SECURITIES AND EXCHANGE COMMISSION

Form 20-F

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

OR

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

For the fiscal year ended December 31, 2009

OR

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

Commission file number 333-14194

Securities registered or to be registered pursuant to Section 12(g) of the Act:
None

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.

102,024,441 Shares

     Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

o Yes       No þ

     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.

o Yes       No þ

     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 þ No o

     Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes  o  No  o

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

Large accelerated filer o                               Accelerated filer þ                               Non-accelerated filer o

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

          U.S. GAAP o International Financial Reporting Standards as issued by the International Accounting Standards Board þ Other o

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 o Item 18 o

     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 o No þ

     (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 o No o

 

 

TABLE OF CONTENTS

		Page
PART I			2
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS			2
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE			2
ITEM 3. KEY INFORMATION			2
ITEM 4. INFORMATION ON THE COMPANY			19
ITEM 4A. UNRESOLVED STAFF COMMENTS			39
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS			39
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES			61
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS			67
ITEM 8. FINANCIAL INFORMATION			69
ITEM 9. THE OFFER AND LISTING			71
ITEM 10. ADDITIONAL INFORMATION			74
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			86
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES			88
PART II			89
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES			89
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS			89
ITEM 15. CONTROLS AND PROCEDURES			89
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT			91
ITEM 16B. CODE OF ETHICS			91
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES			91
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES			92
ITEM 16E. PURCHASE OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS			92
ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT			92
ITEM 16G. CORPORATE GOVERNANCE			92
PART III			93
ITEM 17. FINANCIAL STATEMENTS			93
ITEM 18. FINANCIAL STATEMENTS			93
ITEM 19. EXHIBITS
EX-1.1: AMENDED AND RESTATED BYLAWS
EX-2.1: SPECIMEN CPO
EX-2.2: AMENDED AND RESTATED DEPOSIT AGREEMENT
EX-2.3: CPO TRUST AGREEMENT
EX-2.4: PUBLIC DEED
EX-6.1: COMPUTATION OF EARNINGS PER SHARE
EX-7.1: COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
EX-8.1: LIST OF SUBSIDIARIES
EX-12.1: CERTIFICATION
EX-12.2: CERTIFICATION
EX-13.1: CERTIFICATION
EX-13.2: CERTIFICATION
EX-1.1
EX-4.1
EX-6.1
EX-7.1
EX-8.1
EX-12.1
EX-12.2
EX-13.1
EX-13.2

 -ii- 

Grupo TMM, S.A.B. and Subsidiaries

Introduction

     In this Annual Report, references to “$,” “US$,” “U.S. dollars,” “Dollars” or “dollars” are to United States Dollars and references to “Ps.,” “Mexican pesos,” “Pesos” or “pesos” are to Mexican Pesos. This Annual Report contains translations of certain Peso amounts into Dollars at specified rates solely for the convenience of the reader. These translations should not be construed as representations that the Peso amounts actually represent such Dollar amounts or could be converted into Dollars 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.”

     As a result of the promulgation of the new securities law in Mexico in June 2006, public companies were transformed by operation of law into Sociedades Anónimas Bursátiles (Public Issuing Corporation). Accordingly, on December 20, 2006, the Company added “Bursátil” to its registered name to comply with the requirements under Mexico’s new securities law, or Ley del Mercado de Valores . As a result, the Company is known as Grupo TMM, Sociedad Anónima Bursátil , or Grupo TMM, S.A.B.

Presentation of Financial Information

     Our financial statements are published in dollars and prepared in conformity with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). We maintain our financial books and records in dollars. However, we keep our tax books and records in Pesos. Sums presented in this Annual Report may not add precisely due to rounding.

Forward-Looking Information

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

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

	§		our ability to generate sufficient cash from operations to meet our obligations, including the ability of our subsidiaries to generate sufficient distributable cash flow and to distribute such cash flow in accordance with our existing agreements with our lenders and strategic partners and applicable law;
	§		Mexican, U.S. and global economic, political and social conditions;
	§		the effect of the North American Free Trade Agreement (“NAFTA”) on the level of U.S.-Mexico trade;
	§		conditions affecting the international shipping and transportation markets;
	§		our ability to reduce corporate overhead costs;
	§		the availability of capital to fund our expansion plans;
	§		our ability to utilize a portion of our current and future tax loss carryforwards (“Net Operating Losses” or “NOLs”);
	§		changes in fuel prices;

	§		changes in legal or regulatory requirements in Mexico or the United States;
	§		market and interest rate fluctuations;
	§		competition in geographic and business areas in which we conduct our operations;
	§		the adverse resolution of litigation and other contingencies;
	§		the ability of management to manage growth and successfully compete in new businesses; and
	§		the ability of the Company to repay, restructure or refinance its indebtedness.

     Readers are urged to read this entire Annual Report including, but not limited to, the section entitled “Risk Factors,” and carefully consider the risks, uncertainties and other factors that affect our business. The information contained in this Annual Report is subject to change without notice. Readers should review future reports filed by us with the U.S. Securities and Exchange Commission (the “SEC”). 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.

Average Shares Outstanding

     Income per Share is calculated based on the average number of Shares outstanding in each relevant year. The average number of Shares outstanding in each of 2005 and 2006 was 56,963,137, in 2007 was 56,962,041, in 2008 was 56,189,025 and in 2009 was 56,893,794. See Item 4. “Information on the Company — History and Development of the Company” and Item 9. “The Offer and Listing — Share Repurchase Program.”

Dividends

     At shareholders’ meetings, shareholders have the ability, at their discretion, to approve dividends from time to time. At the ordinary shareholders’ meeting held on April 24, 1997, the shareholders of our predecessor, Transportación Maritima Mexicana, S.A. de C.V. (“TMM”), declared a dividend (which has not yet been paid) equivalent to $0.17 per share, subject to our outstanding debt obligations and availability of funds. At the shareholders’ meeting where such dividend was declared, the shareholders delegated to the Board of Directors the authority to determine when the dividend may be paid. No other dividend has been declared since 1997.

     Dividends paid that are charged to previously taxed accumulated earnings are not subject to income tax. Dividends paid in excess of the net tax profit account (CUFIN) amounting to $62.4 million ($814.6 million pesos) as of December 31, 2009, are subject to a tax equivalent to 38.89% on payment. The tax is payable by the Company and may be credited against its income tax in the same year or the following two years.

Exchange Rates

     We maintain our financial records in Dollars. However, we keep our tax records in Pesos. We record in our financial records the Dollar equivalent of the actual Peso charges for taxes at the time incurred using the prevailing exchange rate. In 2009, approximately 65% of our net consolidated revenues and 35% of our operating costs and expenses were generated or incurred in Dollars. The remainder of our net consolidated revenues and operating expenses were denominated in Pesos.

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

     On June 22, 2010, the Noon Buying Rate was Ps. 12.4604 = $1.00 (equivalent to Ps. 1.00 = $0.0803).

Risk Factors

Risks Relating to our Indebtedness

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

     As of December 31, 2009, Grupo TMM’s total debt amounted to $784.4 million, which includes $679.3 million of our Mexican Peso-Denominated Trust Certificates Program (the “Trust Certificates Program”), $19.9 million under our securitization facility with Deutsche Bank AG (the “Securitization Facility”), and $85.2 million of bank debt owed to several different banks; of this debt, $23.9 million is short-term debt and $760.5 million is long-term debt. As of March 31, 2010, Grupo TMM’s total debt amounted to $826.0 million, which includes $725.9 million of our Trust Certificates Program, $17.7 million under the Securitization Facility and $82.4 million of bank debt owed to several different banks; of this debt, $30.2 million is short-term debt and $795.8 million is long-term debt. Under IFRS, transaction costs in connection with financings are required to be accounted for as debt.

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

•		limiting cash flow available for capital expenditures, acquisitions, working capital and other general corporate purposes because a substantial portion of our cash flow from operations must be dedicated to servicing debt;
•		increasing our vulnerability to a downturn in economic or industry conditions;
•		exposing us to risks inherent in interest rate fluctuations because future borrowings may be at interest rates that are higher than current rates, which could result in higher interest expenses;
•		limiting our flexibility in planning for, or reacting to, competitive and other changes in our business;
•		placing us at a competitive disadvantage compared to our competitors that have less debt and greater operating and financing flexibility than we do;
•		limiting our ability to engage in activities that may be in our long-term best interest; and
•		limiting our ability to borrow additional money to fund our working capital and capital expenditures or to refinance our existing indebtedness, or to enable us to fund the acquisitions contemplated in our business plan.

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

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

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

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

operating income, including the funds necessary to service its indebtedness. In addition, we have pledged the stock of a subsidiary and sales receivables to secure the repayment of our Securitization Facility.

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

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

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

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

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

•		incur additional indebtedness;
•		create or suffer to exist liens;
•		make certain restricted payments, including the payment of dividends;
•		engage in certain transactions with shareholders and affiliates;
•		use assets as security in other transactions;
•		issue guarantees to third parties; and
•		engage in certain mergers and consolidations or in sale-leaseback transactions.

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

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

     As of December 31, 2008 and 2009, and May 31, 2010, we were in compliance with all of our covenants under these facilities.

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

     As of March 31, 2010, approximately 89% of our debt was denominated in pesos. As of the date of this Annual Report, we do not generate sufficient revenue in pesos from our operations to service all of our peso-denominated debt. Consequently, we have to use revenues generated in dollars to service our peso-denominated debt. A devaluation or depreciation in the value of the dollar, compared to the Mexican peso, could adversely affect our ability to service our debt. During 2009, the Mexican peso appreciated approximately 5.3% against the dollar.

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

Risks Relating to our Business

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

     Under Mexican law, when a company has accumulated losses in excess of two-thirds of its capital stock, any third party with legal interest may request the corresponding judicial authorities to declare the dissolution of the company. In our audited report for the periods ended December 31, 2006, 2007, 2008 and 2009, our independent auditors indicated that a substantial doubt existed as to our continuation as a going concern because we had sustained substantial losses from continuing operations during those periods. For the period ended December 31, 2008, we reported a profit from our continuing operations.

          Although Grupo TMM improved its operating income in 2005, 2006 and 2008, it incurred a net loss in 2006, 2007 and 2009. Our ability to continue as a going concern is subject to our ability to generate sufficient profits and/or obtain necessary funding from outside sources and there can be no assurance that we will be able to generate such profits or obtain such funding.

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

     As of December 31, 2009, we had three product tanker vessels on bareboat charter and one vessel on time charter to PEMEX Refinación (“PER”), and 25 offshore vessels on time charter to Pemex Exploración y Producción (“PEP”). PER and PEP are subsidiaries of Petroleos Mexicanos, the national oil company of Mexico (“PEMEX”). In addition, in 2009 we entered into five offshore vessel chartering agreements with private operators with time periods ranging from one to two years. In the event that our time charter arrangements are terminated or expire without being renewed, we will be required to seek new bareboat or time charter arrangements for these vessels. We cannot be sure that bareboat or time charters will be available for the vessels following termination or expiration, or that bareboat or time charter rates in effect at the time of such termination or expiration will be comparable to those in effect under the existing time charters or in the present market. In the event that bareboat or time charters are not available on terms acceptable to us, we may use those vessels in the spot market. Because charter rates in the spot market are subject to greater fluctuation than longer term bareboat or time charter rates, any failure to maintain existing, or enter into comparable, charter arrangements could adversely affect our operating results.

Our results from operations are dependent on fuel expenses.

     Our logistics and parcel tanker operations consume significant amounts of energy and fuel, the cost of which has significantly increased worldwide in recent years. With respect to our other operations our customers pay for the fuel consumption. We currently meet, and expect to continue to meet, our fuel requirements almost exclusively

through purchases at market prices from PEMEX, a government-owned entity exclusively responsible for the distribution and sale of diesel fuel, maritime diesel oil and bunker fuel in Mexico. The price of diesel fuel used by our trucks is established by the Mexican Government based on domestic policies and does not necessarily reflect the increase of prices in international markets; however, if we are unable to acquire diesel fuel from PEMEX on acceptable terms, our operations could be adversely affected. In addition, instability caused by imbalances in the worldwide supply and demand of oil may result in continuing increases in fuel prices. Our fuel expense represents a significant portion of our operating expenses in our logistics and parcel tanker operations, and there may be increases in the price of fuel that cannot be hedged or transferred to the final user of our transportation services. We cannot assure you that our operations would not be materially adversely affected in the future if prevailing conditions remain for a long period of time or if energy and fuel costs continue to increase.

Downturns in the U.S. economy or in trade between the United States and Mexico would likely have adverse effects on our business and results of operations.

     The level and timing of our business activity is heavily dependent upon the level of U.S.-Mexican trade and the effects of NAFTA on such trade. Downturns in the U.S. or Mexican economy or in trade between the United States and Mexico would likely have adverse effects on our business and results of operations. Our logistics business and the transportation of products traded between Mexico and the United States depend on the U.S. and Mexican markets for these products, the relative position of Mexico and the United States in these markets at any given time and tariffs or other barriers to trade. The present financial and economic downturn in the international markets has negatively affected our volumes and as a consequence is negatively affecting our results of operations and our ability to meet our debt service obligations as described above.

We may be unable to successfully expand our business.

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

•		the continued identification, evaluation and participation in niche markets;
•		the identification of joint venture opportunities or acquisition candidates;
•		our ability to enter into acquisitions on favorable terms;
•		our ability to finance any expansion of our business;
•		our ability to hire and train qualified personnel, and to maintain our existing managerial base;
•		the successful integration of any acquired businesses with our existing operations; and
•		our ability to manage expansion effectively and to obtain required financing.

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

Significant competition could adversely affect our future financial performance.

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

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

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

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

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

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

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

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

•		prevailing economic conditions in the market;
•		a substantial or extended decline in world trade;
•		increases in the supply of vessel capacity;
•		prevailing charter rates; and
•		the cost of retrofitting or modifying existing ships, as a result of technological advances in vessel design or equipment, changes in applicable environmental or other regulations or standards, or otherwise.

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

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

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

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

•		supply and demand for products suitable for shipping by our vessels;
•		changes in global production of products transported by our vessels;
•		the distance cargo products are to be moved by sea;
•		the globalization of manufacturing;
•		global and regional economic and political conditions;
•		changes in seaborne and other transportation patterns, including changes in the distances over which cargoes are transported;
•		environmental and other regulatory developments;
•		currency exchange rates; and
•		weather.
		The factors that influence the supply of our vessels’ capacity include:
•		the number of newbuilding deliveries;
•		the scrapping rate of older vessels similar to our vessels;
•		the price of steel and other raw materials;
•		changes in environmental and other regulations that may limit the useful life of vessels;
•		the number of vessels that are out of service; and
•		port congestion.

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

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

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

•		shipping industry relationships and reputation for customer service and safety;
•		shipping experience and quality of ship operations (including cost effectiveness);
•		quality and experience of seafaring crew;
•		the ability to finance vessels at competitive rates and financial stability in general;
•		relationships with shipyards and the ability to get suitable berths;
•		relationships with ship owners and the ability to obtain suitable second-hand vessels;
•		construction management experience, including the ability to obtain on-time delivery of new ships according to customer specifications;
•		willingness to accept operational risks pursuant to the charter, such as allowing termination of the charter for force majeure events, among others; and
•		competitiveness of the bid in terms of overall price.

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

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

     In general, the cost of maintaining a vessel in good operating condition increases with the age of the vessel. As our fleet ages, we will incur increased costs. Older vessels are typically less fuel efficient and more costly to maintain than more recently constructed vessels. Cargo insurance rates also increase with the age of a vessel, making older vessels less desirable to charterers. Governmental regulations and safety or other equipment standards related to the age of a vessel may also require expenditures for alterations or the addition of new equipment to our vessels and may restrict the type of activities in which our vessels may engage. Although our current fleet of 46 vessels had an average age of approximately 11.8 years as of April 30, 2010, we cannot assure you that, as our vessels age, market conditions will justify such expenditures or will enable us to profitably operate our vessels during the remainder of their expected useful lives.

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

     The operation of vessels, trucks and other machinery relating to the shipping and cargo business involves an inherent risk of catastrophic marine or land disaster, mechanical failure, collisions, property losses to vessels or

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

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

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

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

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

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

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

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

     Our international parcel tanker transportation services rendered in the Gulf of Mexico and our coastwise product tanker business rendered in both the Gulf of Mexico and in the Pacific Ocean provide services to transport

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

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

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

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

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

     As of March 31, 2010, we had 5,882 employees, approximately 76% of whom were unionized. The compensation terms of the labor agreement with these employees are subject to renegotiation on an annual basis and all other terms are renegotiated every two years. If we are not able to negotiate these provisions favorably, strikes, boycotts or other disruptions could occur, and these potential disruptions could have a material adverse effect on our financial condition and results of operations and on our ability to meet our payment obligations under our financing arrangements.

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

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

Our customers may take actions that may reduce our revenues.

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

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

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

Risks Relating to Mexico

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

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

•		significant governmental influence over local economies;
•		substantial fluctuations in economic growth;
•		high levels of inflation;
•		changes in currency values;
•		exchange controls or restrictions on expatriation of earnings;
•		high domestic interest rates;
•		wage and price controls;

•		changes in governmental economic or tax policies;
•		imposition of trade barriers;
•		unexpected changes in regulation; and
•		overall political, social and economic instability.

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

     Mexico has historically experienced uneven periods of economic growth. Mexico’s gross domestic product (“GDP”) increased 2.8%, 4.8%, 3.3% and 1.3% in 2005, 2006, 2007 and 2008, respectively and decreased by 6.5% in 2009. GDP growth was slightly higher than the Mexico Consensus Board ⁽¹⁾ estimated for 2009; however, the Mexico Consensus Board estimates that GDP in Mexico is expected to fall by approximately 7.4% in 2010, while inflation is expected to be less than 4.5%. We cannot assure you that these estimates will prove to be accurate. The Mexican Government has exercised, and continues to exercise, significant influence over the Mexican economy. Accordingly, Mexican governmental actions concerning the economy and state-owned enterprises could have a significant impact on Mexican private sector entities in general and on us in particular, as well as on market conditions, prices and returns on Mexican securities, including our securities.

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

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

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

High interest rates in Mexico could increase our financing costs.

     Mexico historically has had, and may continue to have, high real and nominal interest rates. The interest rates on 28-day Mexican government treasury securities averaged 9.20%, 7.19%, 7.43%, 7.69% and 5.43% in 2005, 2006, 2007, 2008 and 2009 respectively, and for the five-month period ended May 31, 2010, it averaged 4.72%.

     A total of $679.3 million of our debt represented by our Trust Certificates Program was incurred in Mexican Pesos at the Mexican interbank rate, TIIE, plus 2.25% for the first tranche, 1.95% for the second, and 2.19% for the third. The Company has hedged the risk of the three tranches at a maximum rate of 11.5% for the next three years.

As of December 31, 2009, the 28-dayTIIE rate was 4.9150%, as of March 31, 2010 the rate was 4.9150%, and as of May 31, 2010 such rate was 4.9650%. As of June 23, 2010, the rate was 4.9341%. The variable rate portion of the debt under the three tranches of the Trust Certificates Program, which totals approximately $679.0 million ($8.8572 billion pesos), has an interest rate cap of 11.50% per annum.

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

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

     Our operations, including demand for our products or services and the price of our floating rate debt, have also historically been adversely affected by increases in interest rates in the United States and elsewhere. Particularly, U.S. interest rates reached their highest levels for the past three years during 2007. Although the Federal Reserve Bank implemented “measured” decreases in 2008, and interest rates have remained low due to the global economic crisis, as interest rates rise, the interest payments on our floating rate debt and the cost of refinancing our financing arrangements at maturity will rise as well.

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

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

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

Political events in Mexico could affect Mexican economic policy and our business, financial condition and results of operations.

     Although as of April 2010 Mexico’s daily production statistics indicate there has been no change compared to 2009, production has fallen by more than 500,000 barrels per day compared to 2007 levels and could fall by another 50% in the coming years. Currently 40% of the total amount of gasoline used for Mexico’s domestic consumption is imported. Specialists have concluded that if investments are not made to further PEMEX’s technological capabilities, its oil production could decline considerably, which could weaken the financial position of the Mexican Government.

     Multi-party rule is still relatively new in Mexico and could result in economic or political conditions that could have a negative impact on the Mexican economy that would materially and adversely affect our operations. Finally, the Mexican economy in the past has suffered balance of payment deficits and shortages in foreign exchange reserves, and we cannot assure you that these deficits and shortages will not occur in the future.

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

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

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

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

Risks Relating to Ownership of our Equity

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

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

The Company is controlled by the Serrano Segovia family.

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

A change in control may adversely affect us.

     A portion of the Shares and ADSs of the Company held by the Serrano Segovia family is currently pledged to secure indebtedness of the Serrano Segovia family and entities controlled by them and may from time to time in the future be pledged to secure obligations of other of their affiliates. A foreclosure upon any such Shares held by the Serrano Segovia family could result in a change of control under the various debt instruments of the Company and

its subsidiaries. Such debt instruments provide that certain change of control events with respect to us will constitute a default and that the relevant lenders may require us to prepay our debt obligations including accrued and unpaid interest, if any, to the date of such repayment. If such a default occurs, we cannot assure you that we will have enough funds to repay our debt.

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

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

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

If we cannot meet the New York Stock Exchange (“NYSE”) continued listing requirements, the NYSE may delist our ADSs.

     Our ADSs are currently listed on the NYSE. The NYSE requires us to maintain an average closing price of our ADSs of $1.00 or higher over 30 consecutive trading days. On October 17, 2008, we received notice from the NYSE that the price of our ADSs was below listing requirements. As of such date, we had a six-month period to cure this deficiency so we could remain listed on the NYSE. On February 26, 2009, however, the NYSE temporarily suspended the application of its continued listing criteria relating to a minimum average trading price of $1.00 until June 30, 2009 and later extended the period of the suspension until July 31, 2009. Companies trading below the $1.00 minimum price criteria that did not regain compliance during the suspension period recommenced their compliance period upon reinstitution of the stock price continued listing standard. In order to comply with this NYSE listing standard, on August 24, 2009 we changed our ADS ratio from one ADS for every one CPO to one ADS for every five CPOs. For our ADS holders, the ratio change had the same effect as a one-for-five reverse stock split and thereby increased the listing price of our ADSs. As of the close of business on June 18, 2010, the closing price of our ADSs was $2.50.

     We are currently in compliance with the NYSE criteria for continued listing. However, if we are unable to maintain compliance with the NYSE criteria for continued listing, our ADSs would be subject to delisting. A delisting of our ADSs could negatively impact us by, among other things, reducing the liquidity and market price of our ADSs; reducing the number of investors willing to hold or acquire our ADSs, which could negatively impact our ability to raise equity financing; decreasing the amount of news and analyst coverage for the Company; and limiting our ability to issue additional securities or obtain additional financing in the future.

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

     In December 2001, the boards of directors of TMM and Grupo TMM unanimously approved a corporate reorganization and merger in which TMM was merged with and into Grupo TMM. After the merger, each shareholder of TMM continued to own the same relative economic interest in Grupo TMM as the shareholder owned in TMM prior to the merger. In preparation for the merger, the shareholders of Grupo TMM approved the division ( escisión) of Grupo TMM into two companies, Grupo TMM and a newly formed corporation, Promotora Servia, S.A. de C.V. (“Promotora Servia”). Under the terms of the escisión , Grupo TMM transferred all of its assets, rights and privileges (other than its interest in TMM) and all of its liabilities to Promotora Servia. The transfer of assets to Promotora Servia was made without recourse and without representation or warranty of any kind, and all of Grupo TMM’s creditors expressly and irrevocably consented to the transfer of the liabilities to Promotora Servia.

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

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

     Today, we are a fixed capital corporation listed on the Mexican Stock Exchange (Bolsa Mexicana de Valores) incorporated under the Ley General de Sociedades Mercantiles for a term of 99 years. We are headquartered at Avenida de la Cúspide, No. 4755, Colonia Parques del Pedregal, 14010 México City, D.F., México, and our telephone number is +52-55-5629-8866. Our agent for service of process in the United States is CT Corporation, located at 111 Eighth Avenue, New York, New York 10011 and its telephone number is (212) 894-8700. Grupo TMM’s Internet website address is www.grupotmm.com. The information on Grupo TMM’s website is not incorporated into this Annual Report.

Business Overview

      General

     We believe we are one of the largest integrated logistics and transportation companies in Mexico providing specialized maritime services and integrated logistics services, including trucking services and ports and terminals management services, to premium clients throughout Mexico. Our goal is to provide full intermodal logistics and “door-to-door” services to our customers by being a source of trucking, port and ship services for clients transporting goods across land and water in the NAFTA corridor.

      Maritime Operations. Our Maritime Operations division provides maritime transportation services, including offshore vessels that provide transportation and other services to the Mexican offshore oil industry, tankers that transport petroleum products within Mexican waters, parcel tankers that transport liquid chemical and vegetable oil cargos from and to the United States and Mexico, and tugboats that provide towing services at the port of Manzanillo, Mexico. We provide these services through our fleet of 46 vessels, which includes product and chemical tankers, harbor tugs and a variety of offshore supply vessels.

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

      Logistics Operations. We provide dedicated trucking services to major manufacturers, including automobile plants, and retailers with facilities and operations throughout Mexico. We offer full-service logistical facilities in major industrial cities and railroad hubs throughout Mexico, including Aguascalientes, Toluca, Puebla, Veracruz, Nuevo Laredo, Cuernavaca, Mexico City, Monterrey, Manzanillo, Ensenada, and Altamira. The services we provide include consulting, analytical and logistics outsourcing, which encompass the management of inbound movement of parts to manufacturing plants consistent with just-in-time inventory planning practices; logistics network (order-cycle) analysis; logistics information process design; trucking, intermodal transport and auto haulage services; warehousing and bonded warehousing facility management; supply chain and logistics management; product handling and repackaging; local pre-assembly; maintenance and repair of containers in principal Mexican ports and cities and inbound and outbound distribution using truck transport.

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

     All of these revenues are earned in Mexico except for a portion of revenues from our Chemical Tankers and Product Tankers.

Recent Developments

      Mexican Peso-Denominated Trust Certificates Program

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

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

      Purchase of Two Tugboats

     On February 12, 2007, we entered into an agreement for the purchase of two newbuilding tugboats with Med Yilmaz Shipyard in Turkey for an aggregate purchase price of $14 million. In January 2008 we entered into a line of credit with Natixis to finance 85% of the total purchase price for the acquisition of these tugboats. On March 20, 2008 both vessels commenced operations in our tugboat services division in the Port of Manzanillo, Mexico.

      Vessels Purchased through our Trust Certificates Program

      PSV Isla Monserrat . On October 27, 2007, we entered into an agreement for the purchase from DESS PSV Ltd of a Platform Supply Vessel (“PSV”) Isla Monserrat (which was built in 2007 and has an average Brake Horse Power (“BHP”) of 5,400). This PSV was delivered to Grupo TMM in January 2008 and is currently operating in the Gulf of Mexico. The purchase of this vessel was financed by the second tranche of our Trust Certificates Program.

      AHTS Isla Leon (ex Sea Wolverine) . On April 3, 2008, we entered into an agreement for the purchase from DESS Ciprus Ltd of an Anchor Handling Tug Supply vessel (“AHTS”) Sea Wolverine (which was built in 2008 and has an average BHP of 6,500). This AHTS was delivered in June 2008. We added this AHTS to our offshore fleet in the Gulf of Mexico. The purchase of this vessel was financed by the second tranche of our Trust Certificates Program.

      Two AHT Ss. On April 3, 2007, we entered into an agreement for the purchase from Rising Flag Worldwide Ltd of two new AHTSs (with a BHP of 6,800). The first AHTS (Isla Santa Cruz) was delivered on August 15, 2008. We were forced to cancel the second AHTS due to a delay of the delivery by the shipyard. The Isla Santa Cruz was added to our offshore fleet in the Gulf of Mexico. The purchase of this vessel was financed by the second tranche of our Trust Certificates Program.

      Three Mini PSVs . Isla Blanca, Isla Ciari and Isla Janitzio . On March 7, 2007, we entered into an agreement for the purchase from Adriatic Marine LLC of three mini PSVs. These mini PSVs were delivered in July 2008, November 2008 and January 2009, respectively. We added these vessels to our offshore fleet in the Gulf of Mexico. The purchase of one of the vessels was financed by the second tranche of the Trust Certificates Program and the purchase of the other two vessels was financed through the third tranche of our Trust Certificates Program.

      Two FSIV . Isla San Gabriel and Isla San Luis. On November 21, 2007, we entered into an agreement for the construction by Horizon Shipbuilding of two Fast Support Intervention Vessels (“FSIV”). These FSIV were delivered in August and October 2009, respectively . We added these vessels to our offshore fleet in the Gulf of Mexico. The acquisition of these vessels was financed through the third tranche of our Trust Certificates Program.

      FPSO Vessel ECO III. On July 21, 2008, we acquired a newly constructed 10,000 Dead Weight Tonnage (“DWT”) tanker vessel that was converted into a well test service vessel receiving an FPSO “Floating Production Storage and Offloading System” class notation. This vessel is equipped with a Dynamic Positioning System (DP2) that allows the vessel to position itself near the oil well platforms and with the installed processing plant can receive, store and process fluids and gases during the completion, testing, and repair of oil wells. Today this vessel is part of our offshore fleet in the Gulf of Mexico, having commenced operations in February 2010 under a long-term charter contract with a third-party operator. The purchase of this vessel was financed by the third tranche of our Trust Certificates Program.

      Mini PSV . Isla San Ignacio . On February 19, 2009, we entered into an agreement for the purchase from Adriatic Marine LLC of one mini PSV. This vessel was added to our offshore fleet in the Gulf of Mexico in July 2009. The purchase of this vessel was financed by the third tranche of the Trust Certificates Program.

      Purchase of Auto Haulage Business Assets

     On July 19, 2007, we purchased certain auto haulage operating assets from Auto Convoy Mexicano, S.A. de C.V., a Mexican auto hauling company, and certain other parties for an aggregate purchase price of Ps. 429 million. These auto haulage operating assets were incorporated into our logistics division and commenced operations in September 2007.

      Sale of Two Vessels

     As part of the Company’s plan to modernize its fleet, during April 2009 the Company sold two of its oldest offshore vessels: the AHTS Isla Ballena (1983); and the Supply Isla Coronado (1982).

      SSA Claims

     In July 2006 and February 2007, Grupo TMM received claim notices from SSA relating to certain contingencies affecting SSA (formerly TMM Puertos y Terminales, S.A. de C.V. or TMMPyT) in connection with the Amended and Restated Master Agreement dated July 21, 2001.

     On June 14, 2007, we were officially notified by the International Chamber of Comerce (“ICC”) of arbitration proceedings with respect to one of the claims, which related to payments made by SSA to its employees under Mexico’s compulsory profit sharing regulations. SSA also filed a tax proceeding with the tax authorities in Mexico which related to the same payments made by SSA to its employees under Mexico’s compulsory profit sharing regulations. We have not been notified of any proceedings with respect to the second claim.

     On March 6, 2009, the Arbitral Tribunal resolved the claim submitted to arbitration, and ordered Grupo TMM to pay SSA Ps. 30,837,071, plus interest at a 6% annual rate from November 8, 2006.

     In connection with the order, on May 15, 2009, Grupo TMM and SSA agreed that if the tax proceeding results in a finding that the amount paid by SSA to its employees was inappropriate or not required, Grupo TMM will not be required to pay the arbitration award to SSA. In addition, on May 15, 2009, Grupo TMM and SSA signed an agreement in which both companies agreed to negotiate the terms of a possible transaction to be carried out in Tuxpan, Veracruz as an alternate method of satisfying the arbitration award. If an agreement between Grupo TMM and SSA is not reached by the end of this year, and if SSA receives an unfavorable ruling in the tax proceeding, then Grupo TMM has agreed to pay SSA 50% of its distributions in API Acapulco (the joint venture with SSA) until the arbitration award is paid in full.

     In June 2010, SSA obtained a favorable ruling in its tax proceeding. In the event the ruling is confirmed, Grupo TMM will not be required to pay the arbitration award to SSA.

      Restructuring of Receivables Securitization Facility and Associated Capital Increase

     In December of 2009, Grupo TMM restructured its Securitization Facility. The Facility was created in 2006 by Grupo TMM and several of its subsidiaries. Under the Facility, a Trust (the “Trust”) issued a series of trust certificates (the “Certificates”) backed by receivables assigned to the Trust by certain of Grupo TMM’s subsidiaries.

     As part of the restructuring of the Securitization Facility, a company affiliated with Grupo TMM, Vex Asesores Corporativos, S.A.P.I. de C.V. (“VEX”), purchased Certificates with a face value of approximately $86.5 million (the “Purchased Certificates”) from Deutsche Bank AG London.

     As described below, pursuant to a separate agreement between VEX and Grupo TMM, all but $6 million of the Purchased Certificates were subsequently cancelled and were exchanged for cash, equity in Grupo TMM, and other consideration. The transaction with VEX was approved by the Board of Directors of Grupo TMM, on the basis of a prior approval by the Auditing and Corporate Governance Committee, which received an independent expert’s fairness opinion on the consideration and other terms and conditions of the transaction.

     In addition, Deutsche Bank AG London, as part of the restructuring, agreed to certain amendments to the Facility. Among other things, Deutsche Bank AG London agreed to release the Logistcs Division’s subsidiaries from the Facility. As a result, receivables generated by those subsidiaries will no longer be assigned to the Trust. The cash required for debt service in 2010 is expected to be reduced by approximately $37.9 million.

     Pursuant to a resolution adopted at the Extraordinary General Shareholders’ Meeting held on December 15, 2009 and with the authorization of the Comisión Nacional Bancaria y de Valores , on January 6, 2010, VEX acquired 46,797,404 Shares for an aggregate subscription price of $41,181,715.53, or $0.88 per Share (equivalent to $4.40 per ADS). The subscription price per Share was 10% higher than the ADS closing price on January 5, 2010. VEX paid the subscription price for the Shares as part of the consideration for its sale to Grupo TMM of the Purchased Certificates. The remainder of the consideration VEX received for the Purchased Certificates consisted of $27,103,065.52 in cash, a five-year promissory note from Grupo TMM in the principal amount of $12,250,000.00, and subordinated trust certificates issued under the Securitization Facility with a face amount of

$6,000,000.00. On May 7, 2010, VEX distributed 18,437,440 of the 46,797,404 Shares it acquired to various investors who participated in VEX’s purchase of the Purchased Certificates from Deutsche Bank AG London.

     As a result of the above, the subscribed and paid capital increase totaled Ps. 532,174,837 and the number of outstanding Shares of Grupo TMM increased to 102,024,441 Shares. No shareholder exercised its preferential right to subscribe to the capital increase during the designated period. The portion of the issued capital stock that was not subscribed was automatically cancelled pursuant to the resolution adopted at the Shareholders’ Meeting.

      Sale of Investment in Grupo Seglo

     On April 20, 2010, Grupo TMM agreed to sell its stockholdings in the companies that comprised Grupo Seglo to its partner for $4.9 million (Ps 60 million) (See Note 1 to the accompanying Audited Consolidated Financial Statements contained elsewhere herein).

      The Mexican Market

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

Source: Banco de Mexico (BANXICO).

      Discontinued Operations

     On September 21, 2007, we finalized the sale of Grupo TMM’s interest in Grupo Transportación Ferroviaria Mexicana, S.A. de C.V. (“Grupo TFM”) to Kansas City Southern (“KCS”), which comprised all of our remaining railroad operations. As consideration for this sale, we received $289.1 million in cash (including $54.1 million paid on September 21, 2007 under the terms of a settlement agreement to fully and finally end all disputes between KCS and Grupo TMM). Previously we had received in connection with the sale, 19,494,469 shares of KCS common stock which were sold in December 2005 and December 2006 for a total of approximately $437.8 million. See “— Recent Developments — Disposition of Grupo TMM’s interest in Grupo TFM to KCS.”

     The results of our railroad operations that were sold in April 2005 are discussed in this Annual Report in the “Discontinued Operations” section. See Item 5. “Operating and Financial Review and Prospects — Results of Operations — Discontinued Operations”.

      NYSE Continued Listing Standards; Reverse Split of ADSs

     On October 17, 2008, we received an official notice from the NYSE informing us that we were not in compliance with applicable NYSE continued listing standards. As of such date, we had six months in which to reestablish compliance and remain listed on the NYSE. On February 26, 2009, the NYSE suspended until June 30, 2009, later extending the date to July 31, 2009, certain of the listing requirements which we had failed to meet. In order to comply with this NYSE listing standard, on August 24, 2009 we changed our ADS ratio from one ADS for every one CPO to one ADS for every five CPOs. For our ADS holders, the ratio change had the same effect as a one-for-five reverse stock split and thereby increased the listing price of our ADSs. As of the close of business on June 18, 2010, the closing price of our ADSs was $2.50. See Item 9. “The Offer and Listing — The NYSE Continued Listing Standards; Reverse Split of ADSs.”

Business Strategy

     Over the past few years, we have made significant changes to our business and shifted our strategy to focus on “door-to-door” service to our customers by being a source of trucking, port and ship services for clients transporting goods across land and water in the NAFTA Corridor. Set forth below is a description of the elements of our strategy.

      Expansion of our Maritime Operations

     We plan to expand our Maritime Operations by: (i) increasing cabotage services with medium and long-term contracts through the seniority granted to Mexican ship-owners under the Mexican Navigation Law (Mexican flagged vessels have a preference to perform cabotage in Mexican waters), (ii) satisfying demand for exploration and distribution services, which we believe are increasing within Mexico and (iii) meeting market requirements of new generation vessels with higher-rated and deeper-water capabilities. Considering the urgent need of PEMEX to increase its oil and gas reserves, we expect an increasing demand for exploration and distribution services within Mexico which we will try to service through medium and long-term contracts and meeting market requirements of new generation vessels with higher-rated and deeper-water capabilities.

     During 2006 we (i) purchased eleven offshore vessels from Seacor which now carry the Mexican flag, (ii) purchased the minority interest held by Seacor in our offshore business. and (iii) purchased the minority interest held by Smit in our harbor towing business.

     During 2007, and as part of our business plan, we (i) entered into an agreement for the purchase of two newbuilding tugboats that were delivered in January 2008, (ii) entered into an agreement for the purchase of the PSV Isla Monserrat that was delivered in January 2008, (iii) entered into an agreement for the purchase of the AHTS Isla Leon (ex-Sea Wolverine) that was delivered in June 2008, (iv) entered into an agreement for the purchase of two AHTSs, one of which was delivered in August 2008 and the second of which was cancelled due to a delay of the delivery by the shipyard, (v) entered into an agreement for the construction of two FSIV that were delivered in August and October 2009, respectively and (vi) exercised purchase options for the chemical tankers M/T “Maya” and the M/T “Olmeca”.

     During 2008 we (i) entered into an agreement for the purchase of a small tanker with the intention of converting it into a Well Testing Vessel which was delivered on July 21, 2008, (ii) entered into an agreement for the acquisition of three product tankers that were delivered in July, September and October 2008, respectively.

     During 2009 we entered into an agreement for the purchase of a mini-supply vessel which was delivered in July 2009. The Company has not entered into any new purchase agreements during 2010.

     In addition, we are developing our product tanker business and since July 2005 we have entered into two product tanker contracts with PEMEX under bareboat charters for a five-year term. During 2009 we were awarded a third bareboat charter contract for a product tanker with PEMEX for a five-year period. During 2006, TMM also entered into a marketing agreement with Navi8 (formerly FR8), a company that actively trades a time charter fleet, owns and invests in tonnage, manages vessels for third parties and for its own account and acts as an exclusive cargo

broker for oil traders. This agreement enhances TMM’s flexibility to (i) offer vessels to PEMEX under time charter schemes and (ii) enter international markets .

      Ports Operations

     We own over 2,000 acres of land in the port of Tuxpan. We believe that this plot of land is a strategic investment and could be used in the future in connection with the development of Tuxpan as a major seaport.

      Reducing Corporate Overhead and Other Operating Costs

     Over the last few years, we have significantly reduced our operating costs. In 2003, we reduced our corporate staff headcount from 222 to 97 full-time equivalents through the elimination of redundant positions and the transfer of certain employees to other business areas within the Company. Furthermore, we have developed an information systems platform that integrates logistics services using Internet technology, thereby increasing the efficiency of our logistics operations. The information systems platform supports dedicated logistics contracts and yard management and allows our customers to access information regarding the location and status of their cargo via touch-tone telephone or computer.

     In 2005, after the sale of Grupo TFM, we reduced the number of personnel in our Logistics Operations segment from 8,491 to 5,000. As of December 31, 2006, our Logistics Operations personnel totaled 5,055. In 2007 we increased corporate and other operating expenses due to the warehousing and auto haulage acquisitions. These two new businesses added 946 employees to our Company. In November 2007, the Board of Directors approved and executed a corporate restructuring of the senior executives of the Company which was intended to reduce corporate expenses and improve the Company’s performance.

     During 2008 and 2009, we continued our corporate overhead reduction programme. We believe our level of corporate overhead was in-line with our business during 2009.

     In addition, we have reduced and will continue to reduce, the number of companies within our organizational structure in an effort to streamline operations and reduce operating costs.

      Sources of Financing

     We expect to finance the expansion plans mentioned above mainly through secured credit arrangements and other asset-backed financings, similar to what the Company has been doing through its Trust Certificates Program.

      Debt Refinancing

     The refinancing of our current debt is a priority in order to extend the maturity of such debt and achieve lower debt service requirements and interest costs. Accordingly, we are evaluating several alternatives to refinance debt that was not refinanced through our Trust Certificates Program. In addition, our goal is to improve our operational flexibility by refinancing the debt with debt that does not contain as many restrictive covenants as are contained in our current debt agreements.

      Certain Competitive Advantages

     We believe that we benefit from the following competitive advantages:

•		no other company offers a similar breadth and depth of services as a third-party logistics provider in Mexico;
•		the ability to contract for the transportation of large amounts of cargo by sea, as well as transport by truck, enables us to provide value-added “door-to-door” service to our customers. The value of our transportation service is further enhanced by our ability to provide warehousing services for some types of cargo. This ability to provide integrated services gives us a competitive advantage over companies that provide only maritime transportation to, or overland transportation within, Mexico; and

•

we are a Mexican-owned and Mexican-operated company, a distinction that allows us marketing and operational advantages and, in certain cases, preferential treatment in certain niche markets within Mexico. Mexican law provides that cabotage (intra-Mexican movement between ports) is reserved for ships flying the Mexican flag.

Maritime Operations

     Our Maritime Operations include: (a) supply and logistics services to the oil offshore industry at offshore facilities in the Gulf of Mexico and between ports, moving crews and/or cargo to and from oil platforms; (b) product tankers for the transportation in cabotage of petroleum products, such as the distribution of gasoline to a variety of Mexican ports where the gasoline is further distributed inland; (c) parcel tankers, also known as chemical tankers, for the transportation of liquid chemical cargoes between ports in Mexico and the United States; and (d) tugboats that provide harbor towing services in and out of the port of Manzanillo. Mexican law provides that cabotage (intra-Mexican movement between ports) is reserved for ships flying the Mexican flag, which we believe provides us with a competitive advantage in this market. This segment accounted for 65% of consolidated revenues for the year 2009, 57% for the year 2008 and 59% for the year 2007.

      Fleet Management

     As of April 30, 2010, we operated a fleet comprised of product tankers and parcel tankers, as well as a fleet of offshore vessels and tugboats. Of a total of 46 vessels, 43 are owned tonnage (five product tankers, 31 offshore vessels, two parcel tankers and five tugboats) and three are chartered units (one parcel tanker, one product tanker and one offshore vessel).

     The table below sets forth information as of April 30, 2010, about our fleet of owned and chartered vessels by type, size and capacities:

      Offshore Vessels

     We have been participating in this business for 17 years. In March 2006, the Company purchased Seacor’s 40% interest in Marmex. As part of this transaction, TMM also purchased five offshore vessels owned by Seacor, which began flying the Mexican flag, and at the same time converted three additional offshore vessels from leased to owned status. All eight vessels are working under time charter contracts supporting offshore oil exploration and production activities in the Gulf of Mexico.

     TMM, in its offshore division, provides supply and logistics services to the offshore industry between the ports and the offshore facilities in the Gulf of Mexico through a specialized fleet that includes fast and conventional crew vessels, supply vessels, anchor handling tug supply vessels and Dynamic Positioning (“DP”) vessels. Other services include supply and administration of onboard personnel, coordination and supervision of the maritime transport of staff, materials and equipment from the base on shore to operational points of the vessels within the oil-drilling zone of the Gulf of Mexico, and coordination and supervision of catering and accommodation matters onboard the vessels. As of June 2009, TMM’s offshore fleet represented 9% of Mexico’s offshore fleet. As of April 30, 2010, 21 TMM vessels were directly hired by PEMEX, and nine additional vessels were hired by private operators engaged in the construction and maintenance sectors for PEMEX or working in the spot market.

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

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

      Parcel Tankers

     Our parcel tanker business operates between Mexican and American ports in the Gulf of Mexico, transporting chemicals, vegetable and animal oils and molasses. The majority of the transported cargo is under contracts of affreightment (“COAs”) in which the customers commit the carriage of their cargo over a fixed period time on multiple voyages, with a minimum and a maximum cargo tonnage at a fixed price. The vessel operator is responsible for the vessel, the fuel and the port expenses. Currently, our chemical tanker fleet is comprised of two owned and one time-chartered vessel. We transported 1.4 million tons of goods in our parcel tankers during 2009 and 1.5 million tons during 2008. Our primary customers that use our parcel tanker services include major oil and chemical companies.

     Set forth below is information regarding our parcel tankers as of April 30, 2010:

      Harbor Towing

     Since January 1997, TMM (formerly Servicios Mexicanos en Remolcadores, S.A. de C.V.) has provided tugboat services in the port of Manzanillo under a 10-year concession, including port docking and navigation in and out of channels and port facilities into open waters. In December 2006, the concession to operate this business was renewed by the relevant authorities for eight more years. As of April 30, 2010 we are operating five owned vessels in this port.

      Customers and Contractual Arrangements

     The primary purchasers of our Maritime Operations services are multi-national oil, gas and chemical companies. These services are generally contracted for on the basis of short-term or long-term time charters, voyage charters, contracts of affreightment or other transportation agreements tailored to the shipper’s requirements. In 2009, our ten largest customers accounted for approximately 83% and 53% of Maritime Operations revenues and consolidated revenues, respectively. The loss of one or a few of our customers could have a material adverse effect on the results of operations of our Maritime Operations.

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

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

      Markets

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

	§		expectations as to future oil and gas commodity prices;
	§		customer assessments of offshore drilling prospects compared to land-based opportunities;
	§		customer assessments of cost, geological opportunity and political stability in host countries;
	§		worldwide demand for oil and natural gas;
	§		the ability of the Organization of Petroleum Exporting Countries (“OPEC”) to set and maintain production levels and pricing;
	§		the level of production of non-OPEC countries;
	§		the relative exchange rates for the U.S. dollar; and
	§		various government policies regarding exploration and development of their oil and gas reserves.

Ports and Terminals Operations

     We conduct operations at the Mexican ports of Acapulco and Tuxpan. We have been granted three partial assignment agreements of rights and obligations in respect to our operations at Tuxpan. Additionally, we own land and a multipurpose cargo terminal in Tuxpan. Our concession in Acapulco and our partial assignment agreement of rights and obligations in Tuxpan give us the right of first refusal to continue operations for a second term once the term of the original contract expires.

     In December 2005, we sold our business in Colombia. Before the sale of our business in Colombia, this segment accounted for 13% and 19% of consolidated revenues in 2005 and 2004, respectively. Without the Colombian business, the Ports and Terminals operations accounted for 2% of consolidated revenues in 2009 and 2008 and 3% in 2007 and 2006.

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

      Acapulco

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

     Through API Acapulco, we operate and manage an automobile terminal, a cruise ship terminal with a capacity to receive two cruise ships simultaneously and an automobile warehouse with a capacity to store up to 1,700 automobiles. The automobile terminal was completed in November 1997 and the passenger terminal was completed during the fourth quarter of 2000.

     In 2009, we handled 21,209 automobile exports for Volkswagen, Chrysler and Nissan to South America and Asia, reflecting a decrease of 57% from 2008, when we handled approximately 49,629 automobiles at our terminal.

     Acapulco is one of the main tourist ports in Mexico. Major cruise ship lines, such as Carnival, Royal Caribbean, Princess and Holland America, among others, make use of our terminal. During 2009, we had 100 cruise ship calls, which represents a 9% decrease from 110 calls in 2008.

      Tuxpan

     We own approximately 2,000 acres of land in Tuxpan, and we own a terminal of multipurpose cargo through our wholly owned subsidiary Tecomar, S.A. de C.V. We have access to a contiguous public berth where containers and general cargo can be unloaded and delivered to our multipurpose terminal. Additionally, we offer container-warehousing services at this port. While we currently handle only a small volume of cargo at the port, we are in the process of developing the site. Our Tuxpan port facilities are operated through Operadora Portuaria de Tuxpan, S.A. de C.V., a wholly owned subsidiary of Grupo TMM.

      Shipping Agencies

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

      Logistics Operations

     Through TMM Logistics, S.A. de C.V. (“TMM Logistics”), a wholly owned subsidiary of Grupo TMM, we provide dedicated logistics trucking services to major manufacturers, including automobile manufacturers, and retailers with facilities and operations throughout Mexico. We offer full-service logistical facilities in major industrial cities and railroad hubs throughout Mexico, including in Aguascalientes, Toluca, Puebla, Veracruz, Nuevo Laredo, Mexico City and Monterrey, among others. The services that we provide include consulting, analytical and logistics outsourcing services, which encompass the management of inbound movement of parts to manufacturing plants consistent with just-in-time inventory planning practices; logistics network (order-cycle) analysis; logistics information process design; trucking, auto haulage and intermodal transport; warehousing and bonded warehousing facility management; supply chain and logistics management; product handling and repackaging; local pre-assembly; maintenance and repair of containers in principal Mexican ports and cities; and inbound and outbound distribution using multiple transportation modes. Due to the scope of our operations, together with the extent of our experience and resources, we believe that we are uniquely positioned to coordinate the entire supply chain for our customers. This segment accounted for 31% of consolidated revenues in 2009, 37% of consolidated revenues in 2008, and 38% of consolidated revenues in 2007 and 2006.

      Automotive Services

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

      Trucki n g Services

     In conjunction with our logistics facilities, we offer truck transport and dedicated logistics trucking services as a value-added component to streamline the movement of products to and from major Mexican cities and rail hubs. Under Mexican law, truck transportation within Mexico can be performed only by Mexican-owned companies, such as Grupo TMM. As of April 30, 2010, we operated 411 trucks. We currently provide dedicated trucking services to several major manufacturers and retailers including Jumex, Chedraui, Nestle, Unilever, Waldo’s and Nissan.

     Our over-the-road units provide trucking services on a spot basis to major retail stores and consumer product companies. We also provide intermodal services for drayage cargo at Pantaco in Mexico City and Monterrey.

      Container Repair and Maintenance

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

      TMM Plus

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

      Warehousing Services

     We added warehousing to our logistics services in 2006 through the acquisition of Almacenadora de Depósito Moderno, S.A. de C.V. Organización Auxiliar de Crédito (“ADEMSA”). ADEMSA currently operates over 380,000 square meters of warehousing space throughout Mexico, including 68,000 square meters of direct warehouse space (the largest of which is located northern Mexico City). Due to its regulated nature, ADEMSA is one of a limited number of warehousing companies authorized by the Mexican Government to provide bonded warehousing services and to issue negotiable certificates of deposit.

      Auto Haulage

     On July 19, 2007, TMM acquired from Autoconvoy Mexicano, S.A. de C.V., operating assets including a fleet of 228 trucks and 423 haul-away trailers, each equipped with a satellite tracking system.

     We have our own yards in Puebla, Aguascalientes and Cuernavaca, equipped with all the facilities necessary for the operation of the newly formed TMM Logistics haul-away division (management offices, repair shops, shelter yards, security, warehouses, etc).

     Since July 19, 2007, TMM has coordinated vehicle distribution on a national level, from the main automotive manufacturers’ plants, to the national dealers or borders for export purposes.

     Currently Auto Haulage operates 152 trucks and 357 haul-away trailers.

      Grupo TMM’s Strategic Partners

     We are currently a partner in strategic arrangements with the following companies:

Business		Partner
Ports (Acapulco)		SSA Mexico, Inc.

     In October 2000, EMD, a subsidiary of General Motors (“GM”), invested $20 million in our subsidiary TMM Multimodal, S.A. de C.V. (“TMM Multimodal”) (representing an approximate 3.4% interest in TMM Multimodal). Under the terms of the Subscription and Stockholder Agreement relating to its investment in TMM Multimodal, EMD had the right to cause Grupo TMM to purchase, or, alternatively, to cause TMM Multimodal to redeem, all, but not less than all, of EMD’s shares in TMM Multimodal at a price equal to the original investment of $20 million, plus interest compounded annually from June 30, 2000 at the rate of 12% per annum, less certain distributions received by EMD in respect of its shares of TMM Multimodal. On March 15, 2005, GM notified the Company of its intention to exercise its put option on April 4, 2005; and on such date, with the cash proceeds from the sale of its interest in Grupo TFM to KCS, Grupo TMM paid approximately $34 million to GM in exchange for the shares of TMM Multimodal.

Disposition of Grupo TMM’s interest in Grupo TFM to KCS

      General

     On September 21, 2007, we completed the sale of our interest in Grupo TFM to KCS pursuant to an Amended and Restated Acquisition Agreement dated December 15, 2004 (the “AAA”). As consideration for the purchase and upon consummation of the transactions the Company received: (i) $200 million in cash; (ii) 18 million shares of KCS common stock, which were sold for approximately $400.5 million; (iii) an additional $35 million in cash and 1,494,469 KCS shares sold for approximately $37.3 million, and (iv) $54.1 million in cash to settle the various disputes between Grupo TMM and KSC relating to the sale of Grupo TFM. In connection with the completion of the sale, the parties entered into a settlement agreement pursuant to which each fully and finally settled and released all claims asserted against the other in arbitration proceedings which had been initiated by KCS under the AAA. See Item 8. “Financial Information — Legal Proceedings — Dispute with Kansas City Southern.”

      Sales and Marketing

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

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

Systems and Technology

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

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

Competition

      Maritime Operations

     The Company’s primary competitors in the Offshore Vessel business are Oceanografía, S.A. de C.V. (partner of Otto Candies LLC in Mexico) and Nautica Saltamar, S.A. de C.V. (a Mexican company with commercial agreements with Tidewater, Inc., the world’s largest offshore vessel operator). Tidewater, Inc. has a substantially greater percentage of domestic and foreign offshore marine market share compared to the Company and its other competitors. Other important offshore vessel operators in Mexico include Consultoría y Servicios Petroleros, S.A. de C.V., Naviera Integral S.A. de C.V., Naviera Tamaulipas S.A. de C.V., Seamar Mexico S. de R.L. de C.V., Edison Chouest Mexico S. de R.L. de C.V., and Cotemar S.A. de C.V.

     The Company’s primary competitor in the Parcel Tanker business is Stolt-Nielsen Transportation Group Ltd. Some other competitors in this business include Clipper, Eitzen and Tradewind Tankers.

     Our tugboat business does not have a direct competitor within the port of Manzanillo, however other important tugboat operations in Mexico are provided by Saam Remolques, S.A., Cia. Maritima del Pacifico, S.A de C.V and Cia Maritima Mexicana, S.A de C.V.

     The Company’s primary competitors in the Product Tanker business are Arrendadora Ocean Mexicana, S.A. de C.V., Naviera Tulum, S.A. de C.V., Naviera Tapias, S.A. and Naviera del Sureste, S.A. de C.V.

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

      Logistics Operations

     In our Third Party Logistics business, the Company faces competition primarily from Car Logistics S.A. de C.V. and Axis Logistics S.A. de C.V.

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

     The Company’s key competitors in its Trucking business are Transportistas Unidos Mexicanos División Norte, S.A. de C.V., Transportes Easo, S.A. de C.V., Transportes Castores de Baja California, S.A. de C.V. and Transportes de Carga Tres Guerras, S.A. de C.V.

     Our Warehousing business’ main competitors are Exel Logistics de Mexico S.A. de C.V., Zimag Logistics, Accel Logistica S.A. de C.V., Kuehne & Nagel S.A de C.V. and Grupo Onest Logistics.

     In the auto hauling business, the Company faces competition primarily from Transportes Cuauhtemoc, S.A. de C.V., Auto Traslados sin Rodar, S.A. de C.V., Consorcio de Servicios Internacionales, S.A. de C.V. and González Trucking, S.A. de C.V.

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

REGULATORY FRAMEWORK

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

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

     Truck transportation within Mexico is reserved for Mexican nationals or entities that include in their constituent documents or Bylaws the “foreigner exclusion clause” (cláusula de exclusión de extranjeros) , or a clause allowing other foreign investment through “neutral investment vehicles or securities.” Truck transportation is regulated by the Ley de Caminos, Puentes y Autotransporte Federal and the Ley de Vias Generales de Comunicacion.

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

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

Mexican Navigation Law

     On June 1, 2006 the Mexican Navigation Law (“ Ley de Navegación y Comercio Marítimos ”) was published in Mexico’s Official Gazette, and became effective 30 days thereafter. This law: (i) strengthens the reservation of cabotage services for Mexican individuals dedicated to shipping or Mexican shipping companies; (ii) establishes mechanisms and procedures for the resolution of maritime controversies or disputes and (iii) in general terms, is protective of the Mexican shipping industry. Nevertheless, there can be no assurance that the percentage of Mexican-flagged vessels operating in Mexico will continue to increase in the future.

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

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

	§		customary provisions enabling authorities to carry out inspections of vessels and investigations of incidents;
	§		regulations concerning registration of vessels and waivers allowing Mexican companies to operate foreign flag vessels in otherwise reserved domains;
	§		foreign vessels are obliged to designate a shipping agent in order to call at Mexican ports;
	§		Mexican flag vessels are required to operate with Mexican crews only and cabotage is in principle reserved for Mexican vessels;
	§		when a foreign vessel is abandoned by the owners with cargo on board, provisions of the legislation coordinate repatriation and temporary maintenance of the crew which the law deems ultimately to be the joint and several liability of the owner and agent;
	§		the carriage of passengers, cargo and towage in ports and pilotage are also regulated;
	§		captains are responsible for damage and loss caused to vessels or ports due to negligence, lack of proper qualification, carelessness or bad faith, but are not responsible for damages caused by an act of God or force majeure ;
	§		companies providing towage services must carry insurance to cover their liabilities to the satisfaction of the authorities;
	§		pollution is regulated by international treaties; however this only covers CLC-type liabilities. Pollution in respect of other substances is dealt with under local legislation which has no limitation. This is irrespective of any criminal proceedings or sanctions against the party responsible for the incident; and
	§		maritime privileges are also considered within the law.

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

	§		bareboat charter;
	§		time charter;
	§		voyage charter;
	§		carriage of goods;
	§		passengers;
	§		salvage; and
	§		towage.

Environmental Regulation

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

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

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

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

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

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

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

Insurance

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

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

Organizational Structure

     We hold a majority of the voting stock in each of our subsidiaries. The most significant subsidiaries, as of April 30, 2010, include:

Property, Plant and Equipment

     Our principal executive offices are located in Mexico City, and are currently under lease from March 2006 through March 2021. Our business activities and the business activities of our subsidiaries in the logistics and transportation fields are conducted with both leased and owned equipment, and, in certain instances, through concessions granted to us by the Mexican Government. We were granted the right to operate certain facilities, including certain cruise ship terminals and ports, as part of franchises awarded through the Mexican Government’s privatization activity. We operate facilities, either through leases or with direct ownership interests, in Acapulco, Aguascalientes, Altamira, Campeche, Coatzacoalcos, Cuernavaca, Ensenada, Hermosillo, Veracruz, Mexico City, Monterrey, Nuevo Laredo, Puebla, Queretaro, Toluca and Tuxpan. See Item 4. “Information on the Company — Business Overview,” and Notes 8 and 9 to our Audited Consolidated Financial Statements.

     Concession Rights and Related Assets as summarized below:

(*)     Fully amortized.

     Property, Plant and Equipment are summarized below:

			due 2007 (the “2007 Notes”). In September 2006, we also entered into (i) a $200 million receivables securitization facility with Deutsche Bank AG that matures in September 2012, which was successfully restructured in December 2009, and (ii) other credit agreements to finance the acquisition of offshore vessels, parcel tanker and tugboats. We continue to review and analyze alternatives to refinance our debt to extend the maturity and reduce the interest expense thereof. See Item 4. “Information on the Company — Recent Developments — Mexican Peso-Denominated Trust Certificates Program” and “— Restructuring of Receivables Securitization Facility and Associated Capital Increase.”
	§		Establishing our Trust Certificates Program: On April 30, 2007 we established a Mexican Peso-Denominated Trust Certificates Program for the issuance of trust certificates, which are securities secured by trust assets and denominated in Mexican Pesos, for an aggregate amount of Ps. 9 billion. We closed our first, second, and third issuances of trusts certificates under the program on July 19, 2007, April 30, 2008, and July 1, 2008, respectively, in an amount of Ps. 3 billion, Ps. 1.55 billion, and Ps. 4.39 billion, respectively. Our first issuance was used primarily to refinance existing vessel indebtedness. Our second issuance was primarily used to finance the acquisition of five new and used vessels for an approximate aggregate amount of $111.4 million. Our third issuance is being used to acquire new and used vessels.
	§		Selling our interest in Grupo TFM to KCS : On April 1, 2005, we sold our interest in Grupo TFM to KCS. See Item 4. “Information on the Company — Recent Developments — Disposition of Grupo TMM’s interest in Grupo TFM to KCS.”
	§		Purchase of 40% Marmex stake from Seacor: On March 3, 2006, the Company purchased Seacor’s 40% interest in Marmex, our former offshore vessel joint venture company dedicated to providing maritime offshore services in Mexico’s Gulf Coast. As part of this transaction, Grupo TMM also purchased five offshore vessels owned by Seacor which began flying the Mexican flag, and at the same time converted three additional offshore vessels from leased to owned status. All eight vessels are working under time charter contracts supporting offshore oil exploration and production activities in the Gulf of Mexico. The aggregate cost of these transactions, including the purchase of 40% of the Marmex shares, the purchase of five vessels from Seacor, and the conversion to owned status of the three vessels under lease, was $75 million, of which $70 million was financed through bank debt.
	§		Purchase of 40% SMR stake from Smit: On May 9, 2006, the Company purchased the remaining 40% minority stake held by the Dutch company Smit in Servicios Mexicanos en Remolcadores, S.A. de C.V. (“SMR”), a joint venture company dedicated to providing harbor towing services at the Port of Manzanillo, Mexico. The purchase price was $9 million. The concession to operate this business was recently renewed by the ports authorities for an additional eight years until January 2015.
	§		Purchase of 100% Almacenadora de Depósito Moderno, S.A. de C.V. Organización Auxiliar de Crédito (“ADEMSA”) : On December 13, 2006, the Company purchased 100% of ADEMSA’s shares. ADEMSA currently operates over 380,000 square meters of warehousing space throughout Mexico, including 68,000 square meters of direct warehouse (the largest of which is located in northern Mexico City). Due to its regulated nature, ADEMSA is one of a limited number of warehousing companies authorized by the Mexican Government to provide bonded warehousing services and to issue negotiable certificates of deposit.
	§		Purchase of Assets from Autoconvoy Mexicano, S.A. de C.V. : On July 19, 2007, Grupo TMM acquired from Autoconvoy Mexicano, S.A. de C.V., operating assets including a fleet of 228 trucks and 423 haul-away trailers, each equipped with a satellite tracking system. We have our own yards in Puebla, Aguascalientes and Cuernavaca, equipped with all the necessary facilities for the operation of the newly formed TMM Logistics haul-away division (management offices, repair shops, shelter yards, security, warehouses, etc). Since July 19, 2007, Grupo TMM has been coordinating and distributing vehicles on a national level, from the main automotive manufacturers’ plants, to the national dealers or borders for export purposes.
	§		Sale of Certain Subsidiaries : During 2008, Grupo TMM, in an effort to streamline its operations and reduce operating costs, sold certain non-strategic subsidiaries and recognized a $17.7 million gain on the

sale of such subsidiaries. On April 20, 2010, Grupo TMM agreed to sell its stockholdings in the companies that comprised Grupo Seglo to its partner for $4.9 million (Ps. 60 million) (See Note 1 to the accompanying Audited Consolidated Financial Statements contained elsewhere herein).

Operating Results

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

      Income (loss) from discontinued operations in 2006 and 2007

     On April 1, 2005, Grupo TMM received $594 million for the sale of its share interest in Grupo TFM to KCS, including $200 million in cash, $47 million in a 5% promissory note which matured on June 1, 2007, and 18 million shares of KCS common stock worth $347 million at that date. Furthermore, on March 13, 2006, Grupo TMM received an additional payment of $110 million from KCS in a combination of $35 million in cash, a $40 million note receivable, and 1,494,469 shares of KCS common stock valued at $35 million dependent on a favorable resolution of the VAT liability and the Mexican Government’s put option. Due to the contingent nature of the latter receivable, it was not recognized as a receivable at the time of the sale, but was recognized as income from discontinued operations within the consolidated statement of operations for 2006 until actual cash was collected in April 2006 with its corresponding revenue in the amount of $111.4 million.

     On September 21, 2007, the Company announced that it had reached a settlement with KCS in connection with the arbitration procedure instituted under the terms of the AAA dated December 15, 2004 between Grupo TMM and KCS. This settlement terminated any and all controversies under the AAA and its ancillary documents, and provided for mutual releases between the parties. Under the terms of the settlement, KCS paid Grupo TMM $54.1 million in cash and the obligations of KCS under the Indemnity Escrow Note and the Tax Escrow Note, which were payable in 2010, were terminated. In Grupo TMM’s financial statements, these Notes were carried at face value plus interest earned at $91.7 million, hence it was recognized in the accompanying consolidated statement of operations as a loss from discontinued operations for 2007, in the amount of $38.6 million including $1 million of settlement expenses. See Item 8. “Financial Information — Legal Proceedings — Dispute with Kansas City Southern.”

      Fiscal Year ended December 31, 2009 Compared to Fiscal Year ended December 31, 2008

     Revenues from operations for the year ended December 31, 2009 were $308.4 million compared to $362.9 million for the year ended December 31, 2008. Reported revenues for each of Grupo TMM’s divisions decreased in 2009 as compared to 2008.

      Ports and Terminals Operations

     Ports and Terminals Operations’ revenues decreased 17.5% to $6.6 million for the year ended December 31, 2009, compared to $8 million for the year ended December 31, 2008, and accounted for 2.1% of total net revenues. This decrease was mainly attributable to lower volumes at the port of Acapulco, as a result of decreased cruise ship calls (10%) due principally to travelers’ concerns about the so-called swine flu or H1N1 flu, and to a decrease in the auto handling segment, from 49,629 automobiles in 2008 to 21,209 in 2009.

      Maritime Operations

     Maritime Operations’ revenues decreased 3.5% to $199.6 million in 2009 compared to $206.8 million in 2008 and accounted for 64.7% of total net revenues. This decrease was mainly attributable to a 35.7% decrease in product tanker revenues, as a result of there being two fewer vessels in operation in 2009 and also to a 21.7% decrease in timecharters in 2009 compared to 2008.

      Logistics Operations

     Logistics Operations’ revenues decreased 29.0% to $95.4 million in 2009 compared to $134.3 million in 2008 and accounted for 30.9% of total net revenues. Revenues were negatively impacted mainly by the decreased volumes in the trucking, auto hauling and automotive segments as a result of a slowdown of production at auto plants as well as the worldwide economic crisis.

Income on Transportation

     Under IFRS, income on transportation reflects revenues on transportation less operating costs and expenses. Reference to operating income in this Annual Report refers to income on transportation, plus/minus the effect of other income (expenses) as presented in the Financial Statements included in this Annual Report.

     Total costs and expenses for the year ended December 31, 2009 decreased 20.7% to $278.9 million from $351.7 million for the year ended December 31, 2008. This decrease was mainly attributable to a decrease of 32% in leases and other rents, a decrease of 23.2% in the cost of fuel, materials and supplies, a decrease of 24.9% in salaries, wages and employee benefits and an increase of 36.5% in depreciation and amortization. Operating income increased 163.4% to $29.5 million for the year ended December 31, 2009 from an operating income of $11.2 million for the year ended December 31, 2008.

     The following table sets forth information concerning the Company’s operating income by business segment for the year ended December 31, 2009.

      Ports and Terminals Operations

     Ports and Terminals Operations’ operating income for the year ended December 31, 2009 decreased to $1.4 million, after deducting $1.1 million of administrative costs, compared to $1.6 million, after deducting $1.6 million of administrative costs, for the year ended December 31, 2008.

      Maritime Operations

     Maritime Operations’ operating income for the year ended December 31, 2009 increased to $55.7 million, after deducting $5.8 million of administrative costs, compared to $42.0 million, after deducting $6.8 million of administrative costs in 2008. This increase resulted primarily from operating six new vessels in our offshore business and also to a reduction of costs in the chemical tanker business during 2009.

      Logistics Operations

     Logistics Operations incurred an operating loss for the year ended December 31, 2009 of $9.9 million, after deducting $12.0 million of administrative costs, compared to a loss of $12.0 million, after deducting $14.6 million of administrative costs, for the year ended December 31, 2008. The operating loss in 2009 was partially offset by a 17.8% reduction in administrative costs incurred in 2009 compared to those incurred in 2008.

Net Financing Cost

		($ in millions)
		Year Ended December 31,
										Y2009
										vs.
										Y2008
		2009				2008				% Change
Net Financing Cost		$	118.4			$	(75.6	)			256.6	%

     Net financing cost recognized during the year ended December 31, 2009 was a $118.4 million expense, compared to a $75.6 million credit incurred during the year ended December 31, 2008. The increase was primarily due to the recognition of significant currency exchange losses on our Peso-denominated debt as a result of the revaluation of the Peso in 2009 and significant currency exchange gains on our Peso-denominated debt as a result of the devaluation of the Peso in 2008.

Other (Expenses) Income -Net

		($ in millions)
		Year Ended December 31,
										Y2009
										vs.
										Y2008
		2009				2008				% Change
Other (expenses) income — net		$	(5.7	)		$	8.7				(165.5	)%

     Other (expenses) income — net for the year ended December 31, 2009 included primarily: $3.5 million of goodwill impairment and $1.2 million from lease equipment expenses. Other (expenses) income — net for the year ended December 31, 2008 included primarily: $17.7 million from a gain on the sale of certain non-strategic subsidiaries, which was partially offset by $4.7 million of goodwill impairment, and $3.8 million from lease equipment expenses.

Expenses (Benefit) from Income Taxes

		($ in millions)
		Year Ended December 31,
										Y2009
										vs.
										Y2008
		2009				2008				% Change
Expenses (Benefit) from income taxes		$	1.1			$	20.1				(94.5	)%

     In the year ended December 31, 2009 we incurred a tax expense of $1.1 million, compared to a tax expense of $20.1 million reported for the year ended December 31, 2008. The tax expense in the year 2008 is primarily due to a decrease in the deferred tax asset arising from exchange fluctuations.

Minority Interest

		($ in millions)
		Year Ended December 31,
										Y2009
										vs.
										Y2008
		2009				2008				% Change
Minority interest		$	1.4			$	0.5				180	%

     Minority interest increased to $1.4 million for the year ended December 31, 2009, from $0.5 million for the year ended December 31, 2008. This increase is due to an increase in net income for the year from companies in which we hold a minority interest.

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

		($ in millions)
		Year Ended December 31,
										Y2009
										vs.
										Y2008
		2009				2008				% Change
Net (Loss) Income for the year attributable to stockholders of Grupo TMM		$	(97.1	)		$	74.9				(229.6	)%

     In the year ended December 31, 2009, we incurred a net loss of $97.0 million, or a loss of $1.71 dollars per Share. In the year ended December 31, 2008, we recognized net income of $74.9 million, or income of $1.33 dollars per Share.

      Fiscal Year ended December 31, 2008 Compared to Fiscal Year ended December 31, 2007

     Revenues from operations for the year ended December 31, 2008 were $362.9 million compared to $303.3 million for the year ended December 31, 2007. Reported revenues for each of Grupo TMM’s divisions increased in 2008 as compared to 2007, except in the Port Division where revenues decreased in 2008 compared to 2007.

      Ports and Terminals Operations

     Ports and Terminals Operations’ revenues decreased 5.9% to $8 million for the year ended December 31, 2008 and accounted for 2.2% of total net revenues, compared to $8.5 million for the year ended December 31, 2007. This decrease was mainly attributable to lower volumes at shipping agencies and to a decrease in revenues of 6.4% from the port in Acapulco as a result of decreased cruise ship calls, which were partially offset by an increase in revenues in the auto handling segment due to higher export volumes to South America and Japan, from 38,773 automobiles in 2007 to 46,629 in 2008.

      Maritime Operations

     Maritime Operations’ revenues increased 15.5% to $206.8 million in 2008 and accounted for 57% of total net revenues compared to $179 million in 2007. This increase was mainly attributable to a 16.6% increase in revenues in the offshore segment due mainly to higher average daily rates and to a 23.5% increase in product tanker revenues as a result of there being two more vessels in operation in 2008.

      Logistics Operations

     Logistics Operations’ revenues increased 15.9% to $134.3 million in 2008 and accounted for 37% of total net revenues compared to $115.9 million in 2007. Revenues were positively impacted by a 16.8% increase in trucking revenues mainly due to the addition of new clients and by revenues of $21.8 million in the auto hauling business in 2008, its first full year of operation. This revenue increase was partially offset by a decrease in revenues in the

fourth quarter of 2008, mainly due to the depreciation of the peso during such quarter and to decreased volumes in the auto hauling and automotive segments as a result of a slowdown of production at auto plants.

Income on Transportation

     Under IFRS, income on transportation reflects revenues on transportation less operating costs and expenses. Reference to operating income in this Annual Report refers to income on transportation, plus/minus the effect of other income (expenses) as presented in the Financial Statements included in this Annual Report.

     Total costs and expenses for the year ended December 31, 2008 increased 25.8% to $351.7 million from $279.6 million for the year ended December 31, 2007. This increase was mainly attributable to an increase of 18% in leases and other rents, an increase of 57.8% in fuel materials and supplies, an increase of 30.1% in salaries, wages and employee benefits and an increase of 21.3% in depreciation and amortization. Operating income decreased 52.7% to $11.2 million for the year ended December 31, 2008 from an operating income of $23.7 million for the year ended December 31, 2007.

     The following table sets forth information concerning the Company’s operating income by business segment for the year ended December 31, 2008.