UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 20-F/A
 Amendment No. 1
(Mark One)
 
  ☐
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR


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

For the fiscal year ended December 31, 2022

OR


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

 ☐
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
Date of event requiring this shell company report ________________
 
For the transition period from _________to_____________
 
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)
 
Paseo de la Reforma No. 296, P.19.
Colonia Juárez,
06600 México City, Mexico
(Address of principal executive offices)
 
Luis Rodolfo Capitanachi Dagdug
(5255) 5629 8866
luis.capitanachi@tmm.com.mx
Paseo de la Reforma No. 296, P.19.
Colonia Juárez,
06600 México City, Mexico
 (Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
 
Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of each class
Trading Symbol(s)
Name of each exchange on which registered
None
N/A
N/A

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 ☑
 
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 ☑
 
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           No ☐
 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
 
☑ Yes           No ☐
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or an emerging growth company. 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 ☑
   
Emerging growth company ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
 
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).
 
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
 
U.S. GAAP ☐           International Financial Reporting Standards as issued by the International Accounting Standards Board   ☑    Other ☐
 
If  “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.
 
Item 17 ☐    Item 18 ☐
 
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
 
Yes ☐    No ☑
 
(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 ☐
 
Explanatory Note

This Amendment No. 1 on Form 20-F/A (this “Amendment”) amends the Annual Report on Form 20-F of Grupo TMM, S.A.B for the fiscal year ended December 31, 2022 as filed with the Securities and Exchange Commission (“SEC”) on May 16, 2023 (the “Form 20-F”). In the Form 20-F we inadvertently included a prior version of the signature block in the document titled “Report of Independent Registered Public Accounting Firm” (the “Audit Report”) under Item 18 in the report of Sallez, Sainz - Grant Thornton, S.C.. The Audit Report was signed by Sallez, Sainz - Grant Thornton, S.C. and delivered to us prior to the original filing of the Form 20-F, but the conformed signature line was inadvertently omitted from the version of the Audit Report included in the filing.
 
This Form 20-F/A is being filed solely to include the inadvertently omitted conformed signature of Sallez, Sainz - Grant Thornton, S.C. in the Audit Reports relating to the consolidated financial statements.  In order to comply with certain requirements of the SEC rules in connection with this filing, this Amendment includes Item 18. Financial Statements and Item 19. Exhibits. No other changes were made to the Audit Report or to the Form 20-F. The consolidated financial statements and notes to consolidated financial statements have remained the same as that previously filed in the Form 20-F.

This Amendment reflects information as of the filing date of the Form 20-F, does not reflect events occurring after that date and does not modify or update in any way disclosures made in the Form 20-F, except as specifically noted above.
 
In addition, pursuant to Rule 12b-15 under the Securities Exchange Act of 1934, as amended, the certifications pursuant to Section 302 and Section 906 of the Sarbanes-Oxley Act of 2002 have been re-executed as of the date of, and are re-filed as part of, this Amendment No. 1 as Exhibits 12.1, 12.2, 13.1 and 13.2. The only change in these certifications from the certifications of the Company’s principal executive officer and principal financial officer filed as exhibits to the Form 20-F is their date. In addition, the Company is also attaching as Exhibit 101 hereto the Interactive Data File disclosure furnished as Exhibit 101 to the Form 20-F. No changes have been made to the Interactive Data File disclosure furnished as Exhibit 101 to this Amendment from the Interactive Data File disclosure furnished as Exhibit 101 to the Form 20-F.


TABLE OF CONSENTS

    PAGE
ITEM 18.
 2
ITEM 19.
 4

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”).
 
The financial information included in this Annual Report was approved by the Company’s shareholders at the Annual General Shareholders’ Meeting, which took place on April 27, 2023.
 
Market and Industry Data
 
This Annual Report includes certain market and industry data and projections obtained from official government bodies, industry publications and surveys, public filings, and internal company sources. The third-party materials from which these data and projections were obtained generally state that the information included therein was collected from sources believed to be reliable, but we cannot provide any assurance as to the accuracy or completeness of such information, which we have not independently verified. While we are not aware of any misstatements regarding any market or industry data and projections presented in this Annual Report, such data and projections involve risks and uncertainties and are subject to change based on various factors, including those discussed in the section entitled “Risk Factors.”
 
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 Exchange Act. 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;
 

 •
uncertainties related to the ongoing conflict between Russia and Ukraine, including the extent and duration of shortages in the supply of key raw materials, commodities and products;
 

 •
conditions affecting the international shipping and transportation markets or the oil and gas industry;
 

 •
uncertainties concerning the continuing COVID-19 pandemic and related governmental responses;
 
1

 •
conditions resulting from future pandemics, epidemics or other outbreaks of infectious diseases and governmental responses thereto;
 

 •
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;
 

 •
the ability of the Company to diversify its customer base; 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 SEC and the Bolsa 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.
 

ITEM 18.
FINANCIAL STATEMENTS
 
The following financial statements are filed as part of this Annual Report on Form 20-F.

2
Contents
Page
Report of Independent Registered Public Accounting Firm (PCAOB Number 1245)
 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

3
ITEM 19.
EXHIBITS
 
Documents filed as exhibits to this Annual Report:
 
Exhibit
No.
Exhibit
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).
   
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).
   
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).
   
Description of securities registered under Section 12 of the Securities Exchange Act of 1934. (incorporated by reference to Exhibit 2.5 of Grupo TMM, S.A.B.’s Annual Report on Form 20-F for the year ended December 31, 2022, filed on May 16, 2023)
   
List of Main Subsidiaries. (incorporated by reference to Exhibit 8.1 of Grupo TMM, S.A.B.’s Annual Report on Form 20-F for the year ended December 31, 2022, filed on May 16, 2023)
   
Section 302 Certification of Chief Executive Officer.
   
Section 302 Certification of Chief Financial Officer.
   
Section 906 Certification of Chief Executive Officer.
   
Section 906 Certification of Chief Financial Officer.
   
Consent letter of Salles, Sainz - Grant Thornton, S.C.


*      Filed herewith.
**    This was a paper filing and is not available on the SEC website.

4
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/ Luis Rodolfo Capitanachi Dagdug
Luis Rodolfo Capitanachi Dagdug
   
Chief Financial Officer
   
    
Date: May 17, 2023
   

5
Consolidated Financial Statements and Report of Independent Registered Public Accounting Firm
 
Grupo TMM, S.A.B. and Subsidiaries
 
December 31, 2022, and 2021

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graphic
Salles, Sainz – Grant Thornton, S.C.
Periférico Sur 4348
Col. Jardines del Pedregal
04500, Mexico City
www.grantthornton.mx

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors of

Grupo TMM, S.A.B.:

Opinion on the Financial Statements
We have audited the accompanying consolidated statements of financial position of Grupo TMM, S.A.B. and subsidiaries (‘Grupo TMM’ or the ‘Company’) as of December 31, 2022 and 2021, the related consolidated statements of profit or loss, comprehensive income, changes in stockholders’ equity, and cash flows, for each of the three years in the period ended December 31, 2022 and the related notes (collectively referred to as the ‘financial statements’). In our opinion, the financial statements present fairly, in all material respects, the financial position of Grupo TMM as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022 in conformity with International Financial Reporting Standards (‘IFRS’) as issued by the International Accounting Standards Board.

Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (‘PCAOB’) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting 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.

2
graphic

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters
The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgements. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Going concern evaluation

As of December 31, 2022, Grupo TMM presents recurrent losses, which were duplicated in the period of the COVID-19 pandemic. Group Management currently continues to restructure its strategic business units, in order to generate profits and successfully improve its liquidity and leveraging indicators.

Based on evaluations carried out as mentioned in Note 1, Management determined that its consolidated financial statements as at December 31, 2022 have been prepared under the assumption that it operates on a going concern basis. Pursuant to the effects described in the above paragraph, the transportation profit (loss) of the last fiscal years and the accumulated deficit as at December 31, 2022, this going concern evaluation is considered a critical audit matter.

Our audit procedures, among other things, included the following, i) evaluate the historical and projected information on operating profit or loss financial structure, ii) analyze the business plan of the Company for the short, medium, and long-term, including the evaluation of the feasibility of its main projects, iii) analyze the main financial ratios, key indexes and indicators of the industry in which the Company operates and iv) reconcile the projected financial information with other elements of the consolidated financial statements, such as future cash flows used for the determination of the fair value of the ships and evaluation of impairment of long-lived assets.

We have served as the Company’s auditor since 2005.

/s/ Sallez Sainz - Grant Thornton, S.C.

Mexico City, Mexico
May 16, 2023
 
3
Grupo TMM, S.A.B. and Subsidiaries

Consolidated statements of financial position
As at December 31, 2022 and 2021
(Amounts in thousands of pesos, except number of shares)

   
2022
    
2021
  
Assets
            
Current
            
Cash and cash equivalents (Note 6)
  
$
94,733
    
$
39,567
  
Restricted cash (Note 6)
    
2,059
      
48,203
  
Trade receivables, net (Note 7)
    
471,514
      
401,087
  
Other accounts receivable (Note 8)
    
337,095
      
272,021
  
Related parties (Note 15)
    
39,468
      
65,057
  
Materials and supplies
    
51,261
      
62,534
  
Prepayments
    
3,142
      
6,649
  
Assets classified as held for sale (Note 9)
     272,500       455,157  
Total current assets
    
1,271,772
      
1,350,275
  
                 
Non-current
                
Other accounts receivable (Note 8)
    
273,314
      
280,000
  
Property, vessels and equipment, net (Note 9)
    
1,490,771
      
1,540,938
  
Right-of-use assets (Note 10)
    
268,938
      
337,232
  
Intangible assets (Note 12)
    
157,453
      
160,111
  
Concession rights, net (Note 11)
    
-
      
-
  
Other non-current assets
    
39,136
      
43,714
  
Total non-current assets
    
2,229,612
      
2,361,995
  
Total assets
  
$
3,501,384
    
$
3,712,270
  
                 
Liabilities
                
Short-term
                
Short-term portion of the financial debt (Note 14)
  
$
35,030
    
$
57,106
  
Short-term leases liabilities (Note 10)
    
68,929
      
121,378
  
Trade payables
    
437,382
      
437,005
  
Accounts payable and accrued expenses (Note 16)
    
503,874
      
470,068
  
Related parties (Note 15)
    
165,280
      
144,966
  
Total short-term liabilities
    
1,210,495
      
1,230,523
  
                 
Long-term
                
Long-term portion of the financial debt (Note 14)
    
32,475
      
65,601
  
Long-term lease liabilities (Note 10)
    
218,146
      
288,497
  
Accounts payable
    
-
      
-
  
Employee benefits (Note 23)
    
84,652
      
102,375
  
Deferred income tax (Note 21)
    
154,592
      
206,176
  
Total long-term liabilities
    
489,865
      
662,649
  
Total liabilities
    
1,700,360
      
1,893,172
  
                 
Stockholders’ equity (Note 17):
                
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
)
Accumulated losses
    
(1,131,283
)
    
(1,165,223
)
Other components of equity
    
729,092
      
778,468
  
Controlling interest
    
1,767,737
      
1,783,173
  
Non-controlling interest
    
33,287
      
35,925
  
Total stockholders’ equity
    
1,801,024
      
1,819,098
  
Total liabilities and stockholders’ equity
  
$
3,501,384
    
$
3,712,270
  

The attached notes are part of these consolidated statements.

4
Grupo TMM, S.A.B. and Subsidiaries

Consolidated statements of profit or loss
For the years ended December 31, 2022, 2021 and 2020
(Amounts in thousands of pesos, except per share amounts and number of shares)

    2022
     2021
    
2020
  
                   
Revenue from transportation (Note 18)
  
$
1,683,056
    
$
1,351,713
    
$
1,203,281
  
                         
Costs and expenses:
                        
Salaries, wages and employee benefits (Note 23)
    
285,316
      
253,135
      
341,399
  
Leases (Note 10)
    
700,449
      
565,371
      
312,463
  
Contracted services
    
345,215
      
292,423
      
293,543
  
Fuel, materials and supplies
    
194,029
      
147,461
      
170,753
  
Depreciation, amortization and loss from revaluation
    
99,519
      
117,202
      
141,051
  
Other costs and expenses
    
15,639
      
16,842
      
15,635
  
     
1,640,167
      
1,392,434
      
1,274,844
  
Transportation profit (loss)
    
42,889
      
(40,721
)
    
(71,563
)
                         
Other expenses (Note 19)
    
(10,378
)
    
(169,343
)
    
(257,225
)
Operating profit (loss)
    
32,511
      
(210,064
)
    
(328,788
)
                         
Comprehensive financing cost:
                        
Interest income
    
533
      
266
      
7,097
  
Interest expense and other financial costs (Note 20)
    
(61,563
)
    
(62,576
)
    
(75,654
)
Exchange (loss) gain, net
    
(169
)
    
3,177
      
(25,145
)
     
(61,199
)
    
(59,133
)
    
(93,702
)
Loss before taxes
    
(28,688
)
    
(269,197
)
    
(422,490
)
                         
Income tax benefit (Note 21)
    
29,591
      
21,143
      
19,334
  
Net profit (loss) for the year
  
$
903
    
$
(248,054
)
  
$
(403,156
)
                         
Attributable to:
                        
Non-controlling interest
    
(2,638
)
    
(5,482
)
    
(5,025
)
Controlling interest
    
3,541
      
(242,572
)
    
(398,131
)
   
$
903
    
$
(248,054
)
  
$
(403,156
)
                         
Earning per share for the year (Note 24)
                        
Profit  (loss) per share for the year
  
$
0.035
    
$
(2.374
)
  
$
(3.896
)
                         
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.

5
Grupo TMM, S.A.B. and Subsidiaries

Consolidated statements of comprehensive income
For the years ended December 31, 2022, 2021 and 2020
(Amounts in thousands of pesos)

    2022    
2021
    
2020
  
                   
Net profit (loss) for the year
  
$
903
    
$
(248,054
)
  
$
(403,156
)
                         
Other comprehensive income:
                        
Items that will not be subsequently reclassified to profit or loss
                        
Actuarial gains, net (Note 23)
    
31,121
      
33,691
      
10,953
  
Revaluation surplus (Note 25)
    
(58,231
)
    
(291,200
)
    
314,436
  
Income tax on other comprehensive income
    
8,133
      
77,253
      
(97,617
)
Total of other comprehensive loss for the year
    
(18,977
)
    
(180,256
)
    
227,772
  
Comprehensive loss for the year
  
$
(18,074
)
  
$
(428,310
)
  
$
(175,384
)
                         
Attributable to:
                        
Non-controlling interest
    
(2,638
)
    
(5,482
)
    
(5,025
)
Controlling interest
    
(15,436
)
    
(422,828
)
    
(170,359
)
   
$
(18,074
)
  
$
(428,310
)
  
$
(175,384
)

The attached notes are part of these consolidated statements.

6
Grupo TMM, S.A.B. and Subsidiaries

Consolidated statements of changes in stockholders’ equity
For the years ended December 31, 2022, 2021 and 2020
(Amounts in thousands of pesos, except number of shares)

                                                 
   
Number of
                       Other           Non     Total  
    outstanding     Share     Treasury     Accumulated     components           controlling     stockholders’  

 
common shares
    
capital
    
shares
    
losses
    
of equity
    
Subtotal
    
interest
    
equity
  
                                                 
Balances as at December 31, 2019
    
102,182,841
    
$
2,216,733
    
$
(46,805
)
  
$
(565,526
)
  
$
771,958
    
$
2,376,360
    
$
46,432
    
$
2,422,792
  
                                                                 
Net loss for the year
    
-
      
-
      
-
      
(398,131
)
    
-
      
(398,131
)
    
(5,025
)
    
(403,156
)
Other comprehensive income
    
-
      
-
      
-
      
55
      
227,717
      
227,772
      
-
      
227,772
  
Comprehensive income for the year
                                            
(170,359
)
    
(5,025
)
    
(175,384
)
Balances as at December 31, 2020
    
102,182,841
      
2,216,733
      
(46,805
)
    
(963,602
)
    
999,675
      
2,206,001
      
41,407
      
2,247,408
  
                                                                 
Net loss for the year
    
-
      
-
      
-
      
(242,572
)
    
-
      
(242,572
)
    
(5,482
)
    
(248,054
)
Other comprehensive income
    
-
      
-
      
-
      
40,951
      
(221,207
)
    
(180,256
)
    
-
      
(180,256
)
Comprehensive loss for the year
                                            
(422,828
)
    
(5,482
)
    
(428,310
)
Balances as at December 31, 2021
    
102,182,841
      
2,216,733
      
(46,805
)
    
(1,165,223
)
    
778,468
      
1,783,173
      
35,925
      
1,819,098
  
                                                                 
Net income for the year
    
-
      
-
      
-
      
3,541
      
-
      
3,541
      
(2,638
)
    
903
  
Other comprehensive loss
    
-
      
-
      
-
      
30,399
      
(49,376
)
    
(18,977
)
    
-
      
(18,977
)
Comprehensive loss for the year
                                            
(15,436
)
    
(2,638
)
    
(18,074
)
Balances as at December 31, 2022
    
102,182,841
    
$
2,216,733
    
$
(46,805
)
  
$
(1,131,283
)
  
$
729,092
    
$
1,767,737
    
$
33,287
    
$
1,801,024
  

The attached notes are part of these consolidated statements.

7
Grupo TMM, S.A.B. and Subsidiaries

Consolidated statements of cash flow
For the years ended December 31, 2022, 2021 and 2020
(Amounts in thousands of pesos)

   
2022
    
2021
     2020
  
                   
Cash flows from operating activities:
                  
                   
Loss before taxes
  
$
(28,688
)
  
$
(269,197
)
  
$
(422,490
)
Adjustments to reconcile the profit with cash used in
                        
operating activities:
                       
Depreciation, amortization and loss from revaluation
    
99,519
      
117,202
      
141,051
  
Impairment loss for the period
     7,277       199       20,140  
Loss (gain) from the disposal of property, vessels and equipment, net
    
57,804
      
132,956
      
(153
)
Interest expense
     55,891       59,164       72,093  
Interest income
    
(533
)
    
(266
)
    
(7,097
)
Exchange loss (gain), net
    
1,479
      
4,531
      
43,873
  
Gain from the sale of subsidiaries
    
-
      
-
      
(451
)
                         
Changes in assets and liabilities:
                        
Accounts receivable
    
(45,804
)
    
(256,724
)
    
(80,333
)
Other accounts receivable and related parties
    
(19,171
)
    
60,081
      
162,437
  
Materials and supplies
    
11,273
      
(8,681
)
    
7,111
  
Prepayments
    
3,507
      
25,816
      
(9,769
)
Other accounts payable and accrued expenses
    
34,183
      
129,454
      
(145,729
)
Other non-current assets
    
7,698
      
(21,550
)
    
4,702
  
Employee benefits
    
(17,723
)
    
(51,108
)
    
2,002
  
Total adjustments
    
195,400
      
191,074
      
209,877
  
Cash used in operating activities
    
166,712
      
(78,123
)
    
(212,613
)
                         
Cash from investment activities
                        
Proceeds from sale of property, vessels and equipment
    
8,853
      
96,736
      
614
  
Acquisition of property, vessels and equipment
    
(25,231
)
    
(75,468
)
    
(28,375
)
Sale of subsidiaries, net
    
-
      
-
      
33,985
  
Interest received
    
533
      
266
      
7,097
  
Cash from investment activities
    
(15,845
)
    
21,534
      
13,321
  
                         
Cash flow from financing activities
                        
Proceeds from debt
    
4,300
      
46,133
      
31,419
  
Proceeds from debt related parties
     3,550       46,215       -  
Repayment of debt
    
(35,504
)
    
(29,781
)
    
(123,703
)
Repayment of leases
    
(97,807
)
    
(52,250
)
    
(90,432
)
Interest paid
    
(8,571
)
    
(9,487
)
    
(22,712
)
Cash from (used in) financing activities
    
(134,032
)
    
830
      
(205,428
)
                         
Restricted cash release
     46,144       -       -  
Exchange effect on cash
    
(7,813
)
    
(9,984
)
    
33,316
  
(Decrease) increase in cash and cash equivalents
    
55,166
      
(65,743
)
    
(371,404
)
Cash and cash equivalents, beginning of year
    
39,567
      
105,310
      
476,714
  
Cash and cash equivalents, end of year
  
$
94,733
    
$
39,567
    
$
105,310
  
                         
Supplementary information:
                        
Income tax paid
  
$
3,173
    
$
3,104
    
$
10,873
  

The attached notes are part of these consolidated statements.

8
Grupo TMM, S.A.B. and Subsidiaries

Notes to the consolidated financial statements
December 31, 2022 and 2021
(Amounts in thousands of pesos, except number of shares and where otherwise indicated)
 
1
Nature of operations

Principal activity
 
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.
 
The Company’s activities are grouped into the following service divisions:
 

 •
Maritime: includes specialized offshore shipping services, clean oil, and chemical products shipping, bulk carrier, shipping agency services and other activities related to the maritime transportation business.
 

 •
Maritime infrastructure: correspond to revenues for minor and major repairs and maintenance to ships made at the facilities of the Company (shipyard).
 

 •
Logistics, ports and terminals: includes the operations of logistics solutions services and container and railcar maintenance and repair services, inland and seaport terminal services.
 

 •
Warehousing: includes bonded warehouse operations and management.
 
COVID-19 Impact and business strategy

On March 11, 2020, the WHO declared COVID-19 to be a pandemic. In response, the governments throughout all the world, including Mexico, have implemented various extraordinary measures to control its spread, including travel restrictions, quarantines, and the suspension of all non-essential activities.

On May 5, 2023, the WHO officially declared the end of the COVID-19 pandemic in the world. By the same token, the government of Mexico announced that the country is closing the epidemic cycle and is moving toward an endemic.

9
Our main challenge and concern was the relationship with customers. The decrease in sales was due to the suspension of its activities, cancellation of purchase orders or projects and/or the changes in its priorities.

Likewise, events such as closing borders and accesses, delayed deliveries, renegotiating payments to suppliers, requests for extensions of our credits, supply limitations, the high demand for essential activities with a reduced workforce, insufficient capacity to satisfy the supply chain, as well as delayed deliveries were among the main issues that we had to deal with throughout the COVID-19 pandemic crisis.

Another no less significant matter is preserving the well-being of collaborators. In this respect, the Company adapted an operating scheme to face the crisis that prevails to date. Today, all operational activities are face-to-face and only administrative activities operate under a hybrid home office / face-to-face scheme.

For fiscal year 2022, the Group’s revenues, particularly in the Ports and Terminals service line, as well as in the maritime agency business, continue to be partially reduced due to the COVID-19 pandemic and the various emergency public health measures enacted. by governments to combat it. Although the Company expects its revenues to improve as the extraordinary measures of the government are lifted and the public health emergency restrictions are removed, as of the date of these consolidated financial statements, the Company cannot quantify the adverse effect that COVID-19 will have on its operating profit for fiscal 2023.
In view of the foregoing and other conditions beyond the control of the Group, operating profit can be volatile and subject to change rapidly as the situation of COVID-19 develops. Consequently, the Company has taken various measures to maintain business continuity and strengthen its financial position, which are detailed below. In the future, the Company will continue to supervise the development of the COVID-19 pandemic closely, including its effect on the businesses, financial conditions, and operating profit of the Company.
 
As part of our effort to mitigate the effects of the Pandemic, we have carried out the following:
 

 •
In 2020, the Company decided to change its corporate offices, which will generate significant savings in corporate costs. The Company continues to comply with the health and safety protocols established by the Mexican government, and it has taken measures and implemented policies to safeguard the threats posed by the COVID-19 pandemic, its businesses, employees, and locations in which it operates.
 

 •
The Company has adopted the hybrid working model by maintaining limited access to facilities and implementing new controls for emergency procedures and mitigating potential cybersecurity risks.
 

 •
The Company continues a strategic plan to offset part of the instability in the oil industry and the COVID-19 pandemic, which includes the following actions: (i) reduction of costs and general and administrative expenses; (ii) maintenance of the early collection program (the “supply chain program”) through Nacional Financiera, SNC, by reducing liquidity risk and the effect of delays in the payments that can result from recent changes in the payment policies of PEMEX; and (iii) customer diversification; and (iv) negotiation of deferment and extension of the due date of certain financial commitments.
 
10

•
The Company is implementing actions to help guarantee that financial and audit reporting processes continue to be sound, and as timely as possible in the middle of the global crisis of the COVID-19 pandemic. These actions include, among other things; (i) the implementation of new controls for emergency procedures; (ii) close monitoring of IT access controls to enable remote work to be performed; (iii) controls for mitigating the possible increase in cyber risks arising from a higher level of remote work; (iv) where it is not possible to conduct face-to-face controls, identify, and implement alternative controls appropriately designed to offset the lack of information. In addition, the Group is implementing an alternative audit plan to test the operating effectiveness of controls remotely, due to travel restrictions.

The business strategy of the Group posed since the outbreak of COVID-19 for the purpose of, among other things, mitigating the effects of the Pandemic, is centered primarily on the following:
 

 •
Strengthen businesses related to the Maritime Sector by adding more vessels specialized in our Offshore operations services, as well as increasing the customer base in chemical tankers and maritime agency.


•
Increase the installed capacity in our maritime infrastructure operations (shipyard in Tampico) to have a new floating dock beginning 2024.


•
Maintaining efficient, profitable operations at Ports and Terminals, Logistics, and Storage.


•
Diversification and expansion of services through strategic alliances or associations with which the markets in which we participate are also developed.


•
Business development with assets strategically located in Tuxpan, Veracruz, and the investment opportunities existing in the oil and gas storage sector, as general freight for developing liquid and multiple use terminals, such as lubricants, fertilizers, and grains, conditioned with modern equipment for handling and storing highest quality, fast and safe merchandise.


•
Disciplined, ongoing control of expenses, as well as optimizing the size of personnel in accordance with the implementation of the plans  described above that, overall, allow for the financial strengthening and implementation of its short and medium-term projects.

Labor reform on holidays

On December 27, 2022, the Decree reforming articles 76 and 78 of the Federal Labor Law regarding vacations was published in the Official Gazette of the Federation, which is effective on January 1, 2023. The main change derived from this reform is to extend the vacation periods for employees by increasing the minimum period by 6 additional days, and to adjust the mechanics of subsequent annual increases.

The effect of the aforementioned modification was not significant for the financial position and results of the Company.

11
Structure of Grupo TMM
 
At December 31, 2022 and 2021, Grupo TMM holds the percentage of equity interest in various subsidiaries, the most significant are as follows:
 
   
% of ownership
  
   
2022
    
2021
  
Maritime
            
Transportación Marítima Mexicana, S.A. de C.V.
    
100
%
    
100
%
TMM Parcel Tankers, S.A. de C.V.
    
100
%
    
100
%
Administradora Marítima TMM, S.A.P.I. de C.V.
     100 %     100 %
                 
Maritime Infrastructure
                
Inmobiliaria Dos Naciones, S. de R.L. de C.V.
     100 %     100 %
                 
Warehousing
                
Almacenadora de Depósito Moderno, S.A. de C.V. (Warehouse)
    
100
%
    
100
%
TMM Almacenadora, S.A.P.I. de C.V.
    
100
%
    
100
%
                 
Ports, terminals and logistics
                
TMM Logistics, S.A. de C.V.
    
100
%
    
100
%
Autotransportación y Distribución Logística, S.A. de C.V.
     100 %     100 %
Prestadora de Servicios MTR, S.A. de C.V.
    
100
%
    
100
%
Bimonte, S.A. de C.V.
    
100
%
    
100
%
Caoba Energía, S. de R.L. de C.V.
    
100
%
    
100
%
Services & Solutions Optimus, S. de R.L de C.V.
    
100
%
    
100
%
Servicios Administrativos API Acapulco, S.A. de C.V.
    
51
%
    
51
%
Administración Portuaria Integral de Acapulco, S.A. de C.V.
    
51
%
    
51
%
                 
Payroll outsourcing
                
Mexschiff Operación de Personal, S.A.P.I. de C.V.
    
100
%
    
100
%
Omexmar Operadora Mexicana Marítima, S.A.P.I. de C.V.
    
100
%
    
100
%
Perhafen Services Marítimos, S.A.P.I. de C.V.
    
100
%
    
100
%
TMM Dirección Corporativa, S.A.P.I. de C.V.
    
100
%
    
100
%
Perjomar Operadora, S.A.P.I. de C.V.
    
100
%
    
100
%
                 
Property leasing
                
Inmobiliaria TMM, S.A. de C.V.
    
100
%
    
100
%
 
The Company’s subsidiaries are incorporated in Mexico, where most of their activities take place.

Non-controlling interest in subsidiaries
 
Grupo TMM holds an equity interest in the subsidiaries Administración Portuaria Integral de Acapulco, S.A. de C.V. and Servicios Administrativos API Acapulco, S.A. de C.V., for which there is non-controlling interest; the associated effect on the Company’s consolidated financial statements is considered immaterial. These companies are established and conduct their activities in Mexico. As of July 2021, these companies ceased operations (see Notes 11a).

12
Investments in associates
 
The Company maintains investments in the following associates:
 

 (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 of the issue date of the consolidated financial statements, Company Management decided to reserve the investment in its entirety.
 

 (b)
The Company lost control of its subsidiary TMM División Marítima, S.A. de C.V. (TMM DM) in 2017, retaining 15% equity in its capital without exerting significant influence. Accordingly, this investment has been classified as an investment in associate. As of December 31, 2022, and 2021, the value of this investment is nil, since the stockholders’ equity of TMM DM is negative. Moreover, in accordance with the statutes of TMM DM, the stockholders only assume obligation in connection with their equity up to the amount thereof.
 
2
General information and statement of compliance with IFRS
 
Grupo TMM’s head office is located at Paseo de la Reforma N° 296 piso 19, Colonia Juárez, Alcaldía Cuauhtémoc, C.P. 06600, Mexico City. In addition, a significant portion of its maritime division activities is conducted at Calle 55 N° 2 Col. Electricistas C.P. 24120 Cd. del Carmen, Campeche.
 
Grupo TMM’s shares are listed on the Mexican Stock Exchange, where they trade under the symbol TMM A.  In the United States, Grupo TMM’s shares trade on the “Over-the-Counter” (‘OTC’) market in the form of American Depositary Shares (‘ADSs’) under the symbol GTMAY.
 
Grupo TMM and its subsidiaries prepare their consolidated financial statements in accordance with International Financial Reporting Standards (‘IFRS’), as issued by the International Accounting Standards Board (‘IASB’), and these are presented in thousands of Mexican pesos. Moreover, they have been prepared under the assumption that the Group operates on a going concern basis, which assumes that the Group may liquidate its liabilities on the dates they become due and payable. To confirm the validity of the use of the going concern assumption, the Company has considered the following specific factors.

Taking into account that the performance of fiscal 2022 was positive, the strategy of the Group will be focused on:


 •
Strengthening businesses related to the Maritime Sector by adding more vessels specialized in Offshore operations services, as well as increasing the customer base in chemical tankers and maritime agency. Toward the end of the third quarter of 2023, 2 ships known as “mud boats” are planned to be incorporated that will mainly provide generation, conditioning, recovery, and transportation of perforation fluids services, which are used during perforation, repair, and oil well termination operations, which significantly support the crude production activity.


•
Increasing the installed capacity in maritime infrastructure operations (shipyard in Tampico) to have a new floating dock beginning the second quarter of 2023, which will enable the Company to integrate up to 945 of the potential offshore vessels that operate in the Gulf of Mexico. The Company plans to have an additional dock with greater capacity in the medium-term that will also allow for building naval artifacts.

13

•
Maintaining efficient, profitable operations at Ports and Terminals, Logistics, and Storage.


•
Diversifying and expanding services through strategic alliances or associations with which the markets in which we participate are also developed.


•
Business development with assets strategically located in Tuxpan, Veracruz, and the investment opportunities existing in the oil and gas storage sector, as general freight for developing liquid and multiple use terminals, such as lubricants, fertilizers, and grains, conditioned with modern equipment for handling and storing highest quality, fast and safe merchandise.


•
Disciplined, ongoing control of expenses, as well as optimizing the size of personnel in accordance with the implementation of the plans described above that, overall, allow for financially strengthening and implementing its short and medium-term projects.

Based on these factors, Management reasonably expects that the Group has and will have appropriate resources to continue with its operating existence in the foreseeable future.

The Company has decided to present in its consolidated statements of income a subtotal of ‘Operating income’ which reconciles with the ‘Net profit for the year’ considering the items of ‘Comprehensive financing cost’ and ‘Income tax expense’; with regard to the subtotal of ‘Transportation loss’, the latter reconciles with the ‘Operating income’ considering the item ‘Other (expenses) income’.
 
3
Changes in accounting policies
 
New Standards adopted as of January 1, 2022
 
Some accounting pronouncements which have become effective from 1 January 2022 and have therefore been adopted do not have a significant impact on the Company’s financial results or position.
 
Other Standards and amendments that are effective for the first time in 2022 and could be applicable to the Company are:
 

 •
Reference to the Conceptual Framework (Amendments to IFRS 3)
 

 •
COVID-19 – Related Rent Concessions beyond 30 June 2021 (Amendments to IFRS 16)
 

 •
Property, Plant and Equipment: Proceeds Before Intended Use (Amendments to IAS 16)


•
Onerous Contracts – Cost of Fulfilling a Contract (Amendments to IAS 37)


•
Annual Improvements (2018-2020 Cycle):

These amendments do not have a significant impact on these financial statements and therefore the disclosures have not been made.

Standards, amendments and Interpretations to existing Standards that are not yet effective and have not been adopted early by the Company
 
At the date of authorization of these consolidated financial statements, several new, but not yet effective Standards, amendments to existing Standards, and Interpretations have been published by the IASB, none of which have been adopted in advance by Grupo TMM.

14
Other new standards and amendments that are not yet effective and have not been adopted early by the Company include:


 •
IFRS 17 ‘Insurance Contracts’


•
Amendments to IFRS 17 ‘Insurance Contracts’ (Amendments to IFRS 17 and IFRS 4)


•
Classification of Liabilities as Current or Non-current (Amendments to IAS 1)
 

 •
Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2)


•
Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction (Amendments to IAS 12)


•
Disclosure of Accounting Policies (Amendments to IAS 1)
 

 •
Definition of Accounting Estimates (Amendments to IAS 8)
 
These amendments are not expected to have a significant impact on the financial statements in the period of initial application and therefore the disclosures have not been made.
 
Management anticipates that all relevant pronouncements will be adopted for the first period beginning on or after the effective date of the pronouncement. New Standards, amendments and Interpretations not adopted in the current year have been disclosed as they are not expected to have a material impact on the Company’s consolidated financial statements.
 
4
Summary of significant accounting policies
 
The most significant accounting policies are summarized as follows:
 
4.1
Basis of preparation
 
The Company’s financial statements have been prepared on an accrual basis and under the historical cost convention except for the revaluation of properties. Monetary amounts are expressed in Mexican pesos and are rounded to the nearest thousands, except for earnings per share.
4.2
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 Company are eliminated in the consolidation and the asset involved is also reviewed 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.

15
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 and joint ventures
 
Associates are all entities over which Grupo TMM has significant influence but not control. A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement having rights to the net assets of the arrangement.
 
Investments in associates and joint ventures are accounted by the equity method and are initially recognized at their acquisition cost.
 
The carrying amount of investments in associates and joint ventures is increased or decreased to recognize Grupo TMM’s share of the profit or loss and other comprehensive income of the associate and joint venture, adjusted where necessary to ensure consistency with the accounting policies of the Company.
 
Unrealized gains on transactions between Grupo TMM and its associates and joint ventures are eliminated to the extent of the Company’s interest on those entities. When unrealized losses are eliminated, the asset involved is also tested for impairment.
4.3
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.
 
Goodwill is stated after the individual recognition of identifiable intangible assets. It is calculated as the excess of 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 acquire, over the acquisition-date the fair values of the identifiable net assets. If the fair values of 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.
16
4.4
Foreign currency translation
 
Functional and presentation currency
 
The consolidated financial statements are reported in Mexican pesos, which is also the functional currency of Grupo TMM.
 
Foreign currency balances and transactions
 
Foreign currency transactions are translated into the functional currency of the respective Company 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.
 
4.5
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.
 
4.6
Materials and supplies
 
Materials and supplies, consisting mainly of fuel and items for the maintenance of property, vessels and equipment, are valued at average cost and acquisition value.
4.7
Prepayments
 
Represent prepayments for services that will be received in the future and are amortized in the period when said services are received.
 
4.8
Property, vessels and equipment
 
Properties and vessels
 
The properties (land and buildings) are measured at fair value, which are determined by external professional valuers every four years or before if the market factors indicate a significant change in the fair value. The last valuation of these assets was in December 2019.
Until December 31, 2021, the vessels are measured at fair value, the revalued amounts were determined using the revenue technique (expected future cash flows). The frequency of the revaluations 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 revalued this class of assets through December 31, 2020. At the end of 2022 and 2021 the Company no longer owns these vessels (see Note 9).

17
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 to 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’ equity 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’ equity 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’ equity 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’ equity 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.
 
Equipment
 
Equipment is 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 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, vessels 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 (expenses) income’, accordingly (see Note 19).
 
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.

18
4.9
Leased assets
 
The Company as lessee
 
The Company makes the use of leasing arrangements principally of warehouse, courtyards, corporate building and cranes. The rental contracts for facilities are typically negotiated for terms of between 1 and 10 years and some of these have extension terms. Lease terms for cranes have lease terms of between 1 and 2 years without any extension terms. The Company does not enter into sale and leaseback arrangements. All the leases are negotiated on an individual basis and contain a wide variety of different terms and conditions.
 
The Company assesses whether a contract is or contains a lease at inception of the contract. A lease conveys the right to direct the use and obtain substantially all of the economic benefits of an identified asset for a period of time in exchange for consideration.
 
Some lease contracts contain both lease and non-lease components. These non-lease components are usually associated with facilities management services. The Company has elected to separate their lease and non-lease components based on their relative stand-alone prices.
 
Measurement and recognition of leases as a lessee
 
At lease commencement date, the Company recognizes a right-of-use asset and a lease liability in its consolidated statement of financial position. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability.
 
The Company depreciates the right-of-use asset on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The Company also assesses the right-of-use asset for impairment when such indicators exist.
 
At the commencement date, the Company measures the lease liability at the present value of the lease payments unpaid at that date, discounted using the Company’s incremental borrowing rate on the date of the revaluation when the implicit lease rate cannot be easily determined.

Lease payments included in the measurement of the lease liability are made up of fixed payments and variable payments based on an index or rate.
 
Subsequent to initial measurement, the liability will be reduced by lease payments that are allocated between repayments of principal and finance costs. The finance cost is the amount that produces a constant periodic rate of interest on the remaining balance of the lease liability.
 
The lease liability is reassessed when there is a change in the lease payments. Changes in lease payments arising from a change in the lease term. The revised lease payments are discounted using the Company’s incremental borrowing rate at the date of reassessment when the rate implicit in the lease cannot be readily determined. The amount of the remeasurement of the lease liability is reflected as an adjustment to the carrying amount of the right-of-use asset.
Payments under leases can also change when change through an index or a rate used to determine those payments. The lease liability is remeasured only when the adjustment to lease payments takes effect and the revised contractual payments for the remainder of the lease term are discounted using an unchanged discount rate.

19
The remeasurement of the lease liability is dealt with by a reduction in the carrying amount of the right-of-use asset to reflect the full or partial termination of the lease for lease modifications that reduce the scope of the lease. Any gain or loss relating to the partial or full termination of the lease is recognized in profit or loss. The right-of-use asset is adjusted for all other lease modifications.
 
The Company has elected to account for short-term leases and leases of low-value assets using the practical expedients. Instead of recognizing a right-of-use asset and lease liability, the payments in relation to these are recognized as an expense in profit or loss on a straight-line basis over the lease term.
 
The Company as lessor
 
As a lessor the Company classifies its leases as either operating or finance leases.
 
A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of the underlying asset and classified as an operating lease if it does not.
 
4.10
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 in 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 at 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 13.

The amortization is included in the consolidated statement of operations as part of the depreciation, amortization, and loss on revaluation item. Subsequent expenditures to preserve software and trademarks are expensed as incurred.

20
4.11
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.
 
Trademark 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.
 
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 the 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.
 
4.12
Non-current assets classified as held for sale

Non-current assets classified as held for sale are presented separately and measured at the lower of their carrying amounts immediately prior to their classification as held for sale and their fair value less costs to sell. Once classified as held for sale, the assets are not subject to depreciation or amortisation.
4.13
Financial instruments
 
Recognition and derecognition
 
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 flow 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, canceled, or expired.
 
21
Classification and initial measurement of financial assets
 
Except for those trade receivables that do not contain a significant financing component and are measured at the transaction price in accordance with IFRS 15, all financial assets are initially measured at fair value, adjusted by transaction costs (where applicable).
 
Financial assets are classified into the following categories:
 

 		●
amortized cost
 

 		●
fair value through profit or loss (FVTPL)
 

 		●
fair value through other comprehensive income (FVOCI).
 
In the periods presented the Company does not have any financial assets categorized as FVTPL or FVOCI.
 
The classification is determined by both:
 

 		●
the Company’s business model for managing the financial asset; and
 

 		●
the contractual cash flow characteristics of the financial asset.
 
All income and expenses relating to financial assets that are recognized in profit or loss are presented within financial costs and income; except for impairment of trade receivables which is presented in the heading of ‘Other costs and expenses’.
 
Subsequent measurement of financial assets
 
Financial assets at amortized cost
 
Financial assets are measured at amortized cost if the assets meet the following conditions:
 

 		●
they are held within a business model whose objective is to hold the financial assets and collect its contractual cash flows; and
 

 		●
the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding.

After initial recognition, these are measured at amortized cost using the effective interest method. The financial assets of the Company are not discounted since it is not material. The Company’s cash and cash equivalents, trade receivables and part of the other accounts receivable fall into this category of financial instruments.
22
Impairment of financial assets
 
IFRS 9’s impairment requirements use more forward-looking information to recognize expected credit losses – the ‘expected credit loss (ECL) model’. Instruments within the scope of the new requirements included mainly trade receivables, contract assets recognized and measured under IFRS 15, other accounts receivables and accounts receivable from related parties.
 
Recognition of credit losses considers a broader range of information when assessing credit risk and measuring expected credit losses, including past events, current conditions, reasonable and supportable forecasts that affect the expected collectability of the future cash flows of the instrument.
 
Grupo TMM makes use of a simplified approach in accounting for trade and other accounts receivables as well as contract assets and records the loss allowance as lifetime expected credit losses. These are the expected shortfalls in contractual cash flows, considering the potential for default at any point during the life of the financial instrument. In calculating, the Company uses its historical experience, external indicators and forward-looking information to calculate the expected credit losses.
 
The Company assess impairment of trade receivables based on the characteristics of the business segment, when appropriate this assessment is made on a collective basis as they possess shared credit risk characteristics, they have been grouped based on the days past due. Refer to Note 26, for a detailed analysis of how the impairment requirements of IFRS 9 are applied.
 
Classification and measurement of financial liabilities
 
The Company’s financial liabilities include borrowings, trade and other payables. Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs. Subsequently, financial liabilities are measured at amortized cost using the effective interest method.
 
All interest-related charges are included within finance costs or finance income.
 
4.14
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 the Company 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. Provisions are discounted at their present value, where the time value of money is material.
All provisions are reviewed on the issuance of the financial statements and adjusted to reflect the current best estimate. When an outflow of economic resources for present obligations is not probable, this is not recognized as a liability, unless it was assumed in the course of a business combination. Such cases are disclosed as contingent liabilities unless the outflow of resources is remote.
 
Possible inflows of the Company’s economic benefits, which do not yet meet the criteria for recognition of an asset, are considered as contingent assets.
23
4.15
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 21).
 
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.
 
Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.
 
4.16
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.
 
4.17
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 23).

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 23).
 
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.
24
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 rates, 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 of 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.
 
4.18
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 the profit (loss) for the year and previous periods.
 
Other components of equity capital include:
 

 		●
revaluation surplus, including gains and losses from the revaluation of vessels and properties;
 

 		●
statutory reserve corresponds to the separation of earnings withheld for this reserve;


●
additional paid-in capital is equivalent to the amount received in excess of the par value of the shares;
 

 		●
translation result represents the cumulative effect of the change in functional currency in previous years; and
 

 		●
actuarial gains and losses include experience adjustments (the effects of differences between the previous actuarial assumptions and what has actually occurred); and the effects of changes in actuarial assumptions.

25
4.19
Recognition of revenue, costs and expenses, and financing costs
 
Revenues
 
Company’s revenue arises mainly from services of maritime transportation, logistics and warehousing. To determine whether to recognize revenue, the Company follows a 5-step process:
 

 		1.
Identifying the contract with a customer
 

 		2.
Identifying the performance obligations
 

 		3.
Determining the transaction price
 

 		4.
Allocating the transaction price to the performance obligations
 

 		5.
Recognizing revenue when/as performance obligation(s) are satisfied.
 
The Company does not carry out transactions that involve different contracts and on which their characteristics must be combined in accordance with IFRS. Moreover, transactions are not usually carried out that involve different services as part of the same contract; therefore, the total price of the transaction for a contract in all cases is allocated to a single performance obligation, based on their relative independent sales prices. The transaction price for contracts does not consider variable payments, except for certain service payments that are not considered significant in connection with the total revenues of the Company, nor are payments in kind, nor amounts collected on behalf of third parties and nor contemplate a financing component.
 
All revenues are recognized over time, as the Company meets performance obligations by transferring the services promised to its customers.
 
When the Company meets a performance obligation before receiving the payment, the Company already recognizes either a contract asset or a receivable in its consolidated statement of financial position, depending upon if something else is required than only passage of time before the consideration becomes due. The Company generally does not receive payments in advance in connection with performance obligations; therefore, contractual liabilities are not required to be recognized.
 
In obtaining these contracts, the Company incurs immaterial incremental costs. Since the amortization period of these costs would be less than one year, if capitalized, and also that those costs are immaterial, the Company makes use of the practical expedient in IFRS 15.94 and expenses them as they incur.

Offshore vessels and “loderos”

 

These revenues derive from the transport of materials, personnel, equipment and spare parts, positioning and handling of anchors of marine platforms and barges, support for inspection and underwater exploration with specialized vessels, protection services provided with ships against fire, and administration and operation of ships to third parties, as well as offshore and in-port fluid processing services, through Grupo TMM or third-party vessels, usually in periods of 1 year for ‘time charter’ contracts and 1 to 30 days, under the ‘SPOT’ mode, the rate is fixed and is established at the beginning of the contract based on market prices.

 

The performance obligation is satisfied when the offshore services are provided and received by the customers, the revenues are recognized over time on a straight-line basis over the term of each contract. Since the costs required to provide service under these contracts do not vary significantly, such method best depicts the transfer of services.

 

Amounts that remain uncollected at the end of the reporting period are presented in the statement of financial position as contract assets as it takes more than just a passage of time for them to become due for payment. Grupo TMM generally does not receive advances in excess of the amount of obligations satisfied and therefore no balances of contract liabilities are incurred.


26

Parcel vessels and bulk carriers
 
These revenues are derived from the transportation of merchandise through the Company’s own shipments or third parties, usually in periods ranging between 7 and 30 days. The rate is fixed and it is set at the beginning of the contract, based on the space or capacity required by the customer. The performance obligation is met as the merchandise is transported from the point of origin to the destination. Revenues are recognized over time on a straight-line basis during the term of each contract. Given that the costs required for rendering the service under these contracts do not vary significantly, that method provides a reasonable representation of the services transferred.
The amounts that remain unbilled at the end of the reporting period are presented in the consolidated statement of financial position as contractual assets, since something additional is required in addition to time elapsed in order for those amounts to become due and payable. The Company generally does not receive advances that exceed the amount of obligations met; therefore, contract liability balances are not generated.
 
Maritime administration services
 
Until the month of August 2022, they correspond to revenues for services rendered for contracting, operating, and managing shipments, mainly offshore service providers. The rate for these services is determined by applying a 2.85% profit margin to the costs incurred by the Company for rendering services. This percentage is reviewed annually, and it can be increased under certain circumstances, but by applying it beginning the year subsequent to its modification, these services are considered a single performance obligation. Accordingly, the consideration is totally allocated; revenues are recognized over time as the related costs are incurred by applying the corresponding profit margin. The amounts are billed monthly, in accordance with these referred to above; therefore, neither asset balances nor contract liabilities are generally generated.
 
Ship repair services (shipyard) and containers
 
Correspond to revenues for minor and major repairs and maintenance to ships made at the facilities of the Company (shipyard), as well as containers of shipping companies and others such as wharfage. The consideration for the services is fixed, and it is determined in the contract based on the work ordered, including materials and replacement parts, which must be realized in an estimated period for the work, which ranges from 2 days up to 60 days for ships, and from 1 day up to 6 days for containers. Wharfage depends on the considerations of the ship from 1 to 365 days, due to the high degree of interdependence among the various elements of these services. They are recorded in the accounting as a single performance obligation. These revenues are recognized over time in conformity with the completion of the services agreed upon.

The Company measures its completion toward total compliance of the performance obligation by comparing real hours invested up to the date with the total estimated hours required to perform the repair or maintenance, including related costs. This base reasonably represents services transferred to each customer, by virtue of the ability of the Company to make reliable estimates based on its significant historical experience in rendering these services.

27
The amounts that remain unbilled at the end of the reporting period are presented in the consolidated statement of financial position as contractual assets, since something additional is required in addition to time passaged in order for those amounts to become due and payable. The Company generally does not receive advances that exceed the amount of obligations met; therefore, liabilities balances are not generated.

Other services
 
The Company obtains revenues for other services such as suppliers, agency, port formalities, among other things. Most of these services are considered single performance obligations in the terms of the respective contracts, and the consideration is entirely allocated to those performance obligations. Revenues are recognized over time, since customers receive and consume the benefits as the Company renders the services, that is, as the performance obligations are met. The Company does not generate asset balances or contract liabilities for most of these services. The Company acts as an agent for the specific case of agency services and, therefore, it recognizes the revenues corresponding to the profit margin generated net of the costs incurred.
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 income and costs
 
Interest income and expense are reported as accrued using the effective interest method and are reported as part of the comprehensive financing cost.
 
4.20
Information by segments
 
The Company has four operating segments: maritime division, maritime infrastructure, logistics ports and terminals division and warehousing division. 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 the Company.
 
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, this primarily applies to Grupo TMM’s corporate headquarters.
 
4.21
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.

28
Significant management judgment
 
The reporting judgments made by Management as to the application of the accounting policies of the Company that would have a material effect on the consolidated financial statements are described following.

Evaluation of control, significant influence, and joint control
 
Management evaluates the terms of voting power with respect to its investees, the power to govern, decisions, contractual and legal agreements, upon determining if there is control, significant influence, and joint control. Significant judgment is required by evaluating some of these characteristics that can be modified over time (see Note 4.2).
 
Estimation uncertainty
 
Information about estimates and assumptions that have 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 of 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 23).
 
Measures of fair value
 
Management uses valuation techniques to measure the fair value of its 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 asset. 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, as well as future results and the discount rate (see Note 25).

29
Leases – determination of the appropriate discount rate to measure lease liabilities
 
As noted above, the Company enters into leases with third-party landlords and as a consequence the rate implicit in the relevant lease is not readily determinable. Therefore, the Company uses its incremental borrowing rate as the discount rate for determining its lease liabilities at the lease commencement date. The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow over similar terms which requires estimations when no observable rates are available.
 
These rates are, where necessary, then adjusted to reflect the credit worthiness of the entity entering into the lease and the specific condition of the underlying leased asset.

Effect of estimation uncertainty:
 
The effect of a change in the incremental borrowing rate for leases entered into during the reporting period is shown in the table below:
 
Estimate
  
Change in estimate
  
Effect on right-of-use asset
  
Effect on lease liability
Incremental borrowing rate
  
1% increase in the rate
  
Reduces by $5,990
  
Reduces by $5,990

5
Acquisitions and disposals
 
Disposal of subsidiaries
 
Years 2022 and 2021
 
During fiscal years 2022 and 2021 no subsidiaries were disposed of.

Year 2020

Grupo TMM sold 100% of the shares of the subsidiaries Siremirta Corporate, S.A. de C.V., Ricalme Services, S.A. de C.V., Dogoubert, S.A.P.I. de C.V. (Split of TMM Logistics, S.A. de C.V.) and Judsony, S.A.P.I. de C.V. (Split of TMM Logistics, S.A. de C.V.) to an unrelated third party in 2020. The gain on the sale of these subsidiaries amounted to $451, which is shown in the item of ‘Other (expenses) income’ in the consolidated statements of profit or loss (see Note 19). The value of the net assets of those subsidiaries was immaterial as of the date of the sale.

Acquisition of subsidiaries
 
During 2022, 2021 and 2020 no company was acquired.
 

6
Cash and cash equivalents
 

Cash and cash equivalents as of December 31, 2022 and 2021, are summarized as follows:
 
   
2022
    
2021
  
Cash on hand
  
$
634
    
$
738
  
Cash at banks
    
74,554
      
38,829
  
Short-term investments (a)
    
19,545
      
-
  
   
$
94,733
    
$
39,567
  


(a)
Includes fix-term deposits (promissory notes) and repurchase/resell agreements with terms up to 3 days.

30
Restricted cash
 

As of December 31, 2021, restricted cash amounting to $48,203 represents the amount required for guaranteeing payments, in accordance with credit agreements, and the guarantee fund on the sale of Terminal Marítima de Tuxpan S.A. de C.V. (TMT) In October 2022, a restricted cash, attributable to TMT of $1.9 million dollars (approx. $36.8 million pesos), was released, leaving only in the restricted cash a reserve of $2.0 million pesos, necessary for foreign trade activities used for the storage business.

7
Trade receivables
 

Trade receivables as of December 31, 2022 and 2021, are summarized as follows:

 
 
  
2022
    
2021
  
Maritime
            
Offshore vessels
  
$
166,703
    
$
187,742
  
Parcel tankers
    
12,604
      
10,071
  
Bulk Carrier
    
33,896
      
-
  
Shipping agencies
    
26,904
      
7,839
  
 
                
Maritime infrastructure
                
Shipyard
    
56,343
      
59,942
  
 
                
Ports, terminals and logistics
                
Port services
    
100
      
889
  
Repair of containers     9,970       20,705  
Automotive services     795       1,277  
Commercial leases
    
-
      
66
  
 
                
Warehousing and other businesses
                
Warehousing
    
60,040
      
35,560
  
Other businesses
    
1,335
      
1,267
  
Total trade receivables
    
368,690
      
325,358
  
Contract assets
    
128,799
      
96,023
  
Allowance for doubtful accounts
    
(25,975
)
    
(20,294
)
 
  
$
471,514
    
$
401,087
  
 
All amounts are short-term. The net carrying value of trade accounts receivables is considered a reasonable approximation to fair value.
 
The activity in the allowance for doubtful accounts is presented below:
 
   
2022
    
2021
  
Balance as of January 1
  
$
20,294
    
$
21,218
  
Impairment loss for the period
    
7,277
      
199
  
Receivables written off during the year
    
(1,596
)
    
(1,123
)
Balance as of December 31
  
$
25,975
    
$
20,294
  

31
Note 26 includes disclosures related to credit risk exposures and the analysis related to the allowance for expected credit losses. In 2022 and 2021 the impairment loss was calculated applying the expected credit loss model in accordance with IFRS 9.

8
Other accounts receivable
 
Other accounts receivable as of December 31, 2022 and 2021, are summarized as follows:
 
   
2022
    
2021
  
Current
            
Recoverable taxes
  
$
193,508
    
$
202,903
  
Services for port, maritime and other operations
    
112,714
      
57,620
  
Employees
    
4,549
      
3,287
  
Insurance claims
    
794
      
842
  
Others
    
25,530
      
7,369
  
     
337,095
      
272,021
  
                 
Non-current
                
Value added tax recoverable (a)
    
273,314
      
280,000
  
   
$
610,409
    
$
552,021
  
 

 (a)
During the 2022 and 2021, the VAT recovery processes have been affected by practices of the tax authorities to extend the recovery periods.
 

9
Property, vessels and equipment
 
Property, vessels and equipment as of December 31, 2022 and 2021 are summarized as follows:

 
   
2022
  
 
  
Net
balances at beginning
of year
    
Additions
    
Disposals
      
Transfers and others
    
Depreciation
/ loss from
revaluation
    
Net balances
at year end
    
Estimated useful lives(years)
  
Maritime equipment
  
$
70,838
    
$
-
    
$
-
      
$
(4,099
)
  
$
13,160
    
$
53,579
      
3
  
Shipyard
    
149
      
-
      
-
        
-
      
35
      
114
      
40
  
Major vessel maintenance
    
1,945
      
-
      
-
        
15,185
      
2,548
      
14,582
      
2.5
  
Buildings and facilities
    
116,714
      
425
      
-
        
(9,780
)
    
3,544
      
103,815
      
20 y 25
  
Warehousing equipment
    
387
      
290
      
-
        
(1
)
    
75
      
601
      
10
  
Computer equipment
    
277
      
49
      
-
        
(5
)
    
139
      
182
      
3 y 4
  
Terminal equipment
    
23,337
      
1
      
-
        
(2
)
    
2,340
      
20,996
      
10
  
Ground transportation equipment
    
2,564
      
1,321
      
-
        
-
      
753
      
3,132
      
4.5 y 10
  
Other equipment
    
8,434
      
3,620
      
-
        
(458
)
    
1,495
      
10,101
          
 
    
224,645
      
5,706
      
-
        
840
      
24,089
      
207,102
          
Lands
    
1,199,550
      
-
      
61,973
  
(a)
    
9,597
      
-
      
1,147,174
          
Constructions in progress
    
116,743
      
19,525
      
-
        
227
      
-
      
136,495
          
 
  
$
1,540,938
    
$
25,231
    
$
61,973
      
$
10,664
    
$
24,089
    
$
1,490,771
          


32
   
2021
  
   
Net
balances at beginning of year
    
Additions
      
Disposals
      
Transfers
and others
      
Depreciation
/ loss from
revaluation
    
Net balances at year end
    
Estimated useful lives(years)
  
Vessels
  
$
182,055
    
$
-
      
$
119,832
  
(b)
  
$
(51,591
)
(c)
  
$
10,632
    
$
-
      
25
  
Maritime equipment
    
-
      
33,836
        
-
        
37,002
        
-
      
70,838
      
3
  
Shipyard
    
190
      
-
        
-
        
-
        
41
      
149
      
40
  
Major vessel maintenance
    
6,858
      
-
        
5,486
        
2,376
        
1,803
      
1,945
      
2.5
  
Buildings and facilities
    
286,232
      
-
        
48,869
  
(d)
    
(108,094
)
(c)
    
12,555
      
116,714
      
20 y 25
  
Warehousing equipment
    
450
      
-
        
-
        
-
        
63
      
387
      
10
  
Computer equipment
    
397
      
100
        
-
        
-
        
220
      
277
      
3 y 4
  
Terminal equipment
    
24,309
      
1,381
        
-
        
-
        
2,353
      
23,337
      
10
  
Ground transportation equipment
    
3,730
      
54
        
-
        
-
        
1,220
      
2,564
      
4.5 y 10
  
Other equipment    
9,500
      
89
        
-
        
23
        
1,178
      
8,434
          

   
513,721
      
35,460
        
174,187
        
(120,284
)
      
30,065
      
224,645
          
Lands
    
1,934,345
      
-
        
158,287
  
(d)
    
(576,508
)
(c)
    
-
      
1,199,550
          
Constructions in progress
    
83,930
      
40,008
  
(e)
    
-
        
(7,195
)
      
-
      
116,743
          
 
  
$
2,531,996
    
$
75,468
      
$
332,474
      
$
(703,987
)
    
$
30,065
    
$
1,540,938
          

 
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, vessels and equipment at December 31, 2022 and 2021 is $141,427 and $197,950, respectively.

 

 (a)
It consists of the retirement of 5 real properties in August, the real property named “El Montero” and 4 real properties classified as available-for-sale, pursuant to the accord and satisfaction contract with Fibra FUNO for the total payment of liabilities in benefit of Fibra FUNO in lease agreements. A total loss was incurred on the operation in the amount of $57,804. (See Note 10).
 

 (b)
On January 8, 2021, the ship “Olmeca” was sold to company Athene Shipping Limited, which was delivered in Singapore. The advance received was used to prepay the line of credit with Act Maritime LLC for $3.5 million dollars in December 2020.
 

 (c)
It is mainly made up of the transfer to the assets classified as held for sale for $446,951 and the cancellation of the revaluation surplus for $284,584.
 

 (d)
It is mainly made up of the write-offs of 3 properties for $191,000, registering a loss of $130,000, recorded under other expenses (see Note 19).
 

 (e)
Corresponds mainly to investments in Inmobiliaria Dos Naciones, S. de R.L. of C.V. for the Dam project.
 
If the cost model had been used, the revalued carrying amounts for vessels, land and properties as of December 31, 2022 and 2021, would be as follows:
 
   
2022
    
2021
  
Lands
  
$
653,640
    
$
715,613
  
Properties
    
126,675
      
133,342
  
   
$
780,315
    
$
848,955
  
 
The revalued amounts include a revaluation surplus of $753,439 and $824,600 in 2022 and 2021, respectively, before taxes, which is not available for distribution to stockholders (see Note 17).
 
Fair value measurement
 
See Note 25 regarding the measuring of fair value for properties.
 
Guarantees
 
At the end of 2022 and 2021, there were three properties securing various bank loans. Likewise, as of December 31, 2022 and 2021, there was an RTG crane under guarantee with ‘PNC Bank, N.A.’.
 
10
Leases
 
Right-of-use assets
 
   
2022
  
   
Warehouse
      
Cranes
    
Courtyards
    
Major vessel
maintenance
    
Corporate
building
          Total  
Gross carrying amount
                                          
Balance 1 January 2022
  
$
346,095
      
$
11,722
    
$
71,397
    
$
22,135
    
$
92,170
       $
543,519  
Additions
    
57,524
        
4,977
      
56,564
      
-
      
-
         119,065  
Disposals
    
157,878
   (b
   
11,722
      
48,182
      
-
      
92,170
   (a
    309,952  
Balance at 31 December 2022
    
245,741
        
4,977
      
79,779
      
22,135
      
-
         352,632  
                                                     
Depreciation
                                                    
Balance 1 January 2022
    
138,709
     
11,268
   
33,459
   
9,684
   
13,167
      206,287  
Disposals
    
129,255
  
 (b
   
11,399
      
34,701
      
-
      
21,070
   (a
    196,425  
Depreciation
    
47,809
        
2,204
      
10,382
      
5,534
      
7,903
         73,832  
Balance 31 December 2022
    
57,263
     
2,073
   
9,140
   
15,218
   
-
      83,694  
Carrying amount 31 December 2022
  
$
188,478
      
$
2,904
    
$
70,639
    
$
6,917
    
$
-
       $
268,938  

34
   
2021
  
   
Warehouse
    
Cranes
    
Courtyards
    
Major vessel
maintenance
    
Corporate
building
    
Total
  
Gross carrying amount
                                    
Balance 1 January 2021
  
$
287,641
    
$
11,722
    
$
60,035
    
$
22,135
    
$
92,170
    
$
473,703
  
Additions
    
58,454
      
-
      
11,362
      
-
      
-
      
69,816
  
Disposals
    
-
      
-
      
-
      
-
      
-
      
-
  
Balance at 31 December 2021
    
346,095
      
11,722
      
71,397
      
22,135
      
92,170
      
543,519
  
                                                 
Depreciation
                                                
Balance 1 January 2021
    
83,036
      
7,157
      
22,495
      
4,150
      
2,633
      
119,471
  
Disposals
    
-
      
-
      
-
      
-
      
-
      
-
  
Depreciation
    
55,673
      
4,111
      
10,964
      
5,534
      
10,534
      
86,816
  
Balance 31 December 2021
    
138,709
   
11,268
   
33,459
   
9,684
   
13,167
   
206,287
Carrying amount 31 December 2021
  
$
207,386
    
$
454
    
$
37,938
    
$
12,451
    
$
79,003
    
$
337,232
  
 

 (a)
It corresponds to the cancellation of the lease agreement of Torre Latino y Cuspide in August, pursuant to the accord and satisfaction contract in payment of 5 real properties with Fibra FUNO (see note 9a). Moreover, as part of the contract, Fibra FUNO accepts to liquidate the credit in benefit of Banco de Bajio in the amount of $22,000, which gave rise to a loss on the transaction in the amount of $57,804 (see Note 19).


(b) It corresponds to the cancellation of lease agreements for warehouses used for the storage business.

Lease liabilities
 
As of December 31, 2022 and December 31, 2021, the information on leases is summarized below:
 
   
Short-term
    
Long-term
  
2022
            
Payable in Mexican pesos
            
Warehouse
  
$
52,581
    
$
150,091
  
Cranes
    
2,574
      
456
  
Courtyards
    
7,701
      
65,990
  
Major vessel maintenance
    
6,073
      
1,609
  
   
$
68,929
    
$
218,146
  
             
2021
            
Payable in Mexican pesos
            
Warehouse
  
$
89,694
    
$
179,292
  
Cranes
    
1,248
      
-
  
Courtyards
    
11,482
      
30,033
  
Major vessel maintenance
    
6,404
      
7,683
  
                 
Payable in US dollars
                
Corporate building
    
12,550
      
71,489
  
   
$
121,378
    
$
288,497
  

35
Grupo TMM has leased its corporate headquarters building, warehouses for the storage service, cranes for the logistics services and a major vessel maintenance. With the exception of short-term leases and low-value underlying assets, each lease is reflected on the consolidated statement of financial position as a right-of-use asset and a lease liability.
 
Each lease generally imposes a restriction that, unless there is a contractual right for the Company to sublet the asset to another party, the right-of-use asset can only be used by the Company.
 
Leases are either non-cancellable or may only be cancelled by incurring a substantive termination fee. Some leases contain an option to extend the lease for a further term.
 
Grupo TMM is prohibited from selling or pledging the underlying leased assets as security. For leases over office buildings and warehouses, Grupo TMM must keep those properties in a good state of repair and return the properties. Further, Grupo TMM must insure items of leases assets and incur maintenance fees on such items in accordance with the lease contracts.
 
The table below describes the nature of Grupo TMM’s leasing activities by type of right-of-use asset recognized in the consolidated statement of financial position:
 
Right-of-use asset
  
No. of
right-of-use
assets
leased
    
Range of
remaining
term
(years)
    
No. of
leases with
extension
options
    
No. of
leases with
purchase
option
    
No. of
leases with
variable
payments
linked to an
index
    
No. of
leases with
termination
options
  
Corporate headquarters
    
7
      
1 – 10
      
2
      
-
      
7
      
-
  
Warehouse
    
2
      
3 – 10
      
1
      
-
      
2
      
-
  
Courtyards
    
1
      
1
      
-
      
-
      
-
      
-
  
Cranes
    
1
      
2
      
-
      
-
      
-
      
-
  
 
Lease liabilities are secured with related underlying assets. Future minimum lease payments at 31 December 2022 and 2021 were as follows:
 
   
Within the
1st year
    
1 to 3 years
    
3 to 5 years
    
After 5
years
    
Total
  
Balance at December 31, 2022
                              
Lease payments
  
$
103,127
    
$
178,272
    
$
44,319
    
$
70,243
    
$
395,961
  
Financial charges
    
(34,198
)
    
(38,237
)
    
(17,071
)
    
(19,380
)
    
(108,886
)
Present values, net
  
$
68,929
    
$
140,035
    
$
27,248
    
$
50,863
    
$
287,075
  
                                         
Balance at December 31, 2021
                                        
Lease payments
  
$
184,703
    
$
213,311
    
$
102,716
    
$
39,833
    
$
540,563
  
Financial charges
    
(63,325
)
    
(48,820
)
    
(13,581
)
    
(4,962
)
    
(130,688
)
Present values, net
  
$
121,378
    
$
164,491
    
$
89,135
    
$
34,871
    
$
409,875
  
 
36
Lease payments not recognized as a liability
 
The Company has elected not to recognize a lease liability for short-term leases (leases with an expected term of 12 months or less) or for leases of low-value assets. Payments made under such leases are expensed on a straight-line basis. In addition, certain variable lease payments are not permitted to be recognized as lease liabilities and are expensed as incurred.
 
The expense relating to payments not included in the measurement of the lease liability is as follows:
 
   
2022
    
2021
  
Short-term leases (a)
  
$
694,200
    
$
558,178
  
Leases of low-value assets
    
6,249
      
7,193
  
   
$
700,449
    
$
565,371
  
 

 (a)
Corresponds to the leasing of parcel and bulk carrier vessels.
 
At December 31, 2022 and 2021, Grupo TMM was committed on short-term leases and total commitment at that date was $57,850 and $46,515, respectively.

At December 31, 2022 and 2021, Grupo TMM had no lease commitments that had not yet started.
 
Total cash outflow for leases for the years ended December 31, 2022 and 2021 were $798,256 and $617,621, respectively.
 
11
Concession rights
 
As of December 31, 2022 and 2021, the concession rights are as follows:
 
   
2022
    
2021
    
Years to amortize
  
Administración Portuaria Integral de Acapulco (a)
  
$
94,607
    
$
94,607
    
10
  
Accumulated amortization
    
(94,607
)
    
(94,607
)
      
Concession rights, net
  
$
-
    
$
-
        
 

 (a)
As of December 31, 2021, the Company holds concession to operate the cruise and vehicle terminal at the port of Acapulco, Guerrero. Under this concession agreements, the Company is obliged to keep the facilities included in the concession in good condition, as well as making monthly payments (fixed and variable), related to the operation (see Note 28). As of June 2022, this concession expired and renewal was not obtained.



The amortization of the concession rights was $1,892, for the year ended December 31, 2021. Monthly payments to the Administración Portuaria Integral de Acapulco were $3,962 in 2021. At the date of delivery of the facilities, the rights paid for this concession in the amount of $94,607, had been fully amortized.

37
12
Intangible assets
 
Intangible assets as of December 31, 2022 and 2021, are summarized as follows:
 
   
2022
  
   
Net
balances at
beginning
of year
    
Additions
    
Transfers
and others
    
Amortization
    
Net
balances at
year end
    
Estimated
useful life
(years)
  
Software
  
$
34,583
    
$
6,165
 
  
$
-
    
$
8,823
    
$
31,925
    
3 y 5
  
Trademark (a)
    
125,528
      
-
       -      
-
      
125,528
    
Indefinite
  
   
$
160,111
    
$
6,165
    
$
-
    
$
8,823
    
$
157,453
          

   
2021
  
   
Net
balances at
beginning
of year
    
Additions
    
Transfers
and others
    
Amortization
    
Net
balances at
year end
    
Estimated
useful life
(years)
  
Software
  
$
25,722
    
$
9,305
  (b)  
$
132
    
$
576
    
$
34,583
    
3 y 5
  
Trademark (a)
    
125,528
      
-
      
-
      
-
      
125,528
    
Indefinite
  
   
$
151,250
    
$
9,305
    
$
132
    
$
576
    
$
160,111
          
 

 (a)
Corresponds to the rights on the Marmex trademark associated with the maritime division segment, specifically the offshore vessels operation. This trademark is subject to annual impairment testing (see Note 13).
 

 (b)
Corresponds mainly to the SAP Hana system upgrade project.
 
The accumulated amortization of intangible assets as of December 31, 2022 and 2021, is $10,422 and $1,599, respectively.
 
13
Impairment of long-lived assets
 
As of December 31,2022, and 2021, Grupo TMM had performed annual impairment tests. The recoverable amounts of 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. As mentioned in Note 9, the Company sold the last vessel it owned in January 2022, so the value of this asset as of December 31, 2021, was adjusted to its sale price and is presented in the consolidated statements of financial position as an asset available for sale.



The trademark is considered an asset that does not generate flows independently, therefore this was grouped as a cash-generating unit (maritime division segment) together with other long-lived assets in this segment.
 
The recovery value for these assets was determined as the higher between their value in use and their market value, less selling costs. As of December 31, 2022, and 2021, no impairment losses were determined for these assets.

38
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 25. At December 31, 2022 and 2021, no impairment losses were determined for these assets.
 
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 of these assets was determined as their value in use. At December 31, 2022 and 2021, 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.
 

The present value of the cash flows expected for each segment was determined applying an appropriate discount rate.

Growth rates
 
The growth rates reflect the long-term average for these rates for the 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 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 maritime segment is particularly sensitive to the discount rates.


39
14
Financial assets and liabilities
 
Categories of financial assets and liabilities
 
The financial assets and liabilities as of December 31, 2022 and 2021, are summarized as follows:
 
   
2022
    
2021
  
Financial assets
            
Valued at amortized cost
            
Cash and cash equivalents
  
$
94,733
    
$
39,567
  
Restricted cash
    
2,059
      
48,203
  
Trade receivables
    
334,886
      
305,064
  
Other accounts receivable
    
143,587
      
69,118
  
Related parties
    
39,468
      
65,057
  
Total current financial assets
  
$
614,733
    
$
527,009
  
                 
Financial liabilities
                
Valued at amortized cost
                
Short-term portion of the financial debt
  
$
35,030
    
$
57,106
  
Trade payables
    
437,382
      
437,005
  
Accounts payable and accrued expenses
    
466,077
      
438,712
  
Related parties
    
165,280
      
144,966
  
Total short-term portion of the financial debt
    
1,103,769
      
1,077,789
  
Long-term financial debt
    
32,475
      
65,601
  
Total financial liabilities
  
$
1,136,244
    
$
1,143,390
  
 
As of December 31, 2022, and 2021, the carrying value of the financial assets and liabilities at amortized cost is considered similar to their fair value.

Financial debt
 
The information for financing as of December 31, 2022 and 2021 is summarized as follows:
 
   
2022
    
2021
  
   
Short-term
    
Long-term
    
Short-term
    
Long-term
  
Payable in Mexican pesos
                        
Daimler Financial Services México, S. de R.L. de C.V.
  
$
6,946
    
$
6,720
    
$
7,076
    
$
11,103
  
Recognition of debt and substitution of debtor for $40.9 million at a fixed rate of 12%, with monthly payments of principal and interest and maturing in November 2019.                                
                                 
In order to improve the profile of the schedule of payments, a new debt recognition was formalized on October 11, 2018, in the amount of $28 million at a 12.9% fixed rate, with monthly payments on principal and interest, due October 2021.                                
                                 
In order to face the effects of the Covid-19 pandemic, the Company obtained two grace periods of 3 months each for the principal payment from April to September 2020, extending the term of the loan to January 2022.                                
                                 
On June 19, 2021, a new agreement was signed with the finance company in order to extend the amortization period for a total amount of $19.9 million at a fixed rate of 12.9%, with monthly payments of principal and interest and maturity in June 2024.                                

                               
On August 2, 2022, a new agreement was signed with the financial company in order to extend the amortization period, for a total amount of $15.4 million at a fixed rate of 13.0%, with monthly payments of principal and interest and maturing in December 2024.
                                

40
    2022     2021  
    Short-term     Long-term     Short-term     Long-term  
Banco Autofin México, S.A. Institución de Banca Múltiple
    
4,257
      
3,000
      
14,732
      
7,257
  
Five simple lines of credit with mortgage guarantee initially contracted for $25.5, $45.8, $34.6, $21.6 and $8.4 million at a variable rate of 28-day TIIE plus 450 base points, with monthly payments of principal and interest and maturing in September 2024. The credit for $25.5 was settled on January 14, 2022. The credits for $45.8, $34.6 and $8.4 were settled on July 29, 2022.
                                
                                 
On November 26, 2018, a new credit line for $20.0 million was drawn down at a 28-day TIIE variable rate plus 550 base points and due in November 2023. This credit was settled on January 27, 2023.
                                

                               
In order to deal with the effects of the Covid-19 pandemic, the Company obtained a 6-month grace period in the principal payment of 4 of the 6 lines, the period applies from January to June of 2020, extending the maturity of these lines accordingly.                                
INPIASA, S.A. de C.V.
    
403
      
-
      
1,044
      
-
  
Contract for line of credit, 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.
                                

                               
In 2022, an amending agreement was signed with INPIASA in order to extend the amortization period, maturing in December 2024.
                                
Banco del Bajío, S.A.     -       -       4,519       20,715  
First drawdown for $12.0 million line of credit line with a mortgage guarantee for $30.0 million, variable rate of TIIE 28 days plus 600 points, with monthly payments of principal and interest, maturing in July 2027.                                

                               
The second drawdown for $18.0 million was made on February 23, 2022, variable rate of TIIE 28 days plus 600 points, with monthly payments of principal and interest, due in July 2027.                                
                                 
It corresponds from the agreements reached with Fibra FUNO, August 2022, it was approved by Banco del Bajío, to carry out the assignment of said credit in favor of Fibra Uno.                                

41

  2022     2021  

  Short-term     Long-term     Short-term     Long-term  
Others investors
    
12,561
      
-
      
17,970
      
-
  
Two unsecured loans were contracted, each for $6.0 million at a fixed annual rate of 15.0%, with principal and interest payments due, originally in October 2020. In January 2021, a principal payment of $1.0 million was made to each line. As part of the negotiations carried out by the Company, new conditions were agreed for each line, increasing the interest rate by 0.25%, as well as extending the maturity date in October 2023.
                                

                               
In July 2021, a credit line with multiple drawdowns was contracted, the first being made on July 28, 2021. The balance as of December 31, 2022, is $5,061 million with a rate of 15% and maturing in September 2023.                                

                               
Hewlett Packard     137       350       137       485  
In January 2022, an additional line was contracted for $622.5 thousand pesos, at a fixed rate of 9.87%, monthly payments of principal and interest on unpaid balances with maturity in December 2025.                                

                               
On July 14, 2022, the contract was renegotiated with the following conditions: a fixed rate of 11.20%, monthly payments of principal and interest on unpaid balances, and maturity in September 2026.
                                

                               
Interest payable
    
2,174
      
-
      
670
      
-
  

   
26,478
      
10,070
      
46,148
      
39,560
  
                                 
Payable in US dollars
                                
Hewlett Packard
    
5,258
      
19,074
      
7,429
      
18,983
  
Two lines of credit for $607.8 dollars and $201.6 dollars, at a fixed rate of 6.84% and 6.13%, monthly payments of principal and interest on unpaid balances and maturing in March and October 2024, respectively.                                
                                 
In order to face the effects of the Covid-19 pandemic, the Company obtained a grace period of 3 months in the payment of principal for the months of May to July, extending the term of each credit line 3 months.                                
                                 
In order to continue with the Company’s technological transformation strategy, 3 additional simple credit lines were contracted for $86.6 thousand dollars, $96.9 thousand dollars and $ 252.1 thousand dollars, at a fixed rate of 5.96%, 7.16% and 4.58% fixed annual, respectively, monthly payments of principal and interest on unpaid balances and maturing in March, April and August 2025.                                
                                 
In January 2021, two additional lines were contracted for $43.3 thousand dollars and $385.0 thousand dollars, at a fixed rate of 5.14% and 4.76%, monthly payments of principal and interest on unpaid balances and maturity in December 2025.                                
                                 
On July 14, 2022, the contracts were renegotiated with the following conditions for each line, increasing the rate by 0.25%, as well as extending the maturity date for one year.
                                
                                 
PNC, Bank, N.A.
    
3,294
      
3,331
      
3,529
      
7,058
  
Line of credit with collateral for $860 thousand dollars, at a fixed rate of 4.40%, semiannual payments of principal and interest on unpaid balances and maturing in July 2024.
                                

   
8,552
      
22,405
      
10,958
      
26,041
  

 
$
35,030
    
$
32,475
    
$
57,106
    
$
65,601
  
 
42
Covenants
 
Some of the agreements related to the abovementioned loans contain certain covenants including restricting the payment of dividends, not reducing the capital stock and not splitting, as well as conditioning the sale of assets, the foregoing without prior authorization from the creditor; Likewise, in some cases, a copy of quarterly and audited financial statements must be delivered, as well as reasonable information requested by the creditor. As of December 31, 2022, and 2021, Grupo TMM and subsidiaries complied with the covenants set forth in those contracts.
 
The interest expense on the financial debt was $9,096 and $14,689 for the periods of twelve months ended December 31, 2022 and 2021, respectively.

The maturity of the long-term financial debt as of December 31, 2022 and 2021 is as follows:
 
    2022     2021  
Maturity
  
   
 
2023
  
$
-
    
$
22,121
  
2024
    
16,617
      
21,762
  
2025
    
6,362
      
10,400
  
2026
    
5,556
      
8,682
  
2027
    
3,940
      
2,636
  
   
$
32,475
    
$
65,601
  
 

15
Balances and transactions with related parties
 
The accounts payable and transactions with related parties as of December 31, 2022 and 2021 are summarized as follows:
 
   
2022
    
2021
  
   
Receivable
    
Payable
    
Receivable
    
Payable
  
División Marítima, S.A. de C.V. (a)
  
$
39,468
    
$
-
    
$
65,057
    
$
-
  
SSA México, S.A. de C.V. (b)
    
-
      
8,111
      
-
      
5,829
  
Inversionistas (c)
     -       157,169       -       139,137  
   
$
39,468
    
$
165,280
    
$
65,057
    
$
144,966
  
 

 (a)
The accounts receivable is related to the maritime services provided to TMM DM by Grupo TMM.
 
43

(b)
The accounts payables to SSA México, S.A. de C.V. are largely due to subagency services that this related party provides to Grupo TMM.
 

 (c)
Lines of credit in the amount of $130 million at a 15% annual fixed rate, with payments on capital and interest upon maturity, extended one more year, that is, up to December 2023. Interest expenses of these credits amounted to $18,227 and $10,329 for the twelve month periods ended December 31, 2022 and 2021, respectively.

The most relevant transactions with related parties as of December 31, 2022, 2021 and 2019 are summarized as follows:
 
   
2022
    
2021
    
2020
  
Revenue:
                  
Maritime services (a)
  
$
20,958
    
$
71,823
    
$
131,137
  
Shipping agency services (b)
    
412
      
419
      
499
  
   
$
21,370
    
$
72,242
    
$
131,636
  
                         
Costs:
                        
Sub-agency commissions (c)
  
$
7,237
    
$
4,062
    
$
107,692
  
                         
Expenses:
                        
Other expenses (d)
  
$
-
    
$
180
    
$
440
  
                         
Interests
   $
 18,227     $
10,329     $
-  

 
(a)
Maritime services between TMM Dirección Corporativa, S.A. de C.V, subsidiary of Grupo TMM, and TMM DM. The contract termination date was August 30, 2022.


(b)
Shipping agency services between Administradora Marítima TMM, S.A.P.I. de C.V., subsidiary of Grupo TMM, and TMM DM.
 

(c)
Shipping agency servicies provided by SSA México, S.A. de C.V. to Administradora Marítima TMM, S.A.P.I. de C.V.
 

 (d)
Management consulting provided by SSA México, S.A. de C.V. to Administración Portuaria Integral de Acapulco, S.A. de C.V.

Transactions involving executive personnel for the years ended December 31, 2022, 2021 and 2019, include the following expenses:
 
   
2022
    
2021
    
2020
  
Short-term benefits
                  
Salaries
  
$
19,055
    
$
28,697
    
$
36,003
  
Social security costs
    
736
      
1,843
      
1,633
  
   
$
19,791
    
$
30,540
    
$
37,636
  
 
44
16
Accounts payable and accrued expenses
 
Accounts payable and accrued expenses at December 31, 2022 and 2021, are shown as follows:
 
   
2022
    
2021
  
General expenses
  
$
194,487
    
$
135,287
  
Operating expenses
    
149,557
      
167,741
  
Purchased services
    
36,403
      
51,302
  
Taxes payable
    
37,797
      
31,356
  
Salaries and wages
    
5,189
      
3,116
  
Others
    
80,441
      
81,266
  
   
$
503,874
    
$
470,068
  

17
Stockholders’ equity

Capital stock

As of December 31, 2022, and 2021, 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 economic rights in the Company’s common shares through ordinary participation certificates (‘CPOs’), with each CPO corresponding to one common share.

In the United States, the Company’s ADSs, each representing five CPOs, trade on the OTC market under the symbol GTMAY. The underlying TMM common shares for the ADSs are traded on the Mexican Stock Exchange under the listing code TMM A.

Net tax profit account (CUFIN)

As of December 31, 2022, and 2021, the restated balance of the Net Taxable Income Account (CUFIN for its acronym in Spanish) of the Parent Company amounts to $4,313,616 and $4,001,128, respectively, which was generated up to December 31, 2013. No new balances have been generated in this account thereafter.

Dividends or earnings distributed to stockholders that are paid out of the CUFIN balance generated up to December 31, 2014 will not be subject to income tax until that balance is exhausted.

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
 
As of December 31, 2022, and 2021, the current balance in the Capital Contribution Account (CUCA for its acronym in Spanish) is $5,616,708 and $5,226,551, 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.
45

Other components of equity
 
Details of other components of equity as of December 31, 2022, 2021 and 2020, as follows:
 
   
Statutory
reserve
    
Defined
benefit
plan
    
Premium
on
convertible
obligations
    
Translation
result
    
Revaluation
surplus
      
Total
  
Balance as of December 31, 2019
   $ 216,948     $ (123,769 )   $ 77,106     $ (247,668 )   $ 849,341       $ 771,958  
Revaluation of assets
     -       -       -       -       314,436   (b)
    314,436  
Defined benefit plan
     -       10,953       -       -       -         10,953  
Reclassification from disposal of properties and depreciation
     -       -       -       -       (55 ) (a)
    (55 )
Total before taxes
     -       10,953       -       -       314,381         325,334  
                                                   
Tax expense
     -       (3,286 )     -       -       (94,331 )       (97,617 )
Total net of taxes
     -       7,667       -       -       220,050         227,717  
Balance as of December 31, 2020
  
$
216,948
    
$
(116,102
)
  
$
77,106
    
$
(247,668
)
  
$
1,069,391
      
$
999,675
  
Defined benefit plan
    
-
      
33,691
      
-
      
-
      
-
        
33,691
  
Reclassification from disposal of properties and depreciation
    
-
      
-
      
-
      
-
      
(332,151
)
   (c) 
   
(332,151
)
Total before taxes
    
-
      
33,691
      
-
      
-
      
(332,151
)
      
(298,460
)
                                                   
Tax expense
    
-
      
(10,107
)
    
-
      
-
      
87,360
        
77,253
  
Total net of taxes
    
-
      
23,584
      
-
      
-
      
(244,791
)
      
(221,207
)
Balance as of December 31, 2021
  
$
216,948
    
$
(92,518
)
  
$
77,106
    
$
(247,668
)
  
$
824,600
      
$
778,468
  
                                                   
Defined benefit plan     -       31,122       -       -       -         31,122  
Reclassification from disposal of properties and depreciation
     -       -       -       -       (88,630 )  (a) 
    (88,630 )
Total before taxes     -       31,122       -       -       (88,630 )       (57,508 )
                                                   
Tax expense     -       (9,337 )     -       -       17,469         8,132  
Total net of taxes     -       21,785       -       -       (71,161 )       (49,376 )
Balance as of December 31, 2022   $ 216,948     $ (70,733 )   $ 77,106     $ (247,668 )   $ 753,439       $ 729,092  
46


(a)
It corresponds to the reclassification of the revaluation surplus to accumulated losses from the sale of properties and disposals of vessels, as well as the depreciation for the period of revaluation of properties and vessels.
 

(b)
Corresponds to the revaluation of the land of the project called “Liquid Storage Terminal”, derived from changes in the conditions of the project generated by obtaining permits, the revaluation allows the Management to know the fair value of the property based on at its best use.


(c)
Includes the adjustment of assets available for sale at their fair value, for an amount of $291,200.

18
Revenues
 
The revenues as of December 31, 2022, 2021 and 2020, are summarized as follows:
 
   
2022
    
2021
    
2020
  
Maritime
                  
Parcel tankers
  
$
351,539
    
$
294,641
    
$
340,767
  
Maritime administration services (a)
    
16,343
      
42,416
      
131,136
  
Shipping agencies
    
31,379
      
10,360
      
27,530
  
Bulk Carrier (b)
    
304,269
      
174,643
      
85,085
  
Offshore vessels
    
527,571
      
317,170
      
93,373
  
                         
Maritime infrastructure
                       
Shipyard
    118,441
       139,226
       100,864
  
                         
Logistics, ports and terminals
                        
Port services
    
5,659
      
14,967
      
41,659
  
Repair of containers    
110,966
      
158,511
      
196,584
  
Intermodal terminal    
38,910
      
44,292
      
41,794
  
Automotive services    
5,442
      
5,990
      
5,447
  
                         
Warehousing and other businesses
                        
Warehousing
    
172,537
      
153,497
      
139,042
  
Total consolidated revenue
  
$
1,683,056
    
$
1,351,713
    
$
1,203,281
  

(a)
As discussed in note 4, the contract that Grupo TMM had as maritime administrator with TMM Division Maritima was terminated in August, 2022.

(b)
The merchandise transportation operation contract terminated in December 2022.

The Company’s revenues do not show any particular grouping characteristic, such as by type of customer (government and private), geographic zone, etc. The main grouping is shown based on the type of revenue for each segment. Moreover, as discussed in Note 4.19, all of the Company’s revenues are recognized over time.
 
47
19
Other (expenses) income
 
Other (expenses) income as of December 31, 2022, 2021 and 2020, is summarized as follows:
 
   
2022
    
2021
    
2020
  
Write-off of provisions
  
$
61,170
    
$
-
    
$
-
  
Expenses related to the cancellation of the corporate building lease
    
(11,351
)
    
(38,537
)
    
(113,469
)
Loss from sale of property, vessels and equipment, net (see Note 9)
    
(57,804
)
    
(132,956
)
    
-
  
Gain (loss) from the sale of subsidiaries (see Note 5)
    
-
      
-
      
451
  
Recoveries of taxes paid in prior years, net of expenses for recovery
    
-
      
-
      
(11,145
)
Cancellation of projects
    
-
      
-
      
(31,804
)
Forgiveness of accounts receivable     -       -       (98,859 )
Other, net
    
(2,393
)
    
2,150
      
(2,399
)
 
$
(10,378
)
  
$
(169,343
)
  
$
(257,225
)

20
Interest expense and other financial costs
 
This line at December 31, 2022, 2021 and 2020, is comprised as follows:
 
   
2022
    
2021
    
2020
  
Interest on financial debt
  
$
9,096
    
$
14,689
    
$
38,558
  
Interest on financial related parties
     18,227       10,329       -  
Interest expense on leasing arrangements
    
28,568
      
34,146
      
33,535
  
Other financial expenses
    
5,257
      
3,236
      
2,066
  
Amortization of transaction cost associated with financial debt
    
415
      
176
      
1,495
  
   
$
61,563
    
$
62,576
    
$
75,654
  
 

21
Income tax and tax loss carryforwards
 
Income Tax
 
Results for the year
 
Grupo TMM and Subsidiaries incurred combined tax losses for the years ended December 2022 and 2021, in the amounts of $79,041 and $159,003, respectively. Most of the companies that generated profits for an amount of $275,663 amortized them with tax losses from prior years for an amount of $265,090. Income tax recognized in profit or loss corresponds to subsidiaries that generated taxable income of $10,573, $10,349 and $36,243, for 2022, 2021 and 2019, respectively.
 
The difference between taxable and book income is due primarily to the net effect of 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 2020, 2021, 2022, and subsequent years is 30%.

The provision for income tax recognized in the statement of profit or loss for the years ended December 31, 2022, 2021 and 2020, is as follows:

48
   
2022
    
2021
    
2020
  
Income tax
  
$
(3,172
)
  
$
(7,015
)
  
$
(10,873
)
Deferred income tax
    
32,763
      
28,158
      
30,207
  
Total income tax benefit
  
$
29,591
    
$
21,143
    
$
19,334
  
 
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, 2022, 2021 and 2020, is as follows:
 
   
2022
    
2021
    
2020
  
Loss before taxes
  
$
(28,688
)
  
$
(269,197
)
  
$
(422,490
)
Income tax
    
8,606
      
80,759
      
126,747
  
                         
Increase (decrease) from:
                        
Difference in depreciation and amortization
    
(46,472
)
    
135,332
      
(86,033
)
Revaluation surplus
    
(18,051
)
    
(88,112
)
    
94,331
  
Materials and supplies
    
3,418
      
13
      
3,625
  
Inflationary and currency exchange effects on monetary assets and liabilities, net
    
15,663
      
(11,643
)
    
(4,035
)
Tax losses amortization
    
265,090
      
60,032
      
82,145
  
Provisions and allowance for doubtful accounts
    
(165,542
)
    
(97,628
)
    
(178,276
)
Difference between the tax and book value for the sale of assets
    
(7,277
)
    
(35,950
)
    
(14,276
)
Difference between the tax and book value for the sale of shares of subsidiaries
    
-
      
-
      
(104
)
Non-deductible expenses
    
(25,844
)
    
(21,660
)
    
(4,790
)
Income tax (agreement)
  
$
29,591
    
$
21,143
    
$
19,334
  
 
The components of deferred tax liability at December 31, 2022 and 2021, are comprised as follows:
 
   
2022
    
2021
  
Portion of tax loss carryforwards for subsequent years
  
$
385,936
    
$
336,395
  
Inventories and provisions – net
    
27,374
      
17,378
  
Concession rights and property, vessels and equipment
    
(567,902
)
    
(559,949
)
Total deferred tax liability
  
$
(154,592
)
  
$
(206,176
)

As of December 31, 2022, the Company’s Management carried out the evaluation of the amount of tax losses that will be recoverable and determined based on projections that the effect of the deferred tax asset determined in the year will be realized at 48% based on the information available at the date of issuance of the consolidated financial statements.
 
Tax loss carryforwards

As of December 31, 2022, Grupo TMM and its subsidiaries, report the following cumulative tax losses, which are restated applying the National Consumer Price Index (NCPI) factors in accordance with Mexican law.

49
Year in which the
loss was incurrred
  
Amounts
    
Year of expiration
  
2013
  
$
197,028
      
2023
  
2014
    
190,306
      
2024
  
2015
    
46,104
      
2025
  
2016
    
445,174
      
2026
  
2017
    
128,098
      
2027
  
2018
    
237,032
      
2028
  
2019
    
548,269
      
2029
  
2020
    
499,518
      
2030
  
2021
    
250,211
      
2031
  
2022
    
84,756
      
2032
  
   
$
2,626,496
          

22
Segment reporting

As part of the Company’s strengthening plan, the Company have reassigned the shipping agency business to the Maritime Division, which was previously reported as part of the Ports and Terminals Division. Likewise, the Shipyard business has become a Business Division, which we have named Maritime Infrastructure, previously part of the Maritime Division, finally the Logistics Division now reports within the Ports, Terminals and Logistics Division. As a result of the foregoing, the notes related to segments for the years 2021 and 2020 were modified.
 
The Company as of December 31, 2022, 2021 and 2020 operates in the following segments: i) maritime transportation, ii) maritime infrastructure, iii) logistics, ports and terminals and iv) warehousing. Specialized maritime transportation operations (‘Maritime Division’) include transportation of bulk liquid products, materials and provisions for drilling platforms. (‘Maritime infrastructure’) correspond to revenues for minor and major repairs and maintenance to ships made at the facilities of the Company (shipyard). Logistics, ports and terminals operations (‘Logistics ports and terminals Division’) include the operations of logistics solutions services and container and railcar maintenance and repair services and loading and unloading, storage at maritime port terminals, and shipping agency operations. Warehousing operations (‘Warehousing Division’) include storage and management of the facilities and bonded warehouses. 

50
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 follow:
 
   
 
Maritime
division
    
Maritime infrastructure
division
    
Logistics,
ports and
terminals
division
    
Warehousing
division
    
Other
businesses
and shared
accounts
    
Total
consolidado
  
December 31, 2022
                                    
Revenue
  
$
1,231,101
    
$
118,441
    
$
160,977
    
$
172,537
    
$
-
    
$
1,683,056
  
Costs and expenses
    
(1,120,565
)
    
(79,775
)
    
(137,165
)
    
(121,096
)
    
-
      
(1,458,601
)
Corporate expenses
    
-
      
-
      
-
      
-
      
(82,047
)
    
(82,047
)
Depreciation and amortization
    
(19,063
)
    
(7,625
)
    
(18,099
)
    
(52,480
)
    
(2,252
)
    
(99,519
)
Transportation profit (loss)
  
$
91,473
    
$
31,041
    
$
5,713
 
$
(1,039
)
  
$
(84,299
)
  
$
42,889
Costs, expenses and revenue not allocated
                                            
(41,986
)
Net profit for the year
                                          
$
903
                                                 
Total assets by operating segment
  
$
855,037
    
$
480,547
    
$
1,587,204
    
$
460,419
    
$
-
    
$
3,383,207
  
Shared assets
    
-
      
-
      
-
      
-
      
118,177
      
118,177
  
Total assets
  
$
855,037
    
$
480,547
    
$
1,587,204
    
$
460,419
    
$
118,177
    
$
3,501,384
  
                                                 
Total liabilities by operating segment
  
$
531,477
     $ 88,104    
$
534,400
    
$
371,097
    
$
-
    
$
1,525,078
  
Shared liabilities
    
-
      
-
      
-
      
-
      
175,282
      
175,282
  
Total liabilities
  
$
531,477
    
$
88,104
    
$
534,400
    
$
371,097
    
$
175,282
    
$
1,700,360
  
                                                 
Total capital expenditures by segment
  
$
49
    
$
7,997
    
$
148
    
$
17,037
    
$
-
    
$
25,231
  
Shared capital expenditures
    
-
      
-
      
-
      
-
      
-
      
-
  
Total capital expenditures
  
$
49
    
$
7,997
    
$
148
    
$
17,037
    
$
-
    
$
25,231
  
                                     
December 31, 2021
                                    
Revenue
  
$
835,230
    
$
139,226
    
$
223,760
    
$
153,497
    
$
-
    
$
1,351,713
  
Costs and expenses
    
(793,982
)
    
(82,563
)
    
(211,860
)
    
(112,989
)
    
-
      
(1,201,394
)
Corporate expenses
    
-
      
-
      
-
      
-
      
(73,838
)
    
(73,838
)
Depreciation and amortization
    
(17,580
)
    
(7,978
)
    
(30,721
)
    
(56,478
)
    
(4,445
)
    
(117,202
)
Transportation profit (loss)
  
$
23,668
    
$
48,685
    
$
(18,821
)
  
$
(15,970
)
  
$
(78,283
)
  
$
(40,721
)
Costs, expenses and revenue not allocated
                                            
(207,333
)
Net profit for the year
                                          
$
(248,054
)
                                                 
Total assets by operating segment
  
$
777,614
    
$
524,646
    
$
1,759,330
    
$
614,336
    
$
-
    
$
3,675,926
  
Shared assets
    
-
      
-
      
-
      
-
      
36,344
      
36,344
  
Total assets
  
$
777,614
    
$
524,646
    
$
1,759,330
    
$
614,336
    
$
36,344
    
$
3,712,270
  
                                                 
Total liabilities by operating segment
  
$
580,455
    
$
129,823
    
$
598,178
    
$
438,572
    
$
-
    
$
1,747,028
  
Shared liabilities
    
-
      
-
      
-
      
-
      
146,144
      
146,144
  
Total liabilities
  
$
580,455
    
$
129,823
    
$
598,178
    
$
438,572
    
$
146,144
    
$
1,893,172
  
                                                 
Total capital expenditures by segment
  
$
33,869
    
$
29,840
    
$
11,705
    
$
-
    
$
-
    
$
75,468
  
Shared capital expenditures
    
-
      
-
      
-
      
-
      
-
      
-
  
Total capital expenditures
  
$
33,869
    
$
29,840
    
$
11,705
    
$
-
    
$
-
    
$
75,468
  

51
   
 
Maritime
division
    
Maritime infrastructure
division
    
Logistics,
ports and
terminals
division
    
Warehousing
division
    
Other
businesses
and shared
accounts
    
Total
consolidado
  
December 31, 2020
                                    
Revenue
  
$
650,361
    
$
100,864
    
$
313,014
    
$
139,042
    
$
-
    
$
1,203,281
  
Costs and expenses
    
(564,000
)
    
(70,919
)
    
(292,220
)
    
(110,309
)
    
-
      
(1,037,448
)
Corporate expenses
    
-
      
-
      
-
      
-
      
(96,345
)
    
(96,345
)
Depreciation and amortization
    
(30,043
)
    
(11,721
)
    
(37,994
)
    
(45,261
)
    
(16,032
)
    
(141,051
)
Transportation profit (loss)
  
$
56,318
    
$
18,224
    
$
(17,200
)
  
$
(16,528
)
  
$
(112,377
)
  
$
(71,563
)
Costs, expenses and revenue not allocated
                                            
(331,593
)
Net profit for the year
                                          
$
(403,156
)
                                                 
Total assets by operating segment
  
$
588,296
    
$
472,177
    
$
1,915,007
    
$
539,521
    
$
-
    
$
3,515,001
  
Shared assets
    
-
      
-
      
-
      
-
      
515,546
      
515,546
  
Total assets
  
$
588,296
    
$
472,177
    
$
1,915,007
    
$
539,521
    
$
515,546
    
$
4,030,547
  
                                                 
Total liabilities by operating segment
  
$
292,197
    
$
70,901
    
$
639,956
    
$
345,091
    
$
-
    
$
1,348,145
  
Shared liabilities
    
-
      
-
      
-
      
-
      
434,994
      
434,994
  
Total liabilities
  
$
292,197
    
$
70,901
    
$
639,956
    
$
345,091
    
$
434,994
    
$
1,783,139
  
                                                 
Total capital expenditures by segment
  
$
132
    
$
7,476
    
$
5,137
    
$
4,086
    
$
-
    
$
16,864
  
Shared capital expenditures
    
-
      
-
      
-
      
-
      
11,511
      
11,511
  
Total capital expenditures
  
$
132
    
$
7,476
    
$
5,137
    
$
4,086
    
$
11,511
    
$
28,375
  
 
52

23
Employee benefits
 
Expense for employee benefits

The expenses recognized for employee benefits are:
 
   
2022
    
2021
    
2020
  
Salaries, benefits and inherent
  
$
272,092
    
$
235,345
    
$
317,776
  
Pensions – defined benefit plans
    
13,224
      
17,790
      
23,623
  
   
$
285,316
    
$
253,135
    
$
341,399
  
 
The long-term liabilities recognized for pensions and other employee remunerations in the consolidated statement of financial position are comprised as follows:
 
   
2022
    
2021
  
Long-term:
            
Pensions and seniority premium
  
$
69,738
    
$
86,695
  
Termination of employment
    
14,914
      
15,680
  
   
$
84,652
    
$
102,375
  

The short-term liabilities for employee benefits, are included in the line ‘Accounts payable and accrued liabilities’ in the consolidated statements of financial position, which at December 31, 2022 and 2021, amount to $5,189 and $3,116, respectively (see Note 16).

53
The reduction in labor liabilities is derived from the business optimization strategy of Grupo TMM, as of September 2022, a reorganization of the operating structure was carried out, resulting in a personnel restructuring (identification of duplicity and optimization of functions). Additionally, the personnel assigned to the operation of the Maritime Division is now part of the administration of the company itself.

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 2022 and 2021 was $21,785 and $23,584, respectively (see Note 17).
 
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 the Company, 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
 
The Company 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.

54
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:
 
   
2022
    
2021
  
   
Pensions and
seniority
premiums
    
Termination of
employment
    
Pensions and
seniority
premiums
    
Termination of
employment
  
Current service cost
  
$
13,265
    
$
1,383
    
$
(21,158
)
  
$
3,907
  
Interest cost
    
7,538
      
1,145
      
12,371
      
770
  
Net cost for the period
  
$
20,803
    
$
2,528
    
$
(8,787
)
  
$
4,677
  

At December 31, 2022 and 2021, the reserve for pensions and seniority premiums, and also for the termination of employment, is comprised as follows:

 
2022
  
2021
  
 
Pensions and
seniority
premiums
  
Termination of
employment
  
Pensions and
seniority
premiums
  
Termination of
employment
  
Defined benefit obligations
  
$
70,223
    
$
14,914
    
$
87,820
    
$
15,680
  
Plan assets
    
(485
)
    
-
      
(1,125
)
    
-
  
Total reserve
  
$
69,738
    
$
14,914
    
$
86,695
    
$
15,680
  
 
As of December 31, 2022, and 2021, the defined benefit obligations (DBO) for pensions and seniority premiums, and also for the reserve for termination of employment, are comprised as follows:
 
   
2022
    
2021
  
   
Pensions and
seniority
premiums
    
Termination of
employment
    
Pensions and
seniority
premiums
    
Termination of
employment
  
DBO at beginning of period
  
$
87,820
    
$
15,680
    
$
139,763
    
$
13,365
  
Current service cost
    
13,265
      
1,383
      
(21,158
)
    
3,907
  
Interest cost
    
7,538
      
1,145
      
12,371
      
770
  
Benefits paid
    
(1,338
)
    
(322
)
    
(3,878
)
    
(1,905
)
Benefits paid from plan assets
    
(6,674
)
    
(1,497
)
    
(6,044
)
    
-
  
Past service cost
    
(30,388
)
    
(1,475
)
     (33,234 )    
(457
)
DBO at end of period
  
$
70,223
    
$
14,914
    
$
87,820
    
$
15,680
  
 
The plan assets as of December 31, 2022 and 2021 are comprised as follows:
 
   
2022
    
2021
  
Value of the fund at beginning of year
  
$
1,125
    
$
2,931
  
Expected return on assets
    
(741
)
    
(2,026
)
Plan contributions
    
8,171
      
6,044
  
Benefits paid
    
(8,171
)
    
(6,044
)
Interests on plan assets
    
101
      
220
  
Value of the fund at end of year
  
$
485
    
$
1,125
  

55
The changes in the pension plan, seniority premium, and termination of employment plan as of December 31, 2022 and 2021 are as follows:
 
   
2022
    
2021
  
Reserve for obligations at the beginning of the period
  
$
102,375
    
$
150,197
  
Cost for the period
    
23,331
      
(4,110
)
Interest income
    
(101
)
    
(220
)
Contributions to the plan
    
(8,171
)
    
(6,044
)
Benefits paid on pension plan
    
(919
)
    
(5,783
)
Miscellaneous
    
(741
)
    
2,026
  
Actuarial gain or losses
    
(31,122
)
    
(33,691
)
Reserve for obligations at the end of the period
  
$
84,652
    
$
102,375
  
 
The significant actuarial assumptions used for the valuation are:
 
   
2022
    
2021
  
Discount rate
    
10.50
%
    
7.50
%
Salary increase rate
    
4.00
%
    
4.00
%
Inflation rate
    
3.50
%
    
3.50
%
Average working life expectancy
    
14.30
   
14.50
 
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.
 
On December 31, 2022 and 2021, approximately 5% of the Company’s employees work under collective work contracts that are subject to annual salary reviews and biannually for other compensations. As of December 31, 2022, and 2021, Grupo TMM has 769 and 837 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, 2022:
 
   
1.0% increase
    
1.0% decrease
  
Discount rate
            
(Decrease) increase in the defined benefits obligation
    
(1,404
)
    
1,553
  
                 
Salary increase rate
                
Increase (decrease) in the defined benefits obligation
    
642
      
(1,149
)
                 
Average life expectancies
                
Increase (decrease) in the defined benefits obligation
    
(64
)
    
15
  
 
56
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.
 
24
Earnings per share
 
As of December 31, 2022, 2021 and 2020, earnings per share was determined based on the weighted average number of shares outstanding during the year. There are no potentially dilutive instruments outstanding, therefore basic and diluted earnings per share are the same.
 
25
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.
 
As of December 31, 2022 and 2021 non-financial assets measured at fair value are classified in Level 3 of this hierarchy, as described below:

   
2022
    
2021
  
Level 3
            
Buildings
   $
103,815
     $
116,714
  
Land
    
1,147,174
      
1,199,550
  
   
$
1,250,989
    
$
1,316,264
  
 
As of December 31, 2022 and 2021, the values of the Company’s land, buildings and facilities were estimated based on appraisals performed by independent, professionally qualified property valuers.
 
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 fair value measurement is as follows.

Buildings 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, liens, and current use.

57
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.

As of December 31, 2022, and 2021, the reconciliation between the carrying amounts of non-financial assets classified within Level 3 is as follows:
 
   
2022
     2021
  
Balance as of January 1
  
$
1,316,264
    
$
2,220,577
  
Amount recognized in other comprehensive income:
                
Revaluation surplus of vessels
    
-
      
(327,362
)
Amount recognized in statements profit or loss:
                
Loss on the accord and satisfaction
    
(61,973
)
    
(130,000
)
     
(61,973
)
    
(457,362
)
                 
Additions and disposals, net
    
(3,302
)
    
-
  
Transfer to available-for-sale assets
    -       (446,951 )
Balance as of December 31
  
$
1,250,989
    
$
1,316,264
  
 
As of December 31, 2022, and 2021, there were no effects from unrealized gains from fair value measurements.
 

26
Financial instruments risk
 
Risk management objectives and policies
 
Grupo TMM is exposed to various risks in relation to financial instruments. The Company’s financial assets and liabilities by category are summarized in Note 14. The main types of risks are market risk, credit risk and liquidity risk.
 
The Company’s risk management is coordinated at its headquarters, in close cooperation with the board of directors, and focuses on actively securing short to medium-term cash flows by minimizing the exposure to volatile financial markets.
 
The Company does not actively engage in the trading of financial assets for speculative purposes nor does it write options. The most significant financial risk to which the Company is exposed are described below:

Market risk
 
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.
 
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. As of December 31, 2022 and 2021, approximately 75% and 68% of Grupo TMM’s sales are denominated in US dollars, respectively while approximately 40% and 30% of the costs and expenses for both years are denominated in US dollars.
 
As of December 31, 2022 and 2021, 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:
 
   
2022
    
2021
  
   
US dollar
    
Other
currencies
    
US dollar
    
Other
currencies
  
Assets
  
$
662,533
    
$
-
    
$
641,116
    
$
-
  
Liabilities
    
(558,971
)
    
(771
)
    
(725,206
)
    
(353
)
   
$
103,562
 
$
(771
)
  
$
(84,090
)
  
$
(353
)
 
As of December 31, 2022 and 2021, the exchange rate was Ps19.3615 and Ps20.5157 per US dollar, respectively.
 
Sensitivity analysis
 
The following table shows for the years ended December 31, 2022 and 2021, the sensitivity in profit or loss related to the financial assets and liabilities of Grupo TMM and the exchange rate; United States dollar (USD) / peso ‘considering that the rest of the conditions remain the same’, assumes a change of +/- 4.91% for 2022 and +/- 5.25% for 2021 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.

58
If the peso had strengthened or weakened against the USD by 4.91% for 2022 and 5.25% for 2021, this would have had the following impact on the monetary position:
 
   
2022
    
2021
  
   
4.91%
increase in the
exchange rate
    
4.91%
decrease in the
exchange rate
    
5.25%
increase in the
 exchange rate
    
5.25%
decrease in the
exchange rate
  
Assets in US dollars
  
$
34,811
    
$
(34,811
)
  
$
33,686
    
$
(33,686
)
Assets in other currencies
    
-
      
-
      
-
      
-
  
Liabilities in US dollars
    
(29,370
)
    
29,370
      
(38,105
)
    
38,105
  
Liabilities in other currencies
    
(41
)
    
41
      
(19
)
    
19
  
   
$
5,400
    
$
(5,400
)
  
$
(4,438
)
  
$
4,438
  

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.

59
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, 2022 the Company has $57.7 and $9.8 million pesos of debt contracted on fixed and variable rates, respectively. At December 31, 2021, the debt contracted on fixed and variable rates was $200.6 and $48.3 million pesos, respectively.
 
Sensitivity analysis
 
The following table illustrates the sensitivity in profit or loss at December 31, 2022 and 2021 to a reasonably possible change in the interest rates of +/- 1% and +/- 1%, respectively. 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.
 
   
2022
    
2021
  
   
+1%
Variance
    
-1%
Variance
    
+1%
Variance
    
-1%
Variance
  
Profit or loss for the year
  
$
(8,873
)
  
$
8,873
    
$
(7,465
)
  
$
7,465
  

The impact shown in the above sensitivity is considered the same both in the results of profit or loss and in stockholders’ equity.

Concentration of risk
 
For the year ended December 31, 2022, the Company obtained revenues from Helmsley Management, Celanse Operations Mexico and PEMEX Exploración y Producción, representing 27%, 14% and 12%, respectively. None of the remaining customers represent more than 4% of its total revenues. For the year ended December 31, 2021, the Company obtained revenues from TMM DM (related party), and Celanese Operations Mexico and Helmsley Management, representing 13%, 12%, and 10%, respectively. None of the remaining customers represents more than 4% of the total revenues.
 
Credit risk
 
Credit risk is managed on a group basis, based on the credit risk management policies and procedures of Company.
 
Credit risk with respect to cash balances maintained in banks and sight deposits is managed through diversification of bank deposits that are only made with high credited financial institutions. For other receivables, other than trade accounts receivable and contractual assets, the balances are considered immaterial and whose risk of default is null.
 
60
The Company continuously monitors the creditworthiness of customers, based on its experience and customer profiles defined by Management. The Company’s policy is to deal only with creditworthy counterparties. Credit terms range between 30 and 90 days except Pemex that handles credit terms of 180 days. Credit terms negotiated with customers are subject to an internal approval process that considers the experience and profile of the customer. Current credit risk is managed by a periodic review of the accounts receivable aging analysis, together with credit limits per customer.
 
Trade accounts receivable consist of a large number of customers in various industries and geographical areas.
 
Guarantees (collateral)
 
The Company does not maintain any guarantee on its trade accounts receivable. In addition, the Company does not have guarantees related to other financial assets (i.e., other receivables, cash and cash equivalents held in banks).
 
Trade accounts receivable
 
Grupo TMM applies the IFRS 9 simplified model of recognizing lifetime expected credit losses for all trade receivables as these items do not have a significant financing component.
 
In measuring the expected credit losses, the trade receivables have been assessed on a collective basis as they possess shared credit risk characteristics. They have been grouped based on the days past due and also according to the geographical location of customers.
 
Expected credit loss rates are based on the sales payment profile over the last 48 months prior to December 2022 and 2021, respectively, as well as the corresponding historical credit losses during that period. Historical rates are adjusted to reflect current and future macroeconomic factors that affect the customer’s ability to liquidate the unpaid balance.

Trade receivables are written off when there is no reasonable expectation of recovery. Failure to make payments within 180 days from the invoice date and failure to engage with the Company on alternative payment arrangement amongst other is considered indicators of no reasonable expectation of recovery.

However, industry and client’s practices could generate balances with more than 180 days of aging, for which conclusion is that those balances will be collected.
 
Pursuant to the foregoing, the expected credit loss for trade accounts receivable as of December 31, 2022 and 2021 was determined as follows:
 
   
Trade accounts receivable days in arrears
  
   
Current
    
More than
30 days
    
More than
60 days
    
More than
90 days
    
Total
  
As of December 31, 2022
                              
Expected credit loss rate
    
0.0
%
    
0.0
%
    
0.0
%
    
26.3
%
    
-
  
Gross carrying value
  
$
230,010
    
$
3,522
    
$
36,265
    
$
98,893
    
$
368,690
  
Expected credit losses during the lifetime
                            
25,975
      
25,975
  

    Trade accounts receivable days in arrears  
    Current    
More than
30 days
    
More than
60 days
     More than
90 days		     Total  
As of December 31, 2021
                              
Expected credit loss rate
    
0.0
%
    
0.0
%
    
0.0
%
    
27.3
%
    
-
  
Gross carrying value
  
$
207,923
    
$
41,324
    
$
1,816
    
$
74,295
    
$
325,358
  
Expected credit losses during the lifetime
                            
20,293
      
20,293
  
 
61
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. As of December 31, 2022, and 2021, 51% and 47%, respectively, of Grupo TMM’s financial liabilities are due within the next 12 months.
 
As of December 31, 2022, and 2021, the financial liabilities and other 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, 2022
                        
Trade payables
  
$
437,382
    
$
-
    
$
-
    
$
-
  
Accounts payable and accrued expenses
    
-
      
503,874
      
-
      
-
  
Related parties
     -       165,280       -       -  
Leasing liabilities
    
33,569
      
35,360
      
167,284
      
50,862
  
Financial debt
    
10,424
      
24,606
      
28,535
      
3,940
  
   
$
481,375
    
$
729,120
    
$
195,819
    
$
54,802
  
At December 31, 2021                                
Trade payables  
$
437,005
    
$
-
    
$
-
    
$
-
  
Accounts payable and accrued expenses    
-
      
470,068
      
-
      
-
  
Related parties     -       144,966       -       -  
Leasing liabilities    
86,597
      
34,781
      
238,404
      
50,093
  
Financial debt    
19,041
      
38,065
      
54,283
      
11,318
  
At December 31, 2021  
$
542,643
    
$
687,880
    
$
292,687
    
$
61,411
  
 
The above amounts reflect the contractual cash flows without discount, which may differ from the values registered in the liabilities on the reporting date.
 

27
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.
 
62
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.
 
As of December 31, 2022, and 2021, the capital management is summarized as follows:
 
   
2022
    
2021
  
Stockholders’ equity
  
$
1,801,024
    
$
1,819,098
  
Cash and cash equivalents
    
(96,792
)
    
(87,770
)
Stockholders’ equity, net
  
$
1,704,232
    
$
1,731,328
  
                 
Total financial debt
  
$
67,505
    
$
122,707
  
Leasing liabilities
    
287,075
      
409,875
  
Overall financing
  
$
354,580
    
$
532,582
  
                 
Capital-to-overall financing ratio
    
4.81
      
3.25
  
 
28
Commitments and contingencies
 
Commitments
 
a)
Concession fees
 
Pursuant to the concession to operate the cruise and automobile terminal in the Port of Acapulco, Guerrero, the Company must make fixed and variable monthly payments. These payments totaled $3,962 and $7,507, in the years of 2022 and 2021, respectively. During 2022, this concession was no longer renewed (see Note 11).

Contingencies
 
a)
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, 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, 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. The consolidated financial statements did not present any significant claims for payments of loss (RPS) during 2022 and 2021, and up to the authorization date hereof.
 
The Company’s Management and its legal advisors consider the 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.
 
63
b)
Tax liabilities determined on TMM
 
Suit filed by TMM against the rulings handed down on which various tax liabilities were determined for presumed omitted income tax, corresponding to tax year 2005.
 
On November 5, 2012, the appeal for annulment was allowed to proceed before the former Federal Court of Tax and Administrative Justice. That appeal for annulment was forwarded for study and resolution to the Metropolitan Regional First Division of the Federal Court of Tax and Administrative Justice.
 
On January 30, 2018, TMM was notified of the decision whereby the matter was forwarded to the Full Federal Tax Court of Administrative Justice sitting in Mexico City, in August 2022, an amount payable of 1.7 million pesos was determined, which will be paid in 12 installments.

c)
Tax liabilities determined on IDN
 
On March 1, 2022, suit filed by TMM against the rulings handed down on which various tax liabilities were determined for presumed omitted VAT, corresponding to tax year 2021.
 
Grupo TMM believes its legal position is strong and a ruling favorable to the interests of the Company is expected.

d)
Motions for Annulment against various tax provisions
 
During 2017 and 2016, Grupo TMM filed Motions for Annulment with the Federal Court of Administrative Justice against various decisions of the Tax Administration Service (SAT), on the rejection of deductions (tax year 2007), modifications to the Consolidation Regime for controlled companies (tax year 2005), deferred income tax on consolidation (tax year 2010), and the termination of the consolidation regime (tax year 2013), on which rulings have not been handed down by the courts with competent jurisdiction. Grupo TMM believes its legal position is strong and a ruling favorable to the interests of the Company is expected.
 
e)
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.
 
f)
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, an 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.
 
64
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 2022 similarly to transactions between unrelated parties. The Company and its subsidiaries are in the process of completing this study for 2022.
 
g)
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.
 
29
Subsequent events to the reporting date


No adjusting or significant non-adjusting events have occurred between the 31 December reporting date and the date of authorization.

30
Authorization of the consolidated financial statements

The consolidated financial statements of the Company were authorized by Luis Rodolfo Capitanachi Dagdug on April 27, 2023, in his capacity as Director of Administration and Finance, as well as by the Board of Directors on the same date, to be issued and subsequently approved by the General Stockholders’ Meeting, which has the authority to modify the accompanying consolidated financial statements.
 

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