BUiLdiNg PERU’s fUTURE ANNUAL REPORT - Cementos · PDF filecontent new cement Plant in...

ANNUAL REPORT

BUiLdiNg PERU’s fUTURE

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2014

ANNUAL REPORT>

BUiLdiNg PERU’s fUTURE 2014

04 New CemeNt PlaNt iN Piura 08 orgaNizatioNal Culture 10 CorPorate CommitmeNt

aCtivities

51 admiNistratioN direCtors Board Committees maNagemeNt 61 FiNaNCial iNFormatioN 65 FiNaNCial statemeNts

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Goals achieved

commitment

19 eCoNomiC eNviroNmeNt 21 the NatioNal CemeNt market 23 CemeNt ProduCtioN 25 CommerCial CoNsolidatioN 27 CoNsolidated FiNaNCial results oF CemeNtos PaCasmayo s.a.a. aNd its suBsidiaries

35 geNeral iNFormatioN 36 deClaratioN oF resPoNsiBility 37 BusiNess

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4 5

soundness Results

Best PRactices

29 maiN suBsidiaries

33 ComPleted ProjeCts

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new cement Plant in PiuRa

in 2014, further progress was made in the implementation of the cement plant project in Piura. Progress was achieved in the construction and electromechanical assembly activities performed by the Cementos Piura Consortium formed by the following companies: JJC Contratistas Generales S.A., SSK Montajes e Instalaciones S.A.C. and JJC Schrader Camargo S.A.C.

The Project Management team has been reinforced by specifically-recruited staff with experience in the cement industry, in addition to the staff from the Pacasmayo Plant. This enlarged management team, together with the Plant Construction and Engineering Supervision, as well as the contracted external companies (Cesel Ingenieros S.A. and Saxum Ingeniería S.A.) will ensure the committed deadlines and costs, with the expected quality.

The following activities continued their progress in 2014: The manufacture and delivery of major equipment purchased to Loesche GmbH, milling areas, and Thyssenkrupp Industrial Solutions GmbH, responsible for manufacturing and supplying the equipment used in the production of clinker, in addition to the equipment for receiving, transporting and storing raw materials, silos and the packaging and palletizing area. All these pieces of equipment have been successfully transported from the different manufacturing sites in Europe, Asia and Brazil, along with locally-manufactured pieces of equipment, using the FOB contracting system for the logistic services contracted with MIQ and Ransa. The number of pieces of equipment transported amounts to 6,000 tons of imported pieces of equipment, and to 3,500 tons of locally-manufactured pieces of equipment.

On the other hand the Company, through Project Management, directly hired local workshops to manufacture metal structures that include: Warehouses, equipment support and complete buildings. The quantity of metal structure contracted amounts to 4,000 tons, distributed among 10 different workshops.

It should be noted that during 2014 the construction and equipping of the main Electrical Substation (ES) for the future Plant was successfully completed, in addition to the 2.5 km-transmission line that will allow us to have the power needed to operate the plant.

Exploration and mining studies continued their progress at the Virrilá and Bayóvar 4 quarries, as they will be the main source of calcareous raw material (alternative to limestone), in

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cementos pacasmayoannUaL RepoRt

BUiLding peRU’s fUtURe

Nueva PlaNta de CemeNto eN Piura

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new cement Plant in PiuRa

order to ensure the quality and quantity of raw material. Additional complementary raw material sources, such as clays and pozzolans, have also been explored.

It is worth remarking that during the construction process in 2014, peaks of up to 1,450 workers per month were registered in work activities, and if we add the staff from the workshops directly hired, we could say that 3,000 workers were engaged in the activities.

Finally, the total investment for the new plant remains at US$385 million, and its implementation is scheduled for the second quarter of 2015, according to the estimations

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Nueva PlaNta de CemeNto eN Piura

Careful management of the ConstruCtion

of the new Cement plan in piura has

allowed us to stay on time and on budget.

ToTal invesTmenT: us$ 386 million

sTarT of operaTions:

seCond half of 2015

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gOALs AchiEvEd

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during 2014, we strengthened our effiCienCies,

we Continued the ConstruCtion of the new Cement

plant in piura. the exeCution of this projeCt is on

time and on budget.

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oRGanizational cultuRe

Sharing the Strategic Focus

to join the top 10% of cement companies in latin america both in profitability and in environmental responsibility.

We are an innovative company that specializes not only in cement but also in quicklime and construction materials.

To create value through innovation, quality, operational efficiency, care for the environment, social responsibility, safety and the fostering of clients and human resources.

ouR vision

ouR mission

ouR commitment

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oRGaniza-tional cultuRe

Sharing the Strategic FocuS

Creativity integrityexCellenCe responsibility teamwork

ouR values

The capacity to think differently.

This means living with rectitude and under the principles of honesty, respect and fairness.

Experiencing a process of continual improvement and always striving to do things better.

Respect high standards of safety, care for the environment and contribute to sustainable development of local communities.

Always listen to the ideas of others in order to attain common goals, thereby creating a climate of confidence and learning from our mistakes.

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coRPoRate commitment activities

Quality management and researCh and development

Compliance with the Quality Policy was ensured by checking the conformity of our products against regulatory requirements, thus contributing to customer satisfaction.

The design, development and industrial production of MS (MH)(R)-type cement – New FORTIMAX 3 Formula, and of High Calcium Quicklime was managed, specifically addressing our customers’ needs.

The design of ICo-type cement was optimized, considering compliance with quality requirements, lower production costs and enhanced performance.

The technical specifications for new and existing products, in the cement and limestone industry, were developed and optimized.

The department of geology received support in preparing 820 exploration samples for analysis by FRX, as part of the Piura Project.

In-house and external trainings were developed in subjects such as Quality and Applied Statistics, Cement Production, Lead Auditor, FRX Quality Assurance, MS(MH)(R)-type Cement, New FORTIMAX 3 Formula, etc.

The renewal of the ISO 9001 Certification of our Quality Management System, applicable to CPSAA, CSSA, DINO and Dinoselva, was achieved through a recertification audit conducted in December 2014 by SGS.

We achieved 100% compliance in the Vendor Certification Process by means of an assessment carried out by SGS in November 2014. We were qualified as an “Outstanding Vendor.”

Two internal audits were carried out in CPSAA, CSSA, DINO and Dinoselva as part of the maintenance of the Quality Management System (QMS). In addition, 22 employees were trained and certified as ISO 9001 Internal Auditors.

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safety and environment

1. SafetyThe Industrial Safety Management of 2014 was framed by the fulfillment of three main objectives: The development of the “Excellence in a Culture of Safety” Project, the sustainability of Industrial Safety Management, and the compliance with current legal regulations.

Establishing the continuity of the “Excellence in a Culture of Safety” Project was achieved during this period. The objective of this project is to settle a solid prevention culture throughout the organization. Significant progress was obtained in this regard, laying its foundation on the commitment of top management and the leadership of the company.

Likewise, important results were obtained based on the integration of leadership and chain of command when working on the sustainability of the Management System. Key management tools were developed, allowing us to prevent operational risks.

In compliance with current legal regulations, we identify each legal requirement applicable to our operations, carrying them out and ensuring that the reviews performed by state regulatory authorities do not create any contingencies due to non-compliance.

Meeting these three objectives in all the units of the Group has allowed us to significantly reduce accident rates on the basis of the following: Enhanced implementation of HIRA (Hazard Identification and Risk Assessment), deviation management, incident management

and reporting, application of operational procedures, etc.

Our management outline, reinforced by the key concepts that result from the consulting services provided by DUPONT, has given us very satisfactory results in the whole process.

Continuity of the “exCellenCe in a Culture of safety” projeCt was

aChieved during this period. the objeCtive of this projeCt is to

settle a solid prevention Culture throughout the organization.

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2. environmentThe company has a Management System that allows it to remain within the legal environmental framework. This is reflected in meeting the environmental commitments took on with regulatory authorities, in addition to the results of monitoring the activities related to the control of air, noise, water and soil quality that we conduct for our operations. The environmental monitoring results are within the Environmental Quality Limits and Standards.

Cementos Pacasmayo cares about developing an environmental system focused on preventing environmental impacts by meeting the environmental commitments took on in the Environmental Impact Assessment (EIA) and Environmental Impact Statement (EIS). Thus, we have been working on a series of initiatives that will enable us to further improve in environmental management, notwithstanding that monitoring


activities show that we are below the established limits. Some of these initiatives are:

• Planting trees in different parts of the plant. This allows us to visually enhance our facilities.

• Treating domestic wastewater.• Creating water and energy saving/

optimization initiatives.• Creating mechanisms to reuse the waste

material resulting from our operations, reincorporating it into the process.

• Technological improvements in the Tembladera operations by installing telescopic chutes in the secondary crusher. This allows an improved control of the dust generated by the operations and avoids the use of water in these controls.

• Improving the primary crusher enclosure of the Tembladera operations.

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Community relations

In 2014, the Community Relations department met the objectives outlined in its operations and projects.

The mission of the Community Relations department is the following:

“to Create and strengthen a favorable soCial environment for the Continuity and growth of our operations and projeCts, prioritizing our soCial investment in eduCation, health, and loCal development programs, in Coordination with other interest groups for the purpose of Contributing to sustainable development.”

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Some of the most relevant actions at corporate level are the following:

• Implementing the Community Relations Strategic Plan in all our units and projects.

• Implementing the social investment guidelines in all our units and projects.

• Implementing the Social Management and Information System. This system is highly useful for reporting, as it makes online information easily accessible to the different employees, heads and managers associated to the department.

• For the fourth consecutive year, we have developed our sustainability report, attaining for the second time an application level B, in accordance with the GRI (Global Reporting Initiative) standards.

• For the third consecutive year, we have been recognized as a Socially Responsible Company.

at operationS and projectS level:

• We have obtained the approval of the EIA for the SALSUD Project, Virrilá Quarry and Coal Project in coordination with the Environment department.

• We have started operations at Bayóvar 4.

• We have established Public-Private Partnerships (PPPs) with public and private organizations, getting to finance productive projects in Rioja and Piura. Through this, livestock and coffee producers, as well as young people, were benefited by technical training programs.

Our social investment is defined by three guidelines and three strategies, which include the following projects:

education through programS:

Donation to TECSUP and UTEC. Tecsup is a leading nonprofit Peruvian institute that, since 1984, provides technical higher education. In its three campuses in Peru, Tecsup has graduated more than 7,000 students in various technical fields, some of whom now work for us and our affiliates. On the other hand, the Universidad de Ingeniería y Tecnología – UTEC (University of Engineering and Technology) is an educational nonprofit proposal that since 2012 is aimed at the development of people in the engineering field, looking to satisfy the need for these types of professionals in the labor market by implementing a curriculum in line with the trends and demands that globalization poses to modern engineering, with an integrated approach to innovative teaching models. To enhance students’ knowledge, UTEC also has various national and international alliances with top organizations.

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Luis Hochschild Plaut Educational Fund in partnership with TECSUP. Through this program we have provided financial assistance in 2014 to 86 young people interested and qualified to study in TECSUP, in addition to 16 beneficiaries of the Educational Credit.

Centro de Difusión de Tecnológica (Center for Technology Diffusion) in partnership with TECSUP. In 2014, at our Pacasmayo and Tembladera operations, TECSUP instructors provided training to 614 students and adults from the local population on the general competencies and capacities of Information Technology.

Matemáticas para Todos (Math for All) in partnership with Instituto Apoyo. The project has been implemented for 11 years, enhancing the indicators of the census evaluation. 7 schools and over 5,000 beneficiary students have participated in the program.

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health through the following:Support to the “Healthy Schools” program.

Medical campaigns in partnership with the Ministry of Health.

Support in the implementation of instruments, equipment and medical furniture for the main health facilities at our operation sites.

Support to improve basic health infrastructure.

Capacity building for health personnel from the different health facilities in our operation sites.

local development through the following:Agreements established with public and private organizations aimed at contributing to capacity building. Through these agreements, productive projects that help in employment generation were implemented through organized interest

groups in our area of influence. One of our social responsibility programs in the rainforest consisted on studying the reproductive forms of the “paiche” (arapaima giga), a native fish species that was on the edge of extinction. After years of studies and scientific testing, we have successfully bred this species in captivity, and we have obtained thousands of fingerlings. In 2014 Acuícola Los Paiches S.A.C., the company that promotes this initiative, received the “Award for Innovative Exports” from the Peruvian Exporters Association – ADEX for its research and for developing “paiche” farming in the Yurimaguas rainforest.

Our donation policy provides permanent support to different activities, which are aimed at revaluating culture, promoting sports, and boosting productive trade shows and recreational activities for the residents of our area of influence.

paCasmayo supports healthy sChools

program, as well as mediCal Campaigns in partnership with the

ministry of health.

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good corporate governance practiceS

Cementos Pacasmayo S.A.A. counts among its objectives the continual improvement of its good corporate governance practices, and is actively committed to developing these for the benefit of its shareholders and the market in general.

An example of such commitment is the recognition of the good corporate governance practices of Cementos Pacasmayo by the Lima Stock Exchange (BVL). For the fifth consecutive year, Cementos Pacasmayo was selected as part of the Good Corporate Government Index (IGBC). Additionally, the Company was awarded with a special recognition for obtaining the highest sustained growth in the last 5 years.

Cementos paCasmayo was awarded with a speCial reCognition by the

lima stoCk exChange for obtaining the highest sustained growth in

the last 5 years.

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sOUNdNEss

>with the new Cement plant in

piura we are strengthening our

position in the north of peru.

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economic enviRonment

in 2014, the growth of the world economy declined for the third consecutive year, in spite that the different economies had an uneven performance. On the one hand, the United States showed a strong recovery due to the services sector and to the recovery of the manufacturing industry, with an increased consumption and investment promoted by the strengthening of economic conditions. On the other hand, the Eurozone experienced deterioration in consumers’ trust caused by the Russia-Ukraine conflict. This resulted in investments dropping and moderate consumption. Japan fell into recession in the third quarter of 2014 due to the negative impact created by the increase on sales taxes in April.

In general terms, emerging economies showed signs of deceleration, especially Latin America,

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economic enviRon-ment

due to the impact of external factors, such as the fall of trade terms and currency depreciation.

Peruvian economy, like other economies in Latin America, suffered a slowdown in 2014. The main factors of said deceleration were: 1) lower growth in consumption and investment resulting from the fall of terms of trade; 2) reduction of public expenditure, mainly due to the difficulties on the implementation of regional and local government investment programs; and 3) climatic factors, such as the slight increase in water temperature, which affected key sectors such as the fishing and agriculture industries.

However, it is important to note that Peru has solid macroeconomic foundations, which allow the country to be better prepared for this situation. International reserves totaled 62,307 million in December 2014 – amount slightly

below the one reached in 2013. Nonetheless, it remains as one of the highest in the region, as it represents 30.5% of GDP.

According to the Inflation Report issued in December by the Central Reserve Bank (BCR, for its acronym in Spanish), demand grew about 2.5%, which is below the growth registered in 2013, but still slightly above the GDP growth of 2.4%. Exports were affected by the international situation, especially by the slowdown in the mining industry. This caused a 2.2% fall, compared to 2013 results.

According to the latest BCR report, annualized inflation was 3.2%, which is slightly above the annual parameters set by the BCR (between 1% and 3%). However, it is important to highlight that this rate mainly reflects increased food prices and electricity rates. Inflation resulted

in 2.5% if we exclude food and energy, in other words, if we deduct the impact of these sectors in high price volatility. There was a 6.8% depreciation of the Nuevo Sol against the US Dollar. The exchange rate closed at levels of 2.986 Nuevos Soles per dollar by the end of 2014, compared to the 2.795 Nuevos Soles level registered by the end of the previous period.

million as of deCember 2014.us$ 62,307

international reserves reaChed

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the national cement maRket

during 2014, shipments of cement totaled 11’429,938 metric tons, improving on the 11’143,629 metric tons shipped during the same period in the previous year.

The production facilities of Cementos Pacasmayo and Cementos Selva shipped a total of 2’346,877 metric tons (0.1% less than what was shipped during the same period in the previous year).

Market share for Cementos Pacasmayo and Cementos Selva during this period was 20.4%.

market share for Cementos paCasmayo and Cementos selva

during this period was

20.5%

1. Cement sales volume during 2014 includes the cement

used for the construction of the new Piura plant.

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the national cement maRket

20.5%paCasmayo + selva

maket shareCementos paCasmayo and Cementos selva

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cement PRoduction

cement production at the Pacasmayo plant reached 2’053,786 metric tons (below the 2’100,740 metric tons produced in the previous year).

Production of this quantity of cement required 1’444,752 metric tons of clinker, and 609,034 metric tons of additives such as gypsum, blast furnace slag, pozzolanic material, limestone and diatomite.

Production in the Rioja plant was 23.5% higher than the previous year, reaching a volume of 296,419 metric tons, which required 235,961 metric tons of clinker and 60,459 metric tons of additives.

Total clinker production for both plants was 1’241,548 MT, and 443,526 MT of imported clinker were needed to cover the deficit.

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commeRcial consolidation

In 2014, the efforts of the Commercial Department were focused on strengthening and expanding our relationships with our customers and clients. Our main achievements were the following:

• Maintain the positioning of the Pacasmayo brand, reaching brand-awareness levels above 98%.

• The sulfate-resistant cement (the Premium prices of the category) now with Fortimax 3, was successfully re-launched in February. Its durability focus makes it a unique product in the market, coming to get up to 42% of our sales.

• During 2014, we kept our commitment to help in the development of master builders from the northern area of the country. We provided training to over 4,000 master

builders through the ¨Dino Master Builders Club,¨ exceeding by more than 50% the results achieved in 2013.

• The first class of Procer (Certification Program for Pacasmayo Mater Builders) students graduated in December. This 100-hour study program on civil construction was developed in partnership with Tecsup, one of the main technical institutions of the country. Its objective is to improve construction standards in the northern area of the country. Over 1,200 master builders applied to the program, from which 60 were qualified to take the course.

• Red Comercial Dino (Dino Commercial Network) consolidates another year of growth by developing relationships with its clients through promotions, customer-loyalty

programs and the ongoing “Dino Cercanía” (Dino Closeness) positioning campaign.

• We implemented the sub-distribution model for hardware stores through our network of partners. This model’s objective is to strengthen the DINO network and to provide a better service to the hardware stores sector through our presence at the point of sale. At the end of 2014, we implemented this model in four of the main cities: Trujillo, Chiclayo, Piura and Cajamarca. This model gave us access to 100% of hardware stores in the urban areas of these cities, covering up to 800 hardware stores (points of sales) on a weekly basis.

• In 2014 we began to strengthen sales management from the specialization of our sales force up to the monitoring and control

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thereof. We developed a sales program by channels (massive, industrial and public segment). This specialization helps us provide a better service to our clients, given that each sales team has the relevant technical and commercial skills for a better interaction with customers. In addition, we have developed, together with the Business Intelligence Department, a registry and monitoring system for market variables, which are collected from the points of sale of the different channels. This helps us on decision-making in view of our business strategy.

commeRcial consolida-tion

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consolidated Financial Results oF cementos Pacasmayo s.a.a. and its suBsidiaRies

Consolidated sales revenue for Cementos

paCasmayo and subsidiaries

salesIn 2014, consolidated sales revenue for Cementos Pacasmayo and its subsidiaries reached S/.1,242.6 million (a 0.2% increase in sales revenue on the previous period). Of these revenues, 87.3% was owed to sales of cement, concrete and blocks.

gross profitThe consolidated gross profit of Cementos Pacasmayo and its subsidiaries in 2014 was S/. 518.4 million, a 1.0% decrease on the S/. 523.4 million obtained during the previous year.

Consolidated profit for the period Profit for 2014 was S/. 188.8 million, 24.0% above the S/. 152.3 million obtained during 2013.

ebidtaCompany earnings before the deduction of earnings before interest, taxes, depreciation and amortization (EBITDA) were S/. 365.3 million, 4.7% higher than the S/. 348.9 million earned in 2013.

s/.1,242.6 million

s/. 518.4 million

Consolidated gross profit for Cementos

paCasmayo and subsidiaries

+24% net profit

for 2014

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REsULTs

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during 2014 we were able to deCrease

administrative expenses whiCh resulted

in inCreased profitability

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main suBsidiaRies

Cementos selva In 2014, CEMENTOS SELVA’s cement sales volume amounted to 286,101 TM, a 19% increase compared to the 240,431 TM sold the previous year.

The total cement production in 2014 reached 296,419 TM.

2014 saw many months of high demand, leading to the plant being used to almost 100% of its capacity.

dino The sales of products supplied by Cementos Pacasmayo S.A.A. amounted to S/. 730.6 million, representing 75.5% of the sales made by Dino.

The sales of the products manufactured by Dino amounted to S/.155.8 million and the sale of the

products supplied by third parties amounted to S/. 81.2 million, representing 16.1% and 8.4% of Dino’s sales, respectively.

In 2014, a total of 377,731 cubic tons of ready-mix concrete was shipped. This figure is 20.6% lower than the 475,652 cubic tons shipped in 2013.

The sales volume of precast blocks and pavers in 2014 increased from 30,259 thousand sold in 2013 to 31,207 thousand.

Steel sales represented 90.4% of the total third-party sales.

dinoselva iQuitos Las The sale of products supplied by Cementos Selva S.A. amounted to S/. 140.2 million, representing 84.6% of the sales made by Dinoselva.

In 2014, a total of 24,993 cubic meters of ready-mix concrete was shipped. This figure is 68.9% higher than the 14,792 cubic meters shipped in 2013.

In 2014, the volume of sales of precast blocks and pavers fell from the 6,217 thousand sold in 2013 to 5,498 thousand.

Steel sales represented 95.2% of the total third-party sales.

Cement sales volume for

inCreased 19%Cementos selva

in 2014 Compared to the previous year

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main suBsidiaRies

fosfatos del paCÍfiCo The Bayóvar project began when the Bayóvar concession No. 9 was awarded to Cementos Pacasmayo S.A.A. on August 29, 2007, as a result of the Concurso Público Internacional (Public and International Invitation to Tender) No. PRI-087-2007 meant to encourage private investment in the remaining concessions in the Bayóvar area. Such concession is located in the district and province of Sechura, department of Piura, approximately 1,000 km north of Lima, 110 km south of Piura and 30 km from the Pacific Ocean.

On September 1, 2009, by way of a simple restructuring process, CPSAA separated from its assets a block of equity relevant to the phosphates industry, thus organizing the company Fosfatos del Pacífico S.A.

Subsequently, on December 29, 2011, CPSAA transferred to MCA Phosphates Pte Ltd. (MCAP) 30% of the Company’s shares. It is worth noting that MCAP is a company organized under the

laws of Singapore, 70% of whose capital is owned by the Mitsubishi Corporation and the remaining 30% by Zuari Agro Chemicals Limited.

On December 29, 2011, Fosfatos del Pacífico S.A. entered into an Off-Take Agreement whereby the Mitsubishi Corporation undertakes, inter alia, to market 2 million metric tons of Phosphate Rock a year over a 20-year period. It would also be possible for it to market an additional 500 thousand tons intended to supply the domestic market.

On the industrial side, FLSmidth and Jacobs (USA) began carrying out pilot tests in January 2012 and completed them in May 2012. These tests provided confirmation of the results of the laboratory tests previously carried out.

In February 2012, an international invitation to tender was held for the development of the Project’s “Basic Engineering” and “Feasibility Study.” In May 2012, the Basic Engineering was awarded based on specialization. The

companies that developed the engineering for each component were: Golder Associates for the mine study, the consortium FLSmith Minerals-Jacobs-Golder Associates for the plant study, Berenguer Ingenieros for the port study, and Pepsa Tecsult (Aecom) for the electrical transmission and water supply study.

The project’s chemical and metallurgical laboratory, located within Bayóvar concession No. 9, was inaugurated in April 2013. This laboratory is equipped with the latest equipment needed to analyze minerals and the different products derived from the processing. It will also allow to obtain more detailed information regarding the quality of the final product and its metallurgical recovery.

The Environmental Impact Assessment (EIA) Certificate was granted in March 2014 for all of the project’s components (plant, mine, port, sea water pipeline, industrial road, electric transmission line, etc.). The EIA approval has the favorable opinion of the Ministry of Energy and

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main suBsidiaRies

Mines, the Ministry of Agriculture and Irrigation, the Ministry of Environment, the Ministry of Production, the Ministry of Transportation and Communications, and the Directorate General of Captaincies and Coast Guard of Peru, the National Service of Areas Protected by the Peruvian State, the Peruvian National Service for Meteorology and Hydrology the National Water Authority, the Regional Government of Piura, among others. Moreover, in August 2014 the Ministry of Culture granted the Certificate of the Non-Existence of Archaeological Remains (CIRA) in the project’s areas of influence.

In May 2014, Golder Associates updated the magnitude of phosphate rock mineral resources to 546.1 million dry metric tons with 18.2% of P2O5. Moreover, the company certified the services pursuant to JORC and NI 43101 standards, including the metallurgic information obtained from the diamond drilling samples of all deposit layers. The estimated reserves that guarantee the first 20 years of operation amount to 108.1 million dry tons of ore with 17.8%

of P2O5 that will allow to obtain 50.5 million dry tons of concentrate with 29.3% of P2O5. Subsequently, as a result of the calcination process, the final product will reach 30% of P2O5 and a recovery of approximately 75%, according to the optimization and variability laboratory tests and pilot tests carried out by FLSmidth and Jacobs. Also, in 2014 we reached out to the German company RWE to assess the application of the continuous mining method. Such engineering studies shall conclude during the first half of 2015.

Value engineering was performed in mid-2014 to identify improvement opportunities in the design, construction and operation of the project. To this end, major internationally renowned engineering companies (Hatch, Ausenco and WorleyParsons) were hired based on their experience and knowledge in the different areas. The main scopes of such value engineering include the change of mining method, from conventional mining to a continuous mining system, making the mining process more efficient; compaction

processing plant without reducing production capacity; and the reduction of the size of the port in accordance with the project’s capacity requirements.

The project is currently in the process of incorporating the findings of such value engineering from a conceptual level to a Basic Engineering level, allowing to size the project more precisely. WorleyParsons was hired by

in marCh 2014 the projeCt obtained the

environmental impaCt assessment CertifiCate

for all of the projeCt’s Components.

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main suBsidiaRies

way of an international invitation to tender with the purpose of supervising the implementation and integrating the engineering into the different project components. It thus became the “Project Management Consultant,” role that it shall exercise from the engineering development to the procurement, construction and operation start-up stages.

salmueras sudameriCanas s.a. Salmueras Sudamericanas S.A., which was founded by Cementos Pacasmayo S.A.A. (74.9%) and QUIMPAC S.A. (25.1%), is developing the brine project in the Sechura desert, which includes the Cañacmac, El Tablazo and Ñamuc concessions that together cover an area in excess of 136,000 hectares.

The projects consists in extracting brine (salt water with a high concentration of potassium,

magnesium, bromine, among other minerals) from the subterranean deposit, and then process it to obtain fertilizers, balanced feed and other industrial raw materials. Expected production includes Potassium Sulfate, Magnesium Sulfate, Magnesium Hydroxide and Oxide, Dicalcium Phosphate and liquid Bromine.

The following main permits were obtained in 2014:

In February 2014, the directorial decision was granted by the National Water Authority (ANA) and in July 2014 the Ministry of Culture granted the Certificate of the Non-Existence of Archaeological Remains (CIRA).Finally, in December 2014 the Environmental Impact Assessment (EIA) was approved, grated by the Ministry of Production.

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in paCasmayo• Operational efficiency of line 3, made up of crude 2, coal mills and

furnace 3.• Enhancement of the plant maintenance management system• Improvement of the de-dusting system• Replacement of assets• Update of main equipment• Strategic spare parts for cement final milling and bagging sections.• Update of the furnace 3 automation system (SCADA)• Reinforcement of overhead cranes for the supply of raw materials to

crude and cement mills• Implementation of an operations automated system• Implementation of scanners to control furnace 3 combustion head

and shell• Investment in quarries, crown ditches and discard stockpiles.

comPleted PRojects

in rioja

• Procurement of strategic spare parts for the new production line inaugurated in 2013, to consolidate its reliability.

• Investments in the construction of new warehouses to store bulk raw material, adapting to the environmental regulations in force.

The main projects implemented in 2014 include the following:

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BEsT PRAcTicEs

>for the fifth ConseCutive year, Cementos

paCasmayo was seleCted as part of the good

Corporate government index (igbC). additionally,

during 2014 the Company was awarded with a

speCial reCognition for obtaining the highest

sustained growth in Corporate governanCe in

the last 5 years.

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inFoRmaciónGeneRal

Company assets Company stock is represented by 531,461,479 shares at a nominal value of S/. 1.00 each, while the investment shares of the company are represented by 50,503,341 shares of the same nominal value.

payment of dividendsIn a meeting of the Board of Directors on October 23, 2014, it was agreed to distribute dividends in the amount of S S/. 116,392,920.60, at S/. 0.20 per share, charged against cumulative results.

Consolidated finanCial statementsThe results for financial year 2014, the cash flow and general balance sheet as of December 31, 2014, appear in the documents attached to this report. The aforementioned financial statements of Cementos Pacasmayo S.A.A. and its subsidiaries were audited by Paredes, Zaldívar, Burga y Asociados, member firm of EY (former Ernst&Young).

from the board of direCtors The Board of Directors expresses its gratitude both to shareholders for the trust vested in it and to Management, executives and employees in general for their valuable collaboration.

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declaRation oF ResPonsiBility

The present document contains information that is true and adequate with respect to the development of the business of Cementos Pacasmayo S.A.A. and its subsidiaries during 2014. Without prejudice to the responsibility attaching to the issuer, the signatories make themselves responsible for its content in accordance with applicable legal provisions.

ALfREdO TONg LAmAccountant

mANUEL fERREyROs PEñACFo

hUmBERTO NAdAL dEL cARPiOCeo

Lima, February 13, 2015

It is noted that in the last 2 years there have been no changes in the main accounting official in charge at Cementos Pacasmayo S.A.A.

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Business

general information

Business Name: Cementos Pacasmayo S.A.A.

Address: Calle La Colonia 150, Urbanización El Vivero, Santiago de Surco, Lima 33, Perú

Telephone: (511) 317-6000 Fax: (511) 317-6099

Incorporation and registration: Notarized Document dated December 10, 1998, issued by Notary Public Dr. Gustavo Correa Miller, registered in entry No. 11076338 of the Registry of Corporate Bodies.

Group: Cementos Pacasmayo S.A.A. belongs to the Inversiones Pacasmayo S.A. (IPSA) conglomerate. This conglomerate is also known as the “Grupo Hochschild” and consists mainly of the following companies:

Business Name Corporate PurposeHartsdale Capital INC Entrepreneurial activities

Farragut Holdings INC Entrepreneurial activities

Inversiones ASPI S.A. Investments

Cementos Selva S.A. Manufacture and marketing of cement

Distribuidora Norte Pacasmayo S.R.L. Distribution and marketing

Dinoselva Iquitos S.A.C. Distribution and marketing

Empresa de Transmisión Guadalupe S.A.C. Energy transmission

Acuícola Los Paiches S.A.C. Fishing and the development of fish farms

Fosfátos del Pacífico S.A. Mining activities in the manufacture of fertilizers and chemical products

Salmueras Sudamericanas S.A. Mining activities and the manufacture of salt, fertilizers and chemical products

Calizas del Norte S.A.C. Mining activities

Hochschild Mining PLC subsidiarias Mining activities

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Business

share Classes Created and issued: Common and investment

Company stock of the issuer is represented by 531,461,479 common shares, fully subscribed to and paid for, whose nominal value is one new sol per share, and which represent 91.32% of the totality of the shares in circulation.

Investment Shares correspond to 50,503,124 shares, whose nominal value is one new sol per share, and which represent approximately 8.68% of the totality of the shares in circulation.

1. 52.63 %

2. 19.85 %

3. 4.34 %

4. 3.96 %

5. 2.66 %

6. 1.85 %

7. 1.71%

8. 1.21 %

9. 1.12 %

10. 0.69 %

Share Structure: The participation of the ten largest shareholders expressed in percentages is as follows:

ShareholderS with a participation greater than 5% of company Stock:

Name and/or Business Name Participation Nationality conglomerate

Inversiones ASPI S.A. 52.63% Peruvian Hochschild - Pacasmayo

Jpmorgan Chase Bank N.A. FBO Holders of (ADRs)

19.85% u.s.a.

* The composition of common shares underlying the ADRs is listed in the share register and the name of the depository, “J.P.MORGAN CHASE BANK, NA. FBO HOLDERS OF ADRS.” The total number of ADRs issued as of the end of December 2014 is 21’100,121 (equivalent to 105’500,605 common shares).

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Business

ShareS with a right to vote

inveStment ShareS

holding Number of shareholders Percentage of Participation

less than 1% 7,303 10.66%

Between 1%‒5% 7 16.86%

Between 5%‒10%

greater than 10% 2 72.48%Total 7,312 100.00%

holding Number of Owners Percentage of Participation

less than 1% 447 11.98%

Between 1%‒5% 2 2.31%

Between 5%‒10% 5 40.39%

greater than 10% 2 45.32%Total 456 100.00%

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Business

desCription of operations and development

Corporate purpose: The purpose of the Company is to devote itself to the development and manufacture of cements, quicklime, aggregates, cement blocks and bricks, pre-mixed concrete and other construction materials, their derivatives and related products, including their marketing and sale, in the Republic of Peru and overseas. Likewise, the Company may carry out all manner of mining exploration, prospecting, development, exploitation, commercialization, general labor, benefit and transportation activities; it may also perform all activities concerning the transportation of products in general, materials and toxic waste (including chemical and controlled goods), and enter into all acts and contracts deemed appropriate for fulfilling its corporate purpose, covering activities regarding the purchase, sale, construction, leasing and administration of movable and immovable property, and carry out all civil and commercial acts that are deemed appropriate, including participation in other companies in the Republic of Peru and overseas.

CIIU: 2694

Term: Undefined

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evolution of operations:

1949Founding of the Compañía Nacional de Cementos Portland del Norte.

1957Start of commercial activities of the Compañía Cementos Pacasmayo S.A. with the installation of the first clinker production line completed in 1958.

Clinker production capacity stands at 110,000 metric tons/year.

1966Completion of the installation of the second production line.

Clinker production capacity rises to 303,500 metric tons/year.

1977Installation of line 3.

Clinker production capacity rises to 720,000 metric tons/year (not including line 1).

1994-1995Thanks to technological improvements, line 3 production capacity is expanded to 690,000 metric tons/year, with the capacity of the plant reaching 840,000 metric tons/year.

1998Cement factory in the province of Rioja acquired from the regional government of San Martín.

New company created, called Cementos Pacasmayo S.A.A., resulting from the amalgamation of Cementos Norte Pacasmayo S.A. and Cementos Rioja y Cordasa.

2000Installation of a new vertical mill in the Pacasmayo plant, which increases milling capacity.

Cementos Selva S.A. company incorporated.

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titulo grande capítulo

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2011Installation begins of two new vertical kilns in the Pacasmayo plant.Construction starts on a new production line in the Rioja plant to increase installed capacity by 200,000 metric tons of cement per year to reach 440,000 metric tons/year.

Incorporation of Salmueras Sudamericanas S.A. together with Quimpac, the leading producer of chemical products in Peru, to develop brine products in our combined areas in the coastal zone of Piura in the North of Peru.

Sale in December of a minority holding in the company stock of Fosfatos del Pacífico S.A. to a subsidiary of the Mitsubishi Corporation in order to develop the phosphate deposits in the Bayóvar fields in northwestern Peru.

2001Capacity of the Selva plant expanded to reach 120,000 metric tons/year.

2007Installation of three vertical kilns in the Pacasmayo plant.

2008 Installation of a fourth vertical kiln in the Pacasmayo plant.Clinker production capacity rises to 1,241,000 metric tons/year.Installation begins of a new vertical kiln at the Selva plant with a production capacity of 80,000 metric tons/year.

2009Construction of a new cement silo with a capacity of 11,000 metric tons of cement.

2010Installation of a new cement mill. The milling capacity of the Pacasmayo plant increases by 1,200,000 metric tons/year.Project carried out to convert the Waelz kiln to produce lime, in addition to zinc.

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2013Cementos Pacasmayo S.A.A. issues 10-year international bullet bonds for US $300 million, with a coupon rate of 4.5%. The international rating given by Fitch and S&P was BBB- and BB+ respectively. The placement took place on February 1, 2013, and it generated a demand of more than US $2.5 billion. Environmental Impact Study approval is obtained for the construction of the new cement plant in Piura and construction commences.

2014

In March 2014, the Environmental Impact Assesment (EIA) for the Phosphate Project was approved. This is an important milestone in the development of the project and reflects the Company’s commitment to its execution.

Cementos Pacasmayo was awarded with a special recognition from the Bolsa de Valores de Lima (BVL) for obtaining the highest sustained growth in corporate governance in the last 5 years. Additionally, the Company continues to be a part of the Good Corporate Governance Index (IBGC).

In December 2014, the Environmental Impact Study for the Brine Project was approved by the Ministry of Production.

2012 Cementos Pacasmayo S.A.A. lists its shares on the New York Stock Exchange, becoming the first Peruvian cement company to be listed on this market.

Increase in production capacity of vertical kiln no. 2 which together with the installation of two new horizontal kilns increases installed capacity to 1,500,000 metric tons of clinker.Expansion of new production line in the Cementos Selva plant for a trial period.

Project launched for the development of a new cement plant in Piura.

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Business

desCription of the seCtor:

There are seven cement-producing facilities in this country. Although there is no great difference between these concerning cost of production, producers have competed largely on the periphery of clearly defined market areas owing to the high costs of transport.

The Company’s main production plant is located in the city of Pacasmayo, 96 km north of the city of Trujillo.

In 1998 operations began at the production facility located in the city of Rioja, Department of San Martín, which is currently owned by the subsidiary Cementos Selva S.A.

The Company also owns the subsidiaries Distribuidora Norte Pacasmayo S.R.L. and

Dinoselva Iquitos S.A.C., together with a network of affiliates that distribute a significant proportion of its products.

The other producers/importers of cement in Peru are:

UNACEM S.A.A., who has 2 plants. The main one is located on the outskirts of Lima and it is the largest manufacturer of cement in Peru. The second one is located in the Department of Junín, and mainly serves the central area of the country and a portion of the Departments of Loreto and Ucayali.

Yura S.A., located near Arequipa, mainly serves the South of Peru and the areas bordering Bolivia and Chile.

Cementos Sur S.A., whose plant is located near Juliaca, Puno Department, mainly serves the Andean area in the south of Peru.

Caliza Cementos Inca, located in Cajamarquilla, serves mainly the Lima area. There are, in addition, cement importers who essentially supply the cities of Lima and Iquitos.

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Business

market 2014 2013

Sales of Goods

- National 1,242.58 1,239.69

Product % of sales — 2014 % of sales — 2013

Cement, concrete and blocks 87.3 88.9

Construction supplies 7.7 8.3

lime 4.9 2.6

others 0.1 0.2

net sales of goods (in thousands of soles as of deCember 31, 2014).

produCts by greatest volume of sale

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Business

investment plans or poliCiesThe main projects completed in 2014 include the following:

in pacaSmayoInvestments in 2014 were mainly focused on the operating efficiency of the different lines of production; especially that of line 3 consisting of: el crude 2, coal mills and furnace 3. Moreover, the plant maintenance management system enhancement project was implemented; improvements were made to the de-dusting systems in some critical sections, assets were replaced and key equipment was updated. Furthermore, we continued with the supply of strategic spare parts for cement final milling and bagging sections.

The furnace 3 automation system (SCADA) was updated, the operations automated control system was implemented, the overhead crane

systems for the supply of raw material to the crude and cement mills were reinforced, and the scanners to control the combustion head and shell of furnace 3 were implemented.

Furthermore, we continued investing in quarries, crown ditches and discard stockpiles for the final disposal of residual material generated by quarry operations, in compliance with the legal commitments stated in our environmental documents and closure plans.

With regard to the new cement plant in Piura, the Project’s global accumulated progress in 2014 reached 75%, achieving a 60% progress in the activities of construction and electromechanical assembly, performed by the Cementos Piura consortium made up of JJC Contratistas Generales S.A., SSK Montajes e Instalaciones S.A.C. and JJC Schrader Camargo S.A.C.

in riojaInvestments were focused primarily on the procurement of strategic spare parts for the new line of production inaugurated in 2013, aiming at consolidating its reliability.

Moreover, investments were made for the construction of new warehouses to store bulk raw materials, adapting to the environmental regulations in force.

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Business

prinCipal assets

description 2014 2013

Machinery and Equipment 622,201 607,640

Buildings and Installations 230,041 236,360

Land 217,808 216,804

transportation units 67,629 74,106

Work in Progress and Units Receivable 805,929 300,788

Computer Equipment and Tools 10,252 10,573

Furniture and Appliances 5,514 5,495

Mining Concessions 31,942 28,456

Mine Development Costs 69,660 56,889Total 2,060,976 1,537,111

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Business

human resourCes

dec. 2014 dec. 2013

Executives 33 33

Employees 980 1,074

Workers 485 565TOTAL 1,498 1,672

Permanent Temporary

Executives 31 2

Employees 658 322

Workers 372 113TOTAL 1,061 437

The number of personnel and staff has varied as shown below (data as of December 31 each year):

On the other hand, as of December 31, 2014 the permanent and contracted personnel of the company was as follows:

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Business

neGocio

important faCts

In 2014, critical and key positions of the organization’s staff were identified. This identification is essential when managing development and succession plans, with the purpose of retaining talent and promoting business continuity.

The Programa de Ejecutivo Cumbre (“Summit Executive Program”), a program intended for Grupo Pacasmayo Executives, was launched aiming at ensuring a uniform leadership style that will allow to maintain a productive work environment.

An e-learning platform (E-Pacasmayo) was launched on which various courses can be accessed by all employees. Training rooms were set-up at the plants so that this benefit could also be accessed by workers.

The worker skills and potential assessment process was standardized by implementing the “Nine Box” tool. This allowed to identify potential workers.

judiCial, administrative or arbitration proCeedings

As of December 31, 2014, and as of the issue of this report, we have no knowledge of any proceedings that might have a significant impact on operational results or the financial position of the Company.

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cOmmiTmENT

>

our Commitment with the Country and our

area of influenCe is to Create and strengthen

a soCially favorable environment, prioritizing

our soCial investment in health, eduCation and

loCal development, Coordinating with other

groups of interest to Contribute to sustainable

development , and therefore to the Continuity

and growth of our operations and projeCts.

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administRation

direCtors:

Name Position director since

Eduardo Hochshild Beeck Chairman 03.04.1991Roberto Dañino Zuñiga Vice-Chairman 10.06.2008Rolando Arellano Cueva director 30.03.2011Raimundo Morales Dasso Director 27.03.2008

Humberto Nadal Del Carpio Director 27.03.2008

Moisés Naím Director 19.04.2013

Hilda Ochoa-Brillembourg Director 10.10.2011

Felipe Ortiz de Zevallos Director 25.03.2014

Dionisio Romero Paoletti Director 22.03.2005

Robert P. Bredthauer Alternate Director 28.03.2003

Manuel Ferreyros Peña Alternate Director 27.03.2008

Juan Incháustegui Vargas* Alternate Director 04.08.1995

*Mr. Inchaustegui resigned January 8, 2015

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administRation

eduardo hochSchild BeeckMr. Hochschild has been a Director since April 1991 and is currently Chairman of the Board. He holds a Mechanical Engineering degree from Tufts University, Boston, United States. Mr. Hochschild is also the President of Hochschild Mining plc, Inversiones ASPI S.A. and the Board of Trustees of UTEC and TECSUP, Director of Banco de Crédito del Perú, El Pacífico Peruano-Suiza Compañía de Seguros y Reaseguros, Fosfatos del Pacífico S.A., Salmueras Sudamericanas, Sociedad de Comercio Exterior del Perú (COMEX Perú), and of the National Society of Mining, Petroleum and Energy (Sociedad Nacional de Minería, Petroléo y Energía). Mr. Hochschild is also an expert consultant of the Economic Counsel of the Episcopal Conference.

roBerto dañino ZapataMr. Dañino has been a Director since 1995. In July 2001 he resigned from the Board of Directors to take office as Prime Minister of the Peruvian Government, before rejoining the Board in June 2008. He is an attorney-at-law graduated from the schools of Law of Harvard University and Pontificia Universidad Católica del Perú. He has served as Ambassador of Peru to the United States and Senior Vice-President and General Counsel of the World Bank. He has also been Partner and Chairman of the Latin American Practice at Wilmer Cutler & Pickering, Washington D.C. (now Wilmer Hale). He is currently Vice-Chairman of the Board of Directors of Hochschild Mining plc, and Chairman of Fosfatos del Pacífico S.A. In Addition, he is Independent Director of Inversiones Centenario, PetroNova, Results for

Development, LUMNI, Open Society Foundation, and ACCION International, among others.

rolando arellano cueva Mr. Arellano has been a Director since March 2011. He holds a PhD in Business Administration from Grenoble University, France, a Master’s in Business Administration from ESAN and a degree in Psychology from Pontificia Universidad Católica del Perú. He is Chairman of the Board of Arellano Investigación de Marketing S.A., a company with operations in various Latin American countries, He is a professor at Centrum Católica (Universidad Católica del Peru Business School) and has taught at numerous universities in the region. He was Chairman of the Marketing Department and Director of the Master in International Business Program at Laval University, Quebec, Canada,

direCtors:

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Chairman of the Peruvian Marketing Society and is the author of 17 books on business and marketing in emerging economies. Independent Director.

raimundo moraleS daSSoMr. Morales has been a Director since March 2008. He holds a Bachelor’s degree in Economics and Business Administration from Universidad del Pacífico and a Master’s in Business Administration from Wharton Business School, University of Pennsylvania, Untied States. Mr. Morales was the Chief Executive Officer of Banco de Crédito del Perú from November 1990 through March 2008. Currently, he is Chairman of the Board of Salmueras Sudamericanas S.A. and Atlantic Security Bank, Vice Chairman of the Board of Credicorp Ltd., Banco de Crédito del Peru and El Pacífico Peruano-Suiza Compañía de Seguros y Reaseguros. He is a member of the Board of Directors of Pacífico Vida Seguros, Alicorp S.A.A., Grupo Romero, Cerámica Lima S.A., Trébol Corporación Cerámica S.A., JJC Contratistas Generales and a Board member of the Peruvian Institute of Economics.

humBerto nadal del carpioMr. Nadal joined our company as Corporate Development Manager in June 2007 and has served as our Director since March 2008 and Chief Executive Officer since April 2011. He has a Bachelor’s degree in Economics from Universidad del Pacífico and a Master’s degree in Business Administration from Georgetown University. He is the representative of Cementos Pacasmayo in the General Management of IPSA, Fosfatos del Pacífico S.A. and Salmueras Sudamericanas S.A. He has also been Chairman of the Board of Directors of Fondo Mivivienda. In April 2006, he joined Compañía Minera Ares S.A.C. (a subsidiary of Hochschild Mining plc) as Corporate Development Manager. Mr. Nadal has also served as Business, Administration and Finance Manager ot the Instituto Libertad y Democracia and Chief Executive Officer at Socosani S.A.

moiSéS naímMoises Naím has been a Director since April 2013. He is currently a Distinguished Fellow at the Carnegie Endowment for International

Peace in Washington, D.C. He is author of more than ten books on international economics and politics, and one of the most widely read columnists in the Spanish language. His weekly columns are published by newspapers from Latin American and from around the world. His most recent book, El fin del Poder (“The End of Power”) has been translated into 10 languages. In 2011 he was awarded the Ortega y Gasset prize and in 2013 Naím was included in British magazine Prospect’s list of the world’s most renowned intellectuals. In 2014 he was recognized as one of the most influential thinkers by the Swiss Gottlieb Duttweiler Institute for The End of Power. Naím was the editor of the Foreign Policy magazine for fourteen years. During this time he won the national excellence prize granted by the Association of American Publishers. Naím’s public service includes his tenure as Venezuela’s Minister of Trade and Industry in the early 1990s, director of Venezuela’s Central Bank, and executive director of the World Bank. He is the founder and Chairman of the Board of both the Group

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of Fifty, and member of the board of directors of the National Endowment for Democracy and Open Society Foundations. Moisés Naím received his master and doctorate degree from the Massachusetts Institute of Technology, and lives in Washington, D.C.

hilda ochoa-BrillemBourgMrs. Ochoa-Brillembourg was appointed as a Director of Cementos Pacasmayo S.A.A. in October 2011. She holds a Bachelor of Science degree in Economics from Universidad Católica Andres Bello of Venezuela, a Master’s degree in Public Administration and is a Business Administration PhD candidate from Harvard Business School. She is the founder, and since 1987, President and Executive Director, of Strategic Investment Group and a group of affiliated investment management firms. In 2014 she was appointed Chairperson of the Board of Directors. From 1976 to 1987, she was Chief Investment Officer of the Pension Investment Division at the World Bank. Mrs. Ochoa- Brillembourg is on the Board of Directors of General Mills, where she is also a member of

the audit and public responsibility committees, and McGraw-Hill, where she is also a member of its audit and financial policy committees. Independent Director.

felipe ortiZ de ZevalloSMr. Ortiz de Zevallos studied at the Universidad Nacional de Ingeniería in Lima, at the University of Rochester in New York and at Harvard Business School. He is the founder and chairperson of the Grupo de Apoyo since 1977. He has served as Ambassador of Peru to the United States (2006 - 2009) where he was responsible with the US Congress’ approval of the Free Trade Agreement between both countries. He has been a full professor at Universidad del Pacifico and served as said university’s President from 2004 a 2006. He is currently a board member of various companies and non-profit organizations. He has received numerous awards, such as the IPAE Award in 1990, the Journalism Jerusalem Prize in 1998 and the Manuel J. Bustamante de la Fuente Award in 2008. In 2009, the Lima Chamber of Commerce paid tribute to Mr. Ortiz de Zevallos for this contributions to the social and economic

development of Peru, and in 2011 the Ministry of Economy and Finance awarded him with the “Hipólito Unanue” award for his contributions to the country’s economic and financial development.

dioniSio romero paolettimr. romero has been a director since march 2005. He holds a degree in Economics from Brown University and a Master´s degree in Business Administration from Stanford University. He is the Chairman of the Board of Credicorp and Banco de Crédito del Perú-BCP, and the Executive Chairman of Credicorp since 2009, and Board Director of BCP since 2003, and was appointed Vice Chairman in 2008 and Chairman in 2009. He is also the Chairman of the Board of Banco de Crédito de Bolivia, Pacífico Peruano Suiza Cía. de Seguros y Reaseguros S.A., El Pacífico Vida Cía. de Seguros y Reaseguros S.A., Alicorp S.A.A., Ransa Comercial S.A., Industrias del Espino S.A., Palmas del Espino S.A., Agrícola del Chira S.A., among others. Furthermore, he is Vice-Chairman of the Board of Inversiones Centenario S.A. and Director of Banco de

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Crédito e Inversiones - BCI, and Hermes Transportes Blindados S.A.

roBert patrick BredthauerMr. Bredthauer has been an alternate director since March 2003. He has a degree in Business Administration from Hochschule St. Gallen and a commerce degree from the École Supérieure de Commerce, La Neuveville, and the École Supérieure de Commerce, Lausanne, both in Switzerland. Since 1976, he acted as Vice-President of Finance and Executive Vice-President of Cemento Nacional C.A. (Guayaquil, Ecuador) and prior to that was the regional Controller for Holderbank Management and Consulting in Nyon, Switzerland. Independent Alternate Director.

manuel ferreyroS peñaMr. Ferreyros has been an alternate director since March 2008 and our Chief Financial Officer since January 2008. He is an alternate member of the Board of Directors of Fosfatos del Pacífico S.A. Mr. Ferreyros has a Bachelor´s degree in

Business Administration from Universidad de Lima, a Multinational MBA at the Adolfo Ibañez School of Management, Miami and a Master’s in Business Administration from The College of Insurance in New York. Mr. Ferreyros has pursued the Advanced Management Program at Instituto Centroamericano de Administración de Empresas - INCAE and the CEO Management Program at Kellogg University, among others. Prior to joining Cementos Pacasmayo, Mr. Ferreyros was Chief Executive Officer of La Positiva Seguros y Reaseguros. Alternate Director.

juan incháuStegui vargaSMr. Inchaustegui was director since August 1995. He has a degree in Mechanical and Electric Engineering from Universidad Nacional de Ingeniería and he has attended the Advanced Management Program at the Universidad de Piura. Mr. Inchaustegui was the Peruvian Minister of Energy and Mines from March 1984 to July 1985, the Minister of Industry, Tourism, Integration and Trade Negotiations from February to July 2001, and he also served as a Senator

of the Republic of Peru from 1990 to 1992. He was the Chief Executive Officer of Electroperú S.A., President of Asociación Promotora TECSUP and as President of the Academy of Engineering, of which he is still a member

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and is its representative in the Innovation for Competitiveness Project at the National Science and Technology Council (CONCYTEC).

management teamboard Committees

executive committeeOur Executive Committee is mainly responsible for (i) supervising and supporting our management in executing the resolutions passed by our board of directors, (ii) executing the strategy approved by our board of directors, (iii) meeting short-term and medium-term goals, as well as designing action plans to meet such goals in accordance with the long-term strategy and goals approved by our board of directors, (iv) approving agreements or transactions involving amounts greater than US$3 million but less than US$20 million, (v) monitoring compliance with the annual budget and approving any significant deviations from approved levels of working capital, (vi) making strategic decisions that do not rise to the level of a full board approval, and (vii)

approving and executing new projects in amounts up to US$20 million.

audit committeeThe audit committee is responsible for reviewing our financial statements; evaluating our internal controls and procedures, and identifying deficiencies; the appointment, compensation, retention and oversight of our external auditors. Additionally, it is responsible for informing our board of directors regarding any issues that arise with respect to the quality or integrity of our financial statements, our compliance with legal or regulatory requirements, the performance and independence of the external auditors, or the performance of the internal audit function; and overseeing measures adopted as a result of any observations made by our shareholders, directors, executive officers, employees or any third parties with respect to accounting, internal controls and internal and external audit, as well as any complaints regarding management irregularities, including anonymous and confidential methods for addressing concerns raised by employees.

antitruSt BeSt practiceS committeeThe Antitrust Best Practices Committee is responsible for informing our employees about our competition best practices and for monitoring compliance with such practices, including compliance with antitrust regulations.

corporate governance committeeThe Corporate Governance Committee is responsible for assisting the Board on its oversight of the Director nomination and Committee assignments, as well as the Board and CEO successions. Similarly, it is responsible for assisting in the implementation of the committee and board self-assessment surveys and the review of governance principles.

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perCentage of total remuneration reCeived by members of the board of direCtors and the management team with respeCt to gross revenue

2014 2013 2012

Directors 0.4 0.5 0.4Management 1.7 1.8 1.8Total 2.1 2.3 2.3

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management team

chief executive officerHumberto Reynaldo Nadal Del CarpioSee “List of Directors”

chief financial officerManuel Ferreyros PeñaSee “List of Directors”

general counSelJavier Durand PlanasJavier Durand joined the Hochschild Group in 1994. He has been our General Counsel since 2008 and has previously held the title of General Counsel at Hochschild Mining plc. Mr. Durand holds a Law degree from Universidad de Lima (Peru), and a Master’s in Business Administration from Universidad del Pacífico (Peru). Among other studies, he has also completed the Management Program for Lawyers and Corporate Governance and Performance Program at the Yale School of Management.

Mr. Durand is also currently a board member of Salmueras Sudamericanas S.A., Inversiones ASPI S.A. and Cementos Selva S.A., and the Board of Trustees of UTEC.

vice-preSident, cement BuSineSSCarlos Julio Pomarino PezziaMr. Pomarino is our Vice President Cement Business since April 2009. He has a degree in Economic Engineering from Universidad Nacional de Ingeniería and a Master’s in Business Administration from Adolfo Ibañez School of Management and ESAN and pursued the Advanced Management Program at the Universidad de Piura. He served as Commercial Officer of the Company from 2002 to 2009 and as Chief Executive Officer of Distribuidora Norte Pacasmayo S.R.L. from 1998 to 2009. Prior to joining the Company, Mr. Pomarino worked as Administration and Finance Manager at Comercializadora de Alimentos S.A. and as Chief Financial Officer at Fábrica de Tejidos San Jacinto S.A.

corporate development manager Joaquín Larrea GubbinsMr. Larrea has been our Corporate Development Manager since June 2011. He has a degree in Business Administration from Universidad de Lima and a Master’s in Business Administration from the Kellogg School of Management. In the past, Mr. Larrea worked as Corporate Development Director of General Electric for Peru, Ecuador and Bolivia. He served as our Zinc Business Manager for a year and as our Corporate Finance Head for five years.

corporate Social reSponSiBility manager Carlos Paúl Cateriano AlzamoraMr. Cateriano has been our Corporate Social Responsibility Manager since June 2012. Previously, he was our Human Resources Manager from 2006 to 2012 He studied in Mechanical Engineering at the Pontificia Universidad Católica del Peru and has pursued different studies in the Advanced Management Program at the Universidad de Piura. Prior to

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joining our company, Mr. Cateriano worked as Human Resources Deputy Manager at Banco Wiese Sudameris S.A. (acquired by Scotiabank Perú S.A.A.) from 1999 to 2006. In addition, he has worked as Head of Training at Banco Santander Perú S.A., and as a consultant at Polimeros y Adhesivos S.A.

engineering and infraStructure manager, cement BuSineSS Rodolfo Ricardo Jordán MussoMr. Jordan has been our Engineering and Infrastructure Manager since January 2015. Previously he was Industrial Development Manager. He has a degree in Civil Engineering from Universidad Católica del Perú and pursued an Advanced Management Program at the Universidad de Piura. Prior to joining the Company he served as Chief Executive Officer of the Mexican affiliate of Graña & Montero Ingenieros Consultores. From 2007 through 2009 he served as Marketing Manager of Distribuidora Norte Pacasmayo S.R.L.

engineering and projectS manager, cement BuSineSS Juan Guillermo Teevin VásquezMr. Teevin has been our Engineering and Projects Manager for the Cement Business since June 2012. He has a degree in Mechanical Engineering from Universidad Nacional de Ingeniería and has pursued different studies in the Advanced Management Program at the Universidad de Piura, as well as Multinational MBA at the Adolfo Ibañez School of Management, Miami. Mr. Teevin was Operations Manager for the Company from June 2005 to May 2012.

operationS manager, pacaSmayo and rioja cement plant Hugo Pedro Villanueva CastilloMr. Villanueva has been our Operations Manager for the Pacasmayo and Rioja cement plant since January 2012. Previously he was Operations Manager for Cementos Selva S.A. for over 9 years. Furthermore, Mr. Villanueva has worked at our Company for over 20 years,

holding different positions. Mr. Villanueva holds a Master’s degree in Business from EGADE and has taken coursework at the General Management Program at PAD, Universidad de Piura and Program for Senior Management at iNCae in Costa rica.

manager for the piura projectAlfredo Romero UmlauffMr. Romero is our Manager for the Piura Project since May 2013. He has over 36 years of experience in the construction industry as well as in the areas of Project Management, Cost and Planning and Management. He is a Civil Engineer by the Pontifica Universidad Catolica del Peru, and has conducted several studies in the Advanced Management Program at the Universidad de Piura. Prior to joining our company, Mr. Romero worked as Deputy CEO at JJC Contratistas General, CEO of Metalúrgica Peruana S.A, CEO of Union de Concreteras S.A., among others. He has been a speaker at various international conferences and co-authored

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publications related to the treatment of ready-mix concrete. In 2013 Mr. Romero was honored with the Distinguished Graduate award by the Alumni and Graduate Association of the PUCP for his efforts in promoting and developing single-family and multi-family housing projects with integral reinforced concrete.

Supply chain managerDiego Reyes PazosMr. Reyes has been the Central Supply Chain Manager since July 2013. He has

solid experience in the supply chain, project development, design and implementation of systems/processes and financial analysis. He graduated with a degree in Business Administration from the University of Lima and received an MBA from the University of Piura. Before joining our company, Mr. Reyes worked as Operations and Finance Manager at Belcorp, as Senior Business Process Expert for Latin America at SAB Miller, Project Manager in the Vice Presidency of Supply Chain at UCP Backus & Johnston, among others.

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Financial inFoRmation

a) liQuidity: b) Capital and finanCing:

Liquidity ratios 2014 2013

Current ratio (Current assets / Current liabilities)

5.17 9.0

Acid test (Cash — banks & accounts. Receivable / Current liabilities)

3.45 6.6

debt-to-Equity Ratio 2014 2013

Total Liabilities / Total Assets 0.36 0.35

Total Net Assets / Total Assets 0.64 0.65

The current ratio decreased from 9.0 in 2013 to 5.17 in 2014. This decrease was primarily due to the decrease in cash for the implementation of the Piura Project.

The acid test or ratio fell from 6.6 in 2013 to 3.45 in 2014, mainly due to the decrease in cash for the implementation of the Piura Plant Project.

The proportion of assets financed by third parties in 2014 remained similar to that of 2013.

The 2014 Net Worth/Assets ratio remained similar to that of 2013.

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C) eConomiC results:

Profit Ratios 2014 2013

Gross Margin 41.72% 42.22%

Operating Margin 24.19% 23.63%

Net margin 15.19% 12.28%

The gross margin for 2014 decreased slightly with respect to 2013, primarily due to a lower dilution of fixed costs in the concrete sector as a consequence of lower production. The operating and net margins increased in 2014 compared to 2013 mainly due to a reduction in operating expenses as well as a loss resulting from the Exchange rate difference.

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monthly share priCes of Cementos paCasmayo on the bolsa de valores de lima (bvl — lima stoCk exChange)Common and Investment Shares:Mnemonic: CPACASC1 – CPACASI1

CEMENTOS PACASMAYO S.A.A.Variable Income

ISIN Code Nemonic Year - Month PRICES 2014 Average Price S/.

Open S/. Close S/. Highest S/. Lowest S/.

PEP239501005 CPaCasC1 2014-01 6.35 5.46 6.50 5.30 6.04PEP239501005 CPaCasC1 2014-02 5.47 5.30 5.47 5.19 5.34PEP239501005 CPaCasC1 2014-03 5.28 4.90 5.38 4.88 5.05PEP239501005 CPaCasC1 2014-04 4.95 5.15 5.32 4.95 5.19PEP239501005 CPaCasC1 2014-05 5.15 4.90 5.18 4.89 4.95PEP239501005 CPaCasC1 2014-06 4.90 4.73 5.05 4.70 4.89PEP239501005 CPaCasC1 2014-07 4.76 4.98 5.20 4.76 5.01PEP239501005 CPaCasC1 2014-08 5.00 5.30 5.35 4.70 5.13PEP239501005 CPaCasC1 2014-09 5.30 5.18 5.50 5.13 5.29PEP239501005 CPaCasC1 2014-10 5.05 5.30 5.35 4.70 5.13PEP239501005 CPaCasC1 2014-11 5.20 5.08 5.21 4.90 5.14PEP239501005 CPaCasC1 2014-12 5.05 5.30 5.39 5.04 5.32PEP239501006 CPaCasi1 2014-01 4.00 3.90 4.00 3.90 3.93PEP239501006 CPaCasi1 2014-02 - - - - -PEP239501006 CPaCasi1 2014-03 3.40 3.40 3.40 3.40 3.40PEP239501006 CPaCasi1 2014-04 3.10 3.10 3.10 3.10 3.10PEP239501006 CPaCasi1 2014-05 - - - - -PEP239501006 CPaCasi1 2014-06 2.80 2.80 2.80 2.80 2.80PEP239501006 CPaCasi1 2014-07 2.75 2.80 2.80 2.75 2.78PEP239501006 CPaCasi1 2014-08 2.81 2.81 2.81 2.81 2.81PEP239501006 CPaCasi1 2014-09 - - - - -PEP239501006 CPaCasi1 2014-10 - - - - -PEP239501006 CPaCasi1 2014-11 2.50 2.50 2.50 2.50 2.50PEP239501006 CPaCasi1 2014-12 2.50 2.50 2.50 2.50 2.50

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monthly share priCes of Cementos paCasmayo on the new york stoCk exChange (nyse)information for fisCal year 2014 in usdadrsMnemonic: CPAC

PRicEs 2014

year - month Open Usd

close Usd

maximum Usd

minimum Usd

2014-1 11.79 9.58 12.38 9.19

2013-2 9.54 9.48 9.72 9.09

2013-3 9.34 8.76 9.54 8.50

2013-4 8.82 9.05 9.85 8.79

2013-5 9.01 9.08 9.20 8.55

2013-6 9.05 8.43 9.36 8.15

2013-7 8.45 8.91 9.93 8.24

2013-8 9.23 9.37 9.59 8.84

2014-9 9.30 8.96 9.56 8.82

2014-10 8.94 9.00 9.59 7.92

2014-11 9.07 8.48 9.08 8.33

2014-12 8.45 8.73 9.04 8.14

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fiNANciAL sTATEmENTs

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cementoS pacaSmayo S.a.a. and SuBSidiarieSconSolidated financial StatementS aS of decemBer 31, 2014 and 2013 together with the independent auditorS´ report

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Independent Auditors´ Report Consolidated financial statements Consolidated statements of financial position Consolidated statements of profit or loss Consolidated statements of other comprehensive income Consolidated statements of changes in equity Consolidated statements of cash flows

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indePendent auditoRs´ RePoRt

Independent Auditors´ Report

Inscrita en la partida 11396556 del Registro de Personas Jurídicas de Lima y Callao Miembro de Ernst & Young Global

Paredes, Zaldívar, Burga & AsociadosSociedad Civil de Responsabilidad Limitada

To the Board of Directors and Shareholders of Cementos Pacasmayo S.A.A. and Subsidiaries

We have audited the accompanying consolidated financial statements of Cementos Pacasmayo S.A.A. and its subsidiaries (together the “Group”), which comprise the consolidated statements of financial position as of December 31, 2014 and 2013, and the related consolidated statements of profit or loss, other comprehensive income, changes in equity and cash flows for each of the three years ended December 31, 2014, and a summary of significant accounting policies and other explanatory information.

Management’s responsibility for the consolidated financial statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards, and for such internal control as Management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatements, whether due to fraud or error.

Auditor’s responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with International Auditing Standards approved for its application in Peru by the Peruvian Board of Public Accountants Associations. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by Management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Independent Auditors´ Report (continued)

Opinion

In our opinion, the consolidated financial statements referred to above, present fairly, in all material respects, the consolidated financial position of Cementos Pacasmayo S.A.A. and subsidiaries as of December 31, 2014 and 2013 and its financial performance and cash flows for the three years ended December 31, 2014, in accordance with International Financial Reporting Standards.

Lima, Peru,February 13, 2015

Signed by:

Carlos Valdivia ValladaresC.P.C.C. Register No.27255

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consolidated statements oF Financial PositionaS oF December 31, 2014 anD 2013

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2014S/.(000)

2013S/.(000)

Asset

current assets

Cash and term deposits 580,499 976,952

Trade and other receivables 110,843 68,542

Income tax prepayments 15,042 27,679

Inventories 324,070 334,471

Prepayments 4,367 11,7271,034,821 1,419,371

Non-current assets

Other receivables 53,948 46,292

Prepayments 2,268 -

Available-for-sale financial investments 744 36,058

Other financial instruments 12,251 -

Property, plant and equipment 2,060,976 1,537,111

Exploration and evaluation assets 57,740 59,330

Deferred income tax assets 17,175 15,155

other assets 981 1,220

2,206,083 1,695,166

Total asset 3,240,904 3,114,537

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consolidated statements oF Financial PositionaS oF December 31, 2013 anD 2012

2014S/.(000)

2013S/.(000

Liability and equity

current liabilities

Trade and other payables 137,569 126,897

Income tax payable 8,720 2,780

Provisions 53,826 27,984200,115 157,661

Non-current liabilities

Interest-bearing loans and borrowings 883,564 824,022

Other non-current provisions 657 20,497

Deferred income tax liabilities 85,883 102,887970,104 947,406

Total liability 1,170,219 1,105,067

Equity

Capital stock 531,461 531,461

Investment shares 50,503 50,503

Additional paid-in capital 553,791 556,294

Legal reserve 154,905 119,833

Other reserves 5,144 19,045

Retained earnings 696,736 653,704

Equity attributable to equity holders of the parent

1,992,540 1,930,840

Non-controlling interests 78,145 78,630Total equity 2,070,685 2,009,470

Total liability and equity 3,240,904 3,114,537

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consolidated statements oF PRoFit oR lossFor the yearS enDeD December 31, 2014, 2013 anD 2012

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2014S/.(000)

2013S/.(000)

2012S/.(000)

Sales of goods 1,242,579 1,239,688 1,169,808

Cost of sales (724,148) (716,239) (713,058)gross profit 518,431 523,449 456,750

Operating income (expenses)

Administrative expenses (194,855) (208,915) (203,067)Selling and distribution expenses (30,534) (29,817) (30,865)Net gain on sale of available-for-sale financial investment 10,537 - -Other operating income, net (3,040) 8,281 7,706Total operating expenses, net (217,892) (230,451) (226,226)

Operating profit 300,539 292,998 230,524

Other income (expenses)

Finance income 11,705 27,213 23,326Finance costs (31,196) (37,103) (23,771)Loss from exchange difference, net (14,791) (48,430) (736)Total other expenses, net (34,282) (58,320) (1,181)

Profit before income tax 266,257 234,678 229,343Income tax expense (77,468) (82,395) (73,743)

Profit for the year 188,789 152,283 155,600

Attributable to:Equity holders of the parent 192,827 155,634 159,005Non-controlling interests (4,038) (3,351) (3,405)

188,789 152,283 155,600

Earnings per shareBasic and diluted, profit for the year attributable to equity holders of common shares and investment shares of the parent (S/. per share)

0.33 0.27 0.28

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consolidated statements oF otheR comPRehensive incomeFor the yearS enDeD December 31, 2014, 2013 anD 2012

2014S/.(000)

2013S/.(000)

2012S/.(000)

Profit for the year 188,789 152,283 155,600

Other comprehensive income

Other comprehensive income to be reclassified to profit or loss in subsequent periods (net of income tax):

Change in fair value of available-for-sale financial investments (16,378) 1,171 12,813

Net gain on cash flows hedges 4,926 - -

Deferred income tax related to component of other comprehensive income 8,088 (352) (3,844)

Exchange differences on translation of foreign currency - - (321)

Transfer to profit or loss of fair value of available-for-sale financial investments sold (10,537)

Transfer to profit or loss of cumulative exchange differences on translation of foreign currency, note 2.3.3

1,591

Other comprehensive income for the year, net of income tax (13,901) 2,410 8,648

Total comprehensive income for the year, net of income tax 174,888 154,693 164,248

Total comprehensive income attributable to:

Equity holders of the parent 178,926 157,968 167,687

Non-controlling interests (4,038) (3,275) (3,439)

174,888 154,693 164,248

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Attributable to equity holders of the parentCapital

stockInvestment

sharesAdditional

paid-in capital

Legalreserve

Unrealized gain (loss)

on available-for-sale

investments

Unrealized gain on cash

flow hedge

Foreign currency

translation reserve

Retained earnings

Total Non-con-trolling

interests

Total equity

S/.(000) S/.(000) S/.(000) S/.(000) S/.(000) S/.(000) S/.(000) S/.(000) S/.(000) S/.(000) S/.(000)

Balance as of January 1, 2012 418,777 49,575 - 90,451 9,257 - (1,228) 473,721 1,040,553 33,032 1,073,585

Profit for the year - - - - - - - 159,005 159,005 (3,405) 155,600

Other comprehensive income - - - - 8,969 - (287) - 8,682 (34) 8,648

- - - - 8,969 (287) 159,005 167,687 (3,439) 164,248

Total comprehensive incomeProceeds from the issue of common and investment shares, note 16 (a) y (b) 111,484 928 561,191 - - - - - 673,603 - 673,603

Appropriation of legal reserve, note 16 (e) - - - 14,770 - - - (14,770) - - -

Dividends, note 16 (h) - - - - - - - (52,000) (52,000) - (52,000)

Contribution of non-controlling interests, note 16(i) - - - - - - - - - 28,557 28,557

Sale of treasury shares, note 16 (c) 1,200 - - - - - - 4,922 6,122 - 6,122

Other adjustments of non-controlling interests, note 16(i) - - (2,713) - - - - - (2,713) 2,713 -

Balance as of december 31, 2012 531,461 50,503 558,478 105,221 18,226 - (1,515) 570,878 1,833,252 60,863 1,894,115


Other comprehensive income - - - - 819 - 1,515 - 2,334 76 2,410

Total comprehensive income - - - - 819 - 1,515 155,634 157,968 (3,275) 154,693

Refund of capital in subsidiary to non-controlling interests, note 22 (a) - - - - - - - - - (1,024) (1,024)

Appropriation of legal reserve, note 16(e) - - - 14,612 - - - (14,612) - - -

Dividends, note 16 (h) - - - - - - - (58,196) (58,196) - (58,196)



Balance as of december 31, 2013 531,461 50,503 556,294 119,833 19,045 - - 653,704 1,930,840 78,630 2,009,470


Other comprehensive loss - - - - (18,827) 4,926 - - (13,901) - (13,901)

Total comprehensive income - - - - (18,827) 4,926 - 192,827 178,926 (4,038) 174,888

Appropriation of legal reserve, note 16(e) - - - 33,402 - - - (33,402) - - -

Terminated dividends, note 16(h) - - - 1,670 - - - - 1,670 - 1,670

Dividends, note 16 (h) - - - - - - - (116,393) (116,393) - (116,393)



Balance as of december 31, 2014 531,461 50,503 553,791 154,905 218 4,926 - 696,736 1,992,540 78,145 2,070,685

consolidated statements oF chanGes in equityFor the yearS enDeD December 31, 2014, 2013 anD 2012

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consolidated statements oF cash Flows For the yearS enDeD December 31, 2014, 2013 anD 2012

2014S/.(000)

2013S/.(000)

2012S/.(000)

Operating activities

Profit before income tax 266,257 234,678 229,343

Non-cash adjustments to reconcile profit before income tax to net cash flows

Depreciation and amortization 64,759 55,871 47,954

Finance costs 31,196 37,103 23,771

Unrealized exchange difference related to monetary transactions 19,143 48,486 -

Net loss (gain) on disposal of property, plant and equipment 6,466 2,555 (3,901)

Long-term incentive plan 5,944 6,701 5,529

Amortization of costs of issuance of senior notes 1,644 1,493 -

Adjustment as a result of physical inventories 1,069 3,360 (4,107)

Unwinding of discount of long-term incentive plan 598 475 140

Other operating, net (399) (1,405) (311)

Finance income (11,705) (27,213) (23,326)

Net gain on sale of available-for-sale investment (10,537) - -

(Recovery) provision of impairment of inventories, net (453) (2,192) 3,278

Estimation of impairment of trade and other accounts receivables (43) 227 105

Change in the estimation of rehabilitation costs - (1,068) -

Write-off of exploration and evaluation costs - - 2,447

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2014S/.(000)

2013S/.(000)

2012S/.(000)

Working capital adjustments

(Increase) decrease in trade and other receivables (54,814) (19,993) 17,224

Decrease (increase) in prepayments 9,777 (1,111) 1,013

Decrease (increase) in inventories 9,785 (57,490) (71,218)

Increase (decrease) in trade and other payables 12,486 (20,277) 2,411

351,173 260,200 230,352

Interests received 12,612 37,650 7,514

Interests paid (41,820) (20,704) (26,412)

Income tax paid (69,827) (85,392) (111,723)

Net cash flows from operating activities 252,138 191,754 99,731

investing activities

Purchase of property, plant and equipment (586,554) (200,599) (248,194)

Purchase of exploration and evaluation assets (690) (9,844) (22,038)

Proceeds from sale of other assets - (151) -

Proceeds from sale of available for sale investment 18,936 - -

Proceeds from sale of property, plant and equipment 3,061 1,161 6,828

Liquidation of time deposits with original maturities greater than 90 days - 1,065,950 -

Acquisition of time deposits with original maturities greater than 90 days - (662,000) (403,950)Net cash flows from (used in) investing activities (565,247) 194,517 (667,354)

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2014S/.(000)

2013S/.(000)

2012S/.(000)

financing activities

Dividends paid (115,824) (58,093) (52,016)

Contribution of non-controlling interests 1,050 19,882 28,557

Proceeds from issuance of senior notes, net of related issuance costs - 762,067 -

Proceeds from bank overdraft and borrowings - 19,914 13,255

Payment of borrowings - (202,200) (388,394)

Payment of bank overdraft - (33,169) -

Refund of capital in subsidiary to non-controlling interests - (1,024) -

Proceeds from issuance of common and investment shares - - 666,180

Proceeds from sale of treasury shares - - 6,122

Net cash flows from (used in) financing activities (114,774) 507,377 273,704

Net increase (decrease) in cash and cash equivalents (427,883) 893,648 (293,919)

Net foreign exchange difference 31,430 13,469 475

Cash and cash equivalents as of January 1 976,952 69,835 363,279

cash and cash equivalents as of december 31 580,499 976,952 69,835

Net cash flows from (used in) investing activities (565,247) 194,517 (667,354)

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> Cementos paCasmayo s.a.a

calle la colonia 150urBaniZación el viveroSantiago de Surcolima. perút. (511) 317 6000

Diseño y DiagramaCiónDesign:

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