Independent auditor s report on review of quarterly financial information

Transcription

1 A free translation from Portuguese into English of Independent Auditor s Report on Individual and Consolidated Financial Statements prepared in Brazilian currency in accordance with accounting practices adopted in Brazil and International Financial Reporting Standards (IFRS), issued by International Accounting Standards Board (IASB) Independent auditor s report on review of quarterly financial information The Shareholders, Board of Directors and Officers Log-In Logística Intermodal S.A. Rio de Janeiro - RJ Introduction We have reviewed the individual and consolidated interim financial information contained in the Quarterly Information Form (ITR) of Log-In Logística Intermodal S.A. ( Company ) for the quarter ended March 31, 2015, which comprises the balance sheet as at March 31, 2015 and the related income statements, statements of comprehensive income, statements of changes in equity and cash flow statements for the three-month period then ended, including the explanatory notes. Management is responsible for the preparation of this individual and consolidated interim financial information in accordance with Accounting Pronouncement CPC 21 Interim Financial Statements and international standard IAS 34 Interim Financial Reporting, issued by the International Accounting Standards Board (IASB), as well as for the fair presentation of this information in conformity with specific rules issued by the Brazilian Securities and Exchange Commission (CVM), applicable to the preparation of Quarterly Financial Information (ITR). Our responsibility is to express a conclusion on this interim financial information based on our review. Scope of review We conducted our review in accordance with Brazilian and International Standards on Review Engagements (NBC TR Review of Interim Financial Information Performed by the Independent Auditor of the Entity, and ISRE Review of Interim Financial Information Performed by the Independent Auditor of the Entity, respectively), which consisted of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion on the individual and consolidated interim financial information Based on our review, nothing has come to our attention that causes us to believe that the accompanying individual and consolidated interim financial information included in the quarterly information referred to above is not fairly prepared, in all material aspects, in accordance with 1

2 CPC 21 (R1) and IAS 34 applicable to the preparation of quarterly information (ITR), and presented consistently with the rules issued by the Brazilian SEC (CVM). Other matters Statements of value added We have also reviewed the individual and consolidated interim statements of value added (SVA) for the three-month period ended March 31, 2015, prepared under Company management responsibility, whose presentation in the interim financial information is required by rules issued by the Brazilian SEC (CVM) applicable to preparation of Quarterly Information (ITR), and as supplementary information by IFRS, which do not require SVA presentation. These statements have been subject to the same review procedures previously described and, based on our review, nothing has come to our attention that causes us to believe that they were not fairly prepared, in all material respects, in relation to the overall accompanying interim financial information. Rio de Janeiro, May 13, ERNST & YOUNG Auditores Independentes S/S CRC - 2SP /O-6 - F - RJ Gláucio Dutra da Silva Accountant CRC 1RJ /O-4 2

3 Log-In Logística Intermodal S.A. Interim Financial Statements at March 31st, 2015 and report on review Ernst & Young Auditores Independentes S.S. 1

4 BALANCE SHEET AT MARCH 31, 2015 AND DECEMBER 31, 2014 (In thousands of reais) ASSETS Consolidated (IAS 34 and CPC 21) Parent Company (CPC 21) Note ASSETS CURRENT Cash and cash equivalents 4 43,499 15,360 32,180 6,742 Trade accounts receivable 5 165, , , ,857 Related Parties ,123 4,568 Inventories 13,765 14,735 11,088 12,050 Insurance receivable 1,927 1, ,337 Advances to suppliers and multimodal agents 1,413 1, Recoverable taxes 7 39,434 39,149 16,131 15,690 Merchant Marine Fund-AFRMM 3 169, , , ,141 Prepaid expenses 8,861 6,263 7,675 4,914 Other Current Assets 8,091 5,603 7,640 5,198 Total Current Assets 452, , , ,034 NON-CURRENT Trade accounts receivable 5 12,147 12,433 1,006 1,239 Recoverable taxes 7 4,408 5,894 4,408 5,894 Deferred income tax and social contributions 8 154, , , ,996 Escrow deposits 14 35,120 35,048 32,385 32,270 Unrealised gains from financial instruments 11, 20 55,737 19,523 38,755 15,298 Other Non-Current Assets Investments , ,204 Property, plant and equipment, net 10 1,484,321 1,442,401 1,264,776 1,219,860 Intangibles assets 10 33,312 35,911 21,591 23,843 Total Non-Current Assets 1,779,549 1,711,882 1,747,778 1,683,604 TOTAL ASSETS 2,231,745 2,133,250 2,138,057 2,051,638 The accompanying notes are an integral part of the interim financial statements. 2

5 BALANCE SHEET AT MARCH 31, 2015 AND DECEMBER 31, 2014 (In thousands of reais) LIABILITIES AND SHAREHOLDERS' EQUITY Consolidated (IAS 34 and CPC 21) Parent Company (CPC 21) LIABILITIES Note CURRENT Current portion of long-term financing and loans , , , ,581 Suppliers 12 82,494 94,934 70,859 80,170 Payroll and related charges. 9,884 8,820 6,566 5,884 Related Parties ,232 3,848 Income tax and social contributions payable. 1,688 1, Taxes and contributions payable 8,001 6,759 6,250 5,435 Advances payable. 1,079 1, Merchant Marine Fund-AFRMM Operating provisions ,013 31,543 38,481 31,011 Port operation concession liability 1,186 1, Other Current Liabilities. 27,427 32,640 24,092 29,856 Total Current Liabilities 459, , , ,135 NON-CURRENT Financing and loans 11 1,336,591 1,187,483 1,292,852 1,154,919 Liabilities with financial instruments 11, 20 55,737 19,523 38,755 15,298 Suppliers 12 1,078 1, Related Parties ,063 26,992 Provisions for contingencies 14 27,075 27,686 9,753 9,513 Port operation concession liability 5,827 5, Operating provisions 13 1,049 1,246 1,049 1,246 Other Non-current Liabilities 3,727 3,727 3,727 3,727 Total Non-current Liabilities 1,431,084 1,246,819 1,385,199 1,211,695 STOCKHOLDERS EQUITY 15 Share capital 600, , , ,000 Treasury shares (50,922) (50,922) (50,922) (50,922) Revenue reserves 6,310 6,310 6,310 6,310 Cumulative losses (214,253) (83,281) (214,253) (83,281) Cumulative translation adjustments 43 (299) 43 (299) Equity attributable to controlling shareholders 341, , , ,808 Non-controlling shareholder interest , , , ,808 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 2,231,745 2,133,250 2,138,057 2,051,638 The accompanying notes are an integral part of the interim financial statements. 3

6 CONSOLIDATED AND PARENT COMPANY INTERIM INCOME STATEMENTS FOR THE THREE MONTH PERIODS ENDED MARCH 31, 2015 AND MARCH 31, 2014 (In thousands of Brazilian reais, except for earnings per share) Consolidated (IAS 34 and CPC 21) Parent Company (CPC 21) Three month period ending Three month period ending Note NET OPERATING INCOME , , , ,150 COST OF FREIGHT AND SERVICES 22 (229,518) (207,778) (202,652) (178,322) GROSS PROFIT 33,792 12,326 24, OPERATING INCOME (EXPENSE): 23 Administrative and selling (15,474) (16,415) (14,455) (14,276) Labor, civil and tax contingencies/reversals 515 1,654 (94) (1,645) Funds with AFRMM subsidy invested 3 17,257 22,636 17,257 22,636 Other operating income (expenses), net (2,118) 3,552 (960) 549 Share of profits of subsidiaries and associates - - 5,619 9, ,427 7,367 17,134 OPERATING INCOME BEFORE NET FINANCE INCOME 33,972 23,753 31,664 17,962 NET FINANCE INCOME: 24 Finance income 52,409 7,976 38,332 6,700 Finance costs (38,569) (28,874) (37,344) (23,733) Monetary and exchange variations, net (169,636) 23,008 (157,320) 19,175 (155,796) 2,110 (156,332) 2,142 LOSS BEFORE INCOME TAX AND SOCIAL CONTRIBUTIONS (121,824) 25,863 (124,668) 20,104 INCOME TAX AND SOCIAL CONTRIBUTIONS 8 Current (2,974) (5,656) - - Deferred (6,169) (81) (6,304) 10 (9,143) (5,737) (6,304) 10 PROFIT (LOSS) FOR THE PERIOD (130,967) 20,126 (130,972) 20,114 PROFIT (LOSS) ATTRIBUTABLE TO: Shareholders of the Parent Company 16 (130,972) 20,114 Non-controlling shareholder interest 5 12 (130,967) 20,126 EARNINGS (LOSS) PER SHARE: 16 Basic (centavos per share) (1.53) 0.24 (1.53) 0.23 Diluted (centavos per share) (1.53) 0.24 (1.53) 0.23 The accompanying notes are an integral part of the interim financial statements. 4

7 INTERIM STATEMENT OF COMPREHENSIVE INCOME FOR THE THREE MONTH PERIODS ENDING MARCH 31, 2015 AND MARCH 31, 2014 (In thousands of reais) Consolidated (IAS 34 and CPC Parent Company (CPC 21) Note COMPREHENSIVE INCOME: Profit (loss) for the period (130,967) 20,126 (130,972) 20,114 Other comprehensive income: Translation adjustments of foreign subsidiaries (467) 342 (467) TOTAL COMPREHENSIVE INCOME FOR THE PERIOD (130,625) 19,659 (130,630) 19,647 TOTAL COMPREHENSIVE INCOME ATTRIBUTED TO: Shareholders of the Parent Company (130,630) 19,647 (130,630) 19,647 Non-controlling shareholder interest TOTAL COMPREHENSIVE INCOME FOR THE PERIOD (130,625) 19,659 (130,630) 19,647 The accompanying notes are an integral part of the interim financial statements. 5

8 INTERIM STATEMENT OF CHANGES IN EQUITY FOR THE THREE MONTH PERIODS ENDING MARCH 31, 2015 AND MARCH 31, 2014 (In thousands of reais) Revenue reserves Total attributable Total AFRMM Cumulative to equity holders Non olidated Equity Share Treasury Incentives Legal Investment Special Retained translation Parent Company Controlling (IFRS and Capital Shares Reserve Reserve Reserve Reserve Earnings adjustments (BR GAAP) Interest BR GAAP) Balance at January 31, ,000 (50,922) 29,153 21,965 25,428 3,717 - (111) 556, ,317 Profit for the period ,114-20, ,126 Translation adjustments on investment in foreign subsidiaries (467) (467) - (467) Balance at March 31, ,000 (50,922) 29,153 21,965 25,428 3,717 20,114 (578) 575, ,976 Balance at January 31, ,000 (50,922) 6, (83,281) (299) 471, ,914 Loss for the period (130,972) - (130,972) 5 (130,967) Translation adjustments on investment in foreign subsidiaries Balance at March 31, ,000 (50,922) 6, (214,253) , ,290 The accompanying notes are an integral part of the interim financial statements. 6

9 INTERIM STATEMENT OF CASH FLOWS FOR THE THREE MONTH PERIODS ENDING MARCH 31, 2015 AND MARCH 31, 2014 (In thousands of reais) Cash flows from operations: onsolidated (IAS 34 and CPC 21) Parent Company (CPC 21) Profit (loss) for the period (130,967) 20,126 (130,972) 20,114 Adjustments to reconcile net income (loss) for the period with cash provided by operating activities: Share of profits (losses) in subsidiaries and associates - - (5,619) (9,870) Depreciation and amortization 16,161 15,802 11,092 11,253 Deferred income tax and social contributions 6, ,304 (10) Reversal of labor, civil and tax contingencies (515) (1,654) 94 1,645 Operating provisions 7,273 16,210 7,273 16,210 Interest and monetary and exchange variations, net 148,493 (7,884) 147,923 (4,863) AFRMM appropriate in the period, net of the amortized ammount by the FMM (1,431) (16,401) (1,431) (16,401) Other (3,153) 857 (3,172) (626) 42,030 27,137 31,492 17,452 Decrease (increase) in assets: Accounts receivable and related parties 5,297 (21,471) 8,613 (14,095) Inventories 970 (680) 962 (509) Recoverable taxes 1,740 (779) 1,045 (1,557) Advances to suppliers and multimodal agents 291 (324) (310) (61) Insurance receivable (223) (3,748) 943 (3,748) Other (4,715) (3,223) (4,832) (2,771) 3,360 (30,225) 6,421 (22,741) Increase (decrease) in liabilities: Accounts payable and related parties (17,363) 1,094 (11,754) (2,398) Payroll and related charges 1, ,114 Taxes and contributions 1,311 4, ,598 Advances to suppliers and multimodal agents (44) (109) (27) 32 Port concessions and other (2,907) 3,455 (3,327) 2,920 (17,939) 9,103 (13,611) 6,266 Net cash provided by (used in) operating activities 27,451 6,015 24, Cash flows from investing activities: Deposits and guarantees 225 (948) 126 (994) Additions to property, plant and equipment and intangible assets (48,083) (17,233) (46,355) (16,454) Decrease in investment ,670 Dividends and interest on own capital received - - 2,066 8,991 Net cash used in investing activities (47,858) (18,181) (44,163) (2,787) Cash flows from financing activities: Loans and financing obtained 152,481 52, ,481 38,000 Related company Loans and financing obtained ,949 32,000 Payment of principal and interest on loans (103,935) (63,464) (98,131) (62,105) Dividends and interest on own capital paid Net cash provided by (used in) financing activities 48,546 (10,569) 45,299 7,895 Increase (decrease) in cash and cash equivalents 28,139 (22,735) 25,438 6,085 Cash and cash equivalents at beginning of period 15,360 82,468 6,742 40,299 Cash and cash equivalents at end of period 43,499 59,733 32,180 46,384 Payments made during the period for: Income tax and social contributions (1,304) (5,052) - - Interest and foreign exchange on financing (18,510) (3,832) (17,599) (5,518) Non-cash transactions: Income tax and social contribution compensation (1,737) (1,525) - - Capitalized Interest and exchange rate changes 7,252 5,413 7,252 5,413 The accompanying notes are an integral part of the interim financial statements. 7

10 INTERIM STATEMENT OF VALUE ADDED FOR THE THREE MONTH PERIODS ENDED MARCH 31, 2015 AND MARCH 31, 2014 (In thousands of reais) Consolidated (IAS 34 and CPC 21) Parent Company (CPC 21) Value added generated Revenue generated: 293, , , ,634 Revenue from freight and services provided 292, , , ,811 Allowance for doubtful accounts (accrued)/reversed 613 (2,311) 613 (1,177) Raw materials used to generate revenues from services (reduced): (113,960) (101,044) (101,892) (93,418) Contracted services (96,806) (90,306) (87,979) (78,745) Materials (2,694) (3,209) (1,816) (2,458) Fuel and gas (21,641) (27,881) (21,167) (27,443) Reversal of labor, civil and tax contingencies 515 1,654 (94) (1,645) Other income, net 6,666 18,698 9,164 16,873 Gross value added 179, , , ,216 Depreciation and amortization (16,047) (15,802) (11,092) (11,253) Net value added 163, , ,944 95,963 Value added received from transfer: 56,029 8,018 45,866 14,821 Equity income - - 5,619 9,870 Finance income 56,029 8,018 40,247 4,951 Total value added to distribute 219, , , ,784 Distribution of value added Employees: 33,384 27,291 24,555 18,588 Remuneration 26,016 21,138 19,121 14,252 Benefits 5,866 4,822 4,362 3,393 Guarantee Fund for Time of Service - FGTS 1,502 1,331 1, Government: 42,843 38,502 36,374 27,598 Federal 30,698 27,645 26,243 19,120 State 10,012 8,344 9,974 8,295 Municipal 2,133 2, Remuneration of third party capital: 274,004 50, ,853 44,484 Finance costs 210,718 5, ,477 1,945 Leases and rentals 63,286 45,325 61,376 42,539 Remuneration of own equity: (130,967) 20,126 (130,972) 20,114 Profit (loss) for the period (130,972) 20,114 (130,972) 20,114 Non-controlling shareholder interest Total value added distributed 219, , , ,784 The accompanying notes are an integral part of the interim financial statements. 8

11 NOTES TO THE INDIVIDUAL AND CONSOLIDATED INTERIM FINANCIAL STATEMENTS ON MARCH 31, 2015 (In thousands of Brazilian reais, except for earnings per share) 1. OPERATIONS A Log-In Logística Intermodal S.A., ( Log-In or Company ), is a publicly-traded limited company headquartered in the city of Rio de Janeiro, at Praia de Botafogo, 501, s/703, Botafogo, State of Rio de Janeiro, and is registered with the Brazilian Securities and Exchange Commission (CVM) and on the São Paulo stock exchange (BM&FBOVESPA). Log-In and its subsidiaries (together "the Group") is a logistics operator mainly engaged in the activities of long-haul maritime trade (MERCOSUR), general river and coastal transport of cargo, and operation of inland and port terminals. The Company offers integrated solutions (one-stop shop) for port handling and door-to-door container transport, by sea, supplemented by distance road transportation and storage of cargo using inland intermodal terminals, as well as maritime bulk shipping. Subsidiaries of the Company on March 31, 2015 are: % Share Entity Subsidiaries and associates: capital and voting Headquarters Main activity TVV-Terminal de Vila Velha S.A Brazil Port and storage Log-In Mercosur S.R.L Argentina Port support Log-In International GmbH Austria Logistics Log-In Intermodal Del Uruguay S.A Uruguay Port support The Company owns five ships in operation, and four more ships are all under construction in Brazilian shipyards. The Company holds a controlling stake in Terminal de Vila Velha S.A. - TVV, which has the concession contracts for berths 203, 204 and 205 at the Capuaba dock in the port of Vitória - ES to undertake port operations, for a 25-year period, which began on September 10, 1998, and may be renewed by mutual agreement of the parties, for a maximum period equal to that of the originally agreed term. The interim financial statements for the period ended March 31, 2015 were approved and authorised by the Board of Directors at a meeting on May 14, BASIS OF PREPARATION AND PRESENTATION OF THE INTERIM FINANCIAL STATEMENTS The basis of preparation and presentation of the company's individual and consolidated interim financial statements are as follows: 2.1. Basis of Preparation The individual interim financial statements have been prepared under the historical cost as a basis for the value of financial assets and liabilities (including derivatives) at fair value. The preparation of interim financial statements requires the use of certain critical accounting estimates as well as the judgment of the Company s management in applying the accounting policies of the Group. The areas that require significant levels of judgment and are more complex, as well as the areas where assumptions and estimates are relevant to the financial 9

12 statements, arebased on historical experience and other factors considered relevant by the company. a) Consolidated Financial statements The consolidated interim financial statements are prepared based on the International Financial Reporting Standards (IFRS) and are presented in accordance with CPC 21 (R1) "Interim Financial Reporting" and with International Accounting Standard IAS 34 - Interim Financial Reporting, issued by the International Accounting Standards Board (IASB) and guidelines (OCPC) approved by the Brazilian Securities and Exchange Commission ("CVM"). b) Parent Company individual financial statements The individual interim financial statements of the parent company have been prepared and are presented in accordance with CPC 21 (R1) "Interim Financial Reporting" andthe interpretations and guidelines issued by the Comitê de Pronunciamentos Contábeis (CPC),approved by the Brazilian Securities and Exchange Commission (CVM). The Company has opted to present the individual and consolidated interim financial statements together. With the issue of IAS 27 (Separate Financial Statements), reviewed by the IASB in 2014, separate statements according to IFRS are allowed to use of the equity method to value investments in subsidiaries and jointly controlled. In December 2014, the CVM issued Deliberation No. 733/2014, which approved the Technical Pronouncements review document No. 07 on Pronouncements CPC 18, CPC 35 and CPC 37 issued by the Comitê de Pronunciamentos Contábeis, receiving the said revision of IAS 27, and enabling their adoption from the year ended December 31, Therefore, the Parent Company's individual interim financial statements have begun to conform to with the IFRSs. c) Translation of foreign currency The items included in the financial statements of each of the Company s companies are measured using the currency of the main economic environment in which that entity operates ("the functional currency"). The individual and consolidated interim financial statements are reported in R$, which is the functional currency of the Company and also the Group s reporting currency. In the preparation of the individual and consolidated interim financial statements were adopted the accounting principles and practices consistent with those disclosed in the company's financial statements on December 31, 2014, published in the official press in March 24, These interim financial statements should be reviewed in conjunction with the aforementioned 2014 financial statements, for a better understanding of the information presented. 3. LEGISLATION APPLICABLE TO SHIPPING COMPANIES The AFRMM is a benefit available to all Brazilian shipping companies operating with their own or chartered vessels, and is regulated by Law nº 10893/2004 and other specific legislation applicable to the sector. The Company receives, in full, the 10% surcharge on the value of coastal shipping freight from its customers via the Merchant Marine Fund as each transport operation is completed. These funds are restricted and can be used only for construction, docking, repair and 10

13 maintenance of vessels and amortization of the funding granted for acquiring the vessels. The AFRMM installments are recorded in specific asset and liability accounts, in the long term, until the requirements for recognizing the revenue as a subsidy in the income statement are satisfied. The AFRMM amounts recorded under liabilities are recognized as income as the following events occur: (i) provision of the shipping service (coastal, inland waterways and lakes) using the Company s own or chartered vessels under the Brazilian flag and (ii) the funds have been invested by the Company according to the conditions set forth in the previous paragraph and registered by the Merchant Marine Fund. These amounts are compared with amortized financing amounts from the FMM, and where applicable, the corresponding docking costs and expenses used to generate the incentive. In the first quarter of 2015 and 2014, the Company recognized AFRMM benefits when the finance relating to vessel construction was amortized, under "Funds from AFRMM-grants invested" in the Group income (expenses). An amount of R$17,257 (R$22,636 on March 31, 2014) was used by the Company to amortize funding from FMM, recorded under the line item "AFRMM subsidy invested" in the Group operating income (expense). The incentives generated that have still not been released by the FMM amount to R$169,222 as of March 31, 2015 ((R$167,791 as at December 31, 2014), of which R$169,222 (R$167,791 in 2014) was used by the Company to amortize the funding from FMM. The table below shows the Company's position with respect to AFRMM funds. Consolidated (IAS 34 and CPC 21) Parent Company (CPC 21) Current Assets - Funds to receive from AFRMM for loan amortization (*) 169, , , ,791 Current Assets - Fundo da Marinha Mercante-AFRMM to invest , , , ,141 Current Liabilities - Fundo da Marinha Mercante-AFRMM to invest Non-current Assets - Fundo da Marinha Mercante-AFRMM to invest Non-current liability - Fundo da Marinha Mercante-AFRMM to invest Consolidated (IAS 34 and CPC 21) Parent Company (CPC 21) Income statement: Operating income (expense):. Funds with AFRMM subsidy invested 17,257 22,636 17,257 22,636 (*) Amount to receive from FMM/AFRMM for the amortization, using the company's own funds, of loans used to acquire vessels. 11

14 Changes in funds from AFRMM recorded by the Company in the financial statements as at March 31, 2015, as follows: Changes in the period Balance at Transferred to Transferred to BMDES Balance at DESCRIPTION Additions Released Remunerated Invested Current Account Long-term Commissions Amounts (credits) to be released by FMM 167,791 17,270 (15,839) ,222 Amounts released to invest (balance) , (15,827) - (158) ,141 17, (15,827) - (158) 169,430 CHANGES IN THE BALANCE ASSETS: CURRENT ASSET.Merchant Marine Renovation Freight Surcharge-AFRMM.Installments released (balance) , (15,827) - (158) 208.Installments to release (credits) 167, ,257 - (15,826) - 169, ,141-15, ,257 (15,827) (15,826) (158) 169,430 NON-CURRENT ASSET.Merchant Marine Renovation Freight Surcharge-AFRMM.Installments to release (balance) - 17,270 (15,839) - (17,257) - 15, ,270 (15,839) - (17,257) - 15, ,141 17, (15,827) - (158) 169,430 LIABILITIES: CURRENT LIABILITIES.Merchant Marine Renovation Freight Surcharge-AFRMM.Installments released (balance) , (15,827) (158) , (15,827) (158) 208 NON CURRENT LIABILITIES.Installments to release (balance) - 17,270 (15,839) - (17,257) - 15, ,270 (15,839) - (17,257) - 15, ,270-4 (17,257) - (1) (158) 208 CHANGES IN THE STATEMENT OF INCOME: Income (expenses) from operations:.funds from grants-afrmm invested , ,257 Under Law 11941/2009, article 18, item III, together with Law 6404/2006, Article 195-A, as amended by Law 11648/2007, the amount of subsidies for AFRMM investment, as granted by the Government stimulus to implement or expand economic ventures (in our case: vessel construction with FMM funds) are not subject to taxation and should be kept in the profit reserve account, as calculated up to the profit limit (Note 15). The appropriate value in profit reserves will be taxed as actual taxable income if it is used differently to that provided under the legislation (capitalization, maintenance in reserves for investments). The remaining balance of grants not kept in profit reserves due to profit limitations for the year should happen in subsequent years. 4. CASH AND CASH EQUIVALENTS Investments may, at any time, be redeemed earlier at the discretion of the Company, without loss to the principal and interest accrued up to the date of redemption. All investments are subject to insignificant risk of change in value. 12

15 The Company s cash and cash equivalents are broken down as follows: Consolidated (IAS 34 and CPC 21) Parent Company (CPC 21) Cash and banks 25,765 9,319 15, CDI-linked investments 17,734 6,041 16,684 6,022 43,499 15,360 32,180 6, TRADE ACCOUNTS RECEIVABLE Consolidated (IAS 34 and CPC 21) Parent Company (CPC 21) Trade accounts receivable 183, , , ,997 Allowance for doubtful accounts (18,081) (18,694) (13,527) (14,140) 165, , , ,857 The aging list of trade receivables is as follows: Accounts receivable aging list: Consolidated (IAS 34 and CPC 21) Parent Company (CPC 21) Current 138, , , ,935 Past due: 0 to 30 days 3,270 8,874 3,037 4, to 90 days 5,969 2,801 5,434 2, to 180 days 17,566 3,208 12,557 2, to 360 days 3,128 3,674 2,654 3,134 Over 360 days 14,953 15,020 10,873 11, , , , ,997 The allowance for doubtful accounts is recognized in an amount considered sufficient by the Management to be sufficient to cover potential losses on the collection of receivables. The Company does not have guarantees for these receivables. Based on the Company s experience, we have classified those receivables with past due of more than 180 days as doubtful accounts. Changes in the allowance for doubtful accounts were as follows: Consolidated (IAS 34 and CPC 21) Parent Company (CPC 21) Opening balances (18,694) (14,363) (14,140) (11,413) Additions 613 (4,749) 613 (3,086) Write-offs in receivables Closing balances (18,081) (18,694) (13,527) (14,140) Trade Accounts Receivable non-current: relates to an amount of R$12,147 and includes R$11,141 (R$12,433, on December 31, 2014 and includes R$11,194), refers to receivables recorded by the subsidiary TVV with VALE for contingencies (see Note 14), supported by legal interpretation, for the Indemnity Agreement entered into on March 23, 2007 with VALE S.A. by Log-In Logística Intermodal S.A. and its subsidiaries. 13

16 6. RELATED PARTIES The main Company transactions with related parties arise from the provision of services at market prices to subsidiaries and associates listed in Note 9, as well as to corporate shareholders and their associated companies, as well as reciprocal loans. Related party transactions are broken down as follows: Consolidated (IAS 34 and CPC 21) Assets Liabilities Assets Liabilities Parent Company (CPC 21) Assets Liabilities Assets Liabilities Terminal de Vila Velha S.A.-TVV (a, b) 1,423 40,330 3,428 27,857 Log-In Mercosur (a, c) 548 3, ,772 Log-In Logistics GmbH (a) - 1, Log-In Uruguay (a) Other (a) ,123 45,295 4,568 30,840 Represented by: Consolidated (IAS 34 and CPC 21) Assets Liabilities Assets Liabilities Related parties - Current Related parties - Non current Parent Company (CPC 21) Assets Liabilities Assets Liabilities Related parties - Current 2,123 6,232 4,568 3,848 Related parties Non current (d) - 39,063-26,992 2,123 45,295 4,568 30,840 Notes: (a) Only relates to receivables and payables for the commercial operations and transactions of Log-In group companies. (b) The amount of R$39,063 (R$26,992 on December 31, 2014) refers to a reciprocal loan taken by the subsidiary TVV-Terminal Vila Velha SA, with charges equivalent to 104% of CDI, maturing in one year. Total amounts for commercial transactions with related parties: Consolidated (IAS 34 and CPC 21) Parent Company (CPC 21) Income Expense Income Expense Income Expense Income Expense Log-In International GMBH , Terminal de Vila Velha S.A -TVV ,685-1,094 Log-In Uruguay Log-In Mercosur ,116-2,200 14

17 Represented by: Consolidated (IAS 34 and CPC 21) Parent Company (CPC 21) Income Expense Income Expense Income Expense Income Expense Freight , Services Finance Income/cost , ,116-2,200 Compensation for key management personnel for the period ended March 31, 2015 was R$2,467 for the parent company and R$2,791 consolidated (March 31, compensation of R$2,771 for the parent company and R$3,055 consolidated), relating to the following short and long-term benefits: Consolidated (IAS 34 and CPC 21) Parent Company (CPC 21) Short-term benefits 2,597 2,528 2,273 2,244 Share-based payments ,791 3,055 2,467 2,771 Key management personnel: Board members, Executive Officers, Directors and Managers. 7. RECOVERABLE TAXES Current Consolidated (IAS 34 and CPC 21) Parent Company (CPC 21) Withholding tax on investments and third-parties 1, PIS and COFINS or recoverable or offset 29,481 29,667 10,539 10,209 INSS to recover or offset 4,953 4,894 2,157 2,102 ISS to recover or offset ICMS to recover or offset 3,723 4,354 3,375 3,326 Other ,434 39,149 16,131 15,690 Consolidated (IAS 34 and CPC 21) Non Current Parent Company (CPC 21) Recoverable taxes (IRRF on investments and third parties) 4,408 5,894 4,408 5,894 15

18 8. INCOME TAX AND SOCIAL CONTRIBUTIONS The amounts of income tax and social contributions that affected net income (loss) for the first quarters ended March 31, 2015 and March 31, 2014 are stated as follows: Consolidated (IAS 34 and CPC 21) Parent Company (CPC 21) Profit (loss) before income tax and social contributions (121,824) 25,863 (124,668) 20,104 Credit (expenses) for income tax and social contributions at effective rate (34%) 41,420 (8,793) 42,387 (6,835) Adjustments (effect of 34%): Equity income - - 1,911 3,356 Subsidized incomes (AFRMM invested) 5,867 7,696 5,867 7,696 Income from foreign subsidiaries 126 (177) - - Foreign subsidiary income tax expense (108) (248) - - Profit from foreign subsidiary (110) (210) (110) (210) Income (expense) from interest on own capital paid Impaiment provison on income tax and social contribution credits (56,325) (3,966) (56,325) (3,966) Permanent differences (13) (39) (34) (31) Income tax and social contributions on income (9,143) (5,737) (6,304) 10 Balances of deferred assets are broken down as follows: Consolidated (IAS 34 and CPC 21) Parent Company (CPC 21) On tax losses 113, , , ,043 On social contribution negative basis 44,997 44,997 44,997 44, , , , ,040 On temporary differences (3,554) 2,614 (10,348) (4,044) 154, , , ,996 The Management understands that since the Company is in the process of operational restructuring, it falls under the sole paragraph in Article 2 of CVM Instruction No. 371/2002, bearing in mind that it is replacing old owned and chartered ships with new ships, including five new container ships and two new bulk carriers. This deferred tax asset is based on a Technical Study which details expectations for future taxable income and allows deferred tax assets to be used up within ten years. For the income and social contribution tax credits on deferred net income, amounting to R$56,325, levied in the first quarter of 2015 by the Company, the corresponding provisions were established to cover potential losses on their collection. The main assumptions in the Technical Study are: a) Acquisition of seven large ships as previously mentioned, with three already completed and four scheduled to be completed between November, 2015 and December, 2017, to replace the current fleet of vessels, and b) New ships will increase revenues with lower costs and operating expenses, since they are more up-to-date and have large transport capacity allowing further dilution of fixed costs. 16

19 These deferred tax assets are expected to be utilized up to 2025, as outlined in the table below. Consolidated (IAS 34 and CPC 21) Parent Company (CPC 21) Year Tax loss Temporary differences Total Tax loss Temporary differences Total ,435 44,435-39,742 39, ,038 (1,038) - (1,063) (1,063) ,734 (6,661) (3,927) 2,734 (6,661) (3,927) ,638 (8,897) 4,741 13,638 (8,897) 4, ,756 (8,897) 5,859 14,756 (8,897) 5, ,948 (8,897) 12,051 20,948 (8,897) 12, ,714 (8,897) 16,817 25,714 (8,897) 16, ,080 (6,778) 23,302 30,080 (6,778) 23, ,616-36,616 36,616-36, ,554-13,554 13,554-13, ,040 (3,554) 154, ,040 (10,348) 147,692 Consolidated (IAS 34 and CPC 21) Parent Company (CPC 21) Temporary differences Total Tax loss Temporary differences Year Tax loss Total ,674 43,674-39,388 39, ,294 (1,294) - (1,078) (1,078) ,734 (6,661) (3,927) 2,734 (6,661) (3,927) ,638 (8,897) 4,741 13,638 (8,897) 4, ,756 (8,897) 5,859 14,756 (8,897) 5, ,948 (8,897) 12,051 20,948 (8,897) 12, ,714 (8,897) 16,817 25,714 (8,897) 16, ,080 (105) 29,975 30,080 (105) 29, ,616-36,616 36,616-36, ,554-13,554 13,554-13, ,040 2, , ,040 (4,044) 153,996 17

20 Income tax credits and deferred social contributions are made up as follows. Composition on March 31, 2015 and December 31, 2014: Consolidated (IAS 34 and CPC 21) Parent Company (CPC 21) Provision for deferred income tax and social contribution on unaccounted accelerated depreciation - vessels (53,154) (46,481) (53,154) (46,481) Operational provisions 38,576 37,607 35,432 34,870 Provision for doubtful settlement of credit 5,859 6,067 4,310 4,518 Contingencies (labor, civil and tax) 4,808 4,997 2,707 2,625 Share-based payments paid in cash Tax losses to offset: Corporate income tax 113, , , ,043 Social contribution on net income, negative base 44,997 44,997 44,997 44, , , , ,996 Changes on March 31, 2015 and December 31, 2014: Consolidated (IAS 34 and CPC 21) Parent Company (CPC 21) Opening balances 160, , , ,989 Provision for deferred income tax and social contribution on unaccounted accelerated depreciation - vessels (6,673) (26,692) (6,673) (26,692) Operational provisions 969 (807) Provision for doubtful settlement of credit (208) 1,473 (208) 927 Contingencies (labor, civil and tax) (189) ,169 Share-based payments paid in cash (67) 150 (67) 150 Tax losses to offset: Corporate income tax Social contribution on net income, negative base Closing balances 154, , , ,996 Effects of Law No. 12,973 of May 13, 2014, with relevant changes in federal tax rules: This Law's provisions will enter into force as from 2015, but early adoption is given for Among other objectives, this law aims to neutralize the tax effect of Law 11941, Articles 15 and 16, of May 27, 2009, notably regarding dividend and interest payments on equity that were based on the profit for the periods beginning on January 1, 2008 until November 11, 2013, where the payments should be taken as the profit calculated for these specified periods respecting the same methods and criteria for calculations made on December 31, The Company's management opted for early adoption of the above mentioned law, according to the standardized procedures to adopt this, ensuring the use of equity measured in accordance with the provisions of Law 6404 of 1976, to calculate the limit on calculated interest on equity, as provided in Law 9249, Article 9,

21 9. INVESTMENTS Subsidiaries abroad SUBSIDIARIES Other Log-In International Gmbh Log-In Mercosur Log-In Uruguay S.A. Log.Star Navegação S.A. (a) Terminal de Vila Velha S.A. Parent Company Other CONSOLI DATED Investments on subsidiaries 138,124 2, , ,852 Other investments Balances as at December 31, ,124 2, , , Equity result (1,178) ,664 9,870 - Cumulative translation adjustments (exchange rate) - (416) (52) - - (468) - Capital reduction (6,404) (6,404) - Investments on subsidiaries 130,542 2, , ,850 - Other investments Balances as at March 31, ,542 2, , , Equity result (4,559) 1,096 (158) - 32,884 29,263 - Cumulative translation adjustments (exchange rate) Proposed dividends and interest on own capital paid - (1,633) - - (24,561) (26,194) - Investments on subsidiaries 125,983 1, , ,199 - Other investments Balances as at December 31, ,983 1, , , Equity result ,368 5,619 - Cumulative translation adjustments (exchange rate) Investments on subsidiaries 126,012 2, , ,160 - Other investments Balances as at March 31, ,012 2, , , Capital as of: , ,158 48, , ,158 48,894 Stockholders equity as of: ,012 2, (21,674) 108, ,983 1, (21,637) 103,207 Net profit (loss) on: , (1,178) (7) 10,675 Percentage interest on % 94% 100 % 17,23 % 99,90 % Percentage interest on % 94% 100 % 17,23 % 99,90 % No. of shares/quotas held: shares: shares: shares: , ,000 #VALOR! 9,766, , ,000 #VALOR! 9,766,014 a) The amounts corresponding to the Parent Company s share in deficit net worth of these investments are recorded under liabilities, in line item Other, and amount to R$3,727 (Log.Star) as of March 31, 2015 and December 31,

22 10. PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS a) Property, plant & equipment Average annual depreciation rate (%) Assets in operation: Vessels 5 708, , , ,371 Buildings and facilities 2% to 10% 126, ,624 59,716 59,567 Machinery and equipment 7 66,219 66,219 2,110 2,110 Furniture and fixtures 10 7,646 7,648 4,202 4,202 Data processing equipment 20 24,894 24,894 8,376 8,376 Improvements on property leased from third parties 10 5,040 5,086 5,040 5,086 Vehicles Improvements on vessels chartered from third parties 20 25,464 22,723 25,464 22,723 Other assets 20 1,216 1, , , , ,195 Accumulated depreciation (246,730) (233,167) (112,834) (103,994) 719, , , ,201 Construction in progress 764, , , ,659 b) Changes in property, plant and equipment Consolidated: Consolidated (IAS 34 and CPC 21) Parent Company (CPC 21) 1,484,321 1,442,401 1,264,776 1,219,860 Consolidated (IAS 34 and CPC 21) Machines Furnishings Improvement Data Improvement Buildings and and Furniture to third party processing to third party Construction Property, plant and equipment: Vessels facilities equipment and fittings property equipment Vehicles vessels Other assets in progress Total Balance at , ,624 66,219 7,648 5,086 24, ,723 1, ,056 1,675,568 Additions in the period ,335 55,335 Transfers in the period ,695 - (2,695) - Interaccount transfers (46) Write-downs in the period (2) (2) Balance at , ,774 66,219 7,646 5,040 24, ,464 1, ,696 1,731,051 Accumulated depreciation: Balance at (139,884) (27,377) (39,142) (3,845) (2,963) (12,592) (346) (6,150) (868) - (233,167) Additions in the period (8,858) (1,291) (1,120) (168) (224) (845) (21) (1,016) (21) - (13,564) Write-downs in the period and translation adjustments Balance at (148,742) (28,668) (40,262) (4,012) (3,187) (13,437) (367) (7,166) (889) - (246,730) Parent Company: Machines Furnishings Improvement Data Improvement Buildings and and Furniture to third party processing to third party Construction Parent Company (CPC 21) Property, plant and equipment: Vessels facilities equipment and fittings property equipment Vehicles vessels Other assets in progress Total Balance at ,371 59,567 2,110 4,202 5,086 8, , ,659 1,323,854 Additions in the period ,607 53,607 Transfers in the period ,695 - (2,695) - Interaccount transfers (46) Balance at ,371 59,716 2,110 4,202 5,040 8, , ,571 1,377,610 Accumulated depreciation: Balance at (74,662) (11,814) (1,190) (1,670) (2,963) (4,805) (97) (6,150) (643) - (103,994) Additions in the period (6,542) (643) (51) (104) (224) (251) - (1,017) (8) - (8,840) Balance at (81,204) (12,457) (1,241) (1,774) (3,187) (5,056) (97) (7,167) (651) - (112,834) 20

23 The main item under assets in progress for the Parent Company as of March 31, 2015, amounting to R$684,557 (as of December 31, 2014, R$651,777) relates to advances for the construction of four ships, consisting of three container ships and one bulk carriers being built at Estaleiro Ilha S.A. (EISA). These amounts include R$71,585 (as of December 31, 2014, included R$64,333) relating to charges for financing obtained for this construction, which was capitalized, originating from charges for the corresponding financing (see Note 11). c) Intangible assets Amortization Consolidated (IAS 34 and CPC 21) Parent Company (CPC 21) rate (%) Systems (software applications) 20 67,423 67,423 61,435 61,435 Port concessions 4 8,304 8, Trademarks and Patents ,732 75,732 61,440 61,440 Accumulated Amortization (48,519) (45,920) (43,539) (41,287) 27,213 29,812 17,901 20,153 Intangible assets under development 6,099 6,099 3,690 3,690 33,312 35,911 21,591 23,843 Balances of intangible assets in progress relate to expenditure on system development. On December 31, 2015 and 2014 the Company did not identify any impairment. 11. FINANCING AND LOANS Loan and financing balances as of March 31, 2015 and December 31, 2014 classified as current and non-current liabilities, as well as amortizations and payments falling due as scheduled up to 2034 as shown in the table below: Shipbuilding (a) TERCAM, PAULÍNIA and TVV facilities (b) Consolidated (IAS 34 and CPC 21) TOTAL Installments Annual Amount Swaps (d) Working capital (c) Annual Amount Annual Amount due ,358 58,982 30,249 49, , ,014 2,403 6, , , ,143 56,429 71,598 42,306 75,116 63,787 3,549 6, , , ,140 56,429 84,844 60,899 42,560 44,715 3,550 5, , , ,140 56,429 11,930 3,592 32,407 32,956 3,550 4, ,027 97, ,140 56,429 7,816 3, ,196 2,054 77,152 62, ,140 56, ,895 56, to , , , , ,807 1,117, , , , , ,472 23,933 25,541 1,624,982 1,423,027 Shipbuilding (a) TERCAM and PAULÍNIA facilities (b) Parent Company (CPC 21) TOTAL Installments Annual Amount Swaps (d) Working capital (c) Annual Amount Annual Amount due ,358 58,982 12,638 28, , , , , , ,143 56,429 32,460 21,964 75,116 63, , , , ,140 56,429 80,117 58,259 42,560 44, , , , ,140 56,429 11,930 3,592 32,407 32, , ,232 94, ,140 56,429 7,816 3, ,711 60, ,140 56, ,895 56, to , , , , ,807 1,117, , , , , ,472 12,271 12,919 1,551,844 1,366,500 21

24 As of March 31, 2015 and December 31, 2014, financing is classified under liabilities as follows: Consolidated (IAS 34 and CPC 21) Parent Company (CPC 21) Current Liabilities: 288, , , ,581 Non-current Liabilities: 1,336,591 1,187,483 1,292,852 1,154,919 1,624,982 1,423,027 1,551,844 1,366,500 Transactions relating to these loans on March 31, 2015 are shown below: Consolidated (IAS 34 and CPC 21) Balance at Charges Amortization Balance at Loans and financing Additions Capitalized Expense Principal Charges Shipbuilding (FMM/BNDES)-(a) and (*) 975,934 31,977 7, ,760 (14,981) (12,466) 1,117,476 Investment in port terminals (FMM/BNDES)-(b) 25, (1,900) (634) 23,933 Working Capital (Santander, Alfa and BB)-(c) 261,472 45,000-8,493 (33,994) (3,835) 277,136 Sw aps-(d) 160,080 75,504-6,978 (34,550) (1,575) 206,437 1,423, ,481 7, ,157 (85,425) (18,510) 1,624,982 Note (*): Includes R$123,249 of foreign exchange, of w hich R$60.55 is due to the effect of CPC 20. Parent Company (CPC 21) Balance at Charges Amortization Balance at Loans and financing Additions Capitalized Expense Principal Charges Shipbuilding (FMM/BNDES)-(a) and (*) 975,934 31,977 7, ,760 (14,981) (12,466) 1,117,476 Investment in port terminals (FMM/BNDES)-(b) 12, (950) (243) 12,271 Working Capital (Santander, Alfa and BB)-(c) 261,472 45,000-8,493 (33,994) (3,835) 277,136 Sw aps-(d) 116,175 55,504-4,944 (30,607) (1,055) 144,961 1,366, ,481 7, ,742 (80,532) (17,599) 1,551,844 Note (*): Includes R$123,249 of foreign exchange, of w hich R$60.55 is due to the effect of CPC 20. Loans and financing refer to resources obtained from Fundo da Marinha Mercante (FMM), via onlending from its financing agent, Banco Nacional de Desenvolvimento Econômico e Social (BNDES), and via other financial agents, to the following purposes: a) Construction of ships (FMM/BNDES) Construction of seven vessels (five container ships and two bulk carriers) by Estaleiro Ilha S.A. (EISA), divided into two Subloans (Subloan A and Subloan B ), totaling a credit facility of approximately R$927,142, being R$625,209 for the container ships and R$301,933 for the bulk carriers. The contracts agreed with BNDES dated of May 26, 2008 (container ships) and December 8, 2009 (bulk carries). To determine the outstanding balance, Subloans A and B are adjusted using the long-term interest rate (TJLP) and based on fluctuations in the U.S. dollar (container ships) and the Subloans relatives to the bulk carries by the U.S. dollar fluctuations, respectively, both increased by annual interest of 2.5%. The built, and already operating, vessels (hulls 504, 505 and 509) and the other under construction (hulls 506, 507, 508 and 510) are pledged as collateral on these borrowings, with a first-ranking mortgage. 22

25 The table below shows the breakdown of the funds already released (plus charges incurred): Last Consolidated and Parent Company Funding Institution: payment (IAS 34 and CPC 21) Merchant Marine Fund (FMM): due Grace period: Hull EI-504-Subloan A Jun/ months 84,016 85,285 Hull EI-504-Subloan A-Additional Jun/ months 7,822 7,940 Hull EI-505-Subloan A Sep/ months 82,215 83,518 Hull EI-505-Subloan A-Additional Sep/ months 7,710 7,833 Hull EI-506-Subloan A Mar/ months 88,742 87,838 Hull EI-507-Subloan A Oct/ months 48,602 49,243 Hull-EI-507-Subloan A1 to A3-Additional Oct/ months 18,628 6,806 Hull EI-508-Subloan A Apr/ months 37,980 38,467 Hull-EI-508-Subloan A1 to A3-Additional Apr/ months 22,442 13,831 Amounts indexed to TJLP (Long-term interest rate) 398, ,761 Hull EI-504-Subloan B Jun/ months 56,043 47,117 Hull EI-504-Subloan B-Additional Jun/ months 4,944 4,157 Hull EI-505-Subloan B Sep/ months 55,713 46,874 Hull EI-505-Subloan B-Additional Sep/ months 4,843 4,074 Hull EI-506-Subloan B Mar/ months 58,679 48,456 Hull EI-507-Subloan B Oct/ months 29,457 24,719 Hull-EI-507-Subloan B1 to B3-Additional Oct/ months 9,418 3,158 Hull EI-508-Subloan B Apr/ months 21,262 17,835 Hull-EI-508-Subloan B1 to B3-Additional Apr/ months 11,641 6,266 Hull EI-509-Subloan A Jun/ months 163, ,712 Hull EI-509-Subloan B Jun/ months 76,153 63,968 Hull EI-510-Subloan A Aug/ months 153, ,057 Hull EI-510-Subloan B Aug/ months 73,559 61,780 Amounts indexed to US$ 719, ,173 TOTAL 1,117, ,934 Under the financing agreements entered into with the Merchant Marine Fund (FMM), Log-In undertakes to maintain a minimum debt service coverage ratio (DSCR), calculated at the end of each year, not less than the threshold set by BNDES, over the entire agreement terms; this ratio is calculated using the following formula: DSCR = EBITDA (IR+CSLL+Working Capital Variation/Debt Service for the year). Up to the latest calculation period, the Company was compliant with the required financial coverage. b) Investment in port terminals (BNDES) These financing contracts under the credit facility have the following features: b.1 TERCAM SUBLOAN VALUE CHARGES TERM PURPOSE (EXTENSION OF TERCAM) Subloan A 12,498 TJLP+1.4% 8 years Project phase 1: construction of 9,000 m² of new warehousing, facilities, internal roads and part of the expansion the container yard (funds fully released); On March 31, 2015 this financing balance amounts to R$6,681 (R$7,072 at December 31, 2014). The credit facility agreement is secured by a bank guarantee until the last payment. 23

26 b.2) Paulínia Terminal/SP SUBLOAN VALUE CHARGES TERM PURPOSE Subloan A 8,000 TJLP+4.30% p.a.60 months Building a distribution center in Paulinia/SP. Subloan B 2,000 TJLP+3.30% p.a.60 months As above On March 31, 2015 this financing balance amounts to R$5,590 (R$5,847 at December 31, 2014). Financing has a grace period of one year; the principal will be repaid monthly, with the first installment due on September 12, 2012, and the interest payments are paid quarterly with the first installment due on November 15, b.3) Vila Velha Terminal SUBLOAN VALUE CHARGES TERM PURPOSE (ACQUISITION OF) Subloans "A, B, C, D, E" 7,101 Consumer price index+3.0% p.a. 8 years Imported equipment (funds partially released). Subloan F 15,365 TJLP+1.4% p.a. 8 years Civil works (funds fully released) On March 31, 2015 this financing balance amounts to R$11,662 (R$12,622 at December 31, 2014). The credit facility agreement is secured by a bank guarantee until the last payment. c) Working Capital and current investments Credit facility agreement (working capital and current investments) composed as shown below: Consolidated (IAS 34 and CPC 21) Parent Company (CPC 21) Credit Maturity Banco Alfa de Investimentos S.A. Jan/ ,204 53,168 53,204 53,168 Banco Santander Brasil S.A. Jun/2015 2,084 5,220 2,084 5,220 Banco Santander Brasil S.A. (NC-E) Apr/ ,014 25,025 25,014 25,025 Banco do Brasil S.A. (NC-C) Nov/ , , , ,529 Other Nov/ ,447 27,530 70,447 27, , , , ,472 Financial charges are levied at a CDI rate, on average, of 118.6% on lines of credit, on loans refereed to as NC-E (Export Credit Bill) there is a grace period of one year with monthly and/or quarterly interest during the grace period, and on the line of credit taken with Banco do Brazil S.A., based on the NCC (Commercial Credit Bill), a grace period of one year and monthly interest during the grace period. d) Swaps The table below summarizes the amounts raised by the Company from financial institutions for loan amounts in Bank Credit Bills - Transfer of Funds Raised Abroad, through Resolution 4.131/62, in the form of swaps to mitigate the risk of US dollar loans indexed to the CDI. These transactions generated interest expenses and foreign exchange variation for the amount of R$4,944 in Log-In and R$6,978 consolidated in the first quarter of 2015, and R$1,395 in the parent company and R$2,708 consolidated in the first quarter of 2014, net of a gain offsetting the swap, as detailed in Note There is no IOF tax on this transaction. The costs of these loans obtained are indexed to an average interest rate of %p.a. and the average variation of CDI of %p.a. consolidated, and an average interest rate of %p.a. and the average variation of CDI of %p.a. 24

27 Transactions (Swaps ) - SWAPS Consolidated (IAS 34 and CPC 21) Initial Date of Amount Average Charges Balances at Charges Financial Institution the Transaction in R$ Equivalent in US$ Interest %p.a CDI %p.a Banco do Brasil S.A. (a) ,244 38, ,783 1,166 Banco Itaú S.A.(b) ,575 42, ,853 3,287 Banco HSBC Bank Brasil S.A ,125 30, ,641 1,883 Banco Votorantim S.A ,000 7, , , , ,437 6,978 (a) Effective Dates: ; and (b) Effective Dates: ; ; and Parent Company (CPC 21) Date of the Amount Average Charges Balances at Charges Financial Institution Transaction in R$ Equivalent in US$ Interest %p.a CDI %p.a Banco do Brasil S.A. (a) ,244 38, ,783 1,166 Banco Itaú S.A.(b) ,561 21, ,537 1,895 Banco HSBC Bank Brasil S.A ,125 30, ,641 1, ,930 89, ,961 4,944 (a) Effective Dates: ; and (b) Effective Dates: and These bridging-loans taken through working capital and swaps aim to address the cash flow mismatches between the request and release of Merchant Marine Fund (FMM) funds in respect of loans granted for seven vessels together with Estaleiro Ilha S.A. and provide funding for the Company's current investments. e) Guarantees At a meeting held on December 20, 2013, the Board of Directors authorized the Company to provide guarantees on supplier notes payable for services and materials purchased under longterm contracts, up to a limit of R$140, SUPPLIERS Payment of amounts on the aging list have the following due dates: Current Liabilities Consolidated (IAS 34 and CPC 21) Parent Company (CPC 21) Amounts due: 0 to 30 days 72,205 85,975 61,590 71, to 90 days 9,952 8,593 9,256 8, to 180 days to 360 days ,494 94,934 70,859 80,170 Non current Liabilities 1,078 1,

28 13. OPERATING PROVISIONS The operating provisions made by the Company relate to expense estimates, consisting basically of provisions for port (shipping), road and other expenses. Provisions under current and non-current liabilities are detailed below: Current liabilities: Consolidated (IAS 34 and CPC 21) Parent Company (CPC 21) Provisions for: Shipping expenses 30,884 23,730 30,884 23,730 Road expenses 4,661 4,756 4,661 4,756 Administrative fees 1,730 1,664 1,730 1,664 Other operating expenses 1,738 1,393 1, ,013 31,543 38,481 31,011 Non-current liabilities Other operating expenses 1,049 1,246 1,049 1, PROVISIONS FOR CONTINGENCIES The Company and its subsidiaries have recognized a reserve for labor, civil, and tax contingencies, classified under non-current liabilities, considered by management, based on the opinion of its legal counsel, sufficient to cover probable losses. These contingencies are made up as follows. Consolidated (IAS 34 and CPC 21) Parent Company (CPC 21) Provision for Provision for Provision for Provision for risks risks risks risks Labor 14,874 15,632 9,010 8,866 Labor-joint and several liability 11,141 11, Tax claims Civil and others ,075 27,686 9,753 9,513 Labor lawsuits consist mainly of lawsuits filed by employees claiming: (i) payment of overtime, (ii) premiums for alleged unhealthy working conditions, and (iii) other matters often related to disputes over severance pay. The amount above for labor claims, R$11,141 on March 31, 2015 (R$11,194 on December 31, 2014), accounted for in the subsidiary TVV-Terminal Vila Velha SA refers to labor contingencies, which predict probable losses recorded at the end of the year, due to the likely disbursements of Vale S.A. contingent liabilities (see Note 5), supported by the interpretation of Indemnity Agreement agreed between Log-In Logística Intermodal S.A. and its subsidiaries and VALE, dated March 23, The Company or its subsidiaries and may enter the court with jurisdiction with the necessary means to ensure their claims. Tax lawsuits - consist mainly of: (i) non-payment of taxes on transfer of assets, and (ii) changes in the taxable base of PIS and COFINS. Civil and other - mainly cover claims related to accidents, compensation claims and others. The Company may enter the court with jurisdiction with the necessary means to ensure its claims and or of its subsidiaries. 26

29 During the first quarter of 2015 these contingencies changed as follows, mainly due to cases which are the sole responsibility of VALE without any expense to the Company, as well as other amounts revised downwardly. Balance at Transactions in the period Consolidated (IAS 34 and CPC 21) Balance at Description Additions Reversal Interest+CM Transfer Payment Labor claims 26,826 1,795 (2,475) (78) (53) - 26,015 Tax claims Civil claims (12) ,686 1,972 (2,487) (43) (53) - 27,075 Balance at Transactions in the period Parent Company (CPC 21) Balance at Description Additions Reversal Interest+CM Transfer Payment Labor claims 8, (694) ,010 Tax claims Civil claims (12) , (706) ,753 The Company has filed defenses for all the lawsuits above and recognizes a reserve for contingencies for lawsuits considered as probable losses. On March 23, 2007, the Company entered into compensation agreement with Vale S.A., under which the latter undertakes to compensate Log-In and its subsidiaries for any and all losses, damages, costs, expenses and other cash obligations that the Company incurs as a result of court decisions, administrative proceedings, or arbitrations to which Log-In is, or will be, a party, and whose cause occurred before the publication of the Termination Notice of the public offering of shares. Consolidated, these contingencies total R$14,949 as of March 31, 2015, and R$12,737 as of December 31, In addition to the reserve recognized, there are other contingent liabilities as of March 31, 2015, totaling R$130,504 (Parent Company) and R$165,106 (consolidated) (December 31, R$128,909 (Parent company) and R$166,022 (Consolidated)), with some losses possible, based on the opinion of legal counsel, which have not been accrued. The main lawsuits classified as possible relate to tax (R$108,431) and labor claims (R$51,909) consolidated. Of the total R$166,022 above, R$85,132 is under the indemnity agreement mentioned in the previous paragraph, comprising R$62,185,000 for tax, R$21,875 for labor and R$1,072 for civil cases. The Company and its subsidiaries also hold escrow deposits related to certain contingencies. Escrow deposits were made in accordance with the court requests, to enable the Company to enter and/or proceed with legal action; they are restated and classified as non-current assets until there is a judicial decision in favor of the claimant or Log-In and its subsidiaries, who will then redeem the deposits. On March 31, 2015 and December 31, 2014, escrow deposits are as follows: Consolidated (IAS 34 and CPC 21) Parent Company (CPC 21) Escrow deposits Labor lawsuits 22,244 21,397 14,280 14,055 Tax lawsuits 20,947 20,465 20,583 20,107 Civil lawsuits and other 1,353 1,065 1,314 1,027 44,544 42,927 36,177 35,189 Provision for estimated losses from recovering escrow deposits (9,424) (7,879) (3,792) (2,919) 35,120 35,048 32,385 32,270 27

30 15. STOCKHOLDERS EQUITY a) Share capital As of March 31, 2015, fully subscribed and paid up capital is R$600,000 which remained unchanged compared to December 31, 2014, and is represented by 85,617,759 outstanding shares and 6,093,861 treasury shares, totaling 91,711,620 registered common shares, with no par value. There were no changes in the number of shares of the Company in the first quarter of 2015 and the year The capital structure as of March 31, 2015 and December 31, 2014 is shown below: No. of shares and their % holding No. of shares and their % holding Shareholder: Common % Common % Fama Investimentos Ltda. 11,876, ,832, Fundação Petrobrás de Seguridade Social-PETROS 11,735, ,735, Credit Suisse Hedging - Griffo 9,384, ,542, Fator Administradora de Recursos 7,227, ,146, Onyx Equity Management Gestora de Investimentos Ltda. 6,586, ,586, Cox Capital Management 4,552, ,329, Other investors 34,255, ,445, ,617, ,617, Treasury shares 6,093, ,093, ,711, ,711, b) Treasury shares Log-In holds 6,093,861 common shares in treasury, which corresponds to 6.64% of the total registered common shares of the Company. These treasury shares were acquired in The weighted average cost per share was R$8.35. The market value of treasury shares, calculated based on their quotation on São Paulo Mercantile and Stock Exchange (BMF&BOVESPA) as of March 31, 2015, was R$20,597 (R$20,719 on December 30, 2014). c) Reserve for AFRMM incentives Under Law No /2009, article 18, item III, together with Law 6.404/2006, Article 195-A, as amended by Law /2007, the amount of subsidies for AFRMM investment, as granted by the Government stimulus to implement or expand economic ventures (in our case: vessel construction with FMM funds) should be kept in the profit reserve account, as calculated up to the profit limit. The appropriate value in profit reserves will be taxed as actual taxable income if it is used differently to that provided under the legislation (capitalization, maintenance in reserves for investments). The remaining balance of grants not registered in profit reserves due to profit limitations for the year should happen in subsequent years. d) Legal reserve The legal reserve is recognized as 5% of net income for the fiscal year and its purpose is to ensure integrity of capital. 28

31 e) Investment Reserve The purpose of this reserve is to meet the needs of the investment budget. In accordance with the EGM/AGM on April 28, 2014, part of this reserve was capitalized in 2014, according to the Statement of Changes in Equity. f) Special reserve Reserve recognized under paragraph 5 of Article 202 of Law 6.404/76. Net income allocated to this reserve, if not absorbed by loss in subsequent years, will be paid as dividends as soon as the Company s financial position allows. g) Profit Allocation The Company's Articles of Incorporation provide for the allocation of 25% of the profit as mandatory minimum dividend, after the necessary adjustments according to the legal requirements. 16. BASIC AND DILUTED EARNINGS (LOSS) PER SHARE Basic and diluted earnings (losses) per share were calculated as shown below: Parent Company (CPC 21) Profit (loss) for the period attributable to Company shareholders (130,972) 20,114 Basic and diluted net loss per share (a) (1.53) 0.23 Average weighted number of ordinary shares to calculate basic profit (loss) per share (*) 85,617,759 85,617,759 (a) There are no anti-dilutive items. (*) The no. of shares at the beginning and end of the period remained unchanged, with no transactions over the periods. 17. SHARE-BASED PAYMENTS a) Matching Plan Under the Matching Plan, professionals (Log-In directors and managers) eligible to receive this remuneration must satisfy the following conditions: i) have worked in executive positions for the Company when the plan was in force; ii) were eligible for the profit-sharing plan during the term or the plan; iii) were active and working for the Company on the date of acquisition of the shares; and iv) were classified in the adequate or talent categories in the Career and Succession matrix. The Board of Directors approved the fourth Matching Plan for the 2011/2014 cycle (already settled) at the meeting held on March 1, 2011 under the same terms and conditions as previous plans, with adhesion deadlines in April The fifth Matching Plan was approved at the meeting of the Board of Directors held on April 10, 2012, with adhesion deadline in April 2012 for the 2012/2015 cycle. The sixth and seventh Matching Plans for the 2013/2016 and 2014/2017 cycles were approved at the Board meetings on April, 2013 and on April, 2014, respectively. Company shares were acquired in the first quarter of 2015 by eligible executives with an outstanding amount of 144,162 shares (144,162 in 31 December 31, in 2014). They will be 29

32 entitled to the same number of shares initially acquired after three years provided that they have kept all the shares during the entire period.the Company will settle the new shares at no cost to the executives. The remuneration plan is measured periodically based on the fair value of the equity instruments. Premiums are paid in cash after three years when certain criteria are met under the plan. The liabilities of the plan are recognized as non-current liabilities against income. As at March 31, 2015 and December 31, 2014, the outstanding programs are shown in the following table AVERAGE PRICE TOTAL PROGRAM START/END NO. OF SHARES /SHARE* (R$) TOTAL VALUE ACCRUED Program V APR/12 to MAR/15 36, Program VI APR/13 to MAR/16 20, Program VII APR/14 to MAR/17 86, , AVERAGE PRICE TOTAL PROGRAM START/END NO. OF SHARES /SHARE* (R$) TOTAL VALUE ACCRUED Program V APR/12 to MAR/15 36, Program VI APR/13 to MAR/16 20, Program VII APR/14 to MAR/17 86, , * Average price in the first quarter of 2015 and the year b) Long-term incentive plan (ILP) Plan whose objective is to retain the directors, keep them involved and encourage an owner s perception, obtaining their commitment to medium- and long-term results and strengthening the culture of sustained performance over 3-year cycles. The ILP plan is aimed at aligning shareholders and directors interests insofar as it guarantees that executive earnings are tied to corporate earnings. The amount payable in cash under the ILP plan is established as a percentage of targets achieved, conditional on and approved by the Board of Directors. It will consist of a one-off payment at the end of the Program based on the average weighted quotation (price/volume) of trading on the Stock Exchange over the 20 sessions prior to the date of official publication of the earnings at the end of the third year of the program. If the executive concerned remains with the Company, after three years the number of shares will be converted into a monetary sum. At the Board of Directors meeting dated in August 7, 2012, ILP Plan for the 2012/2014 cycle was approved. On March 31, 2015, the record of this liability represents R$1,049 (on December 31, 2014, R$994), calculated based on the fair value of the share, pro-rata for the legality period of the plans, and recorded in non-current liabilities. 18. PENSION PLAN VALE MAIS Mixed Benefit Plan Employees with a private pension plan were entitled to a fixed Company contribution managed by the Fundação Vale do Rio Doce de Seguridade Social-VALIA. 30

33 The Company s contributions to the Vale Mais Plan are as follows: a) Regular contribution intended to accumulate the funds necessary to grant income benefits, equal to the contribution of participants, capped at 9% of their contribution salary in excess of ten plan reference units (R$3, as at March 31, 2015, and R$3, as at December 31, 2014). b) Extraordinary contribution can be made at any time, at the sponsors discretion. c) Normal contribution used to fund the risk plan and administrative expenses, set by the actuary when preparing the actuarial assessments. d) Special contribution - intended to cover any existing special commitment. Participants make monthly contributions to the VALE MAIS plan that range from 1% to 18% of the participant s salary and these contributions are matched by Company contributions, capped at 9% of the participant s salary. Company contributions during the first quarter of 2015, applicable to income for the period, were R$629 (consolidated R$792). The figure for the first quarter of 2014 was R$576 (consolidated R$721). 19. INSURANCE Insurance cover is determined and taken out according to technical criteria, and considered sufficient by management to cover potential losses on property, plant and equipment as a result of acidentes. The table below shows the insurance lines/insured risks and the related cover Consolidated (IAS 34 e CPC 21) Parent Company (CPC 21) P&I (Protection and Indemnity) - environmental damage 2,656,200 2,656,200 Operating and leased container risk (*) 92,967 92,967 Hull and machinery (vessels leased bare hull) 828, ,402 Civil liability (Port operator / logistics) (*) 66,405 66,405 Business Interruption 104,011 - D&O (Directors and managers civil liability) 70,000 70,000 Ship Owners Liability (SOL) 13,281 13,281 Civil liability (Port operator / logistics-employer) (*) 2,656 2,656 Civil liability (Port operator / logistics-pain and suffering) (*) 1,328 1,328 Transport - RCTR-C (Civil Liability of Cargo Road Transport) 3,000 3,000 Transport - RCF-DC (Optional Civil Liability for Diverted Cargo) 3,000 3,000 Transport - RCA-C (Shipowner's Civil Liability - Cargo) 3,000 3,000 Interns - Uniform Capital * 10,000 10,000 Directors - 20 times limited salary* Employees - 20 times limited salary* *For every insurance policy there's a single limit for the terminals. minimum of R$540,000 and a maximum of R$1.334 million minimum of R$5,000 and a maximum of R$420,000 minimum of R$540,000 and a maximum of R$1.334 million minimum of R$5,000 and a maximum of R$420,000 31

34 20. FINANCIAL INSTRUMENTS 20.1) Financial instrument categories Consolidated (IAS 34 and CPC 21) Parent Company (CPC 21) Financial assets Loans and receivables Cash and cash equivalents 43,499 15,360 32,180 6,742 Trade and related party accounts receivable 177, , , ,425 Merchant Marine Fund-AFRMM 169, , , ,141 Insurance receivable 1,927 1, ,337 Other - 1,252-1, , , , ,884 Financial assets at fair value through profit or loss: Bunker hedge , , , ,884 Financial liabilities: Loans and receivables Suppliers 83,572 96,120 70,859 80,170 Related Parties ,295 30,840 Financing and loans 1,418,545 1,262,947 1,406,883 1,250,325 Merchant Marine Fund-AFRMM Port concessions payable 7,013 7, ,509,338 1,366,571 1,523,245 1,361,685 Financial assets at fair value through profit or loss: Bunker hedge 206, , , ,175 Swaps 12,989 18,515 12,989 18, , , , ,690 1,728,764 1,545,166 1,681,195 1,496,375 Below is a consolidated statement of the financial assets and liabilities at fair value: Consolidated (IAS 34 and CPC 21) Nominal value Fair Value Nominal value Fair Value Loans and receivables Cash and cash equivalents 43,499 43,499 15,360 15,360 Trade and related party accounts receivable 177, , , ,903 Merchant Marine Fund-AFRMM 169, , , ,141 Insurance receivable 1,927 1,927 1,704 1,704 Other 1,252 1,252 1,252 1, , , , ,360 Financial assets at fair value through profit or loss: Bunker hedge , , , ,360 Financial liabilities: Loans and receivables Suppliers 83,572 83,572 96,120 96,120 Financing and loans 1,418,545 1,418,545 1,262,947 1,262,947 Merchant Marine Fund-AFRMM Port concessions payable 7,013 7,013 7,154 7,154 1,509,338 1,509,338 1,366,571 1,366,571 Financial assets at fair value through profit or loss: Bunker hedge 12,989 12,989 18,515 18,515 Swaps 206, , , , , , , ,595 1,728,764 1,728,764 1,545,166 1,545, ) Quality of financial asset credit The credit quality of financial assets that have not reached term or become impaired is assessed by reference to external credit classifications (if any) or historical information on counterparty defaults. 32

35 The Company adopts a conservative fund investment policy to satisfy the current financial market conditions. The short-term investments of the Company and its subsidiaries are linked to private securities in banks eligible to receive funds according to the ratings of Fitch Ratings (Fitch), Moody s or Standard & Poor s (S&P). The ratings in foreign currency published by Moody s and S&P for the financial institutions with which we engaged in market transactions as of March 31, 2015 and December 31, 2014 are given in the table below: R atings F inancial Institutio n S&P M o o dy s Banco do Brasil BBB- Baa2 Banco Bradesco BBB- Baa2 Deutsche Bank A A3 Itaú BBB- Baa2 Banco Safra BBB- Baa2 Banco Santander BBB- Baa2 Pine BB+ Ba2 Votorantim BB+ Baa2 20.3) Risk management The Company s business, financial conditions, and the results of operations can be adversely affected by any of the risk factors described below. In order to increase the efficiency of the risk assessment process, the Company has set goals and established guidelines for risk management, promoted and proposed improvements to the risk assessment processes, and classified and defined risk control. a) Market risk The Company has not entered into derivative contracts to hedge its positions against market risks, mainly with respect to fluctuations on interest rates and price indexes, even though these are monitored by the Company, which periodically assesses its exposure and proposes operating strategies, control systems, and position limits. The Company also refrains from making any speculative investments in derivatives or any other risk assets. There were no changes in the Company s exposure to market risks or in the way the Company manages and measures such risks in the current period. The main market risks to which the Company is exposed are as follows: b) Currency risk The portion of foreign currency-denominated borrowings and swap transactions (US dollar), amounting to R$925,756 on March 31, 2015 (R$755,253 in 2014), corresponds to 56.9% (53.1% as of December 31, 2014) of the Company s debt, given that the effects of debt maturity are minimal in the short, medium and long term. c) Interest rate risk This risk arises from the possibility of the Company incurring losses due to fluctuations in the interest rates applicable to its liabilities. The Company and its subsidiaries are exposed to interest rate risks related to fluctuations in TJLP (Long-Term Interest Rate), to which borrowings amounting to R$422,090 as of March 31, 2015, (R$406,302 as of December 31, 2014). 33

36 In the first quarter of 2015 and in the year 2014 the Company did not have any derivative contracts to hedge against these indices, however, the risks are monitored by the Company, which periodically assesses its exposure and proposes strategies to be adopted. d) Sensitivity analysis In light of the historical volatility of the Brazilian Real exchange rate and interest rates, the Company has prepared a sensitivity analysis of its debts, showing the possible impacts in the first quarter of 2015, based on available market assumptions. The fluctuations used to calculate the impact at March 31, 2015 were as follows: US dollar 2.44, TJLP 5.5% and CDI 12.6% p.a.. e) Liquidity risk Consolidated Parent Company IAS 34 and CPC 21 CPC 21 Fixed assets under construction, with capitalization of: (82,278) (82,278). Interest 4,296 4,296. Exchange variation (86,574) (86,574) Finance income (66,213) (66,351). Interest 20,900 20,762. Exchange variation (87,113) (87,113) The liquidity risk represents the possibility of a mismatch between the maturities of assets and liabilities, which could result in an inability to meet obligations within the deadlines set. It is the Company s management policy to maintain adequate liquidity levels that ensure that present and future liabilities are met, while seizing any commercial opportunities that may arise. The table below gives an analysis of the maturities of financial liabilities as of March 31, 2015: Consolidated (IAS 34 and CPC 21) From 1 to 3 3 months 1 year to Over TOTAL Up to 1 month months to 1 year to 5 years 5 years Suppliers 83,572 72,205 9, ,078 - Financing and loans 1,624,982 24,033 48, , , ,345 Port concessions payable 7,013 1, ,434 4,393 1,715,567 97,424 58, , , ,738 Parent Company (CPC 21) From 1 to 3 3 months 1 year to Over TOTAL Up to 1 month months to 1 year to 5 years 5 years Suppliers 70,859 61,590 9, Related Parties 45,295 6, ,063 - Financing and loans 1,551,844 21,583 43, , , ,345 1,667,998 89,405 52, , , ,345 34

37 The table below gives details of the maturity of financial assets as of March 31, 2015: Consolidated (IAS 34 and CPC 21) Up to From 1 to 3 3 months 1 year Over TOTAL 1 month months to 1 year to 5 years 5 years Cash and banks 15,496 15, Investments 16,684 16, Trade accounts receivable 177, ,241 5,969 17,566 12,147 - Insurance receivable 1, , Other 1, , , ,700 6,525 20,071 12,147 - Up to From 1 to 3 3 months 1 year Over TOTAL 1 month months to 1 year to 5 years 5 years Cash and banks 25,765 25, Investments 17,734 17, Trade accounts receivable 143, ,780 5,434 12,557 1,006 - Related Parties 2,123 2, Insurance receivable Other , ,506 5,641 13,487 1,006 - f) Capital management risk Parent Company (CPC 21) The Company manages its capital to ensure that it can continue as going concern while maximizing the return for its stakeholders by optimizing the balances of its debts and equity. The overall strategy has remained unchanged since The Company s equity structure consists of net debt (borrowings detailed in Note 11 less cash and cash equivalents) and equity (which includes issued equity, reserves, and noncontrolling interests as stated in Note 15). The Company is not subject to any external requirement on capital. g) Credit risk The credit policies established by the management are intended to minimize customer default risk. The Company has a policy of trading only with creditworthy customers and obtaining adequate guarantees, where appropriate, as a way of mitigating financial risk. This is achieved by careful selection of customers through the analysis of economic and financial indicators. Furthermore, to minimize credit risks related to financial institutions, the management tries to diversify its transactions in prime banks. h) Fair value calculation criteria, assumptions and limitations The Company assessed its main financial instruments at fair value as of March 31, 2015, using usual market pricing techniques that involve management judgment. This assessment indicates that the fair values are close to the amounts recognized in the statements. To estimate the fair values of its financial instruments, the Management has based its assessment on the following premises: Financing, swaps and loans - represent adjusted financial liabilities based on interest rates set by BNDES and other financial institutions, and partly by exchange fluctuations. The Company s management believes that the carrying amounts approximate their fair value. i) Supplementary sensitivity analysis of financial instruments, pursuant to CVM, Instruction 475/08. 35

38 The Company presents the additional disclosures on its financial instruments below as required by CVM Instruction 475/08 specifically on the sensitivity analysis in addition to the sensitivity analysis required by IFRS and Brazilian accounting practices. In light of the historical volatility of the Brazilian Real exchange rate, price indices, and interest rates, the Company has prepared a sensitivity analysis showing the possible impacts of fluctuations. This analysis was based on a basic scenario projected for first quarter of 2015 and two other scenarios, taking account of 25% and 50% variations in the basic assumptions. The basic scenario was obtained using assumptions available on the market and takes account of the following changes for March 31, 2015: US dollar 2.44, TJLP 5.5% and CDI 12.6% p.a. The projected effects on the Company arising from the application of these scenarios in the first quarter of 2015 would be as follows: Consolidated (IAS 34 and CPC 21) Base scenario Scenario I 25% Scenario II 50% Fixed assets under construction, with capitalization of: (82,278) (12,804) 56,663. Interest 4,296 5,007 5,711. Exchange variation (86,574) (17,811) 50,952 Finance income (66,213) 7,667 81,460. Interest 20,900 25,589 30,190. Exchange variation (87,113) (17,922) 51,270 Base scenario Parent Company (CPC 21) Scenario I Scenario II 25% 50% Fixed assets under construction, with capitalization of: (82,278) (12,804) 56,663. Interest 4,296 5,007 5,711. Exchange variation (86,574) (17,811) 50, ) Derivatives Finance income (23,556) 7,502 72,268. Interest 17,450 25,424 20,998. Exchange variation (41,006) (17,922) 51,270 According to Company policy, the objective of derivative transactions is to adjust Company exposure to the risks related to commodity prices, energy prices, interest rates, currencies, equity and credit, where they exist, consistent with its strategic planning. The transactions made are intended to form a portfolio of derivatives that, with the assets and liabilities to be protected, provides greater cash flow stability and profitability in the presence of price and rate volatility. Internal Log-In policy prohibits trend speculation and sets a ceiling on the volume of assets or liabilities representing the Company s exposure. The strategy for derivatives transactions is periodically reviewed by the management and any hedges must be approved. In the first quarter of 2015, based on the macroeconomic outlook, the Company entered into derivative transactions in fuel (bunker asset, benchmarked to US Gulf Coast Fuel Oil No. 6, 3.0%), and more specifically, undertook in respect of the counterparty to liquidate its position based on the average closing price of the underlying asset. As a result, if the bunker price on the settlement date is lower than that stipulated in contract, the Company will incur in a loss. 36

39 If the settlement price is higher, the loss will be borne by the seller. The objective of the transactions is to minimize the risk of possible increases in the price of the fuel used by Company vessels, as a percentage of the volume of fuel expected to be consumed by Log- In, in the year Platt s Oilgram Price Report is the asset trading benchmark. The price varies each trading period and is set as the unweighted arithmetic average of commodity benchmark prices. It is calculated monthly from the date of the contract until the transaction matures. The transaction is settled by the fifth business day of the following month. All derivative transactions are disclosed at fair value on the balance sheet under the line item "other current assets". Gains and losses are duly recognized in the income statement for the period. Derivatives market values (Level 1) are summarized below: As at March 31, 2015: Description Reference Value (notional) Assets Fair Value Liabilities Cumulative effect on in Finance income (costs) Amount receivable/received Amount payable/paid Future Contracts: Purchase Commitments Bunker hedge (1) R$ 73,758 R$ 33,346 - R$ 12,989 R$ 165 (R$ 11,407) (1) Refers to 5,200 t/apr.2015; 7,499 t/may.2015; 6,774 t/jun.15; 7,059 t/jul.15; 7,565 t/aug.15; 6,584 t/sept.15; 6,586 t/oct.15; 6,533 t/nov.15 and 6,439 t/dec.15. As at December 31, 2014: Description Future Contracts: Purchase Commitments Reference Value (notional) Assets Fair Value Liabilities Amount receivable/received Amount payable/paid Bunker hedge (1) R$ 33,346 R$ 24,143 - R$ 18,515 R$ 246 (R$ 22,581) (1) Refers to 5,962 t/jan.2015; 4,036 t/feb.2015; 4,094 t/mar.2015; 4,968 t/apr.2015 and 4,387 t/may Cumulative effect on in Finance income (costs) When preparing the tables, the Company's management specified that curves used to mark the financial instruments market, valid on March 31, 2015, should be considered for the likely scenario. These curves represent the best estimate for future behavior of prices and represent the amount at which positions could be liquidated at maturity. TABLE SHOWING SENSITIVITY ANALYSIS - MARCH 31, 2015 TRANSACTION RISK LIKELY SCENARIO: POSSIBLE SCENARIO: REMOTE SCENARIO: Future purchase bunker price drop (R$ 12,989) (R$ 25,986) (R$ 41,910) The tables above show the sensitivity analysis of all positions open on March 31, The scenarios defined in this analysis were: Likely scenario: based on March 31, 2015 market curves. 37

40 Possible scenario: a 25% deterioration in the bunker price based on a 25% reduction in the market curves of the bunker price used for pricing instruments in the likely scenario, negatively impacting the fair value of derivative positions. Remote scenario: a 50% deterioration in the bunker price based on a 50% reduction in the market curves of the bunker price used for pricing instruments in the likely scenario, negatively impacting the fair value of derivative positions. The financial instruments were calculated at the market value based on March 31, 2015 market curves. Derivative transactions are made with prime financial institutions. Limits on exposure to financial institutions are approved by management. Financial institution credit risks are monitored using a method set out in a Log-In policy document. As of March 31, 2015, the Company has outstanding transactions with the following financial institutions: Morgan Stanley Capital Group Inc. and Barclays Bank PLC. 20.5) Swap Agreement To protect Dollar loan pegged to a percentage of CDI Swap Agreement - the aim is to minimize foreign exchange exposure on the Bank Credit Bill - Transfer of Funds Raised Abroad, Resolution 4.131/62 (item d) Note 14). The Company entered into a swap in (i) September 13, 2011, December 30, 2014 and February 23, 2915 with a long position in dollars (a notional value of US$22,000, US$6,000 and US$10,000 respectively) at a rate of 4.12% p.a., 4.65%p.a and 4.59%p.a., and with a short position in CDI, at a rate of 112%, % and %p.a., maturing on August 18, 2015, November 26, 2019 and January 23, 2017 (ii) August 23, 2013 and February 20, 2015 with a long position in dollars (a notional value of US$12,000 and US$9,000 respectively) at a rate of 4.11% p.a. and 3.529%,and with a short position in CDI, at a rate of 119% and 117%p.a, maturing on August 23, 2016 and June 17, 2017, (iii) December 23, 2013 with a long position in dollars (a notional value of US$15,000) at a rate of 4.0% p.a. and with a short position in CDI, at a rate of 120%, maturing on December 23, 2016; (iv) January 28, 2014 with a long position in dollars (a notional value of US$6,184) at a rate of 4.15% p.a. and with a short position in CDI, at a rate of 120%, maturing on January 30, 2017; and (v) June 16, 2014 with a long position in dollars (a notional value of US$30,000) at a rate of 3.60% p.a. and with a short position in CDI, at a rate of 118.4%, maturing on June 16, 2017, and (vi) January 12, 2015 with a long position in dollars (a notional value of US$7,524) at a rate of 494%p.a., and with a short position in CDI, at a rate of 130%p.a., maturing on June 16, Maturity of the principal and amortization of loan interest and the swap all take place on the same dates. The Company has the right to settle the principal, the financial charges and the swap transaction on a net basis, if necessary, and to settle these on the respective maturity dates in the contracts. Thus the financial instrument and their respective charges are considered a single synthetic financial instrument. Its effects are shown on the balance sheet and in the net financial income of the Company as a single financial instrument to more appropriately reflect the amounts and future cash flows, as well as risks to which those cash flows are exposed. The market value of this financial instrument was calculated considering the debt with the financial charges corresponding to an average rate of % of CDI, whose net effect in the finance expenses in the first quarter of 2015 was R$6,978 in the Consolidated and R$4,944 in Parent Company (in the first quarter of 2014 it was R$2,708 in the Consolidated and R$ 1,395 in the Parent Company). 38

41 The open swaps contracts maturing in August, 2015, January, 2017 and November, 2019 (Banco do Brasil S.A.); August and December, 2016, January and June, 2017 (Banco Itaú S.A.); June, 2017 (Banco HSBC Bank Brasil S.A.) and June, 2017 (Banco Votorantim S. A.) were signed with the counterparties represented by the aforementioned banks and are detailed below: Consolidated (IAS 34 and CPC 21) Ave. Principal amount Index rate Fair Value Loss/Gain Description BB Sw ap contract (1): Long leg Dollar long position 59,554 30,621 US$ % 65,351 31, Short leg: Floating rate CDI Short position 51,794 25,654 CDI 112.0% 58,905 26,192 (1,166) (2,199) Itaú Sw ap contract (1): Long leg Dollar long position 85,814 74,513 US$ % 86,689 75, Short leg: Floating rate CDI Short position 68,853 68,010 CDI 119.6% 70,709 69,639 (3,287) (9,404) HSBC Swap contract (1): Long leg Dollar long position 95,177 78,551 US$ % 162, , Short leg: Floating rate CDI Short position 65,630 66,416 CDI 118.4% 138, ,414 (1,883) (4,263) Votorantim Swap contract (1): Long leg Dollar long position 24,592 - US$ % 24, Short leg: Floating rate CDI Short position 20,160 - CDI 118.4% 21,084 - (642) - Parent Company (CPC 21) Ave. Principal amount Index rate Fair Value Loss/Gain Description BB Sw ap contract (1): Long leg Dollar long position 59,554 30,621 US$ % 65,351 31, Short leg: Floating rate CDI Short position 51,794 25,654 CDI 112.0% 58,905 26,192 (1,166) (2,199) Itaú Sw ap contract (1): Long leg Dollar long position 30,915 25,878 US$ % 31,170 26, Short leg: Floating rate CDI Short position 27,537 24,105 CDI 119.0% 28,421 24,578 (1,895) (3,206) HSBC Swap contract (1): Long leg Dollar long position 95,177 78,551 US$ % 162, , Short leg: Floating rate CDI Short position 65,630 66,416 CDI 118.4% 138, ,414 (1,883) (4,263) 39

42 The likely scenario takes account of future US dollar rates, as quoted on BM&FBOVESPA on the maturity dates of financial instruments exposed to an exchange rate risk. The possible and remote scenarios take account of a rise in the US dollar of 25% (R$3.87/US$1.00) and 50% (R$4.65/US$1.00), respectively. The likely, possible and remote scenarios are submitted in compliance with CVM Instruction nº 475/08. The Management has used the likely scenario in assessing possible variations in the exchange rate and submits said scenario in compliance with IFRS 7 Financial Instruments: Disclosures. The sensitivity analysis is given in the table below: Consolidated (IAS 34 and CPC 21) SCENARIOS TRANSACTION RISK LIKELY POSSIBLE REMOTE BB Sw ap Dollar increase (R$ 1,314) (R$ 1,643) (R$ 1,971) Itaú Sw ap Dollar increase R$ 981 R$ 1,227 R$ 1,472 HSBC Sw ap Dollar increase R$ 1,677 R$ 2,096 R$ 2,515 Votorantim Sw ap Dollar increase R$ 681 R$ 851 R$ 1,021 Parent Company (CPC 21) SCENARIOS TRANSACTION RISK LIKELY POSSIBLE REMOTE BB Sw ap Dollar increase (R$ 1,314) (R$ 1,643) (R$ 1,971) Itaú Sw ap Dollar increase R$ 629 R$ 786 R$ 943 HSBC Sw ap Dollar increase R$ 1,677 R$ 2,096 R$ 2, NET OPERATING REVENUE The table below is a reconciliation of gross operating revenue with net operating revenue recognized in the income statement for the first quarters of 2015 and 2014: Consolidated (IAS 34 and CPC 21) Parent Company (CPC 21) Gross operating revenue 292, , , ,811 Freight revenue: 234, , , ,124 Domestic market 195, , , ,986 Foreign market 38,912 34,138 38,912 34,138 Service revenue: 57,762 63,277 18,448 17,687 Domestic market 34,659 39,066 14,670 13,802 Foreign market 23,103 24,211 3,778 3,885 Tax on sales (29,319) (27,297) (26,366) (22,661) Net operating income 263, , , ,150 40

43 22. COST OF FREIGHT AND SERVICES The cost of freight and services provided for the first quarters of 2015 and 2014 are as follows: Consolidated (IAS 34 and CPC 21) Parent Company (CPC 21) Payroll and related charges (17,394) (16,220) (11,034) (10,485) Benefits (5,166) (4,273) (3,243) (2,599) Material (2,665) (3,185) (1,787) (2,434) Fuel and gas (21,616) (27,860) (21,142) (27,422) Freight, rental and leasing (63,521) (45,078) (60,554) (41,763) Contracted services (99,049) (86,877) (91,569) (78,141) Depreciation and amortization (13,278) (12,759) (8,335) (8,224) Other (6,829) (11,526) (4,988) (7,254) (229,518) (207,778) (202,652) (178,322) 23. INFORMATION ON THE NATURE OF THE OPERATING INCOME (EXPENSE) RECOGNIZED IN THE INCOME STATEMENT The Company s income statement is presented based on a functional classification of expenses. Information on the nature of this operating income (expense) recognized in the income statement is given below: Consolidated (IAS 34 and CPC 21) Parent Company (CPC 21) Administrative and commercial - expenses: Payroll and related expenses (8,893) (8,290) (8,177) (7,687) Depreciation and Amortization (2,769) (3,040) (2,757) (3,029) Allowance for doubtful accounts 613 (2,311) 613 (1,177) Leases, consulting, public services and marketing / communication (2,322) (1,982) (2,161) (1,954) Contractors and other services (1,278) (581) (1,148) (166) Raw material (54) (45) (54) (45) Provisions for administrative expenses (771) (166) (771) (218) (15,474) (16,415) (14,455) (14,276) Reversal (establishment) of provisions for contingencies 515 1,654 (94) (1,645) Income from AFRMM-grant invested 17,257 22,636 17,257 22,636 Other income (expenses), net (495) 3,757 (9) 754 Losses from non-chargeable receivables (1,623) (205) (951) (205) Share of profits in subsidiaries and associates - - 5,619 9, ,427 7,367 17,134 41

44 24. NET FINANCE INCOME Finance income: Investments Gains on swaps 51,659 6,391 37,589 5,310 Bunker hedges - (18) - (18) Interest and commissions Deferred interest on disposal of assets Other ,409 7,976 38,332 6,700 Monetary and exchange variations 3,609 (779) 1,914 (1,749) Finance costs 56,018 7,197 40,246 4,951 Charges on loans and financing (15,909) (11,782) (15,528) (11,409) Interest and related parties - - (1,122) (710) Financial transaction tax-iof (1,123) (903) (1,101) (864) Interest on contingency (labor, civil and tax) 43 (1,689) (146) (83) Bunker hedges (5,671) (943) (5,671) (943) Charges on swaps (13,037) (13,072) (11,396) (8,537) Interest and commissions (2,688) (1,269) (2,188) (1,153) Other (184) 784 (192) (34) (38,569) (28,874) (37,344) (23,733) Monetary and exchange variations (173,245) 23,787 (159,234) 20,924 (211,814) (5,087) (196,578) (2,809) Net finance income (155,796) 2,110 (156,332) 2,142 Monetary and exchange variations are represented as follows: Consolidated (IAS 34 and CPC 21) Parent Company (CPC 21) Active monetary and exchange variations 3,609 (779) 1,914 (1,749) Passive monetary and exchange variations (173,245) 23,787 (159,234) 20,924 (169,636) 23,008 (157,320) 19,175 VITAL JORGE LOPES CEO and Investor Relations Director CLEBER CORDEIRO LUCAS Director MAURICIO TROMPOWSKY COSTA RAMOS Director GUSTAVO QUARESMA FREITAS Director MÁRCIO ARANY DA CRUZ MARTINS Director JOAQUIM SANCHES NETO Accountant - CRC.RJ /O-6 42

45 Business Environment To improve the handling and distribution of goods and merchandise in the country is essential condition for a competitive market. It is not enough the country to be plentiful of natural resources and raw materials, pursue lower productions costs, increase its industrial capacity and develop the sector s regulatory framework. Efforts are required addressing the enormous challenges in services rendering and removing the barriers of the lack of appropriate transport infrastructure and the obstacles of physical distribution of our products. This is the main issue of pursuing greater competitiveness in the Brazilian market and 2015 is a crucial year due to the adversities in the macroeconomic scenario. Brazil is an extremely favored country for cabotage shipping due to its natural conditions and demographic distribution. This a country with a navigable coast of 7,500 km, with over 30 organized ports and several private-use terminals. In addition, the country has a solid coastal concentration of productive and consumer sectors, with 80% of the population living up to 200 km from the coast. The maritime transportation of goods via the Brazilian coast has been conquering more and more followers. Over the past years, the cabotage sector has been recording growth rates exceeding two digits, especially containers shipment containing products which till then were mainly transported by the road system. The road modal over decades concerned only with liquid and solid bulk transportation, became a more attractive alternative after the revamp of major Brazilian ports, especially the Port of Santos/SP, and the regulation of the road sector, especially the Truck Driver Law, which restricted the truck driver's working hours to 12 hours worked for each five-hour and half rest, thus, ending exhausting, risky working hours and not unbiased in relation to cabotage. This is not a dispute between modals, but on the contrary, this is a real opportunity of complementarity and multimodal collaboration. Speaking of migration and collaboration between modals, goods can neither be collected in its origin nor delivered to its final destination without the participation of a flexible modal, such as road, to cover the last mile ends. In other words, neither the ship, nor the train or airplane nor even the duct is able to connect producer to final consumer directly. The rational integration of different modals, so that each logistic provider renders the most efficient services, thus, optimizing the domestic supply chain, enabling the logistics planning, as well as the multimodal development. In 2015, Brazil s economic and political situation is producing challenging effects on the companies. The economic activity slowdown, now more abrupt, has been affecting the businessmen s perception and they are increasingly seeking to optimize costs and increase the efficiency of production chains. There are lots of figures, studies and intentions to evidence that intermodal is the best way to make logistics in Brazil more efficient. Amid this scenario of adversities, cabotage is positioned as one of the most obvious and accessible solutions. It is not a coincidence that Log-In recorded cabotage volume growth of 26.6% in 1Q15, against the 5.9% drop of Brazilian industrial production in the same period. The market conditions are favorable to logistics solutions providers with controlled cost structure, qualified and motivated team and with capacity of prospecting and identifying new cargoes and niches. Log-In believes and will endeavor all its efforts to advance even more in the logistics chain of current Cabotage customers and will pursue each opportunity to bring new customers to this modal. In 2015, the Company seeks to outpace the record of 2,000 active customers in Cabotage, a figure much higher than the 300 users recorded in

46 Volumes 1Q15 Coastal Shipping In 1Q15, Coastal Shipping showed a new record of volume, by handling 75,500 TEUs (Cabotage, Mercosur and Feeder), 35.7% up on 1Q14. The TEUxMile production indicator rose 40.3% in 1Q15, from 80.0 million in 1Q14 to million in 1Q15. Cabotage maintained its upward trend in 1Q15, reaching 35,600 TEUs (+26.6% year-on-year). It is worth noting that the solid and continued growth of Log-In in such mode occurs amid a scenario of slowdown in industrial production, trade and services. This fact evidences the Company s capacity of increasingly attracting more clients, who migrated from the road mode, searching for logistics efficiency and lower costs. MERCOSUR volumes are still down, but the drop was smaller than those recorded in previous quarters. The 1Q15 volumes totaled 5,700 TEUs (-9.7% year-on-year), reflecting the continuing economic crisis in Argentina and the import restrictions imposed by the Argentinean government. It is worth mentioning that feeder volumes posted an improvement, increasing by 61.1% over 1Q14 to 34,200 TEUS, underlining the versatility of this service which involves shipping to several Brazilian ports for several international shipping companies. With the increase in the size of the ships docking at certain Brazilian hub ports, the possibility of increasing feeder volumes on the Brazilian coastline is becoming increasingly likely and Log-In is definitely the best-equipped player to meet the needs of longhaul shippers who need to distribute import cargo or send export cargo to a variety of Brazilian ports. In addition, ANTAQ (the National Waterway Transport Agency) recently issued a resolution establishing new procedures and criteria for chartering vessels, imposing restriction on so-called flag sale operations, whereby Brazilian cabotage shippers on paper sell their name to foreign shippers. The segments with highest growth in Cabotage in 1Q15 over 1Q14 were: electrical and electronic equipment (+20%), food and beverage (+26%); metal, mining and steel (+48%), chemical and petrochemical products (+49%) and packaging (+156%). Below, the Cabotage volume performance in each service: SAS (South Atlantic Service) the cabotage volumes remained in line in the two routes, Northbound (NB) and Southbound (SB); SAM (Amazon Service) - in 1Q15, cabotage in this service went up 12.3% over 1Q14, and the SB route was 39.1% up year-on-year; SCN Express (North Coast Services) - in 1Q15 cabotage in this service recorded a substantial growth of 150.4% year-onyear. 3

47 Shipping Volumes/Container (TEUs thousand) From the operational viewpoint, we point out a high operational readiness rate of the Company s ships in another consecutive quarter, percentage above the international benchmarking: In 1Q15, Log-In maintained a high level of performance in fulfilling road transport pick-ups and deliveries, attaining 99% in the period, in more than 25,000 transactions undertaken. As part of our continued improvement program, we have better controlled the road transport punctuality indicator, where we measure the correct pick-ups and deliveries on the date and hour scheduled versus the date and hour executed and, according to the graph below, we can see the advances quarter by quarter, reaching 90% in 1Q15. This level of efficiency is one of the pillars that support the Company s strategy of continually raising the quality and competitiveness of the cabotage service, leveraging operational efficiency and standing out as a coastal shipping company with the best services rendered and higher indicators in road transport delivery. 4

48 Bulk handled by Log-In to Alunorte, recorded a slight drop in the volumes transported, reaching 1,037.3 thousand tonnes in 1Q15, 2.1% down on 1Q14, in line with Alunorte s operational schedule in the period. TVV Vila Velha Terminal No 1T15, Vila Velha Terminal reached 54,000 TEUs in container handling, 6.1% down on 1Q14 (a 0.5% increase in the handling of full containers and 17.6% drop in the handling of empty containers). In 1Q15, import containers went down 9.2% while exports moved up 11.5%, partially due to Real depreciation against the US dollar. General cargo volume dropped by 42.1%, from 130,000 tonnes, in 1Q14, to 75,300 tonnes. In the same period, granite volume fell by 50.1%, from 106,100 tonnes to 52,900 tonnes, while project cargo and vehicle volume recorded respective declines of 42.4% and 40.9%. These reductions were partially due to the shrinkage of the domestic market, together with the lower pace of major infrastructure works, which has a direct impact on the importation of machinery and equipment. 5