Lorenzo Shipping Corporation 3o227

Lorenzo Shipping Corporation Background LORENZO SHIPPING CORPORATION (LSC) is a leading liner shipping company engaged in containerized cargo transport. LSC continually strives to provide excellent service and dedication in helping customers find solutions to their transport needs. With customer-focused processes, dedicated employees and results-driven management standards, LSC commits operations above industry standards that enable its customers to ensure availability of its products to end customers. Lorenzo Shipping Corporation maintains a fleet of seven vessels calling 10 major ports nationwide, namely: Manila, Bacolod, Iloilo, Cebu, Dumaguete, Cagayan de Oro, Zamboanga, Davao, Cotabato and General Santos.

History LSC is founded and established. By the late 70's, LSC shifts its business emphasis from being a break-bulk cargo carrier to containerized cargo operations. 199 Neptune Orient Lines (NOL), Singapore's national shipping line, becomes an investor. 0

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In December, LSC and NOL enter into Technical Agreement.

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In July, LSC debuts in the Philippine Stock Exchange as a publicly-listed company. - LSC celebrates its 25 years of continuous service to the shipping industry with the theme, "Lorenzo Shipping Corporation: 25 Years of Shipping Excellence". 199 - In January, "We carry. We move. We deliver." Is launched as the company's slogan. 8

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Lorenzo Shipping Corporation Integrated Systems (LSCIS) goes online. LSC launches its new website, www.lorenzoshipping.com, giving its customers access to the weekly vessel schedules. National Marine Corporation (NMC) purchases the entire equity of NOL in LSC.

LSC acquires a 250-TEU vessel and renames it M/V 'Lorcon Manila'. During the same year, the 2,500 sq. meter covered LCL (Less-than-Container-Load) warehouse inside North Harbor is inaugurated. 200 - LSC upgrades its container handling into straddle carrier operations at its -

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container yards in Manila, Cebu and Cagayan de Oro. LSC receives a Safety Recognition Award from the Bureau of Working Conditions of the Department of Labor and Employment. - LSC acquires a 797-TEU Vessel and renames it MV 'Lorcon Dumaguete'. Also, LSC receives a Gold Award from Coca-Cola Bottlers Philippines Inc. for Quality, Servic -

SERVICES Door to Door  We pick-up the cargoes at your premises and deliver to your consignee's door.  Shippers' load, weight and count.  Special equipment/materials needed for stuffing or stripping shall be provided by the shipper or consignee. Pier to Door  We receive your cargoes at our yard (CY) and deliver to your consignee's door.  Shippers' load, weight and count.  Special equipment/materials needed for stuffing or stripping shall be provided by the shipper or consignee. Door to Pier  We pick-up your cargoes at your door and consignee picks-up cargo at our yard (CY).  Shippers' load, weight and count.  Special equipment/materials needed for stuffing or stripping shall be provided by the shipper or consignee. Pier to Pier  We receive your cargoes at our yard (CY) and consignee picks-up cargo at our yard.  Shippers' load, weight and count.  Special equipment/materials needed for stuffing or stripping shall be provided by the shipper or consignee.

Lorenzo Shipping Corporation Statement of Financial Performance Years Ended December 31 2013

FREIGHT REVENUE 1,837,685,223 DIRECT COSTS Cost of services Terminal expenses 1,583,873,962 GROSS PROFIT 253,811,261 GENERAL AND ISTRATIVE EXPENSES FINANCE COSTS AND OTHER CHARGES OTHER INCOME (CHARGES) (194,995,539) INCOME BEFORE INCOME TAX 58,815,722 PROVISION FOR (BENEFIT FROM) INCOME TAX Current Deferred 3,573,939 NET INCOME 62,389,661

1,360,358,624 223,515,338

142,400,335 26,729,793 25,865,411

2,003,485 5,577,424

Lorenzo Shipping Corporation Statement of Financial Position December 31 2013 ASSETS Current Assets Cash and cash equivalents Trade and other receivables Inventories Prepayments and other current assets 971,853,496

191,193,593 606,103,744 30,460,277 144,095,882

Noncurrent Assets Property and equipment 1,681,456,399 Deferred income tax asset 39,778,907 Other noncurrent assets 16,936,697 1,738,172,003 TOTAL ASSETS 2,710,025,499 LIABILITIES AND EQUITY Current Liabilities s payable and accrued expenses 357,479,907 Short-term borrowings 39,158,822 Current portion of: Long-term borrowings 213,979,430 Obligations under finance lease 25,811,012 636,429,171 Noncurrent Liabilities Long-term borrowings - net of current portion 648,316,609 Obligations under finance lease - net of current portion 105,948,729 Pension obligation 64,581,310 818,846,648 EQUITY Common stock 555,652,251 Additional paid-in capital 459,791,492

Retained earnings 242,431,787 Treasury shares (3,125,850) 1,254,749,680 TOTAL LIABILITIES AND EQUITY 2,710,025,499

Transactions 1. Freight Revenue  March 19, 2014 LSC receives P619,201,115 from Airport Equipment and Logistics Corp. for the freight services rendered on .  June 6, 2014 LSC receives cash payment from Magsaysay Marine Services In. for the freight services for P121,508,176.  August 24, 2014 LSC receive P50,512,315 from OYG Transport Inc. for the freight services on .  November 17, 2014 LSC receive a P368,432,611 for the freight services rendered to One Stop Logistic Solution Inc on .  December 15, 2014 LSC receive cash payment from NMC Container Lines Inc. P258,782,311 for the freight services. 2. Cost of Services  January 9, 2014 LSC paid P432,570.380 for the fuel, diesel and lubricants used for operation.  January 26, 2014 LSC paid P386,950,620 for the materials and spare parts.  July 26, 2014 LSC recognized the insurance vessels expense P90,981,767  December 31, 20124 LSC recognize the depreciation expense for vessels used in operation P323,438,570.  December 31, 2014 LSC paid P296,680,395 for the outside services incurred.  December 31, 2014 LSC paid a total amount of P96,468,769 for the salaries, wages and other benefits incurred for the personnel’s. 3. Terminal Cost  April 30 2014, LSC paid P53,687,280 for the rental expense for container van.

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June 30 2014 LSC paid rental expense of warehouse and offices P6,8932,110 . October 30, 2014 LSC paid P48,650,300 for equipment rental. December 31, 2014 LSC paid P13,239,244 for the outside service related to terminal expense. December 31, 2014 LSC paid an amount of P15,380,253 for the container rental.

4. General and istrative Expenses  May 28, 2014 LSC paid P5,385,000 for taxes and licenses.  September 23, 2014 LSC incurred repair and maintenance of machine unrelated to operation for P2,538,432.  September 28, 2014 LSC purchased office supplies for P3,238,756 on .  October 2, 2014 LSC conduct a employees training and paid a total amount of P2,612,080.  November 24, 2014 LSC incurred total amount of P5,376,990 for advertising the company.  December 31, 2014 LSC recognized the depreciation of buildings/offices for P10,738,300.  December 31, 2014 LSC paid P7,138,455 for the communication, light and power. 5. Finance Cost and Other Charges  March 31, 2014 LSC pays an installment for long term borrowings a total of P200,000,000 with interest of P35,268,770.  April 30, 2014 LSC pays an interest for short term borrowing P1,986,237.  December 31, 2014 LSC pays an annual payment of lease liability P2,500,000 and an interest of P1,500,219. 6. Shareholders’ Equity  February 14, 2014 LSC issued 100,000 shares, P5.90 par value to A Corp. in exchanged of Legal Service P600,000.  June 19, 2014 LSC receives a cash subscription from J Corp. 200,000 shares; 5.90 par value at P6.50 per share.  December 15, 2014 LSC receives a cash subscription from S Corp. 150,00 shares P5.90 par value at P8.50 per share.