LIMA, Peru--(BUSINESS WIRE)--

Graña y Montero S.A.A. (NYSE:GRAM) (BVL:GRAMONC1) (“the Company” or “Graña y Montero”) a leading Engineering and Construction company, announced today that in the General Shareholder Meeting, the appointment of 7 new members of the Board of Directors was approved, and now is comprised by a total of 9 members. In the afternoon, the new Board will hold its first session, in which it will appoint the Chairman and Vice-Chairman as well as distribute the responsibilities of the directors in the different operational committees of the Group.

During the meeting led by Luis Diaz Olivero, Chief Executive Officer of the Group, the portfolio of projects (backlog) was presented in detail. Up to February 2017, the projects amount to approximately US$ 3.6 billion, which demonstrates the Group's financial strength. He also indicated that 11% of this portfolio belongs to projects contracted with the public sector and the rest are private. Among the main projects are the expansion of Toquepala, the construction of Linea Amarilla, the construction and operation of the Shahuindo mine, the development and construction of La Arena Project, the construction of the Aloft Hotel, among others.

Diaz Olivero commented that, with respect to the indebtedness generated by the cancellation of the Peruvian Southern Gas Pipeline (GSP) contract, an agreement was reached with CHUBB Perú (Insurance and Reinsurance Company) to establish a 12-month payment term, which will have positive effect. He also added that, with respect to credit lines with the main banks with which the Group is related, they are close to reaching an agreement of a committed syndicated line that will ensure the working capital and the necessary guarantees to be able to execute its portfolio of projects, as well as being able to continue contracting in the future.

In addition to the review of the soundness of the Group's business, the shareholders learned about the initiatives taken to strengthen the corporate governance and compliance systems of Graña y Montero. The internal investigation commissioned in January to a prestigious international firm was mentioned, indicating that it will serve as a basis for decisions the company will take regarding legal actions.

Within this topic, the progress made in strengthening the Foreign Corrupt Practices Act (FCPA) was explained. In the same line, the creation of the Risk, Compliance and Sustainability Committee was mentioned indicating that it was a decision made by the outgoing board. Moreover, the appointment of the Risk and Compliance Manager was also discussed, whose selection process is already under way.

The Group confirmed that currently none of its companies has any impediment to operate in the public or private sector, either in Peru or in any other country. Regarding the existence of legal actions against the company, Luis Diaz Olivero confirmed that only two civil lawsuits have been filed in the United States, in both cases corresponding to a single person, and to date we have only been notified of one of the lawsuits.

In his message in the Shareholder Meeting, Diaz Olivero stated: "We are convinced that the new board elected today will continue this commitment to good corporate governance and compliance. From the management of the business we will propose and implement additional measures to avoid situations in the future such as in the recent past. For this, for example, we are proposing new conditions when it comes to partnering with third parties for the development of projects."

The Group's CEO reiterated that the different initiatives being implemented will serve to strengthen and expand the trust of suppliers and customers, as well as of the entire Peruvian society. Luis Diaz Olivero included among his priorities, the renewal of the “pride of belonging” that has characterized to date the more than 28,000 employees of Graña and Montero.

About Graña y Montero S.A.A.

Graña y Montero is the largest and most important Engineering and Infrastructure Company in Peru. It has 26 companies in 4 Business Areas and operates in 5 countries in Latin America. It is the only South American construction company listed in the Lima Stock Exchange and in the NYSE. It has 83 years of operations, due to its corporate values, which have always guided the behavior of its employees. It has been an example in the region for its good practices in corporate governance and has been continuously considered as one of the most admired and renowned firms of the country.

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