20-F/A 1 d555292d20fa.htm AMENDMENT NO. 1 TO FORM 20-F Amendment No. 1 to Form 20-F
Table of Contents

 

 

SECURITIES AND EXCHANGE COMMISSION

 

 

Form 20-F/A

(Amendment No. 1)

 

 

 

¨ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

 

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2012

OR

 

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 333-14194

 

 

GRUPO TMM, S.A.B.

(Exact name of Registrant as specified in its charter)

 

 

TMM GROUP

(Translation of Registrant’s name into English)

United Mexican States

(Jurisdiction of incorporation or organization)

Avenida de la Cúspide, No. 4755

Colonia Parques del Pedregal,

14010 México City, D.F., México

(Address of principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

None

Securities registered or to be registered pursuant to Section 12(g) of the Act:

Title of Each Class

American Depositary Shares (“ADSs”), each representing

five Ordinary Participation Certificates

(Certificados de Participación Ordinaria)

(“CPOs”)

CPOs, each representing one nominative common share,

without par value (“Share”)

Shares

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

None

 

 

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

102,182,841 Shares

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    ¨  Yes     No  x

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.    ¨  Yes    No  x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer  ¨   Accelerated filer ¨   Non-accelerated filer  x

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

 

U.S. GAAP ¨   

International Financial Reporting Standards as issued

by the International Accounting Standards Board x  

  

Other ¨

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

Item 17  ¨    Item 18  ¨

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.    Yes  ¨    No  ¨

 

 

 


Table of Contents

TABLE OF CONTENTS

 

          Page  

EXPLANATORY NOTE

     1   

ITEM 18.

  

FINANCIAL STATEMENTS

     2   

ITEM 19.

  

EXHIBITS

     3   

SIGNATURES

     4   

 

-i-


Table of Contents

EXPLANATORY NOTE

Grupo TMM, S.A.B. (“Grupo TMM”) is filing this Amendment No. 1 (the “Amendment”) to amend its annual report on Form 20-F for the fiscal year ended December 31, 2012 (the “2012 Form 20-F”), as originally filed with the Securities and Exchange Commission on May 15, 2013, solely for the purposes of (i) re-filing our financial statements in Item 18 to include the signature of Salles Sainz – Grant Thornton, S.C. (“SSGT”), independent registered public accounting firm, in its Report of Independent Registered Public Accounting Firm with respect to our financial statements and (ii) filing or furnishing new certifications by our principal executive officer and principal financial officer as required by Rule 12b-15 under the Securities Exchange Act of 1934, as amended.

No other changes are hereby made to our 2012 Form 20-F. The contents of the Report of Independent Registered Public Accounting Firm and our financial statements and the notes thereto are not modified, except for the inclusion of the signature of SSGT as described above. This Amendment does not reflect events that have occurred after the initial filing date of May 15, 2013 of our 2012 Form 20-F or modify or update the disclosures therein, except to reflect the amendment described above.

 

-1-


Table of Contents
ITEM 18. FINANCIAL STATEMENTS

The following financial statements are filed as part of this Annual Report on Form 20-F/A.

 

Contents

   Page  

Report of Independent Registered Public Accounting Firm

     F-3   

Consolidated Statements of Financial Position

     F-5   

Consolidated Statements of Operations

     F-6   

Consolidated Statements of Comprehensive (Loss) Income

     F-7   

Consolidated Statements of Changes in Stockholders’ Equity

     F-8   

Consolidated Statements of Cash Flows

     F-9   

Notes to the Consolidated Financial Statements

     F-10   

 

-2-


Table of Contents

 

LOGO

Consolidated Financial Statements and Report of Independent Registered Public Accounting Firm

Grupo TMM, S.A.B. and Subsidiaries

December 31, 2012, 2011 and 2010

 

LOGO

 

F-1


Table of Contents

Grupo TMM, S.A.B. and Subsidiaries

Consolidated Financial Statements

December 31, 2012, 2011 and 2010

Contents

 

          Page  

Report of Independent Registered Public Accounting FirmReport of Independent Registered Public Accounting Firm

     F-3   

(Amounts expressed in thousands of Mexican pesos, except shares)

     F-10   
1.    Nature of operations and general information      F-10   
2.    Changes in accounting policies      F-13   
3.    Summary of significant accounting policies      F-17   
4.    Ongoing concern      F-25   
5.    Taxes receivable      F-26   
6.    Other accounts receivable      F-26   
7.    Other current assets      F-26   
8.    Concession rights      F-27   
9.    Property, machinery and equipment, net      F-28   
10.    Prepaid expenses and other      F-29   
11.    Intangible assets      F-29   
12.    Financing      F-31   
13.    Obligations from sale of receivables      F-37   
14.    Trust certificates program      F-38   
15.    Balances and transactions with related parties      F-40   
16.    Accounts payable and accrued expenses      F-41   
17.    Stockholder equity      F-41   
18.    Other expenses, net      F-42   
19.    Gain (loss) on exchange, net      F-42   
20.    Income tax, tax loss carryforwards, and corporate flat tax      F-43   
21.    Financial information by segment      F-46   
22.    Employee benefits      F-47   
23.    (Losses) earnings per share      F-50   
24.    Commitments and contingencies      F-50   
25.    Financial risk management, objectives, and policies      F-53   
26.    Capital management policies and procedures      F-56   
27.    Subsequent event      F-56   

 

F-2


Table of Contents

Report of Independent Registered Public Accounting Firm

Board of Directors and Stockholders of

Grupo TMM, S.A.B.:

We have audited the accompanying consolidated statements of financial position of GRUPO TMM, S.A.B. and subsidiaries (“Grupo TMM” or “the Company”), as of December 31, 2012, 2011 and 2010, and the related consolidated statements of operations, comprehensive income, changes in stockholder’ equity, and cash flows for each of the three years in the period ended December 31, 2012. These consolidated financial statements are the responsibility of the Company’s Management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States) and International Standards on Auditing. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the aforementioned consolidated financial statements present fairly, in all material respects, the consolidated financial position of Grupo TMM as of December 31, 2012, 2011 and 2010, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2012, in conformity with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board.

 

F-3


Table of Contents

The accompanying consolidated financial statements have been prepared under the assumption the Company will continue as a going concern. As discussed in Note 4, the Company has incurred significant net losses in 2012 and 2010, principally as a result of its comprehensive financing cost. These conditions, along with other matters as set forth in Note 4, raise substantial doubt about the Company’s ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

As discussed in Note 3 c), as a result of changes in the economic environment and that the operations of Grupo TMM are currently concentrated in Mexico, as of January 1, 2012, the Company has decided to change its operating currency and reporting from US dollars to Mexican pesos. The procedures for converting the operating currency were applied prospectively as of said date.

/s/ SALLES SAINZ — GRANT THORNTON, S.C.

Mexico City

May 15, 2013

 

F-4


Table of Contents

Consolidated statements of financial position

December 31, 2012, 2011 and 2010

(amounts in thousands of Mexican pesos)

 

     2012     2011     2010  

Assets

      

Current

      

Cash and cash equivalents

   $ 496,680      $ 507,609      $ 1,113,560   

Restricted cash (Notes 13 and 14)

     592,345        568,072        648,590   

Accounts receivable—net of allowance for doubtful accounts of $55,112 in 2012, $48,733 in 2011, and $46,184 in 2010

     474,027        543,440        465,478   

Related parties (Note 15)

     —          —          5,052   

Tax credits (Note 5)

     75,227        38,272        83,886   

Other accounts receivable –net (Note 6)

     220,487        206,592        169,469   

Materials and supplies

     133,990        144,246        118,827   

Other current assets (Note 7)

     12,906        17,100        18,808   

Non-current assets held for sale

     23,842        —          8,877   
  

 

 

   

 

 

   

 

 

 

Total current assets

     2,029,504        2,025,331        2,632,547   
  

 

 

   

 

 

   

 

 

 

Concession rights—net (Note 8)

     32,167        35,943        35,276   

Property, machinery and equipment—net (Note 9)

     9,716,653        10,012,703        9,430,423   

Prepaid expenses and other (Note 10)

     92,733        103,477        94,312   

Intangible assets (Note 11)

     132,267        158,933        292,778   

Deferred income tax (Note 20)

     941,944        942,621        835,665   
  

 

 

   

 

 

   

 

 

 

Total assets

   $ 12,945,268      $ 13,279,008      $ 13,321,001   
  

 

 

   

 

 

   

 

 

 

Current liabilities:

      

Current portion of long term debt (Notes 12 and 14)

   $ 332,595      $ 239,759      $ 293,100   

Suppliers

     302,362        299,525        287,020   

Accounts payable and accrued expenses (Note 16)

     931,107        738,853        581,791   

Related parties (Note 15)

     18,061        12,218        —     

Obligations from the sale of receivables (Note 13)

     —          —          138,960   
  

 

 

   

 

 

   

 

 

 

Total current liabilities

     1,584,125        1,290,355        1,300,871   
  

 

 

   

 

 

   

 

 

 

Long term debt (Notes 12 and 14)

     10,491,189        10,255,824        10,358,630   

Dividends payable

     —          —          175,660   

Employee benefits (Note 22)

     211,143        213,415        172,787   

Obligations from the sale of receivables (Note 13)

     —          —          6,810   
  

 

 

   

 

 

   

 

 

 

Total non-current liabilities

     10,702,332        10,469,239        10,713,887   
  

 

 

   

 

 

   

 

 

 

Total liabilities

     12,286,457        11,759,594        12,014,758   
  

 

 

   

 

 

   

 

 

 

Stockholder equity (Note 17):

      

Equity capital, 103,760,541 shares authorized and issued

     2,216,733        2,216,733        1,967,863   

Treasury shares (1,577,700 shares)

     (46,805     (46,805     (46,506

Revaluation surplus (Notes 3j and 9)

     846,815        891,349        793,630   

Statutory reserve

     216,948        216,948        192,592   

Accrued losses

     (2,463,934     (1,642,527     (1,560,219

Capital Premium

     77,106        77,106        68,449   

Translation balance (Note 3c)

     (247,668     (247,668     (219,862
  

 

 

   

 

 

   

 

 

 

Controlling interest

     599,195        1,465,136        1,195,947   

Non-controlling interest (Note 3s)

     59,616        54,278        110,296   
  

 

 

   

 

 

   

 

 

 

Total stockholder equity

     658,811        1,519,414        1,306,243   
  

 

 

   

 

 

   

 

 

 

Total liabilities and stockholder equity

   $ 12,945,268      $ 13,279,008      $ 13,321,001   
  

 

 

   

 

 

   

 

 

 

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

 

F-5


Table of Contents

Consolidated statements of operations

for the years ended December 31, 2012, 2011, and 2010

(amounts in thousands of pesos, except shares)

 

     2012     2011     2010  

Transportation revenue

   $ 3,334,745      $ 3,344,870      $ 3,859,315   

Costs and expenses:

      

Salaries, wages and employee benefits

     895,839        803,148        858,043   

Leases and other rents

     634,961        616,817        724,795   

Purchased services

     445,525        486,255        553,753   

Fuel, materials and supplies

     353,598        325,508        322,395   

Other costs and expenses

     157,344        232,490        238,486   

Depreciation and amortization

     696,644        640,515        725,288   
  

 

 

   

 

 

   

 

 

 
     3,183,911        3,104,733        3,422,760   
  

 

 

   

 

 

   

 

 

 

Income on transportation

     150,834        240,137        436,555   
  

 

 

   

 

 

   

 

 

 

Other expenses, net (Note 18)

     (26,377     (175,275     (65,030
  

 

 

   

 

 

   

 

 

 

Operating income

     124,457        64,862        371,525   
  

 

 

   

 

 

   

 

 

 

Interest income

     50,098        44,813        103,004   

Interest expense

     987,890        1,041,482        987,796   

Gain (loss) on exchange, net (Note 19)

     41,002        1,164,450        (481,697
  

 

 

   

 

 

   

 

 

 

Comprehensive financing cost

     (896,790     167,781        (1,366,489
  

 

 

   

 

 

   

 

 

 

(Loss) income before taxes

     (772,333     232,643        (994,964
  

 

 

   

 

 

   

 

 

 

Provision for income taxes (Note 20)

     (8,783     (41,060     (10,350
  

 

 

   

 

 

   

 

 

 

Net (loss) income for the year

   $ (781,116   $ 191,583      $ (1,005,314
  

 

 

   

 

 

   

 

 

 

Attributable to:

      

Non-controlling interest

     5,338        12,539        20,814   
  

 

 

   

 

 

   

 

 

 

Grupo TMM, S.A.B. Stockholders

   $ (786,454   $ 179,044      $ (1,026,128
  

 

 

   

 

 

   

 

 

 

Net (loss) earnings for the year, per share

   $ (7.644   $ 1.875      $ (9.855
  

 

 

   

 

 

   

 

 

 

Weighted average of shares outstanding for the period

     102,183        102,176        102,007   
  

 

 

   

 

 

   

 

 

 

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

 

F-6


Table of Contents

Consolidated statements of comprehensive (loss) income

for the years ended December 31, 2012, 2011, and 2010

(amounts in thousands of pesos, except shares)

 

     2012     2011     2010  

Net (loss) profit for the year

   $ (781,116   $ 191,583      $ (1,005,314

Other comprehensive (loss) income lines:

      

Stock repurchase

     —          (1,381     619   

Translation balance

     (42,989     (240,366     65,089   

Provision for employee benefits

     11,480        (41,549     (23,075

Revaluation surplus

     (63,620     (3,786     1,133,757   

Cancellation of dividends (Note 17)

     —          134,204        —     

Income tax on other comprehensive income (loss) results

     15,642        13,601        (333,205
  

 

 

   

 

 

   

 

 

 

Other comprehensive results for the year net of taxes

     (79,487     (139,277     843,185   
  

 

 

   

 

 

   

 

 

 

Comprehensive (loss) profit for the year

   $ (860,603   $ 52,306      $ (162,129
  

 

 

   

 

 

   

 

 

 

Attributable to:

      

Non-controlling interest

     5,338        12,539        20,814   

Grupo TMM, S.A.B. Stockholders

     (865,941     39,767        (182,943
  

 

 

   

 

 

   

 

 

 
   $ (860,603   $ 52,306      $ (162,129
  

 

 

   

 

 

   

 

 

 

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

 

F-7


Table of Contents

Consolidated statements of changes in stockholder equity

Years ended December 31, 2012, 2011, and 2010

(amounts in thousands of pesos, except shares)

 

      Number of
shares issued
and outstanding
    Equity
Capital
    Cumulative
losses
    Capital
Premium
    Initial cumulative
translation balance
    Subtotal     Non-controlling
interest
    Total
Stockholder
Equity
 

Balances as of December 31, 2009

     102,024,441      $ 2,024,906      $ (391,054   $ 72,109      $ (231,617   $ 1,474,344      $ 94,710      $ 1,569,054   

Repurchase of shares during 2010

     (29,800     (780     619        —          —          (161     —          (161

Revaluation surplus

         793,630        —          —          793,630        —          793,630   

Translation balance

     —          (102,769     65,089        (3,660     11,755        (29,585     (5,228     (34,813

Provision for employee benefits

     —          —          (16,153     —          —          (16,153     —          (16,153
      

 

 

           

Total year expenses recognized directly in capital

         843,185             

Net loss for the year

     —          —          (1,026,128     —          —          (1,026,128     20,814        (1,005,314
      

 

 

           

Comprehensive loss for the year

         (182,943          
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balances as of December 31, 2010

     101,994,641        1,921,357        (573,997     68,449        (219,862     1,195,947        110,296        1,306,243   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Sale of repurchased stocks during 2011

     188,200        5,579        (1,381     —          —          4,198        —          4,198   

Revaluation surplus

     —          —          (2,650     —          —          (2,650     —          (2,650

Translation balance

     —          242,992        (240,366     8,657        (27,806     (16,523     15,477        (1,046

Provision for employee benefits

     —          —          (29,084     —          —          (29,084     —          (29,084

Cancellation of dividends

     —          —          134,204        —          —          134,204        —          134,204   
      

 

 

           

Total year expenses recognized directly in capital

         (139,277          

Reduction of capital in subsidiaries

     —          —          —          —          —          —          (84,034     (84,034

Net earnings for the year

     —          —          179,044        —          —          179,044        12,539        191,583   
      

 

 

           

Comprehensive earnings for the year

         39,767             
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balances as of December 31, 2011

     102,182,841        2,169,928        (534,230     77,106        (247,668     1,465,136        54,278        1,519,414   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Revaluation surplus

     —          —          (44,534     —          —          (44,534     —          (44,534

Translation balance

     —          —          (42,989     —                 (42,989     —          (42,989

Provision for employee benefits

     —          —          8,036        —          —          8,036        —          8,036   
      

 

 

           

Total year expenses recognized directly in capital

         (79,487          

Net loss for the year

     —          —          (786,454     —          —          (786,454     5,338        (781,116
      

 

 

           

Comprehensive loss for the year

         (865,941          
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balances as of December 31, 2012

     102,182,841      $ 2,169,928      $ (1,400,171   $ 77,106      $ (247,668   $ 599,195      $ 59,616      $ 658,811   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

 

F-8


Table of Contents

Consolidated statements of cash flow

Years ended December 31, 2012, 2011, and 2010

(amounts in thousands of pesos)

 

     2012     2011     2010  

Cash flows from operating activities:

      

Net (loss) profit for the year:

   $ (781,116   $ 191,583      $ (1,005,314

Adjustments to reconcile net loss (profit) to cash provided by operating activities:

      

Depreciation and amortization

     696,644        640,515        725,288   

Other amortizations

     108,480        139,646        121,492   

Provision for taxes

     8,783        41,060        10,350   

Gain on the sale of properties, machinery and equipment

     (17,165     (6,189     (4,233

Loss on the sale of subsidiary shares

     —          —          12,814   

Impairment of long-lived assets

     —          129,567        —     

Provision for interest on debt

     856,901        855,868        835,912   

Gain on purchase of subsidiaries

     (74,245     —          —     

Exchange (gain) loss—net

     (25,387     (1,158,423     479,397   

Changes in assets and liabilities:

      

Restricted cash

     (24,273     80,519        189,154   

Accounts receivable

     69,413        (77,962     154,789   

Other accounts receivable and related parties

     (45,007     25,760        149,666   

Materials, supplies and accessories

     10,256        (25,419     (6,938

Other current assets

     4,194        1,707        (1,120

Other accounts payable and accrued expenses

     116,767        (113,036     (600,163

Other non-current assets

     14,590        124,679        135,964   

Employee benefits

     (2,272     40,628        16,954   
  

 

 

   

 

 

   

 

 

 

Total adjustments

     1,697,679        698,920        2,219,326   
  

 

 

   

 

 

   

 

 

 

Cash provided by operating activities

     916,563        890,503        1,214,012   
  

 

 

   

 

 

   

 

 

 

Cash flows from investment activities:

      

Sale of properties, machinery and equipment

     60,709        47,510        67,140   

Acquisition of properties, machinery and equipment

     (351,203     (191,082     (405,938

Acquisition of subsidiaries

     (54,301     —          —     

Sale of associate companies

     —          —          51,331   

Reduction of capital in subsidiaries

     —          (74,874     —     
  

 

 

   

 

 

   

 

 

 

Cash used in investment activities

     (344,795     (218,446     (287,467
  

 

 

   

 

 

   

 

 

 

Cash flows from financing activities:

      

Proceeds from financial debt

     (570,006     (1,121,266     12,410   

Cash proceeds from obligations from the sale of receivables

     —          (147,910     (111,041

Purchase of capital stock

     —          1,205        (164
  

 

 

   

 

 

   

 

 

 

Cash used in financing activities

     (570,006     (1,267,971     (98,795
  

 

 

   

 

 

   

 

 

 

Effect on cash from currency fluctuation

     (12,691     (10,038     24, 702   
  

 

 

   

 

 

   

 

 

 

Net (decrease) increase in cash and cash equivalents

     (10,929     (605,952     852,452   

Cash and cash equivalents at year start

     507,609        1,113,561        261,109   
  

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at year end

   $ 496,680      $ 507,609      $ 1,113,561   
  

 

 

   

 

 

   

 

 

 

Supplemental cash disclosures:

      

Interest paid

   $ 616,921      $ 920,962      $ 376,001   
  

 

 

   

 

 

   

 

 

 

Income tax and corporate flat tax paid

      
   $ 64,635      $ 12,738      $ 13,256   
  

 

 

   

 

 

   

 

 

 

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

 

F-9


Table of Contents

Notes to the consolidated financial statements

As of December  31, 2012, 2011, and 2010

(Amounts expressed in thousands of Mexican pesos, except shares)

1 Nature of operations and general information:

Grupo TMM, S.A.B. (“Grupo TMM” or the “Company”) is a Mexican company whose principal activity is providing multimodal transportation and logistics services to premium customers throughout Mexico. Grupo TMM provides services related to dedicated trucking, third-party logistics, offshore supply shipping, clean oil and chemical products shipping, tug-boat services, warehouse management, shipping agency, inland and seaport terminal services, container and railcar maintenance and repair, and other activities related to the shipping and land freight transport business.

Due to the geographic location of some of the subsidiaries and the activities in which they are engaged, Grupo TMM and its subsidiaries are subject to the laws and ordinances of other countries, as well as international regulations governing maritime transportation and the observance of safety and environmental regulations.

Grupo TMM’s head office is located at Avenida de la Cúspide N° 4755, Colonia Parques del Pedregal, Delegación Tlalpan, C. P. 14010, México, D. F.

 

F-10


Table of Contents

As of December 31, 2012 and 2011, Grupo TMM holds the percentage of equity interest indicated in the following companies:

 

     2012     2011  

Inmobiliaria TMM, S.A. de C.V. and subsidiaries

     100     100

Operadora Marítima TMM, S.A. de C.V.

     100     100

Transportación Marítima Mexicana, S.A. de C.V. and subsidiaries

     100     100

TMM Logistics, S.A. de C.V. and subsidiaries

     100     100

Operadora Portuaria de Tuxpan, S.A. de C.V.

     100     100

Terminal Marítima de Tuxpan, S.A. de C.V.

     100     100

Transportes Líquidos Mexicanos, LTD

     100     100

Personal Marítimo, S.A. de C.V.

     100     100

TMM Agencias, S.A. de C.V.

     100     100

Servicios de Logística de México, S.A. de C.V.

     100     100

Servicios en Operaciones Logísticas, S.A. de C.V.

     100     100

Lacto Comercial Organizada, S.A. de C.V.

   i)  —        100

Marmex Marine Mexico, Inc. and subsidiary

     100     100

Autotransportación y Distribución Logística, S.A. de C.V.

     100     100

Almacenadora de Depósito Moderno, S. A. de C. V.

     100     100

Repcorp, S.A. de C.V. and subsidiary

     100     100

TMM Parcel Tankers, S.A. de C.V.

     100     100

TMM División Marítima, S.A. de C.V.

     100     100

TMM Dirección Corporativa S.A. de C.V. (formerly

    

TMM Remolcadores, S.A. de C.V.)

     100     100

Ikusi S.A.P.I. de C.V. (formerly Inmobiliaria Ikusi, S.A.P.I. de C.V.)

     100     100

Ficorsa Corporate Services, S.A.P.I. de C.V.

     100     100

Sedirsa Promotora, S.A. de C.V.

     100     100

Trasatlántica Marítima de México, S.A.P.I. de C.V.

   b) 100   b)  100

Promotora Satuiza, S.A.P.I. de C.V.

   a) 99   a)  99

Promotora Satco, S.A. de C.V.

     100     100

Lex New Proyects, S.A.P.I. de C.V. (formerly TMM New Proyects, S.A. de C.V.)

     99     100

Administración Portuaria Integral de Acapulco, S.A. de C.V.

     51     51

Servicios Administrativos API Acapulco, S.A. de C.V.

     51     51

Comercializadora y Distribuidora Milgret, S.A.P.I. de C.V.

     99     99

Nicte Inmobiliaria, S.A.P.I. de C.V

     99     99

Proserpec Servicios Administrativos, S.A.P.I. de C.V.

     99     99

Servicios Directivos Sedise, S.A.P.I. de C.V.

     99     99

Seehafen Operadora Marítima, S.A.P.I. de C.V. and subsidiary

   c)  100     —     

Mexschiff Operación de Personal, S.A.P.I. de C.V.

   d)  100     —     

Perjomar Operadora de Personal, S.A.P.I. de C.V.

   e)  100     —     

Omexmar Operadora Mexicana Marítima, S.A.P.I. de C.V.

   f)  100     —     

Perhafen Services Marítimos, S.A.P.I. de C.V.

   g)  100     —     

 

F-11


Table of Contents

Inmobiliaria Dos Naciones, S. de R.L. de C.V.

   h)  100     —     

Línea Mexicana TMM, S.A. de C.V.

       100     —     

Siderpec Training Operadora, S.A.P.I de C.V.

   j)  98     —     

Arbeimeer Operadora de Personal, S.A.P.I. de C.V.

   k)  98     —     

Opertraining Services, S.A.P.I. de C.V.

   l)  98     —     

 

a) On November 22, 2011, one share in Promotora Satuiza, S.A.P.I. de C.V., was sold to an unrelated party.
b) On May 12, 2011, Trasatlántica Marítima de México, S.A.P.I. de C.V. was established to provide all class of maritime, waterway, and lake transportation services on the water routes.
c) On August 3, 2012, Seehafen Operadora Marítima, S.A.P.I. de C.V. was formed, to construct, repair, service, maintain, and refurbish all class of containers and platforms both in Mexico and overseas, itself or through third parties.
d) On May 28, 2012, Mexschiff Operación de Personal, S.A.P.I. de C.V. was established, to provide services and consulting at Mexican ports, as regulated by the port law.
e) On May 28, 2012, Perjomar Operadora de Personal, S.A.P.I. de C.V. was formed, to provide all class of industrial and commercial consulting services, and services related to the creation, planning, implementation, and development of programs aimed at promoting personnel efficiency and retention.
f) On May 28, 2012, Omexmar Operadora Mexicana Marítima, S.A.P.I. de C.V. was established, to enter into industrial, commercial, and/or service contracts and agreements in the public and private sectors to provide all class of consulting or services.
g) On June 14, 2012, Perhafen Services Marítimos, S.A.P.I. de C.V. was formed, to provide services and consulting at Mexican ports as regulated by the port law.
h) On January 31, 2012, shares in Inmobiliaria Dos Naciones, S. de R.L. de C.V. (IDN) were acquired. This company engages in the construction of port facilities for the construction, repair, or major modification of vessels. (See Note 4)
i) On July 2, 2012, Grupo TMM sold its shares in Lacto Comercial Organizada, S.A. de C.V. to TMM Logistics, S.A. de C.V.; on this same date TMM Logistics, S.A. de C.V. split with the spin-off company being Seehafen Operadora Marítima, S.A.P.I. de C.V.
j) On May 28, 2012, Siderpec Training Operadora, S.A.P.I. de C.V. was formed, to provide all class of industrial, commercial, and service consulting services.
k) On June 14, 2012, Arbeimeer Operadora de Personal, S.A.P.I. de C.V. was established, to provide all class of industrial, commercial, and service consulting services.
l) On June 14, 2012, Opertraining Services, S.A.P.I. de C.V. was formed, to provide all class of services to third parties, including but not limited to, technical assistance and administrative services.

 

F-12


Table of Contents

2 Changes in accounting policies:

a. Adoption of “Presentation of Items of Other Comprehensive Income’ (Amendments to IAS 1)

Grupo TMM has adopted early the ‘Reporting of Other Comprehensive Income Lines’ (IAS I Amendments). The IAS 1 Amendments apply to years starting on or after July 1, 2012 and require Companies to group the lines reported under Other Comprehensive Income with those that, according to other IFRS, will not be subsequently reclassified to income and those that will be reclassified to income when specific conditions are met.

The current option to report Other Comprehensive Income lines either before taxes or net of taxes remains unchanged, therefore the IAS 1 Amendments require the tax associated with each of the two Other Comprehensive Income groups to be shown separately.

b. New standards, amendments, and interpretations for existing standards that are not yet in effect and which have not been adopted early by Grupo TMM

At the date of authorization of these consolidated financial statements, certain new standards, amendments, and interpretations for the existing standards have been published by the IASB but are not yet effective, and have not been adopted early by Grupo TMM (with the exception of the IAS 1 Amendments mentioned in point a) above). Management anticipates that all of the relevant pronouncements will be adopted into Grupo TMM’s accounting policies in the first period after the effective date of the pronouncement. Information on new standards, amendments, and interpretations that are expected to be relevant to Grupo TMM’s financial statements is detailed below. Certain other new standards and interpretations have been issued but are not expected to have a material impact on the Company’s consolidated financial statements.

c. IFRS 9 Financial Instruments (IFRS 9)

The objective of the IASB is to replace IAS 39, Financial Instruments: Recognition and Measurement (IAS 39) with IFRS 9. To date, the chapters that presented problems with the recognition, classification, measuring, and de-recognition of financial assets and liabilities have been resolved. These chapters are applicable for years starting on or after January 1, 2012. The chapters that discuss the methodology for impairment and hedge accounting are still being developed. In addition, in November 2011, the IASB tentatively decided to consider making minimal modifications to the financial asset classification model of IFRS 9 to resolve issues of application. Grupo TMM Management has not yet considered the impact of this new standard on the consolidated financial statements for Grupo TMM. However, the Company does not expect to implement IFRS 9 until all its chapters have been released and the full impact of all the changes can be evaluated.

 

F-13


Table of Contents

d. Consolidation Standards

The IASB released a package of consolidation standards applicable for years starting on or after January 1, 2013. The information for these new standards is presented following. Company Management has not yet completed its assessment of the impact of these new and revised standards on the consolidated financial statements of Grupo TMM.

i. IFRS 10 Consolidated Financial Statements (IFRS 10)

IFRS 10 replaces IAS 27 Consolidated and separated financial statements (IAS 27) and SIC 12 Consolidation—Special purpose entities. IFRS 10 revises the definition of control and provides a more extensive guide for its application. The new requirements have the potential to affect which Grupo TMM interests will be considered subsidiaries and therefore change the scope of the consolidation. However, the requirements for the consolidation procedures, the accounting changes for non-controlling interests, and the accounting for the loss of control in a subsidiary remain the same. Company Management’s preliminary assessment is that IFRS 10 will not change the classification (of subsidiaries or any other) for any of Grupo TMM’s current interests as of December 31, 2012.

ii. IFRS 11 “Joint Arrangements” (IFRS 11)

IFRS 11 replaces IAS 31 ‘Interests in joint ventures’ (IAS 31). This new standard more closely aligns the accounting of investors with the rights and obligations of the joint venture. In addition, the option of IAS 31 to use proportionate consolidation for joint ventures has been eliminated. IFRS 11 now requires the use of the equity method, which is currently used for investments in associates.

iii. IFRS 12 ‘Disclosure of Interests in Other Entities’ (IFRS 12)

IFRS 12 contains, and makes consistent, the disclosure requirements for the different types of investments, including unconsolidated structured entities. It introduces a new disclosure requirement for the risks to which the Company is exposed in terms of its involvement with structured entities.

iv. Transition guide for IFRS 10, 11, and 12

Subsequent to the release of the new standards, the IASB has made some changes to the considerations on transition for IFRS 10, IFRS 11, and IFRS 12. The guide confirms the Company is not obligated to apply IFRS 10 retrospectively in some circumstances and clarifies the requirements for reporting adjusted comparative information. The guide also makes changes to IFRS 11 and IFRS 12, which provides certain relief for the reporting or adjustment of comparative information for periods prior to the previous period. It also provides additional relief removing the requirements of comparative disclosures associated with unconsolidated structured entities for any period prior to their first year for which IFRS 12 is applied. The new guide is applicable for years starting on or after January 1, 2013.

v. Subsequent modifications of IAS 27 ‘Separate financial statements’ (IAS 27) and IAS 28 ‘Investments in Associates and Joint Ventures’ (IAS 28)

 

F-14


Table of Contents

IAS 27 only covers consolidated financial statements. IAS 28 includes investments in joint ventures under its scope. However, the equity method of IAS 28 remains unchanged.

e. IFRS 13 “Fair Value Measurement” (IFRS 13)

IFRS 13 clarifies the definition of fair value and provides a guide with improved disclosures regarding the measuring of fair value. This does not affect which lines are required to be measured at fair value. IFRS 13 applies prospectively for years starting on or after January 1, 2013. Grupo TMM Management is in the process of reviewing its valuation methodologies considering the new requirements and has not yet completed its assessment of the impact on the consolidated financial statements.

f. Changes to IAS 19 ‘Employee benefits’ (IAS 19 Amendments)

The IAS 19 Amendments include a number of improvements planned.

The most significant involve defined benefit plans, including:

 

   

The “corridor method” is eliminated, requiring entities to recognize actuarial profits and losses incurred for the period reported,

 

   

Changes to the measuring and reporting of certain components of the defined benefit cost,

 

   

Improved disclosure requirements, including information on the characteristics of the defined benefit plans and the risks to which entities are exposed through participation in these.

The IAS 19 Amendments apply for years starting on or after January 1, 2013 and their effects are to be applied retrospectively. Grupo TMM will not be affected and the IAS 19 Amendments will not have an impact on the consolidated financial statements of Grupo TMM.

g. Offsetting Financial Assets and Liabilities (IAS 32 Amendments)

The IAS 32 Amendments add a guide to correct the inconsistencies in the application of the criteria for IAS 32 to offset financial assets and financial liabilities in the following two areas:

 

   

the meaning of “having the right to offset”,

 

   

that any gross settlement system could be considered equivalent to the net settlement.

The amendments are applicable for years starting on or after January 1, 2014 and are applied retrospectively. Company Management does not anticipate the amendments will have any material effect on the consolidated financial statements of Grupo TMM.

 

F-15


Table of Contents

h. Disclosures—Offsetting financial assets and liabilities (IFRS 7 Amendments)

Disclosures have been qualitatively and quantitatively included in IFRS 7 ‘Financial Instruments: Disclosures’ (IFRS 7) in terms of the gross and net amounts recognized in financial instruments that are (a) offset on the statement of financial position and (b) subject to agreements to report net amounts and similar arrangements, even when there is no offsetting on the statement of financial position. The Amendments are applicable for years starting on or after January 1, 2013 and for quarters during these years. The disclosures required are to be made retrospectively. Company Management does not anticipate the Amendments will have a material impact on the consolidated financial statements of Grupo TMM.

i. Annual Improvements 2009 - 2011 (The Annual Improvements)

The 2009 - 2011 Annual Improvements make various minor changes to different IFRS. The relevant changes for Grupo TMM are summarized following:

Clarifications of the requirements for the opening statement of financial position:

 

   

Clarifies that the appropriate date for the opening statement of financial position is the start of the previous period (the related notes are no longer required),

 

   

Considers comparative requirements for an opening statement of financial position when an entity changes accounting policies or makes retrospective reformulations or reclassifications, per IAS 8.

The Company has considered the early application of this Annual Improvement and does not present the notes to the statement of financial position as of December 31, 2010 as a result of the retrospective application of the accounting change mentioned in Note 3o.

Clarifications of the comparative information requirements providing additional minimum requirements:

 

   

Clarifies that the additional information to the financial statements does not need to be presented in the form of a complete set of financial statements for periods beyond the minimum requisites,

 

   

Requires that any additional information presented must be in accordance with the IFRS and that the entity must present comparative information in the related notes for said additional information.

Effect of tax on distributions to holders of capital instruments:

 

   

Corrects the inconsistency detected between IAS 12 “Income Tax” (IAS 12) and IAS 32 “Financial Instruments: Presentation” (IAS 32) in relation to the recognition of the effects of income tax related to distributions to holders of capital instruments and the transaction costs for a capital transaction.

 

   

Clarifies that the intention of the IAS 32 is to follow the requirements of IAS 12 for the accounting of income tax related to distributions to holders of capital instruments and the transaction costs for a capital transaction.

 

F-16


Table of Contents

Information by segments for the total assets and liabilities:

 

   

Clarifies that the total assets and liabilities for a particular reportable segment needs to be disclosed if and only if: (i) a measure of the total assets and the total liabilities (or both) is provided regularly to the COO that makes the decisions; (ii) there has been a material change in the measures disclosed in the last financial statements for the reportable segment.

The Annual Improvements described above are applicable for years starting on or after January 1, 2013. Company Management does not anticipate these improvements will have a material impact on the consolidated financial statements of Grupo TMM.

3 Summary of significant accounting policies:

Grupo TMM and its subsidiaries prepare their consolidated financial statements in accordance with International Financial Reporting Standards (“IFRS”), issued by the International Accounting Standards Board (“IASB”), and these are expressed in thousands of Mexican pesos, the currency in which the Company transacts a major share of its operations, and in which a significant portion of the Company’s assets and liabilities arose and/or are listed. Until December 31, 2011, the operating and reporting currency was the US dollar, see Note 3c below.

The accompanying consolidated financial statements were approved by the Company Board of Directors on April 9, 2013.

The most significant accounting policies are summarized following:

a Consolidation—

The consolidated financial statements include the accounts of Grupo TMM and those of its subsidiaries. The balances and transactions with subsidiary companies have been eliminated for the purposes of consolidation. Grupo TMM consolidates the companies in which it holds 51% or more direct or indirect interest and/or has control. In the case of jointly controlled investments, Grupo TMM recognizes its interest by proportional consolidation. All subsidiaries are reported as of December 31, 2012.

Subsidiaries

The Subsidiaries are all entities over which Grupo TMM has the power to govern the financial and operating policies, generally accompanying a shareholding of more than one half of the voting rights. These subsidiaries, accordingly, would be de-consolidated from the date that control by Grupo TMM ceases.

The cost of an acquisition is measured as the fair value of the assets transferred, equity instruments issued and liabilities incurred or assumed on the date of exchange, plus the costs directly attributed to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values on the acquisition date, irrespective of the extent of any non-controlling interest.

 

F-17


Table of Contents

All intercompany transactions, balances and unrealized gains on transactions between Grupo TMM’s companies are eliminated upon consolidation. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by Grupo TMM.

Associates

Associates are all entities over which Grupo TMM has significant influence but not control, generally accompanying a shareholding between 20% and 50% of the voting rights. Investments in associates are accounted for by the equity method of accounting and are initially recognized at their acquisition cost.

When Grupo TMM’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, Grupo TMM does not recognize further losses, unless it has incurred obligations or is committed to make payments on behalf of the associate.

Gains and losses on transactions between Grupo TMM and its associates are eliminated to the extent of Grupo TMM’s interest in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

b Business combinations

Grupo TMM applies the acquisition method to register business combinations. The payment Grupo TMM transfers to obtain control of a subsidiary is calculated as the sum of the fair values on the acquisition date of the assets transferred, liabilities incurred, and the capital interests issued by Grupo TMM, which includes the fair value of any asset or liability that arises from the contingent payment agreement. The acquisition costs are recorded in income as incurred.

Grupo TMM recognizes identifiable assets acquired and liabilities assumed in the business combination independent of whether these were previously reported in the financial statements for the party acquired prior to the acquisition. Assets acquired and liabilities assumed are generally issued at their fair value on the acquisition date.

Goodwill is the excess acquisition cost, in a business combination, on the fair value of the net assets acquired and is recorded at its cost less any impairment losses. Negative goodwill is reported immediately following the acquisition, in the statement of operations.

c Translation of foreign currency

As a result of changes in the economic environment and that the operations of Grupo TMM are currently concentrated in Mexico, as of January 1, 2012, the Company has decided to change its operating currency and reporting from US dollars to Mexican pesos. As of January 1, 2012, the date of conversion of the financial statements, the exchange rate was $13.9476. The procedures for converting the operating currency were applied prospectively as of said date, as follows:

 

   

All asset and liability lines for each statement of financial position for 2011 and 2010 were converted to the new operating currency using the exchange rate of $13.9476 and $12.3817 Mexican pesos per US dollar, respectively.

 

F-18


Table of Contents
   

In the case of non-monetary lines, the resulting amounts converted on this date were considered as their corresponding historic costs.

 

   

The revenue and costs on each consolidated statement of operations and comprehensive income were converted at the exchange rates for the transaction dates.

 

   

All resulting exchange differences were reported in the comprehensive income as part of the “Conversion balance”.

 

   

The translation effect in the year of the non-cash items originated in pesos (fixed assets, intangible assets and prepaid expenses) in the year is originated by the difference in its historical original value and the translation of such items at an exchange rate of 13.9476 pesos/dollar, when registering such items at its historical value in pesos.

d Valuation of foreign currency-

Monetary assets and liabilities denominated in foreign currency are translated into the operating currency at the current exchange rates. The difference between the exchange rate on the date of the transaction and the exchange rate on the settlement date, or if not settled the date of the statement of financial position, is included in the consolidated statements of operations as a foreign exchange gain/loss.

e Cash and cash equivalents—

Cash and cash equivalents includes the cash and banks and on-sight deposits, together with any other highly liquid and short-term investments that can easily be converted into cash and which are subject to insignificant risk of change in their value.

f Restricted cash—

Restricted cash represents the amount required to guarantee payments according to the obligations arising from the debt agreements on the acquisition of vessels and from the sale of receivables and trust certificates (See Notes 13 and 14).

g Accounts receivable—

Accounts receivable are carried at their original invoice amount less a provision made for estimated losses on these receivables. Losses or impairment on trade receivables are provided for when there is objective evidence that Grupo TMM will not be able to collect all amounts due to it in accordance with the original terms of the receivables.

If it is likely that the Company will not be able to recover all the amounts owed to it in accordance with the receivables contract, an impairment or loss on debt is recognized. The amount of the loss is the difference between the carrying amount of the asset and the present value of its future cash flows, and is included in the consolidated statement of operations for the year.

The losses and gains from disposing of assets are determined by the comparison of the resources received with the book value. The losses and gains are recognized in the consolidated statement of operations.

 

F-19


Table of Contents

h Materials and supplies—

Materials and supplies, consisting mainly of fuel and items for maintenance of property and equipment, are valued at the lower of the average cost and the net realizable value.

i Concession rights—

Concession rights correspond to payments made for the rights to operate the assets under concession, which are stated at cost and are amortized over the terms specified in the agreements.

j Properties, machinery, and equipment, net—

Property, machinery and equipment are stated at construction or acquisition cost. Acquisitions through capital leases or charter arrangements with an obligation to purchase are capitalized based on the present value of future minimum payments, recognizing the related liability. Depreciation of transportation equipment is computed using the straight-line method based on the useful lives of the assets net of the estimated residual value.

In December 2010, the Company adopted the revaluation model for one class of its assets (Properties) in accordance with IAS 16, recognizing a surplus from revaluation in the fixed assets; this surplus was calculated subtracting the book value from the appraisal value provided by independent appraisers. The increase in value from the revaluation was recognized directly in the stockholder equity as “Revaluation surplus”, this item is not susceptible to distribution until the Company releases the asset. For the years 2012 and 2011, a new valuation of these properties was deemed unnecessary, given the stable conditions of the property market in Mexico.

Recurring maintenance and repair expenditures are charged to operating expenses as incurred. The major repairs on transportation equipment are capitalized and amortized over the period in which benefits are expected to be received (two to three years for vessels).

k Prepaid expenses—

Prepaid expenses represent advance payments made for future services and are amortized in the period when these services are received.

l Income tax and corporate flat tax, prepaid or deferred—

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax basis of assets and liabilities and their carrying amounts in the financial statements. Currently enacted or substantively enacted tax rates are used in the determination of deferred income tax.

 

F-20


Table of Contents

Corporate Flat Tax or IETU is a tax that co-exists with Income Tax, therefore, the Company developed projections based on reasonable, reliable assumptions properly supported, which represent Management’s best estimate where it has identified that the expected trend is essentially that Income Tax will be incurred by Grupo TMM in future years. Accordingly, only deferred Income Tax has been recognized.

Deferred tax assets are recognized to the extent that it is probable that future taxable profit against which the temporary differences can be utilized will be available (see Note 20).

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

Changes to the assets and liabilities due to deferred taxes are recognized as a component of the fiscal benefit or expense in operations, except when these are associated with items that are recognized in other lines in the comprehensive income (such as the revaluation of land) or directly in the equity capital, in which case the deferred tax in question is reported in other lines in the comprehensive income or equity capital, respectively.

m Employee statutory profit sharing—

The employees’ statutory profit sharing is determined applying the rate of 10% on taxable income, adjusted as provided for by the Income Tax law. The employee profit sharing liability for the years 2012, 2011, and 2010, was $791, $857, and $630, respectively, among certain Grupo TMM subsidiaries.

n Loans—

Loans are recognized initially as the proceeds received, net of transaction costs incurred. Loans are subsequently stated at amortized cost using the effective yield method; any difference between proceeds (net of the minimum transaction costs) and the redemption value is recognized in the consolidated statement of operations over the period of the loans.

o Labor obligations—

Seniority premiums, to which employees are entitled after 15 years of service and after having retired at the age of 60, and retirement plan benefits obligations, are expensed in the years in which the services are rendered (see Note 22).

Other compensation based on length of service to which employees may be entitled in the case of retirement and also dismissals of personnel aged 55 and over , in accordance with the Federal Labor Law, are provided for based on an actuarial computation, in accordance with IAS 19 “Employee Benefits”.

 

F-21


Table of Contents

As of January 1, 2012, Grupo TMM has decided to voluntarily cancel its accounting policy on the reserve for severance pay resulting from dismissals of personnel under 55 years of age, as this benefit has been withdrawn and as possible future restructuring costs will no longer involve the payment of these benefits on termination of employment. The effects of this change in policy were applied retrospectively. The retrospective effects for 2011 resulted in a charge to operations of $10,013, cancellation of a liability for $7,327, and a benefit to accrued earnings of $17,340; for 2010 they resulted in a charge to operations of $8,053, cancellation of a liability for $7,775, and a benefit to accrued earnings of $15,828.

p Revenue and cost recognition—

Revenues

Revenue comprises the fair value of the resources received or receivable for services provided, net of rebates and discounts.

Revenue from bareboat vessel leasing is recognized monthly according to the number of days elapsed and during the term of the corresponding contract. Revenue from voyages, when their duration is longer than two months, is recognized proportionally as a shipment moves from origin to destination.

Revenues associated with ground transportation services and other non-maritime transactions are recognized at the time the services are rendered.

Costs and expenses

The costs and expenses for ground transportation and also those related to other maritime operations are recognized when the services are rendered.

Interest income and expense are reported as accrued using the effective interest method.

q Impairment of intangible assets and long-lived assets—

The Company reviews the carrying value of intangible assets and long-lived assets annually and impairments are recognized whenever events or changes in circumstances indicate that the carrying value may not be recoverable. An impairment loss is recognized for the amount by which the carrying amount of the assets exceeds its recoverable amount, which is the higher of an asset’s net selling price and its value in use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable discounted cash flows. As of December 31, 2011 losses for impairment were determined for a vessel, and also the goodwill for a business as the recoverable values for the long-lived assets were lower than their book values. No impairment losses were recorded as of December 31, 2012.

r Leases—

Leases of property, machinery and equipment where the Company has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalized at the inception of the lease at the lower of the fair value of the leased property and the present value of the minimum lease payments.

 

F-22


Table of Contents

Leases where the lessor retains a significant portion of the risks and rewards of ownership are classified as operating leases. Payments made under operating leases are charged to the statement of operations as they become due over the period of the lease.

s Non-controlling interest—

Represents the percentage of third party interest in the subsidiaries of Grupo TMM.

t Segments—

In identifying its operating segments, Management follows Grupo TMM’s service lines, which represent the main services provided by Grupo TMM.

Each of these operating segments is managed separately as each of these service lines requires different technologies and other resources as well as marketing approaches. All inter-segment transfers are carried out at market prices.

The accounting policies Grupo TMM uses for segment reporting under IFRS 8 are the same as those used in its financial statements, with the exception that corporate assets which are not directly attributable to the business activities of any operating segment are not allocated. In the financial periods presented, this primarily applies to the Grupo TMM’s head office.

u Non-current assets held for sale and discontinued operations—

When Grupo TMM intends to sell a non-current asset or a group of assets (a group held for sale), and if the sale is highly probably within the next 12 months, the assets or group held for sale are classified as “held for sale” and are reported separately in the statement of financial position.

Assets classified as “held for sale” are measured at their book value immediately prior to the classification as held for sale, or at their fair value less their cost of sale, whichever is less. No asset classified as “held for sale” is subject to depreciation or amortization after being so classified.

v Use of estimates—

The preparation of the consolidated financial statements requires management to make estimates and assumptions that could affect the reported amounts for assets and liabilities at the statement of financial position date, as well as income or loss for the period. Actual results may differ from these estimates.

w Equity capital and reserves—

Common shares are classified as equity. Grupo TMM does not have other equity instruments in addition to its common stock.

 

F-23


Table of Contents

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options, or for the acquisition of a business, are included in the cost of acquisition as part of the purchase consideration.

The translation balances include all current earnings and for previous periods.

The surplus from revaluation within the capital includes gains from the revaluation of properties, machinery, and equipment.

The conversion balance represents the effect from the change of currency from pesos to dollars in 1985 and the effect from the change of operating currency by certain Grupo TMM Subsidiaries prior to December 31, 2011.

x Trust certificates and obligations from the sale of receivables

The Company has entered into factoring agreements for the sale of present and future receivables. Proceeds are received when an agreement is made to issue trust certificates based on a pool of collections of receivables that generate certain encumbrances for the Company, which are in turn applied on a scheduled basis as payments of principal and interest. Collection is held by the designated trust and cash amounts exceeding scheduled payments are reimbursed to the Company (see Notes 13 and 14).

y Provisions, contingent liabilities, and contingent assets—

Provisions are recognized when the present obligations resulting as a result of a past event will probably lead to an outflow of Grupo TMM economic resources and the amounts can be reliably estimated. Timing or amount of the outflow may still be uncertain. A present obligation arises from a presence of a legal or constructive commitment that has resulted from past events. Provisions are not recognized for future operating losses.

Provisions are the amounts necessary for estimated outflows to settle the present obligation based on the most reliable evidence available at the date of the financial statements, including the risks and uncertainties associated with the present obligation. When there are several similar obligations, the likelihood that an outflow will be required in settlement is determined considering the class of obligations as a whole. Provisions are discounted at their present value, where the time value of money is material.

Any reimbursement that Grupo TMM can be virtually certain to collect from a third party regarding an obligation is recognized as a separate asset. However, this asset may not exceed the amount for the related provision.

All provisions are reviewed on the issue of the financial statements and adjusted to reflect the current best estimate.

 

F-24


Table of Contents

When the possible disbursement for present obligations is remote or improbable, this is not recognized as a liability, unless it was assumed in the course of a business combination.

Possible inflows of economic benefits to Grupo TMM that do not yet meet the recognition criteria of an asset are considered contingent assets.

4 Going concern:

The accompanying consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards, which consider the continuation of the Company as a going concern. The Company has sustained net losses in 2012 and 2010, principally as a result of its comprehensive financing cost. This condition, along with our substantial indebtedness raise substantial doubt our ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as an ongoing concern.

On January 30, 2012, Grupo TMM acquired a shipyard at the Port of Tampico, representing an investment of $54,301. This shipyard is for ship repairs and has two floating docks with a capacity of 3000 metric tons. In the long term, the Company expects to have the capacity to be able to build vessels at this facility and such an operation is estimated to generate EBITDA of approximately $27,300 per year and a margin of 32% its first year of operation.

In addition, the Company estimates it will have thirty dry docks per year, 37% of which will be of its own fleet, resulting savings in vessel repair and maintenance costs.

The maritime business has improved in its performance in recent years, becoming more efficient with the same level of income, consolidating as the most profitable business for Grupo TMM.

In addition, Management continues to work on the implementation of the five year growth plan, which includes the following projects:

Short term—

Company management has plans to disincorporate certain businesses where results have not been as expected. When these actions have been completed, the Company’s operating balance is expected to improve so as to focus on profitable businesses.

Medium term—

The Company plans to develop a container terminal and a liquids terminal the port of Tuxpan, Veracruz. The container terminal will offer service to the growing demand in the Gulf of Mexico, taking advantage of the growth of the Mexican market. The objective of the liquids terminal will be to manage both current imports and also the expected increase in the importation of gasoline and diesel, through the construction of a pipeline and a mooring position. This terminal will start operations mid-2015, contributing a significant portion of its expected revenue.

Increase the Grupo TMM’s fleet of supplier ships with specialized vessels, to face the growing demand for deep water exploration in Mexico.

 

F-25


Table of Contents

According to the Business Plan, between 2013 and 2015, Grupo TMM will invest in the acquisition of fourteen vessels, significantly improving its revenue. The plan considers the following program:

During 2013, nine ships are expected to be added under a bareboat rental scheme; in 2014, these same vessels are acquired under a seven year financial leasing plan at a per annum cost of 12%, plus a further two ships are added in June and September 2014 under a bareboat rental scheme, with the option to buy in the 7th year; in 2015, three ships are added that are replaced with sale.

5 Taxes receivable:

Taxes receivable as of December 31, 2012 and 2011 are summarized as follows:

 

     2012      2011  

Income Tax (ISR)

   $ 68,096       $ 33,223   

Asset Tax

     3,483         2,176   

Corporate Flat Tax

     3,648         2,873   
  

 

 

    

 

 

 
   $ 75,227       $ 38,272   
  

 

 

    

 

 

 

6 Other accounts receivable:

Other accounts receivable as of December 31, 2012 and 2011 are summarized as follows:

 

     2012      2011  

Services for port, maritime, and other operations

   $ 95,716       $ 105,179   

Insurance claims

     35,776         21,898   

Employees

     41,193         34,534   

Other

     47,802         44,981   
  

 

 

    

 

 

 
   $ 220,487       $ 206,592   
  

 

 

    

 

 

 

7 Other current assets:

Other current assets as of December 31, 2012 and 2011 are summarized as follows:

 

     2012      2011  

Prepaid expenses

   $ 3,377       $ 6,472   

Fleet insurance

     7,993         7,769   

Prepaid insurance premiums

     1,536         2,859   
  

 

 

    

 

 

 
   $ 12,906       $ 17,100   
  

 

 

    

 

 

 

 

F-26


Table of Contents

8 Concession rights:

The Company holds concessions to operate the cruise and vehicle terminal in the Port of Acapulco and the tugboat services in the Port of Manzanillo. The Manzanillo concession was renewed in January 2007 for an additional eight years. Under these concession agreements, the Company has the obligation to keep in good condition the facilities included in the concessions. At the end of the terms of the concession agreements, the concessions’ assets will revert to the Government.

Therefore the concession rights and the partial rights concessions provide for rights in favor of the Federal Government (see Note 24a).

The Company has met compliance with its obligation to maintain the concessioner’s facilities in good condition.

The concession rights as of December 31, 2012 and 2011 are summarized as follows:

 

     2012     2011     Years left to
amortize
 

Administración Portuaria Integral de Acapulco (1)

   $ 94,607      $ 94,607        10   

Transportación Marítima Mexicana (2)

     30,266        30,266        —     
  

 

 

   

 

 

   
     124,873        124,873     

Accumulated amortization

     (92,706     (88,930  
  

 

 

   

 

 

   

Concession rights—net

   $ 32,167      $ 35,943     
  

 

 

   

 

 

   

The amortization of the concession rights was $3,776 for the years ended December 31, 2012 and 2011.

 

(1) Concession expires June 2021.
(2) Concession expires January 2015. In January 2007, the total value of this concession has been fully amortized.

 

F-27


Table of Contents

9 Property, machinery, and equipment, net:

Property, machinery, and equipment as of December 31, 2012 and 2011 are summarized as follows:

 

     2012
     Net
balances at
year start
     Additions      Disposals      Transfers
and others
    Depreciation
/ impairment
     Net
balances at
year end
     Estimate
useful life
(years)

Vessels

   $ 7,634,540       $ 13,208       $ 2,751       $ 181,672      $ 475,949       $ 7,350,720       25

Shipyard

     —           —           —           59,503 (1)      1,524         57,979       40

Dry-docks:

                

Major vessel repairs

     83,267         93,612         —           (12,663     56,456         107,760       2.5

Building and facilities (2)

     248,323         —           —           (7,419 )(5)      10,130         230,774       20 & 25

Warehousing equipment

     8,326         390         —           (584     2,379         5,753       10

Computer equipment

     4,603         740         —           13        3,920         1,436       3 & 4

Terminal equipment

     8,773         534         —           92        1,473         7,926       10

Ground transportation equipment

     263,748         11,766         40,793         13,192        35,429         212,484       4.5 & 10

Other equipment

     13,657         178         —           349        2,195         11,989      
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    
     8,265,237         120,428         43,544         234,155        589,455         7,986,821      
                   

Lands

     1,376,460         —           —           25,091 (3)      —           1,401,551      
                   

Constructions in progress

     371,006         230,775         —           (273,500     —           328,281      
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    
   $ 10,012,703       $ 351,203       $ 43,544       $ (14,254   $ 589,455       $ 9,716,653      
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

     2011
     Net
balances at
year start
     Additions      Disposals      Transfers
and others
    Depreciation
/ impairment
    Net
balances at
year end
     Estimate
useful life
(years)

Vessels

   $ 7,138,892       $ 2,636       $ —         $ 961,623      $ 468,611 (4)    $ 7,634,540       25

Dry-docks:

                  

Major vessel repairs

     71,950         68,608         —           9,016        66,307        83,267       2.5

Buildings and facilities

     196,807         725         725         64,292        12,776        248,323       20 & 25

Warehousing equipment

     11,317         —           —           594        3,585        8,326       10

Computer equipment

     7,429         823         —           968        4,617        4,603       3 & 4

Terminal equipment

     9,137         614         —           2,397        3,375        8,773       10

Ground transportation equipment

     329,824         711         28,230         9,981        48,538        263,748       4.5 & 10

Other equipment

     13,484         363         167         2,780        2,803        13,657      
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    
     7,778,840         74,480         29,122         1,051,651        610,612        8,265,237      
                  

Land

     1,323,183         —           4,352         57,629        —          1,376,460      
                  

Constructions in progress

     328,400         139,978         —           (97,372     —          371,006      
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    
   $ 9,430,423       $ 214,458       $ 33,474       $ 1,011,908      $ 610,612      $ 10,012,703      
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

F-28


Table of Contents

The accumulated depreciation on property, machinery, and equipment as of December 31, 2012 and 2011 is $3,209,000 and $2,666,004, respectively.

 

(1) On January 30, 2012, Grupo TMM acquired a shipyard at the Port of Tampico, representing an investment of $54,301. This shipyard is for ship repairs and has two floating docks with a capacity of 3000 metric tons.
(2) In 2010 the Company adopted the revaluation method for one class of its assets (properties) in accordance with IAS 16, recognizing a Revaluation Surplus in the fixed assets as follows: Land for $1,154,036, Buildings and facilities for $58,500, and Constructions in progress for $(2,800), giving a total of $1,209,746 (see Note 3j).
(3) Includes the addition of the Inmobiliaria dos Naciones, S.A. de C.V. land for $65,358 and the reversion of the property revaluation surplus of $40,882.
(4) In 2011, the Company determined impairment of $11,200 for the Vessel Tula.
(5) includes reversion of revaluation surplus for $3,652.

As of December 31, 2012, 24 offshore vessels, 5 tanker vessels, and 5 tugboats are securing the issue of Trust Certificates. In addition, there are 10 properties, including the “La Moderna” property securing the Bancomext loan. Also, 39 tractor-trailers are securing the financing received from DC Automotriz Servicios.

10 Prepaid expenses and others:

Prepaid expenses as of December 31, 2012 and 2011 are summarized as follows:

 

     2012      2011  

Prepaid expenses

   $ 57,163       $ 62,373   

Other share investments, net (1)

     26,934         31,899   

Security deposits

     8,636         9,205   
  

 

 

    

 

 

 
   $ 92,733       $ 103,477   
  

 

 

    

 

 

 

 

(1) Corresponds to investments in Companies where the Company does not have significant influence or voting rights.

11 Intangible assets:

Intangible assets as of December 31, 2012 and 2011 are summarized as follows:

 

     2012  
     Net
balances
at year
start
     Additions      Disposals      Transfers
and others
    Amortization
/ impairment
     Net
balances
at year
end
     Estimated
useful life
 

Software

   $ 4,673       $ 7,342       $ —         $ 234      $ 5,510       $ 6,739         3 & 5   

Trademarks (1)

     125,528         —           —           —          —           125,528      

Non-competition rights (2)

     28,732         —           —           (5,910     22,822         —           5   
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    
   $ 158,933       $ 7,342       $ —         $ (5,676   $ 28,332       $ 132,267      
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

F-29


Table of Contents
     2011  

Software

   $ 1,250       $ 3,180       $ —         $ 4,539       $ 4,296       $ 4,673         3 & 5   

Goodwill (ADEMSA) (3)

     129,082         —           —           16,322         145,404         —        

Trademarks (1)

     111,434         —           —           14,094         —           125,528      

Non-competition rights (2)

     51,012         —           —           6,452         28,732         28,732         5   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    
   $ 292,778       $ 3,180       $ —         $ 41,407       $ 178,432       $ 158,933      
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

(1) On December 31, 2004, Grupo TMM acquired the Marmex trademark rights from its then partner Seacor Marine International, LLC, for the amount of $125,528, which was recorded on this date, deducting the non-controlling interest amount. Grupo TMM acquired said non-controlling interest and therefore the trademark rights are now classified in intangible assets.
(2) A stockholder with significant influence in the business decision making of Grupo TMM decided to sell her interest. In view that this individual also had knowledge of business plans, market condition, as well as relationships with customers and vendors of Grupo TMM, the Board of Directors approved the Company on November 20, 2007, to enter into a non competition agreement for a 5 year period with this individual; this agreement provides for a penalty of US$14.3 million (approximately $185,700) in the event of non-compliance.
(3) The goodwill arises from the purchase of Almacenadora de Depósito Moderno, S.A. de C.V., (“ADEMSA”). The value of the intangible asset for customer relations could not be reasonably estimated, therefore it is included in the value for this goodwill. It was decided to cancel the goodwill following the annual impairment trial balance performed in 2011 (see Note 24b IV).

The “ADEMSA” goodwill, the non-competition rights, and the Marmex trademark are subject to an annual impairment assessment in accordance with IAS 36.

The primary premises considered for the valuation of the trademark are: 5 year projections for business division, macroeconomic premises and for the maritime sector, historic operating balances (2008 - 2012), and monthly statistical reports on freight, vessels, and passengers provided by the Department of Transport and Communications (SCT).

 

F-30


Table of Contents

12 Financing:

The total debt as of December 31, 2012 and 2011 is summarized as follows:

 

     2012     2011  

Short term debt:

    

DVB Bank América (1)

   $ 34,605      $ 39,402   

DEG-Deutsche Investition (3)

     66,239        23,711   

DC Automotriz Servicios (2)

     21,123        18,202   

Autofin México (6)

     20,452        16,137   

Investors (9)

     12,988        —     

Pure Leasing (4)

     7,171        8,536   

Finox (10)

     6,000        —     

Interbanco (11)

     3,950        —     

INPIASA (8)

     2,397        2,413   

Value Arrendadora (13)

     281        —     

Logra Financiamientos (7)

     —          6,737   

Interest payable

     157,711        126,882   

Transaction costs

     (322     (2,261
  

 

 

   

 

 

 
   $ 332,595      $ 239,759   
  

 

 

   

 

 

 
     2012     2011  

Long term debt:

    

Trust Certificates

    

(CBF) (See note 14)

   $ 9,691,707      $ 9,427,642   

DVB Bank América (1)

     309,812        343,432   

Bancomext, S.N.C. (5)

     294,580        203,747   

DC Automotriz Servicios (2)

     59,159        77,814   

Investors (9)

     56,802        71,426   

Autofin México (6)

     44,206        60,282   

DEG-Deutsche Investition (3)

     —          47,422   

INPIASA (8)

     13,202        14,268   

Finox (10)

     9,000        —     

Banbajio (12)

     8,539        —     

Pure Leasing (4)

     3,054        9,791   

Value Arrendadora (13)

     1,128        —     
  

 

 

   

 

 

 
   $ 10,491,189      $ 10,255,824   
  

 

 

   

 

 

 

 

(1) In 2007, Grupo TMM entered into two lines of credit in US dollars with DVB Bank to acquire two chemical vessels (Maya and Olmeca). The first, with a loan facility for US$25.0 million (approximately $348,690), with an average interest rate of 7.42%, the senior note with a fixed rate of 6.88%, and the junior note with a fix rate of 11.365%. The second vessel loan facility for the amount of US$27.5 million (approximately $383,559), with an average interest rate of 7.78%, the senior note with a fixed rate of 7.21%, and the junior note with a fixed interest rate of 11.7025%.

Both loans are payable in monthly installments of principal and interest, maturing May 25, 2017, and June 19, 2017, respectively. Both facilities were contracted through the subsidiary TMM Parcel Tankers.

The Company began negotiations with the bank early in 2010 to improve the amortization profile for these loans, and also to reduce the effective rate. On March 30, 2011, the restructuring with DVB Bank was finalized with the signing of two new loans, which were opened April 4, 2011. The

 

F-31


Table of Contents

first is a “bridge” loan for US$3.5 million (approximately $48,817) with draws during the first twenty-four months, and monthly payments on principal starting month twenty-five, quarterly payments of interest at and AIR rate (bank available funds interbank rate) plus four hundred basis points, maturing June 2017.

This line of credit will reduce payment on the senior notes by US$150,000 (approximately $2,092) during the first eighteen months, and US$133,000 (approximately $1,855) during the following six months.

The second is a loan for US$4.0 million (approximately $55,790) that was used, together with Company cash, to prepay all the junior notes mentioned previous; this is a single draw loan with payment on principal due June 2017 and quarterly interest payments at an AIR rate (bank available funds interbank rate) plus four hundred basis points.

 

(2) This loan is comprised of different contracts made with DC Automotriz Servicios as follows:

 

  a. On July 19, 2007, the Company entered into a loan facility in Mexican pesos as part of the Forced Assignment of Rights Agreement entered into with DC Automotriz Servicios S. de R.L. de C.V. (now Daimler Financial Services México, S. de R.L. de C.V. “Daimler”) for the acquisition of automotive transportation assets for $123,700 at a variable rate of the 91-day TIIE rate plus 200 basis points, through its subsidiary Lacto Comercial Organizada, S.A. de C.V. (“Lacorsa”). Payment of which is made through 84 consecutive monthly payments on the principal plus interest on outstanding balances, commencing January 2008 and maturing in December 2014.

A debt recognition and restructure agreement was signed on this loan on December 1, 2010, for $96,700 at a variable rate of the 28-day TIIE plus 3.5 percentage points, through Lacorsa. Payment for which is made on 72 consecutive monthly payments on the principal plus interest on outstanding balances starting January 1, 2011 and maturing in December 2016.

 

  b. On June 4, 2008, the Company entered in a loan facility in Mexican pesos with “Daimler” for the acquisition of 31 transportation units for $19,800 at a fixed rate of 12.85%, through its subsidiary Lacorsa; payment for which is made on 60 consecutive monthly payments on the principal plus interest on outstanding balances, maturing in June 2013.

On September 26, 2008, the Company entered into a loan facility in Mexican pesos with “Daimler” for the acquisition of 8 transportation units for $5,200 at a fixed rate of 13.56%, through its subsidiary Lacorsa; payment for which is made on 60 consecutive monthly payments on the principal plus interest on outstanding balances, maturing in September 2013.

In June 2010, the both loans were restructured into a single loan for $21,700 at a fixed rate of 14.8%, through its subsidiary Lacorsa; payment for which is made on 60 consecutive monthly payments on the principal plus interest on outstanding balances, maturing in May 2015.

 

F-32


Table of Contents
(3) On January 11, 2008, Grupo TMM entered into a loan facility listed in US dollars to refinance the purchase of “ADEMSA” for US$8.5 million (approximately $110,400), at a fixed rate of 8.01%, payment on which is to be made in 14 consecutive semiannual payments on principal plus interest on outstanding balances, with a two year grace period on the principal and maturing in July 2014.

The last two capital maturities have not been paid on this loan, consequently the total of the debt has been reclassified in the short term. Company Management has been renegotiating this debt with the bank since the beginning of the year.

 

(4) In September 2009, the Company secured with Pure Leasing, S.A. de C.V. through its subsidiary TMM Logistics, S.A. de C.V., a line of credit in Mexican pesos for working capital and/or current accounts for $26,200 at a fixed rate of 14.25% with monthly payments on principal and interest on outstanding balances, maturing in September 2014.

 

(5) In June 2009, the Company secured with Banco Nacional de Comercio Exterior, S.N.C., Institución de Banca de Desarrollo, through its subsidiary TMM División Marítima, S.A. de C.V., a mortgage secured simple line of credit in US dollars for working capital for US$25.0 million (approximately $326,100) at a variable rate, maturing in June 2015, monthly interest payments on outstanding balances and principal at maturity, drawing both US dollars and Mexican pesos with the possibility of making prepayments on principal without penalty.

In July 2009, a first draw was made on the line of credit for US $6.9 million (approximately $90,000) at a variable rate of the 30-day Libor plus 600 basis points, with monthly interest payments. On July 30, 2010, the principal balance was prepaid in full on this draw and interest.

In November 2009, a second draw was made on the line of credit for $132,900 at a variable rate of the 28-day TIIE plus 400 basis points, with monthly interest payments. As of April 30, 2012, the principal on this draw and its interest has been prepaid in full.

In December 2009, a third draw was made on the line of credit for $11,900 at a variable rate of the 28-day TIIE plus 400 basis points, with monthly interest payments. On June 29, 2012, prepayment of the principal on this draw and its interest was completed in full.

In November 2010, the Company secured with Banco Nacional de Comercio Exterior, S.N.C., Institución de Banca de Desarrollo, through its subsidiary TMM División Marítima, S.A. de C.V., a new line of credit in US dollars for working capital for US$15.0 million (approximately $194,800), at a variable rate, maturing in June 2015, with monthly interest payments on outstanding balances and principal on maturity, with the possibility of making prepayments without penalty. The balance on both lines of credit, together, cannot exceed US $25.0 million, or the equivalent in Mexican pesos.

In November 2010, a first draw was made on the new line of credit for $115,000 at a variable rate of the 28-day TIIE plus 425 basis points, with monthly interest payments. As of December 31, 2012, the effective rate on this draw on the line of credit was 9.0475% with an outstanding balance of $76,200.

 

F-33


Table of Contents

In October 2011, a second draw was made on the new line of credit for $65,700 at a variable rate of the 28-day TIIE plus 425 basis points, with monthly interest payments. As of December 31, 2012, the effective rate on this draw on the line of credit was 9.0975% with an outstanding balance of $65,700.

In August 2012, the Company secured with Banco Nacional de Comercio Exterior, S.N.C., Institución de Banca de Desarrollo, through its subsidiary TMM División Marítima, S.A. de C.V., a new line of credit in US dollars for working capital and/or current account for US$15.0 million (approximately $194,800), at a variable rate, maturing in June 2015, with monthly interest payments on outstanding balances and principal on maturity, with the possibility of making prepayments without penalty. The balance on the three lines of credit, together, cannot exceed US $25.0 million, or the equivalent in Mexican pesos.

In August 2012, a first draw was made on the third line of credit for $161,600 at a variable rate of the 28-day TIIE plus 425 basis points, with monthly interest payments. As of December 31, 2012, the effective rate on this draw on the line of credit was 9.0975% with an outstanding balance of $161,600.

 

(6) In July 2010, the Company secured with Banco Autofin México S.A. Institución de Banca Múltiple (“BAM”), through its subsidiary Proserpec Servicios Administrativos, S.A.P.I. de C.V., a line of credit in Mexican pesos for working capital and treasury obligations for $100,000, at a variable rate of the 28-day TIIE plus 4.5 points, secured with fixed assets and the assignment of collection rights on contracts with some clients; payment for which would made on 24 consecutive monthly payments on the principal plus interest on outstanding balances, starting July 2010 and maturing in June 2012. On September 30, 2011, using the same line of credit, the balance on the principal for this draw and interest was prepaid in full.

In September 2011 and to strengthen the agricultural activities of “ADEMSA” (See Note 24b IV), the Company decided to take advantage of the line of credit held by Proserpec Servicios Administrativos, S.A.P.I. de C.V. with BAM, to secure a loan for $42,900. This amount will be recognized as a capital contribution in the company Comercializadora de Valle Hermoso, S.A. de C.V. (“COVAHESA”).

Therefore, considering the prepayment and this new draw on the line of credit, on September 30, 2011 the loans were combined into one for $80,400 at a variable rate of the 28-day TIIE plus 500 basis points, with monthly payments on principal and interest, and maturing September 2016. The effective rate on this draw on the line of credit as of December 31, 2012 was 9.3462% with an outstanding balance of $60,300.

In September 2012, the Company secured with BAM, through its subsidiary Servicios Directivos Sedise, S.A.P.I. de C.V., an additional line of credit in Mexican pesos for working capital for $4,400, at a variable rate of the 28-day TIIE plus 500 basis points, maturing in March 2013, with monthly interest payments on outstanding balances and principal on maturity, with the possibility of making prepayments without penalty. As of December 31, 2012, the effective rate on this draw on the line of credit was 9.8400% with an outstanding balance of $4,400.

 

F-34


Table of Contents
(7) In November 2011, the Company decided to secure a line of credit to strength the agricultural activities of “ADEMSA” (See Note 24b IV), through its subsidiary Proserpec Servicios Administrativos, S.A.P.I. de C.V. with Logra Financiamientos, S.A. de C.V. SOFOM ENR (“LOGRA”), for $10,600. This amount will also be recognized as a capital contribution in “COVAHESA”. The loan accrues interest at a variable rate of the 28-day TIIE plus 600 basis points, with monthly interest payments, four capital payments, and maturing December 2012. On December 27, 2012, payment of the principal on this draw and its interest was completed in full.

 

(8) In November 2011, the Company decided to enter into two loan facilities to strengthen the agricultural activities of “ADEMSA” (See Note 24b IV), through its subsidiary Proserpec Servicios Administrativos, S.A.P.I. de C.V. with INPIASA, S.A. de C.V. (“INPIASA”). The first for $15,700 at a variable rate of the 28-day TIIE plus 450 basis points, with monthly payments on principal and interest, and maturing August 2021; the second for $4,200 at a variable rate of the 28-day TIIE plus 450 basis points, with monthly payments on principal and interest, and maturing October 2016. The total amount for both loans will also be recognized as a capital contribution in “COVAHESA”. The effective rate for both loans as of December 31, 2012 was 9.3450%, with a total outstanding balance of $16,800.

 

(9) In January 2011, the Company decided to enter into two loan facilities to improve the Company’s amortization profile and to facilitate the cancellation process for the Obligations from the Sale of Receivables Program (See Note 13), through its subsidiary Transportación Marítima Mexicana, S.A. de C.V. with two private investors (“Investors”), who held “B” certificates, which were also cancelled under the aforementioned restructuring of the Program. Each loan for US$3.0 million (approximately $39,000) at a fixed rate of 11.2500%, with semiannual payments on principal and interest, with a two year grace period on the principal, and maturing January 2016. The total outstanding balance as of December 31, 2012 was US$6.0 million (approximately $77,900).

 

(10) In June 2012 and to continue to strengthen “ADEMSA’s” agricultural activities, the Company decided to secure a line of credit through its subsidiary Proserpec Servicios Administrativos, S.A.P.I. de C.V., with Corporación Financiera de Occidente, S.A. de C.V. SOFOL IBM (“FINOX”), for $18,000. This amount will also be recognized as a capital contribution in COVAHESA. The loan accrues interest at a variable rate of the 28-day TIIE plus 600 basis points, with 36 payments of principal and monthly interest, and maturing June 2015. As of December 31, 2012, the effective rate on this line of credit was 10.8550% with an outstanding balance of $15,000.

 

(11) In March 2012, the Company contracted with Inter Banco, S.A., through its subsidiary Transportación Marítima Mexicana, S.A. de C.V., a mortgage secured simple line of credit in Mexican pesos for working capital for $15,000 at a variable rate, maturing March 2013, with monthly payments of principal and interest on outstanding balances, with the possibility of making prepayments on the principal without penalty.

In March 2012, a first draw was made on the line of credit for $11,000 at a variable rate of the 28-day TIIE plus 475 basis points. In April 2012, a second draw was made on the line of credit for $4,000 at a variable rate of the 28-day TIIE plus 475 basis points. As of December 31, 2012, the effective rate for this draw on the line of credit was 9.5962% with an outstanding balance of $2,600.

 

F-35


Table of Contents
(12) In December 2012 and to continue to strengthen “ADEMSA’s” agricultural activities, the Company decided to contract a line of credit, through its subsidiary Proserpec Servicios Administrativos, S.A.P.I. de C.V., with Banco del Bajío, S.A. (“BANBAJIO”), for $8,500. This amount will also be recognized as a capital contribution in COVAHESA. The loan accrues interest at a variable rate of the 28-day TIIE plus 250 basis points, with 84 payments of principal and monthly interest, with a grace period of the first 12 months on the payment of principal, and maturing November 2019. As of December 31, 2012, the effective rate on this line of credit was 7.3422% with an outstanding balance of $8,500.

 

(13) In December 2012, the Company secured with Value Arrendadora, S.A. de C.V. SOFOM ENR, a line of credit in Mexican pesos for the acquisition of transportation equipment through financial leasing, for $1,400 at a fixed rate of 14.23% with monthly payments of principal and interest on outstanding balances and maturing December 2016.

Covenants-

The agreements related to the abovementioned loans contain certain covenants including the observance of certain financial ratios, restrictions on dividend payments, and sales of assets, among others. Grupo TMM and its subsidiaries were in compliance with these covenants and restrictions as of December 31, 2012 and 2011.

The interest expense on bank loans was $72,900, $70,900 and $93,400 for the years ended December 31, 2012, 2011 and 2010, respectively.

Maturity of long-term bank loans as of December 31, 2012 and 2011 is as follows (carrying value amounts):

 

     2012      2011  
Maturity    Loans - net      Loans - net  

2013

      $ 153,382   

2014

   $ 107,243         130,815   

2015

     403,184         274,851   

2016

     80,364         54,744   

2017

     200,221         214,389   

2018 and thereafter

     9,700,177         9,427,643   
  

 

 

    

 

 

 
   $ 10,491,189       $ 10,255,824   
  

 

 

    

 

 

 

 

F-36


Table of Contents

A summary of the estimated fair values of the Company’s debt as of December 31, 2012 and 2011 is shown following:

 

     2012      2011  
     Carrying
value
    Fair
value
     Carrying
value
    Fair
value
 

Short term debt:

         

Fixed interest rate

   $ 117,930      $ 117,930       $ 75,597      $ 75,597   

Variable interest rate

     57,276        57,276         39,541        39,541   

Transaction costs

     (322     —           (2,261     —     

Interest payable

     157,711        —           126,882        —     
  

 

 

   

 

 

    

 

 

   

 

 

 
   $ 332,595      $ 175,206       $ 239,759      $ 115,138   
  

 

 

   

 

 

    

 

 

   

 

 

 

Long term debt:

         

Fixed interest rate

   $ 10,916,930      $ 10,916,930       $ 10,825,207      $ 10,825,207   

Variable interest rate

     515,747        515,747         429,684        429,684   

Transaction costs

     (1,089,599     —           (1,173,691     —     

Interest payable

     148,111        —           174,624        —     
  

 

 

   

 

 

    

 

 

   

 

 

 
   $ 10,491,189      $ 11,432,677       $ 10,255,824      $ 11,254,891   
  

 

 

   

 

 

    

 

 

   

 

 

 

13 Obligations from the sale of receivables:

Under its factoring program, the Company and certain of its subsidiaries sold present and future accounts receivable to an independent trust, which in turn issued certificates to investors (“Certificates”). For accounting purposes, the factoring represented the total amount in US dollars for future services provided to customers according to the factoring.

On September 25, 2006, the Company finalized a Factoring program for US $200 million (approximately $2,789,500) with Deutsche Bank (the “Program”). As of December 31, 2010, the outstanding balance under this Program was US $17.2 million, exclusive of US$6.3 million for the transaction cost and US$0.9 million in interest payable, bearing a fixed interest rate of 12.47% per annum.

This Program contemplated restricted cash to secure any potential payment obligation arising from default. The reserved cash balance as of December 31, 2010 was US$0.7 million.

To improve the amortization profile and the Company’s financial expenses, negotiations were opened with Deutsche Bank in mid-2010 to repurchase early the certificates the bank holds. In April 2011, the Company finalized the early repurchase of all the certificates held by Deutsche Bank for a total of US$9.1 million. This amount represents the total value of the certificates at a price of US$0.91, plus the interest earned an unpaid on the date of the repurchase.

 

F-37


Table of Contents

The obligations from the sale of receivables as of December 31, 2011 had performed as follows:

 

     2011  

2006 Series

   $ 2,789,520   

Cumulative payments made

     (2,782,016

Remission of debt

     (7,504
  

 

 

 

Obligations from the sale of receivables, long term

   $ —     
  

 

 

 

14 Trust certificates program:

First, Second and Third tranche—

On July 19, 2007, the Company released its First Tranche for $3,000,000, on April 30, 2008, a Second Tranche was issued for $1,550,000, and on July 1, 2008, a Third Tranche was released for $4,390,000 in Trust Certificates under the Trust Certificate Program for up to $9,000,000 (“the Program”) established by the Company. The Trust Certificates originally had a 20 year term and an AA (mex) initial credit rating issued by Fitch de Mexico, S.A. de C.V. In November 2009, after reviewing the performance of the Tranches and also the adverse market conditions and the delay on adding all the vessels to the Program, HR Ratings de México, S.A. de C.V. gave the First Tranche a rating of HR AA–, the Second Tranche a rating of HR A+, and the Third Tranche a rating of HR A—with stable outlook for the three Tranches. On subsequent review, in May 2010 HR Ratings de México, S.A. de C.V. confirmed its rating HR AA for the First Tranche with stable outlook, for the Second Tranche HR A+, and for the Third Tranche HR A—with positive outlook for the latter two Tranches.

The proceeds from these Tranches were used for the prepayment of various bank loans including capital, interest, and prepayment expenses, the creation of reserves for the acquisition of vessels, and also payment of expenses and commissions associated with the Tranches, and the creation of cash reserves.

Interest on the Tranches was payable semiannually, having contracted a hedging derivative financial instrument (interest rate CAP) which allowed for the trust’s maximum payable rate to be 11.50% per annum during the first 4 years of the First Tranche’s maturity and 3 years on the Second and Third Tranches.

The Tranches represented the total amount for future services to be provided to the Contracting Parties, according to the terms of the Trust Certificate Program. The Tranches observed a cash restriction in order to secure certain operating obligations and potential payment obligations in the event of default.

Fourth consolidated tranche—

On July 29, 2010, a Fourth Tranche was released for $10,500,000. This Fourth Tranche consolidates the three previous tranches into one. The Trust Certificates corresponding to the Fourth Tranche bear a term of 20 years and have an initial credit rating of HR AA with stable outlook given by HR Ratings de México, S.A. de C.V. on July 23, 2010. On September 19, 2011, following the first annual performance review of this Fourth Tranche, HR Ratings de México, S.A. de C.V. confirmed its rating of HR AA with stable outlook. On December 20, 2012, following the second annual review of the performance of this Fourth Tranche, HR Ratings de México, S.A. de C.V. confirmed its rating of HR AA with stable outlook.

 

F-38


Table of Contents

The proceeds from this Fourth tranche were used to repurchase the three previous tranches in full, the early prepayment of various bank loans, payment of expenses and commissions related to the Fourth Tranche, and the creation of cash reserves.

Interest on this Fourth Tranche is payable semiannually on February 15 and August 15 of each year, commencing February 15, 2011, having already contracted a hedging derivative financial instrument (interest rate CAP) which allows for the Trust’s maximum payable rate to be 10.80% per annum during the first 4 years of this Fourth Tranche’s maturity.

The Fourth Tranche represents the total amount in US dollars for future services to be provided to the Contracting Parties, according to the terms of the Trust Certificate program. This Fourth Tranche, as with the previous, observes a cash restriction in order to secure certain operating obligations and potential payment obligations in the event of default. The restricted cash balance as of December 31, 2012 and 2011 is $592,345 and $568,072, respectively.

The outstanding balance under this Fourth Tranche as of December 31, 2012 was $10,600,100 at an interest rate of 7.29% per annum.

The interest expense for the trust certificates was $774,900, $775,900 and 793,600 for the years ended December 31, 2012, 2011 and 2010, respectively.

The Trust Certificates as of December 31, 2012 and 2011 are summarized as follows:

 

     2012     2011  

Fourth Tranche, consolidated

   $ 10,500,000      $ 10,500,000   

Capitalization of interest

     229,022        —     

Payments made (1)

     (128,866     (113,466

Interest payable

     148,111        174,624   

Transaction costs

     (1,056,560     (1,133,516
  

 

 

   

 

 

 

Trust Certificates, long term

   $ 9,691,707      $ 9,427,642   
  

 

 

   

 

 

 

 

(1) Capital payments made during 2012 amounted to $15,400.

 

F-39


Table of Contents

15 Balances and transactions with related parties:

The accounts payable and transactions with related parties as of December 31, 2012 and 2011 are summarized as follows:

 

     2012      2011  

SSA México, S.A. de C.V.

   $ 18,061       $ 12,218   
  

 

 

    

 

 

 

SSA México, S.A. de C.V., is a Company with which Grupo TMM and Administración Portuaria Integral de Acapulco, S.A. de C.V. conduct leasing operations, consulting, and interests.

The most relevant transactions with related parties as of December 31, 2012, 2011, and 2010, are summarized as follows:

 

     2012      2011      2010  

Income:

        

Management fees (1)

   $ —         $ —         $ 9,225   

Leases (2)

     788         939         953   

Interests (3)

     —           2,444         3,640   
  

 

 

    

 

 

    

 

 

 

Expenses:

        

Management expenses (4)

   $ —         $ —         $ 20,156   

Other expenses (5)

     132         2,566         3,815   

Fees (6)

     —           —           1,328   
  

 

 

    

 

 

    

 

 

 

 

(1) Includes management consulting fees billed by Servicios Corporativos TMM, S.A. de C.V. (merged with TMM Agencias, S.A. de C.V.) and Servicios Directivos Sedise, S.AP.I. de C.V. provided to Seglo, S.A. de C.V., for $180. In addition, Seglo Operaciones Logísticas, S.A. de C.V. provided services to Seglo, S.A. de C.V., for $9,045.
(2) Grupo TMM, S.A.B. leasing with SSA México, S.A. de C.V.
(3) Administración Portuaria Integral de Acapulco, S.A. de C.V. interests with SSA México, S.A. de C.V.
(4) Management consulting and trade commission between Seglo, S.A. and Seglo Operaciones Logísticas, S.A. de C.V., in addition to management consulting on recovery of Grupo TMM expenses from Comercializadora y Distribuidora Milgret, S.A.P.I. de C.V.
(5) Management consulting that SSA México, S.A. de C.V. billed to Administración Portuaria Integral de Acapulco, S.A. de C.V.
(6) Trade commission that Seglo, S.A. billed to Seglo Operaciones Logísticas, S.A. de C.V.

Operations involving executive personnel for the years ended December 31, 2012, 2011, and 2010, include the following expenses:

 

Short term employee benefits    2012      2011      2010  

Salaries

   $ 64,548       $ 60,645       $ 67,465   

Social security costs

     1,955         1,824         1,287   
  

 

 

    

 

 

    

 

 

 
   $ 66,503       $ 62,469       $ 68,752   
  

 

 

    

 

 

    

 

 

 

 

F-40


Table of Contents

16 Accounts payable and accrued expenses:

Accounts payable and accrued expenses as of December 2012 and 2011 are analyzed as follows:

 

     2012      2011  

Taxes payable (Note 24 v)

   $ 325,342       $ 97,075   

General expenses

     451,138         438,192   

Operating expenses

     70,384         98,554   

Salaries and wages

     22,822         46,236   

Purchased services

     49,296         48,342   

Other

     12,125         10,454   
  

 

 

    

 

 

 
   $ 931,107       $ 738,853   
  

 

 

    

 

 

 

17 Stockholder equity:

Capital stock—

As of December 31, 2012 and 2011, the Company’s capital stock is comprised of 102,182,841 shares outstanding, registered, without par value, and with voting rights, which may be held by persons of companies of Mexican nationality or Mexican companies that include in their bylaws the exclusion of foreigners clause. Foreigners may acquire shares under the figure of American Depositary Shares.

In January 2011, the Company sold 188, 200 repurchased shares and in May 2010, the Company repurchased 29,800 shares.

On June 5, 2012, the Company registered Form 25 with the US Securities and Exchange Commission (SEC) to complete the delisting of its American Depositary Shares (ADSs) on the New York Stock Exchange, effective as of market closing on June 15, 2012. Following this date, the TMM’s ADSs are traded over-the-counter (OTC) under the listing code GTMAY. The underlying TMM common shares for the ADSs continue to be traded on the Mexican Stock Exchange under the listing code TMM A.

Dividends—

Dividends paid that are charged to previously taxed accumulated earnings are not subject to income tax. Dividends paid in excess of the net tax profit account (CUFIN) are taxed at 42.86% when paid. The tax is payable by the Company and may be credited against its income tax in the same year or the following two years.

The crediting under the terms of Article 11 of the Income Tax Law is also applicable against installment payments and not only against the tax assessed at year close (taxable income).

In the event of a capital reduction, any excess of stockholder equity over capital contributions will be treated as dividends, in accordance with the provisions of the Income Tax Law.

On April 29, 2011, the Ordinary General Stockholders’ Meeting decided to amend the resolution adopted April 24, 1997, to revoke the dividend decreed on that date, releasing the Company from the payment of same. As a result, the liability recorded for this item was cancelled.

 

F-41


Table of Contents

Capital premium—

This premium was the result of an issuance of convertible obligations in 2002 that were settled the following year.

18 Other expenses, net:

Other expenses as of December 31, 2012, 2011, and 2010 are summarized as follows:

 

     2012     2011     2010  

Goodwill impairment (Note 11 (3))

   $ —        $ (129,555   $ —     

Reserve for fiscal resolution cost (Note 24b V)

     (100,000     —          —     

Reserve for prepayment and arbitration expenses (Note 24b III)

     (6,830     (83,611     (2,932

Cancellation of ferriage

     —          (28,483     —     

Amortization of non-competition rights (Note 11(2))

     (22,822     (25,600     (26,032

Provision for consulting payments

     —          (4,449     (3,905

Other—Net

     (622     (3,157     417   

Proceeds from the sale of subsidiaries

     —          (2,560     (32,629

Gain on the purchase of Inmobiliaria Dos Naciones (see Note 1h and 4)

     74,245        —          —     

Dividends received from Comercializadora y Distribuidora Milgret

     23,420        —          —     

Cancellation provision for tax on dividends

     —          54,494        —     

Taxes recovered, net of expenses incurred

     6,232        37,282        —     

Proceeds from the sale of fixed assets

     —          10,364        51   
  

 

 

   

 

 

   

 

 

 
   $ (26,377   $ (175,275   $ (65,030
  

 

 

   

 

 

   

 

 

 

19 Gain (loss) on exchange, net:

The gain (loss) on exchange included in the consolidated statement of operations for the years ended December 31, 2012, 2011, and 2010 is due to the significant appreciation/depreciation of the Mexican peso against the US dollar, where a large portion of the debt is denominated in Mexican pesos, represented by the issuance of the trust certificates (see note 14).

 

F-42


Table of Contents

An analysis of the exchange balance for the years 2012, 2011, and 2010 follows:

 

     2012     2011     2010  

Cash and cash equivalents

   $ (323   $ (4,250   $ 1,112   

Short term investments

     (12,691     (68,375     55,805   

Accounts receivable

     (14,340     (18,927     13,193   

Other accounts receivable

     (4,517     (55,811     18,779   

Prepaid expenses

     (3,363     (3,393     4,916   

Suppliers

     18,802        10,141        (11,171

Accounts payable and accrued expenses

     19,453        84,381        (41,967

Debt

     37,981        1,212,457        (524,171

Assets and liabilities denominated in pesos

     —          8,227        1,807   
  

 

 

   

 

 

   

 

 

 

Gain (loss) on exchange, net

   $ 41,002      $ 1,164,450      $ (481,697
  

 

 

   

 

 

   

 

 

 

20 Income tax, tax loss carryforwards, and corporate flat tax:

Income Tax-

The parent company has been authorized by the Mexican tax authorities to determine its consolidated taxable income jointly with its controlled companies.

Consolidated tax losses were incurred for the years ended December 31, 2012, 2011 and 2010 in the amount of $140,384, $346,487, and $527,165, respectively.

The difference between taxable and book income is due primarily to the gain or loss on inflation recognized for tax purposes, the difference between tax and book amortization and depreciation, as well as certain temporary differences reported in different periods for financial and tax purposes, and non-deductible expenses.

The provision for income tax recognized in the statement of operations for the years ended December 31, 2012, 2011, and 2010 is detailed following:

 

     2012     2011     2010  

Income tax determined

   $ (3,660   $ (8,028   $ (8,568

Corporate flat tax

     (5,123     (33,032     (1,782
  

 

 

   

 

 

   

 

 

 

Tax on earnings

   $ (8,783   $ (41,060   $ (10,350
  

 

 

   

 

 

   

 

 

 

 

F-43


Table of Contents

The reconciliation between the provision for income tax based on the statutory income tax rate and the provision recorded by the Company as of December 31, 2012, 2011, and 2010 is as follows:

 

     2012     2011     2010  

(Loss) income before taxes

   $ (772,333   $ 232,643      $ (994,964
  

 

 

   

 

 

   

 

 

 

Income tax

     231,700        (69,793     298,489   

(Decrease) increase from:

      

Difference in depreciation and amortization

     43,843        (129,157     (151,859

Revaluation surplus

     655        (1,007     370,403   

Income recognized in advance

     (249,947     (216,832     (225,040

Inventories

     1,758        (5,853     (16,150

Inflationary and currency exchange effects on monetary assets and liabilities, net

     (109,023     (139,012     (3,286

Effects related to the peso/dollar exchange in tax loss carryforwards, net

     384,902        142,504        358,069   

Provisions and allowance for doubtful accounts

     61,794        8,676        (2,910

Sale of assets

     4,437        (3,318     (5,889

Valuation allowance for tax losses

     (351,897     387,881        (598,804

Non-taxable revenue

     813        62        88   

Sale of shares

     35,798        (820     (11,019

Non-deductible expenses

     (63,616     (14,391     (24,781

Other, net

     —          —          2,339   
  

 

 

   

 

 

   

 

 

 

Provision for income tax

   $ (8,783   $ (41,060   $ (10,350
  

 

 

   

 

 

   

 

 

 

Under the terms of the Income Tax Law, from 2010 to 2012 the general rate was 30%.

The components of deferred tax assets and (liabilities) for the years ended December 31, 2012, 2011, and 2010 are comprised as follows:

 

     2012     2011     2010  

Tax loss carryforwards

   $ 3,108,798      $ 2,667,227      $ 2,768,403   

Valuation allowance for tax losses

     (928,860     (576,956     (1,117,975
  

 

 

   

 

 

   

 

 

 
     2,179,938        2,090,271        1,650,428   

Inventories and provisions—Net

     232,784        145,446        97,326   

Income recognized in advance

     50,783        296,749        529,827   

Concession rights and property, machinery, and equipment

     (1,521,561     (1,589,845     (1,441,916
  

 

 

   

 

 

   

 

 

 

Total deferred tax assets

   $ 941,944      $ 942,621      $ 835,665   
  

 

 

   

 

 

   

 

 

 

The Company has recognized a deferred tax asset related to its tax loss carryforwards as well as its subsidiaries and other items after evaluating the reversal of existing taxable temporary differences. To the extent that the balance of the deferred tax asset exceeds the existing temporary differences, Management has evaluated the recoverability of such amounts by estimating future taxable profits in the foreseeable future which extend from 2013 through 2022. The tax profits include estimates of profitability and macroeconomic assumptions which are based on Management’s best judgment (see Note 4).

Corporate flat tax—

The Corporate Flat Tax (impuesto Empresarial a Tasa Única (“IETU”)) for the period is calculated by applying a rate of 17.5% to the amount resulting from reducing the total revenues received from the activities to which this tax applies by the authorized deductions, provided the former are greater than the latter, and with the understanding that for such purposes both revenues and deductions are contemplated when these have been either collected or paid. The so-called IETU credits are reduced from the above income, as provided for in currently enacted legislation.

 

F-44


Table of Contents

IETU credits are amounts that can be reduced from this tax, which include, among other things, greater deductions of revenues from previous years, credits for salaries, social security contributions, and deductions of some assets such as inventories and fixed assets during the transition period from the IETU entering into effect.

The IETU is a tax that co-exists with Income Tax (ISR), and it is subject to the following:

 

  a If the IETU exceeds the Income Tax for the same period, the Company will pay IETU on the portion exceeding the income tax. Pursuant to the foregoing, the Company will reduce Income Tax paid in the same period from the IETU for the period.

 

  b If the IETU is less than the Income Tax for the same period, the Company will not pay IETU for the period.

 

  c If the IETU base is negative due to deductions that exceed taxable income, there will be no IETU due. In addition, the amount of that base multiplied by the IETU rate results in an IETU credit that can be offset against the IETU for subsequent periods.

During the year ended December 31, 2012, the holding Company determined deductions higher than the IETU income for $28,346.

During the year ended December 31, 2011, the holding Company determined an IETU base of $44,799 and a tax of $7,839, applying the credit from the higher deductions on past income to which the Company is entitled under the terms of Article 11 of the IETU Law.

During the year ended December 31, 2010, the holding Company determined an IETU base of $612 and a tax of $107, applying the credit from the higher deductions on past income to which the Company is entitled under the terms of Article 11 of the IETU Law.

 

F-45


Table of Contents

Tax loss carryforwards—

As of December 31, 2012, the tax consolidating group headed by Grupo TMM, as parent company, had tax loss carryforwards, shown as follows, which may be restated by inflation, under Mexican legislation.

 

Year in which the

loss was incurred

   Inflation restated
amounts to June 2012
     Year of
expiration
 

2005

   $ 52,181         2015   

2006

     674,549         2016   

2007

     138,089         2017   

2009

     762,331         2019   

2010

     566,700         2020   

2011

     359,736         2021   

2012

     143,430         2022   
  

 

 

    
   $ 2,697,016      
  

 

 

    

21 Financial information by segment:

The Company operates in the following segments: specialized maritime transportation, land transportation and logistics, operation of ports and terminals, and related services. Specialized maritime transportation (“Maritime Transportation Division”) operations include the transportation of liquid petroleum and petrochemical products in bulk, materials and supplies for drilling platforms, as well as tugboat services. Land transportation and logistics (“Logistics Division”) includes dedicated truck services, warehousing, and logistics solutions. Port operations (“Ports and Terminal Division”) include terminal service and agency activities.

There have been no changes in the measuring methods used to calculate the earnings reported for each segment.

The information for each operating segment is as follows:

 

December 31, 2012

   Specialized
maritime
division
    Logistics
division
    Ports and
terminals
division
    Elimination
between
segments and
shared
accounts
    Total
consolidated
 

Transportation revenues

   $ 2,188,809      $ 992,207      $ 101,193      $ 52,536      $ 3,334,745   

Costs and expenses

     (1,206,865     (960,999     (94,165     (225,238     (2,487,267

Depreciation and amortization

     (539,041     (134,255     (10,811     (12,537     (696,644
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from transportation

   $ 442,903      $ (103,047   $ 3,783      $ (185,239   $ 150,834   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Costs, expenses, and revenues not allocated

             (937,288
          

 

 

 

Net loss for the year attributable to Grupo TMM, S.A.B. stockholders

           $ (786,454
          

 

 

 

Total assets by segment

   $ 12,728,408      $ 679,732      $ 1,679,835      $ —        $ 15,087,975   

Shared assets

     —          —          —          (2,142,707     (2,142,707
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

   $ 12,728,408      $ 679,732      $ 1,679,835      $ (2,142,707   $ 12,945,268   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities by segment

   $ 10,979,340      $ 1,434,726      $ 692,338      $ —        $ 13,106,404   

Shared liabilities

     —          —          —          (819,947     (819,947
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

   $ 10,979,340      $ 1,434,726      $ 692,338      $ (819,947   $ 12,286,457   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total capital expenditures by segment

   $ 307,135      $ 10,874      $ 18,671      $ —        $ 336,680   

Shared capital expenditures

     —          —          —          14,523        14,523   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total capital expenditures

   $ 307,135      $ 10,874      $ 18,671      $ 14,523      $ 351,203   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

F-46


Table of Contents

December 31, 2011

   Specialized
maritime division
    Logistics division     Ports and terminals
division
    Elimination
between segments
and shared
accounts
    Total
consolidated
 

Transportation revenues

   $ 2,133,395      $ 1,041,072      $ 123,701      $ 46,702      $ 3,344,870   

Costs and expenses

     (1,118,967     (1,027,535     (84,555     (233,161     (2,464,218

Depreciation and amortization

     (495,539     (120,806     (11,359     (12,811     (640,515
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from transportation

   $ 518,889      $ (107,269   $ 27,787      $ (199,270   $ 240,137   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Costs, expenses, and revenues not allocated

             (61,093
          

 

 

 

Net profit for the year attributable to Grupo TMM, S.A.B. stockholders

             179,044   
          

 

 

 

Total assets by segment

   $ 12,679,038      $ 878,350      $ 2,040,520      $ —        $ 15,597,908   

Shared assets

     —          —          —          (2,318,900     (2,318,900
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

   $ 12,679,038      $ 878,350      $ 2,040,520      $ (2,318,900   $ 13,279,008   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities by segment

   $ 10,706,275      $ 1,603,528      $ 970,711      $ —        $ 13,280,514   

Shared liabilities

     —          —          —          (1,520,920     (1,520,920
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

   $ 10,706,275      $ 1,603,528      $ 970,711      $ (1,520,920   $ 11,759,594   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total capital expenditures by segment

   $ 116,282      $ 5,990      $ 63,553      $ —        $ 185,825   

Shared capital expenditures

     —          —          —          5,257        5,257   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total capital expenditures

   $ 116,282      $ 5,990      $ 63,553      $ 5,257      $ 191,082   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

December 31, 2010

   Specialized
maritime division
    Logistics division     Ports and terminals
division
    Elimination
between segments
and shared
accounts
    Total
consolidated
 

Transportation revenues

   $ 2,534,603      $ 1,132,515      $ 130,224      $ 61,973      $ 3,859,315   

Costs and expenses

     (1,265,987     (1,122,447     (71,070     (237,968     (2,697,472

Depreciation and amortization

     (512,784     (188,797     (12,991     (10,716     (725,288
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from transportation

   $ 755,832      $ (178,729   $ 46,163      $ (186,711   $ 436,555   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Costs, expenses, and revenues not allocated

             (1,462,683
          

 

 

 

Net earnings for the year attributable to Grupo TMM, SAB. stockholders

           $ (1,026,128
          

 

 

 

Total assets by segment

   $ 10,633,503      $ 1,525,586      $ 1,403,033      $ —        $ 13,562,122   

Shared assets

     —          —          —          (241,121     (241,121
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

   $ 10,633,503      $ 1,525,586      $ 1,403,033      $ (241,121   $ 13,321,001   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities by segment

   $ 10,954,251      $ 1,716,500      $ 451,585      $ —        $ 13,122,336   

Shared liabilities

     —          —          —          (1,107,578     (1,107,578
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

   $ 10,954,251      $ 1,716,500      $ 451,585      $ (1,107,578   $ 12,014,758   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total capital expenditures by segment

   $ 185,499      $ 69,605      $ 31,390      $ —        $ 286,494   

Shared capital expenditures

     —          —          —          119,444        119,444   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total capital expenditures

   $ 185,499      $ 69,605      $ 31,390      $ 119,444      $ 405,938   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

22 Employee benefits:

The seniority premiums, severance for personnel aged 55 or over, and the retirement plan benefits (“pensions”) obligations, are based on actuarial calculations using the projected unit credit method. Pension benefits are based mainly on years of service, age and salary level upon retirement.

 

F-47


Table of Contents

The amounts charged to the statement of operations for seniority premiums, pensions, and severances on termination of employment for personnel aged 55 or over, include the amortization of the cost of past services over the average time of service remaining. The Company continues with its policy of recognizing actuarial losses and gains for seniority premiums and pensions in the consolidated statement of operations with a net tax balance of $8,036 and $(29,084) in 2012 and 2011, respectively.

Severances prior to retirement for personnel aged 55 or over consider the immediate recognition of the costs of past services and actuarial losses and gains.

The details of the net cost for the period for pensions and seniority bonuses, and also the basic actuarial estimates for the calculation of these labor obligations as of December 31, 2012, 2011, and 2010 are summarized as follows:

 

                                               
     2012      2011     2010  

Labor cost

   $ 7,180       $ 6,481      $ 6,067   

Financial cost

     4,439         11,909        12,181   

Returns on plan assets

     148         (953     (191
  

 

 

    

 

 

   

 

 

 

Net cost for the period

   $ 11,767       $ 17,437      $ 18,057   
  

 

 

    

 

 

   

 

 

 

The details of the net cost for the period for severances for personnel aged 55 of over, and also the basic actuarial estimates for the calculation of this labor obligation are summarized as follows:

 

                                               
     2012      2011      2010  

Labor cost

   $ 3,846       $ 3,782       $ 2,022   

Financial cost

     2,057         1,828         1,060   
  

 

 

    

 

 

    

 

 

 

Net cost for the period

   $ 5,903       $ 5,610       $ 3,082   
  

 

 

    

 

 

    

 

 

 

The reserve for pensions and seniority premiums as of December 31, 2012, 2011, and 2010 is comprised as follows:

 

     2012     2011     2010  

Defined benefit obligations (“DBO”)

   $ 190,109      $ 188,609      $ 161,149   

Plan assets

     (1,176     (1,674     (11,901

Transition Assets pending Amortization

     (484     —          —     

Miscellaneous

     —          —          (38
  

 

 

   

 

 

   

 

 

 

Reserve for pensions and seniority premiums

   $ 188,449      $ 186,935      $ 149,210   
  

 

 

   

 

 

   

 

 

 

The DBO for pensions and seniority premiums as of December 31, 2012, 2011, and 2010 is comprised as follows:

 

     2012     2011     2010  

DBO at year start

   $ 188,609      $ 161,149      $ 154,667   

Labor cost

     7,180        6,481        6,067   

Financial cost

     4,439        11,909        12,181   

Benefits paid

     (11,799     (11,326     (11,859

Miscellaneous

     —          —          (1,684

Actuarial losses (gains)

     1,680        20,396        1,777   
  

 

 

   

 

 

   

 

 

 

DBO at year end

   $ 190,109      $ 188,609      $ 161,149   
  

 

 

   

 

 

   

 

 

 

 

F-48


Table of Contents

The assets of the pension and seniority premium plan as of December 31, 2012, 2011, and 2010 are comprised as follows:

 

                                               
     2012     2011     2010  

Value of the fund at year start

   $ 1,674      $ 11,901      $ 13,396   

Expected return on plan assets

     (498     (10,227     191   

Benefits paid

     —          —          (1,686
  

 

 

   

 

 

   

 

 

 

Value of the fund at year end

   $ 1,176      $ 1,674      $ 11,901   
  

 

 

   

 

 

   

 

 

 

The reserve for severances is comprised as follows:

 

                                               
     2012     2011      2010  

Defined benefit obligations

   $ 23,564      $ 26,480       $ 23,577   

Transition assets pending amortization

     (870     —           —     
  

 

 

   

 

 

    

 

 

 

Reserve for severance

   $ 22,694      $ 26,480       $ 23,577   
  

 

 

   

 

 

    

 

 

 

The reserve for severances for personnel aged 55 and over as of December 31, 2012, 2011, and 2010 is comprised as follows:

 

                                               
     2012     2011     2010  

DBO at year start

   $ 26,480      $ 23,577      $ 12,891   

Labor cost

     3,846        3,782        2,022   

Financial cost

     2,057        1,828        1,060   

Benefits paid

     (107     (213     (130

Actuarial losses (gains)

     (8,712     (2,494     7,734   
  

 

 

   

 

 

   

 

 

 

DBO at year end

   $ 23,564      $ 26,480      $ 23,577   
  

 

 

   

 

 

   

 

 

 

The changes in the pension plan, seniority premium, and severance plans as of December 31, 2012, 2011, and 2010 are summarized as follows:

 

     2012     2011     2010  

Reserve for obligations at year start

   $ 213,415      $ 172,787      $ 149,529   

Cost for the year

     17,670        23,047        21,139   

Miscellaneous

     —          36        (2,030

Benefits paid charged to the reserve

     (11,906     (11,539     (11,989

Provision for indemnities recognized in capital

     (8,036     29,084        16,138   
  

 

 

   

 

 

   

 

 

 

Reserve for obligations at year end

   $ 211,143      $ 213,415      $ 172,787   
  

 

 

   

 

 

   

 

 

 

 

F-49


Table of Contents

The economic assumptions on discount rates, salary and long-term return increases used in the valuation of the projected benefit obligation, were 4% for 2012, 2011, and 2010.

As of December 31, 2012, 2011, and 2010, approximately 42% of the Company’s employees work under collective bargaining agreements that are subject to annual salary reviews and bi-annually, for other compensations. Grupo TMM has 3,162, 3,059, and 3,214 employees as of December 31, 2012, 2011, and 2010, respectively.

23 (Loss) earnings per share:

The (loss) earnings per share were calculated as of December 31, 2012, 2011, and 2010, based on the weighted average number of shares outstanding during the year. There are no potentially dilutive instruments outstanding, therefore basic and diluted (loss) earnings per share are the same:

 

     2012     2011      2010  

(Loss) profit for the year

   $ (781,116   $ 191,583