ANNUAL REPORT BUiLdiNg PERU`s fUTURE

> Building
Peru’s
future
ANNUAL
REPORT
2014
>
ANNUAL
REPORT
Building
Peru’s
future
2014
Goals
achieved
04 New Cement Plant in Piura
08 organizational culture
10corporate commitment
activities
2
Soundness
Results
19Economic environment
21The national cement market
23 Cement production
25 Commercial Consolidation
27 Consolidated Financial Results of Cementos Pacasmayo S.A.A.
and its Subsidiaries
Best Practices
35General Information
36Declaration of
Responsibility
37Business
1
3
29Main Subsidiaries
33 Completed Projects
4
Commitment
51Administration
Directors
Board Committees
Management
61 Financial Information
65 Financial Statements
5
New
Cement
Plant
in Piura
In 2014, further progress was made in
the implementation of the cement plant
project in Piura. Progress was achieved in the
construction and electromechanical assembly
activities performed by the Cementos Piura
Consortium formed by the following companies:
JJC Contratistas Generales S.A., SSK Montajes
e Instalaciones S.A.C. and JJC Schrader
Camargo S.A.C.
The Project Management team has been reinforced
by specifically-recruited staff with experience in
the cement industry, in addition to the staff from
the Pacasmayo Plant. This enlarged management
team, together with the Plant Construction and
Engineering Supervision, as well as the contracted
external companies (Cesel Ingenieros S.A. and
Saxum Ingeniería S.A.) will ensure the committed
deadlines and costs, with the expected quality.
The following activities continued their progress
in 2014: The manufacture and delivery of major
equipment purchased to Loesche GmbH, milling
areas, and Thyssenkrupp Industrial Solutions
GmbH, responsible for manufacturing and
supplying the equipment used in the production
of clinker, in addition to the equipment for
receiving, transporting and storing raw materials,
silos and the packaging and palletizing area.
All these pieces of equipment have been
successfully transported from the different
manufacturing sites in Europe, Asia and Brazil,
along with locally-manufactured pieces of
equipment, using the FOB contracting system
for the logistic services contracted with MIQ
and Ransa. The number of pieces of equipment
transported amounts to 6,000 tons of imported
pieces of equipment, and to 3,500 tons of
locally-manufactured pieces of equipment.
On the other hand the Company, through Project
Management, directly hired local workshops
to manufacture metal structures that include:
Warehouses, equipment support and complete
buildings. The quantity of metal structure
contracted amounts to 4,000 tons, distributed
among 10 different workshops.
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It should be noted that during 2014 the
construction and equipping of the main
Electrical Substation (ES) for the future Plant was
successfully completed, in addition to the 2.5
km-transmission line that will allow us to have
the power needed to operate the plant.
Exploration and mining studies continued their
progress at the Virrilá and Bayóvar 4 quarries,
as they will be the main source of calcareous
raw material (alternative to limestone), in
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New
Nueva
Planta
Cement
de Cemento
Plant
enPiura
in
Piura
order to ensure the quality and quantity of
raw material. Additional complementary raw
material sources, such as clays and pozzolans,
have also been explored.
It is worth remarking that during the construction
process in 2014, peaks of up to 1,450 workers
per month were registered in work activities, and
if we add the staff from the workshops directly
hired, we could say that 3,000 workers were
engaged in the activities.
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Finally, the total investment for the new
plant remains at US$385 million, and its
implementation is scheduled for the second
quarter of 2015, according to the estimations
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Nueva
Planta
de Cemento
en Piura
Careful management
of the construction
of the new cement
plan in Piura has
allowed us to stay on
time and on budget.
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Total investment:
US$ 386 million
Start of
Operations:
Second half
of 2015
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>1
Goals
Achieved
During 2014, we strengthened our efficiencies,
we continued the construction of the new cement
plant in Piura. The execution of this project is on
time and on budget.
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Organizational
Culture
Sharing the
Strategic Focus
OUR
VISION
OUR
MISSION
OUR
COMMITMENT
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To join the top 10% of cement
companies in Latin America both
in profitability and in environmental
responsibility.
We are an innovative company that
specializes not only in cement but
also in quicklime and construction
materials.
To create value through innovation,
quality, operational efficiency,
care for the environment, social
responsibility, safety and the
fostering of clients and human
resources.
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Organizational
Culture
Sharing the
Strategic
Focus
OUR
VALUES
Creativity
Excellence
Integrity
Responsibility
Teamwork
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The capacity to think
differently.
Experiencing a
process of continual
improvement and
always striving to
do things better.
This means living
with rectitude and
under the principles of
honesty, respect and
fairness.
Respect high
standards of
safety, care for
the environment
and contribute
to sustainable
development of
local communities.
Always listen to
the ideas of others
in order to attain
common goals,
thereby creating a
climate of confidence
and learning from
our mistakes.
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Corporate
Commitment
Activities
Quality Management and
Research and Development
Compliance with the Quality Policy was
ensured by checking the conformity of our
products against regulatory requirements, thus
contributing to customer satisfaction.
The technical specifications for new and existing
products, in the cement and limestone industry,
were developed and optimized.
The department of geology received support in
preparing 820 exploration samples for analysis
by FRX, as part of the Piura Project.
The design, development and industrial
production of MS (MH)(R)-type cement – New
FORTIMAX 3 Formula, and of High Calcium
Quicklime was managed, specifically addressing
our customers’ needs.
In-house and external trainings were developed
in subjects such as Quality and Applied
Statistics, Cement Production, Lead Auditor,
FRX Quality Assurance, MS(MH)(R)-type
Cement, New FORTIMAX 3 Formula, etc.
The design of ICo-type cement was optimized,
considering compliance with quality
requirements, lower production costs and
enhanced performance.
The renewal of the ISO 9001 Certification of
our Quality Management System, applicable
to CPSAA, CSSA, DINO and Dinoselva,
was achieved through a recertification audit
conducted in December 2014 by SGS.
We achieved 100% compliance in the Vendor
Certification Process by means of an assessment
carried out by SGS in November 2014. We were
qualified as an “Outstanding Vendor.”
Two internal audits were carried out in CPSAA,
CSSA, DINO and Dinoselva as part of the
maintenance of the Quality Management System
(QMS). In addition, 22 employees were trained
and certified as ISO 9001 Internal Auditors.
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Corporate
Commitment
Activities
Safety and Environment
1. Safety
The Industrial Safety Management of 2014
was framed by the fulfillment of three main
objectives: The development of the “Excellence
in a Culture of Safety” Project, the sustainability
of Industrial Safety Management, and the
compliance with current legal regulations.
Establishing the continuity of the “Excellence
in a Culture of Safety” Project was achieved
during this period. The objective of this project
is to settle a solid prevention culture throughout
the organization. Significant progress was
obtained in this regard, laying its foundation on
the commitment of top management and the
leadership of the company.
Likewise, important results were obtained based
on the integration of leadership and chain of
command when working on the sustainability
of the Management System. Key management
tools were developed, allowing us to prevent
operational risks.
In compliance with current legal regulations, we
identify each legal requirement applicable to
our operations, carrying them out and ensuring
that the reviews performed by state regulatory
authorities do not create any contingencies due
to non-compliance.
Meeting these three objectives in all the units
of the Group has allowed us to significantly
reduce accident rates on the basis of the
following: Enhanced implementation of HIRA
(Hazard Identification and Risk Assessment),
deviation management, incident management
and reporting, application of operational
procedures, etc.
Our management outline, reinforced by the
key concepts that result from the consulting
services provided by DUPONT, has given us very
satisfactory results in the whole process.
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Continuity of the “Excellence in
a Culture of Safety” Project was
achieved during this period. The
objective of this project is to
settle a solid prevention culture
throughout the organization.
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Corporate
Commitment
Activities
2. Environment
The company has a Management System that
allows it to remain within the legal environmental
framework. This is reflected in meeting the
environmental commitments took on with
regulatory authorities, in addition to the results of
monitoring the activities related to the control of
air, noise, water and soil quality that we conduct
for our operations. The environmental monitoring
results are within the Environmental Quality
Limits and Standards.
Cementos Pacasmayo cares about developing
an environmental system focused on preventing
environmental impacts by meeting the
environmental commitments took on in the
Environmental Impact Assessment (EIA) and
Environmental Impact Statement (EIS). Thus, we
have been working on a series of initiatives that
will enable us to further improve in environmental
management, notwithstanding that monitoring
activities show that we are below the established
limits. Some of these initiatives are:
• Planting trees in different parts of the plant.
This allows us to visually enhance our
facilities.
• Treating domestic wastewater.
• Creating water and energy saving/
optimization initiatives.
• Creating mechanisms to reuse the waste
material resulting from our operations,
reincorporating it into the process.
• Technological improvements in the
Tembladera operations by installing
telescopic chutes in the secondary crusher.
This allows an improved control of the dust
generated by the operations and avoids the
use of water in these controls.
• Improving the primary crusher enclosure of
the Tembladera operations.
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Corporate
Commitment
Activities
Community Relations
In 2014, the Community Relations department
met the objectives outlined in its operations
and projects.
The mission of the Community Relations
department is the following:
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“To create and strengthen a favorable social environment for the
continuity and growth of our operations and projects, prioritizing
our social investment in education, health, and local development
programs, in coordination with other interest groups for the
purpose of contributing to sustainable development.”
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Corporate
Commitment
Activities
Some of the most relevant actions at corporate
level are the following:
• Implementing the Community Relations
Strategic Plan in all our units and projects.
• Implementing the social investment
guidelines in all our units and projects.
• Implementing the Social Management and
Information System. This system is highly
useful for reporting, as it makes online
information easily accessible to the different
employees, heads and managers associated
to the department.
• For the fourth consecutive year, we have
developed our sustainability report, attaining
for the second time an application level B, in
accordance with the GRI (Global Reporting
Initiative) standards.
• For the third consecutive year, we have
been recognized as a Socially Responsible
Company.
At operations and projects level:
Education through programs:
• We have obtained the approval of the EIA for
the SALSUD Project, Virrilá Quarry and Coal
Project in coordination with the Environment
Department.
Donation to TECSUP and UTEC. Tecsup is a
leading nonprofit Peruvian institute that, since
1984, provides technical higher education.
In its three campuses in Peru, Tecsup has
graduated more than 7,000 students in various
technical fields, some of whom now work for
us and our affiliates. On the other hand, the
Universidad de Ingeniería y Tecnología – UTEC
(University of Engineering and Technology) is an
educational nonprofit proposal that since 2012
is aimed at the development of people in the
engineering field, looking to satisfy the need for
these types of professionals in the labor market
by implementing a curriculum in line with the
trends and demands that globalization poses
to modern engineering, with an integrated
approach to innovative teaching models. To
enhance students’ knowledge, UTEC also has
various national and international alliances with
top organizations.
• We have started operations at Bayóvar 4.
• We have established Public-Private
Partnerships (PPPs) with public and private
organizations, getting to finance productive
projects in Rioja and Piura. Through this,
livestock and coffee producers, as well as
young people, were benefited by technical
training programs.
Our social investment is defined by three
guidelines and three strategies, which include
the following projects:
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Corporate
Commitment
Activities
Luis Hochschild Plaut Educational Fund in
partnership with TECSUP. Through this program
we have provided financial assistance in 2014
to 86 young people interested and qualified to
study in TECSUP, in addition to 16 beneficiaries
of the Educational Credit.
Centro de Difusión de Tecnológica (Center
for Technology Diffusion) in partnership
with TECSUP. In 2014, at our Pacasmayo and
Tembladera operations, TECSUP instructors
provided training to 614 students and adults from
the local population on the general competencies
and capacities of Information Technology.
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Matemáticas para Todos (Math for All) in
partnership with Instituto Apoyo. The project has
been implemented for 11 years, enhancing the
indicators of the census evaluation. 7 schools
and over 5,000 beneficiary students have
participated in the program.
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Corporate
Commitment
Activities
Pacasmayo supports
Healthy Schools
Program, as well as
medical campaigns in
partnership with the
Ministry of Health.
Capacity building for health personnel from the
different health facilities in our operation sites.
groups in our area of influence. One of our
social responsibility programs in the rainforest
consisted on studying the reproductive forms
of the “paiche” (arapaima giga), a native fish
species that was on the edge of extinction. After
years of studies and scientific testing, we have
successfully bred this species in captivity, and
we have obtained thousands of fingerlings. In
2014 Acuícola Los Paiches S.A.C., the company
that promotes this initiative, received the “Award
for Innovative Exports” from the Peruvian
Exporters Association – ADEX for its research
and for developing “paiche” farming in the
Yurimaguas rainforest.
Local development through the following:
Agreements established with public and private
organizations aimed at contributing to capacity
building. Through these agreements, productive
projects that help in employment generation
were implemented through organized interest
Our donation policy provides permanent
support to different activities, which are
aimed at revaluating culture, promoting sports,
and boosting productive trade shows and
recreational activities for the residents of our
area of influence.
Health through the following:
Support to the “Healthy Schools” program.
Medical campaigns in partnership with the
Ministry of Health.
Support in the implementation of instruments,
equipment and medical furniture for the main
health facilities at our operation sites.
Support to improve basic health infrastructure.
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Corporate
Commitment
Activities
Cementos Pacasmayo was awarded
with a special recognition by the
Lima Stock Exchange for obtaining
the highest sustained growth in
the last 5 years.
Good Corporate Governance Practices
Cementos Pacasmayo S.A.A. counts among its
objectives the continual improvement of its good
corporate governance practices, and is actively
committed to developing these for the benefit of
its shareholders and the market in general.
An example of such commitment is the
recognition of the good corporate governance
practices of Cementos Pacasmayo by the Lima
Stock Exchange (BVL). For the fifth consecutive
year, Cementos Pacasmayo was selected as
part of the Good Corporate Government Index
(IGBC). Additionally, the Company was awarded
with a special recognition for obtaining the
highest sustained growth in the last 5 years.
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Soundness
With the new cement plant in
Piura we are strengthening our
position in the North of Peru.
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Economic
Environment
In 2014, the growth of the world economy
declined for the third consecutive year, in
spite that the different economies had an
uneven performance. On the one hand, the
United States showed a strong recovery due
to the services sector and to the recovery of
the manufacturing industry, with an increased
consumption and investment promoted by
the strengthening of economic conditions.
On the other hand, the Eurozone experienced
deterioration in consumers’ trust caused by
the Russia-Ukraine conflict. This resulted
in investments dropping and moderate
consumption. Japan fell into recession in the
third quarter of 2014 due to the negative impact
created by the increase on sales taxes in April.
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In general terms, emerging economies showed
signs of deceleration, especially Latin America,
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Economic
Environment
due to the impact of external factors, such as
the fall of trade terms and currency depreciation.
Peruvian economy, like other economies in
Latin America, suffered a slowdown in 2014.
The main factors of said deceleration were: 1)
lower growth in consumption and investment
resulting from the fall of terms of trade; 2)
reduction of public expenditure, mainly due to
the difficulties on the implementation of regional
and local government investment programs; and
3) climatic factors, such as the slight increase in
water temperature, which affected key sectors
such as the fishing and agriculture industries.
However, it is important to note that Peru has
solid macroeconomic foundations, which
allow the country to be better prepared for this
situation. International reserves totaled 62,307
million in December 2014 – amount slightly
below the one reached in 2013. Nonetheless, it
remains as one of the highest in the region, as it
represents 30.5% of GDP.
According to the Inflation Report issued in
December by the Central Reserve Bank (BCR,
for its acronym in Spanish), demand grew about
2.5%, which is below the growth registered in
2013, but still slightly above the GDP growth of
2.4%. Exports were affected by the international
situation, especially by the slowdown in the
mining industry. This caused a 2.2% fall,
compared to 2013 results.
According to the latest BCR report, annualized
inflation was 3.2%, which is slightly above the
annual parameters set by the BCR (between 1%
and 3%). However, it is important to highlight
that this rate mainly reflects increased food
prices and electricity rates. Inflation resulted
in 2.5% if we exclude food and energy, in
other words, if we deduct the impact of these
sectors in high price volatility. There was a 6.8%
depreciation of the Nuevo Sol against the US
Dollar. The exchange rate closed at levels of
2.986 Nuevos Soles per dollar by the end of
2014, compared to the 2.795 Nuevos Soles level
registered by the end of the previous period.
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International
Reserves reached
US$ 62,307
million as of December 2014.
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The
National
Cement
Market
During 2014, shipments of cement totaled
11’429,938 metric tons, improving on the
11’143,629 metric tons shipped during the same
period in the previous year.
The production facilities of Cementos
Pacasmayo and Cementos Selva shipped a
total of 2’346,877 metric tons (0.1% less than
what was shipped during the same period in the
previous year).
Market share for Cementos
Pacasmayo and Cementos Selva
during this period was
20.5%
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Market share for Cementos Pacasmayo and
Cementos Selva during this period was 20.4%.
1. Cement sales volume during 2014 includes the cement
used for the construction of the new Piura plant.
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The
National
Cement
Market
pacasmayo + Selva
Maket share
Cementos
pacasmayo
and Cementos
Selva
20.5%
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Cement
Production
Cement production at the Pacasmayo
plant reached 2’053,786 metric tons (below
the 2’100,740 metric tons produced in the
previous year).
Production of this quantity of cement required
1’444,752 metric tons of clinker, and 609,034
metric tons of additives such as gypsum, blast
furnace slag, pozzolanic material, limestone
and diatomite.
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Production in the Rioja plant was 23.5% higher
than the previous year, reaching a volume of
296,419 metric tons, which required 235,961
metric tons of clinker and 60,459 metric tons
of additives.
Total clinker production for both plants was
1’241,548 MT, and 443,526 MT of imported
clinker were needed to cover the deficit.
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Commercial
Consolidation
In 2014, the efforts of the Commercial Department
were focused on strengthening and expanding
our relationships with our customers and clients.
Our main achievements were the following:
builders through the ¨Dino Master Builders
Club,¨ exceeding by more than 50% the
results achieved in 2013.
• The sulfate-resistant cement (the Premium
prices of the category) now with Fortimax 3,
was successfully re-launched in February.
Its durability focus makes it a unique
product in the market, coming to get up to
42% of our sales.
• The first class of Procer (Certification
Program for Pacasmayo Mater Builders)
students graduated in December. This 100hour study program on civil construction was
developed in partnership with Tecsup, one of
the main technical institutions of the country.
Its objective is to improve construction
standards in the northern area of the country.
Over 1,200 master builders applied to the
program, from which 60 were qualified to
take the course.
• During 2014, we kept our commitment to
help in the development of master builders
from the northern area of the country. We
provided training to over 4,000 master
• Red Comercial Dino (Dino Commercial
Network) consolidates another year of
growth by developing relationships with its
clients through promotions, customer-loyalty
• Maintain the positioning of the Pacasmayo
brand, reaching brand-awareness levels
above 98%.
programs and the ongoing “Dino Cercanía”
(Dino Closeness) positioning campaign.
• We implemented the sub-distribution model
for hardware stores through our network
of partners. This model’s objective is to
strengthen the DINO network and to provide
a better service to the hardware stores sector
through our presence at the point of sale. At
the end of 2014, we implemented this model
in four of the main cities: Trujillo, Chiclayo,
Piura and Cajamarca. This model gave us
access to 100% of hardware stores in the
urban areas of these cities, covering up to
800 hardware stores (points of sales) on a
weekly basis.
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• In 2014 we began to strengthen sales
management from the specialization of our
sales force up to the monitoring and control
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Commercial
Consolidation
thereof. We developed a sales program by
channels (massive, industrial and public
segment). This specialization helps us provide
a better service to our clients, given that each
sales team has the relevant technical and
commercial skills for a better interaction with
customers. In addition, we have developed,
together with the Business Intelligence
Department, a registry and monitoring system
for market variables, which are collected from
the points of sale of the different channels.
This helps us on decision-making in view of
our business strategy.
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Consolidated
Financial
Results of
Cementos
Pacasmayo
S.A.A. and its
Subsidiaries
SALES
In 2014, consolidated sales revenue
for Cementos Pacasmayo and its
subsidiaries reached S/.1,242.6 million
(a 0.2% increase in sales revenue on
the previous period). Of these revenues,
87.3% was owed to sales of cement,
concrete and blocks.
Gross Profit
The consolidated gross profit of
Cementos Pacasmayo and its
subsidiaries in 2014 was S/. 518.4
million, a 1.0% decrease on the S/.
523.4 million obtained during the
previous year.
Consolidated Profit for
the Period
Profit for 2014 was S/. 188.8 million,
24.0% above the S/. 152.3 million
obtained during 2013.
S/. 518.4
million
consolidated gross
profit for Cementos
Pacasmayo and
Subsidiaries
EBIDTA
Company earnings before the
deduction of earnings before interest,
taxes, depreciation and amortization
(EBITDA) were S/. 365.3 million, 4.7%
higher than the S/. 348.9 million earned
in 2013.
S/.1,242.6
million
consolidated sales
revenue for Cementos
Pacasmayo and
Subsidiaries
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+24%
net profit
for 2014
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Results
During 2014 we were able to decrease
administrative expenses which resulted
in increased profitability
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Main
Subsidiaries
CEMENTOS SELVA
In 2014, CEMENTOS SELVA’s cement sales
volume amounted to 286,101 TM, a 19%
increase compared to the 240,431 TM sold the
previous year.
The total cement production in 2014 reached
296,419 TM.
2014 saw many months of high demand, leading
to the plant being used to almost 100% of its
capacity.
DINO
The sales of products supplied by Cementos
Pacasmayo S.A.A. amounted to S/. 730.6 million,
representing 75.5% of the sales made by Dino.
The sales of the products manufactured by Dino
amounted to S/.155.8 million and the sale of the
products supplied by third parties amounted to
S/. 81.2 million, representing 16.1% and 8.4% of
Dino’s sales, respectively.
In 2014, a total of 377,731 cubic tons of ready-mix
concrete was shipped. This figure is 20.6% lower
than the 475,652 cubic tons shipped in 2013.
The sales volume of precast blocks and pavers
in 2014 increased from 30,259 thousand sold in
2013 to 31,207 thousand.
Steel sales represented 90.4% of the total thirdparty sales.
DINOSELVA IQUITOS
Las The sale of products supplied by
Cementos Selva S.A. amounted to S/. 140.2
million, representing 84.6% of the sales made
by Dinoselva.
In 2014, a total of 24,993 cubic meters of
ready-mix concrete was shipped. This figure
is 68.9% higher than the 14,792 cubic meters
shipped in 2013.
In 2014, the volume of sales of precast blocks
and pavers fell from the 6,217 thousand sold in
2013 to 5,498 thousand.
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Steel sales represented 95.2% of the total thirdparty sales.
Cement sales volume for
CEMENTOs SELVA
increased 19%
in 2014 compared to the
previous year
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Main
Subsidiaries
FOSFATOS DEL PACÍFICO
The Bayóvar project began when the Bayóvar
concession No. 9 was awarded to Cementos
Pacasmayo S.A.A. on August 29, 2007, as a
result of the Concurso Público Internacional
(Public and International Invitation to Tender)
No. PRI-087-2007 meant to encourage private
investment in the remaining concessions in the
Bayóvar area. Such concession is located in the
district and province of Sechura, department of
Piura, approximately 1,000 km north of Lima,
110 km south of Piura and 30 km from the
Pacific Ocean.
On September 1, 2009, by way of a simple
restructuring process, CPSAA separated
from its assets a block of equity relevant to
the phosphates industry, thus organizing the
company Fosfatos del Pacífico S.A.
Subsequently, on December 29, 2011, CPSAA
transferred to MCA Phosphates Pte Ltd. (MCAP)
30% of the Company’s shares. It is worth noting
that MCAP is a company organized under the
laws of Singapore, 70% of whose capital is
owned by the Mitsubishi Corporation and the
remaining 30% by Zuari Agro Chemicals Limited.
On December 29, 2011, Fosfatos del Pacífico
S.A. entered into an Off-Take Agreement
whereby the Mitsubishi Corporation undertakes,
inter alia, to market 2 million metric tons of
Phosphate Rock a year over a 20-year period.
It would also be possible for it to market an
additional 500 thousand tons intended to supply
the domestic market.
On the industrial side, FLSmidth and Jacobs
(USA) began carrying out pilot tests in January
2012 and completed them in May 2012. These
tests provided confirmation of the results of the
laboratory tests previously carried out.
In February 2012, an international invitation
to tender was held for the development of the
Project’s “Basic Engineering” and “Feasibility
Study.” In May 2012, the Basic Engineering
was awarded based on specialization. The
companies that developed the engineering
for each component were: Golder Associates
for the mine study, the consortium FLSmith
Minerals-Jacobs-Golder Associates for the plant
study, Berenguer Ingenieros for the port study,
and Pepsa Tecsult (Aecom) for the electrical
transmission and water supply study.
The project’s chemical and metallurgical
laboratory, located within Bayóvar concession
No. 9, was inaugurated in April 2013. This
laboratory is equipped with the latest equipment
needed to analyze minerals and the different
products derived from the processing. It will
also allow to obtain more detailed information
regarding the quality of the final product and its
metallurgical recovery.
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The Environmental Impact Assessment (EIA)
Certificate was granted in March 2014 for all
of the project’s components (plant, mine, port,
sea water pipeline, industrial road, electric
transmission line, etc.). The EIA approval has the
favorable opinion of the Ministry of Energy and
< content
Main
Subsidiaries
Mines, the Ministry of Agriculture and Irrigation,
the Ministry of Environment, the Ministry of
Production, the Ministry of Transportation and
Communications, and the Directorate General
of Captaincies and Coast Guard of Peru, the
National Service of Areas Protected by the
Peruvian State, the Peruvian National Service for
Meteorology and Hydrology the National Water
Authority, the Regional Government of Piura,
among others. Moreover, in August 2014 the
Ministry of Culture granted the Certificate of the
Non-Existence of Archaeological Remains (CIRA)
in the project’s areas of influence.
In May 2014, Golder Associates updated the
magnitude of phosphate rock mineral resources
to 546.1 million dry metric tons with 18.2%
of P2O5. Moreover, the company certified
the services pursuant to JORC and NI 43101
standards, including the metallurgic information
obtained from the diamond drilling samples of
all deposit layers. The estimated reserves that
guarantee the first 20 years of operation amount
to 108.1 million dry tons of ore with 17.8%
of P2O5 that will allow to obtain 50.5 million
dry tons of concentrate with 29.3% of P2O5.
Subsequently, as a result of the calcination
process, the final product will reach 30% of
P2O5 and a recovery of approximately 75%,
according to the optimization and variability
laboratory tests and pilot tests carried out by
FLSmidth and Jacobs. Also, in 2014 we reached
out to the German company RWE to assess the
application of the continuous mining method.
Such engineering studies shall conclude during
the first half of 2015.
Value engineering was performed in mid-2014 to
identify improvement opportunities in the design,
construction and operation of the project. To this
end, major internationally renowned engineering
companies (Hatch, Ausenco and WorleyParsons)
were hired based on their experience and
knowledge in the different areas. The main
scopes of such value engineering include the
change of mining method, from conventional
mining to a continuous mining system, making
the mining process more efficient; compaction
In March 2014 the
project obtained the
Environmental Impact
Assessment Certificate
for all of the project’s
components.
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processing plant without reducing production
capacity; and the reduction of the size of the
port in accordance with the project’s capacity
requirements.
The project is currently in the process of
incorporating the findings of such value
engineering from a conceptual level to a Basic
Engineering level, allowing to size the project
more precisely. WorleyParsons was hired by
< content
Main
Subsidiaries
way of an international invitation to tender with
the purpose of supervising the implementation
and integrating the engineering into the different
project components. It thus became the “Project
Management Consultant,” role that it shall
exercise from the engineering development to
the procurement, construction and operation
start-up stages.
SALMUERAS SUDAMERICANAS S.A.
Salmueras Sudamericanas S.A., which was
founded by Cementos Pacasmayo S.A.A.
(74.9%) and QUIMPAC S.A. (25.1%), is
developing the brine project in the Sechura
desert, which includes the Cañacmac, El Tablazo
and Ñamuc concessions that together cover an
area in excess of 136,000 hectares.
The projects consists in extracting brine (salt
water with a high concentration of potassium,
magnesium, bromine, among other minerals)
from the subterranean deposit, and then process
it to obtain fertilizers, balanced feed and other
industrial raw materials. Expected production
includes Potassium Sulfate, Magnesium Sulfate,
Magnesium Hydroxide and Oxide, Dicalcium
Phosphate and liquid Bromine.
The following main permits were obtained in 2014:
In February 2014, the directorial decision
was granted by the National Water Authority
(ANA) and in July 2014 the Ministry of Culture
granted the Certificate of the Non-Existence of
Archaeological Remains (CIRA).
Finally, in December 2014 the Environmental
Impact Assessment (EIA) was approved, grated
by the Ministry of Production.
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< content
Completed
Projects
The main projects implemented in 2014 include the following:
In Pacasmayo
• Operational efficiency of line 3, made up of crude 2, coal mills and
furnace 3.
• Enhancement of the plant maintenance management system
• Improvement of the de-dusting system
• Replacement of assets
• Update of main equipment
• Strategic spare parts for cement final milling and bagging sections.
• Update of the furnace 3 automation system (SCADA)
• Reinforcement of overhead cranes for the supply of raw materials to
crude and cement mills
• Implementation of an operations automated system
• Implementation of scanners to control furnace 3 combustion head
and shell
• Investment in quarries, crown ditches and discard stockpiles.
In Rioja
• Procurement of strategic spare parts for the
new production line inaugurated in 2013, to
consolidate its reliability.
• Investments in the construction of new
warehouses to store bulk raw material,
adapting to the environmental regulations
in force.
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>4
Best
Practices
For the fifth consecutive year, Cementos
Pacasmayo was selected as part of the Good
Corporate Government Index (IGBC). Additionally,
during 2014 the Company was awarded with a
special recognition for obtaining the highest
sustained growth in corporate governance in
the last 5 years.
< content
información
general
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Company Assets
Payment of Dividends
Company stock is represented
by 531,461,479 shares at a
nominal value of S/. 1.00 each,
while the investment shares of
the company are represented by
50,503,341 shares of the same
nominal value.
In a meeting of the Board of
Directors on October 23, 2014, it
was agreed to distribute dividends in
the amount of S S/. 116,392,920.60,
at S/. 0.20 per share, charged
against cumulative results.
Consolidated Financial
Statements
From the Board of
Directors
The results for financial year 2014, the
cash flow and general balance sheet
as of December 31, 2014, appear
in the documents attached to this
report. The aforementioned financial
statements of Cementos Pacasmayo
S.A.A. and its subsidiaries were
audited by Paredes, Zaldívar, Burga y
Asociados, member firm of EY (former
Ernst&Young).
The Board of Directors expresses
its gratitude both to shareholders
for the trust vested in it and to
Management, executives and
employees in general for their
valuable collaboration.
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< content
Declaration of
Responsibility
The present document contains information that is true and adequate with respect to the development of the business of Cementos Pacasmayo
S.A.A. and its subsidiaries during 2014. Without prejudice to the responsibility attaching to the issuer, the signatories make themselves responsible
for its content in accordance with applicable legal provisions.
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Humberto Nadal del Carpio
CEO
manuel Ferreyros Peña
CFO
Alfredo Tong Lam
Accountant
Lima, February 13, 2015
It is noted that in the last 2 years there have been no changes in the main accounting official in charge at Cementos Pacasmayo S.A.A.
< content
Business
General Information
Business Name: Cementos Pacasmayo S.A.A.
Address: Calle La Colonia 150, Urbanización El
Vivero, Santiago de Surco, Lima 33, Perú
Telephone: (511) 317-6000 Fax: (511) 317-6099
Incorporation and registration: Notarized
Document dated December 10, 1998, issued
by Notary Public Dr. Gustavo Correa Miller,
registered in entry No. 11076338 of the Registry
of Corporate Bodies.
Group: Cementos Pacasmayo S.A.A. belongs
to the Inversiones Pacasmayo S.A. (IPSA)
conglomerate. This conglomerate is also known
as the “Grupo Hochschild” and consists mainly
of the following companies:
Business Name
Corporate Purpose
Hartsdale Capital INC
Entrepreneurial activities
Farragut Holdings INC
Entrepreneurial activities
Inversiones ASPI S.A.
Investments
Cementos Selva S.A.
Manufacture and marketing of cement
Distribuidora Norte Pacasmayo S.R.L.
Distribution and marketing
Dinoselva Iquitos S.A.C.
Distribution and marketing
Empresa de Transmisión Guadalupe S.A.C.
Energy transmission
Acuícola Los Paiches S.A.C.
Fishing and the development of fish farms
Fosfátos del Pacífico S.A.
Mining activities in the manufacture of fertilizers
and chemical products
Salmueras Sudamericanas S.A.
Mining activities and the manufacture of salt,
fertilizers and chemical products
Calizas del Norte S.A.C.
Mining activities
Hochschild Mining PLC subsidiarias
Mining activities
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Business
Share structure:
The participation of the ten largest shareholders
expressed in percentages is as follows:
Share Classes Created and Issued:
Common and Investment
1.
52.63 %
2.
19.85 %
3.
4.34 %
4.
3.96 %
5.
2.66 %
6.
1.85 %
7.
1.71%
8.
1.21 %
9.
1.12 %
10.
0.69 %
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Company stock of the issuer is represented by
531,461,479 common shares, fully subscribed to
and paid for, whose nominal value is one new sol
per share, and which represent 91.32% of the
totality of the shares in circulation.
Investment Shares correspond to 50,503,124
shares, whose nominal value is one new sol per
share, and which represent approximately 8.68%
of the totality of the shares in circulation.
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Shareholders with a participation greater than 5% of company stock:
Name and/or Business Name
Participation
Nationality
Conglomerate
Inversiones ASPI S.A.
52.63%
Peruvian
Hochschild - Pacasmayo
Jpmorgan Chase Bank N.A. FBO
Holders of (ADRs)
19.85%
U.S.A.
*
The composition of common shares underlying the ADRs is listed in the share register and the name of the depository, “J.P.MORGAN CHASE BANK, NA.
FBO HOLDERS OF ADRS.” The total number of ADRs issued as of the end of December 2014 is 21’100,121 (equivalent to 105’500,605 common shares).
< content
Business
Shares with a Right to Vote
Holding
Number of Shareholders
Percentage of Participation
7,303
10.66%
7
16.86%
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72.48%
7,312
100.00%
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Number of Owners
Percentage of Participation
447
11.98%
Between 1%‒5%
2
2.31%
Between 5%‒10%
5
40.39%
Less than 1%
Between 1%‒5%
Between 5%‒10%
Greater than 10%
Total
39
Investment Shares
Holding
Less than 1%
Greater than 10%
Total
2
45.32%
456
100.00%
< content
Business
Description of Operations and Development
Corporate purpose: The purpose of the Company is to devote itself to the development and manufacture of cements, quicklime, aggregates, cement
blocks and bricks, pre-mixed concrete and other construction materials, their derivatives and related products, including their marketing and sale, in
the Republic of Peru and overseas. Likewise, the Company may carry out all manner of mining exploration, prospecting, development, exploitation,
commercialization, general labor, benefit and transportation activities; it may also perform all activities concerning the transportation of products in
general, materials and toxic waste (including chemical and controlled goods), and enter into all acts and contracts deemed appropriate for fulfilling its
corporate purpose, covering activities regarding the purchase, sale, construction, leasing and administration of movable and immovable property, and
carry out all civil and commercial acts that are deemed appropriate, including participation in other companies in the Republic of Peru and overseas.
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CIIU: 2694
Term: Undefined
< content
Evolution of
Operations:
1949
Founding of the Compañía Nacional
de Cementos Portland del Norte.
1957
Start of commercial activities of the
Compañía Cementos Pacasmayo S.A.
with the installation of the first clinker
production line completed in 1958.
Clinker production capacity stands at
110,000 metric tons/year.
1966
Completion of the installation of the
second production line.
Clinker production capacity rises to
303,500 metric tons/year.
1977
1998
Cement factory in the province of Rioja
acquired from the regional government
of San Martín.
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New company created, called Cementos
Pacasmayo S.A.A., resulting from the
amalgamation of Cementos Norte
Pacasmayo S.A. and Cementos Rioja y
Cordasa.
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Installation of line 3.
Clinker production capacity rises to
720,000 metric tons/year (not including
line 1).
1994-1995
Thanks to technological improvements,
line 3 production capacity is expanded
to 690,000 metric tons/year, with the
capacity of the plant reaching 840,000
metric tons/year.
2000
Installation of a new vertical mill in the
Pacasmayo plant, which increases
milling capacity.
Cementos Selva S.A. company
incorporated.
< content
titulo grande
Evolution
of
capítulo
Operations:
2001
Capacity of the Selva plant expanded
to reach 120,000 metric tons/year.
2007
Installation of three vertical kilns in the
Pacasmayo plant.
2008
Installation of a fourth vertical kiln in
the Pacasmayo plant.
Clinker production capacity rises to
1,241,000 metric tons/year.
Installation begins of a new vertical
kiln at the Selva plant with a
production capacity of 80,000 metric
tons/year.
2009
Construction of a new cement silo
with a capacity of 11,000 metric
tons of cement.
2010
Installation of a new cement mill.
The milling capacity of the
Pacasmayo plant increases
by 1,200,000 metric tons/year.
Project carried out to convert
the Waelz kiln to produce lime,
in addition to zinc.
2011
Installation begins of two new vertical
kilns in the Pacasmayo plant.
Construction starts on a new
production line in the Rioja plant to
increase installed capacity by 200,000
metric tons of cement per year to reach
440,000 metric tons/year.
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Incorporation of Salmueras
Sudamericanas S.A. together with
Quimpac, the leading producer of
chemical products in Peru, to develop
brine products in our combined areas
in the coastal zone of Piura in the
North of Peru.
Sale in December of a minority holding
in the company stock of Fosfatos del
Pacífico S.A. to a subsidiary of the
Mitsubishi Corporation in order to
develop the phosphate deposits in the
Bayóvar fields in northwestern Peru.
< content
titulo grande
Evolution
of
capítulo
Operations:
2012
Cementos Pacasmayo S.A.A. lists
its shares on the New York Stock
Exchange, becoming the first
Peruvian cement company to be
listed on this market.
Increase in production capacity of
vertical kiln no. 2 which together with
the installation of two new horizontal
kilns increases installed capacity to
1,500,000 metric tons of clinker.
Expansion of new production line
in the Cementos Selva plant for a
trial period.
Project launched for the development
of a new cement plant in Piura.
2013
Cementos Pacasmayo S.A.A. issues
10-year international bullet bonds for
US $300 million, with a coupon rate
of 4.5%. The international rating given
by Fitch and S&P was BBB- and BB+
respectively. The placement took place
on February 1, 2013, and it generated a
demand of more than US $2.5 billion.
Environmental Impact Study approval
is obtained for the construction of
the new cement plant in Piura and
construction commences.
2014
In March 2014, the Environmental
Impact Assesment (EIA) for the
Phosphate Project was approved.
This is an important milestone in the
development of the project and reflects
the Company’s commitment to its
execution.
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Cementos Pacasmayo was awarded
with a special recognition from the
Bolsa de Valores de Lima (BVL) for
obtaining the highest sustained growth
in corporate governance in the last
5 years. Additionally, the Company
continues to be a part of the Good
Corporate Governance Index (IBGC).
In December 2014, the Environmental
Impact Study for the Brine Project was
approved by the Ministry of Production.
< content
Business
Description of the Sector:
There are seven cement-producing facilities in
this country. Although there is no great difference
between these concerning cost of production,
producers have competed largely on the
periphery of clearly defined market areas owing
to the high costs of transport.
The Company’s main production plant is located
in the city of Pacasmayo, 96 km north of the city
of Trujillo.
In 1998 operations began at the production
facility located in the city of Rioja, Department
of San Martín, which is currently owned by the
subsidiary Cementos Selva S.A.
The Company also owns the subsidiaries
Distribuidora Norte Pacasmayo S.R.L. and
Dinoselva Iquitos S.A.C., together with a network
of affiliates that distribute a significant proportion
of its products.
Cementos Sur S.A., whose plant is located near
Juliaca, Puno Department, mainly serves the
Andean area in the south of Peru.
The other producers/importers of cement in
Peru are:
Caliza Cementos Inca, located in Cajamarquilla,
serves mainly the Lima area.
UNACEM S.A.A., who has 2 plants. The main
one is located on the outskirts of Lima and it
is the largest manufacturer of cement in Peru.
The second one is located in the Department
of Junín, and mainly serves the central area of
the country and a portion of the Departments of
Loreto and Ucayali.
There are, in addition, cement importers who
essentially supply the cities of Lima and Iquitos.
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Yura S.A., located near Arequipa, mainly serves
the South of Peru and the areas bordering
Bolivia and Chile.
< content
Business
Net Sales of Goods (in thousands of soles as of December 31, 2014).
Market
2014
2013
1,242.58
1,239.69
Sales of Goods
- National
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Products by Greatest Volume of Sale
Product
% of sales — 2014
% of sales — 2013
Cement, concrete and blocks
87.3
88.9
Construction supplies
7.7
8.3
Lime
4.9
2.6
Others
0.1
0.2
< content
Business
Investment Plans or Policies
The main projects completed in 2014 include
the following:
In Pacasmayo
Investments in 2014 were mainly focused on
the operating efficiency of the different lines of
production; especially that of line 3 consisting of:
el crude 2, coal mills and furnace 3. Moreover,
the plant maintenance management system
enhancement project was implemented;
improvements were made to the de-dusting
systems in some critical sections, assets were
replaced and key equipment was updated.
Furthermore, we continued with the supply of
strategic spare parts for cement final milling and
bagging sections.
The furnace 3 automation system (SCADA) was
updated, the operations automated control
system was implemented, the overhead crane
systems for the supply of raw material to the
crude and cement mills were reinforced, and the
scanners to control the combustion head and
shell of furnace 3 were implemented.
Furthermore, we continued investing in quarries,
crown ditches and discard stockpiles for the
final disposal of residual material generated
by quarry operations, in compliance with the
legal commitments stated in our environmental
documents and closure plans.
In Rioja
Investments were focused primarily on the
procurement of strategic spare parts for the new
line of production inaugurated in 2013, aiming at
consolidating its reliability.
Moreover, investments were made for the
construction of new warehouses to store bulk
raw materials, adapting to the environmental
regulations in force.
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With regard to the new cement plant in Piura, the
Project’s global accumulated progress in 2014
reached 75%, achieving a 60% progress in the
activities of construction and electromechanical
assembly, performed by the Cementos Piura
consortium made up of JJC Contratistas
Generales S.A., SSK Montajes e Instalaciones
S.A.C. and JJC Schrader Camargo S.A.C.
< content
Business
Principal Assets
Description
2014
2013
Machinery and Equipment
622,201
607,640
Buildings and Installations
230,041
236,360
Land
217,808
216,804
67,629
74,106
805,929
300,788
10,252
10,573
5,514
5,495
31,942
28,456
Transportation Units
Work in Progress and Units Receivable
Computer Equipment and Tools
Furniture and Appliances
Mining Concessions
Mine Development Costs
Total
69,660
56,889
2,060,976
1,537,111
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< content
Business
Human Resources
The number of personnel and staff has varied as shown below (data as of December 31 each year):
Dec. 2014
Dec. 2013
Executives
33
33
Employees
980
1,074
Workers
485
565
TOTAL
1,498
1,672
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On the other hand, as of December 31, 2014 the permanent and contracted personnel of the company was as follows:
Permanent
Temporary
Executives
31
2
Employees
658
322
Workers
372
113
TOTAL
1,061
437
< content
Business
Important Facts
In 2014, critical and key positions of the
organization’s staff were identified. This
identification is essential when managing
development and succession plans, with the
purpose of retaining talent and promoting
business continuity.
The Programa de Ejecutivo Cumbre (“Summit
Executive Program”), a program intended for
Grupo Pacasmayo Executives, was launched
aiming at ensuring a uniform leadership style
that will allow to maintain a productive work
environment.
Judicial, Administrative
or Arbitration Proceedings
An e-learning platform (E-Pacasmayo) was
launched on which various courses can be
accessed by all employees. Training rooms
were set-up at the plants so that this benefit
could also be accessed by workers.
The worker skills and potential assessment
process was standardized by implementing
the “Nine Box” tool. This allowed to identify
potential workers.
As of December 31, 2014, and as of the issue
of this report, we have no knowledge of any
proceedings that might have a significant impact
on operational results or the financial position of
the Company.
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>4
Commitment
Our commitment with the country and our
area of influence is to create and strengthen
a socially favorable environment, prioritizing
our social investment in health, education and
local development, coordinating with other
groups of interest to contribute to sustainable
development , and therefore to the continuity
and growth of our operations and projects.
< content
Administration
Directors:
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Name
Position
Director since
Eduardo Hochshild Beeck
Chairman
03.04.1991
Roberto Dañino Zuñiga
Vice-Chairman
10.06.2008
Rolando Arellano Cueva
Director
30.03.2011
Raimundo Morales Dasso
Director
27.03.2008
Humberto Nadal Del Carpio
Director
27.03.2008
Moisés Naím
Director
19.04.2013
Hilda Ochoa-Brillembourg
Director
10.10.2011
Felipe Ortiz de Zevallos
Director
25.03.2014
Dionisio Romero Paoletti
Director
22.03.2005
Robert P. Bredthauer
Alternate Director
28.03.2003
Manuel Ferreyros Peña
Alternate Director
27.03.2008
Juan Incháustegui Vargas*
Alternate Director
04.08.1995
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*Mr. Inchaustegui resigned January 8, 2015
< content
Administration
Directors:
Eduardo Hochschild Beeck
Mr. Hochschild has been a Director since
April 1991 and is currently Chairman of the
Board. He holds a Mechanical Engineering
degree from Tufts University, Boston, United
States. Mr. Hochschild is also the President
of Hochschild Mining plc, Inversiones ASPI
S.A. and the Board of Trustees of UTEC and
TECSUP, Director of Banco de Crédito del
Perú, El Pacífico Peruano-Suiza Compañía de
Seguros y Reaseguros, Fosfatos del Pacífico
S.A., Salmueras Sudamericanas, Sociedad de
Comercio Exterior del Perú (COMEX Perú), and
of the National Society of Mining, Petroleum and
Energy (Sociedad Nacional de Minería, Petroléo
y Energía). Mr. Hochschild is also an expert
consultant of the Economic Counsel of the
Episcopal Conference.
Roberto Dañino Zapata
Mr. Dañino has been a Director since 1995. In
July 2001 he resigned from the Board of Directors
to take office as Prime Minister of the Peruvian
Government, before rejoining the Board in June
2008. He is an attorney-at-law graduated from
the schools of Law of Harvard University and
Pontificia Universidad Católica del Perú. He has
served as Ambassador of Peru to the United
States and Senior Vice-President and General
Counsel of the World Bank. He has also been
Partner and Chairman of the Latin American
Practice at Wilmer Cutler & Pickering, Washington
D.C. (now Wilmer Hale). He is currently ViceChairman of the Board of Directors of Hochschild
Mining plc, and Chairman of Fosfatos del Pacífico
S.A. In Addition, he is Independent Director of
Inversiones Centenario, PetroNova, Results for
Development, LUMNI, Open Society Foundation,
and ACCION International, among others.
Rolando Arellano Cueva
Mr. Arellano has been a Director since March
2011. He holds a PhD in Business Administration
from Grenoble University, France, a Master’s in
Business Administration from ESAN and a degree
in Psychology from Pontificia Universidad Católica
del Perú. He is Chairman of the Board of Arellano
Investigación de Marketing S.A., a company with
operations in various Latin American countries, He
is a professor at Centrum Católica (Universidad
Católica del Peru Business School) and has
taught at numerous universities in the region. He
was Chairman of the Marketing Department and
Director of the Master in International Business
Program at Laval University, Quebec, Canada,
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Chairman of the Peruvian Marketing Society and is
the author of 17 books on business and marketing
in emerging economies. Independent Director.
Raimundo Morales Dasso
Mr. Morales has been a Director since March
2008. He holds a Bachelor’s degree in Economics
and Business Administration from Universidad
del Pacífico and a Master’s in Business
Administration from Wharton Business School,
University of Pennsylvania, Untied States. Mr.
Morales was the Chief Executive Officer of
Banco de Crédito del Perú from November 1990
through March 2008. Currently, he is Chairman
of the Board of Salmueras Sudamericanas S.A.
and Atlantic Security Bank, Vice Chairman of the
Board of Credicorp Ltd., Banco de Crédito del
Peru and El Pacífico Peruano-Suiza Compañía
de Seguros y Reaseguros. He is a member of
the Board of Directors of Pacífico Vida Seguros,
Alicorp S.A.A., Grupo Romero, Cerámica Lima
S.A., Trébol Corporación Cerámica S.A., JJC
Contratistas Generales and a Board member of
the Peruvian Institute of Economics.
Humberto Nadal Del Carpio
Mr. Nadal joined our company as Corporate
Development Manager in June 2007 and has
served as our Director since March 2008 and
Chief Executive Officer since April 2011. He has a
Bachelor’s degree in Economics from Universidad
del Pacífico and a Master’s degree in Business
Administration from Georgetown University. He
is the representative of Cementos Pacasmayo
in the General Management of IPSA, Fosfatos
del Pacífico S.A. and Salmueras Sudamericanas
S.A. He has also been Chairman of the Board
of Directors of Fondo Mivivienda. In April 2006,
he joined Compañía Minera Ares S.A.C. (a
subsidiary of Hochschild Mining plc) as Corporate
Development Manager. Mr. Nadal has also served
as Business, Administration and Finance Manager
ot the Instituto Libertad y Democracia and Chief
Executive Officer at Socosani S.A.
Moisés Naím
Moises Naím has been a Director since April
2013. He is currently a Distinguished Fellow
at the Carnegie Endowment for International
Peace in Washington, D.C. He is author of more
than ten books on international economics
and politics, and one of the most widely read
columnists in the Spanish language. His weekly
columns are published by newspapers from
Latin American and from around the world.
His most recent book, El fin del Poder (“The
End of Power”) has been translated into 10
languages. In 2011 he was awarded the Ortega
y Gasset prize and in 2013 Naím was included
in British magazine Prospect’s list of the world’s
most renowned intellectuals. In 2014 he was
recognized as one of the most influential thinkers
by the Swiss Gottlieb Duttweiler Institute
for The End of Power. Naím was the editor
of the Foreign Policy magazine for fourteen
years. During this time he won the national
excellence prize granted by the Association
of American Publishers. Naím’s public service
includes his tenure as Venezuela’s Minister of
Trade and Industry in the early 1990s, director
of Venezuela’s Central Bank, and executive
director of the World Bank. He is the founder
and Chairman of the Board of both the Group
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of Fifty, and member of the board of directors
of the National Endowment for Democracy
and Open Society Foundations. Moisés Naím
received his master and doctorate degree from
the Massachusetts Institute of Technology, and
lives in Washington, D.C.
Hilda Ochoa-Brillembourg
Mrs. Ochoa-Brillembourg was appointed as
a Director of Cementos Pacasmayo S.A.A. in
October 2011. She holds a Bachelor of Science
degree in Economics from Universidad Católica
Andres Bello of Venezuela, a Master’s degree
in Public Administration and is a Business
Administration PhD candidate from Harvard
Business School. She is the founder, and
since 1987, President and Executive Director,
of Strategic Investment Group and a group
of affiliated investment management firms. In
2014 she was appointed Chairperson of the
Board of Directors. From 1976 to 1987, she
was Chief Investment Officer of the Pension
Investment Division at the World Bank. Mrs.
Ochoa- Brillembourg is on the Board of Directors
of General Mills, where she is also a member of
the audit and public responsibility committees,
and McGraw-Hill, where she is also a member
of its audit and financial policy committees.
Independent Director.
development of Peru, and in 2011 the Ministry
of Economy and Finance awarded him with the
“Hipólito Unanue” award for his contributions to
the country’s economic and financial development.
Felipe Ortiz de Zevallos
Mr. Ortiz de Zevallos studied at the Universidad
Nacional de Ingeniería in Lima, at the University of
Rochester in New York and at Harvard Business
School. He is the founder and chairperson of
the Grupo de Apoyo since 1977. He has served
as Ambassador of Peru to the United States
(2006 - 2009) where he was responsible with
the US Congress’ approval of the Free Trade
Agreement between both countries. He has been
a full professor at Universidad del Pacifico and
served as said university’s President from 2004 a
2006. He is currently a board member of various
companies and non-profit organizations. He has
received numerous awards, such as the IPAE
Award in 1990, the Journalism Jerusalem Prize in
1998 and the Manuel J. Bustamante de la Fuente
Award in 2008. In 2009, the Lima Chamber of
Commerce paid tribute to Mr. Ortiz de Zevallos
for this contributions to the social and economic
Dionisio Romero Paoletti
Mr. Romero has been a Director since March
2005. He holds a degree in Economics from
Brown University and a Master´s degree
in Business Administration from Stanford
University. He is the Chairman of the Board
of Credicorp and Banco de Crédito del PerúBCP, and the Executive Chairman of Credicorp
since 2009, and Board Director of BCP since
2003, and was appointed Vice Chairman in
2008 and Chairman in 2009. He is also the
Chairman of the Board of Banco de Crédito
de Bolivia, Pacífico Peruano Suiza Cía. de
Seguros y Reaseguros S.A., El Pacífico Vida
Cía. de Seguros y Reaseguros S.A., Alicorp
S.A.A., Ransa Comercial S.A., Industrias del
Espino S.A., Palmas del Espino S.A., Agrícola
del Chira S.A., among others. Furthermore, he
is Vice-Chairman of the Board of Inversiones
Centenario S.A. and Director of Banco de
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Crédito e Inversiones - BCI, and Hermes
Transportes Blindados S.A.
Robert Patrick Bredthauer
Mr. Bredthauer has been an alternate director
since March 2003. He has a degree in Business
Administration from Hochschule St. Gallen and
a commerce degree from the École Supérieure
de Commerce, La Neuveville, and the École
Supérieure de Commerce, Lausanne, both in
Switzerland. Since 1976, he acted as VicePresident of Finance and Executive VicePresident of Cemento Nacional C.A. (Guayaquil,
Ecuador) and prior to that was the regional
Controller for Holderbank Management and
Consulting in Nyon, Switzerland. Independent
Alternate Director.
Manuel Ferreyros Peña
Mr. Ferreyros has been an alternate director
since March 2008 and our Chief Financial Officer
since January 2008. He is an alternate member
of the Board of Directors of Fosfatos del Pacífico
S.A. Mr. Ferreyros has a Bachelor´s degree in
Business Administration from Universidad de
Lima, a Multinational MBA at the Adolfo Ibañez
School of Management, Miami and a Master’s
in Business Administration from The College of
Insurance in New York. Mr. Ferreyros has pursued
the Advanced Management Program at Instituto
Centroamericano de Administración de Empresas
- INCAE and the CEO Management Program
at Kellogg University, among others. Prior to
joining Cementos Pacasmayo, Mr. Ferreyros was
Chief Executive Officer of La Positiva Seguros y
Reaseguros. Alternate Director.
of the Republic of Peru from 1990 to 1992. He
was the Chief Executive Officer of Electroperú
S.A., President of Asociación Promotora
TECSUP and as President of the Academy
of Engineering, of which he is still a member
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Juan Incháustegui Vargas
Mr. Inchaustegui was director since August
1995. He has a degree in Mechanical and
Electric Engineering from Universidad Nacional
de Ingeniería and he has attended the Advanced
Management Program at the Universidad
de Piura. Mr. Inchaustegui was the Peruvian
Minister of Energy and Mines from March 1984
to July 1985, the Minister of Industry, Tourism,
Integration and Trade Negotiations from February
to July 2001, and he also served as a Senator
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and is its representative in the Innovation for
Competitiveness Project at the National Science
and Technology Council (CONCYTEC).
Management Team
Board Committees
Executive Committee
Our Executive Committee is mainly responsible
for (i) supervising and supporting our
management in executing the resolutions passed
by our board of directors, (ii) executing the
strategy approved by our board of directors, (iii)
meeting short-term and medium-term goals, as
well as designing action plans to meet such goals
in accordance with the long-term strategy and
goals approved by our board of directors, (iv)
approving agreements or transactions involving
amounts greater than US$3 million but less than
US$20 million, (v) monitoring compliance with
the annual budget and approving any significant
deviations from approved levels of working
capital, (vi) making strategic decisions that do not
rise to the level of a full board approval, and (vii)
approving and executing new projects in amounts
up to US$20 million.
Audit Committee
The audit committee is responsible for reviewing
our financial statements; evaluating our internal
controls and procedures, and identifying
deficiencies; the appointment, compensation,
retention and oversight of our external auditors.
Additionally, it is responsible for informing our
board of directors regarding any issues that arise
with respect to the quality or integrity of our
financial statements, our compliance with legal
or regulatory requirements, the performance and
independence of the external auditors, or the
performance of the internal audit function; and
overseeing measures adopted as a result of any
observations made by our shareholders, directors,
executive officers, employees or any third parties
with respect to accounting, internal controls
and internal and external audit, as well as any
complaints regarding management irregularities,
including anonymous and confidential methods
for addressing concerns raised by employees.
Antitrust Best Practices Committee
The Antitrust Best Practices Committee is
responsible for informing our employees
about our competition best practices and for
monitoring compliance with such practices,
including compliance with antitrust regulations.
Corporate Governance Committee
The Corporate Governance Committee is
responsible for assisting the Board on its
oversight of the Director nomination and
Committee assignments, as well as the Board
and CEO successions. Similarly, it is responsible
for assisting in the implementation of the
committee and board self-assessment surveys
and the review of governance principles.
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Percentage of Total Remuneration Received by Members of the Board of Directors and the
Management Team with Respect to Gross Revenue
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2014
2013
2012
Directors
0.4
0.5
0.4
Management
1.7
1.8
1.8
Total
2.1
2.3
2.3
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Management Team
Chief Executive Officer
Humberto Reynaldo Nadal Del Carpio
See “List of Directors”
Chief Financial Officer
Manuel Ferreyros Peña
See “List of Directors”
General Counsel
Javier Durand Planas
Javier Durand joined the Hochschild Group in
1994. He has been our General Counsel since
2008 and has previously held the title of General
Counsel at Hochschild Mining plc. Mr. Durand
holds a Law degree from Universidad de Lima
(Peru), and a Master’s in Business Administration
from Universidad del Pacífico (Peru). Among
other studies, he has also completed the
Management Program for Lawyers and
Corporate Governance and Performance
Program at the Yale School of Management.
Mr. Durand is also currently a board member
of Salmueras Sudamericanas S.A., Inversiones
ASPI S.A. and Cementos Selva S.A., and the
Board of Trustees of UTEC.
Vice-President, Cement Business
Carlos Julio Pomarino Pezzia
Mr. Pomarino is our Vice President Cement
Business since April 2009. He has a degree
in Economic Engineering from Universidad
Nacional de Ingeniería and a Master’s in
Business Administration from Adolfo Ibañez
School of Management and ESAN and
pursued the Advanced Management Program
at the Universidad de Piura. He served as
Commercial Officer of the Company from
2002 to 2009 and as Chief Executive Officer
of Distribuidora Norte Pacasmayo S.R.L. from
1998 to 2009. Prior to joining the Company,
Mr. Pomarino worked as Administration and
Finance Manager at Comercializadora de
Alimentos S.A. and as Chief Financial Officer at
Fábrica de Tejidos San Jacinto S.A.
Corporate Development Manager
Joaquín Larrea Gubbins
Mr. Larrea has been our Corporate Development
Manager since June 2011. He has a degree in
Business Administration from Universidad de
Lima and a Master’s in Business Administration
from the Kellogg School of Management. In
the past, Mr. Larrea worked as Corporate
Development Director of General Electric for
Peru, Ecuador and Bolivia. He served as our
Zinc Business Manager for a year and as our
Corporate Finance Head for five years.
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Corporate Social Responsibility Manager
Carlos Paúl Cateriano Alzamora
Mr. Cateriano has been our Corporate Social
Responsibility Manager since June 2012.
Previously, he was our Human Resources
Manager from 2006 to 2012 He studied in
Mechanical Engineering at the Pontificia
Universidad Católica del Peru and has pursued
different studies in the Advanced Management
Program at the Universidad de Piura. Prior to
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joining our company, Mr. Cateriano worked as
Human Resources Deputy Manager at Banco
Wiese Sudameris S.A. (acquired by Scotiabank
Perú S.A.A.) from 1999 to 2006. In addition,
he has worked as Head of Training at Banco
Santander Perú S.A., and as a consultant at
Polimeros y Adhesivos S.A.
Engineering and Infrastructure Manager,
Cement Business
Rodolfo Ricardo Jordán Musso
Mr. Jordan has been our Engineering and
Infrastructure Manager since January 2015.
Previously he was Industrial Development
Manager. He has a degree in Civil Engineering
from Universidad Católica del Perú and
pursued an Advanced Management Program
at the Universidad de Piura. Prior to joining the
Company he served as Chief Executive Officer
of the Mexican affiliate of Graña & Montero
Ingenieros Consultores. From 2007 through 2009
he served as Marketing Manager of Distribuidora
Norte Pacasmayo S.R.L.
Engineering and Projects Manager, Cement
Business
Juan Guillermo Teevin Vásquez
Mr. Teevin has been our Engineering and Projects
Manager for the Cement Business since June
2012. He has a degree in Mechanical Engineering
from Universidad Nacional de Ingeniería and
has pursued different studies in the Advanced
Management Program at the Universidad de
Piura, as well as Multinational MBA at the Adolfo
Ibañez School of Management, Miami. Mr. Teevin
was Operations Manager for the Company from
June 2005 to May 2012.
Operations Manager, Pacasmayo and Rioja
Cement Plant
Hugo Pedro Villanueva Castillo
Mr. Villanueva has been our Operations
Manager for the Pacasmayo and Rioja cement
plant since January 2012. Previously he was
Operations Manager for Cementos Selva S.A.
for over 9 years. Furthermore, Mr. Villanueva
has worked at our Company for over 20 years,
holding different positions. Mr. Villanueva holds
a Master’s degree in Business from EGADE
and has taken coursework at the General
Management Program at PAD, Universidad de
Piura and Program for Senior Management at
INCAE in Costa Rica.
Manager for the Piura Project
Alfredo Romero Umlauff
Mr. Romero is our Manager for the Piura
Project since May 2013. He has over 36 years
of experience in the construction industry as
well as in the areas of Project Management,
Cost and Planning and Management. He is
a Civil Engineer by the Pontifica Universidad
Catolica del Peru, and has conducted several
studies in the Advanced Management Program
at the Universidad de Piura. Prior to joining our
company, Mr. Romero worked as Deputy CEO
at JJC Contratistas General, CEO of Metalúrgica
Peruana S.A, CEO of Union de Concreteras S.A.,
among others. He has been a speaker at various
international conferences and co-authored
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publications related to the treatment of readymix concrete. In 2013 Mr. Romero was honored
with the Distinguished Graduate award by the
Alumni and Graduate Association of the PUCP
for his efforts in promoting and developing
single-family and multi-family housing projects
with integral reinforced concrete.
Supply Chain Manager
Diego Reyes Pazos
Mr. Reyes has been the Central Supply
Chain Manager since July 2013. He has
solid experience in the supply chain, project
development, design and implementation of
systems/processes and financial analysis.
He graduated with a degree in Business
Administration from the University of Lima and
received an MBA from the University of Piura.
Before joining our company, Mr. Reyes worked
as Operations and Finance Manager at Belcorp,
as Senior Business Process Expert for Latin
America at SAB Miller, Project Manager in the
Vice Presidency of Supply Chain at UCP Backus
& Johnston, among others.
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Financial
Information
a) Liquidity:
b) Capital and Financing:
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Liquidity ratios
2014
2013
Current ratio (Current assets / Current
liabilities)
5.17
9.0
Acid test (Cash — banks & accounts.
Receivable / Current liabilities)
3.45
6.6
The current ratio decreased from 9.0 in 2013 to 5.17 in 2014. This decrease
was primarily due to the decrease in cash for the implementation of the
Piura Project.
The acid test or ratio fell from 6.6 in 2013 to 3.45 in 2014, mainly due to the
decrease in cash for the implementation of the Piura Plant Project.
Debt-to-Equity Ratio
2014
2013
Total Liabilities / Total Assets
0.36
0.35
Total Net Assets / Total Assets
0.64
0.65
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The proportion of assets financed by third parties in 2014 remained similar
to that of 2013.
The 2014 Net Worth/Assets ratio remained similar to that of 2013.
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Financial
Information
c) Economic Results:
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Profit Ratios
2014
2013
Gross Margin
41.72%
42.22%
Operating Margin
24.19%
23.63%
Net margin
15.19%
12.28%
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The gross margin for 2014 decreased slightly with respect to 2013,
primarily due to a lower dilution of fixed costs in the concrete sector
as a consequence of lower production. The operating and net margins
increased in 2014 compared to 2013 mainly due to a reduction in operating
expenses as well as a loss resulting from the Exchange rate difference.
< content
Financial
Information
MONTHLY SHARE PRICES OF CEMENTOS PACASMAYO ON THE BOLSA DE VALORES DE LIMA
(BVL — LIMA STOCK EXCHANGE)
Common and Investment Shares:
Mnemonic: CPACASC1 – CPACASI1
CEMENTOS PACASMAYO S.A.A.
Variable Income
ISIN Code
Nemonic
Year - Month
PRICES 2014
Average Price S/.
Open S/.
Close S/.
Highest S/.
Lowest S/.
PEP239501005
CPACASC1
2014-01
6.35
5.46
6.50
5.30
6.04
PEP239501005
CPACASC1
2014-03
5.28
4.90
5.38
4.88
5.05
PEP239501005
PEP239501005
PEP239501005
PEP239501005
PEP239501005
PEP239501005
PEP239501005
PEP239501005
PEP239501005
PEP239501005
PEP239501006
PEP239501006
PEP239501006
PEP239501006
PEP239501006
PEP239501006
PEP239501006
PEP239501006
PEP239501006
PEP239501006
PEP239501006
PEP239501006
CPACASC1
CPACASC1
CPACASC1
CPACASC1
CPACASC1
CPACASC1
CPACASC1
CPACASC1
CPACASC1
CPACASC1
CPACASI1
CPACASI1
CPACASI1
CPACASI1
CPACASI1
CPACASI1
CPACASI1
CPACASI1
CPACASI1
CPACASI1
CPACASI1
CPACASI1
2014-02
2014-04
2014-05
2014-06
2014-07
2014-08
2014-09
2014-10
2014-11
2014-12
2014-01
2014-02
5.47
4.95
5.15
4.90
4.76
5.00
5.30
5.05
5.20
5.05
4.00
-
5.30
5.15
4.90
4.73
4.98
5.30
5.18
5.30
5.08
5.30
3.90
-
5.47
5.32
5.18
5.05
5.20
5.35
5.50
5.35
5.21
5.39
4.00
-
5.19
4.95
4.89
4.70
4.76
4.70
5.13
4.70
4.90
5.04
3.90
-
2014-03
3.40
3.40
3.40
3.40
2014-05
-
-
-
-
2014-04
3.10
3.10
3.10
3.10
5.34
63
5.19
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4.95
4.89
5.01
5.13
5.29
5.13
5.14
5.32
3.93
-
3.40
3.10
-
2014-06
2.80
2.80
2.80
2.80
2.80
2014-08
2.81
2.81
2.81
2.81
2.81
2014-07
2014-09
2014-10
2014-11
2014-12
2.75
-
-
2.50
2.50
2.80
-
-
2.50
2.50
2.80
-
-
2.50
2.50
2.75
-
-
2.50
2.50
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2.78
-
-
2.50
2.50
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Financial
Information
MONTHLY SHARE PRICES OF CEMENTOS PACASMAYO ON THE NEW YORK STOCK EXCHANGE (NYSE)
INFORMATION FOR FISCAL YEAR 2014 IN USD
ADRs
Mnemonic: CPAC
PRICES 2014
Year - Month
Open
USD
Close
USD
Maximum
USD
Minimum
USD
2014-1
11.79
9.58
12.38
9.19
2013-2
9.54
9.48
9.72
9.09
2013-3
9.34
8.76
9.54
8.50
2013-4
8.82
9.05
9.85
8.79
2013-5
9.01
9.08
9.20
8.55
2013-6
9.05
8.43
9.36
8.15
2013-7
8.45
8.91
9.93
8.24
2013-8
9.23
9.37
9.59
8.84
2014-9
9.30
8.96
9.56
8.82
2014-10
8.94
9.00
9.59
7.92
2014-11
9.07
8.48
9.08
8.33
2014-12
8.45
8.73
9.04
8.14
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>6
Financial
Statements
Cementos Pacasmayo S.A.A. and Subsidiaries
Consolidated financial statements as of December 31,
2014 and 2013 together with the Independent Auditors´ Report
Content
Independent Auditors´ Report
Consolidated financial statements
Consolidated statements of financial position
Consolidated statements of profit or loss
Consolidated statements of other comprehensive income
Consolidated statements of changes in equity
Consolidated statements of cash flows
< content
Independent
Auditors´ Report
Paredes, Zaldívar, Burga & Asociados
Sociedad Civil de Responsabilidad Limitada
Independent Auditors´ Report
Independent Auditors´ Report (continued)
To the Board of Directors and Shareholders of Cementos Pacasmayo S.A.A. and Subsidiaries
Opinion
We have audited the accompanying consolidated financial statements of Cementos Pacasmayo
S.A.A. and its subsidiaries (together the “Group”), which comprise the consolidated statements of
financial position as of December 31, 2014 and 2013, and the related consolidated statements of
profit or loss, other comprehensive income, changes in equity and cash flows for each of the three
years ended December 31, 2014, and a summary of significant accounting policies and other
explanatory information.
In our opinion, the consolidated financial statements referred to above, present fairly, in all material
respects, the consolidated financial position of Cementos Pacasmayo S.A.A. and subsidiaries as of
December 31, 2014 and 2013 and its financial performance and cash flows for the three years
ended December 31, 2014, in accordance with International Financial Reporting Standards.
Management’s responsibility for the consolidated financial statements
Management is responsible for the preparation and fair presentation of these consolidated financial
statements in accordance with International Financial Reporting Standards, and for such internal
control as Management determines is necessary to enable the preparation of consolidated financial
statements that are free from material misstatements, whether due to fraud or error.
Lima, Peru,
February 13, 2015
Signed by:
66
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Auditor’s responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our
audits. We conducted our audits in accordance with International Auditing Standards approved for
its application in Peru by the Peruvian Board of Public Accountants Associations. Those standards
require that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free from material misstatement.
cementos
pacasmayo
ANNUAL REPORT
Carlos Valdivia Valladares
C.P.C.C. Register No.27255
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the consolidated financial statements. The procedures selected depend on the
auditors’ judgment, including the assessment of the risks of material misstatement of the
consolidated financial statements, whether due to fraud or error. In making those risk assessments,
the auditor considers internal control relevant to the entity’s preparation and fair presentation of the
consolidated financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s
internal control. An audit also includes evaluating the appropriateness of accounting policies used
and the reasonableness of accounting estimates made by Management, as well as evaluating the
overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
Inscrita en la partida 11396556 del Registro de Personas Jurídicas de Lima y Callao
Miembro de Ernst & Young Global
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Consolidated statements of financial position
As of December 31, 2014 and 2013
2014
2013
Cash and term deposits
580,499
976,952
Trade and other receivables
110,843
68,542
15,042
27,679
324,070
334,471
S/.(000)
S/.(000)
Asset
Current assets
Income tax prepayments
Inventories
Prepayments
4,367
11,727
1,034,821
1,419,371
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Non-current assets
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Other receivables
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Prepayments
53,948
46,292
2,268
-
744
36,058
12,251
-
2,060,976
1,537,111
Exploration and evaluation assets
57,740
59,330
Deferred income tax assets
17,175
15,155
981
1,220
2,206,083
1,695,166
3,240,904
3,114,537
Available-for-sale financial investments
Other financial instruments
Property, plant and equipment
Other assets
Total asset
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Consolidated statements of financial position
As of December 31, 2013 and 2012
2014
2013
137,569
126,897
S/.(000)
S/.(000
Liability and equity
Current liabilities
Trade and other payables
Income tax payable
Provisions
8,720
2,780
53,826
27,984
200,115
157,661
883,564
824,022
657
20,497
85,883
102,887
970,104
947,406
1,170,219
1,105,067
531,461
531,461
Non-current liabilities
Interest-bearing loans and borrowings
Other non-current provisions
Deferred income tax liabilities
Total liability
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Equity
Capital stock
Investment shares
50,503
50,503
Additional paid-in capital
553,791
556,294
Legal reserve
154,905
119,833
5,144
19,045
696,736
653,704
1,992,540
1,930,840
Other reserves
Retained earnings
Equity attributable to equity holders of
the parent
Non-controlling interests
78,145
78,630
Total equity
2,070,685
2,009,470
Total liability and equity
3,240,904
3,114,537
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Consolidated statements of profit or loss
For the years ended December 31, 2014, 2013 and 2012
2014
2013
2012
1,242,579
1,239,688
1,169,808
S/.(000)
Sales of goods
S/.(000)
S/.(000)
Cost of sales
(724,148)
(716,239)
(713,058)
Gross profit
518,431
523,449
456,750
(194,855)
(208,915)
(203,067)
(30,534)
(29,817)
(30,865)
Operating income (expenses)
Administrative expenses
Selling and distribution expenses
Net gain on sale of available-for-sale financial investment
10,537
-
-
Other operating income, net
(3,040)
8,281
7,706
(217,892)
(230,451)
(226,226)
Total operating expenses, net
Operating profit
300,539
292,998
230,524
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Other income (expenses)
Finance income
Finance costs
Loss from exchange difference, net
11,705
27,213
23,326
(31,196)
(37,103)
(23,771)
(14,791)
(48,430)
(736)
(34,282)
(58,320)
(1,181)
Profit before income tax
266,257
234,678
229,343
Income tax expense
(77,468)
(82,395)
(73,743)
Profit for the year
188,789
152,283
155,600
192,827
155,634
159,005
Total other expenses, net
Attributable to:
Equity holders of the parent
Non-controlling interests
(4,038)
(3,351)
(3,405)
188,789
152,283
155,600
0.33
0.27
0.28
Earnings per share
Basic and diluted, profit for the year attributable to equity holders of
common shares and investment shares of the parent (S/. per share)
< CONTENIDO
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Consolidated statements of other comprehensive income
For the years ended December 31, 2014, 2013 and 2012
2014
2013
2012
188,789
152,283
155,600
(16,378)
1,171
12,813
Net gain on cash flows hedges
4,926
-
-
Deferred income tax related to component of other comprehensive income
8,088
(352)
(3,844)
-
-
(321)
S/.(000)
Profit for the year
S/.(000)
S/.(000)
Other comprehensive income
Other comprehensive income to be reclassified to profit or loss in subsequent
periods (net of income tax):
Change in fair value of available-for-sale financial investments
Exchange differences on translation of foreign currency
Transfer to profit or loss of fair value of available-for-sale financial investments sold
(10,537)
Transfer to profit or loss of cumulative exchange differences on translation of foreign currency,
note 2.3.3
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1,591
Other comprehensive income for the year, net of income tax
(13,901)
2,410
8,648
Total comprehensive income for the year, net of income tax
174,888
154,693
164,248
178,926
157,968
167,687
(4,038)
(3,275)
(3,439)
174,888
154,693
164,248
Total comprehensive income attributable to:
Equity holders of the parent
Non-controlling interests
< CONTENIDO
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Consolidated statements of changes in equity
For the years ended December 31, 2014, 2013 and 2012
Balance as of January 1, 2012
Profit for the year
Other comprehensive income
Total comprehensive income
Proceeds from the issue of common and investment shares, note 16 (a) y (b)
Appropriation of legal reserve, note 16 (e)
Dividends, note 16 (h)
Contribution of non-controlling interests, note 16(i)
Sale of treasury shares, note 16 (c)
Other adjustments of non-controlling interests, note 16(i)
Balance as of December 31, 2012
Profit for the year
Other comprehensive income
Total comprehensive income
Refund of capital in subsidiary to non-controlling interests, note 22 (a)
Appropriation of legal reserve, note 16(e)
Dividends, note 16 (h)
Contribution of non-controlling interests, note 16(i)
Other adjustments of non-controlling interests, note 16(i)
Balance as of December 31, 2013
Profit for the year
Other comprehensive loss
Total comprehensive income
Appropriation of legal reserve, note 16(e)
Terminated dividends, note 16(h)
Dividends, note 16 (h)
Contribution of non-controlling interests, note 16(i)
Other adjustments of non-controlling interests, note 16(i)
Balance as of December 31, 2014
Capital
stock
Investment
shares
Additional
paid-in
capital
S/.(000)
S/.(000)
S/.(000)
418,777
-
49,575
-
-
Attributable to equity holders of the parent
Legal
Unrealized
Unrealized
Foreign
reserve
gain (loss) gain on cash
currency
on available- flow hedge translation
for-sale
reserve
investments
S/.(000)
S/.(000)
S/.(000)
S/.(000)
90,451
-
9,257
-
-
(1,228)
-
-
-
-
-
8,969
-
-
-
-
8,969
111,484
928
561,191
-
-
-
-
-
-
14,770
-
-
-
-
-
-
-
-
-
Retained
earnings
Total
Non-controlling
interests
Total
equity
S/.(000)
S/.(000)
S/.(000)
S/.(000)
473,721
159,005
1,040,553
159,005
33,032
(3,405)
1,073,585
155,600
(287)
-
8,682
(34)
8,648
(287)
159,005
167,687
(3,439)
164,248
-
-
673,603
-
673,603
-
(14,770)
-
-
-
(52,000)
(52,000)
-
(52,000)
-
-
-
-
-
-
-
-
-
28,557
28,557
1,200
-
-
-
-
-
-
4,922
6,122
-
6,122
-
-
(2,713)
-
-
-
-
-
(2,713)
2,713
-
531,461
-
50,503
-
558,478
-
105,221
-
18,226
-
-
(1,515)
-
570,878
155,634
1,833,252
155,634
60,863
(3,351)
1,894,115
152,283
-
-
-
-
819
-
1,515
-
2,334
76
2,410
-
-
-
-
819
-
-
1,515
-
155,634
-
157,968
-
(3,275)
(1,024)
154,693
(1,024)
-
-
-
14,612
-
-
-
(14,612)
-
-
-
-
-
-
-
-
-
-
(58,196)
(58,196)
-
(58,196)
19,882
-
-
-
-
-
-
-
-
-
19,882
-
-
(2,184)
-
-
-
-
-
(2,184)
2,184
-
531,461
50,503
556,294
119,833
19,045
-
-
653,704
1,930,840
78,630
2,009,470
-
-
-
-
-
-
-
192,827
192,827
(4,038)
188,789
-
-
-
-
(18,827)
4,926
-
-
(13,901)
-
(13,901)
-
-
-
33,402
(18,827)
-
4,926
-
-
192,827
(33,402)
178,926
-
(4,038)
-
174,888
-
-
-
-
1,670
-
-
-
-
1,670
-
1,670
-
-
-
-
-
-
-
(116,393)
(116,393)
-
(116,393)
1,050
-
-
-
-
-
-
-
-
-
1,050
-
-
(2,503)
-
-
-
-
-
(2,503)
2,503
-
531,461
50,503
553,791
154,905
218
4,926
-
696,736
1,992,540
78,145
2,070,685
< CONTENIDO
< content
Consolidated statements of cash flows
For the years ended December 31, 2014, 2013 and 2012
2014
2013
2012
266,257
234,678
229,343
Depreciation and amortization
64,759
55,871
47,954
Finance costs
31,196
37,103
23,771
Unrealized exchange difference related to monetary transactions
S/.(000)
S/.(000)
S/.(000)
Operating activities
Profit before income tax
Non-cash adjustments to reconcile profit before income
tax to net cash flows
19,143
48,486
-
Net loss (gain) on disposal of property, plant and equipment
6,466
2,555
(3,901)
Long-term incentive plan
5,944
6,701
5,529
Amortization of costs of issuance of senior notes
1,644
1,493
-
Adjustment as a result of physical inventories
1,069
3,360
(4,107)
598
475
140
(399)
(1,405)
(311)
Finance income
(11,705)
(27,213)
(23,326)
Net gain on sale of available-for-sale investment
(10,537)
-
-
(453)
(2,192)
3,278
(43)
227
105
Change in the estimation of rehabilitation costs
-
(1,068)
-
Write-off of exploration and evaluation costs
-
-
2,447
Unwinding of discount of long-term incentive plan
Other operating, net
(Recovery) provision of impairment of inventories, net
Estimation of impairment of trade and other accounts receivables
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Consolidated statements of cash flows
For the years ended December 31, 2014, 2013 and 2012
2014
2013
2012
(54,814)
(19,993)
17,224
9,777
(1,111)
1,013
S/.(000)
S/.(000)
S/.(000)
Working capital adjustments
(Increase) decrease in trade and other receivables
Decrease (increase) in prepayments
Decrease (increase) in inventories
Increase (decrease) in trade and other payables
Interests received
9,785
(57,490)
(71,218)
12,486
(20,277)
2,411
351,173
260,200
230,352
12,612
37,650
7,514
Interests paid
(41,820)
(20,704)
(26,412)
Income tax paid
(69,827)
(85,392)
(111,723)
Net cash flows from operating activities
252,138
191,754
99,731
(586,554)
(200,599)
(248,194)
(690)
(9,844)
(22,038)
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Investing activities
Purchase of property, plant and equipment
Purchase of exploration and evaluation assets
Proceeds from sale of other assets
-
(151)
-
18,936
-
-
3,061
1,161
6,828
Liquidation of time deposits with original maturities greater than 90 days
-
1,065,950
-
Acquisition of time deposits with original maturities greater than 90 days
-
(662,000)
(403,950)
(565,247)
194,517
(667,354)
Proceeds from sale of available for sale investment
Proceeds from sale of property, plant and equipment
Net cash flows from (used in) investing activities
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Consolidated statements of cash flows
For the years ended December 31, 2014, 2013 and 2012
2014
2013
2012
(115,824)
(58,093)
(52,016)
1,050
19,882
28,557
Proceeds from issuance of senior notes, net of related issuance costs
-
762,067
-
Proceeds from bank overdraft and borrowings
-
19,914
13,255
Payment of borrowings
-
(202,200)
(388,394)
Payment of bank overdraft
-
(33,169)
-
Refund of capital in subsidiary to non-controlling interests
-
(1,024)
-
Proceeds from issuance of common and investment shares
-
-
666,180
S/.(000)
S/.(000)
S/.(000)
Financing activities
Dividends paid
Contribution of non-controlling interests
Proceeds from sale of treasury shares
-
-
6,122
Net cash flows from (used in) financing activities
(114,774)
507,377
273,704
Net increase (decrease) in cash and cash equivalents
(427,883)
893,648
(293,919)
31,430
13,469
475
976,952
69,835
363,279
580,499
976,952
69,835
(565,247)
194,517
(667,354)
Net foreign exchange difference
Cash and cash equivalents as of January 1
Cash and cash equivalents as of December 31
Net cash flows from (used in) investing activities
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< content
> cementos
pacasmayo S.a.a
Calle La Colonia 150
Urbanización El Vivero
Santiago de Surco
Lima. Perú
T. (511) 317 6000
Diseño y diagramación
Design:
< content