customers relate mainly to construction projects, and are discounted from invoicing, in accordance with the terms of the contracts.

- 96 -

	Total				Current				Non-current
	2019		2020		2019		2020		2019		2020

Advances Customers Consortiums		115,250		83,640		113,093		83,640		2,157		-
Customer advances for real estate projects		66,258		78,286		66,258		78,286		-		-
Concentradora Norte - Quellaveco		64,118		86,415		44,932		71,571		19,186		14,844
Special National Transportation Infrastructure Project		42,030		24,050		26,534		13,781		15,496		10,269
Others		20,183		37,199		19,897		31,212		286		5,987
		307,839		309,590		270,714		278,490		37,125		31,100

(b)

The other accounts payable of Consorcio Constructor Ductos del Sur correspond to payment obligations to suppliers and the main subcontractors for S/235 million, 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.

OTHER PROVISIONS

As of December 31, this item includes:

			Total				Current				Non-current
	2019		2020		2019		2020		2019		2020

Legal claims (a)		272,274		321,001		101,266		128,953		171,008		192,048
Tax claims		6,045		5,630		2,369		1,954		3,676		3,676
Provision for well closure		50,116		52,949		9,848		10,837		40,268		42,112
		328,435		379,580		113,483		141,744		214,952		237,836

Additions for legal claims correspond to:

i) Civil compensation

As of December 31, 2020 corresponds 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 December 31, 2020, the present value of the estimated provision totals S/191 million (S/154 million as of December 31, 2019).

ii) Class Action

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.

As of the date of this report, the Company has signed the definitive settlement agreement with plaintiffs' counsel, whereby the parties agree to terminate the class action subject to Court approval and payment of the settlement amount by the Company. The amount stipulated for the termination of the class action is equivalent to US$20 million. As of December 31, 2019, the Company registered a provision of US$15 million (equivalent of S/49.8 million). As of December 31, 2020, the Company maintains a provision of US$14.7 million plus interest of US$0.2 million (equivalent to S/53.1 million and S/0.9 million, respectively). In 2020, a payment of US$0.3 million (equivalent to S/1.1 million ) and US$5 million was made and covered by the Company and by the professional liability policy in accordance with the agreement signed with the insurer, respectively.

- 97 -

iii) Other provisions

As of December 31, 2020 corresponds to legal claims of civil, labor, administrative processes and administrative litigation nature, for an estimated provision of S/76 million (S/68.5 million as of December 31, 2019). Legal claims of a civil nature, mainly includes claims received from clients for S/41.4 million, corresponding to the subsidiary GyM S.A. (S/46 million as of December 31, 2019).

The gross movement of other provisions is as follows:

				Contingent
	Legal			liabilities			Provision
	and tax			resulting from			for well
Other provisions	claims			acquisitions			closure			Total

At January 1, 2019		84,728			4,498			20,382			109,608
Additions		197,721			-			30,998			228,719
Reversals of provisions		(3,122	)		(4,349	)		-			(7,471	)
Payments		(914	)		-			(1,264	)		(2,178	)
Translation adjustments		(94	)		(149	)		-			(243	)
At december 31, 2019		278,319			-			50,116			328,435

At January 1, 2020		278,319			-			50,116			328,435
Additions		81,946			-			4,632			86,578
Reversals of provisions		(36,827	)		-			-			(36,827	)
Reclasification		1,079			-			-			1,079
Payments		(7,252	)		-			(1,799	)		(9,051	)
Translation adjustments		9,366			-			-			9,366
At december 31, 2020		326,631			-			52,949			379,580

EQUITY

Capital

On April 2, 2019, the Company concluded the capital increase process by completing the subscription of 142,483,663 new common shares, therefore the capital of the company is represented by S/871,917,855, after the end of the private offer and considering the contributions made during the 2 preferential subscription wheels.

As of December 31, 2020, a total of 190,863,050 shares were represented in ADS, equivalent to 38,172,610 ADSs at a rate of 5 shares per ADS; and as of December 31, 2019, 218,043,480 shares were represented by ADS, equivalent to 43,608,696 ADSs

- 98 -

As of December 31, 2020, the Company's shareholding structure is as follows:

			Total
Percentage of individual	Number of		percentage of
interest in outstanding capital	shareholders		interest

Up to 1.00		1,728		13.27	%
From 1.01 to 5.00		14		27.98	%
From 5.01 to 10.00		2		13.38	%
Over 10		3		45.37	%
		1,747		100.00	%

As of December 31 2020, the Company's shares registered a stock price at the end of the year of S/1.72 per share and a trading frequency of 95.65% (S/1.70 per share and a trading frequency of 95.24% at 31 December 2019).

b)	Legal reserve

In accordance with the Peruvian General Law of Corporations, the legal reserve of the Company is constituted with the transfer of 10% of the annual profit until reaching an amount equivalent to 20% of the paid-in capital. In the absence of profits or unrestricted reserves, the legal reserve must be applied to the compensation of losses and must be replenished with the profits of subsequent years. This reserve may be capitalized; and its replacement is also mandatory.

c)	Voluntary reserve

As of December 31, 2019, and 2020, this S/29.97 million reserve is related to the excess of the legal reserve; this reserve is above the requirement to constitute a reserve until it reaches the equivalent of 20% of the paid-in capital.

d)	Share premium

This item includes the excess of total income obtained by shares issued in 2013 compared to their nominal value of S/1,055.5 million; and by shares issued in 2019 an amount of S/138.1 million and 2020 for the acquisition of a non-controlling interest for S/0.6 million.

In addition, this account recognizes the difference between the nominal value and the transaction value for acquisitions of shares in non-controlling interests.

e)	Retained earnings

Dividends distributed to shareholders other than domiciled legal entities are subject to the rates of 4.1% (earnings until 2014), 6.8% (2015 and 2016 earnings) and 5.00% (2017 and thereafter) for income tax charged to these shareholders; such tax is withheld and settled by the Company. Dividends for fiscal years 2019 and 2020 were not distributed (Note 33).

- 99 -

24	DEFERRED INCOME TAX

Deferred income tax is classified by its estimated reversal term as follows:

	At December 31,
	2019			2020

Deferred income tax asset:
Reversal expected in the following twelve months		37,927			44,780
Reversal expected after twelve months		233,792			217,843
Total deferred tax asset		271,719			262,623

Deferred income tax liability:
Reversal expected in the following twelve months		(19,791	)		(1,261	)
Reversal expected after twelve months		(92,943	)		(101,646	)
Total deferred tax liability		(112,734	)		(102,907	)
Deferred income tax asset, net		158,985			159,716


The gross movement of the deferred income tax item is as follows:

		At December 31,
		2019			2020

Opening balance		365,263			158,985
Debit (credit) to income statement (Note 29)		(188,509	)		(4,855	)
Adjustment for changes in rates of income tax		(622	)		-
IFRIC 23 adoption		(986	)		-
Debit (credit) to equity		(3	)		-
Other movements		(16,158	)		5,586
Final balance		158,985			159,716

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The movement in deferred tax assets and liabilities in the year, without considering the offsetting of balances, is as follows:

	Difference in						Work						Borrowing
Deferred income	depreciation			Deferred			in			Tax			costs
tax liabilities	rates			income			process			receivable			capitalized			PPA			Others			Total

At January 1, 2019		81,553			13,574			5,456			32,878			15,716			(1,562	)		20,745			168,360
(Charge) credit to P&L		9,937			10,571			33,403			3,312			(780	)		11,385			18,821			86,649
At December 31, 2019		91,490			24,145			38,859			36,190			14,936			9,823			39,566			255,009

(Charge) credit to P&L		(4,565	)		(8,239	)		(16,740	)		2,836			172			357			(18,891	)		(45,070	)
Reclassification		1,063			-			(4,916	)		-			-			(1,263	)		2,721			(2,395	)
At December 31, 2020		87,988			15,906			17,203			39,026			15,108			8,917			23,396			207,544


				Accelerated									Accrual for
Deferred income				tax			Tax			Work			unpaid									Tax
tax assets	Provisions			depreciation			losses			in process			vacations			Impairment			NIIF 9			Goodwill			Others			Total

At January 1, 2019		42,572			921			178,289			34,005			9,782			253,767			-			18,048			(3,761	)		533,623
Charge (credit) to P&L		804			7,512			14,343			11,715			1,842			(205,265	)		46,804			(4,526	)		24,289			(102,482	)
Charge (credit) to equity		-			-			-			-			-			-			-			-			(3	)		(3	)
Sale of subsidiary		-			-			(986	)		-			-			-			-			-			-			(986	)
Others		-			-			-			-			-			-			-			-			(16,158	)		(16,158	)
At December 31, 2019		43,376			8,433			191,646			45,720			11,624			48,502			46,804			13,522			4,367			413,994

Charge (credit) to P&L		(37,675	)		374			(8,767	)		(12,298	)		1,416			3,257			(10,874	)		(4,518	)		19,160			(49,925	)
Reclassification		24,340			(1,154	)		3,616			(28,630	)		-			(507	)		10,067			4,989			(15,116	)		(2,395	)
Others		-			-			-			-			-			-			-			-			5,586			5,586
At December 31, 2020		30,041			7,653			186,495			4,792			13,040			51,252			45,997			13,993			13,997			367,260

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As of December 31, 2020, the total tax loss amounts to S/646.7 million and is composed as follows:

		Tax loss
	Tax	aplication	Application			Statute of
	loss	method	2020	2021	Forward	limitations

GyM S.A.	354,381	B	41,547	2,599	310,235	-
Adexus S.A.	149,303	N/A	-	-	149,303	-
Vial y Vives – DSD S.A.	103,886	N/A	-	-	103,886	-
Transportadora de Gas Natural	15,989	B	-	-	15,989	-
Viva GyM S.A.	9,454	A	-	9,454	-	2022
GyM Chile S.p.A.	4,236	N/A	-	-	4,236
GMI S.A.	3,052	A	3,052	-	-	2025
GMP S.A.	2,092	A	-	-	2,092	2025
Survial S.A.	1,526	B	1,526	-	-	-
Incolur DSD	1,507	N/A	-	-	1,507	-
AENZA S.A.A. (formerly Graña y Montero S.A.A.)	1,014	A	1,014	-	-	2022
Qualys S.A.	162	A	162	-	-	2025
	646,602		47,301	12,053	587,248

According to Peruvian legislation, there are two ways to compensate for tax losses:

System A, it is allowed to offset the tax loss in future years up to the following four (4) years from the date the loss is incurred. According to Legislative Decree No. 1481 of May 2020, the application term is extended until five (5) years with respect to the tax loss generated in fiscal year 2020.

System B. The tax loss may be offset in future years up to 50% of the net rent of each year. This option does not consider a statute of limitations.

The taxable goodwill relates to the tax credit generated in the reorganization of the Chilean subsidiaries in 2014, in accordance with such legislation.

Deferred income corresponds to income that, according to Colombian tax regulations, is not recognized as such for tax purposes until certain requirements are met.

25	WORKERS’ PROFIT SHARING

The distribution of the workers’ profit sharing in the income statement for the years ended December 31 is shown below:

	2019		2020
Cost of sales of goods and services		4,661		2,147
Administrative expenses		1,679		23
		6,340		2,170

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26	COSTS AND EXPENSES BY NATURE

For the years ended December 31, the detail of this item is as follows:

	Cost
	of goods			Administrative
	and services			expenses		Total
2019
Services provided by third-parties		1,511,314			66,207		1,577,521
Salaries, wages and fringe benefits (i)		1,040,293			143,317		1,183,610
Purchase of goods		942,633			33		942,666
Other management charges		174,678			27,708		202,386
Depreciation (Note 16.1)		108,066			4,252		112,318
Amortization (Note 17.e)		94,676			4,636		99,312
Impairment of accounts receivable (ii)		4,900			-		4,900
Taxes		6,951			2,499		9,450
Impairment of property, plant and equipment		3,907			-		3,907
Impairment of investments		255			-		255
Inventory recovery		(249	)		-		(249	)
		3,887,424			248,652		4,136,076

	Cost
	of goods			Administrative
	and services			expenses		Total
2020
Services provided by third-parties		987,995			39,000		1,026,995
Salaries, wages and fringe benefits (i)		1,010,315			86,943		1,097,258
Purchase of goods		608,424			73		608,497
Other management charges		158,929			14,322		173,251
Depreciation (Note 16.1)		90,146			8,358		98,504
Amortization (Note 17.e)		94,483			4,138		98,621
Impairment of accounts receivable (ii)		32,215			4		32,219
Taxes		5,956			71		6,027
Impairment of property, plant and equipment		4,950			-		4,950
Impairment of investments		38			-		38
Inventory recovery		(30	)		-		(30	)
		2,993,421			152,909		3,146,330

(i) For the years ended on December 31, salaries, wages and fringe benefits comprise the following:

	2019		2020

Salaries		853,579		814,874
Statutory gratification		93,262		91,189
Social contributions		61,533		57,763
Employee’s severance indemnities		49,944		60,090
Vacations		42,025		42,135
Workers' profit sharing (Note 25)		6,340		2,170
Others		76,927		29,037
		1,183,610		1,097,258

(ii) For the years ended December 31, the impairment of accounts receivable includes the following:

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Detail of impairment of accounts receivables:


	2019		2020
Trade accounts receivables		955		19,772
Other accounts receivable		5,704		12,318
Accounts receivable from related parties		1,524		129
		8,183		32,219

27	FINANCIAL INCOME AND EXPENSES

For the years ended on December 31, these items include the following:

	2019			2020

Financial income:
Interest on loans to third parties		36,876			863
Profit for present value of financial asset or financial liability		30,408			30,545
Interest on short-term bank deposits		4,770			2,457
Commissions and collaterals		535			601
Others		1,757			2,765
		74,346			37,231


Financial expenses:
Interest expense:
- Bank loans		93,019			69,420
- Bonds		26,113			26,771
- Loans from third parties		16,275			12,612
- Right-of-use		5,978			4,600
- Financial lease		2,218			3,139
Commissions and collaterals		24,521			14,077
Loss for present value of financial asset or financial liability		41,131			4,552
Exchange difference loss, net		32,840			5,802
Derivative financial instruments		92			64
Other financial expenses		18,176			20,793
Less capitalized interest		(7,229	)		(4,887	)
		253,134			156,943

28	OTHER INCOME AND EXPENSES, NET

For the years ended December 31, these items include the following:

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	2019			2020
Other income:
Sale of assets		12,748			9,118
Penalty income		984			1,168
Supplier debt forgiveness		19,026			14,545
Recovery of provisions and impairments		23,279			6,501
Trademarks revaluation		20,676			-
Profit from Mizuho Bank Ltd. agreement (a)		89,688			-
Others		13,384			4,272
		179,785			35,604

Other expenditures:
Asset impairment (b)		339,774			59,440
Civil repair to the Peruvian Government		69,150			37,109
Net cost of fixed assets disposal		23,697			8,682
Legal and tax litigation		49,754			7,673
Renegotiation of contract with suppliers		-			4,889
Present value of the call option		4,697			2,326
Provision for well closure		4,055			112
Administrative fine		1,423			1,897
Others		26,729			708
		519,279			122,836
		(339,494	)		(87,232	)

(a) Corresponds to the refinancing agreement linked to the contract signed between GyM Ferrrovias S.A. and Mitzuho Bank Ltd. where the Company acted as an endorsement of the transaction. Under the contract, a bond letter was issued with Mitzuho Bank Ltd. for it to be covered with a financial derivative required for the closing of the CPAOs purchase operation of the Expansion Project. The contract further indicated that in the event that the bank refinanced the debt obtained for the purchase of the CPAOS, the Company received 70% of the gains obtained.

(b) As of December 31, 2020, corresponds a impairment of accounts receivable generated by the subsidiary Concessionaire Vía Expresa Sur S.A. for S/12.2 million (Note 13), as a consequence of the new estimates of the Company regarding the recovery of the investment it maintains in the project, this project concession contract has been suspended by mutual agreement with the Municipality of Lima since June 2017 (Note 13); impairment accounted in CAM Holding S.P.A. for S/12.5 million for claims accepted against the guarantee account (Note 13), and impairment of accounts receivable generated by the subsidiary Concar S.A. for S/33.7 million to the Regional Government of Cusco (Note 10); other minor for S/0.5 million from other accounts receivable (Note 13) and S/ 0.5 million from trade accounts receivable (Note 10) (as of December 31, 2019 corresponds to a provision for impairment of accounts receivable from GSP for S/276 million; the subsidiary Promotora Larco Mar SA recognized an impairment in its assets in progress for S/18.2 million; the subsidiary GyM SA recognized an impairment of intangibles for S/ 35.4; the subsidiary Adexus recognized an impairment of Intangibles for S/10.1 million).

29	TAX SITUATION

a)	Each company of the Corporation is individually subject to the applicable taxes in Peru, Chile and Colombia. Management considers that it has determined the taxable income under general income tax laws in accordance with the tax legislation current effective of each country.

b)	Changes in the Income Tax Law in Colombia -

With the entry into force of the law 2010 of December 2019 law of economic growth, employment, investment, strengthening of public finances and the progressivity, equity and efficiency of the tax system, the following was stipulated as of January 1 2020.

The income tax rate applicable to national societies, permanent establishments and foreign legal entities will be 32%, 31% and 30% for the periods 2020,2021 and 2022, respectively.

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Payments abroad for interest, commissions, fees, royalties, leases, personal services are subject to withholding tax at the rate of 20%. Payments for consulting, technical services and technical assistance provided by non-residents are subject to the 20% withholding tax rate. Payments for financial returns to non-residents are subject to the 15% withholding tax rate. Payments to the parent company for management fee, are subject to the 33% withholding tax rate.

In case of an increase in taxable income of 30% with respect to the previous year, for fiscal years 2020 and 2021, the statute of limitation of the returns would be six (6) months and in the case of a 20% increase year will be close at month twelve (12).

c)	The income tax expense shown in the consolidated statement of income comprises:

	2019		2020

Current income tax		114,240		53,134
Deferred income tax (Note 24)		189,131		4,855
Income tax expense		303,371		57,989

d)	The Corporation’s income tax differs from the theoretical amount that would have resulted from applying the weighted-average income tax rate applicable to the profit reported by of the consolidated companies, as follows:

	2019			2020

Loss before income tax		(535,271	)		(38,475	)

Income tax by applying local applicable tax
rates on profit generated in the respective countries		(157,744	)		(10,819	)
Tax effect on:
- Reversal of deferred income tax asset		174,716			7,950
- Non-recoverable item		85,301			7,275
- Non-deductible expenses		84,620			27,124
- Unrecognized deferred income tax asset		82,424			30,058
- Change in prior years estimations		36,529			2,578
- Provision of tax contingencies		7,079			(3,421	)
- Adjustment for changes in rates of income tax		622			(240	)
- Non-taxable income		(1,195	)		(348	)
- Equity method (profit) loss		(64	)		226
- Others		(8,917	)		(2,394	)
Income tax		303,371			57,989

The theoretical tax disclosed is the result of applying the income tax rate in accordance with the tax legislation of the country where each company that is part of the Corporation is domiciled. In this sense, companies domiciled in Peru, Chile, and Colombia applied in 2020 income tax rates of 29.5%, 27% and 32% respectively (29.5%, 27% and 33% for 2019). Norvial S.A., GyM Ferrovias S.A., Concesionaria Via Expresa Sur S.A. and GMP S.A. (Blocks III and IV) have legal stability contracts signed with the Peruvian Government in force during the term of the associated concessions. Therefore, the consolidated theoretical amount is obtained from the weighting of the profit or loss before income tax and the applicable income tax rate.

- 106 -

	Rates			Utility
	Taxes			before the
	local			Tax			Tax
Country	Applicable			to Rent			to rent
	(A)			(B)			(A)*(B)
2019
Peru		29.50	%		(1,612,192	)		(475,597	)
Peru - Norvial S.A.		27.00	%		24,066			6,498
Peru - GyM Ferrovías S.A.		30.00	%		121,080			36,324
Peru - Vía Expresa Sur S.A.		30.00	%		(17,752	)		(5,326	)
Peru - GMP S.A.		29.00	%		35,421			10,272
Chile		27.00	%		(96,360	)		(26,017	)
Colombia		33.00	%		(11,824	)		(3,902	)
Bolivia		25.00	%		681			170
Unrealized gains					1,021,609			299,834
					(535,271	)		(157,744	)

2020
Peru		29.50	%		(88,739	)		(26,178	)
Peru - Norvial S.A.		27.00	%		(2,029	)		(548	)
Peru - GyM Ferrovías S.A.		30.00	%		87,521			26,256
Peru - Vía Expresa Sur S.A.		30.00	%		(11,968	)		(3,590	)
Peru - GMP S.A.		29.00	%		(1,930	)		(540	)
Chile		27.00	%		(14,309	)		(3,863	)
Colombia		32.00	%		(11,178	)		(3,577	)
Bolivia		25.00	%		(13	)		(3	)
Unrealized gains					4,170			1,224
					(38,475	)		(10,819	)

Peruvian tax authorities have the right to examine, and, if necessary, amend the income tax determined by the Company in the last four years - from January 1 of the year after the date when the tax returns are filed (open fiscal year). Therefore, years 2016 through 2020 are subject to examination by the tax authorities. Management considers that no significant liabilities will arise as a result of these possible tax examinations. Additionally, income tax returns for fiscal years 2017 to 2020 remain open for examination by the Chilean tax authorities who have the right to carry out said examination within the three years following the date the income tax returns have been filed. Fiscal years 2018, 2019 and 2020 are open for tax audit by Colombian tax authorities. Colombian tax authorities are entitled to audit two consecutive years following the date the income tax returns were filed.

In accordance with current Peruvian legislation, for purposes of determining income tax and general sales tax, the transfer prices of transactions with related companies and companies resident in low or no tax territories must be considered, for which purpose documentation and information must be available to support the valuation methods used and the criteria considered for their determination (transfer pricing rules).. The Tax Administration is authorized to request this information from the taxpayer. Based on the analysis of the Company's operations, Management and its legal advisors estimate that the transfer prices of transactions with related companies are based on market conditions, similar to those agreed with third parties, as of 31 December 2020.

h)	Temporary tax on net assets (ITAN)

Is applied by the companies which operate in Peru, to third category income generators subject to the Peruvian Income Tax General Regime. Effective the year 2012, the tax rate is 0.4%, applicable to the amount of the net assets exceeding S/1 million.

- 107 -

The amount effectively paid may be used as a credit against payments on account of income tax or against the provisional tax payment of the income tax of the related period.

In 2019, certain operations have not been recognized to have impact on income tax such as: additional impairment of investments in GSP (Negocios Gas S.A.) S/67 million, account receivable from the tax authorities converted to a contingent asset (GyM S.A.) amount to S/7.7 million and write-offs of non-recoverable assets (Concesionaria Via Expresa Sur S.A. and Promotora Larcomar S.A.) equal to S/10.8 million.

j)	The current income tax payable, after applying the corresponding tax credits and whose due date is up to the first week of April of the following year, includes mainly:

- GyM Ferrovias S.A.	S/22 million in 2020 and S/7 million in 2019
- Consorcio Vial Sierra	S/3.4 million in 2020

30	OTHER COMPREHENSIVE INCOME

The analysis of this account is reflected below:

									Exchange
				Foreign			Increase in		difference from
				currency			fair value of		net investment
	Cash flow			translations			available-for		in a foreign
	hedge			adjustment			sale assets		operation			Total

At January 1, 2019		490			(63,684	)		7,461		(9,954	)		(65,687	)

(Charge) credit for the year		8			(6,892	)		-		-			(6,884	)
Tax effects		(2	)		-			-		-			(2	)
Other comprehensive income of the year		6			(6,892	)		-		-			(6,886	)
At December 31, 2019		496			(70,576	)		7,461		(9,954	)		(72,573	)

(Charge) credit for the year		(594	)		8,158			-		708			8,272
Other comprehensive income of the year		(594	)		8,158			-		708			8,272
At December 31, 2020		(98	)		(62,418	)		7,461		(9,246	)		(64,301	)

The amounts in the above table only represent amounts attributable to the Company’s controlling interest, net of tax. The table below shows the movement in other comprehensive income per year:

	2019			2020
Controlling interest		(6,886	)		8,272
Non-controlling interest		(1,734	)		114
Total value in OCI		(8,620	)		8,386

31	CONTINGENCIES, COMMITMENTS, AND WARRANTIES

In the opinion of Management and its legal advisors, the provisions registered mainly for labor and tax claims are sufficient to cover the results of these probable contingencies. (Note 22).

a)	Tax contingencies

The Company considers that the maximum exposure for tax contingencies of the Corporate amounts to S/147.7 million according to the following detail:

- 108 -

Contentious Administrative Process before the Judiciary regarding the assessment of IGV or VAT tax from 1998 to 2002 for S/0.7 million and for Income Tax and IGV or VAT tax from 2001 for S/3.9 million. For fiscal year 2020, the dispute or claim for these processes has been summarized to the excessive collection of interest due to the time that has elapsed since the beginning of the process to date. In February 2020, a Contentious Administrative Process was started for the results of the audit by VAT tax 2011 amounting to S/0.7 million.

The appeal before SUNAT of income tax assessments from 2013 amounting to S/14 million (S/12.1 million correspond to GyM SA and S/1.9 million to Viva GyM SA), and of income tax assessments from 2014 amounting to S/65.5 million correspond to Aenza S.A.A.

The appeal before the Tax Court regarding VAT tax assessments for:

a)	Income tax from 2012, S/40 million to GyM S.A.

b)	Income Tax 2009, 2010 and 2013, S/12 million to AENZA S.A.A.

c)	Income Tax 2013 and 2016, S/6.4 million to GMI S.A.

d)	Income Tax 2009 and 2016, S/4.5 million from Viva GyM S.A.

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

b)	Other contingencies

Civil lawsuits, demanding compensation of damages, contract terminations and the enforcement of payment obligations S/99 million (S/2.9 million correspond to GyM S.A., S/1 million to Morelco S.A.S., S/.89.7 million to Viva GyM S.A. and S/5.4 million to Norvial S.A.).

Administrative contentious proceedings amounting to S/8.1 million (S/1.7 million correspond to Consorcio Terminales, S/0.6 million to GMP S.A., S/3.5 million to GyM Ferrovías S.A. and S/2.3 million to GyM S.A.)

Administrative processes amounting to S/7.8 million (S/5.5 million correspond to GyM S.A., S/0.6 million to Viva GyM S.A., S/0.5 million to GMP S.A. and its subsidiary and S/1.2 million to AENZA S.A.A.)

Labor dispute processes amounting to S/3 million (S/1.2 million correspond to Morelco S.A.S., S/1.6 million to GMP S.A. and its subsidiary and the rest to Concar S.A.C.)

c)	Letters bonds and guarantees

The Corporate maintains letters of guarantee and guarantees in force in various financial institutions guaranteeing operations for US $427.5 million (US $390 million as of December 31, 2019).

32	BUSINESS COMBINATIONS

Morelco S.A.S. acquisition

On December 23, 2014, the Company acquired control through its subsidiary GyM S.A., with the purchase of 70% of its shares representing the capital stock. Morelco S.A.S. is an entity domiciled in Colombia, whose principal economic activity is the provision of construction and assembly services. This acquisition forms part of the Corporate’s expansion plans in markets with high growth potential such as Colombia and in attractive industries such as mining and energy.

As of December 31, 2014, the Company determined goodwill on this acquisition based on an estimated purchase price of US$93.7 million (equivalent to S/277.1 million) which included cash payments made of US$78.5 million and estimated payables of US$15.1 million (equivalent to S/45.7 million), which according to what was agreed between the parties, would be defined after the review of the balance sheet of the acquired entity mainly referring to working capital, cash and financial debt and the determination of the definitive value of the contracted works pending to execute (backlog) of the acquired business. The estimated purchase price was distributed among the provisional fair values of the assets acquired, and liabilities assumed.

- 109 -

As a result of this distribution, a goodwill of US$36.1 million (equivalent to S/105.8 million) was determined.

Non-controlling interest put and call options

In accordance with the shareholders’ agreement entered into for the purchase of Morelco SAS, GyM SA signed put and call option contract on 30% of the shares of Morelco held by the non-controlling shareholders. Through this contract, the non-controlling shareholders obtain a right to sell their shares within the term and amount established in the contract (put options). The period for exercising the option begins on completion of the second year of the purchase and expires in the tenth year. The exercise price is based on a multiple of EBITDA less net financial debt and until the months 51 and 63 from the date of the agreement, a minimum value is set based on the price per share that the Company paid to acquire 70% of Morelco shares.

The Company obtains the right to purchase the same shares for a period of 10 years and at a determined price similar to that of the aforementioned put options, except that the minimum value applies to the entire term of the option (call options).

Into IFRS framework, the put option represents an obligation for the Company to purchase shares of the non-controlling interest and, consequently, the Corporation recognizes a liability measured by the fair value of that option, as of December 31, 2020, the value of the liability amounts to S/118.6 million (as of December 31, 2019, it was S/106.4 million). Because the Corporation concluded that as a result of this contract, did not acquire the significant risks and rewards inherent to the stock option package, the initial recognition of this liability was charged to an equity account of the controlling stockholders, under the heading of other reserves (Note 21).

On April 30, 2019, an addenda No. 01 was signed to the shareholders Agreement, which modifies:

Section 7.3 sale option in favor of the Initial shareholder, for the following:

As of December 31, 2020 and for a term of six (6) months, the initial shareholder may exercise a selling option, only once, for a number of shares held by the Initial shareholder equivalent to sixty-six point sixty-seven percent (66.67%) of the shares held by the Initial shareholder at the time of exercising the Low sale option this sub-clause (sale option 1). As of December 31, 2022 and for a term of six (6) months, the Initial shareholder may at any time exercise a sale option, for one time only, for the totality and not less than the totality of the shares held by the Initial shareholder at the time of exercising the sale option under this subclause, notwithstanding the foregoing, if GyM S.A. does not fulfill its obligations subject to the option of sale 1 within the period indicated in paragraph b of this Section 7.3, the term established for the exercise of option 2 is accelerated and may be exercised by the Initial shareholder at any time after the day following expiration of said period by sending a Notification of the option of sale to GyM S.A., so that in such event GyM S.A. will only fulfill its obligations by purchasing one hundred (100%) of the shares held by the previous shareholder.

Section 7.3 (c) is replaced in its entirety by the following:

(c) The price per share in each sale option shall be equal to the base price per share plus an interest charge. The base price per share shall be the result of dividing 5,375 times the EBITDA of the twelve (12) months prior to the date of receipt of the Notification of the option of sale by GyM S.A. minus DFN, between (and) all of the shares at the date of receipt of the Notice of option of sale by GyM S.A.; however, the corresponding base price per share shall not be less than the price per share corresponding to the purchase price [as that term is defined in the share sale Contract). The base price per Minimum action established in this Section 7.3 (c) shall not apply: (a) in a sale option that is triggered by the GyM S.A. share provision to a third party, when the GyM S.A. Stock provision does not result in a sale of the Company, and (b) in an Opt sales ion activated before an Exempt Operation. On the base price per share, remuneration interest will be caused at an annual interest rate composed of two point seventy percent (2.70%) as of (i) February 14, 2018 for option 1; (ii) December 31, 2019 for sale option 2 and (iii) in both cases, up to the effective payment date of the purchase contract price concluded as a result of the exercise of each sale option.

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DIVIDENDS

In compliance with certain covenants, the company will not pay dividends for the years 2019 and 2020, except for transactions with non-controlling interests described in Note 35-c).

34	LOSS PER SHARE

The basic loss per common share has been calculated by dividing the loss of the year attributable to the Corporate’s common shareholders by the weighted average of the number of common shares outstanding during that year. No diluted loss per common share has been calculated because there is no potential diluent common or investment shares (ie, financial instruments or agreements that entitle to obtain common or investment shares); therefore, it is the same as the loss per basic share. The basic loss per common share is as follows:

		2019			2020

Loss attributable to owners of the Company
during the year			(884,721	)		(124,335	)
Weighted average number of shares in issue
at S/1.00 each, at December 31,			822,213,119			871,917,855

Basic loss per share (in S/)	(*)		(1.076	)		(0.143	)

(*) The Corporation does not have common shares with dilutive effects As of December 31, 2019 and 2020.

35	TRANSACTIONS WITH NON-CONTROLLING INTERESTS

a)	Acquisition of additional non-controlling interest

In May, November and December 2016, GyM Chile S.p.A. acquired 5.43%, 6.77%, and 1.49%, respectively of additional shares in Vial y Vives - DSD S.A. at a total purchase price of S/21.6 million, S/25.7 million and S/3.8 million, respectively. The carrying values of the non-controlling interest at the acquisition dates were S/13.9 million, S/17.9 million and S/3.9 million. The Corporation ceased to recognize the corresponding non-controlling interest, recording a decrease in equity attributable to the owners of the Company of S/15.4 million. As of December 31, 2019, the outstanding balance was S/22.7 million (S/23 million in 2018) (Note 21).

b)	Contributions (returns) from non-controlling shareholders

Corresponds to the contributions and returns made by the partners of the subsidiary Viva GyM S.A. for the realization of real estate projects. As of December 31, the balances include:

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	2019			2020
Viva GyM S.A.
Contributions received		152			18
Returns of contributions		(33,148	)		(15,743	)
Increase (decrease) in equity of non controlling parties		(32,996	)		(15,725	)

Dividends

As of December 31, 2019 and 2020, dividens were distributed to the non-controlling interest for S/12.8 million and S/82.4 million, respectively.

36	OPERATIONS OF SUBSIDIARY ADEXUS S.A. RECLASSIFIED AS CONTINUING OPERATIONS

As of December 31, 2020, the financial information of the subsidiary Adexus S.A. (hereinafter Adexus) was reclassified as continuous operation. The subsidiary that have been reclassified as a non-current assets held for sale As of December 31, 2018, has as main activity to provide information technology solutions mainly in Chile and Peru. Despite the fact that the Company has been committed to a pan to carry out the sale, the circumstances that arose in the subsidiary during this period, which are explained below, have forced us to change initial plan, focusing in negotiating with vendors liabilities terms sale resulting in a viable plan again.

On November 19, 2019, Adexus filed an application for reorganization under law 20720 with the Chilean courts of justice. The Company impaired the total investment value as of December 31, 2019.

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. In 2020, Adexus S.A. has complied with the payment schedule agreed with the creditors. On December 28, the creditor’s committee signed a debt reorganization agreement whith pledge creditors and unsecured creditors.

The Corporation decided that Adexus will be subject to the patrimonial protection law; after achieving this restructuring, the Corporation will focus on honoring it in the terms agreed while finding the right shareholder for the future development of the subsidiary.

37	EVENTS AFTER THE DATE OF THE STATEMENT OF FINANCIAL POSITION

1.	Issuance of Convertible Bonds

On January 13, 2021, the Board of Directors approved terms and conditions for the issuance of convertible bonds to be placed by private offering, including the registration and delivery dates, for the exercise of the preemptive subscription right, both in the first and second subscription round. The convertible bonds to be issued have not been and will not be registered under the U.S. Securities Act, or under the securities laws of any state or jurisdiction outside Peru.

Additionally, on the same date, a contract was signed with Kallpa Securities Sociedad Agencia de Bolsa SA, who will act as Representative of the Bondholders for the issuance of the convertible bonds.

The second preferential subscription round of the issuance of the Convertible Bonds in Shares of AENZA S.A.A., by the Company, ended on February 26, 2021. Together with the Subscription Agreements that were subscribed in the first preferential subscription round, in both rounds, Subscription Agreements have been subscribed for a total of 32,721 bonds, for a subscription value that amounts to the total amount of US$32.7 million.

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Finally, in accordance with the process established by the Board of Directors, the bonds that have not been subscribed after the end of the second preferential subscription round may be placed through a private offering directed to Institutional Investors.

2.	New State of emergency due to COVID

On February 10, 2021, the Peruvian Government extended the State of National Emergency for a period of 14 days as a result of COVID-19. Likewise, certain economic activities are restricted, according to the alert level in each department of Peru, until March 14, 2021. Management considers that the measures taken by the national authorities have no impact on the continuity and development of the operations of the Company because the activities carried out by the Company are within the group of permitted activities and have not been significantly impacted by the pandemic.

The Company's Management continues to monitor the evolution of the situation and the guidance of the national and international authorities, since events beyond the control of Management may arise that require modifying the established business plan. A further spread of Covid-19 and the consequent measures taken to limit the spread of the disease could affect the ability to conduct business in the normal way and, therefore, affect the financial position and results of operations.

Citizen immobilization, the restriction of activities of strategic companies as well as the paralysis of public entities have affected the execution of investment projects as well as the performance of exploration activities, and until the date of approval of the financial statements, it is not expected that operations and going concern will be affected.

3. Process of a plea bargain agreement

On January 22, 2021, the Ad Hoc General Attorney for the Lava Jato Case, granted an interview to the public media where, among other issues, she stated that she hoped to achieve in the first quarter of this year, an agreement on the amount to be paid as civil compensation by three companies that are currently in the process of a plea bargain agreement, and mentioned AENZA S.A.A. (formerly Graña y Montero S.A.A.) as one of the three corporations.

As indicated in Note 1.c), the Company recognized its provisions for civil damages based on the projects that have been reviewed with the Ad Hoc Attorney's Office, on the formulae included in Law 30737 and on the conditions under which a preliminary plea bargain agreement was signed effective on December 27, 2019; at present, it is only pending of resolution with the Attorney General's Office the discount factor in the formula the Company used to calculate the civil damages and to record the provision in the financial statements. The Company considers that it is applying the law in the use of this discount factor; however, if this would not be accepted, the provision for civil damages could increase of up to 30%.

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