BUILDS TALENT
ANNUAL
REPORT
2010
1
BUILDS TALENT
ANNUAL
REPORT
2010
3
CONTENTS
RESULTS
FOR THE FISCAL
YEAR
Main figures
Thousands of Nuevos Soles Constant
values
As of December 2009 (Projected)
Activity
Billing
Gross Profit
Profit before taxes
Net profit
EBITDA
Professionals
2007
2008
2009
2010
Growth %
Equivalent
Thousands USD
1,529,818
1,439,974
299,027
207,199
129,900
286,607
1,705
1,887,723
1,827,710
399,490
232,985
147,189
372,696
1,947
2,183,233
2,001,475
329,551
227,549
134,401
339,397
2,143
2’660,398
2’502,461
455,584
418,067
273,542
548,451
2,816
21.86%
25.03%
38.24%
83.73%
103.5%
61.60%
31.04%
947,098
890,872
162,187
148,831
97,131
195,248
5. Results for the fiscal year
42. Social responsibility
EBITDA by Company 2010 (In thousands of S/.)
6. Letter to the shareholders
64 Historical summary
8 . Strategic development
68. Corporate governance
16. Organization
84. Analysis of results
GyM
GMP
Concessions
GMH
CONCAR
LARCOMAR
GMD
GMV
GMI
Total
206,079
122,612
66,053
54,560
31,803
3,727
23,961
27,469
12,187
548,451
37.57%
22.36%
12.04%
9.95%
5.80%
0.68%
4.37%
5.01%
2.22%
100.00%
Backlog (In millions of US$ Dollars)
1,883
1,281
720
830
2007
2008
2009
2010
5
LETTER TO THE
SHAREHOLDERS
JOSÉ GRAÑA MIRÓ QUESADA and MARIO ALVARADO PFLUCKER
Dear Shareholders:
This is the type of development that we expect in Latin America,
However, we are aware that the success achieved and future
Similarly, in recognition of the importance we give to our relation-
We are pleased to present the Annual Report for the year 2010,
tion technology. They are more sophisticated, on-going enginee-
of the great team we have formed, especially the more than 2,000
Stock Exchange Key, which is the distinction given by that entity to
which shows the best results in our 77 year long history.
ring services that add to the shorter-term contracts that we are now
engineers.
executing abroad, such as the supervision of the Hotel Meliá in
the company with the highest score on Good Corporate Governan-
ce practices, and we have also been incorporated in the Compa-
Last year Peru grew almost 9%, our Group’s activity increased 22%,
Playa del Carmen in Mexico or the Pueblo Viejo mining project in
In the coming years, research and the development of knowledge
nies Circle, a group sponsored by the IFC and composed of the 19
EBITDA 66% and profit grew 103%.
the Dominican Republic where we currently have more than 600
within the Group and in relation with the community will be funda-
companies with the highest corporate governance
in sectors that have great potential, such as energy and informa-
growth are based on the professional and personal development
ship with our shareholders, in the year 2010 we obtained the Lima
Sales closed at the equivalent of 947 million dollars and net pro-
provided to our employees and more than 280,000 hours have been
fits of 97 million dollars. This level of results had never been seen
In Peru, the activity continues to grow rapidly in increasingly large
provided to the communities related to our projects.
Lastly, we would especially like to thank our customers and emplo-
before, even if the extraordinary earnings of 25 million dollars on
and complex projects. We have begun the Antapacay and Bambas
yees who have made the success achieved possible.
Peruvian workers.
mental. For this reason, over 209,000 hours of training have been
standards in Latin America.
the sale of the Larcomar Entertainment Center and the payment
large-scale mining projects in a joint venture with Bechtel, we have
With a desire to share and foster knowledge in the community
received for the expropriation of the company Logística de Hydro-
completed the Inter-oceanic Highway, and now we are executing
of Peruvian engineers, this year we have created an engineering
carbons Boliviana were excluded.
the mass-transportation system (Electric Train) project in Lima in a
portal that already has more than 10,000 engineers registered and
The most important occurrence for the Group in the year 2010 was
del Agustino social housing project with 3,200 living units and we
search that was awarded for the first time on our 77th anniversary.
consortium with Odebrecht. We have delivered the large Parques
we have instituted the Graña y Montero award for Engineering Re-
the decision to acquire two engineering service firms that will be
are beginning the Parques de Comas project to build 9,000 units.
the beginning of stable, continuous development in other Latin
We have completed the Bayóvar Phosphate Plant, we are building
Due to constant concern for our employees’ development, this year
American countries. The company TSD was purchased from Tele-
the Machu Picchu and Huanza hydroelectric plants, and we have
the Graña y Montero Group, composed of its six main companies,
fónica and will reinforce the leadership of GMD in digital services
recently been awarded the concession for the La Chira Waste
has been recognized as a Great Place to Work among large Peru-
and its regional development in Latin America. It was also agreed
Water Treatment Plant.
vian companies where over two thirds of their employees consider
to acquire the company CAM from the Endesa Group. CAM, a
to be a great place to work.
company that specializes in service for the electricity sector, has
These projects have increased our portfolio of contracts to be exe-
operations in Chile, Peru, Colombia and Brazil, with over 300 mi-
cuted by over 47% to the record figure of 1.883 billion dollars, which
llion dollars in revenues for the year 2010.
enables us to forecast solid growth for the coming years.
José Graña Miró Quesada
Mario Alvarado Pflucker
Chairman
Chief Executive Office
7
STRATEGIC
DEVELOPMENT
9
DIVERSIFICATION
This year it was decided to acquire two companies: TSD, which
specializes in the digitization of images, and the Chilean company CAM,
which specializes in services for the electricity sector. Additionally,
during the year the Larcomar Entertainment Center was sold.
These decisions are aligned with our strategy to diversify within our
specialty of Engineering Services and now we are developing more
steadily in other Latin American countries.
Today, what was once a construction company has become a group of
21 companies grouped in 6 operating companies and one infrastructure
concessions division
GMD, the information
technology Services
company that has a
Technological Operations
Center (TOC) for tecnology
outsourcing services and
has recently acquired the
company TSD, which
specializes in digitalization
of images.
GyM is the original
construction company
that had three divisions:
Electromechanics, Civil
Works and Buildings. This
year it has formed the Mining
Services Division split from
the Civil Works Division.
GMV, the real estate
development company
that acquired control of
Inmobiliaria Almonte this year
and launched the GyM Viva
brand for its specialization in
low-income housing.
GMI, the engineering
consulting firm that has a
subsidiary that specializes in
environmental engineering,
called ECOTEC.
GMP, which is the petroleum
services company that drills
wells, operates two petroleum
lots in northern Peru, operates
a natural gas fractionation
plant in Talara and has
incorporated the Consorcio
Terminales with Oiltanking of
Germany for the operation of
fuel terminals in Peru.
CONCAR is the company
specialized in the
maintenance and operation
of highways under
concession that operates
the Norvial, Survial, IIRSA
Norte and Canchaque
concessions.
11
CONCESSIONS
In recent years we have been successful in our objective of ensuring
the stability of the Group based on the strategy of obtaining long-term
contracts and building capacities to design, build, finance and operate
infrastructure concessions.
At the end of the year, the company was awarded the concession for
the La Chira Waste Water Treatment Plant south of Lima, with which we
currently have interest in the following concession companies:
Norvial is the company
Survial is the company
Concesionaria IIRSA Norte
Canchaque is the company
that has the concession for
that has the concession for
S.A is the company that has
that has the concession
Red Vial, which connects
the 1st phase of the 750
the concession contract
for the Buenos Aires-
Ancón with Pativilca in the
km Interoceanic Highway
for the 980 Km Paita-
Canchaque highway.
north of Lima.
was completed in the first
Yurimaguas highway.
months of 2010.
CONIRSA, is building
TGP (Transportadora
Consorcio Terminales, a
Consorcio La Chira, in
sections 2 and 3 of the Inter-
de Gas del Peru), is the
consortium with Oiltanking
a joint venture with the
oceanic Highhway to Brazil.
contract award winner for
of Germany to operate fuel
Spanish company, Acciona
Camisea construction and
storage terminals in Peru,
Agua, was awarded the
gas transportstion.
the Camisea loading dock
concession or the La Chira
in Pisco and the Nash
Waste Water Treatment Plant
warehouse and dispatch
in south Lima toward the
facilities at the Port of
end of the year 2010.
Matarani.
13
INTERNATIONAL
DEVELOPMENT
At the end of the year 2010, a fundamental step was taken in our
internationalization process with the purchase of the Chilean-based
company CAM, which has operations in Colombia, Peru and Brazil,
a step that will expand and make more permanent our development
abroad.
With these operations, the group will have operations in 6 Latin
American countries in addition to Peru, through its subsidiaries.
GyM is the main contractor for the Pueblo Viejo mining project in the
Dominican Republic where over 600 Peruvian technicians and engineers
are currently working and recently it was awarded the contract for the
management of the Pataquillas mining project in Panama in a joint
venture with Canada’s SNC Lavalin.
PUEBLO VIEJO MINING PROJECT IN THE DOMINICAN REPUBLIC
GMI is supervising the construction of the new Meliá hotel in Playa del
Carmen in Mexico.
GMD is providing SAP technological support services for the
international operations of the EBEL group and help desk services at the
regional level for the mining company Barrick and for Unique.
CAM, the company specializing in services for the electricity sector,
reported revenues of 300 million dollars annually in Chile, Peru,
Colombia and Brazil.
15
ORGANIZATION
17
THE GMD
TEAM
1,073 employees
We are pleased to present the annual report for the year 2010, which shows the best results obtained
in our 26 years of operations.
In the year 2010, GMD was able to consolidate its leading position in outsourcing solutions for the
corporate market by increasing its activity IT Infrastructure Outsourcing (ITO), Business Process Out-
sourcing (BPO) and Help Desk outsourcing.
The company’s total activity for the year was US$ 50.28 million, which represents growth of 38% com-
pared to the year 2009. Net profits for the year amounted to US$ 2.52 million, with EBITDA of
US$ 8.53 million, which represents 73% growth compared to the preceding year.
The strategy of seeking business with stable flows has made it possible to consolidate our position
and lay the groundwork for solid, steady growth. The revenue from Business Process Outsourcing,
IT Infrastructure Outsourcing, Help Desk Outsourcing and Application Outsourcing amounted to US$
31.51 million, which accounts for 64% of the total activity and represents growth of 35%.
The solid results of 2010 have allowed us to invest US$ 8.35 million, of which US$
3.6 million were for the acquisition of TSD, the company dedicated to the business of digitizing and
automating banking processes, and US$ 4.74 million in assets for new Business Process Outsourcing
and IT Infrastructure Outsourcing projects for which contracts were awarded to us during the year. As
a result of these investments, the backlog increased 99% in relation with the year 2009, reaching US$
68 million.
19
Undoubtedly, the main reasons we have obtained thee good results
the Middle Management Training Program and the creation of
are, above all, our employees’ team work and the systemization
communities for the purpose of exchanging experiences and infor-
of our processes, both of which enabled us to fulfill our contrac-
mation, thereby fostering the cultural change necessary to support
tual commitments, improve customer satisfaction and, therefore,
the knowledge management strategy.
increase the company’s activity and profitability.
Human resource management was geared toward strengthening
the working climate and building skills among middle manage-
ment, as well as restoring trust and cooperation between the sup-
port and project areas, in both commercial and project execution
processes. Part of this plan consisted of launching
The following are the main projects on which GMD has worked.
INDUSTRY AND COMMERCE SECTOR
Minera Barrick: Help Desk Outsourcing at the regional level, 4 countries
EBEL: SAP IT Outsourcing and Integrated Commercial System worldwide. Avícola San Fernando: IT Outsourcing of Oracle and
Oracle Suite support
BACKUS: Outsourcing of Network Equipment Technology
REPSOL: Outsourcing of the billing and collection process nationwide, Fuel service and dispatch monitoring, Outsourcing of the
Sealing Process
ACCENTURE: Outsourcing of Application Development and Maintenance for Telefónica del Peru
GOVERNMENT SECTOR
ONP (Pension Administration Office): Software Factory Outsourcing, Technological Infrastructure and Help Desk Outsourcing,
Document Management and Filing Outsourcing
ONPE: Outsourcing of Technological Infrastructure for Municipal and Regional elections at the national level
OSINERGMIN: Outsourcing of Supervision of Grievances and Complaints
BANKING AND FINANCE
AFP Integra: Software Factory Outsourcing
AFP Horizonte: Application Development and Maintenance Outsourcing
BBVA Continental: Help Desk Outsourcing at the national level, Outsourcing of Classification of checks and promissory notes,
and Document Digitation Outsourcing
Compañía de Seguros Pacífico: Help Desk Outsourcing at the national level
TALENT
AT GMD
HUGO GONZALEZ
JUAN
SOTOMAYOR
Ingeniero
I had the opportunity to join GMD in August 1997 as an intern. At Graña I’ve
gained experience and confidence, experiences that have enabled me to
be with my family and give them the peace of mind they need. The happiest
time of my life was my wedding and then the birth of my child. It really is a
new front, a new way of looking at things, really every step I’ve taken has
helped me to gain experience and to become the person I am.
21
THE GMI
TEAM
687 employees
Following the worldwide crisis of 2008-2009, 2010 was a good year for our country’s economy. GDP
reached 9%, maintaining its growth trend. Consequently, GMI was able to achieve 33 % growth in rela-
tion with 2009, with 33.9 MMUS$ in sales and EBITDA of 4.33 MMUS$.
This year GMI signed framework contracts in mining with SHOUGANG and Antamina, in order to
provide support on their expansion and on petroleum and gas with COGA (Cía. Operadora de Gas
del Amazonas). Shortly before the end of the year, GMI was awarded a framework mining contract
with Minera Yanacocha for its investments in 2011, which only confirms our leadership in both sectors.
Internationally, we resumed our commercial relationship with Meliá and began supervising work on
the Hotel Paradisus Playa del Carmen in Mexico.
At GMI we are aware of our employees’ role and that of the use of technology in the execution of our
servi ces. For this reason, this year 13,375 hours of internal training have been provided, as well as
8,500 hours of research and application of technologies that have enabled us to work in 3D, incorporat-
ing content management to ensure better products in our engineering designs.
The success of our growth is based on knowledge management, which is why we will continue op-
erating according to our strategy of strengthening our work culture, in which our employees share,
socialize, study, conduct research and apply what they learn, seeking to be an organization that GEN-
ERATES VALUE for our customers.
23
IN THE YEAR 2010 THE
FOLLOWING PROJECTS
WERE CARRIED OUT:
• Urban Resettlement of the
• Supervisory services
City of Morococha Project
HYDROCARBONS
continued on section 5 of
for Minera Chinalco.
• Supervisory services
the Peru – Brazil Southern
• Revision of detail, civil
remediation at the La
OSITRAN
continued on environmental
Inter-oceanic Highway for
MINING SECTOR
and mechanical engineering
Pampilla Refinery and its
• In the mining sector,
on the continuation of PAD
sales plant for Petroperú
• Supervision of works to
we continued providing
vv vvvvvvv and Horizontal
S.A.
services under the
Extension of Phase III,
improve the Line 9, Magnetic
Plant for Shougang Hierro
Engineering Framework
among others for Sociedad
• Detail Engineering under
Peru S.A.A.
Contract with Cía Minera
Minera Cerro Verde S.A.A.
the Framework Contract
Antamina (continuous
on RELAPASA investment
• Supervision and civil
service for over 10 years).
• Framework Contract de
projects for the La Pampilla
and electromechanical
• In the mining sector,
MINERA YANACOCHA
Servicios de ingeniería para
Refinery
installation, Line 9 San
Nicolás Magnetic Plant for
we also continued
S.R.L.
• Under the Engineering
Shougang Hierro Peru S.A.A.
providing services under
Framework Contract,
the Topography Framework
• Topography inspection of
investment projects at the
• Supervision of shutdown
Contract with Cía Minera
works for AKER SOLUTIONS
Pisco and Malvinas plants
of construction of Ball
Antamina(continuous service
for over 6 years).
BUILDINGS AND
INDUSTRY
for PLUSPETROL PERU
Mill base of substation 9
CORPORATION
and electromechanical
installation – Line 9-A, San
• Detail engineering on
Nicolás Magnetic Plant for
• Detail engineering on the
• 4 years of continuous
the construction of two
Shougang Hierro Peru S.A.A.
Antamina Seepage System
industrial cleaning and
drilling rigs in Lot 126 for
waste management services
PETROMINERALES S.A.
• Detail engineering on the
for Cementos Andino S.A.
• Supervision of structures,
system for supplying fresh
through our subsidiary,
• Framework Contract on
silos and belts. Shougang
water to Yanacancha
Ecotec S.A.
Engineering Services for
Hierro Peru S.A.A.
(Antamina)
Compañía Operadora de
• Detail engineering on the
the Peruplast S.A.
• Supervision of the
container plant for
Gas del Amazonas - COGA
• Supervisión of change of
S.A.
magnetic separators for fine
grinding at San Nicolás for
Debottlenecking Project
Center for Distribution
INFRASTRUCTURE AND
Shougang Hierro Peru S.A.A.
in the 3D platform
and Warehousing of
TRANSPORTATION
forSociedad Minera Cerro
Miscellaneous Products for
• Supervision of work to
• Supervision of crusher
Verde (SMCV)
Supermercados Peruanos
improve the Ica-Palpa-
maintenance works for
S.A.
Nazca Highway, Sector Km
Shougang Hierro Peru S.A.A.
• Detail engineering on the
388- 290 - km 449-+000
Relocation of Tailings
• Project Management
Cyclones project in the 3D
on the remodeling of
• Supervision of the
• Supervision of repair of
laborers’ quarters in San
platform for SMCV
TELEFONICA DEL PERU
construction of the Santa
Juan Shougang for Hierro
• Detail engineering on the
Ica for the Ministry of Health
S.A.A. facilities in Surquillo
María del Socorro Hospital in
Peru S.A.A.
Jacking Header Extension
• Supervision of the Hotel
Project Phase III
Paradisus Playa del Carmen
in Mexico
• Detail engineering on the
water recovery system for
the Antamina expansion
project
• Supervision of closure of
fabrication, assembly and
maintenance work on San
Nicolás water tanks for
Shougang Hierro
TALENT
AT GMI
DONATO RIVERO
JUAN
SOTOMAYOR
Ingeniero
Working at Graña has been a very interesting experience in my life and,
throughout my career, it has been most enriching, it can be said, because
at Graña you do all kinds of things. Those who work for Graña could work
for any transnational company. That is an advantage of working for GMI,
especially. What is important to me is being with my daughters, spending
time together, having lunch together, going out with them, giving them
quality more than quantity of time. Your values should be first in your life;
that is the most important thing I can leave my daughters as an example.
25
THE GyM
TEAM
11,880 employees
In the year 2010, GyM continued its solid growth in the construction market. A new sales record was
attained, reaching a total of 621 million dollars that represents 18% growth compared to 2009, as well
as record after-tax profits of 36 million dollars, which is a 48% increase in comparison with 2009.
These results are based on improvement in our efficiency, having obtained a gross margin greater
than 12%, closing the year with a backlog of 1.05 billion dollars, which guarantees the company’s
development in the coming years.
In the mining area, the obtention of the contract with Xtrata del Peru on the new Antapaccay Concentra-
tor Plant should be noted. This project will be carried out in a joint venture with the North American
company, Bechtel. During the year, we have continued the works on the Pueblo Viejo mining project in
the Dominican Republic and we have begun the preliminary works for our customer, the Conga mine
located in Cajamarca.
In December, we signed an engineering, procurement and construction contract with Xtrata for the
development of the new Fuerabamba settlement, which is the beginning of the Las
Bambas mining project.
In the energy sector, we are currently executing projects to expand the Machu Picchu Hydroelectric
Plant and the Huanza Hydroelectric Plant and in December we signed an EPC contract with Calidda
on the construction of 40 additional kilometers of pipeline for transporting gas within the city of Lima.
27
In the building sector, we have had very significant growth; in the
Aware that knowledge is the pillar that has enabled GyM to thrive
first months of 2011 we will complete the new
over time, consolidating its position as the leading construction
Banco de Crédito building in Chorrillos and the Westin Lima Hotel.
company in the sector, during the year 2010 the decision was
Over the course of the year, we obtained very important contracts,
made to maximize knowledge management, fostering the “Learn
such as the execution of the Gran Teatro Nacional (theater), the
to Grow” program as the Key to Future Growth.
expansion of the
San Felipe Clinic, and an institutional building for Universidad del
GyM’s great team, which now comprises 921 engineers and more
Pacífico. During the year, construction was completed on 3,200
than 11,000 laborers. Due to their dedication, commitment and ef-
housing units in the Los Parques del Agustino project and con-
fort, we have been able to execute a great diversity of projects, both
struction began on the shopping center for the same project. Con-
in Peru and abroad, with great success.
It would not have been possilble to obtain these results without
struction also began on the Los Parques de Carabayllo and Los
Paqrues de Comas social housing projects with 1,200 and 9,000
units respectively.
MAJOR PROJECTS
INFRASTRUCTURE AND
HOTEL IBIS
ExPLOSIVE STORAGE
2010
INDUSTRY
Electric Train
Hotel with 250 guestrooms
Magazines Phase 1
in Miraflores
Installation of the electronic
Construction of the Electric
GRAN TEATRO NACIONAL
security system for 07 of
MINING
Train, Villa El Salvador - Av.
First multifunctional theater:
the army’s ammunition
PUEBLO VIEJO
Grau stretch
to put Peru on the map
magazines
Project in the Dominican
of major performing arts
Republic. Civil works:
AREQUIPA
presentations.
ENERGY, GAS AND
40,000 m3 of concrete in the
Potable Water Treatment
1500-person capacity
PETROLEUM
concentrador, assembly of
Plant Intake, 11 km pipeline
Egemsa
the north zone and primary
and 1.5 m3/s potable water
CLARO CORPORATE
Expansion of the Machu
crusher
treatment plant
BUILDING
Picchu 99 MW Hydroelectric
New 7-story, 5,549 m2
Plant
ANTAPACAY
PARIACHI
headquarters building in
Earth movement and
Expansion and improvement
Santa Catalina, La Victoria
EMPRESA DE
concentrator plant
of the potable water and
GENERACIóN HUANzA
sewer system Esquema
TELECOMUNICACIONES
S.A.
SHOUGANG - MARCONA
Pariachi, La Gloria, San
CETAC
Servicios Huanza - 90.6 MW
Renewal of the mining
Juan, Horacio Zevallos
Construction, equipping
Hydroelectric Plant
contract
CONGA
Access roads and camps
and annexes. 9,500
and commissioning of
potable water and sewer
the army’s Centro de
connections
Entrenamiento Táctico y
Computarizado (CETAC)
BUILDINGS
training center
ANTAMINA
Hotel Westin Libertador
Electromechanical assembly
Hotel with 303 guestrooms
for the concentrator
in San Isidro
expansion
TALENT
AT GyM
MAGGIE MATSUDA
JUAN
SOTOMAYOR
Ingeniero
I joined the Group through GML, which was the construction company in
Lima. I think that working in a group to seek solutions is best and I think
that Graña is always willing to listen to you.
Sometimes we go on family outings and other times I accompany my
husband in the auto racing activities that he likes; I’m his co-pilot.
Life has its problems; it also brings joy, but you have to know how to land
on your feet, especially emotionally.
29
THE GMP
TEAM
406 employees
The year 2010 was the year that GMP S.A. had the best results in its 26 years of history. These results
were possible due to the recovery of international crude prices, increased domestic fuel consumption,
the sale of energy to Ecuador during the summer and the extraordinary income from payment for the
expropriation of the company Logística de Hydrocarbons Boliviana.
It should be noted that 2010 was a year in which many of our company’s records were broken with
regard to the volume of crude produced, development wells drilled in our lots and volume of products
dispatched from the fuel terminals.
At the beginning of 2010, in a joint venture with Oiltanking of Germany, we renewed the contract on the
operation of the Camisea Marine Terminal for 5 more years and we obtained the contract for the opera-
tion and maintenance of the Pure Biofuels 600,000-barrel capacity fuel terminal located in Ventanilla.
In the month of December we received payment for the expropriation of the company Logística de
Hydrocarbons Boliviana following nearly 5 years of negotiations with the Bolivian government.
In line with the knowledge management that the group fosters, we have invested 21,832 hours of train-
ing in our personnel, which is 55 hours per person, and we obtained a 73% satisfaction level among
our workers on the annual Great Place to Work survey.
31
TALENT
AT GMP
AYDA CASTRO
JUAN
SOTOMAYOR
Ingeniero
Exploration / Production
Talara Gas Plant
Oiltanking Andina
Oiltanking Andina S.A.C
Thirteen development wells
The gas plant in Pariñas
Services In the operations
At the Pure Biofuels
were drilled in Lots I and
processed 10.8 BSCF of
of the
Terminal, 159.3 thousand
V with an investment of
natural gas, equivalent
Camisea Marine Terminal
barrels of diesel were
almost US$ 9.5 MM, and
to an average of 29.66
(Pisco), 118 ships were
dispatched during the year
436,493 barrels of crude
MMSCFD and production of
loaded with a total of 2,723
2010.
When I joined GyM, I went to work at a construction site where the Santa
Rosa housing project was underway. It was quite an experience, but I got
used to it gradually. New companies were formed and I began working
for GMP. I think I turn into a housewife when it comes to gardening. I love
plants. On the weekends, I get away from Lima; we have a small house in
Lunahuanà and we always have company there.
were produced, which is the
liquids was 423,827
thousand tons of propane
highest annual production
barrels (75% GLP and 25%
(C3), butane (C4), low-sulfur
level in the history of GMP
HAS - saturated acyclic
diesel (MDBS) and Nafta.
S.A.. as well as 8 MMSCF of
hydrocarbons)
natural gas.
Logística de Químicos del
Consorcio Terminales
Sur
Drilling
The consortium comprised
At the Químicos Terminal in
Thirty-six oil and gas wells
of GMP and Oiltanking
Matarani, 11 ships arrived
were drilled in northeastern
dispatched an average of
and 27.9 thousand tons of
Peru with a total depth of
70,154 barrels per day of
sodium hydrosulfide (NaSH)
171,600 feet and 2 water
products from its 9 terminals
were dispatched in 996
injection wells were drilled in
and the storage volume
tankers.
the jungle.
rented by our users was
1.907 MM barrels.
33
THE GMV
TEAM
81 employees
Macroeconomic stability and easy access to mortgage loans during the year 2010 created a very
healthy framework for the development of the real estate business in the country.
During 2010 we maintained our strategy of developing projects geared toward the most neglected
segments, while taking full advantage of the synergies between GyM and us, achieving advantages in
terms of cost, speed and quality.
During 2010, our projects geared toward high-end segments continued through our GMV brand, while
projects in social sectors were executed through our Viva brand. At GMV, sales and handovers con-
tinued in relation with Golf Millenium, Javier Prado 200 and Neo 10. In Viva, sales and handovers con-
tinued in relation with Los Parques de El Agustino, reaching a sales record of 250 units in the month of
March. In Parque Central Club Residencial, in the year 2010, 500 apartments were sold and 293 units
were sold in Parque Garezón. A total of 2,021 units were handed over in all of our projects during 2010,
resulting in total activity of US$ 89.8 million dollars and 48% growth in relation with 2009.
In line with the strategy outlined for GMV, during 2010 we bought large areas of land for the purpose of
consolidating our position in the market as the leading company in the real estate market. In the month
of July, in a public call for tenders, we were awarded the contract on the sale of land that was part of
the San Martín army base in Miraflores. On this 68,000 m² piece of land, we plan to carry out a world
35
class project for combined use. The project will have housing unit,
Additionally, during 2010
offices, a shopping center, a 5-star hotel and a convention center.
our Social Accompaniment Program continued successfully with
Following several months of arduous work, the purchase of the
our customers in Los Parques de El Agustino and with our cus-
land where the former Collique airport was located took place.
tomers in Parque Central Club Residencial, obtaining a TTB rating
This project, Los Parques de Comas, will be executed on 32 Ha of
(total number of workers benefited) of 80% in a satisfaction survey
land and will have 9,880 apartments.
taken among our customers.
In Carabayllo we have purchased a 9.5 Ha piece of land where we
will build 1,200 apartments and, lastly, in Villa el Salvador
Lastly, in relation with our Learn to Grow program, throughout the
23,700 m² of land was purchased for a 670-apartment project.
year 2010 a large number of professionals have participated in
internal training sessions, external training, internal teaching, the
With all of these lands, we have a total of 15,000 real estate units
knowledge portal, the Real Estate Management Manual, etc.
to develop in the coming years. Additionally, in the year 2010 we
obtained a controlling interest in Inmobiliaria Almonte, a company
that owns more than 1000 Ha in Lurín and San Bartolo, with our
long-term development in mind.
TALENT
AT GMV
ERIKA PASTOR
JUAN
SOTOMAYOR
Ingeniero
I’ve worked for Graña for 13 years and I feel that it has greatly enriched
my life in every sense. It has been with me throughout my growth process,
the day to day struggle, so that the family progresses; achieving balance
between family life and work, which is difficult.
37
THE GyM TEAM
1,964 employees
The country’s growth over the past year generated greater investment in highway infrastructure, espe-
cially in the task of recuperating and maintaining existing roads. Concar participated actively, increas-
ing its billing by more than 70% and improving profits by 32% compared to the preceding year.
Concar’s sales exceeded US$ 50 million dollars, mainly due to a contract award obtained early in the
year for the preservation of the Bappo, La Merced, Sullana and Icapal roads in a call for tenders by the
Ministry of Transportation for the purpose of maintaining these sections of roads for a 5-year period.
Winning the contract on these new projects gave our organization the responsibility of keeping 1,300.78
Km of roads in perfect operating condition, in addition to the 3,125.56 Km that we already had, making
a total of 4,426.34 km of highways under our responsibility in Peru.
This gave rise to significant growth in the number of people composing the Concar team, which cur-
rently includes over 1,900 workers.
39
TALENT
AT CONCAR
During the year, great efforts were made to implement the CAE
For the year 2011, the Ministry of Transportation and Communi-
(Emergency Service Switchboards) in all of our projects, devel-
cation plans to outsource the maintenance of several stretches of
oping an information system entirely designed by CONCAR that
highways for 5 to 10 year periods, in which we intend to participate
enables us to respond more quickly to emergencies on the road,
actively.
as well as to provide adequate management of information stored
systematically, which in turn facilitates better decision making, with
The following chart shows the highway operation and maintenance
the objective of having a centralized system in our main office in
projects on which we were working as of December 31, December
Lima with which it is possible to monitor all of our operations.
2010.
MARIA ALEJANDRA HUANQUI
JUAN
SOTOMAYOR
Ingeniero
Highway Section
Ancon - Huacho – Pativilca
Paita – Yurimaguas
San Juan de Marcona – Urcos
Tacna - La Concordia, Palca, Tarata, Pte Camiara, Ilo
Ayacucho - Pte Sahuinto
Limite Regional Lambayeque - Dv Bayovar, Olmos
Dv Buenos Aires – Canchaque
Dv Bayovar - Piura, Pto Bayovar – Piura
Piura - Aguas Verdes, Sullana – Macara
1
2
3
4
5
6
7
8
9
10 Dv Las Vegas - Tarma - La Merced – Satipo
11
Ica - Palpa - Nazca – Atico
Total
Length (Km)
285.66
955.00
758.00
399.00
384.50
261.66
78.00
253.00
437.74
234.00
379.78
4,426.34
I began working for the company in September of 2003. It was in Arequipa
in the construction of the Arequipa – Matarani road. It is a company that
has 4.000 km of roads. Knowing the context of each project or being in
contact with the workers enables us to do a better job. I’m a bit of a mother
hen taking care of her chicks. That is what fills me with pride, my children,
seeing that they are good kids who want to get ahead like their parents.
Despite everything, they are there with us pushing this little car that is our
family.
41
SOCIAL
RESPONSIBILITY
43
SOCIAL
RESPONSIBILITY
Our organization’s high level of growth along with the best outcomes in
its history are the result of a recognized company history guided by its
corporate values of quality, seriousness, reliability and efficiency.
THE PORTAL ALSO MAKES IT POSSIBLE TO CARRY OUT DEVELOPMENT ACTIVITIES WITH THE CIP.
In addition to the company’s “Learn to Grow” strategy that allows
The “Espacio Azul” (Blue Space) civil association, a non-profit en-
to gather, systematize and share knowledge that its employees
tity pertaining to Graña y Montero, supports and assists with CSR
generate in its operations, giving it considerable competitive ad-
actions in companies in the Group and others of a philanthropic na-
vantages, on the external front the organization now has its “Grow
ture, in which employees participate as an organized group called
and Share” strategy for the purpose of reaching beyond the organi-
“Graña y Montero Volunteers”.
zation itself, generating and sharing knowledge to fulfill the expec-
tations of its different stake-holders and fostering the development
These social responsibility actions and initiatives, as well as oth-
of a new culture centered on knowledge.
ers detailed in subsequent sections of this report, are included
For this reason, in the year 2010 a new set of actions related to the
been the subject of studies and recognition by institutions such as
development and promotion of value-generating spaces and links
Universidad del Pacífico, which included Graña y Montero’s CSR
with the country’s engineering community have been added to the
practices in its book “Experiencias Exitosas de RSE” (Successful
in our annual report to the United Nations’ World Pact and have
regular programs such as “Developing Job Skills in the Areas of In-
CSR Experiences).
fluence”. The development of the Engineering Portal, the Graña y
Montero Award for Peruvian Engineering Research, the develop-
Currently, the organization’s high level of local and international
ment of special training programs for new engineering graduates
growth, the professional and personal development of its more
at the national level, the signing of agreements with the UNI (Na-
than 16,000 employees including over 2,000 engineers, have be-
tional Engineering University) on conducting applied engineering
come a key focus of action for successfully taking on future chal-
research are examples of a CSR policy aligned with education and
lenges in its organizational development through human resource
its strategic objective of Knowledge Management.
management policies and programs geared toward the formation
of highly motivated, high-performance teams, for their own benefit,
as well as that of their families and the company.
45
HUMAN
RESOURCE
MANAGEMENT
The Group’s considerable growth has entailed an increase in the
number of employees, totaling 16,158; that is, an increase of 21.11
% compared to 31 /12/09. The group of professional employees
has grown by 31.4 %, totaling 2,816, among which 2,061 engineers
in different specialties stand out. This number has risen 31.02% in
relation with 31.12.09. It is a young, professional organization in which
74.73% of its employees are 40 years of age or less.
REPRESENTATIVES OF THE GRAÑA Y MONTERO GROUP WITH THE CERTIFICATE RECEIVED AT THE “GREAT PLACE TO WORK” AWARD CEREMONY
This growth was accompanied by human resource management in line with the challenges posed by
an organization growing domestically and internationally, facing growing standards of competitiveness
and specialization, and creating greater opportunities for its employees’ personal and professional
growth. In response, programs for the identification of talent as reference sources for the different
business specialties, as well as coaching and mentoring programs for different groups of profession-
als, have been implemented. Virtual knowledge forums have been established, and knowledge and
professional development maps have been prepared and disseminated, among other actions.
For these reasons, in the measurement of the working climate conducted in 2010 by the Great Place
to Work Institute, the Graña y Montero Group, composed of its six main companies, was recognized
among the large Peruvian companies that over two thirds of their employees consider to be a great
place to work.
Because we are an engineering service organization that has the valuable contribution of 2,061 engi-
neers and knowledge management as a guiding principle of its strategic development, training activi-
ties continued increasing in coordination with our Corporate Learning Center (CLC).
47
YEAR-END CELEBRATION
In the different programs run by the CLC, 209,203 hours of training
The promotion of employees’ artistic talent has been noted at differ-
have been offered, which is an increase of 10.63% over the number
ent gatherings to promote camaraderie that have been organized
Educational statistics
of hours recorded as of 12/31/09. The startup of the third internal
in the companies, reflecting joy and identity in relation with them,
No. of Individuals as of 12/31/10
G&M S.A.A.
GyM
GMV
GMD
GMP
GMI CONCAR
Total
Specialization Program for Project Managers, taught jointly with
which are key factors in continuing to face the challenges of growth
the Universidad de Piura’s Senior Management Program (PAD),
with enthusiasm and professional responsibility.
in which 43 engineers from the different companies in the Group
In conjuction with the human resource management of laborers,
participate, merits special mention.
a database including over 50,000 laborers was created and more
than 10,000 laborers were recruited during the year 2010.
Among the different activities carried out in order to achieve an
organizational culture that promotes communication, creativity
and integration, internal channels of communication have been in-
creased through the use of a number of physical and virtual publi-
cations and portals. A mid-year internal corporate communication
campaign whose slogan was “Graña y Montero: Peruvians build-
ing Peru”, established an emotional link of pride and identification
between the projects executed by the company and employees’
personal and family achievements.
Employees on Subsidiaries’ Payrolls
Engineers / Architects with Master’s Degrees
Other Professionals with Master’s Degrees
Engineering / Architecture Professionals
Other Professionals
Total Professionals
Technicians
Total Employees on Subsidiaries’ Payrolls
Laborers
Skilled Laborers
Non-skilled Laborers
Subcontractors’ Laborers
Total
25
20
5
11
61
6
67
-
-
-
-
55
8
866
448
1,377
241
1,618
4,180
4,446
1,540
10,166
Total Personal
67
11,784
Interns
Independent Professionals
Total
Grand Total
-
-
-
90
6
96
67
11,880
10
1
21
18
50
21
71
-
-
-
-
71
8
2
10
81
8
17
453
72
550
487
1,037
-
-
-
-
20
3
81
33
137
259
396
-
-
-
-
3
6
370
70
449
147
596
-
57
-
57
20
1
141
56
124
1,920
47
699
192
2,816
1,769
2,930
1,961
5,746
-
-
-
-
4,180
4,503
1,540
10,223
1,037
396
653
1,961
15,969
36
-
36
9
1
10
1
33
34
3
-
3
147
42
189
1,073
406
687
1,964
16,158
49
Age Distribution
No. of employees as of 31.12.10
G&M S.A.A.
GyM
GMV
GMD
GMP
GMI
CONCAR
Under 20
From 20 to 30
From 31 to 40
From 41 to 50
From 51 to 60
From 61 to 65
Over 66
Total
-
7
19
28
10
2
1
67
-
743
483
223
130
27
12
1,618
-
28
27
14
2
-
-
71
-
430
488
90
28
-
1
1,037
-
82
83
90
107
27
7
396
2
198
217
95
62
12
10
25
773
689
339
120
13
2
Total
27
2,261
2,006
879
459
81
33
596
1,961
5,746
Population Statistics
Hiring Scheme Statistics 2009 - 2010
No. of Individuals as of 31.12.10
G&M S.A.A.
GyM
GMV
GMD
GMP
GMI
CONCAR
Total
Organization
Headquarters
Projects
Total
Gender
Male
Female
Total
Herarchy
Senior Management
Employees
interns
Independent Professionals
Laborers
Total
67
-
67
49
18
67
37
30
-
-
-
67
367
1,251
1,618
1,252
366
1,618
7
1,611
90
6
10,166
11,880
43
28
71
33
38
71
-
71
8
2
-
81
196
841
1,037
736
301
1,037
3
1,034
36
-
69
327
396
357
39
396
5
391
9
1
-
1,073
406
294
302
596
507
89
596
6
590
1
33
57
687
31
1,930
1,961
1,776
185
1,961
1
1,960
3
-
-
1,964
1,067
4,679
5,746
4,710
1,036
5,746
59
5,687
147
42
10,223
16,158
L
A
T
O
T
.
0
1
2
1
1
3
.
1,213
4,533
No. of Individuals
as of 31.12.10
.
.
.
A
A
S
M
&
G
.
9
0
2
1
1
3
.
Type of Employment Contract
.
.
.
A
A
S
M
&
G
.
0
1
2
1
1
3
.
M
y
G
.
9
0
2
1
1
3
.
M
y
G
.
0
1
2
1
1
3
.
V
M
G
.
9
0
2
1
1
3
.
D
M
G
V
M
G
.
0
1
2
1
1
3
.
.
9
0
2
1
1
3
.
P
M
G
D
M
G
.
0
1
2
1
1
3
.
.
9
0
2
1
1
3
.
I
M
G
P
M
G
.
0
1
2
1
1
3
.
.
9
0
2
1
1
3
.
I
M
G
.
0
1
2
1
1
3
.
R
A
C
N
O
C
.
9
0
2
1
1
3
.
L
A
T
O
T
.
0
1
2
1
1
3
.
R
A
C
N
O
C
.
9
0
2
1
1
3
.
Total Empoyees
50
67 1,209
1,618
Laborers - Common System
50
67
278
433
9
26
251
288
228
237
38
92
64
70
-
-
931
1,185
45
679
749
131
159
379
504 1,106 1,891
54
63
-
-
-
71
930 1,037
359
396
417
596 1,170 1,961
5,746
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
56
57
-
-
56
57
-
-
-
-
-
-
-
-
-
-
1,151
1,215
5,580
7,468
6,731
8,683
-
-
-
-
-
-
- 1,095
1,158
- 5,580
7,468
- 6,675
8,626
Employees
Permanent
Employees
Temporary
Employees
Permanent
Laborers
Temporary
Laborers
Special Civ. Cons.
Sys.
(Temporary)
Total Laborers
Total Employees
and Laborers
50
67 7,884 10,244
63
71
930 1,037
359
396
473
653 1,170 1,961 10,929 14,429
51
PREVENTION AND
ENVIRONMENT
At Graña y Montero, the consolidation of an integrated management
system for risk prevention and the environment has implied the
development of a preventive culture supported daily by internal
specialized training, proper tools and equipment and, fundamentally,
continuous encouragement of safe conduct in our operations.
During 2010, Behavior-Based Safety (BBS) has been incorporated
Our performance indicators are unequivocal evidence that we are
as a key tool in the Operating Risk Management System aimed at
on the right path. Over the last two years, Frequency Index (FI) has
turning unsafe behaviors into safe behaviors, identifying critical be-
remained below 0.60 (OSHA), the number of hours of safety and
haviors, designing safe conducts and monitoring our workers’ per-
environmental training total 872,293, and the investment in person-
formance on the job. The progress and results already obtained
al and collective protection equipment is approximately US$ 6.5M.
on works such as Poracota and Orcopampa, where it has been
These results are objective support for the trust that our employees
possible to increase safe behaviors 13% in rock clearing and sup-
and customers place in us and they enable us to pursue the growth
port activities, enable us to continue innovating and applying this
of our operations with safety.
methodology in other important works such as Lot 1AB (Andoas),
Our preventive culture is a source of value and a sign of our unfail-
Lot 8 (Trompeteros), the Marcona Mine, the National Theater and
ing commitment to our employees, customers and society.
structural assembly at Antamina.
53
KNOWLEDGE
MANAGEMENT
In the year 2010 the General Managers and their Human Resource
In this manner, internal instructors become reference sources on
Management teams consolidated Knowledge Management as a
topics covered in the courses they teach.
strategic line of action for the Group’s human resource develop-
ment. As part of this process, they met in the month of August
In the execution of the “Learn to Grow” strategy, 90.4 % of the ob-
to evaluate the progress achieved on the implementation of the
jectives established were achieved, among which the increase in
model and to analyze the results of the qualitative study conducted
motivation and commitment among professionals from the differ-
Professional Development
at each company on its employees’ perception of the training re-
ent companies to the great cultural change that the development of
ceived and its effect on working climate measurements. This ex-
Knowledge Management entails stands out.
ercise has made it posible to review and optimize the development
of future training plans within the Knowledge Management model.
Toward the end of the year, the Board of Directors approved the
A total of 209,203 hours of training have been provided, which is
ture of knowledge and its central role in the development and time-
15% more than the goal for the year, obtaining a ratio of 41.2 man
ly allocation of professional talent demanded by the challenges
hours per employee. The ratio is slightly lower than that of the
presented by the growth of the companies in the Group.
creation of CLC Management to foster the development of a cul-
preceding year, due to the significant increase in personnel in the
companies, which exceeded the number initially planned by 20%.
In the exercise of internal teaching, the key activity for the devel-
opment of knowledge in the organization, 41,117 hours have been
taught, which is an increase of 69% of the total hours of internal
training.
Collective Memory
External Training
Grand Total
Avg. Monthly Number of
Employees
Hours of Training /
Employees
Risk prevention and
Environmental Management -
Laborers
OUR KNOWLEDGE MANAGEMENT APPROACH IS PERSONIFIED IN THESE INTERNAL INSTRUCTORS
Training in the year 2010
Description
Training
Basic Program -
Young Engineers
G&M S.A.A.
GyM
GMV
GMD
GMP
GMI
CONCAR
Total
22
19,517
-
3,508
2,211
114
903
26,275
224
277
523
12,128
1,132
28,970
61,747
612
140
3,931
4,683
14,686
1,418
18,798
38,410
12,680
2,906
17,797
7,690
255
13,774
21,933
56,136
104,156
7,171
2,945
75,827
64,210
209,203
60
1,383
68
980
587
379
1,622
5,078
8.7
44.7
69.4
39.2
30.3
57.6
39.6
41.2
775,253
38,199
15,141
29,016
43,700
872,293
55
COMMUNITY
RELATIONS
JOSÉ GRAÑA MIRÓ QUESADA BESTOWS THE FIRST AWARD FOR PERUVIAN ENGINEERING RESEARCH
During 2010, the development and implementation of CSR plans in
The consolidation of the “Capacities Building in the Areas of Influ-
Reinforcing support for the professional engineering community,
the different projects continued to be a line of action in the “Grow
ence” program has continued. In the year 2010, more than 3,500
in the month of June the Engineering Portal (www.portaldeingenie-
and Share” strategy that seeks to go beyond our own organization,
residents of the areas surrounding the projects have been trained
ria.com), was launched for the purpose of promoting the dissemi-
generating and sharing knowledge in the different communities
and the new “Program for Social Accompaniment in Social Hous-
nation of knowledge and interaction among all members of the
associated with our operation, driving the development of positive
ing Projects” has been implemented. This program is aimed at
community (companies, universities, research centers, industry
leadership that generates welfare and the development of a culture
promoting a new urban lifestyle respectful of people’s rights and
associations, professional associations, etc.). This social/profes-
of progress centered on knowledge.
supportive of harmonious community relations. A total of 3,718
sional network now has over 10,000 registered users in its first 06
Our different CSR activities have benefited more than 116,000
ums and the Parque Central condominiums in downtown Lima
communication capable of benefiting each user and contributing
owners of real estate in the Los Parques del Agustino condomini-
months of existence and is expected to be an interactive means of
people in every region of the country and in our Pueblo Viejo proj-
have been trained.
ect in the Dominican Republic, offering 289,574 man hours in train-
ing activities, which is 37.86% growth in comparison with the num-
In relation with the scientific and university community, the “Graña
to the development of a culture of cooperation in the community.
ber of hours taught in the preceding year.
y Montero Award for Peruvian Engineering Research” has been
SURVIAL published a guide titled “Aventura 757: La Ruta SURVIAL”
The team of professionals in charge of CSR activities has more
2010 and the immediate announcement of its second edition. With
development of the route through tourism for the benefit of users
than 40 members, including professionals in social sciences, such
the Universidad Nacional de Ingeniería (National Engineering
and communities in the area. An award was received for this ini-
as anthropologists, sociologists, social communicators and social
University) the agreements to support the development of applied
tiative in the Communication category of the “Business Creativity
institutionalized through the first awards ceremony held in June
(Adventure 757: The SURVIAL Route) intended to foster economic
workers. All of them work to develop and maintain positive rela-
research in project engineering have continued and the study on
2010” contest.
tions with the different communities with ties to our operations.
self-construction in outlying areas was completed.
The following is a summary of the most significant CSR actions
carried out in the different geographic areas where the different
companies in the Graña y Montero Group operate:
Business Creativity Award
2010, in the Communication
category
57
Social Responsibility Projects
INITIATIVE
Educational talks geared toward improving relationships parents
and children, 517 hours of training
Events and donations to celebrate Christmas in the communities of
the different projects, 4,882 beneficiaries
Support with philanthropic donations to the firefighters, educational
entities, police entities, private entities, religious groups, NGO’s,
the armed forces, Instituto de Trabajo y Familia (Work and Family
Institute), local governments, suppliers, art and culture.
Social welfare campaigns and good housing conditions for local
residents
Environmental awareness-raising campaign for Earth Day
TARGET GROUP DIRECTLY
BENEFITED
PLACE
Residents if the towns of
Condorcocha and
Carpapata
Tarma - Junín
Moquegua, Cusco,
Abancay, Ayacucho, Piura
and Lima
Piura, Lima, Puno, Loreto,
Ancash, Lambayeque,
La Libertad, Ayacucho,
Arequipa and Cajarmarca
Pasco, Arequipa, Ayacucho
and Piura
Pasco, Piura and Loreto
Children in the different
communities where the
projects are located
Fire department, schools,
“Sembrando” (Sowing)
program, Peruvian National
Police, symphonic orchestra,
Peruvian Navy and
related communities
Local laborers and relatives
living in the area of influence
of the projects
Community of Colquijirca,
Tinyahuarco, Pasco;
La Calera school, San Pablo,
Negritos, Piura and residents
of the town of Andoas, Loreto
Training program for teachers to improve primary education
Capacity-building program for insertion in the labor market -
Direct training, 2878 beneficiaries and 132,518 man hours
of training
Waste water treatment for domestic use program
Visits by students to see the operations of Consorcios
Terminales
Training related to developing self-esteem and identity
Teachers at schools
Arequipa located in the
areas of influence of the
petroleum storage terminals
Local residents of the areas of
influence of the projects
Arequipa
Ayacucho, Arequipa, Cusco,
Lima, Pasco, Lambayeque,
La Libertad and Lima
Communities located in areas
adjacent to the projects
Piura and Ancash
Grade school through high
school studentnts in the areas
near the petroleum storage
terminals
Ica, Arequipa, Lima, La
Libertad and Chiclayo
Arequipa, Junin, Lima
High school seniors, parents
and women of the
communities located in the
areas of influence of the
projects
59
Training on safety and security
Local residents of the areas of
influence of
the projects
Piura, Pasco and Loreto
Establishment of opportunities for dialogue with customers
Local residents of the areas of
influence of the projects
Arequipa
Developing job skills program in the areas of influence – Indirect
training. 605 beneficiaries and 28,654 man hours of training
Local residents of the areas of
influence of the projects
Cajamarca, Arequipa, Ica,
Pasco, Piura, Callao and
Lima
Training on environmental protection and the environmental impact
of operations in the areas of incluence
Several training sessions on health, psychological and sex
education
University students, schools,
customers, relatives
of employees and the
community in general
Ancash, Lima, Arequipa,
Cusco, Junín, Loreto,
Pasco, Piura and República
Dominicana
University students, schools,
customers, relatives
of employees and the
community in general
Ica, Ancash, Junín and Lima
Continuous dialogue with local and communal authorities different
areas of Influence
Local residents of the areas of
influence of the projects
Ica, Arequipa, Lima and
Pasco
Orientation talks and description of projects
Local residents of the areas of
influence of the projects
Piura
Preparation and dissemination of Survial Guide to promote local
tourism
Communities neighboring the
Survial highway concession
Ayacucho - Cusco
Programs and cleanup campaigns to protect the environment
Hazardous material and substance management program
Improvement in education infrastructure
Improvement in infrastructure to support environmental protection
and mitigate the impacts of the operations
Environmental monitoring programs to prevent pollution
Communities neighboring the
Survial highway concession
Cajamarca, Pasco,
Arequipa, Piura, Lima and
República Dominicana
Local residents of the areas of
influence of the projects
Ica, Cusco, Lima and
República Dominicana
Schools located in the areas
of influence of the projects
Piura and Lima
Communities adjacent to
the areas of influence of the
project
Communities adjacent to
the areas of influence of the
projects
Pasco, Piura, Arequipa and
Ancash
Pasco, Arequipa, Piura and
Lima
61
Program for entrepreneurial women
Vocational Orientation and Life Plan Program geared toward young
people and adolescents
Disaster prevention program; spill, earthquake, tsunami and flood
drills
Social Accompaniment Program: Leader training in order to
form communities of healthy homes, 3,718 beneficiaries
Traffic safety, civic and highway cleaning programs
Waste Management Program: collection and elimination
Women of the communities
adjacent to the areas of
influence of the projects
Young people and
adolescents living in the areas
of influence of the projects
Junín, Piura, Arequipa, Ica
and Lima
Lima and Piura
Empoyees and commnities in
the areas of influence of the
projetcs
Moquegua, Ica, La Libertad,
Lima, Ancash, Chiclayo,
Pasco
Residents of the social
housing condominium built
by GMV
Children and adolescents in
the schools located in
the areas near the highways
maintained by Concar
Communities located in the
areas surrounding the projects
El Agustino/Cercado - Lima
Junín, Piura, Ayacucho,
Cusco, Lima, Tarapoto,
Amazonas and Pasco
Pasco, Ica, Lima, Arequipa,
Piura and the Dominican
Republic
Environmental programs and good environmental practices in the
projects and offices
Communities adjacent to
the areas of influence of the
projects
Pasco, Ica, Ancash and
Lima
Health campaigns and programs
Graña y Montero Volunteering Program: Christmas activities, cold
weather relief campaign, pre-fabricated construction of PRONEI
(non-formal early childhood education facility) in Lurín and tree
planting at children’s shelter
Piura, Lima and Arequipa
Puno and Lima
Children and adolescents
in the schools located in
the areas of influence of the
projects
Children of PRONEl Corazón
Lima de Jesús, the Santa
María Reyna school in Vila el
Salvador the Padre Iluminato
shelter communities high in
the Andes with respiratory
problems victims of the Haiti
earthquake and Cusco floods
Program to rescue endangered species, rescuing the Hualtaco
Participation in hadicraft fairs in towns to support productive
workshops in the La Arena project
Communities near the areas
of influence of the projects
Talara - Piura
Communities located in the
areas adjacent to the La Arena
project
Sánchez Carrión - La
Libertad
63
HISTORICAL
SUMMARY
65
HISTORICAL
SUMMARY
Graña y Montero was founded 77 years ago on June 22, 1933 under the
name of GRAMONVEL by engineers Carlos Graña Elizalde,
Alejandro Graña Garland and Carlos Montero Bernales. It was a
construction company until the year 1949 when it merged with Morris
y Montero to acquire capacity for the execution of paving and earth
moving works under the new name of Graña y Montero.
1937 - BAÑOS MUNICIPALES DE MIRAFLORES
In those times it participated in the country’s major infrastructure
In the 1990s, Graña y Montero participated actively in the Peruvian
works, such as the Southern Pan-American Highway, El Pato Air
privatization process as Telefónica’s local partner in Telefónica del
Base for the United States government and the city of Talara, and
Peru, as ENDESA’s partner in Empresa de Generación
built some of Lima’s most emblematic buildings, such as the Min-
Eléctrica de Lima, and REPSOL’s in the La Pampilla Refinery.
istry of Economy and the Ministry of Labor.
In the 1950s, it formed Consorcio de Ingenieros Contratistas Ge-
ticipate in the infrastructure concession program, which has led
nerales S.A. to execute more complex projects, such as the Cañón
to participation in the majority of the contracts and the operation of
del Pato Hydroelectric Plant, the Steel Mill in Chimbote and the
over 4,000 Km of highways today through its subsidiary, CONCAR
runway for Lima’s Jorge Chávez Airport.
S.A.
In recent years, Graña y Montero was the first company to par-
Subsequently, it concentrated its growth on large-scale projects
It has also led the expansion low income housing with the execu-
such as the Cuajone and Cerro Verde mines, the Shell, Mobil and
tion of megaprojects through its subsidiary, GMV, which began its
Occidental petroleum projects, and the Chavimochic and Chin-
operations on January 1, 2009.
ecas irrigation projects.
Upon the celebration of its 50th anniversary in 1983, the Strategic
pany in its field listed on the Lima Stock Exchange, it is the clear
Diversification Plan was launched, leading to the formation of GMP,
leader in the country’s engineering and infrastructure sector and
the petroleum service company; GMD, the information technology
it has activities in 6 other Latin American countries in addition to
Currently, the Group has 2,061 engineers, and it is the only com-
service company; and GMI, the engineering consulting company.
Peru.
These companies were the origin of what is now the Graña y Mon-
tero Group.
67
CORPORATE
GOVERNANCE
69
CORPORATE
GOVERNANCE
Board of Directors
The year 2010 was a very important year for Graña y Montero with
regard to corporate governance. We not only obtained the Lima Stock
Exchange Key for the second year in a row; we were also invited to join
the Companies Circle, a select group of 19 Latin American companies
with high corporate governance standards.
The Companies Circle pertains to the Latin American Corporate
Governance Roundtable, which was formed in May 2005 in Sao
Paulo, Brazil, with support from the OECD, the International Finance
Corporation (IFC) and the Global Governance Forum. The purpose of
this group of companies is to share our experiences, as well as the
benefits that incorporating good corporate governance practices has
brought to our companies, and to promote their adoption by other
private-sector companies in Latin America.
José Graña Miró Quesada
Chairman
Carlos Montero Graña
Vice-Chairman
Hernando Graña Acuña
Internal Director
Mario Alvarado Pflucker
Internal Director-CEO Chief
Executive Officer
Augusto Baertl Montori
Independent External Director
José Chlimper Ackerman
Independent External Director
Roberto Abusada Salah
Independent External Director
José Antonio Colomer Guiu
Independent External Director
Teodoro E. Harmsen Gómez
de la Torre
External Director
7171
Profile of the Board of
Directors
José Graña Miró Quesada
José Antonio Colomer Guiu
Chairman of the Board of Directors since August of 1996. Architect. Additionally, he is the Chairman of the Board of Directors of subsidiaries
Director since March 2009. Certificate in Corporate Management IESE Business School, Universidad de Navarra. Certificate in Marketing
GyM, GMP, GMD, GMV and CONCAR, as well as Vice Chairman of the Board of Directors of GMI. He is also a Director of Empresa Editora El
from ESADE. Certificate in Quality and Strategic Marketing from AEDEM, Senior Management. Certificate in Leadership and Innovation IESE,
Comercio S.A. and Relapasa.
Carlos Montero Graña
Universidad de Navarra. He is a Director of BBVA Banco Continental and Holding Continental, as well as MAPFRE Cataluña. Additionally, he
is a Director of GMV.
Vice Chairman of the Board of Directors since August of 1996. Civil Engineer. Additionally, he is the Vice Chairman of the Board of Directors of
Teodoro E. Harmsen Gómez de la Torre
GyM, Vice Chairman of the Board of Directors of GMP and Director of CONCAR
Director since August of 1996. Civil Engineer. President of GMI S.A. He is a Director of Wagonlits and Director of MDI. Professor emeritus at
the PUCP School of Science and Engineering. He is also and Honorary Member of the American Concrete Institute, among other distinctions.
Roberto Abusada Salah
Director since March 1998. PhD in Economics (Cornell, USA). He is a Director of GMD, CONCAR and the Instituto Peruano de Economía (IPE/
Mario Alvarado Pflucker
Peruvian Institute of Economics).
Augusto Baertl Montori
Director since March 2003 and General Manager. Civil Engineer with a Master’s degree in Engineering Administration from George Washington
University, USA. Currently, he is also a director of GMD, GMI, GyM, GMP, GMV, CONCAR, Norvial and América Leasing.
Director since March 2005. Mining Engineer. He is the Executive President of Gestora de Negocios e Inversiones S.A. and Agrícola Chapi .S.A.
Hernando Graña Acuña
Additionally, he is a Director of Alturas Minerals, Norsemont, Golden Alliance, Interbank, FIMA, BISA and GMP.
Director since August of 1996. Industrial Engineer with a master’s degree in Mining Engineering from the University of Minessota, USA. He is a
Director of GyM, GMI, GMP, Ecotec S.A. and CONCAR. President of Norvial S.A. He is also a Director of CAPECO, AFIN and TGP.
José Chlimper Ackerman
Director since March 2006. Engineer with a Master’s degree in Economics and Business Administration from North Carolina State University,
Chairman of the Board of Directors of Corporación Drokasa and Sociedad Agrícola Drokasa, of which he is also the CEO. Director of
Maestro Peru S.A. and Banco Central de Reserva del Peru. Director of Aeropuertos del Peru S.A. Additionally, he is a Director of GyM.
73
Board of Directors
Committees
Auditing and Processes Committee
Roberto Abusada Salah, Chairman
José Chlimper Ackerman
Teodoro E. Harmsen Gómez de la Torre
This committee held two meetings during the year.
Human Resource Management and Social
Responsibility Committee
Augusto Baertl Montori, Chairman
José Chlimper Ackerman
Roberto Abusada Salah
This committee held three meetings during the year.
Investment and Risk Committee
José Graña Miró Quesada, Chairman
Augusto Baertl Montori
José Antonio Colomer Guiu
This committee held four meetings during the year.
Executive Commission
Shareholder Service Office
Self-Evaluation of the Board of
Directors
The Executive Commission responsible for coordination of the Group
The Shareholder Service Office handled a total of 39 inquiries and
The Board of Directors’ fifth Self-Evaluation Process took place at
is composed of the 4 Executive Directors and the 6 General Managers
meetings with investors and company shareholders during the year
Graña y Montero S.A.A., as well as at our subsidiaries. On this occa-
of the companies in the Group.
2010 and participated in 4 international meetings with investors in Co-
sion, the self-evaluation consisted of offering points for improvement
lombia, Chile, London and New York, where 41 meetings were held.
in the way Board of Directors meetings are run, improving committee
José Graña Miró Quesada
Chainman
Carlos Montero Graña
Hernando Graña Acuña
Mario Alvarado Pflucker
Juan Manuel Lámbarri
Vice Chainman
Director
Chief Executive Officer
General Manager GyM
Francisco Dulanto Swayne
General Manager GMP
Jaime Dasso Botto
General Manager GMD
Walter Silva Santisteban Requejo
General Manager GMI
Jaime Targarona Arata
General Manager CONCAR
Rolando Ponce Vergara
General Manager GMV
The Executive Commission held 4 meetings during the year 2010.
meeting times. Continuing visits to projects, the Directors visited the
Commuter Rail (Electric Train) project and, in Arequipa, they visited the
Cementos Yura Plant Expansion project and the Cerro Verde Potable
Water Treatment Plant project.
75
Main Executives
Mario Alvarado Pflucker
Jaime Dasso Botto
Chief Executive Officer since 1997. He obtained a Bachelor’s degre in Civil Engineering from Universidad Ricardo Palma and a Master’s degree in
General Manager of GMD from 2000 to the present. He obtained a bachelor’s degree in Electronic Engineering and a Master’s degree in
Engineering Administration with specialization in Construction Management from George Washington University, USA. Currently, he is a director
Software Development from Stevens Institute of Technology, U.S.A. He was the Commercial Manager of GMD from 1994 to1999. Currently, he
of GMD, GMI, GyM, GMP, CONCAR, Norvial and América Leasing.
Juan Manuel Lámbarri Hierro
is also a director of GMD.
Walter Silva Santisteban Requejo
General Manager of GyM since 2001. Civil Engineer, graduat of Pontificia Universidad Católica del Peru and the Universidad de Piura Senior
General Manager of GMI from 1998 to 2005 and Managing Director from 2006 to the present. He obtained a bachelor’s degree in Civil Enginee-
Management Program (PAD). He joined Graña y Montero in the year 1982 and currently, he is also a Director of GyM, GMV and GMI.
ring from Universidad Nacional de Ingeniería (National Engineering University). Currently, he is also a director of ECOTEC.
Hernando Graña Acuña
Jaime Targarona Arata
Director and Executive at GyM. Industrial Engineer with a master’s degree in Mining Engineering from the Univerity of Minessota, USA. He is a
General Manager of CONCAR since August of 2005. Civil Engineer graduated from Universidad Autónoma de Guadalajara, with an MBA from
Director of GyM, GMI, GMP, Ecotec S.A. and CONCAR. President of Norvial S.A. He is also a Director of CAPECO and TGP.
Universidad San Ignacio de Loyola. He has also held the position of Civil Engineer on different projects, Commercial Manager of the GyM Special
Francisco Dulanto Swayne
General Manager of GMP S.A. since the company was founded in 1984. Director since 1988. He attended Universidad Nacional de Ingeniería,
Rolando Ponce Vergara
Projects Division and General Manager of Graña y Montero Mexico.
ESAN, and Universidad de Piura (PAD). He has worked for the Graña y Montero Group since 1974. He is also he is a Director of Consorcio
General Manager of GMV since October of 2008. Previously, he held the position of Manager of the Real Estate Division. He has worked for
Terminales. He was the President of the SPE (Society of Petroleum Engineers), Lima Section in 1991 and Director of the Sociedad Nacional de
the Group since the year 1993. He is a Civil Engineer by profession, with a degree from Universidad Ricardo Palma and a Master’s degree in
Minería y Petróleo y Energía in 1993-1994 and 2005-2006.
Construction and Real Estate Business Management from Pontificia Universidad Católica de Chile-Politécnica de Madrid. Currently es also
Director of GMV
Mónica Miloslavich Hart
Chief Financial Officer July 1, 2009. Economist. Graduate of Universidad de Lima. She has been with the Group since 1993. She was the Finance
Manager of GME S.A from1998 to 2004 and Finance Manager of GyM from 2004 to 2009.
77
César Neyra Rodriguez
Manager of Internal Auditing and Management Processes since 2003. He has a Bachelor’s degree in Accounting from Universidad Nacional
Federico Villarreal and a Master’s degree in Business Administration and Finance from Universidad del Pacífico. He has also studied Quality
Improvement Systems and graduated from the Six Sigma Methodology program at Caterpillar University in Mexico and the U.S.A
Kinship
Mr. José Graña Miró Quesada, Chairman of the Board of Directors,
Capital
The capital of the company as of December 31, 2010 amounted to
has third degree kinship with Ms. Yamile Brahim Graña, shareholder
S/.390,798,933.00 represented by 558,284,190 shares with a nominal
of the company, and fourth degree kinship with the director, Mr. Her-
value of S/.0.70 each.
Claudia Drago Morante
Corporate Legal Manager from 2000 to the present. Attorney graduated from the University of Lima. PADE in Finance and Corporate Law
from ESAN. She was the Legal Advisor to GMD from 1997 to 2000. Currently, she is also the Stock Exchange Representative.
Juan José Arrieta Ocampo
Manager of Human Resources Management and Social Responsibility since November of 2007. Bachelor’s degree in Sociology from
Pontificia Universidad Católica. PADE in Business Administration from ESAN. He was the Human Resources Manager at GyM from
1999 through October 2007.
nando Graña Acuña. Lastly, Mr. Teodoro Hans Harmsen Andress, a
director of GMP, has first degree kinship with Mr. Teodoro Harmsen
Gomez De La Torre, a director of the company.
Legal Denomination
In a corporate split-off from Inversiones Graña y Montero S.A.,
Graña y Montero S.A.A. was incorporated by means of a public
document on August 12, 1996 and registered on card 131617 and
electronic record 11028652 in the Registry of Juridical Persons of
Lima.
79
List of Main
Shareholders as of 12/31/2010
As of December 31, 2010, we had 1077 shareholders, of which approximately 13.58% own less than 1% of the capital stock and nearly 21.44%
SHAREHOLDING
NUMBER OF SHAREHOLDERS
INTEREST PERCENTAGE AS OF 31/12/2010
have from 1 to 5%.
The main shareholder is the GH Holding Group, represented by José Graña Miró Quesada, Chairman of the Board of Directors.
Main Partnership List al 31.12.2010
Less than 1%
From 1% - 5%
From 5% - 10%
Other 10%
Total
1,061
10
3
3
1,077
13.58%
21.44%
20.14%
44.84%
100.00%
NUMBER OF SHARES
INTEREST (%)
NATIONALITY
FULL NAME
GH Holding Group
AFP Integra (ING GROUP)*
Prima AFP (Grupo Crédito) *
AFP Horizonte (Grupo BBVA)*
Bethel Enterprises S.A.
Profuturo AFP (Scotiabank Group)*
Byron Development S.A.
117,538,203.00
66,925,007.00
65,872,707.00
47,214,243.00
33,785,285.00
31,414,443.00
22,432,223.00
CTM6 Cartica Corporate Governance Fund, L.P.
16,144,748.00
Subtotal
Other Shareholders
Total
* Sum of Funds 1, 2 and 3
189,900,459.00
368,383,731.00
558,284,190.00
Panama
Peru
Peru
Peru
Panama
Peru
Panama
EE.UU.
21.05%
11.99%
11.80%
8.46%
6.05%
5.63%
4.02%
2.89%
71.89%
28.11%
100.00%
Dividend Policy
The company’s Dividend Policy in effect in the year 2010 is to distribute 20% of the available profits as dividends.
Corporate Purpose
The company’s main purpose is to dedicate its efforts toward investments and mercantile operations in general, as well as engineering services,
management consultancy, real estate investments, and the acquisition, transfer and negotiation of shares of companies and other securities.
CIIU - 6719
Duration of the Company
Graña y Montero S.A.A. was incorporated for an indefinite period of time.
81
Changes in Shares
Volume traded GRAMONC 1
Vol. Traded US$
Closing Price
The share price quoted at year end was S/. 6.65. Average liquidity during the year was 97.61 % and the volume traded during the year amounted
to S/. 437,277,661.60. Lastly, the IGBVL (general index) recovered 64.99% and the ISBVL (selective index) recovered 42.86%. It should be
noted that the variation in GRAMONC shares was 134.98% (including the effect of the issuance of stock dividends)
MONTHLY SHARE QUOTES
ISIN CODE
MNEMONIC
Year - Month
Opening S/.
Closing S/.
Max. S/.
Min. S/.
Quotes 2010
PEP736581005
GRAMONC1
PEP736581005
GRAMONC1
PEP736581005
GRAMONC1
PEP736581005
GRAMONC1
PEP736581005
GRAMONC1
PEP736581005
GRAMONC1
PEP736581005
GRAMONC1
PEP736581005
GRAMONC1
PEP736581005
GRAMONC1
PEP736581005
GRAMONC1
PEP736581005
GRAMONC1
PEP736581005
GRAMONC1
2010-01
2010-02
2010-03
2010-04
2010-05
2010-06
2010-07
2010-08
2010-09
2010-10
2010-11
2010-12
2.85
3.07
3.00
3.70
4.40
4.25
4.35
4.40
4.55
5.60
6.37
7.15
3.07
3.00
3.70
4.40
4.30
4.40
4.36
4.55
5.60
6.37
7.15
6.65
3.50
3.14
3.70
4.50
4.50
4.41
4.36
4.61
5.60
6.50
7.35
7.15
2.85
2.95
3.00
3.70
4.05
4.14
4.19
4.40
4.45
5.60
6.37
6.50
Price
Avg. S/.
3.16
3.01
3.34
4.17
2.51
2.44
2.37
2.51
2.87
2.99
2.81
2.96
25,000,000
20,000,000
15,000,000
10,000,000
5,000,000
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
8.00
7.00
6.00
5.00
4.00
3.00
2.00
1.00
0.00
83
ANALYSIS OF
RESULTS
85
ANALYSIS OF
RESULTS
As of December 31, 2010
(Audited figures)
Summary
• The activity as of the 2010 year-end closing increased 21.86% (in nuevos soles) compared to the end of the year 2009, totaling S/. 2’660.4MM
(US$ 947.0 MM, 25.4% growth in dollars).
• Available Net Income at the end of 2010 amounted to S/. 273.5 MM (US$ 97.3 MM), which represents 10.2% of the activity and an increase of
110.8% compared to the year 2009. This increase is due to the profit on the sale of the Larcomar Entertainment Center, the profit resulting from
recovery of the investment in Compañía Logística de Hydrocarbons Boliviana (CLHB), and greater profit in the construction business, as well as
the petroleum business. The growth in Available Earnings, without considering the effect of the sale of Larcomar and the income from payment
of the investment in CLHB would be 52.2%.
• EBITDA (1) at the end of the year 2010 amounted to S/. 548.4 MM (US$ 195.2 MM) which represents 20.6% of the activity and an increase of
61.6% compared to the end of 2009. The increase in EBITDA without the effect of the sale of Larcomar would be 49.6%.
• The consolidated Backlog at the end of the year 2010 totaled S/. 5,289.7 MM (US$ 1,883.1 MM), which is an increase of 46.8% compared
to year end 2009. Of this Backlog, S/. 2,731.1 (US$ 972.2 MM) will be executed during the 2011 fiscal year, S/. 1,316.7 MM (US$ 468.7 MM) in
2012, and the balance from 2013 on.
Consolidated Figures
(in thousands of nuevos soles)
Activity
Billing
Gross Profit
Operating Profit
Net Income
Available Net Income
EBITDA (1)
2,183,233
2,001,475
329,551
224,019
207,550
134,401
339,397
2009
100.0%
91.7%
15.1%
10.3%
9.5%
6.2%
15.5%
2,660,398
2,502,461
455,584
414,616
418,067
273,542
548,451
2010
100.0%
94.0%
17.1%
15.6%
15.4%
10.2%
20.6%
2010 / 2009
21.8%
25.0%
38.2%
85.1%
101.4%
103.5%
61.6%
(1) Operating Profit + Depreciation + Amortization
87
Note:
Reference to the infrastructure business corresponds to highway concessions and not to construction, as mentioned in preceding
reports. The construction business is referred to as such in this report.
Profit and Loss
• The consolidated activity of the Graña y Montero Group closed the year 2010 with 21.86% growth compared to the year 2009, totaling S/.
The activity in the highway infrastructure operation and maintenance business as of the end of the year 2010 totaled S/. 258.6 (US$. 92.1), which
2,660.4 MM. The growth in the activity is mainly due to growth in the construction business, which grew S/. 221.9 MM (+14.6%), in the infrastruc-
is an increase of 60.4% compared to the year 2009. This increase is due to the Paita-Yurimaguas Highway Operation Contracts, the Contract on
ture business which grew S/. 97.4 MM (+60.4%), in the petroleum business which grew S/. 40.9 (+22.2%), and in the real estate business which
the Operation and Maintenance of Road Network 5 for Norvial, the Highway Maintenance Contract on Inter-oceanic Highway Southern Section
grew S/. 76.9 MM (+43.9%), taking into account that this company just began its operations in the year 2009.
1 for Survial, and contracts on state-owned highways to Tacna, Lambayeque, La Merced, Sullana and Ayacucho, among others.
The activity in the construction business amounted to S/. 1,743.3 MM (US$ 620.6 MM). The major contracts executed in the year 2010
In the information technology business, the activity as of the end of the year 2010 totaled S/. 141.2 MM (US$ 50.3 MM), which represents growth
by the Electromechanical Division were the Plant and Workshops for the Bayovar Mine, the Electrical Works and Instrumentation for Peru LNG,
of 30.2% compared to year-end 2009. This growth was mainly due to Software Factory and Technology Outsourcing.
and the assembly work for the Pueblo Viejo Mine in the Dominican Republic, while the major contracts for the Civil Works Division were the Inter-
oceanic Highway Section 1, the mining service contracts for the El Brocal and Shougang mines, and the Commuter Rail (Electric Train) works.
The Building Division’s major contracts executed were Hotel El Libertador, the Banco de Crédito IT Center, and the Santa Rosa Tunnel.
Activity in the real estate business amounted to S/. 252.3MM (US$ 89.8 MM). The majority of the revenue reported in the year corresponds to
the handover of housing units in the following projects: Parques del Agustino, Javier Prado 200 in Magdalena, Parque Central, Malecón Cisneros
in Miraflores and Golf Millenium in San Isidro.
Activity in the petroleum business closed the year 2010 at S/. 225.9 MM (US$ 80.4), which is an increase of 22.2% compared to the year 2009.
This increase is mainly due to an increase in the number of barrels produced per day from 1,100 to 1,300 on average, in addition to an increase
in the price of petroleum, as well as a higher number of cubic feet processed by the gas plant.
Activity in the engineering business amounted to S/. 95.3 MM (US$ 33.9 MM), which represents an increase of 29.0% compared to the figure at
the end of the year 2009. The sectors that drove the growth of this business are energy, mining, industry and building construction. The major
contracts executed during the year 2010 were engineering for the Consorcio Alto Cayma Water Treatment Plant, the Engineering Framework
Contract with Antamina, engineering for the New City of Morococha for Chinalco, Engineering for the El Sol Highway for Consorcio Hidalgo
Hidalgo, engineering studies for access roads to Las Bambas for Bechtel, the contract on the Supervision of Construction at Anglo American’s
2.600
2,200
1,800
1,400
1,000
600
200
1,321
1,530
932
2,660
2,182
1,888
Michiquillay Mine and the Supervision of the construction of the Inter-oceanic Highway Section 5.
2005
2006
2007
2008
2009
2010
89
• 47.4% of the consolidate Gross Profit came from the construction business: Although 63.7% of the activity was in the construction business,
Gross Profit from the construction business rose 28.9% compared to the preceding year. This increase is due to a higher level of activity in the
the percentage of Gross Profit fom this business is lower; 52.6% of Gross Profit was from business unrelated to construction, in line with the
three divisions, as explained previously, as well as an improvement in the gross margin from one year to the next.
Group’s diversification strategy.
Utilidad bruta
produced at the gas plant, as explained before.
Gross Profit from the petroleum business rose 43.6% compared to the preceding year. The increase in Gross Profit from this line of business
is due to a greater number of barrels of petroleum produced per day, in addition to the higher price of oil, as well as a greater volume of gas
Construction
Reals Estate
Enginnering
Highway Infrast/
Oper and Maint
Information
Technology
Petroleum Services
Lacromar
63.7%
9.2%
3.5%
9.6%
5.2%
8.3%
0.6%
Construction
Other
47.42%
52.58
Gross Profit from the highway infrastructure operation and maintenance business totaled S/. 88.5 MM (US$ 31.5 MM), which represents 60.0%
growth compared to the preceding year, mainly due to the Norvial highway concession and the aforementioned highway operation and mainte-
nance contracts.
Gross Profit from the real estate business totaled S/. 30.9 MM (US$. 11.0 MM), which was 89.3% higher than that of the preceding year due to
the delivery of housing units in the Parque Central project and the Malecón Cisneros project in Miraflores.
Gross Profit from the engineering business amounted to S/. 25.3 MM (US$ 9.0 MM), which represents 42.8% growth in relation with
the year 2009.
• Gross Profit amounted to S/. 455.6 MM (US$ 162.2 MM), which represents 17.1% of the activity and an increase of 38.3% compared to year-
Gross Profit from the information technology business rose 49.2%, totaling S/. 26.4 MM (US$. 9.4 MM).
end closing 2009. Gross Profit for 2010 is due to Gross Profit from the construction business, which amounted to S/. 215.0 MM (US$ 76.5 MM),
Gross Profit from the petroleum business totaling S/. 83.4 MM (US$ 29.7 MM), Gross Profit from the infrastructure business and highway opera-
• Operating Profit was S/. 414.6MM (US$ 147.6 MM) which represents an Operating Margin of 15.6% and an increase of 85.1% compared to
tion and maintenance amounting to S/. 88.5 (US$ 31.5 MM) and Gross Profit from the real estate business amounting to S/. 30.9 MM (US$ 11.0
the year 2009. The increase in Operating Profit compared to the preceding year is mainly due to profit on the sale of the Larcomar Entertainment
MM). The other lines of business accounted for the remaining balance of Gross Profit.
Center, as well as payment for the investment of CLHB from the Bolivian government. Additionally, general expenses amounted to 4.4% of the
activity, which is a lower percentage that that of the year 2009.
91
• Net financial expenses totaled S/. 19.0 MM (US$ 6.8 MM), which represents a decrease of 54.6% compared to the figure at the end of the
• Cumulative EBITDA(1) at the end of the year 2010 amounted to S/. 548.5 MM (US$ 195.2 MM), which represents 20.6% of the activity and an
year 2009, due to reduction of the financial debt and lower rates obtained in the financial system. As of the 2009 year-end closing, coverage of
increase of 66.3% compared to the preceding year. This growth is due to greater Operating Profit, as explained before, and higher depreciation
financial expenses was 28.9x.
and amortization of investments as of the end of the year 2010.
• The cumulative effect of devaluation at the end of 2010 represents income of S/. 8.2 MM, compared to S/. 19.9 MM for 2009. Slight apprecia-
UAIPIDA por negocio
tion of the nuevo sol in relation with 2009 produced an exchange gain due to the lower value of liabilities in foreign currency.
• Available Income amounted to S/. 273.5 MM (US$ 97.4 MM), which represents an increase of 103.5%. Greater Available Earnings are the result
of higher Operating Profit which, as explained previously, includes the sale of the Larcomar Entertainment Center, payment of the investment in
CLHB in Bolivia, lower financial expenses, and the positive effect of the currency exchange difference.
Construction
Real Estate
Highway Infrast/
Oper and Maint
Petroleum Services
Information
Technology
Engineering
Holding
36.77%
4.87%
17.17%
21.77%
4.27%
2.16%
12.98%
Stable long-term flows from the highway infrastructure operation and maintenance business, the petroleum service business and the outsourc-
ing business accounted for 56.2% of EBITDA(1), resulting in 2.07x coverage of the Group’s total financial expenses plus general expenses not
specifically related to these lines of business. Additionally, it is assumed that these will not decrease in the event of a total losss of activity.
93
Balance Sheet
Backlog and Perspectives
• Financial leverage decreased from 0.42x to 0.33x, while total leverage decreased from 1.59x to1.44x. The cash levels generated by the end of
• The Group’s Backlog increaed 46.8% compared to the year 2009, amounting to S/. 5,289.7 MM (US$ 1,883.1 MM), which represents 1.97x the
the year 2009 and during 2010 have made it possible to reduce financial debt during 2010, including prepayment of the Asset-Backed Securities
activity over the last 12 months. Of this Backlog, S/. 2,731.1 (US$ 972.2 MM) will be executed during the 2011 fiscal year, S/. 1,316.7 MM (US$
that would have matured in 2011, due to which the leverage ratios have improved compared to the year 2009. The net cash flow deficit is not
468.7 MM) in 2012 and the balance from 2013 on. Once again, the highest level of Backlog has been obtained, after surpassing the previous
considered in the calculation of these ratios, but rather the gross debt.
record in September 2010.
• Current liquidity at the end of the year 2010 was 1.45x. It was higher than at the end of 2009 as a result of higher cash levels, an increase in
inventories and lower short-term liabilities.
Backlog (In millions of US$ Dollars)
• Financial debt / EBITDA(1) amounted to 0.32x at the end of 2010. The increase in EBITDA combined with a reduction in financial debt resulted
in a 0.19x improvement in this indicator compared to the preceding year.
• The average Return on Equity at year-end closing for 2010 was 27.7% while the Return on Assets was 11.4%. The Return on Equity is higher
than that obtained by the year-end closing for 2009 as a result of the increase in Available Earnings at the end of 2010. There was a similar effect
on the Return on Assets compared to that obtained in the preceding year.
1,883
1,281
720
830
2007
2008
2009
2010
• The group’s capital investments totalled S/. 287.6 MM (US$ 102.4 MM) during the year 2010. Of the total investments, S/. 25.2 MM (US$ 8.9
MM) correspond to investments in the infrastructure structure, S/. 36.9 (US$. 13.1) in the hydrocarbons sector and S/. 62.8 (US$ 22.4) in the
mining sector. Additionally, S/. 90.8 (US$. 32.3) corresponds to investments in the replacement of equipment for the Group’s different lines of
business, and lands for the real estate business for S/. 118.9 (US$ 42.3). This capital investment total includes divestitures due to the sale of
the Larcomar Entertainment Center and the sale of equipment and other assets for S/. 63.2 (US$ 22.5)
95