Cemex 1997 Annual Report Download - page 49

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43
The Board of Directors and Stockholders
Cemex, S.A. de C.V.:
(Thousands of Mexican pesos)
We have audited the consolidated and parent company-only balance sheets of Cemex, S.A. de C.V. and Cemex, S.A. de
C.V. and Subsidiaries as of December 31, 1997 and 1996, and the related consolidated and parent company-only
statements of income, changes in stockholders’ equity and changes in financial position for the years then ended. These
financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on
these financial statements based on our audits. We did not audit the consolidated financial statements of Grupo
Empresarial Maya, S.A. de C.V. and Subsidiaries, and certain financial statements of other consolidated subsidiaries which
were examined by other auditors. The financial statements of these subsidiaries reflect total assets and total revenues
constituting 9% and 9% in 1997 and 7% and 6% in 1996, respectively, of the related consolidated totals. The parent
company’s investment in these subsidiaries was $11,932,900 and $6,811,280 as of December 31, 1997 and 1996,
respectively, and its share in their net income (loss) was $724,392 and $(1,798,624) for the respective years then ended.
Our opinion expressed herein, insofar as it relates to the amounts included for such subsidiaries, is based solely upon the
reports of the other auditors.
We conducted our audits in accordance with generally accepted auditing standards in Mexico. Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of
material misstatements and are prepared in accordance with generally accepted accounting principles. An audit consists
of examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant estimates made by management, as well as evaluating
the overall financial statements presentation. We believe that our audits provide a reasonable basis for our opinion.
As described in notes 2B and 2C, during 1997, the Company adopted the provisions of Bulletin B-15 “Foreign Currency
Transactions and Translation of Foreing Currency Financial Statements”, which requires financial statements of
consolidated foreign companies be restated for inflation in their functional currency based on the subsidiary country’s rate
of inflation and subsequently translated to Mexican pesos by using the foreing exchange rate at the balance sheet date. In
addition, the monetary position gain or loss is determined under Bulletin B-15 by considering the rate of inflation of each
of the subsidiaries’ countries. Prior to 1997, the restatement for inflation of the financial statements of foreing subsidiaries
and the monetary position gain or loss were determined based upon the inflation rate in Mexico. The comparative 1996
consolidated financial statements have restated for inflation by a weighted average index, that takes into consideration the
inflation rates of the countries in wich subsidiaries operate and the exchange rate of each country vis-a-vis the Mexican
Peso.
In addition, as described in note 2B, during 1997 the Company adopted the provisions established in the fifth amendment
to Bulletin B-10 for recognition of the effects of inflation of property, plant and equipment. This amendment to B-10
requires the use of the national inflation index of each country to restate property, plant and equipment of that country
and permits the use of a specific inflation index for imported property, plant and equipment. Prior to 1997, their
restatement was made based upon appraisals made by independent expert appraisers. The appraised amounts of property,
plant and equipment as of December 31, 1996, served as the beginning bases for purposes of applaying the 1997 inflation
indices.
In our opinion, based upon our audits and the reports of other auditors, the consolidated and parent company-only
financial statements referred to above present fairly, in all material respects, the financial position of Cemex, S.A. de C.V.
and Cemex, S.A. de C.V. and Subsidiaries at December 31, 1997 and 1996, and the results of their operations, the changes
in their stockholders’ equity and the changes in their financial position for the years then ended, in accordance with
generally accepted accounting principles in Mexico.
KPMG Cárdenas Dosal, S.C.
Rafael Gómez Eng
Monterrey, N.L., Mexico
January 19, 1998.
Auditors’
report
CEMEX, S.A. DE C.V. AND SUBSIDIARIES