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 January 2022

 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.



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.


AENZA S.A.A.

By: /s/ DANIEL URBINA PEREZ
Name: Daniel Urbina Perez
Title: Chief Legal Officer
Date: January 31, 2022











AENZA S.A.A. AND SUBSIDIARIES



CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31, 2020 AND DECEMBER 31, 2021 (UNAUDITED)




AENZA S.A.A. AND SUBSIDIARIES


CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
AT DECEMBER 31, 2020  AND DECEMBER 31, 2021 (UNAUDITED)



CONTENTS
Page
   
   
   
Consolidated Statement of Financial Position
1
   
Consolidated Statement of Income
2
   
Consolidated Statement of Comprehensive Income
3
   
Consolidated Statement of Changes in Equity
4
   
Consolidated Statement of Cash Flows
5
   
Notes to the Consolidated Financial Statements
6 - 39



S/
=
Peruvian Sol
US$
= United States dollar



AENZA S.A.A. AND SUBSIDIARIES
                           
                             
                             
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
                     
(All amounts are expressed in thousands of S/ unless otherwise stated)
               
                             
                             
ASSETS
             
LIABILITIES AND EQUITY
           
       
As of December 31,
         
As of December 31,
   
Note
 
2020
 
2021
     
Note
 
2020
 
2021
                             
Current assets
             
Current liabilities
           
Cash and cash equivalents
 
8
 
              900,168
 
              957,178
 
Borrowings
 
15
 
              452,884
 
              241,340
Trade accounts receivables, net
 
9
 
              703,167
 
              590,280
 
Bonds
 
16
 
                58,446
 
                69,838
Work in progress
 
10
 
              186,433
 
              316,191
 
Trade accounts payable
 
17
 
           1,097,167
 
              967,069
Accounts receivable from related parties
 
11
 
                27,338
 
                20,817
 
Accounts payable to related parties
 
11
 
                43,818
 
                51,004
Other accounts receivable
 
12
 
              433,531
 
              487,058
 
Current income tax
     
                34,494
 
                95,249
Inventories, net
     
              552,000
 
              488,326
 
Other accounts payable
 
18
 
              718,406
 
              753,864
Prepaid expenses
     
                22,972
 
                32,142
 
Other provisions
 
19
 
                92,757
 
              148,921
Total current assets
     
           2,825,609
 
           2,891,992
 
Total current liabilities
     
           2,497,972
 
           2,327,285
                             
Non-current assets
             
Non-current liabilities
           
Trade accounts receivable, net
 
9
 
              730,666
 
              683,306
 
Borrowings
 
15
 
              445,436
 
              338,560
Accounts receivable from related parties
 
11
 
              620,071
 
              643,897
 
Bonds
 
16
 
              874,313
 
           1,191,084
Prepaid expenses
     
                22,264
 
                23,607
 
Trade accounts payable
 
17
 
                40,502
 
                       -
Other accounts receivable
 
12
 
              328,223
 
              201,360
 
Other accounts payable
 
18
 
              183,232
 
                92,369
Investments in associates and joint ventures
 
13
 
                35,516
 
                31,393
 
Accounts payable to related parties
 
11
 
                36,297
 
                50,712
Investment property
     
                26,073
 
                64,974
 
Other provisions
 
19
 
              336,609
 
              329,497
Property, plant and equipment, net
 
14
 
              405,469
 
              301,207
 
Deferred income tax liability
     
              102,907
 
                97,365
Intangible assets, net
 
14
 
              791,990
 
              743,391
 
Total non-current liabilities
     
           2,019,296
 
           2,099,587
Right-of-use assets, net
 
14
 
                64,518
 
                47,717
 
Total liabilities
     
           4,517,268
 
           4,426,872
Deferred income tax asset
     
              262,165
 
              268,962
               
Total non-current assets
     
           3,286,955
 
           3,009,814
 
Equity
 
20
       
               
Capital
     
              871,918
 
              871,918
               
Legal reserve
     
              132,011
 
              132,011
               
Voluntary reserve
     
                29,974
 
                29,974
               
Share Premium
     
           1,131,574
 
           1,131,574
               
Other reserves
     
(169,234)
 
(135,947)
               
Retained earnings
     
(728,637)
 
(808,354)
               
Equity attributable to controlling interest in the Company
           1,267,606
 
           1,221,176
               
Non-controlling interest
     
              327,690
 
              253,758
               
Total equity
     
           1,595,296
 
           1,474,934
Total assets
     
           6,112,564
 
           5,901,806
 
Total liabilities and equity
     
           6,112,564
 
           5,901,806
                             
                             
The accompanying notes on pages 6 to 39 are an integral part of the consolidated financial statements.
           






- 1 -


AENZA S.A.A. AND SUBSIDIARIES
                 
                   
                   
CONSOLIDATED STATEMENT OF INCOME
                 
(All amounts are expressed in thousands of S/ unless otherwise stated)
             
                   
           For the period  
         
ended December 31,
 
   
Note
   
2020
   
2021
 
         
(as restated)
       
                   
Revenues from construction activities
         
1,815,671
     
2,272,561
 
Revenues from services provided
         
936,485
     
1,095,506
 
Revenue from real estate and sale of goods
         
394,249
     
579,482
 
           
3,146,405
     
3,947,549
 
                       
Cost of construction activities
         
(1,716,309
)
   
(2,157,822
)
Cost of services provided
         
(811,505
)
   
(918,263
)
Cost of real estate and sale of goods
         
(308,339
)
   
(454,484
)
   
21
     
(2,836,153
)
   
(3,530,569
)
Gross profit
         
310,252
     
416,980
 
                       
Administrative expenses
 
21
     
(134,013
)
   
(180,230
)
Other income and expenses
 
22
     
(181,182
)
   
1,306
 
Operating (loss) profit
         
(4,943
)
   
238,056
 
                       
Financial expenses
 
23
     
(146,355
)
   
(262,061
)
Financial income
 
23
     
39,316
     
5,773
 
Share of the profit or loss of associates and joint ventures accounted for using the equity method
 
13
     
770
     
(641
)
Loss before income tax
         
(111,212
)
   
(18,873
)
Income tax expense
         
(62,208
)
   
(49,774
)
Loss from continuing operations
         
(173,420
)
   
(68,647
)
                       
Loss from discontinued operations
         
(16,924
)
   
(26,774
)
Loss for the period
         
(190,344
)
   
(95,421
)
                       
(Loss) profit attributable to:
                     
Owners of the Company
         
(217,871
)
   
(131,850
)
Non-controlling interest
         
27,527
     
36,429
 
           
(190,344
)
   
(95,421
)
                       
                       
Loss per share attributable to owners of the Company during the period
 
27
     
(0.250
)
   
(0.151
)
Loss per share from continuing operations attributable to owners of the Company during the period
 
27
     
(0.230
)
   
(0.121
)
                       
                       
The accompanying notes on pages 6 to 39 are an integral part of the consolidated financial statements.
 

- 2 -


AENZA S.A.A. AND SUBSIDIARIES
                 
                   
                   
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
                 
(All amounts are expressed in thousands of S/ unless otherwise stated)
                 
                   
         
For the period
 
         
ended December 31,
 
   
Note
   
2020
   
2021
 
                   
                   
Loss for the period
         
(190,344
)
   
(95,421
)
Other comprehensive income:
                     
Items that may be subsequently  reclassified to profit or loss
                     
Cash flow hedge, net of tax
   
     
(626
)
   
-
 
Foreign currency translation adjustment, net of tax
           
8,304
     
(5,987
)
Exchange difference from net investment in a foreign operation, net of tax
           
708
     
(428
)
Other comprehensive income for the period, net of tax
           
8,386
     
(6,415
)
Total comprehensive income for the period
           
(181,958
)
   
(101,836
)
                         
Comprehensive income attributable to:
                       
Owners of  the Company
           
(209,599
)
   
(138,232
)
Non-controlling interest
           
27,641
     
36,396
 
             
(181,958
)
   
(101,836
)
                         
Comprehensive income for the period attributable to owners of the Company:
                       
Continuing operations
           
(192,020
)
   
(111,458
)
Discontinued operations
           
(17,579
)
   
(26,774
)
             
(209,599
)
   
(138,232
)
                         
                         
The accompanying notes on pages 6 to 39 are an integral part of the consolidated financial statements.
 

- 3 -


AENZA S.A.A. AND SUBSIDIARIES
                                                           
                                                             
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
                                           
FOR THE PERIOD ENDED DECEMBER 31, 2020 AND 2021
                                           
(All amounts are expressed in thousands of S/ unless otherwise stated)
                                           
   
Attributable to the controlling interests of the Company
             
   
Number
                                               Non-        
   
of shares
         
Legal
   
Voluntary
   
Share
   
Other
   
Retained
         
controlling
       
   
In thousands
   
Capital
   
reserve
   
reserve
   
premium
   
reserves
   
earnings
   
Total
   
interest
   
Total
 
                                                             
                                                             
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 period
   
-
     
-
     
-
     
-
     
-
     
-
     
(217,871
)
   
(217,871
)
   
27,527
     
(190,344
)
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 period
   
-
     
-
     
-
     
-
     
-
     
8,272
     
(217,871
)
   
(209,599
)
   
27,641
     
(181,958
)
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
)
   
(728,637
)
   
1,267,606
     
327,690
     
1,595,296
 
                                                                                 
Balances as of January 1, 2021
   
871,918
     
871,918
     
132,011
     
29,974
     
1,131,574
     
(169,234
)
   
(728,637
)
   
1,267,606
     
327,690
     
1,595,296
 
(Loss) profit for the period
   
-
     
-
     
-
     
-
     
-
     
-
     
(131,850
)
   
(131,850
)
   
36,429
     
(95,421
)
Foreign currency translation adjustment
   
-
     
-
     
-
     
-
     
-
     
(5,957
)
   
-
     
(5,957
)
   
(30
)
   
(5,987
)
Exchange difference from net investment in a foreign operation
   
-
     
-
     
-
     
-
     
-
     
(425
)
   
-
     
(425
)
   
(3
)
   
(428
)
Comprehensive income of the period
   
-
     
-
     
-
     
-
     
-
     
(6,382
)
   
(131,850
)
   
(138,232
)
   
36,396
     
(101,836
)
Transactions with shareholders:
                                                                               
- Dividend distribution
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
(42,974
)
   
(42,974
)
- Contributions (devolution) of non-controlling shareholders, net
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
(27,104
)
   
(27,104
)
- Additional acquisition of non-controlling
   
-
     
-
     
-
     
-
     
-
     
39,669
     
-
     
39,669
     
(39,669
)
   
-
 
- Deconsolidation Adexus S.A.
   
-
     
-
     
-
     
-
     
-
     
-
     
52,133
     
52,133
     
-
     
52,133
 
- Dilution of non-controlling shareholders
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
(581
)
   
(581
)
Total transactions with shareholders
   
-
     
-
     
-
     
-
     
-
     
39,669
     
52,133
     
91,802
     
(110,328
)
   
(18,526
)
Balances as of December 31, 2021
   
871,918
     
871,918
     
132,011
     
29,974
     
1,131,574
     
(135,947
)
   
(808,354
)
   
1,221,176
     
253,758
     
1,474,934
 
                                                                                 
                                                                                 
The accompanying notes on pages 6 to 39 are an integral part of the consolidated financial statements.
                                                         

- 4 -


AENZA S.A.A. AND SUBSIDIARIES
                 
 
                 
 
                 
CONSOLIDATED STATEMENT OF CASH FLOWS
                 
(All amounts are expressed in thousands of S/ unless otherwise stated)
                 
 
                 
 
       
For the period
 
 
       
ended December 31,
 
 
 
Note
   
2020
   
2021
 
 
                 
OPERATING ACTIVITIES
                 
Loss before income tax
         
(131,900
)
   
(50,609
)
Adjustments to  profit not affecting cash flows from operating activities:
                     
Depreciation
 
14 a)

   
98,504
     
98,795
 
Amortization
 
14 b)

   
98,621
     
107,386
 
Impairment of inventories
         
791
     
2,984
 
Impairment of accounts receivable and other accounts receivable
         
134,964
     
29,389
 
Reversal of impairment of inventories
         
(821
)
   
-
 
Debt condonation
         
(9,451
)
   
-
 
Change in the fair value of the liability for put option
         
245
     
-
 
Other provisions
         
126,896
     
56,338
 
Renegotiation of liability for acquisition of non-controlling Morelco
         
-
     
(70,322
)
Financial expense,net
         
225,212
     
221,940
 
Impairment of investment
         
38
     
-
 
Incremental cost accrued
         
8,875
     
-
 
Share of the profit and loss of associates and joint ventures accounted for using the equity method
 
13
     
(770
)
   
641
 
Reversal of provisions
         
(33,264
)
   
(13,027
)
Disposal of assets
         
8,895
     
13,941
 
Profit on sale of property, plant and equipment
         
(2,322
)
   
(3,937
)
(Profit) loss on remeasurement of accounts receivable
         
(25,888
)
   
106,613
 
Net variations in assets and liabilities:
                     
Trade accounts receivable and working in progress
         
131,674
     
(32,629
)
Other accounts receivable
         
(46,117
)
   
25,585
 
Other accounts receivable from related parties
         
(20,641
)
   
(57,258
)
Inventories
         
22,578
     
59,201
 
Pre-paid expenses and other assets
         
(823
)
   
(11,681
)
Trade accounts payable
         
(42,062
)
   
(102,037
)
Other accounts payable
         
(58,011
)
   
61,022
 
Other accounts payable to related parties
         
3,591
     
7,703
 
Other provisions
         
(9,051
)
   
(27,964
)
Interest payment
         
(137,369
)
   
(146,369
)
Payments for purchases of intangibles - Concessions
         
(3,519
)
   
(5,157
)
Payment of income tax
         
(112,851
)
   
(83,539
)
Net cash provided by operating activities
         
226,024
     
187,009
 
 
                     
INVESTING ACTIVITIES
                     
Sale of property, plant and equipment
         
9,118
     
9,621
 
Interest received
         
4,292
     
2,474
 
Dividends received
         
2,318
     
3,445
 
Payment for purchase of investments properties
         
(98
)
   
(152
)
Payments for intangible purchase
         
(46,767
)
   
(53,808
)
Payments for property, plant and equipment purchase
         
(33,596
)
   
(42,270
)
Net cash applied to investing activities
         
(64,733
)
   
(80,690
)
 
                     
FINANCING ACTIVITIES
                     
Loans received
         
185,644
     
281,079
 
Bonds issued
         
-
     
357,424
 
Amortization of loans received
         
(275,163
)
   
(548,360
)
Amortization of bonds issued
         
(37,981
)
   
(48,858
)
Payment for transaction costs for debt
         
-
     
(5,681
)
Dividends paid to non-controlling interest
         
(82,412
)
   
(25,693
)
Cash received (return of contributions) from non-controlling shareholders
         
(15,725
)
   
(27,104
)
Acquisition or sale of interest in a subsidiary of non-controlling shareholders
         
-
     
(33,232
)
Net cash applied to financing activities
         
(225,637
)
   
(50,425
)
(Net decrease) net increase in cash
         
(64,346
)
   
55,894
 
Exchange difference
         
13,813
     
1,116
 
Cash and cash equivalents at the beginning of the period
         
950,701
     
900,168
 
Cash and cash equivalents at the end of the period
 
8
     
900,168
     
957,178
 
 
                     
NON-CASH TRANSACTIONS:
                     
Capitalization of interests
         
5,129
     
1,244
 
Acquisition of assets through finance leases
         
55
     
104
 
Dividends declared to non-controlling interest
         
9,631
     
17,281
 
Acquisition of right-of-use assets
         
9,673
     
7,988
 
Acquisition of supplier bonds
         
25,871
     
-
 
 
                     
The accompanying notes on pages 6 to 39 are an integral part of the consolidated financial statements.
         

- 5 -


AENZA S.A.A. AND SUBSIDIARIES

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS AT DECEMBER 31, 2020 AND DECEMBER 31, 2021 (UNAUDITED)

1.   GENERAL INFORMATION

a) Incorporation and operations

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

The General Shareholder’s Meeting on November 2, 2020 approved the modification of the Company’s corporate 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 with operations including different business activities, the most significant are engineering and construction, infrastructure (public concession ownership and operation) and real estate businesses. See details of operating segments in Note 7.

b) Authorization for the issue of the financial statements

The condensed interim consolidated financial statements for the period ended December 31, 2021 were authorized by Management and Board of Directors on January 31, 2022.

The consolidated financial statements for the year ended December 31, 2020, were prepared and issued with authorization of Management and the Board of Directors on March 5, 2021, and were approved on the General Shareholders’ Meeting held on March 31, 2021.

Since the date the financial statements were submitted to our shareholders for their approval, until the date of presentation to the Securities and Exchange Commission of the financial information attached to the annual report 20F, subsequent events with material impact on our results occurred and as a result, and in compliance with International Financial Reporting Standards (IFRS), we have recorded such impacts herein, this was revealed through a relevant information communication on May 17, 2021. The events referred to previously, are related mainly to the considerable progress in the negotiations of the Company’s plea bargain agreement, which allowed us to reassess our estimate of our exposure to the contingencies including within its scope. As a result, the amounts included in our financial statements were restructured.

After the filing of the Form 20-F, the Company signed an “Acta de Acuerdo Preparatorio de Colaboracion y Beneficios” (the “Agreement”), with the “Procuraduria Publica ad Hoc”. who dedicate themselves exclusively to the knowledge of investigations related to Crimes of Corruption of Officials and related incurred by the company Odebrecht and others (the “Prosecutor's Office” and with the ad hoc Public Prosecutor's Office for investigations and processes related to crimes of corruption of officials, money laundering and related assets incurred by the company Odebrecht and others (the "Office of the Attorney General"). Pursuant to the Agreement, the Company assumed an obligation to pay a civil penalty, which is within the estimates included in such financial information. The effects of the Effective Collaboration Agreement will enter into force as of their judicial approval.

The consolidated restructured financial statements for the year ended December 31, 2020 have been prepared and issued with authorization of Management and the Board of Directors on June 9, 2021 to ensure consistency between the information presented to the markets in which the Company’s securities are traded, and were approved on the General Mandatory Shareholder’s Meeting held on July 6, 2021.

- 6 -


c) Acta de Acuerdo Preparatorio de Colaboración y Beneficios – “The Agreement”

Pursuant to the Agreement executed on May 21, 2021, AENZA S.A.A. accepts it was utilized by certain former executives to commit illicit acts until 2016, and commits to pay a civil penalty to the Peruvian State of S/321.9 million and US$41.1 million.  The civil penalty is subject to (i) a repayment tenor of 12 years, (ii) the legal interest rate in domestic and foreign currency, (iii) a total collateral of S/197 million through a trust that includes shares issued by a subsidiary of AENZA, a mortgage on a real estate asset and debt service guaranty account. Among other conditions, the Agreement includes a restriction to participate in public construction and road maintenance contracts for 2 years.  As of December 31, 2021, we registered the present value of the amounts described before, which amount to S/164.6 million and US$18.9 million (totaling S/240.1 million).

The civil penalty covers the total contingency to which the Company was exposed because of the investigations revealed in the notes to the financial statements since 2017.  Nevertheless, the Agreement enforceability is subject to court approval and its terms and conditions are subject to confidentiality provisions in such agreement.

d) Changes in Shareholders and Board of Directors

On June 15, 2021, the Company was informed that IG4 Capital Infrastructure Investments LP (“IG4”) announced an “Oferta Publica de Adquisición” (“OPA”), or tender offer, for a total of 107,198,601 common shares with voting rights equivalent to 12.29% of the total stock issued by AENZA S.A.A.  Furthermore, the Company was informed by other shareholders representing collectively 12.72% of the common shares that 8.82% executed a vote sindication agreement with IG4 and that 3.9% transferred their shares to a trust in which IG4 holds the decision on voting rights (“derechos politicos”).

On August 10, 2021, the Company was informed that IG4 purchased a significant shareholding participation in AENZA S.A.A., amounting to 25.13% of the company’s capital stock, from which 12.29% was purchased within the OPA and 12.84% was purchased through the “Transaction Documents”, as such documents were denominated in the Offering Information Prospectus updated on July 12, 2021.  Furthermore, on August 12, 2021, certain shareholders of AENZA S.A.A. executed an Amendment to the Contrato de Fideicomiso with IG4 as “fideicomisario” and La Fiduciaria S.A. as “Fiduciaria”, in which, among other aspects, IG4 purchased the voting rights of AENZA’s common shares representing approximately 8.74% of the company’s capital stock, subject to a tenor of 8 years, which could be automatically renewed for an additional period of 8 years.

On August 26, 2021, the Company’s Board of Directors agreed to appoint Mr. André Mastrobuono as new Chief Executive Officer, effective on October 1, 2021. Mr. Luis Díaz Olivero would execute its duties as CEO until such date.

On September 20, 2021, a General Shareholders Meeting was held, in which a renewed Board of Directors was elected for the 2021-2024 period. On the same day, in a Board Meeting, Mr. Juan Vicente Revilla Vergara was appointed as Chairman of the Board and Mr. Gustavo Nickel Buffara de Freitas was appointed as Vice Chairman.  In addition, the Board approved the following changes in the Board Committees:

1. Change of denomination of the Strategy and Investments Committee to the Finance, Risks and Investments Committee;
2. Merge the Audit Committee and the Risks and Compliance Committee into a new Audit and Compliance Committee, and transfer the supervision of risks to the Finance, Risks and Investments Committee;
3. Create the Environmental, Social and Governance (ESG) Committee;
4. Designate the members of the Board Committees:
(a) Audit and Compliance Committee: Carlos Rojas Perla (Chairman), Santiago Hernando Pérez y Antonio Carlos Valente Da Silva.
(b) Environmental, Social and Governance (ESG) Committee: Gema Esteban Garrido (Chairman), Antonio Carlos Valente Da Silva y Esteban Viton Ramírez.

- 7 -


(c) Talent Committee: Juan Vicente Revilla Vergara (Chairman), Gustavo Nickel Buffara de Freitas, Santiago Hernando Pérez y Esteban Viton Ramirez.
(d) Finance, Risks and Investments Committee: Pablo Ignacio Kühlenthal Becker (Chairman), Nicolás Bañados Lyon, Carlos Rojas Perla y Gustavo Nickel Buffara de Freitas

e) New State of emergency due to COVID

On December 23, 2021, the Peruvian Government extended the State of National Emergency for a period of 30 days as a result of COVID-19. Likewise, certain economic activities are restricted, according to the alert level in each department of Peru, until January 31, 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. 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, however, until the date of approval of the financial statements, it is not expected that operations and going concern will be affected.

2. BASIS OF PREPARATION

The condensed interim consolidated financial statements for the period ended December 31, 2021 have been prepared in accordance with IAS 34 "Interim Financial Reporting". The condensed interim consolidated financial statements provide comparative information regarding prior periods; however, they do not include all the information and disclosures required in the annual consolidated financial statements, so they must be read together with the audited consolidated financial statements for the year ended December 31, 2020, which have been prepared in accordance with International Standards. of Financial Information (hereinafter "IFRS").

The condensed interim consolidated financial statements are presented in thousands of Peruvian Soles, unless otherwise stated.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accounting policies used in the preparation of these condensed interim consolidated financial statements are consistent with those applied in the preparation of the consolidated financial statements at December 31, 2020.

3.1. Standards, amendments, and interpretation adopted by the Group

Standards, amendments and interpretation that have entered in force as of January 1, 2021, have not had impact on the condensed interim consolidated financial statements as of December 31, 2021, and fo this reason thay have not been disclosed.  The Group has not adopted in advance any amendment and modification that are not yet effective

4. FINANCIAL RISK MANAGEMENT

Financial risk management is carried out by the Corporation’s Management. Management oversees the general management of risks in specific areas, such as foreign exchange rate risk, price risk, cash flow and fair value interest rate risk, credit risk, the use of derivative and non-derivative financial instruments and the investment of excess liquidity, which are supervised and monitored periodically.

- 8 -


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.

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, 2020 and 2021, this exposure is mainly concentrated in fluctuations of U.S. dollar, the Chilean and Colombian Pesos.

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:

   
At
   
At
 
   
December 31,
   
December 31,
 
   
2020
   
2021
 
             
Soles (a)
   
3.624
     
3.998
 
Chilean Pesos (b)
   
711.24
     
844.69
 
Colombian Pesos (c)
   
3,432.50
     
3,981.16
 

(a) Soles published by the Superintendency of Banking, Insurance and Pension Fund Administrators (SBS).
(b) Chilean pesos published by the Banco Central de  Chile.
(c) Colombian pesos published by Banco de la Republica de Colombia.

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

   
2020
   
2021
 
   
USD(000)
   
USD(000)
 
             
Assets
   
586,479
     
360,834
 
Liabilities
   
321,599
     
431,556
 

For the periods ended December 31, 2020 and 2021, the Corporation’s exchange gains and losses for the Peruvian Sol, the Chilean and Colombian Pesos exposure against the U.S. dollar was:

   
2020
   
2021
 
             
Gain
   
426,164
     
383,199
 
Loss
   
(429,930
)
   
(430,410
)

- 9 -


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.

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 of Directors.

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 Corporation cash flows enabled it to meet its obligations. Under COVID-19 pandemic (Note 1-e), the Corporation 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 Corporation’s Corporate Finance Office monitors rolling forecasts of the Corporation’s liquidity requirements to ensure it exists sufficient cash to meet operational needs so that the Corporation 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 ratio targets in the statement of financial position 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.

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

- 10 -


   
Less than
     
1-2
     
2-5
   
More than
       
As of 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)
   
356,101
     
62,943
     
230,352
     
322,123
     
971,519
 
     
2,012,798
     
538,300
     
854,754
     
1,338,101
     
4,743,953
 
                                         
                                         
                                         
   
Less than
     
1-2
     
2-5
   
More than
         
As of December 31, 2021
 
1 year
   
years
   
years
   
5 years
   
Total
 
                                         
Other financial liabilities (except
                                       
for finance leases and lease
                                       
liability for right-of-use asset)
   
224,503
     
52,751
     
173,392
     
124,320
     
574,966
 
Finance leases
   
5,624
     
4,613
     
296
     
-
     
10,533
 
Lease liability for right-of-use asset
   
18,817
     
24,295
     
21,993
     
8,086
     
73,191
 
Bonds
   
137,852
     
206,476
     
837,931
     
792,037
     
1,974,296
 
Trade accounts payables (except
                                       
non-financial liabilities)
   
912,826
     
-
     
-
     
-
     
912,826
 
Accounts payables to related parties
   
51,004
     
50,712
     
-
     
-
     
101,716
 
Other accounts payables (except
                                       
non-financial liabilities)
   
349,459
     
22,941
     
109,383
     
422,666
     
904,449
 
     
1,700,085
     
361,788
     
1,142,995
     
1,347,109
     
4,551,977
 

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 the renegotiation of liabilities (Note 15). In extraordinary events as explained in Note 1, the Corporation identifies the possible 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, 2020 and 2021, the gearing ratio is presented below indicating the Corporation’s strategy to keep it in a range from 0.08 to 0.70.

- 11 -


   
2020
   
2021
 
Total financial liabilities and bonds (Note 15 and Note 16)
   
1,831,079
     
1,840,822
 
Less: Cash and cash equivalents (Note 8)
   
(900,168
)
   
(957,178
)
Net debt
   
930,911
     
883,644
 
Total equity
   
1,595,296
     
1,474,934
 
Total capital
   
2,526,207
     
2,358,578
 
                 
Gearing ratio
   
0.37
     
0.37
 

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 liabilities measured at fair value:

   
Level 3
 
As of December 31, 2020
     
       
Financial liabilities
     
Other financial entities (Note 15-b)
   
152,523
 
         
As of December 31, 2021
       
         
Financial liabilities
       
Other financial entities (Note 15-b)
   
165,878
 

5. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

Estimates and judgments used are continuously evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

In preparing these condensed interim consolidated financial statements, the significant judgements made by management in applying the Corporation’s accounting policies and the key sources of uncertainty were the same as those that applied to the consolidated financial statements for the year ended  December 31, 2020.

- 12 -


6. SEASONALITY OF OPERATIONS

The Corporation does not present seasonality in the operations of any of its subsidiaries; however, economic activities temporarily restricted due to COVID-19 pandemic and government measures implemented to contain the spread of the virus. As a result,  this situation affected negatively Corporation's revenues and financial position (Note 1.e).

7. OPERATING SEGMENTS

Operating segments are reported consistently with the internal reports that are reviewed by the Corporation’ chief decision-maker; that is, the Executive Committee, which is led by the Chief Executive Officer. This Committee acts as the highest authority in making operational decisions, responsible for allocating resources and evaluating the performance of each operating segment.

The Corporation's operating segments are assessed by the activities of the following business units: (i) engineering and construction, (ii) energy, (iii) infrastructure, and (ivi) real estate.

As set forth under IFRS 8, reportable segments by significance of income are: ‘engineering and construction’ and ‘infraestructure’. However, the Corporation has voluntarily decided to report on all its operating segments.

Inter-segmental sales transactions are entered into at prices that are similar to those that would have been agreed to with unrelated third parties. Revenues from external customers reported are measured in a manner consistent with the basis of preparation of the financial statements. Sales of goods are related to Real Estate segment. Revenues from services are related to other segments.

Corporation sales and receivables are not concentrated on a few customers. There is no external customer that represents 10% or more of the Goup’s revenue.

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

- 13 -


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
     
102,103
     
(218,159
)
   
27,338
 
Other accounts receivable
   
323,084
     
27,900
     
23,631
     
13,220
     
197
     
10,446
     
35,051
     
2
     
433,531
 
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
     
213,387
     
367,610
     
8,316
     
541,703
     
258,531
     
(219,884
)
   
2,825,609
 
                                                                         
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
     
1,322,865
     
(1,411,394
)
   
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
     
53,536
     
5,123
     
262,165
 
Total non-current assets
   
1,109,599
     
511,053
     
440,074
     
635,836
     
20,110
     
120,223
     
2,207,747
     
(1,757,687
)
   
3,286,955
 
Total assets
   
2,601,851
     
674,747
     
653,461
     
1,003,446
     
28,426
     
661,926
     
2,466,278
     
(1,977,571
)
   
6,112,564
 
                                                                         
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
     
17,738
     
21,531
     
-
     
19,074
     
15,708
     
(216,420
)
   
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
   
8,876
     
18,943
     
1,659
     
-
     
-
     
492
     
62,787
     
-
     
92,757
 
Total current liabilities
   
1,843,158
     
118,057
     
143,477
     
85,616
     
993
     
249,816
     
279,652
     
(222,797
)
   
2,497,972
 
                                                                         
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
     
2,762
     
23,357
     
4,654
     
-
     
183,232
 
Long-term accounts payable to related parties
   
104,432
     
-
     
836
     
36,297
     
24,207
     
-
     
186,886
     
(316,361
)
   
36,297
 
Provisions
   
122,503
     
37,599
     
26,034
     
1,925
     
-
     
-
     
148,548
     
-
     
336,609
 
Deferred income tax liability
   
25,576
     
36,793
     
1,518
     
39,020
     
-
     
-
     
-
     
-
     
102,907
 
Total non-current liabilities
   
441,300
     
177,546
     
290,331
     
680,905
     
26,969
     
34,378
     
709,343
     
(341,476
)
   
2,019,296
 
Total liabilities
   
2,284,458
     
295,603
     
433,808
     
766,521
     
27,962
     
284,194
     
988,995
     
(564,273
)
   
4,517,268
 
Equity attributable to controlling interest in the Company
   
261,501
     
354,982
     
161,710
     
177,694
     
464
     
138,933
     
1,474,398
     
(1,302,076
)
   
1,267,606
 
Non-controlling interest
   
55,892
     
24,162
     
57,943
     
59,231
     
-
     
238,799
     
2,885
     
(111,222
)
   
327,690
 
Total liabilities and equity
   
2,601,851
     
674,747
     
653,461
     
1,003,446
     
28,426
     
661,926
     
2,466,278
     
(1,977,571
)
   
6,112,564
 

- 14 -


Operating segments financial position
                                     
Segment reporting
                                     
         
Infrastructure
                         
As of December 31, 2021
 
Engineering and construction
   
Energy
   
Toll roads
   
Transportation
   
Water
treatment
   
Real estate
   
Parent
Company
operations
   
Eliminations
   
Consolidated
 
                                                       
Assets.-
                                                     
Cash and cash equivalent
   
303,925
     
121,873
     
114,100
     
182,607
     
7,499
     
109,828
     
117,346
     
-
     
957,178
 
Trade accounts receivables, net
   
366,299
     
67,662
     
38,418
     
106,856
     
1,003
     
9,958
     
84
     
-
     
590,280
 
Work in progress, net
   
316,191
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
316,191
 
Accounts receivable from related parties
   
96,073