Report of Foreign Issuer (6-k)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN ISSUER

PURSUANT TO RULE 13a-16 OR 15b-16 OF

THE SECURITIES EXCHANGE ACT OF 1934

For the month of July 2019

Commission File Number 001-35991

GRAÑA Y MONTERO S.A.A.

(Exact name of registrant as specified in its charter)

N/A

(Translation of registrant’s name into English)

Republic of Peru

(Jurisdiction of incorporation or organization)

Avenida Paseo de la República 4667, Lima 34,

Surquillo, Lima

Peru

( Address of principal executive offices)

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

Form 20-F ___X____ Form 40-F _______

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

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

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

Yes _______ No ___ X ____

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

July 23, 2019

Sincerely yours,

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

GRAÑA Y MONTERO S.A.A.

By: /s/ LUIS FRANCISCO DIAZ OLIVERO
Name: Luis Francisco Diaz Olivero
Title: Chief Executive Officer
Date: July 23, 2019

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX- MONTH PERIOD ENDED AT JUNE 30, 2018 AND 2019 (UNAUDITED); AND CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT DECEMBER 31, 2018 (AUDITED) AND JUNE 30, 2019 (UNAUDITED)

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES

CONTENTS	Page
Consolidated Statement of Financial Position	1
Consolidated Statement of Income	2
Consolidated Statement of Comprehensive Income	3
Consolidated Statement of Changes in Equity	4
Consolidated Statement of Cash Flows	5
Notes to the Consolidated Financial Statements	6 - 26

	S/	=	Peruvian Sol
	US$	=	United States dollar

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES


CONSOLIDATED STATEMENT OF FINANCIAL POSITION
(All amounts are expressed in thousands of S/ unless otherwise stated)

ASSETS				LIABILITIES AND EQUITY
		As at	As at			As at	As at
		December 31,	June 30,			December 31,	June 30,
	Note	2018	2019		Note	2018	2019

Current assets				Current liabilities
Cash and cash equivalents	8	801,140	791,747	Borrowings	12	826,474	427,883
Trade accounts receivables, net		1,007,828	1,056,859	Bonds	13	39,167	48,488
Work in progress, net		28,538	46,859	Trade accounts payable		1,079,531	1,132,989
Accounts receivable from related parties	9	34,903	43,436	Accounts payable to related parties	9	55,941	64,846
Other accounts receivable		588,451	653,996	Current income tax		25,807	38,951
Inventories, net		514,047	594,781	Other accounts payable		632,669	700,443
Prepaid expenses		10,549	16,522	Provisions	14	6,197	6,518
		2,985,456	3,204,200	Total current liabilities		2,665,786	2,420,118

Non-current assets classified as held for sale		247,798	250,233	Non-current liabilities classified as held for sale		225,828	237,724

Total current assets		3,233,254	3,454,433	Total current liabilities		2,891,614	2,657,842

Non-current assets				Non-current liabilities
Long-term trade accounts receivable, net		1,020,067	682,118	Borrowings	12	376,198	230,414
Long-term work in progress, net		32,212	-	Long-term bonds	13	897,875	882,558
Long-term accounts receivable from related parties	9	778,226	789,636	Other long-term accounts payable		574,110	452,867
Prepaid expenses		33,697	43,712	Long-term accounts payable to related parties	9	21,849	22,919
Other long-term accounts receivable		302,957	229,909	Provisions	14	103,411	114,972
Investments in associates and joint ventures	10	257,765	255,534	Derivative financial instruments		61	105
Investment property		29,133	27,998	Deferred income tax liability		75,347	77,871
Property, plant and equipment, net	11	470,554	449,213	Total non-current liabilities		2,048,851	1,781,706
Intangible assets, net	11	847,095	866,032	Total liabilities		4,940,465	4,439,548
Deferred income tax asset		425,436	421,835
Total non-current assets		4,197,142	3,765,987	Equity
				Capital	15	729,434	871,918
				Legal reserve		132,011	132,011
				Voluntary reserve		29,974	29,974
				Share Premium		992,144	1,131,051
				Other reserves		(170,620)	(172,627)
				Retained earnings		375,417	402,457
				Equity attributable to controlling interest in the Company		2,088,360	2,394,784
				Non-controlling interest		401,571	386,088
				Total equity		2,489,931	2,780,872
Total assets		7,430,396	7,220,420	Total liabilities and equity		7,430,396	7,220,420


The accompanying notes on pages 6 to 26 are an integral part of the consolidated financial statements.

-1-

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES


CONSOLIDATED STATEMENT OF INCOME
(All amounts are expressed in thousands of S/ unless otherwise stated)

		For the period
		ended June 30,
	Note	2018	2019


Revenues from construction activities		993,952	927,841
Revenues from services provided		409,024	482,089
Revenue from real estate and sale of goods		286,269	219,052
		1,689,245	1,628,982

Cost of construction activities		(1,000,414)	(859,651)
Cost of services provided		(262,028)	(374,206)
Cost of real estate and goods sold		(218,692)	(168,788)
	16	(1,481,134)	(1,402,645)
Gross profit		208,111	226,337

Administrative expenses	16	(118,667)	(94,840)
Other income and expenses		11,090	46,183
Operating profit		100,534	177,680

Financial expenses		(122,862)	(117,720)
Financial income		14,015	44,389
Share of the profit or loss in associates and joint ventures		(3,161)	(1,757)
(Loss) profit before income tax		(11,474)	102,592
Income tax	17	(11,941)	(54,804)
(Loss) profit from continuing operations		(23,415)	47,788

Profit (loss) from discontinued operations	20	16,690	(11,925)
(Loss) profit for the period		(6,725)	35,863

(Loss) profit attributable to:
Owners of the Company		(28,387)	27,040
Non-controlling interest		21,662	8,823
		(6,725)	35,863


(Loss) earnings per share attributable to owners of the
Company during the period		(0.043)	0.035
(Loss) earnings per share from continuing operations
attributable to owners of the Company during the period		(0.058)	0.057


The accompanying notes on pages 6 to 26 are an integral part of the consolidated financial statements.

-2-

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES


CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(All amounts are expressed in thousands of S/ unless otherwise stated)

		For the period
		ended June 30,
	Note	2018	2019


(Loss) profit for the period		(6,725)	35,863
Other comprehensive income:
Items that will not be reclassified to profit or loss
Remeasurement of actuarial gains and losses, net of tax		2,682	-

Items that may be subsequently reclassified to profit or loss
Cash flow hedge, net of tax		175	(32)
Foreign currency translation adjustment, net of tax		10,447	(4,694)
Exchange difference from net investment in a foreign operation, net of tax		(145)	(13)
		10,477	(4,739)
Other comprehensive income for the period, net of tax		13,159	(4,739)
Total comprehensive income for the period		6,434	31,124

Comprehensive income attributable to:
Owners of the Company		(18,925)	25,033
Non-controlling interest		25,359	6,091
		6,434	31,124

Comprehensive income attributable to owners of the Company:
Continuing operations		(40,970)	36,451
Discontinued operations		22,045	(11,418)
		(18,925)	25,033



The accompanying notes on pages 6 to 26 are an integral part of the consolidated financial statements.

-3-

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED JUNE 30, 2018 AND 2019
(All amounts are expressed in thousands of S/ unless otherwise stated)
	Attributable to the controlling interests of the Company
	Number
	of shares		Legal	Voluntary	Share	Other	Retained		Non-controlling
	In thousands	Capital	reserve	reserve	premium	reserves	earnings	Total	interest	Total


Balances as of January 1, 2018	660,054	660,054	132,011	29,974	881,795	(169,671)	589,167	2,123,330	465,748	2,589,078
- IFRS adoption	-	-	-	-	-	-	(52,564)	(52,564)	(979)	(53,543)
Initial balances restated	660,054	660,054	132,011	29,974	881,795	(169,671)	536,603	2,070,766	464,769	2,535,535
(Loss) profit for the period	-	-	-	-	-	-	(28,387)	(28,387)	21,662	(6,725)
Cash flow hedge	-	-	-	-	-	166	-	166	9	175
Adjustment for actuarial gains and losses	-	-	-	-	-	-	1,962	1,962	720	2,682
Foreign currency translation adjustment	-	-	-	-	-	7,479	-	7,479	2,968	10,447
Exchange difference from net investment in a foreign operation	-	-	-	-	-	(145)	-	(145)	-	(145)
Comprehensive income of the period	-	-	-	-	-	7,500	(26,425)	(18,925)	25,359	6,434
Transactions with shareholders:
- Dividend distribution	-	-	-	-	-	-	-	-	(9,585)	(9,585)
- Contributions (devolution) of non-controlling shareholders, net	-	-	-	-	-	-	-	-	(38,845)	(38,845)
- Additional acquisition of non-controlling	-	-	-	-	(9,850)	-	-	(9,850)	(4,172)	(14,022)
- Deconsolidation of former subsidiary	-	-	-	-	-	-	-	-	(32,457)	(32,457)
Total transactions with shareholders	-	-	-	-	(9,850)	-	-	(9,850)	(85,059)	(94,909)
Balances as of June 30, 2018	660,054	660,054	132,011	29,974	871,945	(162,171)	510,178	2,041,991	405,069	2,447,060

Balances as of January 1, 2019	729,434	729,434	132,011	29,974	992,144	(170,620)	375,417	2,088,360	401,571	2,489,931
Profit for the period	-	-	-	-	-	-	27,040	27,040	8,823	35,863
Cash flow hedge	-	-	-	-	-	(30)	-	(30)	(2)	(32)
Foreign currency translation adjustment	-	-	-	-	-	(1,964)	-	(1,964)	(2,730)	(4,694)
Exchange difference from net investment in a foreign operation	-	-	-	-	-	(13)	-	(13)	-	(13)
Comprehensive income of the period	-	-	-	-	-	(2,007)	27,040	25,033	6,091	31,124
Transactions with shareholders:
- Transfer to voluntary reserve	-	-	-	-	-	-	-	-	-	-
- Dividend distribution	-	-	-	-	-	-	-	-	(3,722)	(3,722)
- Contributions (devolution) of non-controlling shareholders, net	-	-	-	-	-	-	-	-	(17,790)	(17,790)
- Capital Increase	142,484	142,484	-	-	138,907	-	-	281,391	-	281,391
- Others	-	-	-	-	-	-	-	-	(62)	(62)
Total transactions with shareholders	142,484	142,484	-	-	138,907	-	-	281,391	(21,574)	259,817
Balances as of June 30, 2019	871,918	871,918	132,011	29,974	1,131,051	(172,627)	402,457	2,394,784	386,088	2,780,872


The accompanying notes on pages 6 to 26 are an integral part of the consolidated financial statements.

-4-

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES
(All amounts are expressed in thousands of S/ unless otherwise stated)

CONSOLIDATED STATEMENT OF CASH FLOWS
(All amounts are expressed in thousands of S/ unless otherwise stated)

		For the period
		ended June 30,
	Note	2018	2019

OPERATING ACTIVITIES
Profit before income tax		5,216	90,667
Adjustments to profit not affecting cash flows from
operating activities:
Depreciation		71,547	37,964
Amortization		52,758	49,644
Impairment of inventories		(13,923)	-
Impairment of accounts receivable and other accounts receivable		243	347
Reversal of impairment of inventories		-	(1,323)
Impairment (reversal) of property, plant and equipment		-	10,363
Impairment of intangible assets		-	3,257
Other Provisions		2,731	9,365
Financial expense,net		86,562	80,644
Foreign exchange loss (gain) on loans		17,016	(16,071)
Share of the profit and loss in associates and joint ventures		2,425	1,757
Reversal of provisions		(3,982)	(1,547)
Disposal of assets		4,596	332
Loss (profit) on sale of property, plant and equipment		3,420	(1,382)
Loss on sale from available-for-sale financial assets		1,478	-
Profit on sale of investments in subsidiaries		(41,895)	-
Loss on remeasurement of accounts receivable		22,072	(23,693)
Net variations in assets and liabilities:
Trade accounts receivable and unbilled working in progress		(154,315)	300,374
Other accounts receivable		(87,732)	6,715
Other accounts receivable from related parties		23,818	8,390
Inventories		(8,462)	(77,284)
Pre-paid expenses and other assets		(23,015)	(15,988)
Trade accounts payable		110,908	65,354
Other accounts payable		12,728	(44,254)
Other accounts payable to related parties		61,898	9,962
Other provisions		(761)	(250)
Interest payment		(74,319)	(80,472)
Payments for purchases of intangibles - Concessions		(5,726)	(9,385)
Payment of income tax		(57,099)	(35,535)
Net cash provided by operating activities		8,187	367,951

INVESTING ACTIVITIES
Sale of available-for-sale investment		197,230	-
Sale of property, plant and equipment		18,436	5,297
Sale of non-current assets held for sale		16,244	-
Interest received		13,298	15,084
Dividends received		653	332
Payment for purchase of investments properties		(84)	(35)
Payments for intangible purchase		(75,605)	(65,798)
Payments for purchase and contributions on investment in associate and joint ventures		(3,770)	-
Payments for property, plant and equipment purchase		(31,543)	(27,359)
Net cash provided by (applied to) investing activities		134,859	(72,479)

FINANCING ACTIVITIES
Loans received		527,996	247,206
Amortization of loans received		(603,219)	(787,967)
Amortization of bonds issued		(15,001)	(14,843)
Dividends paid to non-controlling interest		(9,585)	(3,721)
Cash received (return of contributions )from non-controlling shareholders		(13,456)	263,601
Acquisition or sale of interest in a subsidiary of non-controlling shareholders		(1,581)	-
Net cash applied to financing activities		(114,846)	(295,724)
Net increase (net decrease) in cash		28,200	(252)
Exchange difference		(5,968)	(9,027)
Cash and cash equivalents at the beginning of the period		626,180	801,021
Cash and cash equivalents at the end of the period	8	648,412	791,742

NON-CASH TRANSACTIONS:
Capitalization of interests		-	3,525
Acquisition of assets through finance leases		226	3,038
Accounts payable to the non-controlling interest for purchase of investments		12,441	-
Contribution in inventories		25,389	-


The accompanying notes on pages 6 to 26 are an integral part of the consolidated financial statements.

-5-

GRAÑA Y MONTERO S.A.A. AND SUBSIDIARIES

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX-MONTH PERIOD ENDED AT JUNE 30, 2018 AND 2019 (UNAUDITED); AND CONSOLIDATED STATEMENT OF FINANCIAL POSITION AT DECEMBER 31, 2018 (AUDITED) AND AT JUNE 30, 2019 (UNAUDITED)

1.	GENERAL INFORMATION

Graña y Montero S.A.A. (hereinafter the Company) was incorporated in Peru on August 12, 1996, as a result of the equity spin-off of Inversiones GyM S.A. (formerly Graña y Montero S.A.). The Company’s legal address is Av. Paseo de la Republica 4675, Surquillo Lima, Peru and is listed on the Lima Stock Exchange and the New York Stock Exchange (NYSE).

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

The Group is a conglomerate of companies with operations including different business activities, the most significant are engineering and construction, infrastructure (public concession ownership and operation) and real estate businesses. See details of operations segments in Note 7.

These condensed interim consolidated financial statements as of June 30, 2019 were prepared and authorized for issuance by the Chief Financial Officer on July 23, 2019.

2.	BASIS OF PREPARATION

These condensed interim consolidated financial statements for the period ended June 30, 2019 have been prepared in accordance with IAS 34 "Interim financial reports". The condensed interim consolidated financial statements provide comparative information regarding prior periods; however, they do not include all the information and disclosures required in the annual consolidated financial statements, so they must be read together with the audited consolidated financial statements for the year ended December 31, 2018, which have been prepared in accordance with International Standards. of Financial Information (hereinafter "IFRS").

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

3.	SIGNIFICANT ACCOUNTING POLICIES

The accounting policies used in the preparation of these condensed interim consolidated financial statements are consistent with those applied in the preparation of the consolidated financial statements at December 31, 2018, except for the new international financial information regulations (IFRS) effective as of January 1, 2019, which the Group is in the process of adoption.

-6-

4.	FINANCIAL RISK MANAGEMENT

Financial risk management is carried out by the Group’s Management. Management oversees the general management of risks in specific areas, such as foreign exchange rate risk, price risk, cash flow and fair value interest rate risk, credit risk, the use of derivative and non-derivative financial instruments and the investment of excess liquidity as well as financial risks and carries out periodic supervision and monitoring.

4.1	Financial risk factors

The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, price risk, fair value interest rate risk and cash flow interest rate risk), credit risk and liquidity risk. The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Group’s financial performance. The Group uses derivative financial instruments to hedge certain risk exposures in one of its subsidiaries and considers the use of other derivatives in the event that it identifies risks that may generate an adverse effect for the Group in the short and medium-term.

a)	Market risks

i.	Foreign Exchange risk

The Group is exposed to exchange rate risk as a result of the transactions carried out locally in foreign currency and due to its operations abroad. As of December 31, 2018 and June 30, 2019, and, this exposure is mainly concentrated in fluctuations of U.S. dollar, the Chilean and Colombian Pesos.

ii.	Price risk

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

iii.	Cash flow and fair value interest rate risk

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

b)	Credit risk

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

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

-7-

c)	Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and cash equivalents, the availability of funding through an adequate number of sources of committed credit facilities and the capacity to close out positions in the market. Historically, the Group cash flows enabled it to maintain sufficient cash to meet its obligations. However, as of December 31, 2016, the Group started to experienced liquidity risk due to the early termination of the GSP concession agreement and the obligations assumed. As a consequence, the Group started a disinvestment plan to be able to meet the obligations resulting from this scenario. That has been fulfilled, managing to reduce these obligations in an important way.

Group Corporate Finance monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs, so that the Group does not breach borrowing limits or covenants, where applicable, on any of its borrowing facilities. Less significant financing transactions are controlled by the Finance Management of each subsidiary.

Such forecasting takes into consideration the Group’s debt financing plans, covenant compliance, compliance with internal statement of financial position ratio targets and, if applicable, external regulatory or legal requirements; for example, foreign currency restrictions.

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

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

	Less than			1-2		2-5	More than
At December 31, 2018	1 year		years		years		5 years		Total

Other financial liabilities (except
for finance leases)		816,122		273,079		129,233		41,577		1,260,011
Finance leases		15,151		7,489		14,094		-		36,734
Bonds		111,080		153,287		355,667		1,174,404		1,794,438
Trade accounts payables		1,079,531		-		-		-		1,079,531
Accounts payables to related
parties		55,941		21,849		-		-		77,790
Other accounts payables		116,806		17,777		338,627		-		473,210
Other non-financial liabilities		-		61		-		-		61
		2,194,631		473,542		837,621		1,215,981		4,721,775



	Less than			1-2		2-5	More than
At June 30, 2019	1 year		years		years		5 years		Total

Other financial liabilities (except
for finance leases)		418,353		214,192		-		-		632,545
Finance leases		14,027		5,334		12,062		-		31,423
Bonds		120,015		143,491		356,216		1,132,868		1,752,590
Trade accounts payables		1,132,989		-		-		-		1,132,989
Accounts payables to related
parties		64,846		22,919		-		-		87,765
Other accounts payables		243,843		2,079		336,540		-		582,462
Other non-financial liabilities		-		105		-		-		105
		1,994,073		388,120		704,818		1,132,868		4,219,879

-8-

4.2	Capital management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders, benefits for other stakeholders and tomaintain an optimal capital structure to reduce the cost of capital. From 2017 the situation of the Group, has lead Management to monitor deviations that might cause the non-compliance of covenants and may hinder renegotiation of liabilities (Note12).

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

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

As of December 31, 2018 and June 30, 2019, the gearing ratio is presented below indicating the Company’s strategy to keep it in a range from 0.10 to 0.70.

	At			At
	December 31,			June 30,
	2018			2019
Total financial liabilities and bonds		2,139,714			1,589,343
Less: Cash and cash equivalents		(801,140	)		(791,747	)
Net debt )		1,338,574			797,596
Total equity		2,489,931			2,780,872
Total capital		3,828,505			3,578,468

Gearing ratio		0.35			0.22

4.3	Fair value estimation

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

-	Level 1: Measurement based on quoted prices in active markets for identical assets or liabilities.

-	Level 2: Measurement based on inputs other than quoted prices included within (Level 1) that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices).

-	Level 3: Measurement based on inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs, generally based on internal estimates and assumptions of the Group).

The fair value of the financial assets classified as at fair value through profit or loss has been determined with observable information of Level 1.

Other financial instruments measured at fair value correspond to the interest rate swaps signed by subsidiary GMP S.A., by which a variable-interest instrument is changed to a fixed interest rate (cash flow hedge). The information used for determining the fair value of these instruments are Level 2 and has been determined based on the present value of discounted future cash flows applied to the interest- rate change projections of Citibank N.A.

-9-

The carrying amounts of cash and cash equivalents correspond to their fair values. The Company considers that the carrying amount of trade accounts receivable and payable is similar to their fair values. The fair value of financial liabilities, disclosed in Note 12, has been estimated by discounting the future contractual cash flows at the interest rate currently prevailing in the market and which is available to the Company for similar financial instruments (Level 2).

5.	CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

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

In preparing these condensed interim consolidated financial statements, the significant judgements made by management in applying the Group’s accounting policies and the key sources of uncertainty were the same as those that applied to the consolidated financial statements for the year ended December 31, 2018.

6.	SEASONALITY OF OPERATIONS

The Group shows no seasonality in the operations of any of its subsidiaries; operations are carried out regularly during the course of the period.

7.	SEGMENT INFORMATION

Operating segments are reported consistently with the internal reports that are reviewed by the Group’ chief decision-maker; that is, the Executive Committee, which is led by the Chief Executive Officer. This Committee is responsible for allocating resources and evaluating the performance of each operating segment.

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

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

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

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

As of December 31, 2018 management considered not presenting the segment "IT services", due to the sale of the CAM Group in November 2018, which includes the companies CAM Chile S.A., Cam Servicios del Peru S.A. (CAM Group). In addition,Adexus S.A. was reclassified to non-current assets held for sale.

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

-10-

Operating segments financial position
Segment reporting
									Infrastructure
As of December 31, 2018	Engineering and construction		Energy		Toll roads		Transportation		Water treatment		Real estate		Parent Company operations		Eliminations			Consolidated

Assets.-
Cash and cash equivalent		177,455		34,816		168,460		191,178		6,700		93,262		129,269		-			801,140
Trade accounts receivables, net		583,842		54,350		78,013		226,919		598		63,038		1,068		-			1,007,828
Work in progress, net		24,962		-		-		-		-		-		3,576		-			28,538
Accounts receivable from related parties		203,583		492		40,820		758		9,930		60,759		98,308		(379,747	)		34,903
Other accounts receivable		386,467		37,611		28,492		31,012		199		55,508		49,160		2			588,451
Inventories, net		27,852		18,823		9,206		25,282		-		448,328		-		(15,444	)		514,047
Prepaid expenses		3,825		1,345		3,068		874		135		81		1,221		-			10,549
		1,407,986		147,437		328,059		476,023		17,562		720,976		282,602		(395,189	)		2,985,456
Non-current assets classified as held for sale		-		-		-		-		-		-		247,798		-			247,798
Total current assets		1,407,986		147,437		328,059		476,023		17,562		720,976		530,400		(395,189	)		3,233,254

Long-term trade accounts receivable, net		14,455		-		33,380		966,202		-		6,030		-		-			1,020,067
Long-term work in progress, net		-		-		32,212		-		-		-		-		-			32,212
Long-term accounts receivable from related parties		254,660		-		39,341		-		-		-		744,655		(260,430	)		778,226
Prepaid expenses		-		-		28,214		5,152		840		-		-		(509	)		33,697
Other long-term accounts receivable		77,028		63,797		7,058		64,817		7,346		30,268		52,645		(2	)		302,957
Investments in associates and joint ventures		114,676		7,230		-		-		-		5,604		2,213,023		(2,082,768	)		257,765
Investment property		-		-		-		-		-		29,133		-		-			29,133
Property, plant and equipment, net		205,678		171,430		14,585		1,586		109		9,237		69,088		(1,159	)		470,554
Intangible assets, net		160,088		183,614		466,153		749		-		1,105		23,514		11,872			847,095
Deferred income tax asset		166,624		5,025		11,876		-		620		17,127		218,201		5,963			425,436
Total non-current assets		993,209		431,096		632,819		1,038,506		8,915		98,504		3,321,126		(2,327,033	)		4,197,142
Total assets		2,401,195		578,533		960,878		1,514,529		26,477		819,480		3,851,526		(2,722,222	)		7,430,396

Liabilities.-
Borrowings		232,409		26,621		15,384		209,463		-		133,105		209,492		-			826,474
Bonds		-		-		25,745		13,422		-		-		-		-			39,167
Trade accounts payable		777,130		49,254		61,233		104,652		121		31,173		55,968		-			1,079,531
Accounts payable to related parties		179,351		1,933		46,099		65,256		58		35,085		91,754		(363,595	)		55,941
Current income tax		5,898		2,797		1,398		9,888		226		4,219		1,381		-			25,807
Other accounts payable		389,896		13,147		72,823		11,677		631		106,286		38,209		-			632,669
Provisions		521		5,412		-		-		-		264		-		-			6,197
Non-current liabilities classified as held for sale		-		-		-		-		-		-		225,828		-			225,828
Total current liabilities		1,585,205		99,164		222,682		414,358		1,036		310,132		622,632		(363,595	)		2,891,614

Borrowings		9,314		87,166		556		-		-		10,684		268,478		-			376,198
Long-term bonds		-		-		299,637		598,238		-		-		-		-			897,875
Other long-term accounts payable		357,146		-		31,477		154,756		1,656		26,470		2,605		-			574,110
Long-term accounts payable to related parties		8,880		-		1,167		81,207		23,445		-		183,826		(276,676	)		21,849
Provisions		32,122		20,234		-		-		-		-		51,055		-			103,411
Derivative financial instruments		-		61		-		-		-		-		-		-			61
Deferred income tax liability		5,564		24,541		7,010		37,178		-		-		1,054		-			75,347
Total non-current liabilities		413,026		132,002		339,847		871,379		25,101		37,154		507,018		(276,676	)		2,048,851
Total liabilities		1,998,231		231,166		562,529		1,285,737		26,137		347,286		1,129,650		(640,271	)		4,940,465
Equity attributable to controlling interest in the Company		331,178		323,943		332,406		171,594		340		193,483		2,708,803		(1,973,387	)		2,088,360
Non-controlling interest		71,786		23,424		65,943		57,198		-		278,711		13,073		(108,564	)		401,571
Total liabilities and equity		2,401,195		578,533		960,878		1,514,529		26,477		819,480		3,851,526		(2,722,222	)		7,430,396

-11-

Operating segments financial position
Segment reporting
									Infrastructure
As of June 30, 2019	Engineering and construction		Energy		Toll roads		Transportation		Water treatment		Real estate		Parent Company operations		Eliminations			Consolidated

Assets.-
Cash and cash equivalent		293,872		27,248		106,969		242,191		6,641		95,176		19,650		-			791,747
Financial asset at fair value through profit or loss		-		-		-		-		-		-		-		-			-
Trade accounts receivables, net		691,152		62,220		91,596		151,736		600		58,512		1,043		-			1,056,859
Work in progress, net		43,889		-		-		-		-		-		2,970		-			46,859
Accounts receivable from related parties		214,741		550		50,189		1,612		21		62,632		219,128		(505,437	)		43,436
Other accounts receivable		441,525		42,297		34,037		57,777		195		38,832		39,331		2			653,996
Inventories, net		66,400		20,992		8,551		33,151		-		481,240		-		(15,553	)		594,781
Prepaid expenses		5,732		2,318		2,966		5,111		253		13		129		-			16,522
		1,757,311		155,625		294,308		491,578		7,710		736,405		282,251		(520,988	)		3,204,200
Non-current assets classified as held for sale		843		-		-		-		-		-		249,390		-			250,233
Total current assets		1,758,154		155,625		294,308		491,578		7,710		736,405		531,641		(520,988	)		3,454,433

Long-term trade accounts receivable, net		-		-		58,537		619,808		-		3,773		-		-			682,118
Long-term work in progress, net		-		-		-		-		-		-		-		-			-
Long-term accounts receivable from related parties		256,371		-		39,683		-		10,044		-		714,261		(230,723	)		789,636
Prepaid expenses		-		17		41,096		2,295		814		-		-		(510	)		43,712
Other long-term accounts receivable		64,917		62,102		6,105		-		7,346		30,953		58,486		-			229,909
Investments in associates and joint ventures		110,470		7,970		-		-		-		5,604		2,176,288		(2,044,798	)		255,534
Investment property		-		-		-		-		-		27,998		-		-			27,998
Property, plant and equipment, net		195,500		175,263		12,505		853		157		9,539		56,555		(1,159	)		449,213
Intangible assets, net		155,765		225,497		450,396		833		-		1,085		23,865		8,591			866,032
Deferred income tax asset		173,233		5,652		11,393		-		724		19,038		205,163		6,632			421,835
Total non-current assets		956,256		476,501		619,715		623,789		19,085		97,990		3,234,618		(2,261,967	)		3,765,987
Total assets		2,714,410		632,126		914,023		1,115,367		26,795		834,395		3,766,259		(2,782,955	)		7,220,420

Liabilities.-
Borrowings		260,004		23,639		1,108		-		-		140,570		2,562		-			427,883
Bonds		-		-		32,944		15,544		-		-		-		-			48,488
Trade accounts payable		858,344		82,791		45,141		83,559		131		32,832		30,191		-			1,132,989
Accounts payable to related parties		310,888		1,335		76,237		52,700		-		34,193		92,964		(503,471	)		64,846
Current income tax		29,505		1,955		2,650		4,354		216		-		271		-			38,951
Other accounts payable		401,137		17,315		63,735		33,350		737		146,244		37,923		2			700,443
Provisions		578		5,703		-		-		-		237		-		-			6,518
Non-current liabilities classified as held for sale		-		-		-		-		-		-		237,724		-			237,724
Total current liabilities		1,860,456		132,738		221,815		189,507		1,084		354,076		401,635		(503,469	)		2,657,842

Borrowings		8,224		75,166		108		-		-		7,749		139,167		-			230,414
Long-term bonds		-		-		283,226		599,332		-		-		-		-			882,558
Other long-term accounts payable		399,240		-		22,654		308		1,730		25,597		3,338		-			452,867
Long-term accounts payable to related parties		15,772		-		836		31,799		23,784		-		183,417		(232,689	)		22,919
Provisions		40,753		20,444		-		-		-		-		53,775		-			114,972
Derivative financial instruments		-		105		-		-		-		-		-		-			105
Deferred income tax liability		4,273		30,698		3,076		38,842		-		-		982		-			77,871
Total non-current liabilities		468,262		126,413		309,900		670,281		25,514		33,346		380,679		(232,689	)		1,781,706
Total liabilities		2,328,718		259,151		531,715		859,788		26,598		387,422		782,314		(736,158	)		4,439,548
Equity attributable to controlling interest in the Company		314,775		347,646		315,579		191,684		197		187,774		2,977,148		(1,940,019	)		2,394,784
Non-controlling interest		70,917		25,329		66,729		63,895		-		259,199		6,797		(106,778	)		386,088
Total liabilities and equity		2,714,410		632,126		914,023		1,115,367		26,795		834,395		3,766,259		(2,782,955	)		7,220,420

-12-

Operating segment performance
Segment Reporting
													Infrastructure
For the six-month period ended June 30, 2018 -	Engineering and construction			Energy			Toll roads			Transportation			Water treatment			Real estate			Parent Company operations			Eliminations			Consolidated

Revenue		920,117			269,314			304,879			304,965			1,598			143,559			43,219			(298,406	)		1,689,245
Gross profit (loss)		34,849			61,750			50,068			53,173			209			25,059			(6,426	)		(10,571	)		208,111
Administrative expenses		(64,565	)		(9,824	)		(15,221	)		(5,361	)		(118	)		(9,147	)		(33,272	)		18,841			(118,667	)
Other income and expenses, net		8,920			(15	)		2			2			-			(1,118	)		628			2,671			11,090
Operating profit (loss)		(20,796	)		51,911			34,849			47,814			91			14,794			(39,070	)		10,941			100,534
Financial expenses		(34,447	)		(7,366	)		(13,801	)		(3,719	)		-			(11,146	)		(63,430	)		11,047			(122,862	)
Financial income		6,331			337			2,004			11,091			30			2,844			14,610			(23,232	)		14,015
Dividends		-			-			-			-			-			-			2,196			(2,196	)		-
Share of profit or loss in associates
and joint ventures		(4,522	)		709			-			-			-			-			35,875			(35,223	)		(3,161	)
(Loss) profit before income tax		(53,434	)		45,591			23,052			55,186			121			6,492			(49,819	)		(38,663	)		(11,474	)
Income tax		3,772			(13,564	)		(7,203	)		(16,788	)		(177	)		(1,837	)		23,046			810			(11,941	)
(Loss) profit from continuing operations		(49,662	)		32,027			15,849			38,398			(56	)		4,655			(26,773	)		(37,853	)		(23,415	)
Loss from discontinuing operations		44,096			-			-			-			-			-			(27,786	)		380			16,690
(Loss) profit for the period		(5,566	)		32,027			15,849			38,398			(56	)		4,655			(54,559	)		(37,473	)		(6,725	)

(Loss) profit from attributable to:
Owners of the Company		(7,582	)		29,496			13,149			28,799			(56	)		(2,978	)		(50,071	)		(39,144	)		(28,387	)
Non-controlling interest		2,016			2,531			2,700			9,599			-			7,633			(4,488	)		1,671			21,662
		(5,566	)		32,027			15,849			38,398			(56	)		4,655			(54,559	)		(37,473	)		(6,725	)

-13-

Operating segment performance
Segment Reporting
													Infrastructure
For the six-month period ended June 30, 2019 -	Engineering and construction			Energy			Toll roads			Transportation			Water treatment			Real estate			Parent Company operations			Eliminations			Consolidated

Revenue		1,050,498			274,222			315,137			202,958			1,782			65,820			44,565			(326,000	)		1,628,982
Gross profit (loss)		103,187			57,749			46,323			37,459			393			8,883			(1,985	)		(25,672	)		226,337
Administrative expenses		(66,993	)		(12,322	)		(15,150	)		(7,317	)		(258	)		(11,008	)		(13,908	)		32,116			(94,840	)
Other income and expenses, net		5,216			226			(16,911	)		(1	)		-			(144	)		56,917			880			46,183
Gain from sale of investments		-			-			-			-			-			-			-			-			-
Operating profit (loss)		41,410			45,653			14,262			30,141			135			(2,269	)		41,024			7,324			177,680
Financial expenses		(36,505	)		(5,663	)		(14,521	)		(7,302	)		(11	)		(8,975	)		(52,078	)		7,335			(117,720	)
Financial income		2,293			565			1,305			14,855			328			1,968			38,249			(15,174	)		44,389
Dividends		-			-			-			-			-			-			3,904			(3,904	)		-
Share of profit or loss in associates
and joint ventures		(4,063	)		1,073			-			-			-			-			(1,017	)		2,250			(1,757	)
(Loss) profit before income tax		3,135			41,628			1,046			37,694			452			(9,276	)		30,082			(2,169	)		102,592
Income tax		(13,378	)		(12,046	)		(6,891	)		(10,925	)		(256	)		1,845			(13,181	)		28			(54,804	)
(Loss) profit from continuing operations		(10,243	)		29,582			(5,845	)		26,769			196			(7,431	)		16,901			(2,141	)		47,788
Loss from discontinuing operations		-			-			-			-			-			-			(11,844	)		(81	)		(11,925	)
(Loss) profit for the period		(10,243	)		29,582			(5,845	)		26,769			196			(7,431	)		5,057			(2,222	)		35,863

(Loss) profit from attributable to:
Owners of the Company		(10,539	)		27,001			(9,235	)		20,077			196			(5,709	)		10,471			(5,222	)		27,040
Non-controlling interest		296			2,581			3,390			6,692			-			(1,722	)		(5,414	)		3,000			8,823
		(10,243	)		29,582			(5,845	)		26,769			196			(7,431	)		5,057			(2,222	)		35,863

-14-

No major changes occurred in total assets as compared to the amount stated in previous year-end financial statements.

There are no differences as compared to previous year-end financial statements based on segmentation or measurement of financial performance by segment.

8.	CASH AND CASH EQUIVALENTS

	At		At
	December 31,		June 30,
	2018		2019
Cash on hand		1,377		1,515
Cash in-transit		3,566		3,942
Bank accounts		647,832		654,820
Time deposits		148,365		131,470
		801,140		791,747

Reconciliation to the consolidated statement of cash flow

The above figures reconcile to the amount of cash shown in the statement of cash flows as follows:

	At			At
	December 31,			June 30,
	2018			2019

Cash and cash equivalent on Consolidated statement of
financial position		801,140			791,747
Bank overdrafts (Note 12)		(119	)		(5	)
Balances per Consolidated statement of cash flows		801,021			791,742

9.	TRANSACTIONS WITH RELATED PARTIES

a) Transactions with related parties

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

			At June 30,
	2018		2019
Revenue from sales of goods and services:
- Associates		1,691		108
- Joint operations		15,782		20,418
		17,473		20,526

Inter-company services were agreed based on market terms as if they had been agreed to third parties.

-15-

b) Balances of transactions with related parties

			At December 31,				At June 30,
			2018				2019
	Receivable		Payable		Receivable		Payable
Current portion:
Joint operations
Consorcio Rio Urubamba		9,122		-		9,007		-
Consorcio Peruano de Conservacion		6,417		-		3,101		-
Consorcio Italo Peruano		3,322		4,996		608		984
Consorcio Constructor Chavimochic		2,138		6,199		-		6,531
Consorcio GyM Conciviles		1,855		-		1,217		-
Consorcio La Gloria		1,369		1,006		1,373		1,022
Consorcio Ermitaño		781		624		877		507
Terminales del Peru		459		-		2,470		-
Consorcio TNT Vial y Vives - DSD Chile Ltda		-		11,804		-		3,565
Consorcio Rio Mantaro		-		6,655		2,359		8,357
Consorcio Vial Quinua		-		1,970		-		2,049
Consorcio Huacho Pativilca		-		475		8,959		16,202
Consorcio CDEM		-		-		2,294		-
Consorcio GyM-Stracon		-		-		2,018		-
Other minors		9,215		11,323		8,111		5,704
		34,678		45,052		42,394		44,921

Other related parties
Ferrovias Argentina		-		10,242		-		15,861
Peru Piping Spools S.A.C.		225		-		1,042		-
Other minors		-		647		-		4,064
		225		10,889		1,042		19,925
Current portion		34,903		55,941		43,436		64,846

Non-current portion:
Gasoducto Sur Peruano S.A		773,927		-		787,553		-
Ferrovias Participaciones		-		21,849		-		22,919
Consorcio Constructor Chavimochic		-		-		2,083		-
Other minors		4,299		-		-		-
Non-current		778,226		21,849		789,636		22,919

Receivables and payables are mainly current and do not have specific guarantees, except for the receivable account from GSP. Accounts receivable from related parties have maturity periods of 60 days and are related to sales of goods and services. These balances are non-interest-bearing, and during 2019 do not require a provision for impairment.

Accounts payable to related parties mainly related to services of engineering, construction, maintenance and others and have a maturity period of 60 days. Such accounts are not interest bearing because they are short-term.

-16-

10.	INVESTMENTS IN ASSOCIATES AND JOINT VENTURES

The movement of our investments in associates for the period ended June 30, 2018 and 2019 is as follows:

				At June 30,
	2018			2019

Beginning balance		268,671			257,765
Contributions received		3,770			-
Dividends received		(653	)		(332	)
Share of the profit or loss in associates and joint ventures		(3,161	)		(1,757	)
Write-off of investment		-			(142	)
Translation adjustments		(2,533	)		-
Discontinued operations		736			-
Ending balance		266,830			255,534

11.	PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS

For the period ended June 30, 2018 and 2019, the movement in property, plant and equipment and intangible assets accounts was as follows:

	Property,
	plant and			Intangibles
	equipment			assets

Net cost at January 1, 2018		865,735			940,070

Additions		31,769			83,258
Subsidiary deconsolidation		(207,243	)		(16,509	)
Transfers, disposals and adjustments		(5,496	)		1,008
Deductions for sale of assets		(21,856	)		-
Depreciation, amortization		(70,389	)		(52,758	)

Net cost at June 30, 2018		592,520			955,069

Net cost at January 1, 2019		470,554			847,095

Additions		30,652			74,544
Transfers, disposals and adjustments (*)		(11,327	)		(5,963	)
Deductions for sale of assets		(3,872	)		-
Depreciation, amortization		(36,794	)		(49,644	)

Net cost at June 30, 2019		449,213			866,032

(*) Includes impairment of property, plant and equipment amounted to S/10.7 million and intangible assets amounted to S/3.3 million, recorded in other income and expenses.

-17-

a) Property, plant and equipment

As of December 31, 2018 and June 30, 2019, additions to property, plant and equipment comprise acquisition of machinery and equipment required for Group’s operations.

Depreciation of fixed assets and investment properties for the period is broken down in the statement of income as follows:

				At June 30,
	2018			2019

Cost of services and goods (Note 16)		43,560			36,141
Administrative expenses (Note 16)		2,696			1,823
(+) Depreciation discontinued operation		25,291			-
Total depreciation related to property, plant and equipment and investment property		71,547			37,964
(-) Depreciation of investment property		(1,158	)		(1,170	)
Total depreciation of property, plant and equipment		70,389			36,794

b) Intangible assets

As of December 31, 2018 and June 30, 2019, additions registered in intangible assets mainly comprise of investments in preparation of wells located in Lots I, III, IV and V to provide oil and hydrocarbon explotation services and in building the second Ancón-Huacho-Pativilca road section of the Panamericana Norte highway (concession under intangible model).

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

			At June 30,
	2018		2019

Cost of services and goods (Note 16)		46,769		46,822
Administrative expenses (Note 16)		1,299		2,822
(+) Amortization discontinued operations		4,690		-
		52,758		49,644

i) Goodwill

Management reviews the results of its businesses based on the type of economic activity carried out. Goodwill allocated to cash-generating units are:

	At		At
	December 31,		June 30,
	2018		2019

Engineering and construction		71,621		70,694
Electromechanical		20,737		20,737
IT services		930		930
		93,288		92,361

-18-

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

12.	BORROWINGS

This item comprises:

			Total				Current				Non-current
	At		At		At		At		At		At
	December 31,		June 30,		December 31,		June 30,		December 31,		June 30,
	2018		2019		2018		2019		2018		2019

Bank overdrafts (Note 8)		119		5		119		5		-		-
Bank loans		1,023,481		487,663		810,188		412,724		213,293		74,939
Finance leases		33,488		28,905		13,514		12,597		19,974		16,308
Other financial entities		145,584		141,724		2,653		2,557		142,931		139,167
		1,202,672		658,297		826,474		427,883		376,198		230,414

a) Bank loans

As of December 31, 2018 and June 30, 2019 , this item comprises bank loans in local and foreign currencies for working capital purposes. These obligations bear interest at fixed rates which fluctuated between 1.6% and 15.8% in 2018 and between 5.25% and 12% in 2019.

						Current					Non-current
				At		At			At		At
	Interest	Maturity		December 31,		June 30,			December 31,		June 30,
	rate	date		2018		2019			2018		2019

GyM S.A.	5.25% / 8.91%		2019		227,770		255,725	(iii)		-		-
Graña y Montero S.A.A.	Libor USD 3M + de 4.9% a 5.5%		2018 / 2019		206,836		-	(ii)		125,547		-	(i)
GyM Ferrovías S.A.	Libor USD 1M + 2%		2019		209,463		-			-		-
Viva GyM S.A.	7.00% / 12.00%		2018 / 2020		129,617		136,856			2,102		-
GMP S.A.	4.55% / 6.04%		2018 / 2020		22,587		20,143			85,644		74,939
CONCAR S.A.	15.75%		2019		13,915		-			-		-
					810,188		412,724			213,293		74,939

i) Credit Suisse Syndicated Loan

In December 2015, the Group entered into a US$200 million (equivalent to S/672 million) medium-term agreement with Credit Suisse AG, Cayman Islands Branch and Credit Suisse Securities (USA) LLC. The loan term is five years, with quarterly installments starting on the 18th month. The loan bears interest at a rate of three months Libor plus 4.9% per year. The funds were used to finance the equity participation in GSP. On June 27, 2017, the Company renegotiated the terms of this loan to correct defaults related to the cancellation of the GSP concession.

As of June 30, 2019, the outstanding balance of the loan capital was fully paid.

ii) GSP Bridge Loan

At December 31, 2016, the current balance of bank loans included US$129 million (equivalent to S/433.3 million) of the corporate guarantee issued by the Company to guarantee the bridge loan granted to GSP. On June, 2017, the Company reached a refinancing agreement with Natixis, BBVA, SMBC and MUFJ for US$78.7 million (equivalent to S/256.3 million), this amount was used to repay the GSP bridge loan. The new loan would remain until June, 2020.

As of June 30, 2019, the principal of the loan was fully paid.

-19-

iii) Financial Stability Framework Agreement

On July 31, 2017, the Company and its subsidiaries, GyM S.A., Construyendo Pais S.A., Vial y Vives-DSD S.A. and Concesionaria Vía Expresa Sur S.A., entered into a Financial Stability Framework Agreement (together with certain complementary contracts, the “Framework Agreement”) with the following financial entities: Scotiabank Perú S.A., Banco Internacional del Perú S.A.A., BBVA Banco Continental, Banco de Crédito del Perú, Citibank del Peru SA and Citibank N.A. The Framework Agreement aims to: (i) grant GyM a syndicated revolving line of credit for working capital for up to US$1.6 million and S/143.9 million, which may be increased by an additional US$14 million subject to certain conditions; (ii) grant GyM S.A. a line of credit of up to US$51.6 million and S/33.6 million; (iii) grant the Company, GyM S.A., Construyendo Pais S.A., Vial y Vives - DSD S.A. and Concesionaria Vía Expresa Sur S.A. a non-revolving line of credit to finance reimbursement obligations under performance bonds; (iv) grant a syndicated line of credit in favor of Graña y Montero S.A.A. and GyM S.A. for the issuance of performance bonds up to an amount of US$100 million (which may be increased by an additional US$50 million subject to compliance with certain conditions); and (v) to commit to maintain existing standby letters of credit issued at the request of GyM S.A. and the Company, as well as the request of Construyendo Pais S.A., Vial y Vives – DSD and Concesionaria Vía Expresa Sur S.A. In April of 2018, the Group repaid US$72.7 million (equivalent to S/245.8 million) of the facility with the proceeds of the sale of Stracon GyM S.A., and in July of 2018, an additional of US$15.4 million (equivalent to S/52.1 million). As of June 30, 2019, and the date of this report, there was US$59.4 million (equivalent to S/195.5 million) outstanding under this agreement.

GyM S.A. requested a waiver for a change in the Financial Stability Framework Agreement, in which at least 50% of the amount of Tranche A (client invoices (facturas)) and up to 50% of the amount of Tranche B (project valuations (valorizaciones) should be presented; the request was accepted by the lenders. As of June 30, 2019 and the date of this report, the value of client invoices and the value of project valuations is 68% and 126%, respectively, both percentages comply with the provisions of the approved dispensation.

As of June 30, 2019 and the date of this report, GyM is in compliance with the ratios established under the Financial Stability Framework Agreement.

b) Other financial entities

Securitization of Norvial flows

At May 29, 2018 the Company subscribes an agreement between the Company and Inversiones Concesiones Vial S.A.C. ("BCI Peru") -whith the intervention of Fondo de Inversiones BCI NV (“Fondo BCI”) and BCI Management Administradora General de Fondos S.A. (“BCI” Asset Management”) - to monetize future dividends from Norvial S.A. to the Company. This operation has as a finality to reduce the indebtness of the Company.The amount of the transaction was US$42.3 millions and ended on June 11, 2018.

Likewise, it has been agreed that our company will have purchase options on 48.8% of Norvial's economic rights that BCI Peru will maintain through its participation in Inversiones en Autopistas S.A.. These options will be subject to certain conditions such as the expiration of different terms, recovery of the investment made with the funds of the BCI Fund (according to different economic calculations) and/or that a change of control occurs.

-20-

c) Fair value of borrowings

The carrying amount and fair value of borrowings are broken down as follows:

			Carrying amount				Fair value
	At		At		At		At
	December 31,		June 30,		December 31,		June 30,
	2018		2019		2018		2019

Bank overdrafts (Note 8)		119		5		119		5
Bank loans		1,023,481		487,663		1,152,885		487,612
Finance leases		33,488		28,905		38,399		27,173
Other financial entities		145,584		141,724		145,584		141,724
		1,202,672		658,297		1,336,987		656,514

As of June 30, 2019, the fair value is based on cash flows discounted using a rate based on the borrowing rate of 3.6% and 8.9% (2.4% and 8.9% in 2018) and are included as Level 2 in the level of measurement.

13.

BONDS

This item is broken down as follows:

			Total				Current				Non-current
	At		At		At		At		At		At
	December 31,		June 30,		December 31,		June 30,		December 31,		June 30,
	2018		2019		2018		2019		2018		2019

GyM Ferrovías S.A.		611,660		614,876		13,422		15,544		598,238		599,332
Norvial S.A.		325,382		316,170		25,745		32,944		299,637		283,226
		937,042		931,046		39,167		48,488		897,875		882,558

a)	GyM Ferrovías S.A.

In February 2015, the subsidiary GyM Ferrovías S.A. made an international issue of corporate bonds under Regulation S. The issue was made in soles VAC (adjusted for the Constant Update Value) for an amount of S/629 million. The bonds mature in November 2039 and earn interest at a rate of 4.75% (plus the VAC adjustment), present a risk rating of AA + (local scale) granted by Apoyo & Asociados Internacionales Clasico de Riesgo. As of June 30, 2019, an amortization has been made up to S/73.3 million (S/67.7 million as of December 31, 2018).

As of June 30, 2019, the balance includes accrued interest payable and VAC adjustments for S/77.9 million (S/72.0 million as of December 31, 2018).

At June 30, 2018 and 2019 the account movement was as follows:

-21-

	2018			2019

Balance at January, 1		603,657			611,660
Amortization		(5,064	)		(5,638	)
Accrued interest		23,814			23,894
Interest paid		(14,960	)		(15,040	)
Balance at June, 30		607,447			614,876

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

-	Debt service coverage ratio not less than 1.2 times.

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

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

On August 23, 2017, GyM Ferrovías S.A. and Line One CPAO Purchaser LLC subscribed the contract for the sale and assignment of collection rights of the "Annual Payment for Complementary Investment (Complementary PAO)" derived from the Concession Contract up to an amount equivalent to US$316 million.

On August 23, 2017, GyM Ferrovías S.A. as Borrower, Mizuho Bank, Ltd. and Sumitomo Mitsui Banking Corporation as Lenders and Mizuho Bank, Ltd. as Administrative Agent signed a loan contract for Working Capital for an amount equivalent to US$80 million to partially finance the Expansion Project of the Line 1 of the Lima Metro. As of June 30, 2019, the Working Capital loan was fully paid .

b)	Norvial S.A.

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

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

At June 30, 2018 and 2019 the account movement was as follows:

	2018			2019

Balance at January, 1		343,910			325,382
Amortization		(9,937	)		(9,205	)
Accrued interest		11,886			11,782
Capitalized interest		1,927			1,398
Interest paid		(13,822	)		(13,187	)
Balance at June, 30		333,964			316,170

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

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

-	Proforma gearing ratio lower than 4 times.

-22-

The fair value of both obligations as of June 30, 2019 amounts to S/1,042 million (as of December 31, 2018 amounts to S/1,037 million), is based on discounted cash flows using rates between 4.32% and 6.93% (between 4.09% and 5.45% as of December 31, 2018) and is within level 2 of the fair value hierarchy.

As of December 31, 2018 and June 30, 2019 , the Company has complied with the covenants of both types of bonds.

14.	PROVISIONS

The movement of this item is as follows:

				Contingent
				liabilities			Provision
	Legal			resulting from			for well
	contingencies			acquisitions			closure		Total

At January 1, 2018		23,364			7,249			16,804		47,417
Additions		2,731			-			2,139		4,870
Reversals of provisions		(3,684	)		(298	)		-		(3,982	)
Payments		(761	)		-			-		(761	)
Translation adjustments		(20	)		35			-		15
At June 30, 2018		21,630			6,986			18,943		47,559

At January 1, 2019		84,728			4,498			20,382		109,608
Additions		13,564			-			200		13,764
Reversals of provisions		(1,091	)		(456	)		-		(1,547	)
Payments		(250	)		-			-		(250	)
Translation adjustments		(29	)		(56	)		-		(85	)
At June 30, 2019		96,922			3,986			20,582		121,490

As of June 30, 2019, the Group registered the present value of the estimated provision of S/77.7 million (S/73.5 million as of December 31, 2018), corresponding to the legal contingency estimated by management for the Company's and Subsidiaries exposure to a possible compensation in relation to their participation as minority partner in certain entities that developed six infrastructure projects in Peru with companies belonging to the Odebrecht group.

15.

CAPITAL

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

As of December 31, 2018, the capital of the Company were represented by 729,434,192 shares of a nominal value of S/1.00 each, of which 660,053,790 were registered in the Public Registries and 69,380,402 were in process of registration formalization.

At June 30, 2019, a total of 230,470,860 shares were represented in ADS, equivalent to 46,094,172 ADSs at a rate of 5 shares per ADS. As of December 31, 2018, a total of 207,931,660 shares were represented by ADS equivalent to 41,586,332 ADSs.

-23-

16.	EXPENSES BY NATURE

For the period ended June 30, 2018 and 2019 , this item comprises:

	Cost of
	goods and			Administrative
	services			expenses		Total
At June 30, 2018
Salaries, wages and fringe benefits		444,201			50,682		494,883
Services provided by third-parties		455,457			42,755		498,212
Purchase of goods		340,658			-		340,658
Other management charges		158,310			20,859		179,169
Depreciation		43,560			2,696		46,256
Amortization		46,769			1,299		48,068
Taxes		5,859			376		6,235
Impairment of accounts receivable		243			-		243
Inventory recovery		(13,923	)		-		(13,923	)
Total report reclassified (Note 20 C)		1,481,134			118,667		1,599,801


At June 30, 2019
Salaries, wages and fringe benefits		378,778			58,403		437,181
Services provided by third-parties		500,917			19,054		519,971
Purchase of goods		246,355			-		246,355
Other management charges		190,766			12,438		203,204
Depreciation		36,141			1,823		37,964
Amortization		46,822			2,822		49,644
Taxes		4,150			300		4,450
Impairment of accounts receivable		347			-		347
Inventory recovery		(1,323	)		-		(1,323	)
property, plant and equipment recovery		(308	)		-		(308	)
Total report		1,402,645			94,840		1,497,485

As of June 30, 2019, the subsidiary Viva GyM S.A. reverse the excess of provision for impairment in inventories for S/1.3 million (S/13.9 million as of June 30, 2018).

17.	INCOME TAX

These condensed interim consolidated financial statements for the period ended June 30, 2019, income tax expense is recognized based on management’s estimate of the weighted average annual income tax rate expected for the full financial year. The estimated average annual tax rate used for the year to June 30, 2019 is 53.42% (104.06% for the period ended June 30, 2018). The variation of the effective rate as compared to the previous year is due to the effect of the permanent differences in the income tax calculation.

18.	CONTINGENCIES, COMMITTMENTS AND GUARANTEES

As of June 30, 2019, contingencies held by the Group are substantially the same as those existing as of December 31, 2018.

In addition the Group had performace bonds and guarantees commitments with different financial institutions securing to secure transactions for US$434.3 million and US$13.9 million, respectively (US$471.60 million and US$13.9 million, respectively, as of December 31, 2018).

-24-

19.

DIVIDENDS

As part of the covenants at the refinancing agreements mentioned in Note 12, the Company is unable to pay dividends as established in the Financial Stability Framework Agreement.

For the period ended June 30, 2019, the Group has paid dividends to its non-controlling subsidiaries in the amount of S/3.7 million (S/9.6 million for the same period in 2018).

20.	DISCONTINUED OPERATIONS AND NON-CURRENT ASSET CLASSIFIED AS HELD FOR SALE

As part of the process of divestments of non-strategic assets initiated by the Company; CAM Servicios del Peru S.A., CAM Chile S.A. and Stracon GyM SA were sold, during the year 2018 (completed).

Additionally, at December 31, 2018, the subsidiary Adexus S.A. has been reclassified as non-current assets available for sale (planned) at December 31, 2018 and June 30, 2019.

A.	Discontinued operations

i) CAM Servicios del Peru S.A. and CAM Chile S.A.

On December 4, 2018, the Company entered into a purchase and sale agreement for all of its shares (representing 73.16%) of CAM Servicios del Peru S.A. and CAM Chile S.A. The Group received for its participation in CAM Chile S.A. and CAM Servicios del Peru S.A. the sum of (i) US$15.78 million (equivalent to S/51.7 million) for the shares of CAM Chile S.A. and (ii) US$3.0 million (equivalent to S/10.4 million) for the shares of CAM Servicios del Peru S.A. The net gain on the sale of both subsidiaries amounted to S/31.7 million .

ii) Stracon GyM S.A.

On March 28, 2018, the Company entered into a purchase and sale agreement for all of its shares (representing 87.59%) in Stracon GyM S.A. The sale price was agreed in US$76.8 million (equivalent to S/248.8 million), which is fully paid. The net gain on the sale amounted to S/41.9 million.

B.	Non-current asset classified as held for sale

At December 31, 2018 and at June 30, 2019, non-current assets and liabilities held for sale correspond to investments in the company Adexus S.A., whose main activity is to provide information technology solutions mainly in Chile and Peru. Account balances are classified as assets held for sale taking into account that the Group has a sales plan defined within the next 12 months .

-25-

	At		At
	December 31,		June 30,
	2018		2019

ASSETS
Cash and cash equivalets		6,074		3,555
Accounts receivables, net		157,351		152,710
Inventories, net		3,999		2,033
Other assets, net		80,374		91,092
Total assets		247,798		249,390

LIABILITIES
Borrowings		71,810		100,476
Accounts payable		148,817		132,408
Deferred income tax liabilities		5,201		4,840
Total liabilities		225,828		237,724
Total net assets		21,970		11,666

C.	Consolidated statement of income

The Company reclassified financial results of discontinued operations, Stracon GyM S.A., CAM Servicios del Peru S.A., CAM Chile S.A. (completed) and Adexus S.A. (planned) for the period ended June 30, 2018 as follows:

	At June 30, 2018			Reclassification discontinued operations						At June 30, 2018
	Reported			Completed			Planned			Reclassified


Revenues		2,241,743			(417,353	)		(135,145	)		1,689,245
Operating costs		(2,003,595	)		401,207			121,254			(1,481,134	)
Gross profit (loss)		238,148			(16,146	)		(13,891	)		208,111

Administrative expenses		(164,618	)		26,562			19,389			(118,667	)
Other (expenses) income, net		6,346			1,977			2,767			11,090
Gain from the sale of investments		41,895			(41,895	)		-			-
Operating profit (loss)		121,771			(29,502	)		8,265			100,534

Financial expenses		(137,870	)		9,288			5,720			(122,862	)
Financial income		14,086			(54	)		(17	)		14,015
Share of the profit or loss in associates and joint ventures		(2,425	)		(736	)		-			(3,161	)
(Loss) profit before income tax		(4,438	)		(21,004	)		13,968			(11,474	)
Income tax		(10,878	)		2,424			(3,487	)		(11,941	)
(Loss) profit from continuing operations		(15,316	)		(18,580	)		10,481			(23,415	)
Profit (loss) from discontinued operations		8,591			18,580			(10,481	)		16,690
Loss of the period		(6,725	)								(6,725	)

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

	Between June 30, 2019 and the date of approval of the condensed interim consolidated financial statements, there have been no subsequent events that may affect the reasonableness of the financial statements issued.