Corporacion Azucarera del Per´u S.A. - smv.gob.pe - Final Offering... · Corporacion Azucarera del...

16JUL201201162235

OFFERING MEMORANDUM

US$325,000,000

Corporacion Azucarera del Peru S.A.6.375% Senior Notes due 2022

Unconditionally and Irrevocably Guaranteed byCertain of its Operating Subsidiaries

We are offering US$325,000,000 aggregate principal amount of our 6.375% senior notes due 2022 (the ‘‘notes’’). The noteswill mature on August 2, 2022. Interest on the notes will accrue at a rate of 6.375% per annum and will be payable semi-annuallyin arrears on each February 2 and August 2 of each year, commencing on February 2, 2013.

We may redeem the notes, in whole or in part, subject to a minimum float condition, at any time on or after August 2, 2017 atthe applicable redemption prices set forth in this offering memorandum, plus accrued and unpaid interest and any Additional Amounts.Before August 2, 2017, we may also redeem the notes, in whole or in part, subject to a minimum float condition, at a redemption pricebased on a ‘‘make-whole’’ premium. In addition, at any time prior to August 2, 2015, we may redeem up to 35% of the notes at aredemption price equal to 106.375% of their outstanding principal amount, plus accrued and unpaid interest and any AdditionalAmounts, using the proceeds of certain equity offerings. We may also redeem the notes, in whole but not in part, if certain changes inapplicable tax laws occur. See ‘‘Description of the Notes—Optional Tax Redemption.’’

The notes will be our senior unsecured obligations. The notes will be unconditionally, irrevocably and fully guaranteed on asenior unsecured basis by one of our wholly-owned subsidiaries and two of our partially-owned subsidiaries, and unconditionally,irrevocably and partially guaranteed by another one of our partially-owned subsidiaries for an initial amount equal toUS$162,500,000, as subsequently adjusted as provided in ‘‘Description of the Notes—Note Guarantees’’ and ‘‘—Principal,Maturity and Interest.’’ The notes and the related guarantees: (i) will rank equally with all of our and the subsidiary guarantors’respective existing and future unsecured and unsubordinated indebtedness, other than with respect to certain obligations givenpreferential treatment pursuant to the laws of Peru; (ii) will be effectively subordinated to all of our and the subsidiaryguarantors’ respective existing and future secured indebtedness to the extent of the assets securing such indebtedness; (iii) will bestructurally subordinated to the existing and future indebtedness and other liabilities of our subsidiaries which are not guarantorsand with respect to the partial guarantor, to the extent that any obligations under the notes exceed US$162,500,000, assubsequently adjusted as provided in ‘‘Description of the Notes—Note Guarantees’’ and ‘‘—Principal, Maturity and Interest’’ and(iv) will not provide holders with any direct claims on the assets of any non-guarantor unless or until such entity becomes aguarantor.

Application has been made to the Irish Stock Exchange for the approval of this document as Listing Particulars.Application has been made to the Irish Stock Exchange for the notes to be admitted to the Official List and to trading on theGlobal Exchange Market which is the exchange regulated market of the Irish Stock Exchange. The Global Exchange Market isnot a regulated market for the purposes of Directive 2004/39/EC.

Investing in the notes involves risks. See ‘‘Risk Factors’’ beginning on page 17.

Price: 99.091% plus accrued interest, if any, from August 2, 2012.

We have not and will not register the notes and the guarantees under the U.S. Securities Act of 1933, as amended (the‘‘Securities Act’’) or under any state securities laws. Prospective purchasers that are qualified institutional buyers are herebynotified that the sellers of the notes may be relying on an exemption from the provisions of Section 5 of the Securities Actprovided by Rule 144A under the Securities Act. Outside the United States, the offering is being made in reliance onRegulation S under the Securities Act. See ‘‘Transfer Restrictions.’’

We have registered the notes and this offering memorandum with the Peruvian Superintendency of the Securities Market(Superintendencia del Mercado de Valores, or ‘‘SMV’’). In Peru, this offering will be considered a public offering directed exclusively to‘‘institutional investors’’ (as such term is defined under the Seventh Final Disposition of CONASEV Resolution No. 141-98-EF/94.10.1).In addition, we have registered the notes with the Foreign Investment and Derivatives Instruments Registry (Registro de Instrumentos deInversion y de Operaciones de Cobertura de Riesgo Extranjeros) of the Peruvian Superintendency of Banks, Insurance and Private PensionFund Administrators (Superintendencia de Banca, Seguros y Administradoras Privadas de Fondos de Pensiones, or ‘‘SBS’’) for Peruvianprivate pension fund investment eligibility, as required by Peruvian law. The notes may not be offered or sold in the Republic of Peruor in any other jurisdiction except in compliance with the securities laws thereof.

We expect that delivery of the notes will be made to investors in book-entry form through the facilities of The DepositoryTrust Company (‘‘DTC’’) for the accounts of its direct and indirect participants, including Euroclear Bank S.A./N.V., as operatorof the Euroclear System (‘‘Euroclear’’), and Clearstream Banking, societe anonyme (‘‘Clearstream’’), Luxembourg, on or aboutAugust 2, 2012.

Joint Book-Running Managers

BofA Merrill Lynch CitigroupPeruvian Placement Agent

Citicorp Peru S.A. Sociedad Agente de BolsaThe date of this offering memorandum is July 26, 2012

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TABLE OF CONTENTS Page

Available Information....................................................................................................................................................v Enforcement of Civil Liabilities ....................................................................................................................................v Forward-Looking Statements ......................................................................................................................................vii Presentation of Financial and Other Information..........................................................................................................ix Summary........................................................................................................................................................................1 Risk Factors .................................................................................................................................................................17 Use of Proceeds ...........................................................................................................................................................39 Capitalization...............................................................................................................................................................40 Exchange Rates ...........................................................................................................................................................41 Selected Financial and Other Information ...................................................................................................................42 Management’s Discussion and Analysis of Financial Condition and Results of Operations ......................................45 Peruvian Sugar Industry ..............................................................................................................................................67 Business.......................................................................................................................................................................71 Regulatory Overview...................................................................................................................................................91 Management ................................................................................................................................................................97 Shareholders ..............................................................................................................................................................100 Grupo Gloria..............................................................................................................................................................100 Related Party Transactions ........................................................................................................................................101 Description of the Notes ............................................................................................................................................103 Taxation.....................................................................................................................................................................151 Plan of Distribution ...................................................................................................................................................156 Transfer Restrictions..................................................................................................................................................160 Legal Matters.............................................................................................................................................................163 Independent Auditors ................................................................................................................................................163 Listing and General Information ...............................................................................................................................164 Index to Financial Statements.................................................................................................................................... F-1

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Unless otherwise indicated or the context otherwise requires, all references in this offering memorandum to:

“Coazucar,” “issuer,” “we,” “us,” “our,” “our company,” “ourselves” and similar terms refer to Corporación Azucarera del Perú S.A. and its consolidated subsidiaries;

“Argentina” refers to the Republic of Argentina;

“Azucarera Olmos” refers to Azucarera Olmos S.A., a wholly-owned subsidiary of our company that is a guarantor of the notes;

“Cartavio” refers to Cartavio S.A.A., a partially-owned subsidiary of our company that is a guarantor of the notes;

“Casa Grande” refers to Casa Grande S.A.A., a partially-owned subsidiary of our company that is a guarantor of the notes;

“Chiquitoy” refers to Empresa Agraria Chiquitoy S.A.;

“CONASEV” refers to the Comisión Nacional Supervisora de Empresas y Valores del Perú;

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“Ecuador” refers to the Republic of Ecuador;

“FAO” refers to the Food and Agriculture Organization of the United Nations.

“Grupo Gloria” refers to a conglomerate comprised of operating companies, including among many others, the Guarantors, Gloria S.A. and Yura S.A., under the common control of Vito Rodríguez Rodríguez and Jorge Rodríguez Rodríguez, with operations in seven countries in Latin America;

the “Guarantors” refer to Casa Grande, Cartavio, San Jacinto and Azucarera Olmos;

“La Troncal” refers to Grupo Azucarero EQ2 S.A., which is owned by us through Fideicomiso Mercantil Consorcio Azucarero Ecuatoriano;

“OECD” refers to the Organisation for Economic Co-operation and Development;

“Peru” refers to the Republic of Peru;

the “Peruvian government” refers to the government of Peru;

the “Peruvian Ministry of Agriculture” refers to the Ministerio de Agricultura del Perú.

“San Isidro” refers to, collectively, Verha S.A., Prosal S.A., Emaisa S.A. and Bio San Isidro S.A., partially-owned subsidiary of our company;

“San Jacinto” refers to Agroindustrias San Jacinto S.A.A., a partially-owned subsidiary of our company that is a guarantor of the notes;

“Sintuco” refers to Empresa Agrícola Sintuco S.A., a partially-owned subsidiary of our company; and

the “United States” or the “U.S.” refers to the United States of America.

You should assume that the information appearing in this offering memorandum is accurate as of the date on the front cover of this offering memorandum only. Our business, financial condition, results of operations and prospects may have changed since that date. Neither the delivery of this offering memorandum nor any sale made hereunder shall under any circumstances imply that the information herein is correct as of any date subsequent to the date on the cover of this offering memorandum.

We have prepared this offering memorandum for use solely in connection with the proposed offering of the notes described in this offering memorandum. This offering memorandum is personal to each offeree and does not constitute an offer to any other person other than the offeree to whom it has been delivered or the public generally to subscribe for or otherwise acquire notes (other than pursuant to CONASEV Resolution No. 079-2008-EF/94.01.1). Distribution of this offering memorandum to any person other than a prospective investor and any person retained to advise such prospective investor with respect to its purchase is unauthorized, and any disclosure of any of its contents, without our prior written consent, is prohibited. Each prospective investor, by accepting delivery of this offering memorandum, agrees to the foregoing and to make no photocopies of this offering memorandum or any documents referred to in this offering memorandum.

The initial purchasers make no representation or warranty, expressed or implied, as to the accuracy or completeness of the information contained in this offering memorandum. Nothing contained in this offering memorandum is, or shall be relied upon as, a promise or representation by the initial purchasers as to the past or future.

This offering memorandum is intended solely for the purpose of soliciting indications of interest in the notes from qualified investors and does not purport to summarize all of the terms, conditions, covenants and other provisions relating to the terms of the notes contained in the indenture being entered into in connection with the issuance of the notes as described herein and other transaction documents described herein. The market information in this offering memorandum has been obtained by us from publicly available sources deemed by us to be reliable.

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We accept responsibility for correctly extracting and reproducing such information. Notwithstanding any investigation that the initial purchasers may have conducted with respect to the information contained in this offering memorandum, the initial purchasers accept no liability in relation to the information contained in this offering memorandum or its distribution or with regard to any other information supplied by us or on our behalf.

Neither we nor the initial purchasers are making an offer to sell the notes in any jurisdiction except where such an offer or sale is permitted. You must comply with all applicable laws and regulations in force in any jurisdiction in which you purchase, offer or sell the notes or possess or distribute this offering memorandum and you must obtain any consent, approval or permission required by you for the purchase, offer or sale of the notes under the laws and regulations in force in your jurisdiction to which you are subject or in which you make such purchases, offers or sales, and neither we nor the initial purchasers will have any responsibility therefor.

You acknowledge that:

you have been afforded an opportunity to request from us, and to review, all additional information considered by you to be necessary to verify the accuracy of, or to supplement, the information contained in this offering memorandum;

you have not relied on the initial purchasers or their agents or any person affiliated with the initial purchasers or their agents in connection with your investigation of the accuracy of such information or your investment decision; and

no person has been authorized to give any information or to make any representation concerning us or the notes other than those as set forth in this offering memorandum. If given or made, any such other information or representation should not be relied upon as having been authorized by us, the initial purchasers or their agents.

We are relying upon an exemption from registration under the Securities Act for an offer and sale of securities which do not involve a public offering. By purchasing the notes, you will be deemed to have made certain acknowledgments, representations and agreements as set forth under “Transfer Restrictions” in this offering memorandum. The notes are subject to restrictions on transfer and resale and may not be transferred or resold except as permitted under the Securities Act and applicable state securities laws. As a prospective purchaser, you should be aware that you may be required to bear the financial risks of this investment for an indefinite period of time. See “Plan of Distribution” and “Transfer Restrictions.”

In making an investment decision, prospective investors must rely on their own examination of our company and the terms of the offering, including the merits and risks involved. Prospective investors should not construe anything in this offering memorandum as legal, business or tax advice. Each prospective investor should consult its own advisors as needed to make its investment decision and to determine whether it is legally permitted to purchase the notes under applicable legal, investment or similar laws or regulations.

None of the United States Securities and Exchange Commission (the “SEC”), any United States state securities commission or any United States, Peruvian or other regulatory authority has approved or disapproved of these securities or determined if this offering memorandum is truthful or complete. Any representation to the contrary is a criminal offense.

Application has been made to the Irish Stock Exchange for the approval of this document as Listing Particulars. Application has been made to the Irish Stock Exchange for the notes to be admitted to the Official List and to trading on the Global Exchange Market which is the exchange regulated market of the Irish Stock Exchange. The Global Exchange Market is not a regulated market for the purposes of Directive 2004/39/EC. The Irish Stock Exchange’s Global Exchange Market takes no responsibility for the contents of this offering memorandum, makes no representations as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this offering memorandum.

We confirm that, after having made all reasonable inquiries, this offering memorandum contains all information which is material to the offering and sale of the notes, that the information contained in this offering memorandum is true and accurate in all material respects and is not misleading and that there are no omissions of any facts from this

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offering memorandum which, by their absence herefrom, make this offering memorandum misleading. We accept responsibility for the information contained in this offering memorandum. The opinions and intentions expressed in this offering memorandum are honestly held and based on reasonable assumptions.

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NOTICE TO NEW HAMPSHIRE RESIDENTS ONLY

NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A LICENSE HAS BEEN FILED UNDER CHAPTER 421-B OF THE NEW HAMPSHIRE REVISED STATUTES (“RSA”) WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE OF NEW HAMPSHIRE IMPLIES THAT ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT ANY EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY OF STATE HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY OR TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER OR CLIENT ANY REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH.

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NOTICE TO RESIDENTS OF PERU

IN PERU, THIS OFFERING WILL BE CONSIDERED A PUBLIC OFFERING DIRECTED EXCLUSIVELY TO “INSTITUTIONAL INVESTORS” (AS SUCH TERM IS DEFINED UNDER THE SEVENTH FINAL DISPOSITION OF CONASEV’S RESOLUTION NO. 141-98-EF/94.10, AS AMENDED).

THE NOTES AND THIS OFFERING MEMORANDUM HAVE BEEN REGISTERED WITH THE SMV IN ACCORDANCE WITH THE PROCEDURES SET FORTH IN NUMERAL IV OF THE SECOND SECTION OF THE MANUAL FOR COMPLIANCE WITH THE APPLICABLE REQUIREMENTS FOR INITIAL PUBLIC OFFERINGS, AS SET FORTH UNDER SMV RESOLUTION NO. 004-2011- EF/94.01.1, PURSUANT TO CONASEV RESOLUTION NO. 079-2008-EF/94.01.1, APPLICABLE TO U.S. OFFERINGS IN RELIANCE OF RULE 144A UNDER THE SECURITIES ACT WITH A LOCAL PERUVIAN COMPONENT.

THE NOTES OFFERED HEREBY ARE SUBJECT TO TRANSFER AND RESALE RESTRICTIONS AND MAY NOT BE TRANSFERRED OR RESOLD IN PERU EXCEPT AS PERMITTED UNDER CONASEV RESOLUTION NO. 079-2008-EF/94.01.1.

THE NOTES HAVE BEEN PROVISIONALLY REGISTERED WITH THE FOREIGN INVESTMENT AND DERIVATIVES INSTRUMENTS REGISTRY (REGISTRO DE INSTRUMENTOS DE INVERSIÓN Y DE OPERACIONES DE COBERTURA DE RIESGO EXTRANJEROS) OF THE SBS, IN ORDER TO MAKE THE NOTES ELIGIBLE FOR PERUVIAN PENSION FUND INVESTMENT, AS REQUIRED BY PERUVIAN LEGISLATION. THIS REGISTRATION WAS PROVISIONALLY APPROVED, AND DEFINITIVE REGISTRATION IS CONDITIONED ON THE DELIVERY OF THE FINAL OFFERING MEMORANDUM AND OTHER ANCILLARY DOCUMENTS TO THE SBS.

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NOTICE TO INVESTORS IN THE EUROPEAN ECONOMIC AREA

This offering memorandum has been prepared on the basis that any offer of notes in any Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”) will be made pursuant to an exemption under the Prospectus Directive from the requirement to publish a prospectus for offers of notes. Accordingly any person making or intending to make an offer in that Relevant Member State of notes which are the subject of the offering contemplated in this offering memorandum may only do so in circumstances in which no obligation arises for any of the Issuer, the Guarantors or the initial purchasers to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive, in each case, in relation to such offer. Neither the Issuer, the Guarantors nor the initial purchasers have authorised, nor do they authorise, the making of any offer (other than Permitted Public Offers) of notes in circumstances in which an obligation arises for the Issuer, the Guarantors or the initial purchasers to publish or supplement a prospectus for such offer. The expression “Prospectus Directive” means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in the Relevant Member State and the expression “2010 PD Amending Directive” means Directive 2010/73/EU.

IN CONNECTION WITH THE OFFERING OF THE NOTES, THE PERSON (IF ANY) NAMED AS THE STABILIZING MANAGER(S) (THE “STABILIZING MANAGER(S)) (OR PERSONS ACTING ON THEIR BEHALF) MAY OVER-ALLOT NOTES OR EFFECT TRANSACTIONS WITH A VIEW TO SUPPORTING THE MARKET PRICE OF THE NOTES AT A LEVEL HIGHER THAN THAT WHICH MIGHT OTHERWISE PREVAIL. HOWEVER, THERE IS NO ASSURANCE THAT THE STABILIZING MANAGER(S) (OR PERSONS ACTING ON THEIR BEHALF) WILL UNDERTAKE STABILIZATION ACTION. ANY STABILIZATION ACTION MAY BEGIN ON OR AFTER THE DATE ON WHICH ADEQUATE PUBLIC DISCLOSURE OF THE TERMS OF THE OFFER OF THE RELEVANT TRANCHE OF NOTES IS MADE AND, IF BEGUN, MAY BE ENDED AT ANY TIME, BUT IT MUST END NO LATER THAN 30 DAYS AFTER THE DATE ON WHICH THE ISSUER RECEIVED THE PROCEEDS OF THE ISSUE, OR NO LATER THAN 60 DAYS AFTER THE DATE OF ALLOTMENT OF THE RELEVANT SECURITIES, WHICHEVER IS THE EARLIER.

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AVAILABLE INFORMATION

To permit compliance with Rule 144A in connection with resales of the notes, for so long as the notes are “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act, we have agreed to furnish upon request of a holder or beneficial owner of such restricted securities and a prospective purchaser or subscriber of such restricted securities designated by such holder or beneficial owner upon the request of such holder, beneficial owner or prospective purchaser or subscriber the information required to be delivered under Rule 144A(d)(4) if at the time of such request we are neither a reporting company under Section 13 or Section 15(d) of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor exempt from reporting pursuant to Rule 12g3-2(b) thereunder.

We will be required to file certain information in Spanish with the SMV, such as quarterly and annual reports and notices of material events (Hechos de Importancia). All such reports and notices are available at www.smv.gob.pe. The documents filed with the SMV are not and will not form part of this offering memorandum and are not incorporated by reference herein.

ENFORCEMENT OF CIVIL LIABILITIES

We are, and each of the Guarantors is, an exempted limited liability company organized under the laws of Peru and substantially all of our and the Guarantors’ assets are located outside the United States. In addition, all of our and each of the Guarantors’ directors and officers and certain other persons named in this offering memorandum reside outside the United States and all or a significant portion of our and their assets are located outside the United States. As a result, it may be difficult or impossible for investors to effect service of process within the United

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States upon such persons or to enforce against them, our company or each of the Guarantors judgments of courts of the United States, whether or not predicated upon the civil liability provisions of the federal securities laws of the United States or other laws of the United States or any state thereof.

We have been advised by our Peruvian counsel, Rubio Leguía Normand, that any final and conclusive judgment for a fixed and final sum obtained against us in any foreign court having jurisdiction in respect of any suit, action or proceeding against us for the enforcement of any of our obligations under the notes that are governed by New York law will, upon request, be deemed valid and enforceable in Peru through an exequatur judiciary proceeding (which does not involve the reopening of the case), provided that: (1) there is a treaty in effect between the country where said foreign court sits and Peru regarding the recognition and enforcement of foreign judgments; or (2) in the absence of such a treaty, the following conditions and requirements are met:

(i) the judgment does not resolve matters under the exclusive jurisdiction of Peruvian courts (and the matters contemplated in respect of this offering memorandum or the notes are not matters under the exclusive jurisdiction of Peruvian courts);

(ii) such court had jurisdiction under its own private international conflicts of law rules and under general principles of international procedural jurisdiction;

(iii) we received service of process in accordance with the laws of the place where the proceeding took place, were granted a reasonable opportunity to appear before such foreign court and were guaranteed due process rights;

(iv) the judgment has the status of res judicata as defined in the jurisdiction of the court rendering such judgment;

(v) no pending litigation in Peru between the same parties for the same dispute was initiated before the commencement of the proceeding that concluded with the foreign judgment;

(vi) the judgment is not incompatible with another judgment that fulfills the requirements of recognition and enforceability established by Peruvian law, unless such foreign judgment was rendered first;

(vii) the judgment is not contrary to Peruvian public policy or good morals; and

(viii) it is not proven that such foreign court denies enforcement of Peruvian judgments or engages in a review of the merits thereof.

We have no reason to believe that any of our obligations relating to the notes and the guarantees would be contrary to Peruvian public policy, good morals and international treaties binding upon Peru or generally accepted principles of international law.

The United States does not currently have a treaty providing for reciprocal recognition and enforcement of judgments in civil and commercial matters with Peru. Therefore, a final judgment for payment of money rendered by a federal or state court in the United States based on civil liability, whether or not predicated solely upon U.S. federal securities laws, may not be enforceable, either in whole or in part, in Peru. However, if the party in whose favor such final judgment is rendered brings a new suit in a competent court in Peru, such party may submit to the Peruvian court the final judgment rendered in the United States. Under such circumstances, a judgment by a federal or state court of the United States against our company, the Guarantors or such persons could be regarded by a Peruvian court only as evidence of the outcome of the dispute to which such judgment relates, and a Peruvian court may choose to re-hear the dispute. In addition, awards of punitive damages in actions brought in the United States or elsewhere are unenforceable in Peru. In the past, Peruvian courts have enforced judgments rendered in the United States based on legal principles of reciprocity and comity.

We and the Guarantors will appoint CT Corporation System, New York, New York, as agent to receive service of process under the indenture governing the notes, including with respect to any action brought against us or the Guarantors in the Supreme Court of the State of New York in the County of New York or the United States District Court for the Southern District of New York under the federal securities laws of the United States.

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FORWARD-LOOKING STATEMENTS

This offering memorandum contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. These statements appear throughout this offering memorandum, principally in “Summary,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business”. Such estimates and forward-looking statements are primarily based on current expectations and projections about future events and financial trends that affect, or may affect, our business, financial condition, results of operations and prospects.

There are many significant risks, uncertainties and assumptions that might cause our business, financial condition, results of operations and prospects to differ materially from those set out in our estimates and forward-looking statements. Statements that are predictive in nature, that depend upon or refer to future events or conditions or that include words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates” and similar expressions are forward-looking statements. Although we believe that these forward-looking statements are based upon reasonable assumptions, these statements are subject to several risks and uncertainties and are made in light of information currently available to us.

Our forward-looking statements may be influenced by factors, including the following:

economic, political and business conditions in Peru, Ecuador, Argentina and in major international markets to which we export and sell sugar and ethanol, including price and demand for such products;

climatic conditions, climate changes and natural disasters;

the cost and availability of financing and our ability to obtain financing on satisfactory terms;

our investment, acquisition, joint venture, strategic alliances or divestiture plans;

interest rate fluctuations, inflation and exchange rates between Peruvian and foreign currencies;

existing and future governmental regulations;

market price variation, client preferences and competition;

our ability to successfully implement our strategy and capital expenditure plans;

our future production capacity and the availability of sugarcane;

our ability to retain certain personnel and ability to hire additional key personnel;

changes in tax policies and legislation;

seasonality of the sugarcane growing cycle in Ecuador and Argentina;

export duties and tariffs, as well as tariff barriers;

other factors or trends that may affect our financial condition or results of operations;

the factors discussed under the section entitled “Risk Factors” in this offering memorandum; and

other statements contained in this offering memorandum regarding matters that are not historical facts.

Our forward-looking statements are not guarantees of future performance, and our actual results or other developments may differ materially from the expectations expressed in the forward-looking statements. As for forward-looking statements that relate to future financial results and other projections, actual results will be different due to the inherent uncertainty of estimates, forecasts and projections. Because of these uncertainties, potential investors should not rely on these forward-looking statements.

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Forward-looking statements speak only as of the date they are made, and neither we nor the initial purchasers undertake any obligation to update them in light of new information or future developments or to release publicly any revisions to these statements in order to reflect later events or circumstances or to reflect the occurrence of unanticipated events.

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PRESENTATION OF FINANCIAL AND OTHER INFORMATION

Currencies and Exchange Rates

Unless otherwise specified herein or the context otherwise requires, in this offering memorandum references to “US$,” “dollars” and “U.S. dollars” are to United States dollars, the official currency of the United States and Ecuador, and references to “S/.” and “nuevos soles” are to Peruvian nuevos soles, the official currency of Peru, and references to “Pesos” or “Argentine Pesos” are to Argentine pesos, the official currency of Argentina.

Solely for the convenience of the reader, we have translated certain amounts included in “Summary—Summary Financial and Other Information,” “Capitalization,” “Selected Financial and Other Information” and elsewhere in this offering memorandum from nuevos soles into U.S. dollars for figures as of December 31, 2011 using the rate as specified by the SBS as of December 31, 2011 of S/.2.696 to US$1.00 and, for figures as of March 31, 2012, using the rate as specified by the SBS as of March 31, 2012 of S/.2.667 to US$1.00. These translations should not be considered representations that any such nuevos sol amounts have been, could have been or could be converted into U.S. dollars at that or at any other exchange rate. Such translations should not be construed as representations that the nuevo sol amounts represent or have been or could be converted into U.S. dollars as of that or any other date. For a complete description of the exchange rates between the nuevo sol and the U.S. dollar, see “Exchange Rates.” The Federal Reserve Bank of New York does not report a noon buying rate for nuevos soles.

Financial Statements

We maintain our books and records in nuevos soles. We have prepared our consolidated financial statements in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”) and are the first consolidated financial statements we have prepared in accordance with IFRS.

This offering memorandum includes: (i) our audited consolidated statements of financial position as of December 31, 2011, 2010 and January 1, 2010 (transition date) and our results of operations for the years ended December 31, 2011 and 2010 and (ii) our unaudited condensed consolidated interim statements of financial position as of March 31, 2012 and our results of operations for the three months ended March 31, 2012 and 2011.

Our financial information as of December 31, 2011, 2010 and January 1, 2010 (transition date) and for the years ended December 31, 2011 and 2010 has been derived from our audited consolidated financial statements contained elsewhere in this offering memorandum. Our financial information as of March 31, 2012 and for the three months ended March 31, 2012 and 2011 has been derived from our unaudited condensed consolidated interim financial statements. The results of operations for the three months ended March 31, 2012 are not necessarily indicative of the results to be expected for the year ending December 31, 2012 or for any other period. The unaudited condensed consolidated interim financial statements and the notes thereto have been condensed, but contain all adjustments, including adjustments of a normal and recurring nature, necessary for a fair presentation of our financial position and results of operation.

Guarantors’ Financial Statements

Each of the Guarantors (other than Azucarera Olmos) is a publicly traded company in Peru and like us prepares annual consolidated financial statements comparable to those prepared by us. As indicated in this section, the Guarantors (other than Azucarera Olmos) are consolidated into our audited consolidated financial statements and unaudited condensed consolidated interim financial statements and represented at March 31, 2012 and December 31, 2011 (i) in the case of Casa Grande 41.7% and 40.5%, respectively, of our consolidated assets, 86.8% and 55.6%, respectively, of our consolidated profit and 51.3% and 52.5%, respectively, of our consolidated EBITDA (as defined below), (ii) in the case of Cartavio 15.9% and 15.9%, respectively, of our consolidated assets, 12.0% and 20.3%, respectively, of our consolidated profit and 17.2% and 23.3%, respectively, of our consolidated EBITDA and (iii) in the case of San Jacinto 10.8% and 11.6%, respectively, of our consolidated assets, (7.7)% and 17.9%, respectively, of our consolidated profit and 16.0% and 12.4%, respectively, of our consolidated EBITDA. Furthermore, Casa Grande, Cartavio and San Jacinto at March 31, 2012 and December 31, 2011 had total liabilities of S/.614.6 million and S/.499.4 million, S/.312.6 million and S/.227.7 million and S/.180.7 million and S/.190.7 million, respectively.

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We are an operating company and also operate through our subsidiaries, including Casa Grande, Cartavio and San Jacinto. Given the (i) relative contribution of Casa Grande, Cartavio and San Jacinto to our results of operations and financial condition, (ii) Casa Grande’s, Cartavio’s and San Jacinto’s ability under limited circumstances to incur additional indebtedness and (iii) limited amount of Casa Grande’s guarantee, we do not believe the inclusion of separate consolidated financial statements for each of the Guarantors would be material to a prospective purchaser’s decision on whether to invest in and acquire the notes.

Non-GAAP Financial Measures

A body of generally accepted accounting principles is commonly referred to as “GAAP.” For this purpose, a non-GAAP financial measure is generally defined by the SEC as one that purports to measure historical or future financial performance, financial position or cash flows but excludes or includes amounts that would not be so adjusted in the most comparable GAAP measure. In this offering memorandum, we disclose so-called non-GAAP financial measures, primarily EBITDA, Fixed Charge Coverage Ratio and Consolidated Leverage Ratio. We define EBITDA as operating income less the change in fair value of biological assets plus depreciation plus amortization. See “Description of the Notes—Certain Definitions” for the definitions of Fixed Charge Coverage Ratio and Consolidated Leverage Ratio. The non-GAAP financial measures described in this offering memorandum are not a substitute for GAAP measures of earnings.

Our management believes that disclosure of EBITDA, Fixed Charge Coverage Ratio and Consolidated Leverage Ratio provides useful information to investors and financial analysts in their review of our operating performance and their comparison of our operating performance to the operating performance of other companies in the same industry and other industries. EBITDA, Fixed Charge Coverage Ratio and Consolidated Leverage Ratio, as calculated by us, may not be comparable to similarly titled measures reported by other companies, including those in the sugar and ethanol industries.

Market Data

We obtained the market and competitive position data, including market forecasts, used throughout this offering memorandum from internal surveys, reports issued by market research firms, publicly available information and industry publications. We include data from reports prepared by OECD-FAO Agricultural Outlook 2011-2020, the Peruvian Ministry of Agriculture, the Czarnikow Group, IntercontinentalExchange, the World Bank and Indexmundi. Industry publications, including those referenced here, generally state that the information presented therein has been obtained from sources believed to be reliable, but that the accuracy and completeness of such information is not guaranteed. Similarly, internal surveys, industry forecasts and market research, while believed to be reliable, have not been independently verified, and neither we nor the initial purchasers make any representation as to the accuracy of such information.

Information derived from the industry publications above have been accurately reproduced and, to the best of our knowledge (after taking all reasonable care to ensure that such is the case), no facts have been omitted which would render the reproduced information inaccurate or misleading.

Assumptions made in this offering memorandum as to domestic prices were made on basis of international prices made from the above mentioned sources and also using a conservative model based on past developments. Climate phenomena, such as “El Niño”, that could affect our performance also were included in our model so as to stress the model.

Technical and Other Terms

As used in this offering memorandum, the following terms have these meanings:

“Ethanol” means a clear, colorless liquid with a characteristic, agreeable odor, made by fermenting and then distilling starch or sugar crops. It is also known as alcohol or ethyl alcohol, and can be in hydrous or anhydrous state, depending on the percentage of water or purity. We currently produce only hydrous ethanol, and therefore references throughout this offering memorandum to “ethanol” are only to hydrous ethanol.

xi

“Ethanol 1” refers to a mixture of 96% ethanol and 4% water.

“Ethanol 2” refers to a mixture of 94% ethanol and 6% water.

“Polarization” refers to the measurement of sucrose content in sugar, where 100 is the maximum and means 100% sucrose.

“Sugar” means any grade or type of saccharine product derived, directly or indirectly, from sugarcane or sugar beets and consisting of, or containing, sucrose or invert sugar, including all raw sugar, refined crystalline sugar, liquid sugar, edible molasses, and cane syrup.

All references in this offering memorandum to “tons” shall also include “metric tons.” The term “MW” refers to megawatt. One “hectare” is equivalent to 10,000 square meters or 2.47105381 acres. One “cubic meter” is equivalent to 1,000 liters.

Rounding

Certain figures included in this offering memorandum and in our financial statements have been rounded for ease of presentation. Percentage figures included in this offering memorandum have not in all cases been calculated on the basis of such rounded figures but on the basis of such amounts prior to rounding. For this reason, percentage amounts in this offering memorandum may vary from those obtained by performing the same calculations using the figures in our financial statements. Certain other amounts that appear in this offering memorandum may not sum due to rounding.

General

Our obligations under the notes will be fully and unconditionally guaranteed by Cartavio, San Jacinto and Azucarera Olmos on a joint and several basis, and Casa Grande will partially guarantee such obligations in an initial amount equal to US$162,500,000.

Azucarera Olmos, a wholly-owned Guarantor of the notes, does not currently have any operations or assets. Because Azucarera Olmos was incorporated on May 9, 2012, it is not consolidated in our audited consolidated financial statements or unaudited condensed consolidated interim financial statements contained in this offering memorandum. Assuming the land sale for the Olmos Expansion Plan (as defined below) is completed and land preparation occurs, we expect the Olmos Expansion Plan to result in increases to our harvested area and sugar production. As a result, our financial results for a future period may not be directly comparable to prior periods.

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SUMMARY

This summary highlights information presented in greater detail elsewhere in this offering memorandum. This summary is not complete and does not contain all of the information you should consider before investing in our notes. You should carefully read this entire offering memorandum before deciding whether to invest in our notes, including the “Risk Factors,” “Selected Financial and Other Information” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections and our financial statements and notes to those statements, included elsewhere in this offering memorandum.

Overview

We cultivate, harvest, purchase and crush sugarcane, the principal raw material used to produce sugar and ethanol. We conduct our sugar and ethanol operations through our five mills and eight distilleries, which are located throughout Peru, and in Ecuador and Argentina. We market and sell all of the sugar and ethanol we produce, both domestically and globally. In 2011, we cultivated sugarcane on 55,733 hectares. According to data provided by the Peruvian Ministry of Agriculture, we were the largest sugarcane crush processor in terms of sugarcane crushed, the largest producer of sugar and one of the two largest producers of ethanol in Peru in 2011. In addition, according to data provided by the Peruvian Ministry of Agriculture, we accounted for approximately 46% of the sugar produced in Peru in 2011. We believe, according to internal data, that we accounted for approximately 38% of the ethanol produced in Peru in 2011.

Our operations are conducted in Peru through Coazucar (approximately 1% of our EBITDA for the three months ended March 31, 2012 and 2% of our EBITDA for 2011) and our subsidiaries (i) Casa Grande (approximately 51% of our EBITDA for the three months ended March 31, 2012 and 52% of our EBITDA for 2011), (ii) Cartavio (approximately 17% of our EBITDA for the three months ended March 31, 2012 and 23% of our EBITDA for 2011), (iii) San Jacinto (approximately 16% of our EBITDA for the three months ended March 31, 2012 and 12% of our EBITDA for 2011) and (iv) Sintuco (approximately 2% of our EBITDA for the three months ended March 31, 2012 and 1% of our EBITDA for 2011); in Ecuador through our subsidiary La Troncal (approximately 13% of our EBITDA for the three months ended March 31, 2012 and 6% of our EBITDA for 2011); and in Argentina through our subsidiary San Isidro (approximately 0% of our EBITDA for the three months ended March 31, 2012 and 4% of our EBITDA for 2011).

Our mills have a combined installed sugarcane crushing capacity of approximately 8.4 million tons per year and benefit from high agricultural yields, proximity to a main port and consumer markets and a more efficient structure for sugarcane transportation, as compared to other mills. In addition, Peru’s dry, tropic climate allows us to harvest our sugarcane throughout the entire calendar year, giving us a competitive advantage over producers in other countries, which can only harvest once or twice a year. Most of our mills are also able to shift production between brown, white and refined sugar in order to capitalize on unexpected price variations among the different types of sugar.

The close proximity of our sugarcane fields and those of our suppliers to our milling facilities (average distance of approximately 15 kilometers) and our increasing mechanization levels (approximately 13% of the sugarcane we cultivated was harvested mechanically in 2011) positively impact our operating cost structure. Our Peruvian mills and distilleries are located in the La Libertad and Ancash regions, an average of approximately 59 kilometers from the nearest sea port, Salaverry, also located in the La Libertad region, through which we ship almost all of our Peruvian exports. The La Libertad and Ancash regions are approximately 610 kilometers and 407 kilometers respectively from Lima, our principal market.

For the three months ended March 31, 2012, we crushed 1.3 million tons of sugarcane, all of which was used to produce sugar and ethanol in Peru because the sugarcane harvest does not begin in Ecuador and Argentina until July and May, respectively. In the same period, we produced approximately 133 thousand tons of sugar and approximately 14.1 million liters of ethanol. For the three months ended March 31, 2012, we reported sales of products of S/.377.2 million (US$141.4 million) and EBITDA of S/.138.6 million (US$52.0 million). Our sales of sugar and ethanol for the three months ended March 31, 2012 were S/.340.1 million (US$127.5 million) and S/.30.9 million (US$11.6 million), respectively. During 2011, we crushed 6.7 million tons of sugarcane (4.7 million tons of which were crushed in Peru), all of which was used to produce sugar and ethanol. In 2011, we produced approximately 690 thousand tons of sugar (492 thousand tons of which were produced in Peru) and approximately

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69.2 million liters of ethanol (47.9 million liters of which were produced in Peru). For 2011, we reported sales of products of S/.1,304.4 million (US$483.8 million) and EBITDA of S/.578.5 million (US$214.6 million). Our sales of sugar and ethanol during 2011 were S/.1,166.2 million (US$432.6 million) and S/.93.4 million (US$34.6 million), respectively.

As of March 31, 2012, we owned land with a total area of 89,752 hectares (approximately 224,380 acres), of which approximately 80,862 hectares (approximately 199,814 acres) is arable land. As of December 31, 2011, we cultivate sugarcane on 55,733 hectares (approximately 137,719 acres). We also purchase sugarcane from third party suppliers, which represented approximately 28% of the total sugarcane that we crushed during 2011.

Key Financial and Operating Data

The following table sets forth certain of our financial information and operating data for the periods indicated.

As of and for the Three Months Ended March 31,

As of and for the Years Ended December 31,

2012 2012 2011 2011 2011 2010 (in thousands

of US$, except as indicated)

(in thousands of S/., except as indicated)

(in thousands of US$, except as indicated)


Financial data: (unaudited) Sales of products ......................... 141,427 377,185 309,162 483,833 1,304,415 937,854 Profit for the period..................... 32,767 87,388 147,796 207,543 559,535 427,689 EBITDA(1)................................... 51,979 138,628 164,151 214,587 578,526 416,977 EBITDA margin(2)....................... 36.8% 36.8% 53.1% 44.4% 44.4% 44.5%Total debt(3) ................................. 302,049 805,566 302,946 816,744 533,619 Total debt / EBITDA(4)................ 1.46x 1.46x 1.41x 1.41x 1.28xNet debt(5).................................... 230,133 613,766 260,558 702,467 462,637 Net debt / EBITDA(6) .................. 1.11x 1.11x 1.21x 1.21x 1.11x As of and for the Three Months

Ended March 31, As of and for the Years

Ended December 31, 2012 2011 2011 2010 2009 Operating data: Sugarcane crushed (tons)

Casa Grande .......................... 648,161 664,952 2,331,436 2,365,120 2,197,378 Cartavio ................................. 449,681 455,021 1,688,790 1,696,196 1,690,490 San Jacinto............................. 207,568 171,499 696,063 605,809 546,774 San Isidro............................... —(7) —(7) 488,752 547,106 515,821 La Troncal ............................. —(7) —(7) 1,500,886 1,629,216 1,295,569 Total ...................................... 1,305,409 1,291,472 6,705,927 6,843,447 6,246,032

Sugar production (tons)............... 133,429 135,866 689,651 470,599 451,866 Ethanol production (million

liters) ........................................

14.1

13.1

69.2

67.2

59.7 Employees .................................. 13,526 9,706 12,089 8,646 9,471 _______________________________ (1) EBITDA is calculated using profit from operations for the period before financing and taxation without initial recognition and change in fair

value of biological asset, added to depreciation and amortization. See “Presentation of Financial and Other Information.” (2) EBITDA margin is EBITDA divided by sales of products, expressed as a percentage. (3) Total debt is the sum of total short- and long-term loans. (4) Total debt/EBITDA is the ratio of our total debt as of the end of the applicable period divided by our EBITDA for the then most recently

concluded period of four consecutive fiscal quarters, including the four consecutive fiscal quarters ended March 31, 2012. (5) Net debt is obtained netting total debt with cash and cash equivalents. (6) Net debt/EBITDA is the ratio of our net debt as of the end of the applicable period divided by our EBITDA for the then most recently

concluded period of four consecutive fiscal quarters, including the four consecutive fiscal quarters ended March 31, 2012. (7) Sugarcane harvest begins in Ecuador and Argentina in July and May, respectively, due to climate conditions in these countries that do not

permit sugarcane harvesting year-round.

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The following tables set forth certain of the financial information and operating data of the Guarantors for the periods indicated. For the Three Months

Ended March 31, 2012 (in thousands of S/., except as indicated)

Casa Grande

% of Coazucar Cartavio

% of Coazucar

San Jacinto

% of Coazucar Others(1)

% of Coazucar Total

Financial data: Sales of products ........................................... 153,270 40.6% 95,749 25.4% 48,430 12.8% 79,736 21.1% 377,185Profit for the period....................................... 75,848 86.8% 10,508 12.0% (6,764) (7.7)% 7,796 8.9% 87,388EBITDA(2) ..................................................... 71,134 51.3% 23,814 17.2% 22,181 16.0% 21,499 15.5% 138,628EBITDA margin(3) ........................................ 46.4% 24.9% 45.8% 27.0% 36.8%Total debt(4) ................................................... 106,801 13.3% 54,040 6.7% 103,481 12.8% 541,244 67.2% 805,566Total debt / EBITDA(5) ................................. 0.39x 0.45x 1.42x 6.25x 1.46xNet debt(6) ...................................................... 70,127 11.4% 32,394 5.3% 102,865 16.8% 408,380 66.5% 613,766Net debt / EBITDA(7) .................................... 0.26x 0.27x 1.42x 4.72x 1.11xOperating data: Total area for sugarcane production

capacity (hectares) .....................................

21,115

37.9%

6,891

12.4%

6,081

10.9%

21,646

38.8%

55,733Sugarcane crushed (tons) .............................. 648,161 49.7% 449,681 34.4% 207,568 15.9% —(8) —(8) 1,305,410Daily ethanol production capacity (liters) .... 60,000 13.6% 80,000 18.2% 40,000 9.1% 260,000 59.1% 440,000Total ethanol production (million liters)....... 4.0 28.2% 3.7 26.4% 0.6 4.1% 5.8 41.3% 14.1_______________________________

(1) Includes La Troncal, San Isidro, Sintuco and Coazucar distilleries with respect to financial data, and adjustment for consolidation. With respect to operating data, only the Coazucar distilleries are included in total ethanol production and capacity figures and La Troncal, San Isidro and Sintuco are included in the total sugarcane production and total of sugarcane crushed figures.

(2) EBITDA is calculated using profit from operations for the period before financing and taxation without initial recognition and change in fair value of biological asset, added to depreciation and amortization. See “Presentation of Financial and Other Information.”

(3) EBITDA margin is EBITDA divided by sales of products, expressed as a percentage. (4) Total debt is the sum of total short- and long-term loans. (5) Total debt/EBITDA is the ratio of our total debt as of the end of the applicable period divided by our EBITDA for the then most recently

concluded period of four consecutive fiscal quarters, including the four consecutive fiscal quarters ended March 31, 2012. (6) Net debt is obtained netting total debt with cash and cash equivalents. (7) Net debt/EBITDA is the ratio of our net debt as of March 31, 2012 divided by our EBITDA for the then most recently concluded period of

four consecutive fiscal quarters ended March 31, 2012. (8) Sugarcane harvest begins in Ecuador and Argentina in July and May, respectively, due to climate conditions in these countries that do not


For the Year Ended December 31, 2011

(in thousands of S/., except as indicated) Casa

Grande % of

Coazucar Cartavio % of

CoazucarSan

Jacinto % of

Coazucar Others(1) % of

Coazucar Total Financial data: Sales of products ........................................... 583,390 44.7% 401,718 30.8% 164,855 12.6% 154,452 11.8% 1,304,415Profit for the year .......................................... 310,859 55.6% 113,742 20.3% 99,990 17.9% 34,944 6.2% 559,535EBITDA(2) ..................................................... 303,581 52.5% 134,659 23.3% 71,922 12.4% 68,364 11.8% 578,526EBITDA margin(3) ........................................ 52.0% 33.5% 43.6% 44.3% 44.4%Total debt(4) ................................................... 119,141 14.6% 56,211 6.9% 105,406 12.9% 535,986 65.6% 816,744Total debt / EBITDA(5) ................................. 0.39x 0.42x 1.47x 7.84x 1.41xNet debt(6) ...................................................... 110,467 15.7% 47,889 6.8% 103,410 14.7% 440,701 62.7% 702,467Net debt / EBITDA(7) .................................... 0.36x 0.36x 1.44x 6.45x 1.21xOperating data: Total area for sugarcane production


21,115

37.9%

6,891 12.4%

6,081

10.9%

21,646

38.8%

55,733Sugarcane crushed (tons) .............................. 2,331,436 34.8% 1,688,790 25.2% 696,063 10.4% 1,989,638 29.7% 6,705,927Daily ethanol production capacity (liters) .... 60,000 13.6% 80,000 18.2% 40,000 9.1% 260,000 59.1% 440,000Total ethanol production (million liters)....... 12.7 18.3% 15.8 22.9% 2.4 3.5% 38.2 55.3% 69.2_______________________________




concluded year. (6) Net debt is obtained netting total debt with cash and cash equivalents. (7) Net debt/EBITDA is the ratio of our net debt as of December 31, 2011 divided by our EBITDA for the then most recently concluded period of

fiscal year ended December 31, 2011.

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Our Main Products

We market and sell all the sugar and ethanol produced by our mills and distilleries, both domestically and globally. We also produce other sugarcane by-products including molasses and bagasse. Ethanol is produced from molasses, the principal remaining by-product of processing sugarcane into sugar. Bagasse is used as a raw material to generate the vapor that is used to produce sugar and it is also used to cogenerate electricity.

Sugar

We are able to produce several types of sugar such as refined white, refined, brown and organic sugar. While brown sugar has constituted the majority of our sugar sales during the last six years, most of our mills have industrial flexibility to produce brown, white and refined sugar. We produced approximately 690 thousand tons of sugar during 2011 (consisting 60% of brown sugar, 29% of white sugar, 8% of refined sugar and 3% of organic sugar) and recorded sales of products from sugar of S/.1,166.2 million, or 89.4%, of our sales of products in 2011. For 2011, we exported approximately 11.7% of our total sugar sales to customers located primarily in North America and Europe. In Peru, we sell our sugar products to retailers, wholesale distributors and food and beverage manufacturers. In Argentina, we produce mostly organic sugar, which we export mainly to Europe, where demand for this specialty product is highest.

Ethanol

We produce and sell ethanol both domestically and globally. In 2011, we produced approximately 69.2 million liters of ethanol in our eight distilleries and recorded sales of products from ethanol of S/.93.4 million, or 7.2%, of our sales of products. In 2011, we sold 20.2% of our ethanol mainly to alcohol producers in Peru and exported 79.8% to customers located in the U.S. and Europe.

Sugarcane by-products

We also produce molasses and bagasse. Molasses is a by-product of processing sugarcane into sugar and is used as a raw material to produce ethanol. Sugarcane bagasse is a by-product of processing both sugar and ethanol and is a renewable energy source. We generate electricity at all of our mills through the burning of sugarcane bagasse in boilers, which enables those mills to be self-sufficient in terms of their energy needs. In addition, we sell excess bagasse produced at our Casa Grande, Cartavio and San Jacinto mills to Trupal S.A., an affiliate of Grupo Gloria engaged in the production of paper and cardboard.

Peru’s Competitive Advantages in the Production of Sugarcane

According to the Food and Agricultural Policy Research Institute (“FAPRI”), Peru had one of the highest crop yields in the world for sugarcane in 2011. Peru is located near the equator and the resulting vertical solar radiation it receives allow for such high sugarcane crop yields. Moreover, the vast territory, mild climate and stable water supply found in Peru, make it possible to harvest sugarcane all year long, thus further increasing productivity.

According to the Peruvian Ministry of Agriculture, approximately 8% of Peru’s coastal agricultural land, or 127,809 million hectares, is currently used for sugarcane production, and we believe that Peru should be able to increase its sugarcane production capacity significantly depending on market conditions and the suitability of available land for sugarcane cultivation. Peru’s favorable growing conditions also permit sugarcane to be harvested seven times before requiring re-planting, compared to (i) India, where, on average, sugarcane must be re-planted every two harvests and (ii) the United States and other countries that harvest sugar beet, which has one annual crop and must be re-planted every year, as well as requiring crop rotations that range between three and five years.

We believe that Peruvian producers of sugar, including us, enjoy competitive advantages over sugar producers in other countries due to the following factors:

Low-cost producer. The cost of producing sugar from sugarcane in Peru is low due to its extremely favorable climate and soil. Peru experiences dry weather with little climate differentiation among the seasons due to its proximity to the equator and due to the effects of the Humboldt sea current. Peru also benefits from

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technological improvements developed in the production of sugar. These technological improvements have resulted in longer harvesting cycles, higher sugarcane yield per hectare and increased sucrose content from crushed sugarcane, which has improved sugar output. According to the Czarnikow Group, sugar production costs in Peru are significantly lower than production costs in Brazil, a leading producer of sugar. For example, during 2011, average production costs per pound of brown sugar in Brazil was approximately US$0.20, or 53.8% higher than the US$0.13 per pound cost of brown sugar produced from our own sugarcane.

Strong domestic and global sugar demand. Peru consumed approximately 1.2 million tons of sugar during 2011. Sugar consumption in Peru has continued to grow, principally as a result of higher consumption of beverages and processed food products made with sugar, as well as a result of higher consumer disposable income. Worldwide sugar consumption has more than doubled since the early 1980s, to approximately 165 million tons in 2010 from approximately 70 million tons in 1971, in each case, measured based on raw sugar equivalent. OECD-FAO estimates the worldwide sugar consumption to increase to 207 million tons by 2020. We expect future growth opportunities to come from a gradual liberalization of trade barriers in markets outside Peru, mainly in developed OECD countries; and we expect increased sugar consumption due to (1) population growth concentrated in markets open to the international sugar trade, (2) increased purchasing power in many countries and (3) higher consumption of processed foods and drinks.

Increased opportunities to export sugar. The global sugar market has grown significantly in recent years. However, sugar producing countries still give priority to supplying their domestic markets. Therefore, the international trade market for sugar should have ample room for growth. Consumption growth of sugar is not always accompanied by increased local production in many countries. This creates medium-term opportunities for Peruvian sugar export growth. Furthermore, given Peru’s location in the western hemisphere and proximity to the equator, Peruvian producers of sugar, such as us, are able to export the majority of their products in a different export window than those of competitors outside of Peru. This also creates opportunities for Peruvian sugar export growth.

Our Strengths

Undisputed leadership in Peru. We enjoy leading market positions in Peru, a country with one of the highest sugarcane yields in the world in 2011 and we have one of the highest sugarcane yields in Peru. We are the largest grower and processor of sugarcane in Peru, whose climate allows us to harvest sugarcane year-round. According to the Peruvian Ministry of Agriculture, we are the largest sugarcane grower in Peru, with 55,733 hectares cultivated in 2011, compared to 10,350 hectares cultivated by our largest competitor. For 2011, the combined crushing capacity of our three Peruvian mills is over six million tons per year, compared to a crushing capacity 1.2 million tons for our largest competitor. We produced approximately 492 thousand tons of sugar in Peru and are also the largest seller of sugar in Peru, with a market share of approximately 46% through our brands Casa Grande, Cartavio and San Jacinto. We are one of the two largest producers of ethanol in Peru, having produced 47.9 million liters of ethanol in 2011, and the largest exporter in Peru, having exported 42.2 million liters of ethanol in 2011.

Low-cost producer and strategically located assets throughout Peru. Our mills and distilleries and the land on which we cultivate and harvest sugarcane are strategically located throughout Peru and benefit from favorable climate and stable water supply. Peru is one of the world’s most productive countries in terms of high crop yields for sugarcane, primarily as a result of:

its favorable climate;

a combination of climate and soil resulting in increased production of sugar per hectare of planted sugarcane;

extensive agricultural properties and operations, with large-scale production;

availability of land for sugarcane production; and

extensive logistical infrastructure, allowing for efficient product distribution.

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Our existing mills, distilleries and other production facilities are located in close proximity to our customers, sugarcane fields owned by us and by other growers, port terminals and other transportation infrastructure and warehouses. For example, our production facilities, Casa Grande, Cartavio and San Jacinto, are located throughout Peru, approximately 63, 54 and 170 kilometers, respectively, from the port of Salaverry, in the La Libertad Region, from which we export sugar and ethanol. Our production facilities are also located close to major roads and our warehouses, thus decreasing delivery time, increasing operating efficiencies, reducing logistics costs and facilitating responses to shifts in demand.

During 2011, 65% of our total sugarcane crushed was harvested from our own fields, with lower costs than the sugarcane supplied by third-party growers. Our expansive owned lands and those of our suppliers are also strategically located within an average of approximately 15 kilometers from our mills and distilleries. This close proximity, coupled with our increasing level of mechanization, reduces our transportation costs.

We are also energy self-sufficient and can generate enough energy to support our milling and distilling operations. We believe our low costs, the increasing mechanization of our agricultural processes, improvements in industrial operations and other factors enable us to manage our operating costs efficiently.

Increasingly mechanized agro-industrial complex. We seek to implement technological innovations in our planting, harvesting and production processes, which has greatly improved our productivity and reduced our operating costs in recent years by, among others, reducing the number of workplace accidents and the number of employees assigned to harvesting. For 2011, our level of mechanized harvesting contributed to reduce our costs associated to our sugarcane harvest and loading operations. During 2011, we harvested approximately 13% of the sugarcane we produced in Peru using mechanized harvesters, which we operate 24 hours per day, seven days per week throughout the harvesting season. We have developed and implemented numerous technological improvements for our mechanized harvesting equipment, such as automatic pilots and use of high precision GPS for soil preparation (including application of fertilizers and pesticides) and harvesting, which has significantly improved our productivity levels, and are also in the process of developing and testing mechanized planting.

Diversified sugarcane varieties. We currently cultivate 19 types of sugarcane, with no single variety representing more than 40% of our total cultivated area. Six of the types of sugarcane we cultivate have been developed to maximize productivity considering the soil and climate conditions in Peru and to be more resistant to pests and disease. Our use of a wide variety of sugarcane plants coupled with our practice of replanting approximately 11% of our sugarcane crop annually, has resulted in historical low infestation and disease rates of our crops and mitigates our exposure to the risk of loss of our crops from pests and disease.

Long operating history and experienced management team. Many of our mills and distilleries have been in operation for over 100 years, including Casa Grande (1860), Cartavio (1782), San Jacinto (1868) and San Isidro (1760). As a result, we benefit from significant operating experience in both the sugar and ethanol industries. We have successfully acquired companies and facilities and expanded our sugar and ethanol operations throughout Peru, and more recently in Ecuador and Argentina. We believe this demonstrates our ability to grow our operations and succeed in the industries in which we operate, reducing our fixed average costs. Our team of seven senior executives has an average of 15 years experience and knowledge in the sugar and ethanol industries and in production and operations. Our management team and our other professionals are highly trained, and we have a results- oriented corporate culture that is focused on reducing operating costs and increasing revenue. We utilize human resource management tools that focus on the integration and motivation of our management team and other professionals to help to maximize their effectiveness.

Efficient use of water. Water is vital to the production of sugarcane, and our investments in water storage and distribution systems allow us to increase our water efficiency and improve our sugarcane production. We are planning to increase the area under cultivation by introducing new pressurized watering systems that will allow us to reduce our usage of water per hectare compared to traditional watering systems. The pressurized water system also decreases the time needed for sugarcane to achieve maturity, allowing us to harvest sugarcane earlier. In addition, our investments in water storage will allow us to manage our supply of water. By building reservoirs to obtain water from the Chicama River when its levels are the highest, we are able to store that water in reservoirs both for future use on existing cultivated lands and to use the reservoirs as water sources to expand cultivation.

7

Our Strategy

We intend to focus on achieving sustainable and profitable growth, further reducing our operating costs and building on our competitive strengths to maintain our market share in Peru and in the other countries in which we operate.

Expand our sugarcane and industrial facilities, increasing utilization of our existing capacity. We currently use approximately 80% of our overall crushing capacity. We have a combined sugarcane crushing capacity of approximately 8.4 million tons per year, and in 2011 we crushed approximately 6.7 million tons of sugarcane. We will seek to increase our sugarcane production and achieve the full utilization of our existing crushing capacity, therefore increasing the productivity of those crops, resulting in more sugarcane volume and expansion of the harvested area close to our mills and distilleries through new plantations. Through more efficient water use, we intend to significantly increase our harvested area over the next five years from approximately 55,733 hectares in 2011. We expect to significantly increase our harvested area mainly through the Olmos Expansion Plan (as defined below), which will add approximately 14,500 hectares to our sugarcane operations, in addition to increasing our harvested area on our existing lands by approximately 12,100 hectares in Peru, approximately 2,276 hectares in Ecuador and approximately 3,200 hectares in Argentina. The potential areas that we have identified for such expansion are within the 50 kilometer radius area where most of our producing land is currently located. Expanding our harvested area and renewing our current harvesting areas will allow us to fully utilize the processing capacity of our mills and distilleries.

Continue to reduce our operating costs and seek to increase our operating efficiencies. We intend to continue to focus on our low-cost operations improving the efficiency of our operations through additional investments in technology, including agricultural and industrial processes, and information technology. As part of this effort, we intend to continue to (1) increase the level of mechanization of our harvesting, (2) test and implement mechanized planting in our land, (3) take advantage of the competitive advantage of climate and soil conditions in Peru, by expanding our sugarcane production to levels that would allow us to fully utilize our existing crushing capacity, (4) invest in the modernization of our equipments and industrial facilities, (5) invest in improving the productivity of our crop and the efficiency of our industrial process and (6) invest in water storage and distribution systems to increase our water efficiency and improve our sugarcane production.

Expand our land portfolio. We plan to further expand our land portfolio. Through a public auction in December 2011, Azucarera Olmos and our affiliate, Gloria S.A., won the rights to purchase 15,600 hectares (11,100 hectares by Azucarera Olmos and 4,500 hectares by Gloria S.A.) of land from Odebrecht, S.A. in Olmos, Lambayeque, Peru (approximately 854 kilometers north of Lima) of the Proyecto Especial de Irrigación Olmos (the “Olmos Expansion Plan”), from which sugarcane greenfield crops will be developed using pressurized water and green harvesting for the production of sugar. According to the auction criterion, water will be available as of March 2014, when construction of the project will be finalized. See “—Recent Developments.”

Participate in the consolidation of the sugar and ethanol sectors. The sugar and ethanol sectors have been consolidating in recent years in Latin America. In addition to acquisitions in Peru, we recently acquired sugar and ethanol companies in Argentina and Ecuador. We closely monitor domestic and foreign acquisition and investment opportunities in these sectors and are currently considering, and will continue to consider in the future, selective acquisitions, partnerships and investment opportunities that offer the right strategic fit for our operations. We may enter into acquisitions or partnerships or make certain investments that could be material to our results of operations.

Focus on environmental and social awareness. We are committed to acting as an environmentally and socially conscious company. Cartavio, San Jacinto and Casa Grande have signed an Environmental Compliance and Management Program (Programas de Adecuación y Manejo Ambiental or “PAMA”) with the Peruvian government regulating mechanical harvesting, burning of sugarcane, and carbon dioxide emissions, formalizing our commitment to reducing environmental impacts. Casa Grande’s PAMA has been approved by the Peruvian government through the Ministry of Agriculture, and San Jacinto’s and Cartavio’s are in the process of obtaining the approval for their respective PAMAs from the Peruvian government. We continue to invest in the mechanization of our harvests, which is not only cost-efficient, but also reduces our emission levels and decreases the burning of sugarcane fields for manual harvesting, and to improve and develop new training programs for our employees, as well as for the communities where we operate in.

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Recent Developments

Azucarera Olmos was incorporated on May 9, 2012 and it has committed to purchase 11,100 hectares and Grupo Gloria, through Gloria S.A., has committed to purchase 4,500 hectares, for the Olmos Expansion Plan. We have provided a US$49.8 million guarantee for the financing used to purchase the land. The sale contract was signed on May 30, 2012, and a payment schedule is expected to be determined in the second half of August 2012, with land preparation expected to begin in September 2012 and sugar production by 2016.

Grupo Gloria and Our History

We are part of the Grupo Gloria conglomerate, which is comprised of operating companies, including among many others, the Guarantors, Gloria S.A. and Yura S.A., under the common control of Vito Rodríguez Rodríguez and Jorge Rodríguez Rodríguez, with operations in various industries throughout Latin America, including dairy, food, cement, paper, packaging, agriculture and transportation.

Grupo Gloria, through Trupal S.A. was involved in the packaging business which used paper as a raw material. Trupal S.A. began to research the use of bagasse as a raw material used in the production of paper and as a result decided to enter into the sugarcane business in order to produce bagasse. In October 2005, Coazucar, a company formed to manage the agro-industrial division of Grupo Gloria, bought an ownership interest in Casa Grande S.A.A. and in January 2006, acquired the majority of Casa Grande S.A.A.’s shares, laying the foundation for Coazucar’s sugar business.

Since 2006, Coazucar has made a number of acquisitions of local Peruvian sugarcane producers. In 2007, Coazucar purchased a majority ownership interest in Complejo Agroindustrial Cartavio S.A.A. from Azucagro S.A., along with a direct ownership interest in its subsidiary Cooperativa Agraria Sintuco Ltda. In 2009, Coazucar also purchased a majority ownership interest in Agroindustrias San Jacinto S.A.A. from Grupo Picasso S.A.C. In 2011, Coazucar undertook several international acquisitions beginning with the purchase of an ownership interest in Ingenio La Troncal, an Ecuadorian sugar company. In that same year, Coazucar also purchased a majority ownership interest in Ingenio San Isidro, Argentina’s largest sugar producer.

Corporate Information

Our executive offices are located at Av. República de Panamá 2461, La Victoria, Lima 13, Peru. Our telephone number is +51 (1) 470-7170. Our website is http://www.coazucar.com. Any information that is included on or linked to on our website or which may be accessed through our website is not a part of this offering memorandum and is not included herein by reference or otherwise.

9

Our Corporate Structure

The following is a chart of our current ownership and corporate structure.

Casa Grande

Cartavio

Sintuco Chiquitoy (4)

San Jacinto San Isidro La Troncal

57.1% 87.2% 82.6%

50.0% 57.7% 14.6%

60.0%

Peru Argentina Ecuador

Clarcrest Investments S.A.(1)

94.1%(2)

36.4% (3)

Azucarera Olmos

100.0%

(1) Incorporated under the laws of the Republic of Panama. (2) Clarcrest Investments S.A. owns 270,135,573 (or 94.1%) shares of Coazucar. Vito Rodríguez Rodríguez and Jorge Rodríguez Rodríguez

each own 8,438,000 (or 2.94%) shares of Coazucar. Maningham Holding S.A. owns one share of Coazucar. (3) Coazucar owns a 52% interest in a trust vehicle. The trust has a 70% ownership interest in La Troncal. (4) Chiquitoy’s results of operations are not consolidated into our results of operations because we do not own a majority ownership interest in

Chiquitoy.

Maningham Holding S.A.(1)

100.0%

Jorge Rodríguez Rodríguez

Vito Rodríguez Rodríguez

50.0% 50.0%

10

THE OFFERING

The following summary contains basic information about the notes and the guarantees and is not intended to be complete. It does not contain all of the information that is important to you. For a more complete understanding of the notes, please refer to the section of this offering memorandum entitled “Description of the Notes.”

Issuer ......................................................... Corporación Azucarera del Perú S.A.

Guarantors ................................................. Cartavio S.A.A., Agroindustrias San Jacinto S.A.A., Casa Grande S.A.A. and Azucarera Olmos S.A., each, a company incorporated in Peru.

Notes Offered ............................................ US$325,000,000 aggregate principal amount of 6.375% senior notes due 2022.

Maturity..................................................... August 2, 2022.

Interest....................................................... The notes will bear interest at the rate of 6.375% per annum, payable semi-annually in arrears on each February 2 and August 2 of each year, beginning on February 2, 2013.

Issue Price ................................................. 99.091%, plus accrued interest, if any, from August 2, 2012.

Guarantees................................................. Cartavio, San Jacinto and Azucarera Olmos will unconditionally, irrevocably and fully guarantee all of the Issuer’s obligations pursuant to the notes. Casa Grande will unconditionally, irrevocably and partially guarantee all amounts due on the notes, including principal, interest, premium, if any, and any other amounts, in an initial amount equal to US$162,500,000, as subsequently adjusted as provided in “Description of the Notes—Note Guarantees” and “—Principal, Maturity and Interest.” See “Description of the Notes—Note Guarantees.”

In the event that we acquire or redeem any notes and such notes are no longer considered outstanding under the indenture governing the notes, the amount of Casa Grande’s guarantee will be reduced on a proportional basis.

Ranking ..................................................... The notes and the guarantees will be senior unsecured obligations and: (i) will rank equally with all of our and the Guarantors’ respective existing and future unsecured and unsubordinated indebtedness, other than with respect to certain obligations given preferential treatment pursuant to the laws of Peru; (ii) will be effectively subordinated to all of our and the Guarantors’ respective existing and future secured indebtedness to the extent of the assets securing such indebtedness and other liabilities; (iii) will be structurally subordinated to the existing and future indebtedness and other liabilities of our subsidiaries which are not guarantors and Casa Grande to the extent that any obligations under the notes exceed the amount of its partial guarantee of an initial amount equal to US$162,500,000 and (iv) will not provide holders with any direct claims on the assets of any non-guarantor unless or until such entity becomes a guarantor.

As of March 31, 2012, after excluding intercompany balances and intercompany guarantees:

on a consolidated basis, we and our subsidiaries had S/.805.6 million (US$302.0 million) of indebtedness outstanding, of which S/.619.2 million (US$232.2 million) was secured indebtedness and S/.0 would have been subordinated in right of payment to the notes; and

on a combined basis, the Guarantors had S/.264.3 million (US$99.1 million) of indebtedness outstanding, of which S/.199.5 million (US$74.8 million) was secured indebtedness and S/.0 would have been

11

subordinated in right of payment to the Guarantees;

Casa Grande had S/.106.8 million (US$40.0 million) of indebtedness outstanding, of which S/.97.8 million (US$36.7 million) was secured indebtedness and S/.0 million would have been subordinated in right of payment to its Guarantee; and

on a combined basis, the restricted subsidiaries other than the Guarantors, had total liabilities of S/.568.1 million (US$213.0 million), including S/.306.6 million (US$115.0 million) of indebtedness, and total assets of S/.1,425.8 million (US$534.6 million).

For the three months ended March 31, 2012, our non-guarantor subsidiaries and Casa Grande generated 24.1% and 40.6%, respectively, of our consolidated revenues and 14.8% and 51.3%, respectively, of our consolidated EBITDA.

Optional Redemption ................................ On or after August 2, 2017, we may redeem the notes, in whole or in part, provided at least US$100 million in aggregate principal amount of the notes remains outstanding (not including notes held by us or our affiliates), at the redemption prices set forth in “Description of the Notes—Optional Redemption.”

Before August 2, 2017, we may also redeem the notes, in whole or in part, provided at least US$100 million in aggregate principal amount of the notes remains outstanding (not including notes held by us or our affiliates), at a redemption price based on a “make-whole” premium.

In addition, at any time prior to August 2, 2015, we may redeem up to 35% of the aggregate principal amount of the notes (including any additional notes), with the net proceeds from certain equity offerings by us, at a price of 106.375% of the aggregate principal amount thereof, plus accrued and unpaid interest, and any Additional Amounts.

Change of Control Offer............................ Upon the occurrence of a change of control repurchase event (including both a change of control and a rating downgrade event), we will be required to make an offer to repurchase all notes then outstanding at 101% of their principal amount, plus accrued and unpaid interest to the repurchase date and any Additional Amounts. See “Description of the Notes—Repurchase at the Option of Holders—Change of Control.”

Additional Amounts .................................. All payments in respect of the notes, whether of principal or interest, will be made without withholding or deduction for or on account of any present or future taxes, duties, levies, or other governmental charges and any interest, penalties or other liabilities with respect thereto, except to the extent required by applicable law. If withholding or deduction is required by applicable law, subject to certain exceptions and limitations, we will pay additional amounts so that the net amount received by the holders of the notes is no less than the amount they would have received in the absence of such withholding or deduction. See “Description of the Notes—Additional Amounts.”

Optional Tax Redemption ......................... The notes are redeemable at our option, in whole but not in part, at any time, at the principal amount thereof plus accrued and unpaid interest and any Additional Amounts due thereon if certain changes in applicable tax laws occur. See “Description of the Notes—Optional Tax Redemption.”

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Covenants .................................................. The indenture governing the notes contains covenants that will limit our and our restricted subsidiaries’ ability to, among other things:

incur additional debt or issue certain preferred shares;

pay dividends on or make other distributions in respect of our capital stock or make other restricted payments;

make certain investments;

sell certain assets;

create liens on certain assets to secure debt;

consolidate, merge, sell or otherwise dispose of all or substantially all of our assets;

enter into certain transactions with our affiliates; and

designate our subsidiaries as unrestricted subsidiaries.

These covenants are subject to a number of important limitations and exceptions. Many of these covenants will cease to apply to the notes at all times after the notes have investment grade ratings. See “Description of the Notes—Certain Covenants.” In particular, although the indenture governing the notes will contain restrictions on the incurrence of additional debt, these restrictions are subject to a number of important qualifications and exceptions, and the debt incurred in compliance with these restrictions could be substantial.

Events of Default....................................... For a discussion of certain events of default that will permit acceleration of the principal of the notes plus accrued and unpaid interest, if any, and any other amounts due with respect to the notes, see “Description of the Notes—Events of Default and Remedies.”

No Registration Rights .............................. We will not register the notes for resale under the Securities Act or the securities laws of any other jurisdiction, other than Peru, or offer to exchange the notes for registered notes under the Securities Act or the securities laws of any other jurisdiction. See “Risk Factors—Risks Relating to the Notes and the Guarantees—There are restrictions on your ability to transfer or resell the notes without registration under applicable securities laws.”

Further Issuances ...................................... Subject to the covenants in the indenture governing the notes, we may from time to time, without the consent of the holders of the notes, issue further notes of the same series having the same terms and conditions as the notes in all respects, including (i) full and unconditional guarantees of any such additional notes by Cartavio, San Jacinto and Azucarera Olmos and (ii) a partial and unconditional guarantee of any such additional notes by Casa Grande in an amount equal to one half of the aggregate principal amount of such additional notes. Any further issue will be consolidated with, and form a single series with, the notes sold in this offering.

Book-Entry System; Delivery and Form and Denomination of the Notes .................

The notes will be issued only in fully registered form, without coupons, in the form of beneficial interests in respect of one or more global securities (the “Global Notes”) in denominations of US$100,000 and integral multiples of US$1,000 thereof. Beneficial interests in respect of the Global Notes will be shown on, and transfers thereof will be effected only through, the book-entry records maintained by DTC and its participants, including Euroclear and

13

Clearstream. The notes will not be issued in definitive form except under certain limited circumstances.

Use of Proceeds ......................................... We intend to use the net proceeds from the sale of the notes, after the deduction of certain fees and expenses in connection with this offering to (i) repay approximately US$148 million of the outstanding indebtedness of the Issuer, Cartavio S.A.A., Agroindustrias San Jacinto S.A.A. and Casa Grande S.A.A., (ii) purchase land in connection with the Olmos Expansion Plan, and (iii) use the remainder for capital expenditures and general corporate purposes for our operations in Peru.

Governing Law.......................................... The notes, the guarantees and the indenture will be governed by the laws of the State of New York.

Listing........................................................ Application has been made to the Irish Stock Exchange for the approval of this document as Listing Particulars. Application has been made to the Irish Stock Exchange for the notes to be admitted to the Official List and to trading on the Global Exchange Market which is the exchange regulated market of the Irish Stock Exchange. However, we cannot assure you that the listing application will be approved.

Peruvian SBS Registration ........................ The notes have been provisionally registered with the Foreign Investment and Derivatives Instruments Registry (Registro de Instrumentos de Inversión y de Operaciones de Cobertura de Riesgo Extranjeros) of the SBS, in order to make the notes eligible for Peruvian pension fund investment, as required by Peruvian legislation. This registration was provisionally approved, and definitive registration is conditioned on the delivery of the final offering memorandum and other ancillary documents to the SBS.

Peruvian SMV Registration....................... The notes and this offering memorandum have been registered with the SMV. We will be required to file certain information in Spanish with the SMV, such as quarterly and annual reports and notices of material events (Hechos de Importancia). All such reports and notices are available at www.smv.gob.pe. The documents filed with the SMV are not and will not form part of this offering memorandum and are not incorporated by reference herein.

Trustee, Registrar, Paying Agent and Transfer Agent .......................................

Citibank, N.A.

Irish Listing Agent..................................... Arthur Cox Listing Services Limited

Transfer Restrictions ................................. The notes have not been registered under the Securities Act and are subject to restrictions on transfer and resale. See “Transfer Restrictions” and “Plan of Distribution.”

Risk Factors............................................... Investing in the notes involves substantial risks and uncertainties. See “Risk Factors” and other information included in this offering memorandum for a discussion of factors you should carefully consider before deciding to invest in the notes.

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SUMMARY FINANCIAL AND OTHER INFORMATION

The following summary financial data has been derived from (1) our unaudited condensed consolidated interim financial statements as of March 31, 2012 and for the three months ended March 31, 2012 and 2011 and (2) our audited consolidated financial statements as of December 31, 2011, 2010 and January 1, 2010 (transition date) and for the years ended December 31, 2011 and 2010, in each case included elsewhere in this offering memorandum. Our financial statements have been prepared in accordance with IFRS, as issued by the IASB. The unaudited condensed consolidated interim financial statements and the notes thereto have been condensed, but contain all adjustments, including adjustments of a normal and recurring nature, necessary for a fair presentation of our financial position and results of operation. The results for the three months ended March 31, 2012 are not necessarily indicative of the results to be expected for the entire year ending March 31, 2012.

This financial information should be read in conjunction with “Presentation of Financial and Other Information,” “Selected Financial and Other Information,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and the related notes thereto, which are included elsewhere in this offering memorandum.

As of and for the Three Months


Ended December 31,

2012 2012 2011 2011 2011 2010





Consolidated Statement of Comprehensive Income:

(unaudited)

Sales of products 141,427 377,185 309,162 483,833 1,304,415 937,854 Cost of products sold (85,548) (228,157) (145,824) (261,583) (705,229) (498,467) Gross profit 55,879 149,028 163,338 222,250 599,186 439,387 Initial recognition and change in fair value of

biological assets(1) 66 175 31,786 69,865 188,355 177,852

Profit before operating expenses 55,945 149,203 195,124 292,115 787,541 617,239 Selling expenses (3,227) (8,606) (4,710) (11,220) (30,248) (18,563) Administrative expenses (9,725) (25,936) (8,762) (24,624) (66,386) (42,924) Other operating expenses, net (722) (1,924) (1,364) (58) (157) (19,623) Profit from operation before financing and

taxation 42,271 112,737 180,288 256,213 690,750 536,129 Financial income 190 506 787 913 2,461 1,621 Financial expenses (6,484) (17,294) (7,591) (17,599) (47,446) (45,388) Exchange difference, net 2,237 5,966 268 6,808 18,354 11,096 Income attributable to associate 656 1,750 — — — — Profit before income tax 38,870 103,665 173,752 246,335 664,119 503,458 Income tax expense (6,103) (16,277) (25,956) (38,792) (104,584) (75,769) Profit for the period 32,767 87,388 147,796 207,543 559,535 427,689 Exchange differences on translating foreign

operations, net of deferred income tax (1,933) (5,155) — (4,947) (13,336) —

Fair value change in cash flow hedge, net (82) (219) (1,285) (325) (877) (5,141) Total comprehensive income for the year 30,752 82,014 146,511 202,271 545,322 422,548

________________________________ (1) See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Financial Presentation and Accounting

Policies—Valuation of biological assets” for a description of how we calculate the fair value of biological assets using the criteria set out in IAS 41, which requires that a biological asset should be measured at its fair value less the estimated point-of-sale costs.

15

As of and for the Three

Months Ended March 31, As of and for the Years

Ended December 31,

2012 2012 2011 2011 2010

As of January 1,

2010


(in thousands of S/., except as

indicated)



Consolidated Statement of Financial Position:

(unaudited)

Non-current assets Property, plant and equipment 1,056,169 2,816,804 1,040,651 2,805,594 2,025,253 1,907,566 Intangible assets 76,166 203,135 75,195 202,727 130,743 131,477 Biological assets 161,256 430,069 140,570 378,978 155,721 82,726 Investments in associates 11,834 31,560 11,058 29,811 1,303 1,306 Deferred income tax assets 3,151 8,405 2,378 6,410 3,470 3,650 Trade and other accounts receivables 2,612 6,966 3,050 8,224 7,982 20,446 Total non-current assets 1,311,188 3,496,939 1,272,902 3,431,744 2,324,472 2,147,171

Current assets Biological assets 93,451 249,234 103,191 278,204 222,099 111,105 Inventories 100,336 267,595 111,423 300,395 80,870 76,385 Trade and other accounts receivables 45,939 122,520 43,515 117,317 102,017 84,938 Cash and cash equivalents 71,916 191,800 42,388 114,277 70,982 21,367 Total current assets 311,642 831,149 300,517 810,193 475,968 293,795 Total assets 1,622,830 4,328,088 1,573,419 4,241,937 2,800,440 2,440,966

Equity Share capital 107,616 287,011 106,458 287,011 287,011 270,136 Cumulative translation adjustment (4,648) (12,397) (3,316) (8,941) — — Legal and other reserves 16,457 43,892 16,335 44,039 44,674 21,299 Retained earnings 416,478 1,110,748 390,588 1,053,024 687,375 425,181 Equity attributable to equity holders of

the parent 535,903 1,429,254 510,065 1,375,133 1,019,060 716,616

Non-controlling interest 405,884 1,082,492 412,026 1,110,822 521,008 408,075 Total equity 941,787 2,511,746 922,091 2,485,955 1,540,068 1,124,691

Non-current liabilities Borrowings 91,188 243,198 96,429 259,973 347,284 284,201 Trade and other accounts payables 112,451 299,906 109,810 296,047 43,153 192,187 Provisions and other liabilities 2,529 6,745 3,177 8,566 9,086 8,197 Deferred income tax liabilities 175,655 468,472 174,511 470,481 353,854 329,574 Derivative financial instruments — — — — 15,074 15,183 Total non-current liabilities 381,823 1,018,321 383,927 1,035,067 768,451 829,342

Current liabilities Borrowings 112,503 300,046 108,181 291,657 186,335 159,476 Trade and other accounts payables 179,510 478,754 152,961 412,384 302,425 326,310 Provisions and other liabilities 3,418 9,117 2,343 6,316 3,161 1,147 Derivative financial instruments 3,789 10,104 3,916 10,558 — — Total current liabilities 299,220 798,021 267,401 720,915 491,921 486,933

Total liabilities 681,043 1,816,342 651,328 1,755,982 1,260,372 1,316,275 Total equity and liabilities 1,622,830 4,328,088 1,573,419 4,241,937 2,800,440 2,440,966

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Ended December 31, 2012 2012 2011 2011 2011 2010 (in thousands





Other data: EBITDA(1) ....................................................... 51,979 138,628 164,151 214,587 578,526 416,977 EBITDA margin(2) ........................................... 36.8% 36.8% 53.1% 44.4% 44.4% 44.5%Total debt(3) ..................................................... 302,049 805,566 302,946 816,744 533,619 Total debt / EBITDA(4) .................................... 1.46x 1.46x 1.41x 1.41x 1.28xNet debt(5) ........................................................ 230,133 613,766 260,558 702,467 462,637 Net debt / EBITDA(6)....................................... 1.11x 1.11x 1.21x 1.21x 1.11xFixed Charge Coverage Ratio(7)....................... 9.75x 9.75x 12.25x 12.25x 9.22xConsolidated Leverage Ratio(8)........................ 1.45x 1.45x 1.41x 1.41x 1.27x

________________________________ (1) EBITDA is calculated using profit from operations for the period before financing and taxation without initial recognition and change in fair

value of biological asset, added to depreciation and amortization. See “Presentation of Financial and Other Information.” We calculate EBITDA as follows:








Profit from operation before financing and taxation ............................................................

42,271

112,737

180,288

256,213

690,750

536,129

(-) Initial recognition and change in fair value of biological assets.................................

(66)

(175)

(31,786)

(69,865)

(188,355)

(177,852)

(+) Depreciation .............................................. 9,686 25,832 15,454 27,899 75,215 57,672 (+) Amortization.............................................. 88 234 195 340 916 1,028 EBITDA........................................................... 51,979 138,628 164,151 214,587 578,526 416,977



concluded period of four consecutive fiscal quarters, including the four consecutive fiscal quarters ended March 31, 2012. (7) See “Description of the Notes—Certain Definitions” for the definition of Fixed Charge Coverage Ratio. (8) See “Description of the Notes—Certain Definitions” for the definition of Consolidated Leverage Ratio.

17

RISK FACTORS

Prospective purchasers of notes should carefully consider the risks discussed below, as well as the other information in this offering memorandum, before deciding to purchase any notes. Our business, results of operations, financial condition or prospects could be negatively affected if any of these risks occurs and, as a result, the trading price of the notes could decline and you could lose all or part of your investment. The risk factors discussed below are not the only risks that we and the Guarantors face, but are the risks that we currently consider to be material. There may be additional risks that we currently consider immaterial or of which we are currently unaware, and any of these risks could have similar effects to those set forth below.

Risks Related to Our Business and the Sugar and Ethanol Industries

Fluctuations in the price of our products, as well as Peruvian and global economic, political and financial uncertainties, may materially and adversely affect us.

The sugar and ethanol industries, both globally and in Peru, have historically been cyclical and sensitive to domestic and international changes in supply and demand, causing fluctuations in the prices of these products, as well as in our profit margins. In addition, sugar and ethanol are commodities and are subject to price fluctuations that generally affect commodities. Various factors beyond our control contribute to the volatility in the prices of sugar, ethanol and other sugarcane by-products, including:

the demand for sugar and ethanol both in Peru and abroad;

climatic conditions and natural disasters in areas where sugarcane is cultivated;

the production capacity of our competitors;

government incentives and subsidies to promote the production, domestic sale, export and consumption of these products both in Peru and in other countries that produce sugar and ethanol;

the availability of substitutes for sugar, ethanol and other sugarcane by products such as saccharine and high fructose syrup (“HFCS”); and

developments in trade negotiations, including through the World Trade Organization (the “WTO”).

In addition, sugar is traded on commodities and futures exchanges, and thus, is subject to speculative trading, which may affect prices in a manner that may materially and adversely affect us.

The prices of sugar and ethanol sold by us are based on prevailing market prices, and thus, are subject to macroeconomic factors that may affect our industry, Peru and/or the global economy. Any significant and prolonged decline in sugar and/or ethanol prices could materially and adversely affect us. There can be no assurance that we will be able to maintain sales at generally prevailing market prices for sugar and ethanol in Peru, nor that we will be able to sell or export sufficient quantities of sugar and ethanol to assure an appropriate domestic and export market balance.

In addition, we may use financial instruments to protect ourselves against the risk of fluctuations in sugar and ethanol prices. In the event that market prices exceed the price set under future contracts we enter into, we may be materially and adversely affected.

We may not be successful at reducing our operating costs and increasing our operating efficiencies.

We must continue to reduce our operating costs and increase our operating efficiencies to achieve further cost savings in future periods. We cannot assure you that we will be able to achieve all of the cost savings that we expect to realize from current initiatives. In particular, we may be unable to implement one or more of our initiatives successfully or we may experience unexpected cost increases that offset the savings that we achieve. Our failure to realize cost savings may adversely affect our results of operations. Any reduction in the amount of sugarcane or sugar that we can cultivate and purchase in a given harvest could have a material and adverse effect on our business. Our sugar production depends on the volume and sucrose content of the sugarcane that we cultivate. Any reduction

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in the amount of sugar recovered could have a material and adverse affect on our results of operations. We may be adversely affected by a shortage of sugarcane or by high sugarcane costs.

Sugarcane is the principal raw material used for the production of sugar and ethanol and any limitation on our ability to obtain sugarcane may materially and adversely affect us.

During 2011, the cost of sugarcane represented 59% of the sale cost of sugar in Peru. Approximately 65% of the sugarcane we used in our production was harvested from our own fields, and the remaining 35% was bought from independent farmers, to whom we pay the amount equivalent to 60% of the value of the sugarcane, as determined by sucrose levels. We do not foresee any shortage in the supply of sugarcane, however, any limitation on our ability to obtain sugarcane may affect us.

A reduction in the productivity of our sugarcane crop and the sugarcane that we purchase may materially and adversely affect us.

Our sugar production depends on the volume and sucrose content of the sugarcane that we cultivate or that is supplied to us by growers located in the vicinity of our mills and distilleries. Crop yields and sucrose content depend primarily on geographic factors, such as land composition and topography, weather conditions, such as the amount of rainfall and average temperatures, agricultural techniques that may be employed and the variety of sugarcane planted. Weather conditions have historically caused volatility in the ethanol and sugar industries and, consequently, in our results of operations by causing crop failures or reduced harvests. Future weather patterns may reduce the amount of sugar or sugarcane that we can recover in a given harvest or its sucrose content. Accordingly, many factors beyond our control, including drought, frost and/or sugarcane pests and diseases may materially and adversely affect the quantity and quality of sugarcane that we produce and purchase from third parties, our sugar and ethanol production volumes and our company.

We face significant competition in the sugar and ethanol industries, which may materially and adversely affect us.

The sugar and ethanol industries are highly competitive. Domestically, we compete with numerous small- and medium-size sugar and ethanol producers. Currently, our main competitors in Peru are Empresa Agroindustrial Laredo S.A.A. (Grupo Manuelita of Colombia), Empresa Agroindustrial Pomalca S.A.A. and Empresa Agroindustrial Tuman S.A.A. (Grupo Oviedo) and Agro Industrial Paramonga S.A.A. (GrupoWong).

In the event that one or more of our competitors increase their financial and other resources, present a greater breadth of products than we do or adopt more successful sales or pricing policies, our competitive position and our business may be materially and adversely affected. If we are unable to remain competitive with our competitors, we may be materially and adversely affected.

Alternative sweeteners have negatively affected demand for our sugar products in Peru and other countries, which could have a material and adverse affect on us.

We believe that the increased use of alternative sweeteners, especially artificial alternative sweeteners such as aspartame, saccharine and HFCS, has adversely affected the growth of the overall demand for sugar in Peru and the rest of the world. For example, soft drink bottlers in Peru and many other countries have switched from sugar to, or increased consumption of, alternative sweeteners. A substantial decrease in sugar consumption, or the increased use of alternative or artificial sweeteners, would decrease demand for our sugar products and could result in lower growth in our sales of products and overall financial performance.

We may be adversely affected by seasonality, which could negatively impact us.

Our businesses in Argentina and Ecuador are subject to seasonal trends based on the sugarcane harvesting cycle in those countries, which begins in Ecuador and Argentina in July and May, respectively. This cycle creates seasonal fluctuations in our inventory (which usually peaks from October to November) to cover sales between the sugarcane harvest, our sales of products and gross profit. In addition, seasonality affects our level of outstanding indebtedness and working capital, as we generally incur more indebtedness to meet our greater working capital needs during the harvesting period, which increases our financial expenses during the harvest period.

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Our results of operations, including for current periods, may be adversely affected by market conditions.

Our results of operations are dependent on a variety of factors in Peru, Argentina and Ecuador, including local and international demand of sugar and ethanol and other factors. In recent periods in 2012, our results of operations have been affected by, among other things, (i) the impact of integration and high level administrative costs associated with acquisitions of La Troncal and San Isidro in the second half of 2011, (ii) lesser margins of our acquired companies pending possible improvement through synergies and other positive effects of our consolidated operations, (iii) the impact of valuation adjustments associated with IAS 41 (See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Financial Presentation and Accounting Policies—Valuation of biological assets”) and (iv) the impact of recurrent scheduled maintenance at certain of our mills during the second quarter of each year (which necessarily lowers income during such quarter). These and other factors can be expected to adversely affect the level of our profit for the period in future financial quarterly periods in 2012 pending our efforts to increase for 2012 our EBITDA. In the near term, it is possible we may continue to experience a lessening of our total consolidated profit from operations compared to the comparable period of the prior year and consistent with recent periods.

Based on the factors mentioned herein, including the factors that affected our results for the three month period ended March 31, 2012 described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” we believe that our EBITDA for the six months ended June 30, 2012 will decrease when compared to the six months ended June 30, 2011. We also believe our EBITDA for the three months ended June 30, 2012 will decrease when compared to the three months ended March 31, 2012 for similar reasons. We expect however, that our EBITDA for the three months ended June 30, 2012 will be substantially in line with our EBITDA for the three months ended June 30, 2011.

Government policies and regulations affecting the agricultural sector and related industries could materially and adversely affect us.

Our industry is subject to numerous statutes, rules, and regulations, both within Peru and internationally. To operate our farms, mills and distilleries, we must comply with certain administrative requirements, such as acquiring appropriate permits, licenses, concessions, authorizations, certifications and registrations, some of which are granted for fixed terms and therefore require periodic renewal. Changes to any of the laws, regulations, rules, or policies regarding the licensing, harvesting, production, processing, preparation, distribution, packaging, or labeling of our products, or environmental matters, or a stricter interpretation or enforcement thereof, or a delay obtaining or renewing administrative requirements, may increase our operating costs or impose restrictions on our operations which, in turn, could have a material and adverse affect on us.

Agricultural production and trade flows are also significantly affected by government policies and regulations. Governmental policies, such as taxes, tariffs, duties, subsidies and import and export restrictions on agricultural commodities and products made from these commodities can adversely affect the agricultural industry and its profitability, the allocation of agricultural resources, the location and size of crop production, the trading of unprocessed or processed commodity products, and the type and volume of imports and exports, which may materially and adversely affect us.

Future government policies in Peru and elsewhere may adversely affect the supply, and demand for, and prices of, our products or restrict our ability to do business in our existing and target markets, which could materially and adversely affect our financial performance. Sugar prices, like the prices of many other staple goods in Peru, were historically subject to controls imposed by the Peruvian government. Although sugar prices in Peru have not been subject to price controls since 1990, additional measures may be imposed in the future, such as in Ecuador and Argentina, where sugar prices are currently subject to governmental control. Any changes affecting governmental policies and regulations regarding ethanol, sugar or sugarcane in Peru may materially and adversely affect our company.

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IFRS accounting standards require us to make numerous estimates in the compilation and preparation of our financial results and limit the comparability of our financial statements to similar issuers using Generally Accepted Accounting Principles in United States (“U.S. GAAP”) measurements.

IFRS accounting standards for agricultural companies require that we make assumptions and estimates relating to, among other things, future agricultural commodity yields, prices, and production costs extrapolated through a discounted cash flow method. For example, the value of our biological assets with a production cycle lasting more than one year generated initial recognition and changes in fair value of biological assets amounting to S/.0.2 million (US$0.1 million) and S/.188.4 million (US$69.9 million) for the three months ended March 31, 2012 and the year ended December 31, 2011, respectively. These assumptions and estimates, and any changes to such prior estimates, directly affect our reported results of operations. If actual market conditions differ from our estimates and assumptions, there could be material adjustments to our results of operations. In addition, the use of such discounted cash flow method utilizing these future estimated metrics differs from U.S. GAAP. As a result, our financial statements and reported earnings are not directly comparable to those of similar companies in the United States. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Financial Presentation and Accounting Policies—Valuation of biological assets”.

We are subject to extensive environmental and labor regulations and may be exposed to liabilities and potential costs for environmental and labor compliance.

We are subject to Peruvian state and local environmental protection and health and safety laws and regulations that govern, among other things:

the generation, storage, handling, use and transportation of hazardous materials;

the emission and discharge of hazardous materials into the ground, air or water;

the use of natural resources; and

the health and safety of our employees.

We are regularly inspected by various governmental environmental protection agencies in Peru, Argentina and Ecuador to ensure our compliance with applicable laws and regulations. We are also required to obtain permits from governmental authorities for certain aspects of our operations. In connection with our mills and distilleries in Peru, starting in 2011, Cartavio, San Jacinto and Casa Grande signed PAMAs with the Peruvian government regarding mechanical harvesting, burning of sugarcane, and carbon dioxide emissions over a 33-year period. Casa Grande’s PAMA has been approved by the Peruvian government through the Ministry of Agriculture, and San Jacinto’s and Cartavio’s are in the process of obtaining the approval for their respective PAMAs from the Peruvian government. Upon the expiration of the PAMAs, we will have to comply with Peruvian environmental legislation relating to emissions and air quality in force at that time.

Non-compliance with environmental laws and regulations may require us to remedy any environmental damage, as well as subject us to criminal and administrative penalties, such as fines and/or the suspension of our activities. In addition, we may be strictly liable for certain environmental damages caused by third-parties on or related to property that we acquired from such third parties. In addition, any changes in applicable environmental regulation or changes in its interpretation may lead to an increase in compliance costs, which may materially and adversely affect us. Environmental protection laws in Peru are becoming more strict, therefore our expenses in complying with our environmental obligations may significantly increase in the future. See “Regulatory Overview.”

Additionally, according to the Peruvian Safety and Health at Work Law (Ley de Seguridad y Salud en el Trabajo), Law No. 29783, we are obligated to adopt the necessary measures to guarantee the health and safety of employees, and third parties, in our production facilities or workplaces. In order to fulfill such regulations, we maintain (i) an Internal Regulation of Safety and Health at Work (Reglamento de Seguridad y Salud en el Trabajo) and (ii) a special committee whose members include representatives of our employees and management, which is in charge of monitoring the proper application of the Internal Regulation Safety and Health at Work and Peruvian law.

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If an adverse final decision is issued in an administrative process, we could be exposed to penalties and sanctions derived from the violation of any of these laws and regulations, including the payment of fines, and, depending on the level of severity applied to the infraction, the closure of facilities and/or stoppage of activities and the cancellation or suspension of the registrations, authorizations and licenses, which may also result in temporary interruption or discontinuity of activities in our farms, mills and distilleries, and materially and adversely affect us.

Government laws and regulations governing the burning of sugarcane could materially and adversely affect our business or financial performance.

We currently harvest approximately 100% of our sugarcane in Peru and 87% of our sugarcane in Ecuador by burning the crop, which removes leaves and destroys insects and other pests. The PAMAs signed with the Peruvian Ministry of Agriculture gradually reduce our ability to burn sugarcane. We do not burn sugarcane in Argentina.

We currently incur significant costs to comply with these laws and regulations, and there is a likelihood that increasingly stringent regulations relating to the burning of sugarcane will be imposed by the governmental authorities of Peru, Ecuador and Argentina in the near future. As a result, our costs to comply with existing or new laws or regulations are likely to increase, which could materially and adversely affect us.

Any failure to comply with these laws and regulations may subject us to legal and administrative actions. These actions can result in administrative, civil or criminal penalties.

Governmental price controls may materially and adversely affect us.

In order to protect domestic farmers, the Peruvian government sets every week the Range of Prices (Bandas de Precios) that can be charged by importers for basic agricultural commodities, including sugar, and publishes the prices in the newspaper Diario Oficial El Peruano. The price range set in the Bandas de Precios do not necessarily reflect the global market prices of agricultural commodities. For the last three years, the Peruvian price of sugar has fluctuated within the range of prices set in the Bandas de Precios. However, in the first week of July 2012, the Peruvian price of sugar dropped below the low band of the Bandas de Precios. As a result, if the low band of the Bandas de Precios is set higher than global commodities prices, foreign producers may increase their imports to Peru in order to sell their products at above-market prices, resulting in increased competition to us. Furthermore, if the low band of the Bandas de Precios is lowered or the Bandas de Precios is eliminated altogether, the price of the sugar we sell in Peru may be reduced. Decisions by the Peruvian government regarding the Bandas de Precios may materially and adversely affect us.

Suspension, cancellation or decrease in tax incentives that currently benefit us may materially and adversely affect us.

Our mills located in Peru currently benefit from certain tax incentives granted by the Peruvian government through the Agricultural Sector Promotion Law (Ley No. 27360 - Ley de Promoción del Sector Agrario). In connection with the income tax owed by our Peruvian operating subsidiaries, a reduced corporate income tax rate of 15% and a special annual depreciation rate of 20% for hydraulic infrastructure and irrigation works is assessed on our operating subsidiaries. These benefits were granted in 1997 and currently extend through 2021. The reduced tax rates from which we benefit have definite terms and we may not be able to renew or replace such benefits in the future.

In order to qualify for, and maintain, such tax incentives, we are required to comply with a number of obligations (including labor, tax, social security and environmental protection obligations). Noncompliance with such obligations may result in loss or suspension of incentives as well as the imposition of fines. We may also be obligated to pay in full all the taxes owed and interest thereon.

We cannot assure you that we will maintain, or qualify for, such benefits in the future, until they end pursuant to applicable law or that we will be able to renew or replace such benefits in the future.

In addition, there is a risk that modifications of tax laws or judicial decisions may prohibit, interrupt, limit or change the use of existing tax incentives as of the date of this offering memorandum. Any suspension, early maturity, reimbursement, limitation or impossibility to renew such tax benefits may materially and adversely affect

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us. If we lose our tax benefits and incentives or are unable to comply with future requirements, this could have a material adverse effect on us.

Any failure to maintain or obtain due authorizations for the generation of electricity may materially and adversely affects us.

We believe we are in compliance in all material respects with applicable regulations with regards to the generation of electricity. Currently, San Jacinto and Cartavio are permitted to generate electricity with renewable energy resources, and Casa Grande is in the process of requesting authorization from the General Bureau of Electricity of the Ministry of Energy and Mines (Dirección General de Electricidad del Ministerio de Energía y Minas), the governmental entity responsible for granting such authorization. Notwithstanding the foregoing, if San Jacinto and Cartavio’s authorizations expire or if Casa Grande’s authorization is not granted, our operations could be materially and adversely affected.

Any failure to obtain sanitary permits or fuel storage authorizations may materially and adversely affects us.

We believe we are in compliance in all material aspects with applicable statutory and administrative regulations with regards to controlled chemicals, sanitary permits and fuel storage authorizations in Peru, Ecuador and Argentina.

However, Casa Grande, San Jacinto and Cartavio are currently adjusting their Hazard Analysis and Critical Control Point (HACCP) Plans, which is the sanitary permit that every Peruvian company must submit to the General Bureau of Environmental Health (Dirección General de Salud Ambiental - DIGESA) of the Health Ministry for its official validation, in order to participate in food and/or beverages manufacture processes for the domestic or international market.

In addition, San Jacinto is currently in the process of obtaining the authorizations to maintain fuel storage facilities before the Supervising Body of Investment in Mining and Energy (Organismo Supervisor de la Inversión en Energía y Minas, or “OSINERGMIN”). If the aforementioned authorizations expire or are not granted, our operations could be materially and adversely affected.

We are insured against business interruption for our operations, but our assets are not insured against war or sabotage. In addition, our insurance coverage may be inadequate to cover all losses and/or liabilities that may be incurred in our operations.

We maintain insurance coverage for business interruptions of our operations, including business interruptions caused by labor disruptions. This coverage remains in effect for a term of 12 months as of commencement of business interruption. However, we do not insure our assets against war or sabotage (other than physical damage deriving from acts of bad faith, which are covered by the corresponding insurance policy). Our operations in Argentina are no insured against sabotage. Therefore, an attack or an operational incident causing an interruption of our business could have a material and adverse effect on our financial condition or results of operations.

Our operations are also subject to risks affecting our crops which are not covered by the business interruption insurance, including fire potentially destroying some or our entire crop. If disease, pestilence, accidents or natural or climatic disasters were to strike our crops, it may result in destruction of a significant portion of our harvest. Crop disease and pestilence, as well as accidents or natural or climatic disasters, can occur and have a devastating effect on our crops and those of our suppliers, potentially rendering useless or unusable all or a substantial portion of affected harvests. Even when only a portion of the crop is damaged, our business and financial performance could be materially and adversely affected because we may have incurred a substantial portion of the production cost for the related harvest. Any serious incidents of crop disease, pestilence or accidents or natural or climatic disasters, and related costs, may materially and adversely affect our production levels and, as a result, our sales of products and overall financial performance. We do not maintain insurance coverage against fire, disease, accidents or natural or climatic disasters and other risks to our crops. In the event of interruption of operations at one of our production facilities, we cannot assure you that we will be able to shift production to another location or at all.

In addition, our operations are subject to hazards associated with the manufacture of inflammable products and transportation of feedstocks and inflammable products.

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We maintain insurance against some risks at levels that we believe are customary in our industry to protect against these liabilities, but we cannot assure you that we will be able to maintain compliance necessary for renewal of such policies. Our insurance policies may not cover our losses or be cancelled in the event that we do not obtain or renew all required licenses, permits and governmental authorizations. Furthermore, our insurance may not be adequate to cover all losses or liabilities that might be incurred in our operations.

Funding on terms acceptable to us may not be available to meet our future capital needs.

Global market and economic conditions have been, and continue to be, disruptive and volatile. The debt capital markets have been impacted by significant defaults in the financial services sector and the re-pricing of credit risk, among other things. These events have negatively affected general economic conditions.

If funding is unavailable when needed, or is available only on unfavorable terms, it may become challenging for us meeting our capital needs or otherwise taking advantage of business opportunities or responding to competitive pressures, which could have a material and adverse effect on our revenue and results of operations.

Termination of our sugarcane supply contracts or a decrease or an interruption in the sale of sugarcane by our suppliers may materially and adversely affect us.

Sugarcane is the main raw material we use to produce sugar and ethanol. During 2011, we crushed approximately 6.7 million tons of sugarcane, approximately 4.3 million tons (or 65%) of which we cultivated on our properties and approximately 2.4 million tons (or 35%) from third-party suppliers. We own the only sugar mills that exist in the areas in which we operate and, in some cases, we have entered into long-term contracts with our suppliers for an average term of approximately five years.

If our supply of sugarcane were to be interrupted, we may be required to pay higher prices for sugarcane and/or the volume of sugarcane available to us may decrease significantly, each of which could materially and adversely affect us.

Our controlling shareholder may have conflicts of interest relating to our business.

Grupo Gloria directly and indirectly owns all of our capital stock and a majority ownership interest in our subsidiaries. As a result, Grupo Gloria has the power to determine the outcome of almost all matters that require shareholder votes, such as the election of our board members and, subject to contractual and legal restrictions, the distribution of dividends and payments in respect of intercompany debt. Grupo Gloria also has the power to determine our business strategy. The interests of Grupo Gloria may in some cases differ from those of the holders of our notes. Grupo Gloria conducts its business through us as well as through other entities in which we do not have an equity interest. In circumstances involving a conflict of interest between Grupo Gloria and the holders of the notes, Grupo Gloria may exercise its rights in a manner that would benefit Grupo Gloria to the detriment of the holders of the notes. We do not have any independent members of our Board of Directors.

We have exposure to material litigation for which we have not established provisions.

We are currently involved in various legal proceedings, which could result in unfavorable decisions or financial penalties against us, and we will continue to be subject to future legal proceedings, which if determined adverse to us, could result in material adverse consequences for us. For more information regarding the significant legal claims against our company, see “Business—Legal and Administrative Proceedings” and note 15 to our audited consolidated financial statements and note 13 to our unaudited condensed consolidated interim financial statements. Some of these claims may be resolved against us. Although we believe that we have established adequate provisions for these legal proceedings, there are some legal proceedings with respect to which we have not established provisions based on our assessment of the unlikely possibility of an adverse outcome in these legal proceedings. If we are incorrect in our assessment, we may have to establish provisions that could materially and adversely affect us.

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We may lose corporate control over San Jacinto as a result of litigation.

On May 30, 2006, a plaintiff initiated a lawsuit against San Jacinto and a previous owner, among others, from which we purchased 2,519,498 shares of San Jacinto (representing 55.25% of the capital stock of San Jacinto at that time). The plaintiff, in his lawsuit, claimed that the owner from which we purchased the shares of San Jacinto did not have valid title to the shares. On March 2, 2012, we were added by the court as a party to the lawsuit as the purchaser of the shares in dispute. Should the court rule against the seller that the seller did not have valid title to the shares and therefore, could not have validly transferred its ownership in San Jacinto to us, we could be required to divest our shares and potentially result in the loss corporate control in San Jacinto, which may materially and adversely affect us.

We are substantially dependent on our facilities, and any interruption or operational failure in any of these facilities may result in a reduction of the volume of sugar and ethanol we produce or sell and, therefore, materially and adversely affect us.

Most of our profit is derived from the sale of the sugar and ethanol produced in our five mills and eight distilleries. If an accident, unanticipated repair, equipment malfunction, or natural or climatic disaster occurs in one or more of our mills, we may be materially and adversely affected and all or part of our operations may be interrupted, nor can we assure you that such damage will be covered under our insurance policies.

In addition, we are subject to labor strikes and other operational incidents, such as equipment failures, fires, explosions, pipe ruptures and transportation accidents. These and other operational accidents may result in physical injury, death, material loss and destruction of our properties and equipment, and/or, in the case of environmental accidents, which may result in the suspension of our operations and/or the imposition of civil, labor and administrative penalties and criminal liability. Irregularities in our mills’ environmental licensing, National Institute of Civil Defense (Instituto Nacional de Defensa Civil, or “INDECI”) licensing, municipal licensing and our failure to comply with regulations applicable to our business may also result in the suspension of our operations and/or the imposition of civil, administrative and criminal penalties.

We are subject to labor risks and a dispute with one or more of our labor unions could materially and adversely affect us.

Labor is a significant cost for our production. Changes in labor regulations and increases in labor costs would have a significant effect on our operations. Approximately 46% of our employees are affiliated with labor unions and are thus covered by collective bargaining agreements with such labor unions. A work slowdown, work stoppage, strike or other labor dispute may occur prior to or upon the expiration of our other labor agreements, and we are unable to estimate the adverse effect of any such work slowdown, stoppage or strike or other dispute on our production and sales. A labor dispute at one of our facilities or an unfavorable judicial or administrative ruling against us in one labor proceeding may result in labor disputes in other facilities and unfavorable rulings in other cases, magnifying the effect on our operations and costs. Given our high concentration and dependency of labor in specific tasks, work slowdowns, stoppages, strikes or other labor-related developments affecting us could materially and adversely affect us.

We depend on third parties to provide our customers and us with facilities and services that are integral to our business.

We have entered into agreements with third-party contractors to provide facilities and services required for our operations, such as the transportation of our sugarcane from our plantations to our mills and the transportation of our mechanical harvesters from one facility to another. Our reliance on third parties to provide these services for us also gives us less control over the costs, efficiency, timeliness and quality of those services. Contractors’ negligence could result in damage or loss of our sugarcane or mechanical harvesters, which may materially and adversely affect us. We expect to be dependent on these contractors for the foreseeable future. The loss or expiration of our agreements with third-party contractors or our inability to renew these agreements or to negotiate new agreements with other providers at comparable rates could harm our business and financial performance.

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Disruption of transportation and logistics services or insufficient investment in public infrastructure could materially and adversely affect us.

A substantial portion of Peruvian sugar and production is transported by truck, which is generally significantly more expensive than the rail transportation available to U.S. and other international producers. Efficient access to transportation infrastructure and ports is critical to the continued growth of the Peruvian sugar and ethanol industry generally and of our operations in particular. Improvements in transportation infrastructure are likely to be required to make more sugar and ethanol production accessible to export terminals at competitive prices. Improvement projects may not be undertaken and/or completed on a timely basis, if at all, which could adversely affect the demand for our products, impede our delivery of products or increase our costs.

We depend on the continuous operation of the port facilities we use. Interruptions in port operations could result from various events and circumstances outside of our control including, among others, catastrophic events, environmental issues, strikes or labor issues, adverse meteorological conditions and the interruption in the supply of our products to our facilities. Any such difficulties with port facilities could, therefore, result in delays in, or the suspension of, the transportation of sugar and ethanol to our customers, adversely affecting our product distributions capacity which could have a material adverse effect on us.

We may not successfully acquire or develop additional production capacity through the expansion of existing facilities or greenfield projects.

We continually explore opportunities to increase our production capacity, including through expansion of our existing facilities and greenfield projects. We are currently developing the greenfield Olmos Expansion Plan, where Azucarera Olmos and our affiliate, Gloria S.A., purchased 15,600 hectares of land (14,500 hectares of which are arable) in Olmos, Lambayeque, Peru, to cultivate sugarcane using pressurized water and green harvesting for the production of sugar. We also have expansion plans to increase our industrial facilities and crushing capacity in some of our existing mills and distilleries. At this time, we do not have all of the environmental or other permits, designs or engineering, procurement and construction contracts with respect to our greenfield Olmos Expansion Plan. As a result, we may not implement this greenfield project on a timely basis or at all, and may not realize the related benefits from this project. In addition, we may be unable to obtain the required financing for this project on satisfactory terms, or at all. In addition, we may not have the appropriate personnel and equipment to implement this project.

The expansion of our existing facilities or integration of this or other greenfield projects may result in unforeseen operating difficulties and may require significant financial and managerial resources that would otherwise be available for conducting our existing operations. Planned or future expansion of existing facilities or greenfield projects may not enhance our financial performance.

We may undertake additional acquisitions that may be significant in size and that may change the scale of our business.

Although we believe that future acquisition opportunities to acquire agro-business companies in Latin America are likely to be limited, we expect to evaluate opportunities to acquire additional processing assets and/or businesses from time to time. If those future acquisitions were significant in size, they could change the scale of our business and may expose us to new geographic, political, operating and financial risks. Our ability to make any such acquisitions would depend on our ability to identify suitable acquisition candidates, acquire them on acceptable terms and integrate their operations successfully. Any acquisitions would be accompanied by risks, including risks related to the quality of the facilities acquired; the difficulty of assimilating the operations and personnel of any acquired companies; the potential disruption of our ongoing business; the inability of management to maximize our financial and strategic position through the successful integration of acquired assets and businesses; the inability of management to maintain uniform standards, controls, procedures and policies; the impairment of relationships with employees, customers and contractors as a result of any integration of new management personnel; and the potential unknown liabilities associated with acquired assets and businesses. In addition, we would need additional capital to finance an acquisition. Debt financing related to any acquisition will expose us to the risks associated with borrowing money, while equity financing may cause existing shareholders to suffer dilution. We may not be successful in overcoming these risks or any other problems encountered in connection with such acquisitions.

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We may engage in hedging transactions, which involve risks that can materially and adversely affect us.

We are exposed to market risks arising from the conduct of our business activities—in particular, market risks arising from changes in commodity prices, exchange rates or interest rates. Historically, our only hedging transactions have been against exchange rate and interest rate volatility and we have not hedged against sugar price fluctuations. Notwithstanding the foregoing, we can not assure you we will not enter into other type of hedging transactions in the future. As of both March 31, 2012 and December 31, 2011, all of our sugar exports were at market prices. However, in an attempt to minimize the effects of volatility of sugar prices and exchange rates on our cash flows and results of operations, we may engage in hedging transactions involving commodities and exchange rate futures, options, forwards and swaps. We also may engage in interest rate-related hedging transactions from time to time. Hedging transactions expose us to the risk of financial loss in situations where the other party to the hedging contract defaults on its contract or there is a change in the expected differential between the underlying price in the hedging agreement and the actual price of commodities or exchange rate.

Our exports expose us to factors that are outside our control.

Our sales of products from exports in 2011 totaled S/.211.2 million (US$78.3 million), representing 16.2% of our total sales of products, 64.7% of which were from sugar exports. For the three months ended March 31, 2012, our sales of products from exports accounted for 11.9% (S/.44.7 million) of our sales of products and sugar exports accounted for 5.4% of our sales of products. We are subject to risks that are outside our control in connection with our export operations, including:

changes in foreign currency exchange rates;

deterioration of economic conditions in our principal export markets;

imposition of tax increases, anti-dumping tariffs and other trade and/or health barriers;

exchange controls and restrictions to exchange operations; and

strikes or other events that may affect ports and transportations.

Our future financial performance will depend significantly on economic, political and social conditions in our principal export markets. Most countries that produce sugar or ethanol, including the United States and European Union member countries, protect local producers from international competition by establishing government policies that affect the production and importation of sugar and ethanol. We may therefore have limited or no access to our main export markets or other major potential markets if new trade barriers are established, which could result in difficulties in reallocating our products to other markets under favorable conditions, possibly resulting in a material and adverse effect on us.

Certain of our indebtedness and the indenture for the notes contain covenants that restrict our ability to engage in certain transactions and may impair our ability to respond to changing business and economic conditions.

Certain of our indebtedness and the indenture for the notes contain covenants that restrict our ability to engage in certain transactions, such as the incurrence of indebtedness and the execution of corporate mergers or reorganizations, and may impair our ability to respond to changing business and economic conditions, including, among other things, limitations on our ability to:

incur additional indebtedness;

incur additional liens;

issue certain guarantees;

pay dividends or make certain other restricted payments;

consummate certain asset sales;

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enter into certain transactions with affiliates; or

merge or consolidate with any other person or sell or otherwise dispose of all or substantially all of our assets.

In addition, certain of our indebtedness require us to satisfy certain financial covenants. Future indebtedness or other contracts could contain financial or other covenants more restrictive than those applicable to our indebtedness and the indenture for the notes.

Our ability to comply with these provisions may be affected by general economic conditions, political decisions, industry conditions and other events beyond our control. As a result, we cannot assure you that we will be able to comply with these covenants. Our failure to comply with the covenants contained in certain of our indebtedness and in the indenture for the notes, including failure as a result of events beyond our control, could result in an event of default, which could materially and adversely affect our operating results and our financial condition.

If there were an event of default under one of our debt instruments, the holders of the defaulted debt could cause all amounts outstanding with respect to that debt to be due and payable immediately and may be cross-defaulted to other debt. We cannot assure you that our assets or cash flow would be sufficient to fully repay borrowings under our outstanding debt instruments if accelerated upon an event of default, or that we would be able to repay, refinance or restructure the payments on those debt securities. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Indebtedness.”

We may face conflicts of interest in transactions with related parties.

We engage in business and financial transactions with our controlling shareholder and other shareholders that may create conflicts of interest between our company and these shareholders. In the ordinary course of our business, we engage in a variety of transactions with subsidiaries, affiliates and related parties, including loan agreements relating to the sale of our products, sale of goods, management services, processing services, storage services and provision of labor. Commercial, administrative and financial transactions between our affiliates and us, even if entered into on an arm’s length basis, create the potential for, or could result in, conflicts of interests.

Water shortages or any failure to maintain existing licenses for water rights may materially and adversely affect us.

We grow our crops in an arid, desert region of northern Peru that is characterized by low levels of rainfall. Therefore, the continued supply of water is essential for our business. We obtain the vast majority of the water used to irrigate our crops pursuant to licenses granted to us by the Peruvian National Water Authority (Autoridad Nacional de Agua, or the “ANA”). These rights permit us to use a system of canals that diverts water from major rivers that are fed by melting snow in the Andes mountains. These licenses generally do not have an expiration date. Under Peruvian law, authorities may grant temporary water rights, as well as rights for indefinite periods, such as those licenses that have been granted to us as of the date of this offering memorandum. Our licenses are subject to our compliance with certain customary legal conditions related to the permitted use of the water. For example, Peruvian law requires that water rights must be used efficiently without adversely affecting water quality or the environment, and taking into account primary uses (such as water for food preparation, human direct consumption, agricultural activities and personal hygiene) and rights for the use of water previously granted.

Water rights, including licenses, may be terminated by government authorities or courts under certain circumstances, including: (i) a titleholder’s resignation; (ii) the annulment of the resolution approving the corresponding permit, authorization and/or license, (iii) the expiration of the permit, authorization and/or license, (iv) the nullification of the resolution approving the corresponding permit, authorization and/or license, declared by the ANA, based on certain infringements of applicable laws and regulations, such as a failure to pay an applicable water rights fee.

Although we continue to seek alternative sources of water to minimize the risk of any disruption, the available water supply may be adversely affected by shortages or changes in governmental regulations that may reduce the available volumes of water to which we currently have access. We cannot assure you that water will be available in

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sufficient quantities to meet our future needs or will prove sufficient to meet our water supply needs. In addition, we cannot assure you that our existing licenses related to water rights will be maintained. If our water supply is reduced, this could adversely affect our business, results of operations, financial condition and ability to repay the notes. See “Regulatory Overview—Peru—Water Permits.”

Risks Related to the Countries in which We Operate

Our results of operations and financial condition are dependent upon economic conditions in the countries in which we operate, and any decline in economic conditions could materially and adversely affect us.

All of our operations and development are in countries in emerging markets, and we expect to have additional operations in these or other emerging market countries. Many of these countries have a history of political, social and economic instability. Our revenue is derived primarily from the sale of sugar and ethanol, and the demand for sugar and ethanol is largely driven by the economic conditions of the countries in which we operate. Therefore, our results of operations and financial condition are to a large extent dependent upon the overall level of economic activity and political and social stability in those emerging market countries. Should economic conditions deteriorate in these countries or in emerging markets generally, we could be materially and adversely affected.

Governments have a high degree of influence in the economies in which we operate, which could have a material and adverse effect on us.

Governments in many of the markets in which we operate frequently intervene in the economy and occasionally make significant changes in monetary, credit, industry and other policies and regulations. Government actions to control inflation and other policies and regulations have often involved, among other measures, price controls, currency devaluations, capital controls and limits on imports. We have no control over, and cannot predict, what measures or policies governments may take in the future. The results of operations and financial condition of our businesses may be adversely affected by changes in governmental policy or regulations in the jurisdictions in which they operate that impact factors such as:

subsidies and incentives;

labor laws;

economic growth;

currency fluctuations;

inflation;

capital control policies;

interest rates;

liquidity of domestic capital and lending markets;

fiscal policy;

tax laws, including the effect of tax laws on distributions from our subsidiaries;

import/export restrictions; and

other political, social and economic developments in or affecting the country where each business is based.

Uncertainty over whether governments will implement changes in policy or regulation affecting these or other factors in the future may contribute to economic uncertainty and heightened volatility in the securities markets.

Due to populist political trends that have become more prevalent in certain countries in Latin America over recent years, some of the administrations in countries where we operate may increase government involvement in regulating economic activity.

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Changes in tax laws may increase our tax burden and, as a result, have a material and adverse effect on us.

The governments of each of the countries in which we operate regularly implement changes to their tax regulations that may increase our tax burdens. For example, the Peruvian government is currently in the process reforming the Income Tax, Value Added Tax and the Tax Code. These changes include modifications in the methods for tax audits and, from time to time, the enactment of temporary taxes. The effects of these proposed tax reforms and any other changes resulting from the enactment of additional tax reforms have not been quantified. However, if enacted, some of these reforms may result in increases in our overall tax burden, which could materially and adversely affect us.

The climatic phenomenon El Niño and other natural phenomena such as earthquakes and floods may have a material and adverse effect on us.

El Niño is an oceanic and atmospheric phenomenon that causes a warming of temperatures in the Pacific Ocean to rise, resulting in heavy rains off the coast of Peru and Ecuador and various other effects in other parts of the world. The effects of El Niño, which typically occurs every two to seven years around the end of December, include, among other things, flooding and significant declines in fish populations and negative effects on agriculture, and accordingly, can have a negative effect on Peru’s economy. The strongest El Niño events of the 20th and 21st centuries occurred in 1982-1983 and in 1997-1998. Should another strong El Niño event occur, there is no assurance that our installed river barriers and reefs will be sufficient to prevent damage to our farmlands.

In addition, Peru has experienced other natural phenomena in the past such as earthquakes and floods. Most recently, on August 15, 2007, a strong earthquake, measuring 7.9 on the Richter scale, hit the central coast of Peru, heavily affecting the Ica province in particular. A major earthquake could damage infrastructure necessary to our operations. Peru has also experienced droughts caused by low rainfall. Most recently, a drought in 2004 adversely affected our farm production yields, raised our production costs and reduced our sales. If such earthquakes, El Niño events, droughts or other natural phenomena occur in the future, we may suffer damage to, or destruction of, properties and equipment, as well as temporary disruptions to our production, which may materially and adversely affect us.

Economic, political and social developments in Peru could materially and adversely affect us.

The majority of our operations and customers are located in Peru. As a result, our results of operations and financial condition are dependent on economic, political and social developments in Peru, and are affected by the economic and other policies of the Peruvian government, including devaluation, currency exchange controls, inflation, economic downturns, political instability, social unrest and terrorism.

During the past several decades, Peru has experienced political instability that has included a succession of regimes with differing economic policies. Previous governments have imposed controls on prices, exchange rates, local and foreign investment and international trade, restricted the ability of companies to dismiss employees, expropriated private sector assets and prohibited the remittance of profits to foreign investors.

Presidential elections were held in Peru in April 2011. On July 28, 2011, after winning a run-off election, Ollanta Humala was sworn in as president of Peru for a five-year term through 2016. President Humala founded the Gana Perú (Win Peru) party, an alliance of various left-leaning parties such as the Partido Comunista del Perú (Communist Party of Peru), the Partido Socialista (Socialist Party), the Partido Socialista Revolucionario (Socialist Revolutionary Party), the Movimiento Político Voz Socialista (Socialist Voice Political Movement), and a significant constituency of the Movimiento Político Lima para Todos (Political Movement Lima for All). The President of Peru has considerable power to determine governmental policies and actions that relate to the Peruvian economy and that consequently affect the operations and financial performance of companies that operate in Peru such as us. The uncertainties characteristic of a change in government could cause instability and volatility in Peru, including volatility in the nuevo sol exchange rate and the performance of the Lima Stock Exchange (“BVL”). See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Factors Affecting Operating Results—Economic Conditions in Peru, Argentina and Ecuador.”

Although it is unclear what policies the Humala administration will enact, President Humala has publicly stated that Peru will continue conservative economic policies, a responsible fiscal policy and autonomous monetary policy.

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Furthermore, the appointment of independent ministers and public announcements from government officials have partially dissipated concerns that Peru’s economic policy framework would change drastically. However, we cannot assure you whether the current or any future Peruvian administration will maintain business-friendly and open-market economic policies or policies that stimulate economic growth and social stability. Any changes in the Peruvian economy or the Peruvian government’s economic policies may materially and adversely affect us.

Also, the Peruvian Congress is discussing proposed legislation that would seek to limit the amount of farm lands to be held, directly or indirectly, by a single owner. If any of the proposed legislation is enacted into law, such law could have a material adverse effect on the expansion plans of Coazucar in Peru.

A devaluation of the nuevo sol could have a material adverse effect on us and consequently affect our ability to make payments on the notes.

A sudden and significant devaluation of the nuevo sol could materially and adversely affect us. A severe devaluation of the nuevo sol may have a material and adverse effect on our financial condition, results of operations and cash flows in future periods by, for example, increasing in nuevos soles terms the amount of our foreign currency-denominated liabilities. Any significant devaluation of the nuevo sol against the U.S. dollar could have a material adverse effect on us, including our ability to make payments on the notes.

The re-implementation of certain laws by the Peruvian government, most notably restrictive exchange rate policies, could materially and adversely affect us and our and the Guarantors’ ability to make payment on the notes and the guarantees.

Since 1991, the Peruvian economy has experienced a significant transformation from a highly protected and regulated system to a free market economy. In 1991, President Fujimori’s administration eliminated all foreign exchange controls and unified the exchange rate. Currently, foreign exchange rates are determined by market conditions, with regular operations by the Peruvian Central Reserve Bank in the foreign exchange market in order to reduce volatility in the value of Peru’s currency against the U.S. dollar. Since the early 1990s, protectionist and interventionist laws and policies have been gradually dismantled to create a liberal economy dominated by market forces. The Peruvian economy has generally responded positively to this transformation, GDP grew by an average annual rate of approximately 5.0% during the period from 1995 to 2011. Exchange controls and restrictions on remittances of profits, dividends and royalties have ceased. Prior to 1991, Peru exercised control over foreign exchange markets by imposing restrictions to multiple exchange rates and restrictions to the possession and use of foreign currencies.

The Peruvian government may institute restrictive exchange rate policies in the future. Any such restrictive exchange rate policy could affect our ability to engage in foreign exchange activities, and could also materially and adversely affect us.

In addition, if the Peruvian government were to institute restrictive exchange rate policies in the future, we and the Guarantors might be obligated to seek an authorization from the Peruvian government to make payments on the notes and the guarantees. We cannot assure you that such an authorization would be obtained. Any such exchange rate restrictions or the failure to obtain such an authorization could materially and adversely affect our and the Guarantors’ ability to make payments under the notes and the guarantees, respectively.

Peruvian inflation could adversely affect us.

In the past, Peru has suffered through periods of high and hyper inflation, which has materially undermined the Peruvian economy and the government’s ability to create conditions that would support economic growth. A return to a high inflation environment would undermine Peru’s foreign competitiveness, with negative effects on the level of economic activity and employment. Additionally, in response to increased inflation, the Peruvian Central Bank (Banco Central de Reserva del Perú), which sets the Peruvian basic interest rate, may increase or decrease the basic interest rate in an attempt to control inflation or foster economic growth.

As a result of reforms initiated in the 1990s, Peruvian inflation has decreased significantly in recent years from four-digit inflation during the 1980s. The Peruvian economy experienced annual inflation of 2.94% in 2009, 1.53%

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in 2010 and 3.37% in 2011, as measured by the Peruvian Consumer Price Index (Índice de Precios al Consumidor del Perú).

If Peru experiences substantial inflation in the future, our costs of goods could increase and its operating margins could decrease, which could materially and adversely affect us. Inflationary pressures may also limit our ability to access foreign financial markets and may cause government intervention in the economy, including the introduction of government policies that may adversely affect the overall performance of the Peruvian economy.

In the past, Peru experienced significant levels of domestic terrorist activity. It is possible that a resurgence of terrorism in Peru may occur in the future, which would have a material adverse effect on the Peruvian economy and, ultimately, on us.

In the late 1980s and early 1990s, Peru experienced significant levels of terrorist activity targeted against, among others, the government and private sector. These activities were attributed mainly to two local terrorist groups, Sendero Luminoso and Movimiento Revolucionario Túpac Amaru (the “MRTA”).

Both terrorist groups suffered significant defeats in the 1990s, including the arrest of their leaders, causing considerable limitations in their activities during the decade of 2000. Although we believe that Sendero Luminoso and MRTA no longer pose a significant risk as they did during the 1980s and early 1990s, their members still operate in remote mountainous and jungle areas in central and southern Peru, where military patrols have decreased due to military spending cutbacks. Despite the suppression of terrorist activity, we cannot assure you that a resurgence of terrorism in Peru will not occur, or that if there is a resurgence, it will not disrupt the economy of Peru and us.

The Peruvian economy could be adversely affected by economic developments in regional or global markets.

Financial and securities markets in Peru are influenced, to varying degrees, by economic and market conditions in regional or global markets. Although economic conditions vary from country to country, investors’ perceptions of the events occurring in one country may substantially affect capital flows into and securities from issuers in other countries, including Peru. The Peruvian economy was adversely affected by the political and economic events that occurred in several emerging economies in the 1990s, including in Mexico in 1994, which impacted the market value of securities in many markets throughout Latin America. The crisis in the Asian markets beginning in 1997 also negatively affected markets throughout Latin America. Similar adverse consequences resulted from the economic crisis in Russia in 1998, the Brazilian devaluation in 1999 and the Argentine crisis in 2001. In addition, Peru continues to be affected by events in the economies of its major regional partners. Furthermore, the Peruvian economy may be affected by events in developed economies that are trading partners or that affect the global economy.

The 2008 global economic crisis, principally driven by the sub-prime mortgage market in the United States, significantly affected the international financial system, including Peru’s securities market and economy. Additionally, the current economic crisis in Europe, beginning with the financial crises in Greece, Spain, Italy and Portugal, has reduced the confidence of foreign investors, which has caused volatility in the securities markets and affected the ability of companies to obtain financing in the global capital markets. Moreover, the fiscal problems in the United States due to difficulties and delays in increasing the government debt ceiling, culminating in the downgrade of the U.S. long term sovereign credit rating by Standard & Poor’s on August 6, 2011, has added to an already high risk-avert environment. Renewed doubts about the pace of global growth have contributed to weak international growth in 2011. An interruption to the recovery of the developed economies, the continued effects of the current crisis in Europe, or a new economic and/or global financial crisis, could affect Peru’s economy, and, consequently, materially adversely affect our business, economic and financial condition or results of operations.

The recent market volatility generated by distortions in the international financial markets may affect the Peruvian capital markets.

The international financial conditions in 2008 and 2009 increased the volatility of the Lima Stock Exchange. The general index of the Lima Stock Exchange decreased by 60% in 2008, increased by 101% in 2009, increased by 65% in 2010, and decreased by 17% in 2011. In recent years, the Lima Stock Exchange has experienced increased participation from retail investors that react rapidly to the effects from international markets. Further volatility in

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the international markets may also adversely affect the Peruvian capital markets. The Peruvian banking system has not experienced significant liquidity problems as a result of the international financial conditions, primarily because the major source of funds for local banks is represented by their deposit base. Nevertheless, we have partially relied on funding from the local capital markets and limited liquidity in those markets as a result of future market volatility could adversely affect our ability to raise funds at the price or level we consider necessary to fund our operations.

Argentine economic and political conditions and perceptions of these conditions in the international market may have a direct impact on our business and could materially and adversely affect us.

One of our subsidiaries, San Isidro, is located in Argentina and accounted for 4% of our EBITDA in 2011. The Argentine economy has experienced significant volatility in recent decades, characterized by periods of low or negative growth, high and variable levels of inflation and currency devaluation. Between 2001 and 2003 Argentina experienced a period of severe political, economic and social crisis. More than a decade of uninterrupted Peso/dollar parity ended in 2002, and the value of the Peso against the U.S. dollar has fluctuated significantly since then. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Factors Affecting Operating Results—Economic Conditions in Peru, Argentina and Ecuador.”

Although general economic conditions in Argentina have recovered significantly during the past years, there is uncertainty as to whether this growth is sustainable. This is mainly because the economic growth was initially dependent on a significant devaluation of the Peso, a high excess production capacity resulting from a long period of deep recession and high commodity prices. The global economic crisis of 2008 has led to a sudden economic decline, accompanied by political and social unrest, inflationary and Peso depreciation pressures and lack of consumer and investor confidence. We cannot assure you that GDP will increase or remain stable in the future. The economic crisis in Europe, beginning with the financial crisis in Greece, Spain, Italy and Portugal, the international demand for Argentine products, the stability and competitiveness of the Peso against foreign currencies, confidence among consumers and foreign and domestic investors, a stable and relatively low rate of inflation and the future political uncertainties, among other factors, may affect the development of the Argentine economy.

In response to the prevailing economic conditions during 2011 and the beginning of 2012, including the rise of inflation, the continued demand for salary increases, the growth of the fiscal deficit, the required payments to be made on public debt in 2012, the reduction of the industrial growth and the increase of the capital flow out of Argentina, the Argentine government has adopted different measures, including strengthening foreign exchange controls, the elimination of subsidies to the private sector and the proposal for new taxes.

On April 16, 2012, the Argentine government announced its intention to expropriate YPF, S.A. (“YPF”), the largest oil and gas company in Argentina, which is controlled by Repsol YPF, S.A., a Spanish integrated oil and gas company. On May 4, 2012, the Argentine Congress approved the expropriation of 51% of YPF’s capital stock, with 26.03% held by the national government and the remaining 24.99% distributed among certain provinces. This measure has sparked strong international condemnation and could have a significant negative impact on future foreign direct investment in Argentina as well as potentially limit the country’s access to international capital and debt markets. In response to the nationalization of YPF by the Argentine government, Spain has blocked loans disbursements to Argentina it had previously agreed to fund through multilateral development institutions. On June 13, 2012, the European Union Parliament voted to suspend unilateral tariff preferences to Argentina, one year ahead of schedule. Also in response to the Argentine government’s actions, the European Union has lodged a formal complaint against Argentina with the World Trade Organization, denouncing the country’s protectionist trade and investment policies. If such sanctions by international trading blocks like the European Union continue to be imposed on Argentina or on its agricultural exports, it may have a negative impact on our Argentine subsidiaries’ financial conditions and results of operations.

Argentine economic and political conditions and resulting measures could have a material adverse impact on our operations in Argentina.

Ecuadorian economic and political conditions may have a material and adverse impact on us.

One of our subsidiaries, La Troncal, is located in Ecuador and accounted for 6% of our EBITDA in 2011. Between 1997 and 2006, Ecuador experienced a severe political crisis during which it elected or appointed seven presidents. While Rafael Correa has served as president since 2007 and is eligible for reelection in 2013, there can

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be no assurance that political instability, and consequently lower economic growth, will not return in Ecuador. Correa’s presidency has resulted in greater direct government intervention in the economy and there can be no guarantee that the Ecuadorian government will not intervene in the sugar and ethanol sector in the future.

The Ecuadorean economy has experienced periods of significant economic volatility, resulting in two sovereign defaults in 1999 and in 2009 that have since limited the government’s ability to borrow money. The scheduled presidential elections in 2013 may encourage increased government spending and pressure the government to increase tax revenue or increase borrowings from its already limited sources of credit, and there is no guarantee that overspending will not contribute to additional economic volatility and deterioration. While Ecuador’s economy has been dollarized since 2002, economic instability could still occur. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Factors Affecting Operating Results—Economic Conditions in Peru, Argentina and Ecuador.” In particular, a decline in current account receipts could spur the government to make the exit of dollars from the country more difficult. For example, Ecuadorian lawmakers attempted unsuccessfully last year to pass a tax on capital outflows and there is no guarantee that the government will not continue pursuing policies to preserve its dollar reserves.

Decreasing productivity in Ecuador’s oil sector may adversely affect the country’s growth prospects. While several oil producers have settled their claims against the government and accepted the government’s increased involvement in the oil industry, there is no guarantee that the petrochemical investment climate and growth prospects will not deteriorate. The decreased independence of the Ecuadorian central bank following the 2008 constitutional reforms and newly passed banking regulations may also deter private sector investment and adversely affect the growth of the Ecuadorian economy.

Risks Relating to the Notes and the Guarantees

Coazucar is a holding company and most of its production assets are held by subsidiaries.

Coazucar is a holding company, and most of its production assets are held by its direct and indirect subsidiaries, including the Guarantors. Accordingly, we depend on the results of operations of our subsidiaries, including the Guarantors. The ability of Coazucar’s subsidiaries to make dividend or other payments to Coazucar are affected by, among other factors, the obligations of these subsidiaries, including the Guarantors, to their creditors, requirements of the relevant corporate and other laws in the jurisdiction in which each subsidiary, including each Guarantor, operates, and restrictions contained in agreements entered into by or relating to these entities. In the event that we do not receive dividend or other payments from our subsidiaries, we may not be able to make required principal and interest payments on our indebtedness, including the notes, or honor our other obligations, and you may be forced to make a claim against the Guarantors that guarantee the notes.

Coazucar’s non-guarantor subsidiaries do not have an obligation to pay amounts due on the notes or to make funds available for that purpose. While the indenture governing the notes limits the ability of Coazucar’s subsidiaries to incur consensual restrictions on their ability pay dividends or make intercompany payments to Coazucar, these limitations are subject to certain qualifications and exceptions.

Our substantial indebtedness may make it difficult for us to service our debt, including the notes, and to operate our businesses.

We have, and after the offering of the notes will continue to have, a significant amount of indebtedness. As of March 31, 2012, we and our subsidiaries had S/.805.6 million (US$302.0 million) of total consolidated debt. We anticipate that our substantial indebtedness will continue for the foreseeable future. Our substantial indebtedness may have important negative consequences for you, including:

making it more difficult for us and our subsidiaries to satisfy our obligations with respect to our debt, including the notes and other liabilities;

requiring that a substantial portion of the cash flow from operations of our operating subsidiaries be dedicated to debt service obligations, reducing the availability of cash flow to fund internal growth through working capital and capital expenditures and for other general corporate purposes;

increasing our vulnerability to economic downturns in our industry; exposing us to interest rate increases;

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placing us at a competitive disadvantage compared to our competitors that have less debt in relation to cash flow;

limiting our flexibility in planning for or reacting to changes in our business and our industry; restricting us from pursuing strategic acquisitions or exploiting certain business opportunities; and limiting, among other things, our and our subsidiaries’ ability to borrow additional funds or raise equity

capital in the future and increasing the costs of such additional financings.

In the worst case, an actual or impending inability by us or our subsidiaries to pay debts as they become due and payable could result in our insolvency.

Despite our current substantial indebtedness, we may be able to incur more debt in the future, including on a secured basis, which could further exacerbate the risks of our indebtedness.

Despite our current substantial indebtedness, we may be able to incur more debt in the future. The indenture governing the notes will limit our ability to incur additional debt but will not prohibit us from doing so. We may incur additional debt in the future that could mature prior to the notes, and such debt could be secured on an equal, ratable and pari passu basis with the notes and the guarantees. Any such additional debt could further exacerbate the risks of our indebtedness.

Payments on the notes and the guarantees will be effectively subordinated to any secured debt obligations of Coazucar and the Guarantors, and structurally subordinated to the liabilities of non-guarantor subsidiaries to their own creditors and the liabilities of Casa Grande to its own creditors to the extent that the obligations under the notes exceed its partial guarantee of an initial amount equal to US$162,500,000.

The notes will be fully guaranteed by Cartavio, San Jacinto and Azucarera Olmos, and partially guaranteed by Casa Grande, on an unsecured basis. The notes and the guarantees will constitute senior unsecured obligations of Coazucar and the Guarantors, and will rank equal in right of payment with all of the other existing and future unsecured, unsubordinated indebtedness of Coazucar and the Guarantors, other than with respect to certain obligations given preferential treatment pursuant to the laws of Peru. Holders of the notes will not have any claim against our subsidiaries that are not guarantors of the notes. Therefore, our non-guarantor subsidiaries will pay their debt and other obligations as required, before they make any funds available to us for making payments under the notes. Moreover, the right of holders of the notes to receive assets of any non-guarantor subsidiaries upon liquidation or reorganization or to participate in the distribution of, or realize the proceeds of, those assets will be structurally subordinated to the claims of such subsidiary’s creditors.

Additionally, while Casa Grande is a Guarantor, its guarantee is limited to an initial amount equal to US$162,500,000, which represents only a portion of the aggregate principal amount of the notes. In the event that we are not able to make required principal and interest payments on the notes, you may be limited in the amounts recoverable against Casa Grande pursuant to its limited guarantee.

As of March 31, 2012, Coazucar had total consolidated debt of S/.805.6 million (US$302.0 million), of which S/.234.6 million (US$87.9 million) was debt of Coazucar, S/.264.3 million (US$99.1 million) was debt of the Guarantors, S/.106.8 million (US$40.0 million) was debt of Casa Grande, and S/.306.6 million (US$115.0 million) was debt of the non-guarantor subsidiaries. As of March 31, 2012, Coazucar, the Guarantors, Casa Grande and the non-guarantor subsidiaries had secured debt in the amounts of S/.132.4 million (US$49.6 million), S/.199.5 million (US$74.8 million), S/.97.8 million (US$36.7 million) and S/.287.3 million (US$107.7 million), respectively. As of and for the three months ended March 31, 2012, the Guarantors represented 68.4% of our consolidated total assets and 84.5% of our consolidated EBITDA and Casa Grande represented 41.7% of our consolidated total assets and 51.3% of our consolidated EBITDA. We intend to repurchase a portion of the indebtedness of Coazucar with a portion of the proceeds of this offering.

Although the holders of the notes will have a direct, but unsecured, claim on the assets and property of the Coazucar and the Guarantors, payment on the notes and guarantees will be effectively subordinated to payments on Coazucar’s and the Guarantors’ secured debt to the extent of the assets and property securing such debt. Payments on the notes and guarantees is also subject to the payment of certain other obligations that receive preferential treatment under Peruvian law, such as certain labor and tax obligations.

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The guarantee of Casa Grande is limited to an initial amount equal to US$162,500,000 and as a result, in the case of a default in respect of our obligations under the notes, you may be limited in the amounts recoverable from Casa Grande to satisfy our obligations under the notes.

Casa Grande’s guarantee is limited to an initial amount equal to US$162,500,000, which represents only a portion of the aggregate principal amount of the notes. As of and for the three months ended March 31, 2012, Casa Grande generated 51.3% of our consolidated EBITDA and had 41.7% of our consolidated total assets. Because Casa Grande’s guarantee is limited to an initial amount equal to US$162,500,000, in the case of a default in respect of our obligations under the notes, you may be limited in the amounts recoverable from Casa Grande to satisfy our obligations under the notes.

Our obligations under the notes and guarantees will be subordinated to certain statutory liabilities.

Under Peruvian bankruptcy law, our obligations under the notes and guarantees are subordinated to certain statutory preferences. In the event of our liquidation, such statutory preferences, including claims for salaries, wages, secured obligations, social security, taxes and court fees and expenses related thereto, will have preference over any other claims, including claims by any investor in respect of the notes and guarantees.

It is possible that the guarantees may not be enforceable in the event of insolvency or bankruptcy or may be limited as to enforcement.

The guarantees provide a basis for a direct claim against the Guarantors. However, it is possible that the guarantees may not be enforceable under Peruvian law or U.S. federal or state law. In particular, while the laws of these jurisdictions do not prevent the guarantees from being granted, in the event that a Guarantor is declared insolvent or bankrupt, the relevant guarantee could be voided, or claims in respect of a guarantee could be subordinated to all other debts of that Guarantor if, among other things, the Guarantor, at the time it provided its guarantee:

issued such guarantee by means of misrepresentation; provided the guarantee with the intent to hinder, delay or defraud creditors or was influenced by a desire to

put the beneficiary of the guarantee in a position which, in the event of the Guarantor’s insolvency, would be better than the position the beneficiary would have been in had the guarantee not been given;

received less than reasonably equivalent value or fair consideration for the incurrence of such guarantee; was insolvent or rendered insolvent by reason of such incurrence; was engaged in a business or transaction for which the Guarantor’s remaining assets constituted

unreasonably small capital; or intended to provide, or believed that it would provide, the guarantee beyond its ability to repay it upon its

maturity.

In a recent Florida bankruptcy case, subsidiary guarantees containing this kind of provision were found to be fraudulent conveyances and thus unenforceable and the court stated that this kind of limitation is ineffective. We do not know if that case will be followed if there is litigation on this point under the indenture governing the notes. However, if it is followed, the risk that the guarantees will be found to be fraudulent conveyances will be significantly increased.

Additionally, the guarantee of Cartavio, San Jacinto and Azucarera Olmos, by its terms, will be limited to such amount as would not render each of these entities insolvent, and the guarantee of Casa Grande will be limited to an initial amount equal to US$162,500,000. While such limitation may not prevent the guarantee from being determined to be a fraudulent transfer, such limitation could meaningfully limit amounts recoverable pursuant to such guarantee.

Developments in other emerging markets may adversely affect the market value of the notes.

The market price of the notes may be adversely affected by declines in the international financial markets and world economic conditions. The market for securities of companies doing substantially all of their business in Latin American markets, such as our company, is influenced, to varying degrees, by economic and market conditions in other emerging market countries, especially those in Latin America. Although economic conditions are different in

36

each country, investors’ reaction to developments in one country may affect the securities markets and the securities of issuers in other countries. We cannot assure you that the market for our securities will not be affected negatively by events in countries in which we do not operate, particularly in emerging markets, or that such developments will not have a negative impact on the market value of the notes.

Enforcing your rights as a holder of notes in Peru may prove difficult.

Your rights under the notes will be subject to the insolvency and administrative laws of Peru and we cannot assure you that you will be able to effectively enforce your rights in such bankruptcy, insolvency or similar proceedings. In addition, the bankruptcy, insolvency, administrative and other laws of Peru may be materially different from, or in conflict with, each other, including in the areas of rights of creditors, priority of government entities and related-party creditors and ability to obtain post bankruptcy filing loans or to pay interest. The application of these laws, or any conflict among them, could call into question what and how Peruvian laws should apply. The laws of Peru may not be as favorable to your interests as the laws of jurisdictions with which you are familiar. Such issues may adversely affect your ability to enforce your rights under the notes in Peru or limit any amounts that you may receive.

In addition, the ability of holders of notes to institute bankruptcy proceedings against us or the Guarantors in Peru, where most of our and their respective assets and operations are located, is currently not guaranteed by Peruvian law. Therefore, we cannot assure you that the holders of notes will have the right directly (or indirectly through the trustee) to institute bankruptcy proceedings against us or the Guarantors in Peru if we default on the notes.

You may be unable to enforce judgments against us, the Guarantors, or our respective directors and officers.

We and the Guarantors are organized under the laws of Peru. In addition, all of our assets are outside the United States and all of our directors and officers live outside the United States. Our auditors are also organized outside the United States. As a result, it may be difficult or impossible to serve process against any of these persons in the United States. Furthermore, as all or substantially all of the assets of these persons are located outside of the United States, it may not be possible to enforce judgments obtained in courts in the United States predicated upon civil liability provisions of the federal securities laws of the United States against these persons. There is no guarantee that a judgment against such persons in Peru will be enforceable, whether in original actions or in actions to enforce judgments of U.S. courts, based solely on the U.S. federal securities laws. See “Enforcement of Civil Liabilities.”

The notes constitute a new issue of securities for which there is no existing market, and we cannot assure you that you will be able to sell your notes in the future.

The notes constitute new securities for which there is no existing market. Although application has been made to the Irish Stock Exchange for the notes to be admitted to the Official List and to trading on the Global Exchange Market, we cannot assure you that the application will be approved or that an active trading market in the notes will develop. In addition, we cannot provide you with any assurances regarding the ability of holders of the notes to sell their notes, or the price at which such holders may be able to sell their notes.

If such a market were to develop, the notes could trade at prices that may be higher or lower than the initial offering price depending on many factors, including prevailing interest rates, our results of operations and financial condition, political and economic developments in and affecting the jurisdictions where we have operations, and the market for similar securities. The initial purchasers of this offering have advised our company that they currently intend to make a market in the notes. However, the initial purchasers are not obligated to do so, and any market-making with respect to the notes may be discontinued at any time without notice.

There are restrictions on your ability to transfer or resell the notes without registration under applicable securities laws.

The notes and the guarantees have not been, and will not be, registered under the Securities Act or any state securities laws and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the

37

Securities Act and applicable state securities laws. Such exemptions include offers and sales that occur outside the United States in compliance with Regulation S under the Securities Act and in accordance with any applicable securities laws of any other jurisdiction and sales to qualified institutional buyers as defined under Rule 144A under the Securities Act.

The notes have been registered in Peru pursuant to SMV Resolution No. 004-2011-EF/94.01.1. In Peru, the notes are subject to transfer and resale restrictions and shall not be transferred or resold except as permitted under CONASEV Resolution No. 079-2008-EF/94-01.1. For a discussion of certain restrictions on resale and transfer, see “Transfer Restrictions”. Due to these transfer restrictions, you may be required to bear the risk of your investment for an indefinite period of time.

We may be unable to satisfy our note purchase obligations upon a change of control repurchase event.

Upon the occurrence of a change of control repurchase event, which is comprised of certain change of control events together with a ratings decline, as described in the “Description of the Notes” and the indenture governing the notes, each holder of the notes may require us to purchase all or a portion of such holder’s notes at a purchase price equal to 101% of the aggregate principal amount of such holder’s notes, together with accrued and unpaid interest, if any, to the date of purchase. In such event, we may not have the financial resources sufficient to purchase all of the notes and our other indebtedness that might become payable upon the occurrence of a change of control repurchase event.

We may choose to redeem the notes and you may be unable to reinvest the proceeds at the same or a higher rate of return.

We may redeem the notes, in whole or in part, subject to a minimum float condition, at any time on or after August 2, 2017 at the applicable redemption prices set forth in this offering memorandum, plus accrued and unpaid interest and any Additional Amounts. Before August 2, 2017, we may also redeem the notes, in whole or in part, subject to a minimum float condition, at a redemption price based on a “make-whole” premium. In addition, at any time prior to August 2, 2015, we may redeem up to 35% of the notes (including any additional notes), at a redemption price equal to 106.375% of their outstanding principal amount, plus accrued and unpaid interest and any Additional Amounts, using the proceeds of certain equity offerings. See “Description of the Notes—Optional Redemption”. Additionally, in the event of certain changes in applicable tax laws, we will have the right to redeem the notes prior to their maturity at a price equal to 100% of their outstanding principal amount plus accrued and unpaid interest and Additional Amounts, if any. See “Description of the Notes—Optional Tax Redemption”. We may chose to redeem the notes at times when prevailing interest rates may be relatively low. Accordingly, you may not be able to reinvest the redemption proceeds in a comparable security with an effective interest rate as high as that of the notes.

Different disclosure and accounting principles in Peru and the United States may provide you with different or less information about us than you expect.

Securities disclosure requirements in Peru differ from those applicable in the United States. Accordingly, the information about us available to you may not be the same as the information available to security holders of a U.S. company. There may be less publicly available information about us than is regularly published about companies in the U.S. and certain other jurisdictions. We are not subject to the periodic reporting requirements of the Exchange Act and, therefore, are not required to comply with the information disclosure requirements that it imposes.

The perception of higher risk in other countries, especially in emerging economies, may adversely affect the Peruvian economy, our business and the market price of securities issued by Peruvian issuers, including the notes.

Emerging markets like Peru are subject to greater risks than more developed markets, and financial turmoil in any emerging market could disrupt business in Peru and adversely affect the price of the notes. Moreover, financial turmoil in any emerging market country may adversely affect prices in stock markets and prices for debt securities of issuers in other emerging market countries as investors move their money to more stable, developed markets. An increase in the perceived risks associated with investing in emerging markets could dampen capital flows to Peru and adversely affect the Peruvian economy in general, and the interest of investors in the notes. We cannot assure

38

you that the value of the notes will not be negatively affected by events in other emerging markets or the global economy in general.

We cannot assure you that the credit ratings for the notes will not be lowered, suspended or withdrawn by the rating agencies.

The credit ratings of the notes may change after issuance. Such ratings are limited in scope, and do not address all material risks relating to an investment in the notes, but rather reflect only the views of the rating agencies at the time the ratings are issued. An explanation of the significance of such ratings may be obtained from the rating agencies. We cannot assure you that such credit ratings will remain in effect for any given period of time or that such ratings will not be lowered, suspended or withdrawn entirely by the rating agencies, if, in the judgment of such rating agencies, circumstances so warrant. Any lowering, suspension or withdrawal of such ratings may have a material and adverse effect on the market price and marketability of the notes.

Peruvian capital gains tax may apply on transfers of the offered notes.

In the event beneficial interests in the Global Notes are exchanged for definitive notes (or the Global Notes are transferred), the non-Peruvian holders of such Global Notes may be subject to Peruvian capital gains tax on any transfer of such definitive notes (or transfer of notes). See “Taxation—Peruvian Tax Considerations.”

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USE OF PROCEEDS

We intend to use the net proceeds from the sale of the notes, after the deduction of certain fees and expenses in connection with this offering to (i) repay approximately US$148 million of the outstanding indebtedness of the Issuer, Cartavio S.A.A., Agroindustrias San Jacinto S.A.A. and Casa Grande S.A.A., (ii) purchase land in connection with the Olmos Expansion Plan, and (iii) use the remainder for capital expenditures and general corporate purposes for our operations in Peru.

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CAPITALIZATION

The following table sets forth our consolidated debt and capitalization as of March 31, 2012, derived from our unaudited condensed consolidated interim financial statements as of March 31, 2012 prepared in accordance with IFRS, as issued by the IASB:

on an actual historical basis; and

as adjusted for the sale of the notes in this offering, the receipt of net proceeds therefrom in the aggregate amount of approximately US$319 million after deduction of commissions and expenses and the use of a portion of the proceeds to repay approximately US$148 million of outstanding indebtedness.

You should read this table in conjunction with “Use of Proceeds,” “Selected Financial and Other Information,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and the related notes thereto, which are included in this offering memorandum.

As of March 31, 2012

Actual As Adjusted (in US$ millions)(1) (in S/. millions) (in US$ millions)(1) (in S/. millions) Cash and cash equivalents.............. 71.9 191.8 242.9 647.8

Short-term debt Overdraft ..................................... 0.8 2.1 — — Promissory notes ......................... 111.1 296.3 54.0 144.0 Finance lease ............................... 0.6 1.6 0.6 1.6 Payable from acquisition of

subsidiaries(2) ............................ 6.9 18.5 6.9 18.5 Payable from acquisition of

associate(3) ................................ 7.3 19.4 7.3 19.4 Total short-term debt.................. 126.7 337.9 68.8 183.5

Long-term debt Promissory notes ......................... 90.9 242.4 — — 6.375% Senior Notes due 2022

offered hereby .......................... — — 325.0 866.8 Finance lease ............................... 0.3 0.8 0.3 0.8 Payable from acquisition of

subsidiaries(2) ............................ 84.1 224.4 84.1 224.4

Total long-term debt.................... 175.3 467.6 409.4 1,092.0 Total debt ....................................... 302.0 805.5 478.2 1,275.5 Total equity .................................... 941.8 2,511.7 941.8 2,511.7

Total capitalization...................... 1,243.8 3,317.2 1,420.0 3,787.2 ________________________________ (1) Amounts stated in U.S. dollars have been translated from nuevos soles at the exchange rate of S/.2.667 per US$1.00 as of March 31, 2012.

See “Exchange Rates” for additional information on the exchange rate. (2) The liability incurred in connection with our acquisition of La Troncal is treated as an account payable and not as indebtedness. (3) Includes an account payable in connection with our acquisition of 50% of the shares of Producargo S.A., an ethanol company in Ecuador.

Since March 31, 2012, we have provided a guarantee in the amount of US$49.8 million for purchasing lands in connection with the Olmos Expansion Plan, which we anticipate repaying with the proceeds from this offering.

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EXCHANGE RATES

Peruvian law does not impose any restrictions on the ability of companies having operations in Peru to transfer foreign currencies from Peru to other countries, to convert nuevos soles into any foreign currency or to convert any foreign currency into nuevos soles. Companies may freely remit interest and principal payments abroad and investors may repatriate capital from liquidated investments. Peruvian law in the past imposed restrictions on the conversion of Peruvian currency and the transfer of funds abroad, however, we cannot assure you that Peruvian law will continue to permit such payments, transfers, conversions or remittances without restrictions.

Exchange rates for the nuevo sol have been relatively stable in recent years. The following table sets forth the low, high, period-average and period-end rates for the periods indicated, expressed in nuevos soles per U.S. dollar.

Low

High Period

Average(1)

Period End

Year Ended December 31: 2007........................................................................................... 2.968 3.201 3.124 2.996 2008........................................................................................... 2.693 3.157 2.941 3.140 2009........................................................................................... 2.852 3.259 3.006 2.890 2010........................................................................................... 2.787 2.883 2.826 2.809 2011........................................................................................... 2.694 2.833 2.752 2.696 2012: January ...................................................................................... 2.690 2.689 2.693 2.690 February .................................................................................... 2.677 2.691 2.684 2.677 March ........................................................................................ 2.667 2.676 2.671 2.667 April .......................................................................................... 2.640 2.668 2.657 2.640 May ........................................................................................... 2.636 2.709 2.670 2.709 June ........................................................................................... 2.641 2.708 2.671 2.671 July (through July 25) ............................................................... 2.620 2.654 2.636 2.638

(1) Calculated as the average of the month-end or day-end exchange rates during the relevant period, as applicable.

Source: SBS

On July 25, 2012, the exchange rate was S/.2.638 per U.S. dollar.

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SELECTED FINANCIAL AND OTHER INFORMATION

The following selected financial data has been derived from (1) our unaudited condensed consolidated interim financial statements as of March 31, 2012 and for the three months ended March 31, 2012 and 2011 and (2) our audited consolidated financial statements as of December 31, 2011, 2010 and January 1, 2010 (transition date) and for the years ended December 31, 2011 and 2010, in each case included elsewhere in this offering memorandum. Our financial statements have been prepared in accordance with IFRS, as issued by the IASB. The unaudited condensed consolidated interim financial statements and the notes thereto have been condensed, but contain all adjustments, including adjustments of a normal and recurring nature, necessary for a fair presentation of our financial position and results of operation. The results for the three months ended March 31, 2012 are not necessarily indicative of the results to be expected for the entire year ending March 31, 2012.

This financial information should be read in conjunction with “Presentation of Financial and Other Information,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and the related notes thereto, which are included elsewhere in this offering memorandum.



Ended December 31,

2012 2012 2011 2011 2011 2010





Consolidated Statement of Comprehensive Income:

(unaudited)

Sales of products 141,427 377,185 309,162 483,833 1,304,415 937,854 Cost of products sold (85,548) (228,157) (145,824) (261,583) (705,229) (498,467) Gross profit 55,879 149,028 163,338 222,250 599,186 439,387 Initial recognition and change in fair value of

biological assets(1) 66 175 31,786 69,865 188,355 177,852

Profit before operating expenses 55,945 149,203 195,124 292,115 787,541 617,239 Selling expenses (3,227) (8,606) (4,710) (11,220) (30,248) (18,563) Administrative expenses (9,725) (25,936) (8,762) (24,624) (66,386) (42,924) Other operating expenses, net (722) (1,924) (1,364) (58) (157) (19,623) Profit from operation before financing and

taxation 42,271 112,737 180,288 256,213 690,750 536,129 Financial income 190 506 787 913 2,461 1,621 Financial expenses (6,484) (17,294) (7,591) (17,599) (47,446) (45,388) Exchange difference, net 2,237 5,966 268 6,808 18,354 11,096 Income attributable to associate 656 1,750 — — — — Profit before income tax 38,870 103,665 173,752 246,335 664,119 503,458 Income tax expense (6,103) (16,277) (25,956) (38,792) (104,584) (75,769) Profit for the period 32,767 87,388 147,796 207,543 559,535 427,689 Exchange differences on translating foreign

operations, net of deferred income tax (1,933) (5,155) — (4,947) (13,336) —

Fair value change in cash flow hedge, net (82) (219) (1,285) (325) (877) (5,141) Total comprehensive income for the year 30,752 82,014 146,511 202,271 545,322 422,548

________________________________ (1) See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Financial Presentation and Accounting

Policies—Valuation of biological assets” for a description of how we calculate the fair value of biological assets using the criteria set out in IAS 41, which requires that a biological asset should be measured at its fair value less the estimated point-of-sale costs.

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As of and for the Three

Months Ended March 31, As of and for the Years

Ended December 31,

2012 2012 2011 2011 2010

As of January 1,

2010


(in thousands of S/., except as

indicated)



Consolidated Statement of Financial Position:

(unaudited)

Non-current assets Property, plant and equipment 1,056,169 2,816,804 1,040,651 2,805,594 2,025,253 1,907,566 Intangible assets 76,166 203,135 75,195 202,727 130,743 131,477 Biological assets 161,256 430,069 140,570 378,978 155,721 82,726 Investments in associates 11,834 31,560 11,058 29,811 1,303 1,306 Deferred income tax assets 3,151 8,405 2,378 6,410 3,470 3,650 Trade and other accounts receivables 2,612 6,966 3,050 8,224 7,982 20,446 Total non-current assets 1,311,188 3,496,939 1,272,902 3,431,744 2,324,472 2,147,171

Current assets Biological assets 93,451 249,234 103,191 278,204 222,099 111,105 Inventories 100,336 267,595 111,423 300,395 80,870 76,385 Trade and other accounts receivables 45,939 122,520 43,515 117,317 102,017 84,938 Cash and cash equivalents 71,916 191,800 42,388 114,277 70,982 21,367 Total current assets 311,642 831,149 300,517 810,193 475,968 293,795 Total assets 1,622,830 4,328,088 1,573,419 4,241,937 2,800,440 2,440,966

Equity Share capital 107,616 287,011 106,458 287,011 287,011 270,136 Cumulative translation adjustment (4,648) (12,397) (3,316) (8,941) — — Legal and other reserves 16,457 43,892 16,335 44,039 44,674 21,299 Retained earnings 416,478 1,110,748 390,588 1,053,024 687,375 425,181 Equity attributable to equity holders of

the parent 535,903 1,429,254 510,065 1,375,133 1,019,060 716,616

Non-controlling interest 405,884 1,082,492 412,026 1,110,822 521,008 408,075 Total equity 941,787 2,511,746 922,091 2,485,955 1,540,068 1,124,691

Non-current liabilities Borrowings 91,188 243,198 96,429 259,973 347,284 284,201 Trade and other accounts payables 112,451 299,906 109,810 296,047 43,153 192,187 Provisions and other liabilities 2,529 6,745 3,177 8,566 9,086 8,197 Deferred income tax liabilities 175,655 468,472 174,511 470,481 353,854 329,574 Derivative financial instruments — — — — 15,074 15,183 Total non-current liabilities 381,823 1,018,321 383,927 1,035,067 768,451 829,342

Current liabilities Borrowings 112,503 300,046 108,181 291,657 186,335 159,476 Trade and other accounts payables 179,510 478,754 152,961 412,384 302,425 326,310 Provisions and other liabilities 3,418 9,117 2,343 6,316 3,161 1,147 Derivative financial instruments 3,789 10,104 3,916 10,558 — — Total current liabilities 299,220 798,021 267,401 720,915 491,921 486,933

Total liabilities 681,043 1,816,342 651,328 1,755,982 1,260,372 1,316,275 Total equity and liabilities 1,622,830 4,328,088 1,573,419 4,241,937 2,800,440 2,440,966

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Other data: EBITDA(1) ....................................................... 51,979 138,628 164,151 214,587 578,526 416,977 EBITDA margin(2) ........................................... 36.8% 36.8% 53.1% 44.4% 44.4% 44.5%Total debt(3) ..................................................... 302,049 805,566 302,946 816,744 533,619 Total debt / EBITDA(4) .................................... 1.46x 1.46x 1.41x 1.41x 1.28xNet debt(5) ........................................................ 230,133 613,766 260,558 702,467 462,637 Net debt / EBITDA(6)....................................... 1.11x 1.11x 1.21x 1.21x 1.11xFixed Charge Coverage Ratio(7)....................... 9.75x 9.75x 12.25x 12.25x 9.22xConsolidated Leverage Ratio(8)........................ 1.45x 1.45x 1.41x 1.41x 1.27x

________________________________ (1) EBITDA is calculated using profit from operations for the period before financing and taxation without initial recognition and change in fair

value of biological asset, added to depreciation and amortization. See “Presentation of Financial and Other Information.” We calculate EBITDA as follows:








Profit from operation before financing and taxation ............................................................

42,271

112,737

180,288

256,213

690,750

536,129

(-) Initial recognition and change in fair value of biological assets.................................

(66)

(175)

(31,786)

(69,865)

(188,355)

(177,852)

(+) Depreciation .............................................. 9,686 25,832 15,454 27,899 75,215 57,672 (+) Amortization.............................................. 88 234 195 340 916 1,028 EBITDA........................................................... 51,979 138,628 164,151 214,587 578,526 416,977



concluded period of four consecutive fiscal quarters, including the four consecutive fiscal quarters ended March 31, 2012. (7) See “Description of the Notes—Certain Definitions” for the definition of Fixed Charge Coverage Ratio. (8) See “Description of the Notes—Certain Definitions” for the definition of Consolidated Leverage Ratio.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations for the three months ended March 31, 2012 and 2011 and for the years ended December 31, 2011 and 2010 should be read in conjunction with (1) our unaudited condensed consolidated interim financial statements as of March 31, 2012 and for the three months ended March 31, 2012 and 2011 and (2) our audited consolidated financial statements as of December 31, 2011, 2010 and January 1, 2010 (transition date) and for the years ended December 31, 2011 and 2010, in each case included elsewhere in this offering memorandum, as well as the information presented under “Presentation of Financial and Other Information” and “Selected Financial and Other Information.”

The following discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those discussed in the forward-looking statements as a result of various factors, including those set forth in “Forward-Looking Statements” and “Risk Factors.”

Overview

We cultivate, harvest, purchase and crush sugarcane, the principal raw material used to produce sugar and ethanol. According to data provided by the Peruvian Ministry of Agriculture, we were the largest producer of sugar and the one of the two largest producers of ethanol (along with Grupo Romero’s Caña Brava) in Peru during 2011. Over the last three years, our main sugar product has been brown sugar. Our main ethanol product is hydrous ethanol.

During 2011, we recorded sales of products of S/.1,304 million (US$484 million), gross profit of S/.599 million (US$222 million) and profit for the year of S/.559 million (US$207 million). During the three months ended March 31, 2012, we recorded sales of products of S/.377 million (US$141 million), gross profit of S/.149 million (US$56 million) and profit for the period of S/.87 million (US$33 million).

We currently conduct our principal sugar and ethanol operations through our production facilities, Casa Grande, Cartavio, San Jacinto, La Troncal, San Isidro and Coazucar, which are located throughout Peru, and in Ecuador and Argentina. We currently market and sell all of our sugar and ethanol products, both domestically and through exports. We own and operate warehouse facilities at the port of Salaverry, in the La Libertad region, through which we export sugar and ethanol products. In Argentina we export our products through the port of Buenos Aires.

Factors Affecting Operating Results

Our results of operations have been influenced and will continue to be influenced by the following key factors:

Global Sugar Demand and Pricing

Sugar is a commodity and is subject to price fluctuations in the international market. Sugar prices are affected by the perceived and actual supply and demand for sugar and its substitute products. The supply of sugar is affected by weather conditions, governmental trade policies and regulations (including import tariffs and other trade restrictions) and the amount of sugarcane and sugar beet planted by farmers, including substitution by farmers growing other agricultural commodities for sugarcane or sugar beet. Demand is affected by growth in domestic and worldwide consumption of sugar and the prices of substitute sugar products. See “Peruvian Sugar Industry.” From time to time, imbalances may occur between overall sugarcane and sugar beet processing capacity, the supply of sugarcane and sugar beet and demand for sugar and ethanol products. Prices of sugar and ethanol products are also affected by these imbalances, which, in turn, impact our decision regarding when to sell our sugar and ethanol inventories, as well as our market projections regarding the recommended overall mix between sugar and ethanol.

According to OECD-FAO Agricultural Outlook 2011-2020, world raw sugar prices increased from an average of US$0.18 per pound in March 2010 to US$0.26 per pound in March 2011 and decreased to US$0.24 per pound in March 2012, principally due to: (1) demand for sugar that exceeded supply in part due to lower sugar production caused by droughts in China, India, Thailand and Brazil and a resulting reduction in world sugar inventories to meet demand; (2) the reduction in protectionist practices in the European market; and (3) the overall 11.7% appreciation of the nuevo sol against the U.S. dollar during this two-year period. As of June 30, 2012, the price of the NY11 sugar contract was US$0.22 per pound.

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Domestic Peruvian brown sugar prices rose similarly, increasing from an average of S/.1,622 per ton on December 31, 2009 to S/.2,088 per ton on December 31, 2010 to S/.2,075 per ton on December 31, 2011, according to the Peruvian Ministry of Agriculture. Due to the appreciation of the nuevo sol against the U.S. dollar, the domestic Peruvian price of brown sugar in U.S. dollar terms increased by approximately 4.2% (compared to a 0.6% decrease in nuevos soles) during 2011.

During the three months ended March 31, 2012, according to the Peruvian Ministry of Agriculture, the domestic Peruvian price of brown sugar decreased by approximately 4.0%, from S/.2,075 per ton on December 31, 2011 to S/.1,992 per ton on March 31, 2012, principally due to market expectations that production volumes in Brazil, Australia and India would decrease, thereby also decreasing global inventories. For a chart of the evolution of sugar prices, see “Peruvian Sugar Industry.”

We are also affected by domestic and international prices of ethanol, competition, governmental policies and regulations and market demand for ethanol. The price for ethanol that we sell domestically is determined in accordance with market prices. There is no established international reference price for ethanol, and prices for exported ethanol are generally set in accordance with international market prices, dictated by the balance of supply and demand and by opportunities to sell ethanol in Peru.

The Peruvian and the international sugar and ethanol industries are marked by periods of instability of offer and demand, resulting in changes in sales prices and profit margins. In addition to the factors described above, the following factors which are beyond our control contribute to the price fluctuations of sugar, ethanol and other sugarcane byproducts, including the following:

weather conditions and natural disasters in the regions where sugarcane is cultivated;

the production capacity of our competitors;

incentive trade policies in Peru and abroad for the production, sale, export and consumption of sugar, ethanol and other sugarcane byproducts;

governmental incentives and subsidies from other countries that also produce sugar, ethanol and other sugarcane byproducts;

negotiation developments in international trade, including at the WTO;

the growth rate of the world economy and the corresponding sugar consumption growth;

the GDP growth rate in Peru, which has a positive effect on the consumption of sugar and ethanol products in Peru, in particular by industries that produce or process food;

the exchange rate of the Peruvian nuevo sol against the U.S. dollar, which directly affects our sales of products and our financing costs, and indirectly affects the international market price of sugar and our cost of third- party supplied sugarcane;

tax policies adopted by the Peruvian federal government and by the governments of Argentina and Ecuador, and our resulting tax obligations, as well as tax policies adopted by the markets for sugar and ethanol; and

greater use of ethanol as a source of cleaner, renewable energy

Furthermore, both sugar and ethanol are negotiated in futures and commodities exchange and their prices may be affected by market speculation.

Cost of Products Sold

We incur costs and expenses in producing sugar and ethanol. For accounting purposes, we classify our cost of products sold into two major categories: (1) the cost of sugarcane; and (2) costs that we incur that are directly related to our processing of sugarcane into sugar and ethanol, or industrial costs. On a consolidated basis, our cost of sugarcane reflects the cost of purchasing sugarcane from related parties (including our controlling shareholders) and

47

from third parties. Our industrial costs include costs relating to our purchase of other raw materials that we use to process sugarcane, labor costs and benefits, third-party service costs, transportation costs, maintenance and replacement part costs, fuel and lubricant costs, taxes and administrative costs. As a percentage of our sales of products, our cost of products sold represented 54% and 53% during 2011 and 2010, respectively.

The following table shows the evolution of our principal costs for our three Peruvian mills for the periods presented.

Three Months Ended March 31, Years Ended December 31, 2012 2011 2011 2010 (as a percentage of total cost of products sold for the period)

Casa Grande Cost of sugarcane ........................... 71.9% 73.3% 68.1% 72.1% Industrial costs ............................... 28.1% 26.7% 31.9% 27.9% Total ............................................... 100.0% 100.0% 100.0% 100.0%

Cartavio Cost of sugarcane ........................... 91.6% 96.8% 94.7% 95.9% Industrial costs ............................... 8.4% 3.2% 5.3% 4.1% Total ............................................... 100.0% 100.0% 100.0% 100.0%

San Jacinto Cost of sugarcane ........................... 85.4% 79.8% 81.3% 77.7% Industrial costs ............................... 14.6% 20.2% 18.7% 22.3% Total ............................................... 100.0% 100.0% 100.0% 100.0%

As a producer of commodities, we attempt to increase our margins through efficient management of our operations, including effective control over our cost of sugarcane and industrial costs. We believe that our significant investments in mechanization (for both planting and harvesting) and in our logistical facilities have assisted us in improving our gross profit.

Prices for sugarcane are set based on the quality of sugarcane harvested. The unit price (per kilogram) of sugarcane varies in part based on the amount of sucrose equivalents in the sugar that we produce. The quality of sugarcane is also expressed in sucrose equivalents. To determine the amount of sucrose equivalents in sugarcane delivered to our mills, we inspect all of the sugarcane that we process upon receipt by our mills. Accordingly, the price of sugarcane that we pay to third parties is based on the quality of the sugarcane (as measured by sucrose equivalents), the volume of sugarcane delivered to us and the price per kilogram of sucrose equivalents.

Our Productivity

Our results of operations are materially affected by the level of our productivity, including the level of sucrose equivalents per ton of our harvested sugarcane, which is also affected by the quality of our soil. We have increased our agricultural productivity to 158 tons of sugarcane per hectare harvested during 2011, 25.4% higher than average productivity of sugarcane per hectare (126 tons) harvested in Peru during 2011. During 2011, we harvested approximately 67.0% of the total sugarcane that was planted in 2011. We operate 24 hours per day throughout the harvesting season. We are implementing precision agriculture techniques, such as automatic pilots and use of high precision GPS for soil preparation (including application of fertilizers and pesticides) and harvesting which will significantly improve our productivity levels, and we are also in the process of developing and testing mechanized planting. The use of GPS systems will allows us to steer our harvesters along predefined parallel tracks, which reduces soil compaction and damage to the crowns, thus, improving the productivity of our sugarcane for the harvest cycle.

We use computer simulations to model the harvesting, loading and transportation of our sugarcane under various conditions, which has assisted us in improving our productivity. We also have improved the quality of our soil through mechanized harvesting, as the leaves that remain after sugarcane has been harvested mechanically form a protective cover over the crop. This protective covers contributes to the reducing of erosion and increases the organic matter in the soil, which in turn reduces our use of chemical fertilizers and lowers our costs increasing productivity over time. In addition, we have improved our productivity by planting new varieties of sugarcane that are more resistant to diseases and pests and richer in sucrose concentration. We also use satellite imaging to monitor our sugarcane crops and to plan for the future.

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Our productivity is also determined in part by the level of sucrose equivalents per ton of our harvested sugarcane. During 2011, the sucrose equivalents per ton of our harvested sugarcane in Peru was 13.0%. The level of sucrose equivalents per ton of our harvested sugarcane during 2010 and 2009 was 12.9% and 12.8%, respectively.

Economic Conditions in Peru, Argentina and Ecuador

Most of our operations and a significant portion of our sales of products are derived from our sales in Peru. As a result, our results of operations and financial condition are primarily affected by Peruvian economic conditions, and to a lesser extent, by conditions in Argentina and Ecuador.

During the 1980s, Peru experienced a severe economic crisis and high levels of inflation. Beginning in the 1990s, however, the Peruvian government implemented a series of structural reforms, which contributed to the stabilization of the Peruvian economy, GDP growth, low inflation, lower interest rates, stable currency and significantly improved public finances. As a result, according to the International Monetary Fund, the Peruvian economy has been one of the fastest growing and most stable economies in Latin America since 2000. The average yearly rate of GDP growth between 1995 to 2011 was 5.0%.

The Peruvian economic environment has been characterized by significant variations in economic growth, inflation and currency exchange rates. The following table sets forth Peruvian GDP growth, inflation rates and exchange rates as of and for the three months ended March 31, 2012 and as of and for the three years ended December 31, 2011, 2010 and 2009:



Ended December 31, 2012 2011 2010 2009 GDP growth................................................................................ 6.0% 6.9% 8.8% 0.9% Inflation rate ............................................................................... 4.2% 3.4% 1.5% 2.9% Appreciation (devaluation) of nuevo sol against US$1.00 ........ 4.6% 3.9% 2.8% 8.0% Average exchange rate — nuevos soles against US$1.00 ......... S/.2.67 S/.2.70 S/.2.81 S/.2.89 _________________________________ Sources: Economist Intelligence Unit Country Report June 2012, IMF (International Financial Statistics).

The global economy experienced a period of significant financial instability in 2008 and 2009, accompanied by the worst global economic downturn in many decades. The Peruvian economy, while affected, was one of the few economies in Latin America to experience growth in 2009. Peru’s real GDP grew at a rate of 0.9% in 2009, sustained by the Peruvian government’s launching of fiscal stimulus programs. The following sectors of production showed the greatest contribution to GDP during this period: (i) construction, (ii) agriculture and (iii) electricity and water. Furthermore, Peru continues to be one of six countries in Latin America, along with Brazil, Chile, Colombia, Mexico and Panama, to have its sovereign debt obtain an investment grade credit rating by Standard and Poor’s Rating Services, Fitch Ratings Ltd. and Moody’s Investor Service.

The Peruvian economy has experienced a strong recovery during 2010 and 2011, with growth in GDP of 8.8% and 6.9%, respectively. This increase was mostly driven by increased domestic demand and stronger public and private investment. The 2010 and 2011 GDP growth represented one of the highest rates among Latin American countries. The high growth of GDP was primarily a result of growth in exports and in internal demand, which was attributable to increases in private investment and consumer spending.

San Isidro is located in Argentina and accounted for 4% of our EBITDA in 2011. The following table sets forth Argentine GDP growth, inflation rates and exchange rates as of and for the three months ended March 31, 2012 and as of and for the three years ended December 31, 2011, 2010 and 2009:



Ended December 31, 2012 2011 2010 2009 GDP growth................................................................................ 4.2% 8.9% 9.2% 0.9% Inflation rate ............................................................................... 9.8% 9.5% 10.9% 7.7% Appreciation (devaluation) of Pesos against US$1.00 .............. (8.0)% (5.4)% (5.1)% (18.2)% Average exchange rate — Pesos against US$1.00.................... Ps.4.34 Ps.4.11 Ps.3.90 Ps.3.71 _________________________________ Sources: Economist Intelligence Unit Country Report June 2012, IMF (International Financial Statistics).

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La Troncal is located in Ecuador and accounted for 6% of our EBITDA in 2011. The following table sets forth Ecuadorian GDP growth and inflation rates as of and for the three months ended March 31, 2012 and as of and for the three years ended December 31, 2011, 2010 and 2009:



Ended December 31, 2012 2011 2010 2009 GDP growth................................................................................ N/A 7.8% 3.6% 0.4% Inflation rate ............................................................................... 6.1% 5.4% 3.3% 4.3% _________________________________ Sources: Economist Intelligence Unit Country Report June 2012, IMF (International Financial Statistics).

Operating Expenses

We incur operating expenses, including our selling and administrative expenses, which consist of salaries and benefits paid to our employees, taxes, expenses related to third-party services, rentals (other than land) and other expenses. As a percentage of our sales of products, our selling and administrative expenses, represented 9.2%, 7.4% and 6.6% during the three months ended March 31, 2012 and for the years ended December 31, 2011 and 2010, respectively.

The costs and expenses we incur in selling our products include:

Selling expenses, which include freight (both in transferring sugar and ethanol products and in delivering final sugar products to our domestic and export customers and final ethanol products to our export customers, as our domestic ethanol customers generally accept delivery at our mills, commissions, professional fees, packaging, sales commissions, port and other (including inspection and certification) costs. We include these costs on our statement of comprehensive income under the line item “Selling expenses.”

Administrative expenses, which primarily consist of salaries and other charges payable in respect of our administrative staff and other employees; legal and consulting fees; and administrative expenses related to our monitoring and other activities at each of our production facilities. We include these costs on our statement of comprehensive income under the line item “Administrative expenses.”

Other operating expenses, which primarily consist of write-off of plant, property and equipment from previous years. We include these costs on our statement of comprehensive income under the line item “Other operating expenses, net.”

In addition to operating and administrative expenses, we incur:

financial expenses related to debt service payments in respect of our outstanding indebtedness, which we incur primarily to finance our exports and working capital. We record our financial expenses related to the indebtedness we incur to finance our exports and working capital, as well as financial expenses related to indebtedness that we incur to finance our operations, on our statement of comprehensive income under the line item “Financial expenses”;

expenses in connection with our hedging of our exposure to fluctuations in the value of the nuevo sol as against the U.S. dollar and other foreign currencies. We record our expenses on our statement of comprehensive income under the line item “Financial income”; and

expenses under transactions that we engage in from time to time to hedge our exposure to fluctuations in sugar and ethanol prices. We deduct these expenses from our sales of products.

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Financial Presentation and Accounting Policies

Our Financial Statements

We have prepared (1) our unaudited condensed consolidated interim statement of financial position as of March 31, 2012 and our unaudited condensed consolidated interim statements of comprehensive income for the three months ended March 31, 2012 and 2011 and (2) our audited consolidated statements of financial position as of December 31, 2011 and 2010 and at January 1, 2010 (transition date) and our audited consolidated statements of comprehensive income for the years ended December 31, 2011 and 2010, in each case, in accordance with IFRS, as issued by the IASB, and included elsewhere in this offering memorandum. Our annual financial statements have been audited by Dongo-Soria Gaveglio y Asociados Sociedad Civil de Responsabilidad Limitada, a member firm of PricewaterhouseCoopers.

Guarantors’ Financial Statements

Each of the Guarantors (other than Azucarera Olmos) is a publicly traded company in Peru and like us prepares annual consolidated financial statements comparable to those prepared by us. As indicated in this section, the Guarantors (other than Azucarera Olmos) are consolidated into our audited consolidated financial statements and unaudited condensed consolidated interim financial statements and represented at March 31, 2012 and December 31, 2011 (i) in the case of Casa Grande 41.7% and 40.5%, respectively, of our consolidated assets, 86.8% and 55.6%, respectively, of our consolidated profit and 51.3% and 52.5%, respectively, of our consolidated EBITDA, (ii) in the case of Cartavio 15.9% and 15.9%, respectively, of our consolidated assets, 12.0% and 20.3%, respectively, of our consolidated profit and 17.2% and 23.3%, respectively, of our consolidated EBITDA and (iii) in the case of San Jacinto 10.8% and 11.6%, respectively, of our consolidated assets, (7.7)% and 17.9%, respectively, of our consolidated profit and 16.0% and 12.4%, respectively, of our consolidated EBITDA. Furthermore, Casa Grande, Cartavio and San Jacinto at March 31, 2012 and December 31, 2011 had total liabilities of S/.614.6 million and S/.499.4 million, S/.312.6 million and S/.227.7 million and S/.180.7 million and S/.190.7 million, respectively.

We are an operating company and also operate through our subsidiaries, including Casa Grande, Cartavio and San Jacinto. Given the (i) relative contribution of Casa Grande, Cartavio and San Jacinto to our results of operations and financial condition, (ii) Casa Grande’s, Cartavio’s and San Jacinto’s ability under limited circumstances to incur additional indebtedness and (iii) limited amount of Casa Grande’s guarantee, we do not believe the inclusion of separate consolidated financial statements for each of the Guarantors would be material to a prospective purchaser’s decision on whether to invest in and acquire the notes.

Critical Accounting Policies

The presentation of our financial condition and results of operation in conformity with IFRS requires us to make certain judgments and estimates regarding the effects of matters that are inherently uncertain and that impact the carrying value of our assets and liabilities. Actual results could differ from those estimates. To provide an understanding about how we form our judgments and estimates about certain future events, including the variables and assumptions underlying the estimates, and the sensitivity of those judgments to different variables and conditions, we have summarized the critical accounting policies set forth below under IFRS that may be impacted by our judgments and estimates.

Functional Currency

Management has determined the functional currency of our principal operating entities to be the nuevo sol. These entities sell their products in international markets to customers in a number of countries, and sales are influenced by a number of currencies. Most operating costs are incurred in Peru but many are invoiced in U.S. dollars and the price of certain raw materials and supplies are influenced by the U.S. dollar. The borrowings and cash balances of these entities are held in nuevos soles, Argentine Pesos and U.S. dollars. Management has used its judgment to determine our functional currency, taking into account the secondary factors and concluded that the currency that most faithfully represents the economic environment and conditions of these entities is the nuevo sol.

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Valuation of biological assets

Biological assets of sugarcane are stated at their fair value less costs to sell. Land and related facilities are accounted for under property, plant and equipment.

To assess the fair value of biological assets we take into account the criteria set out in IAS 41, which requires that a biological asset should be measured at its fair value less the estimated point-of-sale costs. The fair value indicated is determined by using the present value of net cash flows expected to be obtained from the assets. Determining the fair value of an asset requires the application of judgment to decide on the way in which the biological asset will be recovered and assumptions to be used in its determination.

For the present value method, assumptions are used to estimate the harvest volumes, cost per ton, and depletion. Cost of delivery includes all costs associated with getting the harvested sugarcane produce to the market, being harvesting and allocated fixed overheads. Future cash flows are discounted using the pre-tax weighted average cost of capital. The net change in the fair value of biological assets as of the date of the consolidated statement of financial position is recognized in the consolidated statement of comprehensive income.

Property, plant and equipment

Property, plant and equipment are recorded at cost, less accumulated depreciation and impairment losses, if any. Historical cost comprises the purchase price and any costs directly attributable to the acquisition.

Where individual components of an item of property, plant and equipment have different useful lives, they are accounted for as separate items, which are depreciated separately.

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to Coazucar and the cost of the item can be measured reliably.

The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to the statement of comprehensive income during the period in which they are incurred.

Assets in the construction stage are capitalized as separate components. At their completion, the cost is transferred to the adequate category. Work in progress is not depreciated.

Land is not depreciated. Depreciation on other assets is calculated using the straight-line method, to allocate their cost to their residual values over their estimated useful lives, as follows:

Years Buildings and other constructions................................................. Up to 40 Machinery and equipment ............................................................ Between 3 and 30 Furniture and fixtures and others .................................................. Between 3 and 10 Vehicles ........................................................................................ Between 3 and 25

The assets’ residual values and useful lives are reviewed and adjusted, if appropriate, at the date of each statement of financial position. An asset’s carrying amount is immediately written down to its recoverable amount if it is greater than its estimated recoverable amount.

Gains and losses on disposals correspond to the difference between the proceeds and the carrying amount of the assets, which are included in the consolidated statement of comprehensive income.

Impairment of assets

Goodwill

For the purpose of impairment testing, assets are grouped at the lowest levels for which they separately generate identifiable cash flows. This group of assets is known as cash-generating units. If the recoverable amount of a cash-generating unit is less than the carrying amount of the assets within the unit, an impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit on a pro-rata

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basis based on the carrying amount of each asset in the unit. Goodwill impairment losses recognized cannot be reversed in a subsequent periods. The recoverable amount of goodwill is the higher of its fair value less costs to sell and its value in use. In assessing the value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted (see note 4 for details).

Property, plant and equipment and finite useful live intangible assets

At each statement of financial position date, Coazucar reviews the carrying amounts of its property, plant and equipment and finite useful live intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent, if any, of the impairment loss. Where the asset does not generate cash flows that are independent from other assets, Coazucar estimates the recoverable amount of the cash generating unit to which the asset belongs. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount.

An impairment loss is recognized immediately in the statement of comprehensive income. Where an impairment loss subsequently reverses the carrying amount of the asset or cash-generating unit is increased to the revised estimate of its recoverable amount, which should not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognized in the statement of comprehensive income.

Impairment of financial assets

We assess at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a “loss event”) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.

The criteria that we use to determine that there is objective evidence of an impairment loss include:

Significant financial difficulty of the issuer or obligor;

A breach of contract, such as a default or delinquency in interest or principal payments;

When we, for economic or legal reasons relating to the borrower’s financial difficulty, grant to the borrower a concession that the lender would not otherwise consider;

It becomes probable that the borrower will enter bankruptcy or other financial reorganization;

The disappearance of an active market for that financial asset because of financial difficulties; or

Observable data indicating that there is a measurable decrease in the estimated future cash flows from a portfolio of financial assets since the initial recognition of those assets, although the decrease cannot yet be identified with the individual financial assets in the portfolio, including: (i) adverse changes in the payment status of borrowers in the portfolio; and (ii) national or local economic conditions that correlate with defaults on the assets in the portfolio.

We first assess whether objective evidence of impairment exists.

The amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate. The asset’s carrying amount of the asset is reduced and the amount of the loss is recognized in the consolidated statement of comprehensive income. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. As a practical expedient, we may measure impairment on the basis of an instrument’s fair value using an observable market price.

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A provision for impairment of trade receivables is estimated when there is objective evidence that we will not be able to collect all amounts due according to the original terms of the invoice. The amount of the provision is determined as explained in the paragraph above. Bad debts are written off when they are assessed as uncollectible.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized (such as an improvement in the debtor’s credit rating), the reversal of the previously recognized impairment loss is recognized in profit or loss.

Inventories

Inventories comprise raw materials, finished goods (including harvested agricultural produce) and others.

The cost of finished products comprises the fair value of the agriculture produce less cost necessary to sell at the harvest point (an amount transferred from biological asset to productive process) plus the cost incurred in the industrial production process, such as direct labor, other direct cost and overhead production costs.

Inventories are measured at the lower of cost and net realizable value. Cost is determined using the weighted average method, except for in-transit inventory, which is stated by using the specific identification method. The net realization value is the estimated sales price of the product during the ordinary course of business, based on the current price less estimated costs to complete its production and expenses to place inventory in sales conditions.

Trade receivables

Current trade receivables are recognized initially at fair value and subsequently re-measured at amortized cost using the effective interest method, less any provision for impairment.

A provision for impairment of trade receivables is estimated when there is objective evidence that we will not be able to collect all amounts due according to the original terms of the invoice. The amount of the provision is the difference between the carrying amount and the present value of the recoverable amounts and this difference is recognized in the consolidated statement of comprehensive income. Bad debts are written off when they are assessed as uncollectible.

Revenue recognition

Revenue comprises the fair value of the consideration received or receivable for the sale of goods in the ordinary course of our activities. Revenue is shown net of value-added tax, returns, rebates and discounts and after eliminating sales within our group companies.

Revenue is recognized to the extent that it is probable that the economic benefits will flow to us and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognized:

Sale of goods

Sales of goods are recognized when all risks and rewards of ownership have been transferred to the buyer, usually on delivery of the goods. Sales of goods comprise of sales in three segments: Peru, Ecuador and Argentina, and also some exports to other countries.

Interest income

Revenue is recognized as interest accrues using the effective interest method.

Description of the Principal Statement of Comprehensive Income Line Items

Sales of products

We primarily generate revenue from the sales of our sugar (brown, white, refined and organic) as well as ethanol.

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Cost of products sold

Our cost of products sold primarily include: (1) the cost of our raw materials, which include sugarcane, (2) depreciation related to fixed assets used to produce our products, and (3) our labor costs associated with the production. Our raw material costs are our largest costs of sales.

Selling expenses

Our selling expenses primarily include commissions, professional fees, transportation of our products from our plants to our distribution centers (heavy freight costs) and to the port of embarkation.

Administrative expenses

Our administrative expenses primarily include labor expenses for our management, third party services such as professional services and other items such as rent, insurance and depreciation.

Financial income (expenses)

Our financial income is comprised mainly of interest on bank deposits. Our financial expenses primarily include the interest on borrowings and other accounts payable.

Income taxes - current and deferred

Our tax expense for the year comprises the charge for current tax payable and deferred taxation attributable to our operating subsidiaries. Tax is recognized in the statement of comprehensive income, except to the extent that it relates to items recognized directly in equity. In this case, the tax is also recognized in equity.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the date of the statement of financial position in the countries where our subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred income tax is recognized, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the date of the statement of financial position and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.

Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized.

Deferred income tax is provided on temporary differences arising on investments in associates, except where the timing of the reversal of the temporary difference is controlled by us and it is probable that the temporary difference will not reverse in the foreseeable future.

Results of Operations

The following discussion of our results of operations for the years ended December 31, 2011 and 2010 and for the three months ended March 31, 2012 and 2011 is based on our financial statements, together with the notes thereto, prepared in accordance with IFRS, as issued by the IASB, and included in this offering memorandum.

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Three Months Ended March 31, 2012 Compared to the Three Months Ended March 31, 2011

The following table provides a summary of our results of operations for the three months ended March 31, 2012 and 2011:

For the Three Months Ended March 31, % of Sales of Products 2012 2011 % Change 2012 2011 (in millions of S/.) (unaudited) Sales of products....................................................... 377.2 309.2 22.0% 100.0% 100.0%Cost of products sold ................................................ (228.2) (145.8) 56.5% 60.5% 47.2%Gross profit ............................................................... 149.0 163.3 (8.8)% 39.5% 52.8%Initial recognition and change in fair value of

biological assets .....................................................

0.2

31.8

(99.4)%

0.0%

10.3%Selling expenses........................................................ (8.6) (4.7) 82.7% 2.3% 1.5%Administrative expenses ........................................... (25.9) (8.8) 196.0% 6.9% 2.8%Other operating expenses, net ................................... (1.9) (1.4) 41.1% 0.5% 0.4%Financial income....................................................... 0.5 0.8 (35.7)% 0.1% 0.3%Financial expenses .................................................... (17.3) (7.6) 127.8% 4.6% 2.5%Exchange difference, net........................................... 6.0 0.3 2126.1% 1.6% 0.1%Income attributable to associate................................ 1.8 — 0.0% 0.5% 0.0%Income tax expense................................................... (16.3) (26.0) (37.3)% 4.3% 8.4%Profit for the period .................................................. 87.4 147.8 (40.9)% 23.2% 47.8%

Sales of products

Our sales of products increased by 22.0% to S/.377.2 million during the three months ended March 31, 2012 from S/.309.2 million during the corresponding period in 2011, primarily as a result of: (i) a 1.1% increase in the volume of sugarcane crushed to 1.31 million tons during the three months ended March 31, 2012 from 1.29 million tons during the corresponding period in 2011, (ii) a 19.9% increase in sales of products from sugar to S/.340.1 million during the three months ended March 31, 2012 from S/.283.8 million during the corresponding period in 2011 and (iii) a 60.5% increase in sales of products from ethanol to S/.30.9 million during the three months ended March 31, 2012 from S/.19.3 million during the corresponding period in 2011.

Sugar

Our sales of products from sugar increased by 19.9% to S/.340.1 million during the three months ended March 31, 2012 from S/.283.8 million during the corresponding period in 2011, primarily as a result of a 31.5% increase in sales of products from domestic sugar sales, which was partially offset by a 50.0% decrease in sales of products from export sugar sales.

The 31.5% increase in sales of products from domestic sugar sales was due to a 39.9% increase in domestic sales volumes to 163,280 tons during the three months ended March 31, 2012 from 116,705 tons during the corresponding period in 2011, which was partially offset by a 6.0% decrease in average domestic sugar sale prices for the period to S/.1,958 per ton during the three months ended March 31, 2012 from S/.2,083 per ton during the corresponding period in 2011.

The 50.0% decrease in sales of products from sugar exports was due to a 48.0% decrease in export sales volumes to 9,201 tons during the three months ended March 31, 2012 from 17,697 tons during the corresponding period in 2011, as a result of a 19.9% decrease in our average sugar sale prices in Peru for the period to S/.1,840 per ton during the three months ended March 31, 2012 from S/.2,298 per ton during the corresponding period in 2011.

Ethanol

Our sales of products from ethanol increased by 60.5% to S/.30.9 million during the three months ended March 31, 2012 from S/.19.3 million during the corresponding period in 2011, primarily as a result of:

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a 24.1% increase in domestic sales volumes of ethanol to 3,034 cubic meters during the three months ended March 31, 2012 from 2,444 cubic meters during the corresponding period in 2011, as a result of incorporating the operations of our new subsidiaries in Argentina and Ecuador in the second half of 2011;

a 9.4% increase in average domestic sales price of ethanol in Peru to S/.1,567 per cubic meter during the three months ended March 31, 2012 from S/.1,433 per cubic meter during the corresponding period in 2011;

a 45.7% increase in export sales volumes of ethanol to 14,164 cubic meters during the three months ended March 31, 2012 from 9,721 cubic meters during the corresponding period in 2011, as a result of the increase of ethanol consumption in our export countries, primarily due to the higher production of molasses, which we used to produce ethanol; and

a 6.0% increase in average international sales price of ethanol to S/.1,720 per cubic meter during the three months ended March 31, 2012 from S/.1,623 per cubic meter during the corresponding period in 2011.


Cost of products sold increased by 56.5% to S/.228.2 million during the three months ended March 31, 2012 from S/.145.8 million during the corresponding period in 2011, primarily as a result of incorporating the operations of our new subsidiaries in Argentina and Ecuador in the second half of 2011. As a percentage of our sales of products, cost of products sold increased to 60.5% during the three months ended March 31, 2012 from 47.2% during the corresponding period in 2011.

Gross Profit

Gross profit decreased by 8.8% to S/.149.0 million during the three months ended March 31, 2012 from S/.163.3 million during the corresponding period in 2011, primarily as a result of (i) higher production costs as the result of a reduction in water levels at Casa Grande and (ii) an anomalous administrative delay on the part of the export client at the port of Salaverry, resulting in sugar being held at the port before shipment to the United States.

Initial Recognition and Change in Fair Value of Biological Assets

Initial recognition and change in fair value of biological assets decreased by 99.4% to S/.0.2 million during the three months ended March 31, 2012 from S/.31.8 million during the corresponding period in 2011, primarily as a result of a decrease of approximately 11% in the estimated price of sugar by the FAO and an increase in administrative expenses in 2012 derived from the acquisition of La Troncal, which affected our calculation of fair value of biological assets. See “—Financial Presentation and Accounting Policies—Valuation of biological assets” for a description of how we calculate the fair value of biological assets using the criteria set out in IAS 41, which requires that a biological asset should be measured at its fair value less the estimated point-of-sale costs.

Selling Expenses

Selling expenses increased by 82.7% to S/.8.6 million during the three months ended March 31, 2012 from S/.4.7 million during the corresponding period in 2011, primarily as a result of (i) a 28.3% increase in sales volumes of sugar to 172,481 tons during the three months ended March 31, 2012 from 134,403 tons during the corresponding period in 2011 and (ii) a 41.4% increase in sales volume of ethanol to 17,198 cubic meters during the three months ended March 31, 2012 from 12,165 cubic meters during the corresponding period in 2011. As a percentage of our sales of products, our selling expenses increased to 2.3% during the three months ended March 31, 2012 from 1.5% during the corresponding period in 2011.

Administrative Expenses

Administrative expenses increased by 196.0% to S/.25.9 million during the three months ended March 31, 2012 from S/.8.8 million during the corresponding period in 2011, primarily as a result of (i) a S/.7.4 million increase in salaries primarily as a result of incorporating the operations of our new subsidiaries in Argentina and Ecuador in the second half of 2011 and (ii) a S/.4.7 million increase in expenses related to depreciation and amortization. As a

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percentage of our sales of products, our administrative expenses increased to 6.9% during the three months ended March 31, 2012 from 2.8% during the corresponding period in 2011.

Other Operating Expenses, Net

Other operating expenses, net, increased by 41.1% to S/.1.9 million during the three months ended March 31, 2012 from S/.1.4 million during the corresponding period in 2011, primarily due to the effect of adjustments for a recording error in actual sugar inventories recorded in our mills for the three months ended March 31, 2012.

Financial Income

Financial income sold decreased by 35.7% to S/.0.5 million during the three months ended March 31, 2012 from S/.0.8 million during the corresponding period in 2011, primarily as result of the higher financial expenses associated with the acquisition of our new subsidiaries in Argentina and Ecuador in the second half of 2011.

Financial Expenses

Financial expenses increased by 127.8% to S/.17.3 million during the three months ended March 31, 2012 from S/.7.6 million during the corresponding period in 2011, primarily as a result of new debt and financial expenses originated from the companies that we acquired in Argentina and Ecuador in the second half of 2011.

Exchange Difference, Net

Exchange difference, net, increased to S/.6.0 million during the three months ended March 31, 2012 from S/.0.3 million during the corresponding period in 2011, primarily as a result of (i) a 4.9% appreciation in the nuevo sol against the U.S. dollar, to S/.2.667 per US$1.00 during the three months ended March 31, 2012, from S/.2.804 per US$1.00 during the corresponding period of 2011, and (ii) the indebtedness of the companies that we acquired in Argentina and Ecuador in the second half of 2011, which amounted to US$115.0 million as of March 31, 2012.

Income Attributable to Associate

Income attributable to associate increased to S/.1.8 million during the three months ended March 31, 2012 from S/.0 during the corresponding period in 2011, primarily as a result of our acquisition of 50% of the shares of Producargo S.A., an ethanol company, of which we own 36.4%. We do not consolidate Producargo in our financial statements. See note 2.2(c) to our audited consolidated financial statements included in this offering memorandum.

Income Tax Expense

Our income tax expense decreased by 37.3% to an expense of S/.16.3 million during the three months ended March 31, 2012 from an expense of S/.26.0 million during the corresponding period in 2011, primarily as a result of minor profits before income tax.

Profit for the Period

As a result of the foregoing, during the three months ended March 31, 2012, we recorded profit for the period of S/.87.4 million, compared to a profit for the period of S/.147.8 million during the corresponding period in 2011.

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Year Ended December 31, 2011 Compared with Year Ended December 31, 2010

The following table provides a summary of our results of operations for the years ended December 31, 2011 and 2010:

For the Years Ended December 31, % of Sales of Products

2011 2010 % Change 2011 2010 (in millions of S/.) Sales of products................................................. 1,304.4 937.9 39.1% 100.0% 100.0% Cost of products sold .......................................... (705.2) (498.5) 41.5% 54.1% 53.1% Gross profit ......................................................... 599.2 439.4 36.4% 45.9% 46.9% Initial recognition and change in fair value of

biological assets ...............................................

188.4

177.9

5.9%

14.4%

19.0% Selling expenses.................................................. (30.2) (18.6) 62.9% 2.3% 2.0% Administrative expenses ..................................... (66.4) (42.9) 54.7% 5.1% 4.6% Other operating expenses, net ............................. (0.2) (19.6) (99.2)% 0.0% 2.1% Financial income................................................. 2.5 1.6 51.8% 0.2% 0.2% Financial expenses .............................................. (47.4) (45.4) 4.5% 3.6% 4.8% Exchange difference, net..................................... 18.4 11.1 65.4% 1.4% 1.2% Income tax expense............................................. (104.6) (75.8) 38.0% 8.0% 8.1% Profit for the year................................................ 559.5 427.7 30.8% 42.9% 45.6%

Sales of Products

Our sales of products increased by 39.1% to S/.1,304.4 million during 2011 from S/.937.9 million during 2010, primarily as a result of: (i) a 42.6% increase in volume of sugarcane crushed to 6.7 million tons during 2011 from 4.7 million tons during 2010, (ii) a 40.5% increase in sales of products from sugar to S/.1,166.2 million during 2011 from S/.830.1 million during 2010 and (iii) a 21.6% increase in sales of products from ethanol to S/.93.4 million during 2011 from S/.76.8 million during 2010.

Sugar

Our sales of products from sugar increased by 40.5% to S/.1,166.2 million during 2011 from S/.830.1 million during 2010, primarily as a result of: (i) a 39.5% increase in sales of products from sugar export and (ii) a 40.6% increase in sales of products from domestic sugar sales.

The 39.5% increase in sales of products from sugar export was due to (i) a 2.1% increase in export sales volume to 55,450 tons during 2011 from 54,298 tons during 2010 and (ii) a 36.6% increase in the average international sugar sale prices for the period to S/.2,464 per ton during 2011 from S/.1,804 per ton during 2010.

The 40.6% increase in sales of products from domestic sugar sales was due to (i) a 23.5% increase in domestic sales volumes to 503,273 tons during 2011 from 407,351 tons during 2010 and (ii) a 13.8% increase in average domestic sugar sale prices for the period to S/.2,046 per ton during 2011 from S/.1,797 during 2010.

Ethanol

Our sales of products from ethanol increased by 21.6% to S/.93.4 million during 2011 from S/.76.8 million during 2010, primarily as a result of:

a 45.2% increase in domestic sales volume of ethanol to 10,083 cubic meters during 2011 from 6,944 cubic meters during 2010.

a 1.7% increase in export sales volume of ethanol to 42,516 cubic meters during 2011 from 41,798 cubic meters during 2010; and

a 9.2% increase in average sales price of ethanol in Peru to S/.1,720 per cubic meter during 2011 from S/.1,576 per cubic meter during 2010.

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Cost of products sold increased by 41.5% to S/.705.2 million during 2011 from S/.498.5 million during 2010, primarily as a result of a 43.7% increase in sugarcane crushed to 6.7 million tons during 2011 from 4.7 million tons during 2010. As a percentage of our sales of products, cost of products sold increased to 54.1% during 2011 from 53.1% during 2010.

Gross Profit

Gross profit increased by 36.4% to S/.599.2 million during 2011 from S/.439.4 million during 2010, as a result of (i) a 5.5% increase in the price of sugar in Peru in 2011 and a 5.3% increase in the price of ethanol in Peru in 2011 and (ii) a 21.6% in the sales volume of sugar and (iii) a 8.2% increase in the sales volume of ethanol in 2011.

Initial Recognition and Change in Fair Value of Biological Assets

Initial recognition and change in fair value of biological assets increased by 5.9% to S/.188.4 million during 2011 from S/.177.9 million during 2010, as a result of (i) a 36.6% increase in the average international sugar sale prices for the period to S/.2,464 per ton during 2011 from S/.1,804 per ton during 2010, (ii) a decrease in the discount rate to 9.7% from 11.7%, and (iii) a decrease in the projected production volume of sugarcane of 8.8% in 2011, with respect to 2010.

Selling Expenses

Selling expenses increased by 62.9% to S/.30.2 million during 2011 from S/.18.6 million during 2010, primarily as a result of a 21.0% increase in sugar sales volume to 558,723 tons during 2011 from 461,649 tons during 2010 and a 7.9% increase in ethanol sales volume to 52,599 cubic meters during 2011 from 48,742 cubic meters during 2010. As a percentage of our sales of products, our selling expenses increased to 2.3% during 2011 from 2.0% during 2010.

Administrative Expenses

Administrative expenses increased by 54.7% to S/.66.4 million during 2011 from S/.42.9 million during 2010, primarily as a result of an increase in (i) legal fees, (ii) depreciation and (iii) security, contractor, marketing and utilities fees associated with the companies that we acquired in Argentina and Ecuador in the second half of 2011. As a percentage of our sales of products, our administrative expenses increased to 5.1% during 2011 from 4.6% during 2010.

Other Operating Expenses, Net

Other operating expenses, net, decreased by 99.2% to S/.0.2 million during 2011 from S/.19.6 million during 2010, as a result of a decrease in the write-offs of plant, property and equipment that was recorded because they were no longer being used.

Financial Income

Financial income increased by 51.8% to S/.2.5 million during 2011 from S/.1.6 million during 2010, primarily as a result of a 340.7% increase in interest on bank deposits to S/.1.6 million during 2011 from S/.0.4 million during 2010 associated with the companies that we acquired in Argentina and Ecuador in the second half of 2011.

Financial Expenses

Financial expenses increased by 4.5% to S/.47.4 million during 2011 from S/.45.4 million during 2010, primarily as a result of a 38.0% increase in interest on borrowings to S/.40.1 million during 2011 from S/.29.1 million during 2010 primarily associated with the companies that we acquired in Argentina and Ecuador in the second half of 2011.

Exchange Difference, Net

Exchange difference, net, increased by 65.4% to S/.18.4 million during 2011 from S/.11.1 million during 2010, as a result of (i) a 4.0% appreciation of the nuevo sol against the U.S. dollar, to S/.2.696 per US$1.00 during 2011,

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from S/.2.809 per US$1.00 during the corresponding period of 2010, and (ii) the indebtedness associated with the companies that we acquired in Argentina and Ecuador in the second half of 2011.

Income Tax Expense

We recorded income tax expenses of S/.104.6 million during 2011 and income tax expenses of S/.75.8 million during 2010, primarily as a result of a 31.9% increase in our profit before income taxes during 2011.

Profit for the Year

As a result of the foregoing, we recorded profit for the year of S/.559.5 million during 2011 compared to S/.427.7 million during 2010.

The Guarantors

Casa Grande

Casa Grande was incorporated in 1860 and it is the largest sugar mill in Peru, owning 31,377 hectares, of which 28,128 hectares are arable and 21,115 hectares are used for sugarcane production. Casa Grande produces sugar, bagasse, molasses and alcohol. We acquired a minority ownership interest in Casa Grande in October 2005 and became majority shareholders in January 2006 with a 57.09% ownership interest.

Casa Grande is located 50 kilometers north of Trujillo, 610 kilometers north of Lima, in the province of Ascope, region of La Libertad, where the Chicama River is its main source of irrigation, discharging more than 400 million cubic meters of water a year.

Casa Grande is Peru’s leading sugar producer, selling brown sugar in the local and international markets, and also the third largest hydrous alcohol producer in Peru, exporting all of its alcohol production. Casa Grande has a crushing capacity of 3.3 million tons per year and a daily ethanol production capacity of 60,000 liters.

As of March 31, 2012, Casa Grande harvested during 83 days (84 days as of March 31, 2011), crushed 648.2 thousand tons of sugarcane (665.0 thousand as of March 31, 2011), of which 90.4% of the sugarcane crushed was produced by Casa Grande and the remaining 9.6% was acquired from third parties. In addition, Casa Grande produced 71.2 thousand tons of sugar (73.9 thousand as of March 31, 2011), 204.7 thousand tons of bagasse (198.5 thousand as of March 31, 2011), 24.7 thousand tons of molasses (29.2 thousand as of March 31, 2011) and 3.9 million liters of alcohol (3.8 million as of March 31, 2011).

During 2011, Casa Grande harvested during 312 days (322 days in 2010), crushed 2.3 million tons of sugarcane (2.4 million in 2010), of which 90.5% of the sugarcane crushed was produced by Casa Grande and the remaining 9.5% was acquired from third parties. In addition, Casa Grande produced 257.3 thousand tons of sugar (247.5 thousand in 2010), 714.5 thousand tons of bagasse (716.8 thousand in 2010), 90.4 thousand tons of molasses (13.5 thousand in 2010) and 12.7 million liters of alcohol (13.5 million in 2010).

As of March 31, 2012, Casa Grande recorded a sales of product of S/.153.3 million (S/.175.4 million as of March 31, 2011), generated an EBITDA of S/.71.1 million, had a total debt of S/.106.8 million and had a net debt of S/.70.1 million.

As of December 31, 2011, Casa Grande recorded a sales of product of S/.583.4 million (S/.490.8 million as of December 31, 2010), generated an EBITDA of S/.303.6 million, had a total debt of S/.119.1 million and had a net debt of S/.110.5 million.

Cartavio

Cartavio was incorporated in 1782 and is the second largest contributor to our total comprehensive income of our sugar mills in Peru, owning 7,932 hectares, of which 7,486 hectares are arable and 6,891 hectares are used for sugarcane production. Cartavio produces sugar, bagasse, molasses and alcohol. We acquired 52.23% of Cartavio in May 2007 and between 2007 through 2009, we increased our ownership interest to 87.17%.

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Cartavio is located 50 kilometers north of Trujillo, 610 kilometers north of Lima, in the province of Ascope, region of La Libertad, near to Casa Grande.

Cartavio is Peru’s second largest producer of sugar, selling sugar in the local and international markets. Cartavio is also the second largest hydrous alcohol producer in Peru, exporting all of its alcohol production. Cartavio has a crushing capacity of 2.4 million tons per year and a daily ethanol production capacity of 80,000 liters.

As of March 31, 2012, Cartavio harvested during 76 days (76 days as of March 31, 2011), crushed 449.7 thousand tons of sugarcane (455.0 thousand as of March 31, 2011), of which 49.8% of the sugarcane crushed was produced by Cartavio and the remaining 50.2% was acquired from third parties. In addition, Cartavio produced 39.3 thousand tons of sugar (41.2 thousand as of March 31, 2011), 122.9 thousand tons of bagasse (127.5 thousand as of March 31, 2011) and 3.7 million liters of alcohol (4.1 million as of March 31, 2011).

During 2011, Cartavio harvested during 287 days (298 days in 2010), crushed 1.7 million tons of sugarcane (1.7 million in 2010), of which 45.5% of the sugarcane crushed was produced by Cartavio and the remaining 54.5% was acquired from third parties. In addition, Cartavio produced 154.5 thousand tons of sugar (155.1 thousand in 2010), 465.2 thousand tons of bagasse (490.8 thousand in 2010), 9.7 thousand tons of molasses and 15.8 million liters of alcohol (16.7 million in 2010).

As of March 31, 2012, Cartavio recorded a sales of product of S/.95.7 million (S/.99.4 million as of March 31, 2011), generated an EBITDA of S/.23.8 million, had a total debt of S/.54.0 million and had a net debt of S/.32.4 million.

As of December 31, 2011, Cartavio recorded a sales of product of S/.401.7 million (S/.362.1 million as of December 31, 2010), generated an EBITDA of S/.134.7 million, had a total debt of S/.56.2 million and had a net debt of S/.47.9 million.

San Jacinto

San Jacinto was incorporated in 1872 and owns 12,349 hectares, of which 11,035 hectares are arable and 6,081 hectares are used for sugarcane production. San Jacinto produces sugar, bagasse, molasses and alcohol. We acquired 72.62% of San Jacinto in 2009 and through a mandatory tender offer increased our ownership interest to 82.63% in March 2010.

San Jacinto is located 45 kilometers of Chimbote, 405 kilometers north of Lima, in the province of Santa, district of Nepeña, region of Ancash.

San Jacinto sells white and brown sugar in the local and international markets. San Jacinto has a crushing capacity of 1.2 million tons per year and a daily ethanol production capacity of 40,000 liters.

As of March 31, 2012, San Jacinto harvested during 84 days (73 days as of March 31, 2011), crushed 207.6 thousand tons of sugarcane (171.5 thousand as of March 31, 2011), of which 76.1% of the sugarcane crushed was produced by San Jacinto and the remaining 23.9% was acquired from third parties. In addition, San Jacinto produced 23.0 thousand tons of sugar (20.8 thousand as of March 31, 2011), 61.5 thousand tons of bagasse (50.8 thousand as of March 31, 2011) and 0.6 million liters of alcohol (1.0 million as of March 31, 2011).

During 2011, San Jacinto harvested during 286 days (279 days in 2010), crushed 0.7 million tons of sugarcane (0.6 million in 2010), of which 76.1% of the sugarcane crushed was produced by Cartavio and the remaining 23.9% was acquired from third parties. In addition, San Jacinto produced 80.1 thousand tons of sugar (67.9 thousand in 2010), 198.1 thousand tons of bagasse (178.1 thousand in 2010), 27.7 thousand tons of molasses (21.8 thousand in 2010) and 2.4 million liters of alcohol (1.5 million in 2010).

As of March 31, 2012, San Jacinto recorded a sales of product of S/.48.4 million (S/.42.2 million as of March 31, 2011), generated an EBITDA of S/.22.2 million, had a total debt of S/.103.5 million and had a net debt of S/.102.9 million.

As of December 31, 2011, San Jacinto recorded a sales of product of S/.164.9 million (S/.122.7 million as of December 31, 2010), generated an EBITDA of S/.71.9 million, had a total debt of S/.105.4 million and had a net debt of S/.103.4 million.

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Azucarera Olmos

Azucarera Olmos was incorporated on May 9, 2012 to develop the Olmos Expansion Plan in Olmos, Lambayeque, Peru. As of the date of this offering memorandum, Azucarera Olmos has no material sales of product, EBITDA, total debt or net debt. See “Presentation of Financial and Other Information—General.”

Liquidity and Capital Resources

Our financial condition and liquidity is and will be influenced by a variety of factors, including:

our ability to generate cash flows from our operations and our ability to sell and distribute our sugar and ethanol;

the level of our outstanding indebtedness and the interest we are obligated to pay on this indebtedness;

prevailing domestic and international interest rates, which affects our net financial expenses;

our ability to continue to borrow funds from Peruvian and international financial institutions; and

our capital expenditure requirements, which consist primarily of investments in crop planting and the maintenance of our agricultural and industrial equipment.

Our cash requirements consist mainly of the following:

working capital requirements;

the servicing of our indebtedness;

the payment of dividends or interest attributable to equity; and

capital expenditures related to investments in our agricultural and industrial operations.

Our sources of liquidity consist mainly of the following:

cash flows from our operating activities, derived mainly from our sale and distribution of our sugar and ethanol; and

short- and long-term borrowings.

During the three months ended March 31, 2012 and the year ended December 31, 2011, we used cash flow generated by operations primarily for investments in our agricultural and industrial operations and for working capital requirements. As of March 31, 2012, our cash and cash equivalents and other investments amounted to S/.191.8 million, and we had working capital of S/.33.1 million.

Projected Sources and Uses of Cash

We anticipate that we will be required to spend approximately S/.971.1 million to meet our short-term contractual obligations and commitments and budgeted capital expenditures in 2012. We expect that we will meet these cash requirements through a combination of cash generated from operating activities and cash generated by financing activities, including some of the proceeds of this offering and the refinancing of our existing short-term indebtedness as it becomes due.

We anticipate that we will be required to spend approximately S/.722.2 million to meet our commitments and budgeted capital expenditures through the end of 2013. We anticipate that we will meet these cash requirements through a combination of cash generated from operating activities and cash generated by financing activities, including additional debt financings and the refinancing of our existing indebtedness as it becomes due.

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Indebtedness

General

As of March 31, 2012, our total outstanding indebtedness on a consolidated basis was approximately S/.805.6 million, consisting of S/.338.0 million of short-term indebtedness, including the current portion of long-term indebtedness (or 42.0% of our total indebtedness), and S/.467.5 million of long-term indebtedness (or 58.0% of our total indebtedness). As of March 31, 2012, 30.4%, 67.6% and 2.0% of our outstanding indebtedness was denominated in nuevos soles, U.S. dollars and Argentine pesos.

As of March 31, 2012, 67.4% of our total indebtedness corresponded to working capital financial lines of credit and the remaining 32.6% to others, such as government development banks. As of March 31, 2012, S/.621.3 million (or 77.1%) of our debt was secured.

The following table sets forth selected information with respect to our principal outstanding indebtedness as of March 31, 2012:

Lender Borrower Currency Interest Rate Maturity Date Collateral

Outstanding Principal Amount as

of March 31, 2012 (in thousands)

Outstanding Principal Amount as of March 31, 2012 adjusted in

accordance with IFRS(in thousands)

BBVA Coazucar S/. 7.65% September 2015 Coazucar’s shares of Cartavio and Casa Grande; properties of Sintuco

US$23,563 US$23,563

Citibank Coazucar S/. 7.10% November 2012 Coazucar’s shares of Cartavio

US$18,810 US$18,810

Corporación Financiera Nacional

Coazucar US$ 5.06% March 2026 Coazucar’s shares of Producargo

US$7,274 US$7,274

Citibank Coazucar US$ 5.45% May 2012 None US$9,000(1) US$9,000(1)

Citibank Coazucar US$ 5.45% June 2012 None US$26,000(1) US$26,000(1)

BBVA Casa Grande S/. 6.90% June 2017 Mortgage over certain properties of Casa Grande and a joint obligation of Coazucar

US$14,764 US$14,764

Citibank-Scotiabank

Casa Grande US$ LIBOR+5.70% December 2015 Mortgage over certain physical properties of Casa Grande

US$20,000 US$20,000

Banco de Crédito del Perú

Cartavio S/. 7.00% February 2015 None US$11,249 US$11,249

Scotiabank San Jacinto S/. 7.75% June 2017 Properties of San Jacinto and a joint obligation of Gloria S.A.

US$20,247 US$20,247

Interbank San Jacinto S/. 7.50% June 2016 Coazucar’s shares of San Jacinto; properties of San Jacinto

US$9,822 US$9,822

BanBif San Jacinto S/. 7.50% June 2016 Coazucar’s shares of San Jacinto; properties of San Jacinto

US$8,036 US$8,036

Corporación Financiera Nacional

La Troncal US$ 5.00% July 2026 Coazucar’s shares of La Troncal

US$117,085(2) US$91,070

Other

US$36,506(2) US$42,214 Total US$322,356(2) US$302,049

_________________________________ (1) As of the date of this offering memorandum, these loans have been fully repaid. (2) Nominal amounts. Unless otherwise specified, the figures appearing in the financial statements and elsewhere in this offering memorandum

have been adjusted in accordance with IFRS.

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Short-Term Indebtedness

Our consolidated short-term indebtedness, including the current portion of long-term debt, increased to S/.338.0 million as of March 31, 2012 from S/.329.7 million as of December 31, 2011, primarily as a result of increase in working capital requirements during the first three months of the year.

We also maintain short-term lines of credit with a number of financial institutions in Peru. Although we have no committed lines of credit with these financial institutions, we believe that we will continue to be able to obtain sufficient credit to finance our working capital needs based on current market conditions. As of March 31, 2012, the total outstanding balance under our short-term working capital lines of was S/.122.0 million.

Long-Term Indebtedness

Our consolidated long-term indebtedness decreased to S/.467.5 million as of March 31, 2012 from S/.486.9 million as of December 31, 2011, primarily as a result of the decrease in the short-term portion of our long-term indebtedness. Our long-term indebtedness is mainly composed of bank loans.

As of March 31, 2012, some of our long-term indebtedness owed to financial institutions required that we comply with financial covenants (on a consolidated basis), the most restrictive of which were the following:

Debt service coverage ratio shall be not less than: 1.3x for Coazucar and Casa Grande, 1.2x for Cartavio and 1.75x for San Jacinto.

Debt to EBITDA ratio shall not exceed: 2.0x for Coazucar, 2.25x for Casa Grande, 1.9x for Cartavio, 3.0x for San Jacinto and 4.0x for San Isidro.

Leverage shall not exceed: 1.0x for Coazucar and Cartavio, 0.75x for Casa Grande, 1.3x for San Jacinto and 4.0x for San Isidro.

Consolidated assets to consolidated liabilities shall be not less than: 1.7x for Coazucar and 1.0x for Cartavio.

Many of these instruments also contain other covenants that restrict, among other things, our ability to:

incur additional indebtedness;

incur additional liens;

issue certain guarantees;

pay dividends or make certain other restricted payments;

consummate certain asset sales;

enter into certain transactions with affiliates; or

merge or consolidate with any other person or sell or otherwise dispose of all or substantially all of our assets.

In addition, the instruments governing a substantial portion of our long-term indebtedness contain cross-default or cross- acceleration clauses, such that the occurrence of an event of default under one of these instruments could trigger an event of default under other indebtedness or enable the creditors under certain other indebtedness to accelerate that indebtedness.

Off-Balance Sheet Arrangements

We do not currently have any transactions involving off-balance sheet arrangements that are reasonably likely to have a material effect on our financial condition, results of operations or liquidity.

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Contractual Commitments and Capital Expenditures

Contractual Commitments

The following table summarizes the maturity schedule of our significant contractual obligations and commitments as of March 31, 2012:

Payments Due by Period

Less than

1 Year 1 to 2 Years 2 to 3 Years 3 to 4 Years 4 to 5 Years More than

5 Years Total (in thousands of US$) Total(1).......... 110,842 27,411 29,974 28,681 13,380 112,068 322,356 Total(2).......... 116,328 27,189 29,752 27,792 12,269 88,720 302,049 ________________________ (1) Principal amount without interest. (2) Principal balance at present value in accordance with IFRS. Capital Expenditures

Our capital expenditures on property, plant and equipment were S/.44.4 million during the three months ended March 31, 2012, S/.186.5 million in 2011 and S/.193.9 million in 2010. Over the last three years, we have applied our capital expenditures mainly to

expand our production capacity, through repowering two of our mills in Peru;

plant sugarcane to stabilize our sugarcane crops;

modernize our agricultural equipment and processing facilities;

increase the mechanization of our harvesting and production process; and

improve safety and environmental controls and compliance.

We have budgeted total capital expenditures of approximately S/.1,910 million for 2012, 2013 and 2014. However, our actual capital expenditures for these years may exceed or fall short of these budgeted amounts. All of the budgeted capital expenditures are expected to be used primarily for developing the Olmos Expansion Plan, re-planting sugarcane, modernizing our agricultural equipment and processing facilities, increasing mechanization of our harvesting and production process, increasing the cogeneration capacity of our mills, investing in machinery needed to begin production of hydrous ethanol and improving our safety and environmental controls and compliance. As water availability is vital to ensure the stability of sugarcane yields, we also expect to use capital expenditures for water projects, including the construction of reservoirs and improving our access to water in the Chicama Valley.

The following table sets forth our principal capital expenditures for 2012 (including those already made), 2013 and 2014.

Year Total Budgeted Amount (in millions of S/.)

2012 653 (1) 2013 663 2014 594

______________________

(1) Includes S/.44.4 million of capital expenditures incurred during the three months ended March 31, 2012.

We plan to obtain financing for approximately 25% of our capital expenditures, directly or indirectly, with the proceeds from the notes and with additional bank loans. We intend to pay for the remaining 75% of our capital expenditures through internal cash generation.

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Quantitative and Qualitative Disclosures About Market Risk

We consider market risk to be the potential loss arising from adverse changes in market rates and prices. We are exposed to a number of market risks arising from our normal business activities. Such market risks principally involve the possibility that changes in commodity prices, interest rates or exchange rates will adversely affect the value of our inventory, financial assets and liabilities or future cash flows and earnings.

General Risk Management

We periodically review our exposure to market risks and determine at the senior management level how to manage and reduce the impact of these risks. We use derivative financial instruments solely for the purpose of managing market risks, primarily fluctuations in interest rates and foreign exchange rates. While these hedging instruments fluctuate in value, these fluctuations are generally offset by the value of the underlying hedged exposures. The counterparties to these contractual arrangements are primarily major financial institutions. As a result, we do not believe that we are subject to any material credit risk arising from these contracts, and accordingly, we do not anticipate any material credit-related losses. We do not enter into derivative or other hedging instruments for speculative purposes.

Commodities Risk

We are exposed to market risks arising from the activities inherent to our business, that is, operations in the commodities market with sugar and ethanol. For risk management purposes and to evaluate our overall level of commodity price exposure, we further reduce our exposure to commodity market risk by the sugar and ethanol produced from sugarcane that we purchase from growers, as we pay for the sugarcane costs based on sucrose equivalents. Unlike sugarcane harvested on our own land, the price of sugarcane supplied by growers is indexed to the market price of sugar and ethanol, which provides a partial natural hedge to our sugar price exposure. When we acquire sugarcane from growers, we take samples from the delivered sugarcane to measure its sugar content (or sucrose) and pay only for the sucrose that we acquire according to a formula established by the market in Peru and Argentina and by the government in Ecuador. Therefore, our net market risk would be approximately S/.68 million, which is the potential loss in fair value resulting from a hypothetical 10% decrease in prices.

Interest Rate Risk

We have fixed and floating rate indebtedness, so we are exposed to market risk as a result of changes in interest rates. As of March 31, 2012, approximately 7.24% of our loans and financings bear interest at floating rates such as the London Interbank Offered Rate (LIBOR) and the Buenos Aires Deposits of Large Amount Rate (BADLAR).

Foreign Currency Risk

A portion of our debt is denominated in U.S. dollars, so we are exposed to market risk related to exchange movements between the nuevo sol and the U.S. dollar. As of March 31, 2012, approximately 67.6%, or S/.544.3 million, of our debt was denominated in U.S. dollars and approximately 2.0%, or S/.16.5 million of our debt was denominated in Argentine Pesos.

The following tables show our swap instrument as of March 31, 2012:

As of March 31, 2012 Derivative Maturity Notional Receivable Notional Payable

Cross Currency Swap November 6, 2012 US$18,810 S/.58,725

We estimate our foreign currency exchange rate risk as the potential devaluation of the nuevo sol on our dollar

denominated debt. Based on the profile of our dollar denominated debt vis-à-vis our operations as of March 31, 2012, the results from a hypothetical 10% devaluation of the nuevo sol would result in a decrease of our profit before income tax by approximately S/.33.7 million.

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PERUVIAN SUGAR INDUSTRY

Introduction

Sugar is a staple consumer product that is produced in over 90 countries and supplies a highly-developed market that continues to grow largely due to population growth. Peru ranks among world’s highest crop yield countries for various products including sugarcane. Peru’s location near the equator and the resulting vertical solar radiation, which improves the quality of the soil, are essential to such high yields. Peru features 84 out of the 104 life zones known in the world in its 11 natural eco-regions. This broad variety of climates allows for a great variety of food crops, some being produced and exported all year.

Peru, the third largest country in South America, has 7.6 million hectares with immediate agricultural potential, but less than 3.6 million are used, according to the FAO. The country’s temperature is relatively constant and mild due to the Humboldt Current, which brings cold water from the Antarctic to most of Peru’s coast and thus moderates otherwise hot temperatures. The proximity of Peru to the equator gives the country a relatively even length of daylight and supply of sunshine throughout the year and guarantees the absence of frost. This spring-like climate allows crops such as sugarcane to be harvested 12 months out of the year, under the proper water-management techniques.

Sugarcane Yields (Mt/Ha)

Source: World Agricultural Outlook 2011, Food and Agricultural Policy Research Institute

Peru’s combination of business climate, low labor costs, and climatic conditions helped lay the foundation for

developing a competitive and successful sugar industry. Coazucar has taken advantage of these factors to grow and consolidate its existing business, and become the leading player in the Peruvian sugar industry.

Sugarcane and Sugar

Sugarcane is the primary raw material used in the production of sugar throughout the world. Sugarcane is a tall grass that grows best in tropical climates characterized by warm temperatures and high humidity. The climate and topography of the northwest and northern central regions of Peru are ideal for the cultivation of sugarcane, accounting for approximately 100% of the country’s sugarcane production.

Sugar is a essential commodity produced in various parts of the world. Sugar is primarily derived from sugarcane and sugar beet. Sugar has agricultural and industrial applications and its production is both labor and capital intensive.

126

92 91

80 7976 75

70 70 68

Peru Guatemala Egypt E.U. Brazil Colombia U.S. China World India

68

History of the Sugar Production in Peru

In the 1960s, Peru’s sugar industry was among the most efficient in the world. The military government in the 1970s negatively impacted the industry by expropriating the sugar estates on the country’s north coast, turning them into government-owned co-operatives. Having peaked at 1 million tons in 1975, output fell to 400,000 tons by the early 1990s.

Following the negative land reforms implemented by the military government in the 1970s, the Peruvian sugar industry has finally recovered. This ongoing process has resulted in the privatization of most mills and sugarcane cultivated land, increased investment and productivity. The following chart shows the evolution of Peruvian sugarcane production and sugar production between 1961 and 2011 according to FAO:

Historical Sugar Production (tons)

300

400

500

600

700

800

900

1,000

1,100

1,200

1961

1963

1965

1967

1969

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

Thousands

Source: FAO, Peruvian Ministry of Agriculture

Over the past decade production has returned to its historic peak. The change has been gradual. The

government has sold its ownership interest in the industry in tranches; land has been purchased by Peruvian and foreign investors, followed by the consolidation of property. The efficiency brought by economies of scale is improving return rates, which attracts more investment, generating a beneficial cycle. This process is finally undoing the damage to production levels done by the 1970s land reform that expropriated land to give to workers in socialist type cooperatives.

Production and Consumption

Peru’s sugar production has more than doubled since the early 1990s, from approximately 521 thousand tons in 1990 to approximately 1,076 thousand tons (of raw sugar equivalent) in the 2011 harvest. The consumption of sugar has also increased steadily to approximately 1,269 thousand tons during 2011 from 929 thousand tons during 2004. The Peruvian consumption of sugar is expected to continue to grow due to overall population growth, increasing purchasing power of consumers in the country and increasing consumption of processed foods as a result of widespread migration from rural to urban areas and the future growth in per capita income.

Peru is a net importer of sugar with imports around 190 thousand tons and exports around 56 thousand tons. Demand is expected to continue growing at a faster pace than supply due to the strong macroeconomic fundamentals of the country. The following chart illustrates the evolution of Peruvian production and imports of sugar (in thousands of tons) in the last 8 years.

69

Sugar Consumption (Thousand Tons)

748 695805

9111,007 1,065 1,038 1,079

181 252244

247 208 146 213 190

2004 2005 2006 2007 2008 2009 2010 2011

Production Imports

929 9471,050

1,158 1,215 1,211 1,251 1,269

Source: Peruvian Ministry of Agriculture Peruvian Ministry of Agriculture

Sugar can be categorized into two main product categories in the Peruvian market, raw sugar and white sugar.

Raw sugar represents approximately 90% of the total sugar consumption in the country:

Raw Sugar: Raw sugar is a tan to brown colored, coarsely grained solid obtained through the evaporation of clarified sugarcane or sugar beet juice. It is a partially purified sugar, characterized by sucrose crystals covered with a film of molasses. Raw sugar is processed from the sugarcane or the sugar beet at a sugar mill and usually further refined to produce white sugar for consumption. Raw sugar is traded in US$ per pound at the New York’s Intercontinental Exchange (ICE) under contract no. 11. The Sugar No. 11 (NY 11) contract is the world benchmark contract for raw sugar trading. The contract prices the physical delivery of raw cane sugar, free-on-board (FOB), the receiver’s vessel to a port within the country of origin of the sugar.

White sugar is a purified sugar, produced directly from either sugarcane or beet; the only difference in the final product produced is in its appearance. Due to the higher purity of the beet concentrate, white sugar from beet tends to be produced in slightly smaller and more uniform crystals than that from sugarcane; there is no difference in taste between the two. White sugar can also be produced indirectly from raw sugar under a refining process. Refined granulated sugar is traded in US$ per metric ton at London’s Euronext LIFFE, under contract no. 5 (Lon 5).

The following chart shows 2011 sugar production across the year in Peru.

2011 Sugar Production Distribution (%)

8%

7%

9%7% 7%

7%7%

9%8%

10% 10% 10%

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Source: Peruvian Ministry of Agriculture

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Pricing

Most sugar producing countries, including the United States and E.U. countries, protect their domestic sugar markets from foreign competition through policies, regulations and other measures, including import and export restrictions, quotas, duty taxes and subsidies. As a result of these regulatory measures, domestic sugar prices fluctuate from one country to another. The unregulated international prices of raw sugar follow the rates established by the NY 11 agreement. The Lon 5 rate is based on the price of crystal sugar traded on LIFFE.

In Peru, domestic sugar prices are established according to free market principles. Prices are established every morning in a negotiation between producers and wholesalers/distributors in Lima’s Wholesaler Market (known as “Santa Anita Market”), the most important wholesaler market in the country and pricing source of different agriculture products.

In Peru, domestic sugar prices generally follow international sugar prices trend, with a significant premium due to additional costs (transportation, nationalization, etc), benefiting local producers’ margins. The following chart shows the price evolution of raw sugar on the NY 11 and the Peruvian Market.

Sugar Price Evolution (US$/Ton)

200

400

600

800

Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12

NY 11 Peruvian Raw

Source: Peruvian Ministry of Agriculture

Major Sugar Companies in Peru

As a result of the privatization process of the sugar mills in Peru, the industry faced a consolidation process, reducing the number of sugar companies to eleven. We are not only the largest sugar producer in Peru, but also is the biggest company in terms of land ownership for sugar production.

Market Share (% Volume)

Casagrande23.9%

Cartavio14.4%

San Jacinto7.4%

Laredo12.3%

Paramonga11.2%

Tuman9.7%

Pucala9.1%

Pomalca7.9%

Other4.2%

Coazucar

45.7%

Casagrande23.9%

Cartavio14.4%

San Jacinto7.4%

Laredo12.3%

Paramonga11.2%

Tuman9.7%

Pucala9.1%

Pomalca7.9%

Other4.2%

Coazucar

45.7%

Land Ownership (Thousand Hectares)

51

14

10

8

8

8

Coazucar

Laredo

Tuman

Paramonga

Pucala

Pomalca

Source: Companies’ Filings and SMV. Coazucar land ownership includes land recently acquired in the Olmos Expansion Plan.

71

BUSINESS

Overview

We cultivate, harvest, purchase and crush sugarcane, the principal raw material used to produce sugar and ethanol. We conduct our sugar and ethanol operations through our five mills and eight distilleries, which are located throughout Peru, and in Ecuador and Argentina. We market and sell all of the sugar and ethanol we produce, both domestically and globally. In 2011, we cultivated sugarcane on 55,733 hectares. According to data provided by the Peruvian Ministry of Agriculture, we were the largest sugarcane crush processor in terms of sugarcane crushed, the largest producer of sugar and one of the two largest producers of ethanol in Peru in 2011. In addition, according to data provided by the Peruvian Ministry of Agriculture, we accounted for approximately 46% of the sugar produced in Peru in 2011. We believe, according to internal data, that we accounted for approximately 38% of the ethanol produced in Peru in 2011.

Our operations are conducted in Peru through Coazucar (approximately 1% of our EBITDA for the three months ended March 31, 2012 and 2% of our EBITDA for 2011) and our subsidiaries (i) Casa Grande (approximately 51% of our EBITDA for the three months ended March 31, 2012 and 52% of our EBITDA for 2011), (ii) Cartavio (approximately 17% of our EBITDA for the three months ended March 31, 2012 and 23% of our EBITDA for 2011), (iii) San Jacinto (approximately 16% of our EBITDA for the three months ended March 31, 2012 and 12% of our EBITDA for 2011) and (iv) Sintuco (approximately 2% of our EBITDA for the three months ended March 31, 2012 and 1% of our EBITDA for 2011); in Ecuador through our subsidiary La Troncal (approximately 13% of our EBITDA for the three months ended March 31, 2012 and 6% of our EBITDA for 2011); and in Argentina through our subsidiary San Isidro (approximately 0% of our EBITDA for the three months ended March 31, 2012 and 4% of our EBITDA for 2011).

Our mills have a combined installed sugarcane crushing capacity of approximately 8.4 million tons per year and benefit from high agricultural yields, proximity to a main port and consumer markets and a more efficient structure for sugarcane transportation, as compared to other mills. In addition, Peru’s dry, tropic climate allows us to harvest our sugarcane throughout the entire calendar year, giving us a competitive advantage over producers in other countries, which can only harvest once or twice a year. Most of our mills are also able to shift production between brown, white and refined sugar in order to capitalize on unexpected price variations among the different types of sugar.

The close proximity of our sugarcane fields and those of our suppliers to our milling facilities (average distance of approximately 15 kilometers) and our increasing mechanization levels (approximately 13% of the sugarcane we cultivated was harvested mechanically in 2011) positively impact our operating cost structure. Our Peruvian mills and distilleries are located in the La Libertad and Ancash regions, an average of approximately 59 kilometers from the nearest sea port, Salaverry, also located in the La Libertad region, through which we ship almost all of our Peruvian exports. The La Libertad and Ancash regions are approximately 610 kilometers and 407 kilometers respectively from Lima, our principal market.

For the three months ended March 31, 2012, we crushed 1.3 million tons of sugarcane, all of which was used to produce sugar and ethanol in Peru because the sugarcane harvest does not begin in Ecuador and Argentina until July and May, respectively. In the same period, we produced approximately 133 thousand tons of sugar and approximately 14.1 million liters of ethanol. For the three months ended March 31, 2012, we reported sales of products of S/.377.2 million (US$141.4 million) and EBITDA of S/.138.6 million (US$52.0 million). Our sales of sugar and ethanol for the three months ended March 31, 2012 were S/.340.1 million (US$127.5 million) and S/.30.9 million (US$11.6 million), respectively. During 2011, we crushed 6.7 million tons of sugarcane (4.7 million tons of which were crushed in Peru), all of which was used to produce sugar and ethanol. In 2011, we produced approximately 690 thousand tons of sugar (492 thousand tons of which were produced in Peru) and approximately 69.2 million liters of ethanol (47.9 million liters of which were produced in Peru). For 2011, we reported sales of products of S/.1,304.4 million (US$483.8 million) and EBITDA of S/.578.5 million (US$214.6 million). Our sales of sugar and ethanol during 2011 were S/.1,166.2 million (US$432.6 million) and S/.93.4 million (US$34.6 million), respectively.

As of March 31, 2012, we owned land with a total area of 89,752 hectares (approximately 224,380 acres), of which approximately 80,862 hectares (approximately 199,814 acres) is arable land. As of December 31, 2011, we

72

cultivate sugarcane on 55,733 hectares (approximately 137,719 acres). We also purchase sugarcane from third party suppliers, which represented approximately 28% of the total sugarcane that we crushed during 2011.

Key Financial and Operating Data

The following table sets forth certain of our financial information and operating data for the periods indicated.

As of and for the Three Months Ended March 31,

As of and for the Years Ended December 31,

2012 2012 2011 2011 2011 2010 (in thousands





Financial data: (unaudited) Sales of products ......................... 141,427 377,185 309,162 483,833 1,304,415 937,854 Profit for the period..................... 32,767 87,388 147,796 207,543 559,535 427,689 EBITDA(1)................................... 51,979 138,628 164,151 214,587 578,526 416,977 EBITDA margin(2)....................... 36.8% 36.8% 53.1% 44.4% 44.4% 44.5%Total debt(3) ................................. 302,049 805,566 302,946 816,744 533,619 Total debt / EBITDA(4)................ 1.46x 1.46x 1.41x 1.41x 1.28xNet debt(5).................................... 230,133 613,766 260,558 702,467 462,637 Net debt / EBITDA(6) .................. 1.11x 1.11x 1.21x 1.21x 1.11x As of and for the Three Months


Ended December 31, 2012 2011 2011 2010 2009 Operating data: Sugarcane crushed (tons)

Casa Grande .......................... 648,161 664,952 2,331,436 2,365,120 2,197,378 Cartavio ................................. 449,681 455,021 1,688,790 1,696,196 1,690,490 San Jacinto............................. 207,568 171,499 696,063 605,809 546,774 San Isidro............................... —(7) —(7) 488,752 547,106 515,821 La Troncal ............................. —(7) —(7) 1,500,886 1,629,216 1,295,569 Total ...................................... 1,305,409 1,291,472 6,705,927 6,843,447 6,246,032

Sugar production (tons)............... 133,429 135,866 689,651 470,599 451,866 Ethanol production (million

liters) ........................................

14.1

13.1

69.2

67.2

59.7 Employees .................................. 13,526 9,706 12,089 8,646 9,471 _______________________________ (1) EBITDA is calculated using profit from operations for the period before financing and taxation without initial recognition and change in fair

value of biological asset, added to depreciation and amortization. See “Presentation of Financial and Other Information.” (2) EBITDA margin is EBITDA divided by sales of products, expressed as a percentage. (3) Total debt is the sum of total short- and long-term loans. (4) Total debt/EBITDA is the ratio of our total debt as of the end of the applicable period divided by our EBITDA for the then most recently


concluded period of four consecutive fiscal quarters, including the four consecutive fiscal quarters ended March 31, 2012. (7) Sugarcane harvest begins in Ecuador and Argentina in July and May, respectively, due to climate conditions in these countries that do not


73

The following tables set forth certain of the financial information and operating data of the Guarantors for the periods indicated. For the Three Months

Ended March 31, 2012 (in thousands of S/., except as indicated)

Casa Grande

% of Coazucar Cartavio

% of Coazucar

San Jacinto

% of Coazucar

Others(1)

% of Coazucar

Total

Financial data: Sales of products ........................................... 153,270 40.6% 95,749 25.4% 48,430 12.8% 79,736 21.1% 377,185Profit for the period....................................... 75,848 86.8% 10,508 12.0% (6,764) (7.7)% 7,796 8.9% 87,388EBITDA(2) ..................................................... 71,134 51.3% 23,814 17.2% 22,181 16.0% 21,499 15.5% 138,628EBITDA margin(3) ........................................ 46.4% 24.9% 45.8% 27.0% 36.8%Total debt(4) ................................................... 106,801 13.3% 54,040 6.7% 103,481 12.8% 541,244 67.2% 805,566Total debt / EBITDA(5) ................................. 0.39x 0.45x 1.42x 6.25x 1.46xNet debt(6) ...................................................... 70,127 11.4% 32,394 5.3% 102,865 16.8% 408,380 66.5% 613,766Net debt / EBITDA(7) .................................... 0.26x 0.27x 1.42x 4.72x 1.11xOperating data: Total area for sugarcane production


21,115

37.9%

6,891

12.4%

6,081

10.9%

21,646

38.8%

55,733Sugarcane crushed (tons) .............................. 648,161 49.7% 449,681 34.4% 207,568 15.9% —(8) —(8) 1,305,410Daily ethanol production capacity (liters) .... 60,000 13.6% 80,000 18.2% 40,000 9.1% 260,000 59.1% 440,000Total ethanol production (million liters)....... 4.0 28.2% 3.7 26.4% 0.6 4.1% 5.8 41.3% 14.1_______________________________




concluded period of four consecutive fiscal quarters, including the four consecutive fiscal quarters ended March 31, 2012. (6) Net debt is obtained netting total debt with cash and cash equivalents. (7) Net debt/EBITDA is the ratio of our net debt as of March 31, 2012 divided by our EBITDA for the then most recently concluded period of

four consecutive fiscal quarters ended March 31, 2012. (8) Sugarcane harvest begins in Ecuador and Argentina in July and May, respectively, due to climate conditions in these countries that do not


For the Year Ended December 31, 2011

(in thousands of S/., except as indicated) Casa

Grande % of

Coazucar Cartavio % of

CoazucarSan

Jacinto % of

Coazucar

Others(1) % of

Coazucar

Total Financial data: Sales of products ........................................... 583,390 44.7% 401,718 30.8% 164,855 12.6% 154,452 11.8% 1,304,415Profit for the year .......................................... 310,859 55.6% 113,742 20.3% 99,990 17.9% 34,944 6.2% 559,535EBITDA(2) ..................................................... 303,581 52.5% 134,659 23.3% 71,922 12.4% 68,364 11.8% 578,526EBITDA margin(3) ........................................ 52.0% 33.5% 43.6% 44.3% 44.4%Total debt(4) ................................................... 119,141 14.6% 56,211 6.9% 105,406 12.9% 535,986 65.6% 816,744Total debt / EBITDA(5) ................................. 0.39x 0.42x 1.47x 7.84x 1.41xNet debt(6) ...................................................... 110,467 15.7% 47,889 6.8% 103,410 14.7% 440,701 62.7% 702,467Net debt / EBITDA(7) .................................... 0.36x 0.36x 1.44x 6.45x 1.21xOperating data: Total area for sugarcane production


21,115

37.9%

6,891 12.4%

6,081

10.9%

21,646

38.8%

55,733Sugarcane crushed (tons) .............................. 2,331,436 34.8% 1,688,790 25.2% 696,063 10.4% 1,989,638 29.7% 6,705,927Daily ethanol production capacity (liters) .... 60,000 13.6% 80,000 18.2% 40,000 9.1% 260,000 59.1% 440,000Total ethanol production (million liters)....... 12.7 18.3% 15.8 22.9% 2.4 3.5% 38.2 55.3% 69.2_______________________________




concluded year. (6) Net debt is obtained netting total debt with cash and cash equivalents. (7) Net debt/EBITDA is the ratio of our net debt as of December 31, 2011 divided by our EBITDA for the then most recently concluded period of

fiscal year ended December 31, 2011.

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Our Main Products

We market and sell all the sugar and ethanol produced by our mills and distilleries, both domestically and globally. We also produce other sugarcane by-products including molasses and bagasse. Ethanol is produced from molasses, the principal remaining by-product of processing sugarcane into sugar. Bagasse is used as a raw material to generate the vapor that is used to produce sugar and it is also used to cogenerate electricity.

Sugar

We are able to produce several types of sugar such as refined white, refined, brown and organic sugar. While brown sugar has constituted the majority of our sugar sales during the last six years, most of our mills have industrial flexibility to produce brown, white and refined sugar. We produced approximately 690 thousand tons of sugar during 2011 (consisting 60% of brown sugar, 29% of white sugar, 8% of refined sugar and 3% of organic sugar) and recorded sales of products from sugar of S/.1,166.2 million, or 89.4%, of our sales of products in 2011. For 2011, we exported approximately 11.7% of our total sugar sales to customers located primarily in North America and Europe. In Peru, we sell our sugar products to retailers, wholesale distributors and food and beverage manufacturers. In Argentina, we produce mostly organic sugar, which we export mainly to Europe, where demand for this specialty product is highest.

Ethanol

We produce and sell ethanol both domestically and globally. In 2011, we produced approximately 69.2 million liters of ethanol in our eight distilleries and recorded sales of products from ethanol of S/.93.4 million, or 7.2%, of our sales of products. In 2011, we sold 20.2% of our ethanol mainly to alcohol producers in Peru and exported 79.8% to customers located in the U.S. and Europe.

Sugarcane by-products

We also produce molasses and bagasse. Molasses is a by-product of processing sugarcane into sugar and is used as a raw material to produce ethanol. Sugarcane bagasse is a by-product of processing both sugar and ethanol and is a renewable energy source. We generate electricity at all of our mills through the burning of sugarcane bagasse in boilers, which enables those mills to be self-sufficient in terms of their energy needs. In addition, we sell excess bagasse produced at our Casa Grande, Cartavio and San Jacinto mills to Trupal S.A., an affiliate of Grupo Gloria engaged in the production of paper and cardboard.

Peru’s Competitive Advantages in the Production of Sugarcane

According to FAPRI, Peru had one of the highest crop yields in the world for sugarcane in 2011. Peru is located near the equator and the resulting vertical solar radiation it receives allow for such high sugarcane crop yields. Moreover, the vast territory, mild climate and stable water supply found in Peru, make it possible to harvest sugarcane all year long, thus further increasing productivity.

According to the Peruvian Ministry of Agriculture, approximately 8% of Peru’s coastal agricultural land, or 127,809 million hectares, is currently used for sugarcane production, and we believe that Peru should be able to increase its sugarcane production capacity significantly depending on market conditions and the suitability of available land for sugarcane cultivation. Peru’s favorable growing conditions also permit sugarcane to be harvested seven times before requiring re-planting, compared to (i) India, where, on average, sugarcane must be re-planted every two harvests and (ii) the United States and other countries that harvest sugar beet, which has one annual crop and must be re-planted every year, as well as requiring crop rotations that range between three and five years.

We believe that Peruvian producers of sugar, including us, enjoy competitive advantages over sugar producers in other countries due to the following factors:

Low-cost producer. The cost of producing sugar from sugarcane in Peru is low due to its extremely favorable climate and soil. Peru experiences dry weather with little climate differentiation among the seasons due to its proximity to the equator and due to the effects of the Humboldt sea current. Peru also benefits from technological improvements developed in the production of sugar. These technological improvements have

75

resulted in longer harvesting cycles, higher sugarcane yield per hectare and increased sucrose content from crushed sugarcane, which has improved sugar output. According to the Czarnikow Group, sugar production costs in Peru are significantly lower than production costs in Brazil, a leading producer of sugar. For example, during 2011, average production costs per pound of brown sugar in Brazil was approximately US$0.20, or 53.8% higher than the US$0.13 per pound cost of brown sugar produced from our own sugarcane.

Strong domestic and global sugar demand. Peru consumed approximately 1.2 million tons of sugar during 2011. Sugar consumption in Peru has continued to grow, principally as a result of higher consumption of beverages and processed food products made with sugar, as well as a result of higher consumer disposable income. Worldwide sugar consumption has more than doubled since the early 1980s, to approximately 165 million tons in 2010 from approximately 70 million tons in 1971, in each case, measured based on raw sugar equivalent. OECD-FAO estimates the worldwide sugar consumption to increase to 207 million tons by 2020. We expect future growth opportunities to come from a gradual liberalization of trade barriers in markets outside Peru, mainly in developed OECD countries; and we expect increased sugar consumption due to (1) population growth concentrated in markets open to the international sugar trade, (2) increased purchasing power in many countries and (3) higher consumption of processed foods and drinks.

Increased opportunities to export sugar. The global sugar market has grown significantly in recent years. However, sugar producing countries still give priority to supplying their domestic markets. Therefore, the international trade market for sugar should have ample room for growth. Consumption growth of sugar is not always accompanied by increased local production in many countries. This creates medium-term opportunities for Peruvian sugar export growth. Furthermore, given Peru’s location in the western hemisphere and proximity to the equator, Peruvian producers of sugar, such as us, are able to export the majority of their products in a different export window than those of competitors outside of Peru. This also creates opportunities for Peruvian sugar export growth.

Our Strengths

Undisputed leadership in Peru. We enjoy leading market positions in Peru, a country with one of the highest sugarcane yields in the world in 2011 and we have one of the highest sugarcane yields in Peru. We are the largest grower and processor of sugarcane in Peru, whose climate allows us to harvest sugarcane year-round. According to the Peruvian Ministry of Agriculture, we are the largest sugarcane grower in Peru, with 55,733 hectares cultivated in 2011, compared to 10,350 hectares cultivated by our largest competitor. For 2011, the combined crushing capacity of our three Peruvian mills is over six million tons per year, compared to a crushing capacity 1.2 million tons for our largest competitor. We produced approximately 492 thousand tons of sugar in Peru and are also the largest seller of sugar in Peru, with a market share of approximately 46% through our brands Casa Grande, Cartavio and San Jacinto. We are one of the two largest producers of ethanol in Peru, having produced 47.9 million liters of ethanol in 2011, and the largest exporter in Peru, having exported 42.2 million liters of ethanol in 2011.

Low-cost producer and strategically located assets throughout Peru. Our mills and distilleries and the land on which we cultivate and harvest sugarcane are strategically located throughout Peru and benefit from favorable climate and stable water supply. Peru is one of the world’s most productive countries in terms of high crop yields for sugarcane, primarily as a result of:

its favorable climate;

a combination of climate and soil resulting in increased production of sugar per hectare of planted sugarcane;

extensive agricultural properties and operations, with large-scale production;

availability of land for sugarcane production; and

extensive logistical infrastructure, allowing for efficient product distribution.

Our existing mills, distilleries and other production facilities are located in close proximity to our customers, sugarcane fields owned by us and by other growers, port terminals and other transportation infrastructure and

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warehouses. For example, our production facilities, Casa Grande, Cartavio and San Jacinto, are located throughout Peru, approximately 63, 54 and 170 kilometers, respectively, from the port of Salaverry, in the La Libertad Region, from which we export sugar and ethanol. Our production facilities are also located close to major roads and our warehouses, thus decreasing delivery time, increasing operating efficiencies, reducing logistics costs and facilitating responses to shifts in demand.

During 2011, 65% of our total sugarcane crushed was harvested from our own fields, with lower costs than the sugarcane supplied by third-party growers. Our expansive owned lands and those of our suppliers are also strategically located within an average of approximately 15 kilometers from our mills and distilleries. This close proximity, coupled with our increasing level of mechanization, reduces our transportation costs.

We are also energy self-sufficient and can generate enough energy to support our milling and distilling operations. We believe our low costs, the increasing mechanization of our agricultural processes, improvements in industrial operations and other factors enable us to manage our operating costs efficiently.

Increasingly mechanized agro-industrial complex. We seek to implement technological innovations in our planting, harvesting and production processes, which has greatly improved our productivity and reduced our operating costs in recent years by, among others, reducing the number of workplace accidents and the number of employees assigned to harvesting. For 2011, our level of mechanized harvesting contributed to reduce our costs associated to our sugarcane harvest and loading operations. During 2011, we harvested approximately 13% of the sugarcane we produced in Peru using mechanized harvesters, which we operate 24 hours per day, seven days per week throughout the harvesting season. We have developed and implemented numerous technological improvements for our mechanized harvesting equipment, such as automatic pilots and use of high precision GPS for soil preparation (including application of fertilizers and pesticides) and harvesting, which has significantly improved our productivity levels, and are also in the process of developing and testing mechanized planting.

Diversified sugarcane varieties. We currently cultivate 19 types of sugarcane, with no single variety representing more than 40% of our total cultivated area. Six of the types of sugarcane we cultivate have been developed to maximize productivity considering the soil and climate conditions in Peru and to be more resistant to pests and disease. Our use of a wide variety of sugarcane plants coupled with our practice of replanting approximately 11% of our sugarcane crop annually, has resulted in historical low infestation and disease rates of our crops and mitigates our exposure to the risk of loss of our crops from pests and disease.

Long operating history and experienced management team. Many of our mills and distilleries have been in operation for over 100 years, including Casa Grande (1860), Cartavio (1782), San Jacinto (1868) and San Isidro (1760). As a result, we benefit from significant operating experience in both the sugar and ethanol industries. We have successfully acquired companies and facilities and expanded our sugar and ethanol operations throughout Peru, and more recently in Ecuador and Argentina. We believe this demonstrates our ability to grow our operations and succeed in the industries in which we operate, reducing our fixed average costs. Our team of seven senior executives has an average of 15 years experience and knowledge in the sugar and ethanol industries and in production and operations. Our management team and our other professionals are highly trained, and we have a results- oriented corporate culture that is focused on reducing operating costs and increasing revenue. We utilize human resource management tools that focus on the integration and motivation of our management team and other professionals to help to maximize their effectiveness.

Efficient use of water. Water is vital to the production of sugarcane, and our investments in water storage and distribution systems allow us to increase our water efficiency and improve our sugarcane production. We are planning to increase the area under cultivation by introducing new pressurized watering systems that will allow us to reduce our usage of water per hectare compared to traditional watering systems. The pressurized water system also decreases the time needed for sugarcane to achieve maturity, allowing us to harvest sugarcane earlier. In addition, our investments in water storage will allow us to manage our supply of water. By building reservoirs to obtain water from the Chicama River when its levels are the highest, we are able to store that water in reservoirs both for future use on existing cultivated lands and to use the reservoirs as water sources to expand cultivation.

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Our Strategy

We intend to focus on achieving sustainable and profitable growth, further reducing our operating costs and building on our competitive strengths to maintain our market share in Peru and in the other countries in which we operate.

Expand our sugarcane and industrial facilities, increasing utilization of our existing capacity. We currently use approximately 80% of our overall crushing capacity. We have a combined sugarcane crushing capacity of approximately 8.4 million tons per year, and in 2011 we crushed approximately 6.7 million tons of sugarcane. We will seek to increase our sugarcane production and achieve the full utilization of our existing crushing capacity, therefore increasing the productivity of those crops, resulting in more sugarcane volume and expansion of the harvested area close to our mills and distilleries through new plantations. Through more efficient water use, we intend to significantly increase our harvested area over the next five years from approximately 55,733 hectares in 2011. We expect to significantly increase our harvested area mainly through the Olmos Expansion Plan (as defined below), which will add approximately 14,500 hectares to our sugarcane operations, in addition to increasing our harvested area on our existing lands by approximately 12,100 hectares in Peru, approximately 2,276 hectares in Ecuador and approximately 3,200 hectares in Argentina. The potential areas that we have identified for such expansion are within the 50 kilometer radius area where most of our producing land is currently located. Expanding our harvested area and renewing our current harvesting areas will allow us to fully utilize the processing capacity of our mills and distilleries.

Continue to reduce our operating costs and seek to increase our operating efficiencies. We intend to continue to focus on our low-cost operations improving the efficiency of our operations through additional investments in technology, including agricultural and industrial processes, and information technology. As part of this effort, we intend to continue to (1) increase the level of mechanization of our harvesting, (2) test and implement mechanized planting in our land, (3) take advantage of the competitive advantage of climate and soil conditions in Peru, by expanding our sugarcane production to levels that would allow us to fully utilize our existing crushing capacity, (4) invest in the modernization of our equipments and industrial facilities, (5) invest in improving the productivity of our crop and the efficiency of our industrial process and (6) invest in water storage and distribution systems to increase our water efficiency and improve our sugarcane production.

Expand our land portfolio. We plan to further expand our land portfolio. Through a public auction in December 2011, Azucarera Olmos and our affiliate, Gloria S.A., won the rights to purchase 15,600 hectares (11,100 hectares by Azucarera Olmos and 4,500 hectares by Gloria S.A.) of land from Odebrecht, S.A. in Olmos, Lambayeque, Peru (approximately 854 kilometers north of Lima) of the Olmos Expansion Plan, from which sugarcane greenfield crops will be developed using pressurized water and green harvesting for the production of sugar. According to the auction criterion, water will be available as of March 2014, when construction of the project will be finalized. See “Summary—Recent Developments.”

Participate in the consolidation of the sugar and ethanol sectors. The sugar and ethanol sectors have been consolidating in recent years in Latin America. In addition to acquisitions in Peru, we recently acquired sugar and ethanol companies in Argentina and Ecuador. We closely monitor domestic and foreign acquisition and investment opportunities in these sectors and are currently considering, and will continue to consider in the future, selective acquisitions, partnerships and investment opportunities that offer the right strategic fit for our operations. We may enter into acquisitions or partnerships or make certain investments that could be material to our results of operations.

Focus on environmental and social awareness. We are committed to acting as an environmentally and socially conscious company. Cartavio, San Jacinto and Casa Grande have signed a PAMA with the Peruvian government regulating mechanical harvesting, burning of sugarcane, and carbon dioxide emissions, formalizing our commitment to reducing environmental impacts. Casa Grande’s PAMA has been approved by the Peruvian government through the Ministry of Agriculture, and San Jacinto’s and Cartavio’s are in the process of obtaining the approval for their respective PAMAs from the Peruvian government. We continue to invest in the mechanization of our harvests, which is not only cost-efficient, but also reduces our emission levels and decreases the burning of sugarcane fields for manual harvesting, and to improve and develop new training programs for our employees, as well as for the communities where we operate in.

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Operations

Sugarcane is the main raw material used in the production of sugar and ethanol. Sugarcane is a tropical grass that grows best in locations with stable warm temperatures and humidity. The climate and topography of Peru is ideal for the cultivation of sugarcane.

During 2011, we cultivated sugarcane in an area equal to 55,733 hectares (137,719 acres), of which we own 52,382 hectares (or approximately 94.0%), distributed as follows:

Casa Grande

Cartavio

San Jacinto Sintuco

Chiquitoy(1)

San Isidro

La Troncal Total

(in hectares) Owned land....................... 21,115 6,891 6,081 1,271 — 3,300 13,724 52,382Related company land....... — — — — 3,351 — — 3,351Total.................................. 21,115 6,891 6,081 1,271 3,351 3,300 13,724 55,733_______________________ (1) We do not include Chiquitoy in our calculations of sugarcane crushed because it is not a consolidated subsidiary.

During 2011, we produced 690 thousand tons of sugar, distributed per our five mills as follows:

Casa Grande Cartavio San Jacinto San Isidro La Troncal Total (in tons) Sugar................................. 257,276 154,507 80,112 47,288 150,468 689,651

During 2011, we produced 69.2 million liters of ethanol, distributed per our distilleries as follows:

Casa Grande Cartavio San Jacinto San Isidro La Troncal Coazucar(1) Total (in liters) Ethanol.............................. 12,670,020 15,844,568 2,447,929 7,583,143 13,746,460 16,917,467 69,209,587 _______________________ (1) Comprised of three distilleries.

We also purchase sugarcane directly from independent sugarcane growers, some under agreements with an

approximate five-year term. We transport the sugarcane purchased from third-party suppliers to our mills. The price that we pay our suppliers is based on the total amount of sugar content, in the delivered sugarcane. On delivery of the purchased sugarcane to our mills, we test the sugarcane to determine its sucrose content, which is used to determine the price of the sugarcane. After the price for the sugarcane is determined, we pay 100% of the total amount due on delivery of the sugarcane. Prices are based on the monthly price indicators published by the Peruvian Ministry of Agriculture.

During 2011, we harvested approximately 65%, or 4.3 million tons, of sugarcane that we crushed from our own land, and we purchased approximately 35%, or 2.4 million tons, of the total amount of sugarcane that we crushed from third-party growers.

The following table compares the total amount of sugarcane grown on land we owned with the amount we purchased from third parties during the relevant period.

Sugarcane Processed For the Years Ended December 31,

For the Three Months Ended

March 31, 2012(1) 2011 2010 2009 (in thousands of tons) Sugarcane harvested from owned land .............. 967,603 4,352,710 3,309,632 3,133,046 Sugarcane purchased from third parties............. 337,807 2,353,217 1,357,493 1,301,596 Total................................................................... 1,305,409 6,705,927 4,667,125 4,434,642 _______________________ (1) Includes only sugarcane harvested in Peru, as the sugarcane harvest begins in Ecuador and Argentina in July and May, respectively, due to

climate conditions in these countries that do not permit sugarcane harvesting year-round.

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Sugarcane Harvest Cycle

The annual sugarcane harvesting cycle in Peru occurs during the entire year because of Peru’s stable, warm and humid climate. Sugarcane is ready for harvest when the crop’s sucrose content is at its greatest level. In Peru, the highest sucrose levels are reached every 16 months on average, and in Ecuador and Argentina, the highest levels are reached once a year starting in July and May, respectively.

We have developed and implemented numerous technological improvements for our mechanized planting and harvesting equipment. Mechanized harvesting does not require burning prior to harvesting, significantly reducing potential environmental damage and labor accidents, compared to manual harvesting. In addition, the leaves that remain after sugarcane has been harvested mechanically form a protective cover over the crop, reducing evaporation and aiding in pest and disease control. This protective cover of leaves decomposes into organic material over time, which acts to increase the fertility of the soil. Mechanical harvesting is time efficient and has lower overall production costs, when compared to manual harvesting. During 2011, we harvested mechanically approximately 13%, 25% and 100% of the sugarcane that we cultivated in Peru, Ecuador and Argentina, respectively. Under PAMAs signed with the Peruvian government in 2011, we are allowed 33 years to achieve full mechanical harvest. See “Risk Factors—Risks Related to Our Business and the Sugar and Ethanol Industries—We are subject to extensive environmental and labor regulations and may be exposed to liabilities and potential costs for environmental and labor compliance.”

The following table compares the percentage of sugarcane mechanically harvested over the last two years, including sugarcane cultivated by us on our owned land and sugarcane we purchased from third-parties.

Mechanically 2011 2010 Casa Grande........................................ 14.58% 5.43% Cartavio .............................................. 4.17% 0.01% San Jacinto.......................................... 2.94% — La Troncal........................................... 26.00% N/A San Isidro............................................ 100.00% N/A

Sugarcane yield is an important productivity measure for our harvesting operations. Geographical factors, such as soil composition, topography and climate, as well as some agricultural techniques that we implement and the sugarcane varieties we plant, directly affect our high sugarcane yield. During 2011, our Peruvian mills averaged 158 tons of sugarcane per hectare, while the average sugarcane yield in Peru was 126 tons per hectare.

The following table shows our agricultural productivity measured in tons of sugarcane per hectare and sucrose content during the last three years in Peru.

2011 2010 2009 Tons of sugarcane per hectare............. 158 164 160 Sucrose content................................... 13.0% 12.9% 12.8%

After the sugarcane is harvested, it is loaded onto trucks we own and transported to one of our five mills for

weighing, analysis and processing.

In the current harvest, the average distance from the fields on which our sugarcane is harvested in Peru to our mills and distilleries in Peru is approximately 15 kilometers (9.3 miles). The proximity of our milling facilities to the land on which we cultivate sugarcane reduces our transportation costs, thereby enabling us to maximize sucrose recovery, as the sucrose content of cut sugarcane decreases over time.

In Argentina, we mechanically harvest all of our sugarcane. The average distance from the fields on which our sugarcane is harvested to our San Isidro facility is 12 kilometers (7.5 miles).

In Ecuador, the average distance from the fields on which our sugarcane is harvested to our La Troncal facility is 35 kilometers (21.7 miles).

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Our Mills and Distilleries

We conduct our sugar operations through our five mills: (i) Cartavio and Casa Grande, which are located in the La Libertad Region of Peru, 610 kilometers north of Lima; (ii) San Jacinto, which is located in the Ancash Region of Peru, 407 kilometers north of Lima; (iii) San Isidro, which is located in the Province of Salta in Argentina; and (iv) La Troncal, which is located in the Province of Guayas in Ecuador. We conduct our ethanol operations through our eight distilleries: Casa Grande, Cartavio, San Jacinto, La Troncal, San Isidro and Coazucar’s three distilleries located in La Libertad.

The following map sets forth the location of our mills and distilleries.

We have a total sugarcane crushing capacity of approximately 8.4 million tons of sugarcane per year (3.0 million tons at Casa Grande, 2.1 million tons at Cartavio, 1.0 million tons at San Jacinto, 0.6 million tons at San Isidro and 1.8 million tons at La Troncal). We seek to minimize the excess crushing capacity of our mills and compete with other sugarcane producers in acquiring land to cultivate sugarcane and in acquiring sugarcane produced by third-party growers and by expanding our areas under cultivation on our existing lands.

La Libertad Cartavio

Casa Grande

Ancash San Jacinto

Guayas La Troncal

Salta San Isidro

Lima

Buenos Aires

Quito

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Our production facilities are able to produce both sugar and ethanol. During the three months ended March 31, 2012, we produced a total of approximately 133 thousand tons of sugar and 14.1 million liters of ethanol. During 2011, we produced a total of approximately 690 thousand tons of sugar and 69.2 million liters of ethanol. While all of our mills except for Casa Grande are currently able to shift production between brown, white and refined sugar in order to capitalize on unexpected price variations among the different types of sugar, we expect that all mills will soon have industrial flexibility as a result of capital expenditures we plan on making at Casa Grande during 2012. The following table sets forth the quantity of sugar that we produce at each of our five mills, the production capacity of each of our mills and our production volumes for the periods indicated.

For the Years Ended December 31,

Mill Operational data (in tons, except days)

Daily Average Crushing Capacity

For the Three Months Ended March 31, 2012 2011 2010 2009

Sugarcane crushed 10,000 648,161 2,331,436 2,365,120 2,197,378 Products

Sugar 71,151 257,276 247,526 233,446 Casa Grande (Peru)

Number of days in harvest 83 312 322 320 Sugarcane crushed 7,000 449,681 1,688,790 1,696,196 1,690,490 Products

Sugar 39,319 154,507 155,145 159,286 Cartavio (Peru)

Number of days in harvest 76 287 298 287 Sugarcane crushed 3,200 207,568 696,063 605,809 546,774 Products

Sugar 22,959 80,112 67,928 59,134 San Jacinto (Peru)

Number of days in harvest 84 286 279 247 Sugarcane crushed 3,800 —(1) 488,752 547,106 515,821 Products

Sugar —(1) 47,288 48,614 43,467 San Isidro (Argentina)

Number of days in harvest —(1) 151 137 137 Sugarcane crushed 11,000 —(1) 1,500,886 1,629,216 1,295,569 Products

Sugar —(1) 150,468 159,778 135,445 La Troncal (Ecuador)

Number of days in harvest —(1) 145 152 137 _______________________ (1) Sugarcane harvest begins in Ecuador and Argentina in July and May, respectively, due to climate conditions in these countries that do not

permit sugarcane harvesting year-round. The following table sets forth the types of ethanol products that we produce at each of our eight distilleries, the

production capacity of ethanol of each of our distilleries and our production volumes for the periods indicated.

For the Years Ended December 31,

Distillery

Daily Average Production Capacity

For the Three Months Ended March 31, 2012 2011 2010 2009

Coazucar(1) (Peru) 120,000 5,821,273 16,917,467 15,743,020 8,747,579 Casa Grande (Peru) 60,000 3,966,712 12,670,020 13,451,469 14,753,220 Cartavio (Peru) 80,000 3,720,944 15,844,568 16,687,865 17,072,020 San Jacinto (Peru) 40,000 577,087 2,447,929 1,523,939 2,106,363 San Isidro (Argentina) 50,000 —(2) 7,583,143 6,593,775 6,380,808 La Troncal (Ecuador) 90,000 —(2) 13,746,460 11,957,735 10,637,700 _______________________ (1) Composed of three distilleries. (2) Sugarcane harvest begins in Ecuador and Argentina in July and May, respectively, due to climate conditions in these countries that do not


The ratio of our effective production time to effective availability of our production facilities during 2011 was 80%. Our Peruvian mills, Casa Grande, Cartavio and San Jacinto, currently have spare crushing capacity and are located close to each other (25 kilometers between Cartavio and Casa Grande and 250 kilometers between Cartavio/Casa Grande and San Jacinto), providing us with the ability to transport sugarcane to another mill for crushing should one mill require mechanical repairs.

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The following table sets forth the storage capacity of each of our five mills as of March 31, 2012.

Casa Grande Cartavio San Jacinto San Isidro La Troncal Sugar

Bags 250,000 120,000 60,000 578,000 1,270,000

The following table sets forth the storage capacity of each of our eight distilleries as of March 31, 2012.

Casa Grande Cartavio San Jacinto San Isidro La Troncal Coazucar(1) Ethanol (in liters)

Tank 1 250,000 500,000 200,000 1,048,497 5,000,000 750,000 Tank 2 250,000 500,000 14,000 1,076,025 1,000,000 750,000 Tank 3 50,000 60,000 — 1,520,440 1,000,000 1,500,000 Tank 4 45,000 — — 1,613,103 500,000 1,500,000 Tank 5 45,000 — — 1,142,672 — 3,000,000 Tank 6 50,000 — — 69,283 — — Tank 7 — — — 421,462 — —

Total 690,000 1,060,000 214,000 6,891,482 7,500,000 7,500,000 _______________________ (1) Composed of three distilleries.

The following table sets forth the polarization of each of our five mills as of March 31, 2012.

Casa Grande Cartavio San Jacinto San Isidro La Troncal Sugar

Brown 97.0 98.5 98.5 — 98.5 White — 99.0 99.0 — 99.0

Refined 99.2 99.2 — — — Organic — — — 98.5 —

Our Main Products

The following table sets forth a breakdown of our sales volume and sales of products by type and market for each the three most recent years ended.

Years ended December 31, 2011 2010 Volume Sold(1) Sales of Products Volume Sold(1) Sales of Products (millions of S/.) (%) (millions of S/.) (%) Domestic sales Sugar................................................... 503,273 1,029.6 78.9% 407,351 732.2 78.1% Ethanol................................................ 10,082,806 18.9 1.4% 6,943,716 9.2 1.0% Molasses ............................................. 33.0 2.5% 18.7 2.0% Others ................................................. 11.8 0.9% 12.2 1.3% Total domestic sales of products........ 1,093.3 83.8% 772.3 82.3% Export sales Sugar................................................... 55,450 136.6 10.5% 54,298 97.9 10.4% Ethanol................................................ 42,515,985 74.5 5.7% 41,797,932 67.6 7.2% Total export sales of products ............ 211.2 16.2% 165.6 17.7% Total sales of products ..................... 1,304.4 100.0% 937.9 100.0% _______________________ (1) Sugar volumes are measured in tons and ethanol volumes are measured in liters.

Sugar

We produce several types of granulated sugar such as white, refined, brown and organic sugar. Brown sugar has been the most significant contributor to our sales of products during the last six years, representing approximately 60% of our sugar produced and 56.6% of our sales of product in 2011. We produced approximately 690 thousand tons of sugar during 2011 and recorded sales of products from sugar of S/.1,166.2 million, or 89.4%, of our sales of products in 2011.

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Ethanol

We produce and sell two types of ethanol: ethanol 1, a mixture of 96% ethanol and 4% water, and ethanol 2, a mixture of 94% ethanol and 6% water. The majority of the ethanol we produce is exported for industrial use. In 2011, we produced 69.2 million liters of ethanol and recorded sales of products from ethanol of S/.93.4 million, or 7.2%, of our sales of products.

Sugar

Sales and Distribution

During the three months ended March 31, 2012, we sold domestically approximately 163.3 thousand tons of sugar or 94.7% of the total quantity of sugar we sold, and exported approximately 9.2 thousand tons of sugar. During 2011, we sold domestically approximately 503.3 thousand tons of sugar, or 90.1% of the total quantity of sugar we sold, and exported approximately 55.5 thousand tons of sugar.

In most domestic sales, the end-customer is responsible for arranging for shipment of the sugar products from our mills. Payment is due in cash for wholesale customers on delivery, which represents 97.0% of our customer base, and for the remaining sectors, due approximately 30 to 60 days after billing.

We export our sugar products—brown sugar (our main sugar export), white sugar, refined sugar and organic sugar—free-on-board (“FOB”), operating throughout our supply chain, from the mill to the end-user, including road and railroad transportation, loading terminal operation at the port of Salaverry, located in the La Libertad region of Peru, and shipping services (through cost insurance freight (“CIF”) sales). During 2011, we exported approximately 9.9% of the total volume of sugar sold. We enter into short-term and long-term export contracts, and payment of the sales price is generally on a cash against documents basis.

During the three months ended March 31, 2012, approximately 5.4% of our sales of products was derived from exports (S/.20.4 million). During the year ended December 31, 2011, approximately 10.5% of our sales of products was derived from exports (S/.136.6 million). The sugar exported during the year ended December 31, 2011 was sold to customers in the United States, Haiti, Colombia and Chile, among other countries.

In Peru, our sales and distribution channels include: (1) sales to the industrial sector, such as food and beverage manufacturers, where we deliver sugar directly to their factories; (2) sales to the wholesale sector, where the sugar sold is delivered to the wholesalers or picked up from our warehouses and (3) sales to retailers, where we sell 1 kilogram and 5 kilogram bags of sugar directly to supermarkets and grocery stores. In Ecuador, our sales and distribution channels include: (1) sales to the industrial sector, such as food and beverage manufacturers which pick up the sugar from our warehouses; (2) sales to the wholesale and commercial sectors, where the sugar sold is picked up from our warehouses; and (3) sales to retailers, where we sell bags of sugar directly to supermarkets and grocery stores. In Argentina, our sales and distribution channels include: (1) sales of non-organic sugar, where customers pick up the sugar from our warehouses and (2) sales of organic sugar, where we deliver the sugar to the customs facilities in Buenos Aires for export.

Prices

Prices for our sugar products for export are set in accordance with international market prices. Prices for raw sugar are established in accordance with NY 11 futures contracts and prices for refined sugar are established in accordance with the Lon 5 futures contracts, traded on the London International Financial Futures and Options Exchange. Prices for sugar we sell in Peru are set in accordance with domestic market prices, using a reference published by the Peruvian Ministry of Agriculture, and NY 11 futures contracts. In Ecuador and Argentina, domestic prices of sugar and the prices paid to farmers for sugarcane are set by the government and follow international market prices. Spot market prices are fixed daily based on international NY 11 futures contracts and London 5 futures contracts, plus brokerage premiums, freights, import and banking costs and also the stocks availability.

All export sales are made with payment due on delivery, with prices based on NY 11 futures contracts.

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For further information on average sales prices and sales revenue from the sale of our sugar in the domestic and international markets for the three years ended December 31, 2011 and the three months ended March 31, 2012 and 2011, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Customers

In Peru, we operate exclusively in the wholesale and industrial sectors, with an estimated 46% market share of the domestic market, according to data published by the Peruvian Ministry of Agriculture. Approximately 70% of our sugar sales are to the wholesale sectors. Most of our domestic sugar customers are manufacturers of soft drinks, candy and chocolate, dairy products, cookies, powdered chocolate, jellies, juices and teas. We also sell sugar for refining and packaging. Producers of food and candy represents the largest segment of our industrial sector. As of the date of this offering memorandum, we have approximately 1,100 active customers in our domestic portfolio.

As most of our domestic sugar sales are made in the wholesale market, our losses resulting from payment defaults have been very low.

In the export market, our end-user customers are primarily major sugar refineries, which purchase a significant amount of our sugar products. We export sugar primarily to customers in United States, Haiti, Colombia and Chile.

Ethanol

Sales and Distribution

During the three months ended March 31, 2012, our sales of products from ethanol operations were S/.30.9 million (US$11.6 million), or 8.2% of our sales of products for the three months ended March 31, 2012, compared to sales of products from ethanol operations of S/.19.3 million (US$6.9) for the three months ended March 31, 2011. We sold approximately 17.2 million liters of ethanol, of which we sold 17.6% (3.0 million liters) domestically and exported approximately 82.4% (14.2 million liters). During the three months ended March 31, 2012, 78.7% of our sales of products from ethanol sales was derived from exports (S/.24.4 million), representing 6.5% of our sales of products.

During 2011, our sales of products from ethanol operations were S/.93.4 million (US$34.6 million), or 7.2% of our sales of products in 2011, compared to sales of products from ethanol operations of S/.76.8 million (US$27.3 million) in 2010. We sold approximately 52.6 million liters of ethanol, of which we sold 19.2% (10.1 million liters) domestically and exported approximately 80.8% (42.5 million liters). During 2011, 79.8% of our sales of products from ethanol sales (representing 5.7% of our sales of products) was derived from exports (S/.74.5 million).

Most of our domestic ethanol sales are made pursuant to annual supply contracts or in the spot market, with payment due in cash in 30 to 60 days.

In the international market, we sell through trading houses. We transport ethanol from our distilleries by truck to the port, where the ethanol is loaded onto ships for export. Sales are made FOB (where we pay for transportation of the goods to the port of shipment, plus loading costs, and the buyer pays freight, insurance, unloading costs and transportation from the port of destination to its facilities) or CIF (where the selling price includes the cost of the goods, the freight or transport costs and also the cost of marine insurance).

Prices

The price of ethanol in Peru is determined by the market. Daily prices are used as a reference for pricing spot transactions. Most export sales are made with payment due on delivery, with prices based on daily prices. We enter into short-term and long-term sales contracts, and payment of the sales price is generally due on delivery.

The ethanol export market is currently not material, and ethanol export prices are determined in accordance with international market prices.

Customers

Most of our domestic ethanol customers are industrial customers in Peru. As of March 31, 2012, we had approximately 10 active customers in our domestic portfolio.

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In Peru, the main market for our ethanol exports is Europe, where we sell ethanol to traders that resell the ethanol to industrial consumers for the production of alcoholic beverages in addition to a variety of industrial uses.

Other Products and Activities

Sugarcane byproducts are biodegradable and not harmful to the environment. They are an important alternative energy source. For example, bagasse is used to produced vapor and cogenerate electricity. In addition, residues from sugar and ethanol production processes, including cachaza and vinaze, are also used as organic fertilizers in our fields.

Bagasse and Co-Generation of Electricity

Sugarcane is composed of water, fibers, sucrose and other sugars and minerals. When the sugarcane undergoes the milling process, we separate water, sugar and minerals from the fibers and what remains is sugarcane bagasse. Sugarcane bagasse is an important sugarcane byproduct and used as fuel for the boilers in our mills. Sugarcane bagasse is burned and heats the water in the boilers to high temperatures, and the resulting vapor is used to produce sugar and ethanol. Part of the vapor is also used by a turbo-generator that produces electricity to power our mills.

Currently, our five mills are self-sufficient during the harvest, generating all of the electric energy they consume. We sell excess bagasse to producers of paper, cartons and packages. During 2011, we sold 193 thousand tons of bagasse, or 0.8% our sales of products.

Our total installed electricity generation capacity is 68 MW at Casa Grande, 10 MW at Cartavio, 3 MW at San Jacinto, 25 MW at La Troncal and 7 MW at San Isidro, all of which we use in our industrial facilities.

The main advantages of electricity generated by burning sugarcane bagasse include:

it is clean and renewable energy;

it complements hydraulic energy, and it is generated during the harvest when water reservoirs levels are lower; and

there is a short period of time required to start up the electricity generator.

As our installed electricity generation expands, excess electricity we do not use can be sold to the market. According to the Agencia de Promoción de la Inversión Privada - Perú, the Peruvian government’s investment promotion agency, projected economic growth rates for Peru suggest that investments in electricity generation will be required as demand for electricity increases further. The Peruvian government has enacted certain laws (Legislative Decree No. 1002 and its Regulation approved by Supreme Decree No. 012-2011-EM) with the aim of promoting investment in the generation of electric energy with renewable resources, including the incentives to encourage the generation of electric energy from sugarcane bagasse.

Molasses

Molasses is a by-product of processing sugarcane into sugar and is used as a raw material for the production of ethanol. The remaining molasses is sold to the animal feeding industry. During 2011, we sold 41,762 tons of molasses, all of which were sold to the domestic market. During 2011, our sales of products from molasses was S/.33.0 million (2.5% of our sales of products), all of which were sold to the domestic market.

In Peru, approximately 438,000 tons of molasses is produced annually, of which approximately 360,000 tons are used by distilleries for alcohol production. A decrease in the use of molasses for ethanol production would increase the supply of ethanol available for other uses and result in a drop in the price of molasses.

Customer Concentration

We have a wide variety of customers in Peru, Ecuador, Argentina and other countries. In Peru, we have more than 1,100 customers, with the largest customer constituting 9% of our sales in Peru. In Ecuador, we have more than 600 customers, with the largest customer constituting 11% of our sales in Ecuador. In Argentina, we have 18 customers, with the largest customer constituting 30% of our sales in Argentina.

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The following table sets forth the 10 largest customers of Casa Grande during 2011:

Customer SUCDEN AMERICAS CORPORATION DEPRODECA S.A.C. INVERSIONES SAN ROQUE EIRL INVERSIONES DOWER WARTHON S.A.C. CORPORACION VEGA S.A.C. NEONAZARENO E.I.R.L. COMERCIALIZADORA Y DISTRIBUCION EMC TRADING ED & F MAN SUGAR INC. INVERSIONES PUCARA S.A.C.

The following table sets forth the 10 largest customers of Cartavio during 2011:

Customer GLORIA S.A. CORPORACION AZUCARERA DEL PERU S.A. EMC TRADING ED & F MAN PERU S.A.C. ALICORP S.A.A. INVERSIONES SAN ROQUE E.I.R.L. MOLITALIA S.A. DEPRODECA S.A.C. CASA GRANDE S.A.A. AJEPER S.A.

The following table sets forth the 10 largest customers of San Jacinto during 2011:

Customer DEPRODECA S.A.C. AJINOMOTO DEL PERU S.A. CALSA PERU S.A.C. CORPORACION AZUCARERA DEL PERU S.A. INVERSIONES SAN ROQUE E.I.R.L. COMERCIAL ALVARADO S.R.L. TRANSPORTE PHI & GIL S.A.C. ALCOHOLES DEL PERU S.C.R.L NEONAZARENO E.I.R.L. TABLEROS PERUANOS S.A.

The following table sets forth the 10 largest customers of San Isidro during 2011:

Customer ED & F MAN SUGAR DELLA NATURA CANDICO SUNPROJUICE PRONATEC NATURKOST AVAFINA SUCRE EXP. WORLEE CARE

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The following table sets forth the 10 largest customers of La Troncal during 2011:

Customer ARCA ECUADOR, S.A. AJECUADOR S.A. DISTRIBUIDORA IMPORTADORA DIPOR S.A. PATIAM S.A. MULTICOMERCIO ALDEAN S.C.C. QUIJIJE TOALA ANGEL ROBERTO DISTRIMEDIOS S.A. CONFITECA COMPAÑIA ANONIMA TIENDAS INDUSTRIALES ASOCIADAS TIA S.A. ORTIZ BENAVIDES MARCOS GIOVANNY

Competition

The sugar and ethanol industry in Peru has undergone great changes. The Peruvian military coup led by General Juan Velasco Alvarado in 1968 resulted in the expropriation of sugar plantations and their conversion into cooperatives. Since the return to a democratic government in 1980, most sugar plantations have become privatized. The sugar and ethanol industry in Peru has experienced increased consolidation through mergers and acquisitions and the implementation of new greenfield projects over the last several years.

Despite the increased consolidation over the last several years, this industry remains highly fragmented with approximately eleven mills in operation during 2011, of which only one competitor, Laredo, is located in the La Libertad Region, according to the Peruvian Ministry of Agriculture. Due to distance and high logistical costs, we face little competition from sugarcane, sugar and ethanol producers located in Peru. The closest competing mills are Tuman and Pomalca, both of which are located in the Chiclayo region.

The following table sets forth the number of mills, the amount of sugarcane crushed and the quantities of sugar and ethanol produced by us and our main Peruvian competitors during 2011.

Group Crushed Sugarcane (tons) Market share Casa Grande........................................ 2,331,436 22.7% Cartavio .............................................. 1,688,790 16.5% San Jacinto.......................................... 696,063 6.8% Laredo................................................. 1,255,632 12.2% Paramonga .......................................... 1,125,246 11.0% Tuman................................................. 995,925 9.7% Pucala ................................................. 932,997 9.1% Pomalca .............................................. 809,668 7.9% Andahuasi ........................................... 345,467 3.4% Azucarera del Norte ............................ 38,024 0.4% Chucarapi............................................ 36,187 0.4% Total.................................................... 10,255,436 100.0% _______________________ Source: Peruvian Ministry of Agriculture

In Ecuador, there are six sugar mills, of which La Troncal represents 28% of the Ecuadorian sugar production. In Argentina, there are 23 mills, of which San Isidro is the only producer of organic sugar, substantially all of which is exported.

We also face competition from international sugar producers. In addition, we face strong competition in highly regulated and protected markets, such as the United States and the European Union.

Intellectual Property

The nature of our business requires brand differentiation and our products are registered under trademarks. Our corporate names and logos, as well as our products’ names and logos are registered before the Peruvian National Institute for the Defense of Competition and Intellectual Property (Instituto Nacional de Defensa de la Competencia y de la Propiedad Intelectual, or “INDECOPI”). Coazucar has seven trademark certificates with its corporate names

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“Coazucar del Peru S.A.” and “Coazucar”, which expire in 2021. Cartavio has eight trademark certificates with its corporate and product names, and logo “Cartavio”, which expire in 2013. Casa Grande has 33 trademark certificates with its corporate and product names, and logos “Casa Grande”, “Hacienda Casa Grande”, “Justo y Cabal”, among others, which expire in 2016. San Jacinto has three trademark certificates with its corporate and product names, and logos “San Jacinto” and “Un sol de azucar de Agroindustrias San Jacinto S.A.A.”, which expire in 2014. Our trademarks can be renewed prior to their expiration. The brand names of our mills in Argentina and Ecuador are also registered with the applicable governmental authorities in each country.

Research and Development

We have an agricultural research and development department, which promotes independent studies for the most efficient allocation of sugarcane varieties in specific planting areas to obtain maximum productivity.

Our independent research and development activities are aimed at the continuous improvement of our agricultural process. For our industrial operations, we have a quality control department, which analyzes variables that affect the efficiency of our production process and maintain a record of corrective measures to address failures detected. These corrective measures undergo a thorough testing process to assess their effectiveness.

Plant, Property and Equipment

Our principal executive offices are located in the cities of Trujillo and Lima. Our properties consist primarily of sugarcane, sugar and ethanol production facilities and land on which we cultivate sugarcane. We own substantially all of the land on which we cultivate sugarcane.

The charts in “—Overview – Our Mills and Distilleries” show the primary products, daily production capacity and production capacity at each of our mills and distilleries for the three months ended March 31, 2012 and for the years ended December 31, 2011, 2010, and 2009. We believe that all of our production facilities are in good operating condition. As of March 31, 2012, our consolidated net book value of our property, plant and equipment was S/.2,816.8 million, S/.1,769.3 million of which consisted of land. As of March 31, 2012, S/.276.7 million of our total outstanding indebtedness was secured by certain of our land and agricultural and industrial equipment and machinery.

The following chart shows the breakdown of the net book value of our property, plant and equipment by subsidiary as of March 31, 2012.

Entity Property, Plant and Equipment Land (in millions of S/.) Coazucar .......................................................................... 131,501 75,995 Casa Grande..................................................................... 1,214,502 784,010 Cartavio ........................................................................... 418,061 288,170 San Jacinto....................................................................... 334,841 209,075 Sintuco............................................................................. 55,240 51,845 San Juan(1)........................................................................ 2,384 179 San Isidro......................................................................... 200,609 174,134 La Troncal........................................................................ 459,666 185,886 Total ................................................................................ 2,816,804 1,769,294 _______________________ (1) Refers to Agroindustrias San Juan S.A.C., a subsidiary of Coazucar with a parcel of land but no operations.

Employees

As of March 31, 2012, we had 10,658 permanent employees and 2,868 temporary employees (who were contracted for harvesting operations). We hire new employees throughout the year, and offer our employees training to allow them to develop two skills: one for use during the harvest and the other for use between harvests.

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The following chart shows the breakdown of our employees by subsidiary as of March 31, 2012.

Entity Permanent Temporary Total Coazucar .......................................................................... 17 — 17 Casa Grande..................................................................... 3,780 1,420 5,200 Cartavio ........................................................................... 1,542 989 2,531 San Jacinto....................................................................... 1,470 254 1,724 Sintuco............................................................................. 103 51 154 Chiquitoy ......................................................................... 495 — 495 San Isidro......................................................................... 599 30 629 La Troncal........................................................................ 2,652 124 2,776 Total ................................................................................ 10,658 2,868 13,526

We negotiate annual collective bargaining agreements with the various unions with which our employees are affiliated. As of March 31, 2012, we were party to nine collective bargaining agreements. We have experienced two recent labor stoppages. We experienced a labor stoppage at Cartavio for 15 days in February 2010 and at San Jacinto for 9 days in March 2011, both of which were due disagreements over wages. Both labor stoppages were resolved. Approximately 46% of our employees are unionized as of March 31, 2012.

Benefits

We offer our employees (depending on their job description) a benefit package, including: (1) recreation and entertainment programs; (2) loans for health and educational needs; (3) annual trainings; (4) housing for employees; (5) profit sharing plans; and (6) transportation service from the city of Trujillo to our production facilities.

Social Programs

We participate in a number of social projects with local communities, mainly where our industrial facilities are located. As the principal employer in our community, we support constant dialog with local authorities and institutions, and contribute millions of nuevos soles annually for road improvements and cleaning. We also provide potable water to over than 65,000 habitants in the community and donate the construction of wells for neighboring rural settlements. We also provide sports and recreation venues such as soccer athletic fields and swimming pools to the community.

Other social programs that we offer to the community include: (1) an educational program for local students, offering them four libraries with books and Internet-connected computers to assist them in their schoolwork; (2) an athletic program partnering with municipalities to provide children with volleyball, soccer, basketball and swimming; (3) a women’s program that provides workshops on skills such as handicrafts, sewing and cooking to allow local women to generate income; (4) a nutritional program that provides free milk daily to children in low-income families and provide medical checkups to children to detect and treat malnutrition.

We also provide donations to the community, including fuel to local police, donations for construction of health centers and infrastructure improvement, donations to retirement homes and churches and food donations, among others.

Insurance

As of the date of this offering memorandum, we had insurance covering the vehicles we own that are used in our business, with all risks coverage including related civil liabilities, collision coverage and third party coverage. We also have insurance covering our facilities and their contents, such as equipment, machinery and inventory stored therein. We do not have insurance that covers our planted sugarcane prior to harvesting.

We do not anticipate having any difficulties in renewing any of our insurance policies, which are provided by leading insurance companies such as Pacifico Vida, Pacifico Seguros, Rimac Seguros and Mapfre Seguros, and believe that our insurance coverage is reasonable in amount and consistent with industry standards applicable to similarly situated sugar and ethanol companies operating in Peru.

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Legal and Administrative Proceedings

As of March 31, 2012, we are party to approximately 2,013 legal and administrative proceedings, involving tax, social security, civil, environmental and other matters, brought against us for a total amount of approximately S/.232.6 million. Under Peruvian Law and IFRS we are required to make a provision for those legal and administrative proceedings that, in our judgment or in the judgment of our legal advisors, are likely to have a result that is adverse to us. As of March 31, 2012, we have recorded provisions for an amount of S/.15.9 million in connection with these legal and administrative proceedings compared to a total of S/.14.9 million as of December 31, 2011, as reflected in our audited consolidated financial statements. As of March 31, 2012, our subsidiaries have made judicially-mandated payments in an aggregate amount of approximately S/.17.0 million. In addition, there are currently certain legal proceedings pending in which we are involved for which we have not established provisions or made judicially-mandated payments. If any of these proceedings is decided adversely against us, our results of operations or financial condition could be materially adversely affected.

With respect solely to Coazucar, there is one legal proceeding and there are no governmental or arbitration proceedings (and we are not aware of any such proceedings which are pending or threatened) during the past 12 months, which may have significant effects on Coazucar or our financial position or profitability.

Although we are not a party to any government or arbitration proceedings, we may be adversely affected by the negative outcome of proceedings in which other companies of Grupo Gloria are involved.

Tax and Social Security Contribution Proceedings

As of March 31, 2012, we were involved in 14 administrative tax proceedings, all of which we initiated in response to disagreements over income and VAT taxes with the Peruvian National Superintendency of Tax Administration (Superintendencia Nacional de Administración Tributaria), primarily relating to the deductibility of expenses. These tax proceedings are currently before the tax tribunal (tribunal fiscal), the decisions of which can be appealed to the judiciary (poder judicial). We have assessed our estimated exposure in respect of these proceedings as approximately S/.8.7 million (based on lawsuits for which we classify our risk of loss as probable or possible) and have deposited S/.0.2 million with the court pursuant to judicial judgments. We calculated our total exposure based on our experience in similar lawsuits in the past.

Labor Proceedings

As of March 31, 2012, we were party to 1,749 judicial and administrative labor proceedings involving a total amount of approximately S/.98.7 million. As of March 31, 2012, we have established provisions in an aggregate amount of S/.12.3 million. We calculated our exposure based on our experience in similar lawsuits in the past.

Civil Proceedings

As of March 31, 2012, we were a party in 188 civil proceedings in the courts, 157 of them as defendants.

Our total estimated exposure in these proceedings was S/.13.2 million (based on lawsuits for which we classify our risk of loss as probable or possible). As of March 31, 2012, we have established provisions in an aggregate amount of S/.3.5 million. Claims against us in these suits include (1) compensatory and punitive damages for work-related accidents; (2) orders to refrain from using right-of-way; (3) reimbursement of amounts not paid under agreements for the transportation of our employees and for sugarcane harvesting and other contracts; (4) a civil class action for application of amounts in welfare plan; and (5) annulment of contracts.

Environmental Proceedings

We are party to one administrative proceedings regarding our burning of sugarcane, which is part of the sugarcane harvesting process and the legal forestry reserve.

Restructuring Proceedings

We purchased Chiquitoy while it was in judicially approved restructuring proceedings. Chiquitoy is currently still in an ordinary restructuring proceeding (procedimiento concursal ordinario) with the Peruvian consumer protection agency INDECOPI. We and our partner Agroholding S.A. each own 50% of the outstanding shares of Chiquitoy and we each own 50% of the 86.63% of the debt of Chiquitoy.

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REGULATORY OVERVIEW

We are subject to governmental regulation and supervision generally applicable to companies engaged in business in Peru, including labor laws, social security laws, environmental laws, consumer protection and antitrust laws, among others. These include applicable regulations for the construction, operation and maintenance of our administrative offices, warehouses, factories, mills and distilleries, among others.

Despite certain issues related to the delay in the processing or renewal of certain permits, we believe to be in compliance in all material aspects with applicable statutory and administrative regulations with regard to our business.

Peru

Promotion of the Agricultural Sector

Law N° 27360, Law for the Promotion of the Agricultural Sector, and its regulations approved by Supreme Decree No. 049-2002-AG, provide the main legal framework governing agricultural and related activities in Peru. The legal benefits contemplated by this Law allow our Peruvian subsidiaries to pay a reduced income tax rate of 15% per annum instead of the general rate of 30% per annum, as well as a more flexible labor and social regime.

Certain other regulations of the special Peruvian regime that promote the development of the sugar industry which are applicable to our Peruvian subsidiaries, include those regulations governed by Legislative Decree N° 802, Law N° 28027 and Law N° 29678, under which we have been able to (i) capitalize our tax debt, (ii) adhere to the special regime of payment with respect to contributions to the private pension system (we settled our debts and are currently paying within the normal procedure), and (iii) access to the asset protection regime, which entails that any injunction, mortgage, guaranty or others cannot be enforced (only Casa Grande qualified for this last benefit, under which approximately S/.2 million of its preexisting debt was protected from creditors, but is required to make payments according to a schedule approved by INDECOPI).

Water Permits

The Peruvian Ministry of Agriculture is the Peruvian authority responsible for setting guidelines and policies regarding sugarcane harvesting and processing. As is required for sugarcane harvesters and processors, we are in compliance with Law Nº 29338 – the Water Resources Law, and its regulations approved by Supreme Decree Nº 001-2010-AG, with the purpose of maintaining and obtaining the necessary water permits before the ANA, yet some of them are in renewal or regularization processes.

We must also obtain from the ANA the necessary authorizations to reuse domestic or industrial wastewaters in our sugarcane fields. However, such permits require proper environmental licenses to be in place, which are currently in process.

Controlled Chemicals

The industrial production of sugar and ethanol requires the use of certain controlled chemicals and substances, the commercialization, transportation and use of which is controlled by the National Agricultural Health Service (Servicio Nacional de Sanidad Agraria, or “SENASA”) due to their potentially being used to produce illegal drugs. We comply with Law Nº 28305 and its regulations which requires us to obtain a User Certificate from the National Police Drug Division (Unidad Antidrogas de la Policia Nacional del Perú, or “DIRANDRO”) and to register ourselves before the Peruvian Ministry of Production. Furthermore, our activities (purchase and use of controlled chemicals) are registered in the special registries in the Peruvian Ministry of Production.

Fuel Storage

Any company that purchases fuel for its own activities and has facilities to receive and store fuel is required to (i) obtain an authorization from the Supervising Body of Investment in Mining and Energy (Organismo Supervisor de la Inversión en Energía y Minas) prior to installing or expanding such facilities, and (ii) be registered in the Registry of Direct Fuel Consumers. Casa Grande and Cartavio meet the above mentioned requirements; however San Jacinto is currently in the process of obtaining the relevant authorizations.

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Sanitary Regulation

Our products for human consumption, such as white and brown sugar, have Sanitary Registries with the General Bureau of Environmental Health (Dirección General de Salud Ambiental, or “DIGESA”) of the Peruvian Ministry of Health, which allows their commercialization in the local market. Likewise, companies that participate in food and/or beverages manufacturing processes for the domestic or international market must meet the Standards for the implementation of Hazard Analysis and Critical Control Point (HACCP) System, approved by Ministerial Resolution No. 449-2006/MINSA. Under such standards, companies must apply for the approval of their “HACCP Plan” before DIGESA. Currently, our companies are adjusting their plans.

In order to export our product, we are currently applying for Phytosanitary Certificates from SENASA, including the compliance of regulations to ensure sanitary and safe conditions in facilities for the sale and distribution of food products. Likewise, certain of our companies have the U.S. Food and Drug Administration – FDA Certificate and others are applying for it. The aforementioned permits meet the terms of the Food Safety Law, approved by Legislative Decree N° 1062, and the Regulation for Food and Agricultural Health and Safety, approved by Supreme Decree N° 004-2011-AG.

Environmental Permits

According to article 18 of Law N° 27446, Law of the National System of Environmental Impact Evaluation, the competent environmental authority for granting environmental permits is the entity that corresponds to the activity of the company which generates the highest gross annual income. Therefore, the environmental authority that monitors our operations is the Peruvian Ministry of Agriculture.

Our companies are required to file an Environmental Adequacy and Management Program (Programa de Adecuación y Manejo Ambiental, or “PAMA”). Currently, Casa Grande has obtained such environmental permit approved by the competent authority, while the permits of Cartavio and San Jacinto are in process and are expected to be received in the coming months.

Electricity Generation Authorizations

The process of burning sugarcane bagasse qualifies as “electric cogeneration”, which is defined by article 1.5 of Law N° 28832, Law to Ensure Efficient Development of Electricity Generation, as the process of the combined production of electricity and thermal energy, which is an integral part of a productive activity, where electricity is destined for consumption by oneself or by third parties. See “Business—Other Products and Activities—Bagasse and Co-Generation of Electricity.”

The process of burning sugarcane bagasse was considered as thermoelectric generation until May 2, 2008. Subsequent to May 2, 2008, it is considered as a renewable energy resource, according to the Law for the Promotion of Investments in Electricity Generation based on Renewable Energy Sources (Ley de promoción de la inversión para la generación de electricidad con el uso de energías renovables) approved by Legislative Decree N° 1002 (“DLRER”). Prior to the entry into force of DLRER, an authorization was required to generated electricity with biomass, as was specified in article 4° of Law Decree N° 25844, Electricity Concessions Law.

Furthermore, from the date of effectiveness of DLRER, which modified article 3° d) of the Electricity Concessions Law, a definitive concession is required in order to generate electricity with renewable energy resources with installed capacities larger than 500 kW. Currently, San Jacinto is in the process of transferring the authorization of an acquired company to its own name and Cartavio has the corresponding authorization in order to generate electric power and Casa Grande is in process of requesting such authorization from the competent authority.

Argentina

The production and commercialization of sugar in Argentina is subject to a wide range of both national and provincial regulations, including mainly companies, environmental, foreign exchange control, tax, sale and ownership of real estate, price controls and export quotas, among others. Please find below a brief description of the material regulations affecting the sugar business in Argentina:

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Companies

The incorporation, organization, existence, and liquidation of companies in Argentina is governed by the Companies Law (No. 19,550). The Public Registry of Commerce is the agency that oversees companies in Argentina and it is represented by a different body in each province and in the city of Buenos Aires. These bodies only have jurisdiction over the companies incorporated in each specific jurisdiction. In the city of Buenos Aires, the Public Registry of Commerce is entrusted to the Inspección General de Justicia.

Environmental

The production and commercialization of sugar in Argentina is subject to several both national and provincial environmental regulations, which are briefly described below:

National Law No. 24,051, which sets forth the regime applicable to the generation, use, transport, treatment, and final disposition of hazardous waste materials, establishes that all persons that generate or process hazardous waste materials must be enrolled in the respective registers. The application authority of said regime is the Secretariat of Environment and Sustainable Development of Argentina. Accordingly, pursuant to local Resolution No. 224/2006, the Province of Salta requires the enrollment in the local Hazardous Waste Registry.

Law No. 7,070 of the Province of Salta provides that all activities that could generate adverse effects to the environment must obtain a certificate that assesses and approves the environmental effects of said activity. According to local Executive Decree No. 3097/2000, the sugar industry is considered to be an environmental hazardous activity.

Under Resolutions Nos. 568/2009 and 182/2010 of the Secretariat of Environment and Sustainable Development of the Province of Salta, sugar manufacturers must register with the environmental hazardous local registry.

The Water Code of the Province of Salta and Law No. 7,070 of the Province of Salta, establish that companies that pour waste liquids into water courses and emit toxic gases that cause bad odors, which can potentially pollute the environment, must obtain the respective permits.

Section 78 of the Water Code of the Province of Salta establishes the need to obtain a concession for the industrial use of water courses.

The Argentine Food Code (Law No. 18,284) provides that all products that are manufactured, commercialized, imported or exported destined to human consumption must be registered and approved by the National Administration on Medicines, Food and Technology (ANMAT).

Foreign Exchange controls

Since the abandonment of the Peso-U.S. dollar parity in 2002, the Argentine government adopted a number of monetary and currency exchange control measures, among which it created the Single Free Foreign Exchange Market (“Mercado Único y Libre de Cambios” or “FX Market”) through which all purchases and sales of foreign currency must be made. The agency in charge of enforcing the foreign exchange controls in Argentina is the Central Bank of the Republic of Argentina (Banco Central de la República Argentina). Please find below a list of the main foreign exchange restrictions in force that could affect companies with activities in Argentina:

(1) Argentine entities are required to transfer into Argentina and convert into Pesos, through the FX Market, funds disbursed under financial indebtedness granted by non-residents. Unless expressly exempted, these funds are subject to a 365-day non-interest bearing and non-transferrable bank deposit, in U.S. dollars, with an Argentine financial entity, for an amount equal to 30% of the amount of the transaction (the “Mandatory Deposit”). The principal under the foreign financial debt cannot be repaid prior to the expiration of a 365-day term counted as from the date on which the financing proceeds were converted into Pesos and provided certain conditions set forth by the Central Bank are complied with.

(2) Argentine entities are required to transfer into Argentina and convert into Pesos, in the FX Market, funds disbursed under pre-export loans granted by non-residents (the “Pre-Export Financings”); and

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(3) Argentine entities are required to transfer into Argentina and convert into Pesos in the FX Market, all foreign currency proceeds from exports of goods (except for those that are applied to the repayment of Pre-Export Financings) and services within certain periods established by the Central Bank.

Taxes

The main federal taxes in force in Argentina are the income tax, minimum presumptive income tax, value added tax, tax on debits and credits in bank accounts, personal assets tax, equalization tax on dividends, and export taxes. The main provincial taxes are the gross turnover tax and stamp tax. The agency in charge of collecting federal taxes in Argentina is the Federal Administration of Public Revenue (Administración Federal de Ingresos Públicos –AFIP), whereas each province has a local agency in charge of collecting provincial taxes. Please find below a brief summary with the main characteristics and applicable rate of each of the above mentioned taxes:

Income Tax. The Income Tax Law (No. 20,628) establishes a federal tax on the worldwide income of Argentine resident individuals and legal entities, and on the Argentine sourced income of non-resident individuals and legal entities. The general income tax rate for companies is currently 35% on taxable net income obtained in Argentina or abroad (gross income minus deductible expenses). Non-residents are taxed in Argentina by means of a fixed withholding made by the local payer of Argentine sourced income.

Minimum Presumptive Income Tax. This tax applies to worldwide assets of Argentine companies. The tax is only applicable if the total value of the assets exceeds AR$200,000 at the end of the company’s fiscal year, and is levied at a yearly rate of 1% on the total value of such assets. Minimum Presumptive Income Tax can be credited against Income Tax.

Value Added Tax. The Value Added Tax (“VAT”) applies to the domestic sale of goods, the domestic rendering of services, and the import of goods and services. The current VAT general rate is 21%, however, certain sales of goods (such as raw meats, cereals and oilseeds) are subject to a lower tax rate of 10.5%. The VAT rate for the commercialization of sugar is 21%. VAT resulting from sales can be credited against VAT paid to suppliers, and the balance must be monthly paid to the AFIP.

Tax on debits and credits in bank accounts. This tax applies to debits and credits in bank accounts opened in Argentina and to other transactions that, due to their special nature and characteristics, are similar or could be used in lieu of a bank account. The general tax rate is 0.6% on each credit and each debit. 20% of the resulting tax can be credited against Income Tax.

Personal Assets Tax. Argentine companies have to pay the personal assets tax corresponding to Argentine resident individuals, foreign individuals, and foreign entities for the holding of shares and other participations in such company as of December 31 of each year. The applicable tax rate is 0.5% and is levied on the equity value stated in the latest financial statements.

Equalization Tax on dividends. Although in principle there is no dividends tax in Argentina, equalization tax is applicable at a 35% rate on dividends distributed in excess of the accumulated taxable income of the entity. Under certain double tax treaties, equalization tax may be reduced.

Export Taxes. At present, pursuant to Decree No. 509/07 of the Ministry of Economy and Public Finance, exports of sugar are subject to a 5% export duty. Sugar exporters are entitled to a reimbursement of local export duties up to 4.05% of the export price.

Gross Turnover Tax. The Gross Turnover tax is a provincial tax levied on gross income derived from lucrative activity. Each of the provinces and the City of Buenos Aires apply different tax rates; however, most of the provinces apply rates ranging between 3% and 5% on the commercialization of sugar. The tax is levied on the amount of gross income resulting from business activities carried on within the respective jurisdictions. A federal treaty has been agreed between provinces to avoid double taxation in cases of inter-jurisdictional activities.

Stamp Tax. The Stamp tax is a provincial tax, which is levied on the formal execution of public or private instruments, such as all type of contracts, notary deeds and promissory notes, among others. In general, stamp tax

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rates vary from 0.6% to 4% depending on the jurisdiction, and it is applied based on the economic value of the instrument.

Sale and Ownership of Real Estate

The acquisition and transfer of real estate is governed by the provisions of the Argentine Civil Code as well as municipal zoning ordinances.

On December 28, 2011, the Congress of Argentina passed Law No. 26,737 (regulated by Decree No. 274/2012) that lays down the regime for the protection of national land (“National Land Protection Law”), which restricts the ownership of land by foreigners.

For purposes of the National Land Protection Law, foreigners are deemed:

(i) Foreign individuals whether domiciled in Argentina or abroad, unless they have resided in Argentina interruptedly during ten years, have Argentinean children (who have resided uninterruptedly in Argentina during five years) or are married to an Argentine citizen to the extent the marriage took place no less than five years before the acquisition of the land and have resided for at least five years in Argentina;

(ii) Legal entities where foreigners own or control 51% of its equity or a lower percentage if it is sufficient to control the entity; and

(iii) Foreign governments or public entities controlled by foreign governments.

The following transactions must be notified to the Government of Argentina in order to control that the provisions of the National Land Protection Law are met:

(i) Any variation in the equity composition of a legal entity that is controlled by foreigners or where foreigners own more than 25% of its equity.

(ii) The transfer of land ownership (whether directly or indirectly) to a trust whose beneficiaries are foreigners.

(iii) Any joint venture or association in which foreigners own 25% or a larger participation.

Foreigners cannot own more than 15% of the rural land of Argentina. The same cap is applicable in each province and municipality. Each foreign individual or legal entity cannot individually own more than 30% of said 15% cap.

Furthermore, foreigners are not allowed to purchase land that is adjacent to relevant rivers or lakes. The purchase of land located in the so-called security zone (close to the borders) must be approved by the Ministry of Interior.

As from the issuance of the National Land Protection Law, foreigners are not allowed to purchase more than 1,000 hectares of the best quality land or its equivalent depending on where the land is located. The Government will determine said parameter based on the location of the land and its productive potential, so it is possible that in certain regions the surface that foreigners will be allowed to buy will be higher. Prior to the acquisition of the land, the Government will issue a certificate in order to validate that the purchaser meets the parameters set forth by the National Land Protection Law. Essentially, this certificate will indicate the land that the buyer owns in Argentina, if any.

Price Controls and Export Quotas

As of year 2010, the Secretariat of Domestic Trade of the Ministry of Economy and Public Finance, unofficially and threatening with the application of the Supply Law (No. 20,680), has obliged sugar manufacturers to sell certain quantities of sugar at a preferred price for its subsequent sale to the public. In a similar fashion, in 2010, the Secretariat of Domestic Trade of the Ministry of Economy and Public Finance temporarily reduced the sugar export quota to oblige local sugar producers to sell the product at a lower price in the domestic market.

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Ecuador

The governmental authorities in Ecuador in charge of regulating the environment in the areas where La Troncal include: (a) the Ministry of Environment (Ministerio del Ambiente), (b) the National Council of Electricity (Consejo Nacional de Electricidad), (c) the National Water Secretariat (Secretaría Nacional del Agua) and (d) the Autonomous Provincial Government of La Troncal (Gobierno Provincial y Autónomo de la Troncal).

The environmental laws and regulations applicable to La Troncal include: (a) the Cultural Heritage Act (Ley de Patrimonio Cultural), (b) the Bylaws of the Electricity Sector Regime (Reglamento a la Ley de Regimen del Sector Eléctrico), (c) the Codification of the Environmental Management Act (Codificación de la Ley de Gestión Ambiental), (d) the Regulations to the Environmental Management Act (Reglamento a la ley de Gestión Ambiental), (e) the Codification of the Forestry Law (Codificación de la Ley Forestal), (f) the Unified Text to the Secondary Environmental Legislation (Texto Unificado de la Legislación Ambiental Secundaria), and (g) Technical environment standards (Normas técnicas ambientales).

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MANAGEMENT

We are managed by a board of directors and by our executive officers.

Board of Directors

The Board of Directors is the body responsible for the administration of Coazucar. The members of our Board of Directors are appointed by our shareholders at the general shareholders meeting for a three-year term and are eligible for re-election. The Board of Directors is currently comprised of three members. The quorum for the Board of Directors meetings is the next whole number greater than half of members of the Board of Directors.

In order for resolutions to be adopted by the Board of Directors, approval by the majority of all the Directors present at the meeting is required and, in the case of a deadlock, the chairman’s vote determines the result. The Board of Directors has all the powers for legal representation and management necessary to conduct the business of Coazucar, except for those powers granted exclusively to the general shareholders by our bylaws and by applicable law.

The following table sets forth certain information with respect to the current members of our Board of Directors.

Name Date of Appointment Age Expiration of Appointment Jorge Columbo Rodríguez Rodríguez (President) ............ 2005 66 2014 Vito Modesto Rodríguez Rodríguez (Vice President) ...... 2007 73 2014 Claudio José Rodríguez Huaco......................................... 2007 31 2014

We summarize below certain biographical information regarding our current directors.

Jorge Columbo Rodríguez Rodríguez. Mr. Rodríguez has served as a member of our Board of Directors since 2005. He currently serves as either the President or Vice President of all Grupo Gloria companies. He serves as a member of the board of directors of Cartavio, Casa Grande, San Jacinto, Azucarera Olmos, Sintuco, Gloria S.A., Yura S.A., as well as other Grupo Gloria companies. He holds a bachelor’s degree in industrial engineering from the Universidad Nacional de Ingeniería del Perú and graduate degrees in business administration from the University of Leeds and the University of Reading.

Vito Modesto Rodríguez Rodríguez. Mr. Rodríguez has served as a member of our Board of Directors since 2007. He currently serves as either the President or Vice President of all Grupo Gloria companies. He serves as a member of the board of directors of Cartavio, Casa Grande, San Jacinto, Azucarera Olmos, Sintuco, Gloria S.A., Yura S.A., as well as other Grupo Gloria companies. He holds a bachelor’s degree in civil engineering from the Universidad Nacional de Ingeniería del Perú.

Claudio José Rodríguez Huaco. Mr. Rodríguez has served as a member of our Board of Directors since 2007. Mr. Rodríguez worked in the Capital Markets and Banking department of PricewaterhouseCoopers in London and as an investment banker with JPMorgan Chase in New York, focusing on Latin American markets. He serves as a member of the board of directors of Cartavio, Casa Grande, San Jacinto, Azucarera Olmos, Gloria S.A. and Yura S.A. He holds a bachelor’s degree in business administration, finance and accounting from Oxford Brookes University and a master’s degree in financial administration from the Lancaster University in England.

The business address of the members of our Board of Directors is Corporación Azucarera del Perú S.A., Av. República de Panamá 2461, La Victoria, Lima 13, Peru.

Executive Officers

Our chief executive officers of Coazucar, La Troncal and San Isidro are our legal representatives and our chief executive officers and our executive officers are responsible for our internal organization and day-to-day operations and the implementation of the general policies and guidelines established from time to time by our Board of Directors.

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The following table sets forth certain information with respect to our executive officers and the chief executive officers of our principal subsidiaries.

Name Position Date of

Appointment Years of Experience in Sugar and Ethanol Age

John Carty Chirinos .................. Chief Executive Officer 2007 13 42 Hugo Dávila Trinidad............... Production Manager 2007 25 74 Fabio Bouroncle Zegarra .......... Agricultural Services Manager 2007 9 48 Elizabeth Mardini Eliot ............ Commercial Manager 2007 10 53 Carlo Bertini Hurtado ............... Administrative Manager 2012 3 48 Stanley Simons Chirinos .......... Human Resources Manager 2011 9 52 César Loli Berríos..................... Field Manager 2007 12 37 Marco Ricasca Zvietcovich ...... Field Superintendent 2009 11 38 Roberto Foulkes........................ Chief Executive Officer of La Troncal 2007 14 45 Edgardo García ......................... Chief Executive Officer of San Isidro 2011 26 56

Summarized below is certain biographical information regarding our executive officers and the chief executive

officers of our principal subsidiaries.

John Carty Chirinos. Mr. Carty has served as our Chief Executive Officer since 2007. Previously, he served as Chief Executive Officer of Casa Grande and has served as Operations Supervisor, Commercial Manager and Assistant Manager of Cartavio. Before joining Grupo Gloria, Mr. Carty worked in different companies of the manufacturer, beverage, cattle and transport industries. He holds a bachelor’s degree in business administration from the Universidad Católica de Santa María. Mr. Carty also completed graduate studies in business administration at Centrum Pontificia Universidad Católica del Perú.

Hugo Dávila Trinidad. Mr. Dávila has served as our Production Manager since 2007. Previously, he served as Production Manager of Casa Grande, Cartavio and San Jacinto and as Ethanol Business Manager of Coazucar. Before joining Grupo Gloria, Mr. Dávila served as CEO of Sociedad Paramonga Ltda. S.A., Assistant Manager of Empresa Agricola Paramonga, S.A. and as Manager of Papelera Peruana S.A. He holds a bachelor’s degree in mechanical and electrical engineering from the Universidad Nacional de Ingeniería. Mr. Dávila also completed graduate studies in management at the Universidad de Piura, in accounting and finance at Universidad ESAN, and at North Carolina State University.

Fabio Bouroncle Zegarra. Mr. Bouroncle has served as our Agricultural Services Manager since 2007. Previously, he served as Agricultural Services Manager of Cartavio and Casa Grande and as Agricultural Machinery Manager of Cartavio. Before joining Grupo Gloria, he served as head of the North and Barranca offices of Transaltisa S.A. Mr. Bouroncle completed graduate studies in strategic planning at the Universidad César Vallejo.

Elizabeth Mardini Eliot. Ms. Mardini has served as our Commercial Manager since 2007. Previously, she served as Director of Sales and Commercial Superintendent of Casa Grande. Before joining Grupo Gloria, Ms. Mardini served as National Sales Manager of Deprodeca, S.A.C., Chief Executive Officer of Ocho Rios Distribuidora S.A.C., Enrique W. Gibson Ltda., Andina de Valores Sociedad Agente de Bolsa, Radio TV Continental in Arequipa, and as General Services Director of Enafer Peru. She holds a bachelor’s degree in business administration from the Universidad Nacional de San Agustín.

Carlo Bertini Hurtado. Mr. Bertini has served as our Administrative Manager since February 2012. Before joining Grupo Gloria, Mr. Bertini served as Planning Manager of Grupo Caña Brava, as General Manager of the Gobierno Regional Piura, President of Proyecto Especial Chira – Piura, and as Manager of Finance and Administration of DSM Anti-Infectives Peru. Mr. Bertini holds a bachelor’s degree in economics and a master’s degree in finance and banking, both from the Universidad de Lima. Mr. Bertini also completed graduate studies in business administration at the Universidad ESAN.

Stanley Simons Chirinos. Mr. Simons has served as our Human Resources Manager since 2011. Previously, he served as Human Resources Manager of Grupo Gloria, Casa Grande and Cartavio. Before joining Grupo Gloria, Mr. Simons served as Director of Human Resources of Corporación Andina de Distribución S.A., Compañía Minera Milpo S.A.A. and Consorcio Textil del Pacifico S.A. He holds a bachelor’s degree in law from the Universidad Católica de Santa María.

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César Loli Berríos. Mr. Loli Berríos has served as our Field Manager since 2007. Previously, he served as Field Manager of Cartavio, Sintuco and Casa Grande. Before joining Grupo Gloria, Mr. Loli served as a field engineer for Empresa Agroindustrial Laredo, S.A.A. He holds a bachelor’s degree in agricultural engineering from the Universidad Privada Antenor Orrego and a master’s degree in business administration from the Pontificia Universidad Católica del Perú.

Marco Ricasca Zvietcovich. Mr. Ricasca has served as Field Superintendent since 2009. He previously served as Field Manager and Projects and Water Director of San Jacinto. Before joining Grupo Gloria, Mr. Ricasca served as a Technical Irrigation Specialist of Instituto Nacional de Investigación Agraria. He holds a bachelor’s degree in agricultural engineering from the Universidad Nacional de San Antonio Abad del Cusco. Mr. Ricasca also completed graduate studies in agribusiness administration at Universidad ESAN.

Roberto Foulkes. Mr. Foulkes has served as our Chief Executive Officer of La Troncal since 2007. Before joining Grupo Gloria, Mr. Foulkes worked as a tax advisor for Banco Latino. He holds a bachelor’s degree in law from the Universidad Católica de Santa María and a master’s degree in business administration from the Pontificia Universidad Católica del Perú.

Edgardo García. Mr. García has served as our Chief Executive Officer of San Isidro since 2011. Before joining Grupo Gloria, Mr. García served as a partner of the tax and accounting firm Estudio Bona, Garcia y Asoc., as General Manager of Prosal, S.A., and as a partner at Editorial Kapelusz, S.A. He holds a bachelor’s degree in accounting from the Universidad de Buenos Aires.

Committees

Our Board of Directors does not have any specialized committees as of the date of this offering memorandum. The Board of Directors is assisted in its audit functions by our internal audit department, by internal auditors from KPMG and by the comptroller of Grupo Gloria.

Compensation

Our bylaws provide that the remuneration of the Board of Directors shall from time to time be determined by Coazucar’s shareholders in an annual mandatory general shareholders meeting. All members of our Board of Directors serve without compensation.

Key personnel compensation include management services and personnel, which services amounted for S/.2.7 million during 2011. In addition to salaries and bonuses, our executive officers generally receive an automobile allowance, life insurance and medical insurance. In addition, our executive officers that are expatriates serving in Ecuador receive housing allowances and annual paid home leave.

Share Ownership

Two members of our Board of Directors, Vito Rodríguez Rodríguez and Jorge Rodríguez Rodríguez, each directly owns 2.94% of our shares. They indirectly own all of our outstanding shares.

Stock Option Plan

We do not have any stock option plans for our employees as of the date of this offering memorandum.

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SHAREHOLDERS

Clarcrest Investments S.A., a sociedad anónima incorporated under the laws of the Republic of Panama, owns 94.12% of our outstanding shares. Vito Rodríguez Rodríguez and Jorge Rodríguez Rodríguez each own 2.94% of our outstanding shares. Maningham Holding S.A., the sole shareholder of Clarcrest Investments S.A., owns one of our outstanding shares.

The rights of Clarcrest Investments S.A., Vito Rodríguez Rodríguez, Jorge Rodríguez Rodríguez and Maningham Holding S.A., as shareholders of Coazucar are contained in our bylaws. Our company operates in accordance with those bylaws and with the provisions of Peruvian law.

GRUPO GLORIA

The shareholders of Grupo Gloria directly and indirectly own all of our shares. Grupo Gloria is a conglomerate comprised of operating companies, including among many others, the Guarantors, Gloria S.A. and Yura S.A., under the common control of Vito Rodríguez Rodríguez and Jorge Rodríguez Rodríguez, with operations in various industries throughout Latin America, including dairy, food, cement, paper, agriculture and transportation. Grupo Gloria had assets of approximately S/.3,568.5 million (US$1,323.6 million) and S/.3,647.1 million (US$1,367.5 million) as of December 31, 2011 and March 31, 2012, respectively. For the year ended December 31, 2011 and the three months ended March 31, 2012, Grupo Gloria generated net income of S/.362.8 million (US$134.6 million) and S/.93.9 million (US$35.2 million), respectively, and revenues of S/.2,512.4 million (US$931.9 million) and S/.677.3 million (US$253.9 million), respectively. As of March 31, 2012, Grupo Gloria had approximately 26,000 employees on a consolidated basis.

The principal executive offices of Grupo Gloria are located at Av. República de Panamá 2461, La Victoria, Lima 13, Peru. Its main telephone number is +51 (1) 470-7170.

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RELATED PARTY TRANSACTIONS

In the ordinary course of our business we engage in a variety of transactions with certain of our affiliates. These transactions are entered into on an arm’s length basis. As of December 31, 2011, the material transactions that we had entered into with our related parties are described below, and as of March 31, 2012, there have been no additional material transactions with related parties. See note 28 to the audited consolidated financial statements and note 15 to the unaudited condensed consolidated interim financial statements included in this offering memorandum.

The following is a description of related party transactions that our management believes are material to us.

Chiquitoy

In 2005, Cartavio granted a US$2.9 million loan to Chiquitoy, one of our subsidiaries. This loan has a senior tranche, which bears interest at a rate of 4.0% per annum, and a subordinated tranche, which bears interest at a rate per annum of 1.0% .

In order to secure Chiquitoy’s payments obligations in favor of Cartavio, Chiquitoy granted a first and preferential lien in favor of Cartavio over 280,000 tons of its sugarcane.

San Jacinto

In 2009, we entered into a management, consulting and other services agreement with San Jacinto, one of our subsidiaries, to provide management, consulting and other services related to the operation and business of San Jacinto. Under this agreement, we paid S/.233,333 plus value added tax, on a monthly basis during a period of three years, beginning on January 2010, for such services. We will have paid the full amount due under this agreement in January 2013.

Gloria S.A.

We enter into sugar purchase and sale transactions on a regular basis with Gloria S.A., a related party. During 2011, we sold approximately S/.59.5 million worth of sugar to Gloria S.A., of which S/.2.3 million is outstanding.

Deprodeca S.A.C.

We enter into sugar purchase and sale transactions on a regular basis with Deprodeca S.A.C., a related party. During 2011, we sold approximately S/.228.1 million worth of sugar to Deprodeca S.A.C., of which S/.13.1 million is outstanding. In 2007 and 2008, we granted a S/.6.7 million unsecured loan to Deprodeca S.A.C. This loan bears interest at a rate per annum of 6%.

In addition, during 2011, we entered into an operating lease of premises with Deprodeca S.A.C. as lessor. We also enter into freight services transactions on a regular basis with Deprodeca S.A.C. We are required to pay S/.2.1 million as rent for the above mentioned operating lease and for all services rendered.

Trupal S.A.

We enter into bagasse purchase and sale transactions on a regular basis with Trupal S.A., a related party. During 2011, we sold approximately S/.13.8 million worth of bagasse to Trupal S.A., of which S/.1.0 million is outstanding.

Lakebar Holding S.A.

In 2006, Lakebar Holding S.A., a related party, granted us a S/.25.5 million unsecured loan to finance the acquisition of shares of Casa Grande. This agreement does not bear interest and does not have a definite due date. Before the closing of this notes offering, we intend to enter into an amended and restated loan agreement with Lakebar Holding S.A. to subordinate the loan to the notes offered herein. The amended and restated loan agreement will require us to pay interest on the loan at a rate per annum of LIBOR + 0.25% and the loan will mature in June 2023.

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Racionalizacion Empresarial S.A.

We enter into freight services transactions on a regular basis with Racionalizacion Empresarial S.A., a related party. We are required to pay S/.3.0 million for the freight services rendered to us during 2011.

Clarcrest Investments S.A.

Between 2009 and 2010, Clarcrest Investments S.A., our majority shareholder, granted us a S/.44.4 million unsecured loan to finance the acquisition of certain shares of Cartavio and San Jacinto and for working capital. This loan does not bear any interest and does not have a definite due date. Before the closing of this notes offering, we intend to enter into an amended and restated loan agreement with Clarcrest Investments S.A. to subordinate the loan to the notes offered herein. The amended and restated loan agreement will require us to pay interest on the loan at a rate per annum of LIBOR + 0.25% and the loan will mature in June 2023.

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DESCRIPTION OF THE NOTES

In this “Description of the Notes,” the word “Company” refers only to Corporación Azucarera del Perú S.A. and not to any of its Subsidiaries, as defined herein. The definitions of certain other terms used in this description are set forth throughout the text or under “―Certain Definitions.”

The Company will issue, and the Initial Guarantors will guarantee, the notes offered hereby (the “Notes”) under an indenture (the “Indenture”) among the Company, the Initial Guarantors and Citibank, N.A., as trustee (the “Trustee”). The terms of the Notes include those set forth in the Indenture. The Notes will not be registered under the Securities Act and will be subject to certain transfer restrictions. See “Transfer Restrictions”.

The following description is a summary of the material terms of the Indenture. It does not, however, restate the Indenture in its entirety. You should read the Indenture because it contains additional information and because it and not this description defines your rights as a holder of the Notes. After the Notes have been issued, a copy of the Indenture may be obtained by requesting it from the Company.

Brief Description of the Structure and Ranking of the Notes and the Note Guarantees

The Notes

The Notes will:

be the Company’s general unsecured unsubordinated obligations;

mature on August 2, 2022;

be effectively subordinated to all existing and future secured Indebtedness of the Company to the extent of the assets securing such Indebtedness;

be structurally subordinated to all existing and future Indebtedness and other liabilities of Subsidiaries of the Company that do not provide Note Guarantees and with respect to Casa Grande, to the extent that any obligations under the Notes exceed the amount of its partial Guarantee of amounts due on the Notes in an initial amount equal to US$162,500,000;

rank equally in right of payment with any and all of the Company’s existing and future Indebtedness that is not subordinated in right of payment to the Notes, other than with respect to certain obligations given preferential treatment pursuant to the laws of Peru;

rank senior in right of payment to any and all of the Company’s existing and future Indebtedness that is subordinated in right of payment to the Notes; and

be guaranteed on an unsubordinated basis by the Guarantors.

The Note Guarantees

Each Note Guarantee of a Guarantor will:

cover all amounts due on or with respect to the Notes, including amounts due in respect of principal, interest or otherwise;

be a general unsecured unsubordinated obligation of the Guarantor unlimited in amount, except in the case of Casa Grande whose Note Guarantee in respect of amounts due under the Notes is limited to an initial amount equal to US$162,500,000;

provide that each Guarantor will be jointly and severally liable for the Notes, subject to the limited amount applicable to Casa Grande;

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to the extent not otherwise secured by assets of such Guarantor, be effectively subordinated to all existing and future secured Indebtedness of such Guarantor to the extent of the assets securing such Indebtedness;

rank equally in right of payment with any and all of such Guarantor’s existing and future Indebtedness that is not subordinated in right of payment to its Note Guarantee, other than with respect to certain obligations given preferential treatment pursuant to the laws of Peru; and

rank senior in right of payment to any and all of such Guarantor’s existing and future Indebtedness that is subordinated in right of payment to its Note Guarantee.

General

As of March 31, 2012, after excluding intercompany balances and intercompany guarantees:

on a consolidated basis, the Company and its Subsidiaries had S/.805.6 million (US$302.0 million) of Indebtedness outstanding, of which S/.619.2 million (US$232.2 million) was secured Indebtedness and S/.0 would have been subordinated in right of payment to the Notes;

on a combined basis, the Guarantors had S/.264.3 million (US$99.1 million) of Indebtedness outstanding, of which S/.199.5 million (US$74.8 million) was secured Indebtedness and S/.0 would have been subordinated in right of payment to the Note Guarantees;

Casa Grande had S/.106.8 million (US$40.0 million) of Indebtedness outstanding, of which S/.97.8 million (US$36.7 million) was secured Indebtedness and S/.0 million would have been subordinated in right of payment to its Note Guarantee; and

on a combined basis, the Restricted Subsidiaries other than the Guarantors, had total liabilities of S/.568.1 million (US$213.0 million), including S/.306.6 million (US$115.0 million) of Indebtedness, and total assets of S/.1,425.8 million (US$534.6 million).

Not all of the Company’s Subsidiaries will Guarantee the Notes. In the event of a bankruptcy, liquidation or reorganization of any of these non-guarantor Subsidiaries, subject to applicable bankruptcy law, the non-guarantor Subsidiaries will likely be required to repay financial and trade creditors before distributing any assets to the Company or a Guarantor. For the three months ended March 31, 2012, the non-guarantor Subsidiaries and Casa Grande generated 24.1% and 40.6%, respectively, of the Company’s consolidated revenues and 14.8% and 51.3%, respectively, of the Company’s consolidated EBITDA.

As of the Issue Date, all of the Company’s Subsidiaries will be “Restricted Subsidiaries.” However, under the circumstances described below under the caption “—Certain Covenants—Designation of Restricted and Unrestricted Subsidiaries,” the Company will be permitted to designate certain of its Subsidiaries as “Unrestricted Subsidiaries.” Unrestricted Subsidiaries will not be subject to any of the restrictive covenants in the Indenture. Further, Unrestricted Subsidiaries will not Guarantee the Notes.

Application has been made to the Irish Stock Exchange for the Notes to be admitted to the Official List and to trading on the Global Exchange Market which is the exchange regulated market of the Irish Stock Exchange.

Although the Indenture will contain limitations on the amount of additional Indebtedness that the Company, the Guarantors and the Restricted Subsidiaries may incur, the amount of such additional Indebtedness could be substantial.

Principal, Maturity and Interest

The Notes will mature on August 2, 2022. The Company will issue the Notes in the aggregate principal amount of US$325.0 million in this offering. Subject to the covenant described under “—Certain Covenants—Limitation on Indebtedness,” the Company is permitted to issue additional Notes of the same series under the Indenture (“Additional Notes”), having the same terms and conditions as the Notes in all respects, including (i) full and unconditional Note Guarantees of any such Additional Notes by Cartavio, San Jacinto and Azucarera Olmos and (ii)

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a partial and unconditional Note Guarantee of any such Additional Notes by Casa Grande in an amount equal to one half of the aggregate principal amount of such Additional Notes. The Notes and any Additional Notes that are issued will be treated as a single class for all purposes under the Indenture, including with respect to waivers, amendments, redemptions and Offers to Purchase. However, in order for any Additional Notes to have the same ISIN, CUSIP or common code, as applicable, as the Notes, such Additional Notes must be fungible with the Notes for U.S. federal income tax purposes. Unless the context otherwise requires, references to the “Notes” for all purposes under the Indenture and in this “Description of the Notes” include any Additional Notes that are issued.

Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from and including the Issue Date, at a rate per annum of 6.375%, and will be payable semi-annually in arrears on February 2 and August 2 of each year, commencing on February 2, 2013. Interest will be payable to Holders of record on each Note in respect of the principal amount thereof outstanding as of the immediately preceding January 16 or July 16, as the case may be.

Interest will be computed on the basis of a 360-day year comprising twelve 30-day months. In no event will the rate of interest on the Notes be higher than the maximum rate permitted by applicable law.

Under New York’s statute of limitations, any legal action for breach of the Indenture, including non-payment of interest or principal, must be commenced within six years after any such breach.

Form of Notes

The Notes will be issued on the Issue Date only in fully registered form without coupons and only in denominations of US$100,000 and integral multiples of US$1,000 in excess thereof.

The Notes sold in reliance upon Rule 144A under the Securities Act will be represented by one or more permanent global notes (the “Rule 144A Global Notes”). The Notes sold in offshore transactions in reliance upon Regulation S under the Securities Act will be represented by one or more permanent global notes (the “Regulation S Global Notes,” together with the Rule 144A Global Notes, the “Global Notes”). The Global Notes will be deposited with the Trustee as custodian for the Depository Trust Company (“DTC”). Ownership of interests in the Global Notes, referred to in this description as “book-entry interests,” will be limited to persons that have accounts with DTC or their respective participants. The terms of the Indenture will provide for the issuance of definitive registered Notes in certain circumstances. Please see the section entitled “―Book-Entry; Delivery and Form.”

The registered Holder of a Note will be treated as the owner of it for all purposes.

Transfer and Exchange

A Holder may transfer or exchange Notes in accordance with the Indenture and the procedures described in “Transfer Restrictions.” The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents. No service charge will be made for any registration of transfer, exchange or redemption of the Notes, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection with any such registration of transfer or exchange.

The Company is not required to transfer or exchange any Note selected for redemption. Also, the Company is not required to transfer or exchange any Note for a period of 15 days before a selection of Notes to be redeemed.

Payments on the Notes; Paying Agent and Registrar

If a Holder holds at least US$10.0 million in aggregate principal amount of Notes and has given wire transfer instructions to the Company and the Paying Agent at least 10 Business Days prior to the applicable payment date, the Company, or the Paying Agent on its behalf, will pay all principal, interest and premium, if any, on that Holder’s Notes in accordance with those instructions. All other payments on Notes will be made at the office or agency of the Paying Agent and Registrar within the City and State of New York unless the Company elects to make interest payments by check mailed to the Holders at their addresses set forth in the register of Holders; provided that all payments of principal, premium, if any, and interest, with respect to the Global Notes registered in the name of or

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held by DTC or its nominee will be made by wire transfer of immediately available funds to the account specified by DTC.

The principal of and interest on the Notes will be payable in U.S. dollars or in such other coin or currency of the United States as at the time of payment is legal tender for the payment of public and private debts.

The Trustee will initially act as Paying Agent and Registrar. The Company may change the Paying Agent or Registrar without prior notice to the Holders, and the Company or any of its Subsidiaries may act as Paying Agent or Registrar. However, for so long as any Notes are listed on the Irish Stock Exchange and its rules so require, we will deliver notice of any such change to the Companies Announcement Office in Dublin.

Note Guarantees

General

Under the Indenture, the Initial Guarantors will jointly and severally agree to guarantee the due and punctual payment of all amounts payable under the Notes and the Indenture, including principal, premium, if any, and interest; provided that the Note Guarantee of Casa Grande with respect to amounts due on the Notes, including principal, interest, premium, if any, and any other amounts, will be limited to an initial amount equal to US$162,500,000. The Indenture will require any Restricted Subsidiary that Guarantees Indebtedness of the Company or any Guarantor to provide a Note Guarantee. Please see the section entitled “―Future Note Guarantees” below.

In the event that the Company acquires or redeems any Notes and such Notes are no longer considered outstanding under the Indenture, the amount of Casa Grande’s Note Guarantee will be reduced on a proportional basis.

Each Guarantor that makes a payment or distribution under its Note Guarantee will be entitled to contribution from any other Guarantor.

In addition to Casa Grande’s partial guarantee, the Indenture will limit the obligations of each Guarantor under its Note Guarantee to an amount not to exceed the maximum amount that can be guaranteed by such Guarantor by law or without resulting in its obligations under its Note Guarantee being voidable or unenforceable under applicable laws relating to fraudulent transfer, or under similar laws affecting the rights of creditors generally. By virtue of these limitations, a Guarantor’s obligation under its Note Guarantee could be significantly less than amounts payable with respect to the Notes and the Indenture, or a Guarantor may have effectively no obligation under its Note Guarantee.

We cannot assure you that the above limitation will protect the Note Guarantees from fraudulent transfer challenges or, if it does, that the remaining amount due and collectible under the Note Guarantees would suffice, if necessary, to pay the Notes in full when due. In a recent Florida bankruptcy case, this kind of provision was found to be unenforceable and, as a result, the subsidiary guarantees in that case were found to be fraudulent conveyances. We do not know if that case will be followed if there is litigation on this point under the Indenture. However, if it is followed, the risk that the Note Guarantees will be found to be fraudulent conveyances will be significantly increased.

Future Note Guarantees

If the Company or any Restricted Subsidiary acquires or creates any Significant Subsidiary on or after the Issue Date, then that newly acquired or created Significant Subsidiary must become a Guarantor and execute a supplemental indenture and deliver an Opinion of Counsel to the Trustee; provided that (i) such Significant Subsidiary’s Note Guarantee of the Company’s obligations under the Notes and the Indenture will be limited to the maximum amount that would not result in a breach or violation by such Significant Subsidiary of any provision of any agreement to which it is party existing at the time of such acquisition or creation; provided, further, that such provision was not adopted in connection with, or in contemplation of, such acquisition or creation or to avoid guaranteeing the Notes, and (ii) such Significant Subsidiary shall not be required to execute any such supplemental indenture if the execution or enforcement of such supplemental indenture and the resultant Note Guarantee

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thereunder is prohibited by, or in violation of, any applicable law to which such Significant Subsidiary is subject and the Company has delivered to the Trustee an Opinion of Counsel to that effect. Notwithstanding the foregoing, if at the time of such acquisition or creation, such Significant Subsidiary has no Indebtedness, such Significant Subsidiary shall not be required to become a Guarantor or execute any such supplemental indenture; provided that if at any time after such acquisition or creation, such Significant Subsidiary Incurs any Indebtedness, at the time of such Incurrence such Significant Subsidiary must become a Guarantor and execute a supplemental indenture and deliver an Opinion of Counsel to the Trustee in accordance with the preceding sentence.

The Company will not permit any Restricted Subsidiary, directly or indirectly, to Guarantee any Indebtedness of the Company or any Guarantor unless such Restricted Subsidiary (a) is a Guarantor or (b) within 10 days executes and delivers to the Trustee an Opinion of Counsel and a supplemental indenture providing for the Guarantee of the payment of the Notes by such Restricted Subsidiary, which Guarantee will rank senior in right of payment to or equally in right of payment with such Subsidiary’s Guarantee of such other Indebtedness.

Release of the Note Guarantees

A Note Guarantee of a Guarantor will be automatically and unconditionally released (and thereupon shall terminate and be discharged and be of no further force and effect):

(1) in connection with any sale or other disposition (including by merger or otherwise) of Capital Stock of the Guarantor after which such Guarantor is no longer a Subsidiary of the Company, if the sale of all such Capital Stock of that Guarantor complies with the applicable provisions of the Indenture;

(2) if the Company properly designates the Guarantor as an Unrestricted Subsidiary under the Indenture;

(3) solely in the case of a Note Guarantee created pursuant to the second paragraph of the covenant described under “—Future Note Guarantees,” upon the release or discharge of the Guarantee that resulted in the creation of such Note Guarantee pursuant to that covenant, except a discharge or release by or as a result of payment under such Guarantee;

(4) upon a Legal Defeasance or satisfaction and discharge of the Indenture that complies with the provisions under “—Legal Defeasance and Covenant Defeasance” or “—Satisfaction and Discharge;”

(5) upon payment in full of the aggregate principal amount of all Notes then outstanding and all other obligations under the Indenture and the Notes then due and owing; or

(6) upon the final liquidation or dissolution of such Guarantor; provided that no Event of Default occurs as a result thereof or has occurred or is continuing.

In addition, the Holders of at least seventy-five percent (75.0%) in principal amount of the Notes then outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes) may release any Guarantor from any of its obligations under its Note Guarantee or the Indenture.

Upon any occurrence giving rise to a release of a Note Guarantee as specified above, the Trustee, upon receipt of an Officers’ Certificate from the Company and an Opinion of Counsel each stating that all conditions precedent to such release have been satisfied, will execute any documents reasonably required in order to evidence or effect such release, discharge and termination in respect of such Note Guarantee. Neither the Company nor any Guarantor will be required to make a notation on the Notes to reflect any Note Guarantee or any such release, termination or discharge. For so long as any Notes are listed on the Irish Stock Exchange and its rules so require, we will deliver notice of any such release, termination or discharge of a Note Guarantee to the Companies Announcement Office in Dublin.

Optional Redemption

At any time prior to August 2, 2015, the Company may redeem up to 35% of the aggregate principal amount of Notes issued under the Indenture (including any Additional Notes) at a redemption price of 106.375% of the principal amount thereof, plus accrued and unpaid interest thereon to the redemption date, subject to the rights of

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Holders of Notes on the relevant record date to receive interest due on the relevant interest payment date, with the net cash proceeds of one or more Equity Offerings; provided that:

(1) at least 65% of the aggregate principal amount of Notes issued under the Indenture (including any Additional Notes) remains outstanding immediately after the occurrence of such redemption (excluding Notes held by the Company or its Affiliates); and

(2) the redemption must occur within 90 days of the date of the closing of such Equity Offering.

Subject to the minimum float condition (as defined below), at any time prior to August 2, 2017, the Company may redeem all or part of the Notes at a redemption price equal to the sum of (i) 100% of the principal amount thereof, plus (ii) the Applicable Premium as of the date of redemption, plus (iii) accrued and unpaid interest to the date of redemption, subject to the rights of Holders of Notes on the relevant record date to receive interest due on the relevant interest payment date.

Subject to the minimum float condition, on or after August 2, 2017, the Company may redeem all or a part of the Notes, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest thereon, to the applicable redemption date, subject to the rights of Holders of Notes on the relevant record date to receive interest due on the relevant interest payment date, if redeemed during the twelve-month period beginning on August 2 of the years indicated below:

Year Percentage 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103.188% 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102.125% 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101.063% 2020 and thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.000%

If less than all of the Notes are to be redeemed at any time, the Trustee will select Notes for redemption as follows:

(1) in compliance with the requirements of the principal national securities exchange, if any, on which the Notes are listed; or

(2) if the Notes are not so listed, on a pro rata basis, by lot or by such other method as the Trustee deems fair and appropriate.

No Notes of US$100,000 or less will be redeemed in part. Notices of redemption will be mailed by first class mail, at least 30 but not more than 60 days before the redemption date, to each Holder of Notes to be redeemed at its registered address (with a copy to the Trustee). For so long as any Notes are listed on the Irish Stock Exchange, we will inform the Irish Stock Exchange of the principal amount of the Notes that have not been redeemed in connection with any redemption. Notices of redemption may not be conditional.

If any Note is to be redeemed in part only, the notice of redemption that relates to that Note will state the portion of the principal amount thereof to be redeemed. At least US$100,000,000 in aggregate principal amount of the Notes issued under the Indenture (not including any Notes held by the Company or any of its Affiliates) must remain outstanding after any redemption of the Notes in part but not in whole (the “minimum float condition”), except with respect to any redemption pursuant to the first paragraph of this “Optional Redemption” section. A new Note in principal amount equal to the unredeemed portion of the original Note will be issued in the name of the Holder thereof upon cancellation of the original Note. Notes called for redemption become due on the date fixed for redemption. On and after the redemption date, interest will cease to accrue on Notes or portions thereof called for redemption.

Optional Tax Redemption

The Notes will be redeemable at the Company’s option, in whole but not in part, at 100% of their outstanding principal amount plus accrued and unpaid interest to the date of redemption and any Additional Amounts (as defined under “—Additional Amounts”) payable with respect thereto, only if:

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(1) on the next interest payment date the Company would, for reasons outside of its control, be obligated to pay Additional Amounts in excess of the Additional Amounts that it would pay if payments in respect of the Notes were subject to deduction or withholding at a rate of 4.99% generally (excluding any value added taxes) determined without regard to any interest, fees, penalties or other additions to tax, as a result of any change in, or amendment to, the laws or regulations of any Taxing Jurisdiction (as defined under “—Additional Amounts”) or any authority or agency thereof or therein having power to tax, or any change in, or a pronouncement by competent authorities of the relevant Taxing Jurisdiction with respect to, the official application or official interpretation of such laws or regulations, which change, amendment or pronouncement occurs after the date of the Indenture (or, in the case of any withholding taxes imposed by the jurisdiction of the paying agent, after the date of appointment of such paying agent, and, in the case of any successor to the Company pursuant to the covenant described under the caption “Certain Covenants—Merger, Consolidation or Sale of Assets”, after the date of such succession); and

(2) such obligation cannot be avoided by the Company taking reasonable measures available to it; provided that for this purpose reasonable measures shall not include any change in its jurisdiction of organization or location of its principal executive office. For the avoidance of doubt, reasonable measures may include a change in the jurisdiction of the paying agent, provided that such change shall not require the Company to incur material additional costs or legal or regulatory burdens.

No such notice of redemption will be given earlier than 30 days prior to the earliest date on which the Company would be obligated to pay such Additional Amounts if a payment in respect of the Notes were then due.

Prior to the giving of any notice of redemption of the Notes as described under “—Optional Redemption”, the Company must deliver to the Trustee an Officers’ Certificate confirming that it is entitled to exercise such right of redemption. The Company will also deliver an Opinion of Counsel of recognized standing stating that it would be obligated to pay such Additional Amounts due to the changes in tax laws or regulations or changes in, or pronouncements with respect to, the official application or official interpretation of such laws or regulations. The Trustee will accept this certificate and opinion as sufficient evidence of the satisfaction of the conditions precedent set forth in clauses (1) and (2) above, in which event it will be conclusive and binding on the Holders.

Mandatory Redemption; Offers to Purchase; Open Market Purchases

The Company is not required to make any mandatory redemption or sinking fund payments with respect to the Notes. However, under certain circumstances, the Company may be required to offer to purchase the Notes as described under the captions “―Repurchase at the Option of Holders―Change of Control” and “―Repurchase at the Option of Holders―Asset Sales.” The Company and its Restricted Subsidiaries may at any time and from time to time purchase Notes in the open market or otherwise.

Repurchase at the Option of Holders

Change of Control

Unless the Company has previously or concurrently mailed a redemption notice with respect to all the outstanding Notes as described under “―Optional Redemption,” the Company must commence, within 30 days of the occurrence of a Change of Control Repurchase Event, and consummate an Offer to Purchase for all Notes then outstanding, at a purchase price in cash equal to 101% of the aggregate principal amount of the Notes repurchased plus accrued and unpaid interest thereon, to the date of repurchase, subject to the rights of Holders of Notes on the relevant record date to receive interest due on the relevant interest payment date.

Any future agreements to which the Company becomes a party may prohibit or limit, the Company from purchasing any Notes as a result of a Change of Control Repurchase Event. In the event a Change of Control Repurchase Event occurs at a time when the Company is prohibited from purchasing the Notes, the Company could seek the consent of its lenders to permit the purchase of the Notes or could attempt to refinance the borrowings that contain such prohibition. If the Company does not obtain such consent or repay such borrowings, the Company will remain prohibited from purchasing the Notes. In such case, the Company’s failure to purchase tendered Notes would constitute an Event of Default under the Indenture.

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The Company’s ability to pay cash to the Holders of the Notes following the occurrence of a Change of Control Repurchase Event may be limited by the Company’s then-existing financial resources. Sufficient funds may not be available when necessary to make any required repurchases.

The Change of Control Repurchase Event purchase feature of the Notes may in certain circumstances make more difficult or discourage a sale or takeover of the Company and, thus, the removal of incumbent management. The Change of Control Repurchase Event purchase feature is a result of negotiations between the Initial Purchasers and the Company. As of the Issue Date, the Company has no present intention to engage in a transaction involving a Change of Control, although it is possible that the Company could decide to do so in the future. Subject to the limitations discussed below, the Company could, in the future, enter into certain transactions, including acquisitions, refinancings or other recapitalizations, that would not constitute a Change of Control under the Indenture, but that could increase the amount of Indebtedness outstanding at such time or otherwise affect the Company’s capital structure or credit ratings. Restrictions on the Company’s and its Restricted Subsidiaries’ ability to Incur additional Indebtedness are contained in the covenants described under “Certain Covenants—Limitation on Indebtedness” and “Certain Covenants—Limitation on Liens.” Except for the limitations contained in such covenants, however, the Indenture will not contain any covenants or provisions that may afford Holders of the Notes protection in the event of a highly leveraged transaction.

The Company will not be required to make an Offer to Purchase upon a Change of Control Repurchase Event if a third party makes the Offer to Purchase in the manner, at the times and otherwise in compliance with the requirements set forth in the Indenture applicable to an Offer to Purchase made by the Company and purchases all Notes validly tendered and not withdrawn under such Offer to Purchase.

The definition of Change of Control includes a phrase relating to the direct or indirect sale, transfer, conveyance or other disposition of “all or substantially all” of the properties or assets of the Company and the Restricted Subsidiaries taken as a whole. Although there is a limited body of case law interpreting the phrase “substantially all,” there is no precise established definition of the phrase under applicable law. Accordingly, the ability of a Holder of Notes to require the Company to repurchase such Notes as a result of a sale, transfer, conveyance or other disposition of less than all of the assets of the Company and the Restricted Subsidiaries taken as a whole to another Person or group may be uncertain.

The Company will comply with Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder, to the extent such laws and regulations are applicable, in the event that the Company is required to repurchase Notes pursuant to an Offer to Purchase. To the extent that the provisions of any securities laws or regulations conflict with the provisions of the Indenture relating to an Offer to Purchase, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under such provisions of the Indenture by virtue of such conflict.

Asset Sales

The Company will not, and will not permit any Restricted Subsidiary to, consummate an Asset Sale unless:

(1) the Company (or the Restricted Subsidiary, as the case may be) receives consideration at the time of such Asset Sale at least equal to the Fair Market Value of the assets or Equity Interests issued or sold or otherwise disposed of; and

(2) at least 75% of the consideration therefor received by the Company or such Restricted Subsidiary is in the form of:

(a) Cash Equivalents (including any Cash Equivalents received from the conversion within 60 days of such Asset Sale of any securities, notes or other obligations received in consideration of such Asset Sale);

(b) Replacement Assets;

(c) any liabilities of the Company or any Restricted Subsidiary as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet (other than contingent liabilities, Indebtedness that is

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by its terms subordinated in right of payment to the Notes or any Note Guarantee and liabilities to the extent owed to the Company or any Affiliate of the Company) that are assumed by the transferee of any such assets or Equity Interests and for which the Company and all of the Restricted Subsidiaries have been validly released by all creditors in writing; or

(d) any combination of the consideration specified in clauses (a) to (c).

Within 365 days after the receipt of any Net Available Cash from an Asset Sale, the Company or a Restricted Subsidiary, as the case may be, may apply an amount equal to such Net Available Cash at its option:

(1) to repay (a) Indebtedness secured by such assets, (b) Indebtedness of a Restricted Subsidiary that is not a Guarantor (other than Indebtedness owed to the Company or another Restricted Subsidiary) or (c) the Notes or Indebtedness constituting Pari Passu Debt where (i) such Indebtedness has a final maturity date earlier than the Stated Maturity of the Notes or (ii) the rate of interest per annum payable with respect to such Indebtedness, as in effect (pursuant to the agreement governing such Indebtedness) on the date of such repayment, is greater than the rate of interest per annum payable with respect to the Notes; provided that all reductions of or offers to reduce Obligations under the Notes shall be made as provided under “—Optional Redemption” or by making an offer (in accordance with the provisions set forth below for an Offer to Purchase) to all Holders of Notes to purchase their Notes at 100% of the principal amount thereof plus accrued and unpaid interest to the date of purchase; provided, further, that if the Indebtedness repaid pursuant to this clause (1) is revolving credit Indebtedness, to correspondingly reduce commitments with respect thereto;

(2) to purchase Replacement Assets (or enter into a binding agreement to purchase such Replacement Assets; provided that (x) such purchase is consummated no later than the later of (i) the 360th day after such Asset Sale or (ii) 90 days after the date of such binding agreement and (y) if such purchase is not consummated within the period set forth in subclause (x), the Net Available Cash not so applied will be deemed to be Excess Proceeds (as defined below)); or

(3) to make an Offer to Purchase as described below.

The amount of such Net Available Cash required to be applied (or to be committed to be applied) during such 365 day period as set forth in the preceding paragraph and not applied (or committed to be applied) as so required by the end of such period shall constitute “Excess Proceeds.” If, as of the first day of any calendar month, the aggregate amount of Excess Proceeds totals at least US$20.0 million, the Company must commence, not later than the fifteenth business day of such month, and consummate an Offer to Purchase, from the Holders and all holders of other Pari Passu Debt containing provisions similar to those set forth in the Indenture with respect to offers to purchase with the proceeds of sales of assets, the maximum principal amount of Notes and such other Pari Passu Debt that may be purchased out of the Excess Proceeds. The offer price in any such Offer to Purchase will be equal to 100% of the principal amount (or accreted value, if applicable) of the Notes and such other Pari Passu Debt plus accrued and unpaid interest to the date of purchase, subject to the rights of Holders of Notes on the relevant record date to receive interest on the relevant interest payment date, and will be payable in cash. To the extent that any Excess Proceeds remain after consummation of an Offer to Purchase pursuant to this “Asset Sales” covenant, the Company may use those Excess Proceeds for any purpose not otherwise prohibited by the Indenture, and those Excess Proceeds shall no longer constitute “Excess Proceeds”.

The Company will comply with Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder, to the extent such laws and regulations are applicable, in the event that the Company is required to repurchase Notes pursuant to an Offer to Purchase. To the extent that the provisions of any securities laws or regulations conflict with the provisions of the Indenture relating to an Offer to Purchase, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under such provisions of the Indenture by virtue of such conflict.

Any future agreement to which the Company becomes a party may prohibit the Company from purchasing any Notes and also provide that certain asset sale events with respect to the Company would constitute a default under such agreement. In the event an Asset Sale occurs at a time when the Company is prohibited from purchasing Notes, the Company could seek the consent of its lenders to the purchase of Notes or could attempt to refinance the

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borrowings that contain such prohibition. If the Company does not obtain such a consent or repay such borrowings, the Company will remain prohibited from purchasing Notes. In such case, the Company’s failure to purchase tendered Notes would constitute an Event of Default under the Indenture, which would, in turn, constitute a default under such other agreements.

Additional Amounts

All payments made under or with respect to the Notes or the Note Guarantees will be made without withholding or deduction for or on account of any present or future taxes, duties, levies, or other governmental charges and any interest, penalties or other liabilities with respect thereto (collectively, “Taxes”) imposed or assessed by or on behalf of any jurisdiction in which the Company or any Guarantor is organized, engaged in business or resident for tax purposes, or from or through which payment under or with respect to the Notes or the Note Guarantees is made or, in each case, any political subdivision thereof (each, a “Taxing Jurisdiction”) or any authority or agency therein or thereof having the power to tax, unless the withholding or deduction is required by applicable law. If the Company or any Guarantor is required to make any withholding or deduction of this nature, it will pay Holders the additional amounts (“Additional Amounts”) necessary to ensure that they receive the same amount as they would have received without this withholding or deduction.

The Company or the relevant Guarantor will not, however, pay any Additional Amounts with respect to any Note in connection with any Tax that is imposed:

(1) because the Holder has some present or former connection with the Taxing Jurisdiction other than merely holding or owning the Note, the receipt of payments on the Note or enforcing rights under the Notes;

(2) because the Holder has failed to present the Note for payment (where presentation is required by the terms of the Notes) within 30 days from when Holders receive notice in accordance with the Indenture that the payment is available (except to the extent that the Holder would have been entitled to Additional Amounts had the Note been presented on the last day of such 30-day period);

(3) because the Holder presents the Note for payment in a member state of the European Union (where presentation is required by the terms of the Notes) and such tax could have been avoided had the Holder presented the Note for payment in another member state of the European Union;

(4) in respect of any estate, inheritance, gift, sales, transfer, personal property tax or similar Tax;

(5) in respect of Taxes payable otherwise than by withholding from payment of principal of or interest or premium, if any, on the Notes;

(6) because of the Holder’s failure to comply with a written request of the Company or Guarantor, provided to the Holder at least 60 calendar days prior to the first payment date with respect to which the Company or Guarantor shall apply this clause (6), to provide information concerning such Holder’s nationality, residence, identity, connection with any Taxing Jurisdiction or other similar information, if and to the extent that compliance would have reduced or eliminated any withholding or deduction as to which Additional Amounts would otherwise apply; provided, however, that in no event shall such Holder’s requirement to provide such information require the Holder to provide any materially more onerous information, documents or other evidence than would be required to be provided had such Holder been required to file U.S. Internal Revenue Service Forms W-8BEN, W-8ECI, W-8EXP and/or W-8IMY; or

(7) due to any combination of the preceding clauses (1) through (6).

In addition, we will pay and indemnify the Holders against any Peruvian value added tax that is imposed on a payment of interest on the Notes, except to the extent that such Peruvian value added tax is described in items (1) through (7) above.

All references in this offering memorandum to principal of or interest or premium, if any, on the Notes will include any Additional Amounts payable by the Company or the relevant Guarantor in respect of such principal, interest or premium.

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Certain Covenants

The Indenture contains, among others, the following covenants.

Changes in Covenants When Notes Rated Investment Grade

If on any date following the Issue Date (such date, a “Suspension Date”):

(1) the Notes are rated Investment Grade by two out of the three Rating Agencies; and

(2) no Default or Event of Default shall have occurred and be continuing (other than with respect to the covenants specifically listed under the following captions),

then, beginning on that day and subject to the provisions of the following paragraph, the covenants specifically listed under the following captions in this “Description of the Notes” will be suspended:

(1) “Repurchase at the Option of Holders—Asset Sales”;

(2) “—Limitation on Restricted Payments”;

(3) “—Limitation on Indebtedness”;

(4) “—Limitation on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries”;

(5) “—Limitation on Transactions with Affiliates”;

(6) “—Designation of Restricted and Unrestricted Subsidiaries”; and

(7) clauses (1) (to the extent that a Default or an Event of Default exists by reason of one or more of the covenants specifically listed in this paragraph) and (3) of the covenant described below under the caption “—Merger, Consolidation or Sale of Assets”.

During any period that the foregoing covenants have been suspended, the Company’s Board of Directors may not designate any of its Subsidiaries as Unrestricted Subsidiaries pursuant to the covenant described below under the caption “— Designation of Restricted and Unrestricted Subsidiaries” or the definition of “Unrestricted Subsidiary”. The Company will provide written notice to the Trustee of the occurrence of any Suspension Date.

Notwithstanding the foregoing, if the rating assigned by two out of the three Rating Agencies should subsequently decline to below Investment Grade, the Company shall provide written notice to the Trustee and the foregoing covenants will be reinstated as of and from the date of such rating decline and any actions taken, or omitted to be taken, before such rating decline that would have been prohibited had the foregoing covenants been in effect shall not form the basis for a Default or an Event of Default.

Calculations under the reinstated “Limitation on Restricted Payments” covenant will be made as if the “Limitation on Restricted Payments” covenant had been in effect since the Issue Date except that no Default or Event of Default will be deemed to have occurred solely by reason of a Restricted Payment made while that covenant was suspended. There can be no assurance that the Notes will ever achieve an Investment Grade rating or that any such rating will be maintained.

Limitation on Restricted Payments

(A) The Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly, take any of the following actions (each, a “Restricted Payment”):

(1) declare or pay any dividend or make any other payment or distribution with respect to any of the Company’s or any Restricted Subsidiary’s Equity Interests (including, without limitation, any payment in connection with any merger or consolidation involving the Company or any Restricted Subsidiary) or to the direct or indirect holders of the Company’s or any Restricted Subsidiary’s Equity Interests in

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their capacity as such (other than dividends, payments or distributions (x) payable in Equity Interests (other than Disqualified Stock) of the Company or (y) to the Company or a Restricted Subsidiary);

(2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation involving the Company or any Restricted Subsidiary) any Equity Interests of the Company held by any Person (other than by a Restricted Subsidiary) or any Preferred Stock of a Restricted Subsidiary;

(3) call for redemption or make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value, prior to the Stated Maturity thereof, any Indebtedness that is subordinated in right of payment to the Notes or any Note Guarantee except (a) in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of such payment, purchase or other acquisition or (b) intercompany Indebtedness permitted to be incurred pursuant to clause (5) of the second paragraph of the covenant described below under the caption “—Limitation on Indebtedness;” or

(4) make any Investment (other than a Permitted Investment) in any Person,

unless, at the time of and after giving pro forma effect to such Restricted Payment:

(1) no Default or Event of Default will have occurred and be continuing or would occur as a consequence thereof; and

(2) the Company could Incur at least US$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test and the Consolidated Leverage Ratio test set forth in the first paragraph of the covenant described below under the caption “—Limitation on Indebtedness;” and

(3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and the Restricted Subsidiaries after the Issue Date (excluding Restricted Payments permitted by clauses (2), (3), (4), (5), (6) and (10) of the next succeeding paragraph (B)), is less than the sum, without duplication, of:

(a) 50% of the Consolidated Net Income on a cumulative basis during the period (taken as one accounting period) beginning on April 1, 2012 and ending on the last day of the Company’s last fiscal quarter ending prior to the date of such proposed Restricted Payment for which internal financial statements are available (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit), plus

(b) the aggregate net cash proceeds received by the Company since the Issue Date as a contribution to its common equity capital or from the issue or sale of Equity Interests (other than Disqualified Stock) of the Company and the amount of reduction of Indebtedness of the Company or its Restricted Subsidiaries that has been converted into or exchanged for such Equity Interests (other than Equity Interests sold to, or Indebtedness held by, a Subsidiary of the Company), plus

(c) with respect to Investments (other than Permitted Investments) made by the Company and the Restricted Subsidiaries after the Issue Date, an amount equal to the net reduction in such Investments in any Person (except, in each case, to the extent any such amount is included in the calculation of Consolidated Net Income), resulting from repayment to the Company or any Restricted Subsidiary of loans or advances or from the receipt of net cash proceeds from the sale of any such Investment, from the release of any Guarantee (except to the extent any amounts are paid under such Guarantee) or from redesignations of Unrestricted Subsidiaries as Restricted Subsidiaries, not to exceed, in each case, the amount of such Investments previously made by the Company or any Restricted Subsidiary in such Person.

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(B) The preceding provisions will not prohibit:

(1) the payment of any dividend within 60 days after the date of declaration thereof, if at said date of declaration such payment would have complied with the provisions of the Indenture, and the redemption of any Indebtedness that is subordinated in right of payment to the Notes or any Note Guarantees within 60 days after the date on which notice of such redemption was given, if at said date of the giving of such notice, such redemption would have complied with the provisions of the Indenture;

(2) the payment of any dividend by a Restricted Subsidiary to all the holders of its Common Stock on a pro rata basis;

(3) any Restricted Payment in exchange for, or out of the net cash proceeds of a substantially concurrent contribution to the common equity of the Company or a substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests (other than Disqualified Stock) of the Company; provided that the amount of any such net cash proceeds that are utilized for such Restricted Payment will be excluded from clause (3)(b) of the preceding paragraph (A);

(4) the redemption, repurchase, defeasance or other acquisition or retirement for value of Indebtedness that is subordinated in right of payment to the Notes or the Note Guarantees in exchange for, or with the net cash proceeds from a substantially concurrent Incurrence (other than to a Subsidiary of the Company) of, Permitted Refinancing Indebtedness for such Indebtedness;

(5) the repurchase of Capital Stock deemed to occur upon the exercise of options or warrants to the extent that such Capital Stock represents all or a portion of the exercise price thereof and applicable withholding taxes, if any;

(6) the payment of cash in lieu of fractional Equity Interests pursuant to the exchange or conversion of any exchangeable or convertible securities; provided, that such payment shall not be for the purpose of evading the limitations of this covenant (as determined by the Board of Directors of the Company in good faith);

(7) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company held by any current or former employee or director of the Company (or any Subsidiaries) pursuant to the terms of any employee equity subscription agreement, stock option agreement or similar agreement entered into in the ordinary course of business; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests in any calendar year will not exceed US$5.0 million (with unused amounts in any calendar year being carried over to succeeding years subject to a maximum of US$10.0 million in any calendar year);

(8) the declaration and payment of dividends to holders of any class or series of Disqualified Stock of the Company or any Restricted Subsidiary issued in accordance with the covenant described under “Limitation on Indebtedness”, and provided that (i) such dividends constitute “Fixed Charges” and (ii) with respect to Disqualified Stock that is not convertible or exchangeable into Pari Passu Debt, no Event of Default has occurred and is continuing or would be caused thereby;

(9) in connection with a Change of Control Repurchase Event or an Offer to Purchase required by the covenant described above under the caption “—Repurchase at the Option of Holders—Asset Sales,” repurchases of Subordinated Indebtedness at a purchase price not greater than (a) 101% of the principal amount or accreted value, as applicable, of such Subordinated Indebtedness and accrued and unpaid interest thereon in the event of a Change of Control Repurchase Event or (b) 100% of the principal amount or accreted value, as applicable, of such Subordinated Indebtedness and accrued and unpaid interest thereon in the event of an Offer to Purchase required by the covenant described above under the caption “—Repurchase at the Option of Holders—Asset Sales,” in connection with any change of control offer or asset sale offer required by the terms of such Subordinated Indebtedness, but only if: (i) in the case of a Change of Control Repurchase Event, the Company has first complied with and fully satisfied its obligations under the covenant described above under the caption “—

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Repurchase at the Option of Holders—Change of Control” or (ii) in the case of an Offer to Purchase required by the covenant described above under the caption “—Repurchase at the Option of Holders—Asset Sales,” the Company has first complied with and fully satisfied its obligations under the covenant described above under the caption “—Repurchase at the Option of Holders—Asset Sales”; and

(10) so long as no Event of Default has occurred and is continuing or would be caused thereby, other Restricted Payments in an aggregate amount not to exceed US$15.0 million since the Issue Date.

The amount of all Restricted Payments (other than cash) will be the Fair Market Value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued to or by the Company or such Subsidiary, as the case may be, pursuant to the Restricted Payment.

Limitation on Indebtedness

The Company will not, and will not permit any Restricted Subsidiary to, Incur any Indebtedness; provided, however, that the Company or any Restricted Subsidiary may Incur Indebtedness if,

(A) after giving effect to the Incurrence of such Indebtedness and the receipt and application of the proceeds therefrom, the Fixed Charge Coverage Ratio for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding the date on which such additional Indebtedness is Incurred would be at least 2.50 to 1.00, and

(B) on the date of such Incurrence and after giving effect to the Incurrence of such Indebtedness and the receipt and application of the proceeds therefrom, the Consolidated Leverage Ratio would be equal to or less than 3.50 to 1.00.

The first paragraph of this covenant will not prohibit the Incurrence of any of the following items of Indebtedness:

(1) Existing Indebtedness;

(2) Indebtedness of the Company and the Guarantors represented by the Notes (other than Additional Notes) and the related Note Guarantees;

(3) Indebtedness of the Company or any Restricted Subsidiary represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, Incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of the Company or such Restricted Subsidiary (including any reasonably related fees or expenses Incurred in connection with such acquisition, construction or improvement), in an aggregate amount, including all Permitted Refinancing Indebtedness Incurred to refund, refinance or replace any Indebtedness Incurred pursuant to this clause (3), not to exceed the greater of US$25.0 million and 2.0% of Consolidated Net Tangible Assets at any time outstanding;

(4) Permitted Refinancing Indebtedness of the Company or any Restricted Subsidiary in exchange for, or the net cash proceeds of which are used to refund, refinance or replace Indebtedness that was permitted by the Indenture to be Incurred under the first paragraph of this covenant or clauses (1), (2), (3), (4), or (13) of this paragraph;

(5) Indebtedness of the Company or any Restricted Subsidiary owing to and held by the Company or any Restricted Subsidiary; provided, however, that:

(a) if the Company or any Guarantor is the obligor on such Indebtedness, such Indebtedness must be unsecured and, unless held by the Company or any Guarantor, expressly subordinated in right of payment to the prior payment in full in cash of all Obligations with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; provided that if the Company or any Guarantor is the obligor on such Indebtedness and such Indebtedness is not expressly subordinated as provided in this subclause (a), any event that results in such Indebtedness being held by any Person

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other than the Company or any Guarantor will be deemed, in each case, to constitute an Incurrence of such Indebtedness by the Company or such Guarantor, as the case may be, that was not permitted by this clause (5); and

(b) any event that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary (except for any pledge of such Indebtedness constituting a Permitted Lien until the pledgee commences actions to foreclose on such Indebtedness) will be deemed, in each case, to constitute an Incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (5);

(6) the Guarantee by the Company or any Restricted Subsidiary of Indebtedness of the Company or a Restricted Subsidiary that was permitted to be Incurred by another provision of this covenant;

(7) Indebtedness of the Company or any Restricted Subsidiary under Hedging Obligations that are Incurred for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes;

(8) Indebtedness of the Company or any Restricted Subsidiary arising from agreements providing for indemnification, adjustment of purchase price or similar obligations, or Guarantees or letters of credit, surety bonds or performance bonds securing any obligations of the Company or any Restricted Subsidiary pursuant to such agreements, in any case Incurred in connection with the disposition of any business, assets or Capital Stock of a Restricted Subsidiary (other than Guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Capital Stock of a Restricted Subsidiary for the purpose of financing such acquisition), so long as the amount does not exceed the gross proceeds actually received by the Company or any Restricted Subsidiary in connection with such disposition;

(9) Indebtedness of the Company or any Restricted Subsidiary arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business, provided, however, that such Indebtedness is extinguished within five Business Days of its Incurrence;

(10) Indebtedness of the Company or any Restricted Subsidiary constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including letters of credit in respect of workers’ compensation claims, or other Indebtedness with respect to reimbursement obligations regarding workers’ compensation claims; provided that, upon the drawing of such letters of credit or the Incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or Incurrence;

(11) Indebtedness of the Company or any Restricted Subsidiary to the extent the net cash proceeds thereof are promptly deposited to defease or to satisfy and discharge the Notes as described under “—Legal Defeasance and Covenant Defeasance” or “—Satisfaction and Discharge”;

(12) Indebtedness of any Person that is acquired by or merged into the Company or any Restricted Subsidiary in accordance with the terms of the Indenture; provided that such Indebtedness was not Incurred or issued, as applicable, in connection with, or in contemplation of, such acquisition or merger; provided, further, that, in each case, after giving effect to such acquisition or merger, (i) the Company would be permitted to Incur at least US$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test and the Consolidated Leverage Ratio test set forth in the first paragraph of this covenant or (ii) the Company would have a Consolidated Leverage Ratio that is equal to or less than the Company’s Consolidated Leverage Ratio immediately prior to such acquisition or merger and the Company would have a Fixed Charge Coverage Ratio that is equal to or greater than the Company’s Fixed Charge Coverage Ratio immediately prior to such acquisition or merger; and

(13) additional Indebtedness of the Company or any Restricted Subsidiary in an aggregate amount at any one time outstanding, including all Permitted Refinancing Indebtedness Incurred to refund, refinance or

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replace any Indebtedness Incurred pursuant to this clause (13), not to exceed the greater of US$125.0 million and 10.0% of Consolidated Net Tangible Assets.

For purposes of determining compliance with this covenant, in the event that any proposed Indebtedness meets the criteria of more than one of the categories described in clauses (1) through (13) above, or is entitled to be Incurred pursuant to the first paragraph of this covenant, the Company will be permitted to classify, and may later reclassify, such item of Indebtedness or a part thereof in any manner that complies with this covenant.

For purposes of determining compliance with any U.S. dollar-denominated restriction on the incurrence of Indebtedness, the U.S. Dollar Equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred (or first committed, in the case of revolving credit debt); provided that if such Indebtedness is incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced.

The principal amount of any Indebtedness incurred to refinance other Indebtedness, if incurred in a different currency from the Indebtedness being refinanced, shall be calculated based on the currency exchange rate applicable to the currencies in which such respective Indebtedness is denominated that is in effect on the date of such refinancing.

The Company will not Incur any Indebtedness that is subordinate in right of payment to any other Indebtedness of the Company unless it is subordinate in right of payment to the Notes at least to the same extent. The Company will not permit any Guarantor to Incur any Indebtedness that is subordinate in right of payment to any other Indebtedness of such Guarantor unless it is subordinate in right of payment to such Guarantor’s Note Guarantee at least to the same extent. For purposes of the Indenture, no Indebtedness will be deemed to be subordinated in right of payment to any other Indebtedness of the Company or any Guarantor, as applicable, solely by reason of any Liens or Guarantees arising or created in respect thereof or by virtue of the fact that the holders of any secured Indebtedness have entered into intercreditor agreements giving one or more of such holders priority over the other holders in the collateral held by them.

Limitation on Liens

The Company will not, and will not permit any Restricted Subsidiary to, create, incur, assume or otherwise cause or suffer to exist or become effective any Lien of any kind (other than Permitted Liens) upon any of their property or assets, now owned or hereafter acquired, unless all payments due under the Indenture and the Notes or Note Guarantees are secured by a Lien on such property or assets on an equal and ratable basis with the obligations so secured (or, in the case of Indebtedness subordinated to the Notes or the related Note Guarantees, senior in priority thereto, with the same relative priority as the Notes will have with respect to such subordinated Indebtedness) until such time as such obligations are no longer secured by a Lien.

Limitation on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries

The Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly, create or permit to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary to:

(1) pay dividends or make any other distributions on its Capital Stock (or with respect to any other interest or participation in, or measured by, its profits) to the Company or any Restricted Subsidiary (it being understood that the priority of any Preferred Stock in receiving dividends or liquidating distributions prior to dividends or liquidating distributions being paid on Common Stock shall not be deemed a restriction on the ability to make distributions on Capital Stock);

(2) pay any liabilities owed to the Company or any Restricted Subsidiary;

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(3) make loans or advances to the Company or any Restricted Subsidiary (it being understood that the subordination of loans or advances made to the Company or any Restricted Subsidiary to other Indebtedness Incurred by the Company or any Restricted Subsidiary shall not be deemed a restriction on the ability to make loans or advances); or

(4) transfer any of its properties or assets to the Company or any Restricted Subsidiary.

However, the preceding restrictions will not apply to encumbrances or restrictions:

(1) existing under, by reason of or with respect to Existing Indebtedness or any other agreements in effect on the Issue Date and any amendments, modifications, restatements, renewals, extensions, supplements, refundings, replacements or refinancings thereof, provided that the encumbrances and restrictions in any such amendments, modifications, restatements, renewals, extensions, supplements, refundings, replacements or refinancings, taken as a whole, are not materially more restrictive than those contained in the Existing Indebtedness or such other agreements, as the case may be, as in effect on the Issue Date;

(2) set forth in the Indenture, the Notes and the Note Guarantees;

(3) existing under or by reason of applicable law, rule, regulation, order or decree;

(4) with respect to any Person or the property or assets of a Person acquired by the Company or any Restricted Subsidiary existing at the time of such acquisition and not incurred in connection with or in contemplation of such acquisition, which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired, and any amendments, modifications, restatements, renewals, extensions, supplements, refundings, replacements or refinancings thereof, provided that the encumbrances and restrictions in any such amendments, modifications, restatements, renewals, extensions, supplements, refundings, replacements or refinancings, taken as a whole, are not materially more restrictive than those in effect on the date of the acquisition;

(5) that restrict in a customary manner the subletting, assignment or transfer of any property or asset that is a lease, license, conveyance or contract or similar property or asset;

(6) existing by virtue of any transfer of, agreement to transfer, option or right with respect to, or Lien on, any property or assets of the Company or any Restricted Subsidiary not otherwise prohibited by the Indenture;

(7) arising or agreed to in the ordinary course of business, not relating to any Indebtedness, and that do not, individually or in the aggregate, detract from the value of property or assets of the Company or any Restricted Subsidiary in any manner material to the Company or any Restricted Subsidiary;

(8) existing under, by reason of or with respect to any agreement for the sale or other disposition of all or substantially all of the Capital Stock of, or property and assets of, a Restricted Subsidiary that restrict distributions or transfer by that Restricted Subsidiary pending such sale or other disposition;

(9) on cash or other deposits or net worth, which encumbrances or restrictions are imposed by customers or suppliers or required by insurance, surety or bonding companies, in each case, under contracts entered into in the ordinary course of business;

(10) on the transfer of assets subject to any Permitted Lien;

(11) arising from customary restrictions imposed on the transfer of copyrighted or patented materials;

(12) arising from customary provisions in joint venture agreements and other similar agreements entered into in the ordinary course of business and which the Board of Directors of the Company determines in good faith will not adversely affect the Company’s ability to make payments of principal or interest on the Notes; and

(13) with respect to any agreement governing Indebtedness of any Guarantor that is permitted to be Incurred by the covenant described under the caption “—Limitation on Indebtedness” above and any extensions,

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renewals, replacements, amendments or refinancings thereof permitted to be Incurred by the covenant described under the caption “—Limitation on Indebtedness” above.

Maintenance of Priority

The Company shall ensure that its payment obligations with respect to the Notes will constitute its direct, unconditional and general senior unsecured obligations and will rank senior or pari passu (except for Indebtedness that is subordinated in right of payment to the Notes) in priority of payment and in all other respects with respect to its future Indebtedness, except for certain obligations that in case of the Company’s insolvency or bankruptcy are granted preferential treatment pursuant to the laws of Peru.

Each Guarantor shall ensure that its payment obligations with respect to its Note Guarantee will constitute its direct, unconditional and general senior unsecured obligations and will rank senior or pari passu (except for Indebtedness that is subordinated in right of payment to its Note Guarantee) in priority of payment and in all other respects with respect to its future Indebtedness, except for certain obligations that in case of such Guarantor’s insolvency or bankruptcy are granted preferential treatment pursuant to the laws of Peru.

Merger, Consolidation or Sale of Assets

The Company. The Company will not, directly or indirectly: (1) consolidate or merge with or into another Person (whether or not the Company is the surviving Person), or (2) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties and assets of the Company and the Restricted Subsidiaries, taken as a whole, in one or more related transactions, to another Person, unless:

(1) immediately after giving effect to such transaction, no Default or Event of Default exists;

(2) either:

(a) the Company is the surviving corporation; or

(b) the Person formed by or surviving any such consolidation or merger (if other than the Company) or to which such sale, assignment, transfer, conveyance or other disposition will have been made (the “Surviving Entity”) (i) is a Person organized or existing under the laws of Peru, the United States of America, any state thereof or the District of Columbia or any other country that is a member country of the European Union, provided that in the case where such Person is not a corporation, a co-obligor of the Notes is a corporation and (ii) assumes all the obligations of the Company under the Notes and the Indenture pursuant to a supplemental indenture;

(3) immediately after giving effect to such transaction on a pro forma basis, the Company or the Surviving Entity, as the case may be, (i) will be permitted to Incur at least US$1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test and the Consolidated Leverage Ratio test set forth in the first paragraph of the covenant described above under the caption “—Limitation on Indebtedness” or (ii) would have a Consolidated Leverage Ratio that is equal to or less than the Company’s Consolidated Leverage Ratio immediately prior to such transaction and would have a Fixed Charge Coverage Ratio that is equal to or greater than the Company’s Fixed Charge Coverage Ratio immediately prior to such transaction;

(4) each Guarantor, unless such Guarantor is the Person with which the Company has entered into a transaction under this covenant, will have confirmed to the Trustee in writing that its Note Guarantee will apply to the obligations of the Company or the Surviving Entity in accordance with the Notes and the Indenture; and

(5) the Company delivers to the Trustee an Officers’ Certificate (attaching the arithmetic computation to demonstrate compliance with clause (3) above) and Opinion of Counsel, in each case stating that such transaction and such agreement comply with this covenant and that all conditions precedent provided for in the Indenture relating to such transaction have been complied with;

provided, however, that clause (3) above will not apply to any consolidation, merger, sale, assignment, transfer, conveyance or other disposition of assets between or among the Company and any Restricted Subsidiary.

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Upon any consolidation, merger, sale, assignment, transfer, conveyance or other disposition in accordance with this covenant, the Surviving Entity formed by such consolidation or into or with which the Company is merged or to which such sale, assignment, transfer, conveyance or other disposition is made will succeed to, and be substituted for (so that from and after the date of such consolidation, merger, sale, assignment, conveyance or other disposition, the provisions of the Indenture referring to the “Company” will refer instead to the Surviving Entity and not to the Company), and may exercise every right and power of, the Company under the Indenture and the Notes with the same effect as if such Surviving Entity had been named as the Company in the Indenture and the Notes.

In addition, the Company and the Restricted Subsidiaries may not, directly or indirectly, lease all or substantially all of the properties or assets of the Company and the Restricted Subsidiaries considered as one enterprise, in one or more related transactions, to any other Person.

Although there is a limited body of case law interpreting the phrase “all or substantially all,” there is no precise established definition of the phrase under applicable law. Accordingly, in certain circumstances there may be a degree of uncertainty as to whether a particular transaction would involve “all or substantially all” of the property or assets of a Person.

The Guarantors. A Guarantor will not, directly or indirectly: (1) consolidate or merge with or into another Person (whether or not such Guarantor is the surviving Person), or (2) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties and assets of the Guarantor, in one or more related transactions, to another Person, other than the Company or another Guarantor, unless:

(1) immediately after giving effect to that transaction, no Default or Event of Default exists; and

(2) either:

(a) the Guarantor is the surviving corporation, or the Person formed by or surviving any such consolidation or merger (if other than the Guarantor) or to which such sale, assignment, transfer, conveyance or other disposition which has been made (i) is organized or existing under the laws of the jurisdiction of the Guarantor’s organization or under the laws of Peru, the United States of America, any state thereof or the District of Columbia or any other country that is a member country of the European Union, (ii) agrees to pay any Additional Amounts that may be payable in respect of its jurisdiction of organization and (iii) assumes all the obligations of that Guarantor under the Indenture, including its Note Guarantee, pursuant to a supplemental indenture; or

(b) such sale, assignment, transfer, conveyance or other disposition or consolidation or merger complies with the covenant described above under the caption “—Repurchase at the Option of Holders—Asset Sales.”

Limitation on Transactions with Affiliates

The Company will not, and will not permit any Restricted Subsidiary to, directly or indirectly make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into, make, amend, renew or extend any transaction, contract, agreement, understanding, loan, advance or Guarantee with, or for the benefit of, any of their Affiliates (each, an “Affiliate Transaction”), unless:

(1) such Affiliate Transaction is on fair and reasonable terms that are no less favorable to the Company or the relevant Restricted Subsidiary than those that would have been obtained in a comparable arm’s-length transaction by the Company or such Restricted Subsidiary with a Person that is not an Affiliate of the Company or any Restricted Subsidiary; and

(2) the Company delivers to the Trustee:

(a) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of US$5.0 million, a Board Resolution set forth in an Officers’ Certificate certifying that such Affiliate Transaction or series of related Affiliate Transactions complies with this

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covenant and that such Affiliate Transaction or series of related Affiliate Transactions has been approved by a majority of the members of the Board of Directors of the Company; and

(b) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of US$20.0 million, an opinion issued by an independent accounting, appraisal or investment banking firm of international standing stating that such Affiliate Transaction or series of related Affiliate Transactions is fair to the Company or such Restricted Subsidiary from a financial point of view.

The following items will not be deemed to be Affiliate Transactions and, therefore, will not be subject to the provisions of the prior paragraph:

(1) transactions between or among the Company and/or its Restricted Subsidiaries;

(2) Restricted Payments that are permitted by the provisions of the Indenture described above under the caption “—Limitation on Restricted Payments;”

(3) any issuance or sale of Equity Interests (other than Disqualified Stock) of the Company;

(4) transactions pursuant to agreements or arrangements in effect on the Issue Date and described in this offering memorandum, or any amendment, modification, or supplement thereto or replacement thereof, as long as such agreement or arrangement, as so amended, modified, supplemented or replaced, taken as a whole, is not materially more disadvantageous to the Company and the Restricted Subsidiaries than the agreement or arrangement in existence on the Issue Date;

(5) payments by the Company (and any direct or indirect parent thereof) and its Subsidiaries pursuant to tax sharing agreements among the Company (and any such parent) and its Subsidiaries on customary terms to the extent attributable to the ownership or operation of the Company and its Subsidiaries; provided that in each case the amount of such payments in any fiscal year does not exceed the amount that the Company, its Restricted Subsidiaries and its Unrestricted Subsidiaries (to the extent of amounts received from Unrestricted Subsidiaries) would be required to pay in respect of foreign, U.S. federal, state and local taxes for such fiscal year were the Company and its Subsidiaries (to the extent described above) to pay such taxes separately from any such parent entity;

(6) payment of reasonable and customary fees to, and reasonable and customary indemnification arrangements and similar payments on behalf of, directors of the Company or any Subsidiary thereof;

(7) any employment, consulting, service or termination agreement, or reasonable and customary indemnification arrangements, entered into by the Company or any Restricted Subsidiary with officers and employees of the Company or any Subsidiary thereof and the payment of compensation to officers and employees of the Company or any Subsidiary thereof (including amounts paid pursuant to employee benefit plans, employee stock option or similar plans), so long as such agreement, arrangements or payment (i) have been approved by a majority of the members of the Board of Directors of the Company and (ii) are substantially consistent with the practice of the Company or such Restricted Subsidiary, as the case may be, at or prior to the Issue Date; and

(8) transactions conducted on an arm’s-length basis on the same terms as would be conducted with a non-Affiliate involving the purchase and sale of goods and services with Affiliates in the ordinary course of business and consistent with prior practice; provided that the Company shall provide an Officers’ Certificate to the Trustee within 30 days of the end of each fiscal year certifying that all such transactions made pursuant to this clause (8), taken as a whole, were no less favorable than those that could reasonably be expected to be obtained in a comparable transaction at such time on an arm’s-length basis from a Person that is not an Affiliate of the Company.

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Designation of Restricted and Unrestricted Subsidiaries

The Board of Directors of the Company may designate (a “Designation”) any Restricted Subsidiary other than Casa Grande, Cartavio, San Jacinto and Azucarera Olmos to be an Unrestricted Subsidiary; provided that:

(1) any Guarantee by the Company or any Restricted Subsidiary of any Indebtedness of the Subsidiary being so designated will be deemed to be an Incurrence of Indebtedness by the Company or such Restricted Subsidiary, as the case may be, at the time of such designation, and such Incurrence of Indebtedness would be permitted under the covenant described above under the caption “—Limitation on Indebtedness;”

(2) the aggregate Fair Market Value of all outstanding Investments owned by the Company and the Restricted Subsidiaries in the Subsidiary being so designated (including any Guarantee by the Company or any Restricted Subsidiary of any Indebtedness of such Subsidiary) will be deemed to be an Investment made as of the time of such designation and that such Investment would be permitted under the covenant described above under the caption “—Limitation on Restricted Payments;”

(3) such Subsidiary does not hold any Capital Stock or Indebtedness of, or own or hold any Lien on any property or assets of, or have any Investment in, the Company or any Restricted Subsidiary; provided that such Subsidiary may hold Indebtedness of the Company or any Restricted Subsidiary if, at the time of and after giving pro forma effect to such Designation, Incurrence of such Indebtedness would be permitted under the covenant described above under the caption “—Limitation on Indebtedness” and any such Indebtedness will be deemed to be an Incurrence of Indebtedness by the Company or such Restricted Subsidiary, as the case may be, at the time of such Designation;

(4) the Subsidiary being so designated:

(a) is not party to any agreement, contract, arrangement or understanding with the Company or any Restricted Subsidiary unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to the Company or such Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of the Company; and

(b) is a Person with respect to which neither the Company nor any Restricted Subsidiary has any direct or indirect obligation (i) to subscribe for additional Equity Interests or (ii) to maintain or preserve such Person’s financial condition or to cause such Person to achieve any specified levels of operating results; provided that the Company or any Restricted Subsidiary may have a direct or indirect obligation to subscribe for additional Equity Interests in such Person, if, at the time of and after giving pro forma effect to such Designation, the Company or such Restricted Subsidiary would be permitted under the covenant described above under the caption “—Limitation on Restricted Payments” to make a Restricted Payment in an amount equal to the amount of the subscription obligation and the Company or such Restricted Subsidiary will be deemed as having made such Restricted Payment at the time of such Designation; and

(5) no Default or Event of Default would be in existence following such designation.

Any designation of a Restricted Subsidiary as an Unrestricted Subsidiary will be evidenced to the Trustee by filing with the Trustee the Board Resolution giving effect to such designation and an Officers’ Certificate certifying that such designation complied with the preceding conditions and was permitted by the Indenture.

The Board of Directors of the Company may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that:

(1) such designation will be deemed to be an Incurrence of Indebtedness by a Restricted Subsidiary of any outstanding Indebtedness of such Unrestricted Subsidiary and such designation will only be permitted if such Indebtedness is permitted under the covenant described under the caption “—Limitation on Indebtedness;”

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(2) all outstanding Investments owned by such Unrestricted Subsidiary will be deemed to be made as of the time of such designation and such designation will only be permitted if such Investments would be permitted under the covenant described above under the caption “—Limitation on Restricted Payments;”

(3) all Liens upon property or assets of such Unrestricted Subsidiary existing at the time of such designation would be permitted under the caption “—Limitation on Liens;” and

(4) no Default or Event of Default would be in existence following such designation.

Limitation on Sale and Leaseback Transactions

The Company will not, and will not permit any Restricted Subsidiary to, enter into any Sale and Leaseback Transaction; provided that the Company or any Restricted Subsidiary may enter into a Sale and Leaseback Transaction if:

(1) the Company or such Restricted Subsidiary, as applicable, could have (a) Incurred Indebtedness in an amount equal to the Attributable Debt relating to such Sale and Leaseback Transaction and (b) incurred a Lien to secure such Indebtedness pursuant to the covenant described above under the caption “—Certain Covenants—Limitation on Liens;”

(2) the gross cash proceeds of that Sale and Leaseback Transaction are at least equal to the Fair Market Value of the property that is the subject of that Sale and Leaseback Transaction; and

(3) the transfer of assets in that Sale and Leaseback Transaction is permitted by, and the Company applies the proceeds of such transaction in compliance with, the covenant described above under the caption “—Repurchase at the Option of Holders—Asset Sales.”

Business Activities

The Company will not, and will not permit any Restricted Subsidiary to, engage in any business other than Permitted Businesses, except to such extent as would not be material to the Company and the Restricted Subsidiaries taken as a whole.

Listing

Application has been made to the Irish Stock Exchange for the Notes to be admitted to the Official List and to trading on the Global Exchange Market which is the exchange regulated market of the Irish Stock Exchange.

Irish Listing Agent

Arthur Cox Listing Services Limited is the Irish listing agent in respect of the Notes. The Company will maintain such appointment so long as the Notes are listed on the Global Exchange Market of the Irish Stock Exchange and the rules of the exchange so require. The address of Arthur Cox Listing Services Limited is set forth on the inside back cover of this offering memorandum.

Reports

For so long as the Notes remain outstanding, the Company will provide to the Trustee the following items in English:

(1) its (a) consolidated annual financial statements audited by an internationally recognized firm of independent public accountants (which may be its current independent public accountants) within 120 days of the end of each fiscal year, and (b) consolidated quarterly financial statements within five Business Days after the earlier of (i) the date on which such quarterly financial statements are required to be delivered to the SMV and (ii) the date on which such quarterly financial statements are delivered to the SMV and, in case the Company is no longer obliged to deliver such quarterly financial statements to the SMV, within 60 days of the end of each of the first three fiscal quarters of each fiscal year. These annual and quarterly financial statements will be prepared in accordance with IFRS and such annual financial statements will be

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accompanied by a management discussion on its results of operations for the periods presented; provided that for the period of six (6) consecutive months immediately following the date on which any Guarantor or Restricted Subsidiary became a Subsidiary of the Company, any such financial statements provided to the Trustee during such six-month period (but not thereafter) need not include any financial data or other information for such Guarantor or Restricted Subsidiary; and

(2) any information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act so long as the notes are not freely transferable under the Securities Act.

Events of Default and Remedies

Each of the following is an “Event of Default”:

(1) default for 30 days in the payment when due of interest on the Notes;

(2) default in payment when due (whether at maturity, upon acceleration, redemption or otherwise) of the principal of, or premium, if any, on the Notes;

(3) failure by the Company or any Restricted Subsidiary to make or consummate an Offer to Purchase in accordance with the provisions described under the captions “—Repurchase at the Option of Holders—Change of Control,” “—Repurchase at the Option of Holders—Asset Sales” or to comply with the provisions described under the caption “—Certain Covenants—Merger, Consolidation or Sale of Assets;”

(4) failure by the Company or any Restricted Subsidiary for 45 days after written notice by the Trustee or Holders representing 25% or more of the aggregate principal amount of Notes outstanding to comply with any of the other agreements in the Indenture;

(5) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness by the Company or any Restricted Subsidiary (or the payment of which is Guaranteed by the Company or any Restricted Subsidiary) whether such Indebtedness or Guarantee now exists, or is created after the Issue Date, if that default:

(a) is caused by a failure to make any payment when due at the final maturity of such Indebtedness (a “Payment Default”); or

(b) results in the acceleration of such Indebtedness prior to its express maturity,

and, in each case, the amount of any such Indebtedness, together with the amount of any other such Indebtedness that is then subject to a Payment Default or the maturity of which has been so accelerated, aggregates US$20.0 million or more;

(6) failure by the Company or any Restricted Subsidiary to pay final judgments (to the extent such judgments are not paid or covered by insurance provided by a reputable carrier) aggregating in excess of US$20.0 million, which judgments are not paid, discharged or stayed for a period of 60 days;

(7) except as permitted by the Indenture, any Note Guarantee will be held in any judicial proceeding to be unenforceable or invalid or will cease for any reason to be in full force and effect or any Guarantor, or any Person acting on behalf of any Guarantor, will deny or disaffirm its obligations under its Note Guarantee; and

(8) certain events of bankruptcy or insolvency with respect to the Company, any Guarantor or any Restricted Subsidiary that is a Significant Subsidiary of the Company (or any Restricted Subsidiaries that together would constitute a Significant Subsidiary of the Company).

In the case of an Event of Default described in clause (8) above, all outstanding Notes will become due and payable immediately without further action or notice. If any other Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately by notice in writing to the Company specifying the Event of Default.

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Holders of the Notes may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to the terms of the Indenture, Holders of a majority in principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest) if it determines that withholding notice is in their interest.

The Holders of a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of premium or interest on, or the principal of, the Notes. Subject to the terms of the Indenture, the Holders of a majority in principal amount of the then outstanding Notes will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee. However, the Trustee may refuse to follow any direction that conflicts with law or the Indenture, that may involve the Trustee in personal liability, or that the Trustee determines in good faith may be unduly prejudicial to the rights of Holders of Notes not joining in the giving of such direction and may take any other action it deems proper that is not inconsistent with any such direction received from Holders of Notes. A Holder may not pursue any remedy with respect to the Indenture or the Notes unless:

(1) the Holder gives the Trustee written notice of a continuing Event of Default;

(2) the Holders of at least 25% in aggregate principal amount of outstanding Notes make a written request to the Trustee to pursue the remedy;

(3) such Holder or Holders offer the Trustee indemnity reasonably satisfactory to the Trustee against any costs, liability or expense;

(4) the Trustee does not comply with the request within 60 days after receipt of the request and the offer of indemnity; and

(5) during such 60-day period, the Holders of a majority in aggregate principal amount of the outstanding Notes do not give the Trustee a direction that is inconsistent with the request.

However, such limitations do not apply to the right of any Holder of a Note to receive payment of the principal of, premium, if any, or interest on, such Note or to bring suit for the enforcement of any such payment, on or after the due date expressed in the Notes, which right will not be impaired or affected without the consent of the Holder.

The Company is required to deliver to the Trustee annually within 90 days after the end of each fiscal year a statement regarding compliance with the Indenture. Within five Business Days of becoming aware of any Default or Event of Default, the Company is required to deliver to the Trustee a statement specifying such Default or Event of Default.

No Personal Liability of Directors, Officers, Employees and Stockholders

No director, officer, employee, incorporator, stockholder, member, manager or partner of the Company or any Guarantor, as such, will have any liability for any obligations of the Company or the Guarantors under the Notes, the Indenture, the Note Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. The waiver may not be effective to waive liabilities under the U.S. federal securities laws.

Legal Defeasance and Covenant Defeasance

The Company may, at its option and at any time, elect to have all of its obligations discharged with respect to the outstanding Notes and all obligations of the Guarantors discharged with respect to their Note Guarantees (“Legal Defeasance”). Legal Defeasance means that the Company and the Guarantors will be deemed to have paid and discharged the entire indebtedness represented by the outstanding Notes on the 91st day after the deposit specified in clause (1) of the second following paragraph except for:

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(1) the rights of Holders of outstanding Notes to receive payments in respect of the principal of, or interest or premium, if any, on such Notes when such payments are due from the trust referred to below;

(2) the Company’s obligations with respect to the Notes concerning issuing temporary Notes, registration of Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency for payment and money for security payments held in trust;

(3) the rights, powers, trusts, duties and immunities of the Trustee, and the Company’s and the Guarantors’ obligations in connection therewith; and

(4) the Legal Defeasance provisions of the Indenture.

In addition, the Company may, at its option and at any time, elect to have the obligations of the Company and the Guarantors released with respect to certain covenants in the Indenture (“Covenant Defeasance”) and thereafter any omission to comply with those covenants will not constitute a Default or Event of Default with respect to the Notes. In the event Covenant Defeasance occurs, certain events (not including non-payment, bankruptcy, receivership, reorganization and insolvency events) described under “Events of Default” will no longer constitute Events of Default with respect to the Notes.

In order to exercise either Legal Defeasance or Covenant Defeasance:

(1) the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders of the Notes, cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, or interest and premium, if any, on the outstanding Notes on the Stated Maturity or on the applicable redemption date, as the case may be, and the Company must specify whether the Notes are being defeased to maturity or to a particular redemption date;

(2) in the case of Legal Defeasance, the Company will have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that (a) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (b) since the Issue Date, there has been a change in the applicable U.S. federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel will confirm that, the Holders of the outstanding Notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Legal Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;

(3) in the case of Covenant Defeasance, the Company will have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that the Holders of the outstanding Notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Covenant Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

(4) in the case of Legal Defeasance or Covenant Defeasance, the Company shall have delivered to the Trustee (i) an Opinion of Counsel to the effect that, based upon Peruvian law then in effect, the Holders will not recognize income, gain or loss for Peruvian tax purposes, including withholding tax except for withholding tax then payable on interest payments due, and the amounts to be payable shall not be subject to any deposit or temporary freezing of funds, as a result of Legal Defeasance or Covenant Defeasance, as the case may be, and will be subject to Peruvian taxes on the same amounts and in the same manner and at the same time as would have been the case if such Legal Defeasance or Covenant Defeasance, as the case may be, had not occurred or (ii) a ruling directed to the Trustee received from tax authorities of Peru to the same effect as the Opinion of Counsel described in clause (i) above;

(5) no Default or Event of Default will have occurred and be continuing either: (a) on the date of such deposit; or (b) in the case of Legal Defeasance, insofar as Events of Default from bankruptcy or insolvency events are concerned, at any time in the period ending on the 91st day after the date of deposit;

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(6) such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under, any material agreement or instrument to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound;

(7) the Company must have delivered to the Trustee an Opinion of Counsel to the effect that, assuming no intervening bankruptcy of the Company or any Guarantor between the date of deposit and the 91st day following the deposit and assuming that no Holder is an “insider” of the Company under applicable bankruptcy law, after the 91st day following the deposit, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally, including Section 547 of the United States Bankruptcy Code and Section 15 of the New York Debtor and Creditor Law;

(8) the Company must deliver to the Trustee an Officers’ Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders over the other creditors of the Company with the intent of defeating, hindering, delaying or defrauding creditors of the Company or others;

(9) if the Notes are to be redeemed prior to their Stated Maturity, the Company must deliver to the Trustee irrevocable instructions to redeem all of the Notes on the specified redemption date under arrangements satisfactory to the Trustee for the giving of notice of such redemption by the Trustee in the Company’s name and at the Company’s expense; and

(10) the Company must deliver to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent relating to the Legal Defeasance or the Covenant Defeasance have been complied with.

Satisfaction and Discharge

The Indenture will be discharged and will cease to be of further effect as to all Notes issued thereunder (other than those provisions which by their express terms survive), when:

(1) either:

(a) all Notes that have been authenticated and delivered thereunder (except lost, stolen or destroyed Notes that have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust) have been delivered to the Trustee for cancellation; or

(b) all Notes issued thereunder that have not been delivered to the Trustee for cancellation (x) have become due and payable (by reason of the mailing of a notice of redemption or otherwise), (y) will become due and payable at Stated Maturity within one year, or (z) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the Company’s name and at the Company’s expense, and in each such case the Company has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust solely for the benefit of the Holders, cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, without consideration of any reinvestment of interest, to pay and discharge the entire indebtedness on the Notes not delivered to the Trustee for cancellation for principal, premium, if any, and accrued interest to the Stated Maturity or redemption date, as the case may be;

(2) no Default or Event of Default will have occurred and be continuing on the date of such deposit or will occur as a result of such deposit and such deposit will not result in a breach or violation of, or constitute a default under, any other instrument to which the Company or any Guarantor is a party or by which the Company or any Guarantor is bound;

(3) the Company or any Guarantor has paid or caused to be paid all sums payable by it under the Indenture and the Notes; and

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(4) the Company has delivered irrevocable instructions to the Trustee under the Indenture to apply the deposited money toward the payment of the Notes issued thereunder at Stated Maturity or the redemption date, as the case may be.

In addition, the Company must deliver an Officers’ Certificate and an Opinion of Counsel to the Trustee stating that all conditions precedent to satisfaction and discharge have been satisfied.

Amendment, Supplement and Waiver

Except as provided in the next two succeeding paragraphs, the Indenture or the Notes may be amended or supplemented with the consent of the Holders of at least a majority in principal amount of the Notes then outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes), and any existing default or compliance with any provision of the Indenture or the Notes may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes); provided that no amendment or waiver may release any Guarantor from any of its obligations under its Note Guarantee or the Indenture without the consent of the Holders of at least seventy-five percent (75.0%) in principal amount of the Notes then outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, Notes).

Without the consent of each Holder affected, an amendment or waiver may not (with respect to any Notes held by a non-consenting Holder):

(1) reduce the principal amount of Notes whose Holders must consent to an amendment, supplement or waiver;

(2) change the Stated Maturity of the principal of, or any installment of interest on, any Note;

(3) reduce the principal amount of, or premium, if any, or interest on, any Note;

(4) change the optional redemption dates or optional redemption prices of the Notes from those stated under the caption “—Optional Redemption”;

(5) waive a Default or Event of Default in the payment of principal of, or interest, or premium on, the Notes (except, upon a rescission of acceleration of the Notes by the Holders of at least a majority in aggregate principal amount of the Notes, a waiver of the payment default that resulted from such acceleration) or in respect of any other covenant or provision that cannot be amended or modified without the consent of all Holders;

(6) make any Note payable in money other than U.S. dollars;

(7) make any change in the amendment and waiver provisions of the Indenture;

(8) impair the right to institute suit for the enforcement of any payment on or with respect to the Notes or the Note Guarantees;

(9) amend, change or modify the obligation of the Company to make and consummate an Offer to Purchase with respect to any Asset Sale in accordance with the covenant described under the caption “Repurchase at the Option of Holders—Asset Sales” after the obligation to make such Offer to Purchase has arisen, or the obligation of the Company to make and consummate an Offer to Purchase in the event of a Change of Control Repurchase Event in accordance with the covenant described under the caption “Repurchase at the Option of Holders—Change of Control” after such Change of Control Repurchase Event has occurred, including, in each case, amending, changing or modifying any definition relating thereto; or

(10) except as otherwise permitted under the covenants described under the captions “―Certain Covenants―Merger, Consolidation or Sale of Assets” and “―Note Guarantees―Future Note Guarantees,” consent to the assignment or transfer by the Company or any Guarantor of any of their rights or obligations under the Indenture.

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Notwithstanding the preceding, without the consent of any Holder of Notes, the Company, the Guarantors and the Trustee may amend or supplement the Indenture or the Notes:

(1) to cure any ambiguity, defect or inconsistency;

(2) to provide for uncertificated Notes in addition to or in place of certificated Notes;

(3) to provide for the assumption of the Company’s or any Guarantor’s obligations to Holders of Notes in accordance with the Indenture in the case of a merger or consolidation or sale of all or substantially all of the Company’s or such Guarantor’s assets;

(4) to make any change that would provide any additional rights or benefits to the Holders of Notes or that does not materially, in the good faith determination of the Board of Directors of the Company, adversely affect the legal rights under the Indenture of any such Holder;

(5) to comply with the provisions described under “―Certain Covenants―Guarantees;”

(6) to evidence and provide for the acceptance of appointment by a successor Trustee;

(7) to provide for the issuance of Additional Notes in accordance with the Indenture; or

(8) to conform the Indenture or the Notes to any provision of this “Description of the Notes” to the extent such provision is intended to be a verbatim recitation thereof as evidenced by an Officers’ Certificate of the Company.

Waiver of Immunities

To the extent that the Company may claim for itself or its assets immunity from a suit, execution, attachment, whether in aid of execution, before judgment or otherwise, or other legal process in connection with the Notes or the Indenture and to the extent that in any jurisdiction there may be immunity attributable to it or its assets, whether or not claimed, the Company, for the benefit of the holders of the Notes, irrevocably waives and agrees not to claim such immunity to the fullest extent permitted by law.

Currency Indemnity

U.S. dollars are the sole currency of account and payment for all sums payable by the Company under or in connection with the Notes, including damages. Any amount received or recovered in a currency other than dollars (whether as a result of, or of the enforcement of, a judgment or order of a court of any jurisdiction, in the winding-up or dissolution of the Company or otherwise) by any holder of a Note in respect of any sum expressed to be due to it from the Company will only constitute a discharge of the Company to the extent of the dollar amount which the recipient is able to purchase with the amount so received or recovered in that other currency on the date of that receipt or recovery (or, if it is not practicable to make that purchase on that date, on the first date on which it is practicable to do so). If that dollar amount is less than the dollar amount expressed to be due to the recipient under any Note, the Company will indemnify such holder against any loss sustained by it as a result. In any event, the Company will indemnify the recipient against the cost of making any such purchase.

For the purposes of the preceding paragraph, it will be sufficient for the holder of a Note to certify in a satisfactory manner (indicating the sources of information used) that it would have suffered a loss had an actual purchase of dollars been made with the amount so received in that other currency on the date of receipt or recovery (or, if a purchase of dollars on such date had not been practicable, on the first date on which it would have been practicable; it being required that the need for a change of date be certified in the manner mentioned above). These indemnities constitute a separate and independent obligation from the other obligations of the Company, will give rise to a separate and independent cause of action, will apply irrespective of any indulgence granted by any holder of a Note and will continue in full force and effect despite any other judgment, order, claim or proof for a liquidated amount in respect of any sum due under any Note.

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Concerning the Trustee

Citibank, N.A. is initially serving as Trustee under the Indenture. Citibank, N.A. and its affiliates may have other business relationships with the Company from time to time.

The Indenture provides that in case an Event of Default occurs and is continuing, the Trustee will be required, in the exercise of its power, to use the degree of care of a prudent man in the conduct of his own affairs. The Indenture provides that the Trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request of any Holder of Notes, unless such Holder will have offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense.

Certain Definitions

Set forth below are certain defined terms used in the Indenture. Reference is made to the Indenture for a full description of all such terms, as well as any other capitalized terms used herein for which no definition is provided.

“Adjusted Consolidated Cash Flow” means, for any period, the Consolidated Net Income of the Company for such period plus:

(1) the consolidated income tax expense of the Company and the Restricted Subsidiaries for such period, to the extent that such income tax expense was deducted in computing such Consolidated Net Income; plus

(2) Fixed Charges of the Company and the Restricted Subsidiaries for such period, to the extent that any such Fixed Charges were deducted in computing such Consolidated Net Income; plus

(3) depreciation, amortization (including amortization of intangibles but excluding amortization of prepaid cash expenses that were paid in a prior period) and other non-cash expenses (excluding any such non-cash expense to the extent that it represents an accrual of or reserve for cash expenses in any future period or amortization of a prepaid cash expense that was paid in a prior period) of the Company and the Restricted Subsidiaries for such period to the extent that such depreciation, amortization and other non-cash expenses were deducted in computing such Consolidated Net Income; minus

(4) non-cash items increasing such Consolidated Net Income for such period, other than the accrual of revenue in the ordinary course of business;

in each case, on a consolidated basis and determined in accordance with IFRS.

Notwithstanding the preceding, the provision for taxes based on the income or profits of, the Fixed Charges of and the depreciation and amortization and other non-cash expenses of, a Restricted Subsidiary will be added to Consolidated Net Income to compute Adjusted Consolidated Cash Flow of the Company (A) in the same proportion that the Net Income of such Restricted Subsidiary was added to compute such Consolidated Net Income of the Company and (B) only to the extent that a corresponding amount would be permitted at the date of determination to be dividended or distributed to the Company by such Restricted Subsidiary without prior governmental approval (that has not been obtained), and without direct or indirect restriction pursuant to the terms of its charter or any agreements, instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable to that Subsidiary or its stockholders.

“Affiliate” of any specified Person means (1) any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person or (2) any executive officer or director of such specified Person. For purposes of this definition, “control,” as used with respect to any Person, will mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise. For purposes of this definition, the terms “controlling,” “controlled by” and “under common control with” will have correlative meanings.

“Applicable Premium” means, with respect to a Note at any date of redemption, as determined by the Independent Investment Bank, the excess of (A) the present value at such date of redemption of (1) the redemption price of such Note at August 2, 2017 (such redemption price being described under “—Optional Redemption”) plus

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(2) all remaining required interest payments due on such Note through August 2, 2017 (excluding accrued but unpaid interest to the date of redemption), computed using a discount rate equal to the Treasury Rate plus 50 basis points, over (B) the principal amount of such Note.

“Asset Sale” means:

(1) the sale, lease, conveyance or other disposition (each, a “Transfer”) of any assets by the Company or any Restricted Subsidiary; and

(2) the issuance of Equity Interests by any Restricted Subsidiary or the Transfer by the Company or any Restricted Subsidiary of Equity Interests in any of its Subsidiaries (other than directors’ qualifying shares and shares issued to foreign nationals to the extent required by applicable law).

Notwithstanding the preceding, the following items will be deemed not to be Asset Sales:

(1) any single transaction or series of related transactions that involves assets or Equity Interests having a Fair Market Value of less than US$5.0 million;

(2) a Transfer of assets that is governed by the provisions of the Indenture described above under the caption “—Repurchase at the Option of Holders—Change of Control” and/or the provisions described above under the caption “—Certain Covenants—Merger, Consolidation or Sale of Assets;”

(3) a Transfer of assets or Equity Interests between or among the Company and the Restricted Subsidiaries;

(4) an issuance of Equity Interests by a Restricted Subsidiary to the Company or to another Restricted Subsidiary;

(5) a Transfer of any assets in the ordinary course of business;

(6) a Transfer of Cash Equivalents;

(7) a Transfer of accounts receivable in connection with the compromise, settlement or collection thereof in the ordinary course of business or in bankruptcy or similar proceedings;

(8) a Transfer that constitutes a Restricted Payment that is permitted by the covenant described above under the caption “—Certain Covenants—Limitation on Restricted Payments” or a Permitted Investment;

(9) a Transfer of any property or equipment that has become damaged, worn out or obsolete; and

(10) the creation of a Lien not prohibited by the Indenture (but not the sale of property subject to a Lien).

“Attributable Debt” in respect of a Sale and Leaseback Transaction means, at the time of determination, the present value of the obligation of the lessee for net rental payments during the remaining term of the lease included in such Sale and Leaseback Transaction, including any period for which such lease has been extended or may, at the option of the lessor, be extended. Such present value will be calculated using a discount rate equal to the rate of interest implicit in such transaction, determined in accordance with IFRS.

“Azucarera Olmos” means Azucarera Olmos S.A.

“Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular “person” (as that term is used in Section 13(d)(3) of the Exchange Act), such “person” will be deemed to have beneficial ownership of all securities that such “person” has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition. The terms “Beneficially Owns” and “Beneficially Owned” will have a corresponding meaning.

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“Board of Directors” means:

(1) with respect to a corporation, the board of directors of the corporation or, except in the context of the definition of “Change of Control,” a duly authorized committee thereof;

(2) with respect to a partnership, the Board of Directors of the general partner of the partnership; and

(3) with respect to any other Person, the board or committee of such Person serving a similar function.

“Board Resolution” means a resolution certified by the General Manager of the Company to have been duly adopted by the Board of Directors of the Company and to be in full force and effect on the date of such certification.

“Business Day” means any day other than a Legal Holiday.

“Capital Lease Obligation” means an obligation that is required to be classified and accounted for as a capital lease for financial reporting purposes in accordance with IFRS; and the amount of Indebtedness represented thereby at any time shall be the amount of the liability in respect thereof that would at that time be required to be capitalized on a balance sheet in accordance with IFRS.

“Capital Stock” of any Person means any and all shares, interests (including general or limited partnership interests, limited liability company or membership interests or limited liability partnership interests), participations or other equivalents of or interests in (however designated) equity of such Person, including any Preferred Stock.

“Cartavio” means Cartavio S.A.A.

“Casa Grande” means Casa Grande S.A.A.

“Cash Equivalents” means:

(1) United States dollars and such local currencies held by the Company or any Restricted Subsidiary from time to time in the ordinary course of business;

(2) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof), maturing, unless such securities are deposited to defease any Indebtedness, not more than one year from the date of acquisition;

(3) securities issued or directly and fully guaranteed or insured by the Peruvian government or any agency or instrumentality thereof (provided that the full faith and credit of the Republic of Peru is pledged in support thereof), maturing, unless such securities are deposited to defease any Indebtedness, not more than one year from the date of acquisition;

(4) demand deposits, certificates of deposit and time deposits with maturities of six months or less from the date of acquisition, bankers’ acceptances with maturities not exceeding one year and overnight bank deposits, in each case, with (a) any commercial bank organized under the laws of the United States or any state, commonwealth or territory thereof or any non-U.S. bank, in each case having capital and surplus in excess of US$500.0 million and a rating at the time of acquisition thereof of P-1 or better from Moody’s or A-1 or better from S&P or such local equivalent thereof or, (b) with respect to the definitions of “Permitted Investments” and “Permitted Liens” in this “Description of the Notes”, (i) with respect to Cash Equivalents of any Person whose principal place of business is in a jurisdiction other than the United States or any member state of the European Union, a bank operating in such other jurisdiction having capital and surplus in excess of US$250.0 million, (ii) any branch or Subsidiary of a bank (such bank, the “parent institution”) organized under the laws of the United States or any state, commonwealth or territory thereof or the European Union or any member state thereof, if the rating of such parent institution at the time of acquisition thereof is P-3 or better from Moody’s or A-3 or better from S&P or such local equivalent thereof, (iii) any bank to the extent the Company or any of its Subsidiaries maintains any deposits with such bank in the ordinary course of business, so long as any such deposit is outstanding for less than thirty (30)

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days and (iv) any other bank, specified in the Indenture, with which the Company or any of its Subsidiaries maintains any deposit at the Issue Date;

(5) repurchase obligations with a term of not more than thirty (30) days for underlying securities of the types described in clauses (2) and (4) above entered into with any financial institution meeting the qualifications specified in clause (4) above;

(6) commercial paper having the highest rating obtainable from Moody’s or S&P and in each case maturing within one year after the date of acquisition;

(7) securities issued and fully guaranteed by any state, commonwealth or territory of the United States of America, or by any political subdivision or taxing authority thereof, rated at least “A” by Moody’s or S&P and having maturities of not more than one year from the date of acquisition;

(8) money market funds at least 95% of the assets of which constitute Cash Equivalents of the kinds described in clauses (1) through (7) of this definition; and

(9) instruments equivalent to those referred to in clauses (1) through (8) above denominated in U.S. dollars or any other foreign currency comparable in credit quality and tenor to those referred to above and customarily used by corporations for cash management purposes in any jurisdiction outside the United States to the extent reasonably required in connection with any business conducted by the Company or any Restricted Subsidiary organized in such jurisdiction.

“Change of Control” means the occurrence of any of the following:

(1) the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of the Company and the Restricted Subsidiaries, taken as a whole, to any “person” (as that term is used in Section 13(d)(3) of the Exchange Act) other than the Permitted Holders;

(2) the adoption of a plan relating to the liquidation or dissolution of the Company;

(3) the Permitted Holders cease to be the Beneficial Owner, directly or indirectly, of a majority in the aggregate of the total voting power of the Voting Stock of the Company, on a fully diluted basis, whether as a result of issuance of securities of the Company, any merger, consolidation, liquidation or dissolution of the Company, or any direct or indirect transfer of securities by the Company; or

(4) individuals appointed by the Permitted Holders cease for any reason to constitute a majority of the members of the Board of Directors of the Company.

“Change of Control Repurchase Event” means the occurrence of both a Change of Control and a Rating Downgrade Event.

“Commission” means the United States Securities and Exchange Commission.

“Common Stock” means, with respect to any Person, any Capital Stock (other than Preferred Stock) of such Person, whether outstanding on the Issue Date or issued thereafter.

“Comparable Treasury Issue” means the United States Treasury security or securities selected by an Independent Investment Bank as having an actual or interpolated maturity comparable to the remaining term of the Notes to be redeemed to August 2, 2017 that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of a comparable maturity to the remaining term of such Notes to August 2, 2017.

“Comparable Treasury Price” means, with respect to any redemption date, (A) the average of the Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (B) if the Independent Investment Bank obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations.

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“Consolidated Leverage Ratio” means, as of any Transaction Date, the ratio of (i) the aggregate amount of Indebtedness of the Company and its Restricted Subsidiaries on a consolidated basis outstanding on such Transaction Date, to (ii) the aggregate amount of Adjusted Consolidated Cash Flow of the Company and its Restricted Subsidiaries for the Company’s most recently ended four full fiscal quarters for which internal financial statements are available immediately preceding such Transaction Date (the “Four Quarter Period”).

For purposes of calculating the Consolidated Leverage Ratio:

(1) pro forma effect shall be given to any Indebtedness that is to be incurred or repaid on the Transaction Date;

(2) acquisitions and dispositions of business entities or property and assets constituting a division or line of business of any Person that have been made by the Company or any Restricted Subsidiary (or by any Person that has subsequently become a Restricted Subsidiary or has subsequently merged or consolidated with or into the Company or any Restricted Subsidiary), including through mergers or consolidations, and the designation or redesignation of an Unrestricted Subsidiary, in each case, during the Four Quarter Period or subsequent thereto and on or prior to the Transaction Date will be given pro forma effect as if they had occurred on the first day of the Four Quarter Period and Adjusted Consolidated Cash Flow for the Four Quarter Period will be calculated on a pro forma basis, but without giving effect to clause (3) of the proviso set forth in the definition of Consolidated Net Income;

(3) the Adjusted Consolidated Cash Flow attributable to discontinued operations, as determined in accordance with IFRS, will be excluded; and

(4) whenever pro forma effect is to be given to an acquisition or disposition, the pro forma calculations will be made in good faith by a responsible financial or accounting officer of the Company.

“Consolidated Net Income” means, for any period, the aggregate of the net income (loss) of the Company and the Restricted Subsidiaries for such period, on a consolidated basis, determined in accordance with IFRS; provided that:

(1) the net income (loss) of any Person that is not a Restricted Subsidiary or that is accounted for by the equity method of accounting will be included only to the extent of the amount of dividends or distributions paid in cash to the Company or a Restricted Subsidiary (subject, in the case of dividends or distributions paid to a Restricted Subsidiary, to the limitations contained in clause (2) below);

(2) the net income (but not the net loss) of any Restricted Subsidiary will be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of that net income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its equityholders;

(3) the net income (loss) of any Person acquired during the specified period for any period prior to the date of such acquisition will be excluded;

(4) any gain or loss, together with any related provision for taxes on such gain or loss, realized in connection with: (a) any sale of assets outside the ordinary course of business of the Company; or (b) the disposition of any securities by the Company or a Restricted Subsidiary or the extinguishment of any Indebtedness of the Company or any Restricted Subsidiary, will be excluded;

(5) any extraordinary gain or loss, together with any related provision for taxes on such extraordinary gain or loss, will be excluded;

(6) any non-cash compensation expense realized for grants of performance shares, stock options or other rights to officers, directors and employees of the Company and any Restricted Subsidiary will be excluded; provided that such shares, options or other rights can be redeemed at the option of the holder only for Capital Stock (other than Disqualified Stock of the Company); and

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(7) the cumulative effect of a change in accounting principles will be excluded.

“Consolidated Net Tangible Assets” of any person means, as of any date, (a) all amounts that would be shown as assets on a consolidated balance sheet of such person and its Restricted Subsidiaries prepared in accordance with IFRS, less (b) the amount thereof constituting goodwill and other intangible assets as calculated in accordance with IFRS, less (c) current liabilities, excluding current maturities of long-term debt.

“Default” means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.

“Disqualified Stock” means any Capital Stock that, by its terms, by the terms of any security into which it is convertible, or for which it is exchangeable, or by contract or otherwise, is, or upon the happening of any event or passage of time would be, required to be redeemed on or prior to the date that is one year after the date on which the Notes mature, or is redeemable at the option of the holder thereof, or is convertible into or exchangeable for debt securities in any such case on or prior to such date. Notwithstanding the preceding sentence, any Capital Stock that would constitute Disqualified Stock solely because the holders thereof have the right to require the Company to repurchase such Capital Stock upon the occurrence of a change of control or an asset sale will not constitute Disqualified Stock if (i) the “asset sale” or “change of control” provisions applicable to such Capital Stock are no more favorable to the holders of such Capital Stock than the provisions contained in “—Repurchase at the Option of Holders—Asset Sales” and “—Repurchase at the Option of Holders—Change of Control” covenants described herein and (ii) such Capital Stock specifically provides that such Person will not repurchase or redeem any such stock pursuant to such provision prior to the Company’s repurchase of such Notes as are required to be repurchased pursuant to “—Repurchase at the Option of Holders—Asset Sales” and “—Repurchase at the Option of Holders—Change of Control” covenants. The term “Disqualified Stock” will also include any options, warrants or other rights that are convertible into Disqualified Stock or that are redeemable at the option of the holder, or required to be redeemed, prior to the date that is one year after the date on which the Notes mature.

“Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

“Equity Offering” means any (i) public sale or (ii) underwritten private offering in accordance with Rule 144A, Regulation S and/or another exemption under the Securities Act, in each case of Capital Stock (other than Disqualified Stock) of the Company in excess of US$50.0 million (other than pursuant to a registration statement on Form S-8 or otherwise relating to equity securities issuable under any employee benefit plan of the Company) to any Person other than any Subsidiary thereof.

“Existing Indebtedness” means the aggregate amount of Indebtedness of the Company and the Restricted Subsidiaries (other than Indebtedness under the Notes and the related Note Guarantees) in existence on the Issue Date after giving effect to the application of the proceeds of the Notes.

“Fair Market Value” means the price that would be paid in an arm’s-length transaction between an informed and willing seller under no compulsion to sell and an informed and willing buyer under no compulsion to buy, as determined in good faith by the Board of Directors of the Company, whose determination, will be conclusive if evidenced by a Board Resolution.

“Fitch” means Fitch Inc., a Subsidiary of Fimalac, S.A.

“Fixed Charge Coverage Ratio” means for any period, the ratio of the Adjusted Consolidated Cash Flow of the Company for such period to the Fixed Charges of the Company for such period.

For purposes of calculating the Fixed Charge Coverage Ratio:

(1) in the event that the Company or any Restricted Subsidiary Incurs, repays, repurchases or redeems any Indebtedness or issues, repurchases or redeems Preferred Stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated and on or prior to the date on which the event for which the calculation of the Fixed Charge Coverage Ratio is made (the “Calculation Date”), then the Fixed Charge Coverage Ratio will be calculated giving pro forma effect to such Incurrence,

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repayment, repurchase or redemption of Indebtedness, or such issuance, repurchase or redemption of Preferred Stock, and the use of the proceeds therefrom as if the same had occurred at the beginning of such period;

(2) acquisitions and dispositions of business entities or property and assets constituting a division or line of business of any Person that have been made by the Company or any Restricted Subsidiary (or by any Person that has subsequently become a Restricted Subsidiary or has subsequently merged or consolidated with or into the Company or any Restricted Subsidiary), including through mergers or consolidations, and the designation or redesignation of an Unrestricted Subsidiary, in each case, during the four-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date will be given pro forma effect as if they had occurred on the first day of the four-quarter reference period and Adjusted Consolidated Cash Flow for such reference period will be calculated on a pro forma basis, but without giving effect to clause (3) of the proviso set forth in the definition of Consolidated Net Income;

(3) the Adjusted Consolidated Cash Flow attributable to discontinued operations, as determined in accordance with IFRS, will be excluded;

(4) the Fixed Charges attributable to discontinued operations, as determined in accordance with IFRS, will be excluded, but only to the extent that the obligations giving rise to such Fixed Charges will not be obligations of the Company or any Restricted Subsidiary following the Calculation Date;

(5) whenever pro forma effect is to be given to an acquisition or disposition, the amount of Adjusted Consolidated Cash Flow relating thereto and the amount of Fixed Charges associated with any Indebtedness Incurred in connection therewith, unless otherwise specified, the pro forma calculations will be made in good faith by a responsible financial or accounting officer of the Company;

(6) Fixed Charges attributable to interest on any Indebtedness (whether existing or being Incurred) computed on a pro forma basis and bearing a floating interest rate will be computed as if the rate in effect on the Calculation Date (taking into account any interest rate option, swap, cap or similar agreement applicable to such Indebtedness if such agreement has a remaining term in excess of 12 months or, if shorter, at least equal to the remaining term of such Indebtedness) had been the applicable rate for the entire period; and

(7) Fixed Charges attributable to interest on any Indebtedness incurred under a revolving credit facility computed on a pro forma basis will be calculated based on the average daily balance of such Indebtedness for the four fiscal quarters subject to the pro forma calculation to the extent that such Indebtedness was Incurred solely for working capital purposes.

“Fixed Charges” means, for any period, the sum, without duplication, of:

(1) the consolidated interest expense of the Company and the Restricted Subsidiaries for such period, whether paid or accrued, including, without limitation, amortization of debt issuance costs and original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, imputed interest with respect to Attributable Debt, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers’ acceptance financings, and net of the effect of all payments made or received pursuant to Hedging Obligations; plus

(2) the consolidated interest of the Company and the Restricted Subsidiaries that was capitalized during such period; plus

(3) any interest expense on Indebtedness of another Person that is Guaranteed by the Company or one of the Restricted Subsidiaries or secured by a Lien on assets of the Company or a Restricted Subsidiary, whether or not such Guarantee or Lien is called upon; plus

(4) the product of (a) all dividends, whether paid or accrued and whether or not in cash, on any series of Disqualified Stock of the Company or a Restricted Subsidiary or Preferred Stock of a Restricted Subsidiary, other than dividends on Equity Interests payable solely in Equity Interests (other than

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Disqualified Stock) of the Company or to the Company or a Restricted Subsidiary, times (b) a fraction, the numerator of which is one and the denominator of which is one minus the then current combined U.S. federal, state, local statutory tax rate of the issuer of such Disqualified or Preferred Stock, expressed as a decimal,

in each case, on a consolidated basis and in accordance with IFRS.

“Government Securities” means securities that are direct obligations of the United States of America for the timely payment of which its full faith and credit is pledged.

“Guarantee” means, as to any Person, a guarantee other than by endorsement of negotiable instruments for collection in the ordinary course of business, direct or indirect, in any manner, including, without limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness of another Person, but excluding endorsements for collection or deposit in the normal course of business.

“Guarantors” means:

(1) the Initial Guarantors; and

(2) any other subsidiary that executes a Note Guarantee in accordance with the provisions of the Indenture;

and their respective successors and assigns until released from their obligations under their Note Guarantees and the Indenture in accordance with the terms of the Indenture.

“Hedging Obligations” means, with respect to any specified Person, the obligations of such Person under:

(1) any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement or other similar agreement or arrangement;

(2) any commodity forward contract, commodity swap agreement, commodity option agreement or other similar agreement or arrangement; or

(3) any foreign exchange contract, currency swap agreement or other similar agreement or arrangement.

“Holder” means a Person in whose name a Note is registered.

“IFRS” means the International Financial Reporting Standards as adopted by the International Accounting Standards Board which are in effect from time to time.

“Incur” means, with respect to any Indebtedness, to incur, create, issue, assume, Guarantee or otherwise become directly or indirectly liable for or with respect to, or become responsible for, the payment of, contingently or otherwise, such Indebtedness (and “Incurrence” and “Incurred” will have meanings correlative to the foregoing); provided that (1) any Indebtedness of a Person existing at the time such Person becomes a Restricted Subsidiary will be deemed to be Incurred by such Person at the time it becomes a Restricted Subsidiary and (2) neither the accrual of interest nor the accretion of original issue discount nor the payment of interest in the form of additional Indebtedness with the same terms or the payment of dividends on Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock (to the extent provided for when the Indebtedness or Disqualified Stock or Preferred Stock on which such interest or dividend is paid was originally issued) will be considered an Incurrence of Indebtedness.

“Indebtedness” means, with respect to any specified Person, whether or not contingent:

(1) all indebtedness of such Person in respect of borrowed money;

(2) all obligations of such Person evidenced by bonds, notes, debentures or similar instruments;

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(3) all obligations of such Person in respect of banker’s acceptances, letters of credit or similar instruments (or reimbursement obligations in respect thereof);

(4) all Capital Lease Obligations of such Person and Attributable Debt;

(5) all obligations of such Person in respect of the deferred and unpaid balance of the purchase price of any property or services, except any such balance that constitutes an accrued expense or trade payable;

(6) all Hedging Obligations of such Person;

(7) all Disqualified Stock issued by such Person, valued at the greater of its voluntary or involuntary liquidation preference and its maximum fixed repurchase price plus accrued dividends;

(8) all Indebtedness of others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness is assumed by the specified Person), provided that the amount of such Indebtedness will be the lesser of (A) the Fair Market Value of such asset at such date of determination and (B) the amount of such Indebtedness; and

(9) to the extent not otherwise included, the Guarantee by the specified Person of any Indebtedness of any other Person.

For purposes hereof, the “maximum fixed repurchase price” of any Disqualified Stock which does not have a fixed repurchase price will be calculated in accordance with the terms of such Disqualified Stock as if such Disqualified Stock were repurchased on any date on which Indebtedness will be required to be determined pursuant to the Indenture.

The amount of any Indebtedness outstanding as of any date will be the outstanding balance at such date of all unconditional obligations as described above and, with respect to contingent obligations, the maximum liability upon the occurrence of the contingency giving rise to the obligation. The amount of any Indebtedness described in clauses (1) and (2) above will be:

(1) the accreted value thereof, in the case of any Indebtedness issued with original issue discount; and

(2) the principal amount thereof, together with any interest thereon that is more than 30 days past due, in the case of any other Indebtedness.

For purposes of determining any particular amount of Indebtedness, (x) Guarantees, Liens or obligations with respect to letters of credit supporting Indebtedness otherwise included in the determination of such particular amount shall not be included, and (y) any Liens granted pursuant to the equal and ratable provisions referred to in the “Limitation on Liens” covenant shall not be treated as Indebtedness.

“Independent Investment Bank” means one of the Reference Treasury Dealers appointed by the Company.

“Initial Guarantors” means Casa Grande, Cartavio, San Jacinto and Azucarera Olmos.

“Initial Purchasers” means Merrill Lynch, Pierce, Fenner & Smith Incorporated and Citigroup Global Markets Inc.

“Investments” in any Person means all direct or indirect investments in such Person in the form of loans or other extensions of credit (including Guarantees), advances, capital contributions (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities issued by such Person, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with IFRS.

If the Company or any Restricted Subsidiary sells or otherwise disposes of any Equity Interests of any direct or indirect Restricted Subsidiary such that, after giving effect to any such sale or disposition, such Person is no longer a Restricted Subsidiary, the Company will be deemed to have made an Investment on the date of any such sale or disposition equal to the Fair Market Value of the Investment in such Subsidiary not sold or disposed of. The

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acquisition by the Company or any Restricted Subsidiary of a Person that holds an Investment in a third Person will be deemed to be an Investment by the Company or such Restricted Subsidiary in such third Person in an amount equal to the Fair Market Value of the Investment held by the acquired Person in such third Person unless such Investment in such third party was not made in anticipation or contemplation of the Investment by the Company or such Restricted Subsidiary and such third party Investment is incidental to the primary business of such Person in whom the Company or such Restricted Subsidiary is making such Investment.

“Investment Grade” means

(1) with respect to Moody’s (or any successor company acquiring all or substantially all of its assets), a rating of Baa3 (or its equivalent under any successor rating category of Moody’s) or better;

(2) with respect to S&P (or any successor company acquiring all or substantially all of its assets), a rating of BBB- (or its equivalent under any successor rating category of S&P) or better;

(3) with respect to Fitch (or any successor company acquiring all or substantially all of its assets), a rating of BBB-(or its equivalent under any successor rating category of Fitch) or better; and

(4) if any Rating Agency ceases to exist or ceases to rate the Notes for reasons outside of the control of the Company, the equivalent investment grade credit rating from any other “nationally recognized statistical rating organization” within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act selected by the Company as a replacement agency.

“Issue Date” means the first date Notes are issued under the Indenture.

“Legal Holiday” means a Saturday, a Sunday or a day on which banking institutions in The City of New York, New York, United States of America, Lima, Peru, or at a place of payment are authorized or required by law, regulation or executive order to remain closed.

“Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.

“Moody’s” means Moody’s Investors Service, Inc. and its successors.

“Net Available Cash” means the aggregate proceeds, including payments in respect of deferred payment obligations (to the extent corresponding to the principal, but not the interest component, thereof), received in Cash Equivalents by the Company or any Restricted Subsidiary in respect of any Asset Sale (including, without limitation, any Cash Equivalents received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of (1) the direct costs relating to such Asset Sale, including, without limitation, legal, accounting, investment banking and brokerage fees, and sales commissions, and any relocation expenses incurred as a result thereof, (2) taxes paid or payable as a result thereof, in each case, after taking into account any available tax credits or deductions and any tax sharing arrangements, (3) in the case of any Asset Sale by a Restricted Subsidiary, payments to holders of Equity Interests in such Restricted Subsidiary in such capacity (other than such Equity Interests held by the Company or any Restricted Subsidiary) to the extent that such payment is required to permit the distribution of such proceeds in respect of the Equity Interests in such Restricted Subsidiary held by the Company or any Restricted Subsidiary and (4) appropriate amounts to be provided by the Company or the Restricted Subsidiaries as a reserve against liabilities associated with such Asset Sale, including, without limitation, pension and other post-employment benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such Asset Sale, all as determined in accordance with IFRS; provided that (a) excess amounts set aside for payment of taxes pursuant to clause (2) above remaining after such taxes have been paid in full or the statute of limitations therefor has expired and (b) amounts initially held in reserve pursuant to clause (4) no longer so held, will, in the case of each of subclause (a) and (b), at that time become Net Available Cash.

“Note Guarantee” means a Guarantee of the Notes pursuant to the Indenture.

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“Obligations” with respect to any Indebtedness means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing such Indebtedness.

“Offer to Purchase” means an offer to purchase Notes by the Company from the Holders commenced by mailing a notice to the Trustee and each Holder stating:

(1) the provision of the Indenture pursuant to which the offer is being made and that all Notes validly tendered will be accepted for payment on a pro rata basis;

(2) the purchase price and the date of purchase, which shall be a business day no earlier than 30 days nor later than 60 days from the date such notice is mailed (the “Payment Date”);

(3) that any Note not tendered will continue to accrue interest pursuant to its terms;

(4) that, unless the Company defaults in the payment of the purchase price, any Note accepted for payment pursuant to the Offer to Purchase shall cease to accrue interest on and after the Payment Date;

(5) that Holders electing to have a Note purchased pursuant to the Offer to Purchase will be required to surrender the Note, together with the form entitled “Option of the Holder to Elect Purchase” on the reverse side of the Note completed, to the Paying Agent at the address specified in the notice prior to the close of business on the business day immediately preceding the Payment Date;

(6) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the close of business on the third business day immediately preceding the Payment Date, a telegram, facsimile transmission, letter or other written notice setting forth the name of such Holder, the principal amount of Notes delivered for purchase and a statement that such Holder is withdrawing his election to have such Notes purchased; and

(7) that Holders whose Notes are being purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered; provided that each Note purchased and each new Note issued shall be in a principal amount of US$100,000 or an integral multiple of US$1,000 in excess thereof.

On the Payment Date, the Company shall (a) accept for payment on a pro rata basis Notes or portions thereof (and, in the case of an Offer to Purchase made pursuant to “Repurchase at the Option of Holders―Asset Sales,” any other Pari Passu Debt included in such Offer to Purchase) tendered pursuant to an Offer to Purchase; (b) deposit, on the Business Day prior to such Payment Date, with the Paying Agent money sufficient to pay the purchase price of all Notes or portions thereof so accepted; and (c) deliver, or cause to be delivered, to the Trustee all Notes or portions thereof so accepted together with an Officers’ Certificate specifying the Notes or portions thereof accepted for payment by the Company. The Paying Agent shall promptly mail or send by wire transfer to the Holders of Notes so accepted payment in an amount equal to the purchase price, and the Trustee shall promptly authenticate and deliver to such Holders a new Note equal in principal amount to any unpurchased portion of the Note surrendered; provided that each Note purchased and each new Note issued shall be in a principal amount of US$100,000 or an integral multiple of US$1,000 in excess thereof. The Company will publicly announce the results of an Offer to Purchase as soon as practicable after the Payment Date. The Trustee shall act as the Paying Agent for an Offer to Purchase. The Company will comply with Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder, to the extent such laws and regulations are applicable, in the event that the Company is required to repurchase Notes pursuant to an Offer to Purchase. To the extent that the provisions of any securities laws or regulations conflict with the provisions of the Indenture relating to an Offer to Purchase, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under such provisions of the Indenture by virtue of such conflict.

“Officer” means, with respect to any Person, the Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary or any Vice-President of such Person.

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“Officers’ Certificate” means a certificate signed on behalf of the Company by at least two Officers of the Company, one of whom must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Company, that meets the requirements of the Indenture.

“Opinion of Counsel” means an opinion from legal counsel who is reasonably acceptable to the Trustee (who may be counsel to the Company) that meets the requirements of the Indenture.

“Pari Passu Debt” means (a) any Indebtedness of the Company that ranks equally in right of payment with the Notes or (b) any Indebtedness of a Guarantor that ranks equally in right of payment with such Guarantor’s Note Guarantee.

“Permitted Business” means any business conducted or proposed to be conducted (as described in this offering memorandum) by the Company and the Restricted Subsidiaries on the Issue Date and other businesses ancillary thereto.

“Permitted Holders” means the Rodríguez Family.

“Permitted Investments” means:

(1) any Investment in the Company or in a Restricted Subsidiary;

(2) any Investment in Cash Equivalents;

(3) any Investment by the Company or any Restricted Subsidiary in a Person, if as a result of such Investment:

(a) such Person becomes a Restricted Subsidiary; or

(b) such Person is merged, consolidated or amalgamated with or into, or transfers or conveys all or substantially all of its assets to, or is liquidated into, the Company or a Restricted Subsidiary;

(4) any Investment made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in compliance with the covenant described above under the caption “—Repurchase at the Option of Holders—Asset Sales;”

(5) Hedging Obligations that are designed solely to protect the Company or its Restricted Subsidiaries against fluctuations in interest rates, commodity prices or foreign currency exchange rates (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnifies and compensation payable thereunder;

(6) (i) stock, obligations or securities received in satisfaction of judgments, foreclosure of Liens or settlement of Indebtedness and (ii) any Investments received in compromise of obligations of any trade creditor or customer that were incurred in the ordinary course of business, including pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of any such Person;

(7) advances to customers or suppliers in the ordinary course of business that are, in conformity with IFRS, recorded as accounts receivable, prepaid expenses or deposits on the balance sheet of the Company or the Restricted Subsidiaries and endorsements for collection or deposit arising in the ordinary course of business;

(8) commission, payroll, travel and similar advances to officers and employees of the Company or any Restricted Subsidiary that are expected at the time of such advance ultimately to be recorded as an expense in conformity with IFRS;

(9) an Investment existing on the Issue Date, and any Investment that replaces, refinances or refunds an existing Investment; provided that the new Investment does not increase the amount of the Investment so replaced, refinanced or refunded except by an amount equal to any premium or other reasonable amount

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paid in respect of the underlying obligations and fees and expenses incurred in connection with such replacement, refinancing or refunding;

(10) repurchases of the Notes and the related Guarantees made (i) in the open market in an aggregate amount not to exceed US$30.0 million since the Issue Date pursuant to this subclause (i) or (ii) as a result of any offer to all Holders to purchase their Notes, including where any such offer is made in accordance with the provisions set forth in the covenant described under the caption “Repurchase at the Option of Holders—Asset Sales”; provided that any such repurchased Notes (and related Guarantees) must be delivered to the Trustee for cancellation or held continuously by the Company or any Restricted Subsidiary after any such repurchase and may not be transferred by any means to any Person other than the Company or any Restricted Subsidiary;

(11) Investments in one or more Permitted Joint Ventures having an aggregate Fair Market Value that do not exceed in the aggregate US$5.0 million in any calendar year (with unused amounts in any calendar year being carried over to the next succeeding calendar year subject to a maximum of US$10.0 million in the aggregate in any calendar year) (with the Fair Market Value of each Investment being measured at the time made and without giving effect to subsequent changes in value);

(12) Investments in one or more Qualified Acquisitions having an aggregate Fair Market Value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (12) since the Issue Date, not to exceed US$30.0 million; and

(13) other Investments in any Person having an aggregate Fair Market Value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (13) since the Issue Date, not to exceed US$10.0 million.

“Permitted Joint Venture” means any agreement, contract or other arrangement between the Company or any Restricted Subsidiary and any Person engaged principally in a Permitted Business that permits one party to share risks or costs, comply with regulatory requirements or satisfy other business objectives customarily achieved through the conduct of such Permitted Business jointly with third parties.

“Permitted Liens” means:

(1) Liens in favor of the Company or any Restricted Subsidiary that is a Guarantor;

(2) Liens on property of a Person existing at the time such Person is merged with or into or consolidated with the Company or any Restricted Subsidiary; provided that such Liens were in existence prior to the contemplation of such merger or consolidation and do not extend to any assets other than those of the Person merged into or consolidated with the Company or the Restricted Subsidiary;

(3) Liens on property existing at the time of acquisition thereof by the Company or any Restricted Subsidiary of the Company, provided that such Liens were in existence prior to the contemplation of such acquisition and do not extend to any property other than the property so acquired by the Company or the Restricted Subsidiary;

(4) Liens securing the Notes and the Note Guarantees;

(5) Liens existing on the Issue Date;

(6) Liens securing Permitted Refinancing Indebtedness; provided that such Liens do not extend to any property or assets other than the property or assets that secure the Indebtedness being refinanced;

(7) Liens on property or assets securing Indebtedness used to defease or to satisfy and discharge the Notes; provided that (a) the Incurrence of such Indebtedness was not prohibited by the Indenture and (b) such defeasance or satisfaction and discharge is not prohibited by the Indenture;

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(8) Liens securing obligations that do not exceed the greater of US$50.0 million and 5.0% of Consolidated Net Tangible Assets at any one time outstanding;

(9) Liens to secure Indebtedness (including Capital Lease Obligations) permitted by clause (3) of the second paragraph of the covenant described under the caption “—Certain Covenants—Limitation on Indebtedness;” provided that any such Lien (i) covers only the assets acquired, constructed or improved with such Indebtedness and (ii) is created within 365 days of such acquisition, construction or improvement;

(10) Liens on Cash Equivalents securing Hedging Obligations of the Company or any Restricted Subsidiary (a) that are Incurred for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, or (b) securing letters of credit that support such Hedging Obligations;

(11) Liens incurred or deposits made in the ordinary course of business in connection with worker’s compensation, unemployment insurance or other social security obligations (including any Lien securing letters of credit issued in connection therewith in the ordinary course of business consistent with past practice);

(12) Lien, deposits or pledges to secure the performance of bids, tenders, contracts (other than contracts for the payment of Indebtedness), leases, or other similar obligations arising in the ordinary course of business;

(13) survey exceptions, encumbrances, easements or reservations of, or rights of other for, rights of way, zoning or other restrictions as to the use of properties, and defects in title which, in the case of any of the foregoing, were not incurred or created to secure the payment of Indebtedness, and which in the aggregate do not materially adversely affect the value of such properties or materially impair the use for the purposes of which such properties are held by the Company or any Restricted Subsidiary;

(14) judgment and attachment Liens not giving rise to an Event of Default and notices of lis pendens and associated rights related to litigation being contested in good faith by appropriate proceedings and for which adequate reserves have been made;

(15) Liens, deposits or pledges to secure public or statutory obligations, surety, stay, appeal, indemnity, performance or other similar bonds or obligations; and Liens, deposits or pledges in lieu of such bonds or obligations, or to secure such bonds or obligations, or to secure letters of credit in lieu of or supporting the payment of such bonds or obligations;

(16) Liens in the ordinary course of business in favor of collecting or payor banks having a right of set-off, revocation, refund or chargeback with respect to money or instruments of the Company or any Subsidiary thereof on deposit with or in possession of such bank;

(17) Liens upon specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created in the ordinary course of business for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;

(18) Liens securing reimbursement obligations with respect to commercial letters of credit which encumber documents and other property relating to such letters of credit and products and proceeds thereof;

(19) any interest or title of a lessor, licensor or sublicensor in the property subject to any lease, license or sublicense (other than any property that is the subject of a Sale and Leaseback Transaction);

(20) Liens for taxes, assessments and governmental charges not yet delinquent or being contested in good faith and for which adequate reserves have been established to the extent required by IFRS;

(21) Liens arising from precautionary UCC financing statements regarding operating leases or consignments;

(22) Liens of franchisors in the ordinary course of business not securing Indebtedness;

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(23) Liens imposed by law, such as (i) carriers’, warehousemen’s and mechanics’, materialmen’s, landlords’, or repairmen’s Liens, or (ii) other like Liens arising in the ordinary course of business securing obligations which are not overdue by more than 60 days or which if more than 60 days overdue, the period of grace, if any, related thereto has not expired or which are being contested in good faith by appropriate proceedings; provided that a reserve or other appropriate provision shall have been made therefor as appropriate in accordance with IFRS;

(24) Liens on assets of Restricted Subsidiaries that are not Guarantors securing Indebtedness of such Restricted Subsidiaries permitted to be incurred under the covenant described under “Certain Covenants—Limitation on Indebtedness”;

(25) Liens on Capital Stock or other securities or assets of any Unrestricted Subsidiary that secure Indebtedness of such Unrestricted Subsidiary; and

(26) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods in the ordinary course of business.

“Permitted Refinancing Indebtedness” means any Indebtedness of the Company or any Restricted Subsidiary issued in exchange for, or the net cash proceeds of which are used to extend, refinance, renew, replace, defease or refund other Indebtedness of the Company or any Restricted Subsidiary (other than Indebtedness owed to the Company or to any Subsidiary of the Company); provided that:

(1) the amount of such Permitted Refinancing Indebtedness does not exceed the amount of the Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded (plus all accrued and unpaid interest thereon and the amount of any reasonably determined premium necessary to accomplish such refinancing and such reasonable expenses incurred in connection therewith);

(2) such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded;

(3) if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is subordinated in right of payment to the Notes or the Note Guarantees, such Permitted Refinancing Indebtedness is subordinated in right of payment to the Notes or the Note Guarantees, as applicable, on terms at least as favorable, taken as a whole, to the Holders of Notes as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded;

(4) if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is Pari Passu Debt, such Permitted Refinancing Indebtedness ranks equally in right of payment with, or is subordinated in right of payment to, the Notes or such Note Guarantees; and

(5) such Indebtedness is Incurred by either (a) the Restricted Subsidiary that is the obligor on the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded or (b) the Company or a Guarantor.

“Person” means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company or government or other entity.

“Preferred Stock” means, with respect to any Person, any Capital Stock of such Person that has preferential rights to any other Capital Stock of such Person with respect to dividends or redemptions upon liquidation.

“Qualified Acquisition” means the acquisition by the Company or any Restricted Subsidiary of any Person, subject to the following conditions:

(1) immediately prior to such acquisition, such Person was not an Affiliate of the Company;

(2) immediately after giving effect to such acquisition, the Company properly designates such Person as an Unrestricted Subsidiary in accordance with the Indenture; and

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(3) immediately after giving effect to such acquisition, the Company, directly or indirectly, owns the majority, but not all, of the aggregate of the total voting power of the Voting Stock in such Person, on a fully diluted basis (without regard to directors’ qualifying shares or Investments by foreign nationals mandated by applicable law).

“Rating Agency” means each of Moody’s, S&P, Fitch and, if any of Moody’s, S&P or Fitch ceases to exist or ceases to rate the Notes for reasons outside of the control of the Company, any other “nationally recognized statistical rating organization” within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act selected by the Company as a replacement agency.

“Rating Downgrade Event” means the rating on the Notes is lowered from their rating then in effect by any of the Rating Agencies on any date during the period (the “Trigger Period”) commencing 60 days prior to the first public announcement by the Company of any Change of Control (or pending Change of Control) and ending 60 days following consummation of such Change of Control (which Trigger Period will be extended following consummation of a Change of Control for so long as any of the Rating Agencies has publicly announced that it is considering a possible ratings change); provided that a Rating Downgrade Event otherwise arising by virtue of a particular lowering in rating will not be deemed to have occurred in respect of a particular Change of Control (and thus will not be deemed a Rating Downgrade Event for purposes of the definition of Change of Control Repurchase Event hereunder) if the Rating Agency making the lowering in rating to which this definition would otherwise apply does not announce or publicly confirm or inform the Trustee in writing in response to a request made at the direction of Holders of a majority in principal amount of the then outstanding Notes that the reduction was the result, in whole or in part, of any event or circumstance comprised of or arising as a result of, or in respect of, the applicable Change of Control (whether or not the applicable Change of Control shall have occurred at the time of the Rating Downgrade Event). Notwithstanding the foregoing, no Rating Downgrade Event will be deemed to have occurred in connection with any particular Change of Control unless and until such Change of Control has actually been consummated.

“Reference Treasury Dealer” means each of Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc., plus three others or their affiliates which are primary U.S. Government securities dealers, and their respective successors; provided, however, that if any of the foregoing or their affiliates shall cease to be a primary U.S. Government securities dealer in The City of New York (a “Primary Treasury Dealer”), the Company shall substitute therefor another Primary Treasury Dealer.

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Independent Investment Bank, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Independent Investment Bank by such Reference Treasury Dealer at 3:30 p.m. New York time on the third business day preceding such redemption date.

“Replacement Assets” means (1) non-current assets that will be used or useful in a Permitted Business, (2) substantially all the assets of a Permitted Business, or (3) a majority of the Voting Stock of any Person engaged in a Permitted Business that will become on the date of acquisition thereof a Restricted Subsidiary.

“Restricted Subsidiary” means any Subsidiary of the Company that is not an Unrestricted Subsidiary.

“Rodríguez Family” means (i) Vito Modesto Rodríguez Rodríguez, Jorge Columbo Rodríguez Rodríguez and Claudio José Rodríguez Huaco, (ii) any spouse or child of the individuals referred to in the preceding clause (i) and (iii) any non-natural Person that is an Affiliate of any of the Persons referred to in the preceding clauses (i) and (ii) and with respect to which a Person or Persons listed in the preceding clauses (i) and (ii) owns the majority of the aggregate of the total voting power of the Voting Stock in such non-natural Person, on a fully diluted basis.

“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. and its successors.

“Sale and Leaseback Transaction” means, with respect to any Person, any transaction involving any of the assets or properties of such Person whether now owned or hereafter acquired, whereby such Person sells or otherwise transfers such assets or properties and then or thereafter leases such assets or properties or any part thereof

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or any other assets or properties which such Person intends to use for substantially the same purpose or purposes as the assets or properties sold or transferred.

“San Jacinto” means Agroindustrias San Jacinto S.A.A.

“Significant Subsidiary” means any Subsidiary that would constitute a “significant subsidiary” within the meaning of Rule 1-02(w) of Article 1 of Regulation S-X of the Securities Act.

“SMV” means the Peruvian Superintendencia del Mercado de Valores, or any successor entity.

“Stated Maturity” means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which such installment of interest or principal was scheduled to be paid in the original documentation governing such Indebtedness, and will not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.

“Subordinated Indebtedness” means any Indebtedness that by its terms is subordinated in right of payment to the Notes or any Note Guarantee.

“Subsidiary” means, with respect to any Person:

(1) a corporation a majority of whose Voting Stock is at the time owned or controlled, directly or indirectly, by such Person, one or more Subsidiaries thereof or such Person and one or more Subsidiaries thereof; and

(2) any other Person (other than a corporation), including, without limitation, a partnership, limited liability company, business trust or joint venture, in which such Person, one or more Subsidiaries thereof or such Person and one or more Subsidiaries thereof, directly or indirectly, at the date of determination thereof, has at least majority ownership interest entitled to vote in the election of directors, managers or trustees thereof (or other Person performing similar functions);

provided that Fideicomiso Mercantil Consorcio Azucarero Ecuatoriano and its Subsidiaries (together, the “La Troncal Trust Group”) will be deemed to be Subsidiaries of the Company so long as the results of the La Troncal Trust Group are fully consolidated into the consolidated results of the Company in accordance with IFRS.

“Transaction Date” means, with respect to the incurrence of any Indebtedness by the Company or any of its Restricted Subsidiaries, the date such Indebtedness is to be incurred.

“Treasury Rate” means, with respect to any redemption date, the rate per annum equal to the semiannual equivalent yield to maturity or interpolated (on a day count basis) of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date.

“U.S. Dollar Equivalent” means with respect to any monetary amount in a currency other than U.S. dollars, at any time for determination thereof, the amount of U.S. dollars obtained by converting such foreign currency involved in such computation into U.S. dollars at the spot rate for the purchase of U.S. dollars with the applicable foreign currency as published in The Wall Street Journal in the “Exchange Rates” column under the heading “Currency Trading” on the date two business days prior to such determination.

“Unrestricted Subsidiary” means any Subsidiary of the Company that is designated by the Board of Directors of the Company as an Unrestricted Subsidiary pursuant to a Board Resolution in compliance with the covenant described under the caption “—Certain Covenants—Designation of Restricted and Unrestricted Subsidiaries,” and any Subsidiary of such Subsidiary.

“Voting Stock” of any Person as of any date means the Capital Stock of such Person that is ordinarily entitled to vote in the election of the Board of Directors of such Person.

“Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the number of years obtained by dividing:

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(1) the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by

(2) the then outstanding principal amount of such Indebtedness.

Book Entry; Delivery and Form

The Notes are being offered and sold in this initial offering in the United States solely to “qualified institutional buyers” under Rule 144A under the Securities Act and outside the United States in offshore transactions to persons other than U.S. persons, as defined in Regulation S under the Securities Act, in reliance on Regulation S. Following this offering, the notes may be sold:

to qualified institutional buyers under Rule 144A;

outside the United States in compliance with Regulation S; and

under other exemptions from, or in transactions not subject to, the registration requirements of the Securities Act, as described under “Transfer Restrictions.”

Exchanges between the Global Notes

Transfers by an owner of a beneficial interest in a Regulation S Global Note to a transferee, who takes delivery of that interest through a Note offered and sold in the United States to qualified institutional buyers pursuant to Rule 144A Global Note, will be made only in accordance with applicable procedures and upon receipt by the trustee of a written certification from the transferee of the beneficial interest in the form provided in the indenture to the effect that the transfer is being made to a qualified institutional buyer within the meaning of Rule 144A in a transaction complying with the requirements of Rule 144A. Transfers by an owner of a beneficial interest in a Rule 144A Global Note to a transferee who takes delivery of the interest through a Regulation S Global Note will be made only upon receipt by the trustee of a certification from the transferor that the transfer is being made outside the United States to a non-U.S. person in accordance with Regulation S.

Any beneficial interest in one of the Global Notes that is transferred to a person who takes delivery in the form of an interest in another Global Note will, upon transfer, cease to be an interest in that Global Note and become an interest in the other Global Note and, accordingly, will then be subject to any transfer restrictions and other procedures applicable to beneficial interests in the other Global Note.

Global Notes

Upon receipt of the Regulation S Global Note and the Rule 144A Global Note, DTC will credit, on its internal system, the respective principal amount of the individual beneficial interests represented by such Global Note to the accounts of persons who have accounts with DTC. Such accounts initially will be designated by or on behalf of the Initial Purchasers. Ownership of beneficial interests in a Global Note will be limited to persons who have accounts with DTC (“DTC Participants”), including Euroclear Bank S.A./N.V., as operator of Euroclear System (“Euroclear”) and Clearstream Banking, sociétè anonyme (“Clearstream”), or persons who hold interests through DTC Participants. Ownership of beneficial interests in the Global Notes will be shown on, and the transfer of that ownership will be effected only through, records maintained by DTC or its nominee (with respect to interests of DTC Participants) and the records of DTC Participants (with respect to interests of persons other than DTC Participants).

So long as DTC, or its nominee, is the registered owner or holder of a Global Note, DTC or such nominee, as the case may be, will be considered the sole owner or Holder of the Notes represented by such Global Note for all purposes under the Indenture and the Notes. Except as described in “—Certificated Notes”, owners of beneficial interests in a Global Note will not be entitled to have any portions of such Global Note registered in their names, will not receive or be entitled to receive physical delivery of Notes in certificated form and will not be considered the owners or holders of the Global Note (or any notes represented thereby) under the Indenture or the Notes. In

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addition, no beneficial owner of an interest in a Global Note will be able to transfer that interest except in accordance with DTC’s applicable procedures (in addition to those under the Indenture referred to herein and, if applicable, those of Euroclear and Clearstream.

Euroclear and Clearstream will hold interests in the Global Notes on behalf of their account holders through customers’ securities accounts in their respective names on the books of their respective depositaries, which, in turn, will hold such interests in the Global Notes in customers’ securities accounts in the depositaries’ names on the books of DTC.

Payments of the principal of and interest on Global Notes will be made to DTC or its nominee as the registered owner thereof. Neither we nor any Initial Purchaser will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in the Global Notes or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. We anticipate that DTC or its nominee, upon receipt of any payment of principal or interest in respect of a Global Note representing any Notes held by its nominee, will credit DTC Participants’ accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of such Global Note as shown on the records of DTC or its nominee. We also expect that payments by DTC Participants to owners of beneficial interests in a Global Note held through such DTC Participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers registered in the names of nominees for such customers. Such payments will be the responsibility of such DTC Participants.

Transfers between DTC Participants will be effected in accordance with DTC’s procedures, and will be settled in same-day funds. The laws of some jurisdictions require that certain persons take physical delivery of securities in certificated form. Consequently, the ability to transfer beneficial interests in a Global Note to such persons may be limited. Because DTC can only act on behalf of DTC Participants, who in turn act on behalf of indirect participants and certain banks, the ability of a person having a beneficial interest in a Global Note to pledge such interest to persons or entities that do not participate in the DTC system, or otherwise take actions in respect of such interest, may be affected by the lack of a physical certificated note in respect of such interest. Transfers between accountholders in Euroclear and Clearstream will be effected in the ordinary way in accordance with their respective rules and operating procedures.

Subject to compliance with the transfer restrictions applicable to the Notes described above, crossmarket transfers between DTC participants, on the one hand, and directly or indirectly through Euroclear or Clearstream account holders, on the other hand, will be effected in DTC in accordance with DTC rules on behalf of Euroclear or Clearstream, as the case may be, by its respective depositary; however, such cross-market transactions will require delivery of instructions to Euroclear or Clearstream, as the case may be, by the counterparty in such system in accordance with its rules and procedures and within its established deadlines. Euroclear or Clearstream, as the case may be, will, if the transaction meets its settlement requirements, deliver instructions to its respective depositary to take action to effect final settlement on its behalf by delivering or receiving interests in the Global Notes in DTC, and making or receiving payment in accordance with normal procedures for same day funds settlement applicable to DTC. Euroclear and Clearstream account holders may not deliver instructions directly to the depositaries for Euroclear or Clearstream.

Because of time zone differences, the securities account of a Euroclear or Clearstream account holder purchasing an interest in a Global Note from a DTC Participant will be credited during the securities settlement processing day (which must be a business day for Euroclear or Clearstream, as the case may be) immediately following the DTC settlement date and such credit of any transactions in interests in a Global Note settled during such processing day will be reported to the relevant Euroclear or Clearstream accountholder on such day. Cash received in Euroclear or Clearstream as a result of sales of interests in a Global Note by or through a Euroclear or Clearstream account holder to a DTC Participant will be received for value on the DTC settlement date but will be available in the relevant Euroclear or Clearstream cash account only as of the business day following settlement in DTC.

DTC has advised that it will take any action permitted to be taken by a Holder (including the presentation of Notes for exchange as described below) only at the direction of one or more DTC Participants to whose account or accounts with DTC interests in the Global Notes are credited and only in respect of such portion of the aggregate principal amount of the Notes as to which such DTC Participant or DTC Participants has or have given such

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direction. However, in the limited circumstances described above, DTC will exchange the Global Notes for certificated Notes (bearing a restrictive legend, unless the Company determines otherwise in compliance with applicable law), which will be distributed to its participants. Holders of indirect interests in the Global Notes through DTC Participants have no direct rights to enforce such interests while the Notes are in global form.

The giving of notices and other communications by DTC to DTC Participants, by DTC Participants to persons who hold accounts with them and by such persons to holders of beneficial interests in a Global Note will be governed by arrangements between them, subject to any statutory or regulatory requirements as may exist from time to time.

DTC has advised as follows: DTC is a limited purpose trust company organized under the laws of the State of New York, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the Uniform Commercial Code and a “Clearing Agency” registered pursuant to the provisions of Section 17A of the Exchange Act. DTC was created to hold securities for DTC Participants and to facilitate the clearance and settlement of securities transactions between DTC Participants through electronic book-entry changes in accounts of DTC Participants, thereby eliminating the need for physical movement of certificates. DTC Participants include security brokers and dealers, banks, trust companies and clearing corporations and may include certain other organizations. Indirect access to the DTC system is available to others such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a DTC Participant, either directly or indirectly (“indirect participants”).

Although DTC, Euroclear and Clearstream have agreed to the foregoing procedures in order to facilitate transfers of interests in the Regulation S Global Note and in the Rule 144A Global Note among participants and accountholders of DTC, Euroclear and Clearstream, they are under no obligation to perform or continue to perform such procedures, and such procedures may be discontinued at any time. Neither we nor the Initial Purchasers will have any responsibility for the performance of DTC, Euroclear or Clearstream or their respective participants, indirect participants or accountholders of their respective obligations under the rules and procedures governing their operations.

Certificated Notes

If (1) DTC or any successor to DTC is at any time unwilling or unable to continue as a depositary for a Global Note and a successor depositary is not appointed by us within 90 days, (2) any of the Notes has become immediately due and payable in accordance with “—Events of Default and Remedies” or (3) if the Company, at its sole discretion, determines that the Global Notes will be exchangeable for certificated notes and the Company notifies the Trustee thereof, the Company will issue certificated notes in registered form in exchange for the Regulation S Global Note and the Rule 144A Global Note, as the case may be. Upon receipt of such notice from DTC or a paying agent, as the case may be, the Company will use its best efforts to make arrangements with DTC for the exchange of interests in the Global Notes for certificated Notes and cause the requested certificated Notes to be executed and delivered to the Registrar in sufficient quantities and authenticated by the Registrar for delivery to Holders. Persons exchanging interests in a Global Note for certificated Notes will be required to provide the Registrar with (a) written instruction and other information required by the Company and the Registrar to complete, execute and deliver such certificated Notes and (b) certification that such interest is being transferred in compliance with the Securities Act. In all cases, certificated Notes delivered in exchange for any Global Note or beneficial interests therein will be registered in the names, and issued in any approved denominations, requested by DTC. Certificated Notes will not be eligible for clearing and settlement through the DTC, Euroclear or Clearstream.

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TAXATION

The following discussion summarizes certain Peruvian and U.S. federal income considerations that may be relevant to you if you invest in the notes. This summary is based on laws, regulations, rulings and decisions now in effect in Peru and the United States, which, in each case, may change. Any change could apply retroactively and could affect the continued validity of this summary.

This summary does not describe all of the tax considerations that may be relevant to you or your situation, particularly if you are subject to special tax rules. You should consult your tax advisors about the tax consequences of holding the notes, including the relevance to your particular situation of the considerations discussed below, as well as of state, local and other tax laws.

Peruvian Tax Considerations

The following summary of certain Peruvian tax matters as in force on the date of this offering memorandum describes the principal tax consequences of an investment in the offered notes by a person who is not a resident of Peru and does not hold the offered notes or a beneficial interest therein in connection with the conduct of a trade or business through a permanent establishment in Peru (“non Peruvian holder”). This summary is not intended to be a comprehensive description of all of the tax considerations that may be relevant to a decision to make an investment in the offered notes. In addition, it does not describe any tax consequences: (a) arising under the laws of any taxing jurisdiction other than Peru or (b) applicable to a resident of Peru or to a person with a permanent establishment in Peru.

For purposes of this section, “non-Peruvian holders” means either: (i) a legal entity which has not been incorporated in Peru, except that the notes are assigned to a branch, agent or a permanent establishment in Peru of a foreign entity or (ii) an individual who is not a Peruvian tax resident. For Peruvian tax purposes, an individual is deemed to be a Peruvian tax resident if such individual is (i) a Peruvian citizen and has a regular residence in Peru, or (ii) not a Peruvian citizen but has resided or has remained in Peru for more than 183 calendar days during any 12-month period.

Peru has entered into treaties to avoid double taxation with Brazil, Canada, Chile, and the Andean Community countries. Additionally, Peru is in the process of approving a similar treaty with Mexico.

Income Tax

Payment of interest

Interest, commissions, premiums and other financial expenses in connection with the notes are subject to Peruvian Income Tax, as Peruvian source income, considering that we are domiciled in Peru.

Therefore, accrued interest on the notes received by non-Peruvian holders that are legal entities will be subject to a 4.99% withholding tax. Similarly, interest payments derived from the notes received by non-Peruvian holders who are individuals is subject to withholding income tax at a rate of 4.99%, provided that interest does not derive from a transaction “from or through a tax haven.” If the latter requirement is not fulfilled, the applicable withholding rate will be 30%. In addition, in order to qualify for the preferential withholding income tax rate of 4.99%, the non-Peruvian holders and the Company must not be deemed related parties. We are required to act as withholding agent for income tax, if any, due with respect to interest paid on the notes. We have agreed, subject to specific exceptions and limitations, to pay additional amounts to the holders of the notes in respect of the Peruvian income taxes mentioned above. See “Description of the Notes—Additional Amounts”.

Capital gains

Proceeds received by a non-Peruvian holder on a sale, exchange or disposition of a beneficial interest in the Global Notes held through a Clearing System will not be subject to any Peruvian withholding or capital gains tax. In the event that the beneficial interests in the Global Notes are exchanged for definitive notes, any capital gain arising from the sale, exchange or other disposition of these notes by non-Peruvian holders would be subject to Peruvian income tax with a 5% rate, only if these two requirements are satisfied: (i) the notes are registered in the

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Securities Public Registry and (ii) the notes are negotiated in a Peruvian Stock Market. Otherwise, capital gains will be taxable at a 30% rate.

Capital gain would be the positive difference between the sale value and the acquisition value, taking into consideration that the acquisition value has to be certified by Peruvian Tax Administration through a request submitted by the seller. This certification is not required if the sale is through the Peruvian Stock Market.

The Income Tax Law provides a temporal exemption on the assessment of income tax on capital gains resulting in the sale of securities issued by Peruvian entities performed by individuals (Peruvian or foreign), for the first S/.18,250 (5 UIT) gained in a calendar year. This exemption will be in effect until December 31, 2012. Nevertheless, it is customary to extend the validity of these exemptions.

Prospective purchasers should discuss with their own tax advisors the application of any income tax described herein to their particular situations.

Value Added Tax (VAT)

Payments of interest on the notes made to holders of the notes shall be subject to Peruvian value added tax (Impuesto General a las Ventas) provided that the proceeds from the offering of the notes will be used in Peru.

On June 9, 2011, an amendment was introduced to the Peruvian Value Added Tax Law, which includes a new exemption. Said amendment exempts from VAT the payment of interest generated by securities registered in the Securities Public Registry (“Registro Público del Mercado de Valores”) and issued by Peruvian entities which were offered in an international issuance if (i) it has a local tranche within Peru and (ii) the issuance is made pursuant to the Peruvian Securities Law or the Peruvian Investment Fund Law. This exemption will expire on December, 31, 2012. Such exemption has been commonly extended, however, we cannot assure that such exemption will be renewed after December 31, 2012. We expect to comply with the exemption requirements, and therefore, the payment of interest under the notes shall be VAT-exempt until December 31, 2012, unless such exemption is extended.

Financial Transaction Tax

Finally, it is important to mention that in Peru there is a Financial Transactions Tax (“FTT”) which is a tax at a 0.005% rate on debits and credits in Peruvian bank -or other financial institutions- accounts, either in national or foreign currency. If the interest from the notes or the issue price paid for the notes is deposited in a Peruvian Financial System (“PFS”) bank account, such amount will be levied at the corresponding FTT tax rate. The taxpayer of the FTT is the holder of the PFS bank account.

U.S. Federal Income Tax Considerations

The following is a description of certain U.S. federal income tax considerations relevant to the acquisition, ownership, disposition and retirement of notes by a holder thereof. This description only applies to notes held as capital assets and does not address, except as set forth below, aspects of U.S. federal income taxation that may be applicable to holders that are subject to special tax rules, such as:

financial institutions,

insurance companies,

real estate investment trusts,

regulated investment companies,

certain former citizens or long-term residents of the United States,

grantor trusts,

tax-exempt organizations,

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dealers or traders in securities or currencies, including those that mark to market,

holders that will hold a note as part of a position in a straddle or as part of a hedging, conversion or integrated transaction for U.S. federal income tax purposes,

holders that will hold the notes through a partnership or other pass-through entity, or

U.S. Holders (as defined below) that have a functional currency other than the U.S. dollar.

Moreover, this description does not address the U.S. federal estate and gift tax or alternative minimum tax consequences of the acquisition, ownership, disposition or retirement of the notes and does not address the U.S. federal income tax treatment of holders that do not acquire the notes as part of the initial distribution at their issue price including purchasers of additional notes. The “issue price” of a note is equal to the first price to investors (not including bond houses, brokers or similar persons or organizations acting in the capacity of underwriters, placement agents or wholesalers) at which a substantial amount of the notes is sold for money. Each prospective purchaser should consult its tax advisor with respect to the U.S. federal, state, local and foreign tax consequences of acquiring, holding and disposing of the notes.

This description is based on the Internal Revenue Code of 1986, as amended (the “Code”), existing and proposed Treasury Regulations (“Regulations”), administrative pronouncements and judicial decisions, each as available and in effect on the date hereof. All of the foregoing is subject to change, possibly with retroactive effect, or differing interpretations which could affect the tax consequences described herein.

For purposes of this description, a “U.S. Holder” is a beneficial owner of the notes who for U.S. federal income tax purposes is:

an individual who is a citizen or resident of the United States;

a corporation or any other entity treated as a corporation for U.S. federal income tax purposes organized in or under the laws of the United States, any state thereof or the District of Columbia;

an estate the income of which is subject to U.S. federal income taxation regardless of its source; or

a trust (1) that is subject to the primary supervision of a court within the United States and the control of one or more U.S. persons as described in Section 7701(a)(30) of the Code or (b) that has a valid election in effect under applicable Regulations to be treated as a U.S. person.

A Non-U.S. Holder is a beneficial owner of notes that is neither a U.S. Holder nor a partnership (or any other entity treated as a partnership for U.S. federal income tax purposes).

If a partnership (or any other entity treated as a partnership for U.S. federal income tax purposes) holds the notes, the tax treatment of the partnership and a partner in such partnership generally will depend on the status of the partner and the activities of the partnership. Such partner or partnership should consult its own tax advisor regarding the specific consequences of the acquisition, ownership and disposition of the notes.

TREASURY DEPARTMENT CIRCULAR 230 DISCLOSURE

PURSUANT TO TREASURY DEPARTMENT CIRCULAR 230, WE HEREBY INFORM YOU THAT THE DESCRIPTION SET FORTH HEREIN WITH RESPECT TO U.S. FEDERAL TAX ISSUES WAS NOT INTENDED OR WRITTEN TO BE USED, AND SUCH DESCRIPTION CANNOT BE USED, BY ANY TAXPAYER FOR THE PURPOSE OF AVOIDING ANY PENALTIES THAT MAY BE IMPOSED ON THE TAXPAYER UNDER THE CODE. SUCH DESCRIPTION WAS WRITTEN TO SUPPORT THE PROMOTION OR MARKETING OF THE NOTES. TAXPAYERS SHOULD SEEK ADVICE BASED ON THE TAXPAYER’S PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.

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Interest

It is expected, and this discussion assumes, that the notes will not be issued with original issue discount (as such term is described under the Regulations) for U.S. federal income tax purposes. Therefore, if you are a U.S. Holder, interest paid to you on a note, including Additional Amounts, if any, with respect thereto as described under “Description of the Notes—Additional Amounts,” will be includible in your gross income as ordinary interest income in accordance with your usual method of U.S. federal income tax accounting. In addition, interest on the notes will be treated as foreign source income for U.S. federal income tax purposes.

We may redeem all or part of the notes at any time at a redemption price equal to 100% of the principal amount of notes redeemed plus the applicable “make-whole” premium (see “Description of the Notes—Optional Redemption”). Similarly, you may require us to repurchase your notes in the event of a change of control repurchase event (see “Description of the Notes—Repurchase at the Option of Holders—Change of Control”). Under the Regulations governing contingent payment debt instruments (“CPDIs”), the possibility of a contingent payment on a note may be disregarded if the likelihood of the contingent payment, as of the issue date, is “remote or incidental.” We believe that as of the expected issue date of the notes, the likelihood of either a change of control repurchase event or our redemption of the notes is, for this purpose, remote and, therefore, we do not intend to treat the notes as CPDIs. Our determination, however, is not binding on the Internal Revenue Service (“IRS”), and if the IRS was to challenge this determination, you may be required to accrue income on the notes that you own in excess of stated interest, and to treat as ordinary income rather than capital gain any income realized on the taxable disposition of such notes before the resolution of the contingency. In the event that such contingency were to occur, it would affect the amount and timing of the income that you recognize. U.S. Holders are urged to consult their own tax advisors regarding the potential application to the notes of the CPDI rules and the consequences thereof. The remainder of this discussion assumes that the notes will not be treated as CPDIs.

Subject to the discussion below under the caption “—U.S. Backup Withholding Tax and Information Reporting,” if you are a Non-U.S. Holder, payments to you of interest on a note generally will not be subject to U.S. federal income tax unless the income is effectively connected with your conduct of a trade or business in the United States.

Sale, Exchange, Retirement or Other Taxable Disposition

If you are a U.S. Holder, upon the sale, exchange, retirement or other taxable disposition of a note you will recognize taxable gain or loss equal to the difference, if any, between the amount realized on the sale, exchange, retirement or other taxable disposition, other than accrued but unpaid interest which will be taxable as ordinary interest income, and your adjusted tax basis in the note. Your adjusted tax basis in a note generally will equal the cost of the note to you. Any such gain or loss will be capital gain or loss. If you are a noncorporate U.S. Holder, the maximum marginal U.S. federal income tax rate applicable to the gain will be lower than the maximum marginal U.S. federal income tax rate applicable to ordinary income (other than certain dividends) if your holding period for the notes exceeds one year (i.e., such gain is long-term capital gain). Any gain or loss realized on the sale, exchange, retirement or other taxable disposition of a note generally will be treated as U.S. source gain or loss, as the case may be. The deductibility of capital losses is subject to limitations.

Subject to the discussion below under the caption “—U.S. Backup Withholding Tax and Information Reporting,” if you are a Non-U.S. Holder, any gain realized by you upon the sale, exchange, retirement or other taxable disposition of a note generally will not be subject to U.S. federal income tax, unless:

the gain is effectively connected with your conduct of a trade or business in the United States; or

if you are an individual Non-U.S. Holder, you are present in the United States for 183 days or more in the taxable year of the sale, exchange, retirement or other taxable disposition and certain other conditions are met.

U.S. Backup Withholding Tax and Information Reporting

A backup withholding tax and information reporting requirements apply to certain payments of principal of, and interest on, an obligation and to proceeds of the sale or redemption of an obligation, to certain holders of notes that

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are U.S. persons. Information reporting generally will apply to payments of principal of, and interest on, notes, and to proceeds from the sale or redemption of, notes within the United States, or by a U.S. payor or through certain U.S.-related financial intermediaries, to a holder of notes that is a U.S. person (other than an exempt recipient). The payor will be required to backup withhold on payments made within the United States, or by a U.S. payor or through certain U.S.-related financial intermediaries, on a note to a holder of a note that is a U.S. person, other than an exempt recipient, if the holder fails to furnish its correct taxpayer identification number or otherwise fails to comply with, or establish an exemption from, the backup withholding requirements. Payments within the United States, or by a U.S. payor or through certain U.S. -related financial intermediaries, of principal and interest to a holder of a note that is not a U.S. person will not be subject to backup withholding tax and information reporting requirements if an appropriate certification is provided by the holder to the payor and the payor does not have actual knowledge or a reason to know that the certificate is incorrect. The backup withholding tax rate is 28% for taxable years beginning before January 1, 2013.

Backup withholding is not an additional tax. You generally will be entitled to credit any amounts withheld under the backup withholding rules against your U.S. federal income tax liability provided the required information is furnished to the IRS in a timely manner.

In the case of payments to certain trusts or certain partnerships, the persons treated as the owners of the trust or the partners of the partnership, as the case may be, will be required to provide the certification discussed above in order to establish an exemption from backup withholding tax and information reporting requirements.

Medicare Tax

For taxable years beginning after December 31, 2012, a U.S. Holder that is an individual or estate, or a trust that does not fall into a special class of trusts that is exempt from such tax, will be subject to a 3.8% tax (the “Medicare tax”) on the lesser of (1) the U.S. Holder’s “net investment income” (in the case of individuals) or “undistributed net investment income” (in the case of estates and trusts) for the relevant taxable year and (2) the excess of the U.S. Holder’s “modified adjusted gross income” (in the case of individuals) or “adjusted gross income” (in the case of estates and trusts) for the taxable year over a certain threshold (which in the case of individuals will be between US$125,000 and US$250,000, depending on the individual’s circumstances). A U.S. Holder’s net investment income generally will include its interest income on the notes and its net gains from the disposition of the notes, unless such interest income or net gains are derived in the ordinary course of the conduct of a trade or business (other than a trade or business that consists of certain passive or trading activities). U.S. Holders that are individuals, estates or trusts should consult their own tax advisors regarding the applicability of the Medicare tax to their income and gains in respect of the notes.

“Specified Foreign Financial Asset” Reporting

Under legislation enacted in 2010, owners of “specified foreign financial assets” with an aggregate value in excess of US$50,000 (and in some circumstances, a higher threshold), may be required to file an information report with respect to such assets with their U.S. federal income tax returns. “Specified foreign financial assets” generally include any financial accounts maintained by foreign financial institutions as well as any of the following, but only if they are not held in accounts maintained by financial institutions: (i) stocks and securities issued by non-U.S. persons, (ii) financial instruments and contracts held for investment that have non-U.S. issuers or counterparties and (iii) interests in foreign entities. U.S. Holders are urged to consult their tax advisors regarding the application of this legislation to their ownership of the notes.

The above description is not intended to constitute a complete analysis of all tax consequences relating to the ownership of the notes. Prospective purchasers of notes should consult their own tax advisors concerning the tax consequences of their particular situations.

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PLAN OF DISTRIBUTION

Subject to the terms and conditions contained in a purchase agreement between us and the initial purchasers, we have agreed to sell to the initial purchasers, and each of the initial purchasers has, severally and not jointly, agreed to purchase from us, the principal amount of the notes that appears opposite its name in the table below.

Initial Purchasers Principal

Amount of Notes

Merrill Lynch, Pierce, Fenner & Smith Incorporated .....................................................................................................

US$162,500,000

Citigroup Global Markets Inc. .............................................................................................. 162,500,000 Total....................................................................................................................................... US$325,000,000

The purchase agreement provides that the obligations of the initial purchasers to purchase the notes offered hereby are subject to certain conditions precedent and that the initial purchasers will purchase all of the notes offered by this offering memorandum if any of the notes are purchased.

After the initial offering, the initial purchasers may change the issue price and other selling terms.

We have agreed to indemnify the initial purchasers against certain liabilities, including liabilities under the Securities Act, and to contribute to payments the initial purchasers may be required to make in respect of any of these liabilities.

The notes have not been registered under the Securities Act. Each initial purchaser has agreed that it will offer or sell the notes only (1) in the United States to qualified institutional buyers in reliance on Rule 144A under the Securities Act or (2) in offshore transactions in reliance on Regulation S under the Securities Act. See “Transfer Restrictions”.

New Issue of Securities

The notes are a new issue of securities with no established trading market. Application has been made to the Irish Stock Exchange for the notes to be admitted to the Official List and to trading on the Global Exchange Market which is the exchange regulated market of the Irish Stock Exchange. However, we cannot assure you that the application will be approved. The initial purchasers may make a market in the notes after completion of the offering, but will not be obligated to do so, and may discontinue any market-making activities at any time without notice. Neither we nor the initial purchasers can provide any assurance as to the liquidity of the trading market for the notes or that an active public market for the notes will develop. If an active public trading market for the notes does not develop, the market price and liquidity of the notes may be adversely affected.

No Sales of Similar Securities

We and the Guarantors have agreed that we will not, for a period of 90 days after the date of this offering memorandum, without the prior consent of the initial purchasers, offer, sell, contract to sell, pledge, otherwise dispose of, or enter into any transaction which is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by us or any of our direct or indirect subsidiaries, directly or indirectly, or announce the offering, of any debt securities issued or guaranteed by us (other than the notes), and having a tenor of greater than one year, except in an offering exclusively offered, directed and sold within Peru.

Stabilization Transactions

In connection with the offering of the notes, the initial purchasers may engage in over-allotment and stabilizing transactions, but are not required to do so. Over-allotment involves sales in excess of the offering size, which creates a short position for the initial purchasers. Stabilizing transactions involve bids to purchase the notes in the open market for the purpose of pegging, fixing or maintaining the price of the notes. Stabilizing transactions may cause the price of the notes to be higher than it would otherwise be in the absence of those transactions. If the initial purchasers engage in stabilizing covering transactions, they may discontinue them at any time.

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Sales Outside the United States

Neither we nor the initial purchasers are making an offer to sell, or seeking offers to buy, the notes in any jurisdiction where the offer and sale is not permitted. You must comply with all applicable laws and regulations in force in any jurisdiction in which you purchase, offer or sell the notes or possess or distribute this offering memorandum, and you must obtain any consent, approval or permission required for your purchase, offer or sale of the notes under the laws and regulations in force in any jurisdiction to which you are subject or in which you make such purchases, offers or sales. Neither we nor the initial purchasers will have any responsibility therefor.

Peru

In Peru, this offering will be considered a public offering directed exclusively to institutional investors under CONASEV Resolution No. 079-2008-EF/94.01.1.

The notes and this offering memorandum have been registered with the SMV in accordance with the procedure set forth in SMV Resolution No. 004-2011-EF/94.01.1, applicable to international offerings with a placement tranche in Peru executed in reliance with Rule 144A of the Securities Act.

In order to purchase the notes, institutional investors in Peru must sign a statement representing that they understand (i) differences which exist among the accounting and tax treatment in Peru and the country or countries where the notes will be traded, and (ii) the terms and conditions of the notes.

Notice to Prospective Investors in the European Economic Area

In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”), each initial purchaser has requested and agreed that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the “Relevant Implementation Date”), it has not made and will not make an offer for the notes which are the subject of the offering contemplated in this offering memorandum to the public in that Relevant Member State other than:

A. to any legal entity which is a qualified investor as defined in the Prospectus Directive;

B. to fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150, natural or legal persons (other than qualified investors as defined in the Prospectus Directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of Merrill Lynch, Pierce, Fenner & Smith Incorporated and Citigroup Global Markets Inc.; or

C. in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of notes shall require the Issuer, the initial purchasers or the Guarantors to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive.

Each person in a Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”) who receives any communication in respect of, or who acquires any notes under, the offers to the public contemplated in this offering memorandum will be deemed to have represented, warranted and agreed to and with each initial purchaser and the Issuer that:

(a) it is a qualified investor within the meaning of the law in that Relevant Member State implementing Article 2(1)(e) of the Prospectus Directive; and

(b) in the case of any notes acquired by it as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, (i) the notes acquired by it in the offering have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Relevant Member State other than qualified investors, as that term is defined in the Prospectus Directive, or in circumstances in which the prior consent of Merrill Lynch, Pierce, Fenner & Smith Incorporated and Citigroup Global Markets Inc. has been given to the offer or resale; or (ii) where notes have been acquired by it on behalf of persons in any Relevant Member State other than qualified investors, the offer of those notes to it is not treated under the Prospectus Directive as having been made to such persons.

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For the purpose of the above provisions, the expression “an offer to the public” in relation to any notes in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the notes to be offered so as to enable an investor to decide to purchase or subscribe the notes, as the same may be varied in the Relevant Member State by any measure implementing the Prospectus Directive in the Relevant Member State and the expression “Prospectus Directive” means Directive 2003/71/EC (including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member States) and includes any relevant implementing measure in the Relevant Member State and the expression “2010 PD Amending Directive” means Directive 2010/73/EU.

Notice to Prospective Investors in the United Kingdom

Each of the initial purchasers has represented and agreed that:

(a) it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000 ("FSMA")) received by it in connection with the issue or sale of any notes in circumstances in which Section 21(1) of the FSMA does not apply to the Issuer or the Guarantors; and

(b) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the notes in, from or otherwise involving the United Kingdom.

In addition, in the United Kingdom, this document is being distributed only to, and is directed only at, and any offer subsequently made may only be directed at persons who are “qualified investors” (as defined in the Prospectus Directive) (i) who have professional experience in matters relating to investments falling within Article 19 (5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”) and/or (ii) who are high net worth companies (or persons to whom it may otherwise be lawfully communicated) falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “relevant persons”). This document must not be acted on or relied on in the United Kingdom by persons who are not relevant persons. In the United Kingdom, any investment or investment activity to which this document relates is only available to, and will be engaged in with, relevant persons.

Republic of Chile

The notes will not be registered under Law 18,045, as amended, of Chile with the Superintendencia de Valores y Seguros (Chilean Securities Commission), and accordingly, they may be not be offered to persons in Chile, except in circumstances that do not constitute a public offering under Chilean law.

Republic of Colombia

The notes have not been and will not be offered in Colombia through a public offering of securities pursuant to Colombian laws and regulations, nor will they be registered in the Colombian National Registry of Securities and Issuers or listed on a regulated securities trading system such as the Colombian Stock Exchange.

Other Relationships

Some of the initial purchasers and their affiliates have engaged in, and may in the future engage in, investment banking and other commercial dealings in the ordinary course of business with us or our affiliates. They have received, or may in the future receive, customary fees and commissions for these transactions.

In addition, in the ordinary course of their business activities, the initial purchasers and their affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers. Such investments and securities activities may involve securities and/or instruments of ours or our affiliates. Certain of the initial purchasers or their affiliates that have a lending relationship with us routinely hedge their credit exposure to us consistent with their customary risk management policies. Typically, such initial purchasers and their affiliates would hedge such exposure by entering into transactions which consist of either the

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purchase of credit default swaps or the creation of short positions in our securities, including potentially the notes offered hereby. Any such short positions could adversely affect future trading prices of the notes offered hereby. The initial purchasers and their affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.

Settlement

Delivery of the notes is expected on or about August 2, 2012, which will be the fifth business day following the date of pricing of the notes. Purchasers who wish to trade notes on the date of pricing or the next succeeding business day will be required, by virtue of the fact that the notes initially will settle in T+5, to specify an alternate settlement cycle at the time of any such trade to prevent a failed settlement. Purchasers of the notes who wish to trade the notes on the pricing date or the next succeeding business day should consult their own advisor.

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TRANSFER RESTRICTIONS

The notes have not been registered and will not be registered under the Securities Act, any U.S. state securities laws or the laws of any other jurisdiction (other than Peru), and may not be offered or sold except pursuant to an effective registration statement or pursuant to transactions exempt from, or not subject to, registration under the Securities Act and the securities laws of any other jurisdiction. Accordingly, the notes are being offered and sold only:

in the United States to qualified institutional buyers (as defined in Rule 144A) in reliance on Rule 144A under the Securities Act; and

outside of the United States, to certain persons, other than U.S. persons, in offshore transactions meeting the requirements of Rule 903 in reliance on Regulation S under the Securities Act.

The notes are being offered in Peru only to “institutional investors” (as such term is defined in the Seventh Final Disposition of CONASEV Resolution No. 141-98-EF/94.10.1).

Purchasers’ Representations and Restrictions on Resale and Transfer

Each purchaser of notes (other than the initial purchasers in connection with the initial issuance and sale of notes) and each owner of any beneficial interest therein will be deemed, by its acceptance or purchase thereof, to have represented and agreed as follows:

(1) it is purchasing the notes for its own account or an account with respect to which it exercises sole investment discretion and it and any such account is either (a) a qualified institutional buyer and is aware that the sale to it is being made pursuant to Rule 144A or (b) a non-U.S. person that is outside the United States;

(2) it acknowledges that the notes have not been registered under the Securities Act or with any securities regulatory authority of any U.S. state or any other jurisdiction (other than Peru) and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except as set forth below;

(3) it understands and agrees that notes initially offered in the United States to qualified institutional buyers will be represented by a Global Note and that notes offered outside the United States pursuant to Regulation S will be represented by a separate Global Note;

(4) it will not resell or otherwise transfer any of such notes except (a) to us, (b) within the United States to a qualified institutional buyer in a transaction complying with Rule 144A under the Securities Act, (c) outside the United States in compliance with Rule 903 or 904 under the Securities Act, (d) pursuant to another exemption from registration under the Securities Act (if available) or (e) pursuant to an effective registration statement under the Securities Act;

(5) it agrees that it will give to each person to whom it transfers the notes notice of any restrictions on transfer of such notes;

(6) it acknowledges that prior to any proposed transfer of notes (other than pursuant to an effective registration statement), the holder of such notes may be required to provide certifications relating to the manner of such transfer as provided in the indenture governing the notes;

(7) it acknowledges that the trustee, registrar or transfer agent for the notes will not be required to accept for registration the transfer of any notes, except upon presentation of evidence satisfactory to us that the restrictions set forth herein have been complied with;

(8) it acknowledges that we, the initial purchasers and other persons will rely upon the truth and accuracy of the foregoing acknowledgements, representations and agreements and agrees that if any of the acknowledgements, representations and agreements deemed to have been made by its purchase of the notes are no longer accurate, it will promptly notify us and the initial purchasers; and

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(9) if it is acquiring the notes as a fiduciary or agent for one or more investor accounts, it represents that it has sole investment discretion with respect to each such account and it has full power to make the foregoing acknowledgements, representations and agreements on behalf of each account.

Representations and Restrictions on Resale and Transfer in the European Economic Area

Each person in a Relevant Member State who receives any communication in respect of, or who acquires any notes under, the offers to the public contemplated in this offering memorandum will be deemed to have represented, warranted and agreed to and with each initial purchaser and the Issuer that:

(a) it is a qualified investor within the meaning of the law in that Relevant Member State implementing Article 2(1)(e) of the Prospectus Directive; and

(b) in the case of any notes acquired by it as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, (i) the notes acquired by it in the offering have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Relevant Member State other than qualified investors, as that term is defined in the Prospectus Directive, or in circumstances in which the prior consent of Merrill Lynch, Pierce, Fenner & Smith Incorporated and Citigroup Global Markets Inc. has been given to the offer or resale; or (ii) where notes have been acquired by it on behalf of persons in any Relevant Member State other than qualified investors, the offer of those notes to it is not treated under the Prospectus Directive as having been made to such persons.

Representations and Restrictions on Resale and Transfer of Peruvian Purchasers

The notes are being offered in Peru only to “institutional investors” (as such term is defined in the Seventh Final Disposition of CONASEV Resolution No. 141-98-EF/94.10.1).

The notes in Peru are subject to the transfer and resale restrictions and may not be transferred or resold in Peru except as permitted under CONASEV Resolution No. 079-2008-EF/94.01.1.

Legends

The following is the form of restrictive legend which will appear on the face of the Rule 144A Global Note (unless we determine otherwise in compliance with applicable law), and which will be used to notify transferees of the foregoing restrictions on transfer:

“THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY U.S. STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS NOTE, AGREES FOR THE BENEFIT OF THE ISSUER THAT THIS NOTE OR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1) TO THE ISSUER, (2) SO LONG AS THIS NOTE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”), TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A) IN ACCORDANCE WITH RULE 144A, (3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR 904 OF REGULATION S UNDER THE SECURITIES ACT, (4) PURSUANT TO ANOTHER EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT (IF AVAILABLE) OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND IN EACH OF SUCH CASES IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR OTHER APPLICABLE JURISDICTION. THE HOLDER HEREOF, BY PURCHASING THIS NOTE, REPRESENTS AND AGREES THAT IT SHALL NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO ABOVE.

162

THIS LEGEND MAY BE REMOVED SOLELY AT THE DISCRETION AND AT THE DIRECTION OF THE ISSUER.”

The following is the form of restrictive legend which will appear on the face of the Regulation S Global Note (unless we determine otherwise in compliance with applicable law), and which will be used to notify transferees of the foregoing restrictions on transfer:

“THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY U.S. STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS NOTE, AGREES THAT NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION AND IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY OTHER APPLICABLE JURISDICTION.

For further discussion of the requirements (including the presentation of transfer certificates) under the indenture to effect exchanges or transfers of interest in Global Note and certificated notes, see “Description of the Notes”.

163

LEGAL MATTERS

The validity of the notes will be passed upon for us by Milbank, Tweed, Hadley & McCloy LLP, our U.S. counsel, as to matters of U.S. Federal and New York law and for the initial purchasers by Shearman & Sterling LLP, U.S. counsel to the initial purchasers, as to matters of U.S. Federal and New York law.

Certain matters of Peruvian law relating to the notes will be passed upon for us by Rubio Leguía Normand, our Peruvian counsel. Miranda & Amado Abogados, Peruvian counsel to the initial purchasers, will pass upon certain matters of Peruvian law relating to the notes for the initial purchasers.

INDEPENDENT AUDITORS

Our audited consolidated annual financial statements as of December 31, 2011 and 2010 and at January 1, 2010 (transition date) and for the years ended December 31, 2011 and 2010, included in this offering memorandum have been audited by Dongo-Soria Gaveglio y Asociados Sociedad Civil de Responsabilidad Limitada, a member firm of PricewaterhouseCoopers, independent auditors, as stated in their audit report appearing herein. Dongo-Soria Gaveglio y Asociados Sociedad Civil de Responsabilidad Limitada are certified public accountants under the applicable rules of the Association of Public Accountants of Lima, Peru (Colegio de Contadores Publicos de Lima).

164

LISTING AND GENERAL INFORMATION

1. The Global Notes have been accepted for clearance and settlement through DTC, Euroclear and Clearstream. The CUSIP and ISIN numbers for the notes are as follows:

Rule 144A

Global Note Regulation S Global Note

CUSIP................................................................................................ 21987V AA2 P31353 AA6 ISIN ................................................................................................... US21987VAA26 USP31353AA66

2. Copies of our (i) audited consolidated annual financial statements at and for the years ended December 31, 2011 and 2010, (ii) unaudited condensed consolidated interim financial statements at and for the period ended March 31, 2012, (iii) future audited consolidated annual financial statements, and (iv) any future unaudited condensed consolidated interim financial statements, if any, and copies of our articles of association and our by-laws (estatutos sociales), copies of the articles of association and by-laws of each of the Guarantors, as well as the indenture (including forms of notes and the guarantees), may be obtained free of charge at our principal executive office at Av. República de Panamá 2461, La Victoria, Lima 13, Peru. For the life of the listing particulars, the documents referred to this paragraph may be inspected, by physical or electronic means.

3. Except as disclosed in this offering memorandum, there has been no material adverse change, or any development reasonably likely to involve an adverse material change, in our and the Guarantors’ condition (financial or otherwise) and in our and the Guarantors’ general affairs since December 31, 2011, the date of our latest audited financial statements included in this offering memorandum and there has been no significant change in our or the Guarantors’ financial or trading position since March 31, 2012.

4. Except as disclosed in this offering memorandum, we and the Guarantors are not involved in any legal, governmental, litigation or arbitration proceedings (including any such proceedings of which we are aware), during a period covering the last 12 months), relating to claims or amounts that are material nor so far as we or each of the Guarantors are aware is any such legal, governmental, litigation or arbitration threatened.

5. Application has been made to the Irish Stock Exchange for the approval of this document as Listing Particulars. Application has been made to the Irish Stock Exchange for the notes to be admitted to the Official List and to trading on the Global Exchange Market which is the exchange regulated market of the Irish Stock Exchange. The Global Exchange Market is not a regulated market for the purposes of Directive 2004/39/EC. We will comply with any undertakings assumed or undertaken by us from time to time to the Global Exchange Market of the Irish Stock Exchange in connection with the notes, and we will furnish to them all such information as the rules of the Global Exchange Market of the Irish Stock Exchange may require in connection with the listing of the notes.

6. The issuance of the notes was authorized by our shareholders on July 16, 2012. The issuance of each of the guarantees was authorized by the respective Boards of Directors of Casa Grande, Cartavio, San Jacinto and Azucarera Olmos on July 16, 2012.

7. We and the Guarantors accept responsibility for the information contained in this offering memorandum. To the best of our knowledge, having taken all reasonable care to ensure that such is the case, the information contained in this offering memorandum is in accordance with the facts and does not omit anything likely to affect the import of such information.

8. Arthur Cox Listing Services Limited is acting solely in its capacity as listing agent for the Issuer in connection with the notes and is not itself seeking admission of the notes to trading on the Global Exchange Market of the Irish Stock Exchange.

9. Coazucar was incorporated on October 26, 2005 in Lima, Peru, pursuant to registration number 11810689 and its registered address is Av. República de Panamá 2461, La Victoria, Lima 13, Peru.

10. Casa Grande was incorporated on May 13, 1997 in Trujillo, Peru, pursuant to registration number 11001178 and its registered address is Av. Parque Fábrica s/n Casa Grande, Ascope, La Libertad, Peru. Its Board of

165

Directors consists of Jorge Columbo Rodríguez Rodríguez (President), Vito Modesto Rodríguez Rodríguez, Claudio José Rodríguez Huaco, José Odón Rodríguez Rodríguez and John Carty Chirinos, all of whose business address is Av. República de Panamá 2461, La Victoria, Lima 13, Peru. Two members of its Board of Directors, Jorge Columbo Rodríguez Rodríguez and Vito Modesto Rodríguez Rodríguez, indirectly own a majority ownership interest in Casa Grande. Coazucar owns 57.1% of the outstanding shares of Casa Grande. The rights of Coazucar as shareholder of Casa Grande are contained in Casa Grande’s bylaws. Casa Grande operates in accordance with its bylaws and with the provisions of Peruvian law.

11. Cartavio was incorporated on April 28, 1997 in Trujillo, Peru, pursuant to registration number 11003296 and its registered address is Plaza la Concordia Nº 18 Centro Poblado de Cartavio Distrito de Santiago de Cao, Ascope, La Libertad, Peru. Its Board of Directors consists of Vito Modesto Rodríguez Rodríguez (President), Jorge Columbo Rodríguez Rodríguez and Claudio José Rodríguez Huaco, all of whose business address is Av. República de Panamá 2461, La Victoria, Lima 13, Peru. Two members of its Board of Directors, Jorge Columbo Rodríguez Rodríguez and Vito Modesto Rodríguez Rodríguez, indirectly own a majority ownership interest in Cartavio. Coazucar owns 87.2% of the outstanding shares of Cartavio. The rights of Coazucar as shareholder of Cartavio are contained in Cartavio’s bylaws. Cartavio operates in accordance with its bylaws and with the provisions of Peruvian law.

12. San Jacinto was incorporated on June 22, 1992 in Trujillo, Peru, pursuant to registration number 11170681 and its registered address is Plaza la Concordia Nº 18 Centro Poblado de Cartavio Distrito de Santiago de Cao, Ascope, La Libertad, Peru. Its Board of Directors consists of Jorge Columbo Rodríguez Rodríguez (President), Vito Modesto Rodríguez Rodríguez and Claudio José Rodríguez Huaco, all of whose business address is Av. República de Panamá 2461, La Victoria, Lima 13, Peru. Two members of its Board of Directors, Jorge Columbo Rodríguez Rodríguez and Vito Modesto Rodríguez Rodríguez, indirectly own a majority ownership interest in San Jacinto. Coazucar owns 82.6% of the outstanding shares of San Jacinto. The rights of Coazucar as shareholder of San Jacinto are contained in San Jacinto’s bylaws. San Jacinto operates in accordance with its bylaws and with the provisions of Peruvian law.

13. Azucarera Olmos was incorporated on May 9, 2012 in Lima, Peru, pursuant to registration number 12847508 and its registered address is Av. República de Panamá 2461, La Victoria, Lima 13, Peru. Its Board of Directors consists of Jorge Columbo Rodríguez Rodríguez (President), Vito Modesto Rodríguez Rodríguez and Claudio José Rodríguez Huaco, all of whose business address is Av. República de Panamá 2461, La Victoria, Lima 13, Peru. Two members of its Board of Directors, Jorge Columbo Rodríguez Rodríguez and Vito Modesto Rodríguez Rodríguez, indirectly own a complete ownership interest in Azucarera Olmos. Coazucar owns 100.0% of the outstanding shares of Azucarera Olmos.

14. We estimate the expenses in relation to admitting the notes to the Official List and to trading on the Global Exchange Market of the Irish Stock Exchange to be €10,440.

F-1

INDEX TO FINANCIAL STATEMENTS

Audited Consolidated Financial Statements of Coazucar as of December 31, 2011 and 2010 and at

January 1, 2010 (transition date) and for the years ended December 31, 2011 and 2010

Independent Auditors’ Report .................................................................................................................... F-2 Consolidated Statement of Financial Position............................................................................................ F-4 Consolidated Statement of Comprehensive Income................................................................................... F-5 Consolidated Statement of Changes in Equity ........................................................................................... F-6 Consolidated Statement of Cash Flows ...................................................................................................... F-7 Notes to the Consolidated Financial Statements......................................................................................... F-8

Unaudited Condensed Consolidated Interim Financial Statements of Coazucar as of March 31, 2012 and for the three months ended March 31, 2012 and 2011

Condensed Consolidated Interim Statement of Financial Position............................................................. F-58 Condensed Consolidated Interim Statement of Comprehensive Income.................................................... F-59 Condensed Consolidated Interim Statement of Changes in Equity ............................................................ F-60 Condensed Consolidated Interim Statement of Cash Flows....................................................................... F-61 Notes to the Condensed Consolidated Interim Financial Statements ......................................................... F-62

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F-5

CORPORACION AZUCARERA DEL PERU S.A.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year endedDecember 31,2011 2010

Note S/.000 S/.000

Sales of products 18 1,304,415 937,854 Cost of products sold 19 (705,229) (498,467)Gross profit 599,186 439,387 Initial recognition and change in fair value of biological assets 8 188,355 177,852 Profit before operating expenses 787,541 617,239 Selling expenses 19 (30,248) (18,563)Administrative expenses 19 (66,386) (42,924)Other operating expenses, net 21 (157) (19,623)Profit from operations before financing and taxation 690,750 536,129 Finance income 22 2,461 1,621 Finance expenses 22 (47,446) (45,388)Exchange difference, net 18,354 11,096 Financial results, net (26,631) (32,671)Profit before income tax 664,119 503,458 Income tax expense 16 (104,584) (75,769)Profit for the year 559,535 427,689 Other comprehensive income:- Exchange differences on translating foreign operations, net of deferred income tax (13,336) - - Fair value change in cash flow hegde, net (877) (5,141)Total comprehensive income for the year 545,322 422,548

Attributable to:Equity holders of the parent 365,586 279,347 Non-controlling interest 179,736 143,201

545,322 422,548

Earning per share attributable to the equity holders of the parentduring the yearBasic and diluted earnings per share 24 1.27 0.97

The accompanying notes on pages 7 to 56 are part of the consolidated financial statements.

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F-7


CONSOLIDATED STATEMENT OF CASH FLOWS

For the year endedDecember 31,

Note 2011 2010S/.000 S/.000

CASH FLOW FROM OPERATING ACTIVITIESCash generated from operations 25 466,853 185,399Income tax paid (79,026) (39,546)Net cash generated from operating activities 387,827 145,853

CASH FLOW FROM INVESTING ACTIVITIESAcquisition of subsidiaries, net of cash acquired 23 (49,470) (34,769)Purchase of property, plant and equipment 6 (186,486) (193,937)Proceeds from sale of property, plant and equipment 2,946 - Purchase of intangible assets 7 (991) (294)Purchase of investment in Producargo S.A. (8,897) - Loans granted to related parties (44,604) 50,819Interests received 2,137 17 Net cash used in investing activities (285,365) (178,164)

CASH FLOW FROM FINANCING ACTIVITIESProceeds from issuance of ordinary shares - 16,875Proceeds from borrowings 406,358 332,708Repayments of borrowings (388,348) (228,016)Dividends paid to non - controlling interests (38,922) (8,058)Interests paid (38,255) (31,583)Net cash used in financing activities (59,167) 81,926

Net increase in cash and cash equivalents 43,295 49,615Cash and cash equivalents at beginning of year 70,982 21,367Cash and cash equivalents at the end of year 12 114,277 70,982

The accompanying notes on pages 7 to 56 are part of the consolidated financial statements.

F-8

CORPORACION AZUCARERA DEL PERU S.A. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2011 AND 2010 AND 1 JANUARY 2010

1 GENERAL INFORMATION Corporación Azucarera del Perú S.A. (hereinafter indistinctly the “Company” or “Coazucar”) is a holding company primarily engaged, through its operating subsidiaries, in sugarcane agro-industrial activities (production of sugar and ethanol). These activities are carried out through operations in Perú, Ecuador and Argentina. The Company and its operating subsidiaries are collectively referred to hereinafter as the “Group”. The Company was established in Peru on 10 October 2005 and has subsequently grown significantly both organically and through acquisitions. See note 27 for the description of the Group companies. The Company is the Group´s ultimate parent company and is an entity incorporated and domiciled in Peru. The address of its registered office is Avenida República de Panamá 2461, La Victoria - Lima, Peru. The issuance of these consolidated financial statements as of and for the year ended 31 December 2011, was approved by the Board of Directors in its meeting held on 2 July 2012.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all years presented, unless otherwise stated. 2.1 Basis of preparation The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (IFRS), issued by the International Accounting Standard Board (IASB), effective as of 31 December 2011 and they are the first consolidated financial statements prepared by the Group in accordance with IFRS. Until 31 December 2010, the consolidated financial statements of the Group were prepared under generally accepted accounting principles in Peru (Peruvian GAAP). Except for certain mandatory exceptions and for certain permitted exemptions for the IFRS transition period, described in note 30, the Group has consistently applied accounting policies in the preparation of its statement of financial position at 1 January 2010 and in all the periods presented, as if such accounting policies had been always effective. Note 30 explains the effect of the Group’s IFRS transition on its financial position, its performance and cash flows of the Group, including the nature and effect of the major changes made in accounting policies as compared to those used in the preparation of its consolidated financial statements for the period ended 31 December 2010 under Peruvian GAAP. Presentation in the consolidated statement of financial position differentiates between current and non-current assets and liabilities. Assets and liabilities are regarded as current if they mature within one year or are held for sale. The consolidated financial statements are presented in thousands of Nuevos Soles, the local currency in Peru, unless otherwise specifically stated.

F-9

The consolidated financial statements have been prepared under the historical cost convention as modified by derivative instruments and biological assets measured at fair value. The preparation of consolidated financial statements according to IFRS requires the use of certain critical accounting estimates. It also requires Management to exercise its judgment in the process of applying the Group’s accounting policies. The areas involving a high degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are described in note 4. a) Standards, amendments and interpretations to existing standards effective in 2011, and adopted

by the Group in 2011 There are no new standards, amendments and interpretations to existing standards that are effective for the first time for the year beginning on 1 January 2011 that would be expected to have a material impact on the Group. b) Standards, amendments and interpretations to existing standards effective in 2011, but not

relevant to the Group’s operations An amendment to IAS 32 “Financial Instruments: Presentation” was issued in October 2009. The amendment clarifies that rights issues, options and warrants denominated in a currency other than the issuer’s functional currency and offered on a pro-rata basis to all owners of the same class of equity must be classified as equity. Such rights issues have so far been accounted for as liabilities. The change relates only to issuances of a fixed number of shares at a fixed foreign-currency exercise price. The amendment is to be applied for annual periods beginning on or after 1 February 2010. Earlier application is permitted. The amendment was effective for the Group’s year ended 31 December 2011, and did not have an impact on the presentation of the Group’s financial position, results of operations or earnings per share. The IASB issued IAS 24 (revised) “Related Party Disclosures” in November 2009. The revision provides a partial exemption on the disclosure requirements for government-related entities and simplifies the definition of a related party. The revision is applicable for accounting periods beginning on or after 1 January 2011. Earlier application is permitted. The revised standard was effective for the Group’s year ended 31 December 2011, and did not have an impact on the presentation of the Group’s financial position, results of operations or earnings per share. In November 2009, the IFRIC issued IFRIC 19 “Extinguishing Financial Liabilities with Equity Instruments”. The interpretation addresses the accounting treatment in cases where a company settles all or part of a financial liability by issuing equity instruments to the creditor. It is to be applied for annual periods beginning on or after 1 July 2010. Earlier application is permitted. The amendment was effective for the Group’s year ended 31 December 2011, and did not have an impact on the presentation of the Group’s financial position, results of operations or earnings per share. In November 2009 amendments were issued to IFRIC 14 “IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction”, an interpretation of IAS 19 “Employee Benefits”. The amendments apply when a company is subject to minimum pension plan funding requirements. They enable prepayments of the respective contributions to be recognized as an asset. The amendments are to be applied for annual periods beginning on or after 1 January 2011. Earlier application is permitted. The amendment was effective for the Group’s year ended 31 December 2011, and did not have an impact on the presentation of the Group’s financial position, results of operations or earnings per share. On 6 May 2010, the IASB issued Improvements to IFRSs – a collection of amendments to seven IFRSs – as part of its program of annual improvements to its standards. The amendments are effective for annual periods beginning on or after 1 July 2010 and 1 January 2011 (thus effective for the Group’s year ended 31 December 2011), although entities are permitted to adopt them earlier.

F-10

These amendments relate to IFRS 1 “First Time Adoption of IFRS”, IFRS 3 “Business Combination”, IFRS 7 “Financial Instruments: Disclosures”, IAS 1 “Presentation of Financial Statements”, IAS 27 “Consolidated and separate financial statements”, IAS 34 “Interim Financial Reporting” and IFRIC 13 “Customer Loyalty Programmes”. The amendments did not have a material impact on the presentation of the Group’s financial position, results of operations or earnings per share. c) Standards, amendments and interpretations to existing standards which are not yet effective The following standards, amendments and interpretations to existing standards have been published and are mandatory for the Group’s accounting periods beginning on or after 1 January 2012 or later periods and the Group has not early adopted them: In November 2009, the IASB issued IFRS 9 “Financial Instruments”. The standard incorporates the first part of a three-phase project to replace IAS 39 “Financial Instruments: Recognition and Measurement”. IFRS 9 prescribes the classification and measurement of financial assets. IFRS 9 requires that financial assets are subsequently measured either “at amortized cost” or “at fair value”, depending on whether certain conditions are met. In addition, IFRS 9 permits an entity to designate an instrument, that would otherwise have been classified in the “at amortized cost” category, to be “at fair value” if that designation eliminates or significantly reduces measurement or recognition inconsistencies. The prescribed category for equity instruments is at fair value through profit or loss, however, an entity may irrevocably opt for presenting all fair value changes of equity instruments not held for trading in other comprehensive income. Only dividends received from these investments are reported in profit or loss. In October 2010, the IASB issued further additions to IFRS 9. These bring forth the guidance for derecognizing financial instruments and most of the requirements for the classification and measurement of financial liabilities currently included within IAS 39. The additions include amortized cost accounting for most financial liabilities, with bifurcation of embedded derivatives. The main change is that in cases where the fair value option is taken for financial liabilities, the part of a fair value change due to an entity’s own credit risk is recorded in other comprehensive income rather than the statement of income, unless this creates an accounting mismatch. The remaining phases of the project, dealing with impairment of financial instruments and hedge accounting, have not yet been finalized. IFRS 9, as well as its additions, shall be applied retrospectively for annual periods beginning on or after 1 January 2015. Earlier adoption is permitted. The Group is currently analyzing the resulting effects on the presentation of the Group’s results of operations, financial position or cash flows. In October 2010, the IASB issued an amendment to IFRS 7 “Financial Instruments: Disclosures”. The amendment requires additional disclosures in respect of risk exposures arising from transferred financial assets. The amendment includes a requirement to disclose by class of asset the nature, carrying amount and a description of the risks and rewards of financial assets that have been transferred to another party yet remain on the entity’s statement of financial position. Disclosures are also required to enable a user to understand the amount of any associated liabilities, and the relationship between the financial assets and associated liabilities. The amendment to IFRS 7 shall be applied for annual periods beginning on or after 1 July 2011, with earlier application permitted. The amendment is not expected to have a material impact on the presentation of the Group’s results of operations, financial position or cash flows. In December 2010, the IASB amended IAS 12 “Income taxes”, to introduce an exception to the existing principle for the measurement of deferred tax assets or liabilities arising on investment property measured at fair value. The IASB has added another exception to the principles in IAS 12: the rebuttable presumption that investment property measured at fair value is recovered entirely by sale. This presumption is rebutted if the investment property is depreciable (for example, buildings and land held under a lease) and is held within a business model whose objective is to consume substantially all of the economic benefits embodied in the investment property over time, rather than through sale before the end of its economic life. The presumption cannot be rebutted for freehold land that is an investment property, because land can only be recovered through sale.

F-11

The amendments are effective for annual periods beginning on or after 1 January 2012. The amendment is not expected to have an impact in the Group’s results to the extent it does not have investment properties measured at fair value. On May 2011, the IASB issued IFRS 10 “Consolidated Financial Statements” which establishes principles for the presentation and preparation of consolidated financial statements when an entity controls one or more other entities. IFRS 10 replaces the consolidation requirements in SIC 12 “Consolidation - Special Purpose Entities” and IAS 27 “Consolidated and Separate Financial Statements” and is effective for annual periods beginning on or after 1 January 2013. Earlier application is permitted. IFRS 10 builds on existing principles by identifying the concept of control as the determining factor in whether an entity should be included within the consolidated financial statements of the parent company. The standard provides additional guidance to assist in the determination of control where this is difficult to assess. The Group is in the process of analyzing the resulting effects on the presentation of the Group’s results of operations, financial position or cash flows. On May 2011, the IASB issued IFRS 11 “Joint Arrangements” which provides for a more realistic reflection of joint arrangements by focusing on the rights and obligations of the arrangement, rather than its legal form (as is currently the case). The standard addresses inconsistencies in the reporting of joint arrangements by requiring a single method to account for interests in jointly controlled entities. IFRS 11 is effective for annual periods beginning on or after 1 January 2013. Earlier application is permitted. The Group is in the process of analyzing the resulting effects on the presentation of the Group’s results of operations, financial position or cash flows. On May 2011, the IASB issued IFRS 12 “Disclosure of Interests in Other Entities”. IFRS 12 is a new and comprehensive standard on disclosure requirements for all forms of interests in other entities, including subsidiaries, joint arrangements, associates and unconsolidated structured entities. IFRS 12 is effective for annual periods beginning on or after 1 January 2013. Earlier application is permitted. The application of IFRS 12 is likely to increase the disclosures required for subsidiaries and joint arrangements. On May 2011, the IASB issued IFRS 13 “Fair Value Measurement” which replaces the fair value measurement guidance currently dispersed across different IFRS standards with a single definition of fair value and extensive application guidance. IFRS 13 provides guidance on how to measure fair value and does not introduce new requirements for when fair value is required or permitted. It also establishes disclosure requirements to provide users of financial statements with more information about fair value measurements. IFRS 13 was developed in a joint project with the US Financial Accounting Standards Board (FASB) and the guidance in IFRS 13 is largely converged with FASB’s ASC Topic 820 Fair Value Measurement and Disclosures. IFRS 13 is effective for annual periods beginning on or after 1 January 2013. Earlier application is permitted. The Group is in the process of analyzing this standard although it expects it will not have a material impact on the Group’s results of operations, financial position and cash flows. However, the application of IFRS 13 is likely to increase the disclosures required about fair value measurements. In June 2011, the IASB issued an amendment to IAS 1 “Presentation of financial statements”. The amendment improves the consistency and clarity of the presentation of items of other comprehensive income (“OCI”). The main change is a requirement for entities to group items presented in OCI on the basis of whether they are potentially reclassifiable to profit or loss subsequently (reclassification adjustments). The amendment to IAS 1 shall be applied for annual periods beginning on or after 1 July 2012, with earlier application permitted. The Group is in the process of analyzing the resulting effects on the presentation of the Group’s results of operations, financial position or cash flows. There are no other standards, amendments or interpretations that are not yet effective that would be expected to have an impact on the Group.

F-12

2.2 Scope of consolidation The consolidated financial statements include the assets, liabilities and results of the Company and of all of its subsidiaries as from the date that control commences to the date that control ceases. The consolidated financial statements also include the Group´s share of the after-tax results of its interest in associates on an equity accounting basis as from the date at which significant influence commences, to the date that it ceases. a) Subsidiaries - Subsidiaries are all entities over which the Group has the power to govern their financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group until the date in which control ceases. The Group accounts for acquisitions using the purchase method of accounting as prescribed by IFRS 3R. Consideration is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any non-controlling interest. The excess of consideration over the fair value of the Group’s share on the identifiable net assets acquired is recorded as goodwill (see note 23 for details). Inter-company transactions, balances and unrealized gains on transactions between Group companies are eliminated. Unrealized losses are also eliminated unless they are assessed as an impairment indicator of the asset transferred. Accounting policies of subsidiaries are changed where necessary to ensure consistency with the policies adopted by the Group. b) Transactions with non-controlling interest in a subsidiary without change in control - Transactions with non-controlling stockholders that do not result in loss of control are accounted for as equity transactions, that is, as transactions with owners in their capacity as owners. The difference between fair value of any consideration paid and the corresponding share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on a disposal of non-controlling interests in a subsidiary, which does not imply a change of control over the subsidiary, are also recorded in equity (see note 17.b iii). c) Associates - Associates are all entities over which the group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting. Under the equity method, the investment is initially recognized at cost, and the carrying amount is increased or decreased to recognize the investor’s share of the profit or loss of the investee after the date of acquisition. The group’s share of post-acquisition profit or loss is recognized in the income statement, and its share of post acquisition movements in other comprehensive income is recognized in other comprehensive income with a corresponding adjustment to the carrying amount of the investment. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

F-13

The Group determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognizes such amount as income (loss) attributable to associates. 2.3 Segments information According to IFRS 8, operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The Board of Directors is responsible for allocating resources and assessing performance of the operating segments and steering the business success of the segments and is considered the Chief Operating Decision-Maker within the meaning of IFRS 8. 2.4 Foreign currency translation a) Functional and presentation currency - Items included in the financial statements of each of the Group´s entities are measured using the currency of the primary economic environment in which the entity operates (the functional currency). The consolidated financial statements are presented in Nuevos Soles, which is the Group’s presentation currency. b) Transactions and balances - Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the date of transactions or valuation date where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the income statement, except when deferred as “other comprehensive income” in transactions that qualify as cash flow hedges. The Group’s foreign exchange gains and losses are presented in the statement of comprehensive income under “exchange difference, net”. c) Group companies - The results and financial position of all of the Group entities (none of which has the currency of a hyper-inflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

i) Assets and liabilities of each statement of financial position presented are translated at the rate prevailing at the date of that statement of financial position;

ii) Income and expense for each statement of income are translated at average exchange rates

(unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the date of the transaction), and

iii) All resulting exchange differences are recognized in other comprehensive income.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate.

F-14

2.5 Property, plant and equipment - Property, plant and equipment are recorded at cost, less accumulated depreciation and impairment losses, if any. Historical cost comprises the purchase price and any costs directly attributable to the acquisition. Where individual components of an item of property, plant and equipment have different useful lives, they are accounted for as separate items, which are depreciated separately. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to the statement of income during the period in which they are incurred. Assets in the construction stage are capitalized as separate components. At their completion, the cost is transferred to the adequate category. Work in progress is not depreciated.

Land is not depreciated. Depreciation on other assets is calculated using the straight-line method, to allocate their cost to their residual values over their estimated useful lives, as follows: Years Buildings and other construction Up to 40 Machinery and equipment between 3 and 30 Furniture and fixtures and others between 3 and 10 Vehicles between 3 and 25 The assets’ residual values and useful lives are reviewed and adjusted, if appropriate, at the date of each statement of financial position. An asset’s carrying amount is immediately written down to its recoverable amount if it is greater than its estimated recoverable amount. Gains and losses on disposals correspond to the difference between the proceeds and the carrying amount of the assets, which are included in the consolidated statement of comprehensive income. 2.6 Leases - The Group classifies its leases at the inception as finance or operating leases. Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases. Finance leases are capitalized at the lease’s inception at the lower of the fair value of the leased property and the present value of the minimum lease payments. Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance outstanding. The corresponding rental obligations, net of finance charges, are included as “Borrowings” in the statement of financial position. The interest element of the finance cost is charged to the statement of income over the lease period. Property, plant and equipment acquired under finance leases is depreciated over the shorter of the asset’s useful life and the lease term. Payments made under operating leases (net of any incentives received from the lessor) are charged to the statement of income on a straight-line basis over the period of the lease.

F-15

2.7 Goodwill Goodwill represents future economic benefits arising from assets that are not capable of being individually identified and separately recognized by the Group on a business acquisition. Goodwill is computed as the excess of the consideration over the fair value of the Group’s share of net assets of the acquired subsidiary undertaking at the acquisition date and is allocated to those cash generating units expected to benefit from the acquisition for the purpose of impairment testing. Goodwill arising on the acquisition of subsidiaries is included within “Intangible assets” on the statement of financial position, whilst goodwill arising on the acquisition on associates forms part of the carrying amount of the investments. Goodwill arising on the acquisition of foreign entities is treated as an asset of the foreign entity denominated in the local currency and translated at the closing rate. Goodwill is not amortized but is tested for impairment on an annual basis, or more frequently if there is an indication of impairment. 2.8 Other intangible assets Other intangible assets that are acquired by the Group, which have finite useful lives, are measured at cost less accumulated amortization and impairment losses, if any. These intangible assets comprise computer software and are amortized on a straight-line basis over their useful lives estimated to be of 4 years. 2.9 Impairment of assets Goodwill For the purpose of impairment testing, assets are grouped at the lowest levels for which they separately generate identifiable cash flows. This group of assets is known as cash-generating units. If the recoverable amount of a cash-generating unit is less than the carrying amount of the assets within the unit, an impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit on a pro-rata basis based on the carrying amount of each asset in the unit. Goodwill impairment losses recognized cannot be reversed in a subsequent periods. The recoverable amount of goodwill is the higher of its fair value less costs to sell and its value in use. In assessing the value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted (see note 4 for details). Property, plant and equipment and finite useful live intangible assets - At each statement of financial position date, the Group reviews the carrying amounts of its property, plant and equipment and finite useful live intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent, if any, of the impairment loss. Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash generating unit to which the asset belongs. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount. An impairment loss is recognized immediately in the statement of income. Where an impairment loss subsequently reverses the carrying amount of the asset or cash-generating unit is increased to the revised estimate of its recoverable amount, which should not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognized in the statement of income.

F-16

2.10 Biological assets Biological assets comprise the plantations of sugarcane which are assets capable of produce more than one harvest (bearer biological assets). The Group distinguishes between mature and immature biological assets. “Mature” biological assets are those that are able to sustain regular harvests (for bearer biological assets). “Immature” biological assets are those assets other than mature biological assets. The Group presents biological assets (sugarcane) as current and non-current assets based on their nature. For that purpose, the Group estimates of the portion of biological assets that will be consumed over a period of 12 months or less to be able to classify said portion as a current asset. Costs are capitalized as biological assets if, and only if, (a) it is probable that future economic benefits will flow to the entity, and (b) the cost can be measured reliably. The Group capitalizes costs such as: planting, harvesting, weeding, seedlings, irrigation, agrochemicals, fertilizers and a systematic allocation of fixed and variable production overheads that are directly attributable to the management of biological assets, among others. Costs that are expensed as incurred include administration and other general overhead and unallocated production overhead, among others. Biological assets, both at initial recognition and at each subsequent reporting date, are measured at fair value less costs to sell, except where fair value cannot be reliably measured. Cost approximates fair value when little biological transformation has taken place since the costs were originally incurred or the impact of biological transformation on price is not expected to be material. Gains and losses that arise on measuring biological assets at fair value less costs to sell and measuring agricultural produce at the point of harvest at fair value less costs to sell are recognized in the statement of income in the period in which they arise in the line item “Changes in fair value of biological assets”. Where there is an active market for a biological asset, quoted market prices in the most relevant market are used as a basis to determine the fair value. Otherwise, when there is no active market or market-determined prices are not available, fair value of biological assets is determined through the use of valuation techniques. Therefore, the fair value of biological assets is generally derived from the expected discounted cash flows of the related agricultural produce. The fair value of agricultural produce at the point of harvest is generally derived from market determined prices. The determination of the fair value of sugarcane is based on the Group’s business segments as follows: The fair value of sugarcane depends on the variety, location and maturity of the plantation. The

sugarcane is accounted for as plantations and is felled until their optimum economic age for use has expired, generally between 7 to 9 years.

Sugarcane, for which biological growth is not significant, is valued at cost, which approximates its

fair value. When sugarcane has attained significant biological growth, it is measured at fair value. The fair value of sugarcane considers estimated revenues based on yearly production volume

(which will be destined the production of sugar, mainly). The sale price of sugar is calculated as the average of its daily prices in the local market of each country where the Group operates. Projected costs include maintenance, land lease, harvesting and transportation.

The operating cash flows are discounted at a discount rate, which reflects current market

assessment of the time value of money and risks involved. 2.11 Inventories - Inventories comprise raw materials, finished goods (including harvested agricultural produce) and others.

F-17

The cost of finished products comprises the fair value of the agriculture produce less cost necessary to sell at the harvest point (an amount transferred from biological asset to productive process) plus the cost incurred in the industrial production process, such as direct labor, other direct cost and overhead production costs. Inventories are measured at the lower of cost and net realizable value. Cost is determined using the weighted average method, except for in-transit inventory, which is stated by using the specific identification method. The net realization value is the estimated sales price of the product during the ordinary course of business, based on the current price less estimated costs to complete its production and expenses to place inventory in sales conditions. 2.12 Financial assets Classification - The Group financial assets qualify only as loans and receivables. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition. Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the date of the statement of financial position. Loans and receivables comprise “trade and other receivables” and “cash and cash equivalents” in the statement of financial position. Recognition and measurement - Loan and receivables are initially recognized at fair value plus transaction costs, if any. Loans and receivables are subsequently carried at amortized cost using the effective interest method. The Group assesses at each statement of financial position date whether there is objective evidence that a financial asset or a group of financial assets is impaired. Impairment testing of trade receivables is described in note 11. Offsetting financial instruments - Financial assets and liabilities are offset and the net amount reported in the statement of financial position when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis, or realize the asset and settle the liability simultaneously. 2.13 Derivative financial instruments and hedging activities Derivatives are initially recognized at fair value on the date a derivative contract is entered into and are subsequently remeasured at their fair value. The fair value of interest rate swaps has been calculated using a discounted cash flow analysis. The Group manages exposures to financial risk using hedging instruments that provide the appropriate economic outcome. The principal hedging instruments used may include foreign exchange forward contracts and interest rate swaps. The Group does not use derivative financial instruments for speculative purposes. The Group’s policy is to apply hedge accounting to hedging relationships where it is permissible under IAS 39, practical to do so and its application reduces volatility, but transactions that may be effective hedges in economic terms may not always qualify for hedge accounting under IAS 39. Any derivatives that the Group holds to hedge these exposures are classified as “held for trading” and are shown in a separate line on the face of the statement of financial position. Gains and losses on interest rate and foreign exchange rate derivatives are classified within ‘Financial results, net’ and “Exchange difference, net”, respectively.

F-18

2.14 Trade receivables - Trade receivables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method, less allowance for trade account receivables. An allowance for trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganization, and default or delinquency in payments are considered indicators that the trade receivable is impaired. The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognized in the statement of income within selling expenses. When a trade receivable is uncollectible, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited against selling expenses in the statement of income. 2.15 Cash and cash equivalents - Cash and cash equivalents include cash in hand, deposits held at call with banks and other short-term highly liquid investments with original maturities of three months or less. 2.16 Trade payables - Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade payables are initially recognized at fair value and subsequently measured at amortized cost using the effective interest method. 2.17 Borrowings - Borrowings are initially recognized at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortized cost using the effective interest method. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the date of the statement of financial position. Borrowing costs associated with qualifying assets are capitalized during the period of time that is required to complete and prepare the asset for its intended use. 2.18 Provisions - Provisions are recognized when (i) the Group has a present legal or constructive obligation as a result of past events; (ii) it is probable that an outflow of resources will be required to settle the obligation; and (iii) a reliable estimate of the amount of the obligation can be made. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. 2.19 Current and deferred income tax - The Group’s tax expense for the year comprises the charge for current tax payable and deferred taxation attributable to the Group’s operating subsidiaries. Tax is recognized in the statement of income, except to the extent that it relates to items recognized directly in equity. In this case, the tax is also recognized in equity.

F-19

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the date of the statement of financial position in the countries where the Group’s subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. Deferred income tax is recognized, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects either accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the date of the statement of financial position and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled. Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. Deferred income tax is provided on temporary differences arising on investments in associates, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. 2.20 Revenue recognition - The Group’s primary activities comprise agricultural and agro-industrial activities. The Group’s agro-industrial activities comprise the selling of manufactured products (i.e. sugar, ethanol, among others). Sales of manufacture products are measured at the fair value of the consideration received or receivable, net of returns and allowances, trade and other discounts, net of sales taxes, as applicable. The Group recognizes revenue when the amount of revenue can be reliably measured, it is probable that the future economic benefits will flow to the entity and when the Company has delivered the products to the customers in the designated mode of transport (the products are delivered to the customer in the store of the seller) ,considering the risks and benefits associated with such property are transferred and when the collection of accounts receivable is reasonably assured. For export shipments, transfer occurs upon loading of the goods onto the relevant carrier. 2.21 Basic earnings per share - Basic earnings per share is calculated by dividing the net income for the period attributable to equity holders of the controlling interest by the weighted average number of ordinary shares outstanding during the year. Diluted net earnings per share is computed by dividing the net income for the period by the weighted average number of ordinary shares outstanding, and when dilutive, adjusted for the effect of all potentially dilutive shares.

3 FINANCIAL RISK MANAGEMENT 3.1 Financial risk factors - The Group’s activities are exposed to a variety of financial risks. The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimize the Group’s capital costs by using suitable means of financing and to manage and control the Group’s financial risks effectively. The Group uses financial instruments to hedge certain risk exposures.

F-20

The Group’s approach to the identification, assessment and mitigation of risk is carried out by the Board of Directors, which focuses on timely and appropriate management of risk. The Board of Directors has overall accountability for the identification and management of risk across the Group. The principal financial risks arising from financial instruments traded by the Group are: i) exchange rate risk, ii) interest rate risk, iii) liquidity risk, iv) credit risk and v) end-product price risk. This section provides a description of the principal risks and uncertainties that could have a material adverse effect on the Group’s strategy, performance, results of operations and financial condition. The principal risks and uncertainties facing the business, set out below, do not appear in any particular order of potential materiality or probability of occurrence. i) Foreign exchange risk The Group’s functional currency is the New Peruvian sol, therefore the Group’s cash flows, performance and financial position are exposed to the risk of fluctuations in exchange rates of other currencies. Currency risks as defined by IFRS 7 arise on account of monetary assets and liabilities being denominated in a currency that is not the functional currency. A significant amount of the Group’s business activities is conducted in the respective functional currencies of its subsidiaries (Nuevos Soles, Argentine Pesos and in US Dollars). However, certain transactions of the Group are performed in currencies other than the respective functional currencies of its subsidiaries. The following tables show the Group’s net monetary position broken down by various currencies for each functional currency in which the Group operates for all the periods presented. All amounts presented below are stated in Nuevos Soles. 2011 Functional currency Net monetary position Argentine US Nuevos (Liability)/Asset Peso Dollars Soles Total Argentine Peso ( 20,711) - - ( 20,711) US Dollar ( 29,630) ( 321,296) ( 337,613) ( 688,539) Nuevos Soles - - ) ( 310,993) ( 310,993) Total ( 50,341) ( 321,296) ( 648,606) ( 1,020,243) 2010 Functional currency Net monetary position Argentine US Peruvian (Liability)/Asset Peso Dollars New Sol Total Argentine Peso - - - - US Dollar - - ( 253,316) ( 253,316) Nuevos Soles - - ( 444,900) ( 444,900) Total - - ( 698,216) ( 698,216) 1 January 2010 Functional currency Net monetary position Argentine US Peruvian (Liability)/Asset Peso Dollars New Sol Total Argentine Peso - - - - US Dollar - - ( 278,340) ( 278,340) Nuevos Soles - - ( 557,083) ( 557,083) Total - - ( 835,423) ( 835,423)

F-21

The Group’s analysis is carried out based on the exposure of the functional currency of each subsidiary against the New Peruvian sol. Considering other variables constant, the Group estimates that, a 3% devaluation (revaluation) of the respective functional currencies of the subsidiaries against the Nuevos Soles at year-end would have had decreased or (increased) reported profit (loss) before income tax for the years ended 31 December 2011 and 2010 and 1 January 2010, as follows: 2011 Functional currency Net monetary position sensibility Argentine US Peruvian (Liability)/Asset Peso Dollars New Sol Total Argentine Peso n/a - - - US Dollar ( 889) n/a ( 9,330) ( 10,219) Nuevos Soles - ) - n/a ) - ) (Increase) or decrease in profit before income tax ( 889) - ( 9,330) ( 10,219) 2010 Functional currency Net monetary position sensibility Argentine US Nuevos (Liability)/Asset Peso Dollars Soles Total Argentine Peso n/a - - - US Dollar - n/a ( 13,347) ( 13,347) Nuevos Soles - ) - n/a ) - ) (Increase) or decrease in profit before income tax - ) - ( 13,347) ( 13,347) ii) End-product price risk Prices of the products traded by the Group have historically been cyclical, reflecting overall economic conditions and changes in capacity within the industry affecting the profitability of entities engaged in the agribusiness industry. The Group’s commercial team combines different actions to minimize price risk. The Group manages minimum and maximum prices for each product. The Group does not use derivative financial instruments to hedge end-product price risk. Considering other variables constant, the Group estimates that, for the years ended 31 December 2011 and 2010 a 5% increase (or decrease) in prices of the Group’s end products would have (increased) or decreased reported profit (loss) before income tax by approximately S/.33.2 millions and S/.25.2 millions, respectively. iii) Liquidity risk - The Group is exposed to liquidity risks, including risks associated with refinancing borrowings as they mature, the risk that borrowing facilities are not available to meet cash requirements and the risk that financial assets cannot readily be converted to cash without loss of value. Failure to manage financing risks could have a material impact on the Group’s cash flow and statement of financial position. Prudent liquidity risk management includes managing the profile of debt maturities and funding sources, close oversight of cash flows projections, maintaining sufficient cash, and ensuring the availability of funding from an adequate amount of committed credit facilities and the ability to close out market positions. The Group’s ability to fund its existing and prospective debt requirements is managed by maintaining diversified funding sources with adequate lines o credit available; preferably long-term lines of credit. As of 31 December 2011, cash and cash equivalents of the Group totaled S/.114.3 millions, which could be used for managing liquidity risk.

F-22

The table below analyses the Group’s non-derivative financial liabilities and derivative financial liabilities into relevant maturity groupings based on the remaining period at the statement of financial position to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows and as a result they do not reconcile to the amounts disclosed on the statement of financial position except for short-term payables when discounting is not applied. Less than Between 1 Between 2 Over 5 1 year and 2 years and 5 years years Total S/.000 S/.000 S/.000 S/.000 S/.000 At 31 December 2011 Borrowings (excluding finance leases liabilities) 310,149 108,490 195,971 8,891 623,501 Leases 2,319 780 298 - 3,397 Trade and other accounts payables 257,903 62,059 54,512 135,940 510,414 570,371 171,329 250,781 144,831 1,137,312 At 31 December 2010 Borrowings (excluding finance leases liabilities) 200,274 160,944 223,948 11,256 596,422 Leases 2,615 2,023 994 - 5,632 Trade and other accounts payables 192,222 25,492 27,687 274 245,675 395,111 188,459 252,629 11,530 847,729 At 1 January 2010 Borrowings (excluding finance leases liabilities) 171,128 204,242 72,496 28,120 475,986 Leases 4,645 3,474 3,589 - 11,708 Trade and other accounts payables 201,108 25,492 27,691 846 255,137 376,881 233,208 103,776 28,966 742,831 iv) Interest rate risk -

The Group’s financial costs may be affected by interest rate volatility. Borrowings under the Group’s interest rate management policy may at fixed or floating rates. The Group maintains adequate committed borrowing facilities and holds most of its financial assets primarily in short-term that are readily convertible into known amounts of cash. The Group’s interest rate risk arises from long-term borrowings. Borrowings issued at floating rates expose the Group to cash flows interest rate risk. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. The Group occasionally manages its cash flows interest rate risk exposure by using floating-to-fixed interest rate swaps. Such interest rate swaps have the economic effect of converting borrowings from floating to fixed interest rates. The following table shows a breakdown of the Group’s fixed-rate and floating-rate borrowings per currency denomination and functional currency of the subsidiary obligor of the loans (excluding finance leases). 2011 Functional currency Argentine US Nuevos Rate per currency denomination Peso Dollars Soles Total Fixed rate: Argentine Peso 1,700 - - 1,700 US Dollar 35,305 - 137,893 173,198 Nuevos Soles - - 250,916 250,916 Subtotal fixed-rate borrowings 37,005 388,809 425,814

F-23

2011 Functional currency Argentine US Rate per currency denomination Peso Dollars Nuevos Soles Total Variable rate: Argentine Peso 5,436 - - 5,436 US Dollar 2,658 - 114,620 117,278 Subtotal variable-rate borrowings 8,094 - 114,620 122,714 Total borrowings as per analysis 45,099 - 503,429 548,528 Finance leases 280 - 2,822 3,102 Total borrowings as per statement of financial position 45,379 - 506,251 551,630 2010 Functional currency Argentine US Nuevos Rate per currency denomination Peso Dollars Soles Total Fixed rate: US Dollar - - 45,698 45,698 Nuevos soles - - 318,127 318,127 Subtotal fixed-rate borrowings - - 363,825 363,825 Variable rate: US Dollar - - 164,717 164,717 Subtotal variable-rate borrowings - - 164,717 164,717 Total borrowings as per analysis - - 528,542 528,542 Finance leases - - 5,077 5,077 Total borrowings as per statement of financial position - - 533,619 533,619 At 31 December 2011 and 2010, if interest rates on floating-rate borrowings had been 1% higher (or lower) considering all other variables constant, profit (loss) before income tax for each year would have (increased) or decreased as follows: 2011 Functional currency Argentine US Nuevos Rate per currency denomination Peso Dollars Soles Total Variable rate: Argentine Peso 54 - - 54 US Dollar 27 - 1,146 1,173 Total effect before income tax 81 - 1,146 1,227 2010 Functional currency Argentine US Nuevos Rate per currency denomination Peso Dollars Soles Total Variable rate: US Dollar - - 1,647 1,647 Total effect before income tax - - 1,647 1,647

F-24

The sensitivity analysis has been determined assuming that the change in interest rates had occurred at the date of the statement of financial position and had been applied to the exposure to interest rate risk for financial instruments in existence at that date. The 100 basis point increase or decrease represents management’s assessment of a reasonable possible change in those interest rates, which have the most impact on the Group (specifically the United States and Argentina rates), over the period until the next annual statement of financial position date. v) Credit risk - The Group’s exposure to credit risk takes the form of a loss that would be recognized if counterparties failed to, or were unable to, meet their payment obligations. These risks may arise in certain agreements in relation to amounts owed for physical product sales and the investment of surplus cash balances. The Group is also exposed to political and economic risk events, which may cause non-payment of foreign currency obligations to the Group. The current credit crisis could also lead to the failure of companies in the sector, potentially including customers, partners, contractors and suppliers. The Group is subject to credit risk arising from outstanding receivables, cash and cash equivalents. The Group’s policy is to manage credit exposure to trading counterparties within defined trading limits. All of the Group’s significant counterparties are assigned internal credit limits. The Group sells manufactured products and agricultural products to a large base of customers. Type and class of customers may differ depending on the Group´s business segments. No credit limits were exceeded during the reporting periods and management does not expect any losses from non-performance by these counterparties. If any of the Group’s customers are independently rated, these ratings are used. Otherwise, if there is no independent rating, the Group assesses the credit quality of the customer taking into account its financial position, past experience and other factors. The Group may seek cash collateral, letter of credit or parent company guarantees, as considered appropriate. Sales to customers are primarily made by credit with customary payment terms. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the statement of financial position after deducting any impairment allowance. The Group’s exposure of credit risk arising from trade receivables is set out in note 11. The Group is exposed to counterparty credit risk on cash and cash equivalent balances. The Group holds cash on deposit with a number of financial institutions. The Group manages its credit risk exposure by limiting individual deposits to clearly defined limits. The Group cash deposits are maintained in high quality banks and financial institutions. The maximum exposure to credit risk is represented by the carrying amount of cash and cash equivalents in the statement of financial position. As of 31 December 2011 and 2010, the total amount of cash and cash equivalents mainly comprise cash in banks and short-term bank deposits. The Group is authorized to work with banks rated “BBB+” or higher. The Group does not have investment in securities or other financial instruments for which risk may have increased due to the financial credit crisis. The Group’s exposure to credit risk arising from cash and cash equivalents is set out in note 12. 3.2 Capital risk management - The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for members and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, it may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The Group monitors capital on the basis of the gearing ratio.

F-25

This ratio is calculated as total debt (including current and non-current borrowings and trade and other accounts payable as shown in the consolidated statement of financial position, if applicable) divided by total capital. Total capital is calculated as equity, as shown in the consolidated statement of financial position, plus total debt. During the year ended 31 December 2011, the strategy, which was unchanged from 2010, was to maintain the gearing ratio no greater than 1.5, as follows: At December, 31 1 January 2011 2010 2010 S/.000 S/.000 S/.000 Total debt 1,260,061) 879,197) 962,174 Total equity 2,485,955) 1,540,068) 1,124,691) Total capital 3,746,016) 2,419,265) 2,086,865 Gearing ratio 0.34) 0.36) 0.46 3.3 Derivative financial instruments - As part of its business operations, the Group uses derivative financial instruments to manage its exposure to currency exchange rate risk and interest rate risk. As part of this strategy, the Group may enter into (i) interest rate derivatives to manage the composition of floating and fixed rates debt; and (ii) currency derivatives to manage the currency composition debt; the Group’s policy is not to trade speculative derivatives. Derivative financial instruments involve, to a varying degree, elements of market and credit risk not recognized in the financial statements. The market risk associated with these instruments resulting from price movements is expected to offset the market risk of the underlying transactions, assets and liabilities, being hedged. The counterparties to the agreements relating to the Group’s contracts generally are large institutions with credit ratings equal to or higher than BBB+. The Group continually monitors the credit rating of such counterparties and seeks to limit its financial exposure to any of these financial institutions. While the contract or notional amounts of derivative financial instruments provide one measure of the volume of these transactions, they do not represent the amount of the Group’s exposure to credit risk. The amounts potentially subject to credit risk (arising from the possible inability of counterparties to meet the terms of their contracts) are generally limited to the amounts, if any, by which the counterparties’ obligations under the contracts exceed the Group’s obligations to the counterparties. Cross currency interest rate swap The Group through one of its subsidiaries issued a USD-denominated floating rate bond. The subsidiaries functional currency is the Nuevos Soles. The facility comprises a three-year US$49.8 million loan bearing interest at 180 - day LIBOR plus a spread per annum. Since the above transaction exposed the Group to the risk of foreign currency and interest rate, in March 2009, the Group entered into a receive-floating pay fixed cross currency swap. The cross currency swap designated as the hedging instrument in a cash flow hedge of the USD bond. Through the combination of the USD bond and the cross currency swap, the Group obtained synthetically a Nuevos Soles fixed-rate liability. The notional amount of the instrument is US$49.8 million and expires on 6 November 2012. As of 31 December 2011, 2010 and 1 January 2010, the Group recognized a liability amounting to S/.10.6 millions, S/.15.1 million and S/.15.2 millions, respectively, that corresponds to the estimated fair value of the swap at each of those dates. The bond and the cross currency swap expired on 6 November 2012.

F-26

The Group evaluated the impact of changes in the fair value on the interest rate swap considering an immediate 100 basis point change in the interest rates. As of 31 December 2011 and 2010, a 100 basis point increase/decrease in the interest rates would have resulted in an approximate S/.0.04 millions and S/.0.03 millions increase/decrease in the fair value of the interest rate swap, respectively. The fair value of the swap has been calculated using a discounted cash flow analysis.

4 CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS Critical accounting policies are those that are most important to the portrayal of the Group’s financial condition, results of operations and cash flows, and require management to make difficult, subjective or complex judgments and estimates about matters that are inherently uncertain. Management bases its estimates on historical experience and other assumptions that it believes are reasonable under the circumstances. The Group’s critical accounting policies are discussed below. Actual results may differ from estimates used in employing the critical accounting policies and, as such, could have a material impact on the Group’s results of operations. The Group also has other policies that are considered key accounting policies, such as the revenue recognition accounting policy. However, these other policies, which are discussed in the notes to the Group’s financial statements, do not meet the definition of critical accounting estimates, because they do not generally require estimates to be made or judgments that are difficult or subjective. a) Business combinations – purchase price allocation Accounting for business combinations requires the allocation of the Group’s purchase price to the various assets and liabilities of the acquired business at their respective fair values. The Group uses all available information to determine this fair value, and for major acquisitions, may hire an independent appraisal firm to assist in estimating fair values. In some instances, assumptions with respect to the timing and amount of future revenues and expenses associated with an asset might have to be used in determining its fair value. Actual timing and amount of net cash flows from revenues and expenses related to that asset over time may differ materially from those initial estimates, and if the timing is delayed significantly or if the net cash flows decline significantly, the asset may become impaired. b) Biological assets The nature of the Group’s biological assets and the basis for determining their fair value are explained under in note 2.10. The discounted cash flows model requires the input of highly subjective assumptions which include observable and non - observable data. Generally the estimation of the fair value of biological assets is based on models or inputs that are not observable in the market and the use of non - observable inputs is significant to the overall valuation of the assets. Non - observable inputs are determined based on the best information available, for example by reference to historical information of past practices and results, statistical and agronomical information, and other analytical techniques. Key assumptions include future market prices, estimated yields at the point of harvest, estimated production cycle, future cash flows, future costs of harvesting and other costs, and estimated discount rate. Market prices are generally determined by reference to observable data in the principal market for the agricultural produce. Harvesting costs and other costs are estimated based on historical and statistical data. Yields are estimated based on several factors including the location, environmental conditions, infrastructure and other restrictions and growth at the time of measurement. Yields are subject to a high degree of uncertainty and may be affected by several factors out of the Group’s control including but not limited to extreme or unusual weather conditions, plagues and other crop diseases, among other factors.

F-27

The key assumptions discussed above are highly sensitive. Reasonable shifts in assumptions including but not limited to increases or decreases in prices, costs and discount rates used would result in a significant increase or decrease of the fair value of biological assets. In addition, cash flows are projected over a number of years and based on estimated production. Estimates of production by themselves are dependent on various assumptions, in addition to those described above, including but not limited to several factors such as location, environmental conditions and other restrictions. Changes in these estimates may materially impact on estimated production, and therefore may affect estimates of future cash flows used in the assessment of fair value. Valuation models and their assumptions are reviewed annually, or quarterly if required, and, if necessary, adjusted. Major assumptions for the calculation of the fair value of biological assets are as follows: At At 31 December 1 January Unit 2011 2010 2010 Sugarcane - Stock of sugar cane Ton 4,553,135) 3,833,664) 4,036,822) Harvested cane in the period Ton ( 4,384,382) ( 3,535,604) ( 2,975,908) Harvested hectares in the period Has 37,307) 22,612) 20,473) Forecasts - Cane forecasts Ton 19,674,037 15,480,260 18,678,070 Sugarcane cuts Number 6 6 6 Life of the cane plant Years 7 8 7 Hectares of cane Has 48,707 33,170 33,578 Hectares of harvested cane Has 160,779 98,967 110,748 Market price per ton Nuevos of cane Soles 119 89 75 Discount rate % 12.00% 11.70% 14.00% The increase in the market price per sugar cane ton is basically explained by the increase of the prices of sugar per bags in the countries where the group operates. The market price of sugar cane per ton was based on historical prices (obtained from prices at which the Group invoices to its clients) multiplied by a factor of sugar back/packs per ton of cane. Additionally, Management carried out a price analysis prospectively and considers that its estimates are consistent with the market and current economic conditions of the agribusiness sector at each country. The decrease in the discount rate is substantially explained by the changes in the weighted average cost of capital of the Group (adjusted to take account of the way in which the market would assess specific risks associated with the estimated cash flows) and by the inflation rates of each year. The following is shown the effect of a table reflects the sensitivity analysis to a reasonably possible change in the discount rate, on the Group’s pre-tax profit, assuming with all other variables held constant: Change in fair value 31.12.2011 31.12.2010 1.1.2010 +1% ( 14,111) ( 6,155) ( 3,632) -1% 14,718) 6,368) 3,775) +0.5% ( 7,129) ( 3,104) ( 1,833) -0.5% 7,282) 3,156) 1,869) Following is shown the effect of a reasonably possible change in sugar prices, on the Group’s pre-tax profit, assuming all other variables constant:

F-28

Change in fair value 31.12.2011 31.12.2010 1.1.2010 + 1% 16,467) 9,854) 9,234) - 1% ( 16,467) ( 9,854) ( 9,234) + 0.5% 8,233) 4,928) 4,617) - 0.5% ( 8,233) ( 4,928) ( 4,617) c) Impairment testing At the date of each statement of financial position, the Group reviews the carrying amounts of its property, plant and equipment and intangible assets with finite useful lives to determine whether there is any indication that their carrying values are impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent, if any, of the impairment loss. Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Generally the Group’s property, plant and equipment items do not generate independent cash flows. Goodwill on acquisition is initially measured at cost being the excess of the cost of the business combination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities acquired. As of the acquisition date, any goodwill is allocated to the cash-generating unit (‘CGU’) expected to benefit from the business combination. Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is tested for impairment, annually or more frequently if events or changes in circumstances indicate that the carrying amount of the asset may be impaired. The impairment review requires management to undertake certain judgments, including estimating the recoverable value of the CGU to which the goodwill relates, based on either fair value less costs-to-sell or the value-in-use, as appropriate, in order to reach a conclusion on whether the goodwill is impaired or not. For purposes of the impairment testing, each CGU represents the smallest identifiable group of assets that generate cash inflows that are largely independent from the cash inflows of other assets or group of assets. Management has identified of six CGUs. CGUs tested using the value-in-use model for the years ended 31 December 2011 and 2010: The Group has identified 4 CGUs located in Peru, 1 CGU located in Ecuador and 1 located in Argentina. The Group tested all the CGUs identified using the value-in-use model. In performing the value-in-use calculation, the Group applied pre-tax rates to discount the future pre-tax cash flows of each CGU. In each case, key assumptions of management reflect its past experience and are consistent with relevant external sources of information, such as appropriate market data. Key assumptions used by management to determine the value-in-use which are considered to be the most sensitive to the calculation are:

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31 December 2011 2010

Financial projections covers 5 years covers 5 years Yield average growth rates between 1% and 9% 8% Future pricing increases between - 1% and 0% between 0% and 1% Future cost increases between - 3% and 13% -5% Discount rates 9.91% 9.67% Perpetuity rate 2.50% 2.50% Discount rates are based on the risk-free rate for U.S. government bonds, adjusted for a risk premium to reflect the general increased risk of investments in South America and in particular in Peru. The risk premium adjustment is assessed by factors specific to the respective CGUs and reflects the country in which the CGU operates in. The following table shows the CGUs to which goodwill was allocated as of 31 December 2011 and 2010 and the corresponding book value of the goodwill allocated to each CGU: 2011 2010 S/.000 S/.000 CGU / Country Casagrande / Peru 128,609 128,609 San Isidro / Argentina 8,600 - La Troncal / Ecuador 63,177 - Closing net book amount of goodwill allocated to CGUs 200,386 128,609 Closing net book amount of PPE items and other assets 2,366,578 1,398,904 Total assets allocated to 3 CGUs 2,566,964 1,527,513 No goodwill was allocated to the remaining identified CGUs: Cartavio, San Jacinto and Sintuco. Based on the value in use testing above, the Group has determined that none of the CGUs were impaired as of 31 December 2011 and 2010. Management considers views these assumptions in the value in use calculations as conservative and does not believe that any reasonable change in the assumptions would cause the carrying value of these CGU’s to exceed the recoverable amount. d) Income taxes - The Group is subject to income taxes in numerous jurisdictions. Significant judgment is required in determining the worldwide provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain. The Group recognizes liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the period in which such determination is made. Deferred tax assets are reviewed each reporting date and reduced to the extent that it is no longer probable that sufficient taxable income will be available to allow all or part of the asset to be recovered. Deferred tax assets and liabilities are not discounted. In assessing the recoverability of deferred tax assets, management considers whether it is probable that some portion or all of the deferred tax assets will not be realized.

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The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. e) Fair value of derivative financial instruments - The fair value of interest rate swaps has been calculated using a discounted cash flow analysis (see note 3.3).

5 SEGMENT INFORMATION IFRS 8 “Operating Segments” requires an entity to report financial and descriptive information about its reportable segments, which are operating segments or aggregations of operating segments that meet specified criteria. Operating segments are components of an entity about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. The CODM, which has been identified as the Board of Directors, evaluates the business based on the different locations. The amounts reported by each segment is the measure reported to the Board for these purposes. The Group operates in three geographic segments: Peru, Ecuador and Argentina as of December 31, 2011. In 2010, the Group operated only one segment. The measurement principles for the Group’s segment reporting structure are based on the IFRS principles adopted in the consolidated financial statements. Revenue generated and goods exchanged between segments are calculated on the basis of market prices. The following table presents information with respect to the Group’s reportable segments. Certain other activities of a holding function nature not allocable to the segments are disclosed in the column ‘Corporate’. Ecuador Argentina Peru La Troncal San Isidro Corporate Total S/.000 S/.000 S/.000 S/.000 S/.000 31 December 2011 Sales of products 1,129,134) 98,098) 77,183) - 1,304,415) Cost of products sold ( 605,128) ( 49,050) ( 51,051) - ( 705,229) Gross profit 524,006) 49,048) 26,132) - 599,186) Initial recognition and change in fair value of biological assets 189,776) ( 1,236) ( 185) - 188,355) Profit before operating expenses 713,782) 47,812) 25,947) - 787,541) Selling expenses ( 21,596) ( 3,593) ( 4,290) ( 769) ( 30,248) Administrative expenses ( 38,084) ( 21,305) ( 4,033) ( 2,964) ( 66,386) Other operating expenses, net ( 1,592) 1,114) ( 356) 677) ( 157) Profit from operations before financing and taxation 652,510) 24,028) 17,268) ( 3,056) 690,750) Ecuador Argentina Peru La Troncal San Isidro Corporate Total S/.000 S/.000 S/.000 S/.000 S/.000 31 December 2011 Property, plant and equipment 2,012,798 471,804 197,488 123,504 2,805,594 Biological assets 595,625 49,964 11,593 - 657,182 Investment in associates 832 - - 28,979 29,811 Goodwill 128,609 63,177 8,600 - 200,386 Inventories 127,789 142,455 23,421 6,730 300,395 Total segment assets 2,865,653 727,400 241,102 159,213 3,993,368 Borrowings 280,758 - 45,379 225,493 551,630 Total segment liabilities 280,758 - 45,379 225,493 551,630

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Peru Corporate Total S/.000 S/.000 S/.000 31December 2010 Sales of products 937,854) - 937,854) Cost of products sold ( 498,467) - ( 498,467) Gross profit 439,387) - 439,387) Initial recognition and change in fair value of biological assets 177,852) - 177,852) Profit before operating expenses 617,239) - 617,239) Selling expenses ( 17,892) ( 671) ( 18,563) Administrative expenses ( 41,468) ( 1,456) ( 42,924) Other operating expenses, net ( 20,740) 1,117) ( 19,623) Profit from operations before financing and taxation 537,139) ( 1,010) 536,129) Peru Corporate Total S/.000 S/.000 S/.000 31 December 2010 Property, plant and equipment 1,916,162 109,091 2,025,253 Biological assets 377,820 - 377,820 Investment in associates 832 471 1,303 Goodwill 128,609 - 128,609 Inventories 77,639 3,231 80,870 Total segment assets 2,501,062 112,793 2,613,855 Borrowings 316,179 217,440 533,619 Total segment liabilities 316,179 217,440 533,619 Peru Corporate Total S/. 000 S/. 000 S/. 000 1 January 2010 Property, plant and equipment 1,880,466 27,100 1,907,566 Biological assets 193,831 - 193,831 Investment in associates 832 474 1,306 Goodwill 128,609 - 128,609 Inventories 73,532 2,853 76,385 Total segment assets 2,277,270 30,427 2,307,697 Borrowings 247,697 195,980 443,677 Total segment liabilities 247,697 195,980 443,677 Total segment assets are measured in a manner consistent with that of the consolidated financial statements. These assets are allocated based on the operations of the segment and the physical location of the asset. The Group’s investment in the associate (acquired in December 2011) is located in Ecuador and therefore, the Group’s share of profit or loss after income taxes and its carrying amount will be reported within this segment. Total reportable segments’ assets are reconciled to total assets as per the statement of financial position as follows: 31 December 1 January 2011 2010 2010 S/.000 S/.000 S/.000 Total reportable assets as per Segment information 3,993,368 2,613,855 2,307,697 Intangible assets (excluding goodwill) 2,341 2,134 2,868 Deferred income tax asset 6,410 3,470 3,650 Trade and other accounts receivables 125,541 109,999 105,384 Cash and cash equivalents 114,277 70,982 21,367 Total assets as per the statement of financial position 4,241,937 2,800,440 2,440,966 Total segment liabilities are measured in a manner consistent with that of the consolidated financial statements. These liabilities are allocated based on the operations of each segment. Total reportable segments’ liabilities are reconciled to total assets as per the statement of financial position as follows:

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31 December 1 January 2011 2010 2010 S/.000 S/.000 S/.000 Total reportable liabilities as per Segment information 551,630 533,619 443,677 Trade and other accounts payable 708,431 345,578 518,497 Provisions and other liabilities 14,882 12,247 9,344 Derivative financial instruments 10,558 15,074 15,183 Deferred income tax liability 470,481 353,854 329,574 Total liabilities as per the statement of financial position 1,755,982 1,260,372 1,316,275 The following table presents information with respect to the Peru segment consisting of 4 CGUs: Casa Grande, Cartavio, San Jacinto and Sintuco: Casa San Elimi- Grande Cartavio Jacinto Sintuco Corporate nation Total S/.000 S/.000 S/.000 S/.000 S/.000 S/.000 S/.000 31 December 2011 Sales of products 583,390) 401,718) 164,855) 15,464) 46,040) ( 82,333) 1,129,134) Cost of products sold ( 277,175) ( 267,529) ( 89,274) ( 7,161) ( 34,268) 70,279) ( 605,128) Gross profit 306,215) 134,189) 75,581) 8,303) 11,772) ( 12,054) 524,006) Initial recognition and change in fair value of biological assets 98,138) 24,819) ( 65,906) 913) - - 189,776) Profit before operating expenses 404,353) 159,008) 141,487) 9,216) 11,772) ( 12,054) 713,782) Selling expenses ( 12,972) ( 10,380) ( 670) - - ( 2,426) ( 21,596) Administrative expenses ( 23,466) ( 14,516) ( 12,518) ( 948) - ( 13,364) ( 38,084) Other operating expenses, net ( 154) 4,114) ( 1,613) ( 82) - ( 4,021) ( 1,592) Profit from operations before financing and taxation 367,761) 138,226) 126,686) 8,350) 11,772) ( 285) 652,510) Casa San Elimi- Grande Cartavio Jacinto Sintuco nation Total S/.000 S/.000 S/.000 S/.000 S/.000 S/.000 31 December 2011 Property, plant and equipment 1,202,117) 421,238) 334,305) 55,138) ( - ) 2,012,798) Biological assets ( 355,773) ( 111,433) ( 116,097) ( 12,322) - ) ( 595,625) Investment in associates - ) 5,109) 399) - ) ( 4,676) 832) Goodwill 128,609) - ) - ) - ) ( - ) 128,609) Inventories ( 71,730) 44,704) ( 11,133) ( 222) ( - ) ( 127,789) Total segment assets 1,758,229) 582,484) 461,934) 67,682) ( 4,676) 2,865,653) Borrowings ( 119,141) 56,211) ( 105,406) ( - ) ( - ) ( 280,758) Total liabilities of Peru 119,141) 56,211) 105,406) - ) ( - ) 280,758) Casa San Elimi- Grande Cartavio Jacinto Sintuco Corporate nation Total S/.000 S/.000 S/.000 S/.000 S/.000 S/.000 S/.000 31 December 2010 Sales of products 490,760) 362,134) 122,687) 13,972) 42,641) ( 94,340) 937,854) Cost of products sold ( 233,833) ( 242,790) ( 70,926) ( 7,054) ( 31,927) 88,063) ( 498,467) Gross profit 256,927) 119,344) 51,761) 6,918) 10,714) ( 6,277) 439,387) Initial recognition and change in fair value of biological assets 132,188) 20,352) ( 19,774) 5,538) - - 177,852) Profit before operating expenses 389,115) 139,696) 71,535) 12,456) 10,714) ( 6,277) 617,239) Selling expenses ( 9,650) ( 8,834) ( 245) - - ( 837) ( 17,892) Administrative expenses ( 20,567) ( 12,964) ( 16,258) ( 769) - ( 9,090) ( 41,468) Other operating expenses, net ( 17,316) 1,423) ( 832) ( 3) - ( 4,018) ( 20,740) Profit from operations before financing and taxation 341,582) 119,321) 54,200) 11,690) 10,714) ( 368) 537,139) Casa San Elimi- Grande Cartavio Jacinto Sintuco nation Total S/.000 S/.000 S/.000 S/.000 S/.000 S/.000 31 December 2010 Property, plant and equipment 1,109,470) 428,050) 324,336) 54,306) ( - ) 1,916,162) Biological assets ( 247,369) ( 77,123) ( 42,335) ( 10,993) -) ( 377,820) Investment in associates - ) 5,109) 399) - ) ( 4,676) 832) Goodwill 128,609) - ) - ) - ) ( - ) 128,609) Inventories ( 42,065) 30,638) ( 4,792) ( 144) ( - ) ( 77,639) Total assets of Peru 1,527,513) 540,920) 371,862) 65,443) ( 4,676) 2,501,062) Borrowings ( 158,439) 53,152) ( 104,588) ( - ) ( - ) ( 316,179) Total liabilities of Peru 158,439) 53,152) 104,588) - ) ( - ) 316,179)

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Casa San Elimi- Grande Cartavio Jacinto Sintuco nation Total S/.000 S/.000 S/.000 S/.000 S/.000 S/.000 1 January 2010 Property, plant and equipment 1,072,168) 430,077) 323,670) 54,551) ( - ) 1,880,466) Biological assets ( 119,473) ( 55,128) ( 13,474) ( 5,756) -) ( 193,831) Investment in associates - ) 5,109) 399) - ) ( 4,676) 832) Goodwill 128,609) - ) - ) - ) ( - ) 128,609) Inventories ( 37,853) 33,576) ( 2,030) ( 73) ( - ) ( 73,532) Total assets of Peru 1,358,103) 523,890) 339,573) 60,380) ( 4,676) 2,277,270) Borrowings ( 109,677) 93,660) ( 44,360) ( - ) ( - ) ( 247,697) Total liabilities of Peru 109,677) 93,660) 44,360) - ) ( - ) 247,697)

6 PROPERTY, PLANT AND EQUIPMENT a) The movement of the property, plant and equipment and the related accumulated depreciation for

the years ended 31 December 2011 and 31 December 2010, and 1 January 2010 was as follows: Buildings Machinery Furniture Work and other and and fixtures in Land constructions equipment Vehicles and others progress Total S/.000 S/.000 S/.000 S/.000 S/.000 S/.000 S/.000 At 1 January 2010 Cost 1,330,077) 531,315) 659,184) 75,233) 48,739) 124,160) 2,768,708) Accumulated depreciation - ( 374,296) ( 427,168) ( 43,939) ( 15,739) - ( 861,142) Net book value 1,330,077) 157,019) 232,016) 31,294) 33,000) 124,160) 1,907,566) Year ended 31 December 2010 Opening net book value 1,330,077) 157,019) 232,016) 31,294) 33,000) 124,160) 1,907,566) Additions 65,954) 6,178) 425) 52) 22,284) 99,044) 193,937) Disposals ( 1,255) ( 204) ( 1,195) ( 82) ( 15,684) - ( 18,420) Transfers and adjustments 4,421) 37,171) 101,074) 12,199) ( 4,179) ( 150,844) ( 158) Depreciation charge (note 19) - ( 10,308) ( 37,157) ( 6,453) ( 3,754) - ( 57,672) Closing net book value 1,399,197) 189,856) 295,163) 37,010) 31,667) 72,360) 2,025,253) At 31 December 2010 Cost 1,399,197 569,296) 709,619) 84,432) 48,512) 72,360 2,883,416) Accumulated depreciation - ( 379,440) (414,456) ( 47,422) ( 16,845) - ( 858,163) Net book value 1,399,197 189,856) 295,163) 37,010) 31,667) 72,360 2,025,253) Buildings Machinery Furniture Work and other and and fixtures in Land constructions equipment Vehicles and others progress Total S/.000 S/.000 S/.000 S/.000 S/.000 S/.000 S/.000 Year ended 31 December 2011 Opening net book value 1,399,197) 189,856) 295,163) 37,010) 31,667) 72,360) 2,025,253) Acquisition of subsidiaries (*) 369,657) 142,719) 140,161) 5,865) 3,389) 23,171) 684,962) Exchange differences ( 7,347) ( 2,737) ( 2,688) ( 112) ( 65) ( 444) ( 13,393) Additions 1,293) 358) 4,383) 176) 10,350) 169,926) 186,486) Disposals ( 38) ( 528) ( 13) ( 56) ( 492) ( 1,009) ( 2,136) Transfers and adjustments 305) 22,151) 88,951) 6,978) ( 4,227) ( 114,521) ( 363) Depreciation charge (note 19) - ( 14,735) ( 47,232) ( 8,636) ( 4,612) - ( 75,215) Closing net book value 1,763,067) 337,084) 478,725) 41,225) 36,010) 149,483) 2,805,594) At 31 December 2011 Cost 1,763,067 730,443) 941,242) 96,866) 53,895) 149,483) 3,734,996) Accumulated depreciation - (393,359) ( 462,517) ( 55,641) ( 17,885) - ( 929,402) Net book value 1,763,067 337,084) 478,725) 41,225) 36,010) 149,483) 2,805,594) (*) Includes fixed assets of Vehra S.A. and Grupo Azucarero EQ2 for S/.196.9 million and S/.488.0 million, respectively (see note 23). b) Work in progress comprises all assets under construction and/or in set-up process, the costs of

which are accumulated until such assets are ready for their intended use /operation; time in which when they are transferred to their final classification asset account.

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Work in progress comprises:

At At 31 December 1 January 2011 2010 2010 S/.000 S/.000 S/.000

Buildings 50,049 14,599 33,243 Machinery and equipment ( 95,900 53,465 90,876 Other 3,534 4,296 41 149,483 72,360 124,160

During 2011 and 2010 investment projects in progress developed in Peru are related to: i) the acquisition of energy power generators for sugar plant, ii) freezing equipment, installation of sugar plant, mill expansion, improvements on centrifuge process, installation of irrigation equipment, mechanical harvester machine, construction of Garrapon Dam.

c) The depreciation for the years ended 31 December was recorded in the following line items: 2011 2010 S/.000 S/.000

Cost of products sold (note 19) 68,113 55,509 Selling expenses (note 19) 375 306 Administrative expenses (note 19) 6,727 1,857 75,215 57,672

d) The net carrying amount of machinery and equipment, vehicles and furniture and fixtures acquired under lease or leaseback agreements comprises the following: At 31 December At 1 January 2011 2010 2010 S/.000 S/.000 S/.000

Cost 10,774) 10,774) 13,772) Depreciation ( 4,828) ( 4,390) ( 2,798) Net 5,946) 6,384) 10,974)

e) Certain of the Group’s assets have been pledged as collateral to secure its borrowings and other

payables. The net book value of pledged assets amounts to S/.297 million as of 31 December 2011 (2010: S/.228 million).

f) As of 31 December 2011, assets recognized in the financial statements as property, plant and

equipment are insured up to a value of US$95 million. Management believes that the amount insured is consistent with international practices in the industry and takes into account the nature of the assets in estimating the risk of eventual damages.

7 INTANGIBLE ASSETS

The movement on intangible assets and its related accumulated amortization for the years ended 31 December 2011 and 2010 has been as follows: Goodwill Software Total S/.000 S/.000 S/.000 At 1 January 2010 Cost 128,609 5,330) 133,939) Accumulated amortization - ( 2,462) ( 2,462) Net book value 128,609 2,868) 131,477)

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Goodwill Software Total S/.000 S/.000 S/.000 Year ended 31 December 2010 Opening net book amount 128,609 2,868) 131,477) Additions - 294) 294) Amortization charge (note 19) - ( 1,028) ( 1,028) Closing net book value 128,609 2,134) 130,743) At 31 December 2010 Cost 128,609 5,624) 134,233) Accumulated amortization - ( 3,490) ( 3,490) Net book value 128,609 2,134) 130,743) Year ended 31 December 2011 Opening net book amount 128,609 2,134) 130,743) Acquisition of subsidiary (*) 71,777 1,211) 72,988) Additions - 991) 991) Disposals - ( 1,079) ( 1,079) Amortization charge (note 19) - ( 916) ( 916) Closing net book value 200,386 2,341) 202,727) At 31 December 2011 Cost 200,386 6,747) 207,133) Accumulated amortization - ( 4,406) ( 4,406) Net book amount 200,386 2,341) 202,727) (*) Includes goodwill of Vehra S.A. and Grupo Azucarero EQ 2 for S/.8.6 million and S/.63.2 million respectively (see note 23).The total of the amortization charge for the years ended 31 December 2011 and 2010 is included in administrative expenses in the consolidated statement of comprehensive income.

8 BIOLOGICAL ASSETS

Changes in the Group’s biological assets were as follows: At At 31 December 1 January 2011 2010 2010 S/.000 S/.000 S/.000 Beginning of the year 377,820) 193,831) 268,493) Cost incurred during the year 246,239) 189,766) 165,423) Acquisition of subsidiaries (*) 64,318) - - Harvest ( 217,934) ( 183,629) ( 179,941) Initial recognition and changes in fair value of biological assets (due to price and physical changes) 188,355) 177,852) ( 60,144) Exchange difference ( 1,616) ) - ) - ) End of the year 657,182) 377,820) 193,831) (*) Includes biological assets of Vehra and Grupo Azucarero EQ 2 for S/.11.3 million and S/.53.0 million, respectively (see note 23). The balance of the biological assets account is shown in the statement of financial position as follows:

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At At 31 December 1 January 2011 2010 2010 S/.000 S/.000 S/.000 Non-current 378,978 155,721 82,726 Current 278,204 222,099 111,105 Total biological assets 657,182 377,820 193,831

9 INVENTORIES This item comprises: At December 31, At January 1, 2011 2010 2010 S/.000 S/.000 S/.000 Raw materials 3,589 696 533 Products in process 6,541 3,052 2,771 Finished products (a) 188,778 37,664 32,050 Packaging and casing 1,754 1,994 1,878 Other supplies (b) 99,733 37,464 39,153 300,395 80,870 76,385 (a) Finished products comprise 134,665 tons of sugar the book value of which amounts to S/.163.9 million

(35,287 and S/.25.5 million, and 25,779 tns and S/.20.7 million, at 31 December 2010 and 1 January 2010, respectively) y 7,185,102 Its of alcohol the book value of which amounts to S/.13.4 million (5,567,704 Its and S/.8 million, and 4,695,001 Its and S/.6.6 million, at 31 December 2010 and 1 January 2010, respectively).

(b) This account comprises spare parts, materials and supplies used in connection with the maintenance of the

sugar plants located in Perú, Ecuador and Argentina.

10 FINANCIAL INSTRUMENTS BY CATEGORY The following table shows the carrying amounts of financial assets and financial liabilities by category of financial instrument and reconciliation to the corresponding line item in the statements of financial position, as appropriate. Since the line items “Trade and other accounts receivable”, “Trade and other accounts payable” and “Provisions and other liabilities” contain both financial instruments as well as non-financial assets and liabilities (such as taxes receivables or payments in advance), the reconciliation is shown in the columns headed as “Non-financial assets” and “Non-financial liabilities.”

Subtotal Non- Loans and financial financial receivables assets assets Total S/.000 S/.000 S/.000 S/.000

31 December 2011 Assets as per statement of financial position: Cash and cash equivalents 114,277 114,277 - 114,277 Trade and other accounts receivable 86,826 86,826 38,715 125,541 Total 201,103 201,103 38,715 239,818

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Other Subtotal Non- financial financial financial liabilities liabilities liabilities Total S/.000 S/.000 S/.000 S/.000

Liabilities as per statement of financial position: Borrowings (excluding finance lease) 548,528 548,528 - 548,528 Finance lease 3,102 3,102 - 3,102 Trade and other accounts payables 604,223 604,223 104,208 708,431 Provision and other liabilities - - 14,882 14,882 Total 1,155,853 1,155,853 119,090 1,274,943


31 December 2010 Assets as per statement of financial position: Cash and cash equivalents 70,982 70,982 - 70,982 Trade and other accounts receivable 87,901 87,901 22,098 109,999 Total 158,883 158,883 22,098 180,981


Liabilities as per statement of financial position: Borrowings (excluding finance lease) 528,542 528,542 - 528,542 Finance lease 5,077 5,077 - 5,077 Trade and other accounts payable 297,669 297,669 47,909 345,578 Provision and other liabilities - - 12,247 12,247 Total 831,288 831,288 60,156 891,444


1 January 2010 Assets as per statement of financial position: Cash and cash equivalents 21,367 21,367 - 21,367 Trade and other accounts receivables 88,559 88,559 16,825 105,384 Total 109,926 109,926 16,825 126,751


Liabilities as per statement of financial position: Borrowings (excluding finance lease) 433,091 433,091 - 433,091 Finance lease 10,586 10,586 - 10,586 Trade and other accounts payable 455,845 455,845 62,652 518,497 Provision and other liabilities - - 9,344 9,344 Total 899,522 899,522 71,996 971,518 Other financial liabilities are carried at amortized cost. The account “Other financial liabilities” includes liabilities under finance leases in which the Group acts as the lessee, therefore such balances are measured

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in accordance with IAS 17. The categories disclosed above have been determined by reference to IAS 39. Finance leases are excluded from the scope of IFRS 7. Therefore, finance leases have been shown separately. Derivative financial instruments are accounted for under “hedge accounting” as defined by IAS 39 (see note 3.3). Because of the short maturities of trade accounts receivable and payable, other receivables and liabilities, their carrying amounts at the dates of the statements of financial position do not differ significantly from their respective fair values. The fair value of long-term borrowings is disclosed in note 13. Income, expenses, gains and losses on financial instruments shown in the statement of comprehensive income correspond to the following categories:

Other Loans and financial receivables liabilities Total S/.000 S/.000 S/.000

31 December 2011 Interest income 2,461 - 2,461 Interest expense - ( 47,446) ( 47,446)

31 December 2010 Interest income 1,621) - 1,621 Interest expense - ( 45,388) ( 45,388) Fair values determination IAS 39 defines the fair value of a financial instrument as the amount for which a financial asset could be exchanged, or a financial liability settled, between knowledgeable, willing parties in an arm’s length transaction. All financial instruments recognized at fair value are allocated to one of the valuation hierarchy levels of IFRS 7. This valuation hierarchy provides for three levels. The initial basis for the allocation is the “economic investment class”. Only if this does not result in an appropriate allocation the Group deviates from such an approach in individual cases. The allocation reflects which of the fair values derive from transactions in the market and where valuation is based on valuation models because there is lack of market transactions. For the years ended 31 December 2011 and 2010, the financial instruments recognized at fair value on the statement of financial position comprise only derivative financial instruments. In the case of Level 1, valuation is based on unadjusted quoted prices in active markets for identical financial assets that the Group can refer to at the date of the statement of financial position. A market is deemed active if transactions take place with sufficient frequency and in sufficient quantity for price information to be available on an ongoing basis. Since a quoted price in an active market is the most reliable indicator of fair value, this should always be used if available. The Group does not have financial instruments allocated to this level for any of the years presented. Not traded derivatives allocated to Level 2 are valued using models based on observable market data. For this, the Group uses inputs directly or indirectly observable in the market, other than quoted prices. If the financial instrument concerned has a fixed contract period, the inputs used for valuation must be observable for the whole of the period. The financial instruments the Group has allocated to this level comprise interest-rate swaps and foreign-currency interest-rate swaps. In the case of Level 3, the Group uses valuation techniques not based on inputs observable in the market. This is only permissible insofar as no observable market data are available. The inputs used reflect the Group’s assumptions regarding the factors which market players would consider in their pricing. The Group uses the best available information for this, including internal company data.

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The Group does not have any financial instruments allocated to this level for any of the years presented.

11 TRADE AND OTHER ACCOUNTS RECEIVABLE This item comprises: At 31 December At 1 January 2011 2010 2010 S/.000 S/.000 S/.000 Non-current Accounts receivables to related parties (note 28) 8,224 7,982 20,446 Current Trade accounts receivable 36,029 21,203 28,728 Trade accounts receivables to related parties (note 28) 17,827 47,508 28,145 Trade accounts receivable 53,856 68,711 56,873 Prepaid expenses 6,031 6,319 2,779 Value Added Tax (VAT) 21,057 8,449 2,514 Tax claims 8,152 4,773 9,473 Loans to third parties 10,665 5,009 2,436 Payments in advance of the income tax 3,475 2,557 2,059 Accounts receivable to related parties (note 28) 2,569 2,476 1,994 Miscellaneous accounts receivable 11,512 3,723 6,810 Total other accounts receivable 63,461 33,306 28,065 Total current accounts receivable 117,317 102,017 84,938 Total trade and other accounts receivable 125,541 109,999 105,384 The fair values of current trade and other accounts receivable approximate their respective carrying amounts due to their short-term maturity. The fair values of non-current trade and other accounts receivable approximate their carrying amount, as the impact of their discount is not significant for the financial statements taken a whole. The carrying amounts of the Group’s trade and other accounts receivable are denominated in the following currencies (expressed in Nuevos Soles): At December 31 January 1 2011 2010 2010 S/.000 S/.000 S/.000 Currency Nuevos Soles 52,625 56,094 44,682 US Dollars 47,812 53,905 60,702 Argentine Peso 25,104 - - 125,541 109,999 105,384 The Group recognizes an allowance for doubtful trade accounts receivable when there is objective evidence that the Group will not be able to collect all amounts due according to their original terms. Delinquency in payments is considered an indicator that the trade accounts receivable may be impaired. However, management considers all available evidence in determining when a receivable is impaired. Generally, trade accounts receivable, which are more than 180 days past due are fully provided for. However, certain accounts receivable which are more than 180 days overdue are not provided for based on a case-by-case analysis of the credit quality of the account. Furthermore, accounts receivables, which are not more than 180 days overdue, may be provided for if specific analysis indicates their potential impairment.

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As of 31 December 2011 and 2010 and 1 January 2010, the allowance for doubtful trade and other accounts receivable amounted to S/.14.8 million. The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above (see note 3.1.v).

12 CASH AND CASH EQUIVALENTS At 31 December At 1 January 2011 2010 2010 S/.000 S/.000 S/.000 Cash at bank and on hand 113,419 64,329 16,334 Short-term bank deposits 858 6,653 5,033 114,277 70,982 21,367

13 BORROWINGS This item comprises: At 31 December At 1 January 2011 2010 2010 S/.000 S/.000 S/.000 Non-current Promissory notes 258,982 344,526 277,657 Leases 991 2,758 6,544 259,973 347,284 284,201 Current Overdrafts 1,763 918 1,442 Promissory notes 287,783 183,098 153,992 Leases 2,111 2,319 4,042 291,657 186,335 159,476 Total borrowings 551,630 533,619 443,677 These loans are mainly collateralized by property, plant and equipment and shares of certain subsidiaries of the Group as disclosed in note 26 d). The maturity of the Group’s borrowings (excluding obligations under finance leases) and the Group’s exposure to fixed and variable interest rates are as follows: At 31 December At 1 January 2011 2010 2010 S/.000 S/.000 S/.000 Fixed rate: Less than 1 year 215,802 142,820 119,346 Between 1 and 2 years 80,347 60,984 82,713 Between 2 and 5 years 121,006 149,129 22,544 More than 5 years 8,659 10,892 3,010 425,814 363,825 227,613 Variable rate: Less than 1 year 73,744 41,196 36,088 Between 1 and 2 years 12,377 72,157 108,472 Between 2 and 5 years 36,593 51,364 37,170 More than 5 years - - 23,748 122,714 164,717 205,478 Total borrowings 548,528 528,542 433,091

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The carrying amounts of the Group’s borrowings are denominated in the following currencies (expressed in Nuevos Soles):

At 31 December At 1January 2011 2010 2010 S/.000 S/.000 S/.000 Nuevos Soles 250,916 318,127 177,470 Argentine Peso 7,136 - - US Dollar 290,476 210,415 255,621 548,528 528,542 433,091

Group’s borrowings with fixed rates in the following currencies, are as follows: At 31 December At 1January 2011 2010 2010 % % %

Nuevos Soles 6.90 - 7.75 3.92 - 7.75 5.40 - 11.50 Argentine Peso 1.50 - 15.00 - - US Dollar 2.11 – 14.00 2.80 – 3.43 6.24 - 7.63

The exposure of fixed interest bearing borrowings to changes in market interest rates and their corresponding reprising date at year-end is shown in the liquidity risk assessment in note 3.1.iii. Obligations under finance leases - The maturity of the Group’s minimum lease payments is as follows: At 31 December At 1January 2011 2010 2010 S/.000 S/.000 S/.000 Minimum payments Lower than 1 year 2,319) 2,615) 4,645) From 1 to 5 years 1,078) 3,017) 7,063) 3,397) 5,632) 11,708) Future financial charges ( 295) ( 555) ( 1,122) Present value of lease obligations 3,102) 5,077) 10,586) The Group estimates that the carrying amount of short-term loans approximates their fair value due to their short-term nature. The Group estimates the fair values of long-term bank loans based on current rates available for the Group for debt of similar terms and maturities. The Group’s fair value of long-term bank loans was not significantly different from the carrying value at December 31, 2011 and 2010 and 1 January 2010.

14 TRADE AND OTHER ACCOUNTS PAYABLE

At 31 December 1 January 2011 2010 2010 S/.000 S/.000 S/.000 Non-current: Trade accounts payable to related parties (note 28) 10 27,687 27,691 Tax debt 52,339 4,194 2,877 Payroll and social security payable 12,594 7,656 150,171 Account payable from acquisition of subsidiaries (note 23) 227,009 - - Other accounts payable 4,095 3,616 11,448 Total non-current portion 296,047 43,153 192,187

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At 31 December 1 January 2011 2010 2010 S/.000 S/.000 S/.000 Current Trade accounts payable 97,681 61,130 73,057 Trade accounts payable to related parties (note 28) 87,744 103,217 85,505 Payroll and social security payable 104,205 78,193 93,248 Accounts payable from acquisition of subsidiaries (note 23) 18,486 - - Accounts payable from acquisition of associate (*) 19,619 - - Income tax payable 38,521 24,022 11,158 Dividends payable 12,416 - - Payments in advances to customers 13,348 19,693 48,617 Other accounts payable 20,364 16,170 14,725 Total current portion 412,384 302,425 326,310 Total trade and other accounts payable 708,431 345,578 518,497 (*) This account corresponds to the amount outstanding for the acquisition of 50% of the shares of

Compañía Producargo S.A. amounting to S/.28.5 million (US$10.6 million) according to the agreement signed on 14 December 2011.

The fair values of current trade and other accounts payable approximate their respective carrying amounts due to their short-term maturity. The fair values of non-current trade and other accounts payable approximate their carrying amounts, as the impact of their discount is deemed to be insignificant.

15 PROVISIONS AND OTHER LIABILITIES The Group is subject to several laws, regulations and business practices in the countries where it operates. In the ordinary course of business, the Group is subject to certain contingent liabilities with respect to existing or potential claims, lawsuits and other proceedings, including those involving labor and social security and civil amounting to S/.11 million and S/.3.8 million respectively (S/.8.9 million and S/.3.3 million respectively at 31 December 2010 and S/.6.1 million and S/.3.3 million respectively at 1 January 2010) The Group accrues liabilities when it is probable that future costs will be incurred and their amounts can be reasonably estimated. The Group bases its accruals on up to-date developments, estimates of the outcomes of the matters and legal counsel experience in contesting, litigating and settling matters. As the scope of the liabilities becomes better defined or more information is available, the Group may require to change its estimates of future costs, which could have a material effect on its results of operations and financial condition or liquidity. The table below shows the movements in the Group’s provisions for other liabilities: Total S/.000 At 1 January 2010 9,344) Additions ( 2,903) At 31 December 2010 12,247) Additions ( 2,635) At 31 December 2011 14,882)

The balance of the provisions and other liabilities account is shown in the statement of financial position as follows:

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At At 31 December 1 January 2011 2010 2010 S/.000 S/.000 S/.000 Non-current 8,566 9,086 8,197 Current 6,316 3,161 1,147 Total provisions and other liabilities 14,882 12,247 9,344

16 TAXATION Coazucar is subject to the applicable Peruvian general tax regulations. The Group’s income tax has been calculated on the estimated assessable taxable profit for the year at the rates prevailing in the respective foreign tax jurisdictions. The subsidiaries of the Group in the jurisdictions where the Group operates are required to calculate their income taxes on a separate basis; thus, they are not permitted to compensate subsidiaries´ losses against subsidiaries income. The details of the income tax charged to the statement of comprehensive income for the years ended 31 December are as follows: 2011 2010 S/.000 S/.000 Current income tax 79,248 51,309 Deferred income tax 25,336 24,460 Income tax expense 104,584 75,769 The details of the provision for the Group’s income tax by country are as follows:

2011 2010 S/.000 S/.000

Current income tax: Perú 67,369 51,309 Argentina 6,664 - Ecuador 5,215 -

79,248 51,309 Deferred income tax: Peru 27,077) 24,460 Argentina 65) - Ecuador ( 1,806) -

25,336) 24,460 Total 104,584) 75,769 The statutory tax rate in the countries where the Group operates for all of the years presented are: Tax jurisdiction Income tax rate Peru (*) 30% Argentina 35% Ecuador 22% (*) According to Peruvian tax legislation currently in effect, entities engaged in the agro-industrial activity have a temporary tax holyday by means of a reduction of the general income tax rate to 15% until 31 December 2021.

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The analysis of deferred tax assets and deferred tax liabilities is as follows: At 31 December At 1January 2011 2010 2010 S/.000 S/.000 S/.000 Deferred income tax asset Recoverable in 12 months ( 4,126) ( 847) ( 2,184) Recoverable in more than 12 months ( 9,272) ( 8,936) ( 9,380) Total assets ( 13,398) ( 9,783) ( 11,564) Deferred income tax liabilities Recoverable in 12 months 24,832 17,245 14,065 Recoverable in more than 12 months 452,637 342,922 323,423 Total liability 477,469 360,167 337,488 Net 464,071 350,384 325,924 The movement in the deferred income tax assets and liabilities during the year, without taking into consideration the offsetting of balances within the same tax jurisdiction, is as follows:

Property Plant and Biological

Deferred income tax liabilities equipment assets Others Total S/.000 S/.000 S/.000 S/.000

At 1 January 2010 330,049) 6,907 532) 337,488 Charged / (credit) to Statement of Comprehensive Income ( 3,880) 26,678 ( 119) 22,679 At 31 December 2010 326,169) 33,585 ( 413) 360,167 Charged / (credit) to Statement of Comprehensive Income ( 3,213) 28,135 ( 193) 24,729 Acquisition of subsidiary ( 86,739) 5,834 ( - ) 92,573 At 31 December 2011 ( 409,695) 67,554 ( 220) 477,469

Cumula- Provisions Provision tive trans and for inven- lation ad- Deriva- vacations tory im- Deferred income tax assets justment tives payable pairment Others Total

S/.000 S/.000 S/.000 S/.000 S/.000 S/.000 At 1 January 2010 - ( 4,555) ( 2,202) ( 1,602) ( 3,205) ( 11,564) Charged / (credit) to Statement of Comprehensive Income - 33) ( 71) ( 15) ) 1,834) 1,781)) At 31 December 2010 - ( 4,522) ( 2,273) ( 1,617) ( 1,371) ( 9,783)) Charged / (credit) to Statement of Comprehensive Income - 1,355) ( 874) ( 135) ) 261) 607) Charged / (credit) to other comprehensive Income ( 4,222) - ) ) - ) ) - ) ) - ) ( 4,222) At 31 December 2011 ( 4,222) ( 3,167) ( 3,147) ( 1,752) ( 1,110) ( 13,398) The tax on the Group’s profit before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to profits of the consolidated entities as follows: 2011 2010 S/.000 S/.000 Income before income tax as per each entity of the Group’s financial statements 664,119) 503,458) Income tax by applying at the tax rates applicable to profits in the respective countries 106,347) 75,428) Non-deductible items 4,231) 2,812) Non-taxable income ( 7,228) ( 3,622) Tax losses for which no deferred income tax asset was recognized ( 1,696) ( 898) Others ( 462) ( 253) Income tax expense 104,584) 75,769)

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17 EQUITY a) Capital - As of 31 December 2011 the Company’s authorized, issued and paid – in capital is represented by 287,011,574 common shares of S/.1.00 par value each (287,011,574 and 270,135,574 common shares as of 31 December 2010 and as of 1 January 2010, respectively) from which the Company owns 99.99% interest. The remaining interest is held by three other stockholders. b) Legal and other reserves

(i) As established under Peruvian Corporate Law, a legal reserve is made with a transfer of 10% of the annual profits obtained until it reaches a 20% of the paid-in capital. If not undistributed profits or freely available reserves exist, the legal reserve may be applied to offset tax losses, but it has to be replenished with profits to be obtained in subsequent periods. This reserve may be capitalized, but it has to be subsequently replenished.

(ii) As established under Ecuador Corporate Law, a legal reserve is made with a transfer of

10% of the annual profits obtained until it reaches a 50% of the paid-in capital. As established under Argentine Corporate Law, a legal reserve is made with a transfer of 5% of the annual profits obtained until it reaches a 20% of the paid-in capital.

(iii) Acquisition of additional interest in a subsidiary -

On March 2010, the Company acquired an additional 10.01% of the issued shares of Agroindustrias San Jacinto S.A.A. (SJ) for a purchase consideration of S/.13.9 million. After this acquisition, the Group holds an 82.63% interest in SJ. The carrying amount of the non-controlling interest in SJ on the transaction was S/.17.9 million. The Group derecognized the non-controlling interest of S/.17.9 million and recorded an increase in the equity attributable to the owners of the parent of S/.3.6 million. On August 2010, the Company acquired an additional 12.40% of the issued shares of Empresa Agrícola Sintuco S.A. (EAS) for a purchase consideration of S/.2.3 million. After this acquisition the groupholds a 57.69% interest in EAS. The carrying amount of the non-controlling interest in EAS on the date of transaction was S/.5.1 million. The group derecognized non-controlling interest of S/.5.1 million and recorded an increase in equity attributable to the owners of the parent of S/.3.2 million. The effect of changes in the ownership interest of Coazucar S.A. on the equity attributable to owners of the Company during 2010 is summarized as follows: S/.000 Carrying amount of non-controlling interests acquired 23,060) Consideration paid to non-controlling interests ( 16,289) Excess of consideration paid recognized in parent’s equity 6,771) There were no transactions with the non-controlling interest in 2011.

c) Retained earnings - Under Peruvian current legislation, there are no restrictions on the remittance of dividends or for the repatriation of capital to foreign investors. In Ecuador, dividends distributed to individuals and entities domiciled in tax heavens are subject to a 24% income tax rate as from fiscal 2011. In Argentina dividends are not subject to taxes.

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18 SALES OF PRODUCTS Revenue for the years ended December 31 comprises: 2011 2010 S/.000 S/.000 Sugar: - Brown 738,892 581,121 - White 375,215 248,811 - Organic 52,121 - Ethanol 93,401 74,912 Other 44,786 33,010 1,304,415 937,854

19 EXPENSES BY NATURE The following table provides the nature of expenses and their relationship to the function within the Group: Administrative Cost of products sold Selling expenses expenses Total 2011 2010 2011 2010 2011 2010 2011 2010 S/.000 S/.000 S/.000 S/.000 S/.000 S/.000 S/.000 S/.000 Inventory variance ( 107,487) ( 5,695) - - - - ( 107,487) ( 5,695) Raw materials 413,964) 264,627) - - - - 413,964) 264,627) Cost of products sold ) 32,094) ) 23,956) - - - - ) 32,094) 23,956) Other manufacturing expenses 94,143) 67,400) - - - - 94,143) 67,400) Consumables used in manufacturing activities 36,290) 14,076 - - - - 36,290) 14,076) Salaries and social security expenses (note 20) 118,635) 64,285) 2,615 526 14,321 12,649 135,571) 77,460) Fees, commissions and legal advisors - ) - ) 4,062 2,850 8,870 2,437 12,932) 5,287) Transport and travel expenses - ) - 1,156 55 1,853 1,005 3,009) 1,060) Freights - ) - 19,503 14,185 - - ) 19,503) 14,185) Maintenance and repairs 27,169) 7,282) 15 7 1,346 151 28,530) 7,440) Export taxes / selling taxes - ) - 144 20 5,374 4,522 5,518) 4,542) Depreciation (note 6) 68,113) ) 55,509) ) 375 306 6,727 1,857 75,215) 57,672) Amortization (note 7) - ) - ) - - 916 1,028 916) 1,028) Services 22,308) ) 7,027) ) 280 330 10,439 4,999 33,027) 12,356) Other - ) - ) 2,098 284 16,540 14,276 ( 18,638) ( 14,560) 705,229) 498,467) 30,248 18,563 66,386 42,924 ( 801,863) 559,954)

20 SALARIES AND SOCIAL SECURITY EXPENSES

The salaries and social security expenses for the years ended 31 December comprises the following: 2011 2010 S/.000 S/.000 Wages and salaries 58,621 28,298 Social contributions 8,060 1,486 Bonus 4,748 3,670 Employees’ severance indemnities 3,711 2,324 Worker’s profit sharing 55,753 37,637 Vacation leave 1,996 2,190 Other benefits 2,682 1,855 135,571 77,460

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21 OTHER OPERATING EXPENSES The other operating expenses for the years ended 31 December comprises the following: 2011 2010 S/.000 S/.000 Other operating income: Profit from fixed asset sale 1,231) - ) Recovery of tax claims 1,547) 1,897) Recovery of provisions 1,419) 1,492) Equipment rentals 1,362) 634) Other income 1,994) 6,412) 7,553) 10,435) Other operating expenses: Write-off of property, plant and equipment ( 784) ( 17,949) Labor and legal claims ( 2,635) ( 2,903) Loss from fixed asset sale ( - ) ( 155) Destruction of products ( 1,086) ( 2,560) Other expenses ( 3,205) ( 6,491) ( 7,710) ( 30,058) ( 157) ( 19,623)

22 FINANCIAL INCOME (EXPENSES)

The financial income (expenses) for the years ended 31 December comprises the following: 2011 2010 S/.000 S/.000 Financial income: Interests on bank deposits 1,591 361 Interest on loans 229 539 Other 641 721 Total financial income 2,461 1,621 Financial expenses: Interest on borrowings 40,138 29,096 Interest on other obligations 713 3,651 Interest on commercials loans 197 45 Interest on tax debts 445 2,652 Loss on financial instruments 3,993 8,748 Other financial expenses 1,960 1,196 Total financial expenses 47,446 45,388

23 BUSINESS COMBINATIONS a) Acquisition of Verha S.A. (Ingenio San Isidro) On August 2011, the Group acquired 60% of the issued share capital of Verha S.A., an Argentine-based company involved in the sugarcane agricultural industry. The purchase price of S/.90.8 millions was fully paid in cash. The activities of Verha are developed in the plantations and facilities jointly named “Ingenio San Isidro”. Ingenio San Isidro is located in the city of Campo Santo, some 59 kilometers away from the city of Salta.

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In the period from its acquisition to 31 December 2011, Verha contributed revenues of S/. 77.2 million and profits before taxation of S/.22.2 millions to the Group’s consolidated results. If Verha had been acquired on 1 January 2011, combined revenues of the Group would have been S/.107.8 millions (unaudited) and profits would have been S/.6.4 millions (unaudited) for the year ended 31 December 2011. Results, assets and liabilities of Verha as from the acquisition date are included within the Argentina segment. Details of the net assets acquired and goodwill are as follows: S/.000 Consideration at 31 August 2011 - Cash paid 90,750) Total purchase consideration 90,750) Fair value of net assets 136,916) Non - controlling interest ( 54,766) Fair value of net assets acquired 82,150) Goodwill (note 7) 8,600) Goodwill generated on the acquisition was attributable mainly to the Group’s expected benefits from diversification and expansion into high-yield potential farmland properties. The assets and liabilities at the date of acquisition are as follows: S/.000 At 31 August 2011 Property, plant and equipment (note 6) 196,956) Biological assets (note 8) 11,299) Inventories 25,176) Trade and other accounts receivables 36,975) Cash and cash equivalents 2,371) Borrowings ( 47,583) Trade and other accounts payables ( 16,405) Payroll and social security liabilities ( 12,796) Deferred income tax liabilities (note 16) ( 59,077) Fair value of net assets 136,916) The cash flow and cash equivalents on the acquisition can be calculated as follows: Cash paid ( 90,750) Cash and cash equivalents of the acquired subsidiary 2,371) Net cash outflow from acquisition ( 88,379) b) Acquisition of a company in Ecuador - On September 2011, the Group acquired 36.4% of the issued share capital of Grupo Azucarero EQ2 S.A, an Ecuadorian company involved in the sugarcane agricultural industry. The purchase price includes an upfront cash payment of S/.37.3 millions and a long term liability amounting S/.252.1 millions bearing interest at 5%. The liability is payable over a 15 year-period. Grupo Azucarero EQ2 S.A. is known in Ecuador as Ingenio La Troncal. The sugarcane plantations and mills are located in the province of Cañar, South East of Guayaquil and 128 km North West of the city of Cuenca.

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In the period from acquisition to 31 December 2011, Grupo Azucarero EQ2 S.A contributed revenues of S/. 98.1 million and profits before taxation of S/. 25.5 million to the Group’s consolidated results. If Grupo Azucarero EQ2 S.A had been acquired on 1 January 2011, combined revenues of the Group would have been S/.48.9 millions (unaudited) and profits would have been S/.6.3 millions (unaudited) for the year ended 31 December 2011. Results, assets and liabilities of Grupo Azucarero EQ2 S.A as from the acquisition date are included within the Ecuador segment. Details of the net assets acquired and goodwill are as follows: S/.000 Consideration at September, 2011 - Cash paid 37,342) - Present value of outstanding purchase price (*) 252,066) Total purchase consideration 289,408) Fair value of net assets 621,516) Non-controlling interest ( 395,285) Fair value of net assets acquired 226,231) Goodwill (note 7) 63,177) (*) Discounted at present value as of the date of acquisition using the interest rate of 8.34% (note 14). The goodwill generated on the acquisition was attributable mainly to the Group’s expected benefits from diversification and expansion into high-yield potential land properties. The assets and liabilities at the date of acquisition are as follows: S/.000 At September 2011 Property, plant and equipment (note 6) 488,006) Intangible assets (note 7) 1,211) Biological assets (note 8) 53,019) Inventories 136,529) Trade and other accounts receivables 99,991) Cash and cash equivalents 76,251) Trade and other accounts payables ( 168,618) Payroll and social security liabilities ( 20,296) Income tax payable ( 11,083) Deferred income tax liabilities (note 16) ( 33,494) Fair value of net assets 621,516) The cash flow and cash equivalents on the acquisition can be calculated as follows: S/.000 Cash paid ( 37,342) Cash and cash equivalents of the acquired subsidiary ( 76,251) Net cash received from acquisition ( 38,909)

24 EARNINGS PER SHARE Basic earnings and diluted per share is calculated by dividing the profit attributable to equity holders by the weighted-average of outstanding common shares as of the date of the statement of financial position. For all periods presented, there were no differences in the weighted-average outstanding common shares used for the calculation of the basic and diluted earnings per share since the Company does not have any financial instrument with dilutive features.

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2011 2010 S/.000 S/.000 Profit for the year attributable to equity holders of the Group 365,586 279,347 Weighted average number of shares in issue (thousands) 287,012 287,012 Basic and diluted earnings per share 1.27 0.97

25 CASH FROM OPERATING ACTIVITIES The reconciliation from profit before income tax to cash generated from operations is as follows: 2011 2010 S/.000 S/.000 Profit before income tax 664,119) 503,458) Adjustments: - Depreciation (note 6) 75,215) 57,672) - Amortization (note 7) 916) 1,028) - Fair value of biological assets (note 8) ( 188,355) ( 177,852) - Fair value gains on derivative financial instruments (note 3.3) ( 5,393) ( 109) - Loss (profit) on disposal of property, plant and equipment ( 1,231) 1,243) - Write-off of property, plant and equipment items 784) 16,773) - Other provisions 2,635) ( 1,571) Net changes - Biological asset ( 28,305) 6,137) - Inventories ( 219,525) ( 4,485) - Trade accounts and other accounts receivables 30,156) ( 17,848) - Trade accounts and other accounts payables 135,837) ( 199,047) Cash generated from operations 466,853) 185,399)

26 COMMITMENTS, CONTINGENCIES AND GUARANTEES a) Environment The Group, in compliance with the Peruvian General Environmental Law No. 28611 and as a factor of strategic development and competitiveness has prepared its Environmental Management Program (PAMA) which involves preliminary monitoring and follow-up activities such as its baseline studies; to identify possible environmental contamination sources as well as those major environmental components that may have a significant impact on the environment as a way to: 1. Mitigate the environmental impact and the hazard to health resulting from productive activities, 2. Optimize the consumptions of raw materials, resources and energy, and 3. Adequately dispose of waste and emissions This will be reflected in significant economic benefits. With respect to Verha and subsidiaries, since its major product is organic sugar, it does not use chemical products in its plantations and manufacturing processes; it has 8 ha. dedicated to treat VINAZA and transform solid waste into organic fertilizer, thus contributing to the environment protection and conservation. With respect to Group Azucarero EQ 2 is in the process of lifting the ex post Environment Impact Study to obtain an environmental license issued by the Ministry of Environment. According to legal counsel, there is no environmental liability related.

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Once the Environmental Strategic Planning was executed, the Group began developing environmental instruments such as: Environmental Management Programs as well as programs for the management of solid waste, identification of environmental hazards, risks and impacts and record management and contingency plans. As required by applicable laws and regulations in Peru, expert advice has been obtained from environmental consulting firms which are assisting the Group in updating authorizations and studies required by the authorities. The Company's Environmental Management Program (PAMA) has already been approved by the environmental agency of the Peruvian Ministry of Agriculture (Dirección General de Asuntos Ambientales del Ministerio de Agricultura) dated 4 December 2011. This document contains a diagnosis of the environmental aspects and proposes pollution prevention and control actions required to prevent, control and mitigate the environmental impacts as contained in this document. b) Contingencies Management has not considered necessary to make any additional provision other than the amount recognized in the financial statements (see note 15). (note 15). c) Commitment to purchase fixed assets - The investment expense not recognized at the date of the statement of financial position is as follows: 31 December 1 January 2011 2010 2010 S/.000 S/.000 S/.000 Property, plant and equipment 109,000 24,000 30,000

d) Guarantees given - At December 31, 2011 the Company maintains liens, mortgages and shares pledged for up to S/.160 million, 19 millions Argentinean pesos and US$46.5 million to secure borrowings with financial institutions (S/.151 million and US$ 27.5 million, at December 31, 2010). Additionally, it has performance bonds signed with financial institutions amounting to US$184,000.

27 GROUP COMPANIES The following table details the companies making up the Group as of December 31, 2011 and 2010: Percentage of interest ActivitiesCountry 2011 2010 Detail of principal subsidiary Undertakings: Operating companies: Cartavio S.A.A. (a) Perú 87.17 87.17 Casa Grande S.A.A. (a) Perú 57.09 57.09 Empresa Agrícola Sintuco S.A. (a) Perú 57.69 45.29 Agroindustrias San Jacinto S.A.A. (a) Perú 82.63 72.62 Ecudos S.A. (a) Ecuador 36.40 - Sacorpren S.A. (a) Ecuador 36.40 - Prosal S.A. (a) Argentina 59.40 - Verha S.A. (a) Argentina 60.00 - Persol S.A. (b) Ecuador 36.40 - Pracmac S.A. (b) Ecuador 36.40 - Agrícola Agriflorsa S.A. (b) Ecuador 36.40 - Broxcel S.A. (b) Ecuador 36.40 - Defaxcorza S.A. (b) Ecuador 36.40 - Agrícola Chimborazo Chimsa S.A. (b) Ecuador 36.40 - Emaisa S.A. (b) Argentina 39.15 - Esdestiva S.A. (c) Ecuador 36.40 - Podec S.A. (c) Ecuador 36.40 - Bio San Isidro S.A. (d) Argentina 52.92 -

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Percentage of interest Activities Country 2011 2010 Holdings companies: Fideicomiso Mercantil Consorcio Azucarero Ecuatoriano - Ecuador 52.00 - Principal associate: Producargo S.A. (d) Ecuador 36.40 - (a) Mainly sugarcane (b) Mainly land or equipment rentals to group companies (c) Mainly loading and unloading services to group companies (d) Mainly ethanol

28 RELATED PARTIES The balances of receivable and payable with related parties were as follows: At 31 December At 1 January 2011 2010 2010 S/.000 S/.000 S/.000 Non-current accounts receivable Other accounts receivable: Empresa Agraria Chiquitoy S.A. 6,618 7,149 19,589 Tableros Peruanos S.A. 799 833 857 Other 807 - - Total non-current accounts receivable 8,224 7,982 20,446 Current accounts receivable Trade accounts receivable: Deprodeca S.A.C. 13,131 20,184 24,606 Gloria S.A. 2,267 15,472 1,852 Tableros Peruanos S.A. 1,305 967 554 Trupal S.A. 1,043 10,790 1,122 Other 81 95 11 17,827 47,508 28,145 Other accounts receivable: Deprodeca S.A.C. 195 - 13 Gloria S.A. 163 4 4 Quequeña S.A. 332 332 332 Tableros Peruanos S.A. 825 - - Other 1,054 2,140 1,645 2,569 2,476 1,994 Total current accounts receivable 20,396 49,984 30,139 Non- current accounts payable Other accounts payable: Deprodeca S.A.C. 10 27,687 27,691 Total non-current accounts payable 10 27,687 27,691

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At 31 December At 1 January 2011 2010 2010 S/.000 S/.000 S/.000 Current accounts payable Trade accounts payable: Deprodeca S.A.C. 2,110 827 304 Gloria S.A 2,252 991 1,350 Industrias Cachimayo S.A.C. - 57 2,079 Racionalización Empresarial S.A. 3,107 3,875 6,875 Yura S.A. 1,311 1,231 593 Trupal S.A. 650 1,011 144 Suiza Fruit Corporation 785 - - Other 129 434 7 10,344 8,426 11,352 Other accounts payable: Lakebar Holding S.A. 25,492 25,492 25,492 Deprodeca S.A.C. 6,718 22,205 17,892 Gloria S.A. 111 424 760 Jose Rodriguez Banda S.A. 308 316 322 Clarcrest Investments S.A. 44,441 46,255 29,660 Other 330 99 27 77,400 94,791 74,153 Total current accounts payable 87,744 103,217 85,505 a) Major inter-company transactions were as follows: 2011 2010 S/.000 S/.000 Sales of goods 252,607 235,973 Sale of services 6,702 9,075 Purchase of goods 51,918 25,861 Purchase of services 11,108 14,512 Interest on loans received 713 2,479 Interest on loans granted 182 136 Loans granted 45,698 2,409 Loans received 1,094 53,228 b) Long-term accounts receivable and payable - Empresa Agraria Chiquitoy S.A. has been submitted to a procedure before the relevant Peruvian consumer protection agency (Procedimiento Concursal Ordinario ante el Instituto Nacional de Defensa de la Competencia y de la Protección de la Propiedad Intelectual) INDECOPI. Empresa Agraria Chiquitoy S.A. granted a first and preferential lien in favor of Cartavio S.A.A. for up to US$4 million on a total of 280,000 tons of sugar cane. The said lien has been registered with the Peruvian public registry office in the name of Cartavio S.A.A. During 2010, Cartavio S.A. did not acquire new debt (S/.1.6 million in 2009). These loan debts bear an annual interest rate of 4% per year for first order debts and 1% for fifth order debts. During 2011 and 2010, no financial income has been recorded for the application of the above-mentioned interest rate since they will be recognized to the extent that they are actually collected. Management estimates that the recovery of the account receivable is feasible, considering that it has been classified in the third category; additionally, the restructuring of this entity has been approved in which a flow of payment has been determined in favor of Cartavio S.A.A., which will include interest and will be paid in approximately 14 years.

F-54

The balance of the account payable to Deprodeca S.A.C. does not have specific guarantees and bears an annual interest rate of 6%. The balance payable to Lakebar Holding S.A. corresponds to a loan for the purchase of shares of Casa Grande S.A.A.; this balance has no definite due date, does not bear interest and has no guarantees. The balance payable Clarcrest Investments S.A.corresponds mainly to a loan for the purchase of shares of Cartavio S.A.A. and Agroindustrias San Jacinto S.A.A.; this balance has no definite due date, does not bear interest and has no guarantees. c) Commitments The Group has provided guarantees in favor of financial institutions at 31 December 2011 and 2010 and at January 1 2010. d) Key personnel remuneration Key personnel remuneration includes managerial services and management personnel. Key management personnel and managerial services amount to S/.10.7 million in 2011 (S/.0.8 million in 2010). The Group does not provide long-term benefits to its key management personnel. The fair value of accounts with related parties is as follows: At December 31, At January 1, 2011 2010 2010 S/.000 S/.000 S/.000 Trade accounts receivable to related parties 17,827 47,510 29,997 Other accounts receivable to related parties 2,569 2,476 1,994 Long-term accounts receivable 10,759 22,145 23,388 Trade accounts payable to related parties 12,721 22,207 15, 967 Current accounts payable to related parties 52,066 69,683 48,840 Non-current accounts payable to related parties 25,502 53,179 53,183 The fair value of non-current accounts payable to related parties was determined based on the forecasted and discounted cash flows at a rate of 6.2% (4.54% in 2010 and 6.8% at 1 January 2010) which represents a market rate for similar transactions.

29 EVENTS AFTER THE BALANCE SHEET DATE

In May 2012, the Group, through a new subsidiary Azucarera Olmos S.A. created in the same month, entered into a purchase agreement for the acquisition of 11.100 acres of land of the Olmos Irrigation Project for an amount of US$ 8.3 million and the right to use irrigation civil works for US$ 41.5 million. In accordance with this agreement, the ownership of the land will be transferred on the date that the Group will make the first payment. As of this date, the Group has not made any payments. Future payments related to the acquisition of land have been guaranteed to the seller through a warranty note of US$49.8 millions issued by a local bank on behalf of the Group.

30 FIRST –TIME ADOPTION OF IFRS

The Peruvian Superintendencia del Mercado de Valores (SMV, formerly CONASEV) issued on October 14, 2010 Resolution No.102-2010-EF/94.01.1, by means of which all entities under its oversight are required to adopt IFRS issued by IASB and effective for periods ending 31 December 2011. In compliance with this regulation, the Group has adopted IFRS for the first time in the preparation of its general purpose financial statements. These are the Group’s first consolidated financial statements prepared in accordance with IFRS. Until 2010, the Group prepared its consolidated financial statements in accordance with Peruvian GAAP. The Group has prepared financial statements under the IFRS applicable for the year ended 31 December 2011, together with the comparative information at 31 December 2010, as described in the respective accounting policies.

F-55

In preparing its opening IFRS statement of financial position at 1 January 2010, the Group’s transition date, the Group has adjusted the amounts reported previously in financial statements prepared under Peruvian GAAP, including the statement of financial position prepared at the transition date and its financial statements for the year ended 31 December 2010 previously released and distributed. 30.1 Optional exemptions and mandatory exceptions to the retroactive application of IFRS: IFRS 1, “First-time Adoption of International Financial Reporting Standards”, offers the entity adopting IFRS for the first time to apply certain optional and mandatory exclusions when applying retrospectively certain standards at the transition date. Optional exemptions - The following are the optional exemptions applied by the Group: a) Exemption for business combinations -

IFRS 1 provides the option to apply IFRS 3, ‘Business combinations’, prospectively from the transition date or from a specific date prior to the transition date. This provides relief from full retrospective application that would require restatement of all business combinations prior to the transition date. The Group elected to apply IFRS 3 prospectively to business combinations occurring after its transition date. Business combinations occurring prior to the transition date have not been restated.

b) Fair value as an assumed cost of property, plant and equipment The value of certain items of property, plant and equipment corresponds (deemed cost) fair value at the transition date (1 January 2010), which was determined by independent appraisers using the methodology of the replacement cost of a similar new item. As a result of this process, the Group increased the value of these items by S/.88.2 million, and it reviewed their remaining useful lives. The depreciation for 2010 increased by S/.8.8 million as a result of these adjustments, deemed costs and reviewed useful lives, which were recognized with a charge to the cost of sales. The net adjustment to the statement of financial position at 31 December 2010 was S/.79.4 million. Mandatory exception - The only mandatory exception applied by the Group is related to accounting estimates. In accordance with such exception, the accounting estimates applied in preparing the financial statements under IFRS at 1 January and at 31 December 2010, are consistent with those considered at the preparation date of the financial statements under Peruvian GAAP (after carrying out adjustment to reflect any difference with accounting policies). 30.2 Reconciliation between Peruvian GAAP and IFRS IFRS 1 requires that an entity reconciles the balances of its equity, comprehensive income and cash flows of prior periods. The Group’s first-time adoption of IFRS did not have an impact on the total operating cash flows, investments and financing. The tables below show the reconciliations performed between Peruvian GAAP and IFRS: - Statement of comprehensive income for the years ended December 31, 2010. - Equity as of 1 January and 31 December 2010.

F-56

30.2.1 Reconciliation of statement of comprehensive income For the year ended 31 December 2010: IFRS at Peruvian Reclassi 31 December Note GAAP Adjustments fications (*) 2010 S/.000 S/.000 S/.000 S/.000 Sales of product 921,611) 13,907) 2,336) 937,854) Cost of product sold ( 443,878) ( 13,019) ( 41,570) ( 498,467) Gross profit 477,733) 888) ( 39,234) 439,387) Initial recognition and change in fair value of biological assets (30.4.d) 77,612) 100,240) ( - ) 177,852) Profit before operating expenses 555,345) 101,128) ( 39,234) 617,239) Operating expenses: Selling expenses ( 18,446) - ( 117) ( 18,563) Administrative expenses ( 40,778) 4) ( 2,150) ( 42,924)) Other operating expenses, net ( 5,063) ( 4,343) ( 10,217) ( 19,623) Operating profit 491,058) 96,789) ( 51,718) 536,129) Finance income 1,621) - - 1,621) Finance cost ( 45,496) - 108) ( 45,388) Exchange difference 6,063) ( - ) ( 5,033) 11,096) Financial results, net ( 37,812) - ) ( 5,141) ( 32,671) Profit before income tax 453,246) 96,789) ( 46,577) 503,458) Income tax expense ( 105,975) ( 7,431) ) 37,637) ( 75,769) Profit for the year 347,271) 89,358) ( 8,940) 427,689) (*) Includes mainly adjustment for workers’ profit sharing for S/.7.3 million and deferred tax for

S/.14.7 million and reclassification of workers’ profit sharing for S/.37.6 million. 30.2.2 Reconciliation of equity At 31 December At 1 January Note 2010 2010 S/.000 S/.000 Equity under Peruvian GAAP 1,527,579) 1,200,758) Effect on retained earnings of the adjustment in: Deferred income tax (30.4.a) ( 150,040) ( 150,040) Worker´s profit sharing (30.4.b) 107,269) 101,821) Property, plant and equipment (30.4.c) 79,381) 88,205) Biological assets (30.4.d) - ( 100,238) Impact of income tax of IFRS adjustments (30.4.e) ( 12,433) ( 1,353) Other ( 11,688) ( 17,168) Total IFRS adjustments 12,489) ( 76,067) Equity under IFRS 1,540,068) 1,124,691) 30.2.3 Reconciliation of Statement of cash flows IFRS transition has had a impact of S/.75.6 millions on the reconciliation of the operating activities stated in the statement of cash flows, relating to the lower depreciation determined as a result of determining depreciation rates based on useful lives; nevertheless, no impact was detected on the cash balances and total balances of operating, financing and investing activities.

F-57

30.4 Notes to the reconciliation of the statement of financial position and statement of comprehensive income at 1 January 2010 and at 31 December 2010 a) Deferred income tax, change in rate

Correspond to the effect of the deferred tax on temporary differences reversing after the tax holiday period for Peruvian entities (note 6). b) Worker´s profit sharing

Under Peruvian GAAP, workers profit sharing was recognized following accounting criteria under IAS 12 “Income Tax” the effect of temporary differences between assets and liability balances in the financial statements and its tax value. Under IAS 19 “Benefits to employees” workers profit sharing related to services are recognized in the period that services are rendered. Due to workers profit sharing are expenses for income tax purposes, and the deferred portion was calculated at rate of 23.5% and not at rate of 15%. Adjustments to eliminate the deferred workers participation portion and to correct the amount of deferred income tax at 1 January 2010 amounts to S/.102.3 million and S/.108.9 million at 31 December 2010. The effect in comprehensive income of 2010 amounts to S/.6.6 millions.

c) Property, plant and equipment - Under Peruvian GAAP, fixed asset items were depreciated using the useful lives established in the income tax law applicable to these assets. Depreciation of fixed asset items under IFRS is calculated using the straight-line method to allocate their cost less their residual value over their estimated useful lives. At the IFRS transition date, the Group recognized an increase in the account of properties, plant and equipment of S/.88.2 million net of its accumulated depreciation for the reconstruction of the historical cost of these assets. This adjustment was recognized against retained earnings. The effect in depreciation of 2010 resulted in an adjustment of S/.8.8 million, which was charged to the cost of sales. d) Biological asset - At IFRS transition date, the Group includes the cost of land leases based on IAS 41 requirements. e) Impact on income tax of IFRS adjustments -

IFRS adjustments have given rise to temporary differences that were recognized as deferred income tax amounting to S/.148.7 million at 1 January 2010 and S/.162.5 million at 31 December 2010.

CORPORACION AZUCARERA DEL PERU S.A. UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS AS OF 31 MARCH 2012 AND FOR THE THREE-MONTH PERIODS ENDED 31 MARCH 2012 AND 2011

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F-59


CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME

For the three-month period ended31 March

Note 2012 2011S/.000 S/.000(Unaudited) (Unaudited)

Sales of products 377,185 309,162 Cost of products (228,157) (145,824)Gross profit 149,028 163,338 Initial recognition and change in fair value of biological assets 8 175 31,786 Profit before operating expenses 149,203 195,124 Selling expenses (8,606) (4,710)Administrative expenses (25,936) (8,762)Other operating expenses, net (1,924) (1,364)Profit from operations before financing and taxation 112,737 180,288 Financial income 506 787 Financial expenses (17,294) (7,591)Exchange difference, net 5,966 268 Income attributable to associate 1,750 -Profit before income tax 103,665 173,752 Income tax expense 14 (16,277) (25,956)Profit for the three month period 87,388 147,796 Other comprehensive income: - Exchange differences on translating foreign operations, net of deferred income tax (5,155) -- Fair value changes in cash flow hegde, netTotal comprehensive income for the year (219) (1,285)

82,014 146,511 Attributable to: Equity holders of the parent 54,983 96,859 Non-controlling interest 27,031 49,652

82,014 146,511

Earnings per shareBasic and diluted earnings per share 0.192 0.337

The accompanying notes on pages 62 to 72 are part of condensed consolidated interim financial statements.

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F-60

F-61


CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS

For the three-month period ended31 March

Note 2012 2011S/.000 S/.000(Unaudited) (Unaudited)

CASH FLOW FROM OPERATING ACTIVITIESCash generated from operations 16 150,559 119,117Income tax paid (25,699) (28,156)Net cash generated from operating activities 124,860 90,961

CASH FLOW FROM INVESTING ACTIVITIESPurchase of property, plant and equipment 6 (44,391) (35,857)Purchase of intangible assets 7 (667) -Loans granted to related parties (10,456) (25,785)Loans repayments received from related parties 19,733 -Others 1 (118)Net cash used in investing activities (35,780) (61,760)

CASH FLOW FROM FINANCING ACTIVITIESProceeds from borrowings 44,810 22,897Repayments of borrowings (53,196) (34,557)Interests paid (3,171) (5,742)Net cash used in financing activities (11,557) (17,402)

Net increase in cash and cash equivalents 77,523 11,799Cash and cash equivalents at beginning of period 114,277 70,912Cash and cash equivalents at the end of period 191,800 82,711

The accompanying notes on pages 62 to 72 are part of condensed consolidated interim financial statements.

F-62

CORPORACION AZUCARERA DEL PERU S.A. NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS AS OF 31 MARCH 2012 AND FOR THE THREE-MONTH PERIODS ENDED 31 MARCH 2012 AND 2011

1 GENERAL INFORMATION Corporación Azucarera del Perú S.A. (hereinafter indistinctly the “Company” or “Coazucar”) is a holding company primarily engaged, through its operating subsidiaries, in sugarcane agro-industrial activities (production of sugar and ethanol). These activities are carried out through operations in Perú, Ecuador and Argentina. The Company and its operating subsidiaries are collectively referred to hereinafter as the “Group”. The Company is the Group’s ultimate parent company and is an entity incorporated and domiciled in Peru. The address of its registered office is Avenida República de Panamá 2461, La Victoria - Lima, Peru. The issuance of these condensed consolidated interim financial statements was approved by the Management on 2 July 2012.

2 BASIS OF PREPARATION The information presented in the accompanying interim three-month condensed consolidated financial statements is unaudited and in management’s opinion reflect all adjustments necessary to present fairly the financial position of the Group as of 31 March 2012, its results of operations and its cash flows for the three-month period ended 31 March 2012 and 2011. All such adjustments are of a normal recurring nature. In preparing the accompanying condensed consolidated interim financial statements, management has made certain estimates and assumptions that affect the reported amounts in the financial statements. Actual results may differ from those estimates. The results for interim periods are not necessarily indicative of annual results. These condensed consolidated interim financial statements follow the same accounting policies and methods of their application as the Group's audited annual financial statements as of 31 December 2011. Accordingly, these condensed consolidated interim financial statements should be read jointly with the audited financial statements of the Group as of such date.

These condensed consolidated interim financial information as of 31 March 2012 and for the three-month periods ended 31 March 2012 and 2011 have been prepared in accordance with IAS 34, “Interim financial reporting”. The annual financial statements for the year ended 31 December 2011 have been prepared in accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and the Interpretations of the International Financial Reporting Interpretations Committee (IFRIC). These condensed consolidated interim financial statements are presented in thousands of Nuevos Soles, the local currency in Peru.

A complete list of standards, amendments and interpretations to existing standards published but not yet effective for the Group is disclosed in note 2.1 to the annual financial statements. None of those standards became effective for the Group during the three-month period ended 31 March 2012. During the three-month period ended 31 March 2012, the IASB did not issued new standards that would have a material impact on the Group’s financial statements as they become effective.

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Seasonality of operations

The Group´s business activities are inherently seasonal. The sugarcane harvesting period varies by country. In Peru, the harvest period of sugar cane is done throughout the year, while in Ecuador and Argentina harvesting period begins in July and May, respectively. This creates fluctuations in sugarcane inventory, usually peaking in December to cover sales between crop harvests. As a result of the above factors, there may be significant variations in the results of operations from one quarter to another, as planting activities may be concentrated in a specific quarter whereas harvesting activities may be concentrated in another quarter. In addition, quarterly results may vary as a result of the effects of fluctuations in the price of commodities, production yields and costs used in determining the fair value of biological assets on initial recognition and as of the reporting date.

3 FINANCIAL RISK MANAGEMENT

The Group continues to be exposed to the risks inherent to its financial instruments. These risk include: end product price risk, exchange rate risk, interest rate risk, liquidity risk and credit risk. A thorough explanation of the Group’s risks and its approach to their identification, assessment and mitigation is disclosed in note 3 to the annual financial statements. There have been no changes in the Group’s exposure and risk management principles and processes since 31 December 2011 (readers should refer to the annual financial statements for information).

4 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

The Group's critical accounting policies are also consistent with those disclosed in note 4 to the audited annual financial statements for the year ended 31 December 2011.

5 SEGMENT INFORMATION The Group operates in three reporting segments: Peru, Ecuador and Argentina. The measurement principles for the Group’s segment reporting structure are based on the IFRS principles adopted in the annual consolidated financial statements. Revenue generated and goods exchanged between segments are calculated on the basis of market prices. The following table presents information with respect to the Group’s reportable segments. Certain other activities of a holding function nature not allocable to the segments are disclosed in the column “Corporate”. Peru Ecuador Argentina Corporate Total S/.000 S/.000 S/.000 S/.000 S/.000 31 March 2012 (unaudited) Sales of products 291,107) 72,386) 13,692) - ) 377,185) Cost of products sold ( 170,276) ( 45,928) ( 11,953) ) - ) ( 228,157) Gross profit 120,831) 26,458) 1,739) ( -) 149,028) Initial recognition and change in fair value of biological assets ) 104) ( 1,418) ) 1,489) ) - ) 175) Profit before operating expenses 120,935) 25,040) 3,228) ) - 149,203) Selling expenses ( 7,072) ( 799) ( 735) ( - ( 8,606) Administrative expenses ( 8,699) ( 15,235) ( 1,709) ( 293) ( 25,936) Other operating expenses, net ( 2,044) ( 233) ( 10) ( 363) ( 1,924) Profit from operations before financing and taxation 103,120) 8,773) ) 774) ( 70) 112,737)

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Peru Ecuador Argentina Corporate Total S/.000 S/.000 S/.000 S/.000 S/.000 31 March 2012 (unaudited) Property, plant and equipment 2,025,028) 459,666) 200,609) 131,501 2,816,804) Biological assets ( 606,133) 55,241) 17,929) - 679,303) Investment in associates 832) - ) - ) 30,728 31,560) Goodwill 128,609) 63,177) 8,600) - 200,386) Inventories 135,283) 106,014) 19,664) 6,634 267,595) Total segment assets 2,895,885) 684,098) 246,802) 168,863 3,995,648) Borrowings 264,322) - ) 63,710) 215,212 543,244) Total segment liabilities 264,322) - ) 63,710) 215,212 543,244) 31 March 2011 (unaudited) Sales of products 309,162) ( - - 309,162) Cost of products sold ( 145,824) ( - - ( - ) ( 145,824) Gross profit 163,338) ( - - ( -) 163,338) Initial recognition and change in fair value of biological assets ) 31,786) ( - - ) - ) 31,786) Profit before operating expenses 195,124) ( - - ( - ) 195,124) Selling expenses ( 4,710) ( - - ( - ) ( 4,710) Administrative expenses ( 7,313) ( - - ( 1,449) ( 8,762) Other operating expenses, net ( 1,392) ( - - ) 28) ( 1,364) Profit from operations before financing and taxation 181,709) ( - - ( 1,421) 180,288) 31 December 2011 Property, plant and equipment 2,012,798) 471,804) 197,488) 123,504 2,805,594) Biological assets ( 595,625) 49,964) 11,593) - 657,182) Investment in associates 832) - ) - ) 28,979 29,811) Goodwill 128,609) 63,177) 8,600) - 200,386) Inventories 127,789) 142,455) 23,421) 6,730 300,395) Total segment assets 2,865,653) 727,400) 241.102) 159,213 3,993,368) Borrowings 280,758) - ) 45,379) 225,493 551,630) Total segment liabilities 280,758) - ) 45,379) 225,493 551,630) Total segment assets are measured in a manner consistent with that of the consolidated financial statements. These assets are allocated based on the operations of the segment and the physical location of the asset. Total segment liabilities are measured in a manner consistent with that of the consolidated financial statements. These liabilities are allocated based on the operations of the segment. The following table presents information with respect to the Peru segment consisting of 4 CGUs: Casa Grande, Cartavio, San Jacinto and Sintuco: Casa San Elimi- Grande Cartavio Jacinto Sintuco Corporate nation Total S/.000 S/.000 S/.000 S/.000 S/.000 S/.000 S/.000 31 March 2012 (unaudited) Sales of products 153,270) 95,749) 48,430) 4,760) 13,970) ( 25,072) 291,107) ) Cost of products sold ( 82,056) ( 70,331) ( 25,850) ( 1,596) ( 13,289) 22,846) ( 170,276) Gross profit 71,214) 25,418) 22,580) 3,164) 681) ( 2,226) 120,831) Initial recognition and change in fair value of biological assets 27,050) ( 5,582) ( 24,632) 3,268) ( - ( - ( ( 104) Profit before operating expenses 98,264) 19,836) ( 2,052) 6,432) 681) ( 2,226) 120,935) Selling expenses ( 3,596) ( 3,359) ( 27) - ( 90) ( 7,072) Administrative expenses ( 4,433) ( 3,427) ( 2,983) ( 172) - ( 2,316 ( 8,699) Other operating expenses, net ( 1,623) 194) ( 416) ( 14) ) - ) ( 185) ( 2,044) Profit from operations before financing and taxation 88,612) 13,244) ( 5,478) 6,246) ) 681) ( 185) 103,120)

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Casa San Elimi- Grande Cartavio Jacinto Sintuco nation Total S/.000 S/.000 S/.000 S/.000 S/.000 S/.000 31 March 2012 (unaudited) Property, plant and equipment 1,214,502 420,445 334,841 55,240 - 2,025,028 Biological assets ( 388,759 107,087 94,241 16,046 - 606,133 Investment in associates - 5,109 399 - ( 4,676) 832 Goodwill 128,609 - - - - 128,609 Inventories ( 73,324 48,871 ( 12,868 ( 220 ( - ) ( 135,283 Total segment assets 1,805,194 581,512 442,349 71,506 ( 4,676) 2,895,885 Borrowings ( 106,801 54,040 ( 103,481 ( - ( - ) ( 264,322 Total segment liabilities 106,801 54,040 103,481 - ( - ) 264,322 Casa San Elimi- Grande Cartavio Jacinto Sintuco Corporate nation Total S/.000 S/.000 S/.000 S/.000 S/.000 S/.000 S/.000 31 March 2011 (unaudited) Sales of products 175,678) 99,362) 42,243) 4,330) 9,896) ( 22,347) 309,162) Cost of products sold ( 70,361) ( 63,907) ( 20,974) ( 2,043) ( 7,553) 19,014) ( 145,824) Gross profit 105,317) 35,455) 21,269) 2,287) 2,343) ( 3,333) 163,338) Initial recognition and change in fair value of biological assets ( 11,079) 12,655) ( 27,924) ( 2,286) ( - ) - ) ( 31,786) Profit before operating expenses 94,238) 48,110) 49,193) 4,573) 2,343( ( 3,333) 195,124) Selling expenses ( 5,570) ( 1,890) ( 13) - ( 150) ( 2,913) ( 4,710) Administrative expenses ( 4,486) ( 3,048) ( 3,099) ( 90) - ( 3,410) ( 7,313) Other operating expenses, net ( 933) 1,867) ( 680) ( 47) ) - ) ( 3,053) ( 1,392) Profit from operations before financing and taxation 83,249) 45,039) ( 46,761) 4,530) 2,193) ( 63) 181,709) Casa San Elimi- Grande Cartavio Jacinto Sintuco nation Total S/.000 S/.000 S/.000 S/.000 S/.000 S/.000 31 December 2011 Property, plant and equipment 1,202,117) 421,238) 334,305) 55,138) ( - ) 2,012,798) Biological assets ( 355,773) ( 111,433) ( 116,097) ( 12,322) - ) ( 595,625) Investment in associates - ) 5,109) 399) - ) ( 4,676) 832) Goodwill 128,609) - ) - ) - ) ( - ) 128,609) Inventories ( 71,730) 44,704) ( 11,133) ( 222) ( - ) ( 127,789) Total segment assets 1,758,229) 582,484) 461,934) 67,682) ( 4,676) 2,865,653) Borrowings ( 119,141) 56,211) ( 105,406) ( - ) ( - ) ( 280,758) Total segment liabilities 119,141) 56,211) 105,406) - ) ( - ) 280,758)

6 PROPERTY, PLANT AND EQUIPMENT Total S/.000 (unaudited) Three-month period ended 31 March 2012 Opening net book amount as at 1 January 2012 2,805,594) Additions 44,391) Disposals ( 1,132) Transfers and adjustments ( 236) Exchange difference ( 5,981) Depreciation and amortization ( 25,832) Closing net book amount as at 31 March 2012 ) 2,816,804) Three-month period ended 31 March 2011 Opening net book amount as at 1 January 2011 2,025,253) Additions 35,856) Disposals ( 532) Transfers and adjustments 164) Depreciation and amortization ( 15,454) Closing net book amount as at 31 March 2011 ) 2,045,287)

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For the three-month period ended 31 March 2012 and 2011, the additions include capital expenditures of investment projects which development isin progress in Peru relating to: i) the acquisition of energy power generators for sugar plant, ii) freezing equipment, installation of sugar plant, mill expansion, improvements on centrifuge process, installation of irrigation equipment, mechanical harvester machine, construction of Garrapon Dam. As of 31 March 2012, property, plant and equipment include fixed assets acquired under finance leases for S/.6 million (S/.6.9 million as of 31 March 2011) net of their corresponding accumulated depreciation. The corresponding liabilities are secured with the same assets leased. As of 31 March 2012, assets recognized in the financial statements as property, plant and equipment are insured up to a value of US$95 million. Management believes that the amount insured is consistent with international practices in the industry and takes into account the nature of the assets in estimating the risk of eventual damages. Certain of the Group’s assets have been pledged as collateral to secure its borrowings and other payables. The net book value of pledged assets amounts to S/.293 million as of 31 March 2012 and S/.297 million as of 31 December 2011.

7 INTANGIBLE ASSETS Total S/.000 (unaudited) Three-month period ended 31 March 2012 Opening net book amount as at 1 January 2012 202,727) Additions 667) Exchange differences ( 25) Amortization ( 234) Closing net book amount as at 31 March 2012 ( 203,135) Three-month period ended 31 March 2011 Opening net book amount as at 1 January 2011 130,743) Amortization ( 195) Closing net book amount as at 31 March 2011 ) 130,548)

8 BIOLOGICAL ASSETS Changes in the Group´s biological assets during the three-month periods ended 31 March 2012 and 2011 were as follows: 31 March 31 March 2012 2011 S/.000 S/.000 (unaudited) (unaudited) Beginning of period 657,182) 377,820) Cost incurred during the period 90,217) 53,326) Decrease due to harvest ( 67,609) ( 54,309) Initial recognition and changes in fair value of biological assets (price and physical changes) 175) 31,786) Exchange difference ( 662) - ) End of period ( 679,303) ( 408,623)

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Biological assets as of 31 March 2012 and 31 December 2011 are presented in the statement of financial position as follows: 31 March 31 December 2012 2011 S/.000 S/.000 (unaudited) Non-current 430,069 378,978 Current 249,234 278,204 679,303 657,182

9 INVENTORIES This item comprises: At 31 March At 31 December 2012 2011 S/.000 S/.000 (unaudited) Raw materials 17,439 3,589 Products in process 26,149 6,541 Finished product 123,769 188,778 Packaging and casing 2,785 1,754 Other supplies (*) 97,453 99,733 267,595 300,395 (*) This account comprises spare parts, materials and supplies used in connection with the maintenance of the

sugar plants located in Perú, Ecuador and Argentina.

10 TRADE AND OTHER ACCOUNTS RECEIVABLE This item comprises: 31 March 31 December 2012 2011 S/.000 S/.000 (unaudited) Non-current Accounts receivable to related parties (note 15) 6,966 8,224 Current Trade accounts receivable 29,990 36,029 Trade accounts receivable from related parties (note 15) 12,117 17,827 Trade accounts receivable, net 42,107 53,856 Prepaid expenses 7,395 6,031 Value Added Tax (VAT) 27,351 21,057 Tax claims 7,806 8,152 Loans to third parties 12,586 10,665 Payments in advanced of the income tax 3,475 3,475 Other accounts receivable to related parties (note 15) 2,190 2,569 Miscellaneous accounts receivable 19,610 11,512 Total other accounts receivable 80,413 63,461 Total current accounts receivable 122,520 117,317 Total trade and other accounts receivable 129,486 125,541

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The fair values of current trade and other accounts receivable approximate their respective carrying amounts due to their short-term maturity. The fair values of non-current trade and other accounts receivable approximate their carrying amount, as the impact of their discount is not significant for the financial statements taken a whole. The carrying amounts of the Group’s trade and other accounts receivable are denominated in the following currencies (expressed in Nuevos Soles): At 31 March At 31 December 2012 2011 S/.000 S/.000 (unaudited) Currency Nuevos Soles 81,545 52,625 US Dollar 21,410 47,812 Argentine Peso 26,531 25,104 129,486 125,541 The Group recognizes an allowance for doubtful trade accounts receivable when there is objective evidence that the Group will not be able to collect all amounts due according to their original terms. Delinquency in payments is considered an indicator that the trade account receivable may be impaired. However, management considers all available evidence in determining when a receivable is impaired. Generally, trade accounts receivable, which are more than 180 days past due are fully provided for. However, certain accounts receivable which are more than 180 days overdue are not provided for, based on a case-by-case analysis of the credit quality of the account. Furthermore, accounts receivable, which are not more than 180 days overdue, may be provided for if specific analysis indicates their potential impairment. The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above.

11 BORROWINGS This item comprises: At 31 March At 31 December 2012 2011 S/.000 S/.000 (unaudited) Non-current Promissory notes 242,432 258,982 Finance leases 766 991 243,198 259,973 Current Overdraft 2,074 1,763 Promissory notes 296,267 287,783 Finance leases 1,705 2,111 300,046 291,657 Total 543,244 551,630 The maturity date of the promissory notes is between 2012 and 2017 and bear an annual interest rate which ranges between 6.90% and 7.75% for notes denominated in local currency (Nuevos Soles); between 1.50% and 15.00% for notes denominated in Argentine Pesos and between 2.42% and 14.00% for notes denominated in U.S. dollars (between 6.90% and 7.75% for those denominated in local currency (Nuevos Soles), between 1.50% and 17.70% for those denominated in Argentine Pesos and between 2.11% and 14.00% for those denominated in U.S. dollars at 31 December 2011).

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The maturity of the Group’s borrowings (excluding obligations under finance leases) and the Group’s exposure to fixed and variable interest rates is as follows:

At 31 March At 31 December 2012 2011 S/.000 S/.000 (unaudited) Fixed rates borrowings: Less than 1 year 233,644 215,802 Between 1 and 2 years 58,394 55,538 Between 2 and 5 years 134,378 145,815 More than 5 years 4,330 8,659 430,746 425,814 Variable rates borrowings: Less than 1 year 64,697 73,744 Between 1 and 2 years 12,324 12,377 Between 2 and 5 years 33,006 36,593 110,027 122,714 Total borrowings 540,773 548,528 The carrying amounts of the Group’s borrowings are denominated in the following currencies (expressed in Nuevos Soles): At 31 March At 31 December 2012 2011 S/.000 S/.000 (unaudited) Nuevos Soles 242,569 250,917 Argentine Peso 4,403 7,136 US Dollar 293,801 290,475 540,773 548,528

12 TRADE AND OTHER ACCOUNTS PAYABLE This item comprises: At 31 March At 31 December 2012 2011 S/.000 S/.000 (unaudited)

Non-current: Trade accounts payable to related parties (note 15) 10 10 Tax debt 55,614 52,339 Payroll and social security payable 9,128 12,594 Accounts payable from acquisition of subsidiaries 224,399 227,009 Others 10,755 4,095 Carried forward: 299,906 296,047

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At 31 March At 31 December 2012 2011 S/.000 S/.000 (unaudited) Brought forward: 299,906 296,047 Current Trade accounts payable 103,288 97,681 Trade accounts payable to related parties (note 15) 84,954 87,744 Payroll and social security payable 52,901 104,205 Accounts payable from acquisition of subsidiaries 18,486 18,486 Accounts payable from acquisition of associates 19,437 19,619 Income tax payable 19,793 38,521 Dividends payable 96,153 12,416 Advances received from customers 47,373 13,348 Interest payable 12,820 6,410 Other accounts payable 23,549 13,954 478,754 412,384 Total trade and other accounts payable 778,660 708,431

13 PROVISIONS AND OTHER LIABILITIES The Group is subject to several laws, regulations and business practices in the countries where it operates. In the ordinary course of business, the Group is subject to certain contingent liabilities with respect to existing or potential claims, lawsuits and other proceedings, including those involving labor and social security, and civil. The Group accrues liabilities when it is probable that future costs will be incurred and their amounts can be reasonably estimated. The Group bases its accruals on up to-date developments, estimates of the outcomes of the matters and legal counsel experience in contesting, litigating and settling matters. As the scope of the liabilities becomes better defined or more information is available, the Group may require to change its estimates of future costs, which could have a material effect on its results of operations and financial condition or liquidity. There have not been any material changes in the claimed amounts and in the status of current proceedings since 31 December 2011.

14 TAXATION Interim period income tax expense is accrued using the tax rate that would be applicable to expected total annual earnings, that is, the estimated average annual effective income tax rate applied to the pre-tax income of the interim period. Income tax expense is recognized based on management’s estimate of the weighted average annual income tax rate expected for the full financial year. The estimated average annual tax rate used for the three-month period ended 31 March 2012 is 15.73% (the estimated tax rate for the three-month period ended 31 March 2011 was 15.05%). The increase in the estimated income tax rate is mainly explained by the incidence of higher non-deductible expenses for income tax purposes.

15 RELATED PARTIES The balances of accounts receivable and payable with related parties were as follows:

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At 31 March At 31 December 2012 2011 S/.000 S/.000 (unaudited) Non-current accounts receivable Other accounts receivable: Empresa Agraria Chiquitoy SA 6,175 6,618 Tableros Peruanos S.A. 791 799 Other - 807 Total non-current accounts receivable 6,966 8,224 Current accounts receivable Trade accounts receivable: Deprodeca S.A.C. 6,336 13,131 Gloria S.A. 3,243 2,267 Tableros Peruanos S.A. 1,393 1,305 Trupal S.A. 1,105 1,043 Other 40 81 12,117 17,827 Other accounts receivable: Deprodeca S.A.C. 13 195 Gloria S.A 35 163 Quequeña S.A. 332 332 Tableros Peruanos S.A. 844 825 Trupal S.A. 108 151 Other 858 903 2,190 2,569 Total current accounts receivable 14,307 20,396 Non-current accounts payable Other accounts payable: Deprodeca S.A.C. 10 10 Total non-current accounts payable 10 10 Current accounts payable Trade accounts payable: Deprodeca S.A.C. 669 2,110 Gloria S.A 2,655 2,252 Racionalización Empresarial S.A. 1,393 3,107 Yura S.A. 1,330 1,311 Trupal S.A. 256 650 Suiza Fruit Corporation 1,365 785 Other 168 129 7,836 10,344 Other accounts payable: Lakebar Holding 25,492 25,492 Deprodeca S.A.C. 6,722 6,718 Gloria S.A 463 111 Jose Rodriguez Banda S.A 305 308 Clarcrest Investments S.A. 43,972 44,441 Other 164 330 77,118 77,400 Total current accounts payable 84,954 87,744

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At 31 March, major inter-company transactions were as follows: 2012 2011 S/.000 S/.000 (unaudited) (unaudited) Sales of goods 85,659 252,607 Sales of services 7,859 9,075 Purchase of goods 19,619 51,918 Purchase of services 5,795 11,108 Interest on loans received 1,297 713 Interest on loans granted 132 182 Loans granted 10,456 1,094 Loans received 19,733 45,698 The Group has granted guarantees in favor of financial institutions that at 31 March 2012 and 31 December 2011. Key personnel remuneration includes managerial services and management personnel. The remuneration of key management personnel and managerial services for the three–month period ended 31 March 2012 amounted to S/.3,882,390 (S/.3,943,760 for the same period of 2011). The Group does not provide long-term benefits to its key management personnel.

16 CASH FROM OPERATING ACTIVITIES 2012 2011 S/.000 S/.000 (unaudited) (unaudited) Profit before income tax 103,665( 173,752) Adjustments: - Depreciation (note 6) 25,832) 15,454) - Amortization (note 7) 234) 195) - Fair value of biological assets (note 8) ( 175) ( 31,787) - Fair value gains on derivative financial instruments ( 235) ( 519) - Loss from disposal of property, plant and equipment - ) 513) - Write-off of property, plant and equipment items 1,132) 5) - Share of profit from associates ( 1,750) - - Other provisions - 35) Net changes: - Biological asset ( 22,608) 835) - Inventories 32,800) ( 34,897) - Trade accounts and other receivables ( 13,222) ( 5,497) - Trade accounts and other payables ) 24,886) ) 1,028) Cash from operations 150,559) ) 119,117)

17 EVENTS AFTER THE BALANCE SHEET DATE

No significant events subsequent to 31 March 2012 have ocurred that should be reported, other than those reported in the anual financial statements as of 31 December 2011.

ISSUER

Corporación Azucarera del Perú S.A. Av. República de Panamá 2461

La Victoria, Lima 13 Peru

TRUSTEE, REGISTRAR, PAYING AGENT AND TRANSFER AGENT

Citibank, N.A. 388 Greenwich Street, 14th Floor

New York, NY 10013 USA

IRISH LISTING AGENT

Arthur Cox Listing Services Limited Earlsfort Centre Earlsfort Terrace Dublin 2, Ireland

LEGAL ADVISORS TO THE ISSUER AND THE GUARANTORS

As to United States Law Milbank, Tweed, Hadley & McCloy LLP

One Chase Manhattan Plaza New York, NY 10005

USA

As to Peruvian Law Rubio Leguía Normand Av. Dos de Mayo 1321

San Isidro, Lima 27 Peru

LEGAL ADVISORS TO THE INITIAL PURCHASERS

As to United States Law Shearman & Sterling LLP

599 Lexington Avenue New York, NY 10022

USA

As to Peruvian Law Miranda & Amado Abogados

Av. Larco 1301 Torre Parque Mar, Piso 20

Miraflores, Lima 18 Peru

INDEPENDENT AUDITORS

Dongo-Soria Gaveglio y Asociados Sociedad Civil de Responsabilidad Limitada Av. Santo Toribio 143, Piso 8

San Isidro, Lima 27 Peru

16JUL201201162235

6.375% Senior Notes due 2022Unconditionally and Irrevocably Guaranteed by

Certain of its Operating Subsidiaries

OFFERING MEMORANDUM

Joint Book-Running Managers

BofA Merrill Lynch CitigroupPeruvian Placement Agent

Citicorp Peru S.A. Sociedad Agente de Bolsa

July 26, 2012

Corporacion Azucarera del Per´u S.A. - smv.gob.pe - Final Offering... · Corporacion Azucarera del...

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