Business & Investment Guide

Business & Investment Guide 2015 / 2016 Steel worker. l EY Machu Picchu citadel, Cusco. Photograph: Enrique Castro-Mendívil l PromPerú, Costa Verde of Miraflores - Lima. Photograph: Carlos Ibarra l PromPerú Prepared by:

Board of Directors José Antonio Blanco Cáceres Executive Chairman Bank Association (Asbanc) Director Holder Christian Laub Benavides Vice Chairman Lima Stock Exchange (Bolsa de Valores de Lima) Chairman Holder Luis Valdivieso Director Pension Fund Association (Asociación de AFP) Chairman Holder Rafael Alcázar Director Association of Capital Market Participants (Procapitales) Chairman Holder Alejandro Gómez Saba Director Finance Association (Asociacion Peruana de Finanzas) Chairman Holder Martín Pérez Monteverde Director National Confederation of Private Business Association (CONFIEP) Chairman Holder Eduardo Morón Pastor Director Insurance Association (APESEG) Chairman Holder Oscar Rivera Rivera Executive Chairman Bank Association (Asbanc) Chairman Alternate Francis Stenning De Lavalle Vice Chairman Central Securities Depository (Cavali) Chairman Alternate Víctor Sánchez Azañero Director Central Securities Depository (Cavali) CEO Holder Gerardo Gonzales Arrieta Director Association of Capital Market Participants (Procapitales) CEO Alternate Segundo Capristán Núñez Director Finance Association (Asociacion Peruana de Finanzas) CEO Alternate Gabriel Amaro Alzamora Director National Confederation of Private Business Association (CONFIEP) CEO Alternate Felipe Morris Guerinoni Director Insurance Association (APESEG) Vicepresident Alternate Roberto Hoyle Past President Inteligo Sociedad Agente de Bolsa Chairman Executive Team Ana María Soldevilla Executive Director Lima Stock Exchange (Bolsa de Valores de Lima) Chief Corporate Relations & Marketing Officer Contact Us E-mail: info@inperu.pe Phone: +51-1 619 3333 Ext.2169 Web: www.inperu.pe

Founders: inperu is a non-profit Peruvian association founded by the main business organizations of the Peruvian market: APEF, APESEG, ASBANC, AAFP, BVL, Cavali, CONFIEP and Procapitales. Our main objectives Promote the growth of investment opportunities in Peru and the development of the Peruvian capital and financial markets by providing, on a regular basis and structured format, the following information to foreign investors: (i) Most relevant political developments, (ii) Changes in fiscal and monetary policy, (iii) Market infrastructure and recent changes and (iv) Most important local projects / issuers. Introduce foreign investors to Peruvian participants (issuers / brokers / market authorities).

Advisory Committee Roque Benavides Compañía de Minas Buenaventura S.A.A. CEO Walter Bayly Credicorp CEO Jorge Ramos AFP Integra S.A. CEO Mariela García De Fabbri Ferreycorp CEO Alfredo Thorne Thorne & Associates CEO Carlos Saco-Vertiz Tudela Sacovertiz Abogados Socio Principal

Ancient pottery of cochas. Photograph: Luis Gamero l PromPerú Book park, Miraflores - Lima. Photograph: Leslie Searles l PromPerú Words from the President of inperu Dear reader, On behalf of inperu association, I am pleased to introduce our Business & Investment Guide 2015-2016: Exporting Peru to the world, kindly prepared by EY. This publication is a tool for foreign investors, providing key information on the country s current economic perspective, and its main tax, legal and labor aspects on incorporating businesses in Peru. It also includes general information on how to invest and do business in the country, as well as a detailed sector by sector analysis. Nowadays, the global environment forces the corporations, independent on their size, to be aware of the opportunities and challenges they can face. Keeping track of these changes will establish the difference between leaders and followers. In the latest years, Peru has been one of the countries that are experiencing a constant development based on the positive environment and the economic perspective. Being informed of the Peruvian fiscal and regulatory regime will help your company to take advantage for your business. inperu promotes this country as one of the most important territories in LatAm for international investment. We hope you find this guide of your interest and feel free to share it with your colleagues and anyone you think would be interested. Yours sincerely, José Antonio Blanco Executive Chairman

Chan Chan Citadel, Trujillo - La Libertad. Photograph: Walter Silvera l PromPerú Sacsayhuaman's Fortress - Cusco. Photograph: Gihan Tubbeh l PromPerú Foreword I. Background Information Peru is one of the most important countries in Latin America. Some of its diverse characteristics include a variety of climates, a large territorial extension, important natural resources, people with great skills and high academic standards and a solid economic and industrial background. Today, Peru is considered to be one of the world s leading emerging market, with an important, recent history of economic stability, based on an uninterrupted average annual growth over the past 14 years of 5.6% of its Gross Domestic Product (GDP), as well as a people who stand out for their productivity and entrepreneurship. These reasons make Peru an excellent destination for foreign investment. This guide for business and investment is a tool for foreign investors, providing key information on the country s current economic situation and on the principal tax, legal and labor issues and on incorporating businesses in Peru, as well as general information on how to invest and do business in the country. Business & Investment guide 5

Royal Tombs of Sipán, Lambayeque Perú. Photograph: Inés Menacho l PromPerú Royal Tombs of Sipan Museum, Trujillo - La Libertad. Photograph: Renzo Tasso l PromPerú Contents I. Background Information 1 Government 11 2 Geography 12 3 Currency 13 4 Economy 13 5 Country Risk and Investment Grade 27 6 Investment 29 7 Population and Human Development 32 8 Poverty and Employment 35 II. Business Environment 1 Investment Promotion Conditions 39 2 Trade Agreements 44 3 Integrated Latin American Market - MILA 51 4 Mechanisms for the Promotion of Investment in Infrastructure and Public Services 52 III. Sectorial analysis 1 Mining 59 2 Financial System, Securities Market and Pension System 68 3 Electricity 73 4 Energy 74 5 Hydrocarbons 75 6 Construction 77 7 Manufacture 78 8 Trade and Domestic Consumption 78 9 Agriculture and Livestock 79 10 Fisheries 80 11 Transport and Communications 82 12 Automotive 84 13 Food and Beverages 85 14 Tourism, Cuisine and Hospitality 87 IV. Incorporating a company in Peru 1 Joint Stock Companies 91 2 Closely Held Corporations 91 3 Publicly Held Corporations 92 4 Limited Liability Companies 92 5 Branches 92

Contents V. Taxes 1 Direct Taxes 96 2 Indirect Taxes 104 3 Municipal Taxes 105 4 Customs System 105 5 Legal Stability Agreements 109 6 Mining Law 110 VI. Labor and Employment Law 1 Hiring System 115 2 Current Fringe Benefits 116 3 Taxes and Contributions Levied on Remunerations 117 4 Termination of the Employment Contract 118 5 Immigration 119 6 Supervisory Body 120 VII. Accounting Standards 1 Accounting Standards 123 Exhibits Principal regulatory and promotion entities in Peru 129 Economic promotion institutions 1 inperu 133 2 Ministry of Foreign Affairs: Executive Office for Economic Promotion MRE - DPE 133 3 Ministry of Foreign Trade and Tourism - MINCETUR and PromPeru 135 4 Agency for the Promotion of Private Investment - ProInversion 136 5 Peruvian Foreign Trade Association - ComexPeru 137 6 National Confederation of Private Business Institutions - CONFIEP 138 7 Association of Capital Markets Business Promoters - Procapitales 138 8 Lima Chamber of Commerce - CCL 139 9 National Association of Industries - SNI 140 10 Peruvian Association of Exporters - ADEX 140 11 National Institute of Statistics and Information - INEI 140 Directory of principal Chambers of Commerce 145

I Archeological Set of Caral, Barranca - Lima. Photograph: Michael Tweddle l PromPerú Background Information

I. Background Information 1 I Government Peru is a constitutional democratic republic with a multi-party system. Under the current Constitution of 1993, the President is the Head of State and Government, elected for a five-year period, without the possibility of running for immediate re-election. The President designates the Prime Minister and the rest of the Cabinet of Ministers. There is a 130-member unicameral Congress elected for a five-year term. Bills may be proposed either by the Executive or by the Legislative Branches, and they become law after being passed through Congress and enacted by the President. The Judiciary and the National Electoral Board are independent institutions. The Peruvian government is directly elected and voting is compulsory for all citizens between the ages of 18 and 70. In the most recent democratic elections of 2011, Ollanta Humala Tasso was elected President of the Republic of Peru. Peru has some of the best macroeconomic indicators in Latin America, with an expected Gross Domestic Product (GDP) growth rate well above the regional average. Country Overview Type of Government Constitutional Republic. Legal System Constitutional State of law based on laws and codes. Executive Branch Head of State and Government: President Ollanta Humala Tasso (since July 2011). Elections: Every five years by popular vote (consecutive re-election not permitted). Next elections: April 2016. Cabinet: The Cabinet of Ministers is appointed by the President. Legislative Branch Unicameral Congress. 130 seats. Members are elected by popular vote for a period of five years. Next elections: April 2016. Judiciary Branch Judges are appointed by the National Judge Selection and Evaluation Board. Main Autonomous Entities Superintendency of Banking and Insurance (SBS) and Private Pension Fund Management Companies (AFP). Central Reserve Bank of Peru (BCRP). Constitutional Court. National Electoral Board. Controller General s Office. Regional Governments 25 Regional Governments (including the Constitutional Province of Callao). Metropolitan Municipality of Lima. Local Governments 195 Provincial Municipalities. 1,647 District Municipalities (December 2014). International Relations Peru has numerous economic cooperation and Free Trade Agreements (FTAs) with multiple countries (see Section II.2: Trade Agreements). Member of the United Nations since 1945 and a member of the Security Council in 2006 and 2007. Member of the World Trade Organization (WTO) since 1995. Member of the Pacific Alliance since its fundation in 2011. In 1998, it became a member of the Asia Pacific Economic Cooperation (APEC) hosting the APEC and EU-LAC summits in 2008 and the Arab-South American Summit (ASPA) in 2012. In 2013, it hosted the World Economic Forum on Latin America. Peru was the site of the COP 20 (Climate Summit organized by the UN) in 2014. In October 2015 it will be the site of the World Bank (WB) and International Monetary Fund (IMF) Annual Assembly in 2015; and the APEC Summit in 2016. Sources: Peruvian Constitution / CIA - The World Factbook / United Nations (UN) / Ministry of Foreign Affairs (MRE) Business & Investment guide 11

2 I Geography Peru is located on the west central coast of South America. It is bordered by the Pacific Ocean to the west, by Chile to the south, by Bolivia and Brazil to the east, and by Colombia and Ecuador to the north. With a total land area of 1,285,215.60 km2, Peru is the third largest country in South America after Brazil and Argentina, and can be divided geographically into three natural regions: Although the Coast, a narrow strip along the ocean measuring approximately 3,080 km long, accounts for only 10.7% of Peru's territory, it is home to approximately 17.4 million inhabitants (est. 2015). Lima, the political and financial capital of the country, is located in this Region. The Highlands, or Sierra, is the site of the Andean Mountain Range, covering 31.8% of national territory and serving as home to approximately 10.9 million inhabitants (est. 2015). This Region contains the country's major mineral deposits. The Amazon Rainforest or Selva is the largest region and occupies 57.5% of the country s territory, rich in petroleum, gas and forestry resources. There are approximately 2.9 million (est. 2015) inhabitants in this area. Peru Population 31.2 million Urban: 76.6% Rural: 23.4% Area 1,285,215.60 km 2 *Currency Nuevo Sol (S/.) S/.1 = US$ 0.335 US$1 = S/. 2.981 Principal Languages Spanish / Quechua / Aymara Religion Climate Time Zone Natural Resources Freedom of religion Principally Roman Catholic Ranges from tropical in the Amazon Region to dry along the Coast. Temperate to very cold in the Highlands GMT -5 (five hours behind Greenwich Mean Time). There is no daylight savings time, and there is only one time zone throughout the entire country. Gold, copper, silver, zinc, lead, hydrocarbons, fishing, phosphates, and agricultural products *Interbank exchange rate as of December 31, 2014 Sources: Central Reserve Bank of Peru (BCRP) / International Monetary Fund (IMF) 12

I. Background Information 3 I Currency The official currency of Peru is the Nuevo Sol (S/.). The country has a free-floating exchange rate regime, with the government occasionally intervening for purposes of stabilization. As of December 31, 2014, banks were buying U.S. Dollars at S/.2.979 and selling them at S/.2.981. The gray market has very similar exchange rates. According to estimates as of the end of 2014, the Nuevo Sol is one of the least volatile currencies in the world, exhibiting firmness in the face of international market and currency fluctuations. The Central Reserve Bank of Peru (BCRP) implements fiscal stimulus and liquidity control measures. There are no restrictions or limitations on the number of bank accounts in foreign currency or the remittance of funds abroad that an individual or legal entity may make. Exchange Rate Evolution: Nuevos Soles per US$1 (end of each year) 4 3.5 3 2.5 2 1.5 1 0.5 0 3.28 3.43 3.20 3.00 3.14 2.89 2.81 2.70 2.80 2.98 2.55 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Source: Central Reserve Bank of Peru (BCRP) 4 I Economy With a population of 31.2 million (the estimate for 2015) Peru also has rich deposits of copper, silver, gold, lead, zinc, natural gas, petroleum, and urea. Owing to climate variations in its regions, as well as its natural and cultural resources, it is internationally classified as a mega-diverse country. Peru s economy reflects its varied geography. The abundance of resources is found mainly in mineral deposits in the mountainous regions, while its extensive maritime territory has always traditionally yielded excellent fishing resources. Despite the fluctuations of the world economy, the administration has resisted pressures for fiscal spending and has used the savings generated by the high prices of commodities between 2006 and 2008, investing since 2011 in infrastructure, paying off part of the public debt, and increasing assets. Peru has achieved significant progress in its macroeconomic performance in recent years, with very dynamic GDP growth rates, stable currency exchange rates, and low inflation. In fact, over the last fourteen years, the Peruvian economy has had the lowest annual average inflation rate in Latin America, at 2.5%, below that of Chile (2.9%), Colombia (4.6%), and Brazil (6.0%). There is also its impressive annual growth rate of approximately 2.4% of its GDP achieved in 2014, which gives the country the privileged ranking of one of the fastest-growing economies in the Region, consistently achieving an accumulated annual average growth of approximately 5.3% over the past 14 years. This dynamism has been driven by the rise in world commodity prices, market policies beneficial to investors, and aggressive free trade strategies. Over the past decade, Peru s GDP has tripled as a result of the country s economic growth, moving increasingly towards a middle and upper-middle income economy. Its rapid expansion has contributed to the reduction of the national poverty rate by almost 18% in the last seven years, to around 23.1% of its total population for 2014. Business & Investment guide 13

Gross Domestic Product (GDP) US$204 billion (estimate for 2014) GDP per Capita US$6,623 (estimate for 2014) GDP per Capita (Purchasing Power Parity / PPP) US$11,989 (estimate for 2014) Net International Reserves US$62,307 billion (as of December 31, 2014) Foreign Debt US$17.8 billion (estimate for 2014) Total Public Debt US$40.19 billion or 19.7% of the GDP (estimate for 2014) Fixed Gross Investment 25.6% of the GDP (estimate for 2014) Unemployment Rate 5.5% (estimate for 2014) Population Living Below the Poverty Line 23.9% (estimate for 2014) Minimum Wage Principal Destinations of Peruvian Exports Principal Exports Principal Countries of Origin of Imports to Peru Principal Imports S/.750 (as of December 31, 2014, approximately US$252) Germany, Brazil, Canada, Colombia, Chile, China, South Korea, Italy, Japan, Spain, Switzerland, United States, and Venezuela Gold, copper, silver, zinc, lead, crude oil and byproducts, coffee, potatoes, asparagus, paprika, organic bananas, mango, cacao, quinoa, grapes, berries, textiles, fishmeal, and urea Germany, Argentina, Brazil, Chile, China, Colombia, South Korea, Ecuador, United States, and Mexico Petroleum and byproducts, plastics, machinery, vehicles, iron and steel, wheat and paper Sources: Central Reserve Bank of Peru (BCRP) / Apoyo / Ministry of Economy and Finance (MEF) / International Labor Organization (ILO) / National Institute of Statistics and Information (INEI) / International Monetary Fund (IMF) / EY According to the International Monetary Fund (IMF), Peru is considered a rising star that is part of the new wave of leading emerging markets (2013), and today has solid fundamentals, a framework of sensible policies, and a prudent macroeconomic approach, all of which enables it to enjoy sustained growth and reduced vulnerability. Additionally, in 2014, the IMF has declared that "Peru has experienced a decade of deep growth and (...) the macroeconomical policies applied (...) aloud to achieve an impulsive development and to bring economical stability to the country. It is strongly encouraged the implementation of policies and measures that have been taking place from a monetary, fiscal an infraestructural side". The country s recent boost in economic growth has much to do with the monetary and fiscal policies applied over the past two decades, reducing the public debt level (from 32.3% of the GDP in 2006 to 19.7% in 2014 and an estimated 19.6% in 2015). All of this has gone hand-in-hand with the liberalization of the goods and labor markets, opening up trade through multiple recent international trade agreements, direct foreign investment, and the maximization of the revenues resulting from its rich natural resources. Peru is also reaping the benefits of the increasing size of its market and domestic consumption, and the development of its financial sector, which can be seen, for example, in the increase of private consumption by an estimated 4.3% in 2014 over the previous year (estimated at 4.5% and 4.8% for 2015 and 2016, respectively). Likewise, as of December 31, 2014, net international reserves stood at approximately 30.5% of the estimated GDP as of the same date. The Peruvian economy for 2014 is expected to be the fastest growing in Latin America, sharing this position with Colombia. This is driven principally by private consumption, domestic demand (2.5% in 2014 and estimated 4.7% for 2015) improved employment indicators, and the recovery of total exports. At the same time, the growth of fixed private investment in 2015 is expected to be situated at 3.0% (5.2% for 2016) while growth in public investment is estimated at 12.0% for 2015 and 11.6% for 2014. The following chart presents the GDP and GDP per capita (measured in Purchasing Power Parity) of the main economies of Latin America according to the IMF, as of 2014 and estimated for 2019: 14

I. Background Information GDP and GDP per Capita (Purchasing Power Parity-PPP) of the Principal Economies of Latin America Country GDP in US$ Billions (PPP) 2014 2019 GDP per Capita in US$ (PPP) GDP in US$ Billions (PPP) GDP per Capita in US$ (PPP) Brazil 3,073 15,153 3,282 18,172 Argentina 927 22,101 1,008 22,715 Colombia 642 13,459 883 17,489 Venezuela 546 17,917 611 18,574 Peru 377 11,989 541 15,953 Chile 410 23,165 551 29,946 Mexico 2,143 17,925 2,843 22,618 Source: International Monetary Fund (IMF) Peru has signed a number of Free Trade Agreements (FTAs) covering approximately 95% of its exports as of December 31, 2014. Free Trade Agreements (FTAs) have been entered into with the United States, China, Thailand, the European Union, the European Free Trade Association (EFTA), the Southern Common Market (MERCOSUR), South Korea, Canada, Costa Rica, Chile, Mexico, Venezuela, Panama, Japan, Singapore, and Cuba. It also has 28 Bilateral Reciprocal Investment Promotion and Protection Agreements (BRIPPAs). Finally, Peru has commenced trade negotiations corresponding to the Trans-Pacific Partnership Agreement, which includes Chile, the United States, Singapore, Australia, and New Zealand, among others (for more information, go to section II.2 Trade Agreements). The Free Trade Agreement (FTA) with the United States entered into force on February 1, 2009, opening the way to greater trade and investment between both countries. Likewise, the Free Trade Agreement (FTA) with China became effective in 2010. More recently, the Free Trade Agreement (FTA) with Japan came into force on March 1, 2012. Additionally, Peru entered into the Framework Agreement for the Pacific Alliance in April 2011, a trading bloc that it forms part of together with Chile, Colombia, and Mexico, aimed at encouraging regional integration and the greater growth, development, and competitiveness of their economies, as well as achieving the free circulation of goods, services, capital, and people. Peru s main exports are gold, copper, petroleum oil, natural gas, zinc, lead, iron, fishmeal, and coffee, and its principal trading partners are the United States, China, Brazil, Colombia, Chile, Ecuador, Argentina, Switzerland, South Korea, Japan, Canada, Germany, Spain, Mexico, and Italy. Business & Investment guide 15

Evolution of Financial Indicators US$ Millions 250,000 Index 100,000 200,000 150,000 100,000 12,884.20 17,524.79 23,374.57 20,629.35 14,167.20 15,754.40 14,724.48 19,473.31 202,000 204,000 10,000 2,435.04 3,710.39 193,000 7,048.67 4,802.25 178,371 897.93 983.06 769.99 1,100.431,444.75 1,063.50 153,811 1,106.50 640.70 144,538 126,869 Net Foreign Debt International Reserves GDP Inflación 107,251 100,261 99,993 92,324 Sources: Central Reserve Bank of Peru (BCRP) / Prepared by EY 641.72 515.41 116,441 142,743 Equities Volume Traded Stock Exchange Capitalization Lima Stock Exchange (BVL) General Index Debt Instruments Volume Traded 750.00 750.00 120,653 120,520 79,389 69,704 6.65 65,663 61,356 63,991 62,307 3.48 56,626 4.74 3.93 61,472 50,000 44,105 48,815 37,683 2.48 1.14 31,195 33,135 2.08 2.65 2.90 3.22 27,688 15,415 19,015 1.49 10,194 17,274 933 921 12,631 14,097 1,214 9,287 2,127 4,647 5,110 4,007 1,146 1,349 5,027 6,241 6,108 4,101 1,078 126 254 1,276 1,276 0-1,062-613 -2,307 0.25-942 -20,000 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 1,000 100 10 1 0 Appreciation / Depreciation and Inflation As of the end of 2014, the inflation rate in Peru was 3.2% (real rate of 2.9% in 2013). The annual depreciation rate of the Nuevo Sol against the U.S. Dollar for 2014 is 6.4% (real depreciation rate of 9.6% in 2013). Depreciation of the Nuevo Sol Appreciation of the Nuevo Sol 12.0 10.0 8.0 6.0 4.0 2.0 0.0-2.0-4.0-6.0-8.0 11.1 3.7 3.7 3.1-0.1 1.5 0.3 2.5-1.1 3.5-1.9 1.5-3.4 1.1-0.7-6.5-6.2 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 3.9-4.4 6.7 3.0 0.2 2.1 4.7-2.5 2.6-4.2 9.6 2.9 6.4 3.2 Inflation Appreciation / Depreciation Sources: Central Reserve Bank of Peru (BCRP) / EY By the end of 2015, inflation is expected to be within the target range set by the Central Reserve Bank of Peru (BCRP), wich is between 1.0% and 3.0%. Meanwhile, as of January 31, 2015, the average interbank interest rate in local currency set by the BCRP was 3.8%, while the preferential corporate rate was 4.70%. 16

I. Background Information Dollarization Rate of Bank Deposits 60 50 40 53.0 46.8 46.1 45.1 38.0 40.7 38.1 30 20 10 0 2008 2009 2010 2011 2012 2013 2014 Source: Central Reserve Bank of Peru (BCRP) Peru s Principal Economic Activities Peru s main economic activities include agriculture, fisheries, mining, the exploitation of petroleum and gas, and the manufacturing of goods, most notably textiles. The sharply contrasting geographical areas of Peru make it a particularly diverse country, with a wide variety of ecosystems, and thus, flora and fauna. During 2014, the non-traditional product markets with the most exports were livestock (21.2%) and handycrafts (61.9%). The principal non-traditional products exported in 2014 were quinoa (US$196 millions, 147.11% increase), mangoes (US$138 millions, 3.60% increase), asparagus (US$533 millions, -7.00% decrease), organic banano (US$119 millions, 33.99% increase), grapes (US$641 millions, 44.39% increase), berries (US$30 millions, 71.24% increase), refrigerated asparagus (US$38 millions, -24.05% decrease), avocado (US$384 millions, -6.96% decrease), cacao (US$152 millions, 82.53% increase), artichokes (US$92 millions, 3.81% increase), tangerine (US$60 millions, 38.78% increase), paprika and capsicums (US$41 millions, -8.88% decrease), natural calcium phosphates; refined copper wire, stout bobtail squid, common squid, and giant squid, whether frozen, dried, or in brine. In terms of traditional products, the most significant were gold, copper, lead, zinc, gas, petroleum oil, coffee, and fishmeal. In mining, according to the Mineral Commodity Summaries Publication authored by the U.S. State Department, in 2013 Peru ranked third in the world in the production of silver, copper, tin and zinc, fourth in lead, molybdenum and boron, fifth in mercury and gold, besides having large deposits of iron ore, phosphates and manganese, petroleum, and gas. The principal destinations for Peruvian copper are China and Japan, gold to Switzerland and Canada, and zinc and silver to China and South Korea. One of the economic activities that is only recently being exploited and which shows great potential is that of forestry resources (cedar, oak, and mahogany, mainly). Business & Investment guide 17

Principal industries in the different regions of Peru Au Ag Cu Zn Pb Fe Po C Petroleum Gold Silver Copper Natural Gas Zinc Lead Iron Phosphates Sugar Refinery Fishmeal Plant Textile Industry Cement Plant Chemicals Plant Oil Refinery Metals Industry Foundry Metal-Mechanical Plant Asparagus Grapes Mango Coffee Cabo Blanco Piura Talara Po Chiclayo Pacasmayo Chimbote Trujillo Paramonga Huacho - Chancay C Lima - Callao C Cajamarca Au Pisco Ag Zn Pb C Pucallpa Ag Pb La Oroya Cu Zn Au Ag Au Zn Ag Fe Cusco Zn Au Ica Ag C C Puno Arequipa Mollendo Ilo Iquitos Cu Source: EY Gross Domestic Product (GDP) / Trade Balance The Gross Domestic Product (GDP) estimate for 2014 is US$204 billion. It is estimated that at the end of 2014, total FOB exports came to US$37.9 billion, while imports totaled US$42.4 billion. The principal exports came from the mining, hydrocarbons, and agricultural and livestock industries. Real Gross Domestic Product (GDP) of Peru (in US$ Billion) 300 250 200 150 100 50 53.3 53.9 56.8 61.7 69.7 79.4 92.3 108 128 127 154 177 193 202 204 218 238 256 274 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20132014* 2015*2016*2017*2018* *Estimated Sources: Central Reserve Bank of Peru (BCRP) / Ministry of Economy and Finance (MEF) / International Monetary Fund (IMF) / EY 18

I. Background Information Gross Domestic Product (GDP) (Annual Percentage Change) 12.0 10.0 8.0 6.0 4.0 6.3 7.5 8.5 9.1 8.5 6.5 6.0 5.8 4.8 2.0 0.0 2.4 1.0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015* GDP *Estimated Source: Central Reserve Bank of Peru (BCRP) Gross Domestic Product (GDP) by Industry - Annual % Change 2008 2009 2010 2011 2012 2013 2014 2015* Agriculture and Livestock 8.0 1.3 4.3 4.1 5.9 1.0 1.4 2.6 Fisheries 3.0-3.4-19.6 52.9-32.2 18.1-25.3 17.2 Mining 7.3-1.4-0.7-1.1 2.2 4.3-2.2 6.3 Hydrocarbons 10.3 16.1 28.4 19.7 2.3 7.2 3.9 3.2 Manufacturing 8.6-6.7 10.8 8.6 1.5 5.1-2.9 3.7 Electricity and Water 8.1 1.1 8.1 7.6 5.8 5.5 4.9 5.3 Construction 11.0-0.5 12.5 8.9 7.2 8.9 2.1 5.7 Commerce 16.8 6.8 17.8 3.6 15.8 5.9 4.4 4.9 Other Services 8.7 3.6 8.8 7.0 7.3 6.2 4.8 4.9 GDP 9.1 1.0 8.5 6.5 6.0 5.8 2.4 4.8 *Estimated Source: Central Reserve Bank of Peru (BCRP) Peru Gross Domestic Product (GDP) by economic sector in %, using the economic structure with a base estimate year of 2007 Other Services* 45.3% Manufacturing 16.6% Mining and Hydrocarbons 14.4% Commerce 10.2% Agriculture and livestock 6.0% Construction 5.1% Electricity and water 1.7% Fisheries 0.7% *According to the BCRP this economic sector in an heterogeneous group of services or invisible trades with the rest of the world, which includes transactions related to the areas of transport, travels, communications, insurances, and other services. Services transactions are registered when the service is provided or received. Source: National Institute of Statistics and Information (INEI) / Institute of Economics and Development of the Lima Chamber of Commerce (IED-CCL) Business & Investment guide 19

Net International Reserves (in US$ Millions) 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 8,613 Dec. 2001 9,598 10,194 Dec. 2002 Dec. 2003 12,631 Dec. 2004 14,097 17,275 Dec. 2005 Dec. 2006 27,689 Dec. 2007 31,196 Dec. 2008 33,135 Dec. 2009 44,105 48,816 Dec. 2010 Dec. 2011 63,991 Dec. 2012 65,663 Dec. 2013 62,307 Dec. 2014 Source: Central Reserve Bank of Peru (BCRP) Emerging Economies Indicators: Net International Reserves vs. Gross Domestic Product (GDP) and Fiscal Deficit/Surplus (Estimated for 2013) Net International Reserves / GDP (in %) 40 China 35 Israel 30 25 Hungary Peru Above average Fiscal Deficit / Surplus -8.5-7.5-6.5 India -5.5-4.5 Poland 20-3.5 15 Brazil 10-2.5-1.5 Turkey Mexico Colombia -0.5 Russia Chile 0.5 1.5 Below average 5 Argentina Below average Source: Central Reserve Bank of Peru (BCRP) 0 Above average Gross Domestic Product (GDP) by spending type (percent change) Variables 2008 2009 2010 2011 2012 2013 2014 2015* Gross Domestic Product 9.1 1.0 8.5 6.5 6.0 5.8 2.4 4.8 Imports 26.2-16.0 29.3 9.8 10.4 3.6-1.3 2.9 Domestic Demand 12.3-2.8 13.1 7.1 7.3 7.0 2.5 4.7 a. Private Consumption 8.7 2.4 6.3 6.4 5.8 5.3 4.3 4.5 b. Public Consumption 2.1 16.5 7.9 4.8 9.4 6.7 6.4 6.6 Private Investment 25.9-15.1 22.1 11.4 13.5 6.4-1.5 3.0 Public Investment 33.6 21.2 26.7-18.0 20.8 12.1-3.6 12.0 Exports 9.9-2.9 4.8 8.8 5.4-0.9-2.2 3.4 *Estimated Source: Central Reserve Bank of Peru (BCRP) 20

I. Background Information Domestic demand (percent change) 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0.0-2.0-4.0 12.3% 13.1% 11.8% 10.3% Average 2006-2012: 8.4% 7.1% 7.3% 7.0% 4.7% 2.5% -2.8% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015* *Estimated Source: Central Reserve Bank of Peru (BCRP) Number of companies with annual revenues greater than US$360 million 200 150 30 30 30 100 50 6 6 3 8 13 15 15 15 20 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Companies with Turnover >= US$360 MM Companies with Turnover >= US$725 MM Companies with Turnover >= US$545 MM Companies with Turnover >= US$900 MM Sources: Top 10k Peru Top Publications / Peruvian Business Directory Duns & Bradstreet / Prepared by EY Real average income per capita by geographic areas (in US$) 500.0 450.0 400.0 350.0 300.0 250.0 200.0 150.0 100.0 50.0 0.0 307.9 325.0 120.3 136.9 378.9 165.5 392.2 182.8 *Decrease mainly explained by Peruvian Nuevos Soles exchange rate depreciation Source: National Institute of Statistics and Information (INEI) 2014 439.9 504.3 470.4 235.2 213.7 222.6 2007 2008 2009 2010 2011 2012 2013* Urban Rural Business & Investment guide 21

Peruvian Social structure transformation by Social Economic Level (SEL) - urban Socio economic status - Urban Peru (2000) Socio economic status - Urban Peru (2014) Socio economic status - Urban Lima (2014) SEL AB 10% SEL C 20% SEL D 30% SEL E 40% SEL A 3% SEL B 14% SEL C 32% SEL D 30% SEL E 21% SEL A 5% SEL B 19% SEL C 41% SEL D 26% SEL E 9% Sources: INEI / APEIM / Rolando Arellano Public spending (real percent change) 16.0 14.0 12.0 10.0 8.0 6.0 4.0 2.0 0 13.6 12.5 11.8 11.8 11.8 12.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2010 *Estimated Source: Central Reserve Bank of Peru (BCRP) 12.5 12.4 12.6 14.7 15.9 14.1 13.3 8.4 8.3 3.0 2009 2011 2012 2013 2014* 2015* Balance of payments (in US$ Millions) 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0-2,000-4,000 1,628 2,753 9,654 3,169 1,043 11,192 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014* 4,724 14,827 2,907-2,698 0 2015* *Estimated Source: Central Reserve Bank of Peru (BCRP) 22

I. Background Information Trade Balance (in US$ Billions) 50 46.4 46.2 50 40 30 20 28.1 20.5 31.0 30.1 27.1 21.5 35.8 30.2 38.2 42.5 42.5 43.4 37.9 42.4 38.239.4 40 30 20 10 0 10 7.6 8.2 5.6 5.6 0.9 3.7-0.9-4.5 2007 2008 2009 2010 2011 2012 2013 2014* -1.2 2015* 10 0 10 Exports Imports Trade Balance *Estimated Sources: Central Reserve Bank of Peru (BCRP) / Peruvian Foreign Trade Association (ComexPerú) Projection of regional exports of Peruvian goods 2011 vs. 2021 (in US$ billions) 7 8 Europe 9 United States 6 3 1 Middle East and North Africa 4 7 China 17 India 9 Rest 7 of Asia Peru Rest of Latin America 5 7 5 2021 2011 Source: Oxford Economics / Prepared by EY Business & Investment guide 23

Annual change in exports by economic sector, in percentage (2014/2013) -14.6-18.5-14.6-9.0-7.3-3.4-0.9 0.1 4.3 4.6 6.0 10.8 10.7 40.0 20.0 0 20.0 40.0 60.0 80.0 21.2 *Non-traditional **Traditional Source: Peruvian Foreign Trade Association (ComexPeru) 61.9 Misc (including jewelry) Handicrafts Furs and leathers Timbers and papers Metal-mechanical Non-metallic mining Fishing* Steel-metallurgical Chemical Textile Livestock Agricultural Fisheries** Petroleum and byproducts Mining Annual change in imports by economic sector, in percentage (2014/2013) *Non-traditional -2.2 Misc (including jewelry)* 0.9 2.0 Handicrafts* Furs and leathers* -12.0-10.4 Fisheries* Non-metallic mining* 4.0 4.4 Timbers and papers* Textile* -0.1 Steel-metallurgical* 4.0 Livestock* -1.0 Chemical* -3.9 Metal-mechanical* -46.4 Fisheries** 203.4 Mining** 6.0 Agricultural** -9.8 Petroleum and byproducts** -100.0-50.0 0 50.0 100.0 150.0 200.0 250.0 **Traditional Source: Peruvian Foreign Trade Association (ComexPeru) Exports by trading partner in US$ Millions top ten partners (2014) Source: Peruvian Foreign Trade Association (ComexPeru) China United States Switzerland Canada Brazil Japan Chile Spain Germany Colombia 1,353 1,229 1,219 1,580 1,546 1,521 2,476 2,640 6,037 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 5,500 6,000 6,500 7,000 6,948 24

I. Background Information Imports by trading partner in US$ Millions top ten partners (2014) China United States 8,928 8,858 Brazil Mexico Ecuador Germany South Korea Chile 2,000 1,950 1,774 1,511 1,383 1,283 Argentina 1,253 Colombia 1,246 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 Source: Peruvian Foreign Trade Association (ComexPeru) Traditional and non-traditional exports in US$ Billions 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 21.8 23.4 20.9 28.1 7.6 10.2 11.6 7.8 6.2 11.2 11.1 6.3 2007 2008 2009 2010 2011 2012 2013 2014 Traditional Non Traditional 36.1 35.0 31.4 26.3 Source: Peruvian Foreign Trade Association (ComexPeru) / Central Reserve Bank of Peru (BCRP) During 2014, the non-traditional product markets with the most exports were livestock (21.2%) and handycrafts (61.9%). The principal non-traditional products exported in 2014 were quinoa (US$196 millions, 147.11% increase), mangoes (US$138 millions, 3.60% increase), asparagus (US$533 millions, -7.00% decrease), organic banano (US$119 millions, 33.99% increase), grapes (US$641 millions, 44.39% increase), berries (US$30 millions, 71.24% increase), refrigerated asparagus (US$38 millions, -24.05% decrease), avocado (US$384 millions, -6.96% decrease), cacao (US$152 millions, 82.53% increase), artichokes (US$92 millions, 3.81% increase), tangerine (US$60 millions, 38.78% increase), paprika and capsicums (US$41 millions, -8.88% decrease), natural calcium phosphates; refined copper wire, stout bobtail squid, common squid, and giant squid, whether frozen, dried, or in brine. In terms of traditional products, the most significant were gold, copper, lead, zinc, gas, petroleum oil, coffee, and fishmeal. Economic results (fiscal surplus / deficit) of the non-financial public sector (in % of the GDP) 3.0 2.5 2.0 1.5 1.0 0.5 0-0.5-1.0-1.5-2.0-2.5 2.3 2.9 2.4-0.2-1.3-2.0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015* 2.0 2.2 0.9-0.1 *Estimated Source: Central Reserve Bank of Peru (BCRP) Business & Investment guide 25

Tax pressure (in % of the GDP) 18 16 14 12 10 8 6 4 2 0 13.6 15.2 15.6 15.7 13.8 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 14.8 15.5 16.4 16.8 16.9 Source: Central Reserve Bank of Peru (BCRP) / National Superintendency of Tax Administration (SUNAT) During 2014, according to the National Superintendency of Customs and Tax Administration (SUNAT) the tax base was broadened by 3.4%. This was due in large part to auditing, control, and facilitation actions, which have helped tax collection to exceed the national average rate in many regions of the country. In 2014, the tax revenues collected totaled S/.95,389 millions with a 6% growth of the amount of registered taxpayers. Public debt (% of the GDP) 50 45 40 35 30 25 20 15 10 5 0 46.0 9.6 36.4 32.3 9.0 23.2 19.7 9.5 10.2 19.6 7.1 12.5 2000 2006 2012 2013 2014 2015* 2016* 19.7 7.7 12.0 19.6 19.3 Non-domestic Domestic Total *Estimated Source: Central Reserve Bank of Peru (BCRP) 26

I. Background Information 5 I Country Risk and Investment Grade Peru has been given good forecasts by the best-known risk rating agencies, which have not only ratified the country s investment grade but have also raised the Peruvian sovereign credit rating. The factors that back this rating are the solid economic prospects reflected in a minimum growth estimate of 2.4% of the GDP for 2014, and an estimated 4.8% for 2015. These economic forecasts are backed by the rapid growth in investment and the significant drop in fiscal and external vulnerabilities, all within the context of several sources of growth, with low inflation and strong macroeconomic fundamentals. Obtaining the investment grade has permitted Peru to attract a great deal of international attention. Recently, an increasing number of multinational corporations have been looking at Peru with greater interest. The subsequent increase in jobs and decrease in poverty will predictably help improve social wellbeing. Peru s investment grade ratings Country S&P Fitch Moody's Chile AA- A+ Aa3 Peru BBB+ BBB+ A3 Mexico BBB+ BBB+ A3 Colombia BBB BBB Baa2 Brazil BBB- BBB Baa2 Uruguay BBB- BBB- Baa2 Bolivia BB BB- Ba3 Paraguay BB BB- Ba2 Ecuador B+ B B3 Venezuela CCC+ CCC Caa3 Argentina SD RD Caa1 Sources: Standard & Poor's / Fitch Ratings / Moody's S&P / Fitch Moody's Feature AAA Aaa Risk Free AA+, AA, AA- Aa1, Aa2, Aa3 High Grade A+, A, A- A1, A2, A3 High Repayment Capacity BBB+, BBB, BBB- Baa1, Baa2, Baa3 Moderate Repayment Capacity BB+, BB, BB- Ba1, Ba2, Ba3 Some Repayment Capacity B+, B, B- B1, B2, B3 Highly Uncertain Repayment Capacity CCC+, CCC, CCC-,CC Caa1, Caa2, Caa3 Extremely Vulnerable to Default SD/D Ca Default Investment Grade Source: Bloomberg Evolution of the long-term debt rating in foreign currency Agency 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Fitch BB- BB- BB BB BB+ BB+ BBB- BBB- BBB- BBB * BBB BBB+ BBB+ S&P BB- BB- BB BB BB+ BB+ BBB- BBB- BBB- BBB ** BBB BBB+ BBB+ Moody s Ba3 Ba3 Ba3 Ba3 Ba3 Ba2 Ba1 Baa3 Baa3 Baa3 Baa2 Baa2 A3 Source: EY Business & Investment guide 27

Country Risk As of January 13, 2015, Peru had a country risk of 197 base points, ranking second-lowest in Latin America. This score is less than half of the regional average (545 points). Country risk indicator (in based points) 2,000 2,814 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 31 Dec. 06 31 Dec. 07 31 Dec. 08 31 Dec. 09 31 Dec. 10 31 Dec. 11 31 Dec. 12 31 Dec. 13 Jan. 15 740 545 295 231 222 197 176 Venezuela Argentina Latin America Brazil Mexico Colombia Peru Chile Source: Central Reserve Bank of Peru (BCRP) Peru has recently achieved the position of the third most globalized country in Latin America, according to the Globalization Index established by EY. Five elements are considered within this index: openness to foreign trade, capital flows, exchange of technology and ideas, international movement of workers, and cultural integration. Additionally, in January 2013 Bloomberg Markets positioned Peru as the fourth emerging market with the greatest international projection, based on the country s advantages, such as low share prices and their possible increase in the future. As may be seen in the following charts, Peru s level of inflation is one of the lowest in Latin America, with a rate of 3.2% in 2014, and an estimated range of 1% to 3% for 2015. In addition, over the past decade, the Peruvian economy had the lowest average annual inflation rate in Latin America, at 2.5%, below that of Chile (2.9%) Colombia (4.6%) and Brazil (6.0%). Estimated inflation rates in Latin America 2.0 Peru 3.2 2.9 2.6 Argentina 25.7 10.5 12.5 10.0 Uruguay 7.2 7.5 8.5 Chile 2.8 8.1 3.0 4.6 1.5 Colombia 3.1 2.2 3.7 3.2 Mexico 3.63.9 3.8 4.1 4.5 Paraguay 2.6 4.7 3.7 Brazil 7.7 Latin America 6.2 7.4 0 5.0 10.0 15.0 20.0 25.0 30.0 2015* 2014* 2013 2012 6.3 6.4 6.2 5.4 *Estimated Sources: BBVA Research - Peru / Central Reserve Bank of Peru (BCRP) 28

I. Background Information Estimated Gross Domestic Product (GDP) growth percentage rates in Latin America Peru Chile Colombia 1.7 3.1 3.9 Mexico 1.2 2.7 3.6 1.7 Latin America 2.5 3.1 2.5 0.0 2.0 4.0 6.0 8.0 2015* 2.4 2014* 2013 *Estimated Sources: BBVA Research Peru / Ministry of Economy and Finance MEF (Multiannual Macroeconomic Framework) / International Monetary Fund (IMF) / BCRP / Mexico s Bank (Banxico) / Bank of the Republic of Colombia / Central Bank of Chile / EY 4.0 4.4 4.8 4.2 4.8 4.7 2012 5.6 5.8 6.3 6 I Investment Private investment (percent change) 30% 25% 20% 15% 10% 5% 0-5% -10% -15% -20% 25.9% 20.1% 23.3% 23.9% 15.6% 11.0% 6.5% 3.0% 5.2% -1.5% -9.1% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015* 2016* *Estimated Source: Central Reserve Bank of Peru (BCRP) Public investment (percent change) 40% 30% 27.9% 32.9% 20% 10% 0-10% -20% 17.5% 17.1% 19.1% 14.2% 12.1% 12.0% 11.6% -3.6% -11.2% -30% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015* 2016* *Estimated Source: Central Reserve Bank of Peru (BCRP) Business & Investment guide 29

Fixed gross investment in % of the Gross Domestic Product (GDP) 30 25 20 15 10 18.2 3.2 15.0 20.3 3.5 16.8 23.9 23.3 4.5 5.7 19.4 17.6 25.8 26.6 25.1 24.0 5.4 5.8 5.9 4.8 20.8 19.2 19.2 20.4 25.6 25.4 5.1 5.3 20.5 20.1 25.6 5.6 20.0 Private investment Public investment 5 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015* 2016* *Estimated Source: Central Reserve Bank of Peru (BCRP) Total investment in Latin America in % of Gross Domestic Product (GDP) (2014 y 2013) 2014: Peru 25.6 Chile 23.8 Mexico 20.9 2013: Argentina 18.0 Colombia 25.0 Brazil 18.0 0 5 10 15 20 25 30 Source: International Monetary Fund (IMF) / Central Reserve Bank of Peru (BCRP) Direct Foreign Investment stock by sector in % of Gross Domestic Product (GDP) (2014) Sector 2014 Mining 24% Finance 18% Communications 17% Industry 14% Energy 13% Others 3% Commerce 3% Services 3% Petroleum 3% Transports 2% Mining 5,604 Finance 4,298 Communications 3,932 Industry 3,163 Energy 3,074 Commerce 798 Petroleum 680 Services 674 Transport 364 Others 695 Total US$ (in millions) 23,283 Source: Agency for the Promotion of Private Investment (ProInversion) 30

I. Background Information Direct foreign investment in Latin America in % of Gross Domestic Product (GDP) (2013) Peru 4.6 Chile 3.4 Colombia 2.4 Latin America 2.7 Brazil 3.0 Mexico 2.3 Source: EY 0 2 4 6 Private investment (US$ Billions) 50 45 40 39.3 42.1 41.9 42.7 45.9 35 30 28.5 32.7 25 20 15 10 5 8.4 9.2 10.5 12.3 13.2 17.1 23.6 21.3 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015* 2016* *Estimated Source: Ministry of Economy and Finance (MEF) (Multiannual Macroeconomic Framework) / Agency for the Promotion of Private Investment (ProInversion) Business & Investment guide 31

7 I Population and Human Development The estimated population of Peru for 2015 is approximately 31.2 million of which approximately 10.5 million (2013) reside in Lima (including the population of th Constitutional Province of Callao). The national workforce (total EAP) is estimated at around 16.1 million people. The main religion is Roman Catholicism, and the principal official languages are Spanish and Quechua. The Aymara language is also spoken, mostly in the Southern Highland Region, along with various other native languages, particularly in the Amazon Jungle Region. As of 2012, the literacy rate was 93.8% of the population over age 15, and it is estimated that by 2015, 94.3% of Peruvians over the age of 15 will be able to read and write. Population Summary Population 31.2 million (estimated, 2015) 75.7% live in urban areas (2013) Age range 0-14 years old: 28.7% 15-64 years old: 65.0% 65 years or older: 6.3% Growth rate 1.13% (estimated, 2013) Birth rate 20.4 births / 1,000 people Mortality rate 5.6 deaths / 1,000 people Gender ratio Births: 1.046 male / female Life expectancy at birth 74.1 años (estimate for 2010-2015) Source: National Institute of Statistics and Information (INEI) / Economic Commission for Latin America and the Caribbean (CEPAL) / International Monetary Fund (IMF) (Population) Over the last four years, the population has grown by an average of 1.13% annually (in 2013, it is estimated to have grown by 1.12%). As of 2013, it is estimated that the urban areas population will achieve 75.7% and the rural areas population will achieve 24.3% of the total national population. Total population and average annual growth rate in % 35,000 30,000 2.82% 2.55% 28,221 28,807 29,132 29,462 29,798 30,136 30,475 3.00 2.50 25,000 20,000 15,000 10,000 5,000 1.90% 7,023 10,420 14,122 2.04% 22,639 17,762 1.56% 1.14% 1.14% 1.13% 1.13% 1.13% 1.13% 1.12% 2.00 1.50 1.00 0.50 0 1940 1961 1972 1981 1993 2007 2008 2009 2010 2011 2012 2013* 0.00 Total population Growth rate (%) *Estimated Source: National Institute of Statistics and Information (INEI) (it differs from the IMF, that estimates 30.9 million habitants for 2013) 32

I. Background Information Population census by area of residence in % 100 80 60 64.6 52.6 40.5 34.8 29.9 24.1 23.8 40 20 35.4 47.4 59.5 65.2 70.1 75.9 76.2 0 1940 1961 1972 1981 1993 2007 2014* Rural area Urban area *Estimated; information taken from National Censuses through 2007 Source: National Institute of Statistics and Information (INEI) / EY In 2013, the male population was greater than the female population by 0.1%. On the other hand, the population on the Coast accounted for 54.8% of the total population, while the population of the Highlands was 32.2%, and that of the Jungle was 13.0%. Evolution of the census population by natural region in % 70 65.0 60 52.3 50 46.1 49.8 52.4 54.6 54.8 39.0 40 44.0 39.7 32.0 32.2 30 34.8 28.3 20 10.6 12.8 13.4 13.0 10 6.7 8.7 9.9 0 1940 1961 1972 1981 1993 2007 2013* Coast Highlands Jungle *Estimated Source: National Institute of Statistics and Information (INEI) / EY Census population pyramid (1972 and 2007) Age group Male Female 80 and over 75-79 70-74 65-69 60-64 55-59 50-54 45-49 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 0-4 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 1972 Census 2007 Census Source: National Institute of Statistics and Information (INEI) Business & Investment guide 33

Of the total Peruvian population, 65.0% is between the ages of 15-64, while the Economically Active Population (EAP) as of 2012 was 72.8% of the total, giving Peru a demographic bond effect, which may be simply explained as the structural benefit of its population being of an age to produce and consume. It is estimated that this high percentage of workforce will extend its maximum registration period for up to three and a half more decades, and the power of this demographic bond is that of fostering greater production, consumption, savings, and investment. Perhaps the most important aspect of this demographic overview is that Peru has the advantage of practically just having begun its demographic bond period, which will provide it with the conditions to make the necessary public and private investments in order to cover the demands and opportunities that arise from the consumption of its demographic bond period. Projected population by department in thousands (2013) 9,524 1,815 1,8141,520 1,390 1,331 1,301 1,259 1,240 1,136 1,018 848 983 818 772 674 487 484 454 419 333 300 231 177 131 Lima Piura La Libertad Cajamarca Puno Junin Cusco Arequipa Lambayeque Ancash Loreto Const. Province of Callao Huanuco San Martin Ica Ayacucho Huancavelica Ucayali Apurimac Amazonas Tacna Pasco Tumbes Moquegua Madre de Dios Source: National Institute of Statistics and Information (INEI) Coinciding with the population percentages by Region, the three most populous departments of Peru belong to the Coast Region: Lima, Piura, and La Libertad, followed by Cajamarca, Puno, Junin, Cusco, and Arequipa. The Human Development Index (HDI) is a compound index that measures the average advances in three basic dimensions of human development: a long and healthy life; knowledge level of dignified life, via the combination of indicators for life expectancy, educational achievements, and income. The HDI defines a minimum and maximum value for each dimension (called objectives ), and then shows the position of each country with regard to these objective values, expressed in the form of a value between 0 and 1. According to the 2014 Human Development Report issued by the United Nations Development Programme (UNDP), the ranking and evolution of the six principal countries in Latin America are as follows: Ranking Classification Country 1980 1990 2000 2005 2010 2011 2012 2013 Growth Rate 2013 / 1980 World Total 0.561 0.600 0.639 0.666 0.690 0.692 0.694 0.702 25% Latin America and the Caribbean 0.574 0.623 0.683 0.708 0.736 0.739 0.741 0.740 29% Very High Human Development 41 Chile 0.638 0.702 0.759 0.789 0.813 0.817 0.819 0.822 29% 49 Argentina 0.675 0.701 0.755 0.771 0.805 0.810 0.811 0.808 20% High Human Development 71 Mexico 0.598 0.654 0.723 0.745 0.770 0.773 0.775 0.756 26% 79 Brazil 0.522 0.590 0.669 0.699 0.726 0.728 0.730 0.744 43% 82 Peru 0.580 0.619 0.679 0.699 0.733 0.738 0.741 0.737 27% 98 Colombia 0.556 0.600 0.658 0.681 0.714 0.717 0.719 0.711 28% Note: The ranking refers to each country s position in the world classification for 2013. 34