Grupo TMM, S.A.B. (GTMAY) 20-F 2015 FY Annual report (foreign)

SECURITIES AND EXCHANGE COMMISSION

Form 20-F

¨ 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, 2015

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, 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	Other  ¨
	by the International Accounting Standards Board  x

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

		Page
PART I			2
ITEM 1.	IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS		2
ITEM 2.	OFFER STATISTICS AND EXPECTED TIMETABLE		2
ITEM 3.	KEY INFORMATION		2
ITEM 4.	INFORMATION ON THE COMPANY		21
ITEM 4A.	UNRESOLVED STAFF COMMENTS		42
ITEM 5.	OPERATING AND FINANCIAL REVIEW AND PROSPECTS		42
ITEM 6.	DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES		67
ITEM 7.	MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS		73
ITEM 8.	FINANCIAL INFORMATION		74
ITEM 9.	THE OFFER AND LISTING		76
ITEM 10.	ADDITIONAL INFORMATION		79
ITEM 11.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		92
ITEM 12.	DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES		94
PART II			95
ITEM 13.	DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES		95
ITEM 14.	MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS		95
ITEM 15.	CONTROLS AND PROCEDURES		95
ITEM 16A.	AUDIT COMMITTEE FINANCIAL EXPERT		96
ITEM 16B.	CODE OF ETHICS		96
ITEM 16C.	PRINCIPAL ACCOUNTANT FEES AND SERVICES		96
ITEM 16D.	EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES		97
ITEM 16E.	PURCHASE OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS		97
ITEM 16F.	CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT		97
ITEM 16G.	CORPORATE GOVERNANCE		97
PART III			97
ITEM 17.	FINANCIAL STATEMENTS		97
ITEM 18.	FINANCIAL STATEMENTS		97
ITEM 19.	EXHIBITS		98
EX-6.1:	COMPUTATION OF EARNINGS PER SHARE
EX-7.1:	COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
EX-8.1:	LIST OF SUBSIDIARIES
EX-12.1:	CERTIFICATION
EX-12.2:	CERTIFICATION
EX-13.1:	CERTIFICATION
EX-13.2:	CERTIFICATION

-i-

Grupo TMM, S.A.B. and Subsidiaries

Introduction

In this Annual Report, references to “$,” “Ps,” “Mx. pesos,” “Pesos” or “pesos” are to Mexican Pesos and references to “US$,” “U.S. dollars,” “Dollars” or “dollar” are to United States Dollars. This Annual Report contains translations of certain Dollar amounts into Pesos at specified rates solely for the convenience of the reader. These translations should not be construed as representations that the Dollar amounts actually represent such Peso amounts or could be converted into Pesos at the rates indicated or at any other rate. In this Annual Report on Form 20-F except as otherwise provided, references to “we,” “us,” “our” and “Company” mean Grupo TMM, S.A.B. and its consolidated subsidiaries, and “Grupo TMM” means “Grupo TMM, S.A.B.”

Presentation of Financial Information

Our financial statements are reported in Mexican pesos and prepared in conformity with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

Due to changes in the economic environment and to the fact that the operations of Grupo TMM are currently concentrated in Mexico, on February 26, 2013 the Company announced its decision to change its functional and reporting currency from the US dollar to the Mexican peso effective as of January 1, 2012.

Forward-Looking Information

This Annual Report contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements are based on the beliefs of the Company’s management as well as on assumptions made. Actual results could differ materially from those included in such forward-looking statements. Readers are cautioned that all forward-looking statements involve risks and uncertainty.

The following factors, among others described in this Annual Report, could cause actual results to differ materially from such forward-looking statements:

• our ability to generate sufficient cash from operations to meet our obligations, including the ability of our subsidiaries to generate sufficient distributable cash flow and to distribute such cash flow in accordance with our existing agreements with our lenders and strategic partners and applicable law;

• Mexican, U.S. and global economic, political and social conditions;

• conditions affecting the international shipping and transportation markets;

• our ability to reduce corporate overhead costs;

• the availability of capital to fund our expansion plans;

• our ability to utilize a portion of our current and future tax loss carryforwards (“Net Operating Losses” or “NOLs”);

• changes in fuel prices;

• changes in legal or regulatory requirements in Mexico or the United States;

• market and interest rate fluctuations;

• competition in geographic and business areas in which we conduct our operations;

• the adverse resolution of litigation and other contingencies;

• the ability of management to manage growth and successfully compete in new businesses; and

• the ability of the Company to repay, restructure or refinance its indebtedness.

Readers are urged to read this entire Annual Report including, but not limited to, the section entitled “Risk Factors,” and carefully consider the risks, uncertainties and other factors that affect our business. The information contained in this Annual Report is subject to change without notice. Readers should review future reports filed by us with the U.S. Securities and Exchange Commission (the “SEC”) and theBolsa Mexicana de Valores (the “Mexican Stock Exchange”). We undertake no obligation to publicly update or revise any forward-looking statements included in this Annual Report, whether as a result of new information, future events or otherwise, except as required by applicable law or stock exchange regulation.

PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3. KEY INFORMATION

Selected Financial Data

The following table sets forth our selected financial data. The financial information presented for the fiscal years ended December 31, 2011, 2012, 2013, 2014 and 2015 was derived from our Audited Consolidated Financial Statements, of which the financial statements for each of the years ended December 31, 2013, 2014, and 2015 are contained elsewhere herein. The Financial Statements have been prepared in accordance with IFRS as issued by the IASB.

The following data presents selected consolidated financial information of the Company and should be read in conjunction with, and is qualified in its entirety by reference to, the Financial Statements of the Company, including the Notes thereto, also included in this Form 20-F, and to Item 5. “Operating and Financial Review and Prospects.”

GRUPO TMM, S.A.B. AND SUBSIDIARIES

SELECTED CONSOLIDATED FINANCIAL DATA UNDER IFRS

(in millions of Pesos, except per share data)

	Year Ended December 31,
	2015			2014			2013			2012			2011
CONSOLIDATED INCOME STATEMENT DATA(a):
Transportation revenues	$	3,128.8		$	2,832.4		$	2,838.5		$	2,592.2		$	2,514.3
Income on Transportation before loss from revaluation of vessels		351.7			377.6			353.3			312.5			386.3
Loss from revaluation of vessels(b)		29.4			255.5			—			—			—
Income on Transportation		322.3			122.1			353.3			312.5			386.3
Other Income (Expense) — Net(c)		186.0			356.8			64.0			(32.6	)		(54.5	)
Operating Income		508.3			478.9			417.3			279.8			331.8
Interest Income		21.4			23.6			37.9			49.6			43.8
Interest Expense		799.8			855.0			942.8			981.4			1,038.3
Exchange Gain (Loss)(d)		15.7			(66.3	)		4.4			44.9			1,160.1
(Loss) Income before provision for Income Taxes		(254.5	)		(418.8	)		(483.3	)		(607.1	)		497.4

2

	Year Ended December 31,
	2015			2014			2013			2012			2011
Provision for Income Taxes		(698.5	)		(4.7	)		(4.7	)		(8.8	)		(12.0	)
(Loss) Income from continuing operations		(952.9	)		(423.5	)		(487.9	)		(615.8	)		485.4
Loss from discontinued operations		(65.9	)		(91.0	)		(63.5	)		(165.3	)		(293.8	)
Net (Loss) Income		(1,018.9	)		(514.5	)		(551.4	)		(781.1	)		191.6
Attributable to Non-controlling interest		(2.3	)		2.4			4.9			5.3			12.5
Attributable to stockholders of Grupo TMM, S.A.B.		(1,016.6	)		(516.9	)		(556.4	)		(786.5	)		179.0
(Loss) Earnings per Share from continuing operations(e)		(9.326	)		(4.145	)		(4.775	)		(6.027	)		4.750
Loss per Share from discontinued operations(e)		(0.645	)		(0.890	)		(0.621	)		(1.617	)		(2.875	)
(Loss) Earnings per Share from Net Income (Loss)(e)		(9.971	)		(5.035	)		(5.396	)		(7.644	)		1.875
(Loss) Earnings per Share attributable to stockholders of Grupo TMM, S.A.B.(e)		(9.949	)		(5.059	)		(5.445	)		(7.697	)		1.752
Book value per Share(f)		3.586			5.571			1.335			5.864			14.339
Weighted Average Shares Outstanding (000s)		102,183			102,183			102,183			102,183			102,176
BALANCE SHEET DATA (at end of period):
Cash and cash equivalents	$	1,045.4		$	743.1		$	895.0		$	1,089.0		$	1,075.7
Total Current Assets		2,607.4			2,806.1			1,954.3			2,029.5			2,025.3
Property, machinery and equipment – Net		9,553.1			9,052.9			9,053.1			9,716.7			10,012.7
Concessions – Net		20.8			24.6			28.4			32.2			35.9
Total Assets		12,416.1			12,924.3			12,179.4			12,945.3			13,279.0
Current portion of financial debt		684.7			918.6			636.6			332.6			239.8
Long-term financial debt		9,995.5			10,069.6			10,254.1			10,491.2			10,255.8
Capital stock		2,169.9			2,169.9			2,169.9			2,169.9			2,169.9
Stockholders’ Equity attributable to Stockholders of Grupo TMM, S.A.B.		366.4			569.3			136.4			599.2			1,465.1
Non-controlling equity interest in subsidiaries		65.4			68.3			64.6			59.6			54.3
Total Stockholders’ Equity		431.8			637.6			201.0			658.8			1,519.4
OTHER DATA:
Incremental Capital Investments(g)	$	101.9		$	227.2		$	290.8		$	351.2		$	191.1
Depreciation and Amortization		671.1			855.3			585.6			566.9			640.5
Net cash provided by (used in):
Operating activities(h)		612.0			755.1			882.3			940.8			810.0
Investing activities		790.9			(122.8	)		(208.7	)		(344.8	)		(218.4	)
Financing activities		(1,164.1	)		(800.9	)		(868.1	)		(570.0	)		(1,268.0	)

^(a)  As of July 2013, Grupo TMM sold 100% of its interest in its truck transportation and haul-away trailers business. Accordingly, as of such date Grupo TMM has categorized this business as a discontinued operation and has excluded it from the consolidated income statement data. See Note 19 to the accompanying Audited Consolidated Financial Statements.

^(b)  As of January 1, 2014, the Company has applied a revaluation model for its vessels pursuant to IAS 16 “Property, Plant and Equipment.” In accordance with this provision, the revalued model for most of the Company’s vessels is determined by market values calculated by external professional appraisers and other valuation techniques. The frequency of these revaluations will be based on changes in fair values,i.e., when these values differ materially from their book values. In accordance with IAS 8 “Accounting Policies, Changes in Accounting Estimates and Errors,” the implementation of this model is recognized prospectively. See Note 3.7 to the accompanying Audited Consolidated Financial Statements.

^(c)  See quantification of items in “Other Expenses (Income) Integration” table below.

^(d)  In 2011 the Company’s functional currency was Dollars. See Note 3.3 to the accompanying Audited Consolidated Financial Statements.

^(e)  As of December 31, 2011, 2012, 2013, 2014 and 2015 the number of Shares outstanding was 102,182,841.

^(f)  Book value per Share: results from dividing total shareholders’ equity attributable to stockholders of Grupo TMM by the outstanding Shares at the end of each period.

^(g)  See Item 5. “Operating and Financial Review and Prospects — Liquidity and Capital Resources — Capital Expenditures and Divestitures.”

^(h) Commencing 2015, restricted cash is included as a part of the cash and cash equivalents line item. See Note 5 to the accompanying Audited Consolidated Financial Statements. Such inclusion has an effect on cash flows from operating activities disclosed in the consolidated statements of cash flow for all fiscal years reported.

3

GRUPO TMM S.A.B. AND SUBSIDIARIES

SELECTED CONSOLIDATED OPERATING DATA

(in millions of Pesos)

��

	Year Ended December 31,
	2015			2014			2013			2012			2011
TRANSPORTATION REVENUES:
Maritime Operations(a)		2,770.9			2,488.3			2,455.3			2,188.8			2,133.4
Logistics Operations(b)		169.7			162.0			219.2			249.7			210.5
Ports and Terminals Operations(c)		114.2			114.9			113.4			101.2			123.7
Other business(d)		74.0			67.2			50.6			52.5			46.7
Total	$	3,128.8		$	2,832.4		$	2,838.5		$	2,592.2		$	2,514.3
INCOME ON TRANSPORTATION(e):
Maritime Operations		521.9			526.8			517.8			442.9			518.9
Logistics Operations		27.4			26.4			40.7			58.6			38.9
Ports and Terminals Operations		7.6			4.7			0.2			(3.8	)		27.8
Shared corporate costs		(205.2	)		(180.3	)		(205.4	)		(185.2	)		(199.3	)
Total	$	351.7		$	377.6		$	353.3		$	312.5		$	386.3
OTHER INCOME (EXPENSE):
Proceeds from the sale of subsidiaries		185.3			358.1			8.1			—			(2.5	)
Cancellation of provisions		5.9			16.7			9.8			—			54.5
Reserve for fiscal resolution cost		—			—			—			(100.0	)		—
Reserve for prepayment and arbitration expenses		—			—			(13.1	)		(6.8	)		(83.6	)
Amortization of non-competition rights		—			—			—			(22.8	)		(25.6	)
Gain on the purchase of Inmobilaria Dos Naciones		—			—			—			74.2			—
Dividends received from Comercializadora y Distribuidora Milgret		—			—			—			23.4			—
Taxes recovered, net of expenses incurred		—			—			42.0			—			—
Other – Net		(5.2	)		(18.0	)		17.2			(0.6	)		2.7
Total	$	186.0		$	356.8		$	64.0		$	(32.6	)	$	(54.5	)

(a) Maritime Operations primarily consist of offshore vessels, product tankers, parcel tankers, tugboats and shipyard.

(b) Logistics Operations consist of container maintenance and repair, automotive services and intermodal terminal operations.

(c) Ports and Terminals Operations consist of a port in Acapulco, Mexico, a terminal at Tuxpan, Mexico, loading and unloading operations at the port of Tampico, Mexico, and the operation of shipping agencies at various ports in Mexico.

(d) Represents certain new businesses which are in the development process.

(e) Income on Transportation before loss on revaluation of assets.

Average Shares Outstanding

Income per Share is calculated based on the average number of Shares outstanding in each relevant year. The average number of Shares outstanding in 2011 was 102,176,138, in 2012, 2013, 2014 and 2015 was 102,182,841. See Item 4. “Information on the Company — History and Development of the Company” and Item 9. “The Offer and Listing — Share Repurchase Program.”

4

Dividends

Pursuant to Mexican law and our bylaws, the declaration, amount and payment of dividends are determined by a majority vote of the holders of the outstanding shares represented at a duly convened shareholders’ meeting. Shareholders have the ability, at their discretion, to approve dividends from time to time. At the Ordinary Shareholders’ Meeting held on April 29, 2011, due to the Company’s current financial condition, our shareholders decided to revoke the resolution adopted at the ordinary shareholders’ meeting held on April 24, 1997 by the shareholders of our predecessor, Transportación Marítima Mexicana, S.A. de C.V. (“TMM”), declaring a dividend equivalent to US$0.17 per Share. That dividend was not paid, and no other dividend has been declared since 1997.

Exchange Rates

We maintain our financial records, including our tax records, in Pesos. The amounts in Dollars are converted to the Peso equivalent using the prevailing exchange rate. In 2015, approximately 75% of our net consolidated revenues and 28% of our operating costs and expenses were generated or incurred in Dollars. The remainder of our net consolidated revenues and operating expenses were generated or incurred in Pesos.

The following table sets forth the high, low, average and period-end noon buying rates for Pesos reported by Banco de México (the “Noon Buying Rate”) expressed as Pesos per U.S. dollar for the periods indicated below.

	Exchange Rates
Year Ended December 31,	High(1)		Low(1)		Average(2)		End of Year(3)
2011		14.24		11.50		12.43		13.95
2012		14.39		12.63		13.17		12.99
2013		13.44		11.98		12.76		13.07
2014		14.79		12.85		13.30		14.73
2015		17.38		14.56		15.87		17.34
	Exchange Rates
Monthly,	High(4)		Low(4)		Average(5)		End of Month(6)
Year 2015 and 2016
October 2015		16.91		16.40		16.58		16.62
November 2015		16.87		16.42		16.63		16.58
December 2015		17.38		16.51		17.04		17.34
January 2016		18.61		17.25		17.98		18.29
February 2016		19.18		18.06		18.47		18.17
March 2016		18.10		17.25		17.66		17.25
April(7)		17.89		17.24		17.51		17.43

(1) The highest and lowest of the Noon Buying Rates for the Peso per U.S. dollar reported by Banco de México on the last business day of each month during the relevant year.

(2) The average of the Noon Buying Rates on the last day of each month during the relevant year.

(3) The Noon Buying Rates on the last day of each relevant year.

(4) The highest and lowest of the Noon Buying Rates of each day in the relevant month.

(5) The average of the Noon Buying Rates of each day in the relevant month.

(6) The Noon Buying Rates on the last day of each relevant month.

(7) Through April 27, 2016.

On April 27, 2016, the Noon Buying Rate was Ps. 17.4298 = US$1.00 (equivalent to Ps. 1.00 = US$0.0574).

5

Risk Factors

Risks Relating to our Indebtedness

Our substantial indebtedness could adversely affect our financial condition and impair our ability to operate our business, and we may not be able to pay the interest on and principal amount of our indebtedness.

As of March 31, 2016, Grupo TMM’s total debt amounted to $10,802.2 million, which includes $9,923.3 million under our Mexican Peso-Denominated Trust Certificates Program (the “Trust Certificates Program”), $754.9 million of bank debt owed to several different banks and $124.0 million owed to non-institutional lenders; of this debt, $524.6 million is short-term debt, and $10,277.6 million is long-term debt. Under IFRS, transaction costs in connection with financings are required to be presented as debt.

As of December 31, 2015, Grupo TMM’s total debt amounted to $10,680.2 million, which includes $9,752.6 million under our Trust Certificates Program, $788.2 million of bank debt owed to several different banks, and $139.5 million that non-institutional lenders; of this debt, $684.7 million was short-term debt, and $9,995.5 million was long-term debt.

We are a highly leveraged company and our level of indebtedness could have important consequences, including the following:

• limiting cash flow available for capital expenditures, acquisitions, working capital and other general corporate purposes because a substantial portion of our cash flow from operations must be dedicated to servicing debt;

• increasing our vulnerability to a downturn in economic or industry conditions;

• exposing us to risks inherent in interest rate fluctuations because future borrowings may be at interest rates that are higher than current rates, which could result in higher interest expenses;

• limiting our flexibility in planning for, or reacting to, competitive and other changes in our business;

• placing us at a competitive disadvantage compared to our competitors that have less debt and greater operating and financing flexibility than we do;

• limiting our ability to engage in activities that may be in our long-term best interest; and

• limiting our ability to borrow additional money to fund our working capital and capital expenditures or to refinance our existing indebtedness, or to enable us to fund the acquisitions contemplated in our business plan.

Our ability to service our indebtedness will depend upon future operating performance, including the ability to increase revenues significantly, renew our existing vessel contracts and control expenses. Future operating performance depends upon various factors, including prevailing economic, financial, competitive, legislative, regulatory, business and other factors that are beyond our control.

If we cannot generate sufficient cash flow from operations to service our indebtedness we may default under our various financing facilities. If we default under any such facility, the relevant lender or lenders could then take action to foreclose against any collateral securing the payment of such facility. Most of our shipping assets have been pledged to secure our obligations under our Trust Certificates Program and our various vessel financing facilities. See Item 3. “Key Information — Selected Financial Data.”

6

Grupo TMM is primarily a holding company and depends upon funds received from its operating subsidiaries to make payments on its indebtedness.

Grupo TMM is primarily a holding company and conducts the majority of its operations, and holds a substantial portion of its operating assets, through numerous direct and indirect subsidiaries. As a result, Grupo TMM relies on income from dividends and fees related to administrative services provided to its operating subsidiaries for its operating income, including the funds necessary to service its indebtedness.

Under Mexican law, profits of Grupo TMM’s subsidiaries may only be distributed upon approval by such subsidiaries’ shareholders, and no profits may be distributed by its subsidiaries to Grupo TMM until all losses incurred in prior fiscal years have been offset against any sub-account of Grupo TMM’s capital or net worth account. In addition, at least 5% of profits must be separated to create a reserve(fondo de reserva)until such reserve is equal to 20% of the aggregate value of such subsidiary’s capital stock (as calculated based on the actual nominal subscription price received by such subsidiary for all issued shares that are outstanding at the time).

There is no restriction under Mexican law upon Grupo TMM’s subsidiaries remitting funds to it in the form of loans or advances in the ordinary course of business, except to the extent that such loans or advances would result in the insolvency of its subsidiaries, or for its subsidiaries to pay Grupo TMM fees or other amounts for services.

To the extent that Grupo TMM relies on dividends or other distributions from subsidiaries that it does not wholly own, Grupo TMM will only be entitled to a pro rata share of the dividends or other distributions provided by such subsidiaries.

Restrictive covenants in our financing agreements, including the Trust Certificates Program and our ship financings, may restrict our ability to pursue our business strategies.

Our agreements for our ship financings contain a number of restrictive covenants and any additional financing arrangements we enter into may contain additional restrictive covenants. These covenants restrict or prohibit many actions, including our ability, or that of our subsidiaries, to, among others:

• incur additional indebtedness;

• create or suffer to exist liens;

• prepay certain debt;

• make certain restricted payments, including the payment of dividends;

• carry out certain investments;

• engage in certain transactions with shareholders and affiliates;

• use assets as security in other transactions;

• issue guarantees to third parties;

• sell assets; and

• engage in certain mergers and consolidations or in sale-leaseback transactions.

Our Trust Certificates Program also contains a number of restrictive covenants. These covenants relate solely to the vessels, contracts related to such vessels and the restricted cash under such program. Certificate holders’ only recourse under the Trust Certificates Program is to the trust assets.

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If we fail to comply with these and other restrictive covenants, our obligation to repay our indebtedness may be accelerated. If we cannot pay the amounts due on the Trust Certificates Program or under one or more of our vessel financing facilities, the relevant lender or lenders could then take action to foreclose against any collateral securing the payment of such facility or facilities. Most of our shipping assets have been pledged to secure our obligations under our Trust Certificates Program and various vessel financing facilities.

We have to service our peso-denominated debt with revenues generated in dollars, as we do not generate sufficient revenue in pesos from our operations to service all of our peso-denominated debt. This could adversely affect our ability to service our debt in the event of a devaluation or depreciation in the value of the dollar against the Mexican peso.

As of March 31, 2016, approximately 93% of our debt was denominated in pesos. As of the date of this Annual Report, we do not generate sufficient revenue in pesos from our operations to service all of our peso-denominated debt. Consequently, we have to use revenues generated in dollars to service our peso-denominated debt. A devaluation or depreciation in the value of the dollar, compared to the Mexican peso, could adversely affect our ability to service our debt. During 2015, the Mexican peso had depreciated approximately 17.7% against the dollar. From January 1 through March 31, 2016, the Mexican peso had depreciated approximately 0.5% against the dollar.

Fluctuations in the Mexican peso/dollar exchange rate could lead to shifts in the types and volumes of Mexican imports and exports, negatively impacting results on some of our businesses. Although a decrease in the level of exports may be offset by a subsequent increase in imports, any offsetting increase might not occur on a timely basis, if at all. Future developments in U.S.-Mexican trade beyond our control may result in a reduction of freight volumes or in an unfavorable shift in the mix of products and commodities we carry.

Risks Relating to our Business

Uncertainties relating to our financial condition in our recent past and other factors raised substantial doubt about our ability to continue as a going concern and could have resulted in our dissolution under Mexican corporate law.

In accordance with the Mexican Companies Act (The Ley General de Sociedades Mercantiles), when a company has accumulated losses in excess of two-thirds of its capital stock, the dissolution of the company may be adopted by the shareholders of the company at an Extraordinary Shareholders Meeting called by the company’s board of directors upon the request of shareholders representing at least 33% of the company’s capital stock. At the Extraordinary Shareholders Meeting, the shareholders may vote to either dissolve company or approve any corporate strategy for addressing the accumulated losses.

Additionally, the Mexican Bankruptcy Act (Ley de Concursos Mercantiles) provides that any third party with legal interest may request the judicial authorities to declare the dissolution of the company. A third person is considered to have a legal interest to request dissolution if the person is a creditor of the company and (i) the company has failed continuously with its payment obligations to the third person and the amount of the failure represents at least 35% of all the obligations of the company, and (ii) the company does not have sufficient assets to satisfy at least 80% of the payment obligations in respect of which it has failed to make the required payments at the time of the request.

Although Grupo TMM improved its operating income in 2011, it incurred a net loss in 2012, 2013, 2014 and 2015. Our ability to continue as a going concern is subject to our ability to generate sufficient profits and/or obtain necessary funding from outside sources and there can be no assurance that we will be able to generate such profits or obtain such funding.

As of April 27, 2016, the company had not received any request for an Extraordinary Shareholders Meeting concerning the accumulated losses of the Company, nor had the Company received notice of any request to judicial authorities to declare a dissolution of the Company.

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If our time charter arrangements are terminated or expire, our business could be adversely affected.

As of March 31, 2016, we had one product tanker on time charter to NT Tankers, one product tanker on time charter to PMI Trading, Limited (“PMI”), one product tanker that was on time charter to PEMEX Refinación (“PER”) and PEMEX Exploración y Producción (“PEP”), and 20 offshore vessels on time charter to PEP. PER, PMI and PEP are subsidiaries of Petróleos Mexicanos, the national oil company of Mexico (“PEMEX”). In addition, as of March 31, 2016, we had three offshore vessel chartering agreements with private operators in the spot market with time periods ranging from one to two years, and three vessels without a contract. In the event that our time charter arrangements are terminated or expire without being renewed, we will be required to seek new bareboat or time charter arrangements for these vessels. We cannot be sure that bareboat or time charters will be available for the vessels following termination or expiration, or that bareboat or time charter rates in effect at the time of such termination or expiration will be comparable to those in effect under the existing time charters or in the present market. In the event that bareboat or time charters are not available on terms acceptable to us, we may use those vessels in the spot market. Because charter rates in the spot market are subject to greater fluctuation than longer term bareboat or time charter rates, any failure to maintain existing, or enter into comparable, charter arrangements could adversely affect our operating results.

Our results from operations are dependent on fuel expenses.

Our parcel tanker operations consume significant amounts of energy and fuel, the cost of which has fluctuated significantly worldwide in recent years. With respect to our other operations, our customers pay for the fuel consumption. We currently meet, and expect to continue to meet, our fuel requirements almost exclusively through purchases at market prices from PEMEX, a government-owned entity responsible for the distribution and sale of diesel fuel, maritime diesel oil and bunker fuel in Mexico. In addition, instability caused by imbalances in the worldwide supply and demand of oil may result in increases in fuel prices. Our fuel expense represents a significant portion of our operating expenses in our parcel tanker operations, and there may be increases in the price of fuel that cannot be hedged or transferred to the final user of our transportation services. We cannot assure you that our operations would not be materially adversely affected in the future if energy and fuel costs increase from current levels.

We may be unable to successfully expand our business.

Future growth of our businesses will depend on a number of factors, including:

• the continued identification, evaluation and participation in niche markets;

• the identification of joint venture opportunities or acquisition candidates;

• our ability to enter into acquisitions on favorable terms;

• our ability to finance any expansion of our business;

• our ability to hire and train qualified personnel, and to maintain our existing managerial base;

• the successful integration of any acquired businesses with our existing operations; and

• our ability to manage expansion effectively and to obtain required financing.

In order to maintain and improve operating results from new businesses, as well as our existing businesses, we will be required to manage our growth and expansion effectively. However, the management of new businesses involves numerous risks, including difficulties in assimilating the operations and services of the new businesses, the diversion of management’s attention from other business concerns and the disadvantage of entering markets in which we may have no or limited direct or prior experience. Our failure to effectively manage our business could preclude our ability to expand our business and could have a material adverse effect on our results of operations.

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Significant competition could adversely affect our future financial performance.

Certain of our business segments face significant competition, which could have a material adverse effect on our results of operations. Our international parcel tanker transportation services, our coastwise product tanker business, and our offshore vessel services rendered in the Gulf of Mexico have faced significant competition, mainly from U.S., Mexican and other international shipping companies acting directly or through a Mexican intermediary.

In our logistics operations division, our automotive logistics services have faced intense competition, including price competition, from a large number of U.S., Mexican, and other international logistics companies. We cannot assure you that we will not lose business in the future due to our inability to respond to competitive pressures by decreasing our prices without adversely affecting our gross margins and operational results.

Downturns in certain cyclical industries in which our customers operate could have adverse effects on our results of operations.

The shipping and logistics industries are highly cyclical, generally tracking the cycles of the world economy. Although transportation markets are affected by general economic conditions, there are numerous specific factors within each particular market segment that may influence operating results. Some of our customers do business in industries that are highly cyclical, including the oil and gas and automotive sectors. Any downturn in these sectors could have a material adverse effect on our operating results. Also, some of the products we transport have had a historical pattern of price cyclicality, which has typically been influenced by the general economic environment and by industry capacity and demand. We cannot assure you that prices and demand for these products will not decline in the future, adversely affecting those industries and, in turn, our financial results.

Grupo TMM is a party to arrangements with other parties as joint investors in non-wholly owned subsidiaries.

Grupo TMM is a party to arrangements with other parties under which it and such parties have jointly invested in non-wholly owned subsidiaries, and Grupo TMM may enter into other similar arrangements in the future. Grupo TMM’s partners in these non-wholly owned subsidiaries may at any time have economic, business or legal interests or goals that are inconsistent with our interests or those of the entity in which they have invested with us. Furthermore, any dividends that are distributed from subsidiaries that Grupo TMM does not wholly own would be shared pro rata with its partners according to their relative ownership interests. For these or any other reasons, disagreements or disputes with partners with whom Grupo TMM has a strategic alliance or relationship could impair or adversely affect its ability to conduct its business and to receive distributions from, and return on its investments in, those subsidiaries.

Over time, vessel values may fluctuate substantially and, if these values are lower at a time when we are attempting to dispose of a vessel, we may incur a loss.

Vessel values can fluctuate substantially over time due to a number of different factors, including:

• prevailing economic conditions in the market;

• a substantial or extended decline in world trade;

• increases in the supply of vessel capacity;

• prevailing charter rates; and

• the cost of retrofitting or modifying existing ships, as a result of technological advances in vessel design or equipment, changes in applicable environmental or other regulations or standards, or otherwise.

In the future, if the market values of our vessels deteriorate significantly, we may be required to record an impairment charge in our financial statements, which could adversely affect our results of operations. If a charter terminates, we may be unable to re-charter the vessel at an acceptable rate and, rather than continue to incur costs to maintain and finance the vessel, may seek to dispose of it. Our inability to dispose of the vessel at a reasonable price could result in a loss on its sale and adversely affect our results of operations and financial condition.

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Our growth depends upon continued growth and demand for the liquid bulk and offshore vessel industries which may have been at or near the peak of their upward trend and charter hire rates have already been at or near historical highs. These factors may lead to reductions and volatility in charter hire rates and profitability.

The liquid bulk and offshore vessel industries are both cyclical and volatile in terms of charter hire rates and profitability. In the future, charter rates and demand for our vessels may fluctuate as a result of changes in the size of and geographic location of supply and demand for oil and related products, as well as changes in maritime regulations. These and other factors affecting the supply and demand for liquid bulk, offshore and vessels in general are outside of our control, and the nature, timing and degree of changes in industry conditions are unpredictable.

The factors that influence demand for our vessels’ capacity include:

• supply and demand for products suitable for shipping by our vessels;

• changes in global production of products transported by our vessels;

• the distance cargo products are to be moved by sea;

• the globalization of manufacturing;

• global and regional economic and political conditions;

• changes in seaborne and other transportation patterns, including changes in the distances over which cargoes are transported;

• environmental and other regulatory developments;

• technological advancements;

• currency exchange rates; and

• weather.

The factors that influence the supply of our vessels’ capacity include:

• the number of newbuilding deliveries;

• the scrapping rate of older vessels similar to our vessels;

• the price of steel and other raw materials;

• changes in environmental and other regulations that may limit the useful life of vessels;

• the number of vessels that are out of service; and

• port congestion.

Our ability to re-charter our vessels upon the expiration or termination of their current charters and the charter rates payable under any renewal or replacement charters will depend upon, among other things, the prevailing state of the charter market for our vessels. If the charter market is depressed when our vessels’ charters expire, we may be forced to re-charter our vessels at reduced rates or even possibly a rate whereby we incur a loss, which may reduce our earnings or make our earnings volatile. The same issues will exist if we acquire additional vessels and attempt to obtain multi-year time charter arrangements as part of our acquisition and financing plan.

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Our growth depends on our ability to expand relationships with existing charterers and to obtain new charterers, for which we will face substantial competition.

One of our principal objectives is to acquire additional vessels in conjunction with entering into additional multi-year, fixed-rate time charters for these ships. The process of obtaining new multi-year time charters is highly competitive and generally involves an intensive screening process and competitive bids, and often extends for several months. Shipping charters are awarded based upon a variety of factors relating to the vessel operator, including:

• shipping industry relationships and reputation for customer service and safety;

• shipping experience and quality of ship operations (including cost effectiveness);

• quality and experience of seafaring crew;

• the ability to finance vessels at competitive rates and financial stability in general;

• relationships with shipyards and the ability to get suitable berths;

• relationships with ship owners and the ability to obtain suitable second-hand vessels;

• construction management experience, including the ability to obtain on-time delivery of new ships according to customer specifications;

• willingness to accept operational risks pursuant to the charter, such as allowing termination of the charter for force majeure events, among others; and

• competitiveness of the bid in terms of overall price.

We expect substantial competition from a number of experienced companies, including state-sponsored entities and major shipping companies. Some of these competitors have significantly greater financial resources than we do, and can therefore operate larger fleets and may be able to offer better charter rates. This competition may cause greater price competition for time charters. As a result of these factors, we may be unable to expand our relationships with existing customers or to obtain new customers on a profitable basis, if at all, which would have a material adverse effect on our business, results of operations and financial condition and our ability to pay dividends to our stockholders.

The aging of our fleet may result in increased operating costs in the future, which could adversely affect our earnings.

In general, the cost of maintaining a vessel in good operating condition increases with the age of the vessel. As our fleet ages, we will incur increased costs. Older vessels are typically less fuel efficient and more costly to maintain than more recently constructed vessels. Cargo insurance rates also increase with the age of a vessel, making older vessels less desirable to charterers. Governmental regulations and safety or other equipment standards related to the age of a vessel may also require expenditures for alterations or the addition of new equipment to our vessels and may restrict the type of activities in which our vessels may engage. Although our current fleet of 41 vessels had an average age of approximately 13.39 years as of March 31, 2016, we cannot assure you that, as our vessels age, market conditions will justify such expenditures or will enable us to profitably operate our vessels during the remainder of their expected useful lives.

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Our results of operations may be adversely affected by operational risks inherent in the transportation and logistics industry.

The operation of vessels and other machinery relating to the shipping and cargo business involves an inherent risk of catastrophic marine disaster, mechanical failure, collisions, property losses to vessels, piracy, cargo loss or damage and business interruption due to political actions in Mexico and in foreign countries. In addition, the operation of any harbor and seagoing vessel is subject to the inherent possibility of catastrophic marine disasters, including oil spills and other environmental accidents, and the liabilities arising from owning and operating vessels in international trade. Any such event may result in a reduction of revenues or increased costs. The Company’s vessels are insured for their estimated value against damage or loss, including war, terrorism acts, and pollution risks and we also carry other insurance customary in the industry.

We maintain insurance to cover the risk of partial or total loss of or damage to all of our assets including, but not limited to, harbor and seagoing vessels, port facilities, port equipment, land facilities and offices. In particular, we maintain marine hull and machinery and war risk insurance on our vessels, which covers the risk of actual or constructive total loss. Additionally, we have protection and indemnity insurance for damage caused by our operations to third persons. With certain exceptions, we do not carry insurance covering the loss of revenue resulting from a downturn in our operations or resulting from vessel off-hire time on certain vessels. In certain instances, and depending on the ratio of insurance claims to insurance premiums paid, we may choose to self-insure our over-the-road equipment following prudent guidelines. We cannot assure you that our insurance would be sufficient to cover the cost of damages suffered by us or damages to others, that any particular claim will be paid or that such insurance will continue to be available at commercially reasonable rates in the future.

Additionally, some shipping and related activities decrease substantially during periods of bad weather. Such adverse weather conditions can adversely affect our results of operations and profitability if they occur with unusual intensity, during abnormal periods, or last longer than usual in our major markets, especially during peak shipping periods.

Our operations are subject to extensive environmental and safety laws and regulations and we may incur costs that have a material adverse effect on our financial condition as a result of our liabilities under or potential violations of environmental and safety laws and regulations.

Our operations are subject to general Mexican federal and state laws and regulations relating to the protection of the environment. The Mexican Attorney General for Environmental Protection (Procuraduría Federal de Protección al Ambiente) is empowered to bring administrative and criminal proceedings and impose corrective actions and economic sanctions against companies that violate environmental laws, and temporarily or permanently close non-complying facilities. The Mexican Ministry of Environmental Protection and Natural Resources (Secretaría del Medio Ambiente y Recursos Naturales or “SEMARNAT”) and other ministries have promulgated compliance standards for, among other things, water discharge, water supply, air emissions, noise pollution, hazardous substances transportation and handling, and hazardous and solid waste generation. Under the environmental laws, the Mexican government has implemented a program to protect the environment by promulgating rules concerning water, land, air and noise discharges or pollution, and the transportation and handling of wastes and hazardous substances.

We are also subject to the laws of various jurisdictions and international conferences with respect to the discharge of hazardous materials, wastes and pollutants into the environment.

While we maintain insurance against certain of these environmental risks in an amount which we believe is consistent with amounts customarily obtained in accordance with industry norms, we cannot assure you that our insurance will be sufficient to cover damages suffered by us or that insurance coverage will always be available for these possible damages. Furthermore, such insurance typically excludes coverage for fines and penalties that may be levied for non-compliance with environmental laws and regulations.

We anticipate that the regulation of our business operations under federal, state and local environmental laws and regulations will increase and become more stringent over time. We cannot predict the effect, if any, that the adoption of additional or more stringent environmental laws and regulations would have on our results of operations, cash flows, capital expenditure requirements or financial condition.

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Our international parcel tanker transportation services rendered in the Gulf of Mexico and our coastwise product tanker business rendered in both the Gulf of Mexico and in the Pacific Ocean provide services to transport petrochemical products and refined clean and dirty petroleum products, respectively. See Item 4. “Information on the Company — Business Overview — Maritime Operations.” Under the United States Oil Pollution Act of 1990 (“OPA” or “OPA 90”), responsible parties, including ship owners and operators, are subject to various requirements and could be exposed to substantial liability, and in some cases unlimited liability, for removal costs and damages, including natural resource damages and a variety of other public and private damages resulting from the discharge of oil, petroleum or related substances into the waters of the United States. In some jurisdictions, including the United States, claims for spill clean-up or removal costs and damages would enable claimants to immediately seize the ships of the owning and operating company and sell them in satisfaction of a final judgment. The existence of comparable statutes enacted by individual states of the United States, but requiring different measures of compliance and liability, creates the potential for similar claims being brought in the United States under state law. In addition, several other countries have adopted international conventions that impose liability for the discharge of pollutants similar to OPA. If a spill were to occur in the course of operation of one of our vessels carrying petroleum products, and such spill affected the waters of the United States or another country that had enacted legislation similar to OPA, we could be exposed to substantial or unlimited liability. Additionally, our vessels carry bunkers (ship fuel) and certain goods that, if spilled, under certain conditions, could cause pollution and result in substantial claims against us, including claims under international laws and conventions, OPA and other U.S. federal, state and local laws. Further, under OPA and similar international laws and conventions, we are required to satisfy insurance and financial responsibility requirements for potential oil spills and other pollution incidents. Penalties for failure to maintain the financial responsibility requirements can be significant and can include the seizure of the vessel.

Our vessels must also meet stringent operational, maintenance and structural requirements, and they are subject to rigorous inspections by governmental authorities such as the U.S. Coast Guard for those vessels, which operate within U.S. territorial waters. Non-compliance with these regulations could give rise to substantial fines and penalties.

We could have liability with respect to contamination at third-party facilities in the United States where we have transported hazardous substances or wastes under the U.S. Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA” or “Superfund”) and comparable state laws (known as state Superfund laws). CERCLA and the state Superfund laws impose joint and several liability for the cost of investigation and remediation, natural resources damages, certain health studies and related costs, without regard to fault or the legality of the original conduct, on certain classes of persons with respect to the release into the environment of certain substances. These persons, commonly called “potentially responsible parties” or “PRPs,” include the current and certain prior owners or operators of and persons that arranged for the disposal or treatment of hazardous substances at sites where a release has occurred or could occur. In addition, other potentially responsible parties, adjacent landowners or other third parties may initiate cost recovery actions or toxic tort litigation against PRPs under CERCLA or state Superfund law or state common law.

The U.S. Clean Water Act imposes restrictions and strict controls regarding the discharge of wastes into the waters of the United States. The Clean Water Act and comparable state laws provide for civil, criminal and administrative penalties for unauthorized discharges of pollutants. In the event of an unauthorized discharge of wastes or pollutants into waters of the United States, we may be liable for penalties and could be subject to injunctive relief.

Potential labor disruptions could adversely affect our financial condition and our ability to meet our obligations under our financing arrangements.

As of March 31, 2016, we had 1,779 employees, approximately 13% of whom were unionized. The compensation terms of the labor agreement with these employees are subject to renegotiation on an annual basis and all other terms are renegotiated every two years. If we are not able to negotiate these provisions favorably, strikes, boycotts or other disruptions could occur, and these potential disruptions could have a material adverse effect on our financial condition and results of operations and on our ability to meet our payment obligations under our financing arrangements.

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Continuing world tensions, including as the result of wars, other armed conflicts and terrorist attacks could have a material adverse effect on our business.

Continuing world tensions, including those relating to the Middle East, North Korea, Russia and the Ukraine, as well as terrorist attacks in various locations and related unrest, have increased worldwide political and economic instability and depressed economic activity in the United States and globally, including the Mexican economy. The continuation or escalation of existing armed hostilities or the outbreak of additional hostilities as a consequence of further acts of terrorism or otherwise could cause a further downturn and/or significant disruption to the economies of the United States, Mexico and other countries. The continued threat of terrorism within the United States and abroad and the potential for military action and heightened security measures in response to such threat may cause significant disruption to commerce throughout the world, including restrictions on cross-border transport and trade. Furthermore, the Mexican government’s efforts to combat illegal drug cartels have caused public safety issues that may hinder Mexico’s economic growth and could prompt restrictions on cross-border transport and trade.

Our customers may take actions that may reduce our revenues.

If our customers believe that our financial condition will result in a lower quality of service, they may discontinue use of our services. Additionally, some customers may demand lower prices. While we have contracts with some of our customers that prevent them from terminating our services or which impose penalties on customers who terminate our services, it may be impractical or uneconomical to enforce these agreements in Mexican courts. If any of these events occurs, our revenues will be reduced.

Our financial statements may not give you the same information as financial statements prepared under United States accounting rules.

Our financial statements are prepared in accordance with IFRS. IFRS differs in certain significant respects from U.S. GAAP including, among others, the classification of minority interest and employees’ profit sharing, the accounting treatment for capitalized interest, consolidation of subsidiaries, the acquisition of shares of subsidiaries from minority stockholders and the computation of deferred taxes. For this and other reasons, the presentation of financial statements and reported earnings prepared in accordance with IFRS may differ in significant respects from the presentation of financial statements and reported earnings prepared in accordance with U.S. GAAP.

Risks Relating to Mexico

Economic, political and social conditions may adversely affect our business.

Our financial performance may be significantly affected by general economic, political and social conditions in the markets where we operate. Most of our operations and assets are located in Mexico. As a result, our financial condition, results of operations and business may be affected by the general condition of the Mexican economy, the valuation of the Peso as compared to the U.S. dollar, Mexican inflation, interest rates, regulation, taxation, social instability and political, social and economic developments in Mexico. Many countries in Latin America, including Mexico, have suffered significant economic, political and social crises in the past, and these events may occur again in the future. Instability in the region has been caused by many different factors, including:

• significant governmental influence over local economies;

• substantial fluctuations in economic growth;

• high levels of inflation;

• changes in currency values;

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• exchange controls or restrictions on expatriation of earnings;

• high domestic interest rates;

• wage and price controls;

• changes in governmental economic or tax policies;

• imposition of trade barriers;

• unexpected changes in regulation; and

• overall political, social and economic instability.

Mexico is an emerging market economy, with attendant risks to our results of operations and financial condition.

Mexico has historically experienced uneven periods of economic growth. Mexico’s gross domestic product (“GDP”) increased 3.9%, 4.0%, 1.4%, 2.1% and 2.5% in 2011, 2012, 2013, 2014 and 2015, respectively. GDP growth in 2015 was above the range 1.9% to 2.4% the Banco de Mexico Consensus Board¹ had estimated. For 2016, the Banco de Mexico Consensus Board estimates that GDP in Mexico is expected to grow by approximately 2.4%, while inflation is expected to be 3.3%. We cannot assure you that these estimates will prove to be accurate. The Mexican government has exercised, and continues to exercise, significant influence over the Mexican economy. Accordingly, Mexican governmental actions concerning the economy and state-owned enterprises could have a significant impact on Mexican private sector entities in general and on us in particular, as well as on market conditions, prices and returns on Mexican securities, including our securities.

Currency fluctuations or the devaluation and depreciation of the Peso could limit the ability of the Company and others to convert Pesos into U.S. dollars or other currencies which could adversely affect our business, financial condition and results of operations.

Severe devaluation or depreciation of the Peso may also result in governmental intervention or disruption of international foreign exchange markets. This may limit our ability to transfer or convert Pesos into U.S. dollars and other currencies for the purpose of making timely payments of interest and principal on our dollar denominated indebtedness and adversely affect our ability to obtain foreign currency and other imported goods. The Mexican economy has suffered current account balance of payment deficits and shortages of foreign exchange reserves in the past. While the Mexican government does not currently restrict, and for more than ten years has not restricted, the right or ability of Mexican or foreign persons or entities to convert Pesos into U.S. dollars or to transfer other currencies outside of Mexico, the Mexican government could institute restrictive exchange control policies in the future. To the extent that the Mexican government institutes restrictive exchange control policies in the future, our ability to transfer or convert Pesos into U.S. dollars for the purpose of making timely payments of interest and principal on indebtedness would be adversely affected. Devaluation or depreciation of the Peso against the U.S. dollar may also adversely affect U.S. dollar prices for our debt securities.

Pursuant to the provisions of the North American Free Trade Agreement (“NAFTA”), if Mexico experiences serious balance of payment difficulties or the threat thereof in the future, Mexico would have the right to impose foreign exchange controls on investments made in Mexico, including those made by U.S. and Canadian investors. Any restrictive exchange control policy could adversely affect our ability to obtain U.S. dollars or to translate Pesos into U.S. dollars for purposes of making interest and principal payments to our creditors to the extent that we may have to make those translations. This could have a material adverse effect on our business and financial condition.

¹  The Banco de Mexico Consensus Board comprises 33 groups of private analysts and consultants specializing in the Mexican and international economies.

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High interest rates in Mexico could increase our financing costs.

Mexico historically has had, and may continue to have, high real and nominal interest rates. The interest rates on 28-day Mexican government treasury securities averaged 4.24%, 4.85%, 3.75%, 2.99% and 2.98% in 2011, 2012, 2013, 2014 and 2015, respectively, and for the three-month period ended March 31, 2016, they averaged 3.44%.

A total of $9,752.6 million of our debt represented by our Trust Certificates Program was incurred in Mexican Pesos at the Mexican interbank rate, TIIE, plus 2.45%. The Company has hedged the interest rate risk of this variable rate debt at a maximum rate of 9.80% through August 2016. As of December 31, 2015, the 28-day TIIE rate was 3.32%, and as of March 31, 2016, the rate was 3.79%.

Developments in other emerging market countries or in the United States may affect us and the prices of our securities.

The market value of securities of Mexican companies, the economic and political situation in Mexico and our financial condition and results of operations are, to varying degrees, affected by economic and market conditions in other emerging market countries and in the United States. Although economic conditions in other emerging market countries and in the United States may differ significantly from economic conditions in Mexico, investors’ reactions to developments in any of these other countries may have an adverse effect on the market value or trading price of securities of Mexican issuers, including our securities, or on our business.

Our operations, including demand for our products or services and the price of our floating rate debt, have also historically been adversely affected by increases in interest rates in the United States and elsewhere. Although in recent years interest rates have remained low, as interest rates rise, the interest payments on our floating rate debt and the cost of refinancing our financing arrangements at maturity will rise as well.

Mexico may experience high levels of inflation in the future, which could adversely affect our results of operations.

Mexico has a history of high levels of inflation, and may experience high inflation in the future. During most of the 1980s and during the mid- and late 1990s, Mexico experienced periods of high levels of inflation. The annual inflation rates for the last five years, as measured by changes in the National Consumer Price Index, as provided byBanco de México, were:

2011	3.82	%
2012	3.57	%
2013	3.97	%
2014	4.08	%
2015	2.13	%
2016 (three months ended March 31)	0.97	%

Mexico’s current level of inflation has been reported at higher levels than the annual inflation rate of the United States and Canada. The United States and Canada are Mexico’s main trading partners. We cannot give any assurance that the Mexican inflation rate will decrease, increase or maintain its current level for any significant period of time. A substantial increase in the Mexican inflation rate as currently in effect would have the effect of increasing some of our costs, which could adversely affect our financial condition and results of operations, as well as our ability to service our debt obligations. High levels of inflation may also affect the balance of trade between Mexico and the United States, and other countries, which could adversely affect our results of operations.

Political events and declines in the level of oil production in Mexico could affect the Mexican economy and our business, financial condition and results of operations.

Mexican political events may significantly affect our operations. On December 1, 2012, Enrique Peña Nieto, a member of the Institutional Revolutionary Party (“PRI”), began a six-year term as president of Mexico following his victory in the July 1, 2012 presidential election. Following President Peña Nieto’s election, the Mexican government has begun to implement significant changes in laws, policies and regulations aimed at fostering growth in certain

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key sectors of the Mexican economy, including the energy and transportation sectors. These reforms could significantly change Mexico’s political and economic situation, which consequently could affect the Company’s operations. Currently, no single political party holds a clear majority in either chamber of the Mexican Congress. The absence of a clear majority by a single party may hinder the timely implementation of political reforms, result in governmental gridlock and increase political uncertainty. We cannot provide any assurances that political developments in Mexico, over which we have no control, will not have an adverse effect on our business, financial condition or results from operations.

Mexico’s daily oil production statistics indicate that production has declined over the past seven years (2009-2015) at a compounded average rate of 2.5%, a trend that could continue in the coming years. In contrast, during the past seven years, imports of gasoline and diesel for domestic consumption grew 7.2%, and currently represent 47% of Mexico’s domestic consumption.

Experts have concluded that if the Mexican government does not follow through with its implementation of reforms designed to promote private investment in the energy sector, or fails to make further investments to increase PEMEX’s technological capabilities, Mexico’s oil production may drop considerably, weakening the financial position of the Mexican government.

Finally, the Mexican economy in the past has suffered balance of payment deficits and shortages in foreign exchange reserves, and we cannot assure you that these deficits and shortages will not occur in the future.

As a result of declines in oil prices that began in late 2014 and have continued into 2016, our clients will likely reduce spending on exploration and production projects, resulting in a decrease in demand for our services.

Oil and natural gas prices, as well as market expectations of potential changes in these prices, significantly impact the level of worldwide drilling and production services activities. Reduced demand for oil and natural gas or periods of surplus oil and natural gas generally result in lower prices for these commodities and often impact the economics of planned drilling projects and ongoing projects, resulting in the curtailment, reduction, delay or postponement of such projects for an indeterminate period of time. When drilling and production activity and spending declines, vessel daily rates and utilization for our offshore vessels historically decline as well.

Since late 2014, oil prices worldwide have dropped significantly. If the current depressed oil and natural gas prices persist for a prolonged period, or decline further, oil and gas exploration and production companies are likely to cancel or curtail their drilling programs and lower production spending on existing wells to an even greater extent, thereby further reducing demand for our services.

Any prolonged reduction in the overall level of oil and gas exploration and development activities, whether resulting from changes in the price of oil, natural gas or otherwise, could materially and adversely affect us by negatively impacting:

• our revenues, cash flows and profitability;

• the fair market value and profitability of our vessels;

• our ability to maintain or increase our borrowing capacity;

• or ability to obtain additional capital to finance our business and make acquisitions, and the cost of that capital;

• the collectability of our receivables; and

• our ability to retain skilled personnel whom we would need in the event of an upturn in the demand for our services.

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If any of the foregoing were to occur, it could have a material adverse effect on our business and financial results.

The following table shows the high, low, average and period-end spot prices of Mexican crude oil as reported by the Bank of Mexico in U.S. dollars for the periods indicated below.

	Spot price of Mexican crude oil
Year Ended December 31,	High(1)		Low(1)		Average(2)		End of Year(3)
2011		113.54		82.31		101.32		105.00
2012		117.54		84.67		102.27		96.70
2013		110.42		88.58		98.5		92.51
2014		102.41		45.45		87.66		45.45
2015		59.45		26.54		44.70		29.80
	Spot price of Mexican crude oil
Monthly,	High(4)		Low(4)		Average(5)		End of Month(6)
Year 2016
January		29.80		18.90		23.17		25.53
February		27.14		22.08		25.26		27.14
March		32.16		27.67		30.39		30.51
April(7)		34.49		27.62		31.41		34.49

(1) The highest and lowest spot price of Mexican crude oil in U.S. dollars reported by Banco de México on the last business day of each month during the relevant year.

(2) The average spot prices during the relevant year.

(3) The spot price on the last day of each relevant year.

(4) The highest and lowest spot price in the relevant month.

(5) The average spot price of each day in the relevant month.

(6) The spot price on the last day of each relevant month.

(7) Through April 27, 2016.

Federal tax legislation reforms in Mexico may have an adverse effect on our financial condition and results of operations.

The Mexican government has in recent years implemented various changes to the tax laws applicable to Mexican companies, including us. Should the Mexican government implement changes to the tax laws that result in our having significantly higher tax liability, we would be required to pay the higher amounts due pursuant to any such changes, which could have a material adverse impact on our results of operations.

In December 2013, the Mexican government enacted various federal tax reforms that entered into effect on January 1, 2014. Among other changes, these reforms maintained a corporate income tax rate of 30%; eliminated the corporate flat tax, or IETU; imposed withholding taxes at a 10% rate on the payment of dividends and capital gains from the sale of shares by and to Mexican and foreign shareholders; eliminated deductions previously allowed in respect of payments between related parties or certain foreign corporations; limited the tax deductions for certain benefits paid to employees; and increased the value-added tax in certain areas of Mexico.

On February 13, 2014, we filed an indirect writ of relief (amparo) challenging the constitutionality of various provisions of the tax reforms related to the elimination of the existing fiscal consolidation regime. On February 16, 2016, the court issued a ruling rejecting our constitutional challenge. We appealed this ruling on March 17, 2016 and a decision on our appeal remains pending.

We cannot assure you that we will prevail in our constitutional challenge and are continuing to analyze the scope and implications of the January 1, 2014 tax reforms on our business. We cannot predict the full impact that the tax reform will have on our business, financial condition and results of operations once it is fully implemented, including the effect on our business of higher payroll taxes and higher costs due to additional compliance measures.

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Our initial assessments indicate that the changes will increase our income tax base in the coming years, primarily as a result of the new limitations on tax deductions. In addition, we cannot predict the indirect impact that this legislation could have on our customers and shareholders. It is possible that our shareholders may be required to pay more taxes than they would have paid prior to the implementation of the January 1, 2014 tax reforms.

Mexican antitrust laws may limit our ability to expand through acquisitions or joint ventures.

Mexico’s federal antitrust laws and regulations may affect some of our activities, including our ability to introduce new products and services, enter into new or complementary businesses or joint ventures and complete acquisitions. In addition, the federal antitrust laws and regulations may adversely affect our ability to determine the rates we charge for our services and products. Approval of theComisión Federal de Competencia, or Mexican Antitrust Commission, is required for us to acquire and sell significant businesses or enter into significant joint ventures and we cannot assure you that we would be able to obtain such approval.

Investors may not be able to enforce judgments against the Company.

Investors may be unable to enforce judgments against us. We are a stock corporation, organized under the laws of Mexico. Substantially all our directors and officers reside in Mexico, and all or a significant portion of the assets of those persons may be located outside the United States. It may not be possible for investors to effect service of process within the United States upon those persons or to enforce judgments against them or against us in U.S. courts, including judgments predicated upon the civil liability provisions of the U.S. federal securities laws. Additionally, it may not be possible to enforce, in original actions in Mexican courts, liabilities predicated solely on the U.S. federal securities laws and it may not be possible to enforce, in Mexican courts, judgments of U.S. courts obtained in actions predicated upon the civil liability provisions of the U.S. securities laws.

Risks Relating to Ownership of our Equity

The protection afforded to minority shareholders in Mexico is different from that afforded to minority shareholders in the United States.

Under Mexican law, the protections afforded to minority shareholders are different from, and may be less than, those afforded to minority shareholders in the United States. Under Mexican law, there is no procedure for class actions as such actions are conducted in the United States and there are different procedural requirements for bringing shareholder lawsuits against companies. Therefore, it may be more difficult for minority shareholders to enforce their rights against us, our directors or our controlling shareholders than it would be for minority shareholders of a U.S. company.

In accordance with the Mexican Companies Act (Ley General de Sociedades Mercantiles), shareholders representing at least 33% of our capital stock can request that the Board of Directors call an Extraordinary Shareholders Meeting to vote on proposals included by the shareholders in their request to the Board.

Holders of ADSs may not be entitled to participate in any future preemptive rights offering, which may result in a dilution of such holders equity interest in our company.

Under Mexican law, if we issue new shares for cash as a part of a capital increase, we generally must grant our stockholders the right to purchase a sufficient number of shares to maintain their existing ownership percentage in our company. Rights to purchase shares in these circumstances are commonly referred to as preemptive rights. We may not be legally permitted to allow holders of ADSs in the United States to exercise preemptive rights in any future capital increase unless (1) we file a registration statement with the SEC with respect to that future issuance of shares or (2) the offering qualifies for an exemption from the registration requirements of the U.S. Securities Act of 1933, as amended. At the time of any future capital increase, we will evaluate the costs and potential liabilities associated with filing a registration statement with the SEC, as well as the benefits of preemptive rights to holders of ADSs in the United States and any other factors that we consider important in determining whether to file a registration statement.

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If we do not file a registration statement with the SEC to allow holders of ADSs in the United States to participate in a preemptive rights offering or if there is not an exemption from the registration requirements of the U.S. Securities Act of 1933 available, the equity interests of holders of ADSs would be diluted to the extent that ADS holders cannot participate in a preemptive rights offering.

The Company is controlled by the Serrano Segovia family.

The Serrano Segovia family controls the Company through José Serrano Segovia’s direct and indirect ownership of our Shares, and members of the Serrano Segovia family serve as members of our Board of Directors. Holders of our ADSs may not vote at our shareholders’ meetings. Each of our ADSs represents five CPOs. Holders of CPOs are not entitled to exercise any voting rights with respect to the Shares held in the Master Neutral Investment Trust (Fideicomiso Maestro de Inversion Neutra) (the “CPO Trust”). Such voting rights are exercisable only by the trustee, which is required by the terms of the trust agreement to vote such Shares in the same manner as the majority of the Shares that are not held in the CPO Trust that are voted at any shareholders’ meeting. Currently the Serrano Segovia family owns a majority of the Shares that are not held in the CPO Trust. As a result, the Serrano Segovia family will be able to direct and control the policies of the Company and its subsidiaries, including mergers, sales of assets and similar transactions. See Item 7. “Major Shareholders and Related Party Transactions — Major Shareholders.”

A change in control may adversely affect us.

A portion of the Shares and ADSs of the Company held by the Serrano Segovia family is currently pledged to secure indebtedness of the Serrano Segovia family and entities controlled by them and may from time to time in the future be pledged to secure obligations of other of their affiliates. A foreclosure upon any such Shares held by the Serrano Segovia family could result in a change of control under the various debt instruments of the Company and its subsidiaries. Such debt instruments provide that certain change of control events with respect to us will constitute a default and that the relevant lenders may require us to prepay our debt obligations including accrued and unpaid interest, if any, to the date of such repayment. If such a default occurs, we cannot assure you that we will have enough funds to repay our debt.

Our ADSs trade on the over-the-counter (“OTC”) market, which may limit the liquidity and price of our ADSs more than if the ADSs were quoted or listed on a national securities exchange.

Our ADSs currently trade on the OTC market under the ticker symbol GTMAY. The OTC market is a significantly more limited market than a national securities exchange such as the New York Stock Exchange (“NYSE”) or NASDAQ, with generally lower trading volumes and higher price volatility. Quotation of the ADSs on the OTC market may limit the liquidity and price of the ADSs and could adversely impact our ability to raise capital in the future.

ITEM 4. INFORMATION ON THE COMPANY

History and Development of the Company

We were formed on August 14, 1987, under the laws of Mexico as a variable capital corporation(sociedad anónima de capital variable)to serve as a holding company for investments by certain members of the Serrano Segovia family.

TMM merged with and into Grupo TMM (formerlyGrupo Servia, S.A. de C.V. (“Grupo Servia”)), which was effected on December 26, 2001, leaving Grupo TMM as the surviving entity. Under the terms of the merger, all of the assets, privileges and rights and all of the liabilities of TMM were transferred to Grupo TMM upon the effectiveness of the merger. TMM was founded on September 18, 1958 by a group of private investors, including the Serrano Segovia family.

In December 2001, the boards of directors of TMM and Grupo TMM unanimously approved a corporate reorganization and merger in which TMM was merged with and into Grupo TMM. After the merger, each

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shareholder of TMM continued to own the same relative economic interest in Grupo TMM as the shareholder owned in TMM prior to the merger. In preparation for the merger, the shareholders of Grupo TMM approved the division (escisión)of Grupo TMM into two companies, Grupo TMM and a newly formed corporation, Promotora Servia, S.A. de C.V. (“Promotora Servia”). Under the terms of theescisión, Grupo TMM transferred all of its assets, rights and privileges (other than its interest in TMM) and all of its liabilities to Promotora Servia. The transfer of assets to Promotora Servia was made without recourse and without representation or warranty of any kind, and all of Grupo TMM’s creditors expressly and irrevocably consented to the transfer of the liabilities to Promotora Servia.

On September 13, 2002, we completed a reclassification of our Series L Shares of stock as Series A Shares. The reclassification combined our two classes of stock into a single class by converting each share of our Series L Shares into one share of our Series A Shares. The reclassification also eliminated the variable portion of our capital stock and we became a fixed capital corporation(sociedad anónima). Following the reclassification, we had 56,963,137 Shares outstanding. As a result of the elimination of the variable portion of our capital stock, our registered name changed from Grupo TMM, S.A. de C.V. to Grupo TMM, S.A.

As a result of a reform to the securities law in Mexico promulgated in June 2006, publicly traded companies in Mexico were transformed by operation of law intoSociedades Anónimas Bursátiles(Public Issuing Corporation) and were required to amend their bylaws to conform them to the provisions of the new law. Accordingly, on December 20, 2006, the Company added the term “Bursátil” to its registered name to comply with the requirements under Mexico’s new securities law, orLey del Mercado de Valores. As a result, the Company is known as Grupo TMM, Sociedad Anónima Bursátil, or Grupo TMM, S.A.B. In addition, the Series A Shares of the Company were renamed as nominative common shares without par value (“Shares”). The rights afforded by the new Shares are identical to the rights afforded by the former Series A Shares.

Today, we are a fixed capital corporation listed on the Mexican Stock Exchange (Bolsa Mexicana de Valores) incorporated under theLey General de Sociedades Mercantilesfor a term of 99 years. We are headquartered at Avenida de la Cúspide, No. 4755, Colonia Parques del Pedregal, 14010 México City, México, and our telephone number is +52-55-5629-8866. Grupo TMM’s Internet website address is www.grupotmm.com. The information on Grupo TMM’s website is not incorporated into this Annual Report.

Business Overview

General

We are one of the largest logistics and transportation companies in Mexico, providing dynamic ocean transportation services, including maritime, ports and terminals management and logistics services, to premium clients throughout Mexico.

Maritime Operations.Our Maritime Operations division provides maritime transportation services, including offshore vessels that provide transportation and other services to the Mexican offshore oil industry, tankers that transport petroleum products within Mexican waters, parcel tankers that transport liquid chemical and vegetable oil cargos from and to the United States and Mexico, and tugboats that provide towing services at the port of Manzanillo, Mexico. As of March 31, 2016, we provide these services through our fleet of 41 vessels, which includes product and chemical tankers, harbor tugs and a variety of offshore supply vessels.

In addition, we operate a shipyard with integrated services based in the port of Tampico, Mexico through our subsidiary, Inmobiliaria Dos Naciones (“IDN”). IDN is located near offshore oil and gas facilities and key commercial routes between the Southeastern United States and Mexico. IDN provides ship repair services and has two floating drydocks with a capacity of 3,000 metric tons each. IDN services more than 30 vessels per year and provides us with the necessary capabilities to build additional vessels.

Ports and Terminals Operations.We presently operate three Mexican port facilities, Tuxpan, Tampico and Acapulco, under concessions granted by the Mexican government, which provide for certain renewal rights. This business unit also provides port agent services to vessel owners and operators in the main Mexican ports.

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Logistics Operations.We provide dedicated logistics services to major manufacturers, including automobile manufacturers and retailers with facilities and operations throughout Mexico. The services that we provide include consulting, analytical and logistics outsourcing services, which encompass the management of inbound movement of parts to manufacturing plants consistent withjust-in-time inventory planning practices; logistics network (order-cycle) analysis; logistics information process design; intermodal transport; warehousing and bonded warehousing facility management; supply chain and logistics management; product handling and repackaging; local pre-assembly; maintenance and repair of containers in principal Mexican ports and cities and inbound and outbound distribution using multiple transportation modes. Due to the scope of our operations, together with the extent of our experience and resources, we believe that we are uniquely positioned to coordinate the entire supply chain for our customers.

Set forth below are our total revenues over the last three fiscal years for each of our business segments:

	Consolidated Transportation Revenues (in millions of Pesos) Years Ended December 31,
	2015		2014		2013
Maritime Operations	$	2,770.9	$	2,488.3	$	2,455.3
Ports and Terminals Operations		114.2		114.9		113.4
Logistics Operations		169.7		162.0		219.2
Other Business		74.0		67.2		50.6
Total	$	3,128.8	$	2,832.4	$	2,838.5

All of these revenues are earned in Mexico except for 2% of the revenues from our chemical tankers and product tankers.

Recent Developments

Sale of Tuxpan Container Terminal Project

In 2014 we sold our container terminal project located in the port of Tuxpan. Following the sale, we continue to own approximately 1,830 acres of land in the port of Tuxpan, on which we are developing a liquid oils terminal, a citrus juice export terminal and an automobile terminal.

Sale of Land Transportation Business

In the third quarter of 2013, we sold the land transportation businesses (trucking and autohauling) in our Logistics Operations as part of our strategy to focus on our profitable businesses.

Sale and Leaseback Arrangement with UNIFIN

On March 31, 2014, the Company, through its subsidiary IDN, entered into a sale and leaseback arrangement with UNIFIN Financiera, S.A.P.I. de C. V., SOFOM E.N.R. (“UNIFIN”), whereby IDN sold to UNIFIN the floating dry-dock “ARD-10”, the floating dry-dock “ABDF 2”, and the towing vessel “Catherine M” for an amount of approximately $55.6 million. At the same time, IDN and UNIFIN entered into an operating leasing arrangement for the three assets in order to maintain their ability to operate and generate income. The leasing arrangement will last four years with monthly payments of approximately $0.9 million. Under the arrangement, IDN is the lessee and UNIFIN is the lessor.

On May 14, 2014, the Company, through its subsidiary TMM, entered into a sale and leaseback arrangement with UNIFIN, whereby TMM sold to UNIFIN the seaboats “Isla Passavera” and “Margot Marianne” for an amount of approximately $22.7 million. At the same time, TMM and UNIFIN entered into an operating leasing arrangement for the two assets in order to maintain their ability to operate and generate income. The leasing arrangement will last four years with monthly payments of approximately $0.4 million. Under this arrangement, TMM is the lessee and UNIFIN is the lessor.

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Charter and Acquisition of Additional Vessels

AHTS“Subsea 88”. On August 24, 2012, we entered into a bareboat charter contract with Subsea Petroleum Services, S.A.E. that included an option to purchase the Anchor Handling Tug Supply vessel (“AHTS”) “Subsea 88”. On November 9, 2013, we financed the purchase of the vessel through a capital lease contract with “FTAI Subsea 88 Ltd”, a subsidiary of Fortress, a leasing company. The vessel is under a long-term time charter contract with PEP.

AHTS “Subsea 204”. In the first quarter of 2014 we entered into a two-year bareboat charter contract with Subsea Petroleum Services, S.A.E. that included an option to purchase the AHTS “Subsea 204”. The vessel is under a long-term time charter contract with PEP.

Sale of Vessels

As part of the Company’s plan to modernize its fleet, the Company has sold some of its older offshore vessels in recent years: (i) on March 13, 2013, we sold the Supply Tug “Isla del Carmen” to Gulf Marines Contractors S. de R.L. de C.V.; (ii) on December 19, 2013, we sold the Supply Tug “Isla Tiburón” to Naviera Mexicana JM S.A. de C.V.: and (iii) on June 16, 2015, we sold the Product Tanker “Palenque II” to Hydra Maritime LTD.

Termination of Cabotage Service

In March 2014, we commenced a containerized cargo cabotage service on the Pacific coast of Mexico. The service, which carried both dry and refrigerated cargo via a chartered geared container vessel with a capacity of 1,100 nominal TEUs, operated on a 7-10 day schedule from a home port in Manzanillo and linked the ports of Manzanillo, Mazatlan, and Guaymas with the central and northwest regions of Mexico. Due to unfavorable market conditions, the service was discontinued in May 2015.

Extension of Harbor Towage Concession in Manzanillo

In December 2014, we obtained an extension by the Port Authorities to provide harbor towage services in the port of Manzanillo, Colima, for an eight-year period from January 17, 2015 until January 17, 2023. This concession can be extended for an additional period of eight years.

As of August 2012, the Federal Electricity Commission (Comisión Federal de Electricidad or CFE) began liquified natural gas (LNG) operations in the port of Manzanillo. Such operations require the towing service at Manzanillo terminal, which we provide.

Mexican Peso-Denominated Trust Certificates Program

On April 30, 2007, at the shareholders’ meeting of the Company, our shareholders authorized the establishment of a program for the issuance of trust certificates, which are securities secured solely by the trust assets and denominated in Mexican Pesos, for up to an amount of 9 billion Pesos. The proceeds from the sale of these certificates were utilized by us to refinance our existing bank financings of our vessel fleet and to acquire additional vessels as contemplated by our expansion program. A portion of the cash proceeds from the issuance of the trust certificates is required to be held by the trust as restricted cash. The trust assets are comprised of the vessels contributed to the trust, the contracts related thereto and the restricted cash thereunder. Certificate holders’ only recourse under the Trust Certificates Program is to the trust assets.

We closed our first, second, and third issuances of trust certificates under the program on July 19, 2007, April 30, 2008, and July 1, 2008 in an amount of 3 billion Pesos, 1.55 billion Pesos, and 4.39 billion Pesos, respectively. Our first issuance was used primarily to refinance existing vessel indebtedness. Our second issuance was used to finance the acquisition of five new and used vessels, and the third issuance was used to finance the acquisition of new and used vessels.

We closed our fourth issuance of trust certificates under the program on July 29, 2010, which by the General Shareholders’ Meeting resolutions on April 30, 2010 was increased to 10.5 billion Pesos. This issuance was used primarily to repay the previous three issuances, thereby consolidating the debt under the program, and to refinance existing vessel indebtedness. As of December 31, 2015, the outstanding balance was $10.539 billion Pesos.

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In accordance with the program, the Company had the right to capitalize interest for the first five years as per the following:

Year	Capitalization %			Interest Payment %
1st and 2nd		60	%		40	%
3th and 4th		50	%		50	%
5th		25	%		75	%

In August 2012 and with the authorization of the Trust Committee, the Company elected to capitalize 60% of the accrued interest to dedicate such resources to a vessel substitution program. During 2013 and 2014 the Company elected not to capitalize any interest on the trust certificates, choosing instead to pay 100% of the accrued interest. In February and November 2015 and with the authorization of the Trust Committee, the Company elected to capitalize 25% and 23% of the corresponding of accrued interest, respectively.

SSA Claim

In May 2012, Grupo TMM received a claim notice from SSA Mexico, S.A. de C.V. (“SSA”) (formerly TMM Puertos y Terminales, S.A. de C.V. or TMMPyT) relating to payments made by SSA to a law firm regarding a tax proceeding with the tax authorities in Mexico and which related to the trademark of Servicios en Puertos y Teminales. On January 14, 2013, we were officially notified by the International Chamber of Commerce (“ICC”) of arbitration proceedings with respect to the claim.

In December 2014, we obtained a favorable ruling in the ICC arbitration proceeding with SSA. The ruling rejected SSA’s claims and ordered SSA to pay Grupo TMM approximately $2.5 million to cover its legal fees and costs incurred in connection with the proceeding. However, the ruling also requires Grupo TMM to reimburse SSA US$115,000 for costs incurred by SSA to substantiate the costs of the arbitral proceeding.

Pursuant to the foregoing, on December 23, 2015, Grupo TMM and SSA signed an agreement to set off the amounts owed to each other pursuant to the arbitral award. Following the set off, Grupo TMM received a credit in the amount of $510.4 pesos from SSA.

The Mexican Market

Since TMM’s formation in 1958, the growth and diversification of the Mexican economy have largely driven our growth. As a result of NAFTA, which became effective on January 1, 1994, trade with and investment in the Mexican economy has significantly increased, resulting in greater traffic along the North-South cross-border trade routes, which comprise the NAFTA corridor. The following table illustrates the growth of the foreign trade segment of the Mexican economy over the last three years:

	Foreign Trade 2012-2014(a)
	As of December 31, (in millions of Dollars)
	2015			2014			2013
Total Exports	US$	380,772		US$	397,535		US$	380,027
Total Imports	US$	395,232		US$	399,977		US$	381,210
Total Trade Flows	US$	776,004		US$	797,512		US$	761,237
Growth Rate—Exports		(4.1	)%		4.6	%		2.5	%
Growth Rate—Imports		(1.2	)%		4.9	%		2.8	%
Growth Rate—Total		(2.6	)%		4.8	%		2.6	%
Growth Rate—GDP(b)		2.5	%		2.1	%		1.4	%

(a) The figures include the in-bound (maquiladora) industry.

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(b) The methodology for calculating Growth Rate-GDP was modified by theInstituto Nacional de Estadistica, Geografia e Informatica(INEGI) and is based on 2008 prices.

Source:Instituto Nacional de Estadistica, Geografia e Informatica (INEGI).

Business Strategy

As part of our continued effort to achieve the Company’s goals, throughout the past 5 years we have accomplished the following:

• We have expanded the assets of our Maritime Operations, resulting in better operating margins.

• During 2012 we (i) entered into an agreement for the purchase of an FSIV which was delivered in August 2012; (ii) were awarded a long-term time charter contract for an AHTS vessel with PEP, which vessel we initially acquired under a bareboat charter contract with Subsea Petroleum Services, S.A.E. that included a purchase option, and which we later acquired through a capital lease in November 2013; and (iii) acquired a shipyard in the port of Tampico, Mexico, enabling us to reduce our vessel maintenance and repair costs and providing us with an attractive and state-of-the-art facility for the Mexican maritime industry.

• During the first quarter of 2014, we were awarded a long-term time charter contract for an AHTS vessel with PEP, which vessel we acquired under a bareboat charter contract with Subsea Petroleum Services, S.A.E. that included a purchase option.

• In the third quarter of 2013, we sold the land transportation businesses (trucking and autohauling) in our Logistics Operations. In addition, in 2014 we agreed to sell our container terminal project in Tuxpan. With these sales, we continue our efforts to focus on our profitable businesses.

• With respect to our liabilities, in addition to continually servicing our debt obligations, we restructured and partially prepaid the debt we incurred with DVB Bank SE (formerly DVB Bank AG) to finance the purchase of two parcel tankers. We have also prepaid principal under our Trust Certificates Program.

Moving forward, our business strategy is focused on the following:

Expansion and improvement of our Maritime Operations

Considering PEMEX’s need to increase its oil and gas reserves, the potential increase in economic activity resulting from the recent Energy Reform, along with the seniority granted to Mexican ship-owners under the Mexican Navigation Law (Mexican flagged vessels have a preference to perform cabotage in Mexican waters), our Maritime Operations division is focused on consolidating and expanding operations by: (i) increasing cabotage services with medium and long-term contracts; (ii) satisfying increasing demand for exploration and distribution services in Mexico by meeting market requirements for new generation vessels with higher-rated and deeper-water capabilities; and (iii) increasing the current capacity of our shipyard repair services to more than 30 vessels per year, of which approximately one third is owned fleet and, in the long term, to have the capacity to build vessels, enabling us to compete to satisfy the expected demands of PEMEX and future customers for offshore vessels.

Expansion of our Ports and Terminals Operations

Tuxpan is the closest port to Mexico City and the central Mexican states, which account for more than 50% of Mexico’s GDP. We retain a significant portion of land in Tuxpan and continue to develop projects associated with that region, such as a liquid oils terminal, an automobile terminal and a citrus juice export terminal.

Gasoline and diesel imports account for 47% of domestic consumption. The Mexican Energy Reforms include refined products liberalization, which should result in new mid-stream infrastructure to meet the demand for gasoline and diesel imports. To capitalize on the growth potential of this market, we are in the process of developing port facilities and storage terminals in order to meet the future demand for gasoline and diesel imports.

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Expansion of our Logistics Operations

We are looking to leverage our experience and knowledge of Mexico and its laws, our customer relationships, and our skills in managing union and non-union labor resources to further expand our business with the automotive industry and in general in all activities related to yards and storage management, with an emphasis on “just-in-time” inventory planning, store, subassemblies and yards administration.

We expect to meet all of the above mentioned goals through a series of financial and commercial strategies that are described in greater detail under Item 5. “Operating and Financial Review and Prospects—Business Plan.”

Certain Competitive Advantages

We believe that we benefit from the following competitive advantages:

• We are one of the largest and leading Mexican owned and operated maritime and logistics companies in Mexico.

• We have a demonstrated ability to contract vessels with limited disruptions.

• The Mexican Navigation Law requires that Mexican flag carriers receive preferential treatment.

• We are poised to grow along with the energy sector.

• We have extensive and proven experience in ports, terminals and integrated services, such as yards operations, vessels and intermodal equipment maintenance and repair, warehousing.

• Our operations in Tuxpan, Veracruz are in a prime location to capitalize on the growth of trade via the Gulf of Mexico.

Maritime Operations

Our Maritime Operations include: (a) supply and logistics services to the oil offshore industry at offshore facilities in the Gulf of Mexico and between ports, moving crews and/or cargo to and from oil platforms; (b) product tankers for the transportation in cabotage of petroleum products, such as the distribution of gasoline to a variety of Mexican ports where the gasoline is further distributed inland; (c) parcel tankers, also known as chemical tankers, for the transportation of liquid chemical cargoes between ports in Mexico and the United States; (d) tugboats that provide harbor towing services in and out of the port of Manzanillo; and (e) shipyard services, including ship repair and dry docking services. This segment accounted for 89% of consolidated revenues for the year 2015, 88% for the year 2014, and 86% for the year 2013.

Fleet Management

As of March 31, 2016, we operated a fleet comprised of product tankers and parcel tankers, as well as a fleet of offshore vessels and tugboats. Of a total of 41 vessels, 35 are owned tonnage (four product tankers, 24 offshore vessels, two parcel tankers and five tugboats) and six are chartered units (three offshore vessels and three tugboats).

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The table below sets forth information as of March 31, 2016, about our fleet of owned and chartered vessels by type, size and capacities:

Vessel Type	Number of Vessels		Total Dead Weight Tons (in thousands)		Total Cubic Meter Capacity (in thousands)			BHP(*)
Offshore vessels		27		35.8		*	*		5,380
Product tankers		4		186.7		204.9			*	*
Parcel tankers		2		27.9		30.9			*	*
Tug boats		8		2.9		*	*		4,676
Total		41		253.3		235.8

* Average Brake Horse Power.

** Not applicable.

Offshore Vessels

We have been participating in this business for more than 20 years. Our offshore division provides supply and logistics services to the offshore industry between the ports and the offshore facilities in the Gulf of Mexico through a specialized fleet that includes fast and conventional crew vessels, supply vessels, anchor handling tug supply vessels, floating production, storage and offloading (“FPSO”) vessels and Dynamic Positioning (“DP”) vessels. Other services include supply and administration of onboard personnel, coordination and supervision of the maritime transport of staff, materials and equipment from the base on shore to operational points of the vessels within the oil-drilling zone of the Gulf of Mexico, and coordination and supervision of catering and accommodation matters onboard the vessels. As of March 2016, TMM’s offshore fleet represented 5.5% of Mexico’s offshore fleet. As of March 31, 2016, 18 TMM vessels were directly hired by PEMEX, and three additional vessels were hired by private operators engaged in the construction and maintenance sectors for PEMEX or working in the spot market.

Product Tankers

Since 1992, we have provided product tanker chartering services to PEMEX for the transportation of clean and dirty petroleum products, from refineries to various Mexican ports. Our fleet is comprised of four product tankers, which include one short-term contract with PEMEX, one short-term contract with PMI, one long-term bareboat contract with NT Tankers and one short-term spot contract with Maersk Oil.

Set forth below is information regarding our product tanker fleet as of March 31, 2016:

Vessel	Year		Flag		Hull			DWT(1)		LOA(3)(m)(4)		Beam (m)		Charterer
Veracruz (formerly Amatlan II)		2002		Mexico		DH	(2)		45,467		189		32	PEMEX
Tajin		2003		Mexico		DH	(2)		47,147		183		32	Maersk Oil
Tula		2005		Mexico		DH	(2)		46,911		183		32	PMI
Tulum		2000		Mexico		DH	(2)		47,131		183		32	NT Tankers

⁽¹⁾  Dead weight tons.

⁽²⁾  Double hull.

⁽³⁾  Overall length.

⁽⁴⁾  Meters.

We have a competitive advantage in the Mexican market as Mexican Maritime law establishes that cabotage services should be provided by Mexican flag vessels and only Mexican companies are allowed to fly the Mexican flag.

OPA 90 established that vessels that do not have double-hulls will be prohibited from transporting crude oil and petroleum products in U.S. coastwise transportation after a certain date based on the age and size of the vessel unless they are modified with a double-hull. In addition, Annex II (Rules 13G and 13H) from MARPOL 73/78 establishes a phase out calendar for single hull tankers. We are aware of this regulation and do not charter or intend to acquire vessels that do not comply with these rules.

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Parcel Tankers

Our parcel tanker business operates between Mexican and American ports in the Gulf of Mexico, transporting chemicals, vegetable and animal oils and molasses. The majority of the transported cargo is under contracts of affreightment (“COAs”) in which the customers commit the carriage of their cargo over a fixed period time on multiple voyages, with a minimum and a maximum cargo tonnage at a fixed price. The vessel operator is responsible for the vessel, the fuel and the port expenses. Currently, our parcel tanker fleet is comprised of two owned vessels. We transported 594 thousand tons of chemical products in our parcel tankers during 2015, 695 thousand tons during 2014, and 848 thousand tons during 2013. Our primary customers for our parcel tanker services include major oil and chemical companies.

Set forth below is information regarding our parcel tankers as of March 31, 2016:

Vessel	Flag		Year		LOA		Beam		Draft		DWT(1)		Capacity M3 Total
					(m)(2)		(m)		(m)
Olmeca		Marshall Islands		2003		130.0		22.4		12.0		15,472		16,800
Maya		Marshall Islands		2003		123.0		20.0		8.7		12,452		14,102
Total												27,924		30,902

⁽¹⁾  Dead weight tons.

⁽²⁾  Meters.

Harbor Towing

Since January 1997, TMM (formerlyServicios Mexicanos en Remolcadores, S.A. de C.V.) has held a concession to provide tugboat services in the port of Manzanillo, including port docking and navigation in and out of channels and port facilities into open waters. In December 2014, the concession to operate this business was renewed by the relevant authorities until January 17, 2023, with an option to extend for an additional eight years. As of March 31, 2016, we were operating five owned vessels in this port, two bareboat charter vessels and one time charter vessel.

Shipyard

On January 30, 2012, we purchased IDN, a company that holds a concession to operate a shipyard in the port of Tampico, Mexico. The shipyard is strategically positioned in the Gulf of Mexico, in close proximity to offshore oil and gas facilities and other key commercial routes between the Southeastern United States and Mexico. The shipyard provides ship repair services and enables us to provide dry docking services to more than 30 vessels per year. In addition, we expect to develop the necessary capabilities to build vessels at the shipyard.

Cabotage

In March 2014, we commenced a containerized cargo cabotage service on the Pacific coast of Mexico. The service, which carried both dry and refrigerated cargo via a chartered geared container vessel with a capacity of 1,100 nominal TEUs, operated on a 7-10 day schedule from a home port in Manzanillo and linked the ports of Manzanillo, Mazatlan, and Guaymas with the central and northwest regions of Mexico. Due to unfavorable market conditions, the service was discontinued in May 2015.

Customers and Contractual Arrangements

The primary purchasers of our Maritime Operations services are multi-national oil, gas and chemical companies. These services are generally contracted for on the basis of short-term or long-term time charters, voyage charters, COAs or other transportation agreements tailored to the shipper’s requirements. In 2015, our ten largest customers accounted for approximately 84% and 74% of Maritime Operations revenues and consolidated revenues, respectively. The loss of one or more of our customers could have a material adverse effect on the results of our Maritime Operations.

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The services we provide are arranged through different contractual arrangements. Time charters are the principal contractual form for our Maritime Operations.

In the case of a time charter, the charterer is responsible for the hire, fuel and port expenses, and the shipowner is responsible for the nautical operation of the vessel including the expenses related with the crew, maintenance and insurance of the vessels. When we bareboat charter a vessel, the charterer is responsible for the hire, fuel and port expenses but also assumes all risk of the nautical operation, including the associated expenses. COAs are contracts with a customer for the carriage of cargoes that are committed on a multi-voyage basis over a period of weeks or months, with minimum and maximum cargo tonnages specified over the period at fixed rates per ton depending on the duration of the contract. Typically, under voyage charters and contracts of affreightment, the shipowner pays for the fuel and any applicable port charges.

Markets

The demand for offshore vessels is affected by the level of offshore exploration and drilling activities, which in turn is influenced by a number of factors including:

• expectations as to future oil and gas commodity prices;

• customer assessments of offshore drilling prospects compared to land-based opportunities;

• customer assessments of cost, geological opportunity and political stability in host countries;

• worldwide demand for oil and natural gas;

• the ability of the Organization of Petroleum Exporting Countries (“OPEC”) to set and maintain production levels and pricing;

• the level of production of non-OPEC countries;

• the relative exchange rates for the U.S. dollar; and

• various government policies regarding exploration and development of their oil and gas reserves.

Ports and Terminals Operations

We conduct operations at the Mexican ports of Acapulco, Tuxpan and Tampico. We have been granted two partial assignment agreements of rights and obligations in respect to our operations at Tuxpan. Additionally, we own land in Tuxpan on which we are developing various terminals, including a liquid oils terminal, a citrus juice export terminal and an automobile terminal. Our concession in Acapulco and our partial assignment agreement of rights and obligations in Tuxpan give us the right of first refusal to continue operations for a second term once the term of the original contract expires. In August 2010, we began operations in the port of Tampico, where we were granted a two-year permit (renewable for an additional two years) to conduct vessel loading and unloading. In September of 2012, the permit was extended for four years and is renewable for an additional four years. Ports and Terminals operations accounted for 4% of consolidated revenues in 2015, 2014, and 2013.

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The following table sets forth our existing port facilities and concessions:

Port	Concession	Date Awarded	Duration
Acapulco	Integral port administration	June 20, 1996	25 years (with the possibility of extension)
Tuxpan	Approximately 8 hectares of land	April 7, 1997	20 years (with the possibility of extension)
	Stevedoring Services	August 4, 1999	20 years (includes extension for 10 years that was exercised in 2009).
Tampico	Permit for loading and unloading operations	September 24, 2012	4 years (with the possibility of extension for 4 years)

Acapulco

In June 1996, we received a 25-year concession to operate the tourist port of Acapulco and commenced operations in July 1996. Our port interests in Acapulco are operated through a joint venture with SSA called Administración Portuaria Integral de Acapulco, S.A. de C.V.(“API Acapulco”), in which we have a 51% interest.

Through API Acapulco, we operate and manage an automobile terminal, a cruise ship terminal with a capacity to receive two cruise ships simultaneously and an automobile warehouse with a capacity to store up to 1,700 automobiles.

In 2015, we handled 48,593 automobile exports for Volkswagen, Chrysler and Nissan to South America and Asia, reflecting a decrease of 26.7% from 2014, when we handled approximately 66,293 automobiles at our terminal.

Acapulco is one of the main tourist ports in Mexico. During 2015, we had 15 cruise ship calls in Acapulco, which was seven more than the number of calls we had in 2014.

Tuxpan

We own approximately 1,830 acres of land in the port of Tuxpan through our wholly owned subsidiary, Prestadora de Servicios MTR, S.A. de C.V., giving us access to a contiguous public berth where containers and general cargo can be unloaded and delivered to our terminals. While we currently handle only a small volume of cargo at the port, we are in the process of developing a liquid oils terminal, a citrus juice export terminal and an automobile terminal at the site. In addition, we offer container-warehousing services at this port. In 2014, we agreed to sell our container terminal project in Tuxpan. Our remaining Tuxpan port facilities are operated through Prestadora de Servicios MTR, S.A. de C.V., a wholly owned subsidiary of Grupo TMM.

Tampico

In July 2010, we were granted a two-year permit to conduct vessel loading and unloading operations in the public berths at the port of Tampico. In September 2012, the permit was extended for four years and is renewable for an additional four years. Our operations in Tampico involve the loading and unloading of general cargo, such as steel and wood.

Shipping Agencies

We operate shipping agencies at ports throughout Mexico, including the ports of Acapulco, Veracruz, Coatzacoalcos, Ciudad del Carmen, Dos Bocas, Tuxpan, Cozumel, Costa Maya, Progreso and Zihuatanejo. Our

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shipping agencies provide services to vessel owners and operators in Mexican ports, including (i) port agent services, including the preparation of the required documentation with the relevant port authorities for the dispatch of vessels; (ii) protective agent services, which support the rotation of crew members and the supply of spare parts; (iii) cargo and multimodal supervision; (iv) ship chandler services, which include the procurement of food, water and supplies and (v) bunkering services, which include the coordination of fuel delivery services. Our shipping agencies also provide shipping agency services at other major ports through agreements with local agents.

Logistics Operations

Through TMM Logistics, S.A. de C.V. (“TMM Logistics”), a wholly owned subsidiary of Grupo TMM, we provide dedicated logistics services to major manufacturers, including automobile manufacturers, and retailers with facilities and operations throughout Mexico. The services that we provide include consulting, analytical and logistics outsourcing services, which encompass the management of inbound movement of parts to manufacturing plants consistent with just-in-time inventory planning practices; logistics network (order-cycle) analysis; logistics information process design; bonded warehousing facility management; supply chain and logistics management; product handling and repackaging; local pre-assembly; and maintenance and repair of containers in principal Mexican ports and cities. Due to the scope of our operations, together with the extent of our experience and resources, we believe that we are uniquely positioned to coordinate the entire supply chain for our customers. This segment accounted for 5% of consolidated revenues in 2015, 6% in 2014 and 8% in 2013.

Automotive Services

We provide specialized logistics support for the automotive industry within Mexico. Services include the arrangement and coordination of the movement of motor vehicle parts or sub-assemblies from supplier facilities to assembly plants, warehousing, inspection and yard management. Our logistics services can be provided as end-to-end integrated logistics programs (bundled) or discrete services (unbundled) depending on customer needs.

Container Repair and Maintenance

We offer maintenance and repair services for dry and refrigerated containers in Manzanillo, Veracruz, Altamira, Ensenada, Aguascalientes, Mexico City (Pantaco) and Mazatlan. These services involve keeping refrigerated components and other parts of a container in useable condition, including mechanical repair, welding and repainting of such containers.

TMM Plus

TMM Plus is a state-of-the-art supply chain platform that we developed which enables us to better control our operations and to provide our customers with full tracking of their products while products are moving through the supply chain. In addition, this tool increases our capabilities for designing and controlling a variety of logistics services. This platform has expanded our service offerings, which we expect will continue to increase the volume of our business.

With TMM Plus we can track the movement of cargo units and our related operational responsibilities efficiently throughout the supply chain through the use of hand-held devices carried by our operational team. Through TMM Plus, information on each process is supplied to our customers in real time and displayed in different formats according to their needs. The system also has the ability to produce different reports and statistics according to customer needs.

Warehousing Services

We offer warehousing services through our subsidiary, Almacenadora de Depósito Moderno, S.A. de C.V. Organización Auxiliar de Crédito (“ADEMSA”). ADEMSA currently operates over 428,292 square meters of warehousing space throughout Mexico, including 85,429 square meters of direct warehouse space (the largest of which is located in northern Mexico City). Due to its regulated nature, ADEMSA is one of a limited number of warehousing companies authorized by the Mexican government to provide bonded warehousing services and to issue negotiable certificates of deposit. At the beginning of 2013, we decided to discontinue this business in order to focus on more profitable operations. As a result, this operation is presented as discontinued.

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Grupo TMM’s Strategic Partners

We are currently a partner in the following strategic arrangement:

Business	Partner
Ports (Acapulco)	SSA Mexico, Inc.

Sales and Marketing

Much of the success of our business depends on our marketing network. Our marketing network includes affiliated offices, agencies at Mexican ports and a sales force based throughout Mexico to sell our logistics, ports and specialized maritime services. Our marketing and sales efforts are designed to grow and expand our current customer base by initiating long-term contracts. We have devised, implemented and will continue to implement several customer service initiatives in connection with our marketing efforts, which include the designation of customer sales territories and assignment of customer service teams to particular customers.

Since we commenced operations, we have been actively seeking to obtain new customer contracts with the expectation of entering into long-term contracts with such new clients or with existing customers. Although written customer contracts are not customary in Mexico, we have succeeded in negotiating written contracts with a number of our major customers.

Systems and Technology

We continually enhance our technology and information systems to support our operations. Our systems are updated regularly to increase operating efficiencies, improve customer satisfaction and maintain regulatory compliance. We have deployed devices and software to increase accuracy and security in our information systems in order to ensure the continuity of our business operations.

We have developed TMM Plus, an internet-based information systems platform that integrates different logistics services, thereby increasing the efficiency of our logistics operations. The information systems platform supports dedicated logistics contracts and yard management. The systems platform allows our customers to access information regarding the location and status of their cargo via computer. See “— Business Strategy — Reducing Corporate Overhead and Other Operating Costs.”

Competition

Maritime Operations

The Company’s primary competitors in the offshore vessel business are Oceanografía, S.A. de C.V., Tidewater de Mexico, S. de R. L. de C.V., Naviera Bourbon Tamaulipas, S.A. de C.V., Mantenimiento Express Marítimo, S.R.L., Naviera Integral, S.A. de C.V., Marinsa S.A. de C.V. and Blue Marine Technology Group, Constructora Subacuática Diavaz, S.A. de C.V.

The Company’s primary competitor in the parcel tanker business is Stolt-Nielsen Transportation Group Ltd. Some other competitors in this business include Nordic, Eitzen and Caribbean Tankers, Inc.

Our tugboat business does not have a direct competitor within the port of Manzanillo. However, other important tugboat operations in Mexico are provided by Saam Remolques, S.A., Cia. Marítima del Pacífico, S.A. de C.V., Cia Marítima Mexicana, S.A. de C.V.,Svitzer, Smit, APLMoler, Mariomar and Intertuc.

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The Company’s primary competitors in the product tanker business are Scorpio Tankers, Maersk Tankers, Eletson, Blue Marine Cargo, S.A. de C.V. and PMI Trading.

The primary competitors of our shipyard business are Talleres Navales del Golfo, Astilleros Mexicanos JP, Astilleros de Marina and Varadero Zavala.

The Company believes the most important competitive factors concerning the Maritime Operations segment are pricing, the flying of the Mexican flag and the availability of equipment to fit customer requirements, including the ability to provide and maintain logistical support given the complexity of a project and the cost of transferring equipment from one market to another. The Company believes it can capitalize on opportunities as they develop for purchasing, mobilizing, or upgrading vessels to meet changing market conditions.

Ports and Terminals Operations

The Company’s key competitors in its ports business are Hutchinson Ports, SSA Mexico, Grupo CICE and Amports.

In its shipping agencies business, the Company’s primary competitors are Representaciones Marítimas, Meritus and Aconsur.

The Company believes the most important competitive factors concerning the Ports and Terminals Operations segment are customer service, experience and operating capabilities.

Logistics Operations

In the logistics business, the Company faces competition primarily from Car Logistics S.A. de C.V., Axis Logistics S.A. de C.V., Wallenius, SEGLO, Ceva Logistics, Syncreon, Keuhne-Nagel, SeSe, Amport, DHL, CSI, SSA, CPV and CSI.

In its maintenance and repair business, the Company faces competition primarily from Container Care International Inc., Reparación Internacional de Contenedores, S.A. de C.V. and Maersk Sealand Inc.

Our warehousing business’ main competitors are Exel Logistics de Mexico S.A. de C.V., Zimag Logistics, Accel Logística S.A. de C.V., Kuehne & Nagel S.A de C.V. and Grupo Onest Logistics. At the beginning of 2013, we decided to discontinue this business in order to focus on more profitable operations. As a result, this operation is presented as discontinued.

The Company believes the most important competitive factors in the Logistics Operations segment are price, customer service, brand name, experience, operating capabilities and state-of-the-art information technology.

Regulatory Framework

Certain countries have laws which restrict the carriage of cargos depending upon the nationality of a vessel or its crew or the origin or destination of the vessel, as well as other considerations relating to particular national interests. In accordance with Mexico’s Navigation Law (Ley de Navegación y Comercio Marítimos), cabotage (intra-Mexican movement) is reserved for ships flying the Mexican flag. We believe we are currently in material compliance with all restrictions imposed by the jurisdictions in which we operate. However, we cannot predict the cost of compliance if our business is expanded into other jurisdictions which have enacted similar regulations.

We are also subject to the laws of various jurisdictions and international conferences with respect to the discharge of materials into the environment. See “— Environmental Regulation” and “— Insurance.”

Our port operations are subject to theLey de Puertos.Port operations require a concession title granted by the Mexican government to special companies incorporated under theLey de Puertos, which companies may partially assign their concession title to third parties for the use and exploitation of assets owned by the Mexican government

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in the different port facilities (subject to theLey de Puertosand the terms and conditions of the concession title). Various port services require a special permit granted by the Ministry of Communications and Transportation of Mexico. Concession titles may be revoked under certain circumstances in accordance with applicable law and the terms of the concession title. Partial assignments of concession titles may be rescinded under certain circumstances established in the corresponding assignment agreements. Foreign investment in special companies incorporated under theLey de Puertos(such as API Acapulco) may not exceed 49%, except through vehicles or securities deemed by applicable Mexican law as “neutral investments.”

Mexican Navigation Law

The Mexican Navigation Law (Ley de Navegación y Comercio Marítimos) was enacted in 2006, with its most recent amendments effective as of January 23, 2014. This law: (i) strengthens the reservation of cabotage services for Mexican individuals dedicated to shipping or Mexican shipping companies; (ii) establishes mechanisms and procedures for the resolution of maritime controversies or disputes and (iii) in general terms, is protective of the Mexican shipping industry. Nevertheless, there can be no assurance that the percentage of Mexican-flagged vessels operating in Mexico will continue to increase in the future.

The law gives precedence to international treaties ratified by Mexico to foster uniformity in the type of regime applicable to specific circumstances such as the Hague Visby Rules, CLC/FUND Conventions, 1976 Limitation Convention, Salvage Convention, COLREGS, and MARPOL. (All vessels navigating Mexican waters must enter into protection and indemnity insurance agreements.)

Listed below are some of the salient points of the legislation:

• customary provisions enabling authorities to carry out inspections of vessels and investigations of incidents;

• regulations concerning registration of vessels and waivers allowing Mexican companies to operate foreign flag vessels in otherwise reserved domains;

• foreign vessels are obliged to designate a shipping agent in order to call at Mexican ports;

• Mexican flag vessels are required to operate with Mexican crews only and cabotage is in principle reserved for Mexican vessels;

• when a foreign vessel is abandoned by the owners with cargo on board, provisions of the legislation coordinate repatriation and temporary maintenance of the crew which the law deems ultimately to be the joint and several liability of the owner and agent;

• the carriage of passengers, cargo and towage in ports and pilotage are also regulated;

• captains are responsible for damage and loss caused to vessels or ports due to negligence, lack of proper qualification, carelessness or bad faith, but are not responsible for damages caused by an act of God orforce majeure;

• companies providing towage services must carry insurance to cover their liabilities to the satisfaction of the authorities;

• pollution is regulated by international treaties; however this only covers CLC-type liabilities. Pollution in respect of other substances is dealt with under local legislation which has no limitation. This is irrespective of any criminal proceedings or sanctions against the party responsible for the incident; and

• maritime privileges are also considered within the law.

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The law establishes time limits for commencement of proceedings with respect to 7 specific types of contracts as follows:

• bareboat charter;

• time charter;

• voyage charter;

• carriage of goods;

• passengers;

• salvage; and

• towage.

On March 4, 2015, the Regulations of the Mexican Navigation Law (“Reglamento de la Ley de Navegación y Comercio Marítimos”) were published in Mexico’s Official Gazette and became effective 30 days thereafter. These regulations, which are intended to enhance legal certainty and promote trade, represent a significant event in the merchant maritime sector. In particular, the new regulations reduce administrative complexity by consolidating several existing laws or regulations into a single set of regulations.

The regulations develop various substantive aspects of the Mexican Navigation Law, including:

• general provisions (definitions, guarantees, and maritime insurance);

• extraordinary specialization of vessels, registration, national maritime registry, maritime agents and nautical education;

• temporary navigation permits and permits for permanent stay, maneuver, nautical tourism and pollution prevention; and

• revisions to conform hydrocarbons terminology to the new Hydrocarbons Law.

Following the adoption of the new regulations, several topics covered by the Mexican Navigation Law are addressed in a single document, including merchant marine education, maritime insurance, vessel inspection, maritime public registry, flag and registration of vessels and naval crafts, and marine prevention.

Mexican Energy Reforms

On December 12, 2013, the Mexican government passed legislation amending articles 25, 27 and 28 of the Mexican Constitution (Constitución Política de los Estados Unidos Mexicanos) and providing 21 transitional articles to establish the legal framework for reforming the Mexican energy sector. The reforms aim to modernize the Mexican energy sector and increase private investment by,inter alia:

• providing for PEMEX and CFE to become state-owned, for-profit companies (empresas productivas del estado);

• establishing a contractual regime to allow the Ministry of Energy (Secretaría de Energía or SENER), with the technical assistance of the new National Hydrocarbons Commission (Comisión Nacional de Hidrocarburos or CNH), to award to PEMEX and private entities the right to participate in upstream oil and gas operations through the use of service contracts, profit-sharing agreements, production sharing agreements and license agreements, with the Ministry of Energy authorized to determine the best contractual form in each case so as to maximize revenue to the Mexican government;

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• allowing private entities that have entered into a contract with PEMEX or the Mexican government to report, for accounting and financial purposes, the awarding of the contract, the related oil and gas reserves and the contract’s forecasted benefits, provided the private entities affirm that all oil and gas within the subsoil remains the property of Mexico;

• requiring PEMEX to participate in a “round zero” and submit to SENER for consideration a list of the areas where it intends to continue conducting exploration or production operations pursuant to the new contractual regime, establish that it has the technical, financial and execution capabilities needed to explore for and develop the oil and gas from those areas in an efficient and competitive manner, and provide a work program and budget for those areas;

• allowing PEMEX to transfer its rights to explore for and develop oil and gas resources to private entities upon application to SENER;

• allowing the Energy Regulatory Comission (Comisión Reguladora de Energia) to grant permits for the storage, transport and distribution of oil and gas through pipelines as well as for the generation and commercialization of electricity;

• creating the Mexican Petroleum Fund for Stabilization and Development (Fondo Mexicano del Petróleo para la Estabilización y el Desarollo) to act as a government trust fund for the collection and administration of income received by the Mexican government from contracts with PEMEX and private entities; and

• creating the National Agency of Industrial Security and Environmental Protection of the Hydrocarbon Sector (Agencia Nacional de Seguridad Industrial y de Proteccion al Medio Ambiente del Sector de Hidrocarburos) to regulate and supervise matters concerning operational security and environmental protection in the oil and gas industry.

In August 2014, SENER and CNH announced the results of PEMEX’s “round zero” lease allocation, awarding PEMEX approximately 83% of Mexico’s proven and probable (2P) reserves and 21% of its prospective resources. SENER and CNH are currently in the initial stages of “round one”, in which 109 oil and gas exploration areas and 60 production areas are to be auctioned off to prospective bidders. “Round one” is scheduled to proceed in five phases. The first three phases, involving bids for shallow water exploration areas (phase 1), shallow water production areas (phase 2) and onshore areas (phase 3), took place in 2014-2015. The final two phases, involving bids for unconventional areas and areas located in the Chicontepec Basin (phase 4) and bids for deepwater and heavy oil areas (phase 5) are scheduled to take place during 2016. PEMEX may bid on the areas offered in “round one” either alone or in partnership with one or more other companies.

We are continuing to analyze the scope and implications of the recent Mexican Energy Reforms on our business. We cannot predict the full impact that the reforms will have on our business, financial condition and results of operations once they are fully implemented. Our initial assessment is that the reforms have the potential to significantly increase Mexican oil and gas production in the coming years. Although there is no guarantee that these reforms will produce such an effect, we believe that an increase in Mexican oil and gas production would likely have a positive impact on our business, financial condition and results of operations.

Mexican Tax Reforms

On December 11, 2013, the Mexican government published in the Official Gazette various federal tax reforms that entered into effect on January 1, 2014. Key aspects of the reforms include:

• Elimination of the corporate flat tax (IETU) and the tax on cash deposits (IDE);

• Elimination of the existing fiscal tax consolidation regime. A transition scheme was established for taxpayers that previously operated under this regime and three alternatives have been established to calculate the deferred taxes for these taxpayers until December 31, 2013, which will be paid through partial payments made over the following five years;

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• Establishment of a new optional tax integration regime for groups of companies that meet certain conditions similar to those used under the former fiscal consolidation regime. The new optional tax integration regime requires an equity ownership of at least 80% for qualifying subsidiaries and would allow groups of companies to defer the annual tax payment for these subsidiaries for up to 3 years. Under this regime, Grupo TMM would not be permitted to incorporate tax losses from previous years generated by our subsidiaries, but would be permitted to incorporate tax losses generated as of January 1, 2014;

• Introduction of a new 10% withholding tax on dividends and/or distributions of earnings generated in 2014 and later years;

• Elimination of the exemption on gains from the sale of shares traded on the Mexican Stock Exchange or through a stock exchange recognized under applicable Mexican tax law. The gain will be taxable at the rate of 10% and will be withheld by the financial intermediary. Transferors that are residents of a country with which Mexico has entered into a tax treaty for the avoidance of double taxation may be exempt. See “Item 10. Additional Information—United States Federal Income and Mexican Federal Taxation —Certain Mexican Federal Tax Consequences.”

• Cancellation of scheduled decreases to the corporate income tax rate from its current 30% in 2013, 2014 and 2015;

• Payments to resident or non-resident related parties are nondeductible when these are also deducted by the related party, except when the related party also regards the income as taxable in the same tax year or in the following year. Generally, payments made to non-residents located in a low tax jurisdiction will not be deductible unless they are carried out on an arm’s-length basis; and

• Tax deductions on exempt payments to employees are limited to 47% of the exempt payments, subject to a potential increase to 53% where the exempt payments are not lower than the payments made to employees in the previous year.

On February 13, 2014, we filed an indirect writ of relief (amparo) challenging the constitutionality of various provisions of the tax reforms related to the elimination of the existing fiscal consolidation regime. On February 16, 2016, the court issued a ruling rejecting our constitutional challenge. We appealed this ruling on March 17, 2016 and a decision on our appeal remains pending.

As we await the outcome of the constitutional challenge, we are continuing to analyze the scope and implications of the tax reforms on our business. We cannot predict the full impact that the reforms will have on our business, financial condition and results of upon implementation, including the effect on our business of higher payroll taxes and higher costs due to additional compliance measures. Our initial assessments indicate that the changes will increase our income tax base in the coming years, primarily as a result of the new limitations on tax deductions. In addition, we cannot predict the indirect impact that this legislation could have on our customers and shareholders. It is possible that our shareholders may be required to pay more taxes than they would have paid prior to the implementation of the tax reforms.

Environmental Regulation

Our operations are subject to Mexican federal and state laws and regulations relating to the protection of the environment, as well as technical environmental requirements issued by the SEMARNAT. Under the General Law of Ecologic Equilibrium and Protection of the Environment (Ley General de Equilibrio Ecológico y Protección al Ambiente) and the General Law for Integral Prevention and Handling of Residues (Ley General de Prevención y Gestión Integral del Residuos), the SEMARNAT and other authorized ministries have promulgated standards, for, among other things, water discharge, water supply, emissions, noise pollution, hazardous substances, transportation and solid waste generation. The terms of the port concessions also impose on us certain environmental law compliance obligations. See “— Insurance.”

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Under OPA, responsible parties, including owners and operators of ships, are subject to various requirements and could be exposed to substantial liability, and in some cases, unlimited liability for removal costs and damages, including natural resource damages and a variety of other public and private damages, resulting from the discharge of oil, petroleum or related substances into United States waters by their vessels. In some jurisdictions, claims for removal costs and damages would enable claimants to immediately seize the ships of the owning and operating company and sell them in satisfaction of a final judgment. The existence of comparable statutes enacted by individual states of the United States, but requiring different measures of compliance and liability, creates the potential for similar claims being brought under state law. In addition, several international conventions that impose similar liability for the discharge of pollutants have been adopted by other countries. If a spill were to occur in the course of the operation of one of our vessels carrying petroleum products, and such spill affected the United States or another country that had enacted legislation similar to OPA, we could be exposed to substantial or unlimited liability.

The U.S. Clean Water Act imposes restrictions and strict controls regarding the discharge of wastes into the waters of the United States. The Clean Water Act and comparable state laws, provide for civil, criminal and administrative penalties for unauthorized discharges of pollutants. In the event of an unauthorized discharge of wastes or pollutants into waters of the United States, we may be liable for penalties and could be subject to injunctive relief.

In addition, our seagoing transport of petroleum and petroleum products subjects us to additional regulations and exposes us to liability specific to this activity. Laws and international conventions adopted by several countries in the wake of the “Exxon Valdez” accident, most notably OPA (discussed above), could result in substantial or even unlimited liability for us in the event of a spill. Moreover, these laws subject tanker owners to additional regulatory and insurance requirements. We believe that we are in compliance with all material requirements of these regulations.

We could have liability with respect to contamination at our former U.S. facilities or third-party facilities in the United States where we have sent hazardous substances or wastes under the U.S. Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA” or “Superfund”) and comparable state laws (known as state Superfund laws). CERCLA and the state Superfund laws impose joint and several liability for the cost of investigation and remediation, natural resources damages, certain health studies and related costs, without regard to fault or the legality of the original conduct, on certain classes of persons with respect to releases into the environment of certain substances. These persons, commonly called “potentially responsible parties” or “PRPs” include the current and certain prior owners or operators of a facility and persons that arranged for the disposal or treatment of certain substances at a facility where a release has or could occur. In addition, other potentially responsible parties, adjacent landowners or other third parties may initiate cost recovery actions or toxic tort litigation against PRPs under CERCLA, state Superfund laws or state common law.

Noncompliance with applicable environmental laws and regulations may result in the imposition of considerable administrative or civil fines, temporary or permanent shutdown of operations or other injunctive relief, or criminal prosecution. We currently believe that all of our facilities and operations are in substantial compliance with applicable environmental regulations. There are currently no material legal or administrative proceedings pending against us with respect to any environmental matters, and we do not believe that continued compliance with environmental laws will have a material adverse effect on our financial condition or results of operations.

We cannot predict the effect, if any, that the adoption of additional or more stringent environmental laws and regulations would have on the operations of companies that are engaged in the type of business in which we are engaged, or specifically, on our results of operations, cash flows, capital expenditure requirements or financial condition.

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Insurance

Our business is affected by a number of risks, including mechanical failure of vessels and other transportation equipment, collisions, property loss of vessels and other transportation equipment, piracy, cargo loss or damage, as well as business interruption due to political circumstances in Mexico and in foreign countries, hostilities and labor strikes. In addition, the operation of any oceangoing vessel is subject to the inherent possibility of catastrophic marine disaster, including oil spills and other environmental accidents, and the liabilities arising from owning and operating vessels in international trade.

We maintain insurance to cover the risk of partial or total loss of or damage to all of our assets, including, but not limited to, harbor and seagoing vessels, port facilities, port equipment, land facilities and offices. In particular, we maintain marine hull and machinery and war risk insurance on our vessels, which covers the risk of actual or constructive total loss. Additionally, we have protection and indemnity insurance for damage caused by our operations to third persons. With certain exceptions, we do not carry insurance covering the loss of revenue resulting from a downturn in our operations or resulting from vessel off-hire time on certain vessels. In certain instances, and depending on the ratio of insurance claims to insurance premiums paid, we may choose to self-insure our over-the-road equipment following prudent guidelines. We believe that our current insurance coverage is adequate to protect against the accident-related risks involved in the conduct of our business and that we maintain a level of coverage that is consistent with industry practice. However, we cannot assure you that our insurance would be sufficient to cover the cost of damages suffered by us or damages to others, that any particular claim will be paid or that such insurance will continue to be available at commercially reasonable rates in the future. OPA 90, by imposing potentially unlimited liability upon owners, operators and bareboat charters for certain oil pollution accidents in the United States, made liability insurance more expensive for ship-owners and operators.

Organizational Structure

We hold a majority of the voting stock in each of our subsidiaries. The most significant subsidiaries, as of March 31, 2016, include:

Name	Country of Incorporation		Ownership Interest			Voting Interest
Administración Portuaria Integral de Acapulco S.A. de C.V. (Ports)*		Mexico		51	%		51	%
Autotransportación y Distribución Logística, S.A. de C.V.(Logistics)		Mexico		100	%		100	%
Transportación Marítima Mexicana, S.A. de C.V. (Product and parcel tankers, offshore vessels, harbor tugboat operations, and shipping agencies)		Mexico		100	%		100	%
Prestadora de Servicios MTR, S.A. de C.V. (Ports)		Mexico		100	%		100	%
TMM Logistics, S.A. de C.V. (Logistics)		Mexico		100	%		100	%
TMM División Marítima, S. A. de C. V. (Offshore vessels)		Mexico		100	%		100	%
TMM Parcel Tankers, S. A. de C. V. (Tanker vessels)		Mexico		100	%		100	%
Almacenadora de Deposito Moderno, S. A. de C. V. (Warehousing)		Mexico		100	%		100	%
Inmobiliaria Dos Naciones, S. R. L. de C. V. (Shipyard)		Mexico		100	%		100	%

(*) Less than wholly owned by the Company.

Property, Plant and Equipment

Our principal executive offices are located in Mexico City, and are currently under lease from March 2006 through March 2021. Our business activities and the business activities of our subsidiaries in the logistics and transportation fields are conducted with both leased and owned equipment, and, in certain instances, through concessions granted to us by the Mexican government. We were granted the right to operate certain facilities, including certain cruise ship terminals and ports, as part of franchises awarded through the Mexican government’s privatization activity. We operate facilities, either through leases or with direct ownership interests, in Acapulco, Aguascalientes, Altamira, Ciudad del Carmen, Coatzacoalcos, Cuernavaca, Dos Bocas, Ensenada, Hermosillo, Veracruz, Manzanillo, Mexico City, Monterrey, Nuevo Laredo, Puebla, Querétaro, Tampico, Toluca and Tuxpan. See Item 4. “Information on the Company — Business Overview,” and Notes 11 and 12 to the accompanying Audited Consolidated Financial Statements contained elsewhere herein.

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Concession Rights and Related Assets as summarized below:

	Years Ended December 31,
	2015			2014			Estimated Amortization Life (Years)
	(in thousands of Pesos)
API Acapulco	$	94,607		$	94,607			8
Tugboats in the port of Manzanillo		30,266			30,266			*
		124,873			124,873
Accumulated amortization		(104,059	)		(100,275	)
Concession rights and related assets—net	$	20,814		$	24,598

(*) Fully amortized.

Property, Plant and Equipment are summarized below:

	Years Ended December 31,
	2015		2014		Estimated Total Useful Lives (Years)
	(in thousands of Pesos)
Vessels	$	8,131,363	$	7,609,796		23
Shipyard		423		486		38
Drydocks (major vessel repairs)		53,547		83,130		0.5
Buildings and installations		186,937		195,201		18 and 23
Warehousing equipment		—		18		8
Computer equipment		552		584		1 and 2
Terminal equipment		4,120		13,805		8
Ground transportation equipment		5,506		8,162		2, 3 and 8
Other equipment		13,330		15,652
	$	8,395,778	$	7,926,834
Land		880,620		872,220
Construction in progress		276,681		253,887
Total Property, Plant and Equipment—net	$	9,553,079	$	9,052,941

On March 31, 2014, the Company, through its subsidiary IDN, entered into a “sale and leaseback” arrangement with UNIFIN whereby IDN sold to UNIFIN the floating dry-dock “ARD-10”, the floating dry-dock “ABDF 2”, and the towing vessel “Catherine M” for an amount of approximately $55.6 million. At the same time, IDN and UNIFIN entered into an operating leasing arrangement for the three assets in order to maintain their ability to operate and generate income. The leasing arrangement will last four years with monthly payments of approximately $0.9 million. Under the arrangement, IDN is the lessee and UNIFIN is the lessor.

On May 14, 2014, the Company, through its subsidiary TMM, entered into a sale and leaseback arrangement with UNIFIN, whereby TMM sold to UNIFIN the seaboats “Isla Passavera” and “Margot Marianne” for approximately $22.7 million. At the same time, TMM and UNIFIN entered into an operating leasing arrangement for the two assets in order to maintain their ability to operate and generate income. The leasing arrangement will last four years with monthly payments of approximately $0.4 million. Under the arrangement, TMM is the lessee and UNIFIN is the lessor.

As of January 1, 2014, the Company has applied the revaluation model for its vessels in accordance with IAS 16 “Property, Plant and Equipment”. The revalued amounts for the majority of these vessels are determined at market values calculated by professional appraisers, with the values of certain other vessels determined using other valuation techniques. As a result, in December 2015 and 2014, the Company recognized a net revaluation surplus of vessels of $1,115.7 and $972 million respectively. Additionally, in December 2013, the Company recognized a net revaluation surplus of fixed assets of $135.4 million as follows: $104.5 million from land and $30.9 million from buildings and construction. See Note 3.7 of the Audited Consolidated Financial Statements contained elsewhere herein.

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As of December 31, 2015, 22 offshore vessels, 4 tanker vessels and 5 tugboats have been pledged to secure our obligations under our Trust Certificates program. We have also pledged 4 vessels to secure our obligations under a financing arrangement with DVB Bank and the capital lease with FTAI Subsea 88. In addition, 4 properties have been pledged to secure our obligations under our lines of credit from Banco Nacional de Comercio Exterior, Banco Autofin and Intercam Banco.

As of July 2013, Grupo TMM sold 100% of its interest in its truck transportation and haul-away trailers business. See Note 19 to the accompanying Audited Consolidated Financial Statements contained elsewhere herein.

ITEM 4A. UNRESOLVED STAFF COMMENTS

None.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

Executive Overview

We generate our revenues and cash flows by providing our customers with value-added multimodal transportation and logistics services, such as warehousing, storage management, ports and terminals operations, cargo handling and logistics support. Our commercial and strategic alliances allow us to market a full range of services in the context of a total supply chain distribution process. Through such alliances, we have been able to benefit not only from synergies, but also from the operational expertise of our alliance partners, enhancing our own competitiveness.

Our operating results are generally affected by a variety of factors, including macroeconomic conditions, fluctuations in exchange rates, operating performance of our business units, changes in applicable regulations and fluctuations in oil prices. The effect of changes in these factors impacts our revenues and operating results.

Over the last few years, we have made and continue to make significant changes to our business, including:

• Expanding our Maritime Operations: We have strengthened and streamlined our Maritime Operations in recent years, developing the business into our most profitable segment. We remain focused on expanding our Maritime Operations to add specialized offshore vessels to our fleet in order to meet market requirements for new generation vessels with higher-rated and deeper-water capabilities. In addition, we have continued our efforts to add specialized offshore vessels to our fleet in order to satisfy increasing Mexican demand for exploration and distribution services. See Item 4. “Information on the Company — Business Strategy – Expansion of our Maritime Operations.”

• Acquiring a shipyard in the port of Tampico: In January 2012, we acquired a shipyard in the port of Tampico, Mexico, which provides ship repair services and enables us to provide drydock service to more than 30 vessels per year, of which approximately 23% have been from our own fleet, which has reduced our vessel maintenance and repair costs. In the long term, we expect to have the capacity to be able to build vessels at the shipyard, enabling us to compete to satisfy the expected demands of PEMEX and future customers for new offshore vessels. See Item 4. “Information on the Company — Business Strategy – Expansion of our Maritime Operations.”

• Developing a liquid oils terminal at the port of Tuxpan: We continue to work towards developing a liquid oils terminal at the port of Tuxpan, Veracruz. Gasoline and diesel imports account for 47% of domestic consumption. The Mexican Energy Reforms include refined products liberalization, which should result in new mid-stream infrastructure to meet the demand for gasoline and diesel imports. The liquid oils terminal should help us capitalize on current and future demand for gasoline and diesel imports. See Item 4. “Information on the Company — Business Strategy – Expansion of our Ports and Terminals Operations.”

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• Our Trust Certificates Program: On April 30, 2007 we established a Mexican Peso-Denominated Trust Certificates Program for the issuance of trust certificates, which are securities secured by trust assets and denominated in Mexican Pesos, for an aggregate amount of Ps. 9 billion. We closed our first, second, and third issuances of trusts certificates under the program on July 19, 2007, April 30, 2008, and July 1, 2008, respectively, in an amount of Ps. 3 billion, Ps. 1.55 billion, and Ps. 4.39 billion, respectively. Our first issuance was used primarily to refinance existing vessel indebtedness. Our second issuance was primarily used to finance the acquisition of five new and used vessels for an approximate aggregate amount of US$111.4 million. Our third issuance was used to acquire new and used vessels. We closed our fourth issuance of trust certificates under the program on July 29, 2010 in an amount of Ps. 10.5 billion. This issuance was used primarily to repay the previous three issuances, thereby consolidating the debt under the program, and to refinance existing vessel indebtedness. According to this fourth issuance of the program, the Company has the right to capitalize a portion of the accrued interest on the trust certificates during the first five years after issuance. See Item 4. “Information on the Company — Recent Developments — Mexican Peso-Denominated Trust Certificates Program.”

• Reducing our corporate overhead: Over the last few years, we have significantly reduced our operating costs by reducing our corporate executive headcount through the elimination of redundant functions and the transfer of certain employees to other business areas within the Company. For 2016, and as part of our continuous improvement plan, we aim to optimize the size of our corporate staff as necessary to implement our business strategy.

• Introducing cost-saving technology: We have developed TMM Plus, an Internet-based information systems platform that integrates logistics services, thereby increasing the efficiency of our logistics operations. The information systems platform supports dedicated logistics contracts and yard management. The systems platform allows our customers to access information regarding the location and status of their cargo via computer. See Item 4. “Information on the Company — Logistics Operations — TMM Plus.”

• Sale of certain subsidiaries: We have sold certain non-strategic subsidiaries in an effort to streamline our operations and reduce operating costs. On June 30, 2013, we sold our truck transportation and haul-away trailers operation to an unrelated third party for $43.9 million. During 2014, we agreed to sell our container terminal project located in the port of Tuxpan. Following the sale, we continue to own approximately 1,830 acres of land in the port of Tuxpan, on which we are developing a liquid oils terminal, a citrus juice export terminal and an automobile terminal. During 2015, we sold various non-strategic subsidiaries, including Desarrollo Comercial Polo S.A.P.I. de C.V., Proserpec Servicios Administrativos S.A.P.I. de C.V., RRLC S.A.P.I. de C.V., Munray Services, S.A.P.I. de C.V., Nicte Inmobiliaria S.A.P.I. de C.V., Promotora Satuiza, S.A.P.I. de C.V. and Grupo Chant S.A.P.I. de C.V. to unrelated third parties for a total gain on sale of $185.3 million.

Operating Results

The following discussion should be read in conjunction with, and is qualified in its entirety by reference to our Financial Statements and the notes thereto appearing elsewhere in this Annual Report. Our Financial Statements have been prepared in accordance with IFRS, which differ in certain respects from U.S. GAAP.

General

Set forth below is a summary of the results of operations:

	Year Ended December 31,
	2015			2014			2013
	(in millions of Pesos)
Consolidated Transportation Revenues
Maritime Operations	$	2,770.9		$	2,488.3		$	2,455.3
Ports and Terminals Operations		114.2			114.9			113.4
Logistics Operations		169.7			162.0			219.2
Other business(*)		74.0			67.2			50.6
Total	$	3,128.8		$	2,832.4		$	2,838.5
Income on Transportation before loss from revaluation of vessels
Maritime Operations	$	521.9		$	526.8		$	517.8
Ports and Terminals Operations		7.6			4.7			0.2
Logistics Operations		27.4			26.4			40.7
Shared corporate costs		(205.2	)		(180.3	)		(205.4	)
Total	$	351.7		$	377.6		$	353.3

(*) Represents certain new businesses which are in development.

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Fiscal Year ended December 31, 2015 Compared to Fiscal Year ended December 31, 2014

Revenues from operations for the year ended December 31, 2015 were $3,128.8 million compared to $2,832.4 million for the year ended December 31, 2014.

	Consolidated Transportation Revenues (in millions of Pesos) Years Ended December 31,
	2015		% of Net Revenues			2014		% of Net Revenues			Y2015 vs. Y2014 % Change
Ports and Terminals Operations	$	114.2		3.6	%	$	114.9		4.1	%		(0.6	)%
Maritime Operations		2,770.9		88.6	%		2,488.3		87.8	%		11.4	%
Logistics Operations		169.7		5.4	%		162.0		5.7	%		4.8	%
Other business(*)		74.0		2.4	%		67.2		2.4	%		10.1	%
Total	$	3,128.8		100.0	%	$	2,832.4		100.0	%		10.5	%

(*) Represents certain new businesses which are in development.

Ports and Terminals Operations

Ports and Terminals Operations’ revenues decreased 0.6% to $114.2 million for the year ended December 31, 2015 compared to $114.9 million for the year ended December 31, 2014, and accounted for 3.6% of total net revenues. This decrease is mainly due to a decrease in volumes in the automotive segment in Acapulco (48,593 in 2015 vs. 66,293 in 2014), which is a result of changes in the units exported to Asia, and by a reduction of revenue at Tuxpan due to lower volumes. The decrease was partially offset by an increase in revenue at Tampico due to higher volumes and to increased volumes in our shipping agencies business which serviced a great number of cruise ship calls in 2015.

Maritime Operations

Maritime Operations’ revenues increased 11.4% to $2,770.9 million in 2015 compared to $2,488.3 million in 2014 and accounted for 88.6% of total net revenues. This increase was mainly attributable to increased revenues in our offshore vessels business of 12.2% and in our product tankers business of 13.3%, both attributable to improved utilization and an appreciation of the U.S. dollar against the Mexican peso, which increased the peso value of our dollar revenues. The increase was partially offset by a reduction in the rates paid by PEMEX. Also contributing to the increase in our Maritime Operations’ revenues was an 18.8% increase in revenues in our chemical tankers business due to higher average freight rates, and an increase in revenues at our tug vessels business of 4.5% attributable to higher calls at the port of Manzanillo. These increases were partially offset by a decrease in shipyard revenues of 10.8% attributable to a reduction in the proportion of higher revenue services provided.

Logistics Operations

Logistics Operations’ revenues increased 4.8% to $169.7 million in 2015 compared to $162.0 million in 2014 and accounted for 5.4% of total net revenues. This increase was mainly due to higher revenues of $10.3 million in maintenance and repair operations and $6.6 million at our intermodal terminal business, partially offset by lower revenues of $9.1 million from our automotive services business.

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Income on Transportation

Income on transportation reflects revenues on transportation less operating costs and expenses. References to operating income in this Annual Report refer to income on transportation, plus/minus the effect of other income (expenses) as presented in the Financial Statements included elsewhere in this Annual Report.

Total costs and expenses for the year ended December 31, 2015 increased 3.5% to $2,806.5 million from $2,710.4 million for the year ended December 31, 2014. This increase was mainly attributable to an increase of 7.5%, or $47.9 million, in leases and other rents, an increase of 54.2%, or $188.1 million, in contracted services, an increase of 12.5%, or $25.1 million, in fuels, materials and accessories, and an increase of 2.0%, or $12.8 million, in salaries, wages and employee benefits. The increase in total costs and expenses in 2015 was partially offset by a decrease of 21.5%, or $184.3 million, in depreciation, amortization and loss from revaluation of vessels. Operating income increased 6.1% to $508.3 million for the year ended December 31, 2015 from an operating income of $478.9 million for the year ended December 31, 2014.

The following table sets forth information concerning the Company’s operating income on transportation by business segment for the years ended December 31, 2015 and 2014, respectively.

	Grupo TMM Operations Income on Transportation before loss from revaluation of vessels(1)(2) (in millions of Pesos) Year Ended December 31,
	2015			2014			Y2015 vs. Y2014 % Change
Ports and Terminals Operations	$	7.6		$	4.7			61.7	%
Maritime Operations		521.9			526.8			(0.9	)%
Logistics Operations		27.4			26.4			3.8	%
Shared Corporate Costs		(205.2	)		(180.3	)		(13.8	)%
Total	$	351.7		$	377.6			(6.9	)%

⁽¹⁾  Operating results are reported as Transportation profit in our Financial Statements included elsewhere in this Annual Report.

⁽²⁾  To better reflect Grupo TMM’s corporate costs, the Company modified the presentation of its corporate expenses as of December 31, 2015 and 2014, separating human resources and information technology costs to be allocated to each business unit in accordance with their use. Income on transportation includes the following allocated total administrative costs: In 2015: $15.4 million in Ports and Terminals Operations, $30.1 million in Maritime Operations and $199.1 million in shared corporate costs. Income on transportation includes the following allocated total administrative costs: In 2014: $11.2 million in Ports and Terminals Operations, $25.5 million in Maritime Operations and $175.1 million in shared corporate costs.

Ports and Terminals Operations

Ports and Terminals Operations’ operating income for the year ended December 31, 2015 increased to $7.6 million compared to $4.7 million for the year ended December 31, 2014, after deducting $15.4 million of administrative costs in 2015 compared to $11.2 million of such costs in 2014. This increase is mainly due to increased volumes in our shipping agencies business, which serviced a greater number of cruise calls in 2015 and by an increase in revenue at Tampico due to higher volumes. The increase was partially offset by a decrease in volumes in the automotive segment at Acapulco (48,593 units in 2015 vs. 66,293 units in 2014), which is a result of a decrease in the number of units exported to Asia, and a reduction in revenue at Tuxpan due to lower volumes.

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Maritime Operations

Maritime Operations’ operating income for the year ended December 31, 2015 decreased to $521.9 million compared to $526.8 million for the year ended December 31, 2014, after deducting $30.1 million of administrative costs in 2015 compared to $25.5 million of such costs in 2014. This decrease was mainly attributable to a reduction in PEMEX’s rates for offshore vessels as well as higher costs in harbor tugs. The decrease was partially offset by full utilization of product tankers in the last two quarters of 2015 and higher average rates for our chemical tanker services.

Logistics Operations

Logistics Operations operating income for the year ended December 31, 2015 increased to $27.4 million, compared to $26.4 million for the year ended December 31, 2014. This increase was mainly attributable to a decrease in operating loss in the automotive business, which was partially offset by increased costs for our maintenance and repair operations.

Net Financing Cost

	(in millions of Pesos) Year Ended December 31,
	2015		2014			Y2015 vs. Y2014 % Change
Interest income	$	21.4	$	23.6			(9.3	)%
Interest expense
Interest on trust certificates	$	618.8	$	660.4			(6.3	)%
Interest on other loans		95.3		94.9			0.4	%
Amortization of trust certificate placement expenses		75.2		74.2			1.3	%
Amortization of expenses associated with other loans		4.8		6.6			(27.3	)%
Other financial expenses		5.7		18.9			(69.8	)%
Subtotal	$	799.8	$	855.0			(6.5	)%
Gain (Loss) on exchange, net	$	15.7	$	(66.3	)		(123.7	)%
Net financing cost	$	762.7	$	897.7			(15.0	)%

Net financing cost recognized during the year ended December 31, 2015 was a $762.7 million debit compared to a $897.7 million debit incurred during the year ended December 31, 2014. The net financing cost in 2015 included a net exchange gain of $15.7 million and in 2014 included a net exchange loss of $66.3 million as a result of fluctuations in the relative value of the Peso against the Dollar. Interest expense decreased $41.2 million in 2015, mainly due to a decrease in variable interest rates. Interest payments on our trust certificates are due semi-annually in May and November. In 2015, we paid approximately $830.1 million of interest on our trust certificates and a principal prepayment of $240.0 million.

Other Income – Net

	(in millions of Pesos) Year Ended December 31,
	2015		2014		Y2015 vs. Y2014 % Change
Other income – net	$	186.0	$	356.8		(47.9	)%

Other income – net for the year ended December 31, 2015 was $186.0 million and included primarily $185.3 million of proceeds from the sale of subsidiaries, $4.9 million of loss on cancellation of construction in progress and $5.9 million of cancellation provision. Other income – net for the year ended December 31, 2014 was $356.8 million and included primarily $358.1 million of proceeds from the sale of subsidiaries, $16.0 million of loss on investment contribution and $16.7 million of cancellation provision.

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Expenses from Income Taxes

	(in millions of Pesos) Year Ended December 31,
	2015		2014		Y2015 vs. Y2014 % Change
Expenses from income taxes	$	698.5	$	4.7		(N/A	)

In the year ended December 31, 2015, following a thorough evaluation of our current business and future prospects, we made a business decision to cancel our deferred tax asset, which is mainly originated by tax loss carryforwards, because we are unlikely to generate sufficient future taxable income to justify retaining the asset. The cancellation of the tax loss carryforwards reduced our fourth-quarter and full-year 2015 net income by $695.2 million.

Non-controlling Interest

	(in millions of Pesos) Year Ended December 31,
	2015			2014		Y2015 vs. Y2014 % Change
Non-controlling interest	$	(2.3	)	$	2.4		(195.8	)%

Non-controlling interest decreased to $(2.3) million for the year ended December 31, 2015, from $2.4 million for the year ended December 31, 2014. The decrease is largely attributable to a decrease in income at the company that runs our Acapulco operations, in which we have a non-controlling interest.

Net Income (Loss) for the year attributable to stockholders of Grupo TMM

	(in millions of Pesos) Year Ended December 31,
	2015			2014			Y2015 vs. Y2014 % Change
Net Income (Loss) for the year attributable to stockholders of Grupo TMM	$	(1,016.6	)	$	(516.9	)		(96.7	)%

In the year ended December 31, 2015, we recognized a net loss of $1,016.6 million, or $9.9 per Share. In the year ended December 31, 2014, we recognized a net loss of $516.9 million, or $5.0 per Share.

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Fiscal Year ended December 31, 2014 Compared to Fiscal Year ended December 31, 2013

Revenues from operations for the year ended December 31, 2014 were $2,870.7 million compared to $2,838.5 million for the year ended December 31, 2013.

	Consolidated Transportation Revenues (in millions of Pesos) Years Ended December 31,
	2014		% of Net Revenues			2013		% of Net Revenues			Y2014 vs. Y2013 % Change
Ports and Terminals Operations	$	114.9		4.1	%	$	113.4		4.0	%		1.3	%
Maritime Operations		2,488.3		87.8	%		2,455.3		86.5	%		1.3	%
Logistics Operations		162.0		5.7	%		219.2		7.7	%		(26.1	)%
Other business(*)		67.2		2.4	%		50.6		1.8	%		32.8	%
Total	$	2,832.4		100.0	%	$	2,838.5		100.0	%		(0.2	)%

(*) Represents certain new businesses which are in development.

Ports and Terminals Operations

Ports and Terminals Operations’ revenues increased 1.3% to $114.9 million for the year ended December 31, 2014 compared to $113.4 million for the year ended December 31, 2013, and accounted for 4.1% of total net revenues. This increase is mainly due to increased volumes in our shipping agencies business, which serviced a greater number of cruise calls in 2014. The increase was partially offset by a decrease in volumes in the automotive segment in Acapulco (66,293 in 2014 vs. 76,557 in 2013), which was a result of a decrease in the number of units exported to Asia, and by a reduction of revenue at Tampico due to lower volumes.

Maritime Operations

Maritime Operations’ revenues increased 1.3% to $2,488.3 million in 2014 compared to $2,455.3 million in 2013 and accounted for 87.8% of total net revenues. This increase was mainly attributable to a 1.5% increase in revenue in our offshore vessels business due to higher average rates and the appreciation of the U.S. dollar against the Mexican peso, which increased the peso value of our dollar revenues; 7.1% revenue growth in our harbor tugs business due primarily to higher rates for our services at the port of Manzanillo; and a 5.4% revenue increase in our product tanker business due to one product tanker operating on time charter to PMI at a higher rate. Additionally, the shipyard business reported 61.6% higher revenue in 2014 compared to 2013, as revenue was strong throughout 2014, rising from $15.0 million in the first quarter, to $23.7 million in the second quarter, to $25.4 million in the third quarter before falling slightly to $21.4 million in the fourth quarter. However, these gains were partially offset by a 22.2% decline in chemical tanker revenues due to lower transport volumes.

Logistics Operations

Logistics Operations’ revenues decreased 26.1% to $162.0 million in 2014 compared to $219.2 million in 2013 and accounted for 5.4% of total net revenues. This decrease was mainly due to a decline in revenues from our automotive services business due to the loss of a client.

Income on Transportation

Income on transportation reflects revenues on transportation less operating costs and expenses. References to operating income in this Annual Report refer to income on transportation, plus/minus the effect of other income (expenses) as presented in the Financial Statements included elsewhere in this Annual Report.

Total costs and expenses for the year ended December 31, 2014 increased 9.1% to $2,710.4 million from $2,485.2 million for the year ended December 31, 2013. This increase was mainly attributable to an increase of 5.0%, or $30.6 million, in leases and other rents, and an increase of 46.1%, or $269.7 million, in depreciation, amortization and loss from revaluation of vessels. The increase in total costs and expenses in 2015 was partially offset by a decrease of 3.2%, or $6.6 million, in fuels, materials and accessories, 8.2%, or $30.8 million in contracted services, a decrease of 4.7%, or $31.3 million, in salaries, wages and employee benefits. Operating income increased 14.8% to $478.9 million for the year ended December 31, 2014 from an operating income of $417.3 million for the year ended December 31, 2013.

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The following table sets forth information concerning the Company’s operating income on transportation by business segment for the years ended December 31, 2014 and 2013, respectively.

	Grupo TMM Operations Income on Transportation before loss from revaluation of vessels(1)(2) (in millions of Pesos) Year Ended December 31,
	2014			2013			Y2014 vs. Y2013 % Change
Ports and Terminals Operations	$	4.7		$	0.2			2,250.0	%
Maritime Operations		526.8			517.8			1.7	%
Logistics Operations		26.4			40.7			(35.1	)%
Shared Corporate Costs		(180.3	)		(205.4	)		12.2	%
Total	$	377.6		$	353.3			6.9	%

⁽¹⁾  Operating results are reported as Transportation profit in our Financial Statements included elsewhere in this Annual Report.

⁽²⁾  To better reflect Grupo TMM’s corporate costs, the Company modified the presentation of its corporate expenses as of December 31, 2014 and 2013, separating human resources and information technology costs to be allocated to each business unit in accordance with their use. Income on transportation includes the following allocated total administrative costs: In 2014: $11.2 million in Ports and Terminals Operations, $25.5 million in Maritime Operations, $12.2 million in Logistics Operations and $175.1 million in shared corporate costs. Income on transportation includes the following allocated total administrative costs: In 2013: $7.8 million in Ports and Terminals Operations, $20.7 million in Maritime Operations, $12.2 million in Logistics Operations and $196.9 million in shared corporate costs.

Ports and Terminals Operations

Ports and Terminals Operations’ operating income for the year ended December 31, 2014 increased to $4.6 million compared to $0.2 million for the year ended December 31, 2013, after deducting $11.2 million of administrative costs in 2014 compared to $7.8 million of such costs in 2013. This increase is mainly due to increased volumes in our shipping agencies business, which serviced a greater number of cruise calls in 2014. The increase was partially offset by a decrease in volumes in the automotive segment in Acapulco (66,293 units in 2014 vs. 76,557 units in 2013), which is a result of a decrease in the number of units exported to Asia, and by a reduction of revenue at Tampico due to lower volumes.

Maritime Operations

Maritime Operations’ operating income for the year ended December 31, 2014 increased to $526.8 million compared to $517.8 million for the year ended December 31, 2013, after deducting $25.5 million of administrative costs in 2014 compared to $20.7 million of such costs in 2013. This increase was mainly attributable to decrease in operating loss at our product tanker business due to an increase revenue resulting from a higher rate mix. This increase was partially offset by (i) a 2.9% increase in costs at our offshore vessels business due to higher operating costs of the vessel “Island Monserrat” as she was upgraded to operate as a mud vessel, which was partially offset by a gain on sale of vessels of $22.5 million; and (ii) the June 2014 commencement of a two-year bareboat charter contract for the AHTS “Subsea 204”, which increased our chartering costs in our product tankers business. Operating income was also reduced by a 32.4% increase in costs at our harbor tugs business in 2014 as a result of having two tugs chartered for the entire year, which increased the fuel and hiring costs associated with this business.

Logistics Operations

Logistics Operations operating income for the year ended December 31, 2014 decreased to $26.4 million, compared to $40.7 million for the year ended December 31, 2013. This decrease was mainly attributable to increased costs at maintenance and repair operations, as well as an operating loss in the automotive business due to the loss of a client.

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Net Financing Cost

	(in millions of Pesos) Year Ended December 31,
	2014			2013			Y2014 vs. Y2013 % Change
Interest income	$	23.6		$	37.9			(37.7	)%
Interest expense
Interest on trust certificates	$	660.4		$	764.9			(13.7	)%
Interest on other loans		94.9			80.9			17.3	%
Interest rate CAP		—			(4.4	)		(100.0	)%
Amortization of trust certificate placement expenses		74.2			78.4			(5.4	)%
Amortization of expenses associated with other loans		6.6			10.8			(38.9	)%
Other financial expenses		18.9			12.2			54.9	%
Subtotal	$	855.0		$	942.8			(9.3	)%
Gain (Loss) on exchange, net	$	(66.3	)	$	4.4			(1,606.8	)%
Net financing cost	$	897.7		$	900.5			0.3	%

Net financing cost recognized during the year ended December 31, 2014 was a $897.7 million debit compared to a $900.5 million debit incurred during the year ended December 31, 2013. The net financing cost in 2014 included a net exchange loss of $66.3 million and in 2013 included a net exchange gain of $4.4 million as a result of fluctuations in the relative value of the Peso against the Dollar. Interest expense decreased $87.8 million in 2014, mainly due to a decrease in variable interest rates. Interest payments on our trust certificates are due semi-annually in February and August. In 2014, we paid approximately $702.2 million of interest on our trust certificates and a principal prepayment of $1.0 million.

Other Income – Net

	(in millions of Pesos) Year Ended December 31,
	2014		2013		Y2014 vs. Y2013 % Change
Other income – net	$	356.8	$	64.0		457.5	%

Other income – net for the year ended December 31, 2014 was $356.8 million and included primarily $358.1 million of proceeds from the sale of subsidiaries, $16.0 million of loss on investment contribution and $16.7 million of cancellation provision. Other income – net for the year ended December 31, 2013 was $64.0 million and included primarily $42.0 million of taxes recovered, net of expenses, $14.1 million of gain on property adjudication, $9.8 million of cancellation provision and $(13.1) million of reserve for prepayment and arbitration expenses.

Expenses from Income Taxes

	(in millions of Pesos) Year Ended December 31,
	2014		2013		Y2014 vs. Y2013 % Change
Expenses from income taxes	$	4.7	$	4.7		0	%

For each of the years ended December 31, 2014 and 2013, respectively, we incurred a tax expense of $4.7 million.

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Non-controlling Interest

	(in millions of Pesos) Year Ended December 31,
	2014		2013		Y2014 vs. Y2013 % Change
Non-controlling interest	$	2.4	$	5.0		(52.0	)%

Non-controlling interest decreased to $2.4 million for the year ended December 31, 2014, from $5.0 million for the year ended December 31, 2013. The decrease is largely attributable to a decrease in income at the company that runs our Acapulco operations, in which we have a non-controlling interest.

Net Income (Loss) for the year attributable to stockholders of Grupo TMM

	(in millions of Pesos) Year Ended December 31,
	2014			2013			Y2014 vs. Y2013 % Change
Net Income (Loss) for the year attributable to stockholders of Grupo TMM	$	(516.9	)	$	(556.4	)		7.1	%

In the year ended December 31, 2014, we recognized a net loss of $516.9 million, or $5.0 per Share. In the year ended December 31, 2013, we recognized a net loss of $556.4 million, or $5.4 per Share.

Critical Accounting Policies

Our Financial Statements have been prepared in accordance with the IFRS as issued by the IASB.

We have identified certain key accounting policies on which our financial condition and results of operations are dependent. These key accounting policies most often involve complex matters, may be based on estimates and involve a significant amount of judgment. In the opinion of our management, our critical accounting policies under IFRS are those related to revenue recognition, translation to a foreign currency, valuation of property and vessels, deferred income taxes, labor obligations and impairment of long-lived assets. For a full description of all of our accounting policies, see Note 3 to the accompanying Audited Consolidated Financial Statements contained elsewhere herein.

Revenue Recognition.The Company recognizes its revenues at the time at which the risks and benefits are transferred to the customer. In particular, revenues for vessels leased are recognized on a monthly basis according to the number of days elapsed and during the term of the corresponding contract, and in the case of revenue from voyages, when their duration is longer than two months, revenue is recognized proportionally as a shipment moves from origin to destination. Revenue from other services, including warehousing, are recognized when services are rendered. The costs and expenses for maritime, as well as those related to other logistics operations, are recognized in operations when the services are rendered, materials are consumed or as incurred.

Translation of Foreign Currency. For the years ended December 31, 2015, 2014 and 2013, the Company’s functional and reporting currency is the Mexican peso. Foreign currency transactions entered into by a Company subsidiary are translated into the functional currency of the subsidiary, using the spot exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the measurement of monetary items denominated in foreign currency at year-end exchange rates are recognized in profit or loss.

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Non-monetary items are not retranslated at year-end and are measured at historical cost (translated using the exchange rates at the transaction date), except for non-monetary items measured at fair value which are translated using the exchange rates at the date when fair value was determined.

In our consolidated financial statements, all the assets, liabilities, and operations of our subsidiaries that operate in a functional currency other than the Mexican peso are converted to pesos on consolidation.

Valuation of Land, Buildings and Vessels. The value of land and buildings used in the Company’s operations are determined by external professional appraisers every three years, and in some cases earlier if market factors indicate a significant change in the fair value of the property. The latest revaluation of the Company’s land and buildings took place in December 2013. The value of the Company’s vessels are generally determined using market values calculated by external professional appraisers, although certain vessels may be valued using other valuation techniques. Restatements of vessel values are conducted when the market values are found to differ significantly from their carrying value. The latest revaluation of the Company’s vessels took place as of December 31, 2015.

The Company began applying the revaluation model for vessels discussed above beginning January 1, 2014. Prior to that, the Company used the cost model to value its vessels. Management considers that the change to the revaluation model provides more reliable, relevant information about the values of its vessels and related transactions, as it allows the company to consider changes in circumstances that are likely to have a significant effect on a vessel’s value, including (i) changes in the price of oil and the demand for oil transportation vessels; and (ii) changes related to the recent Mexican Energy Reforms.

Any revaluation surplus derived from the valuation of land, buildings or vessels is recognized in our consolidated financial statements as part of “Other comprehensive income items” and forms part of “other capital components” in stockholders’ investment. A revaluation surplus is credited in income up to an amount equivalent to any revaluation write-down or impairment loss previously recognized income. Any excess is recognized in “Other comprehensive income items” and in stockholders’ investment in the item “Revaluation surplus”. Revaluation write-downs or impairment losses are recognized in “Other comprehensive income items” up to the amount previously recognized on that asset in stockholders’ investment in the item of “Revaluation surplus”. Any remaining decrease is recognized in income for the year. Any remaining balance of the revaluation surplus in stockholders’ investment at the time the Company disposes of the asset that gave rise to the surplus is reclassified to retained earnings. Moreover, any remaining balance of the revaluation surplus in stockholders’ investment may not be distributed to stockholders.

The Company recognizes the depreciation of land, buildings and vessels using the straight line method to write down the carrying value of the asset less its estimated residual value. As no finite useful life for land can be determined, the related carrying amounts are not depreciated.

Deferred Income Taxes.We apply the provisions of IAS 12, “Income Taxes.” The guidance under IFRS establishes that the recognition of net operating loss carryforwards should be based on the likelihood that such tax credits will be effectively used to offset future tax liabilities. In making such an evaluation we have to exercise significant judgment in estimating the level of future taxable income that we will generate and our projections take into consideration certain assumptions, some of which are under our control and others, which are not. Key assumptions include inflation rates, currency fluctuations and future revenue growth. If our assumptions are not accurate, the amount of tax credits we have recognized could be significantly impacted.

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. 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.”

Impairment of Long-Lived Assets. We review 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 asset’s carrying amount 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.

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Measurement of the impairment loss is based on the fair value of the asset which is determined based on management estimates and assumptions and by making use of available market data, evaluated in accordance with IAS 36. In evaluating the carrying value and useful lives of long-lived assets, we review indicators of potential impairment, such as the present value of discounted projected operating cash flows generated for the useful service life of the asset, asset sale and purchase values, business plans and overall market conditions. In determining the value in use, we estimate expected future cash flows from each cash-generated unit and determines a suitable discount rate in order to calculate the present value of those cash flows. The data used for impairment testing procedures are directly linked to our latest approved budget, adjusted as necessary to exclude the effects of future reorganizations and asset enhancements. Discount factors are determined individually for each cash-generating unit and reflect current market assessments of the time value of money and asset-specific risk factors.

In assessing impairment, we determine the recoverable value for each asset or cash-generating unit based on the expected future cash flows and determine an adequate interest rate to use in calculating the present value of these cash flows. The uncertainty in the estimate is related to our assumptions regarding our future operating results and our determination of a suitable discount rate. Although we believe that the assumptions we incorporate into our calculations are reasonable and appropriate, such assumptions are unavoidably subjective.

Financial instruments.Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the financial instrument. Financial assets are derecognized when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and all substantial risks and rewards are transferred. A financial liability is derecognized when it is extinguished, discharged, cancelled or expires. Financial assets and financial liabilities are measured initially at fair value adjusted by transactions costs, except for financial assets and financial liabilities carried at fair value through profit or loss, which are measured initially at fair value. Financial assets and financial liabilities are measured subsequently as described below.

Financial assets

For the purpose of subsequent measurement, financial assets other than those designated and effective as hedging instruments are classified into the following categories upon initial recognition:

• loans and receivables

• financial assets at fair value through profit or loss

• held-to-maturity investments

• available-for-sale financial assets.

The category determines subsequent measurement and whether any resulting income and expense is recognized in profit or loss or in other comprehensive income. All financial assets except for those at fair value through profit or loss are subject to review for impairment at least at each reporting date. Financial assets are impaired when there is any objective evidence that a financial asset or a group of financial assets is impaired. Different criteria to determine impairment are applied for each category of financial assets, which are described below. All income and expenses relating to financial assets that are recognized in profit or loss are presented within “finance costs,” “finance income” or “other financial items,” except for impairment of trade receivables which is presented within “other expenses.”

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Financial liabilities

The Company’s financial liabilities include borrowings, trade and other financial liabilities are measured subsequently at amortized cost using the effective interest method, except for financial liabilities held for trading or designated at fair value through profit or loss, that are carried subsequently at fair value with gains or losses recognized in profit or loss.

Derivative financial instruments

A specific accounting treatment is required for derivatives designated as hedging instruments in cash flow hedge relationships. To qualify for hedge accounting, the hedging relationship must meet several strict conditions with respect to documentation, probability of occurrence of the hedged transaction and hedge effectiveness. All other derivative financial instruments are accounted for at fair value through profit or loss. For the reporting periods under review, the Company has entered into a hedging derivative financial instrument for the next two years. This instrument has been entered into to mitigate interest rate risk arising from the trust certificates issued under the Company’s Trust Certificates Program. All derivative financial instruments used for hedge accounting are recognized initially at fair value and reported subsequently at fair value in the statement of financial position. To the extent that the hedge is effective, changes in the fair value of derivatives designated as hedging instruments in cash flow hedges are recognized in other comprehensive income and included within the cash flow hedge reserve in equity. Any ineffectiveness in the hedge relationship is recognized immediately in profit or loss. If a forecast transaction is no longer expected to occur or if the hedging instrument becomes ineffective, any related gain or loss recognized in other comprehensive income is transferred immediately to profit or loss.

Fair value measurement for non-financial assets

The non-financial assets and liabilities measured at fair value in the statement of financial position are grouped into three levels of fair value hierarchy. The three levels are defined based on the observability of relevant data for the measuring, as follows:

• Level 1: quoted prices (without adjustment) in active markets for identical assets and liabilities;

• Level 2: data other than the quoted prices included in Level 1 that are observable for the asset and liability, either directly or indirectly;

• Level 3: non-observable data for the asset or liability.

The fair value for the Company’s principal vessels and properties is estimated based on appraisals prepared by independent naval engineers specializing in sea vessels and artifacts, and also independent, qualified real estate appraisers. The important information and assumptions are prepared in close collaboration with management.

The fair values for tanker and specialized vessels are estimated based on revenue that capitalizes the estimated revenue cash flows from the leasing of vessels net of operating costs projected, using an appropriate discount rate that reflects the required performance for similar assets. Cash flows are calculated based on the average of international charter rates and operating costs (including maintenance), and also the historical utilization level.

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Discontinued operations

Results for discontinued operations

A discontinued operation is a component of the entity that has been disposed of, or has been classified as held for sale, and:

• Represents a significant separate line of business or a geographic area of operations;

• Is part of a specific coordinated plan to dispose of a significant separate line of business; or

• Is a subsidiary acquired solely for the purpose of sale.

The gains or losses on discontinued operations, including components of gains or losses from previous years are reported as a single amount on the consolidated statement of operations. This amount, which includes the gains or losses after taxes for discontinued operations and the gains or losses after taxes resulting from measuring and disposing of assets classified as held for sale, are discussed in more detail in Note 19 to the accompanying Audited Consolidated Financial Statements contained elsewhere herein.

The disclosures for discontinued operations in the previous year are related to all the operations that have been discontinued as of the close date for the last period reported.

Recent Accounting Pronouncements IFRS

New and revised standards that are effective for annual periods beginning on or after January 1, 2015

A number of new and revised standards are effective for annual periods beginning on or after January 1, 2015. Information on these new standards is presented below.

Defined Benefit Plans: Employee Contributions (Amendments to IAS 19)

These amendments, which came into mandatory effect for the first time in 2015:

• clarify the requirements of IAS 19 relating to contributions from employees or third parties; and

• introduce a practical expedient such that contributions that are independent of the number of years of service may be treated as a reduction of service cost in the period in which the related service is rendered.

These amendments have no material impact on the Company’s financial results or position. Accordingly, the Company has made no changes to its accounting policies in 2015 as a result of these amendments to IAS 19.

Standards, amendments and interpretations to existing standards that are not yet effective and have not been adopted early by the Company

As of the date of this annual report, certain new standards, and amendments to existing standards have been published by the IASB that are not yet effective, and have not been adopted early by the Company. Information on those expected to be relevant to the Company’s consolidated financial statements is provided below.

Management anticipates that all relevant pronouncements will be adopted in the Company’s accounting policies for the first period beginning after the effective date of the pronouncement. New standards, interpretations and amendments not either adopted or listed below are not expected to have a material impact on the Company’s consolidated financial statements.

IFRS 9 “Financial Instruments” (2014)

The IASB recently released IFRS 9 ‘Financial Instruments’ (2014), representing the completion of its project to replace IAS 39 “Financial Instruments: Recognition and Measurement.” The new standard introduces extensive changes to IAS 39’s guidance on the classification and measurement of financial assets and introduces a new “expected credit loss” model for the impairment of financial assets. IFRS 9 also provides new guidance on the application of hedge accounting.

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Company management has yet to assess the impact of IFRS 9 on the Company’s consolidated financial statements. The new standard is required to be applied for annual reporting periods beginning on or after January 1, 2018.

IFRS 15 “Revenue from Contracts with Customers”

IFRS 15 presents new requirements for the recognition of revenue, replacing IAS 18 “Revenue”, IAS 11 “Construction Contracts”, and several revenue-related Interpretations. The new standard establishes a control-based revenue recognition model and provides additional guidance in many areas not covered in detail under existing IFRSs, including how to account for arrangements with multiple performance obligations, variable pricing, customer refund rights, supplier repurchase options, and other common complexities.

IFRS 15 is effective for reporting periods beginning on or after January 1, 2018. Company management has begun to assess the impact of IFRS 15 on the Company’s consolidated financial statements, but has not yet quantified the results of its assessment.

IFRS 16 “Leases”

IFRS 16 requires lessees to record the right to use an asset “on its balance sheet” and a liability for the lease. However, this standard provides exceptions on that accounting for short-term leases and assets in immaterial amounts. It further modifies the definition of lease and sets forth the requirements on other issues such as elements that form part of the lease, variable payments and option periods. Moreover, it modifies the journal entry of leaseback sales contracts and adds new disclosure requirements.

IFRS 16 goes into effect for annual periods beginning on or after January 1, 2019. Company management has begun to assess the impact of IFRS 16 on the Company’s consolidated financial statements, but has not yet quantified the results of its assessment.

Liquidity and Capital Resources

Our business is capital intensive and requires ongoing expenditures for, among other things, improvements to ports and terminals, infrastructure and technology, capital expenditures for vessels and other equipment, leases and repair of equipment and maintenance of our vessels. Our principal sources of liquidity consist of cash flows from operations, existing cash balances, sales of assets and debt financing.

Grupo TMM is primarily a holding company and conducts the majority of its operations, and holds a substantial portion of its operating assets through numerous direct and indirect subsidiaries. As a result, it relies on income from dividends and fees related to administrative services provided from its operating subsidiaries for its operating income, including the funds necessary to service its indebtedness.

In addition, the Company notes that its financial statements present its debt obligations on a consolidated basis; however 98.8% of the Company’s debt is held directly by its subsidiaries, each of which services its own debt out of its operating income. Management believes that these factors will enable the Company to remain current in its debt repayments notwithstanding the Mexican Law restriction on the distribution of profits by subsidiaries described below.

As of December 31, 2015, the respective debt obligations of each of the Company’s subsidiaries were as follows:

	(in millions of Pesos)
TMM División Marítima, S. A. de C. V.	$	9,752.6
TMM Parcel Tankers, S.A. de C.V.		333.7
Transportación Maritima Mexicana, S.A. de C.V.		324.2
Grupo TMM, S.A.B.		155.0
TMM Logistics, S.A de C.V.		114.7
Total	$	10,680.2

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Under Mexican law, dividends from our subsidiaries, including a pro rata share of the available proceeds of our joint ventures, may be distributed only when the shareholders of such companies have approved the corresponding financial information, and none of our subsidiaries or joint venture companies can distribute dividends to us until losses incurred by such subsidiary have been recouped. In addition, at least 5% of profits must be separated to create a reserve(fondo de reserva)until such reserve is equal to 20% of the aggregate value of such subsidiary’s capital stock (as calculated based on the actual nominal subscription price received by such subsidiary for all issued shares that are outstanding at the time).

As of March 31, 2016, Grupo TMM’s total debt amounted to $10,802.2 million, which includes $9,923.3 million under our Trust Certificates Program, $754.9 million of bank debt owed to several different banks and $124.0 million owed to non-institutional lenders; of this debt, $524.6 million is short-term debt, and $10,277.6 million is long-term debt. Under IFRS, transaction costs in connection with financings are required to be presented as debt.

As of December 31, 2015, Grupo TMM’s total debt amounted to $10,680.2 million, which includes $9,752.6 million under our Mexican Peso-Denominated Trust Certificates Program, and $788.1 million of bank debt owed to several different banks; and $139.5 million that non-institutional creditors are owed; of this debt, $684.7 million was short-term debt, and $9,995.5 million was long-term debt.

As of December 31, 2015 and March 31, 2016, we were in compliance with all of the restrictive covenants contained in our financing agreements, except as described in footnote (b) to “Other financing” at Note 16 to the accompanying Audited Consolidated Financial Statements contained elsewhere herein.

Our total shareholders’ equity in 2015, including non-controlling interest in consolidated subsidiaries, was $431.8 million, resulting in a debt-to-equity ratio of 24.7.

On January 11, 2008, in order to refinance the acquisition of ADEMSA, Grupo TMM closed a financing agreement in the amount of US$8.5 million (approximately $147.4 million) with a term of seven years, at a fixed rate of 8.01% with semi-annual payments of principal starting on January 2010 and semi-annual interests payments. The Company continues to negotiate with the bank to restructure the amortization schedule, in order to get better cash flow conditions.

In June 2009, Grupo TMM (through its subsidiary TMM División Marítima, S.A. de C.V.) obtained a line of credit in dollars for working capital and/or current accounts for US$25.0 million (approximately $433.5 million) at a variable rate. This line of credit matured in June 2015. See “—Other Debt.”

On July 29, 2010, Grupo TMM issued trust certificates under the fourth issuance of its Trust Certificates Program in the amount of $10.5 billion, at Mexico’s interbank equilibrium interest rate, TIIE, plus 245 basis points. The proceeds from the fourth issuance have been used to prepay the previous three issuances, thereby consolidating the debt under the program, and to refinance other vessel financings, to fund required cash reserves and to pay issuance-related expenses. See Item 4. “Information on the Company — Recent Developments — Mexican Peso-Denominated Trust Certificates Program.

In November 2013, Grupo TMM (through its subsidiary Transportación Marítima Mexicana, S.A. de C.V.) obtained a line of credit in US dollars of up to US$10.8 million (approximately $187.3 million) to finance the acquisition of the vessel “Subsea 88” through a capital lease at a fixed rate with monthly principal and interest payments. See “—Capital Leases” below.

As of March 31, 2016, we had net working capital (current assets less current liabilities) of $1,405.8 million. We had net working capital of $1,045.6 million, $790.7 million, and $428.6 million as of December 31, 2015, December 31, 2014, and December 31, 2013, respectively. The increase in net working capital from December 31, 2015 to March 31, 2016 was primarily attributable to an increase in accounts receivable. The increase in net working capital from December 31, 2014 to December 31, 2015 was primarily attributable to a reduction in short term debt resulting from repayment of a loan from Bancomext and other bank debt. We continue to look for ways to improve our debt profile in order to reduce our financing costs and improve the flows available for investment. As part of this effort, we are considering whether to capitalize up to 40% of the interest payable under our Trust Certificates Program and allocate the available funds to our vessel expansion program.

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Information on Cash Flows

Summary cash flow data for the years ended December 31, 2015, 2014 and 2013 is as follows:

	Years Ended December 31,
	2015			2014			2013
	(in thousands of Pesos)
Operating activities	$	611,972		$	755,069		$	882,323
Investing activities		790,884			(122,790	)		(208,686	)
Financing activities		(1,164,083	)		(800,904	)		(868,085	)
Currency exchange effect on cash		63,540			16,664			430
Net increase (decrease) in cash and cash equivalents		302,313			(151,961	)		(194,018	)
Cash and cash equivalents at beginning of year		743,046			895,007			1,089,025
Cash and cash equivalents at end of year	$	1,045,359		$	743,046		$	895,007

For the year ended December 31, 2015, the Company’s consolidated cash position increased by approximately $302.3 million from the year ended December 31, 2014. This increase was mainly attributable to $790.9 million generated from the sale of Terminal Marítima de Tuxpan, which was partially offset by the payment of debt under the Trust Certificates Program and other loans amounting to $1,164.1 million.

For the year ended December 31, 2014, the Company’s consolidated cash position decreased by approximately $152.0 million from the year ended December 31, 2013. This decrease was mainly attributable to an $800.9 million payment of debt under the Trust Certificates Program and others loans, and $122.8 million of investments in fixed assets.

For the year ended December 31, 2013, the Company’s consolidated cash position decreased by approximately $194.0 million from the year ended December 31, 2012. This decrease was mainly attributable to an $868.1 million payment of debt under the Trust Certificates Program and others loans, and $208.7 million of investments in fixed assets.

Our Cash Flows from Operating Activities

Net cash flows provided by operating activities amounted to $612.0 million in the year ended December 31, 2015 compared to $755.1 million in the year ended December 31, 2014. This decrease was mainly attributable to an increase in accounts receivable for our maritime services and a decrease in balance due to suppliers.

Net cash flows provided by operating activities amounted to $755.1 million in the year ended December 31, 2014 compared to $882.3 million in the year ended December 31, 2013. This decrease was mainly attributable to start-up costs associated with the new containerized cargo cabotage service; a 2.9% increase in costs at our offshore vessels business due to higher operating costs of the vessel “Island Monserrat” as she was upgraded to operate as a mud vessel; and the June 2014 commencement of a two-year bareboat charter contract for the AHTS “Subsea 204”, which increased our chartering costs in our product tankers business. Operating income was also reduced by a 32.4% increase in costs at our harbor tugs business in 2014 as a result of having two tugs chartered for the entire year, which increased the fuel and hiring costs associated with this business.

The following table summarizes cash flows from operating activities for the periods indicated:

	Years Ended December 31,
	2015			2014			2013
	(in thousands of Pesos)
Loss before provision for income taxes	$	(254,481	)	$	(418,831	)	$	(483,252	)
Depreciation and amortization and other amortization		747,253			937,090			670,439
Loss (gain) on sale of fixed assets—net		26,308			(23,040	)		(9,240	)
Sale of subsidiaries		(171,505	)		(342,088	)		(8,078	)
Gain on adjudication of property		—			—			(14,063	)
Provision for interests on debt		714,105			755,226			845,723
Gain (loss) from exchange differences		46,273			58,200			(1,277	)
Total changes in operating assets and liabilities		(495,981	)		(211,488	)		(117,929	)
Net cash provided by operating activities	$	611,972		$	755,069		$	882,323

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Our Cash Flows from Investing Activities

Net cash provided by investing activities for the year ended December 31, 2015 was $790.9 million, which included $892.8 million generated from the sale of Terminal Marítima de Tuxpan, operating equipment and discontinued businesses, which was partially offset by the use of $101.9 million for the acquisition of vessels and operating equipment. Net cash used in investing activities for the year ended December 31, 2014 was $122.8 million, which included $227.2 million for the acquisition of vessels and operating equipment, which was partially offset by the sale of operating equipment and discontinued business for $104.4 million. Net cash used in investing activities for the year ended December 31, 2013 was $208.7 million, which included $290.8 million for the acquisition of vessels and operating equipment, which was partially offset by the sale of operating equipment and discontinued business for $43.9 million.

See “— Capital Expenditures and Divestitures” below for further details of capital expenditures and divestitures relating to the years ended December 31, 2015, 2014 and 2013, respectively.

Our Cash Flows from Financing Activities

For the year ended December 31, 2015, cash used by financing activities amounted to $1,164.1 million, which resulted primarily from the payment of debt under the Securitization Facility, our Trust Certificates Program and others loans.

For the year ended December 31, 2014, cash used by financing activities amounted to $800.9 million, which resulted primarily from the payment of debt under the Securitization Facility, our Trust Certificates Program and others loans.

For the year ended December 31, 2013, cash used by financing activities amounted to $868.1 million, which resulted primarily from the payment of debt under the Securitization Facility, our Trust Certificates Program and others loans.

Business Plan

We are focused on consolidating our Maritime Operations division, which is our principal source of income and our most profitable division, to better enable us to grow and strengthen our financial position through a strategy that empowers the expansion of our operations through multiple projects and objectives. These projects seek to combine the elements that can enable us to capture the opportunities that the recent Mexican Energy Reforms are expected to generate, with the ultimate goal of creating value for our shareholders.

Maritime Operations. In order to increase the value of our Maritime Operations division, we are working on alternatives that allow us to exchange debt for equity in order to reduce our liabilities and grow with cash generated from operations; additionally we are seeking to exploit the division’s operating capabilities to develop the business of operating assets owned by third parties. With the above, we intend to define ourselves as a shipping company focused on Mexico with special attention to the energy sector.

Ports and Terminals Operations. We continue to work with potential investors on the development of an automobile terminal and a liquid oils terminal in the port of Tuxpan, Veracruz, which will allow us to service the existing and growing demand of foreign trade via the Gulf of Mexico. The port of Tuxpan is the closest port to Mexico City and the central Mexican states, which represent over 50% of Mexico’s GDP. In order to capitalize on the growth potential of the Mexican Energy Reforms’ refined products liberalization, we are working on the development of port facilities and storage terminals in order to meet the future demand for gasoline and diesel imports. As part of our plan to extend our ports operations, in 2014 we commenced operations at a citrus juice facility in Papantla, Veracruz, with the initial products consisting of concentrated orange juice. The project, which

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began operations through a strategic alliance, will involve the complete supply chain (extraction, storage, land and sea transportation) and includes two stages, the second of which will involve us operating the facility to further add vessels operations. Regarding our operation at Acapulco, we are collaborating with the respective authorities in order to generate additional cruise activity.

Logistics Operations. We are looking to develop the automotive and food logistics market in all areas with emphasis on “just-in-time” inventory planning, subassembly and management of cars and container yards through a partnership with an international technology operator. In addition, during 2016 we intend to divest our bonded warehouse business, which we expect will contribute to improving our operating results.

Corporate Expenses. As part of our continuous improvement plan, we aim to optimize the size of our corporate staff consistent with the implementation of the plans described above.

Our Ability to Continue as a Going Concern

Our Financial Statements for the year ended December 31, 2015 includes an explanatory note describing the existence of substantial doubt about our ability to continue as a “going concern.” Such note observes that (i) the continuation of the Company as an ongoing business depends on our compliance with our financial obligations on a regular basis, (ii) to be successful in our five-year growth plan and capitalize on the demand for services arising from the recent Mexican Energy Reforms and (iii) the Financial Statements do not include any adjustment over the assets or liabilities that could be necessary if the company is not able to continue as an ongoing business.

The maritime business has been improving in its performance in recent years, consolidating as our most profitable business. In addition, Company management continues to work on the implementation of the five-year growth plan, which includes the following projects and their current status:

We retain a significant portion of land in Tuxpan and continue to develop projects associated with that region, such as a liquid oils terminal, an automobile terminal and a citrus juice export terminal.

In addition, in 2016 we intend to finalize the divestiture of our bonded warehouse business. We expect this sale will help improve our operating results by allowing us to better focus our efforts on our maritime business and the development of new projects related to the recent Mexican Energy Reforms. We are particularly focused on the mid-stream segments such as transportation, terminals, storage and distribution of hydrocarbons, where the Company has competitive advantages and/or extensive experience. We believe that a focus on the above areas will enable us to diversify our current customer base and sources of income.

Through strategic alliances, sales of land and other non-productive assets, and new financing arrangements, we intend to obtain the necessary resources to improve and expand our fleet of offshore vessels, allowing us to capitalize on the growing demand for deep water exploration in Mexico resulting from the recent Mexican Energy Reforms.

Finally, we are in the process of improving our debt profile through the capitalization of up to 40% of the Trust Certificates, thereby reducing our financing costs and improving cash flows.

The successful implementation of these projects in the short and medium term will allow us to expand and diversify our customer portfolio, grow with high yield assets and operations, significantly improving our capital structure and generating increased value for our stockholders.

See Item 3. “Key Information – Risk Factors – Risks Relating to Our Business” relating to our financial condition in recent years and other factors which raise substantial doubt about our ability to continue as a going concern and could result in our dissolution under Mexican Corporate Law.

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Capital Expenditures and Divestitures

The following tables set forth our principal capital expenditures and divestitures during the last three years:

Our Principal Capital Expenditures for the Last Three Years

(in millions of Pesos)

	Years Ended December 31,
	2015 (a)		2014 (b)		2013 (c)
Capital Expenditures by Segment: Ports and Terminals Operations	$	3.4	$	13.9	$	11.3
Maritime Operations		78.5		184.3		252.3
Logistics Operations		—		—		2.7
Corporate		20.0		29.0		24.5
Total	$	101.9	$	227.2	$	290.8

(a) In 2015, capital expenditures included: (i) Ports and Terminals Operations: $0.8 million in acquisition and equipment improvements and $2.6 million in construction in process for the expansion and maintenance of port and terminal facilities; (ii) Maritime Operations: $56.0 million in acquisition and equipment improvements and $22.5 million in construction projects; and (iii) Corporate: $20.0 million in fixed assets and other strategic corporate projects.

(b) In 2014, capital expenditures included: (i) Ports and Terminals Operations: $10.8 million in acquisition and equipment improvements and $3.1 million in construction in process for the expansion and maintenance of port and terminal facilities; (ii) Maritime Operations: $55.0 million in acquisition and equipment improvements and $129.3 million in construction projects; and (iii) Corporate: $29.0 million in fixed assets and other strategic corporate projects.

(c) In 2013, capital expenditures included: (i) Ports and Terminals Operations: $11.3 million in construction in process for the expansion and maintenance of port and terminal facilities; (ii) Maritime Operations: $159.5 million in acquisition and equipment improvements and $92.8 million in construction projects; (iii) Logistics Operations: $2.0 million in construction projects and $0.7 million in operating equipment and related fixed assets; and (iv) Corporate: $24.5 million in fixed assets and other strategic corporate projects.

Our Principal Capital Divestitures for the Last Three Years

(in millions of Pesos)

	Years Ended December 31,
	2015 (a)		2014 (b)		2013 (c)
Capital Divestitures:
Sale of shares of subsidiaries	$	829.9	$	25.5	$	64.9
Other assets		62.9		79.0		17.2
Total	$	892.8	$	104.5	$	82.1

(a) In 2015, capital divestitures included $62.9 million from the sale of vessels and terminal equipment and completion of the sale of the Company’s subsidiary Terminal Marítima de Tuxpan, S.A. de C.V.

(b) In 2014, capital divestitures included $79.0 million from the sale of vessels, shipyard and ground transportation equipment.

(c) In 2013, capital divestitures included $17.2 million from the sale of vessels and ground transportation equipment.

Capital Leases

As of December 31, 2015, the Company had two capital lease obligations.

In November 2013, Grupo TMM (through its subsidiary Transportación Marítima Mexicana, S.A. de C.V.) entered into an agreement with “FTAI Subsea 88 Ltd”, a subsidiary of Fortress, to obtain a line of credit for 10 years in US dollars of up to US$10.8 million (approximately $187.3 million) to finance the acquisition of the vessel “Subsea 88” through a capital lease, at a fixed rate of 15.9% per annum, with monthly principal and interest payments. As of December 31, 2015, the outstanding balance was US$10.2 million (approximately $176.9 million).

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In December 2012, Grupo TMM entered into an agreement with “Value Arrendadora, S.A. de C.V.” to obtain capital lease financing for 4 years in Mexican Pesos in an amount of $1.8 million to finance the acquisition of transportation assets, at a fixed rate of 14.23% per annum, with monthly principal and interest payments. As of December 31, 2015, the outstanding balance was $0.4 million.

Transportation Equipment and Other Operating Leases

We lease transportation and container-handling equipment, our corporate office building and other assets under agreements which are classified as operating leases. The terms of these lease agreements vary from 1 to 15 years and contain standard provisions for these types of operating agreements.

Purchase of Two Parcel Tankers

On May 25, 2007 the Company purchased the M/T “Maya” and purchased the M/T “Olmeca” on June 19, 2007. We entered into a 10-year line of credit with DVB Bank SE (formerly DVB Bank AG) in an aggregate amount of US$52.5 million (approximately $910.3 million) to finance the acquisition of these parcel tankers. Principal and interest under this loan was payable on a monthly basis. Interest was payable at a weighted average rate of 7.61% per annum. On April 4, 2011, the Company entered into an agreement with the bank to restructure this loan through: (i) full prepayment of the junior loan tranche in an amount totaling US$6.5 million (approximately $112.7 million), including US$0.7 million (approximately $12.1 million) in breakage costs; (ii) drawing of a new tranche in the amount of US$4.0 million (approximately $69.4 million) with monthly interest payments and a balloon principal payment due upon maturity in June 2017; and (iii) opening of a bridge tranche with monthly drawings of up to US$3.5 million (approximately $60.7 million) over the next 24 months to reduce the principal payments due on the existing senior loan tranche. Both of the new tranches are at a variable rate of the AIR (Actual Interbank Rate) plus 400 basis points, and the Company will pay principal on the bridge tranche beginning in April 2013 on a quarterly basis until maturity in June 2017. As of May 31, 2011, the weighted average rate of interest on the restructured loan was 6.70% per annum. This agreement allows the Company to improve the amortization schedule of this loan facility and reduce the related financial expenses.

Mexican Peso-Denominated Trust Certificates Program

On April 30, 2007, at the shareholders’ meeting of the Company, our shareholders authorized the establishment of a program for the issuance of trust certificates, which are securities secured by trust assets and denominated in Mexican Pesos, for up to an amount of $9.0 billion. The proceeds from the sale of these certificates will be used by us to refinance our existing bank financings of our vessel fleet, and to finance the acquisition of additional vessels as contemplated by our expansion program.

We closed our first, second and third issuances of trust certificates under the program on July 19, 2007, April 30, 2008, and July 1, 2008, in an amount of $3.0 billion, $1.55 billion, and $4.39 billion, respectively. Our first issuance was used primarily to refinance existing vessel indebtedness. Our second issuance was used to refinance vessels indebtedness and the acquisition of new vessels and our third issuance was mainly used to finance the acquisition of new and used vessels. On July 29, 2010, we closed our fourth issuance of trust certificates for $10.5 billion at Mexico’s interbank equilibrium interest rate, TIIE, plus 245 basis points. The proceeds from the fourth issuance have been used primarily to prepay the previous three issuances, thereby consolidating the debt under the program, and to refinance other vessel financings. As of December 31, 2015, the outstanding balance was $10.539 billion.

In accordance with the program, the Company had the right to capitalize interest for the first five years as per the following:

Year	Capitalization %			Interest Payment %
1st and 2nd		60	%		40	%
3th and 4th		50	%		50	%
5th		25	%		75	%

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In August 2012 and with the authorization of the Trust Committee, the Company elected to capitalize 60% of the accrued interest to dedicate such resources to a vessel substitution program. During 2013 and 2014 the Company elected not to capitalize any interest on the trust certificates, choosing instead to pay 100% of the accrued interest. In February and November 2015 and with the authorization of the Trust Committee, the Company elected to capitalize 25% and 23% of the corresponding accrued interest.

Acquisition of Transportation Units

On June 4, 2008, the Company, through its subsidiary Lacto Comercial Organizada, S.A. de C.V. (“Lacorsa”), entered into a loan facility in Mexican pesos with Daimler Financial Services Mexico, S. de R.L. de C.V. (formerly known as DC Automotriz Servicios, S. de R.L. de C.V.) (“Daimler”) for the acquisition of 31 transportation units for $19.8 million at a fixed rate of 12.85%. Principal was payable in 60 consecutive monthly payments plus accrued interest on the outstanding balance, maturing in June 2013.

On September 26, 2008, the Company, through Lacorsa, entered into a loan facility in Mexican pesos with Daimler for the acquisition of 8 transportation units for $5.2 million at a fixed rate of 13.56%. Principal was payable in 60 consecutive monthly payments plus accrued interest on the outstanding balance, maturing in September 2013. In June 2010, both loans were restructured into a single loan for $21.7 million at a fixed rate of 14.8%. Principal was payable in 60 consecutive monthly payments plus accrued interest on the outstanding balance, maturing in May 2015.

On December 1, 2010, through Lacorsa we entered into a debt recognition and restructuring agreement relating to the two loans with Daimler for $96.7 million at a variable rate of the 28-day TIIE plus 3.5 percentage points. Principal was payable in 72 consecutive monthly payments plus accrued interest on the outstanding balance starting January 1, 2011 and maturing in December 2016.

On December 3, 2013, following previous negotiations, we entered into another debt recognition and restructuring agreement with Daimler for $62.9 million at a variable rate of the 28-day TIIE plus 6.0 percentage points. Principal is payable in 72 consecutive monthly payments plus accrued interest on the outstanding balance starting January 1, 2014 and maturing in December 2019.

Other Debt

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 line of credit in dollars for working capital and/or current accounts for US$25.0 million (approximately $433.5 million) at a variable rate, maturing in June 2015. Monthly interest payments are due on outstanding balances and principal is due at maturity. Amounts may be drawn in both dollars and pesos with the possibility of making prepayments on principal without penalty. The Company made 3 draws under this facility for an aggregate amount of approximately US$17.9 million (approximately $310.4 million). The Company fully prepaid the drawn amounts in July 2010, April 2012 and June 2012, respectively.

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 second line of credit in dollars for working capital and/or current accounts for US$15.0 million (approximately $260.1 million) at a variable rate, maturing in June 2015. Monthly interest payments are due on outstanding balances and principal is due at maturity. Amounts may be drawn in both dollars and pesos with the possibility of making prepayments on principal without penalty. The balance of both facilities, together, cannot be over US$25.0 million (approximately $433.5 million) or its equivalent in Mexican pesos. In November 2010, a first draw was made on this second line of credit for $115.0 million at a variable rate of the 28-day TIIE plus 425 basis points, with interest payable monthly. t. In October 2011, a second draw was made on the second line of credit for $65.7 million at a variable rate of the 28-day TIIE plus 425 basis points, with monthly interest payments. The Company fully prepaid the drawn amounts in January 2014 and November 2014, respectively.

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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 third line of credit in dollars for working capital and/or current accounts for US$15.0 million (approximately Ps. 260.1 million) at a variable rate, maturing in June 2015. Monthly interest payments are due on outstanding balances and principal is due at maturity. Amounts may be drawn in both dollars and pesos with the possibility of making prepayments on principal without penalty. The balance of the three facilities, together, cannot be over US$25.0 million (approximately Ps. 433.5 million) or its equivalent in Mexican pesos. In August 2012, a first draw was made on this third line of credit for $161.6 million at a variable rate of the 28-day TIIE plus 425 basis points, with interest payable monthly. The Company fully prepaid the drawn amount in May 2015.

In September 2011, to strengthen the agricultural activities of ADEMSA, the Company decided to take advantage of the line of credit held by Proserpec Servicios Administrativos, S.A.P.I. de C.V. with the bank, to secure a loan for $42.9 million. Therefore, considering the prepayment and this new draw on the line of credit, on September 30, 2011, the loans were combined into one for approximately $80.4 million at a variable rate of the 28-day TIIE plus 500 basis points, with monthly payments of principal and interest, and maturing September 2016. On September 30, 2014, using a new line of credit by the bank, the balance on the principal for this draw and interests was prepaid in full.

In January 2011, to improve the amortization schedule of the Receivables Securitization Facility and its cancelation, the Company decided to secure two lines of credit through its subsidiary Transportación Marítima Mexicana, S.A. de C.V. with two private investments, each of the credits for US$3.0 million (approximately $52.0 million). The loan accrues interest at a fixed rate of 11.25%, with semi-annual interest and principal payments, a two-year grace period for principal payments, and maturing January 2016. As of December 31, 2015 the outstanding balance of both credits was US$6.0 million (approximately $104.0 million). The Company recently received a reschedule of the balance that extends the maturity date to January 2017.

In November 2011, the Company decided to enter into two loan facilities to strengthen the agricultural activities of ADEMSA, through a subsidiary with INPIASA, S.A. de C.V. The first for $15.7 million at a variable rate of the 28-day TIIE plus 450 basis points, with monthly payments of principal and interest, and maturing August 2021; the second for $4.2 million at a variable rate of the 28-day TIIE plus 450 basis points, with monthly payments of principal and interest, and maturing October 2016. The effective rate for both loans as of December 31, 2015 was 7.8175%, with a total outstanding balance of approximately $9.5 million.

In October 2013, the Company secured with Intercam Banco S.A., though its subsidiary Transportación Marítima Mexicana, S.A. de C.V., a line of credit in Mexican pesos for working capital for a total of approximately $19.9 million, at a variable rate of the 28-day TIIE plus 500 basis points with monthly payments of principal and interest, and maturing in December 2015. The Company fully paid the balance in December 2015.

In August 2012, the Company inter into an agreement with Intercam Banco S.A., though its subsidiary TMM Logistics, S.A. de C.V., for a line of credit in Mexican pesos for working capital for a total of $5.0 million, to be able to discount invoices from services rendered to the Secretaría de Seguridad Pública del D.F. at a variable rate of the 28-day TIIE plus 500 basis points and maturing on August 2013. The Company subsequently renewed the facility with the bank through August 2014, increasing the amount up to $10.0 million, and again through November 2017, increasing the amount up to $15.0 million. As of December 31, 2015 there was no balance drawn under this line of credit.

In June 2012, the Company decided to secure line of credit to strengthen the agricultural activities of ADEMSA, through a subsidiary with Corporación Financiera de Occidente, S.A. de C.V. SOFOM ENR for $18.0 million at a variable rate of the 28-day TIIE plus 600 basis points, with monthly payments of principal and interest, and maturing June 2015. The Company fully paid the drawn amount in June 2015.

In December 2012, the Company decided to enter into another line of credit to strengthen the agricultural activities of ADEMSA, through a subsidiary with Banco del Bajío, S.A. for $8.5 million at a variable rate of the 28-day TIIE plus 250 basis points, with monthly payments of principal and interest, with a grace period of 12 months for principal payments, and maturing November 2019. The effective rate for this loan as of December 31, 2015 was 5.91%, with a total outstanding balance of $5.6 million.

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In September 2013, the Company entered into a $7.6 million line of credit with Banco del Bajio, S.A. in order to strengthen the agricultural activities of ADEMSA, at a variable rate of the 28-day TIIE plus 250 basis points, with monthly payments of principal and interest, a grace period of 12 months for principal payments, and maturing in August 2020. The effective interest rate on this loan as of December 31, 2015 was 5.82%, with a total outstanding balance of $5.9 million.

In September 2014, the Company decided to enter into three loan facilities to strengthen the agricultural activities of ADEMSA, through its subsidiary TMM Logistics, S.A. de C.V. with Banco Autofin México. The first for $45.8 million at a variable rate of the 28-day TIIE plus 450 basis points, with monthly payments of principal and interest, and maturing September 2021; the second for $34.6 million at a variable rate of the 28-day TIIE plus 450 basis points, with monthly payments of principal and interest, and maturing September 2021; and the third for $25.5 million at a variable rate of the 28-day TIIE plus 450 basis points, with monthly payments of principal and interest, and maturing September 2021. The effective rate for these three loans as of December 31, 2015 was 8.56%, with a total outstanding balance of approximately $114.6 million.

In November 2014, the Company secured with Banco Nacional de Comercio Exterior, S.N.C., Institución de Banca de Desarrollo, through its subsidiary Transportación Marítima Mexicana, S.A. de C.V., a line of credit in dollars for working capital and/or current accounts for US$2.5 million (approximately $43.3 million) at a variable rate, maturing in December 2017. Monthly interest payments are due on outstanding balances and principal is due at maturity. Amounts may be drawn in both dollars and pesos with the possibility of making prepayments on principal without penalty. In December 2014, a first draw was made on this line of credit for $35.6 million at a variable rate of the 28-day TIIE plus 450 basis points, with interest payable monthly. As of December 31, 2015, the effective rate was 7.82% with an outstanding balance of $10.6 million. The Company fully prepaid the balance in April 2016.

In December 2014, the Company decided to enter into two lines of credit in Mexican Peso for working capital, through its subsidiary TMM Logistics, S.A. de C.V. with Banco Autofin México. The first for $21.6 million at a variable rate of the 28-day TIIE plus 450 basis points, with monthly payments of interest and principal payment at maturity in March 2022; the second for $8.4 million at a variable rate of the 28-day TIIE plus 200 basis points, with monthly payments of interest and principal payment at maturity in March 2015. As of December 31, 2015, the effective rate for these two loans was 7.82% and 6.82% with an outstanding balance of $19.3 and $7.5 million correspondingly.

Foreign Currency Risk

A majority of the Company’s revenues are denominated in U.S. dollars, and the majority of our costs and expenses are denominated in Pesos. As such, the Company is exposed to foreign currency risk and may occasionally use currency derivatives to manage alternating levels of exposure. These derivatives allow the Company to offset an increase in operating and/or administrative expenses arising from foreign currency appreciation or depreciation against the U.S. dollar.

The Company’s income from operations may therefore be materially affected by variances in the exchange rate between the U.S. dollar and the Mexican Peso. The Company has sought to minimize its exposure to foreign currency risk by holding its debt primarily in Mexican Pesos. Mexican Pesos historically have been subject to greater risk of devaluation and have tended to depreciate against the U.S. dollar. Currently, approximately 95% of the Company’s indebtedness is denominated in Mexican Pesos, most of which is long-term debt incurred in connection with the Company’s Trust Certificates Program. Certificates issued under the Trust Certificates Program have a 20-year term and do not require the Company to make any principal payments prior to maturity.

The Company currently believes that its strategy of holding the majority of its debt as long-term, Mexican Peso-denominated debt will allow it to effectively manage its foreign currency risk without the use of currency derivatives or other hedging instruments. However, the Company has in the past, and may from time to time in the future, enter into currency derivatives denominated in Mexican Pesos or other relevant currencies to attempt to manage its foreign currency risk. These derivatives should allow the Company to offset an increase in operating and/or administrative expenses arising from foreign currency appreciation or depreciation against the U.S. dollar. See Item 11. “Quantitative and Qualitative Disclosures About Market Risk — Foreign Currency Risk.”

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Trend Information

Historically, a substantial portion of the revenue generated by our Maritime Operations business has been achieved through contracts with PEMEX. In 2013, 2014 and 2015, 56%, 58% and 60%, respectively, of the revenue generated by Maritime Operations resulted from contracts with PEMEX. We believe that we will further increase our revenues in this business segment going forward. PEMEX is expected to increase its deep water exploration in order to restore its decreasing oil reserves; as a result, we expect an increase in PEMEX demand for different types of vessels on the offshore sector.

The future success of our logistics business depends upon our ability to enter into contracts with large automotive manufacturers, retail and consumer goods companies and to become a supplier for Government entities, providing integrated logistics and shipping services. Our primary skills that make us competitive are: (i) our logistics expertise, (ii) our ability to continue developing logistics and other land transportation infrastructure, and (iii) our ability to provide state-of-the-art systems to provide logistics solutions.

We have refinanced most of the debt related to vessel acquisitions with the first issuance of our Trust Certificates Program reduced the corresponding debt service obligations and extended the term of our vessel financings. The ability to satisfy our obligations under our debt in the future will depend upon our future performance, including our ability to increase revenues significantly and control expenses. Future operating performance depends upon prevailing economic, financial, business and competitive conditions and other factors, many of which are beyond our control. Our ability to refinance our debt and take other actions will depend on, among other things, our financial condition at the time, the restrictions in the instruments governing our debt and other factors, including market conditions, the macroeconomic environment and such variables as the Peso/dollar exchange rate and benchmark money market rates in Pesos and dollars, which are beyond our control.

We have funded capital expenditures with funds from operating cash flows and expect to seek additional financing through secured credit arrangements and asset-backed financings for additional capital expenditures as we have been doing with our Trust Certificates Program described above.

Off-Balance Sheet Arrangements

As of December 31, 2015, we did not have any off-balance sheet arrangements. We report our assets and liabilities according to the current IFRS as issued by the IASB.

Contractual Obligations

The following table outlines our obligations for payments under our capital leases, debt obligations, operating leases and other financing arrangements for the periods indicated as of December 31, 2015:

Indebtedness(1)	Less than 1 year		1-3 years		3-5 years		More than 5 years		Total
	(in thousands of Pesos, unless noted otherwise)
Mexican Trust Certificates(2)		77,973		—		—		9,674,593		9,752,566
Parcel Tanker Vessels Financings(3)		333,734		—		—		—		333,734
Investors(4)		139,481		—		—		—		139,481
Land and Logistics Equipment Financing(5)		9,737		23,116		13,670		—		46,523
Refinancing Acquisition ADEMSA(6)		92,949		—		—		—		92,949
Working Capital(7)		3,820		5,978		4,437		906		15,141
Other Debt(8)		19,623		49,742		37,766		16,808		123,939
Total	$	677,317	$	78,836	$	55,873	$	9,692,307	$	10,504,333
Financial Lease Obligations(9)	Less than 1 year		1-3 years		3-5 years		More than 5 years		Total
Vessel, Transportation Equipment and Other Operating Leases	$	35,369	$	69,619	$	102,190	$	173,173	$	380,351
Total	$	35,369	$	69,619	$	102,190	$	173,173	$	380,351
Operating Lease Obligations(10)	Less than 1 year		1-3 years		3-5 years		More than 5 years		Total
Vessel, Transportation Equipment and Other Operating Leases	$	99,752	$	121,109	$	118,257	$	681,801	$	1,020,919
Total	$	99,752	$	121,109	$	118,257	$	681,801	$	1,020,919

(1) These amounts include principal payments and accrued and unpaid interest as of December 31, 2015.

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(2) Debt allocated in one special purpose company in connection with financing of tanker vessels, offshore vessels and tugboats denominated in Mexican Pesos. The maturity of this line of credit is on July 2030, with a bullet principal payment, semiannual interest payments with a variable rate of 5.79% per annum as of December 31, 2015. The company contracted an interest rate CAP to protect against the possible fluctuation of the interest rate.

(3) Debt allocated in one special purpose company in connection with the financing of two parcel tanker vessels, denominated in US Dollars. The maturity of these lines of credit is on June 2017, with a balloon payment of $277,437, monthly principal and interest payments with a weighted average rate of 6.60% per annum. The total outstanding is considered due 2015 because the Company has not yet received the formal waiver of the “Minimum Capital” covenant from the bank; however, on March 4, 2016, the bank informed the Company that the waiver would be forthcoming.

(4) Debt in connection with the cancellation of the Securitization Facility, denominated in US Dollars. The maturity of these lines of credit is on January 2016, semiannual interest payments and fixed rate of 11.25% per annum. The Company recently received a reschedule of the balance extending the maturity to January 2017.

(5) Debt in connection with the land & logistics equipment financing, denominated in Mexican Pesos. Line of credit denominated in Pesos, maturing in December 2019, with monthly interest and principal payments at a variable rate; as of December 31, 2015, the rate was 9.30% per annum.

(6) Debt in connection with ADEMSA acquisition refinancing, denominated in US Dollars. The maturity of this line of credit was on July 2014, with semiannual interest payments and 6 principal payments, fixed rate of 8.01% per annum. The Company continues to negotiate with the bank to refinance the payment schedule in order to extend the maturity.

(7) Debt allocated in one special purpose company for working capital and to strength agricultural activities of ADEMSA. Various lines of credit denominated in Mexican Pesos, with different maturities between June 2015 and August 2021, monthly interest and principal payments with a weighted average rate of 7.12% per annum as of December 31, 2015.

(8) Debt allocated in different companies for working capital and letter of credit issuances. Various lines of credit denominated in Mexican Pesos, with maturities between December 2017 and March 2022, some with monthly interest payments with bullet principal payment with a variable rate; others with monthly interest and principal payments with variable rate; the weighted average rate was 7.82% per annum as of December 31, 2015.

(9) Financial lease agreements for purchasing vessel and transportation equipment, including: (i) Transportation equipment, denominated in Mexican Pesos, maturing in December 2016, monthly interest and principal payments and a fixed rate of 14.23%; and, (ii) AHTS vessel, denominated in US Dollars, maturing in November 2026, with monthly interest and principal payments and fixed rate of 15.92%.

(10) These amounts include the minimum lease payments.

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

Directors and Senior Management

Board of Directors

OurEstatutos Sociales, or Bylaws, provide that our Board of Directors shall consist of not less than seven and not more than 21 directors, without taking into account the appointment of their respective alternates. We currently have seven directors on our board. Our Board of Directors is elected annually by a majority vote of our shareholders and is responsible for the management of the Company. The Company does not have any agreements to pay benefits to any directors upon termination of their employment.

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Our current Board of Directors was elected and ratified at the Company’s Annual General Ordinary Shareholders’ Meeting held on April 29, 2016. Our directors and alternate directors, their principal occupations and years of service (rounded to the nearest year) as a director or alternate director are as follows:

Name	Principal Occupation	Years as a Director or Alternate Director		Age
Directors
José F. Serrano Segovia	Chairman of the Board of Grupo TMM		44		75
Ignacio Rodríguez Rocha	Attorney and First Vice-chairman of Grupo TMM		25		80
Maria Josefa Cuevas de Serrano	Private Investor		10		70
Francisco Javier García-Sabaté Palazuelos	Private Investor		1		64
Carlos Viveros Figueroa	Private Investor		2		75
Miguel Alemán Velasco	Private Investor		7		84
Miguel Alemán Magnani	Private Investor		7		50
Alternate Directors
José Francisco Serrano Cuevas	President Deputy Director		15		35

The directors (whenever elected) shall remain in office for the period of time stated below, calculated from the date of their appointment. The directors may be reelected and, in case of the failure to appoint their substitute or, if the designated substitute does not take office, the directors in office being substituted shall continue to perform their duties for up to thirty calendar days following the date of expiry of the term for which they were appointed, as described below. For further information see Item 10. “Additional Information – Board of Directors.”

Position in the Board of Directors	Term
Chairman	7 years
Vice-Chairman	7 years
Second Vice-Chairman	Between 3 and 7 years (As determined by the General Shareholders’ Meeting that elects him/her. This position is currently vacant.)
Other Board Directors	1 year

José F. Serrano Segovia

Mr. Serrano was born on November 22, 1940. He has served as Chairman of Grupo TMM since 1992. Throughout his professional career, he has owned several family-owned companies in Mexico. Among the most outstanding positions of his professional and entrepreneurial career are: Chairman of the Executive Committee and Chairman of the Board of Grupo Anáhuac, S.A. de C.V. and Chairman of the Executive Committee and Chairman of the Board of Hules Mexicanos, S.A. de C.V. Mr. Serrano holds a master’s degree in engineering from Villanova University in Pennsylvania, U.S.A.

Ignacio Rodríguez Rocha

Mr. Rodríguez was born on July 13, 1936. Mr. Rodríguez has been appointed as First Vice Chairman of the Board of Directors of Grupo TMM since April 30, 2013. He is a member of the Board of Automotriz México, S.A. de C.V and Diesel de Toluca, S.A. de C.V. Mr. Rodríguez is currently a partner of Rodriguez Rocha, S.C.

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Maria Josefa Cuevas de Serrano

Mrs. Serrano was born on June 16, 1946. Mrs. Serrano is the founder of the Sociedad Internacional de Valores de Arte Mexicano, A.C. (SIVAM), which promotes classical music and outreach for talented artists in Mexico. Additionally, she is an active promoter of Mexican art in Mexico and abroad. Mrs. Serrano is the wife of Mr. José F. Serrano Segovia.

Francisco Javier García-Sabaté Palazuelos

Mr. García-Sabaté Palazuelos was born on November 3, 1952. Since 1972, Mr. García-Sabaté Palazuelos has been the Partner/Director of García-Sabaté, Castañeda, Navarrtere, S.C. and has worked in the Tax and Auditing department of several companies within the financial, commercial and industrial sector. He holds a degree in Public Accounting with High Honors from the Universidad La Salle and a postgraduate degree in Administration from Insituto Tecnologico y de Estudios Superiores de Monterrey. He is certified by the Instituo Mexicano de Contadores Públicos as an accountant and a Financial Expert.

Carlos Viveros Figueroa

Mr. Viveros was born on January 3, 1941. He has a degree in Architecture from Universidad Nacional Autónoma de México and a certificate on External Trade from INCE. He has worked as a consultant for several public and private organizations that focus on promoting and supporting small business in Latin America. He helped create the master’s program for Port Development in Quintana Roo, Mexico. He has also advised in radio communications specialized on fleet. He was the founder partner of the navy company Tecomar where he was CEO of the company. He has also been a Board member of Banca Cremi and Governing Board member of Bancomext. Currently, he is part of the Board of the Instituto Mexicano de Ejecutivos en Comercio Exterior. He was a partner of Consejo Empresarial Mexicano para Asuntos Internacionales and President of several Chambers (CANAINTRAM, Marina Mercante, ANIERM), member of CONCAMIN, and also head of México and Vice-president of Asociación Latinoamericana de Armadores in Montevideo, Uruguay, which grouped the naval companies in Latin America. In 1991, Mr. Viveros was chosen as man of the year by the freight transport industry of Asociación de Industriales del Transporte y Comercio Internacional and in 1996, the government of Brazil gave him the award of “Orden Cruzeiro Do Sul” as Commander.

Miguel Alemán Velasco

Mr. Alemán was born on March 18, 1932 in Veracruz, Mexico. He has a degree in Law from the Universidad Autónoma de México. Throughout his professional career, he has held various public positions in the Mexican government, such as Constitutional Governor of the State of Veracruz and Senator of the Republic. He is currently President of the Management Board of the Mexican airline Interjet, as well as Vice Chairman of the Board of Directors of Televisa. Mr. Alemán has received several awards from renowned national and international institutions, and has published several novels, essays, articles and technical books.

Miguel Alemán Magnani

Mr. Alemán was born on April 25, 1966 in Mexico City. He has a degree in Law from the Universidad Anáhuac and a course in Business Management from the Instituto Panamericano de Alta Dirección de Empresas (“IPADE”). He has held important positions within Televisa, Mexico’s largest Spanish speaking media communications company. He is currently the CEO of the Mexican airline Interjet, as well as Chairman of GALEM, a German Group specializing in telecommunications, real estate and transportation. He is a member of the board of several Mexican companies. He is also a partner of the Discovery Americas fund.

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Executive Officers

Our officers serve at the discretion of our Board of Directors. Our executive officers, their position and years of service with us and as an executive officer are as follows:

Name	Position	Years of Service	Executive Officer
Corporate Directors
José F. Serrano Segovia	Chairman of the Board and Chief Executive Officer	44	24
Jacinto David Marina Cortés	Deputy Chief Executive Officer	25	25
Carlos Pedro Aguilar Mendez	Deputy Chief Executive Officer	26	9
Benjamín Ampudia Álvarez	Chief Financial Officer and Administrative Director	1	1
Silvia Millán Hernández	Corporate Human Resources Director	29	1
Elvira Ruiz Carreño	Corporate Audit Director	20	13
Marco Augusto Martínez Avila	Corporate Legal Director	8	3
Business Unit Directors
Luis Manuel Ocejo Rodriguez	Director, Maritime Transportation	33	9
Manuel Gutiérrez	Director, Ports and Terminals	1	1

José F. Serrano Segovia, who is chairman of the Board of Directors, is married to Maria Josefa Cuevas de Serrano, a member of the Board of Directors. José Serrano Cuevas, who is an alternate director of the Board of Directors, is the son of José F. Serrano Segovia and Maria Josefa Cuevas de Serrano.

Compensation

For the year ended December 31, 2015, the aggregate total compensation paid to our directors, alternate directors and executive officers for services in all capacities was approximately $41.3 million. See Item 7. “Major Shareholders and Related Party Transactions.”

Pension, Retirement or Similar Benefits

Seniority premiums, retirement plan obligations (“Pension Benefits”) and other employee compensation payable at the end of employment 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.

Seniority premiums, Pension Benefits and other employee compensation payable upon termination include the amortization of past service costs over the average remaining working lifetime of employees.

Board Practices

Our Bylaws provide that our Board of Directors shall consist of at least seven but not more than 21 directors elected at our annual ordinary shareholders’ meeting to serve until their successors accept their election at the next annual ordinary shareholders’ meeting. The Board of Directors is responsible for the management of the Company. Mexican Securities Law requires that at least 25% of the members of the Board be independent directors.

Audit and Corporate Practices Committee

The Board of Directors maintains an Audit and Corporate Practices Committee composed of independent directors, each with extensive experience in the analysis and evaluation of financial reporting and knowledge of internal controls and procedures for financial reporting. In accordance with Mexican Securities Law and Mexican Corporate Practices, the committee’s responsibilities include, among others:

Audit responsibilities:

• overseeing the accounting and financial reporting processes of the Company;

• discussing the financial statements of the Company with all parties responsible for preparing and reviewing such statements, and advising the Board of Directors on their approval thereof;

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• overseeing compliance with legal and regulatory requirements and overseeing audits of the financial statements of the Company;

• evaluating the performance of the Company’s external auditor and its independent status;

• advising the Board of Directors on the compliance of the Company’s or any of its subsidiaries’ internal controls, policies and in-house auditing, and identifying any deficiencies in accordance with the Bylaws of the Company and applicable regulations;

• providing sufficient opportunity for a private meeting between members of our internal and external auditors and the Audit Committee, who may also request additional information from employees and legal counsel;

• providing support to the Board of Directors in supervising and reviewing the Company’s corporate accounting and disclosure policies and discussing guidelines and policies to govern the process of risk assessment with management;

• advising the Board of Directors on any audit-related issues in accordance with the Bylaws of the Company and applicable regulations;

• assisting the Board of Directors in the selection of the external auditor (subject to approval by vote of the shareholders);

• reviewing the financial statements and the external auditor’s report. The Committee may request that the external auditor be present when reviewing such reports, in addition to the Committee’s mandatory meeting with the external auditor at least once a year;

• preparing the Board of Directors’ opinion on the Chairman’s annual report and submitting it at the Shareholders’ Meeting for its approval; and

• overseeing compliance by the Company’s chief executive officer with decisions made at a Shareholders’ Meeting or a Board of Directors meeting.

Corporate Practices responsibilities:

• requesting an opinion from independent experts as the Committee might see fit, in accordance with applicable regulations;

• calling Shareholders’ Meetings and reviewing the agenda;

• supporting the Board of Directors in preparing its reports in accordance with the Bylaws of the Company and applicable regulations;

• suggesting procedures for hiring the Company’s chief executive officer, chief financial officer and senior executive officers;

• reviewing human resources policies, including senior executive officers’ performance evaluation policies, promotions and structural changes to the Company;

• assisting the Board of Directors in evaluating senior executive officers’ performance;

• evaluating executive officer’s compensation. The Company is not required under Mexican law to obtain shareholder approval for equity compensation plans; the Board of Directors is required to approve the Company’s policies on such compensation plans;

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• reviewing related party transactions; and

• performing any activity set forth in the Mexican Securities Law.

Code of Ethics

The Company has adopted a Code of Ethics, which applies to its principal executive officer, principal financial officer, and other members of our senior management. We last updated the Code of Ethics in February 2014. The Code of Ethics may be viewed on the Company website atwww.grupotmm.com under the caption “Investors — Corporate Governance.” An English version of this document is available upon written request sent to Grupo TMM, S.A.B., Avenida de la Cúspide, No. 4755, Colonia Parques del Pedregal, 14010 México City, México, Attn: Human Resources.

Statutory Auditor

Pursuant to the Mexican Securities Market Law (MSML), the surveillance of the Company is entrusted to different committees (i.e., Audit and Corporate Practices Committees), as previously described, which replace the role of the Statutory Auditor. At the Extraordinary Shareholders’ Meeting held on December 20, 2006, the Statutory Auditor, Salles Sainz – Grant Thornton, S.C (SSGT), Mr. Javier García-Sabaté, and the alternate Statutory Auditor were duly replaced by the Audit and Corporate Practices Committee of the Company. However, SSGT continue to serve as the Statutory Auditor for all of our subsidiaries.

Employees

As of March 31, 2016, we had 1,779 employees, approximately 13% of whom were unionized. As of December 31, 2015, we had 1,750 employees, approximately 11% of whom were unionized. The increase in the number of our employees in the first quarter of 2016 is largely due to increases in our shipyard business operations.

As of December 31, 2014, we had 1,737 employees, approximately 10% of whom were unionized. The increase in the number of our employees in 2015 is largely due to increases in our storage business. As of December 31, 2013, we had 1,970 employees, approximately 17% of whom were unionized. The decrease in the number of our employees in 2014 is largely due to decreases in our automotive services business. In accordance with customary practice in Mexico, we negotiate union contracts annually with regard to wages and every two years with regard to other matters, including benefits. We have not experienced a strike since 1987 and believe that relations with our employees are good.

Share Ownership

As of April 8, 2016, the Serrano Segovia family held 41,217,193 Shares directly, and the CPO Trustee maintained 23,086,590 Shares of our capital stock in the form of ADSs, including 3,512,500 Shares that are beneficially owned by the Serrano Segovia family. Accordingly, as of such date, the Serrano Segovia family controlled the voting power of our capital stock. The voting power controlled by the Serrano Segovia family varies from time to time, depending upon the number of Shares held by the Serrano Segovia family and by the CPO Trust and others. As of April 8, 2016, other than as set forth below in the section entitled “Major Shareholders,” each of our other directors, alternate directors or executive officers owns less than one percent of our Shares on an individual basis.

Shares were contributed to the CPO Trust established with a 30-year term by Nacional Financiera, S.N.C. (the “CPO Trustee”) on November 24, 1989. The CPO Trustee authorized the issuance of non-redeemable ordinary participation certificates(certificados de participación ordinarios no amortizables) (“CPOs”) that correspond to our Shares. One CPO may be issued for each Share contributed to the CPO Trust. CPOs constitutes separate negotiable instruments different and apart from the Shares, and afford to their holders only economic rights with respect to the Shares held in the CPO Trust. Such voting rights are exercisable only by the CPO Trustee, which is required by the terms of the CPO Trust to vote such Shares in the same manner as holders of a majority of the outstanding Shares not held in the CPO Trust and voted at the relevant meeting. Mexican and non-Mexican investors may hold CPOs

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without restrictions of any kind. The acquisition of Shares representing 5% or more of the capital stock of Grupo TMM by any person or group of persons (other than the Serrano Segovia family and the CPO Trustee), in one or a series of simultaneous or successive transactions requires the prior approval of the Board of Directors. As of April 8, 2016, the CPO Trustee held CPOs representing an aggregate of 23,086,590 Shares in the form of ADSs.

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

Major Shareholders

The following table indicates, as of April 8, 2016, unless otherwise indicated, the shareholders that beneficially own 5% or more of our outstanding Shares (the “Major Shareholders”). The percentage of our outstanding Shares owned by each Major Shareholder shown below is based on the 102,182,841 Shares outstanding as of April 8, 2016. For purposes hereof, each Major Shareholder with shared voting or investment authority with respect to certain securities is deemed to beneficially own all such securities.

Shareholder	Number of Shares		Percentage of Shares Outstanding
José F. Serrano Segovia (a) (b)		36,632,809		35.9	%

a) Based upon information made known to the Company and reports of beneficial ownership filed with the SEC, the Serrano Segovia Family beneficially owns 41,217,193 Shares, including 28,359,964 Shares held by VEX, a Mexican corporation in which José F. Serrano Segovia holds 100% of the voting stock, and 561,350 Shares beneficially owned by Promotora Servia, S.A. de C.V. (“Promotora”), a Mexican corporation controlled by José F. Serrano Segovia. Of the 561,350 Shares beneficially owned by Promotora, 560,850 Shares are owned directly by its subsidiary, Servicios Directivos Servia, S.A. de C.V. (“Servicios”), a Mexican corporation.

b) Members of the Serrano Segovia family have pledged an aggregate of 7,513,867 Shares to IXE Banco, S.A. (“IXE”), to secure a loan in the principal amount of US$0.3 million.

Change in Percentage Ownership

No Major Shareholder has disclosed a significant change in its percentage ownership of Shares during the three years ended December 31, 2015.

Voting Rights and Control

As of April 8, 2016, 23,086,590 Shares were held in the form of ADSs, which have limited voting rights. The Shares held in the form of ADSs are held directly by the CPO Trust. The voting rights for those Shares are exercisable only by the trustee of the CPO Trust, which is required by the terms of the trust agreement to vote such Shares at any shareholders’ meeting in the same manner as the majority of the Shares that are not held in the CPO Trust are voted. Of the 79,096,251 Shares held outside of the CPO Trust as of April 8, 2016, the Serrano Segovia family beneficially owns 37,704,693, or 47.7% of such Shares. As a result, the Serrano Segovia family could direct and control the policies of the Company and its subsidiaries, including mergers, sales of assets and similar transactions. See Item 9. “The Offer and Listing.” Except for the limited voting rights applicable to their ADSs, none of the Major Shareholders have voting rights that differ from those applicable to other holders of Shares.

Other than the Serrano Segovia family, which may be deemed to control us, to our knowledge we are not directly or indirectly owned or controlled by any other corporation, by any foreign government or by any other natural or legal person, severally or jointly. We are not aware of any arrangement which may at a later date result in a change of control of the Company.

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Related Party Transactions

On December 18, 2009, as part of the restructuring of the Company’s Securitization Facility, VEX, an affiliate of the Company, purchased trust certificates issued under the Securitization Facility with a face value of $1,206.5 million. VEX is a Mexican company in which José F. Serrano Segovia holds a minority equity interest and controls 100% of the voting stock; the remaining equity interest in VEX is held by related and unrelated investors through non-voting shares. The transaction with VEX was approved by the Board of Directors of Grupo TMM, on the basis of a prior approval by the Auditing and Corporate Governance Committee, which received an independent expert’s fairness opinion on the consideration and other terms and conditions of the transaction.

Pursuant to a resolution adopted at the Extraordinary General Shareholders’ Meeting held on December 15, 2009 and with the authorization of theComisión Nacional Bancaria y de Valores, on January 6, 2010, VEX acquired 46,797,404 Shares for an aggregate subscription price of US$41,181,715.53, or US$0.88 per Share (equivalent to US$4.40 per ADS). The subscription price per Share was 10% higher than the ADS closing price on January 5, 2010. VEX paid the subscription price for the Shares as part of the consideration for its sale to Grupo TMM of the trust certificates. The remainder of the consideration VEX received for the trust certificates consisted of US$27,103,065.52 in cash, a five-year promissory note from Grupo TMM in the principal amount of US$12,250,000, and subordinated trust certificates issued under the Securitization Facility with a face amount of US$6,000,000. In May 2010, VEX distributed 18,437,440 of the 46,797,404 Shares it acquired to its investors.

ITEM 8. FINANCIAL INFORMATION

See Item 18 — “Financial Statements.”

Legal Proceedings

Mutual Claims Between PRM and Grupo TMM

Grupo TMM was a claimant in two arbitrations with PRM, a Singapore company. The arbitrations were conducted under the Singapore International Arbitration Centre Rules and related to alleged breaches by PRM of two agreements for the sale of two vessels. Grupo TMM sought recovery of the deposits it had paid for the two vessels in the sum of US$5.2 million (approximately $90.2 million) and damages for breaches of the agreements. PRM alleged that Grupo TMM was in breach of the agreements and sought a declaration that it was entitled to the deposits and damages for breach. On November 28, 2011, the arbitral tribunal resolved the claims in favor of PRM and ordered Grupo TMM to instruct Platou, the broker holding the deposits, to release the same to PRM.

On January 16, 2012, Grupo TMM filed suit in Mexico challenging the validity of the award under the New York Convention for the Recognition and Enforcement of Foreign Arbitral Awards. After allowing the suit to proceed, the judge issued an order directing Platou not to release the deposit until PRM appears before the court in Mexico and requests enforcement of the arbitral award. In addition, on February 28, 2012, Grupo TMM filed a petition to set aside the award in Singapore on the grounds that the arbitrator failed to properly consider all the arguments and documents presented. As of December 31, 2013, the Company had reserved the amount of the deposit and also created an additional allowance of US$1.5 million (approximately $26.0 million) for potential legal fees associated with this case. Both items are reported in other expenses – net for the year ended December 31, 2013.

During 2014 the Singapore International Arbitration Centre resolved the claims in favor of PRM and ordered Grupo TMM to release the deposits it had paid for the two vessels in the sum of US$5.2 million (approximately $90.2 million) to PRM. On February 15, 2016, a settlement agreement was signed between the parties pursuant to which Grupo TMM agreed to pay the sum of US$400,000 to PRM in 2016.

SSA Claim

In May 2012, Grupo TMM received a claim notice from SSA relating to payments made by SSA to a law firm regarding a tax proceeding with the tax authorities in Mexico and which related to the trademark of Servicios en Puertos y Teminales. On January 10, 2013, we were officially notified by the ICC of arbitration proceedings with respect to the claim.

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In December 2014, we obtained a favorable ruling in the ICC arbitration proceeding with SSA. The ruling rejected SSA’s claims and ordered SSA to pay Grupo TMM approximately $2.5 million to cover its legal fees and costs incurred in connection with the proceeding. However, the ruling also requires Grupo TMM to reimburse SSA US$115,000 for costs incurred by SSA to substantiate the costs of the arbitral proceeding. As of December 23, 2015, these claims have been resolved pursuant to a set-off agreement that resulted in Grupo TMM receiving a credit in the amount of $510.4 pesos from SSA.

Refined Product Services (“RPS”) Claim

On August 7, 2007, Transportación Marítima Mexicana, S.A. de C.V. (“TMM”) filed a claim for arbitration against RPS for the amount of US$50,000 (approximately $866,990) for various expenses incurred by TMM due to the delay of the delivery of the tanker vessel Palenque.

On October 19, 2007, RPS filed a countersuit for US$3.0 million (approximately $52.0 million), alleging that TMM failed to maintain the tanker vessel Palenque, and also filed a claim for consequential damages for losing a contract while the vessel was being repaired. Although it is impossible to predict the outcome of any legal proceeding, we believe this claim to be without merit and intend to defend this proceeding vigorously.

Mutual Claims Between Worldwide Services, Ltd. (“WWS”) and TMM

In December 2007, TMM and WWS filed claims against each other relating to the charter by us of the vessel Veracruz. TMM’s US$393,731 (approximately $6.8 million) claim related to the fuel costs and low performance of the vessel Veracruz, and WWS’ US$938,000 (approximately $16.3 million) counter claim alleged that the same vessel overperformed and that consequently, TMM owes WWS under the terms of the charter contract. Although it is impossible to predict the outcome of any legal proceeding, we believe this claim to be without merit and intend to defend this proceeding vigorously.

ADEMSA Secured Certificates of Deposit

ADEMSA from time to time issues certificates of deposit relating to agricultural goods held by it. As a result of the crisis that affected Mexican farmers during 2010 and 2011, the resulting fluctuations in the prices of wheat, corn and beans, and exchange rate losses relating to fertilizer transactions, defaults on loan obligations by the producers to which ADEMSA issued secured certificates of deposit in favor of various financial institutions, the goods and/or amounts consigned thereto, which, as a result of the defaults by the producers and the exercise of rights conferred by the certificates, filed claims against ADEMSA for compliance with the obligations to deliver the goods covered or payment of the amounts secured.

ADEMSA, each of the financial institutions and COVAHESA, in its capacity as representative for over one thousand agricultural producers, have been negotiating a financial restructuring to permit the long-term financing of the debts or claims involved. As a result, the Company presents an allowance as of December 31, 2015 and 2014 for $65.7 and $67.3 million, respectively, relating to the obligations of ADEMSA in the event the agreements being negotiated with the financial institutions cannot be implemented or if the debts cannot be settled in full during the term and under the conditions of the financing restructuring being negotiated.

Elimination of the Fiscal Consolidation Regime

On February 13, 2014, we filed an indirect writ of relief (amparo) challenging the constitutionality of various provisions related to the elimination of the fiscal consolidation regime, which was among the Mexican tax reforms that went into effect on January 1, 2014. See Item 4. “Information on the Company – Regulatory Framework – Mexican Tax Reforms” and Notes 23 and 30(i) to our Audited Consolidated Financial Statements contained elsewhere herein. In our writ, we have offered various arguments that we believe demonstrate that various aspects of the tax reform violate the constitutional guarantees of proportionality, legality, and legal certainty, and also various human rights recognized by the Mexican Constitution and in international treaties to which Mexico is party. On February 16, 2016, the court issued a ruling rejecting our constitutional challenge. We appealed this ruling on March 17, 2016 and a decision on our appeal remains pending.

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Given the diversity of procedures in the tax laws to determine the effects of deconsolidation required by these reforms, the various criteria to be used, and the possible results of the acts contested in our writ of relief, our Financial Statements do not include any disclosure regarding deconsolidation as there is no certainty as to the application of a specific procedure.

Other Legal Proceedings

We are a party to various other legal proceedings and administrative actions, all of which are of an ordinary or routine nature and incidental to our operations. Although it is impossible to predict the outcome of any legal proceeding, in the opinion of our management, such proceedings and actions should not, individually or in the aggregate, have a material adverse effect on our financial condition, results of operations or liquidity. For information regarding our pending tax assessment, see Note 30 to the accompanying Audited Consolidated Financial Statements contained elsewhere herein.

In considering whether accrual of a loss contingency is necessary in connection with legal claims outstanding that could, both individually or in the aggregate, have a material effect on the financial condition or operating results of the Company, the Company evaluates the requirements of paragraph 14 of IAS 37 to determine whether the Company has a present obligation (legal or constructive), whether it is probable that an outflow of resources will be required in order to settle the obligation, and whether the amount of the obligation can be reliably estimated. Based on management’s review and analysis of the legal claims outstanding for the fiscal year ended December 31, 2014, the Company concluded that it did not have a present obligation in respect of any legal claims outstanding other than the mutual claims between PRM and SSA described above.

Dividends

At shareholders’ meetings, shareholders have the ability, at their discretion, to approve dividends from time to time. At the Ordinary Shareholders’ Meeting held on April 29, 2011, due to the Company’s current financial condition, our shareholders decided to revoke the resolution adopted at the ordinary shareholders’ meeting held on April 24, 1997 by the shareholders of our predecessor, TMM, declaring a dividend equivalent to $0.17 per Share, subject to our outstanding debt obligations and availability of funds. That dividend was not paid, and no other dividend has been declared since 1997.

Significant Changes

See Item 4. “Information on the Company — Business Overview — Recent Developments.”

ITEM 9. THE OFFER AND LISTING

Trading

Our Series A Shares started trading on theBolsa Mexicana de Valores, S.A. de C.V. (the “Mexican Stock Exchange” or the “Bolsa”) on September 24, 1980 and our Series L Shares began trading on August 9, 1991. In June 1992, L Share ADSs, each representing one Series L Share, were issued by Citibank, N.A. as depositary in exchange for Rule 144A ADSs as part of an initial public offering, and commenced trading on the NYSE. On September 13, 2002, we completed a reclassification of our Series L Shares of stock as Series A Shares. The reclassification combined our two classes of stock into a single class by converting each share of our Series L Shares into one share of our Series A Shares. The reclassification also eliminated the variable portion of our capital stock and we became a fixed capital corporation (sociedad anónima). Following the reclassification, we had 56,963,137 Series A Shares outstanding. As a result of the elimination of the variable portion of our capital stock, our registered name changed from Grupo TMM, S.A. de C.V. to Grupo TMM, S.A.

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As a result of the promulgation of the new securities law in Mexico in June of 2006, public companies were transformed by operation of law intoSociedades Anónimas Bursátiles (Public Issuing Corporation) and were required to amend their bylaws to conform them to the provisions of the new law. On December 20, 2006, the Company added the term “Bursátil” to its registered name to comply with the requirements under Mexico’s new securities law orLey del Mercado de Valores, resulting in Grupo TMM,Sociedad Anónima Bursátil, or Grupo TMM, S.A.B. In addition, the Series A Shares of the Company were renamed and are now referred to as nominative common shares, without par value (“Shares”). The rights afforded by these new Shares are identical to the rights afforded by the former Series A Shares.

Our Shares continue to trade in Mexico on the Mexican Stock Exchange. In the United States, our ADSs, each representing five CPOs, trade on the OTC market under the ticker symbol GTMAY following their delisting from the NYSE on June 12, 2012. Our ADSs continue to be registered under the U.S. Securities Exchange Act of 1934 and are issued and exchanged in New York by The Bank of New York Mellon, which replaced Citibank, N.A. as depositary on December 18, 2009. As of April 8, 2015, of the 102,182,841 outstanding Shares, 23,913,405 were held in the form of ADSs.

The CPOs do not trade independently of the Shares on the Bolsa. In the event that CPOs are sold to a Mexican national, the Shares underlying such CPOs will be delivered directly to the purchaser throughS.D. Indeval, S.A. de C.V. (“Indeval”). Indeval is a privately owned central securities depositary that acts as a clearing house, depositary, custodian, settlement, and transfer agent and registration institution for Mexican Stock Exchange transactions, eliminating the need for physical transfer of securities. Because non-Mexican nationals cannot acquire direct interests in the Shares, in the event that the purchaser of such Shares is not a Mexican national, such Shares must be delivered in the form of CPOs through Indeval.

Limitations Affecting ADS Holders and CPO Holders

Each Share entitles the holder thereof to one vote at any of our shareholders’ meetings. Holders of CPOs are not entitled to vote the Shares underlying such CPOs. Such voting rights are exercisable only by the CPO Trustee, which is required to vote all such Shares in the same manner as the holders of a majority of the Shares that are not held in the CPO Trust and that are voted at the relevant meeting.

Whenever a shareholders’ meeting approves a change of corporate purpose, change of domicile or restructuring from one type of corporate form to another, any shareholder who has voted against such change or restructuring has the right to withdraw as a shareholder and receive an amount equal to the book value of its shares (in accordance with our latest balance sheet approved by the annual ordinary general shareholders’ meeting), provided such shareholder exercises its right to withdraw during the 15-day period following the meeting at which such change or restructuring was approved. Because the CPO Trustee is required to vote the Shares held in the CPO Trust in the same manner as the holders of a majority of the Shares that are not held in the CPO Trust and that are voted at the relevant meeting, appraisal rights will not be available to holders of CPOs.

The tables below set forth for the periods indicated, the reported high and low prices for the Shares on the Mexican Stock Exchange. In addition, the tables below set forth the reported high and low prices for the ADSs on the NYSE for the periods between January 1, 2010 and June 15, 2012. The reported high and low prices for the ADSs for the periods beginning or after June 18, 2012 reflect the high and low bid prices for the ADSs on the OTC market.

Mexican Stock Exchange

Price per Share

(Pesos)

	Shares
Previous five years:	High		Low
2011		6.70		2.05
2012		5.70		2.07
2013		2.93		1.80
2014		7.85		2.30
2015		5.10		3.30

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Mexican Stock Exchange

Price per Share

(Pesos)

	Shares
Previous two years (by quarter):	High		Low
2014:
First Quarter		2.66		2.20
Second Quarter		2.56		2.30
Third Quarter		7.85		2.41
Fourth Quarter		6.50		3.54
2015:
First Quarter		4.99		3.30
Second Quarter		4.04		3.45
Third Quarter		5.10		3.61
Fourth Quarter		4.90		4.00
2016:
First Quarter		5.00		3.99

Mexican Stock Exchange

Price per Share

(Pesos)

	Shares
Previous six months:	High		Low
October 31, 2015		4.89		4.38
November 30, 2015		4.90		4.01
December 31, 2015		4.50		4.00
January 31, 2016		4.50		3.99
February 29, 2016		5.00		4.33
March 31, 2016		4.35		4.25

Source: InfoSel Financiero

New York Stock Exchange / OTC Market

Price per ADS

(Dollars)

	ADS(*)
Previous five years:	High		Low
2011		2.78		1.25
2012		2.20		0.70
2013		1.10		0.71
2014		2.91		0.82
2015		1.58		1.01

^(*)  Effective June 15, 2012, the ADSs were delisted from the NYSE. The ADSs began trading on the OTC market on June 18, 2012.

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OTC Market

Price per ADS

(Dollars)

	ADS
Previous two years (by quarter):	High		Low
2014:
First Quarter		1.04		0.82
Second Quarter		0.93		0.83
Third Quarter		2.91		0.89
Fourth Quarter		2.25		1.20
2015:
First Quarter		1.58		1.12
Second Quarter		1.30		1.05
Third Quarter		1.50		1.15
Fourth Quarter		1.40		1.01
2016:
First Quarter		1.21		1.00

OTC Market

Price per ADS

(Dollars)

	ADS
Previous six months:	High		Low
October 31, 2015		1.40		1.20
November 30, 2015		1.39		1.19
December 31, 2015		1.37		1.01
January 31, 2016		1.18		1.04
February 29, 2016		1.21		1.13
March 31, 2016		1.19		1.00

Source: InfoSel Financiero.

Share Repurchase Program

On December 14, 2007, the Company announced that its Board of Directors had given its approval to constitute a reserve fund to repurchase Shares during their meeting held in November of that year. The Share repurchase program was also approved by the Company’s shareholders at a shareholders’ meeting. The program was approved for an amount of up to US$10 million (approximately $173.4 million).

The Company has repurchased 1,577,700 Shares under the program since its approval in 2007. As of April 8, 2016, of the 102,182,841 outstanding Shares, 23,086,590 were held in the form of ADSs.

ITEM 10. ADDITIONAL INFORMATION

Share Capital

Not applicable.

Memorandum and Articles of Association

The following is a summary of the provisions of the Bylaws (Estatutos Sociales) of Grupo TMM and is qualified in its entirety by the actual provisions within the Bylaws themselves and applicable provisions of the General Law of Mercantile Companies (Ley General de Sociedades Mercantiles) and the Mexican Securities Law (Ley del Mercado de Valores). For a description of the provisions of our Bylaws relating to our Board of Directors, General Director, Special Committees and Statutory Auditors, as well as Audit and Corporate Practices Committee, see Item 6. “Directors, Senior Management and Employees.”

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Organization and Register

We were incorporated in the United Mexican States as asociedad anónima, as evidenced by public deed number 26,225 dated August 14, 1987. We amended our Bylaws on August 29, 2002 in connection with the reclassification of our Series A Shares and Series L Shares.

On June 4th, 2008, certain articles of the Company’s Bylaws were modified at the General Shareholders’ Meeting. The modification to Article 14 added further restrictions to the acquisition or the transfer of the Company’s shares providing more specific detail with respect to the requirements and authorizations required in order to acquire five percent or more of the Company’s shares. Article 25 was modified in order to comply with the Mexican Exchange Law (Ley del Mercado de Valores). Finally, Article 27 was modified to clarify which shareholders are required to sign the Shareholders’ Meeting Attendance Sheet. This General Shareholders’ Meeting was properly formalized in public deed number 18,196 (filing before the Public Commerce Registry pending) by and before Mr. Juan Martín Álvarez Moreno, Public Brokerage number 46 of Mexico City, Federal District.

On December 15, 2009, certain articles of the Company’s Bylaws were modified at the General Shareholders’ Meeting. The modification to Article 6 approved a capital increase. This General Shareholders’ Meeting was properly formalized in public deed number 21,851 (filed before the Public Commerce Registry pending) by and before Mr. Juan Martín Álvarez Moreno, Public Brokerage number 46 of Mexico City, Federal District.

Our statement of corporate purposes authorizes us to engage in, among other things, shipping and transportation services, the development, organization and management of all types of companies or entities, the acquisition of shares or units of the capital stock of other companies or entities, and generally, to carry out and execute all acts, transactions, agreements and operations of any nature as may be necessary or convenient in furtherance of our corporate purposes.

Board of Directors

Our business and affairs are managed by the Board of Directors and by a General Director. The Board of Directors consists of not more than 21 nor fewer than seven persons, provided that at least 25% of the directors are independent. Our directors are elected annually at the Annual General Shareholders’ Meeting. The Board of Directors shall always have a Chairman, a First Vice-Chairman and a Second Vice-Chairman and other Directors. The position of Second Vice-Chairman is currently vacant.

The directors (whenever elected) shall remain in office for the period of time stated below, calculated from the date of their appointment. The directors may be re-elected and, in case of the failure to appoint their substitute or if the designated substitute does not take office, the directors in office being substituted shall continue to perform their duties for up to 30 calendar days following the date of expiry of the term for which they were appointed:

Position in the Board of Directors	Term
Chairman	7 years
First Vice-Chairman	7 years
Second Vice-Chairman	Between 3 and 7 years (As determined by the General Shareholders’ Meeting that elects him/her.)
Other Directors	1 year
	Except that in no event whatsoever shall more than one third (1/3) of the member directors be replaced for any fiscal year of the Company.

In the event of the permanent absence of the Chairman or of any of the Vice-Chairmen, the Board of Directors, at the first meeting held after said permanent absence shall temporarily appoint from among its members or persons outside the same, the director or directors that shall fill relevant vacancies. Also, in the event of resignation or permanent absence of any of the other directors, the Board of Directors shall make the appointments of temporary

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directors as may be required for the continuance of the Board’s integration and duties. In both cases, a General Ordinary Shareholders’ Meeting shall be called as soon as possible to ratify or make definitive appointments of the relevant directors and, in any case, in the absence of said call, the first General Shareholders’ Meeting held after any of said events shall carry out the final appointment.

The Board of Directors shall appoint a Secretary and a Deputy Secretary, who shall not be a part of the Board of Directors. Said Secretary and Deputy Secretary may at any time be removed by the Board of Directors and their temporary and final absences shall be covered by the persons appointed by the Board of Directors. Despite the fact that the Secretary and the Deputy Secretary are not members of the Board of Directors of the Company, they may sign jointly or severally and instruct the publication of any call to the Shareholders’ Meeting of the Company ordered or resolved by the Board of Directors or the Audit and Corporate Practices Committee.

The meetings of the Board of Directors may be ordinary or extraordinary. The ordinary meetings shall be held periodically on the dates and times designated by such Board of Directors, provided that such Board of Directors meets at least 4 times during each fiscal year. The extraordinary meetings shall be held when the Chairman of the Board of Directors determines or at the request of 25% of the directors. The Board of Directors shall meet at the Company’s registered office or at any other place in Mexico or abroad as determined beforehand in the respective call. The meetings of the Board of Directors shall be presided over by the Chairman and in his absence, by the alternate Chairman and, in the absence of the alternate Chairman, by any director designated by the directors present at the meeting in question, by a majority of votes.

In order for a Board of Directors meeting to be valid, at least half of the directors that make up the Board of Directors from time to time must be in attendance and the Chairman and a Vice-Chairman shall always and in any event be in attendance. If a meeting of the Board of Directors may not be held due to the lack of quorum or the absence of the Chairman and a Vice-Chairman, the call shall be repeated as many times as needed. In order for the resolutions of the Board of Directors to be valid, the favorable vote of the majority of the directors present at the meeting in question is required. In the event of a tie, the Chairman of the Board of Directors, or his alternate, as applicable, shall have the tie-breaking vote.

For resolutions of the Board of Directors to be valid in connection with the matters listed below, the favorable vote of (i) the Chairman of the Board of Directors and (ii) the First Vice-Chairman or the Second Vice-Chairman is required. The following matters shall be decided upon exclusively by the Board of Directors of the Company:

1. The approval and/or modification of the annual budget, which must be approved for each fiscal year of the Company;

2. The imposition or creation of any lien on any of the assets of the Company and/or of the corporations controlled by the Company, or the resolution of the Company and/or of the corporations controlled by the Company, to guarantee obligations of the Company and/or of its subsidiaries, or to guarantee obligations of third parties, in all of said cases, when the value of any of said transactions involves in a single act or in a series of related acts, an amount equal to or higher than five percent of the total consolidated assets of the Company during a calendar year;

3. The decision to begin a new business line or the suspension of any business line developed by the Company or by any corporation in which the Company participates, either directly or indirectly;

4. Any decision related to the acquisition or sale of assets (including shares or equity interests or their equivalent, in any corporation controlled or not controlled by the Company or in which the Company has a significant share, or to any financing and/or the creation of any liens, when the value of any of said transactions involves in a single act or in a series of related acts, an amount equal to or higher than five percent of the total consolidated assets of the Company during a calendar year;

5. The determination of the manner in which the Company shall exercise its voting rights regarding shares or equity interests (or their equivalent) issued by its subsidiaries or entities in which the Company owns at least 20% of the capital stock thereof; and

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6. The establishment of any committee of the Company other than the Audit and Corporate Practices Committee.

The Board of Directors shall primarily have the duty of establishing general strategies for the direction of the business of the Company and its subsidiaries and that of overseeing the management and direction of the same and the performance of the relevant managers or officers. Such Board may establish one or more committees. In any event, the Company shall establish one or more committees in charge of the duties of audit and corporate practices.

General Director

The General Director, or Chief Executive Officer, shall be in charge of the day-to-day management of the Company, the direction and execution of the businesses of the Company and of its subsidiaries, subject to the strategies, policies and guidelines approved by the Board of Directors or, as the case may be, by committees created pursuant to the corporate Bylaws.

In order to fulfill his duties, the General Director shall have the powers granted to him by the Board of Directors at the time of his appointment or at any other time after his appointment. For the exercise of his duties and activities and the fulfillment of his obligations, the General Director shall be assisted by all the relevant managers and other employees of the Company and of the corporations controlled by the Company.

Audit and Corporate Practices Committee

The Board of Directors of the Company must establish a committee to carry out the audit and corporate practices functions that shall be integrated by at least three independent directors appointed by the Board of Directors, which members are proposed by the Chairman. The foregoing notwithstanding, the Chairman of the Audit and Corporate Practices Committee must be appointed and/or removed from his position exclusively by the General Shareholders’ Meeting and he must always be an independent director. The Chairman of the Audit and Corporate Practices Committee in no event whatsoever may preside over the Board of Directors.

The oversight of the management, direction and execution of the business of the Company and of its subsidiaries shall be entrusted to the Board of Directors through the aforementioned Audit and Corporate Practices Committee, as well as through the individuals or corporations that carry out the external audit of the Company for each fiscal year.

Capital Stock

To conform to the provisions of the new Mexican Securities Law, our Series A Shares of capital stock were converted into nominative common shares without par value (“Shares”), thereby deleting any series. The rights of the Series A Shares and the Shares are identical.

Consequently, our total capital stock is made up of 103,760,541 Shares, of which 1,577,700 are held in treasury. As a result of a translation adjustment effective January 1, 2012, our stated total capital stock increased by $994,720,659 from $1,222,011,712. Accordingly, our total stated capital stock is $2,216,732,371.

Registration and Transfer

All Shares are evidenced by share certificates in registered form. Mexican law requires that all shares be represented by a certificate, although a single certificate may represent multiple shares of stock. Certificates may be issued in the name of the registered holder. All of our share certificates are issued in the name of the registered holder. Mexican law also requires that all transfers, encumbrances and liens on nominative shares must be recorded in the share registry book and are only enforceable against us and third parties after such registration occurs.S.D. Indeval, S.A. de C.V. (“Indeval”) is the registrar and transfer agent for the Shares held in book-entry form. A global certificate representing all Shares in book entry form is deposited at Indeval. Shareholders holding their share certificates directly are required to be recorded as such by the secretary of the Company in our share registry book.

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Shareholders’ Meetings

Shareholders are entitled to vote on all matters at ordinary or special shareholders’ meetings. The Board of Directors will convene an Annual Shareholders’ Meeting at least once a year on the date determined by the Board of Directors within the first four months following the end of the fiscal year. In addition to dealing with the matters included on the agenda, the shareholders’ meeting should discuss, approve or modify the report of the Board of Directors, of the General Director and of the committee(s) that carry out the duties of corporate and audit practices, related to (i) the day-to-day conduct of business, (ii) the general balance sheet, (iii) the statement of income and losses, (iv) the statement of changes in financial position, and (v) the statement of the change in shareholders’ equity for such fiscal year. At such meeting directors shall also be appointed as per our Bylaws for the next fiscal year and their compensation shall be determined.

All notices of shareholders’ meetings shall be published once in the official newspaper of the domicile of the Company and in one of the newspapers of major circulation in such domicile, at least 15 days prior to the date scheduled for the meeting to be held. In order for the Ordinary Shareholders’ Meetings to be considered legally convened as a result of the first call, at least half of the capital stock in circulation at that time must be represented thereat, and the resolutions of such meeting shall be valid when passed by a majority of the votes present.

Ordinary Shareholders’ Meetings require the attendance of shareholders holding at least half the shares that have the right to attend such meetings, and the affirmative vote of a majority of the holders present at any such meeting, in a first call, and in a second call, the affirmative vote of majority holders of shares that have the right to attend any such meeting irrespective of the number of shares presents thereat, in order to take action.

Extraordinary Shareholders’ Meetings require the attendance of shareholders holding at least 75% of the shares that have the right to attend and vote at any such meetings, and the affirmative vote of at least half the issued and outstanding shares having such voting right, in a first call, and in a second or subsequent call, the attendance and affirmative vote of at least half the issued and outstanding shares having the right to attend and vote at any such meeting in order to take action.

Shareholders may be present or represented by a simple proxy at shareholders’ meetings. Directors and statutory auditors of the Company may not represent any shareholder at any shareholders’ meeting.

In order to attend any meeting, shareholders must obtain an admission card prior to the meeting from Indeval or another financial institution in the United Mexican States or abroad. Such financial institution must notify the Company (telegraphic or facsimile means are authorized) of the name of the depositor, the number of shares deposited and the date on which the deposit was made. Admission cards to shareholders’ meetings may be regularly obtained through authorized brokers in the United Mexican States which, together with the list issued by Indeval, will be sufficient for any shareholder to obtain the corresponding admission card.

Limitation on Share Ownership

Mexican law and our corporate charter prohibit ownership of Shares by foreign investors. Any acquisition of Shares in violation of this charter provision would be null and void.

Any foreigner who acquires any interest or participation in our capital stock through CPOs will be considered a Mexican citizen insofar as Mexican law and we are concerned (except with respect to the right to own Shares) and will be deemed to understand and agree that such foreigner may not invoke the protection of his government in connection with his interest or participation in the Company, under penalty of forfeiture of such interest or participation in favor of the United Mexican States.

We contributed Shares of our capital stock to the Master Neutral Investment Trust(Fideicomiso Maestro de Inversion Neutra)(the “CPO Trust”) established with a 30-year term by Nacional Financiera, S.N.C. (the “CPO Trustee”) on November 24, 1989. The CPO Trustee authorized the issuance of non-redeemable ordinary participation certificates(certificados de participación ordinarios no amortizables)(“CPOs”) that correspond to our Shares. One CPO may be issued for each of our Shares contributed to the CPO Trust. CPOs constitute separate

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negotiable instruments different and apart from our Shares, and afford to their holders only economic rights attaching to Shares. Consequently, holders of CPOs are not entitled to exercise any voting rights with respect to the Shares held in the CPO Trust. Such voting rights are exercisable only by the CPO Trustee, which is required by the terms of the CPO Trust to vote such Shares in the same manner as holders of a majority of the outstanding Shares not held in the CPO Trust and voted at the relevant meeting.

Prior to its termination date, the CPO Trustee will sell Shares held by the CPO Trust, and deliver the proceeds thereof to CPO holders in proportion to their respective CPO holdings. Alternatively, we may establish a new trust to enable continued foreign equity participation in the Company. Although, we will endeavor to establish a new trust to substitute the CPO Trust, no assurance can be made that we will in fact establish or be able to establish such new trust.

Mexican and non-Mexican investors may hold CPOs without restrictions of any kind.

We note that because CPOs are negotiable instruments separate and apart from Shares of the Company, holders of CPOs do not qualify as shareholders, and may not exercise the minority rights afforded by the General Law of Mercantile Companies and Mexican Securities Law of the United Mexican States, except for the right to exercise a derivative action for civil liability against the Directors and relevant officers of the Company or its subsidiaries, as further detailed in section entitled“Minority Rights” below.

Acquisition of Share Capital

On December 20, 2006, the Company amended Article 14 of its Bylaws to provide that the consent of the Board of Directors would be required for acquisitions that would result in any person or group of persons acquiring five percent or more of our Shares whether in a single transaction or in several simultaneous or successive transactions, notwithstanding the number of shares that such person may own at such time. If the approved process is not complied with, the acquirer will not be entitled to vote the acquired Shares. The approved process will apply only to direct acquisitions of Shares and not to CPOs and ADSs. In addition, the acquisition of Shares by any Mexican national may also be subject to the applicable provisions of Mexican antitrust laws. The Board is required to resolve with respect to any request for authorization to acquire five percent or more of our Shares within a period of three months following the request and to take into account certain criteria as set forth in our Bylaws that relates to the consequences affecting the Company by such acquisition. Notwithstanding this restriction, in the event of a public offering for the acquisition of 100% of our Shares, no authorization by the Board of Directors in connection with such public offering is necessary and the Board of Directors is required by law to render an opinion related to the terms and conditions of such public offering which opinion is to be rendered pursuant to applicable regulations. Our Bylaws provide that any amendment to the aforementioned provision may only be approved at a General Extraordinary Shareholders’ Meeting, at which shares representing five percent or more of the capital stock of the Company have not voted against.

On June 4, 2008, Article 14 of the Company’s Bylaws was further modified at the General Shareholder’s Meeting. These modifications added further restrictions to the acquisition or the transfer of the Company’s shares providing more specific detail with respect to the requirements and authorizations required in order to acquire five percent or more of the Company’s shares.

Rights

1. Applicable to Shareholders, CPOs holders and the CPO Trustee

The shareholder, or group of shareholders representing at least five percent or more of the capital stock, may exercise a derivative action for civil liability against the directors and relevant officers of the Company, provided the complaint includes the total amount of the liabilities in favor of the Company, its subsidiaries or entities in which the Company owns 20% or more of the capital stock thereof, and not only the personal interest of the petitioners. The assets obtained as a result of the claim shall be for the benefit of the Company, its subsidiaries, or such entities, as applicable.

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Pursuant to the Mexican Securities Law, CPOs or ADSs holders, as well as the CPO Trustee, may also exercise the aforementioned civil liability action.

2. Applicable to Shareholders

The shareholder or group of shareholders representing at least 20% or more of the capital stock may oppose in court the resolutions of the General Shareholders’ Meetings, provided (i) the complaint is filed within the 15 days following the adjournment of the Shareholders’ Meeting, (ii) the plaintiffs have not attended the Shareholders’ Meeting or they have cast their vote against the resolution, and (iii) the complaint states the clause of the Company’s Bylaws or of the legal norm violated, as well as a description of the violation. Shareholders exercising such opposition right must deposit their Shares before a Notary Public or an authorized financial institution and their complaint shall be accompanied by evidence of such deposit. Deposited shares may not be withdrawn until a final judgment is rendered.

The shareholder or group of shareholders representing at least 10% of the capital stock shall be entitled to appoint, at the Annual General Ordinary Shareholders’ Meeting held in order to elect directors, a Regular Member and, as the case may be, his respective alternate. The appointment of any director carried out by a minority may only be reversed when all other directors are also removed, unless the removal is attributable to a justified reason according to the applicable law.

Holders of 10% or more of the capital stock of the Company may require the Chairman of the Board of Directors or of the Audit and Corporate Practices Committee to call a General Shareholders’ Meeting.

The shareholder or group of shareholders representing, at least, 10% of the shares represented at a Shareholders’ Meeting may request that the voting on any matter of which they are not sufficiently informed be postponed and in said case the voting on said matter shall be postponed for three calendar days, without the need for a new call. This right may be exercised only once for the same matter.

In addition, shareholders are entitled to (i) review all information and documents pertaining to the matters for which a Shareholders’ Meeting has been called at the offices of the Company and within at least 15 calendar days of the scheduled date of the meeting; (ii) request that certain relevant issues be dealt with at the meeting that were not originally on the agenda for the meeting, if called for under sundry or general matters in the relevant call for the meeting; (iii) be represented at the meeting by persons designated by them pursuant to standard proxy forms that are to be made available by the Company with at least 15 calendar days prior to the date scheduled for the meeting which will contain the name of the Company, the matters to be discussed at the meeting and spaces for instructions as to the manner of the vote; and (iv) execute agreements between or among different shareholders provided that any such shareholders’ agreement(s) must be disclosed to the Company within five business days following the date of their execution for disclosure thereof to the public through the relevant stock exchanges and disclosure of their existence in the annual reports of the Company, and provided further that such agreements will not affect any voting at any Shareholders’ Meeting of the Company, may not be enforced against the Company and will only be effective among the executing shareholders upon disclosure to the public as aforesaid.

Limitation of Officers’ and Directors’ Liability

In addition to voting for directors at the Annual Shareholders’ Meeting, shareholders are asked to vote upon the financial statements of the Company and the annual reports of the Board of Directors, the Audit and Corporate Practices Committee, and the General Director. If the holders of a majority of the votes entitled to be cast approve management’s performance, all shareholders are deemed to have released the directors and officers from claims or liability to us or our shareholders arising out of actions taken or any failure to take actions by any of them on our behalf during the prior fiscal year, with certain exceptions. Officers and directors may not be released from any claims or liability for criminal acts, fraud, self-dealing or gross negligence.

Members of the Board of Directors and the officers of the Company shall not incur, individually or jointly, any responsibility for the damages and/or losses they may cause to the Company or its subsidiaries or of entities in which the Company owns 20% or more of the capital stock thereof, derived from acts executed by, or decisions

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made, by any of them, to the extent that acting in good faith, any of the following exclusions of responsibility applies:

(i) They fulfill the requirements that the Bylaws and the applicable laws may stipulate for the approval of matters to be dealt with by the Board of Directors or, as the case may be, by committees of which they are members.

(ii) They make decisions or vote at the meetings of the Board of Directors or, as the case may be, committees to which they belong, based on the information provided by the relevant managers, the corporation providing the external audit services or the independent experts, whose capacity and credibility do not offer a cause for reasonable doubt.

(iii) They have selected the most suitable alternative, to the best of their knowledge and belief, or negative property damages had not been foreseeable, in both cases, based on the information available at the time of the decision.

(iv) They fulfill the resolutions of the Shareholders’ Meeting, provided these do not violate the law.

We shall indemnify and hold the directors, the General Director and all other relevant managers of the Company or of the mercantile corporations controlled by the Company harmless from all damages and/or losses that their performance may cause to the Company and the corporations controlled by the Company or in which it has a significant influence, except in the event of deceitful acts or acts in bad faith, unlawful acts in accordance with the applicable legislation or whose indemnity, pursuant to said legislation may not be agreed or granted by the Company. For said purposes, we may obtain liability insurance or any similar insurance and grant any bonds and bails that may be necessary or convenient. All legal costs related to the respective defense shall be payable by us against general expenses, which shall only be refunded to the Company by the director in question, the General Director or the relevant manager in question, when required pursuant to a firm court order releasing the Company from its indemnity obligations.

Liquidation Rights

Any liquidation of the Company shall be carried out in the manner provided under the valid General Law of Mercantile Companies. The shareholders’ meeting, in the act of agreeing to the dissolution, should establish the rules that, in addition to the legal provisions and the provisions provided herein, should dictate the actions of the liquidators. Holders of 75% of the votes entitled to be cast are required to approve a liquidation of the Company.

Dividends

Dividends are declared by the shareholders. All holders of common stock (represented by Shares, CPOs or ADSs) will share equally on a per share basis in any dividend declared by our shareholders.

Certain Voting Rights

Our only class of outstanding capital stock consists of Shares. Shares, when properly issued, are fully voting shares of capital stock without par value.

Preemptive and Other Rights

In case of a capital increase, except in the case of treasury shares (in which case no preemptive rights applies), the holders of Shares have the preemptive right to subscribe for the new shares issued as a result of a capital increase, in proportion to the number of Shares owned by each of them.

Material Contracts

See Item 5. “Operating and Financial Review and Prospects — Liquidity and Capital Resources.”

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Exchange Controls

There are currently no exchange controls in Mexico; however, Mexico has imposed foreign exchange controls in the past. Pursuant to the provisions of NAFTA, if Mexico experiences serious balance of payment difficulties or the threat thereof in the future, Mexico would have the right to impose foreign exchange controls on investments made in Mexico, including those made by U.S. and Canadian investors.

United States Federal Income and Mexican Federal Taxation

The following is a summary of certain United States federal income tax and certain Mexican federal tax consequences related to the acquisition, ownership, and disposition of our ADSs by certain holders.

The Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion and a Protocol thereto between the United States and Mexico became effective on January 1, 1994 and has been amended by additional protocols (collectively, the “Tax Treaty”). The United States and Mexico have also entered into an agreement concerning the exchange of information with respect to tax matters.

This summary is not intended as tax advice to any particular holder of ADSs, which can be rendered only in light of that holder’s particular circumstances. Accordingly, each holder of ADSs is urged to consult such holder’s tax advisor with respect to the specific tax consequences to such holder of the acquisition, ownership and disposition of our ADSs, including the availability and applicability of any tax treaty to such holder.

The summary with respect to certain United States federal income tax consequences is based on the Internal Revenue Code of 1986 (the “Code”), the Treasury Regulations promulgated thereunder, and administrative and judicial interpretations thereof, all as of the date of this Annual Report and as applicable in the current taxable year, and all of which are subject to change, possibly with retroactive effect, or to different interpretations. The summary with respect to certain Mexican federal taxes is based on the Mexican federal tax laws, the Tax Treaty, regulations issued thereunder, rulings and general rules issued by the Ministry of Finance and Public Credit (Secretaría de Hacienda y Crédito Público), official pronouncements and judicial decisions, all as of the date of this Annual Report, and all of which are subject to change, possibly with retroactive effect, or to different interpretations.

General

For purposes of this summary, a “U.S. holder” means a beneficial owner of ADSs, who is, for U.S. federal income tax purposes, (i) a citizen or individual resident of the United States, (ii) a corporation (or other entity taxable as a corporation) created or organized in or under the laws of the United States, any state therein or the District of Columbia, (iii) an estate, the income of which is subject to U.S. federal income taxation regardless of source, or (iv) a trust, if (A) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust or (B) the trust has a valid election in place to be treated as a United States trust. A “non-U.S. holder” is any holder other than a U.S. holder. The tax treatment of persons who hold their ADSs through a partnership (including an entity treated as a partnership for U.S. federal income tax purposes) generally will depend upon the status of the partner and the activities of the partnership. Partners in a partnership holding ADSs should consult their tax advisors.

For purposes of this summary, a “non-resident U.S. holder” is a U.S holder that is a non-resident of Mexico for Mexican federal tax purposes and that does not have a permanent establishment in Mexico. In general, for Mexican federal tax purposes, an individual is a resident of Mexico if he has established his home in Mexico, unless he has a home both in Mexico and abroad; in such case, an individual will be considered to be a resident of Mexico if the individual’s “center of vital interests” is in Mexico. For these purposes, the center of vital interests will be considered to be located in Mexico, among other cases, if either (i) more than 50% of the individual’s total income in a calendar year is derived from sources in Mexico, or (ii) the main center of the individual’s professional activities is located in Mexico. Mexican nationals who are state officials or state workers are deemed to be residents of Mexico, even though their individual center of vital interests is located abroad. A Mexican national is presumed to be a resident of Mexico unless such person can demonstrate otherwise. A legal entity is a resident of Mexico if it

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maintains the principal administration of its business or the effective location of its management in Mexico. If a legal entity or an individual is deemed to have a permanent establishment in Mexico for Mexican federal income tax purposes, all income attributable to such permanent establishment will be subject to Mexican federal income tax, in accordance with applicable laws.

If an individual or legal entity ceases to be a resident of Mexico for Mexican federal tax purposes, such individual or legal entity must make certain filings with the Mexican tax authorities generally within a 15-day period before its change of residency.

A non-resident of Mexico is an individual or legal entity that does not satisfy the requirements to be considered a resident of Mexico for Mexican federal tax purposes.

Certain Mexican Federal Tax Consequences

This summary of certain Mexican federal tax consequences relates only to non-resident U.S. holders of our ADSs. This summary does not address all of the Mexican tax consequences that may be applicable to specific holders of the Shares (including a holder that controls the Company, an investor that holds 10% or more of the Shares or holders that constitute a group of persons for purposes of Mexican law).

Dividends — Dividends distributed from net taxable profits generated after or during 2014, either in cash or in any other form, paid with respect to the Shares underlying the CPOs represented by our ADSs generally will not be subject to a 10% Mexican withholding tax. Our ADSs are not subject to Mexican withholding tax if such dividends were distributed from the net taxable profits generated before 2014.

Capital Gains — Capital gains arising from the sale or other disposition of our ADSs carried out through a stock exchange recognized under applicable Mexican tax law, generally will be subject to a 10% Mexican income tax to be withheld by the financial intermediary, except in cases when the transferor asserts its residency in a country with which Mexico has entered into a tax treaty for the avoidance of double taxation, in which case the non-resident holder will not be subject to Mexican tax.

In compliance with certain requirements, gains on the sale or other disposition of ADSs made in circumstances different from those set forth in the prior paragraph generally would be subject to Mexican tax, at the general rate of 25% of the gross income, regardless of the nationality or residence of the transferor. However, under the Tax Treaty, a holder that is eligible to claim the benefits of the Tax Treaty will be exempt from Mexican tax on gains realized on a sale or other disposition of our ADSs in a transaction that is not carried out through the Mexican Stock Exchange or other approved securities markets, so long as the holder did not own, directly or indirectly, 25% or more of our outstanding capital stock (including shares represented by our ADSs) within the 12-month period preceding such sale or other disposition.

Deposits and withdrawals of ADSs will not give rise to any Mexican tax or transfer duties.

In general, commissions paid in brokerage transactions for the sale of our ADSs on the Mexican Stock Exchange are subject to a value-added tax of 16%.

Other Mexican Taxes— There are no Mexican inheritance, succession taxes or value-added taxes applicable to the ownership, transfer or disposition of our ADSs. Gratuitous transfers of our ADSs may, in some circumstances, subject the recipient to Mexican federal income tax. There are no Mexican stamp, issue, registration or similar taxes or duties payable by non-resident U.S. holders with respect to our ADSs.

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Certain United States Federal Income Tax Consequences

U.S. Holders

The following is a summary of certain United States federal income tax consequences to U.S. holders of the acquisition, ownership and disposition of ADSs. This discussion does not purport to be tax or legal advice and may not be applicable depending upon a U.S. holder’s particular situation.

Each U.S. holder should consult such U.S. holder’s own tax advisor with respect to the current and, possibly future, U.S. federal, state, local and foreign tax consequences to such U.S. holder of the acquisition, ownership and disposition of ADSs.

This summary is directed solely at U.S. holders that hold their ADSs as capital assets and whose functional currency is the Dollar. This summary does not discuss all of the U.S. federal income tax consequences that may be relevant to U.S. holders, particularly those that may be subject to special treatment under U.S. federal income tax laws, such as partnerships, banks, financial institutions, thrifts, real estate investment trusts, regulated investment companies, insurance companies, dealers in securities or currencies, U.S. holders whose functional currency is not the U.S. dollar, tax-exempt investors, expatriates, former long-term U.S. residents, U.S. holders that reside outside the United States, persons who received shares in return for services rendered or in connection with their employment, securities traders who elect to account for their investments in ADSs on a mark-to-market basis, persons that own (or are deemed to own for U.S. tax purposes) 10% or more of the voting stock of the Company, or persons that hold their ADSs as part of a hedge, straddle, conversion or other integrated transaction. This summary does not discuss any United States federal estate, gift or alternative minimum tax consequences or the tax laws of any state, local or foreign government that may be applicable.

For United States federal income tax purposes, a holder of an ADS generally will be treated as the beneficial owner of the CPOs represented by such ADS and such CPOs should represent a beneficial interest in the underlying Shares represented by such CPOs.

Distributions— Distributions with respect to our ADSs that are paid out of our current or accumulated earnings and profits (as determined for United States federal income tax purposes) will be includible in the gross income of a U.S. holder as ordinary dividend income when the distributions are received by CPO trustee, and will not be eligible for the dividends received deduction otherwise allowable to U.S. holders that are corporations. To the extent that a distribution exceeds our current and accumulated earnings and profits, it will be treated first as a nontaxable return of the U.S. holder’s adjusted tax basis in its ADSs to the extent of such tax basis, and then as gain from the sale or exchange of a capital asset.

A U.S. holder may be entitled, subject to a number of complex limitations and conditions (including a minimum holding period requirement), to claim a U.S. foreign tax credit in respect of any Mexican income taxes withheld on dividends received in respect of the ADSs. A U.S. holder who does not elect to claim a credit for any foreign income taxes paid during the taxable year may instead claim a deduction in respect of such income taxes provided the U.S. Holder elects to deduct (rather than credit) all foreign income taxes for that year. Dividends received in respect of ADSs generally will be treated as foreign-source income, subject to various classifications and other limitations and generally will be treated as passive category income for most U.S. Holders. The rules relating to computing foreign tax credits or deducting foreign taxes are extremely complex, and U.S. holders should consult their own tax advisors regarding the availability of foreign tax credits under their particular circumstances.

The amount of any dividend paid in Pesos will be includible in a U.S. Holder’s gross income in a U.S. dollar amount calculated by reference to the exchange rate in effect on the day the pesos are actually or constructively received by the CPO trustee, regardless of whether the Pesos are converted into Dollars at that time. A U.S. holder will have a basis in the Pesos received equal to their Dollar value on the date of receipt. If the distribution is converted into Dollars on the date of receipt, U.S. holders should not be required to recognize foreign currency gain or loss in respect of the dividend income. Any gains or losses resulting from the conversion of Pesos into Dollars after the date on which the distribution is received generally will be treated as U.S. source ordinary income or loss.

Subject to certain exceptions for short-term and hedged positions, certain dividends received with respect to the ADSs by an individual U.S. holder may be subject to United States federal income tax at preferential rates applicable to long-term capital gain if the dividends are “qualified dividends.” Qualified dividends with respect to an individual U.S. holder generally include dividends that are received from a “qualified foreign corporation”, provided the U.S. holder meets certain holding period requirements with respect to its ownership of such qualified foreign

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corporation. A qualified foreign corporation generally includes a foreign corporation if (A) (i) its shares, including its ADSs, are readily tradable on an established securities market in the United States, or (ii) it is eligible for the benefits of a comprehensive income tax treaty with the United States that the Internal Revenue Service (“IRS”) has approved for purposes of the qualified dividend rule, and (B) it was not a passive foreign investment company (“PFIC”) in the taxable year in which the dividend was paid or in the preceding taxable year. The U.S. Treasury has approved the Tax Treaty for the purposes of the qualified dividend rules, and we believe that we should be eligible for the benefits of the Tax Treaty. Further, as discussed below, we believe that we are not a PFIC. Therefore, we believe that dividends paid to an individual U.S. holder with respect to the ADSs may be subject to U.S. federal income tax at preferential rates applicable to long-term capital gain, provided such U.S. holder otherwise meets the requirements for the application of such rate. U.S. holders should consult their tax advisers regarding the availability of the preferential dividend tax rates in light of their particular circumstances.

Dispositions— In general, upon the sale or other disposition of ADSs, a U.S. holder will recognize gain or loss equal to the difference between the amount realized on the sale or disposition (in Dollars, generally determined at the spot rate on the date of disposition if the amount realized is denominated in a foreign currency) and the U.S. holder’s adjusted tax basis in the ADSs (in Dollars). The gain or loss generally will be long-term capital gain or loss if the ADSs have been held for more than one year on the date of the sale or other disposition. Certain non-corporate U.S. Holders (including individuals) may be eligible for preferential rates of U.S. federal income tax in respect of long-term capital gains. The deductibility of capital losses is subject to limitations. Deposits and withdrawals of CPOs by a U.S. holder in exchange for ADSs generally will not result in the realization of gain or loss for U.S. federal income tax purposes. Gain or loss recognized by a U.S. holder on a sale or other disposition of ADSs generally will be treated as gain or loss from sources within the United States for United States foreign tax credit purposes.

In addition, under current law, certain U.S. Investors that are individuals, estates or trusts are required to pay an additional 3.8% tax on various types of investment income. Such U.S. Investors should consult their tax advisors regarding the effect, if any, of the applicability of this tax with respect to an investment in our ADSs.

The rules governing foreign tax credits are complex and U.S. holders should consult their own tax advisors regarding the application of these rules in their particular circumstances.

PFIC— A non-U.S. corporation is a PFIC for any taxable year in which, after applying relevant look-through rules with respect to the income and assets of subsidiaries:

• 75% or more of its gross income consists of passive income; or

• 50% or more of the average quarterly value of its gross assets consists of assets that produce, or are held for the production of, passive income.

“Passive income” for this purpose includes, for example, dividends, interest, royalties, rents and gains from commodities and securities transactions. Passive income does not include rents and royalties derived from the active conduct of a trade or business. If the stock of a non-U.S. corporation is publicly traded for the taxable year, the asset test is applied using the fair market value of the assets for purposes of measuring such corporation’s assets. If we own at least 25% (by value) of the stock of another corporation, we will be treated, for purposes of the PFIC tests, as owning our proportionate share of the other corporation’s assets and receiving our proportionate share of the other corporation’s income for purposes of the PFIC income and asset tests.

We believe that we were not a PFIC for United States federal income tax purposes for the 2015 taxable year and we do not anticipate being a PFIC for the 2016 taxable year. However, because PFIC status depends upon the composition of our income and assets and the market value of our assets from time to time (including certain equity investments of less than 25 percent) and because the characterization of certain income and assets is uncertain under the PFIC rules, there can be no assurance that we will not be considered a PFIC for any taxable year. If we were treated as a PFIC for any taxable year during which a U.S. holder held ADSs, certain adverse consequences could apply to such U.S. holder.

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In general, if we were treated as a PFIC for any taxable year, gain recognized by a U.S. holder on the sale or other disposition of ADSs would be allocated ratably over the U.S. holder’s holding period for such ADSs. The amounts allocated to the taxable year of the sale or other disposition and to any year before we became a PFIC would be taxed as ordinary income. The amount allocated to each other taxable year would be subject to tax at the highest rate in effect for individuals or corporations, as appropriate, and an interest charge would be imposed on the tax liability attributable to such amounts. Further, generally, to the extent any distribution during a taxable year to a U.S. holder in respect of ADSs exceeds 125% of the average of the annual distributions in respect of such ADSs received by such U.S. holder during the preceding three taxable years; such “excess distribution” would be subject to taxation as described in the preceding sentence. Certain elections may be available to mitigate the adverse consequences resulting from PFIC status.

If we were regarded as a PFIC, a U.S. Holder would be required to file an annual information return on IRS Form 8621 relating to the holder’s ownership of the shares or ADSs. A failure to file this return will suspend the statute of limitations with respect to any tax return, event, or period to which such report relates (potentially including with respect to items that do not relate to a U.S. Holder’s investment in the ADSs). This requirement would be in addition to other reporting requirements applicable to ownership in a PFIC.

Information Reporting and Backup Withholding — Dividends on, and proceeds from the sale or other disposition of, ADSs paid to a U.S. holder generally may be subject to the information reporting and backup withholding rules under the Code unless such U.S. holder (i) is a corporation or comes within certain exempt categories, and demonstrates this fact when so required, or (ii) provides a correct taxpayer identification number, certifies that it is not subject to backup withholding and otherwise complies with applicable requirements of the backup withholding rules. Any amount withheld under these rules generally will be allowed as a credit against the U.S. holder’s United States federal income tax liability, provided certain information is timely provided to the IRS.

Certain U.S. Holders (including individual U.S. Holders) that hold certain specified foreign financial assets, including stock in a foreign corporation, with values in excess of certain thresholds are required to file Form 8938 with their United States Federal Income Tax return. Form 8938 requires disclosure of information concerning such foreign assets, including the value of the assets. Failure to file the form when required results in penalties. An exemption from reporting applies to foreign assets held through a US financial institution, generally including a non-U.S. branch or subsidiary of a U.S. institution and a U.S. branch of a non-US institution.

Non-U.S. Holders

A non-U.S. holder generally will not be subject to United States federal income or withholding tax on dividends received with respect to ADSs, unless such income is effectively connected with the conduct by such non-U.S. holder of a United States trade or business (or, in the case of a non-U.S. holder that qualifies for the benefits of an income tax treaty with the United States, if such income is attributable to a permanent establishment or fixed place of business of such non-U.S. holder in the United States).

A non-U.S. holder of ADSs will not be subject to United States federal income or withholding tax on gain realized on the sale or other disposition of ADSs, unless (1) such gain is effectively connected with the conduct by such non-U.S. holder of a United States trade or business (or, in the case of a non-U.S. holder that qualifies for the benefits of an income tax treaty with the United States, such gain is attributable to a permanent establishment or fixed place of business of such non-U.S. holder in the United States), or (2) in the case of gain realized by an individual non-U.S. holder, such non-U.S. holder is present in the United States for 183 days or more in the taxable year of the sale or other disposition and certain other conditions are met.

Although non-U.S. holders generally are exempt from backup withholding, a non-U.S. holder may be required to comply with certification and identification procedures in order to establish such exemption.

Documents On Display

All documents concerning the Company referred to herein may be inspected at our offices in Mexico City. We will provide a summary of such documents in English upon request. In addition, the materials in this Annual Report

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on Form 20-F, and exhibits thereto, may be inspected and copied at the Securities and Exchange Commission’s public reference room in Washington, D.C. Please call the Securities and Exchange Commission at 1-800-SEC-0330 for further information on public reference rooms. The Securities and Exchange Commission maintains a web site on the Internet athttp://www.sec.gov that contains reports and other information regarding us.

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The following information includes “forward-looking statements” that involve risk and uncertainties. Actual results could differ from those presented. All information below is presented under IFRS as of December 31, 2015, in pesos.

We are exposed to market risks arising from changes in interest rates, foreign exchange rates, equity prices and commodity prices. We use derivative instruments, on a selective basis, to manage these risks. We do not use derivative instruments for trading or speculative purposes. We maintain and control our treasury operations and overall financial risk through policies approved by senior management and our Board of Directors.

Foreign Currency Risk

A majority of the Company’s revenues are denominated in U.S. dollars, and the majority of our costs and expenses are denominated in Pesos. As such, the Company is exposed to foreign currency risk and may occasionally use currency derivatives to manage alternating levels of exposure. These derivatives allow the Company to offset an increase in operating and/or administrative expenses arising from foreign currency appreciation or depreciation against the U.S. dollar.

The Company’s income from operations may therefore be materially affected by variances in the exchange rate between the U.S. dollar and the Mexican Peso. The Company has sought to minimize its exposure to foreign currency risk by holding its debt primarily in Mexican Pesos. Mexican Pesos historically have been subject to greater risk of devaluation and have tended to depreciate against the U.S. dollar. Currently, approximately 95% of the Company’s indebtedness is denominated in Mexican Pesos, most of which is long-term debt incurred in connection with the Company’s Trust Certificates Program. Certificates issued under the Trust Certificates Program have a 20-year term and do not require the Company to make any principal payments prior to maturity.

The Company currently believes that its strategy of holding the majority of its debt as long-term, Mexican Peso-denominated debt will allow it to effectively manage its foreign currency risk without the use of currency derivatives or other hedging instruments. However, the Company has in the past, and may from time to time in the future, enter into currency derivatives denominated in Mexican Pesos or other relevant currencies to attempt to manage its foreign currency risk. These derivatives should allow the Company to offset an increase in operating and/or administrative expenses arising from foreign currency appreciation or depreciation against the U.S. dollar.

At December 31, 2015 and 2014, the Company had monetary assets and liabilities denominated in currencies other than the Mexican peso as follows:

	December 31,
	(in thousands of Pesos)
	2015			2014
Assets	$	1,445,145		$	1,723,750
Liabilities		(1,225,261	)		(1,365,904	)
	$	219,884		$	357,846

The objective of the Company when using these derivatives is always to manage specific risks and exposures, and not to trade such instruments for profit or loss. A majority of the Company’s indebtedness is denominated in Pesos, and most of this debt is fixed-rate.

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Interest Rate Risk

We depend upon debt-financing transactions, including debt securities, bank and vendor credit facilities and leases, to finance our operations. These transactions expose us to interest rate risk, with the primary interest rate risk exposure resulting from changes in the relevant base rates (CETES, TIIE, LIBOR and/or prime rate) which are used to determine the interest rates that are applicable to borrowings under our credit facilities. We are also exposed to interest rate risk in connection with the refinancing of maturing debt.

The table below provides information about the Company’s debt obligations. For debt obligations, the table represents principal cash flows and related weighted average interest rates by expected maturity dates. The information is presented in millions of pesos, which is the Company’s reporting currency.

	Breakdown of Fixed and Variable Rates of Financial Obligations(1)
	Expected Maturity
Liabilities	2015			2016			2017			2018			Thereafter			Total			Fair Value
	(in millions of pesos)
Long-Term Debt
Fixed Rate	$	465.0		$	8.2		$	8.2		$	11.3		$	140.8		$	633.5		$	633.5
Average Interest Rate		10.34	%		15.92	%		15.92	%		15.92	%		15.92	%		10.34	%		*	*
Variable Rate	$	106.0		$	44.1		$	34.7		$	36.1		$	10,578.3		$	10,799.2		$	10,799.2
Average Interest Rate		5.83	%		5.83	%		5.82	%		5.81	%		5.80	%		5.83	%		*	*

(1) Information as of December 31, 2015.

** Not applicable

From time to time, we use derivative financial instruments such as interest rate cap transactions for hedging purposes in order to reduce our exposure to increases in interest rates.

On January 10, 2014, the Company entered into a one-year interest cap transaction (August 2014 to August 2015) with Credit Suisse in an amount of Ps. 10.6 billion to hedge against fluctuations in the TIIE rates in Mexico. This contract was entered into in connection with the fourth issuance of the Trust Certificates Program.

On April 8, 2015, the Company entered into a one-year interest cap transaction (August 2015 to August 2016) with Credit Suisse in an amount of Ps. 10.7 billion to hedge against fluctuations in the TIIE rates in Mexico. This contract was entered into in connection with the fourth issuance of the Trust Certificates Program.

Commodity Price Risk

The Company is exposed to price changes in the commodities markets for certain inventory goods, and specifically fuel. The Company purchases its diesel fuel on a spot basis within Mexico, and it purchases ship bunker fuel in the United States for certain of its operations. These purchases are affected by price changes in the international energy commodity market. In the past, the Company has entered into diesel fuel and other energy commodity derivatives transactions to manage these risks and may continue to engage in similar transactions in the future.

Inflation Rate Risk

A substantial increase in the Mexican inflation rate would have the effect of increasing our Peso-denominated costs and expenses, which could affect our results of operations and financial condition. High levels of inflation may also affect the balance of trade between Mexico and the United States and other countries, which could adversely affect our results of operations.

93

Derivative Instruments

As of December 31, 2015, the only derivative instruments held by the Company are the interest rate caps used for hedging purposes in the fourth issuance of certificates under our Trust Certificates Program.

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

American Depositary Shares

The Bank of New York Mellon, the depositary, collects its fees for delivery and surrender of ADSs directly from investors depositing CPOs or surrendering ADSs for the purpose of withdrawal or from intermediaries acting for them. The depositary collects fees for making distributions to investors by deducting those fees from the amounts distributed or by selling a portion of distributable property to pay the fees. The depositary may collect its annual fee for depositary services by deductions from cash distributions or by directly billing investors or by charging the book-entry system accounts of participants acting for them. The depositary may generally refuse to provide fee-attracting services until its fees for those services are paid.

Persons depositing or withdrawing CPOs must pay:	For:
US$5.00 (or less) per 100 ADSs (or portion of 100 ADSs)	•    Issuance of ADSs, including issuances resulting from a distribution of CPOs or rights or other property •    Cancellation of ADSs for the purpose of withdrawal, including if the deposit agreement terminates
US$.02 (or less) per ADS	•    Any cash distribution to ADS registered holders
US$.02 (or less) per ADSs per calendar year	•    Depositary services
A fee equivalent to the fee that would be payable if securities distributed to holders had been CPOs and the CPOs had been deposited for issuance of ADSs	•    Distribution of securities distributed to holders of deposited securities which are distributed by the depositary to ADS registered holders
Registration or transfer fees	•    Transfer and registration of CPOs on the register to or from the name of the depositary or its agent when a holder deposits or withdraws CPOs
Expenses of the depositary	•    Cable, telex and facsimile transmissions as expressly provided in the deposit agreement •    Converting foreign currency to U.S. dollars
Taxes and other governmental charges the depositary or the custodian have to pay on any ADS or CPO underlying an ADS, for example, stock transfer taxes, stamp duty or withholding taxes	•    As necessary
Any charges incurred by the depositary or its agents for servicing the deposited securities	•    As necessary

Fees payable by the depositary

The depositary has agreed to reimburse us for expenses we incur in connection with the establishment of the ADS facility, including legal fees, fees due to the previous depositary, investor relations expenses and other facility-related expenses. There are limits on the amount of expenses for which the depositary will reimburse us, but the amount of reimbursement available to us is not necessarily tied to the amount of fees the depositary collects from investors. The depositary has also agreed to pay its standard out-of-pocket administrative, maintenance and

94

shareholder services expenses for the ADSs. Such expenses include the expenses of postage and envelopes for mailing annual and interim financial reports, printing and distributing dividend checks, electronic filing of U.S. Federal tax information, mailing required tax forms, stationary, postage, facsimile and telephone calls, and certain investor relationship programs or special investor relations promotional services. We did not receive any reimbursements from the depositary during the years ended December 31, 2013, 2014 and 2015, respectively.

PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

None.

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

See Item 4. “Information on the Company — Organizational Structure — Reclassification of Series A and Series L Shares.”

ITEM 15. CONTROLS AND PROCEDURES

(a) Disclose Controls and Procedures.

The Company has evaluated, under the supervision and with the participation of management, including the Company’s Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures as of December 31, 2015. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based upon this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer each concluded that, as of the end of the 2015 fiscal year, our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by the Company in its reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported as and when required by the Securities and Exchange Commission’s applicable rules and forms, and is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

(b) Management’s annual report on internal control over financial reporting.

The Company is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. The Company’s internal control over financial reporting is a process designed under the supervision of the Company’s Chief Executive Officer and Chief Financial Officer that: (i) pertains to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets; (ii) provides reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements for external reporting in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorization of the Company’s management and directors; and (iii) provides reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedure may deteriorate. The Company, with the participation of its Chief Executive Officer and Chief Financial Officer, has assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2015. In making its assessment of internal control over financial reporting, management used the criteria in the 2013 Internal Control — Integrated Framework set forth by the Committee of Sponsoring Organizations (“COSO”) of the Treadway Commission.

95

As a result of this assessment, the Company’s management has determined that the Company’s internal control over financial reporting was effective as of December 31, 2015.

(c) Attestation report of the registered public accounting firm.

Not applicable.

(d) Changes in internal control over financial reporting.

As required by Rule 13a-15(d), under the Exchange Act, our management, including our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of our internal control over financial reporting to determine whether any change occurred during the period covered since the last report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Based on this evaluation, it has been determined that there has been no change during the period covered by this annual report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT

The Board of Directors of Grupo TMM maintains an Audit and Corporate Practices Committee which is comprised of three independent directors, each of whom has significant experience in analyzing and evaluating financial reports and an understanding of internal controls and procedures for financial reporting. On April 29, 2016, the General Assembly of Shareholders appointed as independent director Mr. Francisco Javier García-Sabaté Palazuelos, who is considered a financial expert in accordance with the standards described in Section 407 of the Sarbanes Oxley Act of 2002.

ITEM 16B. CODE OF ETHICS

Grupo TMM has adopted a code of ethical conduct entitled, “Code of Ethics,” covering all its officers, including its principal executive officer, principal financial officer and principal accounting officer, and all of its employees. We will provide a copy of the Company’s Code of Ethics free of charge upon written request sent to Grupo TMM, Avenida de la Cúspide, No. 4755, Colonia Parques del Pedregal, 14010 México City, México, Attn: Human Resources.

We last updated our Code of Ethics in February 2014. We have not granted any waivers to any provision of our Code of Ethics to any officer, employee or member of the Audit or Corporate Practices Committee during the Company’s fiscal year ended December 31, 2015.

ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table reflects our principal accounting fees and services for the years 2015 and 2014:

GRUPO TMM, S. A. B.

Summary of Auditors’ Payments

(In thousands of Pesos)

	As of December 31,
	2015		2014
Audit Fees(a)	$	13,252.3	$	12,756.8
Tax Fees(b)		—		189.0
Total(c)	$	13,252.3	$	12,945.8

(a) Audit Fees—Fees relate to the review of our Annual Financial Statements and Annual Report filed with the SEC and review of other SEC filings.

96

(b) Tax Fees—Fees relate to specific tax issues, in compliance with the applicable tax laws.

(c) Total does not include Mexican tax (“Impuesto al Valor Agregado” or “IVA”).

The Company’s Audit Committee pre-approves all fees for the services provided by the independent auditors, including the fees for 2014 and 2015 in accordance with the Company’s policies and procedures.

ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Not applicable.

ITEM 16E. PURCHASE OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

None.

ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT

None.

ITEM 16G. CORPORATE GOVERNANCE

Not applicable.

PART III

ITEM 17. FINANCIAL STATEMENTS

Not applicable.

ITEM 18. FINANCIAL STATEMENTS

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

Contents	Page
Report of Independent Registered Public Accounting Firm		F-1
Consolidated Statements of Financial Position		F-3
Consolidated Statements of Profit or Loss		F-4
Consolidated Statements of Comprehensive (Loss) Income		F-5
Consolidated Statements of Changes in Stockholders’ Equity		F-6
Consolidated Statements of Cash Flows		F-7
Notes to the Consolidated Financial Statements		F-8

97

Grupo TMM, S.A.B. and Subsidiaries

ITEM 19. EXHIBITS

Documents filed as exhibits to this Annual Report:

Exhibit No.	Exhibit
1.1	Amended and Restated Bylaws of Grupo TMM, S.A.B., as registered with the Public Registry of Commerce on January 15, 2010, together with an English translation (incorporated herein by reference to Exhibit 1.1 of the Company’s Form 20-F filed on June 30, 2010).
2.1	Specimen Ordinary Participation Certificate, together with an English translation (incorporated herein by reference to Exhibit 4.1 of the Registration Statement on Form F-1 — Registration No. 33-47334).
2.2	Form of Amended and Restated Deposit Agreement (the “Deposit Agreement”) among the Company, The Bank of New York Mellon, as depositary and all owners and holders of American Depositary Shares (incorporated by reference to Exhibit 1 of the Company’s Registration Statement on Form F-6 — Registration No. 333-163562).
2.3	Trust Agreement, dated November 24, 1989 (the “CPO Trust Agreement”), between Nacional Financiera, S.N.C., as grantor, and as CPO Trustee, together with an English translation (incorporated herein by reference to Exhibit 2 of the Company’s Registration Statement on Form F-6 — Registration No. 333-163562).
2.4	Public Deed, dated January 28, 1992, together with an English translation (incorporated herein by reference to Exhibit 4.5 of the Registration Statement on Form F-1 — Registration No. 33-47334).
6.1*	Computation of earnings per share under IFRS.
7.1*	Computation of ratio of earnings to fixed charge under IFRS.
8.1*	List of Main Subsidiaries.
12.1*	Section 302 Certification of Chief Executive Officer.
12.2*	Section 302 Certification of Chief Financial Officer.
13.1*	Section 906 Certification of Chief Executive Officer.
13.2*	Section 906 Certification of Chief Financial Officer.

* Filed herewith.

98

Consolidated Financial Statements and Report of the Independent Registered Public Accounting Firm

Grupo TMM, S.A.B. and Subsidiaries

December 31, 2015, 2014 and 2013

Grupo TMM, S.A.B. and Subsidiaries

Contents

	Page
Report of the independent registered public accounting firm		1 - 2
Consolidated statements of financial position		3
Consolidated statements of profit or loss		4
Consolidated statements of comprehensive income		5
Consolidated statements of changes in stockholders’ equity		6
Consolidated statements of cash flow		7
Notes to the consolidated financial statements		8
1 General information		8
2 Changes in accounting policies		11
3 Summary of significant accounting policies		12
4 Going concern		23
5 Cash and cash equivalents		24
6 Trade receivables		25
7 Other accounts receivable		25
8 Materials and supplies		26
9 Prepayments		26
10 Leases		26
11 Concession rights		27
12 Property, machinery and equipment		28
13 Other non-current assets		29
14 Intangible assets		30
15 Impairment of long-lived assets		30

Grupo TMM, S.A.B. and Subsidiaries

16 Financial assets and liabilities	32
17 Balances and transactions with related parties	37
18 Accounts payable and accrued expenses	38
19 Disposal of assets and groups classified as held for sale and discontinued operations	38
20 Stockholders’ equity	39
21 Other income (expenses)	41
22 Interest expense and other financial costs	42
23 Income tax and tax loss carryforwards	42
24 Segment reporting	44
25 Employee benefits	46
26 Loss per share	50
27 Fair value measurement	50
28 Financial instruments risk	52
29 Capital management policies and procedures	56
30 Commitments and contingencies	57
31 Authorization of the consolidated financial statements	60

1

Report of the 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 for GRUPO TMM, S.A.B. and subsidiaries (“Grupo TMM” or the “Company”), as of December 31, 2015 and 2014, and the related consolidated statements of profit or loss, comprehensive income, changes in stockholders’ equity, and cash flows for each of the three years ended December 31, 2015, 2014 and 2013. 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. We were not 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 consolidated financial statements referred above present fairly, in all material respects, the financial position of Grupo TMM, S.A.B. and Subsidiaries as of December 31, 2015 and 2014, and the results of their operations and their cash flows for each of the three years ended December 31, 2015, 2014 and 2013, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

2

The accompanying consolidated financial statements have been prepared under the assumption the Company will continue as a going concern. As discussed in Note 4 to the financial statements, the Company has incurred recurring losses, 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. Management’s plans in this regard are also described in Note 4. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

As discussed in Note 3.7 to the consolidated financial statements, the Company elected to change its method of accounting for its vessels from cost model to revaluation model in 2014, in accordance with IAS 16 “Property, Plant and Equipment”; the change in this accounting policy is recognized prospectively.

/s/ Salles Sainz Grant Thornton, S.C.

SALLES SAINZ GRANT THORNTON, S.C.

Mexico City

May 2, 2016

Grupo TMM, S.A.B. and Subsidiaries 3

Consolidated statements of financial position

As at December 31, 2015 and 2014

(Amounts in thousands of pesos)

	2015			2014
Assets
Current
Cash and cash equivalents (Note 5)	$	1,045,359		$	743,046
Trade receivables—net (Note 6)		1,048,426			782,034
Other accounts receivable (Note 7)		191,635			947,123
Materials and supplies (Note 8)		102,455			118,596
Prepayments (Note 9)		21,542			30,361
Assets classified as held for sale (Note 19)		194,200			184,920
Total current assets		2,603,617			2,806,080
Non-current
Property, machinery and equipment—net (Note 12)		9,553,079			9,052,941
Concession rights—net (Note 11)		20,814			24,598
Other non-current assets (Note 13)		102,460			97,630
Intangible assets (Note 14)		136,138			132,754
Deferred income tax (Note 23)		—			810,324
Total non-current assets		9,812,491			10,118,247
Total assets	$	12,416,108		$	12,924,327
Liabilities
Short-term
Short-term portion of the financial debt (Note 16)	$	684,748		$	918,638
Trade payables		279,044			371,583
Accounts payable and accrued expenses (Note 18)		458,201			612,862
Related parties (Note 17)		28,291			18,110
Liabilities related to assets classified as held for sale (Note 19)		107,702			94,150
Total short-term liabilities		1,557,986			2,015,343
Long-term
Long-term portion of the financial debt (Note 16)		9,995,502			10,069,557
Employee benefits (Note 25)		211,242			201,882
Deferred income tax (Note 23)		219,572			—
Total long-term liabilities		10,426,316			10,271,439
Total liabilities		11,984,302			12,286,782
Stockholders’ equity (Note 20):
Share capital, 103,760,541 shares authorized and issued		2,216,733			2,216,733
Treasury shares (1,577,700 shares)		(46,805	)		(46,805	)
Other components of equity		2,253,361			1,520,980
Accumulated losses		(4,056,841	)		(3,121,644	)
Grupo TMM, S.A.B. Stockholders		366,448			569,264
Non-controlling interest (Note 3.1)		65,358			68,281
Total stockholders’ equity		431,806			637,545
Total liabilities and stockholders’ equity	$	12,416,108		$	12,924,327

The attached notes are part of these consolidated statements.

Grupo TMM, S.A.B. and Subsidiaries 4

Consolidated statements of profit or loss

For the years ended December 31, 2015, 2014 and 2013

(Amounts in thousands of pesos, except number of shares)

	2015			2014			2013
Revenue from transportation	$	3,128,775		$	2,832,422		$	2,838,542
Costs and expenses:
Salaries, wages and employee benefits		648,762			635,943			667,244
Leases		685,150			637,211			606,596
Contracted services		535,122			346,982			377,830
Fuel, materials and supplies		225,498			200,361			206,955
Depreciation, amortization and loss from revaluation		671,057			855,312			585,607
Other costs and expenses		40,927			34,552			41,004
		2,806,516			2,710,361			2,485,236
Transportation profit		322,259			122,061			353,306
Other income, net (Note 21)		186,000			356,817			63,990
Operating income		508,259			478,878			417,296
Comprehensive financing cost:
Interest income		21,380			23,646			37,907
Interest expense and other financial costs (Note 22)		799,806			855,028			942,817
Exchange (loss) gain—net		15,686			(66,327	)		4,362
		(762,740	)		(897,709	)		(900,548	)
Loss before taxes		(254,481	)		(418,831	)		(483,252	)
Provision for taxes on income (Note 23)		(698,461	)		(4,682	)		(4,687	)
Loss before discontinued operations		(952,942	)		(423,513	)		(487,939	)
Loss on discontinued operations (Note 19)		(65,928	)		(90,968	)		(63,482	)
Net loss for the year	$	(1,018,870	)	$	(514,481	)	$	(551,421	)
Attributable to:
Non-controlling interest		(2,250	)		2,421			4,985
Grupo TMM, S.A.B. Stockholders		(1,016,620	)		(516,902	)		(556,406	)
	$	(1,018,870	)	$	(514,481	)	$	(551,421	)
Loss per share for the year from continuing operations	$	(9.326	)	$	(4.145	)	$	(4.775	)
Loss per share for the year from discontinued operations		(0.645	)		(0.890	)		(0.621	)
Total loss per share for the year	$	(9.971	)	$	(5.035	)	$	(5.396	)
Weighted average number of shares for the year		102,182,841			102,182,841			102,182,841

The attached notes are part of these consolidated statements.

Grupo TMM, S.A.B. and Subsidiaries 5

Consolidated statements of comprehensive income

For the years ended December 31, 2015, 2014 and 2013

(Amounts in thousands of pesos)

	2015			2014			2013
Net loss for the year	$	(1,018,870	)	$	(514,481	)	$	(551,421	)
Other comprehensive income:
Items that will not be subsequently reclassified to profit or loss
(Decrease) increase of non-controlling interest		(673	)		1,259			—
Actuarial gains (losses)		4,887			4,124			(1,654	)
Revaluation surplus (Note 27)		1,157,690			1,352,710			135,359
Income tax on other comprehensive income		(348,773	)		(407,050	)		(40,112	)
Total comprehensive income for the year		813,131			951,043			93,593
Comprehensive (loss) income for the year	$	(205,739	)	$	436,562		$	(457,828	)
Attributable to:
Non-controlling interest		(2,923	)		3,680			4,985
Grupo TMM, S.A.B. Stockholders		(202,816	)		432,882			(462,813	)
	$	(205,739	)	$	436,562		$	(457,828	)

The attached notes are part of these consolidated statements.

Grupo TMM, S.A.B. and Subsidiaries 6

Consolidated statements of changes in stockholders’ equity

For the years ended December 31, 2015, 2014 and 2013

(Amounts in thousands of pesos, except number of shares)

	Number of outstanding common shares		Share capital		Treasury shares			Accumulated losses			Other components of equity (Note 20)		Subtotal			Non controlling interest			Total stockholders’ equity
Balances as at December 31, 2012		102,182,841	$	2,216,733	$	(46,805	)	$	(2,463,934	)	$	893,201	$	599,195		$	59,616		$	658,811
Net loss for the year		—		—		—			(556,406	)		—		(556,406	)		4,985			(551,421	)
Other comprehensive income		—		—		—			(1,007	)		94,600		93,593			—			93,593
Comprehensive loss for the year														(462,813	)		4,985			(457,828	)
Balances as at December 31, 2013		102,182,841		2,216,733		(46,805	)		(3,021,347	)		987,801		136,382			64,601			200,983
Net loss for the year		—		—		—			(516,902	)		—		(516,902	)		2,421			(514,481	)
Other comprehensive income		—		—		—			416,605			533,179		949,784			1,259			951,043
Comprehensive income for the year														432,882			3,680			436,562
Balances as at December 31, 2014		102,182,841		2,216,733		(46,805	)		(3,121,644	)		1,520,980		569,264			68,281			637,545
Net loss for the year		—		—		—			(1,016,620	)		—		(1,016,620	)		(2,250	)		(1,018,870	)
Other comprehensive income		—		—		—			81,423			732,381		813,804			(673	)		813,131
Comprehensive loss for the year														(202,816	)		(2,923	)		(205,739	)
Balances as at December 31, 2015		102,182,841	$	2,216,733	$	(46,805	)	$	(4,056,841	)	$	2,253,361	$	366,448		$	65,358		$	431,806

The attached notes are part of these consolidated statements.

Grupo TMM, S.A.B. and Subsidiaries 7

Consolidated statements of cash flow

For the years ended December 31, 2015, 2014 and 2013

(Amounts in thousands of pesos)

	2015			2014			2013
Cash flows from operating activities:
Loss before taxes	$	(254,481	)	$	(418,831	)	$	(483,252	)
Adjustments to reconcile the loss with cash used in operating activities:
Depreciation, amortization and loss from revaluation		671,057			855,312			585,607
Other amortizations		76,196			81,778			84,832
Loss (profit) from the sale of property, machinery & equipment, net		26,308			(23,040	)		(9,240	)
Accrued interests		714,105			755,226			845,723
Gain on adjudication of property		—			—			(14,063	)
Exchange gain		46,273			58,200			(1,277	)
Gain from the sale of subsidiaries		(171,505	)		(342,088	)		(8,078	)
Changes in assets and liabilities:
Accounts receivable		(266,392	)		(180,430	)		(176,588	)
Other accounts receivable and related parties		(51,701	)		30,313			(5,401	)
Materials and supplies		16,141			5,050			(2,828	)
Prepayments		8,819			(18,171	)		716
Other accounts payable and accrued expenses		(204,164	)		(15,663	)		141,934
Other non-current assets		(8,214	)		(35,214	)		1,779
Employee benefits		9,360			3,323			(4,880	)
Operating activities, discontinued operations and available for sale		—			—			(71,273	)
Total adjustments		866,283			1,174,596			1,366,963
Cash generated from operating activities		611,802			755,765			883,711
Cash (used in) from discontinued operations, net		170			(696	)		(1,388	)
Cash from operating activities		611,972			755,069			882,323
Cash from investment activities
Sale of property, machinery & equipment		62,934			78,977			17,166
Acquisition of property, machinery & equipment		(101,886	)		(227,236	)		(290,766	)
Sale of subsidiaries		829,836			25,469			49,665
Investment activities discontinued business and available for sale		—			—			15,249
Cash used in investment activities		790,884			(122,790	)		(208,686	)
Cash flow from financing activities
Debt and interest payments, net		(1,164,083	)		(800,904	)		(875,667	)
Financing available for sale business		—			—			7,582
Cash used for financing activities		(1,164,083	)		(800,904	)		(868,085	)
Exchange effect on cash		63,540			16,664			430
Increase (decrease) in cash and cash equivalents		302,313			(151,961	)		(194,018	)
Cash and cash equivalents, beginning of year		743,046			895,007			1,089,025
Cash and cash equivalents, end of year	$	1,045,359		$	743,046		$	895,007
Complementary information:
Interest paid	$	631,680		$	779,429		$	862,506
Income tax and corporate flat tax paid	$	3,216		$	4,070		$	3,016

The attached notes are part of these consolidated statements.

Grupo TMM, S.A.B. and Subsidiaries 8

Notes to the consolidated financial statements

At December 31, 2015 and 2014

(Amounts in thousands of pesos, except number of shares and where otherwise indicated)

1 General information

Grupo TMM, S.A.B. (“Grupo TMM” or the “Company”) is a Mexican company whose principal activity is providing multimodal transport and logistics services to premium customers throughout Mexico. These activities are grouped together under the following service divisions:

• Maritime: includes specialized offshore shipping services, clean oil and chemical products shipping, tugboat services, and other activities related to the maritime transportation business.

• Ports and terminals: includes shipping agency services, inland and seaport terminal services, and also container and railcar maintenance and repair services.

• Logistics: includes bonded warehouse operation and management services. As indicated below, the Company disposed of a significant portion of this service division in 2013.

Grupo TMM’s head office is located at Avenida de la Cúspide N° 4755, Colonia Parques del Pedregal, Delegación Tlalpan, C.P. 14010, Mexico City. In addition, a significant portion of its maritime division activities are conducted at Calle 55 N° 2 Col. Electricistas C.P. 24120 Cd. del Carmen, Campeche.

Grupo TMM, S.A.B. and Subsidiaries 9

At December 31, 2015 and 2014, Grupo TMM holds the percentage of equity interest in various subsidiaries, the most significant are the following:

	Activity	% of ownership
TMM División Marítima, S.A. de C.V.	Maritime		100	%
Transportación Marítima Mexicana, S.A. de C.V.	Maritime		100	%
TMM Logistics, S.A. de C.V.	Ports and terminals		100	%
Inmobiliaria Dos Naciones, S. R.L. de C.V.	Maritime		100	%
TMM Parcel Tankers, S.A. de C.V.	Maritime		100	%
Almacenadora de Depósito Moderno, S.A. de C.V. (ADEMSA)	Logistics - Warehouse		100	%
Autotransportación y Distribución Logística, S.A. de C.V.	Logistics		100	%
Administración Portuaria Integral de Acapulco S.A. de C.V.	Ports and terminals		51	%
Prestadora de Servicios MTR, S.A. de C.V.	Ports and terminals		100	%
Mexschiff Operación de Personal, S.A.P.I. de C.V.	Payroll outsourcing		100	%
Omexmar Operadora Mexicana Marítima, S.A.P.I. de C.V.	Payroll outsourcing		100	%
Perhafen Services Marítimos, S.A.P.I. de C.V.	Payroll outsourcing		100	%
TMM Dirección Corporativa, S.A.P.I. de C.V.	Payroll outsourcing		100	%
Inmobiliaria TMM, S.A. de C.V.	Property leasing		100	%

The Company’s subsidiaries are incorporated in Mexico, where most of their activities take place.

Disposal of subsidiaries

2015

During 2015, Grupo TMM sold the subsidiaries Desarrollo Comercial Polo S.A.P.I. de C.V., Proserpec Servicios Administrativos S.A.P.I. de C.V., RRLC S.A.P.I. de C.V., Munray Services, S.A.P.I. de C.V., Nicte Inmobiliaria S.A.P.I. de C.V., Promotora Satuiza, S.A.P.I. de C.V. and Grupo Chant S.A.P.I. de C.V., from the latter was sold 98% of its shares and for the rest 100%, all to unrelated parties. These disposals are part of the business plan of Grupo TMM, which considers focus its resources and transactions in specialized maritime transportation segment. The gain on the sale of subsidiaries was $185.3 million, which is recorded under “Other income (expenses)” in the consolidated statements of profit or loss (see Note 21); also the value of the net assets of these subsidiaries at the date of the sale was not significant.

Grupo TMM, S.A.B. and Subsidiaries 10

2014

During 2014, Grupo TMM sold the subsidiaries Terminal Marítima de Tuxpan, S.A. de C.V. (TMT), TMM Agencias, S.A. de C.V. (Agencias), and other subsidiaries which had no material effect. The carrying values of the net assets and consideration received on the sale date were:

	TMT		Agencias			Other subsidiaries		Total
Current assets
Other accounts receivable	$	566	$	34		$	—	$	600
Other current assets		232		—			—		232
Total current assets		798		34			—		832
Non-current assets
Investment property		511,502		—			—		511,502
Total assets		512,300		34			—		512,334
Short-term liabilities
Other accounts payable		371		32,411			—		32,782
Total short-term liabilities		371		32,411			—		32,782
Long-term liabilities
Deferred taxes		153,450		—			—		153,450
Total liabilities		153,821		32,411			—		186,232
Total net assets		358,479		(32,377	)		—		326,102
Consideration for sale and commissions, net		655,408		10			28,734		684,152
Gain on the sale of subsidiaries	$	296,929	$	32,387		$	28,734	$	358,050

The gain on the sale of subsidiaries is recorded under other income (expenses), see Note 21.

Finally on July 4, 2014 Grupo TMM sold 1,500 shares in Prestadora de Servicios MTR, S.A. de C.V., to an unrelated party. Due to this sale variation in non- controlling interest was recognized as shown in the statement of changes in the stockholders’ equity.

Grupo TMM, S.A.B. and Subsidiaries 11

2013

In July 2013, Grupo TMM sold its total holdings in its ground transportation and autotransporter business, which had been classified as held for sale. The carrying value of the net assets and consideration received on the sale date were:

	2013
Current assets
Cash and cash equivalents	$	2,600
Trade receivables		112,821
Other accounts receivable		203,794
Other current assets		17,791
Total current assets		337,006
Non-current assets
Property, machinery and equipment		177,318
Other assets		6,306
Total assets		520,630
Short-term liabilities
Vendors and other accounts payable		(452,312	)
Total liabilities		(452,312	)
Total net assets		68,318
Consideration from sale		43,905
Loss from disposal	$	24,413

The loss from disposal is reported under losses on discontinued operations, see Note 19.

Non-controlling interest in subsidiaries

Grupo TMM holds equity interest in the subsidiaries Administración Portuaria Integral de Acapulco, S.A. de C.V., Servicios Administrativos API Acapulco, S.A. de C.V., Perjomar Operadora, S.A.P.I. de C.V., and Prestadora de Servicios MTR, S.A. de C.V. for which there is non-controlling interest, associated effect on the Company’s consolidated financial statements is considered immaterial. These companies are established and conduct their activities in Mexico.

2 Changes in accounting policies

New and revised standards that are effective for annual periods beginning on or after 1 January 2015

‘Defined Benefit Plans: Employee Contributions’ (Amendments to IAS 19) came into mandatory effect for the first time in 2015, as well as other amendments to IFRSs that became mandatorily effective in 2015 have no material impact on the Grupo TMM’s financial results or position. Accordingly, the Company has made no changes to its accounting policies in 2015.

Standards, amendments and interpretations to existing standards that are not yet effective and have not been adopted early by Grupo TMM

At the date of authorization of these financial statements, certain new standards, and amendments to existing standards have been published by the IASB that are not yet effective, and have not been adopted early by the Company. Information on those expected to be relevant to Grupo TMM’s consolidated financial statements is provided below.

Grupo TMM, S.A.B. and Subsidiaries 12

Management anticipates that all relevant pronouncements will be adopted in the Company’s accounting policies for the first period beginning after the effective date of the pronouncement. New standards, interpretations and amendments not either adopted or listed below are not expected to have a material impact on Grupo TMM’s consolidated financial statements.

IFRS 9 ‘Financial Instruments’ (2014)

The IASB recently released IFRS 9 “Financial Instruments” (2014), representing the completion of its project to replace IAS 39 “Financial Instruments: Recognition and Measurement”. The new standard introduces extensive changes to IAS 39’s guidance on the classification and measurement of financial assets and introduces a new ‘expected credit loss’ model for the impairment of financial assets. IFRS 9 also provides new guidance on the application of hedge accounting.

The Company’s management has yet to assess the impact of IFRS 9 on these consolidated financial statements. The new standard is required to be applied for annual reporting periods beginning on or after 1 January 2018.

IFRS 15 ‘Revenue from Contracts with Customers’

IFRS 15 presents new requirements for the recognition of revenue, replacing IAS 18 “Revenue”, IAS 11 “Construction Contracts” and several revenue-related Interpretations. The new standard establishes a control-based revenue recognition model and provides additional guidance in many areas not covered in detail under existing IFRSs, including how to account for arrangements with multiple performance obligations, variable pricing, customer refund rights, supplier repurchase options, and other common complexities.

IFRS 15 is effective for annual reporting periods beginning on or after 1 January 2018. Management has started to assess the impact of IFRS 15 but is not yet in a position to provide quantified information.

IFRS 16 “Leases”

IFRS 16 requires lessees to record the right to use an asset “on its balance sheet” and a liability for the lease. However, this standard provides exceptions on that accounting for short-term leases and assets in immaterial amounts. It further modifies the definition of lease and sets forth the requirements on other issues such as elements that form part of the lease, variable payments, and option of periods. Moreover, it modifies the journal entry of leaseback sales contracts and adds new disclosure requirements.

IFRS 16 is effective for annual periods beginning on or after January 1, 2019. Company Management has started to evaluate the impact of IFRS 16, but it still does not have quantitative information of that evaluation.

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 presented in thousands of Mexican pesos.

Grupo TMM is not required to present a third statement of financial position as of this date. However, Grupo TMM’s management has opted to present comparative information for an additional period (2013) for the consolidated statements of profit or loss, comprehensive income, changes in stockholders’ equity, and cash flows, as permitted by IAS 1 “Financial statement presentation”.

Grupo TMM, S.A.B. and Subsidiaries 13

The most significant accounting policies are summarized as follows:

3.1 Basis of consolidation

The consolidated financial statements include the accounts of Grupo TMM and those of its subsidiaries. Grupo TMM controls a subsidiary when it is exposed, or has rights, to variable returns resulting from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary. All subsidiaries have the reporting date of “December 31”, for all years reported.

The balances and transactions among subsidiaries have been eliminated for the purposes of consolidation, including balances and unrealized gains on transactions between Grupo TMM’s companies. Unrealized losses on the sale of assets among the group are reverted in the consolidation, so that the asset involved is also verified for impairment from a group perspective. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by Grupo TMM.

Profit or loss and other comprehensive income of subsidiaries acquired or disposed during the year are recognized from the effective date of acquisition, or up to the effective date of disposal, as applicable.

Non-controlling interest, presented as part of the stockholders’ equity, represents the portion of the subsidiary’s profit or loss and net assets that are not held by Grupo TMM. The Company attributes the total comprehensive income or loss of the subsidiaries between the owners of the parent and the non-controlling interest based on their respective ownership interests.

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 by the equity method 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 made payments on behalf of the associate.

Unrealized gains on transactions between Grupo TMM and its associates are eliminated to the extent of Grupo TMM’s interest on the associate. When unrealized losses are eliminated, the asset involved is also tested for impairment.

3.2 Business combinations

Grupo TMM applies the acquisition method to accounting for business combinations. The consideration transferred by Grupo TMM 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 equity interests issued by Grupo TMM, which includes, accordingly, the fair value of any asset or liability that arises from the contingent consideration arrangement. Acquisition costs are expensed as incurred.

Grupo TMM recognizes identifiable assets acquired and liabilities assumed in the business combination independent of whether these were recognized in acquirer’s financial statements prior to the acquisition. Assets acquired and liabilities assumed are generally measured at their acquisition-date fair value.

Grupo TMM, S.A.B. and Subsidiaries 14

Goodwill is stated after the individual recognition of identifiable intangible assets. It is calculated as the excess on the sum of a) the fair value of the consideration transferred, b) the amount recognized for any non-controlling interest in the entity acquired, and c) the fair value on the acquisition date of any equity interest in the acquiree, over the acquisition-date the fair values of the identifiable net assets. If the fair values for the identifiable net assets exceed the sum calculated above, this excess amount (e.g. gain on a bargain purchase) is immediately recognized in profit or loss.

3.3 Foreign currency translation

Functional and presentation currency

The consolidated financial statements are reported in Mexican pesos, which is also the functional currency of the parent company.

Foreign currency balances and transactions

Foreign currency transactions are translated into the functional currency of the respective Group entity, using the exchange rates prevailing at the dates of the transactions (spot exchange rate). Foreign exchange gains and losses resulting from the settlement of such transactions and from the measurement of monetary items denominated in foreign currency at year-end exchange rates are recognized in profit or loss.

Non-monetary items are not retranslated at year-end and are measured at historical cost (translated using the exchange rates at the transaction date), except for non-monetary items measured at fair value which are translated using the exchange rates at the date when fair value was determined.

In the consolidated financial statements of Grupo TMM, all the assets, liabilities, and operations of Grupo TMM’s entities operated in a functional currency other than the Mexican peso (Grupo TMM’s reporting currency) are converted to pesos on consolidation.

3.4 Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, together with other highly liquid and short-term investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of change in their value.

3.5 Materials and supplies

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

3.6 Prepayments

Represent prepayments for services that will be received in the future and are amortized in the period when said services are received.

3.7 Property, machinery and equipment

Properties and vessels

The properties (land and buildings) are measured at fair value, which are determined by external professional valuers every three years or before if the market factors indicate a significant change in the fair value. The last valuation of these assets was in December 2013.

Grupo TMM, S.A.B. and Subsidiaries 15

The vessels are measured at fair value, the restated amounts for most of these assets is determined using market values calculated by external professional valuers and for certain vessels using other valuation techniques. The frequency of the restatements for this class of assets will be based on the changes of the fair values, meaning when these values significantly differ from their carrying value, the Company has revaluated this class of assets at December 31, 2015 and 2014.

The revaluation model for vessels was applied beginning January 1, 2014. Previously, the cost model was applied. Management considers that this change in accounting policy provides more reliable, relevant information about the values of its vessels and related transactions, pursuant to various circumstances that are considered to have a significant effect on the value of that type of assets, such as: i) the behavior that oil prices have experienced (main industry to which Grupo TMM renders services); and ii) the changes generated by the energy reform enacted by the Mexican Federal Government.

The revaluation surplus that is derived from the valuation of properties and vessels is recognized as part of “Other comprehensive income items” and forms part of “other capital components” in stockholders’ investment. A revaluation surplus is credited in income up to an amount equivalent to any revaluation write-down or impairment loss previously recognized income. Any excess is recognized in “Other comprehensive income items” and in stockholders’ investment in the item of “Revaluation surplus”. Revaluation write-downs or impairment losses are recognized in “Other comprehensive income items” up to the amount previously recognized on that asset in stockholders’ investment in the item of “Revaluation surplus”. Any remaining decrease is recognized in income for the year. Any remaining balance of the revaluation surplus in stockholders’ investment at the time of disposing of the asset that gave rise thereto is reclassified to retained earnings. Moreover, any remaining balance of the revaluation surplus in stockholders’ investment may not be distributed to stockholders.

The depreciation of properties and vessels is recognized using the straight line method to write down its carrying value less its estimated residual value. As no finite useful life for land can be determined, the related carrying amounts are not depreciated.

Machinery and equipment

Machinery and equipment are stated at construction or acquisition cost, including any cost directly attributable to bringing the assets to the location and condition necessary for them to be capable of operating in the manner intended by Grupo TMM’s Management. 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 machinery and equipment is computed using the straight-line method based on the useful lives of the assets net of the estimated residual value.

Recurring maintenance and repair expenditures are charged to operating expenses as incurred. Major repairs to vessels (docks) are capitalized and amortized over the period in which benefits are expected to be received (two to five years for vessels).

The material residual values and the estimated useful life are adjusted as necessary, at least once a year.

Gains or losses from the disposal of property, machinery and equipment are determined as differences between the disposal proceeds and the carrying amount of the assets and are recognized in profit or loss as part of “Other income (expenses)”, accordingly (see Note 21).

Grupo TMM, S.A.B. and Subsidiaries 16

Construction in progress

Disbursements attributable to construction of assets that are identifiable and may be controlled by the Company are recognized as assets when they meet the following conditions:

• it is technically possible to complete the construction of the asset so that it can be available to be used;

• management has the intent of completing the asset to use it;

• it can be proven that the asset will generate economic benefits in the future;

• adequate technical, financial or another type of resources are available to complete the asset; and

• the disbursement attributable to the asset during its construction can be determined reliably.

3.8 Intangible assets

Recognition of intangible assets

Concession rights

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

Software

Software licenses acquired are capitalized on the basis of costs incurred to acquire and install the specific software.

Trademark

The trademark acquired on a business combination that qualifies for separate recognition is considered an intangible asset and is recorded at its fair value.

Subsequent measuring

All finite-lived intangible assets are accounted for using the cost model by which the net capitalized costs of their residual value are amortized using the straight-line method throughout their estimated useful lives, in the case of the concession rights; these are amortized according to the term specified in the corresponding agreement. The residual values and useful lives are reviewed on each reporting date. The trademark is considered an intangible asset with an indefinite life therefore it is subject to impairment tests annually as described in Note 15.

The amortization is included in the consolidated statement of operations as part of the depreciation, amortization, and loss from revaluation item.

Subsequent expenditures to preserve software and trademarks are expensed as incurred.

3.9 Impairment testing of long-lived assets

For impairment assessment purposes, assets are grouped at the lowest levels for which there are largely independent cash inflows (cash-generating units). As a result, some assets are tested individually for impairment and some are tested at cash-generating unit level. Goodwill is allocated to those cash generating units that are expected to benefit from synergies of a related business combination and represent the lowest level within the Company at which management monitors the trademark.

Cash-generating units to which trademark has been allocated (determined by the Grupo TMM’s Management as equivalent to its operating segments) are tested for impairment at least annually. All other individual assets or cash-generating units are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

Grupo TMM, S.A.B. and Subsidiaries 17

An impairment loss is recognized for the amount by which the asset’s (or cash-generating unit’s) carrying amount exceeds its recoverable amount, which is the higher of fair value less costs of disposal and value-in-use. To determine the value-in-use, management estimates expected future cash flows from each cash-generating unit and determines a suitable discount rate in order to calculate the present value of those cash flows. The data used for impairment testing procedures are directly linked to Grupo TMM’s latest approved budget, adjusted as necessary to exclude the effects of future reorganizations and asset enhancements. Discount factors are determined individually for each cash-generating unit and reflect current market assessments of the time value of money and asset-specific risk factors.

Impairment losses for cash-generating units reduce first the carrying amount of any goodwill allocated to that cash-generating unit. Any remaining impairment loss is charged pro rata to the other assets in the cash-generating unit. With the exception of the trademark, all assets are subsequently reassessed for indications that an impairment loss previously recognized may no longer exist. An impairment loss is reversed if the asset’s or cash-generating unit’s recoverable amount exceeds its carrying amount.

3.10 Leased assets

Financial leases

Management applies judgment in considering the substance of a lease agreement. The economic ownership of the leased asset is transferred to the leaseholder if they substantially assume all the risks and rewards related to the ownership of the leased asset. The corresponding asset is then recognized at the start of the lease at the fair value for the leased asset, or if lower, at the present value of the lease payments. A corresponding amount is recognized as a liability for financial leasing, independent of whether some of the lease payments are settled in advance of the lease start date.

The corresponding liability decreases by the lease payments net of the financial expenses. The interest component in the lease payment represents a portion of the capital balance outstanding and is recognized in operations as financial costs over the lease period.

Notes 3.7 above and 10 describe the depreciation methods and estimated useful lives, respectively, for assets under financial leases.

Operating leases

All other leases are treated as operating leases. Payments on operating lease agreements are recognized as an expense on a straight-line basis over the lease term. The associated costs, such as maintenance and insurance, are expensed as incurred.

3.11 Financial instruments

Recognition, initial measurement and derecognition

Financial assets and liabilities are recognized when Grupo TMM is party to the contractual provisions of a financial instrument and are initially measured at fair value adjusted for the transaction costs, except for the financial assets and liabilities that are measured at their fair value through profit or loss, which are initially measured at fair value.

Financial assets are derecognized when the contractual rights to the cash flows from a financial asset expire, or when the financial asset and all the substantial risks and benefits have been transferred. A financial liability is derecognized as extinguished, discharged, cancelled, or expired. Financial assets and liabilities are subsequently measured as described following.

Grupo TMM, S.A.B. and Subsidiaries 18

Classification and subsequent measurement of financial assets

For the purposes of subsequent measurement, financial assets that are not those designated and effective as hedging instruments are classified into the following categories when they are initially recognized:

• loans and receivables;

• financial assets at fair value through profit or loss;

• held-to-maturity investments;

• available-for-sale financial assets.

Grupo TMM’s financial assets are classified into the category of loans and receivables, and available-for-sale financial assets. These financial assets are impaired when there is objective evidence that the financial asset or group of financial assets has been impaired. Different criteria are applied to determine the impairment for each category of financial assets, as described following.

All income and expenses related to financial assets which are recognized in profit or loss are reported in the comprehensive financing cost, except for the impairment of the client accounts receivable, which are reported in “Other income (expenses)”.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not traded on an active market. After the initial recognition, these are measured at amortized cost using the effective interest method, less the provision for impairment. The discount is omitted when the effect of the discount is immaterial. The cash and cash equivalents of Grupo TMM, and also the trade receivables, and most of the other accounts receivable fall under this category of financial instruments.

Individually significant accounts receivable are considered for impairment when these are in arrears or when there is objective evidence that a specific payment will fall into default.

Available-for-sale financial assets

Available-for-sale financial assets are non-derivative financial assets that are assigned to this category or do not qualify to be included in any of the other categories of financial assets.

Available-for-sale financial assets are measured at fair value. The gains and losses are recognized in other comprehensive income and are reported in other components of equity, except for impairment losses and currency differences in monetary assets, which are recognized in profit or loss. When an asset is disposed of or it is determined to be impaired, the cumulative gain or loss that had been recognized in other comprehensive income is reclassified from equity to profit or loss and is presented as an adjustment for reclassification in other comprehensive income.

The reversion of impairment losses is recognized in other comprehensive income, except financial assets that are financial debt, which are only recognized in operations if the reversion can be objectively related to an event that occurs after the impairment loss has been recognized.

Classification and subsequent measuring of financial liabilities

The financial liabilities of Grupo TMM include financial debt, vendors, and other accounts payable.

Financial liabilities are subsequently measured at amortized cost using the effective interest method. All derivative financial instruments that are not designated and are not effective as hedging instruments are carried at fair value through profit or loss.

Grupo TMM, S.A.B. and Subsidiaries 19

All interest-related charges are recognized in operations and included in the item “Interest expense and other financial costs” in the consolidated statement of profit or loss.

3.12 Provisions, contingent liabilities and contingent assets

Provisions are recognized when the present obligations resulting from 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 estimated amounts required to be expended to settle the present obligation based on the most reliable evidence available at the date of the consolidated 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 issuance of the financial statements and adjusted to reflect the current best estimate.

When the possible outflow of economic resources 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.

3.13 Taxes on earnings

Calculation of current income tax is based on tax rates and tax laws that have been enacted or substantially enacted to the reporting date of the consolidated financial statements. Deferred income tax is determined using the liability method, based on temporary differences arising between the tax basis of assets and liabilities and their carrying amounts in the financial statements. Determination of deferred income tax has considered tax rates that will be effective at the time of reversion of the temporary differences.

The income tax expense in the statement of profit or loss includes the sum of the deferred tax, which has not been recognized in other comprehensive income or directly in stockholders’ equity, and the current income tax for the year.

Deferred tax assets are recognized to the extent that it is probable that future taxable profit against which temporary differences can be utilized will be available (see Note 23). This is assessed based on the Company’s forecast of future operating results, adjusted for significant items that are reconciled for the taxable income and the limits on the use of tax losses and other tax asset carryforwards.

Grupo TMM, S.A.B. and Subsidiaries 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 probably that the temporary difference will not reverse in the foreseeable future.

3.14 Statutory employee profit sharing

The statutory employee profit sharing is determined applying the rate of 10% on taxable income, adjusted as provided for by the Income Tax Law. The statutory employee profit sharing accrued is considered an ordinary expense associated with employee benefits.

3.15 Post-employment benefits and benefits for short-term employees

Post-employment benefits

Defined benefit plans

The seniority pension to which employees are entitled after 15 years of service and after having retired at the age of 60, are expensed in the years in which the services are rendered (see Note 25).

In addition, the Company has pension plans for certain employees who retire after the age of 65 (or early retirement at 60 or 55), in addition to having completed a minimum 15 years of service, which are expensed in the years in which the services are rendered (see Note 25).

Under the defined benefits plan, the pension amount an employee will receive upon retirement is determined in reference to the time of service and salary determined for each case based on the plan. The legal obligation of the benefits lies with Grupo TMM, even if the plan’s assets to finance the defined benefits plan are separate. The plan’s assets may include assets specifically designated in a long-term benefit fund.

The liability recognized in the consolidated statement of financial position for the defined benefits plans is the present value of the defined benefits obligation (DBO) as of the reporting date less the fair value of the plan assets.

Management estimates the DBO annually with the assistance of independent actuaries, based on the standard inflation rate, the salary growth rate, and the mortality rate. The discount factors are determined near the close of each year in reference to the high quality corporate bonds that are denominated in the currency in which the benefits will be paid and which have maturities similar to the terms on the corresponding pension liability.

The net cost for the defined benefits liability period is included in the item “Salaries, wages and employee benefits” in the consolidated statements of profit or loss.

Indemnifications

Indemnifications that are not substitutive of retirement, paid to personnel who leave the company due to restructuring or any other reason, are charged to the operations for the period when incurred or provisions are created when there is a present obligation of these events, with a probability of an outflow of resources and this obligation can be reasonably estimated.

Short-term employee benefits

Short-term employee benefits, including vacation entitlement, are current liabilities included in “Accounts payable and accrued expenses”, measured at the amount Grupo TMM expects to pay as a result of time not taken; as these liabilities are short-term, they were not discounted as their effect is considered immaterial.

Grupo TMM, S.A.B. and Subsidiaries 21

3.16 Stockholders’ equity

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

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

The accumulated losses include all current profits or losses and for previous periods.

Other components of equity capital include:

• revaluation surplus, including gains from the reevaluation of vessels and properties;

• statutory reserve, corresponds to the separation of earnings withheld to this reserve;

• share premium on the issue of convertible obligations, equal to the amount received over the nominal value of the obligation;

• translation result represents the effect for the change in functional currency.

3.17 Recognition of revenue, costs and expenses, and financing costs

Revenue

Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer returns, rebates and other similar allowances.

Revenues are recognized at the time at which the risks and benefits are transferred to the customer, which generally occurs when: (i) there is convincing evidence of the agreement with the customer, (ii) the service has been rendered in compliance with the customer’s requirement; (iii) collection is reasonably assured; and (iv) there is no condition or uncertainty that might imply their reversal and the customer assumes the risk of the losses.

The Company recognizes its revenues when the criteria mentioned in the above paragraph are met, specifically vessels leased are recognized on monthly basis according to the number of days elapsed and during the term of the corresponding contract, and in the case of revenue from voyages, when their duration is longer than two months, this is recognized proportionally as a shipment moves from origin to destination; other services, including warehousing, are recognized when services are rendered.

Costs and expenses

The costs and expenses for maritime, and also those related to other logistics operations, are recognized in operations when the services are rendered, materials are consumed or as incurred.

Financing costs

Interest income and expense are reported as accrued using the effective interest method and are reported as part of the comprehensive financing cost.

3.18 Information by segments

Grupo TMM has three operating segments: maritime division, logistics division, and ports and terminals division.

Grupo TMM, S.A.B. and Subsidiaries 22

These operating segments are monitored by the Company’s Management, who are responsible for making strategic decisions, which are made based on adjusted operating segment results. 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 are the same as those used in its consolidated 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, the primarily applies to the Grupo TMM’s head office. During 2013, the Company disposed of a significant portion of the logistics division segment (see Note 19).

3.19 Discontinued operations

Results for discontinued operations

A discontinued operation is a component of the entity that has been disposed of, or has been classified as held for sale, and:

• represents a significant separate line of business or a geographic area of operations;

• is part of a specific coordinated plan to dispose of a significant separate line of business; or

• is a subsidiary acquired solely for the purpose of sale.

The gains or losses on discontinued operations, including components of gains or losses from previous years are reported as a single amount on the consolidated statement of profit or loss. This amount, which includes the gains or losses after taxes for discontinued operations and the gains or losses after taxes resulting from measuring and disposing of assets classified as held for sale, are discussed in more detail in Note 19.

Non-current assets held for sale

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 probable, the assets or group held for sale are classified as “held for sale” and are reported separately in the consolidated statement of financial position.

Non-current assets classified as “held for sale” are measured at their carrying 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.

3.20 Significant management judgment in applying accounting policies and estimation uncertainty

When preparing the consolidated financial statements, Management considers a number of judgments, estimates and assumptions about recognition and measurement of assets, liabilities, income and expenses.

Grupo TMM, S.A.B. and Subsidiaries 23

Significant management judgment

The reporting judgments made by Management as to the application of the accounting policies of Grupo TMM that would have a material effect on the consolidated financial statements are described following:

Deferred tax assets

The extent for which a deferred tax asset can be recognized is based on the assessment of the probability of obtaining future taxable income for which Grupo TMM’s deferred tax assets can be used. In addition, reporting judgment is required to evaluate the impact of certain legal, fiscal, and/or economic limits (see Note 23).

Estimation uncertainty

Information about estimates and assumptions that has the most significant effect on the recognition and measurement of assets, liabilities, income and expenses is provided below; actual results may be substantially different.

Impairment of long-lived assets

On assessing impairment, Management determines the recoverable value for each asset or cash generating unit based on the expected future cash flows and determines an adequate interest rate to be able to calculate the present value of these cash flows. The uncertainty in the estimate is related to the assumptions regarding results of future operations and the determination of suitable discount rate.

Useful lives of depreciable assets

Management reviews the useful lives of the depreciable assets on each reporting date, based on the expected use of each asset. The uncertainty in these estimates is derived from the technical obsolescence that could change the expected use of vessels and other equipment.

Defined benefits obligation

Management’s estimate of the DBO is based on a number of critical assumptions, such as inflation rates, mortality rates, discount rate, and a consideration for future salary increases. The variances in these assumptions can impact the amount of the DBO and the corresponding annual expense for defined benefits (the analysis is provided in Note 25).

Measures of fair value

Management uses valuation techniques to measure the fair value of its vessels and properties. This results in Management preparing estimates and assumptions based on market information and using observable data that could be used by market participants to assign a price to the instrument, however these are not always available. These fair value estimates for these non-financial assets can vary from the actual prices obtained on operations at market value on the reporting date (see Note 27).

4 Going concern

The accompanying consolidated financial statements have been prepared in accordance with the IFRS, which consider the continuity of the Company as a going concern. The Company has sustained recurrent net losses, principally as a result of its comprehensive financing cost. The consolidated financial statements do not include any adjustments related 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 to operate.

Company Strategy

The maritime business has improved its performance in recent years, consolidating as the most important revenue stream for Grupo TMM. In addition, Management continues to work on the implementation of the five year growth plan, which includes the following progress and projects:

Grupo TMM holds lands in Tuxpan, and is developing projects including a liquid oils terminal, an automobile terminal and citrus juice export.

Grupo TMM, S.A.B. and Subsidiaries 24

In addition, Grupo TMM intends to dispose the bonded warehouse business in 2016, and this divestiture is expected to improve operating income, by channeling the effort to the maritime business and development of new projects related to the Energy Reform, particularly the transportation segment, storage, and hydrocarbon distribution and terminals where Grupo TMM has competitive advantages and/or broad experience that will allow it to diversify current sources of revenues and the current customer base.

Through strategic alliances, selling non-productive assets (land), and new financing arrangements, Grupo TMM intends to obtain the necessary proceeds to improve the fleet of ships, thereby addressing the demand for services related to hydrocarbon operations in Mexico.

Lastly, Grupo TMM is in the process of improving its debt profile through the capitalization of approximately 40% of the Trust Certificates, reducing its financing cost and improving the cash flows.

The successful implementation of these projects in the short and medium term will allow Grupo TMM to grow with high yielding assets and operations, significantly improving the Company’s capital structure and increasing value for its stockholders.

5 Cash and cash equivalents

Cash and cash equivalents at December 31, 2015 and 2014, are summarized as follows:

	2015		2014
Cash on hand	$	1,223	$	892
Banks at bank		262,678		99,556
Short-term investments		736,031		232,425
Restricted cash		45,427		410,173
	$	1,045,359	$	743,046

Restricted cash represents the amount required to guarantee payments according to the obligations arising from the debt agreements for the acquisition of vessels, trust certificates and guarantee found for the sale of TMT.

Grupo TMM, S.A.B. and Subsidiaries 25

6 Trade receivables

Trade receivables at December 31, 2015 and 2014, are summarized as follows:

	2015			2014
Maritime
Offshore vessels	$	859,614		$	587,799
Tankers		49,079			57,722
Parcel tankers		29,890			13,341
Shipyards		12,595			24,738
Tugboats		11,747			8,916
Others		22			1,032
Ports and terminals
Shipping agencies		44,355			38,837
Repair of containers		42,740			52,159
Port services		6,326			5,310
Automotive services		3,549			4,709
Commercial leases		1,231			899
Other businesses		493			298
Total trade receivables		1,061,641			795,760
Allowance for doubtful accounts		(13,215	)		(13,726	)
	$	1,048,426		$	782,034

7 Other accounts receivable

Other accounts receivable at December 31, 2015 and 2014, are summarized as follows:

	2015		2014
Services for port, maritime and other operations	$	93,321	$	44,348
Recoverable taxes		29,215		25,461
Insurance claims		9,872		11,405
Employees		7,104		17,338
Others		52,123		45,524
Sale of subsidiary (a)		—		803,047
	$	191,635	$	947,123

(a) Corresponds to the sale of the subsidiary Terminal Marítima de Tuxpan, S.A. de C.V., (see Note 1). This balance was collected during 2015.

Grupo TMM, S.A.B. and Subsidiaries 26

8 Materials and supplies

Materials and supplies at December 31, 2015 and 2014, are summarized as follows:

	2015		2014
Spare parts	$	69,235	$	48,783
Fuels		32,360		68,920
Others		860		893
	$	102,455	$	118,596

9 Prepayments

Prepayments at December 31, 2015 and 2014, are summarized as follows:

	2015		2014
Fleet insurance	$	10,351	$	10,400
Prepaid expenses		8,084		17,449
Prepaid insurance premiums		3,107		2,512
	$	21,542	$	30,361

10 Leases

Financial leases as lessee

The Company holds two financial leases, the first is on a vehicle which started in December 2012 and ends in December 2016; the second is on a vessel named “Subsea 88”, which started in November 2013 and will end in October 2023.

As of 31 December 2015 and 2014 the carrying value of equipment in finance leases are as follows:

	2015		2014
Vessel Subsea 88	$	210,513	$	174,767
Vehicle		722		1,083
	$	211,235	$	175,850

The financial leasing liabilities (see Note 16) are secured by the associated assets held under this modality. The minimum future financial leasing payments at the end of each reporting period are:

	Within the 1st year			1 to 3 years			3 to 5 years			After 5 years			Total
Balance at December 31, 2015
Lease payments	$	35,369		$	69,619		$	102,190		$	173,173		$	380,351
Financial charges		(27,938	)		(51,796	)		(68,624	)		(47,110	)		(195,468	)
Present values, net	$	7,431		$	17,823		$	33,566		$	126,063		$	184,883
Balance at December 31, 2014
Lease payments	$	30,044		$	59,705		$	66,778		$	176,818		$	333,345
Financial charges		(24,618	)		(46,359	)		(41,380	)		(58,390	)		(170,747	)
Present values, net	$	5,426		$	13,346		$	25,398		$	118,428		$	162,598

The financial lease contract for “Subsea 88” includes monthly lease payments and an option to buy at the end of the term.

Grupo TMM, S.A.B. and Subsidiaries 27

Operating leases as lessee

At December 31, 2015, the operating leases report the following expiries:

Leased assets	Expire
Building		Apr. 2029
Computer equipment		Nov. 2017
Forklift		Dec. 2017
Cranes		Dec. 2017
Docks and equipment		Mar. 2018
Offshore vessels		Apr. 2018

The contracts include an option to buy at certain times during the term or on expiry.

In 2014, the docks and offshore vessels were subject to a leaseback transaction, which were qualified as operating as a result of the evaluation of the characteristics for these leases.

The minimum future payments on leases are:

	Within the 1st year		1 to 3 years		3 to 5 years		After 5 years		Total
Lease payments
At December 31, 2015	$	99,752	$	121,109	$	118,257	$	681,801	$	1,020,919
At December 31, 2014	$	128,024	$	111,755	$	95,537	$	605,600	$	940,916

11 Concession rights

The Company holds concessions to operate the cruise and vehicle terminal at the port of Acapulco, Guerrero and the tugboat services at the port of Manzanillo, Colima. Under these concession agreements, the Company is obliged to keep the facilities included in the concession in good condition. At the end of the concessions, these facilities will revert to the federal government.

Therefore the concession rights and the partial rights assignments provide for rights in favor of the federal government (see Note 30).

At December 31, 2015 and 2014, the Company was in compliance with its obligation to maintain the concessioned facilities in good condition.

The concession rights at December 31, 2015 and 2014 are summarized as follows:

	2015			2014			Years to amortize
Administración Portuaria Integral de Acapulco (a)	$	94,607		$	94,607			10
Transportación Marítima Mexicana (b)		30,266			30,266			—
		124,873			124,873
Accumulated amortization		(104,059	)		(100,275	)
Concession rights, net	$	20,814		$	24,598

Grupo TMM, S.A.B. and Subsidiaries 28

The amortization of the concession rights was $3,784 for the years ended December 31, 2015 and 2014.

(a) Concession expires June 2021.

(b) Renewal expires January 16, 2023, with the possibility of renewing for another 8 years. In January 2007, the total value of this concession was amortized prior to the renewal.

12 Property, machinery and equipment

Property, machinery and equipment at December 31, 2015 and 2014 are summarized as follows:

	2015
	Net balances at year start		Additions		Disposals			Transfers and others			Depreciation /impairment			Net balances at year end		Estimated useful lives (years)
Vessels	$	7,609,796	$	5,512	$	76,265	(e)	$	1,186,519	(b)	$	594,199	(c)	$	8,131,363	25
Shipyard		486		—		—			—			63			423	40
Major vessel maintenance		83,130		49,998		20,397	(e)		775			59,959			53,547	2.5
Buildings and facilities		195,201		—		—			1,155			9,419			186,937	20 y 25
Warehousing equipment		18		—		—			(18	)		—			—	10
Computer equipment		584		358		—			—			390			552	3 y 4
Terminal equipment		13,805		613		8,960			(3	)		1,335			4,120	10
Ground transportation equipment		8,162		—		125			27			2,558			5,506	4.5 y 10
Other equipment		15,652		355		—			1,904			4,581			13,330
		7,926,834		56,836		105,747			1,190,359			672,504			8,395,778
Land		872,220		—		—			8,400			—			880,620
Construction in progress		253,887		45,050		4,948			(17,308	)		—			276,681
	$	9,052,941	$	101,886	$	110,695		$	1,181,451		$	672,504		$	9,553,079
	2014
	Net balances at year start		Additions		Disposals			Transfers and others			Depreciation /impairment			Net balances at year end		Estimated useful lives (years)
Vessels	$	7,030,847	$	67,412	$	159		$	1,378,018	(b)	$	866,322	(c)	$	7,609,796	25
Shipyard		56,300		—		55,436	(a)		(2	)		376			486	40
Major vessel maintenance		99,927		52,740		—			(555	)		68,982			83,130	2.5
Buildings and facilities		207,251		—		—			(2,584	)		9,466			195,201	20 y 25
Warehousing equipment		18		—		—			—			—			18	10
Computer equipment		488		498		—			—			402			584	3 y 4
Terminal equipment		5,457		10,182		—			1			1,835			13,805	10
Ground transportation equipment		10,853		468		163			265			3,261			8,162	4.5 y 10
Other equipment		8,305		1,899		179			8,814			3,187			15,652
		7,419,446		133,199		55,937			1,383,957			953,831			7,926,834
Land		1,338,414		—		—			(466,194	)(d)		—			872,220
Construction in progress		295,258		94,037		—			(135,408	)		—			253,887
	$	9,053,118	$	227,236	$	55,937		$	782,355		$	953,831		$	9,052,941

All the amounts for depreciation and for loss from revaluation are included as part of the depreciation, amortization and loss from revaluation on the consolidated statements of profit or loss.

The accumulated depreciation on property, machinery and equipment at December 31, 2015 and 2014 is $598,825 and $498,681, respectively.

(a) The shipyard comprised of two docks and a pusher, was sold March 13, 2014 to then be contracted under an operating lease (see Note 10).

Grupo TMM, S.A.B. and Subsidiaries 29

(b) Comprised primarily for revaluation surplus by $1,157,690 and $1,352,710 net of other transfers for 2015 and 2014, respectively.

(c) Includes $41,970 loss from revaluation of one vessel in 2015 and $380,685 loss from revaluation of eight vessels in 2014.

(d) Corresponds to the sale of the subsidiary TMT (see Notes 1 and 21).

(e) Corresponds to the sale of the vessel Palenque on June 17, 2015.

If the cost model had been used, the revalued carrying amounts for vessels, land, and buildings and facilities at December 31, 2015 and 2014, would be as follows:

	2015		2014
Vessels	$	6,118,692	$	6,562,530
Lands		780,262		774,516
Properties		175,415		182,132
	$	7,074,369	$	7,519,178

The revalued amounts include a revaluation surplus of $2,214,551 and $1,158,039 in 2015 and 2014, respectively, before taxes, which is not available for distribution to stockholders.

Fair value measurement

See Note 27 regarding the measuring of fair value for vessels and properties.

Guarantees

At December 31, 2015 and 2014, 31 and 32 vessels respectively are securing the Trust Certificates offering. In addition, 4 vessels, in both years are securing financing with DVB Bank, NV and also the financial lease with FTAI Subsea 88. Also, there are 4 properties (14 properties in 2014) securing various bank loans.

13 Other non-current assets

Other non-current assets at December 2015 and 2014 are shown following:

	2015		2014
Almacenes de Jugos Cítricos de México, S.A.P.I. de C.V. (a) & (b)	$	40,000	$	40,000
Prepaid expenses		32,458		38,399
Other non-current assets		13,100		—
Security deposits		11,126		10,516
Other investments in shares, net (b)		5,776		8,715
	$	102,460	$	97,630

(a) In July 2014, Grupo TMM contributed $40,000 to the capital stock of Almacenes de Jugos Citricos de Mexico, S.A.P.I. de C.V., which represents 21% of the voting shares. Since this entity has not started up operations as at the issue date of the consolidated financial statements, Company Management decided to value the entity at its input cost, which is lower than its recoverable value.

Grupo TMM, S.A.B. and Subsidiaries 30

(b) Are investments in companies in which Grupo TMM does not have control or significant influence; these investments are recognized and valued at their acquisition cost under which they are associated are at the beginning of operation.

14 Intangible assets

Intangible assets at December 31, 2015 and 2014 are summarized as follows:

	2015
	Net balances at year start		Additions		Disposals		Transfers and others			Amortization		Net balances at year end		Estimated useful life (years)
Software	$	7,226	$	—	$	—	$	10,894	(b)	$	7,510	$	10,610	3 & 5
Trademark (a)		125,528		—		—		—			—		125,528	Indefinite
	$	132,754	$	—	$	—	$	10,894		$	7,510	$	136,138
	2014
	Net balances at year start		Additions		Disposals		Transfers and others			Amortization		Net balances at year end		Estimated useful life (years)
Software	$	4,199	$	3,796	$	—	$	3,253		$	4,022	$	7,226	3 & 5
Trademark (a)		125,528		—		—		—			—		125,528	Indefinite
	$	129,727	$	3,796	$	—	$	3,253		$	4,022	$	132,754

(a) Corresponds to the rights on the Marmex trademark associated with the specialized maritime division segment, specifically the offshore vessels operation. This trademark is subject to annual impairment testing.

(b) Corresponds to a fuel measurement system and communication systems on offshore vessels.

The accumulated amortization of intangible assets at December 31, 2015 and 2014 is $12,442 and $5,212, respectively.

15 Impairment of long-lived assets

At December 31, 2015 and 2014, Grupo TMM had performed annual impairment tests. The recoverable amounts for the cash generating units were determined based on calculations of the value in use and fair value less costs of sale as follows:

Vessels and trademark

Vessels are identifiable assets that individually generate cash flows which are largely independent from the flows from other assets or groups of assets. The trademark is considered an asset that does not generate flows independently therefore this was grouped with the vessels as a cash-generating unit (specialized maritime division segment) together with other long-lived assets in this segment. The recoverable amount for these assets was determined as their value in use. At December 31, 2015 and 2014, no impairment losses were determined for these assets.

Properties

The recoverable value of properties was determined as their fair value less costs of sale, which are considered immaterial in terms of the fair value. The determination of fair value is described in Note 27. At December 31, 2015 and 2014 no impairment losses were determined for these assets.

Grupo TMM, S.A.B. and Subsidiaries 31

Corporate assets and other long-lived assets

These assets are not identified with any cash-generating unit, therefore these were evaluated at the Grupo TMM level. The recoverable amount for these assets was determined as their value in use. At December 31, 2015 and 2014, no impairment losses were determined for these assets.

The recoverable amounts for cash-generating units were determined based on calculations of the value in use, covering a detailed three-year projection, followed by an extrapolation of the cash flows expected for the useful lives remaining for the assets using the growth rates determined by Management. At December 31, 2015 and 2014, the recoverable amounts for the cash-generating unit are $12,957,422 and $11,988,047, respectively.

The present value of the cash flows expected for each segment was determined applying an appropriate discount rate.

	2015						2014
	Growth rate			Discount rate			Growth rate			Discount rate
Vessels		2.00	%		7.04	%		2.00	%		7.04	%

Growth rates

The growth rates reflect the long-term average for these rates for the specialized maritime segment (all publicly available).

Discount rates

The discount rate reflects adequate adjustments associated with the market risk and the specific risk factors.

Cash flow assumptions

The key assumptions of Management for the specialized maritime segment include stable profit margins, which have been determined based on experience in this market. Grupo TMM Management considers this to be the best information available to forecast this market. The cash flow projections reflect stable profit margins achieved before the period covered by said projections. No consideration has been given to efficiency improvements and prices and salaries reflect the inflation projected for the industry, which are publicly available.

In addition to the considerations described above for determining the value in use of assets and the cash generating units described above, Management is currently not aware of any other probable change that could require changes in their estimate. However, the estimate for the recoverable amount for the specialized maritime segment is particularly sensitive to the discount rates. If the discount rate used increases 1%, the value in use would decrease up to 5.14% in terms of the value determined, value that continues to exceed the carrying value for the aforementioned assets.

Grupo TMM, S.A.B. and Subsidiaries 32

16 Financial assets and liabilities

Categories of financial assets and liabilities

The financial assets and liabilities at December 31, 2015 and 2014 are summarized as follows:

	2015		2014
Financial assets
Valued at amortized cost
Cash and cash equivalents	$	1,045,359	$	743,046
Trade receivables		1,048,426		782,034
Other accounts receivable		167,062		921,662
Total current financial assets	$	2,260,847	$	2,446,742
Financial liabilities
Valued at amortized cost
Current portion of the financial debt	$	684,748	$	918,638
Vendors		279,044		371,583
Accounts payable and accrued expenses		433,051		587,958
Related parties		28,291		18,110
Total short-term financial liabilities		1,425,134		1,896,289
Long-term financial debt		9,995,502		10,069,557
Total financial liabilities	$	11,420,636	$	11,965,846

At December 31, 2015 and 2014, the carrying value of the financial assets and liabilities at amortized cost is considered similar to their fair value.

Financial debt

Trust certificates

On July 29, 2010, an offering of Trust Certificates was released for $10,500 million. This offering consolidated the three previous offerings released by the Company into one. The Trust Certificates bear a term of 20 years and were given an initial credit rating of HR AA with stable outlook by HR Ratings de México, S.A. de C.V. in July 2010; on August 14, 2015, HR Ratings de México, S.A. de C.V. ratified its rating of HR AA and placed in special review.

Interest on this offering was payable semiannually in February and August. Pursuant to the Trustholders’ Meeting, the date of payment of interest was changed to November and May every year, beginning on November 15, 2015.

Since the offering, a derivative financial instrument designated as a hedge (interest rate CAP) was contracted which enabled Issuer’s Trust to have maximum annual rate of 10.80% during the first 3 years of the offering. At the beginning of 2013, the Company extended the CAP for the period from August 2013 to August 2014, under which the maximum rate payable was 10.80%. In January 2014, the Company again extended the CAP for the period from August 2014 to August 2015, under which the maximum rate payable is 9.80%, which allows the Company to increase the efficiency of the coverage by 100 basis points in terms of the previous coverage. In addition, in April 2015, the Company again extended the CAP for the period from August 2015 to August 2016, under which the maximum rate payable is 9.80%.

Grupo TMM, S.A.B. and Subsidiaries 33

This offering represents the total amount in pesos for future services to be provided to the contracting parties according to the terms of the Trust Certificate program and, like the previous offerings, it observes a cash restriction in order to secure certain operating obligations and potential payment obligations in the event of default. The restricted cash balance at December 31, 2015 and 2014 is $80.9 and $405.141, respectively.

The outstanding balance on this Offering at December 31, 2015 and 2014 was $10,539.1 and $10,594.1 million at an interest rate of 5.79% and 5.77% per annum, respectively. The interest expense for the trust certificates was $618,818 and $660,357 for the years ended December 31, 2015 and 2014, respectively.

In accordance with the Trust Certificates Program, the Company had the right and choice to capitalize interest for the first five years as per the following:

Year	Capitalization %			Interest Payment %
1st and 2nd		60	%		40	%
3th and 4th		50	%		50	%
5th		25	%		75	%

During 2015 the Company capitalized interest for $185,172; during 2014 it did not capitalize any interest.

The Trust Certificates at December 31, 2015 and 2014 are summarized as follows:

	2015			2014
Consolidated offering	$	10,500,000		$	10,500,000
Capitalization of interests		414,194			229,022
Payments made (a)		(374,871	)		(134,866	)
Interests payable (b)		—			58,581
Transaction costs		(864,730	)		(927,598	)
Long-term trust certificates	$	9,674,593		$	9,725,139

(a) Includes capital payments made during 2015 and 2014 of $240,005 el and $1,000, respectively.

(b) Interest amounts to $77,973 in 2015, which is included as part of short-term interest payable. Interest amounting to $58,581 was included as part of the long-term debt in 2014, due to the option of capitalizing that interest.

Other Financing

The information for other financing at December 31, 2015 and 2014 is summarized as follows:

	2015				2014
	Short-term		Long-term		Short-term		Long-term
Payable in Mexican pesos
Daimler Financial Services México, S. de R.L. de C.V.	$	9,737	$	36,786	$	8,695	$	46,524
Recognition of debt and substitution of debtor for $62.9 million at a variable rate of the 28-day TIIE plus 6 points, with monthly payments of principal and interest and maturing October 2019.

Grupo TMM, S.A.B. and Subsidiaries 34

	2015				2014
	Short-term		Long-term		Short-term		Long-term
Banco Nacional de Comercio Exterior, S.N.C.		—		9,272		155,001		33,036
A line of credit with mortgage surety for $35.6 million, at a variable rate of the 28-day TIIE plus 450 points, maturing, December 1, 2017. Two lines of credit with mortgage surety for $65.7 and $161.6 million, at a variable rate of the 28-day TIIE plus 425 points maturing June 29, 2015; the latter were paid in full and early in May 2015.
Banco Autofin México, S.A. Institución de Banca Múltiple		19,559		95,044		45,273		87,817
Five lives of credit with mortgage surety for $45.8, $34.6, $25.5, $21.6, and $8.4 million at a variable rate of the 28- day TIIE plus 450 basis points, with monthly payments of principal and interest, maturing September 2021.
INPIASA, S.A. de C.V.(a)		2,397		7,169		2,397		9,022
Contract for two lines of credit, the first for $15.7 million and the second for $4.2 million, both at a variable rate of the 28-day TIIE plus 450 basis points, with monthly payments of principal and interest, and maturing August 2021 and October 2016, respectively.
Corporación Financiera de Occidente, S.A. de C.V. SOFOM Institución de Banca Múltiple (FINOX)(a)		—		—		3,000		—
$18.0 million line of credit at a variable rate of the 28-day TIIE plus 600 basis points, with 36 monthly payments of principal and interest, and maturing June 27, 2015, date to be fully liquidated the credit line.
Intercam Banco, S.A.		—		—		18,429		—
Two lines of credit with trust surety for $19.9 and $15.0 million at a variable rate of the 28-day TIIE plus 500 basis points, monthly payments of principal and interest on outstanding balances and maturing December 2015 and August 2017, respectively. The credit line of $19.9 million was paid in full on December 29, 2015.

Grupo TMM, S.A.B. and Subsidiaries 35

	2015				2014
	Short-term		Long-term		Short-term		Long-term
Banco del Bajío, S.A.(a)		1,423		4,151		1,423		5,574
Two lines of credit for $8.5 and $4.6 million at a variable rate of the 28-day TIIE plus 250 points, with payments of principal and interest and maturing November 2019 and December 2014, respectively.
Value Arrendadora, S.A. de C.V. SOFOM ENR		430		—		373		430
$1.4 million financial lease at 14.23% fixed rate with monthly payments of principal and interest on outstanding balances and maturing December 2016.
MFM OPM , S.A. P.I. de C.V. SOFOM E.N.R.		—		—		1,000		—
$1.0 million line of credit at a fixed rate of 12.2%, with principal and interest paid on maturity in February 2015, credit repayed on expiration date.
Trust Certificates		—		9,674,593		—		9,725,139
Portfolio securitization program with a variable interest rate of the 28-day TIIE annualized plus 245 basis points (at December 2014 close, this was 5.79%) maturing August 2030.
Interest payable		118,407		—		200,165		—
		151,953		9,827,015		435,756		9,907,542
Payable in US dollars
DVB Bank América, NV(b)		333,322		—		329,008		—
Two lines of credit with mortgage surety; the first for US$25.0 million (approximately $433.5 million) at an average rate of 7.42% and maturing May 2017. The second, for US$27.5 million (approximately $476.8 million), at an average rate of 7.78%, and maturing June 2017.
DEG-Deutsche Investitions – UND(c)		88,433		—		75,147		—
US$8.5 million line of credit with pledge surety (approximately $147.4 million) at 8.01% fixed rate, with semiannual payments of principal and interest on outstanding balances, with a two year grace period on the principal and maturing July 2014.

Grupo TMM, S.A.B. and Subsidiaries 36

	2015				2014
	Short-term		Long-term		Short-term		Long-term
Other (d)		104,039		—		73,674		12,891
Two unsecured loans were contracted, each for US$3.0 million (approximately $52.0 million) at 11.25% fixed rate, with semiannual payments of principal and interest and maturing January 2016.
FTAI Subsea 88 Ltd		7,001		168,487		5,053		149,124
US$10.8 million line of credit through financial leasing (approximately $187.3 million), at 15.92% fixed rate with monthly payments of principal and interest on outstanding balances and maturing November 2023.
		532,795		168,487		482,882		162,015
	$	684,748	$	9,995,502	$	918,638	$	10,069,557

(a) Corresponds to signed court settlements for the recognition of debts regarding the Certificates of Deposit secured by ADEMSA (see Note 30f).

(b) Since formal waiver from the financial institution with respect to the incompliance of the obligation of the “Minimum Capital” ratio, the Company was obtained on March 4, 2016, the balance of this debt was presented as short term.

(c) As of the issue date of these consolidated financial statements, the Company is in the process of negotiating with the bank the restructuring of the payment schedule and a new maturity date.

(d) As of the issue date of these consolidated financial statements, Grupo TMM has not made the capital and interest payments, therefore Grupo TMM is in the process of negotiating the restructuring of the payment schedule and a new maturity date.

Covenants

Some of 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. Except as noted in point (b) above, at December 31, 2015 and 2014, Grupo TMM and subsidiaries were in compliance with these covenants.

The interest expense on the trust certificates and bank loans was $714,105 and $755,366 for the years ended December 31, 2015 and 2014, respectively.

Grupo TMM, S.A.B. and Subsidiaries 37

The maturity of the long-term financial debt at December 31, 2015 and 2014 is as follows:

Maturity	2015		2014
2016	$	—	$	49,804
2017		52,273		71,722
2018		44,382		38,650
2019		47,400		36,475
2020		32,936		41,417
2021 and thereafter		9,818,511		9,831,489
	$	9,995,502	$	10,069,557

17 Balances and transactions with related parties

The accounts payable and transactions with related parties at December 31, 2015 and 2014 are summarized as follows:

	2015				2014
	Receivable		Payable		Receivable		Payable
SSA México, S.A. de C.V.	$	76	$	28,291	$	—	$	18,110

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 and consulting.

The most relevant transactions with related parties at December 31, 2015, 2014 and 2013 are summarized as follows:

	2015		2014		2013
Income:
Leases (a)	$	788	$	788	$	788
Expenses:
Other expenses (b)	$	250	$	220	$	127

(a) Grupo TMM, S.A.B. leases with SSA México, S.A. de C.V.

(b) Management consulting billed by SSA México, S.A. de C.V. to Administración Portuaria Integral de Acapulco, S.A. de C.V.

Operations involving executive personnel for the years ended December 31, 2015, 2014 and 2013 include the following expenses:

	2015		2014		2013
Short-term benefits
Salaries	$	40,571	$	40,056	$	41,671
Social security costs		775		855		872
	$	41,346	$	40,911	$	42,543

Grupo TMM, S.A.B. and Subsidiaries 38

18 Accounts payable and accrued expenses

Accounts payable and accrued expenses at December 31, 2015 and 2014 are shown as follows:

	2015		2014
Operating expenses	$	246,195	$	229,135
General expenses		129,603		148,841
Taxes payable		25,150		24,904
Purchased services		17,963		158,753
Salaries and wages		5,974		17,053
Other		33,316		34,176
	$	458,201	$	612,862

19 Disposal of assets and groups classified as held for sale and discontinued operations

At the beginning of 2013, Management decided to discontinue the warehousing, truck transportation and haul-away trailers operations. This decision was made in keeping with Grupo TMM’s strategy to focus on its better performing businesses. By consequence, the assets and liabilities of ADEMSA (warehousing) and Lacto (truck transportation and haul-away trailers), included in the logistics division segment, were classified as assets held for sale. In addition, during 2014 the Company decided to dispose of the cabotage business.

As at December 31, 2015 and 2014, the carrying values of assets and liabilities within disposal include the warehousing and cabotage business, since the truck transportation and haul-away trailers business was sold prior to 2013 year end, as discussed herein below.

	2015		2014
Current assets
Cash and cash equivalents	$	861	$	692
Other accounts receivable		31,237		20,764
Customers		15,834		15,757
Prepayments		141		552
Non-current assets
Property, machinery and equipment		127,683		128,582
Other assets		18,444		18,573
Assets classified as held for sale	$	194,200	$	184,920
Short-term liabilities
Accounts payable	$	79,013	$	63,313
Vendors		8,751		12,051
Bank loans (a)		2,584		1,269
Long-term liabilities
Bank loans (a)		5,734		5,897
Deferred taxes		11,620		11,620
Liabilities related to assets classified as held for sale	$	107,702	$	94,150

(a) It corresponds to a line of credit contracted with Banco del Bajio, S. A. in September 2013, with a variable EIIR rate at 28 days plus 250 points with monthly interest payments and capital maturities in August 2020, as well as a debt owed to Caja de Ahorro Popular la Merced Sociedad de Ahorro y Préstamo, S. de R.L. de C.V. at a 6% annual rate with monthly payments on unpaid balances on the principal and interest, due September 2017.

Grupo TMM, S.A.B. and Subsidiaries 39

On July 15, 2013, Lacto Comercial Organizada, S.A. de C.V., subsidiary that had conducted the truck transportation and haul-away trailers operation, was sold to an unrelated third party, therefore since said date, Grupo TMM has ceased to recognize this discontinued operation in the consolidated statements of financial position and in profit or loss (see Note 1).

Grupo TMM expects to complete the sale of the warehousing business during 2016.

The income and expenses, gains and losses associated with the discontinuation of this subgroup have been eliminated from profits or losses from the continued operations of Grupo TMM and are reported in the consolidated statement of operations under the line “Loss from discontinued operations”.

At December 31, 2015, 2014 and 2013, the loss for the warehousing, cabotage, truck transportation and haul-away trailers operation, are summarized as follows:

	2015			2014			2013
Income	$	151,883		$	143,153		$	419,345
Operating costs and expenses		(213,739	)		(239,582	)		(437,608	)
Depreciation and amortization		(1,590	)		(2,980	)		(19,464	)
Other income		(2,110	)		8,707			2,218
Operating loss		(65,556	)		(90,702	)		(35,509	)
Financial costs		(372	)		(266	)		(3,560	)
Loss from discontinued operations		(65,928	)		(90,968	)		(39,069	)
Loss from the sale of business		—			—			(24,413	)
Loss for the year from discontinued operations	$	(65,928	)	$	(90,968	)	$	(63,482	)

The cash flows generated by the warehousing, truck transportation and haul-away trailers business for the reporting periods under review until disposal are summarized as follows:

	2015			2014			2013
Operating activities	$	(1,036	)	$	273		$	(71,273	)
Investment activities		(473	)		(1,712	)		15,249
Financing activities		1,679			743			7,582
Cash flows from discontinued operations	$	170		$	(696	)	$	(48,442	)

20 Stockholders’ equity

Capital stock

At December 31, 2015 and 2014, 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 Mexican nationals, investors, or companies that include in their bylaws the exclusion of foreigners clause. Foreigners may acquire shares under the figure of American Depository Shares (“ADSs”).

Grupo TMM, S.A.B. and Subsidiaries 40

On June 5, 2012, the Company registered Form 25 with the US Securities and Exchange Commission (SEC) to complete the delisting of its ADSs on the New York Stock Exchange, effective as of market closing on June 15, 2012. Following this date, the TMM 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.

Net tax profit account (CUFIN)

At December 31, 2015 and 2014, the current balance in the Net Tax Profit Account (CUFINfor its acronym in Spanish) of the Holding Company it is as follows:

	2015		2014
CUFIN generated up to December 31, 2013	$	2,848,939	$	2,789,523
CUFIN generated beginning 2014		—		—
	$	2,848,939	$	2,789,523

Dividends or earnings distributed to stockholders that are paid out of the CUFIN balance generated up to December 31, 2013 will not be subject to income tax until that balance is exhausted. Moreover, those balances paid out of the CUFIN generated beginning fiscal 2014 paid to individuals or foreign residents are subject to a 10% tax, which is final.

Dividends not drawn from the CUFIN, in addition to the above, will continue to be subject to income tax, paid by the entity, based on the general rate set by law, which is definitive and may be credited against the income tax for this and the next two years. The balance in these accounts is susceptible to adjustment to the distribution date using the Mexican Consumers’ Price Index (INPC).

Capital decreases

At December 31, 2015 and 2014, the current balance in the Capital Contribution Account (CUCAfor its acronym in Spanish) is $4,896,351 and $4,794,234, respectively. In the event of capital reimbursement or decreases in favor of stockholders, the surplus for said reimbursement on this amount will be treated as a distributed earning.

In the event the equity capital exceeds the balance in the CUCA, the difference will be considered a dividend or distributed earning subject to the payment of income tax. If the earnings in reference come from the CUFIN, there will be no corporate tax due for the capital decrease or reimbursement. Otherwise, these will be treated as dividends or distributed earnings.

Grupo TMM, S.A.B. and Subsidiaries 41

Other components of equity

Details of other components of equity at December 31, 2015 and 2014 are shown following:

	Statutory reserve		Premium on convertible obligations		Translation result			Revaluation surplus			Total
Balance at December 31, 2013	$	216,948	$	77,106	$	(247,668	)	$	941,415		$	987,801
Revaluation of vessels		—		—		—			1,352,710			1,352,710
Reclassification from disposal of properties		—		—		—			(413,718	)		(413,718	)
Total before taxes		—		—		—			938,992			938,992
Tax expense		—		—		—			(405,813	)		(405,813	)
Total net of taxes		—		—		—			533,179			533,179
Balance at December 31, 2014		216,948		77,106		(247,668	)		1,474,594			1,520,980
Revaluation of vessels		—		—		—			1,157,690			1,157,690
Reclassification from disposal of properties		—		—		—			(78,002	)(a)		(78,002	)
Total before taxes		—		—		—			1,079,688			1,079,688
Tax expense		—		—		—			(347,307	)		(347,307	)
Total net of taxes		—		—		—			732,381			732,381
Balance at December 31, 2015	$	216,948	$	77,106	$	(247,668	)	$	2,206,975		$	2,253,361

(a) It corresponds to the reclassification of the revaluation surplus of a plot of land located in Tultitlan, Estado de Mexico, whose disposal to an unrelated third party was completed pursuant to a contract dated November 19, 2015. That plot of land had previously been presented as part of assets held for sale in the sale of Lacto (See Note 19).

21 Other income (expenses)

Other income (expenses) at December 31, 2015, 2014 and 2013 is summarized as follows:

	2015			2014			2013
Proceeds from the sale of subsidiaries (a)	$	185,320		$	358,050		$	8,148
Cancellation of liabilities		5,859			16,737			9,819
Taxes recovered, net of expenses incurred		—			(293	)		41,946
Loss on investments in shares from recognition of cumulative losses		—			(15,971	)		—
Gain on the adjudication of property		—			—			14,063
Other – Net		(231	)		(1,706	)		(9,986	)
Cancellation of projects		(4,948	)		—			—
	$	186,000		$	356,817		$	63,990

(a) In 2015 and 2014, corresponds to the income from the sale of subsidiaries (see Note 1).

Grupo TMM, S.A.B. and Subsidiaries 42

22 Interest expense and other financial costs

This line at December 31, 2015, 2014 and 2013 is comprised as follows:

	2015			2014		2013
Interest on trust certificates	$	618,818		$	660,357	$	764,858
Interest on other loans		95,287			95,009		80,865
Valuation of interest rate CAP		(12	)		128		(4,370	)
Amortization of trust certificate placement expenses		75,224			74,229		78,354
Amortization of expenses associated with other loans		4,754			6,589		10,848
Other financial expenses		5,735			18,716		12,262
	$	799,806		$	855,028	$	942,817

23 Income tax and tax loss carryforwards

Income Tax

Until December 31, 2013, Grupo TMM had been authorized by the Mexican tax authorities to determine its consolidated taxable income jointly with its controlled companies.

On December 11, 2013, a Decree was published in the Official Federal Gazette to reform, add, and repeal various tax provisions, entering into effect on January 1, 2014 (2014 Tax Reform). This Decree repealed the Corporate Flat Tax law and the Income Tax Law in effect until December 31, 2013 and enacted a new Income Tax Law.

Termination of the Consolidation Regimen

The new Income Tax Law eliminates the regimen of fiscal consolidation by which the Company had determined its consolidated income tax until December 31, 2013. Regarding this, on February 13, 2014, the Company filed an indirectamparo (writ of relief) (see Note 30g).

Results for the year

Grupo TMM and Subsidiaries incurred combined taxable income for the years ended December 2015 and 2014, in the amounts of $397,273 and $1,093,152, respectively. Most of the companies that generated taxable income fully offset them against tax losses from prior years. Income on tax recognized in profit or loss corresponds to subsidiaries that generated taxable income of $11,000 and $15,607, 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, non-deductible expenses, as well as certain temporary differences reported in different periods for financial and tax purposes.

In accordance with the currently enacted Income Tax Law, the rate for 2013, 2014, 2015, and subsequent years is 30%.

Grupo TMM, S.A.B. and Subsidiaries 43

The provision for income tax recognized in the statement of profit or loss for the years ended December 31, 2015, 2014 and 2013 is shown following:

	2015			2014			2013
Income tax	$	(3,300	)	$	(4,682	)	$	(4,423	)
Corporate flat tax		—			—			(264	)
Deferred tax for the year		(695,161	)		—			—
Total income taxes	$	(698,461	)	$	(4,682	)	$	(4,687	)

The reconciliation between the provision for income tax based on the statutory income tax rate and the provision recorded by the Company at December 31, 2015, 2014 and 2013 is as follows:

	2015			2014			2013
Loss before taxes	$	(254,481	)	$	(418,831	)	$	(483,252	)
Income tax		76,344			125,649			144,976
(Decrease) increase from:
Difference in depreciation and amortization		(232,397	)		(454,778	)		141,677
Revaluation surplus		334,716			405,813			28,988
Income recognized in advance		(11,409	)		(6,353	)		(57,814	)
Materials and supplies		(14,497	)		(6,264	)		(13,405	)
Inflationary and currency exchange effects on monetary assets and liabilities, net		(87,765	)		(150,405	)		(148,868	)
Tax losses – net		(498,884	)		294,411			25,429
Provisions and allowance for doubtful accounts		(143,685	)		(19,710	)		(76,564	)
Difference between the tax and book value for the sale of assets		(49,084	)		(22,435	)		(16,252	)
Difference between the tax and book value for the sale of shares		7,902			(136,557	)		(12,470	)
Non-deductible expenses		(79,702	)		(34,053	)		(20,384	)
Provision for income tax	$	(698,461	)	$	(4,682	)	$	(4,687	)

The components of deferred tax (liabilities) assets at December 31, 2015 and 2014 are comprised as follows:

	2015			2014
Tax loss carryforwards	$	1,458,633		$	2,584,501
Valuation allowance for tax losses		(7,543	)		(352,154	)
		1,451,090			2,232,347
Inventories and provisions – net		26,820			46,142
Concession rights and property, machinery and equipment		(1,697,482	)		(1,468,165	)
Total deferred tax (liabilities) assets	$	(219,572	)	$	810,324

Corporate flat tax

As described in the previous note, the Corporate Flat Tax Law was repealed in December 2013.

The corporate flat tax for the period had been calculated applying a rate of 17.5% to the earnings determined based on cash flows, which reduced the total income earned from the activities to which this tax applies, by the authorized deductions. The corporate flat tax credits were deducted from the above income, as provided for by current law.

Grupo TMM, S.A.B. and Subsidiaries 44

During the year ended December 31, 2013, the Company determined deductions higher than the corporate flat tax income for $312,237.

Tax loss carryforwards

At December 31, 2015, Grupo TMM and its subsidiaries, report the following cumulative tax losses, which are restated applying the INPC factors according to Mexican law.

Year in which the loss was incurred	Amounts restated to December 2015		Year of expiration
2006	$	32,592		2016
2007		237,249		2017
2008		653,206		2018
2009		726,965		2019
2010		921,507		2020
2011		573,410		2021
2012		713,518		2022
2013		636,562		2023
2014		227,826		2024
2015		139,275		2025
	$	4,862,110

24 Segment reporting

The Company operates in the following segments: i) specialized maritime transportation, ii) logistics, and iii) operation of ports and terminals, and related services. The specialized maritime transportation operations (“Maritime Division”) include the transportation of liquid petroleum and petrochemical products in bulk, materials and supplies for drilling platforms, as well as tugboat services. The land transportation operations (“Logistics Division”) include warehousing services and logistics solutions, and until 2013, truck transportation and haul-away trailers services. The port and terminal operations (“Ports and Terminals Division”) include terminal services and shipping agency activities.

In September 2013, the Company completed the sale of a portion of its assets in the Logistics Division, including the trucking and autotransporter operations. The Company continues to provide its warehousing services as discontinued operations in accordance with IFRS 5 “Non-current assets held for sale and discontinued operations”.

Grupo TMM, S.A.B. and Subsidiaries 45

There are 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, 2015	Specialized maritime division			Logistics division			Ports and terminal division			Other businesses and shared accounts			Total consolidated
Revenue	$	2,770,891		$	169,709		$	114,225		$	73,950		$	3,128,775
Costs and expenses		(1,630,348	)		(137,308	)		(96,080	)		(72,666	)		(1,936,402	)
Corporate expenses		—			—			—			(199,057	)		(199,057	)
Depreciation and amortization		(648,079	)		(4,968	)		(10,582	)		(7,428	)		(671,057	)
Transportation profit (loss)	$	492,464		$	27,433		$	7,563		$	(205,201	)	$	322,259
Costs, expenses and revenue not allocated														(1,275,201	)
Loss before discontinued operations														(952,942	)
Discontinued operations														(65,928	)
Net loss for the year													$	(1,018,870	)
Total assets by operating segment	$	12,860,912		$	16		$	1,621,311		$	—		$	14,482,239
Total assets by discontinued segment		—			194,200			—			—			194,200
Shared assets		—			—			—			(2,260,331	)		(2,260,331	)
Total assets	$	12,860,912		$	194,216		$	1,621,311		$	(2,260,331	)	$	12,416,108
Total liabilities by operating segment	$	10,822,299		$	51,081		$	230,753		$	—		$	11,104,133
Total liabilities by discontinued segment		—			107,702			—			—			107,702
Shared liabilities		—			—			—			772,467			772,467
Total liabilities	$	10,822,299		$	158,783		$	230,753		$	772,467		$	11,984,302
Total capital expenditures by segment	$	78,541		$	—		$	3,369		$	—		$	81,910
Shared capital expenditures		—			—			—			19,976			19,976
Total capital expenditures	$	78,541		$	—		$	3,369		$	19,976		$	101,886
December 31, 2014	Specialized maritime division			Logistics division			Ports and terminal division			Other businesses and shared accounts			Total consolidated
Revenue	$	2,488,295		$	161,984		$	114,954		$	67,189		$	2,832,422
Costs and expenses		(1,384,242	)		(131,093	)		(99,700	)		(64,946	)		(1,679,981	)
Corporate expenses		—			—			—			(175,068	)		(175,068	)
Depreciation and amortization		(832,735	)		(4,452	)		(10,611	)		(7,514	)		(855,312	)
Transportation profit (loss)	$	271,318		$	26,439		$	4,643		$	(180,339	)	$	122,061
Costs, expenses and revenue not allocated														(545,574	)
Loss before discontinued operations														(423,513	)
Discontinued operations														(90,968	)
Net loss for the year													$	(514,481	)
Total assets by operating segment	$	16,472,921		$	2,228		$	1,603,633		$	—		$	18,078,782
Total assets by discontinued segment		—			184,920			—			—			184,920
Shared assets		—			—			—			(5,339,375	)		(5,339,375	)
Total assets	$	16,472,921		$	187,148		$	1,603,633		$	(5,339,375	)	$	12,924,327
Total liabilities by operating segment	$	11,147,274		$	412,751		$	240,391		$	—		$	11,800,416
Total liabilities by discontinued segment		—			94,150			—			—			94,150
Shared liabilities		—			—			—			392,216			392,216
Total liabilities	$	11,147,274		$	506,901		$	240,391		$	392,216		$	12,286,782
Total capital expenditures by segment	$	184,265		$	—		$	13,905		$	—		$	198,170
Shared capital expenditures		—			—			—			29,066			29,066
Total capital expenditures	$	184,265		$	—		$	13,905		$	29,066		$	227,236

Grupo TMM, S.A.B. and Subsidiaries 46

December 31, 2013	Specialized maritime division			Logistics division			Ports and terminal division			Other businesses and shared accounts			Total consolidated
Revenue	$	2,455,316		$	219,245		$	113,414		$	50,567		$	2,838,542
Costs and expenses		(1,375,189	)		(175,229	)		(101,972	)		(50,353	)		(1,702,743	)
Corporate expenses		—			—			—			(196,886	)		(196,886	)
Depreciation and amortization		(562,340	)		(3,378	)		(11,193	)		(8,696	)		(585,607	)
Transportation profit (loss)	$	517,787		$	40,638		$	249		$	(205,368	)	$	353,306
Costs, expenses and revenue not allocated														(841,245	)
Loss before discontinued operations														(487,939	)
Discontinued operations														(63,482	)
Net loss for the year													$	(551,421	)
Total assets by operating segment	$	14,971,325		$	49,041		$	1,695,120		$	—		$	16,715,486
Total assets by discontinued segment		—			186,628			—			—			186,628
Shared assets		—			—			—			(4,722,760	)		(4,722,760	)
Total assets	$	14,971,325		$	235,669		$	1,695,120		$	(4,722,760	)	$	12,179,354
December 31, 2013	Specialized maritime division			Logistics division			Ports and terminal division			Other businesses and shared accounts			Total consolidated
Total liabilities by operating segment	$	11,034,676		$	235,996		$	390,025		$	—		$	11,660,697
Total liabilities by discontinued segment		—			122,661			—			—			122,661
Shared liabilities		—			—			—			195,013			195,013
Total liabilities	$	11,034,676		$	358,657		$	390,025		$	195,013		$	11,978,371
Total capital expenditures by segment	$	252,269		$	2,691		$	11,317		$	—		$	266,277
Shared capital expenditures		—			—			—			24,489			24,489
Total capital expenditures	$	252,269		$	2,691		$	11,317		$	24,489		$	290,766

25 Employee benefits

Expense for employee benefits

The expenses recognized for employee benefits are:

	2015		2014		2013
Salaries, benefits and inherent	$	625,957	$	617,860	$	659,196
Pensions – defined benefit plans		22,805		18,083		8,048
	$	648,762	$	635,943	$	667,244

The liabilities recognized for pensions and other employee remunerations in the consolidated statement of financial position are comprised as follows:

	2015		2014
Long-term:
Pensions and seniority premium	$	189,213	$	182,002
Termination of employment		22,029		19,880
	$	211,242	$	201,882

The liabilities for employee benefits, short term, are included in the line “Accounts payable and accrued liabilities” in the consolidated statements of financial position, which at December 31, 2015 and 2014 are $5,974 and $17,053, respectively.

Grupo TMM, S.A.B. and Subsidiaries 47

Remunerations on the termination of employment

The seniority premiums and the retirement plan (“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.

The amounts charged to operations 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, the actuarial (loss) gain net of taxes for 2015 and 2014 was $3,421 and $2,887, respectively.

The plan exposes Grupo TMM to such risks as interest rate, investment, mortality, and inflation.

Interest rate risk

The present value of the defined benefits obligation is calculated using a discount rate making reference to the market performance of high quality corporate bonds.

The estimated term for the bonds is consistent with the estimated term for the defined benefits obligation and is denominated in pesos. A decrease in the market performance of high quality corporate bonds will increase the defined benefits obligation of Grupo TMM, although this is expected to be partially compensated by an increase in the fair value of certain of the plan’s assets.

Investment risk

The plan assets are predominantly capital and debt instruments traded on the Mexican Stock Exchange which are considered low risk.

Mortality risk

Grupo TMM provides benefits for life to those who are covered by the defined benefits liability. An increase in the life expectancy of such persons will increase the defined benefits liability.

Inflation risk

A significant proportion of the defined benefits obligation is linked to inflation. An increase in the inflation rate will increase the Company’s obligation.

The details of the net cost for the period for seniority premiums and termination of employment, and also the basic actuarial estimates for the calculation of these labor obligations is shown as follows:

	2015				2014
	Pensions and seniority premiums		Termination of employment		Pensions and seniority premiums		Termination of employment
Current service cost	$	5,679	$	1,547	$	4,944	$	(423	)
Interest cost		14,008		1,571		12,185		1,377
Net cost for the period	$	19,687	$	3,118	$	17,129	$	954

Grupo TMM, S.A.B. and Subsidiaries 48

At December 31, 2015 and 2014, the reserve for pensions and seniority premiums, and also for the termination of employment, is comprised as follows:

	2015					2014
	Pensions and seniority premiums			Termination of employment		Pensions and seniority premiums			Termination of employment
Defined benefit obligations	$	191,134		$	22,029	$	183,925		$	19,880
Plan assets		(1,921	)		—		(1,923	)		—
Total reserve	$	189,213		$	22,029	$	182,002		$	19,880

At December 31, 2015 and 2014, the DBO for pensions and seniority premiums, and also for the reserve for termination of employment, are comprised as follows:

	2015						2014
	Pensions and seniority premiums			Termination of employment			Pensions and seniority premiums			Termination of employment
DBO at period start	$	183,925		$	19,880		$	180,184		$	19,568
Current service cost		5,679			1,547			4,944			(423	)
Interest cost		14,008			1,571			12,185			1,377
Benefits paid		(256	)		—			(2,340	)		—
Benefits paid from plan assets		(9,752	)		—			(9,360	)		—
Miscellaneous		(7	)		(11	)		—			(26	)
Actuarial losses and gains		(2,463	)		(958	)		(1,688	)		(616	)
DBO at period end	$	191,134		$	22,029		$	183,925		$	19,880

The plan assets at December 31, 2015 and 2014 are comprised as follows:

	2015			2014
Value of the fund at year start	$	1,923		$	1,193
Expected return on assets		(194	)		583
Plan contributions		9,752			9,413
Benefits paid		(9,752	)		(9,360	)
Interests of plan assets		192			94
Value of the fund at year end	$	1,921		$	1,923

The changes in the pension plan, seniority premium, and termination of employment plan at December 31, 2015 and 2014 are as follows:

	2015			2014
Reserve for obligations at year start	$	201,882		$	198,559
Total cost for the year		22,805			18,083
Contributions to the plan		(9,752	)		(9,413	)
Miscellaneous		(16	)		(93	)
Benefits paid charged to the reserve		(256	)		(2,367	)
Actuarial (loss) gains		(3,421	)		(2,887	)
Reserve for obligations at year end	$	211,242		$	201,882

Grupo TMM, S.A.B. and Subsidiaries 49

The significant actuarial assumptions used for the valuation are:

	2015			2014
Discount rate		8.25	%		8.00	%
Salary increase rate		4.00	%		4.00	%
Inflation rate		3.50	%		3.50	%
Average working life expectancy		19.00			16.00

These assumptions were prepared by Management with the assistance of independent actuaries. The discount factors are determined near the end of each year making reference to the market performance of high quality corporate bonds denominated in the currency in which the benefits will be paid and which have similar maturities to the terms for the pension obligation corresponding. Other assumptions are based on actual reference parameters and Management’s historical experience.

At December 31, 2015 and 2014, approximately 11% and 10%, respectively, of the Company’s employees work under collective bargaining agreements that are subject to annual salary reviews and biannually for other compensations. At December 31, 2015 and 2014, Grupo TMM has 1,750 and 1,737 employees, respectively.

The significant actuarial assumptions to determine the defined benefits obligation are the discount rate, the salary increase rate, and the average life expectancy. The calculation of the defined benefits obligation is sensitive to these assumptions. The following table summarizes the effects of changes to these actuarial assumptions on the defined benefits obligations at December 31, 2015:

	1.0% increase			1.0% decrease
Discount rate
(Decrease) increase in the defined benefits obligation	$	(13,990	)	$	4,777
	1.0% increase			1.0% decrease
Salary increase rate
Increase (decrease) in the defined benefits obligation	$	11,730		$	(8,878	)
	One year increase			One year decrease
Average life expectancies
Increase (decrease) in the defined benefits obligation	$	5,079		$	(4,553	)

The present value of the defined benefits obligation and also the defined benefits obligation recognized in the consolidated statement of financial position are calculated using the same method (projected unit credit). The sensitivity analyses are based on a change in one assumption without changing the others. This sensitivity analysis may not be representative of the real variance in the defined benefits obligation, as it is unlikely that the change to the assumptions would occur on its own, as some of the assumptions may be correlated.

Grupo TMM, S.A.B. and Subsidiaries 50

26 Loss per share

At December 31, 2015, 2014 and 2013 number of shares outstanding during the year. There are no potentially dilutive instruments outstanding, therefore basic and diluted loss per share are the same.

27 Fair value measurement

Fair value measures for non-financial assets

The non-financial assets and liabilities measured at fair value in the statement of financial position are grouped into three levels of fair value hierarchy. The three levels are defined based on the observability of relevant data for the measuring, as follows:

• Level 1: quoted prices (without adjustment) in active markets for identical assets and liabilities;

• Level 2: data other than the quoted prices included in Level 1 that are observable for the asset and liability, either directly or indirectly;

• Level 3: non-observable data for the asset or liability.

At December 31, 2015 and 2014 non-financial assets measured at fair value are classified in Level 3 of this hierarchy, as described below:

	2015		2014
Level 3
Vessels	$	8,131,363	$	7,609,796
Buildings and facilities		186,937		195,201
Land		880,620		872,220
	$	9,198,920	$	8,677,217

The fair value for the principal vessels and properties of Grupo TMM is estimated based on appraisals prepared by independent naval engineers specializing in sea vessels and artifacts, and also independent, qualified real estate appraisers.

The important information and assumptions are prepared in close collaboration with Management. The valuation processes and changes in the fair value are reviewed by the Administration and Finance Department on the financial reporting date. Additional information on these appraisals follows.

Offshore vessels and tugboats (Level 3)

The fair values for the offshore vessels and tugboats are estimated using a market focus that reflects the recent market prices observed for comparable vessels and incorporates adjustments for factors specific to the vessel in question, principally including those related to dimensions, capacity, propulsion power, and vessel age. The adjustments incorporated depend on the characteristics of each vessel.

The most significant information used, which is not observable, is the adjustment for factors specific to the vessels. The magnitude and direction of this adjustment factor depends on the characteristics of observable market transactions for similar vessels used as the end point for the appraisal. Although this information is subjective, Management considers that the global appraisal will not be materially affected by reasonably possible alternatives.

Grupo TMM, S.A.B. and Subsidiaries 51

Tanker and specialized vessels (Level 3)

The fair values for tanker and specialized vessels are estimated based on revenue that capitalizes the estimated revenue cash flows from the leasing of vessels net of operating costs projected, using an appropriate discount rate that reflects the required performance for similar assets. Cash flows are calculated based on the average of international charter rates and operating costs (including maintenance), and also the historical utilization level. The value of vessels is sensitive to changes in these variables.

The most significant information, which is not observable, is the value of the estimated daily rates, the assumptions for the percentage of utilization and the discount rate. The fair value increases if the estimated daily rates and the percentage of utilization increase or if the discount rate (market yields) decreases. The appraisals in general are sensitive to these three assumptions.

Management believes that the range of reasonably possible alternatives is greater for the value of the rates and the percentage of use, and also that there is a correlation between these factors.

The information used for the appraisal at December 31, 2015 was:

	Tanker vessels			Especialized vessels
Daily rate or fee		14,173			52,985
Average percentage of utilization		98	%		98	%
Discount rate		7.18	%		7.18	%

Buildings, facilities and land (Level 3)

The valuation was prepared based on a market focus that reflects the prices observed on recent market transactions involving similar properties and incorporates adjustments for factors specific to the property in question, including land size, location, attachments, and current use. In 2013, the year of the last valuation, an average positive adjustment of 8% was incorporated for these factors.

The most significant information used, which is not observable, is the adjustment for factors specific to the properties in question. The magnitude and direction of this adjustment depends on the characteristics of observable market transactions for similar properties used as the end point for the valuation. Although this information is subjective, Management considers that the global valuation will not be materially affected by reasonably possible alternatives.

At December 31, 2015 and 2014, the reconciliation between the carrying amounts of non-financial assets classified within Level 3 is as follows:

	Vessels			Buildings and facilities
Balance at January 1, 2015	$	7,609,796		$	1,067,421
Amount recognized in other comprehensive income:
Revaluation surplus of vessels		1,157,690			—
Amount recognized in statements of operations:
Loss on revaluation of vessels		(41,970	)		—
		1,115,720			—
Additions and disposals, net		(594,153	)		136
Balance at December 31, 2015	$	8,131,363		$	1,067,557

Grupo TMM, S.A.B. and Subsidiaries 52

	Vessels			Buildings and facilities
Balance at January 1, 2014	$	7,030,847		$	1,545,665
Amount recognized in other comprehensive income:
Revaluation surplus of vessels		1,352,710			—
Amount recognized in statements of operations:
Loss on revaluation of vessels		(380,685	)		—
		972,025			—
Additions and disposals, net		(393,076	)		(478,244	)
Balance at December 31, 2014	$	7,609,796		$	1,067,421

At December 31, 2015 and 2014, there were no effects from unrealized gains from fair value measurements.

Financial instruments measured at amortized cost disclosing fair value

See Note 16.

28 Financial instruments risk

Grupo TMM’s main financial instruments, other than derivate financial instruments, are bank loans, securitization structures for future income, cash and short term deposits. The main objective of these financial instruments is to provide the Company with all necessary funds to properly perform its operations. The Company has several financial assets and liabilities, such as commercial credits and commercial payables, which arise directly from its operations.

Grupo TMM also enters into derivate transactions, such as interest rate CAPs as discussed in Note 16. The objective is to manage variable interest rate risks arising from the Company’s operations and from its financing sources. The method to acknowledge the resulting gain or loss depends on the nature of the coverage.

The main risks arising from the Company’s financial instruments are the cash flow risk deriving from interest rate variations, liquidity risk, interest rate risk and credit risk. The Company analyzes the risks and determines management policies for each of these risks as described in the following summary.

Cash flow risk

The Company’s revenues and its operating cash flows are independent from variances in the market interest rate.

Grupo TMM’s policy is to manage its interests cost by using a combination of a fixed and variable rate of debts. In order to manage this combination with an efficient cost, Grupo TMM enters into interest rate swaps, where it commits to interchanging, at determined intervals, the difference between the fixed interest rate and the variable interest rate at amounts that are calculated in reference to an agreed theoretical amount of principal, through agreements in which Grupo TMM receives the difference in excess of the maximum interest rate determined in the contracts. This exchange is aimed to cover for the underlying debt obligations.

Grupo TMM, S.A.B. and Subsidiaries 53

Currency risk

The monetary position for Grupo TMM may be materially affected by variances in the exchange rate between the US dollar and the Mexican peso due to the Company’s significant operations in Mexico. The Company does not cover this exposure. Grupo TMM minimizes its exposure effects in foreign currency by contracting financial debt in Mexican pesos. In July 2010, the Company issued Trust Certificates for approximately $10,500,000.

Grupo TMM also faces transactional currency exposure. This exposure derives from sales and acquisitions made in currencies other than Mexican pesos, Grupo TMM’s functional currency. At December 31, 2015 and 2014, approximately 75% and 70%, respectively, of Grupo TMM’s sales are denominated in US dollars, while approximately 28% of the costs and expenses for both years are denominated in US dollars.

At December 31, 2015 and 2014, the Company held monetary assets and liabilities denominated in foreign currencies other than the Mexican peso, translated at the corresponding interbank exchange rate as related to the Mexican peso, as follows:

	2015						2014
	US $			Other currencies			US $			Other currencies
Assets	$	1,443,579		$	1,566		$	1,722,306		$	1,444
Liabilities		(1,220,388	)		(4,873	)		(1,355,313	)		(10,591	)
	$	223,191		$	(3,307	)	$	366,993		$	(9,147	)

At December 31, 2015 and 2015, the exchange rate was Ps17.3398 and Ps14.7348 per US dollar, respectively.

At April 29, 2016, release date of the consolidated financial statements, the net position in US dollars, unaudited, was similar to that at December 31, 2015, and the exchange rate was Ps17.3993 (per dollar).

Sensitivity analysis

The following table shows for the years ended December 31, 2015 and 2014, the sensitivity in operations associated with to the financial assets and liabilities of Grupo TMM and the exchange rate; US dollar (USD)/peso “considering that the rest of the conditions remain unchanged”. Assuming a variance of +/- 17.63% for 2015 and +/- 12.86% for 2014 in the peso/USD exchange rate. This percentage was determined based on the volatility of the average exchange rate market over the past 12 months. The sensitivity analysis is based on financial instruments in foreign currency held by Grupo TMM on the reporting date.

Grupo TMM, S.A.B. and Subsidiaries 54

If the peso had strengthened or weakened against the USD by 17.63% for 2015 and 12.86% for 2014, this would have had the following impact on the monetary position:

	2015						2014
	17.63% Increase in the exchange rate			17.63% decrease in the exchange rate			12.86% Increase in the exchange rate			12.86% decrease in the exchange rate
Assets in US dollars	$	255,214		$	(255,214	)	$	221,410		$	(221,410	)
Assets in other currencies		277			(277	)		182			(182	)
Liabilities in US dollars		(215,755	)		215,755			(174,232	)		174,232
Liabilities in other currencies		(862	)		862			(1,362	)		1,362
	$	38,874		$	(38,874	)	$	45,998		$	(45,998	)

The exposure to exchange rates varies during each year, depending on the volume of overseas operations or in foreign currency; however, the above analysis is considered representative of Grupo TMM’s exposure to currency risk.

Interest rate risks

Grupo TMM’s exposure to the risk of changes in market interest rates is related principally to the long-term debt obligations of Grupo TMM at a variable interest rate.

Grupo TMM’s policy is to obtain fixed rated instruments on its loans and, when a loan has a variable interest rate, the Company’s policy is to obtain all needed derivative financial instruments in order to fix this rate. At December 31, 2015, the Company had $633.5 and $10,799.2 million pesos of debt contracted on fixed and variable rates, respectively. At December 31, 2014, the debt contracted on fixed and variable rates was $568.0 and $11,102.1 million pesos, respectively.

The variable portion of the debt is associated with the Trust Certificates for an original amount of $10,500,000. The Company has an interest rate CAP which allows for the Issuer Trust’s maximum payable rate to be 10.80% per annum during the first 4 years of the offering. In January 2014, the Company again extended the CAP for the period from August 2014 to August 2015, under which the maximum rate payable is 9.80%. In addition, in April 2015, the Company extended the CAP for the period from August 2015 to August 2016, under which the maximum rate payable is 9.80%.

Sensitivity analysis

The following table illustrates the sensitivity in operations at December 31, 2015 and 2014 to a reasonably possible change in the interest rates of +/- 1%. These changes are considered to be reasonably possible based on the current market conditions. The calculations are based on a variance in the average market interest rate for each period and the financial instruments on the reporting date that are sensitive to variances in the interest rates. The rest of the variables remain constant.

	2015					2014
	+1% Variance			-1% Variance		+1% variance			-1% Variance
Profit or loss for the year	$	(2,971	)	$	2,838	$	(2,394	)	$	2,403

The impact shown in the above sensitivity is considered the same both in the results of operations and in stockholders’ equity.

Grupo TMM, S.A.B. and Subsidiaries 55

Credit risk

Grupo TMM only sells to solvent third parties. Grupo TMM’s policy is that all customers who prefer to operate under credit conditions are subject to credit verification procedures. Moreover, receivable balances are constantly watched so that Grupo TMM’s exposure loss on receivables is not significant.

As Grupo TMM only engages in these types of operations with third parties of recognized solvency, the Company does not require surety.

Regarding the credit risks derived from other financial assets of Grupo TMM, which include cash and cash equivalents, Grupo TMM’s exposure to risks is related to the possibility of non-compliance by its counterparts, with a maximum exposure that is equal to the sum of such instruments, which is considered immaterial, as the counterparts are banks with high reputation ratings given by independent rating agencies.

Some of the unimpaired accounts receivable are in arrears on the reporting date, as shown as follows:

	2015		2014
Up to 3 months	$	148,466	$	36,184
Up to 4 months		44,996		33,289
More than 4 months		244,780		42,226
	$	438,242	$	111,699

Regarding customers and other accounts receivable, Grupo TMM is not exposed to any significant problem of credit risk with any counterpart, either individually or as a group with similar characteristics. Based on historical information on the rate of default, Management considers the credit quality of the accounts receivable that are not in arrears or impaired, to be good.

Concentration of risk

For the year ended December 31, 2015, the Company obtained revenues from PEMEX Exploracion y Produccion, which represents 44% and 41%, respectively. None of the remaining customers represent more than 6% of its total revenues.

The Company permanently monitors the industry development in which its major clients operate, including significant key indicators such as oil prices, to consider it in the process of recognition and measurement of assets and liabilities in the consolidated financial statements.

Liquidity risk

The goal of Grupo TMM is to maintain a balance between the continuity of loans and flexibility through the use of bank loans and securitizations. At December 31, 2015 and 2014, only 6% and 8%, respectively, of Grupo TMM’s financial liabilities are due within the next 12 months.

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At December 31, 2015 and 2014, the financial liabilities of Grupo TMM have contractual maturities (including interest payments as applicable) are summarized as follows:

	Current				Non-Current
	In 6 months		6 to 12 months		1 to 4 years		More than 4 years
At December 31, 2015
Trade payables	$	—	$	279,044	$	—	$	—
Accounts payable and accrued expenses		—		458,201		—		—
Financial debt		203,091		481,657		168,487		9,827,015
	$	203,091	$	1,218,902	$	168,487	$	9,827,015
At December 31, 2014
Trade payables	$	—	$	371,583	$	—	$	—
Accounts payable and accrued expenses		—		612,862		—		—
Financial debt		357,422		561,216		155,781		9,913,776
	$	357,422	$	1,545,661	$	155,781	$	9,913,776

The above amounts reflect the contractual cash flows without discount, which may differ from the values registered in the liabilities on the reporting date.

Dissolution of the Company risk

Under the Corporation and Commercial Partnership Law, when a company has accumulated losses of more than two thirds its equity capital, the dissolution of the company needs to be approved by its stockholders during an Extraordinary General Meeting. Stockholders representing at least 33% of the stockholder capital can ask the Board of Directors to call an Extraordinary General Stockholders’ Meeting to discuss the dissolution of the company, but this is not mandatory. Company stockholders can approve any corporate strategy to address cumulative losses.

Also, the Business Reorganization Law provides that any third party holding legal interest can petition the courts to declare the company into bankruptcy. Legal interest is defined as being held by any creditor of the company. Such declaration can be petitioned by a creditor and if (a) the company has continuously defaulted on its payment obligations and the amount in default represents at least 35% of the company’s total obligations, and (b) the company has no assets with which to settle at least 80% of the obligations in default at the time of the petition.

As of May 2, 2016, Grupo TMM had not received any request for an Extraordinary Shareholders Meeting concerning the accumulated losses of the Company, nor had the Company received notice of any request to judicial authorities to declare dissolution of the Company.

29 Capital management policies and procedures

Grupo TMM’s capital management goal is to ensure the capacity of Grupo TMM to continue as a going concern and to provide its stockholders with an appropriate return on their investment. The Company monitors capital based on the carrying value plus its financial debt.

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The Company sets its capital amount proportionate to its overall financing structure, meaning, the capital and financial liabilities that are not loans. Grupo TMM manages the capital structure and makes adjustments in light of changes in the economic conditions and the associated risks of the underlying assets. In order to maintain or adjust the capital structure, Grupo TMM may adjust the amount of capital reimbursements to stockholders, or issue new shares or sell assets to reduce its financial debt.

At December 31, 2015 and 2014, the capital management is summarized as follows:

	2015			2014
Stockholders’ equity	$	431,806		$	637,545
Total financial debt		10,680,250			10,988,195
Cash and cash equivalents		(1,045,359	)		(743,046	)
General financing	$	9,634,891		$	10,245,149
Ratio of total debt to stockholders’ equity		4.48			6.22

30 Commitments and contingencies

Commitments

a) Concession fees

Pursuant to the concessions under the port and tugboat services are operated, the Company is required to make fixed and variable monthly payments. These payments totaled $15,572 and $8,707 in 2015 and 2014, respectively.

Contingencies

b) RPS Claim

On August 7, 2007, Transportación Marítima Mexicana, S.A. de C.V. (“TMM”) filed a claim for arbitration against Refined Product Services (“RPS”) for US$50 thousand (approximately $867.0), for various expenses incurred by TMM due to the delay of the re-delivery of the tanker vessel Palenque.

On October 19, 2007, RPS filed a countersuit for US$3.0 million (approximately $52,019), for alleged faults and lack of maintenance involving the tanker vessel Palenque, and also consequential damages for having lost a contract while the vessel was being repaired.

TMM’s position against this countersuit is strong, as there are sufficient elements and arguments for defense, also the amount claimed by RPS would appear to be excessive and for non-supported issues.

c) Mutual loans between WWS and TMM

In December 2007, TMM and Worldwide Services, Ltd. (“WWS”) filed mutual claims; TMM for $393.731 thousand dollars (approximately $7,087), claiming fuel and low return on the performance of the tanker ship Veracruz A, and WWS in the amount of $938 thousand dollars (approximately $16,889), primarily claiming a presumed over-performance of the same ship. Total claims against TMM amount to $2.4 million dollars.

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As at the issue date of the consolidated financial statements, total claims against TMM amount to $2.4 million dollars. However, those claims are considered weak.

TMM filed an appeal to have the case dismissed, claiming that the Court has no jurisdiction, since the arbitration proceedings were started with the name of the incorrect plaintiff. An oral hearing is foreseen in this year, which has not been set by the Court as at today.

Company Management believes it has strong arguments to support the claim and to defend its position on the arbitration that is being carried out.

d) Mutual loans between Pacific Richfield Marine Pte. Ltd. (“PRM”) and Grupo TMM

During 2014, all arbitration proceedings brought against Pacific Richfield Marine (“PRM”) were concluded unfavorably against Grupo TMM, involving the breach of two Purchase Agreements for the acquisition of two vessels. Grupo TMM lost the right to recover the deposit of US$5.2 million (approximately $90,167). On February 15, 2016 was signed aSettlement Agreementbetween Pacific Richfield Marine and TMM in which a payment was agreed for the amount 400,000 US dollars, which will be settled in the course of this year.

e) SSA vs. GTMM – Arbitration

On January 14, 2013, GTMM received a “Request for Arbitration” from SSA Inc. and SSA México, S.A. de C.V. (hereinafter, SSA). The arbitration was opened as on January 31, 2007 the Federal Tax Service (SAT) issued notice number 330-SAT-7-07071, which orders SSA México to pay various money amounts which at the time amounted to $274,454. SSA bases its defense primarily on arguing that TMM is responsible for indemnifying in accordance with the corresponding contract (Restated Master Agreement).

On December 22, 2014, the Court handed down the final ruling in favor of Grupo TMM. However, GTMM was ordered to pay the amount of $115,000 US dollars to SSA for reimbursement of arbitration expenses.

Pursuant to the foregoing, on December 23, 2015, GTMM and SSA signed an agreement to set off the amounts owed mutually pursuant to the arbitral award. The remaining credit balance in benefit of GTMM amounted to $510.4 pesos.

f) ADEMSA secured Certificates of Deposit

During 2011 and 2010, ADEMSA issued secured Certificates of Deposit in favor of various financial institutions, goods and/or amounts consigned thereto, which, as a result of the defaults by the producers and on exercising the right conferred by the Certificates, filed claim against ADEMSA for compliance with the obligations to deliver goods covered or payment of the amounts secured.

At December 31, 2015 and 2014, the Company held a reserve of $65,716 and $67,313, respectively, to settle the ADEMSA obligations, and also in these years, payments were made to financial institutions for $1,597 and $38,972, respectively. At December 31, 2015 and 2014, this reserve includes the liability related to non-current assets available for sale.

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g) Termination of the Consolidation Regimen

On February 13, 2014, the Company filed an indirect amparo (writ of relief) against various provisions related to the disappearance of the regimen of fiscal consolidation, offering arguments to demonstrate the unconstitutionality of various provisions violating the guarantees of proportionality, legality, and legal certainty, and also various human rights recognized by the Mexican Constitution and in international treaties to which Mexico is party.

Given the diversity of procedures in the tax laws to determine the effects of deconsolidation required by these, and also the various criteria to be used, and the possible results of the acts contested in theamparo, no disclosure is made regarding deconsolidation as there is no certainty as to the application of a specific procedure. The foregoing in order to not hold as accepted any of the procedures established in the tax reforms, and which could negatively affect the interests of the Company in theamparo case.

That claim was forwarded to the First Division of the Auxiliary Center of the First Region seated in Mexico City for study and resolution. Pursuant to the ruling handed down on February 16, 2016, that Division decided to deny the appeal for constitutional relief (amparo) and protection of Federal Justice petitioned by the Company.

Grupo TMM filed a motion for reconsideration against that rule, which will be submitted to have it studied and a final ruling handed down by the Supreme Court. Company Management estimates that a favorable ruling will be handed down on that matter.

h) Other legal proceedings

The Company is party to various other legal proceedings and administrative actions, all of which are of an ordinary or routine nature and incidental to its operations. Although it is impossible to predict the outcome of any legal proceeding, in the opinion of the Company’s management, such proceedings and actions should not, individually or in the aggregate, have a material adverse effect on the Company’s financial condition, results of operations or liquidity.

i) Operations with related parties

Under the Income Tax Law, companies that conduct operations with related parties, nationals or nonresidents, are subject to fiscal limitations and obligations regarding the determination of the prices negotiated, as these must be comparable to those that would be used with or between independent parties on similar operations.

In the event the tax authorities were to review the prices and reject the amounts determined, they may demand, in addition to the taxes and accessory charges corresponding (adjustments and surcharges), fines on omitted taxes, which could be for up to 100% of the adjusted tax amount.

The Company has significant transactions and relations with related parties, for which the Company holds documentation that confirms the terms of these transactions were conducted in 2014 similarly to transactions between unrelated parties. The Company and its subsidiaries are in the process of completing this study for 2015.

j) Other legislation

Grupo TMM and 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.

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31 Authorization of the consolidated financial statements

The accompanying consolidated financial statements were authorized and approved for issue by Board of Directors and the General Stockholders’ Meeting on April 26 and April 29, 2016, respectively.

Grupo TMM, S.A.B. and Subsidiaries

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

GRUPO TMM, S.A.B.
By:	/s/ Benjamin Ampudia Alvarez
	Benjamin Ampudia Alvarez
	Chief Financial Officer

Date: May 2, 2016