Grana y Montero S.A.A.

8

8

8

8



109

8

Liability Statement

This document contains true and sufficient information on the 

operations of Graña y Montero S.A.A. during the year 2006.  

Notwithstanding the liability of the issuer, the undersigned assume 

responsibility for its content in accordance with the applicable legal 

provisions. 

Mario 

Alvarado 

Pflucker

Corporate 

General 

Manager

Gonzalo 

Rosado 

Solís

Corporate 

General 

Accountant



Letter to the 

Shareholders

Developing 

new professional 

skills

Diversifi- 

cation

Concessions

Internacional

Development

0

2

4

Source of experience 

GMD

GMI

GMP

and knowledge

8

22

26

GyM

Concar

Larcomar

0

4

8

Experience within 

everyone’s reach

Business 

Corporate

Social Res- 

Governance

Historical

Summary

64

72

ponsibility

44

Administra-

tion Analisis

74

8

Turning experiences 
into knowledge



Knowledge management has become 
the core theme for the Group’s future 
development, in order to ensure its 
growth and continued existence. 

With the growth that we are experiencing 
and the greater sophistication of the 
projects we are undertaking, knowledge 
management has become of paramount 
importance.  The knowledge of each 
professional in the group, as well as that 
of the organization as a whole, must be 
well managed so as to turn our 
experiences into knowledge. 

2

25

Key Figures 2006

32

Constant Values in Thousands of New Soles as of December 2006

200

2004

2005

2006

Equivalent USD 

Thousands

Activity

Turnover

Gross Profit

Profit before 

worker’s share 

and income tax 

Net Profit

OIBDA

Number of 

Professionals

807,571

811,200

124,290

24,461

8,034

5,540

64

840,974

833,731

141,991

47,460

17,515

47,502

984

931,666

910,454

183,826

72,741

32,724

80,860

,286

1,320,849

1,188,813

272,755

174,373

104,918

275,60

,80

413,153

371,853

85,316

54,543

32,818

86,207

Graña y Montero is a group of 6 companies that provide Engineering and Infrastructure Services, with over 00 

professionals and operations in 4 Latin American countries. 

Its mission is to satisfy its clients’ needs for Engineering and Infrastructure Services beyond contractual obligations, working in 

an atmosphere in which personnel are motivated and are able to develop, respecting the environment in harmony with the 

communities in which it operates, while ensuring a return for its shareholders.

Its vision is to be the Engineering and Infrastructure Services Group with the highest compliance rates in Latin America.

10

10

16

    
10

20

20

Activity by Sector 2006

 OIBDA by Subsidiary

Activity 

(S/. Thousands)



1,450,000

1,250,000

1,050,000

850,000

650,000

450,000

2003

2004

2005

2006

42%

2003

2004

2005

2006

807,571

840,974

931,666

1,320,849

42%

15

Mining

Energy and Petroleum

Construction and Industry

Technology

Infrastructure

Public Sector

Entertainment

44.1%

24.6%

12.11%

6.64%

6.22%

4.78%

1.47%

GyM S.A.

GMP S.A.

GMD S.A.

GMI S.A.

Concar S.A.

Larcomar S.A.

Graña y Montero S.A.A.

59.08%

24.09%

4.94%

1.78%

3.72%

3.31%

3.09%

OIBDA 

(S/. Thousands)

Net Profit  

(S/. Thousands)

Number of Professionals

10

52%

125,000

100,000

75,000

50,000

25,000

0

221%

1,500

1,250

1,000

750

500

250

0

2003

2004

2005

2006

2003

2004

2005

2006

2003

2004

2005

2006

135,540

147,502

180,860

275,603

52%

2003

2004

2005

2006

8,034

17,515

32,724

104,918

221%

2003

2004

2005

2006

643

984

1,286

1,380

300,000

250,000

200,000

150,000

100,000

0

2003

2004

2005

2006

4

Letter  to the 
Shareholders

32

Dear Shareholders

long-term business in the areas of Hydrocarbons, 

Infrastructure and Mining Services. 

During the year 2006 we made noteworthy progress on 

We are pleased to present the excellent results obtained for 

these investments.  Early in the year, we signed an 

the year 2006, the best year in the history of the Group.

agreement with the Electric Company of Piura (“Empresa 

Eléctrica de Piura”) in order to acquire its Natural Gas 

In fact, sales as well as profits are the best in the history of 

business, with a commitment to build a new Fractioning 

the Company, which was founded 73 years ago as a 

Plant in Talara requiring an investment of approximately 14 

construction company and has now become a diversified 

million dollars.  In the month of April, we initiated a 

Engineering Services Group involved in other activities such 

concession contract for the operation and maintenance of 

as Petroleum, Systems and Highway Concessions. 

the Northern IIRSA Highway from Paita to Yurimaguas that, 

Activity for the year amounted to 413.15 million dollars with 

the month of November, we won the contract bid for the 

growth of 42% over the previous year and net profits 

Buenos Aires-Canchaque Highway, which is the first 

exceeding 32 million dollars, which is three times the figure 

concession related to a major program called “Costa-Sierra” 

for the preceding year.

(Coast-Highlands).  

with its 960 Kms., is one of the longest in the world; and in 

52

Most importantly, these results have enabled us to fulfill our 

In addition to these new, long-term business projects, our 

plan to consolidate the Group from a financial point of view 

traditional business has continued growing and becoming 

as well as in the strategic aspect.  We have managed to 

increasingly more sophisticated. During the year we 

reduce the net debt 50%, ending the period with a cash 

executed the new Concentrator Project at Cerro Verde, the 

reserve of 30 million dollars.  This permits us to program our 

San Cristóbal Mining Project in Bolivia and the Detailed 

strategic investments adequately, with the objective of 

Engineering for the San José Mining Project in Argentina; 

becoming a more structurally solid group, growing mainly in 

and other projects were initiated, such as the new Camisea 

5

José Graña 

Miró Quesada

10

President

“

At Graña y Montero, we have always 
understood that knowledge management 
is one the guiding principles of the 
Group’s strategic development” 

–	José	Graña	Miró	Quesada	

74

33

6

Mario Alvarado 

Pflucker

General 

Manager

“

We quickly noticed that we learned  
from preparing courses as well as 
teaching them, and then the internal 
educator would become a reference 
source for inquiries” 

–	Mario	Alvarado	Pflucker

10

33

II Gas Separation (Flume) plant and the Software Design 

elections which allow us to expect quite favorable economic 

Service for the Oficina de Normalización Previsional (Office of 

forecasts for the coming years; and our group has been able 

Pension Standardization) systems.

to develop valuable skills and experience in carrying out the 

type of infrastructure projects that the country will need for its 

These contracts enabled us to close the year with a 591 

growth, permitting us to look toward the future with great 

million dollar contract backlog.

optimism. 

The aforementioned figures and the contract portfolio 

Before closing, we would like to point out that in 2006 our 

demonstrate the success of the Strategic Plan.

company obtained the Award for the Best Annual Report in 

the Corporate Governance contest held by UPC, which is a 

However, we are aware that soon we will be celebrating our 

clear acknowledgement of our commitment to Transparency, 

75th anniversary, thanks to the prestige earned over so many 

correct information for our shareholders and best practices in 

55

years.  Therefore, the fact that this development can continue 

Corporate Governance.  

only if it is accompanied by an effort to strengthen our Values 

of Quality, Compliance, Reliability and Efficiency is taken into 

Lastly, we would like to thank our clients and workers for 

consideration in the Strategic Plan.  Considering that our 

permitting these successes that bring us such good 

growth must be based on the enhancement of the  business 

prospects.

skills of the over 1300 professionals who work for the group, 

we have created a program called “Learning to Grow”, through 

which  80,478 man hours of training have been imparted over 

the past year, making Knowledge Management a key element 

of the Group’s strategy. 

This strategic development has clearly placed us in a 

leadership position in Peru and in a situation where 

expectations are high.  This past year Peru had democratic 

José Graña 

Miró Quesada

President

Mario Alvarado 

Pflucker

General Manager

7

10

10

8

109

9

8

8

8

8

8

Diversification

32

0

25

Over 20 years ago, we adopted a diversification strategy in 

order to increase the stability of our business without 

distancing ourselves from our basic knowledge; so we 

zeroed in our efforts on turning the company into an 

Engineering and Infrastructure Services Group.  Today, what 

was once a construction company has become a group of 

16 companies clustered in 6 operating companies, thereby 

achieving the objective of having the new companies 

generate over half of the operating profits of the Group. 

32

GMD  

the Information 

Technology 

Services company, 

that has a 

Technological 

Operations Center 

for outsourcing 

systems services.

GMI 

the Engineering 

Consulting 

company  that has a 

subsidiary 

specializing in 

Environmental 

Engineering called 

ECOTEC.

GMP 

the Petroleum Services company that provides 

well drilling services for third parties, operates 

two petroleum fields in northern Peru and has 

formed Consorcio Terminales, a consortium with 

Oiltanking of Germany for the operation of fuel 

terminals in Peru and Bolivia.  During 2006, a 

Natural Gas Fractioning Plant was acquired in 

Talara.

GyM 

the original 

construction 

company, which has 

four divisions: 

Electromechanics, 

Civil Works, 

Buildings and Real 

Estate. 

concar

CONCAR 

the company 

specializing in the 

operation and 

maintenance of 

highways in 

concession. 



50

LARCOMAR 

the company that 

operates Larcomar 

Entertainment 

Center in the Lima 

district of Miraflores 

and that recently 

opened its Fashion 

Center.

2

Concessions

CONIRSA NORTE 

A company that began the 

construction of the 980 Km 

Paita-Yurimaguas Highway 

Conirsa Norte 

Paita-Yurimaguas 

Highway

19

in 2006.

In recent years we have been successful in our objective of 

ensuring the stability of the Group by developing knowledge 

and skills in design, construction, finance and the operation 

of Infrastructure Concessions, which is clearly the way that 

large projects will be carried out in the future.  

The Builder-Concessionaire model generates extensive 

synergies between the different business lines of the Group.  

In the economic aspect, the cycles of concessions are 

long-term, sometimes 60 years, in comparison with 1 or 

39

2-year construction contracts.  Lastly, although concessions 

are capital intensive, they produce greater margins that are 

far more stable, using capital stemming from construction 

which requires less capital.  In operations, the two areas 

strengthen and complement each other in their execution 

and maintenance.  

Currently, we own shares in the concession companies 

listed below. 

CONIRSA SUR 

A company that began the 

construction of the 2nd and 

3rd sections of the 

Interoceanic Highway to 

Brazil in 2006.

Consorcio Terminales 

Terminal Marítimo  

de Camisea, Pisco

CONSORCIO TERMINALES 

in association with Oiltanking 

of Germany, which  operates 

fuel storage terminals in Peru 

and the Camisea Loading 

Dock in Pisco, and is 

completing new Sodium 

Sulfhydrate Storage and 

Dispatch facilities at the 

Matarani Port.

40

CONCAR  

concessionaire of the 

Arequipa-Matarani highway 

and the Ovalo Gutiérrez 

Norvial 

Operación de la  

Carretera Huacho- 

20

parking garage in Miraflores, 

Pativilca

and operator of the northern 

Lima highway and the 

northern IIRSA highway from 

Paita to Yurimaguas



CLHB 

Hydrocarbon Logistics 

Company of Bolivia (Hydrocar-

bon Logistics Company of 

20

Bolivia), is also operated by 

Consorcio Terminales.  This 

company is included in the 

Bolivian Decree of Nationaliza-

tion of Hydrocarbons, which 

has not yet been implemented.

Larcomar 

Entertainment

Center

TGP  

NORVIAL 

(Transportadora de Gas  

Concessionaire of Road 

del Perú), the company that 

Network No. 5, the 

won the contract bid for the 

construction of a transpor-

tation and distribution 

system for Camisea gas.

Northern Lima highway 

from  Ancón to  Pativilca.

CANCHAQUE 

The future concessionaire 

for the Buenos Aires 

Canchaque Highway, 

contract bid awarded in 

November of 2006.

21

LARCOMAR 

Concessionaire of the 

Larcomar Entertainment 

Center in Miraflores.

4

International 

Development

Throughout the year, our Group has had contracts in four 

other countries as a result of a decision we made some 

years ago to strive to develop business outside of Peru, due 

to the need to be competitive internationally rather than in a 

single market. 

32

BOLIVIA 

GyM is finishing work on 

the Construction and 

Assembly of equipment for 

the San Cristóbal 

60

Polymetallic Mining Project 

in the Potosí area.   

Through CLHB, in 

association with Oiltanking, 

we operate the fuel 

Transport and Storage 

system in Bolivia. 

REPÚBLICA DOMINICANA 

GMI supervises the Ciudad 

Colonial (Colonial City) 

Shopping Center, property 

of Sol Meliá Group, and 

manages the 1800-room 

Palace Resorts Hotel 

Project in Punta Cana.

5

ARGENTINA 

GMI is in charge of the 

Detailed Engineering for the 

San José Mining Project in 

the province of Patagonia, 

Argentina.

20

50

6

109

7

8

8

8

8

8

17

10

10

Jaime Dasso 

Botto

General 

Manager

9

“

The projects we carry  
out today are increasingly 
sophisticated and 
complex, and they 
provide us with a new 
set of experiences and 
knowledge”
–		Jaime	Dasso	Botto,	
General	Manager

20

Information 
Technology 
Services

GMD had 0% growth, maintaining the profitability of the 

previous year in accordance with the planned commercial 

10

selectivity strategy.  

In the year 2006 GMD increased its market share in 

Outsourcing and Technological Services, and consolidated 

its leading position in the Software Factory business.  These 

results have enabled us to improve our financial position and 

lay the foundations for solid future growth. 

The total activity of the company for the year was US$ .7 

million, which represents growth of .75% with respect to 

the year 2005 and the EBITDA margin was 4%.  During the 

year investments of US$ .9 million were made for the 

purpose of maintaining the growth of the Outsourcing 

business and following the strategy of executing projects 

with stable flows. 

The activity generated by the Outsourcing and Software 

Factory business amounted to US$ 2.8 million, which 

accounts for a 5% growth compared to the year 2005 and 

67% of the total activity of the company.  This growth only 

validates our vision and further consolidates our leadership 

During the year 2006 GMD was able to renew and expand 

00% of the Outsourcing and Technology Service 

contracts, in addition to being recognized once again by 

our partners – Cisco Systems, Hewlett Packard and 

Microsoft – as their major partner in the country.  

In 2005 a Human Management strategy aimed at improving 

the workplace climate, identifying competencies by role, 

assessing performance and recognizing adherence to our 

values, permitted a 4% improvement in the workplace 

climate, definition of the profile of a GMD employee and 

simplification of the organizational structure.  The GMD 

intranet, including human, commercial, project and 

administrative management, was implemented during the 

year, allowing us to improve communication between the 

company and our collaborators. During 2006 GMD 

reaffirmed its commitment to Quality Management, 

renewing the ISO 900 certification in all its processes and 

raising the software factory level to CMMI–, thereby 

guaranteeing reliability and quality in the development and 

in this market segment.  In the business of technology sales, 

maintenance of software.

Sector Industria y 

Comercio

Backus  

Suez Energy Perú S.A. 

Renovación del Outsourcing 

Consultoría SAP –  

del sistema comunicaciones 

Reportes de Flujo de Caja,  

y Outsourcing del Servicio  

Configuración y desarrollo  

Sector de  

Telecomunicaciones

26 empresas  

de Help Desk a nivel  

de Sales & Distribution,  

Telefónica 

del Grupo Romero 

nacional.

Reportes de seguimiento.

Software Factory Sistemas 

Ampliación del contrato 

Grupo Hoschschild  

Cementos Pacasmayo 

ATIS: Atención de Clientes, 

actual hasta el año 2009. 

Outsourcing del Servicio  

S.A.A. 

Facturación y Cobros e 

Outsourcing Integral de 

del Help Desk a nivel  

Cobranzas Intercompañías,

Integración.

Tecnología. Aplicación de 

Regional. Migración y  

Consultoría Técnica y 

Terra Networks Peru S.A. 

Notas SAP en Servidor de 

soporte SAP. Consultoría  

Funcional SAP, Reporte de 

Generación de avisos de 

Desarrollo R/3, Soporte 

en seguridad de TI.

Saldos y Movimientos  

cobranza, Migración de 

Basis de SAP.

Cía. Minera Antamina S.A. 

Bancarios, Control de Crédi-

Base de datos de clientes.

Avícola San Fernando 

Portal Web Corporativo, 

tos por Proveedor.

Renovación y ampliación 

Configuración de  

del contrato hasta el año 

Project Server y Genera-

2010. Outsourcing Integral 

ción de Reportes.

de Tecnología y Soporte de 

Minsur S.A.  

los Sistemas Oracle Suite.

Soporte a la Operación 

de SAP, Metodología de 

Procesos.

SITEL 

Plataforma  

Telecomunicaciones para 

Servicio de Carrier de 

Telefonía.

2

Centro de 

Operaciones 

Tecnológicas  

de GMD

10

53

Sector Industria y 

Banca y Finanzas

Comercio

de Plataforma Unificada 

y Sarbanes Oxley (SOX). 

Desarrollo de Proyectos: 

Multifondos, Planes de 

ONP  

AFP Integra  

Permanencia, Portal Único 

(Oficina Normalización  

Software Factory,  

de Recaudación,  

Previsional): Software Fac-

Mantenimiento evolutivo, 

Desigualdades Mínimas.

tory de DyM II, Outsourcing 

correctivo, perfectivo y 

HSBC Bank Perú S.A. 

de los DataCenters y  

adaptativo, extracción de 

Implementación del 

atención a usuarios y  

datos, gestión de consultas 

Sistema de operaciones de 

Outsourcing del Archivo.

y soporte de aplicaciones: 

arrendamiento financiero 

47

SUNARP  

Recaudación, Beneficios, 

(WINLEASING).

(Zona Registral IX):  

Afiliaciones y Traspasos, 

Banco Financiero del 

Outsourcing integral de  

Inversiones, Contabilidad, 

Perú Implementación del 

mesa de ayuda.

Acreditación, Estado de 

Sistema de operaciones de 

SBS (Superintendencia  

Cuenta, Sistemas Web

arrendamiento financiero 

de Banca y Seguros): 

AFP Horizonte  

(WINLEASING).

Implementación  

Outsourcing de  

El Pacífico Vida S.A. 

de Telefonía IP Cisco.

Mantenimiento de Aplica-

Consultoría Gestión Docu-

ciones: Gestión Provisional, 

mental (Filenet) para la Ger-

Ingresos, Administración 

encia Actuarial y la Gerencia 

y Recursos Humanos. 

de Contabilidad.

Apoyo a la Implementación 

22

17

10

10

Walter Silva 

Santisteban

General 

Manager

2

“

At GMI, our services 
demand experience 
and knowledge, which 
led us to identify, retain, 
organize, apply and 
disseminate the  
lessons learned”
–		Walter	Silva	Santisteban,	

General	Manager

24

Consulting 
Engineering 

Regarding our international activity, we successfully 

culminated the detailed engineering for Minera Santa Cruz’s 

10

Gold Concentration Plant in Argentina, having dedicated 

64,0 man hours, and the supervision of the Palma Real 

Shopping Center in Punta Cana, Dominican Republic. 

Likewise, we started out the supervision of Club Meliá 

For GMI it has been an important year in terms of the 

Paradisus Punta Cana for Sol Meliá.  For the Mexican chain, 

advancement of our consolidation strategy in the Mining 

Palace Resorts, we continued supervising its first 875-room 

Sector.  We continued providing our Engineering services 

hotel in the Dominican Republic for the second year.  

through framework contracts with Cía. Minera Antamina 

and Minera Cerro Verde, and entered into a new framework 

Part of the GMI’s strategy is the implementation of new 

contract with Rio Tinto Minera  Perú Limitada S.A.C.; 

technologies and procedures in order to remain at the 

simultaneously, new projects were initiated with already 

forefront of the industry, as well as on-going training of its 

established clients such as Cía. Minera Volcán,  Minera 

personnel, to which 5,760 hours have been dedicated over 

Yanacocha S.R.L., Doe Run Peru and Minsur, as well as 

the past year.  

with new clients such as Marcobre S.A.C. and Bear Creek 

Mining Corporation.   Additionally, as part of our strategy of 

In 2006 efforts were focused internally on the development 

diversification into the Hydrocarbons sector, this year we 

and implementation of Improvement Plans, which led to 

signed framework contracts with Repsol and Pluspetrol. 

greater efficiency in the Document Control Department 

Our sales totaled US$ 9.6 million, which represents growth 

Control System; additionally, the Knowledge Management 

of 48% compared to the previous year, with an operating 

Portal was implemented and ISO 900-2000 Certification 

profit of US$ .4 million.  The year ended with a backlog of 

in “Engineering Consulting Services” was obtained in 

US$ 6.4 million and predictable flows of US$ 4.2 million.

relation with our Quality Management System.

through the implementation of SISDOC, its own Document 

Sector Minería

• Línea de Retorno de Agua 

• Túnel Camiones de  

Ampliación Planta Victoria 

Seepage Tucush

Concentrados Cerro 

de 2000 a 4000 TMPD.

• En Geomática el Monito-

Verde-Matarani

• Estudio Técnico Planea-

reo Topográfico para el 

• Mejoramiento Descarga 

miento y Selección de 

Compañía Minera 

control de estabilidad de 

de Acido Aglomeración

Alternativas Paso a  

Antamina 

taludes en la carretera 

• Sistema Protección 

Desnivel Zona de Bota-

Bajo el Contrato Marco 

de acceso a Antamina 

Contra Incendios Tanques 

dero Rumiallana

de Ingeniería se desarro-

así como la Topografía 

Almacenamiento Com-

• Ingeniería Básica  

llaron aproximadamente 

de Mina. Primer Con-

bustible Norte y Sur.

Ampliación Planta  

50 proyectos entre los que 

trato Marco de Manten-

Minera Santa Cruz S.A.

Victoria de 2000 a 4000 

podemos mencionar:

imiento Predictivo para 

• Se concluyó la Ingeniería  

TMSPD.

• Ingeniería Conceptual 

los servicios Monitoreo de 

de Detalle Proyecto  

• Estudio Técnico Automa-

Variante a Laguna Canrash

condición a los equipos  

San José

tización de los sistemas 

• Proyecto Nuevas Facili-

y componentes estruc-

BHP Billiton Tintaya S.A.

de bombeo de la Planta 

49

dades Yanacancha

turales de Antamina.

Bajo el Contrato Marco  

Concentradora de la 

• Proyecto ampliación capa-

Sociedad Minera Cerro 

de Servicios:

Unidad de Producción.

cidad Planta de Nitrógeno

Verde S.A.A. 

• Supervisión y Asegura-

Río Tinto Minera Perú 

• Revisión de Estándares y 

Bajo el Contrato Marco de 

miento del control de cali- 

Limitada S.A.C.

Especificaciones

Ingeniería se desarrollaron 

dad de los trabajos para 

Bajo el Contrato Marco  

• Optimización del sistema 

40 Proyectos resaltándose:

la Elevación del nivel 4000 

se desarrollaron los  

de reactivos 3ra. Etapa

• Ingeniería Nuevo Labora-

a 4005 de la Presa de 

siguientes Proyectos:

• Nuevo Taller Bahía de 

torio Químico para Lixi-

Relaves de Camacmayo.

• Ubicación Pista de 

Llantas

viación y Concentradora

Compañía Minera  

Aterrizaje La Granja

• Mejoramiento del Sistema 

• Nuevo Tanque de Acido 

Volcán S.A.A. 

• Ingeniería Rehabilitación 

Contra Incendio 

en Matarani (10000TM)

• Ingeniería de Detalle 

Carretera Querocoto-La 

Cemento Andino 

Tarma, Perú

Minera Santa Cruz 

Argentina

25

36

64

Granja y Supervisión de 

Primax

que podemos destacar:

120+00 al Km 140+000.

las Obras.

• Nueva Planta de Recep-

• Ingeniería de Detalle para 

• Se continuó la Supervisión 

• Ingeniería y Supervisión 

ción, Almacenamiento  

Agitadores 

de la Obra de Rehabili-

Ampliación Campamento

y Despacho de  

• Conversión del tanque 

tación y Mejoramiento de 

• Ingeniería de Detalle Elec-

Productos de Petróleo.

diesel en gasolina BTX

la Carretera Aguaytia- 

trificación Comunidades 

Logística Químicos  

• Adecuación de Cubeto 

Pucallpa Tramo III:  

vecinas a La Granja 

del Sur LQS

a Estándares de Repsol 

Neshuya-Pucallpa.

Doe Run Perú

• Diseño Integral de las 

(Cubeto modelo)

Minera Yanacocha S.R.L.

• Se inició el servicio de 

Instalaciones del Terminal 

Pluspetrol Perú  

• Se inició la Supervisión  

Ingeniería de Detalle  

NaSH

Corporation

de la Construcción de  

de las Obras fuera del  

Cemento Andino S.A.

• Se inició el Contrato de Ser-

la Carretera Chilete  

límite de bateria del  

• Contrato de Locación de 

vicios de Ingeniería para la 

San Pablo Yanacocha 

Contrato de Fleck  

Servicios de Limpieza 

Planta de Gas en Malvinas 

(Carretera Kuntur Huasi).

Chemical Industries.

Industrial y Manejo de Re-

y Planta de Fraccionami-

GyM 

Marcobre S.A.C.

siduos a cargo de nuestra 

ento en Pisco Lote 88.

•  Reconocimiento del Trazo, 

Se inició el Estudio de  

subsidiaria Ecotec S.A.

inspección geotécnica 

Infrastructura y  

Concesión del Sistema de 

Factibilidad Definitivo de  

la Mina Justa.

Bear Creek Mining  

Corporation

• Estudios de Ingeniería 

Proyecto Corani

Edificaciones e  

Industria

Hidrocarburos

Transportes

Provias Nacional 

Petroperú S.A.

• Supervisión de Plan Piloto  

•  Supervisión de los trabajos 

del BID para la Evaluación 

de Remediación Ambien-

de Pavimentos Económi-

tal en Refinería La Pam-

cos de los tramos: 

pilla y su Planta de Ventas.

Capizapa-Picota, Tambo-

Refinería La Pampilla

Osno y Yauri-San Genaro.

Neptunia

Bajo Contrato Marco de 

• Supervisión de la Reha-

• Gerencia de Proyecto 

Ingeniería de Proyectos  

bilitación y Mejoramiento 

del Nuevo Almacén de 

de Inversión se desarro-

de la Carretera Casma 

Contenedores Vacíos  

llaron aproximadamente  

Yaután Huaraz, tramo: Yu-

en el Callao.

40 proyectos entre los  

pash Huaraz, Sector: Km 

Distribución de Gas Natu-

ral en los Departamentos 

de Ica, Ayacucho y Junín

• Actualización del Diseño 

Nuevo Terminal de  

Contenedores Muelle 

– Concesión Terminal  

Portuario del Callao

• Estudios de accesos  

y seguridad Lomas de 

Lachay

• Evaluación Geológica  

en Gabinete de Pipeline II  

de Camisea

26

17

10

10

Francisco  

Dulanto Swayne

General 

Manager

27

“

I recognize that in over 
0 years I’ve been with 
the Graña y Montero 
Group, the experiences 
and knowledge that 
my superiors have 
conveyed to me are the 
most valuable resource 
I could have received 
from them”
–		Francisco	Dulanto	Swayne,	

General	Manager

28

Petroleum 
Services

expansion of the aforementioned Terminal and the 

reception, storage and dispatch of sodium sulfhydrate. 

10

The start-up of operations at this new terminal is expected 

for the first quarter of the year 2007, through the new 

company “Logística de Químicos del Sur” (LQS / Southern 

Chemical Logistics).

For GMP, the year 2006 was once again a year with very 

In April of 2006 a contract was signed for the acquisition of 

good results, reflected in EBITDA of 20.8 million dollars, 

natural gas liquids separation and fractionation plants 

which is 6% more than that of the previous year; simulta-

from the electric company in Piura, Empresa Eléctrica de 

neously, it was a year in which important strategic 

Piura, by which we agreed to build a new plant to begin 

investments set about.

operating in April of 2008, processing 40 million cubic feet 

of gas per day and requiring an investment of approxi-

The results obtained for the year, the economic environ-

mately 4 million dollars.

ment and the political situation have permitted us to begin 

developing several investment projects. 

In February of 2006, a contract was signed with Minera 

Cerro Verde for the construction and operation of a 

sodium sulfhydrate terminal at the Matarani port.  This is a 

ten-year contract we are executing partnered with Santa 

Sofía Puertos and Oiltanking.  Additionally, in the month of 

November a 5-year contract was signed with SPCC for the 

Petroleum and 

Gas Production

Talara Gas Plant  

was 1.5 million Barrels, with 

were nationalized; however, 

(apr - dec)

average use of our installed 

by the end of the year the 

In the month of April 

capacity of 66%.

conditions pertaining to 

2006, operations of the 

It should be noted that 

this nationalization were 

The year’s production of pe-

existing natural gas liquids 

throughout the year, 

not yet defined and agreed 

troleum in Northwestern lots 

separation and fractionation 

operations involving the 

upon.  Throughout the year, 

I and V was a record 330,021 

plants commenced.  A 

reception, storage and Ilo-La 

operations of the pipelines 

Barrels.  The net unit value 

volume of 8,300 MMCF 

Paz transportation of Diesel 

and storage and dispatch 

of our crude oil basket in-

of gas was processed, 

2 were conducted for YPFB 

plants were carried out 

creased 22.14 % compared 

resulting in the production 

Bolivia. 

as usual.  The volume 

to the previous year.

of 228,700 barrels of natural 

Camisea Terminal In Pisco

transported through the 

The sale of Natural Gas was 

gas liquids (NGL) and 

During the year 153 

multipurpose pipelines was 

1,024 MM CF.

the sale of LPG and light 

shipments of products 

7.0 million barrels (23% 

solvents in the local market.  

(propane, butane, diesel 

more than in the previous 

In the second semester, the 

2 and naphtha) with a 

year) and the volume 

57

process engineering and 

total volume of 11.9 million 

dispatched from the plants 

Drilling

basic engineering designs 

barrels were dispatched.  

was 11.6 million barrels (24% 

During the year, 21 wells 

were drilled with a total 

depth of 82,813 feet.  Two 

of these were drilled in Lot 

I in order to develop the 

reserves of GMP S.A.

for the new plant were 

This volume represents 

more than in 2005).

outlined

an increase of 8% in 

CLHB is no longer 

Storage and Dispatch

comparison with the 

consolidated with the results 

In the year 2006, Consorcio 

previous year.

of GMP and a provision has 

Terminales (GMP-Oiltanking) 

CLHB (Bolivia)

been set up for the potential 

dispatched an average of 

It is public knowledge that 

impact of nationalization.

51,946 Barrels of derivatives 

on May 1, 2006, the Bolivian 

per day from the 9 terminals 

government issued a 

it operates in the country.  

decree by which 50% + 1 

The average storage 

of the shares of CLHB, as 

contracted by our users 

well as other companies, 

A

B

35

35

35

C

D

E

29

35

A   Planta de Gas Verdun 

Talara

B   Lote V pozo 289 

Piura

C   Planta de Gas Parinas 

Mollendo

D   Planta de Almacenaje y Despacho 

Mollendo

E   Terminal Marítimo de Camisea 

Pisco

0

17

10

10

Juan Manuel 

Lámbarri Hierro

General 

Manager



“

Within the organization 
itself, we have 
developed a course 
called Programming 
and Productivity which 
has enabled us to 
substantially improve 
the profitability of the 
company”
–		Juan	Manuel	Lámbarri	Hierro,	

General	Manager

2

Construction

for the Cerro Corona Project located in the department of 

Cajamarca.  Additionally, in the early months of 2007, we will 

10

be finishing the Civil Works and Mechanical Assembly for 

the San Cristobal Mining Project of APEX Silver in Bolivia.

Aligned with the government priority of expanding 

In the year 2006 GyM consolidated its leadership in the 

sanitation coverage in Peru, in the latter part of the year 

market.  It executed work projects for a record value of 0 

2006 we were awarded  important contracts for Sedapal 

million dollars, which is an increase of 62% compared to 

which will result in an improvement of services benefiting 

the previous year, and obtained after-tax profits of 2 

approximately 00,000 persons.

million dollars; that is, more than double the figure for the 

preceding year.  These results are backed by a consistent 

It should be noted that during the year we carried out a 

enhancement in our efficiency, reflected in a 6% gross 

program called Simplifica (Simplifying) conceived to 

margin and a significant backlog substantially composed of 

enhance our project management processes with the aim 

contracts with stable flows, in accordance with the 

of sustaining our future growth efficiently. 

strategy of the Group.    

In line with the Group’s Learning to Grow Strategy, GyM 

The most important contract obtained during the year is 

developed a training project at all levels of the company, the 

the Expansion of the Malvinas Gas Compression Plant for 

highlight of which was the training week called “Developing 

the Camisea project, which requires a high degree of 

the GyM Style”.  Through this event, 62 young professionals 

specialization.  In this case, our company assumes this 

who had recently joined the company received an average 

challenge taking responsibility for the entire project. 

of 50 hours of training each.

In line with the strategic objective of specializing in mining, 

in October our company was awarded a contract on the 

construction of the Civil Works and Mechanical Assembly 

Southern Peru 

Nueva Fundición de Ilo

Sector Energía

Pluspetrol Norte 

Mantenimiento de Carre-

teras y proyectos varios.

Pluspetrol 

Obras Civiles Ampliación 

Instalaciones de Malvinas.

Enersur  

EPC de la Planta de Gas y 

Obras Civiles de la Estación 

Generadora de Chilca.

Cálida 

Red de Distribución de Gas 

en Lima

Sector Minería

Minera Yanacocha 

Obras Civiles Gold Mill

Minas Buenaventura 

11,610 m de túneles y 520 

m de chimeneas en Orco-

pampa y 362 m de túneles 

en Poracota

Minera El Brocal 

Tajo abierto por un plazo de 

3 años 

Cerro Verde 

Planta de Sulfuros

Minera San Cristóbal 

Obras Civiles y Montaje 

Mecánico

Minera MILPO  

Presa Cerro Lindo

Minera Antamina  

Estanques en Huarmey

Sector  

Infraestructura

Sector Edificaciones 

y Desarrollos  

Inmobiliarios 

IIRSA Sur -Tramo 2 

Corporación Wong 

Urcos-Ocongate- 

6 mil metros cuadrados 

Quincemil-Inambari

techados en diversos 

IIRSA Sur-Tramo  

locales.

Inambari-Santa Rosa- 

Tejidos San Jacinto 

Puerto Maldonado-Iñapari.

Ampliación de almacenes

IIRSA Norte 

Centro de  

Paita-Piura-Bagua-Rioja-

Entretenimiento Larcomar 

47

Tarapoto-Yurimaguas.

Fashion Center

Sedapal 

Edificio Residencial  

Lotes 6 y 7. Conexiones 

Bolognesi 

domiciliarias de agua y de-

Miraflores

sagüe para 30 mil viviendas.

Edificio Residencial  

Norvial 

Terrazas de San Felipe 

Carretera Huacho-Pativilca. 

Jesús María

Ejecución de los Puentes 

Edificio Real 0 

Huaura y Pativilca. 

Oficinas en San Isidro

Universidad de Piura  

Nuevo local en Monterrico

B



D

35

A

AC

35

35

E

A   Cerro Verde 

Planta de Sulfuros

B   Minera Yanacocha 

Obras Civiles Gold Mill 

C    Minera San Cristobal 

Obras Civiles y Montaje

D   Carretera IIRSA Norte 

Tarapoto -Yurimaguas

35

E   Edificio Residential Terrazas  

de San Felipe 

Jesús María

4

concar

17

10

10

Jaime  

Targarona

Arata

General 

Manager

5

“

In Highway Concession 
Operations, we have 
obtained valuable 
knowledge in recent 
years that we are 
committed to structuring 
and developing”
–		Jaime	Targarona	Arata,	

General	Manager

6

concar

Highway 
Operation and 
Maintenance

May of 2006, but had a one-year extension or until it is 

handed over to a new concessionaire.  The income from 

10

this concession increased by over 5%, while those of the 

Ovalo Gutierrez Concession rose 6% in comparison with 

the previous year.

The year 2006 was of paramount importance to CONCAR.  

These results allowed CONCAR to grow more than 

In April, work was initiated on the Operation and 

00% in 2005.  This significant growth has been reflected 

Maintenance of the Northern IIRSA Highway - the most 

in the strengthening of our team of professionals 

important of our projects- which is a concession for the 

throughout the year.

operation and maintenance of a ,000 Km highway, the 

longest highway in the world.  

The new Administration intends to continue with the 

infrastructure concessions program; for 2007, calls for 

In the last quarter of 2006, Graña y Montero S.A.A. was 

tenders are scheduled for the following projects:  IIRSA 

awarded the Concession Contract for the Buenos Aires – 

Center, Road Network # , Road Network # 4 and Sections 

Canchaque highway in the department of Piura, which 

 and 5 of the Southern Interoceanic Highway, in addition 

pertains to the “Costa Sierra” (Coast-Highlands) group of 

to  or 4 projects pertaining to the Coast – Highlands 

projects that are to support the “Sierra Exportadora” 

Program.  Considering that participation in this type of 

(Exporting Highlands) program that the government is 

projects fits in with one of the main strategies of the 

fostering. CONCAR will be the company in charge of the 

Group, the generation of stable flows, we are confident 

operation and maintenance of this highway once it is built. 

that CONCAR shall continue to be one of the companies 

We also continue providing operation and maintenance 

the company’s skills and leadership continue to be 

services on the Norvial S.A. highway that joins Ancon, 

demonstrated in the highway concession business in Peru.

with the greatest growth opportunities in the long term, as 

Huacho and Pativilca, as well as the Arequipa Matarani 

Highway Concession, that was expected to be finished in 

The current concession and operation contracts are 

described below:

Arequipa – Matarani 

Contract on the Opera-

Contract on the Oper-

Concession for 

Highway Concession

tion and Maintenance 

ation and Maintenance 

the Ovalo Gutierrez 

of the Ancon – Huacho 

of the Northern IIRSA 

Parking Garage

– Pativilca Highway

Highway between 

During 2006, revenue from 

traffic related to this 100.7 

During 2006, CONCAR 

Paita and Yurimaguas

CONCAR has the 30-year 

Km highway concession 

satisfactorily carried out the 

On April 12, 2006, CONCAR 

Concession Contract on this 

increased by more than 

Operation and Maintenance 

satisfactorily started out 

underground parking garage 

15% in comparison with the 

of the 182.66 Km highway 

works on the Operation and 

built in an 8,200 m2 area 

previous year.

and also assisted its con-

Maintenance of the North-

under the Ovalo Gutierrez 

cessionaire, Norvial S.A., in 

ern IIRSA highway, which is 

traffic circle, with space for 

preparing procedures for 

nearly 1000 Km long.

220 vehicles.

47

technical solutions that im-

proved the service provided 

to the users and enhanced 

relations with them.

A

B

C

D

24

22

22

35

E

7

A   Peaje de la carretera 

  Arequipa - Matarani

B   Operación de la carretera IIRSA Norte

C   Nuevo Pavimento de la Carretera  

Piura - Paita

D   Construcción del nuevo puente  

del río  Pativilca para Novial

E   Mantenimiento carretera IIRSA Norte

 
8

17

10

10

Antonio  

Rodríguez  

Canales

General 

Manager

9

“

Our daily task is to be 
an organization with the 
capacity to innovate and 
lear”
–		Antonio	Rodríguez	Canales		

General	Manager

40

Entertainment 
Center

These strategies have made it possible to maintain a 98% 

occupation rate of the areas available for leasing during 

10

2006, and to open the Fashion Center in December with 

95% of its new stores leased, with a conservative forecast 

of 40% growth in total sales for 2007. 

During the year 2006, Larcomar consolidated its leadership 

The total activity of the company for the year amounted to 

as the best tourism and entertainment center in Peru, 

US$ 6. million, which generated EBITDA of US$ 2.9 million, 

expanding its commercial area with the opening of 46 new 

2% and % more than in the year 2005 respectively.  All 

stores and increasing its area available for leasing by 25%.  

commitments related to the structural debt, which was 

reduced by US$ 2.9 million, were fulfilled punctually. 

The commercial management of Larcomar, oriented toward 

offering the best experience in an atmosphere of quality and 

Over the past few years, with the collaboration of 98 

security, has triggered a 5-million visitor rate, including 500 

workers, the organization has gained considerable 

thousand tourists during the year 2006, which was 4% more 

experience that has been reinforced with 25 man hours of 

than in 2005 and enabled our operators to invoice a total of 

training and leadership programs.   

US$ 29 million dollars,  0% more than in the previous year.  

The thriving results obtained over the past 4 years 

A very important aspect of the operations at Larcomar has 

combined with a committed organization enable us to 

been the success attained by inserting it in a tourism circuit, 

forecast future growth in the shopping and entertainment 

introducing Larcomar as the modern facet of the city of 

malls industry as well as in tourism, generating an increase 

Lima, a concept which has been endorsed by major travel 

in stable flows and the generation of real estate and 

agencies, hotels and public institutions and is disseminated 

construction synergies with our shareholders.  

in international fairs and important tourism forums.  

HushPuppies

Café Café

Mangos

Makoto

Aura

Gótica

UVK

Anunciadores y  

Franquicias

Backus

Phillip Morris

Telefónica

Claro

La Dama Juana

47

Principales  

operadores, 

Florsheim

Alpaca 

Swatch

Nike

Timberland

Air Sport Club by Nike

Pizza Hut

Liliana Castellanos

Burger King

GMO

NU

Íbero

KFC

Bembos

Starbucks

Giuliana Testino

Tony Romas

Tatoo

Laritza

 
4

42

43

8

8

8

8

44

Business Social 
Responsibility                          

32

Our Strategic Plan reflects our belief that the development of 

based on our principal values, which are Quality, Compliance, 

our prestige is based on reinforcing our Values, among which 

Reliability, and Efficiency. 

our Business Social Responsibility Policy - mainly focused 

on education - stands out.  

Therefore, during the year the different companies that make 

up the corporation promoted specific actions in the areas of 

During the year 2006, in cooperation with the Universidad del 

Human Resources, Risk Prevention and the Environment, 

Pacífico (University of the Pacific), a Handbook for the 

Knowledge Management and Community Relations. 

Selection and Management of Social Responsibility Actions 

was designed for use by Project Managers with the aim of 

Internally, our personnel are the main target group of this 

increasing efficiency in the selection of social actions that 

responsible social behavior; externally, it is the different 

they may carry out throughout their projects.  

sectors, such as the community, shareholders and clients, 

with which the group has ties in carrying out its operations.   

The Letter of Ethics, signed in 1995, the Risk Prevention Policy 

52

(1999) and the Environmental Policy (1998) form part of this 

In the year 2006, the Group’s Knowledge Management 

process and have set clear behavioral guidelines when 

Program has been given new emphasis with the “Learning to 

dealing with our clients, shareholders, personnel and 

Grow” project, which we believe will be the key to future 

community. 

growth, as explained further on in this report. 

During the year 2004, Graña y Montero joined The Global 

Compact promoted by the Secretary General of the United 

Nations as a demonstration of our commitment to the social 

and environmental aspect of the company.  The commitment 

to continuously support this Compact is reflected in the 

company’s current policies practiced by all employees 

through Good Corporate Governance and a daily attitude 

 
45

Luis Díaz 

Imiela-Gentimur

Director of the 

Corporate Learn-

ing Center.

“

We have enhanced the Group’s  
Knowledge Management with the project 
‘Learning to Grow’, which is the key to 
 future growth.” 

74

33

1. The Human Resource 

The personnel who work for the company are the primary 

target group of the Business Social Responsibility policy; 

therefore, they are given top priority in the set of policies and 

programs that guarantee their development and welfare as a 

basis for their good performance and satisfaction. 

During the year 2006, a series of recommendations stemming 

from the Organizational Climate studies conducted at GyM 

and GMD with highly satisfactory results were implemented.  

These studies shall be conducted annually for the purpose of 

satisfying needs and handling recommendations proposed, 

which will in turn lead to an even better Organizational Climate 

in all aspects of the Corporation.  

38

Organizational Climate Survey

Distribution by Age Group

Satisfaction

Working Spirit

Relation with management

Organization of Work 

(methods, tools)

71.0%

73.5%

69.5%

66.0%

46

10

37

From 20 to 30 years of age

From 31 to 40 years of age

From 41 to 50 years of age

From 51 to 60 years of age

From 61 to 65 years of age

66 years of age or more

736

916

  445  

222  

27  

17    

31%

39%

19%

9%

1%

1%

Among the many results of these studies, one that merits special mention is that 74.5% of our employees feel proud of the 

achievements of the companies for which they work.  

In order to foster personal welfare among the Group’s manual laborers, numbering over 8,000 during the year, the company 

developed a sound, annual Preventive Training program within our integrated Risk Prevention and Environmental Management 

system. 

23

13

12

47

Erika Pastor 

GyM 

Project Manager

“

Our staff is the number one priority  
within the Social and Business  
Responsibility policy, thus guaranteeing 
their development and welfare.”

74

33

48

Statistics – Training

t
n
e
m
e
g
a
n
a
M

10

4

3

17

34

3

37

0

0

0

0

Employees (Payroll)                               

Engineers with Postgraduate 

Degrees

Other Professionals with 

Postgraduate Degrees

Engineering Professionals

Other Professionals

Total Professionals

Technicians

Total Employees

49

Laborers

Skilled Laborers

Unskilled Laborers

Sub-Contractors

Total Laborers

GyM

GMD

GMP

GMI

Concar

Total

r
a
m
o
c
r
a
L

10

39

16

3

402

106

550

140

690

1,013

3,385

914

5,312

11

457

55

539

296

835

0

0

0

0

14

1

48

19

82

92

174

149

0

0

149

6

3

96

15

120

42

162

73

0

0

73

2

0

27

12

41

371

412

0

0

0

0

0

4

3

7

14

39

53

0

0

0

0

87

26

1036

231

1380

983

2,363

1,235

3,385

914

5566

Total Personnel

37

6,002

835

323

235

412

53

7897

Interns

Independent Professionals

Total

0

0

0

48

6

54

34

8

42

2

2

4

1

150

151

1

0

1

2

0

2

88

166

254

Overall Total

37

6,056

877

327

386

413

55

8151

49

10

Statistics – Headcount

10

Organization

Headquarters

Projects

Total

Gender

Male

Female

Total

Hierarchy

47

Upper Management

Employees

Interns

Independent Professionals

Laborers

Total

e
t
a
r
o
p
r
o
C

t
n
e
m
e
g
a
n
a
M

37

0

37

26

11

37

23

14

0

0

0

37

GyM

GMD

GMP

GMI

Concar

Total

r
a
m
o
c
r
a
L

124

566

690

569

121

690

6

684

48

6

5312

6,056

182

653

835

271

564

835

6

829

34

8

0

877

49

125

174

150

24

174

9

165

2

2

149

327

88

74

162

125

37

162

3

159

1

150

73

386

4

408

412

356

56

412

2

410

1

0

0

413

21

32

53

38

15

53

9

44

2

0

0

55

505

1,860

2,365

1,535

828

2,363

58

2,305

88

166

5,534

8,151

 
50

José Gastulo  

Worker

“

672,376 hours have been invested by  
approximately 8 thousand workers, while 
adhering to the fundamental principles of 
safety in the workplace and respect for 
the environment.”

10

33

51

2. Risk Prevention and the Environment  

striven to work abiding by the fundamental principles of safety 

in the workplace and respect for the environment.

Graña y Montero is fully committed to leadership in 

Corporation has enabled us to end the year 2006 with zero 

environmental performance and risk prevention through its 

environmental incidents and an accident frequency rate of 

Integrated Management System applied to all sectors where 

0.69, a value within the range of optimum international 

The commitment of our personnel to the policies of the 

its activities are conducted, thereby creating value for its 

standards.

clients, personnel, shareholders and neighboring communities.  

This philosophy is a significant part of our Business Social 

The investment that our organization makes to guarantee the 

Responsibility Policy. 

health and safety of its workers is reflected in the 

establishment of a preventive culture and the protection of 

Maintaining responsible conduct regarding the environment 

workers from work-related risks and the associated 

58

and the health of the workers while carrying out their activities 

environmental risks. In this regard, during the year 2006, nearly 

is a traditional practice among all of the employees at the 

630 thousand hours were invested in instructing and raising 

Graña y Montero Corporation.  It is a principle upon which our 

awareness among our personnel on work-related risks, as well 

Risk Prevention and Environmental Policies are based.

as approximately US$ 4 million in the acquisition of personal 

In order to guarantee the fulfillment of this commitment, our 

organization has an integrated risk prevention and 

Throughout the year, these results have merited recognition 

environmental management system developed according to 

from our clients who, in virtue of our effort, have renewed and 

the guidelines of OHSAS 18001 and ISO 14001 standards, 

granted us new contracts, thereby extending our commercial 

and collective protection equipment.

which is audited annually by the IDB, thereby enabling us to 

relationship. 

show evidence of effective, efficient implementation. 

During the year 2006 the Graña y Montero Corporation 

invested 627,376 hours in training on Risk Prevention and 

Environmental Management for its 8,000 workers, who have 

 
52

10

10

3. Knowledge Management

employee back in 2005. Of this training, 64% was in-house in 

the Young Engineers, Professional Development and 

Collective Memory programs. 

The commitment toward Knowledge Management, as the core 

Within this training, programs that merit special mention are 

feature of the group’s development, received new emphasis 

the “Developing the GyM Style” program for our Young 

this year with the launch of the “Learning to Grow” strategy. 

Engineers, which was rolled out in the second semester and 

This includes handling the different areas of knowledge of the 

included a one-week retreat, and the “Development of Young 

Group in a professional manner and training the members of 

Project Managers”, which is to start in the coming months 

the organization to strive for cultural change and to consolidate 

with the collaboration of a well-known postgraduate school. 

the group as an “organization that learns”. 

As a result, the growth rate of training during the year was 80% 

In terms of knowledge management, the companies have 

compared to 2005 and the companies have formed a Board of 

worked on their respective information systems allowing them 

Directors at the Corporate Learning Center (known by its 

to make the knowledge generated in their operations 

Spanish acronym, CCA)- made up of the General Managers 

available to all employees, as well as informative bulletins on 

and the Human Resources Managers- for the purpose of 

relevant occurrences. Additionally, during the year, 20 talks 

developing mechanisms for the “Learning to Grow” program. 

were given on collective memory regarding the most 

interesting projects of the Group. 

In 2006, 80,478 man hours were spent on training; that is, a 

ratio of over 35 hours per employee, compared to 24 hours per 

Training

Man Hours

GyM

GMD

GMP

GMI

Concar

Total

r
a
m
o
c
r
a
L

Description

Basic Program – Young Engineers

Professional Development

6,504

19,477

756

5,648

250

9,139

880

9,247

372

0

11,680

3,756

36,108

18,456

13,145

5,761

3,717

1,638

92

314

238

754

38

3,324

4,354

826

736

190

902

2,654

12,291

37,392

1,572

29,223

80,478

Collective Memory

External Training

Overall Total

Promedio Mensual de empleados

Ratio = 

Hours of Training / Employees

49.16

22.15

43.82

67.7

16.4

49

35.36

Risk Prevention and Environmental Man-

agement - Laborers

593,107

0

24,232

1,199

8,792

46

627,376

46

27

53

10

74

33

Javier Sánchez  

Pisco Terminal 

Supervisor

“

Each company has worked on its respective 
information system, allowing the knowledge 
generated to be made available to all the 
employees.”

54

Juan José  

Arrieta 

GyM Human 

Resources 

Manager

“

In 2006, we benefited approximately 
14,000 persons with a series of activities 
aimed at the Community and the 
Environment, as well as 6,000 more with 
specific actions in the field of education.” 

33

55

10

10

4. Community Relations

It should be noted that the training programs are being 

carried out in remote communities such as Andoas in Loreto 

or Potosí in Bolivia, in order to incorporate as many workers 

Community relations, especially in the execution of projects, 

as possible from the places in which we operate.

should be developed in a positive atmosphere of harmony 

and mutual respect, within which the company promotes and 

During the year 2006, with our Social Responsibility program, 

carries out activities that contribute to the sustainable 

approximately 14,000 persons benefited from several actions 

development of the communities where it operates. These 

within the Community and the Environmental area. In the area 

40

situations are analyzed previously based on the Social 

of Education, approximately 6,000 persons have benefited 

Initiative Management Guide designed in cooperation with the 

and 494,997 hours of training have been provided. 

Universidad del Pacífico (University of the Pacific).

Based on our Social Responsibility practice, the companies in 

local populations in the immediate area of influence of the 

the Group make a contribution to the development of these 

projects we executed, as described below. 

During the year, different activities were carried out among the 

communities that goes beyond the time period during which 

they are working in these areas. Specifically, they ensure that 

these actions are related to the areas of Education, the 

Community and the Environment. 

Community

Initiative

Target Group

Location

Support for the Preventive Program 

Youths from 12 to 16 years of age 

Puente Piedra  / Lima 

“Adolescent Stage of Life” at the 

MINSA Hospital in Puente Piedra: 

stadiometers, scales and career 

counseling provided.

Repaired water connections and 

Local Public Shools  

Puente Piedra - S.J. de 

replaced plumbing hardware at public 

Lurigancho- Independencia -Comas / Lima 

35

schools.

Promotion and hiring of local suppliers 

 Small and Micro Businesses 

Puente Piedra / Lima

of: concrete boxes and lids, uniforms 

and metallic carpentry.

Generation of direct employment with 

Unemployed local residents 

Puente Piedra / Lima 

suppliers 

 
 
56

10

Community

10

Initiative

Target Group

Location

Children’s Christmas show and 

Children of the area 

Puente Piedra - Valle Chillón / Lima 

donation of gifts in coordination with 

the Hospital in Puente Piedra.

Economic support for the “II Happy 

Local Community 

Faces Campaign” to provide medical 

care to patients with cleft lip and other 

congenital malformations.

Cajamarca 

Oral Health Campaign: Distribution of 

Local Populations 

San Cristóbal; Río Grande and 

packets of oral hygiene products.

Culpina / Bolivia

Refurbished desks and chairs.

CEI “Vista Alegre” School

Orcopampa / Arequipa

Donation of classroom furniture: desks, 

C. E. No. 4021 School in Parque 

Ventanilla / Lima

metal file cabinet, table and chairs.

Porcino

Implementation of computer laboratory: 

“Virgen del Carmen” School

Colquijirca settlement / Cerro de Pasco

desks and computers.

Training: “Handicrafts Workshop”.

Women in the Glass of Milk Program

Colquijirca settlement / Cerro de Pasco

Follow-up on project for the Creation 

Local Population

Colquijirca settlement / Cerro de Pasco

and Generation of Sources of 

Employment in Guinea Pig Breeding.

Christmas celebration.

Children at the schools with which we 

El Valor - San Juan de Chiple

worked during the year 2006.

Christmas celebration.

Boys and Girls of the villages, 

Toll Booth Project in Moyobamaba, 

pre-schools, and schools near the toll 

Aguas Claras, Pedro Ruiz, Bagua, 

booths.

Pucara,Olmos, Chulucanas, Paita, 

Pesaje Bagua, Pacayzapa C-21 

settlement

 
 
 
 
 
Education 

Initiative

Target Group

Location

57

10

Leadership Development.

Community Leaders

Puente Piedra- San Juan de Lurigancho-

Comas-Independencia / Lima 

Recruitment and selection of 

Coordinators of the five plans in Puente 

candidates in coordination with 

Piedra (leaders elected by grassroots 

leaders of neighborhood grassroots 

organizations and recognized by 

organizations to establish groups for 

Puente Piedra City Hall)

19 workshop courses. A meeting was 

held with the coordinators of the five 

plans in order to distribute the number 

of persons that would participate 

per plan, based on social conditions, 

giving priority to persons who were 

unemployed and needed help, since 

upon completion of the workshop 

and evaluation of the participants who 

passed, there would be opportunity for 

employment with the company. 

79

Theory and Practical Job Training 

Unemployed Local Residents

Puente Piedra / Lima 

“Installation of Drinking Water and 

Sewage Systems” 

Convention: ”Water Fair”: Exhibition 

Local Population: Homemakers and the 

Puente Piedra / Lima 

of sanitary products and training on 

General Public 

ecological alternatives and sanitary 

installations 

Cultural Forum: “Towards a New Water 

Community Leaders

Puente Piedra / Lima 

Culture” 

Support for the program “Show me 

Youths at Risk

Zapallal - Puente de Piedra / Lima

your Job” at the Zapallal police station 

by holding a workshop, “Basic Civil 

Works Course” taught by instructors 

from GyM.

 
58

10

Education 

Initiative

Target Group

Location

Workshop Seminar on Property 

Leaders of Associations and shanty 

Puente Piedra / Lima 

Registration as a contribution to the 

towns

titling process.

Community leaders and members of 

 Puente Piedra / Lima 

associations

Information Technology - Internet  

Students of Public School No. 82891 El 

Cajamarca

Course.

Tambillo – District of Chetilla, Cajamarca

Students in the last semester at the 

Volunteer Teaching: keynote lectures 

Engineering School of the Universidad 

Cajamarca 

provided by GyM engineers on current 

Nacional de Cajamarca (National 

subjects for students in the last 

University of Cajamarca)

semester of Civil Engineering at the 

Universidad Nacional de Cajamarca 

(National University of Cajamarca)

Volunteer Teaching: Keynote lecture on 

and Auto Mechanics program at 

 Potosí, Bolivia 

“Risk Prevention” 

SENATI 

Students from the Industrial Electricity 

Local Population 

79

Theory and Practical Job Training 

in “Training Workshops for Pipeline 

Welders, Structure Welders, 

Maniobristas and Oxigenistas” 

Theory and Practical Job Training: 

“Basic Training Workshops on 

Mechanical Assembly” 

Theory and Practical Job Training: 

“Training Course for Construction 

Workers – Metalmechanics” for natives.

Local Population 

Native Communities

Uyuni, Bolivia 

Andoss / Iquitos

Iquitos 

Training “Workshop on Jam Making” 

Chilcaymarca- Orcopampa/ Arequipa 

Mothers in the Glass of Milk Program

Talks on Communication and Family 

Chilcaymarca- Orcopampa/ Arequipa

Community

Violence

Local Population

Educational talk on “Raising Pigs”

Colquijirca settlement / Cerro de Pasco

 
 
Education 

10

Initiative

Target Group

Location

59

10

Talk on “Sexually Transmitted Diseases 

Mothers in the Glass of Milk Program 

Colquijirca settlement / Cerro de Pasco

– AIDS” 

Talk on “Cancer Prevention” 

Mothers in the Glass of Milk Program 

Colquijirca settlement / Cerro de Pasco

Training: “Dessert Making Workshop”

Mothers in the Glass of Milk Program 

Colquijirca settlement / Cerro de Pasco

and children’s dining hall

Talks on “Responsible Sexuality”

4th and 5th-year high school students 

Colquijirca settlement / Cerro de Pasco

at the José Carlos Mariategui school

Talk on “Self-esteem and Leadership” 

Students at the José Carlos Mariategui 

Colquijirca settlement / Cerro de Pasco

school 

Job Training Workshop on “Knits for 

Adult Women

Colquijirca settlement

Export” 

Theory and Practical Job Training: 

Local Community

Chavín / Ica 

“Basic Training Workshops: Masonry, 

Carpentry and Safety”  

Job Training Workshop: “Food 

Mothers Clubs

Yambrasbamba  / Ica 

Handling” 

Owners of Boarding Houses

Basic Training Workshop: 

Local Young Population

Ilo, Moquegua

“Metalmechanics Assistants” 

TECSUP –GyM Theory and Practice 

Civil Construction Workers

Arequipa 

Training: “Polyvalent Workers, Civil 

Construction, Assembly and Alignment” 

Volunteer Teaching: “Seminar on Social 

Security” given by a GyM Social Worker 

Students at the School of Social 

Arequipa 

Historic Sciences of Univ. San Agustín 

Implementation of a computer 

in Arequipa 

laboratory: desks, computers, printer, 

Server and network wiring 

“Sta. Maria de los Ángeles” Primary 

Arequipa 

School

60

10

Education 

Initiative

Target Group

Location

Motivational Workshop: “Senior Citizens 

Senior Citizens at Surquillo Health 

Surquillo, Lima 

“.

Center 

Personal Development Workshop: 

Network of Workers against Family 

Miraflores, Lima 

“Communication and Conflict 

Violence and Chile Abuse 

Management”. 

Theory and Practical Job Training: 

Neighborhood Organizations

Downtown Lima 

“Basic Training for Civil Construction 

Laborers”.  

Talk given to our insured workers 

General Public

to provide information on benefits 

provided by ESSALUD.

Preventive Health Program by raising 

General Public 

awareness among workers on the 

importance of preventing tuberculosis. 

Preventive Health Program through 

General Public

pre-employment examinations and 

vaccination against yellow fever, tetanus 

and rubella. 

Drafting of files containing social 

General Public

information on workers for use in 

socioeconomic study.

Condorcocha

Tarma

Condorcocha

Tarma

Condorcocha

Tarma

Condorcocha 

Tarma

79

Social Projection Program contributing 

Mothers of the Community of 

Tarma, Junín

to the formation of small family 

Condorcocha

businesses   -Workshop on Art and 

Handicrafts. 

Self-awareness and Self-knowledge 

General Public

Workshop, stimulating and improving 

self-esteem. 

Condorcocha, Tarma

Huaraz

  
61

10

Education 

10

IInitiative

Target Group

Location

Relaxation Workshop, with exercises to 

General Public

Huaraz

relieve muscular tension and stress.

Workshop - Alcohol and Alcoholism, 

General Public

raising awareness among workers to 

change attitudes about alcohol.

Condorcocha, Tarma

Huaraz

Workshop – Alcohol and alcoholism, 

Mothers of the Community of Condor-

Condorcocha - Tarma

discussing “The Effects of Alcoholism 

cocha

on Families”  

Workshop – Human Sexuality, 

General Public

brainstorming on risk behaviors.

Condorcocha, Tarma

Huaraz

Workshop – Human Sexuality, 

Mothers of the Community of Condor-

Condorcocha, Tarma

brainstorming on risk behaviors.

cocha

Workshop – Human Sexuality, 

Students at the “Antenor Rizo Patrón” 

Tarma

brainstorming on risk behaviors.

school

Workshop -  Conditioning factors in the 

General Public

consumption of drugs, discussion on 

the issue.

Condorcocha, Tarma

Huaraz

Preventive Health Program, 

Mothers of the Community of Condor-

“Santa Teresa” Medical Center in Tarma.

Prevention and Screening – Cervical 

cocha

and Breast Cancer .

Children’s Christmas show and 

Children of the Community of Condor-

Tarma

refreshments (hot cocoa)

cocha

Condorcocha

  
62

10

Environment 

10

Social Initiative

Target Group

Location

Manufacturing and installation of 

Local Population 

San Cristóbal,Bolivia 

dumpsters.

Provided machinery and equipment 

Local Owners’ Association                              

Puente Piedra / Lima 

for the reopening of the Copacabana 

Local Population

Las Viñas drainage channel, at the 

request of the “San Lorenzo Irrigation 

Association” in coordination with area 

residents.

Refurbishing of restrooms.

C.E.I  337 Paul Harris School in the 

Ilo, Moquegua

province of Ilo 

Donation of Recycling Bins in 

“José Carlos Mariategui” School

Colquijirca settlement / Cerro de Pasco

coordination with the Student Council.

Awareness-raising campaign for the 

Local Population and Authorities 

San Cristóbal, Bolivia 

conservation of the environment.

Educational and hands-on lecture 

Primary school students at the Cruce 

El Valor -Utcubamba Amazonas 

about water and environmental 

Cayalti school   

conservation.

Educational and hands-on lecture 

Primary school students at the  San 

San Juan de Chiple- Cutervo – Jaen,  

about water and environmental 

Juan de Chiple school 

Cajamarca 

conservation.

Formation of Ecological Brigades.

Badges given to children chosen for the 

El Valor -Utcubamba Amazonas 

Ecological Brigade   

Formation of Ecological Brigades.

Badges given to children chosen for the 

San Juan de Chiple- Cutervo – Jaen,  

Ecological Brigade 

Cajamarca 

 
 
 
63

10

79

64

10

Corporate  
Governance

José Graña

President

Carlos Montero

Vice President

10

21

Roberto 

Abusada

Independent 

External Director 

In the year 1996 Graña y Montero became an open corporation 

the Best Annual Report, in recognition of the relevance, 

and issued shares on the stock market, implementing and 

transparency, clarity and auditability of the information, in the 

complying since that time with the principal Good Corporate 

Corporate Governance Contest organized by the Universidad 

Government Standards regarding transparency, representation 

Peruana de Ciencias Aplicadas (Peruvian University of Applied 

and information provided to the shareholders. 

Sciences).

During the year 2006, we consolidated our image among 

In addition to the Annual Report and the quarterly reports on 

Peruvian companies as a model in implementing the best 

the Group’s status, we constantly report to the market on 

Corporate Governance practices.  Throughout the year we 

important events of the Group.  For the second year, we have 

35

were invited to present and share our experience, as speakers 

issued a report on Compliance with Good Corporate 

at major events organized by the Colombian Stock Exchange 

Governance Standards, including additional information to that 

and the IDB in different cities in Colombia, including the II 

requested by Conasev and we have worked on improving our 

International Congress on Corporate Law held this last 

website, continually adding more information on the company. 

November in the city of Cartagena where we were invited to 

speak on our international experience. 

In 2006, our Regulations of the Shareholders Meeting and the 

It was also in 2006 that the company obtained the Award for 

management standards.  Through the Shareholder Service 

Board of Directors were enhanced, incorporating information 

21

10

Jean Louis

Dupoirieux

External Director

Mario Alvarado

Internal Director 

Augusto Baertl

Independent 

External Director 

José Chlimper

Independent 

External Director 

Teodoro E.

Harmsen

External Director

Hernando 

Graña 

Internal Director 

65

10

21

Office, we handled nearly 40 inquiries from minority 

Composition of the Board of Directors

shareholders.  Additionally, for the first time, our Board of 

As of December of 2006 the composition of the Board of 

Directors worked on a Self-Assessment Process, extending it 

Directors is the following:

to the Boards of Directors of the subsidiary companies and 

obtaining interesting conclusions that enabled us to make 

internal improvements.   

José Graña Miro Quesada  

José Chlimper Ackerman 

President 

Independent External 

Currently we have approximately 700 shareholders. On the 

Carlos Montero Graña  

Director  

company’s Board of Directors we have a majority of external 

Vice President 

Jean-Louis Dupoirieux 

directors who are not employees of the company, 3 of which 

Roberto Abusada Salah  

External Director  

are also independent, having been chosen for their 

Independent External 

Teodoro E. Harmsen  

professional quality and prestige, with no shares in the 

Director   

Gómez de la Torre     

company.  In March 2006, Mr. José Chlimper Ackerman joined 

Augusto Baertl Montori 

External Director  

the Board to replace Mr. Pyers Griffith Mostyn

Independent External 

Mario Alvarado Pflucker 

Director  

Internal Director  

Hernando Graña Acuña  

Internal Director 

66

10

10

Composition of the Board of Directors

Center and Banco Central de Reserva del Perú (Central Bank of 

Peru).  Director of Consorcio Exportador S.A. and GMD.

José Graña Miró Quesada, Chairman of the Board of Directors.  

Project Director at Vinci-Construction Grands Projets (France) 

Jean-Louis Dupoirieux, Director. Civil Engineer.  He is a 

Architect.  He is also, Chairman of the Boards of Directors of the 

and a Director of GyM.

subsidiaries GyM, GMP, GMD and CONCAR, and a Director of 

GMI and Larcomar.  Likewise, he is a Director of the publishing 

Teodoro E. Harmsen Gómez de la Torre, Director. Civil 

company, Empresa Editora El Comercio S.A., and  RELAPASA.

Engineer. CEO of GMI S.A. and Director of the Master’s 

Carlos Montero Graña, Vice President of the Board of 

Engineering at PUCP.  He is also an Honorary Member of the 

Directors. Civil Engineer.  Additionally, he is the Vice President of 

American Concrete Institute, of the College of Engineers and 

the Board of Directors of GyM and GMP, Director of GMD, GMI 

the Peruvian Academy of Engineering, among other 

and CONCAR.

distinctions. 

program DI.  Professor emeritus of the School of Science and 

Roberto Abusada Salah, Director. Doctor of Economics 

Mario Alvarado Pflucker, Director.  Civil Engineer with a 

64

(Cornell, USA).  Director of GMD, CONCAR, Mauricio Hochschild 

Master’s degree in Engineering Administration from George 

y Cía. Ltda. S.A.C. and Director of the Peruvian Institute of 

Washington University, USA.  Currently, he is also a director of 

Economics (IPE).

GMD, GyM, GMP, CONCAR, Larcomar, Norvial and America 

Augusto Baertl Montori, Mining Engineer.   CEO of Gestora 

Leasing.

de Negocios e Inversiones S.A. and of IMA Latin America Inc.  

Hernando Graña Acuña, Director. Industrial Engineer, with a 

Additionally, he is Chairman of the Board of Directors of 

post-graduate degree in Mining Engineering from the 

Agrícola Chapi S.A. and a Director of Interbank, GMP and 

University of Minessota, USA.  He is a Director of GMI, GMP, 

FIMA.

Ecotec S.A. and CONCAR.  Executive Vice President of GyM 

and CEO of Norvial S.A.  He is also a Director of CAPECO and 

José Chlimper Ackerman, Engineer with a Master’s Degree in 

TGP.

Economics and Business Administration from North Carolina 

State University. Chairman of the Board of Directors of 

Corporación Drokasa and of the Sociedad Agrícola Drokasa, 

where he also holds the position of CEO.  Director of Ace Home 

Committees

As of December 31, 2006, the composition of the Committees of the Board of Directors is the following:

Auditing and Processes  

Human Resources and  

Investment and Risk  

Committee  

Composed of:

Remunerations Committee

Composed of:

Committee

Composed of:

Roberto Abusada Salah

Augusto Baertl Montori

José Graña Miró Quesada

José Graña Miró Quesada

José Chlimper Ackerman

Hernando Graña Acuña

Jean Louis Dupoirieux

Carlos Montero Graña

Teodoro E. Harmsen Gómez de la Torre

12

67

21

Executive Commission

10

The Executive Commission, which is responsible for the coordination of the Group, is composed of 4 Executive Directors and 6 

General Managers of the companies in the Group. 

José Graña Miró Quesada 

Carlos Montero Graña 

Hernando Graña Acuña

Mario Alvarado Pflucker

Juan Manuel Lámbarri Hierro

Francisco Dulanto Swayne

Jaime Dasso Botto 

Walter Silva Santisteban Requejo

Jaime Targarona Arata

Antonio Rodríguez Canales

Principal Executives

President

Vice President

Director

Managing Director

General Manager  GyM 

General Manager  GMP

General Manager  GMD

General Manager  GMI

General Manager  CONCAR

General Manager  LARCOMAR

He has been working for the Graña y Montero Group since 

1974, and is also a Director of Consorcio Terminales and CLHB 

(Bolivia). He was the President of SPE (Society of Petroleum 

Engineers), Lima Section in 1991 and Director of the National 

Mario Alvarado Pflucker Corporate General Manager 

Society of Mining, Petroleum and Energy from 1993 to1994 

from 1997 up to date. He obtained a bachelor’s degree in 

and 2005 to 2006.

Civil Engineering from Universidad Ricardo Palma (Ricardo 

Palma University) and a Master’s Degree in Engineering 

Jaime Dasso Botto General Manager of GMD from 2000 

Management, specializing in Construction Management, 

up to date. He obtained a Bachelor’s degree in Electronic 

from George Washington University, USA. Currently, he is 

Engineering and a Master’s degree in Software Development 

also a Director of GMD, GyM, GMP, CONCAR, Larcomar, 

from Stevens Institute of Technology, USA. He was the 

Norvial and América Leasing.

Commercial Manager of GMD from 1994 to 1999. Currently, he 

Juan Manuel Lámbarri Hierro General Manager of GyM 

is also a Director of GMD.

from 2001 up to date. Civil Engineer, graduate of the Pontificia 

Walter Silva Santisteban Requejo General Manager of GMI 

35

Universidad Católica del Perú (Pontifical Catholic University 

from 1998 to 2005 and Managing Director from 2006 up to 

of Peru) and the Upper Management Program at the 

date. He obtained a Bachelor’s degree in Civil Engineering 

Universidad de Piura (University of Piura). He joined Graña y 

from the Universidad Nacional de Ingeniería (National 

Montero in 1982 and is currently a Director of GyM.

Engineering University). Currently, he is also a Director of 

Hernando Graña Acuña Executive Vice President of GyM. 

ECOTEC.

Industrial Engineer with a post graduate degree in Mining 

Jaime Targarona Arata General Manager of CONCAR since 

Engineering from the University of Minnesota, USA. He is 

August of 2005. Civil Engineer, graduate of the Universidad 

a Director of GyM, GMI, GMP, Ecotec S.A. and CONCAR 

Autónoma de Guadalajara (Autonomous University of 

and President of Norvial S.A. Additionally, he is a Director of 

Guadalajara), with an MBA from San Ignacio de Loyola 

CAPECO and TGP.

University. He has served as a Civil Engineer on different 

projects, as Commercial Manager of the Special Projects 

Francisco Dulanto Swayne General Manager of GMP S.A. 

Division of GyM and as the General Manager of Graña y 

since the company was founded in 1984. Director since 

Montero Mexico.

1988. He studied at the Universidad Nacional de Ingeniería 

(National Engineering University), ESAN and PAD Universidad 

de Piura (University of Piura Upper Management Program). 

Luis Díaz Olivero Corporate Finance Manager since 

68

Luis Díaz Olivero Corporate Finance Manager since 

December 15, 2004. Industrial Engineer with an MBA from the 

University of Pittsburgh. He has been working for the Group 

since 1993. He was the Finance Manager of GMP S.A from 

Kinship

1998 to 2000 and Finance Manager of GyM from 2001 to 2004.

Mr. José Graña Miró Quesada, Chairman of the Board of 

Directors, has first degree kinship with Mr. Miguel Valentín 

Miguel Valentín Ghezzi Business Development Manager 

Ghezzi, a Director of Concar and Larcomar and Business 

since October of 2006. Business Administration Degree from 

Development Manager at Graña y Montero, third degree 

the Universidad del Pacífico (University of the Pacific) with an 

kinship with Ms. Yamile Brahim Graña, shareholder of the 

MBA from Harvard Business School. He has been working 

company, and fourth degree kinship with the Director, Mr. 

with the Group since November of 2004. He is a Director 

Hernando Graña Acuña.  Lastly, Mr. Teodoro Hans Harmsen 

of CONCAR and Larcomar. He was the General Manager 

Andress, a Director of GMP, has first degree kinship with 

of CONCAR S.A. from 2004 to 2005; then he was placed in 

Mr. Teodoro Harmsen Gomez De La Torre, a Director of the 

50

charge of Financing for the Northern IIRSA Highway from 2005 

company.

to 2006. Previously, he worked for Citibank in the Corporate 

Finance Area.

César Neyra Rodriguez Manager of Internal Auditing and 

Management Processes. He has a Bachelor’s degree in 

Accounting from Universidad Nacional Federico Villarreal 

(Federico Villarreal National University) and a Master’s degree 

in Business Administration and Finance from the Universidad 

del Pacífico (University of the Pacific). He has also studied 

Quality Improvement Systems and completed the program on 

Six Sigma Methodology at Caterpillar University in Mexico and 

the USA.

Claudia Drago Morante Corporate Legal Advisor from 2000 

up to date.  Attorney, graduate of the University of Lima.  

Completed the Upper Management Program on Corporate 

Law and Finance at ESAN.  She was the Legal Advisor of GMD 

from 1997 to 2000.

Capital

Major Shareholders

69

The capital of the company as of December 31, 2006 amount-

The principal shareholders are: Graña Holdings, represented 

ed to S/.235,786,936.70, represented by 336,838,481 shares 

by José Graña Miró Quesada, Chairman of the Board of Direc-

with a nominal value of S/. 0.70 each as a result of the increase 

tors and Vinci Construction, the French group that is currently 

in capital stock agreed upon by the General Meeting of Share-

the largest construction company in the world.

holders on March 23, 2006. 

50

10

10

List of Major Shareholders as of 12.31.2006

Shareholder

Shares

%

Graña Holdings

Vinci Construction

AFP INTEGRA

AFP PRIMA

Bethel Enterprise

AFP Horizonte

Byron Development

AFP Profuturo

Genesis Smaller Companies SICAV

Total

Other

Grand Total 

71,326,555

53,779,791

35,095,268

28,795,740

21,359,718

21,105,116

16,426,512

15,274,528

13,446,098

276,609,326

60,229,155

336,838,481

21.18%

15.97%

10.42%

8.55%

6.34%

6.27%

4.88%

4.53%

3.99%

82.12%

17.88%

100.00%

70

10

10

10

Evolution of Shares

per share in January and S/.4.00 per share at year-end closing.  

The average liquidity during the period was 92.03 % and the 

volume traded during the year totaled S /. 275,329,437.34.

During the year 2006, the profitability of the shares reached 

450% including the effect of the issuance of fully paid-in 

shares in May.  The stock market quotation was S/.0.85  

Monthly Quotations on Shares

ISIN Code    

Mnemonic

Year-Month

2006 Quotations

Price

Avg. S./.

Opeing

Closing

Max

S./.

S./.

S./.

Min

S./.

PEP736581005

PEP736581006

PEP736581007

PEP736581008

PEP736581009

PEP736581010

PEP736581011

PEP736581012

PEP736581013

PEP736581014

PEP736581015

PEP736581016

Volume Negotiated 

14,000,000

12,000,000

10,000,000

8,000,000

6,000,000

4,000,000

2,000,000

0

GRAMONC1

2006-01

GRAMONC1

2006-02

GRAMONC1

2006-03

GRAMONC1

2006-04

GRAMONC1

2006-05

GRAMONC1

2006-06

GRAMONC1

2006-07

GRAMONC1

2006-08

GRAMONC1

2006-09

GRAMONC1

2006-10

GRAMONC1

2006-11

GRAMONC1

2006-12

0.85

1.22

1.30

1.31

1.75

2.00

1.90

2.99

3.30

3.70

3.88

3.66

1.13

1.32

1.30

1.75

2.00

1.90

2.90

3.33

3.65

3.86

3.65

4.00

1.16

1.34

1.32

1.76

2.20

2.15

3.00

3.40

3.70

4.00

3.95

4.00

0.92

1.22

1.28

1.47

1.96

1.98

2.45

3.05

3.36

3.81

3.86

3.93

Vol. Neg. 

US$MM

Closing 

Price

0.77

1.05

1.20

1.28

1.70

1.90

1.90

2.75

3.20

3.70

3.60

3.65

5.00

4.00

3.00

2.00

1.00

0.00

Ene

Feb

Mar

Abr

May

Jun

Jul

Ago

Sep

Oct

Nov

Dic

16

27

20

Securitized Bonds 

the end of December 2006, the balance of these bonds was S/. 

116,871,000 (US$ 36.8 MM). During the year 2006, the company 

obtained the approval of the Assembly of Bondholders and the 

Guarantors to reduce the levels of the IDB and FMO guarantees, 

In October 2003 the company and its main subsidiaries placed 

release the reserve account and relax certain conditions on the 

Securitized Bonds on the market partially guaranteed by IDB 

structure of the Bonds that generated operating and tax inef-

and the FMO in the amount of US$ 50 million, with semi-annual 

ficiency. These modifications do not affect the classification of 

interest payments and an expiration date in September 2011. At 

the bonds, which continue to have an AAA rating. 

Securitization Bonds 

ISIN Code   

Mnemonic

Instrument

2006 Quotations                      

Price

Avg. %

Opening

Closing

 %

%

Max

%

Min

%

PEP80070F083

INTE0BTG1U

Securitization 

101.39

101.32

101.39

100.32

100.39

Bonds               

Short-term Instruments

November 28, the company issued S/. 5,000,000 against this 

line for a period of 6 months, at a rate of 5.06%.

71

10

10

7

In November, the company obtained approval from CONASEV 

to offer a line of short-term instruments on the capital market 

in the amount of US$ 20 million for a two-year period. On 

Short-term Instruments 

ISIN Code

Mnemonic

Instrument

2006 Quotations                      

Price

Avg. %

Opening

Closing

%

%

Max

%

Min

%

PEP7658VO24

G&M2CP2A

Commercial 

97.56

97.56

97.56

97.56

97.56

Paper                  

18

16

10

10

7

72

Historical  

Summary

32

1933

The Group was founded in the city of Lima in 1933, under the 

Miraflores City Hall

name Gramonvel S.A. Ingenieros.

Lima Maternity Hospital

City of Talara

Las Palmas Air Force Base

Nestlé factory

1949

In 1949, the company merged with Morris y Montero, forming 

Southern Pan American Highway

Graña y Montero S.A.

Ministry of Economics and Finance

Banco Wiese Ltdo. (bank)

First National Bank

Sears Roebuck of Peru

1954

In 1954 the Consorcio de Ingenieros Contratistas Generales 

Hospital del Empleado (Hospital for Workers)

(Consortium of General Contractor Engineers) was founded.

Chimbote Steel Plant

Cañón del Pato Hydroelectric Station

Jorge Chávez Airport

Monterrico Horse Racetrack 

Paseo de la República avenue

Sheraton Hotel

1980

En 1980 Graña y Montero S.A. initiated a diversification proc-

Cuajone Mining Project

ess with the creation of GMI, the Engineering Consulting firm, 

Chavimochic Irrigation Project

GMP, the Petroleum Services company, and GMD, the Informa-

Banco Continental (bank)

tion Technology Services company..

Machu Picchu Hydroelectric Station

Cuzco Hospital

29,030 feet drilled in 5 wells during 2004 

Technology Outsourcing for the Lima Stock Exchange

Management of Hotel Melía Project in the Dominican Republic

Fábrica de Cementos 

Lima

Hospital del Seguro 

Social del Empleado

73

22

Cerro Verde

Terminal Marítimo  

de Camisea, Pisco

1994

In 1994, Concar, the company specializing in the Operation 

Arequipa-Matarani Highway Concession

and Maintenance of highways in concession, was founded.

1996

In 1996 the Holding Company was founded and in 1997 Graña 

Ventanilla Thermoelectric Power Plant

y Montero S.A.A. increased its capital stock through public 

Four Seasons Hotel in Mexico

stock offering, thereby turning the company into an Open 

Sulfuric Acid Plant for Southern -Peru

Corporation. 

1998

Chinecas Irrigation Project

In 1998 Consorcio Terminales was founded in association with 

Marriott Lima Hotel

Oil Tanking of Germany to manage, store and distribute fuel in 

Camisea: Fractioning Plant

56

the northern and southern sections of the country. 

Ralco Hydroelectric Station, Chile

Operation of the Camisea Maritime Terminal in Pisco 

2002

In 2002 Norvial S.A., the concessionaire for Road Network No. 

5, was founded.

2005

In 2005, the Concessionaires IIRSA Norte and IIRSA Sur 

Cerro Verde Concentration Plant

(northern and southern highways) were founded.

SPCC Smelter in Ilo

Ancón-Huacho-Pativilca Highway

New Camisea Malvinas Gas Plant

Interoceanic Highway

Tarapoto-Yurimaguas Highway

APEX San Cristóbal mine in Bolivia 

74

Administration 
Analysis

Regarding the economic and financial situation

The Group’s Backlog amounted to US$ 591.5 MM. Of this 

total, US$ 347.2 MM is to be executed during the year 2007.

Profit and loss

Summary

The consolidated Activity of the Graña y Montero Group at 

The consolidated Activity for the 2006 period increased by 

the end of the 2006 period had grown 41.8% compared to 

41.8% compared to the year 2005, totaling S/. 1,320.8 MM 

the equivalent consolidated Activity for 2005, amounting to 

(US$ 413.2 MM). Contracts related to Energy and Mines are 

S/. 1,320.8 MM. The increase in Activity during 2006 stemmed 

the source of 69% of this Activity.

mainly from the Infrastructure Business, which grew S/. 330.4 

The OIBDA attained by the end of 2006 was S/.275.6MM, 
which represents 52.4% growth. Of this OIBDA1, 37.2% 

MM (+51.2%). All the other lines of business of the group 

grew during the year as follows: the Petroleum Business by 

S/ 22.4 MM (+16.9%), the Concession Operation Business by 

corresponds to Stable Flows from Concessions and  

S/.16.1 MM (+81.0%), the Engineering Business by S/.9.0 MM 

long-term contracts.

(+41.5%), the Information Technology Business by S/. 8.8 MM 

(+9.1%) and Larcomar by S/ 3.0 (+18.2%).

Available Profits for the year 2006 amounted to S/. 104.9 MM, 

meaning a 220.6% growth.

The Infrastructure Business Activity had been robust since 

The Financial Debt decreased by 23.8% and the Net Cash 

project, the Expansion of the SPCC Plant in Ilo and the 

Reserve Debt decreased 59.4%, resulting in reduced 
leveraging of 1.54x, as well as a Financial Debt / OIBDA1 ratio 

Sociedad Minera San Cristóbal Project in Bolivia, which were 

completed this last quarter. The new contracts on the 

equivalent to 9.5 months and 10.7x coverage of Financial 

Expansion of the Malvinas Plant for Pluspetrol, the civil works 

the end of 2005 due to contracts on the Cerro Verde mining 

Expenses.

and manufacturing of structures for the Cerro Corona 

Copper Concentrator, as well as Dirt Moving contracts for 

Brocal IV and revamping and maintenance on Lot 1AB are 

 
75

good indications that similar robustness can be expected 

supported on an increase in service orders in relation with 

during 2007.

the framework contracts with Antamina, Minera Cerro Verde 

and Repsol for La Pampilla Refinery, as well as the 

The price of petroleum throughout the year 2006 was 

Engineering contract entered into with the Hothschild 

favorable for the Extraction – Production Activity in Lots I and 

Group’s Minera Santa Cruz for the development of the San 

IV, as well as the Well Drilling line of this business. In the fuel 

José mining project in Argentina. 

Storage and Dispatch business, an increase in the cost of 

transporting fuel between Peru and Bolivia was favorable 

The growth of the Information Technology Business is due to 

during this period. Lastly, the Talara Natural Gas Processing 

greater activity in the Technology, Technological Services and 

Plant, acquired at the beginning of the year from Empresa 

Software Factory lines of business.

Eléctrica de Piura S.A. (EEPSA), more than compensated the 

effect of no longer consolidating the activity of Compañía 

A greater average percentage of occupation of commercial 

Logística de Hidrocarburos Boliviana, explained further on in 

locations throughout 2006 compared to the previous year, in 

this report.

addition to greater average consumption among visitors, 

resulting in higher varied sales for Larcomar, are among the 

The activity of Operations in Concession in 2006 increased 

main reasons underlying increased Activity in this business. 

as a result of the start-up of work related to the Concession 

Contract on the Operation of the Paita – Yurimaguas Highway 

It is worth mentioning that, of the Activity for the 2006 period, 

(Northern Multimodal Section) in April. Additionally, the 

69% was related to contracts with the Energy and Mining 

extension of the concession for the Arequipa – Matarani 

sector, validating the Group’s strategy of zeroing in its 

Highway through May 2007 until the concession for Section 5 

sources of income on this sector. 

of the Southern Inter-oceanic Highway is awarded, prevented 

a contraction of activity that would have offset a significant 

part of this growth. 

The robustness of the Engineering Business may be 

Annual Consolidated Activity

(S/. 000)

1,550

1,300

1,050

800

550

300

50

2002

2003

2004

2005

2006

692

808

841

932

1,321

2002

2003

2004

2005

2006

* The activity of Larcomar S.A. has been included in preceding quarters for purposes of comparison

76

Activity by business                                                                           

Infrastructure                                                                                      

Engineering                                                                                        

Concession Operations

Information Technology

Petroleum Services

Other

73.9%

11.8%

8.0%

2.7%

2.3%

1.3%

42.1% of the consolidated Gross Profit was provided by 

162.5 MM at the end of the period. 

lines of Business unrelated to Construction. The increased 

percentage of Activity from the Infrastructure Business due to 

The Gross Profit from the Petroleum Business amounted to S/. 

the previously explained growth has shrunk Gross Profit from 

65.3MM due to good results in its extraction and production line 

lines of business unrelated to Construction down to 42.1%. 

in lots I and V, to well-drilling services and to the outcomes 

However, while the percentage of Activity from the Infrastructure 

contributed by the operation of the Talara Gas Processing Plant 

Business lies in the ballpark of 74% for the 2006 period, the 

that made it possible to compensate and overcome the effect 

Gross Profit percentage from this line of business accounted 

of the deconsolidation of CLHB results. Gross Profit for the fuel 

for 58% of the group’s Profit.

Storage and Dispatch line was equivalent to that reported for 

Gross Profit rose 48.4%, reaching S/. 272.8 MM.  

the preceding year. 

The increase in Gross Profit of the Infrastructure Business 

The Gross Profit of the Highway Concession Operation 

(+81.3%) is a by-product of greater Activity in this business; the 

Business is explained by the 8 months that the Contract on the 

increase in the Gross Profit from Petroleum Business (+9.3%), 

Concession for the Operation of Paita – Yurimaguas Highway 

Concession Operations (+82.0%) and Larcomar (+20.3%) 

(Northern Multimodal Section) was in effect during the 2006 

support this growth. It should be noted that, as a consequence 

period. 

of greater than usual margins for the Infrastructure business, the 

consolidated Gross Margin improved by 92 basic points, 

Lastly, greater Activity related to the Information Technology 

amounting to 20.7% of the Activity.

Business, Larcomar and the Engineering Business generated 

In addition to the growth in Gross Profit generated by the 

business, which amounted to S/. 13.6 MM, S/. 11.1 MM and S/. 

increase in Infrastructure Business Activity, the Gross Margin 

8.9 MM respectively.

an increase in the Gross Profits reported by these lines of 

of this business improved 13.9% to 16.7% as a consequence 

of greater profitability in all its divisions. As a result of these 

factors, the Gross Profit from this business amounted to S/. 

OIBDA Per line of business

77

Infrastructure

Petroleum Services

Information Technology

Operation of Concessions, , 

Engineering

Other

60.87%

24.09%

4.94%

3.72%

1.79%

4.60%

Operating Profit totaled S/. 213.0 MM, representing an 

S/. 275.6 MM, representing growth of 52.4 % compared to 

Operating Margin of 16.1%. The aforementioned increase in 

the previous period. As in the case of Gross Profit, the 

Gross Profits, enhanced by the fact that consolidated General 

growth of the Infrastructure Business Activity increased its 

Expenses accounted for 4.5% of the Activity, materialized a 

share of the group’s OIBDA, resulting in the generation of 

68.7% increase in Operating Profit.

39.1% of the OIBDA by businesses unrelated to Infrastructure 

and Construction. Additionally, it should be mentioned that 

Net financial expenses decreased by 26.4%, totaling S/ 

long-term stable flows such as concessions and outsourcing 

25.7 MM. The contraction of financial debt achieved during 

provided 37.5% of the OIBDA. This resulted in 1.55x coverage 

the first quarters of the year as a consequence of the Group’s 

over the Group’s Financial Expenses plus General Expenses 

financial liability reduction policy is reflected by lower financial 

unrelated to these lines of business, assuming that the latter 

expenses for this period. This, combined with the increase in 

will not decline in the event of a total loss of their Activity. 

OIBDA explained further on in this report, resulted in 10.7x 

coverage, which represents an improvement of 5.5x in 

comparison with the previous year.

Available Profit totaled S/. 104.9 MM, implying growth of 

220.6%. Greater Operating Profit, combined with lower 

financial expenses, explains this improvement in Available 

Profit. A point worth noting is the favorable effect produced by 

the decline of the exchange rate which cushioned a signifi-

cant portion of the rise in Other Disbursements resulting from 

the provision set up for CLHB investment devaluation.

The cumulative OIBDA as of the end of the year 2006 was 

78

Balance Sheet

- the Group opened time deposit accounts with diverse 

financial institutions for a total of S/. 101.6 MM (US$ 31.7 MM). 

These deposits are earning interest at market rates, pending 

strategic investments that the Group expects to make during 

Consolidation of Larcomar. After the completion of the first 

upcoming quarters. 

phase of the Commercial and Financial Relaunch of 

Larcomar, which included the opening of a 4,400m2 Shopping 

Center and the construction of a permanent Exhibition Hall for 

Financial Debt / OIBDA decreased to 0.59x. The increase in 

pieces from the Gold Museum, the Group decided to 

OIBDA combined with the reduction of Financial Debt shall 

withdraw Larcomar from Investments Available for Sale and to 

permit the group to cancel the entire Financial Debt in 9.5 

consolidate it as an additional subsidiary. 

months. It should be noted that the group maintains an 

During the year 2007 the Group expects to conclude a 

average expiration date of 31 months, which results in 

process for refinancing the Financial Liabilities of this 

significant generation of additional liquidity for the group. 

business in order to improve the ratio between the generation 

of debt and its average due date. 

Grounded in the aforementioned, as of the third quarter the 

Securitized Bonds. On November 10, 2006, the second 

Group incorporated Assets totaling S/. 80.3 MM, Liabilities 

Bondholders’ meeting took place. A series of changes was 

totaling S/. 72.9 MM and Minority Interest totaling S/ 7.5 MM. 

approved in relation with the financial conditions and 

into its Balance Sheet. 

guarantees on the bonds that will yield future savings for the 

group. As a consequence of the foregoing, US$ 8.8 MM of the 

reserve account and US$ 3.3 MM of the structure’s provision 

Effects of deconsolidation of Compañía Logística de 

account were released, leaving them freely available. 

Hidrocarburos Boliviana (CLHB). As consequence of the 

Additionally, the level of guarantees from the IDB and the FMO 

Nationalization of Hydrocarbons in Bolivia, and as a 

shrunk so that in the future guarantees shall be maintained on 

recommendation of our auditors, the financial statements of 

37.5% of the balance of bonds issued. A series of 

CLHB were deconsolidated and a provision was set up for 

modifications to the securitization structure were also 

50% of our share value at this company and charged against 

approved, making the operations of the group more flexible 

income in 2006. Although no agreement has been reached on 

and cutting down the effective issuance cost. 

valuation mechanisms vis-a-vis the shares to be transferred 

to the Bolivian government or the method of payment, the 

The foregoing did not affect the rating of the instruments, 

Group and Oiltanking, its German partner in CLHB, continue 

which kept the AAA rating given prior to these changes. 

in negotiations.

The Financial Debt decreased by S/. 67.9 MM during the 

Commercial Paper. In the month of November 2006, 

2006 period. This entails a 23.8% reduction in the group’s 

CONASEV approved the Group’s Second Short-Term 

financial debt, which reduced its leveraging from 2.18x to 

Instrument Program for a maximum amount of US$ 20 million 

1.54x. The generation of cash attained during 2006, combined 

or the equivalent in New Soles for two years. The purpose of 

with a postponement of the investments forecasted for the 

this program is to diversify the Group’s sources of short-term 

year as a consequence of the electoral setting in the second 

financing. 

quarter, allowed the flows to be channeled toward Financial 

Debt reduction. This effect, along with increased equity due to 

Under this program, toward the end of November, Commercial 

positive results for the year, resulted in a 0.65x reduction of 

Papers were issued in the amount of S/. 5 MM at an AER of 

the total leveraging of the group. 

5.06%. The funds were used to replace short-term financial 

liabilities related to the Information Technology business.

The current liquidity as of the end of the period was 1.29x, 

an improvement of 0.08x. As a consequence of having 

reduced leveraging to 1.5x and not requiring additional cash 

to reduce its financial debt - where excess cash is generated 

by the businesses combined with the funds from the reserve 

and provision for the Securitized Bonds released last quarter 

79

Backlog and Forecast

The Group’s Backlog at the end of the period amounted to 

US$ 591.5 MM, equivalent to 1.46x the Activity for the last 12 

months.  Of this total, US$ 347.2 MM is to be executed in 2007, 

US$ 164.7 MM in 2008 and the balance from 2009 onward.  It 

should be noted that as a consequence of the consolidation of 

Larcomar, the Backlog has increased by US$ 24 MM, and that 

in the month of May, US$ 29 MM was deducted from the 

Backlog as a consequence of the deconsolidation of CLHB.

Consolidated Backlog

600

500

400

300

200

550

100

2002

2003

2004

2005

2006

2002

2003

2004

2005

2006

292

239

278

539

592

Explanatory Notes

The figures in this report include the Financial Statements for Larcomar S.A., which has been consolidated as a subsidiary of the 

group as of the last quarter, the main effects of which are explained throughout this report. For comparison purposes, the year 

2005 has been modified to include Larcomar figures.

The deconsolidating of CLHB applies only to the Financial Statements for the year 2006. The figures for 2005 include the Earnings, 

Assets, Liabilities and Shareholders’ Equity of this company as required by accounting standards.