building a STRONGER foundation - Cemex
building a STRONGER foundation - Cemex
building a STRONGER foundation - Cemex
You also want an ePaper? Increase the reach of your titles
YUMPU automatically turns print PDFs into web optimized ePapers that Google loves.
1. DESCRIPTION OF BUSINESS<br />
CEMEX, S.A.B. DE C.V. AND SUBSIDIARIES<br />
Notes to the Consolidated Financial Statements<br />
As of December 31, 2010, 2009 and 2008<br />
(Millions of Mexican pesos)<br />
CEMEX, S.A.B. de C.V. is a Mexican corporation, a holding company (parent) of entities whose main activities are oriented to the<br />
construction industry, through the production, marketing, distribution and sale of cement, ready-mix concrete, aggregates and other<br />
construction materials. CEMEX is a public stock corporation with variable capital (S.A.B. de C.V.) organized under the laws of the United<br />
Mexican States (“Mexico”).<br />
CEMEX, S.A.B. de C.V. was founded in 1906 and was registered with the Mercantile Section of the Public Register of Property and<br />
Commerce in Monterrey, N.L., Mexico in 1920 for a period of 99 years. In 2002, this period was extended to the year 2100. The shares of<br />
CEMEX, S.A.B. de C.V. are listed on the Mexican Stock Exchange (“MSE”) as Ordinary Participation Certificates (“CPOs”). Each CPO<br />
represents two series “A” shares and one series “B” share of common stock of CEMEX, S.A.B. de C.V. In addition, CEMEX, S.A.B. de C.V.<br />
shares are listed on the New York Stock Exchange (“NYSE”) as American Depositary Shares or "ADSs" under the symbol “CX.” Each ADS<br />
represents ten CPOs.<br />
The terms “CEMEX, S.A.B. de C.V.” or the “Parent Company” used in these accompanying notes to the financial statements refer to<br />
CEMEX, S.A.B. de C.V. without its consolidated subsidiaries. The terms the “Company” or “CEMEX” refer to CEMEX, S.A.B. de C.V.<br />
together with its consolidated subsidiaries. The issuance of Parent Company only and consolidated financial statements was authorized by the<br />
Company’s management on January 27, 2011, and they were approved at the February 24, 2011 stockholders’ meeting.<br />
2. SIGNIFICANT ACCOUNTING POLICIES<br />
A) BASIS OF PRESENTATION AND DISCLOSURE<br />
The financial statements are prepared in accordance with Mexican Financial Reporting Standards (“MFRS”) issued by the Mexican Board for<br />
Research and Development of Financial Reporting Standards (“CINIF”), which recognized the effects of inflation on the financial<br />
information until December 31, 2007.<br />
Definition of terms<br />
When reference is made to pesos or “Ps,” it means Mexican pesos. Except when specific references are made to “earnings per share” and<br />
“prices per share,” the amounts in the financial statements and the accompanying notes are stated in millions of pesos. When reference is<br />
made to “US$” or dollars, it means millions of dollars of the United States of America (“United States”). When reference is made to “£” or<br />
pounds, it means millions of British pounds sterling. When reference is made to “€” or euros, it means millions of the currency in circulation<br />
in a significant number of European Union (“EU”) countries.<br />
When it is deemed relevant, certain amounts presented in the notes to the financial statements include between parentheses a translation into<br />
dollars, into pesos, or both, as applicable. These translations are provided as informative data and should not be construed as representations<br />
that the amounts in pesos or dollars, as applicable, actually represent that those peso or dollar amounts could be converted into pesos or<br />
dollars at the rate indicated. The translation procedures used are detailed as follows:<br />
In 2010, 2009 and 2008, translations of pesos into dollars, and dollars into pesos, were determined using the closing exchange rates of<br />
Ps12.36 per dollar, Ps13.09 per dollar and Ps13.74 per dollar for balance sheet amounts, respectively, and using the average exchange rates<br />
of Ps12.67 per dollar, Ps13.60 per dollar and Ps11.21 per dollar for the statements of operations amounts for 2010, 2009 and 2008,<br />
respectively.<br />
When the amounts between parentheses are the peso and the dollar, it means the disclosed amounts were originated in other currencies.<br />
Such amounts were determined by translating the foreign currency figures into dollars using the respective closing exchange rates at yearend,<br />
and then translated into pesos using the closing exchange rates of Ps12.36 per dollar in 2010, Ps13.09 per dollar in 2009 and Ps13.74<br />
per dollar in 2008.<br />
Inflationary accounting<br />
Beginning on January 1, 2008, pursuant to MFRS B-10, “Inflation Effects” (“MFRS B-10”), the financial statements subject to restatement<br />
are those related to an entity whose functional currency corresponds to a country in which the cumulative inflation rate over the preceding<br />
three years equals or exceeds 26% (i.e., a high-inflation environment). Designation takes place at the end of each year, and inflation<br />
restatement is applied prospectively. In 2010, CEMEX restated the financial statements of its subsidiaries in Egypt, Nicaragua and Costa<br />
Rica; in 2009, the financial statements of its subsidiaries in Egypt, Nicaragua, Latvia and Costa Rica; and in 2008, the financial statements of<br />
its subsidiaries in Costa Rica and Venezuela.<br />
F-8