GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES Consolidated

Transcription

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES
Consolidated Financial Statements
As of December 31, 2008 and 2007
(
Wi
t
ht
heI
nde
pe
nde
ntAudi
t
o
r
’
sRe
por
tThe
r
e
o
n)
(FREE TRANSLATION FROM SPANISH.
THE ACCOUNTING PRINCIPLES REFERRED TO
ARE THOSE GENERALLY ACCEPTED IN PERU)
(FREE TRANSLATION FROM SPANISH. THE ACCOUNTING PRINCIPLES REFERRED TO ARE THOSE GENERALLY ACCEPTED IN PERU)
Consolidated Balance Sheet
As of December 31, 2008 and 2007
(Stated in thousands of nuevos soles)
Assets
Current assets:
Cash and banks and restricted funds (note 4)
Accounts receivable:
Trade (note 5)
Related parties (note 6)
Consortiums (note 7)
Other accounts receivable (note 8)
Inventories, net (note 9)
Prepaid taxes and expenses (note 10)
Available-for-sale non-financial assets
Total current assets
2008
2007
143,628
------------
141,946
------------
377,480
1,576
8,485
80,168
-----------467,709
-----------158,623
54,747
1,997
-----------826,704
233,564
641
1,921
81,256
-----------317,382
-----------79,257
44,386
2,207
-----------585,178
Li
a
bi
l
i
t
i
e
sa
ndSt
oc
k
ho
l
de
r
s
’Eq
ui
t
y
Current liabilities:
Bank loans (note 16)
Trade accounts payable
Related parties (note 6)
Consortiums (note 7)
Other accounts payable (note 17)
Commercial papers (note 18)
Current portion of long-term debt
(note 19)
Total current liabilities
Long-term debt (note 19)
Deferred income tax (note 23.e)
Deferred income
Long-term accounts receivable (note 11)
16,862
23,437
6,641
2,314
Investments (note 12)
126,496
111,980
Property, plant, and equipment (note 13)
433,729
318,673
Goodwill (note 14)
31,551
34,458
Other assets, net (note 15)
99,125
71,975
------------
------------
Deferred income tax (note 23.e)
Total liabilities
St
oc
k
hol
de
r
s
’e
qui
t
y
:
Capital stock (note 20)
Legal reserve (note 21)
Other reserves (note 21)
Retained earnings
Minority interest
Tot
a
ls
t
oc
k
hol
de
r
s
’e
q
ui
t
y
2008
2007
108,359
184,361
1,465
20,008
212,623
41,979
21,476
185,669
5,666
5,597
135,767
-
90,123
-----------658,918
66,052
-----------420,227
236,970
218,469
30,471
22,569
4,181
-----------930,540
------------
5,539
-----------666,804
------------
389,798
26,503
3,262
146,625
44,380
-----------610,568
299,423
13,514
4,388
130,012
33,874
-----------481,211
------------
------------
1,541,108
=======
1,148,015
=======
Commitments and contingencies (note 24)
Total assets
1,541,108
=======
See the accompanying notes to the consolidated financial statements.
1,148,015
=======
Total liabilities ands
t
oc
k
h
ol
de
r
s
’
equity
(FREE TRANSLATION FROM SPANISH. THE ACCOUNTING PRINCIPLES REFERRED TO
Consolidated Income Statement
For the years ended December 31, 2008 and 2007
Valuation of works (note 25)
Income from services rendered
Sale of merchandise and other
Total revenue
Cost of works (note 25)
Cost of rendered services
Cost of sales of merchandise and property
Total cost
2008
2007
1,339,842
446,402
41,466
-------------1,827,710
--------------
1,019,200
384,726
36,048
------------1,439,974
-------------
( 1,130,416)
( 264,458)
(
33,346)
-------------( 1,428,220)
--------------
( 865,549)
( 245,514)
(
29,884)
------------( 1,140,947)
-------------
Gross profit
Operating, administrative and general expenses (note 26)
Operating profit
Other (expenses) income:
Financial, net (note 27)
Results attributable to associates
Various, net
Exchange difference, net
Pr
of
i
tbe
f
or
ewor
k
e
r
s
’pr
of
i
ts
h
a
r
i
ng
and income tax
Wor
k
e
r
s
’pr
of
i
ts
h
a
r
i
ng(
n
ot
e22)
Income tax (note 23)
Profit before minority interest
Minority interest
Net profit for the year
Earnings per basic share in S/. (note 28)
399,490
299,027
( 104,554)
-------------294,936
--------------
(
79,014)
------------220,013
-------------
(
(
30,155)
3,704
8,643
(
44,143)
-------------(
61,951)
-------------232,985
(
12,958)
(
65,994)
-------------154,033
(
6,844)
-------------147,189
========
0.263
========
22,744)
4,029
(
2,526)
8,426
------------(
12,815)
------------207,198
(
9,721)
(
59,159)
------------138,318
(
8,418)
------------129,900
========
0.303
========
Consolidated Statement of Changes i
nSt
oc
k
hol
d
e
r
s
’Equi
t
y
Capital
stock
(note 20)
Legal
reserve
(note 21)
Other
reserves
(note 21)
Balances as of December 31, 2006
235,787
3,373
Capitalization
Transfer to legal reserve
Adjustments
Dividends paid
Recording of unrestricted reserves
Treasury shares
63,970
334)
------------299,423
10,141
------------13,514
7,000
( 2,612)
-------------4,388
91,042
(
667)
------------389,798
========
12,989
------------26,503
========
( 1,126)
------------3,262
========
Capitalization
Transfer to legal reserve
Dividends paid
Adjustment
Treasury shares (note 20)
(
Retained
earnings
-
101,386
63,970)
10,141)
114
( 20,277)
(
7,000)
129,900
-------------130,012
Minority
interest
25,456
Total
st
oc
k
ho
l
de
r
s
’
equity
366,002
(
(
8,418
------------33,874
114
( 20,277)
(
2,946)
138,318
------------481,211
(
(
(
(
3,662
6,844
------------44,380
========
( 25,981)
3,098
(
1,793)
154,033
------------610,568
========
91,042)
12,989)
25,981)
564)
147,189
-------------146,625
========
Consolidated Statement of Cash Flows
2008
Operating activities:
Adjustment to net result that do not affect the cash flow
of operating activities
Depreciation
Deterioration of intangible assets
Amortization of other assets
Profit attributable to associates and subsidiaries
Loss on sale of assets
Net variations in assets and liabilities:
Trade accounts receivable
Other accounts receivable
Inventories
Prepaid expenses and taxes and other assets
Available-for-sale non-financial assets
Other accounts payable
Net cash provided by operating activities
Investing activities:
Sale of property, plant, and equipment
Acquisition of minority interest
Purchase of intangible assets
Purchase of investments
Purchase of fixed assets
Net cash used in investing activities
2007
147,189
(
61,346
2,907
12,757
12,955)
2,295
(
129,900
(
58,528
2,904
5,161
19,418)
7,955
137,341)
28,282
(
79,366)
(
10,361)
210
(
1,306)
68,314
--------------81,971
---------------
(
(
(
(
44,759)
23,847)
41,974)
30,771)
48,842
31,299
--------------123,820
---------------
10,385
(
21,117)
(
6,607)
( 183,693)
--------------( 201,032)
---------------
8,630
(
4,865)
(
12,092)
(
3,874)
( 149,537)
--------------( 161,738)
---------------
(Continued)
Consolidated Statement of Cash Flows, (cont.)
2008
Financing activities:
Loans received, net of amortizations
Securitization bonds, net of amortization
Dividends paid
Commercial papers
Repurchase of own shares
Net cash provided by investing activities
Net increase (decrease) in cash
Cash and cash equivalents at the beginning of the year
Variation in restricted funds
Cash at end of year
122,993
16,455)
25,981)
41,979
(
1,793)
--------------120,743
(
(
1,682
123,726
1,622
--------------127,030
=========
2007
78,140
25,140)
20,277)
(
2,946)
--------------29,777
(
(
(
8,141)
137,647
(
5,780)
--------------123,726
=========
Notes to the Consolidated Financial Statements
December 31, 2008 and 2007
(1)
Business Activity
Graña y Montero S.A.A. (hereinafter the Group) was incorporated on August 12, 1996 as the
holding company of Grupo Graña y Montero. Its main activity is to invest in subsidiaries
and related parties. Additionally, as from September 2005, it renders services of general
management, financial management, commercial management, legal advisory and human
resources management (prior to that date, it rendered business advisory services) to said
c
ompa
n
i
e
s
.TheCompa
ny
’
sl
e
g
a
ld
omi
c
i
l
ei
sl
oc
a
t
e
da
tAv
.Pa
s
e
o del
aRe
públ
i
c
a
Nº 4675, Surquillo.
Likewise, as from year 2006, Graña y Montero S.A.A. has been engaged in the leasing of
offices to the Group companies and to third parties.
Year 2008 consolidated financial statements will be submitted to Board of Directors and
Ge
ne
r
a
lSt
oc
k
hol
de
r
s
’Me
e
t
i
n
gwi
t
h
i
nt
het
e
r
mse
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t
a
b
l
i
s
he
db
yl
a
wf
o
rt
hes
e
pa
r
a
t
e
financial statements of Graña y Montero S.A.A.
(a) Subsidiaries:
The consolidated financial statements of the Group include assets, liabilities,
revenues and expenses of the following subsidiaries:
 GyM S.A. is engaged in the business of civil construction, electromechanical
assembly, buildings, management and development of real property projects and
other related services.
 GMP S.A. is engaged in the exploitation, production, treatment, and trading of
oil, natural gas and its derivatives, as well as the storage and delivery of fuels.
 GMD S.A. is engaged in providing IT solutions in the Peruvian corporate
market.
 GMI S.A. Ingenieros Constructores is engaged in providing services of advisory
and engineering consultancy, execution of surveys and projects, project
management and works supervision.
 Concar S.A. is engaged in the operation and maintenance of highways on
concession.
 Fashion Center S.A. is engaged in developing and operating the conditioning
and fitting out project for commercial and recreational use of the area of Parque
Salazar of the District of Miraflores.
 Until June 30, 2007, Larcomar S.A. was engaged in the operation of the project
that is currently operated by Fashion Center S.A.
 Survial S.A., is engaged in the execution of the concession agreement of phase 1
of Southern Inter-oceanic highway.
 Concesión Canchaque S.A., is engaged in the execution of the concession
agreement of the Buenos Aires –Canchaque highway.
(Continued)
.2.
(b) Consortiums:
Additionally, the consolidated financial statements of the Group include assets,
liabilities, revenue and expenses of the consortiums in which it participates as
venturer, through its subsidiaries, and where there is jointly control, being the most
important the following:
Consortiums
Percentage of
interest
GyM S.
A.
’
s
GYM S.A. - Skanska del Perú S.A.
GYM S.A. JJC Contratistas Generales S.A. Chinecas
Constructores Transmantaro
Consorcio La Quinua 6
Consorcio Héroes Navales
Consorcio Collique GyM besco
Consorcio Constructor IIRSA Norte
Consorcio GyM -Eyvisac
Consorcio Pasco
Consorcio GyM Concar
Consorcio BAC
Consorcio Vial Ayahuaylas
50.00
60.00
50.00
50.00
50.00
50.00
17.00
70.00
75.00
10.00
50.00
5.00
GMDS.
A.
’
s
Consorcio Ransa Comercial S.A. - GMD S.A.
Consorcio Telefónica del Perú SAA- GMD S.A.
Consorcio Corporación TX
Consorcio Cosapi Data GMD
50.00
50.00
50.00
50.00
GMIS.
A.
’
s
GMI OIST Mot Lima
Pariacoto
33.00
60.00
GMPS.
A.
’
s
Consorcio Terminales
50.00
CONCARS.
A.
’
s
Consorcio GYM Concar
90.00
90.00
Gr
añayMont
e
r
oS.
A.
A.
’
s
Joint Torre Siglo XXI
Asociación T6
58.00
50.00
(Continued)
.3.
In this regard, the consolidated financial statements include the following amounts coming
from consortiums and joint ventures:
In thousands of S/.
2008
2007
Assets
Liabilities
Revenues
Expenses
105,345
========
94,489
========
219,786
========
186,184
========
88,134
========
57,956
========
126,097
========
104,730
========
The Group operates its divisions and/or business segments as described in note 29.
(2)
Main Accounting Principles and Practices
Main accounting principles applied in the preparation of consolidated financial statements are
detailed below. These principles and practices have been applied consistently to all years
presented in these financial statements; unless otherwise indicated.
(a)
Basis for the Preparation of Financial Statements
The consolidated financial statements are prepared and presented in accordance
with Accounting Principles Generally Accepted in Peru, which comprise the
International Financial Reporting Standards (IFRS) authorized through
resolutions issued by the Consejo Normativo de Contabilidad - CNC (Peruvian
Accounting Board). The IFRSs include the International Accounting Standards
(IAS) and the pronouncements of the Standing Interpretations Committee (SIC).
In Peru, the CNC authorized as of December 31, 2008, current IAS 1 to 41,
IFRSs 1 to 8, SICs 1 to 32, and all the pronouncements from 1 to 14 issued by
the current Interpretations Committee (IFRIC).
The consolidated financial statements have been prepared in conformity with the
historical cost principle.
The preparation of the consolidated financial statements in conformity with
accounting principles requires the use of certain critical accounting estimates. It
also requires from Management the use of its judgment in the process for the
a
ppl
i
c
a
t
i
ono
ft
heGr
o
up’
sa
c
c
o
un
t
i
ngpol
i
c
i
e
s
.Cr
i
t
i
c
a
le
s
t
i
ma
t
e
sa
nda
c
c
ou
n
t
i
ng
criteria are described in note 2.d.
(Continued)
.4.
(b)
Consolidated Financial Statements
The consolidated financial statements comprise the financial statements of Graña y
Montero S.A.A., and the financial statements of the subsidiaries and consortiums
detailed in note 1.
Subsidiaries
The subsidiaries are all entities over which the Company has authority to govern
their operating and financial policies generally for being holder of more than
half of voting shares. Subsidiaries are consolidated from the date on which their
control is transferred to the Company. They are de-consolidated from the date
the control ceases.
The Company uses the purchase method to record the acquisition of subsidiaries.
The cost of acquisition is measured as the fair value of assets delivered, equity
instruments issued, and liabilities incurred or assumed at the date of the
exchange, plus costs directly attributable to the acquisition. Identifiable assets
acquired and liabilities assumed in a business combination are initially measured
at fair value at the acquisition date. The excess of the purchase price over the fair
v
a
l
ueo
ft
h
eCompa
ny
’
s interest in identifiable net assets acquired is recorded as
goodwill in the assets.
I
ft
hec
os
ti
sl
owe
rt
ha
nt
hes
u
bs
i
di
a
r
y
’
sf
a
i
rv
a
l
ueofne
ta
s
s
e
t
s(
b
a
dwi
l
l
)
,t
he
difference is recognized directly in the income statement.
Transactions, balances and unrealized gains among the companies that the Group
controls are eliminated. Also, unrealized losses are eliminated unless the
transaction provides evidence of impairment in the value of the assets
transferred.
Consortiums
The Compa
ny
’
si
nt
e
r
e
s
ti
nj
oi
ntly controlled entities is recorded by the
proportionate consolidation method, through which the Company includes in the
relevant components of its consolidated financial statements the proportionate
shareholding of its interest in revenue and expenses, assets and liabilities and
individual cash flows of the joint venture. Significant transactions between the
Company and joint ventures have been eliminated.
Minority Interest
Interests from third parties, that are not part of the Group, are shown as minority
interests under the equity in the consolidated balance sheet and in the
consolidated income statement.
(Continued)
.5.
(c)
Functional Currency and Foreign Currency Transactions
i) Functional and presentation currency
The items included in the financial statementsofe
a
c
hoft
heGr
o
up’
se
nt
i
t
i
e
sa
r
e
stated in the currency of the primary economic environment in which the entity
operates (functional currency). The consolidated financial statements are
pr
e
s
e
nt
e
di
nn
ue
v
oss
ol
e
swh
i
c
hi
st
heGr
oup
’
sf
u
nc
t
i
on
a
la
ndpr
e
sentation
currency.
ii) Foreign currency transactions and balances
Foreign currency transactions are translated into functional currency using
exchange rates ruling at the dates of the transactions.
Gains or losses on exchange differences resulting from the collection and/or
payment of such transactions and from translating monetary assets and liabilities
stated in foreign currency at exchange rates ruling at year-end closing are
recognized in the income statement.
(d)
Critical Accounting Estimates and Criteria
The estimates and criteria used are continuously evaluated and are based on
historical experience and other factors, including the reasonable expectation of
occurrence of future events depending on the circumstances.
i)
Critical Accounting Estimates and Criteria
The Group makes estimates and assumptions regarding the future. By
nature, resulting accounting estimates, very rarely will be the same as the
respective actual results. However, it is the opinion of Management that
estimates and assumptions applied by the Group do not have significant risk
as to produce a material adjustment to the balances of assets and liabilities
for next year.
Review of carrying amount and provision for impairment
The Group applies the guidelines stated in IAS 36 to determine whether a
permanent asset requires from a provision for impairment. This
determination requires the use of professional judgment by Management to
analyze the indicators that might present impairment as well as the
determination of value in use. In this last case, it is required to apply
judgment in the preparation of future cash flows that include the projection
of the level of future operations of the Group, projection of economic
factors that affect income and costs, as well as the election of the discount
rate to be applied in this flow.
(Continued)
.6.
Taxes
Interpretations of applicable tax legislation are required when determining
obligations and tax expenses. The Group looks for professional counseling
in tax matters before taking any decision on it. Although Management
considers that its estimates are prudent and appropriate, interpretation
differences may arise with tax authorities affecting the charges for taxes in
the future.
ii)
Critical Judgment in the Application of Accounting Policies
Management has exercised its critical judgment when applying accounting
policies for the preparation of the accompanying financial statements, as
explained in the corresponding accounting policies.
(e)
Cash and Cash Equivalents
Cash and cash equivalents comprise cash in hands, overnight, time and sight
deposits held at banks with original maturities between two and three months.
(f)
Financial Instruments
A financial instrument is as any contract that gives rise to both a financial asset in
one entity and a financial liability, or equity instrument in another. In the case
of the Group, financial instruments correspond to primary instruments such as
accounts receivable, accounts payable, and shares representing capital share in
other companies.
Financial instruments are classified as asset, liability or equity according to the
substance of the contract. The interest, dividends, gains, and losses generated by
a financial instrument, and classified as liability, are recorded as income or
expense in the income statement. The payment to holders of financial
instruments classified as equity is recorded directly against equity. The financial
instruments are compensated when the Group has the legal right to compensate
them, and Management has the intention of paying them on a net basis or
negotiating the asset, and paying the liability simultaneously.
Fair value is the amount for which an asset could be exchanged between
knowledgeable, purchaser and a seller, or a liability settled between a debtor and
ac
r
e
di
t
ori
na
na
r
m’
s length transaction.
I
n Ma
na
g
e
me
n
t
’
so
pi
n
i
o
n
,t
hecarrying amount of financial instruments as of
December 31, 2008 and 2007, is substantially similar to their fair values due to
their short period of realization and/or maturity. The recognition and valuation
criteria of those accounts are disclosed in the accounting policies related to those
notes.
(Continued)
.7.
(g)
Trade Accounts Receivable and Provision for Doubtful Accounts
Accounts receivable are initially recorded at their fair value and are subsequently
valued at amortized cost, less the provision for deterioration. The provision for
deterioration of trade accounts receivable is determined when there is objective
evidence that the Group will not collect all the amounts overdue according to
terms originally established. Management considers that the balances of trade
accounts receivable as of December 31, 2008 and 2007 do not present
uncollectibility risks.
Trade accounts receivable are presented net of the advances received from clients
provided that they are related with the same work agreement and said agreement
establishes the possibility of compensation.
(h)
Inventories
Inventories are valued at construction, acquisition and/or contribution costs, which
do not exceed the net realizable value. The cost of construction materials is
determined through the weighted average method, except in the case of
inventories in transit, determined by the specific identification method. The net
realizable value is the estimated selling price in the ordinary course of business,
less cost to sale, and the commercialization costs. For the reductions of
inventory carrying amounts at realizable value, a provision for inventory
impairment is recorded in the results of the period when those reductions occur.
(i)
Financial Assets
The Group classifies its investments in the following categories: i) marketable
financial assets, ii) loans and accounts receivable, iii) Held-to-maturity
investments, and iv) available-for-sale financial assets. The classification
depends on the purpose for which investments were acquired. Management
determines the classification of its investments as of the date of their initial
recognition and reassesses this classification as of every closing date.
 Financial assets at fair value through profit or loss
A financial asset is classified in this category if it was mainly acquired in
order to be sold in the short term or if it is so assigned by Management.
Derivative financial instruments are also classified as marketable unless they
are designated as hedges. Assets in this category are classified as current
assets if they are held-for-trading or available-for-sale within 12 months as
from the balance sheet date. During 2008 and 2007, the Group did not hold
any investment under this category.
(Continued)
.8.
 Loans and accounts receivable
Loans and accounts receivable are non-derivative financial assets with fixed
or determinable payments that are not quoted in an active market. They arise
when the Group provides with money, goods or services directly to a debtor,
with no intention to trading the account receivable. They are included in
current assets, except for those with maturities exceeding 12 months after
balance sheet date. These ones are classified as non-current assets. Loans and
accounts receivable are included in accounts receivable from commercial
affiliates and various accounts receivable in the balance sheet (note 2.g).
 Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets with fixed or
determinable payments and fixed maturities acquired with the intention and
ability to hold them to maturity. During 2008 and 2007, the Group did not
hold any investment under this category.
 Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets
designated in this category or that do not classify in any of the other
categories. These assets are shown as non-current assets unless Management
has express intention to sell the investment within 12 months after the date of
the balance sheet. During 2008 and 2007, the Group did not hold any
investment under this category.
Recognition and Measurement
Investment purchases and sales are recognized as of the trade date, date on which
the Group commits to purchase or sale the asset. Transaction costs related to
financial assets recorded at fair value through profit and losses are recognized in
the income statement. Financial assets are derecognized when the rights to
receive cash flows from investments have expired or have been transferred, and
the Group has substantially transferred all risks and rewards derived from
ownership. Available-for-sale financial assets and held-for-trading assets are
subsequently recognized at fair value. Loans, accounts receivable, and held-tomaturity investments are measured at their amortized cost using the effective
interest method.
Realized and unrealized gains and losses arising from changes in the fair value of
t
he“
h
e
l
d-for-t
r
a
di
ng
”c
a
t
e
g
or
ya
r
ei
nc
l
u
d
e
di
nt
h
ei
nc
omes
t
a
t
e
me
nt
,i
nt
h
e
period they are originated. Unrealized gains and losses arising from changes in
the fair value of non-monetary securities, classified as available-for-sale, are
recognized in equity. When securities classified as available-for-sale are sold or
(Continued)
.9.
impaired, accumulated fair value adjustments are included in the income
statement as gains or losses on investment in securities.
Fair value of quoted investments is based on current bid prices. If market is not
active (or securities are not listed), the Company establishes the fair value by
using valuation techniques.
The Group evaluates at each balance sheet date, if there is objective evidence of the
impairment of a financial asset or group of financial assets.
(j)
Available-for-Sale Non-Financial Assets
Assets are classified as available for sale when their carrying amount is expected to
be recovered through their sale, when there is a plan for such a sale, and it is
highly probable that their sale occurs in the short-term. These assets are valued
at the lower of their cost or at their realizable value, less cost to sell.
(k)
Investments in Subsidiaries, Associates and Consortiums
These investments are recorded at equity method of accounting, crediting the cash
dividends at carrying amount.
(l)
Property, Plant, and Equipment
Property, plant, and equipment are recorded at cost, less accumulated depreciation
(note 13). Historical cost includes disbursements directly attributable to the
acquisition of these items. Subsequent costs attributable to the goods of the fixed
asset improving their original performance are capitalized; other costs are
recognized in the results.
Lands are not depreciated. Depreciation of plant and equipment and vehicles
r
e
c
og
ni
z
e
da
s“
La
r
g
eEqu
i
pme
nt
”i
sc
a
l
c
u
l
a
t
e
dba
s
e
dont
he
i
rus
eho
u
r
s
,i
n
relation to the estimated useful hours of these assets. The depreciation of other
a
s
s
e
t
st
h
a
tdono
tqu
a
l
i
f
ya
s“
La
r
g
eEqui
pme
nt
”i
sc
a
l
c
u
l
a
t
e
dbys
t
r
a
i
g
htl
i
n
e
method to assign its cost less its residual value during the estimated useful life,
as follows:
Years
Buildings and premises
Plant and equipment
Vehicles
Furniture and fixtures
Various equipment
Between 5 and 33
Between 5 and 10
Between 5 and 10
Between 4 and 10
Between 4 and 10
(Continued)
. 10 .
The residual value and the useful life of an asset is reviewed and adjusted, if
necessary, as of the date of each balance sheet. The carrying amount of an asset
is written off immediately at its recoverable amount when the carrying amount
of the asset exceeds its recoverable value. Gains and losses for sale of fixed
assets correspond to the difference between the income from the transaction and
the asset carrying amount. Those are included in the income statement.
Assets under construction are capitalized as a separate component of property, plant
and equipment. At completion, the cost is transferred to the appropriate
category. Work-in-progress is not depreciated.
(m)
Finance Lease Agreements
Lease and/or sale agreements with a leaseback agreement on plant and equipment,
through which the Group substantially assumes all risks and rewards related to
the property of leased assets, are classified as finance lease and are capitalized at
the inception of the lease terms, at an amount equal to the fair value of leased
property, or if lower, to the present value of the minimum lease payments. Lease
payments are apportioned between the reduction of the outstanding liability and
the finance charge so as to produce a constant periodic rate of interest on the
remaining balance of the liability. Obligations for finance and/or sale leases with
finance leaseback agreements, net of financial charges, are included in the Longterm Debt account in the balance sheet. The financial cost is charged to results
over the lease period. The cost of assets acquired through finance lease and/or
sale with finance leaseback agreement is depreciated over their estimated useful
life.
(n)
Public Service Concession Arrangements
In conformity with IFRIC 12 Service Concession Arrangements, officially approved
for application in Peru since 2008, disbursements incurred in relation to public
service concession arrangements operated by Consorcio Terminales, a
consortium in which subsidiary Graña y Montero Petrolera S.A. has a 50%
interest, are recorded as intangible assets because cash flows are conditional on
usage levels of public service by users. Revenue and costs relating to
construction of public infrastructure works are recognized by reference to the
stage of completion, while revenue and expenses related to rendering of public
services are recognized on an accrual basis. Until 2007, disbursements related to
infrastructure upgrade of the terminals of the Consortium were recorded as fixed
assets.
As a result of this adoption, as of December 31, 2008, Consorcio Terminales has
reclassified its Premises, Plant, and Equipment account to Intangible Assets
account at a net cost of S/. 14.49 million (S/. 18.81 million as of December 31,
2007 for comparative purposes) corresponding to improvements made on
terminals (note 15). This change of accounting policy has not resulted in
(Continued)
. 11 .
modification of useful life periods of intangible assets previously shown as fixed
assets because the criteria used is still the maturity of concession arrangement.
(o)
Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of
t
heGr
ou
p
’
si
nt
e
r
e
s
to
ft
h
ei
de
n
t
i
f
i
a
bl
ene
ta
s
s
e
t
so
fas
u
bs
i
di
a
r
ya
so
ft
h
e
acquisition date. Likewise, the goodwill arising during the acquisition of
minority interest in a subsidiary represents the excess of cost of the additional
investment over fair value of net identifiable assets as of the date of acquisition.
Goodwill is reviewed to determine whether a recognition of provisions for
impairment is required. It is recorded at cost less accumulated provisions for
impairment. Impairment losses are recognized in the income statement and are
not reversed. Gains and losses from the sale of subsidiaries or associates include
the carrying amount of goodwill related to the sold entity.
Goodwill is allocated to cash-generating units to conduct impairment tests. Each of
those cash-g
e
ne
r
a
t
i
ngun
i
t
sr
e
pr
e
s
e
n
t
st
heGr
oup
’
si
nv
e
s
t
me
nti
ne
v
e
r
yp
l
a
c
e
where it operates per primary reporting segment (note 14).
(p)
Other Assets
Concessions included in Other Assets item of the balance sheet are recognized as
such based on the forecast that these will generate future economic benefits for
the Group. Concessions are recorded at cost. These fees are amortized at
straight-line method based on the remaining maturity of concession agreements.
Repairs of highways and works in parking lots are capitalized, and regular
maintenance of highways and parking lots are recognized in expenses when they
are incurred.
Investments in exploration, development and subscription rights of concession
agreements are amortized as from the period when income from its exploitation
is obtained until the maturity of the respective agreements. On the other hand, if
it were the case, investments in exploration and exploitation, referred to those
exploration agreements in which it has been determined that results are not
successful, are charged to the results in the period when this situation is
determined, after the compensation attributable to the interests of third parties in
said investments.
Costs related to the development or maintenance of software are recognized in
results when incurred. However, costs that are directly related to single and
identifiable software, that are controlled by the Group and that will provide
future economic benefits higher than their cost in more than one year, are
recognized as intangible assets. Direct costs related to the development of
software include personnel costs and an aliquot part of general expenses.
Development costs of capitalized software are amortized by straight-line method
in the estimate of its useful life, without exceeding five years.
(Continued)
. 12 .
(q)
Impairment of Non-Financial Assets
Assets that have an indefinite useful life and are not subject to amortization, are
tested annually for impairment. Assets that are subject to depreciation or
amortization are reviewed for impairment whenever events or circumstances
indicate that the carrying amount may not be recoverable.
Impairment losses are the amount by which the asset carrying amount exceeds its
recoverable amount. The recoverable amount of assets corresponds to the higher
net amount obtainable from its sale or its value in use. In order to assess the
impairment, assets are grouped into the lowest levels for which identifiable cash
flows are generated (cash-generating units).
(r)
Loans
Loans are initially recognized at their fair value, net of transaction costs incurred.
These loans are subsequently recorded at their amortized cost, and any resulting
difference between the funds received (net of transaction costs) and the
redemption value is recognized in the income statement over the period of the
loan using the effective interest method.
Loans are classified as current liability unless the Group has the unconditional right
to differ settlement of the liability for at least twelve months after the balance
sheet date.
(s)
Provisions
Provisions are recognized when the Company has a present legal obligation, either
legal or constructive, as a result of past events, and when it is probable that an
outflow of resources will be required to settle the obligation, and it is possible to
reliably estimate its amount. Restructuring cost provisions comprise lease
termination penalties and employee termination payment. Provisions for future
operating losses are not recognized.
When there are a number of similar obligations, the probability that an outflow of
resources will be required in settlement is determined by considering the class of
obligations as a whole. A provision is recognized although the likelihood of
outflow for any specific item included in the same class of obligations may be
small.
Provisions are recognized at present value of expenditures expected to be required
to settle the obligation using pre-tax rates that reflect the current market
assessment of the time value of money and the risks specific to the obligation.
The increase in the provision due to the passage of time is recognized as interest
expense in the income statement.
(Continued)
. 13 .
(t)
Share of the Profits
TheGr
oupr
e
c
og
ni
z
e
sal
i
a
b
i
l
i
t
ya
nda
ne
x
pe
ns
ef
o
rwor
k
e
r
s
’pr
o
f
i
ts
ha
r
i
ngi
n
profits equivalent to 5% and 10% of taxable base determined according to the
current tax legislation for each subsidiary.
(u)
Income Tax
Current income tax is determined according to current tax provisions (note 23).
Deferred income tax is recorded using the liability method, recognizing the effect of
temporary differences that arise between the tax base of assets and liabilities and
its balance in the financial statements.
Deferred tax assets are only recognized as it is probable to have taxable benefits in
the future against the credits that can be used.
The effect of these temporary differences is also considered in the calculation of
wor
k
e
r
s
’p
r
o
f
i
ts
ha
r
i
ng
.
(v)
Capital Stock
Common shares are classified as equity.
Treasury Shares
When the capital stock recognized as equity is repurchased (treasury shares) in
conformity with the IFRSs, the payment made including any cost directly related
(
ne
to
ft
a
x
e
s
)i
sde
duc
t
e
df
r
om t
heGr
o
up’
se
q
ui
t
yun
t
i
ls
ha
r
e
sa
r
ea
mor
t
i
z
e
d
,
reissued or sold (this repurchase has a different connotation under article 105 of
Companies Act). When such shares are subsequently reissued or sold, any
payment received, net of incremental costs directly attributable to the transaction
and effects corresponding to income tax, is included in the equity (note 20).
(w)
Dividend Distribution
Dividend distribution to stockholders is recognized as liability in the financial
s
t
a
t
e
me
nt
si
nt
h
ep
e
r
i
odwhe
ndi
v
i
de
ndsa
r
ea
ppr
ov
e
dbyGe
ne
r
a
lSt
o
c
k
hol
d
e
r
s
’
Meeting.
(x)
Contingent Liabilities and Contingent Assets
Contingent liabilities are not recognized in financial statements. They are only
disclosed in the notes to financial statements unless the possibility of an outflow
of economic resources is remote. Contingent assets are not recognized in
financial statements, and they are only disclosed when an inflow of economic
benefits is probable.
(Continued)
. 14 .
(y)
Revenue Recognition
The Group recognizes revenues when the amount can be reliably measured, it is
probable that future economic benefits will flow to the Group, and specific
criteria are met per type of revenue as described below. Revenues are recognized
in the results as follows:
Income from work valuations
Income from work valuations and their respective costs are recognized as such
when executing them, according to work progress. Additionally, such income
and costs are adjusted to recognize the final projected profit margin of works
which is monthly reviewed. Income is invoiced prior approval of works owners.
Sale of goods
Ordinary revenues from sale of goods are recognized and recorded when the
products are delivered and the significant risks and rewards of ownership of the
goods are transferred to the buyer, and the collection of corresponding accounts
receivable is fairly certain.
Rendering of services
Revenues from rendered services are recognized in the accounting periods in
which the services are rendered, by reference to the stage of completion of the
service, determined based on the services performed to date as a percentage of
total services to be performed.
Revenue and costs for services rendered are recognized as such when the
services are rendered.
Interest and dividends
Interest income is recognized on a time proportion basis, using the effective
interest method.
Revenues from dividends are recognized when the right to receive the payment
has been established.
(z)
New Accounting Pronouncements
Certain standards and interpretations have been issued and are effective
internationally. In Peru, the CNC, through Resolution 040-2008-EF/94, dated
March 14, 2008, has officially approved the application of the following
standards and interpretations as from year 2009:
(Continued)
. 15 .
- IAS 32 Financial Instruments –Presentation (revised 2006). This standard
has been modified to incorporate the IFRS 7 requirements.
- IFRS 7 Financial Instruments: Disclosures. This standard adds certain new
disclosures to improve the information contained in financial statements and
replaces the disclosure requirements of IAS 32 Financial Instruments:
Disclosure and Presentation.
- IFRS 8 Operating Segments. This standard requires that an entity shall
disclose information to enable users of its financial statements to evaluate the
nature and financial effects of the business activities in which it engages and
the economic environments in which the Company operates.
- IFRIC 13 Customer Loyalty Programs.
- IFRIC 14 IAS 19 The Limit on a Defined Benefit Asset, Minimum Funding
Requirements and their Interaction.
Likewise, as from January 1, 2009, various revisions to current IFRS and IAS are
effective internationally as well as the new interpretations of issued standards
(IFRIC 15 Agreements for the Construction of Real Estate, IFRIC 16 Hedges of
a Net Investment in a Foreign Operation, IFRIC 17 Distributions of Non-cash
Assets to Owners); CNC has not yet approved them.
- IFRIC 10 Interim Financial Reporting and Impairment (effective for periods
beginning on or after January 1, 2007).
- IFRIC 11 IFRS 2: Group and Treasury Share Transactions (effective for
periods beginning on or after March 1, 2007).
- Review of IFRS 3 Business Combinations and IAS 27 Consolidated and
Separate Financial Statements (modifications effective for periods beginning
on or after July 1, 2009).
Management estimates that the adoption of these standards, as from effectiveness
da
t
e
,wi
l
ln
o
tha
v
es
i
g
ni
f
i
c
a
nte
f
f
e
c
t
sont
heGr
oup’
sf
i
na
nc
i
a
ls
t
a
t
e
me
nt
s
.
(3)
Financial Risk Management
TheGr
o
up’
sa
c
t
i
v
i
t
i
e
sma
ye
xpos
ei
tt
oav
a
r
i
e
t
yoff
i
na
nc
i
a
lr
i
s
k
sr
e
l
a
t
e
dt
ot
h
ee
f
f
e
c
t
sof
fluctuations in the debt and equity market prices, fluctuations in foreign exchange rates,
i
nt
e
r
e
s
tr
a
t
e
s
,a
ndf
a
i
rv
a
l
ue
soff
i
na
nc
i
a
la
s
s
e
t
sa
n
df
i
na
n
c
i
a
ll
i
a
b
i
l
i
t
i
e
s
.TheGr
oup
’
s
general program for the administration of risks is mainly focused on financial market
unpredictability, and seeks to minimize pot
e
n
t
i
a
la
dv
e
r
s
ee
f
f
e
c
t
so
nt
h
eGr
oup
’
sf
i
na
nc
i
a
l
behavior.
(Continued)
. 16 .
Administration and Finance Management is in charge of the administration of risk following
the policies approved by the Board of Directors. The Administration and Finance
Management identifies, evaluates, and covers the financial risks in close cooperation with
operating units.
(i) Currency risk
The Group's activities and indebtedness in foreign currency exposes it to exchange
rate fluctuation risk, especially concerning the U.S. dollar. In order to reduce the
Gr
oup’
se
xpos
ur
e
,i
tc
ond
u
c
t
se
f
f
o
r
t
st
ok
e
e
pa
na
p
pr
opr
i
a
t
eba
l
a
n
c
i
n
gbe
t
we
e
n
assets and liabilities and between income and expenses in foreign currency.
Balances in U.S. dollars (US$) as of December 31 are summarized as follows:
In thousands of US$
2008
2007
Assets:
Cash and banks
Trade accounts receivable
Other accounts receivable
)
Liabilities:
Bank loans
Other accounts payable
Long-term debts (including current portion)
Net liability position
18,372)
32,065)
107,353)98
38,680)
) 51,728
45,232)
--------------------------177,453
115,977)
--------------------------( 36,884)
( 41,524)
( 79,727)
( 73,804)
-------------( 231,939)
-------------( 54,486))
========
( 14,805)
( 35,908)
( 29,073)
( 67,559)
-------------( 147,345)
-------------( 31,368)
========
These balances have been stated in nuevos soles (S/.) at the following exchange rates
established by the SBS (Superintendency of Banking, Insurance, and Private
Pension Fund Administrators) ruling as of December 31:
In S/.
2008
2007
1 US$ - Buy rate (assets)
1 US$ - Sell rate (liabilities)
3.137
3.142
2.995
2.997
As of December 31, 2008 and 2007, the Group and its subsidiaries recorded gains on
exchange for S/. 249.10 million and S/. 65.70 million, and losses on exchange for
S/. 293.24 million and S/. 57.28 million, respectively.
(Continued)
. 17 .
(ii) Interest rate risk
The Gr
o
up’
si
nc
omea
ndope
r
a
t
i
ngc
a
s
hf
l
owsare independent from the changes in
t
hema
r
k
e
ti
n
t
e
r
e
s
tr
a
t
eb
e
c
a
us
et
h
eGr
o
up’
sdebt is substantially subject to fixed
rate. Only the short-term debt corresponding to bank loans that finance working
capital are subject to fluctuation of interest rates. The Group has taken a mediumand long-term debt at variable rate that subsequently was fixed using hedging
transactions (Swaps).
(iii) Credit risk
The Group does not have significant credit concentration risk. Concerning the loans
to its related parties, the Company has established measures aimed at assuring
recoverability of such loans.
TheGr
ou
p’
sc
e
r
t
i
f
i
c
a
t
e
so
ft
i
med
e
p
os
i
t
sa
r
el
i
mi
t
e
dt
of
ou
rs
oundf
i
na
n
c
i
a
le
nt
i
t
i
e
s
in order to avoid risk concentration.
(iv) Liquidity risk
Prudent management of liquidity risk implies keeping enough cash and marketable
securities, financing available through a proper number of credit sources, and the
capacity of closing positions in the market.
The Company maintains an average debt maturity greater than the DEBT/ EBITDA
ratio; additionally, the Group holds overnight deposits and certificates of time
deposits for an approximate amount of US$ 6.7 million destined to face cash
demands that new projects or investments may require.
Finally, the program of commercial papers obtained during 2006 was renewed in
year 2008 for 2 additional years, enabling lines amounting to US$ 20 million that
contribute to reduce the dependence on lines granted by the financial system, to
diversify financing sources.
(4)
Cash and Banks and Restricted Funds
They comprise the following:
In thousands of S/.
2008
2007
Cash and checking accounts
Overnight and time deposits
Collateral account
Restricted funds
88,494
38,536
-------------127,030
16,598
-------------143,628
========
51,861
71,865
-------------123,726
4,743
13,477
-------------141,946
========
(Continued)
. 18 .
As of December 31, 2008, the Group holds checking accounts and time deposits at local
banks in local and foreign currency for approximately S/. 64.32 million and US$ 19.99
million, respectively (S/. 58.4 million and US$ 21.6 million, respectively, as of December
31, 2007).
As of December 31, 2007, the Collateral Account amounting to S/. 4.7 million, (equivalent to
US$ 1.6 million) corresponded to a fund held at Banco de Crédito del Perú as a collateral
f
o
rt
h
ec
ompl
i
a
nc
ebondoft
heConc
e
s
s
i
onAg
r
e
e
me
ntof“
Ej
eMu
l
t
i
moda
lSurTr
a
mo3
(
I
I
RSASurTr
a
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”
.
TheCompa
nyr
e
c
ov
e
r
e
dt
h
i
sc
ol
l
a
t
e
r
a
ldu
r
i
n
g2008.
As of December 31, 2008, restricted funds mainly includes US$ 4 million (US$ 4.5 million as
of December 31, 2007) from subsidiary GMP S.A. held at Banco de Crédito del Perú, to
guarantee obligations of a related party.
(5)
Trade Accounts Receivable
Trade accounts receivable comprise invoices receivable and provisions pending invoicing
mainly related to income from work valuations, income from rendered services, and sale
of merchandise and property. As of December 31, 2008 and 2007, trade accounts
receivable are shown net of advances from clients for S/. 54.5 million and S/. 38.81
million, respectively. Those invoices receivable have current maturity, do not accrue
interest, and do not have specific collaterals.
Aging of accounts receivable is as follows:
In thousands of S/.
2008
2007
Current
30 days past due
Past due over 30 days
Total
341,936
29,665
5,879
-------------377,480
========
229,783
1,390
2,391
-------------233,564
========
As of December 31, 2008, trade accounts receivable mainly increased due to balances related
to stage of completion of contract of Concesión Canchaque S.A. for S/. 66.97 million and
Survial S.A. S/. 45.66 million. Those balances are guaranteed by the Peruvian government
once OSITRAN issue the corresponding Certificados de Avance de Obra - CAO (work
completion certificates).
(Continued)
. 19 .
(6)
Related Parties
The movement of accounts receivable and payable with related parties for the year ended
December 31, 2008, is as follows:
In thousands of S/.
Receivable:
GME S.A.
Norvial S.A.
Other minor
Payable:
GME S.A.
Norvial S.A.
Other minor
Balances as of
12.31.2007
Additions
Deductions
Balances as of
12.31.2008
104
362
175
-----------641
=======
4
9,316
734
-----------10,054
=======
( 8,844)
(
275)
-----------( 9,119)
=======
108
834
634
-----------1,576
=======
( 5,646)
((
7)
(
92)
-----------( 5,745)
=======
1
1,464
-----------1,465
=======
5,647
7
12
-----------5,666
=======
7
1,544
-----------1,551
=======
Accounts receivable and payable have current maturity and do not have specific guarantees.
(7)
Consortiums
As of December 31, this item comprises:
In thousands of S/.
2008
2007
Receivable
Payable
Receivable
Payable
Consorcio Constructor IIRSA-Norte
Consorcio Héroes Navales
Consorcio La Quinua
Constructora Uyuni S.A.
GyM JJC Contratistas Generales S.A.
GyM S.A. –Skanska del Perú S.A.
GyM S.A. (Constructores Transmantaro)
Consorcio GyM EVISAC
Consorcio Pasco
Consorcio GYM Concar
Consorcio Terminales
Consorcio Chinecas GYM-JJC
Consorcio BAC
Consorcio proyecto Chinquitirca
7,427
23
1,030
5
-----------8,485
=======
14,526
20
3,299
13
2
80
1,618
450
-----------20,008
=======
130
1
117
30
1,643
-----------1,921
=======
3,742
12
132
1,689
22
-----------5,597
=======
(Continued)
. 20 .
Accounts receivable and payable to consortiums are mainly related to loans for working
capital and lease of equipment.
(8)
Other Accounts Receivable
In thousands of S/.
2008
2007
Guaranty deposits for agreements (a)
Advances to suppliers (b)
Current portion of long-term account receivable
Various (c)
16,977
24,304)
4,625)
34,262
--------------80,168)
========
16,046)
26,772)
2,825)
35,613)
-------------81,256)
========
(a) Guarantee deposits as of December 31, 2008, are related to the following works:
Edificio Casa de Celda for S/. 2.6 million, Edificio Capital Nivel Superior for S/. 2.1
million, Hotel Libertador for S/. 2.1 million, C1 EPC11 Malvinas for S/. 1.8 million,
Main Civil Work LNG and Cashiriari civil works for S/. 0.90 million, Túnel La Granja
for S/. 1.0 millions, Main Civil Works for S/. 1.0 million, Minera Yanacocha for S/. 0.77
million, Rio Tinto Minera Limitada SAC for S/. 0.56 million, Doe Run Perú for S/. 0.32
million (Sedapal Blocks 6, 7 and 10 for S/. 6.5 million, LNG camps for S/. 2.8 million,
LNG Underground for S/. 1.7 million, LG tank foundations for S/. 1.3 million, Malvinas
EPC 11 Extension for S/. 1.2 million as of December 31, 2007).
(b) Advances given to suppliers correspond to Consorcio Constructor del Sur for S/. 4.5
million, JJC S.A. for S/. 4.46 million, Golf Millenium for S/. 3.7 million, Buildings
LNG for S/. 1.5 million, Lease of Block 58 for S/. 1.4 million, Edificio Oficinas Capital
for S/. 1.0 million, Topping Plant Huayuri for S/. 1.0 million, Parques de Riva Agüero
for S/. 1.1 million, and advances for imports and their corresponding procedures for
S/. 2.9 million (Golf Millenium for S/. 6.2 million, San Gabán Transmission Line for
S/. 0.8 million, Edificio Santo Toribio for S/. 1.1 million, Novotel Hotel for S/. 0.9
million, Clinica Ricardo Palma for S/. 0.55 million, Ministry of Transportation and
Communications for S/. 5.1 million, and advances for imports and their corresponding
procedures for S/. 7.2 million as of December 31, 2007).
(c) Various accounts receivable as of December 31, 2008, include the balance with
Intertítulos, resulting from the regular withholding of Securitization Bonds for S/. 7.72
million, the balance receivable corresponds to Compensation Fund for S/. 4.0 million
related to the regulatory framework of the Hydrocarbons Act and lease of equipment and
reimbursable expenses receivable from CONIRSA for S/. 4.6 million (regular
withholding of securitized bonds for S/. 7.67 million with Intertítulos, and leases of
equipment and reimbursable expenses receivable from CONIRSA for S/. 10.1 million as
of December 31, 2007).
(Continued)
. 21 .
(9)
Inventories
In thousands of S/.
2008
2007
Land (a)
Work-in-progress (b)
Construction materials (c)
Merchandise and supplies (d)
Inventories in transit
Provision for inventory obsolescence
37,219)
61,427
50,879
9,309)
)258
--------------159,092)
(
469)
--------------158,623
=========
16,074
21,178
30,362
10,915
873
--------------79,402)
(
145)
--------------79,257
=========
(a) Land
As of December 31, 2008, this item mainly comprises a land acquired in 2008 which will
be allocated in 2009 to a real estate project to be developed by the Group for a value of
S/. 33.3 million and lands at Playa Las Lomas del Mar, land T2 at Centro Empresarial
Camino Real totaling S/. 3.7 million (as of December 31, 2007, it comprised the land at
Playa Las Lomas for S/. 2.2 million, lands T2, T8, T9 for S/. 5.5 million, Malecón
Cisneros for S/. 6.3 million, and Balta 1070 for S/. 2 million).
(b) Work-in-process
As of December 31, work-in-process mainly comprise the Parques de El Agustino project
amounting to S/. 33.4 million, Javier Prado 200 project of S/. 5.8 million, Los Juncos for
S/. 4.9 million, Diez Canseco for S/. 5.4 million, Real 8-9 Building for S/. 2.6 million,
Garzón for S/. 2.3 million (as of December 31, 2007, it comprised Los Parques del
Agustino for S/. 16.2 million, and Javier Prado 200 for S/. 4.9 million).
(c) Construction materials
As of December 31, 2008, these materials correspond mainly to the following works:
Topping Plant Huayuri for S/. 8.9 million, Topping Plant Corrientes for S/. 6.4 million,
Andoas Plus 2007 for S/. 6.2 million, Edificio Casa de Celda for S/. 1.8 million,
Telecomunicaciones –Planta Interna for S/. 1.6 million (Andoas Plus for S/. 6.2 million,
Malvinas EPC 11 Extension for S/. 3.1 million as of December 31, 2007).
(d) Supplies and Merchandise
They mainly comprise accessories and supplies for computing and communications
equipment for S/. 2.4 million and supplies in general for the exploitation of blocks and
for the gas plant of the subsidiary GMP S.A. for S/. 5.2 million.
(Continued)
. 22 .
(10) Prepaid Taxes and Expenses
In thousands of S/.
2008
2007
Sales tax credit
Corporate tax credit /Temporary Tax on Net Assets (ITAN)
Prepaid insurances
Other
32,938
12,321
4,666
4,822
--------------54,747
=========
11,982
17,651
762
13,991
--------------44,386
=========
(11) Long-term Accounts Receivable
Name of Debtor
Type of
transaction
Consorcio Terminales (a) Loan
Maturity
August 2011
Petróleos del Perú S.A. (b) Agreement Various
In thousands of US$
In thousands of S/.
Authorized
Total
Current
amount
2008
2007
2008
2007
Non-current
2008
2007
3,800
6,531
8,118
2,577
2,112
3,954
6,006
794
9,144
8,274
2,048
713
7,096
7,561
1,276
Proyectos Inmobiliarios
Consultores S.A.
Philip Morris S.A.
Loans
-
-
1,276
-
-
-
Agreement October
672
-
-
-
-
-
-
Various
1,655
2,389
1,655
-
-
2,389
1,655
TGP S.A.
Inversiones Larcomar S.A.
2008
-
-
-
3,024
-
-
-
3,024
-
-
1,689
1,655
-
-
1,689
1,655
Proyecto Especial Kovire Agreement
-
-
1,450
1,646
-
-
1,450
1,646
Other
-
-
285
614
-
-
284
614
-----------
-----------
-----------
-----------
Sunat
Claim
-----------
-----------
21,488
26,262
4,625
2,825
16,862
23,437
======
======
======
======
======
======
(a) In August 2003, the Subsidiary GMP S.A. granted to Consorcio Terminales S.A. a loan
for US$ 9.2 million with funds obtained in the issuance process of securitization bonds.
As of December 31, 2008, the balance of this debt is shown at consolidation percentage
of the Consortium (50%) for S/. 6.53 million (S/. 8.27 million as of December 31, 2007).
This account receivable accrues interest at an annual rate of 9.65%.
(Continued)
. 23 .
(b) Long-term accounts receivable from Petróleos del Perú S.A. amounting to S/.
9.14
million (S/. 8.27 million as of December 31, 2007) are related to Consorcio Terminales
and represent additional investments finished by the Consortium and destined to the
modernization and enlargement of the terminals under the agreement signed by both
entities. These investments are work-in-progress and will be transferred to Petróleos del
Perú S.A. after corresponding technical audit and upon written approval by such entity.
The value resulting from such determination will be considered for their invoicing.
(12) Investments
It comprises the following:
Quantity
of shares
Associates:
Norvial S.A.
CONIRSA S.A.
Proyectos Inmobiliarios Consultores S.A.
Inmobiliaria Almonte S.A.
Transportadora de Gas del Perú S.A.A
Oiltanking Investments Bolivia S.A. (a)
Promotores Asociados de Inmobiliarias S.A.
Inmobiliaria Viena S.A.
Oiltanking Andina S.A.C.
Sierra Morena S.A.
Inversiones Larco Mar S.A.
Inversiones Real Once S.A.
CONCIN S.A.
Other investments
Capital
shareholding in %
2008
2007
Carrying amount
in thousands of S/.
2008
2007
10,422,200
190
398
3,299,740
1,250,000
160,963
41,732
2,759,909
775,000
4,973,115
513,380
1,138,473
-
34.00
19.00
17.91
13.82
0.60
49.00
41.12
13.99
50.00
33.33
20.15
29.07
17.00
-
34.00
19.00
17.91
13.82
0.60
49.00
41.12
13.99
50.00
33.33
20.15
29.07
10.20
-
37,675
23,847
14,609
8,645
5,465
5,098
4,051
2,691
1,673
1,617
1,111
4,037
3,423
2,032
----------115,974
-----------
31,626
15,595
12,197
8,645
5,645
5,098
4,051
2,691
1,290
5,713
1,110
4,037
3,285
2,063
----------103,046
-----------
2,806,500
1,914,701
19.00
19.00
19.00
19.00
6,016
4,506
----------10,522
----------126,496
======
5,430
3,504
----------8,934
----------111,980
======
Consortiums:
CONIRSA Tramo 3
CONIRSA Tramo 2
(a) Oiltanking Investment Bolivia S.A.
On July 28, 2000, Oiltanking GHbH (hereinafter OT), GMP S.A. and Graña y Montero
S.A.A. incorporated Oiltanking Investment Bolivia S.A., with a shareholding of 51%,
48%, and 1% respectively, in order to incorporate Compañía Logística de Hidrocarburos
Boliviana S.A. (hereinafter CLHB), for the operation of multi-purpose pipelines and
storage plants owned by Yacimientos Petrolíferos Fiscales Bolivianos (hereinafter
YPFB).
On May 1, 2006, the Bolivian government enacted Supreme Decree 28701 which
e
s
t
a
bl
i
s
he
st
h
e“
na
t
i
ona
l
i
z
a
t
i
ono
fhy
dr
oc
a
r
bo
n
s
”
.Th
r
oug
ht
hi
sde
c
r
e
e
,5
0
% pl
u
s1s
ha
r
e
of certain Bolivian companies including CLHB is adjudicated to YPFB.
(Continued)
. 24 .
As a result of this decree in May 2006, Management took the decision to change the
investment accounting method in Bolivia, from Equity Share Value to Cost Method. As
of December 31, 2006, 50% of investment value related to CLHB was considered as
accounts receivable and a 100% provision was recorded amounting to S/. 11.9 million,
which was presented as investment write-off in the income statement of year 2006.
Oiltanking GMBH and the Management of GMP S.A. have had a series of meetings with
officers from the Bolivian government to establish a fair price for shares. Recent
changes of Bolivian Authorities have delayed the closing of the negotiations. However,
in December 2008, an agreement was reached in which YPFB would pay the price per
share as stipulated in the Supreme Decree 29542 (US$ 20) and assume the debt of US$ 8
million. The Group is waiting for the issuance of the Supreme Decree confirming the
agreement; it is estimated that this operation will be completed during 2009.
As of December 31, 2008 and 2007, the financial statements do not include assets,
liabilities, income and expenses of OTIB due to jointly loss of control as a consequence
of the decrease of its interest, resulting from the nationalization.
(13) Property, Plant, and Equipment
The movement of the Property, Plant, and Equipment account and the corresponding
accumulated depreciation for the period ended December 31, 2008 and 2007 is the
following:
Year 2008
In thousands of S/.
Balances
as of
12.31.2007
Cost:
Land
Building and premises
Plant and equipment
Vehicles, various
equipment, and other
In-transit units
Work-in-progress
Accumulated depreciation:
Plant and equipment
Vehicles, various
Net cost
Additions
Deductions
1,660
139,109
210,755
15,719
4,788
40,585
4,134
(
475)
( 5,384)
( 12,046)
( 2,533)
125,978
6,103
46,659
----------545,983
-----------
22,871
10,505
128,570
-----------211,453
=======
( 4,902)
(
23)
( 19,405)
-----------( 44,768)
=======
14,810
130,108
8,070
4,022
36,059
2,275
( 1,280)
( 11,424)
( 2,376)
74,322
----------227,310
-----------318,673
=======
18,990
-----------61,346
=======
( 3,330)
-----------( 18,410)
=======
Adjustments
(
Reclassifications
Balances
as of
12.31.2008
36)
266
( 4,684)
(
370)
35
35,069
132,087
( 3,239)
1,184
173,848
366,697
13,711
1,015
( 4,818)
-----------( 8,627)
=======
( 5,404)
( 13,165)
( 145,383)
-----------=======
139,558
3,420
5,623
-----------704,041
------------
241)
10)
565
5,665
210)
18,117
160,167
7,749
( 6,020)
-----------=======
84,279
-----------270,312
-----------433,729
=======
(
(
317
-----------66
=======
(
(Continued)
. 25 .
Year 2007:
In thousands of S/.
Balances
as of
12.31.2006
Cost:
Land
Plant and equipment
Vehicles, various
In-transit units
Work-in-progress
Accumulated depreciation:
Plant and equipment
Vehicles, various
Net cost
Additions
Deductions
Adjustments
Reclassifications
Balances
as of
12.31.2007
1,665
155,750
268,656
17,283
73,770
50,850
3,331
( 90,370)
( 115,602)
(
5,076)
781
137
(
(
5)
41)
6,070
44
1,660
139,109
210,755
15,719
109,664
3,596
9,116
----------565,730
-----------
35,234
2,507
58,210
-----------223,902
=======
( 12,462)
(
53)
( 22,265)
-----------( 245,828)
=======
1,208
53
(
7,666)
125,978
6,103
46,659
-----------545,983
------------
23,892
202,758
9,297
3,307
34,655
2,886
( 12,310)
( 106,994)
(
4,192)
(
(
68,767
----------304,714
----------261,016
=======
14,802
-----------55,650
=======
(
299
-----------38
=======
9,596)
-----------( 133,092)
=======
1,598
-----------=======
-----------2,179
=======
79)
261)
79
(
50)
50
-----------=======
14,810
130,108
8,070
74,322
-----------227,310
-----------318,673
=======
As of December 31, 2008, property, plant, and equipment accounts include assets acquired
under the modality of finance lease for approximately S/. 113.78 million (S/.106.53
million as of December 31, 2007).
In 2008, the movement of work-in-progress is mainly related to investments of Subsidiary
Graña y Montero Petrolera S.A. in the construction of a new gas plant (note 19.a).
(14) Goodwill
It comprises the highest value paid by subsidiary GyM S.A. to obtain the total capital stock of
GMA S.A. reg
a
r
di
ngt
hev
a
l
ueo
fi
t
sc
or
r
e
s
p
ondi
ngi
nt
e
r
e
s
ti
ns
t
o
c
k
h
ol
de
r
s
’e
q
ui
t
y
.Th
e
balance as of December 31, 2008 of S/. 26.7 million (S/. 29.6 million in 2007) is shown
net of impairment loss of S/. 2.9 million.
Likewise, in February 2007, Graña y Montero S.A.A. acquired 1,103,509 shares at market
value that represented an additional shareholding of 5.47% in the subsidiary GMD S.A.,
paying an amount of S/.4.9 million; thus, increasing its shareholding from 83.21% to
88.68%.
(Continued)
. 26 .
The highest value paid on fair value of net assets acquired through this share block was
S/. 4.8 million and was recognized as goodwill in the balance sheet.
The evaluation of impairment of this goodwill was made using the value in use of the
corresponding cash-generating unit. The key criteria for the calculation of the value in use
have been: a) projection period: 10 years, b) Growth rate: 6% and perpetual growth up to
3%, and c) discount rate: 11%. The results of this evaluation did not determine
impairment in the carrying amount.
(15) Other Assets
The annual movement of the other assets item comprises the following
Year 2008:
Cost:
Block I (a)
Block V (a)
Consorcios Terminales (note 2.n)
Concessions and Rights
Licenses and software projects (b)
Surface rights (c)
Development of CV Tacna
Other minor
Accumulated amortization:
Block I
Block V
Surface rights (c)
Development of CV Tacna (d)
Other minor
Net cost
Balances
as of
12.31.2007
In thousands of S/.
Deductions
and/or
Additions
adjustments
Balances
as of
12.31.2008
49,785
10,340
29,014
9,545
25,730
13,441
123
4,117
-----------142,095
------------
18,066
1,305
878
3,115
5,929
11,196
-----------40,489
=======
(
(
(
67,800
11,217
29,718
9,545
28,243
13,441
6,052
15,313
-----------181,329
------------
19,187
7,224
19,606
6,134
17,500
409
60
-----------70,120
-----------71,975
=======
4,855
749
3,026
682
1,598
274
1,210
365
-----------12,759
=======
(
(
(
23,991
7,545
22,471
6,816
19,063
683
1,210
425
-----------82,204
-----------99,125
=======
51)
428)
174)
(
602)
-----------( 1,255)
=======
51)
428)
161)
(
35)
-----------(
675)
=======
(Continued)
. 27 .
Year 2007:
Balances
as of
12.31.2006
Cost:
Block I (a)
Block V (a)
Parque Ovalo Gutiérrez Concession
Surface rights (c)
Development of CV Tacna
Other minor
Accumulated amortization:
Block I (a)
Block V (a)
Parque Ovalo Gutiérrez Concession
Surface rights (c)
Other minor
Net cost
In thousands of S/.
Deductions
and/or
Additions
adjustments
32,296
8,752
28,659
9,545
9,512
17,689
12,383
4,795
-----------123,631
------------
17,489
1,588
428
3,770
11,537
123
1,696
-----------36,631
=======
16,981
6,878
16,704
5,454
2,948
13,029
839
3,475
-----------66,308
-----------57,323
=======
2,206
376
2,941
682
254
1,128
389
60
-----------8,036
=======
(
73)
( 9,512)
4,271
( 10,479)
( 2,374)
-----------( 18,167)
=======
(
(
(
(
30)
39)
2)
3,202)
3,343
(
819)
( 3,475)
-----------( 4,224)
=======
Balances
as of
12.31.2007
49,785
10,340
29,014
9,545
25,730
13,441
123
4,117
-----------142,095
-----------19,187
7,224
19,606
6,134
17,500
409
60
-----------70,120
-----------71,975
=======
Costs capitalized in the balance of this account are mainly referred to:
(a) Investment expenses in exploration, development and subscription rights obtained
through oil exploitation agreements of blocks I and V and the right obtained for the
concession in the administration of oil distribution terminals owned by
PETROPERU S.A.
(b) Costs related to the acquisition of certain software licenses and Oracle implementation.
(c)
Surface rights –Fashion Center S.A., correspond to the value of concession of the right
of use of surfaces granted by Municipality of Miraflores in December 1995, for a term of
60 years. Until May 2007, the surface right was granted in favor of Larcomar S.A.
(Continued)
. 28 .
(d) Costs incurred for the development of road conservation services, as per contract entered
into between the Special Project on Peruvian Transport Infrastructure –PROVIAS
Nacional and Consorcio GyM –Concar. Those costs are recognized in the results
according to related income and for the effective period of the contract.
(16) Bank Loans
In thousands of S/.
2008
2007
Banco de Crédito del Perú
Banco Continental
Bancolombia
Interbank
Scotiabank
33,024
37,784
23,565
7,140
6,846
-------------108,359
========
21,476
-------------21,476
========
As of December 31, 2008, this item comprises bank loans in local and foreign currency for
working capital. These obligations have current maturity and accrue interest rates ranging
from 3.5% to 10.15% (5.30% to 5.45% in 2007), respectively.
(17) Other Accounts Payable
In thousands of S/.
2008
2007
Taxes, remunerations, and profit sharing (a)
Advances for work agreements (b)
Various (c)
91,303
36,714
84,606
-------------212,623
========
61,662
34,716
39,389
------------135,767
========
(a) Taxes, remunerations, and profit sharing comprise mainly income tax for S/. 22.62
million, sales tax for S/. 15.
82mi
l
l
i
o
n,wor
k
e
r
s
’pr
of
i
ts
ha
r
i
ngf
orS/
.1
0.
9
0mi
l
l
i
on
,
provision for vacations payable for S/. 16.53 million, contributions and social laws for
S/
.
13.
38(
i
n
c
omet
a
xf
orS/
.4
.
87mi
l
l
i
on,s
a
l
e
st
a
xf
o
rS/
.17.
88mi
l
l
i
on
,wor
k
e
r
s
’pr
o
f
i
t
sharing for S/. 5.60 million, provision for vacations payable for S/. 12.42 as of December
31, 2007).
(Continued)
. 29 .
(b) Advances for work agreements correspond mainly to advances received from Ministry of
Transportation and Communications for the special project on Peruvian Transportation
Infrastructure amounting to S/. 21.26 million and advances received for the Centro de
Distribución NASA UNIQUE works for S/. 10 million, Roasting and Acid plant mainly
for S/. 8.2 million, Electrical and Instrumentation works for S/. 6.9 million, Buildings
LNG for S/. 5.9 million, Edificio Golf Millenium for S/. 5 million, Concesionaria Vial
del Sur S.A. for S/. 1.58 million, Perenco Perú Limited for S/. 0,50 million (the special
project on Peruvian Transportation Infrastructure for S/. 13.9 million, Inmobiliaria Viena
for S/. 5.9 million, Río Tinto Minera for S/. 3.5 million, Consorcio Héroes Navales for
S/. 3.0 million, and Planta de Indio - Banco Continental for S/. 2.2 million as of
December 31, 2007).
(c) Various accounts payable mainly comprise accounts payable to JJC for S/. 22 million
corresponding to Joint Venture in the Buenos Aires –Canchaque highway project , Playa
Kontiki for S/. 2 million, Besco for S/. 2.2 million and provision for severance
indemnities for S/. 5.5 million (S/. 8.1 million and S/. 7.4 million as of December 31,
2007, respectively). As of December 31, 2007, various accounts payable comprised
mainly S/. 7.3 million of the provision for severance indemnities, S/. 1.9 million
corresponding to provision for bonuses, S/. 3.9 million for various accounts payable in
works and S/. 2.3 million corresponding to the current portion of the financing with
Hewlett Packard Perú S.R.L., S/. 1.2 million to the current portion of the debt with Cisco
Systems, and S/. 0.9 million for loan from stockholders.
(18) Commercial Papers
On October 3, 2008, Graña y Montero S.A.A. renewed for two years the line up to US$20
mi
l
l
i
oni
nt
h
ec
a
p
i
t
a
lma
r
k
e
t
st
of
i
na
n
c
eownwor
k
i
ngc
a
pi
t
a
lope
r
a
t
i
on
sors
u
bs
i
di
a
r
i
e
s
’
.
During July and November, commercial papers were issued for US$ 7 million each time,
at an interest rate of 5.6966% and 7.023%, respectively, and are effective for 12 months
for both issuances.
(19) Long-term Debt
It comprises the following:
In thousands of S/.
Total
2008
2007
Bank debt (a)
Securitization bonds (b)
Financial debt
Debt with third parties
Various provisions
224,475
75,276
----------299,751
18,666
8,676
----------327,093
======
159,893
91,731
----------251,624
26,197
6,700
----------284,521
======
2008
Current
2007
54,014
32,416
----------86,430
3,693
----------90,123
======
38,424
27,628
----------66,052
----------66,052
======
Non-current
2008
2007
170,461
42,860
----------213,321
14,973
8,676
----------236,970
======
121,469
64,103
----------185,572
26,197
6,700
----------218,469
======
(Continued)
. 30 .
(a) Bank debt
Bank debt
detail
Banco de Crédito:
Bolivia
Banco Continental
Citibank (i)
Citileasing (i)
Interbank
Banco de Crédito
del Perú
Banco de Crédito
del Perú
Banco de Crédito
del Perú
Banco de Crédito
del Perú
Interleasing
América Leasing
Banco
Interamericano de
Finanzas
Scotiabank
Interbank
Banco de Crédito
del Perú
BNP Panamá
Other minor
Type
of obligation
Total
Maturity
2008
2007
In thousands of S/.
Current
2008
2007
Non-current
2008
2007
Loan
Leasing
Loan
Leasing
Leasing
2010
2010
2014
2014
2014
9,803
70,049
48,880
14,483
8,719
27,402
46,506
2,011
7,680
3,081
4,906
1,572
2,860
2,021
7,792
62,369
45,799
9,577
7,147
24,542
44,485
Guarantee
2009
5,142
6,403
-
-
5,142
6,403
Leasing
2012
19,803
22,322
9,263
13,751
10,540
8,571
Promissory note
2009
1,142
-
1,142
-
-
-
Loan
Leasing
Leasing
2010
2011
2010
10,520
18,465
3,889
19,182
5,752
5,189
8,098
2,622
5,758
2,523
5,331
10,367
1,267
13,424
3,229
Leasing
Leasing
Promissory note
2012
2011
2009
5,504
8,337
1,226
2,500
3,380
2,245
2,464
3,262
1,226
1,152
1,093
2,245
3,040
5,075
1,348
2,287
Leasing
Loan
2012
19,955
1,760
---------224,475
======
999
---------159,893
======
543
7,073
903
---------- ---------54,014
38,424
====== ======
12,882
857
---------170,461
======
456
---------121,469
======
(i) In March 2007, the subsidiary Graña Montero Petrolera S.A. signed a financial
lease contract with Citileasing S.A. for US$ 15 million for 8 years at a rate of
6.85% to finance part of the construction of the new gas plant.
On March 13, 2008, an amendment to the contract was signed to expand the amount of
US$ 20 million; and on May 8, 2008, a second amendment was signed to the contract
expanding the amount to US$ 23 million.
On October 1, 2008, Citibank NY disbursed a loan of US$ 22 million, according to the
credit contract dated September 19, 2008, which was destined to settle leasing
transactions with Citileasing S.A. This loan has a grace period of 6 months and will
be paid in 90 monthly installments as from April 2009. Guarantees supporting this
obligation are: mortgage on the land where Parinas Gas Plant is built, collateral on
equipment and assignment of flows from sales to clients such as Repsol, Llama Gas,
Zeta Gas and Herco. The agreed rate was Libor + 0.25%. In order to reduce the rate
risk, a rate swap was made fixing the rate at 6.2% as from April 2009, when the
amortization of the loan will begin.
(Continued)
. 31 .
(b) Securitization Bonds
I
nOc
t
obe
r20
03,byme
a
nso
fpu
b
l
i
cbi
d,t
het
ot
a
l
i
t
yo
f“
Se
c
u
r
i
t
i
z
a
t
i
on Bonds from
Gr
a
ñaMon
t
e
r
oa
ndSub
s
i
d
i
a
r
i
e
s
”
- First Issuance was placed for US$50 million, with
maturity in 2011 and with a return of 7.5% of annual nominal interest rate.
Thea
mor
t
i
z
e
dc
os
tofde
b
tf
o
rt
he“
Se
c
u
r
i
t
i
z
a
t
i
onBon
dsf
r
om Gr
a
ñayMon
t
e
r
oa
n
d
Subs
i
d
i
a
r
i
e
s
”i
t
e
mha
sbe
e
nde
t
e
r
mi
n
e
da
sf
o
l
l
ows
:
In thousands of
2008
US$
Original capital
Amortized capital
Total debt
Plus:
Accrued interest
Transaction costs
)
Less:
Prepaid costs
Amortization of transaction costs
Amortized interest
Total amortized cost
Less current portion
Non-current amortized cost
2007
S/.
US$
S/.
50,000)
( 26,647)
------------23,353)
-------------
157,097)
( 83,725)
------------(73,372)
-------------
50,000)
( 19,940)
------------30,060((
-------------
149,847)
( 59,757)
------------90,090
-------------
15,532)
(7,774)
------------(23,306)
-------------
48,802)
(24,426)
------------73,228)
-------------
13,518)
6,681)
------------20,199)
-------------
40,513)
20,023
------------60,536)
-------------
( 2,582)
( 5,126)
( 14,992)
------------( 22,700)
------------23,958)
( 10,317)
------------13,641)
=======
( 8,113)
( 16,106)
( 47,105)
------------( 71,324)
------------75,276)
( 32,416)
------------42,860)
========
( 2,572)
( 4,193)
( 12,874)
------------( 19,639)
------------30,620)
( 9,222)
------------21,398)
=======
( 7,708)
( 12,566)
( 38,621)
------------( 58,895)
------------91,731)
( 27,628)
------------64,103
=======
The Company and the subsidiaries GMI S.A. Ingenieros Consultores, GMD S.A.,
Concar S.A., Graña y Montero Petrolera S.A., and GyM S.A. shall comply with the
maintenance of certain financial indicators, in addition to certain clauses related to
events of economic and contractual nature, detailed in the corresponding Certificate
of Incorporation of Securitization Bonds. The indicators mentioned as of December
31, are detailed as follows:
Ratio
Consolidated debt to equity
Consolidated debt coverage
Consolidated current liquidity
GMP S.A. debt to equity
GMP S.A. debt coverage
GMP S.A. current liquidity
Required ratio
Maximum 2.65
Minimum 1.20
Minimum 0.50
Maximum 1.40
Minimum 1.30
Minimum 1.00
(Continued)
. 32 .
I
n Ma
na
g
e
me
nt
’
so
pi
n
i
on
,t
he
s
eo
bl
i
g
a
t
i
o
nsdo n
otl
i
mi
tno
ra
f
f
e
c
tt
he Gr
oup
’
s
operations and are being satisfactorily complied.
The payment schedule of Securitization Bonds is the following:
In thousands of
US$
S/.
Years
2009
2010
2011
7,218
7,771
8,364
--------------23,353
========
22,680
24,414
26,278
-------------73,372
========
(20) Capital Stock
As of December 31, 2008, authorized, subscribed and paid-in capital, according to the
Comp
a
ny
’
sby
l
a
wsa
n
da
me
nd
me
nt
si
sr
e
pr
e
s
e
n
t
e
dby558,
2
84,
190c
ommo
ns
h
a
r
e
swi
t
h
a par value of S/. 0.70 each (428,223,833 common shares as of December 31, 2007 with
a par value of S/. 0.70 each).
As of December 31, 2008, quote per common share has been S/. 2.00 (on June 3, 2008, the
Company issued 130,060,057 shares which explain the decrease in the price of shares)
and its trading frequency has been 83.47% on average (S/. 6 per common share as of
December 31, 2007 and its business frequency of 97.60% on average).
Ge
ne
r
a
lSt
o
c
k
hol
de
r
s
’Me
e
t
i
ng
,he
l
do
nMa
r
c
h3
1
,2
008
,a
pp
r
ov
e
dt
hec
a
pi
t
a
l
i
z
a
t
i
o
no
f
results corresponding to the profit of year 2007 for S/. 91.04 million after applying the
amount of S/.12.99 million to the legal reserve account, and allocate dividends for
S/
.2
5
.
98mi
l
l
i
on(
Ge
ne
r
a
lSt
oc
k
hol
d
e
r
s
’Me
e
t
i
ng
,he
l
donMa
r
c
h31,2007,a
pp
r
ov
e
dt
o
capitalize results corresponding to the profit of year 2006 for S/. 63.97 million, apply to
the legal reserve account the amount of S/. 10.14 million, record the unrestricted reserve
account for S/. 7 million, and authorize dividends for S/. 20.23 million).
As of December 31, 2008, the shareholding structure of Graña y Montero S.A.A. is as
follows:
Total
Percentage of individual
Number of
percentage of
shareholding
stockholders
interest
Up to 1.00
From 1.01 to 5.00
From 5.01 to 10.00
Over 10
848
10
6
1
----------865
======
13.25
30.29
35.41
21.05
----------100.00
======
(Continued)
. 33 .
Treasury shares
AtGe
ne
r
a
lSt
o
c
k
hol
d
e
r
s
’Me
e
t
i
ng
,da
t
e
dMa
r
c
h3
1,2007,a
ndba
s
e
dona
r
t
i
c
l
e104of
Companies Act, the Company established the policy to hold in portfolio up to 2% of own
shares to be used in the total or partial payment of Annual Allowances of the main
executives of Grupo Graña y Montero. Accordingly, as of December 31, 2008 and 2007,
the Company holds 1,468,562 and 476,507 treasury shares, respectively (notes 2.v
and 21).
(21) Legal Reserve and Other Reserves
Pursuant to Companies Act, the Company is required to allocate 10% of its net annual
income to a legal reserve. This allocation is required until the reserve equals 20% of paidin capital. The legal reserve must be used to compensate losses in the absence of earnings
or non-restricted reserves, and must be restored with future earnings. This reserve may
also be capitalized, but it shall be subsequently restored.
In 2008, the amount of S/. 12.99 million was applied to the Legal Reserve account (S/.10.14
million in 2007).
Other reserves comprise unrestricted reserves established in 2007 for S/. 7 million. As of
December 31, 2008 and 2007, such amount is shown net of higher value paid for the
acquisition of treasury shares compared to its corresponding par value of S/. 1.13 million
and S/. 2.61 million, respectively (note 20).
(22) Wor
k
e
r
s
’Pr
of
i
tSh
a
r
i
ng
Ac
c
or
d
i
ngt
oc
ur
r
e
n
tl
e
g
i
s
l
a
t
i
oni
nPe
r
u,wo
r
k
e
r
s
’p
r
of
i
ts
ha
r
i
ngi
nt
heCompa
ny
’
spr
o
f
i
t
sa
nd
its local subsidiaries fluctuates between 5% and 10% of the computed net income of the
separate financial statements and the participation in its management should be carried out
through committees destined to improve production and productivity. Additionally, the
current legislation in Peru establishes that in the case of capital increase by public
subscription of shares, the Company and its local subsidiaries are obliged to offer their
workers the first option in the subscription of shares in no less than 10% of capital
increase.
Expe
ns
e
sf
o
rwor
k
e
r
s
’p
r
o
f
i
ts
ha
r
i
n
gi
sb
r
o
k
e
ndowna
sf
o
l
l
ows
:
In thousands of S/.
2008
2007
Current
Deferred
(
13,133)
175
--------------( 12,958)
========
( 5,885)
( 3,836)
-------------( 9,721))
========
(Continued)
. 34 .
(23) Tax Matters
(a) According to current legislation, the consolidated determination of taxes is not allowed;
Graña y Montero S.A.A. and its Subsidiaries have made this determination individually.
(b) Management of the Company and its Subsidiaries’considers that it has determined tax
base and tax loss applying the income tax regime according to current tax legislation,
which requires adding and deducting from the results shown in the financial statements,
the items that such legislation recognizes as taxable and non-taxable, respectively. For
years ended December 31, 2008 and 2007, the income tax rate is 30%.
(c) Expenses for income tax are broken down as follows:
In thousands of S/.
2008
2007
Current
Deferred
(
72,724)
6,730
--------------( 65,994)
========
( 34,966)
( 24,193)
-------------( 59,159))
========
(d) The determination of income tax of Graña y Montero S.A.A., GyM S.A. and GMD S.A.
considers the attributable result of each joint venture in the percentage of interest in each
of them.
On the other hand, the consortiums that keep independent records are considered
taxpayers of the Income Tax Regime; therefore, all the income tax resulting from
commercial operations shall be attributed.
(e) Certain subsidiaries of the Group have determined the deferred tax on temporary
differences originated by items that have a different treatment for tax and accounting
purposes. As of December 31, 2008, assets and liabilities for deferred income tax shown
in the balance sheet amount to S/. 6.64 million and S/. 30.47 million, respectively
(S/. 2.31 million of assets and S/. 22.57 million of deferred liabilities as of December 31,
2007) which is mainly generated due to the deferral of work profits, different
depreciation rates, finance lease transactions and provisions for tax contingencies.
(f) The Group and its subsidiaries have current agreements for the fractionating payment of
the tax debt amounting to S/. 8.74 million (S/. 9.81 million as of December 31, 2007),
which are included in the Debt with Third Parties item. The requested fractionating
payment of tax debts will mature between years 2011 and 2012.
(Continued)
. 35 .
(g) Tax Administration is empowered to review and, if it were the case, correct the income
tax and tax loss carry forward determined by the Company in the last four years,
beginning on the tax return filing date (years subject to review).
TheCompa
n
y
’
st
a
xr
e
t
ur
n
sf
or2004 t
h
r
oug
h2
00
8 are subject to review by tax
authorities.
According to current legislation, the Group and its subsidiaries are jointly responsible
with companies merged in previous years and whose periods are open to review, before
any contingency that may be originated by transactions made prior to the dates of the
respective mergers.
Since there could be differences in the interpretation by the Tax Authorities concerning
the standards applicable to the Group and its Subsidiaries, it is not possible to foreseen,
to date, if there would be additional tax liabilities as a result of eventual reviews. Any
additional taxes, delays or interest, if produced, are recognized in the results of the year
in which the difference of criteria with Tax Authorities is resolved. Management
estimates that there will not be significant liabilities as a result of these possible reviews.
(h) As from 2001, for income tax and sales tax purposes, transfer pricing for transactions
carried out with economically-related parties, and with companies domiciled in
territories with low or null taxation, shall be supported with documentation and
information about the valuation methods used, and the criteria considered, for the
pricing. Management of the Group and its Subsidiaries considers that for income and
sales tax purposes, pricing regarding transactions such as those aforementioned has been
made in accordance with tax legislation; consequently, no significant liabilities will arise
as of December 31, 2008.
(i) Temporary Tax on Net Assets (ITAN).- As from January 1, 2005, this tax shall be
levied on corporate income generators subject to income tax regime. As from 2008, the
tax rate is 0.5% applicable to the amount of net assets that exceed S/. 1 million.
The amount actually paid may be used as a credit against payments on account of
income tax regime or against the payment for regularization of Income Tax of the
corresponding fiscal period.
(24) Contingencies, Guarantees, and Commitments
(a) Contingencies
As a result of tax reviewing processes on the subsidiary GyM S.A., corresponding to
periods 1999 and 2001, the Peruvian Tax Authorities (SUNAT) has issued tax
assessment resolutions and corresponding fines, totaling approximately S/. 29
million.
(Continued)
. 36 .
In this regard, GyM S.A has made the corresponding claims, which are pending
resolution. Management and their legal advisors estimate that those claims will be
resolved in favor of the subsidiary. However, the Company, in order to cover any
tax contingency, has recorded a provision of S/. 6.7 million, which is included in
the Various Provision account. Management estimates that part of the adjustments
made in the determination of tax results of years 1999 and 2001 has a temporary
effect, and will be recovered by the Company, provided that the aforementioned
temporary effects be included in the determination of the taxable net income of
non-prescribed fiscal periods at the date when the case is resolved.
As of December 31, 2008, other subsidiaries of the Company have received tax
assessment resolutions from the Tax Authorities for approximately S/.2.00 million,
substantially referred to the income tax and sales tax, which are under claim
process. Also, there are claims from third parties for S/. 18.60 million.
In the opinion of the compa
ni
e
s
’ Management and their legal advisors, the
aforementioned claims will be declared well-founded and therefore, no liabilities
will arise additionally to the ones timely paid.
(b)
Guarantees
The Company holds a partial guarantee agreement with IDB and FMO that
corresponds to 37.5% of the pending balance of the bonds.
In this respect, the Group has participated in the establishment of a trust fund managed
in order to support the partial guarantee granted by the two financial entities
through the delivery of the shares of Promoción Inmobiliaria del Sur S.A.,
Inmobiliaria Almonte S.A.C. and Inmobiliaria San Silvestre S.A. to Scotiabank
Perú S.A.A. (trustee), as guarantee. Those shares are valued at US$ 18.01 million.
(c)
Commitments
Letters of guarantee for approximately US$ 86.9 million and S/.92.9 million (US$ 96.8
million and S/. 60.5 million in 2007), stand by of US$ 15.4 million (US$ 29.8
million in 2007), guarantee policies for US$ 13.1 million and S/.5.3 million
(US$ 7.3 million and S/. 9.8 million in 2007) and credit letters for US$ 0.5 million
that guarantee agreements signed with third parties and bank loans with maturities
until year 2011.
(Continued)
. 37 .
(d)
Collaterals
As of December 31, 2008, the Group has approximately US$ 18 million in collaterals
granted in favor of local and foreign financial institutions that guarantee credit lines
and other operations granted by such institutions.
(25) Valuation and Cost of Works
As of December 31, income and costs distributed per operating division of the subsidiary
GyM S.A. are the following:
2008
Income
Civil works division
Electromechanical division
Buildings division
Real estate division
Various works
592,305
391,113
258,594
16,763
81,067
-------------1,339,842
========
In thousands of S/.
2007
Cost
Income
532,352
319,773
231,479
7,690
39,122
-------------1,130,416
========
565,906
253,291
119,445
12,634
67,924
-------------1,019,200
========
Cost
513,076
200,602
106,460
9,120
36,291
-------------865,549
========
(26) Operating, Administrative, and General Expenses
The operating, administrative, and general expenses for the years ended December 31,
include the following items:
In thousands of S/.
2008
2007
Personnel charges
Services rendered by third parties
Various charges for operations
Taxes
Provisions for the period
Depreciation and amortization
56,459
23,606
8,625
991
2,365
12,508
-------------104,554
========
42,767
17,755
6,502
708
2,563
8,719
-------------79,014
========
(Continued)
. 38 .
(27) Financial Income (Expenses)
Financial income and expenses for the years ended December 31 comprise:
In thousands of S/.
2008
2007
Financial income Interest on allocation of debt and loans
granted
Other financial income
Financial expenses Interest on bank obligations
Interest and expenses on securitization bonds (note 19)
Interest on lease agreements
Expenses for discounted documents
Interest on tax fractionating payment
Other financial expenses
Financial expenses, net
3,041)
5,573)
--------------8,614)
--------------(
7,203)
(
8,627)
( 11,007)
((
24)
(
715)
( 11,193)
--------------( 38,769)
--------------( 30,155)
========
954)
8,420)
-------------9,374)
-------------(
(
(
3,717)
12,334)
2,961)
(
648)
( 12,458)
-------------( 32,118)
-------------( 22,744)
========
(28) Basic Earnings per Share
The earnings per share have been determined as follows:
Attributable earnings (in thousands of nuevos soles)
Weighted average of shares outstanding
of S/.0.7 each.
Basic earnings per share (in S/.)
2008
2007
147,189
=========
129,900
=========
558,284,190
=========
0.263
=========
428,223,833
=========
0.303
=========
Basic earnings per share are calculated by dividing the net profit corresponding to common
stockholders by the weighted average number of common shares outstanding as of the
financial statements date.
(Continued)
. 39 .
(29) Segment Reporting
Segment reporting is only required for companies whose securities are publicly traded and for
companies that are in the process to issue securities in the securities market. In these
consolidated financial statements, the basic format of the report comprises business
segments, while the secondary format of the report comprises geographical segments.
Basic reporting schedule –business segments:
For the year ended December 31, 2008:
In thousands of S/.
Construction
Sales
Oil
1,339,842
Gross profit
209,427
Operating profit
150,062
Systems
Engineering
Concessions
115,032
80,162
( 45,719)
19,784
30,701)
18,965)
15,174
7,195
17,244
10,657
13,760
( 11,551)
(
6,044)
(
4,764)
(
3,114)
(
880)
( 3,802)
Other income and expenses, net
(
27,303)
(
7,684)
(
2,951)
(
731)
(
Taxes
116,715
(
Net profit
44,352)
83,570
( 28,569)
72,363
1,827,710
225,241)
Financing income (expenses), net
Pre-tax profit
Total
105,439
96,018)
113,152
Other
1,130
(
55,001)
15,633
987)
(
143
624)
30,155)
(31,796)
9,706
( 2,556)
10,018
294,936
(
7,497
6,231
5,615)
399,490
2
232,985
3,127
(
78,952)
3,675
12,833
154,033
Assets
717,527
330,354
59,290
49,280)
197,577
187,080
1,541,108
Liabilities
470,141
167,585
46,960
26,831)
162,061
56,962
930,540
Equity
247,386
162,759
12,330
22,449)
35,516
130,117
610,568
Other
Total
In thousands of S/.
Construction
Sales
Oil
Engineering
Concessions
183,930)
96,015
67,968
45,284
27,577
Gross profit
153,651
80,710
13,780
19,272)
12,497)
19,117
Operating profit
108,476
72,808)
3,260
10,124
6,518
18,827
Financing income (expenses), net
1,019,200
Systems
(
Pre-tax profit
Taxes
Net profit
(
3,545)
739)
(
3,439)
(
836)
2,224
326
(
730)
(
654)
107,155
72,395
(
909)
38,040)
69,115
(
( 23,344)
49,051)
219
(
690)
8,634
(
3,016)
(
906)
( 13,279)
1,439,974
299,027
2
220,013
(
22,744)
401
8,363
9,930
6,013
13,911
207,199
( 2,266)
(
2,433)
(
68,880)
5,618
3,747
11,478
138,319
Assets
540,084
221,829
62,947
23,173)
42,327
257,655
1,148,015
Liabilities
341,777
103,430
50,759
12,931)
27,394
130,513
666,804
Equity
198,307
118,399
12,188
0,242)
14,943
127,142
481,211
)
(Continued)
. 40 .
Secondary reporting schedule –geographical segments:
Peru
Sales
Gross profit
Operating profit
Profit bef
o
r
ewo
r
k
e
r
s
’p
r
o
f
i
ts
ha
r
i
ng
and income tax
Taxes
Net profit
In thousands of S/.
Other
Total
1,827,710
399,490
294,936)
(
30,155)
(
31,796)
)-
1,827,710
399,490
294,936)
( 30,155)
( 31,796)
232,985
78,952)
154,033
)-
(
(
Assets
Liabilities
Equity
1,541,108
930,540
610,568
-
232,985
78,952)
154,033
1,541,108
930,540
610,568
Peru
Sales
Gross profit
Operating profit
Profit bef
o
r
ewo
r
k
e
r
s
’p
r
o
f
i
ts
ha
r
i
ng
and income tax
Taxes
Net profit
Assets
Liabilities
Equity
In thousands of S/.
Other
1,420,680
296,152
217,138)
( 22,744)
9,930
(
204,324)
68,031)
136,293
1,144,792
665,606
479,186
Total
19,294) 1,439,974
2,875)
299,027
2,875)
220,013)
(
22,744)
9,930
(
2,875)
207,199
849) (
68,880)
2,026)
138,319
3,223
1,198)
2,025)
1,148,015
666,804
481,211
(Continued)
. 41 .
(30) Subsequent Event
St
oc
k
ho
l
d
e
r
s
’Me
e
t
i
n
g
so
fGy
M S.
A.a
ndGMV S.
A(
r
e
l
a
t
e
dc
ompa
ny
)
,he
l
donNov
e
mbe
r
24, 2008, approved the spin-off project, through which GyM S.A. segregated an equity
block composed of assets and liabilities associated to the real estate business line, being
GMV S.A. the beneficiary of such equity block. This spin-off, effective as from
January 1, 2009, aims at achieving specialization in the construction business
management and the real estate business by GyM S.A and by GMV S.A., respectively.
As a consequence of the segregation of the equity block established in the spin-off project, on
January 1, 2009, GyM S.A. reduced its capital stock by the amount of S/. 71.97 million,
thus the capital stock of GyM S.A. decreased from S/. 163.69 million to S/. 91.72
million with the subsequent invalidation of the shares subjected to decrease and the
modification of the fifth article of the by-laws.
Assets, liabilities and equity transferred to GMV S.A. on January 1, 2009, were as follows:
In thousands of S/.
Assets
Liabilities
Equity
98,338
======
17,150
======
81,188
======
(Continued)

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES Consolidated

Transcription

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