Financial Statements Prumo Logística S.A. (Publicly Held Company) December 31, 2014 and 2013 with Independent auditors report on Financial Statements

Transcription

1 Financial Statements Prumo Logística S.A. (Publicly Held Company) with Independent auditors report on Financial Statements

2 2014 EARNINGS REPORT Rio de Janeiro, March 25, PRUMO LOGÍSTICA S.A. ( Company or PRUMO ) (Bovespa symbol: PRML3), a private Brazilian company responsible for the Açu Port venture, is today announcing its earnings for 2014 and providing its shareholders and the market with up-to-date information about its venture. The consolidated financial and operating information, stated in thousands of Brazilian reais, is being presented in accordance with international financial reporting standards (IFRS). Message from the Chairman During 2014 Prumo made a series of changes implemented by the new controlling shareholder EIG, which initiated at the end of After the new CEO, Eduardo Parente, was appointed in February 2014, the Company reorganized its Executive Board and restructured its long-term business plan to adapt it to the vision of the new controlling shareholder. It also restructured its governance model in order to enhance its management and create the means and security for the new operational phase of Porto do Açu Operações S.A. ( Porto do Açu ). The arrival of the experienced Officers Marina Fontoura and Cristiane Marsillac, helped the creation of a new cycle of strategic planning, focusing on the operational start-up, attraction of new clients and development of new business to maximize the creation of value for Prumo. The arrival of Officer Eduardo Xavier at the beggining of 2015, who is experienced in regulations and the port sector, helped us implement our business plan. On the commercial front the Company managed to secure important partnerships in 2014, especially the signing of the contract for creating an offshore support base with Edison Chouest and the joint venture with Britannic Strategies Limited ( BP ) to distribute marine fuel. In addition to rent revenue, these contracts could attract new clients, thereby increasing the occupation of our landside yard and the movement of vessels at Açu Port. 1

3 The year was also marked by the start of Prumo's operations. At Terminal 1 ( T1 ), Ferroport - a joint venture formed of 50% Prumo and 50% Anglo American - started receiving iron ore down the 529-km slurry pipeline. Operations commenced in October 2014 with the loading of the first ship handling iron ore. Following the first shipment, the payment agreed in the take or pay contract with Anglo-American was triggered in the second half of 2014, generating material revenue for Ferroport. Terminal 2 ( T2 ) also came into operation following the start-up of load handling by our clients located on the canal. The construction of Açu Port also made the news this year. The physical advances on the main work fronts, in the creation of essential infrastructure for the operation of our terminals, and that of our clients, was impressive. The partnership with the suppliers operating on the construction of Açu Port and Prumo's employees was fundamental to delivering the structure necessary to safely start up operations. At the end of 2014, the Company underwent a new capital increase in the amount of R$ 650,000, (six hundred and fifty million reais). EIG accounted for 99.98% and minority shareholders 0.02% of the fully subscribed and paid-in capital increase. The capital increase was necessary to prepare the Company for a new phase of investments in 2015, primarily consisting of the construction of new terminals at Açu Port to handle oil, project cargo and solid bulk, in addition to expanding the basic infrastructure in the Industrial District to cater for new clients. Also regarding the change in the corporate structure of Prumo, due to the fact Mr. Eike Fuhrken Batista and Centennial Asset Mining Fund LLC (jointly Mr. Eike Batista ) did not participate in the Company's capital increase, and as a consequence of 185,630,627 of their shares being transferred to Fundo Mubadala, Mr. Eike Batista saw his equity interest diminish to approximately 6.68% of Prumo's share capital. As a result of the reduction in the equity interest, the shareholders' agreement signed with the controlling shareholder 2

4 EIG was cancelled and the Company was no longer a related party of the other companies of EBX Group. With a bolstered capital structure, operation start-up and its competitive edges, Prumo believes that 2015 will see Açu Port be consolidated as the best option for helping clients cut costs and solve their problems. Highlights for the Quarter Iron Ore Operation The main news from the fourth quarter of 2014 was the start-up of iron ore operations at Terminal 1. The iron ore shipment also marked beginning of the take or pay agreement, under which Anglo is obliged to pay Ferroport the amount of USD 7.10/ton of iron ore shipped (restated by the US' PPI - Producer Price Index ) based on the annual volume of 26.5 million tons (natural base) for the term of 25 years. Marca Ambiental Contract In December 2014 Prumo signed an agreement with Marca Ambiental to rent an area of 5,896 m 2, with 100 meters of quay, located at the end of the canal of Terminal 2. The area was rented for the period of 12 years, renewable for an equal period, at the discretion of Marca. The 100-meter quay will consist of two berths and will have the capacity to receive PSVs (Platform Supply Vessels) of up to 90 meters in length. Specializing in integrated waste management multi technologies, Marca will use the area to provide collection, treatment and disposal services for waste in general at Açu Port. 3

5 Capital Increase Conclusion The capital increase was completed at the end of 2014, with the ratification of R$ 650 million and the issuance of 1 billion new shares, which currently amounts to 2,777,474,711 common shares. Following the conclusion of the capital increase, the shareholders' agreement entered into by EIG, Eike Fuhrken Batista and Centennial Asset Mining Fund LLC on October 14, 2013 was terminated, with the intervening party Prumo Logística S.A, and the respective amendment being made on September 02, Thus, Eike Batista no longer has the right to appoint a member to Prumo s Board of Directors. Wärtsilä open plant at Açu Port A global leader in the provision of engines and services for ships and thermal power plants, Wärtsilä has today inaugurated at Açu Port (March 25) its first plant in Latin America. The plant entails internal investment of 20 million by the Finnish multinational in Brazil. During its initial phase, the multiproduct plant will concentrate on medium-sized generators and propulsion products, and may expand its product portfolio to cater for market requirements. The company is betting on the new facilities to keep pace with local content requirements and meet growing demand in the market, especially in the offshore industry. Laying of cassions in the south margin of T2 completed Last week we had the completion of the laying of all of the 26 cassions comprising the south margin of the T2 breakwater. With a length of 66 meters, width of 24 meters and height of 22 meters, the concrete cassions were 4

6 produced by the Kugira floating dyke, owned by Spain's Acciona. The works are continuing with the completion of the concrete superstructure (slabs) of the cassions and laying of rocks on the outside of the breakwater, to minimize the impact of waves. The T2 breakwater is expected to be completed midway through this year. The suction of sand from the five cassions comprising Kugira's shelter has begun at the north end. These cassions will be refloated and repositioned at the end of the north end, in a north-south direction. Construction works w follow-up Terminal 1 (T1) / Iron Ore Project T1 consists of an iron ore terminal, 3-km access bridge, a tugboat pier, a pier with 2 berths, which can be expanded to 4 berths, for handling iron ore and two piers for handling oil, an approach canal and turning basin. The venture entails a slurry pipeline with the capacity to transport 26.5 million tons of iron ore a year and crossed 32 municipalities in the states of Minas Gerais and Rio de Janeiro. 13 iron ore operations have already taken place at Terminal 1. The take or pay agreement to provide iron ore handling services between Anglo American and Ferroport (LLX Minas Rio) commenced on July 01, Since this date Anglo has been paying according to the contract of US$ 7.10/ton of iron ore shipped (restated by the US' PPI - Producer Price Index ) based on the annual volume of 26.5 million tons (natural base) for the term of 25 years. The breakwater (structure that protects the berths from the action of waves) is in its final phase. The construction of the concrete cassions that will form the T1 breakwater of 2,624 meters began in the first quarter of 2013 and will also be used as a pier for handling oil. 44 out of a total of 47 cassions have been laid so far. All the cassions comprising the length of the breakwater have been completed, leaving 5

7 just the positioning of 3 cassions that will comprise one of the 3 mooring piers for shipping oil. Photos of T1 Construction of breakwater and iron ore loading pier Terminal 2 (T2) The 42 cassions that will comprise the southern and northern ends are now ready. These cassions were produced by the Kugira, the largest concrete block production equipment in the world, owned by Spain's Acciona, which had been at Açu Port since In its final composition the breakwater will have 26 profiles in the southern end (all now laid) and 16 in the north end (11 already laid). Construction of the T2 breakwater is forecast for completion in The 500-meter TMULT quay is now ready and it will have a depth of 14.5 meters (currently 14m). All the mooring posts and buffers have been installed and the quay is ready for mooring the first vessels. The company is now concentrating on obtaining all the licenses and permits necessary to begin operations. The initial operation of TMULT entails the loading of solid bulk and project cargo, and is forecast to take place in the second half of

8 The Transmission Line assemble was concluded at the end of October with 145 towers. Carrying 345,000 volts, the towers connect Açu Port to the National Interconnected Grid. The transmission line has a length of 58 km and a width of 55 meters, and has the ground clearance to permit the transportation of cargo up to 30 meters high within the port. Photos of T2 Overview of Terminal 2 7

9 Terminal 2: Installation of the North and South breakwater Progress in TMULT works - quay completed 8

10 Client Area: Technip, NOV and Intermoor Edison Chouest quay under construction 9

11 CAPEX FERROPORT In 4Q14 the Capex realized at the iron ore terminal was R$ million. Following the iron ore shipment in October, Ferroport underwent an operational phase, meaning interest capitalization will no longer occur from this quarter (including 4Q14). Between January and December 2014 a total of R$ million was invested in the iron ore terminal project, where approximately R$ 3.5 billion was invested from 2007 to 4Q14, including capitalized interest. Not including the capitalized interest, the CAPEX amounts to R$ million in 2014 and the total CAPEX is R$ 2.9 billion from 2007 through The total invested in 2014 of R$ million was allocated to the condominium of assets as follows: R$ million was appropriated by Anglo American R$ million was appropriated by Ferroport (formerly LLX Minas- Rio); R$ million was invested by Porto do Açu Operações S.A. in the breakwater's construction; In 2014 R$ million was used in the construction of the breakwater, as per the agreement with the company FCC Construccion. A further R$ million was invested in land management, and the environment and property security, project management, company administration, the storage yards, dredging and advances and R$ 4.3 million invested in the Transmission Line. The total interest capitalized in 2014 was R$ 124 million. 10

12 CAPEX AÇU In 4Q14 the Capex realized at Porto do Açu Operações S.A. was R$ million, including capitalized interest of R$ 37.9 million. In 2014 a total of R$ 1.66 billion was invested in the construction of Açu Port, where approximately R$ 5.66 billion was invested from 2007 to 4Q14, including capitalized interest. Not including the interest capitalized in 2014, the CAPEX was R$ 1.41 billion in 2014 and the Company s total CAPEX is R$ 4.91 billion from 2007 through Interest of R$ million was capitalized in The R$ 1.66 billion consists of the change in property, plant and equipment of Porto do Açu Operações S.A. of R$ 1.15 billion, by R$ 39.4 with effect of the incorporation of SNF subsidiary (non-cash, released on 1Q14) and the variation of R$ 67.9 million from investment property. The difference of R$ million is due to the write-off of property, plant and equipment against the increase in credits receivable, referring to OSX's part in the Capex of the shared infrastructure of Terminal 2. As already announced, as OSX is not performing its obligations in the contract and is under judicial recovery, Prumo decided to allocate all of this amount in credits receivable to charge its rights in the contract. The main activities related to the investments made in the year are described below. Around R$ 1 billion was spent in 2014 on the construction of the T2 canal: R$ million in the breakwater R$ million on dredging the canal. R$ million in the sheet piles for the construction of the quay R$ 12.2 million in T-MULT and other R$ million was invested in 2014 in the construction of the T1 breakwater, as described in the item above in CAPEX FERROPORT. 11

13 R$ million was invested in the development and construction of other infrastructure works, as follows: R$ 77.0 million with land management and acquisition of land R$ 36.9 million on engineering projects and works management R$ 33.0 million on capitalized administrative expenses, including personnel and security services R$ 22.6 million on implementation of the 345 kv Transmission Line connecting the Port to the National Interconnected Grid R$ 13.6 million on road surfacing and maintenance R$ 8 million on sustainability R$ 15.5 million on operational control expenses and other expenses. In the last quarter of 2014 terminals T1 and T2 started up operations and the corresponding assets were reclassified to property, plant and equipment in use, and depreciation thereof commenced. Açu Port will continue capitalizing a number of loans, as there are works in progress. 12

14 Consolidated Simplified Analysis of the Income Statement (R$ k) Consolidated IFRS (R$ k) Change Net Operating Revenue 144,579 56,036 88,543 Cost of Sales (22,625) - (22,625) Gross Profit 121,954 56,036 65,918 General and Administrative Expenses (132,886) (152,223) 19,337 Sales Expenses (25,570) (9,033) (16,537) Other operating income (expenses) (15,510) 5,534 (21,044) Financial Income/Loss (2,362) (4,617) 2,255 Equity in income of subsidiaries 3, ,555 Net income before income and social contribution taxes (50,807) (150,140) 99,333 Net income (Loss) for the year (47,631) (135,841) 88,210 Earnings attributed to controlling interests Earnings attributed to noncontrolling interests (44,373) (115,793) 71,420 (3,258) (20,048) 16,790 The consolidated net revenue was R$ million in The increase in the period over 2013 is primarily due to the new contracts signed in the course of 2014 and the start-up of Ferroport's operations in October The revenue from the take or pay agreement with Anglo has been consolidated proportionally. Some 80 thousand tons of iron ore were loaded in the first operation, and a total of 240,000 tons were handled in the last quarter of 2014 in 3 ships. The net revenue for the take or pay agreement amounted to R$ 72.6 million (50% of the revenue recognized at Ferroport). The additional amount of R$ 71.9 million primarily consists of land lease to existing clients. 13

15 The initiation of iron-ore operations resulted in the inclusion of costs in the income statement, amounting to R$ 22.6 million. The main consolidated costs are described below: - Depreciation and amortization of R$ 7.8 million - Payroll charges of R$ 7.1 million - Outsourced services of R$ 3.0 million - R$ 4.7 million on consumption materials, rent and leasing, insurance and other expenses. The administrative expenses were R$ million, R$ 19 million less than in the previous year. The main reduction over 2013 was related to shared resources of R$ 14.5 million. In 2013 there were still costs being shared with EBX Group, which in 2014 were eliminated (except for R$ 1.8 million recognized in 3Q14, non-cash, related to regularization of advance donations to the EBX Institute in 2012.) In addition, the item salaries, charges, fees and bonuses contracted by R$ 8.5 million. The expenses in 2014 break down as follows: - Personnel expenses of R$ 64.3 million - Outsourced services of R$ 32.4 million - Taxes of R$ 9.6 million - Depreciation and amortization of R$ 7.9 million - Leasing and rental of R$ 4.9 million - travel and accommodation of R$ 3.1 million - shared services of R$ 1.8 million - other insurance of R$ 0.6 million - notices and publications of R$ 0.2 million - Other expenses of R$ 8.0 million. 14

16 Selling expenses amounted to R$ 24.3 million and refers to the OSX area rent, which with its bankruptcy filing, had his unpaid portions classified as selling expenses/services until July In addition, selling expenses were impacted by sharing expenses with sustainability costs with OSX in the amount of R$ 1.2 million. Total selling expenses in 2014 recorded the amount of R$ 25.5 million. Other operating expenses amounted to R$ 15.5 million and primarily refer to the provision of fines due to clients due to late performance of works at the Port. The consolidated net financial income in 2014 was a negative R$ 2.3 million. Financial expenses amounted to R$ 85 million, primarily consisting of interest, brokerage and monetary variance. Financial revenue was R$ 82.7 million, consisting primarily of loan interest, yields on short-term investments and interest earnings. The net loss in 2014 was R$ 47.6 million compared with R$ million in Simplified Analysis of the Balance Sheet (R$ k) Consolidated IFRS Balance sheet (R$ thousand) Change Current Assets 738,494 1,296,967 (558,473) Noncurrent Assets 6,053,025 3,706,557 2,346,468 Total Assets 6,791,519 5,003,524 1,787,995 Current Liabilities 1,328,588 1,340,616 (12,028) Noncurrent Liabilities 2,710,700 1,577,165 1,133,535 Shareholders' equity 2,752,231 2,085, ,488 Total Liabilities plus Shareholders' equity 6,791,519 5,003,524 1,787,995 After the capital increase at the end of the year in the amount of R$ 650 million the company ended the year 2014 with a balance of cash and cash equivalents of R$ million. 15

17 The company's debt increased from R$ 2.25 billion to R$ 3.2 billion including interest and monetary adjustment. This increase reflected the release of the new debt with BNDES with guarantee of Bradesco and Santander Bank in the amount of R$ 850 million of a total of R$ 900 million. The difference refers to the interest and monetary restatement in the period. Consolidated assets increased from R$ 2,761 million in 4Q13 to R$ 4,105 million in 4Q14 and the increase of R$ 1,344 million is associated with the physical progress in building the necessary infrastructure for operation of the Açu Port. In 2014, the investments made by the Company allowed our customers who had their units built to come into operation and also allowed us to move in the infrastructure of our MultiCargo terminal which will start operating in the second half of

18 Social and Environmental Responsibility Prumo believes that it plays a strategic, transforming social role in the areas where it operates and, for this reason, conducts its projects in a sustainable manner, with respect for people and for the environment. The company is implementing and disseminating CSR concepts, practices and procedures was marked by a number of social and environmental initiatives carried out by Prumo in the region of Campos and São João da Barra, where Açu Port is located. A number of educational initiatives were developed in the course of the year, such as "Health Commands on the Highways", participated in by 150 drivers. A blitz was also conducted in partnership with the highway police to carry out health examinations and provide tips for healthy living. The initiative benefited around 450 drivers. The Traffic Commission from the Sustainability Committee at Açu Port encouraged responsible driving by drivers who use the roads which provide access to the port during National Traffic Week. Drivers were given guidelines on road safety in the communities which are located nearby the development. On the educational front, Prumo sponsored initiatives such as the beekeeping course through the family farming program, provided for rural producers in São João da Barra. Classes were also given at the Port about native plant species, marine environment and environmental licensing to students from municipal primary schools in the region. Prumo also carried out a number of environmental education initiatives, such as the releasing of marine turtles, comprising the monitoring and protection program implemented by Prumo in partnership with the TAMAR project. Children and adolescents of the Botinho project accompanied the release of turtles and received information about the preservation of this endangered species. In partnership with companies operating at the Port, Prumo conducted the 1st Integrated Environment Week. Based on the theme of waste, the initiatives carried out in the week drew attention to the importance of recycling and collective waste collection. Another highlight was the launching of the Employability Network, a program that includes the local labor available in a single database. The goal is for all companies 17

19 that are setting up in the Industrial Complex, as well as service providers, to use this database for recruitment. The program aims to promote the venture's sustainability through the better management of the flow of labor. Capital Market and Corporate Governance Prumo's shares are listed on the New Market, the most rigorous level of corporate governance practices on the São Paulo Stock Exchange (Bovespa), reinforcing the importance of the capital market to the Company. In 2014 Prumo s stock enjoyed an average daily trading volume of R$ million and 2,276 transactions per day. As of December 30, 2014 Prumo had 2,777,474,711 shares. Prumo has a Board of Directors with 6 members, 2 of whom are independent. The Board meets quarterly, and extraordinarily whenever necessary. Prumo's Corporate Governance structure also includes an Audit Committee that advises the Board of Directors on activities related to the monitoring of the accounting practices used to prepare the Company and its subsidiaries financial statements and on the appointment and evaluation of independent auditors. The committee answers to the Company s Board of Directors and is independent from the Executive Board. 18

20 Income Statement Consolidated IFRS In thousands of reais 12/31/ /31/2013 Net rental revenue 144,579 56,036 Cost of sales (22,625) - Gross profit 121,954 56,036 Operating income (expenses) (173,966) (201,571) Sales expenses (25,570) (9,033) General and administrative expenses (132,886) (152,223) Provision for loss (LLX Brasil) - (45,849) Other revenue 25,037 10,763 Other expenses (40,547) (5,229) Net income before financial revenue (expenses) and tax (52,012) (145,535) Financial income (2,362) (4,617) Financial revenue 82,731 78,504 Financial expenses (85,093) (83,121) Equity in income of subsidiaries 3, Net income before tax (50,807) (150,140) Current income and social contribution taxes (10,258) (3,901) Deferred income and social contribution taxes 13,434 18,200 Net income from continued operations Net income (loss) for the period (47,631) (135,841) Income attributable to: Controlling shareholders (44,373) (115,793) Noncontrolling shareholders (3,258) (20,048) Net income (loss) for the period (47,631) (135,841) 19

21 PRUMO Logística S.A. Balance Sheet (in thousands of reais) Consolidated Assets 12/31/ /31/2013 Current Assets 738,494 1,296,967 Cash and cash equivalents 646, ,384 Trade receivables 45,487 6,764 Inventories 6, Prepaid expenses 4,405 9,354 Recoverable taxes 22,447 18,387 Other advances 2,009 13,142 Escrow account 2,773 3,494 Related parties - 37,331 Third-party receivables 1, ,667 Other 6,708 11,417 Noncurrent Assets 6,053,025 3,706,557 Deferred taxes 190, ,860 Related parties 48, ,234 Third-party assets in our possession 105,051 98,821 Judicial deposits 32,959 24,518 Returnable down payments 76,987 66,898 Third-party receivables 977,079 40,136 Capital expenditure 458, ,108 Property, plant and equipment. 4,105,512 2,761,300 Intangible assets 58,310 53,692 Total Assets 6,791,519 5,003,524 20

22 Balance Sheet (in thousands of reais) Consolidated 12/31/ /31/2013 Current Liabilities 1,281,219 1,340,616 Trade payables 240, ,598 Loans, financing and debentures 980, ,449 Related parties - 4,570 Liabilities towards third parties ,224 Taxes and contributions payable 7,478 7,382 Income and social contribution taxes payable 10,292 3,844 Salaries and charges payable 28,265 27,997 Other 13,278 2,552 Noncurrent Liabilities 2,758,069 1,577,165 Loans, financing and debentures 2,181,156 1,401,188 Taxes and contributions payable 62,783 36,381 Provision for contingencies 1,571 15,633 Liabilities towards third parties 497, ,624 Related parties - 19,880 Other liabilities 14,807 1,459 Shareholders' equity 2,752,231 2,085,743 Capital 2,574,612 1,924,612 Capital reserves 479, ,504 Equity appraisal adjustment Accumulated losses (258,021) (142,659) Net income for the year (44,373) (115,793) Total Liabilities plus Shareholders' equity 6,791,519 5,003,524 21

23 Information about the Conference Call Thursday, March 26 at 10:30 AM (Brasília time); 9:30 AM (US-ET). Telephone number for participants: Dial-in with connections in Brazil: Dial-in with connections in Brazil: Toll-free with connections in the US: Dial-in with connections in the US: Password for participants: Prumo Data for access to the presentation: (English) (Portuguese) Participants should connect 10 minutes before the conference call starts. Investor Relations Contacts: Eugenio Leite de Figueiredo - CFO and Investor Relations Officer Luiz Felipe Jansen de Mello - Investor Relations Manager Flávia Tavares - Senior Investor Relations Analyst ri@prumologistica.com.br / Press: Bárbara Bortolin - barbara.bortolin@prumologistica.com.br /

24 Prumo Logística S.A. Individual and consolidated financial statements December 31, 2014 Contents Management Report... 1 Independent auditor s report on financial statements... 3 Audited financial statements Balance sheets... 5 Statements of operations... 7 Statements of comprehensive income (loss)... 8 Statements of changes in equity... 9 Cash flow statements Statements of value added Notes to the individual and consolidated financial statements... 12

25 Message from the Chairman During 2014 Prumo made a series of changes implemented by the new controlling shareholder EIG, which initiated at the end of After the new CEO, Eduardo Parente, was appointed in February 2014, the Company reorganized its Executive Board and restructured its long-term business plan to adapt it to the vision of the new parent company. It also restructured its governance model in order to enhance its management and create the means and security for the new operational phase of Porto do Açu Operações S.A. ( Porto do Açu ). The arrival of the experienced Officers Marina Fontoura and Cristiane Marsillac, the creation of a new cycle of strategic planning, focusing on the operational start-up, procurement of new clients and development of new business to maximize the creation of value for Prumo. The arrival of Officer Eduardo Xavier at the beggining of 2015, who is experienced in regulations and the port sector, helped us implement our business plan. On the commercial front the Company managed to secure important partnerships in 2014, especially the signing of the contract for creating an offshore support base with Edison Chouest and the formation of a joint venture with Britannic Strategies Limited ( BP ) to distribute marine fuel. In addition to rent revenue, these contracts could attract new clients, thereby increasing the occupation of our landside yard and the movement of ships at Açu Port. The year was also marked by the onset of Prumo's operations. At Terminal 1 ( T1 ), Ferroport - a joint venture formed of 50% Prumo and 50% Anglo American - started receiving iron ore down the 529-km slurry pipeline. Operations commenced in October 2014 with the loading of the first ship handling iron ore. Following the first shipment, the payment stipulated in the take or pay agreement with Anglo-American was triggered in the second half of 2014, generating material revenue for Ferroport. Terminal 2 ( T2 ) also came into operation following the start-up of load handling by our clients located on the channel's banks. The construction of Açu Port also made the news this year. The physical advances on the main work fronts, in the creation of essential infrastructure for the operation of our terminals, and that of our clients, was impressive. The partnership with the suppliers operating on the construction of Açu Port and Prumo's employees was fundamental to delivering the structure necessary to safely start up operations. At the end of 2014, the Company underwent a new capital increase in the amount of R$ 650,000, (six hundred and fifty million reais). The parent company accounted for 99.98% and minority shareholders 0.02% of the fully subscribed and paid-in capital increase. The capital increase was necessary to prepare the Company for a new phase of investments in 2015, primarily consisting of the construction of new terminals at Açu Port to handle oil, project cargo and solid bulk, in addition to expanding the basic infrastructure in the Industrial District to cater for new clients. Also regarding the change in the corporate structure of Prumo, due to the fact Mr. Eike Fuhrken Batista and Centennial Asset Mining Fund LLC (jointly Mr. Eike Batista ) did not participate in the Company's capital increase, and as a consequence of 185,630,627 of their shares being transferred to Fundo Mubadala, Mr. Eike Batista saw his equity interest diminish to approximately 6.68% of Prumo's share capital. As a result of the reduction in the equity interest, the shareholders' agreement signed with the parent company EIG was cancelled and the Company was no longer a related party of the other companies of EBX Group. With a bolstered capital structure, operation start-up and its competitive edges, Prumo believes that 2015 will see Açu Port be consolidated as the best option for helping clients cut costs and solve their problems.

26 A free translation from Portuguese into English of Independent Auditors Report on financial statements Independent auditors report on financial statements The Shareholders, Board of Directors and Officers Prumo Logística S.A. Rio de Janeiro RJ We have audited the accompanying individual and consolidated financial statements of Prumo Logística S.A. ( Company ), identified as Parent Company and Consolidated, which comprise the balance sheets as of December 31, 2014 and the related statements of income, of comprehensive income, of changes in equity and cash flow for the year then ended, and a summary of significant accounting practices and other explanatory information. Management s responsibility for the financial statements Management is responsible for the preparation and fair presentation of the individual financial statements in accordance with accounting practices adopted in Brazil and the consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), and for such internal controls as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor s responsibility Our responsibility is to express an opinion on these financial statements based on our audit, conducted in accordance with Brazilian and International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether these financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the preparation and fair presentation of the Company s financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. An audit also includes evaluating the appropriateness of accounting practices used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 3

27 Opinion on the individual financial statements In our opinion, the individual financial statements referred to above present fairly, in all material respects, the individual financial position of Prumo Logística S.A. as at December 31, 2014, the individual performance of its operations and the corresponding cash flows for the year then ended, in accordance with the accounting practices adopted in Brazil. Opinion on the consolidated financial statements In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Prumo Logística S.A. as at December 31, 2014, the consolidated performance of its operations and the corresponding cash flows for the year then ended, in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB). Emphasis of a matter Without qualifying our conclusion, we draw attention to Note 1 of the financial statements, which discloses that the Company presented consolidated losses of R$ 47,631 thousand for the year ended December 31, 2014 and, at that date, the consolidated current liabilities exceeded its consolidated current assets by R$ 542,084 thousand. This note also discloses that a substantial part of the Company, its subsidiaries and jointly-controlled entities started the operations in the fourth quarter of 2014 and the conclusion of the construction in progress for the implementation of the business plan depends upon the financial support from shareholders and/or third-party s funds until the Company, its subsidiaries and jointly-controlled entities generate sufficient cash to maintain the operations. These conditions, as described in the referred explanatory note, indicates an uncertainty that causes significant doubt as to the Company s ability to continue as a going concern. This individual and consolidated financial statements were prepared on the assumption that the Company will continue as a going concern and do not include any adjustments that would be required if any of the investments fails to achieve the expected results. 4

28 Other matters - Statements of value added We have also audited the individual and consolidated statement of value added for the year ended December 31, 2014, prepared under the responsibility of Company s management, the presentation of which in the financial statements is required by the Brazilian Corporation Law for public companies, and as supplemental information for IFRS, which do not require the presentation of statement of value added. These statements have been subject to the same auditing procedures described above and, in our opinion, are presented fairly, in all material respects, in relation to the overall financial statements. Rio de Janeiro, March 12, ERNST & YOUNG Auditores Independentes S/S CRC - 2SP /O-6-F-RJ Wilson J. O. Moraes Accountant CRC - 1RJ /O-1 5

29 Prumo Logística S.A. Balance sheets (In thousands of reais) Company Consolidated Note Assets Current assets Cash and cash equivalents 6 371, , , ,384 Clients ,487 6,764 Inventories - - 6, Prepaid expenses ,405 9,354 Taxes recoverable 11,002 5,816 22,447 18,387 Sundry advances 462 1,149 2,009 13,142 Restricted bank deposits - - 2,773 3,494 Transactions with related parties 16 2, ,944-37,331 Receivables from third parties , ,667 Others 1, ,708 11,417 Total current assets 386,394 1,505, ,494 1,296,967 Noncurrent assets Deferred taxes , ,860 Judicial deposits ,959 24,518 Refundable deposits ,987 66,888 Transactions with related parties ,809-48, ,234 Third-party assets held by the Company ,051 98,821 Other receivables ,078 40,136 Investments Equity Interests 12 1,603, ,571 12,650 11,932 Investment properties , ,176 Property, plant and equipment 14 3,134 7,775 4,105,512 2,761,300 Intangible assets 15 5, ,310 53,692 Total noncurrent assets 2,437, ,014 6,053,025 3,706,557 Total assets 2,823,621 2,175,338 6,791,519 5,003,524 6

30 Company Consolidated Note Liabilities and equity Current liabilities Trade accounts payable 2,435 28, , ,597 Loans, financing and debentures , ,449 Transactions with related parties ,805-4,570 Liabilities with third parties ,224 Taxes payable 19 1,230 1,713 7,478 7,382 Income and social contribution taxes payable 19 9,523-10,292 3,844 Salaries and charges payable 15,971 13,427 28,265 27,997 Others ,637 2,552 Total current liabilities 29,780 48,224 1,280,578 1,340,616 Noncurrent liabilities Loans, financing and debentures ,181,156 1,401,188 Taxes payable ,783 36,381 Transactions with related parties ,880 Provision for contingencies ,212 15,633 Liabilities with third parties , ,624 Others ,807 1,459 Total noncurrent liabilities 1,867 1,197 2,758,710 1,577,165 Equity Capital 21 2,574,612 1,924,612 2,574,612 1,924,612 Capital reserves 479, , , ,504 Equity adjustment Accumulated losses (262,651) (218,278) (302,394) (258,452) Equity attributable to controlling interests 2,791,974 2,125,917 2,752,231 2,085,743 Noncontrolling interests Total equity 2,791,974 2,125,917 2,752,231 2,085,743 Total liabilities and equity 2,823,621 2,175,338 6,791,519 5,003,524 See accompanying notes. 7

31 Prumo Logística S.A. Statements of operations (In thousands of reais, except earnings (loss) per share, stated in reais) Company Consolidated Note Net revenue from sales and services ,579 56,036 Cost of sales (22,625) - Gross profit ,954 56,036 Operating income (expenses) Selling expenses (25,570) (9,033) Administrative expenses 26 (81,753) (113,447) (132,886 (152,223) Provision for asset loss (LLX Brasil) (45,849) Other revenues and expenses 27 (620) 3,287 (15,510) 5,534 Income (loss) before financial income (expenses), equity pickup and taxes (82,373) (110,160) (52,012) (145,535) Financial income (expenses) 28 Financial income 111,598 72,189 82,731 78,504 Financial expenses (1,216) (3,316) (85,093) (83,121) 110,382 68,873 (2,362) (4,617) Equity pickup (62,859) (67,863) 3, Income before taxes (34,850) (109,150) (50,807) (150,140) Current income and social contribution taxes 19 (9,523) (6,643) 3,176 14,299 Loss for the year from continued operations (44,373) (115,793) (47,631) (135,841) Loss attributable to: Controlling interests (44,373) (115,793) (44,373) (115,793) Noncontrolling interests - - (3,258) (20,048) Loss for the year 22 (44,373) (115,793) (47,631) (135,841) Earnings per share Basic and diluted loss per common share (in R$) ( ) ( ) ( ) ( ) See accompanying notes. 8

32 Prumo Logística S.A. Statements of comprehensive income (loss) (In thousands of reais) Company Consolidated Loss for the year (44,373) (115,793) (47,631) (135,841) Others comprehensive income (loss) Total comprehensive income for the year (44,373) (115,331) (47,631) (135,379) Attributable to: Controlling interests (44,373) (115,331) (44,373) (115,331) Noncontrolling interests - - (3,258) (20,048) See accompanying notes. 9

33 Prumo Logística S.A. Statements of changes in equity (Company and Consolidated) (In thousands of reais) Capital social Premium on share issue Granted stock options Capital reserve Share issue costs Capital realization - Ferroport Equity adjustment Accumulated losses Equity - Company (Continued) Deferred tax asset adjustment Law 11638/07 Total Noncontrolling interests Total equity Balance at January 1, , ,761 55, (383) (102,485) 904,667 (28,307) 876,360 70, ,166 Loss for the year (115,793) (115,793) - (115,793) (20,048) (135,841) Capital increase 1,300, ,300,068-1,300,068 4,243 1,304,311 Expenses with issuance of shares (31,617) (31,617) - (31,617) - (31,617) Recognized stock options - - 1, ,724-1,724-1,724 Transfer of equity interest , ,868 (11,867) 55,001 (55,001) - Balance at December 31, ,924, ,761 56,954 (31,617) 66, (218,278) 2,125,917 (40,174) 2,085,743-2,085,743 Loss for the year (44,373) (44,373) - (44,373) - (44,373) Capital increase 650, , , ,000 Expenses with issuance of shares (227) (227) - (227) - (227) Recognized stock options - - 1, ,881-1,881-1,881 Capital realization - Ferroport , ,294-47,294-47,294 Amortization Transfer of equity interest , , ,525-11,525 Balance at December 31, ,574, ,761 58,835 (31,844) 125, (262,651) 2,791,974 (39,743) 2,752,231-2,752,231 See accompanying notes. 10

34 Prumo Logística S.A. Cash flow statements (In thousands of reais) Company Consolidated Cash flows from operating activities Loss before taxes (34,850) (109,150) (50,807) (150,140) Non-cash P&L items Depreciation and amortization ,690 7,028 Write-off of cost of transaction ,201 - Write-off of property, plant and equipment 6,255-4,410 - Equity pickup 62,859 67,863 - (12) Monetary fluctuations and Interest (85,485) (51,282) 15,689 61,616 Provision for loss on assets ,849 Noncontrolling interest - - 3,258 - Allowance for doubtful accounts ,570 9,033 Reversal of the provision for bonus 4,800 (1,760) 6,809 (6,568) Stock-based compensation expenses 1,727 1,554 1,881 1,724 Others (786) (44,097) (92,067) 35,701 (32,256) (Increase) decrease in assets and increase (decrease) in Liabilities Restricted bank deposits ,201 Clients - - (38,723) (6,101) Inventory - - (6,474) 148 Others receivable 3 (508) (27) 660 Refundable deposits - - (3,622) (19,852) Taxes recoverable (6,798) (3,415) (3,395) (1,552) Receivables from third parties - - (429,742) (13,949) Prepaid expenses - - 4,949 - Other prepayments - - 5,095 - Trade accounts payable (25,844) 24,279 (158,208) 83,626 Transactions with related parties (162,683) 8,596 (4,367) (188,245) Other liabilities with third parties - - (10,996) 12,996 Taxes payable 1,909 1,390 8,877 (1,012) Salaries and charges payable (2,256) 286 (6,541) 8,686 Others accounts payable (25) ,081 1,205 Net cash provided by (used in) operating activities (239,791) (61,315) (597,392) 321,555 Cash flow from investing activities Acquisition of property, plant and equipment (2,087) 180 (1,071,420) (1,117,543) Receipt from the disposal of PP&E items , ,077 Acquisition of permanent investments in other companies (953,607) (304,421) - (11,932) Advance for future capital increase 8,227 (8,500) - - Intercompany - - (78,026) - Intangible assets (4,719) (319) (6,369) (2,088) Capital reserve - Ferroport ,482 - Investment properties - - (70,642) (66,439) Net cash used in investing activities (952,186) (313,060) (1,023,041) (936,925) Cash flow from financing activities Capital increase 650,000 1,300, ,000 1,300,068 Capital increase noncontrolling interests ,243 Share issue costs (227) (31,617) (227) (31,617) Interest paid - - (160,122) (152,951) Transaction cost - - (98,367) (58,924) Loans taken out - - 1,740,610 - Loans settled - - (812,866) - Client advances ,758 - Net cash used in financing activities 649,773 1,268,451 1,338,786 1,060,819 Increase in cash and cash equivalents (542,204) 894,076 (281,647) 445,449 At beginning of year 913,598 19, , ,935 At end of year 371, , , ,384 Increase in cash and cash equivalents (542,204) 894,076 (281,647) 445,449 See accompanying notes. 11

35 Prumo Logística S.A. (Formerly known as LLX Logística S.A.) Statements of value added (In thousands of reais) Company Consolidated Revenues Sales of goods, products and services ,579 56,425 Other revenues 419 3,287 10,725 10,557 Revenue from construction of own assets , ,974 Allowance for doubtful accounts - - (25,570) (9,033) 419 3, , ,923 Inputs acquired from third parties (including ICMS and IPI) Custos dos produtos, das mercadorias e dos serviços vendidos - - (22,625) - Materials, energy, third-party services and other expenses (16,538) (40,662) (371,658) (971,998) Loss/recovery of assets (6,255) - (6,260) (45,849) Other (132) (148) (335) (455) (22,925) (40,810) (400,878) (1,018,302) Gross value added (22,506) (37,523) 65,684 (52,379) Depreciation, amortization and depletion (597) (955) (7,777) (7,327) Net value added produced by the Company (23,103) (38,478) 57,907 (59,706) Value added received in transfer Equity pickup (62,859) (67,863) 3, Financial income 111,598 72,178 82,731 78,492 Deferred income tax - (6,643) 13,434 18,200 48,739 (2,328) 99,732 96,704 Total value added to be distributed 25,636 (40,806) 157,639 36,998 Distribution of value added Employees Direct compensation 19,730 20,078 24,986 22,810 Benefits 24,157 34,081 27,418 36,039 Unemployment Compensation Fund (FGTS) 2,089 3,090 2,499 3,351 45,976 57,249 54,903 62,200 Taxes Federal 19,002 10,638 31,187 23,532 State Municipal ,002 10,638 31,461 23,665 Debt remuneration Interest 857 3, ,949 81,910 Rent 4,174 4,059 4,957 5,064 5,031 7, ,906 86,974 Equity remuneration Loss for the year (44,373) (115,793) (44,373) (115,793) Noncontrolling interest in retained profits - - (3,258) (20,048) (44,373) (115,793) (47,631) (135,841) 25,636 (40,806) 157,639 36,998 See accompanying notes. 12

36 Prumo Logística S.A. 1. Operations Prumo Logística S.A. ( Prumo or Company ), was established on March 1, 2007, with the purpose of providing infrastructure and logistics skills, mainly in the port sector. The operations consist basically of storage, handling and shipping of iron ore and third-party cargo of all kinds, such as bulk solids (agricultural and industrial) and liquids, and lease of retroarea. Porto do Açu Operações S.A. ( Porto do Açu ) and LLX Minas-Rio Logística Comercial Exportadora S.A. ( Ferroport ) started its operations of shipment at Terminals T1 and T2 on the last quarter of Porto do Açu started on 2011 its activities of lease of retroarea and on November of 2014 started its operations of shipment at cannal on T2 terminal. Ferroport started its operations on October of 2014, through the first shipment of iron ore at terminal T1. On October 25, 2014, Ferroport started up with its first shipment of iron ore at terminal T1. Update of LLX Açu Corporate name On September 01, 2014 through Extraordinary General Meeting LLX Açu Operações Portuárias updated its name to Porto do Açu Operações S.A.. Impairment Analysis Prumo shares closed the exercise of December 2014 at R$0.43, which is, less than the consolidated net book value at the same date of R$1.00 per share. Based on the impairment test, as described in Note 14 - Property, plant and equipment, Management concluded that a provision for losses is not required as of December 31, The Company at December 31, 2014 presented a net working capital deficiency. Management's strategy for the short-term includes the following matters: Negociation with BNDES, Bradesco and Santander to extend loans; Renegotiation and the revalidation of the letter of classification entered into with BNDES and dated September 19, 2013, under Long-term Project Finance, valued at approximately R$2.8 billion, consistent with the nature of the Company's investment. From the total amount R$2,2 billion were authorized and used by the company; and Additionally, management is analyzing other alternatives to obtain funds to conclude the project and implement its business plan. 13

37 Prumo Logística S.A. 1. Operations (Continued) Açu Port The port covers an area of 90 km 2 (square kilometers) and is strategically located in northern Rio de Janeiro state, in the city of São João da Barra, and it is approximately 150 km far from the Campos Basin. This is a private, mixed-use port within the port-industry concept, with depth between 10.0 and 18.5 meter-deep and expandable to 25 meters in phase 2. The Açu Port features one offshore terminal (T1) and one onshore terminal (T2), which together can get 17 km of pier and achieve the capability to receive 47 vessels simultaneously, including large ships. This port complex is divided into two companies: Ferroport is a joint owner of an area of 300 hectares, which is intended for iron ore processing, handling, storage and is co-owner of an offshore structure comprising an access bridge, access canal, breakwater and up to four berths for iron ore loading. Operations at this area began on October 25, 2014 with the shipment of 80 thousand tons of iron ore. In the fourth quarter of 2014, the Ferroport shipped 240,000 tons of iron ore. The entity is a subsidiary jointly-controlled by the Company and Anglo American Participações Minério de Ferro Ltda. ( Anglo American ). Ferroport is part of a contract (Asset Allocation Agreement) signed by Anglo American and Porto do Açu, which establishes that the company is responsible by construction of T1 Terminal, including condominium assets, the contract also establishes details about asset allocation among parties, payments, transfers and percent of indivisible assets. These assets are transferred by cost plus a fee (mark-up) established in contract. Porto do Açu has an area of approximately 9 thousand hectares which is intended to house an industrial complex, futhermore built an onshore canal 300 meters wide and 6.5 kilometers long, with depth of up to 14,5 meters which includes a terminal for handling varying cargo. 14

38 Prumo Logística S.A. 1. Operations (Continued) Begin of operations On fourth quarter of 2014, the operations became on T1 and T2 Terminals in the Açu Port. In October 2014, the Company started its operations and accomplished the first shipping of approximately 80 thousand tons of iron ore on T1, by Ferroport. The iron ore shipment and begin of operations is supported by Take-or-pay agreement with shareholder Anglo American, establishing the loading of ore of 26 million WMT (Wet Metric Ton) for shipment of iron oren at US$7.10 (seven dollars and ten cents) per WMT, to be adjusted by Producer Price Index ( PPI ) per annum. As informed to the market on September 02, 2014, Ferroport and Anglo American renegotiated certain contractual conditions related to the beginning of the operation of Ferroport, in which Anglo American has agreed to pay the monthly installments for the Takeor-pay contract irrespective of the occurrence of the first shipment; Anglo American has the right of compensate the installments for the period between September, 2014 and the date of the first shipment, limited to the portion of February The first iron ore loading operation occurred in October of 2014, and after December of 2014, the contract is effective under the above conditions. For the last quarter of 2014 the contract pf take-or-pay generated revenues of R$72,682 at consolidated (related to 50% of Ferroport s revenue). On November 14, 2014 the operation on T2 terminal became when the Happy Dinamic vessel docked at the terminal. After begining of operations, the capitalization of interest from loans were stopped proportionally and the assets are being depreciated. Both companies, Ferroport and Porto do Açu also has work in progress related to conclusion of work, and need additional cash to conclude its by business plan. The capital expenses are necessary to attend some specification related to contracts at T1 and T2 terminals, as breakwater and cannal. 15

39 Prumo Logística S.A. 1. Operations (Continued) Due to its location near the basins of Campos, Santos and Espírito Santo, the Açu Port is set in a strategic location to perform consolidation and treatment of oil at T1, serve as a support base for offshore exploration and production operations, and attract projects dedicated to the oil and gas industry. In addition to the future logistics support services, Porto do Açu leases part of its retro area to companies that are in the process of installing their units in the port. On April 9, 2014, Açu Port entered into an agreement with Edison Chouest ( ECO ), a leader in the maritime industry, to install an Offshore Support Facility to serve its current customers and a shipyard dedicated to provide repair services for its own vessels. The lease contract covers an area of 255,200 sqm on the canal of Terminal 2, for a term of 15 years, renewable for another 3 periods of 5 years. In addition to the revenue arising from the lease of the area, the contract provides for collection of access tariffs paid by every ship entering the canal. On September 09, 2014, Açu Port signed an addendum with ECO to expand the current leased area from 284,200 square meters. With the current area expansion, the original pier of 440 meters will reach 490 meters. The contract also expects additional area thus, if all options under the agreement are exercised, ECO will have a total area of 574,200 square meters with a 990 meters long pier. Construction has already begun under the customer s responsibility and operations are expected to begin in the first half of Açu Port and ECO also agreed on analyzing together, under a non-binding agreement, the possibility of implementing a shipyard for ship repair to be located along the breakwater of Terminal 2. On May 02, 2014, Açu Port entered into a lease agreement with NFX, a joint venture constituted by 50% Prumo and 50% Britannic Strategies Limited ( BP ), for the occupation of an area of 215,079 square meters. This area is located at the right margin of canal T2 and it will have a depth of 14.5 meters. The contract establishes a period of 5 years renewed by 15 years more and right of extension of two more periods of 20 years. On September 12, 2014, Açu Port exercised its right to terminate the lease agreement entered into with UTE Porto do Açu Energia S.A. and Eneva S.A. on November 24, 2010, due to nonperformance by the same of commercial terms. 16

40 Prumo Logística S.A. 1. Operations (Continued) At the same date, Porto do Açu was informed by GE Oil & Gas do Brasil Ltda. ( GE ) of their decision to terminate the agreement entered into on November 28, 2012 for the installation of an industrial unit at the Açu Port. The agreement had not generated any recurring lease revenue to the Company since it was entered into, since the conditions required to commence payment had not yet been fulfilled. On December 4, 2014, Porto do Açu entered into an agreement with Marca Ambiental, a company specialized in multi technologies for integrated waste management, which will use the area to provide services of pickup, treatment and disposal of waste in general. The Marca Ambiental leased an area of 5,896 square meters, located at the end of Terminal 2, with a 100 meters long pier which will be composed of two berths with capability to receive PSVs (Platform Supply Vessels) of up to 90m. The lease agreement lasts for 12 years, and is renewable for an equal period of time. Brazil Port On July 24, 2014, the Company formally decided to suspend its investments in the Brazil Port project, located in the municipality of Peruíbe, state of São Paulo, of its subsidiary LLX Brasil Operações Portuárias S.A. ( LLX Brasil ). The Company also dissolved the agreement and its amendments that vested it with rights to acquisition of the real properties where the project would be developed. The total investment amount of R$45,849, had already been recognized as a loss in June 2013, given the uncertainties at that time. 17

41 Prumo Logística S.A. 1. Operations (Continued) New controlling shareholder As announced in a press release, on September 15, 2013 Mr. Eike Furken Batista, Centennial Asset Mining Fund, Prumo, Centennial Assets Participações,, EBX Brasil, EBX Holding, LLX Açu and LLX Brasil entered into an Investment Agreement with EIG LLX Holdings S.A.R.L ( EIG ), which entails a capital contribution of up to R$1,3 billion in the Company, and the assignment by Mr. Eike Furken Batista and Centennial Asset Mining Fund LLC ( Controlling Shareholders ) to EIG of pre-emptive rights to subscribe to the capital increase, with minority shareholders being assured their pre-emptive rights pursuant to art. 171 of Law 6404/76. So on that date EIG became the controlling shareholder with 52,82% of participation and the prior controlling shareholders became non-controlling with 20,88%. Also under the Agreement, on October 14, 2013 the Company acquired a 30% interest in Porto do Açu, hitherto held indirectly by the former controlling shareholder, subject to the payment of R$1.00 (one real), each one. These transfers were recorded in October and November 2013 as an increase in the investments in the parent company Prumo of R$66,406, and charged to shareholders' equity - capital reserves as they are essentially capital contributions made by the former controlling shareholder. On December 30, 2014, controlling shareholder EIG subscribed the capital increase, amounting of R$650,000, with the issuance of 1,000,000 new ordinary shares, and informed the termination of the Shareholders' Agreement between EIG, Mr. Eike Fuhrken Batista and Centennial Asset Mining Fund LLC, as faculted at the same agreement, the right of EIG of terminate the Shareholders' Agreement if the shareholding of Eike Batista, (held directly or indirectly) be reduced to less than 10 % (ten percent) of the common shares issued by the Company. Was announced to the market on November 13, 2014 that Eike Batista transferred 9,29% of its participation on Prumo s Capital to Mubadala and no subscribed its option on capital increase on December. As a result of transaction mentioned above, Mr. Eike Batista has no more significative influence and participation in the control of the Company and the companies from EBX Group are not being considered as related party to companies Prumo Group. Thus, Mr. Eike Batista had no more right to indicate a member to the council board and has no more significant influence on the Company, therefore the companies of EBX Group were not considered as related parties from December 30, On December 2014 EIG had 74,27% of total shares issued by the Company. 18

42 Prumo Logística S.A. 2. Licenses and permits Licenses and permits in force as at December 31, Company Type Ship date Effective period Açu Port Açu Port Açu Port Preliminary License (LP) No. IN which approves designing and locating structures of common use in the Industrial District of São João da Barra (DISJB), including the road-rail system, implementation of Campos - Açu canal at the Quitingute stretch UCN, energy network system and other structures. Preliminary Installation License (LPI) Nº IN021739, which approves devising, locating and implementing a berth for a flexible unit to transfer liquefied natural gas. Preliminary Installation License (LPI) No. IN approving the design and location of the South Terminal. 10/30/ /30/ /10/ /10/ /16/ /16/2015 Açu Port Açu Port Açu Port Preliminary Installation License (LPI) No. IN approving the design and location for disposal of the Access Canal dredged materials from the construction of the Shipbuilding Facilities UCN. Preliminary Installation License (LPI) No. IN025183, which approves devising, locating and implementing two ground support deposits (2 and 7) for the disposal of dredged materials from the Açu Shipbuilding Facilities access canal, with suppression of native vegetation (14.11 ha of sandbanks) and cutting of exotic vegetation in an area with 2.67 ha of Euphorbia tirucalli hedges, located at Highway RJ Açu, Industrial District, Municipality of São João da Barra. Installation License (LI) No. IN and AVB approving the design of the South Terminal, a port plant intended for the handling of cargo and products for import and export (bulk solids and liquids of various types, general cargo and project cargo), with suppression of native vegetation (6.5 of sandbanks) and cutting of exotic vegetation in an area of 0.7 ha of eucalyptus found in the intervention area and also capturing, transporting, rescuing and monitoring of wildlife. 11/26/ /01/ /18/ /28/ /17/ /15/

43 Prumo Logística S.A. 2. Licenses and permits (Continued) Açu Port Açu Port Açu Port Açu Port Açu Port Simplified Environmental License (LAS) No. IN approving the design, location, implementation and operation of a temporary crushing facility within the logistics yard of the Industrial Complex of the Açu Port. Installation License (LI) No. IN and AVB approving the implementation of a temporary advanced building site to support the implementation of the Shipbuilding Facility. Preliminary Installation License (LPI) No. IN which approves devising, locating and implementing the South Terminal infrastructure, which comprises the paving of roads, main entrance facilities, implementing drainage and water distribution systems, located at Saco Dantas Farm. Installation License (LI) No. IN027911, which approves a 58-km-long, double-circuit electric power transmission line of 345KV, with a power substation and suppression of native vegetation (1.42 ha of sandbanks). Installation License (LI) No. IN and AVB No , which approves implementing a navigation canal, consisting of a sea access canal (offshore) and a berth canal (onshore) and implementing wharf, jetty and pier structures. 02/18/ /18/ /23/ /23/ /25/ /31/ /05/ /24/ /07/ /07/2017 Pedreira Sapucaia Ferroport Operation License (LO) No IN016484, which approves the mining activity of granite blocks for use in civil construction, in a mining area of ha within an area of 21.8 ha. Installation License (LI) No. IN which renews IN to continue construction for implementing the Açu Port terminal located at Saco Dantas Farm, Barra do Açu, in the municipality of São João da Barra. 05/02/ /02/ /13/ /13/

44 Prumo Logística S.A. 2. Licenses and permits (Continued) Ferroport Ferroport Ferroport Operation License (LO) No. IN027024, which approves operations related to the following activities and facilities: receiving iron ore slurry, iron ore slurry filtration facility, storage yard, ore transfer facility, access point, ore loading pier, areas of utilities and workshop, administrative area, submarine sewage outfall, sea-gauge maintenance dredging, transshipment of vessel waste and residues and shipment of foods, inputs and drinking water. Granting of Rights to the use of Water Resources (OUT) No. IN authorizes raw water extraction using a tube well, intended for human consumption as well as using it for other purposes (civil construction and road wetting), in the RH-IX Hydrographic Region Lower Section of Paraíba do Sul River. Transaction Release Term (TLO) No. 9 authorizes commencement of operations at the private-use port terminal, located at Barra do Açu, Saco Dantas Farm, Açu Port. 05/13/ /29/ /10/ /10/ /02/ /02/ Entities of the Group Equity interest Country Direct subsidiaries LLX Minas-Rio Logísitca Comercial Exportadora S.A. ( Ferroport ) (*) Brazil 50.00% 51.00% Porto do Açu Operações S.A. ( Porto do Açu ) Brazil % % LLX Brasil Operações Portuárias S.A. ( LLX Brasil ) Brazil % % NFX Combustíveis Marítimos Ltda. ( NFX ) (**) Brazil 50.00% 50.00% Indirect subsidiaries GSA - Grussaí Siderúrgica do Açu Ltda. ( GSA ) Brazil % % Gás Natural Açu Ltda. ( Gás Natural ) Brazil % % Reserva Ambiental Fazenda Caruara S.A. ( Reserva Ambiental Caruara ) Brazil % % G3X Engenharia Ltda. ( G3X ) Brazil % % Pedreira Sapucaia Ind. e Comercio Ltda. ( Pedreira Sapucaia ) Brazil % % LLX Empresa Brasileira de Navegação Ltda. ( EBN ) Brazil % % SNF Siderúrgica do Norte Fluminense S.A. Brazil % % Fundo de Investimentos em Cotas de Fundos de Investimento Multimercado Crédito Privado LLX 63 Brazil 99.99% 99.99% (*) Shared control, pursuant to the Shareholders Agreement which grants the same rights held by the Company to the shareholders of Anglo American and Centennial Asset Participações Minas-Rio S.A. ( Centennial Asset ), companies under the same business group jointly holding 50% of shares. (**) Joint venture, pursuant to the first amendment to the articles of incorporation, executed on October 14, 2013, which guarantees the same powers to the Company and Britannic Strategies Limited. 21

45 Prumo Logística S.A. 3. Entities of the Group (Continued) In the year ended December 31, 2014, Prumo Group ( Prumo and subsidiaries ) is represented as follows: 22