annual report / 2015 - ideal.com.mx · i+d (electronic toll payment system iave) the company has a...

ANNUAL REPORT / 2015

Evolvement 2013-2015

Income

EBITDA

EBITDA Margin

68.0%68.0%71.1%201520142013

10,831.2

2013

2014

2015

9,789.1

8,400.5

7,367.0

2013

2014

2015

6,659.1

5,972.4

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Portfolio Breakdown IDEAL 2015

201510,831.2

Roads 7,578.4

(70%)

Energy 718.9(6.6%)

Water 622.0 (5.7%)

Social Infrastructure953.9 (8.8%)

Multimodal Terminals148.2 (1.4%)

Services 809.8 (7.5%)

20149,789.1

20138,400.5

Roads 6,694.1(68.4%)

Energy 1,273.2 (13.0%)

Water 64.8 (0.7%)

Social Infrastructure611.6 (6.2%)

Multimodal Terminals 149.8 (1.5%)

Services 995.6 (10.2%)

Roads 6,124.4(72.9%)

Energy 1,253.2(14.9%)

Water 22.9 (0.3%)

Social Infraestructure

47.5(0.6%)

Multimodal Terminals 131.5(1.6%)

Services 821.0(9.8%)

Autopista Urbana Sur

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Mission

To be a company that stands

out through the excellent ser-

vices it provides to its Clients;

the high quality levels of the

different projects it undertakes;

which engages with its Part-

ners and Investors and which

meets the most stringent finan-

cial, operating, legal, social

and environmental policies,

strategies and standards.

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Shareholder Report 4

Management Curricula 7

Curricula of the Board 8

Corporate Structure 9

Project Portfolio 10

Company Overview 11

Relevant Events 15

Breakdown by Sector 16

Consolidated Financial Statements 21

Contents

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Shareholder Report

Economic Landscape 2015

The global economic environment continued growing moderate-

ly during 2015. World markets were affected by the falling prices of

crude oil and commodities, the strengthening of the US dollar and

the unease following the slowdown in Chinese growth.

The sharp fall in the price of crude oil affected those economies

closely linked to its export while benefiting net importing countries,

industry through energy costs, as well as consumers.

In Mexico, growth of the Gross Domestic Product (GDP) was 2.5%

boosted by trade and manufacturing which grew 4.5% and 2.9%, re-

spectively, and was negatively impacted by the fall in volume and

price of crude oil, as without considering this particular sector, the

economy would have grown around 3%. Increases in remittances of

5% in dollars and 25% in pesos, higher wages and low inflation were

all reflected in increased purchasing.

Inflation in Mexico was 2.13% throughout the year. Trade balance was

affected by the fall in the price of crude oil and resulted in a deficit

of 14,000 million Dollars. Given the continued volatility of the Mexican

peso against the dollar, the Central Bank decided to intervene in the

market with dollar auctions; during the year, international reserves

reduced by 24,000 million dollars.

Cuts in current expenditure announced for 2016, PEMEX’s financial

adjustment, crude oil hedging at 49 dollars per barrel, intervention of

the Central Bank in monetary policy and Banco de Mexico’s operat-

ing surplus generated by the revaluation of reserves in pesos, which

will be handed over to SHCP in April 2016, all strengthen the country

in the face of uncertainty and international volatility.

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In 2015 IDEAL continued making significant investments in the different infrastruc-

ture sectors which it currently manages and develops, investing in excess of $18,000

million pesos during the period. It is through this that it reinforces its main objective:

to develop infrastructure in the country for the benefit of society, increasing and

improving physical and human capital in Mexico and Latin America. In this way,

IDEAL’s total asset portfolio reached $97,562 million pesos which represents an in-

crease of 12.6% when compared to 2014.

IDEAL continues the process of development and growth of its asset portfolio, cur-

rently holding investments worth around $17,300 million, both for completing proj-

ects that are underway and for new infrastructure projects, for which it is continu-

ally seeking new investment opportunities that generate an improved and wider

infrastructure coverage and better quality services.

Toll Road SectorIDEAL has formed a portfolio in the toll road sector which is strategically spread, serv-

ing both local and long distance traffic in strategic regions, both in demographic

and economic terms as are Mexico City and the states of Mexico, Puebla, Hidalgo,

Tlaxcala, Oaxaca, Jalisco, Nayarit, Guerrero, Tamaulipas, Veracruz, Sinaloa, and

Baja California. The highway network managed by IDEAL is 1,573.4 kilometers long,

of which 1,030.1 kilometers were in operation at the close of 2015. The remainder

are under construction.

The highway stretches comprising this portfolio are in various operating stages, have

different traffic flows and are in areas of diverse economic contexts and climates,

therefore they are operated and maintained through specific actions and pro-

grams which take into account these different circumstances. It is worth mentioning

that during 2015 by means of a financing scheme, IDEAL is now participating in

three new toll roads: Toluca-Atlacomulco, Cardel-Poza Rica and Tuxpan-Tampico,

thereby increasing the portfolio 297 kilometers. Partial operation of 31 kilometers

commenced on the Mitla-Tehuantepec concession which extends 169.2 kilometers

and the Arco Norte toll road is now operating across four lanes over 16 additional

kilometers to the 52 that are being widened.

Main Activities of the Company

Current Projects Portfolio

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Water SectorIDEAL has two wastewater treatment plants (PTAR) which process previously-used water

to convert it into a resource that can be reused for agricultural irrigation among other

things. Their design and construction consider the development, operation, conservation

and maintenance of the plant and distribution channels as well as mitigation of environ-

mental impacts.

PTAR Saltillo has been operating since 2008 and treats 1.27 cubic meters of wastewater

per second while PTAR Atotonilco – which is the largest of its type in the world built in a

single phase – is currently undergoing tests, reporting at the close of 2015 a constant flow

of 5.5 cubic meters of wastewater per second and once it is fully operational it will have

a treatment capacity of 36.27 cubic meters of wastewater per second. The first 23m3/s

will be treated biologically and the remainder – primarily during the rainy season – will be

treated chemically.

Energy SectorThe Bajo de Mina and Baitún power plants contributed towards meeting Panama’s

energy demand, thanks to the installation and procurement of these two generators of

clean and cheap energy. They have a combined capacity of 143MW, which represents

an average annual output of 630 giga watts hour which equates to approximately 5%

of Panama’s total capacity. Both hydroelectric plants operate run of the river systems

which is one of the most environmentally-friendly way of generating energy.

Transport SectorNowadays, IDEAL has three multimodal transport terminals, which are interchange ar-

eas for different modes of transport and where subway lines, buses and taxi ranks and

other interconnectivity systems meet which are complemented with retail spaces, park-

ing facilities and services to provide safety and comfort to users. Through these multi-

modal terminals the Company seeks to service and meet the need for modern public

transport in Mexico. ETRAM Azteca Bicentenario and CETRAM El Rosario have been

operating since October 2009 and December 2012, respectively, with an approximate

flow of 400,000 passengers per day. The ETRAM Cuatro Caminos concession was award-

ed at the end of 2013 and construction is well under way with its operation expected to

start in January 2017. Once these multimodal terminals are in full operation, it is antici-

pated that they will cater for an average daily flow of 800,000 passengers.

I+D (Electronic Toll Payment System IAVE)The Company has a 50% stake in I+D, the operator of the electronic toll payment system.

IDEAL currently operates toll roads and parking facilities. During 2015, I+D reported a 25%

increase in the number of registers.

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Management Curricula

NamePost

Non-independent

Type of

MemberName

Post

Independent

Type of

Member

Marco Antonio Slim Domit Chairman Patrimonial David Ibarra MuñozAdvisory Board

MemberPatrimonial

Independent

Alfonso Salem Slim Vice-chairman Patrimonial José Kuri HarfushAdvisory Board

MemberPatrimonial

Independent

Carlos Slim HelúAdvisory Board

Member Patrimonial Fernando Solana MoralesAdvisory Board

MemberPatrimonial

Independent

Carlos M. Jarque UribeAdvisory Board

Member Non-independent Oscar Pandal GrafAdvisory Board

MemberPatrimonial

Independent

Daniel Díaz DíazAdvisory Board

Member Related Ernesto Vega VelascoAdvisory Board

Member Independent

Alejandro Aboumrad GonzálezAdvisory Board

Member Related

Patrick Slim DomitAdvisory Board

Member Patrimonial

José Shedid MerhyAdvisory Board

Member Patrimonial

Daniel Ruiz FernándezAdvisory Board

Member Non-independent

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MARCO ANTONIO SLIM DOMITChairman of the Board and CEO of:• Grupo Financiero Inbursa, S.A.B. de C.V. Member of the Board of: • Grupo Carso, S.A.B. de C.V.

ALFONSO SALEM SLIMChairman of the Board of:• Inmuebles Carso, S.A.B. de C.V. y subsidiariasVice-Chairman of the Board of:• Impulsora del Desarrollo y el Empleo en América Latina, S.A.B. de C.V.Member of the Board of:• Grupo Carso, S.A.B. de C.V.• Centro Histórico de la Ciudad de México, S.A. de C.V.• Grupo Gigante, S.A.B. de C.V.

CARLOS SLIM HELÚChairman of the Board of:• Minera Frisco, S.A.B. de C.V.Member of the Board of: • Inmuebles Carso, S.A.B. de C.V.• Grupo Sanborns, S.A.B. de C.V.

PATRICK SLIM DOMITMember of the Board of:• Minera Frisco, S.A.B. de C.V.• Grupo Sanborns, S.A.B. de C.V.Co–Chairman of the Board and Member of the Executive Committee of: • América Móvil, S.A.B. de C.V.Vice–Chairman:• Grupo Carso, S.A.B. de C.V.

ALEJANDRO ABOUMRAD GONZÁLEZMember of the Board of:• Inmuebles Carso, S.A.B. de C.V.• Minera Frisco, S.A.B. de C.V.

CARLOS MANUEL JARQUE URIBEMember of the Board of: • Minera Frisco, S.A.B. de C.V.

JOSÉ SHEDID MERHYMember of the Board of: • Inmuebles Carso, S.A.B. de C.V. • Minera Frisco, S.A.B. de C.V.

DANIEL DÍAZ DÍAZMember of the Board of:• Carso Infraestructura y Construcción, S.A. de C.V

Curricula of the Board

DANIEL RUÍZ FERNÁNDEZLife Member:• Colegio de Ingenieros Civiles de México, A.C.Special Projects Advisor for:• Ingeniería de Proyectos y Supervisión, S.A. de C.V.Member of the Board of:• Carso Infraestructura y Construcción, S.A. de C.V.

JOSÉ KURI HARFUSHMember of the Board of: • Grupo Financiero Inbursa, S.A.B. de C.V.• Grupo Carso, S.A.B. de C.V.• Minera Frisco, S.A.B. de C.V.• Grupo Sanborns, S.A.B. de C.V.• Teléfonos de México, S.A. de C.V.

DAVID IBARRA MUÑOZMember of the Board of: • Grupo Financiero Inbursa, S.A.B. de C.V.• América Móvil, S.A.B. de C.V.• Grupo Carso, S.A.B. de C.V.

ERNESTO VEGA VELASCOMember of the Board and of the Auditing and Corporate Practices Committee of:• América Móvil, S.A.B. de C.V.Member of the Board of: • Inmuebles Carso, S.A.B. de C.V.• Grupo Desc (incluye Kuo, S.A.B. de C.V. y Dine, S.A.B. de C.V.)Alternate Member of:• Industrias Peñoles, S.A.B. de C.V.

FERNANDO SOLANA MORALESMember of the Board of:• Analítica Consultores, S.A. de C.V.• Fundación Euroamérica en Madrid• Institute of the Americas (Universidad de California en San Diego)• Banco Santander, S.A.• Grupo Carso, S.A.B. de C.V.• Teléfonos de México, S.A. de C.V.• Industrias Peñoles, S.A.B. de C.V.

ÓSCAR PANDAL GRAFMember of the Board of several investment funds operated by:• Operadora Inbursa de Sociedades de Inversión, S.A. de C.V.Authorized Agent for:• Bosques de Cedral, S.A. de C.V.

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I+D

TOLL ROADS

ENERGY

WATER

MULTIMODAL TERMINALS

SOCIAL INFRASTRUCTURE

Infr

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Serv

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OPERATION

Scheme length Participation

Chamapa-La Venta 10.9 km 100%Toluca Northeastern Bypass 30.0 km 100%Tepic-Villa Unión 238.1 km 100%Tijuana-Tecate 29.8 km 100%Arco Norte 223.0 km 100%Autopista Urbana Sur 15.5 km 100%Pacífico Norte 241.5 km 100%Pacífico Sur 309.6 km 100%Toluca-Atlacomulco 62.0km 100%Mitla-Tehuantepec 169.2 km 40%Acapulco Macrotunnel* 8.5 km 70%Cardel-Poza Rica* 128.7 km 70%Tuxpan-Tampico* 106.6 km 70%

Scheme Output ParticipationBajo de Mina 56.8 MW 100%Baitún 85.9 MW 100%

Scheme Capacity ParticipationPTAR Saltillo 1.27 m3/s 100%PTAR Atotonilco 35 m3/s 51%

Scheme Capacity ParticipationCRS Morelos 2,528 inmates 100%Makobil 2,528 inmates 100%

Scheme m2 Built ParticipationETRAM Azteca 68,726 m² 69%CETRAM Rosario 41,125 m² 80%ETRAM Cuatro Caminos 222,577 m² 80%

Toll Roads 100%Water 100%Energy 100%Transport 100%Social Infrastructure 100%

I+D 50%

Corporate Structure

*IDEAL’s stake in these concessions is through a financing scheme.

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Project Portfolio

Concessions by Sector Start of Operations Expiry Tender/ Acquisition Participation Stage

Toll Roads Length (km) Vehicular Cap. (1)

Chamapa-La Venta 1992 Aug-52 Acquired 10.9 48,498 100% 100% in operation

Toluca Northeastern Bypass 2007 Dec-59 Acquired 30.0 19,483 100% 100% in operation

Tepic-Villa Unión 2007 Apr-35 Tender 238.1 7,751 100% 100% in operation

Tijuana-Tecate 1992 Dec-49 Acquired 29.8 8,779 100% 100% in operation

Arco Norte 2011 Dec-65 Tender 223.0 18,890 100% 100% in operation

Autopista Urbana Sur Dec-12 Dec-42 Tender 15.5 31,379 100% 100% in operation

Pacífico Norte Dec-39 Tender 241.5 100% Partial operation

Mazatlán-Culiacán Dic-09 Dec-39 181.5 8,455 100% 100% in operation

Culiacan Bypass Aug-12 Dec-39 22.0 3,421 100% 100% in operation

Mazatlan Bypass Dic-14 Dec-39 38.0 7,111 100% Partial operation

Pacífico Sur Nov-41 Tender 309.6 100% Partial operation

Guadalajara-Tepic Dec-11 Nov-41 168.6 11,562 100% 100% in operation

Guadalajara Bypass Mar-17 * Nov-41 111.0 7,289 100% Under construction

Tepic Bypass Mar-16 * Nov-41 30.0 3,334 100% Under construction

Toluca-Atlacomulco Apr-15 Mar-53 Finance 62.0 39,040 100% Partial operation

Mitla-Tehuantepec Jul-16 * May-30 Tender 169.2 1,390 40% Partial operation

Acapulco Macrotunnel(2) Jul-17 * Jun-43 Finance 8.5 9,616 70% Under construction

Cardel-Poza Rica(2) Nov-18 * Jul-44 Finance 128.7 5,004 70% Under construction

Tuxpan-Tampico (2) Jan-19 * Nov-44 Finance 106.6 5,948 70% Under construction

1,573.4 236,951

Energy Output

Bajo de Mina Oct-11 Mar-58 Acquired 56.8 MW 100% 100% in operation

Baitún Dec-12 Mar-58 Acquired 85.9 MW 100% 100% in operation

142.7 MW

Water Capacity

PTAR Atotonilco Testing stage Jan-35 Tender 35 m3 / Seg 51% Testing stage

PTAR Saltillo Apr-08 Dec-26 Acquired 1.27 m3 / Seg 100% 100% in operation

36.27 m3 / Seg

Social Infrastructure Capacity

CRS Morelos May-15 May-35 Acquired 2,528 women 100% 100% in operation

Makobil Dec-13 Dec-33 Acquired 2,528 men 100% 100% in operation

5,056 Inmates

Multimodal Terminals m3 Built

Terminal Azteca Nov-09 Aug-36 Tender 68,726 m² 69% 100% in operation

Terminal El Rosario Dec-12 Jul-39 Tender 41,125 m² 80% 100% in operation

Terminal Cuatro Caminos Jan-17* Aug-43 Tender 222,577 m² 80% Under construction

332,428 m2

Electronic Toll System Transactions

I + D(3) Jun-05 Jul-14 Acquired 218.4 millones 50% 100% in operation

(1) Vehicular capacity average flow in standard vehicles.(2) IDEAL’s stake in these concessions is through a financing scheme.(3) Expiry date for the CAPUFE contract to operate 100% of electronic toll payment system on federal highways* Start of operation estimated date.

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IDEAL was born in June 2005 when it split from Gru-

po Financiero Inbursa, as part of a strategy to se-

cure long-term contracts and concessions for de-

veloping infrastructure schemes in Latin America. It

is currently a leading company in the country and

one of the largest in Latin America.

Since its creation, IDEAL has managed to consol-

idate a profitable strategic asset portfolio across

various infrastructure sectors which foster social de-

velopment and economic growth through design-

ing, developing, financing and managing different

infrastructure projects, as well as holding the long-

term management, provision of services, mainte-

nance and operation of the concessions and proj-

ects it has a stake in. Within this strategy, it seeks

to outsource the construction of the schemes it has

been awarded, emphasizing that they must meet

world-class standards in order to obtain works of the

highest quality.

The asset portfolio that has been consolidated is a

consequence of continuous investment in key proj-

ects within strategic infrastructure sectors which are

therefore highly beneficial for the country’s and

Latin America’s development. It currently consists

of toll roads, penitentiary facilities, hydroelectric

plants, wastewater treatment plants, multimodal

terminals and electronic toll collection schemes.

At the close of 2015, the total asset portfolio was

valued at $97,562 million, representing a 12.6% in-

crease from the portfolio value at the end of 2014.

Across five different infrastructure sectors, IDEAL has

a stake in 22 infrastructure projects:

• 13 concessions for operating and managing toll

roads, over a total length of 1,573.4 kilometers.

• Two hydroelectric power plants, Bajo de Mina

and Baitún, which have a combined output of

143MW.

• Two wastewater treatment plants located in

Atotonilco, State of Hidalgo and Saltillo, with

treatment capacity of 36.27 cubic meters of

wastewater per second.

• Three multi-modal terminals with an average of

800 thousand passengers a day.

• Two penitentiary facilities: CRS Morelos and Ma-

kobil, situated in Chiapas, with capacity for up

to 5,056 inmates.

Road Sector

IDEAL is one of the main operators and managers of

toll roads in Mexico and this is currently the most im-

portant aspect of the company in terms of revenue,

with a portfolio of 13 concessions strategically situat-

ed throughout the country in order to connect areas

of significant population and economic density.

IDEAL currently operates 1,030.1 kilometers on ten

of the 13 concessions it holds. Approximately 206

thousand vehicles flow through them on a daily ba-

sis. Once all ongoing projects are completed, IDEAL

will manage the 1,573.4 kilometers over which it was

awarded exclusive rights to operate and collect tolls

for the use of the road.

Energy Sector

The Company has a stake in two hydroelectric proj-

ects on the Chiriquí Viejo river in Panama. These

plants generate clean and cheap energy and meet

5% of the total energy demand in Panama given their

143MW output.

Bajo de Mina came online on October 17 2011 and

Baitún on December 17 2012 with installed capacity of

56.8MW and 85.9MW, respectively. For the prevention

and mitigation of their environmental impact, both hy-

droelectric plants are run of the river which means that

the energy is generated using the flow of the river thus

avoiding flooding the area.

Company Overview11

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Schemes under Construction % IDEAL Part. Capacity Start of Operations

Mitla- Tehuantepec 40% 169.2 Km 2nd Semester 2017

Tepic Bypass 100% 30 Km March 2016

Guadalajara Bypass 100% 111 Km March 2017

Acapulco Macrotunnel 70% * 8.5 Km July 2017

Toluca-Atlacomulco 100% 62 Km December 2017

Cardel-Poza Rica 70% * 128.7 Km November 2018

Tuxpan-Tampico 70% * 106.6 Km January 2019

PTAR Atotonilco 51% 35 m3/seg Testing Stage

ETRAM Cuatro Caminos 80% 222,577 m² January 2017

*IDEAL’s stake in these concessions is through a financing scheme.

Water Sector

IDEAL is in charge of the development, construc-

tion and operation of two wastewater treatment

plants: PTAR Saltillo in the state of Coahuila and

PTAR Atotonilco in the state of Hidalgo. PTAR Saltil-

lo became operational in April 2008 and PTAR

Atotonilco – which is the largest of its kind to be

built in a single phase – is undergoing testing. Once

it is fully operational, it will be able to treat 35 cu-

bic meters of wastewater per second which rep-

resents approximately 60% of the total wastewater

generated in the Valle de México, as opposed to

the 8% currently treated.

Social Infrastructure

In 2013 the Company ventured into the development

of social rehabilitation infrastructure which consists of

construction and equipment of the facilities. In order

to provide the Integral Service for Penitentiary Capac-

ity, IDEAL acquired two social rehabilitation centers:

Makobil, located in the state of Chiapas which com-

menced operating at the end of 2013, and CRS Mo-

relos which started operating on May 21 2015. Both

penitentiary centers are currently over 50% occupied.

Transport Sector

To date, three multimodal terminals constitute IDEAL’s

portfolio. These are hubs where subway lines, bus termi-

nals and taxi ranks are connected and where providing

parking areas and commercial spaces are also provid-

ed. CETRAM Azteca Bicentenario which is located in the

municipality of Ecatepec in the State of Mexico, is the

first such enterprise of its kind in the country; it has been

operating for six years now. Similarly, it has CETRAM El

Rosario in Azcapotzalco in Mexico City, which has been

operating since December 2012.

The ETRAM Cuatro Caminos concession was awarded

in August 2013 by the State of Mexico government thor-

ough its Secretaría de Comunicaciones with the aim of

constructing, operating and maintaining the ETRAM for

a period of 30 years. It is currently being built and it is

envisaged it will be in operation in January 2017.

Service Sector

Since January 2005, IDEAL has held a 50% stake in

I+D, the company which manages the electronic toll

charging system. It should be noted that this electronic

charging system incorporates the best available tech-

nology and has diversified its services to currently in-

clude accesses to private parking facilities and urban

toll roads. The volume of registered transactions at the

close of 2015 was of 218 million – which represents an

increase of 23% from the previous year.

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Since its creation in June 2005, IDEAL has been able to consolidate a wide asset portfolio across all the sectors

in which it operates.

At the close of 2015 IDEAL posted total assets worth 97 billion 562 million pesos, of which 82.3% are operating

assets; of these, 93.7% are in the infrastructure sector, and 6.1% correspond to restricted cash. Operating assets

increased 11% with regards to the previous year.

PTA

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Nominal trillion pesos December 2015 2013 2014 2015

Toll Roads 33,621.0 36,317.5 40,159.8

Water 5,553.8 6,525.8 6,922.9

Energy 8,951.5 9,837.3 11,011.2

Multimodal Terminals 1,345.0 1,417.8 1,861.2

Social Infrastructure 12,394.6 13,445.0 15,312.8

Total Infrastructure 61,865.9 67,543.6 75,268.0

Total Services 12.5 - -

Cash and Equivalents 3,001.0 1,217.8 2,439.1

Restricted Cash 6,422.6 4,818.0 5,046.4

Other Assets 10,383.5 13,029.8 14,809.2

Total Asset 81,685.5 86,609.2 97,562.6

Operating Assets 68,301.0 72,361.6 80,314.4

% of Total Assets 83.6% 83.5% 82.3%

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Arco Norte

A further two lanes were opened along 16 kilometers of the 52 kilometer stretch that is being widened on the Atlacomulco junction with México–Querétaro toll road. Two fur-ther sections are envisaged to be opened during December 2016 along the entire span.

On June 30 the Autopista Arco Norte placed an emission of stock certificates for $6,500 million pesos with a 20 year term.

Mitla-Tehuantepec

On September 22, the Autovía Mitla-Tehuantepec saw the opening of 31 kilometers of the 169.2 overall length. It is estimated that it will commence total operation during the second semester of 2017.

Toluca-Atlacomulco

The company announced its participation in the agreement to finance the modern-ization and rehabilitation of the Toluca–Atlacomulco toll road. This 62 kilometer long scheme seeks to enhance the flow of long distance traffic and provide safety to both it and local traffic and improve overall link performance including three junctions.

Tuxpan-Tampico

During 2015, the company signed an agreement for the partial financing of the Tuxpan–Tampico toll road, worth $780 million pesos. This scheme is a federal con-cession for an approximate length of 106 kilometers which is expected to be opened in January 2019.

Cardel-Poza Rica

IDEAL signed an agreement for the partial financing of the Cardel-Poza Rica toll road, which is a 128 kilometer long federal concession worth $1,100 million pesos.

CRS Morelos

The Social Readaptation Center started operation on May 21st and had exceeded 50 percent occupation by the end of the year.

Star Médica

November 2015 saw the sale of the total permanent investments in Star Médica, S.A. de C.V. and its subsidiaries’ capital.

PTAR Atotonilco

The public tender awarded in December 2009 by CONAGUA to a consortium of predom-inantly Mexican companies led by IDEAL, which currently holds 51%, will have reached its operating stage on June 18th this year, as agreed and then commencing its testing phase. At the close of 2015 it maintains a constant flow if 5.5 cubic meters of wastewater recycled per second.

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Toll Roads

IDEAL has put together a broad portfolio in the toll road sector which is strategically devised to interconnect areas of high population density, and constitutes key highway links.

Concessions for works awarded to the Company are located in important areas of the country, as are Mexi-co City and the states of Mexico, Puebla, Hidalgo, Tlaxcala, Oaxaca, Jalisco, Nayarit, Guerrero, Tamaulipas, Sinaloa, Veracruz and Baja California and directly benefit important urban centers. At the close of 2015, IDEAL has a portfolio spanning 1,573.4 kilometers, of which 1,030.1 kilometers are in operation.

During 2015 the average daily vehicular flow on IDEAL toll roads showed an increase of 10.5% on the previous year. When considering the opening in 2015 of the toll roads, average daily flows of 205,760 vehicles, which rep-resents a 56,185 difference when compared with the 149,575 vehicles recorded in 2014.

Autopista Urbana SurAverage daily vehicular flow on the Autopista Urbana Sur during 2015 increased by 24.7% from the previous year, as a result of the overall increase in vehicular flow in the city, and driven mainly by the opening of the Luis Cabrera and Viaducto Tlalpan loops.

Tepic-Villa UniónAs a consequence of the economic growth in the Pacífico area, the toll road showed a 9.8% increase on the previous year, and is the toll road on the Pacífico corridor with the greatest annual growth.

Breakdown by Sector

Length (km) Flow* Variation

Highway Total In operationConcession

expiryRemaining term

(Years) 2015 2014 2014 - 2015

Chamapa-La Venta 10.9 10.9 Aug-52 36.6 48,498 45,220 7.3%

Toluca Northeastern Bypass 30.0 30.0 Dec-59 43.9 19,483 18,367 6.1%

Tepic-Villa Unión 238.1 238.1 Apr-35 19.3 7,751 7,060 9.8%

Tijuana-Tecate 29.8 29.8 Dec-49 33.9 8,779 9,112 -3.7%

Arco Norte 223.0 223.0 Dec-65 50.0 18,890 17,589 7.4%

Autopista Urbana Sur 15.5 11.4 Dec-42 26.9 31,379 25,162 24.7%

Pacífico Norte 241.5 234.5 Dec-39 23.9 18,987 16,054 18.3%

Mazatlán-Culiacán 181.5 181.5 Dec-39 23.9 8,455 7,831 8.0%

Culiacán Bypass 22.0 22.0 Dec-39 23.9 3,421 2,869 19.2%

Mazatlán Bypass 38.0 31.0 Dec-39 23.9 7,111 5,354 32.8%

Pacífico Sur 309.6 168.6 Nov-41 25.9 11,562 11,011 5.0%

Guadalajara-Tepic 168.6 168.6 Nov-41 25.9 11,562 11,011 5.0%

Guadalajara Bypass 111.0 - Nov-41 25.9 - - -

Tepic Bypass 30.0 - Nov-41 25.9 - - -

Toluca-Atlacomulco 62.0 53.0 Mar-53 37.2 39,040 - -

Mitla-Tehuantepec 169.2 30.8 May-30 14.3 1,390 - -

Acapulco Macrotunnel 8.5 - Jun-43 27.4 - - -

Cardel-Poza Rica 128.7 - Jul-44 28.5 - - -

Tuxpan-Tampico 106.6 - Nov-44 28.9 - - -

* Flow is expressed as the average car equivalent traveling the length of road in kilometers in operation daily.

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Chamapa-La Venta:This presented a 7.3% increase in 2015 over 2014 as a result of the sustained recovery of traffic flows following the decrease recorded during 2013, boosted particularly by the increase in vehicular flows along the Interlo-mas – Huixilucan section given the roadworks on the alternate Barrancas de Hueyetlaco route.

Arco NorteThis recorded growth of 7.4% due to factors such as the economic development of the region and its strategic location on the country’s road network.

Energy

The Bajo de Mina and Baitún hydroelectric power plants located in Panama provided a significant contribu-tion towards meeting the country’s energy requirements from starting operating in 2011 and 2012, respectively, through their objective of supplying clean and cheap energy. Together they have a total output of 143MW, which represents an average annual electricity generation of 630GW per hour, which equates to approximately 5% of Panama’s total installed capacity and replaces 5.5% of the country’s total generation with clean electricity meeting the demand of 120,000 inhabitants. Environmentally-friendly, both hydroelectric power plants are run of the river which means that the energy is generated from the volume of water flowing through the river, without the need for flooding.

In terms of operating results, the fall in the spot price of the electricity market in Panama is of note. This is due mainly to two factors: (i) low crude oil prices that determine the marginal unit market price and (ii) the hydrolog-ical phenomenon known as “El Niño”, which causes demand to be displaced within the economy.

Bajo de MinaThis hydroelectric plant has an installed output capacity of 56.8MW; the hydroelectric plant came online on October 17 2011.

BaitúnThe second hydroelectric plant in the company’s portfolio came online on December 17 2012 and has an in-stalled output capacity of 85.9MW.

Water

PTAR SaltilloIDEAL Saneamiento, a company subsidiary, holds the rights and obligations derived from a contract with the Mu-nicipality of Saltillo in Coahuila to build and operate over a 20-year term a scheme that consists of 11.2 kilometers of wastewater collectors, an 8.2 kilometer-long distribution channel and two wastewater treatment plants with a 1.27 cubic meter per second wastewater treatment capacity. Income from the operation of this scheme is generated from the monthly payments made by the Municipality of Saltillo (as adjusted by the INPC, consumer price index) for investment recovery and project costs.

PTAR Saltillo has been in operation since April 2008.

PTAR AtotonilcoIn December 2009 following an international invitation to tender, CONAGUA awarded a build and operate concession to a consortium of mainly Mexican firms led by Promotora IDEAL with a 51% stake, for PTAR Atotonil-co de Tula, in the state of Hidalgo. In January 2010, Aguas Tratadas del Valle de México (ATVM), created spe-cifically by the consortium for this purpose, and CONAGUA entered into the PPS Atotonilco agreement with a 25-year term. Under the terms of the agreement, Aguas Tratadas is responsible for the design, construction, electromechanical fitting and testing, as well as the operation and maintenance of the wastewater treatment plant, including energy cogeneration and waste management and disposal of biosolid residues produced. PTAR Atotonilco is the largest plant of its type in the world to be built in a single phase. Its treatment capacity will be 35 cubic meters of wastewater per second, of which 23m3/s correspond to a conventional biological treatment process (TPC) and 12m3/s correspond to a chemical treatment process during the rainy season. The plant will treat close to 60% of the wastewater generated in Mexico

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City and its metropolitan area – of which only 8% is treated at present. Total investment for this scheme is $13,000 million pesos, 49% of which will be provided by FONADIN; the remainder of the investment comes from the consortium’s risk capital as well as from financing raised through BANOBRAS. Income generated through this scheme is derived from monthly payments made by CONAGUA, as adjusted by the INPC.

The total area covered by the PTAR is equivalent to 160 hectares, 60 of which will be used by the treatment works and 100 for disposal of residues. These dimensions are comparable to 224 soccer fields such as the Esta-dio Azteca. The volume of water treated equates to 35 1,000 liter water tanks every second which is enough to fill one and a half Olympic-size swimming pools in the same amount of time.

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Terminal Azteca BicentenarioOn August 4 2006 the State of Mexico, through its Secretaría de Comunicaciones del Estado de México (SCEM) awarded COMURSA, in which IDEAL has a 69.2% stake, a 30-year concession (commencing June 2007) to refur-bish, operate and maintain ETRAM Azteca Bicentenario.

Terminal Azteca, located at the Terminal Ciudad Azteca on the Línea B of the subway, has platforms for metro-bus, microbuses and combis as well as a hospital and an area for retail spaces.

Said Terminal currently caters for 200,000 passengers per day, which represents over 73 million passengers a year; this is greater than at Mexico City’s International Airport. 95% of the retail / commercial spaces are currently oc-cupied. This scheme is designed to ease urban traffic through efficient distribution of passengers between the subway station and the adjacent public bus stations while improving urban regeneration in the area.

Furthermore, the station comprises:

• 27 public transport lines with two-way flows. These are 25 transport concessions and 2 Mexibus (normal and express).

• Eastbound flow of 2,165 trips per day.• Westbound flow of 4,154 trips per day.• Mexibus flow of 700 daily trips.

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Scheme benefits:

• Improve road and pedestrian layout allowing users to access collective transport after having used the subway or vice versa.

• Connectivity between the subway and the various collective transport systems available.• Offer a wider range of public services.• Increase safety and wellbeing of both users and the wider area with a view to making this place more secure.• Complement the overall urban development in the area.

Terminal El RosarioOn July 2nd 2009 the Gobierno del Distrito Federal, through the Oficialía Mayor del Distrito Federal, awarded a 30-year concession to Calidad de Vida, Progreso y Desarrollo para la Ciudad de México, S.A. de C.V., which in turn contributed its rights and obligations to a trust founded by Desarrolladora Mexicana (a subsidiary where IDEAL holds an 80% stake). The concession is for building, operating, running and managing CETRAM El Rosario, in Az-capotzalco, Distrito Federal, which is one of the most densely populated areas within Mexico City. This transport terminal, which opened in December 2012, has an average daily flow of 200,000 passengers to whom conve-nient access to the subway, public buses, taxis and a commercial area with 79 retail premises is offered. Income from CETRAM El Rosario is primarily from parking and public toilet fees as well as from commercial activities such as rental of premises to a range of services and businesses. At the close of 2015 the commercial area for rent within CETRAM El Rosario has a 92% occupancy rate.

Terminal Cuatro CaminosOn August 19th 2013 the tender for modernizing the Estación de Transferencia Cuatro Caminos was decided. This comprises, among others, the construction, rehabilitation, operation, maintenance and management of the station, public transport, parking facilities, advertising spaces and commercial premises over 30 years, as stipulat-ed by the Secretaría de Comunicaciones del Estado de México. The consortium led by IDEAL was awarded the contract. This terminal is located in Naucalpan, Estado de México, and will see daily average flows of 400,000 passengers.

Currently, the terminal at Cuatro Caminos serves the Línea 2 of the subway, which has the highest passenger flows with an average of 792 thousand people using it daily, as well as long-distance travel. Construction began in early 2014 and it is expected to start operating in January 2017.

Social Infrastructure

The Secretaría de Seguridad Pública, through its Órgano Administrativo Prevención y Readaptación Social (PYRS) awarded the Contrato de Prestación de Servicios (CPS) to two economic entities in December 2010: Makobil and CRS Morelos. This contract is for infrastructure construction, installation of equipment, undertaking of pre-commencement activities and provision of integral services to these Centros Penitenciarios Federales (Federal Penitentiary Centers). In 2013 IDEAL acquired 100% stake in both projects.

MakobilThis center has capacity for 2,528 inmates and is located in the Villa Comalitlán municipality in the state of Chi-apas. The contract stipulates a 20 year term commencing at the start of operations.

In April 2013 negotiations were undertaken through which IDEAL acquired 100% of Makobil and in 2014 it began receiving revenue from it.

This project commenced operations formally on December 1st 2013. A monthly payment, as adjusted by the Índice Nacional de Precios al Consumidor (INPC) (National Consumer Price Index) during its duration, was agreed.

CRS MorelosThis center is located in Coatlán del Río, Morelos and has capacity for 2,528 female inmates.

The concession contract was agreed for 20 years from the start of operations, which occurred on May 21st 2015.

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Impulsora del Desarrollo y el Empleoen América Latina, S.A.B. de C.V. y SubsidiariasYears Ended December 31, 2015 and 2014 with Report of Independent Auditors

Contents:

Report of Independent Auditors 23

Audited Consolidated Financial Statements:

Consolidated Statements of Financial Position 24

Consolidated Statements of Comprehensive Income 25

Consolidated Statements of Changes in Shareholders 26

Consolidated Statements of Cash Flow 28

Notes to Consolidated Financial Statements 29

Consolidated Financial Statements21

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Report of Independent Auditors

To the Shareholders of Impulsora del Desarrollo y el Empleo en América Latina, S.A.B. de C.V. and subsidiaries

We have audited the accompanying consolidated financial statements of Impulsora del Desarrollo y el Empleo en América Latina, S.A.B. de C.V. and subsidiaries, which comprise the consolidated statements of financial posi-tion as at 31 December 2015 and 2014, and the consolidated statements of comprehensive income, statements of changes in equity and cash flow statements for the years then ended, and a summary of significant account-ing policies and other explanatory information.

Management’s responsibility for the consolidated financial statements

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

Auditor’s responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

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

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

Opinion

In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of Impulsora del Desarrollo y el Empleo en América Latina, S.A.B. de C.V. and subsidiaries as at 31 December 2015 and 2014 and their consolidated financial performance and cash flows for the years then ended in accordance with the International Financial Reporting Standards issued by the International Account-ing Standards Board.

Our audit opinion and the accompanying financial statements and footnotes have been translated from the original Spanish version into English for convenience purposes only.

Mancera, S.C.A Member Practice ofErnst & Young Global Limited

Jose Andres Marin

Mexico City4 April 2016

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IMPULSORA DEL DESARROLLO Y EL EMPLEO EN AMÉRICA LATINA, S.A.B. DE C.V. AND SUBSIDIARIES

Consolidated Statements of Financial Position(Amounts in thousands of Mexican pesos)

As at 31 December

2015 2014

Assets

Current assets:

Cash and cash equivalents (Note 4) Ps. 2,439,055 Ps. 1,217,768

Restricted cash (Note 4) 5,046,377 4,818,041

Accounts receivable, net (Note 5) 2,829,081 1,368,964

Related parties (Note 20) 812,557 104,807

Available-for-sale assets (Note 9) 21,149 54,791

Other current assets, net (Note 8) 2,654,394 2,903,075

Total current assets 13,802,613 10,467,446

Non-current assets:

Highways and other assets under concession (Note 6) 63,725,805 57,403,551

Hydroelectric plant and equipment (Note 7) 11,011,208 9,837,298

Property, furniture and equipment, net (Note 9) 448,683 388,214

Related parties (Note 20) 828,959 330,639

Long-term notes receivable (Note 5) 407,146 1,012,838

Equity investments in associates (Note 11) 877,460 418,160

Goodwill and operating and maintenance service fee collection rights, net (Note 11) 2,598,783 2,618,117

Deferred taxes (Note 22) 3,369,348 3,169,617

Licenses and software, net (Note 10) 17,856 19,269

Other non-current assets, net (Note 8) 474,785 502,994

Non-current assets of discontinued operations, net (Note 11) - 441,061

Total assets Ps. 97,562,646 Ps. 86,609,204

Liabilities and equity

Current liabilities:

Short-term debt and current portion of long-term debt (Note 17) Ps. 10,717,035 Ps. 8,083,376

Accounts payable and accrued liabilities (Note 14) 2,674,126 1,805,082

Taxes and contributions payable 70,608 65,758

Derivative financial instruments (Note 12) 4,533,228 5,650,620

Related parties (Note 20) 660,057 1,227,998

Deferred revenue 2,391 5,444

Total current liabilities 18,657,445 16,838,278

Non-current liabilities:

Long-term debt (Note 17) 68,453,627 61,297,729

Deferred income tax from tax consolidation (Note 22) 1,505,922 1,394,364

Deferred taxes (Note 22) 956,624 91,162

Deferred revenue 5,057 14,765

Rent and other receivables collected in advance 421,998 -

Employee benefits (Note 13) 73,390 61,377

Total liabilities 90,074,063 79,697,675

Equity (Note 21):

Share capital 8,607,000 8,607,000

Retained earnings:

From prior years ( 807,852) 717,882

Income/(loss) for the year 243,804 ( 1,276,064)

Total accumulated deficit ( 564,048) ( 558,182)

Other comprehensive loss ( 1,919,881) ( 2,068,811)

Equity attributable to equity holders of the parent company 6,123,071 5,980,007

Non-controlling interests 1,365,512 931,522

Total equity 7,488,583 6,911,529

Total liabilities and equity Ps. 97,562,646 Ps. 86,609,204

The accompanying notes are an integral part of these financial statements.

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Consolidated Statements of Comprehensive Income(Amounts in thousands of Mexican pesos)

For the year ended31 December

2015 2014

Operating revenue:

Toll Ps. 7,578,364 Ps. 6,694,114

Services 667,608 523,184

Sale of electricity 718,854 1,273,158

Prison services 953,946 611,554

Other 219,412 236,474

Construction (Note 2j) 8,020,033 5,449,818

Other income (Note 2x) 98,179 450,567

18,256,396 15,238,869

Operating expenses 3,190,627 3,023,606

Administrative expenses 71,892 86,786

Construction (Note 2j) 7,425,151 5,449,818

Depreciation and amortization (Notes 6, 7, 8, 9,10 and 11) 1,623,908 1,455,612

Other expenses (Note 2x) 201,703 19,562

12,513,281 10,035,384

Operating income 5,743,115 5,203,485

Net financing cost:

Accrued interest receivable 2,398,199 1,954,971

Accrued interest payable ( 7,557,052) ( 6,154,486)

Foreign exchange gain, net 430,333 183,004

Net unrealized gain/(loss) on derivative financial instruments and other finance income and expenses 559,361 ( 2,109,351)

( 4,169,159) ( 6,125,862)

Share of profit/(loss) of associates (Note 11) 96,569 ( 69,248)

Income/(loss) before income tax 1,670,525 ( 991,625)

Income tax (Note 22) 2,015,502 103,497

Loss before discontinued operations ( 344,977) ( 1,095,122)

Net income from discontinued operations, net of income tax (Note 11) 1,044,663 40,746

Net income/(loss) for the year Ps. 699,686 Ps. ( 1,054,376)

Net income/(loss) for the year attributable to:

Equity holders of the parent Ps. 243,804 Ps. ( 1,276,064)

Non-controlling interests 455,882 221,688

Ps. 699,686 Ps. ( 1,054,376)

Comprehensive income

Comprehensive income to be reclassified to profit or loss in future years:

Foreign currency translation effect Ps. 164,516 Ps. 178,484

Reclassification of other comprehensive income due sale of associated company ( 18,267) -

Unrealized gain/(loss) on derivative financial instruments, net of deferred taxes 12,263 ( 987,177)

Equity interest in other comprehensive loss of subsidiaries ( 918,660)

Total other comprehensive income/(loss) to be reclassified to profit or loss in future years 158,512 ( 1,727,353)

Comprehensive income/(loss) for the year Ps. 858,198 Ps. ( 2,781,729)

Comprehensive income/(loss) for the year attributable to:

Equity holders of the parent Ps. 392,734 Ps. ( 2,126,645)

Non-controlling interests 465,464 ( 655,084)

Ps. 858,198 Ps. ( 2,781,729)

Weighted average number of outstanding shares (thousands of shares) 2,920,560 2,934,356

Net income/(loss) per share attributable to equity holders of the parent Ps. 0.08 Ps. ( 0.43)


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Consolidated Statements of Changes in EquityFor the Years Ended 31 December 2015 and 2014

(Amounts in thousands of Mexican pesos)

Share capital

Legal reserve

earnings/(accumulated

deficit)

Total retained earnings/

(accumulated deficit)

Effect of hedging instruments

Translation effect

Other comprehensive

loss

Total equity attrib-utable to equity holders of the

parent Non-controlling

interestsTotal

equity

Balance as at 31 December 2013 Ps. 8,607,000 Ps. 130,149 Ps. 1,170,249 Ps. 1,300,398 Ps. ( 988,514) Ps. ( 125,017) Ps. ( 104,699) Ps. 8,689,168 Ps. 1,634,858 Ps. 10,324,026

Increase in legal reserve 47,419 ( 47,419)

Net loss ( 1,276,064) ( 1,276,064) ( 1,276,064) 221,688 ( 1,054,376)

Acquisition of non-controlling interests

( 21,370) ( 21,370) ( 897,290) ( 918,660)

Unrealized loss on derivatives, net of taxes

( 1,006,041) ( 1,006,041) 18,864 ( 987,177)

Foreign currency translation effect 176,830 176,830 1,654 178,484

Comprehensive loss for the year ( 1,276,064) ( 1,276,064) ( 1,006,041) 176,830 ( 21,370) ( 2,126,645) ( 655,084) ( 2,781,729)

Share buybacks ( 582,516) ( 582,516) ( 582,516) ( 582,516)

Dividends paid to minority shareholders of subsidiaries

( 132,388) ( 132,388)

Capital contributions of minority shareholders to subsidiaries

84,136 84,136

Balance as at 31 December 2014 8,607,000 177,568 ( 735,750) ( 558,182) ( 1,994,555) 51,813 ( 126,069) 5,980,007 931,522 6,911,529

Net income 243,804 243,804 243,804 455,882 699,686

Unrealized gain on derivatives, net of taxes

4,206 4,206 8,057 12,263

Reclassification of other comprehensive income due to sale of associated company

( 18,267) ( 18,267) - ( 18,267)


Comprehensive income for the year 243,804 243,804 4,206 162,991 ( 18,267) 392,734 465,464 858,198

Share buybacks ( 249,670) ( 249,670) ( 249,670) ( 249,670)


( 161,079) ( 161,079)


129,605 129,605

Balance as at 31 December 2015 Ps. 8,607,000 $ 177,568 Ps. ( 741,616) Ps. ( 564,048) Ps. ( 1,990,349) Ps. 214,804 Ps. ( 144,336) Ps. 6,123,071 Ps. 1,365,512 Ps. 7,488,583


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Consolidated Statements of Changes in EquityFor the Years Ended 31 December 2015 and 2014

(Amounts in thousands of Mexican pesos)

Share capital

Legal reserve

earnings/(accumulated

deficit)

Total retained earnings/

(accumulated deficit)

Effect of hedging instruments

Translation effect

Other comprehensive

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Total equity attrib-utable to equity holders of the

parent Non-controlling

interestsTotal

equity

Balance as at 31 December 2013 Ps. 8,607,000 Ps. 130,149 Ps. 1,170,249 Ps. 1,300,398 Ps. ( 988,514) Ps. ( 125,017) Ps. ( 104,699) Ps. 8,689,168 Ps. 1,634,858 Ps. 10,324,026

Increase in legal reserve 47,419 ( 47,419)

Net loss ( 1,276,064) ( 1,276,064) ( 1,276,064) 221,688 ( 1,054,376)

Acquisition of non-controlling interests

( 21,370) ( 21,370) ( 897,290) ( 918,660)

Unrealized loss on derivatives, net of taxes

( 1,006,041) ( 1,006,041) 18,864 ( 987,177)


Comprehensive loss for the year ( 1,276,064) ( 1,276,064) ( 1,006,041) 176,830 ( 21,370) ( 2,126,645) ( 655,084) ( 2,781,729)

Share buybacks ( 582,516) ( 582,516) ( 582,516) ( 582,516)


( 132,388) ( 132,388)


84,136 84,136

Balance as at 31 December 2014 8,607,000 177,568 ( 735,750) ( 558,182) ( 1,994,555) 51,813 ( 126,069) 5,980,007 931,522 6,911,529

Net income 243,804 243,804 243,804 455,882 699,686

Unrealized gain on derivatives, net of taxes

4,206 4,206 8,057 12,263

Reclassification of other comprehensive income due to sale of associated company

( 18,267) ( 18,267) - ( 18,267)


Comprehensive income for the year 243,804 243,804 4,206 162,991 ( 18,267) 392,734 465,464 858,198

Share buybacks ( 249,670) ( 249,670) ( 249,670) ( 249,670)


( 161,079) ( 161,079)


129,605 129,605

Balance as at 31 December 2015 Ps. 8,607,000 $ 177,568 Ps. ( 741,616) Ps. ( 564,048) Ps. ( 1,990,349) Ps. 214,804 Ps. ( 144,336) Ps. 6,123,071 Ps. 1,365,512 Ps. 7,488,583


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Consolidated Statements of Cash Flows(Amounts in thousands of Mexican pesos)

For the year ended31 December

2015 2014

Operating activities

Income/(loss) before income tax Ps. 1,670,525 Ps. ( 991,625)

Items not affecting cash flows:

Depreciation 488,022 418,494

Amortization of concessions, roads and intangible assets 1,135,886 1,037,118

Share of (profit)/loss of associates ( 96,569) 69,248

Loss/(gain) on sale of fixed assets 818 ( 434)

Net periodic benefit cost of labor obligations 12,749 8,539

Accrued interest payable 7,557,051 6,154,486

Accrued interest receivable ( 2,398,199) ( 1,954,971)

Unrealized (gain)/loss on derivatives, net ( 535,872) 2,161,161

Unrealized foreign exchange gain, net ( 371,323) ( 25,647)

Changes in working capital:

Accounts receivable ( 1,365,922) 218,009

Other current assets ( 415,357) ( 1,429,348)

Accounts payable and accrued liabilities ( 342,860) 230,978

Deferred revenue, rent and other unearned revenue 409,236 ( 13,881)

Labor obligations ( 736) 7,012

Other non-current assets 421,130 51,866

Income tax paid ( 765,964) ( 900,270)

Other recoverable taxes 427,297 1,347,639

Net cash flows from operating activities 5,829,912 6,388,374

Investing activities

Restricted cash ( 228,336) 1,604,542

Investment in highways and other assets under concession ( 4,651,397) ( 4,669,156)

Purchase of property, plant and hydroelectric equipment, furniture and equipment ( 555,589) ( 242,582)

Purchase of licenses - ( 35)

Proceeds from sale of fixed assets 38,947 17,100

Equity investment in associates ( 841,055) ( 267,952)

Acquisition of non-controlling interests - ( 320,428)

Interest received 290,736 988,828

Loans granted ( 652,322) ( 1,079,621)

Sale of shares 1,500,000 -

Net cash flows used in investing activities ( 5,099,016) ( 3,969,304)

Financing activities

Loans obtained 14,438,478 8,621,962

Loans repaid ( 6,310,822) ( 5,186,741)

Interest paid ( 7,362,058) ( 6,151,828)

Share buybacks ( 249,670) ( 582,516)

Dividends paid to minority shareholders of subsidiaries ( 161,079) ( 132,388)

Capital contributions of minority shareholders to subsidiaries 129,605 ( 813,154)

Net cash flows from/(used in) financing activities 484,454 ( 4,244,665)

Net increase/(decrease) in cash and cash equivalents 1,215,350 ( 1,825,595)

Adjustment for effects of foreign exchange differences 5,937 42,379

Cash and cash equivalents at beginning of year 1,217,768 3,000,984

Cash and cash equivalents at end of year Ps. 2,439,055 Ps. 1,217,768

Non-monetary transactions from investing activities:

Highways and other assets under concession Ps. 643,963 Ps. 136,754


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Notes to Consolidated Financial Statements31 December 2015 and 2014

(In thousands of Mexican pesos, except where otherwise indicated)

1. Description of the Business and Relevant Events

I. Description of the Business

mpulsora del Desarrollo y el Empleo en América Latina, S.A.B. de C.V. and subsidiaries (hereinafter collectively referred to as “IDE-AL” or “the Company”) was incorporated on 1 June 2005 as a result of a spin-off from Grupo Financiero Inbursa, S.A.B. de C.V. The Company is a leader in the infrastructure construction sector in Mexico, and it is primarily engaged in securing and operating long-term concessions and contracts to design, build, and operate infrastructure projects, such as toll highways, water treatment plants, hydroelectric energy plants, correctional facilities, and multimodal transportation terminals.

The Company’s head offices are located in Mexico City, at Lago Zurich No. 245, Edificio Presa Falcón, 17th floor, Ampliación Granada, Miguel Hidalgo, postal code 11529.

On 4 April 2016, the Company’s Board of Directors authorized the issue of the accompanying consolidated financial statements.

II. Relevant events

Promotora del Desarrollo en América Latina, S.A. de C.V.

a) In November 2015, through its subsidiary Promotora del Desarrollo en América Latina, S.A. de C.V. (Promotora IDEAL), IDEAL sold its stake in its associated company Star Médica, S.A. de C.V. and subsidiaries. Proceeds from the sale totaled Ps. 1,500 million and the Company’s capital gain on the sale was Ps. 1,044.6 million, which is presented as “discontinued operations in the statement of comprehensive income.

b) On 30 January 2015, Promotora IDEAL entered into a service contract with Banco Nacional de Obras y Servicios Públicos, S.N.C. through Trust No. 1967 called “Tramo carretero Toluca-Atlacomulco” (Trust 1967 Toluca Atlacomulco). Under this contract, the Company agrees to provide highway management, operating and maintenance services in exchange for a monthly consideration of Ps. 9,533. The term of this contract will be equal to the term of the concession.

Promotora IDEAL entered into a contract with Trust 1967 Toluca Atlacomulco for the construction and outfitting of the section C and the Mavoro and Altacomulco bypasses of the Toluca-Atlacomulco highway. The total value of this contract is Ps. 2,810,650 and in 2015, the Company received an advance payment of 15% from the trust. Construction work commenced in January 2016.

1. Description of the Business and Relevant Events

Trust 1967 “Toluca Atlacomulco”

In April 2015, through its subsidiary Promotora Toluca Atlacomulco, S.A. de C.V., the Company became a trust member of the Trust 1967 Toluca Atlacomulco. The Company will make contributions to this trust to ensure completion of the modernization project undertaken for the Toluca-Atlacomulco highway in the terms stipulated in the agreement.

As trust member in the Trust 1967 Toluca Atlacomulco, IDEAL has the right to recover all of the contributions that it makes to the trust fund, including any returns earned on the contributions, which should be at least equal to the Rate of Return to which the Company is entitled to earn in terms of the agreement.

These trust contributions are classified as financial assets in IDEAL’s financial statements and the amount of this item as at 31 December 2015 is Ps. 1,228,520.

2. Basis of Preparation of the Consolidated Financial Statements and Summary of Significant Accounting Policies

a) Basis of preparation

The accompanying financial statements have been prepared in accordance with International Financing Reporting Stan-dards (IFRS), effective as at 31 December 2015, as issued by the International Accounting Standards Board (IASB).

The preparation of the Company’s consolidated financial statements in accordance with IFRS requires the use of critical es-timates and assumptions that affect the reported amounts of certain assets and liabilities, and revenue and expenses. It also requires management to exercise judgment in how it applies the Company’s accounting policies.

The Company’s functional and reporting currency is the Mexican peso.

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b) Consolidation and basis of translation of financial statements of foreign subsidiaries

i) Consolidation and equity method

The accompanying consolidated financial statements include the accounts of IDEAL and those of the subsidiaries over which the Company exercises significant control. The financial statements of the subsidiaries have been prepared for the same reporting period and following the same accounting policies as those of the Company. Most of the companies operate in the infrastructure sector or provide services to companies related to these activities. All intercompany balances and transactions have been eliminated on con-solidation. Non-controlling interests represent the subsidiaries in which the Company does not hold 100% equity interest.

Equity investments in associates over which the Company exercises significant influence are accounted for using the equity method, which basically consists of recognizing IDEAL’s proportional share in the net income or loss and the equity of its investees.

The operating results of the subsidiaries and associates were included in the Company’s consolidated financial statements as of the month following the acquisition. The financial statements of the trusts into which the Company’s toll revenues are deposited, and other trusts through which certain subsidiaries operate, are consolidated with the Company’s financial information, since the trusts are con-sidered special purpose entities.

Non-controlling interests represent the portion of the net earnings and net assets of subsidiaries that is not held by the Company. Non-con-trolling interests are presented as a separate caption in the consolidated statement of comprehensive income and are presented in the consolidated statement of financial position as a separate component of equity attributable to equity holders of the parent.

A description of the Company’s main investments in its subsidiaries and associates as at 31 December 2015 and 2014 is as follows:

% equity interest as at 31 December

CountryDate of first

consolidationType of activityCompany name 2015 2014

Controlling companies: Desarrollo de América Latina, S.A. de C.V. 99.99 99.99 Mexico June 2005 Controlling company

Promotora del Desarrollo de América Latina, S.A. de C.V. 99.07 99.07 Mexico June 2005 Controlling company

Highways: Concesionaria de Vías Troncales, S.A. de C.V. 99.99 99.99 Mexico June 2005 Highway

Concesionaria de Carreteras, Autopistas y Libramientos de la República Mexicana, S.A. de C.V. 99.99 99.99 Mexico June 2005 Highway

CFC Concesiones, S.A. de C.V. 99.99 99.99 Mexico June 2005 Highway

Autopista Tijuana-Mexicali, S.A. de C.V. 99.99 99.99 Mexico September 2005 Highway

Autopista Arco Norte, S.A. de C.V. 99.00 99.00 Mexico December 2005 Highway

Concesionaria de Autopistas y Libramientos del Pacífico Norte, S.A. de C.V. 99.99 99.99 Mexico November 2009 Highway

Concesionaria Distribuidor Vial San Jerónimo-Muyuguarda, S.A. de C.V. (2) 100.00 100.00 Mexico December 2010 Highway

Concesionaria Autopista Guadalajara Tepic, S.A. de C.V. 99.99 99.99 Mexico November 2011 Highway

Remote toll collection system: I + D México, S.A. de C.V. 50.00 50.00 Mexico June 2005 Services

Servicios Administrativos Tele-P, S.A. de C.V. 49.99* 49.99* Mexico June 2005 Services

Tag Pase, S.A. de C.V. 99.99 99.99 Mexico July 2012 Services

Leasing: Sinergia, Soluciones Integrales de Energía, S.A. de C.V. 99.99 99.99 Mexico March 2006 Leasing

Water treatment plants: Ideal Saneamiento de Saltillo, S.A. de C.V. 99.99 99.99 Mexico June 2006 Water treatment

Aguas Tratadas del Valle de México, S.A. de C.V. (1)(3) 51.00 51.00 Mexico April 2010 Water treatment

Servicio de Tratamiento de Aguas PTAR Caracol, S.A. de C.V. 51.00 51.00 Mexico November 2012 Water treatment

Hydroelectric plant:

Ideal Panamá, S.A. 100.00 100.00 Panama May 2007Generation and operation

of hydroelectric power

Cilsa Panamá, S.A. 100.00 100.00 Panama December 2010 Construction

Multimodal transportation terminals:

Construcción, Conservación y Mantenimiento Urbano, S.A. de C.V. 69.23 69.23 Mexico June 2009Construction and operation

of transportation terminal

Desarrolladora Mexicana de Infraestructura Social, S.A. de C.V. (4) 80.00 80.00 Mexico March 2010Construction and operation


Promotora para el Desarrollo de Proyectos de Transporte, S.A. de C.V. 100.00 100.00 Mexico August 2013 Controlling company

Concesionaria Etram Cuatro Caminos, S.A. de C.V. 80.00 80.00 Mexico September 2013Construction and operation


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% equity interest as at 31 December

CountryDate of first

consolidationType of activityCompany name 2015 2014

Correctional facilities:

Promotora de Infraestructura de Readaptación Social, S.A. de C.V. 100.00 100.00 Mexico April 2013 Controlling company

Operadora de Proyectos SIS, S.A. de C.V. 80.00 80.00 Mexico August 2013Management of

correctional facilities

CRS Morelos, S.A. de C.V. 100.00 100.00 Mexico July 2013

Construction and management of


Makobil, S.A. de C.V. 100.00 100.00 Mexico October 2013

Construction and management of


Servicios de Personal para Proyectos SIS, S.A. de C.V, 100.00 100.00 Mexico August 2013 Services

Operadora MTTO para la Infraestructura Social, S.A. de C.V. 100.00 100.00 Mexico December 2013Prison management

services

Servicio de Mantenimiento para la Infraestructura Social, S.A. de C.V. 100.00 100.00 Mexico December 2013 Services

Other:

Inmobiliaria para Proyectos de Infraestructura en América Latina, S.A. de C.V. 99.99 99.99 Mexico October 2010 Leasing company

Servicios Corporativos IDEAL, S.A. de C.V. 99.99 99.99 Mexico August 2005 Services

Administración Especializada Integral, S.A. de C.V. 99.99 99.99 Mexico June 2005 Services

Administradora Carretera Chamapa La Venta, S.A. de C.V. 99.99 99.99 Mexico June 2005 Services

Administradora de Terminales Multimodales, S.A. de C.V. 69.23* 69.23* Mexico November 2010 Services

Servicios de Tratamiento de Aguas Residuales, S.A. de C.V. (5) 99.99 99.99 Mexico November 2010 Services

Administradora y Operadora de Estacionamientos Ideal, S.A. de C.V. 99.99 99.99 Mexico October 2010 Services

Promotora Toluca Atlacomulco, S.A. de C.V. 99.99 - Mexico April 2015 Construction services

Servicios de Personal para Operación Proyecto Atlacomul-co-Toluca, S.A. de C.V. 99.99 - Mexico April 2015 Services

Associates:

Hospital Infantil Privado de Acapulco, S.A. de C.V. y sus subsidiarias: 50.00 50.00 Mexico Health

Centro Farmacéutico del Pacífico, S.A. de C.V. 49.99* 49.99* Mexico Health

Laboratorios Médicos del Pacífico, S.A. de C.V. 49.99* 49.99* Mexico Health

Star Médica, S.A. de C.V. y subsidiarias (6) - 49.99 Mexico Health

Autovía Mitla-Tehuantepec, S.A. de C.V. 40.00 40.00 Mexico Highway

Operadora Carretera de Mitla, S.A. de C.V. 40.00 40.00 Mexico Operating company

* Indirect equity interest(1) As at 31 December 2014, IDEAL controls more than half of the voting rights through agreements with other shareholders.(2) In April 2014, IDEAL acquired a 30% non-controlling interest in this company (Note 6)(3) In November 2014, IDEAL acquired a 10.20% non-controlling interest in this company (Note 6)(4) In December 2014, the share capital of this entity was restructured and as a result, IDEAL’s non-controlling interest de-

creased by 15% (Note 6)(5) This company was liquidated in December 2015(6) All of the shares in this company were sold off in November 2015 (Note 6)

ii) Basis of translation of financial statements of foreign subsidiaries

The financial statements of the Company’s foreign subsidiaries are translated from their local currency and then consolidat-ed in the Company’s reporting currency. The assets and liabilities of the subsidiaries are translated to Mexican pesos at the prevailing exchange rate at year-end. Equity accounts are translated at the prevailing exchange rate at the time capital contributions were made and earnings were generated. Revenues, costs and expenses are translated at the historical exchange rate. Translation differences are recognized in equity under other comprehensive loss in the line item Foreign currency translation effect.

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The statements of cash flows were translated using a weighted average exchange rate for the year. Translation differences are recognized in the statement of cash flows as an adjustment for effects of foreign exchange differences.

c) Revenue recognition

Toll revenues

Toll revenues are recognized as the services are provided to highway users, and they are recognized in the Company’s ac-counting on a monthly basis. Toll rates are set based on the specific characteristics of the different types of vehicles that use the highways and these rates are reviewed and increased based on the National Consumer Price Index (NCPI).

Toll revenues are deposited into the trusts on a daily basis (see Note 6) to guarantee payment of the Company’s loans.

The funds held in trust shall be made available to the Company after it has met the conditions for doing so established in the respective trust agreements.

Service revenue

Services revenues are earned from administrative services related to managing the remote toll collection and electronic payment systems and operating parking lots in shopping centers. Service revenues are recognized at the time services are rendered.

Revenue from the sale of energy

Revenue from the sale of electricity and power in Panama is recognized when the electricity produced is delivered to the customers based on their monthly electricity and power payments determined by the National Dispatch Center and on the prices established in the power and energy supply contracts.

Revenue from operating correctional facilities

Revenue from services provided to correctional facilities refers to the revenue earned from prison operating and maintenance services, which the Company recognizes on a monthly basis at the time the services are rendered.

Other operating income

Other operating income is comprised of (i) revenue from the concession for the Saltillo water treatment plant; (ii) revenue from the concessions for the Azteca and El Rosario multimodal subway stations; and (iii) other revenue earned from leasing activi-ties. All of this revenue is recognized on an accrual basis.

Interest income

Interest income is recognized using the effective interest rate (EIR) method. The effective interest rate method is a method of calculating the amortized cost of a financial asset or a financial liability (or group of financial assets or financial liabilities) and of allocating the interest income or interest expense over the relevant period. EIR is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the net carrying amount of the financial asset or liability.

Accrued interest receivable is included as part of net financing cost in the consolidated statement of comprehensive income.

d) Use of estimates

The preparation of financial statements in accordance with IFRS requires the use of estimates and assumptions in certain ar-eas. Actual results could differ from these estimates. The Company based its assumptions and estimates on the best available information at the time the consolidated financial statements were prepared. However, the existing circumstances and as-sumptions about future events may change due to changes in the market or circumstances that are beyond the Company’s control. Such changes are reflected in the estimates and their effects are shown in the financial statements as they occur.

These assumptions mainly refer to the following:

• Useful life estimates of items of property, furniture and equipment and hydroelectric plant and equipment• Employee benefits• Allowance for doubtful accounts• Impairment in the value of long-lived assets, intangibles and goodwill• Fair value of derivative financial instruments

e) Financial assets and liabilities

Financial assets and liabilities that are within the scope of International Accounting Standard (IAS) 39, Financial Instruments: Recognition and Measurement, generally include investments in financial instruments, debt and equity instruments, ac-counts receivable and other accounts receivable, loans and financing, accounts payable and accrued liabilities and derivative financial instruments.

Financial assets and liabilities are initially measured at fair value, plus directly attributable transactions costs, except for those designated upon initial recognition at fair value through profit or loss. Financial assets and liabilities are subsequently mea-

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sured based on their classification into one of the following categories: (i) at fair value through profit or loss; (ii) held-to-ma-turity or available-for-sale; or (iii) loans and receivables.

The Company’s financial assets comprise cash and cash equivalents, trade and other receivables, publicly and non-publicly traded financial instruments, and derivatives.

The Company’s financial liabilities are classified as either: i) financial liabilities measured at fair value through profit or loss, or ii) financial liabilities measured at amortized cost.

The Company’s financial liabilities comprise trade and other payables, loans, and derivative financial instruments. Derivatives are measured at fair value, while short- and long-term debt and accounts payable are measured at amortized cost.

Offsetting of financial instruments

Financial assets and financial liabilities are offset with the net amount reported in the consolidated statement of financial po-sition if, and only if, (i) there is a currently enforceable legal right to offset the recognized amounts; and (ii) there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously.

Fair value of financial instruments

The fair value of financial instruments that are traded in active markets at each reporting date is determined by reference to quoted market prices or dealer price quotations (bid price for long positions and ask price for short positions), without any deduction for transaction costs.

For financial instruments not traded in an active market, the fair value is determined using appropriate valuation techniques. Such techniques may include using recent arm’s-length market transactions; reference to the current fair value of another financial instrument that is substantially the same; a discounted cash flow analysis or other valuation models.

The hierarchy used for determining fair values is as follows:

Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities;

Level 2: Variables other than the quoted prices included in level 1 that are observable for assets or liabilities, either directly (prices) or indirectly (price derivatives); and

Level 3. Variables used for assets or liabilities that are not based on observable market data (unobservable variables).

Note 16 provides an analysis of the fair values of the Company’s financial instruments.

f) Cash, restricted cash and cash equivalents

Cash in banks earns interest at floating rates on daily account balances. Cash equivalents are represented by short-term deposits made for terms ranging from one day to three months, and which bear interest at rates common for each type of short-term investment. These investments are stated at cost plus accrued interest, which is similar to their market value. Cash and cash equivalents that is restricted in some way, either due to contractual or legal considerations, is presented separately as part of current or non-current assets, as applicable.

g) Allowance for doubtful accounts

The Company periodically recognizes an allowance for doubtful accounts determined based on its past collections experi-ence, the aging of the balances, and general economic trends, and also considering accounts receivable currently in litigation.

The risk of uncollectability of related party receivables is evaluated annually based on an examination of each related party’s financial situation and the market in which they operate.

h) Derivative financial instruments and hedging instruments

The Company mitigates its interest rate and foreign currency risks through a controlled risk management program that includes the use of derivative financial instruments. The Company uses foreign currency forwards to offset the short-term risk of foreign exchange fluctuations.

In order to reduce the risks due to fluctuations in interest rates, the Company utilizes interest rate swaps, through which it either pays or receives the difference between the net amount of either paying or receiving a fixed interest rate and the cash flow from receiving or paying a floating interest rate, based on a notional amount denominated in Mexican pesos, U.S. dollars, or Mexican investment units (UDIs). Most of these derivative financial instruments qualify and have been designated as cash flow hedges.

The Company’s policy includes: (i) formal documentation of all hedging relationships between the hedging instrument and the hedged position; (ii) the objectives for risk management; and (iii) the strategy for conducting hedging transactions. This process takes into account the relationship between cash-flow derivatives and the corresponding assets and liabilities recognized in the statement of financial position.

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The effectiveness of the Company’s hedge derivatives is assessed at the time of their designation as hedges (prospective tests), as well as during the hedging period (retrospective tests). These tests are performed at least quarterly using recognized statistical techniques. Whenever it is determined that a derivative is no longer highly effective, the hedge accounting for the derivative is discontinued on a prospective basis. In 2015 and 2014, the effect of the discontinuation of hedge accounting was a gain of Ps. 79,800 and a loss of Ps. 131,556, respectively.

Derivative financial instruments are recognized in the statement of financial position at their fair values, which are obtained from the financial institutions with which the Company has entered into the related agreements.

The effective portion of changes in the fair values of derivative financial instruments designated as cash flow hedges is rec-ognized as a component of other comprehensive income in equity, while the ineffective portion is recognized in profit or loss. Changes in the fair value of derivatives that do not qualify as hedges are immediately recognized in the statement of com-prehensive income.

Unrealized gains or losses on hedging derivatives are recognized in profit or loss under net unrealized (loss)/gain on derivative financial instruments and other finance income and expenses.

i) Business combinations and goodwill

i) Acquisitions of businesses and associates are recognized using the purchase method.

ii) Goodwill represents the difference between the acquisition cost and the fair value of the net assets acquired at the pur-chase date, the liabilities assumed and any non-controlling interests in the subsidiary at the acquisition date. For acquisitions of associated companies, goodwill represents the Company’s investment in these acquisitions, net of any impairment loss.

Goodwill is reviewed annually to determine its recoverability or, on a more frequent basis, when events or new circumstances indicate that the net book value of the goodwill might be not fully recoverable.

Potential impairment in the value of goodwill is determined by measuring the recoverable amount of the cash generating unit (or group of assets) to which the goodwill was allocated at the time it arises. When this recoverable amount is lower than the net book value, an impairment loss is recognized in the statement of comprehensive income.

For the years ended 31 December 2015 and 2014, the Company recognized no losses from impairment in the value of its goodwill.

iii) The acquisition of non-controlling interests is considered a transaction between entities under common control and any difference between the purchase price and the book value of the net assets acquired is assessed as an equity transaction (see Note 11).

iv) As a result of the application of the purchase method in respect of two of its acquisitions, the Company recorded operating and maintenance service fee collection rights as an intangible asset, as allowed under IAS 38, Intangible Assets. These fee col-lection rights are the result of the service contracts that the Company acquired to build infrastructure, install equipment, and carry out certain preliminary activities, and to provide comprehensive prison management services in correctional facilities.

j) Highways and other assets under concession

The Company accounts for its transactions from the construction and operation of assets under concession in accordance with IFRIC No. 12, Service Concession Arrangements. This interpretation states that private operators that provide infrastructure, construction, and development, maintenance or operating services to the public sector should recognize and classify their service concession arrangements as either financial assets, intangible assets, or a combination of both.

A financial asset is said to exist when an operator builds or upgrades infrastructure and enjoys the unconditional right to receive a fixed consideration from the assets in the form of either cash or another financial asset during the term of the agreement. An intangible asset is said to exist when the operator builds or upgrades infrastructure and is allowed to operate the assets for a set period of time after construction is completed. In the case of intangible assets, the operator’s future cash flow from the infrastructure is not fixed and varies depending on the use of the asset, which means this cash flow is considered a contingent asset. A combination of a financial asset and intangible asset is said to exist when the operator’s consideration is represented by both a financial asset and an intangible asset. For both financial and intangible assets, revenue and costs related to the construction or upgrade phase are recognized immediately during the construction or upgrade phase.

Borrowing costs directly attributable to the acquisition or construction of a qualifying asset are capitalized as part of the cost of the respective assets, provided it is likely that future economic benefits associated with the item will flow to the Company and that such benefits can be measured reliably. Income earned from temporary investments of borrowed funds that have yet to be used for the construction of the corresponding qualifying assets is deducted from the costs of capitalized loans. All other borrowing costs are expensed as incurred.

The Company classifies the assets represented by its concession agreements for the construction, management, and opera-tion of the water treatment plants as a financial asset (account receivable).

For both financial and intangible assets, revenue and costs related to the construction or upgrade phase are recognized im-mediately during the construction or upgrade phase.

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The Company’s investments classified as financial assets are measured at the fair value of the construction services rendered. Interest earned on these investments during the construction period is recognized as part of accrued interest receivable in the statement of comprehensive income. Interest income on the associated account receivable is calculated using the effective interest rate (EIR) method.

Amortization of highway concessions and other assets under concession is determined on the assets’ carrying amounts on a straight-line basis over the effective term of the concession title.

The Company recognizes its major contractual maintenance obligations in accordance with IAS 37, Provisions, Contingent Liabilities and Contingent Assets.

For the years ended 31 December 2015 and 2014, the Company recognized no losses from impairment in the value of high-ways and other assets under concession.

k) Hydroelectric plant and equipment

The Company’s hydroelectric plant and related equipment are initially stated at production cost. Since these assets require a substantial period to get them ready for use, the Company capitalizes the borrowing cost incurred during the construction and installation stage of the assets. Capitalized borrowing costs are determined by applying the weighted-average capitalization rate of borrowing costs to the weighted average amount of investments in qualifying assets made during the acquisition peri-od. The Company follows the guidelines of IAS 16, Property, Plant and Equipment.

For the year ended 31 December 2015 and 2014, there were no indicators of impairment in the value of hydroelectric plant and equipment.

l) Property, furniture and equipment

Property, furniture and equipment is recognized at cost and presented net of accumulated depreciation. Depreciation is de-termined on the assets’ carrying amounts on a straight-line basis over the estimated useful lives of the assets.

The Company periodically reviews the residual values, useful lives and depreciation methods of its fixed assets and adjusts them prospectively where appropriate at the end of each reporting period, in accordance with IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors.

An item of property, furniture and equipment is derecognized upon disposal or when no future economic benefits are expect-ed from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in other operating income or other operating expenses when the asset is derecognized.

Depreciation rates are as follows:

Property 5%

Furniture and equipment 10%

Peripheral remote toll collection system 30%

Computer equipment 30%

Plant machinery and equipment 10%

Transportation equipment 25%

The carrying amount of property, furniture and equipment is reviewed annually whenever there are indicators of impairment in the value of such assets. When the recoverable amount of an asset, which is the higher of the asset’s expected net selling price and its value in use (the present value of future cash flows), is less than its net carrying amount, the difference is recognized as an impairment loss.

For the year ended 31 December 2015, the Company recognized no impairment in the value of plant machinery and equip-ment. For the year ended 31 December 2014, the Company recognized impairment of Ps. 6,534 in the value of plant machin-ery and equipment.

Non-current assets held for sale

Current assets held for sale are measured at the lower of either their carrying amount of their fair value less costs to sell. A cur-rent asset is classified as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use. Once classified as held for sale, a current asset is no longer depreciated or amortized.

A current asset is classified as held for sale only when the sale is highly probable and the asset is available for immediate sale in its present condition.

In addition, the Company must be committed to the sale and there must be an expectation that the sale will be completed following the requirements for recognition as such within 12 months of classification as ‘held for sale’.

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m) Software licenses

The Company recognizes its software licenses at cost, net of accumulated amortization.

Amortization is determined on the assets’ carrying amounts on a straight-line basis over periods ranging from 10 to 20 years, which correspond to the estimated remaining useful lives of the assets.

The Company’s policy is to review the carrying amounts of its intangible assets with finite useful lives on an annual basis and whenever there are indicators of impairment in the value of such assets. When the recoverable amount of an asset, which is the higher of the asset’s expected net selling price and its value in use (the present value of future cash flows) is less than its net carrying amount, the difference is recognized as an impairment loss.

For the years ended 31 December 2015 and 2014, there were no indicators of impairment in the value of software licenses.

n) Impairment in the value of long-lived assets

The Company assesses at each reporting date whether there is an indication that its long-lived assets, including goodwill and intangible assets, may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset’s recoverable amount, which is the higher of an asset’s fair value less costs to sell and its value in use. In assessing 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. Where the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired, and its carrying amount is written down to its recoverable amount, and the loss is immediately recognized in profit or loss.

The depreciation and amortization expense for future periods is adjusted to the new carrying amount during the remaining useful life of the related assets. Recoverable amounts are determined for each individual asset, unless the asset generates cash inflows that are closely dependent on the cash flows generated by other assets or group of assets (cash generating units).

The Company bases its impairment calculation on detailed budgets and forecast calculations which are prepared separately for each of the Company’s cash-generating units to which the individual assets are allocated. These budgets and forecast calculations generally cover a period of from one to three years. For longer periods, a long-term growth rate is calculated and applied to project future cash flows after the fifth year.

The premises used for the projections are as follows

• Current customers and expected growth• The state of the market and market penetration expectations• Investments made for the maintenance of existing assets• Market consolidation and synergies

Weighted average cost of capital (WACC) and market participants

The Company determined the discount rate for each of its cash generating units (CGUs) based on its weighted average cost of capital (WACC). For the calculation of WACC, information on the risk-free rate and market yield was provided by specialized agencies that provide data at the most recent reporting date or the date closest to the reporting date.

In accordance with IAS 36, Impairment of Assets, the estimated discount rates used in the impairment testing of each CGU were determined considering assumptions of market participants. Selected market participants are of a similar size, and their operations and business are similar to those of the Company.

All projections were performed using the functional currency of each CGU, without taking into account the effects of inflation or the carrying amount of the assets, goodwill, equity, interest bearing debt, and cash.

o) Leases

The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfillment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement.

- Operating Leases

Leases in which the Company does not transfer substantially all of the risks and rewards inherent to the ownership of the asset are classified as operating leases. Payments made under operating lease agreements are recognized in the statement of comprehensive income on a straight-line basis over the term of the lease.

- Finance leases

Lease agreements that transfer to the Company substantially all of the risks and rewards inherent to the ownership of the leased good are classified as finance leases. Finance leases are capitalized at the commencement of the lease at the incep-

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tion date fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the re-maining balance of the liability. Finance charges are recognized in finance costs in the statement of comprehensive income.

p) Foreign currency transactions

Transactions in foreign currency are translated using the exchange rate prevailing on the day of the related transactions. Foreign currency denominated assets and liabilities are translated using the exchange rate ruling at the reporting date. Dif-ferences arising on settlement or translation of monetary items, and those arising from the translation of foreign currency de-nominated balances at the reporting date, are recognized in profit or loss. See Note 15 for the Company’s foreign currency denominated assets and liabilities as at 31 December 2015 and 2014.

q) Accounts payable, accrued liabilities and provisions

Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

If the effect of the time value of money is material, provision amounts are determined as the present value of the ex-pected outflow of resources to settle the obligation. The provisions are discounted using a pre-tax rate that reflects the current market conditions at the date of the statement of financial position and, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

Contingent liabilities are recognized only when it is probable that an outflow or resources embodying economic benefits will be required to settle the obligation. Also, contingencies are recognized only when they generate a loss.

r) Employee benefits

The Company annually recognizes the liability for seniority premiums based on independent actuarial calculations applying the projected unit credit method, using financial assumptions net of inflation. The latest actuarial calculation was prepared on 31 December 2015.

The Company creates a provision for the cost of compensated absences, such as paid annual leave, which is recognized using the accrual method.

s) Employee profit sharing

Current employee profit sharing is presented as part of operating expenses in the statement of comprehensive income.

t) Income tax

Current income tax is recognized as a current liability, net of prepayments made during the year.

Deferred income tax is calculated using the asset and liability method established in IAS 12, Income Taxes.

Deferred income tax is calculated using the asset and liability method, based on the temporary differences between financial reporting and tax values of assets and liabilities at the reporting date.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be used. Unrecognized deferred tax assets are reassessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss. Deferred tax items are recog-nized in correlation to the underlying transaction either in other comprehensive income or directly in equity.

u) Government grants

In accordance with IAS 20, Accounting for Government Grants and Disclosure of Government Assistance, which sets out the accounting treatment for, and disclosures of, government grants and other forms of government assistance, the Company recognizes the government grants only when there is reasonable assurance that the grant will be received and all attached conditions will be complied with. Simply receiving a government grant is not conclusive evidence that the conditions attached to it have been met.

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v) Earnings per share

Earnings per share are determined by dividing net income for the year by the weighted-average number of shares outstand-ing attributable to ordinary equity holders of the parent during the year. The calculation of the weighted average number of shares outstanding in 2015 and 2014 excludes treasury shares.

w) Concentration of risk

The main financial instruments used to fund the Company’s operations are comprised of bank loans, structured notes (“cer-tificados bursátiles”) and lines of credit, derivative financial instruments, accounts payable to related parties and accounts payable and accrued liabilities. The Company holds several financial assets, such as cash and cash equivalents, accounts receivable, related parties and other current assets that are directly related to its business.

The main risks associated with the Company’s financial instruments are cash flow risk and market, credit and liquidity risks. The Company performs sensitivity analyses to measure potential losses in its operating results based on a theoretical increase of 100 basis points in interest rates and a 10% change in exchange rates. The Board of Directors approves the risk management policies that are proposed by the Company’s management.

Credit risk is the risk that the counterparty will default on its payment obligations with the Company. The Company is also exposed to market risks associated with fluctuations in interest rates and exchange rates. To mitigate its exposure to foreign currency fluctuations, the Company uses derivative financial instruments.

Financial assets which potentially subject the Company to concentrations of credit risk are cash and short-term deposits, trade receivables, and debt and derivative financial instruments. The Company’s policy is designed to not restrict its exposure to any one financial institution; therefore, the Company’s financial instruments are maintained in different financial institutions that are located in different geographical regions.

The credit risk in accounts receivable is mitigated by the fact the Company has a broad customer base that is geographically diverse. The Company continuously monitors its customer accounts and other debtor accounts, and it requires no collateral to guarantee collection of its receivables. Nevertheless, in the event that the Company’s collection cycles deteriorate signifi-cantly, its financial performance could be adversely affected.

A portion of the Company’s surplus cash is invested in time deposits in financial institutions with strong credit ratings.

Sensitivity analyses

a) Foreign exchange fluctuations

Had the Company’s net foreign currency debt, which as at 31 December 2015 was USD 455 million (Ps. 7,848 million), increased by 10% due to rising exchange rates, that debt would have increased by Ps. 785 million to Ps. 8,633 million. In addition, since the base amount for the payment of interest would also be higher in terms of the Mexican peso, the Company’s net interest expense would have increased by Ps. 229 million.

b) Interest rate increase

Had the Company’s contractual interest rates as at 31 December 2015 increased by 100 basis points, its net interest expense would have increased by Ps. 1,334 million.

c) Operating risks

The Company makes purchases from various suppliers. In 2015 and 2014, approximately 77.6% and 64.9%, respectively, of the Company’s purchases for its construction projects were made from related parties, and approximately 22.4% and 35.1%, re-spectively, of the Company’s other purchases were made from other suppliers. In the event that any of these suppliers were to stop providing services to the Company or stop providing such services on a timely basis and at reasonable prices, the Com-pany’s business and its financial performance could be adversely affected.

IDEAL’s principal assets are its concession titles and the Company would not be able to continue operating its concessions if they were revoked by the respective contracting government agencies.

x) Statement of comprehensive income presentation

Costs and expenses shown in the Company’s statement of comprehensive income are presented based on a combination of their function and their nature, which provides a clearer picture of the components of the Company’s operating income, since such classification allows for comparability of the Company’s financial statements with those of other companies in its industry.

Operating income is recognized in the statement of comprehensive income, since it is an important indicator used for eval-uating the Company’s operating results. Operating income consists of ordinary revenues and operating costs and expenses.

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An analysis of the Company’s other income and expenses for the years ended 31 December 2015 and 2014 is as follows:

2015 2014

Other income:

Gain on sales of fixed assets Ps. - Ps. 434

Income from toll plaza facilities 65,790 20,374

Reversal of provisions from prior years 2,285 37,538

Insurance claim recovery 29,218 290,759

Contractual penalties 886 49,588

Other sundry income - 51,874

Ps. 98,179 Ps. 450,567

Other expenses:

Inflation adjustment applied outstanding taxes Ps. ( 197,367) Ps. ( 19,562)

Loss on sale of fixed assets ( 818) -

Other sundry expenses ( 3,518) -

Ps. ( 201,703) Ps. ( 19,562)

y) Operating segments

Segment information is prepared based on information used by the Company in its decision-making process. The Com-pany’s main business segments are (i) investments in financial instruments, (ii) construction, operation and maintenance of highway concessions, (iii) remote toll collection system, (iv) equipment leasing, (v) water treatment plants, (vi) Panama hydroelectric plant, (vii) multimodal transportation terminals, (viii) correctional facilities, and (ix) other segments.

Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment.

3. New Accounting Pronouncements

At the date of the accompanying consolidated financial statements, the improvements and amendments to the stan-dards that are specified below have not yet become effective; however, the Company chose to adopt the following standard early as allowed under the amendments to IAS 27:

Amendments to IAS 27: Equity Method in Separate Financial Statements

The amendments will allow entities to use the equity method to account for investments in subsidiaries, joint ventures and as-sociates in their separate financial statements. Entities already applying IFRS and electing to change to the equity method in its separate financial statements will have to apply that change retrospectively. For first-time adopters of IFRS electing to use the equity method in its separate financial statements, they will be required to apply this method from the date of transition to IFRS. The amendments are effective for annual periods beginning on or after 1 January 2016, with early adoption permitted.

The Company chose to adopt the amendments to IAS 27, Separate Financial Statements, early, for the preparation of uncon-solidated financial statements that must be recognized retrospectively and therefore, the Company recognized such effects in the statement of financial position and statement of comprehensive income as at 31 December 2013 and 1 January 2013 (date of the adoption of this accounting standard).

The adoption of this accounting rule had no effect on the Company’s consolidated financial statements.

At the date of the report on these consolidated financial statements, these accounting standards are not yet effective and the Company has not opted to apply them early:

IFRS 9, Financial Instruments: Classification and Measurement

This standard introduces new requirements for classification and measurement, impairment, and hedge accounting. IFRS 9 is effective for annual periods beginning on or after 1 January 2018, with early application permitted. Retrospective application is required but comparative information is not compulsory. Application of previous versions of IFRS 9 (2009, 2010 and 2013) is permitted if the date of initial application is before 1 February 2016.

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IFRS 15, Revenue from Contracts with Customers

IFRS 15 was issued in May 2015 and establishes a new five-step model that will apply to revenue arising from contracts with customers. Under IFRS 15 revenue is recognized at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. The principles in IFRS 15 provide a more structured ap-proach to measuring and recognizing revenue.

The new revenue standard will supersede all current revenue recognition requirements under IFRS. Either a full or modified retrospective application is required for annual periods beginning on or after 1 January 2017 with early adoption permitted.

4. Cash and Cash Equivalents

As at 31 December

2015 2014

Cash in banks Ps. 870,919 Ps. 200,311

Short-term deposits 1,568,136 1,017,457

Ps. 2,439,055 Ps. 1,217,768

Restricted cash Ps. 5,046,377 Ps. 4,818,041

The Company and its subsidiaries operate through a number of different trusts through which they retain funds that are to be spent exclusively on the construction, operation, management, and maintenance of the highways under the Company’s con-cessions. As at 31 December 2015 and 2014, the amount of funds in these trusts is Ps. 5,046,377 and Ps. 4,818,041, respectively. The Company’s management estimates that these funds will be spent in the short-term.

5. Accounts Receivable, net

a) An analysis of this caption as at 31 December is as follows:

As at 31 December

2015 2014

Trade receivables Ps. 2,763,978 Ps. 1,316,204

Sundry debtors 102,224 70,634

2,866,202 1,386,838

Less: Allowance for doubtful accounts ( 37,121) ( 17,874)

Net Ps. 2,829,081 Ps. 1,368,964

Long-term notes receivable Ps. 407,146 Ps. 1,012,838

b) b) An analysis of movements in the allowance for doubtful accounts as at 31 December 2015 and 2014 is as follows:

2015 2014

Balance at beginning of the year Ps. ( 17,874) Ps. ( 16,746)

Increases in expenses ( 19,247) ( 1,128)

Balance at end of the year Ps. ( 37,121) Ps. ( 17,874)

c) c) An analysis of the aging of the Company’s accounts receivable as at 31 December 2015 and 2014 is as follows:

Total 1-30 days 31-60 days 61-90 days More than 90 days

As at 31 December 2015 Ps. 2,763,978 Ps. 1,193,659 Ps. 925,285 Ps. 374 Ps. 644,660

As at 31 December 2014 Ps. 1,316,204 Ps. 702,086 Ps. 602,169 Ps. 298 Ps. 11,651

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d) During 2015, the Company extended various loans totaling Ps. 298,200, which bear fixed interest and mature in 2044. Ac-crued interest receivable on these loans is Ps. 7,874. Also, in October 2015, Promotora IDEAL granted a loan of Ps. 99,900, which bears fixed interest and matures in November 2044. Accrued interest receivable on this loan is Ps. 1,172.

In November 2014, the Company granted Banco Nacional de Obras y Servicios Públicos, S.N.C. (Banobras) two loans totaling Ps. 651,888 and Ps. 352,826, which bear fixed interest and are denominated in Mexican investment units (unidades de inversion or UDIs) totaling 124,728 UDIs and 67,507 UDIs, respectively. These loans originally matured on 29 May 2026 but were repaid to the Company in April 2015. As at 31 December 2015 and 2014, accrued interest receivable on the loans was Ps. 23,920 and Ps. 8,124, respectively, which was also paid in full in April 2015. The value of the UDI as at 31 December 2014 was $ 5.2703 pesos per UDI.

6. Highways and Other Assets Under Concession

a) An analysis of highways and other assets under concession as at 31 December 2015 and 2014 is as follows:

Accumulated Net Work in Net

Concession Investment amortization investment process concession

2015:

Intangible assets

Highways Ps. 36,811,077 Ps. ( 6,683,833) Ps. 30,127,244 Ps. 8,529,151 Ps. 38,656,395

Multimodal transportation terminals

856,778 ( 181,168) 675,610 680,190 1,355,800

Toll collection equipment 245,684 ( 245,684) - - -

37,913,539 ( 7,110,685) 30,802,854 9,209,341 40,012,195

Financial assets related to concessions

Water treatment plants 324,101 - 324,101 6,598,804 6,922,905

Correctional facilities 6,128,477 - 6,128,477 8,988,315 15,116,792

6,452,578 - 6,452,578 15,587,119 22,039,697

Other assets related to concessions

Toluca-Atlacomulco Highway - - - 1,228,520 1,228,520

Concession enhancements 496,265 ( 50,872) 445,393 - 445,393

496,265 ( 50,872) 445,393 1,228,520 1,673,913

Ps. 44,862,382 Ps. ( 7,161,557) Ps. 37,700,825 Ps. 26,024,980 Ps. 63,725,805

Concession InvestmentAccumulated amortization

Net investment

Work in process

Net concession

2014:

Intangible assets

Highways Ps. 35,886,437 Ps. ( 5,650,009) Ps. 30,236,428 Ps. 5,784,716 Ps. 36,021,144

Multimodal transportation terminals 856,777 ( 148,158) 708,619 238,018 946,637

Toll collection equipment 245,684 ( 245,684) - - -

36,988,898 ( 6,043,851) 30,945,047 6,022,734 36,967,781

Financial assets related to concessions

Water treatment plants 342,990 - 342,990 6,182,856 6,525,846

Correctional facilities 6,044,494 - 6,044,494 7,400,548 13,445,042

6,387,484 - 6,387,484 13,583,404 19,970,888

Other assets related to concessions

Concession enhancements+ 495,647 ( 31,383) 464,264 618 464,882

495,647 ( 31,383) 464,264 618 464,882

Ps. 43,872,029 Ps. ( 6,075,234) Ps. 37,796,795 Ps. 19,606,756 Ps. 57,403,551

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Amortization expense related to highway concessions and other concessions for the years ended 31 December 2015 and 2014 was Ps. 1,086,323 and Ps. 967,507, respectively.

b) Highway concessions:

I. Chamapa–La Venta Highway and related Interlomas offshoot

Concesionaria de Vías Troncales, S.A. de C.V. obtained a concession for the operation, management and maintenance of the Chamapa-La Venta Highway and the highway’s Interlomas offshoot. This highway is 10.8 kilometers in length and has been fully operational since 1992. The concession will expire on 20 August 2052.

II. Tepic-Villa Unión Highway

In 2005, Concesionaria de Carreteras, Autopistas y Libramientos de la República Mexicana, S.A. de C.V. obtained a 30-year con-cession to build, operate, manage and maintain sections of the Tepic-Mazatlán Highway (the Tepic-Villa Unión concession). This concession title will expire on 6 April 2035.

III. Toluca Northeast Bypass

In December 2003, the government of the State of Mexico granted CFC Concesiones, S.A. de C.V. a 30-year concession title for the construction, operation, management and maintenance of the so-called Toluca Northeast Bypass.

In February 2009, a third amendment was made to the concession title, whereby the government of the State of Mexico extended the term of the concession for an additional 20 years. As a result, this concession will expire on 10 December 2059.

IV. Tijuana-Tecate Highway and Tecate Bypass

The Federal government granted Autopista Tijuana Mexicali, S.A. de C.V. a concession to operate and maintain a subsection of the Tijuana-Tecate section of the Tijuana-Mexicali highway in the State of Baja California Norte. The right to operate this conces-sion was originally to expire on 28 November 2019. However, on 14 November 2012, the Company obtained authorization from the Ministry of Communications and Transportation (MCT) to extend the concession period for this highway until November 2049.

V. Arco Norte Bypass of Mexico City

In 2005, Autopista Arco Norte, S.A. de C.V. obtained a 30-year concession to build, operate and maintain the so-called North-ern Mexico City Bypass. The right to exploit this concession was originally to expire on 21 December 2035. However, in August 2013, the Company obtained authorization from the MCT to extend the concession period for this highway for an additional 30 years, which that means the concession will now expire in December 2065.

In October 2015, the MCT acknowledged partial completion of the construction work of the Northern Mexico City Bypass from km 110 to km 116, which corresponds to the expansion to four lanes of the second stretch of the highway along the Atlaco-mulco / Mexico-Querétaro junction.

VI. North Pacific Highway

In October 2009, the MCT granted the Company a 30-year concession to build, operate and maintain the Culiacan Southern Bypass and the Mazatlan Bypass of the North Pacific Highway and their junction branches, as well as the high-performance Mazatlan-Culiacan highway and the modernization work to be done for this highway. This concession expires in 2039.

In January 2015, the MCT acknowledged completion of the construction work for highway section I, type A4 Mazatlan bypass 31 kilometers in length, starting at 600-700 km, “Culiacán Toll Highway Junction”, and ending at 27+038 km, “Caler-itas Junction”.

VII. Concession of Distribuidor Vial San Jerónimo-Muyuguarda (Muyuguarda)

In December 2010, the Mexico City government awarded a concession to design, build, exploit, operate, and maintain a 15.5 km section of the elevated portion of the Periférico Sur expressway to Concesionaria Distribuidor Vial San Jerónimo-Muyuguar-da, S.A. de C.V. (Muyuguarda). The concession is for a term of 30 years as of the date that the expressway is authorized for operations.

Construction of the elevated freeway began in April 2011 and in September, sections I and II of the freeway were completed and opened. Section III was completed in early 2013 and immediately started up operations.

In 2015, Promotora IDEAL made capital contributions to Muyuguarda totaling Ps. 543,912 (Ps. 246,319 in 2014). In 2014, Pro-motora IDEAL acquired 30% of the non-controlling interests in Muyuguarda for which it paid Ps. 854,902. The effects of these acquisitions were recognized in equity since the transaction was carried out between common shareholders.

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VIII. Concesionaria Guadalajara-Tepic (CGT)

In November 2011, the MCT granted Concesionaria Autopista Guadalajara-Tepic, S.A. de C.V. a 30-year concession to build, operate and maintain the Guadalajara southern bypass, the Tepic bypass, and the high-performance Guadalajara-Tepic highway, which will be modernized. This concession expires in 2041.

CGT expects to invest more than Ps. 16,000 million in this project, including the initial consideration of Ps. 4,300 million paid by IDEAL.

Construction of this highway began in April 2011 and is scheduled to be fully completed by June 2017.

IX. Mitla-Tehuantepec Highway

In May 2010, the MCT granted Autovía Mitla-Tehuantepec, S.A. de C.V. (in which IDEAL holds a 40% stake and which is also owned by Controladora de Operaciones de Infraestructura, S.A. de C.V.) a concession for the construction, operation, and maintenance of the Mitla-Tehuantepec highway in Oaxaca that expires in May 2030.

In 2015, Promotora IDEAL made capital contributions to Autovía Mitla-Tehuantepec, S.A. de C.V. totaling Ps. 382,451 (Ps. 282,952 in 2014).

X. Toluca-Atlacomulco Highway

Promotora Toluca-Atlacomulco, S.A. de C.V. (PTA) became a trust member of Trust 1967 Tramo Carretero Toluca Atlacomulco (Trust 1967) in April 2015 and as a trust member, it makes contributions to Trust 1967 that are used to execute the modernization work for the Toluca Atlacomulco highway, and to finance the rights of way and environmental costs, and any required addi-tional work and in general, for any other purpose related to the execution of the project.

PTA has the right to recover all of the contributions that it makes to the trust, including any returns earned on the contributions, which should be at least equal to the Rate of Return to which it is entitled (in accordance with Exhibit 5 of the Concession Title).

If the related project gross revenue exceeds the 25% base amount determined considering the normal highway traffic volume and revenue survey results (Exhibit 1 of the Concession Title), the excess revenue will be distributed to the Company and to the state government, without this distribution affecting the ability of the trust member to recover its risk capital investment.

PTA shall not be held accountable for any liabilities, contingencies, claims and/or lawsuits of any kind, including those of an environmental, labor and tax nature, that arose before the contract was signed by the parties, nor shall the trust member’s ability to recover its risk capital be inhibited due to any of the aforementioned reasons.

The contributions made to Trust 1967 are classified as financial assets and as at 31 December 2015 they total Ps. 1,228,520, which includes an unrealized gain of Ps. 48,689.

XI. Commitments from the operation of highways

i) During the term of each concession, the licensees are required to make all needed repairs to the sections of the highway under concession, and they have the right to receive all revenue generated from the operation of the highways. This revenue is expected to be high enough to allow the licensees to recover their investments and their operating, financing and mainte-nance costs, to cover their borrowing costs incurred for each project, and to earn a return on their investment. Upon expiration of the concessions, the right to operate the highways and receive the toll revenue shall revert back to the government.

ii) During the term of each concession, the Licensees are required to pay the Federal government and where applicable, any state governments, a consideration for the operation of the highways under each concession, in the form of a percentage of the annual toll revenue, excluding the related value added tax, of each highway. For the years ended 31 December 2015 and 2014, the toll percentages that were paid to the government for currently open highways are as follows:

Amount of consideration % of theHighway 2015 2014 consideration

Chamapa - La Venta Ps. 10,045 Ps. 9,079 1.0%

Tepic- Villa Unión 5,458 4,748 0.5%

Tijuana Tecate Highway 1,452 1,449 0.5%

Arco Norte Bypass 12,522 11,070 0.5%

Toluca Northeast Bypass 2,078 1,874 0.5%

Pacífico Norte Bypass 3,601 2,891 0.5%

Guadalajara-Tepic Highway 6,587 5,996 0.5%

Distribuidor Vial San Jerónimo-Muyuguarda 2,342 1,804 1.0%

Ps. 44,085 Ps. 38,911

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iii) Trusts:

Trusts under concession agreements

Under each respective concession title, the licensees are required to create an administrative and source of payment trust to receive and manage all of the revenue of each highway under concession, as well as the risk capital, loans and other funding associated with the concession. The licensees are the trustors of these trust funds, and the trust created technical committees to manage the trusts and the net assets of each trust.

Most of the trusts through which licensees operate are created for terms of two years beyond the term of each concession, since this is the time in which the licensees are expected to repay any outstanding loans they may have upon expiration of the related concession.

The trust companies that act as trustees charge a trust management commission either on a monthly or annual basis, as stip-ulated under the related agreements.

Master trust

In June 2008, as a result of the authorization of the program for the issuance of fiduciary structured notes (“certificados bursátiles”) of up to Ps. 50,000,000 or the equivalent in UDIs, the highway licensees Concesionaria de Vías Troncales, S.A. de C.V.; CFC Concesiones, S.A. de C.V.; Concesionaria de Carreteras, Autopistas y Libramientos de la República Mexicana; and Autopista Tijuana Mexicali, S.A. de C.V. entered into a master underwriting, management and source of payment master trust agreement. Under this agreement, the highway licensees cede their toll collection rights related to the use of the highways under concession to the new trust.

The underwriting trust’s net assets consists of: i) the toll collection rights related to the operation of the federal, state and mu-nicipal toll highways, freeways, bypasses, roads and bridges under concession to the trustors; ii) all future and current revenue and cash flows from toll collections; iii) the trustors’ rights to receive any additional amounts; and iv) any other assets or rights that in given time may be placed in the underwriting trust in accordance with the terms of its creation.

c) Multimodal transportation terminals

I. Ciudad Azteca Multimodal Transportation Station

Construcción, Conservación y Mantenimiento Urbano, S.A. de C.V. (COMURSA) is executing the so-called “Ciudad Azteca” proj-ect, which consists of the construction of a multimodal transportation station in Ecatepec, State of Mexico. The station has a commercial area, a hospital, a bus terminal, a parking lot and terminal services. In December 2012, construction of the project concluded and the station began operating in January 2013. This concession will expire on 4 August 2036.

II. El Rosario Multimodal Transfer Center (Cetram El Rosario)

DMI is the majority partner of the “CETRAM EL ROSARIO” project. Cetram El Rosario is a multimodal transfer center that will join public transportation or transfer areas together with commercial space, or potential commercial areas, plus recreational and service areas.

The concession is for a term of 30 years that began in July 2009 and will conclude on 1 July 2039. Construction began in March 2011 and the transfer center started operating in January 2013.

III. Cuatro Caminos Multimodal Transfer Station (ETRAM Cuatro Caminos)

On 23 August 2013, Concesionaria ETRAM Cuatro Caminos, S.A. de C.V. (CECC) was incorporated. CECC holds the concession for the modernization of the ETRAM Cuatro Caminos multimodal transfer station, with this project covering the construction, renovation, operation and maintenance of ETRAM Cuatro Caminos, as well as the creation of an investment project for the station. In general, these services consist of managing the related public ground transportation network and overseeing user safety measures and procedures, installing basic infrastructure, and operating public parking lots, restrooms and advertising space. The services also include the construction and management of commercial space inside the station and maintenance, cleaning and security services, and in general, the management and operation of ETRAM Cuatro Caminos located in the municipality of Naucalpan de Juárez in the State of Mexico.

The concession is for a term of 30 years that began in August 2013 and will conclude on 29 August 2043. The station is still being built and construction is slated to conclude during the last six months of 2017.

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d) Toll collection equipment

I+D México, S.A. de C.V. (I+D)

a) On 7 August 2014, I+D entered into an interoperability contract with Mexico’s other remote toll collection system compa-nies, CAPUFE and the MCT. Under this contract, I+D users may now use their I+D tags in all the country’s remote toll collection systems, including those not managed by I+D. The contract establishes payment of a commission to cover the administrative and operating expenses incurred by other operators as a result of processing I+D tag charges in their own tag systems. This contract expires on 31 July 2018.

As stipulated in the respective multiannual contract, I+D delivered all of the equipment and accessories related to the con-tract to the concessionaires of each subsection of the highway.

In addition to its contract with CAPUFE, I+D provides third party and related party payment management services.

Tag Pase, S.A. de C.V.

Tag Pase, S.A. de C.V. was incorporated in May 2012 and is primarily engaged in developing, acquiring, selling, using, manag-ing, processing, licensing, and operating all kinds of software and other technologies, including automated payment systems, collection systems, toll collection control and collection systems, pre-payment mechanisms and systems, mechanisms and systems for pre-payment devices, electronic payment systems, hardware, and computer programs.

e) Concession financial assets, water treatment plant, and comprehensive waste water treatment plants

I. Ideal Saneamiento de Saltillo, S.A. de C.V. (Ideal Saltillo)

Ideal Saneamiento de Saltillo, S.A. de C.V. (Ideal Saltillo) is the holder of the contractual rights and obligations under a 20-year service contract entered into with the Municipality of Saltillo in the state of Coahuila to build and operate the Principal Waste Water Treatment Plant and the Gran Bosque Urbano Waste Water Treatment Plant of Saltillo. This contract also covers the re-moval and final disposal of the solid waste and sludge generated by the plants, and execution of the executive project and construction of the related treatment stations. The plants have been operating since April 2008.

II. Comprehensive waste water treatment plant in the Municipality of Atotonilco

In December 2009, the Mexican Water Commission (CONAGUA) awarded a concession for the provision of water treatment ser-vices in the Valley of Mexico to the consortium Aguas Tratadas del Valle de México, S.A. de C.V. (ATVM), in which Promotora holds a 51% equity interest. In January 2010, ATVM, a special purpose entity created by the consortium, and CONAGUA entered into a 25-year service contract for the executive planning, construction, electromechanical outfitting, testing, operation and main-tenance of the waste water treatment plant, as well as the removal and disposal of the solid waste and sludge generated by the plant and the cogeneration of electricity. The total estimated investment is Ps. 10,022 million (Ps. 9,389 million for construction costs, plus Ps. 633 million for other project costs). The project is being self-funded by the consortium, and through financing pro-vided to the consortium by Mexico’s National Infrastructure Development Fund (FONADIN) and a bank loan contracted with Ba-nobras (see Note 18). The plant is slated to start up operations in 2016. In 2015, the Company recognized construction revenue of Ps. 594,882 from this concession.

III. Caracol waste water treatment plant in Ecatepec

In September 2012, CONAGUA awarded a concession to the consortium Acciona Agua, in which Promotora holds a 51% eq-uity interest, to provide wastewater treatment services in the Valley of Mexico. This project consists of the executive planning, construction, outfitting, operation and maintenance of the Caracol waste water treatment plant located in the municipality of Ecatepec, State of Mexico. This project is to be executed as a fixed-cost multi-year project funded by public money and through partially recoverable private financing sources. However, on 7 May 2013, CONAGUA reversed the resolution dated 11 September 2012 through which it had awarded the concession to the consortium and opened a new bidding process. As a result of these developments, and after re-evaluating the proposals it received for the projects, the CONAGUA declared null and void the national public call for bid No. LAPP-016B00001-12.

f) Correctional facilities

Makobil

In December 2010, through its decentralized administrative body called Prevención y Readaptación Social de la Secretaría de Seguridad Pública (Crime Prevention and Social Rehabilitation Department of the Ministry of Public Safety and Security), the Ministry of Public Safety and Security (SSP, Spanish acronym) awarded Makobil a long-term service contract to operate

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the Federal prison located in the municipality of Villa Comaltitlán in the State of Chiapas for a 20-year term as of the prison’s operational start-up date. The Company acquired its 100% holding in Makobil, and Makobil was awarded the concession, in September 2013. The prison started up operations on 1 December 2013.

CRS Morelos

In December 2010, through its decentralized administrative body called Prevención y Readaptación Social de la Secretaría de Seguridad Pública (Crime Prevention and Social Rehabilitation Department of the Ministry of Public Safety and Security), the SSP awarded CRS Morelos a long-term service contract to operate the Federal prison located in the municipality of Coatlán del Río in the State of Morelos for a 20-year term as of the prison’s operational start-up date. The Company acquired its 100% holding in CRS Morelos, and CRS Morelos was awarded the concession, in June 2013. At the date of the audit report on these consolidated financial statements, construction of the prison is currently underway and the prison is slated to start up opera-tions in June 2015. The correctional facility started operating on 21 May 2015.

g) The key information underlying the calculation of capitalized borrowing costs is as follows:

2015 2014

Amount invested to acquire qualifying assets Ps. 5,737,155 Ps. 3,996,849

Capitalized interest 937,057 721,271

Capitalization rate 16.33% 18.05%

Capitalized interest will be amortized over the remaining term of the concessions.

h) An analysis of highways and other assets under concession, net as at 31 December 2015 and 2014 is as follows:

Cost Highways

Multimodal transportation

terminalsToll collection

equipmentTotal intangi-

ble assets Correctional

facilitiesWater treatment

plants Toluca-Atlacomul-

co Highway

As at 31 December 2013 Ps. 38,039,956 Ps. 1,493,305 Ps. 258,183 Ps. 39,791,444 Ps. 12,394,601 Ps. 5,553,839 Ps. -

Additions 3,631,197 97,755 3,728,952 1,050,441 989,167 -

Retirements ( 12,499) ( 12,499) ( 17,160) -

As at 31 December 2014 41,671,153 1,591,060 245,684 43,507,897 13,445,042 6,525,846 -

Additions 3,669,075 442,502 4,111,577 1,671,750 397,059 1,228,520

Retirements ( 329) ( 329)

As at 31 December 2015 Ps. 45,340,228 Ps. 2,033,233 Ps. 245,684 Ps. 47,619,145 Ps. 15,116,792 Ps. 6,922,905 Ps. 1,228,520

Amortization

As at 31 December 2013 Ps. ( 4,732,068) Ps. ( 129,975) Ps. ( 245,684) Ps. ( 5,107,727) Ps. - Ps. - Ps. -

Depreciation for the year ( 917,941) ( 49,566) - ( 967,507) - - -

Retirements - - - - - - -

As at 31 December 2014 ( 5,650,009) ( 179,541) ( 245,684) ( 6,075,234) - - -

Depreciation for the year ( 1,033,824) ( 52,499) - ( 1,086,323) - - -

Retirements - - - - - - -

As at 31 December 2015 Ps. ( 6,683,833) Ps. ( 232,040) Ps. (245,684) Ps. ( 7,161,557) $ - Ps. - Ps. -

Carrying amount

As at 31 December 2015 Ps. 38,656,395 Ps. 1,801,193 Ps. - Ps. 40,457,588 Ps. 15,116,792 Ps. 6,922,905 Ps. 1,228,520

As at 31 December 2014 Ps. 36,021,144 $ 1,411,519 Ps. - Ps. 37,432,663 Ps. 13,445,042 Ps. 6,525,846 Ps. -

As at 31 December 2013 Ps. 33,307,888 $ 1,363,330 Ps. 12,499 Ps. 34,683,717 Ps. 12,394,601 Ps. 5,553,839 Ps. -

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7. Hydroelectric Plant and Equipment

Hydroelectric power plants - Panama

a) Ideal Panamá, S.A. obtained from the National Public Service Authority of Panama two concessions to produce, transfer and sell electric power. These concessions are for periods of 50 years commencing in 2007.

These concessions were granted as part of the so-called Bajo de Mina Hydroelectric and Baitún Hydroelectric projects in the Chiriquí province of Panama.

The total net investment made in these projects as at 31 December 2015 and 2014 was Ps. 11,011,208 and Ps. 9,837,298, respectively. As at 31 December 2014, this investment includes Ps. 68,558 corresponding to material inventories for the construction and maintenance of the plants. These materials were sold by IDEAL in 2015.

Depreciation expense in respect of the plants was Ps. 418,511 in 2015 and Ps. 397,438 in 2014.

b) Key information underlying the calculation of capitalized borrowing costs is as follows:

2015 2014

Amount invested to acquire qualifying assets Ps. 14,098 Ps. 145,648

Capitalized interest - 3,923

Capitalization rate - 2.69%

Borrowing costs incurred on qualifying assets will be amortized over the term of the concession.

c) An analysis of the Hydroelectric plant and equipment caption as at 31 December 2015 and 2014 is as follows:

Hydroelectric plant and equipment

Investment

As at 31 December 2014 Ps. 10,669,915

Additions 14,098

Impairment -

Translation adjustment 1,762,182

As at 31 December 2015 Ps. 12,446,195

Hydroelectric plant and equipment

Accumulated depreciation

As at 31 December 2014 Ps. ( 832,617)

Additions ( 418,511)

Translation adjustment ( 183,859)

As at 31 December 2015 Ps. ( 1,434,987)

Carrying amount

As at 31 December 2015 Ps. 11,011,208

As at 31 December 2014 Ps. 9,837,298

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8. Other Assets, net

An analysis of other assets as at 31 December 2015 and 2014 is as follows:

2015 2014

Current portion:

Recoverable taxes Ps. 2,426,148 Ps. 2,722,452

Payment for assignment of rights 13,607 13,607

Security deposits 11,646 9,418

Prepaid interest 21,549 43,097

Other 181,444 114,501

Ps. 2,654,394 Ps. 2,903,075

Non-current portion:

Payment for assignment of rights Ps. 347,948 Ps. 361,555

Long-term security deposits 100,000 99,990

Prepaid interest - 21,549

Unamortized expenses 26,422 19,403

Other 415 497

Ps. 474,785 Ps. 502,994

Amortization expense for the years ended 31 December 2015 and 2014 was Ps. 148 and Ps. 338, respectively.

9. Property, Furniture and Equipment, net

a) An analysis of property, furniture and equipment as at 31 December 2015 and 2014 is as follows:

As at 31 December

2015 2014

Property $ 253,897 $ 162,063

Computer equipment 234,993 224,243

Plant machinery and equipment 110,727 82,238

Transportation equipment 166,570 129,854

Furniture and equipment 33,210 30,384

Peripheral remote toll collection system 26,424 13,153

825,821 641,935

Less:

Accumulated depreciation ( 432,892) ( 379,546)

Provision for impairment ( 1,040) ( 50)

391,889 262,339

Work in process 56,794 125,875

Property, furniture and equipment, net $ 448,683 $ 388,214

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b) An analysis of property, furniture and equipment, net as at 31 December 2015 and 2014 is as follows:

Cost PropertyComputer equipment

Plant ma-chinery and equipment

Trans-portation

equipment

Furniture and

equipment

Peripheral remote toll collection

systemWork in

process Total

Investment

As at 31 December 2013 Ps. 121,003 Ps. 207,445 Ps. 99,923 Ps. 106,820 Ps. 27,174 Ps. 13,153 Ps. 89,863 Ps. 665,381

Additions 41,060 19,595 7,343 28,963 2,894 - 48,271 148,126

Retirements - ( 3,128) ( 29,495) ( 12,389) ( 59) - ( 12,259) ( 57,330)

Translation adjustment - 331 4,467 6,460 375 - - 11,633

As at 31 December 2014 162,063 224,243 82,238 129,854 30,384 13,153 125,875 767,810

Additions 91,944 13,911 27,471 50,543 2,535 14,481 19,686 220,571

Retirements ( 110) ( 4,083) - ( 20,428) - ( 1,210) ( 88,767) ( 114,598)

Translation adjustment - 922 1,018 6,601 291 - - 8,832


Depreciation

As at 31 December 2013 Ps. 16,492 Ps. 194,985 Ps. 49,735 Ps. 56,013 Ps. 11,017 Ps. 10,116 Ps. - Ps. 338,358

Depreciation for the year 9,781 12,865 11,392 28,585 4,004 231 - 66,858

Retirements ( 231) ( 29,227) ( 6,388) ( 12) - - ( 35,858)

Transfer to current assets held for sale - - - - - - -

Translation adjustment 322 6,071 3,644 151 - - 10,188

As at 31 December 2014 26,273 207,941 37,971 81,854 15,160 10,347 - 379,546

Depreciation for the year 13,020 8,528 12,803 25,779 2,287 7,094 - 69,511

Retirements - ( 1,848) ( 78) ( 17,649) - ( 179) - ( 19,754)

Transfer to current assets held for sale - - ( 264) - - - - ( 264)

Translation adjustment - 487 803 2,334 229 - - 3,853

As at 31 December 2015 Ps. 39,293 Ps. 215,108 Ps. 51,235 Ps. 92,318 Ps. 17,676 Ps. 17,262 Ps. - Ps. 432,892

Provision for impairment

As at 31 December 2013 - - 490 7 - - - 497

Increase for the year - - 21,907 556 - - - 22,463

Transfer to current assets held for sale - - ( 22,356) ( 554) - - - ( 22,910)

As at 31 December 2014 - - 41 9 - - - 50

Increase for the year - - 396 - - - - 396

Transfer to current assets held for sale - - 594 - - - - 594

As at 31 December 2015 Ps. - Ps. - Ps. 1,031 Ps. 9 Ps. - Ps. - Ps. - Ps. 1,040

Carrying amount




c) Current assets held for sale

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An analysis of the carrying amount of assets held for sale is as follows:

2015 2014

Plant machinery and equipment Ps. 98,017 Ps. 154,761

Transportation equipment 22,465 33,970

120,482 188,731

Less:

Accumulated depreciation ( 73,379) ( 105,007)

47,103 83,724

Provision for impairment ( 25,954) ( 28,933)

Available-for-sale assets, net Ps. 21,149 Ps. 54,791

10. Licenses and Software

An analysis of the Company’s licenses and software as at 31 December 2015 and 2014 is as follows:

2015

Balance at beginning of year Purchases

Amortization for the year

Balance at end of year

Licenses and software Ps. 357,372 $ - Ps. - Ps. 357,372

Accumulated amortization ( 338,103) - ( 1,413) ( 339,516)

Net Ps. 19,269 $ - Ps.( 1,413) Ps. 17,856

2014

Licenses and software Ps. 357,337 Ps. 35 Ps. - Ps. 357,372

Accumulated amortization ( 296,217) - ( 41,886) ( 338,103)

Net Ps. 61,120 Ps. 35 Ps.( 41,886) Ps. 19,269

11. Equity Investment In Associates and Business Combinations

a) An analysis of this caption is as follows:

% equity interest 2015 2014

Associates:

Hospital Infantil Privado de Acapulco, S.A. de C.V. y subsidiarias 50.00 Ps. ( 26,564) Ps. ( 26,564)

Autovía Mitla Tehuantepec, S.A. de C.V. 40.00 894,771 441,797

Operadora Carretera de Mitla, S.A. de C.V. 40.00 9,253 2,927

Ps. 877,460 Ps. 418,160

Discontinued operations due to sale of Star Médica, S.A. de C.V. 49.99 Ps. - Ps. 441,061

b) A summary of the movements in the Company’s equity investment in associates as at 31 December 2015 and 2014 is as

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As at 31 December

2014Capital

contributionsShare of profit

of the year

Share of other compo-nents of equity

As at 31 De-cember 2015

Hospital Infantil Privado de Acapulco, S.A. de C.V. and subsidiaries Ps. ( 26,564) Ps. - Ps. - Ps. - Ps. ( 26,564)

Autovía Mitla Tehuantepec, S.A. de C.V. 441,797 382,503 42,700 27,771 894,771

Operadora Carretera de Mitla, S.A. de C.V. 2,927 - 6,326 - 9,253

Ps. 418,160 Ps. 382,503 Ps. 49,026 Ps. 27,771 Ps. 877,460

Balance as at 31 December

2013Capital

contributionsShare of loss of the year


Balance as at 31 December

2014

Hospital Infantil Privado de Acapulco, S.A. de C.V. and subsidiaries Ps. ( 26,564) Ps. - Ps. - Ps. - Ps. ( 26,564)

Autovía Mitla Tehuantepec, S.A. de C.V. 238,849 282,952 ( 72,099) ( 7,905) 441,797

Operadora Carretera de Mitla, S.A. de C.V. 76 - 2,851 - 2,927

Ps. 212,361 Ps. 282,952 Ps. ( 69,248) Ps. ( 7,905) Ps. 418,160

Highlights of the financial information of IDEAL’s associates as at and for the years ended 31 December 2015 and 2014, as determined using the equity method, are as follows:

Star Médica, S.A. de C.V.

and subsidiaries

Autovía Mitla Tehuantepec, S.A. de C.V.

2014 2015 2014

Current assets Ps. 278,950 Ps. 612,762 Ps. 460,960

Non-current assets 1,199,843 7,614,259 4,549,819

Total assets Ps. 1,478,793 Ps. 8,227,021 Ps. 5,010,779

Current liabilities Ps. 595,636 Ps. 339,455 Ps. 450,268

Non-current liabilities 263,148 5,650,638 3,456,019

Total liabilities 858,784 5,990,093 3,906,287

Total equity 620,009 2,236,928 1,104,492

Total liabilities and equity Ps. 1,478,793 Ps. 8,227,021 Ps. 5,010,779

Total income Ps. 2,289,990 Ps. 850,517 Ps. 431,268

Total costs and expenses 2,208,497 698,378 611,516

Net gain/(loss) Ps. 81,493 Ps. 152,139 Ps. ( 180,248)

c) Discontinued Operations

In November 2015, the Company sold its equity investment in Star Médica, S.A. de C.V. and subsidiaries for a sale price of Ps. 1,500,000. IDEAL’s capital gain on the sale was Ps. 1,044,663, which includes the effect of a reclassification of other compre-hensive income to profit or loss in the amount of Ps. 18,267, which is shown in the consolidated statement of comprehensive income as a reclassification of other comprehensive income due to sale of associated company.

A summary of the movements in the Company’s equity investment in Star Médica, S.A. de C.V. as at 31 December 2015 and

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2014 is as follows:

As at 31 December

2014

Capital contribu-tions (dividends

received)Share of profit

of the year


Retirements due to sale

As at 31 December

2015

Star Médica, S.A. de C.V. and subsidiaries Ps. 441,061 Ps. ( 15,000) Ps. 47,543 Ps. - Ps. ( 473,604) Ps. -

As at 31 December

2013

Capital contribu-tions (dividends

received)Share of profit

of the year


As at 31 December

2014

Star Médica, S.A. de C.V. and subsidiaries Ps. 415,315 Ps. ( 15,000) Ps. 40,746 Ps. - Ps. 441,061

Investments in 2015

The Company following subsidiaries were incorporated in 2015.

Promotora Toluca-Atlacomulco, S.A. de C.V.

In April 2015, Promotora IDEAL made capital contributions totaling Ps. Ps.1,179,880 to Promotora Toluca Atlacomulco, S.A. de C.V. and as a result, it holds a 99.99% stake in this subsidiary as at 31 December 2015.

Servicios de Personal para Operación Proyecto Atlacomulco-Toluca, S.A. de C.V.

In April 2015, Promotora IDEAL made capital contributions totaling Ps. 50 to Servicios de Personal para Operación Proyecto Atlacomulco-Toluca, S.A. de C.V. and as a result, it holds a 99.99% stake in this subsidiary as at 31 December 2015.

II. Investments in 2014

In 2014, through its subsidiaries, the Company acquired non-controlling interests in the following companies:

a) Cuatro Caminos Multimodal Transfer Station (ETRAM Cuatro Caminos)

In December 2014, the Company acquired 10% of the non-controlling interests of ETRAM Cuatro Caminos and as a result, the Company holds an 80% stake in this subsidiary as at 31 December 2014.

b_ Urbana Sur Highway (San Jerónimo – Muyuguarda)

In April 2014, the Company acquired the last 30% of the non-controlling shares of Concesionaria Distribuidor Vial San Jerónimo-Mu-yuguarda, S.A. de C.V. and as a result, the Company holds a 100% stake in this subsidiary as at 31 December 2014.

c) Aguas Tratadas del Valle de México, S.A. de C.V. (ATVM)

In November 2014, the Company acquired 10.20% of the non-controlling interests of ATVM and as a result, the Company holds a 51% stake in this subsidiary as at 31 December 2014.

The cumulative effect of the acquisitions of non-controlling interests in the aforementioned companies was recognized as an other comprehensive loss item of Ps. 21,370.

d) Desarrolladora Mexicana de Infraestructura Social, S.A. de C.V. (DMI)

In December 2014, the Company made capital contributions of Ps. 293,685 to DMI and as a result, it holds an 80% stake in this subsidiary as at 31 December 2014.

e) As at 31 December 2015 and 2014, goodwill was Ps. 1,434,030 and Ps. 1,405,362, respectively.

f) Operating and maintenance service fee collection rights

As at 31 December 2015 and 2014, the Company has recognized an intangible asset that was identified as a result of the purchase price method applied to the Makobil and CRS Morelos acquisitions that was conducted by independent specialists under the su-pervision of Company management. This intangible asset is represented by the Company’s operating and maintenance service fee collection rights related to correctional facilities. An analysis is as follows:

2015 2014

Operating and maintenance service fee collection rights Ps. 1,240,144 Ps. 1,240,144

Accumulated amortization ( 75,391) ( 27,389)

Ps. 1,164,753 Ps. 1,212,755

These collection rights are amortized over the life of the concession and amortization totaled Ps. 48,002 and Ps. 27,389 in 2015

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and 2014, respectively.

12. Derivative Financial Instruments

To mitigate the risk of future increases in interest rates associated with the Company’s long-term debt as at 31 December 2015 totaling Ps. 68,453,627 and Ps. 61,297,729 in 2014, the Company has contracted interest rate swaps in over-the-counter transac-tions carried out with the financial institutions from which the Company has obtained loans. These swaps require no collateral or pledged securities, except for the future value of collection rights. The weighted average interest rate as at 31 December 2015 was 6.13% (5.80% in 2014).

As at 31 December 2015 and 2014, an analysis of the Company’s financial instruments is as follows:

Millions of Mexican pesos as at 31 December

2015 2014

Instrument Notional amount

Fair value

Notional amount

Fair value

Liabilities:

USD-peso buy forwards US$ 35 Ps. ( 1,026) US$ 35 Ps. ( 1,461)

Interest rate swap hedges in UDIs, Mexican pesos 1,309 ( 190) 1,352 3

Interest rate swaps in Mexican pesos, net 19,900 242 26,550 ( 740)

Interest rate swaps in U.S. dollars, net US$ 550 ( 712) US$ 550 ( 164)

Interest rate swap hedges in Mexican pesos 26,964 ( 2,847) 27,314 ( 3,289)

Total liabilities Ps. ( 4,533) Ps.( 5,651)

i) The unrealized gain/(loss) on the aforementioned derivative financial instruments for the years ended 31 December 2015 and 2014 was Ps. 1,097 and Ps. (1,822) million, respectively, and was included in the statement of comprehensive income as part of the caption Net unrealized gain/(loss) on derivative financial instruments and other finance income and expenses, net.

For the Company’s derivative financial instruments that qualify as hedges, the unrealized loss recognized in equity was Ps. (2,009) and Ps. (1,995) million as at 31 December 2015 and 2014, respectively, and corresponds to the loss that would be rec-ognized in profit or loss for the hedged interest expense. In 2015, the ineffective portion of the Company’s hedges recognized in profit or loss was Ps. 79.8 (Ps. 131.6 million in 2014).

ii) As at 31 December 2015 and 2014, the derivative financial instruments held by the Company are as follows:

U.S. dollar – Mexican peso forwards

The Company’s had a net USD-MXN forward position with a total notional amount of USD 35 million as at 31 December 2015 and 2014, and whose fair values are Ps. 1,026 million and Ps. (1,461) million, respectively. For the years ended 31 December 2015 and 2014, the Company recognized a net unrealized loss of Ps. 435 million and a net unrealized gain of Ps. 168 million, respectively, on these forwards as a net financing cost item under the caption Net unrealized (loss)/gain on derivative financial instruments and other finance income and expenses, and in 2015 and 2014 it recognized a realized foreign exchange loss of Ps. 432 and Ps. 172 million, respectively on its buy forwards. The Company’s USD-MXN forwards mature in 2016.

Interest rate swaps in Mexican pesos

As at 31 December 2015 and 2014, the Company maintained interest rate swap contracts for a total notional amount of Ps. 19,900 (Ps. 26,550 million in 2014). These swaps mature between 2018 and 2037 and under the contracts IDEAL exchanges a fixed interest rate for a floating rate equal to the 28-day Mexican Weighted Interbank Rate (TIIE). For the years ended 31 De-cember 2015 and 2014, the Company recognized a net unrealized gain on these swaps of Ps. 1,074 million and a net unrealized loss of Ps. 918 million, respectively, as a net financing cost item presented as part of net unrealized gain/(loss) on derivative financial instruments and other finance income and expenses. For the years ended 31 December 2015 and 2014, the Compa-ny also recognized interest expense on these swaps of Ps. 1,070 million and Ps. 676 million, respectively, as a net financing cost item. In addition, in 2015, the Company replaced some of its Mexican peso denominated interest-rate swaps, recognizing the resulting loss of Ps. 554 (Ps. 378 million in 2014) in net financing cost.

Hedging interest rate swaps

As at 31 December 2015, the Company has interest rate swaps and cross currency swaps to hedge the interest rate risk associ-ated with its issued fiduciary structured notes (“certificados bursátiles”) and bank debt. As at 31 December 2015, these swaps hedge liabilities denominated in Mexican pesos and UDIs of Ps. 26,964 million and Ps. 1,309 million, respectively (Ps. 27,314 mil-lion and Ps. 1,352 million, respectively, as at 31 December 2014).

In 2015, the Company recognized net interest expense on these transactions of Ps. 1,373 million (Ps. 1,305 million in 2014) in the

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statement of comprehensive income.

Interest rate swaps in U.S. dollars

As at 31 December 2015 and 2014, the Company has contracted interest rate swaps for a total notional amount of USD 550 million. These swaps mature between 2016 and 2041 and under the swap contracts, the Company’s exchanges a fixed interest rate for a floating rate equal to the LIBOR plus a spread.

In 2015 and 2014, the swaps gave rise to a net unrealized loss of Ps. (492) million and Ps. (940) million, respectively, which is presented in the statement of comprehensive income as part of the net unrealized gain/(loss) on derivative financial instruments and as other finance income and expenses. In the statements of comprehensive in-come for the years ended 31 December 2015 and 2014, the Company recognized net interest expense on these transactions of Ps. 236 million and Ps. 199 million, respectively.

iii) Collateral

To guarantee the USD 250 million swap contract entered into on 30 June 2011, the Company opened a line of credit with HSBC for up to USD 100 million, which matures in June 2016. Interest on this line of credit of USD 19 million (equal to Ps. 226,260 was paid to HSBC in advance at the prevailing exchange rate on the day of the transaction. This prepaid interest will be amortized on a straight-line basis over a period of five years. In 2015 and 2014, interest amortization expense was Ps. 43 million. Prepaid interest is presented as part of other assets in the statement of financial position.

13. Employee Benefits

Analysis of net periodic benefit cost

An analysis of the net periodic benefit cost for the years ended 31 December 2015 and 2014 is as follows:

2015 2014

Current year service cost Ps. 7,750 $ 4,121

Interest cost 3,974 3,232

Amortization of past service cost 1,025 1,186

Ps. 12,749 $ 8,539

Actuarial assumptions

The average rates used for determining the net periodic benefit cost for the years ended 31 December 2015 and 2014 were as follows:

2015 2014

Discount rate 6.9% 6.7%

Salary increase rate 5.4 5.4

Minimum salary increase rate 4.06 4.06

An analysis of changes in the defined benefit obligation is as follows:

As at 31 December

2015 2014

Defined benefit obligation at beginning of year Ps. 61,377 $ 45,826

Current year service cost 7,750 4,121

Finance cost on defined benefit obligation 3,974 3,232

Unamortized actuarial loss 390 9,674

Employee benefits ( 101) ( 403)

Curtailment of employee benefits - ( 1,073)

Defined benefit obligation at beginning of year Ps. 73,390 $ 61,377

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14. Accounts Payable and Accrued Liabilities

a) An analysis of the Company’s accounts payable and accrued liabilities is as follows:

As at 31 December

2015 2014

Suppliers Ps. 343,728 Ps. 174,332

Sundry creditors 113,243 132,154

Accounts payable and maintenance provisions 2,194,148 1,477,770

Accrued expenses and other provisions 11,558 10,371

Security deposits 11,449 10,455

Total Ps. 2,674,126 Ps. 1,805,082

b) As at 31 December 2015 and 2014, an analysis of accrued liabilities and other provisions is as follows:

Balance as at 31 December 2014

Increases for the year Charges


Payments Reversals

Vacation premium Ps. 169 Ps. 169 Ps. 169 Ps. - Ps. 169

Paid annual leave 562 562 562 - 562

Other 9,640 371,686 370,499 - 10,827

Ps. 10,371 Ps. 372,417 Ps. 371,230 Ps. - Ps. 11,558

Saldos al 31 de diciembre de 2013

Incrementos del año Charges


Payments Reversals

Vacation premium Ps. 169 Ps. 169 Ps. 169 Ps. - Ps. 169

Paid annual leave 562 562 562 - 562

Other 12,169 328,975 331,504 - 9,640

Ps. 12,900 Ps. 329,706 Ps. 332,235 Ps. - Ps. 10,371

The above-mentioned provisions represent expenses incurred in 2015 and 2014 or services contracted during these years that are to be paid in the following year. There is uncertainty as to both the final amounts payable and the timing of the Company’s cash outlay and thus, the amounts shown above may vary.

15. Foreign Currency Balances and Transactions

a) The consolidated financial statements as at 31 December 2015 and 2014 include the following U.S. dollar denominated assets and liabilities:

2015 2014

Amount in U.S. dollars

Amount in Mexican pesos

Amount in U.S. dollars

Amount in Mexican pesos

Assets US$ 21,965 Ps. 378,869 US$ 24,265 Ps. 357,698

Liabilities ( 475,218) ( 8,196,896) ( 510,484) ( 7,525,245)

Net monetary liability position

US$ ( 453,253) Ps. ( 7,818,027) US$ (486,219) Ps. (7,167,547)

b) The exchange rates used to translate the above amount to Mexican pesos as at 31 December 2015 and 2014 were Ps. 17.2487 and Ps. 14.7414, respectively, per U.S. dollar. At 4 April 2016, the date of the audit report on these consolidated financial statements, the exchange rate was Ps. 17.3338 per U.S. dollar.

As at 31 December 2015 and 2014, IDEAL’s Panamanian subsidiary has a long-term loan payable in U.S. dollars of USD 435 million and USD 472 million, respectively. The subsidiary’s functional currency is the U.S. dollar.

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c) For the years ended 31 December 2015 and 2014, the Company had the following U.S. dollar denominated transactions:

2015 2014

Income US$ 44,679 US$ 96,103

Operating expenses 13,552 17,527

Interest income 1 2

Interest expense 32,220 33,193

16. Other Financial Assets and Liabilities

Fair value hierarchy

The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:

Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.

Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.

Level 3: techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable market data.

As at 31 December 2015 and 2014, the Company held the following financial instruments carried at fair value on the statement of financial position:

Fair value measurement as at 31 December 2015

Level 1 Level 2 Level 3 Total

Assets

Long-term notes receivable Ps. - Ps. 1,234,271 Ps. - Ps. 1,234,271

Total Ps. - Ps. 1,234,271 Ps. - Ps. 1,234,271

Liabilities

Long-term debt Ps. 23,837,131 Ps. 48,124,142 Ps. - Ps. 71,961,273

Derivative financial instruments - 4,533,228 - 4,533,228

Total Ps. 23,837,131 Ps. 52,657,370 Ps. - Ps. 76,494,501

Fair value measurement as at 31 December 2014

Level 1 Level 2 Level 3 Total

Assets

Long-term notes receivable Ps. - Ps. 1,659,027 Ps. - Ps. 1,659,027

Total Ps. - Ps. 1,659,027 Ps. - Ps. 1,659,027

Liabilities

Long-term debt Ps. 19,423,519 Ps. 45,749,089 Ps. - Ps. 65,172,608

Derivative financial instruments - 5,650,620 - 5,650,620

Total Ps. 19,423,519 Ps. 51,399,709 Ps. - Ps. 70,823,228

During the years ended 31 December 2015 and 2014, there were no transfers between Level 1 and Level 2 fair value measure-ments.

The fair value of cash and cash equivalents, trade receivables, trade payables, and other current liabilities approximate their carrying amounts, largely due to the short-term maturities of these instruments.

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17. Debt

The Company’s short- and long-term debt consists of the following:

As at 31 December 2015 As at 31 December 2014

Currency Item RateMaturity from

2016 to Total RateMaturity from

2015 to Total

Mexican pesos:

Structured notes (“certificados bursátiles”)

from 4.13% to 10.50% 2043 Ps. 22,612,676

from 4.08% to 10.50% 2043 Ps. 16,793,879

Related party loansfrom 4.35% to

5.53% 2016 5,472,000from 4.35% to

5.30% 2015

5,981,473

Loans backed by collection rights from 5.33% to

10.78% 2043 35,577,363from 6.05% to

15% 2043 33,809,192

Bank loansfrom 4.14% to

6.47% 2028 7,930,180from 4.03% to

6.05% 5,742,757

Accrued interest 194,993 2028 211,903

Subtotal in Mexican pesos 71,787,212 62,539,204

U.S. dollars:

Loans backed by electricity collection rights 5.03% 2027 7,383,450 5.03% 2027 6,841,901

Total debt 79,170,662 69,381,105

Less: short-term debt and current portion of long-term debt 10,717,035 8,083,376

Long-term debt Ps. 68,453,627 Ps. 61,297,729

The Company’s loan facilities contain certain affirmative and negative covenants that, among other points, limit the ability of its subsidiaries to: consolidate or merge with other companies or sell off substantially all of their assets; encumber their property or assets; guarantee indebtedness of other parties; materially alter the nature of their businesses; and pay dividends under cer-tain circumstances. In addition, the Company and where applicable, its subsidiaries are required to maintain certain financial ratios in accordance with the terms of their loan facilities. At the date of these consolidated financial statements the Company and its subsidiaries are in compliance with all such covenants.

The interest rates applied to the Company’s debt depend on the variances in a number of international and local interest rates, except for certain debt instruments that were contracted at fixed rates. The weighted average cost of the Company’s debt as at 31 December 2015 was approximately 7.42% (7.00% in 2014).

This rate excludes the interest, commissions, and withheld taxes that the Company must reimburse its creditors.

An analysis of short-term debt as at 31 December 2015 and 2014 is as follows:

2015 2014

Lines of credit used Ps. 10,717,035 Ps. 8,083,376

Weighted interest rate 7.02% 6.85%

Long-term debt maturities are as follows:

Year Variable

2019 Ps. 1,718,023

2020 363,562

2021 3,017,847

2022 201,751

2023

2024 and subsequent years 63,152,444

Total Ps. 68,453,627

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a) Structured notes (“certificados bursátiles”)

i) On 24 April 2013, the Company issued a single series of fiduciary structured notes (“certificados bursátiles”) under a bond issue of Ps. 5 billion that was carried out in accordance with the irrevocable underwriting, management and source of payment master trust called FICC Invex 1302 created in Banco Invex, S.A., Institución de Banca Múltiple, Invex Grupo Financiero. The funds that have been transferred to FICC Invex 1302 trust are the residual amounts of the original issuing trust, whose trustors are four highway concessionaires (Concesionaria de Vías Troncales; CFC Concesiones; Concesionaria de Carreteras; and Auto-pistas y Libramientos de la República Mexicana y Tijuana-Mexicali). The structured notes mature in January 2043.

ii) On 9 November 2011, the Company issued long-term structured notes (“certificados bursátiles”) under the dual debt place-ment program established by IDEAL for up to Ps. 9 billion in issued debt. The amount of debt placed through the first two issu-ances under the program was Ps. 4,500 million, of which Ps. 2,590 million corresponds to 3-year instruments and Ps. 1,910 million to 5-year instruments. All of these instruments are payable upon maturity.

On 6 November 2014, the Company paid out the first tranche of these structured notes in the amount of Ps. 2,590 upon maturity.

As at 31 December 2014, total interest payable on these instruments was Ps. 5,859, and total interest expense for 2015 and 2014 was Ps. 79,575 and Ps. 175,450, respectively.

iii) Under a program established by four highway concessionaries (Concesionaria de Vías Troncales; CFC Concesiones; Con-cesionaria de Carreteras; and Autopistas y Libramientos de la República Mexicana y Tijuana Mexicali) for the placement of fiduciary structured notes (“certificados bursátiles”) for up to Ps. 50 billion or its equivalent in UDIs, in June 2008 and October 2009, the Company issued fiduciary structured notes (“certificados bursátiles”) totaling Ps. 7,100 million (in 3 series) and Ps. 2,400 million (in 2 series), respectively, which mature in 2036 and 2019, respectively. The concessionaries’ net highway revenue (i.e., highway revenues net of operating and maintenance expenses) shall be used to pay out the principal and interest on the fiduciary structured notes (“certificados bursátiles”).

iv) On 30 June 2015, through the Trust, IDEAL issued 20-year Mexican peso denominated structured notes for a total issuance Ps. 6,500,000 that matures in June 2035. These structured notes shall bear annual interest at fixed rate of 8.96% payable to investors in semi-annual payments.

On 31 December 2015, the Trust paid out Ps. 5,850 against the structured notes. Accrued interest on these notes as at 31 De-cember 2015 totaled Ps. 297,671.

b) Loans secured by collection rights

FICC Invex 1302 Trust

On 24 April 2013, FICC Invex 1302 Trust obtained a line of credit of up to Ps. 5,000 million that bears fixed interest of 0.1% and vari-able interest of 16%. This financing matures on 12 January 2043 and is backed by four highway concessionaries (Concesionaria de Vías Troncales; CFC Concesiones; Concesionaria de Carreteras; and Autopistas y Libramientos de la República Mexicana y Tijuana-Mexicali). The loan is secured by the residual amount of the original trust (Master FICC) that will be transferred to FICC Invex 1302 trust to repay the loan.

Arco Norte Bypass of Mexico City (Arco Norte Bypass)

In March 2009, Arco Norte Bypass obtained a line of credit of Ps. 1,600 million through Trust F/623 in The Bank of New York Mellon. Drawdowns are secured by the toll collection rights of Arco Norte Bypass under the respective concession and they mature in March 2014, as stipulated in the amending agreement signed on 14 March 2012. In 2010, the trust made principal payments of Ps. 580 million against the line of credit, resulting in an outstanding balance of Ps. 1,028 million. The loan was repaid in full in 2014.

The financing bears interest payable monthly at the 28-day Mexican weighted interbank interest rate (TIIE) plus a spread. In 2014 accrued interest was Ps. 12,921.

North Pacific Highway (NPH)

In November 2009, NPH obtained a line of credit of Ps. 4,535 million through Trust F/692 in The Bank of New York Mellon. Draw-downs are secured by NPH’s toll collection rights under the concession, and the loan matures on 26 November 2017. This loan was repaid in full by NPH on 11 December 2013. NPH subsequently obtained a new line of credit of Ps. 6,000 million that matures on 11 December 2033.

As at 31 December 2015, the Trust made payments of Ps. 12,000 against this most recent loan obtained by NPH. The line of credit bears interest at the 28-day Mexican weighted interbank interest rate (TIIE) plus a spread that is to be raised by a quarter of a point every 2 years. The amount of interest accrued on this loan in 2015 was Ps. 380,647 (Ps. 393,257 in 2014) and as at 31 December 2015 and 2014, interest payable on the line of credit was Ps. 22,012 and Ps. 22,071, respectively.

Ciudad Azteca Multimodal Station (CAMS)

In March 2010, CAMS obtained a line of credit of Ps. 445 million through Trust F/725 in The Bank of New York Mellon. This financing matures in March 2020 and bears interest at the Mexican weighted interbank interest rate (TIIE) plus a spread. In 2011, CAMS made one drawdown against the line of credit, and made payments of Ps. 26.34 and

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Ps. 21.6 million toward principal in 2015 and 2014, respectively. In 2015 and 2014, total interest accrued on the loan was Ps. 19,504 and Ps. 22,218, respectively, and as at 31 December 2015 and 2014, interest payable on this loan was Ps. 840 and Ps. 780, respectively.

Concession of Distribuidor Vial San Jerónimo-Muyuguarda (Muyuguarda)

In 2011, Muyuguarda obtained a loan of Ps. 2,957 million through Trust F/791 in The Bank of New York Mellon. This loan bears interest at the 28-day Mexican weighted interbank interest rate (TIIE) plus a spread and it matures in March 2021.

As at 31 December 2014, Muyuguarda has made drawdowns of Ps. 130.5 against the line of credit, bringing the total outstand-ing balance as at 31 December 2015 and 2014 is Ps. 2,951 million. As at 31 December 2015 and 2014, total interest accrued on this financing is Ps. 185,970 and Ps. 186,161, respectively.

Concesionaria Guadalajara-Tepic (CGT)

In November 2011, CGT obtained the following two lines of credit through Trust F/855 in The Bank of New York Mellon:

a) A line of credit for up to Ps. 7,500 million from Banobras and Banco Inbursa. In 2015 and 2014, the Company drew down Ps. 1,428 million and Ps. 1,241.9 million, respectively, against this line of credit. These drawdowns mature in 16 November 2028. Interest on the financing was set at the Mexican weighted interbank interest rate (TIIE) plus a spread.

b) A line of credit of up to Ps. 4,700 million from Banco Inbursa. In 2015, CGT drew down Ps. 895.2 million and in 2014 it drew down Ps. 778.5 million against this line of credit. These drawdowns mature in 16 November 2028. Interest on the financing was set at the Mexican weighted interbank interest rate (TIIE) plus a spread.

In 2015, total accrued interest on these drawdowns was Ps. 459,126 (Ps. 217,481 in 2014).

Aguas Tratadas del Valle de México (ATVM)

In August 2010, ATVM entered into a line of credit agreement with Banobras to receive financing of up to Ps. 4,707 million. Draw-downs against this line of credit mature in January 2029 and bear interest at the Mexican weighted interbank interest rate (TIIE) plus a spread. This line of credit is guaranteed by all of the shares of ATVM, a confirmation of support letter issued by ATVM’s sharehold-ers, a stand-by letter of credit of Ps. 1,067 million (at December 2012), and ATVM’s collection rights.

As at 31 December 2015 and 2014, ATVM has made drawdowns of Ps. 300,404 and Ps. 429,015, respectively, against this line of credit. In 2015 and 2014, accrued interest on these drawdowns is Ps. 277,479 and Ps. 255,551, respectively.

CRS Morelos

CRS Morelos maintains several trusts in different banks: Trust F/10684-12-22 in Banco del Bajío, which has an outstanding loan of Ps. 3,017 million that bears annual interest of 3.25% and matures on 12 December 2027. Trust F/15-14 in Invex, S.A. Institución de Banca Múltiple Grupo Financiero, which has an outstanding loan of Ps. 2,000 million that bears fixed annual interest and matures on 30 November 2030.

A trust in The Bank of New York Mellon, full-service bank, which has an outstanding loan of Ps. 400 million that bears annual interest of 15% and matures on 30 June 2015. This loan was repaid in full on the maturity date.

The above-mentioned loans are secured by the administrative service contract that CRS Morelos has with the Morelos state government.

In 2015 and 2014, CRS Morelos made payments against these loan totaling Ps. 65 million and Ps. 72 million, respectively.

As at 31 December 2015 and 2014, total interest accrued on this financing is Ps. 312 million and Ps. 420 million, respectively.

Makobil

On 14 November 2013, Makobil entered into a number of agreements with Banobras as a creditor, and Banco Nacional de México, S.A. Integrante del Grupo Financiero Banamex (Banamex) as a creditor and administrative agent, to amend the loan agreement for the loan of Ps. 3,800 million obtained on 30 September 2011. These amendments were made to reflect the change in the shareholders of Makobil, who assumed all of the guarantee obligations in respect of the loans and the amend-ments included no changes to any of the original loan terms and conditions set forth in the agreements. The loans mature on 30 July 2028 and 30 July 2028 and bear annual interest of 7.78%.

On 30 July 2013, as the result of a debt restructuring and recognition agreement, through Trust N. 1514, Makobil recognized a debt of Ps. 2,000 million owed to Banco Inbursa, S.A., which bears fixed annual interest and matures on 30 November 2030.

In 2015 and 2014, the Company made payments against this loan of Ps. 79 million and Ps. 77 million, respectively.

As at 31 December 2015 and 2014, total interest accrued on this financing is Ps. 565 million and Ps. 566 million, respectively.

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Ideal Saneamiento de Saltillo (Ideal Saltillo)

On 29 April 2013, Ideal Saltillo entered into an agreement with Banco Santander (México), S.A. Institución de Banca Múltiple, Grupo Financiero Santander to receive a term loan of Ps. 250 million, which matures on 24 October 2022. The proceeds of this loan were used by Ideal Saltillo to pay down other debt.

In 2015 and 2014, the Company made payments against this loan totaling Ps. 20.2 million and Ps. 17.8 million, respectively.

As at 31 December 2015 and 2014, total accrued interest under this loan was Ps. 11,286 and Ps. 12,828 million, respectively.

c) Foreign currency borrowings

Ideal Panama

In November 2011, Trust 1133 opened a line of credit of USD 340 million with Banco Inbursa. Ideal Panama made drawdowns against the line of credit of USD 217 million and USD 123 million in November and December 2011, respectively. These draw-downs mature on 18 November 2023. In July 2012, Ideal Panama made an additional drawdown of USD 190 million against the line of credit. In 2015 and 2014, the Company made payments against this line of credit totaling USD 37 million and USD 37 million, respectively.

As at 31 December 2015 and 2014, total interest accrued on these drawdowns was Ps. 393 and Ps. 368 million, respectively.

18. Government Grants

I. PTAR Atotonilco

As discussed in Note 6e.II, in December 2009, CONAGUA awarded ATVM a concession for the provision of waste water treat-ment services in the Valley of Mexico (PTAR Atotonilco ). On 7 January 2010, ATVM and the CONAGUA entered into a 25-year contract for the provision of waste water treatment services in the Valley of Mexico under which ATVM is obligated to finish building and to start up operations of the Atotonilco waste water treatment plant. ATVM will also operate and maintain the plant until the conclusion of the execution period. The contract stipulates that upon expiration of that term, ATVM shall deliver to CONAGUA, free of any type of encumbrance and in good working order, all of the assets built pursuant to the contract.

On 29 November 2012, the Company entered into a second amending agreement to the service contract in order to modify the project implementation programs, which include the project’s critical path method and key events catalog. This second amending agreement effectively reset the timeline for the project development, construction and capacity testing phases of the project.

Under the terms of the contract, ATVM shall be required to provide at least 20% of the capital investment needed for the proj-ect. The contract also stipulates that an irrevocable investment, administrative and source of funding trust shall be created to receive and manage the project’s funds.

On 21 May 2010, the Irrevocable Investment, Administrative and Source of Funding Trust 2169, Atotonilco Waste Water Treat-ment Plant, was created. The trustor is ATVM, and the trustee is Banobras. The original trust agreement was later amended on 18 October 2010 and several clauses were modified on 25 September 2013.

On 16 July 2010, an Agreement for Financial Support was entered into between Fondo Nacional de Infraestructura (FONADIN) and CONAGUA. Under this agreement, the FONADIN granted non-recoverable funding to CONAGUA to cover up to 49% of the total cost of the Atotonilco waste water treatment plant project. This funding shall be capped at Ps. 4,795,426.

As at 31 December 2015, ATVM has received Ps. 4,920,114 (Ps. 4,578,719 in 2014) of the total funding discussed in the preceding paragraph.

19. Commitments and Contingencies

Commitments

As at 31 December 2015 and 2014, the Company has non-cancelable commitments for the construction of assets under con-cession of Ps. 13,729,000 and Ps. 11,535,000, respectively, which include non-cancelable commitments of Ps. 12,191,000 and Ps. 9,851,000 with related parties.

I. Highway concessions:

Highway under concession

All concession titles held by IDEAL’s highway operator subsidiaries stipulate the terms and conditions established by the corresponding state or federal government authority in order to ensure timely compliance by the subsidiaries with their obligations under each concession, the causes for cancellation of the concessions, and the subsidiaries’ obligations under the concessions.

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In the ordinary course of its business, the Company may be party to labor, tax, administrative, or commercial lawsuits. However, none of these cases, either individually or taken collectively, have been deemed to potentially affect the Company’s business, its financial position, or its financial performance, or result in any material adverse effects for the Company.

II. Hydroelectric plants

Panama

On 20 November 2014, the Fifth Judge of the Civil Circuit of the First Judicial Circuit of Panama ordered the seizure of several assets owned by Ideal Panamá, S.A. (“Ideal Panamá”). as part of a court order resulting from a lawsuit through which the plaintiff La Mina Hydro Power, Corp. sought the execution of court orders in respect of another ruling issued in 2010, against the National Public Service Authority (ASEP). However, Ideal Panamá was never party to or called as a witness in any of La Mina Hydro Power’s lawsuits against the ASEP.

The asset seizure order was lifted after the ASEP sought relief (amparo) against the ruling ordering the seizure, which shall not have any effect on the motion for reconsideration filed by Ideal Panamá against the seizure order.

III. Water treatment plants

ATVM

On 17 November 2015, the municipal president of Atotonilco de Tula, in Hidalgo, revoked the construction license issued for the project and shut the project down. In response,, ATVM initiated the applicable means of defense by filing a motion for relief (amparo) with the respective district court, and providing additional documentation when necessary. Through 4 April 2016, the Company has received a total of 10 orders to shut down the project from the Municipality of Atotonilco de Tula, Hidalgo and for each of these orders, the Company obtained a permanent stay of execution and the respective orders were lifted. One of the orders to shut down the project was the result of a property tax agreement. ATVM filed a motion for direct relief against that order and obtained a temporary stay of execution.

As part of its legal action taken against official government action, ATVM filed a motion for indirect relief (amparo) against repeated violations of its basic legal rights.

IV. Correctional facilities

CRS Morelos, S.A. de C.V. (CRS Morelos)

Due to its alleged failure to pay VAT and income tax from 2012, the Local Tax Audit Administration Office of Northern Mexico City determined a tax liability of Ps. 1,804,953 against CRS Morelos, which includes the respective fines, inflation adjustments and surcharges. CRS Morelos filed a motion for reconsideration against the tax authority’s resolution and the tax authority subsequently revoked the resolution through which it levied the disputed tax liability in order to examine and evaluate the evidence submitted by CRS Morelos during the motion for reconsideration proceedings.

Makobil, S. de R.L. de C.V. (Makobil)

Makobil was subject to an on-site tax audit related to its compliance with its tax obligations in respect of value added tax, income tax and single-rate business tax of the 2012 tax year and value added tax for the period from January through March 2013. During this on-site audit, Makobil provided evidence and documentation to the tax authority in order to disprove the tax authority’s claim of omitted taxes indicated in the preliminary tax assessment issued by the tax authority on 4 August 2015. In response, Makobil requested the adoption of a conclusive agreement (acuerdo conclusive) from the tax authority, which the tax authority has no yet responded to.

V. Cuatro Caminos Multimodal Transfer Station (ETRAM Cuatro Caminos)

The term of the concession for ETRAM Cuatro Caminos is 30 years starting on the date the concession was granted and con-cluding on 29 August 2043. This concession term may be extended by request of the concessionaire, subject to approval by the MCT.

VI. General

a) IDEAL’s Federal, state and municipal taxes are open to review by the tax authority for a period of five years. In the event of such a review, the Company is contingently liable for any omitted taxes determined by the tax authority, plus any correspond-ing penalties, inflation adjustments, and surcharges.

b) In accordance with the Mexican Income Tax Law, companies that carry out transactions with related parties are subject to tax restrictions and obligations with respect to the determination of the prices charged, since such prices should be similar to the prices that would have been used with or between independent parties in comparable transactions.

20. Related Parties

a) An analysis of balances due from and to the Company’s related parties as at 31 December 2015 and 2014. The companies mentioned in this note are considered associates or affiliates of IDEAL, since the Company’s principal shareholders hold direct or indirect stakes in those companies.

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2015 2014

Receivables:

Star Médica, S.A. de C.V. Ps. 30 Ps. 1,160

Inmobiliaria para el Desarrollo de Proyectos, S.A. de C.V. 302 303

Anuncios en Directorios, S.A. de C.V. - 3,856

Servicios Corporativos Frisco, S.A. de C.V. 12,517 1,823

Constructora MT Oaxaca, S.A. de C.V. - 4,773

Inmuebles General, S.A. de C.V. - 5,999

Ingenieros Civiles y Asociados, S.A. de C.V. (ICA) 13,435

Túnel Diamante, S.A. de C.V. 146 -

Other 578 544

27,008 18,458

Notes receivable:

Controladora de Operaciones de Infraestructura, S.A. de C.V. (1) 335,112 -

Hospital Infantil Privado de Acapulco, S.A. de C.V. (3) 51,181 51,181

Grupo Promotor de Desarrollo e Infraestructura, S.A. de C.V. (4) 50,730 48,643

Servicios y Proyectos Público Privados de México, S.A. de C.V. (5) 24,726 26,253

Túnel Diamante, S.A. de C.V. (2) 361,712 -

Controladora de Empresas Prestadoras de Servicios Públicos, S.A. de C.V.

13,269 11,453

Allowance for doubtful accounts ( 51,181) ( 51,181)

785,549 86,349

Total short-term related party receivables Ps. 812,557 Ps. 104,807

Long-term notes receivable:

Grupo Promotor de Desarrollo e Infraestructura, S.A. de C.V. (4) Ps. 237,538 Ps. -

Túnel Diamante, S.A. de C.V. (2) - 330,639

Prepaid expenses:

Operadora CICSA, S.A. de C.V. (6) 591,421 -

Total long-term related party receivables Ps. 828,959 Ps. 330,639

(1) Controladora de Operaciones de Infraestructura, S.A. de C.V. (CONOISA)

In June 2013, the Company granted CONOISA two loans of Ps. 121,020 and Ps. 478,980, both of which bore annual interest of 15% and originally matured on 13 December 2013. The amount of interest accrued on this loan through the maturity date was Ps. 9,026 for the first loan and Ps. 35,524 for the second loan. The loans were subsequently refinanced and consolidated into a single loan of Ps. 651,678, which included the compounded interest accrued through that date. This new loan bore annual interest of 15% and matured on 13 March 2014, and at that date the loan plus compounded interest was Ps. 694,563. The proceeds of the loan were used to finance CONOISA’s acquisition of 30% of the non-controlling shares in the subsidiary Con-cesionaria Distribuidor Vial San Jerónimo-Muyuguarda, S.A. de C.V. In 2015, the Company had loans receivable of Ps. 320,003, on which accrued interest is Ps. 15,109. In 2015 and 2014, total interest accrued was Ps. 6,947 and Ps. 25,254, respectively.

(2) Túnel Diamante, S.A. de C.V.

In June 2013, the Company granted Túnel Diamante, S.A. de C.V. a loan of Ps. 284,750 that bore interest at the average Mexican weighted interbank rate (TIIE) of 9.30%, plus 5 percentage points, and originally matured in July 2013. The amount of interest accrued on this loan through the maturity date was Ps. 2,043. The loan was renewed to a new maturity date of 15 December 2016 and with a new annual interest rate equal to the average Mexican weighted interbank rate (TIIE) of 9.32% plus 5 percentage points. The amount of interest accrued on the loan through 31 December 2015 is Ps. 26,907 (Ps. 26,907 in 2014) and interest receivable as at 31 December 2015 and 2014 is Ps. 76,962 and Ps. 45,750, respectively. As at 31 December 2015 and 2014, the Company also has accounts receivable due from this related party for services provided of Ps. 145 and Ps. 139, respectively.

(3) Hospital Infantil Privado de Acapulco, S.A. de C.V.

As at 31 December 2014 and 2013, the Company has an outstanding loan extended to Hospital Infantil Privado de Acapulco, S.A. de C.V. of Ps. 51,038, plus accrued interest of Ps. 143. Since the hospital has halted operations, the Company created an allowance for doubtful accounts of Ps. 51,181, which is the total amount that the related party owes the Company.

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(4) Grupo Promotor de Desarrollo e Infraestructura, S.A. de C.V. (Grupo Promotor)

As at 30 December 2014, Promotora IDEAL extended a loan of Ps. 48,632 to Grupo Promotor, which bears fixed annual interest and originally matured on 30 December 2015. Interest accrued on the loan through 31 December 2015 and 2014 is Ps. 2,087 and Ps. 11, respectively, which has been compounded. As at 31 December 2015, the loan was renewed with a new principal Ps. 50,730 and a new maturity date of 30 December 2016.

In 2015, Promotora IDEAL extended a series of loans totaling Ps. 231,900 to Grupo Promotor, which bear fixed interest and ma-ture in November 2044. Interest accrued on the loans through 31 December 2015 was Ps. 4,860 and interest receivable as at December 2015 is Ps. 5,638.

(5) Servicios y Proyectos Público Privados de México, S.A. de C.V. (SPPPM)

On 28 March 2014, Operadora de Proyectos SIS, S.A. de C.V. extended a series of loans totaling Ps. 24,359 to SPPPM. The loans bear fixed annual interest and mature on 27 March 2015. The loan was renewed with a new principal of Ps. 22,322 and a new maturity date of 25 March 2016. Interest accrued on the loan through 31 December 2015 and 2014 is Ps. 3,809 and Ps. 1,625, respectively, and interest receivable on the loan as at December 2015 is Ps. 2,404.

(6) Operadora CICSA, S.A. de C.V.

In December 2015, PTA entered into an agreement with Operadora CICSA, S.A. de C.V. (CICSA) for the construction of high-way section C and the bypasses of the Toluca-Atlacomulco highway. PTA made an advance payment of Ps. 591,421 for this project. Construction work commenced in January 2016.

2015 2014

Payables:

Operadora CICSA, S.A. de C.V. Ps. 289,803 Ps. 134,944

Seguros Inbursa, S.A. 1,618 1,621

Grupo PC Constructores, S.A. de C.V. - 688

Constructora de Obras Civiles y Electromecánicas de Atotonilco, S.A. de C.V. 353,969 1,075,350

Autovía Mitla-Tehuantepec, S.A. de C.V. - 2,000

Administradora de Personal de Centros Comerciales, S.A. de C.V. 1,455 2,089

Sanborns Hermanos, S.A. - 1,382

Servicios Swecomex, S.A. de C.V. 2,070 1,960

Teléfonos de México, S.A.B. de C.V. 1,585 2,344

Uninet, S.A. de C.V. 1,245 1,710

Triara, S.A. de C.V. 2,186 80

SELMEC equipos industriales, S.A. de C.V. 1,938 1,354

Other 4,188 2,476

Ps. 660,057 Ps. 1,227,998

b) The Company has entered into the following agreements with related parties:

• The Company has project coordination and execution contracts with Operadora CICSA, S.A. de C.V. (CICSA) in respect of highway under concession and the construction of the Cuatro Caminos multimodal transportation station. Considerations paid to CICSA are capitalized as part of work in process. CICSA also performs major maintenance work for existing high-ways and the fees paid by the Company for these services are recognized in the statement of comprehensive income as part of operating expenses. For the years ended 31 December 2015 and 2014, transactions carried out with CICSA totaled Ps. 4,321,554 and Ps. 2,812,256, respectively.

• DMI, through its trust, has entered into several construction contracts with Grupo PC Constructores, S.A. de C.V. for the construction of the “El Rosario” multimodal transportation station.

• In December 2010, ATVM entered into a turnkey construction contract with Constructora de Obras Civiles y Electrome-cánicas de Atotonilco, S.A. de C.V. for the construction of the PTAR Atotonilco water treatment plant. The maximum total cost of the project shall be Ps. 9,115,745 and the work shall be performed over a period of 37 months staring on the date of the related project commencement certificate. On May 22, the Company entered into an amending agreement to this contract to extend the contract expiration date to February 2015. The Company is currently negotiating a third amending agreement, and the new contract expiration date has not yet been established.

• Concesionaria Distribuidor Vial San Jerónimo Muyuguarda, S.A. de C.V. entered into fixed-price construction contracts with Ingenieros Civiles Asociados, S.A.B. de C.V. (ICA) under which ICA agrees to build the elevated portion of the Per-iférico Sur expressway in Mexico City for a total cost of Ps. 5,296,400. For the years ended 31 December 2015 and 2014, transactions carried out with this related party totaled Ps. 122,991 and Ps. 131,435, respectively.

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• Administradora y Operadora de Estacionamientos, S.A. de C.V. entered into a one-year operating agreement with In-muebles General, S.A. de C.V., under which the latter company pays a consideration to the former equal to 6.5% of the operating income of the parking services business.

• In July 2013, Promotora IDEAL entered into an office leasing and maintenance agreement with Servicios Corporativos Fris-co, S.A. de C.V. For the years ended 31 December 2015 and 2014, transactions carried out with this related party totaled Ps. 7,828 and Ps. 7,749, respectively.

• In February 2012, Autopista Guadalajara-Tepic, S.A. de C.V. entered into one construction contract with Operadora CIC-SA, S.A. de C.V. and another with ICA, with total contractual values of Ps. 5,977,118 and Ps. 2,222,262, respectively. For the years ended 31 December 2015 and 2014, transactions carried out with these related parties totaled Ps. 2,228,817 and Ps. 2,322,147, respectively.

c) For the years ended 31 December 2015 and 2014, the Company had the following transactions with related parties:

2015 2014

Income:

Parking management services Ps. 10,316 Ps. 9,389

Rental income 45,059 42,736

Professional services 36,164 16,974

Other services 30,717 21,386

Expenses:

Professional services 35,760 28,264

Project performance and coordination services 5,773,640 4,857,481

Insurance and bonding 292,329 242,626

Other services:

Stock brokerage services 60,671 8,017

Telephone and communication services 23,103 35,892

Property leases 5,548 731

Interest paid 1,889,824 2,145,139

Interest received 44,868 36,582

Commissions paid 3,158 5,171

21. Equity

Shares

a) As at 31 December 2015 and 2014, the Company’s share capital is represented by 3,000,152,564 common, registered series B-1 shares, with no par value, all of which represent the Company’s fixed minimum capital. In accordance with the Company’s bylaws, the Company may issue series B-2 shares representing variable share capital. As at 31 December 2015 and 2014, IDEAL has no series B-2 shares issued and outstanding.

b) The Company’s minimum fixed share capital of Ps. 8,607,000 (nominal amount) is represented by 3,000,152,564 common registered series B-1 shares, issued and outstanding (including treasury shares for future reissuance in terms of the Mexican Securities Trading Act).

c) As at 31 December 2015 and 2014, the Company had treasury shares comprised respectively of 80,068 and 73,506 thousand Series B-1 shares for subsequent reissuance as set forth in the Mexican Securities Trading Act.

d) The holders of series B-1 shares have the following rights and restrictions:

i) The Company may only issue shares that are in no way restricted for their holders, which are known as ordinary shares.

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II) All stock transfers are unconditional and bear no restrictions for the Company and consequently, the buyer of one or more shares in the Company shall obtain and assume all of the rights and obligations of the previous holder of said share(s) .

III) Shareholders are entitled to the preferential right, in proportion to the number of the shares they hold in the Company, to acquire any shares issued by IDEAL as the result of capital increases.

iv) For as long as the Company is a publicly traded variable capital corporation listed on the Mexican Stock Exchange, the holders of the shares representing the variable portion of the Company’s share capital shall have no redemption rights.

v) An entity that is controlled by the Company may not acquire, either directly or indirectly, shares in the Company or any credit instruments representing such shares. Instruments acquired through mutual funds are exempt from this restriction.

vi) Shares issued by the Company, securities or instruments representing such shares and any rights over such shares may only be acquired with the prior authorization from the Board of Directors if the number of shares or rights over such shares intended to be acquired in one transaction or a series of transactions, with no time limit, by any one shareholder or group of shareholders who are linked to each other and who are acting together, represents 10% or more of the Company’s voting shares.

e) A reconciliation of the Company’s shares as at 31 December 2015 and 2014 is as follows:

Number of shares (millions)

Year Series B-1

As at 31 December 2013 2,944

Share buybacks 17


Share buybacks 7


Share buybacks

f) As at 31 December 2015 and 2014, the Company repurchased shares in the amounts mentioned in the table below. The cost of buying back the shares in excess of the portion of share capital that the shares represent was recognized in retained earnings.

Number of shares (millions)

Amount in thousands of Mexican pesos

Year Series B-1 Series B-1

As at 31 December 2014 17 Ps. 582,516

As at 31 December 2015 7 249,670

g) A reconciliation of the Company’s treasury shares as at 31 December 2015 and 2014 is as follows:

Series B-1 (thousands of shares)


Share buybacks 17,094


Share buybacks 6,562


h) in accordance with Article 20 of the Mexican Corporations Act, the Company is required to appropriate at least 5% of the net income of each year to increase the legal reserve. This practice must be continued each year until the legal reserve reach-es 20% of the value of the Company’s share capital. As at 31 December 2015 and 2014, IDEAL’s legal reserve is Ps. 177,568.

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22. Income Tax

a) The Mexican Income Tax Law (MITL) establishes a corporate income tax rate for Mexico of 30% for fiscal years 2015 and 2014.

The MITL establishes requirements and limits regarding certain deductions, including restrictions on the deductibility of pay-roll-related expenses that are considered tax-exempt for employees, contributions to create or increase pension fund re-serves, and Mexican Social Security Institute dues that are paid by the Company but that should be paid by the employees. The MITL also establishes that certain payments made to related parties shall not be deductible if they do not meet certain requirements.

Tax consolidation

Effective as at 31 December 2013

b) In 2010, Mexico’s tax consolidation regime was significantly amended to establish a maximum deferral period for current income tax of five years, requiring previously applied tax consolidation benefits to be reversed (or “recaptured”, as this is commonly known) and remitted in installments over the sixth to tenth years subsequent to the year in which the benefits were taken.

As a result of this change, in 2010, the Company calculated the income tax that it had deferred through 2004, and in 2011, 2012, 2013 and 2014, it calculated its deferred income tax corresponding to 2005, 2006, 2007 and 2008, respec-tively. Similarly, these taxes must be remitted in 5 annual installments.

The benefits from tax consolidation may have arisen from:

i. Tax losses applied in the tax consolidation that would not have otherwise been carried forward individually by the entity that generated them.

ii. Other items (not tax losses) that gave rise to tax consolidation benefits, such as capital losses on sales of shares that are pending deduction individually by the entity that generated them; special consolidation items resulting from transactions carried out between consolidating entities; and dividends declared by consolidated subsidiaries as of 1999 that were not paid from the balance of the Net taxed profits account (CUFIN) or the Net reinvested taxed profits account (CUFINRE).

In addition to the above, the differences between the consolidated CUFIN and CUFINRE balances calculated in accor-dance with the Income Tax Law and the balances of such accounts of the individual entities of the group may give rise to taxable income for income tax purposes under the Income Tax Law (hereinafter referred to as “CUFIN differences”).

a. The tax reform establishes that income tax deferred on CUFIN differences accumulated through 31 December 2004 must be remitted from 2010 through 2014 and the income tax payable on these items for 2005 and subsequent years is to be paid in the sixth to tenth years subsequent to the year in which they were generated (for example, deferred tax from 2005 will need to be paid by the taxpayer between 2011 to 2018)

Under the MITL, as at 31 December 2013, consolidated groups must deconsolidate and remit any income tax incurred between 2009 and 2013 and any asset tax that was deferred in the consolidation. Therefore, controlling companies must remit the income tax that they have previously deferred (by way of either tax consolidation benefits or CUFIN differences), with 25% of such tax to be remitted by 31 May 2014 and the remaining 75%, restated for inflation, to be remitted over the next four years at the following percentages: 25%, 20%, 15% and 15% in year 1, 2, 3 and 4, respectively. All deferred asset tax is to be remitted the month following deconsolidation.

As a result of the tax deconsolidation, as at 31 December 2015, the Company determined income tax payable of Ps. 1,505,922. The amount of deferred income tax that the Company must remit by no later than 31 May 2016 was Ps. 106,743. As at 31 De-cember 2014, the Company determined income tax payable of Ps. 1,394,364. The amount of deferred tax payable that the Company remitted before 31 May 2015 was Ps. 31,546.

Starting in 2014, the Company began to pay income tax under the so-called Optional Tax Regime for Corporate Groups.

Tax incorporation regime

The MITL establishes the so-called Optional Tax Regime for Corporate Groups. To qualify for this tax regime, at least 80% of the voting shares of the subsidiary must be held by the controlling company.

The tax incorporation regime allows income tax to be deferred for the effect of the tax losses of the year of each consol-idated entity. The normal maximum deferral period is three years, which may be reduced under certain circumstances.

In accordance with the MITL, corporate groups that consolidated their income tax under the regime in effect until 31 December 2013 may choose to apply the new tax regime beginning in 2014 by filing the corresponding notice with the tax authorities.

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b) Employee profit sharing

The MITL establishes that starting in 1 January 2014, entities are to calculate their employee profit sharing on the basis of their taxable earnings for the year determined for income tax purposes, plus or minus the effects of certain adjustments specified in the MITL.

c) An analysis of income tax recognized in the statement of comprehensive income for the years ended 31 December 2015 and 2014 is as follows:

2015 2014

In Mexico:

Current income tax Ps. ( 1,359,690) Ps.( 833,330)

Deferred income tax ( 598,750) 621,113

( 1,958,440) ( 212,217)

In Panama:

Current income tax ( 122) -

Deferred income tax ( 56,940) 108,720

Total Ps. ( 2,015,502) Ps. ( 103,497)

d) An analysis of the income tax effect recognized as other comprehensive income as part of the unrealized gain on hedging instruments for the years ended 31 December 2015 and 2014 is as follows:

2015 2014

Unrealized gains on financial instruments Ps. 853,007 Ps. 854,809

As at 31 December 2015 and 2014, the Company recalculated its deferred tax assets and liabilities to conform to the rules contained in the new MITL.

e) An analysis of the effect of temporary differences giving rise to deferred tax assets and liabilities is as follows:

2015 2014

Deferred tax assets:

Net operating losses Ps. 2,157,538 Ps. 1,567,428

Liability provisions 91,343 95,236

Concessions and other assets, net - 397,428

Derivative financial instruments 954,869 998,262

Property, furniture and equipment - 1,794

Advance collections and other 315,727 174,346

Employee benefits 16,220 14,326

Valuation allowance ( 166,349) ( 79,203)

Total deferred income tax assets Ps. 3,369,348 Ps. 3,169,617

2015 2014

Deferred tax liabilities:

Concessions and other assets, net Ps. ( 771,151) Ps. -

Prepaid expenses ( 177,463) ( 71,767)

Prepaid interest ( 6,465) ( 19,395)

Property, furniture and equipment ( 1,545) -

Total deferred income tax liabilities Ps. ( 956,624) Ps. ( 91,162)

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f) An analysis of the effects of temporary differences in deferred taxes recognized in the statement of comprehensive income is as follows:

As at 31 December

2015 2014

Deferred tax assets:

Net operating losses Ps. 502,964 $ ( 150,651)

Liability provisions ( 3,893) ( 89,075)

Concessions and other assets, net - 49,398

Derivative financial instruments ( 33,352) 959,364

Property, furniture and equipment - ( 33,524)

Advance collections and other 141,381 ( 10,431)

Employee benefits 1,894 6,288

608,994 731,369

Deferred tax liabilities:

Concessions and other assets, net ( 1,168,579) -

Prepaid expenses ( 105,696) 12,929

Prepaid interest 12,930 ( 14,465)

Property, furniture and equipment ( 3,339) -

( 1,264,684) ( 1,536)

Deferred tax (liability)/asset, net Ps. ( 655,690) $ 729,833

The Company’s valuation allowance for deferred tax assets covers the total amount of its deferred tax asset from the allow-ance for doubtful accounts and a portion of the deferred tax asset from provisions and net operating losses.

g) A reconciliation of the statutory income tax rate to the effective income tax rate recognized by the Company for financial reporting purposes is as follows:

2015 2014

Statutory income tax rate 30% 30%

Effect of non-deductible, non-taxable items:

Taxable effects of inflation 68 24

Depreciation 23 ( 2)

Other ( 50) ( 30)

Effect of discontinued operations 47 -

Effective tax rate on Mexican operations 118 22

Taxes generated by subsidiary’s foreign operations 3 ( 11)

Effective income tax rate 121% 11%

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h) Net operating losses

Under the current Mexican Income Tax Law, tax losses may be carried forward against taxable income generated in the next ten years. An analysis of the tax losses of IDEAL and subsidiaries as at 31 December 2015 is as follows:

Year of tax lossTax loss restated

for inflationYear of

expiration

2007 Ps. 4 2017

2008 3 2018

2009 101,346 2019

2010 56,789 2020

2011 462,882 2021

2012 484,700 2022

2013 2,015,434 2023

2014 1,529,875 2024

2015 2,469,849 2025

Total in Mexico Ps. 7,120,882

i) An analysis of the net operating losses of the Panamanian subsidiary is as follows:

Year of tax lossTax loss restated for

inflationYear of

expiration

Subsidiaries in Panama

2011 Ps. 64,386

2012 402

2013 147,147

2014 196,270

Total Ps. 408,205

*** In Panama, tax losses expire in five years (20% each year) and the corporate income tax rate is 25%.

j) Equity tax account balances

As at 31 December 2015 and 2014, the Company has the following equity tax account balances:

2015 2014

Restated contributed capital account (CUCA) Ps. 6,086,004 Ps. 5,959,076

Net taxed profits account (CUFIN) 3,747,454 1,996,139

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23. Segments

IDEAL operates primarily in Mexico. Additional information related to the Company’s operations is provided in Note 2.

At the date of the audit report on these consolidated financial statements, the Company’s main business segments include (i) investments in financial instruments, (ii) the construction, operation and maintenance of highway concessions, (iii) remote toll collection systems, (iv) equipment leasing, (v) water treatment plants, (vi) the Panama hydroelectric plant, (vii) multimodal transportation terminals, (viii) correctional facilities, and (ix) other segments.

2015

Investments in financial

instruments HighwaysRemote toll col-lection system Leasing

Water treat-ment plants

Panamahydroelectric

plantMultimodal trans-

portation terminalsCorrectional

facilitiesOther

segments Adjustments Consolidated total

External revenues Ps. 452,195 Ps. 7,578,363 Ps. 215,494 Ps. 6,000 $ 27,161 Ps. 718,854 Ps. 148,236 Ps. 953,946 Ps. 37,935 Ps. 10,138,184

Construction revenue 3,018,776 1,682,056 494,646 2,824,555 8,020,033

Intersegment revenue 1,050,132 103,596 427,975 $ ( 1,581,703)

Depreciation and amortization 30,579 1,043,055 7,999 2,581 696 435,707 51,099 58,103 6,471 ( 12,382) 1,623,908

Interest income 1,947,433 1,495,784 36,874 45,532 968,815 10 3,876 1,130,958 4,959 ( 3,236,042) 2,398,199

Interest expense ( 3,570,417) ( 3,704,812) ( 100,745) ( 566,244) ( 657,184) ( 98,570) ( 1,905,485) ( 18,669) 3,065,074 ( 7,557,052)

Other financing income 850,881 11,066 ( 25,946) 122,704 86,697 ( 38,454) ( 45) ( 16,954) ( 246) ( 9) 989,694

Capitalized expenses 333,835 52,145 172,247 3,817 ( 93,146) 468,898

Operating income 377,483 4,407,422 153,196 2,439 581,124 62,117 18,146 117,716 11,057 12,415 5,743,115

Property, furniture and equipment 178,948 1,434 17,986 3,445 3,608 18,292 791 37,453 216,665 ( 29,939) 448,683

Hydroelectric plant and equipment 11,011,208 11,011,208

Highways and other assets under concession 40,159,843 6,922,905 1,861,230 15,312,796 ( 530,969) 63,725,805

Total assets 47,837,541 73,667,139 2,749,269 1,244,461 7,928,000 11,559,160 1,455,671 21,383,991 436,397 ( 70,698,983) 97,562,646

2014


instrument HighwaysRemote toll col-lection system Leasing

Water treatment

plants

Panamahydroelectric



facilitiesOther


External revenues Ps. 26,522 Ps. 6,694,112 Ps. 471,438 Ps. 6,000 Ps. 64,789 Ps. 1,273,158 Ps. 149,846 Ps. 611,554 Ps. 41,065 Ps. 9,338,484

Construction revenue 3,094,509 6,291 821,960 2,677 1,524,381 5,449,818

Intersegment revenue 930,784 85,736 398,005 $ ( 1,414,525)

Depreciation and amortization 28,381 927,165 64,823 2,581 573 359,817 48,773 33,718 3,241 ( 13,460) 1,455,612

Interest income 1,983,504 1,773,886 28,831 557,788 937,709 2,710 753,119 2,941 ( 4,085,517) 1,954,971

Interest expense ( 1,695,833) ( 4,625,567) ( 1,192,240) ( 561,010) ( 574,157) ( 137,456) ( 1,408,257) ( 7,078) 4,047,112 ( 6,154,486)

Other financing income ( 1,625,605) 519,825 ( 38,667) 86,360 ( 142,582) ( 716,139) ( 60) ( 9,550) 69 3 ( 1,926,346)


Operating income 139,082 3,889,152 309,811 1,884 ( 9,880) 678,649 34,490 153,500 ( 6,666) 13,463 5,203,485

Property, furniture and equipment 155,602 2,002 7,968 4,015 9,486 558 34,049 200,656 ( 26,122) 388,214


Highways and other assets under concession

36,317,548 6,525,846 1,417,838 13,445,042 ( 302,723) 57,403,551

Total assets 36,780,931 61,356,890 1,942,403 1,108,438 7,136,771 10,330,055 1,463,126 18,241,931 398,568 ( 52,149,909) 86,609,204

24. Subsequent Events

On 18 March 2016, Promotora IDEAL entered into a stock purchase agreement with BBVA Bancomer, S.A. from whom it ac-quired an additional 20% stake in I+D México, S.A. de C.V. The sale price was Ps. 109,431, which Promotora IDEAL paid at the date of the agreement. As a result of this acquisition, Promotora IDEAL now holds a 70% interest in this investee.

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23. Segments

IDEAL operates primarily in Mexico. Additional information related to the Company’s operations is provided in Note 2.

At the date of the audit report on these consolidated financial statements, the Company’s main business segments include (i) investments in financial instruments, (ii) the construction, operation and maintenance of highway concessions, (iii) remote toll collection systems, (iv) equipment leasing, (v) water treatment plants, (vi) the Panama hydroelectric plant, (vii) multimodal transportation terminals, (viii) correctional facilities, and (ix) other segments.

2015


instruments HighwaysRemote toll col-lection system Leasing

Water treat-ment plants

Panamahydroelectric



facilitiesOther


External revenues Ps. 452,195 Ps. 7,578,363 Ps. 215,494 Ps. 6,000 $ 27,161 Ps. 718,854 Ps. 148,236 Ps. 953,946 Ps. 37,935 Ps. 10,138,184

Construction revenue 3,018,776 1,682,056 494,646 2,824,555 8,020,033

Intersegment revenue 1,050,132 103,596 427,975 $ ( 1,581,703)

Depreciation and amortization 30,579 1,043,055 7,999 2,581 696 435,707 51,099 58,103 6,471 ( 12,382) 1,623,908

Interest income 1,947,433 1,495,784 36,874 45,532 968,815 10 3,876 1,130,958 4,959 ( 3,236,042) 2,398,199

Interest expense ( 3,570,417) ( 3,704,812) ( 100,745) ( 566,244) ( 657,184) ( 98,570) ( 1,905,485) ( 18,669) 3,065,074 ( 7,557,052)

Other financing income 850,881 11,066 ( 25,946) 122,704 86,697 ( 38,454) ( 45) ( 16,954) ( 246) ( 9) 989,694


Operating income 377,483 4,407,422 153,196 2,439 581,124 62,117 18,146 117,716 11,057 12,415 5,743,115

Property, furniture and equipment 178,948 1,434 17,986 3,445 3,608 18,292 791 37,453 216,665 ( 29,939) 448,683


Highways and other assets under concession 40,159,843 6,922,905 1,861,230 15,312,796 ( 530,969) 63,725,805

Total assets 47,837,541 73,667,139 2,749,269 1,244,461 7,928,000 11,559,160 1,455,671 21,383,991 436,397 ( 70,698,983) 97,562,646

2014


instrument HighwaysRemote toll col-lection system Leasing

Water treatment

plants

Panamahydroelectric



facilitiesOther


External revenues Ps. 26,522 Ps. 6,694,112 Ps. 471,438 Ps. 6,000 Ps. 64,789 Ps. 1,273,158 Ps. 149,846 Ps. 611,554 Ps. 41,065 Ps. 9,338,484

Construction revenue 3,094,509 6,291 821,960 2,677 1,524,381 5,449,818

Intersegment revenue 930,784 85,736 398,005 $ ( 1,414,525)

Depreciation and amortization 28,381 927,165 64,823 2,581 573 359,817 48,773 33,718 3,241 ( 13,460) 1,455,612

Interest income 1,983,504 1,773,886 28,831 557,788 937,709 2,710 753,119 2,941 ( 4,085,517) 1,954,971

Interest expense ( 1,695,833) ( 4,625,567) ( 1,192,240) ( 561,010) ( 574,157) ( 137,456) ( 1,408,257) ( 7,078) 4,047,112 ( 6,154,486)

Other financing income ( 1,625,605) 519,825 ( 38,667) 86,360 ( 142,582) ( 716,139) ( 60) ( 9,550) 69 3 ( 1,926,346)


Operating income 139,082 3,889,152 309,811 1,884 ( 9,880) 678,649 34,490 153,500 ( 6,666) 13,463 5,203,485

Property, furniture and equipment 155,602 2,002 7,968 4,015 9,486 558 34,049 200,656 ( 26,122) 388,214


Highways and other assets under concession

36,317,548 6,525,846 1,417,838 13,445,042 ( 302,723) 57,403,551

Total assets 36,780,931 61,356,890 1,942,403 1,108,438 7,136,771 10,330,055 1,463,126 18,241,931 398,568 ( 52,149,909) 86,609,204

24. Subsequent Events

On 18 March 2016, Promotora IDEAL entered into a stock purchase agreement with BBVA Bancomer, S.A. from whom it ac-quired an additional 20% stake in I+D México, S.A. de C.V. The sale price was Ps. 109,431, which Promotora IDEAL paid at the date of the agreement. As a result of this acquisition, Promotora IDEAL now holds a 70% interest in this investee.

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For information:

Impulsora del Desarrollo y el Empleo en América Latina S.A.B. de C.V. y Subsidiarias

Lago Zurich 245 Edif. Carso Piso 17 Col. Ampliación Granada 11529 México City

Rodrigo MondragónTel. 1103 1347

[email protected]

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www.ideal.com.mx

Lago Zurich 245 Edif. Carso Piso 17 Col. Ampliación Granada 11529 Mexico City

www.ideal.com.mx

annual report / 2015 - ideal.com.mx · i+d (electronic toll payment system iave) the company has a...

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