More annual reports from Grana y Montero S.A.A.:
2017 ReportTransforming Knowledge into Growth Annual Report Transforming Knowledge into Growth Annual Report Responsibility Statement “This document contains true and sufficient information on the operations of Graña y Montero S.A.A. during the year 2011. Notwithstanding the issuer’s responsibility, the undersigned assume responsibility for its content in compliance with applicable legal provisions”. Mario Alvarado Pflucker Chief Executive Officer Gonzalo Rosado Solís Corporate Controller Lima, January 27, 2012 4 5 Índice Key Figures Letter from the Chairman Creciendo Estratégicamente Diversification Internacional Development 6 9 14 16 Creciendo en Sofisticación Engineering and Construction Infrastructure Services Real Estate Creciendo en Calidad Social Responsability Corporate Governance Board of Directors Historical Summary 20 24 26 30 34 50 51 64 Grupo Graña y Montero Key Figures 7 EBITDA by Company 2011 / in Thousands of S/. Activity by Sector 2011/ in Thousands of S/. GMH GMv Concesiones otros Tecno logía Constant values as of December 2011 / in Thousands of S/. Constant values as of December 2011 2008 2009 2010 2011 Growth 2010 - 2011 Activity Billing Gross Profit Profit Before Taxes Net profit EBITDA S/. S/. S/. US$ S/. US$ S/. 1,887,723 2,183,233 2,660,398 947,098 4,242,801 1,573,156 59.48% 1,827,710 2,001,475 2,502,675 890,949 4,241,266 1,572,587 69.47% 399,490 232,985 147,189 329,551 227,549 134,401 372,696 339,397 444,830 401,028 252,802 536,409 2,816 158,359 631,749 234,241 42.02% 142,765 477,645 177,102 19.11% 89,997 289,075 107,184 14.35% 190,961 663,950 246,181 23.78% 4,810 70.81% US$ 66.10% 76.51% 47.92% 24.05% 19.10% 28.92% 70.81% Professionals 1,947 2,143 Concar GMD GyM GMI GMP GMD Concar CAM SPA Concessions GMV GMH TOTAL GyM Edificaciones e Industria Minería GMP GMI Infraestructura Energy and Petroleum 1,654,692 290,571 19,296 138,756 31,567 53,570 36,431 38,518 37,513 -4,763 663,950 43,76% 2,91% Infrastructure 20,90% Mining Building and Industry Technology Other TOTAL 4,75% 8,07% 5,49% 5,80% 5,65% -0,72% 100% Energía y Petróleo 39,00% 18,80% 19,50% 16,30% 2,60% 3,80% 797,647 827,346 691,577 110,313 161,226 4,242,801 100,00% Net Income / in Thousands of S/. Backlog / in Millions of US$ Dollars S/. 289,075 S/. 252,802 US$ 1,883 US$ 3,075 S/. 147,189 S/. 134,401 US$ 1,281 US$ 830 2008 2009 2010 2011 2008 2009 2010 2011 Letter from the Chairman Letter to the Shareholders Dear Shareholders: It is our pleasure to present the Annual Report for the year 2011, which once more reflects the best results in our 78 year long history. We have achieved revenues of 1,570 million dollars in 2011, which represents a 77% growth compared to the previous year. Of this increase, 36% is the result of the incorporation of two companies at the beginning of the year and 41% is due to organic growth of the Group. At the same time, very good economic and financial indicators were achieved, generating EBITDA of 245 million dollars and, for the first time, net profits of over 100 million dollars. These results were attained in an electoral year in Peru during which President Ollanta Humala was elected. Marking a significant change of political direction, he has guaranteed the continuance of the macroeconomic policies that have enabled Peru to become one of the countries with the greatest growth in the last 10 years. This situation, in addition to the Group’s prestige and leadership, are reflected in obtaining new contracts for 2,766 million dollars that enabled us to end the year with a record backlog of 3,075 million dollars; that is, 63% more higher than in the previous year. However, the most significant achievement of the year was surely the fact that the investment program totaled 183 million dollars and included the 5 new companies in the Group. The incorporation of two new acquisitions, GSD specializing in the digitization of documents and CAM specializing in services for the electricity sector, in addition to the incorporation of three new companies, Stracon GyM for mining services, La Chira S.A. for the La Chira Waste Water Treatment Plant concession, and Ferrovías GyM for railway operations that will begin with the new operating contract for the Lima Metro. JoSé G R AñA M I Ró qU E S A D A y M A R Io A LvA R A Do P F L U C K E R LETTER FRoM THE CHAIRMAN 10 11 Additionally, the incorporation of CAM will be a fundamental contribution to the consolidation of our regional During these years, the Group has continued with its process to improve the working climate. In 2011, 72% development strategy because, apart from the human and technical capacities it contributes, it operates in of the more than 9,500 employees confirmed that it is a great place to work. GMI and Viva GyM stood out, as Chile, Colombia and Brazil, in addition to Peru. This, together with the projects in the Dominican Republic, they have been included among the 45 best places to work in the country according to the Great Place to Work Chile and Panama, has led to foreign sales of over 270 million dollars for 2011. Institute. A high level of growth and increased international operations have made us one of the leading engineering Given the importance of our social responsibility programs within our “Growing and Sharing” strategy, this service companies in Latin America, bringing us closer to achieving our goal of being the most reliable year we have decided to issue our first Sustainability Report according to the Global Report Initiative (GRI) engineering services company in Latin America. methodology, maintaining our philosophy that social responsibility programs are more efficient and long- lasting when they are aligned with the operations and enhanced by the use of the synergies of their own During the year, these events and large-scale perspectives have led us to define an organization of the Group resources. in four major business areas: Engineering and Construction; the traditional business area, which is working on 4 hydroelectric projects most importantly, our clear competitive advantages due to the talent we have in our group, we expect the and major mining projects such as Las Bambas and Antapaccay in Peru and Pueblo Viejo in the Dominican growth we have attained to continue in the coming years. Based on the record backlog we now have, as well as our financial soundness for undertaking projects and, Republic, among others. Lastly, we would especially like to thank our clients and employees who have enabled us to achieve this level Infrastructure; which operates highway concessions and has recently assumed responsibility for the of success. operation of Line One of the Lima Metro and the La Chira Waste Water Treatment Plant. Services; the area which includes GMP’s petroleum services, GMD’s information technology services, Concar’s highway maintenance and operation of public services and, now, Cam-GyM’s services provided to the electricity sector. Real Estate; which develops projects such as Viva GyM with over 20,000 housing units and other commercial projects, including the one to be executed on the recently acquired land at the former site of the San Martín military base. We have been able to meet every challenge with regard to growth as well as sophistication, based on the foundations of having invested on talent management over the years. Concurrently with the execution of these projects, our “Learn to Grow” strategy has enabled us to generate very valuable knowledge, which we have been able to systematize and disseminate through the Corporate Learning Center and the Portals of Knowledge. The last 5 years have also been a period of growth and achievement for our employees, as individuals and as professionals. Today we are a group of 3,082 highly qualified engineers within a family of 25,263 Graña y Montero employees who, acting according to the same set of values and culture, deserve the credit for our well-deserved prestige. José Graña Miró quesada Chairman Mario Alvarado Pflucker Chief Executive Officer (*) Exchange rate 2010 S/. 2.809 – 2011 S/. 2.697 soles per United States dollar. Creciendo Estratégicamente Strategic Development Diversification Engineering and Construction Infrastructure Services Real Estate 15 This year, two new companies acquired the previous year have joined the group: GSD, which specializes in the digitization of documents, and CAM, which specializes in services for the electricity sector. Also during the year, our minority interest in the IIRSA North and IIRSA South concessions was sold. Additionally, 3 new companies have been incorporated: Stracon GyM, specializing in mining contracts for earth moving; Ferrovías GyM for the operation of the Lima Metro; and Consorcio La Chira for the La Chira Waste Water Treatment Plant concession. These decisions are aligned with our diversification strategy, always in our specialty of engineering services, and now we are developing more steadily in other Latin American countries. Today, what was a construction company has become a group of 23 companies grouped in 4 operating areas: Engineering and Construction Infrastructure GyM / The original construction company that has three divisions: Electromechanics, Civil Works and Buildings. Norvial / The company that has the concession for Road Network 5, which is the road north of Lima from Ancón to Pativilca. Stracon GyM / The GyM subsidiary specializing in mining services. Survial / The company that has the concession for Phase 1 of the Interoceanic Highway that connects Nazca and Cuzco. GMI / The engineering consulting firm that has two divisions: Canchaque / The company that has the concession for the Supervision & Engineering and Geomatics. Ecotec / Subsidiary of GMI specializing in environmental engineering. highway from the Buenos Aires detour to Canchaque. Consorcio La Chira / The consortium with the Spanish company, Acciona Agua, that has the concession for the La Chira Waste Water Treatment Plant. Ferrovías GyM / The company that has the concession for Line One of the Lima Metro. Services Real Estate GMP / The petroleum services company that has two divisions: Viva GyM / The real estate development company formerly Drilling, Petroleum Production and Gas Fractionation. known as GMV. Consorcio Terminales / The GMP and Oiltanking of Germany Almonte / Subsidiary of Viva GyM and the owner of a 1000 Ha consortium that operates fuel terminals. lot south of Lima. GMD / The information technology services company that has Consorcio GMV-Urbi / Consortium formed to develop a real two divisions: Technology Solutions and Business Solutions. estate project on the land at the former site of the San Martín GSD / Subsidiary of GMD specializing in the digitization of military base. documents. GMV-B / The company formed to execute the Parque Central Concar / The company specializing in the maintenance and Club Residencial real estate project. operation of infrastructure concessions. Cam GyM / The company specializing in engineering services for the electricity sector that comprises 4 companies: Cam Chile, Cam Colombia, Cam Perú and Cam Brasil. Strategic Development International Development Early in the year 2011, a fundamental step was taken in our internationalization process with the incorporation of CAM, a company headquartered in Chile, with operations in Colombia, Peru and Brazil. This will enable us to expand and contribute to the permanence of our development abroad. With these operations, the group will be operating in 6 Latin American countries in addition to Peru, through its subsidiaries. GyM / During the year, GyM was the main contractor on the Pueblo GMD / Provides SAP technological support services for the Viejo mining project in the Dominican Republic, where more than EBEL group’s international operations and help desk services 500 Peruvian technicians and engineers were working. Recently, for Barrick, Unique and CAM at the regional level. in a joint venture with the Canadian company SNC Lavalin, the management of the Pataquillas mining project in Panama was Cam GyM / which specializes in services for the electricity awarded and it is building the Maitencillo – Caserones electrical sector, reports revenues of 207 million dollars annually in Chile, power transmission line for Transelec, Chile’s main electric Peru, Colombia and Brazil. power transmission company. GMI / Completed the supervision of the construction of the new mineral extraction and transportation services for the Punta de Meliá hotel in Playa del Carmen in Mexico. Lobos salt mine in Chile. Stracon GyM / which specializes in mining services, provides P RoyE C T o M I N E Ro PU E B L o v I E Jo, RE PúB L I CA D oM I N I CA N A. Creciendo en Sofisticación organization Engineering and Construction The traditional Engineering and Construction business area had spectacular growth of over 58% and was reinforced with the incorporation of Stracon GyM, a company specializing in mining contracts for earth moving. Stracon GyM / was formed by the Mining Services Division and In line with the group’s international growth objectives, in 2011 the Australian company, Stracon. It began its operations in January work on 2 important contracts began in Chile. These contracts 2012. It was incorporated as a contribution of specialized mining are for a 220 Km electric power transmission line for Transelec equipment valued at 150 million dollars and a backlog of signed and mining services for 4 years for the Punta de Lobos mine in contracts totaling 300 million dollars, including a contract on Iquique. operations in northern Chile with Minera Punta de Lobos. GyM / had growth of more than 59% in 2011, setting a new record of completion of Lima’s tallest building, Hotel Westin Libertador, as 989 million dollars in sales, with after tax income of 58 million dollars. well as the Gran Teatro Nacional (national theater) and the Parques Important projects in the building construction area include the del Agustino shopping center in the housing development where More importantly, as of December 2011, the company had a 1,812 we had built over 3,000 housing units in prior years. million dollar backlog, which guarantees the company’s growth in the coming years. All of these achievements are underpinned by our values of reliability, quality and efficiency that have earned our company In the mining sector, the work for Barrick at the Pueblo Viejo mine considerable prestige in the country over the years. in the Dominican Republic was completed and the business relationship with Bechtel continues for the Antapaccay project, as Our intense work with the communities surrounding our projects well as the construction of the Nueva Fuerabamba city for Xstrata is also worth noting, as it creates mutual trust that allows us to Copper’s Las Bambas project. undertake significant challenges and face the future with greater confidence and optimism. In the energy sector, we are continuing with the construction of the Huanza Hydroelectric Power Plant (91 MW) and the expansion of Such significant growth would not have been possible without the the Machu Picchu Hydroelectric Power Plant (98 MW), and this GyM team, which is composed of more than 2,500 employees, of last December we began work on the Santa Teresa (90 MW) and whom 1,383 are engineers. In addition, thousands of technicians, Cerro del Águila (512 MW) hydroelectric plants for Luz del Sur laborers and subcontractors support us in the significant and Kallpa respectively. In the oil and gas sector, in the month of challenges we undertake in different parts of the country and April 2012 we will begin the construction of a 300 km gas pipeline abroad. from Pisco to Ica for Contugas. WE S T I N LI M A H o T E L & C oNvE N T IoN CE N T E R ENGINEERING AND CoNSTRUCTIoN 22 GMI / had a good year as well, with growth of 34% compared In our international operations, the supervision of the Hotel to the year 2010, 45 million dollars in revenue and EBITDA of 7 Paradisus Playa del Carmen in Mexico for the Sol Meliá hotel million dollars. chain was completed successfully. This year, GMI entered into a framework mining contract with In the year 2011, OSHAS 18000 certification was obtained, Sociedad Minera Cerro Verde and renewed its framework completing the Integrated Management System (Triple-standard contracts with Cía. Minera Antamina and Minera Yanacocha System, ISO 9001, ISO 14001, ISO 18000); the first Book of SRL. In the latter months of the year, an engineering contract was Knowledge was presented and the second volume will be signed for Tailings Management and Fresh Water Design for the presented soon; and a Great Place to Work award was received new Cerro Verde Concentration Plant. for placing among the 45 best places to work in Peru. In the oil and gas sector, we are continuing with the framework At GMI, we are aware of our employees’ role and the use of contracts we have with Coga, the La Pampilla Refinery and technology in the execution of our services. For this reason, Pluspetrol. We have signed a contract with Consorcio Terminales, 23,262 hours of training were provided this year. In addition, 8,400 a consortium composed of Oil Tanking and GMP, to manage the hours of research and application of the use of technologies have construction of storage terminals in Cusco and Mollendo. enabled us to work in 3D, incorporating content management in our engineering designs to ensure a better product. This year, the Water Division was created. It is working on the Engineering of the Expansion and Improvement of the Potable The year 2011 was also a year in which GMI continued Water and Sewer System Project in the Pachacutec neighborhood consolidating knowledge management and developing a culture in Lima’s Ventanilla district. of innovation, continuous improvement and generation of value for our clients among our employees and more than 350 engineers. C E N T R A L H I D RoE LéC T R I C A D E M A C H U P I C C H U organization Infrastructure The Infrastructure area, which comprises 3 highway concessionaire companies, became involved in railways and water treatment during the year, as concessions were obtained for the Lima Metro and the La Chira Treatment Plant. In February of 2011, the La Chira concessionaire formed with the The total volume of activity for the Infrastructure area was 43 million Spanish company, Acciona Agua, signed a 30-year contract on the dollars, generating EBITDA of 14 million dollars and closing with Design, Financing, Construction and Operation of the La Chira a backlog of approximately 292 million dollars for the next 3 years. Waste Water Treatment Plant located south of Lima. Currently, work is being done on the design and financing; construction In addition, the selection, analysis and evaluation of more than work is expected to begin in the latter part of 2012. 20 new projects continued, concentrating on the transportation, electricity generation, health, water and sewage sectors. For Lima In April 2011, Ferrovías GyM, a company formed with Ferrovías City Hall, an initiative was presented for the continuation of the Paseo de Argentina, signed a contract on the Operation of Line One of de la República Expressway and formal negotiations began on the the Lima Metro. In order to prepare to assume management and Javier Prado - La Marina - Faucett Expressway contract, a project operation responsibilities, a team of 400 people was structured which has been pending for several years. and consolidated, enabling the company to begin operations in the month of December. In addition, the acquisition of new trains With the operation of the Lima Metro, the La Chira Plant and the has been coordinated with the French company, Alstom. The new projects being negotiated, the Infrastructure area will fulfill its trains should begin arriving toward the end of 2012. objective of producing the stable long-term flows proposed by the Group. The highway concession companies continue consolidating the operation of over 1,000 km of highways. Norvial is in charge of the road from Ancón to Pativilca, Survial has the concession from Marcona to Cusco and the concession from the Buenos Aires detour to Canchaque. C oN S T R U C C IóN D E L TR E N ELéC T R I Co D E LI M A organization Services The Services area, which included GMD, GMP and Concar, was enhanced this year with the acquisition of Cam and GSD. CAM / is a company we acquired from the Spanish Endesa GMD / managed to consolidate its leadership position in the group that specializes in providing engineering services to provision of outsourcing solutions for the corporate market in companies in the electricity sector. This company fits well with the year 2011 by increasing its activity in all of its outsourcing the group’s strategy of growth in engineering services, as it business areas: infrastructure (ITO), business processes (BPO), contributes 400 specialized engineers and reports revenues of service desk and application (AO). 207 million dollars annually. In addition, it will be a fundamental element of our regional development plan, as it has operations in The company’s total activity for the year amounted to 69 million Chile, Colombia, Brazil and Peru. dollars, which represents growth of 36% compared to the year GMP / surpassed the US$ 100 million mark in revenues for the and EBITDA totaled12 million dollars, representing growth first time, and EBITDA and net income are the highest in the of approximately 50% and 40% respectively, compared to the 2010. Net income for the year amounted to 3.4 million dollars company’s 27-year history, making 2011 a record year for GMP. previous year. These results are due to improvement in the efficiency of our Pariñas Gas Plant, record petroleum production and the high The strategy of having businesses with stable flows has enabled price of crude during the year. GMD to consolidate its position and lay the foundations for solid During 2011, GMP had important technical achievements. Two processes, IT infrastructure, help desk services and applications exploratory wells were drilled in Block I in search of the Paleozoic totaled 49 million dollars, which is 73% of the total activity and and certain growth. The outsourcing revenues from business formation at a depth of over 9,000 feet. Triple certification was growth of 58%. expanded in Consorcio Terminales from 1 to 9 terminals and the technical standard of quality was certified by Indecopi for the The solid results achieved in the year 2011 have made it possible commercialization of saturated acyclic hydrocarbon produced by to invest 5 million dollars in assets for new business process and the liquid separation and fractionation plant. IT infrastructure outsourcing projects obtained during the year. In line with the knowledge management promoted by the group, compared to the year 2010, totaling 88 million dollars. GMP has invested in 27,444 hours of training for its personnel, which is an average of 68 hours per person, and has obtained a Undoubtedly, the main reasons that allowed GMD to obtain good 76% level of satisfaction among its employees in the annual Great results are teamwork among its employees and the systemization As a result of these investments, the backlog increased 30% Place to Work survey. of its processes, which made it possible to fulfill its commitments, improve client satisfaction and, therefore, increase the company’s activity and profitability. TE R M I N A L D E PE T RóL Eo E N M oL L E N Do SERvICES 28 The company’s human resource management is geared toward Early in the year, Graña y Montero, together with Ferrovías, improving the working climate and developing managerial skills was awarded the concession for Line One of the Lima Metro. in middle management, as well as building trust and cooperation Since the month of August, responsibility for the operation and between support areas and projects, with regard to both maintenance of the line has been assumed by CONCAR. commercial and execution processes. Part of this plan consisted of launching the Middle Management Training Program and Another important event during the year was Graña y Montero’s creating communities to exchange experiences and information, sale of its interest in the North and South IIRSA highways. fostering the cultural change necessary to support the knowledge Therefore, Concar no longer executes the operation and management strategy in this manner. maintenance of the North IIRSA Highway. Early in the year, GSD, a company we acquired from Telefónica, Toward the end of the year 2011, Concar decided to begin a phase was incorporated in the group. of specialization in the manufacture of raw materials required for It will be an important reinforcement for the Business Processes the contracts, installing an asphalt emulsion plant, which is easy area. to transport from one location to another, to supply the projects. GSD / is a digital services company specializing in the digitization During the year 2011, Concar was in charge of the maintenance and processing of documents for the financial and consumer of 10 highways, the total length of which is 3,400 km, giving the product sectors. company clear leadership and reasons to be optimistic about the coming years. This company has been incorporated as a subsidiary of GMD. In its first year of operations, its activity has increased 60% and it now has 160 employees. CONCAR / had revenues of over 86 million dollars. This growth was due to the execution of contracts obtained during the previous year. organization Real Estate Viva GyM / is the new name of GMV, the company comprising Other projects that merit special mention are the opening of the all of the group’s real estate companies, which has specialized in Parque Agustino shopping center in the month of December, with the development of social housing projects in recent years. 7 movie theaters and 20,000 m2 of commercial area as part of the 3,600-apartment Parques del Agustino social housing project. This Currently, it is developing projects that will entail the construction complex, the first of its kind in Peru, is in line with our concept of of 21,000 apartments over the next 5 years. Recently, it has offering better housing and an improved standard of living. acquired a controlling interest in Inmobiliaria Almonte S.A., the owner of an undeveloped 1,000 Ha piece of land south of Lima, During the year, the renowned French architect, Jean Nouvel where 30,000 more housing units could be built. (Pritzker Award winner in 2008), was hired to design a world-class During the year, the following housing projects were under military base in Miraflores, which we acquired during the previous construction: year. project for combined use on the site of the former San Martín Los Parques de Carabayllo Los Parques de Villa El Salvador Los Parques de Garezon Our Los Parques de Carabayllo project won 1st place in the Mi Vivienda (My Home) category in the “IX Concurso Nacional de Calidad Arquitectónica CAP 2010 – Premio Celima” architectural Parque Central, Club Residencial quality contest, and our Social Accompaniment Program was Neo 10 Cipreses selected as a finalist in two categories of the Concurso Creatividad Empresarial 2011 (2011 Business Creativity Contest). During the year, the company had activity totaling 55 million In addition, Viva GyM ranked 9th on the Great Place to Work dollars, generating net income of 9 million dollars for the area, Institute’s list of “the Best Companies to work for in Peru” in the which has permitted investments in new lots amounting to 27 small company category. million dollars, including the purchase of a 129,000 m2 piece of land in Piura, a 75,000 m2 lot in Villa El Salvador, a 23,000 m2 lot The leadership attained by this great team and the enormous in San Martín de Porres and another one on Pezet Avenue, across demand for social housing in our country enable us to view real from the San Isidro Golf Club. estate prospects for the coming years with great optimism. CoN J U N T o H A B I TA C IoN A L PA RqU E S D E EL A G U S T I No Creciendo en Calidad Social Responsibility Good corporate governance practices with regard to its shareholders, in addition to talent management geared toward employees’ professional and personal development, create an atmosphere of trust and commitment, which is vital in order to continue taking on the challenges entailed by the growth of the group. We continue to enhance our professional talent management in The “Espacio Azul” civil association, a Graña y Montero line with our “Learn in order to Grow” strategy, in the certainty non-profit entity, continued fostering the group’s corporate that our employees’ knowledge, capacity and enterprising social responsibility activities, particularly Graña y Montero attitude are our greatest competitive advantage. Volunteering, as a statement that CSR is everyone’s commitment. This positive experience is what we project to society within our These social responsibility actions and initiatives, as well as “Growing and Sharing” social responsibility strategy, establishing others mentioned in the following paragraphs, are included in our education and knowledge as the basis for development and annual report for the United Nations Global Compact. Starting social welfare. this year, they will be included in the Graña y Montero group’s first GRI Sustainability Report. During the year 2011, we continued our well-known “Developing Job Skills in the Area of Influence” program. In addition, we held We continue to be committed to socially responsible corporate the second annual edition of the Graña y Montero Award for management that ensures the growth and sustainability of our Peruvian Engineering Research and launched a new category business to the benefit of our 25,263 employees, their families in this contest, in order to recognize the best research or thesis and society. by a recent engineering graduate. We also continued the degree candidate program geared toward providing opportunities to obtain an academic degree based on applied research work. The Engineering Portal completed its first year of existence, providing virtual as well as physical spaces for sharing knowledge, with over 17,000 registered members. Social Responsibility Human Resource Management The group’s considerable economic growth has entailed a large opportunities for employees’ personal and professional growth. increase in the total number of employees, who now number For this purpose, they have had specialized support from the 25,263; that is, an increase of approximately 58% compared to Corporate Learning Center on the design and development of December 31, 2010. The number of engineers and professionals systems and programs aimed at developing the professional rose 71%, totaling 4,810, with 2,992 engineers with different areas competences and leadership styles required of our employees in of specialization. the short and long term. The incorporation of the international operations of Cam GyM and In addition, a mid-year internal corporate communication GSD has been a challenging and enriching experience in which campaign was held with the slogan “With your talent, anything different cultures have been integrated for the achievement of is possible”, emphasizing the talent, effort, creativity and new common goals. Similarly, engaging in new lines of business, commitment of the engineers, professionals and technicians such as the operation of Line One of the Lima Metro, has led to who execute our projects, and highlighting the importance of human resource management in line with the need to have a team that emotional connection with their effort, contribution and of employees that meets our clients’ new service needs. achievement. For this reason, the local and international human resource For the fourth year in a row, the Graña y Montero Group has management teams have redoubled their efforts to respond continued its process of improving the working climate. In 2011, to the need to form and develop teams committed to all of the 72% of its more than 9,500 employees confirmed that it is a great new challenges related to growth, dealing with rising standards place to work, particularly Viva GyM and GMI, which ranked of competitiveness and specialization, and developing greater among the country’s 45 best places to work. HUMAN RESoURCE MANAGEMENT 38 39 Educational Statistics Age Distribution N° People as of 12.31.11 GyM viva GyM GMv GMD GMP GMI CoNCAR CAM REG. Total N° Employees as of 12.31.11 GyM GyM viva GyM GMD GMP GMI CoNCAR CAM REG. Total Employees on Subsidiaries’ Payroll Under 20 0 2 0 0 0 1 162 18 183 Engineers / Architects with graduate degrees Other Professions with graduate degrees 21 24 58 12 10 4 7 0 Engineering / Architecture Professionals 9 1,325 16 508 Other Professions 24 639 25 278 21 2 86 37 9 3 20 2 45 43 191 90 From 31 to 40 From 20 to 30 16 1,240 365 180 312 2,801 From 41 to 50 84 186 455 1,728 From 51 to 60 Total Professionals 78 2,034 55 793 146 461 388 855 4,810 From 61 to 65 Technicians 9 535 29 477 242 392 2,193 954 4,831 66 and over 26 31 11 3 0 776 328 171 39 13 32 31 19 2 0 0 569 64 333 1,005 665 3,924 518 100 302 792 689 3,234 142 84 119 405 299 1,427 39 102 1 1 30 8 72 13 13 186 126 709 28 3 12 126 0 38 Total Employees on Subsidiaries’ Payrolls 87 2, 569 84 1270 388 853 2,581 1,809 9,641 Total 87 2,569 84 1,270 388 853 2,581 1,809 9,641 Laborers Skilled Laborers Unskilled Laborers Subcontractors’ Laborers 0 0 0 6,541 4,673 4,350 Total 0 15,564 0 0 0 0 0 0 0 0 0 0 0 0 0 58 0 58 0 0 0 0 0 6,541 0 0 0 4,731 4,350 15,622 Total Personnel 87 18,133 84 1,270 388 911 2,581 1,809 25,263 Interns Independent Professionals Total 0 4 4 84 5 89 4 0 4 41 5 46 3 2 5 12 14 26 0 0 0 54 198 0 30 54 228 Grand Total 91 18,222 88 1,316 393 937 2,581 1,863 25,491 HUMAN RESoURCE MANAGEMENT 40 41 Population Statistics Employment Status Statistics 2010-2011 N° People as of 12.31.11 GyM viva GyM GMv GMD GMP GMI CoNCAR CAM REG. Total Organization Headquarters 87 516 60 218 70 428 53 550 1,982 l f o s a e p o e P ° N 1 1 . 2 1 . 1 3 0 1 . 2 1 . 1 3 . A A S M y G . . 1 1 . 2 1 . 1 3 . A A S M y G . . 0 1 . 2 1 . 1 3 v M G a v v i 1 1 . 2 1 . 1 3 v M G a v v i 0 1 . 2 1 . 1 3 M y G 1 1 . 2 1 . 1 3 M y G 0 1 . 2 1 . 1 3 D M G 1 1 . 2 1 . 1 3 D M G 0 1 . 2 1 . 1 3 P M G 1 1 . 2 1 . 1 3 P M G 0 1 . 2 1 . 1 3 I M G 1 1 . 2 1 . 1 3 I M G 0 1 - 2 1 - 1 3 R A C N o C 1 1 . 2 1 . 1 3 R A C N o C 0 1 . 2 1 . 1 3 G E R M A C 1 1 . 2 1 . 1 3 - G E R M A C 0 1 . 2 1 . 1 3 f o s a l a t o T 1 1 . 2 1 . 1 3 f o s a l a t o T Projects Total Gender Male Female Total Hierarchy Senior Management Employees Interns Independent Professionals Laborers Total 0 2,053 24 1,052 318 425 2,528 1,259 7,659 Type of Employment Contract 87 2,569 84 1,270 388 853 2,581 1,809 9,641 60 27 87 35 52 0 4 0 2,053 516 37 47 919 350 708 2,217 1,397 7,741 351 38 145 364 412 1,900 2,569 84 1,270 388 853 2,581 1,809 9,641 7 0 3 4 7 13 46 15 2,562 84 1,267 384 846 2,568 1,763 9,526 84 5 15,564 4 0 0 41 5 0 3 2 0 12 14 58 0 0 0 54 198 0 30 0 15,622 91 18,222 88 1,316 393 937 2,581 1,863 25,491 Employees With Permanent Employee Status With Temporary Employee Status Total Employees Laborers 67 82 433 611 26 33 288 338 237 252 92 96 70 93 673 866 1,886 2,371 0 5 1,185 1,958 45 51 749 932 159 136 504 757 1,891 2,488 612 943 5,145 7,270 67 87 1,618 2,569 71 84 1,037 1,270 396 388 596 853 1,961 2,581 1,285 1,809 7,031 9,641 Regular Employment System With Permanent Employee Status With Temporary Employee Status Special Civil Construction Status (Temporary Status) Total Laborers Total Employees and Laborers 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1,158 1,344 0 0 0 0 0 0 57 58 0 0 0 7,468 9,870 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1,215 1,402 0 7,468 9,870 0 0 8,626 11,214 0 0 0 0 0 0 57 58 0 0 0 0 8,683 11,272 67 87 10,244 13,783 71 84 1,037 1,270 396 388 653 911 1,961 2,581 1,285 1,809 15,714 20,913 Social Responsibility Risk Prevention and Environment At Graña y Montero, the consolidation of an integrated risk In the application of BBS over the past three years in the Poracota prevention and environmental management system has entailed and Orcopampa pilot projects, behavior indicators at Poracota the development of a culture of prevention supported on a show improvement from 89% to 96% as an indicator of safe daily basis by specialized internal training, adequate tools and performance of work. At Orcopampa, the indicators increased equipment, and, fundamentally, continuous emphasis on safe from 93% to 96%. conduct in our operations. Our performance indicators clearly show that we are on the right During the year 2011, we have continued with the introduction and path. In recent years, all of these actions have made it possible to development of BBS as a proactive methodology that enables us maintain our Frequency Index under 0.55 (OSHA). In the year 2011, to transform unsafe behaviors into safe behaviors, observe and we provided 1,149,903 hours of safety and environment training. identify critical behaviors, design safe behaviors and monitor the In this manner, the constant growth of our operations is accompanied safe performance of our employees’ work. by the group’s continuous commitment to its employees’ safety and its clients’ requirements. Social Responsibility Knowledge management 45 Training in the year 2011 In the year 2011, the group directed its efforts related to knowledge This strategic project based on the competence model takes on management and talent development toward all of Graña y the challenges expected from 2011 to 2016 and is based on an Montero’s professional employees. For this reason, the Corporate active manager – employee relationship and adequate training Learning Center team was reinforced and commissioned with the programs in every phase of an employee’s career path. development of a comprehensive program aimed at accelerating the growth of all employees, particularly professional employees, The year 2012 will be the year of the full deployment of the “Graña through both technical and managerial training fostered and y Montero Talent Development” project within the framework supported by supervisors and managers. of the “Learn in order to Grow” corporate strategy, and we will This led to the creation of the “Graña y Montero Talent Development” program that has had the valuable participation During the year 2011, over 255,000 man hours of training were of all of the general managers, as well as the managers of provided, almost 20% more than the number recorded for the Operations and Human Resources. Thanks to this contribution, previous year. continue improving the related management indicators. it has been possible to clearly establish the behaviors expected of an employee throughout his/her career, as well as the specific competences that enable one to adopt such behavior. This program is carried out within the framework of the corporate values and the Graña y Montero culture. Description GyM GMD GMI GMP Concar GMv Total Internal Training 57,347 26,290 13,580 5,395 37,113 1,403 141,128 Basic Program – Young Engineers 36,099 2,076 8,169 570 6,094 208 53,216 Collective Memory 1,580 0 1,061 754 0 217 3,612 Management Training 10,582 5,066 773 539 2,762 767 20,489 Technical Training 9,086 19,148 3,453 3,532 28,182 211 63,612 Competence Building 0 0 124 0 75 0 199 Internal Training 57,347 26,290 13,580 5,395 37,113 1,403 141,128 External Training 37,495 30,365 9682 22,049 12,648 4,997 117,236 Total Training 94,842 56,655 23,262 27,444 49,761 6,400 258,364 Monthly Average - Employees 2,136 1,189 765 405 2,071 84 6,650 Hours of Training / Employees 44.40 47.65 30.41 67.76 24.03 76.19 38.85 Risk Prevention - Environmental Management 1,149,903 0 23,411 8,266 21,378 77,454 1´280,372 Social Responsibility Community Relations Within the framework of the corporate “Growing and Sharing” the development of large-scale social housing programs and strategy, during the year 2011 a number of programs and their impact on the development of new urban communities, we social responsibility actions centered on our capacities and held an international training event aimed at promoting a new knowledge were executed, based on the expectations of the perspective of the rights and duties of owner residents of the new different communities to which we have ties over the course of “Los Parques de El Agustino” housing complex that is home to our operations. over 4,200 families. We are not only referring to communities in the area of projects Our regular “Developing Job Skills in the Area of Influence” being executed, but also other communities or stakeholders, program received international recognition from Fórum Empresa such as the academic and university community or the business in its publication, “La empresa como promotora del desarrollo community related to our economic sector. económico y social: casos exitosos en América Latina” (The In every case, we base our actions on the conviction that successful cases in Latin America), which was presented at knowledge is the main source of sustainable social welfare and the IDB’s 2011 Inter-American Conference on Corporate Social the driving force of a culture of progress and leadership. Responsibility held in the city of Asunción, Paraguay. company as a promoter of economic and social development: In relation with the engineering community, we not only These actions and others mentioned below have contributed to continue to promote research through the “Award for Peruvian the fact that the “Corporate Reputation – Socially Responsible Engineering Research” in two categories, energizing the virtual Company Index” calculated by Pontificia Universidad Católica del exchange of experiences and strengthening professional ties Perú’s CENTRUM and the “Arellano Marketing” consulting firm through the Engineering Portal. This year, together with Pontificia rank Graña y Montero in 8th place. It should be noted that the 7 Universidad Católica del Perú, we are promoting and sponsoring companies outranking us pertain to the consumer products sector. the “Conference of the International Group for Lean Construction” in Lima. The following table presents a summary of the main CSR actions executed in the different geographical areas where the different With Universidad del Pacífico, we also launched the “Practical companies in the Graña y Montero group operate. Guide for Project Management with Social Responsibility” in May 2011 as a contribution to the promotion of socially responsible corporate behavior. Considering our leadership in 47 Initiative Direct Beneficiary Target Group Location Developing Job Skills Program - Direct training (Projects). 2,631 beneficiaries with 128,023 man hours of training. Local residents in the area of influence of GyM projects. Lima, Ayacucho, Apurímac, Cajamarca, Cerro de Pasco, Cuzco. Developing Job Skills Program in the Area of Influence - Indirect training (Community). 408 beneficiaries with 11,539 man hours of training. Local residents in the area of influence of the projects de GyM. Apurímac, Arequipa, Cajamarca, Cerro de Pasco, Ica, Lima. Natural Disaster Preparedness (tsunamis, floods, earthquakes) and Environmental Accident Prevention (spills) Program. 869 beneficiaries with 2017 man hours of training. Parents of children from the communities located in the area of influence, as well as at schools. Companies in the group. La Libertad, Arequipa, Chimbote, Lima, Piura. Traffic and Civic Education Programs. Children and adolescents from the schools located in the areas near the highways operated by Concar under concession. Junín, Piura, Ayacucho, Cuzco, Lima, Ica, Tacna, Moquegua, Lambayeque, Piura, Tumbes. Social Accompaniment Program, in economical housing projects: training on the rights and duties of new residents for the purpose of fostering healthy coexistence and leadership. 4,153 beneficiaries with 8,015 man hours of training. Guided visits and talks on the project being executed - Socio-environmental impact. 983 beneficiaries with 2,528 man hours of training. Safety-related training: work at heights, use of safety equipment and evacuation. 1904 beneficiaries with 4,340 man hours of training. Residents of the social housing condominiums built by GMV. El Agustino, Cercado and Carabayllo in Lima. Local residents in the area of influence of the projects. Companies in the group. Arequipa, Chimbote, Cuzco, Ica, Ilo, La Libertad, Lima, Piura, Puno. Local residents in the area of influence of the group’s companies. Arequipa, Cuzco, Cerro de Pasco, Ilo, Ica, Apurímac, Piura. Training on management and environmental impact in operations areas. 1,781 beneficiaries with 2,288 man hours of training. Students, clients, relatives of employees and the community in general. Companies in the group. Lima, Cuzco, Cerro de Pasco, Junín Training related to personal development: self-esteem, family violence and leadership. 198 beneficiaries with 850 man hours of training. Educational talks on development and family protection: parent - child relationship. 3,000 beneficiaries with 6,000 man hours of training. Parents and women of the communities located in the area of influence of the projects. Companies in the group. Ica, Cuzco, Lima Local residents in the area of influence of the projects. Companies in the group. Lima, Arequipa. CoMMUNITy RELATIoNS 48 49 Iniciative Direct Beneficiary Target Group Location Iniciative Direct Beneficiary Target Group Location Establishment of dialogue with the community. 2,464 beneficiaries. Local residents in the area of influence of the projects. GyM. Arequipa, Ayacucho, Cuzco, Lima. Social welfare campaigns and improvement in housing units. 5,940 beneficiaries. Local residents in the area of influence of the projects. Companies in the group. Arequipa, Ica. Promotion and execution of engineering research: Engineering Portal, Announcement of the 3rd edition of the Graña y Montero Peruvian Engineering Award, Announcement of the First University Thesis Contest, Sponsorship or Lean Construction Conference. Health and nutrition programs, battle against AIDS, vaccination campaigns. 333 beneficiaries. Launch of the “Practical Guide for Project Management with Social Responsibility”. Academic and professional engineering community. Companies in the group. Participación a nivel nacional. Local residents in the area of influence of the projects. Companies in the group. Arequipa, Ayacucho, Cuzco, Lima. Academic and business community. GyM. Distribución a nivel nacional. Teacher training program to improve primary education. 4,265 beneficiaries with 21,080 man hours / training. Teachers at the schools near the area of influence of the projects. GMP. Ancash, Arequipa, Cuzco, Ica, Ilo, La Libertad, Lima, Piura, Puno. Vocational Orientation Program and Life Plan. 663 beneficiaries with 1,395 man hours of training. Young people and adolescents living in the area of influence of the projects. Companies in the group. Lima, Ica, Arequipa. Workshop on Artisan Production Projects and Empowerment. 208 beneficiaries with 2,494 man hours of training. Women from communities near the areas of influence of the projects. Companies in the group. Lima, Piura. Entrepreneurial Andean Women Program. Women of the communities near the areas of influence of the projects. GMI. Junín, Lima. Job Workshops: electrical installations, heavy equipment operation, conventional and decorative painting on concrete surfaces. 125 beneficiaries with 3,388 man hours of training. High school students at schools located in the area of influence of the projects. GyM Lima, Arequipa. Graña y Montero Volunteering Program: Christmas Solidarity, Cold Weather Campaign - Improved Kitchens, Improvement of Recreational Areas and creation of a plant nursery at Padre Iluminato School. 3,339 beneficiaries. Children of the communities near the areas of influence of the projects, high Andean communities with respiratory problems, rural community of Condorcocha, children of the Padre Iluminato shelter. Companies in the group. Lima, Ancash, Arequipa, Dominican Republic, Huancayo, Ayacucho, Piura, Abancay, Ica. Several philanthropic donations. 5,162 beneficiaries Firefighters of Peru, schools, National Police Force, several private and public entities. Companies in the group. Arequipa, Ayacucho, Ilo, Cuzco, Lima, Piura. Local acquisition and purchasing program. Local residents in the area of influence of the “Fuerabamba" project. GyM. Cuzco. Awareness-raising campaign on caring for the environment. 4,012 beneficiaries. Local residents in the area of influence of projects. Companies in the group. Arequipa, Apurímac. Lima, Cuzco, Ica, Piura. Improvement in neighborhood infrastructure: Reconstruction of irrigation channels and berms, Maintenance of borders of dumps, Conditioning of trees in plant nurseries, construction of gabions in affected areas. 22,361 beneficiaries. Local residents in the area of influence of the projects. Companies in the group. Apurímac, Arequipa, Piura, Cerro de Pasco, Lima. Solid Waste Management Program: Collection and disposal. 29,816 beneficiaries. Students, teachers and community near the area of influence of the project. Companies in the group. Apurímac, Arequipa, Piura, Ayacucho, Lima, Cuzco. Environmental Monitoring Programs: Water, Archaeological Remains, Noise, etc. 30,902 beneficiaries. Local residents in the area of influence of the projects. GyM. Arequipa, Ayacucho, Apurímac. 50 Social Responsibility Corporate Governance 51 Board of Directors In the month of March, Directors Augusto Baertl Montori and Teodoro E. Harmsen left the Board of Directors. They were replaced by Luís Miró Quesada Valega and Hugo Santa María Guzmán. José Graña Miró quesada Chairman / External Director Carlos Montero Graña Vice-Chairman / External Director Luis Miró quesada valega External Director José Chlimper Ackerman Independient External Director Mario Alvarado Pflucker Independient Internal Director / Chief Executive Officer Roberto Abusada Salah Independient External Director José Antonio Colomer Guiu Independient External Director Hernando Graña Acuña Independient Internal Director Hugo Santa María Guzmán Independient External Director The year 2011 has been a year of important progress regarding Work was also done on the redefinition of the Executive corporate governance. In March, José Graña, who was the Commission, which is understood to be composed of the general Chairman and First Executive of the Group, decided to retire from managers, executive presidents and corporate managers. his executive responsibilities. The Regulations of the Board of The Executive Commission has met on a monthly basis to discuss Directors were modified, differentiating the position of Chairman and work on matters of strategic importance to every company in of the Board of Directors, which will not involve executive the Group. responsibilities, and that of the Chief Executive Officer, which will be the group’s top executive position. José Graña continues In 2011, we modified our Internal Rules of Conduct, reinforcing as the Chairman of the Board of Directors and Mario Alvarado the rules on the handling of privileged information and raising the Pflucker is the Chief Executive Officer. standards required of our executives and employees with access to privileged information. Additionally, it was agreed to organize the structure of the group in 4 business areas (Engineering and Construction, Lastly, it should be noted that Graña y Montero has been included Services, Infrastructure and Real Estate), creating an Operating in the Lima Stock Exchange’s Good Corporate Governance Index Committee for each business area, the composition of which will since its creation and has actively participated in the Companies include at least one independent director. The primary objective Circle, a group composed of 19 Latin American companies with of the Operating Committees is to supervise the operations of the high standards of corporate governance that actively promote companies in the group, in order to enable the Graña y Montero and share their experiences with other Peruvian companies. S.A.A. Board of Directors to have better knowledge of the business and operations of the different companies composing the group. CoRPoRATE GovERNANCE 52 53 Profile of the Board of Directors Board of Directors Committees operating Committees of the Board of Directors José Graña Miró Quesada José Antonio Colomer Guiu Chairman of the Board of Directors. Architect. Additionally, he is Independent Director. Certificate in Corporate Management from the Chairman of the Board of Directors of subsidiaries GyM and IESE Business School, Universidad de Navarra. Certificate in Viva GyM S.A., and Director of Empresa Editora El Comercio Business Management and Marketing from ESADE. Certificate S.A. Carlos Montero Graña in Quality and Strategic Marketing from AEDEM, Alta Escuela de Dirección de Empresas. Certificate in Leadership and Innovation from IESE - Universidad de Navarra. President of ASF SL and Vice Chairman of the Board of Directors. Civil Engineer. He was advisor to GRUPSOLER S.A. He is a director of BBVA Banco the Vice Chairman of Graña y Montero until March 31, 2007. Continental and Holding Continental, as well as MAPFRE / Additionally, he is the Chairman of the Board of Directors of CATALUNYA. Additionally, he is a director of Viva GyM. Concar, Vice Chairman of the Board of Directors of GMP and a director of GyM. Hugo Santa María Guzmán Roberto Abusada Salah External Independent Director. He has a doctorate in Economics from Washington University in St. Louis and a degree in Independent Director. Ph.D. in Economics. He has attended Economics from Universidad del Pacífico. He is a partner and Universidad Católica del Perú and Cornell and Harvard senior economist at APOYO Consultoría. He is a director of universities in the USA. Former Director of the PUCP graduate MiBanco and Apoyo Comunicación Corporativa. Previously, he Economics program. He has held the position of Director of Peru’s was a director of Fondo Consolidado de Reserva (FCR) and Central Bank and CAF and Vice Minister of Economy. Founder Compañía Minera Atacocha. and Director of the Instituto Peruano de Economía (IPE/Peruvian Institute of Economics). Currently, he is the Chairman of the Board Luis Miró Quesada Valega of Directors of GMD. José Chlimper Ackerman External Director. Businessman and Director of Empresa Editora El Comercio S.A. since March 1990. In addition, he has held the positions of Director and President of Grupo TV S.A.C.; Plural Audit and Process Committee: Roberto Abusada Salah, Chairman José Chlimper Ackerman José Antonio Colomer This committee held four meetings during the year Engineering and Construction Committee: José Graña Miró Quesada, Chairman Mario Alvarado Pflucker José Chlimper Ackerman Hernando Graña Acuña This committee held three meetings during the year Human Resource Management and Social Responsibility Services Committee: Committee: José Chlimper Ackerman, Chairman Roberto Abusada Salah Luis Miró Quesada Valega José Graña Miró Quesada, Chairman Mario Alvarado Pflucker Roberto Abusada Salah Carlos Montero Graña This committee held three meetings during the year This committee held three meetings during the year Investment and Risk Committee: José Graña Miró Quesada, Chairman José Antonio Colomer Guiu Hugo Santa María Guzmán Infrastructure Committee: José Graña Miró Quesada, Chairman Mario Alvarado Pflucker Hugo Santa María Guzmán Luis Miró Quesada Valega Hernando Graña Acuña Independent Director. Attended Universidad Nacional de TV S.A.C. and Compañía Peruana de Radiodifusión S.A. since This committee held three meetings during the year This committee held three meetings during the year Ingeniería (National Engineering University). Degree in October 2007 and Zetta Comunicadores del Perú S.A. EMA since Economics and Business Administration from North Carolina June 1995. State University in the USA. Former Director of ALAFARPE, ADIFAN, SNI, and President of IPAE. Former councilman for the Mario Alvarado Pflucker municipality of Lima, President of the Fondo de Las Américas and Internal Director and Chief Executive Officer. Civil Engineer with Minister of Agriculture. Currently, he is a director of Maestro Home a Master’s degree in Engineering Administration from George Center Perú S.A., Aeropuertos del Perú S.A. and ComexPerú, and Washington University, USA. Currently, he is also a director of a member of the Agrarian Consultative Council for the master’s GMD, GMI, GyM, GMP, Viva GyM, CONCAR and CAM Chile. degree in Agribusiness program at Universidad del Pacífico. Chairman of the Board of Directors of Corporación Drokasa S.A. Hernando Graña Acuña and Chairman of the Board of Directors and CEO of AGROKASA. Internal Director. Industrial Engineer with graduate studies in He is a director of Graña y Montero S.A.A. and G y M S.A. Mining Engineering from the University of Minnesota, USA. He is the Chairman of the Board of Directors of GyM and a Director of GMI, GMP, CONCAR, Norvial, Survial and Cam Chile. Real Estate Committee: José Graña Miró Quesada, Chairman Mario Alvarado Pflucker José Antonio Colomer Guiu This committee held three meetings during the year CoRPoRATE GovERNANCE 54 55 Executive Commission Self-evaluation of the Board of Directors The Executive Commission responsible for the coordination of the group is composed of the group’s senior executives: During 2011, the Board of Directors’ Self-Evaluation Process took place at Graña y Montero S.A.A., as well as at our subsidiaries. Mario Alvarado Pflucker Chief Executive Officer Chairman of the Executive Commission Juan José Arrieta Ocampo Corporate Human Resources and SR Manager Mónica Miloslavich Hart Chief Financial Officer Claudia Drago Morante Corporate Legal Manager Antonio Rodríguez Canales Investment Manager Antonio Cueto Saco Country Manager Hernando Graña Acuña Executive President GyM Francisco Dulanto Swayne Executive President GMP Gonzalo Ferraro Rey Infrastructure Manager Juan Manuel Lámbarri General Manager GyM Luis Díaz Olivero 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 Viva GyM Klaus Winkler Speringer General Manager Cam GyM As a result of the self-evaluation, we improved the scheduling of Board of Directors meetings and the structure of the committees, we worked on the risk matrix and we are continuing with visits to the projects. This year, the directors visited the National Theater project and the Machu Picchu Hydroelectric Power Plant. Senior Executives Mario Alvarado Pflucker Francisco Dulanto Swayne Chief Executive Officer since 1997. He obtained a bachelor’s Executive President of GMP. He attended Universidad Nacional de degree in Civil Engineering from Universidad Ricardo Palma and Ingeniería (National Engineering University), ESAN and Universidad a master’s degree in Engineering Administration specializing in de Piura (PAD). He has worked for the Graña y Montero Group since Construction Management from George Washington University, 1974, and was the General Manager of GMP from its founding in USA. Currently, he is a director of GMD, GMI, GyM, CAM Chile, 1984 until March 2011. He is also a director of Consorcio Terminales. Viva GyM, GMP and CONCAR. He was the President of the SPE (Society of Petroleum Engineers), Lima Section, in 1991 and Director of the Sociedad Nacional de Juan Manuel Lambarri Hierro Minería y Petróleo y Energía (National Society of Mining, Petroleum General Manager of GyM since 2001. Civil Engineer, graduate and Energy) in 1993-1994 and 2005-2006. of Pontificia Universidad Católica del Perú and the Universidad de Piura Senior Management Program (PAD). He joined Graña Jaime Dasso Botto y Montero in the year 1982 and currently, he is also a director of General Manager of GMD since 2000. He obtained a bachelor’s GyM, Viva GyM and GMI. Hernando Graña Acuña degree in Electronic Engineering and a master’s degree in Software Development from Stevens Institute of Technology, USA. He was the Commercial Manager of GMD from 1994 to1999. Executive President of GyM. Industrial Engineer with graduate Currently, he is also a director of GMD. studies in Mining Engineering from the University of Minnesota, USA. He is the Chairman of the Board of Directors of GyM and Walter Silva Santisteban Requejo This committee held three meetings during the year. Director of GMI, GMP, CONCAR, Norvial, Survial and Cam Chile. General Manager of GMI from 1998 to 2005 and Managing Shareholder Service office Luis Díaz Olivero Director from 2006 to the present. He obtained a bachelor’s degree in Civil Engineering from Universidad Nacional de General Manager of GMP since March 2011. Industrial engineer Ingeniería (National Engineering University). Currently, he is also with an MBA from the University of Pittsburgh. He held the a director of ECOTEC. position of Assistant Manager at GMP from 2009 to 2011. The Shareholder Service Office handled a total of 48 inquiries and meetings with investors and company shareholders during the year From 2004 to 2009, he served as the Corporate Finance Manager Jaime Targarona Arata 2011 and participated in 5 international conferences in Mexico, Santiago, New York, Lima, London, Paris and Edinburgh, where 44 and Finance Manager of GyM from 2001 to 2004. He has worked General Manager of CONCAR since August of 2005. Civil Engi- meetings were held with investors. for the group since 1993. Currently, he is a director of GMP. neer graduated from Universidad Autónoma de Guadalajara, with an MBA from Universidad San Ignacio de Loyola. He has also held the position of Civil Engineer on different projects, Commer- cial Manager of the GyM Special Projects Division and General Manager of Graña y Montero Mexico. Currently, he is a director of CONCAR. CoRPoRATE GovERNANCE 56 57 Rolando Ponce Vergara Claudia Drago Morante General Manager of Viva GyM since October 2008. Previously, Corporate Legal Manager since 2000. Attorney graduated from he held the position of Manager of the Real Estate Division. He the University of Lima. PADE in Finance and Corporate Law from Kinship has worked for the Group since 1993. He is a Civil Engineer by ESAN. She was the Legal Advisor to GMD from 1997 to 2000. Mr. José Graña Miró Quesada, Chairman of the Board of Directors, has third degree kinship with Ms. Yamile Brahim Graña, a share- profession, with a degree from Universidad Ricardo Palma and Currently, she is also the Stock Exchange Representative and holder of the company, and fourth degree kinship with directors Hernando Graña Acuña and Luís Miró Quesada Valega. Lastly, Mr. a Master’s degree in Construction and Real Estate Business Secretary of the Board of Directors. Teodoro Hans Harmsen Andress, a director of GMP, has first degree kinship with Mr. Teodoro Harmsen Gomez De La Torre, Chairman Management from Pontificia Universidad Católica de Chile- of the Board of Directors of GMI. Politécnica de Madrid. Currently, he is also a director of Viva Juan José Arrieta Ocampo GyM. Manager of Human Resources Management and Social Responsibility since November of 2007. Bachelor’s degree in Company Name Klaus Winkler Speringer Sociology from Pontificia Universidad Católica. PADE in Business General Manager of CAM since 2007. Currently, he is also a Administration from ESAN. He was the Human Resources director of CAM Chile. Commercial engineer with a degree from Manager at GyM from 1999 through October 2007. 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 Universidad Gabriela Mistral in Chile and an MBA from Stanford University. He served as Development Manager at Chilectra and Antonio Rodriguez Canales document on August 12, 1996 and registered on card 131617 and electronic record 11028652 in the Registry of Juridical Persons of Lima. previously held managerial positions at Enersis, Endesa Chile and Investment Manager since October 2010, Certified Public Endesa España, working in Madrid, New York and Santiago. Accountant and graduate of Universidad de Lima, with a master’s Capital Gonzalo Ferraro Rey degree in Business Administration from ESAN and an MBA from The Birmingham Business School in the UK. He was the General Corporate Infrastructure Manager at Graña y Montero S.A.A. Manager of Larcomar from 2002 until 2010. Currently, he is a The capital of the company as of December 31, 2011 amounted to S/.390,798,933.00 represented by 558,284,190 shares with a nominal since May 2011. Industrial engineer who attended Universidad director of Concar and CAM Chile. value of S/.0.70 each. Nacional de Ingeniería (National Engineering University) and Universidad de Lima. He also completed the Senior Management Antonio Cueto Saco Program (PAD) at Universidad de Piura. He has worked for Corporate Country Manager - Chile since February 2011. the group since August 1996, holding a number of managerial Economist with a degree from Universidad Católica and a positions. Currently he is the Chairman of the Board of Directors master’s degree in Management and Finance from HEC (Paris, Principal Shareholders of SURVIAL, CANCHAQUE and GyM LA CHIRA and a director France). He has worked for the group since 1996 and has held the As of December 31, 2011, we had 1,235 shareholders, of which approximately 25.65% own less than 1% of the capital stock and nearly of GyM Ferrovías. positions of Business Development Manager at Graña y Montero 34.02% have from 1 to 5%. S.A.A. (2008-2010), Commercial Manager at GyM (2007), Project Mónica Miloslavich Hart Manager at GyM (2001-2007) and General Manager of Servisel The principal shareholder is the GH Holding Group, represented by José Graña Miró Quesada, Chairman of the Board of Directors. Chief Financial Officer since July 1, 2009. Economist. Graduate S.A. (1996- 2000). of Universidad de Lima. She has been with the group since 1993. She was the Finance Manager of GME S.A from 1998 to 2004 and Dennis Gray Febres Finance Manager of GyM from 2004 to 2009. Currently, she is Corporate Finance and Investor Relations Manager since May 2011. also a director of Norvial, Survial and GyM Ferrovías S.A. Economist with a degree from Universidad del Pacífico specializing César Neyra Rodriguez in Finance. Former Corporate Vice President of Finance at Citibank del Perú, General Manager of Citicorp Perú SAB, and Product Manager of Internal Auditing and Management Processes since Development Manager at BCP. 2003. He has a bachelor’s degree in Accounting from Universidad Nacional Federico Villarreal and a master’s degree in Business Jorge Luis Izquierdo Ramirez Administration and Finance from Universidad del Pacífico. He has Manager of the Corporate Learning Center. Civil Engineer with also studied Quality Improvement Systems and graduated from a degree from PUCP and a master’s degree in Construction the Six Sigma Methodology program at Caterpillar University in Management from the University of California, Berkeley. He joined Mexico and the USA. the group in 1998 through GyM in operations and began running the Corporate Learning Center in January 2011. CoRPoRATE GovERNANCE 58 59 List of Principal Shareholders as of 12/31/2011 Dividend Policy Full Name Numbers of Shares GH Holding Group 117,538,203.00 AFP Integra (ING GROUP)* 65,901,696.00 Prima AFP (Grupo Crédito) * 65,889,092.00 AFP Horizonte (Grupo BBVA)* 55,949,863.00 Bethel Enterprises S.A. 33,785,285.00 Profuturo AFP (Grupo Scotiabank)* 29,228,812.00 Byron Development S.A. 22,432,223.00 Subtotal 390,725,174.00 Other Shareholders 167,559,016.00 Nacionality Panama Peru Peru Peru Panama Peru Panama Interest 21.05% 11.804% 11.802% 10.02% 6.05% 5.24% 4.02% 69.99% 30.01% The company’s Dividend Policy in effect in the year 2011 is to distribute 30% of the profits obtained each year. 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, concessions 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. Total 558,284,190.00 100.00% Changes in shares * Sum of Funds 1,2 and 3 Tenencia Less than 1% From 1% - 5% From 5% - 10% Over 10% Total Number of Shareholders Percentage Interest The share price quoted at year end was S/. 6.70. The volume traded during the year amounted to S/. 592,536,777. Lastly, the IGBVL (general index) dropped 16.90% compared to 2010, and the ISBVL (selective index) decreased by 14.71% compared to 2010. It should be noted that the variation in the GRAMONC share rose 0.75% (including the effect of the issuance of stock dividends). 1,219 12 3 1 1,235 25.65% 34.02% 19.28% 21.05% 100.00% CoRPoRATE GovERNANCE 60 61 Graña y Montero S.A.A. variable Income volume Traded GRAMoNC1 vol. Neg. US $ Precio CIerre ISIN Code Nemonic year - Month quotes 2011 Avg. Price S/. opening. S/. Closing S/. Max. S/. Min. S/. PEP736581005 GRAMONC1 2011 - 01 PEP736581005 GRAMONC1 2011 - 02 PEP736581005 GRAMONC1 2011 - 03 PEP736581005 GRAMONC1 2011 - 04 PEP736581005 GRAMONC1 2011 - 05 PEP736581005 GRAMONC1 2011 - 06 PEP736581005 GRAMONC1 2011 - 07 PEP736581005 GRAMONC1 2011 - 08 PEP736581005 GRAMONC1 2011 - 09 PEP736581005 GRAMONC1 2011 - 10 PEP736581005 GRAMONC1 2011 - 11 PEP736581005 GRAMONC1 2011 - 12 6.70 6.55 6.50 6.20 5.14 6.10 5.24 6.05 5.90 5.40 6.13 6.40 6.50 6.50 6.21 5.14 6.10 5.24 6.05 5.90 5.45 6.13 6.40 6.70 6.73 6.92 6.60 6.35 6.55 6.35 6.30 6.30 5.90 6.30 6.45 6.70 6.40 6.50 6.00 4.60 5.10 5.22 5.24 5.20 5.45 5.10 6.00 6.30 6.58 6.60 6.27 5.41 6.18 5.77 5.91 5.58 5.74 5.64 6.26 6.46 45,000,000 40,000,000 35,000,000 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 8.00 7.00 6.00 5.00 4.00 3.00 2.00 1.00 0.00 Jan Feb Mar Apr May Jun Jul Aug Sep oct Nov Dec CoRPoRATE GovERNANCE 62 63 Graña y Montero S.A.A. Company Name Graña y Montero S.A.A. Address: Telephone: Fax: Shareholder Service Office Av. Paseo de la República 4667, Surquillo 51-1-213 6565 51-1- 213 6590 51-1-2136566 Representative Mónica Miloslavich Hart Electronic mail address mmiloslavich@gym.com.pe Incorporation Public Records Capital Stock Shares Public deed dated August 12, 1996 Card 131617- Electronic Record 11028652 S/. 390,488,222.74 558,284,190 fully subscribed and paid in Acciones in portfolio none Principal Shareholders and Economic Group See Corporate Governance section Social Purpose See Corporate Governance section IIUC Duration Events Sector and Competence 6719 Indefinite Net Sales Leases Management Investment Plans Main Assets Shares GyM S.A. Shares GMP S.A. Shares GMD S.A. Shares GMI S.A. Shares Concar S.A. Shares Larcomar S.A. Shares Norvial S.A. Shares Canchaque S.A. Shares Survial S.A. Shares TGP S.A. Shares GyM Ferrovías Shares CAM Chile S.A. year 2011 year 2010 S/. 3'385,000 S/. 3'852,000 S/. 36'180,466 S/. 32'302,336 All of the services were provided in-country. US$ 183 million 93.67% 95% 88.68% 89.41% 99.99% 79.69% 50.10% 99.96% 73.00% 1% 50% 75% 75% See Historical Summary Shares Concesionaria La Chira S.A. Graña y Montero S.A.A. is an investment company whose principal subsidiaries pertain to the Construction, Engineering, Petroleum, Information Technology, Concessions and Shopping and Entertainment Center Sectors. In addition, it provides management services exclusively to its subsidiaries, due to which it does not actually compete in the market. Judicial Administrative or Arbitral Proceedings See Notes to the audited Financial Statements Individuals Responsible for Preparing and Reviewing Financial Information Gonzalo Rosado Solís - General Corporate Accountant Mario Alvarado Pflucker Corporate General Manager External Auditors Price Waterhouse Coopers Social Responsibility Historical Summary Graña y Montero was founded 78 years ago on June 22, 1933 under In the 1990s, Graña y Montero participated actively in the Peruvian the name of GRAMONVEL by engineers Carlos Graña Elizalde, privatization process as Telefónica’s local partner in Telefónica Alejandro Graña Garland and Carlos Montero Bernales. del Perú, as ENDESA’s partner in Empresa de Generación It was a construction company until the year 1949 when it merged with Morris y Montero to acquire capacity for the execution of In recent years, Graña y Montero was the first company to paving and earth moving works under the new name of Graña y participate in the infrastructure concession program, which has led Eléctrica de Lima, and REPSOL’s in the La Pampilla Refinery. Montero. to participation in the majority of the contracts and the operation of over 3,400 Km of highways today through its subsidiary, CONCAR In those times it participated in the country’s major infrastructure S.A. works, such as the Southern Pan-American Highway, El Pato Air Base for the United States government and the city of Talara, and During the year 2010?, the group incorporated 5 companies: GSD, built some of Lima’s most emblematic buildings, such as the which specializes in the digitization of documents; CAM, which Ministry of Economy and the Ministry of Labor. specializes in services for the electricity sector; Stracon GyM In the 1950s, it formed Consorcio de Ingenieros Contratistas Treatment Plant Concession; and Ferrovías GyM for the operation Generales S.A. to execute more complex projects, such as the of railways, beginning with the operation of the Lima Metro. Cañón del Pato Hydroelectric Plant, the Steel Mill in Chimbote and the runway for Lima’s Jorge Chávez Airport. Currently, the Group has 3,082 engineers, it is the only company for mining services; La Chira S.A. for the La Chira Waste Water Subsequently, it concentrated its growth on large-scale private in the country’s engineering and infrastructure sector and it has projects such as the Cuajone and Cerro Verde mines, the Shell, activities in 6 other Latin American countries in addition to Peru. in its field listed on the Lima Stock Exchange, it clearly the leader Mobil and Occidental petroleum projects, and the Chavimochic and Chinecas irrigation projects. Upon the celebration of its 50th anniversary in 1983, the Strategic Diversification Plan was launched, leading to the formation of GMP, the petroleum service company; GMD, the information technology service company; and GMI, the engineering consulting company. These companies were the origin of what is now the Graña y Montero Group. H o T E L SH E R AT oN LI M A, 1 9 74 66 67 Creciendo Estratégicamente Creciendo en Sofisticación Creciendo en Calidad Creciendo en Solidez Direcciones Graña y Montero S.A.A. Av. Paseo de la República 4667 Oficina C-401, Surquillo, Lima 34, Perú T 213-6565 F 213-6590 Representante Legal Mario Alvarado Pflucker GyM S.A. Av. Paseo de la República 4675 Oficina A-201, Surquillo, Lima 34, Perú T 213-0444 F 213-0400 Representante Legal Juan Manuel Lámbarri GMD S.A. Av. Paseo de la República 4667, Surquillo, Lima 34, Perú T 213-6300 F 446-9667 Representante Legal Jaime Dasso Botto GMI S.A. Ingenieros Consultores Av. Paseo de la República 4667, Surquillo, Lima 34, Perú T 213-5600 F 444-0373 Representante Legal Walter Silva Santisteban GMP S.A. Av. Paseo de la República 4667, Lima 34, Perú T 215-1500 F 241-3030 Representante Legal Francisco Dulanto Swayne Concar S.A. Dirección Calle Shell 459 – Miraflores, Lima 18, Perú T 213-6535 F 213-6538 Representante Legal Jaime Targarona Arata viva GyM S.A. Av. Paseo de la República 4675, Surquillo, Lima 34, Perú T 206-7206 F 206-7205 Representante Legal Rolando Ponce Vergara Ferrovias GyM S.A. Jr. Solidaridad cdra. 8 s/n, Parque Industrial, Villa El Salvador, Lima 42, Perú T 207-2900 Representante Legal Manuel Wu Rocha Cam GyM Tarapacá 934, P. 3, Santiago de Chile, Chile T 56-2-3897437 F 56-2-389-7342 Representante Legal Klaus Winkler Speringer
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